(1) MR G PARKINSON (2) MR M HEMMINGS v STOKE ON TRENT CITY COUNCIL [2003] UKEAT 0177_03_1408

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] 0177_03_1408Case No Appeal No. EAT/0177/03 & EAT/0178/03Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
(1) MR G PARKINSON (2) MR M HEMMINGSAPPELLANTSSTOKE ON TRENT CITY COUNCILRESPONDENT
Before
His Honour Judge J McMullenDate 14 August 2003
[1]APPEARANCES For the Appellants MR G PARKINSON (the Appellant in Person) MR M HEMMINGS (the Appellant in Person) For the Respondent MR C R WOOLLISCROFT (Solicitor) Instructed by: Messrs Hacking Ashton Solicitors Berkeley Court Borough Road Newcastle Under Lyme Staffordshire ST5 1TT HIS HONOUR JUDGE J McMULLEN QC This case is about unfair dismissal following a local authority restructuring in order to meet the demands of compulsory competitive tendering. The judgment represents the views of all three members who have pre-read the relevant papers. We will refer to the parties as Applicants and Respondent. Introduction[2]It is an appeal by the Applicants in those proceedings against a decision of an Employment Tribunal sitting over two days at Shrewsbury, Chairman Mr G H Pritchard, registered with Extended Reasons on 22 October 2002. Mr Hemmings represented himself and Mr Parkinson. The Respondent was represented as here by Mr Woolliscroft, solicitor.[3]The Applicants claimed in their Originating Applications, which were heard together, that there were nine grounds of complaint relating to unfair dismissal and in particulars set out in support over 30 authorities and statutory materials said to be relevant to English and European Union law on unfair and wrongful dismissal.[4]The Respondent denied unfair dismissal and contended it had paid the Applicants their contractual entitlement and redundancy pay. The Issues[5]The Employment Tribunal did not define the essential issues which were to decide the reason for dismissal and whether the Applicants were unfairly dismissed following a fair procedure. We have no doubt it had those issues firmly in mind. It did emphatically decide the issue was not unfair selection for redundancy as between peers. The Tribunal decided that the Respondent dismissed the Applicants on the grounds of redundancy but did not do so unfairly. The Applicants appeal against that decision on the substance and the procedure.[6]The Employment Tribunal decided that their ingenious and unusual claim for wrongful dismissal succeeded. It has not been appealed. They have been paid an extra six weeks' pay over that which had already been paid by way of notice money. We say no more of this.[7]I gave directions in chambers sending this appeal to a full hearing. The Legislation[8]The relevant provisions of the legislation are the Employment Rights Act 1996 , section 98 (2) which requires a reason for dismissal including redundancy and section 98 (4) which provides as follows, relating to fairness: (4) "Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)-(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and(b) shall be determined in accordance with equity and the substantial merits of the case."[9]Section 139 defines redundancy: 139 (1) "For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to – (a) the fact that his employer has ceased or intends to cease – (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or (b) the fact that the requirements of that business- (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish."[10]The Tribunal did direct itself to those relevant provisions and also to what we hold to be the leading authorities which are cited in its Extended Reasons were Pillinger v Manchester Area Health Authority [1979] IRLR 430, Ball v Balfour Kilpatrick Ltd [1997] ICR 740, and Langston v Cranfield University [1998] IRLR 172 . The Facts[11]The Respondent is a local authority and a housing authority. It employs 12,700 people. The Applicants were employed as Revenue Officers in the Housing Department at a salary of £18,000 a year from 1990 and 1992, respectively, until the relationship ended by dismissal in January 2001 when they were 54 and 60.[12]There was a reorganisation in the Housing Department in order to make very substantial savings. The reorganisation included a selective de-skilling of various posts. That situation had been evolving since 1997 when revenue officers had not been replaced in their particular role as and when they left.[13]The Applicants had been paid on Scale 6. The Respondent decided that much of the work undertaken by them could be undertaken by people with lesser skills. Thus the restructuring took place. It was not simply, however, an exercise in de-skilling. Otherwise the Tribunal would have applied the principle, as we will set it out, in Pillinger . It was decided that all of the posts within the management section of the Housing Department ceased to exist and were deleted.[14]The Tribunal decided that this was an exercise in seeking alternative employment. This was not an exercise in selection for redundancy and so criteria for selection were not to the point. The Tribunal acknowledged Mr Hemmings' frank concession that he did not challenge the whole rationale and structure of the exercise.[15]Alternative employment was offered by competitive interview. The Applicants, unfortunately, failed to secure alternative jobs on Scale 6. They were to be deployed to Scale 2, a Cashier Clerk's job on £12,000 which, following their embarkation on the grievance procedure, was accepted by the Respondent not to be suitable alternative employment.[16]The grievance which was put in challenged their selection for displacement. The Tribunal noted that the grievance procedure was protracted because of the Respondent's unfamiliarity with it and because of the failure at stage 3 of Councillors to turn up to make the meeting quorate.[17]The grievance procedure passed through stages 2 and 3 and took a long time. The decision had been made during the course of the procedure that the Applicants were not to be disqualified for redundancy by the depiction of the Scale 2 post as one of being suitable alternative employment.