Supreme Court allows appeal declaring appellant validly removed from harbour master office invalid.

THE SUPREME COURT

Appeal Nos. 4 & 8/04

Geoghegan J.

Fennelly J.

Kearns J.

BETWEEN/

SENAN HISTON

Plaintiff/Appellant

and

SHANNON FOYNES PORT COMPANY

Defendant/Respondent

JUDGMENT of Mr. Justice Geoghegan delivered the 17th day of December 2004

1. Pursuant to the Harbours (Amendment) Act, 2000 the former harbours of Foynes Port Company and Shannon Estuary Port Company

respectively were amalgamated. The new amalgamated harbour became vested in the defendant/respondent company. Each of the

former harbour companies before amalgamation had a harbour master. The appellant was the harbour master under the Foynes Port

Company. Without going into unnecessary factual detail about what happened on the interim changeover the end result was that the

post of harbour master within the new structure was advertised and both of the former harbour masters were applicants for the post.

The harbour master under the Shannon Estuary Port Company was the successful applicant for the office. This necessarily meant that

the appellant was no longer a harbour master.

2. Section 1 of the Harbours (Amendment) Act, 2000 was the section which provided for the transfer of functions from one company

to another company but it took the form of a newly inserted section 43 into the Harbours Act, 1996. Subsection (4)(c) of the newly

inserted section 43 provided as follows:

“Where the chief executive or the harbour master of a transferor company transfers into the employment of the transferee

company, then nothing in paragraph (a) or in the provisions applied by that section shall be construed as requiring their

appointment as chief executive or harbour master, respectively, of the transferee company but this paragraph shall not

otherwise be construed as affecting the scales of pay, conditions of service and terms of office of the persons concerned.”

3. It is this provision which has sowed the seeds of dissension. The new employer, primarily through its chief executive, clearly took

the view that provided the appellant received the same pay and holidays etc. the statutory provision was complied with. The

appellant, on the other hand, took quite a different view. From a great deal of evidence emerging both from correspondence produced

and from oral evidence given in the High Court which I do not find it necessary to review it can be fairly stated that the primary

concern of the appellant was what might be described as a “status” concern in as much as he insisted that whatever duties he had

to perform, henceforth, for the new company were to be on the basis that he would be reporting directly to the chief executive and

not to the harbour master. After willingly giving advice in the early days to the harbour master of the amalgamated harbour who had

always been a friend of his, he effectively stopped reporting for work while still drawing his salary and claiming that he had not been

offered a post suitable to his station and reporting to the chief executive. The matter was somewhat further complicated in that the

post of harbour master under the old company had entailed the provision of a dwelling house and the requirement that the harbour

master live in it. The appellant moved out of that house subsequently but did not deliver up possession and there was an allegation

that he left it in some neglect. All of this resulted in both correspondence and discussions with the chief executive which eventually

culminated in a letter of 1st August 2001 requiring the appellant to report for duty by a particular date and to take on assignments

including special projects. It was clear, however, that the appellant would not be reporting to the chief executive. The appellant

failed to comply with that letter and he was then dismissed. The appellant instituted this litigation in the High Court by Plenary

Summons. The action was dismissed by the High Court (Smyth J.) and the appeal from that judgment is now before this court.

4. Essentially, the issue on the appeal is whether he was properly dismissed or not. That was also substantially the issue before the

High Court. I mention this because that view of the case is not really reflected in the pleadings. In the general endorsement of claim

on the Plenary Summons the appellant sought the following three substantial reliefs:

“1. A declaration that the statutory provision contained in paragraph (c) of subsection (4) of section 1 of the Harbours

(Amendment) Act, 2000, upon its true construction gave the defendant the option of appointing the plaintiff to the office of

harbour master of the Harbour of Shannon Foynes Port Company or of compensating him for his loss of office as harbour

master of the former Harbour of Foynes Harbour Trustees and Foynes Port Company by either (a) paying monetary

compensation for or equivalent to the tenure of his office or (b) agreeing with him new terms of office.

