United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR EPSTEIN (of Counsel) Mr R Lowe EEF Broadway House Tothill Street London SW1H 9NQ
For the Respondent	MR T NEWTON (Representative) NELC Ward Jackson Chambers 37 Church Street Hartlepool Cleveland TS24 7BG


 


MR JUSTICE LINDSAY: We have before us by way of final hearing the appeal of Filt-Air Engineering Limited in the matter Andrew John Wilkinson v Filt-Air Engineering.

On 11 April 1997 there was a hearing of the Industrial Tribunal at Newcastle upon Tyne under the chairmanship of Mr Hunter that led to a decision promulgated on 14 May 1997 and the unanimous decision of the Tribunal was that the Respondent should pay to the Applicant, that is to say, Filt-Air should pay to Mr Wilkinson, compensation in the sum £4,456.00. In fact, although the argument before us is not greatly concerned with quantification in any mathematical way, the extent of the appeal is not as to the whole of that £4,456.00 but, in practical terms, as to £2,730.00 of it, which is described as "additional award, 13 weeks at £210.00 equals £2,730.00."

We have been greatly assisted today by the argument on both sides; we have had Mr Epstein arguing for Filt-Air Engineering Limited and Mr Newton for Mr Wilkinson. Mr Epstein was not previously in the case.

It is necessary to touch on the background because this is an appeal in relation to the third of three Industrial Tribunal hearings. There was a decision of the Industrial Tribunal on 8 November 1996 after a hearing on 21 October 1996 and that held that Mr Wilkinson had been unfairly dismissed. The Tribunal on that occasion said that if the consequences of that decision could not be agreed between the parties the case would then have to be relisted. There was no appeal against that decision so we must, of course, proceed on the basis that Mr Wilkinson was, indeed, unfairly dismissed. As it transpired, the consequences of that unfair dismissal were not agreed and so there was a second hearing on 18 December 1996 and it led to a decision promulgated on 16 January 1997 - and it was then held:

"The respondent shall treat the applicant in all respects as if he had not been dismissed."

That is, in other words, an Order for reinstatement within s.114(1) of the Employment Rights Act 1996. Section 113 gives a discretion in a Tribunal to decide as between reinstatement and re-engagement and, plainly, here the discretion was exercised in favour of reinstatement. That Order was required by its own terms to be complied with by 6 January 1997. There was also an Order for payment of £933.71 to Mr Wilkinson. Again, that matter was not appealed against.

The Industrial Tribunal, on that second occasion, was empowered to order reinstatement as it did only if it had taken into account whether it was practicable for the Company to comply with such an Order. That is the effect of s.116(1)(b) of the Act and it is plainly obligatory. Section 116(1) says that the tribunal shall first consider and, in doing so, shall take into account, but that statutory obligation is only to take the subject into account. Impracticability is not determinative necessarily at that stage. One cannot conclude from there having been an Order for reinstatement that the Industrial Tribunal had for all purposes or other than provisionally at most, held that reinstatement was practicable.

So much for the background of the two earlier decision, we now come to the third hearing and this, of course, is the matter from which there is an appeal to us. There was a hearing on 11 April, as I mentioned earlier, that led to the decision of 14 May.

The Tribunal concluded, as I mentioned earlier, that included in the award should be the additional award of £2,730. It follows from that form of award that the Industrial Tribunal must have held the case to be a matter falling within s.117(3). Section 117(3) says this:

"Subject to subsections (1) and (2), if an order under section 113 is made but the complainant is not reinstated or re-engaged in accordance with the order, the tribunal shall make -

(a) an award of compensation for unfair dismissal (calculated in accordance with sections 118 to 127), and

(b) except where this paragraph does not apply, an additional award of compensation of the appropriate amount,

to be paid by the employer to the employee."

Section 117(5) takes that up and says this:

"In subsection (3)(b) 'the appropriate amount' means -

(a) where the dismissal is of a description referred to in subsection (6), not less than twenty-six nor more than fifty-two weeks' pay, and

(b) in any other case, [we interpose that this is such a case] not less than thirteen nor more than twenty-six weeks' pay."

