United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR GALBRAITH-MARTEN (of Counsel) Instructed by: Messrs Veale Wasborough Solicitors Orchard Court Orchard Lane Bristol BS1 5DS
For the Respondent	MR J STANLEY Solicitor Messrs Eversheds Solicitors Fitzalan House Fitzalan Road Cardiff CF24 OEE


 


MR RECORDER DUTTON QC

1. This is an appeal by the Appellant, Craig Parry, from a Decision of the Bristol Employment Tribunal made on 19 February 2002, with Extended Reasons, promulgated on 18 April 2002. The matter comes before us following a preliminary hearing before this Tribunal on 16 September 2002. The Appellant has been represented before us by Mr Galbraith-Marten, of Counsel, and the Respondent by Mr John Stanley, of Eversheds Solicitors. We are grateful to them both.

The background facts

2. The background to the appeal is as follows: the Appellant joined the Respondent as long ago as 10 March 1980. By the spring of 2001 he was employed as a team leader for the International Sales Support Team of the Respondent. There were a number of employees employed at the same grade as the Appellant, which was as a band 4, team leader, and the Tribunal found that there was a practice of interchangeability among the various departments, which the team leaders were expected to manage.
3. In February 2001, the Appellant was told that the headcount in his team was going to be reduced and that the team leader role was effectively discontinued. Later that month, he was given a document headed "A Redundancy Statement" which set out a termination date, by reason of redundancy of 31 May 2001, and the various entitlements which the Appellant would receive. Those entitlements consisted of a statutory redundancy payment and also a contractual redundancy payment of some considerable size (approximately £31,000 odd) which would be dependent upon the Appellant signing a Compromise Agreement to the effect that he accepted the redundancy and would not contest it.
4. The Tribunal recalls that between February and 31 May 2001, the Appellant was given details of three separate roles which the Respondent considered might be appropriate for him. Each of these roles was for a grade 4 team leader in different departments. The Tribunal has recorded that:

"…. it is fair to say, [the Appellant] was unenthusiastic about all three."

In paragraph 3(iii) of the Tribunal's Extended Reasons, they state as follows:

"We are satisfied however that on 22 May 2001 during the course of a telephone conversation with Mrs Forward who was dealing with the matter on behalf of Human Resources, it was made clear to [the Appellant] that the role in what is known as the ADC Department was a role which was available to him and which she expected him to fulfil. The [Appellant] was not prepared to accept that role and despite being urged to attend for work in order to fulfil it, he refused to do so and it was eventually accepted that his employment came to an end on 31 May 2001."

That is a finding of fact, by which we are bound. However, the Tribunal had before it as its central issue, the question as to the reasonableness of that refusal. The Appellant's case before the Tribunal was that he was redundant, and that he was therefore entitled to, and expected his redundancy payment. The Respondent' primary case before the Tribunal was that no such redundancy payment should be made.

The issues before the Tribunal

5. Before the Tribunal, the Respondent's first argument was that there was no redundancy situation at all and that there was therefore no dismissal by reason of redundancy. The Tribunal rejected these arguments, holding first, that there was no contractual right for the employer to move the employee to the ADC, or impliedly any other post, and, secondly, that even if they were wrong about that, nonetheless, on the facts of this particular case, there was a dismissal by reason of redundancy, because even if the Respondent did have the contractual right to move the Applicant without his consent, the Respondent did not avail itself of it. It is important for us to bear in mind that this was an area of dispute for resolution by the Tribunal, for reasons which we shall come to later.
6. The Tribunal went on to hold that the notice of termination having been given, and expiring on 31 May, the termination of employment took effect on that day. Those points meant that the issues which remained to be determined were, firstly, whether the "ADC position" constituted suitable alternative employment. Secondly, if so, the Tribunal had to determine whether the Applicant acted reasonably in refusing the offer of alternative employment, and, in particular, the offer of the ADC position, as it is described in the Decision, upon which all concentration was placed by consent between the parties in this appeal.
7. In paragraph 7 of the Tribunal's Decision, the Tribunal has recorded that Mr Galbraith-Marten, on behalf of the Appellant, had conceded that the offers of employment which were made to the Applicant were, indeed, offers of suitable alternative employment, or, at least, he made such a concession in respect of the ADC position. The Tribunal, therefore, concentrated the balance of its reasons on the question of the Applicant's conduct in refusing that offer. For, if the refusal of that position had been unreasonable, such a finding would be sufficient to dispose of the case.
8. The Appellant put forward three reasons as to why his refusal of the ADC role was a reasonable one. The first was that he felt that the ADC move was a retrograde step in terms of his career, because it was his perception that it took him further away from the sort of career path which he had planned out for himself. The Tribunal concluded, on this issue, with the following finding:

"…. it is very clear from the evidence that this was a role which had precisely the same banding as the role he had lost; it had the same pay, it had the same status; it had the same sort of duties and responsibilities."

It then went on to say as follows:

"It could not, looked at on any objective basis, be perceived as a retrograde step by others who knew the applicant had taken the job. At the most, it seems to us, it could only have been regarded as a sort of plateau on the applicant's path towards improvement and growth within the company. In all those circumstances it does not seem to us, particularly when we see the nature and extent of the duties which the role involved, that the applicant really behaved reasonably in saying that this was a retrograde step to the extent that justified him in refusing to accept it."

9. The second reason for rejecting the ADC role was put forward by the Appellant at the Tribunal as a question of its permanence. The Appellant said that he was concerned that he felt the role was unlikely to be a permanent one. In paragraph 9 of the Decision, the Tribunal rejected this ground, stating that it was very clear to them that the person in charge of the section, to whom the Appellant would be reporting, gave him an unequivocal assurance there was no prospect of this role being temporary, and that insofar as any role within any large organisation is a permanent role, this would be a permanent position.
10. They went on to reject the Appellant's contention, holding that he could not reasonably have concluded, in the circumstances, that this was a temporary role. They record that he had clear and categoric assurances from the person to whom he would be reporting that it was not, and that, other than general suspicions and knowledge of changes in the wind, within the global organisation there was really no other evidence from which he could reasonably have concluded that this was role whose days were numbered. They therefore rejected this second reason for the refusal.
11. The third reason put forward by the Appellant for refusing the post was that the Appellant wanted to be assured that he would have a trial period before embarking upon the ADC role. The Appellant made the point that if he had been given, before 31 May (the effective date of termination) a written assurance that he would have the one month trial period, which is referred to in section 138 of the Employment Rights Act 1996, then he would have tried the new role. The Tribunal rejected this third reason, with the following sentences:

"It seems to us that he would have been entitled to that trial period anyway under section 138, and although it is certainly true that he had no written confirmation from the respondent that this was their understanding of the position, it does seem plain from the letter which the applicant received very shortly after 31 May that he was being reassured that he was not expected simply to embark on this role without either monitoring, training or induction. It was quite clear that significant efforts were going to be made to ensure that he settled well into the role and that was something which, in our view, should reasonably have reassured him."

They conclude, see paragraph 11, that they could not find that in this situation, the Applicant acted reasonably in refusing the alternative roles which were offered to him.

12. It has become clear to us, during argument, that the Appellant was contending that he had a significant concern about the trial period and it is necessary for us to explain what this was. It seems clear to us that the Appellant and the Respondent discussed the question of a trial period, in a telephone conversation on 22 May 2001, and the Appellant's note of that conversation, as well as his witness statement, in evidence before the Tribunal, and the witness statement of Mrs Forward, referred to the question of a trial period being mentioned on 22 May. According to the Appellant's note, as to which there is no specific finding on this particular point, he wanted the trial period arrangements to be agreed in writing. He claims that he did so because he was concerned about whether, if the trial did not work, he would still be entitled to his contractual redundancy payment of £31,000 odd.
13. The Tribunal has recorded (see paragraph 9) that he had concerns about the contractual redundancy issue, but they do so in the context of the issue of permanence, to which I have already referred. The Appellant contends that it was his case before the Tribunal that he should have had written confirmation of the trial arrangements in writing, before his dismissal took effect on 31 May, simply so that he could know where he stood. It is, he contends, against that background that the Tribunal had to make findings as to whether or not he acted reasonably in refusing the offer. According to the Respondent, in argument before us, they have contended that he never did say that he required this to be put in writing on 22 May, but they go on to say that even if they did, it was not reasonable for him to refuse the offer, because, firstly, he knew that there was a right to a trial period, under the contractual redundancy policy which applied between the parties, and, secondly, subsequent letters sent by the employer on 1, 6 and 7 June 2001, confirmed it.
14. Having heard argument, it seems to us that in order to resolve this issue, the Employment Tribunal needed to ask and answer certain fundamental questions. First, what was the Applicant's state of knowledge and understanding about the trial period before 31 May 2001? That involved them asking was there an agreement or arrangement made on 22 May 2001 that the Appellant would receive written confirmation before 31 May 2001 that he would have a trial period, and setting out within the written confirmation, what the terms of that trial period were going to be? Then they had to ask, depending upon the outcome of that factual enquiry, whether his refusal to accept the ADC role was reasonable or not? We shall return to these points later, when we consider the third and fourth grounds of appeal, to which they are most pertinent.

