United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR C BROWN (Consultant) HRS Consultancy 35 Portway Wells Somerset BA5 2BA
For the Respondents	MR R ASTON (Solicitor) Messrs Astons Solicitors 57 Love Lane Pinner Middlesex HA5 3EY


 


JUDGE PETER CLARK: This is an appeal by Mr Lloyd, the applicant before an Employment Tribunal sitting at Carmarthen under the chairmanship of Miss C Collier on 25th and 26th June 1998, against that tribunal's reserved decision, promulgated with extended reasons on 24th July 1998, dismissing his complaint of unfair dismissal against his former employers, the respondent Taylor Woodrow Construction. We are not concerned in this appeal with his further complaints of breach of contract, which was also dismissed by the tribunal, and failure to provide written reasons for dismissal, which he withdrew.

The Facts

1. This is one of those now, happily, rare decisions in which the Employment Tribunal set out the evidence instead of their findings of fact. What is required in extended reasons given by Employment Tribunals for their decision under their duty contained in Rule 10(3) of the Employment Tribunal Rules of Procedure is identification of the issues; the material findings of fact, resolving where necessary questions of fact; the relevant legal principles; the Employment Tribunal's reasoning in applying those principles to the facts as found and their conclusions on the issues raised. That said, we feel able to discern the following relevant factual background.
2. The appellant was employed by the respondent as a Quantity Surveyor, latterly based at Brynhenllys. In September 1995 another Quantity Surveyor, Stephen Fouracre, was transferred to work at that site.
3. By 15th September 1997 the Director in charge of the mining division of the company, Mr Hinckley, found that with three contracts coming to an end in South Wales a potential redundancy situation was in prospect. In particular only one Quantity Surveyor was required in the Quantity Surveyor department in which both the appellant and Mr Fouracre worked. One would have to go unless alternative employment was found for him.
4. The respondent had no formal redundancy selection policy and Mr Hinckley told the Employment Tribunal that he used four selection criteria when choosing between the two Quantity Surveyors; length of service, attendance and disciplinary record; suitability/capability and mobility. As to those four heads:

(1) The appellant had nine years service with the company, Mr Fouracre had 19.

(2) Both had good attendance and disciplinary records.

(3) Although both men had several years relevant experience, Mr Fouracre had been working full time on the Brynhenllys contract, scheduled to run until the year 2003, whereas the appellant had worked on it for only year, and then part-time. Mr Fouracre was 38 years old and would be available to complete the contract; the appellant was 61 and would retire before its completion. Further, Mr Fouracre was computer literate, an essential requirement for the project; the appellant was not.

(4) As to mobility, Mr Fouracre had relocated to South Wales; the appellant had never been previously asked to relocate.

5. Having carried out that assessment, Mr Hinckley asked the area manager, Mr Sadler, to inform the appellant that he was potentially redundant.
6. A meeting took place between Mr Sadler and the appellant on 19th September 1997. The tribunal record, without resolving, a factual dispute between the two men as to what precisely was said at that meeting. Mr Sadler's evidence was that he explained to the appellant that due to a reduction in work load in South Wales a potentially redundancy situation had arisen; the appellant and Mr Fouracre formed the pool for selection and that there had been a selection procedure which resulted in the appellant being identified as potentially redundant. He explained what monies would be due and that there would be a consultation process to see if other vacancies were available for the appellant within the group.
7. The appellant's evidence was that he was not sure what "potentially redundant" meant, although he had been made redundant four times before. He denied that Mr Sadler had told him that there was a pool of two and that Mr Fouracre was the other candidate for selection; he also denied that he was told that there had been a selection procedure.
8. Pausing there, the grounds of appeal in this case begin with the assertion that "The Tribunal found as fact:" and then set out certain extracts from paragraphs 7 to 10 of the tribunal's reasons. The response to that on behalf of the respondent is that these were not findings of fact, but a recitation of the evidence. That is an unsatisfactory state of affairs. In the event it does not matter for the purposes of the real point in this appeal, but it illustrates the potentially vital importance of Employment Tribunals setting out their findings of fact, not the evidence which they heard.
9. Resuming the narrative, steps were then taken to find the appellant alternative employment. He was offered a job in Birmingham doing similar work for 12 weeks, followed by a job at Swansea. On 29th September he declined that offer. He did not wish to travel outside a radius of 50 miles from his home in Carmarthen and did not want to work away from home.
10. On 30th September a meeting took place between the appellant and Mr Hinckley, attended by two members of personnel. Mr Hinckley told the appellant that there were no other vacancies and that it was likely that his redundancy would be confirmed on 3rd October. A letter was indeed sent to him dated 3rd October notifying him of his dismissal on the grounds of redundancy and giving details of the payment due to him. It was later agreed that the effective date of termination of the contract was 6th October 1997.
11. Following the dismissal, at the appellant's request, a meeting took place between the appellant and two members of personnel on 28th November 1997. Although originally intended by the company as an appeal hearing it was, at the appellant's request, treated as an 'Inquiry' because he renewed earlier requests made for reasons for his redundancy. At that meeting he was told, for the first time, of the primary selection criteria, namely, length of service, attendance and disciplinary records, capability/suitability, referring to the appellant's lack of computer literacy and the Mr Fouracre's familiarity with the Brynhenllys site. Apparently no mention was made of the mobility criterion at that meeting.
12. Thereafter, the appellant appealed against his dismissal. A first appeal was heard on 17th February 1998 and dismissed. A final appeal, heard on 20th April 1998 also upheld the original dismissal decision.
13. Significantly, for the purpose of this appeal, the tribunal record this at paragraph 10 (within the 'EVIDENCE' section of their reasons):

