United Kingdom Employment Appeal Tribunal

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Cite as: [2013] UKEAT 539_11_1701, [2013] UKEAT 0539_11_1701

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		BAILII case number: [2013] UKEAT 0539_11_1701
		Appeal No. UKEAT/0539/11

EMPLOYMENT APPEAL TRIBUNAL

	At the Tribunal
	On 15 May 2012
	Judgment delivered on 17 January 2013

Before

HIS HONOUR JUDGE SEROTA QC
BARONESS DRAKE OF SHENE
MR M WORTHINGTON

MISS M BAROT APPELLANT

LONDON BOROUGH OF BRENT RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant	MR T BROWN (of Counsel) Instructed by: MHHP Solicitors 7b High Street Barnet EN5 5UE
For the Respondent	MISS L PRICE (of Counsel) Instructed by: London Borough of Brent Legal Services Town Hall Annexe Forty Lane Wembley Middlesex HA9 9HD

SUMMARY

REDUNDANCY

PRACTICE AND PROCEDURE – Bias, misconduct and procedural irregularity

The Claimant worked as an Accountant in the Respondent's Children and Families Directorate. The Employment Tribunal was correct to find that a redundancy situation was created when the Respondent reorganised the Directorate and introduced requirement for skills the Claimant was not considered to have. The Respondent had a diminished requirement for the kind of work the Claimant had carried out hitherto.

The Claimant maintained that her dismissal for redundancy was unfair. The facts relied upon by the Respondent to support its case on both redundancy and unfair dismissal were the same. The Respondent sought to argue as an alternative that the dismissal could be justified as being for SOSR under S98(1) (b) of the Employment Rights Act 1996 ['some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held']; it sought to rely upon exactly those facts to support its case of SOSR. The Employment Tribunal's decision to allow the SOSR defence to be raised was justified in the exercise of its discretion; the Claimant had the opportunity to deal with the point and had done so effectively; the Claimant had not been prejudiced in any way by the raising of the SOSR defence. Even if there had been a procedural irregularity in the absence of substantial unfairness her appeal not succeed; Stanley Cole (Wainfleet) v Sheridan [2003] ICR 1449, applied. Hannan v TNT-IPEC [1986] IRLR 165; Murphy v Epsom College [1983] IRLR 395 and Land Rover v Short [2011] UKEAT/0496/10 considered.

HIS HONOUR JUDGE SEROTA QC

Introduction

This is an appeal by the Claimant from the decision of the Employment Tribunal at Watford (Employment Judge Manley and lay members) sent to the parties on 24 March 2011.

The Employment Tribunal held that the Claimant was dismissed fairly by reason of redundancy.

The Employment Tribunal had voluminous documents before it, the bundles running to some 1,500 pages together with a witness statement from the Claimant running to 370 paragraphs.

Delay to the proceedings was caused by the Claimant issuing two originating applications (ET1) dated respectively 26 June 2008 and one that was undated which raised additional issues including discrimination on the grounds of sex.

On 11 July 2011, HHJ Clarke disposed of the appeal under rule 3:7 of the Appeal Tribunal's Rules of Procedure. However, on 1 November 2011 on application under rule 3:10, Langstaff J referred the matter to a full hearing. On 23 April 2012, Langstaff J requested Employment Judge Manley to produce her notes of evidence; these were received shortly before the hearing. We are bound to say what was in essence a relatively short point on whether or not there was a redundancy situation has become over burdened and complicated with unnecessary detail, partly by reason of an unnecessarily lengthy bundle of documents.

The factual background

We take this largely from the decision of the Employment Tribunal.

The Claimant commenced employment with the Respondent in July 1989. On 18 September 2006 she commenced working in the finance section of the Children and Families Directorate as a, "Senior Accountant" grade PO3. At that time the Claimant's husband was the Acting Assistant Director and head of the Children and Families Directorate, a circumstance apparently led to friction between the Claimant and her fellow employees and to the Claimant complaining of harassment. She raised a number of grievances and appeals.

An investigation took place with a detailed report which recommended the Claimant's redeployment and support and training for her husband. The report was dated May 2007 and prepared by an external consultant, Ms Krywko. One of her recommendations was to restructure the Children and Families team and the Claimant maintains to second the Claimant from that team.

In relation to Ms Krywko's report, the Claimant says that there was no suggestion of a redundancy situation or that the Claimant might be dismissed. There was no suggestion of lack of capacity within the team. The Claimant's role of Senior Accountant was created because existing senior accountants were unable to cope with the work.

On 21 June 2007, there is said to have been a proposed agreement whereby the Claimant should be seconded to the Corporate Finance Team for some six months. However, at this time, the Claimant was involved with the Respondent's occupational health department as she was absent from work with stress.

On 30 July 2007, the Claimant sought a permanent transfer to another department but continued raising complaints about her colleagues and as to how her grievances had been handled.

On 20 August 2007 the Respondent informed the Claimant that there was no position in her grade available but in the interim a six month secondment to the Corporate Finance Department could be arranged until 29 February 2008. The Respondent's letter stated that the Claimant would remain a member of the Children and Families Finance Team which was subject to restructuring to which the Claimant would be subject unless it was possible to find a permanent post outside that department. This was repeated in a letter of 24 September 2007.

The Claimant, however, expressed an unwillingness to go through the Respondent's redeployment process to obtain an alternative permanent position because she considered it might weaken her legal position.

