Employment Judge Adkinson sitting aloneIn person for claimantMr Swanson (instructed by solicitor) for respondentDate 24 March 2020
JUDGMENT
[1]The claim for redundancy payment succeeds. The claimant was redundant and that is why he was dismissed. The respondent therefore must pay the claimant the sum of £1,524.00 by way of redundancy payment.[2]The claim for unfair dismissal succeeds. Because there has been an award of a redundancy payment, the basic award is reduced to nil. There is no compensatory award because if the respondent had followed a fair procedure, the claimant would have been dismissed on the same date because of redundancy.
REASONS
[1]On 28 February 2019 the claimant Mr A Lo presented a claim to the Tribunal for unfair dismissal and for a redundancy payment. Initially he had brought a claim for race discrimination too, but that claim has already been dismissed.[2]The parties agree that: 2.1. throughout his employment Mr Lo was aged over 41 years old; 2.2. Mr Lo was employed on a fixed term contract that ended on 31 December 2018; Page 1 of 10 2.3. for the purposes of the Employment Rights Act 1996 this ending of the fixed term contract was a dismissal; 2.4. the Respondent offered of a new contract of employment to Mr Lo to commence in February 2019; but 2.5. that offer was not made until after his employment had ended on 31 December 2018 and in any case the new proposed employment would not have begun within 4 weeks of Mr Lo’s employment ending.[3]At the Preliminary Hearing before Employment Judge Hutchinson on 15 August 2019, Mr Lo clarified that his case was as follows: 3.1. As his employment came to an end, he was told he would be required to take a break in his contract of employment before a new employment contract which would commence in February 2019. 3.2. During January 2019 he would therefore have to work on a selfemployed basis. 3.3. During January 2019 the Respondent offered him a job with a lower salary with reduced hours. 3.4. He denies the fairness of the dismissal. 3.5. If there were a fair reason for dismissal it could only have been redundancy.[4]The respondent Adhar Project initially denied that the Mr Lo is due a redundancy payment because they said he was not redundant, and they also cited an offer of what they said was suitable alternative employment. After the close of their case they conceded that in fact he was dismissed for redundancy as defined by the Employment Rights Act 1996 section 139, that he was not offered suitable alternative employment within the meaning of the Employment Rights Act 1996 section 141, and so he is entitled to a redundancy payment.[5]The only potentially fair reason for dismissal that Adhar Project put forward in their response was some other substantial reason.
The hearing
[6]Mr Lo represented himself. Mr Swanson, solicitor, represented Adhar Project.[7]There was an issue at the beginning of the day in relation to the hearing bundles. Adhar Project was responsible for preparing them and delivering them. Their solicitors had arranged a courier to drop them off at the Tribunal at 9am. It appeared the courier had arrived before the Tribunal doors had opened. The courier therefore simply took them away back to the depot.[8]Unaware of this Adhar Project told the Tribunal they had been delivered. Tribunal staff tried to locate them but to no avail. The hearing did not begin until about 11 o’clock. Adhar Project’s own offices were nearby, and they agreed to print them to allow the hearing to proceed. We therefore agreed to allow them an hour to do this. Page 2 of 10[9]Mr Lo then disclosed that he was expecting to leave at 3pm. There is nothing on the Tribunal’s file to indicate that the Tribunal had agreed to him leaving at 3pm or to suggest he needed to leave by that point. The hearing was listed for a day. However, Mr Lo agreed with the Tribunal that while Adhar Project was copying the bundles, he would seek to arrange someone to cover his work he was going back to do. He was successful in arranging cover.[10]Mr Lo had prepared a witness statement which he had sent to the Tribunal and Adhar Project in November 2018.[11]Adhar Project had prepared a witness statement from Ms Harjit Sandhu which they say they had sent to Mr Lo also back in November. The day before the hearing however they resent a copy of Ms Sandhu’s witness statement and attached to it the witness statements of two other witnesses.[12]I was satisfied that the statement of Ms Sandhu had been sent in accordance with the Tribunal’s orders to Mr Lo. Mr Lo in any case consented to Adhar Project calling Ms Sandhu to give evidence.[13]Mr Lo objected to Adhar Project calling the other witnesses. I refused them permission to rely on those witness statements or to call those witnesses after hearing arguments from both parties. I was not satisfied that their evidence was relevant since it went purely to the issue of credibility in relation to background information that was not going to assist me in relation to the fundamental issues I had to determine, and because it had been served significantly beyond the deadline. It would have in effect have amounted to an ambush of Mr Lo and that was not fair. Allowing it would not further the overriding objective of ensuring the parties are on an equal footing and would have required more time, possibly an adjournment, that would not make proportionate use of the Tribunal’s resources.[14]I heard live oral evidence from Mr Lo and from Ms Sandhu. Each witness was asked questions by the Tribunal and allowed themselves to be asked questions by the other side.[15]After Ms Sandhu had given evidence, it was quite apparent from her answers to questions from the Tribunal that Mr Lo was redundant within the meaning of the Employment Rights Act 1996 section 139 and that the job offer to commence in February 2019 was not suitable alternative employment within the meaning of the Employment Rights Act 1996 section 141. After Ms Sandhu finished her evidence and a short break, Mr Swanson on instructions conceded on Adhar Project’s behalf that Mr Lo was redundant and had not been offered suitable alternative employment. Therefore, Adhar Project conceded he is entitled to a redundancy payment[16]Adhar Project did not concede there was an unfair dismissal. The case therefore continued. Because of the lateness in the day caused by the problems I referred to above I reserved my decision.
Issues
[17]The issues for me to resolve relate purely to the unfair dismissal. 17.1. Has Adhar Project demonstrated some other substantial reason for the termination of Mr Lo’s employment? Page 3 of 10 17.2. If so, was the dismissal fair or unfair in accordance with the substantial merits and equity of the case having regard to Adhar Project’s size and administrative resources? 17.3. If so, should any reduction be made to a compensatory award to reflect the chance that he would have been dismissed fairly by Adhar Project if they had followed a fair procedure.[18]There was no allegation of contributory conduct and I found none in my deliberations.
Findings of fact
[19]There was a significant dispute between the parties as to many of the background factual issues. However most of those issues turn out not to be relevant and so I have not tried to resolve them.[20]Where there has been a dispute between the parties and the factual issues require resolution by me, I have tended to prefer the evidence of Adhar Project. The reasons for that are their evidence is often supported by objective documentary evidence that was made available to me in the bundle. In addition, Mr Lo conducted himself in a way that came across as argumentative, aggressive and obstinate. I have thought carefully about whether this was a reflection merely of the Tribunal process and his partaking in it and I have thought carefully of the warnings in places such as the Equal Treatment Bench Book about drawing inference about credibility based on how a person answers questions in the witness box. I am satisfied his manner was not a reflection purely of the Tribunal process. He forcefully admitted had not bothered even to try to read the bundle before the hearing. Therefore, he was seeing many documents for the first time when being cross-examined. He would often point-blank allege he had never seen the document before. It is not believable that he did not receive any of the documents at the times they purport to be sent to him. It is astonishing he did not mention any of these things until he was asked. He said the same about Adhar Project’s witness statement from Ms Sandhu. His forceful behaviour did not present as someone who would hold back his opinion. The tenor and manner of his evidence was that this reaction was a knee-jerk response simply to frustrate Adhar Project’s case and was certainly undermined by the fact that he made no reference to any deficiencies in the documents at all until under cross-examination. His admitted refusal to read the bundle beforehand suggests a wilful refusal to engage in the claim he had brought. One allegation illustrates the point. For example, he alleged the signature on his contract of employment was a forgery. It is at the very least remarkable that this was never mentioned in his statement even though he had the documents bundle for some time beforehand, nor in any other part of the proceedings until he was asked about it by Mr Swanson.[21]I therefore make the following findings of fact.[22]The Adhar Project is a small mental health charity that focuses providing services it considers to be culturally appropriate activities and services for vulnerable mentally ill people in Leicester. It employs 7 people. It focuses on the ethnic minority community, but it does not limit its services to any Page 4 of 10 particular group. It depends on funding from Leicester City Council and the Leicester Clinical Commissioning Group, and must apply to those bodies for those funds. It must apply the funds received to the services for which those funds were awarded.[23]Mr Lo worked with Adhar Project between 2008 and 2012. There was a significant factual dispute about the nature of that employment but resolution of it would not take me any further forward to deal with the issues in this case.[24]There was a break in his employment between 2012 and 15 January 2016.[25]On 15 January 2016, Mr Lo commenced employment with Adhar Project as a mental health practitioner. He was employed on a temporary contract of employment which ended on 30 September 2017. Although he does not admit signing the document I find as a fact that he did sign the contract of employment. In any case it does not matter since the commencement of the employment on that date is an agreed fact.[26]On 30 September 2017 his employment did not in fact end.[27]Instead he instead became a Team Leader for the Depravation of Liberty (“DoL”) Project which was funded by the Leicester City Council. His salary increased to £27,000 a year gross.[28]There is a dispute as to whether there was an opportunity for him to transfer to another employer under the TUPE regulations in September 2017. Resolution of it does not assist me to resolve the dispute because it is common ground his employment did in fact continue with Adhar Project.[29]He remained as the Team Leader until September 2018.[30]In September 2018 the funding arrangement between the city council and Adhar Project came to an end. Minutes of a meeting that took place among Adhar Project’s management on 30 August 2018 confirm that the DoL Project had to cease because the city council had not provided them with enough cases to enable the DoL Project to work effectively or efficiently.[31]On 10 September 2018 Ms Sandhu wrote a letter to Mr Lo. It said: “As you are aware the DOLS contract finishes on 28 September 2018. We find ourselves in a difficult financial climate and it is not possible to offer anyone a permanent position of employment. This is the reason why all contracts in Adhar are temporary. However having not secured any of the mental health contracts from the Clinical Commissioning Group in Leicester City Council in 2017 it made a mutual decision to move from the Recovery Service to DOLS in order for you to have some further temporary full time employment and keep the same pay grade. The DOLS contract is finishing soon and I know that you are also using part of your time to support a few individuals with their recovery and for those individuals to complete their sessions. I can now confirm that you can stay for the months of October, November and December 2018 and we will fund your post from reserves. After this it will be finished but we are both working on funding applications, one of them will be successful. Therefore, you will be required to have a contract break and then return to a part- or full-time position if Adhar Project secures funding. Page 5 of 10 “The main reason for paying you from reserves for three months is so the clients that are having therapy can continue to benefit from your intervention assisting them to recover and I believe this is in the best interests of those patients.”[32]Mr Lo did not accept that he received this letter. I find as a fact that Mr Lo did receive that letter. In addition to my general observations about Mr Lo’s evidence, the contents of the letter tally with what is said in the minutes of Adhar Project’s management meeting from around that time. The content of the letter also tallies with documents from Leicester City Council to Adhar Project confirming that the contract between them ended by mutual agreement on 28 September 2018. I reject any suggestion these documents were fabricated. In any case the parties agree that Mr Lo continued to work with the Respondent until 31 December 2018 which tallies with the letter’s contents. It also tallies with Ms Sandhu’s unchallenged oral evidence.[33]Based on the same evidence and for the same reason I find as a fact that during October, November and December 2018 Mr Lo’s salary was funded not by grants from public bodies but by funding that was coming from Adhar Project’s own reserves. I also find as a fact that Mr Lo knew his salary was being funded this way. I believe this conclusion is also supported by Adhar Project’s evidence that he had some involvement in writing funding proposals and/or Mr Lo’s went so far to suggest he wrote entirely. On either version he knew how Adhar Project was funded. I find as a fact in the circumstances that Mr Lo knew his employment was secure only to 31 December 2018.[34]On 31 December 2018 Mr Lo’s employment ended because his fixed term contract that he had been on came to an end. As Adhar Project now concedes at that point in time he was redundant because there was simply no work for him to do due to the loss of funding from the city council and the cessation of the DoL Project.[35]There was no consultation exercise, consideration of selection criteria or offer of suitable alternative employment made before his dismissal. There was no search for suitable alternative work to commence within 4 weeks of dismissal. In short there were none of the usual steps one might expect in a redundancy situation.[36]After that time, it is agreed that Mr Lo worked with Adhar Project on a selfemployed basis.[37]It is agreed by the parties that because Mr Lo’s salary was £27,000 a year gross and his employment ended on 31 December 2018, a week’s pay under the Employment Rights Act 1996 for the purposes of his claim is £508.00.
