United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 937_94_0803

Appeal No. EAT/937/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17th November 1995

Judgment delivered on 8th March 1996

Before

HIS HONOUR JUDGE P CLARK

MR T C THOMAS CBE

MR N D WILLIS

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SPECIALITY CARE PLC          APPELLANTS

(1) H J PACHELA, (2) K KELLET          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR WILLIAM BIRTLES

(of Counsel)

Messrs Eaton & Co

Litigation Department

The Old Library

34 Darley Street

Bradford

West Yorkshire

BD1 3LH

For the Respondents MR PAUL T ROSE

(of Counsel)

Mr J O'Hara

Legal Department

GMB

22-24 Worple Road

Wimbledon

London SW19 4DD


 


JUDGE CLARK: This is an appeal by the employer, Speciality Care PLC, against a decision of the Industrial Tribunal sitting at Leeds on 13th July 1994 that both Respondents, Mrs Kellet and Miss Pachela had been unfairly dismissed and that they were entitled to compensation in the total amounts of £16,614.92 and £16,100.00 respectively. The Tribunal's extended reasons for that decision are dated 19th August 1994. ["The reasons"].

Both Respondents were employed as senior carers at a nursing home at Edencroft in Birkenshaw. The Appellant took over that business on 1st November 1993 in circumstances where the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) applied. Both Respondents were then working at the home; Mrs Kellett having commenced employment on 5th July 1993 and Miss Pachela on 2nd November 1992.

At the time of their dismissals in February 1994 neither Respondent had completed two years continuous service for the purposes of Section 64(1)(1) of the Employment Protection (Consolidation) Act 1978. ["The 1978 Act"]. These cases were heard before this appeal tribunal had decided, in the case of Milligan v Securicor Cleaning Ltd [1995] IRLR 288, that where a dismissal is challenged as unfair under Regulation 8 of TUPE the two year qualifying period does not apply in light of the Acquired Rights Directive. Accordingly that issue was not ventilated before the tribunal, and therefore has not been considered by us.

Instead, the complaints were put on the basis of Section 154 of the Trade Union and Labour Relations (Consolidation) Act 1992 ["The 1992 Act"], which excludes the qualifying period provisions of Section 64(1)(a) of the 1978 Act where the reason or principal reason related to trade union membership or activities more particularly defined in Section 152(1) of the 1992 Act (formerly Section 58 of the 1978 Act).

In these circumstances the burden of proving the reason for dismissal rested on the Respondent employees and not the employer. Smith v Hayle Town Council [1978] ACR 996. The tribunal correctly so directed themselves in paragraph 4 of the reasons.

The background to the Respondent's dismissals is set out in the reasons and may be summarised as follows. Following their acquisition of the business the Appellants resolved to alter the shift pattern of working. Previously the Respondents had worked on days, working a double day shift from 8 a.m. until 4 p.m. and from 1 p.m. to 9.30 p.m.. The change proposed by management was to a single day shift from 8 a.m. to 8 p.m.. This proposal was viewed by the Respondents as unacceptable.

A meeting took place between the staff and the matron and Miss Artis, the operations manager, on 14th January 1994. No resolution was reached. The Respondents and others consulted the Citizens Advice Bureau and were advised to get a trade union involved. Prior to that time it seems the Respondents were not trade union members. Accordingly members of staff, including the Respondents, met with an official of the GMB union, Mr Kirk on 27th January 1994. They completed union membership application forms and, the tribunal found, became members of the union from that date.

A further meeting was held between management and staff on 29th January 1994. Following that meeting Miss Artis posted a notice on 31st January 1994, referring to an earlier grievance letter dated 27th January 1994 from the staff. The notice indicated that grievances would only be dealt with on an individual, implicitly not collective, basis.

On 31st January 1994 the new shift pattern was due to come into effect. Miss Pachela attended for work at her hitherto normal start time of 7.45 a.m., and informed matron that she would leave at 4 p.m.. This was relayed to Miss Artis who instructed matron that she should inform Miss Pachela that unless she worked the full shift until 8 p.m. she would be suspended. Miss Pachela maintained her stance and was suspended and sent home.

On 4th February 1994 Miss Pachela received a letter from Miss Artis, mis-dated 28th January 1994, requiring her to attend a disciplinary meeting at 4 p.m. on 8th February 1994. She was told that at the meeting she could be accompanied by a friend and was warned that failure to comply with a reasonable work instruction would result in dismissal.

