Driver v Cleveland Structural Engineering Co Ltd [1994] UKEAT 127_92_1702

EAT
Driver v Cleveland Structural Engineering Co Ltd
[1994] UKEAT 127_92_1702 · 1994-02-17
MR JUSTICE MUMMERY (PRESIDENT) This appeal raises an interesting question on the operation of the statutory provisions which govern dismissal on grounds related to trade union activities.Mr Driver was employed as a steel erector by Cleveland Structural Engineering Co Ltd from 29th August 1989 until he was dismissed on 14th June 1991. From the time when he started work until he voluntarily relinquished the position in November 1990, Mr Driver acted as the shop steward for members of the Amalgamated Engineering Union (AEU) engaged on the engineering works on the south side of the Dartford Bridge. At the date when he was dismissed the relevant statutory provision in force was S.58 of the Employment Protection (Consolidation) Act 1978, since replaced by S.152 of the Trade Union and Labour Relations (Consolidation) Act 1992. Section 58 provided that -
"The dismissal of an employee shall be regarded as unfair if the reason for it (or, if more than one, the principal reason) was that the employee - (a) was, or proposed to become, a member of an independent trade union, or (b) had taken part, or proposed to take part, in the activities of an independent trade union at an appropriate time."
In his complaint to the Tribunal Mr Driver contended that he had been unfairly dismissed due to his trade union activities. Cleveland Structural Engineering Co Ltd ("Cleveland Structural") denied that he was dismissed by reason of trade union activities. Their case was that he was dismissed for redundancy and that, as he did not have the requisite two years' qualifying service, he was not entitled to bring a claim for unfair dismissal by reason of redundancy under S.59 of the 1978 Act.Section 59, which has since been replaced by S.153 of the 1992 Act, provided that -
"Where the reason or principal reason for the dismissal of an employee was that he was redundant, but it is shown that the circumstances constituting the redundancy applied equally to one or more other employees in the same undertaking who held positions similar to that held by him and who have not been dismissed by the employer, and (a) that the reason (or, if more than one, the principal reason) for which he was selected for dismissal was one of those specified in S.58(1) ...

then, for the purposes of this Part, the dismissal shall be regarded as unfair."

For reasons notified to the parties on 16th January 1992 the Industrial Tribunal, sitting at London (South), unanimously decided to dismiss Mr Driver's claim.For the purposes of this appeal, which was instituted by Notice of Appeal served on 24th February 1992, it is necessary to quote the last three paragraphs of the decision. They contain the reasoning of the Industrial Tribunal and, it is contended on behalf of Mr Driver, the error of law which entitles him to succeed on this appeal and to have the whole matter remitted to a different Industrial Tribunal.
"8. Mr Wheaton, [Mr Driver's Trade Union representative] claimed as evidence that he was dismissed for trade union activities, the fact that he was not selected for alternative work with the respondents, despite the fact that one or two sites were at or near his home and the further fact that representations for his transfer were made at a high trade union level.
9. The Tribunal is satisfied on the evidence that the only reason for his dismissal was redundancy and that they consulted with his trade union at all times in coming to that decision. Membership of, or activities connected with his union work, we are satisfied, played no part in his dismissal.10. Since Mr Wheaton has pressed the point on the applicant's part with great force, that he was not selected for another job within the respondent's organisation, the Tribunal's short reply is that there simply was no legal duty for them to do so - whatever their reason. We think this matter irrelevant to the applicant's claim, which fails and is accordingly dismissed."The issue on this appeal is whether paragraph 10 of the decision reveals that the Industrial Tribunal erred in law by misapplying S.58 of the 1978 Act to the facts of the case.

The background facts

There are only a few facts relevant to the issue on the appeal.Mr Driver was a steel erector employed by Cleveland Structural on construction of the Dartford Bridge project from 29th August 1989 to 14th June 1991. He accepted employment as an erector in the terms of a conditional offer set out in a letter sent to him on behalf of Cleveland Structural on 21st August 1989. The offer contained in the letter was conditional upon a number of matters, including that of "being available to transfer from site to site anywhere in the United Kingdom."Most of the 200 workers on the site were steel erectors. The evidence before the Tribunal was that steel erectors are normally taken on for the time that it takes Cleveland Structural to conclude their contract.Mr Driver was the AEU shop steward on the south side of the Bridge down to November 1990. At about that time work on the Bridge began to wind down. Forty employees were made redundant. In May 1991 Cleveland Structural consulted with the Unions about further redundancies. After full consultation Cleveland Structural agreed to operate the "first in, last out" system for dealing with the situation. In June 1991 a further 90 employees, including Mr Driver, were made redundant. He was sent a letter on 10th June 1991 headed "Notice of Termination of Contract of Employment".
"We regret to inform you that it has become necessary to terminate your employment with the company by reason of redundancy as from 14th June 1991. You will receive a severance payment according to the National Agreement for the Engineering Construction Industry, if you are not eligible for a payment under the Employment Protection (Consolidation) Act 1978.
The company regret that it is unable at this point in time to offer you alternative employment. In the event of work becoming available on another site, you may be offered alternative employment.

