United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR BURNS (of Counsel) Messrs Eversheds Solicitors Eversheds House 70 Gr Bridgewater Street Manchester M1 5ES
For the Respondent	MR C BOURNE (of Counsel) Messrs Cowlin Swift & Kitchen 8 Lake Road York YO1 8XJ


 


THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1. This is an appeal by M Y Cartons Ltd, the respondent below, against the decision of the Employment Tribunal at Leeds that the respondent applicant, Mr Pardey, had been unfairly dismissed when he was made redundant. The appeal is brought, not against the finding of unfair dismissal itself, but in respect of two of the ingredients of the finding, which have consequences so far as the quantum of the eventual claim is concerned.
2. We deal with the second but short point first. In paragraph 3 onwards, towards the end, the Tribunal says that it:

"…was assisted by a schedule of loss provided by the Applicant's representative. Although not accepting all those calculations the Tribunal has accepted some of them and in particular takes the view that the claim for loss of pension was too high."

A figure then is inserted in paragraph 4 of the Tribunal's decision for £12,000 in respect of loss of pension rights. There is no reasoning set out as to how the Tribunal reached that conclusion, given that it was not, apparently, the figure that was put before them by the applicant. It is simply stated as a figure in its calculations in paragraph 4. The Notice of Appeal puts forward the understandable proposition that there is no reasoning to support the conclusion, and coupled with the assertion by the appellant that the finding was perverse because the applicant's loss extended only until 20 August 2001, in respect of the balance of compensation awarded otherwise in respect of a dismissal whose effective date was 7 April 2000.

3. Mr Bourne, in his resistance to that part of the appeal, has suggested that there might be ways in which, either by agreement or by fresh contentions, the figure, or a similar one, could be justified, but in the end has not pursued his opposition to the appeal, which must therefore be allowed in that regard and sent back for further argument and computation.
4. The first matter, which has taken up the whole of the contentious appeal before us, as opposed to that part which did not result in disagreement between the parties, relates to what is traditionally called the Polkey deduction. It has been asserted by Mr Burns, in his well argued Skeleton Argument, that there is no alternative route for the Tribunal but to reach a conclusion on the percentage chance that the applicant would have been dismissed for redundancy had the procedure been properly carried out, and that chance can be 100% or 0%, but there must at least be a finding. Mr Burns referred us to the dicta of Browne-Wilkinson P in Silifant v Powell Duffryn Timber Ltd [1983] IRLR 91 and 96, which was in fact approved by the House of Lords in Polkey, as follows:

"There is no need for an 'all or nothing' decision. If the Industrial Tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment."

5. The practice is for a Tribunal, where this issue is raised or live before them, to consider the question, and, as we have indicated, it is open for a Tribunal to conclude, that on the basis of the facts argued before them, they are clear that the redundancy would have been avoided had a proper procedure been carried out or that the employee would have been dismissed for redundancy in any event had the procedure been followed, or that somewhere in between the two should be arrived at, by virtue of a deduction in respect of the percentage chance that the employee would have been dismissed fairly had a proper procedure been followed. That is both standard and well understood by Employment Tribunals.
6. In this Tribunal's decision, it concluded that there was inadequate consultation with the applicant, and indeed with two other employees who were made redundant at the same time,

in a situation which it was accepted led to the need for redundancies, on the findings of fact set out in paragraph 3(c) of the Tribunal's decision. Indeed, originally it was anticipated that there would be five of the twelve people within the external sales field (which included the applicant) who would be made redundant, but after discussions it was decided that three of them would go. There were redundancies in other departments as well. One of the three agreed to voluntary redundancy, which left two being made redundant. One left on 31 March 2000, before the expiry of the notice period, and the applicant was the only one who had been made redundant who remained in the relevant department until the expiry of his notice period on
7 April 2000. The consultation, as we have indicated, was found to be inadequate, and on that basis Mr Burns has realistically accepted that he can make no challenge to the finding of fact in that regard by the Tribunal. There was thus unfair dismissal.

7. In paragraph 2(g) there is the following finding of fact by the Tribunal:

"On the 6 April 2000 a Supply Chain Manager was dismissed after an unsatisfactory trial period; and the Respondent promoted the Customer Service Manager, who was deemed the only person able to take over that important post. This left a vacancy for a Customer Service Manager which was a job that the Applicant could have performed. The Applicant had not been told of this vacancy but found out about it himself and applied for the post. [We interpose – that was after his departure from the company on 7 April] After a proper selection procedure, the post was given to someone who had not been in danger of redundancy. The person who got the job was from the external sales team, thus reducing the team further. [We interpose that in fact it appears that his old job was made redundant additionally to the three earlier redundancies, when he was given the job in question of Customer Service Manager]. The applicant expressed interest in that post also but no appointment was made."

The Tribunal concluded in paragraph 3, as we have indicated, that it had no doubt that the redundancy exercise had been sloppy. They found the procedure to be faulty. They record:

"The Tribunal had to decide whether or not the Applicant would have gone in any case if the procedure had been carried out properly."

That, of course, is a proper question for them to ask in the light of Polkey. The rest of their conclusions in paragraph 3 we shall recite:

"The Applicant is a competent and able man who can put forward a forceful argument. He believes that his marking was low, in regard to work he was not doing at the time. [We interpose – that is a reference to the fact that in the redundancy process, as was found in a fact in paragraph 2(e) at the Tribunal, the Applicant had one of the low scores, being second from the bottom]. He may well have persuaded the Respondents that he deserved more. The odd extra mark here and there would have made a difference. Before he left there was a vacancy for a job that he felt able to do. This was not offered to him and the others who were redundant as is the proper practice but was advertised at large within the firm. The Tribunal is convinced that that was [a] suitable vacancy that should have been filled by the Applicant. Because of these matters the Tribunal is not convinced that a fair procedure would have resulted in the Applicant being made redundant."

8. So far as the factual scenario is concerned, we have set out the findings of fact in paragraph 2(g) of the decision. It appears that the probationary Supply Chain Manager was dismissed on the Thursday and, although the findings of fact are not very clear in paragraph 2(g), it would appear that the Tribunal concluded that the promotion of the Customer Service Manager was on the same day, although it may have been on the following day. What is certain is that, as Mr Bourne has told us, the Managing Director of the appellant company accepted that the decisions were made very quickly on the position, so far as the Supply Chain Manager being decided on, and the new Supply Chain Manager, that is the former Customer Service Manager, started his job on Monday 10 April. There was therefore, submits Mr Bourne, a finding by the Tribunal that there was, or could have been, a window between the 6 April 2000 (or possibly the morning of 7 April 2000) during which time there could, and he submits, on the basis of the Tribunal's findings, should have been a consideration, and indeed, on his case, a decision, as to the replacement by the applicant of the old Customer Service Manager, rather than having the Customer Service Manager position made the subject of what the Tribunal concluded to be a proper selection procedure the following week.
9. Mr Burns submits that there was no finding in the way that one would ordinarily expect by the Tribunal as to the Polkey situation, ie that they were satisfied that even had there been a proper procedure the employee would still have been made redundant. He submits that the 'all or nothing' process would appear to have been adopted wrongly by the Tribunal and that consequently their decision should be set aside and the matter remitted. Insofar as they concluded that the employee would have been retained, they can only have so concluded (if they did) by concluding that he would have been retained in the position of Customer Service Manager, namely the job vacated by the person who was appointed to succeed the probationary Supply Chain Manager. He submits that that is the substitution of the view of the Tribunal for the view of a reasonable employer. In any event, the words that are used by the Tribunal do not sit easily with the normal expectation of a proper conclusion by the Tribunal on the Polkey point, namely, 'the Tribunal is not convinced that a fair procedure would have resulted in the applicant being made redundant', when one would expect them to have made a finding more in accord with, 'the Tribunal is convinced that had a fair procedure been followed through, the applicant would not have been made redundant'.
10. Mr Bourne submits that, albeit that the findings are not quite as clear as one would wish, and that the language is not as one would ordinarily have expected, nevertheless, the decision of the Tribunal can be supported. So far as the findings are concerned, he submits that there was in fact a finding that this vacancy was available on 6 April. So far as the conclusions are concerned, he accepts that the words are not the normal words, but he relies on the sentence, 'the Tribunal is convinced that that was a suitable vacancy that should have been filled by the applicant', and in those circumstances he submits that there was a finding of fact by the Tribunal that the employee would have been offered the Customer Service Manager job, and, of course, had he been offered that job, then he would not have been made redundant, and in those circumstances there is, based upon the filling by him of the Customer Service Manager job, had the consultation and the other procedures been carried out fairly, a finding that he would indeed not have been made redundant had that occurred.
11. The difficulty, as it seems to us, for Mr Bourne, is the basis on which the Tribunal reached that conclusion, if they did reach that conclusion, on the charitable approach to the words used by the Tribunal which he urges this Tribunal to adopt, given (as we are so often reminded) that Employment Tribunal chairmen's words are not a statute and should not be too intricately construed in order to grasp the clear sense, and, very often, commonsense, which lies behind them. He accepts that it would not be right for a Tribunal to say that an employee who is made redundant must be offered any alternative vacancy that comes up before the expiry of his notice period. He has drawn our attention, rightly, to Stacey v Babcock Power Ltd [1986] ICR 221, in which Waite P said as follows (at 230B):

"Fair industrial practice would, in our opinion, have required the employers to offer the employee, as a long standing workman, the opportunity of employment at the Kingsnorth contract site before filling all the vacancies there with newly recruited employees."

He has also drawn our attention to Thomas & Betts Manufacturing Limited v Harding [1980] IRLR 225, which was a case in which a redundancy was found to be unfair where the alternative to a redundancy would have had the consequence of short-term employees, with considerably less job status than the employee who was made redundant, being dismissed instead, and effectively thus being, as was put by Mr Burns, 'bumped' in favour of the employee.

12. It appears to us that it would indeed be right to say that fair industrial practice would indeed expect employers not to make an employee redundant for the purpose of replacing him and others with newly recruited outside labour. Equally, it is well established that, in the course of redundancy procedure, it is proper and indeed appropriate to consider, and almost certainly determine upon, the dismissal of short-term temporary employees, rather than making a longer term employee redundant. But that is not the proposition here. What the proposition would be here would be that it would be characterised as an inappropriate industrial practice for employers to do what they did here, namely, as opposed to offering a vacancy immediately it became available to the applicant, carrying out what was itself recognised by the Tribunal as a proper selection procedure, in which the applicant and others also were involved. We have no evidence as to who precisely was involved in this proper selection procedure, but Mr Bourne, on instructions, has very properly told us that it was not simply a choice for the employers, as he understands it, between the employee and the man who eventually got the job of Customer Service Manager, but that there were other employees who were also considered in the course of the proper selection procedure.
13. Indeed, Mr Bourne accepts that it would not be right for an Employment Tribunal to lay down, as a matter of law, that it would be unfair employment practice to do anything other than offer such a vacancy immediately to the employee who was about to be made redundant without carrying out, an appropriate, and a proper selection procedure. We have been pointed to no proposition of law which establishes the obligation on an employer to give any available vacancy to an employee who otherwise is at risk of being made, or has been made, redundant, rather that at least to consider the possibility of employing others. Mr Bourne does not indeed support the existence of any such proposition. He accepts that it would be a question of fact to be looked at in each case, but he submits that this Tribunal did make the finding of fact that the employers, had they acted reasonably, would have taken on this employee and would not have instituted a selection procedure. Mr Burns submits that that is not a conceivable reading of the Tribunal's decision, even on the charitable basis.
14. We then turn to consider the Tribunal's conclusions. In paragraph 2(g) they have set out, as we have recited, the fact that the vacancy for a Customer Service Manager was a job that the applicant could have performed. In paragraph 3 they recite the fact that there was a vacancy for a job that he, the applicant, felt able to do. The central passage begins as follows:

"This was not offered to him and the others who were redundant as is the proper practice…"

Mr Burns submits that it is clear from that proposition that the Tribunal was indeed finding that it was proper practice to give the job automatically to one who was otherwise redundant. The implication is that, as the other two of the three were no longer needing a job, one because he had taken voluntary redundancy, and the other because he had gone, therefore the only proper practice would have been to offer the job to the employee. Even that is not necessarily a fair inference, as indeed Mr Bourne implicitly accepts, because, once it becomes clear that there were others who in fact applied for the job, some of those might have been, we do not know, at risk of or actually undergoing redundancy in other departments, there having been such other redundancies. But even assuming that the applicant was the only redundant employee, it appears to us that that is a plain conclusion by the Tribunal that the proper practice would have been to offer it to him, and that, as it was put, the 'advertisement at large' within the firm, or the proper selection procedure, as it was determined to be by the Employment Tribunal, was not an option for this employer. That, if that was the finding, is, indeed even on Mr Bourne's own submissions, not an appropriate decision for a Tribunal. It appears to us not, without particular facts, to be right for a Tribunal to conclude that that, as might be the case in a Babcocks situation, or indeed, in a Thomas v Betts situation, shall be the automatic position of an employer faced with, on the one hand, a vacancy, and on the other hand, a potentially capable redundant employee.

15. Is that what the Tribunal did? The next sentence is:

"The Tribunal is convinced that that was [a] suitable vacancy that should have been filled by the applicant."

There has been some considerable argument before us as to what the words 'should have been filled' amount to. Mr Bourne has eventually put forward the submission that 'should' means 'should on the facts' and on that basis should, all things being equal, have been filled by the applicant. Mr Burns submits that, following as it does in that sentence from the earlier sentence which has concluded as to what the proper practice was, that 'should have been filled' is simply a consequence of that conclusion as to the proper practice, namely the continuation of the Tribunal's conclusion that the applicant should have been offered that job. Of course, if he had been offered that job, he would have accepted it and he would thus not have been made redundant. The next sentence then reads:

"Because of these matters the Tribunal is not convinced that a fair procedure would have resulted in the Applicant being made redundant."

On the basis of either party's case, that is not the wording one would normally have expected, but Mr Bourne effectively submits that one must run together the two sentences so that, on his case, 'should have been filled' is not an obligation but a finding of fact, and consequently the Tribunal 'not being convinced' should be read as a conclusion that they were convinced that in fact a fair procedure would have made a difference, because of their conclusion in relation to the fact that the new job would have been filled by the applicant, because it should have been so filled.

16. We conclude that is a step to far. We prefer the plain construction of Mr Burns that this is all based on the postulation by the Tribunal as to what proper practice is, and consequently that the employers should have taken on Mr Pardey and consequently there would have been no redundancy. If that was the thinking, and we are satisfied that it was, then this was an impermissible conclusion by the Tribunal without further foundation of fact, and certainly not a finding of fact of itself, as Mr Bourne has contended.
17. We therefore conclude that there has not been the straightforward Polkey question which there could, and should, have been, and indeed, which might have led to the same result, because we make no pre-supposition as to the findings of fact that the Tribunal which is to hear this matter again will make. We conclude that the matter should be remitted to a different Tribunal, that the enquiry should be limited to the question of the Polkey deduction, but that in that regard all facts should be open in relation to the events of and after 6 April, so that a Tribunal could come to a conclusion as to whether, on findings of facts, they are satisfied that this applicant would not have been made redundant, alternatively, that there was some risk that he would still have been made redundant ranging from 0% to 100%. In those circumstances, this appeal is allowed.