Howe v J M A Holdings Ltd [1992] UKEAT 429_91_1012

EAT
Howe v J M A Holdings Ltd
[1992] UKEAT 429_91_1012 · 1992-12-10

JUDGE J HICKS QC:

This is an appeal by the Applicant employee, Mr Jack Stuart Howe, against the decision of the Industrial Tribunal of 20 June 1991, dismissing his application to that Tribunal based on unfair dismissal by the Respondent employers JMA Holdings Ltd on 6 September 1990. Mr Howe was a senior account administrator with the employers who were primarily a recruitment advertising agency. He had worked for them full-time, or substantially so, as a self-employed person from 1985 to 1987, and since 1987 as a full-time employee.The Tribunal found the following facts as to the situation during the period immediately preceding Mr Howe's dismissal. In paragraphs 9, 11 and 12 they say:
"9 .......... Until about 1990 a very large part of the applicant's work was concerned with an account known as GCA who were themselves an advertising agency. They employed their own account Managers who brought in the work and used the respondents for the account administration.
11 In 1990 the recruitment business suffered a downturn. Although the figures were quite good until the middle of 1990 by August the recession hit the respondents as much as any other business in the south of England. They had to look to the cutting of costs. They are a small business with about 30 employees; a turnover in the region of £6,000,000 with four or five working Directors. In mid-1990 GCA merged with Kingcot who undertook their own recruitment advertising. This caused a reduction in work for the respondents from something like a million pound a year to a few thousand pounds a year. The respondents sought to increase their business engaging Andrea Burrows a specialist in brochures as an Accounts executive. The new work she brought gave the applicant some diversification as the GCA account diminished. According to the applicant's evidence he worked on administration for four brochures during 1990. He did not allow himself to grow idle.12 During 1990 Mr West [the Managing Director] discussed the position with the applicant who did not expect that his job to be vulnerable in the light of his long standing friendship with the Managing Director. But he must have been aware that the situation would affect everyone. At the beginning of August 1990 decisions were taken to dismiss a number of employees. Between August and October 1990 some five or six were dismissed and several more at the beginning of 1991."The appellant has made some criticisms of detail in relation to those findings but there was ample evidence upon which the Industrial Tribunal could reach them except - as Mr Bloch, for the respondents - concedes as to the exact figures where they say that the reduction in work from GCA was from something like a million pounds to something like a few thousand pounds a year. Apart from that it is not, in our view, open to us to disregard those findings or to set them aside. We regard the possible error in those precise figures to be of no significance. It is quite apparent that the Tribunal found, and were entitled to find on the evidence, that there was a very substantial reduction in the work from GCA, even if those figures were not ones that directly appeared from the evidence.In that situation the employers, according to the Industrial Tribunal's findings, reached certain decisions described in paragraph 13 of the Tribunal's Reasons as follows:
"So far as the applicant was concerned the respondents directors were concerned that because the applicant was 57 that there was a very good chance that he would not be able to find other employment. He was earning a salary of £27500 a year. With the car, BUPA and National Insurance he was costing the respondents in the region of £35,000 a year. He was not bringing in work although he was performing a valuable function. It was decided at a board meeting to dismiss the applicant as redundant. Then respondents had second thoughts and it was decided that rather than dismissal he should be given the opportunity of remaining with the respondents and be offered a job that entailed similar work to what he was doing but with less responsibility; BUPA a salary of £20,000 per annum and no motor car. That that would tide him over throughout a recession or until he got another job."
Again, we are satisfied that there was evidence on which the Tribunal were entitled to make those findings, in particular that of Mr West (at pages 38 & 39 of the bundle) and the note of relevant Board decision meetings (at page 82). There was then a crucial period beginning with a meeting of 31 August 1990 between Mr Howe and Mr West and culminating in Mr Howe's dismissal by letter dated 6 September 1990. It is to the Industrial Tribunal's findings in relation to that period that Mr Howe's criticisms were chiefly directed. Those findings were as follows:
"14 On 31 August 1990 Mr West spoke to the applicant. The Tribunal are satisfied that Mr West was anxious that the applicant should have every opportunity to consider his position. The Tribunal preferred the account of Mr West of this meeting to that of the applicant. The applicant was in several respects inconsistent and indeed in some respects scarcely credible as to what happened at that meeting."