2. An injunction restraining the defendant from imposing on the plaintiff without his agreement conditions of service and terms

of office other than those of harbour master.

3. An injunction restraining the defendant from threatening or taking disciplinary action against the plaintiff for refusing to

accept conditions of service and terms of office other than those of harbour master.”

5. These reliefs do not seem to me to reflect the real issues between the parties. Approached on its face value it is quite clear that

the appellant could not possibly be entitled to the first relief. There is nothing in any of the relevant statutes which provides for

compensation for loss of office. I appreciate that counsel for the appellant argues that the appellant has a property right and that

the removal of that property right gave rise to a constitutional right to compensation. In my opinion, that argument is unsustainable in

view of the express conditions in the Acts of 1996 and 2000 carrying over the same scales of pay, conditions of service and terms of

office.

6. Nor in my view would the second relief sought be sustainable since the Act quite clearly envisages that a harbour master who is no

longer a harbour master under the new company will still be entitled to remain in employment under the same terms and conditions of

office. This must obviously mean that the employer is entitled to assign him to any suitable duties on reasonable terms and conditions

that are not less beneficial. The statutory provision would be unworkable if there had to be agreement on the job specification of the

new works.

7. The third relief seems inappropriate in view of the fact that three days before the issue of the Plenary Summons the respondent

had already purported to dismiss the appellant.

8. However, having regard to the way the case was argued both in the High Court and in this court, I have come to the conclusion

that the real issue is whether the appellant is still in office in the company or not. It is that issue which I intend to address.

9. One of the arguments put forward on behalf of the appellant was that pursuant to the relevant statutory provisions he could not

be removed from office without the consent of the Minister for the Marine and, indeed, there was an argument that the consent of

another Minister might be required also. It is common case that no such consent was sought or obtained. Accordingly, if such consent

is required the removal from office or dismissal from employment was clearly unlawful and invalid. This is, therefore, the first question

which ought to be considered. In doing so, I will refer to each of the relevant statutory provisions. The first in time is subsection (1)

of section 38 of the Harbours Act, 1946. That subsection reads as follows:

“(1) Subject to the provisions of this Act, there shall from time to time be appointed to or employed in the service of a

harbour authority by such authority, such and so many officers (including, in the case of a harbour authority mentioned in

Part II of the First Schedule to this Act, a secretary and, in every case, a harbour master and a collector of rates) and

servants as may be necessary for the due administration, management, operation and maintenance of the harbour of the

harbour authority.”

10. It is quite clear from the wording of that subsection that a harbour master was to be regarded as an “officer” as distinct from

a“servant” though I am well aware that counsel for the appellant relied also on subsection (4) of the same section which applied the

Local Authorities (Officers and Employees) Acts, 1926 and 1940 to harbour authorities. I do not find it necessary to refer to that

subsection at this stage. I will come back to it later on in the judgment. I turn now to section 44 of the 1946 Act. Subsection (1) of

that section reads as follows:

“A harbour authority may suspend or, with the sanction of the Minister, remove any officer in their service.”

11. If the appellant had been a harbour master at the time that his employer purported to dismiss him and if that subsection had been

still extant there is no doubt that his removal would have been ineffective without the sanction of the Minister.

12. It is necessary now to move to the Harbours Act, 1996. That Act brought major changes in the administration of harbours. Most

importantly it allowed the Minister establish ordinary private companies to manage a particular harbour. Under section 5 of the Act the

Harbours Acts 1946 to 1976 were to stand repealed in relation to a harbour in respect of which a company became established

pursuant to section 7 of the 1996 Act on the relevant vesting day. Section 39 of the 1996 Act contained provisions dealing with the

problem of existing officers and servants of a harbour authority and provided for their transfer into the employment of the relevant

new company. As both sides in the appeal are placing heavy reliance on the wording of this section I think it important to set out in

full the first three subsections of section 39. For the purposes of the appeal the other two subsections are not really material. These

three subsections read as follows:

“(1) Save in accordance with a collective agreement negotiated with any recognised trade union or staff association

concerned or an agreement negotiated with the person concerned, a person transferred to a company under section 38 shall

not, while in the service of the company, be brought to less beneficial conditions of service or of remuneration than the

conditions of service or of remuneration to which he or she was subject immediately before the relevant vesting day.

