United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR MATTHEW SHERIDAN (of Counsel) Instructed by: Messrs Laytons Solicitors Carmelite 50 Victoria Embankment London EC4Y 0LS
For the Respondent	MS DENISE DOLAN (Representative)


 


SUMMARY

UNFAIR DISMISSAL – Reasonableness of dismissal

CONTRACT OF EMPLOYMENT – Written particulars

The Employment Tribunal made two mistakes of fact which made the Judgment perverse. It could not be said to be unarguably right, and so was remitted to a different Employment Tribunal.

The right under Employment Rights Act 1996 s1 to written particulars does not apply to the Claimant as she was employed before 30 November 1993, and so an award under Employment Act 2002 s38 was set aside.

HIS HONOUR JUDGE McMULLEN QC

1. This case is about unfair dismissal in a redundancy situation where jobs were available within a group of companies but the Claimant, redundant employee, was not offered any.
2. This is the judgment of the Court to which all members appointed by statute for their diverse specialist experience have contributed. We will refer to the parties as the Claimant and the Respondent.

Introduction

3. It is an appeal by the Claimant in those proceedings against the judgment of an Employment Tribunal sitting at London Central under the chairmanship of Employment Judge Burns, sitting over three days and registered with reasons on 6 August 2009. The Claimant made a number of claims but relevant today is her unfair dismissal claim and the claim for untaken holiday.
4. The Claimant has been represented by Ms Denise Dolan, a lay representative, whose written and oral submissions can only be described as exemplary and a great credit to the industry which she has put into this case. The Respondent is represented by Mr Matthew Sheridan of Counsel. They have deployed excellent arguments and equality of arms has prevailed.

The Tribunal upheld the Claimant's claim of unfair dismissal, dismissing her discrimination claims and also made an award under section 38 of the Employment Rights Act 2002 for the Respondent had not provided sufficient particulars of her contract of employment. It rejected her claim for five days untaken holiday.

5. She appealed. The appeal was originally sent to a preliminary hearing by HHJ Birtles but on considering the papers ahead of the hearing which I was to conduct with members, it was apparent that, because of the issues raised and the need for further input from the Employment Judge in relation to notes and the Claimant's cross-appeal, all matters would be sent to a full hearing, which is what we have today. Because we have decided to allow the appeal and remit the case to a differently constituted Tribunal, it is not appropriate for us to say more than is the minimum necessary to understand our judgment.

The legislation

6. The legislation is not in dispute. The Employment Tribunal set out the relevant provisions of sections 139 and 98 of the Employment Rights Act 1996. It referred to section 38 Employment Act 2002 and to sections 1 and 4 of the Employment Rights Act in relation to particulars. The claim in respect of holiday was weighed against the Respondent in contract, although the Employment Tribunal ventilated the possibility of the claim under the Working Time Regulations. Nevertheless, at all stages the claim was a contract issue. No issue arises as to the directions under the Employment Rights Act nor to the summary of the law on fairness in a redundancy situation found in paragraphs 54 and 55 of the Judgment as follows:

"54. Where redundancy is established, the employer will normally not act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation and, where appropriate, within other companies in the same group.

55. It is not the function of the Industrial Tribunal to decide whether it would have thought it fairer to act in some other way: the question is whether the dismissal lay within the range of conduct which a reasonable employer could have adopted."

