United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 596_93_2502

Appeal No.EAT/596/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 25th February 1994

Judgment delivered on 14th April 1994

Before

THE HONOURABLE MR JUSTICE MUMMERY (PRESIDENT)

MR D O GLADWIN CBE JP

MR K M YOUNG CBE

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J SAINSBURY PLC          APPELLANTS

MRS B MOGER          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR C JEANS

(of Counsel)

Mr C Arnold

J Sainsbury Plc

Legal Department

Stamford House

Stamford Street

LONDON SE1 9LL

For the Respondent MR D BROWN

(of Counsel)

Solicitor

USDAW

188 Wilmslow Road

Fallowfield

MANCHESTER M14 6LJ


 


MR JUSTICE MUMMERY (PRESIDENT) Introduction This claim for unfair dismissal has several unusual features. The most startling of them is that in the Industrial Tribunal held at Bristol it was successfully argued on behalf of the employee that there was no dismissal. The employers appealed. It was argued on their behalf that there was a dismissal. It was argued on behalf of the employee that the employers' appeal should be allowed by consent without the Employment Appeal Tribunal giving any reasons for its decision.

How has this extraordinary situation arisen?

The Facts

There was no dispute about the salient facts of the case. The following facts appear from agreed documents and from the decision of the Tribunal notified to the parties on 15th June 1993.

(1) Mrs Moger was employed as a night shift display assistant by J Sainsbury Plc (Sainsbury's) at Green Park, Bath, from 14th May 1990.

(2) Mrs Moger's contract of employment contained a provision which entitled her, when she was on sick leave, to have included in her sick leave pay the amount of night shift premium payable to her for working on the night shift. The particulars of her employment are dated 5th May 1990.

(3) On 8th May 1992 Mrs Moger and other members of the night shift staff were notified by the Branch Manager that the night shift premium would no longer be paid for any period of absence with effect from 30th August 1992. The reason given for the decision was -

"As has already been explained to you, the night shift premium represents an unsocial hours payment, and until now has been the only such payment made to staff when they do not attend work during unsocial hours. This obviously represents an anomaly, and one we wish to bring into line with all other unsocial hours payments. It will however be included in calculations for holiday pay and profit share."

(4) The Union and some of the staff objected to the proposed change in the terms of employment. In response to the letter of 8th May 1992 individual members of staff, including Mrs Moger, wrote -

"I refer to your letter of 8th May 1992. I do not consent to any variation of my contract.

My contract entitles me to night shift premium in addition to my basic pay whilst I am absent from work.

I shall continue to work normally but my conduct by doing so shall not be regarded as accepting the change.

I shall regard any failure to pay night shift premium as a breach of contract and I reserve my right to sue on my contract and/or apply to the Tribunal under the Wages Act and the EP(C) A 1978.

I wish to raise a grievance about this and that the matter be referred to my Union, USDAW."

(5) On 7th September 1992 a further letter was sent by the Branch Manager of Sainsbury's to all night shift staff. The letter referred to the earlier proposal and to the fact that Sainsbury's had listened to a number of representations from staff. That process had taken longer than anticipated and, as a result, the implementation date had been changed. The letter stated -

"The purpose of this letter is to give you formal notice that your current contract will terminate on 5th December 1992. Immediately after this date a new contract will come into effect which will be exactly the same as your current version except that it will contain the term that the night shift premium will not be included in sickness payment calculations.

This is just a technical point, and will not affect your length of service or other benefits in any way. For this reason it will not be necessary for you to be issued with a revised statement of terms and conditions.

Please sign the tear-off slip below to acknowledge receipt of this letter and return the slip to your Personnel Manager."

The Industrial Tribunal found that the purpose of Sainsbury's management in sending the letter to Mrs Moger was to bring about a change in the terms and conditions on which she was employed. There was no intention to end employment.

