LORD JUSTICE ACKNER: Mr. Birch and Mr. Humber appeal against the decision of the Employment Appeal Tribunal (presided over on this occasion by Mr. Justice Nolan) which on 2nd November 1983 reversed the decision of the Industrial Tribunal given on 8th March 1983. The decision was on a preliminary point, namely, whether or not the appellants were dismissed by the respondents, the University of Liverpool, so as to make them potentially eligible for payments under the redundancy legislation. The Industrial Tribunal decided that the appellants had been dismissed by the University. The Employment Appeal Tribunal held that their contracts had been terminated by mutual consent and accordingly the appellants did not qualify for consideration for redundancy payments.
The dispute arises in the following circumstances. The appellants were both employed by the University as technicians. In March 1981 a scheme was adopted by the University and the Liverpool Unions Liaison Committee. That scheme was headed "Premature retirement compensation scheme for members of staff in membership of the University of Liverpool Pension Fund Scheme". I will refer to a few paragraphs since they appear to me to be relevant to the determination of the issue:
"1. The University has introduced the Premature Retirement Compensation Scheme for Members of Staff in membership of the University of Liverpool Pension Fund.
2. The Scheme is not a redundancy scheme and therefore any retirement under the Scheme is subject to the Agreement of both the University and the Member of Staff concerned.
6. Whether a proposed retirement is in the managerial interest of the University will be determined by the Establishments Main Sub-Committee of the Establishments Committee who will be supplied with appropriate information."
It then goes on to deal with what happens if the University assents to the premature retirement, which provides that in that situation "the University will normally agree to purchase the maximum number of years allowable" as provided in the Scheme; it will "certify that the retirement is in its managerial interest"; and it will "formally request the Member of Staff to retire having received a formal written application from him/her so to do."
In the annexe to the introduction which I have just read, the Scheme referred to is 'the Premature Retirement Compensation Scheme'. In the definitions, premature retirement, for the purpose of the Scheme, is retirement before normal retirement age by agreement between the employee and the employer, which the employer certifies is in its managerial interest. The normal retirement age is 65 in the case of men, and 60 in the case of women. Mr. Birch, at the material time, was 61 and Mr. Humber was 62.
Then the Scheme sets out the nature of the compensation which, in round terms, can be described as increasing the amount of the pension and/or the lump sum payment by deeming extra years of service. So much for a brief reference to the Scheme agreed in March 1981.
On 17th July 1985 a letter was written by the Vice Chancellor to all employees in order to report on the result of a meeting of the University Council, which meeting was called because of the reduction in funds available from the University Grants Committee. The reduction was such that substantial deficits were likely in the year 1981/82 and as a result of further reductions in future years, which had already been announced by the University Grants Committee, that deficit was likely to increase substantially by 1983/84.
The next two paragraphs read as follows:
"The Council has asked the Academic Planning Committee and the Finance Committee to examine urgently how a reduction of £5 million in the University's budget might be achieved in the long term. During the next few months these Committees will therefore be looking at expenditure in every area of the University to see where economies might be achieved. I think it will be clear to everyone, however, that such a cut back in expenditure can only be achieved in the long term by a reduction in the number of staff that we employ. In very general terms the reduction in resources available to us indicates the need to slim down our work force by about 300 posts over the next few years.
I hope that all members of staff will be reassured that as far as is possible the University will try to achieve economies without causing hardship to its employees, whether academic, technical, secretarial, clerical, administrative or support staff. In examining in detail how we might slim down our activities in order to reduce our annual expenditure by the required £5 million our hope would be to rely mainly on natural wastage through normal retirements, early retirements and resignations. We cannot, at this stage, however, rule out the possibility of some redundancies in future years."
The next step in the history is a circular letter of 4th January, which was sent by the Registrar to all eligible members of staff in membership of the University's Pension Fund. It was headed "Premature Retirement Compensation Scheme for Members of Staff in Membership of the University of Liverpool Pension Fund", and the Registrar wrote:
"I am circulating this memorandum in order to draw the attention of eligible Members of Staff in membership of the University of Liverpool Pension Fund to the attached Premature Retirement Compensation Scheme which has the approval of the Liverpool University Unions' Liaison Committee and of the University Council.
A Member of Staff who wishes to obtain details of the financial benefits which may be available to him or her on early retirement is invited to write to the Superannuation Section of the Finance Office seeking this information."
The letter goes on to say:
"Applications to retire on 31st July 1982, should be made in writing to me so as to reach me not later than 19th March 1982. All applications for Premature Retirement will be considered by the Establishments Main Sub-Committee. If any application is approved, the Member of Staff will then be required to confirm in writing, his or her acceptance of the offer, or otherwise."
The date, 19th March 1982, was later extended.
