Hull & Ors v Hoesch Woodhead Ltd [1996] UKEAT 688_94_0702

EAT

Hull & Ors v Hoesch Woodhead Ltd

[1996] UKEAT 688_94_0702 · 1996-01-17

JUDGE SMITH Q.C. :

This is an appeal by seven applicants from the decision of an Industrial Tribunal sitting at Middlesborough on 2nd June 1994 when the Industrial Tribunal decided that none of the applicants had been unfairly dismissed by reason of redundancy. The Industrial Tribunal held also that Mr Hughes and Mr Nicholson were not dismissed by reason of trade union membership or activity.

Before turning to the submissions of Counsel which have been made to us in relation to this appeal it is necessary for us to state the background very shortly.

The Respondent employer is a manufacturer of suspension components, for use primarily in the car industry. They operate a site at Aycliffe in the north-east of England at which 270 employees were employed, 205 of them being hourly paid. Towards the end of 1992, a decision was taken to transfer work on one of the major products produced at Aycliffe, known as "leaf springs", from Aycliffe to another factory operated by the Respondent in Leeds. The decision was announced on 6th January 1993.

Consequent upon that decision there were a number of redundancies planned and the seven Appellants were ultimately dismissed as part of a programme involving altogether the loss of over 100 jobs. The A.E.E.U. was the recognised Trade Union for collective bargaining purposes and it is quite clear from the documents that an extensive series of meetings called External Conferences were held between management and the Union, commencing on 7th January 1993. In our judgment it is a feature of this case namely the extent to which great care was taken on both sides, both on the management side and on the Union side to conduct these lengthy and detailed negotiations in a very constructive manner. Indeed it is common ground between the parties that although no formal agreement was reached between management and the Union that extensive consultation took place from which ultimately emerged management's selection procedure for redundancy which is to be found at pages 139 and 140 in the bundle. It is clear from page 140 that there were in all six criteria which were to be applied in the selection procedure, two of which are properly described as objective criteria, namely the criteria entitled Absence and the criterion entitled Service, whilst the remaining four criteria can properly be characterised as being subjective, namely Adaptability, Application, Co-operation, and Experience. In the usual way each of the factors was given a certain number and differing weight priorities were given to each of the criteria as can be seen from page 143 of the bundle. As is apparent from the contemporary documentation and the findings of the Industrial Tribunal, the assessments were initially to be carried out by the appropriate foremen. There was then a review by the production manager and then finally the matter went on to the personnel officer who having looked at the matter reviewed the matter in the round to ensure that all proper steps had been carried out would then rubber-stamp the ultimate assessment. There was a procedure in relation to appeals against assessments which went first of all to the general manager and then by further appeal to the personnel manager. We agree with Counsel for the Respondent that there was an elaborate system of checks and balances in relation to this particular procedure. As is also clear from the documents and also from the findings of the Industrial Tribunal it is plain that the Respondent employers had the possibility of bias in mind and laid down five components which those responsible for the assessments were required to have in their minds relating to the matter of bias, namely the matters of sex, race, colour, trade union membership, and creed.

From the contemporary documents there can be seen at pages 162 and 170 a table of the employees' assessment scores and between pages 171 and 228 are the particular documents that relate to the assessment and the appeals of these seven applicants. It is of importance to note in the context of the grounds of appeal argued before us today that at page 191 the applicant/appellant Mr Howell raised in the course of his appeal hearing an allegation that another named employee who had been assessed had benefitted in some way from being assessed by a family relation. In a similar vein the appellant, Mr Ross, at page 216 of the bundle raised a similar point in relation to a fellow employee to the effect that he had been assessed by his father-in-law. It is right to say that the other appellants did not on the face of the documents appear to be raising an issue of bias. However, it is clear both from the originating applications and also from the arguments that were presented on behalf of the applicants before the Industrial Tribunal that the point was being taken on behalf of all the applicants that there had been bias arising from family relationships which had adversely affected their results in the assessment procedures. In consequence of this allegation it is apparent as was explained to us by Counsel for the appellants that Mr Hunter, the Union official representing the appellants before the Industrial Tribunal, had sought assessment forms in relation to selected employees other than the appellants and had been provided by the respondents before the Industrial Tribunal hearing with the assessments of such selected employees as can be seen from the contemporary bundle between pages 229 and 243. It is common ground between the parties that these documents to which we have just referred were before the Industrial Tribunal and that in addition the respondents' witnesses were cross-examined by Mr Hunter as to the allegations of bias.

