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United Kingdom Employment Appeal Tribunal |
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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Davison v Secretary Of State For Employment [1991] UKEAT 496_90_0710 (7 October 1991) URL: http://www.bailii.org/uk/cases/UKEAT/1991/496_90_0710.html Cite as: [1991] UKEAT 496_90_0710, [1991] UKEAT 496_90_710 |
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At the Tribunal
THE HONOURABLE MR JUSTICE WOOD MC (P)
MR J C RAMSAY
MRS P TURNER OBE
Transcript of Proceedings
JUDGMENT
PRELIMINARY HEARING
Revised
APPEARANCES
For the Appellant The Appellant in person
MR JUSTICE WOOD (PRESIDENT): This is a Preliminary Hearing of an Appeal by Mr Davison from the decision of an Industrial Tribunal sitting at London (South) under the learned Regional Chairman Sir Oliver Lodge who on the 15 August 1990, dismissed his claim against the Secretary of State for Employment in respect of payments alleged to be due under Section 122(3)(b) of the Employment Protection (Consolidation) Act 1978.
Mr Davison was employed by Datamaid Ltd on 17 July 1989. His employment terminated on 15 December 1989 when the company became insolvent. It was terminated without notice and without any payment in lieu of notice. He had been employed for more than one month but for less than one year. Under his Contract of Employment with the company he was entitled to one month's notice. The Tribunal had to consider the provisions of Section 122 of the 1978 Act and Section 49(1). Section 122(1) reads thus:
"Employee's rights on insolvency of employer
(1) If on an application made to him in writing by an employee the Secretary of State is satisfied -
(a) that the employer of that employee has become insolvent; and
[(aa) That the employment of the employee has been terminated; and]
(b) that on the relevant date the employee was entitled to be paid the whole or part of any debt to which this section applies,
the Secretary of State shall, subject to the provisions of this section, pay the employee out of the Redundancy Fund the amount to which in the opinion of the Secretary of State the employee is entitled in respect of that debt."
So that in this case (a) was satisfied, the company was insolvent, (aa) was satisfied the employment came to an end without notice and without payment in lieu of notice and (b) that the issue arises whether the employee, that is Mr Davison, was entitled to be paid the whole of any part of "any debt to which this section applies". That is emphasised in the last few words of that sub-section by the phrase "is entitled in respect of that debt" which we underlined.
The debts to which the section applies are set out in Sub-section (3) and we need only to read Sub-section (3)(b). The relevant words therefore read thus:
"This section applies to the following debts:-
...(b) any amount which the employer is liable to pay the employee for the period of notice required by section 49(1) or (2) or for any failure of the employer to give the period of notice required by section 49(1)".
That refers us to Section 49(1) and that reads, and it is relevant to this part:
"The notice required to be given by an employer to terminate the contract of employment of a person who has been continuously employed for [one month] or more -
(a)shall be not less than one week's notice if his period of continuous employment is less than two years".
It follows from the reading of those parts of those sections that the payment due to Mr Davison from the Secretary of State was "any amount which (he) is liable to be paid for the period of notice or for failing to give notice required by Section 49(1) or (2)". The submission of Mr Davison is that the wording there should only be read as if those are the minimum amounts to be paid and that the obligation of the Secretary of State is to pay such damages as might be payable for the breach of contract by the company had it remained solvent. He does not hesitate to face the possible set of circumstances or facts that an employee could be granted notice of twelve months or two or three or even more years; and that although he had only been employed for a very short time and although perhaps after he had lost his employment he obtained other employment within a short time nevertheless the amount to be paid by the Secretary of State is the amount of contractual notice, or the amount calculated on the basis of the contractual notice.
We find ourselves unable to accept his submissions and we agree with the view taken by the Industrial Tribunal that the relevant period is the period required by Section 49(1) and that the liability of the Secretary of State is limited to that period. It follows therefore that we find no error in the construction put on the statute by the Industrial Tribunal and we indeed agree with it.
However, before leaving this matter it is right that we should adopt the comments and the implied criticism of the Industrial Tribunal of a pamphlet issued in 1987 by the Department of Employment entitled "Employee's rights on insolvency of employer". That pamphlet gives the impression that the amount that might be awarded is the amount to which the employee could be awarded in an action for damages in the County Court. The Industrial Tribunal were critical of that suggestion and thought that it was misleading. We accept that criticism; we feel that it would be advantageous for those in the Department responsible for these pamphlets to review the wording of that pamphlet, and if necessary to correct it or withdraw it because in our judgment it does not reflect what is said in the Statute.
With that comment we nevertheless find ourselves in total agreement with the Industrial Tribunal and it follows that this appeal must be dismissed.
