University of Stirling v University and College Union UKEATS/0001/11/BI
Appeal against a ruling that employees who were employed under fixed term contracts were covered by s188 of TULR(C)A in respect of collective redundancies. Appeal allowed.
The claimants were employed under fixed term contracts and they had entered into those contracts accepting that they were finite and would come to an end at a particular date or at the end of a specified project. They claimed that the respondent had failed to consult according to s188 of TULR(C)A when their contracts were not renewed. The ET ruled that they had been dismissed for a reason not relating to them as individuals and therefore s188 applied. The respondent appealed.
The EAT upheld the appeal. The EJ had fallen into error in several respects. First, he said that the reason for dismissal required to be one which could be described as ‘direct and personal’ for s188 not to apply: there was no warrant for the EJ to import a new definition of ‘relating to the individual’ into the statute. The statutory terminology, according to the EAT, did not lack clarity. Second, the ET erroneously concluded that, under the prior legislation, redundancy consultation was required in dismissals on the expiry of all fixed term contracts and that, accordingly, Parliament could not have intended to narrow the scope of the protection afforded. Thirdly, the provisions of s282 of TULR(C)A did not demonstrate legislative intention that all fixed term contracts in excess of 3 months were to be brought within the ambit of s188. The overall failing of the EJ was that he did not actually ask the question of whether the dismissals were for reasons not related to the individuals concerned. The EAT ruled that they were, and so s188 did not apply.
Appeal No. UKEATS/0001/11/BI
EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF
At the Tribunal
On 8 November 2011
THE HONOURABLE LADY SMITH, MR J KEENAN, MRS G SMITH
UNIVERSITY OF STIRLING (APPELLANT)
UNIVERSITY AND COLLEGE UNION (RESPONDENT)
For the Appellant MR B NAPIER (One of Her Majesty's Counsel)
Instructed by: Anderson Strathern Solicitors 1 Rutland Court Edinburgh EH3 8EY
For the Respondent MR A WHITE (One of Her Majesty's Counsel)
Instructed by: UCU Legal Services Carlow Street London NW1 7LH
MR T BROWN (Counsel)
Instructed by: UCU Legal Services Carlow Street London NW1 7LH**SUMMARY**
Collective consultation and information
TULRA ss.188 and 195. Collective consultations. Fixed term contracts. Dismissals for reason that employees under fixed term contracts had entered into those contracts accepting that they were finite and would come to an end at a particular date or at the end of a specified project. On appeal, EAT held that Employment Tribunal had been wrong to conclude that s.188 applied. On the facts, the employees had been dismissed for a reason relating to them as individuals.**THE HONOURABLE LADY SMITH** **Introduction**
- This appeal concerns collective consultation and fixed term contracts. It is an employers' appeal from a judgment of the Employment Tribunal sitting at Glasgow, Employment Judge Paul Cape, registered on 26 November 2010 holding that:
"The unanimous judgment of the Tribunal is that the individuals identified as test cases, save for Ms Fife, were dismissed as redundant within the meaning of that expression in section 195 of the Trade Union and Labour Relations (Consolidation) Act 1992."
- We will, for convenience, continue to refer to parties as Claimant and Respondent.
- The allegation being of a failure relating to a trade union, by a university employer, to comply with the collective consultation obligations in s.188 of the 1992 Act, the Claimant is the trade union of the relevant employees, rather than the individual employees themselves. At the hearing before the Tribunal (a pre-hearing review) an issue was considered in relation to four specific employees, all of whom had been employed on contracts limited by time or by reference to a specific event ("FTC's"), not open ended ones ("OEC's"). The issue was:
* Whether the discharge of a limited – term contract by effluxion of time, without that contract being renewed, gave rise to an employee being dismissed as redundant within the meaning of section 195 of the Trade Union and Labour Relations (Consolidation) Act 1992 ("the 1992 Act")? and the names and circumstances of the four individual employees were:
* Dr C Harris: employed for a research project dependent on outside funding;
* Dr A M Doyle: employed to deliver three specific undergraduate modules;
* Ms C Fife: employed to provide maternity leave cover and thereafter for three short terms limited in time; and
* Dr Kelly: employed to provide sick leave cover.
- The Claimant was represented by Mr Brown of counsel before the Employment Tribunal and by Mr White QC and Mr Brown, before us. The Respondents were represented by Mr Napier QC before the Tribunal and before us.
- The relevant background facts, as drawn from the Tribunal's findings in fact in relation to the evidence of the sole witness (Professor Simpson), from an agreed statement of facts which had been entered into by the parties and from the summary of part of Professor Simpson's evidence contained in paragraphs 32 and 33 of the Respondents' written submissions before the Tribunal (which was accepted before us as having been accurate and not challenged) are as follows.
- The Respondent habitually engaged employees, such as Dr Harris, to carry out research work on projects which were funded by third parties and dependent on that funding. These contracts of employment are for fixed terms. Researchers habitually enter into such contracts in full knowledge of the circumstances, namely that they are for a fixed term and that renewal is funding dependent. Dr Harris was engaged on such a project as from 1 September 2008. Her contract was renewed for a limited term with an expiry date of 16 August 2009. It was not renewed thereafter. She found alternative employment.
