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Session 1998-99
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Judgments -- Murray and Another (A.P.) v. Foyle Meats Limited (Northern Ireland)


  Lord Chancellor   Lord Jauncey of Tullichettle   Lord Slynn of Hadley
Lord Hoffmann   Lord Clyde






ON 8 JULY 1999


My Lords,

      Foyle Meats Limited ("the company") carry on business as slaughterers in Londonderry. They employed Mr. Murray and Mr. Doherty as "meat plant operatives." Both normally worked in the company's slaughter hall, but they could under their contracts of employment be required to work elsewhere and occasionally did so. Employees who worked in other parts of the factory, such as the boning hall or the loading bay, were engaged on similar terms.

      In 1995 there was a decline in business and the company decided to reduce the number of "killing lines" in the slaughter hall from two to one. This meant that fewer employees were required in the hall. The company informed the union representing the workers that it proposed to make about 35 employees redundant. In consultation with the union, it formulated criteria for deciding which of the employees in the slaughter hall should be dismissed. Mr. Murray and Mr. Doherty were selected for redundancy and dismissed on 27 March 1995.

      Both made a complaint of unfair dismissal to an Industrial Tribunal. By Article 22(1) of the Industrial Relations (Northern Ireland) Order 1976 (S.I. 1976 No. 1043) it is for the employer to show what was the reason for the dismissal and that it was a reason falling within Article 22(2). The company justified the dismissals on the grounds that they were for the reason contained in Article 22(2)(c), namely "that the employee was redundant." Article 2(7) of the Order incorporates the definition of redundancy in section 11(2) of the Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965:

     "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 -

     (a) the fact that his employer has ceased, or intends to cease, to carry on the business for the purposes of which the employee was employed by him, or has ceased, or intends to cease, to carry on that business in the place where the employee was so employed; or

     (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."

The company relied on paragraph (b). It said that the dismissal was wholly attributable to the fact that the requirements of the business for employees to carry out work of a particular kind, namely, on the slaughtering line, had diminished. The Industrial Tribunal and, on an appeal by way of case stated, the Court of Appeal accepted this submission. Mr. Doherty and Mr. Murray appeal to your Lordships' House.

      The appellants say the company chose to engage all its employees on similar terms. "Requirements for employees to carry out work of a particular kind" meant "requirements for employees contractually engaged to carry out work of a particular kind." In this respect, no distinction could be made between those who worked in the slaughter hall and those who worked elsewhere. It is therefore wrong of the company to select for redundancy solely from those who normally worked in the slaughter hall. It should have selected from everyone working under the same contract of employment.

      My Lords, the language of paragraph (b) is in my view simplicity itself. It asks two questions of fact. The first is whether one or other of various states of economic affairs exists. In this case, the relevant one is whether the requirements of the business for employees to carry out work of a particular kind have diminished. The second question is whether the dismissal is attributable, wholly or mainly, to that state of affairs. This is a question of causation. In the present case, the Tribunal found as a fact that the requirements of the business for employees to work in the slaughter hall had diminished. Secondly, they found that that state of affairs had led to the appellants being dismissed. That, in my opinion, is the end of the matter.

      This conclusion is in accordance with the analysis of the statutory provisions by Judge Peter Clark in Safeway Stores Plc. v. Burrell [1997] I.R.L.R. 200 and I need to say no more than that I entirely agree with his admirably clear reasoning and conclusions. But I should, out of respect for the submissions of Mr. Declan Morgan Q.C. for the appellants, say something about the earlier cases which may have encouraged a belief that the statute had a different meaning.

      In Nelson v. British Broadcasting Corporation [1977] I.R.L.R. 148 Mr. Nelson was employed by the B.B.C. under a contract which required him to perform any duties to which he might be assigned. In fact he worked for the General Overseas Service broadcasting to the Caribbean. In 1974 the B.B.C. reduced its services to the Caribbean, as a result of which Mr. Nelson's services in that capacity were no longer required. When he refused alternative employment, he was dismissed on grounds of redundancy. The Industrial Tribunal concluded that he had been dismissed for redundancy, apparently on the grounds that a term could be implied into Mr. Nelson's contract of employment that he should carry out work on Caribbean programmes. The Court of Appeal rightly rejected the implication of such a term. But they went on to hold that Mr. Nelson was therefore not redundant. This was wrong. Whatever the terms of Mr. Nelson's contract, it was open to the Tribunal to find that he had been dismissed because the B.B.C.'s requirements for work on Caribbean programmes had diminished. This was a question of fact.

