EEC Building Products Ltd v Botham [1993] UKEAT 260_93_1412

EAT
EEC Building Products Ltd v Botham
[1993] UKEAT 260_93_1412 · 1993-12-14
MR JUSTICE TUCKER : This is an employers' appeal from the decision of an Industrial Tribunal sitting at Nottingham on 24 February 1993, that the Respondent Paul Botham, was unfairly dismissed and awarding him compensation of £10,000. The grounds of the appeal are that the Tribunal misdirected itself in law or alternatively that they acted perversely in their decision as to the construction of the redundancy selection point scheme.The Respondent is now aged 41. He was employed by the Appellants as a shotblast operator. They are manufacturers of precast concrete products carrying on business near Ashbourne, Derbyshire. Unfortunately there was during 1992 a redundancy situation at the Appellants' factory. The Respondent's case before the Tribunal was that he had been unfairly selected for redundancy. The Tribunal agreed with this contention. They found, and set out in paragraph 9 of their decision, that the Appellants had acted unreasonably having regard to equity and the substantial merits of the case in treating the redundancy as the reason for dismissal. The Tribunal expressly refer to section 57 of the Employment Protection (Consolidation) Act 1978 and the words they use are taken from subsection (3) of that section. Yet the basis of the Tribunal's decision was that there had been an agreement reached between the employers and the Respondent's union but that the employers had interpreted that agreement in a manner which had never been indicated to the unions. If that was indeed the case, then it would have been more appropriate to have resorted to the provisions of section 59 of the Act which provides as follows:
"Where the reason or principal reason for the dismissal of an employee was that he was redundant, but it is shown that the circumstances constituting the redundancy applied equally to one or more other employees in the same undertaking who held positions similar to that held by him and who have not been dismissed by the employer, and either - (a) ... (b) that he was selected for dismissal in contravention of a customary arrangement or agreed procedure relating to redundancy and there were no special reasons justifying a departure from that arrangement or procedure in his case,

then, for the purposes of this Part, the dismissal shall be regarded as unfair."

