United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS B SUNDERLAND (Solicitor Advocate) Messrs Crossland solicitors 173 Curie Avenue Harwell Oxon OX11 OQG
	MS Y BUDE (of Counsel) Instructed by: Messrs Hart Brown solicitors Resolution House Walnut Tree close Guildford Surrey GU1 4UX


 


SUMMARY

UNFAIR DISMISSAL

Reasonableness of dismissal

S.98A(2) ERA

An Employment Tribunal erred when it substituted its view for that of management conducting a redundancy selection exercise. It was not for the Employment Tribunal to decide the management were wrong in law to add one person whose job was redundant into the pool, and in the award of points to him, the Claimant and others. Since the Claimant did not challenge the criteria, and these included subjective assessment by managers, the award of points could not be faulted as a question of law.


 


HIS HONOUR JUDGE McMULLEN QC

1. This problem has occurred with increasing frequency since the recession began over 15 months ago. It is a sad tale of personal disappointment for Mr Symonds, who has lost his job by reason of redundancy and of anxious consideration by his employer, Inchcape Retail Ltd, faced with what were regarded as wholly inevitable decisions. It is about the selection process for redundancy in the context of an unfair dismissal claim. This is the judgment of the court to which all members appointed by statute for their diverse specialist experience have contributed.

Introduction

2. It is an appeal by the Claimant in those proceedings against a judgment of an Employment Tribunal chaired by Employment Judge Silverman registered with reasons on 14 May 2009 at London South. The parties were represented respectively by Ms Budé of Counsel and Miss Sunderland solicitor advocate. The Claimant claimed unfair dismissal. The Respondent contended it dismissed him fairly by reason of redundancy having carried out a fair procedure.

The issues

3. The essential issues before the Employment Tribunal were not set out. It has to be said that this judgment does not correspond to the requirements set out in Rule 30, nor the guidance given by Buxton LJ in Balfour Beatty Power Networks Ltd v Wilcox [2007] IRLR 63 CA for it does not contain a concise summary of the applicable law nor separate the facts from the conclusions. We have our criticisms. A sustained attack was made by Miss on the basis that it was not Meek compliant, see Meek v City of Birmingham District Council [1987] IRLR 250 (CA), to which, the riposte by Ms Budé was based upon a passage in English v Emery Reimbold & Strick [2002] 1 WLR 2409 that so long as the parties could understand why they had won and lost, a minute criticism of a judgment should not be entertained on appeal.
4. While not meeting the highest standards for decision writing, we consider that it just passes the Meek test but we do say, consistent with submissions made by Miss Sunderland that certain significant matters addressed to it in writing by both advocates have not been dealt with. The issues were to determine the fairness of the selection process for his dismissal and then, if unfair, to determine compensation. The Employment Tribunal upheld the claim and awarded the Claimant £30,058.29.
5. The Respondent appeals against liability and the assessment of compensation. Directions sending this appeal to a full hearing were given by Underhill P. At the same time, directions were given for the agreement of notes of evidence and for the obtaining, in default, of the Employment Tribunal judge's notes. In interim case management by the President and by me, a decision was made that the notes, which are extant but not approved by the judge, would be available and the parties could make submissions upon them. We have done the best we can and we appreciate the difficulties placed along the way of both advocates in dealing with this matter. It was in accordance with the overriding objective that this case be heard today.

The facts

6. With the assistance of the Claimant himself and Miss Sunderland we have been able to construct the elementary facts of this case, since they are not vouchsafed to us by the Tribunal. Inchcape is a group of companies. Its 130 franchises sell new and used cars and service them. Each is an independent business centre. At Cobham, down the A3 from London to Guildford, is the Respondent's business, employing 80 people. It was in the latter part of 2008 that there befell to this company (as to so many others in the automotive sector) the terrors of the recession. As was put by its leading light, there was a financial plight in the motor industry in the UK. Trading conditions were the poorest in living memory and the speed with which such conditions developed gave no time for the business to adjust gradually.
7. So it was that in October 2008 the Inchcape Group required reductions to be made across the estate. Several hundred staff had been dismissed, between five and ten at each of its dealerships. Mitigation of the effect of this at Cobham was achieved because of early resignations. Nevertheless, there was an imperative to make redundancies. The decision was made that the number should be seven. These were identified as follows:

"The jobs of warranty administrator, tyre fitter, car park jockey, parts consultant, general sales manager and assistant works controller were all considered to be separate jobs and the post holders were warned of impending redundancies. This would have left one remaining redundancy to be effected from the technicians."

