Fitzgerald v Hall Russell & Co Ltd [1969] UKHL 7

House of Lords
Between
FitzgeraldAppellantHall Russell & Co LtdRespondent
Before
Lord ReidLord Morris of Borthy-GestLord GuestLord UpjohnLord Wilberforce

LORD GUEST

My Lords,For the reasons given by my noble and learned friend, Lord Upjohn, I would allow this appeal and remit the case to the Tribunal.

Lord Morris of Borth-y-Gest

My Lords,On the 8th December, 1967, the Appellant was dismissed by the Respondents, his employers, by reason of redundancy. He was entitled to a redundancy payment. An issue arose as to the period of continuous employment by reference to which his payment was to be calculated. It was held by the Industrial Tribunal that his qualifying service for a redundancy payment commenced on the 21st January, 1963. He had, however, been employed by the Respondents prior to that date. He was employed by them as a welder from the 31st July, 1958. He contended that upon a proper application of the law relating to redundancy payments his qualifying service ought to have been held to begin from that date. But there had been an interruption in his employment which lasted from the 28th November, 1962, to the 21st January, 1963, (a period of nearly eight weeks).The question for the decision of the Tribunal was whether that period constituted a break in the Appellant's service. The Tribunal held that it did. The Appellant's appeal was refused by their Lordships of the First Division of the Court of Session from whose Interlocutor the present appeal is brought. The principal question of law which arises concerns the construction of certain words in the Contracts of Employment Act, 1963, which Act is incorporated by reference in the Redundancy Payments Act, 1965.By virtue of section 1 (1) of the 1965 Act a redundancy payment is to he calculated in accordance with Schedule 1 to the Act. The subsection is in the following terms:" 1. (1) Where on or after the appointed day an employee who has " been continuously employed for the requisite period—

" (a) is dismissed by his employer by reason of redundancy, or

" (b) is laid off or kept on short-time to the extent specified in sub- " section (1) of section 6 of this Act and complies with the require- " ments of that section,
" then, subject to the following provisions of this Part of this Act, " the employer shall be liable to pay to him a sum (in this Act referred " to as a ' redundancy payment') calculated in accordance with " Schedule 1 to this Act."
The terms of paragraph 1 (1) of Schedule 1 are as follows:" 1. (1) The amount of a redundancy payment to which an employee " is entitled in any case shall, subject to the following provisions of " this Schedule, be calculated by reference to the period, ending with " the relevant date, during which he has been continuously employed; " and for the purposes of this Schedule that period shall be computed2" in accordance with Schedule 1 to the Contracts of Employment Act " 1963, but as if—

" (a) any week which began before the employee attained the age of

" eighteen were excluded, and

" (b) the continuity of an employee's period of employment were " not broken by a week which does not count under that Schedule, " if the whole or part of that week falls within any such interval " as is referred to in section 8(3) of this Act."
The provisions of section 8 subsections (1) and (2) of the 1965 Act are as follows:" 8. (1) For the purposes of section 1 (1) of this Act the requisite " period is the period of one hundred and four weeks ending with the " relevant date, excluding any week which began before the employee " attained the age of eighteen.
" (2) Subject to the preceding subsection, and to the following provi- " sions of this section, the provisions of Schedule 1 to the Contracts of " Employment Act 1963 (computation of period of employment), and " the provisions of any order for the time being in force under section 7 " of that Act in so far as it modifies that Schedule, shall have effect " for the purposes of this Part of this Act in determining whether an " employee has been continuously employed for the requisite period."
As it was common ground that after his dismissal on the 8th December, 1967, the Appellant became entitled to a redundancy payment the only issue was as to its amount: that issue in turn depended upon the length of the period of his continuous employment. By reason of the provisions of section 8 (2) of the 1965 Act the provisions of Schedule 1 to the Contracts of Employment Act, 1963, had effect in determining that period. One of the objects of that Act is to require a minimum period of notice to terminate the employment of those who have been employed for a qualifying period. Under the Act the period of notice to which an employee is entitled before his employment is determined has relation to the continuity of the period of his employment. There are varying periods of notice. Thus, the notice required to be given by an employer to a person who has been continuously employed for twenty-six weeks or more must be not less than a week if the period of " continuous employment" is less than two years: or not less than two weeks if the period is two years or more but less than five: or not less than four weeks if the period is five years or more.Provisions were made, by Schedule 1 of the Act, for ascertaining the length of an employee's period of employment and for determining whether that period of employment had been continuous. When those provisions are looked at it will be seen that their effect, doubtless to produce results that would seem only reasonable and fair, is that some periods of employment are to be regarded as having been continuous, though they were not in fact continuous. Those provisions are in turn picked up by the 1965 Act and the period of continuous employment for the purpose of calculating redundancy payments is computed in accordance with the provisions of Schedule 1 to the 1963 Act.Under paragraph 3 of that Schedule under the heading " normal working weeks " it is provided that any week in which the employee is employed for twenty-one hours or more " shall count" in computing a period of employment. There is a general provision (see paragraph 2) to the effect that (except as otherwise provided) any week which does not " count" under paragraphs 3 to 6 breaks the continuity of the period of employment.Under the heading of " Employment governed by contract" paragraph 4 provides that if in a week an employee's relations with his employer are governed by a contract of employment which normally involves employment for twenty-one or more hours weekly such week shall " count".The next paragraph (5) has the contrasting heading " Periods in which " there is no contract of employment". It provides as follows:

