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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Green v London Borough of Barking & Dagenham (Unfair Dismissal: Reasonableness of dismissal) [2017] UKEAT 0157_16_1003 (10 March 2017)
URL: http://www.bailii.org/uk/cases/UKEAT/2017/0157_16_1003.html
Cite as: [2017] UKEAT 157_16_1003, [2017] UKEAT 0157_16_1003
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EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE
At the Tribunal
Before
MR D BLEIMAN
MR M WORTHINGTON
LONDON BOROUGH OF BARKING & DAGENHAM RESPONDENT
Transcript of Proceedings
JUDGMENT
APPEARANCES
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(of Counsel) Instructed by: Ward Gethin Archer Solicitors Market Place Ely Cambridgeshire CB7 4QN
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(of Counsel) Instructed by: London Borough of Barking & Dagenham & Thurrock Council The Legal Department 1st Floor Annex Civic Centre Dagenham RM10 7BN
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SUMMARY
UNFAIR DISMISSAL - Reasonableness of dismissal
UNFAIR DISMISSAL - Automatically unfair reasons
REDUNDANCY - Fairness
Automatic unfair dismissal - section 152 TULRCA 1992 - reason for dismissal - ET approach - adequacy of reasons
Unfair dismissal - section 98(4) ERA 1996 - fairness of dismissal by reason of redundancy - ET approach
The ET had dismissed the Claimant’s claims of automatic unfair dismissal and unfair dismissal for the purposes of section 98 ERA. The Claimant appealed.
Held: allowing the appeal in part
Although the ET had not made a clear finding as to the reason for the Claimant’s dismissal it could be implied that it accepted it was by reason of redundancy and it was apparent it had not found that it was related to her trade union activities; the appeal in this regard was dismissed.
When approaching the question of fairness, the ET had taken the view this was not a case in which it needed to follow the guidance laid down in Williams v Compair Maxam Ltd [1982] IRLR 83 EAT; those principles did not apply because the question was not why the Claimant had been selected for redundancy as much as why she had not been appointed to one of the remaining positions (see Morgan v Welsh Rugby Union [2011] IRLR 376 EAT). In adopting this approach, however, the ET had elevated Morgan to a proposition of law, which it expressly did not lay down. It had, further, adopted a blinkered approach to section 98(4) ERA and failed to demonstrate it had adopted a range of reasonable responses test, reviewing each stage of the Respondent’s decision making and process. That rendered the ET’s conclusions on unfair dismissal under section 98 ERA unsafe; the appeal would therefore be allowed.
HER HONOUR JUDGE EADY QC
Introduction
1. This is the unanimous Judgment of the Court, in which we refer to the parties as the Claimant and Respondent as below. This is the Full Hearing of the Claimant’s appeal against a Judgment of the London East Employment Tribunal (Employment Judge Prichard sitting with members Mr Kendall and Mrs Saund, over some ten days during October to December 2015; “the ET”), sent to the parties on 15 March 2016. Representation below was as before us.
2. By its Judgment the ET dismissed the Claimant’s claim of unfair dismissal under the Employment Rights Act 1996 (“ERA”) and of automatic unfair dismissal by reason of trade union activities under section 152 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”). After an Appellant-only Preliminary Hearing in September 2016, I permitted this appeal to proceed on the basis of amended grounds; the Claimant having raised apparently reasonably arguable points as to the ET’s approach to the question of fairness in this case, alternatively, as to whether it had adequately explained its reasoning. I was also persuaded that arguable questions arose as to the ET’s approach to the test to be applied to the Claimant’s claim of automatic unfair dismissal and then, returning to the issue of fairness, in respect of individual and collective consultation and as to the process followed by the Respondent. Finally, there was an issue as to whether the ET had improperly taken into account factors going to remedy when determining the Claimant’s case on liability.
The Background Facts and the ET’s Findings and Reasoning
3. The Claimant was employed by the Respondent from August 2008 until the termination of her employment on 25 July 2014. She has a degree in Landscape Architecture and an MSc in Resource Management and in 2007 had completed a postgraduate qualification in Town Planning; before working for the Respondent, she worked for 12 years in local government in Cambridgeshire. Within the Respondent, the Claimant was employed as a Senior Regeneration Professional in its Regeneration and Economic Development Division, a position graded PO6. Her experience included heading major developments in public spaces with urban developments in housing, roads, parks and the public realm and she worked as one of three Senior Regeneration Professionals at PO6 grade in the Regeneration Team, the others being Mamta Toohey and Shamim Akhter. There was also another PO6 position, held by Dubravka Polić, working in a different team but otherwise - the Claimant contended - carrying out an identical job, but separately funded from the Respondent’s Housing Revenue Account.
