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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Crosville Wales Ltd v Tracey & 73 Ors [1994] UKEAT 578_93_0102 (1 February 1994)
URL: http://www.bailii.org/uk/cases/UKEAT/1994/578_93_0102.html
Cite as: [1994] UKEAT 578_93_0102, [1994] UKEAT 578_93_102
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At the Tribunal
THE HONOURABLE MR JUSTICE MUMMERY (PRESIDENT)
MR A FERRY MBE
MR T THOMAS CBE
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellants MR D SEROTA QC
& MR J McMULLEN
(Of Counsel)
Messrs Wragge & Co
Solicitors
55 Colmore Row
BIRMINGHAM B3 2AS
For the Respondents MR J BOWERS
(of Counsel)
Messrs Jack Thornley & Partners
Solicitors
8 Warrington Street
Ashton-under-Lyne
OL6 6PX
MR JUSTICE MUMMERY (PRESIDENT) The points canvassed on this appeal impinge on a socially sensitive, politically controversial and legally uncertain area of industrial relations. The principal issue is whether, when considering a reduction in compensation payable to an employee, who has been unfairly dismissed for engaging in industrial action, it is permissible for the Industrial Tribunal to take into account the facts and circumstances surrounding that dismissal. The answer to the question depends on the construction of S.73(7B) of the 1978 Act, in relation to the calculation of the basic award, and of S.74(1) and (6), when calculating the compensatory award.
There are two conflicting decisions of the Employment Appeal Tribunal on this point. In the present case the Industrial Tribunal, sitting at Shrewsbury on four days in April 1993, followed the decision of the Employment Appeal Tribunal in Courtaulds Northern Spinning Ltd v. Moosa [1984] ICR 218 in which it was held that it was not permissible for an Industrial Tribunal to hold, under S.74(6), that industrial action, in which an employee had taken part, in itself justified a reduction in compensation. The reason for the decision was that, as disclosed by S.62 of the 1978 Act, the intention of Parliament was to prevent Industrial Tribunals from going into the merits or demerits of collective industrial disputes. An Industrial Tribunal is unable to determine whether or not, or to what extent, it is just and equitable to make a reduction in compensation. For reasons stated in the reserved decision of the Tribunal, notified to the parties on 15th June 1993, compensation was awarded to all the employees for unfair dismissal, without any reduction on account of the Applicants' participation in industrial action. The Tribunal added that, if it was wrong in that finding and it was permissible to look at the merits of the industrial dispute, it would have reduced the employees' compensation by 50%.
On 21st July 1993 the Employment Appeal Tribunal handed down a reserved decision in the case of TNT Express (UK) Ltd v. Downes [1994] ICR 1. The purpose of that appeal was stated by Mr Justice Wood in the first sentence of the judgment to decide whether Courtaulds Spinning Ltd v. Moosa (supra) should be followed in future. The Employment Appeal Tribunal held that, in deciding whether unfair dismissal compensation should be reduced, the circumstances surrounding the industrial action were relevant for the consideration of the Tribunal. The Tribunal gave leave to appeal to the Court of Appeal. We have been informed by counsel that the appeal is likely to be heard in July this year.
The only live issues before this Tribunal on the appeal and on the cross-appeal are -
(1) In deciding this appeal, which of the two conflicting decisions should this Tribunal follow? Crosville Wales Ltd, the Appellant employerss who have been ordered to pay compensation to the Applicants without reduction, contend that the later case, decided after the hearing in the Industrial Tribunal, should be followed. In that event the appeal should be allowed and the compensation payable should be reduced by 50%, as indicated by the Tribunal should it turn out to be wrong in refusing a reduction. On the other hand, the Respondent employees submit that the later case was wrongly decided and that this Tribunal should follow the earlier case and dismiss the appeal.
(2) If, as submitted by the Appellants, the more recent case should be followed, it is argued on the cross-appeal that the Tribunal erred in law in indicating that a 50% reduction in compensation was appropriate. The Respondents submit that the cross-appeal should be allowed and the matter remitted to the Industrial Tribunal for a fresh hearing on the question of contributory fault in relation to the calculation of compensation.
