United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 463_93_0305

Appeal No. EAT/463/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 3 May 1994

Before

THE HONOURABLE MR JUSTICE MORISON

MR P DAWSON OBE

MR J A SCOULLER

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MR F CLEWS & OTHERS          APPELLANTS

LIVERPOOL CITY COUNCIL          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR RICHARD BRADLEY

(OF COUNSEL)

Instructed by:-

Messrs Morecroft

Dawson & Garnetts

Solicitors

Queen Building

8 Dale Street

Liverpool L2 4TG

For the Respondents MR GERALD BAXTER

(OF COUNSEL) AND

MR SIMON DRIVER

(OF COUNSEL)

Instructed by:-

Head of Legal Services

Liverpool City Council

PO Box 88

Municipal Buildings

Dale Street

Liverpool L69 2DH


 


MR JUSTICE MORISON: After a sixteen day hearing extending over a period of nearly five months between October 15 1992 and the 8 March 1993, an Industrial Tribunal, held at Liverpool, unanimously rejected the complaints of unfair dismissal bought against Liverpool City Council by nine of their former employees. On their behalf the Industrial Tribunal was presented with a file of documentary evidence comprising over 300 pages of material, and the employers presented the Tribunal with 2 ring files running to a total of over 1000 pages. Many persons gave oral evidence.

Their decision was entered in the Register on May 7 1993. On May 20 1993 the employees applied to the Industrial Tribunal for a review of its decision. The principle ground for that application was that Councillor Rimmer, the then leader of the Council, gave evidence in another Tribunal case on March 15 1993, which the employees say would have had an "influence" on the result if given in their case. By a decision made on June 8, but entered in the Register on June 22 1993, the learned Chairman of the Industrial Tribunal refused that application.

By Notice of Appeal dated the 17 June 1993, and signed by Mr Bradley of Counsel, the employees appealed against the original decision. The Notice of Appeal runs to 10 pages. Whilst there is no appeal as such from the refusal to grant a review, in paragraph 7 of the lengthy Notice of Appeal, the employees indicated that they would seek leave to adduce that additional evidence. They say that the evidence would have had "an important influence" on the Tribunal's consideration in relation to an issue as to the employees selection for redundancy. Before turning to an analysis of the grounds of appeal we summarise the essential facts found by the Industrial Tribunal.

(1) The nine employees were all supervisors in the Static Security Force of the Liverpool City Council. They were given notice of termination on the 17 April 1991, expiring on July 15. The stated reason for each of the dismissals was redundancy (paragraph 3 of the decision).

(2) As a result of local elections in 1983 the so called "broad left party" took control of the City Council, and introduced procedures relating to employment which gave the 12 recognised Trade Unions the right to nominate employees for appointment, the right to sit on appointment committees and the right of appeal to Mr Derek Hatton, at that time the Deputy Leader of the Council, if an appointment was not agreed (paragraph 4 of the decision).

(3) Some time after 1983 a new Static Security Force was set up which comprised some of the low paid people who had been employed on security duties, such as night watchman. There was also the Parks Police, which was a uniformed disciplined force, run on the lines of a police force. The G.M.B Branch Five organised the men in the new force. In due time the Parks Police became known as the Mobile Force. Those employed in the Mobile Force were all graded as local government officers and were therefore subject to the conditions contained in the "Purple Book".

The members of the Static Force were classed as manual workers and their pay and conditions were contained in the "Green Book". The Static Force grew in size and apart from 12 supervisors, who were originally all members of NALGO, the 160 others were members of G.M.B. All posts in the Mobile Force were frozen. Both Forces were part of what became the Environmental Services Department of the City Council (paragraph 5 of the decision).

Between 1984 and 1987 the Council made several attempts to amalgamate the two Forces. Their attempts were resisted by the relevant Trade Unions.

In 1987 a Disputes Panel resolved that it was of the opinion that the two Forces should be kept separate. But in that year new contracts of employment were issued to the Static supervisors, which the Tribunal said:

"...... which implied the existence of an integrated force" (that is paragraph 5 of the decision).