By this time Mr Emil Mustafeh Salih had joined the Respondent as Assistant Director of Finance and Resources for the Children and Families Directorate. The Government had recently published an initiative, "Every Child Matters". Mr Salih formed the view by reason of the Respondent's obligations under this initiative and for other reasons that there needed to be a restructure of the Children and Families Directorate in a particular way. Discussions were already under way when Mr Salih joined the Respondent following Ms Krywko's report. In essence, it was considered that the department was urgently in need of modernisation and should move from outdated systems to a more modern system of working. In broad terms, there should be a reduction in lower level tasks and an increase in capacity for those tasks that were more senior and strategic. The move should be away from number crunching and data collection to more strategic advice and implementation of such advice. Despite this change in focus, the tasks carried on by the Finance Team were still required to be done.

Employees were asked to confirm their job descriptions. The Claimant raised no issue with hers. On 12 October 2007 details of the proposed restructure were circulated and a timetable was set out for consultation and matching.

A job evaluation was carried out by the Respondent's Job Evaluation Department in accordance with the Greater London Whitley Council Job Evaluation Scheme Guidelines. There was a procedure for, "slotting" in employees where there was a 70% similarity between their current and proposed job description. There was also to be ring-fencing for cases where there was less similarity because if the similarity was between 30% and 70% the employee's positions would be ring-fenced and they would be entitled to preferential interviews.

Selection would be based on assessment skills and tests in accordance with the Respondent's recruitment process. The Claimant's job description only matched 38% of the job description for the proposed new post. Therefore, she was not slotted in but ring-fenced to a post within the Children and Families Directorate. The Claimant considered that she, in fact, had 70% similarity. The Claimant declined to attend with the Children and Families Finance Team and asked for individual interviews. Her request was granted. Various redeployment options were considered but came to nothing.

All employees were told that if after the redeployment exercise no suitable post could be found they would be issued with redundancy notices.

The Employment Tribunal concluded at paragraph 28 that there was a redundancy situation; it concluded, having balanced all the evidence, that the restructuring exercise did lead to a redundancy situation in that almost all the work being done in the department would continue to be done although it might be done slightly differently, there was to be no reduction in the number of people working in the department. However, the Employment Tribunal:

"Also accept that there was to be new work introduced, of a higher level, offering financial support to various departments within the respondent council. We accept that there was a need for more strategic work and for a grade of employee within the department who could carry out strategic work, recognised by the higher salary grade offered. We accept that those on the Claimant's level, whose job titles were senior accountant, were those employees for whom the respondent had a diminished need for their work, of a particular kind. All those were considered as to whether they could be assimilated. Ms Gadher [another employee, in the employment] was an employee treated exactly the same as the Claimant. She was not assimilated but was in the ring-fenced position, as was the Claimant for being interviewed for the new Accountant post. We are satisfied that this, in the circumstances of this case, amounted to a redundancy situation, there being a clear business need based on rational and reasonable grounds, that those employees at that grade and carrying out that particular kind of work were needed less within the new team structure."

This conclusion was in line with paragraphs 2 and 3 of the witness statement of Mr Salih (undated) to be found at part 2, page 105 of our bundle. It is also confirmed by the notes of the Employment Judge of Mr Salih's evidence. Mr Salih stressed that as a result of the, "Every Child Matters" initiative, the functions of Children's Services were transferred from the Social Services Directorate to the Children and Families Directorate. The essential idea behind the initiative was that it would be a more efficient arrangement for looking after children within the Council's care if one Directorate had the lead responsibility as opposed to two or more. This was a national initiative as a result of the Victoria Climbié inquiry.

The Claimant was informed that she was eligible for interview for the post of the higher grade accountant (one of three positions) for which she had been ring-fenced. There was only one other person ring-fenced; however both the Claimant and the other employee were rejected on their merits for these posts. There was also available a post for Financial Controller and then posts at a lower grade. The Claimant was offered interview training; she rejected this suggestion because she did not want to train with the Children and Families Team. Therefore, individual training was arranged for her.

The Claimant's performance during the redundancy process, which included tests and interviews, produced scores, described by the Employment Tribunal as, "Relatively low" and unsuccessful. Although the Claimant did well in the Excel spreadsheet test, she scored no marks for the Pivot tables test which was part of the spreadsheet on Excel according to Mr Salih. The Claimant maintained it was not a spreadsheet exercise and she did not know how to do them but managed to train herself at home in a relatively short time.

On 26 February the Claimant attended a ring-fenced interview. The Employment Tribunal examined the various scores for the interview questions which related to the person specification for the post. The Claimant's scores were relatively low, falling in broad terms into the category of, "Not met" or, "Partly met". The other person who was also ring-fenced (Miss Gadher) scored sufficient marks to be offered the post on a probationary basis. The Claimant, however, was not in competition with her because there were three vacancies and only two people ring-fenced for them.

The Claimant was then advised she had been unsuccessful in recruitment for that post. She maintains she was told by Mr Salih that she had made a good presentation and had useful experience but it was not to the level required for the post. Mr Salih told her that she lacked experience in supporting budget holders and preparing budgets and she told Mr Salih that she considered she did have experience. Mr Salih, according to the Claimant, told her he was looking for experience in managing a team; the Claimant was surprised because there was only one member of staff who needed to be managed. Mr Salih also told her that her accountancy test was poor and the Claimant commented she did not have enough time to finish the test. We considered it noteworthy that the Claimant who was employed in a senior accountancy position produced an accountancy test that was poor.

In essence, thereafter, although posts were available in the Children and Families Directorate, the Claimant was unwilling to contemplate any post within that Directorate. There were posts available for the Claimant under the ring-fencing. The Claimant raised further grievances which were unsuccessful. She complained before us that she was never given her scores so she could not effectively challenge the reasons for non-appointment to the post of Senior Account. However, it is apparent from her witness statement at paragraph 70; the effect of which we have referred to earlier in relation to what she had been told by Mr Salih that this was not the case.

