United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS A GUMBS (of Counsel) Instructed by: Messrs Jack Thornley & Partners Solicitors 8 Warrington Street Ashton-under-Lyne Lancs OL6 6XP
For the Respondent	MR B McCLUGGAGE (of Counsel) Instructed by: Messrs Hammond Suddards Edge Solicitors Trinity Court 16 John Dalton Street Manchester M60 8HS

SUMMARY

The application of section 188 - question of trade union consulting in situation where redundancy was not physical dismissal but re-negotiating the terms and conditions of employment


 


HIS HONOUR JUDGE D PUGSLEY

1. Those who have professional experience of the recession in the 1980s, both in the early and the later part, will know very well that this provision of the Act, which is now section 188 was designed to protect employment, to protect the precipitate decision to dismiss being implemented or made, before opportunities had been given to at least consult with the recognised trade union about avoiding redundancy. The section applies when it is proposed to dismiss as redundant 20 or more employees.
2. The section aims to ensure that there was consultation and that should include consultation about ways of avoiding dismissal, reducing the numbers of employees to be dismissed and mitigating the consequences of dismissal, and should be undertaken by the employer with a view to reaching an agreement with the appropriate representative. Sub-section 7 of section 188 says that:

"If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection 1A, (2) or (4), the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances."

3. The primary facts are set out to the decision in paragraph 5 onwards:

"5 The Respondent carries on business at Manchester Airport, an international airport, and provider of ancillary support staff. Manchester Airport Aviation Services (MAAS) is a trading division of the Respondent which provides security services for terminals 1 and 2. A separate limited company called MAAS Ltd provide security for Terminal 3. A separate division of the respondent known as MA Division actually runs the airport itself and, following a company re-organisation in June 2001, the various divisions within the respondent effectively traded as separate concerns with a view to improving efficiency. This resulted effectively in MA Division becoming MAAS's customer.

6 Although, therefore, all of the individual applicants were at all material times employed by the respondent, the division for which they worked was MAAS. The applicants were at all material times members of the Transport and General Workers Union (TGWU) and that Union was recognised as their appropriate representative for the purposes of consultation.

7. Although the respondent is owned by the Greater Manchester Local Authorities, it is a public limited company and required to be run on commercial lines. It is also regulated by the Civil Aviation Authority which has the power to force it to outsource its services if uncompetitive or if perceived not to be in the public interest.

8. For some time prior to 1998, it had become apparent that the terms and conditions of employment, including rates of pay, which it provided to its employees in the Security Business were significantly above those being offered in the market place generally. After a long period of consultation and negotiation with Trade Unions, including the TGWU, an agreement was reached that any employees who joined the security business after January 1998 would be paid slightly above market rate but that existing security staff would remain on their current, considerably more beneficial, terms and conditions. This resulted in a situation whereby some security officers were being paid between "£12,300 to £15,000 for doing exactly the same job as and working alongside other security staff who were being paid between £21,500 and £25,000."

4. The Airport Security Officers including the Applicants themselves believed and understandably according to the Tribunal, their times and conditions would be preserved, and they were assured of this by a statement made by the Chief Executive of the Respondent, Mr Muirhead, between the Respondent and TGWU which was dated 15 January 1998 in which the following commitment was given:

"The company has never and will not, unilaterally, makes any changes in the pay, terms and conditions of staff. This applies now and in the future.

Pay, terms and conditions are guaranteed. Where required changes will continue to be negotiated in the normal way."

In other words, the staff were assured there would be no unilateral variation of terms and conditions of employment, including pay.

