England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
EATRF 97/0863/3

		Royal Courts of Justice Strand, London WC2A 2LL
		2nd April 1998

LORD JUSTICE ROBERT WALKER: This is an appeal with the leave of the full court from an order made on 16 January 1997 by the Employment Appeal Tribunal presided over by Lindsay J. The decision is reported at 1997 ICLR 390. The Employment Appeal Tribunal gave leave to the appellant, Mr Charles Jones, to amend his notice of appeal, allowed the appeal and remitted the matter for consideration by a differently constituted Industrial Tribunal. It should be said at the outset that the direction for remission to a differently constituted tribunal was made because the original members were unlikely to recollect evidence given at three separate hearings during the first half of 1995; the inconvenience of reconvening them was therefore not justified. There was no question of bias or anything of that sort.

The appeal to this court is unusual since the only issue (although it is elaborated in six paragraphs of the notice of appeal) is whether the Employment Appeal Tribunal was right in exercising its discretion to allow amendment of the notice of appeal to it, and so to entertain a point of law which was conceded before the Industrial Tribunal.

The appellants in this court (who were respondents before the Employment Appeal Tribunal) are the Governors of the Burdett Coutts School, a primary school in Rochester Street, London, SW1. It is a church school, classified as a voluntary aided school. Mr Jones (the original applicant, the appellant before the Employment Appeal Tribunal and the respondent in this court) was employed as schoolkeeper at the school.

Mr Jones began to work for the Inner London Education Authority in 1973. He was employed as the schoolkeeper at the school, with residential accommodation provided, from 1981 until June 1994 when he became the site manager, a different post carrying lower remuneration. He was still in that post at the time of the hearings before the Industrial Tribunal. It was the termination of his employment as schoolkeeper that led to his complaint to the Industrial Tribunal, by an originating application made on 12 September 1994. His original complaint was of "unlawful selection for redundancy or in the alternative unlawful dismissal". The complaint proceeded as one of unlawful dismissal. There was no question of selection because there was only one schoolkeeper.

The facts found by the Industrial Tribunal are set out in its written decision and for the purposes of this appeal they can be stated quite shortly. On l April 1990 Westminster City Council became Mr Jones' employer. In 1992 the City Council adopted a new policy about contracting out school cleaning services, but the school governors decided to continue with their existing arrangements and in consequence Mr Jones became their employee. One of his main duties was to supervise the school cleaners, who arrived for work at 6 am. Mr Jones' official hours of work began at 7 am and so he earned overtime for the first hour of the day. His overtime earnings made him the most highly paid school employee apart from the headteacher.

The school governors found that their total cleaning costs were high and in July 1993 there was a reappraisal. The outcome was that in November 1993 the governors decided to engage contractors to do the cleaning. There would therefore no longer be a need for the schoolkeeper to supervise the cleaners. Mr Jones was present at meetings of the governors' premises committee. At one meeting Mr Robinson of Unison (Mr Jones' trade union) was present.

By January 1994 the governors had prepared a draft job description for school site manager which (as the Industrial Tribunal found after hearing evidence on the issue) involved a significant reduction in the schoolkeeper's duties (especially as regards supervision of cleaners), the reduction not being counterbalanced by some new responsibilities. The estimated loss of income was £35 a week, or about £l,800 a year.

The governors approved the job description and offered the job to Mr Jones. What happened was described in the Industrial Tribunal's decision as follows,

"The letter and offer of the post of site manager was dated 13 May 1994, and it was confirmed in it that the Governors would not be prepared to pay the post holder above the rate for the grade of Manual Worker 5, which was in line with other similar posts in the authority. The Applicant was asked to give his reply in writing within the next 14 days. As a concession the new post would carry with it a lead-in period of 12 weeks during which time the Applicant would continue to be paid at his existing salary. The new post had a 39 hour working week which began at 6.30 am and ended at 5 pm from Monday to Friday, and overtime would be agreed with the Head Teacher and be entirely at her direction. He was told that if he did not wish to accept the new post he would be declared redundant and would receive 12 weeks notice of termination, and the notified entitlements. On 25 May 1994, the Applicant replied to Rev. Godsall saying that he had decided to accept the post of site manager. He added that after 13 years service, and the financial restraint he had been put under, he felt that he had been very unfairly treated. He gave notice that he was seeking legal advice for unfair dismissal under his existing contract of employment"

Mr Jones was influenced in his decision by his wish not to lose his accommodation.

