Britool Ltd v Roberts & Ors [1993] UKEAT 394_92_0104

EAT
Britool Ltd v Roberts & Ors
[1993] UKEAT 394_92_0104 · 1993-04-01
HIS HONOUR JUDGE PEPPITT QC This is an appeal from a reserved decision of the Birmingham Industrial Tribunal sent to the parties on 7th May 1992 after a hearing extending over five days. The Tribunal held unanimously that all three Applicants (now the Respondents) had been unfairly dismissed by virtue of S.57(3) of the Employment Protection (Consolidation) Act 1978 and that in the case of the first and second Respondents (Mr Roberts and Mr Jackson) their dismissal was also unfair under S.59(a) of the Act. The Tribunal further held that insofar as the dismissals were unfair under S.57(3) of the Act no reduction should be made in the compensation to be awarded to the Respondents to reflect the chance that they might in any event have been dismissed for redundancy even if the Appellants had acted fairly towards them.There is no appeal from the Tribunal's finding that the Respondents were unfairly dismissed under S.57(3) of the Act. But Miss Elizabeth Slade QC on behalf of the Appellants challenges:(i)the finding of unfair dismissal under S.59(a) of the Act in respect of Messrs Roberts and Mr Jackson.(ii)In the case of Mr Patel the finding that no reduction should be made in his compensatory award to reflect the chance that he would have been dismissed for redundancy in any event.The Appellants are a subsidiary of Facon SA a French company based in Strasbourg. They manufacture hand tools for industrial purposes. In November 1990 there was a strike at their Cannock factory. The Trade Union involved was the Manufacturing Science Finance (MSF). Mr Roberts was the works convenor and Mr Jackson his deputy. Both were involved in the strike.In the course of the strike the Appellants sent letters of dismissal to the work-force accompanied by an offer of re-employment on new terms. The new terms included the withdrawal of recognition of the MSF. Instead of the Union a working party was to be set up to negotiate on the employees' behalf and deal with their grievances. Most of the Appellants' employees, including the Respondents returned to work on the new terms.In 1991 the Appellants were in severe difficulties as a result of declining orders and under-production. They decided to re-organise their working practices in order to achieve greater productivity at lower cost. The re-organisation included a reduction in manning levels. The Tribunal found that the Appellants genuinely believed that their need for employees was reduced and that a redundancy situation existed. But the Tribunal also found that the matrix adopted by the Appellants for selecting those employees who were to be made redundant was based on flawed criteria and was arrived at without proper consultation. Hence the finding of unfair dismissal under S.57(3) of the Act.Both Mr Roberts and Mr Jackson were selected for redundancy. The Tribunal found in paragraph 73 of the decision that the principal reasons for their selection were that they were both important and influential trade union members and that they had taken part in trade union activities as defined in S.58(1)(b) of the Act. On these findings the Tribunal held that the requirements of both S.58(1)(a) and S.58(1)(b) of the Act were satisfied. The relevant parts of S.58(1) read as follows:
"... the dismissal of an employee by an employer shall be regarded for the purposes of this Part as having been unfair if the reason for it (or, if more than one, the principal reason) was that the employee - (a)was, or proposed to become, a member of an independent trade union, or (b)had taken part, or proposed to take part, in the activities of an independent trade union at an appropriate time.

..."

The phrase `an appropriate time' is defined in subsection (2) of section 58 in the following terms:"...'an appropriate time", in relation to an employee taking part in the activities of a trade union, means a time which either - (a)is outside his working hours, or (b)is a time within his working hours at which in accordance with arrangements agreed with or consent given by his employer, it is permissible for him to take part in those activities;and in this subsection 'working hours', in relation to an employee, means any time when, in accordance with his contract of employment, he is required to be at work."The critical findings upon which the Tribunal's conclusion were based were those set out in paragraphs 69-72 of the decision:
"69 In this case we have had the opportunity of seeing Mr Roberts, Mr Jackson and Mr Cragg and the foreman and to weigh their evidence. It is trite to say that in this task we rely not just on what is said but the way in which the evidence is given and the impression which is given.