      The basis for the fallacy is to be found in the judgment of Brandon L.J. in Nelson v. British Broadcasting Corporation (No. 2) [1979] I.R.L.R. 346, when Mr. Nelson's case came again before the Court of Appeal. He said (at p. 353) that Mr. Nelson had been right in law in maintaining that "because the work which he was employed to do continued to exist, he was not redundant." In saying this Brandon L.J. appears to have meant that because Mr. Nelson was employed to do any work to which he might be assigned with the B.B.C. and because the B.B.C. was still carrying on business, he could not be redundant. In my opinion this cannot be right. The fact was that the B.B.C.'s requirements for employees in the General Overseas Service in general and for Caribbean broadcasts in particular had diminished. It must therefore have been open to the Tribunal to decide that Mr. Nelson's dismissal was attributable to that state of affairs. Of course, the B.B.C. did not necessarily have to respond in that way. They could, for example, have transferred Mr. Nelson to broadcasts which were still being maintained at full strength (say, to West Africa) in the place of a less experienced employee and made the latter redundant instead. In that case, it would have been open to the Tribunal to find that the other employee had been dismissed on account of redundancy. (Compare Safeway Stores Plc. v. Burrell [1997] I.R.L.R. 200 at p. 207.) In each case, the factual question of whether the dismissal was "attributable" to the statutory state of affairs is one for the Tribunal.

      The judgments in the two Nelson cases have caused understandable difficulty for Industrial Tribunals. They have been treated as authority for what has been called the "contract test", which requires consideration of whether there was a diminution in the kind of work for which, according to the terms of his contract, the employee had been engaged. I give one example. In Pink v. White [1985] I.R.L.R. 489, Mr. Pink was engaged to work in a shoe factory as a "making and finishing room operative." In practice, he did more specialised work as sole layer/pre-sole fitter. Because of a reduction in demand, the employer's requirements for making and finishing room operatives in general diminished, but their need for sole layers and pre-sole fitters remained the same. Nevertheless, they selected Mr. Pink for redundancy, apparently because he had been absent for lengthy periods and the employer had had to train someone else to do his work while he was away. The argument before the Employment Appeal Tribunal turned on whether the "contract test" ought to be applied (i.e. did the company need less employees of the kind specified in Mr. Pink's contract), in which case he was redundant, or the "function test" (did it need less employees to do the kind of work he was actually doing), in which case he was not. It held that it was bound by Nelson v. British Broadcasting Corporation [1977] I.R.L.R. 148 to apply the contract test and held that Mr. Pink was redundant. I have no doubt that on its facts the case was rightly decided, but both the contract test and the function test miss the point. The key word in the statute is "attributable" and there is no reason in law why the dismissal of an employee should not be attributable to a diminution in the employer's need for employees irrespective of the terms of his contract or the function which he performed. Of course the dismissal of an employee who could perfectly well have been redeployed or who was doing work unaffected by the fall in demand may require some explanation to establish the necessary causal connection. But this is a question of fact, not law.

      For these reasons, I would dismiss the appeal.


My Lords,

      I have had the advantage of reading in draft the speeches prepared by my noble and learned friends, Lord Irvine of Lairg L.C. and Lord Clyde. For the reasons they give I too would dismiss this appeal.


My Lords,

      For the reasons given by my noble and learned friend the Lord Chancellor, whose speech I have had the advantage of reading in draft, I, too, would dismiss the appeal.


My Lords,

      I have had the advantage of reading in draft the speeches of my noble and learned friends, Lord Irvine of Lairg L.C., and Lord Clyde. For the reasons which they have given I would also dismiss the appeal.


