Gilham v Kent County Council (No. 2)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE GRIFFITHS,LORD JUSTICE DILLON,LORD JUSTICE WALLER
Judgment Date01 November 1984
Judgment citation (vLex)[1984] EWCA Civ J1101-2
Docket Number84/0396

[1984] EWCA Civ J1101-2

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL

ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

Royal Courts of Justice,

Before:

Lord Justice Waller

Lord Justice Griffiths

Lord Justice Dillon

84/0396

EAT 787/82

Gilham & Ors
and
The Kent County Council

MR R. HARVEY, Q.C., and MR A. PARDOE (instructed by W.G. Hopkin, Esq., Solicitor, County Hall, Maidstone, Kent) appeared on behalf of the Appellants.

MR MICHAEL LEWER, Q.C., and MR N. BEDDARD (instructed by Messrs. Stillwell & Harby, Solicitors, Folkestone) appeared on behalf of the Respondents.

LORD JUSTICE GRIFFITHS
1

The Applicants, the Kent County Council, employed the respondents in their school meals service. I will refer to the respondents as the "dinner ladies". The Council dismissed the dinner ladies with effect from 23rd July 1982. They complained to an Industrial Tribunal that they had been unfairly dismissed. The Industrial Tribunal upheld their complaint. The Council appealed to the Employment Appeal Tribunal, who dismissed their appeal.

2

The Council now appeal to this Court with the leave of the Employment Appeal Tribunal.

3

Although the hearing before the Industrial Tribunal took five days and involved the perusal of many documents, there is no significant dispute about the factual background that led to the dismissals.

4

In the summer of 1981 the Council, in common with all other local authorities, were faced with a very difficult situation. They were under great pressure from the Government to reduce their spending and thus to fall in line with the Government's drive to reduce public expenditure. Local authorities were required by the Government to keep their spending within certain limits and in proportion to the extent that they exceeded those limits they were to lose a part of their rate support grant. This meant that if a local authority's expenditure exceeded the target expenditure set for it by central Government, the local rate payers would not only have to find the additional expenditure, but would also have to make up for the loss of rate support grant withheld as a result of the overspending.

5

The Council knew that their antipated budget would exceed the Government target by many millions of pounds. The Council therefore determined that further cuts in expenditure were necessary throughout the whole spectrum of their activities. They called upon the Education Committee to produce a budget for 1982/1983 that showed a 5.2 per cent. reduction on the 1981/1982 expenditure.

6

The Education Committee decided that savings would have to be made in the cost of the school meals service. They drew up proposals to save approximately two million pounds, calculated in the following way:

(1) Reduced staffing level or introduction of pre-prepared vegetables and increased use of convenience foods

£1,039,000.

(2) Reduced provision in school meals equipment

£230,000.

(3) Reduction in clerical staff by the introduction of cash cafeteria

£12,000.

(4) Reduction in remuneration of the dinner ladies

£706,000.

7

The Education Committee were, however, well aware that the proposal to reduce the remuneration of the dinner ladies posed a real difficulty. The terms of service of the dinner ladies was fixed at national level by negotiations between the local authorities and the unions.

8

Their contracts of service with the Council contained the following term

"8. During your employments with the Kent County Council your conditions of service will be in accordance with those contained from time to time in the National Scheme of Conditions of Service for Local Authorities' Services (Manual Workers) supplemented by such local conditions as have been or may from time to time be introduced by the County Council, for the latter after consultation with representatives of the County Council employees".

9

The National Conditions entitled them to be paid half pay when they were not working in the school holidays and holiday pay was calculated upon the basis that they worked 52 weeks in the year, whereas in fact they only worked 39 weeks. The Education Committee's proposal was that they should in future only be paid for the 39 weeks they worked, and that their holiday pay should be reduced by calculating it upon 39 weeks and not 52 weeks. If their pay was reduced in this way, it would save £706,000.

