United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR M HAWES (The Appellant in Person)
For the Respondent	MR P GREATOREX (of Counsel) Instructed by: Messrs DLA Solicitors India Buildings Water Street Liverpool L2 0NH


 


SUMMARY

Contract of Employment: Damages for Breach of Contract

In assessing how much was due to the employee for breach of contract the ET had to evaluate what bonus the employee would have received absent the breach. That evaluation required a decision as to what the employee's target would have been – which itself depended on the viability of a large projects which the employees said was non – viable and should not have been included in the targets. The ET failed to make findings in the central issue of viability and gave inadequate reasons for their decision as to target.

HIS HONOUR JUDGE BURKE QC

The Background

1. This is an appeal against the Decision of the Employment Tribunal sitting at Stratford, chaired by Mr Wells and sent to the parties with Written Reasons on 21 January 2004. By that Decision, the Tribunal awarded the Applicant, Mr Hawes, £2,226.00 by way of compensation for breach of contract against his ex-employers, Marconi Mobile Ltd whom I shall call "Marconi".
2. Mr Hawes was employed by Marconi as a regional sales manager until, in May 2002, he took voluntary redundancy. During the course of his employment, he became a member of Marconi's Order Intake Incentive Scheme. That scheme ran from 5 April in each year. It was what might more familiarly be called a bonus scheme; it provided for incentive payments to be made, the size of which was based on the relationship between the sales target set for each individual and that individual's performance in the relevant year.
3. In the year 1999-2000, Mr Hawes' target was £3.5 million. He achieved sales of £0.5 million and was paid bonus on that basis. In the next year his sales target was £2 million. He achieved sales of £0.25 million and was paid accordingly. However, in 2001-2, no sales target was fixed within the year. Such a target was only proposed by Marconi (without any negotiations with Mr Hawes in contrast to previous years) on 26 April, in the figure of €8 million or £5 million (approximately), at the end of the year by which time the actual sales figures achieved by Mr Hawes were well-known to be substantially less.
4. Mr Hawes issued proceedings in the Employment Tribunal, claiming that by failing to fix the target in the course of the financial year to which it related, and in fixing the target retrospectively at a figure which was out of line with any reasonable assessment, Marconi had acted in breach of contract. The Tribunal decided the issue as to whether Marconi were in breach of contract, as claimed, in favour of Mr Hawes in a Decision with Extended Reasons promulgated on 13 January 2003. The Tribunal rejected Marconi's defences that the time for fixing targets and the procedure for assessing targets were discretionary and not contractual and also rejected Marconi's defence that, in any event, the terms of Mr Hawes' acceptance of voluntary redundancy were such that he had agreed to waive any outstanding entitlement under the bonus scheme.
5. The Tribunal held that Marconi were in breach of contract by failing to set a target early in the relevant year (see paragraph 46 of their Decision) and in setting the target, retrospectively, at a figure which kept Mr Hawes' bonus artificially low (see paragraph 47 of their Decision). The Tribunal did not, however, decide on compensation was to be determined at a remedies hearing (see paragraph 49). It is worthy of note that at paragraph 18 of that Decision, the Tribunal accepted that Mr Hawes had raised the issue of his target with Marconi on a number of occasions throughout the year.
6. Marconi's appeal to the Employment Appeal Tribunal against that decision of the Employment Tribunal failed; and a remedies hearing was fixed for 4 November 2003. Before that hearing took place, the Tribunal ordered the parties to provide particulars of what the bonus target would, or should, have been, absent Marconi's breach of contract. Mr Hawes had put his figure forward in a schedule dated 27 August 2002; it was that that target should have been just under €3 million. He claimed, on the basis of that target, £20,453 as the bonus due on his sales achieved of just over €3.5 million. In a detailed document dated 2 September 2003, Mr Hawes set out how he reached those figures and why a much higher target figure put forward by Marconi was in error. Marconi put forward in their particulars a target figure of €8 million or roughly £5 million and contended that the sums payable on that basis by way of bonus were £2,226.00 that is to say the sum eventually awarded by the Tribunal. I will come back later in this judgment to the findings as to how the target figure was reached.
7. As I understand it, there is no dispute as to the calculation to be made from the target figure to the bonus figures.
8. What was in issue was the appropriate target figure. That issue was resolved at the remedies hearing in favour of Marconi. The Tribunal found that, if Marconi had set the sales target when they should have done, the reasonable target figure would have been £5 million; and therefore compensation was assessed at £2,226.00, the figure put forward by Marconi in their particulars.
9. Mr Hawes sought a review of that Decision. The Chairman, sitting alone, rejected this application for a review on the grounds that Mr Hawes had not put forward any of the statutory grounds for a review, but was seeking to argue that the Tribunal's decision was perverse, which arguments had to be pursued through the route of an appeal. That was, of course, correct. Mr Greatorex, on behalf of Marconi, made in his Skeleton Argument and faintly made orally today the point that Mr Hawes' arguments had been rejected on the review. They were rejected; but were not rejected as grounds of appeal; they were rejected on the basis that they did not constitute suitable grounds for a review, and that rejection does not, in my judgment, reflect in any way on the adequacy, such as it is, of the grounds put forward by Mr Hawes in so far as they are grounds of an appeal.
10. After various procedural steps (into which it is not necessary to go) have been taken, Mr Hawes' appeal now comes before me for decision. Initially, Mr Hawes' notice of appeal was lengthy, perhaps on the diffuse side; and it plainly sought to challenge as incorrect or perverse many of the Tribunal's findings of fact in the remedies decision. At the sift stage, the appeal made no progress. However, when Mr Hawes sought an oral hearing under Rule 3(10) of the Employment Appeal Tribunal Rules at a hearing before HHJ McMullen QC on 17 August 2005, Mr Hawes was represented by Mr Sendall of Counsel under the ELAAS scheme and was allowed to amend his Notice of Appeal to put forward four new grounds of appeal in substitution for the grounds originally set out. At the same time, Marconi were ordered to answer two questions which were attached to the Order. In a letter dated 28 September 2005. Marconi answered both questions in the negative; I shall come back to the first of those questions - nothing appears now to turn on the second – in due course. Subsequently the same Judge ordered that the appeal be set down for a full hearing.
11. Before turning to the parties' submissions and my resolution of the issues which arise from those submissions, I need to mention one further unfortunate piece of history. On 16 January 2006, HHJ McMullen QC ordered that the Chairman of the Employment Tribunal, Mr Wells, should provide notes of the evidence at the hearing before him as to the calculation of Mr Hawes' bonus; but it transpired that the Chairman had suddenly died. His notes were found but proved to be illegible. As a result of that, there are no notes from the Tribunal before me. I have seen a couple of pages of notes drawn up by Mr Hawes of the cross-examination with questions which he had prepared to put to Mr Bond and which, no doubt, he did put to Mr Bond; I have also seen a manuscript note of Mr Dale, the solicitor who appeared on behalf of Marconi at the remedies hearing. That note is very largely illegible and has not been transcribed. From what I have seen of it, it appears to be a note of questions rather than answers; but it may be a mixed note of both. In any event, as it has turned out, the only part of that note to which I was taken has proved to be irrelevant, again for reasons to which I will come. In the end, neither note has assisted me in reaching the conclusions which I have to reach and which I have reached. It is important, however, that I should say that, in so far as any question which I have to decide turns on the evidence which was given to the Tribunal and if there is any dispute as to what was that evidence, I cannot, of course, resolve such dispute in the absence of either agreed notes or the Chairman's notes; and that difficulty must, if it proves to be a difficulty which is decisive, results to the disadvantage of an Appellant; for it is not possible for the Employment Appeal Tribunal in the absence of the Chairman's notes or agreed notes to hold a trial as to what was said or what was not said in the Tribunal below.

