S Munro v Hinton Road Investment Ltd: 1405649/2023
EMPLOYMENT TRIBUNALS
Case No 1405649/2023
Between
S MunroClaimantHinton Road Investment LtdRespondent
Before
Employment Judge GibbMs Mallin-Martin (instructed by counsel) for claimantMr Piddington (instructed by counsel) for respondentDate 22 November 2024
REASONS
ISSUES
[1]The Claimant issued proceedings dated 27 October 2023 in which she claimed(1) automatic unfair dismissal pursuant to Regulation 7(1) of TUPE as the sole or principal reason for her dismissal was the transfer, alternatively(2) unfair dismissal for substantive and procedural[2]The parties agreed a list of issues in advance and these were confirmed at the outset of the hearing as follows:(1) Was the sole or principal reason for the Claimant’s dismissal the TUPE transfer which took effect from 1 May 2023 or a reason connected with the transfer?(2) If the Tribunal find that the sole or principal reason for the Claimant’s dismissal was the TUPE transfer or a reason connected with the transfer, was there an economic, technical or organisational reason entailing changes in the workforce which would otherwise render the Claimant’s dismissal fair? Case No: 1405649/2023(3) R asserts that the sole or principal reason for the Claimant’s dismissal was either: 1. Redundancy; or 2. Some other substantial reason (‘SOSR’), namely a business reorganisation.(4) Was there a genuine redundancy situation within the meaning of s.139 ERA?(5) Did the Respondent adopt a fair procedure? The Claimant challenges the fairness of the procedure, and in particular alleges that:
ISSUES
[1]The Respondent mishandled the purported selection pool (comprising the Claimant’s role as Head of Bourne Space, and the separate role of Head of BAM).[2]The Respondent failed to apply fair and objective selection criteria to decide which of the two roles above would be made redundant.[3]The Respondent failed to adequately warn and consult with the Claimant.[4]The Respondent failed to adjourn the (apparent) consultation meeting to allow the Claimant to be accompanied.[5]The Respondent failed to take reasonable steps to find the Claimant suitable alternative employment, particularly, Commercial Operations Manager and Head of Member Services.[6]The Respondent failed to pause the redundancy process pending determination of the Claimant’s grievance of 24 May 2023 or otherwise to determine the Claimant’s grievance concurrently with the (alleged) redundancy consultation process.[7]The Respondent failed to deal with the Claimant’s appeal against dismissal fairly or at all. (6) Did the Respondent act reasonably in all the circumstances in treating the redundancy situation, or SOSR, as a sufficient reason to dismiss the Claimant? (7) If the Respondent did not follow a fair procedure, would the Claimant have been dismissed in any event and/or to what extent and when? (8) If the Respondent did not follow a fair procedure, would the Claimant have resigned in any event? Case No: 1405649/2023 (9) Did the Respondent fail to comply with ACAS CoP-1 by not hearing the Claimant’s grievance and by outright rejecting the Claimant’s dismissal appeal (per s.207A TULR(C)A)? If so, is it just and equitable for there to be an increase in any compensation awarded? If so, by how much? (10) If the Claimant’s dismissal was unfair, did the Claimant contribute to her dismissal by culpable conduct? PROCEDURE 3. The tribunal heard evidence from the Claimant. On the Respondent’s behalf, the tribunal heard evidence from Richard Davies (consultant retained by the Respondent who sold his shares in Bourne Asset Management Limited (“BAM”) to the Respondent); Andrew Mellor (sole director and shareholder of the Respondent) and Olivia Trickey (who had previously been employed by BAM and who TUPE transferred alongside the Claimant). 4. There was a tribunal bundle of 221 pages. Both counsel produced written submissions on the final day of the hearing. One additional document was produced during the hearing from Andrew Mellor. During cross examination, he referred to ‘scribbles’ he had made contemporaneously during a meeting with Ms Trickey on 30 May 2023. This was a page from a notebook which appeared to refer to a scoring of Ms Trickey against four columns. After considering the position, the note was included as evidence at page 158a of the bundle. 5. The tribunal considered all the evidence when making the decision in this case. THE FACTS 6. On 6 July 2006, the Claimant commenced employment with KBC Holdings Limited. There were various acquisitions and company transfers and in late 2022, she was transferred to Bourne Asset Management Limited (“BAM”) as Head of Bourne Space. Bourne Space comprises suites of serviced offices based in buildings around Bournemouth. Natalie Bullen was the Claimant’s assistance in this role. 7. Mr Davies’s evidence was that the Head of Bourne Space role included the running of the commercial building at Hinton Road as well as Bourne Space at the hotel site, Bourne Park. He explained that she was responsible for the operational business of Bourne Space as well as health and safety and facilities.
THE FACTS
[8]The Claimant did not agree that her responsibilities included all those stated in evidence by Mr Davies; for example, she disputed his assertion that she was responsible for health and safety. She said that this role included overall responsibility for the commercial operation of Case No: 1405649/2023 the business including pricing and negotiating rents, marketing and management of the team. There was no written job description setting out the scope of her role. On balance, the tribunal is satisfied that the Claimant’s role was senior and involved responsibility for the operational business of Bourne Space. It was self evidently a significantly more senior role than that of the assistant, Ms Bullen. The tribunal notes that following the later reorganization, the responsibilities were split between Mr Davies and Ms Bullen.[9]It was Mr Davies’ evidence, which was not seriously in dispute and which I accept, that the group of companies he owned by had been placed under increased financial pressure, particularly since the pandemic. In November 2022, post the mini budget, there were discussions about the financial state of the business, that required further restructuring which entailed a number of redundancies. Despite this, the group companies continued to experience financial difficulties and eventually Mr Davies took advice from an administrator regarding the group company solvency.[10]It is agreed between the parties that at a meeting on 19 January 2023, the Claimant raised the issue of redundancy with a severance package with Mr Davies. In an email dated 20 January 2023, Mr Davies reiterated that BAM had nearly gone into administration the previous year, that the business was low on cash reserves and he was not in a position to pay a ‘proper redundancy package’, that is, a payment above the statutory minimum level.[11]On 1 March 2023, following an in person meeting, Mr Davies emailed the Claimant to inform her that Debbie Cohen (HR Consultant from Streetwise HR Ltd) had been retained and that the company was about to begin a consultation process for redundancy.[12]On 14 March 2023, Mr Davies and Ms Cohen held consultation meetings with both candidates. Mr Davies’ evidence was that Ms Trickey was fully engaged and willing to explore the restructure. By contrast, he said that the Claimant just wanted to talk about a potential package. He said the Claimant made it clear she did not want to adapt or adjust her role. In her evidence, the Claimant said she couldn’t remember what had been talked about in that meeting. On the balance of probabilities, and given the Claimant’s inability to recall the latter, I accept Mr Davies’ evidence about the two meetings.[13]The 14 March 2023 email between Ms Cohen and Mr Davies confirmed that if no deal could be done with the Claimant, they would push forward with the redundancy with Ms Trickey and the Claimant in a pool and see which one scored the highest. I consider that this internal letter reflects a genuine intention to carry out a fair redundancy process.[14]On the same day, Mr Davies sent a letter to Ms Trickey and the Claimant informing them that he was proposing to merge their roles and create one full time role, Commercial and Operations Manager (“COM”). It stated that this meant they were at risk of redundancy, that Case No: 1405649/2023 they had now entered the consultation phase and that they would shortly be invited to a consultation meeting.[15]Following this meeting, the Claimant was absent from work until 10 April 2023. On 11 April 2024, Mr Davies wrote to Ms Cohen regarding a potential sale of one of the companies that owned the Hinton Road building. The proposal was to sell with right to use the Bourne Space brand. At this early stage, it was unclear which staff might transfer.[16]An email from Claimant dated 26 April 2023 records that there was a further discussion about severance, but that Mr Davies was only prepared to offer a statutory redundancy payment. He says this was on advice from the administrator given the state of the company finances and I accept his evidence on this. On the same day, Mr Davies wrote to Claimant to inform her that the company was being sold and that staff working for Bourne Space may transfer too.[17]On 28 April 2023, Mr Davies wrote to the Claimant to confirm that the sale was progressing and that she would be transferring under TUPE. The transfer took effect on 5 May 2023. It was Mr Davies’ evidence, which was not challenged, that immediately prior the transfer, BAM was the owner of the Bourne Space brand and serviced office business and it is that asset, plus the staff employed, who transferred when the Respondent purchased the shareholding in BAM.[18]Post transfer, Mr Davies was retained as an external consultation to assist with operational issues for the Respondent.[19]Between 3 and 5 May 2023, emails passed between DM, RD and DC regarding a potential severance package for the Claimant.[20]On 12 May 2023, Mr Murray proposed a meeting with the Claimant in order to undertake a protected conversation. This meeting took place by telephone later that day and was followed by a letter to the Claimant setting out a settlement agreement. In the proposal letter, Mr Murray indicated that if the Claimant did not accept the offer, he would then start a restructuring exercise.[21]On 19 May 2023, there was a further phone call between Mr Murray and the Claimant. It is the Claimant’s position that Mr Murray put her under pressure to accept the settlement offer, which was no more than the statutory minimum payment; he denied applying any such pressure. Having observed Mr Murray giving evidence, he spoke rapidly and sometimes spoke over those questioning him. I am satisfied that in business discussions, particularly over the phone, he is likely to come across as a strong personality. However, I note that it was five days before the Claimant mentioned her concerns by email; did not mention this in her grievance letter of the same date which complained about the redundancy process and absent any further evidence as to what was said - the Claimant retracted in her evidence that he had called her stupid - I do not find that Mr Murray’s behaviour was improper as alleged by the Claimant. Case No: 1405649/2023[22]On 24 May 2023, the Claimant raised a grievance regarding the redundancy process and failure to pay her Q4 bonus. I note that the letter was addressed to Richard (that is Richard Davies) and not Mr Mellor and appears to relate to complaints relating to her employment by BAM. The letter makes it clear that the Claimant is extremely disappointed not to have received the enhanced settlement package which she considered she had been promised and others had received previously.[23]On 25 May 2023, the Respondent restarted the redundancy process which had commenced prior to the transfer. The Claimant was sent a letter of the same date in which it said she was at risk of redundancy as a result of the proposal to implement a new structure which meant her role might go. It invited her to a consultation meeting on 30 May 2023 and informed of her right to be accompanied. There was some email discussion about whether the meeting could be moved so that the Claimant could be accompanied, but in an email on 26 May 2023 she agreed to attend alone.[24]On 30 May 2023, the meeting between Mr Murray and the Claimant took place by telephone and it was recorded by the Claimant without Mr Murray’s consent. The Claimant’s evidence was that she had not been provided with any evidence about the proposed restructure. She told Mr Mellor that she thought he had already made up his mind and that the process was a sham.[25]In the unagreed transcript that the Claimant disclosed, when asked about other potential toles in the business she stated: “I can’t see how there could be another role for me because of the small amount of roles that are in the company. I can’t do finance … I don’t want to do reception because that’s not, I am sure that I wouldn’t get the pay that I get from reception. I can’t do Olivia’s jkob, but she can’t do mine, so I just don’t know how you are going to run it.”[26]On the same day, Mr Murray also had a meeting on the phone with Ms Trickey. His evidence was that she was enthusiastic and would be very happy to take on new elements of the role if appointed. Ms Trickey confirmed this in her evidence and I accept she was willing to take on any new responsibilities the new role would require.[27]On 1 June 2023, Ms Bullen’s salary was increased from £30k to £42k backdated to 1 April 2023. The Respondent stated that this was to recognize the additional work she was carrying out, expressly picking up the Claimant’s work as she was not engaging fully during this time. Mr Davies explained that this was his concern, that he was afraid that Ms Bullen would otherwise leave her employment and that without her the business would not survive. It is the Claimant’s position that Ms Bullen was in fact doing her old job as from 1 April 2023. I found Mr Davies to be a careful and truthful witness and I accept that he was in a position to give the best evidence regarding Ms Bullen’s role and the rationale for the increase in her salary. Case No: 1405649/2023[28]On 2 June 2023, Mr Murray emailed the Claimant to say that he had investigated her grievance and to arrange for a teams meeting to share the results. The Claimant did not respond to that email.[29]Later on the same day, Mr Murray sent the Claimant a letter informing of her of the decision to dismiss by way of redundancy. It also informed her of her right to appeal.[30]On 9 June 2023, the Claimant’s solicitors appealed the decision and a letter setting out 7 grounds of appeal was sent to the Respondent.[31]On 16 June 2023, Mr Murray responded to the appeal with a simple one-line response to confirm he would not be overturning the decision. THE LAW Regulation 7(1) TUPE – protection from dismissal
THE LAW
[32]Regulation 7(1) of TUPE provides that: ‘where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee is to be treated… as unfairly dismissed if the sole or principal reason for the dismissal is the transfer’.[33]Reg 7(2) and (3) then goes on to stipulate that where the sole or principal reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce (‘an ETO reason’) of either the transferor or the transferee before or after a relevant transfer, Reg 7(1) ‘does not apply’ and the fairness of dismissal is to be judged by reference to S.98(4) of the Employment Rights Act 1996 (ERA), which sets out the standard ‘reasonableness test’ that applies to ordinary unfair dismissal.[34]This, it should be noted, is a question of fact to be determined by the employment tribunal in the circumstances of the case. A number of issues may be relevant to ascertaining the answer to that question, depending on the circumstances of the particular case.[35]The EAT in Marshall v Game Retail Ltd EAT 0276/13 held that tribunals considering automatically unfair dismissal in a TUPE context should apply the burden of proof in accordance with the guidance set down by the Court of Appeal in Kuzel v Roche Products Ltd 2008 ICR 799, CA (a case under S.103A ERA, which renders automatically unfair any dismissal which is for the sole or principal reason that the employee made a protected disclosure). Thus, the burden is technically on the employer to show the reason for dismissal. Usually, the employer seeks to discharge this by showing that dismissal is for one of the potentially fair reasons under S.98(1) and (2) ERA. If the employee asserts that the dismissal is instead for an automatically Case No: 1405649/2023 unfair reason, the employee acquires a burden of showing some evidence to support his or her case.[36]Proximity of the dismissal to the transfer is not conclusive, but it is strong evidence in the employee’s favour. The Court held that an employee dismissed on the day of the transfer due to her ongoing strained relationship with a colleague who was to become a director of the transferee was dismissed by reason of the transfer: Hare Wines Ltd v Kaur [2019] IRLR 555, CA. ETO Reason[37]Where an employer successfully shows that the sole or principal reason for dismissal was an ETO reason, the dismissal will not be automatically unfair under Reg 7(1). However, it might nevertheless be unfair under the general unfair dismissal provisions of the ERA. The burden of proof is on the employer to establish(1) an ETO reason(2) which entailed a change in the workforce.[38]Under Reg 7(3)(b), where a transfer-related dismissal is not rendered automatically unfair by Reg 7(1). The reason for dismissal for the purpose of S.98 ERA will be deemed to be a redundancy where the reason for dismissal fulfils the definition in S.139 ERA, in which case the employee’s normal rights on redundancy will apply. Genuine Redundancy Situation[39]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[40]Provided fewer employees are needed to do work of a particular kind there us a redundancy situation: McCrea v Cullen [1988] IRLR 30. It is important to consider whether the dismissal was attributable to the diminution or cessation of the requirements of the employer for employees to carry out work of a particular kind: Contract Bottling v Cave & Anor UKEAT/0525/12/DM Unfair Dismissal Case No: 1405649/2023[41]In this case the unfair dismissal claim was brought under Part X of the Employment Rights Act 1996. The main provision is section 98 which, so far as relevant, provides as follows: “(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –(a) the reason (or, if more than one, the principal reason) for the dismissal and(b) that it is either a reason falling within sub-section (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this sub-section if it ... is that the employee was redundant ... ... (4) Where the employer has fulfilled the requirements of sub-section (1), 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 reasonable 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”.[42]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[43]Employers should try and comply with the guidance given in R v British Coal Corpn and SoS for Trade & Industry, ex p Price [1994] IRLR 72.[44]It is for the employer to identify the pool of employees and the tribunal must decide whether the pool was within the band of reasonable Case No: 1405649/2023 responses: Capita Hartshead Ltd Byard [2012] ICR 1256; Kvaerner Oil & Gas Ltd v Parker [2003] 1 WQLUK 638.[45]A dismissal may be unfair if no consideration is given to finding alternative employment and the employer must take reasonable steps to do so: Thomas & Betts v Harding [1980] IRLR 255. A employee who is being made redundant may need to be offer an alternative even one of a lesser status: Avonmouth Construction v Shipway [1979] IRLR 14. An employer should not assume an employee will not take an alternative employment but must discuss it with them: Huddersfield Parcels v Sykes [1981] IRLR 115.[46]In a redundancy situation, the absence of an appeal does not of itself render the dismissal unfair: Gwynedd Council v Barratt [2021] IRLR 1028.[47]The proper application of the general test of fairness in section 98(4) has been considered by the EAT and higher courts on many occasions. The Employment Tribunal must not substitute its own decision for that of the employer: the question is rather whether the employer’s conduct fell within the “band of reasonable responses”: see Iceland Frozen Foods Limited v Jones [1982] IRLR 439 (EAT) as approved by the Court of Appeal in Post Office v Foley; HSBC Bank PLC v Madden [2000] IRLR 827.[48]In cases where the respondent has shown that the dismissal was a redundancy dismissal, guidance was given by the EAT in Williams v Compair Maxam Ltd [1982] IRLR 83. In general terms, employers acting reasonably will seek to act by giving as much warning as possible of impending redundancies to employees so they can take early steps to inform themselves of the relevant facts, consider positive alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. The employer will consult about the best means by which the desired management result can be achieved fairly, and the employer will seek to see whether, instead of dismissing an employee, he could offer him alternative employment. A reasonable employer will depart from these principles only where there is good reason to do so.[49]The Polkey principle is not confined to cases of procedural unfairness but has a broader application. The tribunal’s task is to apply ERA 1996 s 123(1) and award 'such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.[50]When applying Polkey, it “is inevitably an exercise about which there can be no absolute and scientific certainty. It is a predictive exercise. Evidence is needed to inform the prediction. It is important that a Tribunal should spell out, as best it can, what factors it takes into Case No: 1405649/2023 account in determining why it adopts a particular percentage. .......... It is, and has to be a process of assessment.” Per Langstaff J in Contract Bottling v Cave & McNaughton [2014] UKEAT 0100.[51]Section 207A of TULR(C)A provides that the tribunal must take into account whether or not the employer has complied with a relevant Code and has the power to award an uplift of up to 25%.[52]Section 123(6) of the ERA sets out the factors which must be considered when deciding whether the compensatory award should be reduced to reflect whether their own conduct caused or contributed to the dismissal. CONCLUSION Was the Sole or Principle Reason for the Dismissal the TUPE Transfer?