8. The number of technicians was found by the Tribunal to be 11, although one of them was in a senior supervisory position. The main focus of this case turned upon Mr Elliot who did not do a technician's job but had come up during his 26 years of service from being a technician so that for the last three and a half years he had been assistant works controller.
9. The Claimant was a technician employed for 31 years from 21 February 1977 until dismissal on 5 November 2008. He was 63 with a retirement date at age 65. There was consultation within the workforce, initially with those earmarked to be made redundant. There had been no challenge to the Respondent's decision as to the earmarking of those six who were described as stand alone or specific jobs, together with one other then drawn from the technicians.
10. Mr Elliot on his consultation, seeing the bleak future which presented itself to him, not unnaturally asked to be considered as a technician and so the five jobs specifically earmarked and filled by employees were made redundant. The assistant works controller position was made redundant but Mr Elliot resurfaced to be considered amongst the technicians.
11. A matrix was produced, drawn up by Mr Bystram, who managed all of these people and had appraised them. The matrix includes seven criteria; they are a mix of objective and subjective. Expressly accepted by Ms Budé is that there is no criticism of those criteria. Thus, as is common, subjective consideration was injected into the redundancy selection process. For example, overall work performance and job knowledge demand some subjective consideration. A manager managing workers in this capacity will have an overview of their work performance and their knowledge. On the other hand, really the only criterion which can be objectively measured without dispute is length of service. Even attendance record, another of the seven criteria, which ought to be objectively verifiable, is the subject of dispute.
12. The seventh criterion is called "hours sold". This is a way of measuring the efficient work done by a technician. Most of the jobs done for customers on cars such as BMW are capable of generating an objective standard for hours sold. Clearly, an inefficient technician who puts in a lot of hours on a job which does not justify it would not be billed out to the customer at that price. Hours sold is an important measure in this business and it is, it must be said, the way in which the business makes money. For people who do not actually sell the vehicles hours sold is an appropriate measure. But it is not for us to make that sort of judgment, there being no criticism that the people who fixed these criteria have to run a motor business.
13. Plainly, managers had to make the assessments. The points which were given, so far as are relevant, are: Colin 46, the Claimant 56, technician 2 63, technician 3 66 and Mr Elliot 67.
14. The simple and emotive point the Claimant made to the Employment Tribunal was that it was wrong to include Mr Elliot in the pool. If he had not been included he would have been made redundant as one of the stand alone jobs, as assistant works controller. The axe would have fallen on only one technician. Colin scored the lowest; he had no one batting for him and was made redundant. However, once Mr Elliot went into the pool the company's determination to achieve seven redundancies transposed itself into two redundancies amongst the technicians. The Claimant's case was that while Colin could not be saved, he himself would be saved because he ought to have scored better on his own points and Mr Elliot ought to have been downgraded on his points.
15. That approach is one which is common in our experience. Once that the criteria are fixed, the scope for complaint by a redundant employee is quite narrow. But there can be challenges where objective factors come into play and simple mistakes can be corrected, such as length of service wrongly calculated or absence record unfairly attributed. It would be unreasonable to dismiss a worker whose scores were based on demonstrably wrong figures. However, absent an allegation of actual bias in a manager, criticisms of a points allocation for work performance or job knowledge will be difficult to make in fact and law.
16. The Employment Tribunal upheld the Claimant's case that it was wrong to include Mr Elliot in the technicians' group:

"While the Tribunal recognises that it must not substitute its own views for that of the Respondent, it finds that the Claimant was unfairly selected for redundancy because Mr Elliot, performing a role which the Respondent's described as stand alone was put into a pool of technicians who performed a different job from him. This was an inappropriate pool for redundancy and distorted the results of the matrix."

