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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Housing Services Agency v Cragg [1997] UKEAT 460_96_1103 (11 March 1997) URL: http://www.bailii.org/uk/cases/UKEAT/1997/460_96_1103.html Cite as: [1997] UKEAT 460_96_1103

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APPEARANCES

 

For the Appellants	MS J BROWN (of Counsel) Judith Barnes Solicitor 4B Raveley Street London NW5 2HU
For the Respondent	MR J BOWERS (of Counsel) Mr D Chalder UNISON 1 Mabledon Place London WC1H 9AJ


 


JUDGE PETER CLARK: This is an appeal by the employer, Housing Services Agency, ["the appellant"], against a decision of the London (North) Industrial Tribunal sitting on 6th March 1996, that the employee, Mr Cragg, ["the respondent"], was entitled to a redundancy payment of £1,640. Extended reasons for that decision are dated 18th March 1996.

The issue before the Industrial Tribunal, and before us, is whether the respondent agreed to waive his right to a redundancy payment under the provisions of what is now s.197 of the Employment Rights Act 1996 ["ERA"].

The facts

These were not materially in dispute.

On 6th April 1987 the respondent commenced employment with the appellant. His first written contract of employment, under which he was employed as a Housing Management Worker, was signed by the respondent on 19th April 1988 and on behalf of the appellant on 29th March 1988. It was not a fixed term contract.

In September 1990 he was seconded to set up a private sector leasing scheme which was to be funded by the Government on a three year basis. He then successfully applied for the post of team manager of the scheme and was appointed to that post in March 1991.

No new contract was then issued, but on 28th March 1991 he signed a document headed:

"AGREEMENT TO WAIVE RIGHT TO CLAIM UNFAIR DISMISSAL AND REDUNDANCY PAY UPON TERMINATION OF FIXED-TERM CONTRACT OF EMPLOYMENT"

The document continued:

"I acknowledge that I am employed by Housing Services Agency Ltd for a fixed term commencing on 18.3.91 and terminating on 17.3.92, and I hereby agree to waive my right to claim unfair dismissal or redundancy pay when the contract comes to a close."

After about four months the respondent applied for his contract to be reviewed and extended.

The parties entered into a new written contract in December 1991 ["the fixed term contract"].

Clause 4 provided:

"4. APPOINTMENT AND TERMINATION OF APPOINTMENT

You are employed under a fixed term contract commencing on 18/3/91 and terminating on 31 December 1993 the latter date being your last day of service. An unfair dismissal waiver operates in respect of this contract (copy attached)."

On 18th December 1991 the respondent signed that contract and also a further waiver agreement similar to that dated 28th March 1991, substituting the dates, by reference to the contract itself, 18/3/91 to 31/12/93.

By letter dated 25th November 1993 the appellants wrote to the respondent stating:

"Dear Tony

EXTENSION OF FIXED TERM CONTRACT

I am writing to confirm that your contract has been extended until the 31st March 1994. All other terms and conditions will apply.

Attached you will find two copies of HSA's Fixed Term Contract's Unfair dismissal Waiver; please sign and return one copy to Personnel."

On 2nd December 1993 the respondent signed the appellant's standard form waiver agreement to cover the period 1 January 1994 to 31 March 1994.

A similar letter was written by the appellant to the respondent on 29th March 1994 confirming that his contract had been extended until 30th September 1994.

On 6th April 1994 the respondent signed the appellant's standard waiver form, acknowledging that he was employed for a fixed term commencing on 1st April 1994 and terminating on 30th September 1994.

On 2nd September 1994 the appellant wrote confirming a further extension of the contract to 31st March 1995, all other terms and conditions applying. On the same date the respondent signed the usual waiver form, covering the period 2 September 1994 to 31 March 1995. Finally, on 6 March 1995 the appellant wrote confirming a further extension of the contract to 30 June 1995 and the respondent signed the usual waiver form covering that period.

The employment ended on 31st March 1995 when funding for the scheme finished. He claimed a redundancy payment which was refused by the appellant on the grounds of waiver. He complained to an Industrial Tribunal on 27th September 1995, claiming a redundancy payment only.

