Darlington Memorial Hospital NHS Trust v Edwards & Anor [1996] UKEAT 678_95_2907

EAT
Darlington Memorial Hospital NHS Trust v Edwards & Anor
[1996] UKEAT 678_95_2907 · 1996-07-29

JUDGE HULL QC:

This is an appeal to us by Darlington Memorial Hospital NHS Trust against a decision of the Industrial Tribunal sitting at Middlesbrough under the Chairmanship of Mr Sutcliffe, with two Industrial Members, on 7 and 8 February 1995. They found that each of the two Respondents to the appeal, both senior employees of the Hospital, had been unfairly dismissed by unfair selection for redundancy.The circumstances are as follows: Mr Edwards was one of the Estates Officers with the Hospital Trust. He is now aged 33. He is an officer in the Territorial Army. Mr Vincent is more senior in years, he is aged 49. He was junior in position, he was Maintenance Supervisor with the Hospital. Mr Edwards started with the Hospital on 1 June 1983. Mr Vincent started on 19 November 1984. They continued their employment there, as I say, holding responsible and important positions with the Hospital. Then there became a redundancy situation or an apparent redundancy situation with which the Industrial Tribunal was concerned.Putting it very shortly, a decision was taken under financial pressure to reduce by twelve the number of employees in the engineering section and to produce there four new posts, a Senior Supervisor and three Supervisor Planners. The Industrial Tribunal was told about that. Perhaps it is convenient first of all to refer to documents which we were shown which showed the situation. There was a long letter written by Mr Franks, the Assistant Director of Estates Technical & Operational Services, which is at page 43 of our bundle, to Mr Hunter who was the AUEW trade union officer concerned. We think it probably one of a number of letters because a number of unions were involved, but it is apparently a representative letter. Mr Franks wrote to Mr Hunter a friendly letter telling him in detail about the proposed restructuring. He said amongst other things:
"4) Supervisors & Planner Estimators:
It is my intention to fundamentally restructure the above posts, my initial intention was to operate with three Supervisor/Planners but in detailed consultation with the Engineering and Building Services Managers this has now been increased to four new posts.These new posts incorporate and combine certain elements of the existing Supervisor and Planner Estimator duties together with additional duties and responsibilities as detailed in the job descriptions. This enables a much more flexible arrangement than has otherwise existed between Building, Engineering and Planner Estimators."...As discussed, it is my professional view and that of the Engineering Services Manager and Building Manager that all staff selected for redeployment interview [the redundant people] meet the basic selection criteria - recognised building or engineering apprenticeship. Because of the changed role and responsibilities of these new posts I would emphasize again that specific trade expertise, technical skills or work study experience are not significant factors and that the selection criteria would be based:- 80% on assessment of inter-personal, team building, organisation and motivation skills with an element of production planning of a multi disciplinary work force.:- 10% on existing experience and background relative to Building and Engineering Services maintenance