The Facts
Crosville Wales employed in its business 119 bus drivers, all members of the Transport & General Workers' Union. In June 1990 a wage review was due. In September 1990 an increase was agreed for the engineering staff, but not for the drivers. On 3rd October 1990 the Union decided to hold a secret ballot. The ballot held on 8th October 1990 resulted a majority decision in favour of industrial action short of a strike or strike action.
A union meeting was held on Monday 23rd October. It was decided to operate a ban on overtime working and working on rest days from midnight on Saturday 27th October. This would have the effect of destroying the Sunday bus routes which were totally reliant on voluntary work from overtime and rest days.
The Divisional Manager, Mr Ellis-Jones, wrote a letter to all employees on 23rd October expressing regret at the decision to implement an overtime ban from Saturday in support of the pay claims. He pointed out that the Union representatives were aware of the company's grave financial position and that the company had made the best offer possible. He also stated that the proposed action was in breach of the agreed procedure and was taken before proper negotiations had been concluded. He concluded that he was particularly concerned about contract work, especially Sundays which, if disrupted, would be reallocated by the County Council to the company's competitors. That would result in a loss of jobs at Wrexham, a weaker financial position at the depot and less money for wages. It was conceded by Mr O'Leary, the Union's full time district officer, that the Union had not followed the agreed procedure for the avoidance of disputes contained in Appendix E to the Drivers' Instruction Book. In the event of failure to come to an agreement at depot level, the agreed procedure provided for a meeting between the local representatives, the depot official and local union officer and, if there was failure at that level, provision was made for a meeting between a Board member, the full time Trade Union official and the elected depot representative.
On 25th October there was a joint meeting at Flint of staff and management attended by Mr O'Leary and other representatives of the employees with representatives of the employers. No agreement was reached. On 27th October the ban on overtime and rest day working began, as threatened. The depot superintendent at Wrexham, Mr Poole, posted a notice in the garage announcing that an "open forum" had been arranged in the depot canteen for Tuesday 30th October. The purpose of the forum was to make sure that everyone was aware of the seriousness of the situation and the possible consequences of continuing the industrial action. During the course of the 30th October various events occurred before the meeting. Mr Woolley, the Trade Union's Branch Secretary, and others went to see Mr Poole and asked him if he would take down the compulsory Sunday rota which he had issued following the meeting held on 25th October. Mr Poole refused. Later in the day Mr Woolley was informed that he, along with others who had attended the earlier meeting with Mr Poole, were suspended without pay. When the meeting took place in the canteen about 80% of the drivers were present and there was a mass walk out. On the following day there was a meeting, which lasted only three or four minutes, at which the Union representatives asked for a written apology and a withdrawal of the suspensions.
On 1st November Mr Poole wrote to all employees advising them of the position relating to their decision not to work in accordance with their contracts of employment, and pointing out that each individual employee was in breach of contract and liable to dismissal. He contended that the ballot had not been correctly organised and was invalid and that, in view of the dire financial position of the depot, the company had no option but to require them to return to work by 3rd November for normal duty or they would be deemed to terminate their employment with the company.
The men did not return to work. On 5th November the drivers were dismissed by a letter from Mr Poole. On 13th and 15th November there were further meetings at which the Union representatives were told that the effects of the dispute meant that there was no question of taking all the drivers back. The best estimate was that 50/60 would now be required. The company rejected the Union's proposal that all the drivers should be taken back and that a redundancy exercise should be carried out. The company then carried out a recruitment exercise for replacement staff by notices at the Wrexham depot, press and local radio announcements and advice to local jobcentres. All the applications were considered, whether or not those applying had been involved in the strike action and had been dismissed. Every new employee was offered new terms and conditions of employment in line with the company's final pay offer to those employees who had been dismissed because of industrial action. All the strikers knew that the company was recruiting. They all had an opportunity of obtaining an application form, being interviewed and being considered for re-employment, but offers of re-engagement were not made to all of the employees who took part in the industrial action. The final figures were that 25 of those who had been dismissed applied. Those were all offered jobs, but only 22 of them took up the offers.
The strike effectively ended on 23rd February 1991 when the Wrexham depot was closed. The drivers at Wrexham were relocated along with the routes at other depots. The company continued to make losses and the Wrexham depot was eventually sold in July 1991.