The Industrial Tribunal concluded in paragraphs 18 and 19 of their decision,

"There was to be a termination of the Applicant's contract of employment by reason of a diminution of the need for the Applicant to be involved in the cleaning of the Burdett Coutts School, a substantial part of his former duties, and this was to be a dismissal by reason of redundancy as defined in section 81(2)(b) of the Employment Protection (Consolidation) Act 1978.

The Applicant has continued to work for the Respondent as site manager in pursuance of the offer accepted by him on 25 May 1994 which took effect from 13 June 1994. Re-engagement took effect and accordingly, in our unanimous opinion the Applicant is not to be regarded as having been dismissed by the Respondent, this by reason of the provisions of section 84(l) of the Employment Protection (Consolidation) Act 1978. The trial period required by section 84(4) was satisfied, in effect, by continuing the Applicant's salary at its previous level for longer than four weeks".

Therefore Mr Jones' complaint of unfair dismissal failed. If he had not been dismissed in the eyes

of the law, he could not have been unfairly dismissed.

Mr Jones appealed to the Employment Appeal Tribunal, which allowed his appeal and directed

remission to the Industrial Tribunal. The Employment Appeal Tribunal had to consider two

previous conflicting decisions which had not initially been cited to it. The Employment Appeal

Tribunal drew the parties' attention to these decisions and invited supplementary written submissions on them. That is the point which Miss Adrienne Morgan (appearing in this court, as she did on each occasion below, for the school governors) has submitted that the Employment Appeal Tribunal ought not to have entertained.

Before going further into the history of the proceedings I should briefly summarise the relevant statutory provisions. They have now been re-enacted in the Employment Rights Act 1996 but at the material time they appeared in Part V (Unfair Dismissal) and Part VI (Redundancy Payments) of the Employment Protection (Consolidation) Act 1978 ("the 1978 Act"). It is of some importance to note that that was the first consolidating Act which brought together these two important topics in employment law. They were originally introduced (in the case of unfair dismissal) by the Industrial Relations Act 1971 and (in the case of redundancy payments) by the Redundancy Payments Act 1965.

In Part V of the 1978 Act s.54 conferred the general right of an employee not to be unfairly dismissed, and s.55 contained the statutory definition of "dismissal" and other associated definitions and provisions. "Dismissal" was defined in terms of the termination of a contract of employment, not of the relationship of employer and employee : see the observations on this point of Garland J. In Hogg v Dover College [1990] ICR 39 at p.42. It was and is therefore possible for an employee to be unfairly dismissed by the termination of one contract, even though he continues (without a break) to work for the same employer, as Mr Jones did.

In Part VI of the 1978 Act s.81 conferred the general right to a redundancy payment where an employee who has been continuously employed for the requisite period is dismissed by reason of redundancy. Section 83 defined "dismiss" and "dismissal" for the purposes of Part VI in terms almost identical to those in s.55, except that its provisions were expressed to be subject to (among other provisions in Part VI) s.84.

S.84(l) was in the following terms:"(l) If an employee's contract of employment is renewed, or he is re-engaged under a new contract of employment in pursuance of an offer (whether in writing or not) made by his employer before the ending of his employment under the previous contract, and the renewal or re-engagement takes effect either immediately on the ending of that employment or after and interval of not more than four weeks thereafter, then, subject to subsections (3) to (6), the employer shall not be regarded as having been dismissed by his employer by reason of the ending of his employment under the previous contract".

Subsection (3) provided for a possible "trial period" of employment under a new or renewed contract with the same employer. Subsection (6) dealt with termination during any trial period by equating it (both as to timing and as to reasons) with the original termination. S.84 was not expressly limited to the purposes of Part VI of the 1978 Act, but the section operated as a qualification to s.83 (which was expressly limited to those purposes).

In Hempell v W.H.Smith [1986] ICR 365 the Employment Appeal Tribunal (in a judgment of Peter Gibson J.) decided that the provisions of s.84 were contained in and restricted to Part VI and did not therefore shut out a claim for unfair dismissal made by an employee who had been given notice of redundancy, had begun a trial period in an alternative job in a different division, but had then been dismissed as unsuitable for the alternative employment. She complained of the decision that she was not suitable as unfair dismissal. The Industrial Tribunal were persuaded to apply the deeming provision in s.84(6) and so to exclude the possibility of that claim for unfair dismissal (since the original notice of redundancy could not be challenged). The Employment Appeal Tribunal allowed the appeal.

