United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS E SLADE QC (of Counsel) Instructed By: Middlesbrough Borough Council Head of Legal Services PO Box 99A Town Hall Middlesbrough TS1 2QQ
For the Respondents	MR R COHEN (of Counsel) Instructed By: Messrs Morrish & Co Solicitors First Floor Oxford House Oxford Row Leeds LS1 3BE And UNISON 1 Mabledon Place London WC1H 9AJ


 


JUDGE PETER CLARK:

1. This is an appeal by the employer, Middlesborough Borough Council (the Council) against a decision of the Newcastle upon Tyne Employment Tribunal, chaired by Mr J.R. Barton, promulgated with Extended Reasons on 27 September 1999, upholding the complaints of two recognised independent trade unions, (1) Transport & General Workers Union (T & G) and (2) UNISON, brought under section 189 of the Trade Union and Labour Relations Consolidation Act 1992 (the 1992 Act) that the Council had failed to consult with those unions about ways of avoiding dismissals for redundancy as required by section 188(2)(a) of the 1992 Act. That decision was reached after a hearing lasting 11 days, followed by two further days of deliberations by the Tribunal in private.

Background

2. The Council was one of four unitary authorities created on the abolition of Cleveland County Council on 1 April 1996, following a local government reorganisation.
3. From birth the Council had serious financial problems. In November 1997 the District Auditor identified a need for a thorough assessment of the number and mix of technical officers in the Economic Development and Transportation Department (ED & T). In essence, the professional staff in that department were too expensive.
4. Meanwhile, during 1997, the Council engaged a firm of external management consultants to review the Council's management structure. They recommended that the existing structure of a chief executive and 12 directors of service departments be replaced by a managing director and four corporate directors who together would form the corporate management team (CMT). The recommendation was accepted. Mr John Foster was appointed managing director on 16 December 1997 and took up his duties on 2 February 1998. During that period he was briefed as to the Council's financial position. It was apparent to him, as he told the Tribunal, that there were financial problems that needed to be addressed, but no consensus within the Council as to how to deal with them.
5. In February 1998 it appeared that there was a relevant shortfall of £1.3 million. At the end of April 1998 it was anticipated that the deficit would rise to £2 million by the end of the financial year 1998/9. The Council's financial year ran from 1 April.
6. The CMT met on 16 June 1998. Minutes of that meeting were disclosed to the unions during these proceedings. They show (item 6.7) that budgetary concerns had not been addressed by the management of ED & T. CMT, Mr Foster said, believed that the problem must be resolved through savings made in reducing the number of employees in the affected units. The problems created by ED & T must not spill into other areas of activity. Mr Foster explained to management colleagues that the staff reduction exercise should consider staff from all levels within the units involved. He confirmed that the leader and deputy leader had been briefed in outline on CMT's proposals. Mr Gould, Corporate Director of Corporate Services, pointed out the Council's legal obligation to brief the trade unions on CMT's proposals.
7. Word leaked out. On 19 June T & G issued a newsletter to members headed "ED & T – Downsizing shock", claiming that within the next few days the Council intended to issue all ED & T employees with a 90 day redundancy notice with a view to achieving a cut in department staffing levels of around 50 per cent by the end of the 90 day period.
8. At the end of that day Mr Clark, of T & G, was summoned to a meeting with Mr Foster. The two accounts of that meeting differed. The Tribunal preferred that of Mr Clark, which was to the effect that he found Mr Foster in an apparently agitated and angry state, waving the union newsletter, stabbing it and asking who had given him the information on job losses and why the newsletter had been issued, causing Mr Foster to produce his own memorandum to staff, headed "a message from the Managing Director". His message there was that it was not correct to say that all ED & T employees were going to receive notice of redundancy. There would be a meeting with full time officials and branch officers on Monday where the position would be set out fully and openly.
9. A meeting did take place on 22 June, attended by Mr Foster and management colleagues and representatives of the two trade unions. Mr Foster referred to the overspend of nearly £2 million, which could only be corrected at the cost of salaries.
10. A further consultation meeting took place on 23 June. Mr Foster issued a briefing note referring to action on the overspend which would involve reducing the number of employees by between 100 and 150.
11. On 24 June the form HR1 was sent to the trade unions, indicating that up to 150 employees out of a strength of 502 would be made redundant as at 30 September 1998.
12. On 25 June a further consultation meeting was held, at which the trade union representatives were given a draft report which was to go to the Council's special Co-ordinating Committee (the Committee). That draft report read, at paragraph 8.3/4:

"Trade Union consultation must take place with a statutory framework of information being provided by the employer. Any response by the trade unions on proposals to mitigate the potential redundancies must be considered properly by the employer. Criteria need to be established by which employees are selected for redundancy."

