Mr. N. MochrieClaimantCSY Architects Ltd.Respondent
Before
Employment Judge TinnionDate 20 March 2025
JUDGMENT
[1]The reason for the Claimant’s dismissal was performance, not redundancy.[2]The Claimant’s claim for a redundancy payment under ss.163-164 of the Employment Rights Act 1996 is not well founded and is dismissed.
REASONS
[3]Following his dismissal by letter dated 31 May 2024 with effect from 30 June 2024 [67-68], the Claimant contacted ACAS on 7 October 2024 [1], ACAS issued an EC Certificate on 17 October 2024 [1], and on 17 October 2024 the Claimant presented an ET1 [2-14] bringing claims for unfair dismissal, notice pay, holiday pay and a statutory redundancy payment under ss.163-164 of the Employment Rights Act 1996 (ERA 1996). All claims except the redundancy payment claim were presented out of time. At the final hearing, the only claim pursued was the redundancy payment claim. By its ET3, the Respondent, an architects firm, contended it dismissed the Claimant on performance grounds, not redundancy, and denied any liability to pay a redundancy payment.[4]The final hearing was held on 17 March 2025, was conducted via video/CVP, and was recorded. The Claimant was represented by a lay representative. The Respondent was represented by one of its directors, Mr. D. Strachan. Both parties prepared productions, which the Tribunal paginated pp.1-76 (Claimant’s documents) and pp.77-152 (Respondent’s documents) – all references in square brackets are to those pages. The sole witness was Mr. Strachan. The Tribunal was satisfied Mr. Strachan sought to give the Tribunal his honest recollection of the events in question and why he acted as he did at the time – he was a credible witness. Judgment was reserved.
Findings of fact
[5]The findings of fact below, including any in the Discussion/Conclusions section of this Judgment, are made on the civil balance of probabilities.[6]The Respondent’s predecessor was founded in 1963, initially trading as Camerons Architects. Its core function then was, and still remains, the provision of architectural services in sectors including domestic homes, affordable housing, community projects, as well as commercial developments. In 2018, it began trading as CSY Architects under the leadership of Mr. Strachan and co-director Gavin Yuill. In 2020, it rebranded as Cameron Strachan Yuill Architects, and rebranded again in 2023 as CSY Architects. In September 2024, it acquired another architects practice, Davidson Baxter Partnership (DBP). In 2024, the Respondent was not experiencing any material business or financial difficulties – its business was on a gradual trajectory of managed growth.[7]In April 2017, the Respondent hired the Claimant as a Senior Architect, initially in its Galashiels office. The Claimant is also a university lecturer with teaching responsibilities, so he was hired to work on a part-time basis. Broadly speaking, the role of a Senior Architect was to assist in the design and drawing work of projects of various sizes from inception to completion, to contribute to teamwork in the office, to assist with client and project team communications, and to assist with promotions/PR. By 2023, the Claimant was now based in the Respondent’s Dalkeith office.[8]On 4 April 2023, Mr. Strachan conducted the Claimant’s annual review, the outcome of which Mr. Strachan memorialised in an email he sent the Claimant on 11 April 2023 [59] which stated (in full) as follows: “I am writing to follow-up on our meeting of the 4th of April, in order to record some of the key action points agreed. We will be in touch to arrange a further review in the next month, when we can discuss progress on these points. In the meantime, please complete a digital version of the review document and return this to us. As you are aware, the past few years at CSY have been defined by bringing together three practices with a view to making something greater than the sum of its parts. The pursuit of this vision has required Gavin and I to manage a lot of change, harmonising systems and configuring the team to be the best it can be. As you have known Gavin for many years, I’m sure you will appreciate that this is a dream that we have shared for a very long time and we are really keen to bring the team with us on this journey. We have been successful in bringing together some great people at every level and are pleased with how engaged and invested people are in this. However, certain aspects of how the pre-merger companies operated were far from ideal and certain old habits must be broken if we are to succeed. As positive and aspirational as we endeavour to be, pursuing this vision sometimes requires challenging conversations. Given your history, Gavin understandably finds it difficult to be as frank as me about how this relates to you, but we are agreed on what is required. As mentioned at the beginning of the meeting, the role of Senior Architect can cover a range of definitions, so what is most important is to ensure your role is configured to maximise value and complement others. Most of the functions that might be expected under