The Proceedings
In the meantime, complaints of unfair dismissal were presented by drivers to the Industrial Tribunal. A preliminary question arose as to whether the Tribunal had jurisdiction under S.62 of the 1978 Act to hear the complaints. That section makes provision in relation to an employee who claims he has been unfairly dismissed by his employer where, at the date of the date of the dismissal, the employee was taking part in a strike or other industrial action. It is provided by subsection (2) -
"In such a case an Industrial Tribunal shall not determine whether the dismissal was fair or unfair unless it is shown -
(a) that one or more of the relevant employees of the same employer had not been dismissed, and
(b) that one or more such employees have been offered re-engagement and the employee concerned has not been offered re-engagement.
(3) Where it is shown that the condition referred to in paragraph (b) of subsection (2) is fulfilled, the provisions of sections 57 to 60 shall have effect as if in those sections any reference to the reason or principal reason for which the employee was dismissed there was substituted a reference to the reason or principal reason for which he has not been offered re-engagement."
At a preliminary hearing on 28th and 29th August 1991, the Industrial Tribunal, sitting at Shrewsbury, decided that it had jurisdiction under S.62 to hear complaints of unfair dismissal by 73 ex-employees of the company. On 6th October 1992 the Employment Appeal Tribunal dismissed the appeal by Crosville Wales Ltd against that decision.
At the substantive hearing in April 1993, the Industrial Tribunal decided that all the Applicants had been unfairly dismissed. There is no appeal against that decision.
A number of points were argued which do not arise on this appeal.
There was a considerable argument before the Industrial Tribunal on the point of contribution which arises on the appeal and the cross-appeal. It was argued on behalf of Crosville Wales that, on the question of contribution, the case of Moosa (supra) was wrongly decided and that it was permissible for the Industrial Tribunal to take into account the conduct of employees, including industrial action. It was argued that the Tribunal should consider all the background leading up to the re-engagement and that contribution in this case ought to be 100%, because the drivers knew what they were doing and the likelihood of what might happen to them. They could hardly complain, knowing of the risks that they took. The Tribunal rejected the argument that it should not follow the decision in Moosa. In case, however, the Tribunal was wrong in that conclusion, it stated in paragraph 89 what its conclusion would have been, if it had accepted the submission that, on the question of contribution, it was permissible to consider the industrial action taken by the employees. That conclusion is the subject of the cross-appeal by the drivers.
Paragraph 89 of the decision states -
"However, if we are wrong in our finding, and it is subsequently held that we should have followed Mr McMullen's argument and decided whether or not the applicants in this case contributed to their dismissal by their blameworthy conduct, and it was permissible for us to look at the merits of the industrial dispute in coming to a conclusion on this aspect of the case, then there is no doubt in our minds that we consider each party equally to blame, and we would unhesitatingly say that the applicants' compensation should be reduced by 50% to reflect that view. We say this in the main because, as admitted by Mr O'Leary, the employees and the Union had failed to follow procedure and did not carry out stages 2 and 3 of the Avoidance of Disputes procedure. That is the single most important reason for us coming to that conclusion. Whilst we know that conduct leading to contribution must only take into account the blameworthy conduct of the employees, it might also be useful for the parties to know how we arrived at apportioning blame on an equal basis. We feel that the respondents attempts to enforce compulsory Sunday working was a breach of the contract of employment of a fundamental term, and we totally reject the arguments put forward by Mr McMullen in that regard. We can fully understand the drivers' reaction to this insistence by management and we consider that management were behaving in a totally unreasonable way in the way they tried to impose that change and also their intransigence in the face of grave opposition in insisting that change would be made notwithstanding the end of the industrial dispute, and also their failure to agree to a cooling off period and return to status quo. We also considered management's suspension of the three men in question totally crass and insensitive and without any justification or foundation whatsoever, and we are not surprised that that inflamed the employees concerned. However, we would also criticise the drivers for rushing to their ballot for industrial action without going through the Avoidance of Disputes procedure and their clear determination to have a meeting in the canteen which inevitably would have meant the drivers leaving their routes and coming back to the canteen for it. The meeting on 31st October 1990 was farcical on both sides. Both parties were totally blinded by their own points of view and neither went to that meeting with an open mind nor ready to listen to the arguments of the other. It is for those reasons that we apportion blame at 50%."
