Appeal No. UKEAT/0268/11/CEA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX
At
the Tribunal
On
14 June 2012
Before
HIS
HONOUR JUDGE PETER CLARK
MR J MALLENDER
DR K MOHANTY JP
BEAVER
MANAGEMENT SERVICES LTD APPELLANT
MR
S ACHESON RESPONDENT
Transcript of Proceedings
JUDGMENT
SUMMARY
TRADE UNION RIGHTS
Action short of dismissal
Dismissal
Whether site manager acting as agent for Respondent before Employment
Tribunal when he withdrew an earlier offer of employment on trade union
grounds. He was. Employer appeal dismissed.
Whether after Claimant was subsequently employed his dismissal
for redundancy was automatically unfair. ET entitled to hold it was not.
Claimant’s cross‑appeal dismissed.
HIS HONOUR JUDGE PETER
CLARK
Introduction
1.
We have before us for full hearing an appeal by the Respondent before
the Manchester Employment Tribunal, Beaver Management Services Ltd, and a cross‑appeal
by the Claimant, Steven Acheson, against the Judgment of a Tribunal
chaired by Employment Judge Russell dated 21 October 2010.
Written Reasons for that Judgment were promulgated on 11 November.
The facts
2.
At all relevant times a renovation project was being undertaken at the
Fiddlers Ferry Power Station (“the site”). The client was Scottish &
Southern Energy Ltd; the managing contractor for the electrical installation
work on the site was Alstom Ltd (“Alstom”). Alstom sub-contracted the
electrical installation work to Lindhurst Engineering Ltd (“Lindhurst”).
Lindhurst had insufficient staff to operate that sub-contract and entered into
an agreement with the Respondent for the supply of workers on site under a
labour‑only sub-contract. Under that arrangement workers were employed
directly by the Respondent to work for Lindhurst on electrical work on site,
and the Respondent raised fee notes in respect of the labour supplied for
payment by Lindhurst.
3.
The Claimant was an experienced electrician who had worked in the
industry for some 40 years; he was also a well‑known trade union activist.
The site manager was a Mr Ambrose. He was not directly employed by any of
the relevant contractors. His services were provided to the Respondent through
his company, J Ambrose E and I Services Ltd (“E and I”). E and I invoiced the
Respondent for his services; the Respondent paid those invoices and passed on
the costs by invoicing Lindhurst.
4.
The Claimant initially applied to Lindhurst for work as an electrician
on site. He was informed that Lindhurst was sub-contracting the supply of
labour to the Respondent and that his CV would be passed to the Respondent, who
would be contacting him. That was in about July 2007. At 8.10am on
Friday, 11 July 2008, some 12 months later, the Claimant was
contacted by an employee of Lindhurst working in their site office called
Stacey. What happened was that Mr Ambrose asked Mr Bate, a shop steward
on site, to assist in telephoning electricians to offer them employment with
the Respondent on site from 14 July. Mr Bate identified the Claimant
as one of the first to be telephoned, leaving the contact to be made by
Stacey. They worked from a list of names and contact details. The Claimant
was informed that his application made 12 months earlier was successful, that
he would be starting work on 14 July 2008, and that the contract
would be for at least 3 months; he accepted that offer.
5.
At about 11.50am the same morning, 11 July, Mr Ambrose
telephoned the Claimant. He explained that he was the site manager and that
the job offered to him earlier in the day was withdrawn. The story that
Mr Ambrose gave him on that occasion was that if the Claimant was employed
on site, that would take the number of operatives to 20 and he would have to
employ a safety officer. He said that he would have to withdraw the offer of
employment to the Claimant because he was the last person to have been offered
employment.
6.
Mr Ambrose was not called to give evidence before the Tribunal, and
the Tribunal agreed with the Claimant that that was not a truthful explanation
for the withdrawal of his employment; indeed, the Tribunal described it as a
“fanciful” explanation. Mr Bate did give evidence; his account was
accepted by the Tribunal. He said that Mr Ambrose gave him a different
explanation for the withdrawal of the offer of employment to the Claimant. He
told Mr Bate that the Claimant was one of the ten top union activists in
the country. He added that there had been an oversight, and that the four men
who had been telephoned last would have to be contacted and told that their job
offers had been withdrawn. Mr Bate pointed out that the Claimant had been
one of the first to be contacted. Mr Ambrose wrote to the Claimant on the
same day, 11 July, stating that the proposed night shift had had its
numbers reduced; he was therefore, with regret, no longer required. The
Tribunal accepted that the number of workers required was reduced from 20 to 15
by Alstom; however, they did not accept that the Claimant was one of the 5
people contacted last.
