Sacco v London Underground Ltd [1996] UKEAT 416_95_1705

EAT
Sacco v London Underground Ltd
[1996] UKEAT 416_95_1705 · 1996-05-17

JUDGE BASSINGTHWAIGHTE:

There have been separate appeals registered in this case by both parties; we will of course deal with them both together since they arise as a result of the same Industrial Tribunal decision.Mr Sacco's complaint of unfair dismissal was heard by a London (North) Industrial Tribunal on 9 and 10 February 1995, their decision being discussed in Chambers some time later. The unanimous decision which found that Mr Sacco had been unfairly dismissed was promulgated on 9 March 1995. The Industrial Tribunal found that Mr Sacco had been dismissed because he had not been able or willing "to go along with the new system", that is, with the major reorganisation of the way in which London Underground Ltd - which we shall call `the Company' throughout this decision - intended to run its business.That reason, the Industrial Tribunal found, amounted to "some other substantial reason" for the dismissal, within the terms of Section 57(2) of the Employment Protection Consolidation Act 1978 . The Industrial Tribunal found that that dismissal was unfair on what they termed "very limited ground". Having found that the Company was justified in seeking to reorganise its business and having found that the dismissing manager "did all he could to try to persuade Mr Sacco to accept the new terms and to find out what the problem was" before dismissal action was taken, the Industrial Tribunal's criticism focused upon one issue; that in pre-dismissal discussions, Mr Sacco had investigated voluntary severance terms, generally available at the time to all affected employees but it emerged that those terms were stated not to be available to him unless he agreed to work to the new contract terms for the time which would have remained for his employment with the Company.Somewhat unusually, and we make that comment because the Tribunal accepts that it had heard no argument from the parties and appears not to have considered whether they might prudently have heard further evidence in that context, the Industrial Tribunal indicated that they considered re-engagement to be a possible remedy. They also, anticipating that Mr Sacco might not wish to seek that remedy, then assessed the basic award at £3,280, but declined to make a compensatory award, because Mr Sacco had indicated in evidence that he would not have accepted a voluntary severance package on offer by the Company before his dismissal under any circumstances.Mr Sacco filed a Notice of Appeal on 19 April 1996. In it he complained about the Company's decision to reorganise and the procedures it used, particularly in its relation with the trade unions and added as the fifth ground of his complaint "my dismissal was unlawful". In that Notice of Appeal it is difficult to identify, given the findings of the Industrial Tribunal of unfair dismissal, a point of law which could exercise this Tribunal. However, a further Notice of Appeal was filed the following day by solicitors acting for Mr Sacco, which identified as grounds of appeal the following alleged errors of law:"6.(i) In dismissing the Appellant for "some other substantial reason" under Section 57(1)(b) of the Employment Protection (Consolidation) Act 1978 the employers action in so dismissing was within the range of reasonable responses as defined pursuant to Section 57(3) of the said Act in that:(a) it was reasonable for the Respondent to unilaterally impose a new contract on the Appellant.(b) it was reasonable to impose a new contract without individual consultation and negotiation with the Appellant.(ii) It would not make any compensatory award as the Appellant did not accept the voluntary severance package proposed by the Respondent."The first challenge substantially misquotes the Industrial Tribunal's conclusions and appears to be an attack upon the Industrial Tribunal's findings which preceded their finding of unfair dismissal; Mr Sacco appears, in effect, to require that the finding in his favour be made on grounds different from those which the Industrial Tribunal found. Such an argument is not, in our view, capable of description as a point of law which can exercise this appeal tribunal. The second is a more substantial ground criticising the decision to make no compensatory award for the reason identified.On 20 April 1996 the Company also filed a Notice of Appeal. In that Notice the Company challenged the Industrial Tribunal's finding of unfair dismissal for the reason stated, that is the non-availability of the voluntary severance package and submitted that the basic award set out by the Industrial Tribunal should have been reduced in accordance with the provisions of Section 73(7B) of the 1978 Act. The Company also on 21 November 1995 filed an answer to the Notices of Appeal filed by Mr Sacco and by his solicitors. It responded to what we have called "the attack upon the Industrial Tribunal's findings" which preceded their finding of unfair dismissal and sought to resist the criticism of the decision not to make a compensatory award by relying upon the same reasons as found by the Industrial Tribunal.We should firstly make it clear that we do not regard that which is contained in paragraphs 22 and 23 of the document signed by the Industrial Tribunal Chairman on 6 March 1995, as conveying decisions of the Industrial Tribunal. What is contained in those paragraphs is no more than an indication of the Industrial Tribunal's thoughts, given the content of information then before them and would, perhaps, have been better omitted from the decision. If therefore our decision today was to the effect that the Industrial Tribunal's decision upon the issue of unfair dismissal should be upheld, it would have been our direction that the parties should return to the Industrial Tribunal for such evidence as appeared appropriate, and for argument about the issue of remedy generally.On the hearing of the appeals today Mr Sacco has attended in person. He indicated that he did not wish to hear whatever the Company wished to say to the Tribunal and despite our efforts to persuade him to stay, left the Tribunal hearing while Ms Low addressed us. When she had concluded her remarks, Mr Sacco returned and addressed us. We confess to some difficulty in understanding what exactly was Mr Sacco's challenge to the actions