Jones v Burdett Coutts School [1997] UKEAT 247_96_1601

EAT
Jones v Burdett Coutts School
[1997] UKEAT 247_96_1601 · 1996-11-26
MR JUSTICE LINDSAY: We have before us the appeal of Mr C.W. Jones against the decision of the Industrial Tribunal under the Chairmanship of Mr V.C. Jordan signed on the 11th January 1996. The hearing before the Industrial Tribunal took place over some three days between January and July 1995. The Respondent below - The Governing Body of Burdett Coutts School - is the body responsible for the running of that school, a school for younger children in the City of Westminster. At the start of the events Mr Jones was and had for many years been the Schoolkeeper of the school. At the outset of the proceedings there had been some doubt as to who was Mr Jones's employer; it was either the Governing Body or Westminster City Council, which was joined as Second Respondent. However, the hearing before the Industrial Tribunal proceeded as if only the Governing Body was concerned and Mr Jones was content before us to proceed on that basis. We are prepared so to proceed and accordingly we do not need to go into the question of quite who is Mr Jones's employer. The City of Westminster has taken no part in argument before us which has proceeded on the basis that it is the Governing Body ("the Governors") which is properly both the Respondent to Mr Jones's appeal and also his employer.The finances of the school were organised in such a way that any money saved on services and maintenance was able to be spent on teaching and educational materials and the Governors have thus from time to time sought economies on the services side. They began to investigate, in conjunction with Westminster City Council, the contracting out of the cleaning arrangements made for the school. On the 24th November 1993 the Governors agreed to bring in external contractors for cleaning. They saw this change as changing the role of the schoolkeeper. Instead of a schoolkeeper there was to be a site-manager at a lower remuneration. On the 11th May 1994 the Governors decided to offer the site-manager's job to Mr Jones who had for many years been the schoolkeeper but they also decided that if he failed to accept it within 6 weeks then he was to be declared redundant. Accordingly on the 13th May Mr Jones was offered the site-manager's job in writing. He was warned that if the job was not accepted he would be made redundant and would be given 12 weeks notice. This turn of events threatened not just his job but the roof over his head because accommodation was provided with the job although it has to be said that Westminster City Council undertook that it would provide him with alternative accommodation were he to leave. On the 25th May Mr Jones accepted the new job but added that he was seeking legal advice as to unfair dismissal. He took up his duties as site-manager and has remained a site-manager ever since. On the 12th September 1994 he completed his "IT1" - his application to the Industrial Tribunal. It was for "unfair selection for redundancy or in the alternative unfair dismissal". Little could be made of "unfair selection for redundancy" as there was only one Schoolkeeper, Mr Jones, so the case was contested chiefly in the area of whether or not there was redundancy and unfair dismissal.The Industrial Tribunal held that there was a significant reduction in Mr Jones's duties on the introduction of contract cleaning. There was, in the view of the Industrial Tribunal, a material change in the responsibilities of Mr Jones also reflected in the hours of work. The Industrial Tribunal continued:-
"... There was to be a termination of the Applicant's contract of employment by reason of a diminution of the need for the Applicant to be involved in the cleaning of the Burdett Coutts School, a substantial part of his former duties, and this was to be a dismissal by reason of redundancy as defined in section 81 (2) (b) of the Employment Protection (Consolidation) Act 1978."
There was, though, as the Industrial Tribunal found, an immediate re-engagement of Mr Jones as site-manager. The Industrial Tribunal went on:-
"The Applicant has continued to work for the Respondent as site-manager in pursuance of the offer accepted by him on the 25th May 1994 which took effect from the 13th June 1994. Re-engagement took immediate effect and accordingly, in our unanimous opinion, the Applicant is not to be regarded as having been dismissed by the Respondent, this by reason of the provisions of section 84 (1) of the Employment Protection (Consolidation) Act 1978. The trial period required by section 84 (4) was satisfied, in effect, by continuing the Applicant's salary at his previous level for longer than four weeks."
Crucial, therefore, to the Industrial Tribunal's reasoning is consideration of the true construction of section 84 (1) of the 1978 Act.Section 84 is found in Part VI of the 1978 Act; that Part runs from section 81 to section 120 and is headed "Redundancy Payments". The 1978 Act is described in its heading as "An Act to consolidate certain enactments relating to the rights of employees arising out of their employment .......".Section 81 ("General provisions as to right to redundancy payment") uses the word "dismissed" or "dismissal". Section 82 ("General exclusions from right to redundancy payment") also uses the word "dismissal". There is thus good reason why section 83 should turn to define those terms and it does so. "In this part", begins section 83, thereby indicating that the definition thus given is for the purposes only of Part VI. Moreover, the definitions of the words "dismissal" and "dismissed" as provided for in section 83 are exclusively made subject, inter alia, to section 84, thus indicating that sections 83 and 84 are intended to be read together. As far as it is relevant to a constructive dismissal case of the kind with which we are immediately concerned the relevant definition of "dismissal" is as follows:-
"83 (2)..An employee shall be treated as dismissed by his employer if, but only if, - (a) .............. (b) .............. (c) the employee terminates that contract with or without notice, in circumstances (not falling within section 92 (4)) such that he is entitled to terminate it without notice by reason of the employer's conduct."