13. The final version of that draft report was forwarded to the trade unions on 30 June. It contained a number of amendments to the original draft and set out the following key dates; deadline for issuing form HR1, 2 July; individual redundancy notices, 8 July; termination of employment date, 30 September.
14. The unions felt that there was insufficient opportunity to respond and said so at the next consultation meeting held on 2 July. At 10 am that day Mr Brider of T & G addressed a group of Labour Councillors, suggesting that if the trade unions were allowed to consider all options over a 90 day consultation period compulsory redundancies might be avoided or at least reduced. After his address he met one of his union's members who worked in the print room and who gave him a copy leaflet. It was a briefing note to employees from Mr Foster dated 3 July which began:

"A strategy which will provide financial stability and ensure that maximum resources are targeted at front line services was agreed by Middlesborough Councillors yesterday."

The strategy … will involve redundancy for up to 150 staff in … ED & T."

Mr Foster is quoted as saying, among other things;

"This is a difficult decision. But it is the only solution to the grave situation we are in … I regret the process is painful, but there are no other reasonable options."

15. Mr Brider then went to see the Council Leader and two other Councillors. He told them that the whole idea of consultation was a sham and the fact that the Managing Director had already taken the decision which was about to be circulated to the whole workforce of 8,600 Council employees proved that that was the case. He asserted that a predetermined position had already been taken.
16. The Committee duly met on the 2 July to consider the CMT report. They recommended:

"1. That the staffing and other reductions described in the relevant paragraphs of the report be approved and that it be noted that these may be subject to final amendment as a result of the continuing consultation process and … that CMT be delegated the necessary powers to make such amendments.

5. That the redundancy of up to 150 employees in the former ED & T Department be approved and that the necessary powers to implement this programme be delegated to CMT.

8. That the Managing Director be authorised to consult and agree the criteria and arrangements for the selection of staff to be made redundant."

17. On 3 July notices of dismissal were issued to 345 out of the 502 staff in the former ED & T Department, informing them, with regret, that their employment will be terminated by reason of redundancy on 30 September 1998.
18. On 7 July T & G presented an Originating Application to the Employment Tribunal. The complaint related to the duty of the employer to consult under section 188 of the 1992 Act. Mr Brider described his meeting with Councillors on 2 July as a sham, the decision to proceed to redundancy dismissals having already been taken. He attached a copy of the Managing Director's briefing note to all employees dated 3 July and printed before the committee meeting held on 2 July and the standard form redundancy notice issued on 3 July. That was followed by a similar complaint presented by UNISON on 16 July.
19. By their Notices of Appearance the Council resisted the claims. They averred that they had always intended to negotiate with the trade unions in good faith as required by section 188 and continued so to do. They denied the suggestion that they had engaged in a sham. Alternatively, they contended that if there had been any failure to comply with section 188, that was due to special circumstances (section 188(7)), namely the need to proceed to consultation on the issue of redundancies in late June 1998 due to the very serious financial situation facing the Council, and withdraw from consultation by the unions on 15 July.
20. Notwithstanding the pending Tribunal proceedings discussions continued between the Council and the Unions. In particular, in a document dated 20 July T & G submitted two reasoned proposals for avoiding compulsory redundancies; (1) rectifying the budget shortfall by taking funds from the Council's balance and making savings elsewhere, with a view to making good the shortfall the following year, or (2) addressing the shortfall in the current financial year by making non-staff savings and seeking voluntary redundancies. By an equally reasoned response in writing dated 30 July Mr Foster rejected those proposals. It was the view of CMT that option (1) did not address the need to balance the budget in the current year, as T & G recognised; option (2) did not recognise that the depth of the problem required redundancies. Further correspondence ensued without agreement. On 6 August Mr Brider wrote to Mr Foster complaining that they were always going to agree to disagree, particularly when the Council's position was predetermined.
21. The failure to agree over the question of avoiding redundancies did not prevent, so the Tribunal found (reasons, paragraph 12), genuine consultation taking place between the Council and Unions so far as the means of selection for redundancy and practical arrangements were concerned. However, the Tribunal also there found that the alternatives to redundancy put forward by the GMB (sic T & G) were rejected because of a settled view on the part of the management team backed by the authority of the Committee that there was to be only one outcome; that, we infer, was compulsory redundancies.
22. The factual basis for that latter finding is contained in paragraph 4(oo) of the Tribunal's reasons where they say this:

"4(oo) The union witnesses who are experienced trade union officers all spoke of their feelings that from the outset they were given the impression by council officers that the council had a predetermined decision that major redundancies were the only option available and that furthermore they would take place on 30 September 1998. In the early stages both Mr Murray, in his correspondence and Mr Brider by his actions showed alarm and protested at the lack of proper negotiation and consultation prior to that decision in principal being made. The Tribunal is satisfied that Mr Foster in particular and, once he had discussed it with the CMT, the remainder of that team held such a view and took steps by consulting with the Leader of the Council prior to the meeting of the Co-ordinating Subcommittee on 2 July 1998 to ensure that a decision confirming such a view would be made. The Tribunal is satisfied that the decision for major redundancies in principle was made at the co-ordinating committee on 2 July 1998 and that it was not preceded in any way by a decision first of all to consult on the principle but that rather the decision concerning consultation carried out at that meeting was a decision to consult on implementation rather than the principle. While the Tribunal was unable to conclude that negotiation and consultation did not take place at all it is satisfied that the events described in the preceding findings of fact go to demonstrate that negotiation and consultation were about precise numbers, selection criteria, timetable and practical arrangements rather than about the principle of redundancy itself. While T & GWU did put forward alternative proposals these were only considered against the backdrop of the decision having already been made and implementation delegated to officers who were clearly of the view from the outset that this was the only solution to the problem."

23. At paragraph 11 the tribunal add this:

"We have considerable sympathy with Mr Brider's accusation that the process of consultation in which he was allowed to take part in addressing the council meeting [on 2 July] before the decision was made was a sham. The decision had already been made by the management team and 'squared' politically with the Leader of the Council in such a way as to lead to only one inevitable conclusion."

24. On 30 September 1998 104 of the 345 notices of redundancy originally issued on 3 July took effect. Those employees were then dismissed by reason of redundancy.

The statutory framework

25. The original statutory obligation on employers to consult with recognised unions over redundancy was contained in section 99 Employment Protection Act 1975 (EPA), designed to implement the first EC Directive on Collective Redundancies (75/129/EEC). Subsequently that provision was re-enacted in section 188 of the 1992 Act and then amended, first by TURERA 1993 and later by supplementary regulations (S.I. 1995/2587) designed to head off enforcement proceedings brought in EC Commission v UK [1994] ICR 664, ECJ. Before turning to the relevant statutory provisions applicable in 1998, we note that subsequent amendments have been effected by further regulations (S.I. 1999/1925), applying to dismissals on or after 1 November 1999.
26. At the relevant time, by

"Section 188

1(1) Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be so dismissed.

(1A) the consultation shall begin in good time and in any event –

(a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 90 days,

…

before the first of the dismissals takes effect.

…

(2) The consultation shall include consultation about ways of

(a) avoiding the dismissals,

(b) reducing the numbers of employees to be dismissed, and

(c) mitigating the consequences of the dismissals,

and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives.

…

(7) If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection (1A), (2) or (4), the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances.

Section 189

(1) Where an employer has failed to comply with any requirement of section 188, a complaint may be presented to an industrial tribunal on that ground –

…

(b) in the case of a failure relating to representatives of a trade union, by the trade union,

…

(2) If the tribunal finds the complaint well-founded it shall make a declaration to that effect and may also make a protective award."

Section 195 defines "dismissal as redundant".

Section 298 provides:

"In this Act …

'dismiss', 'dismissals' and 'effective date of termination', in relation to an employee, shall be construed in accordance with Part X of the Employment Rights Act 1996 [ERA]."

Part X of ERA is headed "Unfair Dismissal". Redundancy Payments are dealt with in Part X1.

Under Part X, by

Section 95:

"Circumstances in which an employee is dismissed

(1) for the purposes of this Part an employee is dismissed by his employer … only if -

(a) the contract under which he is employed is terminated by the employer (whether with or without notice)"

(b) and (c), fixed term contracts and 'constructive dismissal' are not relevant for present purposes].

"Section 97 Effective date of termination (EDT)

(1)… in this Part 'the effective date of termination' -

(a) in relation to an employee whose contract of employment is terminated by notice, whether given by his employer or the employee, means the date on which the term expires."

"Section 111 Complaints to employment tribunal

(1) A complaint may be presented to an employment tribunal against an employer by any person that he was unfairly dismissed by the employer.

…

(3) Where a dismissal is with notice, an employment tribunal shall consider a complaint under this section if it is presented after the notice is given but before the effective date of termination.

(4) In relation to a complaint which is presented as mentioned in subsection (3), the provisions of this Act, so far as they relate to unfair dismissal, have effect as if –

(a) references to a complaint by a person that he was unfairly dismissed by his employer included references to a complaint by a person that his employer has given him notice in such circumstances that he will be unfairly dismissed when the notice expires."

