THE HONOURABLE LADY SMITH
Introduction
1.
This appeal concerns collective consultation and fixed term contracts.
It is an employers’ appeal from a judgment of the Employment Tribunal sitting
at Glasgow, Employment Judge Paul Cape, registered on 26 November 2010 holding that:
“The unanimous judgment of the Tribunal is that the individuals
identified as test cases, save for Ms Fife, were dismissed as redundant
within the meaning of that expression in section 195 of the Trade Union
and Labour Relations (Consolidation) Act 1992.”
2.
We will, for convenience, continue to refer to parties as Claimant and Respondent.
3.
The allegation being of a failure relating to a trade union, by a
university employer, to comply with the collective consultation obligations in
s.188 of the 1992 Act, the Claimant is the trade union of the relevant
employees, rather than the individual employees themselves. At the hearing
before the Tribunal (a pre-hearing review) an issue was considered in relation
to four specific employees, all of whom had been employed on contracts limited
by time or by reference to a specific event (“FTC’s”), not open ended ones
(“OEC’s”). The issue was:
·
Whether the discharge of a limited
– term contract by effluxion of time, without that contract being renewed, gave
rise to an employee being dismissed as redundant within the meaning of section 195
of the Trade Union and Labour Relations (Consolidation) Act 1992
(“the 1992 Act”)?
and the names and circumstances of the four individual employees
were:
·
Dr C Harris: employed for a research project dependent on outside
funding;
·
Dr A M Doyle: employed to deliver three specific
undergraduate modules;
·
Ms C Fife: employed to provide maternity leave cover
and thereafter for three short terms limited in time; and
·
Dr Kelly: employed to provide sick leave cover.
4.
The Claimant was represented by Mr Brown of counsel before the
Employment Tribunal and by Mr White QC and Mr Brown, before us.
The Respondents were represented by Mr Napier QC before the Tribunal
and before us.
Background
5.
The relevant background facts, as drawn from the Tribunal’s findings in
fact in relation to the evidence of the sole witness (Professor Simpson),
from an agreed statement of facts which had been entered into by the parties
and from the summary of part of Professor Simpson’s evidence contained in
paragraphs 32 and 33 of the Respondents’ written submissions before the
Tribunal (which was accepted before us as having been accurate and not
challenged) are as follows.
6.
The Respondent habitually engaged employees, such as Dr Harris, to
carry out research work on projects which were funded by third parties and
dependent on that funding. These contracts of employment are for fixed terms.
Researchers habitually enter into such contracts in full knowledge of the
circumstances, namely that they are for a fixed term and that renewal is
funding dependent. Dr Harris was engaged on such a project as from 1 September 2008. Her contract was renewed for a limited term with an expiry
date of 16 August 2009. It was not renewed thereafter. She found
alternative employment.
7.
The decision not to offer Dr Harris another contract was based on
the normal considerations that the respondent applied where the FTC of a
researcher came to an end. Those considerations were that the employee knew
from the outset of a FTC that their term of service was finite; the employee
had chosen to go into a contract that was for that finite period – typically,
one which was linked to the availability of outside funding. The FTC employee
was in a quite different position from an OEC employee and so regarded by the Respondent.
8.
Regarding Dr Doyle, Ms Fife and Dr Kelly, the Tribunal’s
findings are limited to the following:
“9. Dr Doyle was engaged pursuant to a fixed term contract to
co-ordinate and deliver three undergraduate modules in English Studies in the
Spring 2009 semester, ending on 29 May 2009. The contract was not renewed, as
the semester had ended.
10. Ms Charlotte Mary Fife was engaged to provide maternity
leave cover for the six months ending on 2 May 2009. That employment
was extended for a further limited term until 4 September 2009 and,
again, until 9 October 2009. Thereafter, Ms Fife was employed
on what was described as a ‘casual basis’ for the period
10 October 2009 until 10 September 2010.
11. Ms Kelly was initially engaged for one month in
July 2007 and then from 1 October 2007 until
31 March 2008. Thereafter, the employment was extended until
30 September 2009. The final extension was partly because
Ms Kelly was a named researcher on a number of projects and partly because
a colleague was to be working reduced hours following a return from maternity
leave.”
9.
The Tribunal found that Ms Fife was not dismissed at all
(paragraph 61) but parties had, we were informed, agreed that she was
dismissed.
10.
In all four cases, at least one of the reasons for dismissal related to
the fact that the employee had agreed to accept that the contract under which
they were employed would come to an end at a particular time or on the
occurrence of a particular event. That factual summary was included in
Mr Napier’s skeleton argument and Mr White confirmed, in the course
of the appeal hearing, that the Claimant accepted that it was correct.
Relevant law
Collective
Consultation: Domestic Legislation
11.
Under and in terms of s.188 of the Trade Union and Labour Relations
(Consolidation) Act 1992 (‘TULRA’), which is within
Chapter II of Part IV of the Act, where an employer:
“188(1)…………is proposing to dismiss as redundant 20 or more
employees at one establishment within a period of 90 days or less, the
employer shall consult about the dismissals all the persons who are appropriate
representatives of any of the employees who may be affected by the proposed
dismissals or may be affected by measures taken in connection with those
dismissals.”
