Wolesley Centers Ltd v Simmons [1993] UKEAT 555_92_2405

EAT
Wolesley Centers Ltd v Simmons
[1993] UKEAT 555_92_2405 · 1993-05-24

JUDGE HAGUE QC:

This is an appeal by employers from the decision of an Industrial Tribunal sitting at Brighton and entered in the register on 8 July 1992. By their decision, the Tribunal made a compensatory award of the statutory maximum of £10,000 in favour of the employee, Mr Simmons.Mr Simmons was employed by the appellant company, or by an associate company Builder Center Ltd, from October 1968 until his dismissal which took effect on 31 August 1991. Both companies are subsidiaries of Wolesley Plc, and part of the Wolesley Group which operates in the construction industry. Mr Simmons had been employed during his service in a number of administrative capacities, his final job description being Services Co-ordinator, which carried a number of administrative responsibilities. He worked at the employers' office at Bexhill, Sussex.In early 1991, Wolesley Plc decided upon a group re-organisation which involved sending a number of Bexhill jobs to Wolesley Plc's head office in Ripon, Yorkshire, and declaring some redundancies. On 30 May 1991, Mr Simmons was told he was to be made redundant. This was confirmed by a letter to him from the manageress dated 11 June 1991 confirming the intention "to terminate your contract of employment by way of redundancy on 31 August1991 unless we can offer you suitable alternative employment within the Wolesley Group" . No such suitable alternative employment was offered.By their first decision made on 13 February 1992 (and entered in the register on 18 March 1992), the Tribunal rejected Mr Simmons's claim that he had been dismissed by reason of his membership of a trade union, but held that he had been unfairly dismissed, because there had been no consultation, no adequate warnings had been given and very little attempt had been made to find him alternative employment. In paragraphs 9 and 10 of their Full Reasons, the Tribunal said this:
"9. Ms Gill, for the respondents, argued that if we found that the dismissal was unfair because of the failure to consult or seek alternative employment, then this would have made no difference in all the circumstances because there simply was not a job available and the consultation process therefore would have led inevitably to the same result. We are not satisfied that that is the case, because those interviewing the applicant on 30 May 1991 when he was dismissed on the grounds of redundancy, did not have before them his personnel file which was in Ripon at the time and were clearly not aware of the very varied jobs undertaken by the applicant for the respondents in the past.
10. Having said that we do acknowledge the fact that at this precise moment and for the last two or three years there has been a deep recession particularly in the construction industry and we acknowledge that considerable effort would have had to have been made by the respondents to find an alternative position for the applicant. However, we believe that with an employee with the length of service of the applicant that extra effort should and could have been made."Mr Simmons sought reinstatement or re-engagement, but by their subsequent second decision the Tribunal held that these were both impracticable, and adjourned the question of compensation.The Tribunal's third decision on compensation, which is the subject of this appeal, is headed "Reasons (Short Form)". It nevertheless has 8 numbered paragraphs and includes detailed calculations. The first 2 paragraphs deal with Mr Simmons's efforts to find alternative employment, as to which the Tribunal held that he had made all reasonable efforts. The material paragraphs for the purposes of this appeal are paragraphs 3 and 4 which read as follows:
"3. We further considered the respondents submission that consultation would not have [made] any difference in any event and that the applicant would have been dismissed on the grounds of redundancy shortly after he was in fact dismissed if there had been full consultation. In the light of our findings set out in paragraph 9 of our Decision of the 13 February 1992 we cannot come to the conclusion that on a balance of probabilities the applicant would have been dismissed in any event. In our view the evidence from the respondent at the original hearing was totally unsatisfactory in this respect for the reasons that we have highlighted in the first Decision.
