Appeal No. EAT/382/92

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 25 May 1994
	Judgment delivered on 14th June 1994

	Before

	THE HONOURABLE MR JUSTICE MORISON

	MR A C BLYGHTON

	MISS C HOLROYD

MORLEY COLLEGE	APPELLANTS

MRS J SUMMERS	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR A M FISHER
(SOLICITOR)
Messrs A M Fisher
41 Vine Street
LONDON EC3N 2AA	

For the Respondent	MR R A PATTEN
(SOLICITOR)
Messrs Edwards Geldard
St Michaels Court
St Michaels Lane
DERBY
DE1 3HQ

	MR JUSTICE MORISON:  Mrs Summers is a school teacher whose employment by Morley College ceased on 31 August 1990, due to redundancy.  Although she claimed that her dismissal was unfair, that complaint was withdrawn and the sole issue is whether she is entitled to a redundancy payment, as she alleges, or whether as the College maintain, she has less than two years continuous service and therefore does not qualify for such a payment.  

	Between September 1973, when she started teaching, until August 31 1989 Mrs Summers was employed as a teacher in a local authority school in Staffordshire and subsequently at such a school in Derbyshire.  Following the decision in the Court of Appeal in Gardiner v London Borough of Merton [1980] IRLR 472, dismissing an appeal from the EAT which held that service as a teacher in successive schools in different Local Education Authority ["LEA"] areas could not be aggregated, (because of the provisions of paragraph 18 of Schedule 13 to the 1978 Act and the definition of 'associated employer' in section 153(4) of the Act), Parliament made special provisions to deal with this apparent anomaly and injustice.  These provisions are contained in the Redundancy Payments (Local Government) Order 1983 which came into operation on August 14 1983 ["the Order"].  

	The Order applies in this way.  Where, immediately before any person is dismissed by reason of redundancy, such person was employed by one of the employers listed in schedule 1 to the Order, then for the purposes of determining entitlement to and calculating the amount of any redundancy payment the Order shall have effect.  

	It is common ground that the effect of these provisions is to enable Mrs Summers to aggregate the two successive periods of employment at those schools and that, therefore, when she started at Morley on September 1 1989 she had 16 years of continuous service.

	On commencement of her employment she was given a statement of the particulars of her employment which showed her as having commenced her employment in September 1973.  Morley was at that time a further education establishment mainly dependent for its maintenance on the ILEA and was, thus, an employer within paragraph 29 of the first Schedule to the Order which reads:
"The governing body of a further education establishment for the time being mainly dependent for its maintenance on assistance from local education authorities on grants under section 100(1)(b) of the Education Act 1944 or on such assistance and grants taken together."
  
	At that time, namely in 1989, Morley was funded mainly by ILEA, which was the LEA for Inner London.  ILEA was established  by section 18 of the Local Government Act 1985 and abolished by section 162 of the Education Reform Act 1988, as from April 1 1990.  Section 163 of the 1988 Act provided that on the abolition date, each Inner London council shall become the local education authority for its area, and references in the Education Acts 1944 to 1988 were to be construed accordingly.  

	Thereafter, the College was funded mainly by the London Residuary Body [LRB] as a result of a Direction made by the Secretary of State for Education  under section 176(1) of the Education Act 1988.  It is argued that as a result of the demise of ILEA and the new funding arrangement, Morley ceased to fall within paragraph 29 of Schedule 1, and thus, immediately before her dismissal she was not employed by an employer listed in Schedule 1 to the Order and the Order did not apply, and thus she was deprived of the right to add her service at Morley to the service she had accrued before she started work there.  Accordingly, so the argument ran, she did not have the requisite period of continuous employment to entitle her to any redundancy payment.

	After what might be described as a false start, an Industrial Tribunal held at London (South) on March 19 1992 decided that "the reality of the situation was that LRB acted in a similar way to a Local Education Authority" and therefore Morley College was mainly dependent for its maintenance from local education authorities, namely the LRB.  The IT declined to reach a conclusion on an alternative argument raised on Mrs Summers' behalf that if the LRB could not be treated as an LEA it was acting as agent of an LEA.

	That Decision was entered in the Register on Aril 24 1992 and the College appeals by a Notice of Appeal dated May 20 1992.

	The issue raised on this Appeal is a pure matter of construction of the relevant primary and subordinate legislation.  