4. The Claimant was a long-time member of Unison and had become a trade union steward within the Respondent in 2012. In October 2012 the Respondent had started to undertake a process of restructuring and redundancies. As part of this, the Claimant’s line manager, David Harley, proposed a restructure of the Claimant’s team through the deletion of the three PO6 posts and the creation of two such posts for which the existing three jobholders would compete by way of an unseen written test and interview. The proposal was contained in a report put out for consultation in November. The report also proposed the deletion of the Barking Riverside Co-ordinator role then undertaken by the Claimant’s colleague Peter Remedios as Principal Regeneration Officer, grade PO4; this was to be deleted and a new position created of Senior Regeneration Professional Barking Riverside Co-ordinator at PO5.
5. In the event, the ET was satisfied that the Respondent had acted reasonably in engaging in a consultation process that was premised on it being:
“… incumbent upon the staff affected to respond to management’s proposals and give their views and counter proposals. It is possible to do so on an individual basis, or as part of a group or through your trade union representatives, by email or by requesting meetings to discuss the issues.”
6. In the event, the Claimant did respond to the Respondent’s invitation, albeit, whilst she made some individual criticisms of the process the Respondent was to follow, certain of her points were made more in her role as trade union representative, and, as the ET recognised, the Claimant took the lead in the trade union’s campaign against the cuts within the Respondent; indeed, one of the ET’s observations was that the Claimant did not always succeed in separating out her position representing the interests of trade union members and her position as someone facing a personal redundancy situation.
7. The Respondent’s process involved a job-matching stage. If an individual scored more than a 65 per cent match with one of the new roles, they could be assimilated or slotted into it, but if there were more two or more people so placed in relation to a particular post there would be a competitive ringfenced interview. An individual would have to have a 50 to 65 per cent match for the position to be given a ringfenced interview. If there was a less than 50 per cent match for any of the roles, an individual would effectively be displaced and thus potentially redundant if no alternative position was found as part of the redeployment process.
8. In the Regeneration Group it was recognised that not all the job descriptions were up to date, it was therefore proposed that a list of duties would be agreed, and on 22 December such a list of duties was emailed out to the Claimant. In her case, there was no difficulty at that stage; she obviously matched against the new Senior Regeneration Professional role, the Claimant and her two colleagues matching to that role above 65 per cent. Mr Remedios was also put into this matching exercise but scored too low in relation to the new Senior Regeneration Professional post, matching it between 50 to 65 per cent. Given his existing work with the Barking Riverside project, however, Mr Remedios scored more than 65 per cent against the new Senior Regeneration Professional Barking Riverside Co-ordinator role. Although the new position was at a higher grade, PO5, Mr Remedios was therefore assimilated into that role.
9. Mr Remedios’ assimilation had taken place before the completion of the selection process for the two Senior Regeneration Professional roles at PO6. It was part of the Claimant’s case before the ET that this was contrary to the Respondent’s redundancy procedure, which stipulated that assimilation and job-matching should be undertaken from the top down, specifically, at paragraph 9 of that process:
“The matching process will normally commence with the most senior post in the new structure first, with the remaining posts appointed in order of seniority.”
10. For its part, the Respondent contended that this sort of top-down approach only strictly applied in more wide-ranging restructures, whereas, it contended, this was a relatively small, encapsulated restructure. Further, in fact Mr Remedios was essentially doing the same job; it was continuing, and he had considerable new-build housing experience, which the Claimant did not. The ET agreed with the Respondent, holding:
“37. Assimilation is not concerned with aptitudes, skills, or performance. The job-matching process takes a snapshot of the content of an individual’s job. This is without regard to any individual’s performance or potential. On that basis the suitability of Peter Remedios for this role on this development was plain. The tribunal accept that evidence despite the claimant mounting a sound legal argument based on a strict interpretation of the written redundancy procedure.”
11. Moreover, as the ET observed:
“38. According to the assimilation matrices [the Claimant] scored 38% against the Barking Riverside Co-ordinator role whereas Peter Remedios scored 82%. This reinforces the respondent’s point. Both the claimant’s other two colleagues Ms Toohey and Ms Akhter, scored 31% each on the Barking Riverside role.”
