Witheridge v Sun Alliance & London Insurance Plc [1997] UKEAT 144_96_0602

EAT
Witheridge v Sun Alliance & London Insurance Plc
[1997] UKEAT 144_96_0602 · 1997-02-06

JUDGE PETER CLARK :

We have before us two appeals by Mrs Witheridge, the Applicant before the Industrial Tribunal who complained of unfair dismissal by her former employer, Sun Alliance and London Insurance Plc.(1) Against a decision of the full Industrial chaired by Mr I.A. Edwards, sitting at Brighton on 16, 18, 19, 20 October and 29 November 1995, dismissing her complaint. Extended Reasons for that decision are dated 21 December 1995 ("The substantive appeal").(2) Against a decision of the Chairman sitting alone on 4 April 1996, that the Applicant should pay the sum of £1,000 towards the Respondent's costs. Extended Reasons for that decision are dated 25 April 1996 ("The Costs Appeal").Applications for review of both the substantive and costs decisions were made by the Applicant. Each was dismissed by the Chairman. There is no appeal against either review decision.

The Pleaded Cases

Before considering the substantive appeal it is instructive to look at how the parties' cases were set out in the pleadings before the Industrial Tribunal.In her Originating Application presented on 22 March 1995 the Applicant, who was represented throughout the Tribunal proceedings by Mr McAleer, General Secretary of her Trade Union, the Sun Alliance Staff Union, complained of:

" - Unfair selection for redundancy

- Unfair Dismissal"

It was common ground that she had been employed by the Respondent from 1986 until her dismissal effective 31 January 1995.In setting out the details of her complaint she said this:
"It is the view of both my union and myself that I have been made redundant when a redundancy situation did not exist. Even if this was not the case my selection for redundancy was not in line with my employer's redundancy and redeployment policies.
I believe that a redundancy was created specifically to provide an opportunity to dismiss me on the 12/8/94. I was not offered alternative work for which I was well qualified and suited, nor, even, was I offered my own job which still existed albeit at a lower grade, as a few responsibilities had been removed. The decision not to offer my own job to me was made ultimately on the grounds of suitability even though I had always been advised both verbally and in writing that it was due to reorganisation, and that appeals against Performance Assessments for 1992 and 1993 were still outstanding."On 30 March 1995 the Respondent entered a Notice of Appearance completed by its Group Personnel Manager. It gave one reason for dismissal, redundancy, and denied that the dismissal was unfair.Thereafter the conduct of the Respondent's case was taken over by experienced Solicitors, Messrs Lawford & Co. On 9 October 1995 the Respondent's Solicitors wrote to the Industrial Tribunal in these terms:
"We refer to the IT3 submitted in this case by our clients.
We have now had the opportunity to prepare detailed witness statements for the hearing in this case. In the circumstances we are writing to apply for leave to amend the IT3 by adding a further paragraph, as follows:-'Alternatively, the Applicant was dismissed for some other substantive reason in that following reorganisation of the Brighton Centre at which she worked, her job disappeared and was replaced with a lower graded job, in view of her recent poor appraisements, disciplinary record and attitude the Respondent decided that it was inappropriate to allow her to continue in the new post. After attempts to redeploy her were unsuccessful, the Respondent had no alternative but to terminate her employment. She was paid a generous severance payment calculated in accordance with the Respondent's Redeployment and Redundancy Procedure'."Thus on the face of the pleadings there was an issue before the Tribunal as to whether the reason for dismissal was redundancy, and if not (on the Respondent's case) whether it was for some other substantial reason.We pause to observe that where the reason relied upon by the employer is redundancy a mistaken but genuine belief in that reason precludes him from relying upon it as the reason for dismissal Hindle v Percival Boats Ltd [1969] 1 AER 836.In the absence of a prescribed reason being established by the employer the dismissal will be unfair. Questions of reasonableness under what was Section 57(3) of The Employment Protection (Consolidation) Act 1978 do not arise in those circumstances. However, the label which the employer attaches to the set of facts which constitute the reason for dismissal at the time of dismissal does not bind him. Abernethy v Mott Hat & Anderson [1974] ICR 323. Hence the prudent adviser, as in this case, may advance the alternative reason for dismissal of some other substantial reason where there is any doubt as to whether the facts truly give rise to a redundancy dismissal.What is clear is that where the primary reason relied upon is redundancy it will be for the Tribunal, where that reason is in dispute, to consider carefully whether the facts of the case fall within the statutory definition of redundancy, and spell out the facts found which lead them to that conclusion. Elliott v University Computing Co (Great Britain) Ltd [1977] ICR 147, 152A.

