TNT Express (UK) Ltd v Downes & Ors [1993] UKEAT 357_92_2306

EAT
TNT Express (UK) Ltd v Downes & Ors
[1993] UKEAT 357_92_2306 · 1993-06-23
MR JUSTICE WOOD (PRESIDENT) : The purpose of this appeal is to decide whether a decision of the Employment Appeal Tribunal in Courtaulds Northern Spinning Ltd v. Moosa [1984] ICR 218 should be followed in future. The facts in that case were not dissimilar from those before us. Based upon a concession by both counsel then appearing, this Tribunal decided a principle which is expressed in two passages in the judgment. At p.224B the following appears:
"...It has always been accepted that the general intention of Parliament lying behind section 62 of the Act is to prevent industrial tribunals from going into the merits or demerits of collective industrial disputes. ..."
and again at G on the same page:
"... Section 62 of the Act of 1978 excludes industrial tribunals from considering whether an employer acted reasonably in dismissing an employee engaged in industrial action."

and later the conclusion is reached

"We therefore reach the conclusion that it is not possible for an industrial tribunal to hold under section 74(6) that the industrial action in which the employee was taking part (whether or not it was in breach of contract) in itself justifies a reduction in compensation, since an industrial tribunal is unable to determine whether or not, and to what extent, it is just and equitable to make such reduction."
There were a number of applications which were heard together and the appeal before us concerns some of those. We are not asked to differentiate between them nor to consider any individual facets of the facts which might ultimately become relevant.The issue can be stated thus - where an employee has been dismissed for engaging in industrial action and when the issues of compensation are being considered, is an Industrial Tribunal entitled to examine the facts and circumstances surrounding that dismissal when considering any reduction in compensation, whether under S.73(7B) or S.74(1) or (6).The learned Regional Chairman himself presided over all these applications and at each stage. He felt - and rightly - that he was bound by the decision in Moosa , but it is clear from the decision of the Industrial Tribunal that he and the members found it difficult to understand and accept the reasoning in that case, the basis of which we have set out above. The precedent principle is important and was duly followed.It is accepted that if the reasoning in Moosa is sound, it must also apply throughout the 1978 Act and this includes S.69(5)(c), and S.69(6)(c).

The facts

TNT UK Ltd (the Company) carries on the business of express parcels delivery. It has a number of depots throughout the country and operates a complex network system of collections and deliveries whose efficiency depends upon meeting tight delivery commitments, which are time-sensitive. The present case concerns the Cannock depot where the Company employs office staff, loading-bay operatives and drivers. A closed shop is operated by the Transport & General Workers Union (the TGWU). In 1989 the Company was faced with the need to stem very substantial losses suffered at that depot and to ensure a quality of service required by its customers. The situation required urgent measures. Accordingly between late 1989 and November 1990, the Company held protracted consultation and negotiations with the TGWU concerning changes in the terms and conditions of employment of its staff at the Cannock depot. These discussions broke down during the latter part of November 1990.As a result of this the Company, on 18th December 1990, issued to all affected employees, a written notice of changes in terms and conditions of employment effective at the expiry of their respective notice periods.On 21st December 1990 the senior shop steward at the Cannock depot, Mr Alf Cooke, was suspended for calling a meeting of employees at a time which the Company believed was designed to cause it maximum disruption in its business. This meeting had already been refused by the Company for operational reasons, and a less disruptive and alternative time had been offered. Some staff, however, stopped work for a short time to attend that meeting and this caused the predicted disruption.On 3rd January 1991 the TGWU called a further meeting of union members off site. This was again at a time that would cause considerable disruption to the Company's business. The Company asked that the meeting took place on site and that it be put back 1 1 / 2 hours to lessen the disruption. Indeed, the Company offered to pay the employees at the appropriate time rates. This was refused. As a result the Company wrote to all employees telling them that those attending the meeting and not adhering to normal working practice would be considered to be in breach of contract and would render themselves liable to dismissal.At meetings with employees on 9th and 10th January, senior managers of the Company warned that the strike ballot recently issued by the Trade Union was illegal, and that participation in any proposed industrial action would result in summary dismissal.On 20th January 1991 a meeting of the TGWU decided that they would take industrial action as a protest against the disciplining of Mr Cooke. His disciplinary meeting was due to take place on 21st January starting at 10 a.m. It was agreed that the employees at work at that time would cease work for one hour, and that when others arrived later for work, they would then take similar action.This is in fact what took place on 21st and 22nd January 1991.The management of the Company was extremely concerned about the effect of this industrial action upon its business and indeed the effect upon the Company's standing with its customers. It took legal advice and decided that it must regain control and assert its authority. It had to take a firm line and employees would be dismissed. Those employees of course had previously been warned that this would take place. In the light of the advice which was received it meant that all participating employees were to be dismissed. This was carried out and all those involved in industrial action on 21st and 22nd January 1991 were dismissed.The total staff at Cannock was 168, 138 of whom were dismissed.The first two sub-sections of S.62 of the Employment Protection (Consolidation) Act 1978 (the 1978 Act) read as follows:"S.62-(1) The provisions of this section shall have effect in relation to an employee [(the "complainant")] who claims that he has been unfairly dismissed by his employer where the date of dismissal - (a)the employer was conducting or instituting a lock-out, or (b)the [complainant] was taking part in a strike or other industrial action.(2) In such a case an industrial tribunal shall not determine whether the dismissal was fair or unfair unless it is shown -(a)that one or more relevant employees of the same employer have not been dismissed, or (b)that any such employee has, before the expiry of the period of three months beginning with that employee's date of dismissal, been offered re-engagement and that the complainant has not been offered re-engagement.(3) ...

