United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 1251_94_1710

Appeal No. EAT/1251/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17th October 1995

HIS HONOUR JUDGE P CLARK

MR J D DALY

MR J A SCOULLER

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CCA STATIONERY LTD          APPELLANTS

1) MR A TILL & OTHERS

2) MRS A CARMICHAEL

3) MRS S ORMERWOOD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MISS C GRUNDY

(of Counsel)

Messrs Wacks Culler

Steam Packet House

76 Cross Street

Manchester

M2 4JU

For the 1st Respondents MR T SADIQ

(of Counsel)

Messrs Brian Thompson & Partners

Acresfield

8 Exchange Street

St Ann's Square

Manchester

M60 8BT

For the 2nd Respondent MRS A CARMICHAEL

(In person)

For the 3rd Respondent MRS C ORMERWOOD

(In person)


 


JUDGE CLARK: This is an appeal by CCA Stationery, the employer, against a unanimous decision of the Manchester Industrial Tribunal following a hearing held over three days between 7th and 9th February 1994, that the five respondents to this appeal were unfairly dismissed by the employer. That finding of unfair dismissal was followed by a remedies hearing held before the same Industrial Tribunal panel on 26th April 1994. Arising out of the awards of compensation made on that occasion to three of the respondents, Miss Sutton, Mrs Carmichael and Mrs Ormerwood, each of those three respondents has cross-appealed the quantum of their compensation awards.

At the forefront of the employer's appeal is a complaint that the panel which heard these five cases ought to have disqualified itself from sitting, by reason of a real danger of the possibility of bias against the employer. I take that test from the House of Lords decision in R v Gough [1993] AC 646, and in particular the guidance to be found in the speech of Lord Goff of Chievely at page 670 letter C to G in that report. It is common ground between Counsel that that is the basis upon which this Tribunal should approach the complaint of bias in this appeal.

Before considering that submission and the alternative argument that the Industrial Tribunal erred in law in reaching perverse conclusions on the overall question of unfair dismissal it is necessary first to outline the procedural history of these applications and that of another employee dismissed by the employer, Mrs Joan Margaret Heyes.

Mrs Heyes was dismissed by reason of redundancy on 22nd January 1993. She complained to an Industrial Tribunal by an originating application received on 17th February 1993. Miss Grundy in particular draws our attention to the way in which that complaint was put in the originating application. In particular there was a complaint that Mr Scholes had treated her in a summary manner, immediately prior to the dismissal. In the application she says that she was not allowed to go back to work and quoting from her IT1:

"... I said "so I can't clock in on Monday and discuss further?" He said no. I said " so this isn't voluntary redundancy, its compulsory. He said "voluntary, compulsory, call it what you like."

So far as these respondents are concerned, the Industrial Tribunal in its decision on the question of fairness, set out the background in paragraph 7. It found that the employer was a manufacturer of specialist stationery, employing some 300 staff in March 1993 of whom 80 were skilled workers and some 68 were administrative or clerical workers. In the early months of 1993 the employer was suffering a significant decline in business and considered it necessary to effect redundancies, which possibility was notified to the in-house works council at a series of three meetings between 10th and 22nd March 1993. The works council was formally notified of the employer's intention to effect 36 compulsory redundancies on 29th March 1993. It notes that about one third of the workforce belonged to a trade union, that is the GPMU, and of these five respondents, three that is Till, Fairhurst and Sutton were members of that union and two, Mrs Carmichael and Mrs Ormerwood, were not members of a trade union.

These five respondents were amongst those dismissed on 1st April 1993. Each of them during April 1993 brought complaints of unfair dismissal.

On 15th November 1993, seven originating applications against these employers were listed for hearing before the Manchester Industrial Tribunal over two days. They were these five respondents, another applicant called Whiteside who eventually withdrew his application and Mrs Heyes.

At that hearing, it was decided that only the case of Mrs Heyes, who was a one-off applicant, should be heard on that occasion, and the remaining cases should be adjourned to be heard as consolidated applications. There appeared to be some dispute as to whether it was made clear on 15th November 1993 that the same panel sitting on that day would hear the eventual consolidated applications. We accept the evidence filed on affidavit before us of Ms O'Gorman, the solicitor acting for the first three respondents, that it was made clear it would be the same panel. Miss Grundy who appears on behalf of the employers says that she is not in a position to dispute that.

