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Cite as: [1994] UKEAT 438_92_1205

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BAILII case number: [1994] UKEAT 438_92_1205

Appeal No. EAT/438/92

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 12 May 1994

Before

HIS HONOUR JUDGE HULL QC

MR A C BLYGHTON

MR J H GALBRAITH CB

PERSONNEL SELECTION ASSOCIATES LTD APPELLANTS

MISS J A CORCHO RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellants MR A ULLSTEIN QC

Messrs Penningtons

(Solicitors)

Royex House

Aldermanbury Square

London EC2V 7HD

For the Respondent MR Q BARRY

(Solicitor)

Messrs Donne Mileham

& Haddock

Solicitors

Frederick Place

Brighton

East Sussex BN1 1AT

JUDGE HULL QC: This is an appeal to us by Personnel Selection Associates Ltd, a recruitment agency company, against a decision of the Industrial Tribunal sitting at Brighton under the chairmanship of Mr Starkey, a most experienced chairman, now retired, with two industrial members.

When the appeal first came before us it was against that part of the decision which the Industrial Tribunal had given on 27 and 28 February 1992 but it appeared to us that it was appropriate that the argument should also include the second part of their decision, which related to compensation, and which resulted from a hearing on 1 May 1992; the decision was promulgated on 29 May 1992.

Miss Corcho was a lady who was first employed by the Company on 30 April 1984. She started work in a job which was described as Area Coordinator and apparently she was successful in various ways. She moved from branch to branch. The Company had a number of branches and she was promoted to a position which was described as Regional Director and later as Local Director. She thought that might be a demotion although the Company said it was not. Then there came a time when the Company, in common with so many other agencies concerned with employment, was in difficulties; numbers were shrinking, branches were being closed down. Miss Corcho had been moved to a branch at Horsham. That closed down in December 1990 and she was offered work at Croydon. On this and other occasions she said that she did not want to go to Croydon and so she was transferred to the branch of the Company at Crawley, where she was with another employee, Mr Mills, the Manager, and she carried out her duties from that branch. I said that she moved from place to place but the fact is that she did not have a roving commission, although her responsibilities were wider than those, apparently, of any particular Branch. She was unwell in April 1991 and then again in May 1991 and while she was away ill she received a letter from Mr Garbett, the Chief Executive, dismissing her. Crawley branch was to be shut down, it was part of the general contraction which was affecting the Company. She complained that she had been unfairly dismissed. She complained, in particular, that there had been no consultation (and there certainly had not). There had been no warning, there had been no discussions with her and she said she had, therefore, been unfairly dismissed.

The response of the Company was that her dismissal was due to redundancy, the requirement for employees at Crawley had ceased. That was the situation.

As I say, the matter was tried on two occasions. Her complaint came before the Industrial Tribunal first on 27 and 28 February 1992. She acted in person and the Company was represented by leading Counsel. The Tribunal reached the conclusion that she had been unfairly dismissed. I will refer in more detail to their decision later. They found that she was redundant. The cause of her dismissal was redundancy and that, of course, is an admissible reason for dismissal. They went on to consider certain other matters. They held that by reason of the lack of consultation and warning, the ordinary formalities, that her dismissal was unfair and they went on to consider at the second hearing on 1 May the question of compensation. They awarded her compensation on the basis that what was to be judged was the difference between what she would have earned had she gone to Brighton branch as Manager and what she was, in fact, able to earn and they projected that forward for a considerable distance. They finally came to a decision, after considering various matters with considerable care, that she should receive more than £14,000 on the basis of indemnity. They then applied the statutory maximum, both to what she had already suffered and what they thought she would suffer in the way of loss and awarded her the maximum sum of £10,000.

When the matter came before us for the first time on appeal by the employers on 12 May 1994, it was then an appeal only against the first part of the decision and it appeared to us that there was there no finding with regard to the effect of the unfairness and that it certainly could be said that this was a finding not of substantive unfairness but of procedural unfairness on the part of the employers; and we then gave a judgment saying, amongst other things, that we thought that it was appropriate in all the circumstances for leave to be given to appeal against the second part, too, which in our view was all part of the same decision, if the Appellants thought it right to do so, and they did, and so the matter was adjourned.