On 5 March 2008 (page 1/277), the Claimant was offered feedback; she did not avail herself of the offer.

The redundancy process took place between January and March 2008. On 28 March 2008 the Claimant went on sick leave and never returned to employment. In answer to Baroness Drake, the Claimant stated that she was asking for a job to be gifted to her which she maintained was what the report of Ms Krywko had recommended.

In March 2008 the Claimant was strongly encouraged to apply for the job of Financial Controller because the Respondent considered she had the relevant competence, the job had not yet been advertised so there were no other contenders. In our opinion the Claimant was in effect being offered the job but she turned it down because of her differences with other members of the Children and Families finance team. The Claimant denied that she was unwilling to return to work in that team but we have seen a solicitors email to that effect (page 1/283).

The Claimant was dismissed by reason of redundancy; she says she was the only member of the department in this position.

The decision of the Employment Tribunal

An issue arose to the taking of a point at the Employment Tribunal by the Respondent to the effect that the Claimant may have been dismissed for, "Some Other Substantial Reason" (SOSR). The case was originally listed before the Employment Tribunal to last for five days. In fact the evidence and submissions were concluded within four days.

On day one the Claimant somewhat ambitiously but unsuccessfully applied to strike out the answer. At the close of the Claimant's evidence on day three, the issue of SOSR was raised by the Respondent. The Claimant maintains that the Employment Tribunal would not tell the parties if it was prepared to deal with a case based on SOSR despite being asked by counsel. The Respondent maintains this was not correct because the Employment Tribunal said it wished to hear submissions as to whether the point could be raised and, if it were, it would permit the Respondent to raise the issue of SOSR, it would consider the submissions on their merits. The Claimant maintained that the Respondent had obviously concluded it was not going to raise a SOSR defence. The Claimant's counsel was given time to consider the position and was able to produce submissions overnight with reference to relevant authorities.

It seems clear to us that the Employment Tribunal had asked for submissions as to whether it was open to the Respondent to raise the issue of SOSR. Indeed it received, as we have said, written submissions from the Claimant on the point and that the Employment Tribunal would, having considered if the matter could be raised, go on to consider it on its merits. The Employment Tribunal was not willing to make a snap, "off the cuff" decision as to whether or not it would hear such submissions and wanted to be able to consider submissions on the point.

We asked Mr Brown who appeared on behalf of the Claimant whether he had applied to adduce further evidence; he confirmed that he did not.

The Employment Tribunal concluded that it should go on to consider SOSR on the merits; we will return to this point later, and found that the Respondent had made out a case of SOSR.

The Employment Tribunal went on to identify the issues as agreed by the parties as the following; (a) whether there was a redundancy situation, (b) what were the main reasons for dismissal, (c) the fairness of the dismissal.

Additional issues arose including the question of a Polkey deduction and compliance with the then applicable statutory dispute procedures, the effect of section 98A(2) of the Employment Rights Act and the possibility of there being a dismissal by reason of SOSR. The Employment Tribunal then went on to consider the facts, as we have summarised them above, and then directed itself as to the law. It directed itself unexceptionally in relation to unfair dismissal and section 98 of the Employment Rights Act. It directed itself by reference to section 139 of the Act on redundancy and the relevant authorities on cases involving a reorganisation or a restructuring such as Murphy v Epsom College [1985] ICR 81, Shawkat v Nottingham City Hospital NHS Trust [2001] IRLR 555 and Ralph Martindale v Harris UKEAT/166/07. The Employment Tribunal observed at paragraph 22:

"These cases assist us with the question of whether there can be said to be a redundancy situation if there appears to be the same or similar work being done by the same (or, as in this case, more) employees. This might require us to consider the "requirements of the business" or the "jobs" test, particularly where some of the employees' job functions are to be amended on the reorganisation. The task for us to consider is what "work of a particular kind" means in the context of these facts. Of course, we are also aware of the provisions of Williams and others v Compair Maxim [1982] ICR 156, in relation to procedures which are normally expected to be followed in redundancy situations, such as the giving of adequate warnings, consultation and consideration of alternative employment."

The Employment Tribunal then went on to consider whether, if redundancy had not been made out, the Respondent might be entitled to rely upon SOSR; in this regard it referred to Hannan v TNT-IPEC (UK) Ltd [1986] IRLR 165 and Nelson v BBC [1997] ICR 649:

"These cases point to the consideration we need to have in determining whether the Respondent has satisfied us of a potentially fair reason. Hannan suggests a three-stage process which includes considering whether there is prejudice to the Claimant and if there is how matters could have been dealt with differently. In this case there is a significant difference to the Hannan case because the Claimant and her representative were aware that the Respondent intended to raise this and had overnight to prepare further submissions which the representative did."

Conclusions of the Employment Tribunal

The Employment Tribunal concluded that there was a redundancy situation; we have already set out the gist of paragraph 28 of its decision. The redundancy situation was caused by the restructuring.

At paragraph 29 the Employment Tribunal rejected the case based upon breach of statutory procedures.

