United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R S SYMONDS (Free Representation Unit) Room 140 49/51 Bedford Row London WC1R 4LR
For the Respondents	MR A CHOUDHURY (of Counsel) Messrs Blandy & Blandy Solicitors 1 Friar Street Reading Berks RG1 1DA


 


JUDGE PETER CLARK: This appeal raises a short point on an employee's entitlement to a redundancy payment.

Mrs Angela Irving, the Appellant before us and Applicant before the Industrial Tribunal commenced employment with Aramark Plc (the Respondent) on 19 May 1986, and remained continuously employed until her dismissal which took effect on 30 December 1994.

Following her dismissal she sought from and was refused a redundancy payment by the Respondent. She complained to an Industrial Tribunal. Her complaint was heard and dismissed by the London (North) Industrial Tribunal on 5 December 1995. Extended Reasons for that decision are dated 17 January 1996. Against that decision she now appeals.

There was some dispute as to the facts. Where factual issues arose they were resolved by the Industrial Tribunal in favour of the Respondent. We shall summarise the Tribunal's relevant findings of fact only so far as is necessary for the purposes of this judgment.

The Respondents are a catering business. In early July 1994 the Appellant was employed as a Food Service Manager at the British Gas site at Hemel Hempstead. The Respondent's catering contract with British Gas at that site was due to end on 31 August 1994.

By letter dated 12 July 1994 the Respondent gave formal notice of termination of her employment on 31 August, unless a suitable alternative position could be found which was acceptable to her. The letter records:

"If another post can be found before your employment terminates, you will transfer to the new job and your employment will be continuous."

An alternative position was found for the Appellant, and accepted by her, as a Temporary Relief Manager at Mercury PCN, Borehamwood. That temporary appointment was initially for a period ending on 28 October, but was later extended by agreement, first until 28 November and finally until 30 December 1994.

In anticipation of termination on that date her then accrued paid holiday entitlement was calculated at 13 days and payment was made in respect of that entitlement.

On 22 December she was interviewed by Mrs Dackombe, the Regional Operations Manager, and offered a relief manager's position at Hatfield. It was similar to the post which she had previously held. The salary was to be £12,500 per annum and expenses could be claimed. She accepted the offer, subject to her salary being increased to £13,000. At that meeting the Appellant explained that she had booked a holiday from mid-January until early February 1995. It was agreed, subject to the question of salary, that although Mrs Dackombe wanted the Appellant to start in January, she could start on 6 February. Also, at that meeting, Mrs Dackombe informed the Appellant that she would have continuity of employment.

The following day, 23 December, having obtained authorisation to increase the salary to £13,000, Mrs Dackombe telephoned the Appellant to inform her of this variation to the offer made the previous day, and the Tribunal found that the Appellant accepted the offer. She asked for the offer to be confirmed in writing. Due to the Christmas break this was not done until 4 January 1995. However, the Industrial Tribunal found at paragraph 11 of their reasons that the terms of the oral offer were contained in the letter of that date. That letter read, so far as material:

"Dear Angela

I am pleased to confirm the details of your transfer to Relief Manager at South East 2 Region, reporting to Sue Dackombe, Operations Manager.

Your effective date of transfer was 24th December 1994, although your service with the Company is recognised as being continuous from 19th May 1986.

Your salary will be £13,000 per annum which will take effective (sic) from 6th February 1995. This is normally reviewed annually."

It was signed by Mrs Siddle, the Regional Training and Personnel Manager.

However, on that same day the Appellant telephoned Mrs Mayall, also of Personnel, saying that she was no longer interested in the job on offer and that as she had not received written confirmation of the offer she had found employment elsewhere. She had in fact started work for Sutcliffe Catering the previous day.

The Tribunal find expressly that the oral offer was not subject to written confirmation.

On 2 February 1995 Mrs Mayall wrote to the Appellant informing her that the Respondent would not be making a redundancy payment because she had been offered a suitable alternative position on 23 December 1994 which she had subsequently unreasonably refused, having initially accepted it.

The claim was then taken up on her behalf, leading to the application to the Industrial Tribunal. In short, the Tribunal found that an offer of suitable alternative employment had been made orally to the Appellant before the termination of her employment on 30 December 1994, to take immediate effect, and that she had unreasonably refused it.

The point in this appeal is one raised on behalf of the Appellant and rejected by the Industrial Tribunal. It is dealt with in paragraph 7 of their reasons in this way:

"7 At the end of the Respondent's evidence, Mr Symonds on the Applicant's behalf made a submission that section 82(3) of the 1978 Act did not apply to the facts of the case because, in any event, regardless of the Tribunal's findings on the disputed evidence as outlined in the preceding paragraph of the Tribunal's decision, the new contract would not have come into force until 6 February 1995, i.e., more than four weeks after the termination of the Applicant's employment on 30 December, 1994. He argued that the Respondent could not rely on section 82(3) and (5) to justify the refusal to pay the Applicant her entitlement to redundancy payment. The Tribunal rejected that submission. The short answer to that submission is that the Applicant's employment terminated on 30 December 1994 only because the Applicant decided, subsequent to 23 Deember, contrary to her oral agreement with Ms Dackombe not to take up the offer of employment. Had she done so, there would have been no break in her continuity of employment (this is not in dispute), and her new job would have been a 'renewal of her existing contract' effectively without a break in the continuity of employment. The operative words in section 82(3) are ' ... the renewal ... would take effect either immediately on the ending of his employment under the previous contract ...' The wording of Respondent's letter dated 4 January 1995 confirming the oral offer of 23 December (see below) lends support to our finding. It is stated therein that the new post is a

'... transfer to Relief Manager .