The grounds of appeal

15. In the amended Notice of Appeal, the Appellant puts forward four grounds upon which he challenges the Decision, namely, first, that the Tribunal:

"Reached a perverse Decision in finding that the alternative role offered to the Appellant had the same sort of duties and responsibilities as his existing role, in the light of the uncontested evidence that the new role did not include a 'strategic function' which had made up approximately one third of his previous role."

Second, that

" ….. the Tribunal misdirected itself in relying on its objective perception of the ADC role rather than looking at the matter from the Appellant's point of view;"

Third, that the Tribunal:

"Misdirected itself and/or reached a perverse decision in finding that the Appellant acted unreasonably in trying to agree the terms of a trial period in the new role simply because he was entitled to a trial period by virtue of s. 138 of the Employment Rights Act 1996, a fact of which he was unaware"

Fourth, that the Tribunal

"Misdirected itself and/or reached a perverse decision in finding that a letter sent after the termination of the Appellant's contract of employment could be relied upon by the Respondent to show that the Appellant acted unreasonably in not accepting an offer of alternative employment"

Each of these grounds has been expanded upon in oral submissions before us today. It is fair to point out that the first and second grounds are inter-related, as are the third and fourth.

16. Before turning to the merits of each of these grounds separately we remind ourselves that our function as an Employment Appeal Tribunal, is, as it is well known to both parties in this case, to consider first, whether the Tribunal has misdirected itself in law, or, second, whether the Tribunal has reached a perverse Decision on the facts. It is, of course, also the function of the Employment Tribunal to make sufficient findings of fact which demonstrate that they have resolved the major points of dispute between the parties. If they have failed to do that, then their Decision is susceptible to being set aside, albeit for the purpose of ensuring that the case is remitted to them, so that they can address these essential factual points.
17. Turning to the first ground. In support of the first ground, Mr Galbraith-Marten sought to argue, by reference to the Notes of Evidence, that a finding of unreasonableness by the Tribunal, because the work had the same duties and responsibilities as the existing role, was simply not open to the Tribunal, because the role did not include a strategic function, which had made up approximately one third of the previous role.
18. It was conceded before the Tribunal below that the offer of the ADC role was an offer of suitable alternative employment, but as we were reminded, by reference to Cambridge District Co-operative Society -v- Ruse [1993] IRLR 156, the fact that an offer may be suitable alternative employment, does not preclude the Employment Tribunal from finding that the Respondent has not discharged the burden of showing that the refusal was unreasonable. This is so, as Mr Stanley conceded in argument, because when examining the question of reasonableness of a refusal, the Tribunal must ask whether the refusal was reasonable from the employee's point of view. This is to be found in paragraphs 17 and 18 of the decision, where the Employment Appeal Tribunal said:

"We consider that, as a matter of law, it is possible for the employee reasonably to refuse an objectively suitable offer on the ground of his personal perception of the employment offered. The question of the reasonableness of the refusal is a matter of fact for the Tribunal."