4. In the circumstances we make no deduction from the award we make on the grounds that the applicant would have been dismissed on the grounds of redundancy in any event at some future date."The employers appeal against that part of the Tribunal's decision on three grounds set out in their Amended Notice of Appeal. The first two grounds are, briefly, that the Tribunal misdirected themselves in applying the decision of the House of Lords in Polkey -v- A E Dayton Services Ltd [1988] ICR 142 , and ought to have considered making a percentage reduction in the compensatory award to reflect the chance that Mr Simmons would in any event have lost his employment. The third ground is that in failing to find on the balance of probabilities that Mr Simmons would have been dismissed after a fair hearing, the Tribunal's decision was inconsistent with their findings in paragraph 10 of their first decision and/or with their second decision, and/or was perverse.On 13 August 1992, the employers' Solicitors wrote to the Chairman of the Tribunal asking for full reasons to be given. However that request made outside the 21 day time-limit for such a request, contained in Rule 9 of the Industrial Tribunal (Rules of Procedure) Regulations 1985. The Chairman refused to exercise his discretion under Rule 9(5)(b) to give Full Reasons out of time.Mr Bowers, on behalf of Mr Simmons, took a preliminary point that, in the absence of Full Reasons, the appeal not validly constituted and could not, or at any rate should not, be entertained by this Appeal Tribunal. He referred to Rule 3 of the Employment Appeal Regulations 1980 as amended, which requires that there be served on this Appeal Tribunal:
"(c)in the case of an appeal from an industrial tribunal, a copy of the full written reasons for the decision or order of that tribunal."
However, Rule 32 of the Regulations provides as follows:
"(1) Failure to comply with any requirements of these Rules shall not invalidate any proceedings unless the Appeal Tribunal otherwise directs.
(2) The Tribunal may, if it considers that to do so would lead to the more expeditious or economical disposal of any proceedings or would otherwise be desirable in the interests of justice, dispense with the takings of any step required or authorised by these Rules, or may direct that any such steps be taken in some manner other than that prescribed by these Rules.(3) The powers of the Tribunal under paragraph (2) extend to authorising the institution of an appeal notwithstanding that the period prescribed in rule 3(1A) may not have commenced."This Rule was considered by the Court of Appeal in William Hill Organisation Ltd -v- Gavas [1990] IRLR 488, in which Lord Donaldson of Lymington MR said (at para 15):
"The singular relevance of rule 32(3) is that the time for an appeal under rule 3(1A) is 42 days from the date of full Reasons, so that rule 32(3) clearly contemplates that there will be circumstances in which it would be appropriate for the Employment Appeal Tribunal to hear an appeal without full Reasons."
In our judgment, it is clear from Rule 32 and from the decision in William Hill Organisation -v- Gavas that this Appeal Tribunal has a discretion whether or not to allow an appeal to proceed in the absence of Full Reasons. In that case, this Appeal Tribunal had "come to the conclusion that, in the absence of Full Reasons, it was quite impossible to adjudicate upon thematter being urged by way of appeal" (para 23) and so refused to hear the appeal. The Court of Appeal refused to interfere with the exercise of the Appeal Tribunal's discretion. We agree with Mr Bear, Counsel for the employers, however, that there is no general principle that the absence of Full Reasons makes an appeal non-justiciable, and that the effect of non-compliance with Rule 3(1)(c) depends on the circumstances in each case.We were unfortunately divided as to the exercise of our discretion in the present case. The majority of us consider that, as regards the first two grounds of appeal, it was in the interests of justice that the appeal should be allowed to proceed. The majority thought that although headed "Short Reasons", the reasons given by the Tribunal (and especially those in paragraphs 3 and 4 set out above, which include the reference back to the Full Reasons given on 13 February 1992), were in essence quite full; and in particular, they refer to the question whether "on a balance of probabilities the applicant would have been dismissed in any event", which related directly to the point of law sought to be argued under the first two grounds of the Notice of Appeal. The minority (Mr Garfield Davies) was unable to agree. He considered that if the appeal were allowed to proceed in the absence of Full Reasons, there was a risk of unfairness to Mr Simmons, and so he would have exercised the discretion differently.In the result, by a majority we allowed the appeal to proceed on the first two grounds set out in the Amended Notice of Appeal. We postponed any decision as to the third ground in the Notice, as to which there is more difficulty.We turn to the substance of the appeal on those first two grounds. The starting point in section 74(1) of the Employment Protection (Consolidation) Act 1978 , by which it is provided:
"............ the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer."
It is clear from the final words of that provision that a finding that a dismissal is unfair does not mean that an employee is entitled to full compensation for the loss resulting from the loss of his job. He is only entitled to the loss he has sustained which is attributable to action taken by the employer, so that if he would have been dismissed even if the employer had acted properly and fairly, the employee's compensatory award is likely to be small or even nil. In the Polkey case supra, Lord Bridge of Harwich at p.163 quoted with approval dicta of Browne-Wilkinson J in Sillifant -v- Powell Dyffryn Timber Ltd [1983] IRLR 91 at p.96:
"There is no need for an "all or nothing" decision. If the industrial tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment."
