Havering Hospitals NHS Trust v Peek [1996] UKEAT 204_96_1710

EAT
Havering Hospitals NHS Trust v Peek
[1996] UKEAT 204_96_1710 · 1996-10-17

JUDGE PETER CLARK :

Mrs Peek commenced a period of continuous employment in the National Health Service in February 1973. On 7th January 1991 she commenced employment with the Barking Havering and Brentwood Health Authority, later succeeded by these appellants, the Havering Hospitals NHS Trust ["the Trust"]. In June 1992 she entered into a written contract of employment with the Trust. Her job title was Planning and Contracts Manager. Her conditions of service, other than in respect of remuneration, were those of the General Whitley Council ["Whitley"], subject to immaterial exceptions. Those conditions are contained in the Whitley Handbook. We are concerned in this case with section 45 of the Handbook, which is entitled "Arrangements for Redundancy Payments."Those arrangements provide for circumstances in which the employee is entitled to a contractual, as opposed to statutory, redundancy payment in the event of dismissal by the employer by reason of redundancy.In early 1994 the Trust decided to reorganise their management structure. The post held by Mrs Peek, that of Planning and Contracts Manager, was to disappear in the reorganisation. A new and different post, that of Marketing Manager, was to be created. She was encouraged to and did apply for that new post. Her application was unsuccessful. Accordingly, by letter dated 29th April 1994 the Trust gave her three months notice of termination of her employment to take effect on 29th July. That letter indicated that she was being made voluntarily redundant and a redundancy payment calculation, based on the Whitley formula applicable to her length of NHS service was made. Such payment, based on 21 years service, equated to 42 weeks pay, that was £25,516.53. She was invited to sign the letter to signify acceptance of those arrangements but declined to do so, because, she told the Industrial Tribunal, she regarded her redundancy as compulsory, not voluntary.Paragraph 7 of section 45 of Whitley provides for an exclusion from eligibility to receive a contractual redundancy payment in these circumstances:
"7 Employees otherwise eligible shall not be entitled to redundancy payments under these arrangements if they:-
. ..7.4 at the date of the termination of the contract have obtained without a break or with a break not exceeding 4 weeks suitable alternative employment with the same or another Health Service authority in Great Britain or NHS trust in Great Britain; or7.5 unreasonably refuse to accept or apply for suitable alternative employment with the same or another Health Service authority in Great Britain or NHS trust in Great Britain; ...""Suitable alternative employment" is defined in paragraph 8 as follows:
"8 Suitable alternative employment for the purposes of paragraph 7 refers to both the place and to the capacity in which the employee would be employed.
The following considerations shall be applied in deciding whether a post is suitable alternative employment and whether it was reasonably refused:8.1 Place. A post is normally suitable in place if it involves no additional travelling expenses or is within 6 miles of the employee's home. If the new post is at a great distance, the fact that assistance will be given with extra travelling expenses (see paragraph 6 of section 23) will normally outweigh any added difficulties in travel, but exceptionally an employee's special personal circumstances would be considered in comparison with the travel undertaken by other employees in comparable grades. If the post is too far for daily travel it will be reasonable since removal expenses will be payable to require staff other than those who can be expected to seek employment in their neighbourhood to move home unless they can adduce special circumstances such as age.8.2 Capacity. Suitable alternative employment may not necessarily be in the same grade; the employment should be judged in the light of the employee's qualifications and ability to perform the duties. Nor need it be at the exactly the same pay. A post carrying salary protection for the employee should on that fact alone be treated as suitable in capacity."Reference should also be made at this stage to paragraph 9 which reads:
"9. For the purposes of this scheme any suitable alternative employment must be brought to the employee's notice in writing before the date of termination of the contract and with reasonable time for the employee to consider it; the employment shall be available not later than 4 weeks from that date. Where this is done, but the employee fails to make any necessary application, the employee shall be deemed to have refused suitable alternative employment. Where an employee accepts suitable alternative employment the trial period provisions in section 84(3) to (7) of the Employment Protection (Consolidation) Act 1978 shall apply."
During the three months notice period the Trust identified two alternative posts, but it was common ground between the parties that those posts were unsuitable.However, before her employment with the Trust ended on 29th July she successfully applied for a post with the South Essex Health Authority ["South Essex"]. The post was that of Local Health Commissioner - Castle Point/Acute Services. A formal offer of appointment to that post was made to Mrs Peek by South Essex in a letter dated 18th July 1994, to commence on 5th September 1994. She informed the Trust's Director of Personnel, Mr Murphy, of that offer by letter the following day. Mr Murphy replied on 20th July 1994 in these terms:

"Dear Lyn

Thank you for your letter dated 19th July 1994 confirming your offer of employment with South Essex Health Authority. Although you refer to the telephone conversation, we actually met face to face on 18th July when you confirmed that the offer of employment was at SMP15 an equivalent grade to your existing post. You also indicated that the post was available immediately but that you had chosen to take a four week break and visit your mother. South Essex have confirmed that the post is available immediately following the 29th July 1994, your date of termination, and in these circumstances I must advise you that I believe you do not meet the eligibility criteria for a redundancy payment (para 7 section 45 GWC) in that you have access to suitable employment within the NHS immediately following your date of termination."and he concludes by wishing her every success in her future employment.Her employment with the Trust then terminated on 29th July. She did not receive a redundancy payment. On 26th August 1994 she presented an originating application to an Industrial Tribunal, complaining both of unfair dismissal and claiming a contractual redundancy payment.Both claims were resisted and the matter came before the Industrial Tribunal sitting at Stratford on 9th and 10th November 1995. It dismissed her complaint of unfair dismissal. Against that decision Mrs Peek does not appeal. However, the tribunal held that she was entitled to a contractual redundancy payment. Against that decision the Trust now appeals.In concluding that the respondent was entitled to a redundancy payment, the Industrial Tribunal made the following findings against the appellants:(1) that she did not obtain alternative employment with South Essex until more than 4 weeks after the termination of her employment with the Trust, holding that she obtained the new employment not when she accepted the offer made by South Essex, but when she took up the post on 5th September 1994. Accordingly, held the tribunal, paragraph 7.4 of Whitley did not bite.(2) Alternatively, that the employment with South Essex was unsuitable as defined by paragraph 8. First, on the grounds that at some time in the future it was the intention of South Essex to relocate the place at which she was to work initially, Billericay, to either Rayleigh or Southend, which would then offend paragraph 8.1, and secondly that the new job was unsuitable on the ground that it involved a net loss of pay of £2,000 p.a.; principally because she was unable to take accumulated Performance Related Pay with her to the new job. The tribunal assessed that she would continue to suffer what in their view was a significant pay differential between her old and new jobs for some 5 years.In advancing the appeal, Mr McCullough accepts that in order to succeed he must persuade us that we can and should interfere with the tribunal's finding that this alternative employment with South Essex was unsuitable.He submits first that the place of employment with South Essex must be assessed and judged at the date on which the employment was accepted by Mrs Peek, that is at latest in July 1994. At that time her new place of work was suitable, so the tribunal found. The fact that in the future there was a possibility that she may be relocated was immaterial, submits Mr McCullough.Secondly he argues that if the tribunal's finding as to the place of employment is unsustainable, that vitiates the tribunal's overall conclusion as to suitability.Third he submits that in concentrating only on the pay reduction when considering paragraph 8.2 the tribunal failed to consider the matter of suitability overall, including matters such as grade, qualification and travel expenses, as to which the tribunal made no finding of unsuitability.Further, he argues that £2,000 p.a. is not "nearly £200 per month" as the tribunal say in paragraph 10 of their reasons. That exaggerates the extent of the net wage loss by some 20%.Alternatively, he submits that the Industrial Tribunal's conclusion as to suitability was perverse.We are unable to accede to these submissions. In our judgment the question of whether alternative employment is suitable or not is essentially one of fact and degree for the Industrial Tribunal. As we read paragraph 10 of the reasons the tribunal found two reasons which separately and cumulatively rendered the alternative employment unsuitable within the meaning of paragraph 8. Specifically, we are satisfied that it was open to the tribunal to find that a 10% loss in net earnings over five years rendered the alternative employment unsuitable.On that basis it is unnecessary for us to decide what is the meaning of the word "obtained" in paragraph 7.4 and we have heard no argument on that aspect of the case. However, there is one further point raised by Mr McCullough with which we should deal.He submits that by accepting the South Essex offer before termination of her employment with the Trust the respondent must have accepted that the employment was suitable. We are quite unable to see why. She took the best job she could find rather than face unemployment.What is clear, from paragraph 9 of Whitley, is that it would have been open to the Trust to have notified her in writing of other suitable alternative employment prior to termination, and had she failed to apply for such a post, after having had a reasonable time for consideration, she would then be deemed to have refused suitable alternative employment and have lost her entitlement to a redundancy payment. The fact that she had accepted an offer of unsuitable alternative employment would not have assisted her. However, that did not in fact happen.In these circumstances we must dismiss this appeal.Leave to appeal to the Court of Appeal denied.