United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR CHRISTOPHER SAUNBY Solicitor Messrs Toller Hales & Collcutt Solicitors 2 Castilian Street Nottingham NN1 1JX
For the Respondent	MR B BEDFORD (of Counsel) Instructed by: Messrs Thompsons Solicitors Price House 37 Stoney Street The Lace Market Nottingham NG1 1NF


 


HIS HONOUR JUDGE J BURKE QC

1. This is the preliminary hearing of the employer's appeal and the employee's cross-appeal against the Decision of the Employment Tribunal sitting at Leicester, chaired by Mr Threlfell, and promulgated with Extended Reasons on 14 November 2002. Because there is number of issues to which it is necessary for us to refer, it might be fair and helpful to the parties if we indicate at the outset that we propose to allow both the employer's appeal and the employee's cross-appeal to go through to a full hearing, to a limited extent only.
2. The employee, who is of Asian ethnic origin, was employed by the employers as a quality assurance technician, whose job was to check inward goods received, to take samples of such goods to the employer's laboratory and himself to carry out some basic tests. The employers manufactured foods for retail outlets, in particular Marks & Spencer. The premises were substantially a factory or manufacturing and processing plant. It is apparent that there was at the premises a section, which may or not have been a separate building, which embraced a laboratory.
3. In 1999 the employers decided to carry out a regrading exercise; that exercise took a long time to complete. The employee was not happy with the result of that exercise so far as his job was concerned. He was originally graded at the lowest level, grade 3. On appeal, his post was regraded to grade 2; but he still felt that his job should have received a higher grade, at grade 1; and he complained that the failure to grade his job at grade 1 was discriminatory. The Tribunal treated that complaint as a protected act.
4. He had previously made a claim of racial discrimination against a sister company of the employers, the individual in that sister company concerned in the complaint being a Ms Jones, who was also a senior HR manager for the employers in this case, and played a part in the history which led to the complaints with which the Tribunal dealt in the Decision now under appeal. The earlier claim was compromised.
5. As the regrading process was ending, management decided that, for financial reasons, there had to be a reduction in indirect costs. According to the findings of the Tribunal, the decision to undertake an exercise in reducing indirect costs was made towards the end of October 1999. The views of managers were collated by Ms Jones, the HR manager to whom we have referred, in the week beginning 29 October. The exercise involved consideration of the extent to which the posts of staff in indirect roles could be dispensed with. Eventually it was decided that fifteen posts could be identified as redundant, fourteen among salaried staff and one among the hourly paid staff, that one being the post of the employee.
6. The salaried-post union official, who was also president or chairman of the relevant union branch at the employer's premises, was told on 7 November 2001 of the identification of fifteen posts and their postholders; but he was sworn to secrecy until an official announcement was made on 9 November and those who were to go were informed of the employer's decision. Thereafter there followed consultation about redeployment.
7. In the course of consultation as to alternative employment opportunities, after the decision to make him redundant had been taken, the employee raised, or otherwise it emerged, that there had been a recent recruit to the laboratory, although there was, and had been for some time, an embargo on recruitment. The Tribunal found that that new recruit started on 29 October, the very day on which the views of managers as to reductions in indirect costs had been collated by Ms Jones, so that at the time that the employee was told on 9 November that he was to be made redundant, the recruit, if we may so describe her, had been in post for somewhat less than two weeks.
8. When this matter was raised, it was investigated; but the employers decided it would be unfair to the recruit to dismiss her in favour of the employee. Accordingly the employee was dismissed, having rejected alternative work within the factory as a production worker, as we understand it, on 23 November.
9. By the end of the hearing before the Tribunal, the employee's complaints on which the Tribunal had to decide were, firstly, that he had been unfairly dismissed; secondly, that the dismissal constituted direct discrimination; thirdly that he had been victimised (a) in the regrading of his job, and (b) by the dismissal. The protected acts relied upon were the original earlier racial discrimination complaint which was compromised, to which we have referred, and his complaint that he had been discriminated against in relation to the regrading.
10. The Employment Tribunal found that the employee had been unfairly dismissed. They dismissed his claims that he had been the subject of discrimination and victimisation. The employers now seek to appeal against the Tribunal's Decision that the employee was unfairly dismissed; the employee seeks to appeal against the rejection of his discrimination and victimisation claims arising from his dismissal.
