United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 687_93_0902

Appeal No. EAT/687/93

I N T E R N A L

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 9 February 1994

Before

THE HONOURABLE MR JUSTICE WATERHOUSE

MR J DALY

MRS M E SUNDERLAND JP

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MR R GRACE          APPELLANT

STARDUST MATS LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


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APPEARANCES

For the Appellant MR P O'BRIEN

Free Representation Unit

49-51 Bedford Row

London WC1R 4LR


 


MR JUSTICE WATERHOUSE: This is an appeal from a decision of an Industrial Tribunal which sat at Nottingham on 23 June 1993. The complaint of the Appellant was that he had been unfairly dismissed and there was a subsidiary matter which he wished to raise under the provisions of the Wages Act 1986. The latter point was dealt with by way of amendment of the Originating Application and was then adjourned so that no point in relation to that arises on the present appeal.

The decision, made unanimously by the Tribunal in respect of the major claim of the Appellant, was that he had been fairly dismissed. The Appellant now appeals against that decision on a number of grounds to which we will refer shortly. The background to the case was comparatively simple and it was somewhat unusual because few basic facts were in dispute.

The Respondents supply washable floor mats and service them. The Appellant was taken on by the Respondents as a regional manager of their Derby branch in October 1989. It must be explained that the Respondent Company is comparatively small and the object of taking on the Appellant was primarily to develop sales in the Midlands and North regions and to oversee operations and administration at Derby. His salary was fixed at £30,000 pa and he was the second highest salary earner employed by the Respondents. When he began his employment a specific development plan for the Derby depot was agreed between the parties; it is unnecessary to go into the details of the plan save to say that it was envisaged that sales would be substantially increased and that the administrative and sales staff would be increased progressively as the business developed. It was anticipated that sales would have been increased to a level of about 5,000 mats by the end of the third period of 12 months.

Unfortunately, the objectives agreed in October 1989 were never achieved and performance fell far below what had been expected. By the end of 1992 the sales had decreased very substantially from those achieved in the spring of 1991 and it was clear that cost cutting measures were necessary. Another aspect of the general position of the Respondents was that they had failed to secure a dealership in the East Midlands, which affected the performance in Derby to a significant extent.

All these matters of background were set out before the hearing in the very full particulars of redundancy supplied by the Respondents in their Notice of Appearance. In view of the financial situation of the Company a management meeting was held in October 1992 to discuss the position. It seems that 7 or 8 of the senior management of the Company attended that meeting, including the Appellant, that is in contrast to a total employment roll of about 30 persons. By that time it was the view of the Respondents that they were losing about £1,100 per week in respect of the Derby operation. It was decided therefore that expansion plans for Derby would have to be abandoned and that the Company should concentrate on its more profitable operations, in particular the areas where they were able to trade more profitably.

It seems that a whole series of possible options was discussed at the senior management meeting. Following the meeting, the position was considered further by the managing director, Mr Starbuck. His evidence was to the effect that he mulled over the problem for about a month before making his decision and that decision was that he could and should dispense with the role of regional manager in Derby because that would involve a saving of about £800 per week. By that time, there were only 3 employees left at Derby, one of whom was an operations supervisor and the other a salesman. The operations supervisor was employed at a salary of £15,000 pa and the salesman at £16,000 pa plus commission. In those circumstances Mr Starbuck decided that the Derby operation could be carried forward satisfactorily by dispensing with the regional manager, leaving the operations supervisor and the remaining salesman to report directly to the managing director in London.

As we understand it, there was no dispute between the parties about those basic facts. There was no other form of consultation between Mr Starbuck and the Appellant before the decision of Mr Starbuck was communicated to him. The finding of the Tribunal was that when Mr Starbuck had reached his decision he went immediately to see the Appellant in Derby and notified him of his redundancy.

On the basis of those facts the Appellant complained that no proper objective criteria were used in the selection for redundancy and he complained also that there was no consultation about the matter. Those submissions were rejected by the Industrial Tribunal and the findings of the Tribunal were set out quite succinctly in paragraph 9 of the Statement of Reasons as follows:

"This is not the usual kind of redundancy case. The respondents had to stem the financial loss at Derby and that was the object of the exercise. We believe that Mr Starbuck applied his mind properly to a resolution of the problem and it is not for us to impose our solution, provided we are satisfied that he applied his mind reasonably and fairly to a resolution of the problem. We believe that he did so and we also believe that any reasonable employer in the position Mr Starbuck was would have concluded as he did that it would be pointless offering the applicant the salesman's job, with a considerable loss of salary and prestige. So far as consultation is concerned, this again is not a normal kind of case. The applicant was a Senior Manager. He attended the October Management Meeting, when the problem was spelled out to him and his colleagues. Neither the applicant nor his colleagues were able to come to any kind of solution. Clearly the matter then had to be resolved by Mr Starbuck alone. This he did. We do not believe that any further kind of consultation was appropriate or necessary."

On that footing the conclusion of the Tribunal was that the Appellant was dismissed for redundancy and that the Respondents had acted reasonably, having regard to equity and the substantial merits of the case, in treating that redundancy as the reason for his dismissal.

In the grounds of appeal the first point taken on behalf of the Appellant is that the proceedings before the Industrial Tribunal were conducted in breach of natural justice because the Tribunal was biased, or at least the Tribunal Chairman gave the impression that he had formed a concluded view hostile to the Appellant's case before the Appellant had presented relevant evidence to the Tribunal or had made appropriate submissions on that evidence. In support of this complaint various particulars have been put before this Appeal Tribunal, together with an Affidavit by Counsel who appeared for the Appellant below and the Appellant himself.