12.
As originally enacted, s.188 included a duty to consult any relevant
trade union whenever an employer was proposing to make any employee redundant,
whatever the number of employees involved, but it was amended to the above
terms, in 1995.
13.
Trade union representatives are “appropriate representatives”
(s.188(1B)).
14.
In no circumstances can the collective consultation requirements of
s.188 apply to FTC’s for three months or less – s.282 of TULRA provides:
“282(1) The provisions of Chapter II of Part IV (procedure
for handling redundancies) do not apply to employment –
(a) under a contract for a fixed term of three months or less,
or
(b) under a contract made in contemplation of the performance of
a specific task which is not expected to last for more than three months,
where the employee has not been continuously employed for a
period of more than three months.”
15.
The derivation of s.282 TULRA was s.119(7) of the Employment
Protection Act 1975 which was to the same effect as s.282 save that
the exclusion was in respect of FTC’s for twelve weeks or less, as opposed to
three months.
16.
Where s.188 applies, the employer must make disclosure to the relevant
representatives under a series of separate heads (s.188(4)) which are, broadly
speaking, directed towards the stated objectives (s.188(2)) of consulting about
avoiding the dismissals, reducing the number of employees to be dismissed and
mitigating the consequences of dismissals.
17.
Also, where s.188 applies, the employer must notify the relevant
Secretary of State of his proposal, in writing, before giving notice of
termination to the employees concerned and at least 30 days before the
first dismissal if the number of employees involved in the consultation is more
than 20 but less than 100 (s.193). If he fails to do so, he commits an offence
(s.194) and is liable to be prosecuted and fined (at a level up to level 5
on the standard scale – currently £5,000).
18.
In summary, therefore, the purpose of collective consultation appears to
be to see whether the redundancies can be avoided altogether, whether they can
be reduced in number, whether there is anything that can be done to mitigate
the effect of them on the individual employees and to give notification to the
government of circumstances in which a significant number of persons are liable
to become unemployed – thus, potentially, a burden on the state - and liable
to become entitled to redundancy payments (the burden of which, in the case of
insolvency, could also fall on the state).
19.
If an employer fails to comply with s.188, in addition to the
possibility of him being prosecuted and fined, it is open to the employees
affected/their representatives to present a complaint to an Employment Tribunal
(s.189(1)) and, in addition to the tribunal making a declaration of non compliance,
it may make a protective award. A protective award is, essentially, a punitive
award (Association of Patternmakers and Allied Craftsmen v Kirvin Ltd
[1978] IRLR 318; GMB v Susie Radin Ltd [2004] EWCA
Civ 180; [2004] IRLR 400) and may be made in favour of each affected
employee in a sum not exceeding 90 days pay. In short, non-compliance
could prove to be expensive. “Dismiss as redundant” under TULRA is not
restricted to circumstances where a business (or part of it) is closing or jobs
are being cut due to reduced business need (cf. Employment Rights Act 1996
s.139(1)).
It is significantly wider than that. Section 195 of TULRA provides:
“…references to dismissal as redundant are references to
dismissal for a reason not related to the individual concerned or for a number
of reasons all of which are not so related.”
20.
Thus if, for example, an employer wished to introduce material changes
to the terms and conditions of more than 20 employees involving termination of
their existing contracts of employment and the issuing of fresh contracts
incorporating those changes, those circumstances would plainly not satisfy the
requirements of s.139 of the 1996 Act. However, assuming that the
business need to effect those changes was the reason for the dismissals
proposed, it would appear that the s.188 duties of collective consultation
would be triggered even although the employer was not proposing to shed any
jobs (see e.g.: GMB v Man Truck & Bus UK Ltd [2000]
ICR 1101). That is because in such circumstances, the reason for the
dismissals would plainly not relate to the individuals; it would only relate to
the requirements of the business.
21.
The question of whether, where dismissal is because of the expiry of a
FTC, it is for a reason or reasons “not related to the individual concerned”
has not been the subject of discussion in any prior authority. It is the
central issue in this case.
22.
The current wording of s.195 was substituted by section 34(5) of
the Trade Union Reform and Employment Rights Act 1993 following the
ECJ decision in Commission of the European Communities v United Kingdom
(Case C – 382/92) [1994] ICR 664) in which it was conceded by the UK
government that its former wording (which reflected only the definition of
redundancy in s.139 of the 1996 Act) failed to comply with the
requirements of the relevant Directive (75/129/EEC on the approximation of laws
of the Member States relating to collective redundancies). The Directive
defines ‘collective redundancies’ differently from the 1996 Act. Insofar
as relevant, the definition is:
“Article
1
For
the purposes of this Directive:
‘collective redundancies’ means dismissals effected by
an employer for one or more reasons not related to the individual workers
concerned…”
23.
The Directive makes provision for collective consultation. It requires
to take place where, in any establishment, there are to be at least 20
dismissals over 90 days (Article 1(1)(ii)).
24.
All dismissals at the end of a FTC are, however, excluded from the ambit
of the Directive. Part 2 of Article 1 provides:
“2. This Directive shall not apply to:
collective redundancies effected under contracts of employment
concluded for limited periods of time or for specific tasks except where such
redundancies take place prior to the date of expiry or the completion of such
contracts;”
25.