.. your effective date of transfer was 24th December 1994, although your service with the company is recognised as being continuous from 19th May 1986...'."

Section 82(3) of the 1978 Act reads in full:

"If an employer makes an employee an offer (whether in writing or not) before the ending of his employment under the previous contract to renew his contract of employment, or to re-engage him under a new contract of employment, so that the renewal or re-engagement would take effect either immediately on the ending of his employment under the previous contract or after an interval of not more than four weeks thereafter, the provisions of subsections (5) and (6) shall have effect."

In this appeal Mr Symonds, for the Appellant, repeats his submission made to the Industrial Tribunal. In essence it is this. Section 82(3) is unequivocal; the offer must be made before the ending of the previous contract. That was done. However, it must be an offer of renewal of the contract, or re-engagement under a new contract, to take effect either immediately on the ending of the employment under the previous contract or after an interval of not more than four weeks thereafter. Here, he contends, the offer was one of renewal or re-engagement on 6 February, that is, more than four weeks after 30 December 1994, the date of termination of the previous contract. Accordingly, the Appellant is not prevented from being entitled to a redundancy payment by the combined effect of section 82(3) and (5).

In support of that submission he points to the following:

(1) It was envisaged that the Appellant would do no work for the Respondent, and receive no pay, for the period 1 January to 6 February 1995. That is inconsistent with there being a contract of employment in existence during that period, and

(2) the Tribunal's finding that continuity of employment would be preserved during that period by arrangement between the parties is nevertheless consistent with their being no contract in existence - See Schedule 13 paragraph 9(1)(c) of the Employment Protection (Consolidation) Act 1978 which provides:

"Periods in which there is no contract of employment.

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

(c) absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in the employment of his employer for all or any purposes,

that week shall, notwithstanding that it does not fall under paragraph 4, count as a period of employment."

(3) The only finding upon which the Tribunal relied for their conclusion that the new contract took effect immediately after termination of the previous contract, was their finding as to continuity, which, as he submitted under (2) above, is consistent with their being no contract in existence during the relevant period and does not answer the question posed by section 82(3).

In approaching this matter we have asked ourselves, as an appellate tribunal, this question: was the Industrial Tribunal entitled to conclude that the Respondent's offer was an offer of renewal of the contract or re-engagement (more properly we think) to take immediate effect upon termination of the old contract of employment on 30 December 1994? Mr Symonds answers that question in the negative; Mr Choudhury in the affirmative. In our judgment, Mr Choudhury is correct for the following reasons:

(1) Continuity of employment exists where there is a contract of employment in existence and, in certain circumstances, is deemed to exist where there is no contract. Thus, a finding of continuity does not, of itself, determine the question as to whether, at that time there is a contract in existence.

(2) In this case the Industrial Tribunal found that the offer made orally on 22 and 23 December 1994 was confirmed in the letter of 4 January 1995. That letter states in terms that the effective date of transfer was 24 December 1994; that date is also shown as the date of commencement of the new employment in the Statement of Terms and Conditions sent to the Appellant with the letter of 4 January. The explanation for that date is that the Appellant was not required to work under the old contract, due to the Christmas break, between 24 - 30 December. It was therefore contemplated in the offer that there would be no break between the old and new contracts.

(3) The reference to continuity of employment being preserved is a red herring. It is equally consistent with their being a contract in existence throughout, as with being an arrangement under paragraph 9(1)(c) of Schedule 13 to the 1978 Act, which only arises as a deeming provision where there is no contract in existence - See Ingram v Foxon [1984] ICR 685 and Ford v Warwickshire County Council [1983] ICR 273, 282 H - 283 A (per Lord Diplock) and 288 D (per Lord Brightman).

(4) The critical finding in this case in our judgment, is that by consent, due to the Appellants' pre-booked holiday in January, the parties agreed that the Appellant would not work, and would not be paid, under the new contract, until 6 February 1995. That agreement is not inconsistent with there being a contract of employment in existence during that period, but by consent the mutual obligations of work and pay are suspended. A similar provision is to be found in many Contracts of Employment under contractual disciplinary procedures. An employee may agree to suspension without pay during disciplinary proceedings. That does not mean that there is no contract of employment in existence during the period of suspension.

In these circumstances we answer the question which we have posed to ourselves in the affirmative. The appeal must be dismissed.