Industrial Tribunals Northern Ireland Decisions

You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Vance v Charles Hurst Ltd [2011] NIIT 01501_10IT (24 June 2011)
URL: http://www.bailii.org/nie/cases/NIIT/2011/01501_10IT.html
Cite as: [2011] NIIT 01501_10IT, [2011] NIIT 1501_10IT

[New search] [Printable RTF version] [Help]

THE INDUSTRIAL TRIBUNALS

CASE REF: 1501/10

CLAIMANT: Richard Vance

RESPONDENT: Charles Hurst Ltd

DECISION

The unanimous decision of the tribunal is that the claimant was unfairly dismissed and is entitled to compensation from the respondent in the sum of £65,300.00.

Constitution of Tribunal:

Chairman: Mr P Kinney

Members: Mrs V Walker

Mr A White

Appearances:

The claimant was represented by Mr C Hamill, Barrister-at-Law, instructed by Worthingtons, Solicitors.

The respondent was represented by Mr P Bloch, of Engineering Employers Federation.

Issues

1. At the outset the parties agreed the following issues for determination by the tribunal:-

(a) Was the claimant dismissed by the respondent for a fair reason, namely redundancy?

(b) Was the dismissal of the claimant automatically unfair because the claimant was selected for redundancy and dismissed for asserting a statutory right, namely the taking of parental leave?

Findings of fact

2. The claimant started employment with the respondent on 10 September 1990 as a trainee sales executive. At the date of his dismissal on 8 March 2010 he was employed as centre manager for the Lexus Showroom in the respondent’s Boucher Road, Belfast, site. The respondent company is owned by Lookers PLC, a company with a turnover in excess of one billion pounds per annum. The respondent has its main operation at Boucher Road, Belfast, but also has branches at Newtownabbey, Dundonald, Lisburn, Newtownards and Portadown. The respondent sells a wide variety of motor vehicles, essentially divided according to brand or franchise. Its management structure from the top down was Chairman followed by a series of Franchise Directors who typically would have responsibility for more than one franchise. Each franchise had a general manager and there was then a tier of sales managers, service managers and parts managers reporting to the relevant general manager.

3. The claimant was a sales manager for Lexus and reported to Mr Devitt, the general manager for Toyota and Lexus, until 2006. Lexus is owned by Toyota. The franchises had a shared service manager and a shared parts manager. In 2006 the claimant was made centre manager for Lexus. He no longer reported to Mr Devitt but reported directly to Mr Haining the Franchise Director. As centre manager the claimant had a sales manager’s role and function. He also had responsibility for the Lexus site and reported directly to the franchise director. He had more financial responsibility than a sales manager for stock and debts and for ensuring compliance with franchise standards. Parts and services remained shared roles between Toyota and Lexus. Toyota had a separate sales manager, Mr McQuitty.

4. The respondent’s business suffered a decline in sales generally. The Lexus franchise was making a substantial loss from 2008. The respondent made no criticism of the claimant in the performance of his role. During this difficult trading period the claimant had spoken to Mr Haining on a number of occasions to seek reassurance about his position. He had been reassured that his job was not at risk. It was agreed that he was good at his job. In December 2009, during the period when Lexus was making substantial losses, the claimant asked Mr Haining for parental leave. He wished to spend some time with his young family and sought two weeks leave over the Christmas period. Mr Haining asked for documents to support the request, including birth certificates for the children. The claimant provided these documents to HR and took the leave. Nothing was said to him at the time.

5. At an accounts review meeting on 10 February 2010, led by Mr Haining, the claimant attended with other managers. Mr Paul McGookin was also present. He had recently had time off for paternity leave. Mr Haining made a comment to the effect that he would put an end to parental/paternity leave. The claimant felt the comment was directed at him and Mr McGookin. There was dispute in evidence as to whether or not such a comment was made. The tribunal has determined the comment was made for the following reasons:-

(a) The claimant gave clear and cogent evidence of the matter and also raised it contemporaneously during his redundancy process.

(b) The tribunal heard evidence from Mr Campbell who supported the claimant’s evidence although he felt the comment at the time was made in jest.

(c) The tribunal also heard from Mr McGookin who denied the comment was made. However, the tribunal was not as impressed with Mr McGookin’s evidence as that of Mr Campbell. Mr McGookin’s evidence was inconsistent in parts.