Thus, even if 20 FTC’s were due to expire at the same time, the
Directive does not require there to be collective consultation. In the Commission
of the European Communities v United Kingdom case, Advocate
General Van Gerven explains, at paragraph 10 of his opinion:
“The essential objective of Directive (75/129/E.E.C) is to
guarantee to workers within the Community, by way of Community rules
establishing ordered procedures for consultation and redundancies, which can
undoubtedly be regarded as a crisis situation so far as the workers are
concerned.”
26.
It would seem to follow from the Directive’s exclusion of FTC’s that it
was not considered that dismissals at the end of such contracts could represent
a crisis situation. Further, that would be so no matter how many terminating
FTC’s there were or if the addition of their number to dismissals which fell
within the ambit of Article 1(1) showed that more than 20 employees
were liable to lose their jobs.
27.
We were referred to a number of authorities in the course of the appeal
hearing, none of which are directly in point but which were relied on by
counsel in the course of their respective arguments. They were as follows.
28.
The case of Association of University Teachers v University of
Newcastle-Upon-Tyne [1987] ICR 317, a decision which pre-dates
the introduction of the s.195 definition of redundancy, concerned the
termination of the FTC of a lecturer. This tribunal held that the Employment
Tribunal had been wrong to find that there was no redundancy under the old
statutory definition and that the employer university had, accordingly, failed
in its duties of collective consultation. The members of the tribunal do not,
however, appear to have been comfortable with the conclusion which they
considered the then current legislation required them to reach. At p. 327,
Wood J said:
“A number of general matters in this case have caused this
appeal tribunal some anxiety and hesitation in reaching its conclusion and has
caused it to wonder whether these provisions were ever intended to apply to
situations like the present. We would emphasise that in the present case the
employee had a three year fixed term contract which he could foresee was
unlikely to be renewed. He agreed under the provisions of section 142 of
the Act of 1978 not to seek an award under the unfair dismissal or redundancy
provisions at the end of that term. This does not in our minds create the
usual picture of a redundancy or impending redundancy.”
29.
The case of Terry v East Sussex County Council [1976] ICR 56,
a decision which also predated s.195 of TULRA, and also concerned a lecturer’s
FTC. The issue for this tribunal, which was chaired by Phillips J, was
whether or not his dismissal was unfair, when his FTC expired and was not
renewed. In commenting on the employee’s contention that the expiry of a FTC
without renewal could never constitute ‘some other substantial reason’,
Phillips J observed (at p.538):
“If correct, this contention would have far-reaching consequences.
There are many undertakings in which it is usual and necessary for persons to
be engaged for short periods upon fixed-term contracts: for example, in
schools and universities teachers and lecturers are often engaged for a term or
other short period, and in the construction industry it is not uncommon for
qualified men to be retained for particular periods or for particular jobs.
The contention involves the conclusion that in such cases, usually at all
events, failure to renew the contract upon its expiry would render the employer
liable to pay compensation for unfair dismissal, unless there were some other
reasons to justify the dismissal, or unless it could be shown that the employee
was redundant, which would not always be possible.”
30.
Thus, in the view of Phillips J, whilst the termination of a FTC might
amount to redundancy (in what is now the 1996 Act sense), that will not
always be the case; it might not be possible to show that it was. At the end
of the judgment, he commented on the need for tribunals to ‘hold a balance’
(p.542D) and added:
“On the one hand, employers who have a genuine need for a
fixed-term employment, which can be seen from the outset not to be ongoing,
need to be protected. On the other hand, employees have to be protected
against being deprived through ordinary contracts being dressed up in the form
of temporary fixed-term contracts.”
31.
The case of Pfaffinger v City of Liverpool Community College;
Muller v Amersham & Wycombe College [1997] ICR 142,
another pre s.195 decision concerning lecturers employed under FTC’s. The
issue was whether on the expiry of their FTC’s, they were dismissed for
redundancy (in the 1996 Act sense). In the judgment of this tribunal,
Mummery J recognised that it did not necessarily follow that the
termination of employment at the end of a FTC amounted to redundancy and
stressed the importance of asking what was the reason for the dismissal. At
p.151, he said:
“It was held by the Court of Appeal in Nottinghamshire County
Council v Lee [1980]ICR 635 that, in interpreting equivalent
provisions in earlier legislation...it was necessary to ask, in the case of a
fixed term contract which expired and had not been renewed: ‘Why was not the
employee’s contract renewed?’”
32.