The Employment Tribunal then considered the case under the ordinary principles of unfairness and concluded as follows:

"Turning then to consider the matter under the ordinary principles of unfairness, we accept that there were adequate warnings to employees and to the claimant of this impending restructure. The claimant knew as early as August, when she was seconded, that this was planned. More formal consultation commenced in October with detailed information being given to the claimant and others in the team and sent to the relevant trade unions. The claimant knew from the implementation plan what precisely was expected to happen and that was what did happen. She was offered opportunities to meet individually as she did not feel able to attend a team meeting and was aware, throughout the process, of what was happening. She decided not to argue with the matching exercise and decided that she would put in a supporting statement for the interview for the post of Accountant in the new structure. The claimant was not put in a competitive situation for that post. There were three vacant posts and only two people ring fenced for it. In specific terms she complains about assimilation which she cannot really challenge and suggests that the assessment criteria in the recruitment process were inappropriate. There is no evidence of that. It is clearly for the respondent and not for the tribunal to decide what is appropriate in the circumstances. There does not seem to be anything unreasonable about the way in which they set out the various tests and there is no suggestion that they were not applied to anybody else within the team, including the other person at the claimant's level. The process appears to be an eminently fair one."

At paragraph 31 the Employment Tribunal concluded that the Respondent had carried out an adequate search for an alternative employment, it was clear to the Employment Tribunal that it had. The Claimant had been unable to point to any vacancies that were appropriate and not offered to her. She applied for nothing. Her attention was drawn to three posts which it seems, on the face of it, might have been suitable for her and conceivably within her capabilities but she declined to apply for various reasons including the fact that she determined she might not meet the criteria and her difficulties with working in the Children and Families Directorate.

Then as for her case that the Respondent should have offered her a permanent position, she has been unable to identify any such position which was available and which she would have been prepared to take. This is particularly true given the number of positions which were suggested to her and which she failed to apply for.

The Employment Tribunal then went on to consider the position, were it to be wrong about its decision that the Respondent had satisfied it that the reason for dismissal was for redundancy:

"We believe it is open to us to go onto consider whether, in the alternative, the dismissal was for some other substantial reason justifying the dismissal of the claimant. The first thing to say is that we are satisfied it would be open for us to do so. This is not the sort of case as in Hannan where the matter has not been raised at the tribunal. This is clearly the sort of case where this argument might well be made. We accept that it was made a little late in the hearing but the claimant was adequately and ably represented by Mr Brown, who had plenty of time to consider whether he wish to ask for time to adduce more evidence or for a postponement or for anything else, if he felt the prejudice to the claimant was particularly strong. In our view, there is no prejudice to the claimant for the respondent to raise this at this point in the hearing. They rely on the same facts and we have considered no different facts in considering whether there was a potentially fair reason there. We find that they could have made out some other substantial reason if, for technical reasons, it might be considered that the redundancy definition does not cover this situation."

At paragraph 33, the Employment Tribunal again, while not strictly necessary for it to do so, was of the view that even if there had been some procedural difficulty with the dismissal, it would have found the dismissal to be fair because it was clear that the dismissal would have occurred in any event largely because the Claimant was unwilling or unable to work in the Children and Families Department and had not been able to identify any other work which she could carry out for the Respondent. It seemed to be a case where dismissal was inevitable in the individual and unique circumstances of the situation where the Claimant, for different reasons, had been temporarily seconded out of the team; the Employment Tribunal clearly had in mind section 98A(2) of the 1989 Act, since repealed but then in effect

The Employment Tribunal concluded by saying by stating:

"We are satisfied that the reason for dismissal was redundancy. Furthermore, we accept that we could consider whether the respondent had made out an alternative reason and we find that they could have, if it had been necessary to do so. We are also satisfied the decisions made and processes used to not render this dismissal unfair."

The Notice of Appeal & submissions in support

The Claimant's appeal was reduced to three principle grounds; (a) perversity, (b) procedural unfairness, (c) error of law.

Perversity

It was submitted that there was no evidence to support the finding of the Employment Tribunal at paragraph 28, that those on the Claimant's level whose job titles were Senior Accountant, were those employees for whom the Respondent had a diminished need for their work of a particular kind. It was submitted that the authorities showed that a rationalisation or reorganisation of a workforce does not create a redundancy situation; reference was made to Harvey [E843]:

"The statutory definition is not, however, all embracing. According to the authorities, there may be a rationalisation or reorganisation which does not create a redundancy situation if, overall, the business still requires just as much work of a particular kind in question and just as many employees to do it, then there is no redundancy situation, even if individual jobs disappear as a result."

It was submitted by Mr Brown that there was no redundancy situation. He submitted that a matching exercise could not create redundancy by means of a reorganisation and redistribution of work. He maintained that the Employment Judge had specifically asked the Claimant during her evidence if she would have accepted a post at a lower grade if one had been offered and she replied in the affirmative; we observe at this point that there is no evidence of this at all in the bundle and the Claimant cannot show us anything to support this assertion. Indeed, it is contrary to the findings of the Employment Tribunal at paragraph 31. The Employment Tribunal, in its Directions Order of 27 October 2001, gave the standard direction in relation to the procedure for placing evidence before the Employment Tribunal of matters which did not sufficiently appear from the decision of the Employment Tribunal. Such application was made by the Claimant and Miss Price has no note or recollection of what Mr Brown states. In those circumstances, we are unable to have regard to this particular point. Baroness Drake drew attention to the submission made to the Employment Tribunal (see page 123, paragraph 10) that the Claimant would only have taken a lower grade job at the same pay. We asked whether she told that to the Employment Tribunal and were told that she had not. Mr Brown sought to argue that the Claimant should have been considered for a lower grade post under ringfencing; however it seemed to us that this could only have been the case in relation to a post that was one step below. The posts in question were two steps below the Claimant's current position.

Again, we would not permit argument on this point; it had been raised too late and no evidence was available.

