United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR CHARLES PRIOR (of Counsel) Messrs Pannone & Partners Solicitors 123 Deansgate Manchester M3 2BU
For the Respondent	MR PHILIP HUTCHINSON (Solicitor) Messrs Nicholson & Morgan Solicitors 14 Bell Villas Ponteland Northumberland NE20 9BE


 


HIS HONOUR JUDGE J MCMULLEN QC

1. This case is about fair dismissal procedures. It is an appeal by the Applicant in those proceedings against a decision of an Employment Tribunal sitting at Newcastle, Chairman, Mr G Johnston, on 18 June 2002, promulgated with Extended Reasons on 8 July 2002. The Applicant and Respondent were represented, as today, by Mr Prior, of counsel, and by Mr Hutchinson, solicitor. We will continue to refer to the parties as Applicant and Respondent. The Applicant claimed unfair dismissal arising out of the handling of a redundancy. The Respondent contended that it had acted fairly. The essential issue before the Tribunal was to determine the reason for dismissal and the fairness of the procedure.
2. The Employment Tribunal found that the Applicant was unfairly dismissed. It ordered the Respondent to pay compensation of £1,744.76, because the recoupment provisions applied an excess of the total award over the prescribed element was £575. The Applicant appealed against that decision on grounds set out in a Notice of Appeal and in addition a Skeleton Argument advanced orally today.
3. The essential argument relates to the error it is said the Tribunal committed in failing to decide the fairness of the dismissal as at the expiry of the notice period of the Applicant's dismissal; and that in applying the formula in Polkey v A E Dayton Services Ltd [1988] ICR 142, it wrongly calculated the period during which a fair procedure would have operated during the continuance of the Applicant's employment.
4. The Respondent employed six people. The Applicant was employed as a Field Service Engineer. There were two, Mr McCourt was the other. There was a genuine redundancy situation causing the Respondent to reduce Field Service Engineers from two to one. On
   17 October 2001 the decision was taken to make Mr Colvin redundant. He had a month's notice which came into effect on 1 November and thus expired on 30 November. His contract of employment terminated then, although, in fact, he left slightly earlier. On 30 November, Mr McCourt, informed the manager, Mr Muir, that he was resigning. There was a telephone conversation between Mr Muir and Mr Colvin. Mr Colvin was not offered Mr McCourt's job. Mr Colvin did not raise the issue with Mr Muir. The Tribunal found that there was improper consultation over the selection of the Applicant for redundancy and thus descended upon the examination required by Polkey (above). It determined that the employment would have continued until 31 December 2001 had a fair procedure been operated. On 7 December, the Respondent placed an advert at the job centre for a Field Service Engineer. Mr McCourt duly left at the end of that month. We are told that the Respondent did recruit someone.
5. The Employment Tribunal directed itself by reference to the relevant provisions of the Employment Relations Act 1996 Section 98(4) and the authorities which it recorded in its reasons, which we hold to be the relevant approach, that is, Williams v Compare Maxam Ltd [1982] ICR 156, British Aerospace v Green [1995] IRLR 433, Buchanon v Toucan [1983] IRLR 917. The Tribunal was also referred to King v Eaton [1996] IRLR 199, approving R v British Coal Corporation ex parte Price [1994] IRLR 72, embodying what fair consultation means. Applying those principles the Tribunal held that the Respondent fell below the standards of a reasonable employer.
6. It then went on to what it described as the most difficult aspect of the case. It found that the dismissal was unfair on procedural grounds, considered King v Eaton No 2 [1998] IRLR 686, it reminded itself that Tribunals were discouraged from embarking on a voyage of discovery into what might have happened without any reliable factual starting point. It held, however, that it did have some reliable factual starting points, and recorded that much of the evidence was not in dispute. The Tribunal recorded:

"There are two possible approaches to procedurally unfair redundancy dismissal cases. One is to assess a percentage chance of the same outcome if there is doubt as to whether the applicant would have been dismissed. The other, if there is no real doubt that the result would have been the same, is simply to fix a period of time by which consultation would have extended the applicant's employment."

It took the latter approach and felt that the employment would have been continued by one month.

7. That approach has been attacked by Mr Prior on the simple basis of the holding in Stacey v Babcock Power Limited [1986] 221 EAT. In that case, a dismissal for redundancy which would have been fair at the date the notice was given became an unfair dismissal because by the date of the expiry of the notice new circumstances had occurred which made it unfair to dismiss the Applicant by reason of redundancy.
8. It is clear that all information available to an employer at the date of the termination of the employment relationship is relevant in considering the fairness of dismissal – see Williamson v Alcan (UK) Ltd [1978] ICR 104 EAT, per Phillips J at 109 B-C. It is also proper to note that any information becoming available during the course of, for example, an internal appeal, even post-termination, is relevant – see West Midlands Co-operative Society Ltd v Tipton [1986] 1 AER 513.
9. The Tribunal was not referred to the above three cases. Mr Hutchinson accepts that Stacey is a relevant authority. His submission is that Stacey should be distinguished, because in that case a different factual set of circumstances prevailed. We disagree. It seems to us Stacey is authority for the proposition that a fair dismissal may become unfair as a result of supervening events. It becomes unfair to carry out an otherwise genuine redundancy dismissal when either more work becomes available, as in Stacey, or the pool of people to be dismissed reduces, as here.
10. We are therefore of the view that the Tribunal erred in failing to apply Stacey. Had it done so, the situation as to the Polkey reduction would have been different. Mr Hutchinson argues that the Tribunal was correct in taking that Polkey approach and defining a period by reference to one month. We disagree. The chronology of this case indicates that the Applicant would not have been dismissed had a proper procedure been carried out, since if he had been (even on the Tribunal's findings) engaged for a further month until the end of December, there would have been no need to advertise in the Job Centre for someone else, and there would have been no need for such other person to be engaged. On these findings, it is easy for us to substitute a judgment that limitation of the period of compensation pursuant to Polkey to one month, is incorrect, and what the Tribunal would have done had it been correctly directed as to the law would have found no dismissal would had occurred.
11. That therefore disposes of the appeal. The case will therefore be remitted to the Employment Tribunal so that it may decide, in accordance with the guidance we hope we have given, what would be the compensation due to Mr Colvin, since in our holding he would not have been dismissed had a fair procedure been carried out. Although both advocates are without clients today, we hope that they may be able to reach some common sense solution to this matter.