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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> McKeever v Patrick McCollum t/a McCollum ... [2012] NIIT 00018_12IT (25 October 2012)
URL: http://www.bailii.org/nie/cases/NIIT/2012/18_12IT.html
Cite as: [2012] NIIT 18_12IT, [2012] NIIT 00018_12IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 18/12
CLAIMANT: Thomas McKeever
RESPONDENT: Patrick McCollum t/a McCollum and Company
DECISION
The unanimous decision of the tribunal is that the claimant’s claims of unlawful age discrimination and unfair dismissal are dismissed, and that he is entitled to the sum of £275.70 for breach of contract and £464.02 for unlawful deduction of wages, totalling £739.72.
Constitution of Tribunal:
Chairman: Mr S A Crothers
Members: Mr T Wells
Mrs C Stewart
Appearances:
The claimant was represented by Mr M Potter, Barrister-at-Law, instructed by Breen Rankin Lenzi Solicitors.
The respondent was represented by Mr C Hamill, Barrister-at-Law, instructed by Worthingtons Solicitors.
The Claim
1. The claimant made claims of unfair dismissal, breach of contract, unlawful deduction of wages, and age discrimination. The respondent denied the claimant’s allegations in its response.
Issues before the Tribunal
2. The agreed main legal and factual issues were presented to the tribunal in their final form together with clarification on the Schedule of Loss, on 26 October and 1 November 2012 respectively. The legal issues are as follows:-
1. Unfair dismissal
a. Whether the Claimant was fairly/unfairly dismissed having regard to the provisions of the Employment Rights (Northern Ireland) Order 1996, as amended.
b. Whether or not the reason for dismissal was redundancy.
i. Whether the respondent took reasonable steps to minimise or avoid redundancies/dismissals?
ii. Whether the respondent offered suitable alternative employment?
iii. Whether the claimant’s refusal of such employment was reasonable?
iv. Did the Respondent comply with the statutory dismissal procedures? If not, is the Claimant entitled to an uplift in damages?
v. Whether there was adequate consultation with the claimant?
vi. Was there a pool for selection for redundancy and if so, was it the appropriate pool in all the circumstances?
vii. Was there a selection criteria for redundancy?
viii. Were the selection criteria reasonably applied?
ix. What is the likelihood that the Claimant would have been dismissed in any event?
2. Breach of Contract
a. Did the Respondent breach the Claimant’s contract of employment by removing entitlement to a car parking space and if so what loss was suffered by the Claimant thereto?
3. Age Discrimination
a. Did the respondent discriminate against the claimant directly on the grounds of age by specifying that one of the posts was for “a young solicitor”? The claimant’s comparator is Conor Morgan.
b. Did the respondent discriminate against the claimant and others of his/her age group by reducing the salary offered to senior solicitors in the proposed restructure while increasing or maintaining the salary for the posts for those solicitors who were not in the claimant’s age group? The claimant’s comparators are Conor Morgan and Sarah Fee.
c. Did the respondent indirectly discriminate against the claimant by offering new positions on terms which were less favourable than solicitors of the claimant’s age group? The claimant’s comparators are Conor Morgan and Sarah Fee.
4. Unlawful Deduction of Wages
Whether or not the respondent has paid the claimant for all annual leave. [£1,396.06 has been paid in respect of 15 days holiday entitlement, leaving a claim for £464.02 in respect of a further week].
Sources of Evidence
3. The tribunal heard evidence from the claimant and from the respondent. This case and the case of Barry Brennan v Patrick McCollum t/a McCollum and Company (case reference 20/12) were heard together. Counsel for both claimants agreed that the witness statement of Stanley McMaster, the respondent’s office manager, could be tendered to the tribunal without formal proof.
The tribunal was presented with witness statements and bundles of documents (together with further documentation in the course of the hearing), and took into account only the documentation referred to it during the hearing.
Findings of Fact
4. Having considered the evidence insofar as same related to the issues before it, the tribunal made the following findings of fact on the balance of probabilities:-
(i) The claimant qualified as a solicitor in August 1990 and commenced employment with the respondent in September 1990. He was the first solicitor employed by the respondent and worked for him for 21 years until the effective date of termination of his employment on 23 September 2011. His basic salary was £32,000 per annum. He received an additional 15% commission on all fees billed by him during any billing year. The respondent paid contributions into a pension scheme for him from 2001 onwards and he had the benefit and use of a car parking space since 1991.
(ii) During the restructuring and redundancy process which occurred during the first half of 2011, the respondent employed five other solicitors namely Barry Brennan, Una McMullen (who was a salaried partner for a period of time until March 2011), Sarah Fee, Naomi McVeigh, and Conor Morgan who had been a pupil solicitor with the respondent prior to his qualification as a solicitor. The respondent knew Conor Morgan’s uncle, Dan Morgan, and, owing to the fact that he could not find a master for his pupilage, was taken on by the respondent as a favour to Dan Morgan. Conor Morgan had worked as a fully qualified solicitor for a period of less than one year at the time the claimant received notice of termination of his employment. The restructuring process specifically included a post for a newly qualified solicitor which Conor Morgan was ultimately offered and accepted. He was also given a salary increase. The tribunal is satisfied that the respondent did state at a meeting on 7 June 2011, that one of the posts in the new structure would be for a ‘young solicitor’ this being the respondent’s ways of describing the need for someone at that level.
(iii) The age structure of the practice prior to the redundancy process was as follows:- Thomas McKeever 45, Barry Brennan 41, Una McMullan 36, Naomi McVeigh 32, Sarah Fee 30, and Conor Morgan 23. The average age was 34.5 years. After the termination of the claimant’s employment, the age structure was Sarah Fee (30), Conor Morgan (23), Sarah Reavey (24) and Majella Wade 24. The average age was 25.25.
