Ward v Midland Bank Plc [1997] UKEAT 829_96_2710
[1]Length of service on the basis of continuous service not cumulative.[2]Age[3]Capability and Performance[4]Qualifications and experience[5]Conduct[6]Attendance Record[7]Time-keeping (Note: The above list is not exhaustive and other factors may be appropriate dependent on the circumstances. The above factors are not in any particular order of priority. When applications have previously been invited under Clauses 20 and 24 and individuals have not been selected they shall again be considered under the arrangements set out in this Appendix). (iv) The above order may be varied in the light of the particular circumstances and is subject to the right of the Bank to retain staff on grounds of individual ability or specialist knowledge..." It seems to us clear that age and length of service were not factors which the Bank were contractually entitled to ignore in a redundancy situation such as occurred. At the highest for the Bank it could be said that an employee was not entitled to the application to him of only the specified criteria [ "the above list is not exhaustive and other factors may be appropriate..."]; and, second, that the factors which are not weighted might be applied to him in a different order from that set out in Appendix III [ "the above factors are not in any particular order of priority"]. The Bank's submission that age and length of service could be deleted from the list because the listed factors were not exhaustive would, if correct, emasculate the obvious intention of the parties which was to specify certain factors of which account would always be taken, whilst preserving the employers' right to weigh them and to add others if needs be. The Bank insisted before us that they regarded this agreement as contractual, on the one hand; yet they appear to us to be seeking to deny it any effect, on the other. Although the Bank had had certain discussions with the recognised Union before the redundancy exercise, it is not suggested that the Union had agreed to any alteration to the agreement or to the addition of other factors or to a re-ordering of the ones listed. It seems to us, therefore, that the real question on the appeal is whether the Industrial Tribunal, when answering the hypothetical Polkey question, have properly taken account of Mr Ward's contractual entitlement to have his age and length of service considered, when he was being selected for redundancy. And underlying this question, is the underlying principle that in every case where compensation is being awarded, the Industrial Tribunal must award what is just and equitable in all the circumstances. The Polkey reduction exercise is part of the process designed to produce fairness, and not the opposite. There may be cases where the conduct of a particular employer is so grossly unfair that it would be neither sensible nor fair to ask what would have happened had they acted fairly. The facts might suggest that the employers were organisationally incapable of acting fairly; or had so organised their procedures that no employee would ever be treated with the fairness and respect that was deserved. In this case, the Bank had determined that it would not consult because consultation was, as we understand it, regarded as an impediment to the achievement of the re-organisation. This was, as the Tribunal imply, a bad and obvious case of unfairness. We would not, however, have allowed the appeal on this ground alone. In our judgment there is considerable force in the submissions made by Mrs Ward about the Bank's failure to honour the contractual procedure and the Tribunal's failure to take that into account when assessing the Polkey reduction question. It seems to us that the Industrial Tribunal have failed to carry out a proper analysis of the Security of Employment Agreement. With great respect to them, it is not sufficient to refer to the criteria, and comment that the specified criteria are those "which would normally [our emphasis] be adhered to in a redundancy exercise". Had the Bank been willing to consult, Mr Ward would have been able to argue that they were departing from agreed criteria, that if the agreed criteria were applied he would not be selected for redundancy; that if the Bank were seeking to depart from the agreement they would have to give appropriate notice of termination to bring it to an end. It seems to us clear that if the Tribunal had properly focused on the contractual effect of the Security Agreement, which was admitted, the position of Mr Ward was substantially more secure than the percentage chances they arrived at implied. We recognise that Industrial Tribunals are the industrial jury. But it seems to us, on analysis, that had the Bank consulted and honoured the Security of Employment Agreement Mr Ward might well not have been dismissed at all; at the least, he would have been employed during the period whilst the Bank sought to terminate that Agreement. Further, we did not find the reasoning of the Tribunal on the Polkey point entirely convincing. It seems to us that their first reason, namely that Mr Ward was asserting that he was not redundant, was irrelevant to the question at issue. Further, Mr Ward's EDF rating suggested that the Bank thought he should be retained rather than dismissed. Again, although the Tribunal note that the performance criterion was not applied consistently across the board, they failed to have regard to the fact that other managers who were kept on had less good scores than Mr Ward. Finally, whilst the Tribunal note that the Bank did not adhere to the pool of Managers, (Mr Ward was replaced by a person from a lower grade), in assessing his chances of being kept on they have focused their attention only on the failure to consult. In short, therefore, it is our view that the Industrial Tribunal erred in law in failing to consider the terms of the Agreement; and to resolve the issue between the parties as to its proper interpretation. In our judgment the dismissal was unfair for a number of reasons of which the failure to consult was just one. It seem to us that there is no point in sending the matter back to the original Tribunal for further consideration. On the facts of this case, it seems to us that the only just award of compensation for the wrong done to Mr Ward would be the payment to him of the full amount of his loss, which would then be subject to the statutory cap. We therefore substitute an award of £11,300 for the nil award made by the Industrial Tribunal.