Milton v East Dorset Health Authority & Anor [1993] UKEAT 364_90_1705

EAT
Milton v East Dorset Health Authority & Anor
[1993] UKEAT 364_90_1705 · 1993-05-17
HIS HONOUR JUDGE HAGUE QC Miss Milton was formerly employed by the East Dorset Health Authority as a Domestic Supervisor at Douglas House Hospital, Southbourne, Bournemouth. That hospital closed on 22nd January 1989 and Miss Milton was accordingly made redundant. She was offered another post as a Domestic Assistant at Christchurch Hospital, Bournemouth. That was at a lower grade, but in accordance with the Whitley Council Terms and Conditions of Service her pay was to be protected for four years. Miss Milton refused that post, and claimed a redundancy payment. Her claim was resisted on the ground that the offer was one of suitable alternative employment which she had unreasonably refused.Miss Milton's claim for a redundancy payment fell to be considered under section 45 of the Whitley Council Terms. These form part of the contracts of service of National Health Service employees, and having been approved by the responsible Minister under S.111 of the Employment Protection (Consolidation) Act 1978, they took effect at the relevant time in place of the usual provisions as to redundancy payments contained in Ss.81 et seq of the 1978 Act: see S.99(1)(c), now repealed as from 1st April 1991. Miss Milton made a claim to an Industrial Tribunal under the special provisions of S.112.Section 45 of the Whitley Council Terms is a long and detailed provision which sets out a redundancy scheme bearing a close resemblance to the 1978 Act provisions, but modified appropriately to meet the circumstances of the National Health Service. As was pointed out in a reported decision to which we shall refer, in some respects the provisions of section 45 are wider in scope than those of the 1978 Act. The relevant paragraphs for present purposes are paragraphs 7 and 8. Paragraph 7 has the heading "EXCLUSION FROM ELIGIBILITY" and reads so far as material as follows:
"7. Employees otherwise eligible shall not be entitled to redundancy payments under these arrangements if they:-
...7.4unreasonably refuse to accept or apply for suitable alternative employment with the same or another Health Service Authority in great Britain; or

..."

