Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:   246/09

 

 

CLAIMANT:                      Paul Marshall

 

 

RESPONDENT:                Abbicoil Springs Limited

 

 

 

DECISION

The unanimous decision of the tribunal is as follows:

(A)           The claimant was unfairly dismissed.

(B)           The claimant is not entitled to any compensation in respect of that unfair dismissal.

(C)           However, the tribunal has decided to make the claimant an award of four week’s pay pursuant to Article 27(2) of the Employment (Northern Ireland) Order 2003.  Accordingly, pursuant to that Article, the employer must pay to the claimant the sum of £2,172.92.

                                                         

Constitution of Tribunal:

Chairman:              Mr Buggy

Members:              Mr Wilkinson

                              Mr Rosbotham

Appearances:

The claimant was represented by Mr C Gillespie, Barrister-at-Law, instructed by John P Hagan Solicitors.

The respondent was represented by Mr T Sheridan of Peninsula Business Services Limited.

REASONS

1.       The respondent company (“Abbicoil”) is one of three companies which are owned by a particular family (the Callaghan family).  Two of those companies, Abbicoil and Springco (NI) Ltd, are located in Portadown.  The third company is located in Newtownards.  All three of the companies were run as separate entities.  The Managing Director of Abbicoil, Mr Paul O’Hare, was also the Managing Director of Springco and he was also the Managing Director of the third company. 

2.       The claimant was employed at Abbicoil for many years, latterly as the General Manager of Abbicoil.  He was dismissed with effect from 21 November 2008.  In these proceedings, he complains of unfair dismissal.

Sources of evidence

3.      The claimant gave evidence on his own behalf.  Mr O’Hare gave evidence on behalf of the respondent.  We saw an agreed bundle of documents, along with some separate miscellaneous documents.

The facts

4.               We now set out findings of fact which are relevant to the issues which we have determined.

 

(1)            The claimant commenced employment with Abbicoil as Sales Manager in 1996.  He was appointed General Manager of Abbicoil in 2004.  The company had been owned by a Mr Jim Stewart.  He sold out his interest to Mr Raymond Callaghan in December 2003.  At that time, Mr Callaghan already owned Technical Metals and Springco (NI) Ltd (which are the two other companies referred to above).  Unfortunately, Mr O’Callaghan died in June 2008.  His family then appointed Mr Paul O’Hare as Managing Director of Abbicoil, as Managing Director of Technical Metals, and as Managing Director of Springco (NI) Ltd.

 

(2)            The applicant’s duties as General Manager included overseeing all purchasing for Abbicoil, and negotiating with all the major customers of Abbicoil.  He was also responsible for staff training.

 

(3)            At the time of the applicant’s dismissal by way of redundancy, there were approximately 15 employees on Abbicoil’s payroll.  The workforces of Technical Metals Ltd and Springco were of similar size to the workforce of Abbicoil.

 

(4)            In September 2008 a detailed review of the finances of Abbicoil was carried out.  As a result, it became clear that Abbicoil was operating at a substantial loss.  As a result of that revelation, it became obvious that, if Abbicoil was to survive, there would need to be substantial reductions in the staff costs and general overheads of Abbicoil.

 

(5)            Before his appointments to the post of Managing Director of each of the three relevant companies, Mr O’Hare had been primarily concerned in the management of Springco.

 

(6)            On 15 October 2008 the staff of Abbicoil, including the claimant, were given a letter from Mr O’Hare.  The letter indicated that it was the intention of Abbicoil to “downsize” as a consequence of “experiencing difficult trading conditions”.  The letter invited people to volunteer for redundancy.

 

(7)            On 22 October 2008, the claimant had a one-to-one meeting with Mr O’Hare, in which the latter discussed with him the future of Abbicoil, and his own future in particular.  At that time, Mr O’Hare provided the claimant with “Redundancy Criteria Notes” and told the claimant that these were likely to provide the proposed selection criteria in respect of any redundancies.

 

(8)            As a result, the claimant’s response, in the context of the threat of redundancy, was to focus on the application of those Criteria Notes to the circumstances of his own situation.