On 22nd March 1982 a letter was sent reminding staff of their eligibility for the Premature Retirement Compensation Scheme and notifying them of the extension. This letter makes no reference to redundancy, neither of course did the letter which I have quoted dated 4th January 1982.
I come now to Mr. Birch. On 19th January 1982 he applied for premature retirement. He wrote in terms, saying: "I wish to make formal application to retire on 31st July 1982." He said he had received the figures from the Finance Officer, according to the Scheme of December 1981. In regard to the figures which the Finance Office supplied, what they did was to set out the benefits which would be payable to the employee on the assumption that he retired with his present accrued years of service, and then it set out the extent to which the pension and/or the capital sum was enhanced under the scheme if the advantages of the scheme were accepted and the application to retire under and pursuant to that scheme was approved.
Mr. Birch's letter was acknowledged on 27th January 1982. His application was considered in March 1982 by the Establishments Main Sub-Committee and they agreed to his request. On 23rd March 1982 the Registrar wrote to him telling him of the Establishments Main Sub-Committee's decision and asking him to send a formal written application to retire on 31st July, in which event he would then, following the form of the scheme, formally request him in writing to retire.
Formal application was made by Mr. Birch the following month. He said: "I am now, as requested, making formal written application to retire on 31 July 1982. I am not certain yet whether I shall be able to take outstanding holidays before or after that date - depending upon departmental needs." On 7th April that letter was acknowledged by the Registrar: "The University hereby confirms that it is in the managerial interest for you to retire under the Premature Retirement Compensation Scheme and requests you to do so on 31st July."
Some weeks went by, until 8th July 1982, when Mr. Birch wrote saying: "Having accepted the University of Liverpool's offer to take early retirement, I hereby claim redundancy payment."
So much for Mr. Birch's position on the correspondence. I now come to that of Mr. Humber. This followed the same pattern and Miss Cotton accepts that there is no significant difference between Mr. Birch's position and Mr. Humber's. Very briefly, it was early in 1982 that he requested the financial details. They were supplied on 3rd February 1982. He applied on 7th March 1982. (There is an error in the date given for his letter, but that is the correct date). On 16th March his application was considered by the Establishments Main Sub-Committee and his request was agreed. Later in that month he was informed of that decision and, as in Mr. Birch's case, was requested to make a formal written application. He made that application to retire on 15th April and on 28th April there was a letter from the University confirming that Mr. Humber "will retire at the University's request with the benefits of the scheme on 31st July 1982". On 30th June (i.e. the month prior to the month on which Mr. Birch made his application) Mr.
Humber wrote in these terms:
"My union has pointed out to me that my position as instrument technician will not be refilled due to de-manning. My former letter of confirmation states that I shall retire at the University's request and in their managerial interests have I therefore any claim for redundancy payments in this respect?"
Having considered the matter, the University took the view that neither men had any claim because they had not, so they alleged, dismissed them; their contracts had in each case been determined by mutual consent.
The material section of the Employment Protection (Consolidation) Act 1978 is section 81, which provides:
"81(1) Where an employee who has been continuously employed for the requisite period -
(a) is dismissed by his employer by reason of redundancy,
or
(b) .....
then, subject to the following provisions of this Act, the employer shall be liable to pay to him a sum (in this Act referred to as a "redundancy payment") .....".
Section 83(1) of the Act provides:
"83(1) In this Part, except as respects a case to which section 86 applies, "dismiss" and "dismissal" shall, subject to sections 84, 85 and 93, be construed in accordance with subsection (2)."
Subsection (2) so far as material, states:
"83(2) An employee shall be treated as dismissed by his employer if, but only if, -
(a) the contract under which he is employed by the employer is terminated by the employer, whether it is so terminated by notice or without notice
...."
So justification for the preliminary issue is clearly to be found in section 83, because it is a condition precedent to a right to claim redundancy payments under this legislation that the employee should have been dismissed by the employer.
The material parts of the decision of the Industrial Tribunal are to be found in paragraphs 11 to 13 inclusive. The decision is based upon two grounds said to be in the alternative. Paragraphs 11 to 13 read as follows:
"11. If upon receipt of that letter from the Vice Chancellor and the invitation to apply for early retirement the applicants had terminated their employment we would have felt bound to have followed the said cases to which we have been referred by the respondents and say the applicants had not been dismissed. It is clear from the facts found that the applicants did not terminate their employment, they applied for early retirement following the respondents' letters. They were offering to retire, and it was subject to the respondents' approval. The respondents after considering the requests in the case of Mr. Humber by their letter of 28 April ... said he would retire at the University's request on 31 July 1982. In the case of Mr. Birch, by their letter of 7 April 1982 ... they said it was in their interests that he should retire and they were requesting him so to do on 31 July 1982. We are unanimous that the respondents dismissed the applicants by their letters of 7 April and 28 April 1982. It was those letters which put an end to the applicants' employment and stated the date when the employment would end.
12. Accordingly the unanimous decision of the Tribunal is that the applicants' employment was terminated in accordance with Section 83(2)(a).
13. If we are wrong in so finding that the respondents dismissed the applicants and there was a consensual dismissal then having regard to the decision in Burton, Alton and Johnson Ltd. v. Peck, then the fact that an employee may agree to his dismissal for redundancy is no ground for holding that a dismissal did not take place within the meaning of section 82(2)(a) of the said Act. These applicants made an application to retire because of the cut back in funds and the respondents' needs to lose some 300 jobs. We are satisfied that there was what is generally called a redundancy situation namely it was being made known by the respondents that their requirements for employees to carry out work was expected to diminish."
Before this court Miss Cotton took as her first point, if not her main point, that the Employment Appeal Tribunal had no jurisdiction to entertain the appeal and it would accordingly follow that, if that was the case, the Industrial Tribunal decision would stand. The point was taken, it appeared to be taken somewhat shortly because it is only the subject matter of a sentence of two at the end of the judgment of the Employment Tribunal, and that part of the judgment reads as follows:
"Mr. Hendy has submitted that the question "Who has terminated the employment?" is a question of fact. In the vast majority of cases, that will be so, but in the present case we take the view that the Industrial Tribunal, in deciding that the contracts were terminated by the University, misdirected themselves as to the effects in law of the undisputed acts and words of the parties."
It seemed to me that Miss Cotton was minded to submit that the Industrial Tribunal is in some special situation, different from other tribunals, when one considers what are questions of fact and what are questions of law. She submitted that a question of law could not arise as to whether, on the facts found, an industrial tribunal was entitled in law to hold that there had been a dismissal. Miss Cotton sought to support that proposition on the basis of a decision of this court,
Martin -v- Glynwed Distribution Ltd. [1983[ ICR 511. The facts are shortly set out in the headnote in these terms:
"The employee, a warehouse manager, was told by his employers that there would be an inquiry into an incident in which the employee had severely damaged the employers' mini-bus by driving it into three stationary cars. He was also told that the inquiry would probably result in his dismissal and that it would be in his best interests to resign. The employee did resign and, on his complaint of unfair dismissal, he alleged that he had been dismissed since the employers had given him no option but to resign. The industrial tribunal held that the employee had voluntarily terminated his employment and dismissed his complaint. On appeal the appeal tribunal by a majority held that the industrial tribunal had erred in law in finding that the employee had not been dismissed."
The Court of Appeal held that that case depended upon its determination of its relevant facts and accordingly, there only being a right of appeal on a question of law, the Appeal Tribunal had no jurisdiction.
The respective opinions of the majority and minority members of the Employment Appeal Tribunal are set out at pages 517 to 518. It is clear that the majority decision was based upon their view that the tribunal had erred in law in failing to consider the causation of the employee's resignation, in the sense explained by Mr. Justice Arnold (as he then was) in Sheffield v. Oxford Controls Co. Ltd. [1979] ICR, 396.
In the minority view, expressed by Mr. Justice Waterhouse, the Industrial Tribunal were entitled to hold that there was no threat of dismissal. He pointed out that there was no finding by the Industrial Tribunal of duress. On the contrary there was a finding that the employers' representative genuinely thought that he was helping the employee in giving him the advice that he gave.
In my judgment that case raised essentially questions of fact and degree. Was there any pressure placed upon the employee to resign?; and if so, was the degree of pressure such as to amount in reality to a dismissal? That question was answered by the Industrial Tribunal in the negative. I quote from the short judgment of Sir Denys Buckley at page 521:
"It was a finding upon the question whether on the primary facts the employee in choosing to resign was in fact exercising his own right to choose whether to resign or to submit to an inquiry, or whether he was induced to resign by the conduct of Mr. Daly. The appeal tribunal could only interfere with such a finding if, in the opinion of the appeal tribunal, it was a conclusion to which no reasonable tribunal could have come. Upon the facts of this case the appeal tribunal could not, in my opinion, properly take that view."
There is no suggestion in the instant case of any pressurisation. There are no relevant additional facts to the facts that can be gleaned from the documents to which I have referred.
Miss Cotton referred us to the case in the House of Lords of Melon & Others v. Hector Powe Ltd. [1981] ICR, 43. That was a case arising in Scotland which raised an issue as to whether or not there had been a change of ownership of the relevant business, or merely a sale of assets. The decision of the court, as summarised in the headnote, is in these terms:
"..... the industrial tribunal had addressed their mind to the proper question and on the facts found by them they were entitled in law to hold that there had been a transfer of assets and not a disposal of part of the business within section 13(1)(a) ... so that the respondents, having been dismissed, were entitled to redundancy payments."
That summary properly summarises the decision and it is clear that this is yet another example of a case which fell to be decided as a matter of fact and degree.