[18]The procedure was accepted in outline by the relevant trade unions. It was an ad hoc procedure. The Tribunal injected the following: 15 "The procedure strikes this Tribunal, from our own experience, as being unexceptional in local government redundancy cases." The Tribunal found also that the de-skilling review could not have been popular with any officer in the Housing Department, nor could it have been acceptable to offer jobs at four grades lower.[19]However, agreement had been made in principle with the union to the form and to the procedure of the restructuring adopted and in particular competitive interviewing. There was sufficient consultation, both collectively with the relevant union and with individual employees.[20]In making that factual decision cogent reasons are put forward including the acknowledgement that the Applicants may not have had a good deal to discuss in the course of their interviews and that their scores were substantially below those of many of their colleagues. The interviews were conducted reasonably. The exercise was not simply a question of having the same work undertaken by someone less skilled and lower paid. The dismissals, therefore, were by reason of redundancy. The Tribunal acquitted the Respondent of unfairness in the consultation procedure leading up to the implementation of the dismissals. The submissions[21]Mr Hemmings has placed a very careful and well-researched argument before us and we pay tribute, as did the Employment Tribunal, to his concise presentation and his moderate approach to the issues which obviously are deeply felt for himself and for Mr Parkinson. He submitted that the Employment Tribunal had erred in law in that it had failed when it considered whether or not this was a de-skilling exercise. It failed to consider all of the evidence given by the Applicants, in particular the criticism which had been made that the Respondent failed to comply with its own procedures and with the statutory requirement to attempt to avoid redundancies. The Respondent, a very substantial employer, had failed to seek early retirement and volunteers; alternative work must have been available elsewhere within such a large employment. The protraction of the proceedings was criticised by Mr Hemmings and that included the failure within proper time scales set out in the grievance procedure to resolve the issues.[22]On behalf of the Respondent it is contended that the issues raised by Mr Hemmings are principally questions of fact upon which there is no jurisdiction for the EAT to make decisions. Wrongful dismissal is a factor which may be raised in unfair dismissal and this is relevant since the Tribunal found that the Respondent did wrongfully dismiss the Applicants. That is only one factor.[23]Mr Woolliscroft pointed out that there was an agreed ad hoc procedure with the union and he relied on a number of authorities to which we will turn. In particular, it was forcefully pointed out that the Applicants chose not to be considered for other work after failing to achieve positions either as Rent Officer or Administrative Assistant (in Mr Parkinson's case the latter); and that there was sufficient consultation. The Legal Principles[24]We take the legal principles to be set out by reference to the following authorities:(1) Redundancy is defined in Murray v Foyle Meats Ltd [1999] IRLR 562 at paragraph 5, per Lord Irvine LC: 5 "My Lords, the language of para. (b) is in my view simplicity itself. It asks two questions of fact. The first is whether one or other of various states of economic affairs exists. In this case, the relevant one is whether the requirements of the business for employees to carry out work of a particular kind have diminished. The second question is whether the dismissal is attributable, wholly or mainly, to that state of affairs. This is a question of causation. In the present case, the Tribunal found as a fact that the requirements of the business for employees to work in the slaughter hall had diminished. Secondly, they found that that state of affairs had led to the appellants being dismissed. That, in my opinion, is the end of the matter."(2) The principles upon which a redundancy exercise should be conducted are set out in Williams v Compare Maxam Ltd [1982] ICR 156 at 162C-G:
"…there is a generally accepted view in industrial trial relations that, in cases where employees are represented by an independent union recognised by the employer, reasonable employers will seek to act in accordance with the following principles: 1. "
The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. 2. The employer will consult the union as to the best means by which the desired management result can be achieved fairly and with as little hardship to the employees as possible. In particular, the employer will seek to agree with the union the criteria to be applied in selecting the employees to be made redundant. When a selection has been made, the employer will consider with the union whether the selection has been made in accordance with those criteria. 3. Whether or not an agreement as to the criteria to be adopted has been agreed with the union, the employer will seek to establish criteria for selection which so far as possible do not depend solely upon the opinion of the person making the selection but can be objectively checked against such things as attendance record, efficiency at the job, experience, or length of service. 4. The employer will seek to ensure that the selection is made fairly in accordance with these criteria and will consider any representations the union may make as to such selection. 