The Appeal
Crosville Wales repeated its submission on this appeal that the decision of the Employment Appeal Tribunal in Moosa was wrong. It now claims to be fortified in that submission by the case of TNT Express (UK) Ltd v. Downes (supra) decided just over a month after the Industrial Tribunal gave its decision.
Against that, it is argued on behalf of the drivers that the decision in Moosa was correct. If, however, the decision in TNT Express is correct, the drivers cross-appeal against the conclusion of the Tribunal in paragraph 89 of its decision that the award of compensation should be reduced by 50% on the grounds of contributory fault.
Unfortunately, the hearing of the appeal did not run smoothly. There were two preliminary points which occupied too much time. Both points arose in the course of argument whether this Tribunal should follow the decision in TNT Express or the decision in Moosa. The first point concerned the composition of this Tribunal. The second was an application for an adjournment of this entire hearing until after the Court of Appeal has decided the appeal in TNT Express.
The conflicting decisions of the EAT in Moosa and TNT Express
On behalf of Crosville Wales, Mr Serota QC made a short and simple submission: the Industrial Tribunal erred in law in following the decision of the EAT in Moosa. In the later case of TNT Express the EAT decided that Moosa should not be followed in future. In accordance with the general practice of precedent, where there are two conflicting decisions at this level, the later is to be preferred if reached after full consideration of the earlier decision, unless the judge faced with the conflict of authority is convinced that the later decision was wrong in not following the earlier decision: Colchester Estates (Cardiff) v. Carlton Industries Plc [1986] Ch 80 at pages 85 and 86.
Against that, it was contended by Mr Bowers, in his skeleton argument on behalf of the drivers, that the decision in TNT Express was "manifestly wrong" and "with respect, faulty in every respect". He wished to develop this argument by reference to the Parliamentary debates on the relevant provisions and by a detailed analysis of the reasoning in the TNT Express case.
During his opening of the appeal, Mr Serota referred more than once to the fact that Miss Collerson, a member of this Tribunal, was also a member of the Tribunal, presided over by Mr Justice Wood, which decided the TNT Express case. As the argument developed, this Tribunal became increasingly concerned that the drivers might have ground for objecting to the composition of this Tribunal. The Tribunal therefore asked Mr Bowers, before he addressed us on the appeal and on the cross-appeal, whether his clients raised any objection to Miss Collerson continuing to sit on the hearing of this appeal. After taking instructions, Mr Bowers did object. He explained why the objection had not been raised earlier and apologised for the fact that it was raised after the appeal had been opened by Crosville Wales. Mr Serota, on behalf of Crosville Wales, objected to Mr Bowers' objection, mainly on the ground that it should have been raised before the hearing had started. After deliberation, we decided to uphold the objection. Arrangements were made for another member to take the place of Miss Collerson on the next day and for the appeal hearing to start afresh.
In upholding the objection we make it clear that it was not submitted on behalf of the drivers that Miss Collerson was likely to be biased or to act otherwise than judicially and with perfect propriety.
We concluded, however, that the continued presence of Miss Collerson on this Tribunal was inappropriate if one of the parties reasonably felt, in all the circumstances, that there might be an injustice. We agree with the view of Mr Justice Wood in Halford v. Sharples [1992] ICR 146 at 171 that
"It is infinitely preferable that an [industrial] tribunal should, where possible, be reconstituted so as to avoid any feeling of injustice."
If Miss Collerson remained a member of the Tribunal and Mr Bowers failed to convince the
Tribunal that the case of TNT Express to which Miss Collerson was party was wrongly decided, there is a risk that the drivers, for whom Mr Bowers appears, might feel that the result could have been different if the composition of the Tribunal had not included Miss Collerson.