" 5. (1) If in any week the employee is, for the whole or part of the " week—

" (a) incapable of work in consequence of sickness or injury, or

3

" (b) absent from work on account of a temporary cessation of work, "or

" (c) absent from work in circumstances such that, by arrangement " or custom, he is regarded as continuing in the employment of his " employer for all or any purposes," that week shall, notwithstanding that it does not fall under paragraph 3 " or paragraph 4 of this Schedule, count as a period of employment." (2) Not more than twenty-six weeks shall count under paragraph (a) " of the foregoing sub-paragraph between any two periods falling under " paragraphs 3 and 4 of this Schedule.
" (3) Paragraph (b) of sub-paragraph (1) of this paragraph shall not " apply to a temporary cessation of work on account of a strike in which " the employee takes part."
The general effect of this paragraph is that some weeks may " count" even though during them the employee was not working and had no contract of employment. Such weeks that " count" will not, therefore, for the purposes of the Act break " the continuity of the period of employment ". The whole scheme of these provisions would seem to me to be designed in the interests of employees so that certain de facto breaks in the continuity of employment are to be ignored. In approaching problems of construction of words or phrases this consideration ought to be had in mind.The findings of fact of the Tribunal include a finding that the Appellant was dismissed on the 28th November, 1962, after being employed as a welder from the 31st July, 1958. A new contract of employment began on the 21st January, 1963, and was ended on the 8th December, 1967. From the first date to the last was a period of over 9 years and 4 months. It was, however, not continuous because there was in fact an interruption of nearly eight weeks. The practical issue that arose was whether the Appellant's redundancy payment should be calculated on the basis that he had served his employers for over nine years or on the basis that he had served them for less than five years.Was the period of just under eight weeks to " count " or was it not? That was the issue. During those weeks the Appellant was not employed. So those weeks did not fall under paragraph 3 of Schedule 1 (of the 1963 Act). Nor during those weeks were the Appellant's relations " governed " by a contract of employment". So those weeks did not fall under para- graph 4 of the Schedule. Those weeks were a period in which there was " no contract of employment" and could fall under paragraph 5. There was no question of incapacity in consequence of sickness or injury (see para- graph 5 (1) (a) ). There was no question of being absent from work in the circumstances referred to in paragraph 5 (1) (c) . So the whole question is whether the eight weeks are within the following words:
" If in any week " the employee is, for the whole or part of the week . . . absent from work " on account of a temporary cessation of work . . . that week shall, not- " withstanding that it does not fall under paragraph 3 or paragraph 4 of this "
Schedule, count as a period of employment."The facts concerning the eight weeks are set out in the decision of the Tribunal. The Respondents are shipbuilders. Because there was a shortage of work they reduced their labour force between June, 1962, and December, 1962. In June, 1962, the force was 805: in December, 1962. it was 440. So in all 365 men were dismissed. Of these 78 were welders. The Appellant was only dismissed towards the end of the period. He was one of a group of 52 men who were dismissed on the 28th November. He was one of 20 out of that number who were welders. A document then sent by the Respondents to the Ministry of Labour stated that the dismissals were due to " the present shortage of work ". The decision of the Tribunal records that the Appellant stated that the foreman who had given him notice had assured him and the other discharged men that they would " soon be back ": the decision adds " but there was no corroboration of this ". But if the Tribunal accepted the Appellant's evidence that the foreman had made some such remark then no corroboration of the Appellant was necessary before treating the evidence as evidence which was relevant to the issue before the Tribunal. 301515 A 24It is clear that the Appellant was dismissed on the 28th November, 1962. He was then free to take up other employment. But the facts as found suggest that it was the hope of the Appellant that he would soon be em- ployed again and that it was the hope of the Respondents that they would soon be able to employ him again. The mutual hopes were soon fulfilled. The Appellant had been employed by the Respondents as a welder from July, 1958, to November, 1962: after an interval of nearly eight weeks he was back again. Had he been "absent from work on account of a " temporary cessation of work "? Unfortunately the decision of the Tribunal hardly deals with the problem. Their decision was as follows:
" We " concluded that the Applicant had been dismissed by reason of redundancy " on 28th November, 1962 and that his service with the Respondents had " been broken on that date "
