Ormsby v The West Of England Shipowners Insurance [1995] UKEAT 1156_94_0811

EAT
Ormsby v The West Of England Shipowners Insurance
[1995] UKEAT 1156_94_0811 · 1995-11-08

JUDGE CLARK :

Miss Ormsby, the appellant, was employed by the respondent as a computer operator from 4th July 1989 until her dismissal on 5th November 1993. Following that dismissal she brought a complaint of unfair dismissal and sex discrimination.The respondent was a services company managing its parent company in Luxembourg which provided marine liability insurance to shipowners.In September 1992 the appellant was one of four computer operators in the Operations Department of the Data Processing Department. In that month a draft budget proposal for the year 1993/94 was prepared by the respondent and identified a diminution in the requirement for computer operators. It was at that time decided to reduce the number of computer operators from four to two. Without consulting the affected employees, a view was taken, described by the Industrial Tribunal as "a provisional decision subject to approval by the parent company" to make the appellant and another lady, Miss Noblett redundant. However, in November 1992 the Operations Manager left and one of the computer operators was promoted. That left three operators for two remaining jobs. A provisional decision was taken to retain Miss Noblett and to dismiss the appellant. Again, this provisional decision was reached without any consultation as to the criteria for selection, or the decision to select the appellant for redundancy. According to the Industrial Tribunal that decision was made on merit. They also observed that Miss Noblett had 15 years service, far longer than that of the appellant.In January 1993, before the staff reduction had been approved, Miss Ormsby informed the respondent that she was pregnant. Difficulties with the pregnancy were anticipated and so the respondent forbore from telling the appellant about her possible redundancy.The appellant left on maternity leave on 2nd July 1993, having given notice to the respondent that she intended to return to work on 5th November. However, in mid-July, sadly, she lost the baby.On 24th September the appellant met with the respondent's Personnel Officer, Anna Sherlock, and another member of management, Geoff Sullivan. They told her that she was to be made redundant on 5th November (that is at the end of her maternity leave period). Her severance payment calculation had already been prepared. Details were provided at the meeting and repeated in a letter dated 27th September 1993 from Ms Sherlock. That letter reads:
"Dear Winsome,
I write in reference to our meeting on Friday 24th September 1993, also attended by Geoff Sullivan.As explained, we are in the unfortunate position of having to make your position redundant, therefore please find below the financial details which were outlined in our meeting:[ They are set out. She continues: ] ...I have spoken to David Cross who will instruct Millers to provide a transfer value in relation to your retirement pension fund.If you require any further information or would like to discuss any additional matters, please do not hesitate to contact me."Miss Ormsby replied to that letter by her letter of 3rd October 1993. She wrote:
"Dear Ms Sherlock,
With regard to the meeting held on Friday 24th September, with yourself and Mr Geoff Sullivan, at which I was informed that I was to be made redundant as of 5th November 1993. It was mentioned that I was selected for redundancy earlier this year and that my subsequent pregnancy resulted in your delaying my redundancy until after my maternity payment from the West of England ceased.I was asked at the meeting if I had any questions regarding the notification of my redundancy and in hind-sight I have two.1. The reasons as to why I was selected for redundancy.2. Full details of your redundancy selection procedures.

I look forward to hearing from you in the near future."