12. As for the selection process for the new PO6 roles, this was to take the form of an interview and an unseen written test. The ET sets out the respective scores of the three candidates as follows:
“41. At the end of the process the final combined overall scores for the unseen written test and the interviews were as follows: Mamta Toohey 21; Shamim Akhter 17.5; [the Claimant] 15.5 so there was little to choose between Shamim Akhter and the claimant. The model answers to the written test gave a potential of 14 points for substance and five points for style making a total of 19 points. On the substance of their written responses the scores were: Mamta Toohey 6.5; Shamim Akhter 3.5 and [the Claimant] 5.5. On the style the candidates scored Mamta Toohey 3.5; Shamim Akhter 4 and [the Claimant] 1 making the final test scores Mamta Toohey 10; Shamim Akhter 7.5 and [the Claimant] 6.5. On the interviews the candidates scored very closely Mamta Toohey 11; Shamim Akhter 10 and [the Claimant] 9.”
13. Before the ET the Claimant’s complaint had focused on the written test. The question had not been based on a fictional project or development but on an actual project in the Borough with which Ms Toohey had a certain familiarity, having given and heard presentations about it in the weeks before the test. Ms Toohey’s husband, one of the Respondent’s legal officers, had also contributed to the drafting of an informal cabinet report on that project. The ET itself considered the three test answers. It found the Claimant’s report was poorly structured with no discernible headings. As for any advantage enjoyed by Ms Toohey, although the test made plain that, whilst modelled on an actual scenario, prior knowledge of the project was not required, the ET accepted a certain familiarity with the site must have been “some advantage to Ms Toohey, if only as a matter of morale” (paragraph 51). That said, the ET also concluded:
“52. Despite the fact that all this may have helped Ms Toohey with familiarity with the Sanofi project, Ms Toohey also gave an objectively well-structured answer to the test and scored many of her points for that rather than the content. That was logically unrelated to any question of familiarity. We remind ourselves that she only scored one more point on the substance of her written test than the claimant did. Both of them were a long way ahead of Shamim Akhter. However, Ms Toohey scored 3.5 points and Shamim Akhter 4 on the style side while the claimant scored 1 out of a possible 5 thereby bringing Shamim Akhter back into the running and leaving the claimant in last place. So, in the final analysis, the tribunal is not convinced that any familiarity with the site was an important factor. The tribunal also accept the bona fides of the management position that they really did not need to have factually true answers to the questions.”
14. The Claimant’s case before the ET argued that the assessment had been unfair; indeed, she submitted a witness statement purporting to be from an expert placing her answer in top place. Whilst allowing the statement into evidence, the ET gave it little weight; the test was whether the process as a whole was reasonable. It concluded:
“57. … The recruiting managers knew what they were looking for. They had a vision for the future of the department and the qualities in the person spec which this test was designed to elicit evidence of.”
15. Having scored the lowest of the three PO6 candidates in the written test and at interview, the Claimant was not selected for one of the two roles available. By the time she was notified of this, however, she was out of time to lodge an appeal against the earlier failure to assimilate her into the PO5 role. As the ET found, the Claimant could have appealed against the decision to assimilate Mr Remedios at an earlier stage, but had decided not to do so:
“34. … At the time Peter Remedios and his wife were expecting their first child and badly needed the job for security and income. She did not want to be in the invidious position of going head to head in competition with him for a post unless she knew for sure that the alternative to doing so would be to totally lose her employment with the council, as it has eventually turned out. …”
16. The Claimant appealed against her redundancy, but the Respondent took the view that this was not a redundancy selection but an assimilation process and as such there was no right of appeal on that issue. The ET did not consider the process to have been unfair in this regard, explaining its approach and reasoning as follows:
“64. As the tribunal urged, and the representatives finally agreed, this is a Morgan v Welsh Rugby Union model of restructure whereby posts are deleted and new posts are created to which there are competitive job interviews. This is not a classic redundancy selection enterprise following the classic Williams v Compair Maxam model, see Morgan v Welsh Rugby Union [2011] IRLR 376 EAT. Williams v Compair Maxam applies to an assessment of performance and skills when a defined number of existing post-holders in similar existing jobs are selected for redundancy from a pool, using selection criteria. It is a reduction in headcount within the same basic structure. It is very different from this sort of exercise which is more akin to recruitment (even though the candidates are known individuals). Nowadays, this seems to be the model for the majority of local government reorganisations. It is hard to see therefore how an appeal is of such value as it might be in a selection from within a pool as per the Williams v Compair Maxam model. (Williams v Compair Maxam Ltd [1982] IRLR 83 EAT).”
17. More specifically on the appeal, the ET further opined as follows:
“71. As stated it is hard to appeal against redundancy selection when it has come about through competitive interview and testing. In a professional sphere such as this, the questions were job-specific and not simply about generic management skills. The candidates were expected to demonstrate even budget management skills by means of specialist professional illustrations.”