27. Under the EPA, section 126 "dismiss" was defined by reference to paragraph 5 of schedule 1 to the Trade Union Labour Relations Act 1974 (TULRA). Paragraph 5(1) defined "dismissal" in the same way as section 95(1)(a) ERA.

Section 188 Consultation

A number of features merit attention in the context of this case:

(1) Consultation

An employer is not required, under section 188, to consult with the recognised unions about the reasons for the proposed redundancies, in the present case financial reasons. R v British Coal Corporation ex parte Vardy and ex p Price [1993] ICR 720.

28. The topics for consultation include those specified in section 188(2). As to those, consultation must be genuine and meaningful. In the later judgment of the Divisional Court in ex p Price [1994] IRLR 72, Glidewell LJ said, paragraph 24 – 25;

"It is axiomatic that the process of consultation is not one in which the consultor is obliged to adopt any or all of the views expressed by the person or body whom he is consulting. I would respectfully adopt the test proposed by Hodgson J in R v Gwent County Council ex parte Bryant, reported, as far as I know, only at [1988] Crown Office Digest p19, when he said:

'Fair consultation means:

(a) consultation when the proposals are still at a formative stage;

(b) adequate information on which to respond;

(c) adequate time in which to respond;

(d) conscientious consideration by an authority of the response to consultation.'

Another way of putting the point more shortly is that fair consultation involves giving the body consulted a fair and proper opportunity to understand fully the matters about which it is being consulted, and to express its views on those subjects, with the consultor thereafter considering those views properly and genuinely."

29. That formula was adopted by the EAT in the context of a redundancy unfair dismissal claim in Rowell v Hubbard Group Services Ltd [1995] IRLR 195, paragraph 15; followed in Mugford v Midland Bank Plc [1997] ICR 399, and further accepted by the Court of Session in King v Eaton Ltd [1996] IRLR 199, paragraph 22.
30. The need for meaningful consultation at the proposal stage has also been recognised in EAT decisions on section 99 EPA. In National Union of Teachers v Avon County Council [1978] ICR 626, the education committee of the employer council met on 28 October 1976 and accepted a recommendation that certain teachers should be dismissed on grounds of redundancy. Notices of dismissal were despatched the same day, those notices to take effect on 31 December 1976. On 29 October the Council wrote to the recognised union seeking consultation. A complaint brought by the union under section 99 EPA was dismissed by an Industrial Tribunal on the basis that there was nothing in section 99 which precluded the sending of notices of dismissal before consultation began. On appeal, Phillips J identified the sole question for determination as whether it is ever a compliance with section 99 to begin consultation after rather than before dismissing the employee for redundancy. He continued (629E-F):

"Section 99(1) is talking about an employer proposing to dismiss, and though dismiss may be ambiguous and mean either the giving of notice or the effective bringing into effect of that notice by its expiry, it seems to us that in the context it is the former which is in contemplation."

31. There is no indication from the report that the Court's attention was drawn to section 126 EPA, the meaning of "dismiss" by reference to paragraph 5(1) of schedule 1 to TULRA.
32. The appeal was allowed and the case remitted to the Industrial Tribunal for rehearing. There was no specific direction in the judgment that the case be remitted to a fresh tribunal for rehearing, although the headnote, presumably approved by the Judge, refers to the case being remitted to an Industrial Tribunal for rehearing.
33. In E. Green & Son (Castings) Ltd v ASTMS [1984] ICR 352 redundancy notices were issued on the same day that consultations with the unions began. Nolan J observed (359H-360A):

"In the present case … we think it unlikely that the tribunal would have accepted the assertion of Castings that consultations began in any sense of the word on 22 October 1982. Even if the tribunal did accept that, however, they would be fully entitled in our judgment to conclude that no 'meaningful' consultations took place before the notices of dismissal went out, and that accordingly for this reason alone Castings failed to comply with the requirements of section 99 …"

34. In T & GWU v Ledbury Preserves (1928) Ltd [1985] IRLR 412, an Industrial Tribunal found that in circumstances where the first consultation meeting with the union took place half an hour before notices of redundancy dismissal were issued to employees, the obligation to consult under section 99 had been met. On appeal that decision was set aside and the case remitted for rehearing before a different tribunal. In the course of his judgment, Peter Gibson J recorded a submission made by Miss Elizabeth Slade, then appearing for the applicant union, by reference to Avon and Green, that consultation must be meaningful and that the relevant consultation is consultation before the dismissal notices are sent out (paragraph 13). At paragraph 16 his Lordship said:

"It seems to us that these authorities are persuasive in support of the proposition that there must be sufficient meaningful consultation before notices of dismissal are sent out. The consultation must not be a sham exercise."