17. It also decided that some scores were not, as it put it, valid in respect of Mr Elliot. The reason why there were not valid was because Mr Elliot had not for three and a half years worked on the shop floor as a technician and so some scores should not have been attributed to him. On that basis, the Tribunal found the decision to dismiss him was substantively unfair.
18. It also made a number of criticisms of the procedure used, such as a lack of consultation with the Claimant and a failure to find alternative work for him. The management had three individual consultation meetings with the Claimant before his dismissal. On appeal against his dismissal, he did not attend; representations were sent by a solicitor and the appeal was dismissed on 12 December 2008.

The Claimant's case

19. In a very detailed examination of the primary facts in this case, Ms Budé and to the same extent Miss Sunderland have pored over the scores. The central objection of the Claimant is to Mr Elliot. The unfairness involved in Mr Elliot going into the pool caused the dismissal of the Claimant; had he not been included only Colin would have been dismissed. It was unfair also because Colin was found a job with an independent contractor cleaning the workshop; no such offer had been made to the Claimant.
20. Of the criteria applied to the entire workforce, that of hours sold was quite wrong in respect of Mr Elliot, for he had sold no hours for three and a half years. The Claimant's attendance record was disputed. Had account been taken as a matter of discretion, but not of right, of certain days off when the Claimant had problems with his back (caused by, it is said, his industrial injury) his attendance score would have improved.
21. The Claimant's job knowledge should have been given more credit. Thus, of the scores in seven criteria, three were challenged and should have gone to improve his score. As for Mr Elliot, even if he is correctly in the pool, he should have scored lower on overall work performance and hours sold. It was a foregone conclusion that the Claimant would be dismissed. The Tribunal was not required to go through the exercise under Polkey. [1988] ICR 142 HL There was no error by the Employment Tribunal in failing to deal with the submission made by the Respondent that if this were a procedurally unfair dismissal the Employment Rights Act 1996 section 98A(2) would be invoked. In respect of compensation, it is contended that the Tribunal acted upon an agreed schedule and cannot be faulted; in any event, its thinking is plain.

The Respondent's case

22. On behalf of the Respondent, it is contended that the Tribunal did indeed substitute its judgment. It did not say clearly why it rejected the evidence of Mr Bystram and it did not explain how attacks on Mr Elliot could have saved the Claimant. The Tribunal did not explain why hours sold could not be adapted for inclusion in the criteria when Mr Elliot was in there by use of the expedience of averaging. For this and other matters, it is submitted that a band of reasonable responses is applicable. Provided the management acts reasonably, it is not to be gainsaid when it makes decisions as to allocation of points based upon partly subjective criteria.
23. The seemingly objective criterion of attendance was the topic of unclear evidence at the Employment Tribunal. It was submitted that the Claimant was told his record and did not object on the basis that certain days should be mitigated. But even so, the effect would not be to move his points very substantially.
24. The Respondent is under no duty to find work. Nor is it under a duty to consider and canvas vacancies outside of its company or group of companies, see Vokes v Bear 1974 ICR 1 NIRC. The fact that Colin had been found work, one assumes pursuant to some initiative by the Respondent at its cleaners, does not mean it had acted unfairly in relation to the Claimant.
25. The Tribunal should have considered Polkey, since it came to the conclusion that the dismissal was substantively and procedurally unfair. In any event, if Mr Elliot ought properly to have been excluded as a matter of law from the pool, the Respondent's case for bumping the Claimant to protect Mr Elliot was not addressed by the Tribunal; a claim properly made in the response.

