United Kingdom Employment Appeal Tribunal

MR JUSTICE ELIAS

1. This appeal raises, amongst other matters, the question of what an employer needs to do to comply with the statutory dismissal procedures established under the Employment Act 2002 when dismissing an employee for redundancy; and also the scope of section 98(2) of the Employment Relations Act 1996 ("ERA") which provides that in certain circumstances dismissals may be considered fair even although there has been a breach of appropriate dismissal procedures. These two Appellants were dismissed for redundancy and the Tribunal, sitting at Watford, held that their dismissals had not been unfair.

The facts

2. The Respondent company was facing what the Tribunal described as a "catastrophic financial position." The welding department in particular was suffering badly, sustaining some £99,000 further losses than had been anticipated. It was determined at a management meeting on 23^rd November 2004 that the welding teams would need to be reorganised and that ten redundancies would have to be made. It was also decided that the terms and conditions of the other welders would have to be drastically revised. In part this was because it was necessary for them to do more weekend work than they had hitherto been doing.
3. Mr Gallagher, the welding manager, was required to produce a document to the board setting out how these decisions could be achieved. He made certain proposals to the board in a report. Meetings were then arranged for the employees on the 13 and 15 December. A presentation was made to them at which it was explained that there would have to be ten redundancies, that the company hoped for volunteers, but that if they were not forthcoming then compulsory redundancies would inevitably occur. It was made clear to the workforce that a process would take place for selecting the workers to be made redundant and that a further meeting would be arranged with those individual who were going to be selected so that they could be informed of the position. There were no formal procedures in place for dealing with this situation.
4. Nine workers were subsequently selected for redundancy, one having volunteered. These employees, who included the two Appellants, received a letter dated 24 December 2004. It reads as follows:

"Re: Consultation Meeting

Following the open meetings held on 13/15 December 2004, unfortunately we have not received any volunteers following our meeting to date, and as a result we have been left with no alternative other to embark on a compulsory selection procedure.

I therefore write to advise you that potentially your position is at risk of redundancy and wish to meet with you as per a location/date stated below –

Occasion - Worksop Office

Date - Wednesday 5 January 2005.

Time - 9.00 a.m.

I would like further to acknowledge that no final decisions have been made at this time.

You have the right to be accompanied at this meeting by either a work colleague or a trade union representative (other than a practising lawyer)……."".

5. In fact it was not possible for the workers affected to get proper advice by the 5 January because of the Christmas period and the meeting was postponed, by agreement, until the 12 January.
6. The selection had been carried out by Mr Gallagher. He did so on the basis of six criteria put together by the Human Resources Manager, Miss Spooner. The criteria were as follows: quantity of work; quality of work; initiative; skills, qualification, experience and training; future potential, flexibility and adaptability to meet the needs of the business; and location/positioning for the work area present. It was also made clear that disciplinary warnings could also be taken into account.
7. There were four points allocated for each criterion. They were: 1 for below average, 2 for average, 3 for good and 4 for excellent. There were also guidelines provided for the benefit of Mr Gallagher. These sought to give a clearer indication of how the assessment should be made in respect of each criterion. For example, in relation to quantity of work, it is below average if the worker requires regular supervision and rarely exceeds the minimum standard; the average is normally achieving minimum standard; good is consistently achieving at least minimum expectations and often exceeding them; and excellent is always exceeding minimum expectations by a significant margin. Similar guidance was identified in relation to each criterion.
8. The Tribunal found that Mr Gallagher was the appropriate man to carry out the assessment. They rejected submissions by the Claimants that others should have been involved and that criticism has not been pursued on appeal.
9. Although the Tribunal decision is not altogether clear on the point, it is common ground that at the meeting on the 12 January the employees were informed of the criteria but not the detailed guidelines; they were informed of the option to transfer to another section; and they were told that they were potentially at risk of redundancy but that no final decision had been taken.
10. At a further meeting on 21 January, the Appellants were informed that they had been selected for redundancy and told of the redundancy packages on offer. The option of alternative employment was reiterated. They were not at any stage given an opportunity to comment on how their own particular performance had been assessed under the various criteria. They were given a document identifying the scores relevant to each criterion at the end of the meeting but without any opportunity to comment upon the assessment.
11. They appealed against the decision and were represented by an official of their trade union, Mr Trend of the RMT. We were told that the concern at this stage was that not all welders may have been put in the pool from which selections were made, although in fact they were. The appeal took place on the 16 February. Just before that meeting Mr Trend was provided with both the selection criteria and the guidelines and also was shown the marks given to all those who had been considered for selection in the redundancy exercise, although with the names made anonymous. The Tribunal found that in the circumstances this was inadequate:

"The Tribunal finds as a fact that on the basis of that information it was quite impossible for Mr Trend to properly conduct the appeal because he had no idea as to which individuals had received which marks for which criteria and therefore was not in a position to know how it was that the four Claimants had been unsuccessful compared to the four individuals with the next highest scores, who had just been successful on the marking exercise."

12. The appeals were unsuccessful

The issues before the Tribunal.

