United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR T BLAKESTONE (Representative)
For the Respondent	MISS I SIMLER (of Counsel) Messrs Kershaws Solicitors 160 Brompton Road Knightsbridge London SW3 1RP


 


JUDGE PETER CLARK: This is an appeal by the employer, ABM Typographics Ltd, against decisions of the Hull Industrial Tribunal sitting on 13th February and 20th March 1996 that the respondent employee, Mr Mumby, was unfairly dismissed and entitled to compensation totalling £11,344.

We begin with the chronology.

The respondent commenced employment with the appellant on 1st June 1975. On 12th May 1995 he was dismissed by reason of redundancy by a notice which expired on 4th August 1995. At that time he was Company Secretary and one of three directors of the appellant.

On 20th October 1995 he presented an Originating Application to the Central Office of Industrial Tribunals complaining of unfair dismissal and an unlawful deduction from wages. We are not concerned with that latter claim.

In his form IT1 he alleged that he was unfairly dismissed in that he was unfairly selected for redundancy and was not consulted about his redundancy.

He was represented by his trade union Branch Secretary, Mr Grant. On 20th December 1995 Mr Grant wrote to the Regional Office at Leeds, saying this:

"Could I please withdraw on behalf of Mr. Mumby the claim that he was not consulted about his redundancy. After speaking to Mr. Mumby in my capacity as his full time trade union official he has decided not to pursue this part of the unfair dismissal claim."

Miss Simler, who appears on behalf of Mr Mumby today, tells us that the respondent did not wish to withdraw that part of his claim, but she accepts that he is and was for all relevant purposes bound by that letter from his representative.

By a letter dated 21st December the Regional Office replied acknowledging receipt of that letter, which was accepted by a Chairman as an amendment to the Originating Application.

That exchange of correspondence was copied to the appellant, who were represented by their Managing Director, Mr Blakestone.

Thus, from that date the appellant clearly understood that lack of consultation was no longer an issue in the unfair dismissal complaint.

The parties assembled for a hearing before the Industrial Tribunal sitting at Hull on 13th February 1996. We have the Chairman's Notes of Evidence of that hearing dated 9th January 1997. There is no express mention in those notes of lack of consultation. However, in a further Note of Evidence prepared by the Chairman, Mr Worrall, and received by the Employment Appeal Tribunal on 26th February 1997, he states:

"The evidence was that he [the respondent] was not consulted about redundancy prior to the meeting on 10th May 1995."

It is curious that such evidence does not appear in the original notes; and there is no indication in the later letter as to who gave such evidence.

However, further light is thrown on the matter by a subsequent letter to the Employment Appeal Tribunal from the Chairman dated 8th April 1997 in response to a letter from Mr Blakestone dated 21st March 1997 in which he contended that he drew the Chairman's attention to the letters dated 20th and 21st December 1995 at the subsequent hearing held on 20th March 1996. The Chairman found those letters on the file and, according to Mr Blakestone, commented, "This is most unfortunate." However, the tribunal declined to alter their original decision.

We set out the Chairman's response, contained in his letter dated 8th April 1997, in full:

"I cannot recall using the word "most unfortunate" or, if said, the context in which it was said. In any case, if said, it was said after the second decision on compensation had been made.

At the first hearing on 13th February 1996 after Mr Blakestone had left it was put on behalf of the applicant that although he was seen on 10 May about his redundancy he was not given the opportunity of re-training nor given the opportunity to state his case for re-training and to that extent there was no meaningful consultation. The Tribunal considered this point and decided that in all the circumstances the dismissal was unreasonable."

The clear inference from the Chairman's letter is that after Mr Blakestone had left the Industrial Tribunal the respondent's representative submitted that there was no consultation and, as we see from the tribunal's summary reasons dated 19th February 1996, and subsequent extended reasons dated 26th February 1996, lack of consultation was the tribunal's sole ground for holding that the dismissal was unfair. We cannot read into that decision, as Miss Simler asks us to do, that there was an implicit finding that the dismissal was also unfair because the respondent's selection was unfairly carried out. We also note that in paragraph 6 of those extended reasons the tribunal find that had there been proper consultation the respondent could have made clear that he had not been given an opportunity to operate the new technology, which had a bearing on the decision to select him for redundancy, and this might have made a difference to the result.

