Employment Judge VolkmerMs Hornblower (instructed by Counsel) for claimantMr Milsom (instructed by Counsel) for respondentDate 19 May 2023
JUDGMENT
[1]The Claimant’s claim for a redundancy payment is dismissed on withdrawal by the Claimant.[2]The Claim of unfair dismissal is well founded and is upheld. The Tribunal makes a compensatory award of £63,890.46 (gross).[3]The Claimant confirmed at the outset that he was brining an individual claim as a sole claimant and was not acting in a representative capacity in relation to section 188 of the Trade Union & Labour Relations (Consolidation) Act 1992.[4]The Respondent has failed to comply with a requirement of section 188 of the Trade Union & Labour Relations (Consolidation) Act 1992. The claim for a protective award succeeds. 1 of 2 Case Number: 1402125/2022[5]The Tribunal makes a protective award for a period of 90 days starting on 31 January 2022 in the sum of £53,742 (gross).
REASONS
[1]The Claimant made an ACAS early conciliation notification on 27 June 2022 and the certificate was issued on 29 June 2022. By a claim form presented on 30 June 2022 the Claimant brought the following complaints:(a) unfair dismissal;(b) a redundancy payment;(c) a protective award for failure to consult under s. 188 of Trade Union and Labour Relations (Consolidation) Act 1992 (“TULR(C)A”).[2]The Claimant’s claim for a redundancy payment was formally withdrawn at the beginning of the hearing and was therefore dismissed upon withdrawal.[3]The Claimant accepted that the reason for his dismissal was redundancy but took the position that his redundancy selection was unfair. He further alleged that the Respondent was under an obligation to collectively consult but did not do so. The Respondent resists the Claim on the basis that the redundancy selection was fair, and on the basis that it had no collective consultation obligation.[4]The Tribunal considered a Hearing Bundle of 309 pages, and a number of supplementary documents which were added into the main bundle.[5]The Tribunal heard oral witness evidence from the Claimant, Mrs Lucy Friend and Mr Sigurjohn Luthersson.
The Issues
[6]A case management hearing took place on 7 December 2022, and Employment Judge Livesey set out the issues for the Tribunal to determine in the Case Management Order. Those issues were adopted by the Tribunal and are as follows. 1. Unfair dismissal1.1 There was no dispute that the Claimant was dismissed and that it was for a potentially fair reason under s. 98 (2) of the Employment Rights Act 1996, namely redundancy.1.2 Did the Respondent act reasonably in all the circumstances in treating that as a sufficient reason to dismiss the Claimant. The Tribunal will usually decide, in particular, whether: 2 of 181.2.1 the Respondent adequately warned and consulted the Claimant. He complains that the consultation process was pre-determined and that there was:1.2.1.1 a lack of any detailed explanation as to why the Claimant’s position was redundant;1.2.1.2 a failure to respond to any of the Claimant’s concerns as to why he considered his selection for redundancy to be unfair;1.2.1.3 a failure to provide any explanation as to why the combined role had been given to Mr De Nazareth; and1.2.1.4 confirmation of him as a leaver with Respondent’s IT department very shortly after the commencement of the consultation process. He further complains that he was notified that Mr De Nazareth had been appointed to the consolidated role (and that he would not have a role going forward) before the commencement of any formal consultation process (i.e. that the outcome was predetermined) and that Mr De Nazareth was confirmed in the new role on organisation charts, and taking over responsibility for the Claimant’s team, before the commencement of any such process;1.2.2 the Respondent adopted a reasonable selection decision, including its approach to a selection pool. The Claimant specifically complains that:1.2.2.1 there was a failure to give any consideration to identifying the appropriate selection pool of those employees who would be affected by the redundancy (and specifically the exclusion of Mr De Nazareth from the pool);1.2.2.2 the Respondent appointed Mr De Nazareth to the consolidated role, (managing the ‘Business Intelligence and Reporting Team’), on the basis that he was liked by the Head of Sales, and without any form of selection process;1.2.3 the Respondent took reasonable steps to find the Claimant suitable alternative employment?1.3 Was the decision to dismiss a fair sanction, that is, was it within the range of reasonable responses open to a reasonable employer when faced with these facts?1.4 Did the Respondent adopt a fair procedure? The Claimant asserts that there was; 3 of 181.4.1 a failure to consider and explore alternative vacancies for the Claimant;1.4.2 a failure failure to follow its own redundancy policy, which included:1.4.2.1 a requirement that “the basis for including the grounds [of dismissal] in the written notification will be notified to you sufficiently in advance of the meeting to enable you to have a reasonable opportunity of considering your response”;1.4.2.2 a right for the Claimant to accompanied at redundancy meetings; and1.4.2.3 a right of appeal.1.5 If it did not use a fair procedure, would the Claimant have been fairly dismissed in any event and/or to what extent and when? 2. Protective award2.1 Did the Respondent propose to dismiss 20 or more employees within 90 days at the same establishment?2.2 The Respondent challenges the test on all three issues; numbers, time frame and establishment. 3. Remedy Unfair dismissal3.1 The Claimant does not wish to be reinstated and/or re-engaged.3.2 What basic award is payable to the Claimant, if any?3.3 Would it be just and equitable to reduce the basic award because of any conduct of the Claimant before the dismissal? If so, to what extent?3.4 If there is a compensatory award, how much should it be? The Tribunal will decide:3.4.1 What financial losses has the dismissal caused the Claimant?3.4.2 Has the Claimant taken reasonable steps to replace their lost earnings, for example by looking for another job?3.4.3 If not, for what period of loss should the Claimant be compensated? 4 of 183.4.4 Is there a chance that the Claimant would have been fairly dismissed anyway if a fair procedure had been followed, or for some other reason?3.4.5 If so, should the Claimant’s compensation be reduced? By how much?3.4.6 Did the ACAS Code of Practice on Disciplinary and Grievance Procedures apply? If so, did the Respondent or the Claimant unreasonably fail to comply with it? If so is it just and equitable to increase or decrease any award payable to the Claimant and, if so, by what proportion up to 25%?3.4.7 Does the statutory cap of fifty-two weeks’ pay or £93,878 apply? Credibility of Witnesses[8]I will begin by making some comments on the Tribunal’s general view on the credibility of the witnesses.[9]The Tribunal panel found the Claimant to be a wholly credible witness. The Tribunal found the Claimant’s evidence which was internally consistent, the Claimant gave concessions where appropriate (such as if he could not remember whether something had been said or not, or conceding a point that was not necessarily in his favour). The Claimant was at pains to be precise and gave detail and context which the Tribunal considered strengthened the credibility of his evidence. The Claimant’s evidence was also strengthened by contemporaneous notes, in email format, taken during the time period in question.