Hence the figure of 13 weeks at £210.00 was at the minimum end of the scale. The additional award of 13 weeks shows that the case must have been regarded as within 117(3) so far as the view of the Industrial Tribunal was concerned.

Could the Industrial Tribunal properly have so concluded? It is hard to see how they could possibly have held otherwise. Has the complainant been reinstated, is the question posed by s.117(3). He had not been and, indeed, he has not been. If he had been offered reinstatement but had declined it, that would go to whether he had unreasonably prevented the employer from complying, with the consequence of his award being perhaps reduced under s.117(8),but it does not go to the question of whether he had, in fact, been reinstated. If one asks the question that s.117(3) poses, has he been reinstated in accordance with the Order, then if he has not been reinstated at all then, plainly, he cannot have been reinstated in accordance with the Order. So far no flaw is detected in the Industrial Tribunal's conclusion but it is necessary to read s.117(4)(a) and s.117(7):

"(4) Subsection (3)(b) does not apply where -

(a) the employer satisfies the tribunal that it was not practicable to comply with the order, or

(b) the reason (or, if more than one, the principal reason) -"

I do not think I need go further. Section 117(7) says:

"Where in any case an employer has engaged a permanent replacement for a dismissed employee, the tribunal shall not take that fact into account in determining for the purposes of subsection (4)(a) whether it was practicable to comply with the order for reinstatement or re-engagement unless the employer shows that it was not practicable for him to arrange for the dismissed employee's work to be done without engaging a permanent replacement."

Before going to the extended reasons, it is to be borne in mind that the onus of showing that it was not reasonably practicable to comply with an Order for reinstatement is upon the employer. In general terms, secondly, the employer cannot rely upon his having engaged a permanent replacement for the dismissed employee as a factor in the decision as to whether it was practicable to reinstate him and, thirdly, the employer can rely upon that as a factor if, but only if, he shows - and the onus is again on him - that it was not practicable for the dismissed person's work to be done without the employer engaging a permanent replacement.

So much for the statutory provisions but before we go further to examine the Industrial Tribunal's reasoning, we need to have in mind some of the procedural history of the case. On 16 October 1997 the appeal came on for a preliminary hearing and His Honour Judge Pugsley and the Members sitting with him ruled that the appeal should be allowed to proceed to a full hearing, which is manifest from the fact that it is now before us. There was an Order that:

"THE TRIBUNAL DIRECTS that the parties do agree issues of fact which were before the Industrial Tribunal. Liberty to apply for Chairman's Notes of Evidence in the event of disagreement."

That led to correspondence. The employer, by its letter of 28 October 1997 asked:

"Do you agree that it was argued on behalf of the Company that the Company had offered reinstatement to the Respondent in accordance with the tribunal's Order, but that, in the alternative, if it was decided that reinstatement had not been offered, it was not reasonably practicable for the Company to comply with the Order?"

The answer came on 3 November:

"It is agreed that the Company argued in the tribunal that it had offered reinstatement. It is not agreed that it was argued in the alternative that if reinstatement had not been offered then it was not reasonably practicable to do so;"

That being so, then working out His Honour Judge Pugsley's notes, the Chairman's notes were applied before and obtained.

The final submissions made on the employer's behalf below are in note form as noted by the Chairman as follows:

"Company did offer reinstatement.

Mix of work would have changed because mix of orders had changed.

Punch work had fallen.

Appeared he changed his mind.

S117(8) - Failure to mitigate his loss.

S122(1) - Basic award can be reduced.

New job with Sigma.

Application for costs - hearing today was unnecessary."

There is no hint in the Chairman's notes that it had been argued that it was not practicable to comply with the Order but rather the position seemed to be that it was argued that compliance had been offered by the employer but had been declined by Mr Wilkinson.

There had been evidence after the employment of another operator to replace Mr Wilkinson.

"We recruited another punch operator to replace Andrew Wilkinson."

was said by Mr Mongon on the Company's behalf in his cross-examination by Mr Newton (who then, as now, appeared for Mr Wilkinson) and there was agreement on that subject because in another passage in the correspondence between the employer and employee's representative, it was agreed as follows:

"The evidence at the tribunal was that a replacement employee was engaged as the punch operator. It is agreed that other employees did some punch operating from time to time."