When Mr. Justice Nolan, giving the judgment of the appeal tribunal, said that "in the vast majority of cases, it will be a question of fact who has terminated the employment", that was because in the vast majority of cases the issue arises from a consideration of the motivation for and the causation of a unilateral notice by an employer or employee. This case is unusual in this respect. The employers gave an invitation to the appellants to resign, but it was a qualified invitation because, if accepted by the employee, the application by the employee to resign had to be approved by the employers, after consideration as to whether it was in the managerial interests of the university that his employment should so determine.
In my judgment the Employment Appeal Tribunal had clear jurisdiction to consider whether on the facts found (in this case on the agreed facts, because there were none in dispute) the Industrial Tribunal were entitled in law to hold that there had been a dismissal.
I come, therefore, to paragraph 11 of the Decision, because this is the main basis of the Decision. The first sentence, "If upon receipt of that letter from the Vice Chancellor and the invitation to apply for early retirement the applicants had terminated their employment we would have felt bound to have followed the said cases to which we have been referred by the respondents and say the applicants had not been dismissed" is the clearest indication, if any was required, that no suggestion of pressurisation was in the minds of the tribunal in this case. What they were saying was - and this is apparent from what follows in this paragraph - if there had been a unilateral notice from the appellants, saying 'we have decided to resign and we send herewith our notice', that could not have been a case of dismissal by the employer. The central part of paragraph 11 next follows: "It is clear from the facts found that the applicants did not terminate their employment, they applied for early retirement following the respondents' letters. They were offering to retire ....". Then the Industrial Tribunal refers to the letters of acceptance of that offer, and they go on to say, "It was those letters which put an end to the applicants' employment and stated the date when the employment would end. 12. Accordingly the unanimous decision of the Tribunal is that the applicants' employment was terminated in accordance with the Section [i.e. by the employers]."
To my mind that clearly states that it was the exercise of the power not to refuse the offer of resignation which brought about the termination. It was the view of the Industrial Tribunal that if the power to refuse the offer of resignation is not exercised, and the offer of resignation is then accepted, then it is the employer who has terminated the employment. Miss Cotton put it in this way: "Because the employers have the power to say yeah or nay, they are dismissing the employee when they say yeah". Miss Cotton accepts that that is a proposition of law.
This was dealt with by the Employment Appeal Tribunal in their judgment in these terms:
"Nor can we regard it as correct to say that it was those letters from the University which put an end to the respondents' employments. The employments were terminated by the combined effect of the respondents' offer to retire on 31st July 1982 and the University's acceptance of that offer. Every contract results from an offer and the acceptance of that offer, but it cannot be right to say that the contract is made by the party who accepts rather than by the party who offers."
In my respectful judgment that is a wholly correct answer to Miss Cotton's proposition.
Miss Cotton has urged upon us that, although in the ordinary non-redundancy case, there can of course be a determination by mutual consent, that cannot as a matter of law exist where there is a redundancy situation; and by "redundancy situation" she has in mind section 81(2)(b), which reads as follows:
"81(2) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to -
(b) the fact that the requirements of that business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where he was so employed, have ceased or diminished or are expected to cease or diminish."
And here you have such a case because, as was pointed out in the letter of 17th July 1981 from the Vice-chancellor, there was a need to slim down the workforce by about 300 posts.
The decision whether or not there has been a dismissal within the meaning of section 83 has to be decided before one considers whether the result of that dismissal is to entitle the employee to make a claim for redundancy payments. The two are disassociated. Miss Cotton has shown us no authority for the proposition, which I find a strange one, that the mere fact that the requirement of the business for employees is expected to diminish, should make it in law not possible to have a determination of the contract by mutual consent. I put to her the simple example of an employer who envisages some time in the future, e.g. because of new technology, the need to slim down his workforce and makes an offer to those who are prepared to resign rather than to wait to volunteer for redundancy and supports that offer with a financial inducement which is far in excess of what is likely to be obtained under the redundancy legislation. It seems to me clear that in such a situation, assuming no question of any coercion of any kind, that if that offer is accepted there can be no question of there having been a dismissal. Yet that is a situation which presupposes what has been referred to conveniently as a "redundancy situation". It is true that in Martin's case at page 519, Sir John Donaldson M.R. said:
"Whatever the respective actions of the employer and employee at the time when the contract of employment is terminated, at the end of the day the question always remains the same, 'Who really terminated the contract of employment?' If the answer is the employer, there was a dismissal within paragraph (a) of section 55(2) of the Act of 1978. If the answer is the employee, a further question may then arise, namely, 'Did he do so in circumstances such that he was entitled to do so without notice by reason of the employer's conduct?"
The fact that the Master of the Rolls did not refer to a situation where the contract was determined by mutual consent, to my mind merely indicates that he was not considering that unusual situation, and not that he was deciding that such a situation could not exist.