5. Despite that glowing promise, by the year 2001 the Respondents were becoming concerned about the viability of their in-house security business because of the excessive rate of pay to security (other than to the new entrants) and there were problems about what was perceived to be the efficiency of existing rosters. It instructed external consultants to consider the efficiency of its structure and operation, including its security business. That report confirmed the inefficiency of the existing rotas and expressed concern at payment to AFOs well above the market rate. The task of providing the Board with a proposed solution was given to a managing director, Mr David Teale and to the Fire and Security Business Manager Mr Donnison. They made certain recommendations which included dramatic changes in terms and conditions of pay.
6. It is against that backcloth that we come to deal with this case. The result of the recommendations was that changes were made in the terms and conditions, including pay of ASOs, and resulted in the dismissal of those who were not prepared to agree to those terms being amended, including the dismissal of certain Applicants in this case, whose case was conjoined with the Union case. It is a contention of the Applicant, TGWU, that in the course of that process the Respondent failed to comply with its duty under section 188 of the Trade Union Act, as amended; it is considered also that certain of the individuals were unfairly dismissed.
7. At no time, as was noted in paragraph 18 of the Decision was it ever proposed that there would be compulsory redundancies in the conventional use of that word. However the company having regard to the Decision GMB v Man Truck & Bus UK [2000] IRLR 636 took the view that the provisions of section 188 were attracted by their proposal. Because of this, following legal advice, the prescribed form HR1 was served upon the Department of Trade and Industry on 25 January 2002 identifying the whole work force of 590 employees as being at risk of redundancy.
8. It is not surprising in that context that the trade union representative for the employees, as the Tribunal found, were confused and anxious that such a notice and consultation were found to be appropriate by the Respondents, when they were making it as clear as they possibly could there would be no compulsory redundancies. The position is simply this, that there was a degree of confusion, but those who have lived through and were seared by the experience of seeing the widespread loss of jobs that took place in the 1980s and in the 1990s, can be forgiven for saying that there is a certain degree in this case of bizarreness.
9. The whole purpose of section 188 was to protect peoples' jobs. There were going to be no compulsory redundancies. In fact, by the very nature of things, what was going to happen was that there was going to be compensation for some of those who would rather leave the job. It would seem from the Skeleton Argument that had been put to us, that in the end 570 out of the 590 employees, accepted one of the proposals on offer including voluntary early retirement or voluntary severance. The 20 employees who were dismissed made applications to the Tribunal, alleging unfair dismissal. According to the Respondent certain cases were settled and others dismissed.
10. The decision in GMB -v- Man Truck & Bus UK raises certain difficulties when there are widespread changes in conditions of employment. This may be a far more complex and time consuming exercise than that which applies in forstalling a precipitate announcement of redundancy. It can not be emphasised too much that with many small employers, section 188 had the effect of at least providing a certain breathing space, before a decision was taken to make wide spread redundancies. This is, and has been, a great protection to employed people. In this case, consultation began in January 2002, there were some 11 consultation meetings with trade union and non union representatives, 4 roster sub-committees, and a meeting in London to see the General Secretary of the Transport and General Workers Union.
11. The nub of the appeal, most pithily and ably expressed, is simply this: that the Tribunal failed to adequately consider this issue, because they identified and used the words which suggest they misunderstood their function by referring to

"it failed to find as a fact whether or not there had been adequate information upon which to respoond. Instead it misdirected itself and applied the test applied in the context of unfair dismissal cases namely that the conduct/decisions taken by the Respondent were within the band of reasonable conduct from a reasonable employer."

That is, as has been conceded by the Respondents, not a particularly helpful way of putting it, because it imports the unfair dismissal test of the range of reasonable responses to the rather more prosaic language of statute, and especially for the provisions of section (7). But really, if one looks at this decision as a whole, we do not consider, ably though they have been made, that Ms Gumbs' submissions are well founded.

12. Looking at the Decision as a whole, one sees the Tribunal dealing with numerous applications of which this aspect was but a part. In paragraph 29 they say this:

"The Tribunal then turned to the question of the "nature" of the consultation which subsequently took place, which Miss Gumbs on behalf of the Union applicant advances in particular as the area where the respondent has in this case failed to comply wit its duty under Section 188. Consultation must be "meaningful" and approached by the employer "in good faith". Section 188(4) of the Acts sets out written disclosures which should be made to appropriate representative but, of course, the wording of that sub-section is more specifically aimed at situations where redundancies are to occur rather than the proposals under consideration. Nevertheless, so far as it could do so in the particular circumstances, the Tribunal was satisfied that the information required by that sub-section was provided by the documentation produced on January 25 2002 and the Briefing Document which accompanied it."

13. Thereafter, the Tribunal goes on, at paragraphs 28, 29, 35, 36, 37 and 38 to set out its reasons. It is true that it makes certain criticisms of management, and points out the difficulties that had arisen, because on the one hand the employers were making the commitment that there was going to be no redundancies, and there were going to be in some cases, quite substantial severance packages, but, equally, at the same time, it was talking about taking draconian steps which, in the event, would mean that some would probably leave. But at the end of the day, whilst the Tribunal imported the reasonable response test, if you read whole of the judgment as we have, we find no fatal criticism.
14. Before us it has been argued that we should import into the context of the process of consultation certain particular tests set out in such legal authorities as R v British Coal Corporation ex parte Price [1994] IRLR 72. We decline to do so. Of course any consultation should be in good faith. Secondly, any consultation should be a real matter and meaningful in the sense that it is not a sham. But we consider that the various formulations about what consultation must be must be viewed with very great care, that one is not setting down a test of a meaning of a word, which if wrenched from its factual context becomes a tripwire. What one is doing is looking at particular facts in a particular case and applying helpful guidelines from cases.
15. We consider this Tribunal was perfectly entitled to come to the view that it did that there was consultation within the meaning of section 188, and it was also entitled to take the view that that there were criticisms that could be made of the Respondents, and the difficulties that the Respondents had, but quite simply it seems to us a travesty of the English language to say there was not meaningful consultation, and consultation in good faith. In the context of the mass of meetings there were, and the documentation that was provided we consider the Tribunal was entitled to reach the decision they did.
16. For those reasons, we dismiss this appeal.