United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 126_94_2411

Appeal No. EAT/126/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 24th November 1995

HIS HONOUR JUDGE H J BYRT Q.C.

MR J D DALY

MR J H GALBRAITH CB

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MR J NICHOLAS          APPELLANT

STENA SEALINK LIMITED          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR J GAVAGHAN

(of Counsel)

Messrs Hattfields

Solicitors

45 Castle Street

Dover

Kent CT16 1PT

For the Respondents MR C SHELDON

(of Counsel)

Messrs Brachers

Solicitors

115a Chancery Lane

London

WC2A 1PP


 


JUDGE BYRT Q.C.: This is an appeal from decision of the Industrial Tribunal delivered on 3rd June 1993. The Industrial Tribunal is the Ashford and Kent Tribunal and they unanimously decided that the applicant, who is now the appellant, was not unfairly dismissed.

The background facts of the case as found by the Tribunal are as follows. The appellant was employed by the respondent between July 1989 and 31st December 1991, when his employment came to an end as a result of compulsory redundancy.

The Tribunal found that there had been an agreement about redundancy procedures and that dated back to 1983. Essentially it proceeded on the principle of "last in first out". That had in fact proceeded, perpetuated notwithstanding the fact that the company was taken over in 1990 by Stena Line. By that time it is pretty plain that the company was in financial difficulties. They perpetuated throughout 1990 and 1991 by which time in the September of 1991 the company had started to take the trade unions and their employees into their confidence. But the situation by that stage was so serious, that the company permitted the trade unions to look through their financial account to see just how serious the position was, and as gesture of bona fide.

The company notified the unions at that particular stage that there would have to be a variation in people's contracts as well, and as a result of that, the contracts of everybody would have to come to and end on 31st December 1991, and new terms be provided as from 1st January 1992. That situation would be accompanied by the possibility of compulsory redundancies. But at that particular stage there was no mention that there was going to be any change in the criteria which had been agreed in 1983.

In late October 1991, it is plain through an internal memorandum, that the company was telling its management that new criteria were to be applied, and it was to be based upon an assessment of the performance and capability of the employees to be considered for redundancy. In due course those new criteria for assessing redundancy were implemented. When compulsory redundancy was affective and that done on the basis of assessment procedures.

The Tribunal came to a finding that the appellant had in fact been dismissed, and the reason for his dismissal was redundancy. They also found that there was no expressed or implied agreement to vary the 1983 criteria for redundancy. They also found that the appellant had been selected for redundancy in contravention of that agreed procedure. It also accepted that if the old criteria "last in first out" had applied, the appellant would not have been a candidate for redundancy.

They went on to find however, that there were special and exceptional reasons in this particular case why the company had not taken the trade union into their confidence, and debated and discussed the new criteria for redundancy. It is a mixture of reasons as to why in fact they took that view. They found that the extremity of the company's financial circumstances was such and indeed the urgency with which this matter had to be dealt with now, in view of the fact that the banks had, or had appeared to have set some deadline, for the end of the year, that there was not consultation relating to the establishment of new criteria.

In their findings, it is plain that the Tribunal thought that the unions had known about the new criteria as far back as October 1991, that there had been no protest insofar as the new criteria was concerned, that they had co-operated throughout the latter part of December 1991 when the redundancy notices had been served and there was a new appeal process set up to deal with employee's grievances under that selection process. The Tribunal found that the unions had accepted the commercial realities of the present problem.

The appellant put in the forefront of his IT1 that he had been selected for redundancy because of his trade union membership. It is apparent that he had been a prominent trade union member during the course of a serious trade union dispute in 1988 and the Tribunal heard extensive evidence about that. But at the end of the day, they found that none of the group of managers involved in assessing the appellant, was prejudiced against him or discriminated against him, because of his trade union activity then or at the time.

They found the true reason for his dismissal being the fact of redundancy. They found that the selection process that had been applied to him was the same for him as for all the other employees selected for redundancy. They found that the assessment in relation to this particular appellant was an honest and genuine one.

The respondents in front of the Industrial Tribunal argued that even if the assessment was unfair there had been an opportunity to correct any errors in the procedure by reason of the appeal process that had been set up together with the unions. That that appeal process was not an appeal process against the termination of the employee's contract. It was in fact, part of the selection procedure. It was, as it were, a safeguard in case any employee had felt aggrieved as a result of the implementation of the new criteria, and afforded him the opportunity of going before an appeal board to argue about his assessment and also argue against his selection for redundancy.

On 19th December 1991, the appellant did, in fact, appeal to the appeal board. He attended accompanied by a trade union representative, but he chose not to argue his case before the appeal board on the merits and de-merits of his selection. But put forward a document which set out a legal argument to the effect that the company was in breach of the selection procedure and the selection criteria which had been agreed in 1983. What was standing, the appeal board made plain to the appellant that they wished to consider his selection on its merits and debated with him. The appellant declined the invitation and stood upon the legality or otherwise of the legal argument he was advancing.

The Tribunal found that on the basis of the appellant's evidence that the reason why he did not wish to argue his case on the merits, was because he was afraid that if the decision of the board at the end of the day, went against him, it would strengthen the hands of the respondents in their case against him. The Tribunal was satisfied that he acted contrary to the advice of his representatives who had accompanied him. But went on to find on the basis of the evidence in cross-examination of one of those trade union representatives that if he had pursued his appeal was more than likely that he would have in fact reversed the decision to dismiss him for redundancy.

The respondents at the end of their argument submitted that if the dismissal procedures, up until the stage of the appeal had been unfair the holding of the appeal was an opportunity for any such unfairness to be corrected. As a result of that this is a matter which the Industrial Tribunal could take into account. In fact the Industrial Tribunal came to the conclusion that if in fact the dismissal that far had been unfair, the failure of the appellant to address the appeal board on the merits, in fact would have resulted in the dismissal being made fair. In the alternative they concluded that if we were entitled to compensation they would have in fact reduced the compensation payable to him by 100% because the dismissal would have been brought upon his own head by his conduct in refusing to take advantage of his hearing before the appeal board.

In argument of the case in front of us today, Mr Gavaghan who has appeared on behalf of the appellant has raised a number of points. What he in fact says is that the Industrial Tribunal went wrong in its application of the law to the facts of the case under Section 57(3). The first point he specifically he takes is that in deciding that the appellant's refusal to argue the merits of his case before the appeal board turned what might have been an unfair dismissal into a fair dismissal. He said in making that finding the Industrial Tribunal had made an error in law in that they had focused when considering the question of reasonableness, focused on the conduct of the appellant, rather than on the conduct of the respondent. That was what had to be considered under Section 57(3).

Mr Sheldon in arguing this particular point referred to the case of Dyke v Hereford & Worcester City Council which is an authority for establishing that when the Industrial Tribunal considers the reasonableness of otherwise or an employee's dismissal, it is beholden to the Tribunal to consider each stage of the dismissal proceedings. At the end of the day taking the whole perspective as one, and make up their minds as to whether in fact the dismissal has been fair or otherwise. In fact Dyke breaks up the procedure up until the stage of the issue of the notice, and then after that the period between issuing the notice and the moment of dismissal and termination. Thirdly, they say that one has to look at whether there is any appeal process in place in order to correct or rectify any unfairness that might have been part of the system hitherto.

Mr Sheldon says that this is exactly what the Tribunal did do. They carried out an exhaustive enquiry into these matters, and at the end of the day they came to the conclusion that the dismissal was fair having regard to the overall position. He says that it is artificial to say that the Tribunal's decision hanged on the statement to the effect that the appellant's failure to address the appeal board made his dismissal unfair.

It is our view that one has to look at the paragraph 37 of the Tribunal's reason to see exactly what their overall view was. At the same time as doing that, one also has to bear in mind that the question the Tribunal is answering in paragraph 37 are the very points which they set out to themselves as being the main bones of contention advanced by the appellant in paragraph 2 of their reasons. Which is in turn a reflection of the appellant's IT1.

We are satisfied that the Tribunal did approach this matter with a correct perspective. As I say it was artificial in fact to look at that final sentence of their reasons and say that that was the ratio of their decision.

The second point argued on behalf of the appellant, was that the respondents had failed to consult with the appellant before issuing the redundancy notices or indeed before the termination of his employment. Again referring to Dyke v Hereford & Worcester City Council our attention was drown to the passage in that case where the judgment stresses the importance of consultation and it says that its importance cannot be over emphasised.

Mr Gavaghan say that the respondents chose not to consult. In fact there is a finding by the Tribunal that the respondents were distinctly secretive in the arrangement s they made for the selection process. When one looks at Dyke one sees of course at the end of the day the judgment stresses that it is for the Industrial Tribunal to determine this issue of fairness, it is essentially one for them.

Mr Sheldon who has argued this point, says that this is an entirely new point. It was not raised in the appellant's IT1 nor was it set out in particulars of the statement attached to the IT1, and furthermore evidence that the Tribunal did not consider this in the course of their deliberations is amply demonstrated by paragraphs 2 and 4 of Tribunal's reasons. When first of all they set out what they considered to be the appellant's main bones of contention and in paragraph 4, the questions they had to put to themselves. He makes the point that consultation with the appellant was not in the forefront of the arguments.

Mr Sheldon takes two points. First of all, that almost certainly the Industrial Tribunal did consider with considerable care the whole process of consultation in the context of consultation with the trade unions. They did so, when considering as to whether the redundancy procedures were in breach of the agreement of 1983. When the Industrial Tribunal found that there were special and exceptional circumstances which justified them not consulting. It is not difficult to see how that argument can be applied also to the process of consultation with the appellant.

The problem about accepting Mr Gavaghan's invitation to consider this point, notwithstanding the fact that it was not in the forefront of the appellant's case, is that the Industrial Tribunal was deprived of the opportunity of considering in relation to the appellant himself as to whether there were any special circumstances or exceptional circumstances which justified them not engaging in the consultation procedures that are referred in Dyke. We take the view that we cannot accept the submissions of Mr Gavaghan, that if in fact there were any further findings of fact to be made we should remit this matter for further consideration by the Industrial Tribunal. We think the problem here is that this is a new point to which the Industrial Tribunal had not specifically given their attention, and as a result of that had not gone on, as I say, to consider whether there were special circumstances or exceptional circumstances which justified them not engaging the consultation process.

The third point raised by Mr Gavaghan is that there is an inconsistency of an important nature in the Tribunal's reasoning, when in paragraph 38 they state that if they found as a fact that had he argued his case on the merits before the appeal board, he would probably have been re-instated. That in itself is inconsistent with the statement that his dismissal had been fair.

Mr Sheldon says that this must not be taken at its face value. All that the Tribunal was seeking to state at this particular point of their reasons was that the proceedings before the appeal board were genuine and fair, as was illustrated by the experience of a number of other employees who had their employment re-instated. That you cannot in fact read too much into a statement of this sort, and we agree with that. We think that it is somewhat artificial to do so.

Mr Sheldon says, that even if it were a finding of the Industrial Tribunal that had he appealed and argued his case on the merits he would have been re-instated, the fact that the Tribunal have decided that the dismissal is fair, is merely recording that the response of the employers is within the broad band of responses of a reasonable employer. We agree with that.

So far as the fourth ground is concerned. There is a complaint that notwithstanding the findings of the Industrial Tribunal, the employers in fact had discriminated against the appellant because of his trade union activities. Indeed this is one of the main points he cited in his IT1.

The main factual basis of this contention is that the assessment form which is included in our papers shows that he had limited promotional prospects. That this had been entered by Mr Beardsell, his line manager, who in turn had been largely effected by a Mr Pegg who had been his manager shortly after his recruitment back into the company in 1990 following the strike dispute in 1988. It was Mr Pegg's view that he was never in line for promotion because of his lack of co-operation and trade union activities.

The main point here to consider, say Mr Sheldon, is that Mr Pegg had now left the company, and was not with the company at the time of the assessment. Mr Beardsell was a witness who was termed by the Industrial Tribunal to be a man of "honesty and integrity". His assessment was in fact made in collaboration with another manager, Mr Askey, who was acquainted with the appellant's work, and who had never known Mr Pegg or had discussions with him about the appellant's position. Their joint assessment was in fact overseen or supervised by a Mr Ambrose. In consequence the assessment made of the appellant's capabilities, was a combined effort by all three of them. Not just of Mr Beardsell himself.

At the end of the day it was the Industrial Tribunal's assessment that the record of the appellant had been considered on a totally fair and open basis. Without it in any way being prejudiced by his trade union activity. Any prejudice which might have been generated by comments by Mr Pegg had long since been dissipated.

Mr Gavaghan says that this finding by the Industrial Tribunal overlooks vital factors concerning Mr Pegg and his prejudice and the way it effected Mr Beardsell. We take the view that all these matters were plainly in the mind of the Industrial Tribunal when they weighed up this issue, because they are all recited in their very lengthy and careful reasons. We take the view that this is very much a matter for them and provided that there is no obvious glaring mistake that they have made, such that we could find that they had come to a conclusion on this issue, that no reasonable tribunal could. There is no way that we as an appellate tribunal should disturb that finding and we do not.

The last point made by Mr Gavaghan is that it was wrong for the Industrial Tribunal to hold it against the appellant the fact that he did not make use of the internal appeal process. Least of all to deprive him of such compensation he would otherwise be entitled to as a result of his not co-operating with that board. He referred us to the case of Lock v Connell Estate Agents [1994] IRLR 444 which said that failure to co-operate with the appeal process, could not be said to be a failure to mitigate.

Mr Sheldon for the respondents, accepts that it is perhaps difficult to support this particular statement of the Industrial Tribunal. He says that the comments in paragraph 38, which are the subject of Mr Gavaghan's criticisms, were in fact obiter and unnecessary to the determination of the Tribunal and should therefore by disregarded. We think that the substance of the Industrial Tribunal's determination of this matter is set out in paragraph 37. It is answer to the complaints which are set out in the IT1 reflected in paragraph 2 of the Industrial Tribunals reasons. We think that on that basis it is plain that the Industrial Tribunal have directed themselves correctly on the law in relation to those specific issues. That they addressed the factual position behind each of those issues in turn with care and consideration. We do not find that we can disturb any of their findings of fact, on the basis that any of them are such that a reasonable tribunal could not have come to.

For those reasons, we feel that we have no alternative but to dismiss this appeal.