13. There were a number of issues advanced before the Tribunal. First, it was submitted that the reason for dismissal was not redundancy at all. Then it was contended by the employees that they had been automatically unfairly dismissed because the employers had failed to comply with the statutory dismissal procedures. Third, the employees alleged that they had in any event been unfairly dismissed because of certain procedural failings, in particular the failure properly to consult and the fact that the selection criteria were inappropriately vague and had not been fairly applied. There was also the question, potentially relevant under the Polkey principles, as to what the chances were of the employees being dismissed even if proper procedures had been complied with. The employers submitted that even if there were procedural failings, it was more likely than not that the employees would have been dismissed in any event and that accordingly their dismissals were fair as a consequence of section 98A(2) of the Employment Rights Act 1996. The employees countered by submitting that there was not a proper evidential basis entitling the Tribunal to make any sound assessment at all as to what would have occurred had proper consultation occurred.

The relevant legislation.

14. Section 98(4) of the ERA 1996 is as follows:

"Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)-

a. depends on whether in the circumstances (including the size and administration of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employer, and

b. shall be determined in accordance with the equity and substantial merits of the case."

15. Section 98A of the Act makes further provisions about procedural fairness as follows:

"(1) An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if –

a. one if the procedures set out in Part 1 of Schedule 2 to the Employment Act 2002 (dismissal and disciplinary procedures) applies in relation to the dismissal,

b. the procedure has not been completed, and

c. the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.

(2) Subject to subsection (1), failure by an employer to follow a procedure in relation to the dismissal of an employer shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.

(3) For the purposes of this section, any question as to the application of a procedure set out in Part 1 of Schedule 2 to the Employment Act 2002, completion of such a procedure or failure to comply with the requirements of such a procedure shall be determined by reference to regulations under section 31 of that Act.

16. We consider below the effect of these provisions. In brief, however, it is that there is an automatically unfair dismissal where there is a failure fully to comply with any relevant statutory procedure. Compliance with the statutory procedure does not, however, mean that the dismissal is necessarily fair or cannot be challenged on procedural grounds. It may still involve a breach of section 98(4). But in those circumstances the failure to follow an appropriate procedure will not render the dismissal unfair if the employer can show on the balance of probabilities that he would have dismissed fairly even had proper procedures been followed. So once the statutory procedural requirements have been met, the failure to comply with additional procedural safeguards will not render the dismissal unfair if the employer shows that the employee has not in fact been prejudiced as a consequence. This provision therefore reverses in those circumstances the well known principle established by the House of Lords in Polkey v A E Dayton Services [1987] ICR 301.
17. The compensation for an automatically unfair dismissal falling within the terms of section 98A(1) is modified in two ways. Section 120(1A) ERA modifies the sum which would otherwise be payable pursuant to the basic award; and section 31(3) of the Employment Act 2002 provides for a general increase in the award in unfair dismissal cases where the procedure is not applied through the fault of the employer. (Subsection (2) requires a reduction where the fault is that of the employee). The relevant provisions are as follows:

120(1A)ERA:

Where-

a. an employee is regarded as unfairly dismissed by virtue of section 98A(1) (whether or not the dismissal is unfair is regarded as unfair for any other reason),

b. an award of compensation falls to be made under section 112(4), and

c. the amount of the award under section 118(1)(a), before any reduction under section 122(3A) or (4), is less than the amount of four weeks' pay,

the Employment Tribunal shall, subject to subsection (1B), increase the award under section 118(1)(a) to the amount of four week's pay

(1B) An Employment Tribunal shall not be required by subsection (1A) to increase the amount of an award if it considers that the increase would result in injustice to the employer."

31(3) Employment Act 2002:

"(3) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that –

(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b) the statutory procedure was not completed before the proceedings were begun, and

(c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure, it must, subject to subsection (4), increase any award which it makes to the employee by 10 per cent and may, if it considers it just and equitable in all the circumstances to do so, increase it by a further amount, but not so as to make a total increase of more than 50 per cent."

18. Subsection (4) provides that the tribunal should not uplift the award in the manner indicated in subsection (3)if there are "exceptional circumstances" which make it unjust or inequitable to do so.
19. Subsection (1) provides that the section applies to the jurisdictions listed in schedule 3. Unfair dismissal is one of the matters identified in that schedule.
20. On the face of it, section 31 itself would appear to apply to both the compensatory and basic awards. However, there is a new section 124A ERA, inserted into that Act by section 39 of the Employment Act 2002, which applies the modification to the compensatory element of an unfair dismissal award only.
21. It is common ground that the reference to the procedures in Part 1 of Schedule 2 to the Employment Act 2002 is in this case to the standard procedure identified in Part 1, Chapter 1 of that Schedule. The relevant stages are as follows:

"Step 1: statement of grounds for action and invitation to meeting

1.(1) The employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.

(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

Step 2: meeting

2.(1) The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.

(2) The meeting must not take place unless

(a) the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and

(b) the employee has had a reasonable opportunity to consider his response to that information.

(3) The employee must take all reasonable steps to attend the meeting.

(4) After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.