The current legislation

The following provisions of ERA are principally material:

(1) Dismissal:

For present purposes the material definition of dismissal for both unfair dismissal claims (s.95(1)(b)) and redundancy claims (s.136(1)(b)) is the same:

"... an employee is dismissed by his employer if (and only if)-

he is employed under a contract for a fixed term and that term expires without being renewed under the same contract;"

(2) No contracting out:

S.203 provides:

"203 Restrictions on contracting out

(1) Any provision in an agreement (whether a contract of employment or not) is void in so far as it purports-

(a) to exclude or limit the operation of any provision of this Act, or

(b) to preclude a person from bringing any proceedings under this Act before an industrial tribunal.

(2) Subsection (1)-

...

(d) does not apply to any provision of an agreement relating to dismissal from employment such as is mentioned in section 197(1) or (3),"

(3) Fixed term contract waiver agreements:

S. 197 provides, so far as is material:

" (1) Part X does not apply to dismissal from employment under a contract for a fixed term of one year or more if-

(a) the dismissal consists only of the expiry of that term without its being renewed, and

(b) before the term expires the employee has agreed in writing to exclude any claim in respect of rights under that Part in relation to the contract.

...

(3) An employee employed under a contract of employment for a fixed term of two years or more is not entitled to a redundancy payment in respect of the expiry of that term without its being renewed (whether by the employer or by an associated employer of his) if, before the term expires, the employee has agreed in writing to exclude any right to a redundancy payment in that event.

(4) An agreement such as is mentioned in subsection (1) or (3) may be contained-

(a) in the contract itself, or

(b) in a separate agreement.

(5) Where-

(a) an agreement such as is mentioned in subsection (3) is made during the currency of a fixed term, and

(b) the term is renewed,

the agreement shall not be construed as applying to the term as renewed; but this subsection is without prejudice of the making of a further agreement in relation to the renewed term."

(4) Renewal:

By s.235(1):

" "renewal" includes extension, and any reference to renewing a contract or a fixed term shall be construed accordingly,"

The legislative history

It is important to appreciate the legislative background leading to the ERA.

Redundancy Payments Act 1965 ["RPA"]

S.3(1)(a) defines dismissal in the same terms as s.136(1)(b) of the ERA.

S.15(2)-(4) are re-enacted in s.197(3)-(5) of the ERA.

The definition of 'renewal' in s.56(1) is now to be found in s.235(1) of ERA.

The restriction on contracting out in s.25(4) and (5)(b) is repeated in s.203(1) and (2)(d) of the ERA.

Industrial Relations Act 1971 ["IRA"]

The material definition of dismissal (now s.95(1)(b) of the ERA) was to be found in s.23(2)(a).

S.30 provided:

"30 Exclusion of certain contracts for a fixed term

Section 22 of this Act does not apply-

(a) to dismissal from employment under a contract for a fixed term of two years or more, where the contract was made before the commencement of this Act and is not a contract of apprenticeship, and the dismissal consists only of the expiry of that term without its being renewed, or

(b) to dismissal from employment under a contract for a fixed term of two years of more, where the dismissal consists only of the expiry of that term without its being renewed, if before the term so expires the employee has agreed in writing to exclude any claim in respect of rights under that section in relation to that contract."

'Renewed' is not defined in the definition section (s.167).

Trade Union and Labour Relations (Consolidation) Act 1974 ["the 1974 Act"]

S.30(b) of IRA was re-enacted in paragraph 12(b) of Schedule 1 to the 1974 Act.

Employment Protection (Consolidation) Act 1978 ["the 1978 Act"]

Dismissal is defined in s.55(2)(b) in identical terms to the earlier Acts.

The restriction on contracting out is contained in s.140.

Ss.30(b) IRA and 15(2)-(4) of RPA are consolidated into s.142. S.30(b) IRA become s.142(1) and s.15(2)-(4) RPA became s.142(2)-(4).

'Renewal' is defined in s.153(1) in the same terms as s.56(1) of the RPA.

Employment Act 1980 ["1980 Act"]

S.8(2) substituted one year for two years in s.142(1) of the 1978 Act. ["Unfair dismissal waiver"].

The earlier cases

During the course of argument Ms Brown described the state of the authorities on this topic as confused. We accept that submission. It is necessary to analyse the reasoning in each of the cases. We shall consider them chronologically.

Iannou v BBC [1975] ICR 267 (CA)

Mr Iannou commenced employment with the BBC on 7th August 1967 under a written contract expressed to expire on 6th August 1970 unless previously determined or renewed by mutual agreement. On 6th January 1970 the BBC wrote to Mr Iannou expressing a wish to renew the contract for a further period of two years after 6th August 1970. He wrote to accept the amendment and extension.

