Several of the company’s employees had been given transport to work as part of their contract. After redundancies, the remaining number of employees so entitled made the service uneconomic, and the company withdrew it. The seven appellants had to leave being unable to get to work. They were replaced by the equal number of men living nearer the works. The court was asked whether these dismissals were also for redundancy.
Held: Changes in terms and conditions are relevant to the fairness of a dismissal but they do not create a redundancy situation
Buckley, LJ in dealing with the question of redundancy said: ‘There seems to me however, to be nothing in the language of the section to suggest that the employer should be treated as bound or likely to carry on his business in all, or indeed in any, respects in precisely the way in which he was carrying it on, at the time when the facts have to be considered.’
Lord Denning said: ”I come back, therefore, to section 1(2)(b): and I am afraid that I cannot read into it the words ‘on the existing terms and conditions of employment.’ I think the two cases were wrongly decided. I have less hesitation in overruling them because I notice that Lord Parker CJ himself decided as he did with reluctance: and I can see why. It is very desirable, in the interest of efficiency, that employers should be able to propose changes in the terms of a man’s employment for such reasons as these: so as to get rid of restrictive practices: or to induce higher output by piece work: or to cease to provide free transport at an excessive cost.’
Later Lord Denning said: ‘The employers can properly say to the men: ‘You have not lost your jobs because you are redundant. You have lost your jobs because you live so far away that it is not worth our while paying the cost of bringing you here – when we can get all the men we need nearby.” and ‘I would, however, remark that if an employer sought to reduce the wages of his men on the plea that otherwise he could not keep the business going – or if he employed women in the place of men to save expenses – with the result that some men lost their jobs, then I think the employer would have difficulty in resisting a claim.’
Judges:
Lord Denning MR, Buckley, Orr LJJ
Citations:
(1973) ICR 310, [1973] EWCA Civ 1, [1973] 2 All ER 1063, [1973] ICR 310, [1973] 1 WLR 678, (1974) 9 ITR 379
Links:
Statutes:
Redundancy Payments Act 1965 1(2)(b)
Jurisdiction:
England and Wales
Citing:
Appeal from – Chapman v Goonvean and Rostowrack China Clay Co Ltd NIRC 9-Nov-1972
The claimants appealed against rejection of their claims for redundancy. It had been part of their employment contract that they were collected and transported to work. After other employees were dismissed for redundancy, the transport service . .
Lists of cited by and citing cases may be incomplete.
Employment
Updated: 23 March 2022; Ref: scu.262737
