Ferodo Caernarfon Ltd v Jones & Ors [1993] UKEAT 119_92_2011

EAT
Ferodo Caernarfon Ltd v Jones & Ors
[1993] UKEAT 119_92_2011 · 1993-11-20
HIS HONOUR JUDGE BULL QC This is an appeal by Ferodo Caernarfon Ltd against the decision of the Industrial Tribunal sitting at Abergele on 12th and 13th November 1991. Full Reasons for its decision were sent to the parties on 2nd January 1992.Sixteen applicants who were members of the Transport and General Workers' Union, were, on 28th March 1991 dismissed at the employer's factory at Caernarfon, upon the grounds of redundancy. Three recognised unions at that factory all had different arrangements for redundancy, but only the Transport and General Workers' Union had agreed a written procedure. In that agreed written procedure, was the following provision:
"In selecting employees for redundancy, dismissal will be on the basis of shortest length of continuous employment with the company, all things being equal."
There was much argument before the Industrial Tribunal, and indeed before us upon the meaning of that final phrase "all things being equal". The Industrial Tribunal were divided in their approach and express their findings in this way:
"10. One view of "all things being equal" is that it is too uncertain to be given an effective meaning. Such phrases are tossed into drafts sometimes - it may be, with an eye to making of them what it may be convenient in the future, or merely as a result of copying them, accurately or inaccurately, from an earlier agreement which seems to have worked. Whatever the history, we have to construe the phrase as it stands. My colleagues can give no sufficiently certain meaning to the phrase and therefore regard it as ineffective. My construction would lead to the same result, namely that to give it an effective meaning and to save it from the charge of being a mere draughtsman's trap, it should be narrowed to cover the same ground as s.59(b) itself does by the words "unless there are special reasons justifying a departure from the agreed procedure."
We have had the advantage of clear argument based upon a thorough research from both Mr Rigby, who appeared for the Appellant, and Mr McMullen who appeared for the Respondent employees. But neither of them appeared before the Industrial Tribunal, and had they done so, that Tribunal would have had the advantage of the citation of Camper & Nicholson Ltd v. Shaw [1978] ICR 520, where this Tribunal had to consider the interpretation of the phrase "last in, first out, all other things being equal". At p.523D, Arnold LJ giving judgment in that case said:
"Having held as we have held, that the proper interpretation of the words "all other things being equal" means equal in the eyes of a fair and reasonable employer applying proper industrial considerations, and not objectively in the eye of a tribunal ..."
Had the Industrial Tribunal had that authority brought to its attention, we have no doubt that it would have followed the reasoning of Arnold LJ. In our judgment there is plainly force in the criticisms made by Mr Rigby of the interpretation given both by the majority, and by the Chairman of the Industrial Tribunal of the phrase "all things being equal" in the absence of that guidance.The second issue raised on this appeal by Mr Rigby on behalf of the employers is whether the majority of the Industrial Tribunal erred in law in the way in which it reached its finding that "There were no special reasons justifying a departure from that procedure" within the meaning of S.59(b) of the Employment Protection (Consolidation) Act 1978. In support of this second issue arising on this appeal Mr Rigby makes detailed criticisms of paragraphs 15 to 18 inclusive which are the relevant passages in the Decision of the Industrial Tribunal.In our judgment, these two issues, raised on behalf of the employers by Mr Rigby, fall to be considered after a consideration of the Industrial Tribunal's conclusion which it sets out in paragraph 19 of its Reasons:
"19. We are all agreed that on one ground in addition to that already mentioned the dismissals fell short of reasonableness under S.57(3). The criteria in themselves were perfectly reasonable, and commonplace in many regions, but there was no individual consultation worth speaking of. The men affected, and the one woman affected, were handed their letters of dismissal a day or so before the works shut down for Easter and were invited not to return. That would be permissible if there were no possibility of consultation making a difference to the result. It would still not be desirable, because it is not a satisfactory way of treating employees; but in this case even that cannot be said, because one case actually did result in a reversal of the decision. One man contended that his absence should have been excluded as being in consequence of a works accident. It had not been notified and the question was whether it was notifiable, and in the end the respondents withdrew their notice. There was no telling that similar points could not have been taken in any other individual case, and although there is no question of alternative employment and although before us no point is raised of that nature in the applications - or at the opening of the hearing, when Mr O'Leary was invited to tell us if there were any before we released the applicants from attending further - nevertheless, while there may be no compensation attributable to it, it would be technically enough to make the dismissals unfair. As we followed the evidence, individuals were not told their individual scores. Those were given to the union representative, who could of course pass them on to the individuals; but it does mean that the individual employee receiving his notice did not know exactly how he stood and had very little time left to take effective action. It was also not found possible to convey the total table of results (including those not leading to redundancy) to the unions, consistently with preserving the confidentiality of other employees. That should have been thought of and could have been got over in the course of the weeks during which the assessments were carried out. This is another criticism of the respondents' conduct of this operation."
The decision upon S.57(3) of the 1978 Act, is quite independent of the matters argued by Mr Rigby on behalf of the employers, and we note that in the grounds of the notice of appeal (a) to (f) inclusive there is no appeal against the findings of the Industrial Tribunal contained in paragraph 19 of their Reasons. It is plain that whatever view is taken of the contentions raised by the Appellants if these dismissals were within S.57 as being unfair, then the applications for relief should succeed. Thus the convenient way of dealing with the issues raised in this case is to consider first the decision of the Industrial Tribunal as set out in paragraph 19. Our approach to this is guided by the well-known passage from the speech of Lord Bridge of Harwich in Polkey v. A E Dayton Services Ltd [1988] ICR 142 at 162H:
"... in the case of redundancy, the employer will normally not act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation. If an employer has failed to take the appropriate procedural steps in any particular case, the one question the industrial tribunal is not permitted to ask in applying the test of reasonableness posed by section 57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On true construction of section 57(3) this question is simply irrelevant. 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. In such a case the test of reasonableness under section 57(3) may be satisfied."
The facts found by the Industrial Tribunal demonstrate that in the one case where consultation did take place the employers reversed their decision in consequence:
"...One man contended that his absence should have been excluded as being in consequence of a works accident. It had not been notified and the question was whether it was notifiable, and in the end the respondents withdrew their notice. ..."
There is in that example clear justification for the view of the Industrial Tribunal that "there was no telling that similar points could not have been taken in any other individual case".In addition, the Industrial Tribunal found that letters of dismissal were handed to those concerned but a day or so before the works shut down for the Easter holiday and those affected were invited not to return after that holiday. No individual had access to the individual score allotted to him and thus his ability to challenge the basis upon which he was selected for redundancy was drastically curtailed. The Industrial Tribunal found that this was a matter which could have been overcome.In these circumstances, we are driven to the conclusion upon the facts found by the Industrial Tribunal that the employers failed to adopt a fair basis on which to select for redundancy, and that this failure was a substantive but not merely a procedural defect.Although we agree in substance with the criticisms made by Mr Rigby in relation to the construction which the Industrial Tribunal placed upon the phrase "all things being equal" and for our own part would, without hesitation, have followed the reasoning of Arnold LJ in Camper v. Nicholson , and might have considered allowing this appeal and remitting it to the same Industrial Tribunal for further consideration in the light of the judgment of Arnold LJ, that is a matter which does not arise for determination by the EAT in the light of our findings that in the light of the finding of unfairness under S.57(3) by the Industrial Tribunal, to which there is no challenge, the employers cannot succeed.For these reasons we dismiss this appeal.We decline to grant leave to appeal in this case.