The Facts

7. The Claimant had been employed by the Respondent since 1984. She was engaged on the beauty counter of the Respondent's franchise in Selfridges department store in the West End of London. Separately branded, but part of the same group of companies, were the Respondent, Parfums Givenchy, Parfums Christian Dior and Guerlain. Operating under different Human Resources (HR) management was Louis Vuitton which was not engaged in the same kind of activity with the brands that we have indicated, but there was a connection. Presiding over the HR functions of the three perfume divisions was Sophy Brown.
8. The Respondent closed its operation at Selfridges because Selfridges had asked it to. So on 28 August 2008 the business shut down, but there were other counters there and in other department stores, including Harrods. Selfridges and Harrods were each regarded as the prima donna of the beauty business and so staff employed by the Respondent and these other companies were of the very highest standard in order to hold down jobs at the counters in those two stores.
9. The Claimant had been suspended in March 2008. There never was an outcome of any disciplinary charge put against her. She also had made a grievance which went through the process which was ultimately rejected by Sophy Brown. As a result of the closure of the counter, a loss of eight jobs was foreshadowed. There remained on appeal only one issue, whether or not the Respondent had done what was required of it in respect of alternative work which might have been available for the Claimant. There is no complaint about the procedure adopted, the pool or selection of the Claimant. The issue simply is that there were other vacancies. The group employs about 1,000 people and the Claimant applied for jobs at her level of which there were eight and one in Louis Vuitton.
10. The Claimant was interviewed by line managers and not by HR managers for each of these jobs and was rejected for them all. Her conclusion was that there was collusion between the HR people unfairly to disadvantage her in a co-ordinated unified response to reject the Claimant for each of these jobs (see paragraph 16 of her claim). The stakes, therefore, were high.
11. The Tribunal found in the Claimant's favour and two errors are indicated in the submissions of the Respondent going to perversity. They are that the Employment Tribunal wrongly recorded the decision makers at interview as being HR managers when they were line managers from a separate company; and secondly, the Tribunal failed to make a finding consistent with the straightforward evidence given by Sophy Brown that one company does not have the power over another nor does HR have power to allocate a redundant employee to another company. The three perfume companies operate autonomously. They have their own HR management, albeit at the top of them all is Sophy Brown, and they have their own line manager. It is the line manager who does the interviewing and the appointment of the staff to work in the intimate environment of the beauty counters.
12. The Tribunal made of its own volition a decision to award the Claimant four weeks pay in respect of the failure by the Respondent to provide sufficient particulars under section 38 Employment Act 2002. It rejected the Claimant's claim to be paid wholly as a matter of contract.

The Respondent's case

13. We agree with the Respondent that this unusually is a valid attack on the ground of perversity in respect of the two areas. Misunderstanding the facts is a ground for setting aside a judgment. The central issue was whether or not Sophy Brown was able to influence the selection or non-selection of the Claimant by one of the other companies in the group. The Tribunal, it is contended, wrongly formed a view that decision making was done by HR managers.
14. As to the section 38 point, it is contended by Mr Sheridan that there was no opportunity for the Respondent to argue his point, it having been decided by the Employment Tribunal without reference to it. There is an argument to be made, for example, as to whether the two weeks or four weeks pay should be awarded for this breach, but critically the provisions do not affect someone who has a contract of employment dating back to 1984 for section 1 of the Employment Rights Act 1996 applies only to those with employment beginning after 13 November 1993.
15. On the cross-appeal it is contended that since this matter was based upon contract and it being conceded on the Claimant's behalf that the contract makes no provision for the carry over of holiday pay, the claim could not succeed.

The Claimant's case

16. On behalf of the Claimant it is contended that although that is factually an incorrect finding, the line managers were exercising an HR function in the interviews. They received information from the centre and provided, through Val Gurney, an HR manager reporting to Sophy Brown, feedback from the individual managers who had conducted the interview. There was close proximity between the three companies and the personnel who made the decisions, and they were influenced by Sophy Brown's perception that the Claimant was a troublemaker and should not be continuing in employment.

Discussion and conclusions

17. We accept the submission of Mr Sheridan that this judgment is perverse in the two respects above. It might make a difference, certainly as a matter of perception, if HR managers under the control of Sophy Brown were making the decision at a points-scoring interview. It would be easier for the Claimant to make the claim that they were consciously or subconsciously affected by Sophy Brown's animus. That becomes more difficult when HR is detached from line management as it was here. This was not a simple error. We cannot be sure that the judgment is unarguably correct, notwithstanding the misappropriation of the functions respectively of HR and line managers. The mistake is made on at least five occasions, attributing the interviewing process to HR managers when it was not.
18. The second issue relates to the Tribunal's decision that it was wrong in law to fail to allocate the Claimant to vacancies and any other companies. In our judgment this puts the duty on the employer too high. In any event, it was not the evidence of Sophy Brown, who gave clear evidence that there were autonomous companies. It is also the experience of members of this Tribunal that limited companies operate autonomously and where they have their own HR and line managers, it would be very unusual for one limited company to be able to impose its will on another or for the controller of the group to be able to do that.
19. The law which should be applied in this case derives from the judgment of the NIRC in Vokes Limited v Bear [1973] IRLR 363, [1974] ICR 1. Where there is a redundancy a company in a group will act fairly only if it looks to see if any assistance could be given to an employee and to consider the question of finding some other position in the group. The law has developed since then and Mr Sheridan accepts the statement of the law set out in Harvey on Industrial Relations and Employment Law at paragraph 1725 in the following terms:

"In Darlington Memorial Hospital NHS Trust v Edwards and Vincent UKEAT/678/95 the EAT has stated that if employees are told to apply for the available jobs then the applications must be considered properly and the exercise carried out in good faith. In Ralph Martindale & Co. Ltd v Harris [2007] ALL ER D 347 the EAT stated that Darlington was some authority for saying that the selection process should at least meet some criteria of fairness and supported the proposition made by the EAT in that case that there may be some duty of care."

