England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EAT
(HIS HONOUR JUDGE WILSON)

		Royal Courts of Justice Strand London WC2A 2LL Friday 12 October 2001

1. LORD JUSTICE THORPE: Lord Justice Rix will give the first judgment.
2. LORD JUSTICE RIX: This is the appeal of the St George's Healthcare NHS Trust ("the Trust") against the decision of the Employment Appeal Tribunal ("the EAT"), presided over by His Honour Judge Wilson to remit Mrs Seeta Williamson's claim for unfair dismissal to a differently constituted Employment Tribunal: as the EAT put it "solely on the issue of whether Mrs Williamson had been unfairly selected for dismissal by reason of redundancy".
3. The Employment Tribunal, in a detailed decision running to 43 paragraphs, had rejected Mrs Williamson's claim, not only on the ground of unfair dismissal but also on the ground of racial discrimination. The EAT did not find any error on appeal to it in relation to the question of racial discrimination, and therefore this court has not been concerned with that issue.
4. What was the error of law which caused the EAT to remit the matter for new consideration? In a brief judgment the judge said:

"In our judgment the Employment Tribunal fell into error because it failed to ensure that its extended reasons for its decision would make it clear to the parties why they had won or lost. In this case, so far as dismissal is concerned, the appellant is left not knowing why she lost for two principal reasons."

5. The judge then sought to illustrate the lack of reasons by reference to three matters. The first was that no regard had apparently been paid to the Trust's policy document in relation to long-serving members of its staff; secondly, that no reason had been given why Mrs Williamson had not been offered a particular position which had become vacant on the final day of her employment; and, thirdly, complaint was made of the fact that Mrs Williamson had not been offered posts which arose in the month following the termination of her employment on 31 March 1998.
6. In this court Miss Tether, for the Trust, has submitted that the Employment Tribunal's decision discloses no error of law and that the EAT has wrongly sought to find one in lack of reasons.
7. To understand the issue it is necessary to set out the background of the case, which I can take from the decision of the Employment Tribunal itself. Mrs Williamson had started to work for the Trust's predecessor in June 1976 as a gynaecological ward sister at St James' Hospital. In April 1992 that hospital fell within the newly created Trust. Mrs Williamson continued to be employed as a sister in one of the gynaecological wards of the Children and Women's Services Directorate.
8. In April 1993 she was threatened with redundancy in the course of organisational change. That notice was subsequently withdrawn and she was redeployed as a sister/ward manager of an Interim Care Unit ("ICU") in the Surgical and Clinical Support Directorate. That unit closed on 31 May 1997. However Mrs Williamson was not made redundant on that occasion. She did various projects for a few weeks on a supernumerary basis. In July 1997 an alternative position at another hospital was offered, but Mrs Williamson was not interested in that.
9. Ultimately, on 11 August 1997, she took up what she knew to be a temporary position in the Bed Management Team covering maternity leave until 31 March 1998. Some time in the autumn of that year fresh money became available to the Trust. It was decided to reopen the ICU where Mrs Williamson had been working for a few months covering the winter period from 1 January to 31 March 1998. Mrs Williamson was relocated to her old position in the ICU. Again she knew that that reopening of the ICU was only on a temporary basis until 31 March 1998.
10. In the first half of March Mrs Williamson was away on leave and so it was not until her return on 16 March 1998 that she had a first meeting with Mr Bentley, the Assistant Director of Human Resources, and Mrs Cooper, the Director of Nursing. She was informed that at the end of that month, when her temporary placing came to an end, she would be made redundant. Mrs Williamson was informed at that meeting about the details of a retirement package, but she made it clear that she was devastated at the prospect of redundancy. The question therefore arose of whether some alternative position could be found for her.
11. Mrs Williamson had a further meeting with Mr Bentley and Mrs Cooper on 20 March 1998. At that meeting a position for manager of a new and comprehensive surgery unit, for which Mrs Williamson had applied, was discussed, but it turned out that she lacked recent theatre experience which was an essential criterion for the post.
12. There was a third meeting with Mr Bentley and Mrs Cooper on 25 March. In the course of that meeting another position was discussed in which Mrs Williamson had shown interest, but, unfortunately, she did not meet the specification there either. That position involved a considerable degree of urology experience. Discussion showed that to qualify for that post it would have required Mrs Williamson to take a full-time course for six months. There were no other posts available within the Trust for which Mrs Williamson was considered to be appropriate.
13. There was a final meeting which took place on the day appointed for the determination of her appointment, 31 March 1998. That was attended by Mr Bentley alone with Mrs Williamson. Mrs Cooper was then on leave. The Employment Tribunal had this to say about the events at that stage:

"25. Prior to that meeting, Mr Bentley had asked the various Directors of Nursing about any vacancies that they might have in their Directorates. Having identified no suitable alternative employment, Mr Bentley gave to the Applicant copies of a letter confirming her redundancy with effect from that date. The Directors of Nursing that he spoke to were Sue Hort, Medicine, Vijay Sonar, Care of the Elderly and Sue Cooper, Surgery and Clinical Support. He was aware that in the following weeks and months there may well be further vacancies for nursing. However, because of constraints in terms of funding on the Trust about which he could do nothing any posts were frozen at that point and he could not be sure exactly which posts would be available in the new financial year. He told Mrs Williamson this. He also consulted with his colleagues in the human resources department who were responsible for the other services of the trust.

