United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR D TATTON BROWN (of Counsel) Instructed by: Messrs Trethowans Solicitors The Director General's House Rockstone Place Southampton Hampshire SO15 2EP
For the Respondent	MS H SAMPSON (of Counsel) Instructed by: Messrs Thompsons Solicitors City Gate East Tollhouse Hill Nottingham NG1 5FS


 


SUMMARY

UNFAIR DISMISSAL

Reasonableness of dismissal

Procedural fairness/automatically unfair dismissal

The Tribunal failed to make findings regarding whether the employers had adopted a reasonable marking system for redundancy selection.

HIS HONOUR JUDGE ANSELL

1. This has been the hearing of an appeal from a decision of a Leicester Employment Tribunal chaired by Mr Goodchild. They conducted hearings in June and July 2007. It was not until February 2008 that the full written reasons were given supporting a decision that there was unfair redundancy in respect of the eight Claimants and remedies were adjourned.
2. The decision was on the basis of inadequate consultation and a failure to use objective criteria in respect of the marking process that led to the redundancies. These, of course, are the two familiar strands that we often see in redundancy cases.
3. There was no consideration by the Tribunal of section 98A(2) but they did indicate that they were going to reduce the award under Polkey by 50 per cent.
4. This appeal was allowed through to a full hearing by HHJ McMullen who sifted the case in April 2008.
5. The hearing today has to some extent become somewhat of an academic exercise because within the last few days it became apparent to this court that there were negotiations but unfortunately in respect of all the respondents those negotiations were not concluded.
6. As regards seven of them we are told that they will be withdrawing their claims before the Tribunal on the basis that since remedies have not been resolved the proceedings are still technically in front of the Tribunal.
7. They apparently also accept that there was a fair dismissal.
8. In respect of an eighth respondent, Mr Smith, although it is believed that he is a willing party to this proposal he has not given his formal consent as he is apparently uncontactable on holiday and therefore the hearing still remained a live one before us.
9. The only issue effectively before us, the parties agreeing that there were sufficient defects in the Tribunal's decision to justify us either sending the matter back for a fresh hearing or imposing our own view that the dismissal was in fact fair, is which of those two courses we should adopt.
10. Mr Tatton Brown on behalf of the Appellants has submitted that there is sufficient in the decision to allow us to form the view that the Tribunal below were clearly wrong and that we should find that the employers had adopted a reasonable procedure in dealing with the marking of the respective candidates for redundancy.
11. Ms Sampson for Mr Smith argues that there are so many gaps in the fact finding of the Tribunal that for us to impose a view that the dismissal was fair would involve us effectively becoming fact finders and, as it were, finding facts which do not appear in the Tribunal's decision and therefore a fresh hearing is needed.
12. The defects of the Tribunal's decision probably stem in part from the unfortunate sequence of events that in fact led to the delay in reasons being provided.
13. The outline decision was in fact sent to the parties in a letter from the Tribunal dated 23 July. Following correspondence with the employer's solicitors a further hearing was to be arranged between the Chairman and the Members when their more detailed consideration was going to take place and presumably their reasons committed to either paper or tape.
14. For various reasons that have been set out in a note dated 7 August 2008, the reconvening of that Tribunal did not take place until 6 November. It does appear that Mr Goodchild then dictated a decision for transcription; however the incomplete draft came back, the typist noting that the second half of a 1hour tape had nothing on it.
15. The problem was compounded by the fact that it appears that Mr Goodchild did not then re-dictate either the whole or the missing part for some months due, he says in his note, to an exceptionally busy period and quotes, "in part my fault in failing to find time during that period". That is regrettable. Certainly on behalf of the Tribunal Service we, as the Appeal court, would apologise to the parties for that unacceptable delay.
16. This court has stressed time and time again the importance of decisions being given promptly. The delay in this case was unacceptable.
17. We as the appellate court are under strict constraints and supervision from the Lord Chief Justice and other senior judges to provide our decisions normally within a three month period. The only delay in this building is occasioned by the fact that we are now down to one live typist in the building.
18. There is important pressure on us, as indeed on the High Court, for all Judges to deal with these matters promptly and we would assume that that guidance applies to courts below. We were concerned to see the unacceptable delays in this case. We trust that they will not be repeated.
19. Those delays, we suspect, led to a very brief and somewhat cursory view of the important facts of this case.
20. The facts were that there was a necessity in this company that became apparent in the summer of 2006 for a 12 per cent reduction in the workforce.
21. The previous year a new managing director decided to abandon the keeping of records in relation to attendance and other competencies. That may have had its benefits at the time in management time being concentrated on the important issues of running the company, but of course could lead to problems in the event that records in terms of attendances and competencies would be needed to select staff were there to be a redundancy.
22. The redundancy process and the marking process were carried out. The Tribunal found that there was really no consultation with the union prior to the exercise being carried out.
23. The decision makes reference to an independent personnel manager selecting the criteria but makes no reference to what the criteria were, merely speaking of the fact that individual managers who were, the Tribunal found, expressing their opinions honestly, carried out the marking process. But the Tribunal repeatedly criticised this process because it is said the managers were expressing their "subjective opinions".