(4) ..."

From a reading of those provisions it follows that at that stage in the history of these facts, none of those dismissed by the Company for what was clearly industrial action could have brought proceedings for unfair dismissal, even though the provision of S.54 applied and any qualification period had been served.Shortly after those dismissals, two long-standing employees approached the Company explaining their regret for having taken part in the industrial action on the advice of the Trade Union and expressing their desire to be re-engaged.The Company took legal advice and were advised that selective re-engagement, as in the case of those two long-standing employees, would invoke the provisions of S.62(2) of the 1978 Act and its consequential effect, namely that all those dismissed would be able to bring proceedings. With full knowledge of this advice the Company nevertheless resolved to accommodate these long-standing employees, who were re-engaged on 29th January 1991.Subsequently the Company advertised in a local newspaper that they were recruiting and invited those interested, without distinction as to whether they had been dismissed or not (or were former employees), to attend interviews at a local hotel on two days in mid-February 1991. Thirty-nine of the previous employees who had been dismissed were offered re-employment and 35 accepted. Of those re-employed some were shop stewards.

The applications

Arising out of these facts 21 applications were made to an Industrial Tribunal alleging unfair dismissal. Eight of these were dismissed. In one the dismissal was found to be unfair. In the remaining 12 the Company, through a lay representative, conceded that the dismissals were unfair. It was in those cases that compensation was being considered. Whether or not this concession was correctly made, the Company - quite rightly - stand by it. We were asked to ignore this procedural background and to deal with the issue placed before us.In Moosa the dismissal took place on 8th June 1979. Proceedings had been prolific and the final appeal was only heard in October 1983. This Tribunal was considering what has been called "contributory fault" and under the wording which then existed. Section 73 of the Act deals with the basic award and S.74 with the compensatory award. At that time S.73(7) read as follows:
"(7) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall, except in a case where the dismissal was by reason of redundancy, reduce the amount of the basic award by such proportion as it considers just and equitable having regard to that finding."
Section 74(6) was in identical wording except that it did not include the exception relating to redundancy.Mr Rawley, for the Respondent/Applicants, submits that the concessions made by counsel in Mooosa were entirely correct. His reasoning runs thus - Before the 1971 Act the only remedy was for wrongful dismissal. If one follows the history of S.62 through the Industrial Relations Act 1971, the Trade Union & Labour Relations Act 1974, and the Employment Protection Act 1975, its purpose has remained the same. It forbade claims for unfair dismissal save in certain circumstances and that was so whether the background was one of a "lock-out" by the employer, or "industrial action" by an employee. It follows therefore that Parliament intended that the details of industrial action should not be examined by an Industrial Tribunal. It should not seek to establish the rights and wrongs of industrial dispute. He submitted that an Industrial Tribunal could perhaps take into account such behaviour as deliberate sabotage, but such action is to be distinguished from "industrial action". Thus, it follows, he submits, that a dismissal for industrial action is rendered automatically unfair and the fact that such circumstances cannot be considered carries through logically into sections 73, 74 and indeed 69 of the 1978 Act. He further submitted that a Tribunal could, in any event, only address itself to the reason for the discrimination under S.62(2)(a) or (b), not the reason for the dismissal.This latter point was decided against him in Moosa and we are satisfied to follow Moosa in that respect.Secondly, and somewhat hesitantly, Mr Rawley submits that the wording of S.73(7B) and 74(6) do not mention any activity or fault on the part of an employer, and therefore it would be wrong to consider the conduct of an employee without considering that of the employer.We do not find much assistance from this second submission, as it seems to us clear that when considering the conduct of an applicant employee "in all the circumstances of a case", it would be relevant to consider the way in which the employer has behaved. It must not be forgotten that by this stage in its deliberations, an Industrial Tribunal would have found the applicant to have been unfairly dismissed.