(6) In response to that letter Mrs Moger signed the tear-off slip and returned it to Sainsbury's acknowledging receipt of the letter of 7th September 1992. She also sent to Sainsbury's some time in November a copy of the letter which she had written in response to the earlier letter dated 8th May 1992. No agreement was reached between Sainsbury's and Mrs Moger on a change in her terms and conditions of employment.

(7) The 5th December arrived. Mrs Moger continued to work in Sainsbury's at Bath. On 7th December 1992, the Manager of the Sainsbury's at Bath wrote to Mrs Moger as follows -

"I acknowledge receipt of your recent letter in which you state your non-acceptance of the contractual change which removes your entitlement to have the night shift premium included in sick pay calculations.

My last letter to you made it clear that your current contract of employment will end on December 5th, and that a new contract incorporating the new contractual term will commence on your first shift after that date.

Your continued working after December 5th will therefore confirm your acceptance of the revised contract.

I have to tell you that the grievance referred to in your previous letter has been discussed by USDAW and Company management. Very careful consideration was given to the representations made on your behalf, but I regret to tell you that the decision to remove the premium from sick pay remains unaltered."

Mrs Moger is still working in Sainsbury's.

The Proceedings

On 25th February 1993, Mrs Moger presented a complaint to the Industrial Tribunal. She was represented by her Union. She made three complaints arising out of her allegation that Sainsbury's purported unilaterally to vary her contract of employment to abolish her night shift premium when absent from work. She had not agreed to any such change and had protested about it. She claimed relief under three headings

(1) Declaration of contract term. She asked for a declaration under S.11 of the Employment Protection (Consolidation) Act 1978 that she was entitled to night shift premium pay when absent from work.

(2) Wages Act 1986. She contended that the Company's failure to pay her the night shift premium was a wrongful deduction of wages contrary to the Wages Act 1986 and that she was entitled to compensation for non-payment. No deductions have yet been made.

(3) Unfair dismissal. Alternatively, if Sainsbury's had terminated her contract of employment, which she did not admit, she claimed that the termination constituted dismissal for the purposes of S.55 of the 1978 Act and that her dismissal was unfair. She continued to work for the Company in order to mitigate her loss.

There has been no full hearing of the claims by Mrs Moger because on 12th May 1993 the Chairman of the Industrial Tribunal held at Bristol made an interlocutory order for a preliminary hearing. The order was in these terms -

"IT IS ORDERED that there shall be a preliminary hearing in the case of Mrs B Moger (Case No.13581/93) at the Regional Office of the Industrial Tribunals, ... to determine whether Mrs Moger was dismissed from her employment with the respondents within the meaning of the provisions of Section 55 of the Employment Protection (Consolidation) Act 1978 on 5 December 1992, at the conclusion of which hearing further directions will be given as to when the remainder of the issues in her case and the whole of the issues in the other above-mentioned cases will be dealt with."

The "other cases" referred to are similar claims made by 13 other applicants employed by Sainsbury's.

The result of the order for the preliminary hearing was that the issue of dismissal was divorced from the other issues raised by Mrs Moger's complaint. It is appropriate in some cases to have a preliminary hearing on the issue of dismissal. It would be appropriate, for example, in a case where a finding that there had been no dismissal would put an end to the proceedings. That procedure would save time and costs in the interests of the parties and of the public. In this case, however, we have reached the conclusion that the Chairman erred in law in directing a preliminary hearing on the issue of dismissal. A decision of the Tribunal on the preliminary hearing that there was no dismissal would not in fact bring an end to the proceedings. The position taken by Sainsbury's in their Notice of Appearance was that Mrs Moger's contract in its existing terms had been terminated lawfully and fairly with effect from 4th December 1992 in the interest of efficiency by eliminating an anomaly in the Sainsbury's payment structure. Sainsbury's case was stated as follows -

"For this purpose the applicant was dismissed and re-engaged on identical terms without the night shift premium on sick pay entitlement. The applicant accepted the new contract on the terms offered."