this role, and which are carried out by others with this title and pay-grade, are not currently included in what you do. Indeed, you were clear during the meeting that you are not a manager and don't wish to be. You also expressed a desire to continue involvement in projects beyond the early stages, but not to manage them. Given that your directly produced output needs to be re-produced, the value of your input must therefore be in the experience and understanding you bring to the design process when working with more junior members of staff. The cost-to-value equation of this approach could potentially work if the proportions of your time and theirs were balanced, but this isn't currently the case. For this to Improve, the proportionality of your time and the input of others would need to be much closer to the role of a tutor. For this to be achieved, it is necessary for you to spend time In the office with the junior staff. This was explained and requested by Gavin several months ago, but not actioned. Bearing in mind the above, below are the actions required for your role to work effectively and efficiently within the wider team: Default to working in an office - For clarity, this should be a minimum of two out of your three working days. Dalkeith was agreed to be the default location, but this will be reviewed as further work is done to bring the Galashiels office up to the same standard as the other two. Manage workload to meet deadlines - This includes being realistic about what can be achieved and requesting help to ensure deadlines are met if you are unable to complete a task yourself. It also includes being proactive about pushing projects forward to earn fees. Allocate time proportionately and efficiently - Maximising the impact of your valuable knowledge and skills will require careful management of your input in proportion with others. In principle, this would mean minimal input on a large number of projects, supporting more junior staff to produce the output. In practice this will require proactive use of CMAP, ensuring the time spent mentoring has a net benefit after accounting for doubling-up. Communicate effectively and be considerate of everyone's time - There will of course be discussion and deliberation, but this must also be actioned, which requires time. Timely communication and careful sequencing of inputs is therefore important to maximise everyone's effectiveness. Complete all historic time-sheets and keep these up-to date in real time - This is necessary for the proper functioning of the team and is not optional. Your input Is of great value and there is no question of your dedication or the high quality of your work However, when reflecting on our recent meeting, Gavin and I weren't confident that you are clear on the need for some proactive change. We therefore felt that it would be important to prepare a list of clear actions. Although these are critical by definition, we hope that you will nevertheless see that the overarching Intention remains to make the CSY the best team it can be and for you to continue on this journey with us. We look forward to reviewing the above points with you again soon.”[9]The Tribunal accepts the concerns Mr. Strachan expressed about the Claimant’s performance in April 2023 were genuinely held, and the improvements requested were aimed at improving his performance. Mr. Strachan’s fundamental concern was not the quality of the Claimant’s work, but his productivity – in simple terms, the Claimant was taking too long to do the work he was required to do. What Mr. Strachan was asking the Claimant to do was(1) speed up his work, and(2) change how he engaged with other staff members.[10]On 26 June 2023, Mr. Strachan, Mr. Yuill and the Claimant attended an interim review meeting with the Claimant (which was not documented).[11]By April 2024 the Claimant was due to have his next annual review. By email on 23 April 2024 [63], Mr. Strachan forwarded his 11 April 2023 email to the Claimant as a reminder of the points to be discussed at the upcoming annual review meeting, which was held on 13 May 2024, with a follow-up meeting on 20 May 2024. Neither of those meetings were documented, but it is clear that at one of them, likely the 13 May annual review meeting, Mr. Strachan raised the possibility of the Claimant moving from being an employee to working for the Respondent on a self-employed consultancy basis. In his ET1 narrative, the Claimant accepted that at this annual review meeting Mr. Strachan raised issues about his performance [9], but complained he was not given specific targets for improvement, or a timescale/monitored period for improvement, or specific targeted support. These criticisms are likely valid, and the Respondent might have been in difficulty had the Claimant timely presented a claim for unfair dismissal on capability grounds (which covers performance).