The Tribunal was reconstituted overnight. On the following day the first application made by Mr Serota on behalf of Crosville Wales was that the entire hearing of the appeal should be adjourned until after the Court of Appeal had disposed of the TNT Express appeal. The basis of his application was foreshadowed in correspondence which took place between the parties and the Registrar of the Employment Appeal Tribunal in December 1993. When the solicitors acting for Crosville Wales were notified that the case was listed for hearing on 31st January and 1st February 1994, they wrote a letter to the Registrar requesting an adjournment pending the outcome of an appeal to the Court of Appeal of the decision in TNT Express. If that decision were upheld by the Court of Appeal that would significantly influence the Employment Appeal Tribunal's findings and approach in this case. They suggested that it was prudent and cost effective to adjourn the hearing. This view was not shared by the solicitors for the drivers. They were not prepared to have the case, now entering its fourth year, delayed any further. In the absence of agreement between the parties, the dates fixed for the hearing were not vacated.
On his application for an adjournment Mr Serota submitted that it was not sensible to proceed with the hearing in this case until the Court of Appeal had disposed of the TNT Express appeal. This hearing would be a barren exercise. If this Tribunal heard full argument on the conflict between the two earlier decisions, it would have to decide which one to follow, but there would be no certainty about the situation until the Court of Appeal had ruled on the matter. Whichever way the Court of Appeal decided the matter, time and money spent on the hearing before the EAT would be wasted. Crosville Wales would be prejudiced since they would incur costs which, in all probability, could not be recovered against the drivers. Further, there was no particular urgency. There had been delays, but further delays were unavoidable while the legal situation remained uncertain.
Mr Bowers opposed the adjournment. He pointed out that the longer the case went on, the more prejudice there was to his clients. They had not received any payment of compensation and interest on any sums due to them had not started to run. He pointed out that, if the matter were adjourned until the Court of Appeal decided the TNT Express appeal, there was a risk that the TNT Express appeal might never be decided. The appeal might be discontinued. Even if it were decided by the Court of Appeal, the matter might go to the House of Lords. It was not, therefore, in his clients' interests for the whole appeal to be adjourned. He also pointed out that the application for an adjournment was made late, after the hearing had started. The application for an adjournment made in December had been unsuccessful, but there had been no appeal against that.
The Tribunal was concerned to take a course which would cause the least inconvenience, delay and costs to each side. The Tribunal decided to take the following course.
No useful purpose would be served by hearing full argument on which of the two conflicting authorities should be followed. It appeared from Mr Bowers' skeleton argument that considerable time would be spent on hearing submissions as to why he contended that TNT Express was wrongly decided. This might include looking at Parliamentary debates on the relevant provisions. The Tribunal concluded that, in view of the pending appeal to the Court of Appeal, no sensible purpose would be served by further judicial debate at this level of decision. The basis of the general rule laid down in Colchester Estates (Cardiff) v. Carlton Industries Plc (supra) was that, at the level of decision where the conflict occurs, there must be an end of debate in the interests of certainty. Hence the general rule that the matter is treated as settled at first instance by the more recent decision. A further decision of the EAT will not eliminate the uncertainty. That will continue to exist until a ruling from the Court of Appeal. A decision on this hearing not to follow TNT Express would add to confusion on the legal position. We therefore propose that the appeal of Crosville Wales should be decided on the basis that the TNT Express decision correctly represents the law until the Court of Appeal rules to the contrary. The appeal of Crosville Wales will, therefore, be allowed with leave to appeal to cover the event that the EAT decision in TNT Express is reversed.
The question then arises as to whether, having allowed the appeal, this Tribunal should proceed to decide the cross-appeal and/or remit the matter to the Industrial Tribunal. It was argued by Mr Serota on behalf of Crosville Wales that his clients were prepared to accept the 50% reduction indicated at by the Industrial Tribunal for the reasons stated in paragraph 89 of its decision. On that basis the cross-appeal should be dismissed..
This course was not acceptable to Mr Bowers whose clients cross-appeal against the decision in paragraph 89. He submitted that, as the parties had incurred the expense of bringing the matter to a hearing before this Tribunal and of preparing arguments on the cross-appeal, that should be argued now. No further costs would be incurred. If it were held on the cross-appeal that the Tribunal had erred in law on this point, the matter could be remitted, though it was unlikely that any progress would be made with a further hearing in the Industrial Tribunal until the Court of Appeal had decided whether or not TNT Express was correct.
