Ring & Brymer Ltd v Cryer & Ors [1993] UKEAT 670_92_2801

EAT

Ring & Brymer Ltd v Cryer & Ors

[1993] UKEAT 670_92_2801 · 1993-01-28

MR JUSTICE WOOD (PRESIDENT): This is an appeal by Ring & Brymer Limited from a decision of an Industrial Tribunal sitting at London (North) on the 31st July 1992. The decision was that the Applicants, Mr Cryer, Mrs Dolphin and Miss Ginty had been unfairly dismissed by Ring & Brymer Limited. Put in that way it sounds to have been a very simple issue, however, this is yet another case where difficult problems arise under the Transfer of Undertakings Protection of Employment Regulations 1981.

Of the Applicants Mr Cryer appeared in person; Mrs Dolphin was represented by Mrs Wynne of Counsel; Miss Ginty did not appear but she had put in written representations only, by which I think are meant, her Originating Application.

The Company was represented by a Solicitor, Mrs Davidson.

Mr Cryer was a Group Training Manager with Town & County Limited, which we believe to be a subsidiary of Allied Lyons. He had been employed there for some seven or eight years.

Mrs Dolphin was an Operations Consultant, she had been with the Company for some five years. And Miss Ginty was a Management Trainer, she had been with the Company for some ten years.

The background story is that the Company, Town & County was in some financial difficulty during the Autumn of 1991. These three Applicants were in senior positions and there had been a proposal for re-financing and also a possibility that the Managing Director, Mr Dieter Apps, was to purchase the Company when the finance had been obtained. However on Friday, 6th December 1991, the Board, at the request of the Bank, appointed a Receiver.

Although they were in senior positions and had been employed there for a number of years, the Applicants were dismissed summarily by a member of the Board, the Managing Director, Mr Mills, on the advice of the Receiver. Mr Cryer on the 9th December, which was the Monday following the appointment of the Receiver on Friday 6th, and Mrs Dolphin also on the Monday, and Miss Ginty on Tuesday, 10th December. Those dismissals, were if anything, for the reason of redundancy. Although the reason given to the three of them was scarcely satisfactory. Mrs Dolphin was also told to arrange for the dismissal of some five of her staff and in all, we understand, that some 21 of the staff were dismissed at, or about that time.

On the 17th December the business - as it said the assets and goodwill as described in the decision - of Town & County were sold to Ring & Brymer Limited. The primary issue, therefore, was whether Ring & Brymer Limited were liable for the dismissal which, on the facts, seem to have been clearly prima facie, unfair, or were to be liable for those dismissals by Mr Mills acting for the Receiver. So that, in effect, the Receiver dismissed these three during the early part of that week and by the 17th - it was signed on the 16th that is the following Monday - the business had been sold and transferred to Ring & Brymer. Yet again, therefore, the issue was under the Transfer of Undertakings (Protection of Employment) Regulations 1981.

Regulation 3 defines the relevant transfer. The next regulation which is relevant, is Regulation 5(3) which indicates that earlier paragraphs applied:

"to a person employed in an undertaking or part of one transferred by a relevant transfer is a reference to a person so employed immediately before the transfer . . ."

Those are words which have caused problems. Then one looks to see whether the dismissal is deemed to be unfair in Regulation 8(1) and a person is deemed to be unfairly dismissed:

"if the transfer or a reason connected with it is the reason or principal reason for his dismissal."

In the decision in the House of Lords in Litster v. Forth Dry Dock Engineering Company Ltd

[1989] ICR 341

, the wording "immediately before the transfer" in Regulation 5(3) is to be understood so as to coincide, or so as to dovetail into the European law as meaning, "immediately before the transfer, or would have been so employed if he had not been unfairly dismissed in the circumstances described by Regulation 8(1)". The issue therefore, before any liability lies in Ring & Brymer Ltd is whether the reason or the principal reason for the dismissal is "the transfer or a reason connected with it".

This Industrial Tribunal, therefore, had to decided whether the transfer of the 17th December, had been the reason or principal reason for the dismissal of these three Applicants. That was the issue before it. It is clear that the treatment of the three Applicants, which as we have indicated, we regard as prima facie most unfair, was the responsibility of Ring & Brymer or whether, of course, Town & County, which we understand is in liquidation, would have been responsible, in which case there would be certain other remedies under the 1978 Act. However, the 1978 Act does not become relevant until after the application of the 1981 Regulations. It is right to note that Town & County Ltd are not parties, and it would seem that there may be difficulty in making them parties now that they are in liquidation because of the provisions of the Insolvency Act. There was going to be a subsidiary issue under Regulation 8(2) which was whether:

"Where an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after the relevant transfer is the reason or principal reason"

that was a secondary and subsidiary issue.

However, we return therefore, to the issue which was the real issue before the Industrial Tribunal.

The Originating Applications having been issued in February 1992, arrangements were made by a Notice of Hearing of the 1st June 1992 for the hearing on the 31st July 1992. From what we have said already it is abundantly clear that the evidence of the Receiver was of vital importance to an understanding of the issue before the Industrial Tribunal. Solicitors acting for Ring & Brymer would clearly have appreciated the vital importance of the Receiver attending and they applied on the 30th July, only the day before the hearing, for a witness summons having anticipated, one would expect, that he would attend. However, a witness order was duly applied for and obtained, presumably on the basis that he was an essential witness and that he was not prepared to come, or the Company wanted to be careful about it and wanted to ensure his attendance, through that witness order.