Paragraph 8 is headed "SUITABLE ALTERNATIVE EMPLOYMENT" and the material parts read as follows:"8. "Suitable alternative employment", for the purposes of paragraph 7, refers to both the place and to the capacity in which the employee would be employed. The following considerations shall be applied in deciding whether a post is suitable alternative employment and whether it was unreasonably refused:8.1 Place ...8.2 Capacity . Suitable alternative employment may not necessarily be in the same grade; the employment should be judged in the light of the employee's qualifications and ability to perform the duties. Nor need it be at exactly the same pay. A post carrying salary protection for the employee should on that fact alone be treated as suitable in capacity."Paragraph 8 thus spells out in some detail the "considerations" which have to be applied both in deciding whether a post is suitable alternative employment and in deciding whether the offer of the post has been unreasonably refused.These provisions fall to be contrasted with S.82(5) of the 1978 Act which reads as follows:
"(5) If an employer makes an employee such an offer as referred to in sub-section (3) and either - (a) the provisions of the contract as renewed or the new contract, as to the capacity and place in which he would be employed, and as to the other terms and conditions of his employment, would not differ from the corresponding provisions of the previous contract; or (b) the first mentioned provisions would differ (wholly or in part) from those corresponding provisions, but the offer constitutes an offer of suitable employment in relation to the employee;
and in either case the employee unreasonably refuses that offer, he shall not be entitled to a redundancy payment by reason of his dismissal."By their decision entered in the Register on 9th May 1990 an Industrial Tribunal sitting at Southampton with considerable reluctance reached the decision that Miss Milton's claim to a redundancy payment failed by reason of her refusal of the offer of the alternative post. In paragraph 5(m) of their Reasons the Tribunal set out Miss Milton's reasons for her refusal as follows:
"Miss Milton's refusal was because she had started her career as a Domestic Assistant at Christchurch, had become a Nursing Auxiliary, had been redeployed as a Domestic Supervisor to Douglas House, and was now to find herself 16 years later going back to Christchurch as a Domestic Assistant. Secondly, she would be working with other Domestic Assistants earning less than her, which, from her experience as a supervisor, she regarded as an unsatisfactory form of industrial relations. Thirdly, that she would be working there alongside some who had been her subordinates. She had no particular travelling problem, in fact she lived nearer Christchurch Hospital than she did Douglas House, indeed it would appear to be 10 minutes from her home."
Pausing at that point, the first and third of those reasons are matters which are personal to her. The second reason is not really personal to her, because it would apply in every case where an employee is downgraded but her salary is protected.The Tribunal set out their reasons for dismissing Miss Milton's claim in paragraph 12 of their Reasons as follows:
"... In the terms of the Employment Protection (Consolidation) Act 1978, and the cases which have been decided under the redundancy provisions of that Act, we would have had no hesitation in saying that the alternative post offered to Miss Milton was not suitable. Not only was it a lowering of grade and status but the circumstances in which she was going to be placed would really, we feel, have made difficulties for everybody. What then is the position under the Whitley Council Conditions of Service. She cannot and does not argue that the offer was not suitable or that she was reasonably refusing it by reason of the place. It is simply a matter of the capacity. We bear in mind that according to paragraph 8 of section 45, the test for both suitability and unreasonable refusal requires the same two considerations to be applied. A method which does not endear itself to any Tribunal who is used to dealing with the matter under the 1978 Act. As to capacity we draw attention to the last sentence of the paragraph ... . We note that the conditional tense is used, but the incorporation of the word "alone" really places an emphasis on the whole paragraph which indicates that the normality is that, if protection of salary is afforded, then the post is suitable and to refuse it on that ground would be unreasonable. That being so it seems we would have to look for something exceptional for us to depart from that normal marker post laid down in the paragraph. We see none in Miss Milton's case and, with much regret, we have to say that her application must therefore fail. As will be clear from what we have already said had this been considered under the 1978 Act, or had we had rather more scope than we feel we have under paragraph 8, we would have said that her claim would succeed."
It so happened that in September 1988 in the case of Knott v. Southampton & South West Hampshire Health Authority another Industrial Tribunal, sitting at Southampton and (we were told) with the same Chairman, had to consider the effect of paragraph 8 of section 45 of the Whitley Council Terms in somewhat similar circumstances. That Tribunal had likewise felt itself bound to decide that, as the employee's salary was protected, they were bound by the final words of paragraph 8.2 to hold that an offer of an alternative post had been unreasonably refused. The employee in that case appealed and in February 1991 this Appeal Tribunal allowed her appeal. The judgment was delivered by Wood J. and is reported at [1991] ICR 480. It is sufficient for us to set out the holding as set out in the headnote to that report. This reads as follows:
"Held, allowing the appeal, that the first part of paragraph 8 required the issue of suitable alternative employment to be regarded separately from that of reasonable refusal; that the industrial tribunal were wrong to hold that the words in paragraph 8.2 "a post carrying salary protection ... should on that fact alone be treated as suitable in capacity" were mandatory, since to do so would render the remainder of the paragraph otiose; that paragraph 8.2 could be divided into two parts, the nature of the employment and pay, and the fact that the employee's pay was protected merely rendered the pay the same for the purpose of the pay factor but did not automatically render the alternative employment suitable or the employee's refusal unreasonable; that the industrial tribunal had failed to consider the issues of suitability and unreasonable refusal separately and the case would be remitted for rehearing."
The most important part of the Knott decision for present purposes is the holding (contrary to view which the Tribunals both in that case and in the present case reluctantly considered they were forced to take) that the pay protection was conclusive only for the purposes of the pay factor, and not as regards other aspects of the alternative employment offered.We have no doubt that we should follow and apply the Knott case. We would add one further matter. Although paragraph 8 specifies "considerations" which have to be applied in deciding whether a post is suitable alternative employment and whether it was unreasonably refused, we see no reason why other relevant considerations should not be taken into account in determining those issues, or at any rate the issue of unreasonable refusal. Otherwise, some very unjust results might flow. Suppose, for instance, that in an otherwise suitable alternative post the employee's new boss or indeed one of the persons with whom she would be working was a person with whom she had had an unsatisfactory personal relationship. That would be a factor, personal to her, which would be likely to render her refusal of the post not unreasonable, but if the relevant "considerations" are limited to those set out in subparagraphs (1) and (2) of paragraph 8, it could not be taken into account.The appeal in the Knott case had not been heard at the time of the Industrial Tribunal's decision in the present case. Mr Allston on behalf of Miss Milton submitted that if it had been, it is clear from the findings in paragraph 5(m) of the Tribunal's Reasons and their reasons in paragraph 12. set out above, that the Tribunal would have found both that the alternative post offered to Miss Milton was not suitable and that she had not been unreasonable in refusing it. He argued that this Appeal Tribunal could therefore substitute our own decision and declare that Miss Milton was entitled to a redundancy payment.Mr Matthews on behalf of the Health Authority submitted that the Tribunal in paragraph 12 of their Reasons had correctly considered the question of suitability and unreasonable refusal separately (unlike the Knott case). He also reminded us that we should not "search around with a fine tooth comb for some point of law" (to use the words of Lord Russell of Killowen in Retarded Aid Society v. Day [1978] ICR 437) and said that in paragraph 12 the Tribunal had stood back and taken an overview of the matter. He also stressed that Miss Milton was only being asked to drop to a grade immediately below her current grade, that she would not be prevented from achieving promotion and that as the Whitley Council Terms overall provided better benefits for NHS employees than others, it was not unreasonable to expect an employee to accept a drop in grade if her salary was protected. Mr Matthews also submitted that, even if we were to find that the Knott decision invalidated the Tribunal's reasoning, we should remit the case for rehearing to a differently constituted tribunal, as substituting our own decision would involve too great a leap.We cannot accept the contention of Mr Matthews that the Tribunal in paragraph 12 of their Reasons considered the questions of suitability and unreasonable refusal separately. However, although we think from what the Tribunal say in paragraph 5(m) of their Reasons that, had they not felt themselves constrained to hold that the protection of her pay excluded all considerations, they would have found both that the alternative post was unsuitable and she had reasonably refused it; in the circumstances the Tribunal were not obliged to deal with these points, and it is possible that they were not properly considered.In all the circumstances, we think that the only fair course is to remit the case to a differently constituted tribunal for rehearing in accordance with our judgment. We allow the appeal to that extent.There are two further points we should mention. First, Mrs J E Richards, whose claim for a redundancy payment was heard by the Tribunal at the same time as that of Miss Milton, was named as a respondent to this appeal, for reasons which are unclear. Nothing in this decision affects her position. Secondly, Miss Milton also appealed against the rejection by the Chairman of her application for a review. Mr Allston did not pursue that appeal and consented to it being dismissed. In our view the Chairman's decision on the review was plainly correct and we dismiss Miss Milton's appeal against it.