In those circumstances a decision of the Industrial Tribunal on the question of dismissal alone would not resolve the real dispute between the parties. That dispute was whether Mrs Moger's relevant contract of employment did or did not include night shift premium on sick pay entitlement. Mrs Moger's position was that the contract did include that provision, because it was in her original contract and she had never agreed a variation. On the other hand, Sainsbury's position was that her original contract containing that provision had been terminated and she had accepted a new contract on terms which did not include that provision. That dispute could only properly be resolved by hearing the whole case and then deciding whether, in all the circumstances, there had been a variation in the terms and conditions of employment.

The Decision of the Industrial Tribunal

The Industrial Tribunal heard the preliminary issue on 11th June 1993. Both sides were represented. It was argued on behalf of Sainsbury's that there was a dismissal by termination of Mrs Moger's existing contract on 5th December 1992, followed immediately by the coming into effect of an entirely new contract of employment. It was argued on behalf of Mrs Moger that there was no dismissal. All that had happened was an ineffective attempt by Sainsbury's to make a unilateral change in her terms of employment.

The Industrial Tribunal unanimously decided that Mrs Moger was not dismissed from her employment with Sainsbury's on 5th December 1992. The result of that decision was that Mrs Moger had successfully defeated her own claim for unfair dismissal since, if there was no dismissal, no question of unfairness could arise. This result was achieved without the Industrial Tribunal coming to any decision on the question of the terms of the new contract or on the remaining questions under S.11 of the 1978 Act and the Wages Act 1986.

Although the consequence of the decision of the Industrial Tribunal was that Sainsbury's could not be sued by Mrs Moger for unfair dismissal, Sainsbury's decided to appeal against the preliminary decision as being erroneous in law. According to the Notice of Appeal dated 15th July 1993 Sainsbury's wish to contend that the Industrial Tribunal erred in law in holding that the letter of 7th September 1992 did not amount in law to a notice of dismissal. The Industrial Tribunal had misdirected itself in law by failing to ask the correct legal question i.e. whether the effect of the letter was to terminate the contract, irrespective of whether the employment could continue by virtue of the acceptance of a new contract. The grounds also included a contention that the conclusion of the Industrial Tribunal was perverse and unsupported by any evidence.

On 21st September 1993, the Union's legal officer filed an answer on behalf of Mrs Moger resisting the appeal on the grounds relied on by the Industrial Tribunal and certain additional grounds.

As the hearing of the appeal approached, events took a different and unexpected turn. On 17th February 1994, the legal officer of USDAW wrote to the Employment Appeal Tribunal stating that the parties requested that the appeal should be allowed and that there should be substituted for the decision of the Industrial Tribunal a decision that Mrs Moger was dismissed by Sainsbury's on 5th December 1992 by the letter of 7th September 1992. They asked that the matter be remitted to the same or a differently constituted Tribunal for consideration of the remaining issues of the case. A request was made for a consent order to this effect.

On 18th February a letter was sent to the Registrar of the Employment Appeal Tribunal confirming that Sainsbury's concurred with the request by USDAW that the appeal should be allowed by consent.

By letter dated 22nd February 1994, the parties were notified of the decision of the Tribunal that the parties should attend at the hearing to argue the appeal. The hearing of the appeal accordingly took place on 25th February.

Allowing Appeals by Consent

At the hearing we made it clear to the parties that the Tribunal would not, as a general rule, allow an appeal by consent, unless satisfied that there are good reasons for doing so. The EAT follows the practice of the Court of Appeal as stated in Volume 1 of the Supreme Court Practice 1993, 59/1/21 -

"The general principle is that the Court of Appeal will not say that the conclusion of the judge in the court below is wrong merely because the parties to the appeal consent. The Court of Appeal has jurisdiction to allow an appeal by consent, but it does not exercise that jurisdiction unless there are good grounds for doing so. If the consent order sought does no more than alter the relief granted ... the Court of Appeal will probably make the consent order (at least if good reasons are shown why the matter cannot be dealt with by contract of compromise). If, however, the consent order sought involves reversing the judge's decision on a point of law, the Court of Appeal will decline to make the order unless special reasons are shown. The Court of Appeal will not declare that the judge's view of the law is wrong merely because the parties consent to an order that has that effect."

