United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 750_93_1702

Appeal No. EAT/750/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17 February 1995

Before

HIS HONOUR JUDGE D M LEVY QC

MR A C BLYGHTON

MISS A MACKIE OBE

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MR T J MURRAY          APPELLANT

MR THOMAS MURRAY T/A NEWHOLME DECORATORS          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MISS JENNIFER EADY

(Of Counsel)

Messrs Christian Fisher

Solicitors

42 Museum Street

Bloomsbury

London

WC1A 1LY

For the Respondents NO APPEARANCE BY OR

ON BEHALF OF THE RESPONDENTS


 


JUDGE LEVY QC: This appeal, unfortunately, contains the bones of dispute between father and son. Mr T.J. Murray, the Appellant here, is the son of Mr Thomas Murray, who traded as Newholme Decorators, which as that name implies carried on the business of decorating. The son worked with his father for some considerable time. There were breaks in the working relationship, when there was no work to do. A time came when his father "dismissed" him.

The son commenced proceedings in the Industrial Tribunal on 9 February 1993. A Notice of Appearance was put in on 28 March 1993. There was a hearing at Liverpool on 4 August 1993 when the Tribunal concluded that the son's application had to be dismissed. It seems to us that it was so dismissed, because the Tribunal found there had been no continuity of employment in circumstances to which we will come.

The Full Reasons were sent out on 12 August 1993. A Notice of Appeal was lodged on 14 September 1993. There was a Respondent's notice on 9 October 1993. The Respondent, the father, has not attended today. Miss Eady, who appears for the son, has made sure that nothing has been left unsaid which would have been said on the father's behalf had he been here.

The son by his IT1, his Originating Application, claimed entitlement to a redundancy payment, claiming that he had been dismissed in January 1993, having been employed by the father since June 1982. The father did not seek to contend other than the son had been employed from before 1982, but denied that he had been dismissed. The father said that his son was his employee, but outlined the history of employment as being one during which there might be periods of unemployment.

The Industrial Tribunal's Decision seems to be limited to making the finding on one issue alone, namely whether or not the son had sufficient continuity of service to entitle him to claim a redundancy payment. Whilst the Industrial Tribunal considered the question whether it might be said that the son did not have continuity of service, due to a period of absence due to ill health, we accept Miss Eady's submission that it is implicit in their findings that the Industrial Tribunal found that breaks for health did not break continuity due to the provisions of paragraph 9(1)(a) of Schedule E to the Employment Protection (Consolidation) Act 1978, ("the 1978 Act").

The Industrial Tribunal's findings as to continuity is to be found at paragraph 9 of its holdings and it rests its consideration on paragraph 9(1)(b) of Schedule 13. Clearly, if paragraph 9(1)(b) applied, then the son would have sufficient continuity of employment to claim a redundancy payment. The finding in paragraph 9 was as follows:

"9. What then are we to make of this situation? (the factual background having been set out). It has, we have to say, caused us more than a little difficulty and our task has certainly not been made any easier either by the bad relationship now existing between the parties or by the imprecision with which certain terms such as `lay-off' have been used or understood by the parties. Our concluded view is that the applicant does not qualify for a redundancy payment at all. We base that view upon a consideration of the question of what is a `temporary cessation' of work in relation to a working relationship such as the one which has been described to us. Clearly, in 1990/91 there was a break of some 3 months. Is that temporary? We do not think it is. It is, we believe, sufficient to break continuity of service and if, as stated employment re-commenced in March 1991 but only continued to January 1993 then the applicant does not have 2 year's continuous service sufficient to sustain a claim for a redundancy payment. Quite apart from such considerations we conclude from an examination of the material available to us that the true nature of the relationship between the parties was that, in fact, whatever wording is now used, when work was not available for the son then the working relationship, in fact, came to an end and that when he returned to work this was on the basis of re-employment rather than on the basis of any true `lay-off' situation. Accordingly our ultimate finding is that this application fails and is dismissed".

Paragraph 9(1) of Schedule 13 of the Employment Protection (Consolidation) Act 1978 reads:

"9(1) If in any week the employee is, for the whole or part of the week -

(a) ....

(b) absent from work on account of a temporary cessation of work ....

that week shall, notwithstanding that it does not fall under paragraph 3, 4 or 5, count as a period of unemployment".

Of course it is common to the Industrial Tribunal and it is common here, for continuity of service to be calculated by the reference to the provisions of Schedule 13. A computation of the period of continuous employment is not limited to a consideration of the period of any contract of employment. Continuity of employment is not concerned with contracts of employment in this sense. That is something which those who are not familiar with employment law may initially find difficult to grasp.

