United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 3_93_1703

Appeal No. EAT/3/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17 March 1995

Judgment delivered 12 May 1995

Before

THE HONOURABLE MR JUSTICE BUCKLEY

MS S R CORBY

MR J H GALBRAITH CB

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MRS R A KELLY          APPELLANT

DAMPA (UK) LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MS I SIMLER

(Of Counsel)

Messrs Henmans

116 St Aldates

Oxford

OX1 1HA

For the Respondents MR R KENYON

(Solicitor)

Messrs Field Fisher Waterhouse

41 Vine Street

London

EC3N 2AA


 


MR JUSTICE BUCKLEY: The appellant, Mrs Kelly, was employed by the respondent as a packer from January 1985 until 1st April 1992, when her contract of employment was terminated by reason of redundancy. The Industrial Tribunal sitting at Reading held that the termination was fair and dismissed her claim for unfair dismissal.

There is no dispute that the reason for termination was, as the Tribunal found, redundancy. It is also clear there was no prior consultation with the appellant.

The basis of the appeal to this Tribunal, as put forward by Miss Simler, to whom we are very grateful, is: first, a reasonable employer can only dispense with consultation in an exceptional case and the Tribunal here lost sight of that and thus applied the wrong test in law; second, if the Tribunal did apply the proper test its conclusion was perverse.

Miss Simler reminded us of Polkey -v- A.E. Dayton Services Ltd [1987] IRLR 503 and De Grasse -v- Stockwell Tools Ltd [1992] I.R.L.R. 269, and submitted the Tribunal was wrong to place emphasis on the fact that the respondent was a small company employing only 27, that did not excuse the lack of consultation and the findings of fact did not bring the case into the limited range of the exceptional. Miss Simler also referred us to a document, which was before the Tribunal, detailing the time off through sickness of the four packers in 1990/1992. It is clear, as the Tribunal found, that the appellant had by far the worst record, but one D. Crook who had the best was also made redundant. Miss Simler submitted there was no explanation and this supported her submission that the Tribunal's conclusion was perverse.

As we have mentioned there were, at the material time, four packers. The Tribunal found a genuine need to reduce the number to two who would be reliable. Packers worked in pairs and if one of the remaining pair was off work it would cause great problems for the production line.

Paragraph 12 of the Tribunal's Reasons contains the finding as to how the respondent reached its decision.

"There was a meeting at the end of March between the Managing Director, the Finance Director and a Manager, to decide on who had to go. Mr Pitkethly told us that had they simply used the criterion of last in first out, which was not an agreed or accepted procedure anyway, the two people left would be a Miss Garagon and the applicant. It was felt, however, that if this was to be the situation, then inevitably because of the applicant's sickness record, production would suffer and reluctantly the decision was taken that she had to go. Although Mr Pitkethly said that he looked at other alternatives there was no alternative job which could have been given to the applicant in this small work force. She told us in evidence that she accepted that herself."

Mr. Pitkethly was the respondent's managing director.

Paragraphs 18 to 20 set out the Tribunal's conclusions:

"18. When we came to consider the evidence, we found, first of all, that the reason for the applicant's termination was redundancy. We then went on to consider, as we must, whether in all the circumstances of this particular case, the decision to dismiss her on those grounds was that of a fair or an unfair employer."

"19. It is true that there was no consultation and consultation is normally accepted as part of a proper procedure for redundancies. However, the lack of consultation does not automatically make a dismissal unfair. This particular company is a small on and we accept that there was no alternative position which could have been offered to the applicant. We further accept that in making their selection for redundancy the respondents' main concern and consideration was that for the future they needed two packers who were reliable in every way. It was not suggested that the applicant's work was poor. On the contrary, she was a very good worker and the only thing against her was the sickness record."

"20. Redundancies are always unpleasant and it is an unhappy time for all the parties involved. Having said that, however, we have come to the conclusion unanimously that the decision to make Mrs Kelly redundant was not an unfair one and her claim fails."

It is clear from the speeches in Polkey that great importance should be attached to warning of and consultation about possible redundancies. We do not intend to detract from that in any way. Indeed, if there has been a tendency by employers or Tribunals to overlook it we re-emphasise it. Lack of size in an employer is not, of itself, a reason to dispense with consultation. It may be relevant, for example because a small employer would be less likely to be able to offer alternative employment and the whole question of redundancies may well be more clear cut than in the case of a larger organisation. This may suggest to an employer that consultation would serve no useful purpose but the suggestion should not normally be accepted, for all the reasons identified in Polkey.

Size is, of course, a relevant circumstance when considering the question whether the dismissal was fair (s.57(3)) of the 1978 Act.

In paragraph 19 the Tribunal recognised that - "consultation is normally accepted as part of a proper procedure for redundancies" - and were correct to add that a - "lack of consultation does not automatically make a dismissal unfair" . The reference to the size of the company was linked to the finding that there was no alternative position for the appellant. We do not consider that this betrays a wrong approach in law.

As to perversity, the basic question for the Tribunal was whether a reasonable employer could reasonably decide to make the appellant redundant without consultation, in the circumstances of the case. It is not for us to answer that question but to consider whether the Tribunal's answer was a rational one.

We accept Mr Kenyon's submission, on behalf of the respondent, that paragraph 12 of the Reasons indicates that the criterion applied was not exclusively "last in first out" nor the respective records of absence, but a consideration of both, with an emphasis on reliability. D. Crook had only been with the company for three years and as the two packers kept on had reasonable records, (according to the document before the Tribunal) the decision is explicable.


 


On a fair reading of the Tribunal's findings, as a whole, this was a clear cut case, in a small company which could not offer alternative employment.

Whilst not condoning the lack of consultation and re-emphasising that it will usually lead to a dismissal being unfair we cannot say the Tribunal's decision was perverse.

A minority of this Tribunal finds the decision of the Industrial Tribunal perverse. She realises that perversity is a high test and in particular that this Tribunal should be careful not to interfere with an Industrial Tribunal decision merely because it disagrees with it or considers it unjust. An appeal can only be upheld on grounds of perversity if the decision below is one to which no reasonable Industrial Tribunal could come.

Ms Corby, however, takes the view that in this case the Industrial Tribunal could not reasonably have decided that the employer, acting within the band of reasonable responses, could have dispensed with consultation for two reasons. First, the redundancy selection criteria varied according to the employee concerned. One packer was selected on the basis of last in first out (LIFO) and one (the Appellant) on her sickness record. Second, Mrs Kelly was selected on the basis of her sickness record but there was no discussion with her about the nature and likely duration of her sickness. The fact that the Industrial Tribunal found, and Mrs Kelly herself in her evidence said, that there was no alternative position which could have been offered to her, given the size of the firm, goes only to the question of consultation being dispensed with in relation to matters concerned with the position after there has been a selection for redundancy. It does not go to the question of consultation as to who, and on what criteria, there should be selection, which in this case was far from simple.

Save as above, Ms Corby agrees with the majority judgment.

We would dismiss the appeal.