Finally on 8th August 1972 the BBC wrote to him again offering a further year's contract to take effect from 7th August 1972. The contract document enclosed contained for the first time a waiver clause excluding his right to claim unfair dismissal or a redundancy payment in the event of non-renewal or non-extension of his engagement when the term expired.

There was no renewal after 6th August 1973. He complained to an Industrial Tribunal of both unfair dismissal and entitlement to a redundancy payment.

The BBC took the preliminary point that Mr Iannou had contracted out of his rights under both IRA and RPA. The Industrial Tribunal rejected that contention. It held that the form of the final contractual documentation differed from the initial three year and subsequent two year contracts, in particular by the addition of the waiver clause, and that the BBC could rely only on the final one year contract. Since that was for a fixed term of less than two years the plea failed.

The BBC appealed to the NIRC [1974] ICR 414. The issue before the NIRC was whether or not the BBC could aggregate all three contracts so as to arrive at a fixed term contract for six years, and to fall within s.30(a) IRA and s.15(2) RPA.

The NIRC rejected the appeal, holding that the third contract amounted to a re-engagement on different terms and not a renewal of the earlier contracts. It left open the question whether a renewal under s.15(4) RPA required a renewal for a period of at least two years.

In the Court of Appeal the case took a new turn. It was argued on behalf of Mr Iannou by Counsel not instructed below that since each contract was terminable on three months notice there was no fixed term contract. That argument appealed to their Lordships who unanimously accepted it. The appeal was dismissed on that ground, we see from the headnote approved by the Judges. See [1975] ICR 267, 268 A-C. and [1975] 1QB 781, 782 B-C.

However, the judgments deals also with the original argument. Two of their Lordships, Stephenson and Geoffrey Lane LJJ, held that the third contract was not a renewal of the earlier contracts but a re-engagement. It was a new contract for one year. Hence the BBC could not in any event rely upon a fixed term contract for six years.

Lord Denning MR took a different approach. He summarised his view at [1975] ICR 272 F-H:

"I do not think it necessary in these cases to inquire whether there is a "renewal" of a previous contract of employment or a "re-engagement" under a new contract of employment. That is too fine a distinction for ordinary mortals to comprehend. Suffice it to say that you must always take the final contract which expires, and on the expiration of which he claims redundancy payment or compensation for unfair dismissal. If the final contract is for a fixed term of two years or more, it is permissible for the employee in writing to agree to exclude his rights, so long as he does it before the term expires. If the final contract is for less than two years, as for instance for a fixed term of one year, then he cannot exclude his right. It matters not whether the final contract is a renewal or re-engagement. It is the final contract alone which matters in this regard. If more than two years fixed, he can contract out of his rights. If less that two years he cannot. It is expressly so provided in section 15(4) of the Redundancy Payments Act 1965, and it is implicit in section 30(b) of the Industrial Relations Act 1971."

For completeness we note that, like Sir John Donaldson P in the NIRC, both Stephenson and Geoffrey Lane LJJ declined to express any view on the need for a renewal under s.30(b) IRA and s.15(4) RPA to be for a period of two years or more. [1975] ICR 274 F-G; 275G.

The principal finding in Iannou, that a notice provision is inconsistent with a fixed term contract came before the Court of Appeal for further consideration in Dixon v BBC [1979] ICR 281. The point arose in the context of dismissal under what was then s.5(2)(b) of Schedule 1 to the 1974 Act (formerly s.23(2)(a) IRA). On that occasion the Court simply held that it had been wrong in Iannou and overruled the holding in that case that a notice provision was inconsistent with a fixed term contract.

Lord Denning MR, who also sat on the Court hearing Dixon, put the matter in this way at 284H-285H:

"In British Broadcasting Corporation v. Ioannou [1975] I.C.R. 267 Mr. Ioannou was employed for three successive periods: first for three years, followed by two years, and lastly by one year. Each contained a term that it was determinable by three months' notice.

One ground for decision was that the only relevant period was the last period of one year. That was less than two years. So section 30 of the Industrial Relations Act 1971 which corresponded to paragraph 12 of Schedule 1 to the Act of 1974 did not apply. Section 22(1) of the Act of 1971 which corresponded in its opening words to paragraph 4 of the Act 1974 applied. So Mr. Ioannou was "dismissed" and could claim compensation for unfair dismissal.