- The decision not to offer Dr Harris another contract was based on the normal considerations that the respondent applied where the FTC of a researcher came to an end. Those considerations were that the employee knew from the outset of a FTC that their term of service was finite; the employee had chosen to go into a contract that was for that finite period – typically, one which was linked to the availability of outside funding. The FTC employee was in a quite different position from an OEC employee and so regarded by the Respondent.
- Regarding Dr Doyle, Ms Fife and Dr Kelly, the Tribunal's findings are limited to the following:
"9. Dr Doyle was engaged pursuant to a fixed term contract to co-ordinate and deliver three undergraduate modules in English Studies in the Spring 2009 semester, ending on 29 May 2009. The contract was not renewed, as the semester had ended.
10. Ms Charlotte Mary Fife was engaged to provide maternity leave cover for the six months ending on 2 May 2009. That employment was extended for a further limited term until 4 September 2009 and, again, until 9 October 2009. Thereafter, Ms Fife was employed on what was described as a 'casual basis' for the period 10 October 2009 until 10 September 2010.
11. Ms Kelly was initially engaged for one month in July 2007 and then from 1 October 2007 until 31 March 2008. Thereafter, the employment was extended until 30 September 2009. The final extension was partly because Ms Kelly was a named researcher on a number of projects and partly because a colleague was to be working reduced hours following a return from maternity leave."
- The Tribunal found that Ms Fife was not dismissed at all (paragraph 61) but parties had, we were informed, agreed that she was dismissed.
- In all four cases, at least one of the reasons for dismissal related to the fact that the employee had agreed to accept that the contract under which they were employed would come to an end at a particular time or on the occurrence of a particular event. That factual summary was included in Mr Napier's skeleton argument and Mr White confirmed, in the course of the appeal hearing, that the Claimant accepted that it was correct.
Collective Consultation: Domestic Legislation
- Under and in terms of s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 **('TULRA'), which is within Chapter II of Part IV of the Act, where an employer:
"188(1)…………is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals."
- As originally enacted, s.188 included a duty to consult any relevant trade union whenever an employer was proposing to make any employee redundant, whatever the number of employees involved, but it was amended to the above terms, in 1995.
- Trade union representatives are "appropriate representatives" (s.188(1B)).
- In no circumstances can the collective consultation requirements of s.188 apply to FTC's for three months or less – s.282 of TULRA provides:
"282(1) The provisions of Chapter II of Part IV (procedure for handling redundancies) do not apply to employment –
(a) under a contract for a fixed term of three months or less, or
(b) under a contract made in contemplation of the performance of a specific task which is not expected to last for more than three months,
where the employee has not been continuously employed for a period of more than three months."
- The derivation of s.282 TULRA was s.119(7) of the Employment Protection Act 1975 which was to the same effect as s.282 save that the exclusion was in respect of FTC's for twelve weeks or less, as opposed to three months.
- Where s.188 applies, the employer must make disclosure to the relevant representatives under a series of separate heads (s.188(4)) which are, broadly speaking, directed towards the stated objectives (s.188(2)) of consulting about avoiding the dismissals, reducing the number of employees to be dismissed and mitigating the consequences of dismissals.
- Also, where s.188 applies, the employer must notify the relevant Secretary of State of his proposal, in writing, before giving notice of termination to the employees concerned and at least 30 days before the first dismissal if the number of employees involved in the consultation is more than 20 but less than 100 (s.193). If he fails to do so, he commits an offence (s.194) and is liable to be prosecuted and fined (at a level up to level 5 on the standard scale – currently £5,000).
- In summary, therefore, the purpose of collective consultation appears to be to see whether the redundancies can be avoided altogether, whether they can be reduced in number, whether there is anything that can be done to mitigate the effect of them on the individual employees and to give notification to the government of circumstances in which a significant number of persons are liable to become unemployed – thus, potentially, a burden on the state - and liable to become entitled to redundancy payments (the burden of which, in the case of insolvency, could also fall on the state).
- If an employer fails to comply with s.188, in addition to the possibility of him being prosecuted and fined, it is open to the employees affected/their representatives to present a complaint to an Employment Tribunal (s.189(1)) and, in addition to the tribunal making a declaration of non compliance, it may make a protective award. A protective award is, essentially, a punitive award (Association of Patternmakers and Allied Craftsmen v Kirvin Ltd  IRLR 318; GMB v Susie Radin Ltd and may be made in favour of each affected employee in a sum not exceeding 90 days pay. In short, non-compliance could prove to be expensive. "Dismiss as redundant" under TULRA is not restricted to circumstances where a business (or part of it) is closing or jobs are being cut due to reduced business need (cf. Employment Rights Act 1996 s.139(1)1). It is significantly wider than that. Section 195 of TULRA provides:
"…references to dismissal as redundant are references to dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related."
- Thus if, for example, an employer wished to introduce material changes to the terms and conditions of more than 20 employees involving termination of their existing contracts of employment and the issuing of fresh contracts incorporating those changes, those circumstances would plainly not satisfy the requirements of s.139 of the 1996 Act. However, assuming that the business need to effect those changes was the reason for the dismissals proposed, it would appear that the s.188 duties of collective consultation would be triggered even although the employer was not proposing to shed any jobs (see e.g.: GMB v Man Truck & Bus UK Ltd  ICR 1101). That is because in such circumstances, the reason for the dismissals would plainly not relate to the individuals; it would only relate to the requirements of the business.