Step 3: appeal

3.(1) If the employee does wish to appeal, he must inform the employer.

(2) If the employee informs the employer of his wish to appeal, the employer must invite him to attend a further meeting.

(3) The employee must take all reasonable steps to attend the meeting.

(4) The appeal meeting need not take place before the dismissal or disciplinary action takes effect.

(4) After the appeal meeting, the employer must inform the employee of his final decision."

22. The regulations referred to in section 98A(3) are the Employment Act 2002 (Dispute Resolution) Regulations 2004. These, so far as is relevant, provide as follows:

"3.(1) Subject to Paragraph 92) and regulation 4, the standard dismissal and disciplinary procedure applies when an employer contemplates dismissing or taking relevant disciplinary action against an employee.

12.(1)If either party fails to comply with a requirement of an applicable statutory procedure, including a general requirement contained in Part 3 of Schedule 2, then, subject to paragraph (2), the non-completion of the procedure shall be attributable to that party and neither party shall be under any obligation to comply with any further requirement of the procedure."

23. It is to be noted that there are certain situations, identified in reg. 4, where the dismissal and disciplinary procedures do not apply. These include the case where the employer is obliged to comply with the statutory redundancy consultation requirements set out in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992: see reg 4(1)(b).

The Tribunal's conclusions.

24. The Tribunal in somewhat perfunctory fashion identified the relevant statutory provisions and indicated that they had had regard to certain well known cases which deal in particular with the procedures which need to be complied with before redundancy dismissals are considered to be fair. These included Polkey v A E Dayton Services [1987] ICR 301; Eaton Limited v King [1995] IRLR 75; Mugford v Midland Bank [1997] IRLR 211 and Drake v International Systems Limited v O'Hare EAT/2003. The Tribunal reminded itself that it should not impose it owns views as to reasonableness but had to ask whether the selection was one that a reasonable employer acting reasonably could make.
25. The tribunal concluded that the dismissals were by reason of redundancy, and there is no appeal against that finding. They then considered whether the dismissals were automatically unfair and held that they were not. They were satisfied that the letter of 24^th December was in compliance with Step 1 and that the meeting which had in fact occurred earlier, when the presentation took place with the slideshow, constituted compliance with Step 2.
26. The Tribunal also concluded that the dismissals were not unfair under section 98(4), notwithstanding that they were highly critical of the way in which the assessments were made by Mr Gallagher. They noted that certain workers seemed to be marked up if they were working in a team with other experienced welders, whereas others working in a less successful team appeared to be marked down. The Tribunal also expressed the view that they were doubtful whether the location criterion had been properly applied at all. They accepted, however, that the selection criteria themselves were appropriate.
27. Notwithstanding these specific criticisms of the procedure, the Tribunal nonetheless concluded that these two Appellants had been fairly dismissed (The other Claimants who were made redundant were found to have been unfairly dismissed but there is no appeal in their case). They added that even if these dismissals were unfair, nevertheless there was a 100% chance that the two Appellants would have been dismissed in any event. They justified this conclusion on the basis that the marking was justified in relation to these two Appellants, bearing in mind that they had no qualifications (except for Mr Hatherley having a lookout qualification) and that they were the least skilled and least able of the workforce. Accordingly, the lowest marks were considered appropriate in their case. We have seen the marking in relation to each of these two and they each only obtained 9 marks out of a total of 24.
28. The Tribunal did not in terms address either the employees' contention that there had been a failure properly to consult nor the argument of the employer that the effect of section 98A(2) would be to render the dismissal fair in any event.

The Grounds of Appeal

29. The grounds of appeal can be considered under three headings. First it was submitted by the employees that they had been automatically unfairly dismissed in breach of the statutory dismissal procedure and that the tribunal erred in finding otherwise. Second, they alleged that in any event the dismissals were unfair for procedural failings, although the employers responded by submitting that it is plain from the tribunal's finding that there was in any event a 100% chance of dismissal even had proper procedures been adopted and followed, and that section 98A(2) would apply so as to compel the conclusion that the dismissal was fair. The employees denied that there was a proper evidential basis on which the Tribunal could make this assessment. Finally, the finding of 100% chance of dismissal was itself said to be an unjustified finding displaying an error of law. We will consider each ground in turn.

Were the statutory procedures infringed?

