United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P NICHOLLS (of Counsel) Instructed by: Messrs Spreechly Bircham Solicitors 6 St Andrew Street London EC4A 3LX
For the Respondent	MRS Z THOMPSON (of Counsel) Instructed by: Messrs Jack Thornley & Partners Solicitors 8 Warrington Street Ashton-under-Lyne Lancs OL6 6XP


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal from a decision of an Employment Tribunal sitting at Liverpool in January 2003 who in written Reasons delivered on 24 March 2003, held by a majority that the Respondent employee Mr O'Hare had been unfairly dismissed. A claim of victimisation under the Race Relations Act failed and there is no appeal against that decision. Leave for this hearing was given by the President, Mr Justice Burton, on 24 April 2003. There is a second appeal relating to the level of compensation awarded by the Tribunal on 6 June 2003, who in a written decision promulgated on 18 June, awarding a total sum of £12,068.
2. The Appellant employers had contended that the Respondent had been fairly dismissed on the grounds of redundancy and the appeal relates to the fairness of the criteria used to select the Respondent for redundancy and the application of those criteria. The relevant facts that appear from the Tribunal decision are that the Appellants supply labour to the Mersey Docks and Harbour Company and at the relevant time there were approximately a hundred and sixty employees engaged on such work. The Respondent was a plant operative who reported to a number of assistant operations managers who in turn reported to Mr Heather, who in turn reported to Mr Skiggs.
3. In October 2001, it was apparent that because of a significant downturn in business there was the necessity to reduce the labour force. Mr Skiggs undertook preliminary calculations from which it appeared to him that twenty one employees would have to be made redundant; that figure was subsequently revised to eighteen. That was further reduced to fifteen because there were three employees who would be leaving in any event, and in addition there were two apprentices whom it was also decided would go, leaving thirteen to depart otherwise. That figure was further reduced as a result of voluntary redundancy, leaving a final figure of seven to be made compulsorily redundant. There was no recognised trade union, although the Respondent was a representative of the Transport and General Workers Union, and Mr Skiggs adopted criteria that had been formulated in the light of a similar proposed exercise at Southampton Docks.
4. The criteria were absences per period of employment, length of absences per period of employment and disciplinary sanctions per period of employment. A weighting was then applied to each three criteria with dates of absence being the base and weighted one, absence frequency was weighted at three, recognising the added cost of replacing an absent employee often at overtime cost, and discipline incidents weighted at five. The combined weighting was then calculated and averaged on the number of weeks employed, and again with the highest score at the top of the list. Although the letter informing the employees of redundancy indicated that the criteria would include "skills and experience", in reality they did not.
5. All one hundred and sixty four employees were scored and ranked and the Respondent was placed seventh on the list and selected for redundancy. The Respondent appealed against that selection and the appeal came before Mr Skiggs on 20 December, when the Respondent raised a number of issues asserting that he had not received all the warnings alleged against him, that his absence record had not been properly assessed and, in particular, that the employers should have discounted industrial injury when determining length of absence. Mr Skiggs accepted that the periods of absence had been improperly calculated, but a re-calculation made no difference to Mr O'Hare's position and the warnings were checked and confirmed, and as a result the appeal was rejected and a dismissal confirmed.
6. The majority view of the Tribunal (the Chairman dissenting) was that it was unreasonable for Mr Skiggs to have rejected the suggestion that industrial injuries should be ignored when assessing an employee's attendance record and the majority took the view that the manner of assessment against the criteria and in particular the criteria of absence was unreasonable, although finding that the criteria in themselves were not unreasonable.
7. In paragraph 30 of the Tribunal decision, the majority set out the position as follows:

"30 …….. It was conceded that the docks were a dangerous place and that employees were frequently injured there. If that injury was a consequence of negligence on the part of the Company, it would inequitable for the Company to use that in order to "mark down" and therefore select for redundancy the wrong employee. To put it another way, if the purpose of adopting absence as a criterion was to retain those most likely to give constant service in the future, no assistance could be derived by considering absences of this sort, for which the employee was blameless.