. Undoubtedly he was dismissed: undoubtedly his service was broken. The whole question was whether, notwithstanding those circumstances, the eight weeks are to " count as a period of " employment". A question of law is involved as to whether on the facts as found it could be held that in those weeks the Appellant was absent from work " on account of a temporary cessation of work ".The words " temporary cessation of work " are capable of more than one meaning. In cases falling within paragraph 5 of Schedule 1 the words fall to be considered in cases where someone after dismissal has been re-employed. After re-employment there will then by a process of looking back. Looking back at a period which was an interval between two periods of employment the question has to be asked—Was the employee absent from work on account of a temporary cessation of work? The word " temporary " will involve questions of degree. The words " cessation of work " may be differently regarded according as to whether they are thought to refer to the employee's work or the employer's work. If over a period of years an employer manufactures a particular article but because of a temporary shortage of demand for the article he dismisses one who for years has been an employee but then re-employs him after a period which could properly be regarded as " temporary " there could be two points of view. The employer could at some later time say that his work had not at any moment ceased. The employee could at some later time say that he had worked for his employer for many years save only for a period of a few weeks during which he was absent from work on account of a temporary cessation of work.It is, in my view, important to note that it is the position of the " employee " that is being considered. So the enquiry becomes—why was he absent from work? If he was, say, one of a hundred employees there could be a short period when for some reason the employer had no work for any of them or there could be a short period when for some reason the employer had no work for him. From his point of view and when considering why he was absent and whether for him the short period ought to break his con- tinuity of employment or ought to " count" it does not seem to me that the position of his work-mates ought to be decisive. If there was a temporary cessation of work for him and if because of that he was absent it seems to me that it would be just as right to say that he was absent from work on account of a temporary cessation of work as it would be to say so if all his work-mates were in like situation.The judgments of their Lordships of the First Division proceeded on the view that " cessation of work " denotes a cessation by the employer of his work in the sense that there must be a closing down of his business or of the part of it in which the employee worked. The Lord President put the matter succinctly. He said that "to constitute a cessation the business " must be closed down, or at least the part of it in which the employee is " involved must cease to operate". To the same effect were the words of Lord Guthrie, viz. "In my opinion the words 'temporary cessation of " ' work' mean a temporary stoppage of the operations of the employer " either in whole or in part". Lord Cameron was of the view that there must be "a period of absence in which the cause of the absence was " cessation of the employer's work—not merely a falling off in work or in5
" the requirement for workmen ". Their Lordships preferred the approach indicated in the Northern Ireland case of Monarch Electric Ltd. v. Mclntyre to that indicated in Hunter v. Smith's Dock Co. Ltd. [1968] 1 W.L.R. 1865. My Lords, I find myself in agreement with the approach in the judgments in the latter case. I agree with Lord Parker C.J. when he said that though sub-paragraph 5 would extend to the cessation of a particular department it goes further and is dealing with the cessation of the job of the employee who is dismissed. " It is dealing with his absence from his job on account " of the cessation of that job ". Winn L.J. shared that view when he said " for my own part I do not think that this test under 5 (1) (b) is only satisfied " where it can be shown that there has been a cessation of all work, or all " work of any one department, formerly carried out at a place where the " employee was employed."
My Lords,it is important, in my view, to remember that the words being considered are the words used in their context in the Contracts of Employment Act, 1963. Section 1 subsection (5) provides that Schedule 1 to the Act applies for ascertaining the length of an employee's period of employment and whether it has been continuous. The very purpose of paragraph 5, as I have earlier indicated, is to make certain weeks count in the employee's favour though he was away from work and had no contract of employment. The build-up of the period of " continuous employment" (upon the length of which the length of notice to terminate will depend is arranged in the interests of employees. The situation to be contemplated is that there will have been employment, then dismissal, and then (after an interval) re-employment. Then if at some later date it is desired to give a notice to terminate the contract of employment the question will have to be asked—Why in that period between the two contracts was the employee absent from work? If it was a period during which he would have been at work but for the fact that his employer could not find work for him but which period ended when the employer did find work for him, I consider that it could properly be said that he was absent from work on account of a cessation of work even though the employer's business or the particular department of it had not completely closed down. Then if in the light of all the facts and circumstances (on a backward look as from