35. Finally, in Hough v Leyland Daf Ltd [1991] ICR 696, the employer initiated a report on the possibility of contracting out their security arrangements at three of their sites in late 1996. The report, recommending contracting out, was produced in January 1997. Enquiries were made of available security firms and in May 1987 a further report firmly recommended that course. Line managers were consulted in August 1987 and at the stage where a contract could be offered to a security firm in October, with a view to a changeover to contractors during the Christmas shutdown, the employer informed the union of its intentions. Thereafter meetings took place between employer and unions, but it was accepted on both sides that the question whether there would be redundancies was effectively decided and not open for discussion. On 31 December 1987 29 members of security staff were made redundant. A complaint under section 99 EPA was upheld by an Industrial Tribunal. They found that consultation with the union ought to have begun in May 1987. The employer's appeal against that decision was dismissed. In the course of his judgment Knox J said (705 G – 706 B):

"We were also pressed on behalf of the employees with the argument that the consultations which the section requires must be meaningful: compare E. Green & Son (Castings) Ltd v Association of Scientific, Technical and Managerial Staffs [1984] ICR 352, 359H and Transport and General Workers' Union v Ledbury Preserves (1928) Ltd [1985] IRLR 412, and that the quality of the consultation formed a significant factor in leading to the industrial tribunal's decision that Leyland were in breach of section 99 as well as the timing of the consultation. On the other hand for Leyland it was submitted that although the consultation has to be genuine it does not follow as a matter of law that an employer who embarks on consultation believing that he has an unanswerable case has failed in his statutory obligation to consult. In principle we accept this latter submission but it does not, in our judgment, go to the point which we have to decide which is whether the industrial tribunal erred in law in reaching the decision that Leyland were in breach of section 99.

In our view, they asked themselves the right question that is to say 'when did Leyland propose to dismiss the security staff as redundant?' Although they did in our view make two discernible errors in the course of their decision, neither of them affects the validity of the answer which they gave to that question."

36. Those errors were, first a finding of fact, found by the EAT to be immaterial, which was unsupported by any evidence; the second was a self-direction by the tribunal that it was not open to them to construe section 99 in line with EC Directive 75/129/ECC.

(2) Timing

37. Section 188 requires that where an employer is proposing to dismiss as redundant 20 or more employees consultation shall begin in good time and in any event, in the case of 100 or more employees, at least 90 days before the first dismissal takes place.
38. We have earlier mentioned the passing observation of Phillips J in Avon, that for the purposes of section 99 EPA "dismiss" refers to the giving of notice and not its expiry. That observation was not necessary for the decision in that case and appears to have been made without the benefit of full argument. At all events we are satisfied, and it is common ground between counsel appearing before us, that it is not correct.
39. The definition of dismissal is clearly identified under what was section 126 EPA by reference to paragraph 5(1) of schedule 1 to TULRA; now section 298 of the 1992 Act, referring to Part X ERA, particularly sections 95(1) and 97(1). Dismissal, in the case of dismissal with notice, takes place on the expiry of that notice. That also fits in with the expression in section 188(1A), "before the first of the dismissals takes effect".
40. For completeness, and by analogy, in a claim of unfair dismissal by reason of redundancy, the question of reasonableness must be judged at the effective date of termination, not simply when notice of dismissal is given. Stacey v Babcock Power Ltd [1986] ICR 221, approved by the Court of Appeal in Alboni v Ind Coope Retail Ltd [1998] IRLR 131.
41. Just as it is relevant, in a redundancy unfair dismissal complaint, for the tribunal to look at consultation which took place after notice but before expiry of that notice, see Mugford, 407A, so for the purposes of section 99 consultation may continue up to the expiry of the notice, and the minimum 90 day period is to be counted back from the expiry date, in this case 30 September 1998.
42. We have ourselves drawn certain parallels with the law of unfair dismissal. However, care must be taken not to equate the provisions of section 188 of the 1992 Act with section 98 ERA. In Kelly v Upholstery & Cabinet Works (Amesbury) Ltd [1977] IRLR 91 the EAT (Phillips J presiding) reversed an Industrial Tribunal finding of fair dismissal in circumstances where the employer had failed to comply with his duty to consult with the union over the Applicant's redundancy. Such non-compliance with the section 99 duty, the EAT held, necessarily rendered the dismissal unfair. That, considered Lord Denning MR in Hollister v National Farmer's Union [1979] ICR 542, 552 C, was "putting the case far too high".
43. Similarly, caution must be exercised when looking at provisions in Part X ERA in considering the correctness of Phillips J dictum in Avon to which we have referred. It seems that in the present case the tribunal, without hearing submissions on the point from counsel appearing before them, found support for that dictum in the words of section 111(3) ERA. In fact, we think, those words if anything point to the opposite conclusion to that reached by Phillips J on whether "dismiss" in section 99 referred to the giving of notice or its expiry.
44. The background to section 111(3), originally enacted in EPA, was that sections 22-3 IRA 1971 were construed to mean that an Originating Application complaining of unfair dismissal presented to a tribunal after notice was given but before its expiry, was premature and the Industrial Tribunal had no jurisdiction to entertain it, because dismissal meant termination of the employment and a complaint could not be presented until after termination of the employment. Penrose v Fairey Surveys Ltd [1973] ICR 26 (NIRC). It was to deal with that restriction on bringing proceedings that the predecessor to section 111(3) ERA was promulgated. Thus, far from supporting the view that dismissal means the giving of notice, it is precisely because it does not mean that that provision was made for complaints of unfair dismissal to be presented between the giving of notice and expiry of that notice. The point is reinforced, as Miss Slade QC submits, by reference to section 111(4) ERA, which provides that a complaint presented to a tribunal after notice is given but before its expiry will have effect as if references to a complaint by a person that he was unfairly dismissed include references to a complaint by a person who has been given notice that he will be unfairly dismissed when that notice expires.

