[2007]JRC047
royal court
(Samedi Division)
21st February 2007
Before: |
M. C. St. J Birt, Esq., Deputy Bailiff |
Between |
Francis Gerald Voisin (trading as Voisins Department Store) |
Appellant |
And |
Thomas Brown |
Respondent |
Advocate M. L. Preston for the Appellant.
The Respondent in person.
judgment
deputy bailiff:
1. This is an appeal from a decision of the Employment Tribunal ("the Tribunal"), consisting of the Deputy Chairman, Mr S Le Breton and Mr P Woodward, dated 17th July 2006 whereby it held that the respondent ("Mr Brown") had been unfairly dismissed and awarded him the sum of £32,468.80.
The factual background
2. The following summary is based upon the findings set out in the decision of the Tribunal, which I gratefully adopt.
3. Voisins Department Store is operated by the appellant ("Mr Voisin") as a sole trader. He is the proprietor of the business. Mr Brown joined Voisins Department Store in January 1999 as commercial manager. In that capacity he was in charge of the operational aspects of the sale side of the business.
4. In December 1999 Mr Voisin entered the States of Jersey as a Deputy. This increasingly took up more of his time and he decided to re-activate the role of general manager. On 1st August 2001 Mr Brown was appointed general manager and as such he was in charge of the general operations of the entire store. Although operating as a sole trader, Mr Voisin established a board. There was also a senior management team ("SMT"). On 12th April 2002 Mr Voisin drew up a memorandum of understanding whereby the roles, relationships and responsibilities of Mr Voisin, the SMT, the board and Mr Brown were described and agreed upon. The agreement allowed the SMT to manage the business of the store whilst keeping Mr Voisin fully informed of the progress and operation of the business and acknowledging Mr Voisin's role as sole proprietor of the business. The agreement also recognised Mr Brown as the leader of the SMT and appointed him to the board. The board comprised Mr Voisin and two other non-executive directors. Mr Brown at that point was the only executive director. Mr Brown's senior role was reflected not only by his high salary but also that he was eligible for a bonus based on profit. Voisins Department Store held a 'J' category housing licence for him and his contract of employment provided for twelve months' notice on either side. The purpose of the board was to oversee policy and to provide strategic oversight and general direction in the operation of the business. The SMT implemented those policies and the business plan as approved by the board.
5. All members of the SMT reported to Mr Brown and he in turn reported to the board. At that time the SMT consisted of the finance manager, the store merchandise manager, the business development and Voisins@Home manager, the marketing manager, the personnel manager and the store operations manager. The buyers reported directly to Mr Brown. At a later stage the finance manager and the personnel manager, at Mr Brown's suggestion, were appointed as executive members of the board, although both of them continued to report to Mr Brown on an operational basis. Although having no executive role, Mr Voisin would frequently attend the meetings of the SMT and would always attend meetings of the board. He and Mr Brown had a good working relationship.
6. During 2004 Voisins Department Store expanded rapidly, including taking over and refurbishing an old warehouse site as selling space and the old Brennans Langlois showrooms for Voisins@ Home. This expansion was approved by the board and implemented by Mr Brown.
7. However, by mid-2005, Mr Voisin was concerned that the business was not achieving its projected sales targets and thereby profits. He knew the business would have to cut costs. He was also becoming aware that his States work was taking up a great deal of his time and he began to think of not running for re-election to the States. After a number of meetings he and Mr Brown identified eleven people who should be made redundant. A deliberate decision was made not to make redundancies from shop floor staff as they drive sales up; accordingly the pool of non-selling staff was considered. Out of the eleven staff identified, seven left for voluntary and natural reasons and eventually four members of staff were made redundant in July 2005. Mr Voisin left the process of the redundancies to Mr Brown who conducted it in conjunction with the personnel manager, Ms Le Vesconte. Between them, they informed the relevant staff members of the situation, offered them their notice in one lump sum and allowed them to leave immediately. At the suggestion of Mr Brown, Ms Le Vesconte took advice from JACS before starting the round of redundancies.
8. Mr Voisin remained concerned about sales figures. As a sole trader he was responsible for the debts of the business and it became apparent to him that further substantial cuts in costs would have to be made. Again, he decided not to make redundancies from the sales staff and instead looked at the marketing costs and the salaries of the SMT. He reviewed the role of each member of the SMT and concluded as follows:-
1. the buyer in ladies wear and lingerie was too experienced to lose and in any event that was a difficult area to recruit in;
2. the buyer in Voisins@Home was also very experienced and was now doing the work of a person lost in the July redundancies;
3. the personnel manager was experienced and performed well in her part-time role;
4. the store operations manager was experienced and performed an important function in the store;
5. the finance manager was essential to the operation of the business.
9. He concluded that he could largely assume the functions of the general manager and delegate those functions which he could not perform to members of the SMT, thus making a saving. Accordingly he decided to make Mr Brown redundant. Realising the importance of this decision he travelled to England in early September 2005 in order to discuss his decision with one of the non-executive members of the board who had experience in managing businesses like Voisins Department Store. He considered whether Mr Brown should be offered the role of store operations manager but, as that would involve essentially demotion and a 55% cut in salary, he did not think that Mr Brown would accept it. Furthermore the existing store operations manager had always had good appraisals so that there was no obvious reason to dismiss her. Nevertheless he discussed this possibility with the non-executive board member whilst he was in England.
10. On his return to Jersey and following a discussion with the other non-executive board member, Mr Voisin decided to make the post of general manager redundant in order to save costs and not to offer the post of store operations manager to Mr Brown. Mr Voisin did not consult his personnel manager Ms Le Vesconte for advice during this time or discuss his decision with any other members of the SMT because they were all subordinate to Mr Brown.