The other ground of decision was that a "fixed term" is one that cannot be unfixed by notice. To be "fixed term" the parties must be bound by the terms stated in the agreement; and unable to determine it by notice on either side. Assuming, therefore that Mr. Ioannou's contract was for six years, it was not a "fixed term" because it could be determined by three months' notice.

That second ground had not been taken in the courts below. It was taken by this court itself. Now after further consideration, I desire to say at once that that second ground was mistaken. It was a wrong ground. We did not in that case refer to section 23(2)(b) of the Act of 1971 which corresponded to paragraph 5(2)(b) of Schedule 1 to the Act of 1974. If we had done so, we should have held that a "fixed term" is sufficiently satisfied if the contract is for a specific stated period, even though it is determinable by notice within that period.

...

Seeing that the second ground of decision in Ioannou's case [1975] I.C.R. 267 was erroneous, I think we can depart from it. As I have often said, we are not absolutely bound by a previous decision of this court. As any rate, we are not bound when two grounds are given for a decision of this court: and afterwards, on investigation, it is found that one of them is right and the other is wrong. The case is then of authority for the correct ground and not for the ground which is shown to be incorrect."

Open University v Triesman [1978] ICR 524 (EAT)

On 12th November 1974 Ms Triesman was offered the post of lecturer at the Open University ["OU"] for a fixed period of 18 months starting 1st December 1974. She accepted that offer and commenced employment. On 8th March 1976 OU offered further employment for seven months commencing on 1st June 1976, upon terms under which she agreed for the first time to waive her unfair dismissal and redundancy payment rights. She accepted the offer and continued working until 31 December 1976 when the contract expired without being renewed.

On 4th April 1977 she presented a complaint of unfair dismissal and a claim for a redundancy payment to an Industrial Tribunal. The tribunal found that her unfair dismissal complaint was time-barred, and this finding was upheld by the Employment Appeal Tribunal.

As to the question of exclusion from the right to a redundancy payment, the Industrial Tribunal held that the second seven month contract was not a renewal of the first 18 month contract because it contained a new term, that is the waiver clause. The employee was entitled to a redundancy payment.

The Employment Appeal Tribunal upheld that finding on two grounds. First, Phillips J accepted and applied the dictum of Lord Denning MR in Iannou, not because the Employment Appeal Tribunal was bound by it (527G-528B) but because it agreed with the approach of taking the final contract only. In particular, Phillips J answered the question left open by the NIRC and the Court of Appeal in Iannou by holding that the renewed term referred to in s.15(4) RPA must mean renewal for a term of two years or more (528H-529E).

The alternative ground for decision was that the second contract was a new contract and not a renewal (529G-530A), and therefore OU failed the two year fixed term contract test.

BP Oil Limited v Richards (EAT/768/82 - 12th April 1983 - Unreported) (EAT)

This was an unfair dismissal claim only, brought by Miss Richards against her former employers, BP, in the following circumstances.

On 10th March 1978 she was offered and accepted employment for a fixed period from 10th April 1978 to 5th April 1980; just under two years. By Clause 4 the contract contained an exclusion clause waiving unfair dismissal and redundancy payment rights.

On 30th April 1979 BP offered an amendment to the existing contract, whereby it would continue until 30th April 1981.

On that date she was offered a further extension of the contract to 30th April 1982.

The provisions of Clause 4 were expressly incorporated into both the 30th April 1979 and 30th April 1981 agreements.

Before the final extension of 30th April 1981 the amendment to s.142 of the 1978 Act effected by s.8(2) of the 1980 Act had come into force. For the purposes of unfair dismissal waiver the fixed term contract could now be for one year or more not two years.

The Employment Appeal Tribunal considered Iannou and Triesman and concluded "as a matter of comity and in the interests of orderly industrial relations" it was undesirable to depart from the Triesman case and therefore it was the last contractual arrangement which should be considered.

Having done so, the Employment Appeal Tribunal concluded, contrary to the finding of the Industrial Tribunal, that the unfair dismissal claim was excluded by the agreement of 30th April 1981.

Mulrine v University of Ulster [1983] IRLR 545 (NICA)

This was a claim of unfair dismissal only brought by Ms Mulrine against her former employers, the University of Ulster ["UU"] under Article 20 of the Industrial Relations (Northern Ireland) No. 1 Order 1976 ["the Order"], the equivalent to the right not to be unfairly dismissed under what was then s.54 of the 1978 Act (now s.94 ERA). Article 25(b) of the Order was in the same terms as s.142(1) of the 1978 Act after its amendment by s.8(2) of the 1980 Act.

The facts were that her initial appointment was for a period of two years from 7th September 1987 as a training and development officer. The contract contained both unfair dismissal and redundancy waiver clauses.

On 28th July 1989 UU wrote to the employee offering to extend her contract until 31st December 1989 on the same terms, including the waiver, as before. She accepted. Following expiry of the contract without renewal on 31st December 1989 she brought her complaint of unfair dismissal.

The Northern Ireland Court of Appeal ["NICA"], hearing an appeal by way of case stated from the Industrial Tribunal (there being no Northern Ireland Employment Appeal Tribunal) which had found that her right to bring the claim was excluded by agreement, identified the issue as being whether Ms Mulrine was engaged under an extension of her original two year fixed term contract, or under a new short-term contract for four months.

Having considered the earlier English cases to which we have referred, the NICA declined to follow them, holding that the "final contract" test propounded by Lord Denning MR in Iannou and followed in Triesman and BP ought not to be applied where it would produce an "unfair and unreasonable result". In such circumstances it was thought necessary to return to ask whether the second contract was an extension of the first. (per MaCDermott LJ, para.31).

Having asked that further question the Court decided that the second contract was an extension of the first, and that the employee was excluded from the right to bring a claim of unfair dismissal.

The doctrine of precedent

In this case Mr Bowers, on behalf of the respondent, espouses the "English cases" and Ms Brown relied on Mulrine. Are we bound to follow either approach in its entirety?

English Court of Appeal

Plainly we are bound by the ratio decidendi of an earlier case in the English Court of Appeal.

However, the ratio in Iannou, later overruled in Dixon, was that the presence of a notice provision in a contract of employment precluded that agreement from being a fixed term contract. We shall, of course, follow the binding authority of Dixon on this point.

As to the "final contract test" propounded by Lord Denning MR in Iannou, we respectfully adopt the view of Phillips J in Triesman. That did not form part of the ratio in Iannou, as is plain from the headnote. In any event, the two remaining judges, Stephenson and Geoffrey Lane LJJ, did not concur with Lord Denning MR on that point. On the contrary, they looked to distinguish a renewal from a re-engagement (fresh contract) in relation to the last contract. We accept Mr Bowers' submission that Lord Denning MR was seeking to rewrite history when he said in Dixon that having overruled Iannou on one ground (the notice point) that case remained authority for the other ground of decision - that the only relevant period was the last period of one year. See [1979] ICR 285A. Nevertheless, any opinion given by the Court of Appeal, even if strictly obiter, merits the greatest respect.

Employment Appeal Tribunal

The past practice of the Employment Appeal Tribunal has been to follow its earlier decisions, not as matter of binding authority but "comity", as Browne-Wilkinson P put it in BP (Transcript. 5F).

The position was so stated by Phillips J in Wilson v Maynard Shipbuilding [1977] ICR 112, where he felt obliged to follow the earlier Employment Appeal Tribunal decision in Portec (UK) Ltd v Mogensen [1976] ICR 396, (Bristow J presiding) and if that decision was wrong it would have to be put right by the Court of Appeal. It was. See Wilson [1978] ICR 376.

Mr Bowers urges us to follow that approach, even if we disagree with all or any of the reasoning on point in Triesman and BP.

We decline to do so. The current practice is reflected, by way of example, in Tsangacos v Amalgamated Chemicals Ltd [1997] IRLR 4, where a division of this appeal tribunal (Morison P presiding) disapproved an earlier Employment Appeal Tribunal decision on the same point in Mobb v Nuclear Electric PLC [1996] IRLR 536.

As we are not bound to follow earlier Employment Appeal Tribunal decision we prefer to be correct on this occasion rather than consistently wrong. Further, as Ms Brown points out, her clients do not wish to go to the Court of Appeal over a claim for £1,640. They ask us to determine this appeal according to law. We propose to do so, whilst giving the greatest weight to the judgments of our predecessors in Triesman and BP.

NICA

Ms Brown submits, and we accept, on the authority of In re Hartland [1911] ICL 459, that decisions of the Irish courts are not binding upon us although entitled to the highest respect. Further, we should follow the unanimous judgment of the higher Irish court where the question is one which turns upon the construction of a statute which extends to both the English and Irish jurisdictions.

