Akzo Coatings Plc v Thompson & Ors [1996] UKEAT 1117_94_1402

EAT
Akzo Coatings Plc v Thompson & Ors
[1996] UKEAT 1117_94_1402 · 1996-02-14

JUDGE CLARK:

We have two appeals before us; the first in time is an appeal by the employer against a decision of the Manchester Industrial Tribunal that the 8 employees, Mr S Thompson and others were unfairly dismissed (EAT/1117/95) and a second appeal by those 8 against a decision of the Tribunal Chairman dismissing their application for a review of the Tribunal's decision on remedies (EAT/1037/95).We begin with the geography. All 8 employees were employed at the Middleton Distribution Centre ("MDC"). On 29 July 1992 the employer announced potential redundancies at that site involving all 45 employees then employed there. It was to close. Subsequently alternative employment was offered to 13 of the 45 at the employer's Warrington Distribution Centre; 42 employees applied for those jobs from among the MDC employees, and 8 job offers were made and accepted by MDC employees, 35 of whom applied for such vacancies, at the employer's Middleton Paint Centre. There was some overlapping of applicants from MDC for both the Warrington and Paint Centre vacancies.Next the chronology.Following the announcement in July 1992 in January 1993 selection criteria for alternative employment at Warrington and at the Paint Centre were published. Interviews were held for those vacancies and in January and February 1993 successful applicants for the Warrington jobs began their trial periods in the new employment and on 19 February 1993 job offers were made in relation to the Paint Centre.On 12 March 1993 the employment of the remaining MDC employees, including these 8, was terminated. Industrial Tribunal proceedings were commenced by Originating Applications and the example before us of Mr Thompson was presented on 20 March 1993 and the employers filed a Notice of Appearance on 15 April 1993.The matter came for hearing before the Manchester Industrial Tribunal on 14 and 21 February 1994 and on 7 October 1994 the Tribunal sent out its decision with extended reasons, finding that all 8 had been unfairly dismissed.On 15 November 1994 the employer put in his Notice of Appeal, that is the first appeal, and on the same day a remedies hearing was held before the Tribunal.On 8 March 1995 the 8 put in an answer to the employer's Notice of Appeal, but at that stage raised no cross-appeal.On 14 June 1995 the remedies decision was sent to the parties and on 5 July 1995 the 8 applied for a review of the remedies decision.On 8 August 1995 the Chairman dismissed the review application under Rule 11(5) of the 1993 Industrial Tribunal Rules of Procedure. On 23 August 1995 the 8 appealed against the review decision and that is the second appeal before us and also sought to appeal the original remedies decision dated 14 June 1995 out of time. That appeal was accompanied by an application for leave to appeal out of time, which application was dismissed by the Registrar on 1 November 1995.We deal first with the employer's appeal against the Industrial Tribunal decision dated 7 October 1994.The Industrial Tribunal found that the reason for dismissal in each case was redundancy. No breach of Section 59(1)(b) of the Employment Protection (Consolidation) Act 1978 was alleged. The Tribunal found that the jobs of all the MDC employees including these 8 had disappeared. Thus the issue was whether the employer had acted reasonably in treating redundancy as a sufficient reason for dismissal.The Tribunal set out the law at some length. Having set out the words of Section 57(3) as amended of the Act and reminded themselves of the guidance to be found in Iceland Frozen Foods Ltd v Jones [1983] ICR 17 they then referred to the Employment Appeal Tribunal decision in Williams and Others v Compair Maxam [1982] ICR 156 , and in particular set out verbatim the 5 point guidance to be found at page 162 of the report.They then set out their findings of fact directed to the employer's procedure for selecting MDC employees for the vacancies at Warrington and the Paint Centre. Selection criteria to be used in deciding who should fill the vacancies were agreed with the Transport and General Workers Union, to which the 8 belonged. Three interview teams, each consisting of a manager and personnel officer were set up. A 17 page questionnaire relating to the criteria was produced and used for each job applicant.Interviews were held by the three teams over a period of one week. Each applicant was scored, and those with the highest scores were offered jobs. Unsuccessful applicants were granted a right of appeal.There was also a management assessment carried out, which did not differ radically in the outcome from that of the interview panels. The 8 were unsuccessful in applying for the job vacancies.Having dealt with the facts, the Industrial Tribunal expressed their conclusions in paragraph 11 of the reasons in this way.
"11. Applying the relevant law to the above facts our findings are as follows. We remind ourselves of what has been said in the earlier paragraphs of this decision with regard to the relevant law. We conclude that taking all the circumstances of the matter into consideration: (a) The criteria used for selection for the alternative employment at Warrington were not objective and fair and reasonable. (b) The selection procedure included a secret subjective assessment by the applicants closest manager - the applicants were not aware of these assessments and were unable to challenge them. (c) The selection procedure also included an interview with a panel. The panel did not include an independent observer and used criteria which differed from those originally published both as to content and as to application. The panel assessments were not revealed to the applicants on request and they were not able to challenge either the criteria or the results produced by the interview panels.
Our concluded and unanimous view is that the respondent did have a potentially fair reason for dismissing the applicants, namely redundancy, but that the selection procedure for the alternative employment which was considered was deeply flawed and the respondents did not act reasonably as to its contribution or application."It will be convenient if we now set out the guidance given by the EAT in Williams at page 162.(1) The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere.(2) The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria.(3) Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience or length of service.(4) The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection.(5) The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment."It will be immediately apparent that this Tribunal has slavishly applied the Williams approach to selection for dismissal for redundancy to the way in which this employer dealt with the possibility of alternative employment.Mr Carr, on behalf of the employer, submits that this is a misdirection in law. Mr Brown argues that it is a permissible approach for the Industrial Tribunal to take when considering the overall question of reasonableness under Section 57(3). In our view Mr Carr is right.This case illustrates the dangers of misapplying guideline cases. There is, in our judgment, a world of difference between the way in which an employer approaches selection for dismissal in a redundancy pool where some will be retained and others dismissed. It is to that exercise which points 2-4 in the Williams guidelines are directed. These observations have no application when considering whether the employer has taken reasonable steps to look for alternative employment. The Tribunal's approach was wholly erroneous in law. The appeal must be allowed.It is therefore unnecessary for us to consider Mr Carr's alternative argument based on perversity. The question is what course should we take. Mr Brown urges us to remit the question of fairness to a fresh Industrial Tribunal. We do not think that would be right. Assuming the role of an Industrial Tribunal under our powers to be found in paragraph 21(1) of Schedule 11 to the 1978 Act, and looking at this Tribunal's findings of fact summarised above, it is abundantly clear to us that this employer took reasonable steps to find alternative employment for the 8. That is sufficient for the purposes of Section 57(3) to allow us to substitute a finding of fair dismissal in each case. That is the order we make.It follows that the appeal on quantum by the 8 is academic. However, we heard argument first on that appeal and dismissed it on its merits. In short, the 8 complained that a review of the Tribunal's finding in paragraph 6 of the remedies decision ought to have been allowed.At paragraph 6 the Tribunal say:
"6. The compensation which we award is set out in appendices two to nine. We have been hampered in our assessment of compensation by the limited amount of information provided by the applicants, particularly with regard to pensions."
That is dealt with by the Chairman at paragraph 3 of the review decision in this way.
"3. Some evidence was given to the Tribunal with regard to pensions but, as was stated in the decision dated 17 May 1995, the amount of information provided by the applicants was limited, particularly with regard to pensions. It was for the applicants to provide sufficient evidence for the Tribunal and the fact that they manifestly failed to do so does not appear to lead to a right for them to have the decision reviewed. There is no suggestion that the information was not available at the time of the hearing - it was simply not produced. The application for review should be rejected, as the respondents should not be put to the trouble and expense of a further hearing caused by the applicants' failure to give to the Tribunal information which was available at the time of the hearing."
In our judgment there was no ground for review here. The evidence about pension loss could have been made available at the remedies hearing, but was not. Therefore Rule 11(1)(d) of the 1993 Rules cannot apply. That cannot be circumvented by resorting to the powers under Rule 11(1)(e) - the interests of justice. See Flint v Eastern Electricity Board [1975] ICR 395, 401H - 402A. We cannot say that a refusal to review the decision was perverse in these circumstances. The reality is that this matter could only be attacked by way of appeal against the original remedies decision and no appeal was lodged in time.Accordingly we allow the first appeal; dismiss the second appeal and substitute findings of fair dismissal in each of these 8 cases.