United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MISS E SLADE QC and MR S DEVONSHIRE (of Counsel) Instructed by: The Solicitor London Borough of Brent Brent Town Hall Annexe Forty Lane Wembley Middlesex HA9 9HD
For the Respondents	MR A GUMBUTI-ZIMATO (of Counsel) Instructed by: Messrs O H Parsons & Partners Solicitors 3rd Floor Sovereign House 212-224 Shaftesbury Avenue London WC2H 8PR


 


MR JUSTICE MORISON (PRESIDENT): The respondents to this appeal, whom we shall call the employees, were all employed by the appellants, the London Borough of Brent [Brent] in their children's social services department. They were dismissed by Brent, ostensibly by reason of redundancy. They brought complaints against the Council alleging unfair dismissal and, save for Ms Eaton, race discrimination. In a reserved decision, following an extensive hearing, the Employment Tribunal upheld all the complaints of unfair dismissal [save for the case of Mr Phanse,] and upheld all the complaints of race discrimination.

The background facts which are relevant to this appeal are these.

1. All the complainants are members of Unison. In the autumn of 1995 Brent carried out a fundamental review of the workings of the children's department and in particular its relationships with the education department. The review was performed by Wendy Mallard whose brief was to find savings of £½ million. Her report was prepared in conjunction with fellow senior managers within Social Services and submitted to the relevant committee in November 1995. She identified the need for fewer staff and indicated that any selection process should involve a fair and objective assessment of the competencies of candidates to be measured strictly against the requirements of the particular posts.
2. The report was accepted by the committee and forwarded to Unison in the new year and indicating that the consultation could take place during the week commencing 15 January 1996. Unison was told that Brent proposed that for the top positions there would be a ring-fenced competition comprising an interview, a written exercise and a group exercise or presentation and an assessment from the current line manager "using a common framework and criteria". For new posts there would be a written exercise, a presentation or group exercise and an interview and appraisal from the current line manager.
3. Union members when consulted were shocked by the severity of the cuts and objected to the three-stage selection process, which they resolved to boycott. On 29 January 1996, all affected staff were sent redundancy notices terminating their employment contracts as from 31 March 1996 unless the letter was withdrawn on the employee's successful selection following the redundancy procedure. Mr Phanse unsuccessfully competed for the post of Director of the newly organised Special Assessments Needs Unit. The eighth named employee [Ms Lalgie] requested voluntary redundancy at the beginning of February and this was granted.
4. On 19 February 1996 the appraisals for Team Manager's posts were carried out by a number of people, none of whom had direct line management responsibilities for those they were appraising. No papers were available at the appraisal meeting. The Tribunal found as a fact:

"...the process followed consisted entirely of the recollections and observations of the individuals of their knowledge of each of the candidate's work...

5. All staff currently employed by Brent were put into the pool for consideration regardless of whether they were permanent employees or on short-term contracts, their length of service with Brent was not a matter that was discussed at the appraisal.
6. The ethnic breakdown of those appointed showed that no white employees failed in the selection process whether or not they participated in the first two stages of the selection process. The Applicants together with other black employees were unsuccessful. All those who were unsuccessful were those who had boycotted the selection procedure and not undertaken the written test or interview stages of the selection process."
7. It was the Union's case before the tribunal that the Council had failed to consult properly prior to the decision to make people redundant; that the selection procedure was flawed and that there should have been volunteers for redundancy and re-training for anyone whose performance was less than adequate. The appraisal system was entirely subjective and inherently inequitable and failed to have regard to length of service or the sickness and disciplinary records of those being assessed; and that temporary staff should not have been included in the pool. The process was designed to reduce the number of black staff within the Social Services Department. In relation to two applicants, Ms Lalgie and Mr Walters, who were Child Protection Principal Officers in the Child Protection Unit, they should have been eligible for a transfer to the NSPCC when the functions of the unit were transferred to that charity.
8. The tribunal concluded as follows:
9. The Council had complied with their obligations to consult with the Union about the prospective redundancies. "It was the trade union that did not seek to take up that opportunity and to use that opportunity effectively."
10. Inherently the appraisal system was flawed. "The appraisals were originally said to be conducted by line managers. By grouping together a team leaders and service unit managers in one ring-fencing group it immediately became impossible for team leaders to be appraised by their line manager as they were competing potentially against their line managers. Even if that were not the problem the minute that team leaders ceased to co-operate with the selection process it became clear that social workers could not be assessed by their line managers and they too would not be considered in accordance with [the Council's] letter [sent to the Union]."
11. In any event, the whole process was flawed. First because the assessment was concluded during a twelve hour working day, which was for a longer period than anyone could concentrate effectively. No notes were made by the appraisers. The note made by the moderator was brief. No personnel files were used and none of the appraisers had any knowledge of those being appraised. There was no opportunity to check whether a person's recollection was accurate and reliable.