The Tribunal's Conclusions

12. In order to understand the Tribunal's conclusions at the remedies hearing and the submissions of Mr Hawes who represented himself before me and of Mr Greatorex on behalf of Marconi, I need to summarise the parties' contentions as set out in their written submissions as to the calculation of bonus and target provided to the Tribunal before the remedy hearing and which formed the basis of their respective cases at that hearing. Mr Hawes contended that the bonus scheme was intended to motivate the salesmen who were beneficiaries under it and that it was therefore necessary to set an individual target under the scheme which was, and could be seen at the time to be, reasonable and potentially achievable and was not so high as to demotivate. But, on the other hand, it was necessary that the target should not be too low, for that would oblige Marconi, in the event that the salesmen did well, to make excessive bonus payments. His case was that the solution to this dilemma lay in the omission by agreement from the individual target of large potential orders which were problematic and not viable in respect of which, should they be achieved, one-off further bonus payments would be paid on an individual basis.
13. Mr Hawes pointed out in his Particulars that, in 2000/2001, three such orders were left out of his target by agreement between himself and Marconi and, if achieved (which they were not, as it happens) were to be the subject of separate payments. For 2001/2002 Mr Hawes' submission went:

"There were three possible large orders which [he says] were highly problematic and unlikely to be achieved".

