clr/1989/1989_1_145.pdf

(2)of the English Employment Protection (Consolidation) Act, 1978 establishes a presumption that an '.employee's dismissalis due to redundancy, unless the contraryis proved—Moreover, the circumstances constituting redundancy in 20 England (Section81

(2)of thesame Act)differfrom those defined in section 18 of our Termination of Employment Law, 1967— Warningthatinderivingguidance fromdecisionsinEnglishcasesthe aforesaiddifferencesshould alwaysbe bom inmind. 15 25 The appellant was dismissed by his employers on the ground of «contraction ofworkorbusiness».However, theworkcarriedoutby him, never ceased and, after hisdismissal, itwasnot carried out by existing employees or independent contractors, but by new 145 Hadjlsawas v. RedundancyFund

(1989)employees employed shortly before or very shortly after his dismissal. The Industrial Disputes Court dismissed the appellants claim against the redundancy fund, stating, inter alia, that «redundancy exists when abusiness employs more employees than necessary». Hencethis appeal by way of case stated. The question 5 formulated for consideration by the Courtisquoted atp. 150 post. In its judgment the Court expounded the principles, which sufficiently appear in the headnote hereinabove. The Court distinguished the decisions in Scarth v. Economic Forestry Ltd.

(1973)1 ICR 322, NICR, and in Sutton v. Revlone Overseas 10 Corporation Ltd.

(1973)1 RLR 173, NIRC and criticized the IndustrialDisputesCourtforquotingapassagefrom theJudgmentof Lord Denning in Johnsons case, which gave unnecessarily to counsel for the appellant reason to complain. The Court finally concluded that the statement that «redundancy exists when a 15 business employs more employees than necessary» is correct, ifnot isolated from the whole tenor of the Judgment. It should not, of course,be taken tomeanthatnocases of statutory redundancy may be envisaged, fallingfor example underpara,(ii) of oursection 18(c), where, due to changes in the skills needed on the part of the 2 0 employees, some employees are dismissed and replaced by new employees possessing different skills.This question did not arise in the case of thepresent appellantbecause of theexpress reference to the contractionof thevolume of work madeintheemployers' notice of dismissal. 25 Appeal dismissed withcosts. Casesreferredto: In re HjiCostas

(1984)1C.L.R. 513; Stylianides v. Paschalidou

(1985)1C.L.R. 49; InReLouis TouristAgency Ltd.

(1988)1C.L.R.454; 30 Alouet Clothing Manufacturers Ltd. v. Athanasiou and Another,

(1988)1 C.L.R. 626; Johnson and Another v. Nottinghamshire Combined Police Authority [1974] 1All E.R. 1082; Scarth ν Economic ForestryLtd.

(1983)1ICR322, NIRC; Sutton v. Revlone Overseas Corporation Ltd.

(1973)1RLR 173, NIRC; 146 35 1 C.L.R. Hadjisawas v.RedundancyFund MacLaughlan v. Alexander Paterson Ltd.

(1968)SLT 377 (Ctof Sess); Rosiev.Watt

(1966)2ITR201,II. Case stated. 5 Case stated by the Judge of the Industrial Disputes Court relative to his decision of the 29th August, 1987 in proceedings undersection 16

(1)oftheTermination ofEmployment Law, 1967 (Law 24/67) instituted by Phivos Hji Sawa against the Redundancy Fund whereby applicant's claim for redundancy 10 payment was dismissed on the ground that his employment was notterminated on grounds of redundancy. G.Michanikos,forthe appellant. Chr.hannides, for the respondent. Cur.adv. vult. 15 SAWIDES J.: The judgmemt of the Court willbe delivered by Mr.Justice Boyadjis. BOYADJISJ.:Thisisan appeal byway of CaseStated against the decision of the Industrial Disputes Court in Application No. 105/86, whereby the claim of the applicant-employee for 20 redundancypayment from therespondent Fundwasdismissedon the ground that hisemployment was notterminated by reason of redundancy. The facts of the case asfound bythetrialCourt are as follows: Priorto March 16, 1974,the appellant wasinthe employment 25 of a certain A. Chilides as a mechanic in the letter's garage in Nicosia. On the date aforesaid he had been transferred by his employer to another garage in Nicosia owned and run by the company Paris Motors Agency Ltd., in which Mr.Chilides wasa directorandone ofthemainshareholders.Hetherespecialisedin 3C the repairof Citroen carsand atallmaterialtimeshehad become thebest,mostseniorandmostexperienced mechanic for Citroen cars in the employment of the said company. In 1982 he was named assistant to the man in charge of the garage. This was a rather honorary «promotion» made in appreciation of his 35 satisfactory services and did not entail any increase in his emoluments. He continued to work as a mechanic, training also hislessexperienced co-employees. Furthermore, he was helping 147 Boyadjis J.

