Norwest Holst Group Administration Ltd v Harrison
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CUMMING-BRUCE,LORD JUSTICE NEILL,SIR DENYS BUCKLEY |
| Judgment Date | 28 February 1985 |
| Judgment citation (vLex) | [1985] EWCA Civ J0228-2 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 85/0086 |
| Date | 28 February 1985 |
[1985] EWCA Civ J0228-2
Lord Justice Cumming-Bruce
Lord Justice Neill
and
Sir Denys Buckley
85/0086
EAT 3/84
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
(Civil Division)
(On appeal from the Employment Appeal Tribunal)
Royal Courts of Justice
MR. I. McLEOD (instructed by Messrs. Chambers & Hind, Ilkeston) appeared on behalf of the Appellant.
MISS E. SLADE (instructed by Messrs. Mace & Jones, Liverpool) appeared on behalf of the Respondents.
The facts are in a short compass. By a contract dated 3rd March, 1978, the Appellant entered into a contract with the Respondents whereby the Respondents were to employ him in the employment and office of director and chief engineer in the Design Department of their organisation. The term of the contract was one year and thereafter from year to year the Respondents were under an obligation to give one year's notice of termination.
The agreement incorporated the conditions of employment set out in some printed staff rules, and by one of those staff rules, under the heading "Mobility", the rule is set forth:
"The nature of the Industry is such that you may have to be called upon to change the location of your work from time to time. Where this becomes necessary, consideration will be given to any special personal circumstances."
In the second half of 1981 and the first half of 1982, the company, the Respondents, were considering concentrating more or all of their staff at offices in Chesterfield. During that period the Appellant was located in offices at Derby, where he and his subordinate staff were organised. There was a period of discussions on the factors relevant to the proposal to concentrate the Design Office at Chesterfield and the persons primarily concerned were Mr. Payne, who was Chairman of the Respondent group, and Mr. Aldwinckle, the Regional Managing Director of the Midland Region, who were persons with whom the Appellant dealt from time to time in the course of discussion.
The facts material to the issues to be determined on this appeal are set forth in paragraphs 7, 8 and in the first three lines of paragraph 9 of the judgment of the Industrial Tribunal, as follows:
"7. Mr. Harrison, who was responsible for the design office among his other duties, was a director and as such able to take part in executive discussions and was provided with a superior company car and also had a BUPA subscription paid for him by the respondent. The design office had three divisions, each with a manager, (1) heavy industry (Mr. Loach), (2) waterways and (3) structural concrete. More work was undertaken for industry than for public bodies. In January 1982 Mr. Harrison was assured by Mr. Payne, the Group Chairman and Managing Director, that in the projected changes he would remain as Director and Chief Engineer. Because of the doubts expressed about the future responsibilities of the technical personnel in the design office by Mr. Aldwinckle in a memo dated 20th May 1982, and seen by Mr. Harrison on or about 27th May, the latter began to consider the possibility of becoming a self—employed engineer in private practice, if the memo was put into effect. On 14th June Mr. Aldwinckle wrote to Mr. Harrison as follows:
"'Dear Mr. Harrison, I confirm my conversation with you on Monday last, 7th June 1982, when I informed you of the decision to close the Design Office of Norwest Holst Civil Engineering Midland Region on 30th June 1982.
"'As a result of that decision, from 1st July 1982, you will be based at the Chesterfield office continuing as Chief Engineer of this Region. In this position you will be responsible for Engineering advice with regard to contracts for which tenders are being submitted and also in respect of contracts being carried out in the Region. You will also be responsible for the correctness of temporary works and false work design on all our contracts. Occasions will arise when clients will require tenders submitting on a design and construct basis when your services will be needed to meet the client, ascertain his requirements and produce tender designs and quantities for pricing. The post will not now carry a directorship.
"'It is regretted that the closure of the design office and this move have become necessary in order that the Company can rationalise its activities to the best advantage in the present economic circumstances.
"'Yours sincerely, for Norwest Holst Civil Engineering Ltd.
"'(Signed) C.H.Aldwinckle Regional Managing Director.'