19. Apart from this acceptance before the Tribunal, which they were fully entitled to take into account, we note from the Decision that the Tribunal, in paragraph 8 was, in effect, summarising in overall terms, the proposed new position. They referred to the fact that it had the same banding as the role that had been lost; they referred to the fact that the rate of pay was the same; they referred to the fact that the position had the same status. It is in respect of this last that the criticism is made. That is in relation to the sort of duties and responsibilities. In respect of this we have carefully been through the documents, and we are unable to say that there was no evidence before the Tribunal upon which the Tribunal could reach the conclusion that the duties and responsibilities were of the same sort as that in the previous job.
20. In reaching this conclusion, we have noted that it was not accepted by the Respondent to this appeal, and does not appear to us to have been accepted below, that there was a loss of the strategic function or that this particular function accounted for one third of the role as a whole. During argument, we referred to a question and answer of Mr Ruse in cross-examination, when he gave an answer, in agreement with Counsel for the appellant, that there was a difference in the strategic role, and we were referred to some of the Appellant's evidence on the point. But, equally, the Respondent's representative was able to point to evidence which went the other way, and which the Tribunal were perfectly entitled to accept in reaching their conclusion. For example, there were the witness statements of Mrs Forward and the witness statement of Mr Russ, all of which had to be considered by the Tribunal. This, if we may say so, is a classic area of a Tribunal reaching a conclusion, having heard the evidence of the various witnesses, and it is not one which we think begins to meet the requirements of perversity, which are well known.
21. The second ground of appeal is that the Tribunal misdirected itself in relying on its objective perception of the ADC role, rather than looking at the matter from the Appellant's point of view. In advancing this submission, Mr Galbraith-Marten highlights the following phrase in particular, in paragraph 8 of the Tribunal's Decision:

"It could not, looked at on any objective basis, be perceived as a retrograde step by others who knew the applicant had taken the job."

This, he said, demonstrates that the Tribunal was in reality applying an objective test when determining whether the Appellant was acting reasonably in refusing the job. He says the Tribunal was not looking at the question of reasonableness from the Appellant's point of view, as Ruse requires.

22. Before resolving this second ground, we remind ourselves that on this question it was for the Respondent to prove that the Applicant behaved unreasonably, and, secondly, the Tribunal had to look at the job offer from the Applicant's point of view. Thus it follows that there is a subjective element to the test, i.e. "looking at this offer from the Applicant's point of view, did he behave unreasonably in refusing the offer?" The question of whether or not he acted unreasonably must of necessity involve some element of objective assessment, for, otherwise, an employee could simply say from his own subjective point view, that he was going to refuse all offers because they did not suit him, no matter how suitable the offers were, and no matter how capricious his conduct.
23. Mr Galbraith-Marten accepts that that cannot be the position, and there must, therefore, be an element of objectivity involved in the exercise. The test, therefore, combines a subjective and objective element. The question, so it seems to us, is whether the Tribunal misdirected itself in the paragraph on which Mr Galbraith-Marten relies, viewing that passage, as we must, in the context of the Decision as a whole.
24. In determining this question, we paid very careful attention to the Tribunal's Reasons, and we have concluded as follows: first, in paragraph 7, the Tribunal clearly direct themselves correctly as to the law, when they stated

"in deciding this point we remind ourselves firstly, that it is for the respondent to prove that the applicant behaved unreasonably and secondly, that we should look at it from the applicant's point of view. It is to that extent a subjective test."

This succinctly and accurately states the law.

25. In the subsequent paragraphs, the Tribunal is turning its mind, so it seems to us, to the three reasons advanced by the Appellant for his rejecting the offer. It is necessary to read the whole of paragraph 8, and not simply the passage relied upon by Mr Galbraith-Marten, as he fairly accepts. Although the Tribunal referred to "looking on any objective basis" in the middle of paragraph 8, they go on to conclude:

"In all those circumstances it does not seem to us, particularly when we see the nature and extent of the duties which the role involved, that the applicant really behaved [un]reasonably in saying that this was a retrograde step to the extent that justified him in refusing to accept it."

It follows that the phrase "looked at upon any objective basis" is sandwiched between a correct direction is law and the eight lines before, and a finding on the question of reasonableness which immediately follows. In the circumstances, we conclude that there was no misdirection occurring here.

26. We consider that the Tribunal was, when using the phrase "on any objective basis" in paragraph 8 of the Decision, using this phrase to judge the reasonableness of the Appellant's conduct, otherwise one is driven to the conclusion that the Tribunal would have forgotten the correct test which they had set out only eight lines before, and we are fortified in this conclusion by the rest of paragraph 8. In those circumstances, we reject the second ground of the appeal.
27. The third ground of the appeal is that the Tribunal misdirected itself or reached a perverse decision in finding that the Appellant acted unreasonably in trying to agree the terms of a trial period in the new role simply because he was entitled to a trial period by virtue of section 138 of the Employment Rights Act 1996, the fact of which he was unaware. And the fourth ground, which we consider at the same time as this ground, is that the Decision was perverse in finding that a letter sent after the termination of the Appellant's contract of employment could be relied upon by the Respondent to show that the Appellant acted unreasonably in not accepting an offer of alternative employment, or that it misdirected itself.
28. In order to resolve these two grounds, it is necessary for us to rehearse some of the findings made by the Tribunal in their Extended Reasons. First, it was common ground, and the Tribunal found, that the date of termination was 31 May 2001. Second, the Tribunal heard evidence from Mrs Forward, the Human Resources Director, as well as from the Appellant, as to the telephone conversation which occurred on 22 May 2001.
29. There was, as we have said, a dispute as to what was said in that telephone conversation, and in support of his version, the Appellant produced a note which is in page 51 of the bundle, which is timed at 3 pm on 22 May, and in which he records:

"Discussed trial period of one month and the need to document and agree terms. AF will draw this up this week and we'll then all meet to sign agreement."

There was a clear dispute as to the terms of this conversation. Mrs Forward, the witness for the Respondent, said in her evidence to the Tribunal first that the ADC role was being made available to the Respondent and that she expected him to fulfil it. According to her evidence-in-chief, she stated this:

"During this conversation Craig Parry agreed to accept the role as Team Manager in the ADC Department. He did request a trial period, which I said I had no problem with, and we agreed that he would start at the beginning of June. I said that a letter would be sent to him in this respect but did not specify any dates."

But the Tribunal have nowhere said that they have preferred this evidence in its totality to that of the Appellant.

30. We note that Mrs Forward also referred to an e-mail of 22 May, which is not before us, which she said set out her clear understanding of the conversation which she had had. It was necessary, therefore, for the Tribunal to make findings, so it seems to us, as to the question as to whether there should be agreement in writing as to the trial period, prior to the effective date of termination, 31 May 2001, so that the Appellant could know where we stand. In paragraph 3(iii) of the Decision, the Tribunal say:

"We are satisfied however that on 22 May 2001 during the course of a telephone conversation with Mrs Forward who was dealing with the matter on behalf of Human Resources, it was made clear to [the Appellant] that the role in what is known as the ADC Department was a role which was available to him and which she expected him to fulfil."

The Tribunal needed, as we said, to make a finding with regard to the issue of whether or not there were to be arrangements in place, prior to 31 May, for the trial period. We do not agree with the contention put forward on behalf of the Respondent that we can infer that such findings were made, from paragraph 3(iii) or paragraph 10 of the Tribunal's written reasons.

31. The Tribunal does go on to comment that the Appellant would have been entitled to a one-month trial period, in any event, under section 138 of the Employment Rights Act 1996. We understand that that observation arose as a result of the Tribunal's own idea. That of itself does not address the key issue as we have identified it. They say:

"….. although it is certainly true that he had no written confirmation from the respondent that this was their understanding of the position, it does seem plain from the letter which the applicant received very shortly after 31 May that he was being reassured that he was not expected simply to embark on this role without either monitoring, training or induction."

32. Mr Stanley, on behalf of the Respondent, urged us to conclude that although the letter here referred to was written after the dismissal, the Tribunal must have been making this observation in the context of an inferred finding that the Applicant knew there was to be a trial period and/or that there was to be no arrangement made in writing as to the trial period, prior to 31 May, or, indeed, if there was, it was unreasonable for the Appellant to insist upon it. We regret to say that we are unable to draw those conclusions from this paragraph. It is true that the Tribunal go on to say:

"It was quite clear that significant effort were going to be made to ensure that he [the Appellant] settled well into the role and that was something which, in our view, should reasonably have reassured him."

But it is fair to point out that those observations are made in the context of a paragraph referring to a letter being written after 31 May.