So far, therefore (and leaving aside s. 83's provision that it is subject, inter alia, to s. 84), the notion of constructive dismissal in a redundancy context is exactly as it is in the context of unfair dismissal as dealt with in Part V of the Act; section 83 (2) (c) exactly corresponds for immediate purposes with the definition of dismissal in section 55 (2) (c). But then, in the section 84 to which s. 83 is subject comes a provision which has no equivalent in Part V. Leaving out words not necessary for our immediate purposes, section 84 (1) reads as follows:-"1. If an employee[...] is re-engaged under a new contract of employment in pursuance of an offer .... made by his employer before the ending of his employment under the previous contract, and the ...... re-engagement takes effect ..... immediately on the ending of that employment then subject to sub-sections (3) to (6), the employee shall not be regarded as having been dismissed by his employer by reason of the ending of his employment under the previous contract".The references to sub-sections (3) to (6) introduce the trial period notion which, as far as necessary for present purposes, provides as follows. If the new contract of re-engagement has provisions as to the capacity in which the employee is employed and other terms which differ from the corresponding provisions of his previous contract there is to be a trial period in relation to the new contract until the end of four weeks from the employee beginning to work under the new contract - 84 (3) and (4). The effect of the trial period provisions are that even if the employee has been re-engaged under a new contract he can (if, for example, he terminates his new contract, or if he gives notice so to do, within the trial period) nonetheless properly claim to have been dismissed as if he had been so treated at the end of his previous employment and as if the offer of re-engagement had neither been made nor accepted.Mr Jones did not seek to terminate his new contract or give notice to do so within any such trial period or at all. Accordingly the Governors argued before the Industrial Tribunal that there had been a re-engagement under section 84 (1), that the terms of the new contract offered did differ from the terms of the previous one for the purposes of 84 (3), that there was thus a trial period but, on Mr Jones having not taken advantage of it, there was thus a case within the last sentence of section 84 (1) namely that:-
"The employee shall not be regarded as having been dismissed by his employer by reason of the ending of his employment under the previous contract."
The force of that argument may be hard to resist in relation to the subject-matter of Part VI, the part referred to in section 83 (1), but can the argument be transplanted into and thrive in Part V - "Unfair Dismissal", the part which provides for Mr Jones' claim for unfair dismissal?As to that there are two conflicting authorities which, unhappily, were not drawn to the attention of the Industrial Tribunal. During the hearing before us it transpired that even on appeal there was to be no informed argument from both sides as to those authorities or as to the textbook comment upon them so we made provision for the point to be dealt with in written argument. We have accordingly received some 13 pages of argument from the parties since the oral hearing before us was concluded.Before turning to the authorities and to textbook comment on them it would be as well to reflect on the practical effect of the Governors' argument. It would come to this; no matter how demeaning the terms of a continuing employee's new job in comparison with his immediately previous work with the same employer, if he, the employee, is constrained by circumstances to accept the new job and to remain in it without giving notice during the short trial period contemplated by section 84 he will lose all ability to complain of his unfair dismissal under Part V of the Act, even if the employer has acted unreasonably or inequitably. There would, in such a case, be no dismissal (by reason of the concluding words of section 84 (1)) and hence no unfair dismissal. Moreover, although the argument in our case arises in relation to a dismissal said to be for redundancy, section 84 (1) does not in terms restrict the re-engagement cases to cases where there has been an actual or alleged redundancy. If the Governors are right and section 84 (1) can operate outside Part VI there would seem to be nothing to stop an argument that where there has been an accepted re-engagement within section 84 that negates unfair dismissal whatever might be the reason which the employer has shown under section 57 (1). The fact that a section 84 argument, if good outside Part VI, would deny employees' claims for unfair dismissal in those cases, perhaps the worst cases, where employees are compelled by other circumstances to accept disadvantageous re-engagements should make us pause to reflect whether that can have been intended. It might fairly be said to drive a coach and four through Part V of the Act. It seems to us so unlikely a legislative intention that we would be willing ascribe it to Parliament only if the clearest language could be found to compel us to such a conclusion.Turning to the two authorities on the point, the first is Hempell -v- W H Smith & Sons Ltd [1986] 1 IRLR p. 95 EAT per Peter Gibson J in a reserved judgment given in December 1985. Mrs Hempell was given notice of redundancy but accepted work at a lower grade for a trial period. During that trial period she was dismissed not for redundancy but because she was regarded as unsuitable. She complained of unfair dismissal in relation only to that second termination. The Industrial Tribunal held that section 84 (6) had been satisfied and that she was to be treated as if having been dismissed on the ending of the former engagement and therefore for redundancy. She had made no complaint as to that earlier termination. The EAT remitted the matter to a freshly constituted Industrial Tribunal; the Industrial Tribunal, it held, should have considered the matter, the final ending of Mrs Hempell's work, in the light of section 57 not section 84, which latter provision, it held, applied only to redundancy payment cases. Although the facts of the case are different from ours the applicability or not of section 84 to Part V unfair dismissal cases was at the very centre of the case. The EAT emphasised the separate purposes of Part V (unfair dismissal) and Part VI (redundancy payments) and, of Part VI, said:-
