Appeal No. EAT/435/90

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 2 July 1992
	Judgment delivered on 30 July 1992

	Before

	THE HONOURABLE MR JUSTICE WOOD MC (PRESIDENT)

	MR S M SPRINGER MBE

	MRS M E SUNDERLAND JP

SECRETARY OF STATE FOR EMPLOYMENT	APPELLANT

MR A J PARFITT	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	Mr M H Kent
	(of Counsel)
The Treasury Solicitor
Queen Anne's Chambers
28 Broadway
LONDON SW1H 9JS

For the Respondents	IN PERSON

	MR JUSTICE WOOD (PRESIDENT):     Mr Parfitt is an architect, who in 1989 employed less than 10 employees.  On 17th November 1989 he gave 12 weeks notice to terminate the employment of his assistant on 9th February 1990, on which date he made him a redundancy payment of £3,870.  On that same day, 9th February, he claimed £1,354.50 by way of rebate of 35% of that redundancy sum.

	In reply he received from the Department of Employment, Redundancy Payment Service, a letter dated 12th February rejecting his claim.  The first paragraph reads:-

	"Redundancy Rebate was abolished on 16th January 1990.  Unfortunately I must therefore reject your claim for redundancy rebate as it appears to involve employees who were made redundant after that date."
That letter also told of his right to appeal to an Industrial Tribunal.

	On 15th February Mr Parfitt replied as follows:-
	"I have your letter of 12th instant, I will be glad if you will send me form IT1 for appeal to the Industrial Tribunal as I consider the decision wrong in law and in principle.

	 The un-notified abolition of the rebate is an outrageous summary decision and I should be obliged if you will advise me under what authority the decision was made.

	 I am also writing to my member of Parliament requesting he takes up the matter with the Minister direct." 

	Mr Parfitt applied by Originating Application to an Industrial Tribunal dated 2nd March 1990.  The particulars of his claim read -
	"On 17 November 1989 I gave 12 weeks' notice to an employee that he was redundant.  He worked out the notice.  I paid him £3,870 redundancy money on 9 February 1990.

	 Form of claim for rebate was sent to me only when claim was made.  Notice was given me on 12 February 1990 that rebate was abolished retrospectively.

	 Although requested no information as to the authority for abolition has been forthcoming.

	 This procedure is contrary to national justice.  Payment of the rebate of £1,354.50 is requested."

	On 5th July 1990 an Industrial Tribunal sitting at London (North) under the Chairmanship of Mrs Stoll found in favour of Mr Parfitt and made an Order accordingly.  The decision is extremely succinct and reads in its relevant parts:-
	"1.  ...

	 2.  We heard the Applicant's evidence that he relied on the pamphlet issued to him by the Respondent in October 1989, in which there is no reference to the fact that a change in the law was about to be made..

	 3.  Mr Morgan, on behalf of the Respondent, did not challenge any of his evidence.  He agreed with the Tribunal that it was a valid point to have alerted people at that time of the possibility of an impending change.  The royal assent was given on 16 November 1989 although no-one knew when it would be given.  He said that employers' organisations were in fact given this information by the Respondent.  Individual employers were not so informed.

	 4.  In the circumstances of this case where the Applicant has conscientiously carried out all the requirements of an employer, we have no doubt that had he been properly alerted to the change in the law, he would have acted so as to bring himself within the notice period and would have been paid the rebate.  We consider that not to pay this rebate in these circumstances is unreasonable.  We therefore order the Respondent to pay to the Applicant the rebate of £1,354.50."

	 The Secretary of State now appeals.

	S.104(1)(a) of the Employment Protection (Consolidation) Act 1978 reads -
	"Subject to the provisions of this section, the Secretary of State shall make a payment (in this Part referred to as "redundancy rebate") out of the fund to any employer who -
	
	(a)is liable under the foregoing provisions of this Part to pay, and has paid, a redundancy payment to an employee ..."

	At the relevant date the percentage of rebate was 35%.  By S.27 of the Wages Act 1986 provision was made that the redundancy rebate scheme only applied thereafter to employers of less than 10.

	By S.17 of the Employment Act 1989, "sections 104 and 104A (payment by Secretary of State of redundancy rebates to employers with less than 10 employees) ... shall cease to have effect".

	By S.30(3)(f) the provisions of S.17 came into force at the end of a period of two months beginning with the day on which the 1989 Act is passed.  The royal assent was the 16th November 1989.  This was the day before notice was given by Mr Parfitt.