The EAT has, in certain circumstances, allowed appeals by consent without requiring the parties to attend a hearing: for example, where the parties have reached an overall settlement of their dispute and have agreed as part of the settlement that the decision of the Industrial Tribunal is in error. The EAT will examine the facts of the case and, if satisfied that both parties are fully aware of the situation and that it is a proper case for allowing the appeal, will make a consent order without a hearing. See British Publishing Co Ltd v. Fraser [1987] ICR 517.

In general, however, the EAT will not make an order by consent where there is no overall settlement of the dispute, and the parties, who intend to carry on fighting the case, ask for an order from the Appeal Tribunal that the matter be remitted to the Industrial Tribunal. Under the statutory provisions only the EAT can reverse the Industrial Tribunal's decision. The parties cannot achieve that by agreement. The EAT will not reverse the decision of an Industrial Tribunal and remit the matter to the same or differently constituted Tribunal, unless it is satisfied by argument that the Industrial Tribunal erred in law.

In this case the parties placed before the Tribunal a consent order asking not only for the appeal to be allowed but also for the case to be remitted to the Industrial Tribunal for consideration of other issues. The Tribunal declined to make such an order by consent and requested argument.

Counsel for Sainsbury's proceeded to argue the appeal with the help of a full Skeleton Argument. The representative of Mrs Moger supported the appeal and did not advance any independent arguments except to submit that, if the Tribunal allowed the appeal, it should not give any reasons. Sainsbury's counsel stated that he was neutral on that matter.

Reasons for decisions of the Employment Appeal Tribunal

The Tribunal refused to accede to the request that the Tribunal should not give reason for its decision. The Tribunal cannot accede to such a course simply because it is requested by one party and not opposed by the other. The submission that the Tribunal should give no reasons for its decision has to be considered in the light of the Rules, the settled practice of the Tribunal and the conventions governing the form and content of judicial decisions.

On behalf of Mrs Moger, Mr Brown pointed out that the EAT Rules 1993 do not require reasons to be given by the Tribunal save where a party applies within 14 days after the making of an order finally disposing of any proceedings. On such an application the EAT must give its reasons in writing for the order: See Rule 31(2). It was submitted that neither of the parties intended to apply to the Tribunal to give its reasons for its decision and, in those circumstances, the Tribunal need not give reasons.

We reject that submission. It does not follow from the provisions of Rule 31(2) that, in the absence of an application by a party, the Tribunal is under no duty to give reasons for its decision. The argument ignores both the settled practice of this Tribunal and general principles governing judicial decisions. It is the settled practice of this Tribunal to give reasons for its decisions. That practice should not be departed from unless there is a good reason for doing so. No good reason has been suggested in this case other than one of the parties does not wish to have reasons and the other is neutral on the matter. No explanation has been given to the Tribunal as to why the interests of the parties and the public would be better served by the absence of reasons for the Tribunal's decision.

The practice of the Tribunal accords with a convention that those who make judicial decisions affecting the rights of parties should give reasons for decisions. The Industrial Tribunal which heard the complaint, the Industrial Tribunal to whom a matter is remitted and the public, as well as the parties, are entitled to an explanation for the Tribunal's decision. The duty to give reasons also helps to concentrate the minds of the Tribunal members on the relevant issues and arguments.

For those reasons we decline to accede to the request that we should not give reasons for our decision on this appeal.

Submissions of Sainsbury's on the Appeal

Sainsbury's made the following submissions in support of the contention that the Industrial Tribunal erred in law in its conclusion that Mrs Moger had not been dismissed.

