Horst & Ors v High Table Ltd [1996] UKEAT 1252_94_2304

EAT
Horst & Ors v High Table Ltd
[1996] UKEAT 1252_94_2304 · 1996-04-23
MR JUSTICE BUTTERFIELD: These are three related appeals heard together by agreement of the parties as were the applications heard and determined by the Industrial Tribunal sitting at London (South). Mrs Jowett does not appear today but otherwise the Appellants are either present or represented.The application in each case was for compensation for unfair dismissal. The Industrial Tribunal held that each Applicant was dismissed by reason of redundancy and that it was reasonable for the Respondents to treat that reason as sufficient for dismissal.Before this Tribunal the Appellants each contend that, on a proper construction of Section 81(2)(b) of the Employment Protection (Consolidation) Act 1978 and a correct application of the evidence to that section, there was no redundancy at all. In the alternative, it is submitted that, if the Appellants were dismissed by reason of redundancy, the Industrial Tribunal fell into error when considering whether the dismissal was unfair under the provisions of Section 57(3) of the 1978 Act.The Respondents, High Table Limited, supply staff and food for companies principally, if not exclusively, in the City of London, who contract out the restaurant services they provide for their directors, guests and employees.All three Appellants were employed as "silver service waitresses" and worked for the Respondents in that capacity at the premises of Hill Samuel Ltd. All three Appellants were purportedly made redundant and their employment was terminated on 28 February 1993. Mrs Burley had been working for the Respondents for 12 years, Ms Jowett for 11 years and Mrs Horst for 5 years at that date.In 1992, Hill Samuel made a number of their own staff redundant, resulting in a reduction in the services they required from the Respondents. That reduction did not affect any of the Appellants. However, in mid-December 1992, Hill Samuel informed the Respondents that yet further reductions in the service supplied to them would have to take place to accommodate additional cuts in their catering budget. The Respondents informed their employees that some redundancies were likely in consequence.There were discussions between Hill Samuel and the Respondents as to how the budget cuts could best be achieved and a number of alternative proposals were advanced. Eventually, on 24 January 1993, Hill Samuel advised the Respondents that they wished to adopt a plan, so far as staff levels were concerned which, (so it appears) replaced the three Appellants with a single composite post of head waitress. The hours of work of the head waitress were to be from 10.00 am to 6.00 pm. The Appellants had hitherto worked from 10.00 am to 4.00 pm.The new composite post was advertised in accordance with the Respondents' usual practice at other premises where the Respondents provided catering services, as were other employment opportunities within the Respondents' business.On 29 January 1993 each of the Appellants were interviewed by Mr Begg, the Respondents' Catering Manager at Hill Samuel, and the position was explained to them. On that same day the Respondents' Personnel and Training Manager, Nicola Bish wrote to each of the Appellants confirming that it was proposed they should become redundant and that their employment would end on 28 February 1993.The Appellant, Mrs Burley, did not apply either for the composite post or for any other vacancy advertised internally by the Respondents, despite being personally informed of the opportunity open to her so to apply, nor did Ms Jowett. The Industrial Tribunal rejected Ms Jowett's explanation that she did not do so because she thought the Respondents wanted to get rid of her, because of her age, as unjustified. Mrs Horst did apply for two of the posts advertised internally but was unsuccessful.On those facts the Industrial Tribunal concluded that the Respondents had established that each Appellant was dismissed by reason of redundancy and that, in the circumstances, the Respondents adopted a reasonable procedure and a reasonable method for selecting those to be made redundant. There was no consultation before selection, but the Industrial Tribunal held that the explanation for lack of consultation was to be found in the particular difficulties facing the Respondents and concluded that any consultation which might have taken place would have made no difference to the dismissal of each of the Appellants.We consider first the question of redundancy. Section 81(2)(b) of the 1978 Act provides (omitting unnecessary words) as follows:
"81(2) 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:- (b) the fact that the requirements of that business for employees to carry out work of a particular kind ... in the place where he was so employed, have ceased or diminished or are expected to cease or diminish."