 

(9)            In reality, the Notes were irrelevant to the claimant’s position, because Mr O’Hare was minded to do away with the post of General Manager altogether, with the result that he would, from then on, personally (in his role as Managing Director of Abbicoil) carry out the role which had previously been carried out by the General Manger.

 

(10)        On 31 October 2008, the claimant again met with Mr O’Hare.  During the course of the latter meeting, Mr O’Hare handed the claimant a letter which confirmed that the claimant was being made redundant.  The letter constituted formal notice of dismissal due to redundancy.  The stipulated notice period was to be 12 weeks, so that the claimant’s employment with the company was to be terminated on 23 January 2009.

 

(11)        The same letter told the claimant that he had the right to appeal the decision to Mr David Sales.

 

(12)        The claimant did exercise that right of appeal.  His appeal was heard on  

13 November 2008.  That appeal was unsuccessful.  In a letter dated

19 November 2008, Mr Sales informed the claimant that his appeal had been unsuccessful.  He gave reasons for the rejection of the appeal.

 

(13)        Two of those stipulated reasons are of particular significance.  First, Mr Sales letter makes the following comments:

 

“Your role as General Manger was viewed by the company to be a single [postholder] role and as such there would be no selection criteria required as the General Manger role was seen not to be required within the business going forward.  Consultation between the original announcement on [15 October 2008] and [31 October 2008] were to ensure that you were given the opportunity to make suggestions that the business could take into account in the hope to avoid compulsory redundancies.  The criteria you refer to within the consultation meeting on [22 October 2008] was the general criteria utilised throughout the business and would be used to select staff from any pools to make [compulsory redundancies] if no roles at Springco could be found”.

 

(14)        So now, for the first time, after the initial dismissal hearing had concluded and after the internal appeal in relation to that dismissal hearing had concluded, the claimant was being told, for the first time, that the question which really mattered, in the circumstances of his own case, was whether or not the company should, or should not, dispense with the General Manager post.

 

(15)        If the claimant had been informed at the appropriate time, that the real question, in his case, was whether or not the General Manager post should be abolished, he would have argued vociferously that there were other and better ways of saving costs.  However, those arguments would have been unsuccessful.  The employer was convinced, and continued to be convinced, on reasonable grounds, that it was appropriate, because of the difficult financial circumstances of Abbicoil, to leave it to the Managing Director of Abbicoil to carry out the roles which had previously been carried out by the General Manager.

 

(16)        During the course of the internal dismissal hearings, the claimant had mentioned that his extensive skills base could have been utilised, if he had been relegated to a general operative/engineering role.  However, the Sales letter of November 2008 made it clear that the respondent had decided that it would be inappropriate to re-allocate the claimant to an operative or engineering role, because of the disparity between the status of the General Manager’s post on the one hand and the status and roles of the general operatives on the other hand.

 

(17)        So the claimant was left to serve out his notice during the latter part of 2008, in a situation in which he still held the post of General Manager of Abbicoil, but Abbicoil had made it clear that his post was to be abolished, and that he was to leave their employment. That was an uncomfortable situation for everybody concerned.  Accordingly, his employment was terminated with effect from 21 November 2008, with pay in lieu of notice being provided to him in respect of the remainder of his notice period.

 

(18)        According to Mr O’Hare, no conclusive decision had been made on the question on whether or not the co-location project shall go ahead, until December 2008, when it was decided that Abbicoil and Springco should be moved to the same site, so as to achieve the costs savings that would become available because of that co-location process.  We accept the truthfulness of that testimony. 

 

(19)        We also accept that, only because of that decision on co-location, a temporary post, which was tasked with co-ordinating and managing the co-location process, then became available.  That temporary post was given to Mr Damien Lamb.  Mr Lamb (as Factory Manager) was at that time, in the latter part of 2008, serving out his notice of termination of employment, having been given notice of dismissal by reason of redundancy. 