7.
It later emerged, in March 2009, that, as a result of a raid on the
offices of the Consultancy Association by staff of the Information Commissioner
the Claimant’s name was on a blacklist of trade union activists, although the
Respondent was not a member of that association. The Claimant did not, as a
result of Mr Ambrose’s withdrawal of employment, start work on
14 July. There was a threat of industrial action on the site, which did
not in the event take place, and Mr Derek Simpson, then joint‑General
Secretary of the Unite union, to which the Claimant belonged, lobbied on his
behalf.
8.
On 14 August 2008 the Claimant was offered employment at the
site by Mr Simms, the Respondent’s group industrial relations manager. He
accepted and immediately started work. He was then involved in trade union
activities on the site, but that caused no concern to the Respondent, so the
Tribunal found.
9.
On 11 December 2008 at a meeting of the PJC it was agreed that
future redundancies would be determined on the basis of LIFO, itself based on
length of service on the site. On 18 December 2008, after Alstom had
made clear its labour requirements for the site, it was apparent that
redundancies were necessary; in particular, only four grade 6 workers were
required. There were six, including the Claimant, on site. Applying the LIFO
principle the Claimant and a Mr Smyth had the least service on site and
were selected for redundancy. However, two of those retained,
Messrs Rigby and Littler, had commenced employment on the site on
15 July 2008. Thus, had the Claimant been started on 14 July
pursuant to the initial offer, which he accepted on 11 July, he would not
have been selected for redundancy; he would have had one day’s more service
than those two colleagues.
The claims
10.
The Claimant advanced two separate claims, both resisted by the
Respondent:
(1) He
complained that, contrary to section 137(1)(a) of the Trade Union and Labour
Relations (Consolidation) Act 1992 (“the 1992 Act”) he was
refused employment in July 2008 because he was a member of a trade union.
The Tribunal noted (Reasons, paragraph 6) that by section 137(5)(e) a
person is refused employment where an offer of employment is made but then
withdrawn, and that where the refusal (here withdrawal) is because the person
is a trade union activist, that is on trade union membership grounds and
section 137(1)(a) is breached. On the facts found the Tribunal concluded
that the real reason for Mr Ambrose’s withdrawal of the offer of
employment accepted by the Claimant was that he was a trade union activist and
that his action was as agent for the Respondent, thus fixing the Respondent
with liability under section 137(1)(a) (Reasons, paragraph 7). In
challenging that finding in the appeal the question is whether, as a matter of
law, the Tribunal was entitled to find that Mr Ambrose acted as agent for
the Respondent (“the agency issue”).
(2) Further,
the Claimant contended that his dismissal in December 2008 was
automatically unfair for the purposes of Part X of the Employment Rights Act 1996
(“the 1996 Act”) by virtue of sections 152 and/or 153 of the
1992 Act. Section 152(1) renders a dismissal automatically unfair where
the reason or principal reason for dismissal was that the Claimant was a member
of an independent trade union. Section 153 provides that where the
principal reason for dismissal was that he was redundant and the redundancy
applied equally to one or more other employees in the same undertaking holding
similar positions to the Claimant who had not been dismissed, and the reason or
principal reason he was selected for dismissal was one of those specified in
section 152(1), a trade union reason, the dismissal shall also be regarded
as automatically unfair for the purposes of Part X of the 1996 Act. On
this aspect of the case the Tribunal concluded that his dismissal by the
Respondent in December 2008 was not for a trade union reason under
section 152(1); the reason was redundancy, and he was selected under the
agreed LIFO principle. They further rejected an argument advanced on behalf of
the Claimant (see paragraph 11) that if, as they did, they found for the
Claimant on the first claim, then he must also succeed on the second claim,
since, had his offer of employment on 11 July not been withdrawn because
of his trade union membership, including his history as a trade union activist,
he would have commenced work on the site on 14 July, so that one of the
two men who started on 15 July would have been selected in his stead. It
is against the Tribunal’s finding that the Claimant was not dismissed on trade
union grounds (“the reason issue”) that he brings his cross‑appeal.
The agency issue
11.