the date when it is being decided what notice must be given) it could be said that such cessation of work was only " temporary ", then by operation of law the period when in fact there was no working and no contract would " count " as part of a period of continuous employment.For the reasons which I have given I consider that the Tribunal erred in law in holding that the Appellant's qualifying period commenced on the 21st January, 1963. They should have held on the facts as found that between the 28th November, 1962, and the 21st January, 1963, the Appellant was absent from work on account of a cessation of work. As their approach, leading to a wrong conclusion, was, in my view, erroneous they did not have to give consideration to the word " temporary ". We were invited to take the view that had there been a correct approach on the part of the Tribunal and had they considered the word " temporary " they could only, on the facts as found by them, have come to the one conclusion, viz., that the cessation of work was in this case a " temporary cessation of work ". While there is much to commend this view, as appeal in this case must relate to questions of law, I think that the matter will have to be remitted to the Tribunal. If they decide that the cessation of work was " temporary " then they will have to determine the amount of the redundancy payment.In determining whether a cessation of work has been temporary the guid- ance given by Lord Parker C.J. in Hunter v. Smith's Dock Co. Ltd. should in my view, be followed. If in reference to the time when a cessation of work begins there is evidence showing that both the employer and the employee expected and anticipated that the cessation would only be for a relatively short time, that would be very relevant evidence in considering at a later time whether there had been a temporary cessation of work. But the absence of any such evidence would certainly not be decisive. It is to be remembered that there must be a looking back process and that it is at some time subsequent to re-engagement and in reference to a past period of6absence from work that the question is raised whether the employee was absent from work on account of a temporary cessation of work. All relevant evidence and all relevant factors will have to be taken into account. Ques- tions of fact will arise. The duration of one period relative to or in relation to the antecedent and subsequent periods will be one relevant factor.An argument was advanced which had as its foundation the concluding words of subsection (1) of paragraph 1 of the Schedule to the 1965 Act. This argument was not submitted to the First Division and so is not dealt with in the judgments. Those concluding words of subsection (1) show that in applying Schedule 1 of the 1963 Act the continuity of an employee's period of employment is not to be broken by a week which does not count under that Schedule if the week (or part of it) " falls within any such interval " as is referred to in section 8 (3)" of the 1965 Act. Section 8 (3) is in the following terms:
" 8. (3) Whereby virtue of section 3 (2) of this Act an employee is " treated as not having been dismissed by reason of a renewal or re- " engagement taking effect after an interval, then, in determining for " the purposes of section 1 (1) of this Act whether he has been continu- " ously employed for the requisite period, the period of that interval shall " count as a period of employment, notwithstanding that it does not " count under that Schedule."
Section 3 of the 1965 Act is concerned with the circumstances under which an employee is to be taken to be dismissed by his employer. Section 3 (2) provides that in certain circumstances an employee shall not be taken to be dismissed. Thus, by section 3 (2) if an employee's contract of employment is renewed or if he is re-engaged by his employer and the renewal or re-engage- ment is in pursuance of an offer in writing made by his employer before the ending of his employment under the previous contract and takes effect either immediately on the ending of that employment or after an interval of rot more than four weeks thereafter the employee is not to be taken to be dismissed. It is contended that if there were such a renewal or re-engagement taking effect after an interval of up to four weeks the provisions of section 8 (3) would operate with the result that that interval would " count as a period " of employment notwithstanding that it does not count" under Schedule 1 to the 1963 Act. Hence it is argued that the 1965 Act proceeded on the basis that a period between a dismissal and a re-engagement would not count under and would not be covered by the provisions of the 1963 Act.My Lords,in my view this new and somewhat elusive contention can have no greater force than to suggest that Parliament in 1965 took a certain view as to the construction of the 1963 Act. It may be that section 8 (3) was merely designed to ensure that the four week interval referred to in section 3 (2) should not be regarded as breaking a period of employment. If, how- ever, section 8 (3) does seem to express an interpretation of the 1963 Act it certainly does not amend the 1963 Act and the subsection cannot affect or alter the correct interpretation of that Act.For the reasons which I have given I would allow the appeal and remit the matter to the Tribunal so that if they hold that the Appellant's absence from work was on account of a cessation of work which was temporary they should assess the amount of the redundancy payment.