My Lords,

      It is an elementary rule in the interpretation and the application of statutory provisions that it is to the words of the legislation that attention must primarily be directed. Generally it will be the ordinary meaning of the words which will require to be adopted. On appropriate occasions it may be proper as matter of interpretation to adopt extended meanings to words or phrases, particularly if thereby the purpose of the legislation can be best effected or the validity of the legislation preserved. On other occasions it may be appropriate to adopt a strict or narrow meaning of the language used. But whatever the intensity of the process the temptation of substituting other expressions for the words of the statute in the course of interpreting it is to be discouraged, however attractive such a course may seem to be by way of explaining what it is thought the legislature is endeavouring to say. It may certainly be useful to analyse a statutory provision so as to identify the successive elements of which it is composed and so focus attention on the particular word or words which call for interpretation, or isolate the particular requirements which have to be met for its application. That was usefully done by the Employment Appeal Tribunal in Safeway Stores Plc. v. Burrell [1997] I.R.L.R. 200. But such an exercise should not involve any significant departure from the actual language which has been used.

      When it comes to a matter of applying a statutory provision to particular circumstances it may be tempting to devise so-called tests for its application. In the context of the particular area of employment law with which the present appeal is concerned the labels of a "contract test" and a "function test" have been identified. But the only test for the application of a statutory provision, such as occurs in the present case, is whether or not on a proper construction of the statutory language the facts which have been established fall within the provision. I see no advantage in prescribing labels as a means of giving guidance to the method to be adopted in applying the provision. Once the statute has been properly construed its application does not depend upon any test but on the language used and the particular facts and circumstances of the case. On the other hand there is in my view a danger in prescribing and designating tests since they may encourage an approach not intended by the legislator.

      The present case concerns the construction and application of section 11(2)(b) of the Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965. In relation to that subsection, and to the equivalent provision which applies in the United Kingdom, the so-called "contract test" has come in practice to be identified and indeed recognised as proper and even obligatory. I find its paternity and origin somewhat obscure. The terms of the contract in Nelson v. The British Broadcasting Corporation (No. 1) were invoked in order to show that the reason for Mr. Nelson's dismissal was not redundancy but his refusal to be directed to other work which was within the scope of his contract of employment. The reference to the terms of the contract however provided the seed which was then fertilised in Nelson v. The British Broadcasting Corporation (No. 2) [1979] I.R.L.R. 346 and blossomed into the proposition regarded as established law in Cowen v. Haden Carrier Ltd. [1982] I.R.L.R. 225 at para. 17 of the decision of the E.A.T. (to which the Court of Appeal gave some support [1983] I.C.R. 1), that employers required to show not only that the work of the kind on which the employee was actually engaged had ceased or diminished, but that the same was true of any work which he could have asked under his contract to do. I am not persuaded that this development of the law was necessarily justified by the basis on which it purported to proceed, but in any event I do not consider that the so-called test is appropriate.

      Counsel for the appellants sought to justify the proposition that reference must be made to the terms of the employee's contract by pointing to the word "employees" in section 11(2)(b). But that is a perfectly natural and proper word to use in the particular context and cannot bear the significance which he sought to put upon it. It is properly used to distinguish work being done by employees of the particular employer as distinct from work done by others than persons employed by that employer. I cannot spell out of the use of the word "employees" a necessity to treat the terms of the contract of employment as the conclusive measure of the "work of a particular kind" to which the subsection refers. On the contrary the appellants' approach seems to require a rewriting of the section so that it would refer to "employees of a particular kind" or to "work specified in their contracts of employment." But that is not what the paragraph says. It is not to the actual contractual arrangements which the employees have made that the paragraph directs attention but to the requirements of the business. The requirements of the business may call for a particular number of employees and for employees of particular skills and abilities. But the contractual provisions which the employer may make with the employees are not necessarily a requirement of the business: they are rather a means whereby the requirements of the business in respect of the workforce may be met. That is not to say that the provisions of the contracts of employment are necessarily irrelevant; in some circumstances they may be useful, for example in throwing light on the kinds of work carried out or the place of employment. But the contractual terms are not determinative of the application of the subsection.

      The Tribunal in the present case correctly approached the matter in a straightforward way, treating it as a factual inquiry, without any artificial subtlety. They considered the material before them and simply asked themselves the question posed by the Act. They stated that they "were of the opinion that the business needed fewer employees to do the work in the slaughter hall and that led to the dismissal of the applicants." The issue before the Tribunal was whether there had been a diminution of some work of a particular kind which led to the dismissal and the Tribunal were satisfied that this applied in this case. It seems to me that the Tribunal made no error in their understanding of the law and were entitled to come in the conclusion which they reached on the basis of the evidence before them. I agree that the appeal should be dismissed.


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