There was a later decision which went the other way, that is the decision of another division of the Employment Appeal Tribunal (presided over by Judge Byrt Q.C.) in EBAC Ltd v Wymer 1995 ICR 466. In the present case the Employment Appeal Tribunal had no difficulty in preferring the decision in Hempell to that in EBAC. Referring to the fact that Hempell had been cited in EBAC but had been regarded as a decision on special facts, Lindsay J. said (1997 ICR at p.397)

"The facts in Hempell's case were, of course, radically different to those in Ebac Ltd. v Wymer but the decision in Hempell was reached not by reference to special facts but by the application of a familiar and conventional canon of statutory construction which Ebac Ltd. v Wymer does not address, let alone successfully rebut. The conflict between the two cases is the subject of commentary in Harvey on Industrial Relations and Employment Law, section E, at para. 1588.02, where a number of arguments lead the authors to the conclusion that Hempell's case is to be preferred to Ebac Ltd. v Wymer.

Miss Morgan, for the governors, argues that, although it would have been easy enough for Parliament to have provided otherwise had that been its intention, there is nothing in section 84(l) which in term limits its effect to redundancy cases. Next, she says, the literal meaning of the words could be much broader than Hempell suggests. It is then urged that headings such as that to Part VI of the Act of 1978 are, on authority, not to control the meanings of the words used: see Reg. v Schildkamp [1971] A.C. 1 . Miss Morgan also draws attention to the different factual positions in Hempell [1986] I.C.R. 365 and Ebac Ltd. v Wymer [1995]

I.C.R. 466.

It is difficult to take exception to any of those arguments, but they represent far less than the complete case. The passage in Harvey, which Mr. Henderson adopts on behalf of the employee, makes a number of telling points".

Lindsay J. then referred to the legislative history of the consolidating Act, which I have already touched on.

I consider that the Employment Appeal Tribunal was plainly right on this point of construction, which has now been put beyond any possible doubt, for the future, by the terms of the new consolidating Act (that is s.138 of the Employment Relations Act 1996). Nor has Miss Morgan submitted, in this court, that EBAC should be preferred to Hempell. The only point she has taken is that the Employment Appeal Tribunal should not have entertained the issue at all because it was conceded before the Industrial Tribunal.

There is a good deal of authority, much of which Miss Morgan cited in this court, to the effect that the Employment Appeal Tribunal does not and should not normally allow an appellant to raise a point of law not raised (or raised but conceded) before the Industrial Tribunal, and indeed that leave to do so should be given only in exceptional circumstances. Apart from two cases which were not Thomas v Marconi's Wireless Telegraph [1965] l W.L.R. 850 and Wilson v <Liverpool Corporation [1971] l W.L.R. 302) counsel between them referred to GKN (Cwmbran) v Lloyd [1972] I.C.R. 214, Kumchyk v Derby City Council [1978] ICR 1116, House v Emerson Electric Industrial Controls [1980] I.C.R. 795, Secretary of State for Employment v Newcastle upon Tyne City Council [1980] I.C.R. 407, Hellyer Brothers v Mcleod [1987] I.C.R. 526, [1987] l W.L.R. 728 (a decision of this court) and Barber v Thames Television [1991] I.C.R. 253.

These authorities show that although the Employment Appeal Tribunal has a discretion to allow a new point of law to be raised (or a conceded point to be reopened) the discretion should be exercised only in exceptional circumstances, especially if the result would be to open up fresh issues of fact which (because the point was not in issue) were not sufficiently investigated before the Industrial Tribunal. In Kumchyk the Employment Appeal Tribunal (presided over by Arnold J.) expressed the clear view that lack of skill or experience on the part of the appellant or his advocate would not be a sufficient reason. In Newcastle the Employment Appeal Tribunal (presided over by Talbot J.) said that it was wrong in principle to allow new points to be raised, or conceded points to be reopened, if further factual matters would have to be investigated. In Hellyer this court (in a judgment of the court delivered by Slade LJ which fully reviews the authorities) was inclined to the view that the test in the Employment Appeal Tribunal should not be more stringent than it is when a comparable point arises on an ordinary appeal to the Court of Appeal. In particular it was inclined to the view of Widgery LJ in Wilson v Liverpool Corporation [1971] 1 W.L.R. 302, 307, that is to follow

"the well-known rule of practice that if a point is not taken in the court of trial, it cannot be taken in the appeal court unless that court is in possession of all the material necessary to enable it to dispose of the matter fairly, without injustice to the other party, and without recourse to a further hearing below."