I interrupt my recital of the Reasons to comment that in our view that was plainly a comment by the Tribunal on the credibility of witnesses, a matter peculiarly within their jurisdiction, one with which we have no right to interfere. I continue:
"Mr West referred to the downturn in business and said that because there was no longer the GCA account which both of them knew had been the bulk of the applicant's responsibility the respondents could not afford to retain someone who no longer had any specific responsibility. The offer was made of the alternative to termination. The respondents had prepared a letter for the applicant Mr West did not initially give it to him. They first discussed the options available to the applicant. The applicant principal residence was in Eastbourne. While he worked for the respondents he had been staying with relatives one or two nights during the week in London and going home at the weekend. The question of his dismissal was discussed in the light of the sort of life he would have if he did not accept the lesser job and whether it would be better for him to seek to discover if there was work in Eastbourne. The applicant was told that if he did not accept the lesser job he would be made redundant and that he should consider the position and talk about it over the weekend with his wife. He was told that he could have as long as he liked to consider the matter. No dates were mentioned by either side. The applicant was given the letter which appears in the bundle and is dated 31 August. That letter set out the reduction in salary; the fact that he would no longer have a company car; and that the matter was not to be discussed with any other member of staff. The Tribunal are satisfied that the reason that requirement was included was because the respondents were making an exception in retaining him in the circumstances. The penultimate paragraph reads:
"The reason for this alteration to your terms and conditions the unforeseen downturn in our business from which we can see no easy recovery."
15 The Tribunal did not accept the applicant's [contention] that he had no idea that this meant redundancy, quite to the contrary the situation was put to him clearly. He was not given an ultimatum. On the following Monday the applicant told Mr West that he still had not made up his mind as to what he was going to do. He was again told he could think it over as long as he liked. It is quite clear from a statement which he read to the Tribunal that the applicant had made up his mind over the weekend that under no circumstances would he take the lesser job but that he was waiting to see what would happen next.16 Mr West spoke to the application again on Wednesday 5 September. The applicant told Mr West that he had decided to be made redundant. Mr West was surprised; he tried to talk the applicant out of it. But the applicant had decided that he wanted to leave that day. Mr West had no paper work ready. It was agreed that this would be dealt with on the following day. Mr West did not see the applicant. On the following day the applicant saw another Director a Mr Spilman who arranged that the applicant should be given a dismissal letter and a cheque for £7,600 which comprised his pay to date, outstanding holiday pay, 13 weeks pay in lieu of notice and a tax refund. The letter made it clear that his services were being terminated because of redundancy and with immediate effect. The applicant left and was not replaced."The last sentence is an important fact not in dispute, and clearly the Tribunal were entitled to take that into account in considering whether the dismissal was of redundancy and that the employers acted reasonably in treating that as sufficient reason.On the basis of those findings, the Tribunal reached the following conclusions:
"17 The first matter the Tribunal have to consider is the reason for the dismissal. The Tribunal are satisfied that here the work that the applicant had been doing had diminished and was likely to diminish further. He was dismissed on the grounds of redundancy.
18 The next matter that the Tribunal have to consider is whether having regard to their size and administrative resources the respondents acted reasonably or unreasonably in treating this as a sufficient reason for the dismissal and the Tribunal have to consider that in the light of equity and the substantial merits."The remainder of that paragraph canvasses the considerations in regard to that question and concludes:
".......... The respondents acted reasonably. The application must be dismissed."
It is quite clear, in our view, that in paragraphs 17 and 18 the Industrial Tribunal correctly directed itself as to the law and Mr Howe does not contend otherwise. His principal ground of appeal is expressed in his notice of appeal as follows:
"The decision of the tribunal is perverse as no reasonable court should have reached that decision based on the written evidence and facts put before them as opposed to verbal"
That is then amplified by the next two paragraphs:
"The tribunal misunderstood the facts by failing to take into account particular relevant written evidence

The tribunal misapplied the facts by considering irrelevant verbal evidence."

