Imperial Metal Industries (Kynoch) Ltd v Amalgamated Union of Engineering Workers (Technical, Administrative and Supervisory Section)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STEPHENSON,LORD JUSTICE GEOFFREY LANE |
| Judgment Date | 12 July 1978 |
| Judgment citation (vLex) | [1978] EWCA Civ J0712-4 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 July 1978 |
[1978] EWCA Civ J0712-4
In The Supreme Court of Judicature
Court of Appeal
(Civil Division)
From: Mr Justice Slynn (Q.B.D.).
Lord Justice Stephenson
Lord Justice Roskill and
Lord Justice Geoffrey Lane
MR PETER CRAWFORD, Q.C. and MR MICHAEL COLLINS (instructed by Mr B.J.W. Winterbotham, SW1) appealed on behalf of the Appellants (Plaintiffs).
MR J.P. BURKE (instructed by Messrs. Robin Thompson & Partners, Birmingham) appeared on behalf of the First Respondents (First Defendants).
MR PETER SCOTT (instructed by the Treasury Solicitor) appeared on behalf of the Second Respondents (Second Defendants).
I shall ask Lord Justice Roskill to give the first judgment.
LORD JUSTICE ROSKIIL: This is an appeal from an order of: Mr Justice Slynn dated 3 June 1977. The learned judge in, if I may say so, a characteristically lucid judgment which he delivered without reserving it because of the alleged urgency of the matter, refused to order two gentlemen and one lady, being members of the Central Arbitration Committee, to state a special case for the decision of the court under sect.21 of the Arbitration Act 1950. Those two gentlemen and the one lady are the second respondents to the originating summons which was taken out by the applicants to the summons, Imperial Metal Industries Ltd. in order to obtain that order. The other respondents to that summons were the Amalgamated Union of Engineering Workers.
On 5 January 1977 the Secretary of State for Employment had made a reference to the Central Arbitration Committee of a question which, in his view, had arisen in respect of certain training instructors employed by the appellants (and I quote from the terms of reference at page 112)
-"at the factory, workshop or place occupied or used by him"- the company is there referred to as the contractor -
-"for the execution of the Contract the conditions of the Fair Wages Resolution are being observed by the Contractor. Those who are concerned with the said question are the Contractor and the Amalgamated Union of Engineering Workers (Technical Administrative and Supervisory Section)".
Then the reference goes on:
"The said question has not otherwise been disposed of and, accordingly, the Secretary of State for Employment hereby refers the same for decision to the Central Arbitration Committee, as an independent tribunal, pursuant to clause 3 of the Fair Wages Resolution".
On 25 March 1977 the hearing of that reference took place in Birmingham before the two gentlemen and the lady I have mentioned. Those three had been nominated, we have been told, by the president of the Central Arbitration Committee. They had not been nominated by the Secretary of State. The appellants were represented by junior counsel at that hearing, and he, no doubt on instructions, asked the committee for a special case to be stated under the Arbitration Act 1950.The committee considered that application, they no doubt - as appears from the documents - took advice, and subsequently a letter was written in which they made it plain that they were not prepared to state such a special case. Indeed, so far as one can gather from the papers, although there has been a large number of previous references of this kind, no one hitherto has ever thought of suggesting to the committee that a special case should be stated under that statute. Accordingly the appellants took out the summons I have mentioned.
The problem has arisen because of the incorporation of the Fair Wages Resolution of the House of Commons dated 14 October 1946, which appears as clause 17 of the Standard Conditions of Government Contracts for Stores Purchases into a contract dated 20 August 1976 entered into by the appellants with the Ministry of Defence for the supply by the appellants to that department of a huge quantity (running into tens of millions of units) of ball ammunition. A copy of the contracting letter will be found at page 160 of the bundle of correspondence. It is dated 20 August 1976. That letter incorporates terms and conditions known as DEFCON 112P. I need not refer to that in detail. The incorporation will be found in the bottom righthand corner of page 161 in a box marked "Conditions of Contract. The Contract is subject to:- DEFCON 112P (Edn.6/75)".
