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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Narang v Public Health Laboratory Service Body [1996] UKEAT 1164_95_1907 (19 July 1996)
URL: http://www.bailii.org/uk/cases/UKEAT/1996/1164_95_1907.html
Cite as: [1996] UKEAT 1164_95_1907
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EAT/550/96
At the Tribunal
Judgment delivered on 3rd October 1996
THE HONOURABLE MR JUSTICE MUMMERY (P)
MISS A MADDOCKS OBE
MR R N STRAKER
JUDGMENT
Revised
APPEARANCES
For the Appellant MR R ALLEN QC
Messrs Ward Hadaway
Solicitors
Alliance House
Hood Street
Newcastle upon Tyne
NE1 6LJ
For the Respondents MR D BEAN
(of Counsel)
Messrs Clifford Chance
Solicitors
200 Aldersgate Street
LONDON EC1A 4JJ
MR JUSTICE MUMMERY (PRESIDENT):
There are two appeals:-
(1) An appeal (the Main Appeal) against the unanimous decision of the Industrial Tribunal, held at Newcastle upon Tyne over a period of 10 days on various dates in June, July and August 1995, that Dr Harash Narang was not unfairly dismissed by the Respondent employer, the Public Health Laboratory Service Board (PHLS). Extended Reasons, running to 27 pages, were sent to the parties on 13th September 1995. Dr Narang served a Notice of Appeal on 2nd October 1995. At a preliminary hearing on 21st February 1996 Directions were given for the appeal to proceed to a full hearing on points (b), (c) and (d) of the grounds of appeal under paragraph 5. in the Notice of Appeal.
(2) The preliminary hearing of an appeal (the Review Appeal) by Dr Narang, this time against a decision of the Chairman of the Industrial Tribunal in a letter dated 9th May 1996 refusing to grant an application made on 24th April 1996 (out of time) for a review of the earlier decision. Dr Narang served an appeal on 29th May 1996. At the hearing of the appeal counsel for both parties agreed (and the Appeal Tribunal concurred) that the preliminary hearing should be treated as the full appeal in order to save the time and expense of a possible further hearing, which would take place if the appeal were allowed to proceed to a full hearing.
Findings of Fact
We only set out those findings of fact that are necessary to determine these appeals. Some of the issues, which involved consideration of detailed oral evidence and voluminous documents, are not relevant to the appeal. For the purposes of the Main Appeal, it is accepted by Mr Robin Allen QC, on behalf of Dr Narang, that redundancy was the reason for his dismissal. It is therefore unnecessary to rehearse all the facts about all the disciplinary proceedings and the conduct of Dr Narang which gave rise to them. It is also accepted on behalf of Dr Narang that he was consulted about his redundancy from August 1994 onwards. The appeal is principally concerned with one point: that the process of warning and consultation on redundancy ought to have started earlier than it did and that, as it did not start sooner than it did, it was perverse of the Industrial Tribunal to decide that the dismissal on redundancy grounds was fair.
The relevant facts may be conveniently summarised as follows:-
(1) The PHLS is a government body with responsibility in all matters potentially affecting the health of the nation. It operates from a number of laboratories in different parts of the country, including Newcastle.
(2) In 1977 Dr Narang joined PHLS in Newcastle. In 1982 he was appointed a Principal Microbiologist, with responsibilities for research and development in diagnostic biology and for continuing research on viruses associated with gastro enteritis and encephalitis. In 1984 he was promoted to a top grade microbiologist (Grade C) and held that position until the termination of his employment with effect from 11th November 1994.
(3) In 1991 disciplinary proceedings were taken against Dr Narang. A prohibition notice was issued on 25th April 1991 and, following a disciplinary interview on 2nd July 1991, he was given a final written warning on 4th November 1991.