11. There was at the time a proposal that Mr Voisin, Mr Brown and the finance manager would personally invest in a new concession coming into the store and a meeting to discuss this investment had been called for 7th September 2005. Mr Voisin felt that he could not let Mr Brown commit to this investment without knowing that he was going to lose his job and accordingly, on 7th September, just before that meeting took place, Mr Voisin informed Mr Brown that he needed to save substantial costs and that he was, 'going to have to let him go'. Mr Voisin told Mr Brown not to tell anyone about the situation and suggested a further meeting on 9th September. There was also a brief discussion about the flat that Mr Brown lived in, which was owned by Mr Voisin. The meeting took only ten minutes.
12. In fact the next meeting took place on 12th September. It took one hour and began by Mr Voisin stating that its purpose was to establish Mr Brown's leaving date. In response to Mr Brown's question, Mr Voisin gave reasons for making the general manager's post redundant as being purely financial, based on a need to save a particular sum of money (which was disclosed to the Tribunal) in order to meet existing financial commitments. Mr Voisin described Mr Brown as being in a 'pool of one'; his was a unique role in that he was a level of management which existed above the SMT consisting only of him, and his special role was reflected in the terms of his employment, which no other member of staff enjoyed. The meeting moved on to the terms of Mr Brown's redundancy with Mr Voisin explaining that Mr Brown's 12 months' notice would be effective from 28th September 2005 and that he would like Mr Brown to work in the store until the end of November and then be on 'garden leave' to the end of his notice. This would mean that Mr Brown could not work for anyone else in the meantime. Mr Brown asked to be released earlier in return for a lump sum to which Mr Voisin countered that there would have to be a financial incentive for the business to pay a lump sum. It was agreed that Mr Voisin would draw up a proposal which would be discussed at a further meeting on 16th September. Mr Brown expressed a willingness to stay for some weeks and Mr Voisin said how sorry he was about the situation.
13. The meeting of 16th September resulted in Mr Voisin sending Mr Brown a letter setting out two options for redundancy packages, both of which involved Mr Brown being released from his notice period in return for a discounted lump sum. Mr Brown responded with a third option which involved his being paid for the full period of 12 months and receiving a bonus based on 2007 figures. On 27th September this option was agreed by the parties and they shook hands. However, the next day Mr Voisin told Mr Brown that he had reconsidered the situation and that this option was in fact too expensive for the business and he was withdrawing from it. Mr Brown was annoyed by this change of mind, but the following day he agreed to the first of the two options originally offered and an agreement to this effect was drawn up by the parties on 30th September. As a result Mr Brown received a lump sum on 1st December in lieu of notice and his employment ended on 28th December. Subsequently, on 3rd January 2006 Mr Brown issued proceedings for unfair dismissal before the Tribunal.
The Tribunal's decision
14. The first issue raised by Mr Brown was whether he had in fact been declared redundant because his work was now being undertaken by Mr Voisin. However the Tribunal found that he had been made redundant because Mr Voisin was not an employee of the business. No appeal has been brought against that part of the decision.
15. The Tribunal went on to hold, however, that Mr Brown had been unfairly dismissed on the ground that, in cases of redundancy, an employer has a duty to consult with the employee, to warn the employee of redundancy, to establish fair selection criteria, and to explore alternatives to redundancy. The Tribunal found that Mr Voisin had not discharged any of these duties and that Mr Brown had therefore been unfairly dismissed. Mr Voisin now appeals against that decision.
The statutory provisions
16. The provision which falls for application in this case is Article 64 of the Employment (Jersey) Law 2003, (the "2003 Law") the relevant parts of which read as follows:-
"64(1) In determining for the purposes of this Part, whether the dismissal of an employee is fair or unfair, it shall be for the employer to show:-
(a) the reason (or, if more than one, the principal reason) for the dismissal; and
(b) that it is either a reason falling within paragraph (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
(2) A reason shall fall within this paragraph if it:-
(a) ...........
(b) ............
(c) Is that the employee was redundant; or
(d) ..............
(3) .........
(4) Where the employer has fulfilled the requirements of paragraph (1), the determination of the question of whether the dismissal is fair or unfair (having regard to the reasons shown by the employer) shall:-
(a) depend on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and
(b) be determined in accordance with equity and the substantial merits of the case.
(5) ......."
17. Article 94 of the 2003 Law confers a right of appeal in the following terms:-
"(1) An appeal on a question of law shall lie from a decision or order of the Tribunal to the Royal Court with the leave of the Tribunal or of the Royal Court.
(2)........."
Leave was granted by the Tribunal in this case.
Nature of an appeal from the Tribunal
18. The wording of Article 94 mirrors that of the equivalent English legislation which confers a right of appeal on a question of law from an Employment Tribunal to the Employment Appeal Tribunal. Mr Preston accepted that Harvey on Industrial Relations and Employment Law set out the position accurately at Division T, para 1630:-
"An appeal from an employment tribunal lies only on 'a question of law' (ETA 21(1)). Accordingly, the EAT will have no power to interfere with a tribunal's decision unless it can be shown: (a) that the tribunal misdirected itself in law or misunderstood the law or misapplied the law; or (b) that there was no evidence to support a particular conclusion or finding of fact; or (c) that the decision was either perverse in that it was one which no reasonable tribunal, directing itself properly on the law, could have reached, or alternatively, was one which was obviously wrong....."
19. I would add that there has been some disagreement in the English courts as to whether the alternate formulation of ground (c) "..... or alternatively, was one which was obviously wrong ......" is accurate. Thus, May LJ in Hereford and Worcester County Council v Neale [1986] IRLR 168 at 174 said that neither the EAT nor the Court of Appeal should disturb a decision of an employment tribunal 'unless one can say in effect: "my goodness, that was certainly wrong"'. On the other hand Lord Donaldson MR in Piggott Bros & Co Limited v Jackson [1991] IRLR 309 at 312 preferred to stay with the test that the decision of the tribunal must be perverse, in the sense that it was one which no reasonable tribunal, directing itself properly on the law, could have reached. We do not need to resolve this conflict today as Mr Preston's main argument is that the Tribunal erred in law.
