Colchester Borough Transport Ltd v Caryer & Ors [1996] UKEAT 348_95_2802

EAT
Colchester Borough Transport Ltd v Caryer & Ors
[1996] UKEAT 348_95_2802 · 1996-02-28

JUDGE BUTTER Q.C. :

This is an appeal by Colchester Borough Transport Ltd in respect of a decision of an Industrial Tribunal at Bury St Edmunds. The tribunal held a five day hearing and gave its extended reasons for its decision on 27th February 1995 when they unanimously decided that the applicants claims under the Wages Act failed but that all the applicants were unfairly dismissed.The appellants are dissatisfied with that decision and maintain that the tribunal below erred in law and/or reached a decision which was in certain respects perverse.Before the tribunal it was conceded by the employers that the applicants were constructively dismissed when they refused to accept changes to their contracts of employment. The background can be stated quite shortly. All the applicants were bus drivers, the respondents below, the appellants here, were a long established bus company originally operating as part of the local authority, but as from 1986 were a limited company owned by Colchester Borough Council.By the second half of 1993 the company was in a bad financial position, so bad indeed that the Borough Council decided to put it up for sale. A potential purchaser appeared, the British Bus Company PLC, and its director, Mr Martin, made a visit and did some rapid evaluations. There were negotiations with union representatives, and Mr Martin addressed a meeting on 10th November 1993 after which he drafted a letter intended for signature by employees in which they would agree to a variation in the terms of their employment.By 19th November 1993, Mr Martin learnt that only 12 out of 83 drivers had not signed and he decided to go ahead because of the financial pressures and hoping that the 12 would, as he put it, "come round on completion". The agreement to acquire the shares in the company was signed on 22nd November 1993, and a new manager, Mr Turner, was installed the following day.Within a couple of days or so, Mr Turner held interviews with the 12 men. According to the findings of the tribunal, he told them that they could only work on the new terms. The tribunal below found that the employers had made it quite clear to the 12 that it was repudiating its contract of employment with each of them. The 12 then had the choice of accepting the repudiation or agreeing to the new terms. The nine applicants accepted the repudiation by not attending for work on Monday, 29th November 1993.The tribunal decided that that was the effective date of the constructive dismissal, though history shows that there were some events shortly thereafter which may be of significance.In their extended reasons the tribunal set out at paragraph 10 the position in relation to Section 57(1)(b) and concluded on the evidence that the company had some other substantial reason within the meaning of that subsection for dismissing each of the applicants.The tribunal then went on in paragraph 11 to summarise the law and referred, accurately, to certain parts of Harvey on Industrial Relations and Employment Law . Under c. of paragraph 11 the tribunal said:
"The question is whether the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee."
They went on in paragraph 12 to say to deal with the question of reorganisation:
"If it had not taken place no one would have had any job. Similarly, these employees may have acted reasonably in refusing to accept new terms which they could not afford and yet we find that the employer was acting reasonably in seeking to impose them."
They then went on accurately to say:
"We still have to determine whether the dismissals were fair under section 57(3)"
and then said:

"and we find that they were not."

They then refer to Section 57(3), and in paragraph 14 of their reasons they remind themselves that it is not for them to substitute their own decision but must ask themselves "Was this dismissal within the band of reasonable responses of a reasonable employer?" They added they had to look at the substance and the procedural aspects of the dismissal.Paragraph 15 has been subjected before this tribunal today, to minute examination. I need not read out the whole of that paragraph, but it is appropriate that I read out the first few sentences. The tribunal stated:
" In the respondent's favour is that fact that a substantial majority had accepted the new terms. But having decided that it must dismiss those who would not accept them the respondents had an opportunity to bring their contracts to an end lawfully by appropriate notice."
Some criticism is made of the phrase "it must dismiss those". The next sentence goes on to say:
"It was open to the respondent to require the 9 to work their notice - or to keep them at home paying them through the notice period - or to dismiss them at once with pay in lieu of notice. The respondents did none of those things."
Some argument has been presented to us, with regard to the appropriate construction of that sentence. It is a possible construction that the Industrial Tribunal were saying that these were various possible courses which the employers could have taken, not necessarily that it would have been right to do so. But in any event, the effect of the decision of Industrial Tribunal seems to us to be that they thought it appropriate and necessary to look at the overall position to see what in fact was happening and the way in which these employees were being dealt with. In the course of paragraph 15 they refer to what looked to them as "brinkmanship" on the part of Mr Turner, and they pointed out that:
"According to him he refused to say what would happen to the applicants if they turned up on the Monday to work only on the old terms. He said [ thus leaving it open ] "We'll cross that bridge when we come to it."
In paragraph 16, the tribunal states in the first sentence:
" On the evidence we find no justifiable reason for seeking to avoid the contractual obligation of notice."
Paragraph 18 sets out the conclusion. I think it appropriate to read the last two sentences:
"We accept [ they say ] that Mr Turner did not have long to decide how to act but we are quite clear that his actions were unnecessarily brutal and not what a reasonable employer would have done. The question of notice was not addressed; it could have been and it should have been and that is why the dismissals are unfair."
On our reading of that paragraph and of the decision as a whole, the tribunal based its decision on a number of factors. They refer to Mr Turner's actions. Clearly, they consider that he did not give appropriate consideration to the question of notice, and that he behaved towards the employees in a manner which was unacceptable.In the course of argument before this tribunal today, on behalf of the appellants, the employers, the cases of Treganowan v Robert Knee [1975] ICR 405 , together with the case of BSC Sports & Social Club v Morgan [1987] IRLR 391 . We consider that those cases are distinguishable on the grounds put forward by Mr Segal and must be considered in any event in the light of the House of Lords decision in the leading case of Polkey v Dayton Ltd . The one passage from that case to which we may make reference is to found in the speech of the Lord Chancellor when he says at paragraph 19 in the report before us:
" Further, in my opinion, the statutory test shows that at least some aspects of the manner of dismissal fall to be considered in considering whether a dismissal is unfair since the action of the employer in treating the reason as sufficient for dismissal of the employee will include at least part of the manner of the dismissal."
In our judgment, the tribunal were entitled to decide that the employers had embarked upon a course which was unacceptable, and behaved in a way which a reasonable employer would not have done in bringing about a dismissal which was unfair.We have considered the further arguments addressed to us. It is urged on behalf of the appellants that the tribunal substituted their own views and did not apply the objective test to which they had referred in the course of their decision. We do not accept that argument.It was said further, that the tribunal appeared to rely upon evidence after the constructive dismissal. There were events which were relevant as indicating the attitude and conduct of the parties after 29th November 1993 and the case of Devis v Atkins [1977] IRLR 314 in which it was held that an employer cannot establish that a dismissal was fair by matters which he did not know at the time, does not, in our view, assist the appellant in this case.Finally, it is urged that the tribunal were perverse in their decision. We have listened to the arguments presented to us in this respect, and we have considered further the application that we should adjourn for the Chairman's notes of evidence to be produced. From what we have been told, we do not believe that production of those notes would affect our overall conclusion. We are satisfied that there was evidence upon which the tribunal were permitted to come to the conclusion which they did.In the end, we are not persuaded that the Industrial Tribunal erred in law or reached a conclusion which they were not entitled to reach. In the circumstances, it is our unanimous view that this appeal fails and is dismissed.