United Kingdom Employment Appeal Tribunal

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Cite as: [1994] UKEAT 242_92_1805

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BAILII case number: [1994] UKEAT 242_92_1805

Appeal No. EAT/242/92

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 18 May 1994

Before

THE HONOURABLE MR JUSTICE MORISON

MR E HAMMOND OBE

MRS M E SUNDERLAND JP

MR N J TRUSTY APPELLANT

LONDON BOROUGH OF BROMLEY RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellant MRS E ANDREW

(OF COUNSEL)

Bruce Piper

Director of Legal Services

Unison

1 Mabledon Place

LONDON WC1H 9AJ

For the Respondents MR A WHITE

(OF COUNSEL)

The Solicitor

London Borough of Bromley

Bromley Civic Centre

Stockwell Close

Bromley BR1 3UH

MR JUSTICE MORISON: By a Decision entered in the Register on February 11 1992, an Industrial Tribunal held at Ashford, after a four day hearing which involved consideration of oral evidence and over 600 pages of written material, unanimously dismissed Mr Trusty's complaint of unfair dismissal made against his former employers, the London Borough of Bromley. We shall hereafter refer to the parties as, respectively, the employee and the Council. By a Notice of Appeal dated March 20 1992 the employee appeals against that Decision.

The facts relevant to this appeal may be shortly stated.

.The employee commenced employment with the Council on 1 December 1976 and from October 1984 had been Recreation Manager (East). As such he was in charge of the borough's recreational facilities within its eastern area. He was based at the Walnuts leisure centre in Orpington. A Mr Kerr was Recreation Manager (West). [paragraphs 4 & 5 of the Industrial Tribunal's Decision].

.As a result of the forewarning which the Council and other local authorities received as to the introduction of compulsory competitive tendering (CCT) the Council made plans in preparation. A new Chief Recreation Officer (Mr Price) was recruited by the Council whose responsibility it was to implement those plans and develop the leisure centres as "performance centres", that is to make them more commercially orientated and more competitive. In the summer of 1990, Mr Price proposed and the Council accepted that there should be a change in the management structure. In particular he proposed that the positions of Mr Kerr and the employee should be abolished and, instead, the Walnuts Leisure Centre should be managed by the holder of a new post called a Centre Manager who would be responsible for developing the services offered there [paragraphs 6 - 9 inclusive].

.There had been considerable consultation with the relevant trade union (NALGO now Unison) in relation to the re-organisation which the Union formally acknowledged in a letter of 14 August 1990. However, the Union were concerned about the effects of the re-organisation on the remuneration of the staff and on 7 September, during a discussion with Mr Price, the Union expressed concern about the possibility of Mr Kerr and the employee being made redundant. At that meeting the union representative was assured that Mr Price needed to retain their skills and management ability. Under the scheme for re-organisation it was open to any displaced person to apply for any of the newly created positions. The Industrial Tribunal accepted that Mr Price genuinely believed what he told the Union at that meeting. [paragraphs 10 - 12 of the Industrial Tribunal's Decision]

.In the event the employee only applied for one position, namely that of Centre Manager at the Walnuts Centre. He believed that he was the natural candidate for the position. He was short-listed for the post together with four others and interviewed on 3 October. In good faith and on reasonable grounds, the interviewing panel were disappointed by the employee's performance and rated him fourth of the five candidates. Having failed to obtain the one position for which he had applied the Council told him that he was regarded as redundant. Following this, the Council took seriously their obligations to try and fit him into alternative positions but without success and he was paid off in October with three months pay in lieu of notice [paragraphs 13 & 14]

On these facts the Industrial Tribunal found that the dismissal was caused by the abolition of the employee's post in the re-organisation. Whilst there was no criticism that could reasonably or honestly be made of the employee's performance of his post, the position of Centre Manager was different in grading, status, terms of pay and role within the new organisation and

"It made demands on its holder which were different in emphasis and extent to those which the applicant was used to meeting in his existing post."

The Industrial Tribunal were troubled by the proper label to be attached to the reason for the dismissal. They considered that there was a redundancy situation but preferred to conclude, if they had to choose between them, that the reason was essentially "some other substantial reason" [paragraphs 15 - 17].

Either way, their conclusion was that the employers had discharged the burden upon them under section 57(1) of showing a reason which fell within subsection (2) of that section of the Act. Having so concluded, the Industrial Tribunal were required to consider whether the dismissal was fair or unfair having regard to the provisions of subsection (3). They did so in a paragraph 18 of their Decision:

"18 It was contended for the applicant that, given a proper reason for dismissal, the decision to dismiss for that reason was not reasonable. In particular, it was argued that the process of consultation and consideration of alternative employment was flawed. Our views are as follows:-

(1)The consultation process which was of crucial importance was that on the re-organisation itself. Once the proposals were accepted, the risk of dismissal was ever-present. Although redundancies were mentioned, there seemed to be an unduly optimistic attitude which suppressed them as real possibilities, and that attitude existed on both sides. As to the period after dismissal of the applicant, it is difficult to see how it could be considered a time of consultation. His position had disappeared.

(2)We do not accept, and we believe that the applicant did so, that the officers of the respondents' Personnel Department did all they could to find the applicant alternative employment and to help him restore his self-confidence. At the same time, we consider that there were aspects of the dismissal process which were handled in a tactless and insensitive manner: the communication of the decision by telephone; the disparity of the treatment of the applicant compared to his colleague in an equivalent position, Mr Kerr; and the linking of the quantum of his redundancy payment to his application to the Tribunal.

(3)We do not consider that these criticisms go so far as to render the dismissal unfair."