In relation to relevance of redundancy, in the cases of business reorganisations, Mr Brown drew our attention to Kingwell v Elizabeth Bradley Designs EAT/066/1/02 and North Riding Garages v Butterwick [1967] IRCR 2009. It was necessary to concentrate on the requirement of the business rather than the allocation of duties. It was only if the requirement for work of a particular kind had diminished that a reallocation might lead to redundancy. The same work was done but by a different kind of employee. It was submitted there was no redundancy by reference to the case of Pillinger v Manchester Area Health Authority [1979] IRLR 430 and that the decision of the Employment Tribunal was perverse because there was no evidence to support its finding as to redundancy; reference was made to Pigott Brothers v Jackson [1992] ICR 85.

It was submitted there was no evidence that the kind of work carried out by the Claimant was reduced after the restructure. It was said to have been accepted by Mr Salih that the job description of the accountant's post and that of the Chief Accountant post showed that there were no duties no longer to be performed; this was a simply re-jigging of work and that did not amount to redundancy. Mr Salih had said that the work would be carried out by lower grade employees and the Claimant's pay grade was too high for the work she was doing and the job could be done by a lower grade; Mr Worthington enquired of Mr Brown whether there was any challenge to the job evaluation. Mr Brown accepted that there was not although the Respondent's evidence was that all work continued but the Respondent wanted lower grade employees to do that work.

There was no change in the kind of work the Claimant did; Mr Brown drew attention to paragraph 28 suggesting that there was no change in the kind of work done by the Claimant because the Employment Tribunal had accepted that almost all of the work being done in the department would continue to be done although it might be done slightly differently if newer ways of working could be introduced; we consider that Mr Brown may be putting this point too high based on what the Employment Tribunal found. It is not a question of there having been, "no change" or, "all" of the work being done as opposed to, "almost all" which might be done, "slightly differently".

Procedural unfairness

Mr Brown challenged the finding of the Employment Tribunal at paragraph 22 that the Claimant had plenty of time to consider SOSR which had been raised on the penultimate day of the hearing and there was no prejudice caused. The raising of SOSR at so late a stage was unfair to the Claimant.

Mr Brown relied upon Land Rover v Short UKEAT0496/10 which he submitted was authority for the proposition that unless an Employment Tribunal makes clear whether or not it would consider a new point, the party defending the application, so as to speak, would not know whether or not to seek an adjournment. The decision was unfair and amounted to an error of law. We asked Mr Brown whether if SOSR had been raised specifically at an earlier stage he would have dealt with the case differently. He said he would have explored the nature of the reorganisation and how the Claimant could have been found an alternative post, "more fully". He did, however, argue that the reorganisation was for the purpose of, "managing out" the Claimant. We asked the Claimant whether if that was the key point he would have applied to adduce further evidence; we received no satisfactory answer to this question.

We suggested to Mr Brown that the factual basis of SOSR was just as relevant to the claim for unfair dismissal as to a SOSR defence; again, we did not receive a satisfactory answer to this point. Mr Brown complained, as he had before the Employment Tribunal, of the point having been raised at a late stage in the proceedings and after the conclusion of the evidence; without any satisfactory explanation.

He relied upon the authorities of Nelson v BBC [1977] IRLR 148 and suggested that for an employer to rely upon a different reason that had not previously featured in the case was not a technical point and that the "new" case would need to be pleaded by way of amendment. Mr Brown relied upon the decision of Browne-Wilkinson J in Murphy v Epsom College [1983] IRLR 395 to support the proposition that before an Employment Tribunal should find for a party on a particular ground natural justice required that it should be ventilated in the Employment Tribunal beforehand so the parties could have a full and proper opportunity to deploy their case on the matter:

"Natural justice requires that the party should not have a case decided against him on a ground on which he has not had an opportunity to be heard."

Following Hannan v TNT-IPEC [1986] IRLR 165, Mr Brown submitted that where the Employment Tribunal was seeking to make a finding in relation to a reason for dismissal upon which the Respondent had not initially made clear it was relying upon; a three stage approach should be adopted; (a) was there a prima facie case that the Claimant had been prejudiced. The Claimant maintained that she had been prejudiced; (b) the Respondent then had to demonstrate a prima facie case that it would in fact have made no difference had the matters relied upon by the Tribunal been raised earlier by the Respondent and; (c) if the Respondent met the test at (b) the Claimant had to show that he would in fact have wished to conduct his proceedings in a different way that would have materially affected the outcome of the case. Also he maintained that in the present case the Claimant had been prejudiced by the manner in which the SOSR argument emerged. The Respondent had completely failed to show that it would have made no difference had the Respondent raised the question of SOSR earlier in the proceedings.

Error of law

The Claimant repeated that her scores and assessments were either not disclosed or disclosed late as she was, therefore, unable to challenge her scores (the assessments apparently were not produced as the Respondent was unable to locate them). The feedback that was provided was inadequate so the Claimant could not respond effectively because she did not have her own test results.

There was a breach of schedule 2 of the Employment Act 2002 because insufficient information had been given to the Claimant to enable her to challenge the assessments; in this regard reliance was placed upon authorities such as Davies v Farnborough College of Technology [2008] IRLR 14, Alexander v Bridgen Enterprises [2006] IRLR 422 and Pinewood Repro v Page [2011] ICR 508. The Claimant had refused to attend stage two meetings because she maintained she was unable to challenge her scores so there never was a stage two meeting. A breach in relation to the step two procedure could not be cured by appeal. A complaint was made that in paragraph 29 the Employment Tribunal failed to refer to the evidence of Mr Salih and another witness, Mr Renaud, that the Respondent had failed to provide the Claimant with details of her assessments and would not hold a meeting at which she could challenge the assessment and her scores.

The Claimant went on to complain that her scores had been altered; this was a matter that had not been the subject of previous complaint.

