Hunt v Fospur Ltd [1994] UKEAT 384_93_0712

EAT
Hunt v Fospur Ltd
[1994] UKEAT 384_93_0712 · 1994-12-07
MR JUSTICE HOLLAND : From the 2 August 1989, Mr Hunt was employed as a general labourer by the Respondents, their factory at Alfreton in Derbyshire.On 27 November 1992, he then being aged about 60, was dismissed in a peremptory fashion with wages in lieu of notice. The grounds for dismissal were redundancy, the effective date of the dismissal was 18 December 1993. In due course he received an appropriately calculated redundancy payment.On 7 December of 1992, he made an application to the Industrial Tribunal, alleging that that dismissal was unfair. This application was heard by an industrial tribunal sitting at Nottingham on 7 April 1993. In the result, the tribunal decided that the dismissal was unfair and awarded compensation amounting to £3,660.00. The reasons for that decision were sent to the parties on 29 April 1993. They are short, but it is important for the purposes of this Appeal that they should have full consideration. Thus it is, we think it appropriate to set them out in this Judgment. They are as follows:
"...1. Mr Hunt was employed by the respondents as a general labourer and his duty was to clean the shop floor in the factory premises. There was one other man employed doing this job. The respondents say that work had fallen off because of the decision to close many collieries and they say that this meant that their turnover and their profit were therefore reduced. They decided it was necessary to review their workforce and particularly the works' department which had not reduced its personnel in proportion to the rest of the firm where there had been people laid off or vacancies not filled and the works' department was also large in proportion to the turnover which they say had been reduced. Having reviewed their workforce they decided they would reduce it by making Mr Hunt redundant on the basis that he had been employed for less time than his colleague Mr Wood who was the other shop floor cleaner.
2. Mr Hunt alleges that he was dismissed on the grounds of trade union activities. He has produced copies of correspondence with the respondents and certainly the last paragraph of R11 in the bundle shows or mentions the fact that the workforce might consider joining a trade union. We have had no evidence from Mr Hunt that he ever took any steps to join a trade union and the document referred to does not, in our view, show such an intention to join a union. Nor does the evidence which he has given to us lead us to the conclusion that he was about to become a member of any union at all. So his application on the grounds that he was dismissed because of trade union activities does not stand up.3. The dismissal itself took place by a letter, which is R19 in the bundle, given to Mr Hunt on 27 November 1992. It was a peremptory dismissal and he was escorted off the premises within half an hour. It is agreed by the respondents that there was no consultation whatsoever. Their counsel on their behalf says that even if there had been consultation it would have been futile. It has been held by Tribunals, and Employment Appeal Tribunals, that whatever the size of the firm meaningful consultation should be held. Clearly this did not happen here. We find that the dismissal on the ground of lack of consultation, was unfair and that the applicant is entitled to compensation for the unfair dismissal.4. As to compensation, it is urged on us by counsel for the respondents that consultation would have been futile. There is no evidence for the respondents of any objective assessment of the workforce in coming to the decision which they did to dismiss the applicant and there is no evidence that consultation would have made no difference as alleged. We are therefore awarding compensation to the applicant:-

From 18 December 1992 to

17 September 199339 x £90 3,510

Loss of statutory industrial

rights 150

3,660

..."

