Robertson Tooling Ltd v Doyle [1994] UKEAT 866_92_0507

EAT

Robertson Tooling Ltd v Doyle

[1994] UKEAT 866_92_0507 · 1994-07-05

JUDGE HULL QC:

This is an appeal to us by Robertson Tooling Ltd against a decision of the Industrial Tribunal sitting at Bedford under the Chairmanship of Mr Cowling. That Tribunal sat on the 18 March, the 8 June and 22 June 1992, to hear the complaint of Mr Doyle that he had been unfairly dismissed. Mr Doyle was employed by Robertson Tooling Company Ltd, who are a firm of tool makers. It is clear that it is a highly skilled and specialised business. They produce taps and dies and other tools of that sort for industry.

Mr Doyle had spent all his working life with Robertson Tooling Company Ltd. He began employment in August 1976 at the age of 16 and in 1990 he became the Production Manager in the cutting die department. Also in 1990, another gentleman who comes into this story, a Mr Dawson, began employment with the Appellants. There was, early in 1991, an unhappy situation in which business diminished and it was, in the view of the Directors of the Company, essential to reduce the labour force. Then later in 1991 it became clear to the Directors that they had no alternative but to embark on further redundancies.

Agreed criteria were drawn up. They are shown at page 41 of our bundle in a document dated 12 July 1991. They were agreed with the Union. As I have said, those involved here were for the most part, if not entirely, very skilled people. The Company was minded, as no doubt many are now, at the same time as they were carrying out these painful, but in their view necessary, adjustments, to try to introduce a new ethos, a new spirit into their business; one which, as it was put, would be more like the German and Japanese models, would eliminate the `them and us' attitude of management and those who were working on the shop floor and would endeavour to produce a new style of management; those were the general considerations which weighed with the management.

Certainly, when one looks at the criteria which were drawn up, it is clear that they are not based on old conventional rules of thumb in which the work force are basically regarded as some sort of unit from which people are to be chosen by rule, such as last in first out, or something of that sort.

The principles of selection which were agreed were:

"The prime factor will be the overall interests of the Company, with particular regard to the need to substantially reduce overhead costs but retain the ability to service our customers.

To meet this objective, persons will be considered for redundancy according to the following criteria:

The overall ability, versatility, reliability and productive capacity of individual persons.

Subject to the above, consideration will be given to length of service and notification given by individuals to their supervisor of their wish to be made redundant."

Then there were further administrative details about payment, timing and so forth.

So those were the criteria which were drawn up. We are not concerned with the way in which they were applied generally or the results of them apart from the present case. What it amounted to so far as Mr Doyle was concerned was that he, in this redundancy situation, was in competition with Mr Dawson, who as I say was a very recent recruit compared with Mr Doyle. Mr Dawson had only been there for something like a year. The way in which it was seen by management, and indeed there is no dispute that this was the correct way of looking at it, was that they had to choose between Mr Doyle and Mr Dawson as Managers of a Department which was going to be formed, apparently out of two other Departments.

So they had, in effect, to weigh them up. There is no dispute that they did that in perfectly good faith. There was no suggestion that they did not set about it in accordance with the criteria which had been drawn up. Of course, it would be a very different thing from choosing between, say, two unskilled workers. They had to consider a number of matters and in particular they were looking for management skills. Not only did they wish to select the better of the two managers, but he was to be the better from the point of view of the ambitions of the Company, the new spirit they hoped to introduce, to which I have referred.

After meetings and consideration of these matters, conducted, and there is no dispute about this, in perfect good faith, they came to the conclusion that Mr Dawson was from their point of view the winner in this small competition: that Mr Doyle's management skills were not so great as those of Mr Dawson. In particular, apparently, it was suggested that Mr Doyle had a confrontational method of management and that was rather hard on him because, according to Mr Doyle at any rate, he had at times been encouraged to show a confrontational attitude. But however it was verbalised, the management thought that Mr Dawson was, from the point of view of the Company, superior in the skills which are mentioned in the criteria and from the point of view of the Company, therefore, he was the winner of the competition.

They saw Mr Doyle. Of course there was relatively little he could say in the circumstances. It is important to note that as the issues were narrowed down by the hearing in front of the Industrial Tribunal, it really was a very narrow point which emerged. It had at first been suggested there was not a redundancy situation at all. That was abandoned; there was certainly redundancy here and it was necessary to make people redundant.

As to the selection criteria, they were accepted by the Union and the Tribunal were satisfied that they had been complied with in the way in which Mr Doyle had been selected for redundancy. It is stated expressly that there was no issue as to procedure, with one exception which I shall come to.

On the appeal here, Mr Wallington makes the point that in that state of affairs that leaves only merits. Was it the right decision or not? He says in those circumstances that if it was made in accordance with the criteria then if the Tribunal were to differ from the Company and say "well we think the wrong decision was reached", that meant that they were substituting their own view. They were not saying there was anything wrong about the criteria, they were not saying there was anything wrong about the way in which they were applied in the procedure. So we have to consider that submission.