"The appeals were by way of re-hearing and Mr Lloyd challenged many points and disputed the selection criteria."

14. Finally, the tribunal records a dispute between the appellant and Mr Hinckley as to whether the appellant was "set-up" for dismissal as alleged. The tribunal also record Mr Hinckley's evidence that nothing the appellant could have said or done would have altered the decision to make him redundant. There was only work for one Quantity Surveyor and on the application of the selection criteria it was clear that of the two surveyors Mr Fouracre should be retained.

The Law

15. The tribunal referred to the House of Lords decision in Polkey v A E Dayton Services Ltd [1988] ICR 142 for the need for warning and consultation in redundancy cases; a fair basis for selection and that reasonable steps be taken to find alternative employment. The definition of fair consultation contained in the R v British Coal ex parte Price [1994] IRLR 72 is also set out. We understand that the tribunal was also referred to Rowell v Hubbard [1995] IRLR 195, a decision of the EAT, Judge Levy QC presiding, in which the British Coal principles as to consultation, first coined by Hodgson J in R v Gwent County Council ex parte Bryant [1988] Crown Office Digest 19, were followed and applied.

The Issues

16. Under the heading 'CONTENTIONS' the tribunal set out the issues raised in the case; the rival submissions and some of their findings. They may be summarised in this way:

(1) The appellant's contention that his dismissal was engineered and that the true reason was not redundancy was rejected by the tribunal. They found redundancy to be the reason. That is a potentially fair reason for dismissal.

(2) As to the question of reasonableness under s. 98(4) of the Employment Rights Act 1996 the tribunal made the following findings:

(a) that, contrary to the appellant's contention, Mr Hinckley did carry out a selection process (as he had claimed in evidence) and that the selection criteria were fairly and objectively applied.

(b) that the respondent had discharged its duty to make reasonable efforts to find other employment for the appellant. That the job offered was not 'suitable alternative employment' within s. 141 of the 1996 Act was nothing to the point when considering reasonableness under s. 98(4).

(c) that the consultation process was deficient in one respect. The appellant was not told of the selection criteria before the decision to dismiss was taken. However, the tribunal went on to find that that defect was later corrected at the later appeal hearings when he had the opportunity to contest the criteria and did so.

17. The tribunal summarise their findings at paragraph 24, adding to the above that even if the defect in consultation had not been cured on appeal, they would have found that that failing made no difference to the outcome for the purposes of assessing compensation. Dismissal fell within the range of reasonable responses. It was fair.