Meanwhile Mrs Kellett had been absent sick after lifting a patient. She tendered her resignation on 6th January 1994 but had been permitted to withdraw it, as the tribunal found. When she returned to the home she told Miss Artis that she would not work the new shift pattern. She was summoned to a disciplinary hearing to be held on 9th February 1994 by a letter written by Miss Artis. That letter was couched in similar terms to the one sent to Miss Pachela.

Miss Pachela and Mrs Kellett duly attended disciplinary meetings on 8th and 9th February 1994 respectively. Miss Pachela was represented by Mr Kirk, the Union Organiser; Mrs Kellett by Mrs Webb of the union. Both Respondents indicated that they were not prepared to work the new shift patterns. Representations were made on their behalf by Mr Kirk and Mrs Webb. Each was dismissed.

Against that factual background the tribunal expressed their conclusions in paragraph 18 of their reasons in this way:

"18. These are the facts upon which the Tribunal have to make a decision. We have to be satisfied that the principal reason for the dismissal by the respondents was the fact that the applicants had joined or had intended to join a recognised trade union. The Tribunal has to satisfied on the ordinary test, the test which is applicable in civil courts which is on the balance of probabilities. It is not for the applicants to satisfy us beyond a reasonable doubt. We have to look at the evidence, we have to weigh it on that basis. There is no direct evidence that the respondents acted at they did because of the applicant having joined a trade union. In fact if not daily at least weekly we deal with discrimination cases where it is very rare that there will be any direct evidence of discrimination. In just the same way that employers rarely say to employees we are treating you in the way we are treating you because of your colour or your sex it is very unlikely that an employer will say to an employee "I am treating you in this way because of your trade union membership." What we have to do is follow the guidance of the Employment Appeal Tribunal in a discrimination case, Kana v Ministry of Defence [1981] IRLR 331, where it is said that the affirmative evidence of discrimination will normally consist of inferences to be drawn from the primary facts. If the primary facts indicate that there has been discrimination of some kind, the employer is called upon to give an explanation and a fairly clear and specific explanation being given by the employer to the satisfaction of the Industrial Tribunal. If such is not given, this will permit an inference of unlawful discrimination from the primary facts. In this case we have the applicants saying "Look, I protested about the change in my conditions of working, I engaged the services of the trade union to assist me in my protest and I was dismissed. There were other people who complained about their lot, they were not represented by the trade union and they were not dismissed." The respondents answer is "We did not think about the trade union aspect we simply had two employees who were refusing to operate a new system and we therefore dismiss them as we were entitled to do." The Tribunal having considered the evidence is of the view that although it may well have been that one factor behind the decision was that the employees were refusing to carry out their reassigned duties, the principal reason for their dismissal was that they had joined the trade union and sought to use the trade union as the means of making their protest. That being so as we are satisfied that the principal reason for their dismissal was their joining the trade union, this is an automatically unfair dismissal within the provisions of Section 152 of the 1992 Act and accordingly this application must succeed."

In this appeal Mr Birtles advances his case under 4 headings:

(1) Inadequate reasoning.

(2) Insufficient findings of primary facts.

(3) Self-misdirection as to the meaning of trade union membership for the purposes of Section 152(1)(a) of the 1992 Act in the light of a subsequent decision of the House of Lords in the conjoined appeals of Associated British Ports v Palmer and Associated Newspapers Limited v Wilson [1995] ICR 406.

(4) Perversity.

We shall take first grounds (1) and (2).

It is submitted that an industrial tribunal is required to set out the process of reasoning by which it reached its decision. Meek v City of Birmingham District Council [1987] IRLR 250. Here, the tribunal found in paragraph 18 that there were two reasons behind the decision to dismiss; the employee's refusal to work the new shift and their trade union membership. However there is no explanation as to their reasoning which led them to conclude that it was the latter which was the principal reason for dismissal. Specifically, there is no explanation as to why they rejected Miss Artis' evidence, as they must implicitly done, that the sole reason for dismissal was because the Respondent's would not consider a change in shift patterns.

Secondly, it is said that the tribunal failed to make a finding on a significant matter namely the shift patterns of two employees, Lynn Walters and Jill Bennett, after the change. The evidence was that neither worked the new shifts after the change, but remained in employment. Miss Artis told the tribunal she was aware that both had taken union advice, and it was Miss Pachela's evidence that Jill Bennet had joined the union. Such a finding was material to the question of what was the real reason for the Respondent's dismissal, and a necessary finding before any inference could be drawn adverse to the employer. Chapman v Simon [1994] IRLR 124.

Mr Rose contends that paragraph 18 of the reasons contains sufficient reasoning to support the tribunal's conclusion. It implicitly rejects Miss Artis' evidence, and it is not required to spell out why it disbelieved her. The issue between the parties is clearly set out and resolved in favour of the employees. Further, the tribunal had made all the necessary findings of fact.

On this aspect of the case we prefer the submissions of Mr Birtles. The mandatory requirement in Rule 10(3) of the 1993 Industrial Tribunal Rules of Procedure that the tribunal shall give reasons for its decision means that there should be sufficient reasons to show the parties why they have won or lost (see Meek and the earlier cases there cited). In our judgment this tribunal's reasoning in paragraph 18 does not past that test. There is no clear exposition of the findings of primary fact which led the tribunal to draw the inference that the principal reason for dismissal here was the Respondent's trade union membership. cf. King v GB China Centre [1992] ICR 516, per Neill LJ. 528G-529A.

Having identified an error of law in the tribunal's decision we have concluded that the proper course is to remit the whole case to a fresh Industrial Tribunal for re-hearing. In these circumstances it is unnecessary and indeed inappropriate to consider Mr Birtles fourth ground in this appeal, perversity. Accordingly we have not done so.

However, it is necessary for us to consider the third ground raised, since the next Industrial Tribunal must correctly apply the provisions of Section 152(1) of the 1992 Act in arriving at its conclusion in this case.

Section 152(1) provides:

"(1) For purposes of Part V of the Employment Protection (Consolidation) Act 1978 (unfair dismissal) the dismissal of an employee shall be regarded as unfair if the reason for it (or, if more than one, the principal reason) was that the employee -

(a) was, or proposed to become, a member of an independent trade union, or

(b) had taken part, or proposed to take part, in the activities of an independent trade union at an appropriate time, ..."

Membership

As to what is meant by "member of an independent trade union" a useful starting point is the decision of this appeal tribunal in Discount Tobacco & Confectionary Ltd v Armitage [1995] ICR 431 (Note), originally reported at [1990] IRLR 15.

Mrs Armitage requested a statement of terms and conditions from her employer some 3¹/₂ months into her employment. When none were forthcoming she went to her trade union official who took up her case with the employer. The problem was not resolved and she was dismissed. The Industrial Tribunal that the reason for dismissal was her trade union membership. In upholding that decision in this tribunal Knox J., giving the judgment of the tribunal, said at page 433D-E:

"In our judgment, the activities of a trade union officer in negotiating and elucidating terms of employment is, to use a prayer book expression, the outward and visible manifestation of trade union membership. It is an incident of union membership which is, if not the primary one, at any rate, a very important one and we see no genuine distinction between membership of a union on the one hand and making use of the essential services of a union, on the other.

Were it not so, the scope of section 58(1)(a) of the Act of 1978 would be reduced almost to vanishing point, since it would only be just the fact that a person was a member of a union, without regard to the consequences of that membership, that would be the subject matter of that statutory provision and, it seems to us, that to construe that paragraph so narrowly would really be to emasculate the provision altogether."

The case of Palmer and Wilson both concerned the now widespread practice of placing employees on personal contracts instead of negotiating terms and conditions collectively with trade unions and then incorporating collectively bargained terms into the individual contracts of employment. In Palmer the three applicants, employees of ABP, declined an offer of new terms and conditions which required them to give up pay bargaining between their trade union and the employers. Consequently their union negotiated a less favourable pay increase on their behalf than that awarded to other employees who had accepted the new personal contracts. In Wilson the employer unilaterally discontinued collective bargaining with the applicant's trade union, and offered a 4.5 per cent pay increase to employees who signed new individual contracts. Mr Wilson refused to sign the new contract and received no pay increase. In each case the applicants complained to an Industrial Tribunal that their employer had taken action short of dismissal against them for the purpose of preventing or deterring them from being a member of an independent trade union, or penalising them for their membership, contrary to Section 23(1)(a) of the 1978 Act (now Section 146(1)(a) of the 1992 Act).