"The appraisal presented as anecdotal chit-chat rather than an assessment objectively of individual's skills. If the appraisals had been carried out in a way that was fair and objective it beggars belief that social workers who had been in post for a considerable length of time but had not been the subject of either discipline or capability procedures could score so low consistently throughout all the matters addressed in the appraisal form. An appraisal should draw out strengths and weaknesses. The applicants were all shown to have scored either one or two and never scoring at the top end of the scale where they must over the years have developed strengths in some of the areas concerned. It should be noted that the Tribunal have found all the Applicants presented as strong and effective witnesses."

12. The tribunal rejected the Council's case that they were entitled to include within the pool those employees whose contracts were about to terminate and whose severance could have occurred without the need to make redundancy payments. Despite the difficulties caused by the refusal to participate in the selection procedures "no reasonable employer would adopt a system that was so obviously open to criticism…"
13. These conclusions applied to all the applicants except for Mr Phanse and Ms Lalgie.
14. The circumstances leading to Ms Lalgie's departure were such that she felt that she had no alternative but to ask for voluntary redundancy and her request was tantamount to a [constructive] dismissal and was as such unfair. The Council should have either treated the child protection officers [who were all black] as the other employees and put them into the pool or they should have been treated as a special category whose jobs might transfer to the NSPCC. In neither event should the option of volunteering for redundancy have been applied. The Union had suggested asking for volunteers but this had been rejected.
15. As to race discrimination, the tribunal concluded that the Council's failure to acknowledge the inherent flaws in the selection process led it to draw the inference that the Council's reason for persisting in this selection process was in order to remove black staff who they considered to be difficult.

"For the same reasons ass set out … which draws the tribunal to conclude that the selection for redundancy was unfair …the Tribunal is inevitably drawn to the conclusion that the black staff were treated differently from the white."

16. The tribunal found, therefore, that the dismissals of the four team leaders and of Ms Christie, a social worker, were all unfair and that they had been discriminated against on grounds of their race.
17. In relation to Mr Walters and Ms Lalgie who were child protection officers, the tribunal concluded that they too were unlawfully discriminated against in the same way as the team leaders and

"there was no justification for the fact that they were treated differently from the other staff given the way that stage at which the negotiations for the transferring of child protection functions to the NSPCC had reached."