We gave a decision stating our reasons for the purpose of explaining what we were doing, because there was considerable contest before us about what should be done, and I will refer to that briefly. Our decision then was a provisional one based on a view that we then took of what we knew of the case. We set out the position with regard to the need for consultation and the duty of the Tribunal, in our view, to make enquiry about what the effect of the unfairness would be in the circumstances and, having referred to the case of Polkey v Dayton and set out the principles there, at the top of page 5:

"We had all assumed, that in fact that question [that is, the question of what effect or difference would it have made if there had been perfect fairness] had not yet been considered because of this appeal. It also appeared to all of us that Mr Ullstein, in furthering his appeal, was in effect acting prematurely, because all this would fall to be considered when the Tribunal considered the question of compensation. However, we were told for the first time this morning, when we raised this with Mr Ullstein, that that was not so; that in fact this Tribunal had very shortly afterwards, on the 1 May 1992 gone on to consider the question of compensation. There had been an appointment for that purpose. We have looked, although Mr Barry objected to our doing so, at what the Tribunal decided on that occasion. It appears, if we may respectfully say so, to be a thorough investigation of all matters which arise, such as the question of mitigation and so on, except the vital question (as we have called it), what difference would it have made if there had been the consultation which the Tribunal held that there ought to have been.

In those circumstances we ask ourselves what is the proper course to take. Mr Ullstein says he did not find it necessary on 1 May 1992 [that is, the second occasion] to repeat the submissions he had made on the first occasion because he understood the Tribunal to be seised of his submissions on that matter. It is not up to us to say how an advocate should conduct his case. It might have been better had he pointed out to the Tribunal that they had not yet decided that point, but Mr Ullstein tells us that he thought, and here we are afraid we do not agree with him, that they had in effect decided it on the first occasion in the decision to which I have referred.

It appears to us that that is not so and although there are certain indications that they were on the point of considering that matter, that they did not in fact decide it at the first hearing. Therefore it might have been better, being wise after the event (which is always easy) for Mr Ullstein to have said to this Industrial Tribunal on the second occasion, "may I remind you that you have not yet decided explicitly what difference it would have made if the procedural steps had been followed properly" and made submissions about that again, if necessary, or if asked to do so. That did not happen. However, that may be, we of course accept what Mr Ullstein tells us; that he did make submissions in February 1992 and carry them as far as he could before the Tribunal.

Whether those submissions should have succeeded or not, whether the evidence was sufficient to persuade the Tribunal or not, is beside the point. Mr Ullstein was entitled to have the decision of the Tribunal on this vital point. As we say, we would look for it more normally at the second occasion. But it was not there. This Tribunal went straight on to consider all other matters of quantum, except that. It is apparent that the decision to which the Appellants were entitled was never reached. As Mr Barry has forcefully pointed out to us the time for appealing against the second decision, or second part of the decision, is long past.

In our belief the decision is in law one decision. It is true that it was reached on two separate occasions, but that was a matter of convenience and good practice. What the Appellants are entitled to is to have the case adjudicated on at all points by the Industrial Tribunal, however informal the procedure may be. The fact is that this essential point appears to have been overlooked by the Tribunal. We do not agree with the submissions made to us, both by Mr Ullstein with regard to the first part of the decision, and by Mr Barry, with regard to the second part of the decision, that this Tribunal has (at any rate by clear implication) decided this vital matter.

It appears to us that they have not reviewed the evidence and not considered the matter and we cannot find therefore that they have decided it. It would be open to us, no doubt, to continue to hear the appeal, but in a sense that would involve considering the second decision. ...

We have indicated certain provisional views about the effect and merits of what was decided by the Tribunal. We have not decided the appeal and we mention those matters only for the purpose of explaining the view that we take at the moment, which has led us to conclude that we should give leave to appeal against the whole of the decision, that is to say the part which is not yet appealed from."