(2) Until such time as the scales of pay and conditions of service of persons transferred to a company under section 38 are

varied by the company, following consultation with any recognised trade union or staff association concerned or one or more

of the said persons, the scales of pay to which the said persons were entitled and the conditions of service, restrictions,

requirements and obligations to which they were subject immediately before their transfer shall continue to apply to them and

may be applied or imposed by the company while they are in its service.

(3) The conditions in regard to tenure of office which are granted by the company in relation to a person transferred to it

under section 38 and who, immediately before the relevant vesting day, held office under the Local Authorities (Officers and

Employees) Acts, 1926 to 1983, or was a member of the staff of the Department of the Marine, shall not, while he or she is in

the service of the company, be less favourable to him or her than those applicable for the time being to persons holding office

under the said Acts or, in case he or she was a member of the staff of the Department of the Marine, persons who are civil

servants; any alteration in the conditions in regard to tenure of office of the said person shall not be less favourable to him or

her than the conditions applicable at the time of such alteration to persons holding office under the aforesaid Acts or, as

appropriate, persons who are civil servants, save in accordance with a collective agreement negotiated with any recognised

trade union or staff association concerned or an agreement negotiated with the said person. If a dispute arises between the

company and any such person as to what conditions are applicable for the time being to persons holding office under the

aforesaid Acts or who are civil servants, the matter shall be determined by the Minister for Finance after consultation with the

Minister.”

13. Between 1975 and 1996 the appellant was an officer of the harbour authority which employed him and one of the conditions of

service of that employment was that he could not be removed from office without the sanction of the Minister. If subsection (1)

stood alone it would be difficult to argue that if the Minister’s sanction was no longer required the appellant did not have conditions of

service “less beneficial” than before the Act. If a person with officer status in a public body cannot be removed from office without

the consent of an outside authority such as a Minister, that condition, while undoubtedly in the public interest, must necessarily also

be a substantial benefit to the officer. If, therefore, the Oireachtas had intended to remove the requirement of the Minister’s sanction

it would have been necessary expressly to say so in the Act.

14. Counsel for the respondent, Mr. Gerard Hogan, SC attempts to get around this difficulty in the following manner. He says that for

the purposes of section 39, at least, a distinction is drawn between “conditions of service” and “conditions in regard to tenure of

office”. The latter expression is referred to in subsection (3). Mr. Hogan then goes on to argue that if it were the case that the

expression “conditions of service” in subsection (1) included conditions of tenure subsection (3) would be unnecessary. He then

submits that the necessary inference to be drawn is that the expression “conditions of service” in subsection (1) was never intended

to include conditions of tenure. I reject this argument for two quite different reasons. First of all, even if it were the case that

subsection (3) in so far as it related to a person transferred to the new company and who immediately before the relevant vesting

date held office under the Local Authorities (Officers and Employees) Acts, 1926 to 1983 was unnecessary it would be wrong to give

an artificial restrictive interpretation to subsection (1) when to do so would have the effect of adversely affecting the terms on which

a harbour master of perhaps many years standing, as in this particular case, would be employed thenceforth in the company. In my

view, the vested statutory right of the appellant in this case not to be removed without the sanction of the Minister for the Marine

should not be considered as abolished by implication. The abolition of that right would require express wording in the 1996 Act and no

such express provision is contained in it.