Now unhappily the Tribunal was divided in its views. It was of course for the employers to show the reason for the dismissal; they did that, it was accepted that it was redundancy. It was then necessary for the Tribunal to decide, with the assistance of the witnesses, whether the dismissal was fair or unfair. Section 57 says as follows:

"... the determination of the question ... having regard to the reason shown by the employer, shall depend on whether [in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question should be determined in accordance with equity and the substantial merits of the case.]"

We therefore look to see what this Tribunal decided. The Chairman decided, as a minority, that the employers were not guilty of any unfairness. They had applied the criteria which had been decided, fairly and properly. He therefore would have dismissed the application. The majority took a different view. I should say that the decision is a very long and carefully structured one. It was of course reserved and it is most carefully written. It is admirably clear with regard to what was found, the evidence which was called and so forth. It deals in paragraph 30 with the majority decision, and sets it out, and it is this which is criticised. Mr Wallington says that if you look at the basis of the majority decision it is, in almost every particular, based upon matters which are irrelevant or matters which show, and this is even more important, that so far from applying an objective criterion to the reasonableness of the decision, the reasonableness of the actions of the employer, it shows that the Tribunal are substituting their own views.

It is well settled that in deciding whether the employer acted reasonably or unreasonably the Industrial Tribunal is not simply to rely on its own wisdom and make its own decision as to what it would have done itself. That is not what Parliament meant in Section 57. What the Tribunal has to do is to say whether this was a response, this was an action, which a reasonable employer could have taken. There are reasonable employers who might take one action, others might take a different one. All these decisions may be right in the sense that they are perfectly open as a matter of reason and justice and fairness to the particular employer. Of course different employers have a different view of matters. They take a different view of their own requirements.

Mr Wallington makes one proposition based, of course, again on authority, which is impossible to controvert; that is that where there are agreed criteria, agreed between the Union and the employers, any employee who is dismissed in accordance with the application of those criteria, in a fair way, will find it difficult, if not impossible, to show that his dismissal is in fact unfair. Then I come to paragraph 30, which sets out the decision of the majority:

"The majority decision is that the Applicant was unfairly dismissed. If lack of man management skill was considered to be such an important failing on the part of the Applicant it is considered curious by the majority that no attempts were made at an earlier stage to rectify the problem or at least to make the Applicant aware that there was a problem."

It sounds almost as if they are doubting the findings of fact about the good faith and the correctness of the evidence which they have heard. Lack of man management skill quite self evidently was considered an important matter by this management, in perfectly good faith. The majority say it is considered curious that no attempts were made at an earlier stage to rectify the problem, in other words to turn Mr Doyle into a better manager; that might be a perfectly legitimate criticism which a visiting management consultant, or somebody of that sort, might have made in previous years, but it has nothing to do with the fairness of the decision when a Company quite suddenly finds that it is confronted with a redundancy situation and, in its own vital interest, has to make a wise and proper decision about which manager to keep and which to dispense with.

They go on:

"Although the Respondent maintains that the criteria were applied objectively during protracted discussions between the directors ..."

Again, it is a rather strange way of putting it, because this was accepted.

"... no notes of the meetings were kept, no minutes of the meetings were available and the charts used during the brainstorming sessions were not retained. As a result the Respondent was not able to produce any documentary evidence in the form of memoranda or staff appraisals to support their contention that the Applicant was objectively selected."

There again, Mr Wallington says, it seems to us with justice, "so what". There is no doubt that there were these sessions. To produce a large mass of paper may look very wonderful and at one time, no doubt, it was thought to be a mark of energy and efficiency, but this was a case of three directors meeting together, one of them played devils advocate, and arguing over the merits of two trusted managers. It would appear, with respect, that to say that no notes were produced, no minutes of the meetings, and so on, is really carrying the matter no further.

The majority of the Tribunal go on:

"Examples given in support of the Respondent's contention that the Applicant exhibited poor man management skills related to incidents in 1989 and were therefore stale. In any event it was noted that the Applicant had been promoted subsequently. The Respondent criticised the Applicant's management style but only at the end of 15 years spent with the company where he had learnt his methods."

Again, clearly if this were a disciplinary matter it would be most unfair to go back to events in 1989 if those were spent and hold them up against this manager. But the fact is that that was not the situation, they were not looking at a disciplinary matter at all. They were trying to choose, and inevitably in choosing which of the men had skills most appropriate to their Company, they would think back to incidents which had occurred. Many a person shows, in an incautious or stressful moment, weaknesses which may in fact be there all the time.

Indeed it must be a matter, and here we are getting on to the second ground of Mr Wallington, it must be a matter for management to say whether something is stale in the sense of being irrelevant; whether the time has expired in which it ceases to be of any great use. It was for them, as long as they were being fair and acting in good faith.