The case of National Association of Teachers in Further and Higher
Education v Manchester City Council [1978] ICR 1190 (‘Natfhe’),
again a pre s.195 decision of this tribunal. It was heavily relied on by
Mr White as being supportive of his argument. The issue was whether an
education authority were obliged to consult with a trade union,
where the FTC’s of part time teachers expired and were not renewed; in
particular, had the employer been proposing to dismiss those teachers as
redundant? The basis on which they were employed was that they were engaged on
FTC’s for single academic sessions (September to July) which might or might not
be renewed on expiry. The then current legislation (Employment Protection
Act 1975) required an employer proposing to dismiss an employee as redundant
to consult the relevant trade union representatives (s.99(1)) but, under
s.119(7) of that Act, certain types of employees were excluded from that
protection. At p.1194, Phillips J said:
“The purpose of s.119(7) is to exclude the operation of sections 22,
29, 99 and 100 from employment under a contract for a fixed term of
12 weeks or less, etc., unless the employee has in fact been continuously
employed for a period of more than 12 weeks. In other words, it is
intended to draw a line and to exclude cases of actual short term
employment. But the very fact that it has been found necessary to do this
indicates clearly that employment under a contract for a fixed term of more
than 12 weeks does fall within the provisions of section 99 et seq…”
and then, at
p. 1195, he summarised matters in this way:
“As we have said, it seems to us that where employees engaged on
a fixed term contract, whether part-time or full time, are dismissed because
their contracts of employment are not renewed, it may well be the case that
they have been dismissed “as redundant” within section 99. Whether it is
or not will depend on all the circumstances.”
33.
Accordingly, whether considering the position under the 1975 Act or
under the provisions of s.195 of TULRA as originally enacted, it cannot be
concluded that all dismissals at the expiry of FTC’s other than those for not
more than 12 weeks/3 months were subject to the statutory requirement
to consult. Whether or not they were depended on examining what, on the facts,
was the reason for dismissal and determining whether or not the reason was
redundancy.
34.
The other European decision that was referred to was Commission of
the European Communities v Portugal Case C-55/02 which did not concern
FTC’s. Rather, the issue was whether the definition of redundancy in the
relevant Portuguese legislation was too narrow in respect that it restricted
the concept of collective redundancy to circumstances where dismissals arose
for structural, technological or cyclical reasons and did not, for instance,
cover dismissals by reason of insolvency. The Court did not accept Portugal’s argument that the Directive did not apply to redundancies which were not
attributable to a voluntary act on the part of the employer and, in their
judgment, appear to have been at pains to make that clear. Having, at
paragraph 43, noted the definition of collective redundancies in
Article 1(1)(a), the Court observed, at paragraphs 49 and 50:
“Accordingly the concept of ‘redundancy’, as mentioned in
Article 1(1)(a) of the Directive, may not be defined by any reference to
the laws of the Member States, but has instead a meaning in Community law.
The concept has to be interpreted as including any termination
of contract of employment not sought by the worker, and therefore without his
consent. It is not necessary that the underlying reasons should reflect the
will of the employer.”
35.
The case of Lancaster University v The
University and College Union UKEAT/0278/10/JOJ, an EAT decision of
2010, approving the level of the appropriate protective award determined by the
Employment Tribunal where staff employed on FTC’s were dismissed. However, it
was conceded – in circumstances where the employer had established a practice
of giving four months notice to the relevant trade union of FTC’s which
were due to expire – that the collective consultation provisions of s.188 TULRA
applied.
36.
Finally, the case of Abernethy v Mott, Hay & Anderson
[1974] IRLR 213I was referred to for the well known passage at
paragraph 13 in which Cairns LJ stresses that the reason for the
dismissal of an employee is a question of fact and it has to be borne in mind
that employers may not themselves put the correct legal label on those facts;
what the facts amount to is a question of law:
“…A reason for the dismissal of an employee is a set of facts
known to the employer, or it may be of beliefs held by him which cause him to
dismiss the employee. If at the time of his dismissal the employer gives a
reason for it, that is no doubt evidence, at any rate as against him as to the
real reason, but it does not necessarily constitute the real reason…he may
describe his reasons wrongly through some mistake of language or of law. In
particular in these days when the word ‘redundancy’ has a specific statutory meaning,
it is very easy for an employer to think that the facts which have led him to
dismiss constitute a redundancy situation whereas in law they do not; and in my
opinion the Industrial Tribunal was entitled to take the view that that was
what happened here: the employers honestly thought that the facts constituted
redundancy, but in law they did not.”
The Tribunal’s reasoning
37.
The Tribunal found that the collective consultation obligations applied
to three of the four ‘test case’ FTC dismissals, as explained above. The
reasoning of the Employment Judge can be summarised as follows.
38.
From the outset of their respective legislative histories, domestic law
and EU law regarding duties of collective consultation did not “march in step”
(paragraph 34). The domestic legislation originally defined the range of
circumstances giving rise to the duty to consult more narrowly than did the EU
(paragraph 35). The 1975 Act went, however, further than the EU law
required regarding the range of employees in respect of whom the duty to
consult arose (paragraph 36). The domestic legislation had originally,
under the 1975 Act, required consultation even where there was only one
dismissal (paragraph 37). A reason for dismissal is a set of facts known
to or beliefs held by an employer which causes him to dismiss and one reason
may comprise several facts (paragraph 48). There is a presumption of
redundancy and to rebut it, the Respondent required to show a reason that was
personal to the dismissed employee, not merely a fact that was personal
to him (paragraph 48). The expression ‘for a reason not related to the
individual concerned’ was not clear and unambiguous. That was because it was
inevitable that the reason for any dismissal will, in some way, relate to the
individual concerned; in the case of redundancy the reason for dismissal might
be the particular job done by the employee or some attribute of his such as
length of service, disciplinary or sickness record and those were reasons
relating to the individual (paragraph 49). If the expression was given
too broad a meaning, that would undermine the scope of the protection afforded
by the Directive (paragraph 50). A ‘reason relating to the individual
concerned’ was where the reason was a close and direct one involving a reason
that was personal to the individual, such as conduct or capability
(paragraph 51).