(1) Section 55(2) of the 1978 Act provides that -

"Subject to subsection (3), an employee shall be treated as dismissed by his employer if, but only if -

(a) the contract under which he is employed by the employer is terminated by the employer, whether it is so terminated by notice or without notice. ..."

(2) That provision refers to the termination of "the contract". The contract may terminate, even though employment with the same employer continues. It was stated by Garland J. in Hogg v. Dover College [1990] ICR 39 at 42D -

"... employment results from a contract. It is the contract at which one has to look, not the relationship of the employer and employee."

The Industrial Tribunal wrongly equated the termination of the contract of Mrs Moger with the termination of her employment. The Tribunal disregarded a vital and fundamental distinction.

(3) The Tribunal wrongly relied on the evidence given by Sainsbury's Senior Retail Personnel Manager, Mr Moffat, to the effect that "there was no intention to end employment". The subjective intentions of the parties or the signatory to the relevant letter is irrelevant. The letter of 7th September should be construed according to its objective meaning and not in accordance with the subjective intentions of Mr Moffat.

(4) On its proper construction the letter of 7th September was clear namely, that the current contract would terminate on 5th December 1992. It was an unambiguous notice of termination and the Industrial Tribunal erred in construing the letter as being anything else than a letter of termination.

(5) In those circumstances the decision of the Industrial Tribunal was perverse in regarding such clear language in the letter as falling short of a dismissal.

Sainsbury's submitted that there was no need to remit the matter to the Industrial Tribunal since the only proper conclusion on the preliminary hearing was that there was a dismissal.

Conclusions

The decision of this Tribunal is that the appeal should be allowed and that the whole case should be remitted to the Industrial Tribunal for it to deal with all questions arising in the proceedings, including the question of Mrs Moger's dismissal. Our reasons for this decision are as follows:-

(1) The Chairman of the Tribunal erred in law in ordering a preliminary hearing on the question of dismissal. This was not an appropriate case for a preliminary hearing. The issue of dismissal arose in very different circumstances than the usual case of the loss of a job. The dismissal issue in this case is part of a wider dispute as to whether the termination of one contract has been followed by the formation of a new contract on new terms. That question cannot be decided without looking at all the relevant facts, including the circumstances relied upon by Sainsbury's for saying that the original contract of employment was terminated.

(2) It will be necessary for the Industrial Tribunal to consider a number of possibilities.

(a) One view is that, as argued by Sainsbury's, there has been a termination of a contract of employment and the making of a new contract on new terms which do not include provision for the inclusion of night shift premium in sickness payment calculations.

(b) Another view, held by Mrs Moger, is that the original contract has not terminated. This may be a difficult submission to accept in the light of the decision of the EAT in Hogg v. Dover College (supra). But her submission must be looked at in the light of the overall dispute as to whether there has been a change effected in the terms and conditions of Mrs Moger's employment.

(c) A third possibility is that Sainsbury's effectively terminated the original contract by the letter of 7th September 1992, but that the offer to enter into a new contract on different terms was rejected by Mrs Moger. In those circumstances, a question will arise as to the effect of Mrs Moger continuing to work at Sainsbury's. Sainsbury's apparently wish to argue that, by continuing to work, she has entered into a new contract on the new terms proposed. It will, however, be open to Mrs Moger to argue that any new contract which she has entered into is on the same terms as the original contract, because she rejected the offer of new terms and, in accordance with ordinary contractual principles, the rejection of an offer terminates the offer, so that it can no longer be accepted: see Chitty on Contracts (26th Edition) at paragraph 95.

We express no concluded views on the possible outcome of the dispute. The facts have not been fully investigated or argued in relation to the alleged new contract.

For these reasons the matter will be remitted to a different Industrial Tribunal to decide the matter of dismissal in the context of the whole dispute about the alleged new contract, as well as the claims under S.11 of the 1978 Act and under the Wages Act 1986.