31 We were told by Mr O'Hare that he had received compensation from the Company for industrial injury which had necessitated a lengthy absence, and without the inclusion of that absence by the Company Mr O'Hare would not have been made redundant. The majority view was that as the company had chosen to use very narrowly based criteria for selection, (only absence and disciplinary matters), they had a duty to apply those criteria in a scrupulously fair manner, and the exclusion of industrial injuries from their calculations meant they had failed to do that."

8. The Chairman's view was that it was a reasonable view for the company to take and he set out his position further in paragraph 32:

"32 ……. It is always possible to point to potential injustices as a result of any marking system but in the view of the minority member, if the Company were obliged to enquire into the "fault" of any employee in relation to any accident resulting in time off work, they would simply be unable to carry out this exercise at all. There was no difference in the view of that member between an accident occurring at the dock and, for example, a road traffic accident. There would be no more indication of likely attendance into the future as a consequence of considering such an accident. Would the employers in such a situation be obliged reasonably to enquire as to the level of fault on the part of the employee concerned?"

The majority view therefore was that no reasonable employer could in those circumstances have assessed attendance without excluding industrial injuries and they therefore concluded that the Applicant was unfairly dismissed. Whilst the majority sought to justify their views on the grounds that it was not fair to include accidents at work which were not the fault of the employee, when one looks at the Tribunal's conclusion, they appear to be saying that all industrial accidents should be excluded, whether the fault lay with the employee or not.

9. Mr Nicholls, for the Appellants, contends that the majority applied the law incorrectly by substituting their own view of what the selection process should have involved, rather than considering whether the employer's approach fell within the range of approaches open to a reasonable employer. If they did conclude that no reasonable employer could have taken the approach to absence which Drake took, that was an impermissible decision for the Tribunal to reach and was thus perverse.
10. He firstly criticises the Tribunal decision on the grounds that whilst initially they have found that the selection criteria used in this case were reasonable, they then sought to criticise those criteria under the pretext of criticising the manner of implementation. In any event, he contends that whether the criticism goes to the criteria or their implementation, the majority was seeking to impose their own views as to reasonableness, rather than to consider whether the employer's approach fell within the band of reasonable responses. In BL Cars -v- Lewis [1983] IRLR 58 the employers had selected thirty eight industrial engineers to be retained on the basis of their skills, taking into account the short term and long term objectives of the company. The majority members of the Industrial Tribunal had found the dismissal to be unfair because the Respondents had not given sufficient weight to the Applicant's considerable length of service and had formed the view that only considerable incompetence at his job, in comparison to those retained, would have been enough to outweigh his priority in terms of length of service. Mr Justice Browne-Wilkinson, in giving the judgment of this Court, set out the position as follows at paragraph 12:

"It also seems to us that it is possible that the majority were not correctly directing themselves to their function. The passage which we have read indicates that they may have thought that it was the function of the Tribunal to decide whether they (the Tribunal) thought that the correct selection had been made, in the sense of being the selection that they would have made. The correct question they had to ask themselves was whether the selection was one that a reasonable employer, acting reasonably, could have made."

He continued as follows at paragraph 15:

"First, they must direct their minds to the question, 'Was the selection one which a reasonable employer could have made?', not to the question, 'Would we have made that selection?' In approaching their decision, the Industrial Tribunal will have to consider the criteria that were adopted and whether the employers have demonstrated that they have fairly applied those criteria to this redundancy. In the normal case of a large employer, that would normally involve the employers showing that in selecting Mr Lewis they had compared him in relation to his length of service, his job and his skills with those others who might be made redundant, namely, the other industrial engineers in the department."

