Ransomes Sims & Jefferies Ltd v Tatterton [1992] UKEAT 148_902_2802

EAT
Ransomes Sims & Jefferies Ltd v Tatterton
[1992] UKEAT 148_902_2802 · 1992-02-28
MR JUSTICE PILL: This is an appeal against a decision of the Industrial Tribunal sitting at Bury St Edmunds, Mr M B Schofield presiding, whereby they held that Mr Tatterton was entitled to a redundancy payment of £2,666 from his former employers Ransomes Sims & Jefferies. The Appellants claim that the tribunal erred in law in concluding that the Respondent's dismissal was by reason of redundancy.Mr Tatterton's complaint was of unfair dismissal. The Tribunal unanimously held that the Applicant was dismissed by reason of redundancy but that he was fairly dismissed by reason of redundancy. There is no cross-appeal against the finding that the dismissal was fair.The Appellants are manufacturers of professional grass machinery with factory premises at Ipswich. Mr Tatterton had been employed by them as a Security Officer since October 1978. By 1989 Mr Tatterton was working a day shift, Monday to Friday. As a result of a small and agreed revision in April 1989 he worked from 5 am to 2 pm on Mondays and from 7.45 am to 4 pm on Tuesdays to Fridays. There was also a certain amount of day shift work at the weekends for which he was paid overtime.By mid-1989 the Appellants needed to make economies. It was decided to end the contract with an outside Security company who had until then covered Saturday and Sunday nights. It was proposed that the existing Security staff would provide cover for the whole week. The amount of work available in the Security department actually increased as a result of the rearrangement. It was proposed to the 4 Security Officers that they would work under a two days on and two days off arrangement with 2 of them doing night shift from 5.45 pm to 6 am and the other 2 day shifts from 5.45 am to 6 pm. Mr Tatterton was to have worked on the day shift as he had previously.The proposal was acceptable to the other 3 Security men but not to Mr Tatterton. His difficulty as found by the Tribunal was "that his wife had a job in the evenings and, until this time, his hours of work had permitted him to be back in time to look after their 8 year old son while his wife went out to work. This would not have been possible under the new arrangements". In terms of finishing hours, his difficulty was that whereas previously he had finished by 2 pm on one day a week and 4 pm on four days a week he was now expected to work until 6 pm every day. If his wife could not go out to work, it meant a £50 a week loss to his family under the proposed arrangement.In spite of discussions between the parties, they were unable to come to terms. Mr Tatterton was dismissed in October 1989. He was paid for 11 weeks in lieu of notice but received no redundancy payment. The Appellants employed someone else to do the work which the Respondent declined.

The Tribunal found at paragraph 13:-

"The suggestion which was put to the Applicant [Mr Tatterton], which he was unable to agree, was a suggestion of a completely new system. The previous practice had been to employ an outside Security company to cover Saturday nights and Sunday nights. In the interest of economy the Respondents had decided - as certainly they were entitled to decide - to use their own staff on a 24 hour seven day per week basis. In our view this was the reason for the Applicant's dismissal. It was a decision which of course, as Mr Blackman points out, the Respondents were perfectly entitled to make. In making it however, in our view, they were saying that they no longer needed a Security Officer working Monday to Friday on a day shift, as the Applicant had been working. It is not merely a change of hours. As the notice of appearance suggests, the Respondents were introducing a completely different system. The Applicant found it impossible to accept the new system because of his own domestic arrangements".The Tribunal went on to find that the work offered to Mr Tatterton was suitable alternative employment and that there was nothing inherently unreasonable in these suggestions. Before stating that the Applicant was dismissed by reason of redundancy but was fairly dismissed for that reason the Tribunal added that "as far as the Applicant is concerned however, the times did not suit, and in our view, it was reasonable for him to refuse to enter into the suggested arrangement". We have already noted that there is no appeal against the finding that the dismissal was fair and we have only to consider whether the Tribunal's finding that the dismissal was by reason of redundancy is a tenable finding.At paragraph 11 the Tribunal, having referred to Sections 57 and 81 of the Employment Protection (Consolidation) Act 1978 correctly stated the relevant test as follows:-"For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to the fact that the requirements of the business for the employees to carry out work of a particular kind has ceased or diminished or are expected to cease or diminish".There is also an express reference in Section 81 to the "place" where a person is employed.In paragraph 11, the Tribunal also stated that "we have discussed, during the course of the hearing, the possibility that the dismissal was by reason of redundancy".Mr Jeans first submits on behalf of the Appellants that the Industrial Tribunal had no jurisdiction to order a redundancy payment because no such claim had been made by Mr Tatterton in his originating application. On Form IT1 he complained only of unfair dismissal and filled in the form on that basis. Section 91(1) of the 1978 Act provides that "any question arising under this part as to the right of an employee to a redundancy payment, or as to the amount of a redundancy payment, shall be referred to and determined by an Industrial Tribunal". Under Rule 1(1) of Schedule 1 to the Industrial Tribunals (Rules of Procedure Regulations) 1985 proceedings for the determination of any matter by a Tribunal "shall be instituted by the Applicant (or, where applicable, by a court) presenting to the Secretary of the Tribunal an originating application.....". Mr Jeans submits that in the absence of an Originating Application claiming redundancy, the Tribunal had no jurisdiction. Mr Jeans' second submission is that, if the Tribunal had jurisdiction, it was obliged to exercise its powers judicially. In present circumstances that involved at least asking Mr Tatterton, who appeared in person, whether he wished to pursue a claim for a redundancy payment, considering whether an amendment to his written application should be allowed and permitting the employers a sufficient opportunity to deal with the fresh claim. None of those steps were taken, it is submitted. Mr Jeans' third submission is that, on the facts as found, the Tribunal erred in law in concluding that Mr Tatterton was redundant. All that was involved in the rearrangement was a change of hours. There was no factual basis for a finding that the requirement for employees to carry out work of "a particular kind" had diminished. By reference to paragraph 13 of the full reasons, Mr Jeans disputes that the employers' Notice of Appearance suggests that they were introducing a completely different system.The meaning of what is now in Section 81 of the 1978 Act was considered by the Court of Appeal in Johnson v. Nottinghamshire Combined Police Authority [1974] ICR 171 (CA). Lord Denning MR stated at page 176F that "an employer is entitled to reorganise his business so as to improve its efficiency and, in so doing, to propose to his staff a change in the terms and conditions of their employment: and to dispense with their services if they do not agree. Such a change does not automatically give the staff a right to redundancy payments". Cairns LJ stated at page 178B:-
"Taking first the ordinary meaning of the words `kind of work' I do not think they would be generally understood to refer to hours of work. Two people, both engaged on similar clerical work, one of whom worked for only 3 hours in mornings and the other for 7 hours in afternoons and evenings, would be much more likely to say that they did the same kind of work than different kinds of work. They might well say `we do the same kind of work but our hours are different'. Then I find the reference in the paragraph to place of employment helpful in two ways. First, the express reference to the place where a person is employed shows that a change of place is not regarded as constituting a change of kind, for if it were there would be no need to make special reference to it. If `place' is not an element in `kind', it is difficult to see why time should be. Secondly, since attention has been specifically directed to place, one would have expected that if Parliament had intended time to be taken into account, it too would have been expressly mentioned.
I appreciate that two jobs which have the same description may really involve different kinds of work, and that the difference in kind may be linked with a difference in time. Thus it would be arguable that the work of a night nurse is different from that of a day nurse.Where, as in the cases we are considering, the actual tasks to be performed are unchanged and the total hours are unchanged and the only difference is between the parts of the day when work is done and the number of days over which the work is spread, I am of the opinion that the kind of work remains the same".In Lesney Products & Co Ltd v. Nolan [1977] ICR 235 , a case in which the finding of the Industrial Tribunal was reversed, Lord Denning MR stated at page 238G that:-"Nothing should be done to impair the ability of employers to reorganise their workforce and their times and conditions of work so as to improve efficiency. They may reorganise it so as to reduce overtime and thus to save themselves money, but that does not give the man a right to redundancy payment. Overtime might be reduced, for instance, by taking on more men: but that would not give the existing staff a right to redundancy payments. Also when overtime is reduced by a reorganisation of working hours, that does not give rise to a right to redundancy payment, so long as the work to be done is the same".We were also referred to the decision of the Employment Appeal Tribunal in Scotland in Macfisheries Ltd v. Findlay [1985] ICR 160, Waite J presiding. The Tribunal declined to reverse the Industrial Tribunal's decision that on the facts the Applicants were redundant, stating at page 163E that"we do not think that the Johnson case is to be regarded as laying down any hard and fast principle that a difference in the hours worked is incapable of effecting a difference in the kind of work being done".Miss Eadey, for the Respondent, seeks to uphold the decision of the Industrial Tribunal and disputes all three of Mr Jeans' submissions. The Tribunal should not readily be deprived of jurisdiction (Coates v. Crispin [1973] ICR 413 [NIRC]). The Appellants should have realised in the course of the hearing that the Tribunal were considering the question of redundancy. Miss Eady accepts that a mere change in hours would not change the "kind" of work but the Tribunal found and were, she submits, entitled to find that a "completely new system" had been proposed and this could be held to involve a change in the kind of work. In reply to that point, Mr Jeans submits that the Tribunal have wrongly equated new working hours with a new system and also have misdirected themselves in considering whether there was a different system rather than in whether there was a different kind of work.In our judgment, the decision of the Industrial Tribunal cannot stand. The appeal will be allowed and the question of entitlement to a redundancy payment remitted to a differently constituted Tribunal. A fair hearing was required and we are not satisfied that the employers were sufficiently put on notice that a finding of redundancy was contemplated. The notes of evidence do show that the Chairman questioned the employers' witness about redundancy and he replied that "no redundancy payment was considered". The employers' representative, Mr Blackman of an Employers' Association, did submit that there was no redundancy but we do not know whether this was in response to a request for assistance from the Chairman. Chairmen, like judges in other jurisdictions, do sometimes ask questions and seek information about points not raised by either of the parties. They do not thereby necessarily indicate that they are contemplating making an award upon the issue raised. In the absence of a claim for a redundancy payment, it was essential for the Tribunal at least to make plain to the parties that a finding of redundancy was contemplated and in terms to give each of the parties an opportunity to call further evidence and make further representations. There is no evidence that that was done. The fact that, as Mr Jeans points out, there is under Section 91(2) a presumption of redundancy adds weight to the submission that employers should be given notice of a claim of redundancy. The employers might well have wished to make further representations upon the facts and the law had they been given notice that a finding of redundancy was contemplated. It is also possible that the Applicant would have wished to make further representations.In those circumstances, we do not find it necessary to decide the jurisdictional question. At or before the rehearing there may be applications on behalf of the Applicant which may (or may not) affect the outcome on that point.That being so the question which we have had to consider is whether we should reverse the decision of the Industrial Tribunal or remit the question whether the Claimant is entitled to a redundancy payment for rehearing. The test to be applied by the Industrial Tribunal is that which emerges from the judgments in the Court of Appeal in Johnson . We also remind ourselves that the Industrial Tribunal are the Tribunal of fact and we should reverse their conclusion upon the facts only if it is perverse and not a permissible option on the evidence. Bearing that in mind but more particularly the unsatisfactory nature of the hearing and also our doubt whether the correct test was applied, we have decided upon a remission. We reach that decision with reluctance having regard to the lapse of time since the original hearing.