United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 766_94_1010

Appeal No. EAT/766/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 10 October 1995

Judgment delivered on 7 November 1995

THE HONOURABLE MR JUSTICE MORISON

MR D A C LAMBERT

MISS S M WILSON

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MR P FARRELL          Appellant

LONDON BOROUGH OF CAMDEN          Respondents

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR D HEHIR

(UCATT Representative)

For the Respondents MR D BROWN

(of Counsel)

Legal Services

London Borough of Camden

Town Hall

Judd Street

London

WC1H 9LP


 


MR JUSTICE MORISON: For some 17 years Mr Farrell had been employed by the Camden Borough Council as a painter in their direct labour organisation. He was an active member of the relevant recognised Trade Union, now called UCATT, a shop steward and an active member of the Council's Health and Safety Committee. His employment came to an end at the end of May 1992, in the context of an alleged redundancy situation. He presented a complaint of unfair dismissal and also alleged that he had been dismissed for trade union activities.

There were three issues before the IT

1. Had Mr Farrell been dismissed
2. If yes, was that dismissal by reason of his trade union activities or by reason of redundancy?
3. If he was dismissed for redundancy was it fair.

The Industrial Tribunal, in a Decision which was entered in the Register on 21 July 1994, unanimously concluded that Mr Farrell had been fairly dismissed by reason of redundancy.

Against that decision he appeals. It is said that the Industrial Tribunal were wrong to hold that he was fairly dismissed. In paragraphs 4 and 5 of the Decision the Tribunal finds that there was a dismissal; in paragraphs 6 and 9 they deal with the reason for the dismissal and the suggestion that the Council's actions were based wholly or partly on Mr Farrell's trade union activities, and in paragraphs 7 and 8 they deal with the fairness of the dismissal. The Council cross-appeals and contends that the Industrial Tribunal were wrong in holding that Mr Farrell was dismissed. It is to be noted that there is no longer any appeal against the Industrial Tribunal's finding that the dismissal was by reason of redundancy. What is in issue is the fairness of the dismissal having regard to those findings of fact which the Tribunal made. The Employment Appeal Tribunal is empowered only to consider points of law. We cannot review findings of fact unless it can be said that they were perverse; that is that there was no evidence to support such findings.

It is, we think, important to bear in mind that what is contained in a decision of an Industrial Tribunal is a reflection of the arguments and evidence presented to them. What has happened in this case is that the evidence and submissions at the hearing before the Industrial Tribunal were directed, so far as the unfairness of the dismissal was concerned, to two aspects: the selection criteria and the Council's failure to operate the LIFO process.

It is to those two issues that the Decision is principally directed. That said, there was evidence about the question of consultation but no findings have been made on the point; this was the second phase of a redundancy operation on which there had been consultations through the proper procedures. It was, so we understand it, the Union's response at that time [at phase 1] that there was no need for any redundancies; that they were not willing to take part in the selection process as that was a management decision; and that as far as they were concerned selection could be by drawing names out of the hat, although this was probably just a flippant remark, albeit making the serious point that as far as the Union was concerned the management must take responsibility for the consequences of following the course they chose. Industrial action had been threatened in connection with the redundancy process. LIFO was not argued for by the Union as an appropriate criterion at the first phase and was not used then; the applicant did not argue at the Industrial Tribunal that he should have been selected on the basis of LIFO, although he does complain that no regard was had to his length of service when the employers made their selection of him.