30. The Appellants submit that the Tribunal erred in failing to find that there was an automatically unfair dismissal pursuant to section 98A(1) because of the failure to comply with the statutory procedures. It is contended that in order for there to be a proper meeting at which these two employees could effectively challenge their dismissal it was necessary that they were given in advance, or at least so that they could have a proper opportunity to address them, their own scores and how they had been assessed against the relevant criteria, and in addition the same information with respect to each of the other workers in the pool. Mr Toms, counsel for the Appellants, correctly points out that the purpose of the statutory procedures is to seek to have disputes resolved in the workplace without recourse to legal action. He says that what these workers would want to know is, putting it colloquially, "why redundancy and why me and not someone else?" He submitted that they could only successfully seek to persuade the employer that it should not be them who should be selected if they had the information he has identified. Indeed, he contended that it was not enough even at Step 1 simply to notify the workforce that the reason for the proposed dismissal, was redundancy. He said that the written statement from the employer ought in terms to identity the proposed method of selection and to inform the employee that he had been provisionally selected. But he argues that whether that is a requirement of Step 1 or not, it is plainly a requirement of Step 2, even although the information need not then be given in writing. Here the employees were not given the opportunity to raise queries or concerns even about there own particular assessments prior to the decision to dismiss , let alone to discover how others had fared in the assessment exercise and to make submissions on the order of ranking. Mr Toms says that this is a plain breach of the statutory procedure.
31. Mr Barnett, Counsel for the Respondent, contends that Step 1 was satisfied merely by providing the information that the proposed dismissal was by reason of redundancy. It was not necessary at that stage to say anything more. He drew an analogy with decisions of this court which have considered what is required in Step 1 of the Grievance Procedure. In that context the EAT has held on a number of occasions that it is only necessary for the employee to raise a complaint in very general terms about the issue which is subsequently raised before the Employment Tribunal. It is not necessary at that first step to set out any detail: see for example Canary Wharf Management Ltd v Edebi [2006]UKEAT/0708/05. He submits that there is no reason to treat the position of the employer operating the dismissal procedure any differently. The point at which, under the standard procedure, further details or particulars are provided is under Step 2, which expressly provides that the employer should notify the employee what the basis was for the ground or grounds relied upon for the proposed dismissal in advance of the meeting so that the employee has a proper chance to deal with it.
32. Mr Barnett submitted that where, as in this case, redundancy is the proposed ground of dismissal, the basis for that ground is simply the circumstances which caused the company to take the view that redundancies were necessary, namely here the cash loss in the welding section and the difficulties resulting from the failure to provide sufficient weekend working. He contended, albeit without much enthusiasm, that this was all that the company needed to provide. But he submitted in the alternative that even if it were necessary to give further information as to the basis on which the particular worker had been selected, this had been done in this case. The Appellants knew in advance of the final meeting on the 21 January what the criteria for selection were, albeit in general terms. True it is that they were not given their own scores, but they knew that they had been provisionally selected for dismissal and they were at least in a position to contest their selection by seeking to persuade the employer that they should score well on all or some of the relevant criteria notified to them.

What information is required?