[10]In relation to the credibility of Ms Friend, the Tribunal found that Ms Friend’s evidence was affected by her desire to give evidence which was favourable to the Respondent, rather than focussing on answering truthfully as to matters within her knowledge. When questioned about the Claimant’s level within the organisation compared to that of David De Nazareth, and why there was a difference between the Grounds of Resistance and Ms Friend’s evidence, she was not able to convince the Tribunal that even this straightforward fact was within her own knowledge. When the inconsistency between the Grounds of Resistance and her evidence was put to her, Ms Friend asked if she could speak with her lawyer. Ms Friend stated in her written statement that she could “confirm that the table at page 278 shows the total number of people made redundant, redeployed or who left voluntarily throughout the whole of Micro Focus' operations in the UK”. However, on further questioning it transpired that this was a meaningless assertion because the table had been compiled by someone else, Ms Friend stated that “internal legal” had created the tables at pages 179 and 278 of the Hearing Bundle. Ms Friend had no knowledge of how they were compiled or which data they were drawn from, or indeed whether that data was accurate. When Ms Friend was again directly asked if she knew whether the tables were accurate, she responded “I believe they’re accurate”, she was then asked what that was based on and she simply repeated her answer. It was put to her that she had not seen the information behind them 5 of 18 and asked how she could say that they were accurate, Ms Friend said “I don’t know”. This greatly undermined Ms Friend’s credibility overall. It was clear that Ms Friend had been put in an awkward position in giving evidence, in particular regarding the collective consultation obligations, as none of the facts relevant to collective consultation were within her own knowledge.[11]The Tribunal panel found Mr Lutherson to be generally credible as witness. The Tribunal found Mr Lutherson to give evidence which was internally consistent, Mr Lutherson gave concessions where appropriate (such as if he could not remember whether something had been said or not, or conceding a point that was not necessarily in his favour). The Tribunal considered that the Claimant’s evidence and/or recollection was more accurate in relation to certain details because it was consistent with contemporaneous notes taken at the time of the relevant events. Findings of Fact: Background[12]The Respondent is a large international IT company which provides software solutions, technology and support to large corporations. The Claimant had previously worked for the Respondent between 2009 and 2014. In October 2015, the Claimant was contacted by Mike Steinmetz who asked him if he would return. The Claimant became an employee of the Respondent for the second time on 1 December 2015 in the role of Business Intelligence Manager.[13]Following the acquisition of Hewlett Packard Software by the Respondent (a reverse takeover), the Claimant was promoted to run Business Intelligence and Reporting within the sales division. At the time, he had around 30 employees reporting to him across four teams.[14]From February 2020 another employee at the Respondent, David De Nazareth, was responsible for the Analytics team. There was overlap between the work of Mr De Nazareth’s team and the work of the Claimant’s team. In January 2021, there was an attempt to separate the work with Mr De Nazareth’s team focussing on sales, and the Claimant focussing on renewals of business.[15]It is agreed between the parties that the Claimant was a good performer. The Claimant and Mr De Nazareth both reported to the same manager, Sigurjohn Luthersson. However, Mr De Nazareth was a “Director” by title, and the Claimant was not.[16]In September 2021 a large-scale reorganisation across the whole of the Respondent’s Support Operations organisation was announced. This included the Sales Division, within which the Claimant worked. This was put forward as a cost reduction exercise, with the aim of reducing costs by 50% across Support Operations (which the Sales Division formed part of). In November 2021, the Respondent announced that the aim was to “Remove $400 to 500 million of gross annual recurring cost”, and additionally said that it would spend $200 million to deliver these savings which was referred to by the CFO as severance. This finding is based on the Claimant’s witness evidence. 6 of 18[17]Mr Luthersson, as the Vice President of Global Support Operations, was tasked with deciding how this cost saving would be made within his function of Support Operations. There was flexibility as to how the cost saving would be made within Mr Luthersson’s remit, but it was inevitable that some redundancies would be required to make such a large saving. This was reflected in the large provision made for “severance”.[18]The Claimant’s evidence was that during a remote meeting/call in November 2021, Mr Pecquereau performed a ‘screen share’ in which he showed those on the call a document he had created and referred to as his ‘master spreadsheet’ (page 169 of the Hearing Bundle). This was an Excel document, listing all of the employees within Mr Steinmetz’ organisation (Mr Steinmetz was Mr Luthersson’s manager). Listed next to each employee’s name was information relating to the employees’ salary and the proposed outcome for the employee (i.e. continued employment, a move to another department, or redundancy – denoted by “IN”, “OUT” and “TRANSFER”), and if redundancy, which redundancy wave the employee was due to leave in. The Claimant’s evidence was that this was challenged by an American employee, Mr Davies, during the call. Mr Luthersson and Mr Nabial stated that the Respondent’s Human Resources team had made the decision that, rather than identifying roles at risk, they would be submitting specific named employees to be made redundant – being on the list would mean the employee would be made redundant as part of one of the waves of redundancy.[19]Mr Luthersson’s evidence, when asked about what was said on the call, stated that he could not recall Mr Davies challenging this. Mr Luthersson denied that the spreadsheet was a firm proposal, his evidence was that this was just the beginning of the planning and process.[20]Without any evidence to the contrary, and for reasons of overall credibility, the Tribunal preferred the Claimant’s evidence on what took place on the call. However, it considered that Mr Luthersson was credible regarding the stage of the process in terms of the spreadsheet at that time. This is supported by the fact that the Claimant was marked as “IN” at that stage.[21]Mr Luthersson’s evidence was that there was an intense period of planning at the end of December 2021 and by mid January, before a meeting which took place on 14 January 2022, a proposal to consolidate certain teams within his remit had solidified.[22]A second “master spreadsheet” was created in March 2022, and is at page 172 of the Hearing Bundle. This was after the time at which the proposals had been solidified. Collective Consultation: The facts[23]There was a complete lack of factual evidence put forward by the Respondent in relation to collective consultation requirements. Mr Luthersson did not give evidence relevant to this point. Ms Friend’s witness statement referred only briefly to the topic. 7 of 18[24]At paragraphs 35 and 36 of her Witness Statement, Ms Friend stated that she could “confirm that the table at page 278 shows the total number of people made redundant, redeployed or who left voluntarily throughout the whole of Micro Focus’ operations in the UK”. However in cross examination it became clear that Ms Friend had no knowledge whatsoever in relation to the table at page 278. She did not know who had compiled it (stating it was internal legal, but not referring to an individual by name), she did not know where the data had come from, and she could not attest to the accuracy of the table. Moreover, on her account, it is a table of those who were actually dismissed, rather than proposals. The s188 duty, of course, relates to the number of employees it is proposed will be dismissed or affected by the dismissals. There was no documentation, such as HR asking business areas to report planned redundancies to one individual keeping track of numbers of employees affected. There were no board minutes showing any record of the Respondent tracking the number of employees affected. When it was put to Ms Friend that this lack of documentation was tricky to reconcile with taking a position that the number of employees affected had been considered and was under 20, she simply responded “no”.