Industrial Tribunals Northern Ireland Decisions

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Cite as: [2003] NIIT 3159_01, [2003] NIIT 3159_1

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THE INDUSTRIAL TRIBUNALS

CASE REF: 3159/01

APPLICANT: Denis Rogan

RESPONDENT: D M Engineering (NI) Limited

DECISION

The unanimous findings of the tribunal is that the applicant was unfairly dismissed and it awards him compensation of £1706.37. In addition the applicant was not provided with written terms and conditions of employment.

Appearances:

The applicant was represented by Messrs C Hamill and P Coll, of counsel, instructed by Wilson Nesbitt, Solicitors

The respondent was represented by Messrs G Grainger and McEvoy, of counsel, instructed by McIvor Magill, Solicitors

These reasons are given in extended form.

The applicant claimed unfair dismissal, breach of contract and failure to provide an itemised statement of terms and conditions. The respondent denied the applicant's claims.

The applicant accepted that the breach of contract claim related to the applicant's redundancy and the loss flowing from that redundancy.

The Tribunal made the following findings:-

(a) The applicant was employed by the respondent from 4 May 1997 to 31 July 2001, becoming mechanical services manager in March 1999. The applicant did not receive a statement of his particulars of employment.

(b) The respondent decided to dismiss the applicant on 28 June 2001, effective from 31 July 2001. The respondent communicated its decision to the applicant on 29 June 2001.

(c) Redundancy is a reason that can render a dismissal fair (Article 130 Employment Rights (NI) Order 1996.

(d) There was a redundancy situation in the respondent's business. The requirements of the business had ceased or diminished or were expected to cease or diminish (Article 174(1)(b)). In so concluding the tribunal was influenced by the following matters:-

(i) Mr Dennison, the managing director, gave evidence of the losses in the mechanical services division ie jobs were not profitable; bigger jobs had not been successful; and the respondent had been unsuccessful in a big contract for which it had tendered.

(ii) The accounts showed losses, mainly in the mechanical services division.

(iii) The management and the directors were of the view that the mechanical services division was not going well.

(iv) The applicant was aware of difficulties in the mechanical services division.

The dismissal of the applicant was attributable to that state of affairs (Murray v Foyle Meats [1999] ICR 827). In so concluding the tribunal took into account the following matters:-

(i) The respondent positively made that connection throughout.

(ii) There was little or no evidence to support the applicant's contention that the dismissal arose from a frostiness in the relationship between the applicant and the respondent or that the relationship had been poisoned because of the applicant's doubts about the St George's Hotel project.

(e) In all the circumstances the dismissal for redundancy was unfair. In so concluding the tribunal took into account the following matters:-

(i) Following a board meeting, in December 2000, the respondent did not advise the applicant, the mechanical services manager, of its concerns about the viability of the mechanical services division nor that it had decided to monitor the division for 6 months nor that 2 directors would be overseeing the division.

(ii) The respondent did not give any warning to or have any consultation with the applicant prior to his dismissal.

(iii) This is not one of those exceptional cases where a reasonable employer would have concluded that consultation was futile (Mugford v Midland Bank [1997] ICR 399). In so concluding the tribunal was influenced by the following matters:-

(aa) They could have discussed ways of avoiding redundancies, saving costs elsewhere, alternative employment, selection criteria, the pool of selection and re-organisation.

(bb) Mr Dennison stated to the tribunal that he would have considered any reasonable proposal to avoid the redundancy.

(iv) The respondent did not offer to the applicant suitable alternative employment which was available. In so concluding the tribunal was influenced by the following matters:-

(aa) The respondent assumed the applicant would not accept an alternative position as it would have involved a reduction in salary and status. The authorities suggest this should not be assumed.

(bb) The respondent wrongly assumed that the applicant did not have computer skills.

(cc) There was alternative work as an estimator or supervisor. The applicant had done both jobs throughout his employment and had trained the estimator.

(iv) It was unclear what were the selection criteria for redundancy and how they were applied. Mr Dennison gave evidence that a selection criteria had been applied which included, "service and commitment to the company etc, etc''.

(f) The applicant is entitled to compensation. In calculating the amount of compensation the tribunal had regard to the following matters:-

(i) The applicant does not make a claim for any loss of pay as he became re-employed on 29 July 2001. He lost a number of fringe benefits for which he does claim.

(ii) By 1 June 2002 the loss attributable to the dismissal had ceased. His loss was £1971.51 per month taking into account his salary and fringe benefits. His salary in his new job was by 1 June 2002 £1847.27 and he was also getting fringe benefits of £40 per week of diesel and a mileage allowance that was not quantified for the tribunal.

This approach follows the principles set out at Harvey on Industrial Relation and Employment Law Volume 1 D1 [2685.01].

(iii) The adduced evidence did not demonstrate a loss to the applicant of the value of his fuel allowance by reason of his £40 per week diesel and his un-quantified mileage allowance.

(iv) The bonus paid by the respondent was discretionary and the applicant was not guaranteed the benefit of a bonus and no allowance is made for a bonus.

(v) The applicant had the use of a company car for personal use as well as business use. The applicant suffered the loss of company car from 1 August 2001 to 1 June 2002. The tribunal uses the valuation of that used in the applicant's P11D that is £92.60 per week for 43.29 weeks totalling £4008.65.

(vi) The applicant sustained a loss of health insurance of £138 up to 1 June 2002.

(vii) The applicant sustained an additional premium of £493.25 for his car insurance because of the respondent's failure to confirm that he had a full no claims bonus. This is allowed for 1 year as evidence was not adduced of the state of his no claims bonus after 1 year.

(viii) The applicant's claim for compensation should be reduced by 1/3 to reflect the possibility of his being made redundant had a proper selection been carried out. The pool of selection would have included 3 persons.

(ix) A further reduction is necessary to reflect that the applicant had he remained in employment would have done so at a lower salary but precise details of the new salary were not given in evidence.

(g) Accordingly the tribunal awards compensation as follows:-

Basic Award:

£240 X 6 = £1440.00

Reduced by redundancy payment of = £2826.90

Balance of Basic Award = £ 0.00

Compensatory Award:

Loss of health insurance = £ 138.00

Loss of a company car = £4008.65

Additional car insurance premium = £ 493.25

Total loss of benefits = £4639.90

Reduction by 1/3 = £3093.27

Less balance of redundancy payment = £1386.90

Balance = £1706.37

Reduction to reflect lesser salary to = £1506.37

Compensatory Award = £1506.37

Loss of statutory rights = £ 200.00

Total = £1706.37

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

Chairman:

Date and place of hearing: 6, 16 and 20 January, 13 and 17 February and 21 March 2003, Belfast

Date decision recorded in register and issued to parties: