At the Tribunal | |
Judgement delivered on 7 October 2003 |
Before
HIS HONOUR JUDGE D SEROTA QC
MS S R CORBY
MRS J M MATTHIAS
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
Revised
For the Appellant | MR A SENDALL (of Counsel) Messrs Addleshaw Goddard Solicitors 100 Barbirolli Square Manchester M2 3AB |
For the Respondent | MR E LEGARD (of Counsel) Messrs Thompsons Solicitors St Nicholas Building St Nicholas Street Newcastle upon Tyne NE1 1TH |
HIS HONOUR JUDGE D SEROTA QC
Introduction
"by notices given on or after 15 March 2002"
The Tribunal thereby excluded some 277 employees. Mr Sendall, who appeared on behalf of Dewhirst, with his customary fairness and realism conceded the point at once. Accordingly, we allow the cross-appeal and need say no more about it.
Statutory provisions relating to protective awards
"(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 affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.
(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."
Section 188 (1B) provides where an employer recognises an independent trade union as representing the employees, the appropriate representatives will be representatives of the trade union. There is no dispute that in this case representatives of GMB are the "appropriate representatives".
"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."
"Where an employer has failed to comply with a requirement of section 188 ….. "
(2) If the Tribunal finds the complaint well-founded; it is required to make a declaration to that effect and may also make a protective award"
[Section 189(2)]
A protective award is an award in respect of one or more descriptions of employees:
" (a) who have been dismissed as redundant … and
(b) in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188,
ordering the employer to pay remuneration for the protected period."
Section 189(4) reads as follows:
"The protected period -
(a) begins with the date on which the first of the dismissals to which the complain relates takes effect, or the date of the award, whichever is the earlier, and
(b) is of such length as the tribunal determines to be just and equitable in all the circumstances having regard to the seriousness of the employer's default in complying with any requirement of section 188;
but shall not exceed 90 days."
The factual background
"By 25 January 2002 according to Mr King in paragraph 7 of his statement we quote: "The only option (our emphasis) seemed to be to transfer our Leechmere products to our Moroccan site at the end of the Spring season by mid May 2002. This would turn the previously forecasted loss into profit and still leave us with a manufacturing site in UK namely Ashington." He goes on to say that in the following two weeks this option had to be examined and agreed by the Group. He was the managing director of this particular location and by this stage a budget had been set, thus demonstrating at least finality of conclusion ….."
"Therefore at least by that stage on 7 February if not earlier not only was closure envisaged but the reasons for it were well known within the respondent's management and that therefore dismissals would be inevitable. It was at that point in time that the respondents invited …… the GMB, to consultations."
The matter is not dealt with in the Decision of the Employment Tribunal, but Mr Sendall conceded before us that the Board of Dewhirst (as opposed to Dewhirst Group) knew by 25 January of the proposal that was put to Dewhirst Group on 6 and 7 February.
The Decision of the Employment Tribunal
"6 We have to say somewhat reluctantly given the difficulties which we appreciate that the respondents faced that the inevitable conclusion that that part of subsection (2) had not been adequately fulfilled, but more particularly consultation had not begun before the point in time when it would be possible to meaningfully undertake consultation to avoid dismissals. Closure is bound to involve dismissals in the circumstances of the findings of fact in this case.
7 It therefore follows that we have to conclude that the requirements of section 188 have not been fully complied with despite what we must say were valiant efforts to comply with them. Had not the inevitability of closure on economic grounds been arrived at in collective minds of the respondents in January then the situation might have been somewhat different. Once that conclusion was reached it is virtually impossible, if not having undertaken consultation with the Union before that time, to have any meaningful consultation which would have the effect of complying with the requirements of subsection (2)(a), the requirement of avoiding dismissals."
Authorities on the phrase "where an employer is proposing to dismiss as redundant …."
"We respectfully adopt Glidewell LJ's view in Vardy, supra, that 'proposes' relates to a state of mind which is much more certain and further along the decision-making process than the verb 'contemplate'."
We also quote from paragraph 44:
"… we are left with the task of seeing whether employment tribunal erred in law, that question to be approached on the basis that, on a straightforward construction of the language of s.188, a 'proposal' to dismiss within it emerges, if at all, at a stage later than the 'contemplation' of redundancies. Of the meanings of 'to propose' given by the Shorter Oxford English Dictionary, perhaps the most fitting in context is 'to lay before another or others as something which one offers to do or wishes to be done.' "
Submissions in relation to the trigger date
Submissions on breaches of section 188 by Dewhirst
"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."
H H Judge Clark put the matter in this way (see paragraph 28):
"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."
We also bear in mind the approval by Glidewell L J of a passage in Harvey in R -v- British Coal Corporation Ex parte -v- Vardy [1993] IRLR 104:
"I agree with the passage in the current edition of Harvey on Industrial Relations. In paragraph 1365 the learned editor says:
'In substance, the Act places on employers an obligation to plan any redundancy programme well in advance, and to do so in conjunction with the unions where appropriate. Although it is mainly directed at larger-scale redundancies, it should be emphasised that its provisions also apply where the employer proposes to make even one single employee redundant … However, according to the interpretation so far placed upon the Act by the English courts, the obligation is not so much to consult with the unions on whether there should be redundancies, but rather to consult on how to carry out any redundancy programme which management deems necessary."
"a more negative than positive attitude to solution finding an attitude characterised rather more of inviting the union to make suggestions and an employer simply relying upon its past efforts as if they are to some extent illustrative of what would be the expected result if any further efforts were made in the future."
However, he was sufficiently realistic to concede that the last part of paragraph 7 of the Employment Tribunal's Decision did not sit happily with its earlier findings as to the effective trigger date.
"In good time"
"Secondly (although it may, with the first step described above, form part of one integrated decision-making process), the employer has to form a view as to how long (given willingness and good faith on both sides and given that agreement has to be taken to be at least possible) it could reasonably be expected to take to negotiate an agreement covering at least the minimum subjects specified in Article 2(2). That exercise would provide the employer with a number of days. As we read it, the scheme of the Directive then requires a jobbing backwards such that consultation under the Directive is required to begin not less than that number of days before the contemplated collective redundancy date."
Here, Lindsay J is of course talking about the obligation under the Directive. At paragraph 40 he returned to the topic, having considering a number of domestic authorities.
"Our view of these domestic authorities (none of which binds us) does not require us to depart from the conclusion expressed above as to the point of time at which, under the Directive, consultation has to begin. Whilst it is not necessarily the case that the beginning of consultation has to coincide with the employer's first contemplation of collective redundancies, it is at that point that he must turn his mind to the 'jobbing back' exercise that we described in our paragraph 30 above. That jobbing back then identifies when consultation should begin in cases where the Directive applies."
Amount of protective award
"It seems to us that when the decision is taken, the question that has to be looked at is not the loss or potential loss of actual remuneration during the relevant period by the particular employee. It is to consider the loss of days of consultation which have occurred. The Tribunal will have to consider, how serious was the breach on the part of the employer? It may be that the employer had done everything that he can possibly do to ensure that his employees have found other employment. If that happens, a Tribunal may well take the view that either there should be no award, or, if there is an award, it should be nominal. It does not seem to us that the Tribunal has to be satisfied, before it can make an award, that the employees have been paid during the relevant period. Indeed, if the application is made before the dismissals take place, these facts may not be known. It might be quite impossible to know until the end of the period, what is the position so far as earnings from the same employer or from other sources are concerned."
[See paragraph 30.]
In Talke Fashions -v- Amalgamated Society of Textile Workers and Kindred Trades [1977] IRLR 309, the EAT, presided over by Kilner Brown J held that the Employment Tribunal should have exercised its discretion as to whether to make a protective award adopt a broad and equitable approach, having regard to the loss of meaningful consultation and the gravity of the employer's default. In the present case, the Employment Tribunal evidently felt that fifteen days for the protective award was appropriate. There is no reasoning to support its conclusion. Further, its approach was falsified by not only its view that Dewhirst was in breach of its obligation to engage in meaningful consultations, as at 25 January 2002, in relation to avoiding dismissals, but also because of its incorrect approach as to the date when the protected period commenced under section 189(4). The Employment Tribunal may not have understood the submissions made to them by Mr Legard and Mr Sendall. Both made it clear to us that in their submissions to the Employment Tribunal they had not suggested that the protected period accrued before the date when the first dismissals were to take effect. The Employment Tribunal may have conflated the issue of the commencement of the protected period with the length of the protected period and protective award.