The Respondent's submissions

Ground 1 (perversity)

It had been submitted by the Claimant that there was no evidence of a diminished need for persons at the Claimant's level; this, it was submitted by Ms Price, was contrary to the findings of the Employment Tribunal at paragraph 28, the evidence give by Mr Salih, paragraphs 2 and 3 of his witness statement, as recorded also in the notes of Employment Judge Manley. The case was, therefore, within section 139(1)(b) of the Employment Rights Act 1996 in that there had been a reduction in, "the need for work of that kind". The Respondent's evidence was that the work was being done in a different way; there was less need for number crunching and more for strategic support. Although the work remained (accountancy support) it was to be done in a different way. There was a reduction in some work and an increase in other work.

Ms Price had noted Mr Salih stating in his evidence had said that the:

"New structure covered all critical tasks contained (in the old structure) but not in the same way, not the same tasks as previously undertaken. High level of support to the department in terms of financial management support. The role was not doing what was previously (done)."

We have no reason to doubt the accuracy of Ms Price's note. She also recorded Mr Salih as making clear that three duties in the new job description did not match those in the old job description, namely managing staff, financial appraisal and performance management. The division was a large separate department, a division of Children's Social Care with an annual budget of £60 million, with high profile expenditure. It was very different to take a lead role and be the lead financial person for the whole centre. The old role was process driven but the new role was much more technically demanding and at a strategic level. The new role would deputise for the senior accountant, step in for the senior accountant, to represent the senior accountant's views at critical budget meetings and to identify issues.

Ms Price drew our attention to the finding of the Employment Tribunal that the matching exercise between the new and old posts had been undertaken by the Respondent using the National Whitley Guidelines and the matching had been assessed as 38%.; accordingly there was a significant difference, between her original post and the new accountants' posts after the reorganisation.

Ground 2 (procedural unfairness)

Ms Price submitted it had been made clear on day three of the hearing that she intended to argue SOSR but on exactly the same facts as had already been presented to the Employment Tribunal so there was no need to amend. Although SOSR was not specifically pleaded, the relevant facts had been. Ms Price drew our attention to the grounds of resistance, paragraphs 12 to 25 dealing with redundancy and unfair dismissal which set out the factual basis upon which SOSR was argued. Ms Price stressed that the Claimant had been offered the possibility of applying for other jobs and although she had not been offered a job as such, she had been encouraged to apply for the post of Financial Controller, told she met the criteria, the post had not been advertised so there were no other applicants; this was in effect, we considered, a job offer. As the Claimant was unwilling to apply for the post, it was advertised and filled by another employee.

We have also referred to the email in which the Claimant's solicitor made clear she was not interested in the post because of the issue she had in the Children and Families Directorate.

There was no reason for the Employment Tribunal to say it would rule on whether SOSR was to be considered, before retiring. The Employment Tribunal had wanted written submissions; both parties made oral submissions and the Claimant produced detailed written submissions on SOSR. The submissions went to the merit of SOSR, not simply to the question of whether the Respondent could argue a SOSR defence.

The Claimant was given time to consider the matter, yet made no application for an adjournment and made no suggestion that it was in any way prejudiced or as to what was materially different in the factual background to the SOSR case as to those of redundancy and unfair dismissal. No suggestion was made that the Claimant might have called additional evidence or that she had been prejudiced by not cross-examining on SOSR, or that she would have brought relevant documents or witnesses to the Tribunal. Ms Price distinguished the Hannan case from the present case. That was a case where SOSR had been neither argued nor pleaded but where the Employment Tribunal of its own motion had rejected the Respondent's case on redundancy and gone on to find that the dismissal was by reason of SOSR. The decision was, in fact, upheld by the Court of Appeal as no injustice had been caused to the Claimant; the facts were the same and no prejudice had been suffered.

In the instant case the only relevant matter was the bona fides of the reorganisation and that had already been challenged by the Claimant.

It was submitted that where relevant facts are pleaded to justify a dismissal as being fair, there is no need to give a specific reason for the dismissal; it becomes a question of labelling. Applying the three stages referred to in Hannan, there was no prejudice shown by the Claimant and the Claimant was unable to show that she would have acted differently in a material manner that might have affected the outcome had SOSR been specifically argued from the start. The matter was clearly argued fully before the Employment Tribunal; the Claimant had suffered no prejudice and in any event, even were the Employment Tribunal to have been wrong in relation to SOSR, it would only affect the outcome if the Claimant succeeded in displacing the primary finding of the Employment Tribunal that the Claimant was dismissed by reason of redundancy.

The Employment Tribunal clearly rejected the suggestion that the reorganisation was somehow a, "put up job" designed to enable the Respondent to dismiss the Claimant.

It was clear in our opinion to the advocates that the Employment Tribunal would deal with the issue of SOSR if satisfied that the issue was properly before it.

Ground 3 (Absence of Stage Two Meeting)

The essence of the Claimant's case in this regard was that the Respondent had not provided the Claimant with sufficient information to enable her to present her case at the stage two meeting. The Employment Tribunal, however, at paragraph 29 had found that the Claimant had been provided with a great deal of information; she had seen the two job descriptions, she knew that she was not assimilated because her job description was assessed as being only 38% of the new post's job description and she had been told by Mr Salih of the reasons for her non-appointment. The Claimant's own witness statement made it clear that she had sufficient information. She was given feedback on 27 February 2008 (by telephone from Mr Salih) and they met the next day.

As to whether she would have had the opportunity to challenge Mr Salih, the notes of the Employment Judge (and Ms Price's own notes) record Mr Salih as expressing doubts whether he would have said that the Claimant could not challenge the scores.

If the Claimant was told there was no appeal, an appeal was not a required step for the stage two meeting and this would be a conflation of step two with step three.

