Appeal No. UKEAT/598/78

EMPLOYMENT APPEAL TRIBUNAL
4 ST. JAMES'S SQUARE, LONDON, S.W.1.

		At the Tribunal
		On 26 April 1979

Before
The Hon, Mr, Justice 
Talbot Mr. J.A. Scouller 
Mr. J.D. Hughes O.B.E.

GOZDZIK and SCOPIGNO	APPELLANTS

CHLIDEMA CARPET CO. LTD.	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellants	J.H.ANGEL ESQ.
Solicitor of Messrs.Cecil Angel & Co. 117/119 New Union Street, Coventry, CV1 2NY.	
	MR.DAVID LEE, 
Instructed by Messrs.Painter & Sons, 29 Church Street, Kidderminster, DY10 2AU.	

MR. JUSTICE TALBOT:
The two appellants brought proceedings for unfair dismissal against their employers but failed before the industrial tribunal. They therefore appeal from that decision.
At the outset we would like to make it clear that, in our view, the decision in this somewhat unusual case depends entirely on its own special facts. It does not seem to us to give rise to any particular principle. We may say at the outset that we have decided to dismiss these appeals.
Turning to the basic facts we see from the reasons, set out in the decision, that the two ladies (the appellants) had been employed by the respondent company in a job known as winding. The respondent company were carpet manufacturers. The job of these two ladies involved the winding of yarn onto bobbins so that the bobbins could be used in the carpet weaving.
The first appellant, Mrs. Gozdzik, had been employed by the respondents for nine years at the time of her dismissal. The second appellant, Miss Scopigno, had been employed for a period of two years.
The matters with which we are concerned start in or about February 1977. At that time it was decided by the respondents to introduce a bonus system of payment for the purposes of increasing efficiency in the winding department. That decision was brought about by a trade recession and it was a necessary decision in order to counter the effects of this trade recession. According to the Reasons, the decision to introduce this bonus system of payment in order to increase efficiency was not greeted with much pleasure by the shop steward who was concerned with this department. Furthermore it is stated in the Reasons that the workers on the shop floor knew about the proposed introduction but were not given any details by the respondents in relation to its working, nor was any meeting held to explain to the shop floor what was going to take place. Though that has not affected our decision on these appeals, we would like to make it clear that it seems to us that the respondent company might have acted a little better them they did for the need of good industrial relations, in that they night have explained fully all that was to take place.
It is important to know something about these two appellants and this is described by the industrial tribunal in these terms: that they were, before the introduction of the new scheme of bonus payments, slower in output than other winders on the shop floor but very conscientious workers. This is important in the sense that ultimately, in considering the matters in the light of the statutory provisions that had to be applied, the industrial tribunal found that they had never been capable of working consistently within the standards required, either before or after the change in the system of work. It is plain, therefore, that the industrial tribunal had clearly in mind not only their standard of work, (and that is what is important in this case) after the introduction of the bonus scheme, but also their standards of work before the introduction of the bonus scheme.
The result, so far as these two appellants were concerned, was that they were unable to maintain the new standards in their work that were required for the purposes of efficiency or the purposes of avoiding the trade recession effects.  On the 24th March 1977 they were both warned about their performance in writing and were told that if a better performance was not achieved, further action would follow. No improvement was shown and so, on the 27th April 1977, there would appear to have been a termination in the case of each of them of their contracts of employment. However, the trade union that was involved in this matter stepped in and, as a result of their efforts, the two ladies were given a further training period of four weeks. A Miss Childs, who at one time had been a shop steward and later a training officer at the respondent company, was put in charge of the two ladies and, after six days, reported that both these ladies were so slow it would be a waste of time going on with their training. Despite that report, however, they were both given a further three weeks working in order to encourage them. Ultimately, however, as there was no improvement they were told by the respondent company, in the presence of their shop steward, that, as there was no improvement, dismissal would follow. And, in fact, as there was no improvement dismissal did follow on the 22nd July 1977.
Having set out those facts, the industrial tribunal, then turned to consider the relevant matters in the First Schedule to the Trade Union and Labour Relations Act 1974. The first matter to consider, therefore, was what was the reason for the dismissal? And the reason, of course, put forward was one of incapability. The relevant provision is paragraph 6(2)(a). (2) reads :-
"(2) In sub-paragraph (l)(b) above the reference to a reason falling within this sub-paragraph is a reference to a reason which -
(a) related to the capability ... of the employee for performing work of the kind which he was employed by the employer to do."
(We have left out two words which have no application).
When considering the matter of capability there has to be considered that which is set out in paragraph 9(a) - and again we only refer to the relevant words:-
"'Capability' means capability assessed by reference to skill [and] aptitude..."
These matters of law that had to be considered were plainly in the minds of the industrial tribunal, as can be seen from paragraph 4 of the Reasons. They pose these points in this way:
"(a) Are they satisfied from the evidence that the work of the applicants showed lack of capability for the performance of work for which they were employed to do?
(b) Has the employer satisfied the tribunal that in the circumstances (having regard to equity and the substantial merits of the case) he acted reasonably in treating it is sufficient reason for dismissing the applicants.”
In other words first the reason for dismissal - capability. Second, if there was such a reason, then whether, under paragraph 6(8), the employers had shown that the dismissal was reasonable, having regard to equity and the substantial merits of the case.
We had put in today by Mr. Angel, who has argued this matter most cogently on behalf of the appellants, an amended Notice of Appeal, and it is to that which we look rather than the original which, plainly, was put in by a neither of the respondent company without any proper legal knowledge of what was required for such a notice.
The first ground of appeal is that the industrial tribunal failed to direct itself as to whether the new payments system was part of the appellants' contractual obligation. We do not think it can be rightly said, from what we have read of the Decision, that the industrial tribunal did so fail to direct itself. The new bonus system was introduced in payment for the same kind of work that the winders had been doing before and would continue to do. As we indicated at the outset, this case very much turns upon its own facts and there is no principle that we can see involved in this because this was a case of a new system of payments, by way of bonus, in order to increase output and efficiency.
The next ground of appeal alleges that the industrial tribunal’s conclusion that the appellants were never capable of working consistently at the standard required was perverse. The basis, as we understand it, of that submission is that, certainly in the case of the first appellant, for nine years the respondent company had accepted the standard of work which she was capable of and that the change brought about as a result of the new bonus system, was, in effect, an alteration of her contract and that it was wrong, therefore, to consider her incapability in relation to the new standards required when her capability had been satisfactory up to the introduction of the new system. The fallacy, as we see it, in that submission is that there was no alteration in the contract. What was taking place, as we have indicated, was an alteration by way of a bonus payment system in the standard of work forced upon the company by the need for increased efficiency to meet the recession period.
The came sort of argument, it seems to us, is needed to support the third ground of appeal - namely that appearing in paragraph 5(c) of the amended grounds of appeal.
In our view, on the particular facts of this ca.se, the industrial tribunal was entitled to consider the capability of the appellants in relation to the new standards required, brought about by the new bonus system of payment.  It is plain, moreover, from the facts disclosed in the Reasons that they reached the right conclusion, because the two ladies did not achieve the standard required as a result of the change in the system of payment. The change in the system of payment, as Mr. Lee indicated, was the circumstance that "threw into relief" (to use his phrase) the lack of capability of these two ladies.
We are, therefore, unable to see on this first point, which concerns capability, that the industrial tribunal were, in any way, in error in the way that they dealt with it or the findings they made upon it.
The second principal ground of attacking these decisions lay, of course, upon the consideration of paragraph 6(8) of the First Schedule. It is said by Mr. Angel that what was set out by the industrial tribunal in paragraph 4 was wrong in that they said that, both before and after the change in the system, they had never been capable consistently of achieving the standard required. We mentioned this at the outset of this judgment. It is permissible, we think, as Mr. Lee has argued, for the industrial tribunal to have viewed it in this way - that these two ladies were never fully capable in the sense that they measured up to the other workers.
Until the new system arrived, the respondent company management were prepared to accept that position. But when their incapability was highlighted by the introduction of the new system, then the management were entitled to act upon it.
Another point of criticism is that the industrial, tribunal said that, but for the dramatic recession in the carpet trade, it would have been unreasonable to use the circumstances for dismissal. That is introducing, Mr. Angel argued, the reason of the dramatic recession in the carpet trade as constituting a reason for the dismissal: something which, if that is indeed a proper way of looking at it, he rightly argues, was an irrelevant matter. We do not think, however, that the industrial tribunal were putting it in that way. Again it was a circumstance which brought about the change in the system and not a reason for the dismissal. So far as paragraph 6(8) is concerned, and the matters that had to be considered, we view what is set out in the industrial tribunal’s Decision and Reasons as showing adequately that they were fully apprised of all the necessary matters to consider. They were factual matters. There is no legal error that we can detect and we could not upset their decision on that point either.
We will part from this case by saying it would seem perhaps a pity that, particularly in the case of Mrs. Gosdzik, on employee for nine years, and to some extent for Miss Scopigno, an employee for two years, in the particular circumstances of this matter (though there was no legal responsibility upon the company) they did not find it in their hearts to do something for these two appellants.
These appeals are dismissed.