Appeal No. EAT/255/96

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 28 October 1996

Before
THE HONOURABLE MRS JUSTICE SMITH
MR A C BLYGHTON
MISS D WHITTINGHAM

MR MARK BUTLER & OTHERS	APPELLANTS

INITIAL CLEANING SERVICES LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING
Revised

	APPEARANCES

For the Appellants	MR CHRISTOPHER WALKER
(of Counsel)
Messrs Whittles
Solicitors
Pearl Assurance House
23 Princess Street
Albert Square
Manchester
M2 4ER	

	MRS JUSTICE SMITH:	This is the preliminary hearing of an appeal against a decision of an Industrial Tribunal sitting at Manchester on 26 June 1996.  The Tribunal had considered a series of cases in which the Appellants alleged that they had been unfairly dismissed from their employment.  The Tribunal found that the Appellants had been unfairly dismissed, but they declined to make any compensatory awards.

	The Appellants had been employed as cleaners by Smith & Nephew Medical Fabrics Ltd.  In early 1994 the employers decided to transfer their cleaning functions to outside cleaning contractors.  They entered into an arrangement with the Respondents who were to provide cleaning services.  The premises at which this group of Appellants were employed was no longer to be used as a base for cleaners.  Smith & Nephew gave notice of redundancy to each of the Appellants.  The notices were delivered on or about 29 April 1994 and were to take effect on 22 July 1994.  Meanwhile, the employees continued to work.

	On 9 May Mrs Cahill, Smith & Nephew’s Personnel Officer, called a meeting, attended by all the Appellants.  She told them that Mr Taylor, the Site Manager for the Respondents, would visit the premises on the following day, 10 May, for the purpose of interviewing any employees who were interested in re-engagement by the Respondents.

	At this time in early May, Smith and Nephew did not accept that that which they were about to do would involve the transfer of an undertaking to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 would apply.  We have been told (although this does not appear in the Tribunal’s decision) that the Appellants’ Trade Union, the GMB, took the view that this was a transfer of undertaking and that the Appellants should have protection under those Regulations.  At the hearing of this matter, the Respondents accepted that the Regulations did apply to the transfer and that that was one of the reasons why the dismissal of these employees had been unfair.  The Tribunal found the dismissals unfair.  The Appellants claimed compensatory awards in addition to the redundancy payments they had already received.

	The Tribunal found as a fact that had any of the Appellants attended the meeting with Mr Taylor on 10 May, he would have been offered re-engagement on terms which were no less favourable than the terms on which he had been working with Smith & Nephew.  However, none of the Appellants attended the meeting with Mr Taylor.  Each, save one who did not appear before the Tribunal, advanced his or her reasons for not doing so.

	A common thread between the reasons advanced was that the Appellants believed that the terms which were to be offered by the Respondents would be less favourable than their terms with Smith & Nephew.  Some said they believed they would be much less favourable.  Some Appellants said that Mrs Cahill had told them that the terms on offer would be less favourable, but the Industrial Tribunal rejected that.  Mrs Cahill had denied it.  She said that she did not know what terms would be offered.

	The Industrial Tribunal found that each Appellant had acted unreasonably in not attending to speak to Mr Taylor and had failed to mitigate his loss.  That was the basis upon which the Tribunal declined to make any compensatory awards.

	Mr Walker, for the Appellants, has submitted that the refusal to grant a compensatory award and the finding that there had been a failure to mitigate loss was wrong in law.  He relied, in support of that submission, on the case of McAndrew v Prestwick Circuits Limited [1988] IRLR 514.  This case had been referred to the Industrial Tribunal and they had distinguished it on its facts.  The facts of McAndrew were somewhat unusual.  Mr McAndrew had been employed at one factory.  His contract entitled his employers to require him to move to another factory but, as the Tribunal found, only if reasonable notice were given.  The employers required him to move to the other factory at very short notice.  He refused.  An impasse was reached and he resigned, treating the attempt to move him as a breach of contract which amounted to a constructive dismissal.  The Tribunal accepted that the employer’s breach amounted to a constructive dismissal, but then went on to say that he ought to have accepted that very same employment in mitigation of his loss.  The Employment Appeal Tribunal, sitting in Edinburgh, held that the Tribunal had erred.  They said this:

“We accepted the submissions of Counsel for the Appellant, the employee, that as the dismissal was in our view, clearly on 8 May, conduct before dismissal was not relevant in relation to mitigation of loss.  In other words, a refusal to accept work at the other factory could not amount to a failure to mitigate when the contract was subsequently terminated as one of constructive dismissal.”

	That seems to us to be in accordance with common sense.  In fact, Lord Mayfield in McAndrew cited the case of Savoia v Chiltern Herb Farms Ltd [1981] IRLR 65, where the facts were almost indistinguishable from the facts of McAndrew.  The Employment Appeal Tribunal in that case had similarly found that there was no failure to mitigate.

	However, the circumstances of these cases are entirely different.  The ordinary rules of the common law in relation to mitigation apply before Industrial Tribunals and it is well established that an employee has a duty to take reasonable steps to mitigate his loss.  That duty arises from the time that he knows that he is to be dismissed.  He is not entitled to do nothing until his employment has come to an end.  Mr Walker submitted that as these employees were still employed at the time of the proposed meeting with Mr Taylor they could not be criticised for their refusal to go.  We have no hesitation in dismissing that suggestion as unarguable.  The duty to do that which is reasonable by way of mitigation arises as soon as the employee knows that his employment is to end, and he must do that which is reasonable while working his notice.  Accordingly, it appears to us that this Tribunal was entitled to reach the conclusion that there had been a failure to act reasonably and mitigate loss.

	In the course of argument Mr Walker sought leave to raise another point.  He wished to allege that the Tribunal had not dealt with an issue which had been raised by the Appellants during the hearing.  It was said that the reason which some Appellants had advanced for not attending for interview with Mr Taylor, was that their trade union had advised that this was a transfer to which the TUPE Regulations would apply and that they would be fully protected.  That was why they had not wished to attend the meeting with Mr Taylor.

	We are not satisfied that that reason was advanced and the point could not be determined without examining the Chairman’s notes of evidence.  We are not prepared at this late stage to consider a radical amendment to the Notice of Appeal and a direction to obtain the Chairman’s notes.

	It follows that this appeal must be dismissed at this preliminary stage.