In each case the Industrial Tribunal, basing itself on Armitage held that "membership" included making use of the union's services, such as representation in collective bargaining. The complaints were upheld. Appeals by the employers succeeded, but Armitage was not doubted in this tribunal on its facts. The employees appealed. Both appeals were heard together in the Court of Appeal [1994] ICR 97. The appeals were allowed. In giving the leading judgment of the Court Dillon LJ. cited the passage from the judgment of Knox J. in Armitage referred to above and said this at page 102D-F:

" I regard that decision as unquestionably correct, and it had to be borne in mind in considering the reasons of the industrial tribunal in the present case. The decision means at the least that it is open to an industrial tribunal to hold that an employee has been dismissed or penalised for being a member of a union if he been dismissed or penalised for invoking the assistance of the union in relation to his employment. To put it another way, in an appropriate case the tribunal of fact has power to be robust in its findings. Section 23 refers, of course, to the "purpose" of the employer in taking the action in question, while section 58 refers to the "reason" for action taken, that is to say, dismissal, I agree, however, with Wood J. in his judgment in the present case [1993] I.C.R. 101, 111c, that there is little relevant distinction to be drawn between "purpose" and "reason", because the purpose of the employer will in general be a reason for the action he takes."

That holding formed an important part of the ratio decidendi of the Court of Appeal's judgment, and as such represents the law to be applied by Industrial Tribunals in considering the question of membership as a reason for dismissal, unless it has been overruled by the House of Lords. This appeal tribunal so held in Harrison v Kent CC [1995] ICR 434, 443C-E, a case decided shortly before judgment was given in the House of Lords in Palmer.

This Industrial Tribunal decided the instant case between the Court of Appeal and House of Lords decisions in Palmer. Mr Birtles contends that in failing to draw a distinction between membership of the union and making use of its services, the tribunal misdirected itself in the light of the subsequent speeches in the House of Lords. In paragraph 18 of the reasons the tribunal ran together the fact of the Respondents becoming members of the union and their making use of its services as a means of making their protest against the new shift system. He contends that this is an impermissible approach.

Our attention was drawn by Mr Rose to a note by the learned editors of Harvey on Industrial Relations and Employment Law to Section 152 at paragraph Q652. Having referred to Armitage and the House of Lords decision in Palmer this question is posed:

"What is now the standing of Discount Tobacco? Should it still be followed in similar circumstances, or has it in practice received a judicial kiss of death?"

It is that question which we must answer and to do so we must attempt an analysis of the House of Lords decision in Palmer.

The first and perhaps critical observation to be made about their lordship's decision is that it was based, by a majority of 3-2, on a point which had not been argued in the lower courts. giving the leading speech expressing the majority view, Lord Bridge refers to "The new point of law" at page 411C. This new argument, which ultimately decided the appeal, was that "action short of dismissal" for the purposes of Section 23(1) of the 1978 (Section 146(1) of the 1992 Act) did not include an omission to pay increased wages to the applicants, as compared with those employees who signed the new contracts, because the definition of "action" to include omission contained in Section 153(1) of the 1978 Act was not to be found in the Employment Protection Act 1975 and since the 1978 Act was a consolidating statute on the correct canons of statutory construction no regard should be had to the words in Section 153(1).

Having decided the appeal on "the new point", further observations by their Lordships on the issues argued below, including that relating to the meaning of membership, are necessarily obiter.

Lord Bridge at page 416-418, offers some observations about `the membership issue' with this preamble (416B):

"Having reached a conclusion on the new point which is decisive of both appeals, I do not find it necessary to go into these questions in any detail ..."

In the course of considering the case of Armitage His Lordship says at page 418B-D:

" I do not question the correctness of the Employment Appeal Tribunal's decision in the Armitage case. Once the industrial tribunal had rejected the employers' evidence as to their reason for Mrs Artmitage's dismissal, it was an obvious inference that she had been dismissed because the employer resented the fact that she had invited the union to intervene on her behalf. In this narrow context the reasoning of Know J. may have been a legitimate means of refuting a particular argument advanced by the employers' representative. But if the passage cited is held to establish as a general proposition of law that, in the context of section 23(1)(a) and section 58(1)(a) of the Act of 1978, membership of a union is to be equated with using the "essential" services of that union, at best it puts an unnecessary and imprecise gloss on the statutory language, at worst it is liable to distort the meaning of these provisions which protect union membership as such."