:- 5% on specific technical expertise in each persons discipline

:- 5% on those factors which relate to Health Regulations and organisational procedures"At page 48 he gets a distinctly dusty reply from Mr Hunter dated 30 March 1994, who plainly puts in issue the good faith of the entire exercise. Mr Hunter writes:
"I also firmly believe it is not the action of a reasonable employer to, in the first instance, carry out a redundancy of its employees and then invite them under the guise of a new job description to apply for a similar post as to the one which they held for many years and include other personnel who have been nominated for redundancy within their group for interview for the four posts remaining of supervisor. This I believe is blatantly unfair to my member because I am of the opinion these supervisory posts are a guise in which you are offering as redeployment."
That, it seems, is plainly suggesting that this is a dressed up situation. It is not a case of four new posts at all. It is a case of just cutting down from twelve to four. If one likes, it is an answer which put the good faith of the exercise in issue. Was it a genuine redundancy at all? Was it a genuine offer of interviews for the new jobs? That was the first matter, and it apparently remained an issue for the Industrial Tribunal to look into. They set out in paragraphs 4 and 5 their findings about this. They set out much of what I have said. In paragraph 5, they said:
"It will be seen therefore that Mr Franks solved his problem [that was the pressure of the financial stringency] by combining Planners and Supervisors and reducing the management level above them whilst incorporating in the new sub-division that of grounds, gardens and buildings and their Supervisor posts. This resulted in the redundancies of all of the Supervisors and Estimators including Mr Vincent and also two Estate Officers including Mr Edwards who could not be found a place in the new management structure. In due course both applicants were given the opportunity of interviews for the new posts of a Senior Supervisor and three Supervisor/Planners neither was successful."
and so that was the situation.The first thing the Industrial Tribunal had to do was to decide whether this was a genuine exercise at all. Was there a real redundancy or was this a dressed-up exercise, in which the employers saved themselves money by simply ridding themselves of people by a convenient artifice? In a genuine redundancy situation then of course they would look to the employers to show fairness in various ways; but first of all, if there was a question of selecting employees for redundancy, there should be criteria for selection which were rational and which were rationally and fairly applied. That appears not to have arisen in the present case if there was a genuine redundancy, because all these twelve men were redundant. It was not a case of choosing between them apparently. Explaining that it was fair in that way the employer would of course be expected to consult the employees to see whether he had made a just placement and to discuss the matter with them. It might be that an employee could say, of course this is always possible, "truly I am not redundant" or "truly there is another job which is going in another department which I can do perfectly well"; in other words a particular employee or employees can be found other work of the same sort without the slightest difficulty. That and other purposes are purposes of consultation; to give as much warning as possible and if it is possible to redeploy people, to do so in a fair way.Having taken these steps, then of course if it remains apparent that there is redundancy, then the employer is entitled, on the face of it, to make people redundant. In this case that was apparently the situation. What was being offered was not slotting in or ring-fencing, or whatever one likes to call it, in jobs of the same sort, but what was on offer was the four new posts with different criteria. That was a matter therefore for the Tribunal to consider. First of all they went into this question, which I described as a question of good faith. As to the first point they were, after some consideration of recent authorities, agreed that both Applicants were genuinely redundant. As to the second, they did not fault the Trust as to consultation with both the individuals involved and the unions. Indeed, they refer to some exhibits, which show almost daily consultation throughout March and April and indeed until mid-May. They also accepted that as much warning as was possible was given. However, "we do not", they say, "take issue with the Trust as to the selection criteria and the application of such criteria and the consideration of alternative employment."Mr Carr says to us that "not" is a mistake. It does seem to us quite likely, if not very likely, that it is a mistake inserted there and then it would read "However, we do take issue with the Trust as to the selection criteria, the application of such criteria and the consideration of alternative employment."Then they go in paragraph 11:
"We take the view that it makes little difference in cases such as this whether the choice of staff for the new posts is part of the original selection for redundancy or an entirely different process. We say this because the choice of staff for new posts must, in any event, be fair and based on similar principles as selection for redundancy."
It does appear to us that that is a completely mistaken statement. If these are new posts with a different job description from anything which the various Applicants brought to them, then it seems to us that the employer is most certainly not under a duty to carry out something very like the exercise which he has to carry out in deciding who to select for redundancy. On the contrary, if he is to be allowed to manage his business, he must select as he thinks right. If he tells the employees that they will be allowed to apply for new jobs, as was manifestly the case here, then of course he will be required to carry out the exercise in good faith. If they are to be allowed to apply their applications must be considered properly. If the criteria are different from the old jobs so be it, that was part of the original occasion of redundancy; it was as much reorganisation as redundancy, although redundancy was the result. But to say that they are the same process and that it must be based on similar principles is quite simply, in our view, wrong. It may be, we are not going to decide this, that the duty goes beyond good faith, and it may be said that there is some sort of duty of care, but there it is, it is something which the employer has said he will do and he must do it. He must consider the Applicants.In this case we can see a record of what happened with regard to this, which is at page 41 of our bundle. The criteria for the new jobs are set out there. It is said, amongst other things, that the new post will require:
"... the necessary man-management skills to control a multidisciplinary workforce including those disciplines outside of his own speciality.