I come then to paragraph 13, which is put forward by the Industrial Tribunal as an alternative basis for their decision. In a sentence what they are saying, as I understand it, is: "the present situation before us is a Burton, Allton & Johnson Ltd. v. Peck situation and that entitles us to find that the University dismissed the appellants within the meaning of the section". I therefore come straight to that decision which is reported in [1975] ICR, 193. The material facts of the case can be shortly stated. The employee had been off work on account of his illness for quite some time. His employers considered that it would be in his own interests to accept redundancy, but they were concerned as to whether this could be done while he was still away sick. When he returned to work he was seen by the area supervisor; he was told there was no work for him, but that a meeting was to be arranged between the area supervisor and him in order that they should both go to the employment exchange. The majority of the Industrial Tribunal found that the employee had been dismissed on the day of his return to work. Mr. Justice Griffiths (as he then was) presided over the tribunal and at page 197 he said:
"It seems to me, in the face of the evidence, that [the area supervisor] told the employee that there was nothing for him, that he knew he was to be made redundant, and that he was sent home without work or pay, that it is impossible to say that there was no evidence on which the lay members could come to the conclusion that he was in fact dismissed on the occasion of the meeting between him and [the area supervisor]."
The part which is essentially relied upon is how Mr. Justice Griffiths dealt with the submission that, on the evidence, Mr. Peck (the employee) was very ready to be dismissed on the grounds of redundancy and that accordingly the termination of the contract was by mutual consent, rather than by the unilateral dismissal by the employer. At page 198, Mr. Justice Griffiths said this:
"It must be appreciated that it is to be hoped that in the large majority of cases where a man is made redundant, it will be effected after discussions and where both parties are in agreement that that is the best course to take. In any large organisation one expects to find that there are consultations between management and unions to thrash out the whole redundancy situation, that the employees are then brought into discussions and that the first to be made redundant are those who volunteer for it. One also hopes that before they are made redundant very serious attempts will have been made to have other employment ready for them. But the fact that all that is done does not prevent the dismissal, when it comes, being a dismissal within the terms of section 3(1) (a) of the Act."
He therefore held that the fact that Mr. Peck had agreed to the redundancy was no ground for holding that it was not a dismissal.
This case was relied upon before the Employment Appeal Tribunal, and this is what Mr. Justice Nolan said:
"As we understand that decision, it was based upon the finding by the majority of the industrial tribunal that Mr. Peck's contract of employment had been terminated by his dismissal. The passages in the judgment of the learned judge which we have quoted are designed to make it clear that the fact that an employee has no objection to being dismissed, or even volunteers to be dismissed, does not prevent his dismissal, when it occurs, from being a dismissal within the meaning of the Act. We do not read the judgment as encroaching in any way upon the distinction which exists in law between a contract which is terminated unilaterally (albeit without objection, and perhaps even with encouragement from the other party) and a contract which is terminated by mutual agreement. The phrase "consensual dismissal" which the industrial tribunal used seems to us, with respect, to blur this critical distinction. In every case it will be necessary to determine what it is that has had the effect, as a matter of law, of terminating the particular contract, and on the undisputed facts of the present case it seems to us clear for the reasons already given that the termination was effected by mutual agreement and not be dismissal."
I endorse wholeheartedly those observations, which seem to me to meet entirely the point made that this is a Burton, Allton & Johnson situation.
A further case was drawn to our attention, and indeed to the attention of the Employment Appeal Tribunal, and that was Lancashire County Council v. Hallam, which is unreported. It is a decision of the Employment Appeal Tribunal given on 7th April 1982 and was presided over by the then President, Mr. Justice Browne-Wilkinson, as he then was. In that case the Department of Education and Science introduced a premature retirement scheme for teachers which could be, and in fact was, adopted by the County Council. The purpose of the scheme was to reduce the numbers of teachers at schools maintained by the County Council since overall the requirements of teachers had diminished. The scheme extended both to teachers whose contract of employment was with the County Council and to teachers at aided schools who, although employees of the Governors, were ultimately paid by the County Council. Under the scheme, any eligible teacher could apply for premature retirement. Mr. Justice Browne-Wilkinson said this:
"If his teaching post was redundant, his application would at once be accepted and he would be dismissed on the grounds of redundancy. But if the applicant's own teaching post was not itself redundant, his application could not be accepted unless and until another teacher (whose own post was redundant) had resigned from that redundant post and been accepted to fill the post of the applicant for premature retirement. Applicants for premature retirement received accelerated and improved pensions and were told that 'generally' they would also be entitled to a redundancy payment."
