Salisbury v SIP (Industrial Products) Ltd [1994] UKEAT 47_93_1411

EAT

Salisbury v SIP (Industrial Products) Ltd

[1994] UKEAT 47_93_1411 · 1994-11-14

MR JUSTICE HOLLAND: This is an Appeal from so much of the Decision of an Industrial Tribunal sitting at Leicester on the 21st August 1992, whereby they dismissed the Appellant's claim for redundancy compensation. The relevant chronology is as follows:

In September 1978, Mrs Salisbury commenced employment with the Respondent group of companies as a secretary/clerk at their Wigston premises. It is material to interpose that Mrs Salisbury does not drive and those premises were situated conveniently near to her home. By August 1991, she was working with the group at the Wigston premises of one of the group's subsidiary companies, SIP Air Compressors. By this stage, the operations of the group were being moved from Wigston to Shepshed, that is, to premises some nineteen miles away, unconnected by any convenient sort of public transport.

Mrs Salisbury was asked if she would work at Shepshed for two days a week, with transport by car provided for her. She reluctantly agreed. In early December matters came to a head, with the vital chronology of the last period of her employment clearly emerging from the substantially accepted text of the employer's letter of the 12th December 1991. That letter, addressed to her, reads as follows:

"Dear Mrs Salisbury,

I refer to the meeting which took place on Tuesday, 5 December 1991 at Wigston, in the presence of Mr Denis Johnson, and also to a telephone conversation with your legal representative on 9th December 1991.

At our meeting, I informed you that, with effect from 9th December 1991, there would be no more work for you to do at Wigston as we were closing down the operation of SIP (Air Compressors) Ltd at Wigston, and transferring it to Shepshed. This has been brought on by the present economic situation, and was designed to consolidate the activities of the Group. I offered you the same position at Shepshed, with the same salary for the same hours, and the possibility of an extra half-hour each day as overtime. Transport to and from Shepshed was to be provided by the Company at no cost to you. You were to be secretary to Mr David Jones in the Sales Office. This was regarded as suitable alternative employment under the Employment Protection (Consolidation) Act 1978, and you were invited to let me know by the weekend if you were going to accept, as I had to arrange to advertise the position if you were not going to take it up. On Friday at about 4.00 p.m. you confirmed to Mr Johnson that you would start work at Shepshed the following Monday and arrangements were made for him to pick you up and take you to work.

On Monday morning, 9 December 1991, a message was received at Wigston from your daughter stating that you were ill and did not intend turning up for work. No other explanation or details were given. Subsequently, I spoke with your legal advisor and was told that you had changed your mind, and had decided to reject the offer of employment and that you would not be working for SIP any more. I was told that you would be taking your case to the Industrial Tribunal."

In the event, she did take her case to the Industrial Tribunal, with these elements to it. First, she contended that she had been dismissed, in that the requirement (not provided for in her contract) to stop working at Wigston and to relocate to Shepshed, was a breach of contract fundamental enough to justify termination by her. Her second point was, that this dismissal was for redundancy so that she was prima facie entitled to a redundancy payment. In presenting this second leg, reliance was placed upon Section 81 (2) of the Employment Protection Consolidation Act [1978] which reads as follows:

"...for the purposes of this Act, an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to -

the fact that his employer has ceased, or intends to cease, to carry on the business for the purpose of which the employee was employed by him, or has ceased, or intends to cease, to carry on that business in the place where the employee was so employed."

We need not read further. Thus far, the employers disputed her contentions but they have now the findings of the Industrial Tribunal against them and they do not seek to upset them.

Their further case is however, as follows: first, that alternative employment was offered in certain and unconditional terms; second, that such alternative employment was suitable; and third, Mrs Salisbury was unreasonable in refusing it. That further case on the part of the employers stems from the terms of Section 82 (3) and (5):

"(3) If an employer makes an employee an offer (whether in writing or not) before the ending of his employment under the previous contract to renew his contract of employment, or to re-engage him under a new contract of employment, so that the renewal or re-engagement would take effect either immediately on the ending of his employment under the previous contract or after an interval of not more than four weeks thereafter, the provisions of subsections (5) and (6) shall have effect."

For present purposes, we need only turn to (5) which reads so far as relevant as follows:

"(5) If an employer makes an employee such an offer as is referred to in subsection (3) and either - (a) the provisions of the Contract as renewed, or of 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."

In the event. the Industrial Tribunal found in favour of the employer, specifically by finding that there was an offer of alternative employment, which employment was suitable. The Industrial Tribunal did not make any finding in terms as to whether Mrs Salisbury was unreasonable to refuse. It is of importance to refer to the relevant words in the Reasons of the Industrial Tribunal:

"12. However, the Tribunal found that before the employment ceased, the company was offering to the employee a new contract which provided for the employee to work at Shepshed. The finding of the Tribunal is that the terms of this new contract were entirely suitable employment in relation to the employee within the meaning of Section 82(5) (b) of the Employment Protection (Consolidation) Act 1978.

13. In considering the question of suitability, the Tribunal bore in mind that over a period of several months the applicant had been working at Shepshed for two days out of five, and that this was a permanent arrangement applying every week. The terms on which she was working at Shepshed were not substantially different from the type of work she was doing at Wigston. Under the terms of the offer, she was entitled to the same considerate transport arrangements which had been made for her during the above two days per week arrangements. Also, in consideration of suitability to the employee, the Tribunal took into account the state of trade in the area which, in the view of the Tribunal, is a relevant consideration. There was a disadvantage in that there was travelling time at the beginning and the end of the day, but in the outcome, this was overweighed by the other considerations. The total package duly considered was, in the finding of the Tribunal, suitable to the applicant within the meaning of the above Section.