In this case the Employment Appeal Tribunal recognised that the consequence of allowing Mr Jones' appeal would be a new hearing with fresh evidence (so far as that can be an appropriate term for evidence given in 1998 of events of five years ago) : 1997 ICR at pp. 398-9. It was therefore a case in which the Employment Appeal Tribunal would have had to have exceptionally compelling reasons for taking such an unusual course. It is necessary to consider the course of the proceedings to see whether there were such compelling reasons.

Before the Industrial Tribunal Mr Jones was represented by a barrister, then a pupil barrister, acting under the auspices of the Free Representation Unit. His written submissions prepared for the Industrial Tribunal, which have been before this court, were to my mind admirably clear and concise in relation to the points which they covered. They included the following passages:

"1. The applicant's case is that he was unfairly dismissed, and that he took a new job with the same employer solely to mitigate his loss ..."

"5-7. Harvey D 529. ... "if an employee makes it clear that he is accepting a repudiation of his original contract, the fact that he agrees to be reemployed under a new contract will not preclude him from relying on the original dismissal Hogg v Dover College [1990] ICR 39"

"31. The Respondent seeks to rely on s.84(l). However this has no application to unfair dismissal actions which are dealt with in Part V of [the 1978 Act]. Section 84 applies to redundancy claims (Part VI of [the 1978 Act]). "34. Confirmed by Hempell v W.H.Smith [1986] IRLR 95"

These written submissions reflected the obstacles which Mr Jones and his advocate had to overcome if he was to make good his claim for unfair dismissal (unfair selection for redundancy not being a viable alternative complaint) :

(a) he had to show that he had been dismissed, even though he was still working (and had without any break remained working for the same employer);

(b) he had to show that his dismissal was not notionally wiped away by s.84 of the 1978 Act (that required him either

(i) to succeed on the point on statutory construction or

(ii) to show that Mr Jones was not in fact dismissed for redundancy); and

(c) he had to show that his dismissal was unfair, even though (absent unfair selection) dismissal for redundancy is not unfair dismissal (so that on this point he had no alternative to establishing that Mr Jones had not been dismissed for redundancy).

The written submissions dealt admirably with points (a) and (b)(i) above, but did not deal as clearly (if at all) with point (b)(ii) or with point (c) (on that point Hogg v Dover College did not help as in that case there was no question of the school ceasing to have a head of its history department).

Unfortunately, the hearing before the Industrial Tribunal occupied three hearings spread over six months, and Miss Morgan has told us (and Mr Thomas Kibling who has appeared for Mr Jones in this court does not dispute) that by the end of the hearings Mr Jones' advocate had conceded that, if Mr Jones had been made redundant, then he failed on point (b) above. That concession is reflected in paragraph 13 of the Industrial Tribunal's written decision, which was promulgated on ll January 1996, almost a year after the first hearing had taken place. Paragraph 13 (which in other respects closely followed the written submissions) recorded, "[Mr Jones'] representative accepted that if there was a redundancy situation, section 84 of the [1978 Act] would apply". The decision then recorded the submissions, made by reference to the evidence, that there was no true redundancy situation (a submission relevant to what I have called point (b)(ii) and point (c)) but in paragraphs 18 and 19 reached the conclusions which I have already set out. Finally there was paragraph 20 :

"The Tribunal is satisfied that throughout the discussions from September 1993 onwards, the Applicant and his Trade Union representatives were kept fully informed and there is no criticism to be made of the procedures followed by the Respondents in leading to the decision to dismiss the Applicant by reason of redundancy if he did not accept the post of Site Manager. Had we not found such potential dismissal to be by reason of redundancy we should have found it to be by reason of substantial re-organisation within the terms of section 57(l)(b), and potentially fair".

