Mr N Karavias v Northumberland Tyne and Wear NHS Foundation Trust: 2501296/2016

EMPLOYMENT TRIBUNALS

Case No 2501296/2016

Between

Mr N KaraviasClaimant

Northumberland Tyne and Wear NHS Foundation TrustRespondent

Before

Employment Judge Hargrove

In person for claimant

Ms K Jeram (instructed by Counsel) for respondent

Date 26 April 2017

JUDGMENT

[1]The claimant’s claim of unfair dismissal is not well-founded.

[2]The claimant is entitled to a redundancy payment pursuant to section 163 of the Employment Rights Act 1996.

REASONS

[1]On 2 December 2016 the claimant presented to the Employment Tribunal complaints of unfair dismissal, and of a failure to pay him an enhanced redundancy payment against his former employers, Northumberland Tyne and Wear NHS Foundation Trust. In a response received on 30 December 2016 the respondent claimed that the claimant had been fairly dismissed for redundancy. As far as the claim for an enhanced redundancy payment is concerned, the respondent asserted that he was not entitled to a redundancy payment because he reasonably refused an offer of alternative employment which it asserted was suitable for him.

[2]The Tribunal starts by setting out a chronology of main events based on the evidence given first by the respondent, on whom the burden of proof lay to prove a reason for dismissal, from Anna Foster (AF), Deputy Director of Commissioning and Quality Assurance, Lynne Shaw (LS), Deputy Director of Workforce and Organisational Development, who dismissed the claimant at the first stage and made the decision to refuse the redundancy payment, and finally, Russell Patton (RP), Group Director of In-patient Care, who considered his appeal and rejected it. The respondent also gave evidence. All witnesses gave evidence by reference to witness statements which had been exchanged for the hearing and were taken as read. There was reference to a bundle containing 451 pages of documents to which additions were made during the hearing:2.1 The claimant had been employed by the respondent from April 2009, at first as an Information Officer on Band 4. He had previous employment with the NHS at another Trust. There had been a previous restructure of staff at the respondent in about 2011 and from 23 August 2011 the claimant worked as an Information Analyst on Band 5 under Agenda for Change.

2.2 In September 2015 Phase 1 of a further restructure of senior posts the Trust entitled Transforming Corporate Services (TCS). Phase 1 concerned jobs at Band 8A and above. It was considered appropriate to complete that restructure before moving to Phase 2. Following some initial meetings with affected employees in January 2016 Phase 2, dealing with jobs at Band 7 and below commenced on 1 February 2016. There was a proposal in particular for a reorganisation of the structure of the Information Department in which the claimant worked. On 15 January 2016 Anna Foster notified members of the team of a joint meeting to take place on Monday, 18 January to provide “an early opportunity to consider and to influence the proposed model that will be put forward for consultation and to raise any immediate queries/concerns …”. Prior to that meeting, Anna Foster had a short meeting with the claimant alone on the same day. There is a note of that meeting made by AF at page 72 where it was noted that the claimant was “very agitated”; that he took it personally and that he was claiming that the proposal was “unethical, unprofessional and disrespectful”. The claimant did not attend the joint meeting which followed on 18 January.

2.3 He did however, on 21 January, submit anonymously comments on the proposed new structure which are to be found at pages 67-68. It became apparent during the consultation process that these comments had been sent by the claimant. In addition, there were elective comments criticising the proposals from the team which are to be found at pages 78-79. Prior to submitting his anonymous comments the claimant had e-mailed AF on 20 January requesting a short meeting, which was offered to take place on 21 January. AF, apparently concerned about the claimant’s demeanour at the first meeting, proposed that a senior colleague should also be present. She also said that the claimant could submit his comments in writing. This probably led to the claimant’s anonymous comments being sent as above. The claimant however cancelled the meeting at short notice.

2.4 Changes to the structure Prior to 1 July 2016 the structure of the Information Department, as shown in an organogram marked A and added to the bundle at the request of the Employment Tribunal showed the following personnel:-

(a) An Information Manager, Alison Paxton (AP) on Band 7 reporting, as from 1 January 2016 to AF;

(b) Two Senior Information Analysts on Band 6, one being Liam Quinn (LQ) who left the post in October 2015 and was then replaced by Neil Thompson (NL), who had previously worked in the department as an agency worker; he was made up following interview; and secondly, Mark Ellis (ME);

(c) The claimant, a Band 5 Information Analyst. The task of the Department was essentially to collate data and information and to provide to the Trust internally, and externally, analysis of such data in the form of reports of varying complexity.