"On 17th June Mr. Harrison wrote back to Mr. Aldwinckle as follows:
"'Dear Mr. Aldwinckle, Without Prejudice
"'I acknowledge receipt of your letter of the 14th June 1982 outlining my proposed employment with the company from the 1st July 1982, following the decision to disband the Derby design office.
"'Although the full terms of the new position have not been given, it is apparent that as it does not carry a Directorship the terms are less favourable than those of the Service Agreement dated 3rd March 1978.
"'Further, I consider that your letter constitutes a determination of my employment with effect from the 30th June 1982, since as is clear from the 1978 Agreement, my position carries a contractual right to be a Director. In any case I understood you to imply on the 27th May 1982 that my salary would be reduced from its present level.
"'I shall therefore be pleased to receive 12 months salary and benefits in lieu of notice, together with redundancy payment entitlement under the Employment Protection (Consolidation Act 1978. As the design office in Derby is being totally disbanded, it seems that my dismissal results directly from a redundancy situation in that the company has now no need at all for design staff in Derby.
"'On the point of redundancy, I am quite certain that the offer of work in Chesterfield would not be suitable alternative employment because of the loss of status and responsibility, the relatively unfamiliar type of work, and apparently the proposed reduction in salary and benefits. There are other considerations upon which I can enlarge if necessary.
"'With respect your letter was indefinite on a number of points, and I would ask you to contact me immediately if you feel I have misunderstood what has been said or if further discussion would assist an amicable resolution of the matter.
"'As you are aware, I have made arrangements to holiday abroad with the company car at present in my possession from 3rd-20th July 1982. I trust that in view of length of service with the company, these arrangements can still stand.
"'Your sincerely, (Signed) R.H.Harrison Director and Chief Engineer.'
"8. During the period which immediately followed the exchange of letters there was a change of correspondence between the applicant and members of higher management and he had an interview with Mr. Payne on 24th June as a result of which the latter assured the applicant that he would be a director at Chesterfield. This was confirmed in writing by Mr. Aldwinckle in a letter of 24th June, On 25th June Mr. Clarke, the respondents' Personnel Director, wrote to Mr. Harrison in the following terms:
"'Dear Mr. Harrison, I refer to my letter to you dated 22nd June 1982 and to the correspondence you have had with Mr. Aldwinckle, as well as the discussion that you had yesterday with Mr. Payne.
"'Mr. Payne has asked me to write to you to confirm and hopefully to clarify the position.
"'As you know, your employment with the company is covered by a Service Agreement and certain conditions of employment and staff rules. You are employed in the capacity of Director and Chief Engineer. The Service Agreement also provides that you will undertake such duties in that capacity as the company shall, from time to time, require.
You are, of course, aware of the recent reorganisation of the Midland Region of Norwest Holst Civil Engineering Ltd. which has culminated in the closing of the Design Office in Derby at the end of this month. The company has considered the position very carefully and Mr. Aldwinckle wrote to you on 14th June 1982, with regard to your future within the Group. So that there is no misunderstanding about the position, I do now confirm that the company wishes to continue your employment in the capacity of Director and Chief Engineer and and that that employment will in all respects be in accordance with your existing terms of employment.
"'You will remain as a Regional Director, there will be no reduction in salary and all your present benefits will be continued. There will be no loss of status and the work which you are being asked to do is responsible and valuable work for which the company does require a person of your calibre and qualifications.
"'Referring to your letter of 17th June 1982, I have to say that the company does not accept, in any way, that there has been a termination of your employment. The company has no desire, or intention, to do this. As indicated above, we feel that there is a very important role for you as Director and Chief Engineer at Chesterfield.
"'In light of the above, I do hope that you will now reconsider your decision and unless I hear from you to the contrary, I will assume you will be taking up your position at Chesterfield on 1st July 1982.
"'If there is any matter on which you are still uncertain, please do not hesitate to contact either me, Mr. Payne or Mr. Aldwinckle.
"'Yours sincerely, G. Clarke Personnel Director.'
"9. On 28th June, Mr. Harrison had written to Mr. Aldwinckle making it...
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