Hunter Timber Group Ltd (t/a Hunter Timber Hardwood) v Newcombe [1994] UKEAT 294_92_1301

EAT
Hunter Timber Group Ltd (t/a Hunter Timber Hardwood) v Newcombe
[1994] UKEAT 294_92_1301 · 1994-01-13

JUDGE LEVY QC :

The facts in this case are not substantially in dispute. The Appellants, Hunter Timber Group Ltd t/a Hunter Timber Hardwood had, in 1991, an urgent need to shed a number of employees. That number was 8. In June of that year it entered into negotiations with the two unions involved. The Company had decided to assess the individuals from whom a choice had to be made on its own terms of assessment and on page 52 of the bundle there is the assessment which was made in respect of Mr Newcombe, the Respondent to this appeal, who was successful below. That page shows that Mr Newcombe was rated out of possibilities of 5 on each of the scores there, 2 for attendance, 3 for ability, 2 for co-operation and 2 for flexibility. This made a total of 9 out of a possible 20. The Head of Department, the Function Manager and the Chief Executives having had a hand in the assessments.There were negotiations with the two unions involved and we have a useful schedule of those negotiations which is found at page 46 of the bundle. By 20 June, there had been no agreement between the two unions involved and the employers as to what was to happen. The Company then decided to act unilaterally and knock out the last 8 people on their list and this is found on page 54 of the bundle Mr Newcombe was 3 from the bottom of the list. In order to have escaped the axe it is common ground that he would have had to get 14 points and a glance at the list shows he would have had to go a very great deal up it to avoid the 8 bottom people. Mr Benson, on the employers' behalf, said he would have had to improve his rating by some 60%. That was not accepted as a proper way of looking at the matter by Mr McMullen but we think there is much to be said for what Mr Benson said.He was dismissed without any consultation between him and his employers and these proceedings followed. There was a hearing on 18 February. After evidence had been heard at the hearing, there is some dispute as to what exactly happened. We have heard argument on the subject and accept we must be guided by the recollection of the Chairman contained in a letter to the Employment Appeal Tribunal dated 31 December 1992, at p.21 of the bundle. The central paragraph reads:
"On consulting his brief notes of the submissions he [the Chairman] finds that Miss Benson [the advocate for the employers before the Tribunal] made submissions as to compensation after the Tribunal's decision that the dismissal was unfair was announced."
What we understand that means to have happened was having heard the evidence and having retired for a short time, the Tribunal found that there was a case for unfairness and therefore the question of compensation arose. The Chairman's note reads:
"[Miss Benson] referred to the Polkey case and accepted that lack of proper procedure might render the dismissal unfair, but that the case went on to state that when assessing compensation, the question as to whether or not use of proper procedure would have made any difference should be taken into account. A reasonable period for consultation in this case would be 14 days, and she submitted that compensation should be limited to this period since the fact that proper procedure had not been used made no difference to the fact of dismissal."
The decision of the Tribuna,l from which the employers' appeal, was sent to the parties on 4 March 1992. What is clear from the decision is that the Industrial Tribunal found no fault whatsoever to find with the way that the employer had carried out the assessment but they were critical of the fact that there had been no consultation whatsoever with Mr Newcombe. On that basis they made the award of compensation against which the employer appeals.Paragraphs 6 and 7 of the Decision read:
"6. The tribunal accepted that a redundancy situation had existed, and that it was necessary to reduce the staff by 8. The method of selection was in all the circumstances reasonable, since the method adopted had been used in an objective fashion so far as possible. There seemed to be no alternative employment available. [We think that means inside the Company] The selection of the applicant would therefore have been reasonable but for a serious flaw in the procedure used by the respondent. It is most important in dealing with redundancies that there should be full consultation at all stages. In the present case the respondent carried out consultation with the trade unions involved, and also gave general information to the employees. This is not enough, however since a reasonable employer should also consult individually with those that are being selected for redundancy. Without such consultation the selection, and the dismissal must be unfair. In the present case there was no consultation with the individual employees at all. Although they had been made aware of the system to be used they were not informed as to how they had been assessed, nor was there any discussion or right of appeal. The applicant was sent for to the office and simply handed a letter of dismissal, and a cheque for his redundancy payment, and wages in lieu of notice. Mr. Graham was absent from work on the day of his dismissal because of his daughter's illness, and he was not seen at all, but was sent his letter of dismissal, and cheque through the post.
7. The applicant asked for compensation. [The following sentence is the sentence on which the most parts of the appeal arise] The Tribunal decided that compensation should be reduced by 50% because of the possibility that if the correct procedure had been followed, and the applicant had been consulted it was by no means certain that the consultation would have made any difference."We should add that having gone through the exercise of the calculations the grand total was calculated at a sum in excess of £5,000, the exact sum being £5,126.81 before interest.The amended Notice of Appeal is at page 4 of our bundle. The point that Mr Benson makes in his Notice of Appeal is encapsulated in paragraph 6:
"The Tribunal's decision that there was a chance that consultation might have made a difference was against the weight of the evidence and was one which no reasonable Tribunal could have reached."
Mr Benson says the Tribunal's decision was perverse. He goes on in the Notice of Appeal to address other matters but those, in our judgment, are subsidiary to this point.It is common ground what the tribunal should have done once they found improper procedures had been used by the employers. Both Counsel have referred us to the recent decision in Red Bank Manufacturing Co Ltd v Meadows [1992] IRLR 209 where Mr