70 To that task the industrial members bring the experience of the realities of industrial life. It is their unequivocal view that the management notwithstanding the denials did show animosity to both Roberts and Jackson and that this reflected itself in the scores which Jackson and Roberts received in the matrix for skill, flexibility and performance.71 We do not go so far as to say that the matrix was specifically constructed to exclude Roberts and Jackson. However on the evidence we have heard the trade union involvement of the applicants in leading the strike had caused animosity towards them and we are satisfied that this showed in the way in which they were evaluated in the matrix.72 We accept that both Roberts and Jackson had been told they could not collect for colleagues who were still out on strike and they accepted this.

(b) "

Miss Slade attacks these findings on a number of grounds and challenges their validity as a basis for the Tribunal's conclusion. She says firstly that the Tribunal erred in law by holding that Mr Roberts and Mr Jackson took part in the activities of an independent trade union within the meaning of S.58(1)(b) of the Act by `leading the strike' as was found in paragraph 71 of the decision. In support of this submission she relies upon Drew v. St Edmundsbury Borough Council [1980] ICR 513, a decision of the Employment Appeal Tribunal [see per Slynn J at pp515-518B] and upon the self evident proposition that taking part in a strike could not of its nature be an activity undertaken outside working hours or with the consent of the employer.Secondly, says Miss Slade, insofar as the Tribunal found in paragraph 72 of the decision that the animosity showed to Mr Roberts and Mr Jackson by the Appellants arose from their activities which led up to the strike (as opposed to 'leading the strike') that finding was inconsistent with paragraph 71.Thirdly, Miss Slade submitted that the decision was flawed because the Tribunal did not specify the activities in which Mr Roberts and Mr Jackson were engaged; it thus lacked the factual determination which would have enabled the Appellants to see precisely how the case against them was found proved [see Meek v. City of Birmingham District Council [1978] IRLR 250 . The burden of establishing unfairness under S.59(a) of the Act rested upon the Respondents as applicants before the Tribunal; they should have established, so as to enable the Tribunal to find precisely what trade union activities Mr Roberts and Mr Jackson undertook, whether those activities were undertaken within working hours and whether they were undertaken with the consent of the Appellants.Against this background Miss Slade submitted that no reasonable Tribunal properly directing itself could have found that Mr Roberts and Mr Jackson were dismissed for trade union activities which led up to the strike.Finally, Miss Slade submitted that although in paragraph 73 of the decision the Tribunal based its conclusion on both S.58(1)(a) and S.58(1)(b) a proper reading of the decision made it clear that the principal reason found by the Tribunal for the selection of Mr Roberts and Mr Jackson for dismissal was that set out in S.58(1)(b).As to the first and second of Miss Slade's submissions we accept that for the reasons which she gives actual participation in a strike whether as leader or otherwise will rarely if ever constitute an activity within S.58(1)(b); but we do not interpret the phrase `leading the strike' as restrictively as she invites us to do nor do we find any necessary inconsistency between that phrase and the phrase `activities which led up to the strike' in paragraph 73. A strike does not or in the ordinary course arise spontaneously. Its leaders will have consulted the work-force and the decision to strike will have been taken before any stoppage of work. There are no doubt other decisions which have to be taken and other plans formulated before the men are called out. In our judgment those who are responsible for these preliminary activities can properly be described as `leading the strike'. Indeed it seems to us that the single action of a strike leader most calculated to incur the animosity of the employer is calling the men out. By the time the strike is in operation the damage, in the employers' eyes, will for the most part have been done.It seems to us therefore that there is no inconsistency between paragraphs 71 and 72 of the decision, the latter paragraph merely identifying the particular activities of Mr Roberts and Mr Jackson in connection with the leadership of the strike which gave rise to the Appellants' animosity. The phrase `leading the strike' no doubt does embrace the activities of the strike leaders whilst the strike is in operation but it does not exclude the preliminary planning and consultation stage. It is this which we consider the Tribunal had in mind.Miss Slade's third submission is founded upon the absence of any findings by the Tribunal of specific pre- or post-strike activities by Mr Roberts and Mr Jackson. In our judgment to require such a degree of particularity in the circumstances of this case is to impose upon the Industrial Tribunal a burden which it was never intended to shoulder. We accept that where a dismissal is alleged to be unfair under S.58(1) the burden of establishing that the reason or principal reason for the dismissal fell within that subsection lies upon the employee. But the Tribunal was satisfied on the evidence called