They were (1) a project relating to Singapore which was worth £1.5 million, (2) a project relating to Malaysia which would be worth £4 million, and (3) a project relating to Sydney transport which would be worth £3.5 million. Of those three, the latter two, that is to say Malaysia and Sydney, according to Mr Hawes' case, if there had been negotiations and agreement with Marconi as to the target at the appropriate time, i.e. in the first half of the financial year 2001/2002 would have been excluded from the target figure. Mr Hawes also says that the Sydney project would have been excluded for other reasons; but since those other reasons do not form any part of the Tribunal's findings and the Sydney project was, in any event, excluded from the target, I need say no more about that because it is irrelevant for present purposes.

14. The third of these three projects, the Singapore project, Mr Hawes submits, would have been the basis of his target and would, with a 20% uplift, have produced a target in the region of that which he put forward in his Particulars. In contrast, Mr Bond (Mr Hawes' line manager at the relevant time) set out the target figure which would have been achieved as £5 million or €8 million basing himself on an order forecast figure of £5.5 million which included both the Singapore and the Malaysia projects.
15. The Tribunal found that, although in October 2000, Mr Hawes' sales were the subject of a budget figure (not an agreed forecast or an unagreed forecast figure) of £9 million, made up of the three projects), by the beginning of the relevant financial year, the Malaysian contract had dropped out of the budget, reducing the budget figure to £5 million. However, at some time early in 2001/2002 and before 30 September 2001, the Australian contract was dropped and the Malaysian contract re-appeared, producing a revised budget and order forecast figure of £5.5 million.
16. While Mr Hawes contends that some of the findings of fact in this part of the Tribunal's decision (which is to be found at paragraph 39B(iii) and (iv) of that Decision) are in error in factual terms, it is not suggested in the Notice of Appeal that those findings are perverse. I can see no basis on which (a) it is necessary for me to decide whether they were or were not perverse and (b) on which they could arguably be said to be perverse if I had to make such a decision, but I am not deciding any such issue any such issue is not material, as I see it, to the issues that I do have to decide.
17. It is necessary next to say a word about target, order forecasts and budget. The last of those three concepts, it is agreed, is not of any importance in this appeal. It is not in dispute that order forecasts were made by management after discussion with the relevant salesman. It is common ground that the target figure was not necessarily the same as the order forecast figure. The target figure, the Tribunal found in their first Decision, had been historically reached following negotiations as to the appropriate target figure between management and salesmen (see the first Decision, paragraphs 16 and 17). There is no finding anywhere and no suggestion that there were negotiations between salesmen and management about order forecasts, although it is common ground that there were discussions between salesmen and management (and certainly between Mr Hawes and Mr Bond) about the difficulties which faced the projects which were or might be included in the order forecasts in 2001/2002.
18. The Tribunal found that the Malaysian project was included within the order forecast for much of the early part of the relevant financial year, that in October 2001 a new manager (Mr Cioppi) had put question marks (the document shows three question marks) against that project in the monthly forecast and that the Malaysian project was removed altogether from the monthly forecast in January 2002, reducing the forecast to £1.2 million.
19. It was Marconi's case that the Tribunal, having found at the liability hearing, that the target had contractually to be set early in the relevant financial year because the payments under the bonus scheme were intended to be made on a quarterly basis (see paragraph 47 of the Tribunal's first Decision) had to decide Mr Hawes' target as it would have been ascertained in the early part of the relevant year. The Tribunal accepted that that was so; and Mr Hawes accepted that they were right, and indeed did not dissent from that proposition in front of the Tribunal. The Tribunal therefore had to consider, at the end of 2003, what would in the early part of the year 2001/2002 have been the appropriate target figure.
20. Mr Hawes's submission was that the Malaysian contract was of doubtful viability from the start and should never have been included in his target figure. Marconi's submission was that it was appropriate for it to be included within the target figure. At paragraph 39, the Tribunal having made findings of fact and recited the submissions of the parties, directed themselves to answer three questions. Those questions were (a) when should the target have been set in the year 2001/2002?, (b) what facts would it have been reasonable to take into account in setting the target and (c) what target would it have been reasonable to set in the light of those facts?
21. The Tribunal, as I have already indicated, answered the first question by deciding that the target had to be ascertained as that which would have been appropriate for the first part of the relevant financial year; and that was plainly right. No issue arises on their answer to that question, which is set out in paragraph 39A of the Decision.
22. As to the second question, the Tribunal decided, at paragraph 39B(v), that the order forecast remained constant at £5.5 million until January 2002, well after the halfway stage of the year; but (at paragraph 39B(vi) there was no independent evidence to support Mr Hawes' contention that he was at all unhappy with the budget or orders forecast before October 2001; and the Tribunal then said this in paragraph 39B(vii):

"We therefore conclude that if the Respondent had set the target within the first half of the year 2001/2002 it would have been on the basis that the orders intake forecast was in the region of £5.5 million even if the budget had, at some stage, been even higher".

23. The Tribunal then turned to consider, in paragraph 39C, what target it would have been reasonable to set in the light of those facts. They recited how, on the evidence before the Tribunal, neither Mr Hawes nor anyone else during the relevant period came anywhere near achieving 100% of their targets, yet all, including Mr Hawes, up to the year 2001/2002 accepted the target offered, and that Mr Hawes had only achieved a relatively small percentage of his targets in the two preceding years; and they said this at 39C(iii):

"We are therefore led to the conclusion that, in the light of the information available during the first half of the year 2001/2002 when the order intake forecast was in the region of £5.5m it would have been reasonable for the Respondent to have set a target of £5m for the Applicant and we have little doubt that, had it been proposed at that stage, it would have been accepted by him".

Thus, they arrived at the target figure of £5 million.

Mr Hawes' Submissions

24. All four grounds of appeal in the amended Notice relate, unsurprisingly, in light of the rival contentions of the parties before the Tribunal, to the Tribunal's decision as to whether the Malaysian project should have been included within the target figure decided upon by the Tribunal. In part, as Mr Hawes frankly sets out at the commencement of his Skeleton Argument, his case on appeal is that no reasonable Tribunal could have so decided in relation to the Malaysian project, but the amended grounds of appeal are not restricted to that broad perversity attack. The Tribunal's finding that the target should have been set at some time in the first half of the relevant financial year is not challenged. Nor has the debate today been about the consequences, in terms of calculation, of the conclusion as to the appropriate target. There is no mathematical dispute between the parties as to what follows from whatever target figure is the right target figure. The Tribunal had the difficult task of excluding hindsight (for it was agreed by both parties that hindsight had to be excluded), of putting themselves into the shoes of Mr Hawes and Mr Bond in the circumstances of the early part of the relevant financial year, and of deciding what, if Marconi had not acted in breach of contract by failing to reach a target figure when they should have done, would have been a reasonable target figure.
25. Mr Hawes submits that the fundamental issue between the parties as to the target figure was the viability of the Malaysian project. The written Particulars to which I have referred, constituted – this is again common ground – the bulk of his evidence in chief. He went through that documentation and spoke to it. In that document, he gave details as to why the Malaysian project was uncertain in the extreme, as he put it, and was not viable. He submits that his evidence about the serious difficulties which confronted the Malaysian project was not contested, that he had made those difficulties clear to Mr Bond (who was responsible for setting his order forecast and target), that the Malaysian project should have been excluded by Mr Bond from the target and that the Tribunal have either reached a perverse decision or have failed to take account of Mr Hawes' unchallenged evidence.
26. Mr Greatorex, on behalf of Marconi, accepted that the central issue was the viability of the Malaysian project, but he pointed out that Marconi had put their case on the basis that the difficulties set out by Mr Hawes did not lead to the conclusion that the project was not viable. As the Tribunal had found, and these findings are not challenged, neither Mr Hawes nor any other salesman in the relevant period came anywhere near achieving 100% of his target and Mr Hawes had, in the two previous years, only achieved a very small percentage of his agreed targets; thus, it was submitted, necessarily, difficulties must have arisen in turning projects into sales which did not prevent those projects from being reasonably included within targets. The Tribunal had plainly accepted Mr Bond's evidence as to that and had concluded that the Malaysian project was reasonably included in the target.
27. Plainly, therefore, as each party has described their case to me, and as those cases were summarised by the Tribunal at paragraphs 26-37 of their Decision, whether the Malaysian projected amounted to a viable project such as could reasonably be included within Mr Hawes' target for 2001/2002, was the major issue before the Tribunal. Paragraph 30 of the Tribunal's Decision sets out the Respondent's submission - this must have been based on Mr Bond's evidence – that they were not in the habit of including non-viable sales in their forecasts and, in consequence, the Malaysian project had only been included because it was believed to be viable. In contrast to that, at paragraph 32, Mr Hawes' submission is recorded that the Malaysian project was doubtful from the start and that it had the history, in terms of inclusion in and exclusion from the forecasts, which I have earlier described.
28. Mr Hawes makes, in effect, four submissions or points on this appeal. (1) I shall summarise these submissions, hoping to do no disservice to the way in which they were presented in doing so. (1) In so far as the Tribunal decided the viability issue against him, that decision was one which no reasonable Tribunal could reach because it was wholly contrary to the unchallenged evidence that there were the major difficulties he set out in his Particulars document, as to which he spoke in evidence and as to which his evidence was not challenged. (2) The evidence that Mr Hawes and Mr Bond had discussed the serious difficulties and that Mr Bond knew of them could not have been taken into account because the Tribunal's finding at paragraph 39B(vi) if it was intended as a rejection of Mr Hawes' evidence that he had pointed out these difficulties to Mr Bond, was contrary to his evidence that he had drawn those difficulties to the attention of Mr Bond which evidence was not challenged. (3) The Tribunal made no finding as to whether they preferred the evidence of Mr Bond to that of Mr Hawes upon the central issue or failed to give sufficient reasons for any such finding. (4) The Tribunal's decision omitted altogether to deal with a separate point advanced by Mr Hawes, namely that the Malaysian project would and should have bee excluded from his target in any event on the grounds of its size alone.