We accepted Mr Bowers' submission as the most sensible and pragmatic way of dealing with this appeal without putting the parties to unnecessary costs and inconvenience. The costs of the two day hearing had already been incurred. It would not cost any more to decide the point on the cross-appeal. The Tribunal appreciates that if TNT Express is reversed in a higher Court, any decision in favour of the drivers on the cross-appeal would become irrelevant. If, however, TNT Express is upheld by a higher Court then it would become necessary to consider whether the Industrial Tribunal in this case had correctly construed and applied the statutory provisions which relate to contributory fault. In that event, time and expense might be saved by having a decision of this Tribunal now in order to avoid possible further hearings, delay and expense after the higher Courts have resolved the conflict between the two cases.
Contributory fault
On the cross-appeal it was submitted on behalf of the drivers that the Industrial Tribunal erred in law in the construction of S.74(1) and (6) and S.73(7B) and in the application of those provisions to the facts of this case. For those reasons the drivers disputed the 50% reduction for contributory fault contained in paragraph 89 of the decision.
It is first necessary to look at the provisions that deal with the calculation of compensatory awards. It is provided by S.74(1) that -
"The amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer."
Subsection (6) is in these terms -
"Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."
Those two provisions contemplate a two-stage exercise.
(1) What amount of compensation does the Tribunal consider just and equitable in all the circumstances? In answering that question the Tribunal must have regard to the loss sustained by the complainant provided that -
(a) that loss is in consequence of the dismissal, and
(b) that loss is attributable to action taken by the employer.
Section 74(1) focuses on the fact of consequential loss and on the actions of the employer. No compensation will be payable if (and to the extent that) -
(a) the complainant has not sustained loss; or
(b) loss sustained by the complainant was not in consequence of the dismissal; or
(c) the loss sustained in consequence of dismissal is not attributable to the employer's actions.
(2) If a compensatory award is made under S.74(1) the Tribunal may be asked to decide: was the dismissal to any extent caused or contributed to by any action of the complainant? If the answer is "Yes", the Tribunal must reduce the amount of compensatory award. The amount of the reduction is by such proportion "as it considers just and equitable" having regard to the finding of contributory fault.
There are separate provisions relating to the calculation of the basic award in S.73. Section 73(1) provides that the amount of the basic award shall be calculated in accordance with the ensuing subsections. Section 73(7B) provides -
"Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly."
The question posed by that provision is: Would it be just and equitable to reduce the amount of the basic award to any extent, having regard to any conduct of the complainant before the dismissal (or notice)?
Crosville Wales submitted that the Industrial Tribunal made no error of law in concluding that there should be a 50% reduction for contributory fault, having regard to the blameworthy conduct of the drivers in the industrial dispute. Mr Serota submitted that the Tribunal was invited by the parties to deal with the matter on the agreed basis that all the Applicants should be treated as one and "that the same principles applied to each individual Applicant", with one exception which is not relevant. The Tribunal correctly directed itself in paragraph 82 that, on the matter of contribution, it was necessary to consider S.73(7B) and S.74(6).
The Tribunal also referred to the decision of the Court of Appeal in Nelson v. BBC (No.2) [1980] ICR 110 on the interpretation of S.74(6). It correctly stated that, in order to justify a reduction in compensation under S.74(6), three things had to be established: first, blameworthy conduct by the employee; secondly, that conduct caused or contributed to the dismissal; and, thirdly, that it was just and equitable to reduce the compensation. In those circumstances, the Tribunal had correctly addressed itself to the relevant law and it had reached a permissible conclusion in making the 50% reduction. The decision could not be attacked as perverse. The Tribunal had, as it was asked to do, treated the matter "across the board". There had been no suggestion that different individuals should be treated differently on the matter of contribution. The Tribunal was entitled to look at the conduct of both sides, of employers and employees, and come to the conclusion that both were equally to blame.