The correct approach in law
20. This is the first occasion upon which an appeal has been brought against a decision of the Tribunal. The 2003 Law is a new piece of legislation and I hope that it may be useful to summarise the correct approach. The Law is, in all material respects, in identical form to the equivalent English legislation and accordingly considerable guidance can be obtained from English decisions, although it must always be remembered that this is a separate jurisdiction and if the Court were to conclude that a wrong turning had been taken in England, it would be open to this Court to differ.
21. As in the English legislation, Article 64(4) states specifically that the question of whether a dismissal is fair or unfair depends upon whether the employer acted reasonably or unreasonably in treating the reason given for the dismissal as being a sufficient reason and shall be determined in accordance with the equity and substantial merits of the case.
22. The key principle which emerges from this is that it is not for the Tribunal to substitute its own opinion for that of the employer. Rather, its job is to determine whether the employer has acted in a manner in which a reasonable employer might have acted, although the Tribunal, left to itself, might have acted differently. The most frequently cited summary of the applicable principles is to be found in Iceland Frozen Foods v Jones [1982] IRLR 439 at 442. Taking the liberty of transposing what is said into a Jersey context, the passage reads as follows:-
"We consider that the authorities established that in law the correct approach for the [Employment] Tribunal to adopt in answering the question posed by [Article 64(4) of the 2003 Law] is as follows:-
(1) The starting point should always be the words of[ Article 64(4)] themselves;
(2) In applying the [Article] an [Employment] Tribunal must consider the reasonableness of the employer's conduct, not simply whether they (the members of the [Employment] Tribunal) consider the dismissal to be fair;
(3) In judging the reasonableness of the employer's conduct an [Employment] Tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;
(4) In many (though not all) cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another;
(5) The function of the [Employment] Tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair; if the dismissal falls outside the band it is unfair."
23. Another way of saying the same thing is to be found in the comments of Lord Denning MR in British Leyland UK Limited v Swift [1981] IRLR 91 at para 11 cited with approval in Iceland Frozen Foods:-
"The first question that arises is whether the Industrial Tribunal applied the wrong test. We have had considerable argument about it. They said: "... a reasonable employer would, in our opinion, consider that a lesser penalty was appropriate". I do not think that that is the right test. The correct test is: Was it reasonable for the employers to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view; another quite reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on. Both views might be quite reasonable. If it is was quite reasonable to dismiss him, then the dismissal must be upheld as fair even though some other employers may not have dismissed him."
24. The position of the Tribunal is somewhat (although not exactly) analogous to the position of the Court when considering appeals from planning decisions of the Planning and Environment Minister on the ground that the original decision was unreasonable. In that context, the words of Bailhache, Bailiff in Token Limited v Planning & Environment Committee [2001] JLR 698 at para 9 may be of assistance:-
"The Solicitor General submitted that the decision in Fairview Farm did not entitle the court to find that the Committee's decision was reasonable but quash it because the Court had reached an equally reasonable but different decision. We agree. The court might think that a Committee's decision is mistaken, but that does not of itself entitle the court to substitute its own decision. The court must form its own view of the merits, but it must reach the conclusion that the Committee's decision is not only mistaken but also unreasonable before it can intervene. There is an element of semantics here. There is, nonetheless, a qualitative difference between finding that a decision is unreasonable, rather than simply mistaken. To put it another way, there is a margin of appreciation before a decision which the court thinks to be mistaken becomes so wrong that it is, in the view of the court, unreasonable."
25. In Polkey v A E Dayton Services Limited [1988] AC 344 the House of Lords emphasised the importance of procedural safeguards when considering questions of unfair dismissal. Lord Bridge summarised the position very concisely at 364:-
"Employers contesting a claim of unfair dismissal will commonly advance as their reason for dismissal one of the reasons specifically recognised as valid by Section 57(2)(a),(b) and (c) of the Employment Protection (Consolidation) Act 1978. These, put shortly, are: (a) that the employee could not do his job properly; (b) that he had been guilty of misconduct; and (c) that he was redundant. But an employer having prima facie grounds to dismiss for one of these reasons will in the great majority of cases not act reasonably in treating the reason as a sufficient reason for dismissal unless and until he has taken the steps, conveniently classified in most of the authorities as 'procedural' which are necessary in the circumstances of the case to justify that course of action. Thus, in the case of incapacity, the employer will normally not act reasonably unless he gives the employee fair warning and an opportunity to mend his ways and show that he can do the job; in the case of misconduct, the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation; in the case of redundancy, the employer will normally not act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation." [Emphasis added]
26. The Tribunal adopted similar principles to those summarised by Lord Bridge when it said in the case of Goguelin v Stuart Banks (Carpenters & Builders) Limited [2006] (May, case number 2502037/06):-
"When dealing with Mr Goguelin the Company failed to follow four ordinary principles of fairness which should always be considered in situations of redundancy;
(1) The duty to consult with the employee.
(2) The duty to warn of redundancy.
(3) The duty to establish fair criteria for selection of employees for redundancy.
(4) The duty to explore alternatives to redundancy."
27. However it is very important to note that Lord Bridge was not stating that any failure to follow the procedural requirements which he had summarised would of necessity result in a finding of unfair dismissal. On the contrary he was careful to use the word 'normally' in every case and he went on to explain the position more fully in the passage which immediately follows that quoted above:-
"If an employer has failed to take the appropriate procedural steps in any particular case, the one question the Industrial Tribunal is not permitted to ask in applying the test of reasonableness posed by Section 57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On the true construction of Section 57(3) this question is simply irrelevant. It is quite a different matter if the Tribunal is able to conclude that the employer himself, at the time of dismissal, acted reasonably in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with. In such a case the test of reasonableness under Section 57(3) may be satisfied." [Emphasis added]
Lord Mackay of Clashfern LC was of a similar view at 355:
"If the employer could reasonably have concluded in the light of the circumstances known to him at the time of dismissal that consultation or warning would be utterly useless he might well act reasonably even if he did not observe the provisions of the code. Failure to observe the requirements of the code relating to consultation or warning will not necessarily render a dismissal unfair. Whether in any particular case it did so is a matter for the Industrial Tribunal to consider in the light of the circumstances known to the employer at the time he dismissed the employee."