The Law
[38]The Employment Rights Act 1996 section 95 defines the termination of a fixed term contract as a dismissal. Page 6 of 10[39]The Employment Rights Act 1996 section 111 entitles a person who has been employed for a sufficient period (which Mr Lo has) to bring a claim for unfair dismissal[40]Employment Rights Act 1996 section 98 provides (so far as relevant): “(1) In determining … 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 subsection (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 subsection if it— “… “(c) is that the employee was redundant, or “… “(4) Where the employer has fulfilled the requirements of subsection (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 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. “…”[41]The employer bears the burden of proving on the balance of probabilities that the claimant was dismissed for misconduct. If the if the employer fails to persuade the tribunal that had a genuine belief in the employee’s misconduct, then the dismissal is unfair.[42]While an employer can rely upon more than one reason, they should be specifically pleaded and argued before the employment tribunal (Murphy v Epsom College [1983] IRLR 395 EAT confirmed [1984] IRLR 271 CA). If he relies only upon one reason and that fails, it follows that the dismissal will be unfair even if another reason might successfully have been argued Robinson v Combat Stress UKEAT/0310/14 EAT.[43]If the reason for non-renewal of a fixed term contract is a redundancy, then that is to be treated as the reason for the dismissal Pfaffinger v City of Liverpool Community College and Another [1997] ICR 142 EAT.[44]For the expiry of a limited term contract to amount to some other substantial reason the employer must show that the contract was adopted for a genuine purpose known to the employee and that the purpose has ceased to be applicable: Faye v North Yorkshire County Council [1986] ICR 133. Page 7 of 10[45]When it comes to reasonableness the burden of proof is neutral. The tribunal should consider all the circumstances including the employer’s size and administrative resources.[46]In Williams and ors v Compair Maxam Ltd 1982 ICR 156 EAT, the Employment Appeal Tribunal set out guidelines that a reasonable employer might be expected to follow in making redundancy dismissals, while emphasising that the Tribunal cannot substitute its own view but must focus on whether the decision was within a reasonable period. These factors are 46.1. whether the selection criteria were objectively chosen and fairly applied, 46.2. whether employees were warned and consulted about the redundancy, 46.3. whether, if there was a union, the union’s view was sought, and 46.4. whether any alternative work was available.[47]The ACAS Code of Practice on Disciplinary and Grievance Procedures does not apply.[48]Ultimately each case must turn on its own facts and be broadly assessed in accordance with the equity and substantial merits: Jefferson (Commercial) LLP v Westgate UKEAT/0128/12 EAT; Bailey v BP Oil Kent Refinery [1980] ICR 642 CA.[49]The Tribunal awards compensation by reference to a basic award and compensatory award.[50]The Employment Tribunals Act 1996 section 119 sets out how to calculate the basic award.[51]Employment Rights Act 1996 section 122(4) says that the amount of the basic award shall be reduced or further reduced by the amount of any redundancy payment awarded by the tribunal under Part XI in respect of the same dismissal.[52]The Employment Rights Act 1996 section 123 empowers a Tribunal to award compensation that is “just and equitable” in the circumstances.[53]The rule in Polkey requires a Tribunal to consider the prospect that an employee might have been dismissed in any event.[54]The approach to the assessment is set out in Software 2000 Ltd v Andrews [2007] IRLR 568 EAT: it is whether it can make any assessment with sufficient confidence about what is likely to have happened, using its common sense, experience and sense of justice. It may not be able to complete the jigsaw but may have sufficient pieces for some conclusions to be drawn as to how the picture would have developed. Furthermore, in Hill v Governing Body of Great Tey Primary School [2013] ICR 691 EAT, the Tribunal said the assessment is predictive – could the employer fairly have dismissed and, if so, what were the chances that the employer would have done so. The tribunal must consider not a hypothetical fair employer but has to assess the actions of the employer who is before the tribunal, on Page 8 of 10 the assumption that the employer would this time have acted fairly, though it did not do so beforehand.[55]The assessment may be that a dismissal would have occurred by a fixed date or that there was a percentage chance it may have happened at some point.[56]The Employment Rights Act 1996 section 126(3) compels the Tribunal to consider the issue of contributory fault in any case where it was possible that there was blameworthy conduct on the part of the employee relating to the unfair dismissal. This is so regardless of whether the issue was raised by the parties: Swallow Security Services Ltd v Millicent UKEAT/0297/08 EAT.[57]The focus can be only on the employee’s conduct before dismissal and not that of others: Parker Foundry Ltd v Slack 1992 ICR 302, CA; Mullinger v Department for Work and Pensions 2007 EWCA Civ 1334, CA.[58]Before any reduction can be made, the Tribunal must be satisfied that the relevant conduct is “culpable and blameworthy” and if it is just and equitable to reduce compensation because of the relevant conduct: Nelson v BBC (No2) [1980] ICR 110 CA.[59]It is not necessarily the case the employee should know the conduct is culpable or blameworthy. The Tribunal can also consider the employee ought to have known it was culpable or blameworthy: Allen v Hammett [1982] ICR 227 EAT; Department for Work and Pensions v Coulson UKEAT/0572/12 EAT.[60]The basic award and compensatory award can be reduced by different amounts, but normally it should be the same amount: G McFall and Co Ltd v Curran [1981] IRLR 455 NICA.
Conclusions
[61]Adhar Project conceded that Mr Lo was redundant and they did not offer him suitable alternative employment.[62]The reason for dismissal therefore was redundancy.[63]Mr Lo is entitled therefore to a redundancy payment. He is entitled to a payment of 1.5 × 2 years × £508 = £1,524 gross by way of redundancy payment.[64]Adhar Project has in the circumstances failed to prove the only pleaded potentially fair reason for dismissal. Some other substantial reason was not in fact the reason for dismissal.[65]Therefore, the dismissal is by that very reason unfair.[66]If I am wrong about that I have considered what my decision would have been if Adhar Project had shown that the reason for dismissal was redundancy.[67]I acknowledge that Adhar Project is a small employer of limited resources. I acknowledge that in September 2018 Adhar Project alerted Mr Lo to the fact his employment would end in December 2018. Page 9 of 10[68]However, there was no selection criteria and no consultation about the redundancy. I conclude there was suitable alternative work available for immediate employment or to commence within 4 weeks of his dismissal, but it seems not thought was given to investigating this issue or discussing it either with Mr Lo.[69]If the dismissal were for redundancy then I would still have concluded that the dismissal was unfair because of the lack of selection criteria or consideration of suitable alternative employment but more importantly because of the lack of consultation.[70]I will not award Mr Lo a basic award for unfair dismissal. He would ordinarily be entitled to 1.5 × 2 years × £508 = £1,524. Because I have awarded him a redundancy payment, I have reduced the basic award to nil to reflect that.[71]It is quite clear from facts as found that Mr Lo was redundant in any case. There was no suitable alternative employment. Consultation and selection criteria would not have made any difference. His role and the need for him had come to an end. The funding had run out. If the Adhar Project had followed a fair procedure I am satisfied that Mr Lo’s employment would nevertheless have ended on 31 December 2018. I therefore make no compensatory award because I conclude that any award should be reduced by 100% under the rule in Polkey.[72]Contributory conduct is therefore irrelevant. However, I can detect no contributory conduct that would have warranted any reduction in any event.