Each of the Appellants had a written contract of employment with the Respondents which included a mobility clause. That clause provided:
"Your normal place of work is as stated in your letter of appointment which acts as part of your terms and conditions. However, given the nature of our business, it is sometimes necessary to transfer staff on a temporary or permanent basis to another location. Wherever possible this will be within reasonable daily travelling distance of your existing place of work."
The evidence before the Industrial Tribunal was to the effect that the clause had never been invoked by the Respondents, but was included to cover the situation where a client company moved premises within the City of London, so that staff would be contractually obliged to move to those new premises and continue to supply services to the client. Whilst the Respondents conceded that it was a theoretical possibility that under this contract of employment the Appellants could have been required to work for another client of the Respondents, in practice the clause was never invoked for that purpose.We have to observe that if that is the reality, the clause is drawn in very different language to that which it sought to achieve. However, it is submitted by Mr O'Dempsey that the reason for the provision of the clause is irrelevant; it is the contractual effect that matters.The Appellants submit to this Tribunal that the words contained within Section 81(2): "in the place where he was so employed", do not mean the place where the employee in fact worked but the place where, under his contract of employment, he could be required to work. The correct test it is submitted is not whether the requirements of the business for the employee to carry out the particular work he had actually been doing had ceased or diminished, but whether there had been a cessation or diminution in the kind of work he could, by his contract, lawfully be required to do.In support of that proposition, Mr O'Dempsey relies upon the decision of the Court of Appeal in Mumford v Bolton & Paul Ltd [1971] ITR 76, as applied by other decisions at first instance.For the Respondents it is argued that the contractual test advanced on behalf of the Appellants is not appropriate. On the plain words of the statute, submit the Respondents, the place where the Appellants were employed was Hill Samuel and it is the situation there, and only there, which had to be taken into account. Submits Mr Underwood, on behalf of the Respondents, if the activities of an employer in a particular place are diminished, that is a redundancy situation whatever may be the position so far as the total workforce of the employer is concerned. He submits that the decisions relied upon by the Appellants do not support the proposition advanced and are irrelevant to the construction of Section 81.Mr Underwood relies on a decision of this Tribunal in Bass Leisure Ltd v Thomas [1994] IRLR page 104. The thrust of that decision is to this effect, namely that the place where the employee was employed for the purposes of Section 81(2) is established by a factual enquiry taking into account the employee's fixed or changing places of work, but not those contractual terms which make provision for the employee to be transferred to another place of work. Those competing contentions raise interesting and important issues. For their proper determination there must be an evidential and factual matrix into which they can be put. Regrettably, no such factual matrix exists here.The extent to which the issue of redundancy was canvassed before the Industrial Tribunal in this case is not clear. The notes of evidence disclose no reference to the total size of the Respondents' workforce and even the position of the workforce at Hill Samuel is opaque. There are only oblique references to whether other employees at different client sites were being made redundant at the material time. There was certainly no consideration of this issue in the Tribunal's extended reasons. However, it is in our judgment apparent that there was no express or implied acceptance of redundancy by any of the Appellants. Indeed, there are indications to the contrary, in particular, in the original application of Mrs Horst and in cross-examination about the mobility clause to which I have referred.In those circumstances, the Tribunal had facts before it which raised the question as to whether there was any redundancy at all. That is a question of mixed law and fact which it is for the Tribunal to consider in the first instance. We are satisfied that in reality the Tribunal did not consider that matter. On that ground therefore, the appeal is allowed and the matter will be remitted to an Industrial Tribunal for re-hearing.The Appellants further submit that the Industrial Tribunal fell into error in concluding that the Respondents acted reasonably within the meaning of Section 57(3) of the Employment Protection (Consolidation) Act 1978 . The Industrial Tribunal expressed its conclusions on that matter in terse language. It expressed itself as follows:
"6 ... We are satisfied that, in the circumstances, the Respondents could not have consulted their staff earlier than the end of January ... and that, in all the circumstances, the Respondents adopted a reasonable procedure and a reasonable method for selection. Whilst there was no consultation before the Respondents chose those who were to be made redundant, the lack arose from the Respondents' peculiar difficulties and their employees had an entire month after they had been told of their redundancy whilst they worked out their notice in which to make any suggestions or enquiries that they desired. ..."