26. At about the same time as a result of the restructure of the Admission Discharge and Night Nursing Services, another member of staff, Mr Dhanji, was considering whether to be slotted into a post of Deputy Service Manager or to accept redundancy. He did not, however, communicate to the First Respondents that he was taking the option of redundancy until 31 March 1998. That was the day of the Applicant's redundancy.

27. Shortly after the Applicant was made redundant, various advertisements appeared in respect of vacancies at the Trust. However, as at the date of the termination of the employment, there was no certainty that these posts would be available and indeed Mr Bentley confirmed to the Applicant during his meetings with her that there were likely to be posts available in the new financial year. If the Trust had not proceeded with the redundancies of which the Applicant's was one of many in the financial year ending March 1998, the money would have been lost to them. A further liability in respect of redundancy payments in the year 1998/1999 would have caused serious financial difficulties for the Trust. It was for this reason that the Trust decided to dismiss the employees affected and to pay money in lieu of notice."

14. Turning to the Employment Tribunal's conclusions, they were satisfied on the evidence that the reason for Mrs Williamson's dismissal was redundancy within the meaning of section 139 of the Employment Rights Act 1996, in that when the ICU was closed at the end of March, the Trust's need for someone to do work of that kind diminished and/or ceased.
15. The tribunal went on to consider whether the Trust had acted reasonably in treating that as a sufficient reason for Mrs Williamson's dismissal. They considered whether there had been adequate consultation and were satisfied that there had been. They identified the four meetings to which I have referred. They were satisfied that Mrs Williamson had not been prevented from having a representative present at any of those meetings.
16. The tribunal next considered whether Mrs Williamson had been unfairly selected for redundancy. They concluded that she had not since, unfortunately, her placement in her temporary position at the ICU made her an obvious candidate for redundancy. They next considered whether there was suitable alternative employment which should have been offered to her. They went through the various positions which had been raised before them as possibilities and where Mrs Williamson had expressed an interest, and concluded in each case that there was no possibility of suitable alternative employment.
17. The tribunal then made the following findings in paragraphs 40 and 41, which I will set out in full as they have been the subject matter of many of the submissions made in this court:

"The posts arising from the reorganisation of the Admission Discharge and Night Nursing Teams were those of Service Manager and Deputy Service Manager. These posts had been ring fenced for the staff affected by the restructuring. We were satisfied that this procedure had been followed, ultimately leading to Mrs Brewster accepting redundancy and the post being offered to Jenny Jones when Mr Dhanji decided not to apply for the post. The Deputy Service Manager post had been offered to Mr Dhanji and he did not communicate his decision not to take up the post until the last day of the Applicant's employment. In those circumstances it was not unreasonable for that post not to be offered to the Applicant.

41. In relation to the other posts, it was accepted that the Applicant was not interested in the Medical Unit Post. The posts which became available after the termination of the Applicant's employment could not have been offered to the Applicant before the termination of her employment."

18. Next the tribunal went on to consider the internal appeal which Mrs Williamson had initiated. Ultimately, that appeal was abandoned, the tribunal concluding that Mrs Williamson had had a proper opportunity to make all such submissions as she wished to make. The tribunal ended by dealing with the race discrimination complaint, with which this court is not concerned.
19. On this appeal Miss Tether has submitted that the decision of the Employment Tribunal discloses no error of law and that the EAT was mistaken in saying that there was insufficient reasoning in general, or that the Employment Tribunal had erred in any way, or lacked sufficient reasoning in any way, in the three respects which the EAT in its judgment had sought to identify as being particular examples of an insufficiency of reasoning. I will turn to those three particular matters in turn.
20. The first is of whether the Employment Tribunal had given proper attention to the policy document, "Policy Statement on Implementing Change - Redeployment, Retraining and Redundancy", referred to by the EAT. It is true that that policy document is not mentioned anywhere in the extended reasons of the Employment Tribunal by name. Nevertheless, it had certainly been before the tribunal and had been the focus of submissions before it: see for instance Mr Panton's outline closing submissions on behalf of Mrs Williamson where express reference is made to that policy document and to a number of submissions made with respect to it, such as submissions concerning the absence of consultation, the absence of notification, the failure to give Mrs Williamson advice about representation, the lack of proper consideration as to alternative posts, the failure to provide Mrs Williamson with a list of vacancies etc.
21. It is also plain, in my judgment, from the whole structure, and from the detail, of the tribunal's extended reasons, that the policy document was in the forefront of its mind in giving its reasons. I can illustrate that, first, by referring briefly to the key matters dealt with in the policy and by reverting to the matters dealt with by the tribunal. The policy is divided into seven main numbered sections. If I simply state the titles of those sections, they will stand for the essential points dealt with in the document:

1. Introduction;

2. Minimising the effect on the workforce;

3. Consultation;

4. Selection;

5. Notification to Staff (the body of which shows that it goes closely with "Consultation";

6. Alternative Employment;

7. Appeals Process.

22. With those matters in mind, I turn to paragraph 4 of the extended reasons of the tribunal, where under the heading of "Issues" which the tribunal asked itself whether Mrs Williamson had been unfairly selected for redundancy, whether there was suitable alternative employment and whether there was a failure to consult. Those issues are again identified in paragraph 6 under the heading "Relevant Law". Following the extended passage under which the tribunal made findings of fact, it returned under the heading of "Conclusions" to address in turn both those issues which it had already identified earlier in its reasons and also the matters dealt with in the policy statement.
23. Thus in paragraph 36, having found that the statutory reason of dismissal of redundancy was made good, the tribunal immediately went on to consider, under the heading of "Unfair Dismissal", whether there had been adequate consultation. In dealing with that, it also dealt with the matter of notification and representation. Those matters are dealt with at paragraphs 3 and 5 of the policy document.
24. In paragraph 37 the question of selection for redundancy (heading 4 of the policy document) is dealt with; in paragraph 38 it considered the matter of suitable alternative employment (heading 6); and it concluded by dealing with the appeal process (heading 7 of the policy document).
25. It is clear to me that, throughout its extended reasons, the Employment Tribunal kept the policy document in the forefront of its mind. I can see no reason whatsoever for thinking that the EAT was right to suggest that Mrs Williamson had not been treated as a long serving member of staff, which she plainly was, in whose case the policy document was relevant and important.
26. On that ground, therefore, I can see no justification for the EAT to interfere in the Employment Tribunal's decision.
27. The second matter identified by the EAT, was the question dealt with ultimately in paragraph 40 of the extended reasons as to whether Mrs Williamson should have been offered the post of Deputy Service Manager, which only became available at the last moment on 31 March 1998 when Mr Dhanji told the Trust of his decision not to take up that post which had been ring-fenced for him. It was in relation to that position that the tribunal found, as I have quoted, that in the circumstances prevailing, "It was not unreasonable for that post not to be offered to the applicant".
28. Miss Tether submitted that that was a finding of fact which was not open to the EAT to upset on appeal. She submitted that it was not a perverse finding; it was not a finding which no reasonable tribunal could arrive at; it was not a finding for which there was no evidence; and it was not a finding for which it could be said that the tribunal had given no reasons.
29. Mr Panton, however, submitted that the tribunal's reasoning was inadequate. Why, he asked rhetorically, was the post not offered to Mrs Williamson?He submitted that there was no answer to that question. In this connection he relied on Meek v City of Birmingham District Council [1987] 16 IRLR 250, in particular at paragraph 12 where the Court of Appeal said that the decision of the Industrial Tribunal in that case had simply failed to set out the minimum necessary in the way of findings of fact.
30. Bingham LJ pointed out in that case that there was no account of the basic story of what had occurred; no statement anywhere in the reasons of what the employer had thought about the employee which had led the employer to dismiss the employee. It seems to me that those strictures are very far from the extended reasons in this case.
31. Mr Panton also relied on the decision of this court in Anya v University of Oxford [2001] IRLR 377, in particular at paragraphs 19 and 26. In paragraph 19 Sedley LJ, giving the judgment of the court, had pointed out that there were no findings about a whole host of matters which were crucial to the determination of a question of alleged racial discrimination and, for good measure, that absence of findings took place in the context where the interview panel's departures from university policy or good practice had been established.
32. In paragraph 26 Sedley LJ said:

"Just as the courts will not interfere with a decision, whatever its incidental flaws, which has covered the correct ground and answered the right questions, so they should not uphold a decision which has failed in this basic task, whatever its other virtues."