5. The employer will seek to see whether instead of dismissing an employee he could offer him alternative employment. The lay members stress that not all of these factors are present in every case since circumstances may prevent one of more of them being given effect to. But the lay members would expect these principles to be departed from only where some good reason is shown to justify such departure. The basic approach is that, in the unfortunate circumstances that necessarily attend redundancies, as much as is reasonably possible should be done to mitigate the impact on the work force and to satisfy them that the selection has been made fairly and not on the basis of personal whim." (3) Not all of the principles set out above must be applied in every single case and a failure to act in accordance with one or more of them will not necessarily involve the conclusion that the dismissal was unfair: see Grundy (Teddington) Ltd v Plummer [1983] IRLR 98. (4) Generally speaking, consideration of a complaint of unfair dismissal in a redundancy context involves a complaint of unfair selection, lack of consultation and failure to seek alternative employment. Therefore an employer faced with such a claim can be expected to lead some evidence as to the steps which were taken to select employees for redundancy, to consult them and/or their union and to seek to find alternative employment; and these issues, which are described as matters of fact, must be considered by a Tribunal: see Langston v Cranfield University [1998] IRLR 172 . (5) The relevant approach to consultation is found in Mugford v Midland Bank Plc [1997] IRLR 208 at paragraph 41: 41 "Having considered the authorities we would summarise the position as follows: (1) Where no consultation about redundancy has taken place with either the trade union or the employee the dismissal will normally be unfair, unless the industrial tribunal finds that a reasonable employer would have concluded that consultation would be an utterly futile exercise in the particular circumstances of the case. (2) Consultation with the trade union over selection criteria does not of itself release the employer from considering with the employee individually his being identified for redundancy. (3) It will be a question of fact and degree for the industrial tribunal to consider whether consultation with the individual and/or his union was so inadequate as to render the dismissal unfair. A lack of consultation in any particular respect will not automatically lead to that result. The overall picture must be viewed by the Tribunal up to the date of termination to ascertain whether the employer has or has not acted reasonably in dismissing the employee on the grounds of redundancy." (6) Care must be taken where a reorganisation takes place to ensure that in appropriate cases there is proper selection: see Ball v Balfour Kilpatrick Ltd [1997] ICR 740 EAT at 745F-H, per Judge C Smith QC. (7) In a case where there is lack of co-operation over certain aspects of the procedure by the employee, criticism of the employer may be removed: see Mitchell & Others v Stolt Seafarm Ltd (EAT/299/02, unreported), per Lord Johnston at paragraph 5: 5 "…in general terms, if the employee excludes this line of discussion by word or deed, then he or she cannot thereafter complain that he or she has suffered loss." (8) A redundancy dismissal may arise where the work a junior officer does is different from that done by a more senior person. It may be possible to say that the requirement of the type of work by the more senior person has ceased or diminished. But where there is no suggestion that the type of work the more junior officer would do would is any different from that done by the other person, it is not possible to say there is a diminution or cessation of the kind of work that the applicant was employed to do. In other words, where there is simply the same work continuing to be done by a lesser-skilled officer on lower pay, that is not a redundancy: see Pillinger above. Our Conclusions[25]Applying those principles to the decision before us, we have decided that the appeal should be dismissed since we uphold the submissions of the Respondent and reject those of the Applicants. There were clear findings of a redundancy, not merely of de-skilling. There was a finding that adequate consultation was ultimately carried out, although initially not properly carried out and not quickly enough. Alternative work was offered and the Applicants withdrew at a certain stage from further consideration; and ultimately a fair process was achieved for the handling of the reorganisation.[26]It seems to us that the Tribunal correctly addressed the relevant authorities, which we have cited. It made findings of fact on all the principal issues on which it was required to adjudicate and it has given cogent reasons for the conclusions which it drew.[27]In those circumstances we accept the submission that this is an appeal principally on questions of fact, notwithstanding the heavy list of authorities attached to both parties' submissions. Essentially the Respondent was driven to make changes according to the competitive environment in which it was operating as a result of central government policy and its own policies.[28]We cannot leave this appeal without acknowledging the poor application of the procedures by the Respondent's officers and members which was only just rescued by fairness in the overall result. We can understand how both of the Applicants feel dismayed at the way in which they were treated and we have no doubt that the Tribunal had fully in mind their positions when it acknowledged the difficulty facing any long-standing employee with stable employment at their age in having to compete for new jobs. Nevertheless, the balancing of those matters essentially is one for the Respondent, supervised by the Employment Tribunal in its duty to review the facts and to make conclusions on claims put before it.[29]We are pleased to hear that both Applicants have some form of work, albeit very different from that previously done. Again, we wish to thank Mr Hemmings for the very helpful way in which he has approached the appeals on his behalf and on Mr Parkinson's behalf and we are grateful to Mr Woolliscroft for his succinct arguments to us.[30]The appeals are dismissed.