before it that Mr Roberts and Mr Jackson were important and influential trade union members engaged in activities which led up to the strike. Moreover, Mr Roberts gave evidence which the Tribunal accepted of the negotiations between the union and the Appellants before the strike in November 1990 in the following terms:"Since 1975 I have been heavily involved in trade union activities and in negotiations between the recognised Trade Unions and the Company" [77]And of the events which led directly to the 1990 strike:"Negotiations broke down. The Union took the view that the company had clearly breached the redundancy agreement both in proceeding with compulsory redundancies when it was not necessary to do so and in relation to the procedure for selection for redundancy. As a result industrial action commenced in November 1990" [79]It is settled law that the phrase `the activities of a trade union is not to be read restrictively [see, for example, British Airways v. Francis [1981] ICR 278 at p.282C]. The fact that in this case the relevant activities were specified only in general terms and the absence of any specific finding that those activities were undertaken outside working hours or with the consent of the Appellants does not seem to us to undermine the decision. There was evidence before the Tribunal of the nature of those activities from Mr Roberts and it seems to us that a proper inference can be drawn from his evidence that the negotiations which were conducted with the Appellants were with their consent. In any event the latter point does not seem to have been argued before the Tribunal. For all these reasons we reject Miss Slade's third submission.We can deal shortly with the submission that the finding of the Tribunal as it applied to Mr Roberts and Mr Jackson was perverse. We do not consider it necessary to deal in any detail with the evidence save to say that in our judgement there was abundant material before the Tribunal which justified both its findings of fact and its conclusions. We are very far from saying that the decision as it applied to Mr Roberts and Mr Jackson was one which no reasonable Tribunal properly directed could have reached.In the circumstances it is strictly unnecessary for us to deal with Miss Slade's final submission concerning the Tribunal's holding in paragraph 73 of the decision that Mr Roberts and Mr Jackson were selected for redundancy not only on account of their activities under S.58(1)(b) but also because they were members of an independent trade union as defined by S.58(1)(a). We would have been sympathetic to a submission that if necessary the Tribunal's decision could be justified on this alternative basis, but since we did not hear Mr Bowers on the point we would prefer not to rest our judgment on this ground.For all these reasons the appeal concerning Mr Roberts and Mr Jackson must be dismissed.We turn now to the grounds of appeal concerning Mr Patel who was amongst those selected for redundancy. The finding the subject of this appeal is contained in paragraph 54 of the decision which reads as follows:
"We are aware that where the reason for a tribunal finding a dismissal is unfair by reason of lack of consultation then it is always open to a tribunal to reduce the compensation that the successful applicant should receive to reflect the possibility that if there had been adequate consultation there was still a possibility that a fair minded employer might still have dismissed and such a dismissal would have been fair. Although the absence of consultation is a part of a decision there were other ways in which this dismissal was flawed and we see no basis for making any such deduction on the facts of this particular case."
Miss Slade argued that the only other way in which the Tribunal found Mr Patel's dismissal to have been flawed was the adoption by the Appellants of an unfair basis for redundancy. Such a flaw was itself a procedural step [see, for example, Polkey v. A E Dayton Services Ltd [1988] ICR 142 ] and thus fell to be considered by the Tribunal in its assessment of Mr Patel's compensation. If the Tribunal did take into account the Appellants' flawed selection procedure in support of its finding that no reduction should be made in Mr Patel's compensation:(i)it did not say so specifically and gave no reasons for its finding [ie Meek v. City of Birmingham District Council (supra)](ii)no reasonable tribunal properly directing itself could have found on the evidence called before it that no reduction should be made in Mr Patel's compensation to reflect the change of a fair dismissal. [ Pigott Bros & Co Ltd v. Jackson [1992] ICR 85].It is true, as Miss Slade submitted, that there is no express reference in paragraph 54 of the decision to the Appellants' unfair selection procedure as another `way in which the dismissal was flawed', but this can only have been what the Tribunal had in mind because it was the only respect, apart from the lack of consultation, in which Mr Patel's dismissal was found to have been unfair. We also accept that the Tribunal did not in the decision spell out the reasoning behind its finding that the Appellants' unfair selection procedure provided a basis for it making no reduction in Mr Patel's compensation. But the Tribunal dealt at length with the flaws in this procedure and thus the reasons for its finding can be found within the four corners of the decision itself. That those reasons were not expressly linked to the assessment