We gave those reasons, as I say, having heard some fairly spirited debate about whether we should even look at the second part of the decision, whether in fact the Tribunal, as was asserted by one party, had decided the point in the first part or, as was asserted by the other party, decided it in the second part. Whether or not it was prudent for us to express those provisional views, they were only provisional views.

As a result, the notes of the evidence on the second occasion were provided to us. A notice of appeal was, in due course, quite properly filed against the second part of the decision and the appeal after, I am afraid, some delay, has been listed before us again. Amongst other things, we received a letter which the Regional Chairman, Mr Rich, wrote to us, Mr Starkey having retired, and he asked us to bear in mind what was said by Mr Starkey, the Chairman, who was responsible for this case:

"He asked me to convey to you his apologies, but also pointed out that he thinks the present query that has arisen can be dealt with on the information you already have. He asked me to request you to refer your Tribunal to paragraph 20 of the first Decision, and, more specifically, paragraph 7 of the second Decision. You will see there, as I have noted myself, that the compensation was calculated on the basis not that the applicant would continue in her old post, but that there would have been a difference, namely the appointment to the post at the Brighton branch at a lower rate of pay.

Mr Starkey tells me that it is clear, therefore, they did consider, and must have heard argument on, the point of whether or not any consultation or discussion made any difference to the situation, and, as you will see, they found that it would have done and they found what that difference was."

Today we have heard, of course, full argument on these matters. Mr Ullstein says that the Tribunal did not consider that matter and have not considered it at all and Mr Barry says that, in effect, they have. Counsel have made further submissions, which I will refer to in a little while.

We look back, therefore, at the decision itself and Mr Ullstein has submitted to us, quite correctly and very forcefully, that we must not decide cases on what the Chairman later said the Tribunal meant. We must look at the fair and proper meaning of what they did say. At the same time, of course, it has been said repeatedly that decisions of Industrial Tribunals are not to be read as though they were statutes or academic treatises in which any logical slip or apparent omission is fatal. They must be looked at with a commonsense view, bearing in mind that these are Tribunals of summary jurisdiction, intended to proceed informally and to look at the real merits of the matter and we are particularly prepared and happy to do that when the Chairman is an experienced Chairman and when they have clearly reached their decision after careful consideration, as appears to us to be the case here.

This Tribunal gave its reasons in full form, of course, and I will start at paragraph 6:

"In her Originating Application, Miss Corcho explained that she commenced employment with the Respondents on 30 April 1984 as an Area Co-ordinator and progressed to Regional Director. At the end of 1990 she was persuaded by Mr Garbett [the Chief Executive] to accept what she saw as effective demotion to Local Director. She contended that she was not redundant having always held a roving position within the Company, which had fourteen offices in Sussex, Surrey and Hampshire. She was always prepared to travel and fill in. Before she received the dismissal letter (on 31 May) there was no form of notice, prior consultation or consideration of re-allocation or re-education."

In the next paragraph they give some of the history:

"At the time [they refer to evidence which Mr Garbett had given] the applicant was dismissed there was no suitable vacancy at either the Croydon or the Brighton branches."

At paragraph 11:

"We find that Miss Corcho was dismissed by reason of redundancy which is a reason within Section 57(2) of the Act."

The branch had been closed down at Crawley and she was, therefore, dismissed by reason of redundancy.

"12. In accordance with Sub-Section (3) of Section 57 of the Act, we have to decide whether the dismissal was fair or unfair in all the circumstances, having regard to the size and administrative resources of the Respondents' business or undertaking and in accordance with equity and the substantial merits of the case.

13. There was no evidence of any customary arrangement or agreed procedure relating to redundancy.

14. At the time she was dismissed, Miss Corcho had served this company for over seven years in senior and managerial positions. There had been no warnings or serious complaints about her or her work: on the contrary, she was apparently valued and well regarded. Whilst she was at the Horsham office during the year before she was dismissed, her views were sought and considered in connection with the proposed establishment of a further branch at Worthing. In the event that did not proceed."

Then they refer to her illness, which I have already referred to and in paragraph 17 they say:

"There was no consultation whatsoever with her before the final decision was taken to close the Crawley branch and to dismiss her. As we have said, she was actually on sickness absence during the latter part of May; and the first she knew of the closure and her dismissal was when the letter dated 29 May was delivered to her at her flat in Brighton on the 31 May.

