FDR Ltd v Holloway [1995] UKEAT 240_95_2604

EAT
FDR Ltd v Holloway
[1995] UKEAT 240_95_2604 · 1995-04-26
MR JUSTICE MUMMERY (PRESIDENT) This is an appeal against the decision of the Industrial Tribunal held at Stratford on 14th February 1995 that FDR, Respondents to proceedings brought by Mr C E Holloway claiming unfair selection for redundancy, should provide discovery of specified documents and further particulars relating to Mr Holloway's selection for redundancy.Appeals against interlocutory decisions of this kind are few and far between. They are difficult to win. They are discouraged. Industrial Tribunals have a broad discretion to regulate their own procedure. Within that general discretion they have a specific discretion, on the application of a party or of their own motion, to order further particulars of the grounds on which a party relies and of any facts or contentions relevant to that ground and to require one party to grant to another such discovery or inspection of documents as might be granted by a County Court: see Rules 4(1) and 13(1) of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993. Under the relevant County Court Rules (ccr Order 14, Rule 8(1)) discovery may be refused if it is not necessary either for disposing fairly of the action or matter or for saving costs. As was emphasised by the Court of Appeal in British Aerospace v. D C Green & Ors (23rd March 1995)(1) Only those documents relevant and necessary for fairly disposing of the action or matter or for saving costs should be disclosed.(2) The question of relevance is determined on consideration of the pleadings which define the issues in the case. Discovery is not ordered for the purpose of enabling an applicant to discover whether there is an issue which he can raise. It should be borne in mind that pleadings in the Industrial Tribunal are often couched in general terms and it may be that the real case does not emerge until a later stage in the proceedings.(3) The function of Industrial Tribunals is to provide a cheap, quick and effective means of resolving disputes and that will be frustrated if the restrictions on discovery are not observed.Appeals against orders for discovery are often doomed to fail because an appellate tribunal can only interfere with the exercise of a discretion if it is demonstrated that the Industrial Tribunal exercised its discretion according to a wrong principle or in a way that no reasonable tribunal, properly appreciating the law of discovery and the relevant facts, would exercise it eg, by disregarding relevant matters or by taking irrelevant matters into account.

The Proceedings

Mr Holloway was employed by FDR Limited from 30th October 1989 until 23rd April 1994 when he was dismissed from his position as a service engineer in the Engineering Department of the Company's despatch facility at their Basildon site. On 7th July 1994 he presented an Originating Application complaining of unfair dismissal in the following terms:
"I believe I have been unfairly selected and that the selection criteria terms have not been adhered to in my case.
The company has declined to provide the ranking order to myself or my trade union.My employers failed to take reasonable steps to find me suitable alternative employment.In the alternative I was not redundant once there was work available which I could be required to do under my contract of employment.

A remedy of reinstatement should be considered."

No request for particulars of that allegation was made. It is reasonably clear that Mr Holloway's complaint was not against the selection criteria as such but against their application (or non-application) in the process of selecting him. Waite LJ observed in British Aerospace v. D C Green (supra)
"The Industrial Tribunal must, in short, be satisfied that redundancy selection has been achieved by adopting a fair and reasonable system and applying it fairly and reasonably as between one employee and another; and must judge that question objectively by asking whether the system and its application fall within the range of fairness and reason (regardless of whether they would have chosen to adopt such a system or apply it in that way themselves)."
Mr Holloway's challenge is not to the system adopted but to its application.Mr Holloway's claim was disputed by the Company in the Notice of Appearance dated 16th September 1994. The Company's case was that the reason for Mr Holloway's dismissal was redundancy and/or some other substantial reason. The Company set out its case in detail referring to the various events between early February 1994 and the termination of Mr Holloway's employment by reason of redundancy on 23rd April 1994. The essence of the Company's response is summarised in paragraph 23 as follows:
"Accordingly, there was a genuine redundancy situation within the Respondent as a result of a drop in the level of work available for employees in the Engineering Department. Moreover, the respondent did adopt a fair selection process which was agreed with BIFU [Mr Holloway's union - Banking, Insurance and Finance Union] and applied the selection criteria fairly in these circumstances. The respondent also acted fairly from a procedural point of view when dismissing the applicant by virtue of going into a process of warning and consultation with the applicant prior to the dismissal and seeking to find suitable alternative employment for the applicant."