Compulsory competitive tendering was introduced by the Local Government Act of 1988. That meant that certain specified activities (not including security) had to be put out to tender and the Department and the Council, which had previously done the work without question, would continue to do so only if it won the bid. Not wishing to lose the work, the departments concerned endeavoured to reduce their costs. The District Auditor required such departments to include within their costings the full costs of the Static Security Force attributable to the use they made of it, and hence reflect those costs within their bid. Various departments therefore ceased to make use of the services of that Force, and its "Order Book" began to decline, whereas the work of the Mobile Force tended to increase (paragraph 6 of the decision).

(4) As the Council moved towards setting its budget for the year April 1991 to March 1992, the District Auditor pointed out the deteriorating financial position of the Council and drew attention to the consequences of the Councillors being found guilty of wilful misconduct. It was recognised that a reduction in the workforce was necessary to produce savings. The City Council had long had a policy of no compulsory redundancies. Consultations were started with the Unions and in the meantime various options were put forward by the City Treasurer designed to ensure that the Council set a balanced budget within the statutory controls imposed by central government. One of the options put forward was that prior to March 31 1991 the Council should issue notices of severance to 100 Security Force employees in the light of the diminishing Order Book (that is paragraph 7 of the decision).

(5) In February 1991, Mr Robinson, the responsible Director, put forward a proposal for the integration of the two Forces and proposed that there should be 14 supervisor posts in the integrated service. He assumed the proposal could be achieved by agreement, but this was never forthcoming (paragraphs 5 and 6). The Statutory Form HR1 (the Notice of Redundancies to the Department of Employment) was dated February 28 1991 and the Trade Unions were notified of it at the same time (paragraph 7 of the decision).

(6) In the event the redundancies were effected by calling for volunteers and early retirers from amongst the two groups. After that there would be compulsory redundancies based on some kind of points system. In relation to supervisors, although there had been 12 in each Force, making a combined total of 24, a decision was made that all the supervisors in the Static Force should be made redundant. By this time two of the supervisors in the Static Force had been deployed to the Investigation Unit, namely Messrs Hood and Harrison, who then ceased to be members of NALGO and joined the Transport and General Workers Union, leaving 10, of whom 1 took early retirement, leaving 9 supervisors in the Static Unit, the Appellants, all of whom were made redundant (paragraphs 8 and 12 of the decision).

(7) The Council's plans and their implementations caused industrial unrest, but the supervisors in the Static Unit did not join the industrial action, apart from the initial three days strike, although they were unable to carry out their normal duties, both because they would have had to cross picket lines and because they could not get into their office, which had been vandalised with the use of superglue poured into the locks. Thus, rather later than was anticipated, the Appellants received their letters dated April 12 1991 from the Director of Personnel advising them of their right to register with the re-deployment unit if they wished to be considered for re-deployment. Initially, they were advised by their Union NALGO not to fill the form in because NALGO took the view that by doing so, they would compromise their claim that there was no true redundancy situation (paragraphs 10 and 11). Later towards the end of May they reversed their advice.

(8) The Tribunal considered in paragraph 11 of the decision what happened to each Appellant with regards to re-deployment. On about July 2 1991 the City Council suspended the whole re-deployment process "as a result of what was alleged to be unreasonable picketing". For whatever reason such attempts as were made to re-deploy the Appellants failed and each of the 9 lost his job as from July 16 1991.

In the light of those facts the Tribunal then gave its decision on each of the four matters that were in contention between the parties and which they had to determine in accordance with the statutory requirements for any decision relating to allegedly unfair dismissals purportedly on the grounds of redundancy, in circumstances such as existed in the present case. (A) was there a redundancy situation? (they deal with that in paragraph 12), (B) was the selection process fair? (they deal with that in paragraph 13), (C) was there proper consultation? (they deal with that in paragraph 14) and (D) were there proper attempts to redeploy? (which they deal with in paragraph 15).

Under paragraph 12 they found that it was necessary for the Council to dismiss employees on the grounds of redundancy, so that the Council could make an acceptable budget in accordance with its statutory obligations. The Order Book of the Static Force had declined very considerably. Out of the total manpower of that force of 160, inclusive of the 10 supervisors (the one who took early retirement had not by then left) 100 could be dispensed with. Accordingly, the Tribunal found that the requirements of Section 81(2)(b) of the Act had been satisfied.

The Tribunal continued in paragraph 12:

"Mr Bradley accepted that the Council was in a very difficult financial position but he submitted that the 9 applicants were not redundant because the new proposals of Mr Robinson for a combined security force required 14 supervisors. There had been 24 supervisors in post in the 2 Forces, 12 in each - Mr Hood and Mr Harrison had been moved leaving 22, 5 took early retirement i.e. one from Static and 4 from Mobile, so that left 14 posts to be filled by 17 men. This argument was based, of course, on the implementation of Mr Robinson's final report, but in fact this report was never implemented and still has not been implemented. No financial provision had been made for the 14 posts in the proposed new combined security unit and until the appointment of 2 new mobile supervisors in mid-1992 no appointments of supervisors were made at all. Mr Robinson's last report, like all his other reports, was merely a paper exercise and did not provide new posts for anyone. The Tribunal therefore decided that a redundancy situation existed in respect of the 9 applicants."

As to selection, it is to be noted that each of the two parties took up positions which were exactly the opposite of what they had been contending for in previous negotiations. The City Council said that the Static Unit was a separate Unit from the Mobile Security Unit, whereas the Union which had opposed the integration of the two Units adopted the position that the pool for selection was the pool of supervisors across the two Units. In other words there were 17 supervisors chasing 14 posts, and at least the 9 Appellants' should have been entitled to consideration for the 4 unfilled supervisory posts within the Mobile Department.

The Tribunal accepted the employers' position and concluded thus:

"For years there had been great animosity between the two Security Forces, and it was not reasonable to combine them for purposes of selection when they had been kept separate by the actions of the trade unions concerned in opposition to the desires of the City Council. Furthermore it would not have been a practicable possibility because the training of the Mobile Supervisors was different to the training of the Static Supervisors. The Tribunal did not therefore consider that there was anything wrong in the selection process."

They next considered the question of consultation. The Tribunal found that there had been no opportunity for the employers to consult with the Unions about the 9 Appellants because the Trade Union concerned, presumably NALGO, had refused along with the other Trade Unions, to take part in further consultations. However, they noted that arrangements were in place for any of the individuals to be seen by Mr Tennant of the Personnel Department, and the letter of invitation stated that they could discuss any problem they wished.

The Tribunal also noted that some of the Appellants did not avail themselves of the opportunity presented to them, and others who did, did not raise any particular queries, although they could have done. The Tribunal continued as follows:

"The consultation procedure was not such as the Tribunal would wish to see in normal circumstances, but the circumstances were by no means normal in this case, and the background of intransigence and industrial strife must be taken into account. Redundancy dismissals inevitably create problems for employers, trade unions and the individual employees. The basic rule is Section 57(3) of the 1978 Act ......."

and then they recite its provisions.

They continue:

"Upon this the Courts have erected a structure of rules and recommendations as to the proper method of dealing with redundancy dismissals, and in normal cases if these rules and recommendations are not followed the dismissals will be unfair. In abnormal cases it is necessary to return to the basic rule and decide whether in the circumstances the employer acted reasonably or unreasonably. In the present cases the circumstances were by no means normal. The trade unions had suspended consultation and had engaged in a policy of strike action. The applicants were not called out (except for the 3 day strike in April) but NALGO called out large numbers of administrative staff in an attempt to disrupt the workings of the Council. From time to time the offices were in a state of siege. In these circumstances it would not be reasonable to expect an employer to be able to follow rules provided for a normal situation, and the Tribunal considered that the actions of the City Council and its officers, though by no means perfect, were reasonable in all the circumstances and that the requirements of Section 57(3) of the 1978 Act were satisfied."

Finally, the Tribunal dealt with re-deployment. They reviewed the rival contentions of the parties. The Union's position was that the re-deployment exercise was a sham, that the supervisors in the Static Security Force had only been selected for redundancy for political reasons, in order to get rid of what was called "Hatton's Ring of Steel" and that therefore no department would have been willing to re-deploy them. In fact none of them was re-deployed, although one of the Appellants had made great efforts apparently to seek other jobs within the Council. The Industrial Tribunal appeared to accept that the reason for the non-registration of some of the Appellants had been because it had been seen by them as a good tactical manoeuvre not to apply.

Having considered the evidence before it, and the rival contentions, the Industrial Tribunal said this:

"The Static Security Force was undoubtedly unpopular because of its origins but the Tribunal could not accept that the City Council Members had deliberately plotted to get rid of it. In fact they did not get rid of it since it still exists, although its numbers have been considerably reduced. If the argument on behalf of the Applicants was correct no doubt the City Council would have abolished the Static Security Force altogether, and this was not done, 60 officers were retained, and it is understood that 46 still remain. Furthermore the Tribunal could not accept that all the various departments of the Council were in any way prevented from accepting for interview those who had put in applications simply because they had been members of the Static Security Force. It was unfortunate that the second stage of attempts at re-deployment involving the interviews at the end of June and beginning of July was terminated by the leadership of the Council, but this was caused by the escalation of the strike activity and against that background was not unreasonable. In this matter as in the matter of consultation the Tribunal would have like to have seen a more successful attempt at re-deployment but, again it must be considered against the background of the turmoil that existed, and against that background the attempt was reasonable."

Finally, the Tribunal concluded as follows:

Taking all these matters into account the Tribunal decided that the dismissals were fair, and the applications must therefore fail. It is most unfortunate that a necessary reduction in the number of employees of the City Council gave rise to all the difficulties that have been mentioned. The problem arose because of financial and legislative problems which forced the Council to cancel its long standing policy of not making employees redundant. It appears that the trade unions generally could not come to terms with the new situation, and believed, to begin with, that there would never be compulsory redundancies in local government generally and in Liverpool in particular. As mentioned above, initially the unions would not even agree to voluntary redundancies. When redundancies were enforced, of necessity, there was a general violent reaction which, unfortunately, made the following of a normal procedure impossible. The result was a necessary departure from the norm which was nevertheless reasonable in the circumstances."

In this appeal Tribunal the following arguments were presented to us on behalf of the Appellant employees, with which we shall deal seriatim. First, it is argued that the Tribunal erred in law in that there was no evidence to support the Tribunal's finding that there was a redundancy situation. Mr Bradbury took us through various documents and sought to re-argue the question as to whether it was right to take the one unit approach or the two unit approach. On the one unit approach there were 17 supervisors seeking 14 posts. He submitted that there was no evidence to support the finding in paragraph 12 that:

"No financial provision had been made for the 14 posts in the proposed new combined security unit ...."

He pointed out that the HR1 treated the two Units as one. He suggested that the true reason for what happened was simply that the City Council was faced by opposition from Trade Unions opposed to NALGO's desires. He argued that their supervisors should be considered for supervisory posts in the combined Unit, or for the 4 vacancies in the Mobile Unit, if the two were to be kept separate; that, if the City Council were able to permit men to transfer from the Static Unit to the Mobile Unit, there was no reason why the supervisors should not have been able to go across also.

It seems to us that while there is force is the argument that there was no evidence to justify the finding as to a lack of funding, that finding is not pertinent to the essence of the decision that there was a true redundancy situation.

The picture seems quite clear to us, as it did to the Industrial Tribunal. The Council had wanted to use the general redundancy situation as an occasion to further its aims to have one security force. Hence Mr Robinson's proposal in February 1991, on the basis of an integrated service he felt that there were 10 supervisory posts which were surplus to requirements. On March 10 1992 as part of the cost savings that had to be achieved to make the budget compliant, the Council resolved that there should be notices of severance in respect of 100 Security Force employees as a result of a declining Order Book and a rationalisation of the workforce.

The Unions had met and had resolved that although there had been hostility between them in relation to the two Units, they were unanimously of the view that compulsory redundancies should be resisted. Thereafter the Council decided to ask for early leavers and volunteers from both Units and the decision was made that compulsory redundancies would be restricted to the Static Unit, whose Order Book had been falling, by comparison with the Order Book of the Mobile Unit. This decision is recorded in a letter sent to APEX who were concerned as to the effect on their members who were supervisors in the Mobile Unit saying that:

"It (compulsory redundancies) will be restricted to the Static Division where the orders have been lost. This is clearly explained in (Mr Robinson's) recent report."

Later on the Council told a different Union that:

"Many Mobile security officers have understandably resented Static Security officers being promoted to supervisor posts in the Static DSO having far less service and experience than the majority of Mobile Security officers."

It was certainly open to the Appellants representatives to argue, as they did before the Industrial Tribunal, that the City Council ought to have looked at the two Units together, and having considered them separately they nonetheless ought to have allowed the 9 men to chase the 4 vacancies within the Mobile Unit. It seems to us that it was equally open to the Industrial Tribunal to conclude as they did. The critical findings of the Industrial Tribunal on this point are as follows:

"One of the sections considered was the Static Security Force, and it was clear that the need for this force had declined very considerably because of the reduction in the Order Book. Out of total force of 160 including the 10 supervisors it was decided that 100, again including the 10 supervisors, could be dispensed with. It was considered that with a reduced force supervisors were no longer necessary, and the officers would become self-supervised."

We were troubled by the fact that there did not appear to be any discussion on paper about having two Units, one of which was unsupervised. However, the Industrial Tribunal had material before it about that decision and they comment that no supervisors were appointed to the Static Unit until mid 1992. It is not for us to speculate on how the Council came to move from its original proposals, which were made on one basis, to a position in which there were to be two discrete Units for the purpose of redundancies for supervisory staff. We can see no reason to believe that the Industrial Tribunal misdirected itself on this matter and we are not prepared to say that the list ground has been made out.

The second ground is a contention that as a result of their contracts of employment, the Council could have transferred the supervisors to the Mobile Unit or requires them to supervise staff within that Unit and that therefore there was no redundancy situation. That contention is without merit. The attempt in 1987 to equate the terms and conditions of service in the two Units was postulated on the assumption that the two Units were to amalgamate. Amalgamation did not occur, , and at least as at the date of the Industrial Tribunal's decision has not yet occurred. We have no difficulty in rejecting this argument. Flexibility of the sort suggested was only on the cards, if the Units amalgamated. Otherwise, the Appellants were exclusively employed in the Static Security Unit. We are not persuaded that there is an inconsistency between the position of the supervisors and that of the men, and we know nothing of the men's contractual rights.

As to the third and fourth grounds they are dependent for their validity on the Appellants being able to show that the finding that Messrs Hood and Harrison had transferred to another department before the Appellants were given their notice was wrong. If it was wrong then the Appellants would say that their dismissal was in breach of Section 59 of the Act in that they had been dismissed when other employees, namely Messrs Hood and Harrison, who held similar positions, were not. It seems to us that this was purely a matter of evidence. We have looked at the papers and are satisfied that there is no reason to doubt the validity of the finding made, and I refer to paragraph 9 of the decision:

"There had been 12 supervisors but at the end of 1990 and the beginning of 1991 it had been decided to set up an Investigation Unit, and two of the supervisors, Mr Hood and Mr Harrison, were deployed to this Investigation Unit. Mr Hood had been doing clerical work, covering for someone on maternity leave, from mid-1990, and Mr Harrison was deployed about January 1991. On 15 January 1991 an advertisement was issued calling for applications for Investigation Officers on scale 4. The Investigation Unit later became part of the Clients' Service Agency. This left 10 Static Security Supervisors one of whom took early retirement. The remaining 9, that is the applicants, were served with notices of termination on 17 April 1991, the notices to expire on 15 July 1991."

Mr Bradbury sought to argue that the Investigation Unit was not in being at that time and he relied on statements made in various documents. We have to say with respect, that none of these references were helpful, the fact that the two men were only formally appointed to the new Unit in May, does not alter the fact that they, unlike all the other supervisors, had been posted, seconded or deployed to the new Unit, either in being, or about to be in being, before the relevant date, namely the date of the letters of dismissal April 17 1991. In other words, at that date they did not hold the position of supervisors in the Static Unit.