(iv) The respondent’s practice was under acute financial pressure to the extent that, in or about August 2009, the bank informed him that his overdraft facilities were withdrawn. The respondent then sought, with extreme difficulty, to keep the practice open and to retain the existing professional staff which also included Paul Malone as a self-employed consultant together with a number of full and part-time administrative staff. There was no dispute over Paul Malone not being included in the redundancy pool with the other solicitors. The respondent agreed a financial restructuring with the bank in January 2010 and was placed under pressure to reduce the practice’s large overdraft. The respondent had to rely heavily on family members and friends to provide funds to support the practice. In June 2011, he estimated that the practice needed to make annual savings of £100,000 and also needed to recoup £500,000 of personal money introduced to it. The respondent had also been paying salaries out of this personal money.
(v) It was common case that, prior to notices of termination of employment being issued on 1 July 2011, the respondent had no redundancy policy, no disciplinary policy, no equal opportunities policy, and no grievance policy. Furthermore, it was common case that the respondent had not received training in equal opportunities, and was not familiar with employment law. Moreover, none of the professional staff had received written contracts of employment. The respondent therefore relied on professional legal advice to steer him through the restructuring and redundancy process. The claimant also availed of his own professional legal advice during the process. He claimed that Conor Morgan’s position had been “ring-fenced” in the restructuring and redundancy process and that he was subjected to direct/indirect discrimination on the ground of age. He named Conor Morgan as his comparator in the direct discrimination claim and Sarah Fee as the additional comparator in his indirect age discrimination claim. Sarah Fee was interviewed on 24 June 2011 and secured a private client post. She was already being paid £25,000, which was the basic salary on offer for the two private client, one personal injury specialist, and one defence lawyer posts available in the new structure. The fifth post was for a newly qualified solicitor – the post obtained by Conor Morgan. Sarah Fee maintained her pre-existing salary position after restructuring and was subsequently given a salary increase.
(vi) Currently, the respondent is the principal solicitor in the practice with Sarah Fee as his number two. Conor Morgan has since left the practice and has been replaced. In addition there are two paralegals, Sarah Reavey and Majella Wade. Paralegal salaries are paid at £16,000. The respondent has made savings in terms of solicitors’ salaries in the region of £100,000 per annum and the financial situation has improved.
(vii) It was not disputed by the claimant that he had been made redundant. He received and accepted a redundancy payment from the respondent together with notice pay. However, part of his case was that his dismissal was automatically unfair under Article 130A of the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”), in that the minimum statutory requirements relating to the redundancy three step process had not been complied with by the respondent in accordance with Schedule 1 to the Employment (Northern Ireland) Order 2003 (“the 2003 Order”). The requirements are as follows:-
“Step 1: statement of grounds for action and invitation to meeting
1. – (1) The employer must set out in writing the employer’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.
(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.
Step 2: meeting
2. – (1) The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.
(2) The meeting must not take place unless -
(a) The employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b) the employee has had a reasonable opportunity to consider his response to that information.
(3) The employee must take all reasonable steps to attend the meeting.
(4) After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.
Step 3: appeal
3. – (1) If the employee does not wish to appeal, he must inform the employer.
(2) If the employee informs the employer of his wish to appeal, the employer must invite him to attend a further meeting.
(3) The employee must take all reasonable steps to attend the meeting.
(4) The appeal meeting need not take place before the dismissal or disciplinary action takes effect.
(5) After the appeal meeting, the employer must inform the employee of his final decision”.
(viii) The respondent was confused about what constituted the three step process in the sequence of correspondence even though, in the appeal outcome letter to the claimant dated 9 August 2011, he states:-
“This is a redundancy under the Employment Rights (Northern Ireland) Order 1996 and under that same Order is a fair reason to terminate an employee’s contract of employment. I have consulted with you on a number of occasions and I have followed the statutory three step procedure in the termination of your contract however throughout, you have refused offers of suitable alternative employment”.
(ix) It is clear to the tribunal that the respondent relied heavily on the professional legal advice throughout the restructuring and redundancy process and was assisted in drafting relevant correspondence. The tribunal has considered the sequence of correspondence beginning with the original notification of a consultation meeting dated 6 June 2011 and is satisfied that correspondence to the claimant dated 16 June 2011 (which was preceded by the presentation of an Alternative Business plan (“ABP”) by the 5 solicitors (excluding Conor Morgan) during a meeting with the respondent on 13 June 2011), constitutes compliance with Step 1. That correspondence reads as follows:
“Our Ref: PMcC/Admin
16 June 2011
Dear Thomas
Individual Meeting Monday 20 June Time: 11:30
Further to the consultation meetings on 7 June 2011 and 13 June 2011 I would like to invite you to a meeting to discuss the restructuring and the potential redundancies arising within the firm. As a result of the proposed restructure all original posts will be made redundant and it is envisaged that there will be offers of suitable alternative employment for five professional staff but one role will be made redundant.
It is envisaged that any selection process will be by way of interview for those affected.
You are entitled to be accompanied at this meeting by a fellow employee or a trade union representative. Please confirm if you will be in attendance.
Yours sincerely
Patrick McCollum”
(x) The claimant was aware that his future position with the respondent would not be known until and unless the five professional members of staff applied for the available posts. Furthermore, the respondent’s notes of the meeting held on 13 June 2012 end by stating that:-
“A Solicitor needs to produce 3.5 times salary to be viable. I recall one individual suggested that it was 3 times to include all their overheads and costs or that other firms had different levels. I said we were talking about general park and the fact of the matter was that we were not coming anywhere near the industry norm and we were in the situation where we had to restructure.
I explained that the restructuring was in my view absolutely necessary, that all of the old posts were gone and I envisaged a new structure would have to be set up and the proposals would proceed”.
(xi) The claimant confirmed in correspondence, also on 20 June 2012, that he wished to be considered for all four senior posts:-
“WITHOUT PREJUDICE
Paddy
Further to our individual Meeting this morning and your request for an indication by 4pm today as to which posts I would wish to be considered for, I confirm that I wish to be considered for all four Senior Posts.
I wish to simultaneously reiterate my point this morning that I am not content with the timeframe of 4pm today, nor the timeframe for interviews as soon as tomorrow as it prejudices the time I need for advice and preparation.