18. As for the failure to assimilate the Claimant into the other, PO5, role, it reasoned:
“79. … To the extent that there was any irregularity we are fully persuaded that she would not have succeeded in being appointed to that role notwithstanding it would involve moving down from PO6 to PO5 (when Mr Remedios had in fact moved up from PO4 to PO5) because of her lack of relevant experience in new-build housing. Her example of building a bus route does not come near to the relevant experience required for the Barking Riverside role.”
19. As for the automatic unfair dismissal claim under section 152 TULRCA, the ET considered the question it had to determine was whether the marking of the Claimant’s assessment was genuine or whether it was influenced, directly or indirectly, by some hidden agenda related to the Claimant’s trade union activities. The ET did not consider it could conclude that the test had been marked in bad faith or in a way falling outside the band of reasonable responses. It reached the same conclusion in respect of the interview assessment. Acknowledging the Claimant’s belief that she had been targeted as a trade union representative from the start of the redundancy process, the ET did not accept that this was the case or that her trade union activities had influenced the decision makers in her case:
“134. All the tribunal can do is to judge these managers by their actions. We needed to enquire if their actions made internal sense and business sense, and the degree to which these managers knew and/or cared about the claimant’s trade union role, or the extent to which they could be subject to political pressures.
135. The claimant’s work as a regeneration professional was not directly affected by her union role. Indeed she was industrious. It had never been suggested that her trade union role detracted from the amount of time she devoted to her professional duties. Her performance in role was never criticised. There was not even a hint of that. It was her performances in the written test and interview that counted against her. That was the difference. We would have to have seen some extreme evidence to find, as the claimant invites us, that the scores were “fake”.”
20. Ultimately, the ET concluded that the Claimant’s claims of unfair dismissal and automatic unfair dismissal for trade union activities were not well founded and should be dismissed. It also commented on a subsequent proposal for yet more cuts within the Respondent and a further, albeit smaller, redundancy exercise that was undertaken, observing:
“105. We know that the respondent would state if the claimant were successful and this matter were to be listed for a remedy hearing that, had she survived that particular restructure redundancy exercise, she was unlikely to have survived the next.”
Submissions
The Claimant’s Case
21. The first objection taken by the Claimant is that the ET misdirected itself as to the applicable law; alternatively, that its decision was inadequately reasoned, not being compliant with Meek v City of Birmingham District Council [1987] IRLR 250 CA. Specifically, there was no express finding as to the reason for the Claimant’s dismissal, and the ET had applied too high a test for a finding of automatically unfair dismissal: that it had had to find bad faith or that the test for selection fell outside the band of reasonable redundancy handling procedures. Moreover, the Judgment was unstructured and referenced no case law save Williams and Morgan, thus the ET had not even explained the case law it had in mind when it addressed the question of consultation (see paragraph 21).
22. Specifically, the Claimant contends that the ET failed to consider this as a redundancy case and wrongly approached it as a reorganisation and appointment to a new post case per Morgan (see the ET at paragraph 64, save that it should be noted that the Claimant did not, as the ET suggested, concede that this was a Morgan case). Unlike Morgan, this was not the creation of a new role but the reduction of three roles into two. Even if it could be seen as akin to Morgan, the ET was wrong to elevate Morgan into a principle of law, as it appeared to have done (see, for example, paragraph 78), and it had thus wrongly concluded this would mean the denial of a right of appeal could not render the dismissal unfair; more generally, it had lost sight of the need to apply the statutory test under section 98(4) ERA and ask the kind of questions that would normally arise on a case of unfair dismissal.
23. Secondly, the Claimant complains that the ET failed to determine whether there had been any adequate collective consultation with the trade unions. Having correctly directed itself that collective consultation came before consultation with individual employees, the ET then made no finding as to the adequacy of collective consultation. It had, however, been obliged to make a finding on this point because section 188 TULRCA applied and so it was a specific stage in the Respondent’s process and, as the EAT had held in TNS UK Ltd v Swainston UKEAT/0603/12, the ET was obliged to consider whether the Respondent’s response fell within the band of reasonable responses at every stage of the process.
24. Thirdly, the Claimant contends that the ET erred in concluding (see paragraph 120) that there had been adequate individual consultation; this was not a perversity point but properly raised a point of law (see Swainston above). Further, where no consultation about redundancy has taken place, either collectively or at an individual level, then a dismissal will normally be unfair (see Mugford v Midland Bank plc [1997] ICR 399 EAT). Here, the individual consultation was inadequate and the ET’s finding on consultation did not and could not extend to the reasons for the redundancy or the individual identification of the Claimant.
