Thomson Tour Operations v Cookson & Ors [1996] UKEAT 586_95_0602

EAT

Thomson Tour Operations v Cookson & Ors

[1996] UKEAT 586_95_0602 · 1996-02-06

JUDGE CLARK:

This is an appeal by the employer against the decision of a Manchester Industrial Tribunal entered on 4 May 1995, that the three Respondent employees were unfairly dismissed. Compensation was limited to one month's loss. The Respondents cross-appealed against that limitation on compensation, but we are told that that cross-appeal has been withdrawn and we therefore dismiss it.

The Respondents were employed in the Appellant's national sales office in Manchester. There were approximately one hundred employees working in that office. Each of the three had long service: Mrs Berry 16 years, Mrs Bryan 21 years and Miss Cookson 12 years. In late 1993, in a highly competitive market, the Appellant resolved to reduce costs. In order to do so, a number of variations in the staff's contracts of employment were proposed by management. These alterations represented a reduction in terms such that, as the Appellant conceded, they amounted to a fundamental breach of contract. Equally it was conceded, on behalf of the Respondents, that there was a sound good business reason for the variation in terms, such as to amount to some other substantial reason for dismissal in light of the Court of Appeal decision in Hollister v National Farmers Union

[1979] ICR 542

The three Respondents were dismissed with pay in lieu of notice in early February 1994. The main issue before the Industrial Tribunal was whether or not the employer had acted reasonably under Section 57(3) of the Employment Protection (Consolidation) Act 1978 . The second consideration was whether, if the dismissals were procedurally unfair, that unfairness made any and if so what difference to the eventual outcome: the Polkey point. Accordingly the Tribunal looked carefully at the consultation process undertaken by the employers. It began with a meeting of the Manchester staff on 27 October 1993 addressed by Mr Garley, the Purchasing Director. The reaction of the staff was hostile. Employees were asked to sign a new contract incorporating the proposed variations by 5 November and a douceur was offered to those who did so.

On 29 October 1993, Mr Garley circulated a memorandum which posed certain hypothetical questions and gave the answers. One of them, the Tribunal record, was this:

"Question - What will happen if I cannot sign the contract as I know I will have difficulty meeting the requirements specified of me?

Answer - We will review the overall position in June 1994 and take whatever steps are necessary to ensure that we are meeting the needs of our customers. It is too early to anticipate what action this might be."

It was accepted by witnesses for the employer that employees would, as a result of that memorandum, have been under the impression at that stage that they had until June 1994 to make up their minds. Somewhat to the surprise of management, by the end of November 1993, 97% of the workforce had signed the new terms and conditions. The only outstanding employees were the three Respondents. Each of them refused to agree the new terms of employment for various reasons.

On 13 December there was a meeting of senior management which concluded that the three Respondents could not be permitted to continue to work on different contracts and different rosters from their colleagues. Accordingly Mrs Beswick saw each of them individually on 15 December 1993 and the Tribunal found, notwithstanding what was undoubtedly a genuine attempt on her part to deal with the Respondents sympathetically, Mrs Beswick was less than clear in her own mind as to what the predicament of the Respondents was. The Tribunal found that that meeting was conducted in a way which left the Respondents confused and distressed.

On 23 December each Respondent received a formal letter from the employer which indicated that if they did not accept the new terms their employment would be terminated. However, the Tribunal found that in discussions Mrs Beswick gave a less than clear indication to the Respondents, that their employment would definitely be terminated if they did not sign the new contracts. The Tribunal notes that over the Christmas period the Respondents were in a state of mental turmoil. We should read paragraph 14 of the Tribunal's reasons:

"14. At one stage, reference was made to disciplinary action although no disciplinary procedures were taken up. When the applicants referred to their contracts of employment, they were asked to provide copies of the same. One would have expected that the respondents would have had them available. Eventually, on 31 January 1994, the applicants, Mrs Berry and Mrs Bryan were left waiting in the office for some two hours not knowing what was happening (Miss Cookson being at home, waiting to hear whether she had a job or not.) The whole situation was chaotic in the extreme and totally unfair to the applicants."