15. The second reason for which I reject Mr. Hogan’s argument is that I do not agree that “if conditions of service” under subsection

(1) include conditions of tenure, subsection (3) is unnecessary. The statutory regime under the Local Authorities (Officers and

Employees) Acts, 1926 to 1983 contain other provisions which are to the benefit of an employee affected by those Acts. There is

power for the Minister to suspend while an inquiry is conducted into an alleged failure of misconduct or unfitness and as to what the

disciplinary action, if any, would be appropriate. After the passing of the 1996 Act therefore, I am satisfied that the appellant still

enjoyed the same conditions of service or at least conditions of service that were not less beneficial and that these conditions of

service included conditions of tenure and that, therefore, he could not have been dismissed without the sanction of the Minister.

16. I feel supported in the view which I have taken by the decision of the former Supreme Court in Cox v. Electricity Supply Board

[1943] I.R. 94. In that case, the plaintiff was a whole time permanent officer in the service of Dublin Corporation. The ESB had

acquired the electrical undertaking of the Corporation by virtue of the Electricity (Supply) Act, 1927, the plaintiff was transferred to

and became a servant of the ESB “upon the same terms (including increment, pension and superannuation rights)” as he was on

when employed by the Corporation. While employed in the Corporation the plaintiff could not be dismissed without the approval of the

Minister for Local Government and Public Health. The ESB purported to dismiss him without obtaining such approval. The High Court

and on appeal from that court the Supreme Court held that the dismissal was invalid because of the absence of the consent of the

Minister. In the Supreme Court, counsel for Dublin Corporation argued that the expression “the same terms” did not include a

restriction on the right of dismissal. Sullivan C.J. who delivered the main judgment of the court had this to say at p. 112:

“This contention is based on the proposition that the tenure by which an office is held is not a term upon which the office is

held. I do not doubt that the word ‘terms’ has a technical meaning when used in contrast with the word ‘tenure’ and that the

meaning of the word may vary according to the context in which it occurs. But there is nothing in the Act to indicate that the

word ‘terms’ in the subsection in question is used in a technical sense and in its wider meaning it would in my opinion include

any provision regulating the duration of employment or prescribing the manner in which the employment may be terminated,

whether such provision has been agreed to by the parties or has been imposed by the legislature. In my opinion we should

give the word ‘terms’ in section 39 subsection 9, that wider meaning, and it follows that the respondent cannot be dismissed

from the employment of the appellant’s without the concurrence of the Minister.”

17. I consider that this case strongly supports the appellant. If subsection (1) of section 39 of the 1996 Act stood alone without

there being included subsection (3) there could not be the slightest doubt in my opinion and particularly having regard to the Cox

case that the ministerial consent would be required before dismissal. For the reasons which I have already indicated, I do not believe

that the Oireachtas intended subsection (3) to have the effect of restricting the meaning of subsection (1) and effectively giving an

artificial definition to “conditions of service”.

18. This brings me back to section 1 of the Harbours (Amendment) Act, 2000 to which I referred at the beginning of this judgment.

Subsection (4)(a) of section 43 of the Harbours Act, 1996 newly inserted into that Act by the said section 1 of the Act of 2000

provides as follows:

“As respects a member of the staff of a transferor company transferred into the employment of a transferee company by an

order under this section, the provisions of sections 39, 40 and 41 shall, subject to paragraphs (p) and (c) and to the extent

that they apply to that member before such transfer, continue to apply to him or her after such transfer and while he or she

remains in the employment of the transferee company and for this purpose references in the said provisions to a company

shall be construed as references to the transferee company and the said provisions shall otherwise be construed so as to

have effect in relation to the said person while he or she remains in such employment.”

19. Paragraph (b) of the same subsection then reads as follows:

“In the application of sections 39, 40 and 41 by virtue of this subsection, references (however expressed) to a person

transferred to a company under section 38 shall be construed as including such a person who is subsequently transferred to a

new company.”