(4) There were further disciplinary proceedings against Dr Narang in mid-1992. After a hearing on 22nd December 1992, findings of fact were made and it was concluded that Dr Narang's conduct was such that "...it would, in ordinary circumstances, warrant dismissal." The position was explained to Dr Narang in a letter dated 13th August 1993 from the Deputy Director of PHLS, Dr Mary Cooke. The letter informed Dr Narang that the Disciplinary Committee would refrain from recommending the termination of his employment and would instead issue to him a final written warning in the terms of the attached letter. If the proposals thereafter set out were not accepted within due time or proved impossible to implement, it would be necessary for the Committee to reconsider its preliminary decision as to the way in which matters were to be resolved. The proposal was that Dr Narang would be released from his PHLS duties for the time being, enabling him to devote himself to assisting Professor Oxford at the London Hospital in relation to the grant which had been provided jointly by MAFF and AFRC to validate his work on single-stranded DNA. The duration of that project was at that time unclear, though it was not expected to exceed a year. The letter added -
"...Accordingly, it will be necessary to review your position at the end of this period".
It was pointed out that, in addition to assisting Professor Oxford, he would be free at the same time to pursue his research, subject to his keeping the PHLS informed of his activities. During the period when he was assisting Professor Oxford and otherwise engaged in research, he would not be required, and therefore would not attend, at the PHLS laboratory in Newcastle. The attached warning letter, also dated 13th August 1993, specified the matters in relation to which warning was given and made it clear that recurrence of the problems identified would result in further disciplinary action,
"...which may in turn lead to your dismissal".
(5) Dr Narang was informed of his right of appeal, which he exercised by letter of 23rd August 1993. The appeal was never in fact heard or disposed of before his dismissal in November 1994. It was withdrawn after he was dismissed.
(6) As was made clear in a later letter of 14th September 1993 Dr Narang remained, under the arrangements whereby he assisted Professor Oxford's research, an employee of the PHLS. The research was likely to continue for some time and was of somewhat uncertain duration. His duties at the end of this period would be the subject of review and consultation with him in the light of the then prevailing circumstances including, in particular, his then research interests and opportunities. According to the letter sent in reply by Dr Narang's solicitors (Ward Hadaway) on 22nd September 1993 Dr Narang was interested in continuing his research with Professor Oxford "...as is demonstrated by the fact that he has already commenced work". It was made clear that Dr Narang did not accept the disciplinary findings and confirmation was sought (but not obtained) that Dr Cooke's suggestion was that Dr Narang should work with Professor Oxford, whether or not Dr Narang pursued an appeal.
(7) Dr Narang never in fact returned to work at the PHLS laboratory in Newcastle. In August, September, October and early November 1994 there were meetings with Dr Narang about his redundancy. The upshot was that his contract of employment was terminated on grounds of redundancy with effect from 14th November 1994.
(8) On 8th February 1995 Dr Narang presented an Originating Application to the Industrial Tribunal claiming that he had been unfairly dismissed from his position as a clinical virologist on 11th November 1994. He alleged that the PHLS maintained that the requirement for a scientist of his seniority at the PHLS in Newcastle no longer existed. He disputed that. He asserted that the PHLS had as much need then for senior scientists as had ever been the case. He alleged that, if and to the extent that the requirements of the PHLS in Newcastle for a scientist had reduced, that was a consequence of his compulsory secondment to London following internal disciplinary proceedings and the subsequent appeals, which were conducted in breach of his contract of employment, of the PHLS disciplinary procedures and of the principles of natural justice. The reduction in requirement for a senior scientist was directly caused by his unfair treatment. The PHLS acted unreasonably in treating that as a sufficient reason for dismissal. He maintained that his position at Newcastle and his job responsibilities had not diminished, but had been allocated to less senior personnel. He specifically complained that he was never consulted as to whether he was prepared to take a less senior position at reduced remuneration. Finally, he alleged that the motivation of PHLS in seeking his dismissal was not a concern about redundancy. It was a final step in the process of victimisation which prevented him from carrying out his researches into BSE ("Mad cow disease") in an area which was considered by PHLS to be highly politically sensitive.
