United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J SHAMMAH Solicitor Shammah Nicholls 78 Gartside Street Manchester M3 3EL


 


JUDGE CLARK

1. This is an appeal by the Appellant before the Manchester Employment Tribunal, Mr Salmon, against that Employment Tribunal's decision, promulgated with extended reasons on 5 October 1999, dismissing his claims of unfair dismissal and breach of contract

Background

2. The Appellant was employed by the Respondent, YMCA Training Ltd from October 1986 until, so the Employment Tribunal found, he was dismissed by reason of redundancy on 22 May 1998. He was effectively the manager of the Respondent's training branch at Hadfield House, Stockport, although between 1990 and March 1998 he held the title of Area Manager, then reverting to the title of Manager. He was born on 10 February 1939 and was thus aged 59 years at the effective date of termination of his contract of employment.
3. The Employment Tribunal set out their findings of fact in considerable detail in their reasons. In summary, reductions in funding meant that by March 1998 it appeared to the Respondent's director responsible for training centres in the North West of England, Carmilla Guereca, that in order to ensure the financial viability of the Stockport Centre it was necessary to reduce the senior level of management there. There were, in her view, 2 candidates, the Appellant and Mrs Beardsell. A period of consultation followed. The Appellant was offered alternative employment in the same grade and at the same salary at Warrington; an offer which he declined. He was dismissed on grounds of redundancy on 22 May 1998, receiving a package totalling £26,691.10 to include pay in lieu of notice, a redundancy payment and an ex gratia payment of £11,746.24. Thereafter he continued to provide his services to the Respondent at Stockport through the medium of a limited company which he formed, Astra (Stockport) Ltd.
4. There was an express term of his contract of employment with the Respondent, contained in clause 6 of appendix 3 to the Employee's Handbook, in these terms:

"Where a member of staff is within 3 years of normal retirement age, then the employer will pay the employees pension fund the necessary amount to ensure that the employee receives the full amount of pension to which they would have been entitled if working to retirement age."

Because he had not reached the age of 60 on the date of his dismissal by reason of redundancy, the normal retiring age being 63 in the employment, he did not receive enhancement to his pension. Such enhancement would have cost the Respondent a lump sum of £31,353.90 and resulted in his pension being increased by £1,332.06 per annum.

5. Based on their findings of fact the Employment Tribunal were required to and did resolve the following issues in this way:

1 Was the Appellant continuously employed by the Respondent after 22 May 1998 by virtue of his work for the Respondent through Astra? The Employment Tribunal found that he was not. The employment was terminated on 22 May; he did not return to work as an employee. His services were provided to the Respondent through Astra. There is no appeal against that finding.

2 Was the Appellant dismissed by reason of redundancy? The Employment Tribunal found that he was. In the grounds of appeal submitted with the Notice of Appeal, dated 16 November 1999, no point was taken on that particular finding. During the course of argument this morning, Mr Shammah, at one stage, appeared to seek to challenge that finding, but on reflection abandoned that course.

3 Was the dismissal fair or unfair? The Employment Tribunal found that the Respondent entered into adequate and genuine consultation with the Appellant over his redundancy; reasonable steps were taken to try to find him alternative employment. Further, considering the respective positions of the Appellant and Mrs Beardsell, who formed the selection pool chosen by the Respondent, the Appellant was fairly selected for redundancy.

Finally, the Employment Tribunal rejected the Appellant's case on the facts that he had been selected for redundancy by Mrs Guereca to save the Respondent the cost of enhancing his pension. They accepted Mrs Guereca's evidence that she was unaware of the contractual provision for enhanced pension after age 60 when initially selecting the Appellant for redundancy and they further found as a fact, that payment of enhancement pension was not a factor in his selection for redundancy.

4 Was there to be implied into he Appellant's contract of employment a term that the Respondent would not unreasonably terminate the contract of employment so as to deprive the Appellant of the benefit of the enhanced pension provision? If so, was the Respondent in breach of that term, entitling the Appellant to damages representing the lump sum cost of enhancement?

On this question the Employment Tribunal considered the judgment of Sedley J, in Aspden –v- Webbs Poultry (1996) IRLR 521, and the Scottish Court of Session decision in Adin –v- Sedco (1997) IRLR 281, cases concerned with whether there was to be implied into the contract of employment a term that the employer would not dismiss the employee when off work due to sickness so as to deprive him of the benefit of a health insurance income protection plan carried by the employer. In both cases the court answered that question in the affirmative. By analogy it was argued on behalf of this Appellant below that a similar term fell to be implied here in relation to the pension enhancement provision in the contract. The Employment Tribunal rejected that argument, drawing a distinction between the health insurance cases, where at the date of the dismissal the employer was seeing to depriving the employee of a benefit already accrued, and the present case, where no potential benefit arose under the contract of employment until age 60.

Accordingly all claims were dismissed.

6. In this appeal Mr Shammah accepts that his challenge to the finding that there was no implied term as indicated above, depends in the first instance on whether or not he can successfully challenge the Employment Tribunal finding that the Appellant was fairly selected for redundancy. As to that, he has taken us through the Employment Tribunal's findings of fact as to the various offers made to Mrs Beardsell and that made to the Appellant during the consultation process, which resulted in the Appellant being selected for dismissal rather than Mrs Beardsell.
7. The Employment Tribunal's conclusion on the question of selection is set out at paragraph 10 of their reasons, where they say this:

"The only other issue was whether the applicant was unfairly selected, and clearly the 2 persons concerned were the applicant and Mrs Beardsell the applicant considering that he might have been kept on as part-time manager instead of Mrs Beardsell. In fact, Mrs Beardsell was hardly in the post as part-time manager at all and she was appointed only, in effect, to close the branch down as training ceased and a further contract with the Training Enterprise Counsel was refused, therefore, there was really no question of Mrs Beardsell being given a position which the applicant might have taken. Further, in the final position which Mrs Beardsell obtained as the National Systems Manager full-time, this was not something the applicant could have done, which he accepted in evidence to the Tribunal himself, and therefore, again the Tribunal could not see that there was any question of this being work which should have been offered to him rather than to Mrs Beardsell."

Bearing in mind the Employment Tribunal's earlier findings of fact we can find nothing exceptional about that conclusion on the question of selection. It therefore follows that we reject the Appellant's argument on selection in this appeal, our jurisdiction being limited to correcting errors of law. It also follows, in view of the way in which Mr Salmon puts his case today, it has not been strictly necessary for us to go on to consider the Employment Tribunal's finding that there was no implied term as submitted on behalf of the Appellant. However, for completeness, we should indicate that we entirely accept the distinction which the Employment Tribunal made in paragraph 13 of their reasons between the circumstances in this case and those which applied in the cases of Adin and Aspden. It seems to us that they were quite entitled to conclude that no such implied term existed in this Appellant's contract of employment. In those circumstances, at this preliminary hearing, having found there are no arguable points of law to go forward to a full hearing, the appeal must be dismissed.