(d) Mr Haining himself in his evidence did not deny making the comment. He could not remember making the comment but accepted he may have said something about leave. He confirmed that his sentiment would be one of dissatisfaction with anyone taking leave in the period from January to March, the busiest period of the year. He also said that he was unhappy with the amount of time being taken by managers as leave in a business that was under-performing.

6. On 15 February 2010 the claimant was approached by Mr Haining and advised that he was at risk of redundancy. The reason given was the business had been sustaining losses for some time. The claimant was shocked by this news. He thought that his conversation with Mr Haining was to discuss a new pay structure for managers. The new pay structure was being introduced and other managers were being consulted and informed. In fact, the claimant was never spoken to about the pay structure or given any reason, at the time, for not being included within the new system. The claimant was handed a letter at that meeting which set up a further consultation meeting on 19 February 2010.

7. The claimant and Mr Haining met on 19 February 2010. No one else attended. The claimant had prepared a list of questions to ask. Mr Haining was following a proforma sheet. This document was not available on discovery. The claimant, however, made a recording of the meeting which the tribunal heard. The claimant was told by Mr Haining that his post was at risk of redundancy because of the financial situation. The respondent felt that the claimant’s role could be re-organised with Mr Devitt and Mr McGookin taking on most of the responsibilities. Mr Devitt had previously been spoken to by Mr Haining although Mr Haining declared, at the meeting, that no one else had been told. Mr Haining told the claimant that redundancy was 99.9% certain. He also told the claimant that the respondent had not considered any alternatives to making the claimant’s post redundant. The claimant asked if anything more radical had been considered and suggested part-time working. Mr Haining changed the subject and did not answer the query. Mr Haining described the claimant’s skills-based as that of a sales manager. When the claimant spoke to how shocked he was and that he had not been able to sleep or eat, Mr Haining responded “welcome to the new world”. Mr Haining told the claimant that on a personal level he could sleep at night on his decision and would not shed any tears over it. Mr Haining had a list of other roles with him but agreed that they were not suitable alternatives for the claimant. Mr Haining informed the claimant that he hoped to complete the redundancy process by the end of February.

8. Mr Haining subsequently attempted to arrange a further meeting with the claimant for 25 or 26 February 2010. This was not possible. Mr Haining was then out of the country until 8 March 2010. In his absence and at his request, Joyce Senescal, human resources director, arranged a further consultation meeting with the claimant on 2 March 2010. The claimant was keen to wait for Mr Haining to return but the respondent was anxious to move on with the process. In evidence the respondent’s witnesses said that this was done in consideration of the claimant as delays would not be helpful to his situation. However, at no stage did the claimant seek to speed up the process and indeed asked for more time to help him deal with the issues.

9. Ms Senescal wrote to the claimant on 4 March 2011 summarising the redundancy consultation. An e-mail was also sent by Ms Senescal to the claimant on 4 March 2010 setting up a further meeting between the claimant and Mr Haining on 5 March 2010. On 5 March 2010 the claimant was handed a letter by Mr Haining confirming his redundancy with effect from 8 March 2010. The claimant appealed this decision by letter of 8 March 2010. He set out 8 detailed points to his appeal. These included that the respondent had failed to use a suitable selection pool and did not objectively score or use a scoring matrix. He also contended the decision to make him redundant was predetermined and the process a sham. He contended his dismissal was unfair as it was as a result of his asserting his statutory right to parental leave. The claimant had raised these various issues during the consultation period, apart from the issue of parental leave.

10. The claimant’s appeal was heard by Mr Brankin, another Franchise Director of the respondent, on 24 March 2010. The claimant handed Mr Brankin his appeal letter annotated with further points. Mr Brankin read the letter. At the meeting the claimant repeated his concerns. In his evidence, Mr Brankin accepted that he would be in a position to assess and mark managers across the different franchises he was responsible for. He confirmed that he had never conducted a redundancy appeal before and had received no training. He was not senior to Mr Haining in the respondent’s structure. He confirmed he carried out no investigations on receipt of the claimant’s letter of appeal. After the appeal hearing, he contacted other managers to enquire about vacancies. Two vacancies for business managers were identified but Mr Brankin did not inform the claimant about these. He made no enquiry from the claimant during the meeting as to the details of his allegations concerning parental leave. In fact when the claimant referred to the issue of parental leave, Mr Brankin changed the subject. He explained in evidence that he wanted to confirm if any comments had been made with Mr Haining. Mr Brankin subsequently met with Mr Haining. He put it to Mr Haining that the claimant alleged his redundancy was related to his request for parental leave. Mr Haining refuted this. Mr Brankin did not ask any questions about the meeting of 10 February 2010 or any alleged comments at that meeting. He had not explored with the claimant the details of his allegations concerning his parental leave and made no investigation, other than his question to Mr Haining. He explained that he made no further investigations as he was “satisfied by the conviction of [Mr Haining’s] answer”.