20. I have already cited paragraph (c) at the beginning of the judgment. Having regard to the view which I have taken on the

interpretation of section 39 of the 1996 Act, it necessarily follows that notwithstanding that the appellant ceased to be a harbour

master he continued to have officer status and continued to be in a position from which he could not be dismissed without the

sanction of the Minister for the Marine. It seems clear, therefore, that he has never been validly removed and is still in office.

21. I could end the judgment at that point and not deal with any of the other issues that arose but I consider that that might be

unhelpful to both parties in the aftermath of this case. I, therefore, think it helpful if I express the view that in whatever position the

appellant may be retained now in the company he has no right to insist that he must report to the chief executive. That particular

reporting relationship was so bound up with the position of harbour master that I think that the Oireachtas must have intended that

the reporting relationship would not be regarded as being included in the subsisting terms and conditions of employment. At any rate

the requirement that the appellant should not be put on less beneficial conditions of service must refer to conditions of service which

on an objective basis were for the benefit of the employee whether they be also for the benefit of the employer or not. Although a

particular reporting relationship may give rise to satisfying feelings of status on the part of an employee, it would seem to me that it

is essentially a term of the employment which viewed objectively is exclusively for the benefit of the employer. It is a management

requirement. It would not make sense for the Oireachtas to have intended that somebody who ceased to be a harbour master was

nevertheless, in whatever role he took up to report only to the chief executive. I do not believe that that is a correct construction of

the statutory provisions. On that matter therefore, I consider that the respondent’s view was the correct one.

22. In all the discussions and communications between the parties after the appellant ceased to be a harbour master neither side

appears to have acted reasonably or sensibly. The appellant was wholly unreasonable in taking the view that he would not take on

any position unless it involved reporting to the chief executive officer. On the other hand, the employer never properly clarified what

the duties of the appellant were to be in the future and what were the precise terms and conditions on which he was in office. I have

very little doubt from the nature of the communications between the parties that both sides were hoping for some kind of settlement

package which would have involved the resignation of the appellant from the company. But what the appellant in particular did not

seem to realise is that such a package would have to be agreed and could not be forced. The statutory scheme only gave the

appellant the right to remain in the employment. It did not give him the right to receive any money from the employer in return for his

leaving the employment. Once it appeared that an agreement of that kind could not be reached the employer should have clarified

properly what the terms and conditions of the appellant’s employment were going to be and what work to be assigned to him. This, of

course, would not necessarily mean that he could not be assigned to different work in the future. It would have to be work

reasonably compatible with his “officer” status in the company and his experience as a former harbour master. I do not think it would

necessarily have to be a named post.

23. I do not intend to review the correspondence and discussions. It was more or less conceded at the hearing of the appeal that the

nearest the company came to setting out the work for which the appellant would be required to do was in correspondence which

ensued in August 2001. That correspondence commenced with a letter of the 1st August, 2001 from the chief executive of the

company, Colin Hetherington to the appellant. It read as follows:

“Dear Senan

I am following up on our meeting in the Pery Square Office on 5th July and like you would wish to draw matters between us to

some urgent and satisfactory conclusion. Clearly the current situation with you remaining at home whilst on full pay is not

sustainable and I am writing to advise that with effect from Wednesday, 8th August 2001 I will require your daily attendance in

the office to progress project works in the harbour master’s department.

Alan Coghlan and myself have been working on a number of specific projects and consider that your input would be useful and

appropriate in moving these forward. You will report to Alan Coghlan on a day to day basis but I will of course retain an

interest in the progress of these projects.

Please confirm by return that you will attend the office as requested. I look forward to hearing you.

Yours sincerely”

24. Alan Coghlan was the name of the harbour master. That letter was replied to as follows in a letter of the 4th August, 2001.

“Dear Mr. Hetherington

I have your letter of the 1st August 2001. In your letter you referred to our meeting on the 5th July 2001. At that meeting

you said you were anxious to repossess my house. You agreed that you would put any proposal concerning my house in

writing. No other subject was raised or discussed at that meeting.

