United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR W J DIAMOND (Representative) Peninsula Business Services Ltd 361-365 Chapel Street Manchester M3 5JY
For the Respondents	MR P HYLTON (Representative) Direct Legal Six Ways House 15 Sutton New Road Erdington Birmingham B23 6TJ


 


MR JUSTICE LINDSAY: We have before us the full hearing of an appeal by British Flowplant Group Ltd, which was the Respondent employer below, in a matter where, below, the Applicants had been Mr T.A. Law, Mr D.A. Harrison and Mr P. Muckalt. There have been here two decisions of the Industrial Tribunal. First of all, there was a hearing on 18 July and 21 September 1995 and that led to a decision which was promulgated on 21 March 1996 and that decision, which we can call the liability decision, following the liability hearing, led to this conclusion, namely:

"The unanimous decision of the Tribunal is that the applicants were unfairly dismissed. The hearing of the remedy is adjourned to Monday 24 June 1996. The claims for overtime to be included in the redundancy payment received and for payment in lieu of notice are dismissed."

So that the liability hearing went, to some extent, into issues other than simply liability in the sense that the overtime claim and lieu of notice was dealt with. That was the liability hearing.

Then, on 24 June 1996 there was the remedy or compensation hearing and the decision was promulgated on 3 September and the unanimous decision was this:

"The unanimous decision of the Tribunal was to order the respondents to pay the following compensation:-

a. To Mr Harrison the sum of £ 760.64

b. To Mr Law the sum of £ 1140.00

c. To Mr Muckalt the sum of £11300.00."

There was then a Notice of Appeal and the Notice of Appeal, so far as we are concerned, says:

"The Appellant appeals from the decision of the Industrial Tribunal at Manchester on 24th June 1996 (written reasons 3rd September 1996) .."

And then it gives the case numbers and it argues that the Tribunal erred on some questions of law. It is obvious from that that it is only the decision of 3 September 1996 that is under appeal today and, indeed, there had been an earlier Notice of Appeal against the liability hearing and a preliminary hearing came before the Employment Appeals Tribunal before Mr Justice Keene on 12 March 1997 and, so far as concerns the liability hearing, the appeal was dismissed and so we emphasise that all that is before us is an appeal against the remedy or compensation decision and it is important to bear that in mind.

It is necessary, even so, to give something of the background which is derived from the earlier decision, the liability decision. The employees, Mr Law, Mr Harrison and Mr Muckalt, worked at Whitworth. Their job is explained on page 8 of our bundle as follows:

"The respondent is a division of British Fittings Group plc and manufactures hires and sells high pressure water jetting equipment. The company headquarters are in Birmingham and the manufacturing unit is in Salisbury. The hiring side of the business was handled at various sites in the United Kingdom. The applicants were employed at the Whitworth depot Mr Muckalt as a Store Manager, Mr Law as a Stores Buyer and Mr Harrison as a Storeman."

The employer decided to close down the Whitworth branch and, as to that, the Industrial Tribunal held this:

"Due to trading difficulties, the respondents board took a decision to move the majority of the operation carried on at the Whitworth depot to Birmingham [Whitworth, we are told, is near Rochdale, so some distance is involved in the move]. There was no evidence as to when this decision was taken or as to whether the transfer was urgent but the Managers knew four weeks before the decision was announced to the staff."

The closure, it seems, in the event was to occur round about 7 March 1995 and, as to that, the Industrial Tribunal at the liability hearing concluded this:

"The staff in Stores and Purchasing were told that they were being given notice of redundancy. Those with more than two years' service were being given first refusal of vacancies in Birmingham. They were told that they should give this consideration over the weekend so that it could be discussed at the individual meetings, which were arranged for Monday, 27 February. They were told that if they did not wish to entertain a job in Birmingham they would be told their redundancy package on Monday, 27 February. The Stores and Purchasing staff were told that the move of the stores to Birmingham was to start on the afternoon of Monday 27th at 3.30 pm and that it was estimated that the job would be completed by Tuesday 7 March 1995."

So far as concerns employment in Birmingham that was mentioned to the three Applicants but declined and, as to that, the Industrial Tribunal said this:

"On 27 February the applicants had individual meetings with Mr Edwards and Mr Chaloner. They were asked if they were interested in vacancies at Birmingham and they indicated that they were not. They were not given any details of prospective vacancies at Birmingham. Mr Muckalt was told they would like him to leave on the Friday, his package was read out to him and he was handed a letter of dismissal. Mr Harrison left on Thursday of that week, there being no discussion after the meeting on the Monday. Mr Law was asked at the Monday meeting if he would go to Birmingham, but turned the offer down because of the short time he had had to consider it, he was handed his letter of dismissal and left on 3 March. There was no consideration in the interim and no offer of alternative employment."