 

(20)        Mr O’Hare told us, during the course of his testimony at this hearing, that, as a result of an upturn in business in the meantime, Mr Lamb’s stay of execution at Abbicoil had recently been made permanent, in that he had been allocated to a permanent post at Abbicoil, which had become available in June 2009.

 

(21)        If the claimant had still had been in the employment of Abbicoil in December 2008, fairness would have required the respondent company to have considered the claimant fairly and objectively, alongside Mr Lamb, as a candidate for the temporary integration and co-ordination role.  But, because the claimant’s employment had been terminated in November, he was not an Abbicoil post holder in December.  As a result of that circumstance, any requirement for Abbicoil to choose between the two men, in relation to the temporary role, did not arise.

 

(22)        The remarkable coincidence which led to that situation has caused us to approach this aspect of Mr O’Hare’s testimony with some scepticism.  However, in the end, we are satisfied, on the balance of probabilities, that this truly was a coincidence and that the claimant was not allowed to leave his employment prematurely for the purpose of leaving the field clear for Mr Lamb.  In other words, we are satisfied that the employer’s professed reason for allowing the claimant to go early (the embarrassment or discomfort factor already alluded to above) was the true reason for the premature termination of his employment.

 

(23)        We are satisfied that during the period from September 2008 until November 2008, the respondent had no suitable alternative employment available in respect of the claimant. 

 

(24)        We are also satisfied that, in the circumstances in the latter part of 2008, the decision to do away with the post of General Manager was a proportionate reaction to that situation. 

 

(25)        In the summer of 2008, Mr O’Hare had discussed with the claimant the possibility of the claimant moving to a new procurement post, which would have serviced the requirements, in relation to procurement, of all of the relevant three companies.  However, Mr O’Hare told us that, by the time the relevant redundancies were in contemplation, he had concluded (as a result of his assessment of Abbicoil’s particular economic circumstances, and as a result of the worsening economic situation generally), that the idea of creating a purchasing officer post was not, at that time, viable. 

 

(26)        We are satisfied that there was nothing about the relationship or history of interaction between the claimant and Mr O’Hare which made it inappropriate for Mr O’Hare to be involved in the decision as to whether or not the claimant should be made redundant.

 

(27)        In the interest of readability, and with a view to avoiding unnecessary duplication, we have included some other findings of fact elsewhere in this Decision.

 

The automatic unfair dismissal claim

5.    In the context of the claim of “automatic” unfair dismissal, we now set out the arguments of the parties, a statement of relevant legal principles, and our conclusions.

(1)      Paragraph (1) of Article 130A of the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”) provides that an employee who is dismissed is to be regarded for the purposes of the unfair dismissals legislation as being unfairly dismissed if a statutory dismissal and disciplinary procedure (as set out in the Employment (Northern Ireland) Order 2003) applies in relation to the dismissal, the procedure has not been completed, and the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.

(2)        According to Mr Gillespie, because of one particular fundamental shortcoming, the respondent must be regarded as not having complied with the requirements of the relevant statutory dismissals procedure.  According to Mr Gillespie, the relevant shortcoming was as follows.  At both the internal dismissal hearings, the respondent failed to alert the claimant to the fact that the respondent was minded to treat his post as a one-person redundancy pool (as distinct from treating his post as being one of a number of posts, which together, would constitute, for the employer’s redundancy selection purposes, a composite redundancy pool of selection).

(3)            In Alexander v Brigden Enterprises Limited [2006] ICR 1277, Elias P considered the issue of what information ought to be provided by an employer, in the context of a redundancy procedure, in order for that employer to comply with the statutory obligations which had been imposed by a statutory dismissal and disciplinary procedure (“a DDP”) which is analogous to the procedure which is referred to at Article 130A of the 1996 Order.  In that case, at paragraph 45 of the judgement, Elias P concluded that, at the second stage of the statutory DDP, the claimant must not only be informed of the selection criteria which were applicable in the circumstances of his potential selection for redundancy, but must also be made aware of the employers redundancy selection assessment in relation to himself:

                  “That will give the employee an opportunity to make representations not only about whether the criteria are justified and appropriate but also, more importantly, whether the marking given to him in respect of any particular criterion is arguably unjust, and why.  It may be that he can correct some obvious factual error, such as being attributed with a disciplinary record he does not have, or what appears to be a rogue mark on one of the [criteria], apparently wholly out of line with his work performance.  His response will be difficult to formulate, and very much in a vacuum, without this information”.