Marconi's Submissions

29. (1) Although Mr Hawes' first argument, that is that the first decision on the crucial issues was perverse is, in truth, simply a challenge to valid and factual conclusions of the Tribunal and, in effect, an attempt to re-run the factual issues which he had validly lost. He had not got anywhere near satisfying the very high test for perversity, namely as set out in Yeboah v Crofton [2002] IRLR 634 (CA) that the decision of the Tribunal on the relevant area of fact was overwhelmingly shown to be wrong or one that no reasonable Tribunal could reach on the evidence. (2) At first, Mr Greatorex suggested, with the aid of Mr Dale's notes, that Mr Hawes had been challenged as to whether he had discussed the difficulties of the Malaysia project with Mr Bond and that Mr Bond had not accepted that there had been those discussions (as indeed was said in effect in Marconi's response to the first of the questions posed by the Employment Appeal Tribunal pursuant to the Order of HHJ McMullen QC dated 17 August 2005). However, Mr Greatorex subsequently, and entirely properly, accepted, on instructions, that that was not so and that Mr Bond had agreed in evidence that Mr Hawes had acted as he said; but he submitted that Mr Hawes had not claimed to have objected to the order forecast as opposed to discussing the difficulties in the Malaysian project before Mr Bond settled on the order forecasts over a period of a number of months in which the Malaysia project appeared in those forecasts. The Tribunal had taken into account the conversations between Mr Hawes and Mr Bond, hence the use of the word "independent" in paragraph 39(vi), but had also taken into account, as they were entitled to, the fact that there had been complaint in discussion about the order forecast until after the relevant period. (3) The Tribunal had clearly found that Mr Bond's evidence was to be preferred and that he had properly included the Malaysia contract. Mr Greatorex submitted that the reasons appeared from the Tribunal's Decision at 39B(v), (vi), (vii) and 39C. In paragraph 39B(v) the Tribunal, he said, had concluded correctly, and certainly not perversely, that the order intake forecast remained constant at £5.5 million until well after the halfway stage of the year. At paragraph 39B(vi) they had drawn attention to the absence of any independent evidence to support Mr Hawes' contention that he was unhappy with the order forecasts prior to October 2001; and they had, on the basis of those two facts, concluded in 39B(vii) that if the Respondent had set the target at the relevant time, it would have been on the basis of the orders forecast and in the region of £5.5 million. They had then gone on to point out, consistently with Mr Bond's case, that difficulties did not equal non-viability; difficulties did not make it unreasonable to include the project in a target figure because of the low percentage of achievement against the target historically; and that view led them in 39C(iii) to conclude (based on the order forecast of £5.5 million) that it would have been reasonable to set the target at £5 million. These, submitted, Mr Greatorex, were wholly adequate reasons to comply with the requirements of the law, to which I will return in a moment.
30. As to the fourth submission, Mr Greatorex's argument was that Mr Hawes' written Particulars did not make or substantially make any separate point that the Malaysian project should have been excluded on the size of grounds alone and that the reason why the Tribunal have not addressed it was that there was no such point being made.

Conclusions

31. I propose to address first the issue as to whether the Tribunal's decision sets out adequate reasons to show the parties why they respectively won or lost on the issue of the assessment of a reasonable target figure. I do not propose, in this judgment, to go through the details of the authorities which bear on reasons. They are very familiar. Mr Greatorex has referred to the well-known case of Meek v City of Birmingham District Council [1987] IRLR 250 in which the Court of Appeal said that a decision must tell the parties why they have won and lost and not merely that they have won and lost. In Tran v Greenwich Vietnam Community Project [2002] EWCA Civ 553, Sedley LJ, at paragraph 17 of his judgment, said this:

"……no employment tribunal and no advocate or representative practising in the employment field should imagine that a decision as short on reasoning as the present one complies with the legal obligation, if asked, to explain how the tribunal has got from its findings of fact to its conclusions. It may be done economically, but simply to recite the background and the parties' contentions and then to announce a conclusion is not to do it at all; and an opaque reference to the evidence which has been given does not save it. The giving of adequate reasons fulfils many functions, among them the important one of concentrating decision-makers' own minds on what they are doing and demonstrating to the parties and (if necessary) to appellate tribunals that they have given acceptable answers to the right questions".

In the Anya v University of Oxford & Another [2001] EWCA Civ 405, Sedley LJ said (and I summarise) that the reasons given by a Tribunal must show how they have come to their conclusions of fact and how they have come from those conclusions to their ultimate result.