- The question of whether, where dismissal is because of the expiry of a FTC, it is for a reason or reasons "not related to the individual concerned" has not been the subject of discussion in any prior authority. It is the central issue in this case.
- The current wording of s.195 was substituted by section 34(5) of the Trade Union Reform and Employment Rights Act 1993 following the ECJ decision in Commission of the European Communities v United Kingdom (Case C – 382/92)  ICR 664) in which it was conceded by the UK government that its former wording (which reflected only the definition of redundancy in s.139 of the 1996 Act) failed to comply with the requirements of the relevant Directive (75/129/EEC on the approximation of laws of the Member States relating to collective redundancies). The Directive defines 'collective redundancies' differently from the 1996 Act. Insofar as relevant, the definition is:
For the purposes of this Directive:
'collective redundancies' means dismissals effected by an employer for one or more reasons not related to the individual workers concerned…"
- The Directive makes provision for collective consultation. It requires to take place where, in any establishment, there are to be at least 20 dismissals over 90 days (Article 1(1)(ii)).
- All dismissals at the end of a FTC are, however, excluded from the ambit of the Directive. Part 2 of Article 1 provides:
"2. This Directive shall not apply to:
collective redundancies effected under contracts of employment concluded for limited periods of time or for specific tasks except where such redundancies take place prior to the date of expiry or the completion of such contracts;"
- Thus, even if 20 FTC's were due to expire at the same time, the Directive does not require there to be collective consultation. In the Commission of the European Communities v United Kingdom **case, Advocate General Van Gerven explains, at paragraph 10 of his opinion:
"The essential objective of Directive (75/129/E.E.C) is to guarantee to workers within the Community, by way of Community rules establishing ordered procedures for consultation and redundancies, which can undoubtedly be regarded as a crisis situation so far as the workers are concerned."
- It would seem to follow from the Directive's exclusion of FTC's that it was not considered that dismissals at the end of such contracts could represent a crisis situation. Further, that would be so no matter how many terminating FTC's there were or if the addition of their number to dismissals which fell within the ambit of Article 1(1) showed that more than 20 employees were liable to lose their jobs.
- We were referred to a number of authorities in the course of the appeal hearing, none of which are directly in point but which were relied on by counsel in the course of their respective arguments. They were as follows.
- The case of Association of University Teachers v University of Newcastle-Upon-Tyne  ICR 317, a decision which pre-dates the introduction of the s.195 definition of redundancy, concerned the termination of the FTC of a lecturer. This tribunal held that the Employment Tribunal had been wrong to find that there was no redundancy under the old statutory definition and that the employer university had, accordingly, failed in its duties of collective consultation. The members of the tribunal do not, however, appear to have been comfortable with the conclusion which they considered the then current legislation required them to reach. At p. 327, Wood J said:
"A number of general matters in this case have caused this appeal tribunal some anxiety and hesitation in reaching its conclusion and has caused it to wonder whether these provisions were ever intended to apply to situations like the present. We would emphasise that in the present case the employee had a three year fixed term contract which he could foresee was unlikely to be renewed. He agreed under the provisions of section 142 of the Act of 1978 not to seek an award under the unfair dismissal or redundancy provisions at the end of that term. This does not in our minds create the usual picture of a redundancy or impending redundancy."
- The case of Terry v East Sussex County Council  ICR 56, a decision which also predated s.195 of TULRA, and also concerned a lecturer's FTC. The issue for this tribunal, which was chaired by Phillips J, was whether or not his dismissal was unfair, when his FTC expired and was not renewed. In commenting on the employee's contention that the expiry of a FTC without renewal could never constitute 'some other substantial reason', Phillips J observed (at p.538):
"If correct, this contention would have far-reaching consequences. There are many undertakings in which it is usual and necessary for persons to be engaged for short periods upon fixed-term contracts: for example, in schools and universities teachers and lecturers are often engaged for a term or other short period, and in the construction industry it is not uncommon for qualified men to be retained for particular periods or for particular jobs. The contention involves the conclusion that in such cases, usually at all events, failure to renew the contract upon its expiry would render the employer liable to pay compensation for unfair dismissal, unless there were some other reasons to justify the dismissal, or unless it could be shown that the employee was redundant, which would not always be possible."
- Thus, in the view of Phillips J, whilst the termination of a FTC might amount to redundancy (in what is now the 1996 Act sense), that will not always be the case; it might not be possible to show that it was. At the end of the judgment, he commented on the need for tribunals to 'hold a balance' (p.542D) and added:
"On the one hand, employers who have a genuine need for a fixed-term employment, which can be seen from the outset not to be ongoing, need to be protected. On the other hand, employees have to be protected against being deprived through ordinary contracts being dressed up in the form of temporary fixed-term contracts."
- The case of Pfaffinger v City of Liverpool Community College; Muller v Amersham & Wycombe College  ICR 142, another pre s.195 decision concerning lecturers employed under FTC's. The issue was whether on the expiry of their FTC's, they were dismissed for redundancy (in the 1996 Act sense). In the judgment of this tribunal, Mummery J recognised that it did not necessarily follow that the termination of employment at the end of a FTC amounted to redundancy and stressed the importance of asking what was the reason for the dismissal. At p.151, he said:
"It was held by the Court of Appeal in Nottinghamshire County Council v Lee ICR 635 that, in interpreting equivalent provisions in earlier legislation...it was necessary to ask, in the case of a fixed term contract which expired and had not been renewed: 'Why was not the employee's contract renewed?'"