39.
The Employment Judge also had regard to the law prior to the UK’s amendment, in 1993, of the definition of redundancy given in s.195 of TULRA. At
paragraph 54, he said:
“54. On the law prior to that amendment, Natfhe is clear
authority for the proposition that the duty to consult bites upon the dismissal
of employees engaged on limited – term contracts. A question for the Tribunal
is whether Parliament intended whilst broadening the range of dismissals that
would fall within the collective consultation provisions, also to remove the
protection of the collective consultation provisions from limited-term contract
holders or, at least, from holders of limited- term contracts of the kind seen
in the test cases identified to the Tribunal.”
40.
He observed, at paragraph 55, that it was open to the United Kingdom to exclude FTC’s from the collective consultation regime (save in the case
of early termination) but, under reference to the exclusion of FTC’s for
three months/twelve weeks or less, he added:
“In enacting the provisions of the 1975 Act, the United Kingdom extended the protection of collective consultation to those employed on
fixed term contracts of a term of more than three months and to those employed
on fixed term contracts for more than three months. Applying the canon of
construction embraced in the expression “expressio unius est exclusio alterius”
the stipulation of those limited – term contract holders who would be excluded
from the right to collective consultation implies that other employees holding
limited – term contracts were intended to be within the scope of the collective
consultation provisions.”
41.
He then reasoned that Parliament cannot have intended, when it amended
s.195 of TULRA so as to broaden the category of dismissals to which collective
consultation obligations would apply also to narrow the range of employees
entitled to protection (paragraph 56). The fact that the consultation
obligations under the prior law in the 1975 Act applied to even a single
dismissal and that that was a situation which continued for more than
2 years after the coming into force of TULRA undermined, he said, the
suggestion that Parliament cannot have intended that there be consultation in
respect of dismissals arising from the termination of FTC’s
(paragraph 58), provided the required number of dismissals were proposed.
42.
Finally, the Employment Judge rejected any suggestion that when an
employee is engaged under a FTC, he thereby consents to being dismissed at its
expiry (paragraph 59) because the effect of the provisions of the
1975 Act and TULRA was to place FTC holders and employees on contracts of
indefinite term, on the same footing. He added:
“Although an employee who enters into a limited-term contract
does so on the basis that the employment may come to an end on the expiry of
the fixed – term or the performance of the specific task, an employee who
enters into a contract for an indefinite term determinable on notice does so on
the basis that the employer has the right to discharge the contract by giving
due notice. Whether engaged on a limited-term contract or an indefinite- term
contract determinable on notice, the employee puts in the employer’s hand the
sword of termination and, in that sense, consents to termination.”
43.
Accordingly, the Employment Judge construed the statutory provisions as
meaning that dismissal at the expiry of a FTC always triggered the duty to
consult (subject to numbers and timescales).
44.
In paragraph 60, the Employment Judge refers to the fact of FTC’s
having for a long time been used in research posts and to the general fact that
“members of the research community enter into such arrangements in the full
knowledge of the way the system works” but said that those features did not
provide any reason to exclude them from the duty to consult. He added:
“Those factors could properly be taken into account in assessing
ex post facto, whether the duty to consult had been discharged.”
but offered no explanation of what he had in mind in that regard.
The appeal
Submissions for the Respondent
45.
Mr Napier submitted that the Tribunal had misunderstood and
misapplied the relevant statutory provisions. In so doing, the Employment
Judge had failed to ask himself the question posed by s.195, namely whether or
not, as a matter of fact, the dismissals in the test cases were for reasons
relating to the individuals concerned.
46.
He pointed out that the appeal concerned not only researchers on FTC’s
but also FTC’s where the employee was providing maternity or sick leave cover.
The implications of the decision in the case were, accordingly, potentially
very wide reaching. On the Tribunal’s approach, the collective consultation
obligations would be triggered in the case of, say, the employer in a large
organisation who has no traditional redundancies in mind but might well have 20
or more maternity and/or sick leave cover FTC’s expiring within a 90 day
period; such an employer is unlikely, in such circumstances, to be alerted to
the need to consult if he is to avoid being penalised. Similarly, such an
employer could be caught out if the termination of a small number of
maternity/sick leave FTC’s in a 90 day period will, when added to a number
of traditional redundancies, take the total proposed dismissals to over 20.
That would, he submitted be incongruous, particularly since there was no
apparent point in consulting for any of the statutory purposes in such
circumstances. He referred to the above passage from AUT v University of
Newcastle–upon–Tyne [1986] ICR 317 as acknowledging that it was
unrealistic to apply the duty to consult to the case of researchers employed on
FTC’s and submitted that the case for unreality was even greater when it came
to FTC’s for maternity and sick leave cover.
47.
