Mrs Joanne Allan v Oakley Builders and Groundwork Contractors Ltd: 1403798/2018
EMPLOYMENT TRIBUNALS
Case No 1403798/2018
Between
Mrs Joanne AllanClaimantOakley Builders and Groundwork Contractors LtdRespondent
Before
Employment Judge HousegoMs J Davies for claimantMr S Bromige (instructed by Counsel) for respondentDate 27 November 2019
JUDGMENT
[1]The claims for age discrimination and unfair dismissal are dismissed.[2]The claim for a redundancy payment is to be relisted for a 1 hour hearing on the first open date after 42 days, if not resolved by then.
REASONS
[1]Ms Allan claims unfair dismissal, a redundancy payment and age discrimination, following her dismissal on 24 August 2018.[2]The law is well known. Redundancy is a potentially fair reason for dismissal1. It is not disputed that this was the reason. Whether it is fair or not is an issue where there is no burden or standard of proof and is matter for the Tribunal’s judgment in all the circumstances of the case2. Age is a protected characteristic3 and discrimination on that basis is unlawful4. Such discrimination can be justified if it is in pursuit of a legitimate aim and S98(2) Employment Rights Act 1996. Applying S98(4) of the Employment Rights Act 1996 Equality Act S 5[4]Equality Act S13 is proportionate5, but that is not said to apply in this case. The claimant must find a comparator6, and Ms Allan chose her colleague Ms Wise, who was not dismissed. As it is asserted that the dismissal was by reason of unlawful discrimination the Tribunal must be satisfied that in no sense whatsoever was the dismissal tainted by such discrimination. For the discrimination claim, it is for the claimant to show reason why there might be discrimination7, and if he does so then it is for the employer to show that it was not. Other cases are referred to below. 3. The Tribunal heard evidence from Ms Allan, and from Ms Hamley (who manages the office) and from Ms Harbin, not employed but the partner of Mr Wise, the director of the respondent, who also gave evidence. All the witnesses were cross examined and the Tribunal asked them questions. Both representatives made submissions, the substance of which appears in the findings below. 4. Ms Allan worked for Oakley Builders and Groundwork Contractors Ltd as an administrative assistant. She started on 09 May 2016. She accepts that she was told in her interview that in the event of there being a redundancy situation there would be a “last in first out” method of selection. There was no redundancy dismissal before her own dismissal. There were three other workers in the office and an office manager. Mr Wise runs the company. His daughter was one of the other administration assistants. She started work as an employee before Ms Allan. (She had started in 2013 and had a break in 2014, but resumed her employment in 2015, so about 10 months before Ms Allan started).[5]Ms Harbin is involved in the company, but not employed by it. In December 2017 she said that there might have to be redundancies. It is agreed that at that time she said that this would be on a “last in first out” basis. This was no surprise as that was what Ms Allan had been told when she joined. Nothing happened at that time.[6]On 19 July 2018 there was a cost-cutting exercise put in place. On 30 July 2018 there was further discussion. There would have to be more savings. Ms Allan offered to stop working on a Friday. This was not acceptable because that was the company’s busiest day. She declined to go down to 2 days a week at that time: it was put to her.[7]On 02 August 2018 Ms Hamley came into the office and spoke to Ms Allan, Ms Wise and Ms Taggart to say that one person would be made redundant. She asked for volunteers. No one volunteered. The same day Ms Hamley telephoned the other person who worked in the office, Ms Zab, who was on holiday in America, to have the same discussion. She did not want to volunteer for redundancy either.[8]The only substantial dispute of fact it that Ms Allan says that she then offered to go down to 2 days, and that her offer was declined. The respondent says that there was no such offer. The Tribunal does not find it 5 Equality Act S13(2) 6 Equality Act S23(1) 7 Igen v Wong [2005] ICR 931, Madarassy v Nomura International plc [2007] EWCA Civ 33, Laing v Manchester City Council [2006] I.C.R. 159, and most recently Ayodele v Citylink Ltd & Anor [2017] EWCA Civ 1913 necessary to resolve this difference, for the reasons that follow, and as it would still leave a .4 of a full time equivalent (“FTE”), when it is agreed that the redundancy situation was to remove 1 FTE from the office.[9]Ms Hamley was said to have been in the pool for selection, but as she had been there a long time, and last in first out was being applied, there was no difficulty for her in speaking to the others. Mr Wise soon told her she would not be made redundant.