Beale v Variety Floors Group [1996] UKEAT 863_95_0702

EAT
Beale v Variety Floors Group
[1996] UKEAT 863_95_0702 · 1996-02-07

JUDGE C SMITH QC :

This is an appeal by the Applicant before the Industrial Tribunal, Mr R A Beale against the decision of an Industrial Tribunal sitting at Reading on 22 June 1995 when the Industrial Tribunal held unanimously, firstly, on a preliminary point that the Applicant was an employee of the Respondent Company, Variety Floors Group but, secondly, that the Appellant before us was not entitled to a redundancy payment or money in lieu of notice.The ground of appeal which has been argued before us today by Mr Shepherd on behalf of the Appellant (we should add that he was the Union representative who had represented Mr Beale before the Industrial Tribunal) was that the Industrial Tribunal unfortunately erred in law in one respect only, namely, that they did not give consideration to a submission that was made to them on behalf of the Appellant to the effect that the Appellant had been dismissed so that his employment had terminated and that he was entitled to a redundancy payment on that basis.The Respondent, on the other hand, represented before us today by a Consultant, Mr McDonald, who also represented the Respondents before the Industrial Tribunal, submits that there was no such error on the part of the Industrial Tribunal. It is in the light of those submissions that we must first of all look at the decision and we must set out the background and the relevant facts, so far as they are necessary for us to determine this matter.It is clear from the extended reasons of the Industrial Tribunal that the Appellant had commenced work with the Respondent Company as a carpet fitter/floor layer from 2 February 1980 and it was his case maintained before the Industrial Tribunal on the preliminary issue, accordingly, that he had been employed as an employee of the Respondent Company for about 14 years.The first 17 paragraphs of the Industrial Tribunal decision were taken up with setting out the facts that they found in relation to the issue as to whether or not the Appellant was an employee because it was the Respondent's case on the preliminary issue that the Appellant was not an employee but was engaged by the Company as a labour-only sub-contractor and it was their case that the Appellant could not claim an entitlement to a redundancy payment as he was not an employee of the Company. There is a great deal to be found in the first 17 paragraphs of the decision in relation to that issue and there is no need for us to set out those matters at all. They speak for themselves and all we need to refer to is the ultimate decision on that issue and that is expressed at paragraph 17:
"Having considered the arguments of the respective parties, we have unanimously come to the conclusion that on the balance of probabilities, we find the applicant was an employee. We considered carefully the contentions which have just been set out, but we came down in favour of the applicant who quite clearly worked under the control of the respondent."
The Industrial Tribunal concluded at the end of paragraph 17:
"It is for those reasons that we have reached our finding on a preliminary point."
It is at this stage that we find that the plot thickens, so to speak, because it is clear from the way in which the remainder of the extended reasons are worded, that is to say, paragraphs 18 to 21, that the Industrial Tribunal only considered one argument in relation to the entitlement to a redundancy payment, namely, an argument that was based upon s.88 of the Employment Protection (Consolidation) Act 1978, which is the section which is concerned with the right to a redundancy payment by reason of lay-off or short-time.The Industrial Tribunal, having considered that section in some detail, concluded that the Appellant could not succeed in relation to that section for two reasons, the second of which was that the Appellant had never served any notice of termination of employment as required by s.88(2)(a). Accordingly, on that basis, the Industrial Tribunal decided that the Appellant had no right to a redundancy payment. The Industrial Tribunal, in paragraph 18, stated as follows:
"In this case there was no termination of employment as is normally required to establish the right to a redundancy payment."
We were told today by Mr Shepherd that before the Industrial Tribunal the following point was taken on behalf of the Appellant. The Appellant had originally written to the Respondents on 12 January 1995 a letter in which he stated that as a longstanding employee for the last 14 years, who had been laid off by the Company since 5 November 1994, he was in a situation of redundancy because the lay-off had gone past four weeks.In our judgment it is clear that had the matter rested there that letter puts forward a claim for redundancy based upon s.88, despite Mr Shepherd's attempts to persuade us to the contrary. However, the matter did not end there because the Respondents wrote back on 16 January 1995, within a few days of receiving the letter, in the following terms:-
"... contrary to your letter you have never been directly employed as an operative for this company.

Our records show that you have been employed on a sub-contract basis ..."

They were thus taking the position that the Appellant was not an employee at all. They continued in this way in the last paragraph:-
"In view of this we do not consider that you have a claim for redundancy and as in the past we will continue to consider to consider you for work as a sub-contractor when such work is available."
Mr McDonald sought to persuade us in argument that that letter was a counter-notice under s.88(4) of the 1978 Act but, in our judgment, it plainly is not, since it does not purport to be a document issuing from an employer. On the contrary, it involves an assertion that the Appellant was not an employee at all.Mr Shepherd informs us, and we accept, that one of the submissions that was made, indeed, on his account of the matter, the principal submission that was made to the Industrial Tribunal by him on behalf of the Appellant was that that letter, which we have just referred to and, in particular, the last paragraph of that letter, amounted to conduct on behalf of the Respondents which amounted to a direct termination of the Appellant's contract of employment in this sense: that it amounted to a declaration by the Respondents that the Appellant was not employed and it was Mr Shepherd's submission to us that as such it could amount to a notice of termination of employment. Mr Shepherd submitted to us that this argument was presented to the Industrial Tribunal and that they have never dealt with it at all save by one sentence in paragraph 18, to which we have already referred, namely:
"In this case there was no termination of employment as is normally required to establish the right to a redundancy payment."
In other words, the Industrial Tribunal has not made any analysis of the argument that Mr Shepherd says was addressed to them in relation to the effect of the letter of the 16 January 1995.Mr Shepherd's submission to us was that the way in which the Industrial Tribunal came to deal with the position under s.88 was the following: it was not the Appellant who raised a claim based on s.88 at all. According to Mr Shepherd it was the Respondents who themselves saw fit to raise s.88 in accordance with their alternative document, which is at page 11a in the bundle, which asserted that the Appellant had been laid off due to a temporary shortage of work on the basis, contrary to their primary contention, that the Appellant was an employee. Mr Shepherd claimed before us that it was in this way that the Industrial Tribunal's focus on the matter was diverted to a consideration of s.88, whereas they never got round to considering the argument that was addressed to them in relation to direct termination based on the letter of 16 January 1995. It was Mr Shepherd's submission that the Respondents, so to speak, put up the legal ninepin of s.88 in order to be able effectively to knock it down by demonstrating, first of all, that the timing was not right because there was something wrong with the precise calculation of the number of weeks and, secondly, and much more cogently, that there never had been any notice of termination served by the employee Appellant.Mr McDonald has submitted to us that he has no recollection of such an argument being put forward. Mr McDonald was careful to say that he was not positively disputing that Mr Shepherd's submission was put forward. Mr McDonald told us that it was not Mr Shepherd's primary submission, that is to say, the submission that there was a direct termination of employment by the Respondents' letter of 16 January 1995.We have considered this matter with care. We note what the Employment Appeal Tribunal said when they gave leave in relation to this matter for the matter to proceed to a full hearing in a helpful extract from their judgment, which we have seen, which is along these lines:
"However, what Mr Shepherd tells us is that, when he represented the appellant in the Industrial Tribunal, it was the employers who were raising the issue of Section 88, if only to knock it down on procedural and technical grounds. Mr Shepherd says that once the Tribunal had found Mr Beale to be an employee, it was Mr Beale's case that he had been dismissed by his employer in November 1994."
We notice that, as we understood the argument today, it was really Mr Beale's case that he had been dismissed in consequence of the letter of 16 January 1995 rather than in November 1994. Nevertheless, we consider that Mr Shepherd's recollection of what took place before the Industrial Tribunal is reliable.In our judgment, at the end of the day, in what is rather an unusual case, we have reached the conclusion that the Industrial Tribunal did err in law in this way: that they appear to have overlooked the submission that was made to them that there had been a dismissal here. In our judgment, for that reason, it would be right in all the circumstances for the matter to go back to the same Industrial Tribunal in order that they can give further consideration to that submission and, accordingly, for those reasons, the appeal is allowed.