Industrial Tribunals Northern Ireland Decisions

 


Duggan v Crossgar Poultry Ltd (Unfair Dismissal) [2002] NIIT 1879_01 (14 June 2002)

THE INDUSTRIAL TRIBUNALS

CASE REF: 1879/01

APPLICANT: Gavin Duggan

RESPONDENT: Crossgar Poultry Limited

DECISION

The unanimous decision of the tribunal is that the applicant had been unfairly dismissed and order the respondent to pay to the applicant the sum of £1,490.

Appearances:

The applicant was represented by Mr McKee, Barrister-at-Law, instructed by Haughey & Co, Solicitors.

The respondent was represented by Mr McGleenan, Barrister-at-Law, instructed by Bigger & Strahan, Solicitors.

1. The applicant was a time served joiner and was employed by the respondent to carry out maintenance work. It was the applicant's contention that he was involved in general maintenance whereas the respondent contend that his duties related to the maintenance of capital building works.
2. The applicant had been employed with the respondent from 1994 to 1997 when he left to go to Australia to work. When he returned from Australia he was re-employed from 8 January 1998 to 17 January 2001 i.e. the date of the termination of his employment. The applicant accepted that there had been a break in his employment and his claim therefore related to his employment from 8 January 1998.
3. Mr Paul Bell, Managing Director, told the tribunal that the main function of the respondent was processing poultry, principally chickens. Since 1992 when chickens could be imported there had been a massive downturn in the markets. In 1999 they lost a contract with Moypark because Moypark could buy cheaper chickens from Monaghan. Although the company had a turnover of over £10,000,000 it profits had fallen from £600,000 to £190,000. At this time the company's auditor, Mr John McMahon advised them that the business was not doing well and they should take a look at their maintenance costs. Mr McMahon did not attend to give evidence, however Mr Michael Morrisey, Financial Controller, did give evidence and he said that maintenance costs for the year 2001 amounted to £263,000 and it was concluded that savings of £50,000 could be made by ceasing the building maintenance contracts of employment. Following a meeting of the family, who owned the respondent company, in December 2000 it was decided to close down the department dealing with capital works maintenance and make the employees redundant. The applicant's father, who was maintenance manager, was made redundant as well as the applicant. Dessie Casement who was a bricklayer and was also involved in capital works maintenance but who was engaged on a self-employed basis was told that his employment would no longer be required. The only maintenance employee not made redundant was Mr Terence Casement who was engaged in maintenance work within the factory.
4. Mr Bell said that following the decision to close the capital maintenance department he spoke to the applicant on 3 January 2001 and informed him that he was being made redundant. Mr Bell said that there was no rush in him leaving and he could have two or three weeks to get a new job. He said the applicant suggested 17 May 2001 as a termination date and this was agreed. The applicant in his evidence said he did not recollect that this date was suggested by him.

Mr Bell agreed there had been no prior consultation and no criteria had been set for selection. The decision has been made that the company did not need a joiner or a bricklayer and therefore they were being made redundant.

An offer of alternative employment as process operative was made following the intervention of the Labour Relations Agency but the respondent accepted that this offer was unlikely to be suitable to the applicant as he was a tradesman.

5. The applicant contended that his maintenance duties did not solely relate to capital works. He had on many occasions assisted in the maintenance within the factory and in fact had worked in the factory when Terry Casement was on holidays.

The tribunal was referred to timesheets for the applicant for weeks commencing 20 March 2000 to 5 June 2000. It showed the applicant had been generally employed carrying out building and joinery work. In fact quite a lot of his time was spent installing a new kitchen in Mr Bell's father's house. It was the applicant's case that these only showed his work for those weeks and did not necessarily reflect the work that he did in other weeks.

The applicant contended that the subsequent employment of R Blythe to assist Terry Casement clearly demonstrated a redundancy situation did not exist. The evidence of the respondent on this matter was that Blythe was employed to assist Terry Casement when it was necessary for Casement to have some assistance but he was not employed to carry out maintenance duties.

6. The applicant said that he had signed on for benefit following the termination of his employment but he had not received any. At the beginning of March 2001 he had gone to work in a friend's pub near Cheltenham. His friend gave him a job working in the bar and he lived above the bar and was paid £85 net per week and was given his board and keep.

The applicant admitted that he had not attempted to get work as a joiner since his employment was terminated. It further transpired that he worked four hours a day on Thursday and Friday nights from 7.00 p.m. to 11.00 p.m. and also on Saturdays and Sundays. He did not have any other work and had not tried to get any other work.

7. Mr McGleenan referred to the case Murray –v- Foyle Meats Limited and submitted that it was clear from the evidence that economic factors required changes to be made. It was at the suggestion of the company auditors that the respondent looked at their maintenance costs and decided that the company did not need a department solely for building maintenance and decided to close it down. The employees in that department were made redundant, one of whom was the applicant.

As regards the failure of the respondent to look for alternative employment Mr McGleenan relied upon the EAT's decision in Barrett Construction referred to in Harveys Industrial Relations & Employment Law handbook Volume 1 D1 page 1727 "it may be reasonable for the employer to assume that this will be unacceptable to the employee unless the employee states otherwise". He said the applicant had failed to raise the matter at the meeting on 3 January 2001. An offer was subsequently made when the Labour Relations Agency intervened but the offer of a production operative was not acceptable to the applicant.

Mr McGleenan contended that the applicant had failed to mitigate his loss. The evidence of Mr Paul Bell was that he was of the opinion that the applicant could have found a job as a joiner within a short period of leaving his employment and it was clear from the applicant's own evidence that he had not tried to get such a job. He also contended that it was difficult to piece together the true picture of the applicant's loss from the evidence of the payslips presented by the applicant to the tribunal.