11. Mr Brankin wrote to the claimant on 14 April 2010 dismissing his appeal. Amongst the findings Mr Brankin made were the conclusion that the claimant’s position was unique. Each dealership was a business entity in its own right. He also found that the claimant was asked about possible alternative ways forward but the suggestions were not thought to be reasonable alternatives. Mr Brankin referred to he claimant’s suggestion that his role was made redundant because he took parental leave and planned to take further leave in the future. He stated in the letter that he did not consider there was any connection between the leave and the proposal to make the claimant’s job redundant. Finally, he told the claimant that since he left no other position which might be considered suitable had arisen.

The law

12. Article 130(1) of the Employment Rights (Northern Ireland) Order 1996 (‘ERO’) provides that it is for the employer to show the reason for the dismissal. One potentially fair reason is redundancy. If the employer shows that the reason for the dismissal was redundancy then the decision whether or not the dismissal was unfair depends on whether in all 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. The issue will be determined in accordance with equity and the substantial merits of the case. The tribunal must not substitute its own view for what was the correct course to adopt. The tribunal must determine if a decision to dismiss fell within a band of reasonable responses which a reasonable employer might have adopted.

13. In Williams v Compar Maxim Ltd [1982] IRLR 83, the EAT provided guidance on the standards to expect in determining whether a dismissal for redundancy is fair. These included the employer should give as much warning as possible of impending redundancies, should seek to establish criteria for selection which can be objectively checked against such things as attendance records, experience, efficiency at the job or length of service, to consult with the employee and, where possible, to see whether alternative employment could be offered. Establishing the pool of employees from which a redundancy selection must be made must be fair. Ultimately it is for the employer to determine the pool.

14. There are certain situations in which the dismissal by an employer for a specific reason will be treated as being automatically unfair. This includes taking leave for family reasons (Article 131 ERO). This includes parental leave. According to Harvey on Industrial Relations and Employment Law, Volume 1, Division D1, Paragraph 1963, the burden of proof is expressed neutrally but the burden will be on the employer. The employee will have to produce sufficient evidence to raise the question of whether the selection may have been for an automatically unfair reason. If the tribunal does not accept the employer’s reason then it is open to it to accept the reason put forward by the employee or decide that a different reason was the true reason for dismissal.

Conclusions

15 It is clear that the respondent was suffering financial difficulties because of market conditions and it is common case that the Lexus franchise was making substantial losses in the period from 2008 to the claimant’s dismissal and beyond. The first question for the tribunal to determine, however, is whether the reason for the claimant’s dismissal relates to that financial situation or to his taking of parental leave in December 2009.

16. The claimant had worked for the respondent since leaving school. There was no criticism, by the respondent, of the claimant’s work and he had risen in the respondent’s organisation to the level of centre manager for the Lexus franchise. Lexus had been making losses for some considerable time and understandably the claimant had sought reassurance from his manager, Mr Haining, this would not affect his position. He obtained those reassurances. In and around January 2010 this situation apparently could no longer be maintained and the respondent decided that the claimant’s position must be made redundant. The tribunal concludes that the reason for the redundancy situation was the claimant’s availing of parental leave for the following reasons:-

(a) The tribunal received and heard no evidence as to what, if anything, triggered the need for the redundancy process to commence in mid-January 2010.

(b) Although this decision was taken in mid-January 2010 the claimant was not informed of being at risk until 15 February 2010 and there then followed a process which Mr Haining had anticipated could be completed within two weeks, although in fact it took slightly longer.

(c) The meeting of 15 February 2010 at which the claimant was told his position was at risk immediately followed the accounts review meeting on 10 February 2010 where Mr Haining made comments about stopping parental or paternity leave.