of Mr Patel's compensation was no doubt because, as Miss Slade told us, the Appellants' representatives at the hearing `left the matter of compensation to the Tribunal'. We therefore cannot accept the first of Miss Slade's submissions on Mr Patel's compensation.Miss Slade's second submission raises wider issues. Her argument in a nutshell was that Mr Patel scored so far below the other candidates for redundancy on the basis of the Appellants' selection criteria that he would almost certainly have been selected for redundancy even if a fair selection procedure had been adopted. There was also evidence before the Tribunal that on the basis of a previous selection matrix Mr Patel, through scoring higher marks, would still have been amongst those selected for redundancy. In these circumstances, said Miss Slade, the decision was perverse in the sense we have described.We have considered this submission with some care mindful as we must be that only in rare cases should we intervene in matters of compensation. We have also considered where the burden of proof lies in cases such as this although this is not a case which falls to be decided on that ground. Miss Slade in the performance of her professional obligation to us referred us to Charles Letts & Co Ltd v. AECT Howard [1976] IRLR 248 in which the Employment Appeal Tribunal held that in proceedings before Industrial Tribunals for unfair dismissal the onus lies on the employers, if they seek to establish the point, to satisfy the Tribunal that even if the proper fair procedure had been carried through, it would have made no difference to the result. In P Barley & Ors v. Amey Roadstone Corporation Ltd [1977] IRLR 299 however, an Employment Appeal Tribunal under the Chairmanship of Phillips J held that:
"Once unfair dismissal has been established, the onus of proof in relation to loss, and anything which it is necessary to prove in order to establish loss, lies upon the claimant. It would be wrong, however, for the Industrial Tribunal to apply the onus of proof so strictly that no claimant can hope to discharge it, since the evidential burden will usually shift to the employer once the claimant has put forward some coherent, sensible suggestion as to what the result of the failure to consult etc is likely to have been and what would be likely to have happened had there been no failure. ..."
The third case referred to us upon the burden of proof in cases such as this was Forth Estuary Engineering Ltd v. Litser & Ors [1986] IRLR 59 , a decision of the Scottish Employment Appeal Tribunal. In that case the Tribunal followed Charles Letts & Co Ltd v. AECT Howard (supra) holding that although the burden rested upon the employee to quantify his loss, if the loss was to be limited on the view that he would have been fairly dismissed at some future date in any event it was for the employer who made this assertion to prove it.Insofar as these three cases illustrate a difference of approach to the burden of proof in cases such as the present we prefer the reasoning behind the decision in P Barley & Ors v. Amey Roadstone Corporation Ltd (supra) though we doubt whether there is any material distinction between the approach in that case and the approach in the others. Once the Tribunal is satisfied that the dismissal is unfair through lack of consultation or warning the employee will by the same token have a prima facie loss - ie the loss of his job. In our opinion very little more is then required of the employee to cause the evidential burden to shift to the employer to show that the dismissal could, or would be likely to, have occurred in any event. If for example the employee is able to put forward no more than an arguable case that but for the lack of consultation or warning he would have kept his job that will ordinarily be sufficient.We are satisfied that in the circumstances of this case the burden of proof shifted to the Appellants. The effect of the Tribunal's decision was that they had not discharged it. The selection procedure which the Appellants adopted was rejected as unfair. No evidence was adduced at the Tribunal hearing of a fair selection procedure which would equally have led to Mr Patel's dismissal for redundancy. The reference at that hearing to an earlier selection procedure in which Mr Patel fared better but not well enough to elevate himself above those then considered for redundancy does not avail the Respondents because there is no finding in the decision that this earlier procedure was fair. On the contrary the Tribunal was clearly suspicious of it [see paragraph 46 of the Decision]. There was conflicting evidence before the Tribunal of Mr Patel's aptitudes and abilities. In our view the Tribunal was fully entitled to take the view which it did upon Mr Patel's compensation and we are far from agreeing with Miss Slade that its decision was perverse. Accordingly, the appeal against this part of the judgment must also be dismissed.In conclusion we must record that Mr Bowers on behalf of the Respondents indicated to us his intention not only to make submissions on the substantive issues raised by the appeal but also to argue that the Appellants were seeking to rely upon new points which were not raised at the Industrial Tribunal and so could not be raised before us. We persuaded Mr Bowers not to advance the latter argument unless and until it proved necessary for him to do so. In the event it was not necessary and we express no view upon the point.