Precedent in the employment tribunal

by Laurie Anstis on June 27, 2012

One of the first things that any student of English law learns is the “doctrine of precedent“, which also applies in many other common law juridictions.

At its most basic, this is the idea that junior courts are bound by decisions on legal principles made by more senior courts – so the employment tribunal is bound by decisions of legal principle made by more senior courts, from the Employment Appeal Tribunal (EAT) upwards.

A decision of the EAT, published today, has made clear just how strict this rule can be.

In Packman v Fauchon, the employment tribunal had to decide whether a bookkeeper was entitled to a redundancy payment. Because of a downturn in her employer’s business, and the introduction of new accounting software, the employer found that it did not need the bookkeeper to work as many hours as she had been doing. It sought to persuade her to take a cut in her hours. She refused, and ultimately was dismissed because, whilst the employer still needed her to work some hours, it no longer needed her to work her full contractual hours.

By the time the case reached the EAT, the only issue was whether the employee was entitled to a redundancy payment.

In the case of  Aylward v Glamorgan Holiday Home Ltd, the EAT had considered a similar situation, concluding that this kind of situation couldn’t be a redundancy, because there was no need for fewer employees. The employer needed the same number of employees, but on shorter hours.

This decision of the EAT had been subject to analysis and criticism by Harvey on Industrial Relations and Employment Law, the leading employment law textbook, which said:

“… a reduction in hours does not per se give rise to a claim for a redundancy payment, because a reduction in hours does not as such constitute a dismissal.  If, however, the reduction of hours is achieved by way of dismissal, actual, constructive or otherwise, then the dismissal is by reason of redundancy, if and in so far as the reduction in hours demonstrates that overall the business now requires less work from its workforce.”

and concluded:

Aylward is therefore respectfully doubted.” (“respectfully doubted” being lawyer-speak for “wrong”)

Having considered the situation, the employment tribunal in this case preferred the analysis set out in the textbook (which it “respectfully shared and endorsed”) to the decision of the EAT in Aylward. It found that the employee was due a redundancy payment. 

When the EAT came to consider the Packman case, it too analysed the situation, and found that it agreed with the employment tribunal – the previous EAT decision in Aylward was wrong, and the textbook was right. It is rare for the EAT to disagree with one of its previous decisions, but the doctrine of precedent permits it to do this – albeit only exceptionally.

In the concluding paragraphs of his judgment, Langstaff P said:

“… we feel unable to follow the reasoning in Aylward, despite its persuasive effect. Applying the usual rules of precedent we cannot depart easily from a court of equivalent juridiction, but we are entitled to do so and for the reasons we have given we dismiss this appeal.”

But having agreed with the employment tribunal as to the outcome of the case and the appropriate legal principle, he went on to say:

“… the Tribunal was bound to follow applicable authority, that of Aylward, and should have done so whilst setting out its reasons for disagreement with that decision. A textbook is not of equivalent authority, however correct it may later be held to be.”

So whilst endorsing the tribunal’s ultimate decision, the EAT also gave the tribunal a telling-off, and a reminder that they should have followed the Aylward decision, even though the Aylward decision was later found to be wrong.

That’s the power of precedent …

2 comments

It’s a similar rule in my house. If I catch my son disobeying his mother, but I believe that she has been unduly harsh on him, the doctrine of “stare parentis” means that I must first tell him off for not doing as he was told, before completely countermanding (sorry, “respectfully doubting”) my wife’s decision.

by Mark Tarran on 28 June 2012 at 11:26 am. #