[25]Ms Friend’s evidence is that the outcome of the exercise was that 20 employees were dismissed between 3 January and 29 April 2022, and that they were employed by different entities, and she therefore says that the threshold was not met. However, as set out above, the Tribunal determined that it could not put any weight on this because Ms Friend based her evidence on a table in relation to which she cannot say where the data had come from, whether such data is accurate, or how employing entity information has been established.[26]There was simply no documentary evidence before the Tribunal that collective redundancy obligations had been considered by the Respondent before the commencement of these proceedings.[27]The Tribunal are left with a single table put forward at pages 179 and 278, showing what the Respondent says is the outcome of the process, with nothing upon which to assess its provenance, the process for putting it together, the date on which it was created, the accuracy, or the source of the data. There is no documentary evidence put forward by the Respondent at all regarding the number of employees affected by the proposals across the whole of the Respondent’s business in the UK before the outcome was reached.[28]Whilst it is the Claimant’s burden of proof, all Claimants will inevitably be at a disadvantage in relation to the factual background to which they are not privy in relation to the decision making process which has taken behind closed doors. It appears to the Tribunal that the Respondent has sought to take advantage of this. The Respondent states that the Respondent’s redundancy plans were tracked in order to ensure compliance with s188, but put forward not a single witness with knowledge of such a process. As such it is a bare assertion, unsupported by any evidence.[29]The Claimant is at a distinct disadvantage here. However, he is acknowledged even by the Respondent to be a subject matter expert on data, and to be extremely good in this field. Mr Mildenhall has given evidence on this matter. 8 of 18 He has painstakingly tracked names and information through the spreadsheets at pages 269, 272 and the Summary Table put forward by the Respondent at page 278 and done his own research on LinkedIn.[30]In circumstances where the Claimant has given sworn evidence from his own knowledge in relation to his calculations, the Tribunal prefers the Claimant’s evidence. The Claimant’s assessment at paragraph 77(b) of his witness is that at least 45 UK employees were affected. The Tribunal finds this consistent with the scale of the wider cost saving exercise ($400m to 500m) and proposed severance of $200m. The “master spreadsheet” at page 172 was created in March, when the status of the cost cutting had reached a firm proposal in midJanuary. This spreadsheet only covers one business area (that led by Mr Steinmetz), which the Tribunal accepts based on the Claimant’s evidence leaves 1,000 UK staff unaccounted for. The Tribunal considers that the number may well be higher than the 45 identified by the Claimant if the remaining 1,000 UK employees were also considered. It is clear that for 45 employees identified by the Claimant in fact be affected, there must have been a proposal which related to that beforehand. This is in line with Mr Luthersson’s evidence that he formulated a strategy for the area for which he was responsible, which crystallised in early January 2022.[31]The Tribunal finds that the Respondent was simply not keeping track of the number of its employees potentially affected by redundancy proposals, this finding is based on the fact that no evidence has been put forward of such a tracking exercise and the Tribunal considers that if the Respondent had been keeping track it would have adduced evidence of the same. Collective Consultation: The Law[32]Section 188(1) TULR(C)A provides as follows: “where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.”[33]For the purposes of any proceedings under TULR(C)A where an employee is or is proposed to be dismissed, it shall be presumed that he is or is proposed to be dismissed as redundant unless the contrary is proven (section 195(2) TULR(C)A).[34]A redundancy dismissal is a dismissal for any reason “not related to the individual employee concerned or for a number of reasons all of which are not so related” (section 195(1) TULR(C)A).[35]“Employer” is defined in section 295(1) TULR(C)A as follows: “employer, in relation to an employee, means the person by whom the employee is (or, where the employment has ceased, was) employed.” 9 of 18[36]If several associated employers all operate from one set of premises, even if their combined operation can be regarded as one establishment, nevertheless each employer's batch of redundancies must be considered separately (E Green & Son (Castings) Ltd v Association of Scientific, Technical and Managerial Staffs [1984] IRLR 135, EAT). The result is that two sister companies might declare in excess of 20 redundancies at a particular establishment, but if neither company proposes to dismiss more than 19 employees then neither of the companies will become obliged to consult under TULR(C)A. The group as a whole might have declared more than 20 redundancies at the same establishment, but no single employer has declared 20 or more redundancies at that establishment.[37]The obligation for collective consultation is triggered by the proposal, not the number of individuals who are in fact dismissed.[38]The duty to consult does not arise merely because redundancy dismissals are contemplated, nor even because redundancy dismissals are probable, “proposed” means something much more certain and further along the decision-making process than the verb “contemplate”. There must be a 'fixed, clear, albeit provisional intention' to make collective redundancies.[39]The ECJ in UQ v Marclean Technologies SLU (C-300/19) [2022] IRLR 548 ruled that under the Directive, an employer proposing redundancies must look backwards and forwards for 90 days to determine whether there are sufficient redundancies to trigger the collective consultation obligations. Following Marclean, an employer who has proposed fewer than 20 redundancies and then subsequently proposes further redundancies within 90 days (making the total 20 or more) should as far as possible consult collectively with the first group as well as the second (although in practice there may be a limit on how much can be done, depending on how far the first redundancy exercise has progressed).[40]An “establishment” need not have any legal autonomy, nor need it have economic, financial, administrative or technological autonomy' and finally that 'it is, moreover, in this spirit that the Court has held that it is not essential, in order for there to be an “establishment”, for the unit in question to be endowed with a management which can independently effect collective redundancies' (Rockfon A/S v Specialarbejderforbundet i Danmark: C-449/93, [1996] IRLR 168, at [34]). Nor is there a need for geographical separation from the other units and facilities of the undertaking – a particular division of a company operating from a particular warehouse in a much bigger site could itself be an 'establishment': USDAW v Ethel Austin Ltd [2013] IRLR 686. The question of what amounts to an establishment will always be fact specific[41]Where a declaration is made the Tribunal may also make a protective award pursuant to section 189 TULR(C)A. Where an award is to be made it is punitive rather than compensatory. This includes a consideration of the deliberateness of any default. The starting point is that the maximum award of 90 days’ pay should be made unless there are circumstances making it just not to do so. 10 of 18 Collective Consultation: discussion and conclusions[42]Clearly, the evidence before the Tribunal was not perfect, but the Tribunal considered that there was enough evidence before it to reach a conclusion that the balance of probabilities that there was a proposal to dismiss more than 20 employees of the Respondent, within a 90 day period including 29 April 2022.