The earlier cases revisited

In the absence of binding authority it would be almost impossible, as a matter of weight, to know which highly persuasive line of authority to follow. We have therefore adopted an independent approach to the issues raised, regarding ourselves solely bound by the statute. We confess that causes us no discomfort, since in our judgment each of the earlier cases overlooks two important features:

(1) that there is a difference between the provisions relating to unfair dismissal and redundancy payment waiver agreements, and

(2) the statutory definition of "renewal".

The correct construction of s.197 ERA

A. Unfair dismissal waiver:

The following requirements must be met;

(1) there must be a fixed term contract. It is immaterial that it contains a notice provision (Dixon).

(2) it must be for a term of one year or more. It is not permissible to aggregate successive fixed terms so as to amount to one year or more.

(3) there must be a term of the contract, or separate agreement (s.197(4)) entered into before the expiry of the fixed term excluding the right to claim unfair dismissal. No question of consideration arises in a contractual sense. It is sufficient that there is an agreement made between the parties in writing to that effect.

(4) if dismissal, consisting of the expiry of the fixed term without its being renewed (on the same terms)(s.95(1)(b); s.197(1)(a)) occurs, the employee is excluded from the right to bring a complaint of unfair dismissal under s.94(1).

(5) if there is no dismissal under A(4) above, the parties must start again. Whether by renewal or re-engagement, if the employment continues for a further fixed term that must be for a term of one year of more, and there must be a waiver agreement complying with s.197(4) entered into before the expiry of the new term (s.197(1)(a)).

Pausing here, we accept the final contract test propounded by Lord Denning and followed in BP in so far as it relates to unfair dismissal waiver. Questions of renewal and re-engagement are not too difficult, they are simply irrelevant when considering unfair dismissal waiver.

We decline to follow Mulrine as authority for unfair dismissal waiver. As we shall shortly demonstrate, Mulrine would have been correctly decided had the applicant's claim been for a redundancy payment under the equivalent Northern Ireland legislation. Further, we reject the test of looking to see whether the final contract test would produce an unfair and unreasonable result. That question arises if at all where there is no valid exclusion under s.197 (or its Irish equivalent) and the case proceeds to a hearing on the merits of the unfair dismissal claim. See Terry v East Sussex County Council [1976] ICR 536; affirmed North Yorkshire County Council v Fay [1986] ICR 133 (CA). The only question, in our judgment, is whether the contractual arrangements comply with the statute. If not, the Industrial Tribunal has jurisdiction to entertain the complaint.

B. Redundancy payment waiver

(1) There must be a fixed term contract as in A(1) above.

(2) it must be, in the first instance, for a term of two years or more. It is not permissible to aggregate successive fixed terms so as to amount to two years or more.

(3) before the expiry of the fixed term under (2) above the parties must enter into a waiver agreement as defined in s.197(4) (see A(3) and s.197(3).)

(4) if dismissal, consisting of the expiry of the fixed term without its being renewed (on the same terms) (s.136(1)(b); s.197(3)) occurs, the employee is excluded from the right to bring a claim for a redundancy payment under s.135(1).

(5) if there is no dismissal under (4) above because either the contract is renewed or he is re-engaged on different agreed terms (see s.138) then, if the original fixed term is renewed for a further fixed term (see s.235(1)), whether for a period of two years or less, and during that extended term the parties enter into a s.197(4) waiver agreement, then dismissal arising out of the expiry of the original fixed term as extended will not give rise to a claim for a redundancy payment (s.197(3) read with (5)).

It is the proposition B(5) which we think requires further explanation in the light of the earlier cases. Our reasoning is as follows:

(1) The Court of Appeal in Iannou failed to distinguish between unfair dismissal and redundancy payment waiver. As to unfair dismissal, the final contract was for less than two years; there was no warrant in s.30(b) IRA (now s.197(1) ERA) to rely upon earlier fixed term contracts. The waiver clause only appeared in the last contract. Lord Denning MR was right to focus on the last contract on the facts of that case. No question of renewal or re-engagement arose. The case was correctly decided under s.30(b).

(2) A more difficult question arises under s.30(a). However, that provision no longer appears in the ERA, and the question is now academic.