8. Mr McKee also referred the tribunal to the case of Murray –v- Foyle Meats to support the contention that there had not been diminution of work required to be done. The level of maintenance had not changed and in fact following the closing of the maintenance department the respondent had engaged R Blythe to assist Terence Casement on maintenance. The reason for the dismissal was pure economics i.e. cutting costs. He referred the tribunal to the guidelines cited in Williames –v- Compair and submitted there had been a total failure on the part of the respondent to follow these guidelines. The respondent had also failed to pay any heed to the Code of Practice issued by the Labour Relations Agency.

He referred to the case of Mugford –v- Midland Bank (1997) IRLR 208 and submitted that consultation was not letting someone know they are being made redundant – this has to be a two-way process.

As far as the respondent's reliance upon the decision in Barrett Construction in respect of offers of alternative employment Mr McKee drew the tribunal's attention to Harvey on Industrial Relations Volume 1 D1 paragraph 1728 and to the cases cited there which support the premise that the applicant should have been given the opportunity to consider alternative employment and should have been given sufficient information to enable him to make a realistic decision whether to accept a job or not.

Mr McKee submitted that the applicant's wages and benefits presently could be valued at £140 per week and therefore he submitted that his net loss was £70 per week. He also sought to recover £64 costs incurred in travelling to England for the job.

9. The first question to be determined by the tribunal is "was there a redundancy situation?". Secondly was there a diminution of some work of a particular kind which led to the dismissal? There were the questions referred to by Lord Irvine LC in the House of Lords decision in Murray –v- Foyle Meats. Two questions have to be considered. The first is whether one or other of two various dates of economic affairs exist. In this case the loss of the Moypark contract and the subsequent reduction in profits from £600,000 to £190,000 and the decision of the respondent to close down the building maintenance department. The second question is whether the dismissals were attributable wholly or mainly to that state of affairs.

The tribunal find as a fact that the decision of the respondent to close down the building maintenance department because of the economic turndown of the company profits gave rise to a redundancy situation.

10. The tribunal then considered whether the applicant had been fairly selected for redundancy. The tribunal accept the respondent failed to follow what are deemed to be good practices with regard to redundancy. No consideration was given as to the criteria for selection particularly having regard to the applicant's contention that he could have done the same work as Terence Casement.

The respondent's contention that no criteria was needed as a decision was made to shut down the department meant that all in that department were redundant.

The tribunal accept the respondent was entitled to consider that Terence Casement, whose prime duty was to service and maintain the machines etc on the factory floor should be retained in preference to the applicant. The tribunal accept that the applicant assisted on occasions and undertook some of Terence Casement's duties when he was on leave. However his prime duties related to building maintenance with an emphasis on joinery.

The tribunal accepted the respondent failed to consult with the applicant prior to making him redundant. They had called him in to the office on 3 January 2001 to inform them that he was to be made redundant. He was so shocked that he was unable to react. There had been no consideration given as to whether there would be any alternative employment for him.

Having regard to the decision in Mugford –v- Midland Bank the tribunal accept failure to consult will normally make a decision to dismiss unfair unless it finds that a reasonable employer would have concluded that consultation would have been absolutely futile in the particular circumstances of the case. In this case the applicant had no knowledge of impending redundancies and on occasions when work was slack in the factory he worked in the home of Mr Bell Senior and had installed a kitchen in the house over a period of some weeks.

The tribunal noted that an offer of alternative employment was not considered until the Labour Relations Agency interceded, however, the offer was unacceptable to the applicant.

The tribunal were of the unanimous opinion that the respondent failed to act reasonably having regard to the decision of the House of Lords in Polkey –v- Dayton Services Limited [1987] 3All ER line 74. Lord Bridge in that decision said "the employer will normally not act reasonably unless he warns and consults any employees affected or their representative, that was 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". The tribunal concluded that the respondent failed in these respects and the tribunal's decision is that the applicant had been unfairly dismissed.

11. The tribunal refers to the case of Elkouil –v- Coney Island Limited where the Employment Appeal Tribunal stated that where a tribunal finds an employee unfairly dismissed on grounds of redundancy because of lack of consultation it has to look at what is the appropriate award under the legislation. In Northern Ireland this is dealt with under Article 157 of the Employment Rights Northern Ireland Order 1996 namely such award as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the applicant in the consequence of his dismissal in so far as that loss is attributable to action taken by the employer.

The tribunal noted the applicant although a time-served joiner had not sought work as a joiner since his date of dismissal. He had been content to go and work as a barman part-time for 17 hours a week, mainly in the evenings, and had not sought work of any nature otherwise. The tribunal were of the opinion it would not be just and equitable to make an award for future loss as in the opinion of the tribunal this loss could not be attributable to action taken by the employer.

12. The tribunal then considered compensation to be paid to the applicant.

(a) Basis Award

3 weeks @ £230 = £690

Less redundancy payment = £690

Net basic award Nil

(b) Compensatory Award

The applicant's employment terminated on 17 January 2001 and by his evidence he started work with his new employer at the beginning of March 2001, therefore his loss of wages for this period was calculated as:-

6 weeks @ £215 per week = £1,290

Loss of statutory rights £ 200

Total compensation £1,490

The prescribed element £1,290

Period of prescribed element

17 January 2001 to 1 March 2001

Excess in monetary award over

prescribed element £ 200

The attention of the parties is drawn to the annex which forms part of the decision relating to the Recoupment of Jobseeker's Allowance/Income Support.

(The applicant's evidence was that he was not paid either of the above but that does not mean that he was not entitled to such allowance or benefit and the Regulations therefore apply).

This is a relevant decision for the purpose of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

____________________________________

Date and place of hearing: 6 March 2002 and 26 March 2002, Belfast

Date decision recorded in register and issued to parties: 14 June 2002