United Kingdom Employment Appeal Tribunal

APPEARANCES

For the Appellant

MR D MANKNELL (of Counsel) ELAAS

For the Respondent

No appearance or representation by or on behalf of the Respondent

SUMMARY

Redundancy: Protective Award

On the facts (on fresh evidence not available to the ET) here had been a proposal for more than 20 redundancies before the date of the Appellant's dismissal and he was entitled to a 90 day protective award, there having been no attempt at consultation.

HIS HONOUR JUDGE REID QC

1. This is an appeal from the decision of an Employment Tribunal held at Leeds which gave judgment on 27 June 2005. The Tribunal held that Mr Thomlinson, the Appellant, was not entitled to a protective award of 90 days' pay and it did so on the basis that there was no obligation to consult in relation to the redundancy of which his dismissal formed a part.
2. The hearing before us has been, for all practical purposes, a re-hearing because an order was made by the Employment Appeal Tribunal that fresh evidence should be admitted on this hearing and we are therefore in a position where we have the advantage of material which was not before the Employment Tribunal. Given the advantage of that evidence, we take the view that this appeal is bound to succeed.
3. The chronology of events is this. Mr Thomlinson was employed by Your More Stores which had 80 head office employees of whom he was one and operated some 180 stores throughout the country. On 2 September 2004, after extensive negotiations, the directors concluded that there was no prospect of selling the company as a going concern and appointed two members of Ernst & Young as Joint Administrators.
4. On 4 September there was a staff meeting and on 6 September the first 15 redundancies were made. On 13 September the closure of 70 stores was announced and a further 19 stores were identified as to be closed. On 25 October the administrators wrote to the creditors saying that they would be unable to rescue the company as a going concern and it would be unlikely to benefit creditors to trade beyond December.
5. Between 26 October and 28 November there were a further 40 resignations and/or redundancies at head office and all remaining stores were closed. On 30 November 17 redundancies were made and on 17 December the final eight redundancies from head office were made, head office then being closed.
6. It seems to us clear that from the date of the appointment of Ernst & Young, (although there was a hope that some part of the business might be saved and that at any rate those stores which were apparently trading profitably could be saved), first of all there were some inevitable redundancies such as that of the Applicant, but also there must have been proposals for further redundancies as the word "proposing" is used in s188 of the Trade Union and Labour Relations Consolidation Act 1992. It is simply not possible that there was no fall-back proposal against the possibility or probability or, in the event, certainty that everybody would have to be dismissed and the entire operation closed down. In those circumstances, it seems to us, on the facts known to us as opposed to the facts as they appeared to the Employment Tribunal (who had less material than we did and whose interpretation of the material that they did have was, no doubt, clouded by the fact that they did not have the additional material which we have) that there was a proposal in existence from very shortly after the point at which the Administrators were appointed.
7. That being so, and since that proposal inevitably entailed the potential redundancy, of all 80 of the head office staff, there was imposed on the employer a duty to consult. In this instance, there was no consultation whatsoever. The only response or excuse or reason advanced by the Administrators as to why there was no appropriate consultation is in a letter to the Leeds Employment Tribunal of 15 February 2004 which, in its substantive paragraph, says this:

"G Wilson and R H Kelly were appointed as Joint Administrators to the Company on 7 September 2004, the employees making this application [and I pause to say that before the Employment Tribunal there were 15 applicants in all] were based at the head office of the company. The Applicants were all involved in the winding down of the business and were fully aware that their employment would be ending. They were the last employees of the company to be made redundant as though part of the team in closing branches throughout the country. I do not therefore accept that a protective award is due to them".

The reference about their being "the last employees", I take it, refers to those who were dismissed at the end of the day rather than those who were dismissed, as was Mr Thomlinson, at an earlier stage of the proceedings. But, in essence, all that the Administrators are asserting is that no protective award should be made because everybody knew that there was a closing down operation in progress and that, therefore, their jobs would inevitably go. That letter, incidentally, reinforces the point that there was a proposal, at the very moment of appointment, for the dismissal by reason of redundancy of all of the employees involved.

8. Given that there was a duty to consult and given that the other statutory requirements for a protective award had been made out, the question then is: what protective award should be made? There have been recent decisions dealing with the question of protective awards by the Court of Appeal in GMB v Susie Radin Ltd [2004] IRLR 400 and by the Employment Appeal Tribunal, chaired by Cox J, in Smith v Cherry Lewis Ltd [2005] IRLR 86. The factors to be taken into account in determining the length of any protective award are set out in particular at paragraph 45 in the Radin case in the judgment of Peter Gibson LJ and it would serve no purpose to rehearse them here. In very short form, it can be said that one starts from an award of 90 days and sees what mitigation there is which should cause that period to be reduced.
9. In this case, nothing by way of mitigation has been advanced beyond that which is contained in the letter of 14 February 2004 to which I have already referred. That letter was before the Employment Tribunal. The Employment Tribunal, in relation to the other persons made redundant, determined that there was no basis for reducing the 90-day period. In those circumstances, it seems to us that there is no need for us to remit the matter for reconsideration as to the period of protective payment and in doing so, we effectively adopt the same reasoning as that adopted by Cox J at paragraph 21 of the Smith v Cherry Lewis case.
10. It would, in our judgment, be wholly illogical, given that the question before the Employment Tribunal was essentially whether the Appellant fell within the net or outside the net for us to decide (having decided that he fell within the net) to then go on and decide as a matter of fact that some other period other than the 90 days which appeared appropriate to the Employment Tribunal should be award to him. The only matter on which there must be some doubt is the question of the date from which that 90 days should run as to which, we wish to hear from Counsel.
11. As to the amount, we have the calculation set out in Counsel's Skeleton Argument at paragraph 25. The Appellant's gross pay was £25,000 a year and a 90-day award equating to 12.86 weeks would amount to £6,182. In those circumstances, the appeal will be allowed, a declaration will be made that the employer Respondent was in default and an order that a protective award of £6,182 should be paid to the Appellant.