United Kingdom Employment Appeal Tribunal

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Cite as: [1992] UKEAT 266_90_1505, [1993] IRLR 156

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BAILII case number: [1992] UKEAT 266_90_1505

Appeal No. EAT/266/90

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 15 May 1992

Judgment delivered on 5 November 1992

Before

HIS HONOUR JUDGE N HAGUE QC

MR J H GALBRAITH CB

MR K GRAHAM CBE

CAMBRIDGE & DISTRICT CO-OPERATIVE SOCIETY LTD APPELLANTS

MR D L J RUSE RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellants Mr A Lynch (of Counsel)

Messrs Croftons

Solicitors

Television House

Mount Street

MANCHESTER M2 5FA

For the Respondent Mr T Horlock (of Counsel)

Jack Thornley

Solicitors

8 Warrington Street

Ashton-under-Lyne

OL6 6XP

HIS HONOUR JUDGE HAGUE QC This is an appeal by employers, Cambridge and District Co-Operative Society Ltd ("the Society"), from the Decision of an Industrial Tribunal sitting in Bury St Edmunds sent to the parties on 2nd April 1990. The Tribunal decided, by a majority, that the Applicant, Mr Ruse, had been dismissed for redundancy by the Society and was entitled to a redundancy payment.

The Industrial Tribunal clearly found the case a difficult one. In paragraph 2 of their Reasons, after stating that both sides had had the advantage of expert representation, the Tribunal commented:

"We must confess that although their expertise put forward very persuasive arguments on both sides it did not give us all that much help in deciding which one was right".

Before us the parties similarly had the advantage of expert representation by Counsel, Mr Adrian Lynch on behalf of the Society and Mr Tim Horlock on behalf of Mr Ruse. We would echo the same comment.

Mr Ruse was employed by the Society as a butcher for 29 years, from 1960 until October 1989. He began as an apprentice, then became a relief manager, and for about 15 years until 1980 was the manager of a mobile butchery shop. In 1977, he was given a written "Statement of Terms of Employment". In early 1981 the Society withdrew the mobile butchery service, and after a brief period as a relief manager Mr Ruse was appointed as the manager of the Society's butcher's shop in Hills Road, Cambridge. He was then sent a written "Amendment to Statement of Terms of Employment" dated 16th February 1981, and he signed one copy and returned it to the Society. Mr Ruse continued as manager of the Hills Road shop until it was closed in September 1989. By that date the Society had closed all its individual butcher's shops and had only butchery departments in its larger stores.

Mr Ruse was then told to report to the Society's Fulbourn Store, where he would take up the position of Butchery Department Manager. The Fulbourn Store was a supermarket containing many other departments. Although he had charge of the butchery department, he was to some extent under the jurisdiction of the manager of the Store. In addition, he did not have a key to the Store, and he was not responsible for collecting and banking money as he had been at Hills Road. After a short time, Mr Ruse decided that the new job was not to his liking, and on 18th September he wrote to the Society saying he was not happy with his position and wished to opt for redundancy. After a reply from the Society, he wrote again on 25th September explaining his position as follows:

"I am not satisfied with my loss of status at Fulbourn.

Before I was a Store Manager but now I am just a section head.

I wish to leave the employment of the Society on 7th October.

It is clear to me that my old job was redundant and so I ask you to pay me my redundancy monies."

Mr Ruse did in fact leave on 7th October. The Society took the view that he was not redundant, and on 9th November Mr Ruse made his application to the Industrial Tribunal claiming a redundancy payment. We were informed that, under a separate arrangement, any statutory redundancy compensation to which he is entitled will be increased.

The first question which arises is whether the Society was entitled under the mobility clause in Mr Ruse's contract of employment to transfer him to the Fulbourn Store. The Society contended before the Industrial Tribunal that it was so entitled, so there had been no termination of contract and therefore no question of redundancy arose. This is a matter which turns on the proper construction and effect of the relevant part of Mr Ruse's contract of employment: see Western Excavating (ECC) Ltd v. Sharpe [1978] QB 761. The Tribunal by a majority decided this issue in favour of Mr Ruse. The Society appeals against that part of the decision as being erroneous in law. It was accepted by Mr Horlock, and we agree, that this raises of point of law.