May we take this opportunity of thanking you for your work with the company."

The Tribunal found that, at the same time as the redundancies were agreed, the Union was anxious to discuss with Cleveland Structural the possibility of placing as many of the redundant workers as possible at some of the other sites operated by them. Thirty-four of those made redundant were ultimately found jobs on other sites. Mr Driver produced to the Tribunal a list of 16 employees who were transferred to other sites and yet had started their employment with Cleveland Structural after him. Some of those who were transferred went to work on a site near Mr Driver's home in Sheffield, the Drax Contract site.Mr Driver was not selected for transfer to the Drax Contract site or to any other site operated by Cleveland Structural.In those circumstances Mr Driver's case was that, during the time he had acted as a trade union official, he had negotiated better pay and conditions for men on the site; that the employers "had it in for him"; and that was the principal reason for his dismissal from employment. It was accepted before the Tribunal, as it has been on this appeal, that Mr Driver had no right to make a claim for unfair dismissal other than under S.58, because he had served Cleveland Structural for less than the two-year minimum period required to bring a claim under S.54 and S.59 of the 1978 Act.It is also accepted on behalf of Mr Driver that the burden of proving the reason for dismissal under S.58 was on him, and not on his employer as it would be in the case of a claim under S.54, S.57 and S.59: see Smith v. Hayle Town Council 1978] ICR 996 .

The submissions

In his excellent arguments on behalf of Cleveland Structural, Mr Oldham sought to uphold the decision of the Industrial Tribunal as being a conclusion of fact, untainted by any error of law and therefore unappealable. He submitted that the question which the Industrial Tribunal had to answer under S.58 was

"Was Mr Driver dismissed by reason of his trade union activities?"

Mr Oldham emphasised that it was not right to ask, "Was Mr Driver selected for redundancy by reason of his trade union activities?" That question could only arise under S.59(a) and it was common ground that Mr Driver could not bring his claim under that section.Having addressed itself to the right question, the Industrial Tribunal came to a conclusion of fact, namely that the reason for Mr Driver's dismissal was, as Cleveland Structural contended, redundancy, not Mr Driver's union activities. As the Tribunal came to that conclusion, the question why Mr Driver was not selected for alternative employment at another site, such as the Drax Power Station site, was of no relevance. He submitted that the Tribunal correctly reasoned in paragraph 10 of its decision that the question of selection for redundancy (or non-selection for another job) is irrelevant in respect of a claim made under S.58 once it has been found that the reason or principal reason for dismissal was redundancy.These submissions might have justified dismissing the appeal if the decision of the Tribunal had stopped at paragraph 9. Paragraph 8 of the decision stated Mr Driver's contention that the fact that he was not selected for alternative work was evidence that he was dismissed for trade union activities. Paragraph 9 stated the factual conclusion of the Tribunal that the only reason for his dismissal was redundancy and that trade union activities played no part in his dismissal. In our judgment, however, the wording of paragraph 10 of the decision, in the context of the two preceding paragraphs and in the context of the decision as a whole, presents a real difficulty for Mr Oldham's argument. That difficulty was seized on by Mr Carr in his able submissions on behalf of Mr Driver. He submitted, and we agree, that paragraph 10 reveals an error of law on the part of the Tribunal. Paragraph 10 repeats the point made by Mr Driver's representative, that Mr Driver was not selected for another job with Cleveland Structural. That was Mr Driver's complaint as set out in paragraph 8 of the decision and in his notice of application to the Tribunal. The Tribunal stated its short reply to this point. It is that reply which reveals the error of law. The Tribunal's reply was that there was "no legal duty" for Cleveland Structural to select Mr Driver for another job, "whatever their reason". In the last sentence of the paragraph the Tribunal stated -
"We think this matter irrelevant to the applicant's claim which fails and is accordingly dismissed."
Although Mr Oldham attempted to persuade us to the contrary, our view is that the reference in the paragraph to "this matter" [being] irrelevant" to Mr Driver's claim, refers to his complaint stated earlier in that paragraph and in paragraph 8 that he was not selected for alternative work with Cleveland Structural.We agree with Mr Carr that the fact that Mr Driver was not selected for alternative work with Cleveland Structural is a matter relevant to the crucial factual inquiry raised by Mr Driver's claim, namely whether the reason or principal reason for his dismissal was that he had taken part in trade union activities.