There was no hint in the Chairman's notes that the latter part of s.117(7), namely:

"... unless the employer shows that it was not practicable for him to arrange for the dismissed employee's work to be done without engaging a permanent replacement."

was addressed on the evidence. The position would seem to be that if the replacement for Mr Wilkinson had been taken on permanently, as seems to have been the case, then that could not be taken into account by the Tribunal for want of compliance with s.117(7). If, alternatively, contrary to the expectation and contrary to what would seem to have been the case, the replacement had been taken on only temporarily, the temporary replacement would not in any event, unless further matters were shown, suffice to make it impracticable to reinstate Mr Wilkinson.

The Industrial Tribunal do not, in their decision, mention the practicability point and Mr Newton, on Mr Wilkinson's behalf, says that that is quite simply because the point was not raised. It is plainly a point which needs to be provided with a foundation of fact. We are not satisfied that it was sufficiently raised at the Industrial Tribunal so that either the Industrial Tribunal can be called to account for not dealing with it or so that it can be raised now. It does not suffice for a point of that complexity to be buried perhaps in some of the evidence given but the point has to be clearly advanced so it can be clearly understood and be clearly dealt with. We are, therefore, not satisfied that the practicability point is open to the Appellant to raise before us. We add that even if it had been touched on in the evidence then given that the onus lay on the employer under s.117(4)(a), given the unavailability of the argument that Mr Wilkinson had been permanently replaced as a factor in the argument as to practicability because of the failure to comply with the latter part of s.117(7) and given the whole body of evidence as we have understood it to be from the correspondence and the Chairman's notes, even so, bearing those things in mind, we could see no decision open to the Industrial Tribunal other than that the impracticability argument should have failed before the Industrial Tribunal and that no error of law would have been incorporated in its dismissal, even had it been raised.

So much for the impracticability argument. It is not open to the Appellant at this stage.

Turning to a different point, Mr Epstein has argued that it suffices that an employee, in order to be treated in all respects as if he had not been dismissed, should be restored to the contractual terms and conditions that would have applied to him had he not been dismissed.

We do not accept that. Whether the terms and conditions which would have applied to a man had he not been dismissed, are restored to him, is plainly a factor in determining whether he is being treated in all respects, as the section requires, as if he had not been dismissed but Mr Newton rightly argues, in our view, that if nothing more than a restoration of contractual terms was all that was required, then the legislature could very easily have said so but it does not. It is careful to say "shall treat the complainant in all respects as if he had not been dismissed".

Secondly, Mr Newton draws some comfort from the authority Artisan Press Ltd v Srawley and Another [1986] ICR 328, a decision of Mr Justice Popplewell and two Members sitting with him in the Employment Appeal Tribunal where, at page 333, the Employment Appeal Tribunal says at B:

"It is important to observe that section 69(2) [that is the precursor of 114(1)] does not say that an employee should be reinstated on the same terms and conditions."

The decision is chiefly on a quite separate point but I think Mr Newton is right to draw some comfort from that citation, which suggests that s.114 goes beyond a mere restoration of the terms and conditions as they would have been had there been no dismissal. He shows how such a term, if that was how it was to be construed, could operate very harshly. Suppose that a man working under a wide mobility clause is employed by a conglomerate in Newcastle on Tyne; suppose that reinstatement is ordered, can it be that on that reinstatement he can there and then be required to work in Bournemouth and that that is to be taken as to be reinstatement, simply because he is being required to work upon the same terms and conditions as would have applied to him had he not been dismissed? Would that not, asked Mr Newton, frustrate reinstatement as an effective remedy? We have sympathy with such an approach.

It is difficult to know quite what the boundaries are of the "as if" requirement. Can an employee require that he should work the very same machine in the very same position on the very same shop floor as he would have done had he not been dismissed, if he can show what that position, what that machine, which that shop floor is? It is not necessary for us to determine where the boundaries of the "as if" requirement are. What we do feel able to say, accepting Mr Newton's evidence on this point, is that the job duties should be broadly as they would have been had there been no dismissal. It is not, in our view, enough merely for the employer to restore an employee to the contractual terms that would have applied had he not been dismissed.