It is necessary on this issue to consider the original 1977 Statement of Terms of Employment and the 1980 Amendment to Statement of Terms of Employment in a little detail. The 1977 Statement is in the Society's printed form the relevant part of which reads as follows -

"1. OCCUPATION (a) You are employed within the Society's ... with the job title of ...

You may be required to pursue your employment at any of the establishments comprising the said division/department."

In the first blank space the words "Food Division" were written in. In the second blank space, the words "Butchery Mobile Manager" were written in.

No other parts of the 1977 Statement are relevant. For the sake of completeness, we ought to mention that in paragraph 1(b), it was stated that "except as hereinafter provided, the provisions of General Distributive Workers Branch Managers and Manageresses apply to your employment". That was a reference to an agreement which we were told related to pay and other matters but contains nothing relevant as to mobility. Mention was also made at the hearing before us of a booklet containing the Society's standard terms of employment. However, these were not incorporated in the 1977 Statement and are therefore not relevant. In any event, they do not take the matter of mobility any further.

The 1980 Amendment to Statement of Terms of Employment is typewritten. The material part reads as follows -

"The Cambridge Co-operative Society Ltd offers you the position of Butchery Manager on the terms as to remuneration and conditions of work in the current agreement made between the appropriate Trade Union and the National Wages Board of the Co-operative Union Ltd ..."

It was not suggested that that agreement contained any different mobility clause. It had previously been expressly stated, in the Society's letter dated 12th January 1981, that Mr Ruse would be appointed to manage a butcher's shop. There can be no doubt that the 1980 Amendment must be read in that context. We should also add, for the sake of completeness, that the Fulbourn Store is undoubtedly within the Society's Food Division, and also that Mr Ruse made no complaint as to the altered location of his new employment or as to the financial terms.

The Industrial Tribunal considered that as a result of the foregoing the mobility clause in Mr Ruse's contract had to be read from 1980 as if it provided:

"You are employed within the Society's Food Division with the job title of Butchery Manager. You may be required to pursue your employment at any of the establishments comprising the said Division."

The Tribunal then (in paragraph 15 of their Decision) posed themselves the question to be answered in the following terms:

"The question is whether 'pursue your employment' in that context means 'pursue your employment as Butchery Manager', which is clearly meant to indicate the management of a butchery branch, or whether it includes employment as a manager of a butchery department in a larger store".

With all respect, we consider that this is an over-simplified approach. What has to be considered is the combined effect of the 1977 Statement and the 1980 Amendment in the light of the surrounding circumstances.

Mr Lynch put forward powerful arguments for saying that the majority of the Tribunal misconstrued the relevant parts of the 1977 Statement and the 1980 Amendment. He pointed in particular to the job title of "Butchery Manager", a phrase which is apt to cover the manager of a butchery department in a large store as well as the manager of an individual butcher's shop. Mr Lynch also said that the words "any of the establishments comprising the said Division" were very wide (and certainly wide enough to cover the Fulbourn Store), and showed that re-deployment as a butchery manager in any such "establishment" was within the scope of the mobility clause. Mr Lynch also stressed that the whole purpose of the clause was to allow flexibility, and submitted that it clearly contemplated that, within limits, the employee would be expected to perform different functions made necessary by changing trading conditions.

However, as Mr Horlock pointed out, "Butchery Manager" is only the specified job title, and not a description of Mr Ruse's employment, and we agree that there is distinction between the two. As can be illustrated by some of the examples mentioned during the course of the argument, a job title can often be misleading as to the nature of the employment. In our view Mr Horlock was correct in his submission that the crucial question is what was meant by the expression "your employment" in the context, and that it clearly was not intended merely to refer to Mr Ruse's status as an employee of the Society.

