United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR PETER FORTUNE (of Counsel) Framlington Group Ltd 155 Bishopsgate London EC2M 3XJ
For the Respondent	MS R CRASNOW (of Counsel) Messrs Russell Jones & Walker Solicitors Swinton House 324 Gray's Inn Road London WC1X 8DH


 


JUDGE C SMITH QC: This is an appeal by Framlington Group Plc, the employers, against a decision of an Industrial Tribunal held at Stratford on 19 June 1997, of which Extended Reasons were sent to the parties on 8 July 1997, when the Industrial Tribunal held that the Applicant before them, Ms S Aley, had been unfairly dismissed and they ordered the Respondents before them, the employers, to pay the sum of £8,286.49 by way of compensation which included £7,823.49 by way of unfair dismissal compensation. Of course, we are only dealing with an appeal relating to the matter of the compensation relating to unfair dismissal.

From the amended Notice of Appeal and from the submissions we have heard on behalf of the Appellant employers, by Mr Fortune, Counsel on their behalf, it appears, stating the matter shortly that the grounds of appeal are as follows:

(1) It is alleged that the Industrial Tribunal failed properly to apply the two-stage approach laid down in Polkey as followed in Redbank. The Polkey reference, of course, is Polkey v A E Dayton Services Ltd [1987] IRLR 53 HL and that of Redbank is the Redbank Manufacturing Co Ltd v Meadows [1992] IRLR 209.

(2) It is alleged that the Industrial Tribunal wrongly assessed the past loss on the basis that the Respondent's earnings up to the date of the hearing amounted to £19,252, whereas they should have calculated them at £21,530 with the result that the past loss, so it is alleged, should have been about £1,268 rather than £2,795 as found by the Industrial Tribunal.

(3) It is alleged that the Industrial Tribunal should have found that there was no future loss as sustained by the Respondent since, at the date of the hearing, she was employed at a salary in excess of what she had been earning with the Appellants, so that the Industrial Tribunal erred in finding a future loss of £5,028.

The Respondent, by Counsel, submits that there is nothing in any of these grounds of appeal. Summarising her submissions very shortly, because reference should be made to the skeleton argument in relation thereto for the full details of the submissions, a submission is made that it is abundantly clear that on a proper reading of the decision the Polkey test was properly followed in the particular circumstances of this case.

With regard to points 2 and 3 relating to the grounds of appeal with regard to past and future loss, the submission is made that no arguments were addressed to the Industrial Tribunal along the lines now put forward and that this is a flagrant attempt to re-open questions of fact and dress them up as points of law, and that the decisions arrived at by the Industrial Tribunal in relation to past and future loss were plainly properly arrived at on the face of the decision without there being any discernible error of law or flaw with regard to the approach that was taken by the Industrial Tribunal.

It is against these submissions, as summarised, that we come to consider the decision of the Industrial Tribunal. The Industrial Tribunal found the relevant facts in paragraph 2 of their decision and we do not propose in this judgment to rehearse in any detail the facts therein set out. They should be treated as being incorporated in this judgment, should it be necessary for the matter to be further considered and we do no more than give a summary of those findings.

The Industrial Tribunal found that Ms Aley had been dismissed from her senior position with the Appellants as a communications co-ordinator on 25 July 1996. In our judgment the findings of fact of the Industrial Tribunal in paragraph 2 make it plain that this was a bad example of a peremptory and summary decision to dismiss the Respondent on the grounds of redundancy by the simple expedient of picking up a telephone and telling her, quite out of the blue, and, indeed, contrary to representations that had been, no doubt, honestly made to her by her immediate superior, that she was redundant with immediate effect, which as the Industrial Tribunal expressly found in sub-paragraph (v) came as an extreme shock to her and upset her greatly.

The Industrial Tribunal, having found that there was a dismissal on the grounds of redundancy, went on to find that there had been a failure to consult the Respondent before the decision or to warn her of the impending redundancy so that, of course, the dismissal was unfair. There is no challenge to that finding.

The Industrial Tribunal then proceeded, at sub-paragraph 3(c) of their Reasons to make their findings as to what would have happened if there had been a consultation. They expressed themselves in this way:

"(c) We do not accept that in the circumstances there was necessarily no alternative but to make Ms Aley redundant. This was a case where had there been consultation Ms Aley would have had much to say as to her ability to undertake the work left vacant by the departure of Ms Dalgleish. She was already carrying out production work as part of her job description and we consider that it may have been that her employer would have agreed to a reorganisation to enable her to retain her position and undertake more production duties had she been consulted. Alternatively, she could have applied for the post that was filled by Ms Ereira-Jones and indeed, if this employer had fulfilled their obligation to seek to find alternative employment before making an employee redundant, that post may not have been advertised. In the circumstances we do not consider it would be appropriate to reduce the compensation on the basis that there was a high or significant probability that Ms Aley would have lost her post even if proper procedures had been adopted."

It is submitted by Counsel for the Appellants that, in dealing with the matter in that way the Industrial Tribunal misapplied Redbank as following the two-stage process laid down in Polkey. It is submitted that, because they had found as a fact that the Respondent would have been prepared, if necessary, to accept a cut in salary to keep her job, they should have made findings as to what alternative job would have been offered to her and at what salary. It is submitted that by omitting so to do they failed to follow Redbank and Polkey.

However, in our judgment, this is not at all a fair reading of sub-paragraph 3(c). In our judgment Counsel for the Respondent is correct in her submission that, fairly read, sub-paragraph 3(c) amounts to a proper application by the Industrial Tribunal of the Polkey test to the assessment of compensation.