[10]By letter dated 09 August Ms Allan was given 2 weeks’ notice of the termination of her employment, and her employment ended on 24 August 2018.[11]There are a number of matters agreed by Ms Allan. She agrees that there was a redundancy situation, she says that Ms Wise is her comparator, she accepted that Ms Wise had worked for the respondent for longer than she had done, and accepted that there is now an admin staff that is 1 FTE fewer than when she worked there.[12]Ms Allan points to the disparity in age between her and the two who were retained (Ms Wise and Ms Zab), who are in their 20s. Ms Hamley was the manager, and is older, but was told early on that she would not be made redundant. Ms Allan attributes her dismissal to the age disparity between her and Ms Wise (Ms Zab having been employed for much longer).[13]Counsel for the respondent submitted that Ms Wise was not a true comparator and submitted that she was not someone where there was “no material difference between the circumstances relating to each case”. He submitted that without a comparator the discrimination claim had to fail. The Tribunal did not agree. Ms Allan and Ms Wise did similar work in the same office, and that one worked 3 or 4 more hours in a week, and that one had a slightly higher pay rate (£1.50 or 50p an hour) is not material. The claimant and her comparator do not have to be identical.[14]The Tribunal does not find this to have been age discrimination or unfair, for the following reasons.[15]First, that a protected characteristic is involved does not mean that it is the reason for the selection for redundancy. There must be a causative link between the protected characteristic and the detriment8.[16]“Last in first out” is now largely discredited for a variety of reasons. From the employer's point of view it means that a relatively recent employee who is a stellar performer of great value to the future of the business may have to be sacrificed for a timeserver nearing retirement with no enthusiasm for his or her employment (which is not to suggest that is the case for all older employees, or that all younger employees are stellar performers). From employees’ point of view, last in first out tends to be indirect sex discrimination against women, because women tend to have shorter employments than men, in particular by reason of breaks for childcare. It can also be age discrimination, because the young have less 8 Bahl v The Law Society [2004] IRLR 799 opportunity to acquire long service records. Neither of these problems are relevant in this case, because the entire pool for selection was female, and because Ms Allan was the oldest rather than the youngest of the pool.[17]The Tribunal has to be astute to ensure that there was a proper means of choosing the pool for selection. There is no dispute in this case that it is the administration staff, and that was a rational pool for selection.[18]The Tribunal has to assess the criteria used to select the person to be dismissed. While last in first out is not everyone's first choice these days it cannot be said to be an irrational method to choose. It is an entirely objective criterion. It avoids the employer having to judge people. It is not disputed that Ms Allan was the last in, and so was the first out. It was genuinely the method chosen, and was said to be such for all of the last 3 years.[19]During the hearing Ms Allan's representative sought to say that in terms of hours worked it was quite likely that Ms Wise had worked fewer hours in total than Ms Allan, because she had a shorter working week. That was not the way the claim has been pleaded in any way, and in any event the respondent was using last in first out by reference to the starting date of employment.[20]There was consultation about alternatives to redundancy, limited to asking whether anyone would take redundancy voluntarily. There was a suggestion that Ms Zab would have done so and some text messages from her produced so to indicate. Closer examination of those, however, indicated that she had refused voluntary redundancy. Subsequently she had had some discussion with her partner about whether she might like to change her mind, but it was clear from those text messages that she had never conveyed that to the respondent (and she was on a different continent at the time).[21]Where there are criteria for selection the respondent employer should discuss how those criteria are applied in order to make sure that a person made redundant is properly scored. There is no point in doing so where this is a matter of the calculation of length of service, as was the case here.[22]There were no written notes of meetings, little in the way of written communication with the claimant other than her letter of dismissal, even though she asked for it in writing. She was taken by surprise at a meeting where this was discussed, and not told that she could have a companion with her. She was not told that she might appeal.