First, it is submitted to us that the Industrial Tribunal did not properly take account of the Respondents' failure to consider redeployment prior to notification of dismissal. In redundancy cases there is of course an obligation on the employer to make proper efforts to seek alternative employment for the displaced employee. That obligation is an important factor in analysing the question of fairness. We have been referred to the well-known decision of Vokes Ltd v Bear [1973] 1 RLR 363. That decision is of course a guideline and not a tramline, but the matters therein dealt with have considerable importance.Secondly, it is submitted, the Industrial Tribunal erred in taking into account the procedural steps taken by the Respondents after notification of dismissal, in particular, efforts to obtain alternative employment for the Appellants, though we observe that the evidence suggests rather that the Respondents gave the Appellants the opportunity themselves to obtain alternative employment rather than making any efforts themselves.Since the employers took no steps whatsoever to assist their employees prior to the notification of redundancy, the Tribunal must have relied upon matters which took place after notification of dismissal in reaching the conclusions to which we have referred. Those events taking place after notification of dismissal may be relevant to the intention of the Respondents at the time of the decision to dismiss. If the Tribunal took them into consideration for that effect, it may well be that the Appellants' argument would be of less substance, but we simply do not know. The findings are wholly silent on the issue.The third matter relied upon by the Appellants is that there was no individual consultation, and that that was given no or no sufficient weight by the Industrial Tribunal. We are less impressed by this point. The Tribunal found as a fact that any consultation which the Respondents could have undertaken would have made no difference to the result.Next, the Appellants argue that the efforts made by the Respondents to redeploy the Appellants were insufficient to entitle the Industrial Tribunal to conclude that the Respondents acted reasonably. That is a question of fact and degree upon which again the reasons are largely silent.Finally, it is submitted that the Industrial Tribunal finding that the method of selecting those to be made redundant was reasonable, is not supported by evidence since in reality there was no evidence as to what method they used and certainly no finding as to what method they used.Mr Underwood, for the Respondents, submits that the selection was in reality self-selection. That may or may not be so. We do not know and the evidential basis for the finding that there was here a reasonable method for selection is tenuous at best.Those matters taken cumulatively demonstrate, it is submitted, that the Industrial Tribunal failed to apply the statutory test laid down in Section 57(3) of the 1978 Act. Had they done so, the Appellants contend, they would have concluded that the dismissal of the Appellants was unfair.It may be that the Tribunal correctly asked all the right questions and reached answers which it was entitled to do on the evidence adduced. We remind ourselves that the Tribunal's reasons are given in particular so that the losing party may understand why he or she has lost and we must not construe the reasons with the rigour of a parliamentary draughtsman, but we are all unanimously left at the end of this appeal with a feeling of uneasiness. We do not seek to encourage prolixity in the giving of extended reasons, but it must in our judgment, be apparent from those reasons that the correct test has been applied and proper consideration given to the appropriate evidence.The decision of this Industrial Tribunal failed to achieve either of those ends on the issue of unfairness. It may be that it was entitled to reach the conclusions that it did. We simply do not know. On this ground too, therefore, we allow this appeal and further direct that the applications be remitted to the Industrial Tribunal for re-hearing.We have considered whether the matter should be determined by the same or a differently constituted Tribunal. The hearing of all three applications lasted only one day. The factual issues are not complex. We take the view that in fairness to all parties the matter should be re-heard before a different Tribunal and we so order.