Mr Napier submitted that the issue for the Tribunal was the correct
application of sections s.188 and 195 of TULRA. Since, on the facts, at least
one of the reasons for dismissal of each of the four employees was that they had
accepted that the contract under which they were employed would come to an end
at a specified time or on the occurrence of a particular event, the duty to
consult could not apply; at least one of the reasons for dismissal related to
them as individuals. It was sufficient, for the Respondent’s purposes, that
that be one of the reasons. section 195 did not require that it be the
sole reason; if any one of a number of reasons related to the individual
concerned, that took the dismissal outwith the ambit of s.188.
48.
Mr Napier submitted that whilst the Employment Judge had correctly
asked what was the reason for the dismissal, he had then, erroneously, put a
gloss on the words of the statute by requiring that for s.195 purposes, the
reason required to be personal to the individual and that, further, he had
wrongly had in mind reasons relating to selection for redundancy which is not
the same as the reason for the dismissal itself. He had wrongly considered
that in a ‘standard’ redundancy, the reason for the dismissal relates to the
worker himself; it does not. The reason for dismissal is the diminution in
business etc.
49.
In any event, he added, even if the Tribunal was correct and it was
necessary to show a close and personal connection between the individual concerned
and the reason for dismissal, that had been done. The fact that an employee
has given his consent to the contract of employment ending at the appointed
time/event was sufficient.
50.
Further, the Tribunal erred in taking Natfhe as being
“clear authority” for the proposition that the duty to consult applied, under
the ‘old’ law, wherever employees were dismissed at the end of FTC’s. The case
was authority for nothing more than the proposition that such dismissal may
have been dismissal for redundancy; whether or not that was the case depended
on the particular facts and circumstances (cf. Terry v East Sussex County Council; North Yorkshire CC v Fay; Pfaffinger
v City of Liverpool Community College). The Employment Judge’s
misunderstanding of Natfhe was central to his reasoning
and undermined it. He had failed to recognise that terminations of FTC’s could
arise in a variety of circumstances, not all of which would have fallen within
the traditional definition of redundancy. The Employment Judge had also erred
in reasoning that the Respondent’s approach removed the possibility of the duty
to consult ever arising where the dismissed employee was working under a FTC.
It would, for instance, apply where dismissal by reason of the cessation of the
employer’s requirement to have the particular work carried out arose prior to
the date for expiry of the FTC. Such a situation could occur if a particular
department of a university in which a researcher on a FTC worked, were to close
down.
51.
Mr Napier turned to s.282 of TULRA and submitted that the
Employment Judge had misunderstood its effect. It did not follow that where a
FTC was for more than three months the duty to consult arose in
every case. It all depended on the reason(s) for the dismissal; if any of them
related to the individual concerned, the end of the FTC would not fall within
the ambit of s.188, but if none of them did, then it would. There was no scope
for the operation of the maxim relied on.
52.
Mr Napier submitted that, having fallen into the above errors, the Tribunal
wholly failed to consider the facts of these cases and ask whether or not the
conditions set by s.195 were met. The Employment Judge was wrong to have been
influenced by the prior statutory scheme which covered proposals to dismiss a
single employee as redundant and wrong to have failed to appreciate that the
termination of a FTC was not a crisis situation (see: EC Commission v UK
per Adv Gen Van Gerven at paragraph 10). Separately, in saying that there
was, given the usual notice provisions, as much consent by the employee to
termination in the case of a contract for an indefinite term as there was in
the case of a FTC, he had missed the point. It was not a matter of asking
whether, objectively, it could be concluded that there was such consent; one
required to ask what were in fact the reasons for dismissal. That the
Employment Judge had failed to do and yet the facts showed that at least one of
the reasons, being that these were employees who had agreed to enter into
contracts which were, of their nature, for a finite period, related to them as
individuals. As for his comments at the end of paragraph 60, there was no
authority for any proposition that the unusual feature of applying the duty to
consult in the case of expiry of FTC’s could be reflected in any reduction of
the relevant protective awards.
53.
Turning to EU law, it was plain that the domestic law went further than
was required by the Directive; it could, without non-compliance, have provided
that s.188 did not apply to any FTC’s at all. TULRA did not, however, do
that. There was no need, in these circumstances, for any purposive
construction under reference to the Directive.
54.
In all these circumstances, the decision of the Tribunal could not
stand, the appeal should be allowed and a judgment that s.188 did not apply to
the test cases be substituted. If it was considered that there were not
sufficient findings in relation to the cases of Doyle, Fife, and Kelly (in
respect of whom evidence had not been led), the case should be remitted but
only in respect of them.
55.
For the claimant, Mr White accepted that the domestic legislation
was more favourable to FTC holders than the Directive required (as was
permitted by Article 5) and that that was not to say that some FTC holders
were not protected by s.188. He accepted, for instance, that dismissal at
termination of a FTC could be for a reason relating to an individual if the
employee’s performance during the period of the contract was unsatisfactory so
that the employer decided not to renew it. What could not, however, be a
reason relating to the individual was that he had signed a FTC.
56.