2.5 The consultation period ran from 1 February 2016 for 45 days to 16 March 2016. The claimant was on annual leave from the commencement of Phase 2 on 1 February until 8 February 2016. In his absence, on 4 February 2016, AF invited him to attend a meeting on his return to go through the consultation information (see page 115). There are no notes of that meeting but on 17 February 2016 AF e-mailed the claimant the response to a specific query that he had raised. The specific query which the claimant had raised was:- “One of the Senior Information Analysts posts Band 6 became vacant on 1 October 2015. How is it possible to make a decision to fill that vacant post while the restructuring process started at an earlier date (and is still ongoing) and potentially having to displace either the successful candidate or any of the existing members of staff?” AF responded:- “The transforming corporate services Phase 1 consultation affecting those members of staff at Bands 8A and above only was launched in September 2015 and was ongoing when the above Band 6 post became vacant. At this stage it was known that there would be a Phase 2 consultation affecting Bands 7 and below posts. However no further details were known as they were dependent upon the outcome of Phase 1. Due to the need to maintain the information analysis function, a recruitment process took place to replace the vacant Band 6 and the successful candidate was made aware of the forthcoming Phase 2 consultation at appointment”.

2.6 The claimant did not apply for that post in September 2015. He says that he was told at that stage by his Line Manager AP that he did not believe anyone possessed the skills and experience for the vacant post and therefore it would be externally advertised. He says he felt discouraged to apply. In any event he did not. Lynne Shaw also accompanied AF at the meeting with the claimant on 8 February. At the meeting the claimant was handed a copy of the consultation pack and there was a discussion about the proposed restructure. The nature of the proposed restructure with effect from 1 July 2016 is shown in organagram B as follows:- (a) AP (the former Information Manager) who also managed a separate information team of seven and did not do any analytical work herself, was redeployed to another Band 7 management role; (b) One of the other two Band 6 Senior Analyst roles was enhanced to Band 7; and responsibility for the management of the team was also added to the role. Neil Thompson was appointed to that post. The other Band 6 Senior Analyst role was retained with Mark Ellis in post; (c) The claimant’s Band 5 post as an Information Analyst was deleted and a new Band 4 post of Information Technician was introduced.

2.7 During the consultation process the claimant was offered the Band 4 post, his and five posts being set for deletion. The offer was on the basis that the claimant would receive pay protection for five years with the difference being made up to the claimant’s previous pay at the top increment which he held in Band 5. The final consultation feedback report had been distributed to the affected employees by an e-mail from AF on 24 March. The document is at pages 121-136. At page 125 of that document referring to the Information Analysis Team it was noted that:- “There were a significant number of queries and comments in relation to the resourcing of the information analysis function, prioritisation of workload and also the proposed future use of business intelligence tools. These have been carefully considered however there is no change to the structure”. The process for dealing with staff subject to organisational change who were offered a post at a lower grade was set out in the HR process for CST in particular at 66AA staff “may be eligible for protection of earnings. Careful consideration will be given to the level of protection and whether the new post is suitable and will be discussed on an individual basis. However, in the first instance like for like bandings or pay ranges will be sought for displaced staff”. As stated, the claimant was offered pay protection for five years. It is to be noted that the claimant was at this time 48 years of age and had at least 12 years to go until his retirement.

2.8 On 14 April 2016 the claimant commenced sick leave. AF claims that he cleared his desk at that time. When asked whether this was true during his evidence to the Tribunal, the claimant did not give a clear answer, and I accept that little if any personal property was left behind by him. The claimant was referred to occupational health on 21 April. It was noted that he was temporarily unfit for work. A GP’s fit note had identified anxiety as the cause and that it was due to expire on 9 June 2016. In answer to the question “How can we assist Nick through the process?”, the Occupational Health Doctor replied that there was “Nothing else that can be done. He is receiving the e-mails regarding vacancies and this appears to be the only practical help that he needs at present”. The Occupational Health Doctor gave the opinion that he was currently not fit for work, “however I believe the solution for this lies with management and not occupational health. If a new suitable post could be found for him I am of the opinion that his health would improve to allow him to return to work”, (see pages 140-142). The eight week sick note was extended by a further GP sick note for a further eight weeks as from 9 June.

2.9 In the meantime, on 28 April AP notified the claimant by e-mail of information that she had received from Ben Scorer that there was a vacancy for a Band 5 Information Analyst at the nearby Northumbria Healthcare Trust, which the claimant did not apply for. He says that the post was different and was not suitable for him. Also, he regards the sending of that letter by AP as being significant as being an attempt to get rid of him.

2.10 On 6 May a list of Band 5 vacancies within the Trust was circulated to the claimant. There was only one post which the claimant was interested in and applied for, that of Data Warehouse Officer. The claimant’s application for that post is at pages 216-229 and the claimant provided some supporting information at page 228. However, on 11 May he received notification of rejection for interview from Mr Scorer (see page 235):- “I feel you do not have the knowledge or experience required in the key areas of data warehouse, national data sets and ASB scripting/webpage development. You also confirmed that you felt these were areas where you did not have the required knowledge and experience”. At the Tribunal hearing the claimant accepted that he did not have experience of webpage development but claimed that he might have been able to do the job with a trial period and some training.

2.11 Next, the Band 4 vacancies were released including the Band 4 Information Technician role in the team. There was an application deadline of 24 May 2016 (see page 240). The initial job description for that post is at pages 261-271. The claimant did not apply by that date.

