Tracy and Others v. Crosville Wales Ltd

The House of Lords considered whether participation in industrial action (a strike or overtime/rest-day ban) can, by itself, be treated as "conduct" or "action" under sections 73(7B) and 74(6) of the Employment Protection (Consolidation) Act 1978 so as to justify reduction of compensation for unfair dismissal where selective re-engagement has occurred under section 62. The court held that contributory fault provisions must be applied to the dismissal itself and not to the selective re-engagement process; Parliament had not amended sections 73 or 74 to change that focus. Accordingly, mere participation in collective industrial action cannot be the basis for reducing compensation where the conduct relied on is common to both those re-engaged and those not re-engaged. A reduction is only possible if there is identifiable individual blameworthy conduct, additional to mere participation, which contributed to the dismissal.

Background and parties: Crosville Wales Ltd employed 119 drivers, all union members. Following a dispute over pay in October 1990, the drivers imposed a ban on overtime and rest-day working. The employer dismissed many drivers and carried out selective re-engagement and recruitment. Seventy-three former drivers brought unfair dismissal complaints.

Procedural posture: A preliminary tribunal hearing raised jurisdictional questions under section 62 of the Employment Protection (Consolidation) Act 1978. The Employment Appeal Tribunal and later courts considered jurisdiction, then the industrial tribunal found selective non-re-engagement unfair and awarded compensation; the employer sought reduction of compensation for contributory fault. The matter proceeded by appeal to the Employment Appeal Tribunal, the Court of Appeal ([1996] I.C.R. 237), and finally to the House of Lords.

Nature of the claim: The complainants sought remedies for unfair dismissal and compensation. The employer contended that compensation should be reduced because the employees' conduct (participation in industrial action and related acts) contributed to dismissal under sections 73(7B) and 74(6).

Issues framed:

• Whether, in cases of selective re-engagement under section 62, participation in industrial action can amount to "conduct" or "action" for the purposes of reducing compensation under sections 73(7B) and 74(6).
• Whether the tribunal must assess contributory fault by reference to the reason for dismissal or by reference to the reason for non‑re‑engagement.

Court's reasoning: The House of Lords adopted the construction in Courtaulds Northern Spinning Ltd v Moosa [1984] I.C.R. 218 that the statutory scheme leaves the complaint as one of dismissal and that sections 73 and 74 remain directed at conduct contributing to dismissal. Section 62 only alters the focus of reason for the unfairness inquiry but does not amend sections 73 or 74 to require contributory-fault enquiries to be tied to failure to re-engage. The court emphasised the practical and policy difficulties of assessing and apportioning blame for collective industrial action when some participants are re-engaged and others are not. The Lords accepted that identifiable individual conduct, additional to mere participation in collective action, can in principle constitute contributory fault, but mere collective participation cannot.

Result: The appeal was dismissed. The House of Lords held that compensation could not be reduced merely because the employees had taken part in industrial action; any reduction required separate blameworthy individual conduct that contributed to dismissal.

The appeal was dismissed. The House of Lords held that, in cases of selective re-engagement under section 62, contributory‑fault reductions under sections 73(7B) and 74(6) relate to conduct contributing to the dismissal itself and not simply to participation in industrial action; mere collective participation cannot justify reduction where the same conduct was shared by those re‑engaged. A reduction is only open where there is identifiable individual conduct additional to mere participation which contributed to the dismissal.

Industrial Tribunal (preliminary hearing and full hearing) → Employment Appeal Tribunal (jurisdiction and later appeal) (see Courtaulds [1984] I.C.R. 218 and TNT [1994] I.C.R. 1 for precedents) → Court of Appeal [1996] I.C.R. 237 → House of Lords [1997] UKHL 42 (final).