This case concerned the criteria which the Appellants adopted in selecting candidates for redundancy. They had drawn up a scheme whereby points were awarded to each employee under five different headings. The only heading the Tribunal was concerned with was that entitled "Skill". Under this heading the points awarded depended upon the nature of the job performed. The level of points awarded were in multiples of 5 from 5 to 20. The Respondent's job earned him 5 points. This and the other headings are set out in a document in the Respondent's bundle at pages 2 and 3.According to that document each employee could in addition, be awarded 1 point to a maximum of 5 points for other skills from the list that were willingly provided on request over the last 12 months, referred to as "additional skill points". However a gloss was applied to that provision which is regrettably not set out in the document. Additional skill points were only applied to a job which was itself valued at over 5 points. Thus if there was an additional skill of, for example, a principal grinder which job carried 15 points, then 1 extra point would be allocated whereas if the additional skill was that of an operator grinder carrying only 5 points then no additional point would be added. This has been referred to as "the threshold principle".The Appellants complain that in reaching their decision the Industrial Tribunal made 2 fundamental errors which they categorise as perverse. First, the Tribunal appeared to have found and certainly to have proceeded upon the basis that there had been an agreement with the unions about the application of the points scheme. Second, that the Appellants departed from and breached that agreement by adopting the threshold principle without ever having informed the unions about it. The Appellants complain not only that these findings were unsupported by the evidence and were indeed contradicted by the evidence, but also that the Appellants were taken by surprise at the hearing and had no opportunity of dealing with these issues.In the hearing before us we have been greatly assisted by the advocates on either side who are men of ability and integrity. Thus Mr Jeans for the Appellants points out that in his Originating Application document IT.1 the Respondent had put his complaint in an entirely different way. He had made no allegation of an agreed procedure which the employers had breached. Mr Jeans submits that if that had been the case the Respondent's union would justifiably have been quick to point it out. Mr O'Hara for the Respondent concedes the Tribunal decided the case on a basis quite different from that contained in IT.1. Of course these documents do not have the rigidity and formality of pleadings in a civil action but at the same time it is important that parties should know in advance what the case is that they have to meet. Then when the matter was argued before the Tribunal, when evidence was adduced, the Appellants contend that it was still not made plain to them what the issues were and that the Tribunal made findings on facts without the Appellants having had any opportunity of addressing them.The Appellants apply before us for leave to put in a further bundle of documents which would have demonstrated that had they been given the opportunity of doing so they could have adduced evidence which would have contradicted and refuted the facts upon which the Tribunal relied. The Respondent objected to this course but we did not have to resolve the problem because Mr O'Hara very helpfully conceded that if these matters had been raised at the Industrial Tribunal, both parties would have agreed that there had been no agreement reached with the union about the application of the point scheme. Mr O'Hara went further and said that there had been positive failures to agree as a result of which the employers implemented their own scheme.It may be that the Tribunal allowed themselves to be misled by certain passages in the notes of what had occurred in an internal appeal conducted by the Appellants' Chairman or possibly they misinterpreted parts of the evidence given before them, notably by Mr Blurton the Appellants' personnel manager. However that may be, two things are clear to us. First, that there was no evidence before the Industrial Tribunal upon which they could have based any finding that there had been an agreement between the Appellants and the unions about the application of the points scheme. Second, that there was uncontradicted evidence from Mr Blurton that the unions, through their former works convenor Mr Neale, knew how the Appellants intended to interpret the additional skill points; that is that they would apply the threshold principle. This is of course a very different thing from saying that the unions agreed to it.Moreover, we take the view that the Appellants were not given the opportunity of dealing with these matters. They clearly should have been. The matter scarcely requires authority but we have been referred to the case of Murphy v Epsom College [1985] IRLR 80 and in particular to a passage in the judgment of Sir Denys Buckley in that case at 92G where he says:"Natural justice requires that a party should not have a case decided against him on a ground on which he has not had an opportunity to be heard".Thus we are driven to conclude that the Tribunal were wrong in several of the findings which they made and that these findings cannot be supported by the evidence.In paragraph 4 the Tribunal say:
"Unbeknown to the Unions, the respondents interpreted this to mean that only additional points would be awarded in respect of skills which attracted points in excess of five."
On the evidence before them that was not unbeknown to the unions. It had been conveyed to them by Mr Blurton. And at the foot of paragraph 4 the Tribunal found:
"It was clear that this interpretation that the employers used was never indicated to the Unions."
In our opinion that was a wrong finding to make. The Tribunal fell into error. There was no evidence of that. Indeed the evidence was to the reverse.In paragraph 7 the Tribunal found this:
"If there is an agreement it should be adhered to, and if there is any doubt parties to that agreement should resolve that doubt. There was clearly here no doubt at all about the simple meaning of the quotation above. The respondents chose to interpret it differently from how it reads. They cannot do this, whatever they have done in the past, without consultation."
In our opinion there never was an agreement and it was wrong for the Tribunal to say that it was done "without consultation". This passage ignores Mr Blurton's uncontradicted evidence that he had discussed the matter with Mr Neale.Once these errors have been corrected it is clear to us that the Tribunal's decision is fundamentally flawed and that it cannot stand. There was no material upon which a reasonable Tribunal could find properly directing itself that the dismissal was unfair. We quash that decision and substitute for it a finding that the dismissal was a fair one.In these circumstances it is unnecessary for us to consider the subsidiary questions whether in any event the Respondent would have accumulated sufficient points to save him from redundancy, or the question of compensation.Lest it be thought that we have ignored the contrary submissions made by Mr O'Hara, we make it plain that we have paid the closest attention to them. His case is that the Respondent's representative, Mr Dring, was not aware until he arrived at the Industrial Tribunal of the existence of an important document contained at page 4 of the Respondent's bundle which set out guidelines for the allowance of skill points and that Mr Dring did take the point before the Tribunal that there had been a major departure from the criteria. He did not take the point that agreement had been reached about the application of those criteria and he did not argue the case under section 59.Mr O'Hara submitted that the Tribunal's decision could be supported on the basis that without the knowledge of the union there had been this major departure and that the practice was departed from in such a way as to render the dismissal unfair but that submission ignores the evidence from Mr Blurton about his discussion with Mr Neale. The fact that Mr Neale may not have communicated that information to other union officials, for example Mr Millington, is irrelevant and it is not something for which the Appellants can be held responsible.Mr O'Hara says that even if the Tribunal did make a slip it was not such as to afford a ground for appeal but with that we disagree. We have considered Mr O'Hara's attractive oral submissions and also those contained in his written Skeleton Argument but we prefer the contrary submissions made by Mr Jeans with the result which we have already announced.