Having reviewed the way in which management dealt with the matter, the Tribunal expressed their conclusions in paragraphs 15 and 16:

"15. Having heard the totality of the evidence, the Tribunal is of the unanimous view that the way in which the applicants were treated by the respondents leading to their dismissal was so patently unfair that, even though the reason for the dismissal would have been justifiable on the basis of the business reorganisation referred to, the manner in which it was conducted was such that, at the date of dismissal, this did not amount to a sufficient reason to dismiss within the meaning of the provisions of Section 57(3) of the Employment Protection (Consolidation) Act 1978."

16. Accordingly the unanimous view of the Tribunal is that the dismissals of each of the applicants was unfair. They should have been given more coherent and definitive personal and direct information as to the real options open to them and more time to consider the same. Had they done so at the end of January 1994, then the applicants should have been given, in the Tribunal's view, a period of, say, one further month in which to consider their positions."

In this appeal Miss Booth QC argues that the Tribunal's reasons, particularly paragraph 14, omit any reference to the crucial exchange of correspondence between the company and the Respondents in January 1994. On 12 January, Mrs Beswick, the General Manager, wrote to each Respondent in similar terms. The letter suggests that the Respondents were contractually obliged to accept the variations in working hours. That is now accepted to be an incorrect statement of the legal position. Each Respondent was asked to reconsider her position carefully and confirm by 31 January that she would work to the new rosters. The letter contains this warning:

"If you decide not to give such a commitment and not to work on the same basis as all other members of staff then, being mindful of the terms you accepted on joining the company, you will regrettably leave us with no alternative but to give you notice on that date to terminate your employment with the company."

To that letter each Respondent replied on 24 or 25 January, indicating that she would not accept the new terms and conditions imposed by the employer.

Miss Booth submits that that omission is highly significant. The letters give the lie to the Industrial Tribunal's finding in paragraph 16 that the Respondents should have been given more coherent and definitive personal and direct information as to the real options open to them. The position, says Miss Booth, was crystal clear on both sides. Taking those letters out of context we see the force of that submission. However, we are satisfied that in reaching their conclusion the Tribunal looked at all the circumstances including that exchange of correspondence and the oral evidence about it. We bear in mind their finding that the threat of disciplinary action contained in the letter of 23 December was accompanied by a softer line taken by Mrs Beswick in discussions with the Respondents and the Industrial Tribunal's reference in paragraph 14 to the Respondents being asked to provide copies of their contracts of employment. Mrs Bryan, in argument on behalf of the Respondents, has referred us to a letter from Mrs Beswick dated 31 January, asking Mrs Bryan to bring a copy of her contract to the final meeting on 31 January "so that we can consider its relevance".

That meeting was immediately followed by dismissal. It seems to us that the Tribunal was quite entitled on the facts of this case to reach the conclusion that the Appellant had done sufficient by way of consultation to dismiss when it did. Equally, it was a permissible option to find, looking at the overall picture presented by the evidence, that a reasonable employer would have delayed dismissal until it was satisfied that the employees could be under no illusions as to the outcome if they did not accept the new terms. In these circumstances we find ourselves unable to characterise this decision as perverse.

We are further satisfied that in approaching its task under Section 57(3) of the Act, this Tribunal did not fall into the trap of substituting its own view for that of the employer. It asked itself whether, at the date of dismissal, a reasonable employer would have behaved as this employer did. It answered that question in the negative, an option as we have said, which was open to it. Finally, Miss Booth referred us to this Appeal Tribunal's decision in St John of God (Care Services) Ltd v Brooks

[1992] ICR 715

. We have considered what was said in that case, but we do not find it directly helpful in relation to the issues raised in this appeal.

Questions of reasonableness under Section 57(3) of the Act are essentially matters of fact for the Industrial Tribunal. Our powers to interfere are limited to correcting errors of law. We are unable to identify any such error in this Tribunal's decision and accordingly the appeal must be dismissed.