I also wish to state that there are a number of issues I would wish to address with you on the paperwork supplied by you this morning to me. I assume that I can raise these with you at any interview.
Finally, I need to know the areas you want covered in any interview (beyond the descriptions of the posts themselves) and the selection methods, so that I can adequately prepare for same.
The entirety of this communication is without prejudice to my existing rights under the existing contractual arrangement.
Thanks,
Thomas”
(xii) On the evidence before it, the tribunal is satisfied that the respondent complied with Step 2 on 20 June 2011 by way of the individual meeting with the claimant. It is difficult to see what could have been achieved by a further delay following that meeting. Already, the claimant, together with his colleagues, had proposed the ABP which the respondent regarded as unworkable. The respondent described the ABP as “putting sticking plaster on a gaping wound”. The claimant was aware of the nature of what was envisaged in the proposed new structure at this stage and that he could submit himself for interview only on the basis of a proposed new contract which was non-negotiable as far as the respondent was concerned. Relevant criteria would be applied at the interview stage to assess whether the claimant would be a successful applicant for a post within the new structure. However, this did not happen as the claimant decided not to proceed with an interview. The tribunal appreciates that this was a traumatic and stressful time for the claimant both before and after his dismissal, and is satisfied that he, with colleagues, made a bona fide attempt through the ABP (which included voluntary reductions in salaries), to steer a way ahead in cooperation with the respondent. However, the reality of the situation was that the claimant, as a long serving employee who had experienced no real problems with the respondent until his car parking space was removed, was, by virtue of his status as an employee, somewhat removed (as were his colleagues) from the cutting edge of the business pressures which faced the respondent. The respondent was therefore in a better position to assess what was needed for the future survival of the practice, including the required number and types of posts, the necessary costs savings, the affordable salary levels, and the terms and conditions of employment.
(xiii) The tribunal also accepts that, ideally, the respondent would have wished to retain all of the professional staff, and that the claimant and his colleagues had genuine difficulty in accepting the terms of the proposed new written contract (which included a probationary period), as a precondition of being interviewed for the available posts. This was also in the context of four senior posts being made available for five solicitors, and of the respondent having considered the possibility of no more than four solicitors’ posts in the new structure, one of which would be for a newly qualified solicitor. Clearly this newly qualified solicitors post was not attractive to the more senior solicitors. The tribunal is satisfied however that the respondent had a genuine need for a solicitor, irrespective of age, at a newly qualified level both before and after the restructuring and redundancy exercise, and that such a solicitor was essential to the practice to deal with, (as Conor Morgan had done), adjournments, attending upon Counsel, and assisting mainly in plaintiff litigation work together with defence work and some aspects of criminal and commercial cases. Conor Morgan was also involved in matters which the respondent felt he could not have requested senior solicitors to do. The role also included what the respondent termed as an element of “dogsbody” work. The tribunal is also satisfied that, in reality, the claimant and his colleagues would have wished Conor Morgan’s post to have been made redundant in order to afford them all a better opportunity of remaining with the respondent. The claimant was not prevented from applying for this post or any other post had he chosen to do so. However, he had no intention of applying for the newly qualified solicitors post.
(xiv) The claimant’s position is made clear in correspondence to the respondent dated 24 June 2011 signed by the claimant, together with Barry Brennan, Una McMullen and Naomi McVeigh, which reads as follows:-
“24th June 2011
Dear Paddy
RE Interviews 24th June 2011
Further to your joint email of 23rd June we confirm that we will not be consenting to your proposed interview process.
Each of us already has posts with continuity of employment based on our existing contracts the terms of which are satisfactory to us in their current format.
The proposed interview process is not a selection for posts but rather a selection for redundancy without any redundancy criteria.
We further wish to make it absolutely clear that we find many aspects of your restructuring process and methodology unacceptable as they fail both the tests of reasonableness and fairness and also do not meet the requirements to consult, negotiate and not to discriminate.
Yours sincerely
Barry Brennan
Thomas McKeever
Una McMullen
Naomi McVeigh”
They also made clear in separate correspondence to the respondent on the same date that they “remain open to listening and potentially negotiating with you on the basis of our existing contracts only and taking into account this time both our rights and your rights”.
(xv) The respondent’s response to the four solicitors dated 24 June 2011 states, inter alia:-
“As previously advised there has been a restructure and as a result your post has been made redundant. By way of suitable alternative employment I have offered you the opportunity to apply for posts within the new structure and you have declined to do so.
I would like to give you a further opportunity to apply for the remaining three roles and would urge you to do so, otherwise you will be made redundant and forfeit the right to any redundancy payment by failure to accept an offer of alternative suitable employment.
I do not accept that there has not been proper consultation with you throughout this process and look forward to hearing from you on/before Friday 1 July 2011 as thereafter the posts will no longer be available”.
(xvi) The claimant, together with his three colleagues, wrote to the respondent on
1 July 2011, with the benefit of further legal advice, stating as follows:-
“You have variously described this process as a “restructuring” and “redundancy” and “interview”. We are advised that your proposed actions are unlawful and that they clearly breach our statutory employment rights, including, inter alia and without prejudice, rights pursuant to the Employment Rights (Northern Ireland) Order 1996. Further your actions amount to discrimination and victimisation on various statutory grounds.
You are seeking to unilaterally impose fundamental alterations to our terms and conditions of employment without our consent. We have, both individually and collectively, raised numerous concerns about this, all of which have been unreasonably rejected by you.
We are all retained under separate contracts of employment (although you have neglected to provide us with the written terms of these, which is contrary to our statutory rights). We are advised that you cannot lawfully carry out the contract changes that you have proposed.
You have stated in your email of 24th inst that you have offered us “alternative suitable employment” and that our redundancy rights would be forfeited upon our refusal to submit ourselves for interview for these posts. We are individually and collectively advised that there is no basis for this assertion, either in law or in fact.
We have also made cost saving proposals and work structure proposals to you and these have been rejected without a comprehensive written response detailing the basis of their rejection.
We intend to continue to work to our present terms and conditions and consequently have no intention of participating in the interview process.
