R D Technology Ltd (t/a Woodley Electronics) v Graham [1995] UKEAT 924_94_1005

EAT
R D Technology Ltd (t/a Woodley Electronics) v Graham
[1995] UKEAT 924_94_1005 · 1995-05-10

JUDGE J HULL QC:

This is an appeal to us by R D Technology Ltd, trading as Woodley Electronics, against the decision of an Industrial Tribunal, sitting at Reading under the chairmanship of Mr Gorst with two industrial members, who devoted three days to the case when it was before them.It was a complaint by Mrs Graham, who is a lady in middle age, employed by the employers as their UK Sales and Marketing Manager and Export Manager. She had been dismissed on 30 July 1993.The employer's case was that she was dismissed for redundancy. There had been an efficiency drive, forced on them by economic circumstances; and having considered the matter, it was decided that in the course of reorganisation it was her job which was to be made redundant.She said that she was not redundant and that matter was contested before the Industrial Tribunal, as I say, over no less than three days. The parties were both represented by Counsel who have appeared before us today.The Tribunal, after commenting on the time which it had taken them to consider the matter, set out many of the facts. They had heard evidence from, among others, Mr Henderson, the Manufacturing Director, Mr Darnell, the Managing Director and his son, Stephen; and they concluded that Mrs Graham was mistaken in suggesting that her dismissal had not been genuinely for redundancy. They accepted the good faith of the witnesses called by the employers.Then they set out the evidence, the circumstances leading to redundancy.Mr Roy Darnell's wife had prepared a memorandum; it was part of a large bundle of various documents. Mr Henderson, the Manufacturing Director, had prepared a report. That is a four-page or five-page document. The Tribunal record the recommendations in the report and those were the recommendations which led to the dismissal of Mrs Graham.They say that Mr Henderson concluded that the position held by the Applicant would become redundant as a result of the reorganisation of the department, and on the fifth page he went on to discuss the possibility of re-deploying her but, for the reasons enumerated on that page, discounted that as a possibility.
"9 On 19 July 1993 at a meeting of the Board of Directors, that report was considered and without any prior warning to or consultation with the applicant the decision was taken to dismiss her. On 30 July 1993 Mr R Darnell, in the presence of Mr Turner, broke the news to her telling her that unless there was anything she could think of that they could offer her they would have to make her redundant. Being unable to suggest anything, she was then handed a letter (pages 62 and 63 of Exhibit R1) which had already been prepared and was immediately required to clear her desk and leave the respondents' premises.
10 No-one giving evidence on behalf of the respondents suggested that consultation would have been futile. Mr R Darnell said in evidence that there was no point in consulting the applicant `as it would have caused upset'. He went on to concede that `it could have been a good idea to involve her' but that `he could not think of a different structure which would have had the effect of achieving the necessary financial reduction'. Mr Henderson told us that he could not say why she was not consulted before the decision to dismiss her was taken.11 Clearly we have to find that the dismissal was unfair for lack of warning and consultation. We have been asked to make an assessment of the chance that the applicant would have been unsuccessful in retaining her job had she been consulted. Realistically that is an almost impossible task".There the Tribunal were approaching, or hoping to approach, the task which has been defined in the case of Polkey and, of course, elaborated in many later decisions. The Tribunal must ask itself, having found the unfairness, having found that the dismissal was unfair, what is the result of that unfairness? Suppose for example there has been, as in this case, a failure to consult, do they think that it would have made no difference at all if there had been consultation, so that the unfairness has led to no loss whatever? That is one extreme position. Do they think that it would made all the difference, so that the person who was dismissed would, in all probability, have been kept on if only they had been consulted? Very often, neither of those extreme positions are ones which the Tribunal can reach and then they should go on to consider, "Since we cannot clearly say what would have happened if fairness had been observed, we must make an assessment of it. Can we make an assessment"? And normally, as has been pointed out to us, they can make an assessment. It will not be an exact assessment, but they can say:
"Having regard to all the evidence we think that there is, at any rate, a 50/50 chance that the employee would not have been dismissed if he/she had been consulted"
. That, of course, has to depend on the evidence which they have heard, and on the expertise in particular of the industrial members, in matters such as organisation and ordinary practice in industry or commerce, and also on the view which they take of the witnesses, because they can sum up the witnesses, the managerial people who give evidence before them, and say what they think the effect of consultation would have been on them, were they likely to change their position in the sort of discussion that might take place?So those are all matters for the Industrial Tribunal. Here they said, having heard the evidence and taken so long over it, "this is an almost impossible task".