Then the majority go on:

"If they now wanted to introduce a new system of working which included a less confrontational style they should have spent more time in training their managers in the new techniques."

Again, one makes the comment that that might well be something which a management consultant would say, being wise after the event. You can always say that there are better methods of management. But, does it tell against the fairness of this debate as to which of these managers was in fact better suited to the Company's requirements?

Then they go on, and here Mr Wallington says that his primary criticism is that this shows that the Tribunal are putting themselves in the position of the employer and exercising for themselves the intellectual processes which the employer was required to exercise.

These are the passages on which he relies:

"When considering the criteria for selection the directors do not appear to have included in their discussion any consideration of length of service."

I have already said when reading the criteria that length of service was to be subject to the other matters. If these other criteria were equal, or there was nothing much in it, then they might have regard to length of service, but it was to be subject to these previous matters. So it is a strange criticism of the directors that they did not appear to have considered in their discussion, which was devoted to these qualities of management, length of service. Then they go on, even more remarkably:

"In adopting the criteria they abandoned the points system of assessment used previously for hourly paid staff. The majority felt that a reasonable employer would have adopted the points procedure used previously."

Again, says Mr Wallington, this is the Tribunal putting themselves in the position of management. He says "why on earth should they adopt a points system when they had to choose between two capable managers, both of whom they knew, and they had the difficult, if not agonising, choice of which was the better man in the interests of the Company?"

Then the Tribunal go on:

"On the evidence there was little to choose between the Applicant and Mr Dawson and yet only the Applicant was interviewed as a candidate for redundancy."

That again seems to be a strange point. They had decided that Mr Doyle was the one to be made redundant. It would, as Mr Wallington said, and we accept this submission, be a very strange thing to interview both men. It would indeed be a cruel thing and very destructive of morale for it to be suggested to a man that he was a lively candidate for redundancy when in fact he was not. They had decided that it was to be Mr Doyle and saw him alone.

Then they finish up in this paragraph:

"The majority were not persuaded that any alleged lack of man management skill on behalf of the Applicant was so grievous that it overrode all other considerations including the marked discrepancy in the length of service between the Applicant and Mr Dawson."

That is, on the face of it, making a judgment which is one for management alone. It is for the management of the Company to say whether any alleged lack of man management skills overrode other considerations, because it must be a matter for the Company's management to say what weight to give to the various criteria which they have adopted.

Then they go on:

"For these reasons it is the view of the majority that the selection was unfair and that as a result the Applicant was unfairly dismissed."

Here Mr Wallington makes a final criticism. He says here they have compressed their reasoning, there is a sort of ellipsis, if that is the right word for it, in their reasoning. What they should have considered was, was this a decision which was open to management as a matter of fairness and reasonableness? One which a reasonable management might arrive at? By simply putting it that the selection was unfair, they are eliding the language of the statute and ignoring the decisions which show how the statute is to be construed, and that shows that they have allowed themselves to become involved in the actual decision as opposed to judging objectively whether it is one which falls within the reasonable band.

Certain of these criticisms, of course, are much important than others as is obvious to anybody who thinks about it. It might well be that if there were one or two such comments in the course of the majority decision, one would say that they simply amount to a slight looseness of language and simply show that they have not put it very happily. Certainly we are not going, ever, to construe a Tribunal's decision as though it were a statute, so that proper weight should be given to absolutely every word. But taken together it does appear to us that these criticisms, as a body of criticisms, are valid.

It does appear to us that many irrelevant considerations were raised and the majority of the Tribunal were themselves deciding what they would have done in the circumstances, or what the Company should have done in the circumstances, instead of bringing an objective view to bear on the decision of management.

It appears to us that they have overlooked what they set out themselves earlier in the decision, the necessity for being objective about this. They were in effect giving weight to the question of long service, and criticising the view of the management of this Company about the respective management skills of the two men, criticising them for it and saying it was perhaps largely their own fault that Mr Doyle suffered from these now perceived weaknesses.

As I say, taken together, they are a formidable body of criticisms and we think that they are made out, that is to say that in this matter of law concerning the way in which the decision was reached, it is apparent to us that the majority of the Tribunal misdirected themselves and approached the vital part of their decision in the wrong way. Having said that, that is as far as we are prepared to go. We do not accept the submission made by Mr Wallington that this is a case which could only be decided the other way. We are not satisfied with that. We have not of course heard the evidence, we have not heard all the matters which were raised, we are not prepared to say that the view of the Chairman which was contrary to the majority is the only one which could be reached.

Therefore, although we perceive this error of law and uphold the submissions on that point, we are not able to substitute our own view for that of the Industrial Tribunal which is charged by Parliament with the sole responsibility for finding the facts. In the circumstances we have to say that this case must be remitted for hearing by another Tribunal, that is to say an Industrial Tribunal differently constituted for the whole matter to be re-heard in accordance with law.