At the appeal, on behalf of the Appellant, Mr Hehir, an official of UCATT, with (if we may say so) considerable skill, advanced the following propositions:

4. Applying the guidelines in Williams v Compair Maxam Ltd [1982] IRLR 82, there had been inadequate consultation with the individual. The use of the criteria should have been discussed with him personally before they were adopted or applied in his case; otherwise the employee would be faced with a fait accompli. Personal consultation was required; consultation with the Union was not sufficient: Rowell v Hubbard Group Services Ltd [1995] IRLR 195. Therefore, there was a failure by the employer to do as much as was reasonably possible to mitigate the impact on the work force and to satisfy them that the selection had been made fairly and not on the basis of personal whim - see paragraph 19 of Williams.
5. If an employer departs from the LIFO principle he must show that the criteria he adopted are reasonable and that they have been applied rationally and objectively and in an unbiassed manner - Greig v McAlpine cited with approval in Williams at paragraph 20. On the facts of this case, there was no reasonable justification for ignoring relative lengths of service when making the selection.
6. The Council failed to call for volunteers before the Appellant was selected. They had called for volunteers when the first phase of restructuring was carried out; they should have looked for volunteers before the second phase. The failure to call for volunteers was a breach of a customary or agreed procedure and in any event was unfair.

So far as the facts are concerned which relate to the points which were argued on the appeal, we can take them from the Industrial Tribunal's Decision and from the documents provided to us by the parties at the hearing of the appeal.

There had been a major restructuring of the Council's workforce which commenced in 1988, in advance of the changes needed to meet the challenges occasioned by CCT. In particular, the Council had to address its mind to the future of its direct labour force. In the context of these changes the Council had considered the application of the last-in-first-out principle. It concluded that an application of that principle to the Council's workforce could lead to successful complaints of indirect discrimination on the grounds of race or sex. Rightly, the Industrial Tribunal did not investigate whether such a conclusion was correct, because, as was said, it should not substitute its own view for the views of the employer [paragraph 8 of the Decision], although the Tribunal expressed some reservations about the Council's conclusion. But it does not follow from that conclusion that a reasonable employer could reasonably ignore altogether respective lengths of service. We shall return to this point later.

The second phase of the redundancies took place against a background where

"all those who had wished to go on voluntary severance had long since departed and they were now in the position of having to make selection among the remainder of the Direct Labour Force. They decided therefore to do assessments on all the members of the Direct Labour Force and particularly the painters and decorators whose redundancy was being considered and to select for redundancy on the basis of those assessments."

Each assessment sheet contained 7 criteria. The assessors, of whom there were three, had to indicate whether in relation to each criterion it was "met" or "unmet". Although the sheet provided a space for showing evidence to support any assessment, that column is blank. The first 6 criteria relate to the ability of the assessee to carry out his duties and respond to supervision and to instructions and directions from management. The seventh criterion was

"Satisfactory level of attendance"

On the Appellant's sheet it is indicated that he met all 6 ability related criteria but that the seventh criterion was "unmet".

Having heard the evidence, the Industrial Tribunal made the following findings:

"7 ... they [the assessors] carried out their task conscientiously and that the assessments which they produced were proper ones. This led to the selection for redundancy of the two [persons] who did not meet the criteria in relation to ability and to the further selection of three, including the Applicant, [Appellant] on the basis of sickness which, in the case of the one person, was 78 days, in the case of the Applicant [Appellant] was 11 days, and the case of another employee was 8 days. .... It will thus be seen that the selection of the Applicant [Appellant] was on the basis that he had the second worst level of sickness recorded against him. There was no criticism in any way of his ability to do work and the two persons against whom there was such criticism were among those selected for redundancy.

8 ... The Respondents [Council] clearly had a difficult task since the workforce had already been pared to the bone and it was now at the point where it had to consider for redundancy persons who were obviously highly competent tradesmen and whom it would not wish to see dismissed from its service. We have come to the conclusion that we cannot criticise the Respondents for the method which they adopted bearing in mind the difficulties with which they were faced. They selected for redundancy the only two employees against whom there was some criticism of their ability and the three who had the highest levels of sickness. If they chose to adopt this method of selection because of the possibility of being accused of indirect discrimination rather than to adopt last-in-first-out, then in our view any decision of the Tribunal that this was a wrong method of selection would be to substitute our own view for the proper views of the Respondents [Council]."

Having applied the criteria in the way described, the Council wrote to the Appellant on 21 May 1992 telling him that "you will not be retained and with effect from the 29th May, 1992 your post will cease to exist". He was offered the chance of applying to be considered for the Council's Early Retirement or Voluntary Severance Scheme. Because of the financial rewards, the Appellant opted for inclusion in the Voluntary Severance Scheme and the exercise by him of this choice led the Council to assert that he had not been dismissed and to cross-appeal on that point, the Industrial Tribunal having rejected their assertion in paragraph 5 of the Decision.

Following receipt of this letter, the Appellant went through the application of the criteria to his case with a management representative and he persuaded them to reduce the assessment of his absences from 20 to 11 days, by arguing that 9 of them had been due to an Industrial Injury.

We turn, in the light of these facts, to consider the submissions made to us on the Appellant's behalf.

On the question of consultation, it is clear from the evidence that the Council sought consultation with the Union over the question of selection criteria, but the Union, for whatever reason, was not willing to co-operate on that issue. Where there are collective arrangements in force we consider that an employer cannot be reasonably criticised if he seeks consultation with those who represent the affected section of the workforce. Personal consultation in a large organisation such as the Council's where there is Union recognition is not a pre-requisite to a fair dismissal, as the cases of Williams and Rowell show. There was some, and we are not prepared to say unreasonably inadequate, personal consultation with the employees, who had the opportunity to question the application of the criteria to them. Indeed, this was effective consultation as the facts demonstrate. With the benefit of hindsight, it may well be that had the Union been prepared to enter into effective discussions about the selection process the Council may have been persuaded to adopt a selection process which would not have led to the Appellant's dismissal.

We have grave doubts about the fairness of the selection criteria which were used and their application on the facts of this case. In the first place, criterion 7 encompassed absences due to a number of different reasons, including sickness. The period under assessment was the previous 12 months. Therefore, a long serving employee of 20 years who had had no days off for the first 19 years but had developed a genuine medical complaint which kept him in hospital and off work for two weeks might be selected before a new employee who had had one day off during his first six months of employment. There was no weighting system to reflect long periods of good attendance. Second, the person who was selected immediately after the Appellant had "met" the seventh criterion. The standard for that criterion was 9 days off in the previous 12 months. That person met all seven criteria. Therefore the selection filter was not fine enough to enable the Council to select for redundancy those who did not meet one or more criteria, and keep those who did.

During the course of argument we expressed our concern as to whether it could be said that any reasonable employer could have adopted the stance it did. Indeed, we are doubtful if we ourselves would have decided that the Appellant's dismissal was fair. But as we have said, that was an issue for the Industrial Tribunal to decide and we cannot identify any error of law in their approach. Nor, in the end, did we consider their conclusion on fairness as perverse. It is, we think, significant that neither the Union nor the Appellant argued for the LIFO principle. If the Appellant was spared dismissal on the grounds of his length of service as against a person who met the criteria more fully than he did, in effect this would amount to the application of LIFO. Although there are strong arguments in favour of a weighting system which would have taken the Appellant's sickness record over the whole period of his employment into account, we have no evidence to show that this would have made any difference to his selection; nor would such a system inevitably be fairer. A long term illness many years ago might have produced a less favourable assessment in respect of an employee who had had no absences in the immediate past.

In these circumstances we must dismiss this appeal, albeit with some regret.

For the future, where voluntary redundancies do not resolve the situation, we think that the Union should reflect on their decision not to enter into sensible discussions with employers about selection criteria, however strong their views about the propriety of redundancies. This was a large scale redundancy situation: the workforce was reduced from 198 to about 60. They may wish to review whether their members interests would be best served by participating in consultation over the selection criteria, rather than leaving the employer to choose them. The Council may wish to consider whether criterion 7 should be determinative of the selection of an individual for dismissal, bearing in mind its potentially capricious effect.