Lord Guest

My Lords,The Redundancy Payments Act, 1965, provides for a payment (known as a redundancy payment) by an employer to an employee who has been con- tinuously employed for the requisite period (as subsequently defined) where the employee has been dismissed by his employer by reason of redundancy. There are complicated provisions as to what constitutes dismissal for the purposes of the Act.Section 8 contains provisions for computing the requisite period for con- tinuous employment. The requisite period is 104 weeks and by subsection (2) Schedule 1 of the Contracts of Employment Act, 1963, is to be the yardstick7for determining whether the employee has been continuously employed. This Act was for the purpose of determining the rights of employer and employee to a minimum period of notice. And in that connection it was necessary to define what were continuous periods of employment and this was done by the First Schedule. It is only necessary to quote paragraphs 2 to 5:" (2) Except so far as otherwise provided by the following provisions " of this Schedule, any week which does not count under paragraphs 3 " to 6 of this Schedule breaks the continuity of the period of employ- " ment.
" Normal working weeks.
" (3) Any week in which the employee is employed for twenty-one " hours or more shall count in computing a period of employment.
" Employment governed by contract.
" (4) Any week during the whole or part of which the employee's " relations with the employer are governed by a contract of employment " which normally involves employment for twenty-one hours or more " weekly shall count in computing a period of employment.
" Periods in which there is no contract of employment.

" (5)—(i) if in any week the employee is, for the whole or part of the " week—

"(a) incapable of work in consequence of sickness or injury, or "(b) absent from work on account of a temporary cessation of work, "or" (c) absent from work in circumstances such that, by arrangement " or custom, he is regarded as continuing in the employment of his " employer for all or any purposes," that week shall, notwithstanding that it does not fall under paragraph 3 " or paragraph 4 of this Schedule, count as a period of employment." (2) Not more than twenty-six weeks shall count under paragraph (a) " of the foregoing sub-paragraph between any two periods falling under " paragraphs 3 and 4 of this Schedule.
" (3) Paragraph (b) of sub-paragraph (1) of this paragraph shall not " apply to a temporary cessation of work on account of a strike in " which the employee takes part."
I now turn to the facts of this case. The Appellant was employed as a welder by the Respondents from 31st July, 1958, to 28th November, 1962, and again from 21st January, 1963, to 8th December, 1967. He was given a redundancy payment based on his services from 21st January, 1963, about which no question arises. The question is whether the period from 28th November, 1962, to 21st January, 1963, breaks the continuity of service.The Stated Case stated the following facts:" The Respondents' labour force was reduced between June and " December 1962 from 805 to 440, the number of dismissed men (365) " including 78 welders. This reduction was caused by shortage of work. " On 28th November 1962 the Respondents discharged 51 men, " including 20 welders, and on that day a list of the men concerned " was sent by the Respondents to the Ministry of Labour. This " document slated that ' due to the present shortage of work the " ' following list of employees will be dismissed tonight'. Similar lists " were sent by the Respondents to the Ministry of Labour on various " other dates before and after 28th November, 1962. The Applicant, " in common with the other discharged men, was handed his National " Insurance Card and his Income Tax Form P.45 and his personal " record card was marked to the effect that the reason for his leaving " was that he was redundant. He stated that the foreman who had given " him notice had assured him and the other discharged men that they " would soon be back but there was no corrobation of this. The " Applicant reported to the Employment Exchange of the Ministry of " Labour, and, according to him, he was classed as a ' Hall Russell8
" 'shipbuilding employee' and his card marked ' T.S.' (temporarily " suspended). He was unemployed until 21st January, 1963, when he " was re-engaged by the Respondents. Two fellow employees gave " similar evidence but all admitted that they were free to take up other " employment had any been offered to them. One, in fact, took on a " job as a taxi driver for about nine months before rejoining the " Respondents as a welder."
The Industrial Tribunal held that the Appellant was dismissed for redundancy on 28th November, 1962, and that his qualifying service for redundancy payment commenced on 21st January, 1963. An appeal to the First Division of the Court of Session failed.The Respondents' principal argument was that by reference to certain provisions of the 1965 Act, namely, sections 3(2) and 8(2), and having regard to the terms of paragraph 5(1) of the First Schedule to the 1963 Act, an employee who had been dismissed from his employment for redundancy, as the Appellant had been, could not qualify for the concessions afforded by paragraph 5(1) (a). Although I found Mr. Ross' argument for the Respondents attractive I do not feel able to give effect to it. It would not be safe, in my opinion, to interpret the First Schedule to the 1963 Act upon the assumption as to what Parliament, when it enacted the 1965 Act, thought the First Schedule meant. The fact that an employee is dismissed is not necessarily, therefore, fatal to the claim.But the period of the Appellant's continuity of employment is broken unless within the meaning of paragraph 5(l) (b) he was "absent from work " on account of a temporary cessation of work ". The contest between the parties is whether " cessation of work " means, on the one hand, cessation of the employee's work or cessation of work for the employee or whether, on the other hand, it means " cessation of the employers' work ". The latter is the view which appealed to the Court of Session following, as they did, the decision of the Court of Appeal in Northern Ireland in Monarch Electric Limited v. McIntyre (18th January, 1968. unreported).The former view was taken by the Divisional Court in England in Hunter v. Smith's Dock Co. Ltd. [1968] 1 W.L.R. 1865 and Newsham v. Dunlop Textiles Limited [1968] I.T.R. 274.As a matter of pure construction of paragraph 5(1)) (b) I find it difficult to read the paragraph as meaning " the cessation of the employee's work ". This would cover any case where the employee was simply absent from work. If this had been the meaning it was unnecessary to add " on account of temporary cessation of work ". The paragraph might have read " if the " employee is temporarily absent from work ". In my view, work must have a wider signification than simply the employee's work. This is made clear by reference to paragraph 5(3) which speaks of " a temporary cessation of " work on account of a strike in which the employee has taken part". Work in this context cannot be limited to the employee's work but clearly refers to a strike which causes a temporary cessation of the employers' work in the factory.On the facts the First Division have held that he was not " absent from " work on account of a temporary cessation of work." The work was diminished ; it did not cease. It went on on a reduced scale. In saying this I am merely repeating the reasons given by the judges of the First Division who, in my view, rightly rejected the Appellant's appeal.Upon this view it becomes unnecessary to consider whether in the circum- stances the cessation was " temporary ".For my part I would dismiss the appeal.