That, in our view, is not to restrict or to delay the exercise of the employer's contractual rights. If, for example, the employer proves to the Industrial Tribunal that in the interval during which the man is dismissed, he would have exercised some contractual right to change things, changing the employee's duties or changing his location or whatever else could properly be changed under the terms of the contract, then treating the employee in all respects as if he had not been dismissed would enable the employer to argue and to expect his argument to succeed, that what was offered afresh by way of reinstatement would have to incorporate and reflect those proven changes. We therefore do not accept Mr Epstein's argument that to require reinstatement in any way going beyond restoration of the mere terms and conditions represents some restriction in the employer's rights or some enlargement of the rights of the employee. What this point comes to is this, that when in their paragraph 6 the Industrial Tribunal say this:

"On a narrow interpretation, it could be said that the respondent did comply with the Tribunal's order in the sense that it offered the applicant a job which it could require the application to perform under the terms and conditions of employment. However, we do not consider that to be treating the applicant in all respects as if he had not been dismissed."

There is, in our view, no error of law inherent in that conclusion.

That leaves another argument that the employer advances. What it comes to, in effect, is this, that what the employer had offered amounted to reinstatement and that the award of compensation should have been reduced by reason of s.117(8). In other words, what was offered was something which, had it been accepted by Mr Wilkinson, would have represented their compliance with the order and that Mr Wilkinson by refusing to accept the offer, was unreasonably preventing the order being complied with and, that being so, there should be a reduction under s.117(8).

That gives rise to the question whether the refusal of the job offer by Mr Wilkinson represented his unreasonably preventing the order being complied with and, in turn, it raises the question of whether such offer as was made to Mr Wilkinson represented something which, if accepted, would have been reinstatement. Mr Wilkinson's job title and a provision in his contract is found in our papers at page 19:

"JOB TITLE - MACHINE PRODUCTION OPERATIVE

Note:- Although the legislation required that your job title is shown on this statement, you should understand that for the efficient operation of a business of this type total flexibility of duties is required."

The offer made to Mr Wilkinson on 23 December 1996 was this, page 21:

"IN ACCORDANCE WITH THE RULING OF THE INDUSTRIAL TRIBUNAL HEARING WE ARE PREPARED TO OFFER YOU REINSTATEMENT.

AS YOU KNOW WE HAVE A FULL COMPLIMENT OF PUNCH MACHINE OPERATORS WE WILL REQUIRE YOU TO FULFILL OTHER DUTIES WITHIN YOUR CAPABILITIES IN LINE WITH YOUR TERMS AND CONDITIONS OF EMPLOYMENT.

PLEASE REPORT FOR WORK AT 7.50 AM ON THE 6/1/97."

That was rejected by Mr Wilkinson or, at least, by his advisers. What they say on 3 January is this:

"This offer of continued employment does not comply with the Order for Reinstatement. Such an order requires you to re-employ Mr Wilkinson 'in all respects as if he had not been dismissed'. There is no doubt that had he not been unfairly dismissed then he would today have been engaged in the capacity of a Punch Operator.

Therefore, my client will not be reporting for work this Monday 6th January 1997 and the matter will be referred back to the Industrial Tribunal."

The company offered again in their letter of 6 January, they say this:

"We have been informed by your representative that you have decided not to accept the offer of reinstatement made in my letter of 23rd December. However, I am concerned that you understand that this offer complies in all respect with your previous terms and conditions of employment.

Clause 3 of the terms and conditions of employment signed by you on 13th April 1995 states that although your job title is 'Machine Production Operative', you should understand that for the efficient operation of the business, total flexibility of duties is required.

If you accept the offer of reinstatement as ordered by the Industrial Tribunal, you will only be asked to undertake tasks of the same type as you have previously carried out during your time with the company. If you wish to discuss in more detail with me what these are likely to be in the short-term, please contact me.

This offer of reinstatement will remain open for the time being. Please let me know whether or not you intend to accept it."

Mr Wilkinson's advisers asked on 14 January:

"Therefore, in order that I can take the further instructions of my client in this matter would you please state whether you are prepared to reinstate Mr Wilkinson as a Punch Operator and only as a Punch Operator."