From this it follows that the decision as to whether a dismissal is unfair does not depend on whether all the boxes can be ticked in respect of the procedural requirements. The Tribunal must consider the equity and substantial merits of the case.
28. To summarise therefore, where, say, an employer declares an employee redundant and fails to warn or consult him in accordance with the procedural requirements summarised by Lord Bridge and adopted in Goguelin, it is not open to the Tribunal to hold without more ado that, as a result of such failure, the dismissal was unfair. Nor is it permissible for the members of the Tribunal to ask themselves whether they consider that the failure to warn or consult in the particular circumstances was wrong and to conclude therefore that the dismissal was unfair. To hold a dismissal to be unfair on such a basis is to fail to adopt the band of reasonableness test and would be an error of law. It is only if the members of the Tribunal consider, not merely that the failure of the employer in the particular circumstances was wrong, but that it went beyond the decision that a reasonable employer might reasonably have taken, that the Tribunal is entitled to hold that the dismissal is unfair. To repeat what was said by Lord Bridge, a dismissal is not unfair if the employer acted reasonably (i.e. within the band of reasonable decisions) in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with. The Tribunal must therefore concentrate not on whether the employer's decision or the procedure adopted by him was wrong but on whether it was so wrong as to fall outside the band of reasonable actions on the part of a reasonable employer.
Application to this case
29. Mr Preston's primary submission is that the Tribunal wrongly elevated the four duties referred to above into mandatory requirements of law so that any failure to comply with any of them necessarily renders a dismissal unfair.
30. In my judgment Mr Preston's submission is correct. At paragraph 15 of his written closing submissions to the Tribunal he had argued:-
"It is important to note, as was not referred to in the decision of Goguelin, that the 4 ordinary duties of fairness must be considered in light of the correct 'range of reasonable responses' test. This is important for in different circumstances the obligation to consult, warn, consider criteria and/or consider alternative employment options may differ substantially depending upon the case in question." [original emphasis]
That submission seems to me entirely correct. It is consistent with the observations of Lord Bridge and Lord Mackay quoted at para 27 above and with the principles I have endeavoured to summarise at para 28.
31. Nevertheless, this submission was rejected by the Tribunal in the following passage at page 11 of its decision. Having referred to the four principles of fairness in Goguelin 'which should always be considered' the Tribunal went on to say:-
"The employer's lawyers chose to emphasise the word 'considered' in the Tribunal judgment above. This is an incorrect emphasis; these are the core factors which must exist before an employer can be regarded as having acted fairly. Therefore the correct emphasis is which should always be considered in situations of redundancy." [first emphasis added; second emphasis from the original]
32. In my judgment this is a clear statement that the four factors must exist before an employer can be regarded as having acted fairly. In other words, if the employer fails to comply with any of the duties, he will have acted unfairly. It is true, as Mr Brown points out, that on page 19 of the decision, the Tribunal used the following words:-
"It is not for this Tribunal to substitute its own views of what constitutes reasonableness either in respect of redundancy selection or implementation of that criteria. The question is, whether such redundancy process is one that a reasonable employer acting reasonably should have followed."
33. However that passage is impossible to reconcile with the passage to which I have referred in para 31 and the Tribunal does not go on to consider what a reasonable employer might have done. It simply records its finding that Mr Voisin did not discharge any of the duties and then holds that Mr Brown was unfairly dismissed. Thus, after the passage quoted in para 32 and after having repeated the four principles of fairness in Goguelin, the critical part of the Tribunal's decision on page 19 stated as follows:-
"In this case it is clear to the Tribunal that Mr Voisin did not warn Mr Brown of his possible redundancy, did not open any consultation with Mr Brown about his situation - indeed Mr Voisin had made up his mind regarding the outcome from the very beginning of the process leading to Mr Brown's dismissal - and Mr Voisin did not suggest any alternative employment to Mr Brown, or encourage the subject to be explored. Accordingly none of these duties were discharged by the employer.
It is important to remember that we define our worth, dignity and position in society by our jobs and the status they give us. A person's job should not be taken away without following a process which closely involves both parties or their representatives. In this process all aspects of a person's employment are open to consideration and discussion until the final redundancy package is agreed upon. It can be a lengthy process and the parties should be prepared for this, but it must be conducted in good faith and with open minds. The Tribunal finds that these elements were missing from Mr Brown's dismissal.
The Tribunal finds that Mr Brown was unfairly dismissed......"
34. I am conscious that a judgment must not be interpreted as a statute but nevertheless the band of reasonableness test lies at the heart of the Tribunal's role under the 2003 Law and it is of the first importance that the Tribunal should apply the correct test. In my judgment the rejection of Mr Preston's arguments coupled with the assertion that the four matters referred to in Goguelin are core factors which must exist before an employer can be regarded as having acted fairly, the failure to address the arguments on reasonableness and the wording of the two key paragraphs from the decision quoted above lead me to conclude that the Tribunal did not apply the correct test.
35. I hold therefore that the Tribunal misdirected itself in law. Although this was Mr Preston's main argument, he had a number of subsidiary arguments in relation to each of the four 'duties' or 'principles of fairness' referred to and I therefore go on to consider those submissions.
Duty to warn and duty to consult
36. Having set out the four principles of fairness (i.e. the four duties listed in Goguelin and derived from Polkey) the Tribunal went on to consider each of these in turn. It sensibly took the issues of warning and consultation together.