However, without prejudice to our statutory and common law rights, we are prepared to engage in mediation to resolve the issues. This could be arranged through the Labour Relations Agency or with an agreed mediator appointed by the Law Society. Clearly this would be the most cost effective and time efficient method of resolving this issue, and would additionally preserve both the reputation and viability of the firm. We are advised that mediation should always be the first resort in a matter of this nature. Please confirm by return that you will consent to such a resolution process.
Yours sincerely
Barry Brennan Una McMullen
Thomas McKeever Naomi McVeigh”
(xvii) The respondent wrote to the claimant on 1 July 2011 confirming that his position was redundant and giving him the right to appeal the decision to terminate his employment within five working days. During his period of notice, which expired on 23 September 2011, the claimant was placed on garden leave.
(xviii) The respondent chose to conduct the claimant’s appeal hearing himself on 21 July 2011, having already dealt with the earlier stages in the process. In the circumstances in which he found himself, the tribunal, while having some concern that the respondent heard the appeal, does not consider this inappropriate given the size of the practice, its resources, and the fact that the respondent was best placed, with the benefit of professional legal advice, to deal with any appeal. The claimant also received a detailed appeal outcome letter dated 9 August 2011 which deals with the claimant’s appeal comprehensively.
(xix) The tribunal also carefully considered the evidence placed before it in relation to the claimant’s loss (including his breach of contract and unlawful deductions from wages claims) and in relation to mitigation of loss, including whether he ought properly to have submitted himself for interview on 24 June 2011 in the hope of obtaining one of the senior posts, albeit at a reduced salary and on the basis that he had to accept the terms of the proposed written contract.
(xx) The claimant had had the benefit of a car parking space provided by the respondent since 1991, until its withdrawal by the respondent in April 2011. The tribunal is satisfied that this was a breach of an implied term in the claimant’s contract. Furthermore, he commenced employment with the respondent in September 1990 and, in the absence of any written terms to the contrary, the tribunal is satisfied that his leave year ran from September to September until the effective date of termination of his employment on 23 September 2011.
The Law
5. (1) Article 130 of the 1996 Order provides as follows, insofar as relevant:-
“130. – (1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is 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 falls within this paragraph if it -
(a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do, …
(c) is that the employee was redundant …
(4) [In any other case where] the employer has fulfilled the requirements of paragraph (1), the determination of the question 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.”
(2) Article 130A of the 1996 Order provides as follows:-
“Procedural fairness
130A. – (1) An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if –
(a) one of the procedures set out in Part I of the Schedule 1 to the Employment (Northern Ireland) Order 2003 (dismissal and disciplinary procedures) applies in relation to the dismissal,
(b) the procedure has not been completed, and
(c) the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.
(2) Subject to paragraph (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of Article 130(4)(a) as by itself making the employer’s action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.
(3) For the purposes of this Article, any question as to the application of a procedure set out in Part I of Schedule 1 to the Employment (Northern Ireland) Order 2003, completion of such a procedure or failure to comply with the requirements of such a procedure shall be determined by reference to regulations under Article 17 of that Order”.
(3) (a) Where an employee is dismissed in breach of the statutory dismissal procedures the dismissal is automatically unfair under Article 130(A), but the case of Polkey v AE Dayton Services Limited, (1987) IRLR 503 HL, (“Polkey”) applies in full so as to enable the tribunal to apply a reduction in the compensatory award of up to 100% to reflect the percentage chance of dismissal.
(b) Where the statutory disciplinary procedures have been complied with, but there is a breach of procedures other than the statutory procedures and the employer can show more than the 50% chance that he would have dismissed the employee anyway, the dismissal is fair (Article 13A(2)). Polkey is inapplicable as there is no question of compensation at all.
(c) In the event of the statutory disciplinary procedures being complied with by the employer, and the employer showing less than a 50% chance that the employee would have been dismissed anyway, and should the breach of procedures other than the statutory procedures be sufficiently serious, the dismissal will be unfair on ordinary principles, but the compensatory award will be subject to a Polkey reduction to reflect the chance of dismissal (0% - 50%).
(d) A breach of the statutory disciplinary procedure will lead to an increase in the basic award to four weeks pay (where it would otherwise be less than four weeks pay) unless the tribunal considers that such an increase “would result in injustice to the employer” (Article 1541(A) and 1(B)).
(e) Article 17 of the 2003 Order provides that in a tribunal claim to which the statutory procedures apply, and which results in an award of compensation, it appears to the tribunal that the appropriate procedures have not been completed, there is to be an increase in compensation (where the employer was to blame) or a decrease (where the employee was to blame) of 10% which may, if it is considered just and equitable in all the circumstances to do so, be increased or reduced by a further amount of not more than 50%. The duty to make a reduction or increase of 10% does not apply if there are “exceptional circumstances” making such a reduction or increase in “unjust” or “inequitable”. In such circumstances no increase or reduction may be made, or an increase or reduction of such lesser percentage than 10% as is just and equitable in all the circumstances may be made.
(f) In deciding whether it is just and equitable in all the circumstances to increase the uplift to a figure between 10% and the maximum 50%, the tribunal must exercise its discretion by reference to some particular facts and circumstances surrounding the failure to complete the statutory procedure which can properly be regarded as making it just and equitable that the employer should be penalised further (McKindless v McLaughlin (2008) IRLR 678 EAT).
(g) The tribunal also considered, insofar as relevant, the principles in Software 2000 LTD v Andrews [2007] IRLR 568.
(4) Article 174 of the 1996 Order which is relevant to this case states as follows:-
“174. – (1) For the purposes of this Order an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to - …
(b) the fact that the requirements of that business -
(i) for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,
have ceased or diminished or are expected to cease or diminish”.
(5) Redundancy is a potentially fair reason for dismissal and it is for the tribunal to consider whether the respondent acted reasonably or unreasonably in treating redundancy as a reason for the dismissal of the claimant.
