Littlewoods Organisation Plc v Hill [1992] UKEAT 135_91_0311

EAT

Littlewoods Organisation Plc v Hill

[1992] UKEAT 135_91_0311 · 1992-11-03

JUDGE HULL QC :

This is an Appeal to us from the Industrial Tribunal sitting at Truro on 24 January 1991. Mrs Hill, who was an employee of Littlewoods Organisation Plc whom I will call "the employers", applied to that Tribunal, complaining of unfair dismissal. She had been at the employers' store in Truro since 1979; at first in a junior position and then she had risen to the post of Staff Manager. There is no complaint against her whatever. She discharged her duties as Staff Manager entirely satisfactorily. However, at the end of 1989 the employers came to the conclusion that her job was redundant. There was not enough work in it for a person of her standing. There was very low staff turnover so that the task of recruitment, which was one of the main duties of the job, was really vestigial; and correspondingly of course training was less important and the task of administration which went with the job was less onerous than it otherwise would be. The view was formed that such work as there was was worthy of a less senior employee and that the post was redundant.

There were however more pressing matters to attend to. There was considerable re-organisation going on and so action with regard to Mrs Hill was deferred until 1990 and the decision was then taken that she should be made redundant. There was a meeting. She, as the Staff Manager, was familiar with the procedure; it was part of her job. On 1 June 1990 a letter, which is at page 16 of our bundle, was written to her by the employers recording the meeting at which her redundancy had been explained to her and mentioning that Mr Barber, of her trade union, had been present. The reasons for the redundancy were explained and the payment - by no means an ungenerous one on the basis simply of redundancy - was set out. She was to work until 30 June; then she had a substantial redundancy payment and on top of that a 12 weeks' notice entitlement. The total sum of £8,446 was to be paid to her.

That was the situation and of course it must have been a shock to Mrs Hill. She was, I should explain, one of six managers at this level in the store. There were other managers such as an Office Manager, Restaurant Manager and Sales Manager.

In due course, Mrs Hill returned to her place of work and that very day she had a conversation with the Office Manager, another person of roughly equivalent standing at the stores, a Mrs Bonney. According to Mrs Hill the following conversation took place. It is recorded on her application to the Tribunal (as amended) and as quoted by her union representative it is as follows:

"She states that the office manager Mrs Heather Bonney informed her on the day that Mrs Hill was made redundant that if volunteers had been sought for redundancy Mrs Bonney would have volunteered."

Now it is common ground that none of the managers were asked by the company, before making Mrs Hill redundant, whether they would wish to volunteer for redundancy. So to complete a day of shocks, that was something which was explained to Mrs Hill that very day, that Mrs Bonney would have volunteered.

There was in fact what has been referred to as a Redeployment Agreement which a good deal turns on. That is set out at page 31 of the preceding pages of our papers and says as follows:-

"Redundancy

If following the above measures [which are measures to mitigate or avoid redundancy] redundancy or relocation is still necessary, the Company will negotiate with the Unions the categories and numbers of employees affected.

Where a reduction in manning levels cannot be satisfactorily resolved by relocation/redeployment or natural wastage, the Company will invite volunteers for redundancy from the categories of staff concerned.

Under certain circumstances, the Company may also accept volunteers from amongst other categories of staff not directly affected if this will assist in resolving the problem.

At all times, the acceptance of volunteers for redundancy will be subject to operational requirements."

So that was the Redeployment Agreement to which of course the employers and employees were in effect parties, and it is worthy of note, that neither Mrs Hill nor her union representative thought it right to say to the employers at that stage, or indeed at any stage before she left the employers or before the expiry of her notice - "you really should look for volunteers, Mrs Hill does not want to be made redundant and she thinks one of the other managers would be prepared to volunteer for redundancy". Neither she nor her union representative said that and when the application was made to the Industrial Tribunal on 5 August 1990, a different ground for alleging unfairness in the dismissal was given in the application.

That was put right in due course. On 5 November there was an amendment raising the ground with which we are concerned today and the way it was put was this, in a letter written just before by the union:

"I wish to advise you that if possible Mrs Hill would like to add to her original IT1 form further details of her complaint against her previous employers. Mrs Hill wishes to add that she also feels that the Company acted unreasonably and outside the terms of normal procedure by not first seeking volunteers for redundancy."

That is followed by the passage which I have already quoted.

That was her complaint made against the Company, something like 5 months after Mrs Hill had first learned that she was to be made redundant. The Industrial Tribunal proceeded to hear the case on that basis. They dealt first of all with the ground with which we are not concerned, and they then went on to consider the allegation of unfairness in that the Company had failed to seek volunteers. They dealt with that as follows:

"The company did not consider seeking volunteers from the management level. That did not occur to them as a possibility.

Mrs Hill had been asked during the early months of 1990 to become more involved on the sales floor and she had been unwilling."