11. The Tribunal found that the employee had been unfairly dismissed broadly on two bases. They found that the employer's reason for dismissal was redundancy; but they then went on to find that dismissal for that reason was unfair firstly because there had been no consultation with the employee prior to the announcement of his redundancy and there should have been consultation not only about redeployment after he knew that he was to be made redundant, but at an earlier stage of the proceedings i.e, as the Tribunal put it, at a formative stage of the proposals, when it could have had some prospect of being effective, either to save his job or to enhance the possibility of alternative work. The Tribunal referred to the possibility that such consultations at an early stage would have thrown up the issue about what the Tribunal called "the vacancy" although, on their findings of fact by the relevant time there was a recently filled post rather than a vacancy in the laboratory.
12. They went on to find that the dismissal was unfair for a second reason i.e that it was unreasonable for the employers not to balance against the unfairness of dismissing the recruit so as to make way for the employee the unfairness to the employee of his being dismissed when the new recruit stayed. We should say that there was, according to the Tribunal, no suggestion other than one in the evidence which manifestly failed, that the employee would not have been competent to carry out the job filled by the new recruit. That, we hope, is a sufficient description for present purposes of the Tribunal's approach to the complaint of unfair dismissal.
13. The Tribunal's conclusion on that issue is attacked by Mr Saunby, on behalf of the employers, in a number of ways. His first attack is that the Tribunal failed, in considering whether the employers had acted fairly in dismissing the employee for redundancy, to analyse fairness in terms of the reasonable range of responses or, which he accepts as a similar test, by looking objectively at what a reasonable employer would be expected to do.
14. Mr Saunby points out that in the recent decision of Sainsbury's Supermarkets Ltd -v- Hitt [2003] IRLR 23, the Court of Appeal have reinforced the importance of the reasonable range of responses test, generally and, at least, in relation to conduct cases; and he submits that that approach governs the application by a Tribunal of section 98(4) to the facts of the individual case, wherever section 98(4) falls to be considered. The Tribunal did not say what test they were applying. Reading their Decision as a whole, we have come to the conclusion that it is just arguable that they may have substituted their own view as to what was reasonable for the approach which, arguably, they should have adopted.
15. If that arguable criticism, as we see it, of the Tribunal's approach to the unfair dismissal decision were to be made out, then, of course, the basis of the Decision would be undermined. We therefore think it is right to allow the employers to go through on that argument to a full hearing of their appeal.
16. Mr Saunby, in his Notice of Appeal, and we have used his notice of appeal in order to mark out the employer's case on this appeal, at paragraph 6(1) of the Notice of Appeal sets out, and he has supported the grounds there set out with argument today, that the Tribunal's Decision as to unreasonableness, quite apart from involving an application of a wrong test, involved perverse conclusions. He says and has submitted that the Tribunal failed to take into account or ignored or misunderstood the evidence that, before 9 November, on which day the employee was told of his redundancy, the employers had informed the trade union of the posts and postholders selected for redundancy and the union had agreed that those posts were rightly identified for redundancy and, indeed, expressed their pleasure that only fifteen posts were to go. That, says Mr Saunby, was unarguably sufficient consultation; and a finding that there was insufficient consultation as to the redundancy, as opposed to redeployment post announcement of the redundancy, was perverse. We do not regard this as arguable.
17. In the case of Mugford -v- Midland Bank [1997] IRLR 209 the Employment Appeal Tribunal, chaired by Judge Peter Clark, said, and we will put it shortly, that, while where no consultation about redundancy has taken place with either the trade union or the employee, the dismissal will normally be unfair, it did not follow that where there was consultation with the trade union but not the employee as to redundancy, the dismissal was fair. On the contrary, the Employment Appeal Tribunal, and we agree with what they said for present purposes, said that consultation with the trade union over selection criteria does not of itself release the employer from considering with the employee individually his being identified for redundancy. They went on to say that it was a question of fact and degree for the Tribunal to consider whether consultation with the individual or his union were so inadequate so as to render the dismissal unfair. We do not see how it can be said, in the light of that guidance given by the Employment Appeal Tribunal to Employment Tribunals, that it could have been arguably perverse for the Tribunal to make the decision they did on this issue.
18. Mr Saunby secondly suggests that the Tribunal came to a perverse conclusion because there was, in effect, nothing to consult about because the employee was not in a pool from which selection had to be made but was a one-man pool, there being nobody else who did his job or a similar job, which ranked with him in the same pool. The employee had in fact suggested that there were other people in the pool, but the Tribunal came to the conclusion that their jobs were significantly different and that in effect he was a one-man pool. However the fact that an employee is in a one-man pool does not mean that he could not be the subject of consultation as to whether there is redundancy or not in relation to his job; and we do not think that it is arguable that a Tribunal is making a perverse decision when it decides that such consultation should have been carried out.