2.12 Lynne Shaw invited the claimant to attend a meeting with her on 6 June 2016. There are no notes of that meeting but immediately after it LS wrote to the claimant detailing the history (see pages 398-400, see especially page 399 where the Band 4 post vacancies notified to the claimant were identified). The letter continues:- “I did not receive a response from you at the time but when we met today you confirmed that you had received the e-mail but stated that you would not apply for any Band 4 posts across the Trust and that you would only consider Band 5 or Band 6 posts. We discussed the above posts and I subsequently offered you the Information Technician post which remains unfilled. As you are aware, from my perspective and that of your Deputy Director Anna Foster we feel that you have the skills to undertake this post and hence remain a valued member of staff in the new directorate. I therefore consider the role to be a suitable alternative, mitigating against a redundancy, retaining you in broadly the same area of work, in the same location”. There was then a note of the offer of pay protection “five years at approximately £5.500 a year based on your current salary. During the period of your protection we would aim to secure a role at a higher Band in order to return you to your substantive post, ie Band 5”. The letter went on to state that the claimant’s current post in the structure would not exist after 30 June, that there would be no opportunity to remain in post after that date. The claimant was given until 15 June to confirm acceptance of the band 4 post. The only dispute about the account of the conversation is that the claimant denies that he stated that he would not apply for any Band 4 post, but only the Band 4 post in the new structure. I conclude that Lynne Shaw’s account is correct as to that dispute because it is entirely consistent with the letter that the claimant wrote by way of reply to Lynne Shaw on June 15 (pages 401-402). In the fourth paragraph of that letter he stated:- “As far as my statement where I confirmed that I would not be interested in any Band 4 posts is concerned, this stems from my experience to date of all available Band 4 posts which appeared either in the Trust’s vacancies section since end of January 2016 … or the Band 4 vacancies within the new structure contained within your letter under the Band 4 posts within the weekly TED telegrams. Effectively there is no comparison between these vacancies and my current post as an Information Analyst. The varied and interesting workload, the challenging and mental stimulating tasks, the sense of achievement and contribution, the autonomy/independence and job satisfaction and motivation enjoyed are at the top end of the spectrum when it comes to evaluating my current job and any available Band 4 posts within the Trust. It is all these factors that primarily matter to me which collectively define the ‘status’ and content of a job. Therefore it is more than obvious that all these Band 4 posts are at a much lower status than my current post. The financial remuneration element is important too, but only as a secondary consideration after judging the status of a job. I should also highlight that any pay protection would be a rather weak/temporary measure since I need another 20 years to reach the statutory pension age which coincides with the NHS current normal pension age”. He went on to describe “an overwhelming feeling of demotion of being undervalued and a sign of unappreciation on behalf of the management if I was to accept this offer”. He disputed that the Band 4 post was suitable alternative employment. However he stated that he hoped that “a suitable alternative job in his current substantive banding might emerge within the coming months”. That representation of his views remained his position up to and including the Tribunal hearing.

2.13 On 24 June 2016 LS wrote to the claimant (see pages 403-404) urging him to reconsider his decision to turn down the post warning that if he unreasonably decided not to accept the offer he “may lose the right to a redundancy payment”. He was asked to confirm his decision by 30 June. On 30 June he did respond but maintained his position. He referred to differences in the job descriptions for the post at Band 4 and his current post at Band 5, and in particular referring to the fact that the Band 5 post required education to degree level or similar professional qualification in an IT related subject as opposed to “educated to A level in an information related subject.”

2.14 In these circumstances, on 16 July LS wrote to the claimant giving eleven weeks of termination of his employment on the grounds of redundancy, with effect from 30 September and also notifying the claimant that he would not receive a redundancy payment since he had not accepted the post which in the Tribunal’s view was suitable alternative employment.

2.15 The claimant’s employment expired on 30 September 2016. No other posts were offered to him in the interim period. In the interim however he had instituted an appeal against the decision in writing on 26 July (see page 389). He stated his belief that the Trust should postpone the decision since only one post was offered to him and his substantiated reasons for refusal had not been seriously considered. In addition, the Trust’s view on suitable or alternative employment had been misjudged. He asked for reconsideration of their refusal to offer him a contractual redundancy payment. At the appeal hearing on 26 September LS presented the management case as set out in a document at pages 394- 397 with Appendices including the job description for the previous Band 5 Information Analyst post and the proposed job description for the Information Technician. Russell Patton chaired the appeal hearing and there are detailed notes which are at pages 438-447. The respondent has picked up on a particular answer which the claimant gave to questions at page 444 where it is asserted that the claimant had changed his position from a denial that any Band 4 post was suitable to be those available to him at the time. The respondent’s argument is that that is an indication that loss of status was not a significant element in the claimant’s decision not to apply. It is to be noted that on the basis of the timing in the notes, Mr Patton only adjourned for four minutes between 5:07pm and 5:11pm before notifying his rejection of the claimant’s appeal. However, Mr Patton says, and I accept, that he had read all of the documents with care before the meeting, and in the outcome letter of 3 October he gave detailed reasons for upholding the original decision (see in particular page 449). This ends the chronology of events.

[6]The issues and the relevant statutory provisions6.1 Did the respondent prove on the balance of probabilities that the reason or principal reason for the claimant’s dismissal was redundancy? Redundancy is defined in section 139 of the Employment Rights Act 1996. That provision applies if the following conditions are satisfied:- “An employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to –

(a) the fact that his employer has ceased to or intends to cease – (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed; or

(b) the fact that the requirements of that business – (i) for employees to carry out work of a particular kind; or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer ceased or diminished or were expected to cease or diminish”.

6.2 If the respondent satisfied the Tribunal that the dismissal was for that reason the Tribunal has then to decide whether the dismissal was fair or unfair applying section 98(4) of the Act:- “… The determination of the question whether the dismissal was fair or unfair (having regard to the reason shown by the employer) – (a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and (b) shall be determined in accordance with equity and the substantial merits of the case”.

6.3 If the dismissal for that reason is found to be fair, did the claimant lose the right to a redundancy payment by reason of an offer of suitable and alternative employment which the claimant unreasonably refused? In that respect section 141 provides as follows:- “(1) This section applies where an offer (whether in writing or not) is made to an employee before the end of his employment – (a) to renew his contract of employment; or (b) to re-engage him under a new contract of employment, with renewal or re-engagement to take effect either immediately, or after an interval of not more than four weeks after the end of his employment. (2) Where subsection (3) is satisfied the employee is not entitled to a redundancy payment if he unreasonably refuses the offer. (3) This subsection is satisfied where – (a) the provisions of the contract is renewed or if a new as to – (i) the capacity and place in which the employee would be employed; and (ii) the other terms and conditions of his employment would not differ from the corresponding provisions of the previous contract; or (b) those provisions of the contract is renewed, or of the new contract, would differ from the corresponding provisions of the previous contract but the offer constitutes an offer of suitable employment in relation to the employee. (4) If the dismissal was unfair, to what compensation is the claimant entitled by way of a basic and compensatory award including the Polkey test what are the chances that the claimant would have been fairly dismissed in any event at some later stage and if so when?”.

[7]The reason for dismissal The respondent submits that redundancy as defined in section 139(2)(b) was the reason for the dismissal. There was a reduction in the requirements of the business for a Band 5 Analyst because it proposed that the more complex analytical work could be done by the two former Band 6 Senior Analysts who had previously shared out the work to the claimant, but that it included the collection of basic data and information which was the subject of analysis. The collection of the basic data and some simple analysis could be assigned to a new Band 4 post. The Band 5 post could be disposed of. The claimant’s principal argument was that there was no reduction in the requirements for a Band 5 analyst and that that work was still required. It was not in dispute that the workload of the section had not diminished at all. The headcount of the team actually performing the work had not reduced. All that had occurred was that the Band 5 job had been downgraded from Band 5 to Band 4 to pay for the increased salary of the Band 6 Senior Analyst’s post which had been upgraded to Band 7 to take into account extra managerial duties. It is to be noted that the claimant has not asserted that the supposed redundancy was a mere sham to provide a cloak for a dismissal of the claimant for some other unconnected reason. Thus the test to be applied is that laid down in Sainsbury’s Supermarkets Plc v Burrell

[1997] ICR page 523

, were approved by the House of Lords in Murray v Foyle Meats:- “Free of authority we understand the statutory framework … involves a three stage process:-(1) Was the employee dismissed? If so;

(2) Had the requirements of the employer’s business for employees to carry out work of a particular kind ceased or diminished, or were they expected to cease or diminish? If so;

(3) Was the dismissal of the employee caused wholly or mainly by the state of affairs identified at stage 2 above … There may be a number of underlying causes leading to a true redundancy situation; are stage 2. There may be a need for economy; a reorganisation in the interests of efficiency; a reduction in production requirements; unilateral changes in the employee’s terms and conditions of employment. None of these factors are themselves determinative of the stage 2 question. The only question to be asked is was there a diminution/cessation in the employer’s requirement for employees to carry out work of a particular kind or an expectation of such cessation/diminution in the future?” I have accepted that there was a genuine redundancy situation here. The two former Band 6 Senior Analysts could be freed up to perform only the more complex analytical work if the basic duty of data and information collection were assigned to an employee at Band 4. In those circumstances there was no longer any need for a Band 5 Analyst. It is to be noted that the Tribunal is not entitled to assess the employer’s business reasons for reaching a decision or declaring a redundancy or redundancies provided there is no allegation that the reason is being used to mask what is in effect a sham. The claimant’s criticism of the filling of the vacant Band 6 post in October 2015 is in my view not relevant to the issue whether the claimant’s post was redundant in 2016. I accept that the respondent was still undertaking Phase 1 of the reorganisation at that stage and the restructure of the higher bands would have had an influence on how the lower bands in Phase 2 were restructured. At that stage there was clearly a business need to fill the Band 6 vacancy. For whatever reason, the claimant did not apply.

[8]The fairness of the process In relation to the application of the fairness test in section 98(4) to a redundancy dismissal, the starting point is the well known passage in Lord Bridges’ judgment in Polkey v AE Dayton Services:- “In a case of redundancy, the employer will not normally act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation.” The claimant was consulted prior to the decision being made to make his post redundant. He had the opportunity to and did make representations. Clearly he disapproved of the proposal. The respondent was entitled, having considered his objections, to confirm their original plan. The claimant originally asked for a second meeting but then cancelled it. Clearly the claimant was consulted about redeployment to alternative posts in particular the Band 5 post at which, however ,he was unsuccessful. There is no basis for a conclusion that the reason for him not being shortlisted for interview was in any way improper or unfair. This is not a case for bumping, which commonly occurs where a more senior employee is redeployed into another more junior role as a consequence of his position being made redundant and the more junior occupant is dismissed in his place. In the present case the Band 5 post in question was vacant and the respondent was entitled to take the view that the claimant did not have the necessary qualifications or experience to fill the role. In any event the role was not a more junior role. It was a role at the same band. It is not disputed that the other band five roles of which the claimant was notified were unsuitable for him. The claimant was then given the opportunity of applying for Band 4 roles but declined one for which he was clearly suitable if overqualified. There was adequate consultation with the claimant and he was given the opportunity of appealing. There is no valid criticism of the fairness of the procedure which was followed. For these reasons I find that the claimant’s dismissal was fair.

[9]Was/is the claimant entitled to a redundancy payment, in this case enhanced under the elective agreement to provide in effect a calendar month’s pay for each year of employment, as opposed to one or one and a half week’s pay under the statutory scheme contained in section 162 of the Employment Rights Act (see page 53 of the bundle)? The scheme also provided, however, that the right to a redundancy payment could be lost if the employer offered suitable alternative employment “regard should be had to the personal circumstances of the employee. The employee will however be expected to show some flexibility;”. The offer was made before the date of termination, to be available not later than four weeks from that date – see paragraph 16.22 on page 64, and the employee loses the right if he fails to apply for it. These paragraphs expressly refer to the provisions in sections 138-141 of the Act. Section 141, it is agreed, contains the provisions material to the issue whether the claimant is entitled to the enhanced redundancy payment:- “(1) This section applies where an offer (whether in writing or not) is made to an employee before the end of his employment –(a) to renew his contract of employment; or

(b) to engage him under a new contract of employment with renewal or re-engagement to take effect either immediately on, or after an interval of not more than four weeks after, the end of his employment. (2) Where subsection (3) is satisfied, the employee is not entitled to a redundancy payment if he reasonably refuses the offer. (3) This section is satisfied where – (a) the provision of the contract as renewed, or of the new contract, as to – (i) the capacity and place in which the employee would be employed, and (ii) the other terms and conditions of his employment, would not differ from the corresponding provisions of the previous contract; or (b) whose provisions of the contract as renewed, or of the new contract would differ from the corresponding provisions of the previous contract but the offer constitutes an offer of suitable employment in relation to the employee”. Thus the issues in the present case are as follows:-

9.1 Did the offer of the new contract, the provisions of which differed from the corresponding provisions of the previous contract, constitute an offer of suitable employment in relation to the employee?

9.2 Did the claimant unreasonably refuse the offer? In her written submissions to the Tribunal counsel for the respondent submitted that some of the factors to be considered by the Tribunal would be relevant to both limbs of the test but the Tribunal had to consider the issues separately noting that the suitability test was an objective test as to whether the employment was suitable for the claimant, whereas the unreasonable refusal test contained elements of objectivity and of subjectivity. We were referred in particular to a passage in Bird v Stoke on Trent PCT [2011]

UKEAT/0074/11

paragraph 19:- “The question is not whether a reasonable employer would have accepted the employer’s offer, but whether that particular employee, taking into account his personal circumstances, was being reasonable in refusing the offer:- did he have sound and justifiable reasons for turning down the offer?”. In Devon Primary Care Trust v Readman

[2013] IRLR page 878

paragraph 21 in the judgment of Lord Justice Pill the Court of Appeal said:- “The tribunal applied the correct test in my judgment at paragraph 22 when it stated: ‘The reasonableness or otherwise of the refusal depends on factors personal to the employee and is assessed subjectively from the employee’s point of view at the time of the refusal’.” Another passage from that judgment is contained at paragraph 31:- “In unfair dismissal cases the Tribunal has to make a judgment on the evidence as to whether a decision to dismiss fell within the reasonable band of responses which a reasonable employer might have adopted. That is different from the test under section 141 which … involves a judgment as to whether an employee has unreasonably refused an offer, looking at it from her point of view on the basis of the facts as they appeared or ought reasonably to have appeared to her at the time the decision had to be made. A specific judgment needs to be made, not a judgment on whether the decision fell within a reasonable band of responses which a reasonable employee might have made … the task under section 141(2)(b) is whether this particular employee in this particular situation acted reasonably in refusing the offer of employment”. The respondent contends that the post offered was suitable for the claimant because the terms were identical NHS terms, permanent, on the same hours and with the same benefits save as for pay. As to the pay, the claimant’s pay was already at the top of Band 5 and was to be protected for five years; the location was, as before, within the central IT function of the Trust at the same place, the team was as before save that one of the three remaining members of the team had been promoted to a Band 7 managerial post. The second remained at Band 6 and, although the claimant’s new post was to be as a Band 4 post rather than a Band 5 post, he was still the junior whereby he was still being supervised by the now Band 7, former Band 6 employee. It was envisaged the in the new Band 4 post he would do less and only simple analytical work, although when Mr Thompson was first appointed from an agency position to the vacant Band 6 post he, the claimant, had been performing more complex analytical work while Mr Thompson completed other work. The claimant was now proposed to work in a post two bands lower than the Band 6 post holders. That could be compensated for in financial terms giving pay protection for five years although, as I understand the evidence, pay protection would be eroded because he would not get pay increases in the protected pay in the meantime. Ms Jeram accepts that even if a job is objectively suitable, a claimant may not be unreasonable in refusing the offer if he himself considers it to be unsuitable. She cites the authority of Cambridge & District Cooperative Society v Ruse

[1993] IRLR page 156

, where a former manager of a butcher’s shop which was closed was offered a new job as a butchery department manager in a supermarket in which he was responsible to another manager, did not have his own key and no longer had responsibility for banking, and refused it. Notwithstanding that it was suitable alternative employment the employee’s perceived loss of status made it reasonable for him to refuse the offer. The mere fact that pay protection is offered to compensate for any loss of status does not necessarily or of itself make it unreasonable for the employee to refuse it. In addition however the respondent points to the opportunity stated to the claimant during the process to reapply for any Band 5 jobs which arose in the five year period. In addition, the respondent points to the single response to a question at the appeal that the claimant would have accepted the alternative Band 4 jobs, having previously indicated that no Band 4 jobs would be suitable. It is argued that this demonstrates that the claimant was no longer concerned about loss of status. However, although the claimant did not always act reasonably or rationally throughout the respondent’s consultation process, I accept that he particularly felt that the Band 4 post that he was offered did entail a significant loss of status to him. Furthermore there was another relevant consideration within his thinking. It is not a case where pay protection was being offered to protect him for only a short time until his employment would otherwise have been due to end such as was the case in Wiseman v Central Lancashire Primary Care Trust ET Case No 2408405/2008. Here the period of pay protection was substantial but the claimant was only 48 years of age and, if no alternative Band 5 posts became available he would have suffered a substantial loss of pay and consequent loss of pension contributions. For these reasons, but not without some hesitation, I accept that the claimant acted reasonably in refusing the offer and is accordingly entitled to a redundancy payment. EMPLOYMENT JUDGE HARGROVE

[1]The claimant is entitled to a statutory redundancy payment of £7,424.50 pursuant to section 163 of the Employment Rights Act 1996.

[2]The respondent is ordered in addition to pay to the claimant the balance of the contractual redundancy payment due upon termination of his contract pursuant to Article 4 of the Employment Tribunals (Extension of Jurisdiction) Order 1994 amounting to £21,037.50.

[3]The respondent is ordered to pay to the claimant Tribunal fees of £390 – NOTE: This order was made by the Tribunal prior to the Supreme Court Decision in Unison v The Lord Chancellor, judgment in which was handed down on 27 July 2017. In consequence of that judgment, this part of the judgment is suspended upon the basis that the claimant should be able to recover the total amount of the Tribunal fees he has paid from HMCTS. Failing such recovery, he has liberty to apply to the Tribunal in writing.

[4]Pursuant to rule 76(1)(a) and (b) and rule 78 the claimant is ordered to pay to the respondent costs of £4,682.23.

[5]It is noted and recorded that the claimant agrees that he owes to the respondent the sum of £741.48 in respect of a debt for the computer scheme, in respect of which, however, the Tribunal makes no order having no power to do so.

[6]Despite this background, I have decided that the claimant is very clearly entitled to have his contractual pay claim decided and the matter is clearly not res judicata against him. Equally however, I have determined that it would be appropriate to allow the respondent to be heard on the issue now raised. This means that there are effectively two live issues for the consideration of this Tribunal:-6.1 Notwithstanding the Tribunal’s finding that the claimant did not unreasonably refuse a suitable offer of alternative employment, are the provisions particularly set out in section 16.20 of Agenda for Change to be interpreted as meaning that the claimant loses his right to a contractual redundancy payment on the grounds of his supposed lack of “flexibility”?

6.2 Should a costs order be made against the claimant in favour of the respondent on the basis that the claimant had acted otherwise unreasonably in bringing and/or continuing his unfair dismissal claim; or on the basis that such claim had no reasonable prospects of success? As to the first issue the respondent sought to rely upon an additional witness statement from Lynne Shaw, who had given evidence at the original liability hearing. I was notified by counsel for the respondent that the witness statement did not deal with the circumstances of any previous occasion when an applicant for a contractual redundancy payment had been turned down by the respondent in circumstances where it was agreed that the applicant was entitled to a statutory redundancy payment. I was informed that the additional witness statement did deal with circumstances in which the respondent had purportedly refused applications for a contractual redundancy payment in circumstances where it was considered that the claimant had not acted “flexibly” in dealing with an offer of alternative employment. For two reasons I declined to allow the witness statement to be admitted. The first was that I considered that it would only be of the most marginal relevance to the issue to be decided in this case; and the claimant had not had the opportunity to investigate any other case nor had any documentation been produced in respect of any other case, although I accept that the claimant had received the additional witness statement a few days before this hearing. The second ground was that this evidence, even if relevant, should have been produced at the time of the original statement when the issue was live.

[7]I turn now to the relevant provisions in paragraph 16 of Agenda for Change. This is the section which deals with employees’ entitlement to redundancy pay in the NHS, taking effect from 1 October 2006. The section adopts specifically the provisions in section 139 of the Employment Rights Act which contains the definition of redundancy and also adopts the suitable alternative employment provisions contained in sections 138 and 141 of the Employment Rights Act. The AfC paragraph however contains some modifications. These include a provision accepting continuous service in respect of the present or any previous NHS employer in calculating the length of employment and reckonable service. Secondly, and more significantly, the contractual redundancy payment was significantly increased to provide for a reference to a month’s pay for each year of service as opposed to the statutory entitlement to a week’s pay by which the statutory entitlement was calculated, in accordance with sections 221-229 of the Employment Rights Act. That provision is in paragraph 16.7. There were also some additional provisions excluding eligibility which are set out in paragraph 16.17, these included dismissal for reasons of misconduct; that the employee had obtained suitable alternative employment with the same or another NHS employer; and, relevantly, that he had unreasonably refused to accept or apply for suitable alternative employment with the same or another NHS employer. Section 16.19 contains the definition of “suitable employment” for the purposes of that basis for exclusion from eligibility which is particularly material to the issue now raised by the respondent. Section 16.19 states:- “Suitable alternative employment, for the purposes of paragraph 17, should be determined by reference to sections 138 and 141 of the Employment Rights Act 1996. In considering whether a post is suitable alternative employment, regard should be had to the personal circumstances of the employee. Employees will however, be expected to show some flexibility”. (Tribunal’s underlining). The reference to “for the purposes of paragraph 17” in paragraph 16.19 is clearly a reference to the exclusionary principle contained within paragraph 16.17 described above. In summary, Ms Jeram’s submission was that the provision in paragraph 16.19 and in particular in the last sentence added an additional hurdle which the employee had to overcome to be entitled to a contractual redundancy payment as opposed to a statutory redundancy payment. The respondent agrees that the Agenda for Change terms were expressly incorporated into the claimant’s contract of employment – see page 38 of the bundle:- “Your statement is not exhaustive or definitive of the contract. Your employment is also governed by the Agenda for Change NHS terms and conditions of service handbook …”. In paragraph 11 of the skeleton argument the respondent puts the claimant to proof that the enhanced redundancy pay provisions are apt for incorporation so that they are legally binding. Counsel cited a passage from the judgment of Hoffman J in Alexander v Standard Telephone & Cables Limited No 2 IRLR page 286 paragraph 31:- “Where a document is expressly incorporated by general words it is still necessary to consider, in conjunction with the words of incorporation, whether any particular part of that document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term of the contract”. Ms Jeram argues that the use of the words “arrangements for redundancy pay” in the introductory paragraph to section 16 of Agenda for Change casts doubt on whether that particular part of the Agenda for Change document is apt to be a term of the contract. I fundamentally disagree with that submission. The detail in paragraph 16 and the detailed way in which it is drafted; its specific references to and adoption of equivalent sections in the Employment Rights Act dealing with redundancy payments; and its detailed formula for the calculation of the enhanced redundancy payment all demonstrate that that section is apt to be a term of the contract and it was clearly expressly incorporated in the contract. The only issue remaining relates to the meaning and effect of the last sentence in paragraph 16.19. I was helpfully referred to the principle regarding the approach to modern contractual interpretation summarised by Lord Hoffman in Investors Compensation Scheme Limited v West Bromwich Building Society No 1 [1998] 1 Weekly Law Reports at page 896 at page 912:- “Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”. In my view there are two issues for me to decide here. The first is whether the expression “employees will however be expected to show some flexibility” was intended to have some contractual effect; and the second is, if it was, how the term is to be interpreted in the light of the express adoption of the provisions in section 138 and in particular section 141 of the Employment Rights Act. I have had little assistance as to what meaning the document or that phrase would convey to a reasonable person having the background knowledge reasonably available to the parties in a situation in which they were at at the time of the contract, presumably at the time of the negotiation between the unions and the employers at the time of Agenda for Change. I have concluded however that these words were not intended to have separate contractual effect and that they were not intended to add a gloss to the statutory test. A proposed concept of flexibility is one which would be very difficult to apply and judge and in particular to judge alongside the separate tests of suitability and whether an employee has unreasonably refused an offer of alternative employment. The words are in my view mere surplussage, an exhortation or expectation not intended to have legal effect. If I am wrong about that however I would still not find that the claimant failed “to show some flexibility”. He did, after all, apply albeit unsuccessfully, for another job within the new structure. Having found that the claimant reasonably refused the reduced Band 4 post of Information Technician, it would be illogical for the Tribunal now to find that a reasonable refusal demonstrated inflexibility on his part.

[8]The respondent’s costs application The relevant rules in the 2013 Regulations Rule 76(1) provides that:- “A Tribunal may make a costs order … and shall consider whether to do so, where it considers that –(a) a party or that party’s representative has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings or part or the way that the proceedings or part have been conducted; OR

(b) any claim … had no reasonable prospect of success”. This is sometimes referred to as the threshold test, which if met, may lead to the making of a costs order. Note that the rule provides that in those circumstances the Tribunal may make a costs order. It is not required to do so. If the Tribunal exercises a discretion to make a costs order, rule 78 defines the amount of a costs order. A costs order may order the paying party to pay the receiving party a specified amount not exceeding £20,000 in respect of the costs of the receiving party. A Tribunal may order a detailed assessment to be carried out by a County Court to assess the fees. The Tribunal also may order the paying party to pay a specified amount of a Tribunal fee paid by the receiving party. The Tribunal may also take into account the paying party’s ability to pay. This is contained in rule 84 which states:- “In deciding whether to make a costs order and if so in what amount, the tribunal may have regard to the paying party’s ability to pay”. In this case, on 6 February 2017 the respondent’s solicitors wrote what I regard as a reasonably temperate costs warning letter on a without prejudice basis. They pointed out that for the respondent to defend the claim successfully it would be required only to demonstrate:- (1) That a genuine redundancy situation existed; (2) That the redundancy was the real reason for the dismissal; (3) That it adopted a fair basis to select for redundancy in terms of – (a) the constitution of the selection pool of employees from which redundancies were to be made or alternatively that the affected employee was in a unique role and therefore not included in a selection pool; and that it carried out a fair and meaningful consultation within the context of a fair dismissal procedure and gave adequate consideration to finding suitable alternative employment”. The letter went out onto indicate that various points being put forward on the claimant’s behalf were in fact not well-founded. It is appropriate however, to indicate that the costs warning letter also referred to the weakness of the claimant’s claim for a redundancy payment with particular reference to the application for a contractual redundancy payment, on which the claimant has succeeded, although the respondent had refused even the statutory redundancy payment. In the view of this Tribunal it has been amply demonstrated that the claimant should have known, having had the opportunity to take legal advice, that his claim of unfair dismissal had no reasonable prospects of success from shortly after the delivery of this letter. There was clearly a redundancy situation not only in the information technology department but also much wider in Phase 2 of the redundancy round. From the start the claimant raised issues with the respondent which demonstrated that he refused to accept the obvious fact of the redundancy of his particular post. He raised objections during the course of the hearing including that a senior post within the department had been offered to someone else, but he did not apply for that post for himself, and it was irrelevant to his claim That situation had arisen before the redundancies were considered in Phase 2, in January 2016. The claimant’s response to the announced redundancy of his post following the initial consultation was that he went off sick and cleared his desk. He did not apply for an equivalent Band 5 post to his available at another Trust, although he did apply for another Band 5 post unsuccessfully within this Trust. As to consultation, the claimant had ample opportunity to make representations. Essentially his position remained that he did not accept that his existing role was or needed to be redundant and that remained his position despite clear evidence to the contrary during the adequate consultation which took place, and in which he did not fully engage In these circumstances I find that the cost threshold has been met. It is a material fact for the exercise of the discretion that the respondent did issue an appropriate costs warning letter. Notwithstanding that, the claimant continued with his claim of unfair dismissal, although clearly it was reasonable for him to continue with his claim for a redundancy payment. In all of the circumstances it is appropriate for the Tribunal to make a costs order and I have taken into account in assessing the claimant’s means that he is in receipt of a substantial contractual redundancy payment which will greatly exceed the amount of the costs claimed by the respondent. As to the amount, I note that the respondent has confined it to 70% of the costs incurred from the date of the expiry of the costs warning, 14 February 2017 onwards. That seems to me to be a realistic adjustment to take into account that the greater part of the costs were incurred in the defence to the unfair dismissal claim than to the unsuccessful defence of the redundancy payment claim. In these circumstances I order the claimant to pay to the respondent the sum of £4,682.23. I am satisfied that that amount of costs was properly incurred by the respondent in the defence of the claimant’s claim which had no reasonable prospects of success. EMPLOYMENT JUDGE HARGROVE