33. The issue, therefore, is what information ought to be provided to an employee in order for the employer to comply with the statutory obligation. In answering that question, it seems to us that there are three matters in particular which should inform the answer, although they do not all point in the same direction.
34. First, the purpose of these statutory procedures is to seek to prevent the matter going to an Employment Tribunal if possible by providing the opportunity for differences to be resolved internally at an earlier stage: see the observations in the Canary Wharf case, para. Hence the reason why these procedures apply at the stage when dismissals are still only proposed and before they have taken effect. However, to achieve that purpose the information to be provided must be at least sufficient to enable the employee to give a considered and informed response to the proposed decision to dismiss.
35. Second, these procedures are concerned only with establishing the basic statutory minimum standard. It is plainly not the intention of Parliament that all procedural defects should render the dismissal automatically unfair with the increased compensation that such a finding attracts. They are intended to apply to all employers, large and small, sophisticated and unsophisticated. They are not intended to impose all the requirements breach of which might, depending on the circumstances, render a dismissal unfair. This suggests that the bar for compliance with these procedures should not be set too high.
36. Third, we think that it is relevant to bear in mind that once the statutory procedures have been complied with, employers are thereafter provided with a defence for failing to comply with fuller procedural safeguards if they can show that the dismissal would have occurred anyway even had such procedures been properly followed. This factor, in our view, militates against allowing the bar for the statutory procedures being set too low.
37. It must be emphasised that the statutory dismissal procedures are not concerned with the reasonableness of the employer's grounds, nor the basis of those grounds, in themselves. It may be that the basis for a dismissal is quite misconceived or unjustified, or that the employer has adopted inappropriate or vague criteria, or acted unreasonably in insisting on dismissing in the light of the employee's response. These are of course highly relevant to whether the dismissal is unfair, but it is irrelevant to the issue whether the statutory procedures have been complied with. The duty on the employer is to provide the ground for dismissal and the reasons why he is relying on that ground. At this stage, the focus is on what he is proposing to do and why he proposing to do it, rather than how reasonable it is for him to be doing it at all.
38. Taking these considerations into account, in our view, the proper analysis of the employer's obligation is as follows. At the first step the employer merely has to set out in writing the grounds which lead him to contemplate dismissing the employee, together with an invitation to attend a meeting. At that stage, in our view, the statement need do no more than state the issue in broad terms. We agree with Mr Barnett that at step one the employee simply needs to be told that he is at risk of dismissal and why. In a conduct case this will be identifying the nature of the misconduct in issue, such as fighting, insubordination or dishonesty. In other cases it may require no more than specifying, for example, that it is lack of capability or redundancy. That is consistent, we think, with the approach which this Tribunal has adopted in relation to grievance procedures in the Canary Wharf and other cases. Of course, most employers will say more than this brief statement of grounds, but compliance with the statutory minimum procedure is in our view met by a limited written statement of that nature.
39. It is at the second step that the employer must inform the employee of the basis for the ground or grounds given in the statement. This information need not be reduced into writing; it can be given orally. The basis for the grounds are simply the matters which have led the employer to contemplate dismissing for the stated ground or grounds. In the classic case of alleged misconduct this will mean putting the case against the employee; the detailed evidence need not be provided for compliance with this procedure, but the employee must be given sufficient detail of the case against him to enable him properly to put his side of the story. The fundamental elements of fairness must be met.
40. In redundancy dismissals the issue is more difficult, not least because there are two stages in the process. First, the employer has to decide that he is going to implement dismissals on the ground of redundancy. That is a decision which will generally be taken independently of the particular employees to be selected. Thereafter, absent at least sufficient volunteers, there will need to be the second stage at which particular employees are selected and compulsorily dismissed.
41. We reject Mr Barnett's submission that the only information to be given is that identifying why the decision to effect redundancies has been taken. That is too restrictive an approach and would undermine the protection which the procedures are intended to give to employees. In our judgement, the reference in step two to "the basis for including in the statement…. the ground or grounds given in it" requires that an explanation is given as to why the employer is contemplating dismissing that particular employee. It is, after all, the contemplated dismissal of the specific employee which is in issue and may lead to tribunal proceedings, not just the decision that certain jobs will have to go. In a redundancy context, that will involve providing information as to both why the employer considers that there is, to put it colloquially, a redundancy situation and also why the employee is being selected. The latter is, in practice, likely to be far more important to an employee than the former. In general, employees will not individually be in a position to make any cogent observations about an employer's conclusion that redundancy is necessary, although sometimes the information provided may raise a question as to whether redundancy is the genuine reason for the dismissal. But more pertinently, the employee will want to make representations about his own selection and, of course, he will be in the best position to make observations about that.
42. As we have said, when determining whether there has been compliance with the statutory procedure, the tribunal is not concerned with the reasonableness of the employer's selection criteria. It may be, for example, that in a redundancy context the employer chooses to select by lot or perhaps, more realistically, on a last in – first out basis. In such cases there is likely to be very restricted room for any observations from the employee about the application, as opposed to the desirability, of those criteria.
43. More usually, however, a matrix approach is adopted to selection, as in this case. Various factors are identified and the relevant pool of employees is assessed under each of them. When that system is adopted, the basis of the selection- the reason why this particular employee has been selected- rests upon that assessment. We think that it is clearly necessary that the employer, in order to comply with step two, should in advance of the meeting notify the employee of the selection criteria. Without that information, it is impossible for the employee to give any sensible response to the proposed decision at all.
44. A more difficult question is what more information, if any, needs to be provided. Mr Barnett says none; Mr Toms says further details of how the criteria are applied, and also the assessments of each of the workers in the relevant pool.
45. In our judgment neither of these submissions is correct. We see the force of Mr Barnett's submission that once given the selection criteria, the employee is in a position at least to address some arguments to the employer as to the justification for selecting him. But we –and in particular two very experienced lay members- are of the view that this is not enough to enable the informed response which essential procedural safeguards should allow. In our judgment in order to comply with the statutory provisions an employer should provide to the employee not only the basic selection criteria which have been used, but also the employee's own assessment. That will give the employee an opportunity to make representations not only about whether the criteria are justified and appropriate but also, more importantly, whether the marking given to him in respect of any particular criterion is arguably unjust, and why. It may be that he can correct some obvious factual error, such as being attributed with a disciplinary record he does not have, or what appears to be a rogue mark on one of the criterion, apparently wholly out of line with his work performance. His response will be difficult to formulate, and very much in a vacuum, without this information.
46. We have considered whether more is required from the employer. There is some merit in the argument that the break point should be provided to the employee, by which we mean the mark which he would need to attain in order to remain in employment, but we think that that is going beyond the basic standards required. We also reject the submission of Mr Toms that it is necessary in order to comply with the statutory procedure to provide the assessment of the other employees. We recognise that the selection is inevitably a competitive exercise but we are all of the view that this goes well beyond what minimum standards of procedural fairness would demand. A failure to provide such information may, in certain circumstances, render the dismissal unfair- and indeed the Tribunal in this case felt that it was difficult to make effective representations without this information. However, the question here is not what should be provided to prevent a particular dismissal being considered unfair under general unfair dismissal law, but rather what information is so basic that failure to provide it ought to be deemed to be automatically unfair as falling foul of the minimum procedural standards which any employer ought to comply with in a redundancy dismissal.
47. Analysing the case in that way, we are satisfied that there was not here the requisite compliance. The employees were given in advance of the meeting the criteria which were adopted and we do not agree with Mr Toms that it was necessary in order to comply with this minimum standard to give them the specific guidelines which assisted management in the assessment exercise. But each of these appellants ought to have had, in our view, his own particular assessment. He ought to have been able to make a considered response to the information bearing directly on his own situation so as to correct errors and make representations about particular aspects. In this case the assessment was not given until the employees were leaving the meeting on the 21 January, but by then their fate was already determined. That was, in our view, too late to amount to compliance with step two. It was neither in advance of the meeting nor was there even an opportunity for the employees to respond to that essential information at the meeting itself. The benefit of this procedure, to enable a considered and informed response to the employer's decision, was lost in those circumstances.
48. For those reasons, our view is that this dismissal was automatically unfair, being in breach of the standard dismissal and disciplinary procedure. The effect is that the employees should receive at least four weeks basic award, although they will have to set off any redundancy pay in the normal way, and any compensatory award would have to be increased in accordance with section 31 of the 2002 Act. In fact, however, if the finding of 100% likelihood of dismissal is sustainable, it would preclude any compensatory award being paid and therefore section 31 has no effect.
49. We should add that we do not accept a submission of Mr Barnett that what is required to comply with the statutory procedures is entirely a matter of fact for the tribunal. We accept that the question whether, in a particular context, the employer has given, for example, a sufficiently detailed account of why he thinks that the employer has committed misconduct will be a matter for the tribunal to determine. But here we are considering whether a particular category of information should be provided. In doing that we are engaged in an exercise of statutory construction, seeking to give a sensible meaning to language which unfortunately Parliament has left elusively vague. We are having to decide what kind of information falls within the concept of "the basis for including in the statement.. the grounds" for contemplating dismissal. In our view it cannot be right that on such a basic question different tribunals throughout the country can reach wholly inconsistent conclusions and all be right. Employers and employees are surely entitled to expect the law to provide some certainty and predictability on a matter of this kind, and to identify at least in general terms what type of information ought to be provided to comply with the terms of the statute.