33. During the course of argument there has been some concentration on the redeployment and redundancy policy which was agreed between the parties. It is the Appellant's contention that although this is a contractually binding policy, he was entitled to know, prior to 31 May, whether or not he was going to undergo a trial period or, as was in fact being contended before the Tribunal, whether he was being redeployed into the same work as the policy provides for, see page 47, so that no trial period would in fact be required. It is not for us to rule upon this particular question, but we have recited it in order to identify the points that were being made. It is common ground that there was no letter of confirmation; that there was to be a trial; and that the contractual redundancy payment arrangements would apply if the trial did not work out.
34. Mr Stanley, in argument before us, relied, as he did before the Tribunal, on the letters of June, relating to this question. The first, in a series of letters, is from the Appellant to the Respondent of 1 June 2001, and he says, in the second paragraph:

"You will recall that [to Alison Forward] during that conversation [referring to 22 May conversation] we discussed the vacancy within ADC and we agreed that you would discuss the Redeployment Trial Period with Julian Russ, and provide a formal offer letter with a document laying out the terms of the trial period, which we would all sign."

On 1 June, (page 53), the Respondent sent a letter saying:

"I am pleased to confirm your transfer to the role of Team Manager within ADC with effect from 1^st June 2001."

But that letter says nothing about the trial period.

35. The next, in date sequence, is the Respondent's letter of 6 June, upon which Mr Stanley places a great deal of reliance. In particular, he relies upon the last two paragraphs. He refers to the following:

"I also said that we could hold a meeting with Julian to establish expectations and arrange a review after a month to ensure you were getting the necessary training to ease you back into Operations. You were concerned that performance management was different and I added that you were supposed to be following the same system as in SLI. There was no requirement for a formal document to be signed in advance of your new role. Once you had moved to ADC, Pam Hasson as your HR Manager would be available to provide you with any support you needed to see you through the transition period.

Your new role in ADC remains open for you, and I include a copy of the induction programme that Jon Ellis has prepared for you with Julian, and which you would have received yesterday if you had arrived. Jon Ellis has put in a lot of work to prepare this induction and a development plan. Please consider your position carefully and let me know when you are going to take up your new role. We are quite clear that this role constitutes suitable alternative employment. Please realise that in rejecting suitable alternative employment you are not automatically entitled to a redundancy payment."

36. We agree with Mr Stanley that the Tribunal was perfectly entitled to take these letters into account in its overall assessment of the question of the reasonableness of the Appellant's refusal of the ADC role, but in considering the question of the reasonableness of an offer and the reasonableness of a refusal, it is essential that the offer should be made prior to the effective date of termination, and the question of the reasonableness of the refusal, prior to that date, has to be assessed by reference to that date; it cannot be assessed solely by reference to events occurring afterwards, although if the events that occur afterwards are part of a series of events, they can, of course, as Mr Stanley urges upon us, be taken into account in assessing the question of reasonableness.
37. The problem we have in this case is that we are unable to find that the Tribunal did address these issues in their Decision. We cannot find them doing so in paragraphs 3(iii) of the Decision, nor in paragraph 10, and, in those circumstances, we are simply unable to say that the Tribunal has in fact ruled upon the very question which the Appellant was asking them to rule upon, in determining whether or not his refusal was unreasonable. We remind ourselves that the burden of proving that his refusal was unreasonable was upon the Respondent, and, in those circumstances, and to the extent that we have identified in this Decision, we uphold grounds 3 and 4 of the grounds of appeal and will direct that the case be remitted to the Tribunal.
38. It may be of assistance to remind the Tribunal that we think the critical questions for them to look at are the following: first, the state of knowledge that the Appellant had about the trial period and how it was to operate, prior to 31 May 2001. Second, was there an agreement or an arrangement made on 22 May that he would receive written confirmation before 31 May that he would have a trial period, and as to what its terms were? And, third, depending on the answers to those questions, was his refusal reasonable or unreasonable?

[Discussion]

Well what we have in mind is the same Tribunal, if it can be arranged.

[More discussion]

39. Mr Galbraith-Marten, we consider that it would be better for the case to be remitted to the same Tribunal, for the reason given by Mr Stanley that, actually, given the delay, it is probably better that a Tribunal that has heard the evidence and whose memories will have it lurking there, somewhere, will be assisted by that.
40. We would add this proviso, given the problem of delay which Mr Dawson has mentioned, as have you, that it should be remitted to the same Tribunal if that can reasonably be arranged, so that if you do find that the parties are running into difficulty, we are not stipulating that it should only be, but if it can be arranged.