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At the Tribunal | |
On 12 September 2008 | |
Before
HIS HONOUR JUDGE ANSELL
PROFESSOR S R CORBY
MR G LEWIS
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR E McFARLANE (Representative) Natwest Mentor Services Litigation Dept 2nd Floor Sapphire West 550, Streetbrook Road Solihull West Midlands B91 1QY |
For the Respondent | MS N SIVANANDAN (of Counsel) on behalf of Bar Pro Bono Unit |
SUMMARY
Redundancy: Fairness
Subjective marking system without prior consultation led to a correct finding of unfair redundancy.
HIS HONOUR JUDGE ANSELL
"37. Mr West told us that he satisfied himself that Mr Dean had carried out the process correctly by speaking to Mr Dean. There were not dates given of this conversation or any notes. Mr West also asked Mr Dean if he would have done things differently and Mr Dean had replied in the negative. On this basis the Respondent were satisfied that the scoring was carried out fairly and objectively. Mr West accepted that Mr Dean did not use any records or objective evidence in arriving at his scores but that he relied entirely on his personal judgment as a line manager and took a "rounded" view. When pressed in cross examination Mr West accepted that "he could not explain Paul Dean's scoring" and neither could he "question his scores as HR Manager". Mr West was asked how he ensured that there was no bias in the scoring and his response was "that he made sure of this because he explained to [Mr Dean] that he was not allowed to take his personal feelings but had to be based on knowledge". On this basis Mr West was satisfied that Mr Dean was "happy" to carry out the process. Mr West was unable to explain why the Claimant's absence card (p.184) was blank or why the Claimant's sickness absence card was blank (p163-4) and yet she had been scored on this taking absence records for 2005-2006.
38. The process for marking adopted by the Respondent was that Mr West sat down with Mr Dean and went through each criterion and the definitions to ensure that he understood exactly what he needed to do. Mr Dean was asked to carry out all the scoring in one day and not to consult anyone during the marking process. Mr Dean did not give evidence to the Tribunal."
"55. As regards consultation, although the Respondent gave notice of impending redundancies in November 2006, it failed to consult with the trade union on the selection criteria until after they had been agreed. Consultation in this case was not done at a time when the proposals were still at a formative stage. No adequate time was given to the Claimant to consider and respond to the proposal for redundancy. The purpose of consolation [sic] with the Claimant is for the Respondent to find out whether the needs of the business can be met in some other way other than by dismissal, and if not, what other steps the Respondent can take to ameliorate the redundancy. In particular, what alternative employment might be available? Good industrial practice requires that, bar special circumstances, a fair employer will consult with the employee before dismissing. We are satisfied that there was inadequate consultation in this case. Alternative employment, and in particular the May Day vacancies were not discussed with the Claimant and the Claimant was not given a reasonable opportunity to express her views on those vacancies before the decision to dismiss her was taken.
56. We are satisfied that the Respondent gave due consideration to the pool for selection and had applied their minds to the problem and acted from genuine motives.
57. We accept that the Respondent has a great deal of flexibility in defining the selection criteria. We have asked ourselves whether the Respondent's choice of the criteria selected here fell within a range of reasonable responses available to a reasonable employer in all the circumstances. We are satisfied that they did. However, we are not entirely satisfied that the criteria selected were generally objective. We conclude that key aspects of the criteria marked were left to the individual choice and personal judgment of Mr Dean. A substantial proportion of the criteria were not capable of specific measurement by reference to records of attendance, efficiency, etc. In addition, the criteria guidelines were not applied in such a way as to make the dismissal a reason able one. We conclude that the scoring applied to the Claimant was not applied in a reasonable fair and objective manner. There was no evidence put to us to demonstrate how Mr Dean scored apart from Mr West confirming that he was "comfortable" with the scoring. The decision to allow Mr Dean to use his personal judgment (without any supporting evidence to justify his scoring) when applying the criteria was not a process that fell within the band of reasonable decisions available to a reasonable employer in a redundancy situation and was therefore unfair. The absence of evidence before us as to how the scoring had been arrived at made it impossible to for us to decide that the selection criteria had been fairly applied and accordingly the Claimant had been unfairly selected.
58. Whilst we recognise that the Respondent does not have to prove the accuracy of the marks awarded to the Claimant the Respondent does have to prove that the method of selection was fair in general terms and that it was reasonably applied to the Claimant. This does not mean that the Claimant is entitled to disclosure of marks of other employees. Neither is it necessary for the Respondent to produce evidence relating to all the assessments made. In this case there was no consultation with the trade union. We are mindful that it is not our task to subject the marking system to microscopic analysis or to check that the system had been properly operated. Our task is to assess whether the Claimant had been treated fairly by the employers. The manner in which the Claimant was given her scores and the time given for her to challenge the score was unreasonable.