Mr Salih on 5 March 2008 (see page 1/276) had offered further feedback to the Claimant, this was never requested. It was suggested the Respondent had not applied its policy correctly. However, staff were only at risk of redundancy once the redeployment exercise had been completed. The redeployment exercise as described by the Employment Tribunal at paragraph 5.11 of its Decision follows the Council's redeployment policy at page 1/166. The redundancy notification takes place after the redeployment exercise. The Claimant was able to appeal and did.

There was no need for the Claimant to be given her specific scores and reference was made to Davies v Farnborough College, provided sufficient information was given to the Claimant to enable her to challenge the reasons for her dismissal. Even on her own case, she had sufficient. The Employment Tribunal was entitled to and correctly found that that there was no breach of the statutory procedures in relation to the step two meeting.

The evidence justified the Employment Tribunal's conclusions; the decision was reasonable and far from perverse.

The law

Section 98 of the Employment Rights Act 1996 provides that a dismissal is fair if the employer can show that the employee was redundant:

"98 General

(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show—

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it—[…]

(c) is that the employee was redundant, […]"

Section 139(1) of the Act defines redundancy:

"(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to:

(b) the fact that the requirements of that business –

(i) for employees to carry out work of a particular kind, […]

have ceased or diminished or are expected to cease or diminish."

We draw attention to the helpful passage in Harvey [E843]:

"The statutory definition is not, however, all-embracing. According to the authorities, there may be a rationalisation or reorganisation which does not create a redundancy situation. If, overall, the business still requires just as much work of the particular kind in question and just as many employees to do it, then there is no redundancy situation, even if individual jobs disappear as a result"

Harvey then goes on to consider the decision in Safeway Stores v Burrell [1987] IRLR 2000:

"There are three questions to answer in relation to this third kind of redundancy situation:

— Has the claimant employee been dismissed as defined?

— Was there, within the business, a reduced need for employees to do a particular kind of work?

Was the claimant employee dismissed wholly or mainly because of that reduced need?"

As Harvey has made clear, a reorganisation per se will not necessarily create a redundancy situation. Nevertheless a reorganisation of a business can, in appropriate circumstances, lead to a redundancy situation; see Kingwell & Others v Elizabeth Bradley Designs Ltd EAT/0661/02 Burton J:

"[3] It appears to us that there is a fundamental misunderstanding about the question of redundancy. Redundancy does not only arise where there is a poor financial situation at the employers, although, as it happens, there was such in this case. It does not only arise where there is a diminution of work in the hands of an employer, although, as it happens, again, there was in this case. It can occur where there is a successful employer with plenty of work, but who, perfectly sensibly as far as commerce and economics is concerned, decides to reorganise his business because he concludes that he is overstaffed. Thus, even with the same amount of work and the same amount of income, the decision is taken that lesser number of employees are required to perform the same functions. That too is a redundancy situation."

Burton J went to say at paragraph 9:

"[9] It is plain from that case [Johnson v Nottinghamshire Combined Police Authority [1974] ICR 170] and from Safeway Stores Plc v Burrell and Murray and Foyle Meats Ltd [1999] IRLR 562. that it is not an automatic consequence of there being a business reorganisation that there is a redundancy; nor is there a need for a business reorganisation in order that there should be a redundancy situation. The two are entirely self-standing concepts. But if a business reorganisation leads to a diminution in the requirement for employees carrying out the relevant work, then that business reorganisation leads to a redundancy situation and if not, not."

As the Claimant pointed out, an Employment Tribunal must consider the overall requirements of a business rather than the allocation of duties between individual employees; see North Riding Garages v Butterwick [1967] ICR 2009, Widgery J. Further, the reallocation of work to a lower grade of employee will not create a redundancy situation because there is no change in the work to be done; see Pillinger v Manchester Area Health Authority [1979] IRLR 430.

Failure to provide detailed scores

It is not necessary for a redundancy dismissal to be fair that the detailed scores of the Claimant's assessments were not made available; see Burton J in Davies v Farnborough College [2007] All ERD 288. Burton J referred to the judgment of Elias J in Alexander v Bridgen [2006] IRLR 422 where it had been found on the facts that insufficient information had been given to enable the employee to give an informed response to the assessment. The employee had been provided with the relevant selection criteria but not the Respondent's guidance on their application and had not been offered the opportunity to comment on how their own particular performance had been assessed under various criteria. Burton J continued at paragraph 9:

"[9] We do not propose to set out any more of Elias P's judgment in this judgment, but plainly we refer with respect to what he says in paragraph 47 to 49 of the judgment in addition. We do not believe that the EAT was there saying that in every case in order to comply with the statutory procedure the giving of the particular marks to an employee is necessary. What is necessary is that, on the facts of any given case, an employer must give sufficient information in relation to how the criteria were applied to a particular employee to give him the opportunity, to which they refer, of challenging and correcting and supplementing the information which the employer may wrongly have taken into account or may inappropriately not have known of, in order to arrive at the conclusions on those criteria. That may involve the giving of the particular marks, but it may not. We read the words:

"That will give an employee an opportunity to make representations not only about whether the criteria are justified and appropriate, but also more importantly whether the marking given to him in respect of any particular criterion is arguably unjust and why"

as referring to whether the assessment made in relation to him in respect of any particular criterion is arguably unjust. That may be satisfied by giving something short of the actual mark. On the other hand there may well be cases in which giving the mark alone may not be sufficient. What is necessary however is for sufficient information to be given to allow the employee both to understand and to challenge why he, rather than others, has been selected in accordance with the chosen criteria."