18. As to Mr Phanse, he was interviewed for the post of director but was unsuccessful. He was not given the opportunity to be considered for the assistant director posts that were vacant although he clearly would have been qualified for those posts. Failure to consider him raises the question why. Having reviewed the evidence the tribunal concluded that whilst there was no race element in his non-appointment to the post of director the Council's failure to consider him for a permanent post as an assistant director or otherwise was not explained to the tribunal . They drew the inference that he was treated as he was because the Council no longer wanted him in the department on the grounds of his race.
19. For the Council, Ms Slade QC submitted in relation to the finding of unfair dismissal that the tribunal had substituted their own decision for that of the employer. In essence, the tribunal failed to recognise that the initial selection system on offer was manifestly fair with each of the three parts carrying an equal weighting. The tribunal was perverse in criticising the pool. In the first place, Brent's proposal was to eliminate the posts of team leader and service unit manager [referred to by the tribunal as SUM] and to create a new level falling between the two, namely the post of team manager. In those circumstances it would not have been open to Brent to exclude from the pool those who held either of the two posts due to be abolished. Therefore, it was inevitable that the persons within the pool would include many of the line managers of those also within the pool. Further it was unfair to criticise Brent for the way the appraisals were carried out. The reason why there was a lack of paper information was due to a failure in the department for proper records to be kept. The appraisers had to work with the material which existed, however scanty. The appraisers assessed the persons within the pool against specific criteria set out on an appraisal score sheet and a marking guide under the moderation of a member of Brent management consultancy services. Effectively, Brent had no other option but to proceed as they did due to the members of Unison refusing to co-operate with the process. In any event, the tribunal failed to give adequate reasons for their decision. As to Ms Lalgie, she and other officers in the Child Protection Unit were all given the option of voluntary redundancy and it is not apparent from the decision why the tribunal concluded that she had been dismissed.
20. As to race discrimination, Ms Slade QC submitted that the tribunal had failed to distinguish between treatment which was or may have been unreasonable and treatment amounting to a detriment which was attributable to race. The tribunal had erred in law in simply accepting an unsupported assertion that the reason for the selection of the employees for redundancy was their race. The majority of the short term contract workers who were included within the pool were black. Further, the tribunal founded their judgment on two principal facts, which were wrong. First only black staff amongst the social workers and team leaders who boycotted the selection procedure lost their jobs [except Ms Eaton, who was a vociferous supporter of her black colleagues]. Second, the three SUMs affected by the redundancy exercise were all white and were better treated than Ms Howe and Mr Phanse.
21. In fact the evidence showed quite clearly that of the 70 staff who boycotted the selection process the race profile was as follows: 14.2% were Asian; 27% were white; 58.8% were black. 46 of the boycotters were re-appointed of whom 13% were Asian; 28.2% were white and 58.8% were black. Of the 24 boycotters who were not appointed 13.6% were Asian, 22.8% were white and 63.8% were black. Those statistics make it clear that the reasons for non-appointment cannot have been race.
22. Second, of the three SUMs who were said to have been treated more favourably than Mr Phanse and Ms Howe one was black. The lynch pin of the tribunal's findings on race were not made out on the un-contradicted evidence.
23. For the employees, Mr Barber of Unison submitted that the appeal was essentially an attempt to re-litigate the very issues which had been considered by the fact-finding tribunal and this was, effectively, a general perversity appeal. As to discrimination, once the tribunal had accepted, as they did, that the defective procedure was persisted in in order to remove black staff who were difficult the tribunal had to conclude that they were discriminated against, overtly and intentionally, on the grounds of their race.
24. We are grateful for the submissions which were made to us. Since Mr Barber was criticised by the employment tribunal for the way he conducted the applicants' case, we think it fair to point out that at this appeal his conduct could not be criticised. He presented his arguments with care and clarity and with moderation.
25. We can state our conclusions relatively briefly. To the majority, It seems to us that the findings of unfair dismissal cannot be challenged. The crux of the case was whether the employers had handled a redundancy situation fairly. Although the employees had made a fair procedure more difficult by boycotting the three stage process, it was no a situation which became impossible for the employers. They were able to carry out some kind of appraisal process; they could properly have kept proper records of their deliberations; they could, if needs be, have communicated with the individuals whom they were minded not to keep on, what their conclusions were and invited comments on them. Effectively asking employees to compete for their own jobs required sensitivity which was not shown. By dismissing all the staff [a notice of dismissal cannot unilaterally be withdrawn] from an early stage was less than helpful. Although we might ourselves have reached a different conclusion on this issue, we remind ourselves that we are not a fact finding tribunal. The employment tribunal heard evidence from a large number of witnesses over 9 days. They were much better able to decide the merits of the unfair dismissal complaint then us We think that some of the language in which the tribunal expressed their decision is not entirely easy to follow and this particularly applies to Ms Lalgie. She opted for voluntary redundancy but, as we read the tribunal's decision, and giving effect to it as best we might, we think that the tribunal must have been persuaded that Ms Lalgie had effectively been forced out so that she was constructively dismissed. It is not the function of the EAT to seek to find fault with a tribunal decision. Ms Lalgie resigned after she had been served with notice of dismissal and it was open to the tribunal to make a finding of constructive dismissal in those circumstances.