We think that it follows from the Polkey decision and from later authorities including Red Bank Manufacturing Co Ltd -v- Meadows [1992] ICR 204 , Rao -v- Civil Aviation Authority [1992] ICR 503, KPG Computer Support Services Ltd -v- Abayomi (unreported) 21 December 1992 and Dunlop Ltd -v- Farrell [1993] ICR 885, that the assessment of the compensatory award in this kind of case involves a two-stage process. First, the Tribunal must ask itself whether if the employer had followed the proper procedures and acted fairly the employee would not have been dismissed. If the answer to that question is reasonably clear one way or the other, there is no difficulty. But in many cases the answer will be uncertain, in which situation, in order to give proper effect to section 74(1) of the 1978 Act and the dicta of Browne-Wilkinson J set out above, the Tribunal must as the second stage of the process make a percentage assessment of the likelihood of the employee being retained which must then be reflected in the compensatory award.It is, we think, apparent from the Tribunal's third decision in the present case that the Tribunal did not apply this two-stage process or consider a percentage assessment. Paragraph 3 of that decision simply states that the Tribunal is unable to find on the balance of probabilities that Mr Simmons would have been dismissed in any event, and paragraph 4 states that in the circumstances no deduction from the award should be made. On the face of it, that was an "all or nothing" approach, depending on a decision on the balance of probabilities. The authorities cited above show that this approach was incorrect, and that the Tribunal should have assessed, on a percentage scale, the chances of Mr Simmons being retained.Mr Bowers urged us to read the three decisions of the Tribunal together, and not to take a "fine toothcomb" to the Tribunal's finding on the compensatory award. He drew attention to the Tribunal's findings that at the meeting on 30 May 1991 the employers did not have Mr Simmons' personnel file before them and were unaware of the very varied jobs which Mr Simmons had undertaken during his long service with them. He pointed to the Tribunal's finding as to the "totally unsatisfactory" evidence given by the employers at the first hearing. Looked at as a whole, he said, this was not really a "percentage" case within the Sillifant dicta, and that the only fair inference (particularly having regard to the fact that only "Short Reasons" were given) was that the Tribunal were fully satisfied that, if the employers had not acted unfairly, Mr Simmons would not have been dismissed.We cannot accept these arguments. In view of the Tribunal's acceptance (in paragraph 10 of their first decision) of the deep recession in the construction industry and acknowledgment that considerable efforts would have been required to find Mr Simmons an alternative position, and the Tribunal's express use of the phrase "on the balance of probabilities", we think it is clear that the Tribunal themselves did not regard this case as being clear-cut.Mr Bowers in his argument referred us to three cases, Charles Letts & Co Ltd -v- Howard [1976] IRLR 248, P Bailey -v- Amey Roadstone Corporation Ltd [1977] IRLR 299 and Forth Estuary Engineering Ltd -v- Lister [1986] IRLR 59, concerning the burden of proof where an employer alleges that the employee would have been dismissed in any event. All these decisions were of course before that of the House of Lords in Polkey . They were, however, referred to in Britool Ltd -v- Roberts [1993] IRLR 48 which Mr Bowers drew to our attention after the conclusion of the argument and upon which we had the benefit of additional written arguments. In so far as that case decides that, once an Industrial Tribunal has found a dismissal to have been unfair on procedural grounds, the usual evidential burden on a claimant to prove his loss will shift to the employer who asserts that the employee would have been dismissed in any event, we would respectfully agree with it. However, in so far as the case decided that an employee without proper consultation or warning has prima facie suffered loss equal to the loss of his job, or that he will recover a full award if he merely shows an arguable case that he would have been retained, we must respectfully disagree. Any suggestions to that effect were in our view unnecessary to the actual decision, and were contrary to the Sillifant principle and the other authorities mentioned above, none of which were referred to. We do not find the Britool case of any assistance.In the circumstances, we unanimously set aside the decision of the Industrial Tribunal as to the compensatory award and remit that matter to the same Tribunal for reconsideration, and allow the appeal accordingly. If the Tribunal remain of the opinion that, on the balance of probabilities, Mr Simmons would have been retained, then the percentage deduction (if any) would be less than 50%. However, the amount of the compensatory award may well depend on further evidence and arguments adduced at the remitted hearing, and we leave it entirely open to the Tribunal to come to whatever decision they think appropriate.