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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Mitchell v Spar Stores & Anor [1992] UKEAT 640_90_1012 (10 December 1992)
URL: http://www.bailii.org/uk/cases/UKEAT/1992/640_90_1012.html
Cite as: [1992] UKEAT 640_90_1012
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At the Tribunal
Before
THE HONOURABLE MR JUSTICE WOOD MC (P)
MISS A MADDOCKS OBE
MR J P M BELL CBE
2) SHAW TRUST
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellant MR DAVID BURGE
(Malvern Citizens Advice Bureau)
42 Belle Vue Terrace
Malvern
Worcs
WR4 4PZ
For the Respondents 2nd Respondent
MRS CAROL ALEXANDER
(Personnel Manager)
Shaw Trust
Caithness House
Western Way
Melksham
Wilts
SN12 2DZ
No Appearance by 1st Respondent
MR JUSTICE WOOD (PRESIDENT): By an Originating Application which was dated the 18th April 1990, Mr David Mitchell claimed a redundancy payment, and payment in lieu of notice, from two Respondents, the Spar Stores and the Shaw Trust. The Spar Stores were situated at 4, High Street, Bromyard, Herefordshire and the Shaw Trust is based at Melksham, Wiltshire.
His application came on for hearing before an Industrial Tribunal sitting at Hereford on the 11th October 1990 under the Chairmanship of the learned Regional Chairman, Mr David Powell. His claim for redundancy payment was rejected, his claim was dismissed. He now appeals. He was encouraged to appeal by the Industrial Tribunal because of the unusual set of circumstances which lay behind this case. Let us say at once that it is a sad case in many ways, and a disturbing case, but it is clear from the information we have received today from Mrs Alexander, who is the Personnel Manager of the Trust, that a great deal has changed since these facts and the situation which existed, has come to light.
The Shaw Trust has been in existence for some 10 years. It was originally, we understand, a local trust but has developed and evolved and is now funded wholly, if not wholly very, very largely, by the Department of Employment. Its purpose is to help those with severe disability to maintain or find work in the community and to hold down the jobs under supervision and with help. That is clearly an admirable purpose and to be praised. But, it does raise problems in the employment field.
Mr Mitchell is aged 39 and he suffered from, what is called, a severe learning disability. As Mrs Alexander stressed, the disability must be severe before the Shaw Trust can take an interest. The problems with Mr Mitchell is that he can do cleaning work, sweeping work in the supermarket, but he cannot stock shelves, he gets the dated goods muddled up; he cannot count properly and cannot, therefore, operate the tills. He has, therefore, the basic abilities but somewhat limited.
Mr Mitchell, for some 18 years, had been in employment which would have counted towards redundancy. His final dismissal was on the 24th November 1989, there was therefore a necessity in order to give the Industrial Tribunal jurisdiction that his employment should have been continuous from the 24th November 1987. The history of his employment and the contractual position can be stated thus: In 1971 he began to work for a firm called "George Masons" at their Hereford Branch. There were takeovers by International Stores and by Gateway, continuity, therefore, was preserved under the transfer regulations. During August 1988 Gateway were minded to alter the situation and as a result of a takeover they felt that they could not continue to employ Mr Mitchell. Prior to that he had spent much of his time working from a cleaning company, who cleaned within the International Stores, and that contract had been terminated. The result was that he was only working for some very few hours a week, 8 or less, for the store company as opposed to the cleaning company and it became apparent, to the Disablement Resettlement Officer at the Job Centre, that David was unlikely to be kept on and would therefore be on the open market.
Some time about the middle of August the Disablement Resettlement Officer approached the Shaw Trust, but as David Mitchell had been able to cope and manage for himself in life, he was not at that stage considered to be sufficiently severely disabled for the Trust to take a part. However, when it became quite clear that he was literally, for any full sense of the word, unemployable in the store, the Trust, through Mrs Alexander the Personnel Manager, felt able to take an interest. An investigation took place and a statement was prepared which was for submission to the Department of Employment who had to approve the payment of monies towards David Mitchell's employment. The basis was to be 50% between the store company and the Shaw Trust. Therefore, the situation was that as from the 17th October 1988 Mr Mitchell was employed by the Shaw Trust under a contract of employment and there was a separate contract between Gateway and the Shaw Trust. Gateway, became what is called, "the host organisation". The analysis of that situation was that fresh employment was taken by David Mitchell with the Shaw Trust. That situation continued until the 17th April 1989. During that month Gateway sold to Spar, in the name of Mr Lingham of A F Blakemore & Son (SPAR), which is the group of grocers operating under that marketing name. Fresh contracts were entered into between Mr David Mitchell and Shaw Trust and between Shaw Trust and the new host organisation which was Spar.