11. This case was followed by the Scottish decision in Dooley -v- Leyland Vehicles Ltd [1987] SLT 76. In that case the employers had evolved a scheme of selection based upon firstly a record of absenteeism and, secondly, last in first out approach. So far as absenteeism was concerned, the document made reference to what was described as "unacceptable patterns of attendance". The Industrial Tribunal had concluded that the criteria had not been reasonably applied and in particular that absence on account of industrial injury should have been excluded. The EAT in Scotland (Lord McDonald presiding) accepted the argument on behalf of the appellants that the reasoning on the part of the Industrial Tribunal clearly revealed that they had substituted their judgment for that of a reasonable employer and set out the position thus at page 78G:

"In our opinion all that the industrial tribunal were required to do in this case was to satisfy themselves that the method of selection was fair in general and that it was applied in the case of the respondent in a reasonable fashion. It is possible to entertain a degree of sympathy for the respondent in as much as the material period of absence was due to an accident at work but we are not able to draw a distinction between this and any other form of accident or indeed absence due to genuine illness. We certainly do not consider that the industrial tribunal were entitled to hold that absence on account of industrial injury did not fall within the definition of unacceptable pattern of attendance which they have laid down. That definition includes absence on account of sickness and in our opinion the tribunal exceeded their function in having regard to the common law obligations of an employer towards his employee in the manner in which they have stated these."

That approach was confirmed by the Court of Session in Scotland, who set out their views thus at page 80C:

"The method of selection refers to absence, and is silent as to the reason for or cause of any absence. That that should be so, it is quite intelligible. The reason for or cause of any particular absence may not be clear, and, if it is disputed, some inquiry would be necessary to determine what the reason for or cause of the absence was. In the context of selecting for redundancy, such an inquiry would not be practical. Accordingly it is understandable that all that has to be considered is absence and not the cause of the absence nor the reason for it. Whether or not absence is due to fault on the part of the employee is neither here nor there. As is clear from the industrial tribunal's decision, what the respondents wished to ensure after the workforce had been reduced, was that they had retained those men who could and would attend work on a regular basis. If an employee was regularly sick (though this was not due to his fault), he might not be a person who could be relied upon to work regularly. Moreover an individual employee might be absent on a number of occasions for a variety of reasons, some of which were his own fault and some of which not; from the employer's point of view, however, it would not matter whether the absences were due to the employer's fault or not."

Later they said this at 80F:

"There is, moreover, a further reason for concluding that the decision of the industrial tribunal was not well founded and that the employment appeal tribunal were entitled to sustain the appeal at the instance of the respondents. What the industrial tribunal have really done is to substitute their own views of the proper way to make the redundancy selection for those of the respondents, and by placing an erroneous construction on "unacceptable pattern of attendance" they failed to apply the criteria laid down by the respondents. That is something which an industrial tribunal is not entitled to do - (see BL Cars Ltd v Lewis) …… although the industrial tribunal in the present case purported to approach the matter from the point of view of considering whether the respondents had acted in accordance with equity in the substantial merits of the case, it is clear from their reasoning that what they in fact did was to decide how they would have made the selection instead of determining whether the selection was one which a reasonable employer could have made."

Mr Nicholls argues on the basis of those two authorities, and looking at the language of the majority decision in this case, it is clear that the majority have indeed decided how they would have made a selection, instead of determining whether the selection was one which a reasonable employer could have made and in particular refers to the use of the phrase "scrupulously fair" in their paragraph 31 of the decision, suggesting that the majority had imposed a far higher standard than the normal requirement of reasonableness.

12. Further, he reminded us that the issue of excluding industrial injury absences had indeed been raised with Mr Skiggs during the redundancy procedure and he had rejected that suggestion, and those reasons were explored in evidence. A number of those reasons echoed the concerns expressed by the Court of Session in the Dooley case. They included:

(1) The need to take decisions promptly and the delay that would be necessitated if investigation had to be protracted investigation of the cause of absence.

(2) Whether any subsequent absences were or were not related to the original industrial injury.

(3) The reason why criteria relating to absences were used included the cost of management time of dealing with absences and their consequences which were incurred regardless of the cause of the absence.

(4) Whether industrial injuries that involved fault on the part of the employee should or should not be included. We have already commented on the fact that the majority's reasoning seemed to depend on no fault injury, whereas their ultimate conclusion was that all industrial injuries should be included.

(5) The system adopted by the employer meant that as a result of the weighting process, in order to be dismissed an employee would have to fare badly under each of the headings. Therefore an employee absent on numerous occasions for whatever the reason, who had a good disciplinary record, was likely not to be at the top of the list overall.

Mr Nicholls also seeks to reinforce the dissenting Chairman's observations, in particular that there may be any number of causes of absence, which it might be said ought morally to be excluded, such as accidents away from work for which the employer was not to blame, or absence on the grounds of death or serious illness of a member of the family, and contends that the fairest course is not to exclude any particular category of absence. He also contends that the minority view of the Chairman that it was a reasonable view for the company to take, simply weakens the argument on behalf of the majority that no reasonable employer could have approached selection as the employers did in this case. This difference of view in the Tribunal only serves to reinforce a proposition that the employer's approach was one which was within the range of reasonable approaches, which could have been taken.

13. Mrs Thompson, for the Respondent, contends that the language of the majority did not reflect their own views but rather a conclusion that the employers in implementing the criteria had acted unreasonably, and in relation to the phrase "scrupulously fair manner" were simply emphasising the need for fairness, particularly where there were fewer criteria being used in the selection process. She refers to Paine -&- Moore -v- Grundy (Teddington) Limited [1981] IRLR 267. In that case the employers sought to agree a redundancy procedure with the relevant trade union but were unable to do so. In the end, the Personnel Officer drew up a list of candidates for redundancy on the last in first out principle, drawn from those employees of the employees who worked on the night shift, as distinct from the day shift. The general manager made two additions to these proposals, first to the last in first out criteria, that the attendance record of people working in the various departments should be considered and also those with alternative means of earning their living. The two appellants' claims for unfair dismissal had been dismissed by the Industrial Tribunal. This Court allowing the appeal (Mr Justice May presiding) set out their view thus at paragraph 6:

"In general terms, if employers are going to rely upon what we will describe briefly as an 'attendance record criterion' in redundancy cases, we think that it is desirable that they should seek to ascertain the reasons for the absences which made up the attendance record of the particular employees concerned and, for instance, if an employee happens still to be absent at the time that the redundancies have been put into effect, that they should try to find out when that employee is likely to return to work. …….

We are not, however, saying, as Mr Field also argued, that absences of a particular employee which are due to industrial accidents sustained by those employees in the employment of the relevant employers are necessarily to be treated in any different way from other absences. It must be a question of fact in each particular case how those matters are to be dealt with."

14. We do not derive a great deal of support from this authority. Firstly, and to state the obvious, it pre-dates what we regard as the clear views both of this Court and the Court of Session in Scotland, set out in BL Cars -v- Lewis and Dooley -v- Leyland Vehicles. Secondly, on the particular facts of the case, in Paine the criteria seemed to have been put together on a somewhat piecemeal basis, as opposed to the balanced and weighted criteria used in this case, criteria which had already been tried and tested by the employers in a previous redundancy situation.
15. We are left in no doubt that the Tribunal were in error in this case in seeking to impose their own views as to the reasonableness either of the criteria or the implementation of those criteria, as opposed to asking the correct question which was whether the selection was one that a reasonable employer acting reasonably could have made. Further even if it could be argued that they did direct themselves correctly in law and did not substitute their own view, their conclusion that no reasonable employer could have applied the criteria as the employers did, was a perverse conclusion, particularly in the light of the reasoning in Mr Skiggs' evidence. We are particularly mindful of the fact that the majority's conclusions appear to be at variance with their reasoning in relation to the issue of whether only no fault injuries should be excluded. We propose therefore to allow the appeal on merits and to substitute a finding that the employee was fairly dismissed.
16. In relation to the compensation claim the appeal lies against that part of the Tribunal's decision which held that a period of illness from 14 January 2002 to September 2002 when the Respondent was certified as unfit for work due to stress, had a causal connection to his dismissal and thus he was entitled to loss of wages during that period. In his written statement prepared for the remedies hearing, the Respondent had made no mention of his illness. When he gave evidence he said that he had been ill and had been signed off for stress, and produced a medical certificate to that effect, but did not seek to relate this back to his dismissal. In final submissions his representative suggested that the illness had been caused by dismissal and as a result the Tribunal allowed the Respondent to be recalled and, indeed, he gave evidence of a causative link; there was no other medical evidence to support that connection. The Tribunal said as follows in paragraph 10:

"Although the way in which the evidence emerged was somewhat unsatisfactory, we were prepared to accept Mr O'Hare's assertion of a causal connection between his dismissal and his subsequent illness"

In dealing with the absence of medical evidence, the Tribunal said as follows:

"14. …… there was no medical evidence before us to establish the causal connection between dismissal and illness but we do not consider such an opinion would have been likely to assist us in any event: if a medical opinion were expressed to the effect that such a connection did exist, it could amount logically to little more than a statement by the doctor concerned that his patient asserted that such a connection existed and he (the doctor) believed him. It seemed to us that we were in no worse position to ascertain the genuineness of such a claim."