of his employer, but it did however eventually become clear that his complaint centred around beliefs that European Law (which he did not specify) did not permit an employer to change terms and conditions of employment outside collective agreement negotiation with the relevant unions, and that the Company's efforts to do so in negotiation with individual employees, amounted to unlawful coercion upon him and to blackmail upon the unions. In the absence of specification of a basis for those beliefs we could not assess them since we ourselves were unaware of a possible basis for them.The Industrial Tribunal made extensive record in its decision of the evidence put before it by the Company, which led to its decision to reorganise its business and to seek to agree new terms and conditions of employment with its workforce. It is clear from the record of the Industrial Tribunal's decision, particularly in paragraph 16, that they accepted the evidence put before them by the Respondent Company. The Industrial Tribunal found that the Company had a genuine need for reorganisation, that there had been extensive negotiations with the trade unions, that there had been every effort to discuss the new terms and conditions with Mr Sacco and his colleagues individually and that there had been every effort to discover the reasons for Mr Sacco's refusal to agree.Based upon the Industrial Tribunal's findings of fact, they made no error of law in reaching their decision that the Appellant was dismissed for what amounts to "some other substantial reason". A dismissal because an employee refuses to co-operate in changed working conditions following upon a reorganisation of business practices is, as the Industrial Tribunal found, capable of falling within that definition. The Industrial Tribunal then went on to find that that dismissal had been unfair on the very limited ground to which we have already referred. The test of fairness of an unfair dismissal is contained in Section 57(3) of the 1978 Act and reads as follows:
"Where the employer has fulfilled the requirements of sub-section (1)" - that is of course the reason for dismissal, the statute then quoting matters not relevant to these appeals - "the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case."
The Industrial Tribunal found that the company had a genuine need for reorganisation, that it conducted extensive negotiations with the unions and with individual affected employees and that it tried to discover Mr Sacco's concerns and to meet them; only when it proved impossible to do that, was he dismissed. The Industrial Tribunal also found that during the personal negotiations the question of a voluntary severance package was raised, when Mr Sacco's strong opposition to the new conditions became clearer. Mr Sacco, again from the Industrial Tribunal's findings, investigated the offer but found it unacceptable. Paragraph 12 of the Industrial Tribunal's decision records its particular finding in that respect:
"... The Tribunal specifically asked Mr Sacco whether he would have accepted voluntary severance on the amount of money offered to him if he had been allowed to work out his notice under his old contract, and he said that he would not have done so. He took the view that the Respondents were in breach and therefore they should dismiss him."
Despite that finding, the Industrial Tribunal concluded that the dismissal of Mr Sacco was unfair because, and here we refer to paragraph 21:
"... We do not accept that the Respondents would have found it so difficult to let him work out his notice under his old contract and offer him voluntary severance on that basis. We consider that they were unfair to him in acting in that way and that on that very limited ground the dismissal was unfair."
It is difficult to see how the existence of a voluntary severance package is a relevant issue, when an Industrial Tribunal considers whether a dismissal was fair or unfair, if that package's terms are on offer to all affected employees on the same terms, as the Industrial Tribunal found was the case here. Its terms will have been reached as part of an employer's assessment of business needs and efficiency, to assist the departure of those employees who, for whatever reason, cannot or do not wish to accede to revised terms and conditions of employment. It did not arise in this case in consequence of a contractual entitlement but its existence may of course influence an employee's decision about whether to accept or reject the revised terms and conditions.It will not often be the case therefore that an Industrial Tribunal will feel able to criticise the terms of a voluntary and universally offered and administered severance package which an employer constructs after an assessment of his business needs and ability to pay: still less will an Industrial Tribunal feel able to find that an otherwise fair dismissal becomes unfair, because they feel that the terms should have been more generous, or as in this case, should have been varied for this particular Appellant alone. We make it clear that we do not decide that the existence, or terms and conditions, of a voluntary severance agreement can never be relevant when an Industrial Tribunal considers an unfair dismissal claim. What we do say in this case is that this Tribunal erred in law in making its finding of unfair dismissal on that basis, because in the particular circumstances of this case and particularly in the context of their other findings of fact, no reasonable Tribunal correctly directing itself in accordance with the law, would have reached that decision.We have considered what order we should make. In our view, the only conclusion open to the Industrial Tribunal given its findings of fact, whatever may have been their opinion about the terms under which the voluntary severance package was made available, was to find that this dismissal was fair. In those circumstances our order is to the effect that Mr Sacco's appeal fails and is dismissed, secondly that the Company's appeal is upheld, (insofar as both appeals relate to the finding of unfair dismissal) and thirdly that we substitute a finding that the dismissal of Mr Sacco was fair in place of the contrary finding of the Industrial Tribunal below.In consequence of that decision the issue of compensation does not arise; we do not therefore consider either Mr Sacco's or the Company's appeals in that respect.