(8) In their Notice of Appearance the PHLS admitted that Dr Narang was dismissed and asserted that the reason for his dismissal was redundancy. Their case was that Dr Narang's work at the London Hospital effectively concluded at the end of August 1994 and that there was a meeting with Dr Narang on 19th August to review the question of his future employment. It was alleged that Dr Narang's period of absence from the PHLS in Newcastle had coincided with the reduction in workload of the Newcastle PHLS, with diminishing income, reductions in central funding, substantial equipment and staff rationalisation, and the appointment of a consultant microbiologist to co-ordinate the planning of research and development. Dr Narang was made redundant after consultation had taken place.
The Decision of the Industrial Tribunal
The Tribunal rejected Dr Narang's claim for unfair dismissal for the following reasons:-
(1) The reason for Dr Narang's dismissal was redundancy (paragraph 38). The Tribunal rejected Dr Narang's case that redundancy was a device to obviate his appeal against his final written warning or that he was a victim of a conspiracy targeted by PHLS. There is no appeal against this finding.
(2) Applying S.57(3) of the 1978 Act, the Industrial Tribunal found that the PHLS had acted reasonably and the decision to dismiss him was reasonable. They had acted fairly and reasonably in the decision to select him as the person to be made redundant from the Newcastle PHLS (paragraphs 47 and 48).
(3) On the question of consultation the Industrial Tribunal said (paragraph 40) -
"...Generally a reasonable employer would be expected to consult fully in relation to the redundancies and adopt a selection process that was fair and reasonable and fairly applied. ...an employer will not normally act reasonably unless he warns and consults any employees affected."
Mr Robin Allen QC accepted that this was a correct self direction on the law.
(4) On the issue of consultation the Tribunal concluded (paragraph 45) that -
"...Looked at in the round we consider the respondent acted reasonably in respect of its warning and consultation with the applicant on his Grade C post being potentially redundant."
(5) The Tribunal rejected the submission on behalf of Dr Narang that consultation should have started earlier than it did. In particular, they rejected the contention that there was a requirement on PHLS to consult with the staff in general at Newcastle or with Dr Narang in particular on a review on the future research work at Newcastle made by Dr Freeman (para 42) or on a Strategic Review undertaken by Headquarters management (para 44).
Submissions of Dr Narang on the Main Appeal
Mr Allen QC made the following submissions on behalf of Dr Narang in support of his appeal against the decision that he was fairly dismissed. The submissions were based on three grounds of appeal in paragraph 5 ((b), (c) and (d)) of the Notice of Appeal, set out as follows:-
(1) The PHLS failed properly to warn Dr Narang of the possibility of redundancy when, by late 1993, it decided that it was necessary to achieve savings of 2% and had considered that dismissal of Dr Narang would secure the necessary saving. Dr Narang was not informed that he might be made redundant until August 1994.
(2) The Industrial Tribunal failed to give the necessary importance to the procedural requirement of early warning of redundancy and consultation, in concluding that there was no requirement for the PHLS to consult in relation to Dr Freeman's report.
(3) The PHLS failed to inform Dr Narang of the Strategic Review and failed to consult with him in relation to its consideration, notwithstanding the fact that it was specifically concerned with his line of research.
Mr Allen QC developed the grounds of appeal in detail. We are grateful to him for his assistance in making clear all the points that could reasonably be made on Dr Narang's behalf.
In summary, his submissions were as follows:-
(1) The PHLS accepted that there was a redundancy situation and that Dr Narang had been redundant for several years. Redundancy only became necessary "..when the cuts bit". In those circumstances Dr Narang should have been warned of the fact at the earliest possible moment or, at the latest, as soon as the cuts were announced.