(3) Subject matter of consultation

45. We have earlier observed that the employer is not obliged to consult as to his reasons for proposing redundancies: ex p. Vardy. However, consultation must ("shall") include consultation about ways of avoiding dismissals; reducing the number of employees to be dismissed and mitigating the consequences of the dismissal, and shall be undertaken with a view to reaching agreement with the unions: section 188(2).
46. We view those three features of consultation disjunctively. Thus, an employer may genuinely consult with the unions about ways of reducing the numbers of employees to be dismissed and mitigating the consequences of the dismissals, without genuinely consulting as to the principle of whether or not to declare redundancies at all. The fact that the employer, when embarking on consultation, who believes that his case for redundancies is unanswerable will not, as a matter of law, fail to discharge his statutory duty under section 188, see Hough, passage cited earlier, so it does not follow, as a matter of fact, that such a belief precludes a finding that he has not engaged in genuine consultation for the purposes of section 188(2)(a).
47. The duties under the section are mandatory. It is not open to an employer, for this purpose, to argue, as would be open to him in defending a complaint of unfair dismissal by the individual employee, that consultation would, in the circumstances, be futile or utterly useless: see Polkey v AE Dayton Services Ltd [1988] ICR 142.

(4) Special circumstances

48. The special circumstances defence under section 188(7) has, on the cases, generally been directed to the timing of consultation, rather than its subject-matter: see eg Clark's of Hove Ltd v Bakers Union [1978] IRLR 366; USDAW v Leancut Bacon Ltd [1981] IRLR 295, GMB v Rankin & Harrison [1992] IRLR 514. Further, those cases involved consideration of whether or not dire financial circumstances constituted special circumstances rendering it not reasonably practicable for the employer to comply with the minimum time frame for consultation set down in section 188(1A).
49. That said, we accept Miss Slade's submission that the scope of section 188(7) is not limited to consideration of the duty under subsection (1A). It provides, in terms, that the defence is available where a breach of subsection (2), for present purposes, is alleged.
50. However, we cannot conceive of circumstances in which the employer has sufficient time to consult and does genuinely consult on matters detailed in subsection (2)(b) and (c), but enters into sham or no consultation on the subject matter identified in subsection (2)(a) which could be said to be special, rendering it not reasonably practicable to enter into genuine consultation on that matter.

Employment Tribunal Decision

51. Having heard and read the evidence the tribunal had the advantage of detailed written submissions, both as to the law and facts, from Miss Slade and Mr Porter for the Council which are before us, as well as oral submissions from Mr Cohen, then appearing for the T & G only and Mr David Murray, Regional Officer, representing UNISON. Mr Cohen has appeared for both unions in this court.
52. Having referred to the relevant statutory provisions the tribunal summarise Miss Slade's submissions as to the law at paragraph 10 of their reasons. She advanced three principle propositions:

(1) contrary to the view expressed by Phillips J in Avon the language of section 188 fixed the timing by reference to the dismissals taking effect, in this case 30 September 1998;

(2) Avon contemplates that provided consultation begins, although it is not completed by the time notice of dismissal is issued, that gives rise to potential compliance with the statute.

(3) A distinction is to be drawn between unequivocal notices of dismissal which will inevitably lead to termination, thereby precluding meaningful consultation and cases where notice will not inevitably lead to termination. She relied on Ledbury, paragraph 17, Peter Gibson J.

53. At paragraph 11 of their reasons the tribunal rejected that argument. They referred to the provision contained in section 111(3) ERA, stating that it was there anticipated that an Employment Tribunal has jurisdiction to consider a complaint after notice is given but before the EDT. So directing themselves, they found that the dismissals took effect when notice was given on 3 July and that the decision was taken the previous day, giving the unions no real opportunity to make any contribution. We have earlier set out the concluding words of that paragraph (paragraph 23 above).

The reasons continue:

"12 While the subsequent consultation that did take place is relevant it is only relevant in so far as it should be considered in order to interpret the genuineness or otherwise of the prior consultation. We are satisfied that there was genuine consultation so far as the means of selection and practical arrangements were concerned but the proposals put forward by the GMB for alternatives were rejected because of a settled view on the part of the management team backed by the authority of the Co-ordinating Committee that there was to be only one outcome.

13 The fact that the number of redundancies was not as great as might have been because of redeployment was unrelated to any consultation.

14 On this basis we do not accept that there was any consultation with view to avoiding dismissals.

It appeared to us that Avon & TGWU v Ledbury Preserves (1928) Ltd [1985] IRLR 412 supports the principle that consultation must usually precede the issue of any notices of dismissal. However, even if this requirement is technically met the employer may still not be held to have complied with the requirements of the legislation if the consultation was a sham. In this case:

(a) There was no consultation when proposals were still at a formative stage. The decision had in all but form been taken.

(b) There was no adequate information on which to respond. It is a feature of the case that the unions were asking for quite basic information until quite late in the process.

(c) There was no adequate time in which to respond. It was a matter of only hours after the union had the proposal put to the Co-ordinating Contingency Sub-Committee that the committee resolved on redundancies.

(d) There was no conscientious consideration by the Authority of the response to consultation. The respondent simply went through the motions.

In the circumstances we were satisfied that the complaints by the applicant unions under section 189 Trade Union and Labour Relations (Consolidation) Act 1992 are well founded:

See R v Gwent County Council ex parte Bryant [1988] and R v British Coal Corporation and Secretary of State for Trade and Industry ex parte Price [1994] IRLR 72."

The complaints were upheld and the question of a protective award was adjourned to a remedies hearing, yet to take place.

The Appeal

54. Miss Slade advances eight separate grounds in support of this appeal. It is convenient to consider them under three heads:

(1) Patent errors of law.

55. It follows from our earlier review of section 188 that we accept Miss Slade's submission, without dissent from Mr Cohen, that the tribunal were wrong to treat the giving of notice as a dismissal for the purposes of section 188. Further, the tribunal's reliance on the provision contained in section 111(3) ERA in support of that finding was misplaced. Not only does that provision not support the tribunal's self-direction as to the meaning of dismissal, it supports the contrary view, that dismissal means expiry of the notice, and was in any event a point not put to the parties before the liability hearing was concluded. Laurie v Holloway [1994] ICR 32.

(2) Inadequacy of reasons

56. Miss Slade submits that there was no clear finding by the tribunal that any consultation over avoiding redundancies was a sham. We cannot accept that submission. Reading the reasons as a whole it is clear to us that the tribunal accepted the unions' factual case, that the decision to carry out redundancy dismissals was pre-determined by CMT before the Committee meeting held on 2 July, the outcome of which was known in advance because the Managing Director's briefing to all employees, referring to the Committee's decision and dated 3 July had been printed before the meeting took place. The CMT plan to deal with the budget deficit had been "squared" politically with the leader of the Council. There could be only one outcome. That, in our view, amounts to a clear finding that consultation over avoiding redundancies up to the service of dismissal notices on 3 July was a sham. It was not genuine consultation in the sense described by Glidewell LJ in ex p. Price.
57. However, she makes a valid complaint that the reasons are defective in that they make no reference to the defence of special circumstances. In Portsea Island Mutual Co-operative Society Ltd v Rees [1980] ICR 260, the EAT held that an Employment Tribunal's failure to deal with an argument on contribution raised by the employer in a complaint of unfair dismissal amounted to a failure to give reasons under what is now rule 10(3) Employment Tribunal Rules of Procedure 1993. Because the point was plainly arguable the employer's appeal was allowed and the case remitted to the same tribunal for a determination of that issue.