The legal principles

26. In any unfair dismissal case, the Employment Tribunal must not substitute its judgment for that of the employer: London Ambulance Service v Small. [2009] IRLR 563 CA. In a case of unfair selection for redundancy, Thomas & Betts Manufacturing Ltd v Harding [1980] IRLR 255 CA indicates that there is no obligation on an employer to make space for a dismissed employee. The headnote in Buchanan v Tilcon Ltd [1983] IRLR 417 says this in relation to selections:

"The Court of Session held:

The EAT had correctly held that the Industrial Tribunal had erred in law in holding that the appellant's dismissal on grounds of redundancy was unfair because the respondents had failed to prove the accuracy of the information upon which they had acted in selecting him for redundancy. In reaching this decision, the Industrial Tribunal had imposed too high a standard of proof upon the employers.

Where a dismissal on grounds of redundancy survives the tests set out in s.59 of the Employment Protection (Consolidation) Act, ie that it was not in contravention of an agreed procedure or customary arrangement, in most cases it will be extremely difficult for a Tribunal to hold that in dismissing a particular individual his employers acted unreasonably (Atkinson v George Lindsay & Co [1980] IRLR 196). Where an employee's only complaint is that he was unfairly selected for redundancy and no other complaints are made, all the employers have to prove is that their method of selection was fair in general terms and that it was applied reasonably in the case of that employee. In doing so, it is sufficient to call witnesses of reasonable seniority to explain the circumstances in which dismissal of the employee came about.

In the present case, it was unrealistic and unreasonable for the Industrial Tribunal, which was prepared to accept that the senior official who made the selection reached his decision fairly upon the basis of company information whose reliability he had no reason to question, to demand of the employer that he should set up the accuracy of that information by direct evidence. In the circumstances, the EAT were entitled to hold that the only reasonable conclusion open to a reasonable Tribunal on the evidence was that the respondents had acted reasonably in selecting the appellant for redundancy."