He submitted that the reason(s) for the dismissals in the test cases did
not, however, relate to the individuals concerned and they were, accordingly,
protected. As a generality, by parity of reasoning with that which was applied
by the European Court of Justice at paragraph 55 in the case of Commission
of the European Communities v Portugal, FTC’s would have been
covered by the Directive, had it not been for Article 1(2)(a). The
exclusion in the domestic legislation, under s.282, required to be viewed in
that context. By means of ordinary techniques of statutory construction,
particularly the expressio unius rule, it was evident that there was a
presumption that FTC’s for more than three months were covered by s.188.
57.
Mr White sought to support the Tribunal’s construction of Natfhe.
He submitted that it showed that such contracts were covered ‘as a class’. The
defining characteristic of the class was that the employee had signed a FTC.
That being so, the employer could not rely on the fact that the employee had
done so as excluding him from the class. The Barras principle
applied viz. where an Act used a form of words upon which the court had
previously pronounced, it may be presumed that Parliament intended the words to
have that previously opined upon meaning in the enactment under scrutiny.
58.
Mr White submitted that it was important to have in mind the
relevant ‘mischief’ which was circumstances where a large number of people were
losing their jobs. It did not matter if they or some of them were doing so in
circumstances where they had been covering maternity leave or sickness absence.
59.
He submitted that the earlier cases, prior to the current version of
s.195 of TULRA were of no assistance.
60.
Regarding the particular criticisms of the reasoning of the Employment
Judge, Mr White submitted that his ‘gloss’ of ‘direct and personal’ was
not objectionable although he accepted, to an extent, the criticisms of his
consideration of potential reasons for selection for redundancy.
61.
Otherwise, however, the reasoning of the Employment Judge was, he
submitted, sound, subject to two matters. First, it was not correct to find
that it was enough if one of a number of reasons related to the individual. He
relied on a passage in Harvey on Industrial Relations and Employment Law
at E-2527 where the editors expressed the view that the Directive provided for
a focus on the predominant reason for dismissal. It was necessary that the
main reason for dismissal related to the individual. Secondly, the Tribunal
had thus wrongly accepted the Respondent’s submission that for a dismissal to
fall within s.188, it was necessary that none of the reasons for it related to
the individual.
62.
Finally, Mr White submitted, in support of a cross appeal, that the
Tribunal was wrong to have excluded Ms Fife’s case. Parties had agreed
that she had been dismissed and the Employment Judge’s reasoning plainly
applied to her as well.
Discussion and decision
63.
We are satisfied that the appeal should be upheld. The Respondent’s
submissions are well founded.
64.
We do not accept the Employment Judge’s reasoning. He has, we consider,
fallen into error in several respects. First, underlying his approach appeared
to be his view that all reasons for dismissal related in some way to the
individual concerned so he required to look for something more; that was that
the reason required to be one that could be described as ‘direct and personal’ such
as his conduct or capability. The flaw in that approach is demonstrated by his
referring to the ‘reason’ for a redundancy dismissal being, for instance,
length of service or disciplinary/sickness record (paragraph 49). Those
are, however, reasons for selection from a pool of employees where the reason
for dismissal is and remains, redundancy. Further, there is no warrant for his
importing a new definition of ‘relating to the individual’ into the statute,
yet that is what, by applying a test of ‘direct and personal’, he does. The
statutory terminology does not, as we discuss above, lack clarity.
65.
Secondly, the Employment Judge erroneously concluded that, under the
prior legislation, redundancy consultation was required in dismissals on the
expiry of all FTC’s and that, accordingly, Parliament cannot have intended to
narrow the scope of the protection afforded. We would refer to our earlier
discussion in that regard.
66.
Thirdly, the Employment Judge approached matters on the basis that s.282
TULRA favoured his interpretation but as we have explained, we do not consider
that those provisions demonstrate legislative intention that all FTC’s in
excess of three months were to be brought within the ambit of s.188.
67.
Finally, whilst it is not clear whether the Tribunal’s observations at
paragraph 60 were influential in the Employment Judge’s ultimate
conclusion, they ought not to have been, in our view. They are, perhaps,
demonstrative of an overall failing which is that the Employment Judge does not
actually ask the question of whether, on the facts of the cases before him, the
dismissals were for reasons not related to the individuals concerned. He
required to do so and it was only if he could, on the facts, answer that
question in the affirmative that he was entitled to conclude that s.188
applied. He appears to have approached matters on the basis that dismissal for
the reason that the individual employee had knowingly agreed to a contract of
employment for a finite term could never be a reason relating to the individual
concerned. He was not, however, for the reasons that we explain, entitled to
do so.
68.
The issue turns on construction of domestic legislation which not only,
now, implements the relevant Directive, but goes further than it requires.
Similarly, the interpretation of ss.188, 195 and 282 urged on us by
Mr Napier goes further than the Directive requires and is thus compatible
with it; there is no community right afforded by the Directive which would be
infringed by that interpretation. The Marleasing
approach to interpretation is thus not required (see: R (Hurst) v London
Northern District Coroner [2007] 2 AC 189), as was agreed by
counsel.
69.