32. It is important, in my judgment, that the Tribunal do not anywhere refer to the central issue of viability either by using that term or by describing it in some other appropriate way. They directed themselves to ascertain what facts it would have been reasonable for Marconi to take into account when setting the target; but having set themselves that task, they did not, as I see it, indicate that the central question was whether the Malaysian contract was such that the difficulties made it inappropriate and unreasonable to include it within the target it or whether those difficulties were not such as to make it inappropriate to include it within the target. That was, for the reasons I have explained in my judgment, and as indeed Mr Greatorex to a large extent accepts, the vital issue between the parties.
33. What was in the order forecast was not conclusive of what was in the target. As the Tribunal said at paragraph 39B(i), the target is not strictly tied to the order intake forecast or the budget, but both factors must be considered to have some relevance; and at paragraph 39C(i) they said that while targets are no doubt related to budgets and forecasts, they are not actually tied to either. It is not suggested that the forecast necessarily was to be the subject of discussion; and it was, unlike the target, not the subject of negotiation. The forecast did not dictate the amount of bonus or other remuneration of the employee. It was not the forecast that the Tribunal had found was the subject of discussion and negotiation between management and salesmen but the target (see the First Decision). What the Tribunal had to decide was whether the viability of the Malaysian project was such as to make it reasonable to include it not in the order forecast but in the target.
34. The route by which the Tribunal reached their conclusion does not, in my judgment, satisfactorily explain why, if they did, they concluded that there was sufficient viability about the Malaysian contract for the Malaysian project to be included within the target. It was material, as I see it, that the order forecast remained constant over a substantial period until after October 2001, but that did not, of itself, dispose of the difficulties which Mr Hawes, it was agreed, was raising. The Tribunal found in their first decision that Mr Hawes had, on a number of occasions, sought to discuss the question of his target with Marconi throughout the relevant year. That is not reflected in the Tribunal's decision.
35. The Tribunal said, at paragraph 39B(vi), that there was no independent evidence to support Mr Hawes' contention that he was at all unhappy about the budget or the order forecast before October 2001; they appear to have used that finding as indicating something important about the viability issue; but in the light of what I have already said about the raising of the viability issue by Mr Hawes and the existing finding of fact that he sought to discuss the target with Marconi, I do not see how the finding in 39B(vi) can be said to contain any justification for or any reason which explains how the Tribunal came to a conclusion in Marconi's favour as to the target. The word "therefore" in paragraph 39B(vii) indicates, in my judgment, that the Tribunal reached the view that the target would have been based on the order forecasts on the basis of what they said in 39B(v) and (vi) without dealing with the viability issue and on the basis of the finding in paragraph 39B(vi), which does not, as it seems to me, justify or support the conclusion. Although there are the further historical findings of fact in paragraphs 39C(i) and (ii), the Tribunal do not say that the fact that achievements were much less than targets historically in the case of Mr Hawes or anybody else, led them to conclude that the difficulties that Mr Hawes had raised about the viability of the Malaysian target were not difficulties so as to render it unreasonable to include the Malaysian project within the target. There is no other reasoning and, in my judgment, the reasons which the Tribunal have given for their ultimate conclusion are simply not sufficient or appropriate to show what the Tribunal's resolution, if any, on the central viability issue was and how they came to the conclusion that it was reasonable to include the Malaysian project within the target. Thus, in my judgment, the Tribunal's decision is in error of law and cannot stand.
36. Mr Hawes submitted, at first, certainly in writing, that I should (if I came to the conclusion that the Decision could not stand) substitute a decision that his proposition as to the target should be accepted. I cannot do that as, when I put the problem to him, he readily accepted. I do not know what a Tribunal would have decided if they had provided proper and appropriate reasons for a decision; and I could not possibly substitute my own view, if I had one for that which had to be reached appropriately and according to law by a Tribunal. Accordingly, I have no doubt that this case has unfortunately (because it has a long history) to be remitted for reconsideration by the Employment Tribunal. In what form it should be remitted. I shall come to in a moment.
37. In those circumstances, it is probably wise that I should not say very much about the other grounds of appeal. It is unnecessary for me to do so. If I had to do so, I would say firstly that the perversity grounds were highly unlikely to succeed; there were two versions of the way in which the target should have been arrived at before the Tribunal; and had the Tribunal correctly chosen one of them, that choice would probably have been unassailable.
38. So far as ground 4 is concerned, I do not regard Mr Hawes' document as substantially raising the size of the Malaysian project, as opposed to the difficulties of the Malaysian project, as a freestanding point, and it does not surprise me at all that the Tribunal did not view this as such. Mr Hawes said that he raised it, as an independent point, in the course of his evidence. That is not accepted by Marconi, and that is an issue as to which, of course, I have no notes of evidence and which I cannot resolve without the advantage of such notes. If I had to resolve it, for the reasons I have set out shortly, I would resolve it against Mr Hawes.
39. However, for the reasons that I have set out in my judgment, this appeal must be allowed.
40. It remains for me to decide whether, as Mr Greatorex submits, the remedies issue should be remitted to a Tribunal consisting of the same two lay members plus a new Chairman or should be remitted to a new Tribunal. I have reminded myself of the criteria upon which the Employment Appeal Tribunal must decide whether to remit to a new Tribunal or to the existing Tribunal, as set out in Sinclair Roche & Temperley v Heard [2004] IRLR 763. Those criteria do not expressly deal with the situation in which the Chairman is no longer available to join the same two lay members and to deal with a remitted hearing.
41. What appears to me to be the decisive factors in favour of my remitting this case to a different Tribunal is that (1) to remit to the same two lay members without the original Chairmen would be to produce a situation in which the two lay members would or might tell the new Chairman what had happened earlier when that new Chairman was not present, and (2) the possible influence of the Chairman who will no longer be present upon those two lay members is incalculable and unavoidable. I am not suggesting that for one moment there would be any improper influence, but the reality is that the influence of the absent Chairman might play a part in the decision, even unconsciously; and in the interests of justice overall, it appears to me that the only fair and proper solution is to remit this case to a different Tribunal. That, therefore, is the order which I make.
42. Accordingly, the appeal is allowed. The remedies issue is remitted to a fresh Tribunal appointed by the relevant Regional Chairman.