(2) The Industrial Tribunal took the wrong approach in law to the question of warning and consultation. Good employment practice required that consultation should have taken place as soon as possible and that there should have been provided adequate information upon which to consult. Reliance was placed on the decision of the Employment Appeal Tribunal in Dyke v. Hereford and Worcester County Council [1989] ICR 800 at 806F - 807A. In that judgment the Tribunal identified four phases of redundancy:
"...First, the consideration of the overall necessity for redundancies; secondly, the issuing of the S.99 notice; thirdly, the selection of individuals whom it is proposed to dismiss for redundancy; fourthly the actual issue of the dismissal notice, action taken on the decisions earlier reached, and lastly, the period of notice before the employment is terminated."
The Tribunal added that -
"...at each of the four stages it is important that consultation should take place either with a trade union and with the employees individually or with both, and the importance of such consultation cannot be over-emphasised. Such consultation must necessarily be based upon sufficient information for them to be sensible."
(3) Dr Narang was given no information at the first stage about the necessity for redundancy. He was not told about the possibility of his redundancy until the stage at which his job had been selected for redundancy on 19th August 1994 (ie the third or fourth phase described in the judgment in Dyke). It was submitted that this was completely contrary to all appropriate standards of good industrial practice and, indeed, the documents demonstrated that it was contrary to the practice that the PHLS had themselves adopted for their staff. Consultation could, and should, have taken place much earlier.
(4) The Industrial Tribunal wholly failed to deal properly with the consultation point. They reached a conclusion which was demonstrably perverse and disregarded relevant uncontradicted evidence.
(5) Mr Allen QC reminded us of the grounds on which this Tribunal may intervene in the decision of an Industrial Tribunal where there has been perversity. He cited East Berkshire Health Authority v. Matadeen [1992] ICR 723 at 737 - 738 and emphasised that this Tribunal has power to interfere in the decision of an Industrial Tribunal
"If the members are completely satisfied in the light of their own experience and of the sound practice in the industrial field that the decision is "not a permissible option"."
(6) On the detailed aspects of the case Mr Allen developed this argument further. Phase 1 started in December 1993. That was when the PHLS were confronted with a decision from the Department of Health to reduce central funding for the year 1994/95 and the two subsequent years by 2% per annum. The Tribunal recognised that it was inevitable that this would impact on staff levels. There was at that time a "potential redundancy situation". Briefing materials were sent to local PHLS laboratories in December 1993 as background to discussions with staff. The purpose of the briefing materials was to warn staff of the possibility of redundancies, to require detailed plans for each laboratory to be developed straight away, to inform staff that a strategic review of all PHLS operations was to take place and that PHLS would actively seek their views and to inform staff that the strategic review would go out for consultation with the staff in about July. PHLS realised that there was a redundancy situation upon them, as evidenced by the fact that they began to contact outside firms to tell them that they had a redundancy situation. They did not, however, tell Dr Narang. The position of Dr Narang was considered but he was not alerted to those considerations. Mr Allen QC referred to the Strategic Review, which considered specifically the work on which Dr Narang was involved. But Dr Narang was not consulted on that review. The Review was significant, because the Tribunal found that it was the review of the operations of the Newcastle laboratory by Dr Freeman that principally raised the question regarding the need for Dr Narang's position. The Review was completed by 17th March 1994. The Review excluded consideration of the virological research and development, because Dr Narang was seconded and not available for deployment in the research and development plan. Dr Narang was not informed by the PHLS of the plan or that he was not being considered because of his absence.
(7) The Industrial Tribunal were aware that the issue on the timing of consultation was before them but, although they gave themselves a correct self-direction as to the law, they came to perverse conclusions on key points. They found that it had occurred to Dr Lightfoot, who took the decision to dismiss shortly after the dictate of the costs savings early in 1994, that the savings for his laboratory could come from Dr Narang's post. They went on to conclude, however, that any consultation process entered into by management with the Newcastle staff on the topic of redundancy at that time would have been premature and, indeed, would have had a demotivating effect, as no firm proposals had been made. They also concluded that there was no requirement to consult on Dr Freeman's Review with staff in general or with Dr Narang in particular. They rejected the argument that management should have consulted on the strategic review as "unrealistic and putting far too high a responsibility on the respondent".