37. The Tribunal found that Mr Voisin had made up his mind to make Mr Brown redundant before their first meeting on 7th September 2005. It recorded that Mr Voisin had given evidence that he considered Mr Brown's redundancy the 'only option' to save costs and that he had travelled off the island to discuss the issue with the non-executive member of his board who had experience in this field. Mr Voisin had said that he did not discuss the matter with Mr Brown in advance of 7th September as he did not want to worry him or distress him. The Tribunal found that none of the meetings from 7th September onwards involved warning or consultation because Mr Voisin had already made up his mind to make Mr Brown redundant. It was clearly open to the Tribunal on the evidence to make this finding.
38. However, Mr Preston's submission to the Tribunal was that this was a commercial decision made in good faith and that, given the particular circumstances of the case and the unique position which Mr Brown held, any purported consultation about whether the redundancy would or would not occur would have been entirely cosmetic, futile and, moreover, a deceit. A warning of the inevitable would have been similarly futile. He argued therefore that the decision fell within the band of decisions which a reasonable employer in those particular circumstances might have adopted.
39. He submitted to this Court that the Tribunal simply did not deal with any of these arguments and consider whether Mr Voisin's actions fell within the range of reasonable responses an employer could have adopted, but instead, having set out at page 12 that a standard redundancy procedure involved the three stages of warning, consultation and appeal, simply reached its own view that Mr Voisin should have warned and consulted Mr Brown. Mr Brown, on the other hand, submitted that, because of the reference on page 19 of the decision to the reasonableness test, the Tribunal should be assumed to have applied the correct test.
40. I am unable to agree with Mr Brown. Although the Tribunal refers to Mr Voisin's explanation in the section headed ' Warning and Consultation', nowhere does it consider whether that was a reasonable explanation. Thus, in relation to the failure to warn, the Tribunal said only this on page 12:-
"The fact is that redundancy is a brutal subject and shocking to those under consideration. Mr Voisin should have warned Mr Brown that the post of general manager was under consideration for redundancy, explained his reasons why and asked Mr Brown to come up with some suggestions regarding saving the necessary costs."
In relation to consultation, having found that there was no proper consultation, the Tribunal said at page 13:-
"This failure meant the process was already flawed."
41. In my judgment the only natural reading of the decision as a whole is that the Tribunal failed to consider whether, in the particular and unusual circumstance of the case, Mr Voisin's failure to warn or consult with Mr Brown was something another reasonable employer might also reasonably have done.
Selection
42. The third duty referred to in Goguelin is that an employer should establish fair criteria for the selection of the employees for redundancy. Mr Voisin's case before the Tribunal was that Mr Brown was in a 'pool of one' and therefore there was no question of establishing a selection procedure because it was not applicable. Mr Brown was in a 'pool of one' because he was the only employee at such a senior level and it was his activities that Mr Voisin was going to take on personally.
43. Again, the Tribunal must apply a band of reasonableness test in relation to issues of selection for redundancy. The position is summarised in Harvey Division D1 as follows:-
"1685 It is now well established that tribunals cannot substitute their own principles of selection for those of the employer. They can interfere only if the criteria adopted are such that no reasonable employer could have adopted them or applied them in the way in which the employer did (see e.g. Earl of Bradford v Jowett (No.2) [1978] IRLR 16 [1978] ICR 431; and N C Watling v Richardson [1970] IRLR 255, [1978] ICR 1059.
1686 An important preliminary question is to determine the pool from which the selection will be made. This again is for the employer to determine, and will be difficult for the employee to challenge where the employer has genuinely applied his mind to the problem. It need not, however, be limited to employees doing the same or similar work; indeed, where jobs are interchangeable an employer might be expected to widen the pool to include all the jobs that might potentially be done."
44. Given the unusual circumstances in this case and the fact that Mr Voisin was intending, following his retirement from the States, to take over virtually all the activities undertaken by the general manager and given the fact that there was only one general manager who was senior to all the other employees, the reasons given for Mr Voisin having concluded that there was only a pool of one clearly merited very careful consideration. In particular the Tribunal had to be careful to consider whether Mr Voisin's view was one which no reasonable employer would have reached. However, in its judgment, the Tribunal dealt with the position as follows at page 16. Having recorded that Mr Brown was a member of the SMT, the Tribunal said as follows:-
"Accordingly, Mr Brown was a member of the SMT. This places Mr Brown in a much bigger pool of people for consideration. The concept of Mr Brown being in a 'pool of one' only existed because this is the way Mr Voisin looked at his position. Mr Voisin's selection criteria - that he could save Mr Brown's salary by assuming most of the functions himself - only applied because that process of selection fitted his question.
If Mr Voisin had asked the broader questions of how to save costs throughout the business or whether the management of the business should be restructured, he might have been persuaded that there was more than the post of general manager to look at or he may have considered other options to the construction of the SMT which involved using a selection criteria. Unfortunately Mr Voisin took an inflexible approach to the selection of staff for redundancy at this time."
45. The first paragraph is not very easy to follow, but, in my judgment the Tribunal gives no consideration to the proper test of reasonableness, namely whether Mr Voisin's opinion that there was a pool of one, was one that other employers might reasonably have taken. The natural reading of the decision is that the Tribunal simply disagreed with Mr Voisin's opinion; but that is not a proper ground for finding a dismissal to be unfair.
46. I would add that it is not entirely clear whether the Tribunal did in fact hold that the failure to adopt a fair selection criteria was one of the factors which rendered the dismissal unfair. In the passage headed 'Decision' on page 19, having recited the four duties from Goguelin, the Tribunal stated as follows:-
"In this case it is clear to the Tribunal that Mr Voisin did not warn Mr Brown of his possible redundancy, did not open any consultation with Mr Brown about his situation - indeed Mr Voisin had made up his mind regarding the outcome from the very beginning of the process leading to Mr Brown's dismissal - and Mr Voisin did not suggest any alternative employment to Mr Brown, or encourage the subject to be explored. Accordingly none of these duties were discharged by the employer."