At any rate, the consolidated applications were put off, and eventually came on for hearing on 7th February 1994. We have before us a note by the Chairman, concerning the way in which the Tribunal dealt with an application by the employer for that particular panel to stand down in favour of another Industrial Tribunal panel, on the basis that they were or maybe biased against the employer. That note reads to the effect that there was some concern as to whether the case could be completed within two days, and indeed it was not in event. So far as the question of bias is concerned, that submission was fairly made by Miss Grundy on behalf of the employers, and rejected by the Industrial Tribunal who concluded that the consolidated applications gave rise to different facts from the facts in Mrs Heyes's case, and they concluded that they would not be prejudiced in hearing these applications.

The case of Mrs Heyes started on 15th November 1993. Messrs Scholes and Preston gave evidence on behalf of the employer. Mrs Heyes was half way through her evidence, when a compromise was reached and her complaint was settled on the basis that she should be paid a sum of money. We understand that her application was then withdrawn upon terms which were not disclosed to the Industrial Tribunal. So this was a case in which no conclusion or determination was reached by the Industrial Tribunal.

The five remaining cases were heard over the period 7th to 9th February 1994, and the question of liability was determined. In their extended reasons, and in summary, the Industrial Tribunal found that the dismissal of the three GPMU members Till, Fairhurst, and Sutton by reason of redundancy was automatically unfair under the provisions of Section 59(b) of the Employment Protection (Consolidation) Act 1978. In particular they found that there was an agreed procedure which appears in our bundle of exhibits at page 78 for selection for redundancy and that documents reads under the heading "Selection Criteria":

"The selection is by department or section on a last in first out basis taking into account the current and future needs of the company as to any specific skills of individual people."

The Industrial Tribunal found that that agreement was breached in that the principle last in first out was applied on a company wide basis, and not on the basis of service in the department or section which was being considered for redundancies, and further found that the criteria were not objectively applied. The Tribunal went on to further find, in the alternative as far as the first three respondents were concerned, that all five respondents had been unfairly dismissed by virtue of the provisions of Section 57(3) of the Act.

It is against that background that we consider the employer's grounds of appeal.

First, it is said that having begun to hear the application of Mrs Heyes, even though that claim was compromised before any decision was reached by the Industrial Tribunal, the same panel ought not to have heard these five consolidated applications. It is said to go on to hear these cases gave rise to a real danger of bias, and the fact that the employer lost on all points further gives rise to an inference of bias.

The employer's case is really summarised in an affidavit sworn by Mr Preston, the Operations Director of the company. In paragraph 3 he says this:

"3. On the 7th February 1994 I again attended the Tribunal at Manchester to give evidence on the Appellant's company's behalf in the cases the subject of this appeal. I attended to find the Tribunal was constituted of the same Members as it had been on the 15th November 1993. I immediately informed my solicitor and Counsel and that I was very concerned that the same individuals were to hear the case. I felt on the previous occasion that the Tribunal had formed a negative view of myself, Mr Scholes and the Appellant company and it was for that reason, on that occasion, I had agreed (with advice) that a settlement was appropriate. It was therefore my view on 7th February 1994 that if the Tribunal were to hear the case as constituted then inevitably their memory of the Heyes' application would be rekindled and the company would not get a fair hearing. In effect the company would start off from a disadvantaged position because I was its only witness and it would be impossible for the individuals on the Tribunal to ignore, forget or separate their view of that case from their adjudication in the other applications."

In argument, Miss Grundy accepted this formulation as the basis of her appeal under this head, that having a perception of adverse view at the first hearing, the Industrial Tribunal panel was incapable of fairly assessing the company's evidence at the second hearing.

We have considered that submission and the arguments in support, and those of Mr Sadiq who resists this case on behalf of Miss Sutton, and whose submissions were also adopted by the two respondents Mrs Carmichael and Mrs Ormerwood, who appear before us in person. It seems to us, first of all significant that the Industrial Tribunal never did reach a conclusion in the Heyes case. It was settled on terms that were not disclosed to the Industrial Tribunal and therefore, there was no formal indication of any view which the Industrial Tribunal may have formed about the employer and its witnesses.

Secondly we accept these cases were adjourned on 15th November 1993 on the basis that they would be heard by the same Industrial Tribunal panel, as we are told on affidavit by Ms O'Gorman. However, that does not effect the need for the Industrial Tribunal to properly exercise its discretion in considering the application by the employer for a different panel on 7th February 1994.

In our view, this panel was entitled to refuse the application to adjourn on the basis that they were not influenced by having part-heard Mrs Heyes case. The point was fully and fairly put to them, and in our judgment, the Tribunal were entitled to say that they were satisfied that they could fairly hear the case.

That is supported by the fact that there is no direct evidence to suggest bias in the conduct of the relevant hearing on 7th to 9th February 1994. We are asked to infer that there was some bias by the fact that the Industrial Tribunal rejected the employer's case on all counts. But for reasons which I will deal with in a moment, we find nothing exceptional or exceptionable about the Tribunal's reasoning on the merits of the unfair dismissal application.

There is a further practical consideration which in our view the Industrial Tribunal were entitled to take into account when exercising their discretion on an application for an adjournment, and that was the concern on behalf of the respondents that if a new Industrial panel was to be constituted, there would be a risk that the case would not finish within the two days allotted. That would involve increased costs and the rather unsatisfactory situation where the case goes part-heard for perhaps some weeks. All these were matters which the Tribunal could and did take into account.

In our judgment, we think that this complaint of bias is quite without foundation and we reject it.

There is also an appeal on the substantive findings of unfair dismissal. I earlier touched on the finding of breaches of Section 59 of 1978 Act. It seems to us having looked at the words of the redundancy procedure agreement, as far as selection criteria is concerned, that the construction placed upon it by the Industrial Tribunal, there having been a contest as to whether it meant last in first out on departmental or company wide basis, was one to which they were quite entitled to come. Indeed, were we a Tribunal of first instance, and we are not, we would have taken the same view as the Industrial Tribunal. In those circumstances we cannot say that their construction was perverse. But even if the employer were to succeed in its appeal against a finding of Section 59 unfairness, then still it has to deal with the alternative basis on which the Tribunal put its decision.

As to Section 57(3) of the Act, the Tribunal at paragraph 9(v) of its decision sets out at letters (a) to (f) a number of bases on which it finds that the employer acted unreasonably under Section 57(3). In particular it found at (a) that the employer failed to warn or consult any of the individual employees (whether members of a trade union or not) prior to announcing the redundancies. It is the undisputable fact, that there was no individual consultation in this case. We cannot say that if that was the only finding adverse to the employer, the Industrial Tribunal would have reached a perverse conclusion, whether in relation to those who were not members of the trade union, or indeed, those who were members of the trade union, in finding that the dismissal was unfair. But the Tribunal went on to give further additional reasons as to why they find a breach of Section 57(3), in particular a failure to make a reasoned or objective assessment of the skills of the relevant employees. Our conclusion is that there are no grounds for disturbing the finding of unfairness under Section 57(3). As I indicated earlier, far from being a ground which gives rise to an inference of bias, we think the findings, or conclusions of law, follow from the factual circumstances in this case.

For those reasons we dismiss the appeal against the finding of unfair dismissal.

As to the cross-appeal, the respondents say that the Industrial Tribunal when considering remedies in this case, reached a perverse conclusion. The Tribunal records at paragraph 18 of the remedies decision that:

"18. In respect of each applicant's claim for estimated future loss of earnings, the respondent contended that an appropriate period was 26 weeks from the date of remedy hearing, whilst the applicants claimed a period of between one or two years from the date of the remedy hearing would be justified."

That was the issue, and in paragraph 19 the Tribunal conclude that the proper sum to award was that contended for by the employers, namely 26 weeks net loss of earnings.

They also had to consider a claim for loss of future pension rights. As to that they indicated that they were following the guidance in the guideline book, issued by HMSO, and headed "Industrial Tribunals - Compensation for Loss of Pension Rights", in allowing a future pension loss for the same 26 week period as that assessed for future loss of earnings. We have considered particularly Section 9 of that booklet, coupled with appendix I (ii) and it is quite clear that the Industrial Tribunal did follow that guidance. Now, there will be cases of course, where it is appropriate to depart from those guidelines, but this Tribunal found that there was no compelling reason to accept that there should be a departure. They heard by consent submissions, rather than evidence, on the loss of earnings and loss of pension rights issue, and preferred the employer's submissions on those matters. It seems to us in relation to both loss of earnings and loss of future pension rights, that these were conclusions to which this Industrial Tribunal was entitled to come.

It follows that we can find no ground to interfere with that aspect of the decision either, and therefore both the appeal and the cross-appeal will be dismissed.