As seems to us plain, and I think Mr Howe conceded, it is impossible to say that Mr West's evidence, which was the principal oral evidence, was irrelevant. His real submission is that it was outweighed by the documents and that the Tribunal should have found that to be so.Those grounds are then in his notice of appeal particularised in ways which may fairly be summarised as follows. First, the pre-eminence of the letter of 31 August as showing what the respondents were really doing in relation to the job, that is to say offering him the same job on different terms, namely reduced remuneration. Secondly, that the correspondence between solicitors, and in particular the failure of the respondents' solicitors to put the case now advanced, was a matter which should have led the Tribunal to the opposite conclusion to that which they reached. Thirdly, that the letters of the 31 August and dismissal letter of 6 September show that there was no warning, consultation or fair procedure and no payment of redundancy money. Fourthly, that the Tribunal was wrong to accept Mr West's evidence of the meeting of 31 August, contrary not only to those documents but, Mr Howe contends, to the Notice of Appearance, in particular on the question of how long was given for his response and at whose insistence time was allowed. Finally, that the Tribunal in their reasons do not include or do justice to his evidence.The letter of 31 August reads in full as follows:

"Dear Jack

Further to our discussion of today I am writing to confirm the terms under which your employment will continue with this Company:-1)Your basic salary is reduced with effect from the 1st September from £27500 to £20000 (Twenty thousand pounds)2)You will no longer be entitled to a company owned car. I understand that your car was stolen on 20th July 1990 and we propose not to make a replacement.The terms under which we offer the above, is that under no circumstances is this matter discussed with any other member of staff either current or past, and that you do not accept any lesser responsibility of workload than would be expected of you at the present time.The reasons for this alteration to your terms and conditions is the unforseen downturn in our business, from which we can see no early recovery.Please sign the enclosed copy of this letter and return it to me, as your acceptance of the above.

Yours sincerely"