Ms Sherlock replied, promptly, to that letter on 5th October 1993. She set out the background to the appellant's dismissal and said that having identified an element of over-staffing:
"The unfortunate result was that we had to make one employee redundant and, regrettably, that employee is yourself."
Ms Sherlock then goes on to explain why the appellant was selected for redundancy, and in answer to the second question raised by the appellant, said this:
"... a formal redundancy selection procedure would not operate sufficiently in our company due to the relatively small number of employees to the variety of jobs held."
Ms Sherlock concluded:
"I trust the above explanation answers all your questions, but if you do require any further information, please do not hesitate to contact me."
Before the Industrial Tribunal it was contended on behalf of the appellant that the decision to dismiss her was based on that fact that she was pregnant. That contention was rejected by the Tribunal, who found that the reason for dismissal was redundancy and not pregnancy. There is no appeal against that finding.Accordingly, the Industrial Tribunal went on to consider the question of reasonableness under Section 57(3) of the Employment Protection (Consolidation) Act 1978 . In their conclusions set out in paragraph 8 of their extended reasons, they say this:
"... Our only hesitation had been on the sufficiency of the consultation. However, on 24 September when the Applicant was told that she was dismissed, she was given until November 5 to approach the Respondents with suggestion of another job, using secretarial or programming skills. She also could have raised the matter in her letter of 3 October when she asked the Respondent why she had been selected for redundancy. We accept the Respondent's evidence that there was no suitable alternative employment. We are of the view that the Applicant's dismissal was fair and her application is dismissed."
Against that finding of fair dismissal the appellant now appeals. Ms Henderson, on her behalf, takes a number of points, but the only one which we consider merits close examination is that relating to consultation. What she says is that looking at the Industrial Tribunal's findings of fact, and the contemporaneous correspondence referred to in those findings, it is abundantly clear that at no time was Miss Ormsby consulted about her selection for redundancy before termination of the employment on 5th November 1993. Accordingly, the Tribunal's conclusions that this was a fair dismissal by reason of redundancy was perverse.In a sustained argument on behalf of the respondent, Mr Carr submits that the Industrial Tribunal plainly had the rival contentions of the parties in mind when reaching their conclusions, because those contentions, including the rival submissions as to consultation, were set out in paragraphs 5 and 6 of their extended reasons. He says that having expressed hesitation over the sufficiency of consultation, it follows from their conclusions that this dismissal was fair that they were satisfied as to the adequacy of consultation, and, he says, there was evidence upon which such a conclusion could properly be based. Further he warns against this Tribunal reaching a finding of perversity without having seen the Chairman's Notes of Evidence.We prefer the submissions advanced by Ms Henderson.We remind ourselves that before characterising an Industrial Tribunal decision as perverse we must be satisfied that their conclusion is irrational; an impermissible option; a conclusion to which no reasonable tribunal could come. All of these are different ways of saying much the same thing.However, we have taken into account a long line of authority, including Williams and Compair Maxim [1982] IRLR 83 and Polkey v Dayton [1987] IRLR 503 which emphasises the importance of consultation in the sphere of redundancy as a matter of good industrial practice.We have been referred specifically to the cases of Freud v Bentalls [1982] IRLR 443 and Rowell v Hubbard [1995] IRLR 195 in both of which cases findings of fair dismissal were reversed by this Tribunal on the basis of an absence of consultation.We accept the broad definition of consultation formulated by Hodgson J in R v Gwent County Council - Ex parte Bryant [1988] Crown Office Digest 19 . In turn adopted in the judgment of Glidewell LJ in the Divisional Court decision of the R v British Coal Corporation and Secretary of State for Trade & Industry - Ex parte Price & Others [1994] IRLR 72 . That formula is set out at paragraph 15 of this Tribunal's decision in Rowell v Hubbard Group Services Ltd and Hodgson J said this:
""Fair consultation means: (a) consultation when the proposals are still at a formative stage; (b) adequate information on which to respond; (c) adequate time in which to respond; (d) conscientious consideration by [ in these circumstances the employer ] of the response to consultation."
Turning to the facts of this case, the Industrial Tribunal makes no finding that consultation in relation to Miss Ormsby's selection for redundancy ever took place. On the contrary, it is clear to us, reading the correspondence to which I have referred, that on 24th September 1993 she was told she was being made redundant, and when she asked for details as to why, and on what basis she had been selected that question was answered. We have considered the Industrial Tribunal's finding at paragraph 4(e) of the reasons. Where the Tribunal state:
"... She was told that situation would be kept under review until 5 November in case there was any change. She was told there were at the time no vacancies for jobs that might be suitable for her."
But we read that passage in conjunction with what is said in paragraph 8 of the reasons, and we have come to the conclusion that what the Tribunal were there saying was that any possibility of alternative employment for Miss Ormsby would be kept under review, and no more.Accordingly we have reached the conclusion that the respondent in this case, failed to consult with the appellant in any of the four respects set out in Hodgson's J useful formula. We have concluded that the finding by the Industrial Tribunal that the dismissal was fair in terms of Section 57(3) cannot stand in the absence of any consultation with the appellant over her selection for redundancy.We have considered what course we should take in these circumstances and conclude that we should allow the appeal, substitute a finding of unfair dismissal and remit the case to a fresh Industrial Tribunal to consider the question of remedies, bearing in mind the guidance given in the case of Polkey .

JUDGE CLARK : We will order the appellant's Legal Aid taxation.

JUDGE CLARK : Leave to appeal refused.