The purpose of S.62

Until 1983 there was no clear indication. The earliest reference which we have traced is in Heath v. J F Longman (Meat Salesmen) Ltd [1973] ICR 407 , where Sir Hugh Griffiths commented. His comments were referred to by Mr Justice Phillips in Thompson v. Eaton Ltd [1976] ICR 336 . Sir Hugh comments generally on the predecessor of S.62 at p.341C as follows:
"It is difficult to reach any concluded view about the purpose of these provisions, particularly since (as has already been pointed out) they find themselves in two such different Acts. But, on reflection, it is perhaps not so surprising that the Act of 1974 should exclude from entitlement to compensation for unfair dismissal men who were on strike at the date of dismissal, and who were dismissed for that reason - for, otherwise, an employer must always submit to the demands of the strikers, go out of business or pay compensation for unfair dismissal. Furthermore, the problem seldom arises in practice, for it is the common expectation of employers and employees that one day a strike will end and the men return to their work."
Mr Justice Phillips returned to this question in Gallagher v. Wragg [1977] ICR 174 . After referring to the earlier statutory history he says at p.178G:
"It seems to us that, when one considers the matter in the round, the reason why paragraph 8 of Schedule 1 to the Act of 1974 has been preserved as amended is clear enough. Were it not so, and if an employer during a strike could only dismiss an employee at the risk and expense of being found liable to pay compensation for unfair dismissal, he would as a matter of equity have to be given by the legislation some rights designed to protect his position when, as sometimes would happen, he was confronted by an unreasonable strike. But, of course, the whole policy of the law as enshrined in the Act of 1974 and the later enactments is to withdraw the law from the field of industrial disputes. There is a kind of legal laissez-faire or neutrality as soon as an industrial dispute breaks out. The continued provisions of paragraph 8 are in one sense the price of making that possible."
As will have been observed these decisions were based upon earlier statutory provisions. The only case decided upon the wording of S.62, in its present form, is a decision of the Court of Appeal in Power Packing Casemakers Ltd v. Faust [1983] ICR 292. In giving the leading judgment Stephenson LJ examines the statutory history of S.62 from its origins in the 1971 Act. (We will refer to the present S.62(2((a) and (b) as the `discriminatory factors').Put very shortly, prior to the 1975 Act an employee, who was dismissed on the grounds of industrial action, was not to be considered unfairly dismissed unless the discriminatory factors were established. By the 1975 Act the position was radically changed and an Industrial Tribunal was barred from considering whether a dismissal was fair or unfair unless a discriminatory factor was established.The learned

Lord Justice therefore concludes thus at p.299C:

"So industrial tribunals, presented with a complaint of unfair dismissal by an employee alleged to have taken part in industrial action, had from 1971 to 1974 to consider that action and the provisions against victimisation in the course of determining whether he had proved his complaint, but have from 1975 to 1978 and since to consider them in order to determine whether he could even try to prove it."

Lord Justice Purchas in his judgment at p.302A says this:

"... Mr Carr submitted ... that ... therefore the words of section 62 of the Act of 1978 could be given their plain and ordinary meaning, namely, once it was established that the employee was, at the date of his dismissal, engaged in a strike or other industrial action, the industrial tribunal could only enter upon a consideration of the merits of the case if it could be shown that the employee had been subjected to discriminatory treatment in the matter of dismissal or re-engagement. I agree with this submission."
Thus, we have clear guidance on the purpose of S.62(1) and (2) of the 1978 Act.None of these cases was cited to the Employment Appeal Tribunal in Moosa (supra).That this is the correct understanding also seem to us to follow from the wording of S.62(2) itself when compared with the earlier provisions. Until 1975 an Industrial Tribunal could consider fairness. Thereafter it could not consider anything unless there was "discrimination". But if - to paraphrase S.62(2) - it is shown that a discriminating factor exists, then the Tribunal may and indeed should consider fairness or unfairness.This reasoning, it seems to us, is also supported by the provisions of S.62(3) which refers to the reason or principal reason for the purposes of S.57 and it is under that section that the Industrial Tribunal is concerned with the reason for dismissal and with fairness. It reads:
"62-(3) Where it is shown that the condition referred to in paragraph (b) of subsection (2) is fulfilled, the provisions of sections 57 to 60 shall have effect as if in those sections for any reference to the reason or principal reason for which the complainant was dismissed there were substituted a reference to the reason or principal reason of which he has not been offered re-engagement."
Thus, in our judgment, the Court of Appeal has shown the purpose behind S.62 and its effect. It goes to jurisdiction. The words used are "shall not determine". If through voluntary or involuntary "discrimination", which, as in the present case, could be for humanitarian or sound reasons in individual cases, an Industrial Tribunal is given jurisdiction, then it must carry out its statutory function and seek to do that which is fair, just and reasonable between the parties. All the surrounding circumstances will be examined as in any other case.The concession made in Moosa , the premise upon which the decision rests, is in our judgment unsound.It is conceded that if this is so then the appeal must be allowed as the same principle must be applicable throughout the 1978 Act.Section 73 has been amended by subsequent legislation and in particular subsection (7) has been redrafted in three paragraphs:
"(7A) Where the tribunal finds that the complainant has unreasonably refused an offer by the employer which if accepted would have the effect of reinstating the complainant in his employment in all respects as if he had not been dismissed, the tribunal shall reduce or further reduce the amount of the basic award to such extent as it considers just and equitable having regard to that finding.
(7B) Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) ... was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly.(7C) Subsection (7B) shall not apply where the reason or principal reason for the dismissal was that the employee was redundant unless the dismissal is to be regarded as unfair by virtue of section 59(a), and in that event shall apply only to so much of the basic award as is payable because of subsection (4A)."Section 73(7C) expressly excludes consideration of conduct under S.73(7)(b) in cases of redundancy (see also Trade Union and Labour Relations (Consolidation) Act 1992, Schedule 2, paragraph 17 and Section 156). This express exclusion would tend to indicate that save for it, S.73(7)(b) is of general application. The wording of the subsections and subsection 74(6) refers to "any conduct", "any action", "any extent". The wording of S.69(6)(c) is also of wide and general importance. Moosa decided that "industrial action" could not fall within that wide wording.If, as is urged upon us, we were to accept the premise in Moosa with the consequence that Mr Rawley puts forward that dismissal for industrial action would become automatically unfair, it is relevant to look at the Act as a whole. First of all if it had been so intended it could easily have been so stated and there are other sections of the Act which identify those situations in which the reason for dismissal is to be deemed to be automatically unfair. Secondly, it would create a new head of automatic unfairness. Thirdly, so to construe S.62 would indicate that that section should determine the proper construction of other sections of the Act, where the wording seems to be clear. Fourthly, so to find would be inconsistent with other sections, for instance, S.57(2)(b) and indeed S.69. Fifthly, it would preclude an employer from relying upon a significant fact when defending an unfair dismissal claim based upon industrial action where that industrial action is wholly unmerited. An example given during submissions was where a machine is passed by experts as safe and where a group of employees nevertheless indulges in industrial action because it disagrees. It may even in an extreme case be one where the trade union itself agrees with the expert. Sixthly, although the motive for industrial action may in many cases be immaterial to the issue of unfairness -for instance whether or not a claim for an increased wage is justified - nevertheless it seems almost impossible to define upon which side of a given line a particular set of facts may lie and it must be left to the good sense and experience of industrial tribunals to reach a fair and just conclusion on the issues before it. Lastly, to deprive an employer of any right to argue upon the basis of S.57(3) would militate against a sympathetic or humanitarian attitude in situations akin to those in the present case.We are seeking to decide the intention of Parliament in the wording of the statute - by no means always a simple task - but the words are clear. We are being encouraged in effect to insert words to give a purposive construction.The earlier predecessors of S.62 were considered in Stock v. Frank Jones (Tipton) Ltd [1978] ICR 347 in the House of Lords. Their Lordships, and in particular Viscount Dilhorne and Lord Simon of Glaisdale warned against the use of what Viscount Dilhorne described as the now fashionable talk of a purposive construction. He said:"It is now fashionable to talk of a purposive construction of a statute, but it has been recognised since the 17th century that it is the task of the judiciary in interpreting an Act to seek to interpret it "according to the intent of them that made it" (Coke 4 Inst. 330).If it were the case that it appeared that an Act might have been better drafted, or that amendment to it might be less productive of anomalies, it is not open to the court to remedy the defect. That must be left to the Legislature."In our judgment the wording is clear, the intent is clear, This appeal must be allowed and these cases remitted to the same Industrial Tribunal for assessment of compensation with the guidance from this judgment that circumstances surrounding the industrial action are relevant to its consideration.Leave to appeal.