The legal position - Summary

In our judgment, the legal position affecting Mr Driver's claim is briefly as follows:-(1) He was not entitled to make a claim under S.59 of the 1978 Act that he had been unfairly dismissed by reason of unfair selection for dismissal in a redundancy situation. He has always accepted that he could not satisfy the requirement of two years'continuous service.(2) It follows that the Industrial Tribunal were right in stating that there was "no legal duty" for Cleveland Structural to select him for another job in the organisation, in the sense that Mr Driver had no statutory right under S.54 and S.59 to complain of unfair dismissal if the reason or principal reason for his dismissal was that he was redundant.(3) It does not, however, follow that the absence of that "legal duty" makes it irrelevant to ask why he was not selected for another job. In answering the question, "Was Mr Driver dismissed by reason of his trade union activities?" it is legally relevant to inquire why, instead of being selected for another job within Cleveland Structural organisation, he was dismissed. Although Cleveland Structural agreed with the unions to operate the "last in, first out" system in dealing with the situation, the evidence showed that other steel workers with less service than Mr Driver were redeployed within the organisation. As a result of its misdirection that this inquiry was irrelevant, the Tribunal erroneously restricted the scope of its factual inquiry. The matter was well put by Mr Carr in his submission that the question of alternative employment within the organisation and the reasons for it being offered to some employees and not offered to others, including Mr Driver, formed part of the factual inquiry which the Tribunal had to undertake in order to determine the reason or principal reason for Mr Driver's dismissal. By simply stating that there was "no legal duty" on Cleveland Structural to consider the question of selection for alternative employment, the Tribunal restricted the scope of its investigation into the reason or principal reason for dismissal. The result was that the Tribunal excluded from its consideration the question whether or not Cleveland Structural had decided against transferring Mr Driver to the Drax site because of his trade union activities.(4) We agree with Mr Oldham that if, as we hold, there is a misdirection in paragraph 10 of the decision, the presence or absence of the employer's attempt to redeploy Mr Driver in the organisation is only one of the factors which the Industrial Tribunal should take into account in deciding whether or not the employee has been dismissed for trade union activities. The weight to be attached to that factor is a matter for the Industrial Tribunal depending on all the circumstances of the case.(5) We indicated in the course of argument that we did not accept a wider submission, initially made by Mr Carr but later modified, that an employer "is under a duty to consider the issue of alternative employment when a redundancy situation arises;" in particular, where the contract of employment provides for mobility between sites and the transfers are carried out in what may be described as a "no redundancy" situation. The authorities which Mr Carr cited did not establish the existence of a statutory or legal duty. They did, however, establish a principle to be borne in mind by the Industrial Tribunal when answering the question, "Why was Mr Driver dismissed and not selected for alternative employment?" It is established in such well known cases as Williams v. Compair Maxam [1982] ICR 156 that, as a matter of good industrial relations practice, a reasonable employer, when considering the circumstances surrounding a proposed or possible redundancy, will consider the question of alternative employment before taking a decision to dismiss. In answering the statutory question posed by a claim under S.58 it will be relevant for the Industrial Tribunal to take into account this practice or principle and the reason or reasons why, in the particular case, the employee has not been offered alternative employment before the decision to dismiss.(6) It is impossible for this Tribunal to come to a decision itself on this question. Because the Industrial Tribunal erred in law in restricting the scope of its factual inquiry into the reason or principal reason for Mr Driver's dismissal, the facts relevant to that decision are not before this Tribunal. Mr Oldham suggested that perhaps the hearing could be adjourned and an order made for the production of Chairman's Notes. They might reveal that details relevant to this point were canvassed before the Industrial Tribunal. That is not a practicable course. The only way in which this issue can be properly decided is to remit it to the Industrial Tribunal for a fresh hearing. Although this Tribunal is anxious to avoid taking such a course, particularly when 3 1 / 2 years have passed since the dismissal, it is unavoidable in some cases. This is one of them.(7) Mr Oldham also submitted that, if the matter were remitted to the Tribunal, it should be remitted to the same Tribunal. We see no advantage in this. The Tribunal's decision was made over two years ago. There would be no advantage in referring this matter to the Tribunal, as originally constituted. Fortunately, the hearing was over in a day and we hope that it will be possible to expedite the hearing of this matter by a freshly constituted Tribunal.For these reasons the appeal will be allowed. The matter will be remitted to for the consideration of a newly constituted Tribunal, the hearing to take place as soon as practicable.