Mr Horlock argued that Mr Ruse's "employment" for this purpose was as the manager of an individual branch, responsible for the day-to-day running of the branch, including the handling and banking of money and the possession of the keys to the branch, and with the degree of independence that the position entails. This "employment", he said, was substantially different from that of a department manager. Mr Horlock further argued that the mobility clause had to be construed in the matrix of the surrounding facts at the relevant time in 1981, when Mr Ruse was being given individual management responsibility (in continuation of that responsibility which he had enjoyed for many years previously), and also that, if there was any ambiguity, the mobility clause should be construed in favour of Mr Ruse under the "contra proferentem" rule.

We have found this a difficult matter, but on balance we prefer the arguments of Mr Horlock. We therefore agree with the finding of the majority of the Tribunal that the mobility clause did not entitle the Society to require Mr Ruse to work as a department manager at the Fulbourn Store.

As the position of a butcher's shop manager was no longer available, in our view it follows that Mr Ruse became redundant. Mr Lynch suggested that the Society's requirement of a transfer to the Fulbourn Store was not a fundamental breach of Mr Ruse's contract of employment amounting to a repudiation of the contract and a constructive dismissal. However, we agree with Mr Horlock that the question of constructive dismissal does not arise. Mr Ruse's employment disappeared and so he was redundant.

The only other question was whether, by reason of S.82(5) and (6) of the Employment Protection (Consolidation) Act 1974, the alternative employment he was offered excluded his right to a redundancy payment. Although Mr Ruse initially accepted a new contract of employment at the Fulbourn Store, he terminated this contract within the 4-week trial period permitted by S.84 of the Act, so that he is to be treated as having been dismissed by reason of redundancy when his previous employment came to an end.

Under S.82(5) of the Act, an employee dismissed for redundancy is not entitled to a redundancy payment if the employer offers him suitable alternative employment and he unreasonably refuses that offer. The question of the suitability of the employment is an objective matter, whereas the reasonableness of the employee's refusal depends on factors personal to him and is a subjective matter to be considered from the employee's point of view: see Hindes v. Supersine Ltd [1979] ICR 517 at p.521G and Executors of J F Everest v. Cox [1980] ICR 415. The Tribunal unanimously held that the offer of employment at the Fulbourn Store was an offer of suitable alternative employment, and that finding was not challenged before us.

However, the majority of the Tribunal found that Mr Ruse's perceived loss of status on the transfer to the Fulbourn Store made it reasonable for him to refuse the offer. They said:

"He had been employed for initially the whole of his employment by the respondents, either on the road or in a shop, as a completely independent manager of a butchery unit. He was now going to have to work in a supermarket environment, in a much more confined sort of ambit, with a store manager who was in charge of the overall administration of the store in which he was working. It may be that he was being a little sensitive about this, but in the view of the majority he was not being unreasonable."

Mr Lynch submitted that this finding was inconsistent with the unanimous finding that the offer was of suitable alternative employment. Once an objective finding of that kind has been made, the employee (said Mr Lynch) cannot rely on his subjective perception of that employment to refuse the offer; for it is suitable, it will only be reasonable for the employee to refuse on personal grounds which relate to other factors.

In our judgment, there is nothing in S.82(5) (or the equivalent provisions of S.82(6)) to restrict the employee's reasons to factors not connected with the employment itself, and nothing in the reported cases cited to us to that effect. We consider that, as a matter of law, it is possible for the employee reasonably to refuse an objectively suitable offer on the ground of his personal perception of the employment offered. The question of the reasonableness of the refusal is a matter of fact for the Tribunal.

In the present case, the majority of the Tribunal have held that Mr Ruse's refusal of the alternativel employment at the Fulbourn Store was not unreasonable. That was a finding of fact to which the Tribunal was entitled to come, and it was not perverse. This Appeal Tribunal therefore cannot interfere.

We accordingly dismiss the Society's appeal.