	Section 29(6) and Schedule 9 of the 1989 Act set out transition provisions.  Those provisions are to be found in paragraph 4 of Schedule 9 which reads -
	"Nothing in this Act shall affect the continued operation of any provision of the 1978 Act to the purposes of, or in connection with, the payment of a redundancy rebate under S.104 of that Act in a case where -

	..." 
Two situations are set out which can be paraphrased as first, where the claim is made before the 16th January 1990 and secondly, where the effective date of termination of the employment falls before 16th January.  Neither applies in the present case.

	The facts in this case as we are now able to ascertain them, show that Mr Parfitt's assistant had been with him since 1965.  The decrease in work available meant that there was insufficient to warrant his continued employment and that he would have to be made redundant.  Mr Parfitt had so indicated to him during 1989, but his assistant indicated that he wished to continue working for as long as possible.  In view of this Mr Parfitt delayed giving notice and allowed him to work out his notice rather than to pay him a lump sum in November.  Originally it had been anticipated that the termination would have been necessary by the end of 1989.

	During October 1989, in anticipation of the necessity to give notice on ground of redundancy, Mr Parfitt approached the office of the Department of Employment dealing with redundancy at Arena House, Bridge Road, Wembley, Middlesex and asked for guidance.  He was sent two pamphlets and a notice headed "IMPORTANT NOTICE - REDUNDANCY INSOLVENCY PAYMENT SCHEME - THE EMPLOYMENT PROTECTION (VARIATION OF LIMITS) ORDER 1988".  That notice dealt with the maximum limit of £172 per week as a week's pay.  Mr Parfitt, as we have seen, acted in accordance with the indications given in this documentation.  It was on 12th February that he was first informed that his claim was not in order and indeed the basis for its rejection was still unknown to him when he presented his Originating Application to the Industrial Tribunal.  This is made clear from that document.

	On 22nd February 1990 he received by post another notice.  We set it out in full.
	"	IMPORTANT - PLEASE READ

	 Redundancy rebate will be abolished from Tuesday, 16 January 1990.

	 Redundancy rebate claims submitted before that date will be processed in the normal manner.  Please note the employees must be made redundant before the claim is made.

	Note on projected relevant dates

	 An employee is entitled to a weeks notice for each complete year of service, up to a maximum of 12.  It is up to the employer as to whether this notice is worked out, or a lump sum payment made in compensation.  (a payment in lieu of notice).  If a payment in lieu is made, then the relevant finishing date for a redundancy payment, will be the date on which the notice would have finished, if worked.

	 The Department of Employment will accept claims for redundancy rebate, even if the relevant date is on or beyond 15 January 1990, so long as the claim is received in the Redundancy Payments Office on or before Monday 15 January 1990."  
The notice itself is not dated.

	By the time this was received, the information therein contained was of no great assistance to Mr Parfitt.  It seems to us that this notice was prepared at or about the date of the royal assent of the 1989 Act because the commencement date of 16th January 1990 is known for the purposes of the notice.

	If that "important notice" had been sent to Mr Parfitt at any time prior to 15th January 1990, or if a public announcement of the effects of the 1989 Act upon redundancy rebates had been made known, or if in October 1989 some warning had been given that revocation of S.104 was nigh, then Mr Parfitt could have maintained his position in one of two ways.  Either he could have given notice at an earlier stage, or he could have paid a lump sum by way of redundancy payment and made his claim before 16th January 1990.

	As S.104 was applying only to employers of less than 10 and, that was made abundantly clear in the wording of S.17 of the 1989 Act, it seems to the industrial members that merely to inform employers organisations was unlikely to ensure that information reached those who would be most affected by it.  If the information to employers organisations had been disseminated in October, why was Mr Parfitt not told?

	In the view of the industrial members it is clear that Mr Parfitt complied conscientiously with the procedure indicated to him by the Department of Employment.  The members have no doubt where the merits and the moral solution of this case lie, and wonder whether these facts fall within the jurisdiction of the Ombudsman.

	Whilst I sympathise and indeed agree with their views, it is important to stress that we are dealing with the law.  I was minded at one stage to seek the assistance of an amicus curiae, lest there existed some argument based on representation.  I had in mind such representations as the Inland Revenue concessions.

	We have however decided not to delay our judgment and to give Mr Parfitt leave to appeal.  Whether or not the Court of Appeal wish to seek assistance from an amicus is for them.  
	
	We are satisfied that upon a proper construction of the statutory provisions there is no power in the Secretary of State to pay the rebate claimed by Mr Parfitt.  It follows that we must allow the appeal and set aside the Order of the Industrial Tribunal.

	Leave to Appeal.