Magnet Ltd v Booth [1995] UKEAT 244_94_2001

EAT
Magnet Ltd v Booth
[1995] UKEAT 244_94_2001 · 1995-01-20
MRS JUSTICE SMITH : This is an Appeal from the Decision of an Industrial Tribunal sitting at Leeds on the 20th December 1993.The unanimous Decision of the Tribunal was that the Applicant Mr Booth, the Respondent to this Appeal was unfairly dismissed. The Respondent had been employed by the Appellants, Magnet Limited for over 13 years in their credit control department. For the last five years before his dismissal he had worked as an insolvency clerk. With effect from the 12th February 1993 he was dismissed on the ground of redundancy.The Respondent alleged that his dismissal had been unfair. The Industrial Tribunal held that the dismissal was for redundancy but that it was unfair in effect because, in their view, the Respondent had been unfairly selected for redundancy. From that decision the Appellant employer appeals.In view of the conclusion we have reached, we intend to say as little of the facts as possible and shall only say that which is necessary for an understanding of our decision.The Appellants claimed and the Industrial Tribunal accepted that 90% of the Respondent's workload as insolvency clerk, had disappeared as the result of a change in the company's arrangements for insuring their bad debts. The Respondent did not accept that evidence, but the Tribunal made a finding of fact that there was a genuine redundancy in the credit control department. The Respondent's work was no longer required.The Tribunal recorded the circumstances in which the decision to tell the Respondent of his redundancy was conveyed. On the afternoon of Tuesday, 9th February, the Respondent was interviewed by Mr Lacey and Mr Kerr, both of whom were managers. They discussed the change in policy and explained why it was, in their view, that his job had become redundant. They told Mr Booth that he could have time to think about it. In the meantime, Mr Marshall, the credit manager, would consider whether there was any alternative employment. However, it appears that at that very meeting on the 9th February, the Respondent was told that the only alternative employment available was a job in the factory working on a computer. This was in any event, only a temporary job. It would certainly last for one month and could possibly last for three, but no longer.The Applicant was given the chance to consider this option. He thought about it overnight and came to the conclusion that he would not accept it.The upshot was that he was dismissed with effect from the 12th February. The letter of dismissal is dated the 10th February. There is some confusion as to whether that letter was written on the 10th or the 12th, but it is a matter of no importance. The whole series of events had taken only three days.After deciding that there was a genuine redundancy here, the Industrial Tribunal turned their attention to Section 57(3) of the Employment Protection (Consolidation) Act 1978. They asked themselves whether in all the circumstances, the Respondents acted reasonably.They recorded that the Applicant was a long serving employee who claimed a knowledge of credit control work in all its aspects. They recorded that he had a knowledge of the new credit limits and that he could deal with the legal aspects of the work. He had worked as a ledger controller for part of his time with the Appellants. He had then taken on the job of legal analysis and had done that for two years before becoming the insolvency clerk. They accepted that he was able to do all aspects of the work in the credit control department.Then at paragraph 9 of the Decision, the Tribunal said this:
"This Tribunal has to decide whether it is satisfied that the respondents [employer] went through a proper procedure to endeavour to find the applicant alternative employment. We are not satisfied that a proper investigation was made as to whether the applicant could do other work in the department. We have heard that there were 4 people in the department who had less service than the applicant. He told us that the 2 ledger controllers, Mr Marshall and Mr Wooldridge had longer service than him. There were two other ledger controllers and altogether there were several people in the department with not more than five or six years' service. We are not satisfied that if a proper investigation had been made it would not have been possible to fit the applicant into the department at the expense of somebody else who had less service, because there has been no suggestion that the applicant was not capable of doing his job. He was dismissed because the work which he was actually doing was almost eliminated. But we are not satisfied that he could not, on his length of service, his experience on having worked in that department for so long doing the other jobs in that department, have been found alternative employment."
They concluded therefore that he had been unfairly dismissed. In effect they were saying that the company, faced with a redundancy situation, should have dismissed someone else from the credit control department who had less service than this employee.The point taken by the Appellants on this Appeal is a simple one and in the view of this Appeal Tribunal a good one. The Tribunal in asking the statutory question under Section 57(3) have in our view misdirected themselves. They should have asked themselves whether the selection which this employer made was within the band of reasonable decisions for this employer to make in the circumstances which faced him. Instead, they have substituted their own view that the employer should have selected on the basis of length of service within the department.Of course, it goes without saying that length of service is an important criterion in selection for redundancy. But there is no rule of law, in the absence of an agreed procedure to that effect, that the rule of "last in, first out" must be applied. We consider that this Tribunal fell into error in that it has substituted its own view of the way in which selection should have been carried out, instead of asking whether, what the Appellant employer did was reasonable in all the circumstances. In our view therefore, this Decision cannot stand.We have asked ourselves what should be done. Mr Turner who has appeared today for the Appellants accepted that the case should be remitted for re-hearing by a differently constituted Tribunal. We agree. The Tribunal decided the case on one basis, which we have held to be erroneous. They did not consider another important issue, namely the adequacy of consultation prior to dismissal. We do not feel able to say that, because the basis of the decision is wrong, there should necessarily be a finding that the dismissal was fair.In those circumstances, we agree with Mr Turner that the matter must be remitted for a re-hearing before a freshly constituted Tribunal.To that extent, the Appeal is allowed.