18. It was the Respondents' case that at the time Miss Corcho was dismissed, there was no suitable vacancy at Croydon or Brighton and that there was no suitable alternative post available. There was no evidence that any consideration had been given to offering Miss Corcho the job of Manager at Brighton.

19. Mr Mills had been Manager at the Brighton branch before he was moved to Crawley early in April. That move had created a vacancy and the Company had recruited to fill that vacancy at that time. The successful applicant had been engaged in April, but she had not been taken on as Manager. She had been engaged as a consultant. By the end of May, when she had been in post no more than a few weeks, she had been accorded the position of Manager."

As is pointed out to us, this lady, whose name was apparently Miss Soan, who had been taken on as a consultant, was appointed manager at the very moment when Miss Corcho was being dismissed and then they go on to their vital findings:

"20. It is well settled of course that management decisions are for management to make but no explanation was given as to why an experienced and valued employee was not preferred to a newcomer or as to why there was no consultation with Miss Corcho before she was dismissed. In times of difficult trading conditions, an explanation would be expected as to why a very experienced and senior employee was not retained. Had there been consultation, we have no doubt that Miss Corcho would have drawn attention to the situation at Brighton, would have referred to her own record and service with the Company; and would have emphasised her continuing need to earn her living. She was not given that chance, and it is impossible to escape the conclusion that the Company, for whatever reason, took the opportunity to be rid of her, to put it bluntly. We are unanimous in finding that in all the circumstances of this case the Company did not act fairly or reasonably in dismissing Miss Corcho by reason of redundancy.

20. [sic] When the decision of the Tribunal was announced the Chairman explained to Miss Corcho, in accordance with Section 68(1) of the 1978 Act, the provisions of Section 69 with regard to re-engagement. Miss Corcho asked the Tribunal to consider making such an order. That was opposed by Counsel for the Respondents, who submitted that in view of what had occurred since last May, involving the closure of other branches, and in other respects, it would not be practicable for the Respondents to comply with an order for re-engagement."

So that was their decision on the first occasion and it clear to us that paragraph 20 is saying almost in terms that this omission was no accident. The omission to take any of the normal procedural steps, which are normally considered essential to fairness, was not due to oversight or ignorance or anything of that sort.

"... it is impossible to escape the conclusion that the Company, for whatever reason, took the opportunity to be rid of her, to put it bluntly."

So there was no question of dealing with her fairly and one says, as a rider, what good would consultation have been? If there had been any consultation or warning, or conversations of any sort, or suggestions made by this lady, if they were determined to be rid of her, they were not going to consider those seriously at all. It was an unfair wish to be rid of her, that is what that means, it seems to us, in plain terms; and Mr Barry says, "Well, in those circumstances, it is not a case of procedural unfairness where one has to ask the question what difference would it have made if they had behaved with perfect fairness". This was a case of substantive unfairness and indeed, in argument, he agreed with a view which I put forward, that it would be very difficult if you come to the conclusion that the evidence which you heard with regard to the failure to consult and so on was not given in good faith and, in fact, underlying all this was a determination to be rid of this woman, it is very hard to see how that enquiry can proceed. In a case where the employer says, "Well, I am afraid I did overlook consultation, perhaps through ignorance, perhaps through haste or whatever it may be, or perhaps even because I thought in the circumstances it would do no good," the Tribunal can enquire into that because it is dealing with evidence from the employers' side, which it accepts as being given in good faith. But if the employer has given evidence which is rejected on the basis that the employer was, in the view of the Tribunal, determined to get rid of the lady for whatever reason, took the opportunity to be rid of her, to put it bluntly, well then, of course, the enquiry is almost impossibly difficult because they have the evidence given by the employer, which they have rejected. This is not a mere oversight nor, as was put forward in this case, a case where the employer has decided in good faith that it would be quite pointless to consult the woman. Indeed, the employer would be entitled to say, "Well, if you make that enquiry, the answer of course will be that she would inevitably have lost her job because I was determined to get rid of her and so we think there is great force in Mr Barry's submission about that. If there is a determination to get rid of her for whatever reason and they take the opportunity of a redundancy to do that, then it is, in our view, certainly substantive unfairness and nothing to do with procedural matters.