	The submissions on behalf of the College may be summarised thus:

1.The finding by the IT that the LRB was a local education authority because it acted as such was wrong.  A LEA is defined in the legislation (section 114 of the 1944 Education Act) to mean a county or district Council.  What is a LEA is not to be discovered by looking at what bodies do but rather at what Parliament has determined are such authorities.  Parliament has imposed on every LEA certain specific duties including the duty to "secure the provision for their area of adequate facilities for further education".  The London Residuary Body was established to perform different functions, arising from the abolition of the GLC. 

2.It is clear from the face of the Direction that the LRB was to meet the cost of the grants it provided to Morley either from its own resources or by raising a levy on inner London Councils under section 185 of the Education Reform Act 1988.  Under that section LRB raises a levy, and the amount of it is paid by the councils in proportion to the population within their areas.  Thus, although without the Direction Morley would have been in the geographical area of Lambeth and Southwark Councils, those boroughs would have paid their proportionate amount regardless of the fact that the LRB had taken on the provision of education at Morley, which might have been a responsibility otherwise falling on them, and other Inner London Councils would have been bearing their proportionate part of the cost of maintenance as well.

3.By amendments which were made to schedule 1, in due course one of the other three educational establishments which were treated in the same manner as Morley was added to the list in Schedule 1.  That shows, so it was argued, that such an establishment could not both fall within paragraph 29 and within the new paragraph in which it was specifically named; therefore paragraph 29 could not apply to it and there is no distinction between that establishment and Morley.

	It is, to say the least, unfortunate that this case, which we are told is unique and cannot happen again unless the new funding arrangements are altered, should have caused the expenditure of so much costs.  There have been two hearings before the IT and a hearing before the EAT.  Each party has been represented by a solicitor.  Whilst, of course, parties are free to call on the services of the courts to resolve their disputes, there appears to us in this case to have been a certain element of lack of proportion.  No other person is affected by this Decision.  Mrs Summers was given to understand that she had continuity when she was first recruited by Morley and she may well have contractual claims which will equal her claims to the statutory payment.

	In our view, although we can appreciate the points made on Morley's behalf, the appeal cannot succeed.

	Section 176(1) of the Education Reform Act 1988 empowers the Secretary of State to make a direction requiring the LRB to provide "for the inner London councils" services or facilities which the ILEA were providing at the date of its abolition.  The direction which the Secretary of State made, under that section, required the LRB "to secure for the inner London councils in the period 1 April 1990 to 31 March 1993 the provision of education at ... Morley".  In order to secure that provision the LRB were directed to enter into an agreement with Morley to pay grants to it in support of the courses to be provided in the sum of £1,282,900.

	The language of the direction reflects the language of section 41 of the Education Act 1944 which was substituted by the Education Reform Act, namely

"It shall be the duty of every local education authority to secure the provision for their area of adequate facilities for further education."

Thus, the LRB were required to secure the provision of further education just as a LEA was required to do; they were doing it "for the inner London Councils" concerned; they were entitled to recover and did recover from those councils the cost of doing so; the LRB involved themselves directly with the provision of services at Morley, as their letter of 22 March 1990 makes clear.  We take the view that it cannot have been the intention of Parliament that Mrs Summers, or any other persons in a similar position to her, would be disadvantaged by the substitute funding arrangements.  The Order was made to get round the obvious injustices caused by a lacuna in the drafting of Schedule 13 of the 1978 Act.  If Mrs Summers had been dismissed in March 1990 instead of August 1990 she would recovered a redundancy payment.

	In our judgment, we would not be stretching the language of the Order too far were we to say, as we do, that the LRB was funding the provision of further education at Morley for LEAs and thus that the LEAs were maintaining Morley through the LRB.  In other words we conclude that the governing body of Morley was dependent for its maintenance on assistance from local education authorities (through the LRB).  It follows that we are not inclined to accept the IT's reasoning for arriving at the same conclusion.  We prefer to say that the LRB was not itself a LEA but rather that in funding Morley it was doing so for and on behalf of LEAs and thus Morley was being funded, indirectly, by the LEAs.

	As to the point about the eventual inclusion of one of the other three institutions in the list in Schedule 1, the facts relating to that were different because the LRB became the employers of the people working in that institution.  On our findings it would have been unnecessary to have included it by name in the Schedule.  However, with detailed and complex statutory provisions contained in subordinate legislation, an argument which says that such and such a provision would be otiose if a construction contended for were correct, can equally be met with the contention that the strictly unnecessary provision was inserted out of an abundance of caution.  It cannot have been thought at the time that paragraph 29 would not be appropriate to cover the other three institutions, including Morley, otherwise they would have been given a special mention at the same time as the list was being amended.

	Therefore we have come to the conclusion that the appeal should be dismissed.