United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR R LANCASTER (Partner) Chase Response Rose House 109A South End Croydon Surrey CRO 1BG


 


JUDGE D PUGSLEY

1. This is a preliminary application the purpose of which is to identify areas of law. We wish to pay tribute to the obvious care with which the representative of Chase Response has prepared written submissions for us which, because we can all read, we have actually taken as read, and, if we may say so, set out his concerns in an appropriate way.
2. This is a case in which the Tribunal found the Applicant was unfairly dismissed and was entitled to an award of £3,378. The extended reasons are somewhat skeletal. The Tribunal accepted at paragraph 4.(ii) that there was a financial problem for the company, profits were falling and there was a redundancy situation. They accepted the evidence of Mr Lancaster that the outbound sales had been a source of concern for some time, and that work was falling off. They accepted the Applicant was dismissed for redundancy, and they accepted, of course, that that was the potentially fair reason for dismissal. They then go on, quite rightly, to direct themselves according to the provisions of Section 98(4).
3. The Tribunal then said this:

"The issue of the fairness of the dismissal involves consideration of whether the Applicant or someone else should have been selected; whether there was any or any sufficient consultation and whether she should have been offered alternative work."

If we may respectfully say so, that is a somewhat misleading summation of the law, for reasons which we will give in a moment.

4. The Tribunal then go on to deal with the pool for selection. We do feel, if we may say so, that that could have been rather amplified. What they say is this:

"The Applicant feels that the telesales reps in the inbound and outbound departments should have been put in the pool of those to be considered for redundancy selection. We have heard evidence from Mr Lancaster and Mrs Barrett on the skills required. Mrs Barrett explained that most of the team had worked for 2½ - 3 years after receiving some 6 months learning on the product. It was essentially customer care which involved quite different skills from the selling skills required for outbound calls. Mrs Barrett felt that the Applicant's personality was more suited to the latter and it would have been difficult for her to change. We accept the Respondents' evidence on this issue. We do not accept that the Applicant had the ability to do Mrs Barrett's job or Stephen Law's. They were more senior roles and it was not appropriate for them to go into the selection pool. We therefore find that the Applicant was fairly selected."

We may pause there. We have some doubt as to how clear it is as to what the pool of selection was identified by the Tribunal as being.

5. The Tribunal then went on to say this at paragraph 4(v):

"Mr Lancaster's evidence was that concerns over the outbound department were discussed at the annual general meeting on 1 October. He had not discussed the Applicant's possible redundancy then as he had hoped things would improve. However, the accounts revealed a serious downturn. He and his partner Chris Cuffe had discussions over the weekend of 23/24 October and decided that the outbound department would need to be reorganised. They decided to split the Applicant's duties among remaining staff and the new telemarketing manager and make the Applicant redundant. On Tuesday 26 he and Sarah Barrett met the Applicant. Mr Lancaster's note made after the meeting records that he explained the new structure and why it was necessary, told the Applicant she was redundant with immediate effect and handed her a letter of dismissal. He then offered her consultation. The Applicant's evidence which we accept was that she was stunned and upset. If she had spoken she would have cried. She did not accept the offer of consultation. In R v British Coal Corporation [1994] IRLR 72 Lord Justice Glidewell said that fair consultation meant consultation when proposals were still at the formative stage, adequate information, adequate time in which to respond and conscientious consideration of the response. One of the purposes of consultation is to give the employer an opportunity of considering other vacancies within the organisation which the employer might have assumed would have been unacceptable. The Applicant's evidence was that she would have been prepared to accept less salary as a telesales rep rather than have no job. Mr Lancaster's evidence was that no jobs were available but the tribunal considers that had the matter been discussed prior to her dismissal something might have been found. Consultation after dismissal is not fair consultation.

5 We find the Applicant was not consulted as a reasonable employer should have consulted in accordance with the guidelines laid down in Williams & Compare Maxam Ltd [1982] ICR 156 and her dismissal was unfair for that reason."

6. The Tribunal then go on at paragraph 6 to summarise the matter as to compensation and say this:

"6 Because of our finding on this issue the question of alternative employment does not arise. The recoupment provisions do not apply."

They then set out the basic compensatory awards, and say:

"No future loss because not available for work"

And they then say :

"Deduct earnings 6/12/99 to 17/1/2000 (6 weeks ) at £16,000 a year"

and they deduct the weekly earnings.

7. The grounds of appeal raise a number of issues. It is right to say an application for dismissal and for review was dismissed by the Chairman. We find this a very troubling case, we make no secret of that at all, because we think the decision is skeletal in form. What the grounds of appeal say is that the Tribunal should have considered the issue of the fact the Applicant obtained full time employment providing a greater salary, and they ask us to consider the case of Whelan v Richardson [1989] IRLR114 that in such circumstances, the loss attributed to the action taken by the Respondent Employer ceases when there is a new job.
8. Secondly they say that the Tribunal did not consider

" the invalidity of the Applicant, which the Tribunal found to be a continuing event, was a second supervening event, and breaking the chain of causation"

and therefore it should have ceased on the day the Invalidity Benefit started, not on the date of the Tribunal hearing, and in the alternative their ground of appeal is this;

"in view of the Tribunal's findings that there was a genuine redundancy and that the Applicant was fairly selected and the Respondents evidence that there were no alternative jobs available and that consultation in these circumstances would have been futile. The Tribunal in reaching their conclusion that had prior consultation taken place "something might have been found" should have considered whether the Respondent had acted reasonably on the basis of the facts then known to it in such a manner as to justify a reduction in the amount of the award in line with the principles laid down in the House of Lords case of Polkey v AE Dayton Services Ltd [1998] ICR 142"

9. Buried in that third ground of appeal, subsumed within it, are really two issues. Is this a rare case in which a reasonable employer was entitled to take the view that consultation was futile and therefore no consultation was necessary, and a dismissal without consultation could be fair?
10. We give leave on all those three grounds and note that paragraph 3 has really two grounds attached to it. On the issue of whether this is one of those exceptional cases where consultation is not necessary, we do give leave, but we are bound to say that we consider that is not the strongest grounds.
11. But as far as the second part, whether there should have been a Polkey deduction on the basis that a job might have been found, that troubles us. We are particularly troubled by the conclusion of the Tribunal that had prior consultation taken place, something might have been found, as to what the evidential basis was for that proposition and why it is couched in that language, the Tribunal did not go on to consider a percentage award.
12. We do say that as far as the case of Whelan v Richardson is concerned, that although that is an issue, it is right to say that the Court of Appeal in Denton Flynn & Partners - an unreported decision, but it is cited in Harvey at 268501 does suggest that the Tribunal should consider whether or not the obtaining of permanent employment can break the chain of causation. In this case there is no consideration at all of the issue, and we think that that ground is arguable.
13. So if I may sum up, we accept there is an arguable case on all three grounds of appeal. We read paragraph 3 as containing two grounds of appeal and we will give leave for that to be clearly stated in a ground of appeal and we direct that there be a Chairman's Note as to all evidence given by the Respondents as to what jobs were available and all evidence which is the evidential basis of their finding that something might have been found.
14. We do emphasise, if we may, to the Applicant, that the only test we have to decide at the moment, is whether or not there is an arguable case. We have only heard one side and we would not wish Mr Lancaster to assume that because we have clearly found that there are arguable issues, that means those arguments will succeed.