15 The juxtaposition of events (the rejection of the appeal and sickness), together with the evidence of the applicant himself led us to conclude that dismissal was the reason for the illness. We therefore considered it appropriate to regard him as continuing to lose his entire salary throughout the period when he was unable in any event to work"

17. Mr Nicholls submits that the Tribunal were in error in simply accepting the Respondent's assertion of a cause or connection in the absence of any supporting medical evidence, particularly against a background where there was no support from the GP's notes and where the suggestion of a connection had only been raised very late in the case.
18. In Andreou -v- Lord Chancellor's Department [2002] IRLR 728 an Employment Tribunal struck out an applicant's originating application by reason of non-attendance. She had alleged that she would not be able to attend by reason of ill-health, the diagnosis given was anxiety. The Tribunal endeavoured to discover further details but regarded the evidence provided as inadequate. An appeal against its strike-out Order failed. At paragraph 65 Arden LJ said the following:

"Stress and anxiety are generic terms …… those terms are likely to cover a range of symptoms differing widely in their severity. Where a party seeks an adjournment on the basis of stress or anxiety, he should expect to produce details of the symptoms, the cause, severity, and so on, or to explain why those details cannot be supplied to the tribunal."

19. In Sheriff -v- Klyne Tugs [1999] IRLR 481 where the Court of Appeal held that an Employment Tribunal had jurisdiction to award damages for personal injury in discrimination cases, Stuart-Smith LJ set out the position thus at paragraph 20:

"20. Mr Pleming's submission on behalf of the respondent also accords with the views of the editors of Harvey on Industrial Relations and Employment Law. At paragraph L534 dealing with sex discrimination, which of course is the same for these purposes, it is said:

' …the measure of damages is to be the same as that adopted by the ordinary courts (s.65(1)(b)), and that means that the tribunal is entitled to make an award for injury to feelings (s.66(4)). Also, of course, compensation will seek to provide reparation for any physical or psychological injuries caused by the discrimination. For this reason it will often be advisable for an applicant to obtain a medical report if she has been subjected to serious stress at work.

21 In my judgment, both the employment tribunal under s.56 and the county court under s.57 have jurisdiction to award damages for the tort of racial discrimination, including damages for personal injury caused by the tort. The question, which may be a difficult one, is one of causation. It follows that care needs to be taken in any complaint to an employment tribunal under this head where the claim includes, or might include, injury to health as well as injury to feelings. A complainant and his advisers may well wish in those circumstances to heed the advice of the editors of Harvey, just referred to, to obtain a medical report. This has particular relevance as the time within which to make a complaint is only three or six months and, unless an adjournment is obtained, an adjudication may follow quite shortly."

20. Mr Nicholls submits that issues as to the nature, extent and cause of an illness would normally require medical evidence, together with detailed evidence of the complainant's condition, symptoms and circumstances in which they arose. In this case the Tribunal had none of that, and beyond the Respondent's assertion and evidence that he had been signed off by reason of stress, there was no medical evidence to relate that to the dismissal, and therefore the exercise which the Tribunal performed in this case could in reality be no more than speculation. Whilst we do not wish to set out strict requirements that every case would demand such a medical report, in the circumstances of this case, where there was evidence that the Respondent had been absent from work due to stress on previous occasions during his employment, and a failure in his written statement and initial evidence before the Tribunal to relate the further illness to the dismissal, the Tribunal were in error in accepting a causal link in the absence of any supporting material. Accordingly, if the appeal on liability had not succeeded, we would have reduced the award by disallowing the loss between January and September 2002.