Lack of consultation and section 98A(2)

50. We turn to consider the question of general fairness. This aspect of the case is not strictly of any significance given that we have found that the dismissal was automatically unfair. But lest we are wrong about that, and given that we have heard argument on the point, we will deal with the issues.
51. First, it is submitted that the Tribunal failed entirely to determine whether or not there had been proper consultation. That is, we understand, conceded by the company. They accept that the Tribunal did not satisfactorily address this matter, that it ought to have done so, and that there was not consultation, or at least insufficient to satisfy section 98(4). But the employers say that nothing now turns on this because it is clear that the Tribunal could not have found the dismissal to be unfair by reason of any procedural failings because of the effect of Section 98A(2) set out above. Indeed, Mr Barnett suggests that the Tribunal will have had that section clearly in mind, because the representative, Michael Delaney of Matthew Arnold & Baldwin expressly drew attention to it, even although they did not in terms make reference to it in their judgment.
52. Mr Barnett contends that the effect of this subsection is to reverse in part the effect of the well known decision of the House of Lords in Polkey save where there is a failure to comply with the statutory procedures. In that case the House of Lords had held that, save in exceptional cases, it was not open to an employer who had acted unreasonably and in breach of procedures to contend that since the dismissal would have occurred anyway even if proper procedures had been applied, the dismissal should be considered to be fair. Lord Bridge succinctly summarised the point as follows:

"If an employer has failed to take the appropriate procedural steps in any particular case, the one question the Industrial Tribunal is not permitted to ask in applying the test of reasonableness posed by s.57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On the true construction of s.57(3) this question is simply irrelevant. It is quite a different matter if the Tribunal is able to conclude that the employer himself, at the time of the dismissal, acted reasonably in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with. In such a case the test of reasonableness under s.57(3) may be satisfied."

53. That is not to say that the question of what would have happened had proper procedures been complied with is therefore irrelevant. It may be highly material when assessing compensation. Lord Bridge summarised the position as follows:

"But if the likely effect of taking the appropriate procedural steps is only considered, as it should be, at the stage of assessing compensation, the position is quite different. In that situation, as Browne-Wilkinson J puts it in Sillifant's [1983] IRLR 91 case, at p.96:

'There is no need for an "all or nothing" decision. If the Industrial Tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment.'"

54. The effect of section 98A(2), Mr Barnett submits, is that if the employer satisfies the Tribunal that on the balance of probabilities he would have dismissed fairly anyway even if fair and proper procedures had been followed, then the employer cannot be taken to have acted unreasonably under Section 98(4) and the dismissal is not unfair (unless for non-procedural reasons).
55. Mr Toms accepts that the effect of the subsection is in part to reverse Polkey. However, he contends that it does so only in narrowly prescribed circumstances. He distinguishes between what he terms "procedural" and "substantive" defects. He points out that the provision refers to the failure to follow a "procedure". He submits that a failure to consult is more than simply an error in following a procedure; it is what he terms a substantive matter which goes to the heart of the decision itself. He says that the concept of procedures in that subsection envisages written procedures adopted by the employer and that only relatively minor or technical breaches would fall within the scope of that subsection.
56. We see no justification for so limiting that provision. There is no basis at all for considering that the concept of procedure merely applies to such procedures as have been reduced into writing by the employer, nor is there any limitation on the nature of the failure to comply found within the terms of the subsection itself. It is of course the case that if there is a fundamental failure, including a wholesale disregard of procedures, then that will almost inevitably mean that there is a breach of the relevant statutory dismissal procedure rendering the dismissal unfair under section 98A(1), and in that case section 98A(2) does not apply at all and the Polkey analysis continues to apply. Subject to that, we see no limitation on the nature of the procedural breaches caught by the subsection. We recognise that the section refers to "a procedure" but we do not think that this is limited to cases where the employer fails to comply with his own established procedures (whether written or otherwise). In our view it simply means any procedure which the tribunal considers in fairness the employer ought to have complied with. If the employer has failed to comply with a procedure which ought to have been carried out, that will not render the dismissal unfair if the employer shows that the employee would have been dismissed anyway even had that fair procedure been adopted. (To this extent we would respectfully part company with the decision of this Tribunal in Pudney v Network Rail [2006]UKEAT/0707/05 (HH Judge McMullen QC presiding) in which, obiter, a narrower construction of the section was suggested, but in circumstances where the wider construction we have adopted does not appear to have been suggested by either party.)
57. In short, we consider that section 98A(2) applies to all procedures, which we take simply to mean the steps which ought to be taken by an employer before determining that he will dismiss a particular employee. Those steps will of course vary depending on the reason for the dismissal. There is no magic in the word "procedure" and there is no justification for seeking to redefine some steps which would naturally be described as "procedural", such as the duty to consult, as "substantive" merely on the basis that they are said to provide particularly important safeguards for the employee. All procedural requirements are important for employees.
58. It follows that we agree with the submissions of Mr Barnett on this point. Polkey now has only limited application. First, it is still relevant where the statutory procedures have been infringed so that the dismissal is automatically unfair. In the light of our conclusions on the first point, it is therefore relevant here. Second, although we have heard no argument on this point, it seems to us that even where the statutory procedures are complied with but the dismissal is unfair under section 98(4), Polkey will still apply where on the balance of probabilities the employee would not have been dismissed even had a fair procedure been complied with, but where there is a chance that he might have been. (That chance would of course have to be less than 50% otherwise section 98(2) would bite and the dismissal would be fair.) The compensation would in those circumstances have to be reduced accordingly.

Could the Tribunal have properly concluded that dismissal would have occurred in any event?

59. It is true that in relation to the application of the Polkey principle, the courts have, on occasions, drawn the distinction between procedural matters and what have been termed matters of substance. This is where the employer seeks to satisfy the Tribunal – and the onus is on him – that he would have dismissed even if fair procedures had been complied with. There are a number of authorities which have held that in some cases the assessment will simply be too speculative and cannot fairly be carried out. The Tribunal must have some proper evidential basis for concluding that the employer would have acted the same way in any event; mere assertion is insufficient. Tribunals can carry out what is inevitably a hypothetical exercise about what the employer would have done had procedures been properly complied with, but they must not speculate when they have insufficient information to be able to determine with any confidence what would probably have occurred. This is not, however, a doctrine which justifies an artificially narrow concept of procedures being adopted in the context of section 98A(2).
60. We will not rehearse the case law on this point in detail. But this line of authorities is relevant to the employees' alternative submission that the Tribunal did not have a proper evidential basis for concluding that the dismissals would have occurred in any event.
61. In King v Eaton (No 2) [1998] IRLR 686 Lord Prosser, giving judgment in the Inner House of the Court of Session, considered that there was some benefit in drawing a distinction between what he called the "merely procedural" and the more generally "substantive" requirements in determining if it was realistic or practicable for Tribunals to construct what would have happened had appropriate procedures been complied with. In so observing he was departing from the view expressed by Peter Gibson LJ in the Court of Appeal in O'Dea v ICS Chemicals Limited [1996] ICR 222 at 223 where he had observed that even in the Polkey context it was not helpful to characterise a defect as procedural or substantive. Both these cases were considered by the Court of Appeal in Lambe v 186K Limited [2005] ICR 307. Wall LJ, with whose judgment Butler-Sloss and Laws L JJ agreed, whilst sharing the view that it was not helpful to distinguish between substantial or procedural failings, approved at para 59 the following dictum from Lord Prosser's judgment in King v Eaton (para 19):

"It seems to us the matter will be one of impression and judgment so that a Tribunal will have to decide whether the unfair departure from what should have happened was of a kind which makes it possible to say with more or less confidence that a failure made no difference or whether the failure was such that one cannot sensibly construct the world as it might have been."

62. In King v Eaton the Employment Tribunal had held that they could not properly reconstruct what would have occurred and they did not permit the employer to lead evidence to demonstrate what criteria for selection would have been adopted had consultation taken place. The Inner House of the Court of Session considered that the Tribunal was perfectly justified in the stance they had adopted. It was not possible to determine whether the criteria relied upon by the employer would actually have been adopted had there been consultation about them.
63. By contrast, in the Lambe case there were both defects in the process of selection and an absence of consultation, but the Court of Appeal held that the Tribunal was entitled to conclude that it could properly assess what would have happened had fair procedures been adopted.
64. We were referred also to the decision of the Court of Appeal in Gover v Property Care Limited [2006] EWCA Civ 286 in a judgment handed down the day before we heard this case. In Gover the Employment Tribunal found that there were fundamental failings in the way in which the employers sought to bring about changes in employment contracts. This led to constructive dismissals and a finding of unfair dismissal by the Tribunal. But it was held that even if proper consultation had occurred, the employees would not have accepted the fundamental changes which the employers were seeking to introduce into their contracts, and that all they had lost was the period during which consultation would have occurred, which the Tribunal found to be was 4 months. The Tribunal accordingly limited the compensatory award to that period. ( Section 98A(2) was not in force at that time and therefore could not render the dismissal fair. There is a nice question whether it would now be applicable in those circumstances. The point does not arise for determination here, but we are inclined to think, without determining the matter, that it would not. It is arguably implicit in section 98(2) that in order for the dismissal to be fair, it is necessary for the employer to show not merely that the employee would have been fairly dismissed if appropriate procedures had been complied with, but that he would have been dismissed at the same time as he was. Otherwise an employee who is plainly prejudiced by the failure to follow fair procedures-because he would have remained longer in employment had they been followed- would be unable to recover compensation at all. The employer would benefit from his own wrongdoing.)
65. In the course of its ruling in Gover, the question arose whether the Employment Tribunal could properly make a sensible finding as to what would have happened had procedures been complied with in circumstances where they had been breached in the most flagrant way. The Tribunal recognised the difficulties of constructing the world as it might have been, to use Lord Prosser's language, but stated in terms that they were satisfied that they had sufficient material for them to determine what would have happened had proper consultation occurred, drawing on their own industrial experience. Buxton LJ cited the passage of the judgment of Lord Prosser which in turn had been adopted in Lambe and to which we have already made reference. He then observed that an appellate court "should tread very warily when it is being asked to substitute its own impression and judgment for that of the Tribunal" (para 22).
66. Buxton LJ approved the observations of the EAT in that case ( Judge McMullen QC presiding) which had commented that the employment tribunal was justifiably drawing on its own industrial experience not in order to speculate, but rather to provide a "framework which is a working hypothesis about what would have occurred had the Respondent behaved differently and fairly".
67. The question here is whether the Tribunal could properly adopt such a working hypothesis. Mr Toms says not. He submits that had consultation occurred, who knows what criteria might have been adopted or what improvements might have been made in the application of those criteria? Other employees might have been selected ahead of the appellants.
68. We do not accept that. The Tribunal concluded that it was plain that whatever detailed criteria had been adopted, the employers would have been seeking to dismiss the weaker performers amongst the group of welders. The Tribunal had evidence about the performance of all those in the relevant group considered for selection. It found in terms that these were the least skilled and least able and moreover, notwithstanding Mr Gallagher's defective assessment in relation to others, that his marks here were justified and appropriate. Bearing in mind the observation of Buxton LJ in the Gover case, we have no doubt that the Tribunal had enough material to carry out this assessment. This was no mere speculation but was a conclusion rooted in solid evidence. Indeed, so confident were the Tribunal in their assessment that they found that there was 100% chance that the employees would have been dismissed in any event, notwithstanding any breach of procedures.

The 100% finding

69. That leads to Mr Toms' final submission that the Tribunal was not entitled in any event to conclude that there was 100% chance that the employees would have been dismissed. This is relevant to any compensatory award payable in respect of what we have found to be the automatically unfair dismissal. He submits that the Tribunal's conclusion on this point is insufficiently reasoned and is not a conclusion which the Tribunal could properly reach on the evidence. He also suggests that the Tribunal here has confused the question of fair dismissal with the Polkey analysis on remedies.
70. We do not think they did make that error. They concluded that as far as these two particular employees were concerned, the procedures did not operate unfairly. They received the marks they ought to have received and had no legitimate complaint. It was only as an alternative finding that the Tribunal considered the issue of likelihood of dismissal. There was no confusion as between fairness and remedies. We therefore reject the contention that there was no proper basis for the Tribunal's conclusions or that they were unreasoned. The reasoning was brief but to the point. As we have said, the Tribunal identified these two as the weakest in the welding group and since the company were seeking to dismiss the weakest links, they were bound to go.
71. Accordingly, whilst section 98A(2) could not render the automatically unfair dismissal fair, so that the traditional Polkey approach to the question of compensation was applicable, the finding of a 100% likelihood of dismissal meant that no compensatory award was payable. We recognise that such a finding will be relatively rare, but it is undoubtedly open to a tribunal to make it: see Devis Ltd v Atkins [1977] ICR 662 at 681G per Viscount Dilhorne.

Conclusion.

72. It follows that in our view the Tribunal erred in concluding that there was a fair dismissal. The dismissal was automatically unfair as a consequence of the failure to comply with the statutory procedure. There is no compensatory award since the tribunal found that the dismissal of these two Appellants was 100% certain to take effect at the same time even if the proper procedures had been applied. However, in the circumstances, as the parties agree, the employees are entitled to a minimum basic award of 4 weeks pay pursuant to Section 120(1A).
73. The parties have agreed that after making relevant deductions the appropriate sum due to each employee is £520. We accordingly order the employer to pay that sum to each of these appellants.