(3) Perversity

58. Miss Slade, and in turn Mr Cohen, have directed us to the factual history of this matter. She submits that no reasonable tribunal, properly directing itself as to the law, could properly conclude that the Council engaged in anything other than a genuine consultation exercise, not only as to the implementation of the redundancies, but as to their avoidance.
59. We wholly reject that submission. The material to which we have been taken, coupled with the tribunal's findings of fact, persuade us that not only were the tribunal's factual conclusions permissible, they were unsurprising. The picture we have is that by the 2 July Committee meeting the die was cast. There was no prospect of redundancies being avoided in the collective minds of the Council, both senior officers and Councillors. They had a settled view.
60. Miss Slade sets much store by the exchanges which began on 20 July. She seeks to persuade us, first that because there was no alternative to redundancies it does not follow as a matter of law that the Council failed to discharge the section 188(2)(a) duty: see Hough. We accept that it does not follow as a matter of law, but the question is one of fact and the tribunal permissibly resolved that question against the Council. Similarly, we are unimpressed by the challenge to the clear findings of fact at paragraph 14 of the tribunal's reasons.

Disposal

61. Generally, where the EAT finds no error of law in the tribunal's decision and dismisses the appeal, the EAT reasoning is largely academic. The question on further appeal to the Court of Appeal is not whether the EAT was right but whether the tribunal was right: Hennessy v Craigmyle [1986] ICR, 461, 470 D – E, per John Donaldson MR. However, we have not found that this tribunal decision is free from error of law.
62. Had we upheld Miss Slade's submission that the tribunal decision was perverse, in the legal sense, we should have been bound to substitute a finding that these complaints fail. O'Kelly v Trusthouse Forte [1983] ICR 728. But we have rejected that submission.

What then are the options open to us?

We may;

(1) allow the appeal and remit the matter to the same or a different tribunal, or

(2) dismiss the appeal, notwithstanding the errors of law there revealed.

Miss Slade invites us to take the first course, remitting the matter to a different tribunal, not the original tribunal. Mr Cohen urges us to take the latter course and dismiss the appeal.

63. It is clear from Dobie v Burns International [1984] ICR 812 that in order to accede to Mr Cohen's submission this case must cross a high hurdle. The tribunal's conclusion must be plainly and unarguably right notwithstanding the errors of law and there must be no necessity for further fact finding by the tribunal. That will include matters of judgment on the facts which are for the Employment Tribunal: see Morgan v Electrolux [1991] IRLR 89, Cabaj v Westminster County Council [1996] IRLR 399. However, where it is clear that the tribunal, properly directing itself on the complete set of facts found, would inevitably reach the same conclusion, remission is unnecessary and the appeal may properly be dismissed. See, recently Kapadia v London Borough of Lambeth [2000] IRLR 699, where at paragraph 25 Schiemann LJ expressed the opinion that it would not be right to remit the case to the tribunal to allow the respondent to call further evidence. We think that it would be equally wrong in the present case to allow the appeal and remit the matter to a fresh tribunal to give the opportunity to the Council to secure favourable findings of fact from a different tribunal.
64. Does this case pass the "plainly and unarguably right test?". We are satisfied that it does for the following reasons;

(1) Miss Slade relies upon the tribunal's error as to the true definition of dismiss for the purposes of section 188 to submit that their decision cannot stand. They have impermissibly terminated their enquiry as to the genuineness of Council's consultation as to ways of avoiding dismissals by limiting it to the period prior to the issuing of dismissal notices on 3 July. We disagree. It is clear to us, from paragraph 12 of the reasons, that the tribunal asked themselves and answered the question whether what followed amounted to genuine consultation under section 188 (2)(a). They answered that question in the negative. The original settled intention to declare redundancies never altered.

Thus, even if it could be argued that genuine consultation could and did take place after 3 July, thus complying with section 188 (2)(a), that argument founders on this tribunal's findings of fact.

We should add that the tribunal's error as to section 111(3) ERA adds nothing to the error as to the date of dismissal. It merely compounds the same error. Further, the tribunal did not go on to find that the Council had failed to meet the time-frame imposed by section 188(1A).

(2) Unlike the EAT in Portsea v Rees we are not persuaded that the special circumstances defence arises on the facts of this case, for the reasons given earlier in our review of the section 188 consultation provisions. Had we thought otherwise we should have remitted this discrete issue to the same tribunal for its final adjudication. We have absolutely no doubt as to what that would be on the facts as found. It would inevitably be rejected.

Conclusion

65. It follows, in these circumstances, that we shall dismiss this appeal. Put simply, the Council lost this case on the facts.