The Substantive Decision

After hearing some five days of evidence, and considering a bundle of documents running to more than 400 pages, the Tribunal dealt with the reason for dismissal quite shortly. At paragraphs 4 to 9 of their Extended Reasons they say this:
"4. We first of all had to ascertain what the reason for the dismissal was.
5. It is quite clearly redundancy, since the Applicant herself, during the course of her evidence, admitted that her post as a G4 had gone. The only issue therefore was whether this was a genuine redundancy, or, as the Applicant has put it, a 'contrived' or 'engineered' redundancy.6. The original re-organisation plan was put to the organisation and systems committee (a joint management and union committee) in March 1994. Mr Jones, the manager of operations based at Horsham, away from Brighton where the applicant was based, gave evidence to us about the plan. It was a nationwide plan covering not only the Brighton office, but three other offices as well. We are satisfied that it was instigated at a level above that of the management at Brighton. At the meetings of the organisation and systems committee in March, May and July of 1994, the Union did not complain that this was an engineered situation in order to oust the Applicant.7. It was only in the September 1994 meeting that the union suggested (on page 362 of the bundle R1) that the downgrading from G4 to G3 meant that the job itself was not redundant. There was no suggestion even then that the exercise as a whole was engineered in order to exclude the Applicant.8. To argue that this nationwide reorganisation of four offices was brought in by the Respondents with the sole purpose of getting rid of someone whom the local management at Brighton perceived as a troublemaker stretches the imagination too far.9. We are therefore satisfied that the reason was redundancy, as is conceded by the Applicant, and that it was a genuine redundancy."Mr Galbraith-Marten, on behalf of the Applicant, attacks that reasoning and finding by the Industrial Tribunal on two grounds. It is convenient to consider each separately.First he submits that the Tribunal has misunderstood what it was that was being conceded by and on behalf of the Applicant, and further that the Industrial Tribunal misapplied the statutory definition of redundancy to the facts.What was conceded was that the Applicant's post as a grade G4 Personnel and Administration Head at the Brighton office had gone. That fact was not in dispute. Nor was it disputed that a new G3 post was created. Some of the Applicant's former duties in the G4 post had been re-allocated to form part of a new G5 post, and the remainder stayed with the new G3 post.Did that concession amount to a concession that the reason for dismissal was redundancy, as the Tribunal concluded in paragraph 9 of the reasons? In our judgment it did not, either in fact or in law.Mr Hows, who appeared below, submits that before the Tribunal it was argued by Mr McAleer in his written closing submissions that this was an "engineered" redundancy, not that the reason for dismissal did not amount to redundancy. That is not how we read the submissions, which follow the point taken by the union at the meeting held in September 1994, and referred to at paragraph 7 of the Reasons. The minutes of that meeting read, so far as material:
"Management had selected a G4 [the Applicant] for redundancy whose job had merely been downgraded to G3 and who was not therefore redundant."
Further, that was the case pleaded in the Originating Application as we have earlier observed.We should also refer to two passages in Mr McAleer's written closing submissions to the Industrial Tribunal. He said, among other things:
"In these circumstances the Union complained that this was not a genuine redundancy but was in fact engineered to get rid of Mrs Witheridge. Apart from a volunteer in Glasgow, Mrs Witheridge was the only casualty arising from this change from within four large centres employing over 450 staff. The total number of jobs, however, remained unchanged.

Genuine Redundancy

Mrs Witheridge was the sole casualty of a reorganisation that involved a large number of staff. At Brighton others were protected by being given personal grades. No one else was refused a job placement, and the total number of jobs did not reduce. Brighton's ever changing structure would have allowed this dismissal to have been avoided but it was not. It is the view of the applicant that this situation in Brighton was engineered to get rid of her. It is suggested that this was not therefore a genuine redundancy albeit that one job disappeared to be replaced by another smaller version of itself."Finally, we should refer to the written closing submissions presented by Mr Hows to the Industrial Tribunal. We quote:

"1. First question for IT - what is reason for dismissal? (S57(1) EPCA)

onus on R.R's case - redundancy - admitted by A's representative that G4 job replaced by G3.