When we look at the second decision where compensation was assessed, it was, as I say, assessed on the basis that this lady, against whom there were no serious criticisms whatever, had been in the Company for more than seven years, and her compensation was to be measured by the difference between what she would have received if she had been translated to Brighton and made the Manager there and what she had, in fact, succeeded in earning. That is perfectly plain. The Tribunal considered that, bearing in mind certain evidence concerning perquisites and so on, she would not have earned so much when she was at Brighton. She would have earned rather less, something in the region of £302 a week rather than the £361 which she had been earning at Crawley.

In paragraph 7 of their decision at page 65 of our bundle they say:

"It was agreed that in her employment with the respondent company net average earnings for Miss Corcho equated to £361.50 per week. In our previous decision we referred to the position at the Brighton branch of the respondent company, to which Miss Corcho could have been appointed as manager. We are satisfied from the information before us that that position would not have yielded the same net remuneration for her, and on a pro rata basis we find it would have been equivalent to £302.65 per week."

That, of course, is one of the paragraphs which is pointed out to us by the Regional Chairman as indicating that the matter was decided and that submission is made to us by Mr Barry. When we look at that, bearing in mind the decision which was given after the hearing in February, it appears to us that the proper way to read that is to say not merely "to which Miss Corcho could have been appointed" but to say "could and should". The "could" there indicates, in our view - indeed, it is perfectly plain, on rereading this - that they were holding that if bone fide consultation had taken place and if the employers had considered it in good faith (not being determined to get rid of her for whatever reason) they would have indeed translated her to Brighton in the place of Miss Soan, who had been appointed, first as consultant then manager, only at the end of the month, precisely when they were dismissing Miss Corcho.

That is the plain sense of it and in paragraph 9 they go on to do the necessary arithmetic on precisely that basis, not that she was losing as a result of the unfairness what she was earning at Crawley but that she was losing what she would have earned if she had been transferred to Brighton and there installed as manager. It is plain, although they do not spell it out in the way that I have done by way of analysis, that that is precisely what they were finding; namely, that if the employer had acted fairly and properly, she would have been translated to Brighton. We accept Mr Ullstein's submission that whether or not there is a duty to enquire into what would have happened if consultation had taken place, the Tribunal must always look, however discreditably it finds the employer has acted, to see the true measure of the loss occasioned by the unfairness. The mere fact that the Tribunal has rejected the evidence given to it by the employer, found that there was no satisfactory explanation of the failure to consult, found that the employer was, for whatever reason, determined to get rid of the lady, does not mean that the Tribunal is not bound to look at the true measure of her loss. They must not say simply, "Well, we give her her loss on an indemnity basis and simply say that if it had not been for this unfairness she would have continued in that employment indefinitely", because, as he says, the very facts belie that. The Tribunal has found that there was here a closing of the branch and, therefore, a redundancy. But it seems to us that they have done precisely what Mr Ullstein says they should have done, quite without reference to the question whether Polkey strictly applied or not. They have enquired into what loss she suffered and they have found that she suffered the loss which they said she did by reason of not being transferred to Brighton as manager. They were certainly, in our view, entitled to do that and it appears to us that in all other respects this decision is one which is not to be criticised. We think, in other words, that our preliminary view that the Tribunal had not decided this one matter was wrong; they have decided it and have decided it in the way which we have indicated, whether or not they were obliged to do so strictly under the Polkey principles. In those circumstances, we cannot see that this Tribunal has been guilty of any error of law. We think that they heard the evidence carefully. We certainly think that they might have found their task easier if Miss Corcho had been represented. She was not represented. There was no suggestion that she was treated unfairly in any way but nonetheless, of course, the Tribunal had to do their best with their own experience and ability and with the assistance of Mr Ullstein to reach the conclusion which they did. We do not find that any of the grounds of appeal which are urged here can succeed and we therefore dismiss the appeal.