United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 221_95_2401

Appeal No. EAT/221/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 24 January 1996

Judgment delivered on 13 March 1996

HIS HONOUR JUDGE C SMITH QC

MRS T A MARSLAND

MR J A SCOULLER

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MR R JOHNSON          APPELLANT

PEABODY TRUST          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR JOHN MACHELL

(of Counsel)

Free Representation Unit

First Floor

13 Old Square

Lincoln's Inn

London

WC2A 3UA

For the Respondents MR DAVID WRIGHT

(Solicitor)

Messrs Latham & Toone

Solicitors

80/81 Wood Gate

Loughborough

Leicestershire

LE11 2XE


 


JUDGE C SMITH QC: This is an appeal by Mr Johnson, the Applicant before the Industrial Tribunal against a decision of an Industrial Tribunal sitting at London (South) on 18 January 1995, when it held that the Appellant had been fairly dismissed on the grounds of redundancy.

The Appellant was employed by the Respondent Housing Association in 1977 and was dismissed on 14 January 1994. There were three issues before the Industrial Tribunal namely:

(1) whether the Appellant was redundant;

(2) whether if so the selection procedure was fair, and

(3) whether the criteria chosen for selection were fair and reasonable.

We should say at once that only (1) is the subject matter of this appeal, the Industrial Tribunal having decided all three in the affirmative.

The submission of the Appellant is that the Industrial Tribunal erred in law in holding that there was a redundancy situation; it was submitted to us on his behalf that applying Section 81(2)(b) of the 1978 Act in the light of the case law interpreting that subsection to the facts which were, or should have been, found by the Industrial Tribunal, the Appellant was not in a redundancy situation.

The Respondent, on the other hand, submits that the Industrial Tribunal was entirely justified in concluding that the Appellant's dismissal was attributable to redundancy.

Before we consider Counsels' submissions we turn to the Industrial Tribunal's decision insofar as it relates to this sole ground of appeal. The Industrial Tribunal sets out its findings of fact in paragraphs 4 to 9 inclusive of its decision. It found, amongst other things, that the Respondent was a very large housing association owning some 13,500 properties. It further found that in 1977 the Appellant was employed as a labourer.

The Respondents had a direct labour force composed of all the building trades, maintaining and rebuilding the Respondents' properties. By 1985 the Appellant had been promoted to the skilled trade of a roofer and paid accordingly. The Industrial Tribunal found that from that time on the Appellant was principally employed as a roofer and, in paragraph 8, expressly rejected the Appellant's contention that, by the time of his redundancy in January 1994, he had become a plasterer. From 1988 he had a written contract of employment as a roofer but by clause 15 of that contract he was required, as a trades person, to carry out multi-trade operations where possible. This alteration in his contractual terms was forced upon the Respondents by the economic climate. The contract therefore described the Appellant as a roofer and by clause 15 it was stated:

"15. ... Where possible tradespersons will be expected to carry out multi-trade operations."

In 1990 the Respondents had to make 30 painters and decorators redundant. They established criteria and the redundancies went through in 1991. In 1993, 9 people had to be made redundant because the Works Department was working at a loss. Initially, of those, there were two roofers but ultimately only one. Eventually the Appellant was selected as the roofer who was to be made redundant.

The Industrial Tribunal found that in a written statement dated July 1994, signed by the Appellant, clause 12 referred to the fact that for the last three years the Appellant had been carrying out multi-trades, including bricklaying, painting, carpentry, tiling and plastering, and from an agreed record of roofing work put before the Tribunal, it was clear that during this period the amount of roofing work carried out by the Appellant was limited and particularly so in 1992 and the first half of 1993.

The Industrial Tribunal found as a fact that the Appellant remained employed as a skilled roofer and they rejected his evidence that he had ever suggested during the redundancy procedures that he was employed as a plasterer. The Industrial Tribunal found as a fact that the Appellant's plastering skills were good, but were not such as to qualify him for the tradesperson category of plasterer.

In paragraph 9 of its decision the Industrial Tribunal found as a fact that the Respondents' requirements for roofers to carry out roofing work had diminished. It is also clear in our judgment that by their findings in paragraph 6 the Industrial Tribunal accepted as a fact that in 1993 the Works Department overall was making a loss and that redundancies had to be made in respect of plumbers, bricklayers, gas fitters, two roofers and a labourer.

The Industrial Tribunal held that on the facts found by them the requirements for employees to carry out work of a particular kind, namely roofing work, had diminished and they were accordingly satisfied that the Appellant's dismissal was by reason of redundancy. We repeat that it is only this finding of the Industrial Tribunal which is challenged.

In our judgment in order to decide whether the Industrial Tribunal's decision was correct, it is helpful to consider on the Industrial Tribunal's findings of fact:

(a) what work the employee was actually carrying out at the time of the redundancy; and

(b) what work the employee could have been asked to do at the time of the redundancy.

In our judgment the correct analysis of the Industrial Tribunal's findings is that, at the time of the redundancy namely December 1993 the Appellant was carrying out, as a skilled tradesperson namely a roofer, such roofing work as was available. When such work was not available the Appellant was carrying out such multi-trade operations as he was asked to do by way of assisting other tradespersons principally, on the evidence, plasterers. In fact, because of what was clearly, as the Industrial Tribunal found, a downturn in roofing work, the Appellant was being asked to carry out multi-trade operations for more of the time than he was doing roofing work.

