James & Sons v Puglia [1992] UKEAT 96_90_1501

EAT
James & Sons v Puglia
[1992] UKEAT 96_90_1501 · 1992-01-15
MR JUSTICE WOOD (PRESIDENT): After some 29 years excellent service to farmers in the West Country Mr Puglia was dismissed with effect from the 23rd December 1988 on the grounds of redundancy.An Industrial Tribunal sitting at Haverfordwest on the 17th November 1989 under the Chairmanship of Mr Bird found by a majority, those being the Industrial Members, that he had been unfairly dismissed by a partnership of Mrs Claudia James, Mr Peter James and Mr John Michael James t/a C James & Son.There had been three Respondents, first Mr Peter James himself, as an individual; then second Respondents to whom I have already referred and the third Respondents which was a different partnership, namely Mr Peter James and his son Mr Philip James t/aPT and P F A James.The family were farming in Wales and the first partnership in time, as we understand it, Mrs James, Peter & Michael James, were farming seven farms, Fopstone, St Brides, Mabsgate, Highmead, giving a total of about 350 acres and Marloes Court, Winterton and Crabhall giving a total of 380 acres. For those 29 years Mr Puglia had worked on one or more of those farms. He originates from Italy and his sister was working in a hospital in Pembrokeshire when she saw an advertisement for a farm worker, that was in 1959. Mr Puglia came over to this Country and he was employed. There was some issue as to which partnership employed him but the Tribunal found that it was the second Respondents and there is no appeal on that issue.Until December 1977 Mr Puglia was principally working at Crabhall Farm, but in fact all employees were interchangeable between the seven farms. He had worked at other locations and indeed he had been out for some summer grazing elsewhere. In December 1977 there was a sadness in that a friend of his died and that friend had also been recruited from Italy; he had been working at Fopstone Farm. Mr Puglia was asked to go there as replacement and he readily did so. There were in essence two main groups of employed persons, one under the direction of Peter James and the other of Mrs James and Michael. The workforce did reduce over the years with innovations and mechanisations, and by September of 1988, when we come to the period relevant for dismissal the gang in which Mr Puglia worked consisted of three; Mr Puglia with 29 years service, Mr Howells of 22 years service and Mr Nigel Davies who was aged about 22 years, much younger. Mr Puglia and Mr Howells were both of about the same age, and if my sums are correct, at that time he would have been in his early fifties.There was no criticism about his work but there had been some slight difficulties over the years between Mr Puglia and Mr Peter James; these had been resolved and indeed in one case Mr Puglia had said that he needed a tractor to get him from one place to another; he was told he could not have it, but in fact it was soon recognised that he really needed it and so he was proved right on that occasion.By the time we reach the latter half of 1988 Mrs James, then aged 85, and her younger son, Michael, whose health was not good, wished to retire from farming and wished to withdraw their capital from the partnership. So in the September, with the agreement of all partners, they sold the four farms which we first mentioned at Fopstone; St Brides; Mabsgate and Highmead. It was intended that from the 1st January 1989 Mr Peter James was to farm the remaining units, Marloes Court; Winterton and Crabhall, but he intended to do that in partnership with his son Philip.The family took the advice of an agricultural expert, Mr McCracken, and explained what they wanted to do. The workforce would have to be reduced and Mr McCracken advised them to dismiss everybody at the same time. There would then be a new partnership and they were free to engage anyone they wished.On the 23rd September 1988 Mr Peter James gave notice terminating the employment of all those employed, including Mr John Howells and Mr Puglia and presumably also Mr Nigel Davies, all of them. The Tribunal describe what happened on that day in paragraph 9 they say this:
"The event was somewhat dramatic for Mr Puglia. At 5.30 pm he was in the garden of his tied cottage. He heard a jeep arrive. He saw it was his boss Mr Peter James who (unusually) was in a good mood and smiling. Mr James handed over his wage packet, without getting out of the jeep, and then left. Mr Puglia handed it to his wife who went into the kitchen. Shortly afterwards, his young son of eight came out crying `Daddy, daddy. Mummy wants you.' He went in to find that his wife was in tears, holding a scrap of paper. He was shocked to read that he was to be dismissed on the ground of redundancy as from the 23 December. Even more alarmingly he was required to vacate his tied cottage by Christmas Eve.