On the day of the hearing, the 31st July, a letter arrived by Fax from Messrs Allen & Overy, who were representing, or acting for, the Receiver. There were two Receivers but the relevant one is Mr Manning. It is clear that Messrs Allan & Overy had just been informed about the witness order, which was obtained the previous afternoon. They took the point that it had not been served personally, that Mr Manning had not seen its contents and that Mr Manning was, unfortunately, not in his office, and they asked the Chairman to set aside the witness order. There is some confusion about whether or not it was set aside, but it was ultimately set aside by a letter some months later, which perhaps is indicative of the confusion. However, what is apparent is that an application was made at the hearing for an adjournment on the basis that an essential witness was not available, that a witness order had been issued, not served yet, and there was an indication that that witness would not be arriving, at least that day. The Tribunal decided against that application; they refused an adjournment and they continued with the hearing.

The situation on that morning, as far as we have been able to understand it from the helpful submissions made by both Mr Elias and Mrs Wynne is that first of all, Miss Ginty had already asked for an adjournment and that is why her representations were limited to the written form, so she wanted an adjournment. Mrs Dolphin was going to the United States of America to work, we think that it is probably that she had permanent work, but in any event an affidavit was available in case there was an adjournment and there would have been, I suppose, ability to look at that. Moreover, and there is an issue about this which we do not intend to resolve, Mrs Wynne told us that she had been prepared for an adjournment but she would, in any event, have wanted her costs. So that the situation was this, that the essential witness was not there. One of the Applicants wanted an adjournment, another of the Applicants was, perhaps, not keen on an adjournment but was taking a position that the opposition was, perhaps, somewhat luke warm, if that is a correct middle way understanding of what occurred and Mr Cryer was there in person. Without that witness it is difficult to see how the Tribunal were going to be able to arrive at the central issue of whether the principal reason for the transfer was in any way connected with the dismissal, or rather one should put that issue in the reverse order.

Mr Elias has criticised the refusal to adjourn. He has submitted that no tribunal acting judicially could have reached that conclusion, and indeed justice could not be done without the presence of the Receiver, because he was the only person who could really know what was behind the purpose of the dismissals. In looking and in reviewing the exercise of the discretion of the Industrial Tribunal we apply the principles of Wednesbury and look to see whether the Tribunal took into account something it should not have taken into account, or failed to take into account something which it should have taken into account, or, reached a conclusion to which this Tribunal felt that it really could not and should not have reached in the interests of justice, when one is weighing an adjournment and of course the power to award the costs of the adjournment against the absence of an essential witness.

Those sitting with me, and I do not disagree with them, would be content to have relied on the third limb of Wednesbury . They feel here, looking at all the facts that really justice did demand an adjournment in the present case. I would perhaps take a more legalistic approach in that in my judgment, in weighing the factors, it seems that the learned Chairman failed to appreciate fully, the importance of the witness order, the importance of the witness himself and also the fact that Miss Ginty had asked for an adjournment and that Mrs Wynne had been, however one interprets what went on, at least prepared to think that an adjournment would take place. It seems to me, therefore, that the learned Chairman in the present case failed to take into account some essential factors and, perhaps, I do not know, whether this Industrial Tribunal were, as they all are, very busy, it might have meant a blank day. But, in order to obviate that situation, evidence could have been taken and the matter could thereafter have been adjourned to another day so as to complete the evidence and to hear what both sides had to say. It seems to us, therefore, that in the case, although it is a very rare situation when we venture to set aside an Order made in the exercise of a wide judicial discretion, nevertheless, this is a case where we feel that justice demands that we should.

A second ground has been put forward by Mr Elias in this case. He has submitted that in paragraph 8 of the decision the Tribunal has made findings which are not substantiated by the evidence. It is important as submitted, at the moment we see no reason not to accept the submission, that it is the transfer, namely the transfer from Town & County to Ring & Brymer Ltd, which is the relevant transfer and the one on which must focus one's attention in order to decide the issue under Regulation 8(1). In paragraph 8 of the decision the Tribunal say this:

"We infer from the evidence that was before us and from the written representation that these Applicants were dismissed for reasons connected with the Transfer of the Undertaking. Although we accept that the contract for the sale to the Respondents had not yet been completed, we find that negotiations for the sale had been going on for some time and that the Receiver knew that the sale was imminent. The possible sale to the Managing Director, Mr Dieter Apps, had fallen through on the Saturday December 7th and therefore we conclude that the Receiver was then able to proceed with the sale to the Respondents."

pausing there, it is clear that the Tribunal were referring throughout to "the sale" and identifying that sale as the sale by Town & County to Ring & Brymer Ltd.

We are satisfied from the arguments put forward by Mr Elias, and having looked at the evidence, not only all the Notes of Evidence, but also the written application and Respondents' Notices of Appearance, that there is in fact a vacuum in the evidence so far as this sale is concerned. There is no evidence; it is pure supposition that "the sale" had been going on for some time or that it was imminent on the 9th or 10th, and indeed there is some evidence that Mr Apps was interested on Monday 9th December. We do not intend to go into that matter, it may very well be on a re-hearing that different evidence will be available but at the moment we are satisfied that that paragraph does not accord with such evidence as was available to the Industrial Tribunal. It may very well be, in the present case, as naturally anyone reviewing these facts would feel, that the Applicants had been poorly treated. But the issue is not the 1978 Act considerations; the issues are the provisions of the 1981 Regulations and it is only after those issues have been dealt with that the matter of fairness or unfairness, or appropriate treatment comes into being.

It follows, therefore, that this matter must be remitted to be heard before a different in accordance with such directions as may be given by the Regional Chairman. However, before passing from this decision the Industrial Members would wish to emphasise yet again, the seemingly unsatisfactory position in which employees, some of them of many years faithful service, find themselves, as a result of transfer, take-overs, receiverships and so on. They are problems which merit careful consideration and reconsideration. Neither side of industry sitting with me are satisfied that the fairness of these situations is entirely satisfactory. With those general comments we allow the appeal and remit the matter to be heard before a different tribunal.