Fitzgerald v Hall, Russell & Co Ltd

A break in the contract of employment caused by dismissal does not necessarily break continuity of employment for redundancy purposes. An employee is absent because of a temporary cessation of work where the employer has no work available for that employee and the cessation, assessed retrospectively after re-engagement, was temporary.

The employer’s business or department need not have closed. Whether the cessation was temporary depends on all the circumstances. Relevant matters include the parties’ expectations and the duration of the absence relative to the periods of employment before and after it.

The appellant worked as a welder for the respondent shipbuilders from July 1958 until his dismissal for shortage of work in November 1962. The respondent re-engaged him nearly eight weeks later and dismissed him for redundancy in December 1967.

The Industrial Tribunal calculated his redundancy payment from January 1963, treating the earlier dismissal as breaking continuity. The First Division of the Court of Session refused his appeal. The appellant appealed to the House of Lords.

The central questions were whether the intervening absence resulted from a cessation of work within paragraph 5(1)(b) of Schedule 1 to the Contracts of Employment Act 1963, and, if so, whether that cessation was temporary.

1. By a majority, the appeal was allowed and the case remitted to the Industrial Tribunal. Lord Upjohn delivered the leading speech. Lord Reid and Lord Wilberforce expressly agreed with him. Lord Morris of Borth-y-Gest reached the same result by substantially corresponding reasoning. Lord Guest dissented.

2. Per Lord Upjohn and Lord Morris, the termination of the employee’s contract did not conclusively break continuity for statutory purposes. Paragraph 5 of Schedule 1 to the Contracts of Employment Act 1963 permits weeks without work or a subsisting contract to count in defined circumstances. Its operation was personal to the individual employee.

3. Per Lord Upjohn and Lord Morris, “cessation of work” in paragraph 5(1)(b) meant a cessation of work available for the particular employee. It was enough that the employer dismissed or laid off the employee because no work remained available for him. The employer’s entire business or the relevant department did not have to close. The number or position of other employees was not decisive. The appellant’s absence therefore resulted from a cessation of work.

4. Per Lord Upjohn, whether the cessation was temporary had to be determined retrospectively, with knowledge of events between the first dismissal and the later dismissal giving rise to the redundancy claim. The original dismissal’s indefinite duration was not conclusive. The tribunal had to reach a common-sense conclusion from all the circumstances. Per Lord Morris, relevant evidence included the parties’ initial expectations and the duration of the absence in relation to the preceding and subsequent employment, but no single factor was decisive.

5. Per Lord Morris and Lord Upjohn, the subsequent Redundancy Payments Act 1965 did not compel a different construction of the 1963 Act. Provisions protecting intervals following written offers of renewal or re-engagement did not establish that other intervals could never count.

6. The Tribunal had not determined whether the cessation was temporary. The matter was therefore remitted for that determination and, if answered affirmatively, assessment of the redundancy payment. Lord Guest would have dismissed the appeal because he considered “cessation of work” to require cessation of the employer’s operations, rather than merely diminished work for one employee.

1. House of Lords: Allowed the appeal by a majority and remitted the case to the Industrial Tribunal to determine whether the cessation of work was temporary and, if so, to assess the redundancy payment.

2. First Division of the Court of Session: Refused the employee’s appeal and upheld the conclusion that his qualifying service began on re-engagement in January 1963.

3. Industrial Tribunal: Held that the November 1962 dismissal broke the employee’s service and that his qualifying service for a redundancy payment began in January 1963.