As appears from the Industrial Tribunal's findings, and as Mr Howe accepts, that letter was pre-prepared and not handed to him until a fairly late stage of the meeting of 31 August. It purported to be confirmation of the meeting and therefore depended upon whether the course of the meeting had in fact followed its terms. It is clear that on its face it reads for the most part as an offer of the same job for reduced consideration although it also referred, as the Tribunal noted, to the reasons for the alterations as being the unforeseen downturn in the business and the absence of any prospects of recovery.It seems possible to us that the difference between that and the offer of a new and different post might, in truth, have been immaterial, given the finding of the Industrial Tribunal, on what was in our view ample evidence, that the Applicant's job had in substance disappeared or was in the course of disappearing, and that the employers' offer was an attempt to help him and "tide him over" rather than one which reflected the needs of their business. Nevertheless that issue, the terms of the new offer, was an issue that was fought, and the Industrial Tribunal decided in favour of the employers, preferring Mr West's evidence to that of the Applicant.The Applicant, Mr Howe, says that the Tribunal ignored the letter but, in our view, there is no basis whatsoever on which we could find that they did so. They referred to it at an early stage of their Reasons at paragraph 3 and again at several points in paragraph 14.Secondly, he says that it was perverse of them to accept Mr West's evidence in the face of the contents of that letter; that is to say, that no reasonable Tribunal could have done so. We disagree; it is for the Tribunal who saw and heard the witnesses to decide the primary facts and is not a question of law, which alone founds our jurisdiction, whether they have reached a correct conclusion in doing so. In our view, that is equally true whether they are deciding between competing oral witnesses or balancing the effect of oral evidence against or in conjunction with that of contemporaneous documents.In the case of Martin v Glynwed Distribution Ltd [1983] ICR 511 the employee resigned, that is to say that he wrote a letter of resignation, in circumstances where he was under the prospect of a disciplinary enquiry into an incident in which he had damaged the employers' minibus by driving into three stationary cars. The Industrial Tribunal found that he had voluntarily terminated his employment and not been dismissed by the employers either actually or constructively. On appeal the Employment Appeal Tribunal, by a majority, held that the Industrial Tribunal had erred in law in finding that the employee had not been dismissed. On further appeal to the Court of Appeal, the Court of Appeal reversed the decision of the Employment Appeal Tribunal and restored that of the Industrial Tribunal and the relevant passages that state the principle involved are at page 519E, where Sir John Donaldson MR said:
"The industrial tribunal had to make up its mind whether, on the evidence, the reality of the situation was that the employers terminated the employee's employment or that the employee did. Plainly the fact that the employee signed a letter of resignation is a factor and an important factor in reaching a conclusion on this issue, but it cannot be conclusive."
Than at page 520C, referring to the submissions in support of the decision of the Employment Appeal Tribunal and against the finding of the Industrial Tribunal, Sir John Donaldson MR said:
"This submission amounts to an attempt to review a finding of fact under the guise of a question of law. These questions and others may well be considered by an industrial tribunal in reaching its conclusions of fact, but that is a matter for it. In formulating the reasons for its decision, it is under no obligation to give such an explanation of its conclusions of fact as would be appropriate if there was a right of appeal on fact. In practice industrial tribunals rightly deal in their reasons with the main submissions as to fact which have been made to them, but this does not mean that other matters may not have been considered. Whether or not the industrial tribunal explains its conclusions of fact fully, those conclusions are not open to review by the appeal tribunal or by this court if they are conclusions which a reasonable tribunal might have reached on the evidence."
Dillon LJ agreed and Sir Denys Buckley in also agreeing said:
".......... the finding of the industrial tribunal ............ was a pure finding of fact. It was not a decision on a point of law or on a point of mixed fact and law. It was a finding upon the question whether on the primary facts the employee in choosing to resign was in fact exercising his own right to choose whether to resign or to submit to an inquiry, or whether he was induced to resign by the conduct of Mr Daly. The appeal tribunal could only interfere with such a finding if,in the opinion of the appeal tribunal, it was a conclusion to which no reasonable tribunal could have come. Upon the facts of this case the appeal tribunal could not, in my opinion, properly take that view."
In our view, it cannot be said in the present case that the conclusion of the industrial tribunal was one to which no reasonable tribunal could have come.Mr Howe referred to other parts of the documents as well as the letter of 31 August 1990, although that was the main plank of his submissions but, in our view, the same considerations apply to those other documents and indeed to the whole matter of the way in which the Industrial Tribunal considered the evidence and came to its findings of fact. That disposes of the principal grounds of the appeal.In the Notice of Appeal, there were additional grounds which can be summarised as follows. First, there was an allegation of bias on the part of the Chairman of the Industrial Tribunal but Mr Howe explained to us that his making of that allegation was, on reflection, a misunderstanding as to the nature of such an allegation, and certainly he did not wish to do it before us. With that, to some extent, goes an allegation in the notice of appeal that there was unfairness, because although he had served his documents on the Respondents in advance he was given theirs only at the Tribunal and was only offered some five minutes to look at those documents. Again, he does not now suggest to us that that is a substantial ground on which the decision of the Tribunal can be upset.He also criticises the Tribunal's reasons for failing to record his successful challenge, he says, to the Respondents' lists of redundancies but that point, which I do not think he seriously pursued, is clearly amply covered by the passages which I have read from the case of Martin v Glynwed Distribution , as to the extent to which the Tribunal is obliged to set out any sort of full survey of the evidence or reasons for its findings of fact.He also, but this is probably covered under his main submission, says that the Tribunal failed to consider the consistency between the image of a model employer put forward by the Respondents and what he regards as the aggressive and insulting tone of the letter of 31 August. In so far as that is still pursued, it seems to us that the Tribunal clearly had the terms of the letter very much in mind in reaching the findings of fact which they made.That, therefore, deals with the grounds of appeal and submissions put forward by Mr Howe and we have reached the conclusion that on none of those grounds can an appeal against the decision of the Tribunal be sustained. We are therefore unanimously of the view that we ought to dismiss this appeal, as we therefore do.