(6) The decision of the Northern Ireland Court of Appeal in Robinson v Carrickfergus Borough Council (1983) IRLR 122 approved the approach of the EAT in the case of Williams v Compair Maxam Ltd (1982) IRLR 83 EAT, which established guidelines to be applied in a fair redundancy process.
(7) In the Northern Ireland Court of Appeal decision in Carlson Wagonlit Travel Ltd v Robert Connor (“Carlson”) [judgment delivered 5 June 2007], Girvan L J in his judgment stated at paragraph 23 as follows:-
“In Polkey v A E Dayton Services Ltd [1987] IRLR 50 Lord Bridge set out a general guideline that in cases of redundancy dismissal an employer would generally not act reasonably unless he warns and consults any employees affected or their representatives, adopts a fair basis to select employees for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation. The tribunal acting as an industrial jury must take everything into account subject only to an appeal on a matter of law.”
Again, at paragraph 30 of his judgment, Girvan L J states:-
“While the case law shows that the range of reasonable responses test places some limits on a tribunal’s determination of what is reasonable, nevertheless the tribunal must have regard to all the surrounding circumstances. In appropriate cases the tribunal may require a higher standard of a reasonable employer to offer long-standing and more senior employees an opportunity of alternative employment. By the same token more senior employees in many instances can be expected to be more proactive in their own interest than more junior staff might be expected to be (see Whittle). However, as has been read in cases in other fields “context is everything”.”
(8) The claimant is under a duty to mitigate his loss but his duty does not arise until after he is dismissed. The Court of Appeal, in the case of Wilding v BT plc (2002) IRLR 524 held that, dealing with the case where the claimant had refused an offer or re-employment, a tribunal has to apply the following principles:-
(i) it is the duty of the employee to act as a reasonable person unaffected by the prospect of compensation from their former employers;
(ii) the onus is on the former employer, as the wrongdoer, to show that the employee has failed in his duty to mitigate his loss by unreasonably refusing an offer of reemployment;
(iii) the test of reasonableness is an objective one based on the totality of the evidence;
(iv) in applying that test, the circumstances in which the offer was made and refused, the attitude of the former employer, the way in which the employee had been treated, and all the surrounding circumstances, including the employee’s state of mind, should be taken into account; and
(v) the Court or tribunal must not be too stringent in its expectation of the injured party.
These principles apply equally to situations where a tribunal is assessing whether a claimant has mitigated his loss by actively seeking alternative employment.
In Wilding, Sedley LJ stated that:-
“It is not enough for the wrongdoer to show that it would have been reasonable to take the steps he has proposed. He must show that it was unreasonable of the innocent party not to take them. This is a real distinction. It reflects the fact that there is more than one reasonable response open to the wronged party, the wrongdoer has no right to determine his choice. It is where, and only where, the wrongdoer can show affirmatively that the other party has acted unreasonably in relation to his duty to mitigate that the defence will succeed”.
The onus of proof is therefore on the respondent. He must show that the claimant has acted unreasonably in failing to seek alternative work, or in turning down a job offer; and the test is objective in all the circumstances of the case.
(9) (i) The tribunal considered Harvey on Industrial Relations and Employment Law (“Harvey”), and in particular Vol 1, All 92-97, and D1 at paragraphs 686.03-1668, and 1724-1726. Furthermore it considered, in so far as relevant, the judgment of Underhill P in Samsung Electronic (UK) Ltd v Monte-D’Cruz UKEAT/0039/11 (“Samsung”) in which he stated that it was not always a good argument that a redundancy selection was unfair because the selection criteria were “subjective”. This was in the particular context of the tactic of “fire-and-rehire” in selection and retention cases. That decision has now been applied to similar effect to a straightforward redundancy selection issue in the case of Mitchells of Lancaster (Brewers) Ltd v Tattershall UKEAT10606/11.
(ii) Samsung is authority for the proposition that employers, adopting a careful approach, will have wider scope in the context of a reorganisation in determining who to deploy into new roles than in a redundancy. Also, in Samsung, the employment tribunal criticised the employer for failing to consult when it determined that it should restructure a tier of management. It criticised the employer for informing the employee of the decision that had already been taken, which was said not to be consultation. In the Employment Appeal Tribunal Mr Justice Underhill analysed this criticism and two other important criticisms at paragraph 20 of his judgment as follows:
“The first stage in the reorganisation consisted of the decision to remove the four jobs reporting to the Head of Print, including the claimant’s. The merits of the reorganisation of such were not a matter for consultation. What the claimant was entitled to be consulted about was how it affected him. The Appellant relied on the meeting and letter of 29 October … the Tribunal held … that that was inadequate because it constituted “informing rather than consulting”. We cannot accept that that is legitimate criticism. Certainly the letter … gave him information, but there is nothing wrong with that: giving information is the first stage in any consultation. But the Appellant went further. The Claimant was told not only what was happening, and why, but what his options were – namely, to apply for the new top job and if, unsuccessful, to apply for one of the new “Account Manager” roles. He was told when and where the interviews would be and offered time to prepare. He was encouraged to raise any questions. All that seems to us to be good consultation practice. The Tribunal does, however, have two more specific criticisms, namely (a) that the Claimant was not told what “selection criteria” would be used at the interview (that is, if he applied for the new job) and (b) that he was not consulted about “the approach to be taken beyond this stage”. We do not regard those as valid criticisms. Taking them in turn:
(a) We start by observing that “selection criteria” is not quite the right language. This was not, as the Tribunal itself had noted, a situation where one or more of several job-holders was being selected for redundancy: rather, the Claimant’s job was being abolished but he was being offered the chance to apply for a different job. However, the issue does not turn on terminology. The real question is whether it was unfair that the Claimant was not told in advance of the interview what scoring method would be used in assessing him against any other candidate. We cannot see that it was, and the Tribunal does not explain why it should be. The Claimant himself did not, either at the time or in his evidence to the Tribunal, complain of any unfairness in this regard.
(b) There was no need to consider at that stage the details of what would happen if the Claimant did not get the top job, ie beyond the fact that he would then be able to apply for one of the four new posts. He would need to be told more only if and when the situation arose.”
