United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 481_94_0111

Appeal No. EAT/481/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 1 November 1995

Before

HIS HONOUR JUDGE J HULL QC

MR P DAWSON OBE

MISS C HOLROYD

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(1) MR A HARTLEY

(2) MR J E DAVIES          APPELLANTS

MARSHALLS MONO LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR TERENCE RIGBY

(of Counsel)

Legal Department

Transport & General Workers Union

Transport House

1 Crescent

Salford

MS 4PR

For the Respondents MR PAUL NICHOLS

(of Counsel)

Christopher Booth

Messrs Pinsent Curtis

Solicitors

41 Park Square

Leeds

LS1 2NS


 


JUDGE HULL QC: This is an appeal to us by Mr Hartley and Mr Davies, who were two skilled and experienced heavy goods vehicle drivers, employed by the Respondents. It is an appeal from the Industrial Tribunal sitting at Manchester under the chairmanship of Mr Christie with two industrial members, on 4 November 1993.

Mr Hartley and Mr Davies had complained to the Tribunal on 8 March that they had been unfairly dismissed through wrong selection for redundancy and they each asked for reinstatement.

Mr Hartley had first been employed by the Respondents, Marshalls Mono Ltd, in 1977. Mr Davies had first been employed in 1985; so they were men of substantial experience with the firm. They were two of 12 such drivers employed at or near Fletcher Bank Quarry, Ramsbottom and the business of the firm includes quarrying and the manufacture of concrete articles such as paving. The lorries were apparently employed in moving these manufactures around, or for that among other purposes.

There came a time when the company decided that it was necessary for economic reasons to reduce the number of drivers from 12 to 9; that is to say to dispense with the services of three of them; and for that purpose they first of all, in October 1992, issued a notice inviting voluntary redundancy. There does not appear to have been any or any sufficient response to that and by January 1993 the situation was crystallised that three fewer drivers were required.

Criteria were apparently drawn up and the drivers were marked on these. Before I come to that part of the case and the contentions which we have heard about that, there was a notice given to these two Appellants and one other, of their provisional selection for redundancy on 8 February and then on 11 February, there was a meeting with all the drivers and the criteria were put before them.

We have seen a note that was prepared for the meeting and the marks which had been awarded to each driver were apparently laid before them. That is going much further in the direction of openness than we think most employers do. That was the situation then.

There were appeals by the two, Mr Hartley and Mr Davies, against the notices of provisional selection for redundancy. Those appeals were dismissed and they were eventually made redundant on 26 February 1993 and then made their complaints, as I have said.

We now turn to the criteria which had been drawn up. I should say that all the drivers were apparently men of impeccable disciplinary record. It appears to be the case that there was no ground for distinguishing between them on disciplinary grounds. Management decided not to rely on the time-honoured, but perhaps no longer so popular, criterion of LIFO as it is called, "last in, first out", which is perhaps the most objective criteria of all and with regard to matters such as timekeeping, apparently strict timekeeping was not required of drivers. Indeed, it is hard to see how it could be.

The main thing with a vehicle is to drive safely; not an easy task of course with heavy vehicles; reliably; to work hard and concentrate on the task and to do the job, in other words. So strict timekeeping was not regarded by this management, at any rate, as a matter of importance and when it comes to such matters as skill, they were all skilled men. They were all held, apparently, in good regard.

So in those circumstances, it was apparently thought that the criteria should be as follows. Flexibility, housekeeping, attitude and output. According to the notes:

"1. FLEXIBILITY

Willingness - Adaptability - Discipline

To help out/Flexible Working/Late Loads/Attempting to run job to suit themselves, not from a Company point of view/Willingness to do other work than driving - short runs/long runs.

2. HOUSEKEEPING

Ensuring wagon is kept in working order and wagon is kept tidy. Also helping to keep yard tidy by helping with sticks whilst loading.

3. ATTITUDE

General approach to instructions given/approach to the work/approach and personal contact with other people. They way they react to situations ie, voluntary help - help with problems on wages/timesheets.

4. OUTPUT

Are they happy with a day's work? (as they see it), or do they chase extra work/earnings? Will this reflect in wanting to finish early or not wanting to start early?

Wagon earnings - we have to recoup outlay of wagons.