(1989)Hadjisawas v. RedundancyFund Mr.Antonakis, the manin charge of thegarage, intesting the cars after their repair. On 6.5.1985the company re-employed theirformer employee Georghios Papadakis who had returned from abroad, where he had specialised inelectronics, andappointed himaco-manager of 5 the garage with the aforementioned Antonakis. Papadakis had better academic qualifications than the"appellant who was, however, a more experienced mechanic. On 20 July, 1985, the company addressed to the appellant a letter in the following terms: 10 «Μετά λύπης μου σαςπληροφορώ ότιλόγω ύφεσης στις δουλειές της Εταιρείας μας, η θέσις σαςως βοηθός υπεύθυνος στο Γκαράζ παύει να υ φ ί σ τ α τ α ι . Με βάση τον σχετικόν νόμον επιθυμούμεν να σας πληροφορήσουμεν ότι η υπηρεσία σας τερματίζεται 15 την 31ην Αυγούστου 1985. Σας ευχαριστούμεν δια την συνεργασίαν εις την Εταιρείαν μας». μέχρι σήμερον Translated in English, the letter reads as follows: «We regret to inform you that due to contraction in the 20 volume of work of our company, your post of assistant tothe person in charge of thegarage is abolished. Pursuanttotherelevant law we wishtoinform you thatyour employment isterminated on31st August. We thankyou foryour co-operationwith ourcompany until 25 to-day». The salary of the appellant at the time of the termination of his employment was £70 per week. On leaving his employment, he opened hisown garage inNicosia. In 1983 when the new BX models of Citroen cars were 30 imported in Cyprus, the volume of work in the garage had increased and continuedtoincrease steadily ever since.There was alwaysone expert on BX models inthegarage, namely Antonakis. After the re-employment of Papadakis on 6.5.1985, there were two experts in the garage onthe aforesaid BX models. 35 148 IC.L.R. Hadjisawas v. Redundancy Fund BoyadjisJ. On or about 15.8.1985 another mechanic employed in the garage, namely Charalambos Nicolaou gave notice to his employersvoluntarily terminatinghisemployment on31.8.1985, i.e. on the date when the termination of the appellant's 5 employment wasdue to take effect. With the contemporaneous termination of the employment of theappellantandCharalambosNicolaou,thecompanywas faced with the problem of lack of sufficient number of experienced mechanics in the garage. To meet their needs in this respect the 10 Company employed as mechanics a certain Georghios Georghiou asfrom 23.9.1985and a certain CostasMavronihisas from 30.9.1985.Theywereboth employed ata salaryof £40 per weekeach,increased to£45perweekonthesecond weekoftheir employment. The company had previously employed as a 15 mechanicanotheremployee, namelyNicosAntoniou,whomthey destined for their Limassol garage.His employment commenced on 29.7.1985, i.e. only nine days after they had given the appellant notice of termination of hisemployment on the ground of contraction of the volume of their work. The company did not 20 withdraw their aforesaid notice of termination of the appellant's employment when, on receiving the noticefrom their employee Charalambos Nicolaou, they realised that they would be shortof mechanics. One of the aforenamed new employees of the company, 25 namely Costas Mevronihis, terminated voluntarily his employmenton2.5.1986.Theotherthreemenarestillemployed inthe garage. . Having found the material facts as stated hereinabove, the trial Court concluded that, at the material time, the appellant's 30 employers were not faced with a state of redundancy entitling themtoterminatetheemploymentoftheappellantforthereasons stated in their notice. Inthe circumstances, the Court added, the appellant was not entitled to any redundancy payment from the Fund. Referring to the legal basis of itsdecision the Court stated 35 that,initsopinion, redundancyexistswhenanemployer employs inhisbusinessmore employees than necessary. Being aggrieved with the aforesaid decision, counsel filed a noticeofappealbywayofCaseStatedunderRule17oftheRules 149 Boyadjis J. Hadjisawas v. RedundancyFund

(1989)of Procedureset out intheAppendix totheArbitration Tribunal Regulations of 1968, which continuestobe inforce by virtueof section 7 of the Annual Holidays with Pay (Amendment)Lawof 1973 (Law No.5 of 1973). Pursuant to the aforesaid notice of appeal,thetrialCourtsubmittedfor thedecision of theSupreme Courtthefollowing legalquestion: 5 «To Δικαστήριο ερμήνευσε σωστά τις διατάξεις του άρθρου 16

