United Kingdom Employment Appeal Tribunal

APPEARANCES

 

 

For the Appellants	Mr D B Stevenson, Solicitor Of- Messrs Thompsons Solicitors 16-18 Castle Street EDINBURGH EH2 3AT
For the Respondents	Mr J S Naismith, Solicitor Of- Messrs Stirling & Mair Solicitors 28 High Street JOHNSTON PA5 8AH


 


LORD JOHNSTON:

1. This is an appeal at the instance of the appellant employees against a decision of the Employment Tribunal, holding that in a redundancy situation, they had been unfairly dismissed by the respondent employer but made no award of compensation on the basis that the Tribunal determined that despite the lack of consultation which categorised the dismissals as unfair, the same result would inevitably have occurred, namely dismissal.
2. In respect of the decision on fairness, the relevant part of the Tribunal's decision is as follows:-

"In this case, the GPMU was not recognised by the respondents. There was however a Works Committee and of course the employees themselves. The respondents sought to argue that they simply did not have enough time to consult with employees or their representatives due to pressing financial circumstances. By their very nature, most redundancies are a response to financial difficulty. The respondents' position was no exception. Given the other steps which the respondents were able to take between Mr Cox first learning of the respondents' June 2000 figures and the date of notifying the employees of impending redundancies on 16 August 2000, the Tribunal was not satisfied that the respondents' reasons of pressing financial circumstances and lack of time were genuine or adequate excuses for failing to consult with employees or their representatives prior to 16 August 2000. The Tribunal found that Mr Cox made the conscious decision not to consult with employees or their representatives, be they union representatives or members of the Works Committee at a time when the procedure by which to implement redundancies was at formative stage. This showed a complete disregard for any input that the applicants may have been able to make to avoid redundancies or to formulate a fair procedure. They were deliberately kept out of the picture and were unaware of the criteria against which they were being scored until the scoring process was complete. This was not the procedure which a reasonable employer would have followed and was unfair. The applicants questioned the reasonableness of the respondents' letter to the applicants (R1) notifying them of impending redundancies not only on grounds of its timing but also its accuracy. The letter informed the applicants that the respondents would be going through "a scoring process for all employees to identify the persons who may be selected for redundancy". This was inaccurate. The respondents had identified the departments from which redundancies could be made while keeping the business viable. It was only employees in those departments who were scored. In addition, the respondents excluded apprentices in each department from the scoring process. The Tribunal did not find that the discrepancy between the terms of their letter (R1) and what they did in practice was a deliberate attempt on the part of the respondents to mislead the applicants or a change of tack during the course of the procedure. While it was not in itself unreasonable, it is an example of the type of misunderstanding which can arise if there is a lack of consultation from the outset.

The discrepancy also led to some dubiety over the identity of the selection pool applicable to the applicants. The applicants argued that the selection pool was as detailed in the respondents' letter (R1), the entire workforce. While the respondents' witnesses were vague on this point, the Tribunal found that the pool identified by the respondents and from which the applicants were selected for redundancy was the Operators in the Cutting and Creasing department. The Tribunal was satisfied that this pool was not unreasonable given the circumstances of the case, in particular that the applicants skills were not transferable between departments. As for excluding the apprentices in the department, it was not in dispute that during a more recent round of redundancies, the respondents' apprentices have been included in the selection process. From this, the applicants inferred that they could have been included with them. There was limited evidence before the Tribunal concerning the legal status of those considered to be apprentices by the respondents at the time of the applicants' selection for redundancy. (In connection with the status of apprentices generally, the Tribunal was referred to the case of Wallace v CA Roofing Services Ltd 1996 IRLR 435). The decision by the respondents to exclude them was not challenged or questioned at the time of the applicants' selection for redundancy. The Tribunal found that the decision was made by the respondents with the genuine motive of following legal advice and was accepted and acted upon in good faith. In the above circumstances, the Tribunal did not conclude that the respondents' decision to exclude apprentices from selection was unreasonable."

"In conclusion, the Tribunal concluded that in the circumstances of this case, the failure on the part of the respondents to consult with the applicants at the formative stage of the redundancy procedure was unreasonable and resulted in an unfair dismissal. The failure to consult with the applicants prior to 16 August 2000, led to a situation where the applicants were potentially disadvantaged by being unaware of the procedure adopted by the respondents until they were effectively selected for redundancy."