Lord Keith agreed with Lord Bridge (page 409A).

Lord Lloyd dealt with Armitage at pages 424G-425B in this way:

" In supporting the finding in paragraph 62, the Court of Appeal was much influenced by the observations of Knox J. in Discount Tobacco & Confectionery Ltd v. Armitage (Note), post p. 431, a decision which the court regarded as unquestionably correct. It may well have been correct on its facts. Having rejected the evidence given by Mrs Armitage's employers, the tribunal was entitled to infer that the real reason for her dismissal was that she was a member of the union and made use of the union's services to press her complaint. But, like Lord Bridge of Harwich I cannot regard the case as authority for the broad proposition that membership of the union and making use of the union's services are in some way to be equated. In my view, section 23(1)(a) was intended to protect trade union membership as such, that is to say, the right to associate as members of an independent trade union, just as section 23(1)(b) was intended to protect those taking part in trade union activities at an appropriate time. I can see no justification for reading in the words "or making use of the essential services of the union" in section 23(1)(a) and still less justification for regarding trade union membership and the use of trade union services as the same thing. They do not mean the same thing in section 23(1)(c). So why should they mean the same thing in section 23(1)(a)? I do not accept Know J.'s view, post p. 433E, that this would reduce section 23(1)(a) to vanishing point. Unions may flourish even though they are not recognised for collective bargaining. In so far as the industrial tribunal relied on the broad statement in the Armitage case in reaching their "robust" conclusion in paragraph 62 (see per Dillon L.J. [1994] I.C.R. 97, 110), they erred in law."

Lord Browne-Wilkinson, a former President of this Appeal Tribunal said this at page 419C:

" I prefer to express no view on the membership issue also discussed by my noble and learned friend [Lord Bridge]. As at present advised I would not share his view on the issue but is unnecessary to express any concluded view since the decision of this case does not turn on that point."

Finally, Lord Slynn, also a former President of the Employment Appeal Tribunal, said this at page 422E-F:

" Like Dillon L.J. in the Court of Appeal [1994] I.C.R. 97 I do not consider that action "preventing or deterring" someone from being a member of a trade union or penalising him for doing so is limited to action taken in respect of his status as a member - the fact that he has or wants to have a union membership card. I may include action to prevent or deter him from, or action penalising him for, exercising his rights as a member of a trade union. The exercise of such rights is not necessarily include in the phrase "taking part in the activities" of a trade union, words more apt to cover such activities as attending union meetings or acting as an official of the union."

Faced with such an apparent divergence of views on an issue which, in the event, it was unnecessary for their lordships to decide, we regard it as important that we provide clear guidance to Industrial Tribunals as to the correct approach to be taken in cases such as the instant one. Our conclusions are as follows:

(1) Armitage was and remains unquestionably correct on its facts. That was the unanimous judgment of the Court of Appeal, expressed by Dillon LJ., on an issue material to its decision in the appeal before the Court. The observations of their Lordships on appeal from that decision were obiter. Nevertheless, Lord Bridge, with whose speech Lord Keith entirely agreed, did not question the correctness of the decision on its facts. Lord Browne-Wilkinson, declined to express a view on this issue. Nevertheless his comment that he would not share the view expressed by Lord Bridge places him closer to Lord Slynn who plainly approved the approach of Dillon LJ. in the Court of Appeal. Finally, Lord Lloyd thought that Knox J. had gone too far in Armitage, but allowed that the decision in that case may have been correct on its facts. In summary, Armitage remains undisturbed on its facts in our judgment.

(2) That means in practice that where a complaint of dismissal by reason of union membership is made, as in this case, it will be for the tribunal to find as a fact whether or not the reason or principal reason for dismissal related to the applicant's trade union membership not only by reference to whether he or she had simply joined a union, but also by reference to whether the introduction of union representation into the employment relationship had led the employer to dismiss the employee. Tribunals should answer that question robustly, based on their findings as to what really caused the dismissal in the mind of the employer.

(3) In so holding we have deliberately refrained from making any wider observations as to the correct approach in cases where the facts are more akin to those in Palmer and Wilson. To do otherwise may give rise to the dangers of expressing views beyond those necessary for deciding this appeal.

In the circumstances the appeal is allowed. The case will be remitted to a fresh Industrial Tribunal for rehearing.