[23]In these circumstances none of this makes any difference. There is no specific claim made for not being allowed a companion. There is no dispute that there was a genuine redundancy situation, and it was always made clear that the method to be used was last in first out. Discussion of the outcome was pointless, because it was arithmetic. The one point that could be discussed was whether there were alternatives to redundancy, and all the staff were asked whether they wished to volunteer. No one suggested job sharing. The claimant's first suggestion of dropping Fridays was unacceptable for business reasons. If she did offer to drop to 2 days that was still .4 FTE more than the respondent needed.[24]The claimant then suggests that Ms Wise was given a pay rise shortly before she was dismissed. Previously their pay rises had gone in tandem. There is nothing particularly suspicious about this. Ms Wise’s pay was increased by £1 an hour. That reduced the pay difference between them from £1.50 an hour less than that of Ms Allan to 50p an hour less. Since Ms Wise had been there longer and she may well have thought she should be paid the same as Ms Allan. She would have an argument that it was age discrimination to be paid less.[25]Ms Wise's hours then increased by one day, to cover the Friday when Ms Allan was no longer working. However Ms Hamley, who was on a much higher pay rate, dropped a day a week at the same time, and for that reason. The net result of that was a further saving in wages for the respondent.[26]The admin staff also do work for Ms Harbin’s business, and Mr Wise’s separate letting business, but that is not material: that Mr Wise lends the staff is not to the point. It was the business which employed Ms Allan that had a diminished need for employees to carry out work of the type that Ms Allan did (and even if it was the other businesses, the respondent would still have needed fewer employees).[27]None of this suggests any age discrimination. None of it suggests any unfairness. If there was any unfairness in the procedure (and a fair procedure must be followed throughout9) then there is a 100% Polkey10 reduction, because application of last in first out would inevitably have resulted in the dismissal of the claimant, and in the same timeframe.[28]There is the further point that the comparator is the daughter of the director of the respondent. It may be said that it was nepotism to favour her over Ms Allan. If so that is everything to do with the father/daughter relationship and nothing to do with age.[29]While it was not the reason for the choice of Ms Allan over his daughter, in a small family business with no more than 15 employees, and having employed his daughter for 5 years (with a break in the middle) it is hard to see that it would be unreasonable for Mr Wise to choose someone other than his daughter to make redundant. As it happens, that was not what occurred, as strict application of last in first out meant that Ms Wise was not the person that chosen criterion identified as the person to be selected for dismissal.[30]The claim for a redundancy payment arises because the correctly calculated redundancy payment was put through payroll, meaning that income tax and national insurance payments (both employer and employee) were paid. The income tax and employee’s national insurance payments were deducted from the money paid to Ms Allan (and were paid to HMRC). This was incorrect, as redundancy payments are to be paid 9 Sainsburys Supermarkets Ltd. v Hitt [2002] EWCA Civ 1588 10 Polkey v A E Dayton Services Ltd [1988] ICR 142 HL gross. The respondent says that the claimant (and only the claimant) can recover these deductions from HMRC. The claimant says that at the April case management hearing it was indicated that the respondent should resolve this. Mr Bromige submitted that this was not “wages” as defined in the Employment Rights Act 1996, so there was no deduction. The Tribunal did not agree with this analysis, for the fact was that Ms Allan had not received her full redundancy payment, and the reason why was nothing to do with her. Nevertheless, if she could recover the deduction from HMRC it would be unfair for the respondent to make up that shortfall, for that could lead to unjust enrichment of the claimant. The position was further complicated because the last payslip for Ms Allan aggregated her redundancy payment with her earnings, so that it is not possible accurately to determine what income tax and national insurance was deducted from the redundancy payment.[31]It was agreed that the best way of dealing with this was to adjourn the matter to a 1 hour hearing after 6 weeks, in the hope that the accountants to the respondent could help the claimant recover the deductions (as the respondent promised they would be instructed to do). Only if that failed would the respondent be ordered to pay the claimant the balance (on the understanding that if Ms Allan would engage with the process of seeking reimbursement). To be entirely clear, it is the respondent’s error, and it is for them to correct it, and do all the work required to do so. The claimant’s obligation is to help them all she can to get the money back from HMRC. If this is not possible by the time the 1 hour hearing takes place then the expectation is that the respondent will have to make up the shortfall, as it was they who made the deduction. The respondent’s accountant advised the respondent that the tax deducted was £252.00 and the national insurance was £98.50. The claimant accepted that these were figures that she was prepared to accept as correct.[1]The claimant brought a claim for unfair dismissal age discrimination and for (the balance of) a redundancy payment either as such or by means of a claim under S13 of the Employment Rights Act. She accepted that there was a redundancy situation. She said that she was selected as she was older than the other two, who were in their 20s, she being considerably older than they are. She said that the process was unfair, for reasons set out in the decision.[2]The respondent seeks an order for costs. The reasons given are: “We enclose for the attention of the Tribunal two costs warning letters sent to the Claimant advising her as to why her claims would not be successful at Tribunal and providing her with the opportunity to withdraw her claims against the Respondent. Within these letters we made it clear to the Claimant should her claims not succeed at Tribunal or she failed to withdraw her claims against the Respondent we would seek recovery of the Respondent’s legal costs in defending the claims. We respectfully request that the Tribunal considers an application for the recovery of the Respondent’s legal costs incurred in defending the claimant claims. The Respondent avers that the Claimant’s claims were brought vexatiously and that she acted unreasonably in bringing the proceedings against the Respondent and was made aware that her claims had no reasonable prospect of succeeding from the outset. We are of the view that the Claimant was given ample opportunity to withdraw her claims given that there was clear evidence that they had no reasonable prospects of succeeding and the Claimant acted vexatiously in pursuing such proceedings against the Respondent. The Respondent avers that the time and preparation in defending the Claimant’s claims has caused much stress for staff members involved and had a detrimental impact upon morale of the company.”[3]In its costs warning letters of 17 December 2017 and 07 June 2018 the Respondent set out its position as follows: “Unfair Dismissal 1. Our client can demonstrate that a fair procedure was followed in respect of the decision to make the Claimant redundant in that: 1. they identified the appropriate pool of at risk employees and applied an objective selection criteria, namely “last in first out”, resulting in the Claimant’s redundancy; 2. they gave meaningful consideration to alternatives and carried out meaningful consultation, however, for the reasons explained to the Claimant and repeated in our client’s grounds of resistance; these alternatives were not a viable option in the circumstances; 2. Even if the Tribunal finds that there was procedural unfairness in some other element, which our client wholly refutes, our client will say that the selection criteria was last in first out and the Claimant was the last in her pool to commence employment; therefore the Claimant would have been dismissed in any event and therefore her compensation would be reduced to nil. Age Discrimination[1]We believe that this claim is vexatious and misconceived in that Mrs Hamley was included in the selection pool considered for redundancy and was older than the Claimant.[2]The selection criteria “last in first out” was objective in that our client wished to retain the most experienced members of staff; therefore this selection criteria was not age discrimination.[3]The Claimant has produced no evidence to substantiate her claim for age discrimination.[4]Therefore we do not consider that the Claimant will be able to particularise her claim relating to age discrimination. 4. The letter of 18 June 2019 dealt also with the redundancy payments claim. The letter of 17 December 2018 did not. The later letter said: “Unlawful Deduction from Wages 1. It is clear, as stated in our grounds of resistance that the Claimant is able to recover the tax/NI deducted from her redundancy payment by contacting HMRC. The Claimant’s failure to do so and insistence on pursuing legal proceedings to this effect is unreasonable and vexatious.”[5]I have not seen any response from the Claimant, but none is necessary, as I have concluded that a costs order is not appropriate in this case.[6]Rule 76(1)(b) in the Schedule 1 to The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 states: When a costs order or a preparation time order may or shall be made 76.—(1) A Tribunal may make a costs order or a preparation time order, and shall consider whether to do so, where it considers that—(a) a party (or that party’s representative) has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or the way that the proceedings (or part) have been conducted; or(b) any claim or response had no reasonable prospect of success. (2) A Tribunal may also make such an order where a party has been in breach of any order or practice direction or where a hearing has been postponed or adjourned on the application of a party. (3) Where in proceedings for unfair dismissal a final hearing is postponed or adjourned, the Tribunal shall order the respondent to pay the costs incurred as a result of the postponement or adjournment if— (a) the claimant has expressed a wish to be reinstated or re-engaged which has been communicated to the respondent not less than 7 days before the hearing; and (b) the postponement or adjournment of that hearing has been caused by the respondent’s failure, without a special reason, to adduce reasonable evidence as to the availability of the job from which the claimant was dismissed or of comparable or suitable employment. (4) A Tribunal may make a costs order of the kind described in rule 75(1)(b) where a party has paid a Tribunal fee in respect of a claim, employer’s contract claim or application and that claim, counterclaim or application is decided in whole, or in part, in favour of that party. (5) A Tribunal may make a costs order of the kind described in rule 75(1)(c) on the application of a party or the witness in question, or on its own initiative, where a witness has attended or has been ordered to attend to give oral evidence at a hearing.[7]The Respondent asserts that the claim was abusive and vexatious. I do not consider that the Claimant was vexatious or abusive. She had a genuine sense of grievance. The claim was not brought to make things difficult for the Respondent.[8]In considering whether the claim had no reasonable prospect of success, I note that I found against the Claimant, in the age and unfair dismissal cases, but for her in the redundancy payments / S13 unlawful deduction claim. It was the respondent which wrongly ran the redundancy payment claim through payroll so that it was taxed, and then said it was up to the claimant to resolve it, offering her no help to do so. While the sum involved is small, there would have needed to be a hearing to resolve it. The respondent’s assertion that this was also a vexatious and abusive claim with no reasonable prospect of success and in respect of which a costs order would be sought was plainly misplaced given the outcome.[9]Last in first out was used to select the claimant, and it was not disputed that it was used. The respondent wrote in costs warning letters that this cannot be age discrimination. It can, for the young have less chance to built up a long work record. However here it was the older claimant who had the lesser service. But the reason offered by the respondent as to why the claim must fail was wrong in law.[10]There were some complexities about exactly how long Ms Wise had been employed given a break in service. It was a fact that the two who were retained were much younger than the claimant. She was entitled to challenge the decision on the basis that only she, the oldest by some margin of the three, was selected, with the other 2 being of a similar, much younger age. She was not satisfied that LIFO was the true reason, and she was entitled to challenge that assertion.[11]That the manager of all 3 (of a similar age to the claimant) was soon removed from risk was also not a relevant consideration for the age or unfair dismissal claim, for there may have been other reasons why the respondent may have wished to keep her, as the claimant asserted.[12]There was also the complexity that the staff dealt also with the business of the partner of the owner of the respondent, so that the respondent itself did not need as many staff for its own business.[13]Just because a respondent is judged to be right for the reasons it gave in advance does not mean that a costs order is appropriate. That is tantamount to costs following the event, which is not the case in Employment Tribunal cases. Costs are not often awarded, unless there is a deposit order, when the losing party will have known that a judge felt that the case put forward had little reasonable prospect of success. No such application was made in this case.[14]Accordingly for these variety of reasons I decide that the provisions of the Rules relating to costs are not met in this case.