14. In the light of the above, the Tribunal finds that the applicant had, by refusing the offer, excluded herself from the right to a redundancy payment."

It is plain that on the face of them, the reasons are defective as a matter of law. The defects stem from the failure to address, in addition to suitability, the question in the terms of the sub-section:

"As to whether the employee had unreasonably refused the offer of suitable employment."

Whereas, it is plain in the context of Section 82(5) that suitability and reasonableness are associated concepts, we remind ourselves that reasonableness cannot arise as an issue unless suitability is proved. The concepts are distinct: one concept being entirely objective, the other of necessity having a subjective component. This distinction arises from the plain words of the statute - it is a distinction that is hallowed by a series of decisions. We were helpfully referred by Counsel to a number of such decisions, but perhaps the best insight into the distinction comes from the Judgment of the Lord President in Carron Company v Robertson [1967] 2ITR 484 in which the learned Judge put the matter thus: at 489:

The sub-section requires that in arriving at the answer to that problem the tribunal shall take into consideration both the terms and conditions of the offer and the employee's decision in regard to it. That means that the problem must be viewed from two stand points. From the first stand-point, the offer is surveyed (keeping in view the circumstances of the employee). From the second stand-point, the action the employees considered (keeping in view the circumstances of the offer). The tribunal must decide whether this particular person acted unreasonably. Now suitability is an imprecise term, but I accept that in deciding as to the suitability of employment in relation to an employee, one must consider not only the nature of the work, hours and pay, the employee's strength, training, experience and ability, but such matters as status in the premises of the employer and the benefits flowing from that status. For the present I also assume, as invited to do by counsel for the appellants, that, having had these matters in view, the tribunal reached the conclusion that the employment offered was suitable in relation to the respondent. But that does not, in my opinion, infer that the tribunal was not entitled to hold that the respondent was unreasonable in refusing the offer. A decision as to the reasonableness or unreasonableness of his refusal depends on a consideration of the whole circumstances in which he would have been placed if he had accepted the offer. These circumstances include such personal matters as the demands upon him of his duties towards his family. They also, in my opinion, include the conditions of the employment offered. These conditions might be such as not to render the employment unsuitable as a job for him, but yet such as to justify a reasonable man in his position in turning down the offer."

Given then, that there is no attempt in terms in the passage cited from the Reasons to deal with the issue as to whether Mrs Salisbury was unreasonable in refusing such alternative employment, which employment had been found to be suitable, how then, is the matter put on behalf of the employer?

Mr Pittaway, in a conspicuously attractive argument, puts the matter thus: he draws our attention to Retarded Children's Aid Society Limited v Day

[1978] ICR 437

and he particularly draws attention to a passage in the judgment of Lord Denning at 443 and a parallel in the short judgment of Lord Russell of Killowen at 444. The essential point he makes in reliance upon those passages is that the reasons of a Tribunal as set down in writing are not to be construed a statute and that it is important to look at the reality of the findings. Here, turning to the findings in question, Mr Pittaway submits this: inept maybe the terms of 13 and 14, but when one consider the contents of such paragraphs in conjunction with the evidence that was before the Tribunal, then we are in a position to find that the Tribunal did consider both the concepts: employment and Mrs Salisbury's refusal to accept it and what is said to be unreasonable nature of that refusal, so that, in the event, this Tribunal did not err in law in that it properly considered the elements that it had to consider before making the finding that is under appeal.

It is no discourtesy to Mr Pittaway if this Tribunal does not mention all the aspects of the evidence that he drew our attention to. In the event it is the unanimous view of this Tribunal that looking at, first, paragraph 13, the matters set out there are matters which are almost entirely, if not wholly relevant to the issue of "suitability", that is the issue to which they are expressed to be relevant. However, when one turns to paragraph 14, we cannot ignore the failure to introduce the issue of "reasonableness" at all into the terms of that paragraph. Yet, further and finally, we notice the finding in that paragraph is:

"In light of the above."

that is, in the light of all that has been prayed in aid with respect to the issue of "suitability". Thus, it is, we cannot be satisfied that the Tribunal applied its mind to that vital point as to whether Mrs Salisbury was being unreasonable in refusing the offer and, thus it is that we unanimously consider that this Appeal is well founded in that the Tribunal failed properly to direct itself as to law in reaching the findings set out above in this judgment.

We then turn to the course that we propose to take. As must be apparent, we have no option other than to remit this case to the Tribunal to consider this further issue, raised by Section 82(5). If it now be possible to reconstitute the same Tribunal, that is what we would urge for the purposes of disposing finally of Mrs Salisbury application.

We would add that the quicker this is done, the better.

We are asked to make two further decisions in this matter. First, Mr Giffen invites us to review our initial decision namely to remit this matter to the Industrial Tribunal, hopefully, the same Industrial Tribunal, for that Tribunal to resolve the unresolved issue of unreasonableness. As to that submission, we have carefully considered it, but having regard to the state of the evidence that was before the Industrial Tribunal, and having further regard to our genuine doubts as to how far this issue ever really was considered at the Tribunal below, we are totally satisfied that we are not in a position to deal with the matter ourselves. We do have evidence, but is that all the evidence that properly relates to the issue in question? It is essentially an issue which should have been addressed by the Tribunal, the Tribunal will be in a better position to deal with it, it is obviously the appropriate body to concern itself with this outstanding matter.

In so finding, we are totally sympathetic to both parties over the delay in this matter, but we do not think we are in a position to exercise our judgment to resolve the matter on the material that is before us.

Turning then, to the further application made by Mr Giffen for costs, it is the unanimous view of this Tribunal that under no circumstances could these proceedings be described unnecessary and improper or vexatious and thus it is we can immediately reject his application for costs made under Rule 34 of the Employment Appeal Tribunal Rules 1993.