(10) The tribunal also considered the relevant provisions of the 1996 Order in relation to the right not to suffer unauthorised deductions from wages. It also considered the relevant provisions of the Industrial Tribunals Extension of Jurisdiction Order (Northern Ireland) 1994 in relation to breaches of contract.
Age Discrimination
(11) Regulation 3 of the Employment Equality (Age) Regulations (Northern Ireland) 2006 (“the Regulations”), provide as follows:-
“3. – (1) For the purposes of these Regulations, a person (“A”) discriminates against another person (“B”) if -
(a) on the grounds of B’s age, A treats B less favourably than he treats or would treat other persons, or
(b) A applies to B a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as B, but -
(i) which puts or would put persons of the same age group as B at a particular disadvantage when compared with other persons, and
(ii) which puts B at that disadvantage,
and A cannot show the treatment or, as the case may be, provision, criterion or practice to be a proportionate means of achieving a legitimate aim.
(2) A comparison of B’s case with that of another person under paragraph (1) must be such that the relevant circumstances in the one case are the same, or not materially different, in the other.
(3) In this regulation –
(a) “age group” means a group of persons defined by reference to age, whether by reference to a particular age or a range of ages; and
(b) the reference in paragraph (1)(a) to B’s age, includes B’s apparent age.”
Burden of Proof Regulations
6. Regulation 42 of the Regulations deals with the burden of proof and provides:-
“Burden of Proof: industrial tribunals
42. – (1) This regulation applies to any complaint presented under regulation 412 to an industrial tribunal.
(2) Where, on the hearing of the complaint, the complainant proves facts from which the tribunal could, apart from this regulation, conclude in the absence of an adequate explanation that the respondent -
(a) has committed against the complainant an act to which regulation 41 (jurisdiction of industrial tribunals) applies; or
(b) is by virtue of regulation 26 (liability of employers and principals) or regulation 27 (aiding unlawful acts) to be treated as having committed against the complainant such an act,
the tribunal shall uphold the complaint unless the respondent proves that he did not commit, or as the case may be, is not to be treated as having committed, that act.”
(i) In Igen Ltd (formerly Leeds Carers Guidance) and Others v Wong, Chamberlains Solicitors and Another v Emokpae; and Brunel University v Webster [2006] IRLR 258, the Court of Appeal in England and Wales set out guidance on the interpretation of the statutory provisions shifting the burden of proof in cases of sex, race and disability discrimination. This guidance is now set out at Annex to the judgment in the Igen case. The guidance is not reproduced but has been taken fully into account, as it also applies to cases of discrimination on the ground of age.
(ii) The tribunal also considered the following authorities, McDonagh and Others v Hamilton Thom Trading As The Royal Hotel, Dungannon [2007] NICA, Madarassy v Nomura International Plc [2007] IRLR 246 (“Madarassy”), Laing v Manchester City Council [2006] IRLR 748 and Mohmed v West Coast Trains Ltd [2006] UK EAT 0682053008. It is clear from these authorities that in deciding whether a claimant has proved facts from which the tribunal could conclude in the absence of an adequate explanation that discrimination had occurred, the tribunal must consider evidence adduced by both the claimant and the respondent, putting to the one side the employer’s explanation for the treatment. As Lord Justice Mummery stated in Madarassy at paragraphs 56 and 57:-
“The Court in Igen v Wong expressly rejected the argument that it was sufficient for the complainant simply to prove facts from which the Tribunal could conclude that the respondent “could have” committed an unlawful act of discrimination. The bare facts of a difference in status and a difference in treatment only indicate a possibility of discrimination. They are not, without more, sufficient material from which a Tribunal “could conclude” that, on the balance of probabilities, the respondent had committed an unlawful act of discrimination.
“Could conclude” in s.63A(2) must mean that “a reasonable Tribunal could properly conclude” from all the evidence before it. This would include evidence adduced by the complainant in support of the allegations of sex discrimination, such as evidence of a difference in status, a difference in treatment and the reason for the differential treatment. It would also include evidence adduced by the respondent contesting the complaint. Subject only to the statutory “absence of an adequate explanation” at this stage…, the Tribunal would need to consider all the evidence relevant to the discrimination complaint; for example, evidence as to whether the act complained of occurred at all; evidence as to the actual comparators relied on by the complainant to prove less favourable treatment; evidence as to whether the comparisons being made by the complainant were of like with like as required by s.5(3) of the 1975 Act; and available evidence of the reasons for the differential treatment.”
(iii) The tribunal received valuable assistance from Mr Justice Elias’ judgement in the case of London Borough of Islington v Ladele and Liberty (EAT) [2009] IRLR 154, at paragraphs 40 and 41. These paragraphs are set out in full to give the full context of this part of his judgement.
“Whilst the basic principles are not difficult to state, there has been extensive case law seeking to assist Tribunals in determining whether direct discrimination has occurred. The following propositions with respect to the concept of direct discrimination, potentially relevant to this case, seem to us to be justified by the authorities:
(1) In every case the Tribunal has to determine the reason why the claimant was treated as he was. As Lord Nicholls put it in Nagarajan v London Regional Transport [1999] IRLR 572, 575 – ‘this is the crucial question’. He also observed that in most cases this will call for some consideration of the mental processes (conscious or sub-conscious) of the alleged discriminator.
(2) If the Tribunal is satisfied that the prohibited ground is one of the reasons for the treatment, that is sufficient to establish discrimination. It need not be the only or even the main reason. It is sufficient that it is significant in the sense of being more than trivial: see the observations of Lord Nicholls in Nagarajan (p.576) as explained by Peter Gibson LJ in Igen v Wong [2005] IRLR 258, paragraph 37.