CONCLUSION
[53]It is clear that from at least November 2022, Mr Davies’ group companies which included BAM was in a difficult financial position. There had already been one round of redundancies in November 2022 during which the Claimant’s daughter has been made redundant. It is against this background that the Claimant approached Mr Davies to attempt to negotiate an enhanced redundancy package; she mentioned in one email that she felt a year’s pay would be fair. It is clear from multiple emails around that time that she wanted a substantial sum above the statutory minimum to reflect her long service. She also knew that Mr Davies had in the past been prepared to make enhanced settlement payments. Mr Davies made it clear in his written and oral evidence, that despite her request for redundancy, his preference was to restructure and to attempt to keep her in his employment. It is clear that at this point, he held her in high regard as a senior member of the team and wished to retain her.[54]In early March 2023, given the ongoing poor financial circumstances of the group companies, an administrator was appointed to the parent company and Mr Davies took advice regarding the broader group companies’ solvency. By 1 March 2023, Mr Davies had retained the services of an HR adviser Debbie Cohen. By email that day, he informed the Claimant that the consultation process would begin. The tribunal am satisfied that his email of the same date reflected his genuine hope that she would be actively involved in the consultation and help them work out the structure going forward. He was clear in his evidence that at this stage, his hope was that the Claimant would work with him and stay within the business.[55]At the 14 March 2023 consultation meeting, with Ms Trickey, she was fully engaged and very willing to explore other options available for her ongoing employment. By contrast, the Claimant just wanted to concentrate on her settlement package. She then went on sickness leave until 10 April 2023. Following on from the March meeting, Mr Davies took the view that the Claimant had disengaged from several aspects of her role, was not interested in collaborating with the restructure and was simply interested in a pay-off. Case No: 1405649/2023[56]Following the failed refinancing attempt in April 2023, Mr Davies decided to sell the assets in BAM. On 5 May 2023, the business of Bourne Space and its staff transferred by operation of TUPE to the Respondent. The evidence from both Mr Davies and Mr Mellor was that the business required further financial savings to be made post transfer and part of that process was the restarting or continuation of the redundancy process started when the business had been owned by BAM. I am satisfied that the business had been in financial difficulty since at least November 2022 and remained in similarly perilous situation after the transfer.[57]The tribunal is also satisfied that the protected conversation between Mr Mellor and the Claimant and the subsequent continuation of the redundancy process were carried out in good faith with the intention of streamlining the business by amalgamating two jobs into one. In effect, newco inherited the ongoing redundancy process from oldco. It is important, in the tribunal’s view, that Mr Davies was retained as a consultant by the Respondent. He knew the business in terms of structure and ongoing viability better than anyone and he had already carried out a round of redundancies in 2022. The tribunal finds it entirely reasonable that the Respondent would continue with the redundancy process which he had started, to find further financial savings.[58]Following on from the Respondent’s acquisition of the business, Mr Mellor took the decision that further restructuring would be needed going forward. As a consequence, Ms Trickey never started in the role as COM, despite the Respodnent’s original intentions during the redundancy process, but was instead moved from July 2023 across to a different company. The COM role responsibilities were thereafter picked up Mr Davies.[59]Whilst documentary evidence might have been helpful, there are no grounds to counter the explanation that Mr Davies’ companies were in poor financial positions and exposed with borrowing liabilities immediately prior to the transfer and that the Bourne Space business remained financially vulnerable post transfer. Whilst acknowledging the proximity of the dismissal to the transfer, the tribunal finds that the reason for the dismissal was the redundancy process which continued after the transfer. The tribunal is satisfied that the transfer was not the sole or principal reason for the dismissal but that it was entirely as a result of the need for ongoing cost cutting measures within the business. ETO Reason[60]The tribunal does not need to do so, but if it had to go on and consider the ETO reason it is satisfied that the reason for the redundancy dismissal was to reduce workforce numbers in line with Mr Davies’ original proposal. Case No: 1405649/2023 Ordinary Unfair Dismissal Redundancy[61]The Claimant sought to argue that the Respondent had failed to establish that there were actually structural changes to the business’ staffing needs. She highlighted that there was little evidence about the current structure and a disagreement about Ms Bullen’s current job description. The upshot, says the Claimant, is that the Respondent has not established a diminished requirement for staffing, as someone is required to do many if not all of the Claimant’s previous role and it cannot satisfy the tribunal that there is a genuine redundancy situation.[62]It is already set out that the tribunal accepted Mr Davies’ pre-transfer rationale for the need to rationalize and that he had identified a pool of two: the Claimant and Ms Trickey. As it was an amalgamation of roles, there were aspects which would be new to whoever was appointed. This was a small business which had been run by Mr Davies and he was intimately acquainted with the roles and responsibilities of each candidate in the pool. The process had commenced prior to the transfer and the tribunal finds it is entirely reasonable and proportionate that given the financial and time pressures at play, the Respondent adopted and restarted the same redundancy process post transfer as advised by its new consultant and can therefore establish an economic justification for the redundancy.[63]In relation to the actual reorganization, Mr Davies’ took the view that it was important to retain Ms Bullen in her role as she had stepped up to take up some of the duties which the Claimant should have been undertaking. The explanation given for Ms Bullen’s backdated pay increase was that she was vital to the business. Subsequently, following the Claimant’s dismissal and the further restructuring already set out, Mr Davies has picked up duties from the COM role with the effect that the duties carried out by the Claimant and Ms Trickey have been reorganized and reallocated amongst existing staff. TFewer employees were needed because of a reorganisation that resulted in a more efficient use of labour. The tribunal is satisfied that the dismissal was for reason of redundancy in accordance with section 139(1)(b) of the ERA 1996. Procedural Fairness Selection Pool[64]The Respondent decided to pool the Claimant and Ms Trickey. This adopted Mr Davies’ approach before the transfer. It was based on the fact that their management roles, being at the same or similar level, were to be amalgamed into the new position of COM to reduce business costs. Although here were arguments to say that the pool should have been wider, the tribunal does not find it was unreasonable for the Respondent to have adopted this pool in light of the proposed restructure of a small business. The proposed reorganisation would Case No: 1405649/2023 reduce the number of individuals required to undertake the management work at a that particular level. It is true that Ms Trickey ultimately never took up the new role however, it was a fluid situation whereby ultimately, the work was divided between Mr Davies and Ms Bullen in due course following a further restructuring. In the circumstances, the tribunal satisfied that this was a reasonable pool for selection. Selection Criteria[65]Mr Murray failed to explain to either candidate how the scoring metric would be applied. In fact, that was not explained until half-way through the hearing and even then, it was four headings with ‘scribbles’ relating only to Ms Trickey. There was no evidence as to how this scoring metric was applied to the Claimant. As at the time of the consultation meeting, the Respondent had failed to set out what the role of COM would comprise. Consultation[66]In the tribunal’s view there was a lack of proper consultation. The fluidity of the situation has already been noted, but ultimately, this was a consultation of two for an amalgamated role and was to be conducted in a week. The Respondent should have been clearer in its responsibilities during this process. It failed to provide the Claimant with an opportunity for to comment on her redundancy selection assessment and it did not share the selection criteria or outcome. Fair consultation involves the provision of adequate information on which an employee can respond and argue their case, which did not happen in this instance. Failure to Adjourn Consultation to Allow the Claimant to be Accompanied[67]The Respondent proposed to hold the consultation meeting on 30 May 2023. Initially, the Claimant requested that this be moved so she could be accompanied, but on 26 May 2023 agreed to attend alone. There is no suggestion that there was any undue pressure applied to the Claimant to attend alone and the tribunal does not find that this complaint is made out. Suitable Alternative Employment[68]As regards alternative employment, Mr Murray did raise this with the Claimant during their meeting on 30 May 2023, but the Claimant stated that given the small size of the business, there was no suitable alternative employment that she would be willing to undertake. She made it clear she did not want to take a job such a reception job which would be on a lower wage. Case No: 1405649/2023[69]Given the above comments regarding the fluidity of the situation, I am satisfied that the Head of Member Services role which was subsequently created was not in existence as at 2 June 2023. I note the pay increase paid to Ms Bullen but accept Mr Davies’ and Mr Murray’s subsequent evidence that her role was sufficiently less senior than that which the Claimant had undertaken. I also accept that the role of Head of Member Services which she was subsequently appointed to did not exist as at the time of the Claimant’s dismissal. I am therefore satisfied that at the material time, there was no suitable alternative role for the Claimant. Failed to Deal with the Grievance Properly[70]The grievance was raised on 24 May 2023 and Mr Murray stated in the grievance hearing on 30 May 2023 that he would deal with the grievance separately. He emailed the Claimant on 2 June 2023 to follow this up, but she did not reply to the email. The Claimant asked for a reply to her grievance in her appeal letter dated 9 June 2023. No substantive response was provided by the Respondent.[71]The tribunal is not satisfied on the balance of probabilities that Mr Murray carried out a proper investigation into the grievance. He invited her for a meeting on the day she was dismissed and never followed it up. It contained a valid complaint about the conduct of the redundancy process which was not addressed by the Respondent. Failed to deal with the Appeal Properly[72]The Claimant was notified of her redundancy on 2 June 2023 and the letter informed of her of her right to appeal. By letter dated 9 June 2023, solicitors for the Claimant appealed her redundancy and provided 7 grounds, not all of which have been raised in this claim. The letter requested a written response. On 16 June 2023, Mr Murray replied and simply stated: “I do not believe there are grounds for appeal so I am not overturning the decision.”[73]In redundancy cases the absence of any appeal or review procedure does not of itself make the dismissal unfair – that is to say, if the original selection for redundancy was in accordance with a fair procedure the absence of an appeal is not fatal to the employer's defence and it would be wrong to find a dismissal unfair only because of the failure to provide the employee with an appeal hearing. The absence of an appeal is one of the many factors to be considered in determining fairness. Did the Respondent act Reasonably in all the Circumstances in Treating Redundancy as a Reason to Dismiss?[74]It was not reasonable or sufficient for the Respondent to proceed in such an unstructured and opaque manner in relation to the redundancy Case No: 1405649/2023 process. For the reasons set out above, the tribunal concludes that dismissal of the Claimant for redundancy was procedurally unfair. The tribunal notes that it is not for it to stand in the shoes of the employer and decide what it would have done, but to consider whether the decision to dismiss was within the range of responses of a reasonable employer. The tribunal therefore concludes that it was not, and the Claimant’s claim of procedurally unfair dismissal succeeds. Polkey[75]The tribunal must then consider whether a fair procedure would have made a difference and if so to what extent, applying the principle established in Polkey v A E Dayton Services Ltd [1988] ICR142.[76]On the one hand, the Claimant made it clear to Mr Davies, and Mr Murray on 30 May 2023 meeting, that she could not and did not want to carry out elements of Ms Trickey’s job. She had previously made it clear to Mr Davies that she was not interested in learning new skills and expertise. Ms Trickey on the other hand was keen to step up and willing to undertake any new learning and training required. Given that both women had skills to offer in the job that the other did not, and without any further information regarding the scoring criteria, it is not possible for me to determine whether one is more likely that the other to have been successful.[77]Based on the evidence and its conclusions the tribunal assesses the probability of the claimant having been fairly selected for redundancy at 50%, which will result in a 50% reduction in any award made.[78]The tribunal does not consider that had a fair procedure been adopted the Claimant would have resigned in any event. It accepts her explanation that the discussions surrounding an exit package were solely based on achieving an amount greater than the statutory minimum and that otherwise she needed to keep her job for financial[79]For the reasons set out above, the tribunal is satisfied that it is just and equitable to award a 10% uplift on any compensation awarded. Contributory Fault[80]The tribunal finally turns to deal with contributory fault. The Respondent says that Claimant contributed entirely to her dismissal because she did not engage and did not positively offer alternatives during the consultation process.[81]Having found that there the process was unfair in the way in which it was conducted and most seriously the way in which the Respondent Case No: 1405649/2023 consulted, applied selection criteria, documented its decision making and dealt with her grievance, the tribunal is not satisfied that it is appropriate to make any such deduction and declines to do so. K Gibb _____________________________ Employment Judge Gibb 22 November 2024
ISSUES
[1]The Claimant issued proceedings dated 27 October 2023 in which she claimed(1) automatic unfair dismissal pursuant to Regulation 7(1) of TUPE as the sole or principal reason for her dismissal was the transfer, alternatively(2) unfair dismissal for substantive and procedural[2]The parties agreed a list of issues in advance and these were confirmed at the outset of the hearing as follows:(1) Was the sole or principal reason for the Claimant’s dismissal the TUPE transfer which took effect from 1 May 2023 or a reason connected with the transfer?(2) If the Tribunal find that the sole or principal reason for the Claimant’s dismissal was the TUPE transfer or a reason connected with the transfer, was there an economic, technical or organisational reason entailing changes in the workforce which would otherwise render the Claimant’s dismissal fair? Case No: 1405649/2023(3) R asserts that the sole or principal reason for the Claimant’s dismissal was either: 1. Redundancy; or 2. Some other substantial reason (‘SOSR’), namely a business reorganisation.(4) Was there a genuine redundancy situation within the meaning of s.139 ERA?(5) Did the Respondent adopt a fair procedure? The Claimant challenges the fairness of the procedure, and in particular alleges that:
ISSUES
[1]The Respondent mishandled the purported selection pool (comprising the Claimant’s role as Head of Bourne Space, and the separate role of Head of BAM).[2]The Respondent failed to apply fair and objective selection criteria to decide which of the two roles above would be made redundant.[3]The Respondent failed to adequately warn and consult with the Claimant.[4]The Respondent failed to adjourn the (apparent) consultation meeting to allow the Claimant to be accompanied.[5]The Respondent failed to take reasonable steps to find the Claimant suitable alternative employment, particularly, Commercial Operations Manager and Head of Member Services.[6]The Respondent failed to pause the redundancy process pending determination of the Claimant’s grievance of 24 May 2023 or otherwise to determine the Claimant’s grievance concurrently with the (alleged) redundancy consultation process.[7]The Respondent failed to deal with the Claimant’s appeal against dismissal fairly or at all. (6) Did the Respondent act reasonably in all the circumstances in treating the redundancy situation, or SOSR, as a sufficient reason to dismiss the Claimant? (7) If the Respondent did not follow a fair procedure, would the Claimant have been dismissed in any event and/or to what extent and when? (8) If the Respondent did not follow a fair procedure, would the Claimant have resigned in any event? Case No: 1405649/2023 (9) Did the Respondent fail to comply with ACAS CoP-1 by not hearing the Claimant’s grievance and by outright rejecting the Claimant’s dismissal appeal (per s.207A TULR(C)A)? If so, is it just and equitable for there to be an increase in any compensation awarded? If so, by how much? (10) If the Claimant’s dismissal was unfair, did the Claimant contribute to her dismissal by culpable conduct? PROCEDURE 3. The tribunal heard evidence from the Claimant. On the Respondent’s behalf, the tribunal heard evidence from Richard Davies (consultant retained by the Respondent who sold his shares in Bourne Asset Management Limited (“BAM”) to the Respondent); Andrew Mellor (sole director and shareholder of the Respondent) and Olivia Trickey (who had previously been employed by BAM and who TUPE transferred alongside the Claimant). 4. There was a tribunal bundle of 221 pages. Both counsel produced written submissions on the final day of the hearing. One additional document was produced during the hearing from Andrew Mellor. During cross examination, he referred to ‘scribbles’ he had made contemporaneously during a meeting with Ms Trickey on 30 May 2023. This was a page from a notebook which appeared to refer to a scoring of Ms Trickey against four columns. After considering the position, the note was included as evidence at page 158a of the bundle. 5. The tribunal considered all the evidence when making the decision in this case. THE FACTS 6. On 6 July 2006, the Claimant commenced employment with KBC Holdings Limited. There were various acquisitions and company transfers and in late 2022, she was transferred to Bourne Asset Management Limited (“BAM”) as Head of Bourne Space. Bourne Space comprises suites of serviced offices based in buildings around Bournemouth. Natalie Bullen was the Claimant’s assistance in this role. 7. Mr Davies’s evidence was that the Head of Bourne Space role included the running of the commercial building at Hinton Road as well as Bourne Space at the hotel site, Bourne Park. He explained that she was responsible for the operational business of Bourne Space as well as health and safety and facilities.
THE FACTS
[8]The Claimant did not agree that her responsibilities included all those stated in evidence by Mr Davies; for example, she disputed his assertion that she was responsible for health and safety. She said that this role included overall responsibility for the commercial operation of Case No: 1405649/2023 the business including pricing and negotiating rents, marketing and management of the team. There was no written job description setting out the scope of her role. On balance, the tribunal is satisfied that the Claimant’s role was senior and involved responsibility for the operational business of Bourne Space. It was self evidently a significantly more senior role than that of the assistant, Ms Bullen. The tribunal notes that following the later reorganization, the responsibilities were split between Mr Davies and Ms Bullen.[9]It was Mr Davies’ evidence, which was not seriously in dispute and which I accept, that the group of companies he owned by had been placed under increased financial pressure, particularly since the pandemic. In November 2022, post the mini budget, there were discussions about the financial state of the business, that required further restructuring which entailed a number of redundancies. Despite this, the group companies continued to experience financial difficulties and eventually Mr Davies took advice from an administrator regarding the group company solvency.[10]It is agreed between the parties that at a meeting on 19 January 2023, the Claimant raised the issue of redundancy with a severance package with Mr Davies. In an email dated 20 January 2023, Mr Davies reiterated that BAM had nearly gone into administration the previous year, that the business was low on cash reserves and he was not in a position to pay a ‘proper redundancy package’, that is, a payment above the statutory minimum level.[11]On 1 March 2023, following an in person meeting, Mr Davies emailed the Claimant to inform her that Debbie Cohen (HR Consultant from Streetwise HR Ltd) had been retained and that the company was about to begin a consultation process for redundancy.[12]On 14 March 2023, Mr Davies and Ms Cohen held consultation meetings with both candidates. Mr Davies’ evidence was that Ms Trickey was fully engaged and willing to explore the restructure. By contrast, he said that the Claimant just wanted to talk about a potential package. He said the Claimant made it clear she did not want to adapt or adjust her role. In her evidence, the Claimant said she couldn’t remember what had been talked about in that meeting. On the balance of probabilities, and given the Claimant’s inability to recall the latter, I accept Mr Davies’ evidence about the two meetings.[13]The 14 March 2023 email between Ms Cohen and Mr Davies confirmed that if no deal could be done with the Claimant, they would push forward with the redundancy with Ms Trickey and the Claimant in a pool and see which one scored the highest. I consider that this internal letter reflects a genuine intention to carry out a fair redundancy process.[14]On the same day, Mr Davies sent a letter to Ms Trickey and the Claimant informing them that he was proposing to merge their roles and create one full time role, Commercial and Operations Manager (“COM”). It stated that this meant they were at risk of redundancy, that Case No: 1405649/2023 they had now entered the consultation phase and that they would shortly be invited to a consultation meeting.[15]Following this meeting, the Claimant was absent from work until 10 April 2023. On 11 April 2024, Mr Davies wrote to Ms Cohen regarding a potential sale of one of the companies that owned the Hinton Road building. The proposal was to sell with right to use the Bourne Space brand. At this early stage, it was unclear which staff might transfer.[16]An email from Claimant dated 26 April 2023 records that there was a further discussion about severance, but that Mr Davies was only prepared to offer a statutory redundancy payment. He says this was on advice from the administrator given the state of the company finances and I accept his evidence on this. On the same day, Mr Davies wrote to Claimant to inform her that the company was being sold and that staff working for Bourne Space may transfer too.[17]On 28 April 2023, Mr Davies wrote to the Claimant to confirm that the sale was progressing and that she would be transferring under TUPE. The transfer took effect on 5 May 2023. It was Mr Davies’ evidence, which was not challenged, that immediately prior the transfer, BAM was the owner of the Bourne Space brand and serviced office business and it is that asset, plus the staff employed, who transferred when the Respondent purchased the shareholding in BAM.[18]Post transfer, Mr Davies was retained as an external consultation to assist with operational issues for the Respondent.[19]Between 3 and 5 May 2023, emails passed between DM, RD and DC regarding a potential severance package for the Claimant.[20]On 12 May 2023, Mr Murray proposed a meeting with the Claimant in order to undertake a protected conversation. This meeting took place by telephone later that day and was followed by a letter to the Claimant setting out a settlement agreement. In the proposal letter, Mr Murray indicated that if the Claimant did not accept the offer, he would then start a restructuring exercise.[21]On 19 May 2023, there was a further phone call between Mr Murray and the Claimant. It is the Claimant’s position that Mr Murray put her under pressure to accept the settlement offer, which was no more than the statutory minimum payment; he denied applying any such pressure. Having observed Mr Murray giving evidence, he spoke rapidly and sometimes spoke over those questioning him. I am satisfied that in business discussions, particularly over the phone, he is likely to come across as a strong personality. However, I note that it was five days before the Claimant mentioned her concerns by email; did not mention this in her grievance letter of the same date which complained about the redundancy process and absent any further evidence as to what was said - the Claimant retracted in her evidence that he had called her stupid - I do not find that Mr Murray’s behaviour was improper as alleged by the Claimant. Case No: 1405649/2023[22]On 24 May 2023, the Claimant raised a grievance regarding the redundancy process and failure to pay her Q4 bonus. I note that the letter was addressed to Richard (that is Richard Davies) and not Mr Mellor and appears to relate to complaints relating to her employment by BAM. The letter makes it clear that the Claimant is extremely disappointed not to have received the enhanced settlement package which she considered she had been promised and others had received previously.[23]On 25 May 2023, the Respondent restarted the redundancy process which had commenced prior to the transfer. The Claimant was sent a letter of the same date in which it said she was at risk of redundancy as a result of the proposal to implement a new structure which meant her role might go. It invited her to a consultation meeting on 30 May 2023 and informed of her right to be accompanied. There was some email discussion about whether the meeting could be moved so that the Claimant could be accompanied, but in an email on 26 May 2023 she agreed to attend alone.[24]On 30 May 2023, the meeting between Mr Murray and the Claimant took place by telephone and it was recorded by the Claimant without Mr Murray’s consent. The Claimant’s evidence was that she had not been provided with any evidence about the proposed restructure. She told Mr Mellor that she thought he had already made up his mind and that the process was a sham.[25]In the unagreed transcript that the Claimant disclosed, when asked about other potential toles in the business she stated: “I can’t see how there could be another role for me because of the small amount of roles that are in the company. I can’t do finance … I don’t want to do reception because that’s not, I am sure that I wouldn’t get the pay that I get from reception. I can’t do Olivia’s jkob, but she can’t do mine, so I just don’t know how you are going to run it.”[26]On the same day, Mr Murray also had a meeting on the phone with Ms Trickey. His evidence was that she was enthusiastic and would be very happy to take on new elements of the role if appointed. Ms Trickey confirmed this in her evidence and I accept she was willing to take on any new responsibilities the new role would require.[27]On 1 June 2023, Ms Bullen’s salary was increased from £30k to £42k backdated to 1 April 2023. The Respondent stated that this was to recognize the additional work she was carrying out, expressly picking up the Claimant’s work as she was not engaging fully during this time. Mr Davies explained that this was his concern, that he was afraid that Ms Bullen would otherwise leave her employment and that without her the business would not survive. It is the Claimant’s position that Ms Bullen was in fact doing her old job as from 1 April 2023. I found Mr Davies to be a careful and truthful witness and I accept that he was in a position to give the best evidence regarding Ms Bullen’s role and the rationale for the increase in her salary. Case No: 1405649/2023[28]On 2 June 2023, Mr Murray emailed the Claimant to say that he had investigated her grievance and to arrange for a teams meeting to share the results. The Claimant did not respond to that email.[29]Later on the same day, Mr Murray sent the Claimant a letter informing of her of the decision to dismiss by way of redundancy. It also informed her of her right to appeal.[30]On 9 June 2023, the Claimant’s solicitors appealed the decision and a letter setting out 7 grounds of appeal was sent to the Respondent.[31]On 16 June 2023, Mr Murray responded to the appeal with a simple one-line response to confirm he would not be overturning the decision. THE LAW Regulation 7(1) TUPE – protection from dismissal
THE LAW
[32]Regulation 7(1) of TUPE provides that: ‘where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee is to be treated… as unfairly dismissed if the sole or principal reason for the dismissal is the transfer’.[33]Reg 7(2) and (3) then goes on to stipulate that where the sole or principal reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce (‘an ETO reason’) of either the transferor or the transferee before or after a relevant transfer, Reg 7(1) ‘does not apply’ and the fairness of dismissal is to be judged by reference to S.98(4) of the Employment Rights Act 1996 (ERA), which sets out the standard ‘reasonableness test’ that applies to ordinary unfair dismissal.[34]This, it should be noted, is a question of fact to be determined by the employment tribunal in the circumstances of the case. A number of issues may be relevant to ascertaining the answer to that question, depending on the circumstances of the particular case.[35]The EAT in Marshall v Game Retail Ltd EAT 0276/13 held that tribunals considering automatically unfair dismissal in a TUPE context should apply the burden of proof in accordance with the guidance set down by the Court of Appeal in Kuzel v Roche Products Ltd 2008 ICR 799, CA (a case under S.103A ERA, which renders automatically unfair any dismissal which is for the sole or principal reason that the employee made a protected disclosure). Thus, the burden is technically on the employer to show the reason for dismissal. Usually, the employer seeks to discharge this by showing that dismissal is for one of the potentially fair reasons under S.98(1) and (2) ERA. If the employee asserts that the dismissal is instead for an automatically Case No: 1405649/2023 unfair reason, the employee acquires a burden of showing some evidence to support his or her case.[36]Proximity of the dismissal to the transfer is not conclusive, but it is strong evidence in the employee’s favour. The Court held that an employee dismissed on the day of the transfer due to her ongoing strained relationship with a colleague who was to become a director of the transferee was dismissed by reason of the transfer: Hare Wines Ltd v Kaur [2019] IRLR 555, CA. ETO Reason[37]Where an employer successfully shows that the sole or principal reason for dismissal was an ETO reason, the dismissal will not be automatically unfair under Reg 7(1). However, it might nevertheless be unfair under the general unfair dismissal provisions of the ERA. The burden of proof is on the employer to establish(1) an ETO reason(2) which entailed a change in the workforce.[38]Under Reg 7(3)(b), where a transfer-related dismissal is not rendered automatically unfair by Reg 7(1). The reason for dismissal for the purpose of S.98 ERA will be deemed to be a redundancy where the reason for dismissal fulfils the definition in S.139 ERA, in which case the employee’s normal rights on redundancy will apply. Genuine Redundancy Situation[39]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[40]Provided fewer employees are needed to do work of a particular kind there us a redundancy situation: McCrea v Cullen [1988] IRLR 30. It is important to consider whether the dismissal was attributable to the diminution or cessation of the requirements of the employer for employees to carry out work of a particular kind: Contract Bottling v Cave & Anor UKEAT/0525/12/DM Unfair Dismissal Case No: 1405649/2023[41]In this case the unfair dismissal claim was brought under Part X of the Employment Rights Act 1996. The main provision is section 98 which, so far as relevant, provides as follows: “(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –(a) the reason (or, if more than one, the principal reason) for the dismissal and(b) that it is either a reason falling within sub-section (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this sub-section if it ... is that the employee was redundant ... ... (4) Where the employer has fulfilled the requirements of sub-section (1), 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 reasonable 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”.[42]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[43]Employers should try and comply with the guidance given in R v British Coal Corpn and SoS for Trade & Industry, ex p Price [1994] IRLR 72.[44]It is for the employer to identify the pool of employees and the tribunal must decide whether the pool was within the band of reasonable Case No: 1405649/2023 responses: Capita Hartshead Ltd Byard [2012] ICR 1256; Kvaerner Oil & Gas Ltd v Parker [2003] 1 WQLUK 638.[45]A dismissal may be unfair if no consideration is given to finding alternative employment and the employer must take reasonable steps to do so: Thomas & Betts v Harding [1980] IRLR 255. A employee who is being made redundant may need to be offer an alternative even one of a lesser status: Avonmouth Construction v Shipway [1979] IRLR 14. An employer should not assume an employee will not take an alternative employment but must discuss it with them: Huddersfield Parcels v Sykes [1981] IRLR 115.[46]In a redundancy situation, the absence of an appeal does not of itself render the dismissal unfair: Gwynedd Council v Barratt [2021] IRLR 1028.[47]The proper application of the general test of fairness in section 98(4) has been considered by the EAT and higher courts on many occasions. The Employment Tribunal must not substitute its own decision for that of the employer: the question is rather whether the employer’s conduct fell within the “band of reasonable responses”: see Iceland Frozen Foods Limited v Jones [1982] IRLR 439 (EAT) as approved by the Court of Appeal in Post Office v Foley; HSBC Bank PLC v Madden [2000] IRLR 827.[48]In cases where the respondent has shown that the dismissal was a redundancy dismissal, guidance was given by the EAT in Williams v Compair Maxam Ltd [1982] IRLR 83. In general terms, employers acting reasonably will seek to act by giving as much warning as possible of impending redundancies to employees so they can take early steps to inform themselves of the relevant facts, consider positive alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. The employer will consult about the best means by which the desired management result can be achieved fairly, and the employer will seek to see whether, instead of dismissing an employee, he could offer him alternative employment. A reasonable employer will depart from these principles only where there is good reason to do so.[49]The Polkey principle is not confined to cases of procedural unfairness but has a broader application. The tribunal’s task is to apply ERA 1996 s 123(1) and award 'such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.[50]When applying Polkey, it “is inevitably an exercise about which there can be no absolute and scientific certainty. It is a predictive exercise. Evidence is needed to inform the prediction. It is important that a Tribunal should spell out, as best it can, what factors it takes into Case No: 1405649/2023 account in determining why it adopts a particular percentage. .......... It is, and has to be a process of assessment.” Per Langstaff J in Contract Bottling v Cave & McNaughton [2014] UKEAT 0100.[51]Section 207A of TULR(C)A provides that the tribunal must take into account whether or not the employer has complied with a relevant Code and has the power to award an uplift of up to 25%.[52]Section 123(6) of the ERA sets out the factors which must be considered when deciding whether the compensatory award should be reduced to reflect whether their own conduct caused or contributed to the dismissal. CONCLUSION Was the Sole or Principle Reason for the Dismissal the TUPE Transfer?
CONCLUSION
[53]It is clear that from at least November 2022, Mr Davies’ group companies which included BAM was in a difficult financial position. There had already been one round of redundancies in November 2022 during which the Claimant’s daughter has been made redundant. It is against this background that the Claimant approached Mr Davies to attempt to negotiate an enhanced redundancy package; she mentioned in one email that she felt a year’s pay would be fair. It is clear from multiple emails around that time that she wanted a substantial sum above the statutory minimum to reflect her long service. She also knew that Mr Davies had in the past been prepared to make enhanced settlement payments. Mr Davies made it clear in his written and oral evidence, that despite her request for redundancy, his preference was to restructure and to attempt to keep her in his employment. It is clear that at this point, he held her in high regard as a senior member of the team and wished to retain her.[54]In early March 2023, given the ongoing poor financial circumstances of the group companies, an administrator was appointed to the parent company and Mr Davies took advice regarding the broader group companies’ solvency. By 1 March 2023, Mr Davies had retained the services of an HR adviser Debbie Cohen. By email that day, he informed the Claimant that the consultation process would begin. The tribunal am satisfied that his email of the same date reflected his genuine hope that she would be actively involved in the consultation and help them work out the structure going forward. He was clear in his evidence that at this stage, his hope was that the Claimant would work with him and stay within the business.[55]At the 14 March 2023 consultation meeting, with Ms Trickey, she was fully engaged and very willing to explore other options available for her ongoing employment. By contrast, the Claimant just wanted to concentrate on her settlement package. She then went on sickness leave until 10 April 2023. Following on from the March meeting, Mr Davies took the view that the Claimant had disengaged from several aspects of her role, was not interested in collaborating with the restructure and was simply interested in a pay-off. Case No: 1405649/2023[56]Following the failed refinancing attempt in April 2023, Mr Davies decided to sell the assets in BAM. On 5 May 2023, the business of Bourne Space and its staff transferred by operation of TUPE to the Respondent. The evidence from both Mr Davies and Mr Mellor was that the business required further financial savings to be made post transfer and part of that process was the restarting or continuation of the redundancy process started when the business had been owned by BAM. I am satisfied that the business had been in financial difficulty since at least November 2022 and remained in similarly perilous situation after the transfer.[57]The tribunal is also satisfied that the protected conversation between Mr Mellor and the Claimant and the subsequent continuation of the redundancy process were carried out in good faith with the intention of streamlining the business by amalgamating two jobs into one. In effect, newco inherited the ongoing redundancy process from oldco. It is important, in the tribunal’s view, that Mr Davies was retained as a consultant by the Respondent. He knew the business in terms of structure and ongoing viability better than anyone and he had already carried out a round of redundancies in 2022. The tribunal finds it entirely reasonable that the Respondent would continue with the redundancy process which he had started, to find further financial savings.[58]Following on from the Respondent’s acquisition of the business, Mr Mellor took the decision that further restructuring would be needed going forward. As a consequence, Ms Trickey never started in the role as COM, despite the Respodnent’s original intentions during the redundancy process, but was instead moved from July 2023 across to a different company. The COM role responsibilities were thereafter picked up Mr Davies.[59]Whilst documentary evidence might have been helpful, there are no grounds to counter the explanation that Mr Davies’ companies were in poor financial positions and exposed with borrowing liabilities immediately prior to the transfer and that the Bourne Space business remained financially vulnerable post transfer. Whilst acknowledging the proximity of the dismissal to the transfer, the tribunal finds that the reason for the dismissal was the redundancy process which continued after the transfer. The tribunal is satisfied that the transfer was not the sole or principal reason for the dismissal but that it was entirely as a result of the need for ongoing cost cutting measures within the business. ETO Reason[60]The tribunal does not need to do so, but if it had to go on and consider the ETO reason it is satisfied that the reason for the redundancy dismissal was to reduce workforce numbers in line with Mr Davies’ original proposal. Case No: 1405649/2023 Ordinary Unfair Dismissal Redundancy[61]The Claimant sought to argue that the Respondent had failed to establish that there were actually structural changes to the business’ staffing needs. She highlighted that there was little evidence about the current structure and a disagreement about Ms Bullen’s current job description. The upshot, says the Claimant, is that the Respondent has not established a diminished requirement for staffing, as someone is required to do many if not all of the Claimant’s previous role and it cannot satisfy the tribunal that there is a genuine redundancy situation.[62]It is already set out that the tribunal accepted Mr Davies’ pre-transfer rationale for the need to rationalize and that he had identified a pool of two: the Claimant and Ms Trickey. As it was an amalgamation of roles, there were aspects which would be new to whoever was appointed. This was a small business which had been run by Mr Davies and he was intimately acquainted with the roles and responsibilities of each candidate in the pool. The process had commenced prior to the transfer and the tribunal finds it is entirely reasonable and proportionate that given the financial and time pressures at play, the Respondent adopted and restarted the same redundancy process post transfer as advised by its new consultant and can therefore establish an economic justification for the redundancy.[63]In relation to the actual reorganization, Mr Davies’ took the view that it was important to retain Ms Bullen in her role as she had stepped up to take up some of the duties which the Claimant should have been undertaking. The explanation given for Ms Bullen’s backdated pay increase was that she was vital to the business. Subsequently, following the Claimant’s dismissal and the further restructuring already set out, Mr Davies has picked up duties from the COM role with the effect that the duties carried out by the Claimant and Ms Trickey have been reorganized and reallocated amongst existing staff. TFewer employees were needed because of a reorganisation that resulted in a more efficient use of labour. The tribunal is satisfied that the dismissal was for reason of redundancy in accordance with section 139(1)(b) of the ERA 1996. Procedural Fairness Selection Pool[64]The Respondent decided to pool the Claimant and Ms Trickey. This adopted Mr Davies’ approach before the transfer. It was based on the fact that their management roles, being at the same or similar level, were to be amalgamed into the new position of COM to reduce business costs. Although here were arguments to say that the pool should have been wider, the tribunal does not find it was unreasonable for the Respondent to have adopted this pool in light of the proposed restructure of a small business. The proposed reorganisation would Case No: 1405649/2023 reduce the number of individuals required to undertake the management work at a that particular level. It is true that Ms Trickey ultimately never took up the new role however, it was a fluid situation whereby ultimately, the work was divided between Mr Davies and Ms Bullen in due course following a further restructuring. In the circumstances, the tribunal satisfied that this was a reasonable pool for selection. Selection Criteria[65]Mr Murray failed to explain to either candidate how the scoring metric would be applied. In fact, that was not explained until half-way through the hearing and even then, it was four headings with ‘scribbles’ relating only to Ms Trickey. There was no evidence as to how this scoring metric was applied to the Claimant. As at the time of the consultation meeting, the Respondent had failed to set out what the role of COM would comprise. Consultation[66]In the tribunal’s view there was a lack of proper consultation. The fluidity of the situation has already been noted, but ultimately, this was a consultation of two for an amalgamated role and was to be conducted in a week. The Respondent should have been clearer in its responsibilities during this process. It failed to provide the Claimant with an opportunity for to comment on her redundancy selection assessment and it did not share the selection criteria or outcome. Fair consultation involves the provision of adequate information on which an employee can respond and argue their case, which did not happen in this instance. Failure to Adjourn Consultation to Allow the Claimant to be Accompanied[67]The Respondent proposed to hold the consultation meeting on 30 May 2023. Initially, the Claimant requested that this be moved so she could be accompanied, but on 26 May 2023 agreed to attend alone. There is no suggestion that there was any undue pressure applied to the Claimant to attend alone and the tribunal does not find that this complaint is made out. Suitable Alternative Employment[68]As regards alternative employment, Mr Murray did raise this with the Claimant during their meeting on 30 May 2023, but the Claimant stated that given the small size of the business, there was no suitable alternative employment that she would be willing to undertake. She made it clear she did not want to take a job such a reception job which would be on a lower wage. Case No: 1405649/2023[69]Given the above comments regarding the fluidity of the situation, I am satisfied that the Head of Member Services role which was subsequently created was not in existence as at 2 June 2023. I note the pay increase paid to Ms Bullen but accept Mr Davies’ and Mr Murray’s subsequent evidence that her role was sufficiently less senior than that which the Claimant had undertaken. I also accept that the role of Head of Member Services which she was subsequently appointed to did not exist as at the time of the Claimant’s dismissal. I am therefore satisfied that at the material time, there was no suitable alternative role for the Claimant. Failed to Deal with the Grievance Properly[70]The grievance was raised on 24 May 2023 and Mr Murray stated in the grievance hearing on 30 May 2023 that he would deal with the grievance separately. He emailed the Claimant on 2 June 2023 to follow this up, but she did not reply to the email. The Claimant asked for a reply to her grievance in her appeal letter dated 9 June 2023. No substantive response was provided by the Respondent.[71]The tribunal is not satisfied on the balance of probabilities that Mr Murray carried out a proper investigation into the grievance. He invited her for a meeting on the day she was dismissed and never followed it up. It contained a valid complaint about the conduct of the redundancy process which was not addressed by the Respondent. Failed to deal with the Appeal Properly[72]The Claimant was notified of her redundancy on 2 June 2023 and the letter informed of her of her right to appeal. By letter dated 9 June 2023, solicitors for the Claimant appealed her redundancy and provided 7 grounds, not all of which have been raised in this claim. The letter requested a written response. On 16 June 2023, Mr Murray replied and simply stated: “I do not believe there are grounds for appeal so I am not overturning the decision.”[73]In redundancy cases the absence of any appeal or review procedure does not of itself make the dismissal unfair – that is to say, if the original selection for redundancy was in accordance with a fair procedure the absence of an appeal is not fatal to the employer's defence and it would be wrong to find a dismissal unfair only because of the failure to provide the employee with an appeal hearing. The absence of an appeal is one of the many factors to be considered in determining fairness. Did the Respondent act Reasonably in all the Circumstances in Treating Redundancy as a Reason to Dismiss?[74]It was not reasonable or sufficient for the Respondent to proceed in such an unstructured and opaque manner in relation to the redundancy Case No: 1405649/2023 process. For the reasons set out above, the tribunal concludes that dismissal of the Claimant for redundancy was procedurally unfair. The tribunal notes that it is not for it to stand in the shoes of the employer and decide what it would have done, but to consider whether the decision to dismiss was within the range of responses of a reasonable employer. The tribunal therefore concludes that it was not, and the Claimant’s claim of procedurally unfair dismissal succeeds. Polkey[75]The tribunal must then consider whether a fair procedure would have made a difference and if so to what extent, applying the principle established in Polkey v A E Dayton Services Ltd [1988] ICR142.[76]On the one hand, the Claimant made it clear to Mr Davies, and Mr Murray on 30 May 2023 meeting, that she could not and did not want to carry out elements of Ms Trickey’s job. She had previously made it clear to Mr Davies that she was not interested in learning new skills and expertise. Ms Trickey on the other hand was keen to step up and willing to undertake any new learning and training required. Given that both women had skills to offer in the job that the other did not, and without any further information regarding the scoring criteria, it is not possible for me to determine whether one is more likely that the other to have been successful.[77]Based on the evidence and its conclusions the tribunal assesses the probability of the claimant having been fairly selected for redundancy at 50%, which will result in a 50% reduction in any award made.[78]The tribunal does not consider that had a fair procedure been adopted the Claimant would have resigned in any event. It accepts her explanation that the discussions surrounding an exit package were solely based on achieving an amount greater than the statutory minimum and that otherwise she needed to keep her job for financial[79]For the reasons set out above, the tribunal is satisfied that it is just and equitable to award a 10% uplift on any compensation awarded. Contributory Fault[80]The tribunal finally turns to deal with contributory fault. The Respondent says that Claimant contributed entirely to her dismissal because she did not engage and did not positively offer alternatives during the consultation process.[81]Having found that there the process was unfair in the way in which it was conducted and most seriously the way in which the Respondent Case No: 1405649/2023 consulted, applied selection criteria, documented its decision making and dealt with her grievance, the tribunal is not satisfied that it is appropriate to make any such deduction and declines to do so. K Gibb _____________________________ Employment Judge Gibb 22 November 2024
ISSUES
[1]The Claimant issued proceedings dated 27 October 2023 in which she claimed(1) automatic unfair dismissal pursuant to Regulation 7(1) of TUPE as the sole or principal reason for her dismissal was the transfer, alternatively(2) unfair dismissal for substantive and procedural[2]The parties agreed a list of issues in advance and these were confirmed at the outset of the hearing as follows:(1) Was the sole or principal reason for the Claimant’s dismissal the TUPE transfer which took effect from 1 May 2023 or a reason connected with the transfer?(2) If the Tribunal find that the sole or principal reason for the Claimant’s dismissal was the TUPE transfer or a reason connected with the transfer, was there an economic, technical or organisational reason entailing changes in the workforce which would otherwise render the Claimant’s dismissal fair? Case No: 1405649/2023(3) R asserts that the sole or principal reason for the Claimant’s dismissal was either: 1. Redundancy; or 2. Some other substantial reason (‘SOSR’), namely a business reorganisation.(4) Was there a genuine redundancy situation within the meaning of s.139 ERA?(5) Did the Respondent adopt a fair procedure? The Claimant challenges the fairness of the procedure, and in particular alleges that:
ISSUES
[1]The Respondent mishandled the purported selection pool (comprising the Claimant’s role as Head of Bourne Space, and the separate role of Head of BAM).[2]The Respondent failed to apply fair and objective selection criteria to decide which of the two roles above would be made redundant.[3]The Respondent failed to adequately warn and consult with the Claimant.[4]The Respondent failed to adjourn the (apparent) consultation meeting to allow the Claimant to be accompanied.[5]The Respondent failed to take reasonable steps to find the Claimant suitable alternative employment, particularly, Commercial Operations Manager and Head of Member Services.[6]The Respondent failed to pause the redundancy process pending determination of the Claimant’s grievance of 24 May 2023 or otherwise to determine the Claimant’s grievance concurrently with the (alleged) redundancy consultation process.[7]The Respondent failed to deal with the Claimant’s appeal against dismissal fairly or at all. (6) Did the Respondent act reasonably in all the circumstances in treating the redundancy situation, or SOSR, as a sufficient reason to dismiss the Claimant? (7) If the Respondent did not follow a fair procedure, would the Claimant have been dismissed in any event and/or to what extent and when? (8) If the Respondent did not follow a fair procedure, would the Claimant have resigned in any event? Case No: 1405649/2023 (9) Did the Respondent fail to comply with ACAS CoP-1 by not hearing the Claimant’s grievance and by outright rejecting the Claimant’s dismissal appeal (per s.207A TULR(C)A)? If so, is it just and equitable for there to be an increase in any compensation awarded? If so, by how much? (10) If the Claimant’s dismissal was unfair, did the Claimant contribute to her dismissal by culpable conduct? PROCEDURE 3. The tribunal heard evidence from the Claimant. On the Respondent’s behalf, the tribunal heard evidence from Richard Davies (consultant retained by the Respondent who sold his shares in Bourne Asset Management Limited (“BAM”) to the Respondent); Andrew Mellor (sole director and shareholder of the Respondent) and Olivia Trickey (who had previously been employed by BAM and who TUPE transferred alongside the Claimant). 4. There was a tribunal bundle of 221 pages. Both counsel produced written submissions on the final day of the hearing. One additional document was produced during the hearing from Andrew Mellor. During cross examination, he referred to ‘scribbles’ he had made contemporaneously during a meeting with Ms Trickey on 30 May 2023. This was a page from a notebook which appeared to refer to a scoring of Ms Trickey against four columns. After considering the position, the note was included as evidence at page 158a of the bundle. 5. The tribunal considered all the evidence when making the decision in this case. THE FACTS 6. On 6 July 2006, the Claimant commenced employment with KBC Holdings Limited. There were various acquisitions and company transfers and in late 2022, she was transferred to Bourne Asset Management Limited (“BAM”) as Head of Bourne Space. Bourne Space comprises suites of serviced offices based in buildings around Bournemouth. Natalie Bullen was the Claimant’s assistance in this role. 7. Mr Davies’s evidence was that the Head of Bourne Space role included the running of the commercial building at Hinton Road as well as Bourne Space at the hotel site, Bourne Park. He explained that she was responsible for the operational business of Bourne Space as well as health and safety and facilities.
THE FACTS
[8]The Claimant did not agree that her responsibilities included all those stated in evidence by Mr Davies; for example, she disputed his assertion that she was responsible for health and safety. She said that this role included overall responsibility for the commercial operation of Case No: 1405649/2023 the business including pricing and negotiating rents, marketing and management of the team. There was no written job description setting out the scope of her role. On balance, the tribunal is satisfied that the Claimant’s role was senior and involved responsibility for the operational business of Bourne Space. It was self evidently a significantly more senior role than that of the assistant, Ms Bullen. The tribunal notes that following the later reorganization, the responsibilities were split between Mr Davies and Ms Bullen.[9]It was Mr Davies’ evidence, which was not seriously in dispute and which I accept, that the group of companies he owned by had been placed under increased financial pressure, particularly since the pandemic. In November 2022, post the mini budget, there were discussions about the financial state of the business, that required further restructuring which entailed a number of redundancies. Despite this, the group companies continued to experience financial difficulties and eventually Mr Davies took advice from an administrator regarding the group company solvency.[10]It is agreed between the parties that at a meeting on 19 January 2023, the Claimant raised the issue of redundancy with a severance package with Mr Davies. In an email dated 20 January 2023, Mr Davies reiterated that BAM had nearly gone into administration the previous year, that the business was low on cash reserves and he was not in a position to pay a ‘proper redundancy package’, that is, a payment above the statutory minimum level.[11]On 1 March 2023, following an in person meeting, Mr Davies emailed the Claimant to inform her that Debbie Cohen (HR Consultant from Streetwise HR Ltd) had been retained and that the company was about to begin a consultation process for redundancy.[12]On 14 March 2023, Mr Davies and Ms Cohen held consultation meetings with both candidates. Mr Davies’ evidence was that Ms Trickey was fully engaged and willing to explore the restructure. By contrast, he said that the Claimant just wanted to talk about a potential package. He said the Claimant made it clear she did not want to adapt or adjust her role. In her evidence, the Claimant said she couldn’t remember what had been talked about in that meeting. On the balance of probabilities, and given the Claimant’s inability to recall the latter, I accept Mr Davies’ evidence about the two meetings.[13]The 14 March 2023 email between Ms Cohen and Mr Davies confirmed that if no deal could be done with the Claimant, they would push forward with the redundancy with Ms Trickey and the Claimant in a pool and see which one scored the highest. I consider that this internal letter reflects a genuine intention to carry out a fair redundancy process.[14]On the same day, Mr Davies sent a letter to Ms Trickey and the Claimant informing them that he was proposing to merge their roles and create one full time role, Commercial and Operations Manager (“COM”). It stated that this meant they were at risk of redundancy, that Case No: 1405649/2023 they had now entered the consultation phase and that they would shortly be invited to a consultation meeting.[15]Following this meeting, the Claimant was absent from work until 10 April 2023. On 11 April 2024, Mr Davies wrote to Ms Cohen regarding a potential sale of one of the companies that owned the Hinton Road building. The proposal was to sell with right to use the Bourne Space brand. At this early stage, it was unclear which staff might transfer.[16]An email from Claimant dated 26 April 2023 records that there was a further discussion about severance, but that Mr Davies was only prepared to offer a statutory redundancy payment. He says this was on advice from the administrator given the state of the company finances and I accept his evidence on this. On the same day, Mr Davies wrote to Claimant to inform her that the company was being sold and that staff working for Bourne Space may transfer too.[17]On 28 April 2023, Mr Davies wrote to the Claimant to confirm that the sale was progressing and that she would be transferring under TUPE. The transfer took effect on 5 May 2023. It was Mr Davies’ evidence, which was not challenged, that immediately prior the transfer, BAM was the owner of the Bourne Space brand and serviced office business and it is that asset, plus the staff employed, who transferred when the Respondent purchased the shareholding in BAM.[18]Post transfer, Mr Davies was retained as an external consultation to assist with operational issues for the Respondent.[19]Between 3 and 5 May 2023, emails passed between DM, RD and DC regarding a potential severance package for the Claimant.[20]On 12 May 2023, Mr Murray proposed a meeting with the Claimant in order to undertake a protected conversation. This meeting took place by telephone later that day and was followed by a letter to the Claimant setting out a settlement agreement. In the proposal letter, Mr Murray indicated that if the Claimant did not accept the offer, he would then start a restructuring exercise.[21]On 19 May 2023, there was a further phone call between Mr Murray and the Claimant. It is the Claimant’s position that Mr Murray put her under pressure to accept the settlement offer, which was no more than the statutory minimum payment; he denied applying any such pressure. Having observed Mr Murray giving evidence, he spoke rapidly and sometimes spoke over those questioning him. I am satisfied that in business discussions, particularly over the phone, he is likely to come across as a strong personality. However, I note that it was five days before the Claimant mentioned her concerns by email; did not mention this in her grievance letter of the same date which complained about the redundancy process and absent any further evidence as to what was said - the Claimant retracted in her evidence that he had called her stupid - I do not find that Mr Murray’s behaviour was improper as alleged by the Claimant. Case No: 1405649/2023[22]On 24 May 2023, the Claimant raised a grievance regarding the redundancy process and failure to pay her Q4 bonus. I note that the letter was addressed to Richard (that is Richard Davies) and not Mr Mellor and appears to relate to complaints relating to her employment by BAM. The letter makes it clear that the Claimant is extremely disappointed not to have received the enhanced settlement package which she considered she had been promised and others had received previously.[23]On 25 May 2023, the Respondent restarted the redundancy process which had commenced prior to the transfer. The Claimant was sent a letter of the same date in which it said she was at risk of redundancy as a result of the proposal to implement a new structure which meant her role might go. It invited her to a consultation meeting on 30 May 2023 and informed of her right to be accompanied. There was some email discussion about whether the meeting could be moved so that the Claimant could be accompanied, but in an email on 26 May 2023 she agreed to attend alone.[24]On 30 May 2023, the meeting between Mr Murray and the Claimant took place by telephone and it was recorded by the Claimant without Mr Murray’s consent. The Claimant’s evidence was that she had not been provided with any evidence about the proposed restructure. She told Mr Mellor that she thought he had already made up his mind and that the process was a sham.[25]In the unagreed transcript that the Claimant disclosed, when asked about other potential toles in the business she stated: “I can’t see how there could be another role for me because of the small amount of roles that are in the company. I can’t do finance … I don’t want to do reception because that’s not, I am sure that I wouldn’t get the pay that I get from reception. I can’t do Olivia’s jkob, but she can’t do mine, so I just don’t know how you are going to run it.”[26]On the same day, Mr Murray also had a meeting on the phone with Ms Trickey. His evidence was that she was enthusiastic and would be very happy to take on new elements of the role if appointed. Ms Trickey confirmed this in her evidence and I accept she was willing to take on any new responsibilities the new role would require.[27]On 1 June 2023, Ms Bullen’s salary was increased from £30k to £42k backdated to 1 April 2023. The Respondent stated that this was to recognize the additional work she was carrying out, expressly picking up the Claimant’s work as she was not engaging fully during this time. Mr Davies explained that this was his concern, that he was afraid that Ms Bullen would otherwise leave her employment and that without her the business would not survive. It is the Claimant’s position that Ms Bullen was in fact doing her old job as from 1 April 2023. I found Mr Davies to be a careful and truthful witness and I accept that he was in a position to give the best evidence regarding Ms Bullen’s role and the rationale for the increase in her salary. Case No: 1405649/2023[28]On 2 June 2023, Mr Murray emailed the Claimant to say that he had investigated her grievance and to arrange for a teams meeting to share the results. The Claimant did not respond to that email.[29]Later on the same day, Mr Murray sent the Claimant a letter informing of her of the decision to dismiss by way of redundancy. It also informed her of her right to appeal.[30]On 9 June 2023, the Claimant’s solicitors appealed the decision and a letter setting out 7 grounds of appeal was sent to the Respondent.[31]On 16 June 2023, Mr Murray responded to the appeal with a simple one-line response to confirm he would not be overturning the decision. THE LAW Regulation 7(1) TUPE – protection from dismissal
THE LAW
[32]Regulation 7(1) of TUPE provides that: ‘where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee is to be treated… as unfairly dismissed if the sole or principal reason for the dismissal is the transfer’.[33]Reg 7(2) and (3) then goes on to stipulate that where the sole or principal reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce (‘an ETO reason’) of either the transferor or the transferee before or after a relevant transfer, Reg 7(1) ‘does not apply’ and the fairness of dismissal is to be judged by reference to S.98(4) of the Employment Rights Act 1996 (ERA), which sets out the standard ‘reasonableness test’ that applies to ordinary unfair dismissal.[34]This, it should be noted, is a question of fact to be determined by the employment tribunal in the circumstances of the case. A number of issues may be relevant to ascertaining the answer to that question, depending on the circumstances of the particular case.[35]The EAT in Marshall v Game Retail Ltd EAT 0276/13 held that tribunals considering automatically unfair dismissal in a TUPE context should apply the burden of proof in accordance with the guidance set down by the Court of Appeal in Kuzel v Roche Products Ltd 2008 ICR 799, CA (a case under S.103A ERA, which renders automatically unfair any dismissal which is for the sole or principal reason that the employee made a protected disclosure). Thus, the burden is technically on the employer to show the reason for dismissal. Usually, the employer seeks to discharge this by showing that dismissal is for one of the potentially fair reasons under S.98(1) and (2) ERA. If the employee asserts that the dismissal is instead for an automatically Case No: 1405649/2023 unfair reason, the employee acquires a burden of showing some evidence to support his or her case.[36]Proximity of the dismissal to the transfer is not conclusive, but it is strong evidence in the employee’s favour. The Court held that an employee dismissed on the day of the transfer due to her ongoing strained relationship with a colleague who was to become a director of the transferee was dismissed by reason of the transfer: Hare Wines Ltd v Kaur [2019] IRLR 555, CA. ETO Reason[37]Where an employer successfully shows that the sole or principal reason for dismissal was an ETO reason, the dismissal will not be automatically unfair under Reg 7(1). However, it might nevertheless be unfair under the general unfair dismissal provisions of the ERA. The burden of proof is on the employer to establish(1) an ETO reason(2) which entailed a change in the workforce.[38]Under Reg 7(3)(b), where a transfer-related dismissal is not rendered automatically unfair by Reg 7(1). The reason for dismissal for the purpose of S.98 ERA will be deemed to be a redundancy where the reason for dismissal fulfils the definition in S.139 ERA, in which case the employee’s normal rights on redundancy will apply. Genuine Redundancy Situation[39]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[40]Provided fewer employees are needed to do work of a particular kind there us a redundancy situation: McCrea v Cullen [1988] IRLR 30. It is important to consider whether the dismissal was attributable to the diminution or cessation of the requirements of the employer for employees to carry out work of a particular kind: Contract Bottling v Cave & Anor UKEAT/0525/12/DM Unfair Dismissal Case No: 1405649/2023[41]In this case the unfair dismissal claim was brought under Part X of the Employment Rights Act 1996. The main provision is section 98 which, so far as relevant, provides as follows: “(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –(a) the reason (or, if more than one, the principal reason) for the dismissal and(b) that it is either a reason falling within sub-section (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this sub-section if it ... is that the employee was redundant ... ... (4) Where the employer has fulfilled the requirements of sub-section (1), 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 reasonable 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”.[42]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[43]Employers should try and comply with the guidance given in R v British Coal Corpn and SoS for Trade & Industry, ex p Price [1994] IRLR 72.[44]It is for the employer to identify the pool of employees and the tribunal must decide whether the pool was within the band of reasonable Case No: 1405649/2023 responses: Capita Hartshead Ltd Byard [2012] ICR 1256; Kvaerner Oil & Gas Ltd v Parker [2003] 1 WQLUK 638.[45]A dismissal may be unfair if no consideration is given to finding alternative employment and the employer must take reasonable steps to do so: Thomas & Betts v Harding [1980] IRLR 255. A employee who is being made redundant may need to be offer an alternative even one of a lesser status: Avonmouth Construction v Shipway [1979] IRLR 14. An employer should not assume an employee will not take an alternative employment but must discuss it with them: Huddersfield Parcels v Sykes [1981] IRLR 115.[46]In a redundancy situation, the absence of an appeal does not of itself render the dismissal unfair: Gwynedd Council v Barratt [2021] IRLR 1028.[47]The proper application of the general test of fairness in section 98(4) has been considered by the EAT and higher courts on many occasions. The Employment Tribunal must not substitute its own decision for that of the employer: the question is rather whether the employer’s conduct fell within the “band of reasonable responses”: see Iceland Frozen Foods Limited v Jones [1982] IRLR 439 (EAT) as approved by the Court of Appeal in Post Office v Foley; HSBC Bank PLC v Madden [2000] IRLR 827.[48]In cases where the respondent has shown that the dismissal was a redundancy dismissal, guidance was given by the EAT in Williams v Compair Maxam Ltd [1982] IRLR 83. In general terms, employers acting reasonably will seek to act by giving as much warning as possible of impending redundancies to employees so they can take early steps to inform themselves of the relevant facts, consider positive alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. The employer will consult about the best means by which the desired management result can be achieved fairly, and the employer will seek to see whether, instead of dismissing an employee, he could offer him alternative employment. A reasonable employer will depart from these principles only where there is good reason to do so.[49]The Polkey principle is not confined to cases of procedural unfairness but has a broader application. The tribunal’s task is to apply ERA 1996 s 123(1) and award 'such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.[50]When applying Polkey, it “is inevitably an exercise about which there can be no absolute and scientific certainty. It is a predictive exercise. Evidence is needed to inform the prediction. It is important that a Tribunal should spell out, as best it can, what factors it takes into Case No: 1405649/2023 account in determining why it adopts a particular percentage. .......... It is, and has to be a process of assessment.” Per Langstaff J in Contract Bottling v Cave & McNaughton [2014] UKEAT 0100.[51]Section 207A of TULR(C)A provides that the tribunal must take into account whether or not the employer has complied with a relevant Code and has the power to award an uplift of up to 25%.[52]Section 123(6) of the ERA sets out the factors which must be considered when deciding whether the compensatory award should be reduced to reflect whether their own conduct caused or contributed to the dismissal. CONCLUSION Was the Sole or Principle Reason for the Dismissal the TUPE Transfer?
CONCLUSION
[53]It is clear that from at least November 2022, Mr Davies’ group companies which included BAM was in a difficult financial position. There had already been one round of redundancies in November 2022 during which the Claimant’s daughter has been made redundant. It is against this background that the Claimant approached Mr Davies to attempt to negotiate an enhanced redundancy package; she mentioned in one email that she felt a year’s pay would be fair. It is clear from multiple emails around that time that she wanted a substantial sum above the statutory minimum to reflect her long service. She also knew that Mr Davies had in the past been prepared to make enhanced settlement payments. Mr Davies made it clear in his written and oral evidence, that despite her request for redundancy, his preference was to restructure and to attempt to keep her in his employment. It is clear that at this point, he held her in high regard as a senior member of the team and wished to retain her.[54]In early March 2023, given the ongoing poor financial circumstances of the group companies, an administrator was appointed to the parent company and Mr Davies took advice regarding the broader group companies’ solvency. By 1 March 2023, Mr Davies had retained the services of an HR adviser Debbie Cohen. By email that day, he informed the Claimant that the consultation process would begin. The tribunal am satisfied that his email of the same date reflected his genuine hope that she would be actively involved in the consultation and help them work out the structure going forward. He was clear in his evidence that at this stage, his hope was that the Claimant would work with him and stay within the business.[55]At the 14 March 2023 consultation meeting, with Ms Trickey, she was fully engaged and very willing to explore other options available for her ongoing employment. By contrast, the Claimant just wanted to concentrate on her settlement package. She then went on sickness leave until 10 April 2023. Following on from the March meeting, Mr Davies took the view that the Claimant had disengaged from several aspects of her role, was not interested in collaborating with the restructure and was simply interested in a pay-off. Case No: 1405649/2023[56]Following the failed refinancing attempt in April 2023, Mr Davies decided to sell the assets in BAM. On 5 May 2023, the business of Bourne Space and its staff transferred by operation of TUPE to the Respondent. The evidence from both Mr Davies and Mr Mellor was that the business required further financial savings to be made post transfer and part of that process was the restarting or continuation of the redundancy process started when the business had been owned by BAM. I am satisfied that the business had been in financial difficulty since at least November 2022 and remained in similarly perilous situation after the transfer.[57]The tribunal is also satisfied that the protected conversation between Mr Mellor and the Claimant and the subsequent continuation of the redundancy process were carried out in good faith with the intention of streamlining the business by amalgamating two jobs into one. In effect, newco inherited the ongoing redundancy process from oldco. It is important, in the tribunal’s view, that Mr Davies was retained as a consultant by the Respondent. He knew the business in terms of structure and ongoing viability better than anyone and he had already carried out a round of redundancies in 2022. The tribunal finds it entirely reasonable that the Respondent would continue with the redundancy process which he had started, to find further financial savings.[58]Following on from the Respondent’s acquisition of the business, Mr Mellor took the decision that further restructuring would be needed going forward. As a consequence, Ms Trickey never started in the role as COM, despite the Respodnent’s original intentions during the redundancy process, but was instead moved from July 2023 across to a different company. The COM role responsibilities were thereafter picked up Mr Davies.[59]Whilst documentary evidence might have been helpful, there are no grounds to counter the explanation that Mr Davies’ companies were in poor financial positions and exposed with borrowing liabilities immediately prior to the transfer and that the Bourne Space business remained financially vulnerable post transfer. Whilst acknowledging the proximity of the dismissal to the transfer, the tribunal finds that the reason for the dismissal was the redundancy process which continued after the transfer. The tribunal is satisfied that the transfer was not the sole or principal reason for the dismissal but that it was entirely as a result of the need for ongoing cost cutting measures within the business. ETO Reason[60]The tribunal does not need to do so, but if it had to go on and consider the ETO reason it is satisfied that the reason for the redundancy dismissal was to reduce workforce numbers in line with Mr Davies’ original proposal. Case No: 1405649/2023 Ordinary Unfair Dismissal Redundancy[61]The Claimant sought to argue that the Respondent had failed to establish that there were actually structural changes to the business’ staffing needs. She highlighted that there was little evidence about the current structure and a disagreement about Ms Bullen’s current job description. The upshot, says the Claimant, is that the Respondent has not established a diminished requirement for staffing, as someone is required to do many if not all of the Claimant’s previous role and it cannot satisfy the tribunal that there is a genuine redundancy situation.[62]It is already set out that the tribunal accepted Mr Davies’ pre-transfer rationale for the need to rationalize and that he had identified a pool of two: the Claimant and Ms Trickey. As it was an amalgamation of roles, there were aspects which would be new to whoever was appointed. This was a small business which had been run by Mr Davies and he was intimately acquainted with the roles and responsibilities of each candidate in the pool. The process had commenced prior to the transfer and the tribunal finds it is entirely reasonable and proportionate that given the financial and time pressures at play, the Respondent adopted and restarted the same redundancy process post transfer as advised by its new consultant and can therefore establish an economic justification for the redundancy.[63]In relation to the actual reorganization, Mr Davies’ took the view that it was important to retain Ms Bullen in her role as she had stepped up to take up some of the duties which the Claimant should have been undertaking. The explanation given for Ms Bullen’s backdated pay increase was that she was vital to the business. Subsequently, following the Claimant’s dismissal and the further restructuring already set out, Mr Davies has picked up duties from the COM role with the effect that the duties carried out by the Claimant and Ms Trickey have been reorganized and reallocated amongst existing staff. TFewer employees were needed because of a reorganisation that resulted in a more efficient use of labour. The tribunal is satisfied that the dismissal was for reason of redundancy in accordance with section 139(1)(b) of the ERA 1996. Procedural Fairness Selection Pool[64]The Respondent decided to pool the Claimant and Ms Trickey. This adopted Mr Davies’ approach before the transfer. It was based on the fact that their management roles, being at the same or similar level, were to be amalgamed into the new position of COM to reduce business costs. Although here were arguments to say that the pool should have been wider, the tribunal does not find it was unreasonable for the Respondent to have adopted this pool in light of the proposed restructure of a small business. The proposed reorganisation would Case No: 1405649/2023 reduce the number of individuals required to undertake the management work at a that particular level. It is true that Ms Trickey ultimately never took up the new role however, it was a fluid situation whereby ultimately, the work was divided between Mr Davies and Ms Bullen in due course following a further restructuring. In the circumstances, the tribunal satisfied that this was a reasonable pool for selection. Selection Criteria[65]Mr Murray failed to explain to either candidate how the scoring metric would be applied. In fact, that was not explained until half-way through the hearing and even then, it was four headings with ‘scribbles’ relating only to Ms Trickey. There was no evidence as to how this scoring metric was applied to the Claimant. As at the time of the consultation meeting, the Respondent had failed to set out what the role of COM would comprise. Consultation[66]In the tribunal’s view there was a lack of proper consultation. The fluidity of the situation has already been noted, but ultimately, this was a consultation of two for an amalgamated role and was to be conducted in a week. The Respondent should have been clearer in its responsibilities during this process. It failed to provide the Claimant with an opportunity for to comment on her redundancy selection assessment and it did not share the selection criteria or outcome. Fair consultation involves the provision of adequate information on which an employee can respond and argue their case, which did not happen in this instance. Failure to Adjourn Consultation to Allow the Claimant to be Accompanied[67]The Respondent proposed to hold the consultation meeting on 30 May 2023. Initially, the Claimant requested that this be moved so she could be accompanied, but on 26 May 2023 agreed to attend alone. There is no suggestion that there was any undue pressure applied to the Claimant to attend alone and the tribunal does not find that this complaint is made out. Suitable Alternative Employment[68]As regards alternative employment, Mr Murray did raise this with the Claimant during their meeting on 30 May 2023, but the Claimant stated that given the small size of the business, there was no suitable alternative employment that she would be willing to undertake. She made it clear she did not want to take a job such a reception job which would be on a lower wage. Case No: 1405649/2023[69]Given the above comments regarding the fluidity of the situation, I am satisfied that the Head of Member Services role which was subsequently created was not in existence as at 2 June 2023. I note the pay increase paid to Ms Bullen but accept Mr Davies’ and Mr Murray’s subsequent evidence that her role was sufficiently less senior than that which the Claimant had undertaken. I also accept that the role of Head of Member Services which she was subsequently appointed to did not exist as at the time of the Claimant’s dismissal. I am therefore satisfied that at the material time, there was no suitable alternative role for the Claimant. Failed to Deal with the Grievance Properly[70]The grievance was raised on 24 May 2023 and Mr Murray stated in the grievance hearing on 30 May 2023 that he would deal with the grievance separately. He emailed the Claimant on 2 June 2023 to follow this up, but she did not reply to the email. The Claimant asked for a reply to her grievance in her appeal letter dated 9 June 2023. No substantive response was provided by the Respondent.[71]The tribunal is not satisfied on the balance of probabilities that Mr Murray carried out a proper investigation into the grievance. He invited her for a meeting on the day she was dismissed and never followed it up. It contained a valid complaint about the conduct of the redundancy process which was not addressed by the Respondent. Failed to deal with the Appeal Properly[72]The Claimant was notified of her redundancy on 2 June 2023 and the letter informed of her of her right to appeal. By letter dated 9 June 2023, solicitors for the Claimant appealed her redundancy and provided 7 grounds, not all of which have been raised in this claim. The letter requested a written response. On 16 June 2023, Mr Murray replied and simply stated: “I do not believe there are grounds for appeal so I am not overturning the decision.”[73]In redundancy cases the absence of any appeal or review procedure does not of itself make the dismissal unfair – that is to say, if the original selection for redundancy was in accordance with a fair procedure the absence of an appeal is not fatal to the employer's defence and it would be wrong to find a dismissal unfair only because of the failure to provide the employee with an appeal hearing. The absence of an appeal is one of the many factors to be considered in determining fairness. Did the Respondent act Reasonably in all the Circumstances in Treating Redundancy as a Reason to Dismiss?[74]It was not reasonable or sufficient for the Respondent to proceed in such an unstructured and opaque manner in relation to the redundancy Case No: 1405649/2023 process. For the reasons set out above, the tribunal concludes that dismissal of the Claimant for redundancy was procedurally unfair. The tribunal notes that it is not for it to stand in the shoes of the employer and decide what it would have done, but to consider whether the decision to dismiss was within the range of responses of a reasonable employer. The tribunal therefore concludes that it was not, and the Claimant’s claim of procedurally unfair dismissal succeeds. Polkey[75]The tribunal must then consider whether a fair procedure would have made a difference and if so to what extent, applying the principle established in Polkey v A E Dayton Services Ltd [1988] ICR142.[76]On the one hand, the Claimant made it clear to Mr Davies, and Mr Murray on 30 May 2023 meeting, that she could not and did not want to carry out elements of Ms Trickey’s job. She had previously made it clear to Mr Davies that she was not interested in learning new skills and expertise. Ms Trickey on the other hand was keen to step up and willing to undertake any new learning and training required. Given that both women had skills to offer in the job that the other did not, and without any further information regarding the scoring criteria, it is not possible for me to determine whether one is more likely that the other to have been successful.[77]Based on the evidence and its conclusions the tribunal assesses the probability of the claimant having been fairly selected for redundancy at 50%, which will result in a 50% reduction in any award made.[78]The tribunal does not consider that had a fair procedure been adopted the Claimant would have resigned in any event. It accepts her explanation that the discussions surrounding an exit package were solely based on achieving an amount greater than the statutory minimum and that otherwise she needed to keep her job for financial[79]For the reasons set out above, the tribunal is satisfied that it is just and equitable to award a 10% uplift on any compensation awarded. Contributory Fault[80]The tribunal finally turns to deal with contributory fault. The Respondent says that Claimant contributed entirely to her dismissal because she did not engage and did not positively offer alternatives during the consultation process.[81]Having found that there the process was unfair in the way in which it was conducted and most seriously the way in which the Respondent Case No: 1405649/2023 consulted, applied selection criteria, documented its decision making and dealt with her grievance, the tribunal is not satisfied that it is appropriate to make any such deduction and declines to do so. K Gibb _____________________________ Employment Judge Gibb 22 November 2024
ISSUES
[1]The Claimant issued proceedings dated 27 October 2023 in which she claimed(1) automatic unfair dismissal pursuant to Regulation 7(1) of TUPE as the sole or principal reason for her dismissal was the transfer, alternatively(2) unfair dismissal for substantive and procedural[2]The parties agreed a list of issues in advance and these were confirmed at the outset of the hearing as follows:(1) Was the sole or principal reason for the Claimant’s dismissal the TUPE transfer which took effect from 1 May 2023 or a reason connected with the transfer?(2) If the Tribunal find that the sole or principal reason for the Claimant’s dismissal was the TUPE transfer or a reason connected with the transfer, was there an economic, technical or organisational reason entailing changes in the workforce which would otherwise render the Claimant’s dismissal fair? Case No: 1405649/2023(3) R asserts that the sole or principal reason for the Claimant’s dismissal was either: 1. Redundancy; or 2. Some other substantial reason (‘SOSR’), namely a business reorganisation.(4) Was there a genuine redundancy situation within the meaning of s.139 ERA?(5) Did the Respondent adopt a fair procedure? The Claimant challenges the fairness of the procedure, and in particular alleges that:
ISSUES
[1]The Respondent mishandled the purported selection pool (comprising the Claimant’s role as Head of Bourne Space, and the separate role of Head of BAM).[2]The Respondent failed to apply fair and objective selection criteria to decide which of the two roles above would be made redundant.[3]The Respondent failed to adequately warn and consult with the Claimant.[4]The Respondent failed to adjourn the (apparent) consultation meeting to allow the Claimant to be accompanied.[5]The Respondent failed to take reasonable steps to find the Claimant suitable alternative employment, particularly, Commercial Operations Manager and Head of Member Services.[6]The Respondent failed to pause the redundancy process pending determination of the Claimant’s grievance of 24 May 2023 or otherwise to determine the Claimant’s grievance concurrently with the (alleged) redundancy consultation process.[7]The Respondent failed to deal with the Claimant’s appeal against dismissal fairly or at all. (6) Did the Respondent act reasonably in all the circumstances in treating the redundancy situation, or SOSR, as a sufficient reason to dismiss the Claimant? (7) If the Respondent did not follow a fair procedure, would the Claimant have been dismissed in any event and/or to what extent and when? (8) If the Respondent did not follow a fair procedure, would the Claimant have resigned in any event? Case No: 1405649/2023 (9) Did the Respondent fail to comply with ACAS CoP-1 by not hearing the Claimant’s grievance and by outright rejecting the Claimant’s dismissal appeal (per s.207A TULR(C)A)? If so, is it just and equitable for there to be an increase in any compensation awarded? If so, by how much? (10) If the Claimant’s dismissal was unfair, did the Claimant contribute to her dismissal by culpable conduct? PROCEDURE 3. The tribunal heard evidence from the Claimant. On the Respondent’s behalf, the tribunal heard evidence from Richard Davies (consultant retained by the Respondent who sold his shares in Bourne Asset Management Limited (“BAM”) to the Respondent); Andrew Mellor (sole director and shareholder of the Respondent) and Olivia Trickey (who had previously been employed by BAM and who TUPE transferred alongside the Claimant). 4. There was a tribunal bundle of 221 pages. Both counsel produced written submissions on the final day of the hearing. One additional document was produced during the hearing from Andrew Mellor. During cross examination, he referred to ‘scribbles’ he had made contemporaneously during a meeting with Ms Trickey on 30 May 2023. This was a page from a notebook which appeared to refer to a scoring of Ms Trickey against four columns. After considering the position, the note was included as evidence at page 158a of the bundle. 5. The tribunal considered all the evidence when making the decision in this case. THE FACTS 6. On 6 July 2006, the Claimant commenced employment with KBC Holdings Limited. There were various acquisitions and company transfers and in late 2022, she was transferred to Bourne Asset Management Limited (“BAM”) as Head of Bourne Space. Bourne Space comprises suites of serviced offices based in buildings around Bournemouth. Natalie Bullen was the Claimant’s assistance in this role. 7. Mr Davies’s evidence was that the Head of Bourne Space role included the running of the commercial building at Hinton Road as well as Bourne Space at the hotel site, Bourne Park. He explained that she was responsible for the operational business of Bourne Space as well as health and safety and facilities.
THE FACTS
[8]The Claimant did not agree that her responsibilities included all those stated in evidence by Mr Davies; for example, she disputed his assertion that she was responsible for health and safety. She said that this role included overall responsibility for the commercial operation of Case No: 1405649/2023 the business including pricing and negotiating rents, marketing and management of the team. There was no written job description setting out the scope of her role. On balance, the tribunal is satisfied that the Claimant’s role was senior and involved responsibility for the operational business of Bourne Space. It was self evidently a significantly more senior role than that of the assistant, Ms Bullen. The tribunal notes that following the later reorganization, the responsibilities were split between Mr Davies and Ms Bullen.[9]It was Mr Davies’ evidence, which was not seriously in dispute and which I accept, that the group of companies he owned by had been placed under increased financial pressure, particularly since the pandemic. In November 2022, post the mini budget, there were discussions about the financial state of the business, that required further restructuring which entailed a number of redundancies. Despite this, the group companies continued to experience financial difficulties and eventually Mr Davies took advice from an administrator regarding the group company solvency.[10]It is agreed between the parties that at a meeting on 19 January 2023, the Claimant raised the issue of redundancy with a severance package with Mr Davies. In an email dated 20 January 2023, Mr Davies reiterated that BAM had nearly gone into administration the previous year, that the business was low on cash reserves and he was not in a position to pay a ‘proper redundancy package’, that is, a payment above the statutory minimum level.[11]On 1 March 2023, following an in person meeting, Mr Davies emailed the Claimant to inform her that Debbie Cohen (HR Consultant from Streetwise HR Ltd) had been retained and that the company was about to begin a consultation process for redundancy.[12]On 14 March 2023, Mr Davies and Ms Cohen held consultation meetings with both candidates. Mr Davies’ evidence was that Ms Trickey was fully engaged and willing to explore the restructure. By contrast, he said that the Claimant just wanted to talk about a potential package. He said the Claimant made it clear she did not want to adapt or adjust her role. In her evidence, the Claimant said she couldn’t remember what had been talked about in that meeting. On the balance of probabilities, and given the Claimant’s inability to recall the latter, I accept Mr Davies’ evidence about the two meetings.[13]The 14 March 2023 email between Ms Cohen and Mr Davies confirmed that if no deal could be done with the Claimant, they would push forward with the redundancy with Ms Trickey and the Claimant in a pool and see which one scored the highest. I consider that this internal letter reflects a genuine intention to carry out a fair redundancy process.[14]On the same day, Mr Davies sent a letter to Ms Trickey and the Claimant informing them that he was proposing to merge their roles and create one full time role, Commercial and Operations Manager (“COM”). It stated that this meant they were at risk of redundancy, that Case No: 1405649/2023 they had now entered the consultation phase and that they would shortly be invited to a consultation meeting.[15]Following this meeting, the Claimant was absent from work until 10 April 2023. On 11 April 2024, Mr Davies wrote to Ms Cohen regarding a potential sale of one of the companies that owned the Hinton Road building. The proposal was to sell with right to use the Bourne Space brand. At this early stage, it was unclear which staff might transfer.[16]An email from Claimant dated 26 April 2023 records that there was a further discussion about severance, but that Mr Davies was only prepared to offer a statutory redundancy payment. He says this was on advice from the administrator given the state of the company finances and I accept his evidence on this. On the same day, Mr Davies wrote to Claimant to inform her that the company was being sold and that staff working for Bourne Space may transfer too.[17]On 28 April 2023, Mr Davies wrote to the Claimant to confirm that the sale was progressing and that she would be transferring under TUPE. The transfer took effect on 5 May 2023. It was Mr Davies’ evidence, which was not challenged, that immediately prior the transfer, BAM was the owner of the Bourne Space brand and serviced office business and it is that asset, plus the staff employed, who transferred when the Respondent purchased the shareholding in BAM.[18]Post transfer, Mr Davies was retained as an external consultation to assist with operational issues for the Respondent.[19]Between 3 and 5 May 2023, emails passed between DM, RD and DC regarding a potential severance package for the Claimant.[20]On 12 May 2023, Mr Murray proposed a meeting with the Claimant in order to undertake a protected conversation. This meeting took place by telephone later that day and was followed by a letter to the Claimant setting out a settlement agreement. In the proposal letter, Mr Murray indicated that if the Claimant did not accept the offer, he would then start a restructuring exercise.[21]On 19 May 2023, there was a further phone call between Mr Murray and the Claimant. It is the Claimant’s position that Mr Murray put her under pressure to accept the settlement offer, which was no more than the statutory minimum payment; he denied applying any such pressure. Having observed Mr Murray giving evidence, he spoke rapidly and sometimes spoke over those questioning him. I am satisfied that in business discussions, particularly over the phone, he is likely to come across as a strong personality. However, I note that it was five days before the Claimant mentioned her concerns by email; did not mention this in her grievance letter of the same date which complained about the redundancy process and absent any further evidence as to what was said - the Claimant retracted in her evidence that he had called her stupid - I do not find that Mr Murray’s behaviour was improper as alleged by the Claimant. Case No: 1405649/2023[22]On 24 May 2023, the Claimant raised a grievance regarding the redundancy process and failure to pay her Q4 bonus. I note that the letter was addressed to Richard (that is Richard Davies) and not Mr Mellor and appears to relate to complaints relating to her employment by BAM. The letter makes it clear that the Claimant is extremely disappointed not to have received the enhanced settlement package which she considered she had been promised and others had received previously.[23]On 25 May 2023, the Respondent restarted the redundancy process which had commenced prior to the transfer. The Claimant was sent a letter of the same date in which it said she was at risk of redundancy as a result of the proposal to implement a new structure which meant her role might go. It invited her to a consultation meeting on 30 May 2023 and informed of her right to be accompanied. There was some email discussion about whether the meeting could be moved so that the Claimant could be accompanied, but in an email on 26 May 2023 she agreed to attend alone.[24]On 30 May 2023, the meeting between Mr Murray and the Claimant took place by telephone and it was recorded by the Claimant without Mr Murray’s consent. The Claimant’s evidence was that she had not been provided with any evidence about the proposed restructure. She told Mr Mellor that she thought he had already made up his mind and that the process was a sham.[25]In the unagreed transcript that the Claimant disclosed, when asked about other potential toles in the business she stated: “I can’t see how there could be another role for me because of the small amount of roles that are in the company. I can’t do finance … I don’t want to do reception because that’s not, I am sure that I wouldn’t get the pay that I get from reception. I can’t do Olivia’s jkob, but she can’t do mine, so I just don’t know how you are going to run it.”[26]On the same day, Mr Murray also had a meeting on the phone with Ms Trickey. His evidence was that she was enthusiastic and would be very happy to take on new elements of the role if appointed. Ms Trickey confirmed this in her evidence and I accept she was willing to take on any new responsibilities the new role would require.[27]On 1 June 2023, Ms Bullen’s salary was increased from £30k to £42k backdated to 1 April 2023. The Respondent stated that this was to recognize the additional work she was carrying out, expressly picking up the Claimant’s work as she was not engaging fully during this time. Mr Davies explained that this was his concern, that he was afraid that Ms Bullen would otherwise leave her employment and that without her the business would not survive. It is the Claimant’s position that Ms Bullen was in fact doing her old job as from 1 April 2023. I found Mr Davies to be a careful and truthful witness and I accept that he was in a position to give the best evidence regarding Ms Bullen’s role and the rationale for the increase in her salary. Case No: 1405649/2023[28]On 2 June 2023, Mr Murray emailed the Claimant to say that he had investigated her grievance and to arrange for a teams meeting to share the results. The Claimant did not respond to that email.[29]Later on the same day, Mr Murray sent the Claimant a letter informing of her of the decision to dismiss by way of redundancy. It also informed her of her right to appeal.[30]On 9 June 2023, the Claimant’s solicitors appealed the decision and a letter setting out 7 grounds of appeal was sent to the Respondent.[31]On 16 June 2023, Mr Murray responded to the appeal with a simple one-line response to confirm he would not be overturning the decision. THE LAW Regulation 7(1) TUPE – protection from dismissal
THE LAW
[32]Regulation 7(1) of TUPE provides that: ‘where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee is to be treated… as unfairly dismissed if the sole or principal reason for the dismissal is the transfer’.[33]Reg 7(2) and (3) then goes on to stipulate that where the sole or principal reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce (‘an ETO reason’) of either the transferor or the transferee before or after a relevant transfer, Reg 7(1) ‘does not apply’ and the fairness of dismissal is to be judged by reference to S.98(4) of the Employment Rights Act 1996 (ERA), which sets out the standard ‘reasonableness test’ that applies to ordinary unfair dismissal.[34]This, it should be noted, is a question of fact to be determined by the employment tribunal in the circumstances of the case. A number of issues may be relevant to ascertaining the answer to that question, depending on the circumstances of the particular case.[35]The EAT in Marshall v Game Retail Ltd EAT 0276/13 held that tribunals considering automatically unfair dismissal in a TUPE context should apply the burden of proof in accordance with the guidance set down by the Court of Appeal in Kuzel v Roche Products Ltd 2008 ICR 799, CA (a case under S.103A ERA, which renders automatically unfair any dismissal which is for the sole or principal reason that the employee made a protected disclosure). Thus, the burden is technically on the employer to show the reason for dismissal. Usually, the employer seeks to discharge this by showing that dismissal is for one of the potentially fair reasons under S.98(1) and (2) ERA. If the employee asserts that the dismissal is instead for an automatically Case No: 1405649/2023 unfair reason, the employee acquires a burden of showing some evidence to support his or her case.[36]Proximity of the dismissal to the transfer is not conclusive, but it is strong evidence in the employee’s favour. The Court held that an employee dismissed on the day of the transfer due to her ongoing strained relationship with a colleague who was to become a director of the transferee was dismissed by reason of the transfer: Hare Wines Ltd v Kaur [2019] IRLR 555, CA. ETO Reason[37]Where an employer successfully shows that the sole or principal reason for dismissal was an ETO reason, the dismissal will not be automatically unfair under Reg 7(1). However, it might nevertheless be unfair under the general unfair dismissal provisions of the ERA. The burden of proof is on the employer to establish(1) an ETO reason(2) which entailed a change in the workforce.[38]Under Reg 7(3)(b), where a transfer-related dismissal is not rendered automatically unfair by Reg 7(1). The reason for dismissal for the purpose of S.98 ERA will be deemed to be a redundancy where the reason for dismissal fulfils the definition in S.139 ERA, in which case the employee’s normal rights on redundancy will apply. Genuine Redundancy Situation[39]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[40]Provided fewer employees are needed to do work of a particular kind there us a redundancy situation: McCrea v Cullen [1988] IRLR 30. It is important to consider whether the dismissal was attributable to the diminution or cessation of the requirements of the employer for employees to carry out work of a particular kind: Contract Bottling v Cave & Anor UKEAT/0525/12/DM Unfair Dismissal Case No: 1405649/2023[41]In this case the unfair dismissal claim was brought under Part X of the Employment Rights Act 1996. The main provision is section 98 which, so far as relevant, provides as follows: “(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –(a) the reason (or, if more than one, the principal reason) for the dismissal and(b) that it is either a reason falling within sub-section (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this sub-section if it ... is that the employee was redundant ... ... (4) Where the employer has fulfilled the requirements of sub-section (1), 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 reasonable 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”.[42]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[43]Employers should try and comply with the guidance given in R v British Coal Corpn and SoS for Trade & Industry, ex p Price [1994] IRLR 72.[44]It is for the employer to identify the pool of employees and the tribunal must decide whether the pool was within the band of reasonable Case No: 1405649/2023 responses: Capita Hartshead Ltd Byard [2012] ICR 1256; Kvaerner Oil & Gas Ltd v Parker [2003] 1 WQLUK 638.[45]A dismissal may be unfair if no consideration is given to finding alternative employment and the employer must take reasonable steps to do so: Thomas & Betts v Harding [1980] IRLR 255. A employee who is being made redundant may need to be offer an alternative even one of a lesser status: Avonmouth Construction v Shipway [1979] IRLR 14. An employer should not assume an employee will not take an alternative employment but must discuss it with them: Huddersfield Parcels v Sykes [1981] IRLR 115.[46]In a redundancy situation, the absence of an appeal does not of itself render the dismissal unfair: Gwynedd Council v Barratt [2021] IRLR 1028.[47]The proper application of the general test of fairness in section 98(4) has been considered by the EAT and higher courts on many occasions. The Employment Tribunal must not substitute its own decision for that of the employer: the question is rather whether the employer’s conduct fell within the “band of reasonable responses”: see Iceland Frozen Foods Limited v Jones [1982] IRLR 439 (EAT) as approved by the Court of Appeal in Post Office v Foley; HSBC Bank PLC v Madden [2000] IRLR 827.[48]In cases where the respondent has shown that the dismissal was a redundancy dismissal, guidance was given by the EAT in Williams v Compair Maxam Ltd [1982] IRLR 83. In general terms, employers acting reasonably will seek to act by giving as much warning as possible of impending redundancies to employees so they can take early steps to inform themselves of the relevant facts, consider positive alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. The employer will consult about the best means by which the desired management result can be achieved fairly, and the employer will seek to see whether, instead of dismissing an employee, he could offer him alternative employment. A reasonable employer will depart from these principles only where there is good reason to do so.[49]The Polkey principle is not confined to cases of procedural unfairness but has a broader application. The tribunal’s task is to apply ERA 1996 s 123(1) and award 'such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.[50]When applying Polkey, it “is inevitably an exercise about which there can be no absolute and scientific certainty. It is a predictive exercise. Evidence is needed to inform the prediction. It is important that a Tribunal should spell out, as best it can, what factors it takes into Case No: 1405649/2023 account in determining why it adopts a particular percentage. .......... It is, and has to be a process of assessment.” Per Langstaff J in Contract Bottling v Cave & McNaughton [2014] UKEAT 0100.[51]Section 207A of TULR(C)A provides that the tribunal must take into account whether or not the employer has complied with a relevant Code and has the power to award an uplift of up to 25%.[52]Section 123(6) of the ERA sets out the factors which must be considered when deciding whether the compensatory award should be reduced to reflect whether their own conduct caused or contributed to the dismissal. CONCLUSION Was the Sole or Principle Reason for the Dismissal the TUPE Transfer?
CONCLUSION
[53]It is clear that from at least November 2022, Mr Davies’ group companies which included BAM was in a difficult financial position. There had already been one round of redundancies in November 2022 during which the Claimant’s daughter has been made redundant. It is against this background that the Claimant approached Mr Davies to attempt to negotiate an enhanced redundancy package; she mentioned in one email that she felt a year’s pay would be fair. It is clear from multiple emails around that time that she wanted a substantial sum above the statutory minimum to reflect her long service. She also knew that Mr Davies had in the past been prepared to make enhanced settlement payments. Mr Davies made it clear in his written and oral evidence, that despite her request for redundancy, his preference was to restructure and to attempt to keep her in his employment. It is clear that at this point, he held her in high regard as a senior member of the team and wished to retain her.[54]In early March 2023, given the ongoing poor financial circumstances of the group companies, an administrator was appointed to the parent company and Mr Davies took advice regarding the broader group companies’ solvency. By 1 March 2023, Mr Davies had retained the services of an HR adviser Debbie Cohen. By email that day, he informed the Claimant that the consultation process would begin. The tribunal am satisfied that his email of the same date reflected his genuine hope that she would be actively involved in the consultation and help them work out the structure going forward. He was clear in his evidence that at this stage, his hope was that the Claimant would work with him and stay within the business.[55]At the 14 March 2023 consultation meeting, with Ms Trickey, she was fully engaged and very willing to explore other options available for her ongoing employment. By contrast, the Claimant just wanted to concentrate on her settlement package. She then went on sickness leave until 10 April 2023. Following on from the March meeting, Mr Davies took the view that the Claimant had disengaged from several aspects of her role, was not interested in collaborating with the restructure and was simply interested in a pay-off. Case No: 1405649/2023[56]Following the failed refinancing attempt in April 2023, Mr Davies decided to sell the assets in BAM. On 5 May 2023, the business of Bourne Space and its staff transferred by operation of TUPE to the Respondent. The evidence from both Mr Davies and Mr Mellor was that the business required further financial savings to be made post transfer and part of that process was the restarting or continuation of the redundancy process started when the business had been owned by BAM. I am satisfied that the business had been in financial difficulty since at least November 2022 and remained in similarly perilous situation after the transfer.[57]The tribunal is also satisfied that the protected conversation between Mr Mellor and the Claimant and the subsequent continuation of the redundancy process were carried out in good faith with the intention of streamlining the business by amalgamating two jobs into one. In effect, newco inherited the ongoing redundancy process from oldco. It is important, in the tribunal’s view, that Mr Davies was retained as a consultant by the Respondent. He knew the business in terms of structure and ongoing viability better than anyone and he had already carried out a round of redundancies in 2022. The tribunal finds it entirely reasonable that the Respondent would continue with the redundancy process which he had started, to find further financial savings.[58]Following on from the Respondent’s acquisition of the business, Mr Mellor took the decision that further restructuring would be needed going forward. As a consequence, Ms Trickey never started in the role as COM, despite the Respodnent’s original intentions during the redundancy process, but was instead moved from July 2023 across to a different company. The COM role responsibilities were thereafter picked up Mr Davies.[59]Whilst documentary evidence might have been helpful, there are no grounds to counter the explanation that Mr Davies’ companies were in poor financial positions and exposed with borrowing liabilities immediately prior to the transfer and that the Bourne Space business remained financially vulnerable post transfer. Whilst acknowledging the proximity of the dismissal to the transfer, the tribunal finds that the reason for the dismissal was the redundancy process which continued after the transfer. The tribunal is satisfied that the transfer was not the sole or principal reason for the dismissal but that it was entirely as a result of the need for ongoing cost cutting measures within the business. ETO Reason[60]The tribunal does not need to do so, but if it had to go on and consider the ETO reason it is satisfied that the reason for the redundancy dismissal was to reduce workforce numbers in line with Mr Davies’ original proposal. Case No: 1405649/2023 Ordinary Unfair Dismissal Redundancy[61]The Claimant sought to argue that the Respondent had failed to establish that there were actually structural changes to the business’ staffing needs. She highlighted that there was little evidence about the current structure and a disagreement about Ms Bullen’s current job description. The upshot, says the Claimant, is that the Respondent has not established a diminished requirement for staffing, as someone is required to do many if not all of the Claimant’s previous role and it cannot satisfy the tribunal that there is a genuine redundancy situation.[62]It is already set out that the tribunal accepted Mr Davies’ pre-transfer rationale for the need to rationalize and that he had identified a pool of two: the Claimant and Ms Trickey. As it was an amalgamation of roles, there were aspects which would be new to whoever was appointed. This was a small business which had been run by Mr Davies and he was intimately acquainted with the roles and responsibilities of each candidate in the pool. The process had commenced prior to the transfer and the tribunal finds it is entirely reasonable and proportionate that given the financial and time pressures at play, the Respondent adopted and restarted the same redundancy process post transfer as advised by its new consultant and can therefore establish an economic justification for the redundancy.[63]In relation to the actual reorganization, Mr Davies’ took the view that it was important to retain Ms Bullen in her role as she had stepped up to take up some of the duties which the Claimant should have been undertaking. The explanation given for Ms Bullen’s backdated pay increase was that she was vital to the business. Subsequently, following the Claimant’s dismissal and the further restructuring already set out, Mr Davies has picked up duties from the COM role with the effect that the duties carried out by the Claimant and Ms Trickey have been reorganized and reallocated amongst existing staff. TFewer employees were needed because of a reorganisation that resulted in a more efficient use of labour. The tribunal is satisfied that the dismissal was for reason of redundancy in accordance with section 139(1)(b) of the ERA 1996. Procedural Fairness Selection Pool[64]The Respondent decided to pool the Claimant and Ms Trickey. This adopted Mr Davies’ approach before the transfer. It was based on the fact that their management roles, being at the same or similar level, were to be amalgamed into the new position of COM to reduce business costs. Although here were arguments to say that the pool should have been wider, the tribunal does not find it was unreasonable for the Respondent to have adopted this pool in light of the proposed restructure of a small business. The proposed reorganisation would Case No: 1405649/2023 reduce the number of individuals required to undertake the management work at a that particular level. It is true that Ms Trickey ultimately never took up the new role however, it was a fluid situation whereby ultimately, the work was divided between Mr Davies and Ms Bullen in due course following a further restructuring. In the circumstances, the tribunal satisfied that this was a reasonable pool for selection. Selection Criteria[65]Mr Murray failed to explain to either candidate how the scoring metric would be applied. In fact, that was not explained until half-way through the hearing and even then, it was four headings with ‘scribbles’ relating only to Ms Trickey. There was no evidence as to how this scoring metric was applied to the Claimant. As at the time of the consultation meeting, the Respondent had failed to set out what the role of COM would comprise. Consultation[66]In the tribunal’s view there was a lack of proper consultation. The fluidity of the situation has already been noted, but ultimately, this was a consultation of two for an amalgamated role and was to be conducted in a week. The Respondent should have been clearer in its responsibilities during this process. It failed to provide the Claimant with an opportunity for to comment on her redundancy selection assessment and it did not share the selection criteria or outcome. Fair consultation involves the provision of adequate information on which an employee can respond and argue their case, which did not happen in this instance. Failure to Adjourn Consultation to Allow the Claimant to be Accompanied[67]The Respondent proposed to hold the consultation meeting on 30 May 2023. Initially, the Claimant requested that this be moved so she could be accompanied, but on 26 May 2023 agreed to attend alone. There is no suggestion that there was any undue pressure applied to the Claimant to attend alone and the tribunal does not find that this complaint is made out. Suitable Alternative Employment[68]As regards alternative employment, Mr Murray did raise this with the Claimant during their meeting on 30 May 2023, but the Claimant stated that given the small size of the business, there was no suitable alternative employment that she would be willing to undertake. She made it clear she did not want to take a job such a reception job which would be on a lower wage. Case No: 1405649/2023[69]Given the above comments regarding the fluidity of the situation, I am satisfied that the Head of Member Services role which was subsequently created was not in existence as at 2 June 2023. I note the pay increase paid to Ms Bullen but accept Mr Davies’ and Mr Murray’s subsequent evidence that her role was sufficiently less senior than that which the Claimant had undertaken. I also accept that the role of Head of Member Services which she was subsequently appointed to did not exist as at the time of the Claimant’s dismissal. I am therefore satisfied that at the material time, there was no suitable alternative role for the Claimant. Failed to Deal with the Grievance Properly[70]The grievance was raised on 24 May 2023 and Mr Murray stated in the grievance hearing on 30 May 2023 that he would deal with the grievance separately. He emailed the Claimant on 2 June 2023 to follow this up, but she did not reply to the email. The Claimant asked for a reply to her grievance in her appeal letter dated 9 June 2023. No substantive response was provided by the Respondent.[71]The tribunal is not satisfied on the balance of probabilities that Mr Murray carried out a proper investigation into the grievance. He invited her for a meeting on the day she was dismissed and never followed it up. It contained a valid complaint about the conduct of the redundancy process which was not addressed by the Respondent. Failed to deal with the Appeal Properly[72]The Claimant was notified of her redundancy on 2 June 2023 and the letter informed of her of her right to appeal. By letter dated 9 June 2023, solicitors for the Claimant appealed her redundancy and provided 7 grounds, not all of which have been raised in this claim. The letter requested a written response. On 16 June 2023, Mr Murray replied and simply stated: “I do not believe there are grounds for appeal so I am not overturning the decision.”[73]In redundancy cases the absence of any appeal or review procedure does not of itself make the dismissal unfair – that is to say, if the original selection for redundancy was in accordance with a fair procedure the absence of an appeal is not fatal to the employer's defence and it would be wrong to find a dismissal unfair only because of the failure to provide the employee with an appeal hearing. The absence of an appeal is one of the many factors to be considered in determining fairness. Did the Respondent act Reasonably in all the Circumstances in Treating Redundancy as a Reason to Dismiss?[74]It was not reasonable or sufficient for the Respondent to proceed in such an unstructured and opaque manner in relation to the redundancy Case No: 1405649/2023 process. For the reasons set out above, the tribunal concludes that dismissal of the Claimant for redundancy was procedurally unfair. The tribunal notes that it is not for it to stand in the shoes of the employer and decide what it would have done, but to consider whether the decision to dismiss was within the range of responses of a reasonable employer. The tribunal therefore concludes that it was not, and the Claimant’s claim of procedurally unfair dismissal succeeds. Polkey[75]The tribunal must then consider whether a fair procedure would have made a difference and if so to what extent, applying the principle established in Polkey v A E Dayton Services Ltd [1988] ICR142.[76]On the one hand, the Claimant made it clear to Mr Davies, and Mr Murray on 30 May 2023 meeting, that she could not and did not want to carry out elements of Ms Trickey’s job. She had previously made it clear to Mr Davies that she was not interested in learning new skills and expertise. Ms Trickey on the other hand was keen to step up and willing to undertake any new learning and training required. Given that both women had skills to offer in the job that the other did not, and without any further information regarding the scoring criteria, it is not possible for me to determine whether one is more likely that the other to have been successful.[77]Based on the evidence and its conclusions the tribunal assesses the probability of the claimant having been fairly selected for redundancy at 50%, which will result in a 50% reduction in any award made.[78]The tribunal does not consider that had a fair procedure been adopted the Claimant would have resigned in any event. It accepts her explanation that the discussions surrounding an exit package were solely based on achieving an amount greater than the statutory minimum and that otherwise she needed to keep her job for financial[79]For the reasons set out above, the tribunal is satisfied that it is just and equitable to award a 10% uplift on any compensation awarded. Contributory Fault[80]The tribunal finally turns to deal with contributory fault. The Respondent says that Claimant contributed entirely to her dismissal because she did not engage and did not positively offer alternatives during the consultation process.[81]Having found that there the process was unfair in the way in which it was conducted and most seriously the way in which the Respondent Case No: 1405649/2023 consulted, applied selection criteria, documented its decision making and dealt with her grievance, the tribunal is not satisfied that it is appropriate to make any such deduction and declines to do so. K Gibb _____________________________ Employment Judge Gibb 22 November 2024
ISSUES
[1]The Claimant issued proceedings dated 27 October 2023 in which she claimed(1) automatic unfair dismissal pursuant to Regulation 7(1) of TUPE as the sole or principal reason for her dismissal was the transfer, alternatively(2) unfair dismissal for substantive and procedural[2]The parties agreed a list of issues in advance and these were confirmed at the outset of the hearing as follows:(1) Was the sole or principal reason for the Claimant’s dismissal the TUPE transfer which took effect from 1 May 2023 or a reason connected with the transfer?(2) If the Tribunal find that the sole or principal reason for the Claimant’s dismissal was the TUPE transfer or a reason connected with the transfer, was there an economic, technical or organisational reason entailing changes in the workforce which would otherwise render the Claimant’s dismissal fair? Case No: 1405649/2023(3) R asserts that the sole or principal reason for the Claimant’s dismissal was either: 1. Redundancy; or 2. Some other substantial reason (‘SOSR’), namely a business reorganisation.(4) Was there a genuine redundancy situation within the meaning of s.139 ERA?(5) Did the Respondent adopt a fair procedure? The Claimant challenges the fairness of the procedure, and in particular alleges that:
ISSUES
[1]The Respondent mishandled the purported selection pool (comprising the Claimant’s role as Head of Bourne Space, and the separate role of Head of BAM).[2]The Respondent failed to apply fair and objective selection criteria to decide which of the two roles above would be made redundant.[3]The Respondent failed to adequately warn and consult with the Claimant.[4]The Respondent failed to adjourn the (apparent) consultation meeting to allow the Claimant to be accompanied.[5]The Respondent failed to take reasonable steps to find the Claimant suitable alternative employment, particularly, Commercial Operations Manager and Head of Member Services.[6]The Respondent failed to pause the redundancy process pending determination of the Claimant’s grievance of 24 May 2023 or otherwise to determine the Claimant’s grievance concurrently with the (alleged) redundancy consultation process.[7]The Respondent failed to deal with the Claimant’s appeal against dismissal fairly or at all. (6) Did the Respondent act reasonably in all the circumstances in treating the redundancy situation, or SOSR, as a sufficient reason to dismiss the Claimant? (7) If the Respondent did not follow a fair procedure, would the Claimant have been dismissed in any event and/or to what extent and when? (8) If the Respondent did not follow a fair procedure, would the Claimant have resigned in any event? Case No: 1405649/2023 (9) Did the Respondent fail to comply with ACAS CoP-1 by not hearing the Claimant’s grievance and by outright rejecting the Claimant’s dismissal appeal (per s.207A TULR(C)A)? If so, is it just and equitable for there to be an increase in any compensation awarded? If so, by how much? (10) If the Claimant’s dismissal was unfair, did the Claimant contribute to her dismissal by culpable conduct? PROCEDURE 3. The tribunal heard evidence from the Claimant. On the Respondent’s behalf, the tribunal heard evidence from Richard Davies (consultant retained by the Respondent who sold his shares in Bourne Asset Management Limited (“BAM”) to the Respondent); Andrew Mellor (sole director and shareholder of the Respondent) and Olivia Trickey (who had previously been employed by BAM and who TUPE transferred alongside the Claimant). 4. There was a tribunal bundle of 221 pages. Both counsel produced written submissions on the final day of the hearing. One additional document was produced during the hearing from Andrew Mellor. During cross examination, he referred to ‘scribbles’ he had made contemporaneously during a meeting with Ms Trickey on 30 May 2023. This was a page from a notebook which appeared to refer to a scoring of Ms Trickey against four columns. After considering the position, the note was included as evidence at page 158a of the bundle. 5. The tribunal considered all the evidence when making the decision in this case. THE FACTS 6. On 6 July 2006, the Claimant commenced employment with KBC Holdings Limited. There were various acquisitions and company transfers and in late 2022, she was transferred to Bourne Asset Management Limited (“BAM”) as Head of Bourne Space. Bourne Space comprises suites of serviced offices based in buildings around Bournemouth. Natalie Bullen was the Claimant’s assistance in this role. 7. Mr Davies’s evidence was that the Head of Bourne Space role included the running of the commercial building at Hinton Road as well as Bourne Space at the hotel site, Bourne Park. He explained that she was responsible for the operational business of Bourne Space as well as health and safety and facilities.
THE FACTS
[8]The Claimant did not agree that her responsibilities included all those stated in evidence by Mr Davies; for example, she disputed his assertion that she was responsible for health and safety. She said that this role included overall responsibility for the commercial operation of Case No: 1405649/2023 the business including pricing and negotiating rents, marketing and management of the team. There was no written job description setting out the scope of her role. On balance, the tribunal is satisfied that the Claimant’s role was senior and involved responsibility for the operational business of Bourne Space. It was self evidently a significantly more senior role than that of the assistant, Ms Bullen. The tribunal notes that following the later reorganization, the responsibilities were split between Mr Davies and Ms Bullen.[9]It was Mr Davies’ evidence, which was not seriously in dispute and which I accept, that the group of companies he owned by had been placed under increased financial pressure, particularly since the pandemic. In November 2022, post the mini budget, there were discussions about the financial state of the business, that required further restructuring which entailed a number of redundancies. Despite this, the group companies continued to experience financial difficulties and eventually Mr Davies took advice from an administrator regarding the group company solvency.[10]It is agreed between the parties that at a meeting on 19 January 2023, the Claimant raised the issue of redundancy with a severance package with Mr Davies. In an email dated 20 January 2023, Mr Davies reiterated that BAM had nearly gone into administration the previous year, that the business was low on cash reserves and he was not in a position to pay a ‘proper redundancy package’, that is, a payment above the statutory minimum level.[11]On 1 March 2023, following an in person meeting, Mr Davies emailed the Claimant to inform her that Debbie Cohen (HR Consultant from Streetwise HR Ltd) had been retained and that the company was about to begin a consultation process for redundancy.[12]On 14 March 2023, Mr Davies and Ms Cohen held consultation meetings with both candidates. Mr Davies’ evidence was that Ms Trickey was fully engaged and willing to explore the restructure. By contrast, he said that the Claimant just wanted to talk about a potential package. He said the Claimant made it clear she did not want to adapt or adjust her role. In her evidence, the Claimant said she couldn’t remember what had been talked about in that meeting. On the balance of probabilities, and given the Claimant’s inability to recall the latter, I accept Mr Davies’ evidence about the two meetings.[13]The 14 March 2023 email between Ms Cohen and Mr Davies confirmed that if no deal could be done with the Claimant, they would push forward with the redundancy with Ms Trickey and the Claimant in a pool and see which one scored the highest. I consider that this internal letter reflects a genuine intention to carry out a fair redundancy process.[14]On the same day, Mr Davies sent a letter to Ms Trickey and the Claimant informing them that he was proposing to merge their roles and create one full time role, Commercial and Operations Manager (“COM”). It stated that this meant they were at risk of redundancy, that Case No: 1405649/2023 they had now entered the consultation phase and that they would shortly be invited to a consultation meeting.[15]Following this meeting, the Claimant was absent from work until 10 April 2023. On 11 April 2024, Mr Davies wrote to Ms Cohen regarding a potential sale of one of the companies that owned the Hinton Road building. The proposal was to sell with right to use the Bourne Space brand. At this early stage, it was unclear which staff might transfer.[16]An email from Claimant dated 26 April 2023 records that there was a further discussion about severance, but that Mr Davies was only prepared to offer a statutory redundancy payment. He says this was on advice from the administrator given the state of the company finances and I accept his evidence on this. On the same day, Mr Davies wrote to Claimant to inform her that the company was being sold and that staff working for Bourne Space may transfer too.[17]On 28 April 2023, Mr Davies wrote to the Claimant to confirm that the sale was progressing and that she would be transferring under TUPE. The transfer took effect on 5 May 2023. It was Mr Davies’ evidence, which was not challenged, that immediately prior the transfer, BAM was the owner of the Bourne Space brand and serviced office business and it is that asset, plus the staff employed, who transferred when the Respondent purchased the shareholding in BAM.[18]Post transfer, Mr Davies was retained as an external consultation to assist with operational issues for the Respondent.[19]Between 3 and 5 May 2023, emails passed between DM, RD and DC regarding a potential severance package for the Claimant.[20]On 12 May 2023, Mr Murray proposed a meeting with the Claimant in order to undertake a protected conversation. This meeting took place by telephone later that day and was followed by a letter to the Claimant setting out a settlement agreement. In the proposal letter, Mr Murray indicated that if the Claimant did not accept the offer, he would then start a restructuring exercise.[21]On 19 May 2023, there was a further phone call between Mr Murray and the Claimant. It is the Claimant’s position that Mr Murray put her under pressure to accept the settlement offer, which was no more than the statutory minimum payment; he denied applying any such pressure. Having observed Mr Murray giving evidence, he spoke rapidly and sometimes spoke over those questioning him. I am satisfied that in business discussions, particularly over the phone, he is likely to come across as a strong personality. However, I note that it was five days before the Claimant mentioned her concerns by email; did not mention this in her grievance letter of the same date which complained about the redundancy process and absent any further evidence as to what was said - the Claimant retracted in her evidence that he had called her stupid - I do not find that Mr Murray’s behaviour was improper as alleged by the Claimant. Case No: 1405649/2023[22]On 24 May 2023, the Claimant raised a grievance regarding the redundancy process and failure to pay her Q4 bonus. I note that the letter was addressed to Richard (that is Richard Davies) and not Mr Mellor and appears to relate to complaints relating to her employment by BAM. The letter makes it clear that the Claimant is extremely disappointed not to have received the enhanced settlement package which she considered she had been promised and others had received previously.[23]On 25 May 2023, the Respondent restarted the redundancy process which had commenced prior to the transfer. The Claimant was sent a letter of the same date in which it said she was at risk of redundancy as a result of the proposal to implement a new structure which meant her role might go. It invited her to a consultation meeting on 30 May 2023 and informed of her right to be accompanied. There was some email discussion about whether the meeting could be moved so that the Claimant could be accompanied, but in an email on 26 May 2023 she agreed to attend alone.[24]On 30 May 2023, the meeting between Mr Murray and the Claimant took place by telephone and it was recorded by the Claimant without Mr Murray’s consent. The Claimant’s evidence was that she had not been provided with any evidence about the proposed restructure. She told Mr Mellor that she thought he had already made up his mind and that the process was a sham.[25]In the unagreed transcript that the Claimant disclosed, when asked about other potential toles in the business she stated: “I can’t see how there could be another role for me because of the small amount of roles that are in the company. I can’t do finance … I don’t want to do reception because that’s not, I am sure that I wouldn’t get the pay that I get from reception. I can’t do Olivia’s jkob, but she can’t do mine, so I just don’t know how you are going to run it.”[26]On the same day, Mr Murray also had a meeting on the phone with Ms Trickey. His evidence was that she was enthusiastic and would be very happy to take on new elements of the role if appointed. Ms Trickey confirmed this in her evidence and I accept she was willing to take on any new responsibilities the new role would require.[27]On 1 June 2023, Ms Bullen’s salary was increased from £30k to £42k backdated to 1 April 2023. The Respondent stated that this was to recognize the additional work she was carrying out, expressly picking up the Claimant’s work as she was not engaging fully during this time. Mr Davies explained that this was his concern, that he was afraid that Ms Bullen would otherwise leave her employment and that without her the business would not survive. It is the Claimant’s position that Ms Bullen was in fact doing her old job as from 1 April 2023. I found Mr Davies to be a careful and truthful witness and I accept that he was in a position to give the best evidence regarding Ms Bullen’s role and the rationale for the increase in her salary. Case No: 1405649/2023[28]On 2 June 2023, Mr Murray emailed the Claimant to say that he had investigated her grievance and to arrange for a teams meeting to share the results. The Claimant did not respond to that email.[29]Later on the same day, Mr Murray sent the Claimant a letter informing of her of the decision to dismiss by way of redundancy. It also informed her of her right to appeal.[30]On 9 June 2023, the Claimant’s solicitors appealed the decision and a letter setting out 7 grounds of appeal was sent to the Respondent.[31]On 16 June 2023, Mr Murray responded to the appeal with a simple one-line response to confirm he would not be overturning the decision. THE LAW Regulation 7(1) TUPE – protection from dismissal
THE LAW
[32]Regulation 7(1) of TUPE provides that: ‘where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee is to be treated… as unfairly dismissed if the sole or principal reason for the dismissal is the transfer’.[33]Reg 7(2) and (3) then goes on to stipulate that where the sole or principal reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce (‘an ETO reason’) of either the transferor or the transferee before or after a relevant transfer, Reg 7(1) ‘does not apply’ and the fairness of dismissal is to be judged by reference to S.98(4) of the Employment Rights Act 1996 (ERA), which sets out the standard ‘reasonableness test’ that applies to ordinary unfair dismissal.[34]This, it should be noted, is a question of fact to be determined by the employment tribunal in the circumstances of the case. A number of issues may be relevant to ascertaining the answer to that question, depending on the circumstances of the particular case.[35]The EAT in Marshall v Game Retail Ltd EAT 0276/13 held that tribunals considering automatically unfair dismissal in a TUPE context should apply the burden of proof in accordance with the guidance set down by the Court of Appeal in Kuzel v Roche Products Ltd 2008 ICR 799, CA (a case under S.103A ERA, which renders automatically unfair any dismissal which is for the sole or principal reason that the employee made a protected disclosure). Thus, the burden is technically on the employer to show the reason for dismissal. Usually, the employer seeks to discharge this by showing that dismissal is for one of the potentially fair reasons under S.98(1) and (2) ERA. If the employee asserts that the dismissal is instead for an automatically Case No: 1405649/2023 unfair reason, the employee acquires a burden of showing some evidence to support his or her case.[36]Proximity of the dismissal to the transfer is not conclusive, but it is strong evidence in the employee’s favour. The Court held that an employee dismissed on the day of the transfer due to her ongoing strained relationship with a colleague who was to become a director of the transferee was dismissed by reason of the transfer: Hare Wines Ltd v Kaur [2019] IRLR 555, CA. ETO Reason[37]Where an employer successfully shows that the sole or principal reason for dismissal was an ETO reason, the dismissal will not be automatically unfair under Reg 7(1). However, it might nevertheless be unfair under the general unfair dismissal provisions of the ERA. The burden of proof is on the employer to establish(1) an ETO reason(2) which entailed a change in the workforce.[38]Under Reg 7(3)(b), where a transfer-related dismissal is not rendered automatically unfair by Reg 7(1). The reason for dismissal for the purpose of S.98 ERA will be deemed to be a redundancy where the reason for dismissal fulfils the definition in S.139 ERA, in which case the employee’s normal rights on redundancy will apply. Genuine Redundancy Situation[39]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[40]Provided fewer employees are needed to do work of a particular kind there us a redundancy situation: McCrea v Cullen [1988] IRLR 30. It is important to consider whether the dismissal was attributable to the diminution or cessation of the requirements of the employer for employees to carry out work of a particular kind: Contract Bottling v Cave & Anor UKEAT/0525/12/DM Unfair Dismissal Case No: 1405649/2023[41]In this case the unfair dismissal claim was brought under Part X of the Employment Rights Act 1996. The main provision is section 98 which, so far as relevant, provides as follows: “(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –(a) the reason (or, if more than one, the principal reason) for the dismissal and(b) that it is either a reason falling within sub-section (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this sub-section if it ... is that the employee was redundant ... ... (4) Where the employer has fulfilled the requirements of sub-section (1), 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 reasonable 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”.[42]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[43]Employers should try and comply with the guidance given in R v British Coal Corpn and SoS for Trade & Industry, ex p Price [1994] IRLR 72.[44]It is for the employer to identify the pool of employees and the tribunal must decide whether the pool was within the band of reasonable Case No: 1405649/2023 responses: Capita Hartshead Ltd Byard [2012] ICR 1256; Kvaerner Oil & Gas Ltd v Parker [2003] 1 WQLUK 638.[45]A dismissal may be unfair if no consideration is given to finding alternative employment and the employer must take reasonable steps to do so: Thomas & Betts v Harding [1980] IRLR 255. A employee who is being made redundant may need to be offer an alternative even one of a lesser status: Avonmouth Construction v Shipway [1979] IRLR 14. An employer should not assume an employee will not take an alternative employment but must discuss it with them: Huddersfield Parcels v Sykes [1981] IRLR 115.[46]In a redundancy situation, the absence of an appeal does not of itself render the dismissal unfair: Gwynedd Council v Barratt [2021] IRLR 1028.[47]The proper application of the general test of fairness in section 98(4) has been considered by the EAT and higher courts on many occasions. The Employment Tribunal must not substitute its own decision for that of the employer: the question is rather whether the employer’s conduct fell within the “band of reasonable responses”: see Iceland Frozen Foods Limited v Jones [1982] IRLR 439 (EAT) as approved by the Court of Appeal in Post Office v Foley; HSBC Bank PLC v Madden [2000] IRLR 827.[48]In cases where the respondent has shown that the dismissal was a redundancy dismissal, guidance was given by the EAT in Williams v Compair Maxam Ltd [1982] IRLR 83. In general terms, employers acting reasonably will seek to act by giving as much warning as possible of impending redundancies to employees so they can take early steps to inform themselves of the relevant facts, consider positive alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. The employer will consult about the best means by which the desired management result can be achieved fairly, and the employer will seek to see whether, instead of dismissing an employee, he could offer him alternative employment. A reasonable employer will depart from these principles only where there is good reason to do so.[49]The Polkey principle is not confined to cases of procedural unfairness but has a broader application. The tribunal’s task is to apply ERA 1996 s 123(1) and award 'such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.[50]When applying Polkey, it “is inevitably an exercise about which there can be no absolute and scientific certainty. It is a predictive exercise. Evidence is needed to inform the prediction. It is important that a Tribunal should spell out, as best it can, what factors it takes into Case No: 1405649/2023 account in determining why it adopts a particular percentage. .......... It is, and has to be a process of assessment.” Per Langstaff J in Contract Bottling v Cave & McNaughton [2014] UKEAT 0100.[51]Section 207A of TULR(C)A provides that the tribunal must take into account whether or not the employer has complied with a relevant Code and has the power to award an uplift of up to 25%.[52]Section 123(6) of the ERA sets out the factors which must be considered when deciding whether the compensatory award should be reduced to reflect whether their own conduct caused or contributed to the dismissal. CONCLUSION Was the Sole or Principle Reason for the Dismissal the TUPE Transfer?
CONCLUSION
[53]It is clear that from at least November 2022, Mr Davies’ group companies which included BAM was in a difficult financial position. There had already been one round of redundancies in November 2022 during which the Claimant’s daughter has been made redundant. It is against this background that the Claimant approached Mr Davies to attempt to negotiate an enhanced redundancy package; she mentioned in one email that she felt a year’s pay would be fair. It is clear from multiple emails around that time that she wanted a substantial sum above the statutory minimum to reflect her long service. She also knew that Mr Davies had in the past been prepared to make enhanced settlement payments. Mr Davies made it clear in his written and oral evidence, that despite her request for redundancy, his preference was to restructure and to attempt to keep her in his employment. It is clear that at this point, he held her in high regard as a senior member of the team and wished to retain her.[54]In early March 2023, given the ongoing poor financial circumstances of the group companies, an administrator was appointed to the parent company and Mr Davies took advice regarding the broader group companies’ solvency. By 1 March 2023, Mr Davies had retained the services of an HR adviser Debbie Cohen. By email that day, he informed the Claimant that the consultation process would begin. The tribunal am satisfied that his email of the same date reflected his genuine hope that she would be actively involved in the consultation and help them work out the structure going forward. He was clear in his evidence that at this stage, his hope was that the Claimant would work with him and stay within the business.[55]At the 14 March 2023 consultation meeting, with Ms Trickey, she was fully engaged and very willing to explore other options available for her ongoing employment. By contrast, the Claimant just wanted to concentrate on her settlement package. She then went on sickness leave until 10 April 2023. Following on from the March meeting, Mr Davies took the view that the Claimant had disengaged from several aspects of her role, was not interested in collaborating with the restructure and was simply interested in a pay-off. Case No: 1405649/2023[56]Following the failed refinancing attempt in April 2023, Mr Davies decided to sell the assets in BAM. On 5 May 2023, the business of Bourne Space and its staff transferred by operation of TUPE to the Respondent. The evidence from both Mr Davies and Mr Mellor was that the business required further financial savings to be made post transfer and part of that process was the restarting or continuation of the redundancy process started when the business had been owned by BAM. I am satisfied that the business had been in financial difficulty since at least November 2022 and remained in similarly perilous situation after the transfer.[57]The tribunal is also satisfied that the protected conversation between Mr Mellor and the Claimant and the subsequent continuation of the redundancy process were carried out in good faith with the intention of streamlining the business by amalgamating two jobs into one. In effect, newco inherited the ongoing redundancy process from oldco. It is important, in the tribunal’s view, that Mr Davies was retained as a consultant by the Respondent. He knew the business in terms of structure and ongoing viability better than anyone and he had already carried out a round of redundancies in 2022. The tribunal finds it entirely reasonable that the Respondent would continue with the redundancy process which he had started, to find further financial savings.[58]Following on from the Respondent’s acquisition of the business, Mr Mellor took the decision that further restructuring would be needed going forward. As a consequence, Ms Trickey never started in the role as COM, despite the Respodnent’s original intentions during the redundancy process, but was instead moved from July 2023 across to a different company. The COM role responsibilities were thereafter picked up Mr Davies.[59]Whilst documentary evidence might have been helpful, there are no grounds to counter the explanation that Mr Davies’ companies were in poor financial positions and exposed with borrowing liabilities immediately prior to the transfer and that the Bourne Space business remained financially vulnerable post transfer. Whilst acknowledging the proximity of the dismissal to the transfer, the tribunal finds that the reason for the dismissal was the redundancy process which continued after the transfer. The tribunal is satisfied that the transfer was not the sole or principal reason for the dismissal but that it was entirely as a result of the need for ongoing cost cutting measures within the business. ETO Reason[60]The tribunal does not need to do so, but if it had to go on and consider the ETO reason it is satisfied that the reason for the redundancy dismissal was to reduce workforce numbers in line with Mr Davies’ original proposal. Case No: 1405649/2023 Ordinary Unfair Dismissal Redundancy[61]The Claimant sought to argue that the Respondent had failed to establish that there were actually structural changes to the business’ staffing needs. She highlighted that there was little evidence about the current structure and a disagreement about Ms Bullen’s current job description. The upshot, says the Claimant, is that the Respondent has not established a diminished requirement for staffing, as someone is required to do many if not all of the Claimant’s previous role and it cannot satisfy the tribunal that there is a genuine redundancy situation.[62]It is already set out that the tribunal accepted Mr Davies’ pre-transfer rationale for the need to rationalize and that he had identified a pool of two: the Claimant and Ms Trickey. As it was an amalgamation of roles, there were aspects which would be new to whoever was appointed. This was a small business which had been run by Mr Davies and he was intimately acquainted with the roles and responsibilities of each candidate in the pool. The process had commenced prior to the transfer and the tribunal finds it is entirely reasonable and proportionate that given the financial and time pressures at play, the Respondent adopted and restarted the same redundancy process post transfer as advised by its new consultant and can therefore establish an economic justification for the redundancy.[63]In relation to the actual reorganization, Mr Davies’ took the view that it was important to retain Ms Bullen in her role as she had stepped up to take up some of the duties which the Claimant should have been undertaking. The explanation given for Ms Bullen’s backdated pay increase was that she was vital to the business. Subsequently, following the Claimant’s dismissal and the further restructuring already set out, Mr Davies has picked up duties from the COM role with the effect that the duties carried out by the Claimant and Ms Trickey have been reorganized and reallocated amongst existing staff. TFewer employees were needed because of a reorganisation that resulted in a more efficient use of labour. The tribunal is satisfied that the dismissal was for reason of redundancy in accordance with section 139(1)(b) of the ERA 1996. Procedural Fairness Selection Pool[64]The Respondent decided to pool the Claimant and Ms Trickey. This adopted Mr Davies’ approach before the transfer. It was based on the fact that their management roles, being at the same or similar level, were to be amalgamed into the new position of COM to reduce business costs. Although here were arguments to say that the pool should have been wider, the tribunal does not find it was unreasonable for the Respondent to have adopted this pool in light of the proposed restructure of a small business. The proposed reorganisation would Case No: 1405649/2023 reduce the number of individuals required to undertake the management work at a that particular level. It is true that Ms Trickey ultimately never took up the new role however, it was a fluid situation whereby ultimately, the work was divided between Mr Davies and Ms Bullen in due course following a further restructuring. In the circumstances, the tribunal satisfied that this was a reasonable pool for selection. Selection Criteria[65]Mr Murray failed to explain to either candidate how the scoring metric would be applied. In fact, that was not explained until half-way through the hearing and even then, it was four headings with ‘scribbles’ relating only to Ms Trickey. There was no evidence as to how this scoring metric was applied to the Claimant. As at the time of the consultation meeting, the Respondent had failed to set out what the role of COM would comprise. Consultation[66]In the tribunal’s view there was a lack of proper consultation. The fluidity of the situation has already been noted, but ultimately, this was a consultation of two for an amalgamated role and was to be conducted in a week. The Respondent should have been clearer in its responsibilities during this process. It failed to provide the Claimant with an opportunity for to comment on her redundancy selection assessment and it did not share the selection criteria or outcome. Fair consultation involves the provision of adequate information on which an employee can respond and argue their case, which did not happen in this instance. Failure to Adjourn Consultation to Allow the Claimant to be Accompanied[67]The Respondent proposed to hold the consultation meeting on 30 May 2023. Initially, the Claimant requested that this be moved so she could be accompanied, but on 26 May 2023 agreed to attend alone. There is no suggestion that there was any undue pressure applied to the Claimant to attend alone and the tribunal does not find that this complaint is made out. Suitable Alternative Employment[68]As regards alternative employment, Mr Murray did raise this with the Claimant during their meeting on 30 May 2023, but the Claimant stated that given the small size of the business, there was no suitable alternative employment that she would be willing to undertake. She made it clear she did not want to take a job such a reception job which would be on a lower wage. Case No: 1405649/2023[69]Given the above comments regarding the fluidity of the situation, I am satisfied that the Head of Member Services role which was subsequently created was not in existence as at 2 June 2023. I note the pay increase paid to Ms Bullen but accept Mr Davies’ and Mr Murray’s subsequent evidence that her role was sufficiently less senior than that which the Claimant had undertaken. I also accept that the role of Head of Member Services which she was subsequently appointed to did not exist as at the time of the Claimant’s dismissal. I am therefore satisfied that at the material time, there was no suitable alternative role for the Claimant. Failed to Deal with the Grievance Properly[70]The grievance was raised on 24 May 2023 and Mr Murray stated in the grievance hearing on 30 May 2023 that he would deal with the grievance separately. He emailed the Claimant on 2 June 2023 to follow this up, but she did not reply to the email. The Claimant asked for a reply to her grievance in her appeal letter dated 9 June 2023. No substantive response was provided by the Respondent.[71]The tribunal is not satisfied on the balance of probabilities that Mr Murray carried out a proper investigation into the grievance. He invited her for a meeting on the day she was dismissed and never followed it up. It contained a valid complaint about the conduct of the redundancy process which was not addressed by the Respondent. Failed to deal with the Appeal Properly[72]The Claimant was notified of her redundancy on 2 June 2023 and the letter informed of her of her right to appeal. By letter dated 9 June 2023, solicitors for the Claimant appealed her redundancy and provided 7 grounds, not all of which have been raised in this claim. The letter requested a written response. On 16 June 2023, Mr Murray replied and simply stated: “I do not believe there are grounds for appeal so I am not overturning the decision.”[73]In redundancy cases the absence of any appeal or review procedure does not of itself make the dismissal unfair – that is to say, if the original selection for redundancy was in accordance with a fair procedure the absence of an appeal is not fatal to the employer's defence and it would be wrong to find a dismissal unfair only because of the failure to provide the employee with an appeal hearing. The absence of an appeal is one of the many factors to be considered in determining fairness. Did the Respondent act Reasonably in all the Circumstances in Treating Redundancy as a Reason to Dismiss?[74]It was not reasonable or sufficient for the Respondent to proceed in such an unstructured and opaque manner in relation to the redundancy Case No: 1405649/2023 process. For the reasons set out above, the tribunal concludes that dismissal of the Claimant for redundancy was procedurally unfair. The tribunal notes that it is not for it to stand in the shoes of the employer and decide what it would have done, but to consider whether the decision to dismiss was within the range of responses of a reasonable employer. The tribunal therefore concludes that it was not, and the Claimant’s claim of procedurally unfair dismissal succeeds. Polkey[75]The tribunal must then consider whether a fair procedure would have made a difference and if so to what extent, applying the principle established in Polkey v A E Dayton Services Ltd [1988] ICR142.[76]On the one hand, the Claimant made it clear to Mr Davies, and Mr Murray on 30 May 2023 meeting, that she could not and did not want to carry out elements of Ms Trickey’s job. She had previously made it clear to Mr Davies that she was not interested in learning new skills and expertise. Ms Trickey on the other hand was keen to step up and willing to undertake any new learning and training required. Given that both women had skills to offer in the job that the other did not, and without any further information regarding the scoring criteria, it is not possible for me to determine whether one is more likely that the other to have been successful.[77]Based on the evidence and its conclusions the tribunal assesses the probability of the claimant having been fairly selected for redundancy at 50%, which will result in a 50% reduction in any award made.[78]The tribunal does not consider that had a fair procedure been adopted the Claimant would have resigned in any event. It accepts her explanation that the discussions surrounding an exit package were solely based on achieving an amount greater than the statutory minimum and that otherwise she needed to keep her job for financial[79]For the reasons set out above, the tribunal is satisfied that it is just and equitable to award a 10% uplift on any compensation awarded. Contributory Fault[80]The tribunal finally turns to deal with contributory fault. The Respondent says that Claimant contributed entirely to her dismissal because she did not engage and did not positively offer alternatives during the consultation process.[81]Having found that there the process was unfair in the way in which it was conducted and most seriously the way in which the Respondent Case No: 1405649/2023 consulted, applied selection criteria, documented its decision making and dealt with her grievance, the tribunal is not satisfied that it is appropriate to make any such deduction and declines to do so. K Gibb _____________________________ Employment Judge Gibb 22 November 2024
ISSUES
[1]The Claimant issued proceedings dated 27 October 2023 in which she claimed(1) automatic unfair dismissal pursuant to Regulation 7(1) of TUPE as the sole or principal reason for her dismissal was the transfer, alternatively(2) unfair dismissal for substantive and procedural[2]The parties agreed a list of issues in advance and these were confirmed at the outset of the hearing as follows:(1) Was the sole or principal reason for the Claimant’s dismissal the TUPE transfer which took effect from 1 May 2023 or a reason connected with the transfer?(2) If the Tribunal find that the sole or principal reason for the Claimant’s dismissal was the TUPE transfer or a reason connected with the transfer, was there an economic, technical or organisational reason entailing changes in the workforce which would otherwise render the Claimant’s dismissal fair? Case No: 1405649/2023(3) R asserts that the sole or principal reason for the Claimant’s dismissal was either: 1. Redundancy; or 2. Some other substantial reason (‘SOSR’), namely a business reorganisation.(4) Was there a genuine redundancy situation within the meaning of s.139 ERA?(5) Did the Respondent adopt a fair procedure? The Claimant challenges the fairness of the procedure, and in particular alleges that:
ISSUES
[1]The Respondent mishandled the purported selection pool (comprising the Claimant’s role as Head of Bourne Space, and the separate role of Head of BAM).[2]The Respondent failed to apply fair and objective selection criteria to decide which of the two roles above would be made redundant.[3]The Respondent failed to adequately warn and consult with the Claimant.[4]The Respondent failed to adjourn the (apparent) consultation meeting to allow the Claimant to be accompanied.[5]The Respondent failed to take reasonable steps to find the Claimant suitable alternative employment, particularly, Commercial Operations Manager and Head of Member Services.[6]The Respondent failed to pause the redundancy process pending determination of the Claimant’s grievance of 24 May 2023 or otherwise to determine the Claimant’s grievance concurrently with the (alleged) redundancy consultation process.[7]The Respondent failed to deal with the Claimant’s appeal against dismissal fairly or at all. (6) Did the Respondent act reasonably in all the circumstances in treating the redundancy situation, or SOSR, as a sufficient reason to dismiss the Claimant? (7) If the Respondent did not follow a fair procedure, would the Claimant have been dismissed in any event and/or to what extent and when? (8) If the Respondent did not follow a fair procedure, would the Claimant have resigned in any event? Case No: 1405649/2023 (9) Did the Respondent fail to comply with ACAS CoP-1 by not hearing the Claimant’s grievance and by outright rejecting the Claimant’s dismissal appeal (per s.207A TULR(C)A)? If so, is it just and equitable for there to be an increase in any compensation awarded? If so, by how much? (10) If the Claimant’s dismissal was unfair, did the Claimant contribute to her dismissal by culpable conduct? PROCEDURE 3. The tribunal heard evidence from the Claimant. On the Respondent’s behalf, the tribunal heard evidence from Richard Davies (consultant retained by the Respondent who sold his shares in Bourne Asset Management Limited (“BAM”) to the Respondent); Andrew Mellor (sole director and shareholder of the Respondent) and Olivia Trickey (who had previously been employed by BAM and who TUPE transferred alongside the Claimant). 4. There was a tribunal bundle of 221 pages. Both counsel produced written submissions on the final day of the hearing. One additional document was produced during the hearing from Andrew Mellor. During cross examination, he referred to ‘scribbles’ he had made contemporaneously during a meeting with Ms Trickey on 30 May 2023. This was a page from a notebook which appeared to refer to a scoring of Ms Trickey against four columns. After considering the position, the note was included as evidence at page 158a of the bundle. 5. The tribunal considered all the evidence when making the decision in this case. THE FACTS 6. On 6 July 2006, the Claimant commenced employment with KBC Holdings Limited. There were various acquisitions and company transfers and in late 2022, she was transferred to Bourne Asset Management Limited (“BAM”) as Head of Bourne Space. Bourne Space comprises suites of serviced offices based in buildings around Bournemouth. Natalie Bullen was the Claimant’s assistance in this role. 7. Mr Davies’s evidence was that the Head of Bourne Space role included the running of the commercial building at Hinton Road as well as Bourne Space at the hotel site, Bourne Park. He explained that she was responsible for the operational business of Bourne Space as well as health and safety and facilities.
THE FACTS
[8]The Claimant did not agree that her responsibilities included all those stated in evidence by Mr Davies; for example, she disputed his assertion that she was responsible for health and safety. She said that this role included overall responsibility for the commercial operation of Case No: 1405649/2023 the business including pricing and negotiating rents, marketing and management of the team. There was no written job description setting out the scope of her role. On balance, the tribunal is satisfied that the Claimant’s role was senior and involved responsibility for the operational business of Bourne Space. It was self evidently a significantly more senior role than that of the assistant, Ms Bullen. The tribunal notes that following the later reorganization, the responsibilities were split between Mr Davies and Ms Bullen.[9]It was Mr Davies’ evidence, which was not seriously in dispute and which I accept, that the group of companies he owned by had been placed under increased financial pressure, particularly since the pandemic. In November 2022, post the mini budget, there were discussions about the financial state of the business, that required further restructuring which entailed a number of redundancies. Despite this, the group companies continued to experience financial difficulties and eventually Mr Davies took advice from an administrator regarding the group company solvency.[10]It is agreed between the parties that at a meeting on 19 January 2023, the Claimant raised the issue of redundancy with a severance package with Mr Davies. In an email dated 20 January 2023, Mr Davies reiterated that BAM had nearly gone into administration the previous year, that the business was low on cash reserves and he was not in a position to pay a ‘proper redundancy package’, that is, a payment above the statutory minimum level.[11]On 1 March 2023, following an in person meeting, Mr Davies emailed the Claimant to inform her that Debbie Cohen (HR Consultant from Streetwise HR Ltd) had been retained and that the company was about to begin a consultation process for redundancy.[12]On 14 March 2023, Mr Davies and Ms Cohen held consultation meetings with both candidates. Mr Davies’ evidence was that Ms Trickey was fully engaged and willing to explore the restructure. By contrast, he said that the Claimant just wanted to talk about a potential package. He said the Claimant made it clear she did not want to adapt or adjust her role. In her evidence, the Claimant said she couldn’t remember what had been talked about in that meeting. On the balance of probabilities, and given the Claimant’s inability to recall the latter, I accept Mr Davies’ evidence about the two meetings.[13]The 14 March 2023 email between Ms Cohen and Mr Davies confirmed that if no deal could be done with the Claimant, they would push forward with the redundancy with Ms Trickey and the Claimant in a pool and see which one scored the highest. I consider that this internal letter reflects a genuine intention to carry out a fair redundancy process.[14]On the same day, Mr Davies sent a letter to Ms Trickey and the Claimant informing them that he was proposing to merge their roles and create one full time role, Commercial and Operations Manager (“COM”). It stated that this meant they were at risk of redundancy, that Case No: 1405649/2023 they had now entered the consultation phase and that they would shortly be invited to a consultation meeting.[15]Following this meeting, the Claimant was absent from work until 10 April 2023. On 11 April 2024, Mr Davies wrote to Ms Cohen regarding a potential sale of one of the companies that owned the Hinton Road building. The proposal was to sell with right to use the Bourne Space brand. At this early stage, it was unclear which staff might transfer.[16]An email from Claimant dated 26 April 2023 records that there was a further discussion about severance, but that Mr Davies was only prepared to offer a statutory redundancy payment. He says this was on advice from the administrator given the state of the company finances and I accept his evidence on this. On the same day, Mr Davies wrote to Claimant to inform her that the company was being sold and that staff working for Bourne Space may transfer too.[17]On 28 April 2023, Mr Davies wrote to the Claimant to confirm that the sale was progressing and that she would be transferring under TUPE. The transfer took effect on 5 May 2023. It was Mr Davies’ evidence, which was not challenged, that immediately prior the transfer, BAM was the owner of the Bourne Space brand and serviced office business and it is that asset, plus the staff employed, who transferred when the Respondent purchased the shareholding in BAM.[18]Post transfer, Mr Davies was retained as an external consultation to assist with operational issues for the Respondent.[19]Between 3 and 5 May 2023, emails passed between DM, RD and DC regarding a potential severance package for the Claimant.[20]On 12 May 2023, Mr Murray proposed a meeting with the Claimant in order to undertake a protected conversation. This meeting took place by telephone later that day and was followed by a letter to the Claimant setting out a settlement agreement. In the proposal letter, Mr Murray indicated that if the Claimant did not accept the offer, he would then start a restructuring exercise.[21]On 19 May 2023, there was a further phone call between Mr Murray and the Claimant. It is the Claimant’s position that Mr Murray put her under pressure to accept the settlement offer, which was no more than the statutory minimum payment; he denied applying any such pressure. Having observed Mr Murray giving evidence, he spoke rapidly and sometimes spoke over those questioning him. I am satisfied that in business discussions, particularly over the phone, he is likely to come across as a strong personality. However, I note that it was five days before the Claimant mentioned her concerns by email; did not mention this in her grievance letter of the same date which complained about the redundancy process and absent any further evidence as to what was said - the Claimant retracted in her evidence that he had called her stupid - I do not find that Mr Murray’s behaviour was improper as alleged by the Claimant. Case No: 1405649/2023[22]On 24 May 2023, the Claimant raised a grievance regarding the redundancy process and failure to pay her Q4 bonus. I note that the letter was addressed to Richard (that is Richard Davies) and not Mr Mellor and appears to relate to complaints relating to her employment by BAM. The letter makes it clear that the Claimant is extremely disappointed not to have received the enhanced settlement package which she considered she had been promised and others had received previously.[23]On 25 May 2023, the Respondent restarted the redundancy process which had commenced prior to the transfer. The Claimant was sent a letter of the same date in which it said she was at risk of redundancy as a result of the proposal to implement a new structure which meant her role might go. It invited her to a consultation meeting on 30 May 2023 and informed of her right to be accompanied. There was some email discussion about whether the meeting could be moved so that the Claimant could be accompanied, but in an email on 26 May 2023 she agreed to attend alone.[24]On 30 May 2023, the meeting between Mr Murray and the Claimant took place by telephone and it was recorded by the Claimant without Mr Murray’s consent. The Claimant’s evidence was that she had not been provided with any evidence about the proposed restructure. She told Mr Mellor that she thought he had already made up his mind and that the process was a sham.[25]In the unagreed transcript that the Claimant disclosed, when asked about other potential toles in the business she stated: “I can’t see how there could be another role for me because of the small amount of roles that are in the company. I can’t do finance … I don’t want to do reception because that’s not, I am sure that I wouldn’t get the pay that I get from reception. I can’t do Olivia’s jkob, but she can’t do mine, so I just don’t know how you are going to run it.”[26]On the same day, Mr Murray also had a meeting on the phone with Ms Trickey. His evidence was that she was enthusiastic and would be very happy to take on new elements of the role if appointed. Ms Trickey confirmed this in her evidence and I accept she was willing to take on any new responsibilities the new role would require.[27]On 1 June 2023, Ms Bullen’s salary was increased from £30k to £42k backdated to 1 April 2023. The Respondent stated that this was to recognize the additional work she was carrying out, expressly picking up the Claimant’s work as she was not engaging fully during this time. Mr Davies explained that this was his concern, that he was afraid that Ms Bullen would otherwise leave her employment and that without her the business would not survive. It is the Claimant’s position that Ms Bullen was in fact doing her old job as from 1 April 2023. I found Mr Davies to be a careful and truthful witness and I accept that he was in a position to give the best evidence regarding Ms Bullen’s role and the rationale for the increase in her salary. Case No: 1405649/2023[28]On 2 June 2023, Mr Murray emailed the Claimant to say that he had investigated her grievance and to arrange for a teams meeting to share the results. The Claimant did not respond to that email.[29]Later on the same day, Mr Murray sent the Claimant a letter informing of her of the decision to dismiss by way of redundancy. It also informed her of her right to appeal.[30]On 9 June 2023, the Claimant’s solicitors appealed the decision and a letter setting out 7 grounds of appeal was sent to the Respondent.[31]On 16 June 2023, Mr Murray responded to the appeal with a simple one-line response to confirm he would not be overturning the decision. THE LAW Regulation 7(1) TUPE – protection from dismissal
THE LAW
[32]Regulation 7(1) of TUPE provides that: ‘where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee is to be treated… as unfairly dismissed if the sole or principal reason for the dismissal is the transfer’.[33]Reg 7(2) and (3) then goes on to stipulate that where the sole or principal reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce (‘an ETO reason’) of either the transferor or the transferee before or after a relevant transfer, Reg 7(1) ‘does not apply’ and the fairness of dismissal is to be judged by reference to S.98(4) of the Employment Rights Act 1996 (ERA), which sets out the standard ‘reasonableness test’ that applies to ordinary unfair dismissal.[34]This, it should be noted, is a question of fact to be determined by the employment tribunal in the circumstances of the case. A number of issues may be relevant to ascertaining the answer to that question, depending on the circumstances of the particular case.[35]The EAT in Marshall v Game Retail Ltd EAT 0276/13 held that tribunals considering automatically unfair dismissal in a TUPE context should apply the burden of proof in accordance with the guidance set down by the Court of Appeal in Kuzel v Roche Products Ltd 2008 ICR 799, CA (a case under S.103A ERA, which renders automatically unfair any dismissal which is for the sole or principal reason that the employee made a protected disclosure). Thus, the burden is technically on the employer to show the reason for dismissal. Usually, the employer seeks to discharge this by showing that dismissal is for one of the potentially fair reasons under S.98(1) and (2) ERA. If the employee asserts that the dismissal is instead for an automatically Case No: 1405649/2023 unfair reason, the employee acquires a burden of showing some evidence to support his or her case.[36]Proximity of the dismissal to the transfer is not conclusive, but it is strong evidence in the employee’s favour. The Court held that an employee dismissed on the day of the transfer due to her ongoing strained relationship with a colleague who was to become a director of the transferee was dismissed by reason of the transfer: Hare Wines Ltd v Kaur [2019] IRLR 555, CA. ETO Reason[37]Where an employer successfully shows that the sole or principal reason for dismissal was an ETO reason, the dismissal will not be automatically unfair under Reg 7(1). However, it might nevertheless be unfair under the general unfair dismissal provisions of the ERA. The burden of proof is on the employer to establish(1) an ETO reason(2) which entailed a change in the workforce.[38]Under Reg 7(3)(b), where a transfer-related dismissal is not rendered automatically unfair by Reg 7(1). The reason for dismissal for the purpose of S.98 ERA will be deemed to be a redundancy where the reason for dismissal fulfils the definition in S.139 ERA, in which case the employee’s normal rights on redundancy will apply. Genuine Redundancy Situation[39]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[40]Provided fewer employees are needed to do work of a particular kind there us a redundancy situation: McCrea v Cullen [1988] IRLR 30. It is important to consider whether the dismissal was attributable to the diminution or cessation of the requirements of the employer for employees to carry out work of a particular kind: Contract Bottling v Cave & Anor UKEAT/0525/12/DM Unfair Dismissal Case No: 1405649/2023[41]In this case the unfair dismissal claim was brought under Part X of the Employment Rights Act 1996. The main provision is section 98 which, so far as relevant, provides as follows: “(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –(a) the reason (or, if more than one, the principal reason) for the dismissal and(b) that it is either a reason falling within sub-section (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this sub-section if it ... is that the employee was redundant ... ... (4) Where the employer has fulfilled the requirements of sub-section (1), 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 reasonable 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”.[42]The definition of redundancy for the purposes of section 98(2) is found in section 139 of the Employment Rights Act 1996 and so far as relevant it reads as follows: “(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to- ... (b) The fact that the requirements of that business: (i) For employees to carry out work of a particular kind... have ceased or diminished or are expected to cease or diminish”.[43]Employers should try and comply with the guidance given in R v British Coal Corpn and SoS for Trade & Industry, ex p Price [1994] IRLR 72.[44]It is for the employer to identify the pool of employees and the tribunal must decide whether the pool was within the band of reasonable Case No: 1405649/2023 responses: Capita Hartshead Ltd Byard [2012] ICR 1256; Kvaerner Oil & Gas Ltd v Parker [2003] 1 WQLUK 638.[45]A dismissal may be unfair if no consideration is given to finding alternative employment and the employer must take reasonable steps to do so: Thomas & Betts v Harding [1980] IRLR 255. A employee who is being made redundant may need to be offer an alternative even one of a lesser status: Avonmouth Construction v Shipway [1979] IRLR 14. An employer should not assume an employee will not take an alternative employment but must discuss it with them: Huddersfield Parcels v Sykes [1981] IRLR 115.[46]In a redundancy situation, the absence of an appeal does not of itself render the dismissal unfair: Gwynedd Council v Barratt [2021] IRLR 1028.[47]The proper application of the general test of fairness in section 98(4) has been considered by the EAT and higher courts on many occasions. The Employment Tribunal must not substitute its own decision for that of the employer: the question is rather whether the employer’s conduct fell within the “band of reasonable responses”: see Iceland Frozen Foods Limited v Jones [1982] IRLR 439 (EAT) as approved by the Court of Appeal in Post Office v Foley; HSBC Bank PLC v Madden [2000] IRLR 827.[48]In cases where the respondent has shown that the dismissal was a redundancy dismissal, guidance was given by the EAT in Williams v Compair Maxam Ltd [1982] IRLR 83. In general terms, employers acting reasonably will seek to act by giving as much warning as possible of impending redundancies to employees so they can take early steps to inform themselves of the relevant facts, consider positive alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. The employer will consult about the best means by which the desired management result can be achieved fairly, and the employer will seek to see whether, instead of dismissing an employee, he could offer him alternative employment. A reasonable employer will depart from these principles only where there is good reason to do so.[49]The Polkey principle is not confined to cases of procedural unfairness but has a broader application. The tribunal’s task is to apply ERA 1996 s 123(1) and award 'such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.[50]When applying Polkey, it “is inevitably an exercise about which there can be no absolute and scientific certainty. It is a predictive exercise. Evidence is needed to inform the prediction. It is important that a Tribunal should spell out, as best it can, what factors it takes into Case No: 1405649/2023 account in determining why it adopts a particular percentage. .......... It is, and has to be a process of assessment.” Per Langstaff J in Contract Bottling v Cave & McNaughton [2014] UKEAT 0100.[51]Section 207A of TULR(C)A provides that the tribunal must take into account whether or not the employer has complied with a relevant Code and has the power to award an uplift of up to 25%.[52]Section 123(6) of the ERA sets out the factors which must be considered when deciding whether the compensatory award should be reduced to reflect whether their own conduct caused or contributed to the dismissal. CONCLUSION Was the Sole or Principle Reason for the Dismissal the TUPE Transfer?
CONCLUSION
[53]It is clear that from at least November 2022, Mr Davies’ group companies which included BAM was in a difficult financial position. There had already been one round of redundancies in November 2022 during which the Claimant’s daughter has been made redundant. It is against this background that the Claimant approached Mr Davies to attempt to negotiate an enhanced redundancy package; she mentioned in one email that she felt a year’s pay would be fair. It is clear from multiple emails around that time that she wanted a substantial sum above the statutory minimum to reflect her long service. She also knew that Mr Davies had in the past been prepared to make enhanced settlement payments. Mr Davies made it clear in his written and oral evidence, that despite her request for redundancy, his preference was to restructure and to attempt to keep her in his employment. It is clear that at this point, he held her in high regard as a senior member of the team and wished to retain her.[54]In early March 2023, given the ongoing poor financial circumstances of the group companies, an administrator was appointed to the parent company and Mr Davies took advice regarding the broader group companies’ solvency. By 1 March 2023, Mr Davies had retained the services of an HR adviser Debbie Cohen. By email that day, he informed the Claimant that the consultation process would begin. The tribunal am satisfied that his email of the same date reflected his genuine hope that she would be actively involved in the consultation and help them work out the structure going forward. He was clear in his evidence that at this stage, his hope was that the Claimant would work with him and stay within the business.[55]At the 14 March 2023 consultation meeting, with Ms Trickey, she was fully engaged and very willing to explore other options available for her ongoing employment. By contrast, the Claimant just wanted to concentrate on her settlement package. She then went on sickness leave until 10 April 2023. Following on from the March meeting, Mr Davies took the view that the Claimant had disengaged from several aspects of her role, was not interested in collaborating with the restructure and was simply interested in a pay-off. Case No: 1405649/2023[56]Following the failed refinancing attempt in April 2023, Mr Davies decided to sell the assets in BAM. On 5 May 2023, the business of Bourne Space and its staff transferred by operation of TUPE to the Respondent. The evidence from both Mr Davies and Mr Mellor was that the business required further financial savings to be made post transfer and part of that process was the restarting or continuation of the redundancy process started when the business had been owned by BAM. I am satisfied that the business had been in financial difficulty since at least November 2022 and remained in similarly perilous situation after the transfer.[57]The tribunal is also satisfied that the protected conversation between Mr Mellor and the Claimant and the subsequent continuation of the redundancy process were carried out in good faith with the intention of streamlining the business by amalgamating two jobs into one. In effect, newco inherited the ongoing redundancy process from oldco. It is important, in the tribunal’s view, that Mr Davies was retained as a consultant by the Respondent. He knew the business in terms of structure and ongoing viability better than anyone and he had already carried out a round of redundancies in 2022. The tribunal finds it entirely reasonable that the Respondent would continue with the redundancy process which he had started, to find further financial savings.[58]Following on from the Respondent’s acquisition of the business, Mr Mellor took the decision that further restructuring would be needed going forward. As a consequence, Ms Trickey never started in the role as COM, despite the Respodnent’s original intentions during the redundancy process, but was instead moved from July 2023 across to a different company. The COM role responsibilities were thereafter picked up Mr Davies.[59]Whilst documentary evidence might have been helpful, there are no grounds to counter the explanation that Mr Davies’ companies were in poor financial positions and exposed with borrowing liabilities immediately prior to the transfer and that the Bourne Space business remained financially vulnerable post transfer. Whilst acknowledging the proximity of the dismissal to the transfer, the tribunal finds that the reason for the dismissal was the redundancy process which continued after the transfer. The tribunal is satisfied that the transfer was not the sole or principal reason for the dismissal but that it was entirely as a result of the need for ongoing cost cutting measures within the business. ETO Reason[60]The tribunal does not need to do so, but if it had to go on and consider the ETO reason it is satisfied that the reason for the redundancy dismissal was to reduce workforce numbers in line with Mr Davies’ original proposal. Case No: 1405649/2023 Ordinary Unfair Dismissal Redundancy[61]The Claimant sought to argue that the Respondent had failed to establish that there were actually structural changes to the business’ staffing needs. She highlighted that there was little evidence about the current structure and a disagreement about Ms Bullen’s current job description. The upshot, says the Claimant, is that the Respondent has not established a diminished requirement for staffing, as someone is required to do many if not all of the Claimant’s previous role and it cannot satisfy the tribunal that there is a genuine redundancy situation.[62]It is already set out that the tribunal accepted Mr Davies’ pre-transfer rationale for the need to rationalize and that he had identified a pool of two: the Claimant and Ms Trickey. As it was an amalgamation of roles, there were aspects which would be new to whoever was appointed. This was a small business which had been run by Mr Davies and he was intimately acquainted with the roles and responsibilities of each candidate in the pool. The process had commenced prior to the transfer and the tribunal finds it is entirely reasonable and proportionate that given the financial and time pressures at play, the Respondent adopted and restarted the same redundancy process post transfer as advised by its new consultant and can therefore establish an economic justification for the redundancy.[63]In relation to the actual reorganization, Mr Davies’ took the view that it was important to retain Ms Bullen in her role as she had stepped up to take up some of the duties which the Claimant should have been undertaking. The explanation given for Ms Bullen’s backdated pay increase was that she was vital to the business. Subsequently, following the Claimant’s dismissal and the further restructuring already set out, Mr Davies has picked up duties from the COM role with the effect that the duties carried out by the Claimant and Ms Trickey have been reorganized and reallocated amongst existing staff. TFewer employees were needed because of a reorganisation that resulted in a more efficient use of labour. The tribunal is satisfied that the dismissal was for reason of redundancy in accordance with section 139(1)(b) of the ERA 1996. Procedural Fairness Selection Pool[64]The Respondent decided to pool the Claimant and Ms Trickey. This adopted Mr Davies’ approach before the transfer. It was based on the fact that their management roles, being at the same or similar level, were to be amalgamed into the new position of COM to reduce business costs. Although here were arguments to say that the pool should have been wider, the tribunal does not find it was unreasonable for the Respondent to have adopted this pool in light of the proposed restructure of a small business. The proposed reorganisation would Case No: 1405649/2023 reduce the number of individuals required to undertake the management work at a that particular level. It is true that Ms Trickey ultimately never took up the new role however, it was a fluid situation whereby ultimately, the work was divided between Mr Davies and Ms Bullen in due course following a further restructuring. In the circumstances, the tribunal satisfied that this was a reasonable pool for selection. Selection Criteria[65]Mr Murray failed to explain to either candidate how the scoring metric would be applied. In fact, that was not explained until half-way through the hearing and even then, it was four headings with ‘scribbles’ relating only to Ms Trickey. There was no evidence as to how this scoring metric was applied to the Claimant. As at the time of the consultation meeting, the Respondent had failed to set out what the role of COM would comprise. Consultation[66]In the tribunal’s view there was a lack of proper consultation. The fluidity of the situation has already been noted, but ultimately, this was a consultation of two for an amalgamated role and was to be conducted in a week. The Respondent should have been clearer in its responsibilities during this process. It failed to provide the Claimant with an opportunity for to comment on her redundancy selection assessment and it did not share the selection criteria or outcome. Fair consultation involves the provision of adequate information on which an employee can respond and argue their case, which did not happen in this instance. Failure to Adjourn Consultation to Allow the Claimant to be Accompanied[67]The Respondent proposed to hold the consultation meeting on 30 May 2023. Initially, the Claimant requested that this be moved so she could be accompanied, but on 26 May 2023 agreed to attend alone. There is no suggestion that there was any undue pressure applied to the Claimant to attend alone and the tribunal does not find that this complaint is made out. Suitable Alternative Employment[68]As regards alternative employment, Mr Murray did raise this with the Claimant during their meeting on 30 May 2023, but the Claimant stated that given the small size of the business, there was no suitable alternative employment that she would be willing to undertake. She made it clear she did not want to take a job such a reception job which would be on a lower wage. Case No: 1405649/2023[69]Given the above comments regarding the fluidity of the situation, I am satisfied that the Head of Member Services role which was subsequently created was not in existence as at 2 June 2023. I note the pay increase paid to Ms Bullen but accept Mr Davies’ and Mr Murray’s subsequent evidence that her role was sufficiently less senior than that which the Claimant had undertaken. I also accept that the role of Head of Member Services which she was subsequently appointed to did not exist as at the time of the Claimant’s dismissal. I am therefore satisfied that at the material time, there was no suitable alternative role for the Claimant. Failed to Deal with the Grievance Properly[70]The grievance was raised on 24 May 2023 and Mr Murray stated in the grievance hearing on 30 May 2023 that he would deal with the grievance separately. He emailed the Claimant on 2 June 2023 to follow this up, but she did not reply to the email. The Claimant asked for a reply to her grievance in her appeal letter dated 9 June 2023. No substantive response was provided by the Respondent.[71]The tribunal is not satisfied on the balance of probabilities that Mr Murray carried out a proper investigation into the grievance. He invited her for a meeting on the day she was dismissed and never followed it up. It contained a valid complaint about the conduct of the redundancy process which was not addressed by the Respondent. Failed to deal with the Appeal Properly[72]The Claimant was notified of her redundancy on 2 June 2023 and the letter informed of her of her right to appeal. By letter dated 9 June 2023, solicitors for the Claimant appealed her redundancy and provided 7 grounds, not all of which have been raised in this claim. The letter requested a written response. On 16 June 2023, Mr Murray replied and simply stated: “I do not believe there are grounds for appeal so I am not overturning the decision.”[73]In redundancy cases the absence of any appeal or review procedure does not of itself make the dismissal unfair – that is to say, if the original selection for redundancy was in accordance with a fair procedure the absence of an appeal is not fatal to the employer's defence and it would be wrong to find a dismissal unfair only because of the failure to provide the employee with an appeal hearing. The absence of an appeal is one of the many factors to be considered in determining fairness. Did the Respondent act Reasonably in all the Circumstances in Treating Redundancy as a Reason to Dismiss?[74]It was not reasonable or sufficient for the Respondent to proceed in such an unstructured and opaque manner in relation to the redundancy Case No: 1405649/2023 process. For the reasons set out above, the tribunal concludes that dismissal of the Claimant for redundancy was procedurally unfair. The tribunal notes that it is not for it to stand in the shoes of the employer and decide what it would have done, but to consider whether the decision to dismiss was within the range of responses of a reasonable employer. The tribunal therefore concludes that it was not, and the Claimant’s claim of procedurally unfair dismissal succeeds. Polkey[75]The tribunal must then consider whether a fair procedure would have made a difference and if so to what extent, applying the principle established in Polkey v A E Dayton Services Ltd [1988] ICR142.[76]On the one hand, the Claimant made it clear to Mr Davies, and Mr Murray on 30 May 2023 meeting, that she could not and did not want to carry out elements of Ms Trickey’s job. She had previously made it clear to Mr Davies that she was not interested in learning new skills and expertise. Ms Trickey on the other hand was keen to step up and willing to undertake any new learning and training required. Given that both women had skills to offer in the job that the other did not, and without any further information regarding the scoring criteria, it is not possible for me to determine whether one is more likely that the other to have been successful.[77]Based on the evidence and its conclusions the tribunal assesses the probability of the claimant having been fairly selected for redundancy at 50%, which will result in a 50% reduction in any award made.[78]The tribunal does not consider that had a fair procedure been adopted the Claimant would have resigned in any event. It accepts her explanation that the discussions surrounding an exit package were solely based on achieving an amount greater than the statutory minimum and that otherwise she needed to keep her job for financial[79]For the reasons set out above, the tribunal is satisfied that it is just and equitable to award a 10% uplift on any compensation awarded. Contributory Fault[80]The tribunal finally turns to deal with contributory fault. The Respondent says that Claimant contributed entirely to her dismissal because she did not engage and did not positively offer alternatives during the consultation process.[81]Having found that there the process was unfair in the way in which it was conducted and most seriously the way in which the Respondent Case No: 1405649/2023 consulted, applied selection criteria, documented its decision making and dealt with her grievance, the tribunal is not satisfied that it is appropriate to make any such deduction and declines to do so. K Gibb