As Counsel for the Respondent pointed out, the Industrial Tribunal had to deal with a situation where the employers, the Appellants, had totally failed to carry out any consultation at all. Thus, the Industrial Tribunal had to look at a variety of possible outcomes, had there been proper consultation. They concluded that it was not appropriate to reduce the Respondent's compensation because they did not consider there was a high or significant probability that the Respondent would have lost her post if proper procedures had been adopted.

In our judgment, it is plain that the Industrial Tribunal were in effect saying that weighing up the various possibilities they were not satisfied that there was any significance chance that she would not have been retained at her present salary in one way or the other, had there been fair and proper consultation. The burden was on the Appellants to show that the Respondent might have accepted, or been offered and accepted, a less valuable alternative employment in circumstances where there had been a complete lack of consultation on the part of the Appellants.

In our judgment the Industrial Tribunal were entitled to conclude that there should be no Polkey reduction and that is exactly what they did in sub-paragraph 3(c). In our judgment the fact that they had found, as a fact, that the Respondent would, if necessary, have accepted a cut in pay to keep her job, did not in any way fetter them in reaching an appropriate decision as to whether or not there should be a Polkey reduction, nor in our judgment is there any requirement to spell out in terms by reference to the decision in Polkey and, if necessary Redbank, the two-stage process, provided it is clear from the Industrial Tribunal's decision that they in fact applied the proper test so that the parties knew why they had won and why they had lost in relation to that issue. For these reasons we reject that ground of appeal.

We turn to consider the remaining grounds of appeal. It is submitted that the Industrial Tribunal erred in failing to take account of the fact that for 4 out of the 37 week period from dismissal to the hearing the Respondent had been on holiday and not working, so that they should have increased the amount she had actually earned during that period by an appropriate percentage to reflect what she could have earned. In our judgment this is a completely bad point. First, no such argument was addressed to the Industrial Tribunal.

Secondly, the Appellants had had the Respondent's written statement for many months setting out her figure of £19,252 and did not challenge it. Thirdly, it is quite clear from paragraph 5 that the Industrial Tribunal dealt with the claim for past loss on the basis of actual receipts during the period and not on what the Respondent could have earned on application of a weekly rate over the whole period of 37 weeks. We must reject that ground of appeal. This was entirely a question of fact for the Industrial Tribunal to decide and we can see no error in the way in which they approached that matter.

Finally, it is submitted that the Industrial Tribunal erred in their approach to future loss in assessing her prospective salary as an annual figure, calculated by reference to the amount that she actually earned between October 1996 and June 1997, which in fact included about three months of a valuable five-month engagement with BZW and to deduct that net figure from her net earnings with the Appellants to arrive at a loss of £775.

It is further submitted that she should not have been awarded anything for loss of the Appellants' pension contributions or for a mortgage subsidy or private medical payments and should, in fact, be awarded nothing for future loss. The argument appeared to be based on the premise that, since at the date of the hearing she was currently receiving more than she had been in her employment with the Appellants; therefore she should receive nothing by way of future loss. In our judgment this submission totally fails.

To begin with, once again, we are satisfied that no such argument was addressed to the Industrial Tribunal. Secondly, it was entirely a question of fact for the Industrial Tribunal to decide what the appropriate figures were for future loss. In our judgment they were plainly entitled to deal with the matter in the way they did. Although, no doubt, the Respondent had a valuable short-term contract with BZW, it was apparent that this contract was shortly to expire and the future was quite uncertain - see paragraph 15 of the Respondent's statement which was before the Industrial Tribunal and accepted by them. In our judgment, apart from this, it is fanciful and unreal to seek to compare a one-off short-term engagement with the benefits under the contract which the Respondent lost as a result of the unfair dismissal, which included the valuable fringe benefits, rightly included in the Industrial Tribunal's calculation of her loss. This ground of appeal must be rejected and for those reasons the appeal is dismissed.

____________________________________________________________

Costs Application

We have considered this matter. We note particularly that it is only in very exceptional circumstances that we should award costs and our powers are narrowly circumscribed. It is only really where there is an unreasonable, vexatious or frivolous conduct of the matter.

We take the view here that, with regard to the second and third grounds of appeal there never was anything in those grounds, and it became clear to us that that was an attempt to re-open matters which were foreclosed to the Appellants as a result of the decision of the Industrial Tribunal.

We, of course, have taken very carefully into account the fact that the Employment Appeal Tribunal at a preliminary ex-parte hearing, did allow the matter to proceed to a full hearing. That is only one factor to be taken into account. The Employment Appeal Tribunal at that stage do not hear both sides of the picture and are quite unable to make any final assessment as to whether there really is, as it turns out, any proper ground of appeal.

In our judgment here, having heard the matter through, we are satisfied that it was quite unreasonable for the Appellants to have pursued those two grounds of appeal. We do not think that is the case with regard to the Polkey point. We accept that the Polkey point, which has been decided against the Appellants, but nevertheless was an arguable point, has taken up most of the time and thus, no doubt, it is in relation to that point that most of the Respondent's costs have been incurred. But nevertheless, we take the view here that, at the end of the day, the Appellants should pay one quarter of the Respondent's costs to be taxed, if not agreed, in consequence of the fact that there were two out of the three grounds that had absolutely no merit and should not have been pursued before the Employment Appeal Tribunal for the reasons we have given and that is the order we make.