(3) As the courts have regularly recognised, direct evidence of discrimination is rare and Tribunals frequently have to infer discrimination from all the material facts. The courts have adopted the two-stage test which reflects the requirements of the Burden of Proof Directive (97/80/EEC). These are set out in Igen v Wong. That case sets out guidelines in considerable detail, touching on numerous peripheral issues. Whilst accurate, the formulation there adopted perhaps suggests that the exercise is more complex than it really is. The essential guidelines can be simply stated and in truth do no more than reflect the common sense way in which courts would naturally approach an issue of proof of this nature. The first stage places a burden on the claimant to establish a prima facie case of discrimination:-
‘Where the applicant has proved facts from which inferences could be drawn that the employer has treated the applicant less favourably [on the prohibited ground], then the burden of proof moves to the employer.’
If the claimant proves such facts then the second stage is engaged. At that stage the burden shifts to the employer who can only discharge the burden by proving on the balance of probabilities that the treatment was not on the prohibited ground. If he fails to establish that, the Tribunal must find that there is discrimination. (The English law in existence prior to the Burden of Proof Directive reflected these principles save that it laid down that where the prima facie case of discrimination was established it was open to a Tribunal to infer that there was discrimination if the employer did not provide a satisfactory non-discriminatory explanation, whereas the Directive requires that such an inference must be made in those circumstances: see the judgment of Neill LJ in the Court of Appeal in King v The Great Britain-China Centre [1991] IRLR 513.)
(4) The explanation for the less favourable treatment does not have to be a reasonable one; it may be that the employer has treated the claimant unreasonably. That is a frequent occurrence quite irrespective of the race, sex, religion or sexual orientation of the employee. So the mere fact that the claimant is treated unreasonably does not suffice to justify an inference of unlawful discrimination to satisfy stage one. As Lord Browne-Wilkinson pointed out in Zafar v Glasgow City Council [1997] IRLR 229:-
‘it cannot be inferred, let alone presumed, only from the fact that an employer has acted unreasonably towards one employee that he would have acted reasonably if he had been dealing with another in the same circumstances.’
Of course, in the circumstances of a particular case unreasonable treatment may be evidence of discrimination such as to engage stage two and call for an explanation: see the judgment of Peter Gibson LJ in Bahl v Law Society [2004] IRLR 799, paragraphs 100, 101 and if the employer fails to provide a non-discriminatory explanation for the unreasonable treatment, then the inference of discrimination must be drawn. As Peter Gibson LJ pointed out, the inference is then drawn not from the unreasonable treatment itself – or at least not simply from that fact – but from the failure to provide a non-discriminatory explanation for it. But if the employer shows that the reason for the less favourable treatment has nothing to do with the prohibited ground, that discharges the burden at the second stage, however unreasonable the treatment.
(5) It is not necessary in every case for a Tribunal to go through the two-stage procedure. In some cases it may be appropriate for the Tribunal simply to focus on the reason given by the employer and if it is satisfied that this discloses no discrimination, then it need not go through the exercise of considering whether the other evidence, absent the explanation, would have been capable of amounting to a prima facie case under stage one of the Igen test: see the decision of the Court of Appeal in Brown v Croydon LBC [2007] IRLR 259 paragraphs 28-39. The employee is not prejudiced by that approach because in effect the Tribunal is acting on the assumption that even if the first hurdle has been crossed by the employee, the case fails because the employer has provided a convincing non-discriminatory explanation for the less favourable treatment.
(6) It is incumbent on a Tribunal which seeks to infer (or indeed to decline to infer) discrimination from the surrounding facts to set out in some detail what these relevant factors are: see the observations of Sedley LJ in Anya v University of Oxford [2001] IRLR 377 esp paragraph 10.”
(iv) The tribunal also received considerable assistance from the judgment of Lord Justice Girvan in the Northern Ireland Court of Appeal decision in Stephen William Nelson v Newry and Mourne District Council [2009] NICA 24. Referring to the Madarassy decision (supra) he states at paragraph 24 of his judgment:-
“This approach makes clear that the complainant’s allegations of unlawful discrimination cannot be viewed in isolation from the whole relevant factual matrix out of which the complainant alleges unlawful discrimination. The whole context of the surrounding evidence must be considered in deciding whether the Tribunal could properly conclude in the absence of adequate explanation that the respondent has committed an act of discrimination. In Curley v Chief Constable [2009] NICA 8 Coghlin LJ emphasised the need for a Tribunal engaged in determining this type of case to keep in mind the fact that the claim put forward is an allegation of unlawful discrimination. The need for the Tribunal to retain such a focus is particularly important when applying the provisions of Article 63A. The Tribunal’s approach must be informed by the need to stand back and focus on the issue of discrimination”.
(v) In the context of justification the tribunal considered the Court of Appeal decision in Woodcock v Cumbria Primary Care Trust (2012) IRLR at 491 which held that cost alone will not justify age discrimination, but cost can be taken into account along with other factors (the “costs plus” test). It also held that the justification test applied was the same in direct discrimination as for indirect discrimination. However the Supreme Court in the case Seldon v Clarkson Wright and Jakes (a partnership) (2012) IRLR 591 held that the defence for justifying direct age discrimination is narrower that for justifying indirect discrimination. Again, in the Supreme Court case of Homer v Chief Constable of West Yorkshire Police (2012) IRLR 601, the Supreme Court held that the range of aims which can justify indirect discrimination on any ground is wider that the aims which can, in the case of age discrimination, justify direct discrimination. However cases of Seldon and Homer have
been remitted to the Employment Tribunal to reconsider justification.
Burden of Proof – Indirect Discrimination
7. (i) As previously set out indirect discrimination consists of a number of elements, namely:-
(a) that the employer applied to the employee a provision, criterion or practice which he applies or would apply equally to persons not of the same age group as the claimant, but
(b) which puts or would put persons of the same age group as the claimant at a particular disadvantage compared with other persons;
(c) which puts the claimant at that disadvantage; and
(d) which he cannot show to be a proportionate means of achieving a legitimate aim.
It is difficult to strictly apply the two stage process as referred to in the guidelines set out in Igen v Wong. The tribunal considers that the first, second and third elements referred to above have to be satisfied by the claimant and, if so satisfied, the burden of proof shifts, requiring the respondent to justify the provision, criterion or practice.
