Walsh v Rother District Council

[1978] 1 All ER 510;
[1978] ICR 1216

(Judgment by: Donaldson J)

v Rother District Council

Queen's Bench Division

Donaldson J

Hearing date: 31 May 1977
Judgment date: 17 June 1977

Judgment by:
Donaldson J

Cur adv vult

Mr Walsh was the chief executive of the district council from 30 July 1973 until April 1976. His employment came to an end because, in December 1975, the district council decided to reorganise its establishment of officers and to dispense with the post of chief executive.

Mr Walsh was very naturally aggrieved with this decision and claimed compensation for loss of employment under the provisions of the Local Government Act 1972 and the Local Government (Compensation) Regulations 1974. The district council rejected his claim and Mr Walsh applied for relief to an industrial tribunal sitting at Ashford, Kent. That tribunal unanimously dismissed Mr Walsh's application on the ground that he had not suffered any loss of employment or loss or diminution of emoluments which was attributable to any provision of the Local Government Act 1972. That decision was published on 8 July 1976.

Now, nearly a year later, Mr Walsh appeals to this court. On his behalf counsel submits that the tribunal misdirected itself as to the meaning of the words 'attributable to' in the 1972 Act and the regulations and, in consequence of that misdirection, reached a wrong conclusion.

The 1972 Act involved a radical reorganisation of local government in England,

substituting new county and district councils for most of the pre-existing local authorities of more than parish status. The district council is such a new authority and operates in the area which was previously the concern of the Battle, Bexhill and Rye authorities. It came into existence on 1 April 1974.

The widespread abolition of employing local authorities left a number of local government officers without jobs, but of course the new local authorities had a large number of posts to fill. Nevertheless, it was anticipated that in the ensuing 'local authority musical chairs' some officers would find themselves without a seat and others would find seats which were less remunerative than those which they had previously occupied. Provision was accordingly made to compensate those who suffered financial loss.

The relevant statutory provisions are s 259(1) of the 1972 Act and regs 3, 4, 7 and 11 of, and Schs 2 and 3 to, the 1971 regulations. I need not set out these provisions in this judgment, since it is common ground that Mr Walsh is within the class of person who is entitled to compensation if he suffers loss of employment 'attributable to any provision' of the 1972 Act not later than ten years after 1 April 1974.

Counsel for Mr Walsh submits that Mr Walsh's loss of employment was attributable to ss 1, 2 and 112(3) of the 1972 Act. Sections 1 and 2 provide the new local government areas and the constitution of the new principal councils in England. Section 112(3) abrogated various statutory provisions which required councils to appoint specified officers such as a clerk, treasurer or borough surveyor. It thus opened the way to, although it did not require, the adoption of a new management structure of the type recommended in what has come to be known as the Bains report, the report of the study group on the New Local Authorities' Management and Structure published in 1972. For present purposes the essence of the study group's recommendations was that there should be a chief executive who should be without departmental responsibilities and who should be the alter ego of the authority at officer level.

The Borough of Lewes in Sussex was one of the authorities which was due to disappear as a result of the 1972 Act. Mr Walsh was the town clerk and if he had suffered loss as a result of the abolition of his office, he would without doubt have been entitled to compensation. It appears that he in fact suffered no such loss. In anticipation of the formation of the new district council, the councillors of Battle, Bexhill and Rye set up a district joint committee to give consideration to matters which would require to be decided by the district council as soon as it was formed. One such matter was its departmental structure. The committee accepted the recommendations in the Bains report, although, as I have already said, it was not obliged to do so. It recommended that there should be a chief executive, a principal chief officers' management team and heads of departments. Mr Walsh applied for and was appointed to the post of chief executive. No doubt he welcomed the change and the challenge. Today he probably feels differently.

No complaint is made of the way in which Mr Walsh discharged his duties. He assisted to the full in setting up the new district council's management structure in accordance with the Bains report recommendations and the wishes of the elected members of the district council. Unfortunately, this period was short-lived, and in January 1975 the staff and general purposes committee resolved that a complete review of the establishment be carried out after the district council had been in operation for one year. This was done and, in December 1975, committees of the council recommended a restructuring of its central administration which included the abolition of the post of chief executive. This recommendation was accepted by the district council and Mr Walsh's employment was terminated.

The industrial tribunal found as a fact that the cause of the dismissal of Mr Walsh was--

'the need of the [district council] to cut back the costs of its administration because of the national economic climate and the particular economic conditions which confronted the [district council] in 1975 ....'

and that this cause operated in circumstances which had been created by the 1972 Act. Counsel for Mr Walsh submits that if the tribunal had correctly directed itself in law it would have found that a further cause was that, in the light of experience, the district council found that its functions were not as extensive as had at first been anticipated, that it did not need the elaborate Bains management structure and in particular that it did not need to have a chief executive without departmental responsibilities.