The Tribunal continue at para 13:

"Although the company did not ask for volunteers, Mrs Bonney, the Office Manager, would probably have volunteered. Eventually she did leave to join another company. The question of volunteers was not raised because it simply did not occur to the respondents. They did not consider that there should be a request for volunteers because they were very happy with the Managers as a whole, and their performance. The only problem was that they did not consider that they needed a Staff Manager."

Then they referred to the Redeployment Agreement which I have already read and going on at para 18:

"Mrs Hill's second argument, however, has rather more force. Mrs Bonney was the Office Manager. Had she been asked she would have volunteered for redundancy. The question then is to consider why she was not asked. The company's case is that they did not ask her because they did not consider that they were obliged to ask for volunteers from the Managers. They did not want any one of them volunteering for redundancy.

They maintain that all the Managers were carrying out specialist jobs very well. Had they asked for volunteers, which they did not, and had any of the other Managers volunteered, they would not have accepted the offer because of operational requirements. There would have been no point in seeking volunteers in that event.

We have to consider whether that was an unreasonable view. On this we are divided."

And then the Chairman gives the majority members' view.

"They consider that the re-deployment Agreement specifically envisages the possibility of retraining. That is referred to in paragraph 5 under the provisions for "providing suitable alternative employment". Had volunteers been sought, Mrs Bonney would have emerged as a willing candidate for redundancy, and during the period of her notice Mrs Hill could have been trained by her in the work of Office Manager.

It is accepted that there are differences between the work of Office Manager and that of Staff Manager but in many of the respondent's stores the same person carries out both functions. The majority of us consider that the work of Office Manager was within the capability of Mrs Hill subject to a period of retraining.

Whilst she might not be able to go straight into the job, she could have been re-trained during the period of Mrs Bonney's notice. There appeared to be no reason why she would not have made a perfectly satisfactory Office Manager. It was a course which should have been considered by the respondents. Their failure to do so rendered Mrs Hill's selection for redundancy unfair.

Mrs Bonney's volunteering for redundancy would have produced a vacancy. That would have been "alternative employment" within the provisions of the Re-deployment Agreement, paragraph 5."

So that was the view of the majority; and it is criticised by Mr Bradley as showing an anxiety by the majority members to say how the employers should have managed their business. A judgment, says he, such as "the majority of us consider the work of Office Manager was within the capability of Mrs Hill" was going far outside their competence. They were putting themselves in the place of management. I will go on with what the Chairman says.

"The Chairman, dissenting on this point, takes the view that the provision for seeking volunteers is an obligation to consider volunteers for redundancy where the staff are in effect interchangeable and can be regarded as coming from one category. For example , if from the shop floor one person is to be made redundant out of six Sales Assistants, there would be an obligation to seek a volunteer.

The Chairman accepts the company's argument that the provision cannot be applied where Managers are concerned, carrying out specialist functions. If, for example, the Restaurant Manager had decided to volunteer for redundancy, it would be unreasonable for the company to have to re-train Mrs Hill as a Restaurant Manager.

The majority members accept that in that event the proviso as to operational requirements could have been applied, but that would not have occurred. It was Mrs Bonney, the Office Manager, who would have volunteered, and such a specialist problem would not have arisen."

The employers, challenge the judgment of the majority and refer first and foremost to the provisions of the Re-deployment Agreement. I have already read that. What is said by Mr Bradley is that the first paragraph which we have cited:

"The company will invite volunteers for redundancy from the categories of staff concerned."

is in its terms a directory, that is to say it does not appear to leave any discretion in the matter to the employers:

"That refers", says Mr Bradley, "to categories of staff and it must be, in commonsense and having regard to what follows, referring to people doing the same sort of work, who are in effect interchangeable."

We think there is great force in that argument. If there are, say, six people doing exactly the same work, perhaps six sales assistants in the shop, and it is necessary to reduce the number to five, it would be rational and sensible in the first place to ask if there is a volunteer or volunteers amongst them for redundancy. The agreement goes on:

"Under certain circumstances, the company may also accept volunteers from amongst other categories of staff not directly affected if this will assist in resolving the problem."

and Mr Bradley says - "well, that might well apply here because" he says "a restaurant manager, a sales manager, an office manager, is in a different category from the staff manager. Their skills are different; their training is different; what they are required to know and their responsibilities, everything is different about them. Nonetheless it might well be that the employers would take the view that they should seek a volunteer from some other category of person; taking the view that perhaps the person who is to be made redundant might very well fit in to a different niche and might be worth training". That, he says, is eminently a decision for the employers. In its terms this provision is optional and that is emphasised by what follows. At all times the acceptance of volunteers for redundancy will be subject to operational requirements. He says, therefore, that if the employers are faced with a redundancy situation, and might have to make somebody redundant, then they are, at their discretion entitled to look and see whether there are volunteers in another category; but that is a matter for the employers. It is also a matter for the employers to decide whether, if there is a volunteer, his offer is to be welcomed by the employers or not. That depends upon operational requirements, and no Industrial Tribunal, still less any Appeal Tribunal, are to be the judges of that. The question is not - "Would the Industrial Tribunal have done such and such or does the Industrial Tribunal think it reasonable to do such and such?"; the question is "whether the employers discharging their undoubted responsibility and right to manage their own business, have acted within the band or range of options open to a reasonable employer". In most situations it is possible to say that one employer might do one thing, one might do another; because human affairs and businesses are infinitely various and what seems obvious and easy to one employer may seem impossible to another employer in all the circumstances.