[43]In making this finding, the Tribunal has taken into account that there may be several different employers, but given the scale of the group operation in the UK, the scale of the cost cutting, the Claimant’s analysis of the data, and the evidence given by the Claimant that the Respondent operated as the de facto employer of all UK staff, the Tribunal considers on the balance of probabilities that there was a proposal which affected more than 20 employees of the Respondent. It also notes and takes into account, in making this finding, as per Marclean, that there is an obligation to look backwards as well as forwards so that an employer who has proposed fewer than 20 redundancies and then subsequently proposes further redundancies will be caught by the section 188 obligations.[44]In relation to establishment the Tribunal makes finding based on the evidence of the Claimant, who states that the Respondent operated as a de facto employer for all UK staff, with a consolidated payroll, HR system, organisational chart and style of email address. The Tribunal finds that Respondent’s UK operations were a single establishment.[45]Therefore, the Tribunal finds that the Respondent did propose to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, which included the date on which the Claimant was dismissed on 29 July 2022. As such, section 188 imposed a duty on the Respondent to collectively consult with affected employees including the Claimant. The parties are in agreement that there was no collective redundancy consultation undertaken.[46]The protected period runs from the date of the first dismissal within the relevant 90 period, which the Tribunal finds is 31 January 2022 based on the summary table at page 278. Findings of fact relevant to unfair dismissal[47]Mr Luthersson’s evidence, which the Tribunal accepted, was that he had decided to consolidate the Claimant’s and Mr De Nazareth’s teams in late December 2021 or early January 2022. The decision had been made before a meeting which took place between the Claimant and Mr Luthersson on 14 January 2022. Mr Luthersson informed the Claimant that it would be him or Mr De Nazareth who ran the team (page 92). The Claimant stated that he was unwilling to work for Mr De Nazereth.[48]Ms Friend’s witness statement at paragraph 28 stated that she understood the scenario that the Claimant and Mr De Nazareth should be pooled for redundancy selection purposes had been considered and discounted in 11 of 18 planning. On cross-examination, she was not able to say who had done this just referring to “the business”.[49]Mr Luthersson’s evidence, was clear that if Ms Friend had got the impression that pooling Mr De Nazerth and the Claimant had been considered and discounted by him, that she was incorrect in relation to that. Mr Luthersson’s evidence was very clear about considerations in selecting Mr De Nazereth for the role. Mr De Nazareth made clear to the Tribunal that, behind closed doors, he went through a process of considering who, of the Claimant and Mr De Nazareth, would be best for the role by speaking to stakeholders including Mr Steinmetz. However he did not consider creating a redundancy pool for the purposes of that selection process. One of those stakeholders with whom Mr Luthersson had discussions with preferred the Claimant for the consolidated role.[50]Around this time, Mr Luthersson’s decision was made that Mr De Nazareth would take the role leading the consolidated team. This finding is based on Mr Luthersson’s evidence regarding the timeline of his discussions with stakeholders and the content of the discussions he had with the Claimant.[51]Another meeting took place on 17 January 2022 in which Mr Luthersson said that there were other vacancies available with Chris Bernard and Mr Steinmetz. When the Claimant said that there was not enough information, Mr Luthersson stated he would create something to show the Claimant (page 93).[52]The Tribunal finds that on 21 January 2022, in another one to one meeting between Mr Luthersson and the Claimant, Mr Luthersson informed the Claimant that Mr Steinmetz had made decision that Mr De Nazareth would manage all ‘Go To Market’ reporting going forward. Mr Luthersson denied that this had been said. However the Tribunal preferred the Claimant’s account because it was consistent with the Claimant’s contemporaneous note at page 95 and with Mr Luthersson’s oral evidence that Mr Steinmetz in fact had preferred Mr De Nazareth for the role. In discussions regarding whether the Claimant could take another role within the consolidated team, the Claimant said that he did not want to work for Mr De Nazereth because of his personality and behaviour.[53]The Claimant called Mr Bernard on 22 January 2022 regarding roles but was not given any clarity and was left with the impression that this was a dead end. This finding is based on the Claimant’s Witness Statement.[54]On 1 February 2022 Mr Luthersson led a team presentation which included a draft email from Mr Steinmetz confirming team to be ‘led by Mr De Nazareth (pages 97 to 99).[55]In a further one to one meeting between Mr Luthersson and the Claimant on 4 February 2022, in discussions about the Claimant’s role, Mr Luthersson stated he could not confirm that the Claimant’s role was redundant. In discussions regarding alternative roles within the Respondent the Claimant told Mr Luthersson that he “had no reason to consider another role as for the purposes 12 of 18 of the conversation he had told me that my role wasn't being made redundant” (page 100).[56]On 8 February 2022, a meeting took place between Mr Luthersson, the Claimant and Mr De Nazereth in which Mr De Nazereth presented organisational chart which showed Mr De Nazereth as heading the new consolidated team, pages 102 to 104.[57]On 28 February 2022 the Claimant’s team was moved to Mr De Nazerth’s remit.[58]On 8 March 2022 in another one to one, Mr Luthersson showed the Claimant a role in Mr Bernard’s team which would be a sole contributor role. This was not an offer of the relevant role, both witness statements refer to “showing” the Claimant the job specification. This cannot be said to be an offer of a role but merely a discussion regarding the possibility of the role. It is clear that the Claimant expressed concerns regarding the funding and the future of the role in that discussion page 108. In a further discussion on 30 March 2022, the Claimant said he would not be interested in it unless there was an element of progression page 110.[59]On 31 March 2022, the Claimant attended a meeting with Mr Luthersson and Ms Friend and was formally placed at risk of redundancy. In this meeting the Claimant stated that Mr Lutherrson had clearly told him that Mr De Nazereth would be getting the job in mid January and for that reason the process was unfair. Ms Friend stated that she would respond in two weeks but did not do so. This finding is based on the Claimant’s witness evidence and his contemporaneous note at page 129 regarding what was said.[60]In this meeting, the Claimant was told he would be responsible for searching for alternative roles on the internal career website. The Claimant did so, but was not able to find any suitable alternative roles so did not apply for any.[61]On 4 February 2022, the Respondent’s legal team sent Mr Luthersson and email which stated “I have received notice that your direct report James Mildenhall, is leaving the company” (page 130).[62]On 13 April 2022, the Claimant attended a further consultation meeting with Ms Friend and Mr Luthersson in which he gave more detailed information regarding why he considered that the decision to make him redundant was predetermined.[63]On 26 April 2022, the decision to make the Claimant redundant was communicated to him. Unfair dismissal: the Law[64]The reason for the dismissal was redundancy which is a potentially fair reason for dismissal under section 98 (2) (c) of the Employment Rights Act 1996 (“the Act”).[65]The statutory definition of redundancy is at section 139 of the Act. This provides that an employee shall be taken to be dismissed by reason of redundancy if the 13 of 18 dismissal is wholly or mainly attributable to (section 139(1)(b)) “the fact that the requirements of (the employer’s) business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish”.[66]We have considered section 98 (4) of the Act which provides “…. 