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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Provincial Insurance Plc v Loxley [1992] UKEAT 161_90_1702 (17 February 1992)
URL: http://www.bailii.org/uk/cases/UKEAT/1992/161_90_1702.html
Cite as: [1992] UKEAT 161_90_1702
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At the Tribunal
Before
THE HONOURABLE MR JUSTICE PILL
MR K GRAHAM CBE
MISS C HOLROYD
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellants MR JOHN HAND QC
Messrs Hepworth & Chadwick
Cloth Hall Court
Infirmary Street
Leeds
LS1 2JB
For the Respondent MR JEREMY McMULLEN
(Of Counsel)
Messrs Robin Thompson & Partners
Bainbridge House
Bainbridge Street
London
WC1A 1HT
MR JUSTICE PILL: This is an Appeal by Provincial Insurance plc against the Decision of an Industrial Tribunal sitting at Brighton on the 30th January 1990, under the Chairmanship of Mr I K R Wilson, that the applicant Mr Neil Loxley had been dismissed by reason of redundancy.
The unanimous Decision of the Tribunal was that the present appellants had dismissed Mr Loxley for redundancy and he was awarded a redundancy payment of £3,698.
Mr Loxley had been employed by the appellants for many years in several locations. In 1977 he was employed at East Grinstead and was a settled resident at Uckfield a nearby village. He enjoyed living in the area and his son was due to take the GCSE examination in June or July 1989. He was well regarded by the applicants and was paid a salary of over £20,000 a year. There was, clearly, a good deal of goodwill between Mr Loxley and his employers as is evidenced by the documents which are in our Bundle.
In January 1989, Mr Loxley was told of a possible restructuring of the Company which might take place in July of that year. He was told that his job at East Grinstead would no longer exist. He was told that he was required to move, and reacted strongly against that suggestion, pointing out that his son was taking the GCSE and hoped to proceed to A Levels at the school he was then attending. There was, in the Contract of Employment, what has been described as a mobility clause. Mr Loxley was offered a post at the respondents' Reading Office. However it is clear that shortly after being told of that post, he took employment elsewhere. We do not need to deal, nor would it be appropriate for us to deal at this stage, with the events of the relevant weekend which was in early April of 1989.
The terms of the Contract of Employment were set out in a handbook. They included a mobility clause, that is the appellants had the right to transfer staff to any position within the United Kingdom, provided however that the Company would not transfer a member of staff who produced acceptable evidence of hardship. Set out in the handbook is a series of examples of hardship one of which is a situation in which children are about to sit public examinations. The Contract also made provision for what would happen in the event of a redundancy. In certain circumstances an employee made redundant was entitled to a severance payment. The Tribunal found the terms just summarised to be the terms of the Contract, stating that the "mobility agreement and the redundancy agreement are both part and parcel of one contract of employment"
We do not need to go into more detail as to the precise terms for reasons which will emerge.
The Tribunal decided that Mr Loxley had been dismissed. They proceeded to hold that he was entitled to a redundancy payment, notwithstanding the mobility term in the Contract. They did so on the basis that the redundancy term and the mobility term could not co-exist in the Contract. They believed it to be the law that an employer can only rely on a mobility clause in what they described as a "non-redundancy situation". For example, they added at paragraph 9:
"if for example, the Applicant's job had not been disappearing at East Grinstead but they still wanted him to transfer elsewhere, then they would have been entitled to enforce that clause of the contract."
The Tribunal took that view of the Contract believing themselves to be bound by the Decision of the Court of Appeal in Marley v. Forward Trust Group Limited [1986] ICR 891 CA.
Mr McMullen on behalf of Mr Loxley also submits that the effect of that Decision is as stated by the Tribunal. We are of course, bound by a Decision of the Court of Appeal. It is submitted that as a matter of law, where there is in a contract a mobility term and a redundancy term one or the other must go. It is submitted that having regard to the Decision in Marley it is the redundancy term which takes priority and is predominant. The Tribunal were right, Mr McMullen submits, in declining to have regard to the mobility clause in a situation of redundancy.
The Tribunal set out at paragraph 9 of their reasoned Decision the passage from the judgment of Lord Justice Lawton upon which they relied in stating why the law was as they believed it to be and Mr McMullen relies upon the same passage which is at Page 895 D. Marley was a case where the Court of Appeal held that if a redundancy situation arose the employers could not rely on the mobility clause when redeploying an employee. There was however in the relevant Contract a clause which read as follows:
"7.4 Employees who accept offers of alternative employment as outlined in this agreement which differs significantly from their current positions, in terms of location, terms and conditions of employment or the nature of work, shall have up to six months within which to assess whether or not the new position is suitable. Should they reject the new position within this period their rights to the redundancy terms under this agreement shall not be affected."