(1)και 18{γ)(ι)(ιι)(ιν)(νιι) υπό το φως των πραγματικών περιστατικών που διαπίστωσε ότι περιβάλλουν και συνοδεύουν τον τερματισμό της 10 απασχόλησης του αιτητή. Πιό συγκεκριμένα ερωτούμε. Βάσει των γεγονότων που διαπιστώσαμε σωστά καταλήξαμε ότι δεν δικαιολογείται πληρωμή λόγω πλεονασμούστον αιτητή». Translated inEnglish thequestion readsasfollows: 15 «Whether the provisions of sections 16

(1)and 18(c)(i)(ii)(iv)(vii) of the Law were correctly construed inthe light of the facts found concerning the termination of the employment of the applicant. More particularly we ask whether,onthebasisof thefacts foundbyus,ourconclusion 20 that no payment to the applicant is justified on accountof redundancy,iscorrect». Counsel for theappellantsubmittedthatwe shouldanswerthe above question submitted to us in the negative. He began his attack on the decision of the trial Court by challenging some 25 findings made by the Court.Heabandoned hisattemptwhen it was pointed out to him that under paragraph

(4)of Rule 17 pursuant to which the present appeal was filed by way of Case Stated,theSupremeCourtisvestedwithpoweronlytodecidethe legal pointformulated by thetrial Courtand returnthecasetoit 30 togetherwith itsopinionthereon.Therewas noallegation inthis caseeither inthenoticeof appeal filedby theappellantorin the question (supra)asformulated bythetrialCourt,thattherewasno evidence atall on recordwarranting any of thefindingsmadeby the Court. The appellant is not entitled in the circumstances to 35 challenge thefindings of fact made by thetrial Court.See inthis respect:InReHjiCostas

(1984)1C.L.R.513;StratisStylianidesv. Phaedra Paschalidou

(1985)1 C.L.R. 49; InRe Louis Tourist Agency Ltd.

(1988)1 C.L.R. 454; and Alouet Clothing Manufacturers Ltd. v. Erini Athanasiou and Another,

(1988)1 40 C.L.R.

1. 150 • 1 C.L.R. Hadjisawas v.RedundancyFund BoyadjisJ. Counsel for the appellant further submitted that, on the factsas accepted by the Industrial Disputes Court, the case for the appellant fallsunder paragraphs (i),(ii),(iv)and (vii)of sub-section (c) of section 18 of the Termination of Employment Law, 1967, 5 taken eitherseparately orcumulatively,which read as follows: «
2. For the purposes of this Law, an employee is redundant when his employment has been terminated for reasons other than those specified in the first proviso tosubsection

(3)ofsection 16of thisLaw10 t (

1. a)(
2. b)'. (c)because ofanyofthefollowing otherreasons connected with the operation ofthe business: 15 (
3. i)modernization, mechanization or any other change in methods of production or of organization which reduces the number of employees necessary; (
4. ii)changes in products or production methods or in the skillsneeded on the part of employees; (iii) 20 .· (iv)marketing orcredit difficulties; (
5. v)(
6. vi)(vii)contraction ofthevolumeof work orbusiness». Though, there might in theory be envisaged cases where the 25 circumstances of an employer's business might fall in more than oneoftheparagraphssetoutinsection 18(c)above,an employee cannot be redundant within the meaning of the law unless his employment is terminated on account of the circumstance or circumstances set out in at least one of the aforementioned 30 alternative paragraphs of section 18(
7. c)of the Law, considered quite independently ot any omer paragraph, iheretore, it by submitting that the case of the present appellant falls within paragraphs (i), (ii), (
8. iv)and (vii), taken cumulatively, learned 151 Boyadjis J. Hadjisawas v.Redundancy Fund

(1989)counsel meant that, none of the above paragraphs, if examined separately, coversthecaseoftheappellant, itisan entirely wrong submission whichwereject.Weshall,therefore, examinewhether at least one out of the four paragraphs relied upon by appellant applies to the facts of thepresent caseas found bythe Court. 5 Para, (i)of section 18(c)clearlydoes notapply forthe following reason: Even if the allegation in the notice terminating the appellant's employment sent by his employers, that the post of assistant to the person in charge of the garage held by the appellant was abolished, were genuine, and even ifthe abolition 10 of this rather «honorary» post amounted to «modernization, mechanization oranyotherchange inmethodsofproduction orof organization», the change asaforesaid did not reduce the number of employees necessary,as expressly required inpara.(i). Para, (