We have before us an Appeal by Mr Hunt against that assessment of damages, we have further before us cross-appeals by the Respondents, first as to the ruling of unfair dismissal and second as to the assessment of damages. We consider it logical to deal first with the Respondents' submission that bears upon the ruling of unfair dismissal. That submission is based upon the sentence in paragraph 3 of the Reasons "...it has been held by Tribunals, and Employment Appeal Tribunals that whatever the size of firm, meaningful consultation should be held..." . Mr. Bear on behalf of the Respondents, says that that is a mis-direction as to law. In support of that submission, he has referred us to a line of cases Polkey v. A E Dayton Services Limited [1987] IRLR, pp 503, Boulton and Paul Limited v. Arnold [1994] IRLR, pp 532 and Duffy v. Yeomans & Partners Limited [1993] IRLR, pp 642.Perusal of these authorities satisfies us to the following effect. We hold that the Industrial Tribunal when at the stage of exercising its discretion pursuant to Section 57(3) of the Employment Protection (Consolidation) Act [1978] should have directed itself to decide whether this dismissal for redundancy was within the range of responses open to a reasonable employer in the circumstances as found by the Tribunal with the admitted lack of prior consultation being one such circumstance. We find that in effect the Tribunal elevated a potent circumstance, that is the lack of prior consultation to a point of principle and thereby mis-directed itself as to law. We entirely accept that had the Tribunal properly directed itself as to law, the result might have been the same. That said, we are not in a position so to hold, given the total absence of any proper exposition of the facts that were found and we accept that in any event it would be a bold Appeal Tribunal that could presume to make a finding as to the likely exercise of a discretion that is reserved to an Industrial Tribunal.Thus it is, dealing with this first ground of Appeal, we allow it and that leads us to order that the hearing as to the dismissal must be remitted for a fresh hearing by a differently constituted Industrial Tribunal. This latter course is encouraged by the nature of the Appeal and cross-Appeal as to damages. In effect, on final analysis, both parties are urging us to make a similar remission for a fresh hearing as to damages by a differently constituted Industrial Tribunal. Each side has a forceful complaint at this point.We deal first with the complaint raised by Mr Hunt. He makes the point that on 17 December 1991, as an employee of the Respondents, he agreed to participate in a share-save scheme that had become available to the employees of Fospur by virtue of the ownership of that company by Yorkshire Water plc. Through the courtesy of those who instruct Mr Bear, we have had the opportunity to see a leaflet prepared to explain to employees the nature of this scheme. The essence of it appears graphically from the opening paragraph. It reads as follows:
"... You make regular savings to your names Sharesave account.
Your savings are safe accumulating with the Yorkshire Building Society.You obtain a guaranteed tax-free bonus after 5 years equal to 15 your monthly contribution, equivalent to an annual compound interest rate of 8.86%An opportunity to buy Yorkshire Water plc ordinary shares in five years time but based on the current price discounted by up to 20%At the end of the option period, if you take shares to which you are entitled you will as a shareholder normally be paid cash dividends when they are paid out of the Company's profitsYou don't have to keep your shares, you can sell them at any time at the end of the option period..."Says Mr Hunt these benefits attracted his attention so that he agreed to participate and furthermore, opted to make the maximum monthly contribution into the scheme, that is, no less than £250.00.His current case is this: that when he was made redundant having regard to the terms of the scheme, his participation had to cease within the next ensuing six months so that he was only entitled to such fruits as had accrued up to that time. He therefore argues that he lost prospective benefits which could have been of some significant value and he submits that an Industrial Tribunal making a calculation of the compensatory award by reference to Section 74(1) is obliged to adjudge as to the amount that it considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer.Says Mr Hunt, any Tribunal properly directing itself as to law and fact should, when making an assessment of the loss, take into account as one of the elements the apparent loss to me from having my participation in this scheme brought to an early close by this wrongful dismissal.The response of the Respondents has been two-fold. First they submit that any loss that might have arisen is too speculative to form any part of a proper evaluation of compensation and secondly in any event, they draw attention to Clause 10 paragraph 1 of the terms of the Scheme, which in their submission, so binds Mr Hunt as a participant in the Scheme that he in effect waives any right to any compensation based upon premature termination of his participation.Turning then from the arguments advanced on both sides to the way in which the Industrial Tribunal dealt with the matter, it will be apparent from the citation of the Full Reasons that absolutely no mention was made of this issue in the decision as provided to the parties, notwithstanding that it is common ground that it was raised before that body. When Mr Hunt himself sought to find out as to what had happened to the point that he raised, he received a letter from the Regional Office of the Industrial Tribunals reading as follows:

"...Dear Sir

Industrial Tribunal (Rules of Procedure) Regulations 1985

MR C H HUNT -v- FOSPUR LIMITED

The Chairman of the Tribunals, Mr Richards, has considered your further letter. The share option was considered by the tribunal. Any further profit of shares obtained through this option is purely speculative, and the Tribunal was not prepared to make any award on this aspect.