After their initial selection for redundancy the appellants all appealed against the decision which had been taken with regard to them and which were to the effect that they would be dismissed. In most cases as is apparent from the documents their scores went up on appeal but not by a sufficient amount to reach the threshold for survival of 1,230 points.

The appellants came to be dismissed. The effective dates of the termination of their contracts varied between 25th June 1993 and 23rd September 1993, with the majority of the appellants being dismissed on 27th August 1993.

It was in those circumstances that the matter came before the Industrial Tribunal and of course the principal matter which the Industrial Tribunal had to decide was whether the system of selection which the employer respondents had set up amounted to a system of selection which could reasonably be described as fair and, secondly, whether it had been fairly and reasonably administered. Before dealing specifically with the issues raised on this appeal we consider it proper to remind ourselves of the principle laid down by the Court of Appeal recently in the decision of British Aerospace plc v Green & Others

[1995] IRLR 433

and in particular, the statement of principle set out by Waite LJ. giving the leading judgment in that case at page 437. Namely:

"The whole tenor of the authorities to which I have already referred is to show, in both England and Scotland, the courts and tribunals (with substantial contribution from the lay membership of the latter) moving towards a clear recognition that if a graded assessment system is to achieve its purpose it must not be subjected to an over minute analysis that applies both at the stage when the system is being actually applied, and also at any later stage when its operation is being called into question before an Industrial Tribunal. To allow otherwise would involve a serious risk that the system itself would lose the respect with which it is at present regarded on both sides of industry and that tribunal hearings would become hopelessly protracted."

We consider that to be an important principle to bear in mind when looking at the approach of the Industrial Tribunal in this case.

We deal firstly with the submission to us that the Industrial Tribunal misdirected themselves with regard to the issue of bias. It was the submission of Counsel for the appellants that the Industrial Tribunal had misdirected themselves in relation to the burden of proof and perhaps because they had so mis-directed themselves had failed to focus on the proper question which they had to ask themselves, namely whether the system of assessment had been operated fairly in the light of the allegations of bias made by Mr Hunter on behalf of the applicants as set out in paragraph 25 of the decision. In the submission of Counsel for the appellants, the Industrial Tribunal's findings in relation to this allegation were, as he submitted, demonstrably flawed by reason of the fact that the Industrial Tribunal had limited their findings to the assessments of the applicants, whereas it was his submission, that they should have made express findings as to whether or not the comparators had in fact been over marked by reason of bias. Thus he relied particularly on the words in paragraph 23 of the decision:

"... we think it had not been shown that there was conscious or unconscious discrimination in favour of family members by the assessors. Many of these applicants were viewed and reviewed in their assessments by more than one person not related by marriage and we think it therefore unlikely that it truly is the situation, and on balance we find it not proven, that there was management favouritism of such a kind as to patently show that these assessments are to be criticised and be declared unfair, inaccurate and unreasonable."

He relied upon those passages as demonstrating in his submission first that the Industrial Tribunal had misapplied the burden of proof, and secondly, that they had concentrated exclusively on the position of the applicants, whereas they should have concentrated, so he submitted on the position with regard to the comparators. Counsel for the respondents submitted that this was a pedantic and artificial submission, since he submits it is apparent on a plain reading of paragraph 23 that the Industrial Tribunal were not considering the position of the appellants assessments in isolation from the evidence which they had in front of them in relation to the comparators assessments. He submits these are but two sides of the same coin, since in marking another employee up you may still be showing bias against the person who gets lesser marks. He submitted that it is apparent that the Industrial Tribunal considered the totality of the evidence before them in arriving at its conclusions in paragraph 23 and he reminds us that the Industrial Tribunal had before them the forms of the other employees as contained in the bundle at pages 229 to 243 and in addition, they had the evidence arising on cross-examination of the respondents' witnesses. With regard to the burden of proof he submits that it is apparent that the Industrial Tribunal were not in fact misapplying the burden of proof but were simply referring to an evidential burden of proof which lay upon those who were asserting bias to establish it on the evidence. We are wholly satisfied on a proper and fair reading of paragraph 23 that the Industrial Tribunal did deal adequately with the allegations of bias which they had to consider and did reach proper and fair conclusions in relation to such allegations. In our judgment, it is artificial to construe paragraph 23 as having the effect that the Industrial Tribunal looked exclusively at the position of the applicants. Further, we are satisfied that the Industrial Tribunal did not misapply the burden of proof, and we accept Counsel for the respondents' submission that what the Industrial Tribunal said was consistent with their correct application of the evidential burden of proof. Accordingly we reject the first submission made to us by Counsel for the appellants.