24. The unions were really only spoken to once the initial mark through had been carried out. That was in August 2006. Although the union raised objections to the criteria proposed they really were reluctant to suggest alternatives, and therefore those who had been selected by this process were the ones who were chosen for the purposes of redundancy.
25. The Tribunal's conclusions were in very general terms. They referred to the use of subjective criteria and the failure to consult the unions earlier and, as the Tribunal found, reaching some form of objective criteria.
26. Their conclusion in paragraph 13 was that the selection of redundancy was flawed; no objective criteria were used; the process for which the men were selected for redundancy was flawed; also, fatally in our view, that the consultation process in effect was meaningless and merely for form's sake.
27. As we have indicated already there was no consideration of whether a fair process had been carried out, or whether the dismissals would have been fair applying section 98A(2) but they did impose a Polkey reduction of 50 per cent. That is effectively the maximum that is permissible now because if they had taken the view that it was 51 per cent then in fact section 98 would have been satisfied as on the balance of probabilities they would therefore have had to consider the redundancies were fair.
28. The criticism of the Tribunal is that they failed to ask themselves the proper questions in that they were not bound to consider what was, as it were, the ideal marking system but whether these employers had adopted a reasonable system. Authorities such as King & Anor v Eaton Ltd [1996] IRLR 199, a Court of Appeal decision, and also the earlier EAT hearing reported as Eaton Ltd v King & Ors [1995] IRLR 75 make it clear that it is not a tribunal's task to inquire into the minutia of a marking process or as to how marking was carried out.
29. The early decision of Williams v Compair Maxam Ltd [1982] IRLR 83 makes it clear that as far as possible an objective system should be used or rather marking that can be verified by objective criteria and that the marking should be carried out in an honest and reasonable way.
30. The fault of this Tribunal was that they failed to set out in any detail the way that the criteria were prepared, and in particular the way the marking was carried out.
31. We have not seen notes of evidence but for these purposes we assume that what Mr Tatton Brown tells us in his submissions is correct and it is clear that an HR consultant gave advice about the criteria. There were four main headings. He gave the markers guidance notes as to how the marking should be carried out and we regard this particularly significantly. Each employee was marked by at least two people, supervisor and manager, with what was described as a "sanity check" carried out by Mr Kanalas, the head of component manufacturing. None of that emerged from the Tribunal's decision.
32. Whether or not the Tribunal will take the view that any organisation that destroys all its records does leave itself open to the criticism that criteria can never be objective because at the end of the day the marking is entirely reliant, as it were, on the opinions of the marker, is a matter the Tribunal may have to consider.
33. It is clear to us that there are considerable gaps in the fact finding and gaps which materially could affect the Tribunal's decision. Indeed, as we repeat, a failure by the Tribunal to apply the King v Eaton test as to whether or not in the circumstances the marking system was a reasonable one. Those circumstances would, of course, have to take into account that this firm did not in fact keep objective records in terms of performance and attendance.
34. Mr Tatton-Brown asks us to impose a decision that in the light of what we now know that this marking system was a fair and reasonable one conducted honestly by the markers, and therefore should be regarded as a fair system. Further he agrees that the failure of consultation, if there had been one, would have made no difference insofar as there was a defect in terms of the absence of consultation before marking, applying the provisions of Section 98A(2).
35. However, that process involves us in a considerable amount of fact finding. The tradition of this court is that we do not normally alter a view as to the fairness or unfairness of a dismissal unless there are sufficiently clear facts apparent from the body of a Tribunal decision that would enable us to say that this Tribunal on the facts found by them got it wrong, and that we can impose our view.
36. As Mr Tatton Brown recognised in the course of argument much of his case depends upon the argument that there was an absence of proper fact finding about the marking system and referred in particular to paragraph 10 of his submissions where he sets out what we regard as key factors about the marking being carried out by two managers and the sweeping-up process.
37. In any event even if we were to take the view that the marking system was fair there is in our view still an issue concerning the absence of consultation prior to a system being put into operation.
38. Mr Tatton Brown argues that although the union might have requested a more objective system that in the light of the absence of company documentation there was nothing more that this company could have done in terms of setting out the criteria for marking. Again that seems to us to be a matter that must be properly argued before a Tribunal should there ever be a need for a fresh hearing if Mr Smith is not willing to abide by the terms of settlement.
39. We again cannot say that an absence of consultation prior to the marking being carried would not have made any appreciable difference to the conclusion, certainly to the extent that Section 98A would or would not have come into play.
40. There are, therefore in our view, considerable defects with this decision. Defects that we cannot cure and therefore we are unanimous in the view expressed by the Respondents that we set aside the Tribunal's finding and remit this back to the same Tribunal if it be necessary, for them to reconsider the issue.