In relation to the pleading point and Hannan v TNT-IPEC [1986] IRLR 165, Hutchinson J was considering a case which had been pleaded and had been the subject of submissions solely on the question of dismissal for redundancy. The Employment Tribunal had nonetheless found that the dismissal was by reasons of SOSR. He said at paragraph 14:

"14 In effect, Mr Field submitted that there were three stages which one had to go through. The first was that the appellant must show some prima facie ground for thinking that there had been prejudice and he conceded that the appellant in the present case might begin to do that. He then submitted that if the respondent could demonstrate prima facie that it would in fact have made no difference had the matters which the Tribunal relied upon in fact been canvassed before them, it was then for the appellant to cross a further threshold by showing what he would in fact have wished to do which would have materially affected the outcome of the case

15 We consider that that is a proper interpretation of the authorities which have been cited."

Hutchinson J went on to apply the principle he had just stated and continued at paragraph 22:

"22 It seems to us that one can summarise the distinction between the two lines of authority to which we have referred in this way, that where the different grounds are really different labels and nothing more then there is no basis for saying that the late introduction, even without pleading or without argument, is a ground for interference on appeal; but that where the difference goes to facts and substance and there would or might have been some substantial or significant difference in the way the case is conducted, then of course an appeal will succeed if the Tribunal rely on a different ground without affording an opportunity for argument. For the reasons which we have endeavoured to express, we are persuaded that Mr Field is correct when he says that in the present case the distinction is in truth one of labels and that there are no grounds for thinking the case would have been conducted in any significant way differently or more thoroughly investigated or the cross-examination or the evidence called would have been in any way significantly different had the case, as ultimately relied upon by the Industrial Tribunal, been pleaded or canvassed in evidence."

A further case in point was the decision of Browne-Wilkinson J in Murphy v Epsom College [1983] IRLR 395:

"It is not necessary to "plead" some other substantial reason in the full technical sense of the word (Gorman v London Computer Training Centre Ltd [1978] IRLR 22). However, in the light of the Court of Appeal's decision in Nelson v BBC [1977] IRLR 148, before an Industrial Tribunal reaches a decision on whether a dismissal was for some other substantial reason, where the employers never sought to justify the dismissal on that ground, the matter should be expressly ventilated in the Industrial Tribunal so that the parties can have a full and proper opportunity to deploy their case on that matter. Natural justice requires that a party should not have a case decided against him on a ground on which he has not had an opportunity to be heard."

In Land Rover v Short [2011] UKEAT/0496/10, Langstaff J considered a case where the Employment Tribunal had failed to rule before the close of submissions whether an issue was properly before it or not. The Respondent asserted that a point being pursued in the cross-examination of its witnesses was not in the list of issues and amendment was required if the point were to be pursued. Further, the Claimant wished to call additional evidence and possibly seek an adjournment. The Claimant maintained there was no need to amend. Langstaff J held that in the circumstances, the Employment Tribunal had failed to rule whether the issue was before them or not until it made its decision. This was unfair because it prevented the Respondent from seeking an adjournment so it could present additional evidence; we observe at this point that this was not the case here, where there has been a finding that no prejudice was caused to Claimant and the parties must have known the point that was to be dealt with, once the Employment Tribunal had decided that it was a point available to the Respondent to take.

Even in a case where there has been some procedural impropriety, in order to mount a successful appeal the claimant must be able to show that as a result he had suffered substantial unfairness; see Stanley Cole (Wainfleet) v Sheridan [2003] ICR 1449, in which the Court of Appeal held that a procedural failure would not lead to the proceedings being quashed or set aside in the absence of substantial unfairness. In the present case the Claimant was able to deal with the issue of SOSR and so effectively. The material facts relevant to SOSR were those that were equally relevant in the claims for unfair dismissal and redundancy.

We now turn to refer to the provisions relating to the statutory dismissal procedures, now repealed and unlamented. By section 98A(1) of the Employment Rights Act a dismissal was rendered automatically unfair where there had been a failure to comply with the schedule 2 statutory dismissal proceedings set out in the Employment Act 2002 section 31 in schedule 2. In short, these procedures required there to be two meetings during the course of dismissal proceedings. Firstly, there should be an initial meeting (a "step one" meeting) for which the employer was obliged to provide a statement of the grounds for its action and an invitation to the meeting. Paragraph 1(1) is in the following terms:

"1.(1) The employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee."

The, "step two" meeting is to take place after the employee has been informed of the basis of the statement of grounds for action. The decision in Alexander v Bridgen Enterprises [2006] ICR 1277, a decision of Elias J gives helpful guidance as to the nature of the information required to be provided for the step two meeting. At paragraph 34 he stated:

"The purpose of these statutory procedures is to seek to prevent the matter going to an Employment Tribunal if possible by providing the opportunity for differences to be resolved internally at an earlier stage: see the observations in the Canary Wharf case, […]. Hence the reason why these procedures apply at the stage when dismissals are still only proposed and before they have taken effect. However, to achieve that purpose the information to be provided must be at least sufficient to enable the employee to give a considered and informed response to the proposed decision to dismiss."

Before we come to our conclusions, we point out that the principles applying to appeals on the grounds of perversity are well known. In Yeboah v Crofton [2002] IRLR 634 Mummery J at paragraph 93 said in a much quoted passage:

"Such an appeal ought only to succeed where an overwhelming case is made out that the employment tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. Even in cases where the Appeal Tribunal has "grave doubts" about the decision of the Employment Tribunal, it must proceed with "great care", British Telecommunications PLC –v- Sheridan [1990] IRLR 27 at paragraph 34."

Conclusions

Ground 1 - Perversity in Relation to the Finding of Redundancy