As to the fifth ground, we were invited to say that the Industrial Tribunal's finding in paragraph 14 of its decision in relation to consultation was perverse, or demonstrated a failure by the Industrial Tribunal to appreciate properly would good industrial relations practice and requires. We beg to differ. There was much that can be said by way of criticism of the way the Council consulted individually with their employees. However, their task was unquestionably made more difficult by the fact that there was unpleasant industrial action being taken against them at the time. Mr Tennant, the Personnel Officer, who apparently was liked and respected by everyone, saw anyone who responded to the request to see him and gave them a few minutes discussion. He was, we think, at that time, subject to constraints as to what he could say imposed to prevent the risk of victimisation of supervisors who may have made reports on those reporting to them. He was largely there to talk about the payments that were to be made.

Clearly this fell short of what would normally be expected of a large employer, such as the Council was, and is, but that was considered by the Tribunal and it was for them, and not for us, to weigh the need for consultation against the problems facing the employers and for them, and not for us, to decide whether what was done was reasonable. We can see no legitimate basis for the contention that the Tribunal misdirected itself as to what it is to be expected of a reasonable employer.

As to ground six where the complaint relates to the Industrial Tribunal's conclusion on re-deployment, again we think there is no point of law for us. The absence of satisfactory documentation, both in relation to consultation and re-deployment is regrettable. However, the Industrial Tribunal was entitled to conclude that the re-deployment efforts were not a sham, but there was no deliberate plot to get rid of the supervisors and then make sure they got no other jobs within the Council. Again, the Industrial Tribunal criticised the Council for what it did, but again weighed the criticisms against the facts as they had found them about the circumstances in which re-deployment was being considered. There seems no doubt that the re-deployment Unit was shut down as a direct response to the damaging action taken against it and that that affected all redundant employees, even if, as here, they were not themselves taking that action. We can quite understand that another Tribunal might have reached a different conclusion but we are not persuaded that the findings of fact and the conclusions of this Tribunal could be described as perverse. The Industrial Tribunal was entitled in our view to take into account the fact that the Unions themselves had obstructed the proper procedures for consultation and re-deployment.

The final point for our consideration was the question of further evidence. In a case not involving the Security Forces, the leader of the Council gave evidence to prove that the Council was not politically motivated in its redundancy decisions. He was asked about selection for redundancy amongst the security men and apparently somewhat to the surprise of the Applicants in that case, the leader of the Council proceeded to suggest that the way the Council had gone about the selection process in the present case was wrong. That evidence was given after the conclusion of the hearings in the present case, but before the decision. When the application to review was made on the basis of this new evidence the learned Chairman said this:

"(a) The main purpose of the evidence is to refute the suggestion that the static security force was abolished on political grounds and this is completely contrary to the evidence submitted by representatives of NALGO to the effect that the force was to be abolished for political reasons. He added that redundancies were applied across the department, and this can only mean the whole of the department, but it is an undoubted fact that no redundancies were declared in the mobile security force.

(b) The evidence could reasonably have been known of or foreseen prior to the hearing, because at the hearing allegations were made by the applicant's witnesses to the effect that the static security force was to be abolished on political grounds. Evidence from counsellor Rimmer as to this point could have been obtained at That time had the advisers of the applicants so wished."

The principles upon which fresh evidence may be considered are not in dispute between the parties and need not be set out here. It seems to us that the Industrial Tribunal was entitled to conclude, as it did, although we for our part prefer to say that there are no grounds for believing that any such evidence, if given in the present case, would or could have had any effect on the outcome. It is clear that the person who was responsible for handling the dismissals, Mr Robinson, gave evidence, and his evidence would have been preferred to that of Counsellor Rimmer, simply because the leader of the Council cannot reasonably be expected to have detailed knowledge of how every Council decision is implemented. Further, had he been a witness in the present case, he would have had an opportunity to remind himself of the facts having read the files, and we doubt whether what appeared to be a "gratuitous" and unexpected remark would have been made. We refuse the application for fresh evidence on those grounds. Needless to say, if it had been acceded to, we would have had to consider sending the case back to the Industrial Tribunal, but that does not arise.

Therefore for the reasons given, and recognising that in certain respects, the decision which the Industrial Tribunal had to make may have had to be carefully balanced we can see no point of law in this appeal and it must be dismissed. Finally, we would like to compliment the Industrial Tribunal on the form of their decision which was clear, easy to follow and thorough. As a small footnote to that we would all have preferred the decision to have been broken up into smaller paragraphs.