59. The Claimant was given a right to appeal and although she was not entirely co-operative it was clear that the Respondent did not rectify the unfairness in the criteria application. Mr Quaife did not seek any clarification of how the scores were arrived at and approached the appeal with a close mind. He relied on Mr West's judgment that Mr Dean would not have acted unfairly. He carried out no independent assessment of how the scoring was arrived at in order to justify the marks awarded to the Claimant."
Fairness of Dismissal
"1. The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who m ay be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere.
2. The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria.
3. Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service.
4. The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider the representations the union may make as to such selection.
5. The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment."
"10. The principal issue in this appeal is whether the Industrial Tribunal have correctly understood and applied the law as laid down in Buchanan v Tilcon Ltd, supra. That was a case in which the evidence led before an Industrial Tribunal was that of an area contracts manager of the employers, Mr Grogan, who had had to make the decision about the redundancy of individuals, and the personnel manager, who described the general basis of the selection. The Industrial Tribunal accepted that Mr Grogan's decision had been fairly taken on the basis of information available to him, but they thought that that was not sufficient to discharge the onus of proof which, at that time, lay upon the employers under s.57(3). They held that it was necessary for the employers to prove the accuracy of the information upon which Mr Grogan had acted. The Employment Appeal Tribunal held, on appeal, that the Industrial Tribunal had placed much too high a requirement upon the employers, and that decision was affirmed by the First Division. The Lord President said, in a well-known passage;
"We are not persuaded that the attack upon the decision of the Employment Appeal Tribunal is well-founded. The only issue before the Industrial Tribunal was whether Mr Grogan had acted reasonably in selecting the appellant for dismissal on the ground of redundancy. The reason for the dismissal of the appellant was redundancy. As was pointed out in the opinion of the court in Atkinson v George Lindsay & Co [1980] IRLR 196, where a dismissal for that reason, survives (as the dismissal of the appellant does) the tests prescribed in what is now s.59 of the Employment Protection (Consolidation) Act 1978, it will in most cases be extremely difficult for any Tribunal to hold that in dismissing a particular individual his employers acted unreasonably within the meaning of s.57(3). This was readily accepted by counsel for the appellant who recognised also that s.57(3) which applies to dismissal by reason of redundancy does not readily lend itself to that situation. In the event, the appellant, apart from throwing out the suggestion that he might have been victimised because of dislike, merely expressed his concern that others with even less seniority than he and employed in the same work (labouring) had been kept on. In this situation where no other complaints were made by the appellant, all that the respondents had to do was to prove that their method of selection was fair in general terms and that it had been applied reasonably in the case of the appellant by the senior official responsible for taking the decision. As was pointed out by Phillips J in Cox v Wildt Mellor Bromley Ltd [1978] IRLR 157, it is quite sufficient for an employer in a case such as this to call witnesses of reasonable seniority to explain the circumstances in which the dismissal of the employee came about, and it was not necessary to dot every "i" and to cross every "t" or to anticipate every possible complaint which might be made. In our opinion, agreeing with the Employment Appeal Tribunal, it is quite unrealistic and unreasonable for an Industrial Tribunal – which is prepared to accept that the senior official who made the selection reached his decision fairly upon the basis of company information, the reliability of which he had no reason to question – to demand of the employer for the purposes of s.57(3) that he should set up the accuracy of that information by direct evidence of other witnesses speaking, perhaps, to records for which they had some responsibility. The Industrial Tribunal, in our opinion, set for the respondents in this case a standard which was much too high. In so doing they misdirected themselves and we have no doubt that the Employment Appeal Tribunal was entitled to go on to hold that the only reasonable conclusion which was open upon the evidence led before the Industrial Tribunal was that the respondents had discharged the onus which rested upon them in terms of s.57(3) of the Act.
