Hindle v Percival Boats Ltd

JurisdictionEngland & Wales
Judgment Date12 December 1968
Judgment citation (vLex)[1968] EWCA Civ J1212-3
CourtCourt of Appeal (Civil Division)
Date12 December 1968

[1968] EWCA Civ J1212-3

In The Supreme Court of Judicature

Court of Appeal

Appeal by Mr. Hindle against Order of the Queen's Bench Divisional Court dated 15th February 1968.


The Master of the Rolls (Lord Denning)

Lord Justice Sachs and

Lord Justice Widgery

John William Hindle
Percival Boats Limited

Mr. RAYMOND KIDWELL, Q.C. and Mr. PETER MERRITON (instructed by Mr. John L. Williams) appeared on behalf of the Appellant.

The Respondents did not appear and were not represented.


THE MASTER OF THE ROLLS; Mr. Hindle is a highly-skilled craftsman in wood. He is especially good at building wooden boats and repairing them. He has worked all his life at Horning on the Norfolk Broads. He was employed for over twenty years by one firm and their successors, Percival Boats Limited. On 30th January 1967, Mr. Percival, with great regret, told Mr. Hindle that he must terminate his services. He gave him the four week's notice required by law. So also with another craftsman in wood, Mr. Knights. He too was given four week's notice at the same time. The employers did not replace either of the men. So it looked as if the employers dismissed them because they did not need their services. The men claimed redundancy payments. Percivals refused. The claim went before an Industrial Tribunal. They dismissed it by a majority of 2 to 1. The men appealed to the Divisional Court. They dismissed the appeals. Mr. Hindle now appeals to this Court.


We have recently in Lloyd v. Brassey considered the nature of a redundancy payment. It is payable when a man of long service is dismissed. It is not unemployment benefit. It is payable even though he straightaway gets other work. It is compensation to the man for loss of his job. It must, of course, be an established job. He must have held it for at least two years. Then his compensation increases with his years of service. The longer his service, the more his redundancy payment. He is entitled to it if he "is dismissed by his employer by reason of redundancy", see Section 1(1) (a). Those words are not defined in the Act. The Act only gives us a recital of circumstances in which & man is deemed to be dismissed for redundancy. Sections 1 (2) and 3 (1) set out circumstances in which a man "shall be taken" to be "dismissed" and "dismissed by reason of redundancy". But those circumstances are not an exhaustive definition. Thus if an employer is overstaffed, and for that reason dismisses some of his men, then the dismissal is by reason of redundancy. The case may not come exactly within Section 1 (2) (b), but stillit is dismissal for redundancy.


There is another matter to be noticed. Throughout this Act the words "by reason of" mean "as a result of. A man is dismissed "by reason of redundancy" when he is dismissed as a result of redundancy or as a result of the facts mentioned in Section 1 (2) (a) or (b). The dismissal must be "attributable wholly or mainly to one of those facts, that is, a result of one of them. It is not necessary that the employer should give that fact as his reason, or even that he should have it in his mind. It is sufficient if it is a predominant cause of the dismissal.


But an important provision in the present case is Section 9 (2) (b), which says that "An employes who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy". That is a compelling presumption. The employer has to prove that the man was not dismissed for redundancy. He has to prove a negative - always a difficult thing to do. And it is especially difficult to do when the man has not been replaced. For then it is clear that his job has been done away with, no matter how the employer may try to explain it away. And in the ordinary way, when a man's job is done away with, he is entitled to redundancy payment. The only way in which the employer can effectively discharge the burden of proof is by proving that the man was dismissed for some other reason altogether, that is, as a result of some other cause altogether. The employers here said that they dismissed Mr. Hindle because they thought he was "too good and too slow". The question is whether that was sufficient to rebut the presumption, especially as there were other possible causes for the dismissal.


First: The change-over from wood to fibreglass


Percivals are boat builders and repairers. In 1960 most of the work in the business was done on wooden boats. The employers built boats for their own fleet and repaired otherboats for their customers. They employed 45 men for the purpose. Since that time there has been a gradual change towards boats of fibreglass. In 1965 the employers sold about half their wooden fleet and dismissed 24 of their men, leaving only 21. Out of these, only seven were wooden-boat builders, and these included Mr. Hindle and Mr. Knights. A few months later, in 1965 or January 1966, Percivals started building six new boats, all of fibreglass. "And it was agreed" said the Tribunal "that fibreglass was, to a considerable degree, replacing wood in other boats which had to be repaired in Percivals' yard," If that was the cause of the dismissals - because Percivals did not require so many men skilled in wood -it would be dismissal by reason of redundancy.