33. Adopting that test, if I ask myself whether this tribunal, like the tribunal in the Anya case, had failed in its basic task or had covered the correct ground and answered the right questions, it seems to me that the response has to be that the right questions had been asked and the correct ground had been covered.
34. Quite part from those general considerations, however, in my judgment there certainly is an answer to Mr Panton's question, "Why was the post not offered to Mrs Williamson?" The answer is that which the tribunal gave, that, "In those circumstances it was not unreasonable for that post not to be offered to the applicant."
35. What were those circumstances? They were, as the reasons made clear, that the post had been ring-fenced for Mr Dhanji, that Mr Dhanji had only declined it on 31 March 1998, which was not only the last day of Mrs Williamson's employment but also the last day of the Trust's financial year, the day upon which these matters had to be settled.
36. What therefore was the significance of 31 March?That, the Employment Tribunal tells us in paragraphs 27 and 43 of its reasons. The significance was the fact that, unless the matter of Mrs Williamson's redundancy was settled within the present financial year, by the latest 31 March 1998, a year in which the Trust had the funds necessary to meet the cost of Mrs Williamson's redundancy, those funds would not have been available in the following year, which would have caused the Trust serious financial difficulties. I have already quoted from paragraph 27 of the reasons in which that point is made.
37. The point is again made, albeit under the heading of the race discrimination complaint, in paragraph 43 where the tribunal states:

"The Respondent's failure to retain the Applicant on a supernumerary basis into the next financial year was wholly explained by Mr Bentley and the financial constraints on the Respondent."

38. In my judgment it is impossible for this court to say either that this case bears any of the hallmarks of the cases of Meek or Anya or that the Employment Tribunal's clear finding of fact is perverse or insufficient in its reasoning. It is founded and grounded in the detailed exposition given by the tribunal of the context of the termination of Mrs Williamson's employment.
39. Thirdly, therefore, I turn to the last of the three matters adverted to by the EAT by reference to the question of new posts advertised in April 1998 and paragraph 41 of the reasons. In my judgment the new posts advertised in April 1998 are irrelevant. It is true (see West Midlands Cooperative Society v Tipton [1986] ICR 192) that matters relevant to the circumstances of a dismissal prior to a termination may emerge at an internal appeal process after termination and, therefore, may have to be taken into account on the question of whether that dismissal was fair or not, particularly if those circumstances which emerge in the context of the appeal hearing favour the employee. It is quite another thing, however, to say that events occurring after termination, and which do not go directly to the fairness or unfairness of the employer's conduct in terminating that employment, can be relevant. After termination, the Trust, in my judgment, was not obliged any longer to offer Mrs Williamson alternative employment, but she could always have applied in answer to the advertisements, which she did not.
40. It is clear from the findings of fact that the Trust could not, for the financial reasons I have already mentioned, afford to extend Mrs Williamson's employment in the hope that she might be suitable for some post which might or might not emerge in the new financial year. It is already clear from the passages from the tribunal's reasons which I have read into the judgment that the possibility of such new posts arising in the new year had been mentioned to Mrs Williamson, but, since there was uncertainty until the new year about such matters, the whole question of such posts remained indefinite.
41. Finally, Mr Panton raised a new point. He submitted that the Trust had not even established redundancy as the reason for dismissal: on the basis that, because of the possibility of new vacancies in the new year, the issue of fact for the purpose of section 139 of the 1996 Act was not determined by the disappearance of the ICU job actually performed by Mrs Williamson. That point was not within the reasons given by the EAT for remitting the matter back to a differently constituted Employment Tribunal. But, in my judgment, it is in any event answered by the findings of fact made to the effect that what might happen in the new year could not affect the decision that the Trust had to reach in advance of, and by the latest, 31 March 1998.
42. The question of redundancy is ultimately a question of fact, which has been recently emphasised by the House of Lords in Murray v Foyle Meats Ltd [2000] 1 AC 51.
43. Lastly, I would mention that in a paragraph towards the beginning of their determination under the heading "Relevant Law", the tribunal set out, by reference, inter alia, to section 98 of the 1996 Act and again in paragraph 7 by reference to section 139 of the 1996 Act, the basic statutory tests which they had to consider concerning fair or unfair dismissal and the question of redundancy. In that passage they also refer to a number of decisions and set out the basic law relating to the question of fair or unfair dismissal. When asked about that passage, Mr Panton very fairly accepted that he had no criticism of the principles of law which the tribunal had set itself and that his submissions in responding to this appeal merely went to the way in which the tribunal had applied that law to the matters of fact in the case.
44. In these circumstances, and for these reasons which I have sought to give, I would allow this appeal and restore the decision of the Employment Tribunal.
45. SIR MARTIN NOURSE: I agree.
46. LORD JUSTICE THORPE: I also agree.
Order: Appeal allowed with costs to be assessed by the Costs Judge.