26. In relation to race discrimination, the majority consider that the finding made by the tribunal that the persistent use of a defective process was designed to weed out the black staff was unsupported, if not contradicted by the evidence produced by both parties. The statistical evidence referred to by Ms Slade shows conclusively, in our view, that race cannot have played any part in the decision making process. Further, it is clear that the tribunal overlooked the fact that one of the three SUMs was black, thus destroying the comparators in relation to Ms Howe and Mr Phanse. In the end, there was no evidence before the tribunal to justify the finding of unlawful discrimination on grounds of race and the appeal must be allowed on that point.
27. The minority dissents in this case solely in relation to the remedy set out in paragraphs 28 and 31 of this judgment.
28. The complexity of this case is illustrated by the fact that it concerns eight separate, individual claims heard simultaneously by the Industrial Tribunal (over nine days), and that the EAT decided to list this case in front of the same members immediately before another case from Brent (Ms P Stephen v London Borough of Brent – EAT/46/97). It is clear that, for whatever reason (including the acknowledged difficulties of budgetary constraints at that time on all local authorities) there was a series of cases arising in Brent that were causing concern for the administration of justice before Industrial Tribunals.
29. Briefly stated, the minority's concern is that the actions complained of took place in 1995, the Industrial Tribunal proceedings were in 1997, the EAT heard the appeal over one day in 1999, and it is now proposed to substitute our view without hearing the full facts almost five years after the start of that process. The adage that justice delayed is justice denied applies just as much to the applicants before the Industrial Tribunal as it does to the appellants before the EAT. The minority agrees that justice to the appellant means that the judgment of the Industrial Tribunal is not safe. However, there was not a great weight of argument before the EAT on the submission by Brent that substitution was appropriate – despite the fact that (somewhat strangely, and in line with the Industrial Tribunal) none of the eight applicants appeared before us. But neither did we hear the four senior members of staff giving evidence for Brent in front of the Industrial Tribunal, nor did we have at least 450 of the 600 pages of evidence that was before the Tribunal. In the minority's view, substitution by the EAT of its view in this case for that of the Industrial Tribunal will substitute an injustice to the applicants for an injustice to Brent.
30. For the sake of clarity, the statistical evidence and other argument adduced by Ms Slade led to the minority to conclude (in line with the majority) that the Industrial Tribunal judgment could not be upheld; but, in the minority's view and in the light of the other evidence adduced at the Industrial Tribunal, that was not sufficient to justify substitution. It is not correct to say that there was "no" other evidence before the Industrial Tribunal to justify the finding. In relation to the claim for unfair dismissal, it was noted that Brent did persist in the use of a defective procedure. In relation to race discrimination, it was open to the Industrial Tribunal to conclude that the reason for such persistence was to ensure the removal of black staff whom management considered difficult – whether the supposed discrimination was universal, widespread or just limited to the specific applicants. The inference of discrimination on grounds of race was open to the Industrial Tribunal even if not "proved" exclusively by the statistics.
31. The minority concludes that, although the appellants have shown that the decision as drafted is unsafe, they have not shown (as they must if we are to substitute our view for that of the Industrial Tribunal) that this decision was perverse, and that it is therefore not open to this Tribunal to substitute its own view for that of the Industrial Tribunal.
32. Ideally – in view of the time delay and the volume of documentation – the best course of action would be to refer back to the same Tribunal with an instruction that they reach clear conclusions in relation to such points. However, it is in the knowledge of the EAT that at least one member of the original Industrial Tribunal is not longer an Employment Tribunal member. The minority believes that, in this case, the EAT should take the exceptional step of referring its judgment initially to the parties for them to consider the position (possibly in conjunction with ACAS) in a strictly limited time-scale. It would be relevant for both sides (but for the applicants in particular) to note that the minority has no disagreement with the earlier parts of the majority judgment. In the likely event that no agreement is possible, all papers should then be referred to a newly-constituted Employment Tribunal, with precise guidance from the EAT on the points requiring rulings of fact and the correct approach to be adopted in the new hearing. Again ideally, the listing office in London (North) should be asked to give the case a priority listing under the Regional Chairman, and there should be a limited time-scale in which professional counsel on both sides could address these specific points. It should also be open to the parties to ask for notes of the original Chairman on those points.
33. Accordingly the appeal is allowed to the extent that the third decision of the tribunal that all the applicants were the subject of race discrimination is quashed and we substitute a finding that the applications alleging discrimination on grounds of race are dismissed.