Devis (W.) & Sons Ltd v Atkins
| Jurisdiction | England & Wales |
| Judge | Lord Justice Cairns,LORD JUSTICE ORR,LORD JUSTICE WALLER |
| Judgment Date | 26 October 1976 |
| Judgment citation (vLex) | [1976] EWCA Civ J1026-1 |
| Date | 26 October 1976 |
| Court | Court of Appeal (Civil Division) |
re Tribunals and Inquiries Act 1971
[1976] EWCA Civ J1026-1
Lord Justice Cairns.
Lord Justice Orr and
Lord Justice Waller.
In The Supreme Court of Judicature
Court of Appeal
(Appeal of W. Devis & Sons Ltd. from judgment of Mr. Justice Phillips, London, November 14, 1975.)
MR FENTON BRESLER, (instructed by Mr. R.A. Roberts) appeared on behalf of the Appellants (Respondents).
This is an appeal from a decision of Mr. Justice Phillips given on appeal from the decision of the Industrial Tribunal at Manchester. It was a case in which the applicant before the Industrial Tribunal was alleging unfair dismissal. The tribunal held that the employers had been guilty of unfair dismissal within the meaning of the Trade Union and Labour Relations Act 1974, and Mr. Justice Phillips dismissed the employers' appeal from that decision. The employers appeal to this court.
It is unfortunate that both before the learned judge and in this court the employee has not been present or represented. The case on behalf of the appellants, the employers, has been presented by their counsel, Mr. Fenton Bresler, who has argued the case with great force, great clarity and characteristic fairness, having regard to the circumstance that he had no opponent, professional or lay.
The employee in this case, Mr. Atkins, had worked for the appellants, W. Devis & Sons Ltd., as manager of their abattoir at Preston. He had worked for them for some twelve years, and as manager in the latter part of that period had received a salary of £4,224 a year. During his work as such manager differences arose between him and the appellants because they wanted him to buy a considerable proportion of the animals from farmers and he preferred to buy more from dealers. He was unwilling to comply with the wishes of his employers in this respect, and because of this he was given notice of dismissal in writing on the 23rd October, 1974. The letter of dismissal is at page 28 in our bundle. It was written byMr. Hodgkinson, the appellants' general manager, who said. "I am writing to confirm our conversation of Monday, 21st October, when you were informed that we wished to terminate your employment with the Company with immediate effect. You spent at least part of yesterday in Bamber Bridge helping with the handing over of responsibilities so we will interpret the termination of your contract of employment as applying from the end of work on Tuesday, 22nd October. We regret very much having felt that this decision was necessary, but we have been dissatisfied and unhappy for some time as you know with the way in which you have been handling the business and with the fact that you appear to be unable to adapt yourself to the wishes of the management on matters of basic principle. In view of the fact that we are parting company for this kind of reason, we are prepared to make a substantial cash settlement by way of compensation for loss of employment. As we told you we will pay you six weeks' salary in lieu of notice which is your legal right and provided it is paid in this way will be paid free of tax or deductions of insurance. In addition to that, we will make you an ex gratia severance payment of £6,000 of which under current tax legislation £1,000 will be subject to income tax and the remainder tax free." Then there is a concession with regard to his car, and a final paragraph expressing thanks for his services during the previous twelve years.
At the foot of that letter, or attached to it, there was a note in these terms: "I agree to the above conditions concerning the termination of my employment and confirm thatI have no further claims against the company," That was a note which Mr. Atkins was invited to sign.
Mr. Atkins did not sign that note in the course of the ensuing week, and during that week the appellants got some Information which led them to believe that he, Mr. Atkins, had been acting dishonestly in the course of his employment. Now it must be made absolutely clear that the issue as to whether or not he had been so acting has not been heard. Nothing that I say in this judgment is to be taken as being in any way a slur upon Mr. Atkins. It may or may not be true, and nothing that we say to-day is by way of any decision upon that matter. But that information having come to the attention of Mr. Hodgkinson, the appellants' general manager, he wrote a letter to Mr. Atkins on the 1st November, 1974, in these terms: "I refer to my letter of 23rd October, 1974 confirming the termination of your contract of employment with W. Devis & Sons Ltd., and outlining the financial offer which we were prepared to make, in the circumstances as we then knew them. Since that date, information has come to us, as you are aware, to the effect that during your term of employment …." - and then there are set out the allegations being made, which I do not think it is necessary to read. The letter goes on: "This being so, I have to advise you that we are no longer prepared to sustain the offer made and since you have not returned the signed copy of our letter of 23rd October to us as requested signifying your acceptance, we will now regard you as having been summarily dismissed on 22nd October. The financial considerations relating to termination of your contract ofemployment will now be handled in this light." It then says that the letter will be signed by somebody on behalf of Mr. Hodgkinson.
It is a well-known principle of the common law that if a man is dismissed by his employers and sues them for wrongful dismissal the employers are entitled to defend the action by alleging that the employee had in fact been guilty of misconduct in the course of his employment, even though that misconduct was unknown to the employers and formed no basis for the reason of his dismissal. That principle has been part of the common law at least since the decision of the court of appeal in Boston Deep Sea Fishing -v- Ansell (1888 39 Ch.D. p. 339); and the principle was reaffirmed by this court In Cyril Leonard & Co. -v- Simo Securities Trust Ltd. (1971 3 A.E.R. p. 1313).
What was contended before Mr. Justice Phillips, and has been again contended before us, is that that same principle applies in connection with claims for compensation for unfair dismissal under the Act of 1974. Mr. Justice Phillips held that it does not apply. Put in one way or another, the whole basis of this appeal is that he was wrong in so deciding, and that is the matter which we have to consider.
The relevant legislation is contained in the First Schedule to the Act of 1974. Paragraph 4 of that schedule provides: "(1) In every employment to which this paragraph applies every employee shall have the right not to be unfairly dismissed by his employer, and the remedy of an employee so dismissed for breach of that right shall be by way of complaintto an industrial tribunal under Part III of this Schedule, and not otherwise." It was under that paragraph that the application to the industrial tribunal was made.
What is unfair dismissal for the purposes of this Act? Again I want to say something, this time in order, if one can, to save the employers from any possible stigma as a result of these proceedings. It was said by Mr. Justice Phillips, and I repeat it, that the expression "unfair dismissal" is to be regarded as a label of dismissal in certain circumstances as described in the paragraph of the schedule which I am about to read. The question whether that is something which the man in the street would regard as unfair dismissal is neither here nor there. While it may be that employers feel a sense of resentment and feel that there is a stigma in the expression being used, I hope it will be appreciated in relation to these employers that the expression is to be understood in that limited statutory sense.
What is that sense? Paragraph 6 (1) provides: "In determining for the purposes of this Schedule whether the dismissal of an employee was fair or unfair, it shall be for the employer to show - (a) what was the reason (or, if there was more than one, the principal reason) for the dismissal, and (b) that it was a reason falling within sub-paragraph (2) below, or some other substantial reason of a kind such; as to justify the dismissal of an employee holding the position which that employee held. (2) In sub-paragraph (1) (b) above the reference to a reason falling within this sub-paragraph is a reference to a reason which" - and then out of four types ofreason the only relevant one is (b), "related to the conduct of the employee". Then sub-paragraph (3): "Where the employer has fulfilled the requirements of sub-paragraph (1) above, then, subject to paragraphs 7 and 8 below, the question whether the dismissal was fair or unfair shall be determined in accordance with the following provisions of...
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