Lord Upjohn

My Lords,The Respondents are shipbuilders of Aberdeen who employed a substan- tial labour force including a number of welders, among them the Appellant who had been employed by them since 31st July, 1958. Owing to shortage9of work between June and December, 1962, the Respondents made pro- gressive reductions of their labour force from 805 to 440 including the dismissal of 78 welders. On the 28th November, 1962, the Appellant (to- gether with 51 other men, including 19 other welders) was dismissed for this reason. The Appellant said that when dismissed he was told by the foreman that he would soon be back. There is no doubt, however, that his employment was determined and he was perfectly free to take any other employment, and at least one of his fellow ex-employees did so and became a taxi-driver for about nine months before he rejoined the Respondents. The Appellant, however, registered with the Employment Exchange where his card was marked T.S. (temporarily suspended), a purely administrative procedure by the Ministry of Labour, and he remained unem- ployed until re-engaged by the Respondents as a welder on the 21st January, 1963. The Appellant was again dismissed by the Respondents in December, 1967, admittedly by reason of redundancy, and he has made a claim against the Respondents for a redundancy payment under the Redundancy Payments Act, 1965, (the 1965 Act). By virtue of sections 1 and 8 of the 1965 Act, in order to obtain a redundancy payment the Appellant must have been continuously employed by the Respondents for at least 104 weeks, that is not in dispute, and then the amount to which he is entitled depends directly upon the period of his continuous employment. See section 8(2) and paragraph 1(1) of Schedule 1 to the 1965 Act.That Schedule provided that the period of continuous employment should be computed in accordance with Schedule I to the Contracts of Employment Act, 1963, (the 1963 Act). The purpose of the First Schedule to the 1963 Act was to lay down rules for computing the period of continuous employ- ment of the employee, for upon this depended the length of notice to which he was entitled to determine his employment. The relevant paragraphs of Schedule I to the 1963 Act are as follows: —

" General provisions as to continuity of period of employment

" 2. Except so far as otherwise provided by the following provisions " of this Schedule, any week which does not count under paragraphs " 3 to 6 of this Schedule breaks the continuity of the period of " employment.

" Normal working weeks

" 3. Any week in which the employee is employed for twenty-one " hours or more shall count in computing a period of employment.

" Employment governed by contract

" 4. Any week during the whole or part of which the employee's " relations with the employer are governed by a contract of employ- " ment which normally involves employment for twenty-one hours or " more weekly shall count in computing a period of employment.

" Periods in which there is no contract of employment

" 5.—(1) If in any week the employee is, for the whole or part of " the week—

"(a) incapable of work in consequence of sickness or injury, or "(b) absent from work on account of a temporary cessation of work