The relevant passage in the Judgment of Lord Justice Lawton is as follows:
"..... no doubt the employers came to that decision [that is a decision to rely upon the mobility clause in the contract] believing that they were entitled to do so, having regard to the terms of the contract. But as Mr Hamilton, on behalf of the employers, has accepted in this Court the mobility clause and the redundancy clause cannot co-exist in the same contract of service. One or other must go. If there was a redundancy situation as the employee claimed then the employers could not rely on the mobility clause."
Mr McMullen submits that the last sentence in that passage was a general statement of law by Lord Justice Lawton which has the general effect described above.
We are quite unable to accept that submission. First, we doubt whether in that sentence Lord Justice Lawton was expressing any view of his own. We consider it more likely that he was continuing his summary of Counsel's submissions. However, if that is not right, we are in no doubt that Lord Justice Lawton was not making a general statement but was dealing with the contract in that particular case. The effect of clause 7.4 is clear. It gave a period within which an employee had an opportunity to assess whether or not the position offered to him was suitable. It provided expressly that if he or she rejected the new position within that period rights to the redundancy terms under the agreement would not be affected. Lord Justice Lawton was not saying that as a matter of law when a contract of employment has provisions both for mobility and for redundancy, the redundancy provisions must take priority and the mobility provisions must be overridden. That would be, as we see it, a radical alteration of the law of contract and was not one contemplated by Lord Justice Lawton in that passage in his Judgment.
The lay members of this Tribunal, in the course of argument, have indicated the practical difficulties which would arise if the law was as stated by Mr McMullen, and we are glad to be able to reach a conclusion upon the law which, in our view, accords with good sense.
In fairness to the Tribunal, they found that the Decision, as they wrongly believed it to be, was a strange one and were clearly unhappy about applying it.
Mr McMullen's second submission in seeking to uphold the Decision of the Tribunal is that if an employee can bring himself or herself within the hardship provision in the contract, the employer has no right to draft the employee elsewhere and if the reason for the proposed transfer is one based on redundancy then the employee is entitled to a redundancy payment. Mr Hand does not dispute that proposition, provided of course that a dismissal is proved and provided that the employee brings himself within the terms of the hardship clause.
Mr McMullen submits that, upon the Tribunal's findings, it would be appropriate for this Tribunal to uphold the Decision on different grounds from those found by the Industrial Tribunal.
Mr Hand takes a contrary view. He submits that, on the basis of the Industrial Tribunal's findings, it would be appropriate for this Tribunal to allow the Appeal and to substitute its view for that of the Industrial Tribunal. Mr Hand relies upon the first sentence of paragraph 8 of the reasoned Decision in which the Tribunal held that:
"..... had it not been for the case of Marley v. Forward Trust Group Limited [1986] ICR P.891, we would have found that the Respondents [that is the present appellants] were entitled to request the Applicant's transfer either to Reading or Haverhill, or indeed elsewhere, without any question of a redundancy situation coming into play."
Mr McMullen submits that there is a sufficient sub-stratum of factual findings as enables us to uphold the Decision. He relies upon the statement at paragraph 7 that the Tribunal held upon an admission of the employers that the distance to travel to the job offered at Reading was:
"an unreasonable distance to expect anyone to commute."
That concession did not amount to an admission that the hardship clause operated. He also relies upon the statement at paragraph 10 that having found the redundancy clause to be the dominant one, the Tribunal stated that:
"it is clear that the Respondents were seeking to rely upon a clause of the contract upon which they could not rely in the circumstances of this case."
We are unable to accept the submissions of either Counsel upon that point. We are in no doubt that the Industrial Tribunal misdirected themselves in law for the reasons we have given. However, there was insufficient enquiry upon the facts as would enable us, applying the findings of the Tribunal of fact, to reach a Decision upon this application. For example, there is nothing in the reasoned Decision to indicate how the hardship clause, as it applied to the facts of this case, should be construed. There was no investigation by the Tribunal of the significance of the expression "about to sit public examinations" against the situation of Mr Loxley's son.
The appropriate course is to remit the matter to an Industrial Tribunal for the case to be reconsidered. That is regrettable having regard to the lapse of time but there was insufficient enquiry at the first hearing, and insufficient findings of fact upon which it would be proper for us to decide the application. For us to do that would be to derogate from the proper function of an industrial tribunal. That being our view it is common ground that the matter should be remitted to a differently constituted tribunal and that the matter should be remitted generally.
The Appeal is allowed upon those terms.