Second: The unpredictability of the work doen by Mr. Hindle.


Very recently, in 1966, Mr. Percival's son Joined the business. He made a detailed study of costs and "came to the conclusion that the costs of these repairing jobs, in terms of the hours put in by Mr. Hindle, were out of proportion to the amount which could be recovered from the owners for whom the work was done". Later in the year the auditors made a report that the work was unprofitable. And Mr. Percival, Senior, got out accounts to show that "it was impossible for him to recover from the person for whom the work was done the full equivalent in terms of money of the very long hours Mr. Hindle had worked on these tasks". If that was the cause of the dismissals - because this particular kind of work was unprofitable as the customers could not pay the price – it would be dismissal by reason of redundancy.


Third: The quality of Mr. Hindle's work.


As a result of these studies in costs, Mr. Percival and his son formed the view "that unprofitable work was done by Mr, Kindle because he was, although an excellent craftsman, such a slow and thorough worker". But the Tribunal did not find that Mr. Hindle was in fact too slow. They said it was a matter ofopinion which they could not resolve. It would indeed be surprising if they had found him too slow. He had been employed for twenty years by the one firm without complaint: and soon after he was dismissed, he was engaged by another firm who were only too glad, apparently, to get his services. So it cannot be said that he was in fact too slow, but only that the employers thought he was.


Fourth: The reasons stated for dismissal.


According to Mr. Percival, on 30th January 1967, he saw Mr. Hindle and told him that the truth of the matter was that he was "too good and too slow" and that his standards of necessity required faster work if he was to operate economically. He told Mr. Hindle that, with the greatest reluctance, he found it necessary to dismiss him. According to Mr. Hindle, at this interview Mr. Percival said he had just had an interview with his auditors who advised him that those engaged in the boatbuilding business should be cut down, as there was not enough work for all of them.


One of the members of the Tribunal accepted Mr. Hindle's evidence. The other two preferred Mr. Perciva11s. But they went on to say that "at an interview of this painful kind, there might well have been some sugaring of the pill of dismissal which did not accurately represent the real reason for the dismissal", So even the majority thought that he may have been told that there was not enough work for all the men. On the same day Mr. Percival wrote a letter to Mr Hindle dismissing him, but with no hint of dissatisfaction: "Dear Mr. Hindle, with great regret I have to give you this formal notice to leave my employment in four weeks1 time. There is, of course, no obligation on your part to stay on for the full four weeks, Yours Truly, H.J. Percival",


Fifth: The belief of the employers.


The majority of the Tribunal held that Mr. Percival told Mr. Hindle that he was "too good and too slow"; and that that was the genuine opinion held by Mr. Percival. They said; "We"cannot resolve as to whether in fact Mr. Hindle had been slow. It suffices to say that Mr. Percival said he thought he had, and we accept that this was his genuine opinion………. lie the majority felt that if at the time of the dismissal Mr, percival genuinely believed that he was dismissing them for the reasons he gave them……. this could not be a dismissal for redundancy".


In coming to this decision, the Chairman of the Tribunal was, no doubt, following hie own dictum in the case of Hoover Ltd. v. Delta Bureau, 26th September 1966, 1 Industrial Tribunal Reports page 568; in which he was also the Chairman: "In the Chairman's view, it cannot be sufficiently emphasised that in case a of this kind where the employer claims that he dismissed the employee to reasons other than redundancy, it is not for these Tribunals to investigate whether the employer's reasons were good or bad – a quite Impossible task - but whether the motivating views actuating the dismissal, rightly or wrongly held, were genuinely motives not connected with redundancy".


I do not think that dictum was correct. It is shown to be wrong by a subsequent case in the Court of Session, MacLaughlan v, Alexander Paterson Ltd, (1968 Industrial Tribunal Reports 251). In that case the motive of the employers in dismissing a man was because they were reorganising...

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