United Kingdom Employment Appeal Tribunal

You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Moon v Homeworthy Furniture (Northern) Ltd [1976] UKEAT 177_76_1307 (13 July 1976)
URL: http://www.bailii.org/uk/cases/UKEAT/1976/177_76_1307.html
Cite as: [1977] ICR 117, [1976] IRLR 298, [1976] UKEAT 177_76_1307

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JISCBAILII_CASE_EMPLOYMENT

		BAILII case number: [1976] UKEAT 177_76_1307
		Appeal No. UKEAT/177/76

EMPLOYMENT APPEAL TRIBUNAL

	At the Tribunal
	On 13 July 1976

Before

The Hon. Mr. Justice Kilner-Brown
Mr. R. V. Cooper
Mr. S. C. Marley, JP

MOON, J. AND OTHERS APPELLANT

HOMEWORTHI FURNITURE (NORTHERN) LTD RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised.

APPEARANCES

For the Appellant	Mr. J. STEPHENSON instructed by Messrs. Hay & Kilner, 53 Grey St., Newcastle upon Tyne KE1 6EH.
For the Respondent	Mr.B. A. PERKOFF, Solicitor, Messrs. Peters & Peters, 2 Hare-wood Place, Hanover Square, London, W.1.

MR. JUSTICE KILNER-BROWN: The judgment which I am about to give is the unanimous judgment of the Appeal Tribunal; and a point of principle has been discussed with judicial members of the Tribunal, who are in agreement on it.

This is an appeal by four applicants (who were representatives of the total work force) against the unanimous decision of an industrial tribunal sitting at Newcastle upon Tyne on 3rd and 4th February 1976. At the end of the hearing the applications for finding- of unfair dismissal were rejected. The appeal raises a novel and important issue under the new legislation.

It was a case where a complete factory was closed down and the whole of the work force made redundant. Mr. Stephenson, counsel for the applicants, made it plain at the outset that there was a challenge to the validity of the redundancy process and that there was not a genuine redundancy situation. There was no suggestion that it was a contrived redundancy in any sinister sense but that the applicants did not accept that it was justifiable to say that the factory was not economically viable. Broadly put, the applicants considered that it was unfair to the work force to close down the factory, unfair to declare redundancy and therefore dismissals resulting therefrom must also be unfair.

With admirable perspicacity the Chairman of. the industrial tribunal recognised the inherent difficulties in this line of argument. He enquired how far the industrial tribunal could go into policy decisions of a board of directors on trading and economic matters. He had in mind, and kept in mind, that the definition of redundancy was to be found (and still is) in paragraph 1(2) of the Redundancy Payments Act 1965. Redundancy arises where in fact the employer has ceased or intends to cease to carry on business or where there is a reduced requirement of labour. However, in order to determine the scope of the enquiry and to delineate the area of the evidence it was agreed to call a director of the respondent company to give evidence as to what had happened and why it had happened; and Mr. Bullard, the gentleman in question, was cross-examined along the lines of the general views and beliefs of the work force. One thing emerged with clarity and that was that there was a history of unhappy industrial relations, an involvement of trades union representatives on a local and national level, and an enlistment of the services of the local Member of Parliament. It is obvious, therefore, that when matters have reached this sort of pitch nothing that the employers did would be likely to be acceptable and a trading decision would be regarded as a cloak for an industrial relations decision. As a result of Mr. Bullard's evidence it must have seemed plain to most people that there were genuine economic problems. It was still not accepted by the applicants that they were sufficiently genuine to oust all political or industrial reasons. Nevertheless one common factor emerged and that was that, whatever the rights and wrongs of the original and persistent labour troubles, the economic difficulties both preceded and succeeded the labour difficulties. It was a classic instance of the age old problem as to whether or not the chicken or the egg came first. The irrelevance and futility of the question is matched only by the irrelevance and futility of the answer.

After this evidence was called, legal argument followed. Mr. Perkoff, for the employers, has before us, as he did then, founded his argument on paragraphs 6(2)(c) and 6(7) of the First Schedule to the Trade Union and Labour Relations Act 1974. In paragraph 6(2}(c) redundancy is stated to be a valid reason for dismissal and in paragraph 6(7) certain methods of operating redundancy are declared unfair. No power is given to investigate the reasons for creating redundancy. What may be done is to investigate the operating of a redundancy situation. Here, everybody was made redundant and there was nothing unfair about that. There was no complaint about unfair selection or lack of notice and matters of that kind.

There are no reported decisions on the critical issue in the instant case. The cases referred to under the previous jurisdiction concern the application of a redundancy situation on the grounds of unfair operation of redundancy notices either by method or by selection. There is a sentence attributed to Sir Hugh Griffiths in one of them where he saids "Although-it is an unlikely situation the Court does not exclude the possibility of a redundancy dismissal being unfair albeit it was because a particular works was closed." Those remarks may well have had significance under the Industrial Relations Act 1971, and in any event were made in passing and merely touching upon a hypothetical situation unlikely to arise. We are now faced with such a situation in reality, unhampered and unsupported by any authority.

After the evidence of Mr. Bullard was given, the Chairman of the industrial tribunal with acute cogency asked Mr. Stephenson whether or not he accepted that there was a cessation of work and therefore a closure. • With integrity and common sense Mr. Stephenson conceded the point. Technically, therefore, a. redundancy situation was proved up to the hilt. But Mr. Stephenson hung on'to his proposition that if the reason of redundancy was relied on it ought to be open to challenge the declaration of redundancy on its merits. In the view of this Appeal Tribunal the argument then began to go off the rails. There was a long discussion as to the meaning of paragraph 6(8) of the First Schedule and whether or not in the circumstances a reasonable exercise of judgment or assessment of the situation required to make a dismissal fair extended also to the decision to close down the factory. In other words? did the guidelines as to fairness of dismissal entitle the employees to challenge the creation of a redundancy? This brought the industrial tribunal back to realities and Mr. Stephenson was asked what evidence he had other than evidence which sought to challenge the validity of the decision to close down. As he had none the tribunal ruled that as this was evidence he could not call he was bereft of any ammunition and his case must go by default.

Notwithstanding the care and the ability with which Mr. Stephenson put his case, we are unable to criticise the way in which the Chairman handled the matter or to find fault with his reasoning. However we would prefer to put the matter on a much broader and, in our view, more important basis.

The employees, through the chosen applicants, were and are seeking to use the Industrial Tribunal and the Employment Appeal Tribunal as a platform for the ventilation of an industrial dispute. This Appeal Tribunal is unanimously of the opinion that if that is what this matter is all about then it must be stifled at birth, for it was this imaginary ogre which brought about the demise of the National Industrial Relations Court. The Act of 1974 has taken away all powers of the courts to investigate the rights and wrongs of industrial disputes and we cannot tolerate any attempt by anybody to go behind the limits imposed on industrial tribunals.

The result is therefore that whether this appeal is considered upon the basis on which it was argued or on the more fundamental basis of jurisdiction, the decision of the industrial tribunal was right and there could not and cannot be any investigation into the rights and wrongs of the declared redundancy.

There are no grounds for finding any error of law and the appeals are dismissed.

P. A. Haswell. 9 Strickland Close, Leeds, LS17 8JY

United Kingdom Employment Appeal Tribunal

MOON, J. AND OTHERS APPELLANT HOMEWORTHI FURNITURE (NORTHERN) LTD RESPONDENT

MOON, J. AND OTHERS APPELLANT

HOMEWORTHI FURNITURE (NORTHERN) LTD RESPONDENT