The Decision of the Industrial Tribunal

Mr Holloway applied to the Industrial Tribunal for discovery of documents created or looked at by the Company in applying the selection criteria which appeared from disclosed documents to comprise length of service, period of absence for the last two years, last two performance appraisals, disciplinary matters and a five element skills assessment. Discovery was also sought of documents which would explain the system of weighting according to these factors, any matrix used for scoring and the final ranking order of the employees. The application was made in the context of a redundancy relating to eight employees in the despatch facility of the Company's Engineering Department. Mr Holloway was one of the eight. The application was opposed on the basis that the Tribunal should not be concerned with the correctness or otherwise of what the Company had done. The function of the Tribunal was to assess the fairness of what had been done, not to "second guess" the employers and make their own decision.The conclusion of the Tribunal was that the following documents and particulars were relevant and necessary to the proper determination of the issues in the case.
"(i) Details as to the length of service of the eight employees in the pool for selection for redundancy. It orders this information to be provided by way of further and better particulars.
(ii) Details of the periods of absence of the eight employees over the two years before the redundancy selection procedure was undertaken. It orders these details to be provided by way of further and better particulars.(iii) The last two performance appraisals for the eight employees. It orders this information to be provided by way discovery of documents. In respect of this matter, and all others in respect of which orders are made, the Tribunal is content that confidentiality can properly be preserved by omitting names from particulars and documents and identifying the employee by means of letters. The applicants' documents in all respects should be provided in full.(iv) Records of disciplinary warnings in respect of these eight people. Discovery to be provided.(v) Documents which were created in respect of the skills assessment undertaken for each of the eight employees under the each of the five factor heads relied upon by the Respondents. Discovery to be provided.(vi) An explanation of any system for weighting the above factors which was used by the Respondents. The Tribunal orders that the explanation should be provided by means of documents if they were created by means of further and better particulars if there was nothing complete in writing.(vii) The final ranking order of the eight employees, together with a statement as to respective marks which they received, if marks were given. This may be provided by way of further and better particulars, unless the Respondents prefer to provide original documents.In respect of all the above matters, the Tribunal orders with, with the consent of the parties as to the time period, that they should be provided within 14 days of today's date."By a Notice of Appeal served on 8th March 1995 the Company appealed against the whole of that order. It appeared at the hearing that there was no longer any dispute about the order contained in (vi) and (vii) (omitting names) or about any of the other documents so far as they related to Mr Holloway . Those documents had not, however, been provided to Mr Holloway's advisers. There was a short adjournment during the hearing of the appeal to enable this to be done, so that Mr Holloway's advisers could consider further the position relating to the discovery order.