19. The purpose of such consultation is not merely in relation to selection, but also to allow the employee the opportunity to seek to persuade the employers that his job should not be made redundant, the fact that the Tribunal later finds that his job had to go may affect remedies and compensation, may be relevant to the familiar arguments under what is called, and we will call for shorthand, the Polkey principle, but it does not render a finding that the lack of consultation was unreasonable a perverse finding. We acknowledge that Polkey envisages cases, which may be rare cases, in which a reasonable employer could properly take the view, on the facts known to him at the time of the dismissal that no explanation or mitigation could alter his decision to dismiss. Indeed, those words are a direct quotation from the speech of Lord Mackay, the Lord Chancellor, in Polkey at page 156D, but it is noticeable that in his closing submissions in writing Mr Saunby did not put forward that aspect of Polkey as opposed to the more familiar aspect of Polkey - what Mr Saunby has called the second limb of Polkey - which goes to the ascertainment of compensation.
20. In the light of what we have just said, in our judgment none of the matters set out in ground 6.1 of the Notice of Appeal which go to support the allegation of perversity is arguable, and there is not an arguable case that the Tribunal, if it applied the right test, as to which we acknowledge that there may be an outstanding question, acted perversely in the result it achieved.
21. Ground 6.2 of the Notice of Appeal we have already addressed. It goes to the question of the right test. Ground 6.3 is further argument on perversity. It raises the contention that the Tribunal's findings were such that the role of the employee had disappeared to a substantial extent and that therefore there was nothing upon which a reasonable employer could consult, other than redeployment; we have already dealt with that argument under ground 6.1.
22. So far as ground 6.4 is concerned, again, assuming that the Tribunal applied the right test, we do not see anything perverse, or arguably perverse, in the conclusion they reached as to the reasonableness of the employer's conduct in concluding that they would retain the recruit and allow the employee to go. The Tribunal found as fact that the employers did not balance the unfairness to the employee against the unfairness to the recruit but made their decision in relation to the point which had been raised by or on behalf of the employee, only on the basis that they believed that to dismiss the recruit would be unfair to her because she was a new recruit and had given up another job, apparently, in order to become a recruit in employment for the employers.
23. In the light of those findings, which involve a rejection of any evidence from the employers that they had carried out a balancing exercise, we do not see that there is any arguable perversity. While this is not entirely canvassed within the Notice of Appeal, it is right to say that Mr Saunby has further argued that, in relation at least to consultation as to redundancy, as opposed to redeployment, such consultation could not possibly have made any difference to the outcome and the Tribunal failed to reflect that. They failed to consider at all, he says, the second limb of Polkey, i.e. whether the missing consultation would have made any difference, which was expressly referred to in Mr Saunby's final submissions.
24. It is correct that the Tribunal do not refer to any application of the Polkey principle, in relation to its second limb at least, in their Decision, but it does not appear that at the beginning of the hearing the decks were cleared by way of establishing whether, should there be a finding of unfairness, the Tribunal were going at that stage of this hearing, as opposed to at a remedies hearing, to consider the Polkey issue. Sometimes Tribunals do consider that Polkey issue at, what we will call for the sake of brevity the liability stage, more often, in our experience, it is dealt with at the remedies stage. Not having been dealt with in this liability decision, it is in full open to the employers at any remedies stage to deploy their arguments on the Polkey principle. We see no error of law on the Tribunal's part in failing to approach that principle at an earlier stage.
25. Accordingly, and we believe that we have dealt with Mr Saunby's arguments now in full, and no doubt he will remind us if we have not, all of the arguments which we have heard and which appear in the grounds of appeal, we regard as unarguable except the first, namely that the Tribunal applied the wrong test for the purposes of section 98(4) for reasonableness.
26. We now turn to the cross-appeal in this judgment (which may or not be of record length, as a judgment in a preliminary hearing, but that is because first of all we have to deal with an appeal and cross-appeal and, secondly, because numerous arguments have been put forward on both). We have, we think, already said, but for clarity, if we have not we repeat, that there is now no appeal against the rejection of the employee's claim that he had been victimised in the grading process. Discrimination and victimisation are now only relied upon in relation to the dismissal.
