British Steel Corporation v Chant
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE ORR,LORD JUSTICE ROSKILL |
| Judgment Date | 07 May 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J0507-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 07 May 1974 |
[1974] EWCA Civ J0507-1
In The Supreme Court of Judicature
Court of Appeal
Revised
The Master of the Rolls
(Lord Denning),
Lord Justice Orr and
Lord Justice Roskill.
Appeal by the British Steel Corporation from order of the Divisional Court of the Queen's Bench Division dated 15th November, 1973.
Appeal by the British Steel Corporation from order of the Divisional Court of the Queen's Bench Division dated 14th November 1973.
Mr. R. A. MacCRINDLE, Q. C., and Mr. MARK SAVILLE (instructed by Messrs. Lovell White & King) appeared on behalf of the Appellant Corporation.
Mr. H. TUDOR-EVANS, Q.C., and Mr. S. HAWKESWORTH (instructed by Messrs. Russell Jones & Walker) appeared on behalf of the Respondents.
The iron and steel industry has been through many phases. At one time it was nationalised. Then it was de-nationalised; and eventually in July 1967 it was renationalised. Regulations were made so as to provide compensation for men who lost their employment. "Re-settlement compensation" it was called. It was given for suffering loss of employment "in consequence of a relevant event". It is those words which we have to consider today. We have the cases of two men. Each lost his employment owing to the closure of steel works. One was in Wales and the other in Lincolnshire. The first case is that of Mr. W. J. Chant. Mr. Chant was employed at the Lamberton mill which used to be part of the Guest Keen & Nettlefold complex at East Moors in Cardiff. That mill, wogether with all the other steel works of Guest Keen & Nettlefold, became part of the British Steel Corporation in July 1967. At the outset the British Steel Corporation was organised in geographical units. There were four geographical units covering the country: The Midland Group, the Northern and Tubes Group, the Scottish and North-West Group and the South Walees Group. Each geographical unit had its own separate organisation with its own directors, managers and so forth. Each geographical unit had its own mills dealing with various steel products. But experience showed that that was an unsatisfactory method of organisation. The Corporation made reports in 1969 in which they recommended to the Minister that the four geographical units should be scrapped: and that the industry should be organised according to the products which were made. They recommended four products divisions. Thus there was the General Steels Division, which produced steel beams and columns, the steel bars and rails, and so forth. That division would take charge of all the steel works in the country which manufacturedproducts of that kind. Next there was the Special Steels Division, which manufactured alloys and stainless bars and so forth. And finally the Tubes Division. The upshot was that, instead of the industry being divided geographically, it was divided into districts according to the products which were being manufactured. Each of the products divisions would have its own directors and managers, and would deal in all the products of that kind manufacture by the Corporation. The recommendation was made in December 1969 and put into operation in March 1970.
It was realised that the reorganisation would have important consequences. Some steel works might be closed down; for instances, one in South Wales might be producing the same product as another in the North; and, instead of having the two running separately, they might be combined. There would be re-deployment of some men, and redundancy of others. There would have to be a social policy department set up to deal with all the problems arising from the reorganisation. From March 1970 the four products divisions were in operation. But towards theend of 1970 a recession struck the industry. There was a big reduction in the demand for the products of the Corporation. The impact of this was severs. In November 1971 the Lamberton mill at which Mr. Chant was working was closed down. It had been producing steel billets. In future all their work was transferred to the Cleveland mill at Teeside, formerly owned by Dorman Long. There is no doubt that Mr. Chant suffered a loss in consequence of that closure. The question is whether that was a consequence of a "relevant event".
The other case was that of Mr. Portman. He was a man who had been employed at Corby at the works of the Lancashire and Corby Steel Manufacturing Co. Those works were taken over by the British Steel Corporation in July 1967. These works producedcold rolled narrow strip. So did the other works which had been taken over by the Corporation. One was the Brinsworth works at Rotherham. The other was the Whitehead works in Newport. At the outset there were the four geographical division doing which each of the works carried on separately. But when the products division was formed in 1970, it was apparent that economies might be effected by concentration on two of the works and giving up the third. At this time too there was the start of the recession. By December 1970 it was plain that all these works could not be kept going. In September 1971 the Lancashire and Corby works were closed down and all their work transferred to Whitehead or Newport. In consequence Mr. Portman lost his work. He too claimed re-settlement compensation under the statute. The question in his case too is whether his loss was a consequence of a "relevant event".
The right to compensation is given by the Iron and Steel (Compensation to Employees) Regulations, 1968, Statutory Instrument 1968 No. 1170. Regulation 5 says:
"The Corporation shall …… pay resettlement compensation to any person to whom these regulations apply who — (a) has suffered loss of employment in consequence of a relevant event not later than 10 years after the material date."
The "material date" is defined in Regulation 2 as "the date on which the relevant event occurred."
The "relevant event" is defined in Regulation 2 in these words:- "'relevant event', in the case of a person who is or has been an officer of a company which came into public ownership under Part II of the Act means -
(a) the company so coming into public ownership; or
(b) effect being given to conclusions reported under section 4 of the Iron and Steel Act 1967 to the Minister.
I need not read the other two, (c) and (d), as they do not apply.
As the result of the discussion, no reliance is placed upon (a), that is, on nationalisation itself being the cause of the loss of employment. The "relevant event" which is now relied upon in both these cases is "(b) effect being given to conclusions reported under section 4 of the Iron and Steel Act 1967 to the Minister."
So we have got to look back to section 4 of the 1967 Act. Section 4(1) says:
"It shall be the duty of the Corporation, forthwith after the vesting date (as defined in the following provisions of this Act), to undertake a review of their affairs for the purpose of determining whether the carrying on of the activities that have fallen to be carried on under their ultimate control is organised, so far as regards the direction thereof, in the most efficient manner and to report their conclusions to the Minister; and so often thereafter as occasion seems to them to require it, or as the Minister may require it, to undertake a further such review and to report similarly."
Under that provision the Corporation did make a first review which they reported to the Minister on 31st July 1967. In that report they recommended the organisation of the industry into four geographical divisions. The Corporation made a second report to the Minister on 3rd February 1969. In it they envisaged a reorganisation into four products divisions, but they did not at that time recommend that it should be done. The Corporation made a third report to the Minister on 2nd December 1969. In it they definitely recommended that a system of product divisions should be established in place of the existing groups structure. The new organisation was to take effect from 29th March 1970. the object, it was said, was "to give the Corporation more effective means of rationalising steel, using its plant to the maximum overall benefit and planning its capital investment programme." I will not go through the whole of the report. But I would just refer particularly to paragraph 43:-
"A new Social Policy Department at Head Office, responsible for developing policy to meet the problems arising from changes within the industry, will also help to minimise the impact of redeployment and help to...
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