3. Thereafter, the decision of the Tribunal deals with the question of inevitability and in this respect the decision is as follows:-

"The Tribunal therefore proceeded to apply the ruling in the case of Polkey -v- AE Dayton Services Ltd 1987 IRLR 503 HL by asking what was the percentage likelihood of the applicants still being dismissed in the event that the respondents had followed a fair procedure, which in this case would have involved consultation with the applicants or their representatives at the formative stage of the redundancy procedure and before 16 August 2000. The Tribunal concluded that this was a procedural failure on the part of the respondents and that in this case, the failure to consult prior to 16 August 2000 was not so fundamental as to make it impossible to "sensibly reconstruct the world as it might have been" per King v Eaton Ltd (2) 1998 IRLR 686 CS.

The Tribunal concluded that there was every likelihood that even if the respondents had consulted with the applicants at the appropriate times they would still have been selected for redundancy and dismissed. There was nothing to indicate that earlier consultation would have resulted in a lower number of redundancies or have avoided the applicants' selection for redundancy. The respondents were in financial difficulty. They required to lose staff to avoid further and potentially fatal financial difficulty. They only required two Cutting and Creasing Operators to remain viable. The applicants' skills were not transferable to posts on equivalent terms. The alternative employment which was available such as Stripping was unsuitable. The applicants insisted that their length of service should have been a determining factor for selection and that the selection panel should have only included management with a working knowledge of their department. Even if these issues had been raised during consultation prior to 16 August 2000, the Tribunal was not satisfied that the respondents would have adopted them and a different outcome brought about, as indicated by Mr Cox's response to the applicants' grounds of appeal. Nor was there any suggestion that the exclusion of the apprentices would have been raised as an issue during the consultation period resulting in their inclusion in the selection pool and a different outcome.

The Tribunal concluded therefore that the percentage chance of the applicants being dismissed in the event of the respondents following a fair procedure from the outset was 100%. Both applicants have already received the equivalent of a basic award from their statutory redundancy payment and given the above circumstances, no compensation can be awarded."

4. Mr Stevenson, appearing for the appellants, argued that, given the reasons behind the finding of unfair dismissal in relation to lack of consultation, the decision to assess the likelihood of dismissal in any event at 100%, was illogical since it failed to give any effect to what might have been the result of a consultation process, if it had been properly carried out. He submitted that the failure of the employer to embark upon a fair consultation process was a substantive one, consequently, having an effect, inasmuch that there was a denial of opportunity and it could not be said that if the opportunity had been given a different result would not have been achieved. He referred us to King & Others v Eaton Ltd [1998] IRLR 686 and Polkey v A E Dayton Services Ltd [1987] IRLR 503. Reference was also made to Market Force (UK) Ltd v Hunt [2002] IRLR 863, Mining Supplies (Longwall) Ltd v Baker [1988] IRLR 417 and Elkouil v Coney Island Ltd [2002] IRLR 174.
5. Mr Stevenson's primary submission was that, given the illogicality of the reasons given by the Tribunal, the matter would have to be remitted to a freshly constituted Tribunal which would have to rehear the whole case in order to form a view on the whole matter which, he was submitting, had been wrongly decided.
6. He had a fall-back position to the effect, that, in any event, consideration should have been given by the Tribunal to what effect lack of consultation might have had on the actual date of dismissal, in other words, prolonging the period of employment (see Elkouil supra).
7. Mr Naismith, appearing for the respondents, submitted that the issue was one of fact to be determined by the Tribunal upon the evidence. They had properly assessed the background to the issues, namely, the financial state of the company and had determined that given that only one department was involved as regards the two appellants, who were not in a position to be employed anywhere else, at least in accordance with their status, the conclusion reached by the Tribunal was one they were entitled to achieve.
8. With this last proposition we are in agreement. The role of this Tribunal in reviewing questions of fact, determined properly by the Tribunal below, is very limited and inevitably falls under the general umbrella of perversity, although Mr Stevenson did not go that far in this case. He merely argued that the conclusion was illogical. We consider that upon the evidence before the Tribunal they were entitled, having determined the issue of fairness, to conclude, nevertheless, that the employer would be bound to effect the redundancies of these two men, in any event. In this respect, therefore, the appeal fails. However, we are concerned that the Tribunal did not consider the question of whether or not the period of employment might have been extended to some extent if the consultation process had been properly carried out. Since they did not so consider that matter we consider it appropriate to remit the matter back to the same Tribunal for them to consider, upon the facts they have found proved, whether or not the consultation process might have extended the employment period beyond 25 August and, if so, to what extent. If they do so conclude, compensation would be awardable in respect of the relevant loss of weekly pay. If they determine that the same date would in fact have been achieved because of the attitude of the employer, no compensation would be awardable.
9. This appeal is therefore allowed to the limited extent of remitting it back to the same Tribunal to determine that last issue.