(4)            Applying those observations in the context of this case, our conclusions are as follows.

(5)            The claimant was not told that the employer was minded to treat his post as a single-post redundancy pool.  Because of that shortcoming, he did not have enough information to enable him to formulate the informed response which the relevant essential procedural safeguards are designed to allow.  For that reason, both of the redundancy dismissal hearings, in the claimant’s case, were a travesty. Because of that lack of information, the minimum requirements of the relevant statutory DDP were not met, and that was wholly the fault of the employer.

(6)            Against that background, and for those reasons, we are satisfied that the dismissal is automatically unfair, in that the respondent failed to comply with the minimum requirements of the applicable statutory dismissal and disciplinary procedure. 

The “ordinary” unfair dismissal claim

6.    Quite apart from the claimant’s successful claim of automatic unfair dismissal  (pursuant to Article 130A of the 1996 Order), is the dismissal fair or unfair within the meaning of Article 130 of that Order?  In the context of that question, we now set out details relating to the arguments of the parties, the applicable legal principles, and our conclusions:

(1)     For the purposes of the 1996 Order, redundancy will occur if a dismissal is wholly or mainly attributable to the fact that the requirements of the employer’s business for employees to carry out work of a particular kind has diminished (even if the employer’s need for work of that particular kind has not diminished).

(2)            Accordingly, because we accept that the respondent considered it to be appropriate to streamline its management structure, we conclude that the reason for the claimant’s dismissal was redundancy.

(3)            Redundancy is a potentially fair reason for a dismissal, in the context of Article 130.

(4)            Accordingly, we can focus on those matters which are at the heart of Article 130(4).  That paragraph provides that, where the employer has shown a potentially fair reason for dismissal (in this case, redundancy) the determination of whether the dismissal is fair or unfair (having regard to the reason shown by the employer):

(a)            depends 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)            shall be determined in accordance with equity and the substantial merits of the case.

(5)            Mr Gillespie drew our attention to the industrial tribunal decision in Henderson v Look C Limited (case ref no. 1675/08). However, we consider that Henderson is very much a decision based on its own facts; it does not purport to lay down any principles of general application.  We note that this was a case in which the respondent was not represented.

(6)            The consistent trend of relevant case law shows that courts and tribunals are slow, in the context of an unfair dismissal claim, to question an employer’s assessment of the need of the business to declare redundancies, but that they have accepted that a reasonableness test can be applied to the employer’s criteria for selection, to the way in which those criteria have been applied, and to the employer’s efforts to explore the potential for alternative employment before declaring the employee to be redundant. 

(7)            Mr Gillespie argued that, in relation to the selection pool criteria, Bristol Channel Repair Limited v O’Keefe [1977] 2 All ER 258 is authority for the proposition that, in the context of a dismissal for redundancy, in relation to the selection pool criteria, the burden lies on the respondent to demonstrate that it has taken into account the characteristics of its employees when deciding whom to select.   When O’Keefe was decided, the onus of proof (on the question of whether the dismissal was fair), in the context of the contemporaneous Great Britain equivalent of Article 130(4), lay upon the employer.  Now, under Article 130(4) of the 1996 Order, the onus of proof is neutral.  That modification, in relation to the burden of proof, has to be borne in mind when considering the implications of O’Keefe, in the context of the current state of Northern Ireland’s unfair dismissal legislation.

(8)            We are satisfied that, in the factual and other circumstances of this case, we are not entitled to conclude that this dismissal is “unfair” within the meaning of Article 130(4) unless both of two requirements are met:

(a)     The respondent company, in deciding to dismiss the claimant for redundancy, must have acted outside “the range of reasonable responses”.  