FDR's Submissions

In support of the appeal Mr Linden, on behalf of FDR, made the following submissions.(1) The Originating Application, properly understood, raised only one issue on unfair selection. That was whether the agreed criteria for selection were fairly applied to the Respondent . The issue for the Industrial Tribunal was not whether some other employee could have been fairly dismissed. He found support for this proposition in passages in the judgments of Lord Justice Millett and Lord Justice Stuart-Smith in the British Aerospace case which concerned the powers of Industrial Tribunals regarding discovery and disclosure of documents in dealing with contested issues of fairness in selection for redundancy. Mr Linden cited the following passage from Lord Justice Millett's judgment:
"I wish to make my view clear that documents relating to retained employees are not likely to be relevant in any but the most exceptional circumstances. The question for the Industrial Tribunal, which must be determined separately for each applicant, is whether that applicant was unfairly dismissed, not whether some other employee could have been fairly dismissed. If the applicant can show that he was unfairly dismissed, he will succeed; if he cannot, he will fail. It will not help him to show that by the same criteria some other employee might not have been retained. The Tribunal is not entitled to embark upon a re-assessment exercise. I would endorse the observations of the Employment Appeal Tribunal in Eaton Ltd v. King [1995] IRLR 75 that it is sufficient for the employer to show that he set up a good system of selection and that it was fairly administered, and that ordinarily there is no need for the employer to justify all the assessments on which the selection for redundancy was based."
In that case a total workforce of 7,000 was assessed in a redundancy exercise. Five hundred and thirty were made redundant and 235 of the dismissed employees claimed that their selection for redundancy had been unfair. They made applications for discovery of the assessment forms of all employees who had not been dismissed in order that a comparison could be made of the respective ratings, under each criterion, of those members of the workforce who had been dismissed and those who had been retained. Not surprisingly, the order of the Industrial Tribunal granting that discovery was overturned by the Employment Appeal Tribunal. The Court of Appeal dismissed the appeal from the EAT. Mr Linden also quoted a passage from the judgment of Lord Justice Stuart-Smith to the effect that
"There is nothing in the documents in the present case which makes the assessment forms of the other employees who were not dismissed relevant. ...
In cases of mass redundancy in my opinion it will be only in rare and exceptional cases that the assessment forms of other employees not made redundant will be relevant. This is because the Tribunal is not considering whether those employees were unfairly not made redundant, but whether the applicant was unfairly dismissed. It is possible to envisage a case where for example all or the majority of employees in a certain category in one factory were made redundant, but all others, or the great majority, at the other sites were not. This might suggest that the criterion had not been applied in their case. ... but it cannot possibly be relevant to look at all the other assessments of employees in different categories . The truth of the matter here, as the Employment Appeal Tribunal pointed out, is that this was a fishing expedition to see if any case could be discovered. That is what is not permitted."(2) Mr Linden developed his argument by emphasising that the Industrial Tribunal must not subject the application of the criteria to over minute analysis. It is not the function of the Industrial Tribunal to embark on a re-assessment exercise. The decision for the Industrial Tribunal is whether the Company could reasonably select Mr Holloway.(3) It followed that assessments relating to other employees considered for redundancy, but not selected, were not relevant to this case. The Originating Application of Mr Holloway made no allegation of discrimination against him on the grounds of sex, race or trade union membership or activities. There was no allegation that any of the other service engineers considered in the selection process ought to have been dismissed instead of him.(4) There were fundamental errors of law in the decision of the Tribunal. There was nothing in the Originating Application to justify the conclusion that the documents and information ordered were relevant to an issue between the parties. What the Tribunal had done was to permit Mr Holloway to embark on a fishing expedition in the hope of establishing a case. The information ordered to be disclosed could only be relevant to an impermissible enquiry as to whether one of the other seven service engineers could be dismissed or if the Tribunal proposed to embark on its own selection process. The Tribunal appeared to have taken the view that Mr Holloway was entitled to discovery in order to find out whether he had a case. The Tribunal's order paid scant regard to the Company's concerns about confidentiality and the effect on the morale of the retained employees of disclosure of the information sought.

Conclusion

Mr Linden has not satisfied us that there is any error of principle or perversity in the way in which the Tribunal exercised its discretion to order discovery and further and better particulars. In our view, his submissions rest on an over-literal and incorrect reading of both the issue defined by the pleadings and of certain observations of the Court of Appeal in the British Aerospace case. As already observed it is reasonably clear that Mr Holloway is challenging his dismissal on the grounds of the fairness of his selection. He claims that the selection criteria were unfairly applied or not applied in his case. His particular concern is that he was made redundant, with 4 1 / 2 years' service, while another engineer had only been a permanent employee for a matter of months and he was retained. That, it is argued, is prima facie contrary to Clause 7.2 of the Agreement made between the Company and BIFU. Further, it had been confirmed by the Company to Mr Holloway that there were no complaints about his performance. In these circumstances it was clear that Mr Holloway was challenging the way in which the selection criteria had been applied in his case. He was alleging that another employee had shorter service with the Company. In other words, the Company had acted unreasonably in selecting him for redundancy. The Tribunal correctly made the orders for discovery and particulars as those matters were necessary to assess whether the agreed criteria were in fact applied to his case and were applied fairly. The Tribunal correctly identified the relevant issue. It was accepted that it is not the function of the Industrial Tribunal to carry out its own selection for redundancy. The Tribunal was not bound to accept the Company's assertion that it had applied the criteria fairly. The role of the Tribunal is to decide whether Mr Holloway was fairly selected. To do that the Tribunal, of necessity, has to know Mr Holloway's markings and how they compare with the other seven employees in order to determine whether the system had been applied fairly and reasonably to him. The position is that the Company refused to disclose that information. The effect of that refusal is that the Company was effectively telling Mr Holloway and the Tribunal that they had no option but to accept the decision and their assertion that they had acted fairly and reasonably.For those reasons this appeal is dismissed and it is unnecessary to consider a further point which arose on costs. The documents and particulars ordered by the Tribunal are to be provided within 14 days of the date on which this judgment is handed down. We understand that an application for leave to appeal may be made. If it is, we are of the view that leave should be refused. This is a matter of discretion and, in our view, it is for the Court of Appeal to decide whether there are grounds for entertaining it at a further level of appeal.