- The case of National Association of Teachers in Further and Higher Education v Manchester City Council  ICR 1190 ('Natfhe'), again a pre s.195 decision of this tribunal. It was heavily relied on by Mr White as being supportive of his argument. The issue was whether an education authority were obliged to consult with a trade union2, where the FTC's of part time teachers expired and were not renewed; in particular, had the employer been proposing to dismiss those teachers as redundant? The basis on which they were employed was that they were engaged on FTC's for single academic sessions (September to July) which might or might not be renewed on expiry. The then current legislation (Employment Protection Act 1975) required an employer proposing to dismiss an employee as redundant to consult the relevant trade union representatives (s.99(1)) but, under s.119(7) of that Act, certain types of employees were excluded from that protection. At p.1194, Phillips J said:
"The purpose of s.119(7) is to exclude the operation of sections 22, 29, 99 and 100 from employment under a contract for a fixed term of 12 weeks or less, etc., unless the employee has in fact been continuously employed for a period of more than 12 weeks. In other words, it is intended to draw a line and to exclude cases of actual short term employment. But the very fact that it has been found necessary to do this indicates clearly that employment under a contract for a fixed term of more than 12 weeks does fall within the provisions of section 99 et seq…"
and then, at p. 1195, he summarised matters in this way:
"As we have said, it seems to us that where employees engaged on a fixed term contract, whether part-time or full time, are dismissed because their contracts of employment are not renewed, it may well be the case that they have been dismissed "as redundant" within section 99. Whether it is or not will depend on all the circumstances."
- Accordingly, whether considering the position under the 1975 Act or under the provisions of s.195 of TULRA as originally enacted, it cannot be concluded that all dismissals at the expiry of FTC's other than those for not more than 12 weeks/3 months were subject to the statutory requirement to consult. Whether or not they were depended on examining what, on the facts, was the reason for dismissal and determining whether or not the reason was redundancy.
- The other European decision that was referred to was Commission of the European Communities v Portugal Case C-55/02 which did not concern FTC's. Rather, the issue was whether the definition of redundancy in the relevant Portuguese legislation was too narrow in respect that it restricted the concept of collective redundancy to circumstances where dismissals arose for structural, technological or cyclical reasons and did not, for instance, cover dismissals by reason of insolvency. The Court did not accept Portugal's argument that the Directive did not apply to redundancies which were not attributable to a voluntary act on the part of the employer and, in their judgment, appear to have been at pains to make that clear. Having, at paragraph 43, noted the definition of collective redundancies in Article 1(1)(a), the Court observed, at paragraphs 49 and 50:
"Accordingly the concept of 'redundancy', as mentioned in Article 1(1)(a) of the Directive, may not be defined by any reference to the laws of the Member States, but has instead a meaning in Community law.
The concept has to be interpreted as including any termination of contract of employment not sought by the worker, and therefore without his consent. It is not necessary that the underlying reasons should reflect the will of the employer."3
- The case of [Lancaster University v The University and College Union ]()UKEAT/0278/10/JOJ, an EAT decision of 2010, approving the level of the appropriate protective award determined by the Employment Tribunal where staff employed on FTC's were dismissed. However, it was conceded – in circumstances where the employer had established a practice of giving four months notice to the relevant trade union of FTC's which were due to expire – that the collective consultation provisions of s.188 TULRA applied.
- Finally, the case of Abernethy v Mott, Hay & Anderson  IRLR 213I **was referred to for the well known passage at paragraph 13 in which Cairns LJ stresses that the reason for the dismissal of an employee is a question of fact and it has to be borne in mind that employers may not themselves put the correct legal label on those facts; what the facts amount to is a question of law:
"…A reason for the dismissal of an employee is a set of facts known to the employer, or it may be of beliefs held by him which cause him to dismiss the employee. If at the time of his dismissal the employer gives a reason for it, that is no doubt evidence, at any rate as against him as to the real reason, but it does not necessarily constitute the real reason…he may describe his reasons wrongly through some mistake of language or of law. In particular in these days when the word 'redundancy' has a specific statutory meaning, it is very easy for an employer to think that the facts which have led him to dismiss constitute a redundancy situation whereas in law they do not; and in my opinion the Industrial Tribunal was entitled to take the view that that was what happened here: the employers honestly thought that the facts constituted redundancy, but in law they did not."**The Tribunal's reasoning**
- The Tribunal found that the collective consultation obligations applied to three of the four 'test case' FTC dismissals, as explained above. The reasoning of the Employment Judge can be summarised as follows.