In our view, the Tribunal had to deal with a difficult case. Many points were taken on each side. The question of contributory fault was one of the less important points, though it has assumed greater importance on this appeal. The main point before the Tribunal was whether the dismissals were fair or unfair and, if so, whether the Tribunal should in assessing compensation follow the decision of the EAT in Moosa. The Tribunal followed that decision and it was not therefore necessary for it to consider the conduct of the employees in relation to the industrial dispute in the context of contributory fault. The view in paragraph 89 was expressly on the basis that the Tribunal might be held to be wrong in its decision on the main point. In those circumstances, it is understandable that neither the representatives of the parties nor the Tribunal focused on points of construction of the relevant provisions. On this appeal we have been taken through paragraph 89 by both sides in detail. It is not, of course, appropriate to analyse the language of the paragraph too closely. In deciding whether the paragraph reveals an error of law on the part of the Tribunal, it is necessary to look at the matter broadly. Viewed in that way we have reached the conclusion that there was an error of law in the manner in which the Tribunal reached the conclusion of a 50% reduction. We agree with the following criticisms made by Mr Bowers.
(1) The Tribunal approached the matter in a broader manner than is permitted by the statutory provisions. It appears from several passages in paragraph 89 that the Tribunal embarked on a process of "apportioning blame" by reference to the "merits of the industrial dispute". On that basis they came to the conclusion that each party was equally to blame. This very broad approach indicates that the Tribunal erroneously thought it was permissible to conduct an inquest on the strike which led to the dismissal of the Applicants.
(2) The Tribunal equated the conduct of the Union, for example, in failing to follow the agreed procedure for the Avoidance of Disputes, with the conduct of the employees and regarded the failure to follow the procedure as "the single most important reason" for coming to the conclusion that the employees' conduct was blameworthy. The Tribunal did not consider the question whether a distinction should be drawn between, on the one hand, the conduct of the Union and, on the other hand, the conduct of the individuals who participated in industrial action.
(3) The Tribunal failed to ask the proper sequence of questions arising under Ss.73 and 74. It drew no distinction between the two sections, though that is not necessarily a serious criticism since, as was observed in Chaplin v. H J Rawlinson Ltd [1991] ICR 553 at 563, if contribution is found, it should on principle be found equally in proportion both to the basic award and to the compensatory award.
(4) In applying S.74(6) of the 1978 Act, the Tribunal should have adopted a more structured approach to contributory fault by asking the following questions.
(a) What was the reason for the dismissal of the Applicants?
(b) Was any conduct on the part of the Applicants blameworthy?
(c) Did the conduct on the part of the Applicants, which is to be considered blameworthy, contribute in a causative sense to the reason for dismissal?
The Tribunal should have answered each of these three questions before coming to a conclusion by what proportion, if any, it considered it just and equitable to reduce the amount of compensation payable under S.74(1). In reaching a decision on that proportion it would be relevant, if TNT Express is correctly decided, to take into account the conduct of Crosville Wales as well as the blameworthy conduct of the Applicants.
If these questions were asked and answered, then a distinction might be drawn (1) between the actions of the Union and the actions of the employees and (2) between the actions of those employees who were re-engaged and the action of those who were not re-engaged. It would not be appropriate for this Tribunal to express premature views as to the likely answer of the Industrial Tribunal to these questions. It appears to us from paragraph 89 that the question of contributory fault was clearly raised and argued, but the Industrial Tribunal's attention was not directed to the specific questions which the statute requires to be answered for the purposes of deciding whether there should be a reduction for contributory fault. Because of that error in approach, the matter has not been fully investigated on the facts.
For those reasons the Tribunal will allow the cross-appeal and remit the matter to the same Industrial Tribunal to decide whether there should be a reduction in the amount of the basic award and of the compensatory award pursuant to the provisions in S.73(7B) and S.74(6).
During the course of the appeal it was agreed between the parties that there should be remitted to the Industrial Tribunal, in any event, the question of what is described as the "Polkey" reduction. The Tribunal is satisfied that it is appropriate to make an Order by consent on this point in the following form.
"The question as to the extent, if any, to which the compensatory award should be reduced from what would otherwise be awarded to the Respondents on the basis of the chances of the Respondents continuing to be employed, had they not been dismissed, shall be remitted to the same Industrial Tribunal for consideration in the case of each Respondent individually and in accordance with the facts set out in paragraph 94 of the Decision of the Industrial Tribunal of 7th June 1993."