Mr Jones appealed to the Employment Appeal Tribunal and his notice of appeal and his counsel's skeleton argument took their stand on what I have called point (b)(ii) and point (c). There was no reference at all to Hempell. Miss Morgan suggested that that was because EBAC had by then been reported, but there is no apparent reason why a reserved judgment of the Employment Appeal Tribunal presided over by a High Court Judge should be regarded as carrying less weight than an extempore judgment of the Employment Appeal Tribunal not presided over by a High Court Judge.

However that seems to be what happened. The appeal came before the Employment Appeal Tribunal on 26 November 1996. Lindsay J. at once drew attention to Hempell and EBAC and indeed provided copies to counsel on both sides. Miss Morgan told this court that she objected to this point being taken, because it had been conceded below. However the Employment Appeal Tribunal ruled that the point could be taken. There was, it seems, no prolonged argument on the point (although Kumchyk happened to be on Miss Morgan's list of authorities as being relevant on another point). The Employment Appeal Tribunal did not give reasons for its ruling either at the time (beyond commenting that Miss Morgan was taking a technical point) or in the reserved judgment given on 16 January 1997. In the meantime the Employment Appeal Tribunal had at Miss Morgan's request adjourned to give both sides the opportunity to put in written submissions dealing with Hempell and EBAC. Miss Morgan put in eight pages of submissions contending that EBAC should be preferred to Hempell, and referring to some well-known authorities on the construction of statutes. She did not in her written submissions ask the Employment Appeal Tribunal to reconsider its ruling on the new point of law, nor did she cite Hellyer or any of the other authorities on that topic. Some counsel might have taken that course, but I do not think that Miss Morgan can really be criticised for obedience to what she understood to be an irrevocable procedural decision.

The course which events have taken faces this court with an unusually difficult dilemma. Mr Kibling has made some very powerful points on behalf of Mr Jones. The Employment Appeal Tribunal undoubtedly had a discretion in the matter. It is a strong thing to overturn the exercise of discretion by an experienced, specialist tribunal, especially on a procedural point. It is a particularly strong thing to do so when the effect would be, as between these parties, to oust what is now generally acknowledged to be the correct view of the construction of s.84 so as to reinstate what is now known to be the incorrect view. That, Mr Kibling has eloquently submitted, would be an affront to the administration of justice.

However the search for justice requires some difficult reconciliations of conflicting principles, and there is a strong public interest in finality in litigation. The rule or practice embodied in the authorities mentioned earlier in this judgment is not regarded as a matter of technicality, but of justice to a respondent who may be plunged into yet more litigation : see for instance Sir John Donaldson in GKN (Cwmbran) at page 219 and Arnold J. in Kumchyk at page 1123. Sometimes the rule does result in a case being decided on a basis of law that is not merely arguably, but demonstrably wrong by the time it reaches the appellate court : Wilson v Liverpool Corporation is itself a striking example.

I fully accept that the ruling of an experienced, specialist tribunal on a procedural point is entitled to the greatest respect. An appellate court will in such a situation be disposed to uphold the exercise of discretion if it can. But this court is faced with an exercise of discretion which seems to run counter to established principles, and for which no reasons have been given. If any court or tribunal exercises its discretion in a particularly unusual manner it is bound to give reasons. This court can engage in conjecture as to possible reasons, but it is not a fruitful exercise. It is clear that the inexperience of a party's advocate is not a good reason. If a new point of law goes to jurisdiction that may be a good reason (Barber) but I cannot accept Mr Kibling's submission that any issue of jurisdiction arose in this case. Nor can the importance of the point raised be a sufficient reason; in one sense the importance of the point makes it more difficult, not less, to justify reopening a concession.

I have for these reasons reluctantly come to the conclusion that the ruling by the Employment Appeal Tribunal, experienced though its members were, must have been made in inadvertent disregard of established principles, and fell outside the range within which the tribunal could reasonably exercise its discretion. My reluctance to come to that conclusion is only slightly tempered by the reflection that (in view of what is said at the end of the Industrial Tribunal's decision) Mr Jones might well have failed, at a further hearing, on the issue of dismissal for redundancy. I would allow this appeal.

LORD JUSTICE MORRITT: I agree.

LORD JUSTICE STUART-SMITH: I also agree.

Order: Appeal allowed with costs; costs to be taxed if not agreed.