Tracey v Crosville Wales Ltd

Where striking employees are unfairly dismissed through selective re-engagement, mere participation in the common industrial action cannot by itself justify reducing their compensation for contributory fault. Such a reduction must be just and equitable. Blame for collective action cannot fairly be allocated to an individual claimant when it is shared equally by employees who were re-engaged.

A tribunal may, however, reduce compensation for blameworthy conduct attributable to an individual which is additional to, or separate from, mere participation in the industrial action. That conduct may be examined separately even when it occurred during and formed part of the action. For contributory fault, the relevant question concerns conduct contributing to the dismissal, rather than conduct contributing to the failure to re-engage.

Bus drivers employed by Crosville Wales Ltd took collective industrial action and were dismissed. The employer subsequently recruited replacement staff. Although every former driver could apply, only some applied and were re-engaged. Seventy-three drivers complained of unfair dismissal.

An industrial tribunal held that it had jurisdiction under section 62 of the Employment Protection (Consolidation) Act 1978. It later found the selective failure to re-engage unfair. The tribunal held that participation in the collective action could not reduce compensation, although it stated that it would otherwise have reduced the awards by 50 per cent.

The Employment Appeal Tribunal held that participation could constitute contributory fault and remitted the amount of any reduction. The Court of Appeal, reported at [1996] ICR 237, held that mere participation was insufficient, although distinct individual misconduct could be considered. The employer appealed. The central question was whether participation in industrial action could itself amount to conduct or action justifying reduced compensation under sections 73(7B) and 74(6) of the 1978 Act.

1. Appeal dismissed unanimously. Lord Nolan delivered the leading speech. Lord Goff of Chieveley, Lord Mackay of Clashfern, Lord Lloyd of Berwick and Lord Clyde agreed with his reasons.

2. Per Lord Nolan, in a selective re-engagement case, sections 73(7B) and 74(6) of the Employment Protection (Consolidation) Act 1978 retain their ordinary focus on conduct causing or contributing to the dismissal. Section 62(3) substitutes the reason for non-re-engagement only for specified purposes. It does not transform the employee's complaint into one concerning refusal of re-engagement. The reasoning of Courtaulds Northern Spinning Ltd v Moosa [1984] ICR 218 on this point was compelling and was adopted.

3. Per Lord Nolan, mere participation in the collective industrial action could not itself justify reducing compensation. All participating employees shared responsibility for that action, including those whom the employer re-engaged. It was therefore impossible to allocate blame for the collective action fairly to an individual claimant while disregarding the selective re-engagement which had created the unfairness. Parliament could not have contemplated that result.

4. The conclusion followed from the express requirement that any reduction be just and equitable. It did not require words to be added to the statute. The three relevant inquiries for a compensatory award were whether the employee's conduct was blameworthy, whether it caused or contributed to the dismissal, and what reduction would be just and equitable.

5. Per Lord Nolan, blameworthy conduct attributable to an individual and additional to, or separate from, mere participation in the industrial action may constitute contributory fault. Such conduct may be examined separately even if it occurred during and formed part of the collective action. No such individual conduct was alleged or found against the respondent drivers.

6. Lord Nolan agreed with the Court of Appeal's treatment of TNT Express (UK) Ltd v Downes [1994] ICR 1. Its contrary approach was wrong insofar as it permitted generalised judgments about the merits of collective industrial action. The tribunal's proposed 50 per cent reduction rested on precisely such an impermissible assessment and therefore did not arise for consideration.

7. Lord Nolan observed that a broader contextual inquiry may be required when determining whether selective non-re-engagement was unfair, particularly where an employee's conduct is relied upon under section 57(2)(b). He left open whether that inquiry could extend to deciding the collective merits or demerits of the industrial action.

1. House of Lords: The employer's appeal was dismissed unanimously. The Court of Appeal's conclusion that mere participation in collective industrial action could not justify reduced compensation was upheld.

2. Court of Appeal: In [1996] ICR 237, Waite LJ, with Otton and Beldam LJJ agreeing, held that collective participation alone was insufficient contributory fault, although distinct individual conduct could qualify.

3. Employment Appeal Tribunal: Following TNT Express (UK) Ltd v Downes, it allowed the employer's appeal. It also allowed the employees' cross-appeal concerning the proposed 50 per cent reduction and remitted that issue to the industrial tribunal.

4. Industrial tribunal: It found the selective failure to re-engage unfair. Applying Courtaulds Northern Spinning Ltd v Moosa, it declined to reduce compensation for participation in the industrial action, while stating that it would otherwise have reduced the awards by 50 per cent.