(8) Mr Allen QC criticised these conclusions as perverse. He said that "the staff morale" argument did not address, or was inconsistent with, the fact that the PHLS said that there should be consultation in December 1993. The PHLS were notifying outside agencies in March 1994 of the redundancy situation. The PHLS never argued that staff morale would suffer if there was early warning and consultation in respect of this round of redundancy. In any event, it is recognised that only in exceptional circumstances does impact on staff morale justify withholding consultation and delaying warning: see Clarkson International Tools Ltd v. Short [1973] ICR 191 at 195A (a case where no warning at all was given and where there was no prior consultation).
(9) Further, the Tribunal's holding on the Strategic Review is contrary to the expressed purpose and format of the Review. There was no explanation for not allowing Dr Narang have some input into this. The essential feature of the Strategic Review was to seek the views of the service. The fact that Dr Narang was out of sight while he was with Professor Oxford may explain why he was not consulted, but did not provide an excuse for failing to consult with him. The Tribunal's conclusions as to the research and development plan were inconsistent with the fact that a plan of that kind could only have been carried out with discussion and consultation with the persons involved.
In conclusion, this was a case where the Tribunal's decision was contrary to logic and the accepted standards of industrial relations. No sensible person, who had applied his mind to question of consultation and warning and with the necessary experience, would have concluded that Dr Narang's dismissal on grounds of redundancy was fair.
Conclusion on the Main Appeal
We have considered carefully the detailed submissions made by Mr Allen QC, but we are unable to agree with him that the decision of the Industrial Tribunal was perverse on any of the three grounds raised by him in the Notice of Appeal. In our judgment, there was no misdirection in law by the Tribunal on the question of consultation. The Tribunal were not perverse in their conclusions in any of the respects relied on in paragraphs 5(b), (c) and (d) of the Notice of Appeal. We accept the arguments of Mr Bean on behalf of the PHLS. The legal position is briefly this:-
(1) Timing of consultation
There is no perversity or legal error in paragraph 42 of the Extended Reasons. Consultation with an individual employee about redundancy only becomes an obligation where there is a proposal, or provisional decision, to make him redundant. That stage had not been reached until the Summer of 1994. Thereafter there was extensive consultation with him between August and November 1994 when his employment was terminated. The position was that, when Dr Narang left the PHLS to work with Professor Oxford in London, it was made clear that, at the end of the period of that work, his duties would be the subject of review and consultation in the light of the prevailing circumstances. That is what happened when his work with Professor Oxford finished in the Summer of 1994. As to the argument advanced on behalf of Dr Narang that, by early 1994, Dr Lightfoot had considered Dr Narang's dismissal as a way of making the necessary savings, the Tribunal had found as a fact, on Dr Lightfoot's evidence (para 42), that it had occurred to him shortly after the dictate on costs savings that the necessary saving could come from Dr Narang's post. In paragraph 42 of the Extended Reasons the Tribunal made a clear finding that at that stage (early 1994) it was merely a thought in Dr Lightfoot's mind. Nothing had been decided in any structured way about the staffing levels at the Newcastle laboratory. In those circumstances we agree with Mr Bean that the Industrial Tribunal were entitled to find that any consultation process entered into by management with Newcastle staff early in 1994 would have been premature.
(2) No consultation in relation to Dr Freeman's Report
The Tribunal found in paragraph 42 of the Extended Reasons that Dr Freeman's Review was "a research projection document and not a document calculated to deal with redundancy situations".
In paragraph 35 of the Extended Reasons the Tribunal found as a fact that Dr Freeman was not aware, at the time when he compiled that document, of the 2% cut requirement. He had only joined PHLS in January 1994, after the cuts decision had been made. In those circumstances the Tribunal were entitled to conclude that there was no obligation on PHLS to consult with Dr Narang on the contents of Dr Freeman's Review.