(b)    The respondent company must be unable to show that, in the absence of any relevant procedural shortcoming, a dismissal would have been within the range of reasonable responses and, in such a situation the respondent would have decided to dismiss the claimant in any event. 

(9)            The concept of the range of reasonable responses can be summarised as follows.  First, the tribunal must not step into the employer’s shoes.  What this means is that the tribunal must not decide what it would have done itself in the circumstances of the case and must, instead, decide whether the employer has acted reasonably.  Secondly, the test as to whether an employer has acted reasonably is an objective test and the tribunal has to be guided by the fact that in many cases there are a variety of responses open to an employer and that, provided the dismissal was within the limits of that range of responses, the dismissal will be fair.  Thirdly, the function of the tribunal, as an industrial jury, is to determine whether in the particular circumstances of the particular 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 will be fair; it is only if the dismissal falls outside the band that it will be unfair.

(10)        In our view, the failure to provide the claimant with adequate information (which constitutes the basis for the automatically unfair dismissal pursuant to Article 130A(1) of the 1996 Order) also, in the context of Article 130(4), takes the dismissal outside “the range of reasonable responses”.  However, the dismissal is nonetheless not unfair within the meaning of Article 130(4), because of the effect of 130A(2).

(11)        The implication of Article 130A(2) is that a procedural shortcoming will not by itself make a dismissal for redundancy unfair within the meaning of Article 130(4), if the employer shows that he would have decided to dismiss the employee even in the absence of that procedural shortcomings.

(12)        We are certain of the following.  If the employer in this case had provided the claimant with adequate information, at both stages of the internal dismissal hearings, and if, in their role as consultors, the employer had then approached any consequential representations (on the part of the claimant) with an open mind, the outcome would nonetheless have been the same.  That outcome would have been as follows.

(13)        The employer would still have decided that it was a good idea to truncate the management tier; would still have decided to dispense with the post of General Manager (on the basis that the key duties of that post could and would be carried out by the post of Managing Director); and, as a consequence, would still have decided to dismiss the claimant.

(14)        Therefore, the effect of Article 130A(2) is as follows. Despite the shortcomings which have rendered this dismissal automatically unfair within the meaning of Article 130A(1), the dismissal is nonetheless not thereby rendered unfair within meaning of Article 130(4) of the 1996 Order (because of the effect of Article 130A(2) of that Order).

(15)        In deciding to dispense with (as distinct from retaining) the post of General Manager, Abbicoil was, in our view, acting within the range of reasonable responses open to reasonable employers. 

(16)        It has also been argued in this case that the dismissal was unfair within the meaning of Article 130(4) of the 1996 Order because the employer could and should have taken steps to find a way of using the claimant’s many talents elsewhere within Abbicoil or within the other two associated companies (perhaps, for example, by creating a new post of Purchasing Manager, which would deal with procurement on behalf of all three of the O’Callaghan companies).

(17)        We fully accept that, in deciding whether or not an employer has acted within the range of reasonable responses, in the context of Article 130(4), it is relevant to consider whether the employer had any suitable relevant post and, if so, whether the employer offered that post to the claimant.

(18)        However, in this instance, we are satisfied that, throughout the relevant period, Abbicoil did not have any actual or anticipated vacancies in respect of any suitable alternative post. 

(19)        In the present context, the relevant period consists of the whole period beginning when the redundancy of the claimant was first contemplated, and ending when the termination of the claimant’s employment took effect.  In our view, an employer is under no obligation, with a view to acting fairly within the meaning of Article 130(4) of the 1996 Order, to create any post (which does not already exist) for the purpose of seeking to avoid the dismissal (on the ground of redundancy) of the claimant.

(20)        For all those reasons, and against that background, the dismissal in this case not unfair within the meaning of Article 130(4) of the Order.

Compensation for unfair dismissal

7.              How much compensation, if any, should be awarded to the claimant, in respect of his automatically unfair dismissal?  In that context, we now set out some of the main arguments, the applicable legal principles and our conclusions:

(1)            Any compensation available in respect of unfair dismissal will consist of a basic award and a compensatory award.