"It has its own provisions governing entitlement to such payments by reference to a period of continuous service. When a provision is intended to apply not only for the purposes of that Part but for the purposes of the Act, the provision contains an express statement of the effect (see section 81 (2) and section 90 (1)). Section 84 falls within Part VI and in the absence of anything to indicate that the provisions of that section are to apply more widely, we think that on their natural construction they apply only for the purposes of Part VI. As it seems to us section 84 is designed (in broad terms) to do two things: one is to provide a defence to an employer faced with a claim for redundancy payments on a dismissal in circumstances where the employee even before the dismissal obtained another job with the same or an associated employer to follow immediately or soon after the ending of his earlier employment; the other is to avoid the injustice that would be caused to an employee who by taking on a new job for a trial period might otherwise lose his entitlement to a redundancy payment even though his employment is terminated by himself or his employer during the trial period. It would seem to us to be very surprising if Parliament had intended to permit an employer to dismiss an employee unfairly in the trial period. We are encouraged in our view that section 84 only applies for the purposes of Part VI by the similar view expressed by the editors of the Encyclopaedia of Labour Relations Law, paragraph 2 - 1981."

A little later the EAT added:-

"In our opinion section 84 was not relevant to Mrs Hempell's complaint of unfair dismissal on ...."
the earlier of the two occasions.The second authority is EBAC Ltd -v- Wymer [1995] ICR p. 466 , an extempore judgment given by Judge Byrt Q.C. in December 1994. A man was made redundant on the 21st August 1992 but was then offered another place in the firm on the basis that there would be no break in his service. He returned to work but later left on his own volition on the 19th September 1992. He claimed to have been unfairly dismissed as at the 21st August 1992. His employer relied on section 84 to extinguish the dismissal of the 21st August 1992. The Industrial Tribunal had held that section 84 applied only to redundancy cases. The EAT allowed the employer's appeal on the basis that section 84 applied wherever the reason for the dismissal was redundancy. Hempell -v- W H Smith supra was cited to the EAT and had, indeed, been relied upon by the Industrial Tribunal. Unfortunately the employee was not represented before the EAT, which held, at p. 471 :-"Our judgment is that it is the substantive reason for the dismissal which determines the applicability of section 84".In context that meant that where the reason for the dismissal was redundancy section 84 (1) would be applicable. It is hard to see, as we have already noted, that, if section 84 has any application outside redundancy payments and outside the Part VI in which it is found, there is anything to stop it applying not just to dismissals for redundancy but to all dismissals. The EAT continued at p. 471 as follows:-"The facts in Hempell's case are, indeed, radically different than those in the present case and, in our judgment, one has to read the observations of Peter Gibson J. in that case in the context of that case and do what one can to apply them to the facts of the present case. We decided that it is the substantive reason for the dismissal which determines the applicability of section 84 and not the procedural aspect of such a dismissal which determines whether it has been a fair or unfair dismissal. In this case, dismissal was for redundancy. Section 84 is there to provide the employer with a defence to a claim by an employee substantially based upon the redundancy situation".The facts in Hempell's case were , of course, radically different to those in EBAC but the decision in Hempell was reached not by reference to special facts but by the application of a familiar and conventional canon of statutory construction which EBAC does not address, let alone successfully rebut.The conflict between the two cases is the subject of commentary in Harvey at paragraph 1588.02 where a number of arguments lead the learned authors to the conclusion that Hempell is to be preferred to EBAC .Miss Morgan, for the Governors, argues that although it would have been easy enough for Parliament to have provided otherwise had that been its intention, there is nothing in section 84 (1) which in terms limits its effect to redundancy payment cases. Next she says the literal meaning of the words could be much broader than Hempell suggests. It is then urged that headings such as that to Part VI of the 1978 Act are, on authority, not to control the meanings of the words used - see DPP -v Schildkamp [1971] A.C. p. 1. Miss Morgan also draws attention to the different factual positions in Hempell and EBAC .It is difficult to take exception to any of those arguments but they represent far less than the complete case. The passage to which we have referred in Harvey , which Mr Henderson adopts on behalf of Mr Jones, makes a number of telling points. Amongst them is a point which depends on the legislative history of section 84. It came into existence (albeit in slightly different terms) as part of section 3 of the Redundancy Payments Act 1965 . It related only to that subject and came into existence some 7 years before the concept of unfair dismissal was introduced. The present s. 83 (2) was then part of the same section 3 of the 1965 Act. The original 1965 provisions cannot therefore have been intended to relate to the later concept of unfair dismissal. It can hardly be expected, runs the argument, that by way of a consolidation Act such as that of 1978 (an Act which, as a consolidation Act, is to be taken not to have changed the law) the effect of the unfair dismissal provisions of sections 54 to 57 of the 1978 Act should be radically altered and that of section 84 radically enlarged, merely upon section 84 finding itself in 1978 in the same consolidating Act as the unfair dismissal provisions. There is a strong presumption that a provision in a consolidation Act does not alter the existing law - Schildkamp supra at p. 10A. Second, Harvey draws attention, as we have done, to section 83 beginning "In this part" and being subject to section 84, which is at least consistent with section 84 being part of a definition of dismissal in redundancy cases, a definition spread over a number of sections including section 84. A minor weakness of that argument is that one is still left without a clear phrase in s. 84 itself showing that extended definition is to be used only in redundancy payment cases, although seeing s. 83 and 84 as part of an extended definition, together with the words "In this part" in s. 83, must go some at least of the way . Another point relied upon in Harvey is that dismissal is defined for the purposes of unfair dismissal exclusively by reference to section 55 (2), but the weakness in that argument is that section 84 (1) is not defining dismissal but specifying a situation in which the employee is not to be regarded as dismissed.For all the force of the Governors' argument that, taken literally, the words here applied would lead, as the Industrial Tribunal held, to there being no dismissal at all, we, like Harvey , prefer Hempell to EBAC . To the undeniable force of the arguments as to consolidating enactments and as to the use, as Hempell shows, of references such as "For the purposes of this Act" where a provision is intended to have force throughout the whole Act and to the fact that section 83 begins "In this part", we would add one further consideration. It seems to us in the highest degree unlikely that Parliament should in this or any other way have intended that an employer who drives his employee into a constructive dismissal should be able to escape the statutory sanctions provided in Part V (not merely in redundancy cases but in all cases) should he also be able firstly to drive that employee into accepting a re-engagement, however inferior, and secondly drive him yet further to keep at it for at least four weeks. We do not find the clearest language which, as we indicated earlier, we would need to find were we to accede to the Governors' argument that something so improbable should have been intended.Accordingly, we hold that where section 84 (1) is satisfied it is only for the purposes of determining any liability of the employer for redundancy payments under Part VI that the employee is not to be regarded as having been dismissed.We would wish to emphasise that, as the law on the subject was not put to the Industrial Tribunal, our decision represents no criticism whatsoever of the Tribunal; even so it follows that the Industrial Tribunal's decision as we have so far described it, that there was no dismissal because section 84 negated any, cannot stand for error of law. The investigation required by section 57 never took place because of the mistaken view that section 84 (1) rendered it unnecessary. However, at the very end of its Extended Reasons the Industrial Tribunal said:-"Had we not found such potential dismissal to be by reason of redundancy we should have found it to be reason of substantial reorganisation within the terms of section 57 (1) (b) and potentially fair".For the Industrial Tribunal to have held that it would have found there to have been a dismissal for "some other substantial reason" within section 57 (1) and would have found it "potentially fair" falls far short of a finding either that there was a substantial reorganisation that amounted to "some other substantial reason" within section 57 (1) (b) or that dismissal on that account was fair. We thus cannot regard this as being an unconditional true alternative route by which the Industrial Tribunal came to its conclusion.That being the case, there is no acceptable route left by which the Industrial Tribunal could arrive at the conclusion at which it did. The matter must be remitted so that the full enquiry required by section 57 can take place. We have considered whether the remission should be the same or to a different Industrial Tribunal. Whilst we are loath to require that the parties should start completely afresh we must note that any re-hearing will be unlikely even to begin until more than 2 years will have elapsed since the first hearing began in January 1995. It is a great deal, and, we would think, too much to expect that evidence given then will be capable of being recalled in all the lively detail that an investigation into all the considerations raised by section 57 truly requires. To remit the case to the same Industrial Tribunal would thus be unsatisfactory unless it were to hear evidence afresh but, if the evidence were to be heard afresh, there would be no substantial reason to insist upon the second Tribunal being composed of the same persons as the first. Thus, with some reluctance, we not only remit the matter but remit it for hearing afresh by a different Industrial Tribunal in order that the delays likely in reconvening precisely the same Tribunal as before will be avoided.