United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MRS M R JEFFERSON (Representative) Peninsula Business Services Ltd Stamford House 361-365 Chapel Street Manchester M3 5JY


 


MR JUSTICE KEENE: These are two appeals listed for a preliminary hearing today so that the appellant may show cause why these should be allowed to proceed to a full hearing. The first is an appeal against a decision of an Industrial Tribunal promulgated on 21st March 1996 that the three respondent employees were unfairly dismissed. The second is an appeal against the decision promulgated on 3rd September 1996 that the appellant do pay compensation to the respondents in the following amounts:

Mr Harrison £ 760.64

Mr Law £ 1,140.00

Mr Muckalt £11,300.00

The tribunal found that all three dismissals were made for the reason of redundancy.

The appellant company was concerned with the manufacture, hire and sale of high pressure water jetting equipment. Its headquarters were in Birmingham, its manufacturing unit was at Salisbury and it had various depots in the United Kingdom concerned with the hiring side of the business. The respondents were all employees at one of the appellant's depots, namely the one at Whitworth in Lancashire. Mr Muckalt was employed as a store manager, Mr Law as a stores buyer and Mr Harrison as a storeman.

Due to trading difficulties, the appellant took the decision to move the majority of the operation carried on at the Whitworth depot to Birmingham. There was no evidence before the tribunal as to when that decision was taken or as to whether the transfer was urgent, but the tribunal below found that the managers knew four weeks before the decision was announced to the staff.

On Friday, 24th February 1995 meetings were held at Whitworth where staff were told that the majority of the Whitworth operation was being moved to Birmingham "over the next few weeks", but that the company would retain a regional workshop at Whitworth for the time being until the property could be sold, and that when it was sold it would retain a regional workshop in the area. The staff in stores were told that they were being given notice of redundancy, and 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 the following Monday, 27th February. They were told that if they did not wish to entertain a job in Birmingham they would be told their redundancy package on the Monday. The stores and purchasing staff were told that the move of the stores to Birmingham was to start on the afternoon of the Monday at 3.30 p.m., and that it was estimated that the job would be completed by Tuesday, 7th March 1995. Assistance would be required from two or three of the staff to facilitate the move.

On Monday, 27th February, the respondents had individual meetings with two of the managers of the appellant company. 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 that they would like him to leave on the Friday, his redundancy package was read out to him and he was handed a letter of dismissal. Mr Harrison left on the 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 he turned the offer down because of the short time which he had in which to consider it. He was handed his letter of dismissal and he left on 3rd March. There was no further consideration in the interim and there was no offer of alternative employment.

The tribunal which had earlier in its decision reminded itself of a number of the leading decisions on redundancy and the need for consultation, including the Employment Appeal Tribunal decision in Rowell v Hubbard Group Services Ltd [1995] IRLR 195 and the Divisional Court decision in Regina v British Coal Corporation ex parte Price [1994] IRLR 72, concluded that the employer had not acted reasonably. They said this:

"11. ... 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 before hand 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. 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."

They consequently found that the respondents, who at that time were the applicants, had been unfairly dismissed.

In the Notice of Appeal in respect of the first appeal, that decision as to unfair dismissal is itself attacked. Arguments are referred to which suggest that the tribunal went wrong in not applying the test of what would have happened, had proper procedures been followed. Before us today Mrs Jefferson on behalf of the appellant has not sought to pursue with any vigour, it is fair to say, the appeal against the decision on unfair dismissal.

We are firmly of the view that it is quite wrong to pose the question in connection with a decision on the unfairness of the dismissal: would consultation or might consultation have made a difference to the decision to dismiss? That is not the right question at the stage of asking whether the dismissal was fair or not, although it may well be relevant at the compensation stage. But at the earlier stage the proper approach is to ask whether the employer had acted reasonably. That is clear from the decision of the House of Lords in Polkey v A E Dayton Ltd [1988] ICR 142, 153D:

"Where there is no issue raised by sections 58 to 62 the subject matter for the tribunal's consideration is the employer's action in treating the reason as a sufficient reason for dismissing the employee. It is that action and that action only that the tribunal is required to characterise as reasonable or unreasonable. That leaves no scope for the tribunal considering whether, if the employer had acted differently, he might have dismissed the employee. It is what the employer did that is to be judged, not what he might have done. On the other hand, in judging whether what the employer did was reasonable it is right to consider what a reasonable employer would have had in mind at the time he decided to dismiss as the consequence of not consulting or not warning."

In the present case the tribunal below did ask itself the proper question whether the employer had acted reasonably; and in the penultimate sentence of its decision it answered that question and answered it in the negative. There were ample grounds on which the tribunal could properly come to that conclusion. Its decision there cannot possibly be stigmatised as perverse, and we can see no arguable legal basis upon which the tribunal's decision that these dismissals were unfair can possibly be attacked. We propose therefore to dismiss the appeal against the decision as to unfairness of the dismissals.

That leaves the question of the appeals against the assessment of compensation.

We do not propose to say very much about that because we are persuaded, just, that there is an arguable point which can be dealt with on a full appeal on that aspect of the matter. It seems to us that, in connection with that appeal, it may be appropriate for there to be an order that the Chairman's notes from the remedies hearing be produced for the Employment Appeal Tribunal which hears the appeal against the awards of compensation.

We pause at that point because it may be that it is appropriate that notes be produced also, not for all the original first hearing but for certain parts of that, if there was evidence given at that stage which was relevant to the existence of a vacancy or vacancies at Birmingham, the number of those vacancies and the type of vacancies and the attitudes expressed by the employees towards those vacancies. It seems to us that the notes of the remedies hearing ought to be produced. We order that notes of any evidence given at the first hearing be produced in respect of the existence of vacancies at Birmingham, their number and the type of employment to which they related and the attitudes of the three employees who are now the respondents towards those vacancies. We also take the view that there ought to be skeleton arguments exchanged in this case 14 days before the hearing date.