(3) As to redundancy payment waiver, s.15(4) RPA was not re-enacted in s.30(b) IRA. S.15(4) provides for renewal of the term, that is the duration of the fixed term; it is not concerned with other terms of the contract. Therefore, whether the term is renewed (extended) on the old or different terms and conditions of the contract generally is immaterial.

(4) However, under s.15(2)-(4) (now ERA s.197(3)-(5)) there must be a waiver agreement both in relation to the original fixed term contract and during the currency of each extension of the fixed term. In Iannou there was no waiver clause or separate agreement attached to the first and second contracts, only the third. On this ground the redundancy payment waiver was ineffective as failing to comply with s.15. In our view, had such a clause/agreement been attached to the second contract, the right to a redundancy payment would have been excluded provided it could properly be found that the final extension was indeed an extension of the earlier two year term.

(5) It follows that we are unable to agree with the judgment of Phillips J in Triesman to the extent that he answered the question left open by the NIRC and Court of Appeal in Iannou, namely, must the renewal (extension) of the term under s.197(5) ERA be for a period of two years or more? He held that it did. We disagree for the following reasons:

(a) if the term as renewed has to be for a period of two years or more there would be no need for s.197(5) at all. Applying the approach to unfair dismissal waiver under s.197(1), each time a fixed term contract of two years or more was renewed so that there was no dismissal under s.136(1)(b), the parties must enter into a new s.197(3) agreement. What does s.197(5) add?

(b) S.197(5) does not specify any period for the renewed fixed term. That differs from the scheme of both s.197(1) and s.197(3). It applies only to s.197(3) waiver agreements, not s.197(1) unfair dismissal waivers. What is and was envisaged from the original RPA was this; an employee enters into a fixed term contract for two years or more with a waiver agreement attached; if that term is renewed for a further fixed period of whatever duration, provided he enters into a fresh waiver agreement during the currency of the extended term he is precluded from claiming a redundancy payment on expiry of that term without further renewal.

In our judgment Triesman was correctly decided on its facts. The initial fixed term was for less than two years and did not contain a waiver agreement; accordingly the renewal of the term could not save the employer's position in relation to the redundancy claim.

(6) We return to Mulrine. On the facts of that case Ms Mulrine was precluded from bringing a claim for a redundancy payment. However, since her claim was for unfair dismissal UU could not rely upon the renewal of the original two year term and her claim ought to have been allowed to proceed.

Anomaly

It may be said that by drawing, we think for the first time, a clear distinction between the unfair dismissal and redundancy payment waiver provisions that will create an anomaly. Hitherto employers have proceeded on the basis that there is no material distinction (save for the one and two year terms) between the two. So be it. That is the result of Parliament declining to re-enact the RPA provisions in the IRA and maintaining that distinction to this day.

Inconsistency

We return to Mr Bowers submission as to the need for consistency in appellate decisions. We entirely endorse that principle, but faced with the apparent conflict between the English cases and Mulrine we have found it necessary to consider the whole matter afresh, with the benefit of non-binding authority, in order to assist Industrial Tribunals in future. Our view as to unfair dismissal waiver accords with the English cases; as to redundancy payment waiver, which is a necessary part of this decision, we have drawn from all the cases and more particularly the statute in order to arrive at what may be regarded as the correct position unless and until the Court of Appeal rules otherwise.

The present case

Applying the above principles to the present case we are driven to conclude that this Industrial Tribunal erred in looking only at the final contract term for the purposes of deciding whether there was here a valid redundancy payment waiver. Upon a proper analysis there was a two year fixed term contract, followed by a succession of renewals, each accompanied by a waiver agreement, resulting in a fixed term contract for two years or more for the purposes of s.197(3)-(5). Mr Cragg's right to a redundancy payment was thereby excluded. We shall allow the appeal and substitute a declaration that the Industrial Tribunal had no jurisdiction to entertain his complaint. The award of a redundancy payment is set aside.

Finally, injustice. At paragraph 8 of the reasons the Industrial Tribunal fear that unscrupulous employers will take advantage of an initial fixed term contract for two years or more containing a waiver agreement, followed by a series of short extensions where the waiver would continue to apply. That, they say, is what s.142(4) (s.197(5) ERA) is designed to eliminate.

That is a misconstruction of the statutory provision. What is expressly provided for is that each time the original term is extended, the parties must enter into a new waiver agreement. Without it, the employer cannot rely on the original waiver, and the claim will proceed to a hearing on its merits.