11. In considering the Industrial Tribunal decision in this case, it is important to bear in mind that the starting point is a finding that the employers were not in breach of s.59. This, therefore, is a situation to which the observations of the Lord President are directly relevant. Secondly, the employers explained their selection process, which depended upon assessment of each employee by persons who had direct knowledge of his work, namely the supervisors. There seems to us to be no material difference between the position of a senior manager who relies on such reports and that of one who relies on information in company records. In both cases, the senior manager is relying on the proper performance of the work done by those appointed to do it and, in the absence of some reason to think that the work has not been properly done, there is no reason why he should not so rely. The evidence given by Mr Hunter, as reflected in the quotations from the Industrial Tribunal's findings given above, shows no more than that, as might be expected, he was not able to speak to the details of individual assessments. In the present case, the method of assessment, and the headings under which the assessment was to be carried out, were intimated to the relevant union, which did not object to them. There is nothing whatever in the findings to indicate that the assessment process was not carried out honestly and reasonably. There may be some cases in which some inference can be drawn from the markings or findings that there was something unfair about the individual application of the methods of selection, but this is not such a case. Accordingly, it seems to us that in reaching the view that the selection was unfair, because they had not heard evidence from those who actually made the individual assessments to explain why the respondents lost marks, the Industrial Tribunal fall into precisely the error which was identified in Buchanan v Tilcon Ltd. In fact, it appears to us that what the employers did in this case was to set up a good system of selection, reasonably administered. It may very well have been possible to argue about the individual markings of individual employees, but that is a comment which applies as much to the marking of those who were not selected for redundancy as to that of those who were. If the view taken by the Industrial Tribunal were carried to its logical conclusion, there could be no alternative but to require the employer, in every such case, to produce all the evidence bearing upon all the assessments out of which the redundancy decision arose. That seems to us to go far further than is proper. Of course, every redundancy situation is one of distress for employees who are affected; and every redundancy situation is one in which hard decisions have to be made. It is, however, essential to remember that what is required of the employer is that he should act reasonably."
"I would endorse the observations of the Employment Appeal Tribunal in Eaton Ltd v King & Others [1995] IRLR 75 that it is sufficient for the employer to show that he had set up a good system of selection, that it was fairly administered and that ordinarily there was no need for the employer to justify all the assessments on which the selection for redundancy was based."
Fairness
"the Respondent does have to prove that the method of selection was fair in general terms and that it was reasonably applied to the Claimant."
Polkey
"61. There was no evidence before us to demonstrate that even if the Respondent had carried out the selection and consultation properly the claimant would have been dismissed. As there were alternative vacancies it was difficult for the Tribunal to say with certainty that the Claimant would still have been dismissed."
"Failure by an employer to follow a procedure in relation to the dismissal of an employee 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."
"54. The following principles emerge from these cases:
(1) In assessing compensation the task of the Tribunal is to assess the loss flowing from the dismissal, using its common sense, experience and sense of justice. In the normal case that requires it to assess for how long the employee would have been employed but for the dismissal.
(2) If the employer seeks to contend that the employee would or might have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, it is for him to adduce any relevant evidence on which he wishes to rely. However, the Tribunal must have regard to all the evidence when making that assessment, including any evidence from the employee himself. (He might, for example, have given evidence that he had intended to retire in the near future).
(3) However, there will be circumstances where the nature of the evidence which the employer wishes to adduce, or on which he seeks to rely, is so unreliable that the tribunal may take the view that the whole exercise of seeking to reconstruct what might have been is so riddled with uncertainty that no sensible prediction based on that evidence can properly be made.
(4) Whether that is the position is a matter of impression and judgment for the Tribunal. But in reaching that decision the Tribunal must direct itself properly. It must recognise that it should have regard to any material and reliable evidence which might assist it in fixing just compensation, even if there are limits to the extent to which it can confidently predict what might have been; and it must appreciate that a degree of uncertainty is an inevitable feature of the exercise. The mere fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence.
(5) An appellate court must be wary about interfering with the Tribunal's assessment that the exercise is too speculative. However, it must interfere if the Tribunal has not directed itself properly and has taken too narrow a view of its role.
(6) The s.98A(2) and Polkey exercises run in parallel and will often involve consideration of the same evidence, but they must not be conflated. It follows that even if a Tribunal considers that some of the evidence or potential evidence to be too speculative to form any sensible view as to whether dismissal would have occurred on the balance of probabilities, it must nevertheless take into account any evidence on which it considers it can properly rely and from which it could in principle conclude that the employment may have come to an end when it did, or alternatively would not have continued indefinitely.
(7) Having considered the evidence, the Tribunal may determine
(a) That if fair procedures had been complied with, the employer has satisfied it - the onus being firmly on the employer - that on the balance of probabilities the dismissal would have occurred when it did in any event. The dismissal is then fair by virtue of s.98A(2).
(b) That there was a chance of dismissal but less than 50%, in which case compensation should be reduced accordingly.
(c) That employment would have continued but only for a limited fixed period. The evidence demonstrating that may be wholly unrelated to the circumstances relating to the dismissal itself, as in the O'Donoghue case.
(d) Employment would have continued indefinitely.
However, this last finding should be reached only where the evidence that it might have been terminated earlier is so scant that it can effectively be ignored.