The second submission made by Counsel for the appellants was that the Industrial Tribunal had allowed itself to be side-tracked in relation to irrelevant matters. The submission was made to us that the Industrial Tribunal was wrong in concluding that there had been an agreement reached between the unions and management as to the redundancy selection exercise. It was pointed out to us that there was no need for the Industrial Tribunal to reach such a conclusion in any event because the only requirement upon an employer, is to consult with the relevant trade union, not necessarily to reach an agreement with the trade union. Thus it is submitted to us that the Industrial Tribunal decided something which they did not need to decide and in so deciding it got it wrong. Counsel for the respondent, on the other hand, submitted to us that on a proper and fair reading of the Industrial Tribunal's decision they were not saying that there was an agreement in any formal sense. They were simply saying that there had been a lot of consultation between the parties and that both sides and in particular or course the employees side had commented on and had their input in to the criteria which were eventually established as being the criteria to be used in the exercise. We are wholly satisfied that Counsel for the respondents characterisation of the Industrial Tribunal's finding is the correct one and they are not to be criticised in relation to their findings on this particular matter.

The next submission relied upon by Counsel for the appellants related to the presence or absence of a weighting factor in relation to the second of the two objective criteria of selection, namely Absence. It was Counsel for the appellants submission that the findings of the Industrial Tribunal in paragraph 21 of the decision, where they dealt with this aspect of the matter, amounted to a clear finding that this particular criterion of selection was inherently unfair to those who had two years service or more by reason of the fact that those who had less than two years service were able to achieve a full mark of 25 x 14 namely 350 points despite their short period of employment. He submitted that, having found this to be unfair in the absence of any scaling down or factoring, the Industrial Tribunal then dealt with the matter in this way.

"It has quite properly been attacked by the applicants, but it applied to everybody and across the board in its application. We have reservations as to this factor. We cannot go further however."

Counsel was strongly critical of this reasoning of the Industrial Tribunal and submitted that if it were generally unfair to favour those with short service and if such general unfairness results in employees of short service leap-frogging those of longer service and as a consequence those of longer service are dismissed, it is hardly an answer to say that the general unfairness is negated by reason of the fact that all employees faced the same potential unfairness. He pointed out that the appellant, Mr Robson, was only 100 points behind another employee who was one of the short service employees of whom there were five altogether, and that if five individuals dropped down by reason of achieving a lower score on the service criterion then it is possible that one or more of the applicants might have kept his job. Accordingly, he submitted that having found this particular criterion to be unfair for the reasons given the Industrial Tribunal should have gone on to find that in this respect at any rate the system of selection was unfair and should have found the dismissal to be unfair on that basis alone. Mr Brown, Counsel for the respondents firstly pointed out the difficulty that the employers were faced with in achieving overall fairness with regard to the Absence and Service criteria respectively, and pointed out to us that those who had less than two years service achieved no points under the Service criteria, and thus were they to be factored in relation to the Absence criterion by reason of their short service they would in effect be penalised twice. Counsel pointed out that the establishment of these criteria was a tricky exercise in order to achieve a broad fairness, and he also pointed out that there had been no criticism of the Absence criterion in the External Conferences where careful consideration was given by both sides to the criteria to be established. It was his submission to us that paragraph 21 of the Industrial Tribunal's decision when read together with paragraph 26 of the decision makes it quite clear that in paragraph 21 the Industrial Tribunal were saying no more than that there were imperfections in the criteria in the sense that they did not ensure complete fairness to everybody involved in the exercise. But he submitted that at that stage in their decision, namely in paragraph 21, the Industrial Tribunal were doing no more than noting that unfairness in a laymen's sense as a marker along the way before they got to consider the vital question for them in paragraph 26 of the decision namely whether the system of selection could reasonably be described as being broadly fair when looked at as a whole. Counsel for the Respondents relies particularly on what the Industrial Tribunal say in paragraph 26 of their decision, namely:

"Unanimously, we hold that there was an agreement made between union and respondent and it was followed. Its general principles were fair. There are some lapses from perfection but they are not sufficient to warrant a finding that this is an exercise rendering all these dismissal unfair."

Counsel for the respondents submits that it is quite apparent from that passage that the Industrial Tribunal had in mind the earlier reservations which it had expressed in paragraph 21 relating to the Absence criterion. In our judgment, Counsel for the respondents is correct in submitting to us that paragraph 21 and paragraph 26 should be read together and when that exercise is carried out it is clear that it was only in paragraph 26 that the Industrial Tribunal were applying the test under Section 57(3), whereas in paragraph 21 they were doing no more than noting the unfairness which the Absence criterion could work in relation to those employees who had two years service or more. At that stage, in our judgment, it is apparent that they were not concerned with looking at the whole scheme and system of selection broadly in order to decide whether it was fair when viewed overall. It was only in paragraph 26 that they came to make that appraisal, and in our judgment this ground of appeal fails.

The next and final submission made by Counsel for the appellants was that the Industrial Tribunal erred in relation to a finding of fact it made when considering the issue of whether the respondents had acted reasonably in relation to its obligation to do its best to find reasonable alternative employment for those whom it was making redundant. The particular finding of fact which Counsel for the appellants sought to impugn is to be found in paragraph 19 of the Industrial Tribunal's decision and is in these terms:

"We find that at all material times up to and including the effective date of termination of employment of all these applicants that there were no vacancies at Leeds to which any of them could be offered, let alone be properly considered."

Counsel for the appellants drew to our attention the document at page 161 of the bundle dated 16th June 1993 which is a plant notice. The opening paragraph of which reads as follows:

"Further to my notice dated 18th May 1993 regarding the above subject, we have now been informed that our Leeds plant have a number of vacancies for machine operators."

It was his submission that in the light of that document the Industrial Tribunal had reached a finding that was perverse in the sense that it was contrary to the evidence. However, in our judgment, the Industrial Tribunal were entitled to make this finding on the evidence before them. As appears at page 75 in the bundle from the Notes of Evidence submitted by the Chairman, it is apparent that Mr Robinson in cross-examination said in terms that recruitment at Leeds or for Leeds took place in November 1993 and that further in re-examination Mr Robinson reiterated in that "regarding Leeds, when vacancies had occurred, these applicants had left our employment already." In our judgment the Industrial Tribunal were entitled to accept this evidence given in cross-examination and re-examination by Mr Robinson as being the evidence upon which they based their finding as set out above. In our judgment, there was material before the Industrial Tribunal which indicated that the situation with regards to job opportunities at Leeds was fluctuating from time to time, and the Industrial Tribunal were, in our judgment, entitled to conclude on the evidence of Mr Robinson that in fact there were no recruitment opportunities at Leeds until November 1993, by which time it is common ground that all the appellants had been dismissed. It is of course well established that job vacancies arising after the date of termination are not relevant. See Octavious Atkinson v Morris

[1988] IRLR 158

. Accordingly in our judgment, this ground of appeal also fails.

It is always of course most unfortunate in the field of industrial relations that this kind of redundancy exercise has to be carried out at all, and this case is no exception. We have every sympathy for the appellants who were unfortunate enough to be selected for redundancy. But in our judgment for the reasons we have stated above, the Industrial Tribunal were justified, in what we regard as being a careful decision, in reaching the conclusions that they did and accordingly we must dismiss these appeals.