Personal earnings reflect also on wagon earnings from a Company point of view -these go together. Best return is needed."

And four people were chosen to mark these. It was thought not right to leave it all in the hands of the Transport Manager, a Mr John Burns. Among other things, his son was one of the drivers, and a fairly recently joined driver apparently. At any rate, Mr Burns was one of those who marked these criteria; Mr Jim Waite, a Despatch Manager; Mr Steve Brady, the Yard Foreman, who had been a truck driver himself and was an ex-shop steward and spent almost all his time working on a daily basis with the drivers, and a Mrs Lyn George, who was concerned with wages and administration. She too, apparently, had been active in union matters in her time. Mr Burns too had been a shop steward.

So these were not people to whom apparently any objection was taken. It was not suggested that they had approached their task in an improper way, and those are the criteria which they applied. Not all those four could mark each of the drivers on each of the criteria selected, apparently, but they did their best with those men whom they knew and those criteria which they felt they could apply. That appears to be the situation.

If I may pause there, the substantial criticism is that these criteria, which are only one part of fairness of course, in choosing for redundancy, are overtly subjective; that there is no objectivity about them at all compared with the "last in, first out" criterion for example where it can rightly be said that that is, errors and omissions excepted, entirely objective.

There are very few matters though which are entirely objective, or entirely subjective, when it comes to something such as flexibility. A person who is assessing that in good faith will warn himself that he must not simply be swayed by personal preferences and so on. He must look at it fairly and make proper allowances for individual variations and individual problems; housekeeping - well one have thought that that again might be a somewhat subjective thing, how we like our lorries to be kept. It might, on the other hand, be something which is applied objectively and fairly or is capable of being so. I will not go on with this. The fact is that it is not possible to say that all these criteria are entirely subjective, but undoubtedly they are not, in any way, mechanical. They cannot be applied mechanically.

These were the matters which were laid before the Industrial Tribunal. It was for them, first of all, to say whether the employers had established the ground of a dismissal, the redundancy and it was then for them to say whether the employers had acted reasonably and to consider Section 57(3). That was what they had to do. Had the employers acted reasonably? The Tribunal had the guidance of a good many cases on this topic, in particular they were referred to the decision of Williams and Others v Compair Maxam Ltd [1982] ICR 156. That is a case which is very important in this field. It is a decision of Browne-Wilkinson J, now of course Lord Browne-Wilkinson with two experienced members of this Tribunal and they had to consider a number of matters. The exact facts of that case as usual really do not matter, but they had to consider whether they should give some guidance in their decision of the case to Industrial Tribunals and Industrialists and Trade Unions and workers; everybody interested in this topic. In giving their judgment, they said at page 161, letter H:

"In law, therefore, the question we have to decide is whether a reasonable tribunal could have reached the conclusion that the dismissal of the applicants in this case lay within the range of conduct which a reasonable employer could have adopted. It is accordingly necessary to try to set down in very general terms what a properly instructed industrial tribunal would know to be the principles which, in current industrial practice ..."

As I say, this was 1981, when the events concerned took place. The case was heard at the end of 1981 and the decision was given at the beginning of 1982. It continues:

" ... a reasonable employer would be expected to adopt. This is not a matter on which the Chairman of this appeal tribunal feels that he can contribute much, since it depends on what industrial practices are currently accepted as being normal and proper. The two lay members of this appeal tribunal hold the view that it would be impossible to lay down detailed procedures which all reasonable employers would follow in all circumstances: the fair conduct of dismissal for redundancy must depend on the circumstances of each case. But in their experience, there is a generally accepted view in industrial relations that, in cases where the employees are represented by an independent union recognised by the employer, reasonable employers will seek to act in accordance with the following principles:

(1) ... as much warning as possible. ...

(2) ... will consult the union. ...

(3) Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service.

(4) The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection.

(5) The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment."

All these five general practices, which a fair employer will follow, were noted by the Tribunal and it is clear that Lord Browne-Wilkinson was taking the view that this was something to which he could contribute little and emphasising, therefore, that they were matters on which he accepted the guidance of the industrial members sitting with him. And he went on to say, on behalf of the whole Tribunal:

"The lay members stress that not all these factors are present in every case since circumstances may prevent one or more of them being given effect to. ..."

And it was explained in that case, as in many other cases, that the concept that the criteria should, so far as possible, be objective and not dependent upon whim, is to prevent a Manager who may have favourites; who may have an idiosyncratic view; who may be concerned only with the interests of the employer or his own interests perhaps; from making an entirely arbitrary selection.

That clearly is unfair, because fairness and reasonableness mean thinking of the interest, not merely of the employer, but of the employees too. They are entitled to be consulted. They are entitled to be warned. They are entitled to expect that if there are other jobs, those jobs will be offered to them and, in passing, we would say that in the present case, those latter matters were all attended to (as will become obvious).

So those are the matters which arise directly. The Industrial Tribunal dealt with it in a way which I must refer to. They first of all directed themselves, perfectly correctly, about what Section 57 says as to their duties. They then referred to Iceland Frozen Foods Ltd v Jones [1982] IRLR 439 and Campion v Hamworthy Engineering Ltd [1987] ICR 966, saying quite rightly that it was for the employer to choose how he went about this disagreeable task. It was not for any Industrial Tribunal to tell the employers how to do it. They had to look and see whether the employers had behaved fairly and reasonably.

Then they set out certain matters; their findings of fact. They set out the history of the matter, which I have set out and the criteria which were selected. They gave the history of the appeals and they said that:

"9 (h) ... The grounds of appeal were that the decision to reduce drivers in numbers was unfair, [this was the internal appeal] that there had been no prior consultation, that selection should have been on a Last In First Out basis and that lay offs and job sharing should have been considered. The management replied that there had been consultation [they give particulars of that]. The day after the notice of the 26 October 1992 the drivers' representative John Fielding had had the position explained to him. He had said that he would canvas opinion among the drivers but could not imagine that there would be any volunteers. Subsequent to the meeting with John Fielding several meetings were held to try to avert any redundancies among the drivers. After notice of appeal was lodged the selection assessments were given to all drivers and subsequently various positions within the works were offered to the drivers.

(i) On the 24 February 1993 the provisional notices of redundancy were confirmed and took place on the 26 February.

(j) The respondents had used LIFO on certain occasions in the past as a method of selection for redundancy, but it had not been the policy of the respondents to use LIFO on every occasion and of recent years it had not been used.

(k) In their applications to the Tribunal the applicants complained that the selection criteria were highly subjective.

10 In representations the applicants' representative argued that the selection criteria were subjective and that the respondents did not consider length of service and experience. He asked [and this was the representative, an experienced trade officer as we understand him to be, a Mr Bowie] the Tribunal to consider the cases ... [and those include Williams and Others v Compair Maxam Ltd and Graham v ABF Ltd].

The respondents' representative [he was a solicitor] argued that redundancy was conceded and that the dismissal was fair in all the circumstances. There would be a degree of subjectivity in any event, but the respondents had chosen a number of criteria and a number of people to score the criteria. There was no evidence that LIFO was a customary or agreed procedure."

So that was the way in which they approached their task and they then decided.

"11. The Tribunal considered the facts set out ... [as they have set them out above]. They considered whether or not the criteria were capable of objective assessment in all the circumstances of the case and whether their application was reasonable. The Tribunal also considered the guidance given to them by the three cases referred to by the applicant's representative. The Tribunal's concluded and unanimous view is that the respondents had a potentially fair reason for dismissing the applicants, namely redundancy and that in all the circumstances of the case the criteria were capable of objective assessment and were reasonably applied. The Tribunal were also satisfied that as much warning as possible was given of impending redundancies, that there was adequate consultation and that they (the respondents) sought to see whether alternative employment was available. The unanimous view of the Tribunal is that the respondents acted reasonably in what they did."

When this appeal was first brought before this Tribunal, on a preliminary hearing under our Practice Direction to see whether there were any grounds on which it could be allowed to proceed, we had before us the Notice of Appeal and that said:

"3 (ii) The Chairman's notes of evidence will show that the Respondents witness Mr A R Seddon admitted that all the selection criteria were subjective, no documentation was provided to support the criteria with the exception of output sheets. ..."

I happened to be the Chairman of that division of the Employment Appeal Tribunal. We were induced by that and, indeed, by the rest of the contents of the Notice of Appeal and what we were told then, to allow the matter to proceed. But we are now told that that ground, (which I have just read out) is not supportable.

Mr Seddon made no such admission and the appeal, therefore, rests simply on the basis that the criteria were subjective, and Mr Rigby has taken us through the evidence in an attempt to demonstrate that that is so. He says that these criteria, when you look at them, are in their nature subjective and he, as well as referring to Williams and Others v Compair Maxam Ltd referred us to other authorities, including Graham v ABF Ltd [1986] IRLR 90, to which the Tribunal was referred.

He (as I say) took us through the evidence, which was given by Mr Seddon, who was the Divisional Director at the material time; Mr Brearley, the Employee Development Manager and Mr Steven Brady, the Yard Foreman, and he attempted to show (by that evidence) that the conclusion of the Industrial Tribunal was quite simply impossible. If they had listened to the evidence properly and applied their minds to the evidence properly, they could not have concluded that these criteria were capable of objective assessment and were applied reasonably, which in this context is really a synonym for "fairly". Reasonableness means fairness in this connection.

He took us through the facts, so far as in Mr Rigby's submission they were material. He said the employer should have been looking for something objective and clear, such as length of service; attendance; or timekeeping. Instead they had flexibility; housekeeping; attitude; and output; and he referred us to the documents, which I have already referred to. He said this was really blatantly unfair. He referred to passages in Mr Seddon's evidence, in which he talked of personal impressions and he said "when you look at this evidence, it leaps from the page that here there was favouritism". He said these criteria were a mere contrivance.

He told us that by those allegations he was not actually saying that this was done in bad faith by the management, that was not suggested by the trade union, but if that is not what it means, what does it mean? The employers had to do their best. They told the Tribunal they did their best. It was accepted, apparently; it must have been accepted by the Tribunal; that the evidence which they heard from the employer's side was given in perfectly good faith.

It was then for the Tribunal to say what they made of these facts. Mr Rigby came to the logic of his submission and put it very fairly to us like this. There may well be cases, perhaps like this, in which objective qualities cannot be compared and any such matters as attendance, punctuality and disciplinary matters cannot properly be relied on. Really what it boils down to is a submission by Mr Rigby that, on the facts of this case, if one follows the logic just one final step further, the employers really had no alternative here to saying `last in, first out', given their evidence that these were men of perfectly good character, men of skill, respected, all of them. In those circumstances, LIFO was the only possible criterion.

We heard that as a submission. It is a submission which could have been made, but we do not think was made, to the Industrial Tribunal. We are not prepared to accept that that is the only possible criterion in these circumstances.

Our concluded view, all of us, though I think we arrived at it by rather different routes, having looked at the decision of the Industrial Tribunal and read it more than once, is this. The matters of complaint here were all matters which could have been, and in many cases were, laid before this Industrial Tribunal. In particular, the criticism of the criteria. Other matters could not be subject to legitimate criticism. There was warning, there was consultation; other jobs were offered. There was warning in good time, months before. So it rested simply on the criteria as stated on Williams and Others v Compair Maxam Ltd. There this Tribunal said that just because one of five matters laid down in broad terms was absent, that did not necessarily means that a Tribunal was bound to find unfairness.

So the Appellants restrict themselves to that one matter. That was laid fairly before the Tribunal and it is clear from the evidence that it was canvassed in the evidence. It may well be, and this is entirely beside the point, that another Industrial Tribunal would have taken a different view. It might well be (and again this is entirely beside the point) that we ourselves might have taken a different view had we been trying this case. What we cannot do is say that this Industrial Tribunal were not entitled to come to the conclusions which they did come to. We think that if they did accept the evidence (it is manifest that they did accept the evidence) which was adduced for the employers, it was perfectly open to them to say that notwithstanding the criticisms that were made, they had concluded that this was a case where the employers had behaved reasonably and had applied the rules of fairness in a proper way; had drawn up criteria honestly and doing the best they could, acting reasonably.

The Tribunal were entitled to reach their conclusion and since the only ground put before us is perversity, that is to say that in truth and in law they were not entitled to reach their conclusion, we are obliged to dismiss this appeal. We are all of the opinion that the Tribunal directed themselves correctly and reached a decision which was open to them.

So in those circumstances, the appeal must be rejected and dismissed. We would like to express our gratitude to Mr Rigby for taking on the case at the last moment and presenting so forceful and clear an argument to us.