- From the outset of their respective legislative histories, domestic law and EU law regarding duties of collective consultation did not "march in step" (paragraph 34). The domestic legislation originally defined the range of circumstances giving rise to the duty to consult more narrowly than did the EU (paragraph 35). The 1975 Act went, however, further than the EU law required regarding the range of employees in respect of whom the duty to consult arose (paragraph 36). The domestic legislation had originally, under the 1975 Act, required consultation even where there was only one dismissal (paragraph 37). A reason for dismissal is a set of facts known to or beliefs held by an employer which causes him to dismiss and one reason may comprise several facts (paragraph 48). There is a presumption of redundancy and to rebut it, the Respondent required to show a reason that was personal to the dismissed employee, not merely a fact that was personal to him (paragraph 48). The expression 'for a reason not related to the individual concerned' was not clear and unambiguous. That was because it was inevitable that the reason for any dismissal will, in some way, relate to the individual concerned; in the case of redundancy the reason for dismissal might be the particular job done by the employee or some attribute of his such as length of service, disciplinary or sickness record and those were reasons relating to the individual (paragraph 49). If the expression was given too broad a meaning, that would undermine the scope of the protection afforded by the Directive (paragraph 50). A 'reason relating to the individual concerned' was where the reason was a close and direct one involving a reason that was personal to the individual, such as conduct or capability (paragraph 51).
- The Employment Judge also had regard to the law prior to the UK's amendment, in 1993, of the definition of redundancy given in s.195 of TULRA. At paragraph 54, he said:
"54. On the law prior to that amendment, Natfhe is clear authority for the proposition that the duty to consult bites upon the dismissal of employees engaged on limited – term contracts. A question for the Tribunal is whether Parliament intended whilst broadening the range of dismissals that would fall within the collective consultation provisions, also to remove the protection of the collective consultation provisions from limited-term contract holders or, at least, from holders of limited- term contracts of the kind seen in the test cases identified to the Tribunal."
- He observed, at paragraph 55, that it was open to the United Kingdom to exclude FTC's from the collective consultation regime (save in the case of early termination) but, under reference to the exclusion of FTC's for three months/twelve weeks or less, he added:
"In enacting the provisions of the 1975 Act, the United Kingdom extended the protection of collective consultation to those employed on fixed term contracts of a term of more than three months and to those employed on fixed term contracts for more than three months. Applying the canon of construction embraced in the expression "expressio unius est exclusio alterius" the stipulation of those limited – term contract holders who would be excluded from the right to collective consultation implies that other employees holding limited – term contracts were intended to be within the scope of the collective consultation provisions."
- He then reasoned that Parliament cannot have intended, when it amended s.195 of TULRA so as to broaden the category of dismissals to which collective consultation obligations would apply also to narrow the range of employees entitled to protection (paragraph 56). The fact that the consultation obligations under the prior law in the 1975 Act applied to even a single dismissal and that that was a situation which continued for more than 2 years after the coming into force of TULRA undermined, he said, the suggestion that Parliament cannot have intended that there be consultation in respect of dismissals arising from the termination of FTC's (paragraph 58), provided the required number of dismissals were proposed.
- Finally, the Employment Judge rejected any suggestion that when an employee is engaged under a FTC, he thereby consents to being dismissed at its expiry (paragraph 59) because the effect of the provisions of the 1975 Act and TULRA was to place FTC holders and employees on contracts of indefinite term, on the same footing. He added:
"Although an employee who enters into a limited-term contract does so on the basis that the employment may come to an end on the expiry of the fixed – term or the performance of the specific task, an employee who enters into a contract for an indefinite term determinable on notice does so on the basis that the employer has the right to discharge the contract by giving due notice. Whether engaged on a limited-term contract or an indefinite- term contract determinable on notice, the employee puts in the employer's hand the sword of termination and, in that sense, consents to termination."
- Accordingly, the Employment Judge construed the statutory provisions as meaning that dismissal at the expiry of a FTC always triggered the duty to consult (subject to numbers and timescales).
- In paragraph 60, the Employment Judge refers to the fact of FTC's having for a long time been used in research posts and to the general fact that "members of the research community enter into such arrangements in the full knowledge of the way the system works" but said that those features did not provide any reason to exclude them from the duty to consult. He added:
"Those factors could properly be taken into account in assessing ex post facto, whether the duty to consult had been discharged."
but offered no explanation of what he had in mind in that regard.**The appeal**
Submissions for the Respondent
- Mr Napier submitted that the Tribunal had misunderstood and misapplied the relevant statutory provisions. In so doing, the Employment Judge had failed to ask himself the question posed by s.195, namely whether or not, as a matter of fact, the dismissals in the test cases were for reasons relating to the individuals concerned.
- He pointed out that the appeal concerned not only researchers on FTC's but also FTC's where the employee was providing maternity or sick leave cover. The implications of the decision in the case were, accordingly, potentially very wide reaching. On the Tribunal's approach, the collective consultation obligations would be triggered in the case of, say, the employer in a large organisation who has no traditional redundancies in mind but might well have 20 or more maternity and/or sick leave cover FTC's expiring within a 90 day period; such an employer is unlikely, in such circumstances, to be alerted to the need to consult if he is to avoid being penalised. Similarly, such an employer could be caught out if the termination of a small number of maternity/sick leave FTC's in a 90 day period will, when added to a number of traditional redundancies, take the total proposed dismissals to over 20. That would, he submitted be incongruous, particularly since there was no apparent point in consulting for any of the statutory purposes in such circumstances. He referred to the above passage from AUT v University of Newcastle–upon–Tyne  ICR 317 as acknowledging that it was unrealistic to apply the duty to consult to the case of researchers employed on FTC's and submitted that the case for unreality was even greater when it came to FTC's for maternity and sick leave cover.