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”.[67]In terms of whether it was fair to dismiss C on grounds of redundancy, it was held in Buchanan v Tilcon Ltd [1983] IRLR 417 that an employer has to prove that their method of selection was fair in general terms and that it was applied reasonably in the case of the specific employee in question.[68]Guidance as to a fair consultation process are set out by the EAT in Williams v Compair Maxam Ltd [1982] IRLR 83 are relevant:68.1 Were the selection criteria chosen objectively and applied fairly?68.2 Were the employees warned and consulted about the redundancy?68.3 Was the union (or employee representatives) consulted as to the fairest means of dealing with the redundancy?68.4 Was there any investigation of whether alternative work could be offered?[69]In R v British Coal Corporation ex. P. Price [1994] IRLR 72 it was held at paragraph 24: “proper consultation involves consultation when proposals are in a formulative stage, adequate information on which to respond, adequate time in which to do so, and conscientious consideration of responses is given”.[70]The obligation to consult at an early stage is heightened where there is a pool of one and(a) the reasons for confining the pool are irrational; or(b) the size of the pool leads inevitably to dismissal: Moogane v Bradford Teaching Hospitals NHS Foundation Trust and anor [2023] IRLR 44.[71]As per Silber J in Capita Hartshead Ltd v Byard [2012] IRLR 814, the applicable principles where the issue in an unfair dismissal claim is whether an employer has selected a correct pool of candidates who are candidates for redundancy are that:71.1 “It is not the function of the [Employment] 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” (per Browne-Wilkinson J in Williams v Compair Maxam Limited [1982] IRLR 83); 14 of 1871.2 “…the courts were recognising that the reasonable response test was applicable to the selection of the pool from which the redundancies were to be drawn” (per Judge Reid QC in Hendy Banks City Print Limited v Fairbrother and Others (UKEAT/0691/04/TM);71.3 “There is no legal requirement that a pool should be limited to employees doing the same or similar work. The question of how the pool should be defined is primarily a matter for the employer to determine. It would be difficult for the employee to challenge it where the employer has genuinely applied his mind [to] the problem” (per Mummery J in Taymech v Ryan EAT/663/94);71.4 the Employment Tribunal is entitled, if not obliged, to consider with care and scrutinise carefully the reasoning of the employer to determine if he has “genuinely applied” his mind to the issue of who should be in the pool for consideration for redundancy; and that71.5 even if the employer has genuinely applied his mind to the issue of who should be in the pool for consideration for redundancy, then it will be difficult, but not impossible, for an employee to challenge it.”[72]The ET must not substitute its decision for that of the employer: Capita Hartshead Ltd v Byard [2012] IRLR 814; Family Mosaic Housing Association v Badmos EAT 0042/13.[73]An employer who adopts a pool of one without prior consideration as to the size of the pool does not necessarily act unreasonably; rather the entirety of the process must be considered: Wrexham Golf Co Ltd v Ingham EAT 0190/12.[74]Gwynedd County Council v Barratt [2021] EWCA Civ 1322, the CA confirmed that where the original selection for redundancy is in accordance with a fair procedure, the lack of any appeal or review procedure does not itself render a redundancy dismissal unfair. Applying the law to the Facts: Unfair Dismissal[75]The parties agree that the reason for dismissal is redundancy, consolidation of the teams was a sensible suggestion.[76]The Tribunal makes a finding that the Respondent did not turn its mind to the appropriate pool for selection for the new role heading the consolidated team. The reason for this finding is Mr Luthersson’s evidence, he was clear that if Ms Friend had got the impression that pooling Mr De Nazerth and the Claimant had been considered and discounted, that she was incorrect in relation to that. Mr Luthersson’s evidence was very clear about considerations in selecting Mr De Nazereth for the role, but it was clear to the Tribunal that no thought had been given to the appropriate pool for selection. The Respondent simply had not turned its mind to it. Instead it had reached a decision regarding who should lead the team behind closed doors and then presented it to the Claimant as a decision which had already been made (in the meeting on 21 January 2022).[77]It is not the Tribunal’s role to substitute the Respondent’s decision on pooling with its own. In circumstances where the Respondent had not turned its mind to pooling Mr De Nazereth and the Claimant, the Tribunal finds this was outside 15 of 18 the reasonable range of responses. The Tribunal has regard to the fact that the Claimant was put forward as a possible candidate for the role by Mr Luthersson in the meeting on 14 January 2022, and stated in cross examination that one stakeholder preferred the Claimant for the role. In those circumstances it was outside the range of reasonable responses not to consider the Claimant’s inclusion in the pool alongside Mr De Nazereth.[78]The Tribunal finds that the decision regarding whether the Claimant’s role was redundant, and that Mr De Nazerth would lead the consolidated team was determined before the meeting on 21 January 2022. It was pre-determined in the sense that Mr Luthersson had made a decision and informed the Claimant of the outcome. It was not presented at a formulative stage for feedback from the Claimant. A final decision had already been made.[79]The Claimant was not given any explanation as to why the combined role had been given to Mr De Nazareth. He was left in the dark regarding the basis on which the selection had been made, such as the stakeholder feedback which Mr Luthersson stated in cross examination had been taken in relation to both the Claimant and Mr De Nazereth’s suitability for the new role leading the combined team. Since the decision had been pre-determined, and presented to the Claimant as already having been made, without any information as to how that decision had been reached, the Claimant could not be expected to meaningfully respond to it. He was not given adequate information on which to respond, such as being told the requirements of the consolidated role, or the basis for selection.[80]The Employer’s actions must be within the range of reasonable responses. Effectively to say that if there are alternative roles for which the Claimant is suitable, the Respondent must consider the Claimant. The Respondent’s considered the Claimant for a role in the structure under Mr De Nazereth but did not offer this to the Claimant because he had indicated he would not work for Mr De Nazereth.[81]There were also discussions about a potential role working for Mr Barnard, but it was not put on the portal or offered to the Claimant. The Respondent indicates that this role could have been created specifically for the Claimant at the same pay, if the Claimant had expressed an interest in it. However, it was never put to the Claimant in those terms. These discussions were not well advanced and the Tribunal accepts the Claimant’s view that this was never put to him as a certain proposition.[82]Nevertheless, the Tribunal considers that the Respondent took steps within the reasonable range of those an employer might take in the circumstances. The reasonable steps in this case were to indicate two roles within the consolidated team under Mr De Nazareth. The Claimant in effect took the position that there were no other available roles which were suitable for him. There is no obligation on the Respondent to create one.[83]The Tribunal’s finding is that the Claimant’s dismissal was unfair because the Respondent did not properly turn its mind to the pool for selection, instead predetermining that Mr De Nazereth would take the role. The Respondent did not 16 of 18 adequately consult with the Claimant, he was not consulted at a formulative stage, and not given adequate information to respond.
REMEDY
[84]There is no dispute in relation to the calculation of losses.[85]The Claimant takes the position that because of a lack of any evidence, other than some vague comments by Mr Luthersson as to Mr De Nazareth working at a ‘higher level’, there is no way of determining what the outcome of a pool of two fairly conducted would have been, and therefore there should be no Polkey reduction, or that any such reduction is kept de minimis. The Respondent’s position is that the Claimant would not have been given the role, even if he had been pooled with Mr De Nazareth for it.[86]The Tribunal must consider the likelihood that the employee would still have been dismissed in any event had a proper procedure been followed.[87]A Tribunal’s task when assessing compensation for future loss of earnings will almost inevitably involve a consideration of uncertainties. Any assessment of future loss is by way of prediction and therefore involves a speculative element. A tribunal’s statutory duty may involve making such predictions and tribunals cannot be expected, or even allowed, to opt out of that duty merely because their task is a difficult one and may involve speculation.[88]The Tribunal considers that there was a chance, albeit a small chance that the Claimant would have been successful in obtaining the role leading the consolidated team. This is based on Mr Lutherson’s evidence that there was one stakeholder who preferred the Claimant for the role. The Claimant lost the opportunity to put himself forward during this process. Further Mr Luthersson’s position was that he was very keen to retain the Claimant in an alternative role and had the Claimant shown an interest, he could have created a role within his own budget. Further a role with Mr Barnard could have been created for the Claimant, he had the budget for it and would have employed the Claimant at the same remuneration if the Claimant had more actively pursued it. The Tribunal finds that the effect of the pre-determined process was that the Claimant’s lack of interest in particular in the opportunity with Mr Barnard was due to the loss of trust by the Claimant in the Respondent due to the predetermined process coupled with the absence of an actual offer of an alternative role. Had the process been undertaken fairly, given the Respondents evidence that it wanted to retain the Claimant, taking the chance of being successful in leading the new combined team together with the chance of being redeployed, the Tribunal assess it as a 65% chance that the Claimant would have remained employed by the Respondent if a fair process had been followed. The Tribunal does not asses this as 100% because it considers that there is still a chance that the Claimant would not have been interested in the redeployment with Mr Barnard even without the loss of trust because of his concerns around it being a sole contributor role (ie. without a team) and the lack of potential for progression. 17 of 18[89]The Respondent does not pursue an argument that the Claimant failed to mitigate in relation to external roles but argues that the failure to pursue roles internally was an unreasonable failure to mitigate. The Claimant did take active steps search on the Respondent’s portal and found no reasonable role. The Tribunal considers the Claimant’s approach regarding internal roles to have been reasonable against a background of a loss of trust caused by the unfair process and the absence of a clear formal offer of employment.[90]No ACAS uplift was sought in relation to the unfair dismissal award.[91]In relation to the protective award, the Tribunal does not consider that the Respondent’s argument that it had a genuine and reasonable belief that the threshold was not met can be sustained without a witness to evidence such belief. Ms Friend’s evidence being clear that she had no knowledge upon which to base such belief regarding whether the threshold had been met and Mr Luthersson being in the same position.[92]The principle is that protective awards are punitive and should be for the maximum period unless there are circumstances making it just not to do so. The Tribunal concludes that is no reason to depart from the maximum period.
BACKGROUND
[1]By a claim form presented on 30 June 2022 the Claimant brought the following complaints:a. unfair dismissal;b. a redundancy payment;c. a protective award for failure to consult under s. 188 of Trade Union and Labour Relations (Consolidation) Act 1992 (“TULR(C)A”).[2]A liabilities and remedies hearing took place before the Tribunal in Exeter in person on 17 to 19 May 2021. The Claimant’s claim for a redundancy payment was formally withdrawn at the beginning of the hearing and was therefore dismissed upon withdrawal.[3]The Claimant’s complaints of unfair dismissal and a failure to collectively consult were upheld and the Tribunal ordered the Respondent to pay the Claimant a compensatory award of £63,890.46 (gross) and a protective award of £53,742 (gross).[4]A corrected judgment was sent to the parties on 31 July 2023, and written reasons were sent to the parties on 3 August 2023 (the “Written Reasons”).[5]The Respondent submitted an appeal of the Tribunal’s decision on dated 11 September 2023. Ground One of the Notice of Appeal set out the following. “The Claimant made a number of important concessions, none of which were recorded by the ET: i. The Respondent had fully complied with its disclosure obligations and a specific disclosure request. The Claimant accepted the Respondent’s assertion that there are no references to redundancies in any Board meetings nor were there any strategy documents indicative of a proposal to dismiss 20 or more; ii. The Respondent did not have an overall redundancy proposal with a headcount target imposed from above; iii. Whilst each business was given a cost reduction figure, it was up to the individual areas to decide how to make those costs; iv. Para.11 of Mr Luthersson's witness statement was true: “It is important to note that the focus of the reorganisation was about cutting costs and driving efficiency and were never about reducing headcount. I was given a target budget that included a costs reduction figure that I had to meet and I then had to determine how to do this. As such, when I was looking at cutting costs I considered a number of different ways I could do this including process automation, funding for people from other parts of the business, cancelling contractors, cancelling any open vacancies, moving the location of roles, looking at natural reduction in headcount and not backfilling positions from people who left, and looking at other areas where budgets are assigned to see if we could cut costs there (e.g. travel budgets, overtime payments). Of course, as part of the costs cutting exercise, I also had to consider redundancies 2 of 7 but this was really a last resort and there was never a proposal that a certain number of people or roles needed to be deleted; it was always just about financial savings. This meant that proposals for any redundancies came in a piecemeal fashion from the bottom up (i.e. from me to Mike) rather than a top-down directive. This is also why there is no record of any comprehensive strategy or planning documentations on redundancies because it was fundamentally a cost cutting exercise, and there was no formal redundancy proposal per se;” v. There were multiple strands of redundancy consultations which had nothing to do with the restructure (e.g. by reason of outsourcing); vi. Several individuals in his list of 45 personnel were not proposed to be dismissed as redundant. Some transferred into other businesses. The list of 45 comprised individuals from the Respondent as well as two discrete legal entities employing many of the UK employees: Micro Focus Software Ltd and Autonomy Systems Ltd.[6]At the sift stage, HHJ Barklem made the following order dated 11 January 2024: 1. “This prospective appeal is before me for sift. Ground one asserts that the ET failed to record (and, inferentially, to heed) certain concessions said to have been made by the Claimant. The manner in which those concessions were said to have been before the ET is not stated. The ground also asserts the truth of para 11 of Mr Luthersson’s witness statement, again without stating the basis upon which the EAT should take this assertion as read. 2. From the Written Reasons it appears that the Appellant faced evidential difficulties due to the inability of the witness Mrs Friend to substantiate or explain evidence which she had been called to given and of which she had little or no personal knowledge. 3. It is within the unique knowledge of the ET, and not the EAT to explain how the material asserted to have been overlooked, if accepted, alters the overall evidential position in the Appellant’s favour. 4. It seems to me that the more logical step for the Appellant to have taken would have been to seek reconsideration. The ET could then have explained the reasons for it having taken the view that it did, and state whether it agrees with the assertions advanced on appeal.”[7]The Respondent applied for reconsideration on 31 January 2024, with further clarification provided on 8 February 2024. The Claimant provided a response on 23 February 2024.[8]The Tribunal heard submissions from counsel for each party and considered a Hearing Bundle of 439 pages.