"12 On the one hand, we had Mr Roy Darnell [the Managing Director] conceding that it `could have been a good idea to involve her' but being unable to say in what way the requisite financial saving might have been achieved if she had been retained.
13 On another hand we had Stephen [Mr Darnell's son] telling us that although he believed that the applicant spent about 60% of her time servicing the needs of customers in the whole of Europe he was unable to say how much of her time was attributable to the needs of customers in the United Kingdom, Norway, Sweden and Holland. How can we say what effect it might have had if he had made the requisite investigation and found out. He said that he did consider dismissing Miss Kay Vincent, a typist, and offering the applicant her job but rejected the idea because he did not think the applicant would accept it because the pay was about half what she had been receiving and it lacked status. In one breath the applicant told us that she could have done what Miss Vincent was doing with the exception of preparation of quotations and in another breath that `if there was no alternative I would have done Kay Vincent's job'. How she would have done it when she could not do it she did not explain. Furthermore she had made it clear to the respondents that she could not do more than three hours at a time in front of a word processor. It was not established that there was an agreed procedure or customary arrangement to apply the principle of first in and last out and furthermore the applicant and Miss Vincent were not doing the same job. Accordingly there was no obligation upon the respondents to dismiss Miss Vincent to enable the applicant to be retained.14 Stephen said that it was not raised as a possibility that the applicant might work out of their office in Germany which seemingly was adequately staffed. He said that he based his view that the applicant was redundant on `gut feeling' which with hindsight he believed to have been right.15 Mr Henderson [the Manufacturing Director] said that he `knew that well over 60% of the applicant's function was to be lost and that what was left for her to do was minimal'. He said, as already noted, that he did not know why she was not consulted before the decision to dismiss her was taken but did not say that to have done so would have been futile.16 At pages 42 to 44 of Exhibit R1, there is a job description which in March 1993 the applicant drew up for herself. She told us that 50% of her time was devoted to European export co-ordination but that hardly any of that time had been spent on customers in Greece, Spain and Italy for which the respondents had said she would cease to be needed once the requirements of customers in those three countries was serviced by Woodley Electronique in Lyons. She said that 40% of her time had been spent on servicing the needs of UK sales customers.17 Against this background we have been asked to estimate her chances of being dismissed had consultation taken place. Realistically it is impossible, honestly, to do so for clearly the respondents were, in the main, working on `gut feeling' and not with the benefit of an in depth assessment of her job function. For these reasons, or more accurately lack of reason, we have to confess that that is a calculation impossible to make".And they go on to set out other imponderables and they therefore make the award on the basis of an indemnity, that is to say - we are going to give her compensation for what she has lost by losing her job and we are not going to make a deduction of any percentage in respect of the possibility or likelihood or whatever you call it, that even if she had been consulted, she would still have been dismissed.So that was the view of the Industrial Tribunal and the appeal to us has been put shortly by Miss Joffe like this:
"It is just is not good enough for them to abdicate responsibility in this way. The authorities show quite clearly that the Tribunal must either decide that it would have made no difference or that it would have made all the difference or if there is an intermediate decision they should go on to put a percentage on the matter.