The contentions on behalf of the appellant may be summarised in this way:

.The Industrial Tribunal appear to have concluded that there was no consultation with the employee or his representative before the dismissal took effect. Save in exceptional circumstances a failure to consult will often make a dismissal on redundancy grounds unfair, and reliance was principally placed on Polkey.

.The Industrial Tribunal failed properly to take account of the disparity of treatment of the employee and of Mr Kerr. The latter, who applied for no new position at all, was kept on by the Council for another year, whereas the employee who applied for one position was dismissed very shortly after he had failed to obtain the new position. If an employer has acted in an apparently unjustifiably discriminatory way the better treatment of one employee may make the less favourable treatment of the other unfair.

.The Industrial Tribunal failed to apply the guidelines of fair behaviour laid down in Williams v Compair Maxim Limited [1982] ICR 156 including matters such as lack of warning of impending redundancy; failure of consultation with the union; failure to establish or apply proper or fair selection criteria.

The respondents say in answer to these submissions that

.The Industrial Tribunal considered that it was the consultation which took place at the re-organisation stage which was of crucial importance. In any event, the question of the adequacy of consultation was essentially a question of fact for the Industrial Tribunal.

.The Industrial Tribunal had Mr Kerr in mind throughout their reasoning: he is mentioned in a number of places. The witnesses called on behalf of the respondents were cross-examined at length on this point. The Council argued before the Industrial Tribunal that there were justifiable reasons for the difference in treatment in the two cases. Accordingly, it was a question of fact for the Industrial Tribunal with which this court should not interfere.

.The Compair Maxim case does not lay down principles of law or immutable rules with which every fair employer must comply: as the former President of this Tribunal observed in the case itself:

"Therefore in future cases before this appeal tribunal there should be no attempt to say that an industrial tribunal which did not have regard to or give effect to one of these factors has misdirected itself in law."

It seems to us that, whilst paragraph 18 of the Industrial Tribunal's Decision is somewhat elliptically expressed, there is no reason to believe that it failed to take account of the points raised on this appeal which were raised at the hearing before the Industrial Tribunal.

As to consultation, whilst they criticised both the Council and the Union for being somewhat over-optimistic about their assessment of likely redundancies flowing from the re-organisation, they rejected the argument put to them that the consultation process was flawed so as to make the dismissal unfair. Once the re-organisation had been implemented the employee's position, and therefore his job, had disappeared. At that stage, there was nothing substantial to consult about; the crucial time for consultation was at the stage when the question of removing posts and creating new ones was being discussed, as to which there had been proper consultation. The Council did their best to find an alternative post for the employee but did not succeed. The task may have been made more difficult by his apparent unwillingness to apply for any other position than the Managership of the Walnut Centre.

It seems to us that there are two rival arguments that come into play on the question of consultation. First, it could be argued that the employers did not, and could not, reasonably believe that the employee would be redundant until his surprisingly poor performance at interview on 3 October. This was a view that the employers held and was shared by the trades union representative. It appeared to be common ground between them that there could not be a redundancy situation and consultation until a person had not been assimilated into the new organisation. Therefore, on this argument, the first time consultation was appropriate was on 9 October.

The alternative argument is this, once a decision was made that the post which the employee held ceased to exist, Mr Trusty was in effect being dismissed by reason of redundancy and should have been consulted straight away; even if consultation with him prior to the interview of 3 October might have been awkward and might have led to difficulties because it might have been suggested by Mr Trusty, if that had happened, that his chances of getting the post had been pre-judged.

It seems to us that because of those rival arguments, and speaking for ourselves we would have preferred the second rather than the first, this was very much a question which was for the Industrial Tribunal to decide and to ask itself, whether an employer acting reasonably in the circumstances with which he was confronted could reasonably and fairly have decided to dismiss having taken the first of the two views we have just set out.

We are not persuaded that the Industrial Tribunal failed to take into account the question of consultation or that they considered the matter in a way in which we either could or should interfere.

As to discrimination between the employee and Mr Kerr, they had that well in mind when assessing fairness as they indicate in paragraph 18(2). Whilst it might have been of more assistance to us had the Industrial Tribunal spelt out in detail its approach to the differential treatment between the two employees, ultimately they had to make a judgment about the reasonableness or otherwise of the Council's decision to treat the reason for dismissal as sufficient "in accordance with equity and the substantial merits of the case". It will be rare that this Employment Appeal Tribunal will be able to overturn an Industrial Tribunal's decision under section 57(3) of the Act if only because Parliament has chosen to give the Industrial Tribunal the widest possible remit within which their decision must be reached. Again, we are not persuaded that there is any reason to believe that the Industrial Tribunal misdirected itself or reached a perverse conclusion.

Finally, we repeat what was said in the Compair Maxim case which we have set out above. Out of respect for the argument of counsel on behalf of the employee, we should say that she herself recognised that that case did not establish principles of law. Suffice it to say, for the purposes of this appeal, that employers should treat their employees with the respect that they themselves would wish to be treated were the roles reversed. In our view, every employer should ask himself 'what would I, if I was the employee, expect a fair employer to do with regards to my future employment in the circumstances in which I now find myself'. The answer to that question will, unless the individual has a perverse view of life, normally steer him towards taking decisions with which every Industrial Tribunal would agree were fair.

Thus in a redundancy situation consultation, warning and attempts to re-position are all things which any fair employer would wish to consider. Equally we are sure that they are all matters which the experienced Industrial Tribunal will bear in mind when reaching its decision under section 57(3) of the Act.

We see no reason to believe that there has been any error of law by the Industrial Tribunal in this case and we, therefore, dismiss this appeal.