1. ii)of section 18(
2. c)does not apply either, for the simple 15 reason that the trial Court never found that, concerning the operation ofthegaragebusiness,therehad occurred any changes in production methods or in the skills needed on the part of the employees. Nor is there any such allegation in the notice terminating the employment of the appellant whom the Court 20 foundtohavebeenthemostexperienced mechanicinthegarage. Para, (iv)ofsection 18(c)cannot possibleapply,sincetherewas never an allegation or finding that in terminating the appellant's employment, hisemployers acted byreason of any«marketing or credit difficulties». Contraction of the volume of work or businessisthereason set out in the notice terminating the appellant's employment, on accountofwhichtheterminationwassoughttobejustified. Itisthe reason set out in para, (vii) of section 18(c).Thisreason had not been substantiated in Court. In the present case, where the 30 appellant claims that he is entitled to payment of compensation from the Fund because his employment was terminated by reason of contraction of the volume of work or business in the garage where he was employed, the onuslay on the appellant to showthatsuchcontraction wasthemainreasonofhisdismissalby 35 his employers. The law in Cyprus differs in this respect from the law applied in England where, under section 91

(2)of the Employment Protection (Consolidation) Act 1978, an employee whohasbeen dismissedbyhisemployer,shall,unlessthecontrary is proved, be presumed to have been dismissed by reason of 40 152 25 1C.L.R. Hadjisawas v.Redundancy Fund BoyadjisJ. redundancy. It is enough for the employee to allege that his dismissal arose from a redundancy situation for section 91

(2)to operate and throw the burden of proof upon the employer to rebut the presumption of redundancy. No similar presumption 5 exists in our law and, like in all other civil matters, it is for the person who alleges a matter to establish the facts upon which his allegation isbased. In the case of the present appellant the trial Court found that at the material time of the termination of the appellant'semployment therewasanincreaseandnota reduction 10 ofthe garagebusinesswhichledtheemployers toemploy atleast three other mechanicstocope with the volume of work. Relying on the fact that: (a) referring to the legal principle applicable in this case, the trial Court said that a redundancy situation existswhen atthematerialtimeabusinessemploysmore 15 employeesthan necessary;and (b)thetrialCourtappearsto have been guided in itsdecision, inter alia, bycertain extractsfrom the judgment of Lord Denning in Johnson and Another v. Nottinghamshire Combined Police Authority [1974] 1 All E.R. 1082, counsel submitted that the trial Court misdirected itself in 20 law in view of the fact that the facts in Johnson case (supra) are clearly distinguishable from the facts of the present case and, therefore, what Lord Denning had said in that case has no application inthe present case, and alsobecause the decisionsin Scarth v.Economic ForestryLtd.

(1973)1ICR322,NIRC,andin 25 Sutton v. Revlone Overseas Cor Ltd.

(1973)IRLR 173, NIRC, showthataredundancy can occureven though thetotaloutputof workdoesnotdiminish.Counsel alsosubmitted thatthe decisions inMacLaughlan v.AlexanderPaterson Ltd.

(1968)SLT377{Ctof Sess), and Rosie v. Watt

(1966)2 ITR 201, II, show that a 30 redundancy situation mightariseeven ifthedismissed employees are replaced byothers.Italldepends,counseladded, onthekind ofworkthatthe new employee isasked to perform. Generally speaking, in deriving guidance from decisions in English cases on matters of redundancy, the Courts in Cyprus 35 must always bear in mind that, apart from the fact that the presumption under section 91

(2)of the English Act of 1978, to which we have already referred, does not apply in Cyprus, the circumstancesthatconstituteredundancyinEnglandasdefinedin section 81

(2)of the Employment Protection (Consolidation) Act 40 1978differ from thosedefined insection 18ofourTerminationof Employment Law, 1967.Adismissal by reason of redundancy is 153 BoyadjisJ. Hadjisawas v.Redundancy Fund

(1989)taking place in England if the dismissal is attributable wholly or mainlyto: (a)thefactthatthe employerhasceased, orintendstocease, to cany on the business for thepurpose ofwhich the employee was employed byhim; or hasceased, or intendstocease, to carry on 5 that business in the placewhere the employee wasso employed; or (b)thefact oftherequirementsofthatbusinessforemployeesto carry out work of a particular kind in the place where he was employed, haveceased ordiminished, orareexpectedtoceaseor 1Q diminish. The decisions in Scarth (supra) and Sutton (supra), cited by counselfortheappellant,turnedontheconstruction oftheEnglish section 81