Here the Tribunal have said they find that impossible and she says:"First and foremost they are not able to do that. That is not allowed. It is, so to speak, a foul. The whistle must blow and we must say `you must do it and if you won't do it, another tribunal must do it'".And then she attempted a much more difficult task by looking at the evidence and saying, "Well this evidence was perfectly adequate for them and they should have made up their minds about it".This is, we hope, a relatively uncommon situation. Industrial Tribunals do find it possible to reach an assessment on which, in conscience, they can agree, by a majority if necessary, that a likely prospect is to be assessed at something like 40%, 60% or whatever it might be.Here the Tribunal found it, in conscience as they say, impossible and we look therefore to see how the matter is dealt with in the textbook, Harvey . This is atSection D, paragraph 2550:"An issue of some significance arising out of Polkey is this: is it for the tribunal of its own motion to determine whether dismissal would have occurred even if a fair procedure had been adopted, or must the employer adduce evidence on the issue? In Dunlop v Farrell [1993] ICR 885 there are passages suggesting the former. Similarly, in Wolesley Centres Ltd v Simmons [1994] ICR 503 the EAT (Judge Hague QC presiding) held that it was for the tribunal, in a case where the consequences of procedural findings were uncertain, to assess the percentage chances of the employee not being dismissed if proper procedures had been met. However, both in the Steel Stockholders and the Boulton & Paul cases, the EAT held that it was not for the industrial tribunal to embark on an independent investigation of the facts and circumstances in order to see whether the dismissal might have been justified if a different approach had been adopted by the employer. It is submitted that these decisions must be correct. If the employer can show that a failure to take certain procedural steps was something which a reasonable employer might have done, then according to the decision of the Court of Appeal in Duffy v Yeomans & Partners Ltd [1994] IRLR 642, the dismissal will not be unfair at all. But once it is established that the employer did act unfairly, it must be for him to adduce such evidence as is necessary to satisfy the tribunal that it would not be appropriate to award full compensation in the normal way".It appears to all of us that that is a correct statement of the law. Of course, the evidence adduced by an employer will often be very imperfect in the sense that it does not point with absolute clarity to the likely result if the employer had acted fairly. By definition, the employer is in a difficult position. The employer is at the stage where he has been held to have dismissed unfairly, or is likely to be held to have dismissed unfairly, and he must therefore address his mind and his thoughts to the question, what would have happened if he had acted fairly? It is a difficult position for anyone to be in. And usually the Tribunal will have to do the best with the evidence which is given and will feel able to reach a just assessment based, as I say, very largely on the expertise of its industrial members and on the view which is taken of the evidence.In the authorities which Miss Joffe has invited our attention to, and others referred to in her skeleton argument, of course it is often stated by the Court of Appeal and the House of Lords, and in the decisions of our own Tribunal, that it is the duty of the Tribunal to embark on this enquiry in the way which I have already indicated. But this does not mean that a tribunal is bound to speculate and that if it cannot reach a decision which, in conscience, it regards as a rational decision on the evidence which it has heard, it is nonetheless bound to do so as a matter of duty, and (so to speak) to toss up mentally and arrive at some sort of figure plucked out of space; that, in our belief, is not what those authorities mean. This is one of the decisions which (as we say) we hope is a rare decision where, despite the efforts of both employer and employee to help it, the Industrial Tribunal found it quite impossible to arrive at a percentage figure.Miss Joffe told us candidly that if it said, for example, "We think the chances of this lady being kept on if there had been consultation are of the order of 50% and that is the basis on which we make our award", she could have had no complaint. They did not. Maybe of course other tribunals would have felt able to do so, because in all questions of degree and fact, it is for each tribunal to say where it finds the probability lies. This tribunal said, "For us it is impossible". They are entitled to say that. Indeed, in our belief, if they find the task impossible they are obliged to say so and not to try to conceal the fact that they are unable to reach a decision. We are left with the position which is described accurately by the editors of Harvey , that is to say that the employer cannot complain in those circumstances. If he does not adduce evidence on which the Tribunal feels able to act, the Tribunal simply assesses the compensation on the basis that there has been an unfair dismissal, and that all they are sure of is that the unfairness has led to the dismissal, and that, accordingly, the losses which follow from the dismissal are all to be attributed to the unfairness.It seems to us that this Tribunal, being in this unhappy position (and certainly nobody can criticise them for not taking trouble over it) said exactly that and were obliged to say that. And we think, with all respect to Miss Joffe's argument, that it is based on the false premise that the Tribunal is bound to reach a decision on percentage. They are bound as a matter of law to go through the process of endeavouring to reach such a decision but that entirely begs the question of what happens if they are unable, having heard the evidence, to reach that decision.This Tribunal were unable to reach that decision. There is no suggestion whatever, of course, against their integrity in saying that they felt unable to do so and therefore, in the unhappy circumstances of the case, the result which followed was inevitable and we would say, not that it is any consolation of course to the Appellants, that they had only themselves to thank. It would have been perfectly simple for them to consider the questions of warning, consultation and so forth and to have reached a decision as to why it was quite impossible for them, with the aid of course of Mrs Graham, to help her by keeping her on in any capacity. They deliberately, apparently, omitted those matters; or else it was through sheer carelessness. They had "gut feelings", they were unable to think of any reason why they did not consult her, and so forth.In that unsatisfactory state of affairs, if the Tribunal cannot perform the task which they ask it to, they have, I am afraid, only themselves to blame for it. We cannot find that the criticism in law, which is made of this Tribunal, is sustained and it will not do simply to say that another Tribunal might have reached a different decision.So for those reasons, having heard Ms Joffe, we did not think it necessary to call on Mr Jones and we say that this appeal does not, in our view, raise any question of law on which we could allow it and the appeal falls to be dismissed.