The company answered on 23 January 1997 (it is quite a long letter and I will not read the whole of it):

"2. ... During his time with the company, Mr Wilkinson has carried out a variety of tasks in addition to punch machine operation, including site installation work, press brake operation, assembly fitting, driving and factory cleaning. Indeed, Mr Wilkinson's proof of evidence, at paragraph 5, states that ' on Friday 14th June 1996, I was working on site ...'

...

4. If Mr Wilkinson had not been dismissed, he would not have been working continuously on the Punch Machine, because the company does not currently have sufficient work of that type to occupy the machine for more than one shift, and Mr Wilkinson was one of three employees familiar with this machine. He would therefore have been employed on other tasks within his ability, exactly as is now being offered by way of reinstatement.

5. The offer of reinstatement remains open for the time being. If your client is in any doubt about the nature of the work he would be required to undertake, he should contact Mr Ian Mongan on telephone no. 4838654. In the circumstances, we would regard any request to appear again at tribunal on the ground of failure to offer reinstatement as unreasonable and would seek an order to recover any costs we incur."

It is to be noted that in that paragraph 4 where it is said that:

"If Mr Wilkinson had not been dismissed, he would not have been working continuously on the Punch Machine"

that what is being addressed is whether he would have worked continuously and not whether he would have worked mainly on the punch machine.

The company's evidence had made good that Mr Wilkinson had not been only a punch operator. Looking at the Chairman's notes the evidence led to the conclusion that Mr Wilkinson and Mr Anthony were "fixers" going out on site, that being something plainly other than being a punch operator and also, by custom and practice, it was normal practice to carry out other work besides installation and operate the punch machine, e.g., duct work systems would be installed on site. Also, it was said Mr Wilkinson liked going on site. During pay negotiations he said, "I like working on site", he never objected to going on site and in cross-examination Mr Mongon, on behalf of the company, cross-examined by Mr Newton, said that:

"He would have been doing a mixture of work."

and, indeed, Mr Wilkinson's own oral evidence included:

"I go out and fit."

But it was his evidence:

"At Filt-Air I was mainly on the punch."

It had, therefore, been unreasonable of Mr Wilkinson's representatives to ask whether he was to be reinstated as a punch operator and nothing but a punch operator, as they had done in the letter which we have cited, because that would not have been reinstatement. He never had been nothing but a punch operator. He had, at all material times, had other tasks as well.

But Mr Wilkinson's declining of the offer that was made to him is only material to reduce compensation if it was a step that unreasonably prevented the order for reinstatement being complied with. Was the offer, therefore, one which if accepted would have of itself amounted to a reinstatement? Only if it was could a declining of it prevent compliance with the order.

As we have indicated in the earlier part of our judgment, we held the Industrial Tribunal to have been correct to regard the words:

"The respondent shall treat the applicant in all respects as if he had not been dismissed."

in the Order as meaning that as he had been mainly a punch operator he should be offered by way of compliance a job which was that of being mainly a punch operator, at all events, unless it was proven that even if he had not been dismissed he would have ceased to be mainly a punch operator. That throws up two questions. Was he offered the job of being mainly a punch operator? Nowhere does the employer say that that is so in his exchange with the advisers on the point. Nowhere in the Chairman's notes of evidence does it appear that the offer was an offer of being mainly a punch operator. There was, it seems to us, no material on which the Industrial Tribunal could have concluded that the offer was an offer of being mainly a punch operator. It was never said and it was never implied. The second question that is left is this: had it been proved that even if he had not been dismissed he would have ceased being mainly a punch operator? The amount of punch work that was done by the company had fallen but, of course, that in itself does not prove that he would have not remained mainly a punch operator.

It will be remembered that in their letter of 23 January what had been said by the company was that:

"If Mr Wilkinson had not been dismissed, he would not have been working continuously on the Punch Machine".

They did not say that he would not even have been mainly a punch operator.

There was other evidence from the company that Mr Lydon, who was the replacement for Mr Wilkinson, had not worked the punch much, that:

"The punch operators would have had to do something else if we had given Mr Wilkinson all of the punch work."