25. Turning then to the question of procedural fairness, specifically, first, as to the appropriateness of the pool of employees from which the Respondent was selecting, in particular, the question whether the pool should have included others such as Ms Polić (something identified in the list of issues as a question the ET had to determine). Second, in respect of the failure to assimilate from the top down - the breach of the Respondent’s own procedure in respect of Mr Remedios’ assimilation - the ET erred in its dismissal of this point on the basis that this was a small scale restructuring when that was simply untrue; it was in fact a very large scale restructuring and redundancy exercise overall. In any event, the Respondent’s own procedure allowed for no such exception. It was, further, not an answer to this point (as the Respondent suggested) to say the Claimant could have appealed against the decision relating to Mr Remedios but had decided not to do so; that did not address the crucial point that this had taken place at the wrong time in the procedure. Third, the ET had erred in failing to properly address the issue of Ms Toohey’s knowledge of the test subject. More specifically, the Claimant complains that the ET erred in failing to conclude that the absence of a right of appeal against dismissal rendered the Claimant’s dismissal unfair: even if there were no right of appeal allowed in the internal procedure against a selective interview assessment, that did not remove the potential unfairness arising from the denial of a right of appeal in this respect for the purposes of section 98(4). Finally, the Claimant objects that the ET wrongly had regard to matters at the liability stage that could only be relevant to remedy; specifically, see paragraphs 37 and 105 of the ET’s reasoning, both set out above.
The Respondent’s Case
26. Although it was accepted the ET did not make a clear express finding as to the reason for dismissal, it was implicit it had found the Claimant was dismissed by reason of redundancy. It had further made clear it rejected any suggestion that it was due to her trade union activities, and it had not thereby applied too high a test: the ET had asked itself whether the selection process was genuine or influenced (directly or indirectly) by some hidden agenda specifically related to the Claimant’s trade union activity, but it had not stopped there and had, taking its reasoning in total, considered the broader question whether the Claimant’s trade union activities had been the reason or principal reason for the decision to select her for redundancy.
27. Turning to the complaint of unfair dismissal more generally, the Respondent did not consider it was open to the Claimant to object to the approach adopted by the ET in treating this as a case to which Morgan applied, not least as (even in Williams) it had been recognised that the guidance was not set in stone. In any event, it was clear the ET was satisfied the Respondent had acted reasonably at all stages of the process in treating the redundancy situation as a sufficient reason to dismiss the Claimant. Thus the ET had referred to the different aspects of collective consultation in its narrative of the history and, to the extent it was not made explicit at paragraphs 21 and 120, it was implicit in the ET’s finding of fairness that it had concluded that these efforts were sufficient. Turning to individual consultation, the ET had not seen this as limited in the way the Claimant suggested. In any event, it had again made clear it accepted the reasonableness of the Respondent’s approach (see paragraph 21).
28. As for the complaints as to the fairness of the selection process, it was to be noted that the Claimant at the time had raised no complaint about the pool from which selection for redundancy was to be made. It was also not identified as an issue in her ET1. Although mentioned in the Claimant’s closing submissions before the ET, this was in only three of some 137 paragraphs. The ET had been entitled to consider it a minor matter. In any event, it was implicit from the overall finding of fairness that it did not accept there was any basis for criticism in this regard. The issue about top-down assimilation had been before the ET, but it had accepted the Respondent’s evidence that it was not obligatory to adopt that approach in a small, self contained restructure such as this. That finding was not susceptible to challenge by way of appeal. As for the internal appeal, the ET had found the Claimant had not been denied the right of appeal against assimilation into the PO5 position; rather, she had made a conscious decision not to exercise that right. Similarly, the ET had expressly addressed the Claimant’s case about the selection exercise for the remaining PO6 positions and Ms Toohey’s knowledge. On the facts, the ET had rejected the contention that familiarity with the site had been an important factor. That was, again, a permissible conclusion not susceptible to being overturned on appeal. As for the complaint as to the denial of a right of appeal against her non-selection, the ET had found that the Claimant could not appeal against a competitive interview and had acknowledged that this made it difficult to appeal her selection for redundancy in this case. That was not the same as holding there was no genuine right of appeal; indeed, the ET expressly acknowledged the potential for a challenge to the decision to dismiss the Claimant on the basis of bad faith or that the process fell outside the band of reasonable responses. Even if there had been a complete denial of a right of appeal, that would not necessarily mean the dismissal was unfair: the question remained whether the Respondent acted reasonably and within the range of reasonable responses in treating the reason for dismissal as sufficient both when originally made and at the stage of any appeal.
29. Finally, the ET had not erred by taking into account matters that properly could only go to remedy. It had been entitled to refer to the likelihood of Mr Remedios’ assimilation to the PO5 position (paragraph 37), something that the Claimant had herself referred to in her submissions on liability. As for the reference to what the Respondent would say at the remedy stage relating to the subsequent redundancy exercise (paragraph 105), the ET had made no finding of fact and had not expressed any conclusion; it was merely recording its understanding of the Respondent’s position.
The Relevant Legal Principles
30. At the heart of this case is the question of the approach the ET was to adopt when determining the issue of fairness; the starting point is therefore section 98(4) ERA 1996:
“(4) … the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) -
(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
(b) shall be determined in accordance with equity and the substantial merits of the case.”
31. In this case, the Claimant had made a claim of automatic unfair dismissal on the basis that her dismissal had really related to her trade union activities (section 152 TULRCA). The ET rejected that contention. It is implicit that it accepted the Respondent’s case that the reason for dismissal was redundancy, a reason capable of being fair for under section 98(2) ERA.
32. As to whether a redundancy dismissal is in fact fair, in Williams, Browne-Wilkinson J (as he then was) presiding, guidance was given as follows:
“18. For the purposes of the present case there are only two relevant principles of law arising from that subsection. First, that it is not the function of the Industrial Tribunal to decide whether they 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 second point of law, particularly relevant in the field of dismissal for redundancy, is that the Tribunal must be satisfied that it was reasonable to dismiss each of the applicants on the grounds of redundancy. It is not enough to show simply that it was reasonable to dismiss an employee; it must be shown that the employer acted reasonably in treating redundancy ‘as a sufficient reason for dismissing the employee’, ie the employee complaining of dismissal. Therefore, if the circumstances of the employer make it inevitable that some employee must be dismissed, it is still necessary to consider the means whereby the applicant was selected to be the employee to be dismissed and the reasonableness of the steps taken by the employer to choose the applicant, rather than some other employee, for dismissal.
19. In law therefore the question we have to decide is whether a reasonable Tribunal could have reached the conclusion that the dismissal of the applicants in this case lay within the range of conduct which a reasonable employer could have adopted. It is accordingly necessary to try to set down in very general terms what a properly instructed Industrial Tribunal would know to be the principles which, in current industrial practice, a reasonable employer would be expected to adopt. This is not a matter on which the chairman of this Appeal Tribunal feels that he can contribute much, since it depends on what industrial practices are currently accepted as being normal and proper. The two lay members of this Appeal Tribunal hold the view that it would be impossible to lay down detailed procedures which all reasonable employers would follow in all circumstances: the fair conduct of dismissals for redundancy must depend on the circumstances of each case. But in their experience, there is a generally accepted view in industrial relations that, in cases where the employees are represented by an independent union recognised by the employer, reasonable employers will seek to act in accordance with the following principles:
1. The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere.
2. The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria.
3. Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service.
4. The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection.
5. The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment.
The lay members stress that not all these factors are present in every case since circumstances may prevent one or more of them being given effect to. But the lay members would expect these principles to be departed from only where some good reason is shown to justify such departure. The basic approach is that, in the unfortunate circumstances that necessarily attend redundancies, as much as is reasonably possible should be done to mitigate the impact on the work force and to satisfy them that the selection has been made fairly and not on the basis of personal whim.” (Original emphasis)
Moreover, recognising that there was a separate statutory provision in respect of collective consultation, the EAT considered this reflected an approach by the legislature to the correct handling of redundancies where there is a recognised union that might be seen to echo what the EAT had itself identified to be good practice: that is, early warning, consultation with the union, and a preordained basis of selection.
33. In the present case, the ET considered that the guidance provided in Williams did not greatly assist; as had been recognised by the EAT, HHJ David Richardson presiding, in Morgan at paragraph 30 (considering the rationale for the distinction between those cases that fitted within the Williams guidance and those that did not readily do so):
“30. … Where an employer has to decide which employees from a pool of existing employees are to be made redundant, the criteria will reflect a known job, performed by known employees over a period. Where, however, an employer has to appoint to new roles after a re-organisation, the employer’s decision must of necessity be forward-looking. It is likely to centre upon an assessment of the ability of the individual to perform in the new role. Thus, for example, whereas Williams-type selection will involve consultation and meeting, appointment to a new role is likely to involve, as it did here, something much more like an interview process. These considerations may well apply with particular force where the new role is at a high level and where it involves promotion.”