27. Mr Bedford, on behalf of the employee, started his submission to us by reminding us that in the recent and much quoted decision of the Court of Appeal in Anya -v University of Oxford [2001] IRLR 377, the Court of Appeal established the importance of a Tribunal's not simply accepting the explanation for the alleged acts of discrimination on the part of the employer, and then on that basis, finding that there was no discrimination, and the importance of the Tribunal's going through and making findings in respect of each of what Mr Bedford has called "the charges", probably better described as the circumstances which arguably give rise to an inference of discrimination, levelled against the employer before reaching a final overall conclusion. To do otherwise, it is suggested, is to start at the end, and not to start at the beginning and reason towards the end. That is a very crude way of expressing what is set out in a much more sophisticated form in Lord Justice Sedley's judgment in Anya, but it will suffice for present purposes. He submits that in various respects, the Tribunal here failed to live up to the duties imposed on them by Anya.

[We interpose, we are not sure whether they actually had Anya in front of them or not; the dates may have been such that they did not.]

28. Taking the position again from the cross-appeal and the grounds therein set out, we take the view that, if we look at paragraphs 5c and d, it is at least arguable that in concluding that an inference of discrimination was not to be drawn, and in concluding, as the Tribunal did in paragraph 33 of its Decision, that there was nothing that they could deduce from the facts put before them that suggested that either of the protected acts played any part in the selection of the Applicant for redundancy or in his failure to obtain an alternative job, the Tribunal had omitted to consider some elements of the evidence which might (we do not say for one moment would, but at least could) have caused them to draw an inference adverse to the employers.
29. Those matters are, arguably, the way in which the employers approached the question of the bumping of the recruit out of her job in order to make way for the employee. In the light of the evidence given by Ms Jones, in which she attempted to suggest that the recruit was better qualified than the employee, without any evidence to support it, the evidence given by Ms Jones that she had given the employee details of an engineering vacancy, which evidence was incorrect; the evidence that Ms Jones knew that the employee had threatened proceedings for racial discrimination, and the failure of the employers to answer the race discrimination questionnaire, fully without evasion and in time, and the further matters set out in paragraph 5d.iv of the Notice of Appeal, we regard it as arguable that when the Tribunal said, in paragraph 33, that there was nothing from which we could deduce that either of the protected acts played any part in the decision as to redundancy without mentioning any of the matters to which we have just referred, and when those matters were not referred to, in dealing with the discrimination claim, the Tribunal failed to honour in full the principles which they arguably should have honoured, as they are set out in case of Anya.
30. However, we do not take the same view about Mr Bedford's other submissions. The ground set out in paragraph 5.a.i has already been covered in what we have said; the ground set out in paragraph 5.a.ii does not seem to add anything to what we have said. We do not think it is arguable that, on the basis of what the Tribunal did say, they failed to give any reasons or proper reasons for their conclusions. We have indicated we regard it as arguable that they did not take into account matters that they should have taken into account. Beyond that we do not see it is arguable that there was a defect in their reasoning.
31. We do not agree with Mr Bedford's submission, nor do we think it is arguable, that the Tribunal erred in failing properly to consider or analyse the position of a hypothetical comparator in considering the discrimination claim. The Tribunal said in paragraph 29 that there was no proper comparator; no criticism was made of that conclusion. They then went on to say that they had no evidence to suggest that the Applicant, in relation to the redundancy, was treated any differently from the way a person of a different race would have been treated in the same position. Mr Bedford says that the words "that we have heard no evidence to suggest" mean that they never embarked on the construction of a hypothetical comparator and did not really consider, as they should have done, what would have happened to a hypothetical comparator of a different race but in the same circumstances. We regard that as far too analytical an approach to the Tribunal's use of language; in reality, their sentence from which we have quoted was intended to convey, and does convey, their conclusion that they had considered the position of a hypothetical comparator and had come to the conclusion, on the evidence on the primary facts, that a hypothetical comparator would not have been treated any differently from the way in which the employee was treated.
32. We see no arguable error of law in that approach, or in what the Tribunal have said about their approach to the hypothetical comparator.
33. We think that in that we have covered the points taken by Mr Bedford as well, and again, invite him to correct us if that is an unfair impression of his submissions.
34. Accordingly, we have given reasons why we reject those grounds in the case of each ground that we reject. We have explained shortly, though it is certainly not necessary to do any more, the reasons why we have allowed to go to a full hearing those grounds of appeal and cross-appeal, which we have identified. Let us say three hours with liberty to apply [for the notes] Category C, usual directions for Skeletons, Practice Direction applies to Skeletons, authorities and everything else.