He took legal advice and did not vacate. On Boxing Day - or possibly a day or so later - Mr John Howells came by. He had come to do a job near Mr Puglia's cottage.... Mr Howells saw him and called out. He said that he was very pleased that he had been re-engaged by Mr Peter James. Thereafter Mr John Jenkins was hired for the lambing season. Mr Puglia saw him repairing fences and doing duties which any other worker could have done. He himself received no offer of alternative work. He did not make contact with Mr James although his wife attempted to speak to Mr James' mother Claudia."Those, basically are the facts behind this case.The Tribunal decided that the second Respondents were the employers, they decided that there was a genuine redundancy and they then came to deal with the question of Section 57(3). It was at that stage that the Tribunal split. The two Industrial Members felt that the dismissal was unfair whereas the learned Chairman felt that it was fair. He gave his Decision in four lines saying:
"I would maintain that the business closed down and all staff received redundancy. I also agree it was not done very diplomatically (giving the notice) but I cannot agree that he was `unfairly dismissed' because he was not employed by a completely new farm enterprise."
It does not seem, that there was any consideration by the learned Chairman of the question of consultation.That leads us to approach the reasoning of the "majority" with slight hesitation as to whether consultation was truly in the forefront of the minds of the Members of the Tribunal in reaching this decision. The "majority" in paragraph 14 approach the issue on whether there was continuity of employment, or continuity of employer. They set out, in particular, reference to Sections 84 and 94 and to paragraph 17(2) and 17(5) of Schedule 13 of the Employment Protection (Consolidation) Act 1978. We have looked at those, we have looked at the authorities and it is our view that the understanding of the law as set out in paragraph 14 is not entirely accurate and that on the facts it was not relevant to consider continuity of employment. But the "majority" do look at The Industrial Relations Code of Practice and in particular paragraph 46 of the Code of Practice which includes, amongst other things:
"If redundancy becomes necessary, management in consultation, as appropriate, with the employee or their representatives, should
. .................................................(iv) offer help to employees to find other work in co-operation, where appropriate, with the Department of Employment, and allow them reasonable time off for the purpose."The situation was this that the Tribunal, the majority, looked to see whether the selection as they understood it of Mr Howells over Mr Puglia had been properly considered. They decided that no proper consideration had been given to the two and in fact that Mr Puglia had longer service, was an excellent farm worker and could have done the work of the other man we mentioned, Mr John Jenkins. They also are critical that there was no attempt to enquire of the purchaser of the other four units about suitable employment for Mr Puglia. They say, in paragraph 16:
"The striking thing about this case is that no consideration at all was given to finding Mr Puglia alternative employment elsewhere ie on one of the four farms sold. Very little consideration was given to the choice between him and Mr Howells for retention at Marloes Court, Winterton and Crabhall."
They then set out part of the evidence which was given by Mr Peter James when he was cross examined by Counsel for Mr Puglia. I take the passage from the middle of paragraph 16 of the Decision:
"In that event Mr Taylor asked him why he had not shown him more consideration in dealing with his redundancy. He suggested that good employees were hard to come by. To that Mr James replied `are they? I have not had any difficulty.' He referred to the advice which Mr McCracken had given. He told us `Mr McCracken said that C James and Sons were packing up so they should make all employees redundant. He said it was up to me and my son whom we wanted to employ. We had agreed we could manage with one man and an occasional helper. We approached John Howells as he had been at Marloes Court most of the time. We thought he would be the most suitable.' Mr James had agreed with Mr Howells that he had not consulted anybody about the choice. He said `I did not consult with anyone. There would be no purpose because the business was closing down anyway and I do not discuss my business with any one.' In reply to Mr Taylor he said that also applied to an employee of 29 years' standing with an excellent record. He did not see the need. Mr Taylor asked him whether the circumstances of the service of the notice were not shabby treatment. Mr James said `yes, if you want to call it that.'"
That is the passage from the evidence cited by the Industrial Tribunal.In the next paragraph "the majority" seem to go on a slightly different tack. They say:
"It is common ground therefore that there was no consultation with Mr Puglia or any one else about the question of selection for redundancy or finding alternative employment."
They refer to paragraph 46. Later in paragraph 17 they refer to Polkey v. A E Dayton Services Ltd [1988] ICR 142 . The passage which is cited is part of a passage which we would cite at somewhat greater length. The learned Lord Chancellor, Lord Mackay of Clashfern at page 153 [we do not need to refer to the facts it was a redundancy case] says this:
"It is what the employer did that is to be judged, not what he might have done. On the other hand, in judging whether what the employer did was reasonable it is right to consider what a reasonable employer would have had in mind at the time he decided to dismiss as the consequence of not consulting or not warning.
