Lord Parker, C.J.: This is an Appeal from a decision of the Industrial Tribunal dated 21st July, 1966, whereby they declared that for the purpose of calculating redundancy payments to be made to the seven respondents, the amount of a week's pay in the case of each respondent should be computed upon the basis of a 51 hour normal working week.
These seven respondents were employed for some years by the present appellants, who are civil engineering and building contractors, on the construction of the United Kingdom Atomic Energy Project at Winfrith Heath in Dorset. As the project began to run down on nearing completion, these respondents were dismissed. The employers, the present appellants, have always conceded and concede that the respondents are each entitled to redundancy payments, but the employers' contention has been and is that the redundancy payments should be based upon a weekly wage calculated upon the basis of a 40 hour normal working week, whereas the respondent workmen contend that the normal working week was 51 hours.
Before proceeding further, it is convenient to look for a moment at the relevant legislation. By section 1(1) of the Redundancy Payments Act, 1965, it is provided that:
" Where on or after the appointed day an employee who has been continuously employed for the requisite period -
(a) is dismissed by his employer by reason of redundancy, or
(b) is laid off or kept on short-time to the extent specified in sub-section (1) of section 6 of this Act and complies with the requirements of that section,
then, subject to the following provisions of this Part of this Act, the employer shall be liable to pay to him a sum (in this Act referred to as a ' redundancy payment') calculated in accordance with Schedule I to this Act."
It is unnecessary to refer in any detail to Schedule I, save to point out that by paragraph 5(1) it is provided that:
"... the amount of a week's pay shall... be taken to be the minimum remuneration to which the employee would in the week ending with the relevant date have been entitled, under Schedule 2 to the Contracts of Employment Act, 1963, if the conditions in the next following sub-paragraph had been fulfilled ..."
Accordingly, one has then to turn to the Act of 1963, Schedule 2 of which provides by paragraph 1(1) that:
" For the purposes of this Schedule the cases 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 sub-paragraph, in those cases that fixed number of hours (in this paragraph referred to as ' the number of hours without overtime ') shall be the normal working hours."
Sub-paragraph (2) then goes on to say that:
" 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 of 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 be the normal working hours."
In other words, if there are fixed hours of work and voluntary overtime, then the only hours of work which are to be considered are the fixed hours. On the other hand, if the contract provides for compulsory overtime on top of the fixed period, then the total period for which the workman is contractually bound to work, whether at ordinary rates of pay or at overtime, is to be taken as the normal working hours. It is unnecessary to go through the method of calculation; it is sufficient to say that an ingredient in the calculation is the normal working hours.
Pursuant to section 4 of the Act of 1963, when each of these respondents was employed they were given a statement, and that statement provided that:
" During your employment your rates of remuneration, pay day, hours of work, holidays and holiday pay will be those appropriate to the work and the site, job, depot, or shop where you are for the time being employed," and these are the important words " in accordance with the provisions of the follow-ing documents ...(b) The working rule agreement of either (i) the Civil Engineering Construction Conciliation Board for Great Britain or (ii) the appropriate Regional (or district) Joint Committee for the Building Industry, as approved by the National Joint Council for the Building Industry."
Both those agreements provided for a basic 40 hour week. The working rule agreement of the Civil Engineering Construction Conciliation Board of Great Britain at page 27 of the document provides that: " The working hours in the industry, shall generally be ... " And for a summer period, and for a winter period, the total working hours is laid down as 40 hours per week. Again, under the National Joint Council for the Building Industry it is provided by way of amendment that: "With effect from the 7th March, 1966, the normal weekly working hours in the building industry will be reduced from 41 to 40."
It is, of course, quite clear that the statement made pursuant to section 4 of the Act of 1963 is not the contract; it is not even conclusive evidence of the terms of a contract. But it is conceded here that at the time when these respondents were employed, one of the terms of their agreement was that the working hours should be 40 hours. The question that arises in the present case is whether, as the respondents contend, that contract by which they were compelled to work for 40 hours a week and no more was varied so as to bind them to work 51 hours per week. That variation is said to arise and was found by the Tribunal in the present case to have arisen as the result of an agreement or agreements arrived at between the employers and the shop stewards representing the unions and the men concerned.
In July, 1964, a Committee was set up which was called the Joint Shop Stewards' Negotiating Committee, whose prime and very sensible object was the settlement of disputes on the site which from time to time arose. It is unnecessary to refer to the agreements setting up that committee, save, as I have said, to indicate that it was primarily a committee for the settling of day to day disputes, and for that purpose there were to be regular fortnightly meetings to deal with what one might call generally the running of the site. When one looks at the minutes that thereafter follow, the items considered were all items concerning safety, first-aid, canteen services and matters of that sort, including facilities of all kinds on the site.
However, it happened from time to time that there was discussed at meetings of this Joint Committee the state of the work, the fact that the contractors, the present appellants, were behind with their contract for the project, and the fact that there had been considerable absenteeism on the part of the workmen. I find it unnecessary to go through those minutes in any detail, but the evidence, and I think the only evidence, to support the decision of the Tribunal that the original contract was varied is to be found in two minutes and several notices posted up for employees.
On the 16th October, 1964, it is recorded in the minutes that there was a discussion on winter working hours, and after that item it is reported that:
" Management proposed a 52 hour week during the winter months, the hours being the same as the present agreed working week. This was accepted by the stewards. A notice giving details will be posted in due course."
The only other minute I think which I need refer to in this connection is one of the 31st December, 1965, where, under " Working Hours " it was stated that
" Management reported that attendance during December had been most unsatisfactory, but it was impossible to say whether this was due to the alternate weekend working or to the approach to the Christmas season. However, management proposed to continue the alternate seven and five day week, until the end of February, 1966, when the working hours would again be reviewed."
A little further down it is said:
" If it is decided to continue these site agreed hours after February it will be necessary to ' change step ' before Easter to make this a non-working weekend."
I should have said that although the original so-called agreement was one for 52 working hours, it was arranged later that the work should be on alternate weekends, and that the average therefore should be 51 working hours.
Pursuant to those minutes of discussions from time to time notices were put up. The first one was put up on the 19th March, 1965, and is headed " Site Working Hours." It is in these terms:
" Following agreement with the stewards representing our operatives, and as approved by the resident engineer, the following working hours will be introduced on Monday, 22nd March, 1965, the overtime being calculated on the basis of a five day week in accordance with the working rule agreement."
May I say that the words: " The overtime being calculated on the basis of a five day week in accordance with the working rule agreement" is only, as it were, affirming the working rule agreement to the extent of saying that anything over
40 hours shall attract overtime. The point that really arises is whether that agreement which was expressed to be an agreement for working hours, or for site working hours, constituted a variation of the contract if any workman failed to work those working hours. The notice goes on to give examples of calculations, and then says:
" Thus, the average working week will total 51 hours, the average pay, under civil engineering rules, being 58J hours."
Then there follow these words:
" It should be noted that this arrangement is being introduced primarily to assist in reducing the very high absenteeism now occurring on each Saturday, and that it may be necessary to revert to the six day week if there is no marked improvement in attendance during the ' working ' weekend. The position will be examined with the stewards on 21st June, to decide whether to continue with the arrangement after the working weekend of 26th-27th June. It should also be noted that the stewards have given assurance that there will be no restrictions on any work which may have to be done from time to time on the ' non-working' weekend. Your full co-operation is requested in this matter, to give the new arrangements a fair trial."
In the following notice which appeared on the 21st October, 1965, there is again a reference to site working hours and the system of working hours followed during the past Summer months, and it ends with this remark:
"As these hours have been agreed in an attempt to reduce the high absenteeism last winter when working a regular six day week, the cooperation of all concerned is requested to ensure the success of the arrangements."
The Tribunal arrived at its decision that there had been a variation on the original contract of employment, as they put it, on the evidence. In the last paragraph but one of their decision they say:
" On the evidence, we find that the parties agreed to site hours which were compulsory and capable of enforcement. If this were not so, and men need only work 40 hours each week and then leave the site, what was the purpose of negotiating and agreeing an average of 51 hours?" They go on: " The decision of the Regional Joint Emergency Commission is clearly based on the fact that both management and the unions (who were the applicants' representatives) treated the agreed working hours as binding."
It is necessary to refer to that decision of the Regional Joint Emergency Commission because it is conceded before us that in reliance on that the Tribunal were acting under a misconception. Accordingly, their decision is based on the fact that on the evidence they found that the parties agreed to site hours which were compulsory and capable of enforcement.
As I have said, the only evidence of that as it seems to me is to be found in the minutes of the Joint Shop Stewards' Negotiating Committee to which I have referred, and to the notices which were put up on display on the Notice Board.
Having considered those documents, I myself find it impossible to say that they can be construed, because it is partly a question of construction, as a variation of the contract of employment so as to compel any of these men to work for 51 hours. It seems to me that the only way in which these documents can be construed is on the basis that the employers, who were behind with their programme, were suffering from absenteeism, were eager to get the men to work longer hours; equally the shop stewards, who were being very co-operative in the matter, were expressing their willingness to persuade the men to co-operate and to work longer, but it was to be on the basis of co-operation and not as a matter of contract.
One asks oneself what would be the reaction of any of these respondents if they were told when they had not worked for 51 hours in any week that they were in breach of their contract, particularly when one realises that not one of these seven respondents ever did work 51 hours a week every week. Indeed, it was given in evidence that one of the respondents had worked the full number of so-called agreed hours in only 16 weeks out of 50 weeks - omitting the 2 weeks' annual holiday, and further that: " One has worked the full number of hours in only 21 weeks out of 50, one 23 out of 51, and one 29 out of 51."
For my part I think that any one of these respondents would have been staggered if they had been told that they were in breach of contract because they had only done that amount of work. I quite appreciate that the fact that somebody works less than the required number of hours is no evidence that there was not a requirement to work the longer number of hours, but it seems here that as a matter of common-sense and reality, no attempt was being made, and I hate to think what would have happened if an attempt had been made, by the management to force on to these workmen a 51 hour week. At the most, the trade unions were co-operating and were in effect saying: we will not complain as guardians of the workmen if you seek to get them to work for 51 hours.
Finally, I am happy myself to have arrived at this conclusion, because as it seems to me it would be outrageous if employees were entitled to get a redundancy payment based on hours of work which they have never done. I accordingly would allow this Appeal.
Diplock, L.J.: I agree and have nothing to add.
Ashworth, J.: I agree.
Appeal allowed
Decision of Tribunal discharged
Declaration accordingly
Costs