And it was on that basis that the Industrial Tribunal at the liability hearing said:

"We are satisfied that there was a redundancy situation, a potentially fair reason for dismissal. We do not however, think that the respondent acted reasonably. The respondent must have known considerably before the end of February that it was going to close the depot. Indeed, the evidence is that the Managers knew that it was closing four weeks beforehand and the company had clearly had discussions with the insurers. There was no proper consultations within the guidance given to us by the EAT in Rowell v Hubbard (supra). The respondent did not consult at the earliest possible time i.e when the proposals were at a formative stage. There was no adequate information about the jobs available in Birmingham, the applicants did not have adequate time in which to consider in principle whether they wished to go to Birmingham, and the fact that redundancy letters were handed to the applicants at the individual meetings on the 27 February 1995 suggests to us that the respondents' representatives went into those meetings with no intention to consider any representations which the applicants might make."

So the position was that there was an unfair dismissal, but the Industrial Tribunal went beyond saying simply yea or nay to unfair dismissal and they concluded also that the claim for overtime to be included in the calculation of the redundancy payment made and the payment in lieu of notice was rejected, as there was no evidence that overtime was obligatory. But, more importantly for immediate purposes, and going again simply beyond the issue of yea or nay to unfair dismissal, they said this:

"The Tribunal is not convinced that consultations would have made no difference - there is no possible way that the Tribunal can know what the outcome would have been if there had been proper consultation. While there was a potentially fair reason for dismissal, the Tribunal are satisfied that the respondent acted unreasonably and the applicants were unfairly dismissed."

That then was the position at the liabilities hearing and that is the decision that was promulgated on 21 March 1996. But then one moves on to the remedy hearing or the compensation hearing on 24 June and, in the decision and extended reasons, which are brief, there is no express mention at all of a consideration of what the situation would have been if only there had been proper consultation. This point might be called the "Polkey" point by reference to Polkey v A E Dayton Services Ltd [1988] ICR 142 and, in particular, looking to page 163 where Lord Bridge of Harwich, with approval, cites a passage from the judgment of Mr Justice Browne-Wilkinson (as he then was) in a case called Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91, where Mr Justice Browne-Wilkinson said this:

"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 here have the Chairman's Notes which cover argument and evidence and it is quite plain that from the outset of the hearing on 24 June, the compensation hearing, it was drawn to the Industrial Tribunal's notice that "Polkey" was in play. The employers would argue either that there should be no compensation or that it should be severely limited due to Polkey. That is what the Chairman's Notes say. Equally, the Respondent employer had referred to Polkey below. It is plain from the note of the representation by Ms Jefferson that she was saying that the Polkey matter had been raised during the representations at the liability hearing and it is also clear that the employees' representative argued that the Polkey question was res judicata. The Note says "Polkey - res judicata" and a little later "In a sense Polkey has already been applied".

Let us then go back to precisely what the Polkey decision might be said to have been at the earlier liability hearing:

"The Tribunal is not convinced that consultations would have made no difference - there is no possible way that the Tribunal can know what the outcome would have been if there had been proper consultation."

So Polkey had, indeed, been dealt with at the first hearing and the Industrial Tribunal had not been convinced that consultation would have made no difference. "Convinced" is perhaps, too strong a word properly there to have been used. One might have thought that a balance of probability was the proper test and that conviction was putting it too high but it is not open to the employer to take that point here because that would be an appeal against the liability issue and that, as we have already indicated, has already been declined. One can see force in a suggestion that res judicata was available to the adviser for Mr Law, Mr Harrison and Mr Muckalt and moreover, that the res or the matter that had been judicata or had been adjudged was that there was no possible way that the Tribunal could know what the outcome would have been, if there had been proper consultation.

As we mentioned earlier, the compensation decision makes no mention of Polkey at all, or any reduction or any percentage. Why was that? Well, a number of possibilities arise. It could be that either wilfully or neglectfully they totally omit the point and, as Mr Diamond in his very helpful and economical address makes clear, that would be an error of law in either case. But, unless there are equally probable or more probable possibilities, one should not leap to the conclusion that there was here error of law. What then? Of the other possibilities, a second possibility is that the Industrial Tribunal at the compensation hearing did regard Polkey as res judicata and as a matter that could not properly be reopened or further pursued at the second hearing. That is a possibility but, if that had been the case then, given that Polkey was mentioned in the opening at the compensation hearing and in the course of argument of the compensation hearing and that evidence relative to Polkey was referred to at the compensation hearing, one would have expected the Tribunal to have not allowed that to happen. If they were going to say the subject was res judicata, they really could not properly have entertained argument and, in particular, evidence on a subject as to which they were barred from further hearing.

