United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0293/16/DA

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

                                                                                                             At the Tribunal

                                                                                                             On 8 March 2017

Before

HIS HONOUR JUDGE PETER CLARK

(SITTING ALONE)

MRS V DUNNE                                                                                            APPELLANT

COLIN & AVRIL LTD t/a CARD OUTLET                                              RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

SUMMARY

REDUNDANCY - Suitable alternative employment

UNFAIR DISMISSAL - Reasonableness of dismissal

Application of the two-fold test for suitability and unreasonable refusal of alternative employment disentitling the employee to a redundancy payment; see Bird v Stoke-on-Trent Primary Care Trust UKEAT/0074/11, paragraphs 17 to 21.  Effect on finding of fair redundancy dismissal: the Claimant’s appeal is allowed and case remitted for rehearing by the Employment Tribunal.

HIS HONOUR JUDGE PETER CLARK

Introduction

1.               This is an appeal by Mrs Dunne, the Claimant, against the Judgment of Employment Judge Roger Harper, sitting alone at the Wrexham Employment Tribunal on 17 June 2016, dismissing her claims of unfair dismissal and for a redundancy payment brought against her former employer, the Respondent, Colin & Avril Ltd trading as Card Outlet.  That Judgment with Reasons was promulgated on 23 June 2016.

The Facts

2.               The Claimant commenced her period of continuous employment with the Respondent’s predecessor on 1 June 2003.  She worked a 24-hour week as a book-keeper.  Her employment transferred to the Respondent after her previous employer went into liquidation in June 2015.  Thereafter, discussions took place with Mr Morgan, principal of both the old and new businesses, about the Claimant’s position.  Initially she was offered a 16-hour per week contract, which was not financially acceptable to her.  She was then offered a 24-hour contract involving 16 hours’ book-keeping and 8 hours of what was described as “Emily’s work”, which included working in the warehouse.  She declined that offer and was dismissed on 10 February 2016.

3.               The Judge found (paragraph 15) that the Claimant worked a three day week for health reasons: “She has leukaemia and was unable to work more than 24 hours per week”.  He found (paragraph 19) that in the warehouse members of staff often wore hats, fingerless gloves and coats; because of her leukaemia, she could not tolerate this cold environment.  However, she did not advance her health as a reason for not accepting the new role, including “Emily’s work”, prior to dismissal.  Instead, she contended that such work was inconsistent with her book-keeping skills and experience and would not be cost effective for the business.  Emily received a lower rate of pay than the Claimant did, and, as Mr Warnes points out, she was looking for a redundancy payment.  No medical evidence was put before the Judge as to the effect of working in the warehouse on the Claimant’s medical condition.

The Employment Tribunal Decision

4.               The Judge found: (1) that there was a “redundancy situation” as defined in section 139 of the Employment Rights Act 1996 (“ERA”) (paragraph 5); (2) however, the Claimant had unreasonably refused an offer of suitable alternative employment (see section 141 ERA) and was not entitled to a redundancy payment; and (3) dismissal for redundancy was fair.  Those last two conclusions are expressed at paragraph 20 in this way:

“20. Therefore the job offer meant that substantially the claimant was going to be office based and that her pay was going to remain exactly the same.  This results in the inevitable conclusion that the job offer by the respondent was a suitable one and the other inevitable conclusion is that the refusal to accept that offer was not reasonable.  Therefore, having regard to the approach in Williams v Compair Maxam [[1982] IRLR 83] this results in the dismissal being fair.”

The Appeal

5.               As to redundancy payment, Ms Kirby, now appearing on behalf of the Claimant, submits that the Judge wrongly conflated the two-strand test separating out the questions of suitable alternative employment and unreasonable refusal.  Further, she contends that the Judge was wrong to jump from his conclusion on the redundancy payment question to the separate section 98(4) fairness question.  I am no longer concerned with issues of automatically unfair dismissal.  Answering the first question, she submits wrongly, does not of itself provide an inevitable answer to the fairness question under section 98(4).  I shall consider the redundancy payment and unfair dismissal questions in turn.

Redundancy Payment

6.               There is no challenge to the Judge’s finding that a section 139 redundancy situation arose.  The law as to the section 141 disentitlement to a redundancy payment is now clear.  It is correctly stated by Keith J in Bird v Stoke-on-Trent Primary Care Trust UKEAT/0074/11, 21 July 2011, at paragraphs 17 to 21.  In essence, the Tribunal must first decide the objective question: was the alternative employment suitable?  If so, it must decide the subjective question: was this Claimant’s refusal of the offer of suitable alternative employment unreasonable?  The onus lies on the employer to show both suitability and unreasonable refusal.

7.               In the present case Mr Warnes, for the Respondent, does not accept that the Judge fell into error by conflating the suitability and unreasonable refusal strands of the section 141 test.  He submits that both questions were addressed and permissibly answered at paragraph 20.  I cannot agree.  Whilst the Reasons are commendably concise, nowhere do I detect a clear self-direction as to the difference between the suitability and unreasonable refusal questions as I have described them above.  In fairness, Mr Warnes, who appeared below, tells me that no authority on those two questions under section 141 was cited either by him or by the Claimant, then appearing in person, to Employment Judge Harper below.

8.               Further, at paragraph 20 the Judge deals with suitability in a way which may be less open to challenge, but the inevitability of the conclusion on that issue does not lead to an inevitable conclusion as to unreasonable refusal.  Rather, that second question involves an assessment of the Claimant’s subjective reason or reasons for refusing the final offer of 16 hours of book-keeping and 8 hours of “Emily’s work”.

9.               There is a further difficulty, it seems to me, with the Judge’s approach.  At paragraph 19 he appears to conclude that because the Claimant did not raise the effect of the cold warehouse environment on her medical condition prior to dismissal, she could not now rely on it as part of her reason for refusing the alternative employment offered.  In my judgment, that is too prescriptive an approach by analogy with the law of constructive dismissal.  I invited the parties’ submissions on the relevance, if any, of the Court of Appeal decision in Weathersfield Ltd v Sargent [1999] ICR 425.  In that case, the Court considered an earlier EAT decision (HHJ Butter QC presiding) in Holland v Glendale Industries Ltd [1998] ICR 493, where it was held that the employee must communicate the real reason for leaving the employment at the time if it is to be relied on as being a response to a repudiatory breach by the employer.  That proposition was rejected by Pill LJ, giving the leading judgment in Weathersfield (see page 431F).

10.            In my judgment, a similar approach is required when considering the employee’s reason for refusing an offer of suitable alternative employment.  The question is whether the employer has shown that the refusal was unreasonable.  The mere fact that the reason later relied on by this Claimant in her form ET1, witness statement and oral evidence was not raised prior to dismissal does not mean that it can be wholly disregarded in deciding the unreasonable refusal question.  For these reasons, I shall uphold the Claimant’s appeal against the finding that she was not entitled to a redundancy payment.

Unfair Dismissal

11.            I agree with Ms Kirby that even if the Claimant was disentitled to a redundancy payment on the basis that she had unreasonably refused an offer of suitable alternative employment that does not necessarily mean that the dismissal was fair.  However, since I am not persuaded by Mr Warnes that the Judge correctly applied the law in deciding the questions of suitability and unreasonable refusal, it must necessarily follow that in returning those questions to the Tribunal the separate section 98(4) question must also be revisited on the basis of the second Tribunal’s findings on the redundancy payment issue.

Disposal

12.            The appeal is allowed.  Ms Kirby invites me to decide the matter myself and to reverse the Judge’s findings by awarding the Claimant a redundancy payment and making a finding of unfair dismissal.  I cannot accept that invitation, particularly in light of the Court of Appeal guidance in Jafri v Lincoln College [2014] ICR 920.  These are quintessentially fact-based questions for the Employment Tribunal.  The questions of redundancy payment entitlement and unfair dismissal will be remitted to a fresh Employment Tribunal for determination in the light of this Judgment, it being common ground that if the matter is remitted it should go to a fresh Tribunal.  Such a course is proportionate, is based on the Claimant’s likely perception if she loses on remission and is absolutely no reflection on the undoubted professionalism and impartiality of Employment Judge Harper.