The Appeal

18. Mr Brown has raised essentially two grounds of appeal on behalf of the appellant.
19. First, he submits that in a case where dismissal is on the ground of redundancy a failure to declare the principles of selection until eight weeks after the date of termination cannot reasonably be said to remedy a failure to consult, even when taken together with the two subsequent appeal hearings.
20. In his skeleton argument he submitted that there was no authority to support the tribunal's finding that such a defect in the consultation process could be remedied by appeals subsequent to dismissal, albeit that those appeals were found to be by way of rehearing, at which the appellant challenged many points and disputed the selection criteria. Mr Aston cited no authority to support the tribunal's finding in his skeleton argument, other than to rely on Mugford v Midland Bank [1997] IRLR 208, at paragraph 41(3), a case which, it seems to us, is not directly on point since there was no appeal on the facts there.
21. In these circumstances we referred the representatives to that line of EAT authority, starting with Whitbread v Mills [1988] ICR 776 conveniently referred to at paragraph D1015 of Volume 1 of Harvey on Industrial Relations and Employment Law. The later cases are Clark v Civil Aviation Authority [1991] IRLR 412 and Byrne v BOC Ltd [1992] IRLR 505.
22. The principle emerging from those cases is that a procedural defect at the dismissal stage may be cured at the appeal stage, provided that the appeal represents a rehearing, and not merely a review of the original decision. We think that it is an approach consistent with the House of Lords decision in West Midlands Co-operative Society Ltd v Tipton [1986] ICR 192, to which Wood J referred in the course of his judgment in Whitbread v Mills.
23. Faced with that line of authority Mr Brown submitted that a case of redundancy was distinguishable from cases of conduct or capability. There has been no case in which the Whitbread v Mills principle has been applied involving dismissal by reason of redundancy and a failure to properly consult with the employee prior to his dismissal.
24. We are also unaware of such a case until today. The explanation may be, in our collective experience, that a right of appeal is unusual in cases of redundancy dismissal. That may be in part due to the decision of the Northern Ireland Court of Appeal in Robinson v Ulster Carpet Mills Ltd [1991] IRLR 348, that a right of appeal is not a necessary part of a fair redundancy procedure. It may be that proper consultation prior to dismissal ought to obviate the need for an appeal. Whatever the reason, the point arises directly for determination in this appeal.
25. We accept Mr Aston's submission that there is no distinction in principle between a case of procedural deficiency at the dismissal stage being cured by a full rehearing on appeal between any of the potentially fair reasons for dismissal under s. 98 of the 1996 Act. A failure to inform an employee suspected of misconduct of the nature of the charges against him and a failure to give him the opportunity to contest those charges at a disciplinary hearing is a breach of natural justice. Prima facie the dismissal is unfair. However such breaches can be cured by a proper appeal hearing. See Clark v Civil Aviation Authority. The same, we think, must also be true of a failure to consult in the context of a redundancy dismissal.
26. We therefore reject the first ground of appeal. As a matter of fact for the Employment Tribunal it was entitled to find that the defect in consultation prior to dismissal was cured by rehearing at the appeal stages.
27. The second ground of appeal is perversity. Mr Brown relies on four findings by the Employment Tribunal which, taken together, he submits, evoke the response "my goodness that must be wrong" as May LJ put it in Neale v Hereford & Worcester County Council [1986] IRLR 168.

(1) The tribunal's finding at paragraph 20, that the respondent's failure to write down the selection criteria on paper was not relevant to the fairness of those criteria and their application. Far from being perverse, we should have thought that that statement was self-evidently correct. The difficulty, as the tribunal observed, was an evidential one for the respondent. Were there any criteria and were they applied in this case? That question was resolved by the tribunal in favour of the respondent.

(2) It was not until the tribunal hearing that Mr Hinckley mentioned for the first time the fourth selection criterion, mobility. Again, that raised a problem of credibility for the respondent, which they overcame on the tribunal's findings.

(3) Mr Brown appeared to be complaining about the offer of alternative employment being made before dismissal. The appellant did not understand the context in which it was being made. That, we think, cannot be correct in circumstances where the appellant accepted that he had been warned by Mr Sadler on 19th September that he was potentially redundant.

(4) The finding at paragraph 15 that Mr Hinckley stated that nothing the appellant could have said or done would have altered the decision to make him redundant. That may have been Mr Hinckley's view, but the Employment Tribunal accepted that the case was properly reconsidered at the two stages of appeal by managers who had not previously been involved and who were in a position to reach a different conclusion.

28. In our view, far from being perverse, the findings by the tribunal relied on by Mr Brown seem to us to be wholly unexceptionable and well within the range of permissible options open to the Employment Tribunal.
29. In these circumstances we shall dismiss this appeal.