- Mr Napier submitted that the issue for the Tribunal was the correct application of sections s.188 and 195 of TULRA. Since, on the facts, at least one of the reasons for dismissal of each of the four employees was that they had accepted that the contract under which they were employed would come to an end at a specified time or on the occurrence of a particular event, the duty to consult could not apply; at least one of the reasons for dismissal related to them as individuals. It was sufficient, for the Respondent's purposes, that that be one of the reasons. section 195 did not require that it be the sole reason; if any one of a number of reasons related to the individual concerned, that took the dismissal outwith the ambit of s.188.
- Mr Napier submitted that whilst the Employment Judge had correctly asked what was the reason for the dismissal, he had then, erroneously, put a gloss on the words of the statute by requiring that for s.195 purposes, the reason required to be personal to the individual and that, further, he had wrongly had in mind reasons relating to selection for redundancy which is not the same as the reason for the dismissal itself. He had wrongly considered that in a 'standard' redundancy, the reason for the dismissal relates to the worker himself; it does not. The reason for dismissal is the diminution in business etc.
- In any event, he added, even if the Tribunal was correct and it was necessary to show a close and personal connection between the individual concerned and the reason for dismissal, that had been done. The fact that an employee has given his consent to the contract of employment ending at the appointed time/event was sufficient.
- Further, the Tribunal erred in taking Natfhe as being "clear authority" for the proposition that the duty to consult applied, under the 'old' law, wherever employees were dismissed at the end of FTC's. The case was authority for nothing more than the proposition that such dismissal may have been dismissal for redundancy; whether or not that was the case depended on the particular facts and circumstances (cf. Terry v East Sussex County Council; North Yorkshire CC v Fay; Pfaffinger v City of Liverpool Community College). The Employment Judge's misunderstanding of Natfhe **was central to his reasoning and undermined it. He had failed to recognise that terminations of FTC's could arise in a variety of circumstances, not all of which would have fallen within the traditional definition of redundancy. The Employment Judge had also erred in reasoning that the Respondent's approach removed the possibility of the duty to consult ever arising where the dismissed employee was working under a FTC. It would, for instance, apply where dismissal by reason of the cessation of the employer's requirement to have the particular work carried out arose prior to the date for expiry of the FTC. Such a situation could occur if a particular department of a university in which a researcher on a FTC worked, were to close down.
- Mr Napier turned to s.282 of TULRA and submitted that the Employment Judge had misunderstood its effect. It did not follow that where a FTC was for more than three months the duty to consult arose in every case. It all depended on the reason(s) for the dismissal; if any of them related to the individual concerned, the end of the FTC would not fall within the ambit of s.188, but if none of them did, then it would. There was no scope for the operation of the maxim relied on.
- Mr Napier submitted that, having fallen into the above errors, the Tribunal wholly failed to consider the facts of these cases and ask whether or not the conditions set by s.195 were met. The Employment Judge was wrong to have been influenced by the prior statutory scheme which covered proposals to dismiss a single employee as redundant and wrong to have failed to appreciate that the termination of a FTC was not a crisis situation (see: EC Commission v UK per Adv Gen Van Gerven at paragraph 10). Separately, in saying that there was, given the usual notice provisions, as much consent by the employee to termination in the case of a contract for an indefinite term as there was in the case of a FTC, he had missed the point. It was not a matter of asking whether, objectively, it could be concluded that there was such consent; one required to ask what were in fact the reasons for dismissal. That the Employment Judge had failed to do and yet the facts showed that at least one of the reasons, being that these were employees who had agreed to enter into contracts which were, of their nature, for a finite period, related to them as individuals. As for his comments at the end of paragraph 60, there was no authority for any proposition that the unusual feature of applying the duty to consult in the case of expiry of FTC's could be reflected in any reduction of the relevant protective awards.
- Turning to EU law, it was plain that the domestic law went further than was required by the Directive; it could, without non-compliance, have provided that s.188 did not apply to any FTC's at all. TULRA did not, however, do that. There was no need, in these circumstances, for any purposive construction under reference to the Directive.
- In all these circumstances, the decision of the Tribunal could not stand, the appeal should be allowed and a judgment that s.188 did not apply to the test cases be substituted. If it was considered that there were not sufficient findings in relation to the cases of Doyle, Fife, and Kelly (in respect of whom evidence had not been led), the case should be remitted but only in respect of them.
- For the claimant, Mr White accepted that the domestic legislation was more favourable to FTC holders than the Directive required (as was permitted by Article 5) and that that was not to say that some FTC holders were not protected by s.188. He accepted, for instance, that dismissal at termination of a FTC could be for a reason relating to an individual if the employee's performance during the period of the contract was unsatisfactory so that the employer decided not to renew it. What could not, however, be a reason relating to the individual was that he had signed a FTC.
- He submitted that the reason(s) for the dismissals in the test cases did not, however, relate to the individuals concerned and they were, accordingly, protected. As a generality, by parity of reasoning with that which was applied by the European Court of Justice at paragraph 55 in the case of Commission of the European Communities v Portugal, *FTC's would have been covered by the Directive, had it not been for Article 1(2)(a). The exclusion in the domestic legislation, under s.282, required to be viewed in that context. By means of ordinary techniques of statutory construction, particularly the expressio unius* rule, it was evident that there was a presumption that FTC's for more than three months were covered by s.188.