If the employer could reasonably have concluded in the light of the circumstances known to him at the time of dismissal that consultation or warning would be utterly useless he might well act reasonably even if he did not observe the provisions of the code. Failure to observe the requirement of the code relating to consultation or warning will not necessarily render a dismissal unfair. Whether in any particular case it did so is a matter for the industrial tribunal to consider in the light of the circumstances known to the employer at the time he dismissed the employee."The other passage is from a speech Lord Bridge of Harwich at page 162 and 163, where he looks at the procedural matters and in particular he says this at B on page 163:
"It is quite a different matter if the tribunal is able to conclude that the employer himself, at the time of dismissal, acted reasonably in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with."
It is clear from those two passages that when considering whether the employer had reasonably taken the view in exceptional circumstances, that certain procedural steps normally appropriate would be futile, it is important (a) that he should have in fact considered it reasonably and approached it reasonably and looked at the matter. We would pose the problem in this way, the issue for the industrial tribunal would be whether the employer had properly thought about the issue and reasonably reached the conclusion that consultation would be utterly futile. Here, the possible consultation would have been as to employment on the farms already sold or indeed as to other employment locally, and as was pointed out by one of the Industrial Members sitting here today, it is quite often appropriate during discussions to suggest time off with pay to look for other work, more especially one might have thought after 29 years service on those farms. So that was the issue that the "majority" should have posed to themselves.They went on after citing Polkey to make further comments, in paragraph 18 they say:
"What were those circumstances? In our view they were that there would be a considerable reduction in the needs of the farms for work of the kind done by Mr Puglia. In effect they required one full-time employee where previously they had at least three ... plus whoever was employed in the other gang ... The most obvious candidates for retention were individuals who both had long service - Mr Puglia 29 years; Mr Howells 22. They were of similar age and experience. They were both excellent employees. Both were very keen to be retained. If there had been consultation and discussion we are not at all sure that anything material would have emerged. Moreover we think that that must have obvious to Mr Peter James and his partners. These were individuals who had lived and worked cheek by jowl for years, indeed decades. They mixed socially, at any rate on family occasions such as christenings etc.
On the other hand the selection appears to have been done in a remarkably casual way. It is not claimed that much thought, if any, was given to the needs of the business or the merits of the individuals concerned. They accepted `hook, line and sinker' the advice of Mr McCracken (which we think was mistaken) that they could dismiss everyone and then choose whom they desired. In other words they could indulge their caprice, if they wished. Our view is that the law requires that they make a fair and reasonable selection for the only job available. We do not think they gave the matter the attention it deserved. They knew from an early date that they would require one individual. It seems to us that they ought to have made the best and most careful selection they could, when they knew the decision was inevitable. Moreover they should have made enquiries to see whether the displaced individual could not be retained on one of the farms which were sold off. None of this was done because of a combination of bad advice, and apparent indifference to the welfare of employees of over 20 years' standing. On that account we conclude that the dismissal was unfair."We have every sympathy with the view taken by the "majority" but Mr Cavanagh in his able submission takes the only point which in our judgment he could possibly take and that was to argue that the approach of the "majority" had been through the thinking and reasoning of continuity of employment and whether in fact there had been transfer of the same business. Thus although Polkey is cited they nevertheless still seem to be working towards selection for the individual business.We can see arguments to the contrary, indeed, reading between the lines we would have been minded to reach the very clear and obvious decision that Mr Peter James had not put his mind to this at all and was giving, as he said "shabby" treatment. We would have said arrogant and unreasonable in the circumstances, but it is just open to argument that the findings of fact were not directed to the particular issue of Polkey and that they are not quite sufficient to condemn the action of Mr Peter James as it was clearly envisaged by the "majority".Mr Cavanagh has submitted there is just a tiny chink of light in that Mr Peter James might be able to explain why he behaved in that way; that is a possibility we cannot rule out.Therefore although we were minded to say that this was one of the clearest cases of unfair dismissal, we do not feel that in law, taking the approach which is appropriate in this Appeal Tribunal we can reach that decision today. It follows therefore that we indicate that the proper approach here is on the approach of Polkey . This matter is remitted to the same Tribunal for them to reconsider the facts. It will save time because they have heard a lot of the evidence. Directions may be given by the learned Chairman so that any other evidence can be called that is a matter entirely for the procedure of the learned Chairman or Regional Chairman as the case may be and on that basis therefore, this Appeal is allowed, the matter is remitted to the same Tribunal for it to consider the issue of whether dismissal was unfair bearing in mind desirability of consultation and indeed almost, to use the words of Lord McDonald Barratt Construction v. Dalrymple [1984] IRLR 385:
"In the present case the Tribunal appear to have gone much further. They say that it is the duty of an employer before dismissing an employee for redundancy to see whether alternative employment can be found for him as a general proposition this is correct."
We agree, consultation is very, very rarely to be set aside.Appeal allowed, remitted to the same Tribunal.