Distilling what is said as far as possible, the particulars of bias refer, first of all, to the fact that the hearing occupied about 3 hours and that on several occasions in the course of the hearing the Chairman made it clear that he would have to adjourn at 4pm because of a public engagement in relation to industrial tribunal training. Mr 0'Brien, who has appeared to present the appeal, does not in the end complain that the hearing was unnecessarily abbreviated. He agrees that the matter was one that could properly be disposed of in a period of 3 hours. He accepts also that the Chairman made it clear that, if the hearing could not be completed by 4 pm, it would be necessary to adjourn to another day and that the Tribunal was prepared to grant such an adjournment, if it became necessary. In the end we cannot see any basis for complaint about the timing of the hearing or observations by the Chairman about his need to leave at 4 pm. The situation that arose was a perfectly familiar one and Mr 0'Brien himself has said expressly that he did not feel any sense of undue pressure in the course of the hearing.

The more serious allegation made against the Chairman is that, in the course of the hearing, he made various comments about the evidence which manifested bias. It is suggested that, looking at the matter objectively through the eyes of any independent observer who might have been present, an inference of bias would have been irresistible. In support of that, Mr 0'Brien cites statements such as:

"There was clearly no consultation"

"We're not here to decide how Mr Starbuck should run his business."

"It's not our job to run the company."

"It comes down to money in the long run."

"It's all about money."

A comment by the Chairman to Mr Starbuck, when he said that he had done his best to find a solution, in the form:

"I'm sure you did."

"It's not our role to second guess the employer."

is also quoted, as is a comment to the Appellant's Counsel:

"Surely, you'd have a better case if you could show the figures are wrong."

Finally, complaint is made about a reference to Mr Micawber, whose name the Chairman had forgotten at the moment when he made the comment.

The complaint therefore against the Chairman is that he made numerous interruptions, that some of the interruptions were flippant and that his comments indicated that he had made up his mind in advance about important issues in the case. More seriously, it is said that, by saying "there was no consultation" or words to that effect repeatedly, he misled the representative of the Appellant into thinking that he had established that no consultation had taken place when it should have done and that it was not necessary therefore to pursue the matter in detail, either by way of evidence or in his final submissions.

We have considered these matters; in particular, the examples of interruptions that were made in the course of the hearing by the Chairman. We are compelled to the conclusion however that there was really nothing at all unusual about them. We certainly do not consider that an appearance of bias could have resulted whether the comments were viewed subjectively by the Appellant himself or by an independent observer looking at the matter objectively. Most of the observations complained of were simply glimpses of the obvious on the facts that we have related and we cannot accept that any material submission to the Tribunal was omitted by Counsel on the Appellant's behalf as a result of being misled by anything that was said by the Chairman. Paragraph 8 of the Statement of Reasons makes it quite clear that the two essential points in the Appellant's case, namely lack of consultation and the absence of a proper selection procedure, were fully in the minds of the Tribunal when they considered their decision so that the allegations based on apparent bias must, in our judgment, fail and could not succeed if this appeal were to proceed to a full hearing with the Respondents represented.

The second major proposed ground of appeal is that the findings of fact by the Industrial Tribunal were inadequate and that it is impossible therefore for the Appeal Tribunal to decide fairly whether or not there was an error of law on the part of the Industrial Tribunal. One of the points made specifically in support of that assertion is that the Tribunal below failed to make any clear finding about the question of proper consultation: it is submitted that it is not clear whether the Tribunal held that "no proper consultation took place" and was unnecessary or found on the contrary that adequate consultation did take place in the particular circumstances of the case. Moreover, it is submitted that, if the finding was the latter, there was no evidence that any meeting that took place did amount to a proper consultation between the management and the Appellant.

It is only necessary in our judgment to reiterate what was set out by the Tribunal at paragraph 9 of the Statement of Reasons to see that they made quite adequate findings to dispose of the short points in this case. The Tribunal had fully in mind the limited size of the Respondents' operation and the small number of staff employed by them. It was, of course, obvious and of central importance that the Appellant himself was the second highest paid employee of the Respondents as a senior manager and that he had attended the senior management meeting in October at which all the financial possibilities had been canvassed. It was his duty, however, as a senior manager, following that meeting although this is not spelt out in the Reasons, to make any further proposals that he thought appropriate, if he had any proposals to make, bearing in mind the terms of the development plan that had been agreed at the outset of his employment. What the Industrial Tribunal clearly found was that the only form of actual consultation that took place was at the October management meeting but, in the light of all the circumstances, their conclusion was that further consultation was neither appropriate nor necessary. It was on that basis that they decided the consultation issue.

As for the question as to the fairness of the selection for redundancy, the Tribunal accepted that the approach of Mr Starbuck was not merely one that could have been adopted by a reasonable employer within the band of reasonableness that the Tribunal had to consider: they made a more positive finding that any reasonable employer in the position of Mr Starbuck at that time would have concluded, as he did, that it would be pointless to offer the Appellant the salesman's job, involving as it would a considerable loss of salary and prestige. It is worth mentioning also that all the Appellant was able to say in his evidence on the point was that he would have seriously considered alternative employment if the suggestion had been made.

We cannot find that there was any express or implicit error of law in the reasoning of the Tribunal in this case and we do not consider that there is any substantially arguable ground of appeal on a point of law. We cannot accept either that the findings of fact made by the Tribunal were defective or that further light would be thrown upon the matter if further findings of fact were to be required.

The remaining grounds of appeal in our judgment all turn on matters of fact and do not raise any arguable point of law. It is suggested finally that the decision of the Tribunal was irrational and perverse and we reject that suggestion firmly. That decision was plainly open to a reasonable Tribunal properly directing itself so that the Appellant is left without any arguable ground of appeal.

It follows that the appeal must be dismissed.