34. That said, as the EAT in Morgan observed, the real issue is the application of section 98(4) ERA:
“36. To our mind a tribunal considering this question must apply s.98(4) [ERA]. No further proposition of law is required. A tribunal is entitled to consider, as part of its deliberations, how far an interview process was objective; but it should keep carefully in mind that an employer’s assessment of which candidate will best perform in a new role is likely to involve a substantial element of judgment. A tribunal is entitled to take into account how far the employer established and followed through procedures when making an appointment, and whether they were fair. A tribunal is entitled, and no doubt will, consider as part of its deliberations whether an appointment was made capriciously, or out of favouritism or on personal grounds. If it concludes that an appointment was made in that way, it is entitled to reflect that conclusion in its finding under s.98(4).”
See also paragraph 44 of the judgment in Somerset County Council v Chaloner UKEAT/ 0600/12.
35. Applying section 98(4) requires the ET not to itself stand in the shoes of the employer but to test the employer’s decisions at each stage of the process against the range of reasonable responses open to a reasonable employer in the particular circumstances of the case (see Williams and also Swainston at paragraph 30). We further remind ourselves that Parliament has made clear that it is for the ET to make the relevant assessment under section 98(4); it is not the role of the EAT to intervene in that assessment unless the ET has thereby erred in law.
Discussion and Conclusions
36. The starting point for the ET was to determine the reason for the Claimant’s dismissal. If it had found that the reason or principal reason for the Claimant’s dismissal was that she had taken part or proposed to take part in trade union activities, the ET would have been bound to find that it was automatically unfair (see section 152 TULRCA). It is apparent that it did not accept that was the reason playing on the Respondent’s mind in this case; in part because it did not find that the Respondent acted in bad faith in the process it carried out, but - more than that - having given detailed consideration to the matters relied on by the Claimant (in support of her belief that her trade union activities had been the real reason for her dismissal), the ET rejected any part of that alternative case on the facts. Although raised on the appeal, it is fair to say this has not been a point of focus in Ms Omeri’s oral submissions, and we can see why: taken overall, it can be seen that the ET did properly engage with the issues raised in this regard, and we do not think, properly reading the reasoning as a whole, that it can be said it limited its assessment to one focused on bad faith; the ET just did not consider the Claimant’s trade union activities played on the Respondent’s mind when determining that she should be dismissed. We do not, therefore, allow the appeal against the rejection of the automatic unfair dismissal case under section 152 TULRCA.
37. Returning to the reason for the dismissal and allowing that the ET implicitly found this was redundancy - albeit that it did not, as it should have done, expressly state this to be so - the question was whether the dismissal of the Claimant for that reason was fair for section 98(4) purposes; the main question on the appeal relates to the ET’s approach to its task in this regard.
38. The ET did not see this as a case where it needed to determine fairness on Williams lines; it considered that the principles laid down in traditional redundancy selection cases such as Williams did not apply because the question was not why the Claimant had been selected for redundancy as much as why she had not been appointed to one of the remaining positions. In adopting this approach, the ET expressly stated it was following Morgan. To that extent, the ET made plain the approach it was adopting.
39. The difficulty we find is that the ET thereby appeared to see Morgan as providing the solution to the case as it if laid down a rule of law, when Morgan in fact made clear it was directing ETs back to section 98(4) ERA unvarnished; it expressly did not lay down any further proposition of law (see paragraph 36 of Morgan above).
40. We can see that, where a redundancy arises in the context of a reorganisation or restructuring that sees old jobs disappear and new jobs created, the selection process that the employer will carry out may be hard to characterise in Williams terms; that was the point being made in Morgan relevant to the particular facts of that case. In the present case, however, the redundancy arose in the context of a much larger collective redundancy situation, quite unlike Morgan. The reduction of three jobs into two was part of the restructuring, but it was not the creation of a different job as such. It is hard to see why this should not simply be characterised in terms of a selection pool of three, from which two employees were to be retained and one would be selected for redundancy.
41. That is not to say, however, that the Respondent was not entitled to carry out its selection process in the way that it did; we do not say it was required to apply the criteria identified at paragraph 3 of the Williams guidelines. The question for the ET was whether the Respondent thus acted within the range of reasonable responses. So, even if distinguishable from Morgan - in that this was not a case involving the creation of a new position - that would not have prevented the ET concluding that a process that looked forward - seeking to determine who would be best qualified and who had the most relevant abilities and skillset - fell within the range of reasonable responses. Similarly, it would be open to the ET to consider that the process of selection - here carried out by means of an assessment and interview - was also fair.
42. At all times, the touchstone would need to be section 98(4); the ET would keep in mind the need not to fall into the error of substitution, but it would still need to review the decisions made and the process followed and determine whether each stage fell within the range of reasonable responses. Here, we do not consider we can be satisfied that the ET adopted this approach. We consider it became blinkered by what it felt was the requirement to apply Morgan as if it laid down a rule of law. That was an error: first, because this was not a case on all fours with Morgan; and second, Morgan should have directed the ET back to section 98(4) - it did not provide a means of short-circuiting that assessment.