- Mr White sought to support the Tribunal's construction of Natfhe. He submitted that it showed that such contracts were covered 'as a class'. The defining characteristic of the class was that the employee had signed a FTC. That being so, the employer could not rely on the fact that the employee had done so as excluding him from the class. The Barras **principle4 applied viz. where an Act used a form of words upon which the court had previously pronounced, it may be presumed that Parliament intended the words to have that previously opined upon meaning in the enactment under scrutiny.
- Mr White submitted that it was important to have in mind the relevant 'mischief' which was circumstances where a large number of people were losing their jobs. It did not matter if they or some of them were doing so in circumstances where they had been covering maternity leave or sickness absence.
- He submitted that the earlier cases, prior to the current version of s.195 of TULRA were of no assistance.
- Regarding the particular criticisms of the reasoning of the Employment Judge, Mr White submitted that his 'gloss' of 'direct and personal' was not objectionable although he accepted, to an extent, the criticisms of his consideration of potential reasons for selection for redundancy.
- Otherwise, however, the reasoning of the Employment Judge was, he submitted, sound, subject to two matters. First, it was not correct to find that it was enough if one of a number of reasons related to the individual. He relied on a passage in Harvey on Industrial Relations and Employment Law at E-2527 where the editors expressed the view that the Directive provided for a focus on the predominant reason for dismissal. It was necessary that the main reason for dismissal related to the individual. Secondly, the Tribunal had thus wrongly accepted the Respondent's submission that for a dismissal to fall within s.188, it was necessary that none of the reasons for it related to the individual.
- Finally, Mr White submitted, in support of a cross appeal, that the Tribunal was wrong to have excluded Ms Fife's case. Parties had agreed that she had been dismissed and the Employment Judge's reasoning plainly applied to her as well.
- We are satisfied that the appeal should be upheld. The Respondent's submissions are well founded.
- We do not accept the Employment Judge's reasoning. He has, we consider, fallen into error in several respects. First, underlying his approach appeared to be his view that all reasons for dismissal related in some way to the individual concerned so he required to look for something more; that was that the reason required to be one that could be described as 'direct and personal' such as his conduct or capability. The flaw in that approach is demonstrated by his referring to the 'reason' for a redundancy dismissal being, for instance, length of service or disciplinary/sickness record (paragraph 49). Those are, however, reasons for selection from a pool of employees where the reason for dismissal is and remains, redundancy. Further, there is no warrant for his importing a new definition of 'relating to the individual' into the statute, yet that is what, by applying a test of 'direct and personal', he does. The statutory terminology does not, as we discuss above, lack clarity.
- Secondly, the Employment Judge erroneously concluded that, under the prior legislation, redundancy consultation was required in dismissals on the expiry of all FTC's and that, accordingly, Parliament cannot have intended to narrow the scope of the protection afforded. We would refer to our earlier discussion in that regard.
- Thirdly, the Employment Judge approached matters on the basis that s.282 TULRA favoured his interpretation but as we have explained, we do not consider that those provisions demonstrate legislative intention that all FTC's in excess of three months were to be brought within the ambit of s.188.
- Finally, whilst it is not clear whether the Tribunal's observations at paragraph 60 were influential in the Employment Judge's ultimate conclusion, they ought not to have been, in our view. They are, perhaps, demonstrative of an overall failing which is that the Employment Judge does not actually ask the question of whether, on the facts of the cases before him, the dismissals were for reasons not related to the individuals concerned. He required to do so and it was only if he could, on the facts, answer that question in the affirmative that he was entitled to conclude that s.188 applied. He appears to have approached matters on the basis that dismissal for the reason that the individual employee had knowingly agreed to a contract of employment for a finite term could never be a reason relating to the individual concerned. He was not, however, for the reasons that we explain, entitled to do so.
- The issue turns on construction of domestic legislation which not only, now, implements the relevant Directive, but goes further than it requires. Similarly, the interpretation of ss.188, 195 and 282 urged on us by Mr Napier goes further than the Directive requires and is thus compatible with it; there is no community right afforded by the Directive which would be infringed by that interpretation. The Marleasing 5 approach to interpretation is thus not required (see: R (Hurst) v London Northern District Coroner, as was agreed by counsel.
- That is not to say that the means by which the Directive excluded all FTC's is of no assistance to us in carrying out the interpretive task. The provisions of Articles 1 and 2 to which we refer above set the scene and the scene, from the European perspective, was that if a FTC in fact came to an end at the expiry date provided for in the contract, the collective consultation provisions could never apply. It did not matter if the reason for not renewing the FTC did not relate to the individual concerned - if, for instance, the reason was that that part of the business for which the FTC work had been carried out was closing down (i.e. a reason not related to the individual concerned). FTC's were an excepted category, in all circumstances.
- It can, perhaps, reasonably be inferred that the domestic legislature, noting the need, under the Directive, for collective consultation when business decisions are made which have potential to restrict the employer's business or other activities and so cause significant job losses, determined on a statutory scheme which would require such consultation in the case of FTC's if a decision of that sort – which does not involve any focus on the individual FTC employee - was the reason for their non renewal. It is not difficult to see that there could, in such circumstances, be benefit in collective consultation for the statutory purposes of avoiding dismissals, reducing the number of employees to be dismissed and mitigating the consequences of dismissals – where offering renewals of FTC's might, for instance, be a means of preventing proposed closures or business restrictions. Such considerations do not, however, obviously arise where the reason is not the making of a business decision with such potentially wide reaching implications, but the termination, in normal course, at a previously agreed and planned date (or event) of a FTC.