Justice Tucker said in reference to the decision in Polkey :

"However, it seems to us that since the decision in Polkey it is necessary for a Tribunal when calculating the amount to be awarded for compensation to ask itself this two-stage question: If the proper procedure had been followed, and if consultation had taken place, would it have resulted in an offer of employment? This was the question to which the Tribunal did address themselves in the earlier hearing, and to which they gave the answer that it might have done so. What the Tribunal failed to do, and what in our view they should have done, was to go on to consider first what that employment would have been, and second what wage would have been paid in respect of it."
Mr McMullen, Counsel for the Respondent, says that that is not a material question here because the position was not really of alternative employment but Mr Newcombe persuading the Company that he should not be almost at the bottom of the list but somewhere near the top. Thus the axe should have fallen on another one of his colleagues rather than himself. Mr McMullen says that there was ample evidence before the Tribunal which could have led them to reach that decision. Mr Benson, Counsel for the Appellant, by contrast says the second sentence of paragraph of 7 of the Decision is elliptical in the extreme; indeed there was no evidence from which the Tribunal could make the finding which it did.At the end of the day we are all persuaded that Mr Benson was right. The findings of fact at the Tribunal set out in paragraph 6 of the Decision are compelling. The result of the assessment, so far as concerns Mr Newcombe, were disastrous. He was very low down on the list. Mr McMullen has stressed to us that cases in recent years have shown that when the need for redundancies were made known individuals have used their rights to have all the material placed before them and are entitled to have the opportunity to raise arguments with the management to show that their ratings were wrong. There is no evidence here that although Mr Newcombe was not given the opportunity, in fact had he been given such opportunity he would have persuaded the management to have acted differently.Mr McMullen argues that this is something which the Tribunal must have borne in mind in the sentence which we read out and he asks us to draw the appropriate inferences from it having regard to the evidence which we have been given. However, we feel unable to draw those inferences. We think the inferences go absolutely the other way and that if Mr Newcombe had had the consultation to which he should have had, the result would have been the same.In those circumstances we are drawn to the conclusion that the decision of the Tribunal was on this point was perverse and it should be overturned. We have to consider whether the alternative offered by the representative of the Company below, namely 14 days, was a proper one, ie 14 days between the date when the union stopped their negotiations and until the decision was announced: we agree with Mr McMullen on this that that would have been a wholly improper approach by the Tribunal. We have had a full and interesting skeleton argument from Mr McMullen which he has elaborated before us. We think at the end of the day it does not help to go through his submissions in great detail. What we have had to consider is a very succinct sentence in the reasons for the decision, which we frankly find unsustainable.What the Tribunal seem to have said, as Mr McMullen asked us to understand the sentence at paragraph 7, is that the Tribunal think that the consultation would not have made a difference but because it might have done they have knocked the award down by 50%. We cannot agree that there was the evidence before the Tribunal on which they could have made that finding that if there had been a consultation it would have made any difference.Mr McMullen further submitted that the onus was on the Appellants to show that consultation would not have produced an offer for the Respondent and they called no evidence to discharge that onus.Mr Benson says that given the background here the onus was on the Respondent to show that he would have obtained an offer in the circumstances. He referred us to Brittle Ltd v Robertson & Others [1993] IRLR 481, to support his submission. Paragraph 27, p.485 reads:
"We are satisfied that in the circumstances of this case the burden of proof shifted to the appellants. [The Employers]. The effect of the Tribunal's decision was that they had not discharged it. The selection procedure which the appellant 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... 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."
There the application that the judgment was perverse was rejected. However there unlike this case there was no finding that the selection of candidates was objectively fair. The Tribunal found that but for the fact that Mr Newcombe was not consulted, the way the employers went about matters was fair. Mr McMullen said that this left an evidential gap which the Appellants should have plugged by calling evidence to show that correct procedure would have brought the same result. We do not agree on the evidence that there was that evidential gap. What the Tribunal had was hard evidence that 8 people had to be dismissed; hard evidence that Mr Newcombe was, so to speak, at the top of the list of those on whom the axe was going to fall. Insofar as the Tribunal impliedly found that there could have been evidence that consultation would have changed the position it was not a finding available as the evidence heard. Any further evidence would not, we think, have improved the Respondent's chances of avoiding redundancy.In those circumstances we think all the other grounds which have been raised both in the Notice of Appeal and in the Skeleton Arguments on both sides do not need further analysis. At the end of the day the employers, apart from the failure to consult Mr Newcombe, had gone through the processes required of them rationally and properly. If they had consulted Mr Newcombe we are satisfied that there would have been no difference in the position and in the circumstances we think that the appeal must succeed.