You said in your letter that you would wish to draw matters to some urgent and satisfactory conclusion. I also would so wish

because I have been living in a professional limbo since Shannon Foynes Port Company came into being on the 18th September

2000.

In all this time the only proposal for my future made by Shannon Foynes Port Company is that in the letter of the company’s

solicitors suggesting severance discussion. My own solicitors have responded positively to that proposal.

In the circumstances which now pertain I respectively (sic) request that all proposals concerning my future be made through

the solicitors who both you and I have respectively retained for that purpose.

I am passing your letter to my solicitor so that any issues that may arise can be dealt with professionally on both sides.”

25. Mr. Hetherington replied to that letter by letter of the 8th August, 2001 which read as follows:

“Dear Senan

I refer to my letter to you of the 1st August 2001 requiring your daily attendance in the office to progress project works in

the harbour master’s department effective from Wednesday the 8th August 2001.

I received your response to my letter on the 7th August 2001. You have advised that all proposals regarding your future be

made through your solicitors. Whilst it is regrettable that you adopt that attitude in relation to a legitimate request by your

employer to return to work, I instructed our solicitors to contact your solicitors regarding your return. I am advised by our

solicitors that when they contacted Michael Houlihan and Partners they were advised that they knew nothing of the

correspondence between us nor indeed the request for you to return to work.

Notwithstanding your request that your solicitors deal with this issue, I intend to continue dealing directly with you in relation

to your return to work. This is a proper approach from your employer and I expect you to comply.

I made enquiries this morning and have been informed that you have not attended for work as requested. Please be advised

that if you do not attend for work tomorrow the 9th August 2001 I will have no alternative but to issue you with a formal

warning regarding your failure to attend. This will result in the company reassessing whether it will continue paying your salary

whilst you continue to refuse to return to work. If you continue to refuse to return to work, further disciplinary action will be

taken against you.”

26. There was further subsequent correspondence more or less in the same vein which culminated in the purported dismissal. Having

regard to the view I have taken on the requirement to obtain ministerial consent it is not necessary to give a definitive view as to

whether the procedures leading up to dismissal were fair or as to whether the appellant’s conduct constituted a repudiation of his

employment. For the same reason I do not find it necessary to express any view on the applicability to the facts of this case of

Woodar Investment Development Limited v. Wimpy Construction UK Limited [1980] 1 W.L.R. 277 or as to whether it represents the

law in this jurisdiction.

27. As the issue does not now arise as far as I am concerned at least, I do not find it necessary to express any views on the

applicability of the European Communities (Safeguarding of Employees Rights on Transfer of Undertakings) Regulations, 1980 (S.I. No.

306 of 1980) implementing Council Directive 77/187 except to say that if the question had arisen for determination it would have had

to be referred to the European Court of Justice.

28. There is one other matter which I should mention. By a somewhat circuitous argument counsel for the appellant, Dr. Michael Forde

S.C., also submitted that the office of harbour master was an office to which the Local Authorities (Officers and Employees) Acts

applied. The argument was somewhat undermined by the provisions of section 39(2) of the Harbours Act, 1946 which expressly

provided that the office of general manager of a harbour should be an office to which those Acts applied. There was no equivalent

provision for a harbour master. If the argument was to be sustainable at all the court would have had to be brought through all the

relevant provisions of the Local Authorities (Officers and Employees) Acts and that was not done. In the event it becomes irrelevant

having regard to the view which I have taken and I do not find it necessary to make any decision on it. It is of some interest,

however, that the appellant was appointed in the ordinary way as harbour master in answer to an advertisement and not by way of

any local appointments commissioners. This would not, of course, be definitive but having regard to the terms of the Local Authorities

(Officers and Employees) Act, 1926 in particular I would have doubts that the argument would be sustainable.

29. I would allow the appeal in the sense that I would set aside the order of the High Court and substitute for it a declaration that

the appellant has not been validly removed from office in the employment of the respondent. I would not grant any other relief.