Systems Ltd v Woods [1993] UKEAT 470_91_2603

EAT
Systems Ltd v Woods
[1993] UKEAT 470_91_2603 · 1993-03-26
MR JUSTICE WOODS (PRESIDENT): By an Originating Application dated 30th April 1990 Mr Nicholas Woods complained against his employers, G D Systems Limited, of unfair dismissal and the failure to make him a redundancy payment.His case was heard over some two days by an Industrial Tribunal sitting at Norwich under the Chairmanship of Mr Scholfield. The unanimous decision of the Tribunal was that he was entitled to a redundancy payment of £163.46 and also entitled to a total sum of £887.04 under the Wages Act.There was an application for Review based upon the fact that the Wages Act was not specifically mentioned in the Originating Application, but that was dealt with in a written decision of the 12th August 1991, explaining the rules and explaining that the matter was perfectly properly before the Tribunal and a matter on which it could adjudicate.The history is in some ways slightly unusual. Mr Nicholas Woods, who was represented by his father both before the Tribunal and before us, was a young man employed as a programmer by this Company. The Company was a very small Company originally set up by a Dr Howland, who has represented the Company before the Tribunal and before us, and a Mr Podolski. It was to support a partnership already in existence of Dr Howland and someone with him, I think probably his wife. Mr Podolski was a computer expert and the small Company was a 50/50 Company between Dr Howland and Mr Podolski. Young Nicholas Woods was said to be keen and industrious and his work was appreciated by the two Directors. There came a time however when the Company fell upon hard times and by the end of March 1989 the bank was withdrawing its support. These were difficult times. By the March of 1990 the two Directors had consulted accountants and solicitors and on the 31st March 1990 a letter was written to the Applicant giving him one month's notice of termination which was to be effective on the 30th April 1990. He was told that he would be expected to take all outstanding holidays during that month.Meetings took place during April on a number of occasions sometimes even at the home of Nicholas's father. It was made clear, as the Tribunal found, early in the month that Nicholas Woods, the Applicant, was not required to do further work during that month. That is specifically found. It was intended that a certain amount of work to be done in winding down the programmes was to be done by Mr Podolski, who was quite capable of coping with that and that the Applicant was free to find other employment.On the 3rd April Nicholas Woods wrote a letter claiming money in lieu of notice for the month of April, but the Tribunal were satisfied that he was wrong about that and there was no agreement to pay him in lieu of notice. As the Tribunal found at paragraph 4(vi)
"He had been given notice and had been told that he was not required to work that notice. It was never agreed to make him any payment in lieu of notice."
What occurred during April is a little difficult to follow and indeed the Tribunal also found it "a confused period". A cheque in respect of the Applicant's March salary was dishonoured for various reasons on two occasions and ultimately he was able to present it during the early part of May, when in fact it was met. The Company was clearly in difficulty and the Bank was not prepared to help very much. We have seen a letter of the 9th April from Dr Howland to the Applicant saying that:
". . . all creditors should benefit equally from the assets of the Company and that I am not therefore empowered to treat any creditor in preference to another . . "
and indeed, saying that he was not therefore going to receive payment. That is the tone of that letter.There were discussions about the question of work to be done by the Applicant, he did some work, not very much. We are told that that was really all that was required of him, indeed, by the end of the month on the 24th when he did turn up for work, his way was barred. The computer equipment was moved from the home of Mr Podolski where it had been during the previous months of the year to the accountants' offices, from there it was moved to Dr Howland's home, and the whole situation was rather fluid and uncertain. Ultimately, after April was through, in the May, the March salary was received and thereafter Nicholas Woods did not work further. So that there was the "patchy" working during April. He refused to go back to full-time work either for the Company or for Dr Howland on his former terms and conditions of service.The issues, as we have said, are slightly complex. However, the matter can be narrowed down to the relevant issues for us today. As we have explained to both the advocates before us, this Tribunal can only interfere with a finding of an Industrial Tribunal if there is an error of law, the questions of fact are for the Industrial Tribunal. Certain matters are not in dispute. In applying for a review Dr Howland had set out a number of issues, in particular in connection with the Wages Act claims, and they were dealt with by the learned Chairman. There is before us today a long and detailed document, containing about 8 pages, which constitutes the Notice of Appeal. Dr Howland, most helpfully, has enabled us to narrow the issues really to two. We have done it in this way. There is no issue but that there was a redundancy; that Nicholas was dismissed; that he was fairly dismissed and that the reason for the dismissal was redundancy. Thus, unless he refused suitable alternative employment and did so unreasonably, he is entitled to his redundancy payment. The first issue therefore was whether he was justified in refusing to take re-employment either by the Company or by Dr Howland during that April. The Company was in severe financial difficulties, it was clear that the cheque was not met and the position seems to have been fairly unsatisfactory, for instance, on the 24th April Mr Nicholas Woods was barred from working.We have looked at the evidence and as Dr Howland has appreciated, now that we have explained it to him, it really is not open to us to find that the Tribunal were not entitled on the evidence before them to reach the conclusion which they did, namely that Nicholas Woods was entitled, and acting reasonably, not to accept any offers that were made. They were oral offers, we were told by Mr Woods Snr, his father, that they were not reduced into writing and in the fluid circumstances it would have been difficult perhaps to have envisaged a meeting of minds on an offer and acceptance, the terms of offer and acceptance of a new contract of employment. However, the Tribunal deal with the matter in paragraph 9, they say this:
"As far as the redundancy payments are concerned, it is admitted that the applicant was redundant and that this was the reason for his dismissal. We have considered Dr Howland's argument about the offer from an associated employer. As far as the respondents [that is his own partnership] are concerned, 50% of the shares are owned by Dr Howland and 50% by Mr Podolski. In these circumstances we would be inclined to think that nobody has any control at all of this company - certainly no one person. Dr Howland says that he is the sole director but, leaving this interesting argument on one side, there is no doubt in our view that the applicant was not unreasonable in all the circumstances in refusing this alternative offer of employment. There was no guarantee made to him that his salary would be paid. He had every reason to be doubtful of the position, and in our view it was perfectly reasonable of him to have refused this offer. By reason of his age and length of service one week's salary is payable to him as a redundancy payment. It has been agreed that this is a sum of £163.46."
We have looked at the evidence and the documentation and it seemed to us there was a substantial body of evidence upon which this Industrial Tribunal were entitled to reach the conclusion which it did. We quite understand Dr Howland does not agree with it, but I am afraid we can not help him, that is a matter for the Tribunal and it is for them to make up their minds and to decide on that matter. There is therefore no possible criticism of the finding on that particular issue and the issue of redundancy therefore is properly found in favour of the applicant.There then remained three fairly minor items of claim for money. There was a claim for £37.30 for overtime worked in March; and there was a claim for 12 1 / 2 days holiday pay, which the contract provided should be taken at a time which was mutually agreeable. In fact there was no such agreement and therefore they had to look at the whole matter on the evidence before them. Here again, we have looked at the evidence and indeed Dr Howland does not pursue these two points because it is clear that his wife, very frankly and in a straightforward way, admitted that those items would be paid and they were due. We disregard those and therefore they stand.The last point is the question of the conduct of young Nicholas Woods during April. The case for Dr Howland is that he acted in such a way that he was in fundamental breach of his contract of employment which was still subsisting until the end of the month and therefore it was a repudiation which Dr Howland was entitled to accept and it was a fundamental breach.The facts were complicated as we have already indicated. It is said, four points, by Dr Howland that there were a number of occasions when the applicant was asked to work and did not. He was not able to provide sufficient work during short periods to meet to the demands required of him. Thirdly, that he was insisting on being paid for April before carrying out work, and that was a breach of contract, and that although there had been the incident on the 24th April when Nicholas Woods had been barred from working that was very much at the end of the period and by that time it was quite clear that there had been a fundamental breach, or even a breach, by the Applicant. Here again, we have had regard to the evidence which we have read and it is clear that the Tribunal took a great deal of detailed evidence and were very careful in their overall review.The question of the liability to work is covered in a number of places during the judgment itself. It is emphasised, as we have already indicated, in the findings of fact. The Tribunal say at paragraph 4(iv):
"It was agreed that there was no further work for him to do, and that he was not needed to turn up for work in the month of his notice."
Then there is a further emphasis of that when dealing with the mistaken understanding about the payment in lieu of notice, to which we have already referred, which expressly states the same fact. The review of the facts are to be found in detail in paragraph 4(vii) and (viii) dealing with those matters. The evidence is clearly all there and the conclusion is found in paragraph 10 and it is this conclusion through which the Tribunal find whether or not there was a breach. They say this:
"We similarly do not accept Dr Howland's argument that the applicant's actions during April constituted a repudiation of his contract of employment. It is clear that he did not appreciate the distinction between wages `in lieu of notice' and wages for a `notice' period during which he was not required to work. The position was however that he did in fact do some work during his notice period, and he was effectively prevented from doing any more. In spite of his misunderstanding about the position about his notice he not repudiate his contract of employment, and in our view he should be paid his notice money for the month of April. In other words he should be paid his perfectly normal salary for April with the usual deductions of Income Tax and National Health Insurance, and it is agreed that this figure amount to £538.86."
There is the finding of fact and in our judgment there was evidence upon which they could find that and we find no misdirection of law in the decision on that issue.It follows, therefore, that we are unable to help Dr Howland in this case. There is no error of law and this appeal must be dismissed and it is.