47. As can immediately be seen, there is an inconsistency between the last sentence of this passage and the previous sentence. The last sentence indicates that none of the four duties were discharged whereas the previous sentence only records findings in respect of three of them, namely to consult, to warn and to explore alternatives to redundancy. However, given the findings of the Tribunal under the heading 'Selection' on pages 15-17, extracts of which I have quoted above, I proceed on the basis that the Tribunal did find that Mr Voisin had failed to establish fair selection criteria and that accordingly the last sentence of the passage quoted in the preceding paragraph is correct, albeit that there is no reference to fair selection in the preceding sentence. This failure on Mr Voisin's part was therefore a factor in the Tribunal's decision that the dismissal was unfair.
48. I should add that, at page 17 of the decision, when dealing with selection, the Tribunal commented adversely on the fact that there was no appeal procedure in respect of the selection process. It made a comment to similar effect on page 15. The point does not strictly arise for decision in this case but I do not think it would be right to let the observation pass without comment.
49. Many businesses in Jersey are extremely small and are owned by a sole proprietor who of necessity will himself take any decisions concerning redundancies or dismissals. In many such cases it would be quite impossible to have any appeal procedure. Similarly, although Voisins Department Store is a substantial business, Mr Voisin is in fact a sole trader. It is very hard to see how there can be any effective appeal procedure against a decision taken by a sole proprietor who, by definition, has ultimate authority in connection with the business.
50. I would emphasise that I am not casting any doubt on the general desirability of an appeal procedure. A business of appropriate size would be well advised to have such a procedure. However, I would not wish the Tribunal's observations to be thought automatically to require an appeal procedure where the business is a small one. It will be a matter of fact and degree in each case but the Tribunal is directed by Article 64(4), when considering whether a dismissal is fair or unfair, to have regard to the size and administrative resources of the employer's undertaking. This may be particularly relevant when considering the reasonableness of not having an appeal procedure.
Redeployment
51. As Lord Bridge said in Polkey, an employer will normally not act reasonably unless he takes such steps as may be reasonable to minimise a redundancy by redeployment within his own organisation. On this aspect, the Tribunal records (at page 5 of its decision) that Mr Voisin did consider offering Mr Brown the position of store operations manager. However the salary of that post was only 45% of the salary paid to Mr Brown; it would involve a demotion and it would also involve having to dismiss the existing store operations manager who had always had good appraisals. In the circumstances, after consulting with the non-resident board member in England, he decided not to offer the post of store operations manager to Mr Brown as an alternative. The Tribunal also recorded that, at the time of the discussions, redeployment was not Mr Brown's primary concern and that he had turned down an offer from JACS for assistance in this respect. It is agreed that the suggestion that Mr Brown should have been offered alternative employment had arisen for the first time at the hearing before the Tribunal.
52. Mr Preston argued before the Tribunal that Mr Voisin had acted as many a reasonable employer would have done. He had considered the matter but had concluded that it would be unreasonable to 'bump' the existing store operations manager from her post in order that Mr Brown might take her place in a less important role with a 55% salary reduction.
53. The Tribunal did not deal with these arguments in its decision. It said only the following on the point:-
"Redundancy is a time of great stress and often of some embarrassment to employees; they are in effect told they are not wanted without having done anything wrong. Bearing this in mind it is wrong to expect an employee to represent himself on all matters throughout the redundancy process - at some points the employer has to take control of the situation. This is particularly true where an employee is not represented; here the employers must guide the employee and lead the process. Accordingly, the Tribunal would expect an employer having decided to make an employee redundant, to have considered, discussed and offered suitable jobs within its business (or within an associated employer or successor where appropriate), or otherwise given assistance with finding alternative work. The employer should raise the issue of alternative employment at the consultation stage; it may be that the employee is aware of suitable alternative work that the employer is unaware of. It should be noted though that such consideration of redeployment is just part of the process and does not necessarily lead to a positive conclusion.
The Tribunal is clear from the evidence it heard that during the process of the redundancy, redeployment was not Mr Brown's primary concern - indeed he turned down JACS's offer of assistance on this point. However it was obvious to the Tribunal that after his redundancy Mr Brown gave this matter considerable thought and identified roles that he thought that he could have fulfilled in the management structure. It was also clear to the Tribunal that Mr Voisin did not suggest alternative employment with Mr Brown at any time during the process, and he did not open it up as a point of discussion between the parties."
The only other reference to this aspect was in the passage at the conclusion of the decision (already quoted at para 46 above), where the Tribunal found that Mr Voisin had not suggested any alternative employment with Mr Brown or encouraged the subject to be explored and that therefore had not discharged his duty to explore alternatives to redundancy.
54. The natural reading of the Tribunal's decision is that it considers it to be an essential condition for any dismissal to be fair that the expectations which it describes in the first of the two paragraphs quoted above are complied with. In my judgment the Tribunal has misdirected itself in law in so holding. As previously stated, the authorities make clear that the test is not what the Tribunal considers should have happened; it is whether the employer's actions fall outside the band of reasonable actions that a reasonable employer might have taken. The Tribunal simply does not address in its decision the reasons given by Mr Voisin for his decision and does not consider whether it is an approach which might have been taken by other reasonable employers in the unusual and particular circumstances of this case. The Tribunal therefore applied the wrong test.
