W. Devis & Sons Ltd (Appellants) v Atkins (Respondent)
| Jurisdiction | UK Non-devolved |
| Judge | Lord Diplock,Viscount Dilhorne,Lord Simon of Glaisdale,Lord Edmund-Davies,Lord Fraser of Tullybelton |
| Judgment Date | 06 July 1977 |
| Judgment citation (vLex) | [1977] UKHL J0706-2 |
| Date | 06 July 1977 |
| Court | House of Lords |
[1977] UKHL J0706-2
House of Lords
Lord Diplock
Viscount Dilhorne
Lord Simon of Glaisdale
Lord Edmund-Davies
Lord Fraser of Tullybelton
Upon Report from the Appellate Committee, to whom was referred the Cause W. Devis & Sons Limited against Atkins, That the Committee had heard Counsel, as well on Monday the 16th, as on Tuesday the 17th and Wednesday the 18th, days of May last, upon the Petition and Appeal of W. Devis & Sons Limited whose registered office is at 14 West Smithfield, London EC1A 9DL, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 26th of October 1976, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament, might seem meet (which said Appeal was heard ex parte as to the Respondent Rowland Augustus Atkins, he not having lodged a Case in answer to the said Appeal, though ordered so to do), in which said Appeal Counsel was heard as amicus curiae; and due consideration had this day of what was offered for the said Appellants:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled. That the said Order of Her Majesty's Court of Appeal, of the 26th day of October 1976, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal, be, and the same is hereby, dismissed this House.
My Lords,
I agree with the speech about to be delivered by my noble and learned friend Viscount Dilhorne. For the reasons that he gives, I would dismiss this appeal, but in doing so I would add a word of warning as to the application of its ratio decidendi to compensation for unfair dismissal under the law that is currently in force.
The employee's claim for compensation for unfair dismissal was brought under Schedule 1 to the Trade Union and Labour Relations Act 1974. The provisions of this Schedule have since been amended by the Employment Protection Act 1975. Althought paragraph 6(8) of the Schedule which contains the test of what constitutes unfair dismissal remains unchanged, sections 73 to 76 of the 1975 Act provide that an award of compensation shall consist of two amounts—a basic award and a compensatory award. Although the provisions for the assessment of the compensatory award are in substantially the same terms as those of paragraph 19 of Schedule 1 to the Act of 1974, the basic award is assessed as a matter of arithmetical calculation on the employee's pay and period of continuous service prior to his dismissal. The right to this amount of compensation is automatic, save that, as in the case of compensatory awards, there is a "contributory fault" provision in similar terms to those of paragraph 19(3) of Schedule 1 to the Act of 1974.
Under both the 1974 and 1975 Acts, it is a condition precedent to any award of compensation that the dismissal of the employee should have been "unfair", so an employee who was dismissed for defrauding his employer or some other form of gross misconduct would have no right to compensation. While it is conceivable that Parliament misht have intended that a dismissed employee should be entitled to compensation, even though the reason for his dismissal was his own gross misconduct, I find it impossible to ascribe to Parliament an intention that the question as to whether a dismissed employee who had been guilty of gross misconduct was entitled to substantial compensation should depend upon whether or not he had been successful in concealing his own misdeeds until after his dismissal.
There were two ways of construing Schedule 1 to the Act of 1974 by which it was possible to avoid this consequence, which Parliament could never have intended. One was to construe paragraph 6(8) as if the overriding provision were the reference in parenthesis to the requirement to have "regard to equity and the substantial merits of the case", as constituting the over-riding consideration so as to exclude from the category of "unfair dismissal" dismissal of an employee who had successfully concealed his gross misconduct. The other way was to construe paragraphs 17( 3) and 19(1) as authorising a nominal or nil award when it was just and equitable so to do. The ordinary grammatical meaning of one or other of these provisions had to give way if justice and commonsense were not to be flouted and in the context of the Schedule as a whole the language of paragraphs 17( 2) and 19(3) gave way more easily than that of paragraph 6(8).
