United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 645_94_0305

Appeal No. EAT/645/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 3rd May 1995

Before

THE HONOURABLE MR JUSTICE MORISON

MR T C THOMAS CBE

MRS P TURNER OBE

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MR H TEYMOURIAN          APPELLANT

MUIRHEAD VACTRIC PLC          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR A REIN

(Representative)

FRU

Room 140

49-51 Bedford Row

London WC1R 4CR

For the Respondents MR D BROWN

(of Counsel)

EEF

Broadway House

Tothill Street

London SW1H 9NQ


 


MR JUSTICE MORISON: The Appellant employee made a number of complaints against his former employers, Muirhead Vactric Plc, the Respondents to this Appeal whom we shall call the "Company".

He complained that the Company had unlawfully discriminated against him on the grounds of race, in three different respects. Secondly that he been unfairly dismissed and thirdly, that his dismissal was automatically unfair as a result of being racially motivated and fourthly, he was victimised, contrary to the Race Relations Act. All these complaints were dismissed by an Industrial Tribunal held at London (South) following a hearing on 17th November 1993.

The Appeal in this case, relates solely to the way the Tribunal dealt with complaint of unfair dismissal under Section 57 of the 1978 Act, and we shall therefore confine ourselves to that matter.

The background facts may be shortly stated and taken from the Tribunal's decision. The Appellant was dismissed by reason of redundancy. The Company had a procedure for selection, which was agreed with the Unions representing their workforce, namely LIFO. And that principal was applied in this case. The Appellant was one of their four quality inspectors. Of those four, the Appellant had least service. At around the first quarter in 1992 the Company's order book was falling and redundancies became a necessity. Active consideration was given to question of how many redundancies and who, for some three weeks before the Appellant was given his first intimation of impending redundancy, on 1st March 1992. By which time a pretty firm list of names had been drawn up and had been in existence for seven to ten days.

The Industrial Tribunal accepted the Company's evidence that the position was so volatile that the list might change at any moment, and that remained the position right up to the time the Appellant was given an intimation about his position. As the Industrial Tribunal put it at paragraph 8:

"When the position was so volatile, we accept that there were difficulties in consultation at that time."

The Union was given the list on the morning of 12th March, before the Appellant was called in to a friendly meeting with his immediate superior. At that meeting the Appellant made a number of suggestions, such as the Company calling for volunteers and the possibility of them offering early retirement to some older employees. He attended that meeting with his Trade Union representative. After that meeting the Company spoke to one individual about the possibility of him retiring early, but he was unwilling. But the Company made no broadcast appeal to seek volunteers for early retirement, nor did they offer financial incentives to achieve that objective.

The following day, the Appellant was told that he was dismissed, but he had a right of appeal and until then he would remain an employee. The Company and the Union were unable to agree to the resolve their differences over the Appellant's selection, and hence his application to the Industrial Tribunal.

The Industrial Tribunal held as follows:

1. The Appellant was correctly selected for redundancy, in accordance with LIFO.
2. A consultation period of twenty-four hours between 12th and 13th March was excessively short, and the Company should have consulted a week or ten days earlier than they did.

The Industrial Tribunal said, and we quote:

"Nevertheless, not only was there no objection from Mr Teymourian's Trade Union regarding inadequate consultation, but we are convinced that had such a consultation taken place earlier the result would have been precisely the same, namely that Mr Teymourian would have been selected on the principle agreed with the unions for that purpose. .... It appears to the Tribunal that if a single-strand principle such as last in first out is agreed in advance with the employer's Trade Unions, the employers are really bound to follow that criteria and would depart from it at their peril, as it would obviously give rise to widespread complaints of unfairness and considerable objections from, and perhaps action by, the Trade Unions and their members. Accordingly, whilst we find the dismissal to be unfair vide Polkey, we conclude that this is one of the exceptional cases referred to by Lord Bridge in his judgment in that case in which following what might be concluded to be a fair procedure would have made no difference to the outcome."

It seem to us, with respect, that the Industrial Tribunal mis-directed themselves in this passage, because they should have asked themselves whether a reasonable employer, given the circumstances, could have decided not to consult at the earliest possible time. The question "what would have happened, had they done so?" is not permitted. Only where a reasonable employer could have fairly decided not to consult, for example because of the urgency of the situation or such procedural steps would have been futile, would a procedural defect relating to consultation not make the dismissal unfair. Of course, if a fair and proper procedure, if followed, would have made no difference, then that would effect the question of compensation, which might be nil. It seems to us, that it would be regrettable if industrial tribunals were to ask the question which is not permitted, under the guise of considering whether a particular case is exceptional. There is no doubt that an exceptional reason justifying a reasonable employer in having no proper consultation may be the futility of it. But it would only be very rare cases, where a reasonable employer will conclude that such consultation is futile.

Redundancy situations cause a great deal of unrest and concern amongst those who may be effected. Rumour and gossip travel fast in the work place and employees readily feel insecure. Good, sensible and timeous consultation, with proper information, will mitigate feelings of unrest and sometimes distrust. It is not without significance that the Appellant, in this case, made the other complaints to which we referred at the outset of this judgment. Employers owe it to their employees to deal with a redundancy situation, in a generous, open and sympathetic way. In almost all cases, where there is a redundancy situation, the individual employees will not have contributed to the position in which the Employer finds itself. He or she is the victim of the circumstances which have arisen, and full consultation is the least the company can offer, if, as it ought, it wishes to treat its employees with the respect that they deserve, and in a manner which the managers of the company would themselves wish to be treated, were the roles reversed.

To some extent, we think that the Company understood the importance of consultation, by reason of what was contained in their manual. And I refer to page 41 of the file, where it is headed "CONCLUSION", and this is the Company's own document.:

"It is emphasized that redundancy, however great or small the scale, creates problems of a very personal kind for those directly involved. Full consultation on all appropriate matters can materially assist in the decision making process but he ultimate burden of finally deciding when redundancy is inevitable and of selecting those to be discharged must rest with the Management. But provided a foundation of co-operation and good will exists, adherence to the principles and procedures outline in this statement can materially assist in carrying out a difficult task."

We have already drawn attention to the passage in the Tribunal's decision which appears to us to be a mis-direction, and wish to refer in particular, to the last sentence of paragraph 11, beginning with the word "accordingly". It seems to us that the Industrial Tribunal will need to consider with care the contention that it was not practicable for the Company to have sought volunteers and early retirers, because that might have impinged upon the agreed procedure for selection. It seems to us arguable that LIFO was the process by which selection had to be made AFTER a need for compulsory redundancies had been established, following appropriate consultation. Seeking early retirers and volunteers did not impinge and could not impinge on the process of selection of those who were unwilling to leave. In our view, therefore, the word "accordingly" implying that there is a link between the previous sentence and the conclusion that they arrived at, is wrong.

In any event, the Industrial Tribunal will wish to look carefully at the written procedures which this Company itself used and we refer in particular, to the heading "OTHER CONSIDERATIONS" where management indicate that they will consider the extent to which redundancy can be avoided in various ways, all of which are consistent with adoption of the LIFO principle.

Accordingly we are of the view that the Industrial Tribunal finding on this question, cannot stand. But much the more difficult decision is the question as to what we should do. We could send the matter back to the same Industrial Tribunal and invite them to apply the correct test: namely, could a reasonable employer have decided not to consult, as we have indicated. Or we ourselves could substitute a finding of unfair dismissal, if we were sure, and absolutely sure, that that was the only conclusion the Industrial Tribunal could reach, and then send the matter back to the Industrial Tribunal for the question of compensation to be determined. Or, if we were sure, that is absolutely sure, we could ask ourselves make a finding of unfair dismissal, but say that no loss had been sustained, because the same result would have obtained in any event. Or, we could ask a new tribunal to hear the case afresh.

On balance, we favour remitting the case back to the same Industrial Tribunal for their further consideration in the light of our judgment. It seems to us, that we cannot be absolutely sure that the decision of the Industrial Tribunal would be that the dismissal was unfair, even when the correct test was applied. Nor are we sure that the inevitable outcome of a finding of unfair dismissal, if such is made, will leave the Appellant without compensation. That matter requires investigation and findings as to what would have been a proper period of consultation. And evidence will need to be given in relation to compensation, if the Tribunal were to conclude, in the light of our judgment, that the proper finding in this case, is one of unfair dismissal.

It seemed to us inappropriate that there should be a new hearing before a different tribunal, bearing in mind the delay that would ensue between the events in question and the evidence about them, and the possible difficulties of getting witnesses to come to the Tribunal and give evidence.

Accordingly, for the reasons we have given we allow the Appeal and remit the matter back to the same Tribunal.