That is not to say that the means by which the Directive excluded all
FTC’s is of no assistance to us in carrying out the interpretive task. The
provisions of Articles 1 and 2 to which we refer above set the scene and
the scene, from the European perspective, was that if a FTC in fact came to an
end at the expiry date provided for in the contract, the collective
consultation provisions could never apply. It did not matter if the reason for
not renewing the FTC did not relate to the individual concerned - if, for
instance, the reason was that that part of the business for which the FTC work
had been carried out was closing down (i.e. a reason not related to the
individual concerned). FTC’s were an excepted category, in all circumstances.
70.
It can, perhaps, reasonably be inferred that the domestic legislature,
noting the need, under the Directive, for collective consultation when business
decisions are made which have potential to restrict the employer’s business or
other activities and so cause significant job losses, determined on a statutory
scheme which would require such consultation in the case of FTC’s if a decision
of that sort – which does not involve any focus on the individual FTC employee
- was the reason for their non renewal. It is not difficult to see that there
could, in such circumstances, be benefit in collective consultation for the
statutory purposes of avoiding dismissals, reducing the number of employees to
be dismissed and mitigating the consequences of dismissals – where offering
renewals of FTC’s might, for instance, be a means of preventing proposed
closures or business restrictions. Such considerations do not, however,
obviously arise where the reason is not the making of a business decision with
such potentially wide reaching implications, but the termination, in normal
course, at a previously agreed and planned date (or event) of a FTC.
71.
Mr White sought to persuade us to infer that Parliament must have
intended to bring all FTC’s within the ambit of s.188. That was because, in
his submission, under the prior redundancy consultation provisions,
consultation was always required where dismissal occurred at the expiry of a
FTC and it could be inferred that they would not have legislated to narrow the
previous protection. He relied on Natfhe in support of
that proposition. That is not, however, what Natfhe or any of
the other authorities to which we refer above, say. The position was, on the
contrary, clearly that to determine whether or not there had been a dismissal
for redundancy, the Tribunal required to consider what, on the facts of the
individual case, was the reason for the dismissal. Further, unease was
expressed at the proposition that termination, as planned from the outset, at
the end of a FTC could amount to redundancy (Association of University
Teachers v University of Newcastle).
72.
To what extent does the domestic legislation create an inroad into the
excepted category? Mr White’s position was that it was so as to include
all FTC’s other than those for three months or less. Section 282
demonstrated that, according to his submission. We were not persuaded by his
approach. It seems plain to us that the import of s.282 is that the provisions
of s.188 may apply to FTC’s which are for more than three months but,
equally, they may not. Section 195 provides the answer and it is that
Employment Tribunals require to ask whether, on the facts and circumstances of
the individual case(s) before them, dismissal was for a reason relating to the
individual concerned. It is, as Mr Napier submitted under reference,
relevantly, to the case of Abernethy, a matter of them
looking at and assessing the facts of the case, against that statutory test.
73.
We consider that the words ‘for a reason not related to the individual
concerned’ are, in the circumstances, clear and unambiguous. A reason relates
to the individual if it is something to do with him such as something he is or
something he has done. It is to be distinguished from a reason relating to the
employer, such as his (or in the case of insolvency, his creditors’) need to
effect business change in some respect.
74.
In this case, on the facts, at least one of the reasons for all four
dismissals was that the employee had agreed to a FTC accepting that it would
come to an end at a particular date or on the occurrence of a particular
event. Those were normally the Respondent’s reasons when a FTC came to an end
and none of the facts showed that any other reasons applied in any of these
four cases. Did those facts amount to reasons relating to the individuals
concerned? We are satisfied that they did. The Respondent’s reason was one
which relied on the individual employees’ own approach to their employment with
the Respondent. They had agreed at the outset that their employment would be
for finite periods defined by dates or tasks. The circumstances are thus not
of termination being imposed on them against their wishes; they are not, we
consider, within the category that the ECJ had in mind in their comments at
paragraph 50 of their judgment in Commission of the European Communities
v Portugal. They accepted at the outset that their FTC’s would
terminate at the defined point. The only means by which they could,
thereafter, continue in the Respondent’s employment would be if they were
offered and accepted another FTC, circumstances referred to as ‘renewal’ but,
properly analysed, involving two consecutive FTC’s. Unlike employees employed
under OEC’s, they did not have any reasonable expectation of employment for an
indefinite period.
75.
It follows that since we accept that the reasons for the four dismissals
in the test cases related to the individuals concerned, they were excluded, by
s.195 of TULRA, from the ambit of s.188.
76.
On the facts of the present case, the Respondent did not have a
multiplicity of reasons for dismissal. For completeness, we would, however,
add that we also accept Mr Napier’s submission that, given the wording of
s.195, for a dismissal to come within the ambit of s.188, it must be that none
of an employer’s reasons for dismissal may be related to the individual
concerned. We do not share the doubts expressed by the editors of Harvey in that regard.
Disposal
77.
We will pronounce an order upholding the appeal and the cross appeal to
the extent that it relates to Ms Fife, parties being agreed that, contrary
to the Tribunal’s finding, she was also dismissed. Although the oral evidence
that was given was principally in relation to Dr Harris, we accept that
there is a sufficient factual basis, as explained above, for us to determine
that, in all four test cases, the employees were dismissed for a reason
relating to them as individuals and that, accordingly, they were not dismissed
as redundant within the meaning of section 195 of TULRA.
