Tarmac Roadstone Holdings Ltd v Peacock
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE STAMP,LORD JUSTICE JAMES |
| Judgment Date | 27 February 1973 |
| Judgment citation (vLex) | [1973] EWCA Civ J0227-2 |
| Date | 27 February 1973 |
| Court | Court of Appeal (Civil Division) |
[1973] EWCA Civ J0227-2
In The Supreme Court of Judicature
Court of Appeal
Appeal by Tarmac Roadstone Holdings Limited, from order of the industrial Court dated 24th March 1972.
The Master the Rolls (Lord Denning),
Lord Justice Stamp and
Lord Justice James.
Mr. FRANK WHITWORTH Q. C, and Mr. ROGER ELLIS (instructed by Mr. E. Brown) appeared on behalf of the Appellant.
The Respondents did not appear and were not represented.
THE MASTER OF THE ROLLS: Mr. Bryan Lockwood is a maintenance fitter in the Cargo Fleet works of Tarmac Road stone Holdings Limited. He is a man of 26 years of age. He was 10 years with the Tarmac Road stone Company from 4th September 1961 until his employment came to an end on 28th October, 1971. It is admitted that he was dismissed for redundancy and that he is entitled to a redundancy payment under the Redundancy Payments Act of 1965. But the question is, How is that redundancy payment to be calculated? This depends on what were his "normal working hours"? He says 57 hours. His employers say 40 hours. The Industrial Tribunal found that they were 57 hours. The National Industrial Court affirmed that decision. The employers appeal to this Court.
We have only heard arguments on behalf of the employers. I wish that we would have heard arguments on behalf of Mr. Lockwood himself. But that has not been possible. He has written to the Court explaining the position:-
"Dear Sir, I hereby apologise for not being present or represented at the Appeal Court on Monday, 26 February 1973 at 12 o'clock. I have not been represented by my Union because of the Industrial Relations Act. My Union is the A. E. U. I therefore hope that British justice will prevail in my absence, and, if need be, hope that this letter will be read out at the hearing. Yours hopefully, Brian Frederick Lockwood."
When Mr. Lockwood was employed in 1961, he was given the particulars which the employers are bourf to give under the Contracts of Employment Act 1963. These stated the terms of his employment. They gave his normal hours of work "as per Slag Industry". The authorised overtime was "as for slag Industry."The holidays were as for "Slag Industry".
By referring to the "Slag industry", those particulars incorporated the conditions of employment which had been agreed by the National Joint Industrial Council for the slag industry. These conditions are set out in a little booklet which has been put before us. The relevant conditions are these:-
"3. Each worker shall be guaranteed employment in accordance with the minimum basic weekly hours….. 8. The payment for the three weeks, holiday shall be for 49 complete weeks, each of 40 hours, excluding all Overtime….
21. HOURS OF THE WORKING WEEK
(a) The normal single day shift week for all workers paid by the hour shall under these Conditions consist of 40 hours actual work for which 40 hours shall be paid where these hours are not already in operation….
23. HOURS OF WORK
(a) The normal day week shall consist of 40 hours actual work for which 40 hours shall be paid….
26. OVERTIME
All workers covered by these Conditions shall work overtime in accordance with the demands of the Industry during the normal week and/or at weekends."
Those conditions were incorporated into his contract of employment. They show that his normal working week for which he was paid his basic hourly rate was 40 hours a week. But that under Condition 26 he would be required to work overtime if the employers asked him, in which case hw would be paid overtime at overtime rates. These stepped up from "time and one quarter" to "double time" according to the quantity done and the day on which it was done.
The evidence showed that Mr. Lockwood as a regular practice worked 57 hours a week and sometimes more. He was paid his basic hourly rate for the 40 hours and overtime rate for the remaining 17 hours. He claims that he should have his redundancy pay on the basis of 57 hours.
The employers rejected the claim. They said in their written answer:-
"The normal hours of work on the applicant's Contract of Employment refers to the National Joint Industrial Council for the Slag Industry which provides that the hours of the working week shall consist of 40 hours actual work for which 40 hours shall be paid. It is considered that this case is similar in nature with the following Tribunal and High Court decisions."
Then certain decisions are referred to. I will mention them later.
The Industrial Tribunal decided in the man's favour. They did so because they found that the overtime was compulsory on the man. They said:-
"We cannot exclude from our mind that the applicants were employed in an industry (unlike for example a factory manufacturing goods) where the necessities of the business made it very difficult to operate over a long period of time any regular fixed hours of employment for maintenance workers….. we are of the opinion that the National Agreement applying a 40 hour week was consensually varied on the engagement of the three applicants to whom it was made clear that the National Agreement was being varied as regards themselves on the basis that they were bound as a matter of contract to work a seven day week comprising 57 hours."
The National Industrial Relations Court affirmed that decision. They said:-
"In those circumstances it was open to the Tribunal to conclude (although it did not have to reach that conclusion) that there was a contractual obligation on each of these men to work a longer number of hours. It has so found. It has found that these men had agreed to work 17 hours in excess of the 40-hour week, as compulsory overtime."
The Court held that that was decisive.
The employers challenge that decision. They accept the finding that the overtime was compulsory on the man. But they say that it was not compulsory on the employer. Although the man was contractually bound to work 57 hours if required, the employers were not contractually bound to employ him for 57 hours. They were only bound to employ him for 40 hours. The employers say that under the statutory provisions, this meant that the normal working hours were 40.
The question depends on the true interpretation of Schedule 2 to the Contracts of Employment Act 1963. This contains a definition of "normal working hours" on which the redundancy payments are to be calculated. This appears from Schedule 1 of the Redundancy Payments Act of 1965.
So I turn to paragraph 1 of Schedule 2 of the 1963 Act, It says this:-
"1(1) For the purposes of this Schedule the oases where there are normal working hours include cases where the employee is entitled to overtime pay when employed for more than a fixed number of hours in a week or other period, and, subject to the following subparagraph, inthose cases that fixed number of hours (in this paragraph referred to as 'the number of hours without overtime') shall be the normal working hours.
(2) If in such a case —
(a) the contract of employment fixes the number, or the minimum number, of hours of employment in the said week or other period (whether or not it also provides for the reduction of that number or minimum number of hours in certain circumstances), and.
(b) that number or minimum number of hours exceeds the number of hours without overtime, that number or minimum number of hours (and not the number of hours without overtime) shall...
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...119 I agree with the judgment of Rix LJ and add only a few words on the true construction of the first contract. 120 In Tarmac Roadstone Holdings v Peacock [1973] 1 WLR 594 Lord Denning MR gave three non-exhaustive examples of overtime arrangements (at pages 598–599, all in the context of "......
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...are based on "normal working hours". This Court recently considered how these are to be calculated. It was in the case of Tarmac Roadstone Holdings Ltd. v. Peacock (1973) 1 W.L.R. 594. It shows this: if a man is obliged to work a fixed number of hours overtime and his employers are bound to......
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