Paragraph 9 of the Schedule deals with the question of gaps in employment and how these should be considered, if at all, for the purpose of calculating continuity. Paragraph 9 expressly deals with those situations where there is "no contract of employment". As was said by Phillips J., in Bentley Engineering Co Ltd v Crown [1976] ICR 225, an Industrial Tribunal is required "to look at the matter as a historian of a completed chapter of events and not as a journalist describing events as they occur from day to day". The classic case on this subject is the House of Lords decision in Fitzgerald v Hall Russell & Co Ltd [1970]

AC 984 to which Miss Eady has taken us.

At page 995 G of his speech, Lord Morris sets out Section 1 of the Redundancy Act 1965 and paragraphs 1(1) and (5) of Schedule 1 to the Act. In the course of his speech he stressed the importance of remembering that the words being considered were the words used in their context in the Contracts of Employment Act, 1963. The relevant present legislation is in the same terms and must be construed in the light of that warning.

His speech continued:

"The build-up of the period of `continuous employment' (upon the length of which the length of notice to terminate will depend) is arranged in the interests of employees. The situation to be contemplated is that there will have been employment, then dismissal, and then (after an interval) re-employment. Then if at some later date it is desired to give a notice to terminate the contract of employment the question will have to be asked - Why in that period between the two contracts was the employee absent from work? If it was a period during which he would have been at work but for the fact that his employer could not find work for him but which period ended when the employer did find work for him, I consider that it could properly be said that he was absent from work on account of a cessation of work even though the employer's business, or the particular department of it, had not completely closed down. Then if in the light of all the facts and circumstances (on a backward look as from the date when it is being decided what notice must be given) it could be said that such cessation of work was only `temporary', then by operation of law the period when in fact there was no working and no contract would `count' as part of a period of continuous employment".

The Tribunal below, we think, did not have the benefit of Fitzgerald being cited to them. They refer to "complicated law", but we do not refer to any authority in their decision.

It is perhaps relevant to add that this decision has more recently been applied by the decision the House of Lords in Ford v Warwickshire County Council [1983] ICR 273.

It seems to us that the Industrial Tribunal should have, but failed to ask the following questions: was there a cessation of the employee's work or job?; was the employee absent on account of that cessation?; was the cessation viewed with hindsight a temporary one?.

We have not set out all the facts which emerge from the Industrial Tribunal's decision. It is clear that the son had, in the 10 years prior to the end of it, a working relationship with the father and there were a number of occasions during that period when he was not required to work, because there was a fall-off in the work available. The son put this figure at two, the father at about four.

It was not however contended by either party, but that the son was employed during the 10 years more often than he was unemployed. Furthermore, it would appear that on each absence from work, both father and son considered this would be temporary and that the son would be re-employed as soon as work picked up. We find this, for example, in paragraph 8(5) of the findings of the Industrial Tribunal, where a letter that the father wrote to the son is set out. Some might think that in the circumstances the terms are somewhat formal.

"Dear Mr Murray

I am glad to see that you are now fit to resume work after your long period of enforced inactivity.

Unfortunately I have very little work on at the moment and cannot offer you any.

As the winter draws out I hope to get busier and if that's the case and I can re-employ you I will send for you.

Yours faithfully

T Murray".

Although the Industrial Tribunal in this case referred to the need to look back at the history, the factors which appear to be decisive in their decision are the length of absence and the fact that there was no "lay-off" as understood in its technical Employment Law sense. Whether the length of absence may be relevant, particularly in the case of an employee with short service, such as a three month period, cannot be decisive per Phillips J., in Bentley (where periods of absence of two years and 21 months were held to be temporary).

In the light of the complete employment history in this case, three months is a comparatively short period of time. Furthermore, the fact that this may not have been a lay-off in the more technical sense cannot be a relevant factor. Paragraph 9 of the Schedule is concerned with those cases where a "contract of employment no longer subsists". Where there may even have been a dismissal, the paragraph clearly envisages absence from work which is not in the nature of a lay-off being a situation where "the contract of employment" still exists. The lack of a guarantee payment must also be wholly irrelevant, as a right of payment of this nature is not limited to those situations where there is no contract of employment in existence.

We accept Miss Eady's submissions that the Industrial Tribunals was founded upon a plainly mistaken approach of law. The relevant questions which we have set out before, (namely (i) was there a cessation of the employee's work or job? (ii) was the employer absent on account of that cessation? and (iii) was the cessation viewed, with hindsight, a temporary one?) must all be answered in the affirmative. In those circumstances, it seems to us quite clear that the decision of the Tribunal below was plainly wrong.

We therefore allow this appeal.

Miss Eady has asked us to go somewhat further and not merely to allow this appeal and remit it back to the Industrial Tribunal, but to substitute a decision that we find there was sufficient continuity of employment to bring a redundancy position into being. That we do and we remit the son's application to the same Tribunal (if possible) to consider the further questions which arise having regard to the decision in this appeal.