United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR T R NAYLOR (Personnel Adviser) Personnel Advisory Services 49 Warrington Road Cuddington Cheshire CW8 2LN


 


JUDGE PETER CLARK: This is an appeal by the respondent employer before the Leeds Industrial Tribunal on 21st July 1997, against that tribunal's decision to award full compensation to three former employees, Messrs Mangham, Haldenby and Shotter, following a finding that each had been unfairly dismissed by reason of redundancy. Extended reasons for that decision are dated 18th August 1997.

As to the unfairness of the dismissals, the tribunal found that there had been a total lack of consultation with the applicants prior to dismissal; that no proper evidence had been led by the respondents to explain why, in the cases of Shotter and Mangham, they had performed least well in the scoring matrix designed to aid selection for redundancy, and that in each case no steps had been taken to find them alternative employment within the group of companies to which the respondents belonged.

The first point taken in the appeal is that the respondents were not allowed to present a "Polkey defence" before the tribunal adjourned to consider its decision on both liability and remedies. However, the argument was entertained after full awards of compensation had been made. It is dealt with in paragraphs 26 and 27 of the tribunal's reasons. Whilst that procedure is not entirely satisfactory, it seems to us that the tribunal did consider the point and we must look at the way in which it approached the question.

The Polkey deduction arises in circumstances first identified by Browne-Wilkinson J in Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91, 97. Where an employee is dismissed, particularly by reason of redundancy, it is open to an Industrial Tribunal to consider whether, if the employer had adopted a proper approach, the employee would nevertheless have been dismissed. In these circumstances the tribunal may find that there was a chance that he would have been retained and to express that loss of a chance in percentage terms. The principle was of course approved by the House of Lords in Polkey v A E Dayton Services Ltd [1988] ICR 142.

In the instant case the tribunal drew a clear distinction between procedural and substantive unfairness. They found that these dismissals were both procedurally and substantively unfair. They directed themselves that the Polkey deduction principle can only arise where the dismissal is procedurally unfair. As these dismissals were found also to be substantively unfair, it was not, in the view of the tribunal, appropriate to apply the Polkey deduction. Accordingly the full awards were made.

We think it arguable that such an approach is flawed in law. The Court of Appeal have specifically eschewed the procedural/substantive unfairness distinction in O'Dea v ISC Chemicals Ltd [1996] ICR 222, disapproving the drawing of that distinction by the Employment Appeal Tribunal in Steel Stockholders (Birmingham) Ltd v Kirkwood [1993] IRLR 515, at 517, per Lord Coulsfield.

Reverting to the instant case, the point of law which we identify as fit to go to a full appeal hearing is whether the tribunal erred in failing to consider whether or not these employees and each of them (the cases of Mr Haldenby differs on the facts from those of his fellow applicants) had lost the chance of retaining employment, and if so, how that loss of a chance should be expressed in percentage terms, on the grounds that the dismissals were not simply procedurally unfair.

We shall therefore permit the appeal to proceed to a full hearing on that limited basis only. The case should be listed for half a day. Category C. Skeleton arguments to be exchanged between the parties and copies lodged with this tribunal not less than 14 days before the date fixed for the full appeal hearing.