That situation continued until 24th November 1989 when Spar sold to a Mr Fagin. Mr Fagin decided not to maintain any of the staff at Spar at Bromyard and therefore the other members of the staff who had worked with David Mitchell were made redundant and paid the normal redundancy payments. However, Mr Mitchell was in a position where he, as the Tribunal found, did not have two years continuity of service to found jurisdiction to make a redundancy payment. The sad situation therefore, is this, that when looked in fact and in law there was a change of employment in October 1988 when the Shaw Trust employed Mr David Mitchell for the first time, and he did not have the necessary two years qualification period.
The Industrial Tribunal looked at those facts, they looked at the documents, they found that the employment by the Shaw Trust was a perfectly genuine arrangement and they reached a decision against Mr Mitchell, but added at the end of their judgment:
"there are points meriting consideration at a higher level."
It follows from what we have already said in this judgment that this appeal must fail. However, the problems raised by this story merit careful reflection for the future of these arrangements which, as we have said, are admirable.
Mrs Alexander was most helpful in the way she conducted this appeal and assured us that since this case the various rules have been changed and many alterations had been made to the arrangements. As we understood her, in fact, the position now is that the host organisation becomes the employer and that the Shaw Trust contribute that way round rather than the other way round under the arrangements disclosed by this case.
We do not seek in any way to criticise, and indeed many of the matters which we are about to mention, may already have been dealt with by those responsible either in the Shaw Trust or the Department of Employment. However, it occurs to us that there may be many other trusts in the Country in the same sort of position and, therefore, in seeking to be helpful in our comments, and constructive and not destructive, we would raise a number of matters on the documentation in this case, and indeed, on the overall approach of authorities.
Dealing with the last point first, it seems to us that when Mr Mitchell approached the Job Centre and the Disablement Resettlement Officer took an interest, it might be advisable for that Officer not just to be looking for further employment, different employment in that scene, but also to look at the overall history and situation of the person approaching him. So that, for instance, in the present case, it might have been advisable, if available, and on the facts it might not have been available because of the hours worked, to look to see whether it was not advisable to take a redundancy payment up to a given date before moving forward into fresh employment.
Turning to the documents we have the two contracts. The Sheltered Placement Scheme Agreement between the Shaw Trust and the host organisation and the personal contract with the disabled person. Again, we bear in mind that they are severely disabled. First, the contract of employment with the individual. At the start of the document, the last sentence in the first paragraph reads:
"You will be employed at A F Blakemore & Son (SPAR)."
that might indicate to someone, at a quick reading, that he was to be employed by Spar and, it seems to us that, a slightly more expanded sentence would be advisable.
Secondly, in paragraph 5 under the heading "Redundancy" there is an explanation which we find extremely difficult to understand, even with the able help of Mrs Alexander, and perhaps that could be re-drafted and explained so that someone, reading it again bearing in mind who, reading it could understand fully what was intended.
Thirdly, there is the problem of continuous employment, as indicated in paragraph 9, and if that is related to the present paragraph 5 it is a little difficult to see quite how continuous employment with the Shaw Trust can be related to the redundancy situation of the host organisation.
Looking at the contract with the host organisation, there does not seem to be any provision for termination, whether by notice or otherwise, secondly, there does not seem to be any clear indication of the circumstances in which the contract can be terminated. That again, in our view, should be examined. It is a fairly simple matter of re-drafting but in that contract there are other minor points, perhaps that contract could be examined if the present system is the same as it was when this case occurred.
Therefore, with those comments, which we hope are constructive, we simply say this, appeal is to be dismissed.