55. However Mr Preston goes further and submits that, even if the correct test were applied, any finding that the dismissal was unfair because Mr Voisin did not suggest alternative employment or encourage the subject to be explored, would be wrong in law and/or perverse. In this connection, Mr Preston referred me to the case of Barrett Construction Limited v Dalrymple [1984] IRLR 385 where the Industrial Tribunal had held that Mr Dalrymple, a site agent, was unfairly dismissed by way of redundancy because the employer had not ascertained whether there were any vacancies for him in other companies within the same group and had not considered employing him itself in a subordinate capacity. The Employment Appeal Tribunal overturned this decision on the grounds that it was wrong in law. The relevant passages of the judgment are as follows:-
"4 In the present case the Tribunal appear to have gone much further. They say that it is the duty of an employer before dismissing an employee for redundancy to see whether alternative employment can be found for him. As a general proposition this is correct. In the present case the evidence before the Tribunal was that the appellant's regional director had looked around within his own company but no other employment was available. Notwithstanding this the Tribunal seemed to consider that the possibility of offering him employment in a subordinate post such as general foreman ought to have been canvassed. Apparently in evidence the respondent said that he would have accepted such a post but there is no hint of this prior to his being asked about it at the Tribunal. The Tribunal take the matter further. They say that the regional director ought to have made enquiries as to whether there were vacancies in the other companies in the group, notwithstanding that these were autonomous. In this respect the Tribunal state that they consider that the appellants' regional director acted unreasonably "and as there is no evidence to show that had such an enquiry been made it would have been fruitless, the applicant is entitled to the benefit of the doubt upon that question. The dismissal must therefore be found unfair."
5 In our opinion the Industrial Tribunal have erred in reaching this conclusion.......... The Tribunal must consider the question of reasonableness on the evidence before them in accordance with equity and the substantial merits of the case. The evidence before them disclosed that efforts were made to see if alternative employment was available within the appellants' company and that no suggestion was ever made by the respondent that he would be interested in a more junior appointment until he gave evidence before the Tribunal. Without laying down any hard and fast rule we are inclined to think that where an employee at senior management level who is being made redundant is prepared to accept a subordinate position he ought, in fairness, to make this clear at an early stage so as to give his employer an opportunity to see if this a feasible solution. ....
7 In the present case, in our opinion, the Tribunal have exceeded their function in postulating that the appellants' should have canvassed the possibility of employment in other independent companies and indeed, in the circumstances of this case, that there was an obligation upon them to offer employment, if available, in a junior capacity."
Furthermore, it is of note that the judgment refers to other employment being 'available' or to there being 'vacancies'. I was not referred to any authority which suggests that an employer should consider dismissing a person in a different job (not in the same 'pool' for redundancy purposes) in order to make way for the person being made redundant. Yet that must be what the Tribunal is inferring because there was no suggestion that any of the other posts in the SMT were vacant.
56. In my judgment, given the particular circumstances of this case, namely (i) that, with a view to saving costs, Mr Voisin planned himself to carry out the functions of general manager following his retirement from the States; (ii) that the position of general manager was a position of unique importance and responsibility within the business; (iii) that the post of store operations manager attracted a salary which was only 45% of that paid to the general manager; (iv) that the post of store operations manager was not 'available' in the sense that it was occupied by an employee who was performing her role to everyone's satisfaction and who would have to be dismissed if Mr Brown were to take over her post; (v) that Mr Voisin considered all these matters and consulted with a fellow board member before concluding that it would not be right to offer Mr Brown the subordinate post of store operations manager in place of his redundant post of general manager; and finally that Mr Brown himself did not raise the question of redeployment in a more junior capacity prior to the hearing and in fact refused an offer from JACS at the time to assist on any issue of redeployment, any decision of the Tribunal that Mr Voisin's failure to explore alternatives to redundancy by way of redeployment with Mr Brown caused the dismissal to be unfair, was a decision to which no reasonable tribunal could have come and would therefore be perverse and wrong in law.
Disposal of the appeal
57. The Tribunal is a recently established body seeking to apply an entirely new area of Jersey law. I have every sympathy with the members of the Tribunal as they seek to establish the law in this area and to lay down guidelines for the assistance of employers and employees alike. However the legislature has chosen to place the Tribunal in an almost unique position by providing that an appeal lies only on a question of law. This means that, subject only to the very generous limit of perversity, decisions of the Tribunal as to the facts are final and cannot be appealed however strongly the losing party feels that the Tribunal went wrong in its decision on the facts. In that sense the Tribunal is subject to a far lesser degree of control and supervision than, for example, the Royal Court.
58. In these circumstances, it is of the first importance that not only does the Tribunal genuinely apply the correct legal test but it is also seen to apply the correct legal test so as to instil confidence in its decisions. Nothing in this judgment is intended to detract from the need for employers considering redundancies to have regard to the four matters listed by Lord Bridge in Polkey but, for the reasons I have given, I have come to the clear conclusion that the Tribunal misdirected itself in law in this case in that it did not apply the correct legal test and certainly cannot be seen to have applied the correct legal test. The appeal must be allowed.
59. The question then arises as to what order this Court should make. As an appeal can be brought only on a question of law, it is not open to the Court to substitute its own view of the facts for that of the Tribunal even if satisfied that the Tribunal has erred in law. The position of this Court is similar to that of the Employment Appeal Tribunal under the equivalent English legislation. There, it has been held in a number of cases that, if the Employment Tribunal has erred in law in finding that an employee was unfairly dismissed, the Employment Appeal Tribunal must remit the case unless no Employment Tribunal, properly directing itself, could have come to the conclusion that the employee was not unfairly dismissed (see Halsbury Laws of England volume 16 (1B) para 943 and the cases cited thereunder). The position was described by Sir John Donaldson MR in Mclaren v National Coal Board [1988] IRLR 215 as follows:-
"Mr Naughton has asked that I say a word about remission. There are cases which say that it is not for the Employment Appeal Tribunal to substitute itself for the Industrial Tribunal. If the Industrial Tribunal has misdirected itself in law, then the case should go back to the Industrial Tribunal telling them how to direct themselves properly and leaving them to do it and reach a conclusion on the basis of that direction. That is quite correct, apart from the fact that it has been enshrined in a large number of authorities which are binding on us. But it is not the whole story. There is also a category of case where it is quite clear that (a) there has been a misdirection, and (b), if the Tribunal had directed itself correctly, it must have reached the opposite conclusion. In those circumstances it is obviously absurd to send it back to the Industrial Tribunal, telling them what the proper direction is and if by any chance, they do not arrive at the inevitable answer on the basis of that direction, to hear another appeal and set that aside and send it back again. In those circumstances, of course, it is for the Employment Appeal Tribunal to substitute what must inevitably be the answer by the Industrial Tribunal rather than to remit it."