20. In those circumstances a selection process which turned down an employee out of bad faith would not be fair. So, again, we cannot be certain that the judgment was unarguably correct in the light of this error. It was not open on the evidence which was given for the Tribunal to find that the Respondent could allocate the Claimant to a position in Guerlain or Christian Dior. The highest it can be put is that it was under a duty to assist the Claimant and to consider alternative work. In the same way, it should not unfairly influence the appointing officers of the subsidiary companies in the decisions which they made.
21. So, on that basis, with the directions we give above, this matter will be remitted to an Employment Tribunal. To some extent our consideration has been affected by our judgment on the section 38 point, for we accept in full the submission made by Mr Sheridan. As a matter of jurisdiction, the Claimant's contract did not fall within the protection and, as a matter of fairness, as Miss Dolan very helpfully accepts, the issue was not raised and the Respondent had no opportunity to deal with it.
22. This matter was not part of the earlier case management but now the point is live we have resolved it and it is not necessary for any further discussion to take place. As a matter of law the Claimant was not entitled to rely on section 38. This ground of appeal succeeds without remission.
23. We then turn to the cross-appeal. Again, in the light of the helpful approach adopted by Miss Dolan, this case cannot succeed either. The tramlines for the hearing were set at the CMD; this is a contractual claim. The concession that the contract contained no provision for carry-over of holidays means this point cannot survive. A subsidiary argument as to whether or not there was a different breach of contract in the suspension was not made to the Employment Tribunal and cannot be made now. So, the five-day holiday pay claim was correctly decided by the Employment Tribunal.
24. In those circumstances it is not necessary for us to deal with the second and third grounds of appeal which deal with mitigation. At the outset of his submissions, Mr Sheridan invited us to deal with the case primarily on the basis of perversity points and, having heard argument from Miss Dolan, we decided that that would be right. The issue of mitigation can be dealt with by the Employment Tribunal, but in order to assist it we would observe that if the Tribunal is going to invoke its own knowledge of the local labour market it should say what knowledge it has so as to allow both parties to make submissions. It is appropriate for an Employment Tribunal to express its view about the local labour market and labour conditions. In doing so it should make clear to the parties what that is. Formally, therefore, our decision on the mitigation points is not necessary in the light of our decision on the other matters.

Disposal

25. We canvassed submissions of both representatives as to the outcome. We apply the factors in Sinclair Roche & Temperley v Heard [2004] IRLR 763 EAT and we note that these days it is more usual to remit to a differently constituted Employment Tribunal.
26. This Employment Judge was invited twice to provide his notes on particular issues. It has not been the subject of any submission that the Judge added a paragraph beginning, "If I may be permitted to comment" in his second letter dated 12 July 2010. In our judgment that presages an unpromising start. The Burns/Barke procedure must be used sparingly. The orders I made were specifically tailored to the submission in respect of highly-focused grounds. After Mummery LJ's comments in Woodhouse School v Webster [2009] IRLR 568 CA judges should be careful not to go beyond their, and the EAT's, very narrow role.
27. The Tribunal has made a number of factual mistakes which we have said, in agreement with Mr Sheridan, are fundamental. We do not think it fair to send it back to the same Employment Tribunal for it to have to reconsider its position. It made an error in respect of section 38. Although we have not made a decision on this, we have heard argument that it decided the mitigation point without canvassing the views of the parties. It did, however, get right the contractual point.
28. The Respondent understandably wishes the matter to be heard again by a different Tribunal. Although it sat for three days and we see the utility of sending it back, we do not think that it would be fair on it or on the parties for it to have to go through this matter again and so this will be sent to a fresh Tribunal.
29. So, with our thanks to both of the representatives today, the appeal is allowed, the cross-appeal is dismissed and the claim will be remitted to a fresh Employment Tribunal to hear unfair dismissal but not the section 38 and holiday pay points.