There is evidence that there were only two jobs on the punch.

None of those amount to it being averred that Mr Wilkinson would not have remained mainly a punch operator. It was not said in evidence that Mr Wilkinson could only be mainly a punch operator if he had been given all of the punching work. We have to remember that Mr Epstein rightly draws attention to the fact that the time at which the matter fell for consideration was as 6 January 1997 when the order should have been complied with and that the fact that earlier a replacement had been taken on does not prove what the situation was as at 6 January 1997. He properly draws attention to the fact that in December 1996 and January 1997 work had fallen off and that the replacement for Mr Wilkinson did not much work on the punch.

For all that, there seems to have been no evidence from which, in terms, the Industrial Tribunal would have been required to conclude that if Mr Wilkinson had not been dismissed he would have ceased being mainly a punch operator. After all, he could still be mainly a punch operator even if he had a whole raft of separate tasks. Even if less than 50 percent of his time was spent on being a punch operator, it could still be the predominant task that he was required to fulfil.

If that view is right then it follows that the employer's offer, which did not include his being mainly a punch operator, was not an offer the acceptance of which would have represented a compliance with the order for reinstatement. In turn, the refusal of that offer by Mr Wilkinson was not an unreasonable prevention by him of the order for reinstatement being complied with and thus s.117(8) did not come into play and no reduction in the award on that ground would be required.

There is a doubt in our minds as to the reasoning of the Industrial Tribunal on this point. What they say is:

"If the applicant had not been dismissed, and a new employee had not replaced him, he would still have been principally a punch operator. That job was not on offer to the applicant."

We see no difficulty with that last sentence. That job was not on offer to the Applicant. They do introduce the notion "and a new employee had not replaced him". It may be that those words indicate an improper consideration being taken into account given that s.117(7) was not satisfied. However, s.117(7) excludes consideration of the factor of the permanent replacement only on the question of practicability of compliance under s.117(4)(a). It does not preclude its being taken into account in addressing unreasonable prevention under s.117(8). Therefore, we raise that point only to lay it aside.

To revert to the sufficiency or insufficiency of the evidence, it is to be remembered that the Industrial Tribunal here was dealing with a hypothetical situation, what would have been the position if only he had not been dismissed and yet, of course, he had been dismissed. The propriety of inference, the range of inference open to an industrial tribunal is, in our view, inescapably larger where a hypothetical situation is being dealt with as opposed to a situation involving only what one might call "real fact". It seems to us that the area of permissible and legitimate supposition and impression is greater in a case where what is being dealt with is necessarily hypothetical. It has to be borne in mind, too, that the perversity argument, which is what this comes to, is never an easy one. It is to be remembered that being mainly a punch operator had been Mr Wilkinson's job; it appears from the references given that he was good at it, it was plainly what he wanted to be, there was plainly some punch work still to be done at the employer's premises and a replacement punch operator had been engaged. There was no clear evidence that Mr Wilkinson would not have been still mainly a punch operator if only he had not been dismissed.

Given that the Industrial Tribunal was dealing with a hypothetical position and recognising the breadth of possible decision open to them in such an area then, although we found this question difficult, we ultimately find ourselves unable to say that the Industrial Tribunal could not properly have concluded as it did that he would still have been principally a punch operator if only he had not been dismissed. It follows from that that the offer to him which did not represent an offer of being principally a punch operator was not an offer compliance with which would of itself amount to compliance with the order for reinstatement. In other words, it was an offer such that his refusal to accept it did not involve an unreasonable prevention of compliance with the order. In other words, taken one stage further, the possible reduction under s.117(8) does not come into play. That being so, it seems to us there is no remaining argument that serves to point to any error of law in the additional award computation of £2,730.00.

We do not see this ultimately as being a decision which sets any valuable precedent as to reinstatement generally. We do see it more as a matter where the facts presented at the Industrial Tribunal were, so far as concerns the employer's side, scanty and that ultimately the failure of their case depends upon that initial weakness, but, having done the best we can with the various arguments that have been addressed to us, we are unable to find an error of law in the conclusions of the Industrial Tribunal in relation to the additional award and, accordingly, dismiss the appeal.