That, then, brings in the standard conditions; and, as I have said, clause 17, to which I will come back, is the Fair Wages Resolution of the House of Commons dated 14 October 1946. Clause 22 provides:
"The Contract shall be considered as a contract made in England and subject to English Law".
Clause 23, which is of importance, bears the rubric: "Arbitration (English Law". There is a parallel arbitration clause if the contract is governed by Scots law:
"Where Condition No.22 forms part of the Contract" - pausing there, it does -
-"then, except as provided by Condition No.50, all disputes, differences or questions between the parties to the Contract with respect to any matter or thing arising out of or relating to the Contract, other than a matter or thing as to which the decision of the Authority is under the Contract to be final and conclusive and except to theextent to which special provision for arbitration is made elsewhere in the Contract, shall be referred to the arbitration of two persons, one to be appointed by the Authority and one by the Contractor, or their Umpire, in accordance with the provisions of the Arbitration Act, 1950, or any statutory modification or re-enactment thereof".
That, subject to one or two special provisions, is a common form arbitration clause providing for a reference of disputes arising out of or relating to this contract to be referred to two arbitrators and an umpire.
Clauses 50, 51 and 52 do not require reading, but each is a clause which makes provision for certain questions to be determined in the event of dispute by a body called a review board, and quite plainly each of them is a special provision within the exception I have just read from clause 23.
The Fair Wages Resolution clause repeats verbatim the House of Commons resolution, but for clarity I ought to read the whole clause:
"17. Fair Wages, etc. The Contractor shall, in the execution of the Contract, observe and fulfil the obligations upon contractors specified in the Fair Wages Resolution passed by the House of Commons on the 14th October, 1946, namely:-
'l.(a) The contractor shall pay rates of wages and observe hours and conditions of labour not less favourable than those established for the trade or industry in the district where the work is carried out by machinery or negotiation or arbitration to which the parties are organisations of employers and trade unions representative respectively of substantial proportions of the employers and workers engaged in the trade or industry in the district.
(b) In the absence of any rates of wages, hours or conditions of labour so established the contractor shall pay rates of wages and observe hours and conditions of labour which are not less favourable than the general level of wages, hours and conditions observed by other employers whose general circumstances in the trade or industry in which the contractor is engaged are similar.
'2. The contractor shall in respect of all persons employed by him (whether in execution of the contract or otherwise) in every factory, workshop or place occupied or used by him for the execution of the contract comply with the general conditions required by this Resolution. Before a contractor is placed upon a Department's list of firms to be invited to tender, the Department shall obtain from him an assurance that to the best of his knowledge and belief he has complied with the general conditions required by this Resolution for at least the previous three months'.
Then follows 3, which is the all-important provision:
"3. In the event of any question arising as to whether the requirements of this Resolution are being observed, the question shall, if not otherwise disposed of, be referred by the Minister of Labour and National Service to an independent Tribunal for decision".
Pausing there, the submission on behalf of the appellants is that that is a submission to arbitration within the Arbitration Act 1950, and that accordingly this is an appropriate case in which the court has the power, which it should exercise, to order the second respondents to state a case under that section for the decision of the court.
Although Mr Crawford, in his reply this morning, sought to argue otherwise, as my Lord, Lord Justice Lane, pointed out, clause 3 is, if one views this clause critically as a matter of drafting, in a somewhat illogical position, because it appears in the middle of the resolution, immediately following two obligations which are imposed upon the contractors in clauses 1 and 2 which I have just read but before three more obligations in 5 end 6, which I will now read:
"4. The contractor shall recognise the freedom of his workpeople to be members of Trade Unions.
'5. The contractor shall at all times during the continuance of a contract display, for the information of his workpeople, in every factory, workshop or place occupied or used by him for the execution of the - contract a copy of this Resolution.
'6. The contractor shall be responsible for the observance of this Resolution by subcontractors employed in the execution of the contract, and shall if required notify the Department of the names and addresses of all such subcontractors".
There follows a note:
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