To my mind this statement clearly suggests that there was to be a dismissal within the meaning of the Act. In giving the judgment of the Appeal Tribunal, Mr. Justice Browne-Wilkinson referred to the part of the judgment of Mr. Justice Griffiths, to which I referred earlier in my judgment, and said:
"Applying that to the present case, the County Council put forward the early retirement scheme and invited Mr. Hallam and other eligible teachers to apply for voluntary redundancy. Although Mr. Hallam was a consenting party, he was in fact sent a letter expressly terminating his employment on 31st August 1981. It was that letter which brought the employment to an end. In our view the case falls directly within the principle stated by Griffiths, J., and in the circumstances this is not to be regarded as a consensual resignation, just because Mr. Hallam was a willing party."
It seems to me that the learned judge is recognising, although not deciding, that you can have a consensual resignation in a redundancy situation; but I agree with the view of the Employment Appeal Tribunal in the instant appeal that the scheme was materially different from the one with which we are concerned, as was indeed the method of terminating the contract of employment, and I do not therefore find it of any assistance.
Accordingly, for the reasons which I have given, I would dismiss this appeal, being satisfied that the Employment Appeal Tribunal had jurisdiction to entertain an appeal and that their decision was wholly correct in every particular.
LORD JUSTICE SLADE: I agree, but will add something of my own out of deference to Miss Cotton's vigorous and able argument.
One of the submissions which she particularly stressed was that in holding that the appellants had not been dismissed within the meaning of section 83(2)(a) of the Employment Protection (Consolidation) Act 1978, the Employment Appeal Tribunal were substituting their own findings of fact for those of the Industrial Tribunal and that they had no jurisdiction so to do.
As Lord Fraser said in Melon v. Hector Powe Ltd.[1981] 1 ICR 48:
"It is common ground that the appeal from the industrial tribunal to the Employment Appeal Tribunal and thence to the courts is open only on a question of law. The appellate tribunals are therefore only entitled to interfere with the decision of the industrial tribunal if the appellants can succeed in showing, as they seek to do, that it has either misdirected itself in law or reached a decision which no reasonable tribunal, directing itself properly on the law, could have reached (or that it has gone fundamentally wrong in certain other respects none of which is here alleged). The fact that the appellate tribunal would have reached a different conclusion on the facts is not a sufficient ground for allowing an appeal."
Nevertheless, as appears from this citation, it was open to the Employment Appeal Tribunal in the present case to overrule the decision of the Industrial Tribunal if it was shown that the Industrial Tribunal had reached a decision which they were not entitled in law to reach on the facts as found by them.
In substance, the basic submission of the University (which was in the event accepted by the Employment Appeal Tribunal) was that the Industrial Tribunal, in deciding that on the facts found by them the two appellants' employment was "terminated by the employer", within the meaning of section 83(2)(a) of the 1978 Act, reached a decision which was demonstrably wrong in law. Whether or not this submission on the part of the University was well founded, it was undoubtedly a submission of law and not fact. With due respect to the argument, it seems to me that the contention that the Employment Appeal Tribunal had no jurisdiction to adjudicate on this submission is misconceived.
I, too, have come to the conclusion that the Industrial Tribunal's decision, on the basis of the facts found by them, showed a clear misdirection in law and that the Employment Appeal Tribunal was right so to hold.
Since the appellants' case is based on section 83(2)(a) of the 1978 Act, it may perhaps be worth making one observation as to the construction of the relevant wording of that subsection, which reads as follows:
"83(2) An employee shall be treated as dismissed by his employer if, but only if, -
(a) the contract under which he is employed by the employer is terminated by the employer, whether it is so terminated by notice or without notice ...".
In my opinion this subsection, on its true construction, is directed to the case where, on a proper analysis of the facts, the contract of employment is terminated by the employer alone. It is not apt to cover the case where, on such an analysis, the contract of employment has been terminated by the employee, or by the mutual, freely given, consent of the employer and the employee. In a case where it has been terminated by such mutual agreement, it may properly be said that the contract has been terminated by both the employer and the employee jointly, but it cannot, in my view, be said that it has been terminated by the employer alone.
The authorities, I think, require one to look at the realities of the facts, rather than the form of the relevant transactions, in deciding whether the contract has been "terminated by the employer" within the meaning of the subsection. As Sir John Donaldson, M.R. put it in Martin v. Glynwed Distribution [1983] ICR, 519:
"Whatever the respective actions of the employer and employee at the time when the contract of employment is terminated, at the end of the day the question always remains the same, 'Who really terminated the contract of employment?'"
I respectfully agree with what Lord Justice Ackner has said in relation to that passage. The Master of the Rolls did not expressly advert to the possibility that a termination of a contract of employment could be effected by the action of both employer and employee, but I do not read his judgment as negativing such a possibility. On the facts of the present cases it seems to me that, in answer to the question posed by him, there can be only one answer: that is that the contract of employment in each case was terminated not by the employer but by the freely given mutual consent of the employer and employee.