[12]By 20 May 2024, with Mr. Yuill’s consent and agreement, Mr. Strachan had decided to end the Claimant’s employment. His genuine view at the time was that while the Claimant had made sufficient progress on two of the five matters highlighted in his 11 April 2023 email, the Claimant had still not made sufficient progress on(1) managing his working to meet deadlines(2) allocating his time proportionately and efficiently, and(3) communicating effectively with his colleagues. While further improvement was still required on completing timesheets and keeping them up to date, Mr. Strachan accepted the Claimant had made sufficient progress that this issue, on its own, would not have led to dismissal.[13]By email on 31 May 2024 [65], Mr. Strachan sent the Claimant an email attaching a letter [67-68] dismissing the Claimant with a month’s notice, with his last working day to be 30 June 2024. The letter stated (in full) as follows “Further to our meetings on the above dates our Galashiels and Dalkeith offices, also attended by Gavin Yuill, and associated emails of (11/4/2023, 23/4/2024 and 7/5/2024) I write to confirm the outcome of the performance review process and next steps. As you know, since merging the three practices to form what is now CSY Architects, we have endeavoured to support every individual within the team to create something greater than the sum of its parts. This has included ongoing performance reviews of team members and supporting the development of individual roles, which must be balanced with the need to protect the whole team and ensure the business succeeds collectively. A number of issues with your individual performance were identified at the earliest of the above noted reviews, and ways in which these could be addressed were noted in the email of 11/4/2023. There have been three further reviews since then and although efforts have clearly been made to address some of these points, resolution of them remains incomplete over a year later. In aggregate, the points raised create a financial strain on the company, which can no longer be sustained. We have made several attempts to address these points through open discussions and considering potential changes to the nature of your role, but this has been unsuccessful. Although we can see that efforts have been made on your part, we also remain unconvinced that the serious nature of this position has been given due attention, giving us little faith that there will be any further improvement. As a result of the above process, we have therefore concluded that your salaried position with CSY Architects must come to an end, and we hereby provide you with one calendar month's notice of this. Your last employed day with CSY Architects will be 30th June 2024. Any unused holidays may be taken after this date, although in line with standard terms of employment, we reserve the right to require these to be taken within the notice period. As it was clear at our most recent meeting that we would be issuing this notice, we had discussed with you the possibility of an ongoing working relationship under a selfemployed consultancy arrangement. This would be task-based rather than based on hours-spent, although the associated fees would be based on an agreed rate and a capped calculation of the likely hours required to complete it. Whilst this may seem incongruent with the decision to end your salaried employment, we have not questioned the quality of your input or your knowledge and experience. This arrangement would allow CSY to continue benefitting from what you have to offer, whilst placing the risk associated with the time taken to achieve tasks outside of the company. We have floated this with you on multiple occasions and we had hoped that some agreement on this might be reached in time to issue this letter, but there has been insufficient progress on this discussion for that to happen. Notice that your salaried position will end is therefore now given without clarity about any future arrangements, but we remain open to discussing those over the coming weeks. I understand that this will be a difficult letter to receive and regret that it has become necessary to issue it to you, especially given your long-standing relationship with Gavin. I trust you will nevertheless understand that we must think of the whole team and that it remains possible for this relationship to continue in a different form.”[14]By email on 3 June 2024 [65], the Claimant acknowledged receipt of this letter (which had not offered the Claimant a right of appeal). He confirmed he would not be taking up the offer of working on a self-employed basis. Consistent with his professional responsibilities (there being no question about the quality of his work), the Claimant asked Mr. Strachan what he needed to do to bring the work he was undertaking to a conclusion.[15]In January 2024, the Respondent employed a total of 7 Senior Architects. Following the Claimant’s dismissal the number temporarily reduced to 6. Following the Respondent’s acquisition of DBP in October 2024, the Respondent took on DBP director Stewart Davidson as a Senior Architect, with the intention of employing him in that role until his retirement. In the last two months of 2024 and January 2025, the Respondent once again employed a total of 7 Senior Architects.
Relevant law
[16]Section 139(1) of ERA 1996 provides: “(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—(a) the fact that his employer has ceased 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, have ceased or diminished or are expected to cease or diminish.[17]Section 163(2) of ERA 1996 provides (in relevant part) that “an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy.” The burden therefore falls on the employer to prove that an employee was not dismissed by reason of redundancy, not on the employee to show that they were. Discussion / Conclusions[18]For the reasons set out below, the Tribunal concludes that the Respondent has discharged its burden of proving that the Claimant was not dismissed by reason of redundancy.[19]First, at the time of the Claimant’s dismissal in May 2024, the Respondent had neither ceased nor did it then intend to cease to carry on the business for the purpose of which it employed the Claimant, namely, the business of an architectural practice. The Claimant’s representative accepted this. The Tribunal finds that at that time, the Respondent’s intention was to continue to grow its architectural practice through a mixture of organic growth and acquisitions when opportunities arose.[20]Second, at the time of the Claimant’s dismissal in May 2024, the Respondent had neither ceased nor did it intend to to cease to carry on its architectural practice at the Dalkeith office where the Claimant was based. The Claimant’s representative accepted this. The Respondent still has a Dalkeith office.[21]Third, at the time of the Claimant’s dismissal in May 2024 the Respondent’s requirement for employees to carry out either architectural work in general or the Claimant’s specific type of architectural work in particular – the work of a Senior Architect - had not ceased, had not diminished, and was not then expected to cease or to diminish. The Claimant’s representative accepted there was no evidence prior to the dismissal letter that the Respondent was in business or financial difficulties. This is because the Respondent was not in business or financial difficulty at the time, and was not looking to save money. There was no evidence the Respondent was looking to reduce staff headcount before, during, or after May 2024 – the evidence showed the Respondent was looking to address specific issues arising out of the Claimant’s performance as one of its Senior Architects, which had been raised with him at his annual review on 4 April 2023, were noted in writing on 11 April 2023, and discussed at a series of review meetings with the Claimant on 26 June 2023, 13 May 2024 and finally 20 May 2024.[22]The Tribunal does not accept the reference to “financial strain” in the Claimant’s dismissal letter [67] suggests the Respondent was or might have been in financial difficulties at the time. An almost inevitable consequence of any employee underperforming in their role while working in any commercial undertaking is a negative financial aspect arising out of that underperformance. This is all the dismissal letter was referring to.[23]The Tribunal also does not accept that the Respondent’s offer of continuing to employ the Claimant on a self-employed consultancy basis, rather than continuing to employ him as a Senior Architect, shows that the Respondent’s requirement for employees to carry out Senior Architect work had ceased, or diminished, or was expected to cease or diminish. The Tribunal finds that had the Claimant made sufficiently satisfactory progress on the five matters raised on 4 April 2023 and noted on 11 April 2023, the Respondent likely would not have dismissed the Claimant in May 2024 and likely would have carried on employing him as one of its Senior Architect. The Respondent’s offer of selfemployment to the Claimant, in which he would be paid by output rather than by time, was an attempt to shift from the Respondent to the Claimant the financial consequences of the Claimant’s insufficient productivity.[24]Fourth, at the time of the Claimant’s dismissal in May 2024, the Respondent’s requirement for employees to carry out either architectural work in general or the Claimant’s type of architectural work – that of Senior Architect – specifically in the Dalkeith office had not ceased, had not diminished, and was not then expected to cease or to diminish. The Claimant’s representative accepted this.[25]Fifth, having heard Mr. Strachan’s evidence under cross-examination, and having reviewed the documentation to which it was referred, the Tribunal is satisfied that the Respondent’s reason for dismissing the Claimant were concerns regarding the Claimant’s performance as a Senior Architect which were raised at his annual review on 4 April 2023, and considered at a series of subsequent review meetings, including the Claimant’s 2024 annual review on 13 May 2024. It was the Respondent’s dissatisfaction by 20 May 2024 with the level of progress the Claimant had made regarding three of the five matters Mr. Strachan had noted in writing and brought to the Claimant’s attention by email on 11 April 2023 which led to, and was the sole reason for, the Claimant’s dismissal. The reason for dismissal was performance, not redundancy.