The industrial tribunal considered the authorities on the meaning of 'attributable' and their conclusion is expressed in the following paragraph of their reasons:

'We prefer the argument which is based upon the need for a chain of causation to be established between the alleged cause of the loss ie the 1972 Act or one of its provisions and the dismissal of the applicant. We find as a fact that in any event the chain was broken when the structure of administration was completed in 1973. [Mr Walsh] was then in post and his position and terms of employment were settled. The [district council] carried on its administration with the structure which had been settled, until early in 1975 when the structure came up for review in the light of the circumstances which prevailed at that time.'

Counsel for Mr Walsh criticises this conclusion insofar as it suggests that once an officer accepts employment with a new authority and takes up that position, his subsequent dismissal can never be attributed to the 1972 Act or any of its provisions. I am far from sure that this is what the tribunal intended to decide. However, if it was, it was plainly wrong because regs 7 and 11 of the 1971 regulations contemplate that a dismissal giving rise to a claim for compensation may take place as long as ten years after the old authority has gone out of existence. However, in fairness to the tribunal, I should point out that the members may only have been considering Mr Walsh's position on the facts as they found them. On any view of the matter, the tribunal's conclusion is one which is open to review in this court.

I confess that until I saw regs 7 and 11 I think that I should have assumed that loss of employment as a result of the provisions of the 1972 Act would inevitably occur at the latest by 1 April 1974, when the old authorities disappeared. The draftsman of the regulations was more far sighted and one of the circumstances which he may have had in mind is illustrated by the judgment of Griffiths J in Mallet v Restormel Borough Council. In that case the applicant, Mr Mallet, was the manager of the St Mawgan airport for which the Newquay council was responsible. That council disappeared in the reorganisation and its responsibility was assumed by the new Restormel Borough Council. The latter council offered Mr Mallet re-employment as manager of the airport from 1 April 1974, but in December of that year decided to abolish the post and to employ British Midland Airways to manage the airport. The reason for the change was financial. If the council had continued to manage the airport themselves, it would have cost them £5,000 a year. British Midland Airways were prepared to pay £2,000 a year for the privilege. Mr Mallet maintained that he could show that if Newquay council had remained in existence, it would, despite the financial burden, have continued to manage the airport itself and that he would still have been the airport manager. Accordingly, he submitted that the loss of his job was attributable to the provisions of the 1972 Act, ie the local government reorganisation. Griffiths J held that this was indeed correct, given that Mr Mallett could establish the facts which he alleged.

Counsel for the district council had said that similar situations may arise where it can be shown that a deceased council employed staff to perform functions for other authorities, such as a county council, and would have continued to do so indefinitely, that the staff were re-employed by a new council and that the new council, within ten years, terminated the agency and dismissed the staff concerned.

Unfortunately for Mr Walsh, his case is quite different. He was not re-employed by the district council having previously been employed in the same place by one of its predecessors. His post was entirely new. This may not be fatal, but it does rob Mallet's case of any relevance to his.

The fundamental problem is whether Mr Walsh's loss of employment was 'attributable to' any provision of the 1972 Act, ie the April 1974 reorganisation. These words have been considered in a number of cases and I do not wish to add to the explanations and definitions which have been given. Counsel for Mr Walsh submits that it is a wider concept than 'directly caused by', or 'caused by or resulting from', but he accepts that it involves some nexus between the effect and the alleged cause. He suggests that 'owing to' or 'a material contributory cause' or 'a material cause in some way contributing to the effect' may be synonyms. Lord Reid in Central Asbestos Co v Dodd ([1972] 2 All ER 1135 at 1141, [1973] AC 518 at 533) said:

'... "attributable". That means capable of being attributed. "Attribute" has a number of cognate meanings; you can attribute a quality to a person or thing, you can attribute a product to a source or author, you can attribute an effect to a cause. The essential element is connection of some kind.'

Suffice it to say that these are plain English words involving some causal connection between the loss of employment and that to which the loss is said to be attributable. However, this connection need not be that of a sole, dominant, direct or proximate cause and effect. A contributory causal connection is quite sufficient.

Mr Walsh's problem is that whilst he can show abundant connection between the provisions of the 1972 Act and his employment as chief executive (without the 1972 Act there would have been no Rother District Council and no such post) he can show no connection between those provisions and his loss of employment. Counsel for Mr Walsh seeks to escape from this dilemma by submitting that the district council's adoption of the Bains management structure was experimental and evolutionary and that its abandonment so soon after the council's birth was all part and parcel of the local government reorganisation itself. Whether or not circumstances can arise in which both the creation of the job itself and its disappearance can be attributable to the 1972 Act, I am quite clear that that is not this case. The district council was created by the 1972 Act. The terms of that Act gave it wide discretion on the management structure which it should adopt. It adopted one structure, worked it for a year and then decided to adopt another. The sold cause of Mr Walsh's loss of employment was a change of policy by the council. It was in no sense attributable to any of the provisions of the 1972 Act.

It follows that I consider that the industrial tribunal's decision was correct and that this appeal should be dismissed.

Appeal dismissed. Leave to appeal granted.

Solicitors: J G Haley (for Mr Walsh)
John G Millward (for the district council)
K Mydeen Esq Barrister.