"or

" (c) absent from work in circumstances such that, by arrangement or " custom, he is regarded as continuing in the employment of his " employer for all or any purposes," that week shall, notwithstanding that it does not fall under para- " graph 3 or paragraph 4 of this Schedule, count as a period of " employment." (2) Not more than twenty-six weeks shall count under paragraph (a) " of the foregoing sub-paragraph between any two periods falling under " paragraphs 3 and 4 of this Schedule.
" (3) Paragraph (b) of sub-paragraph (1) of this paragraph shall not " apply to a temporary cessation of work on account of a strike in " which the employee takes part."
10The whole issue in this appeal is whether, upon the true construction of that Schedule, in computing the amount of the redundancy payment to which the Appellant is entitled in respect of his dismissal in December, 1967, the period of his continuous employment began in July, 1958, or only in January, 1963.The cross-heading to paragraph 5—" Periods in which there is no contract of employment" —has occasioned much difficulty for its meaning seems particularly obscure. I find it very difficult to understand the concept behind this cross-heading that was in the draftsman's mind when he framed this part of the Act. Counsel on neither side was able to give it any sensible meaning but neither did either of them rely in any way upon it. Lord Cameron, in his opinion, felt the same difficulty in construing this cross- heading when he said in reference thereto:
" Whatever meaning is to be given to these words I do not think that " they can operate so as to exclude from the ambit of the paragraph " those cases in which formal notice of dismissal has been given to a " workman."
I agree with that and I propose for the purposes of construing the 1963 Act to ignore that cross-heading.This dispute between the Appellant and the Respondents was referred to the Industrial Tribunal who decided the matter on the 25th March, 1968. The Tribunal came to the conclusion that the applicant had been dismissed by reason of redundancy on the 28th November, 1962, and that his service with the Respondents had been broken on that date. The Tribunal then found that his qualifying service for a redundancy payment commenced on 21st January, 1963. They gave no reasons for reaching this conclusion.My Lords,no one doubts that when he was dismissed on the 27th November, 1962, there was a break in his employment with the Respondents, but that, in my opinion, is by no means conclusive of the matter. No doubt in many cases a break in employment will prove fatal to a claim to throw the period of continuous employment back to the period of his earlier engagement; thus, if he gave notice himself for his own reasons, or was dismissed because he was unsatisfactory, it would no doubt be impossible for him to show that his employment was continuous from the earlier date. But the whole issue in this case is whether the Appellant can show that, notwithstanding the legal break terminating his earlier employment, nevertheless the provisions of Schedule 1 to the 1963 Act, properly con- strued, entitle him to claim that for the purposes of the 1963 and 1965 Acts the period of his employment was continuous from the commencement of his earlier engagement, and this point of law seems to have been overlooked by the Tribunal. That dismissal is not conclusive against the employee's claim is, I think, clear having regard to the whole structure of the Schedule to the 1963 Act. Thus paragraph 5 (l) (a) and (b) seems to contemplate cases where incapacity in consequence of sickness or injury or absence on account of cessation of work may count as a period of continuous employ- ment even where the incapacity or absence has led to or at all events been accompanied by a termination of the employment. That the period of the earlier employment may be so included in proper circumstances is in my view supported by the phraseology in section 24 (1) (b) and the definition of " employee " in section 25 (1) of the 1965 Act. In my opinion, reference to those sections is permissible in construing the 1963 Act, for the First Schedule to that Act is really incorporated into the later Act.Those sections seem consistent only with the view that a previous contract of employment which has been terminated may be relevant in computing the period of continuous employment.The Appellant concedes that to establish his claim to a continuous period of employment from the 31st July, 1958, he can only rely on paragraph 5(1) (b) which I have set out above, and it is agreed on both sides that this really poses two questions which may be formulated thus:During this period from November, 1962, to January, 1963, was the Appellant absent on account of a cessation of work? And if so,was the cessation temporary?11It is not disputed that though the First Schedule is based upon loss of a week's work, absence from work during several weeks is not necessarily fatal to the claim. So this Schedule is dealing purely with the continuity of employment of an individual workman, and upon that continuity depends the length of notice to which he is entitled to determine his employment under the 1963 Act, and the amount of his redundancy payment under the 1965 Act when he is finally dismissed. These matters are essentially personal to each workman and will differ between workmen according to the length of continuous employment though otherwise their general terms of employ- ment may be identical. Therefore, in construing paragraph 5(1) (b) . which deals merely with the computation of continuity of weeks work, the ordinary construction of the phrase " temporary cessation of work " would, in my opinion, refer to work available for that particular workman and have no reference to other workmen. The question whether at the same time the whole works would close down or a department was closed down or a large number of other employees were laid off at the same time, would seem to be irrelevant in a computation essentially personal to the particular workman. But a different construction has been adopted in the Court of Appeal in Northern Ireland in the case of Monarch Electric Limited v. Patrick McIntyre, so far unreported, but your Lordships have had the advantage of seeing a transcript of the judgment. That decision was on an Act of Northern Ireland, but its provisions, so far as relevant, seem to be the same as those of the Acts that your Lordships have to consider. Lord MacDermott C.J. in the leading judgment in McIntyre's case said:" One must look at the cessation from the point of view of the " employers who conduct the work and of what is happening at the " place of work. An employee can lose his job without any cessation " in that sense; orders may have fallen away and he may have become " surplus to requirements, or he may have been dismissed because his " performance has become unsatisfactory; or he may simply have taken " french leave and gone on a holiday.