Must be willing and able to work as one of a group of planner/chargehands and be able to contribute to the continuous improvement and efficiency of that group.Must have a good understanding of Health & Safety Legislation and its application to their place of work.Must be able to communicate effectively with tradestaff and departmental managers..."These criteria for the new jobs appear to be entirely rational criteria for management positions of this sort, and indeed one would be surprised and we were surprised to see that they were questioned as being appropriate or suitable for this. They were to be marked by those who were carrying out the interviews and considering the questions and one can see the result of that at page 40, marks were allocated to the twelve men who were going; ten applied for these new posts. Mr Vincent came eighth, Mr Edwards came seventh, after they had been marked. Against those who came in the top four are marked either the word "Appoint" or "Re-interview for senior post". They were, on the face of it, rational criteria, and on the face of it, marked in accordance with the views of those who were carrying out the interviewing and considering the results. The Tribunal goes on:
"11 ... We take the view that in this case it was not. [That is the choice of new staff based on similar principles as selection for redundancy.] We have reached this conclusion because the appointments to the new posts appear to have been based almost entirely on the one-off performance of the candidates at short interviews with some very theoretical questions some concerned with the philosophy of the NHS reorganisation and Trusts. Bearing in mind that all the applicants were existing employees of and therefore well known to the Trust precious little regard appears to have been had to experience and background (10%) and technical expertise (57%) [Mr Carr says that should be 5%] (see exhibit 96) and none at all to such customary matters as length of service and sickness, attendance and disciplinary records."
No doubt it was right for the Tribunal to observe that these men would, for the most part, be well-known to the employers. That would no doubt influence their decisions. But to say that these criteria involved theoretical questions and that the appointments appear to have been based almost entirely on one-off performances by candidates leaves everything, with respect, in the air. Was this selection process or was it not conducted in good faith? No finding. Was it any affair of the Industrial Tribunal whether the questions and the criteria were properly selected or not? If they were to arbitrate on that, if they were to say whether these criteria were the proper criteria, they would have to be skilled indeed in management matters, so that they would feel confident to say that these criteria were obviously inappropriate, instead of which they merely "appeared to be very theoretical". With respect it is an extraordinary comment, when considering what a responsible employer has chosen as the criteria for significant, important, management positions.That paragraph, with great respect to this Tribunal, we find entirely unsatisfactory. It is not enough to say that something "appears". If they are going to make findings of fact, they must make findings of fact. The next paragraph is objectionable in the same way. They say:"12 Two further points are, first that the Trust may well have been prejudiced to some extent against both applicants in that Mr Vincent was a Magistrate and Mr Edwards a TA Officer so that both would have needed time off regularly for external duties."...Was the Trust prejudiced or was it not? To say it may well have been prejudiced is a comment which really ought not to be made judicially. If there is a suspicion of that, it should either be investigated and proved, or if not, then it must not form a part of their considerations. "Also the Trust appears to have taken an ambivalent view on the acceptance of volunteers." That seems, with all respect, to be a dark saying, but we have been led through the facts by Counsel and it appears that what happened (because we are not going to make any findings of fact here) was that there was a rule with regard to the acceptance of volunteers for redundancy, the trade unions insisted upon it, they asked the management to go further and management said they would not. If what we have been told about that is right, then the Tribunal appears to be mistaken or muddled themselves here. (As I say, we are not going to reach any findings about that.) If the Tribunal were going to say that that is another ground, with the suspicion of prejudice, for saying that this was unfair, then they should have made a finding about that too. What Mr Carr says about this, for the Respondents, is that really paragraph 12 is beside the point. It did not form a ground of their decision.They finish up at paragraph 13 saying:
"Our conclusion, therefore, on the facts as found by the Tribunal, is that both applicants were unfairly dismissed by way of unfair selection for redundancy."
As we say, we find that, in the ways which we have indicated, unsatisfactory as a matter of law. First of all the Tribunal were in our view quite wrong to say that the criteria for selection for the new posts had to be substantially the same or similar to those of the selection for redundancy. It seems to us they were in a muddle there. On the face of it, it is for the employer and the employer alone, acting in good faith of course, to say what the criteria are for new posts. We say that it was muddled to confuse the two and it seems to us that the Tribunal ought not to have made the remarks in paragraph 12; if they were not intending to make those any grounds of their decision or if they were going to make those observations in passing, they should have made it perfectly clear that those were not part of their decision. I should perhaps have said that the Appellants object to that paragraph, not merely because there are no clear findings, but because they had, they say, no opportunity to deal with it and once again it seems that that is probably the position.The ground of our decision is that this Tribunal seem to have adopted a quite wrong view with regard to the criteria for selection, which they criticised for the way in which they were applied. They did not at any stage here say "what we have to do is to consider whether in these various actions of the employers, they acted within the range of ways in which a reasonable employer might act in all the circumstances". There is a very strong impression here given to us that this Tribunal was forgetting that what it had to do was not to put itself in the place of the employers and decide for itself whether what was done was reasonable and fair. What it had to do was in essence to review what the employers did and to say to itself: was that within the range of responses of a reasonable employer?However, on the grounds which we have mentioned, it appears to us that this decision does not tell the employers how they came to lose the case, or at any rate, if it does so, shows that the Tribunal's grounds were unsatisfactory. We think that the just order to make is that this matter should be remitted for the decision of an Industrial Tribunal differently constituted. That will mean of course that a great many other details which were argued in front of us will probably not arise at all, and no doubt with the assistance which they can receive from Counsel, the parties will conduct the case and the Tribunal will decide the case in a way which gives proper effect to the law. What the result will be we will not presume to guess, and in those circumstances the case will simply be remitted. That is the decision of us all.