Gardener v Haydn Davies Catering Equipment & Anor (1988) Ltd [1992] UKEAT 8_90_0901

EAT
Gardener v Haydn Davies Catering Equipment & Anor (1988) Ltd
[1992] UKEAT 8_90_0901 · 1992-01-09
MR JUSTICE WOOD (PRESIDENT): This is an Appeal by Mrs Gardener from a Decision of an Industrial Tribunal sitting at Carmarthen under the Chairmanship of Mr Bird who on the 12th September 1989 heard an application by her that she had been unfairly dismissed and was entitled to a redundancy payment.There were two Respondents, for the purposes of the record their names have changed somewhat since the original hearing but we will refer to them as the First and Second Respondent.In April 1988 a management team purchased the business of a Company known as Haydn Davies Catering Equipment Ltd, and as part of that arrangement it formed the First Respondent Company. The Applicant, Mrs Gardener, together with a Mr Norbury were sales representatives, in particular in Haverfordwest. There was a director of the new Company, who was actually the general manager at Haverfordwest, he was Mr Peter R Bond.The Company which had been formed in the Spring of 1988 got into financial trouble and Mr Bond called Mrs Gardener to his office in the early part of November 1988 saying he had dreadful news, that he was afraid that he was contemplating making her redundant. She said that she wanted that dismissal confirmed in writing and this was done in a letter which reached her on the 4th December. In fact she worked until the 9th December because some holiday entitlement which she had exceeded. She left on that date, dismissed on the basis of redundancy. It was shortly after that that she found out that there were some others interested in the business and the Originating Application was issued on the 3rd January 1989.Her case on unfair dismissal was on two grounds; first of all the unfair selection for redundancy and secondly that the consultation with her was insufficient and unreasonable. The Tribunal referred to the case of Polkey v. A E Dayton Services Ltd [1988] ICR 143; they referred to a passage in the speech of the learned Lord Chancellor, Lord Mackay of Clashfern and directed themselves in accordance with that Decision.In paragraph 24 of a very careful Decision the Tribunal weigh up all the factors which were put before them on behalf of Mrs Gardener as to the selection, and after all there was only one other person, Mr Norbury, who was involved in the discussions. In the end they come to the conclusion that the dismissal was fair, it was on the grounds of redundancy and it was fair. Now those are issues of fact. They directed themselves perfectly properly in law and we can find no reason to disturb that Decision.There had been an earlier issue decided by the Tribunal under the Transfer of Business Provisions and it is clear that after examining the whole situation, having accepted the evidence of Mr Peter Bond, as they did, both on the unfair dismissal and in connection with the transfer, they found in paragraph 16, unanimously, that the reason for the dismissal had nothing to do with the relevant transfer and that the Second Respondents who had ultimately taken over the business in the early part of 1989 could not be responsible for the consequences; they were dismissed from the proceedings. They are here before us today because of the submission of Mr McGrath that in certain circumstances, if the dismissal was unfair and re-instatement was the remedy, then there might be some right over against the Second Respondents. We cannot think in the circumstances there would have been re-instatement in any event, but in the light of a finding of fair dismissal there is no liability whatsoever in the Second Respondents.The last matter before the Tribunal is the one that has caused us some concern, Mrs Gardener claimed a redundancy payment, there was clearly a redundancy, but before the redundancy payment could be calculated the continuous period of service had to be estimated. There had been a number of transfers of "the business" between the 6th August 1984, when Mrs Gardener had first been employed and the 9th December 1988 when she was finally dismissed. Those transfers were between the West Wales Supplies and Carlisle Trust and Hadyn Davies Equipment. On the 3rd April there was a transfer between The Carlisle Trust Ltd and Haydn Davies Catering Equipment Ltd. Obviously Mrs Gardener was a valuable employee and as far as we can see has had a happy relationship with those for whom she worked; she was clearly successful. On the 2nd April Mr Jones of the Carlisle Trust Ltd took a course which many would commend as responsible, saying that there was to be the transfer and that the Company had been able to ensure continuity of employment; there was to be the transfer to Haydn Davies Catering Equipment Ltd on Friday, 3rd April. Then it continues with these words in the letter of the 2nd April;
"We have agreed that we will accept the redundancy liability that would have accrued to you during your period of employment with West Wales Hotel Supplies Limited, although as I have said there will be continuity of employment.
Accordingly during the course of the next seven days you will be receiving a cheque in the sum of £930.00 and which is the money that would have been due to you had your employment with West Wales Hotel Supplies Limited been terminated on 3rd April next."The latter then deals with other matters. There is the announcement of a payment on the 2nd April; the termination of the employment was going to be on the 3rd April but there was going to be immediate continuity of employment.The sum of £930.00 was received. The Tribunal were faced with an argument from Mr McGrath that that payment should not be taken into account at all in any calculation of the claim for redundancy payment because of the provisions of paragraph 12 of Schedule 13 of the Employment Protection (Consolidation) Act 1978. There is a Decision of this Court by which the Tribunal felt that it was bound, namely Rowan v. Machinery Installations (South Wales) Ltd [1981] ICR 386, which decided that for the purposes of paragraph 12 of Schedule 13 which indicates that where a redundancy payment has been made in respect of a previous period of service that period of employment should not count towards the later calculation of the redundancy payment, a period of employment should only be broken if the redundancy payment was a true liability at the time it was paid, in other words that it was a true statutory redundancy payment. The Tribunal found that they were bound by that and that in the present circumstances they decided that there was no liability at the time the letter was written on the 2nd April 1987, because under Section 84(1) of the 1978 Act there was going to be immediate continuity of employment. They felt therefore, that their period of calculation for the present case stretched back to the 6th August 1984. However, they pointed out that in the case of Rowan , to which we do not feel we need refer in any greater detail at the present juncture, the Applicant in the view of this Tribunal, presided over by Mr Justice Slynn as he then was, had very properly given credit for two payments which he had received which purported to be payments for redundancy.Thus, when coming to their calculations this Industrial Tribunal took the period from the earlier date in accordance with Rowan despite the letter of the 2nd April and they calculated the redundancy payment which the Applicant was entitled to receive as £984.00. That was a statutory calculation and that was the sum of a redundancy payment that she was due. But they add this, and I am quoting from paragraph 26:
"We deduce that there is an obligation on an applicant to give credit for monies already received - to her evident advantage - when those monies were clearly intended to provide for redundancy liability (albeit potential) accrued to that date."
Mr McGrath has argued that the statutory entitlement to a redundancy payment is not subject to deduction, it is under Section 81 to be calculated under Schedule 4, 13 and 14 and if one looks at Schedule 4, paragraph 5, there is an indication there are circumstances, situations in which it is possible to reduce the redundancy payment and those situations are to be found in Sections 85(4), 92(3) and Section 110. Those situations do not apply in the present case, therefore, there is no reduction in the sum of £984.00. Is it just and equitable that the Applicant should receive more than £984.00 when clearly she has received the sum of £930.00 which on the face of the document was intended to cover any liability for redundancy whether then or in the future? We cannot think that it is just, nor indeed do we think it in the best interests of industrial relations that this sort of point should be encouraged. As was pointed out by an Industrial Member, the letter is clear, the money was accepted on the basis of the letter in a trusting way and anyone would be surprised that that sort of attitude should be taken in the light of the transaction which took place and the happy relationship which was existing at that time. We can see no merit in that point.This Appeal is dismissed.