60. Mr Preston points out that there is no express power to remit in Article 64 whereas the equivalent provision in the English legislation confers an express power to remit upon the Employment Appeal Tribunal. He submits therefore that this Court has no power to remit the matter to the Tribunal. If it considers that the Tribunal has misdirected itself in law, it must allow the appeal and there the matter will rest, with the Tribunal's decision that Mr Brown was unfairly dismissed being quashed.
61. In my judgment that submission cannot possibly be right. The fact that the Tribunal has erred in law does not of necessity mean that it has reached the wrong conclusion as to whether an employee was unfairly dismissed. In many cases it will remain an open question as to whether the Tribunal will, on applying the correct law following the decision of this Court, find the dismissal to be unfair or not. Furthermore, given the clear statement that appeals may only be brought on a question of law, I agree with the English jurisprudence that it is not open to this Court to make its own finding of fact as to whether a particular dismissal is unfair or not. The legislature has by necessary implication conferred the power to make that decision upon the Tribunal alone. However, I agree that, if there can only be one proper answer to the question (so that any decision to the opposite effect would be perverse), this Court should make the decision and proceed accordingly. So, for example, if in the present case the Tribunal's decision that Mr Brown had been unfairly dismissed was based solely on a finding that Mr Voisin should have actively explored the question of redeployment in a more junior post, then, in view of my ruling that such finding is perverse, I would allow the appeal and hold the dismissal not to have been unfair on the basis that this was the only correct decision in law on the facts as found.
62. The question therefore is whether I should remit the matter to the Tribunal. Mr Preston argues strongly that I should not. He submits that there can only be one correct decision on the facts of this case, namely that Mr Brown was not unfairly dismissed. Any other finding would, he says, be perverse and therefore would be overturned on appeal. He says that the circumstances of this case are extremely unusual. It is a case of a sole proprietor concluding in good faith that he must involve himself in the business fulltime in order to reduce costs and ensure the viability of the business. As sole proprietor it is clear that the only function which he can properly fulfil is that of general manager i.e. the top post. He could not realistically carry out some function underneath the general manager. The post of general manager is therefore no longer required. Mr Brown is in a unique position in terms of his salary and responsibility and he therefore is reasonably to be considered as being in a pool of one for selection purposes. There was no point in warning or consulting with him because, in the particular circumstances of this case, there simply was no alternative and any reasonable employer would have come to the same conclusion. The only person that Mr Voisin could replace was Mr Brown and there was no other available employment for him. It follows, says Mr Preston, that many reasonable employers would have come to exactly the same conclusion as Mr Voisin and would have concluded that there was no point in having a futile period of warning and consultation which could not have led to any different outcome. Such reasonable employers would also have concluded that there was a fair selection criteria because there was in fact only a pool of one and it was also fair not to discuss redeployment in the particular circumstances of this case because of the level of seniority of Mr Brown's position, the fact that no other job was 'available' and all the other matters referred to earlier in this judgment in the discussion on redeployment. In short, this was one of those exceptional cases envisaged by Lord Bridge in the passage from Polkey quoted at para 27 above.
63. These are powerful submissions and I have considered carefully whether they lead me to conclude that the only rational decision is that Mr Brown was not unfairly dismissed. I certainly have no difficulty in agreeing that many Employment Tribunals would so find on the facts of this case. However I remind myself that it is not for this Court to decide on the facts whether a particular dismissal is fair or unfair. Although I have found perversity in relation to redeployment, I have not found perversity in relation to the other three duties. Mr Preston has not persuaded me that there can only be one outcome to this dispute and that any decision that Mr Brown was unfairly dismissed is a decision which no reasonable Tribunal, properly directed, could reach. In the circumstances I have no alternative but to remit the matter.
64. I do so with regret. It seems to me a pity that the parties must be put to the time, expense and worry of a new hearing before a newly constituted Tribunal. However this is a necessary consequence of the decision on the part of the States to confine rights of appeal to questions of law. The States might have provided for an appeal along the lines of that which exists in planning matters i.e. that the decision was unreasonable. This confers a considerable margin of discretion upon the original decision making body but allows this Court to intervene and make its own decision where it is satisfied that something has clearly gone wrong so that the original decision is unreasonable. This is a lower threshold than the need to find a decision to be perverse (see Anchor Trust Company Limited v Jersey Financial Services Commission (2005) JLR 428 at para 13). But that is not what the 2003 Law provides and in the circumstances I allow the appeal, quash the decision of the Tribunal and remit the matter to a differently constituted Tribunal to decide the matter in accordance with the law as set out in this judgment.
Authorities
Employment (Jersey) Law 2003.
Harvey on Industrial Relations and Employment Law at Division T, para 1630.
Hereford and Worcester County Council v Neale [1986] IRLR 168 at 174
Piggott Bros & Co Limited v Jackson [1991] IRLR 309 at 312.
Iceland Frozen Foods v Jones [1982] IRLR 439 at 442.
British Leyland UK Limited v Swift [1981] IRLR 91 at para 11.
Polkey v A E Dayton Services Limited [1988] AC 344.
Token Limited v Planning & Environment Committee [2001] JLR 698.
Goguelin v Stuart Banks (Carpenters & Builders) Limited [2006] (May, case number 2502037/06).
Barrett Construction Limited v Dalrymple [1984] IRLR 385.
Mclaren v National Coal Board [1988] IRLR 215.
Anchor Trust Company Limited v Jersey Financial Services Commission (2005) JLR 428 p.13.