Cowan v Haden Ltd [1983] ICR

Alternatively - some other substantial reason - viz the reorganisation of the Brighton Centre."It seems to us, taking all those matters into account, that the true reason for dismissal remained very much a live issue for proper determination by the Industrial Tribunal at the close of the evidence and speeches.It is clear to us that the Applicant's case was, first, that as a matter of law the facts did not disclose a redundancy dismissal within the definition contained in what was Section 81(2)(b) of the 1978 Act, but even if it did, the "redundancy" was engineered to get rid of a troublesome employee.Secondly, the law. Mr Hows submitted before the Tribunal and before us that on the authority of Cowan v Haden Ltd [1983] ICR 1, where there is a cessation or diminution of the work required in a particular grade of job then dismissal for that reason is a dismissal by reason of redundancy within the meaning of Section 81(2)(b).Two members of this Appeal Tribunal have recently had occasion to consider the true state of the law in relation to the question, what is redundancy? Safeway Stores Plc v Burrell (EAT 168/96) unreported. We have provided a copy of the transcript of our judgment in that case to the parties, and invited submissions on it.We cannot accept Mr Hows' submission, for the reasons given more fully in Safeway . In our view the correct analysis in this case is as follows. If work of the particular kind done by the Applicant and other employees in the Brighton Office was redistributed amongst existing members of staff, and the Applicant was dismissed because all the duties of her G4 job had been so reallocated, then her dismissal was by reason of redundancy. However, if a new post is created, so that following the Applicant's departure the same work is being done by the same number of employees as before, then there is no redundancy.Which of those factual situations, or indeed, any other factual situations applied in this case, we cannot say in the absence of any detailed analysis of the facts and application of the law to that factual analysis by the Industrial Tribunal. This is Mr Galbraith-Marten's second point; that the Tribunal made inadequate findings. Meek v City of Birmingham District Council [1987] IRLR 250 . The reason for that state of affairs is, in our judgment, that the Tribunal erroneously equated the Applicant's concession as to the fact that the G4 post had gone, and that the lesser G3 post had been created, with a concession that the reason for dismissal was redundancy. The one does not follow from the other. This is clear from the way in which the case was argued throughout.Having found that the reason for dismissal was redundancy, the Tribunal then approached the question of reasonableness on that basis. Whether they would have reached the same conclusion had they found that the reason was some other substantial reason, the Respondent's alternative case, we cannot say with certainty. Mr Hows submits that such a conclusion is inevitable; we cannot go that far with him.Accordingly we reject his submission that we should, if necessary, affirm the Tribunal's decision on the alternative ground that the reason for dismissal was some other substantial reason, and that it was fair for the reasons given by the Industrial Tribunal. The Tribunal simply did not make an alternative finding in the course of their reasons.In our view Mr Galbraith-Marten is correct in submitting that the proper course is to remit the case to a fresh Industrial Tribunal for rehearing. At the next hearing it will be for the new Tribunal to decide what was the reason for dismissal, and if a prescribed reason is established to consider the question of reasonableness.We shall therefore allow the appeal and direct a rehearing before a fresh Tribunal.

The Costs Appeal

Following promulgation of the Tribunal's reasons in the substantive decision, the Respondent's Solicitors applied for costs by a letter dated 24 January 1996. They contended that the Applicant ought to pay the costs of two and a half days of the Tribunal hearing on three grounds.(1) Both the Applicant and the Applicant's representatives conceded during the hearing that she was redundant, the concession should have been made before the hearing.(2) The allegations of bullying which the Tribunal rejected, were spurious and it was unreasonable of the Applicant and her representative to have pursued this issue at such length.(3) As the Tribunal have found in paragraph 36 of the substantive decision, much of the hearing was taken up by the Applicant's attempts to reopen internal appeals relating to her appraisal which had nothing to do with her dismissal by reason of redundancy. In his Extended Reasons dated 4 April 1996, following a hearing before the Chairman sitting alone, he awarded £1,000 costs and his reasons for that award are contained in paragraph 4 of those reasons where he said:
"4. I am satisfied that the Applicant in conducting the proceedings did act unreasonably. Although the Applicant did use witness statements in order to limit somewhat the length of the hearing, the proceedings were unnecessarily lengthened because she did not, at the outset, concede that her position was redundant, and she also unreasonably prolonged the cross-examination about her appraisals."
Thus the Chairman accepted grounds 1 and 3 of the Respondent's Solicitor's letter of application for costs.In the light of our decision in the substantive appeal, Mr Galbraith-Marten invites us to overturn the costs order made by the Chairman in toto . His first submission is that, in the light of our ruling in the substantive appeal, the costs order simply cannot stand.Secondly, he says that so far as the award itself is concerned, it is quite impossible to apportion between the two grounds on which costs were awarded. That is to say, the failure to make the concession that she was redundant before the start of the proceedings and secondly, the question of cross-examination about appraisals. In any event, as to the first ground in the light of our specific findings in the substantive appeal, that cannot stand and Mr Hows does not contest that proposition.Thirdly, he says that so far as the cross-examination about appraisals is concerned, this is tied up with the allegation of bullying and in the substantive decision at paragraph 27 he points to the Tribunal's conclusion that, as Mr Hows suggested, if the Tribunal found that the redundancy was genuine, then the bullying was irrelevant.It seems to us that the domino effect (as it is put by Mr Galbraith-Marten in submission) is the right way to look at this appeal. Mr Hows has sought to preserve part of the order on the basis of the prolonged cross-examination finding. But it seems to us that all these matters are inextricably linked. It is quite impossible for us to apportion between the two reasons given for the total award of £1,000 and further, we do not think it appropriate to let the costs order stand in circumstances where we have allowed the substantive appeal and ordered the whole matter to be reheard.In these circumstances we shall also allow the costs appeal and set aside that order.