On 21st February 1996 the appellant applied for a review of the first decision of the Industrial Tribunal with a view to producing additional, unspecified, evidence and witnesses in support of the Company's case. That application was summarily dismissed by the Chairman under Rule 11(5) of the Industrial Tribunal Rules of Procedure 1993 on the grounds that it had no reasonable prospect of success.

On 20th March 1996 the same tribunal reconvened to consider remedies. As appears from the tribunal's reasons dated 10th April 1996 the tribunal awarded full compensation to the respondent for his losses arising from the dismissal, without making a deduction for the loss of a chance that consultation would have made a difference to the result. The Polkey deduction.

The Appeal

In this appeal Mr Blakestone takes essentially two points:

First, he submits that the appellant was given no opportunity to call evidence and/or present argument on the lack of consultation point, it having so far as the appellant was concerned, been expressly abandoned by the respondent by way of amendment on 20th December 1995. He further submits that the point has added force in circumstances where the consultation issue was raised by the respondent's representative after Mr Blakestone had left the tribunal hearing on 13th February 1996, according to the Chairman's letter dated 8th April 1997. That, he submits, is a basic breach of natural justice.

Secondly, it is said that at the remedies stage the tribunal failed to consider what was the percentage chance of the respondent retaining his employment had proper consultation taken place, notwithstanding the tribunal's finding at paragraph 6 of the extended reasons for the liability decision that if there had been proper consultation the result might, not would, have been different. The 'Polkey deduction' point.

In response, Miss Simler submits that the question of consultation was sufficiently raised in evidence according to the Chairman's letter date stamped 26th February 1997, and in particular by reference to the employer's decision to train a fellow director, Tony, with five years service in preference to the respondent with 20 years service, and if Mr Blakestone chose to leave the proceedings before closing speeches were completed he can hardly complain if the no consultation point was taken in his absence.

As to the second point, she accepts that the tribunal was bound to consider the question of any Polkey deduction, but asks us to infer that this tribunal did consider the point, but found, permissibly, that no deduction was appropriate.

Conclusion

In our judgment both grounds of appeal are made out. Although the Industrial Tribunals operate less formally than the ordinary courts, that must not be allowed to obscure the basic principle that a party is entitled to know what case he has to meet, and for the Industrial Tribunal to reach its conclusions on the issues canvassed by the parties. On our reading of the original Notes of Evidence there is no mention of lack of consultation. This critical point is added in the Chairman's subsequent letter date-stamped 26th February 1997 in these terms:

"The evidence was that he was not consulted about redundancy prior to the meeting on 10th May 1995."

It is not clear who gave that evidence.

The position becomes clearer upon reading the Chairman's letter dated 8th April 1997 which we have earlier set out. The point was raised by the respondent's representative after the appellant had withdrawn from the hearing, by way of submission. We cannot understand how the Industrial Tribunal could accept that submission in the absence of evidence being led on the point and in the absence of the appellant, particularly where the consultation issue had been expressly abandoned by the respondent's letter of 20th December 1995. In our judgment the tribunal fell into error in proceeding in this way.

Secondly, it is now well-established, and we think accepted by Miss Simler, see e.g. Red Bank Manufacturing Co Ltd v Meadows [1992] IRLR 209, that an Industrial Tribunal will err in law if it fails to consider what were the chances of a fair procedure resulting in the employee retaining his employment in order to assess, under s.123(1) of the Employment Rights Act 1996 the 'Polkey deduction', that is, an assessment of the percentage chance of his retaining employment. If it be held that he had, for example, a 25% chance of retaining employment, he is entitled to recover 25% of the gross compensatory loss. In our view no consideration was given to this question by the Industrial Tribunal.

It follows, in our judgment, that the tribunal's approach to this case was fatally flawed. The decision cannot stand and must be set aside. The entire case will be remitted for a rehearing before a fresh Industrial Tribunal. For the purpose of that hearing the respondent must make clear, in writing, whether he wishes to withdraw the amendment to his IT1 abandoning the consultation issue. It will be for the new Industrial Tribunal to clearly identify with the parties the issues to be tried at the outset of the new hearing.