(2)(b)(supra).InScarth,theemployeewasengagedasa timber manager. In order to reduce their expenditute the 15 employers decided thattheservicesof atimbermanager were no longer necessary and that hiswork could be carried out by other employees or bysub-contractors, even though itwasnot proposed to reduce the number of trees being cut. It was held that a redundancy did occur though the total output of work had not 20 diminished. Sutton case (supra), where the applicant Sutton was employed as chief accountant of the company's plant in South Wales, was decided on a similar reasoning. Mr.Sutton had been dismissed following a major reorganisation of the administrative and financial structure of the company, leaving no need for the 25 post of chief accountant whose work had been redistributed amongst his three subordinates. It was held that Mr. Sutton's dismissal occurred byreason of redundancy sincethe employer's requirements for a separate and additional employee to perform the particular work of a chief accountant had ceased. ^0 ThedecisionsinScarth(supra)and Sutton (supra)are discussed inColin Bourn'sRedundancy Lawand Practice, 1983Edn., para. 6.27 under the heading «A reduction in the requirements for employees» where they are mentioned as examples of the „ following principle atp.133: «A dismissal by reason of redundancy occurs under s.81{2)(b) where the employer's requirements for employees to carry out work of a particular kind has ceased or disminished. Itisnotnecessaryfortheamountofworktohave declined.Statutoryredundancy isnotconfinedtosituationsof 40 154 1C.L.R. Hadjisawasv.RedundancyFund BoyadjisJ. economic retraction but encompasses economy measures or other improvements in efficiency, which bring about a reduction in the number of employees who are required to perform a particulartask ...» 5 The cases of Scarth (supra) and Sutton (supra) are clearly distinguishableontheirfactsand theissuestherein raised from the case of the present appellant where the ground for his dismissal givenbyhisemployers intheirnoticeterminatinghisemployment wasthat hispost of assistant to the person incharge ofthe garage 10 was abolished due to contraction in their volume of work, something that the Court had not accepted. The duties of the appellant before and after 1982 when he was named assistant to the person in charge of the garage, were essentially the same, those of an experienced-mechanic. The needs of the appellant's employers for employees to carryout theparticular kind of work 15 whichtheappellanthadbeen employedtocarryneverceased and after his dismissal the appellant's work was not carried out by existing employees or independent contractors but by new employees whowere employed eitherveryshortlybefore orvery shortlyafter he had been dismissed. 20 Johnson's case (supra) cited by the trial Court is surely not directly relevant here and we do not think that the passages from thejudgment of Lord Denning set out in thejudgment of thetrial Courtare of any real assistance indetermining the issuebefore it. They have given, unnecessarily, to counsel for the appellant 25 reason to complain and argue against thejudgment given against his client. Irrelevant for the same reasons are also the other two decisionsrelied upon byMr.Michanikosfortheappellant, namely, MacLaughlancase (supra)and Rosie case (supra).Thedecisionin the first of these cases turned on whether the mere fact that the 30 dismissed employeehadbeen replaced wassufficient evidence to rebut the presumption of redundancy operating in England in favour of the dismissed employee. It was held that, though a crucial piece of evidence in such cases would be whether or not theemployee had been replaced,suchreplacement wouldnot be 35 sufficient evidence torebutthepresumption where the employer hadgiventheemployeeatestimonialpraisinghisworkand stating that the only reason for his dismissal was redundancy. The decisioninthesecond caseRosie v.Watt(supra)isofnoassistance tothe appellant. Apart from anything else,beingadecision taken 40 in the early days by majority of the tribunal, with which its legal 155 BoyadjisJ. Hadjisawas v. Redundancy Fund

(1989)chairman had dissented, wasnotconsidered correctly decided by the Court ofAppeal inJohnson (supra). 'Vewould liketo conclude bysayingthat the trialCourt did not misapply the law to the facts which it had accepted. The statement by the Court that «redundancy exists when a business 5 employs more employees than necessary», on which counsel for appellant relied to found his argument that the Court misconceived the law is, in our view, correct ifnot isolated from the general tenor of the Court's judgment and with reference to the factual situation in connection with which it was stated. It 10 should not, of course, betaken tomean that no cases ofstatutory redundancy maybe envisaged, fallingforexample under para,(ii) ofoursection 18(c),where,due tochangesintheskillsneeded on the part of the employees, some employees are dismised and replaced by new employes possessing different skills. This 15 question did not arise inthecase ofthepresentappellant because of the express reference tothe contraction of the volume of work of the garage made in the employer's notice of termination of appellant'semployment asbeingthereasonforsuch termination. Whatwe have stated hereinabove constitutes ouranswertothe 20 single question posed for our consideration and decision and we remit the case back to the Industrial Disputes Court for the necessary action. Our answer is in fact a confirmation of its decision. Forallthe above reasons the appeal isdismissed with costs. Appeal dismised withcosts. 156 25