No further award will be considered for this or the profit sharing scheme..."

With every respect to the spirit behind that letter, it does not in the event serve to assist the situation. It appears to show that the Tribunal did consider the first of the objections raised by the Respondents: whether or not it considered the second of the objections and how it dealt with that, is entirely a matter of speculation. Further, in any event, there is no indication at all even by reading that letter in conjunction with the decision, as to the way in which the Tribunal approached this matter, that is as to what findings of fact it made, that is as to what directions of law it applied to the situation.In the regretful conclusion of this Tribunal, so much of the decision of the Industrial Tribunal as in effect ignored this point was perverse, no reasonable Tribunal properly directed could avoid making appropriate findings as to fact and as to law. That unhappy conclusion provides a further reason to remit this hearing this time as to compensation to the same differently constituted Industrial Tribunal. There is, however, a further point about the assessment of damages raised by the Respondents, one which might just have forcibly have been raised by Mr Hunt. That bears upon so much of the computation of compensation as takes the period of 39 weeks as a period to apply to the admitted weekly net loss of £90.00. Why, the Respondents ask rhetorically, why 39 weeks? - why not, they would say, less? Mr Hunt might reasonably have said why 39 weeks? - why not more? Those pertinent questions would have been answered had the Tribunal properly directed itself as to law so as to make the assessment that is required of it. Mr Bear on behalf of the Respondents helpfully drew our attention to Wolesley Centers Limited v. Simmons [1994] ICR, pp 503 and in particular to page 508 in which this Tribunal said:
"... We think that it follows from the Polkey decision and from later authorities...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 Act of 1978 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..."
Had this Tribunal conscientiously directed itself in those terms, then to a large extent, this computation would have become comprehensible. There would of course been a further issue for them then to confront, that is the issue raised by Section 74(4), namely the extent to which Mr Hunt could be expect to mitigate his loss, having regard to his duty to do so. Given his age, it may well be that this would not have occupied a great deal of the Tribunal's attention. Nonetheless, it was a point for their further consideration before arriving at this particular situation. Thus it is that given the terse nature of the decisions and the total absence of any explanation as to how the computation is arrived at, we are not satisfied that this Tribunal correctly directed itself as to the law. Again, we are forced to agree that had they correctly directed themselves, it might be the same conclusion would have been arrived at. The Respondents, however, would say that the conclusion that would have been arrived at would have been a lesser award: Mr Hunt could just have forcibly have argued at this stage that it might have been a higher award. What is important is that a Tribunal should properly direct itself as to law and in the light of those directions as to law, find the appropriate facts wherewith to make an assessment that can stand up to appropriate examination. All that, however, is yet to take place and by this third route, we come back to the same conclusion as before: this further part of the Appeal must be allowed and the matter must be remitted back for deliberation by a fresh Tribunal. The end result therefore is that all the issues have reluctantly to go back for resolution by a fresh Tribunal in accordance with the law.Before departing from this matter, we would say straight away that in presenting his Appeal to us, Mr Hunt did everything that could reasonably be expected of him, as someone who, as he pointed out, is deficient of any sophisticated knowledge as to the law. We raise this because we fully accept that it may be beyond his means to have legal representation at any further hearing before the Tribunal, but if by any chance he is able to get any form of legal representation, particularly a representation by a lawyer conversant with this part of the law, it will serve to put his case more forcibly, it will serve also to assist the task of the Industrial Tribunal. We are of course, entirely satisfied that if the position continues as it is, Mr Bear will, in accordance with his duties to the Tribunal, do his best to ensure that the absence of legal representation for Mr Hunt does not do him a disservice. That said, that is not an easy task for Mr Bear and any Tribunal would be greatly assisted here to have submissions represented on both sides.