10

This proposal was first put to their Union representatives on 14th October 1981. It is hardly surprising that the proposal was not enthusiastically received by the Unions, as it would deprive their members of the benefit of the nationally negotiated terms of service. However, the Unions expressed no view at that meeting.

11

At another meeting between the Education Committee's representatives and the Unions on the 2nd December, the Unions refused to discuss the cuts in the pay of the dinner ladies.

12

On the 29th December, the Education Committee approved a budget including the reduction of the dinner ladies' pay and the other cuts in the school meals service. The budget effected a saving of 3.6 per cent., and not the 5.2 per cent. at which the Education Committee had originally been asked to aim.

13

The possible repercussions of the proposal to reduce the pay of the dinner ladies is reflected in a report by the County Education Officer and the County Personnel Officer to the Personnel Group on the 7th January 1982, and to the Policy and Resources Committee on the 26th January 1982, from which it is worth quoting:

"(5) The County Solicitor has advised that if the Authority wished to alter the conditions of service, the contracts of service for the School Meals staff could be terminated and they could then be offered new contracts including the revised conditions. Since effectively dismissals would have to precede the offer of new appointments on revised terms, the Trade Unions might seek to take at least test cases to an Industrial Tribunal on the grounds that the dismissals were unfair. Alternatively, the Unions might refer the whole issue to the Provincial Council on the grounds that the Authority was effectively subverting a national agreement.

(6) It is felt by the County Solicitor whose view is shared by the County Personnel Officer that the Authority would stand a reasonable chance of succeeding at an Industrial Tribunal—there is an arguable case—but it is not of course certain that they would do so. The Provincial Council might feel obliged to uphold National Conditions of Service. This would therefore lead to the County Council taking unilateral action—if it proceeded with this proposal. A campaign of industrial action by the Trade Unions could of course not be excluded—whatever other formal steps they took.

(7) This Report is submitted to Members because the proposals raise important issues of principle about the status and observance of national agreements. It needs to be borne very much in mind that this is an exceptional measure reflecting the severe reductions which are having to be made in Local Authority expenditure in general, and the education budget in Kent in particular. If savings of the order that may be required cannot be achieved the whole question of the future of the School Meals Service may need to be considered.

(8) The Group is invited to express a view to the Education Committee.

14

DECISION OF PERSONNEL GROUP:

That, whilst acknowledging that the Education Committee has compelling reasons having regard to its budgetary problems for seeking to alter the existing conditions of service in the School Meals Service, the Group views with concern the possible effects of doing this unilaterally, since the current terms of employment are derived from a national agreement. The Group hopes, therefore, that the Education Committee will do its utmost to achieve this change with the acquiescence of the staff involved, on the basis that continuing the service at its current cost could force its closure".

15

Pursuant to the recommendation of the Personnel Group, there followed throughout the next three months a series of meetings between Council officers and members and the Unions on this issue. It is not necessary to set them out seriatim. The Unions refused to re-negotiate at local level terms of service that had been agreed at national level. The Council did everything it could to get the Unions to change their mind but, understandably, the Unions refused to move from their position which was that national conditions could only be re-negotiated at national level. In fact moves were afoot, initiated by the local authority employers, to review the National Conditions of Service, but it was obvious that these would not be concluded before the 1982/1983 budget. All this is clear from the documents that were before the Industrial Tribunal, and none of it was in dispute.

16

On the 18th February the Council approved the budget for 1982/1983, including the cuts in the school meals service. As it had not been possible to negotiate any agreement with the Unions, the Council wrote on the 19th March to the school meals staff explaining their reasons for the decision to alter their terms of service, and on or about 26th March the Council sent out two further letters, the first of which terminated their employment with effect from 23rd July 1982, and the second of which offered a new contract of employment that preserved continuity of employment, but which altered the conditions in respect of pay and holiday pay in line with the proposals of the Education Committee.

17

The vast majority of the dinner ladies accepted the new contract (97 per cent. of them). The present respondents did not accept them, and made complaints of unfair dismissal.

18

The Industrial...

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