- Mr White sought to persuade us to infer that Parliament must have intended to bring all FTC's within the ambit of s.188. That was because, in his submission, under the prior redundancy consultation provisions, consultation was always required where dismissal occurred at the expiry of a FTC and it could be inferred that they would not have legislated to narrow the previous protection. He relied on Natfhe in support of that proposition. That is not, however, what Natfhe or any of the other authorities to which we refer above, say. The position was, on the contrary, clearly that to determine whether or not there had been a dismissal for redundancy, the Tribunal required to consider what, on the facts of the individual case, was the reason for the dismissal. Further, unease was expressed at the proposition that termination, as planned from the outset, at the end of a FTC could amount to redundancy (Association of University Teachers v University of Newcastle**).
- To what extent does the domestic legislation create an inroad into the excepted category? Mr White's position was that it was so as to include all FTC's other than those for three months or less. Section 282 demonstrated that, according to his submission. We were not persuaded by his approach. It seems plain to us that the import of s.282 is that the provisions of s.188 may apply to FTC's which are for more than three months but, equally, they may not. Section 195 provides the answer and it is that Employment Tribunals require to ask whether, on the facts and circumstances of the individual case(s) before them, dismissal was for a reason relating to the individual concerned. It is, as Mr Napier submitted under reference, relevantly, to the case of Abernethy, a matter of them looking at and assessing the facts of the case, against that statutory test.
- We consider that the words 'for a reason not related to the individual concerned' are, in the circumstances, clear and unambiguous. A reason relates to the individual if it is something to do with him such as something he is or something he has done. It is to be distinguished from a reason relating to the employer, such as his (or in the case of insolvency, his creditors') need to effect business change in some respect.
- In this case, on the facts, at least one of the reasons for all four dismissals was that the employee had agreed to a FTC accepting that it would come to an end at a particular date or on the occurrence of a particular event. Those were normally the Respondent's reasons when a FTC came to an end and none of the facts showed that any other reasons applied in any of these four cases. Did those facts amount to reasons relating to the individuals concerned? We are satisfied that they did. The Respondent's reason was one which relied on the individual employees' own approach to their employment with the Respondent. They had agreed at the outset that their employment would be for finite periods defined by dates or tasks. The circumstances are thus not of termination being imposed on them against their wishes; they are not, we consider, within the category that the ECJ had in mind in their comments at paragraph 50 of their judgment in Commission of the European Communities v Portugal. They accepted at the outset that their FTC's would terminate at the defined point. The only means by which they could, thereafter, continue in the Respondent's employment would be if they were offered and accepted another FTC, circumstances referred to as 'renewal' but, properly analysed, involving two consecutive FTC's. Unlike employees employed under OEC's, they did not have any reasonable expectation of employment for an indefinite period.
- It follows that since we accept that the reasons for the four dismissals in the test cases related to the individuals concerned, they were excluded, by s.195 of TULRA, from the ambit of s.188.
- On the facts of the present case, the Respondent did not have a multiplicity of reasons for dismissal. For completeness, we would, however, add that we also accept Mr Napier's submission that, given the wording of s.195, for a dismissal to come within the ambit of s.188, it must be that none of an employer's reasons for dismissal may be related to the individual concerned. We do not share the doubts expressed by the editors of Harvey in that regard.
- We will pronounce an order upholding the appeal and the cross appeal to the extent that it relates to Ms Fife, parties being agreed that, contrary to the Tribunal's finding, she was also dismissed. Although the oral evidence that was given was principally in relation to Dr Harris, we accept that there is a sufficient factual basis, as explained above, for us to determine that, in all four test cases, the employees were dismissed for a reason relating to them as individuals and that, accordingly, they were not dismissed as redundant within the meaning of section 195 of TULRA.
"139.(1) 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 wholly or mainly attributable to –
(a) the fact that his employer has ceased or intends to cease-
(i) to carry on the business for the purposes of which the employee was employed by him , or
(ii) to carry on that business in the place where the employee was so employed, or
(b) the fact that the requirements of that business –
(i) for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,
have ceased or diminished or are expected to cease or diminish."
2 The relevant statutory provision was section 99(1) of the Employment Protection Act 1975, which provided: "An employer proposing to dismiss as redundant an employee of a description in respect of which an independent trade union is recognised by him shall consult representatives of that trade union about the dismissal…". The duty to consult arose whenever any employee who was a member of a recognised trade union, even if there was only going to be a single redundancy.
3 At paragraph 55, the Court explained that they found support for their conclusion from the facts that, in its original version, the Directive had provided (in Article 1(2)(d)) that the collective consultation requirements did not apply if the establishment's activities had been brought to an end by a judicial decision; without that express provision, the consultation requirements would have applied to such circumstances, even although they were an example of a case where the terminations would have been due to something other than the willed act of the employer.
4 Barras v Aberdeen Sea Trawling and Fishing Co Ltd  AC 402 at 411; Bennion- Statutory Interpretation Section 210.
5 Marleasing SA v La Commercial Internacional de Alimentation SA (Case C- 106/89): a strong interpretive obligation is imposed on member states to construe domestic legislation whenever possible so as to produce compatibility with European Community law.
Published: 17/02/2012 12:46