(ii) Once the provision, criterion or practice (“PCP”) has been established it is necessary for the claimant to show that he is at a particular disadvantage, which equates to the concept of a “detriment”. However the claimant has also to show that the PCP disadvantages persons within the same “age group” as himself. Neither the regulations, nor, to date, the case law, has provided any guidance in relation to this issue of “age group”.
In Discrimination and Employment, Tucker and George, in paragraph H3.011, suggested that:-
“The relevant provision, criterion or practice, must be applied to the claimant as well as others who are not of the same “age group”. Regulation 3(3)(a) defines “age group” as a group of persons defined by reference to age, whether by reference to a particular age or a range of ages.
However the concept of an “age group” remains something of a nebulous one. It appears that an age group can be either a group of people of a particular age (eg people aged 50), or, a range of ages (eg people aged 18-30). However, on the face of the Age Regulations 2006 it is not clear how precise the reference to age must be. There appears to be no reason why an age group could not, for example, be a group such as “retired persons”. More contentious perhaps might be groups described as “older employees” or “junior staff”.
The difficulty with such “loose” definition is that they present problems in defining accurately limits of any particular age group …”.
Submissions
8. The tribunal carefully considered the brief written submissions presented to it on behalf of the claimant and the respondent together with the oral submissions of counsel on 20 September 2012. The tribunal subsequently found it necessary to invite the parties to provide further written submissions on certain aspects of the case, and considered further oral submissions on 25 October 2012. The helpful submissions, which included references to various authorities, were carefully considered by the tribunal. Copies of the written submissions are appended to this decision.
Conclusions
9. (1) In relation to the direct age discrimination claim, the tribunal is satisfied that the claimant has not proved facts from which the tribunal could conclude in the absence of an adequate explanation that discrimination has occurred on the ground of age. The tribunal has to determine the reason why the claimant was treated as he was. It is not necessary in every case for a tribunal to go through the two stage procedure. In some cases it may be appropriate for the tribunal simply to focus on the reason given by the employer and if it is satisfied that this discloses no discrimination, then it need not go through the exercise of considering whether the other evidence, absent the explanation, would have been capable of amounting to a prima facie case under Stage 1 of the Igen test. The tribunal is satisfied that the reason for the alleged treatment was not on the ground of age and was directly related to the context of a professional practice under acute financial pressures whose future viability and survival was at stake and in respect of which necessary and uncomfortable steps had to be taken. Furthermore, the respondent prudently obtained and followed advice from a professional legal practice with expertise in Employment Law leading to a restructuring of the practice and the eventual redundancies. Also, in this context, a solicitor at a newly qualified level, of whatever age, was essential to the practice before and after restructuring and the claimant chose not to apply for a position in the proposed new structure, for his own reasons.
(2) In the indirect discrimination case, it was contended on the claimant’s behalf in relation to the PCP that the respondent had applied a two-fold criteria in that:-
(i) one of the posts in the new structure would be limited to a newly qualified solicitor, and
(ii) the wages were to be reduced in relation to the other posts on offer to £25,000 notwithstanding factors such as age, seniority and/or experience.
(iii) As regards the relevant age group, the claimant relied on his individual age and on the age group between 30 to 45 in making a comparison between the proportionate disadvantage to individuals within that age group and the lower age grouping involving Conor Morgan. Alternatively, it was contended on the claimant’s behalf that, if Sarah Fee is to be included as a comparator, the age group would be between 32 and 45 to include the claimant compared to an age group of between 23 and 30 which would include Conor Morgan and Sarah Fee. However, the claimant decided not to apply for any of the posts within the new structure. The respondent’s practice clearly required a solicitor at the newly qualified level irrespective of age, and at a much lower salary (even after the increase) than was on offer for the senior solicitors within the new structure, to assist the respondent in the exigencies of the situation at a salary level he could afford. The tribunal is not satisfied on the facts as found (including the findings of fact relating to Sarah Fee), that even if the criteria suggested by the claimant together with the age groupings were to be accepted, the claimant can prove a particular disadvantage. The respondent does not therefore have to show that the criteria were a proportionate means of achieving a legitimate aim. In any event the tribunal is satisfied that he could do so.
(3) In relation to the unfair dismissal claim the tribunal is satisfied that:-
(i) The claimant was dismissed by reason of redundancy arising out of the need to radically restructure the respondent’s practice due to acute financial pressures.
(ii) The claimant was not automatically unfairly dismissed under Article 130(A) of the Order. The tribunal is also satisfied that, even if the minimum statutory procedures had not been adhered to in the respects claimed by the claimant (as reflected in his counsel’s submissions), any compensatory award would have been reduced by 100% under Polkey to reflect the percentage chance of dismissal.
(iii) Although it was not a “fire and rehire” situation in that the claimant chose not to submit himself for interview, the tribunal, having regard to the circumstances, including the respondent’s size and resources, is satisfied that the respondent did not act unreasonably in treating the redundancy as a sufficient reason for dismissing the respondent having regard to equity and the substantial merits of the case. There was fair and adequate consultation following a number of meetings and exchange of correspondence preceding 1 July 2011. Alternative employment using an interview method is recognised as a possible way forward in a situation similar to that in which the respondent found himself. The basis for selection for redundancy was clear to the claimant in that, following criteria applied at the interview stage, one of the solicitors would be made redundant. It was most likely that Conor Morgan would obtain the newly qualified solicitor’s post as none of the other solicitors, including the claimant, intended to apply for that post.
(iv) The tribunal therefore concludes that in the particular circumstances of this case and on the particular facts as found, the decision to dismiss the claimant fell within the band of reasonable responses which a reasonable employer might have adopted.
(v) The tribunal, in dismissing the unfair dismissal and age discrimination claims, is however satisfied that the claimant is entitled to £464.02 in respect of outstanding annual leave. He is also entitled to £275.70 in respect of the loss of his car parking facility in the period between 27 April 2011 and 23 September 2011.
Chairman:
Date and place of hearing: 17-20 September and 25 October 2012, Belfast.
Date decision recorded in register and issued to parties: