Burkett & Ors v Pendletons (Sweets) Ltd [1992] UKEAT 167_90_0702

EAT
Burkett & Ors v Pendletons (Sweets) Ltd
[1992] UKEAT 167_90_0702 · 1992-02-07
MR JUSTICE WOOD (PRESIDENT): The Appellants are Mrs Burkett, Mrs Beyga, Mrs Liversey, Mrs Bennett and Mrs Messham, they were all applicants in front of an Industrial Tribunal sitting at Liverpool in November 1989 under the Chairmanship of Mr L A Brown. The Respondents, who were their employers were Pendletons (Sweets) Ltd.At the hearing before the Industrial Tribunal the Applicants were represented by a full time trade union official, of the Transport and General Workers' Union, Mr Broadhead. The respondent employer was represented by John Pendleton, the Managing Director.In the Originating Applications the Applicants had alleged either unfair dismissal or unfair/constructive dismissal. Those were the two reasons amongst those five Applicants.In the Notices of Appearance it is quite clear that the ground, or the reason, for their dismissal was being put forward as based upon redundancy. The sole issues, so far as the reason was concerned, are set out in the Decision in paragraph 7, where the learned Chairman puts it this way:
"amongst the reasons in subsection (2) [Section 57 of the 1978 Act] is one relating to redundancy and that of course is the reason upon which the respondents rely. Mr Broadhead contests that there was a redundancy and alleges there was plenty of work available. He says the respondents were using redundancy as an excuse for removing rights afforded to employees by the Employment Protection (Consolidation) Act 1978."
So far as Mr Broadhead was concerned the matter was disputed on that basis. Mr Broadhead is sitting behind Miss Gill, who today appears on behalf of the Appellants, because what the Tribunal found was there had been an unfair dismissal but that it was on the ground of some other reason under Section 57(1)(b). They then looked at compensation and found that the Applicants were not entitled to any compensation.Mr Broadhead instructs through solicitors, Miss Gill, that during the evidence (we do not have the Notes of Evidence) a question had been put by the learned Chairman to the witness for the Respondents saying in effect, "this is not a redundancy really is it?" To which the answer had been "no". Mr Broadhead therefore felt that he was bound to succeed and the Tribunal retired. On returning to the Tribunal room, an oral decision was given and the reason for dismissal was given as some other substantial reason under Section 57(1)(b). Mr Broadhead was somewhat taken aback and requested full reasons which we now have before us. Those reasons, a unanimous Decision, in so far as are relevant today, start in this way:
"The applicants were unfairly dismissed but there will be a nil award of compensation because the Tribunal is satisfied it would not have made any difference if there had been consultation with the applicants."
It is fair to comment that consultation would be relevant had there been any finding of redundancy. The consultation would not be relevant, or is unlikely to have been relevant, on any question of re-organisation. One of the fundamental differences being that the workforce is likely to be retained under re-organisation and it is only if there is to be a reduction in the workforce under the suitable findings under Section 81 that there would be any loss of employment.The point is taken before us today that if Mr Broadhead had realised that the question of re-organisation was to be considered and argued then he would have submitted that there was no need for any reduction in the workforce and therefore that there had been a constructive or actual dismissal and indeed he might have argued that the way the re-organisation was done was not the best way. Therefore these Applicants might not have lost their employment, there would be no need for any reduction.The way in which this Appeal has been presented, and if we may say so, attractively presented, by Miss Gill, is this, that the case so far as Mr Broadhead was concerned was being fought on one issue, that the Tribunal came back and decided it on a different issue, that therefore the Applicants were unable and prevented from arguing the case upon the basis of the reasoning which in fact found favour with the Tribunal; there was therefore an error of law. She submits that on the finding that there was no redundancy that being the only reason put forward by the employer, the finding of unfair dismissal must stand, the reason must be because the employers had failed to prove the reason they put forward and that the matter must be remitted to an industrial tribunal for the compensation to be assessed on that basis. We agree with that submission but we must say why.There have been a number of cases dealing with this problem of what might be called, the analysis or definition of issues before industrial tribunals. The case to which we have primarily been referred is Murphy & Epsom College [1983] ICR 715 EAT. The facts need not be analysed in detail but the learned President of the Court at that time Mr Justice Browne-Wilkinson dealt with the problem of the reason behind the Decision at page 722 at D where he says this:
"Although there was obviously room for disagreement before the indsutrial tribunal as to whether the reason for dismissal was the employee's attempt to limit the range of the functions which he could be required to carry out or whether it was a genuine re-assessment and re-organisation of the works department in the light of changes in the heating installation, that dispute of fact has been settled by the findings of fact made by the majority. Accordingly on the face of it the industrial tribunal's decision is unimpeachable. Although there might be some doubt whether the reason for dismissal was properly classified as being redundancy or some other substantial reason, it must have been one or other of the two. The industrial tribunal having applied their mind to the relevant matters and reached their own conclusion whether the decision to dismiss was reasonable, there would be no jurisdiction in this court to override or vary their conclusion on the point. The difficulty in the case has arisen from the fact that before the industrial tribunal the employers never sought to justify the dimissal on the grounds that it was for `some other substantial reason.' Such case was not pleaded by the employers, nor was it argued. At the hearing before the industrial tribunal the point was not ventilated at all nor was any suggestion made by the industrial tribunal that they might be going to decide the matter on that ground."
Pausing there, that seems to us to be a situation which is almost identical with the present situation. He continues:
"Our initial reaction was that the failure at the hearing to bring out the fact that the reason for dismissal could be classified as "some other substantial reason" did not vitiate the decision. The function of the industrial tribunal was to find the employers' actual reason: the actual reason having been found it was, as the industrial tribunal considered, merely a matter of classification as to whether it was called redundancy or some other substantial reason. Providing it was one or other of the two, it was a potentially fair reason for dismissal. However, Mr Kelly for the employee, has referred to the decision of the Court of Appeal in Nelson v. BBC [1977] ICR 649."
The Tribunal then deal with the question of Nelson later on on p.723 at C the learned President continues:
"Although there are plain distinctions between the Nelson case and the present case in that, in the Nelson case, the industrial tribunal as the tribunal of fact had not found that there was `some other substantial reason' in our judgment it does have a bearing on this case."
then he refers to Gorman v. London Computer Training Centre Ltd [1978] ICR 394 and continues later:
"However, in our judgment, in the light of the Nelson case it is probably necessary that the matter should be expressly ventilated in the industrial tribunal before it reaches a decision on the matter so that the parties can have a full and proper opportunity to deploy their case on the matter. Natural justice requires that the party should not have a case decided against him on a ground on which he has not had an opportunity to be heard.
It is therefore not safe for us to approach this case on the basis that the reason for dismissal was either redundancy or some other substantial reason. It is accordingly necessary for us to consider whether, on the facts of this case, the employee could properly be held to be redundant."That case was appealed and in the Court of Appeal that particular passage in the judgment of the learned President was approved. The Court of Appeal Decision is [1985] ICR 80 , the relevant passage is in the leading Judgment of Sir Denys Buckley where at page 92 G after dealing with Nelson he says this:
"I agree with the observation of the appeal tribunal that natural justice requires that a party should not have a case decided against him on a ground on which he has not had an opportunity to be heard:"
Nelson was different and was distinguished. In Nelson this Court had interfered with the Decision of the Industrial Tribunal and had been held to have been disentitled so to do.There were two earlier cases one to which we have already referred and also the earlier case of Hotson v. Wisbech Conservative Club [1984] ICR 859, where the head note reads as follows:
"The employee, a barmaid at a private members' club, was dismissed for failing to give an adequate explanation for a reduction in bar profits and shortages in cash takings. She complained to an industrial tribunal that her dismissal was unfair by their notice of appearance the employers stated that the reason for the dismissal was gross inefficiency. In the course of the hearing of the complaint the industrial tribunal chairman suggested, and the employers' representative agreed, that the employers were in effect claiming that the employee had been dishonest. The employee's representative made no objection to the new allegation being made at such a late stage and the case proceeded on the basis of inefficiency and suspected dishonesty."
Pausing there, that situation is one which in the experience of those sitting in industrial tribunals can happen, really quite often, where the parties are not legally represented. The importance of the way in which is was handled in Hotson is this, that once a tribunal sees that the way in which the case is initially put on paper does not seem to be the way the evidence is evolving, then it is right to draw that to the attention of both the parties and try to help them to analyse the issues which are truly to be decided. That can only be laudatory and is helpful; thereafter, especially where there is no objection, the case can proceed on the analysis that everyone agrees is the true analysis of the case. If an adjournment is necessary, and justice so demands it, then that is a matter for the tribunal, but that is not the case with which we are concerned at present.The most recent decision on this topic, or related topic, is Hannan v. TNT-IPEC UK Ltd [1986] IRLR 165. That was a decision of a Division of this Court presided over by Mr

Justice Hutchison and the head note of that reads as follows:

"The appellant was employed as a regional sales manager. Following a merger, the business was reorganised and it was decided to appoint regional managers with responsibilities for sales and operations. Mr Hannan refused an offer of alternative employment and complained that he had been unfairly dismissed. The employers contended that the dismissal was by reason of redundancy. Neither in their pleadings nor during submissions before the Industrial Tribunal did they contend that the dismissal was for any other substantial reason. The Industrial Tribunal, however, found that the dismissal was not on grounds of redundancy but resulted from the reorganisation and that it was for a substantial reason of a kind such as to justify dismissal of an employee holding the position which the employee held within the meaning of s.57(1)(b) of the Employment Protection (Consolidation) Act. The Industrial Tribunal went on to find that the dismissal was not unfair."
The tribunal went on to find that the dismissal was not unfair. That case is again, on the facts as cited there, not totally dissimiliar. This Court examined Murphy and Hotson and reached a conclusion that the true reasoning behind these various cases is summarised in this way, and I refer to paragraph 22 of Hannan :
"It seems to us that one can summarise the distinction between the two lines of authority to which we have referred in this way, that where the different grounds are different labels and nothing more then there is no basis for saying that the late introduction, even without pleading or without argument, is a ground for interference on appeal; but that where the difference goes to the facts and substance and there would or might have been some substance or significant difference in the way the case is conducted, then of course an appeal will succeed if the tribunal rely on a different ground without affording an opportunity for argument."
That principle, there enunciated, is in our respectful judgment entirely apposite, having looked at the cases, but it seems to us that where parties are unrepresented or have lay representatives that it is desirable that the issues should be spelt out rather than merely left to a question of labelling.The respondents do not appear today and they have not seen fit to raise any argument contrary to Miss Gill. However it is our duty to put the other side and it might have been argued here today that the facts really were there as found by the Tribunal. This was a question of labelling.The way in which the matter has been argued to us makes it quite clear however that the approach of mere labelling can cause problems for those who are not legally trained and it seems to us that first of all, if there is any doubt about the reason, then it is better that reason should be stated in the alternative, and I have no doubt that those advising parties will soon realise that that is desirable. Secondly, that where, or indeed as soon as, it becomes apparent to the tribunal that the reason is likely to be different from the one stated in the documents, that matter should be raised; the issue should be re-analysed; it should be made clear to each side; each side should comment, object, seek adjournments in any way where justice so requires it, but thereafter all parties should be clear about what is being decided and then they can argue, readjust their evidence, if need be call further evidence. So in the end no one need come forward and say, "oh we thought it was rather different and we feel that we have not had a chance of putting our case as we might have wished to have done".In the present case there seems to us no doubt at all on the instructions of Miss Gill and the way she has put this case and indeed on the way she has submitted that Mr Broadhead might have argued the case differently, that there was prejudice and therefore we take the view that the respondents failed to prove the reason they alleged. The unfair dismissal finding must therefore stand, but the compensation and the basis of assessment of compensation must be very different from that which this Tribunal had in mind and therefore the issue of compensation must be remitted.Appeal allowed, and remitted to a different tribunal as directed by the learned Regional Chairman.