Before addressing what seems to us to be the real point in the
Respondent’s appeal, we should deal first with the separate argument that
Mr Menon sought to raise, namely that no offer of employment was made to
the Claimant on 11 July by or on behalf of the Respondent. Rather, he
submits, the offer was made by Stacey, an employee of Lindhurst. We reject that
contention. It is absolutely plain to us from the Tribunal’s findings of fact,
particularly at paragraphs 4.2 and 4.3, that Mr Ambrose needed
to recruit electricians to be employed by the Respondent and supplied to
Lindhurst. For this purpose he enlisted the assistance of Mr Bate to
contact likely candidates, and Mr Bate in turn passed the mechanical task
of contacting those candidates by telephone to Stacey. In the event, the
Respondent accepted ultimately 15 electricians into their employment who had
been recruited in this way. As part of that process the Claimant was offered,
and accepted, employment with the Respondent.
12.
The real question is whether Mr Ambrose had authority to act as the
Respondent’s agent for the purposes of recruiting electricians. Despite
Mr Menon’s best efforts to argue the contrary, we entirely agree with
Mr Toms that the Tribunal found, and was entitled to find (Reasons,
paragraph 7), that Mr Ambrose, the site manager, was given a wide
discretion by the Respondent as to who should be appointed and not appointed
from the list of electricians that was generated but in the event not produced
in evidence. At the very least, Mr Ambrose had ostensible authority to
recruit electricians and indeed delete them from the strength when the client’s
requirements changed from 20 to 15 electricians. Plainly, he had authority to
withdraw the offer made to the Claimant, and the Respondent never suggested
otherwise during the period July to December 2008. In these
circumstances, the old case of Marsh v Joseph [1897] 1 Ch 213 CA, to which Mr Menon referred us although not the Employment
Tribunal, is distinguishable; there, there was no pretence of any a priori
authority. In the present case before the ET the Respondent’s case was not
that Ambrose had no authority but that he had exceeded his authority. Its
factual case was rejected by the Tribunal; thus, under ordinary principles of
agency, the Respondent was fixed with the consequences of Mr Ambrose’s
unlawful motivation for withdrawing the offer to the Claimant even although the
Respondent was unaware at the time of that motivation.
13.
In these circumstances, we reject the Respondent’s challenge to the
Tribunal’s finding that Mr Ambrose acted as the Respondent’s agent; he did
so on its behalf, not that of Lindhurst, in connection with the employment of
the Claimant and other electricians, and the withdrawal of employment, under a
contract of service made with the Respondent.
The reason point
14.
The way in which the Claimant’s case on automatically unfair dismissal
is put is superficially attractive. The facts are that he was dismissed by
reason of redundancy in December 2008. He was selected for redundancy on
the basis of LIFO on site by grade having less service than two relevant
colleagues. Had he started on site on 14 July as originally agreed, he
would have been retained as having one day’s more service than those two
colleagues. The reason why he did not start on 14 July was due to the
unlawful act of Mr Ambrose, for which the Respondent was also liable, in
withdrawing the offer of employment on trade union grounds. Therefore, the
reason for dismissal was his trade union membership.
15.
The Tribunal rejected that process of reasoning. They held
(paragraph 11) that it was not right to apply a simple “but for” test: but
for the original act the Claimant would have been retained under LIFO in
December 2008. That did not answer the “reason why” question: why was the
Claimant dismissed in December? The Tribunal found it was by application of
the LIFO principle. We are satisfied that the Tribunal were entitled, as a
matter of law, to take that approach. Support for such an approach may be
found in CGB Publishing v Killey [1993] IRLR 520
EAT, which in turn is, we think, consistent with the analysis provided by
Underhill J, then President, in Amnesty International v Ahmed
[2009] IRLR 884, reconciling the House of Lords cases of James v Eastleigh Borough Council
[1990] IRLR 288 and Nagarajan v London Regional Transport
[1999] IRLR 572. In the analogous type of discrimination case the “but for”
test is appropriate where the treatment complained of is inherent in the act
itself, as in James. However, where the protected feature is a
part of the circumstances in which the treatment complained of occurred, it does
not necessarily follow that the unlawful protected feature formed part of,
here, the reason for dismissal. A good example on its facts is to be found in Seide v Gillette
[1980] IRLR 427, referred to by the then President at paragraph 37 in Ahmed.
16.
We are further fortified in our conclusion that this Tribunal was
entitled to find that the dismissal in December 2008 was not automatically
unfair under sections 152 and/or 153 of the 1992 Act by a helpful
point made by Mr Menon. If, as is the case, the first complaint is
upheld, then in assessing compensation for any loss flowing from
Mr Ambrose’s withdrawal of employment in July it is open to the Claimant
to argue, the point not being conceded on behalf of the Respondent, that such
loss includes the loss of employment in December due to the operation of LIFO,
in which the Claimant was disadvantaged by not having started his employment on
14 July.
Disposal
17.
For these reasons, both the appeal and cross‑appeal fail and are
dismissed.