(d) Mr Haining made no secret of his disappointment and disapproval of those who would take leave around the busiest times of the car business’ year and expressly expressed his disappointment at those who would take leave in a business which was under-performing, as clearly the Lexus franchise was.

(e) The tribunal heard the audio tape of the meeting between Mr Haining and the claimant on 19 February 2010. From that tape and the comments made by Mr Haining it is the tribunal’s conclusion that Mr Haining’s mind was made up at that point. He told the claimant that it was 99.9% certain his redundancy would go through, told the claimant that no alternatives to that redundancy had been considered, and went on to tell the claimant ‘welcome to the new world’ and that he would lose no sleep over his decision. When the claimant sought to open up discussion on alternatives, Mr Haining changed the subject.

(f) The claimant was keen to continue his discussions with Mr Haining with whom he perceived he had a good relationship. Mr Haining, however, was keen to push this process through as quickly as possible and in his absence arranged for Ms Senescal to come across from England to conduct a further consultation meeting.

(g) Mr Haining told the claimant he had not discussed the matter with anyone else. In fact, he had already discussed it with Mr Devitt seeking to bring Lexus back under Mr Devitt’s control.

(h) There was no explanation for the delay in telling the claimant that his position was at risk and no documents appear to exist to identify the respondent’s reasoning. Having apparently delayed the commencement of the redundancy process for a month he then would not allow the claimant to make any delays in the process.

(i) The claimant was excluded from the discussions held by Mr Haining with managers about the new wages structure.

(j) On appeal no serious attempt was made to investigate the claimant’s concerns regarding parental leave. Mr Brankin did not enquire from the claimant the precise nature of the comments he alleged at the meeting of 10 February 2010, nor did he ask were any witnesses present, nor seek to interview any such witnesses. When he did address the matter with Mr Haining he asked a general question which was refuted in similarly general terms and took no further steps to investigate the matter.

(k) The claimant was placed in a selection pool of one. No consideration was given to, at very least, extending the pool to the Toyota franchise which already had a shared existence with the Lexus franchise and operated with a shared service and parts managers. Effectively the proposals for re-organisation would place Lexus back under the control of the Toyota general manager.

(l) There was a consistent feature of this case, which was the lack of records and notes kept by the respondent. Mr Haining had no notes of his consultation meeting with the claimant, Mr Brankin had limited notes relating to his appeal meeting and in cross-examination accepted that the notes that existed did not appear to be a complete record. Ms Senescal, in giving evidence, was unable to recall many of the parts of the process in which she had been involved. She spoke of a policy of not keeping notes and records of conversations. She described the respondent at its head company as a practical organisation. However, when pressed on why she could not remember some of the crucial aspects of the process she explained that she carried out so many discussions and conversations that she could not be expected to recall them all.

17. The tribunal therefore unanimously concludes that the real reason that a redundancy process was commenced with the claimant was because he had taken parental leave in Christmas 2009 and had stated his intention to take further leave.

18. The tribunal noted the stated policy of the respondent’s HR Department not to record what are important conversations. Ms Senescal, in this case, drafted documents based on such conversations. It is, in general, good business practice to keep notes and records of such conversations. This must be particularly so in the HR function, in circumstances where a senior HR Manager explains a lack of recollection of events by reference to the large number of such unrecorded exchanges taking place.

Compensation

19. The parties agreed a schedule of loss. As the claimant had received his redundancy payment, which equates to the basic award, there is no further basic award required. The loss of earnings to the date of hearing was agreed in the sum of £30,908.90. The tribunal considered future loss of earnings. The respondent accepted that the claimant had mitigated his loss. The claimant advised that he had made efforts to obtain further employment and was still endeavouring to do so. Bearing in mind the efforts the claimant has already made and the difficult economic circumstances which currently prevail, the tribunal considers that it is appropriate to award loss of earnings for a further 12 months. On the basis of the figures agreed by the parties, the future loss figure is £38,420.90. The total compensatory loss, therefore, is £69,329.80. The statutory maximum award available from 7 March 2010 is £65,300.00. The tribunal award the claimant £65,300.00.

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

Chairman:

Date and place of hearing: 8 – 11 March 2011, Belfast

Date decision recorded in register and issued to parties: