Murray and Another v. Foyle Meats Ltd (Northern Ireland)

The House of Lords held that the statutory phrase "the requirements of that business for employees to carry out work of a particular kind" (Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965, section 11(2)(b), as incorporated by Article 2(7) and considered under Article 22(2)(c) of the Industrial Relations (Northern Ireland) Order 1976) is to be assessed by reference to the requirements of the business, not by reference to the precise terms of an employee's contract.

The correct approach is to ask two factual questions: (i) whether the employer's requirements for employees to carry out work of a particular kind have diminished, and (ii) whether the dismissal was attributable, wholly or mainly, to that state of affairs. The application of the statute is therefore a question of fact (causation), and contractual classifications are not determinative though they may be relevant evidence.

Background and facts:

• The respondents, Foyle Meats Limited, operated slaughtering lines and employed the appellants as meat plant operatives who normally worked in the slaughter hall but could be required to work elsewhere under their contracts. A downturn in business led the company to reduce slaughtering from two lines to one and to propose about 35 redundancies. The company selected staff who normally worked in the slaughter hall; the appellants were dismissed on 27 March 1995 and complained of unfair dismissal.

Procedural posture:

• The appellants brought complaints to an Industrial Tribunal. The employer bore the burden under Article 22(1) of the Industrial Relations (Northern Ireland) Order 1976 of demonstrating the reason for dismissal and that it fell within Article 22(2). The company relied on Article 22(2)(c) (redundancy) and, by Article 2(7), the definition in section 11(2)(b) of the Contracts of Employment and Redundancy Payments Act (Northern Ireland) 1965. The Tribunal found that the employer's requirements for employees in the slaughter hall had diminished and that this led to the dismissals. On a case stated appeal the Court of Appeal accepted the employer's submission. The appellants appealed to the House of Lords.

Nature of the claim and issues:

• The claim was an unfair dismissal complaint alleging the dismissals were not genuinely attributable to redundancy. The central legal issue was the meaning of "requirements of that business for employees to carry out work of a particular kind" in section 11(2)(b): whether it must be read in terms of the work specified in an employee's contract (the "contract test") or whether it looks at the business's requirements for work of a particular kind in fact.

Court's reasoning and decision:

• The House of Lords rejected the view that the statute must be applied by reference to the employee's contractual description of the work. The correct approach requires asking two factual questions: whether the relevant business requirements have diminished and whether the dismissal is attributable to that diminution. Contractual terms may be evidence of the kind of work but are not determinative. Earlier authorities that had encouraged a mandatory "contract test" (notably decisions in the Nelson line of cases and subsequent development) had caused uncertainty; the Lords emphasised that such matters are questions of fact for the Tribunal. The House of Lords agreed with the Employment Appeal Tribunal's analysis in Safeway Stores Plc v. Burrell and concluded that the Tribunal's findings should stand.

Relief sought and disposition:

• The appellants sought to overturn the Tribunal's finding of redundancy and to succeed in their unfair dismissal complaints. The House of Lords dismissed the appeal, upholding the Tribunal's factual findings that the employer's requirements for slaughter-hall work had diminished and that the dismissals were attributable to that diminution.

Appeal dismissed. The House of Lords held that section 11(2)(b) is to be applied by asking the factual questions whether the employer's requirements for employees to carry out work of a particular kind have diminished and whether the dismissal is attributable to that diminution. Contractual descriptions of the work are not decisive; they may be evidence but do not displace the statutory factual inquiry. The Tribunal's findings of diminution and causation were accordingly upheld.

Complaint to Industrial Tribunal; on appeal by way of case stated the Court of Appeal accepted the employer's submission; appeal to the House of Lords ([1999] UKHL 30).