United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 1155_94_2601

Appeal No. EAT/1155/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 26 January 1996

HIS HONOUR JUDGE C SMITH QC

MR D A C LAMBERT

MISS D WHITTINGHAM

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MR R J CLARK          APPELLANT

M K ELECTRIC LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR C DIXON

For the Respondents MR N CHRONIAS

(Legal Adviser)

E.E.F.

Broadway House

Tothill Street

London SW1H 9NQ


 


JUDGE SMITH QC: This is an appeal by the Applicant before the Industrial Tribunal, Mr Clark, against the decision of an Industrial Tribunal sitting at London (North) on 8 September 1994. The Industrial Tribunal held that the Appellant, Mr Clark, had been unfairly dismissed by the Respondents MK Electric Ltd on the grounds of redundancy, but the Industrial Tribunal went on to hold that he should receive no compensation under Section 74 of the Act, in consequence of the application of the principles laid down in Polkey v A E Dayton Services Ltd. The appeal has been well argued by both sides. We will deal with the submissions in due course.

The background is, as appears from the decision of the Industrial Tribunal and from what we have been told by both sides, in the absence of any Notes of Evidence, is that MK Electric Ltd the Respondents, are quite a substantial company, having apparently a number of different sites, including the factory at Leigh-on-Sea, referred to specifically by the Industrial Tribunal. It was at that factory as appears from the decision of the Industrial Tribunal in paragraph 2 that the Applicant was employed, as the Industrial Tribunal put it:

"... he was one of a number of persons working on various tasks under the control of Mr Lawrence the Personnel Manager of the Respondent's factory at Leigh-on-Sea."

As the Industrial Tribunal further put it in paragraph 2 of their decision:

"He was selected for redundancy, [in 1992] according to the Respondents, because, after an analysis of the situation to decide who should be made redundant... that Mr Clark's job had disappeared..."

Thus his position fell to be considered on its own. In other words it was the position of the Respondent employers that there was no pool from which a selection for redundancy should have been made. It was simply a question, according to their position, of that particular job having disappeared.

The Industrial Tribunal held as a finding of fact in paragraph 2 of their decision, that they were not satisfied that the way in which the Respondents had looked at the matter, by which is meant of course the matter of Mr Clark's redundancy, was the proper way of looking at the matter. They continued in their decision in this way:

"... We think that all the persons who were on a level with Mr Clark should have been considered for selection and that there should have been consideration of their various positions and consultations with them."

It is implicit in the Industrial Tribunal's decision as construed thus far, that the Industrial Tribunal, in our judgement, had considered Section 57(3) of the 1978 Act and the various factors that have to be taken into account by an Industrial Tribunal in deciding whether a redundancy is fair, and they had come to a decision that the redundancy was unfair, and that the Applicant/Appellant had accordingly been unfairly dismissed. Although they do not spell it out in any way at all, that is our interpretation of their decision up to that stage.

The Industrial Tribunal then, as they were fully entitled to do and indeed required to do, went on to consider the question of compensation under Section 74. Amongst the matters they had to consider in connection with the issue of compensation, is of course the issue that is raised in Polkey and is referred to by Lord Bridge at page 163 in these terms:

"If it is held that taking the appropriate steps which the employer failed to take before dismissing the employee would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation or, in the case of redundancy, no compensation in excess of his redundancy payment."

There is then the important reference to the qualification raised by Mr Justice Browne-Wilkinson, as he then was, in the Sillifant case which is also referred to by Lord Bridge citing Mr Justice Browne-Wilkinson's judgment:

"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."

It is having regard to those propositions that the Industrial Tribunal must proceed when deciding the question of compensation.

What happened here was this, reading from the very next two sentences in the decision, which read as follows: (after the sentence which we have set out above

"We think all the persons who were on a level with Mr Clark should have been considered for selection and that there should have been consideration of their various positions and consultations with them."

The Industrial Tribunal then state at the end of paragraph 2:

"We were, however, satisfied that had such a procedure been gone through it was almost inevitable that Mr Clark would have been selected for redundancy. Accordingly on the principles of Polkey v A E Dayton Services Ltd we mark the chance that Mr Clark would have been selected had a proper procedure been gone through as 100% and we therefore decline to award him compensation."

In our judgement, just looking at those words in that way, they strike us as surprising. First of all, no reasons are given for such a conclusion. No steps in the argument by reference to which the conclusion has been reached are set out in the decision. With great respect to the Industrial Tribunal, one is really left in the dark as to what their reasoning was. Nevertheless we agree with the submission made to us by Mr Chronias on behalf of the Respondents that we should uphold this decision of fact by the Industrial Tribunal if there is any evidence to support it. We entirely accept the proposition that we can only interfere if there is literally no evidence to support a finding of fact which an Industrial Tribunal has reached. There can be no question of our substituting our view of the evidence or the facts or anything of that kind. We must record that we have been hampered somewhat here by the lack of any Notes of Evidence. We are not critical of anybody in relation to that. It is simply a fact that we have not had the Notes of Evidence before us. However, Mr Dixon and Mr Chronias who represented the parties before us on this appeal, have agreed in effect that there was the following evidence before the Industrial Tribunal.