(3) No consultation on PHLS Strategic Review
The Strategic Review was a 145 page document. It was published in September 1994. It covered a wide range of topics, including one paragraph on spongiform encephalopathies. The PHLS had 3,000 employees. There was no error of law in the Tribunal in holding that there was no requirement for individual consultation on the Strategic Review prior to its publication. They were entitled to conclude that the Strategic Review was "solely for management" (paragraph 44 of the Extended Reasons).
The Review Appeal
The Chairman of the Industrial Tribunal (Mr J R Hardwick) refused an application for Review of the decision that Dr Narang was fairly dismissed. The ground of appeal is that the Chairman failed to exercise his discretion judicially. The basis of the application for review was this. The PHLS were put to proof of the reason for Dr Narang's dismissal. The PHLS asserted that redundancy was the reason for Dr Narang's dismissal. The Tribunal found that that was the case in their decision promulgated on 13th September 1995. New evidence had subsequently come to light in the form of evidence given by the Secretary of State for Health (The Rt Hon Stephen Dorrell MP) on 27th March 1996 to the Agriculture and Health Committee of the House of Commons. It appeared from a transcript of that evidence (stated to be uncorrected, unpublished and not available for public use) that Mr Dorrell informed the Committee that the reason why Dr Narang's employment with the PHLS had been brought to an end was that he was conducting a private research effort and not a conducting himself as an employee of the PHLS in accordance with his contract of employment. That was contrary to the assertion before the Industrial Tribunal that Dr Narang was made redundant. That assertion by the Minister responsible for overseeing the policy of the PHLS was directly contrary to the case successfully advanced by the PHLS in the Industrial Tribunal. In the light of that statement a review should have been granted out of time, because fresh evidence had come to light which did not exist at the date of the Industrial Tribunal hearing. At the earliest opportunity after that evidence became available, Dr Narang's solicitors had written to the Industrial Tribunal seeking a review. In refusing the review the Chairman had given a legally incorrect reason. The only reason which he gave for refusing the application was that it had been presented "considerably beyond the prescribed time limit". Mr Allen QC submitted that the Chairman, in giving that reason and refusing a review, had disregarded the fact that Dr Narang had only become aware of Mr Dorrell's comments at the time of the application for review. He could not possibly have brought the application at an earlier stage. The Chairman had disregarded a crucial relevant factor in arriving at his decision.
In those circumstances, Mr Allen QC submitted that the application passed the test for a review on the ground of fresh evidence and relied on the decision in Wileman v. Minilec Engineering Ltd [1988] ICR 318. Mr Allen emphasised that it was impossible for the application to be made at any earlier stage before Mr Dorrell had made his statement to the Committee. Accordingly, it could not be legally right to hold, as the Chairman held, that being out of time was a ground for refusing the review application.
This appeal has been overtaken by events. There is now available to this Tribunal the printed version of the evidence given to the Agriculture and Health Committee, as ordered by the House of Commons to be printed, and Mr Dorrell's statement to the Committee on 27th March now contains a "Note by Witness" to the following effect -
"In fact, contrary to reports in the media, Dr Narang was made redundant. In addition he was conducting a private research effort and not conducting himself as an employee of the PHLS in accordance with his contract of employment."
It appears from that printed statement of the evidence that there is not, therefore, any contradiction between the Minister's statement and the case advanced to the Tribunal by the PHLS. The answer in its final form was not before the Chairman of the Industrial Tribunal but, if it had been, it would have constituted a complete answer to the application for review. In those circumstances no practical purpose would be served in seeking to disturb the decision given by the Chairman refusing a review. The basis on which the application was made has fallen away and, in our view, the review application could not possibly succeed, even if it were renewed on a remission of the review application by this Tribunal to the Chairman of the Industrial Tribunal.
For all those reasons both the Review Appeal and the Main Appeal are dismissed.