But if the same construction were placed upon paragraph 6(8) in what is now a different context resulting from the amendments contained in sections 71 to 80 of the Employment Protection Act of 1975, the result would be that the compensation provisions for unfair dismissal would have been converted into a veritable rogue's charter, for the tribunal would be bound to award to a fraudulent employee, because he had successfully concealed his fraud, a basic compensation which might well amount to a substantial sum.
The actual words of paragraph 6(8) of Schedule 1 to the Act of 1974 remain unchanged; but the context in which they fall to be construed now that the Act of 1975 has come into force, is different. Your Lordships' decision in the instant case is not, necessarily, authority as to their meaning in the new context.
My Lords,
In 1962 the respondent entered the appellant's employment. From 1971 until he was dismissed on the 21st October 1974, he was manager of their abattoir at Preston at a salary of £4,224 per annum During 1974 difficulties arose, according to the appellants, due to the respondent's consistent failure to comply with directions given to him. He was told to buy the bulk of the animals for the abattoir from farmers, but he continually bought from dealers.
So on the 21st October 1974 he was dismissed by the General Manager. On the 23rd October 1974 a letter was sent to him saying that his employment would be treated as terminated on the 22nd October. That letter stated that the appellants had been dissatisfied and unhappy, as the respondent knew, with the way in which he had been handling the business and with his inability to adapt himself to the wishes of the management. He had been told on the 21st October, and it was repeated in the letter, that he would be paid six weeks' salary in lieu of notice, and in the letter he was also told that the company would make him an ex gratia payment of £6,000.
Attached to this letter was a form to be signed by the respondent which stated:
"I agree to the above conditions concerning the termination of my employment and confirm that I have no further claims against the company."
That was not signed by the respondent and on the 1st November 1974 the offer to pay £6,000 ex gratia and six weeks' salary in lieu of notice was withdrawn, the letter of that date stating that since the 23rd October information had come to light that the respondent had been guilty of gross misconduct; and that the appellant would treat the respondent as summarily dismissed.
On the 10th November 1974 the respondent made an application to an industrial tribunal alleging that he had been unfairly dismissed. The appellants sent a notice of appearance dated the 3rd December in which they said that the respondent had been dismissed for gross misconduct, namely, "dishonest dealing in live animals" to the appellants' detriment between June and September 1974.
At the hearing before the tribunal the appellants sought to rely on the information as to the respondent's conduct which had come to their knowledge after his dismissal, in support of their contention that he had not been unfairly dismissed. The chairman indicated that at that stage of the hearing, the tribunal was not concerned with facts discovered by the appellants after the dismissal, though they could become relevant later if the tribunal found that the dismissal was unfair; and the tribunal declined then to hear evidence as to the matters which had come to the appellant's knowledge after he had been dismissed.
In their decision the tribunal pointed out that a warning given to the respondent in December 1973 might be taken to imply possible dismissal but was equally consistent with a change of managers being contemplated, and that, apart from that, no warning of any kind was given to him that his employment was in jeopardy. At the end of the appellants' case the appellants were told that the tribunal was not satisfied that they had established that they had acted reasonably in all the circumstances in dismissing the respondent; and after hearing the appellants' solicitor, the tribunal held that the appellants had acted unreasonably in treating the respondent's conduct as a sufficient reason for dismissing him and found that his dismissal was unfair. They did not think it practicable that he should be re-engaged by the appellants and it was left to the parties to seek a settlement of the proper compensation to be paid with liberty to apply to the tribunal if they were unable to agree.
From that decision the appellants appealed to the High Court without success. Their appeal to the Court of Appeal was also dismissed and they now appeal to this House.
They not unnaturally resent the stigma which results from the tribunal's decision. In this appeal they do not challenge that decision on the evidence the tribunal heard, but they say the tribunal erred in refusing to hear evidence of the respondent's conduct which came to their knowledge after his dismissal and so in preventing them from...
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