(2)            Article 156 provides for reductions to be made from basic awards in certain circumstances.

(3)            Article 154(1A) provides that, as a general rule, any automatically unfair dismissal pursuant to Article 130A(1) must amount to at least four week’s pay.  However, Article 154 does not limit the scope of Article 156.  Therefore, because of the effect of Article 156(4), the apparent entitlement to four week’s pay is largely meaningless.

(4)            Article 156(4) provides that the amount of any basic award is to be reduced by the amount of any payment made by the employer to the employee on the ground that the dismissal was by reason of redundancy.

(5)            The effect of Article 156(4) is that, if you received your full statutory entitlement to redundancy pay, you will not be entitled to any basic award.

(6)            The claimant did receive his full statutory entitlement in respect of redundancy pay.  That payment has to be deducted from the amount of any basic award which would otherwise be due to the claimant.  Therefore, in the circumstances of this case, the claimant is not entitled to any basic award.

(7)            The next question is whether or not the claimant is entitled to any compensatory award.  In our view, he is not entitled to any such award, against the following background and for the following reasons.

(8)            As already indicated above, we are satisfied that it is 100% certain that the claimant would in any event have been dismissed, with effect from the date on which his dismissal did in fact take effect, even if the relevant procedural shortcomings (the shortcomings which resulted in this dismissal becoming an automatically unfair dismissal) had not existed.  Accordingly, the claimant is not entitled to any compensatory award in respect of his dismissal: See Polkey v AE Dayton Services Ltd [1988] ICR 142).

An employment particulars award?

8.              In the context of that question, we now set out details relating to arguments of the parties, the applicable legal principles, and our conclusions;

(1)            Article 27(1) of the Employment (Northern Ireland) Order 2003 (“the 2003 Order”) applies to proceedings before an industrial tribunal relating to an employee’s claim of unfair dismissal.

(2)            The effect of paragraph (2) of Article 27 is that if, in such proceedings, the tribunal finds in favour of the employee, but makes no award to him in respect of the unfair dismissal claim, and when the proceedings were begun the employer was in breach of its duty to provide a written statement of initial employment particulars or of particulars of change, the tribunal must, as a general rule, make an award of  “the minimum amount”, and may, if it considers it to be just and equitable in all the circumstances, award “the higher amount”.

(3)            The general rule does not apply if there are exceptional circumstances which would make an Article 27(2) award (or increase) unjust or inequitable.

(4)            There is no doubt that the respondent employer never provided the claimant with a written statement of his employment particulars, or with a written statement of changes to his employment particulars.  That default existed on the date of coming into operation of Article 27 of the 2003 Order and it continued until the termination of the claimant’s employment.  It continued even when the claimant presented Mr O’Hare’s predecessor with a draft statement of employment particulars in respect of himself.

(5)            Accordingly, we are satisfied that, when the present proceedings were begun, the employer was in breach of its duty to the employee in respect of the provision of employment particulars.

(6)            We know of no circumstance which would make it unjust or inequitable to make an award to the claimant pursuant to Article 27.

(7)            Article 27(4) of the 2003 Order provides that references to “the minimum amount” are references to an amount equal to two weeks’ pay, and that references to “the higher amount” are to an amount equal to four weeks’ pay.

(8)            We are satisfied that, at the time of the termination of his employment, the claimant’s gross weekly pay was £543.23.

(9)            We consider that, in the circumstances of this case, it is just and equitable to award “the higher amount” of four weeks’ pay which amounts to an aggregate figure of £2,172.92.

(10)         In arriving at that conclusion, we have taken account of all the circumstances of the case.  In particular, we have taken account of the following. 

(a)     The duration of the breach, during the period which has elapsed since Article 27 came into operation, has been lengthy. 

(b)    The claimant made determined efforts, which were unsuccessful, to persuade the employer to cease to be in breach of its obligation to provide the particulars.

 

Interest

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

 

 

Chairman:

 

 

Date and place of hearing:         28 July 2009 and 20 August 2009, Belfast.    

 

 

Date decision recorded in register and issued to parties: