United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 626_93_1502

Appeal No. EAT/626/93, EAT/633/93

I N T E R N A L

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 15 February 1995

Before

HIS HONOUR JUDGE D M LEVY QC

MR P DAWSON OBE

MISS D WHITTINGTON

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MRS S KEDGLEY & OTHERS          APPELLANTS

CROMPTON ETERNACELL LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MRS C CLEAVE

Legal Officer

GMB Legal Department

22-24 Worple Road

London

SW19 4DD

For the Respondents MR J BOWERS

(Of Counsel)

Messrs Eversheds Ingledew Wright

Solicitors

Milburn House

Dean Street

Newcastle Upon Tyne

NE1 1NP


 


JUDGE LEVY QC: Crompton Eternacell Ltd, ("the Company") in the summer of 1992 were faced with falling orders. They had carried out redundancy exercises in the past, and they found the need to carry them out again. Consultation about the redundancies with unions and lay representatives of the employees commenced on Tuesday, 28 July 1992. By 31 July the exercise was over.

The Company decided to carry out the exercise and thus would invite volunteers and those employees seeking early retirement; employers offering themselves for voluntary redundancy would be accepted at the discretion of the Company. Next, the Company scrutinised unreasonable levels of absenteeism or bad timekeeping. The records were examined by Mr Edwards who investigated the cause of absenteeism. He then adopted a bench mark and then the exercise went on.

At the end of the exercise 53 employees had been made redundant. A number of them complained to the Industrial Tribunal. There was a hearing of complaints by eight of the employees before an Industrial Tribunal at Newcastle upon Tyne on 23 and 24 March and from 24 to 26 May 1993. The Tribunal, under the chairmanship of Mr D.H. Emmitt, who has unfortunately since died, came to a conclusion which was as follows:

"The unanimous decision of the Tribunal is that each of the applicants was unfairly dismissed on the ground that the respondents failed to follow a proper procedure. However, in no case would a proper procedure have made any difference to the outcome and therefore we make no Compensatory Awards".

At the hearing several of the Respondents represented themselves. Others, Mrs Copeland, Mrs Palmer and Mrs Tabone were represented by Mrs Mary Hiscock, a Welfare Rights Officer of the South Tyneside Welfare Rights Service. The Tribunal reserved their decision which was sent to the parties on 24 June 1993.

All the employees appealed from the decision. One of them has abandoned her appeal, four of them, Mrs Kidgley, Mrs Parvia, Mrs Simonsen and Miss Bonar have been represented today by Mrs Cleave, the Legal Officer of G.M.B. Three of them, Mrs Palmer, Mrs Tabone and Mrs Copeland who had previously been represented by Mrs Hiscock, have sent, through her, a skeleton argument to this court. One of them has abandoned her appeal. Mr Bowers, who appears for the Company, accepts that the decision, so far as those representing Mrs Cleave's clients, should go for all of them. There is a small compass of law on the appeal.

The Industrial Tribunal made trenchant criticisms of the manner in which the consultancy exercise had been carried out by the Company but nonetheless, as has been made apparent, they ordered no compensation. Mrs Cleave said this was quite wrong. First of all, by awarding no compensation when there has been no consultation, that is (so to speak) a green light for employers to ride roughshod over the need to consult as laid down in the legislation. If they do not consult and they then pay no compensation, the force of employment law is diminished; furthermore, she says, it was wrong on the particular facts to give no award because, if the employers had consulted properly, dismissal would have taken place later than on August 6. Therefore she says, extra compensation would have been payable. She refers us to Section 74 of the Employment Protection (Consolidation) Act 1978 which reads:

"74(1) Subject to sections 75 and 76, the amount of the compensatory award shall be such amount as a tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer".

She fastens on to the words "to action taken by the employer" and refers that to the employer having no proper consultation process. She also refers us to the decision of this court in Mining Supplies (Longwall) Ltd v Baker [1988] ICR 676 and says this shows that where there is no proper consultation, compensation follows. She does not submit that there was a substantive, rather than a procedural failure by the employers. She does not say wrong findings of fact were made. She does not complain of failure by the Industrial Tribunal to find facts, but she says the failure to award any compensation was wrong.

Mr Bowers says that the Mining Supplies case makes it clear that every case on compensation depends upon its facts and that indeed is part of what Mr Justice Wood says, giving the judgment of the Tribunal. And he also reminds us by the illustration of the Scottish case, Robertson v Magnet Ltd (Retail Division) [1993] IRLR 512, that the lack of consultation in redundancy cases does not mean that compensation must be paid. The case of course hinges on the well known decision in Polkey v A E Dayton Services Ltd [1988] ICR 142, and for convenience Mr Bowers has taken us to the references to that case which are contained in Wolesley Centers Ltd v Simmons [1994] ICR 503. There, Judge Hague, giving the judgment of this Tribunal, says at page 508 having set out the words in the Section 74 to which we have already referred says:

"It is clear from the final words of that provision that a finding that a dismissal is unfair does not mean that an employee is entitled to full compensation for the loss resulting from the loss of his job. He is only entitled to the loss he has sustained which is attributable to action taken by the employer, so that, if he would have been dismissed even if the employer had acted properly and fairly, the employee's compensatory award is likely to be small or even nil. In Polkey v A.E. Dayton Services Ltd [1988] ICR 142, 163 Lord Bridge of Harwich quoted with approval dicta of Browne-Wilkinson J. in Sillifant v Powell Duffryn Timber Ltd [1983] I.R.L.R. 91, 96:

There is no need for an `all or nothing' decision. If the industrial tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment.

We think that it follows from the Polkey decision and from later authorities (and he cites a number of them).... that the assessment of the compensatory award in this kind of case involves a two-stage process. First, the tribunal must ask itself whether if the employer had followed the proper procedures and acted fairly the employee would not have been dismissed. If the answer to that question is reasonably clear one way or the other, there is no difficulty. But in many cases the answer will be uncertain, in which situation, in order to give proper effect to section 74(1) of the Act of 1978 and the dicta of Browne-Wilkinson J. set out above, the tribunal must, as the second stage of the process, make a percentage assessment of the likelihood of the employee being retained which must then be reflected in the compensatory award".

Mr Bowers submits, and we accept his submission, that Judge Hague correctly set out the law there and this is a passage which applies very much to this case. Certainly, the sentence: "First, the tribunal must ask itself whether if the employer had followed the proper procedures and acted fairly the employee would not have been dismissed". If the answer to that question is reasonably clear, one way or the other, there is no difficulty. Mr Bowers submits that on the findings of this Industrial Tribunal and on the way they approached this case, they did the proper test and they came to the proper conclusion. He says that the Industrial Tribunal below made an impeccable decision and that decision was right.

We turn to the Full Reasons which the Tribunal gave. After setting out the representation there is in paragraph 5 of the Full Reasons:

"5 It was agreed by all parties that in the event of a finding that any of the dismissals was unfair for procedural reasons we would apply `the Polkey principle' and indicate whether and to what extent a proper procedure would have made any difference".

Obviously the test that is in Wolesley has been borne in mind. There are then paragraphs showing the finding of facts including, at some length, the procedures which were gone into, the warnings and consultations which followed and the criteria and assessment of the various Respondents and the timetable in which the redundancy exercise was carried out.

At paragraph 35 commences the findings of the individual applications and those are carefully considered. At paragraph 44 the conclusions commence. Paragraph 45 reads:

"45 There was no dispute on this issue but it is right that we should formally record that in each case we find the reason for dismissal was redundancy".

There is then a reference to Mrs Hiscock's submissions on Section 59 of the 1978 Act, but we think that the Tribunal properly rejected the submissions made for the reasons they gave. At paragraph 51 there is a reference to Williams v Compair Maxam Ltd [1982] IRLR 83 which shows how carefully the Industrial Tribunal was following a proper route. There is then in paragraphs 52 and 53 references to the criteria and the application of those criteria in which the Industrial Tribunal come to the conclusion that the selection procedure was fair and reasonable.

They come to the conclusion that the selection procedure was fair and reasonable and they come to the conclusion that it would be wrong for them to find it was unreasonable. There is then at paragraph 58 the trenchant criticism of the procedural aspects of the matter for which the Industrial Tribunal rightly lambast the employers. At the end of that paragraph there is this paragraph:

"59 Further we believe that the individual process consultation with the employees selected on the 31 July was inadequate and hasty. The employees should have been given more time to compose themselves to consider their assessments and if they so wished to be represented and to brief their representatives".

There then follows the conclusion in paragraph 60:

"60 For the above reasons we conclude that the dismissals were procedurally unfair. However, we went on to consider under `the Polkey principle' whether a proper procedure would have made any difference".

And then there is this very important sentence:

"We considered each application separately but in no case could we find any ground for concluding that early warning and better consultation process would have made any difference. Any right thinking person would have sympathy for an employee who is selected for redundancy after a substantial period of competent service".

We interpose to say that each of these employees had been in the Company's employ for a number of years.

"None of these applicants was incompetent and in normal circumstances the respondents would not have wished to dispense with their services. In these circumstances it is understandable that the applicants should feel a sense of grievance. But it is not the function of an Industrial Tribunal to re-assess the decisions of management in a selection procedure which involves the assessment of one employee in comparison with others on various heads of skill and ability. Each of the applicants was protesting that in comparison with her colleagues she should not have been selected. The respondents thought otherwise, and having found that they adopted fair and reasonable criteria for selection and that those criteria had been fairly and reasonably applied by supervisors and members of management who were motivated by a wish to treat all the employees fairly, it seems to us that whatever procedure had been adopted and however prolonged the consultation had been, none of the applicants would have been able to persuade the respondents to reverse the selection decision. That being so we do not think it would be just and equitable to make any Compensatory Awards".

Mrs Cleave says that the position is that if the consultation proceedings had gone on longer, then the decision would have been delayed. Mr Bowers counters this argument by saying that if the employees had been dismissed and then argued about it and then had been found to be properly dismissed, the date of termination would not have been altered. We accept that submission.

We think that the thrust of the holding of the Industrial Tribunal is that the consultations should have started earlier. They should have started earlier but if they had so started and been properly carried through, there would have been proper consultation but the same result.

In the circumstances we, like the Industrial Tribunal below, have considerable sympathy for the employees but that sympathy cannot extend to us allowing this appeal. It seems to us no point of law arises from the decision on which we can properly find for the Appellants. Accordingly we dismiss this appeal.