So far as one can gather from paragraph 11 of their decision, the Industrial Tribunal seems to have considered that each of the contracts was terminated by the employer alone because (a) the termination would not and could not have taken place but for the employer's acceptance of the applications for premature retirement, and (b) such acceptance was in each case the last link in the chain of relevant events. The Employment Appeal Tribunal, in my opinion, was right to regard this as a non sequitur. One cannot isolate the acceptance of the applications from the formal applications to retire. It was these applications and the acceptances together which brought about the terminations.
The Employment Appeal Tribunal, in my view, correctly drew attention to the important distinction which exists in law between the case of a contract of employment which is terminated unilaterally by the employer, albeit without objection and perhaps even with encouragement (see Burton, Allton & Johnson v. Peck [1978] ICR, 193), and the case of a contract which is terminated by mutual agreement. As I have already indicated, in the latter case it cannot, in my opinion, correctly be said that a contract of employment has been "terminated by the employer" within the meaning of section 83(2)(a). It follows, in my opinion, that, as the Employment Appeal Tribunal states, the reasoning in paragraph 11 of the Industrial Tribunal's decision is demonstrably fallacious in law.
Turning briefly to paragraph 13 of the Industrial Tribunal's decision, I would agree with the Industrial Tribunal that the fact that an employee may agree to his dismissal for redundancy does not necessarily prevent a dismissal taking place within the meaning of section 83(2)(a), in a case where there has in truth been a dismissal for redundancy. I also accept, of course, that as the Tribunal found as fact, the appellants in the present case made applications to retire because of the cutback in funds and the University's need to lose some 300 jobs, and that there was a redundancy situation in the sense defined by the Industrial Tribunal - that is to say, it was being made known by the University that their requirements for employees to carry out work were expected to diminish. However, the highest it can be put on the facts of the present case is that the University had given implicit warnings of possibly redundancies to come. This is not, on its agreed facts, a case where the employees had been told that they were personally no longer required in their employment, or where they had been expressly invited or placed under pressure to resign. It is therefore distinguishable, for instance, from the case of East Sussex County Council v. Walker [1972] ITR,280.
Two points, in my view, are of considerable importance in considering paragraph 13 of the Industrial Tribunal's decision. First, there was no evidence, or finding by the Tribunal, that the appellants were in any way led to believe that they would be compulsorily retired before normal retiring age, if they did not voluntarily apply for premature retirement under the Premature Retirement Compensation Scheme. Secondly, there is no finding that the University led the appellants to believe that they would be entitled to a redundancy payment if they applied for premature retirement under the scheme. Though persons in their position were encouraged to make such an application, the scheme was not in any way presented to them as being a voluntary redundancy scheme. Paragraph 2 of the scheme states in terms that it is not a redundancy scheme and that therefore any retirement under it is subject to the agreement of both the University and the member of staff concerned.
The facts of the present case, therefore, seem to me to be far removed from those of the unreported case of Lancashire County Council and Hallam, to which my Lord has referred. The scheme in that case, as described in the judgment of Mr. Justice Browne-Wilkinson, was one under which any eligible teacher could apply for retirement and "if his teaching post was redundant, his application would at once be accepted and he would be dismissed on the grounds of redundancy." Furthermore, in that case, as appears from the judgment, applicants for premature retirement were told that generally they would be entitled to redundancy payments.
In contrast, the very essence of the scheme in the present case is that persons who apply for premature retirement under the scheme and whose applications are accepted will become entitled to certain financial benefits to which they would not be entitled under the scheme if their contracts of employment were terminated by unilateral action on the part of the University on the grounds of redundancy.
For these reasons and the further reasons given by Lord Justice Ackner, with which I respectfully agree, I think that the Employment Appeal Tribunal in the present case clearly reached the correct conclusion. I, too, would dismiss this appeal.
LORD JUSTICE PURCHAS: I agree. For reasons similar to those of my Lord, Lord Justice Slade, I wish to add a few words of my own.
Miss Cotton fairly conceded that this appeal turned on a reading of section 83(2)(a) of the Employment Protection (Consolidation) Act 1978 but submitted that the finding whether or not the applicant had been dismissed within the meaning of that section was one of fact for the Tribunal which was not susceptible to review by the Employment Appeals Tribunal.
With respect to Miss Cotton's able arguments, I agree with Lord Justice Slade that that contention simply cannot be supported. It is contrary to the judgment of Mr. Justice Widgery (as he then was) in Morton Sundour Fabrics Ltd. v. Shaw [1967] Vol.2 ITR, 84, with whom Lord Parker, C.J. and Mr. Justice O'Connor (as he then was) agreed. I cite only one short passage from page 86:
"This [referring to the question of the termination of the contract] is not solely a matter of fact. It involves questions of law as well. It is the law, as I understand it, that just as a tenancy determined by a notice to quit requires a certain amount of particularity in the notice, so are there certain formalities about the type of notice necessary to determine a contract of employment. The notice may be a peremptory notice; sometimes it is referred to as a dismissal without notice, but if it is to operate on a future date, the notice must specify that date or at least contain facts from which that date is ascertainable."