In our judgment comparison of what the Applicant was in fact doing on the one hand with what he could be required under his contract on the other, establishes simply that what he was doing was what he could be required to do. The contractual position was that the Applicant was employed and paid as a trades person with a particular skill, namely a roofer, so that his principal duty was to carry out roofing work for the Respondents. But it is clear from clause 15 of his contract that he could be asked to carry out multi-trade occupations.

In our judgment, were the matter free from authority, there would be no difficulty in deciding whether the Appellant was redundant by application of the plain wording of Section 81(2)(b) of the 1978 Act.

By that subsection an employee is taken to be dismissed for redundancy if his dismissal is attributable, wholly or mainly, to the fact that the requirements of the employer's business for employees to carry out work of a particular kind, have ceased or diminished or are expected to cease or diminish.

In our judgment, standing back from the authorities, it is plain on the findings of fact of the Industrial Tribunal that the reason why the Appellant was dismissed was because he was employed as a roofer and the Respondents' requirements for roofing work had diminished.

In our judgment, on the plain wording of the subsection, read without reference to the authorities, the decision of the Industrial Tribunal was correct. It was as straightforward a case of redundancy as one could wish for.

However, the submission is powerfully made to us by Mr Machell, on behalf of the Appellant, in summary that the effect of the authorities is that before an employee's dismissal can be attributable to redundancy, it must be shown that the requirements of his employers for employees to carry out work of a particular kind has diminished in relation to any work that the employee could have been asked to do. He submitted, accordingly, that since there was no finding by the Industrial Tribunal that the Respondents' requirements for the carrying out of all the multi-trade operations which the Appellant could have been asked to carry out had diminished, the Respondents had not, and could not, as a matter of a law, establish that the Appellant was redundant within the subsection.

He submits that this is the effect of the "contract" test laid down by the authorities. His submission is that the "contract" test is probably the true test, in the light of the authorities, but if the true test is the "function" test, ie had the Respondents' requirements for the particular work which the Appellant was actually carrying out diminished, then, here again, he submitted that, on application of that test, the Respondents cannot establish, as a matter of law, that the Appellant was redundant for exactly the same reason as that which applied on the "contract" test, namely that there is no finding of fact by the Industrial Tribunal that work on all the Respondents' multi-trade operations had diminished.

In our judgment it is reasonably clear from the authorities, especially Nelson v BBC No.2 [1980] ICR 110 at page 126 per Brandon LJ, as he then was, the decision in the Court of Appeal in Cowen v Haden Ltd [1983] ICR 1, and the very helpful judgment of Mr Justice Tudor Evans in the case of Pink v White & Others [1985] IRLR 489, where the learned Judge, after a very careful analysis of the cases in the Court of Appeal, so concluded, that the so-called "contract" test is the correct one rather than the "function" test.

However, in our judgment, the Industrial Tribunal's decision that the Appellant was redundant is a correct application of the "contract" test to the facts of this particular case, as found by the Industrial Tribunal. The essential nature of the Appellant's employment with the Respondents, as found by the Industrial Tribunal, was that of a skilled tradesperson, namely a roofer. Such was his skilled trade and that is what he was employed and paid to do. In our judgment, the fact that the Appellant could be required to assist in multi-trade operations on occasions when roofing work was not available to be done, did not alter the essential fact that the Appellant was contracted as a roofer.

Thus, in our judgment, the Respondents could not contractually have required the Appellant to work on multi-trade operations when they had roofing work available for him to do. The obligation which the Appellant accepted to do work where possible on multi-trade operations was, on the findings of the Industrial Tribunal, brought about by economic necessity resulting from the reduction in the overall amount of day to day repair work being carried out by the Respondents.

In our judgment it is clear that it was very much a subsidiary obligation introduced to operate a degree of flexibility within the workforce in times of increasing economic difficulty faced by the Respondents.

In our judgment the Industrial Tribunal was in those circumstances justified in arriving at its finding of fact that the Appellant was employed as a roofer and accordingly in holding that that was the particular kind of work which under his contract with the Respondents, he was contractually required to carry out.

In our judgment, in applying the "contract" test, in order to determine whether a redundancy situation exists, the contract should not be read in an over-technical or legalistic way but should be looked at in a commonsense manner in order to ascertain the basic task which the employee is contracted to perform. Where, as here, an employee is employed to perform a particular, well recognised, and well defined category of skilled trade, namely roofing work, in our judgment it is that basic contractual obligation which has to be looked at when deciding whether the employer's requirements for work of a particular kind have or have not ceased or diminished. Were it otherwise, an employer could in practice never establish that any skilled tradesman, employed as such, who had accepted a flexibility clause of the kind in this case, had become redundant without establishing that a redundancy situation existed in every single other trade encompassed within the ambit of such a flexibility clause. In our judgment so to construe Section 81(2)(b) of the 1978 Act would be to subject the wording to an artificial and overly legalistic construction and would impose an unreasonable burden upon employers.

Accordingly we must dismiss this appeal.