(b) "

Their Lordships of the First Division agreed with this reasoning and held that on that principle of construction there had been no cessation of work for the purposes of 5(l) (b) , for there had been no cessation of the business of the employer or of any department in which the employee was employed.I am unable to agreed with this construction. I prefer the views expressed on the Monarch case by Lord Parker L.C.J. and Winn L.J. in Hunter v. Smith's Dock Company Limited [1968] 1 W.L.R. 1865. For the reasons I have already given it does not seem to me relevant to consider the general work of the employer and the state of his business. Your Lordships are not concerned with the question whether the Appellant was redundant in November, 1962. That is not in dispute (though, of course, it could not entitle him to any payment for it was before the passing of the 1965 Act) for it was found by the Tribunal that, de facto, the Appellant was dismissed on the ground of redundancy both in November, 1962, and in December, 1967. But when computing solely the continuity of his employment it seems to me that paragraph 5 is directed to matters essentially personal to the employee; it must be due to incapacity through illness or absence of work through cessation of work. In my opinion, the words " absent from work " on account of temporary cessation of work " mean that he was laid off or dismissed because his employer had no longer work available for him person- ally any longer. And that was due in this case, as the Tribunal have found, to a shortage of work, but it might have been due to other causes such as a serious fire or explosion, and such circumstances seem to fit into paragraph 5 (1)(b) exactly. He was dismissed because there was no work for him: he was not dismissed because he was unsatisfactory; he was not dismissed because he took french leave; those seemed to me, with all respect to the learned Chief Justice of Northern Ireland, to be quite different cases. Here was a willing employer and a good and willing employee but the former found that owing to business conditions he could no longer employ him. It would12seem to me to be quite unjust to the workman admittedly entitled to a redundancy payment upon his second dismissal if the computation of the period of his continuous employment was affected by the question whether, upon the termination of his earlier employment, the employer was closing down his business or some department of his business or dismissing a large number of other employees. That seems, as I have said, quite irrelevant. In my opinion, the first question which I have posed must be answered in the affirmative, that is to say, the Appellant was dismissed in 1962 because there was a cessation of work for him in the sense that the employer had no work further available for him to do. So paragraph 5 (1)(b) provides that though there was a legal break in his employment nevertheless for the purpose of computing his redundancy payment he remained in continuous employment from July, 1958. I therefor, turn to the second question.Was the cessation temporary? No doubt there is a certain artificiality about this conception. It will seldom be possible to say at the time when the employee is first dismissed, (and the problem before your Lordships must surely always involve two dismissals), that his cessation of work was tem- porary. The employee may take up other employment and whatever his original intentions may never return to his old employer. He may leave for what he hopes will only be temporary employment elsewhere. In this he may be disappointed for, contrary to his expectation and possibly that of his old employer, his old job may never become available. Or he may find that he prefers his new employment and decides to make it permanent. So the question—Was the cessation temporary?—in most cases cannot be answered as at the time of dismissal. The First Division applied the test stated in Singh v. Patterson [1942] J.C.89 where the question was whether the residence of an individual in a particular country was temporary : it was held that the true opposite of " temporary " was not " permanent " but " indefinite '" or " unlimited ". With all respect, that test can have no relevance here, for in most cases when the employee is dismissed his dismissal at that time must be described as indefinite or unlimited. But Counsel on both sides agreed that, as in every case where this problem arises there will have been a re-engagement, you must look at the original dismissal with hindsight, that is to say, with knowledge of all that has happened since the original dismissal until the second dismissal, and then decide whether in all the circumstances of the case the original dismissal can properly be described as due to a temporary cessation of work. I agree with the views expressed by Lord Parker L.C.J. in Newsham v. Dunlop Textiles Limited [1968] I.H.R.274. As I have said, that is a somewhat artificial conception, but it is a task imposed upon the Tribunal by the terms of the Act, and I do not think that any guidance can be given in determining that question, for each case must depend upon its own particular circumstances and commonsense must provide the answer.My Lords,I should have thought that upon the rather meagre facts of this case the answer to the second question was fairly simple, but this matter was never explored by the Tribunal in any detail and it may be that further evidence may be available upon this question. So I agree that it must go back to the Tribunal for it to determine this question ; but the Tribunal must remember that the mere fact that the original dismissal was for an indefinite and unlimited period is by no means conclusive ; far from it. It must look back at all the facts and circumstances from the time of the first dismissal until the time of the dismissal upon which the claim for a redundancy payment is made and reach a commonsense conclusion upon the whole matter.My Lords,for this reason I would allow the appeal and remit the matter for further determination by the Tribunal.

Lord Wilberforce

My Lords,I concur with my noble and learned friend, Lord Upjohn, and would allow the appeal.(301515) Dd. 197039 150 10/69 St.S.