So that possibility, although logically a possibility, seems to us inherently improbable but a third possibility is this, that, given the shape of the argument and the evidence at the remedy hearing the Industrial Tribunal, at its end, nonetheless still felt unable to ascribe any particular percentage to what was appropriate by way of reduction of what would otherwise have been the Applicants' award. In other words, that the Industrial Tribunal, at the end of the remedy hearing, remained in that state of uninformation that they had been in at the earlier liability hearing. This is a difficult area for evidence. It is difficult enough, very often, to adduce evidence of plain fact. Here one was having to deal with hypothesis - what would have been the case if only consultation had been fuller? - and plainly a whole host of possibilities exist. Could it be that Mr Law, Mr Harrison and Mr Muckalt would have persuaded the employer not to close down quite so quickly, thereby prolonging their employment at Whitworth? It might seem unlikely but who is to know what the facts would have been. Could it be that Mr Law, Mr Harrison and Mr Muckalt would successfully have persuaded British Flowplant Group Ltd or, perhaps, some other company in some group, that more jobs should be made available at Birmingham than was initially thought to be the case, itself a matter as to which there was dispute. Could it be that consultation would have drawn to the attention of Mr Law, Harrison or Mr Muckalt and, if so, which of them, the attractions of the job in Birmingham which otherwise they were minded not to accept. There are a whole host (and I do not suppose for a moment that is exhaustive of possibilities) of things that might, perhaps, have been investigated and been the subject of evidence, although one has to appreciate it would have been evidence of hypothetical situations.

It cannot be said that an Industrial Tribunal is invariably obliged to find a reduction expressible in percentage terms. It is essentially a matter best left to the practical view of the Industrial Tribunal that hears the matter, in the light of the evidence and the argument which it then hears. Without expressing ourselves in technical terms of onus of proof or of shifting onuses of proof, it is plainly in the interest of the employer in this particular case and cases like it to bring forward the best evidence he can of what full consultation might or might not have achieved so as to achieve the greatest percentage reduction and although we do not see it necessary to express ourselves in terms of onus of proof there is a case called Britool v Roberts [1993] IRLR 481 which does cast the burden on the employer.

But the position here was that at the compensation hearing the Appellants before us, British Flowplant Group Ltd, called no evidence. The only evidence was that of Mr Law, Mr Harrison and Mr Muckalt. They were cross-examined and the cross-examination included the likelihood or not of them accepting a job with the employer in Birmingham, so that was a Polkey consideration that was raised at the compensation hearing. But there does not seem to have been, so far as one can tell from the Chairman's Notes, a cross-examination on whether, for example, consultation might have delayed closure or whether it might have increased the jobs on offer in Birmingham, or whether it might have increased the likelihood of a job in Birmingham being accepted by one or other and, if so, which of the particular Applicants.

There is no sight in the Chairman's Notes of percentages being spoken of and it is in percentages in which the Polkey argument is usually expressed.

It seems to us therefore, looking at the evidence and the notes of argument as they are recorded, that this third possibility is the most likely of the possibilities which we have mentioned, namely that given the shape of the argument and the evidence, as it was presented at the remedy hearing, the Industrial Tribunal, as the industrial jury, still at the end of the day felt unable to ascribe any particular percentage reduction to any particular Applicant's case. It was left in that situation which it had been in at the liability hearing that there is "no possible way that the Tribunal can know what the outcome would have been, if there had been proper consultation". The Industrial Tribunal, in other words, was left in doubt. Even before us today there is still no clear consequence that could be said to have followed if only there had been proper consultation. Can it be said that in that circumstance, there is an error of law manifest in the decision of the hearing of 24 June 1996? Mr Diamond quite properly draws attention to the sort of approach that is illustrated by cases like Meek v City of Birmingham District Council [1987] IRLR 250. A party should know, as he wins or loses, why he has won or why he has lost. But it seems to us that the force of that criticism, although there is some weight here to be attached to it, is weaker than normal because there had been a clear enough conclusion at the liabilities hearing. The need to re-express the same conclusion is rather less than is the case where there has been no prior conclusion. We do not feel able to give such weight to the failure to give reasons at the second hearing that we would have been able to give had there been no clear conclusion at the first hearing.

All in all, and having regard to what we have analysed as being the most likely of the possibilities to explain the absence of reasons for dealing with Polkey expressly in the compensation hearing, we see no error of law in the compensation hearing. It would plainly have been desirable had Polkey been dealt with more fully, but, given the earlier conclusion, we feel that it was not necessary to spell out a second time that the Industrial Tribunal had still, even at the conclusion of the second hearing, been left with no adequate reasons for plucking a particular percentage or any percentage out of the air as a reduction on Polkey principles.

We see, in other words, no error of law sufficient to allow us to permit the appeal and accordingly, we dismiss the appeal.