North East Racing Group Ltd v Brennan [1997] UKEAT 323_97_1606

EAT
North East Racing Group Ltd v Brennan
[1997] UKEAT 323_97_1606 · 1997-06-16

JUDGE HULL QC:

The Appellant in this case, North East Racing Group Limited, employed Mr Brennan as a Manager in their betting shop business. He was first employed on 9 October 1993 by the Appellant's predecessors. He continued in the employment of North East Racing Group Ltd. The company found itself in financial difficulties; there were serious losses and it became necessary to cut down the business and to dispense with the service of certain employees.The decision was taken to dismiss Mr Brennan and he was in fact dismissed after consultation on 3 April 1996, the effective date of termination being on 27 April 1996. He complained of unfair selection for redundancy or unfair dismissal, and asked for reinstatement by his application on 5 July 1996. The Appellant, by its Notice of Appearance, was content to say that he had been fairly dismissed on the ground of redundancy.The Industrial Tribunal sat on 23 September and 9 October 1996 at Newcastle upon Tyne under the Chairmanship of Professor Elliott, with two Industrial Members. They published their decision on 14 January 1997, holding that Mr Brennan had indeed been unfairly dismissed. We must refer to their decision. They set out the facts. There was no doubt at all that there was a need for redundancies in the company. In fact, Mr Brennan was the highest paid of the managers by a relatively small amount. That, the Tribunal found, was largely due to the fact that he did overtime, with the consent of his employers, and weekend working.

(f) of their Extended Reasons that:

"The principal reason for the applicant's selection for redundancy (as the respondent has never denied) was that his dismissal would save it more money than would that of any other manager."
Then they say that at the meeting, which was the consultation between the parties:
"... The applicant made no suggestions either before or at that meeting; he thought the matter was cut and dried and at the meeting confined himself largely to discussing his severance package."
They discounted a suggestion that he should have accepted the job of a very much lower paid employee and they say that he had more service than a good many of the other managers. He was a successful manager and there was no disciplinary trouble involving him. They found that there was no adequate consultation with him and the actual selection of him was on a ground which the Tribunal could only hold to be unfair. They said that the subsidiary reasons for dismissal were slight and unconvincing and rested on beliefs which were not reasonably held by management. However, the main reason was that the Applicant was the highest paid individual. He was the highest paid because he was the most industrious and successful and his pay, in part, depended on management allowing him to earn a high level of extra pay. They felt that the reason for the selection of such a senior, successful man before others less senior, less successful, namely that he was such, was not the action of a reasonable employer, even one who was hard pressed to save on his wages bill; and therefore they found that the employer acted unreasonably.Today the case is in our list under our Practice Direction to see whether we can find a fairly arguable point of law upon which this appeal by the employers could reasonably proceed. We have a Skeleton Argument, for which of course we are grateful, to add to the Notice of Appeal. The argument tells us that the contentions of the employers are that there was fair consultation and they set out the facts of the consultation. As to that it was a question of course first and foremost for the employers to say what form consultation should take. But here the Tribunal found that that consultation was not in fact reasonable and fair. The question of the higher earnings of the employee and how that might perhaps be changed, was not discussed, and they thought that in the circumstances that was unfair. Then they addressed their minds to the true issue in the case, the most important one; was this within the range of responses of a reasonable employer in the circumstances? With regard to that, the Skeleton Argument quotes from Harvey on Industrial Relations and Employment Law :
"It is now well established that tribunals cannot substitute their own principles of selection for those of the employer. They can interfere only if the criteria adopted are such that no reasonable employer could have adopted them or applied them in the way in which the employer did ..."
It seems to us that that is exactly what this Industrial Tribunal did. They found that no rational employer, even in the very constrained circumstances here, could have adopted this method of selection and chosen their best employee because he was more highly paid, when they themselves had been responsible for allowing him to become the highest paid employee. So we are all satisfied that there is no fairly arguable point of law here and therefore the appeal must not be allowed to continue and we dismiss it at this stage.