Lord Justice Slade has also cited part of the speech of Lord Fraser in Melon v. Hector Powe Ltd., and I only wish to add to that citation that it is clear from the passages in the speech on page 49 that Lord Fraser was referring to findings of facts. He said:
"My Lords, it is clear from the findings of the industrial tribunal that there were some factors pointing towards this transaction being a change of ownership of part of the appellants' business, and other factors pointing towards it being a mere change of ownership of particular assets. The decision between those two views was one of fact and degree for the industrial tribunal, as it must be in all, or almost all, such cases. The industrial tribunal addressed themselves, in my opinion, to the proper question:
....
Counsel for the appellants argued that there were no factors which could have been taken to show that this was a mere sale of assets. I cannot agree."
Lord Fraser then describes part of the evidence about which there was a dispute and in respect of which the Industrial Tribunal made findings of fact.
It is, therefore, in my judgment, clear that the application of the primary facts, which in this case are not disputed and for the most part contained in written documents, to the meaning of section 83(2)(a) is a matter of law and an interpretation of the statutory definition to which Sir John Donaldson M.R. referred in Martin's case, to which reference has already been made. In my judgment dismissal, as it is defined in that section, is not consistent with free, mutual consent, bringing a contract of employment to an end. I add the word "free" in recognition of the authorities where it has been held to have been a dismissal when the employee has resigned, or agreed to voluntary redundancy under what has been described as threat, or perhaps even in the anticipation of dismissal. Those cases have already been mentioned by my Lords - the East Sussex County Council v. Walker and Burton Allton & Johnson v. Peck.
For those reasons, therefore, I consider that where there is a mutual consent established and freely reached between the parties, this is inconsistent with the word "dismissal" as defined in section 83 and indeed in its ordinary usage.
Miss Cotton has strenuously submitted that, where there is what she describes as a redundancy situation, it is not possible to have a mutual determination of a contract of employment. With great respect I find myself unable to agree with that contention. One must, in my judgment, look at the substance of the matter and if there is no dismissal in the sense which I have described, then one does not move further than section 83(2)(a) and Miss Cotton's reference to section 81(2)(b) does not assist in the consideration whether or not there has been a dismissal at all. Section 81(2) merely provides that if a dismissal is established, then in a redundancy situation therein described, that dismissal will be deemed to have been as a result of redundancy.
I now wish to add a few words on the question of the determination by the Industrial Tribunal as recorded in paragraph 11, which has been quoted by Lord Justice Ackner in his judgment. Miss Cotton's submission in support of that paragraph was that the party which brought the employment to an end was the University, that the offer to accept early retirement under the scheme did not become effective as a resignation because it was dependent upon the election of the employers.
With respect, I cannot agree with that submission. I would agree with the approach taken by the Employment Appeal Tribunal that, looking at the substance of the matter, this was an agreement reached between the parties. The agreement had two conditions upon it. One was the condition that the terms of the scheme would be applied and would benefit the applicant, and the other was that the University should agree to accept the individual applicant. The fact that conditions made and accepted before the offer to resign came to fruition after that does not, in my judgment, convert it from being a resignation and make it a dismissal, apart solely, of course, from the question of threat, to which I have already referred. Therefore, the fact that there were conditions, which in each of the cases with which we are concerned in these appeals were fulfilled, does not change the nature of the agreement reached between the parties.
I also agree, with respect, with both my Lords that Miss Cotton could not get assistance from the case of Martin v. Glynwed Distribution, and in particular from the judgment of Sir John Donaldson in support of her contentions. At page 519, to which my Lords have already referred, it is clear that in that case there were only two alternative solutions. One was that it was a free resignation and the other was that it was a resignation under threat because of the possible outcome of the inquiries into the accident which led to the difficulties between Martin and his employers. There was no third alternative of determination of that employment by mutual agreement, so that the consideration of the authorities and the statements of Sir John Donaldson at page 519 must, I would respectfully agree, be read against the context of the facts of that case and do not support Miss Cotton's contention that there is no room for a consensual agreement, which she herself limits, of course, to a redundancy situation in Martin's case.
I agree with my Lords in relation to the submissions made by Miss Cotton in support of paragraph 13 of the reasons given by the Industrial Tribunal and agree that the findings purported to be found in paragraph 13 cannot be supported on the uncontested evidence in this case. It is inescapable, in my judgment, that in making the statements included in paragraph 13, and equating this case with the case of Burton, Allton & Johnson v. Peck, it is clear that the Industrial Tribunal had misdirected themselves on a matter of law.
For these reasons and for the reasons given by both my Lords, with which I respectfully agree, I would also dismiss these appeals.
Appeals dismissed with costs