Discussion and conclusion

27. As we apply those principles, while the Employment Tribunal directed itself not to substitute its judgment we fear it did. In the passage we have cited, which is the clear substantive finding in this case (paragraph 16 above) the Tribunal describes as inappropriate the pouring of Mr Elliot into the pool. That is, in our judgment, the substitution of a view of the Tribunal for that of management.
28. Standing back for a moment, this was a matter for management to decide. One only needs to consider the position of Mr Elliot, promoted recently, who now finds his job redundant when he could quite easily go back on the tools. The employer would have been unfair not to acknowledge his length of service and his previous service as a technician and to offer him work effectively back on the tools. This was a matter for management to decide and not for an Employment Tribunal. The decision to incorporate him in that pool, therefore, was for management and should not be interfered with.
29. Secondly, it is not the job of the Employment Tribunal to consider whether any points are valid. Of course, as a matter of fairness, under the Employment Rights Act 1996 section 98(4) demonstrable inaccuracies or actual bias can be exposed so that in our earlier examples, length of service and attendance can usually be measured objectively. But once an element of subjectivity is put into the criteria, it is not for the Employment Tribunal to substitute its view as to what the scores should have been. The overall work performance of the Claimant was assessed at 15 points. He argued it should have been 20; that is one notch up but that is not a decision an Employment Tribunal can make. The assessment was carried out by management who knew the Claimant and the others and it is not open to challenge as a matter of law.
30. The same goes for job knowledge. The Claimant here contended his points should have been 12 not 8 but that again requires a manager to form a view about the knowledge of the relevant employees. Some of it can be measured objectively; pass marks on recent training courses or historical records of apprenticeship and so on. But job knowledge is wider than that and includes an understanding of the way in which a motor mechanic goes about his job in that particular workshop.
31. Attendance record was attacked by the Claimant; he scored two points and contends that he should have scored either eight or four. This was the subject of a dispute at the Employment Tribunal and in the absence of a clear finding as to the obligation of the employer to take account of industrial disability and days off for that, a criticism of the points cannot be made. Miss Sunderland probably accepted that five days might possibly have been excluded in discretion of management. Those, again, are matters for management.
32. The purpose of the above exegesis, while not necessary for the Judgment, is to suggest to Mr Symonds that if his points remain where they are he is still at risk. Of course, if Mr Elliot's points are set aside for one reason or another and he falls from the score of 67 he achieved to below the Claimant's 56 then it would be unfair to dismiss the Claimant. Again, these subjective criteria are used for Mr Elliot; this time not simply as a technician but bearing in mind that he had been a technician and he was in a managerial position of technicians.
33. We think at the heart of this case is the Claimant's complaint that Mr Elliot was credited with points for hours sold. This was a matter which troubled management and for that reason he was given an average score for hours sold. Again not necessary for this Judgment but a way to test this might be to take out the hours sold criterion. That would be artificial for this group of workers but just to see how it works; if that offensive criterion in the Claimant's submission is removed he still would score below Mr Elliot and would not survive. Equally telling is a comparison with technicians 2 and 3, who scored respectively 63 and 66 points; no attack is made on their points. So, even if the Claimant made headway on some of the points he seeks to raise on the three contested criteria, he still has to beat one or two of these technicians and to land a number of blows against Mr Elliot's scores.
34. This kind of micromanagement is not for an Employment Tribunal or for us to carry out but we have been seduced by the advocates today into examining this in great detail. We are sorry to say that even if this were the correct approach on appeal the arithmetic presented to us would not have saved the Claimant.
35. The alternative argument for the Respondent, not addressed by the Employment Tribunal, seems to us to have great force, which is that if Mr Elliot had been kept out of the pool he could well have been a candidate for "bumping". That is the practice established in industry over many years whereby a person who is to be made redundant may be spared and some other sacrificed by the process of replacement. What it requires is the person under threat to be able to do the job of the person who was to be spared and that is precisely the case here. No mutual interchangeability is required; it is a one way street. So, Mr Elliot, had the company's submission been dealt with by the Employment Tribunal, might have been saved by reason of the application of the established practice of bumping.
36. A submission was made that the Tribunal had unfairly introduced an element of age discrimination. We do not consider the age of Mr Elliot or the Claimant to be relevant to the suggestion of unfairness in this case.
37. As to the criticisms of the procedure, there were three meetings, disclosure of the Claimant's material, disclosure of the material of the others in the group and we see no unfairness in the procedure adopted.
38. As to the fact that Colin found a job elsewhere, that is beyond the point. It is not surprising that a business such as this might reach out to one of its suppliers to see if it could help. The point is that of the 130 companies in the Inchcape Group, vacancies are advertised and these were made available to the Claimant through the website. There was none. There was no breach of the principle of fairness which requires an employer facing redundancy to take steps to see if there is work elsewhere within its group.
39. It is not necessary for us to deal with the issue of compensation but in the light of the argument we will do so. We reject Miss Sunderland's contention that the Tribunal should not have awarded almost two years' pay. True it is the reasoning is scant but it is simple; the Claimant was 63 and expected to go on to 65. He was terminated; losses should be calculated on that basis, less of course what he earned in between, since he was able to mitigate his loss to some extent. Further, the Tribunal made a finding that the Respondent did not disagree with this schedule. That ground of appeal is dismissed. We would further say, if necessary, that the Tribunal should have considered the Respondent's submission in the light of its finding that it was a procedurally unfair dismissal under section 98A(2) and it did not do so.

Disposal

40. Having canvassed the outcome with the advocates, it seems to us there is no utility in remitting this case. Since we have held that it was wrong in law to criticise the Respondent for including Mr Elliot in the group of technicians, the only issue is the scores. At least those involving some subjectivity are not properly matters for an Employment Tribunal and it should not interfere with them. But if they are, as we have analysed them, since Mr Elliot stays above the Claimant and the Claimant could not reach him (or probably technician 4 since technicians 2 and 3 are not challenged), he and Colin would stay in the same position we see no utility in sending this matter back.
41. We will set aside this judgment and substitute a judgment that the Claimant was not unfairly dismissed. Permission to appeal refused [reasons not transcribed].