43. In reaching that conclusion, we have asked ourselves whether we are being unfair to the ET, failing to stand back and consider its reasoning as a whole and requiring too much in terms of its explanation as to the approach it had taken under section 98(4). We note, however, that the ET failed to address many of the questions that obviously arise under section 98(4) in this case. It failed, for example, to deal at all with the issue identified in the list before it relating to the composition of the selection pool. Even allowing that this might have been given less focus below, it was still an issue expressly identified before the ET and that we suspect the ET would have addressed if it had not been unduly blinkered by its elevation of Morgan into a rule of law. Further, the ET made a finding in respect of the early assimilation of Mr Remedios that apparently missed the fact that this was a large scale redundancy exercise and there was no exception allowed in the Respondent’s procedure on this point. We are also not confident that the ET properly considered the question of fairness under section 98(4) in respect of the right of appeal: it criticised the Respondent’s failure to properly address the point or scope of the Claimant’s appeal in respect of her process complaint (as to the advantage given to Ms Toohey; see paragraph 100) but then apparently failed to include this within its assessment of the reasonableness of the Respondent’s rejection of her appeal (and the reference to the appeal outcome at paragraph 102 simply fails to offer any insight into the ET’s conclusion as to the fairness of the approach taken).
44. It seems to us that this underlying failure of approach also explains why the ET failed to address the issues of collective and individual consultation. This was a large scale redundancy exercise where there were relevant recognised trade unions, and yet we cannot discern any proper engagement by the ET with the question of collective consultation and how that may have impacted upon the fairness of the dismissal in this case. Although there are some findings that we can see as relevant to the question of individual consultation (see for example paragraph 21), we are also not satisfied that the ET engaged with the extent of the Claimant’s case on this point. We think that these failings again arose from the ET’s blinkered approach when applying Morgan, not seeing that this required it still to review each stage of the Respondent’s process and decision making through the lens provided by section 98(4) and the range of reasonable responses test.
45. Finally, we also have some disquiet arising from the ET’s reference to what may be seen as matters relevant to any subsequent assessment under Polkey v A E Dayton Services Ltd [1988] 1 AC 344 HL. By itself, this ground of appeal would not have persuaded us to overturn an ET’s decision of this nature and we can allow that the inclusion of the matters addressed at paragraphs 37 and 105 might not have impacted upon the ET’s decision in any material sense. That said, we agree with the Claimant that these were not matters that could properly impact upon the question of fairness - as opposed to remedy - and the ET’s apparent regard for such irrelevant matters at this, the liability, stage, simply underlines our conclusion that this is not a decision that we can consider to be safe.
46. Although we have thus allowed the appeal on the substantive grounds and not simply because of the inadequacy of the reasons provided, we also make clear that it is unhelpful for an ET’s Reasons not to follow a clear structure, separately setting out - preferably with the use of appropriate headings - the issues it had to address, its findings of fact, a summary of legal principles and the parties’ competing arguments, and then the ET’s conclusions, properly addressing the questions it was charged with determining. We recognise that the ET here had to address the broader issues identified by the Claimant’s trade union activities case - which we have not had to engage with in any detail - and we also appreciate that the Claimant’s case below may not have focused on the issues with the same clarity as we have enjoyed on the appeal. That said, we consider it is fundamental to an ET’s decision-making under section 98 that it clearly identifies its finding as to the reason for the dismissal and then its assessment of the fairness of the dismissal for that reason, applying the range of reasonable responses test required by section 98(4). For all those reasons, we allow this appeal.
Disposal
47. Having given our Judgment in this matter, we permitted the parties to address us further on the question of disposal. Accepting that our Judgment allows for the possibility of more than one outcome, it is accepted by the parties, albeit somewhat reluctantly on behalf of the Claimant, that the matter has to be remitted. The Claimant says that should be to a different ET; the Respondent does not object to that course. Having had regard to the guidance laid down in Sinclair Roche & Temperley v Heard and Anor [2004] IRLR 763 EAT, we consider that this is, we are afraid to say, one of those cases where we do think the ET’s Judgment is flawed at a fundamental level, and, whilst reluctant to direct that a case has to be heard afresh when it has already taken up ten days of ET time, we think that the interests of justice have to be served by this case being determined by a freshly constituted ET hearing the matter afresh. Whether that is an Employment Judge sitting alone or a fully constituted ET we think is a matter properly for the discretion of the Regional Employment Judge.