THE LAW
[9]Under Rule 71 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (the “Tribunal Rules”) an application for reconsideration under Rule 70 must be made within 14 days of the date on which the decision (or, if later, the written reasons) were sent to the parties. 3 of 7[10]Under Rule 5 the Tribunal may, on its own initiative or on the application of a party, extend or shorten any time limit specified in the Rules or in any decision, whether or not (in the case of an extension) it has expired.[11]The grounds for reconsideration are only those set out in Rule 70, namely that it is necessary in the interests of justice to do so.[12]The Employment Appeal Tribunal (“the EAT”) determined in Outasight VB Ltd v Brown 2015 ICR D11, EAT that: “The interests of justice have thus long allowed for a broad discretion, albeit one that must be exercised judicially, which means having regard not only to the interests of the party seeking the review or reconsideration, but also to the interests of the other party to the litigation and to the public interest requirement that there should, so far as possible, be finality of litigation.”[13]The EAT in Trimble v Supertravel Ltd [1982] ICR 440 decided (in relation to a previous but analogous version of the rules) that if a matter has been ventilated and argued then any error of law falls to be corrected on appeal and not by review. The same principles were applied by the EAT in Ebury Partners UK Ltd v Acton Davis 2023 IRLR 486, EAT, per HHJ Shanks: “The employment tribunal can therefore only reconsider a decision if it is necessary to do so "in the interests of justice." A central aspect of the interests of justice is that there should be finality in litigation. It is therefore unusual for a litigant to be allowed a "second bite of the cherry" and the jurisdiction to reconsider should be exercised with caution. In general, while it may be appropriate to reconsider a decision where there has been some procedural mishap such that a party had been denied a fair and proper opportunity to present his case, the jurisdiction should not be invoked to correct a supposed error made by the ET after the parties have had a fair opportunity to present their cases on the relevant issue. This is particularly the case where the error alleged is one of law which is more appropriately corrected by the EAT.”[14]More recent case law suggests that the "interests of justice" ground should not be construed as restrictively as it was prior to the introduction of the "overriding objective" (which is now set out in Rule 2). This requires the tribunal to give effect to the overriding objective to deal with cases fairly and justly. As confirmed in Williams v Ferrosan Ltd [2004] IRLR 607 EAT, it is no longer the case that the "interests of justice" ground was only appropriate in exceptional circumstances. However, in Newcastle Upon Tyne City Council v Marsden [2010] IRLR 743, the EAT confirmed that it is incorrect to assert that the interests of justice ground need not necessarily be construed so restrictively, since the overriding objective to deal with cases justly required the application of recognised principles. These include that there should be finality in litigation, which is in the interest of both parties. TIME LIMITS[15]The reconsideration application was made on 31 January 2024, which is outside of the 14 day time limit from the date of the written reasons (3 August 2023) set out in 4 of 7 Rule 71 of the Tribunal Rules. However, the Tribunal exercised its discretion to extend time for the reconsideration application in light of the Order of the EAT suggesting such application be made. DISCUSSIONS AND CONCLUSIONS i. The Respondent had fully complied with its disclosure obligations and a specific disclosure request. The Claimant accepted the Respondent’s assertion that there are no references to redundancies in any Board meetings nor were there any strategy documents indicative of a proposal to dismiss 20 or more;[16]The Tribunal did not make a finding regarding whether or not the Respondent had complied with its disclosure obligations and a specific disclosure request. This was not a matter that the Tribunal was asked to determine. There were discussions at the beginning of the hearing as to whether there were any preliminary matters to be dealt with, and no application made in this respect. As such it was not a matter which fell to be determined by the Tribunal.[17]The Tribunal does not agree that the Claimant accepted the Respondent’s assertion that there are no references to redundancies in any Board meetings nor were there any strategy documents indicative of a proposal to dismiss 20 or more. The Tribunal’s notes of cross examination accord with that put forward by the Claimant, namely that the Claimant accepted that if there were no documents which confirmed a certain headcount reduction was required then as a matter of logic, there would be nothing to disclose. This is not an acceptance that there are no such documents, merely an acceptance of a point of logic that if there are none, they could not be disclosed.[18]The core assertion being made by the Respondent here is that there were no internal documents created by the Respondent which referred to a proposal to dismiss 20 or more employees. The Tribunal based its decision on the evidence it had before it, and as such, on the basis that there were no such Board minutes or strategy documents regarding any redundancy proposals, or setting out the number of employees potentially affected by redundancy proposals.[19]The Tribunal considers that this matter was not overlooked by it but rather expressly considered in its decision. This referred to in the Written Reasons:a. in paragraph 23, which refers to a complete lack of factual evidence put forward by the Respondent;b. in paragraph 24, which states “There were no board minutes showing any record of the Respondent tracking the number of employees affected”;c. in paragraph 31, which sets out the Tribunal’s finding that the Respondent was simply not keeping track of the number of employees potentially affected by the redundancy proposals, if it had been, it would have adduced evidence of the same.[20]The Tribunal considered that, even in the absence of a board minute or strategy document which expressly set out a proposal to dismiss 20 or more employees, on the balance of probabilities, based on the totality of the evidence before the Tribunal, 5 of 7 there had been such a proposal. This is set out at paragraph 30 of the Written Reasons. ii. The Respondent did not have an overall redundancy proposal with a headcount target imposed from above; iii. Whilst each business was given a cost reduction figure, it was up to the individual areas to decide how to make those costs;[21]These two points are accepted as being a fair representation of the position before the Tribunal. The Tribunal found that what had been imposed from above was a requirement to remove $400 to $500million of gross annual recurring cost, with a budget of $200 million for settlement packages in relation to associated redundancies (paragraph 16 of the Written Reasons). Internal functions were tasked with the details of how they would make the relevant costs savings for their functions, but it was inevitable that redundancies would be required to make such a large saving (paragraph 17 of the Written Reasons). As reflected in the written reasons, these points were taken into account by the Tribunal in making its determination.[22]The Tribunal found that the cost reduction figure announced in September 2021 had, by mid-January 2022, crystalised into a proposal to dismiss more than 20 employees within a 90 day period, see paragraphs 30 and 42 of the Written Reasons. iv. Para.11 of Mr Luthersson's witness statement was true[23]This is accepted insofar as it is summarised by points ii and iii above. The Tribunal made a finding that this was a cost cutting exercise of such proportion that significant redundancies were inevitable, with this being reflected by the budget of $200 million for settlement packages (paragraph 17 of the Written Reasons).[24]The last sentence quoted from Mr Luthersson’s statement refers to there being no formal redundancy proposal “per se”. The Tribunal accepted Mr Luthersson’s evidence that in November 2021, there had been no firm proposal (paragraph 20 of the Written Reasons), however the plans had solidified and crystalised to form a proposal for Mr Luthersson’s team by mid January 2022 (paragraph 21 of the Written Reasons). As such the last sentence was true at a certain point in time, but this changed as plans crystallised, as set out in the Tribunal’s findings of fact. v. There were multiple strands of redundancy consultations which had nothing to do with the restructure (e.g. by reason of outsourcing);[25]This is not a fair representation of the facts before the Tribunal. The Respondent asserts that this was not disputed in cross examination. The Claimant was asked in cross examination whether he was aware that there were other consultations going on which may have led to redundancies. He stated that he believed that there were. The Tribunal’s note of this does not record a reference in cross examination to this being nothing to do with the restructure or being by reason of outsourcing.[26]This line of questioning was not then linked back to the Claimant’s analysis of 45 individuals. Nor did the Respondent adduce evidence showing that the Claimant had 6 of 7 incorporated individuals subject to other consultations within his table. As such, the Tribunal considers that this assertion would not change the findings of fact made by the Tribunal. vi. Several individuals in his list of 45 personnel were not proposed to be dismissed as redundant. Some transferred into other businesses. The list of 45 comprised individuals from the Respondent as well as two discrete legal entities employing many of the UK employees: Micro Focus Software Ltd and Autonomy Systems Ltd.[27]It is accepted that the Claimant’s evidence related to 45 individuals, which included individuals who were being considered for redeployment or transfers. This was taken into account in the findings made by the Tribunal (see paragraph 30 of the Written Reasons) that more than 20 employees were proposed to be dismissed as redundant.[28]The Respondent’s “summary table” referred to different employing entities, however in the absence of any witness who could explain its provenance or accuracy, the Tribunal determined that it could not put any weight on the table (see paragraphs 25 and 27 of the Written Reasons). The Tribunal took into account that there may have been different legal entities as employers, however the Tribunal found that the Respondent operated as the de facto employer of all UK staff, see paragraph 43 and 44 of the Written Reasons.
OUTCOME
[29]For the reasons set out above, the Tribunal considers that there is no reasonable prospect of the decision being varied or revoked. The assertions put forward by the Respondent were taken into account at the time and/or would not have changed the Tribunals findings of fact and determination.
CONCLUSIONS
[30]There are three stages to be applied:a. finding whether the Respondents have behaved unreasonably in the way the proceedings have been conducted and/or whether there were no reasonable prospects of success;b. considering whether it is appropriate to make a costs order; andc. considering whether the Tribunal should exercise my discretion in making such an order. Stage 1: no reasonable prospect of success[31]To make a finding that a response has no reasonable prospect of success is a highbar. The scope of the “range of reasonable responses” test in an unfair dismissal is relatively broad. The Tribunal rejected the Respondent’s defence, but that is not the same as finding that it had no reasonable prospect of succeeding.[32]The Tribunal considered that it might be correct to say that if the totality of evidencehad been properly analysed by the Respondent, the merits would have been assessed as more likely to fail than to succeed. However the Tribunal considered it would be incorrect to say that there were no reasonable prospects of success. Arguable points were made in relation to selection pools, consultation, and in relation to the Claimant’s ability to meet the burden of proof regarding collective consultation. It is also of importance that there was a 35% Polkey reduction made by the Tribunal. The Claimant’s application for costs does not go any further under this head, as it cannot be said that there were “no reasonable prospects” of defending the claim. Stage 1: unreasonable conduct[33]The Tribunal considered that, whilst parties are encouraged to cooperate with oneanother, there is no obligation to provide documents in response to a request for voluntary disclosure. In the ordinary course, parties wait until the issues have been clarified at a preliminary hearing, and a disclosure order has been made by the Tribunal. Therefore, the Respondent’s conduct in this respect was not unreasonable.[34]In relation to the evidence of Lucy Friend, it was clear that a statement in writtenwitness evidence that the “summary table” put forward by the Respondent was accurate, was not underpinned by any personal knowledge of how it was compiled or which data it was drawn from, or indeed whether that data was accurate. 6 of 8 On that basis, the Tribunal was not able to put any weight on the table or indeed the evidence of Ms Friend that it was accurate. However, there was no finding of dishonesty or similar. It is often the case that witnesses undermine their written witness statement in cross examination, indeed that is the aim of the cross examination in most cases. Looking at all the circumstances of the case, the Tribunal did not consider this conduct to be unreasonable.[35]In relation to the evidence of Sigurjon Lutherson, the Claimant says that it wasunreasonable conduct to have put a contradictory position forward regarding the need for a selection pool. On the one hand the Respondent’s position was that the Claimant and Mr De Nazareth were not comparable, but then Mr Lutherson gave evidence that he had sought stakeholder feedback as part of a comparison exercise between the two. This evidence, which was not supportive of the Respondent’s case on selection pooling, was taken into account when determining liability. Looking at all the circumstances of the case, the Tribunal did not consider this conduct to be unreasonable.[36]With regard to the way in which the proceedings were conducted by the Respondent,the Tribunal made a finding above that the following conduct of the Respondent was unreasonable:a. failing to provide an unredacted version of the “master spreadsheet” by 18January 2023 as required by the order of EJ Livesey on 7 December 2022 or on request of the Claimant after that and thereby requiring the Claimant to make the specific disclosure application of 7 April 2023. It should have been clear to the Respondent that such redactions were entirely inappropriate;b. failing to comply with paragraph 10.1.1 of the CMO following the hearing on 7December 2022, which required disclosure of the relevant establishments. This was ordered to take place by 21 December 2022, but was not disclosed by the Respondent until 29 March 2023, the day on which witness statements were due to be exchanged. Naturally the Claimant assumed that the Respondent had complied with the order and that it could rely on the table disclosed on 21 December 2022, which contained no reference to differing establishments, which gave rise to the natural assumption that establishment was not in dispute; andc. not providing further documentation voluntarily which was subject to the ongoingduty of disclosure (i.e. the unredacted master spreadsheet and contracts of employment sought), thereby requiring the Claimant to make the specific disclosure application of 7 April 2023. Stage 2: Is a Costs Order Appropriate?[37]Having found that some of the conduct on behalf of the Respondents wasunreasonable, there is no requirement for this Tribunal to award costs. There are a number of factors to consider, including the nature, gravity and effect of the unreasonable conduct, although there is no principle that costs should only be awarded where they can be shown to have been incurred by specific instances of unreasonableness. 7 of 8[38]The Tribunal considered the circumstances as a whole, including the mattersoutlined above and the Respondent’s genuine engagement in settlement discussions with the Claimant.[39]In this case, the Tribunal find that it is appropriate to award costs against theRespondents in respect of the conduct outlined above. The conduct outlined above created additional unnecessary cost for the Claimant in that he needed to:a. amend his witness statement in light of new information regardingestablishment and an unredacted master spreadsheet;b. make a further specific disclosure application on 7 April 2023;c. prepare for and attend the additional Preliminary Hearing on 10 May 2023.[40]In deciding whether costs should be awarded, the Tribunal is permitted to take intoaccount the Respondent’s ability to pay. However, there were no submissions or evidence in respect of their ability to pay and, therefore, this does not affect the decision in finding that it is appropriate to award costs. Stage 3: Should the Tribunal Exercise its Discretion?[41]Having found that there was unreasonable conduct and that it is appropriate to awardcosts, the Tribunal is still required to address its mind to whether it should exercise its discretion in awarding costs in this matter. In other words, the Tribunal must decide whether it is just to exercise the power to award costs. The basic principle is that the purpose of an award of costs is to compensate the party in whose favour the order is made, not to punish the party ordered to pay the costs. Looking at all the evidence in the round, the Tribunal find that is just to award costs in this matter to take into account the conduct outlined above and the effect on the Claimant. Given the nature of the findings of unreasonableness when considered in the context of the case overall, the Tribunal makes an award of costs in the sum of £2,000 plus VAT.[42]Whilst the Claimant submitted a costs schedule in the sum of £5,032 plus VATdealing solely with what was said to be the disclosure issue, the Tribunal has discounted this because it has found the Respondent’s conduct prior to the hearing of 7 December 2022 not to be unreasonable.