First of all, in written form, there was a document at page 31 in our bundle which we understand was prepared by the Respondents relating to the Appellant and a Mrs Vera Quartermain, another employee employed in the same factory, having duties in respect of which she was responsible to Mr Lawrence, the Personnel Manager. We have that document which was prepared, as Counsel put it in argument, in order to show that the two fulfilled different functions. In addition it was agreed between the representatives, secondly, that there was oral evidence from the witnesses who were called by the Respondents, that of those two persons, namely the Appellant and Mrs Quartermain, the Respondents regarded Mrs Quartermain as having particular skills, in particular an Industrial Relations Personnel Officer (IRPO) skill, superior to that of the Appellant. That is a skill in dealing with the unions in respect of various personnel matters on behalf of management. There was evidence that in answers to questions in cross-examination, that of the two, were comparison to be made between those two employees (the Appellant and Mrs Quartermain), the Respondents would have selected the Appellant for redundancy, owing to the fact that Mrs Quartermain had the superior skills.

As we understand it, and it is indeed our conclusion on the submissions we have heard before us, that was the extent of the evidence that was before the Industrial Tribunal. The question for us is can that evidence justify the finding of fact which the Industrial Tribunal have reached, namely that, had the proper procedure been gone through, and that is the proper procedure which they themselves have categorised and defined, namely that all the persons who were on a level with Mr Clark should have been considered for selection, and that there should have been consideration of their various positions, and consultations with them, can the evidence that we have recited possibly justify a conclusion that if that proper procedure defined in that way, as it has been by the Industrial Tribunal, had been gone through, the result would almost inevitably have been that Mr Clark would definitely, to the tune of 100%, have been selected for redundancy.

In our judgement, the evidence as to the respective skills of the two employees, namely the Applicant and Mrs Quartermain; even when there is added to it the clear conclusion on behalf of the Respondents that they would have preferred to retain Mrs Quartermain and dismiss the Applicant cannot begin to be in any way decisive by way of answer to the question, which having regard to their own clear findings of fact in relation to liability, the Industrial Tribunal were called upon to answer, when they were considering the Polkey point. That question was not whether either Mrs Quartermain or the Appellant should be selected for redundancy, but was we repeat, which of all the person who were on a level with Mr Clark should have been selected for redundancy after consideration of their various positions and consultations with them.

There was in our judgement no evidence whatsoever accordingly before the Industrial Tribunal, as to what the result of such a selection procedure which they themselves had identified, would have been. This was not surprising since the Respondents had taken the view that no selection procedure as such by way of comparators, or by way of a selection pool, was necessary. That was because they regarded the job being carried on by the Appellant as being unique. It was this argument that was rejected by the Industrial Tribunal. It was not surprising therefore that there was a complete lack of evidence relating to the pool of employees, which the Industrial Tribunal itself defined. Accordingly it is not surprising that there was not evidence upon which the Industrial Tribunal could properly reach a conclusion on the Polkey point, when they came to turn to it.

Accordingly, we do regard this as one of these rare cases where unfortunately in our respectful judgement, the Industrial Tribunal has reached a conclusion in the absence of their being any evidence which entitled them to reach as such a conclusion. Accordingly it is a conclusion which cannot, in our judgement, be allowed to stand. We should add that we do consider that it is incumbent upon an Industrial Tribunal in circumstances which are of course not uncommon, where, having decided that a dismissal is unfair, so that there is, on the face of it, going to be an award of compensation, an Industrial Tribunal then decides that there should be no compensation because applying the principle in Polkey, the result would have been the same for the Industrial Tribunal to give sufficiently clear reasons by way of steps in the argument, and to refer to the evidence upon which they rely, in order to arrive at such a conclusion, with a sufficient degree of clarity, to enable the Applicant, who will be getting a nil award in such a situation, to understand why in those circumstances he has lost his case.

For the reasons which we have stated we have reached the conclusion that the appeal must be allowed on the question of remedy; on the question of compensation. We have not found it at all necessary to go into how wide or how narrow the pool of selection should be, that must be a matter for evidence which will have to be presented to the Industrial Tribunal when the matter is remitted to them. We have of course had to consider carefully whether there is any risk that the Industrial Tribunal will find a difficulty in the fact that they have already concluded that the result would have been the same (in our judgement wrongly for the reasons we have stated). In our judgement, there will in reality be no such difficulty, because it will be a fresh hearing before the same Tribunal on the matter of compensation. Both sides will be enabled to present their case on this issue before the same Industrial Tribunal. The starting point for that issue must be the findings of fact, which we do not in any way disturb, which the Industrial Tribunal has itself made, in relation to the way the redundancy procedure should have been carried out. It will then be for the Industrial Tribunal to hear evidence on both sides as to the persons who were or were not on a level with Mr Clark; who should or should not have been considered for selection; to whom consideration should or should not have been given of their various positions; and as to whether consultation should have been taken with them or not. All those matters remain open for the Industrial Tribunal to decide in the light of the way in which the Industrial Tribunal itself has already defined the pool.

There can be no question in our judgement of the Appellant being enabled to develop any argument based on Section 59 or on the basis of Section 57(3) with regard to trying to persuade the Tribunal that there should be a yet wider pool of selection or anything of that kind. The whole starting point for the remission back to the Industrial Tribunal must be predicated on their own findings of what the selection pool should be. We make that position as clear as we can. Accordingly, in our judgement, the appeal should be allowed and the matter should be remitted to the same Tribunal, in order that they should reconsider the matter of compensation, including of course the application of the Polkey principle, in the light of such evidence as either side choose to place in front of them, when the matter is re-heard.