Rigby v Ferodo Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MAY,LORD JUSTICE WOOLF,SIR ROUALEYN CUMMING-BRUCE |
| Judgment Date | 10 October 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J1010-6 |
| Docket Number | 86/0953 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 October 1986 |
[1986] EWCA Civ J1010-6
Lord Justice May
Lord Justice Woolf
and
Sir Roualeyn Cumming-Bruce
86/0953
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(Mr. Justice Ognall)
Royal Courts of Justice
MR. MICHAEL KERSHAW, Q.C. and MR. T. DUTTON (instructed by Messrs Lawford & Co.) appeared on behalf of the Respondent/Plaintiff.
MR. GILES WINGATE-SAUL, Q.c. and MR. JOHN HAND (instructed by Messrs Addleshaw, Sons & Latham, Manchester) appeared on behalf of the Appellant/Defendant.
We have before us an appeal from a judgment and order of Mr. Justice Ognall of 29th January 1986.
At all material times the plaintiff in this litigation had been employed by the defendants. The claim before the learned judge was for damages for the alleged failure of the defendants to pay the contractual wage due under the plaintiff's contract of employment, or in the alternative for the contractual wages unpaid as a debt. The learned judge held that the employers had indeed underpaid their employee since 18th September 1982 and he ordered an enquiry as to the damage sustained by the employee in consequence by an official referee. The employers now appeal, seeking a variation of that judgment and order so as to limit the damages payable by them to the period of notice of termination then provided for by the employee's contract of employment, which in this case was one of twelve weeks. Unhappily the plaintiff employee has died since the hearing before the learned judge. By an order of the Registrar of Civil Appeals the employee's widow is now the respondent to this appeal.
I take the facts of the case from a very helpful skeleton argument with which we were provided on behalf of the appellant company. That is not to say that we were not also much helped by the further skeleton argument put in on behalf of the respondent.
The employee had been employed by the appellants as a lathe operator at their factory in Caenarvon. He had begun that employment in about September 1964. The detailed terms of his employment are immaterial, save to say that by 1982 his contract was determinable by the appellants by twelve weeks' notice.
The appellants carried on their business, amongst other places, at Caernarvon, as I have said, and also at Chapel-en-le-Frith. The employees at those two places were in general members of one of four unions. Amongst those was the Transport and General Workers Union and also the Confederation of Shipbuilding and Engineering Unions which are principally concerned in this case. Technically, CSEU was not a union but an umbrella organisation covering a number of engineering unions who act together, but that is neither here nor there for the purposes of this case. The overwhelming majority of the manual workers at both Caernarvon and Chapel were members of the Transport and General Workers Union, but the plaintiff employee was a member of the CSEU.
After the period between 1964 and 1980 during which the employee's contract of employment was varied from time to time by negotiation in the usual way, in July 1980 the appellants and the CSEU entered into a two-year pay agreement under which the final increases were to come into effect on 26th December 1981 and 27th March 1982. Unfortunately, however, in late 1981 a severe financial crisis struck the appellants' business. A large number of their employees were made redundant. The amounts under the last two agreed increases of wages were not paid and the savings so made were used by the appellants to increase the redundancy payments made to those who were discharged. Nothing more need be said up to that date, save that the plaintiff was then in receipt of a wage in the region of £192 per week gross which was made up of a number of elements—basic pay, bonus pay and an attendance allowance.
As the learned judge described it in the course of his judgment, through the remainder of 1981 and into 1982 the appellants limped towards what he described as "a financial precipice". In consequence, in August 1982 the appellants sought to introduce amongst their work staff, if necessarily unilaterally, a revised (which involved a reduced) pay structure, but at that stage they were persuaded not to do so. Events, however, were moving quite swiftly, because by September 1982 the appellants' situation was described as "near terminal". By that time short term working or further large scale redundancies would certainly have killed off the company. The appellants therefore pursued the only feasible alternative, which was to effect wage reduction. It is right to say that the learned judge in his judgment found that in so acting the appellants did not wish to act in any way quixotically or dictatorially towards their workforce.
At the same time as the relevant discussions with the CSEU (to which I shall refer in more detail in a moment), the appellants held discussions with the Transport and General Workers Union who, for their part, agreed to wage reductions. Another union, the ASTMS, also agreed to help by agreeing that their members would be laid off one day in ten. By a letter dated 19th August 1982 the appellants invited the CSEU to enter into discussions with them to reach agreement on a 5% wage reduction.
By 23rd August 1982, at a meeting between the appellants' management and representatives of the CSEU at Chapel, the situation was such that the appellants told the union that, unless things were sorted out by 17th September, the reductions would be implemented. There was then a meeting between the Chapel and Caernarvon representatives of that union.
There was a further meeting between the management and the union on 8th September, but at that meeting no progress was made. In the course of the meeting the appellants told the union that if there was no agreement between them before 18th September—that is, only ten days' later—they (the appellants) would carry out their intention of reducing the wage rates.
There was a further meeting on 10th September when the union were again left in no doubt that the appellants would introduce wage cuts within a week whether or not there was agreement between them and the union.
There was yet another meeting on 15th September, this time at Chester, at which the appellants put forward two alternative reduced pay scales, the two alternatives being...
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