Mr Bradley says the majority went far beyond their rights in imposing on the employers what they thought was reasonable. They thought it was reasonable to enquire for volunteers and that it would have been reasonable to accept Mrs Bonney's volunteering which would, in those circumstances, have occurred. They asked themselves the wrong question, says Mr Bradley. They should have asked themselves "Was it within the band of reasonable responses for the employers to decide, in the circumstances, not to seek volunteers from the different categories - the other managers - having regard to operational requirements?".

A substantial part of that argument is accepted by Mr Grundy for Mrs Hill. But, he says we should look at what the majority (and indeed the Tribunal unanimously) actually found. He invites attention to paragraph 7. It was not a case, says he, of the employers addressing their minds to the question whether they should have sought volunteers they simply never thought about it.

The Tribunal record in para 11:

"The company did not consider seeking volunteers from the management level. That did not occur to them as a possibility"

and at para 13:

"The question of volunteers was not raised because it simply did not occur to the respondents."

This entire contention was put forward on what might seem to be an artificial basis. It had never been put to the employers by their very experienced staff manager herself, or by her union representative, or in her original application to the Tribunal. It was put forward for the first time by amendment, something like 5 months after she had learned of her dismissal; and the references to Mrs Bonney were, so far as the employers were concerned, all ex post facto. We have been told today that Mrs Bonney did not in fact make her intentions known to the employers until about the time when this amendment was made in November, when Mrs Hill had long since left her employment and had apparently found herself other part-time employment: hence the way in which it was put. It had seemed to us that the correct way of putting it might be not that "they had not asked for volunteers" but that "they had not offered Mrs Bonney's job to Mrs Hill and offered to re-train her". It will be seen however from looking at those new facts that that would not have been an appropriate way of putting it. Although Mrs Bonney had made her intentions known to Mrs Hill on 1 June or thereabouts, they had not apparently been mentioned to the employers.

The Tribunal said of the employers:

"They did not consider that there should be a request for volunteers because they were very happy with the Managers as a whole, and their performance. The only problem was that they did not consider that they needed a Staff Manager."

At para 19 the Tribunal say:

"They [the employers] maintain that all the Managers were carrying out specialist jobs very well. Had they asked for volunteers, which they did not, and had any of the other Managers volunteered, they would not have accepted the offer because of operational requirements. There would have been no point in seeking volunteers in that event."

That was what the employers said. Mr Grundy submits that the Industrial Tribunal were finding that the employers never addressed their minds to something which they should have done. This is a slightly odd submission in a sense, because the allegation is that they never addressed their minds to something which Mrs Hill herself, who was most affected by it, apparently never addressed her mind to until 5 months later. We do not think that that submission is doing justice to the employers.

We think it is quite clear that the reason it "never entered their minds" was because they were entirely happy with their staff. It is one thing being wise after the event to say - If only you had asked for volunteers, Mrs Bonney would have volunteered. It is quite another to say - You should approach the remaining 5 members of staff who on the face of it are contented, useful, specialised and well-trained people and say to them - well one job is redundant and there is difficulty over that: would any of you like to volunteer for redundancy? That would be an odd approach by employers to management staff; to ask whether one of them, with whom the employers were very happy, wanted redundancy. If somebody had volunteered, the employers would have endeavoured to persuade him or her not to volunteer. It is on the face of it a strange contention, but that is what the majority held. It is a holding which depends very heavily on being wise after the event and saying - Mrs Bonney would have volunteered. We suppose it also involves saying that she would have persisted in volunteering notwithstanding the management's very reasonable attempt to persuade her not to. If that is the just view of the employers' state of mind, namely that it was not a practical suggestion that they should approach the remaining 5 managers and ask them whether they wanted to volunteer for redundancy, we accept the submission made by Mr Bradley that the question which the Tribunal should have asked itself was this:- "Was that a state of mind which fell within the band of reasonable attitudes on the part of Management in May 1990? or was it something which went altogether outside what a reasonable employer might think?".

It is in a sense a narrow point but we have all come to the conclusion, after considerable discussion, that Mr Bradley's submissions are well-founded and that the majority of the Tribunal were wrong and the Chairman was right in this case. We think that on the true construction of this Re-deployment Agreement, that this was a matter for management to decide. In those circumstances, the Appeal must be allowed and the complaint of unfair dismissal must be dismissed.