MR E MACE v ENGINEERING EMPLOYERS FEDERATION [2003] UKEAT 0680_02_2301

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0680_02_2301Case No Appeal No. EAT/0680/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR E MACEAPPELLANTENGINEERING EMPLOYERS FEDERATIONRESPONDENT
Before
His Honour Judge J McMullenDate 23 January 2003
[1]APPEARANCES For the Appellant MR EDWARD MACE (the Appellant in Person) For the Respondent MR GAVIN MANSFIELD (of Counsel) Instructed by: Engineering Employers Federation Broadway House Tothill Street London SW1H 9NQ HIS HONOUR JUDGE J McMULLEN QC This case is about the assessment of compensation on a finding of unfair dismissal. We will continue to refer to the parties as Applicant and Respondent.[2]It is an appeal by the Applicant in proceedings against the decision of an Employment Tribunal sitting at London (South), Chairman Mr M Zuke, promulgated with Extended Reasons on 28 May 2002. The parties were represented by Counsel. The Applicant claimed unfair dismissal, bullying and harassment.[3]The Respondent admitted dismissal and contended the reason was redundancy and it was fair. It denied the bullying allegation and contended that the issues to which it related were unconnected to the dismissal in 2001, had occurred in 2000 and the complaint was out of time. That claim was struck out at an earlier hearing and taken no further.[4]Thus, the essential issue for the Employment Tribunal was whether the dismissal was fair. There was no issue that the dismissal was on the ground of redundancy. Thus, if unfair, compensation would be assessed having decided the issue raised in the Respondent's pleaded case: that consultation would have been futile to change the result.[5]The Employment Tribunal found the dismissal was unfair because there was no consultation or warning; but it awarded the Applicant no compensation.[6]The Applicant appeals against that finding on grounds set out in an amended Notice of Appeal and Skeleton Argument and oral representations to us today. The contention is that the Employment Tribunal should not have adopted an 'all or nothing' approach to the assessment of compensation, but should have taken some alternative route.[7]Directions were given in this appeal by Judge Pugsley and members on 25 August 2002. They included amendment of the Notice of Appeal in line with the drafts submitted by Counsel appearing for the Applicant under the ELAAS Scheme. As a result of the intervention a clear issue was drafted for us to decide at a full hearing.[8]The Respondent is an employers' association, representing employers in the engineering industry. It has a number of roles including lobbying the government on behalf of the associations in its federation, member companies and the engineering and manufacturing industry as a whole, on various economic and employment-related issues. It provides guidance to these associations and member companies on employee relations, employment law, training and spreading best practice. It provides resources, guidance and support on administrative matters for the associations. It is well known in the field of industrial relations and highly respected by all those engaged before Employment Tribunals and before the EAT. It is an employment association listed with the Certification Officer, pursuant to statute. It employed about 50 people at the relevant time.[9]The Applicant was employed as its Marketing and Publications Manager. Those two functions were split 50-50. He started there on 6 January 1997 and continued until the relationship ended by his dismissal on notice on 30 September 2001. He was paid about £34,000 a year and was 57.[10]The Tribunal decided that the treatment of the Applicant was unfair. The unfairness arose in this way. The Respondent decided to cease producing and marketing publications for sale on 7 August 2001. The relevant management decided that that would result in the loss of at least four jobs, including the Applicant's. No-one was told about this or even given any warning that their jobs were at risk.[11]On 3 September 2001 the Applicant was called to a meeting with two of the officers; ostensibly to discuss the return to work of a colleague who had been off on long-term sick. But the true purpose was to tell the Applicant he was redundant. There was no consultation with him about ways in which his dismissal might be avoided. Mention was made of possible alternative employment, but that was on the basis that he would definitely be dismissed from the current post.[12]No prior warning was given to him of the announcement; he was understandably shocked and not in a fit state to give any proper consideration to possible future employment. The decision was confirmed in writing. He was to be paid money in lieu of notice and enhanced redundancy pay, but up until the termination of that notice on 30 September efforts would be made to find him alternative employment.[13]He was asked if he wished to consider vacancies. One was found by the Applicant to be ideally suited to him: Campaign Manager (and also a Campaign Assistant).[14]A meeting was arranged with him to discuss this position, but the Applicant wrote that he was unable to attend because his confidence and self-esteem had received a serious blow, and his trust in the Respondent had been totally undermined. So he did not pursue the Campaign Manager position, nor any of the other posts which had been suggested to him. His employment ceased. He received a payment of £19,395.83, made up of £8,312.50, money in lieu of notice, and a redundancy payment of £11,083.33.[15]The Tribunal found that the job of Campaign Manager required experience in media relations and political lobbying, but his previous background was primarily in the field of graphic design. His CV has been shown to us and it indicates demonstrated skills in that latter field. He had been briefly involved in contacting politicians in a previous company but apart from that, the Tribunal found, he had no experience in political lobbying.[16]The Applicant was offered an opportunity to appeal against the decision to make him redundant but he did not take it.[17]The Tribunal considered that the Respondent had failed to act fairly because there had been no consultation with him prior to the decision to dismiss him, he was given no warning and the Tribunal said this: 17 "It is important for employees to have as much warning as possible that their employment may be at risk. This allows them to consider alternatives with their employer and to seek alternative employment at the earliest opportunity if they wish to do so."[18]We endorse that. In this case the Applicant was given no such warning, nor was he consulted about ways in which his dismissal might be avoided. No adequate reason was put forward by the Respondent's witnesses as to why such consultation did not take place; and so the Tribunal decided that a decision to dismiss was outside the range of responses of a reasonable employer and he was unfairly dismissed.[19]The Tribunal therefore had to consider remedies. It adjourned so that the Applicant could take advice from his Counsel on whether or not he sought re-instatement or re-engagement. After such adjournment his Counsel told the Tribunal that this was not to be sought.[20]The Tribunal then considered the approach to compensation under the direction of Polkey vAE Dayton Services Ltd [1988] ICR 142 . The Tribunal first decided that the outcome would have been different only to a limited extent; that is, that the process would have commenced on or about 7 August – about a month before the Applicant was in fact told of his redundancy.[21]The Tribunal considered, therefore, a payment for that, but justified its refusal to accept a submission that the outcome would have been different by reference to two cogently argued circumstances.[22]The first was a submission that the Applicant would have continued his employment in a modified role but the Applicant did not suggest this to the Respondent during the period 3-30 September 2001. Nor was that suggestion put on the Applicant's behalf to the Respondent's witnesses. The Tribunal concluded it was simply too speculative to say that the Applicant might have been retained in the modified role had there been proper consultation.[23]Today Mr Mace has given us examples of what might have occurred since he told us that two young women had had their roles changed when similar circumstances affected them. Whether that is right or not, we do not consider that the Tribunal has erred in its approach to the findings of fact which it made.[24]We have access to the Chairman's notes, as ordered by the EAT under Judge Pugsley and these are relevant to the second submission, in relation to the Campaign Manager position. As we have said, the Applicant did not apply for that role. The Tribunal accepted that he was demoralised by the decision to dismiss him but found that it did not preclude him from pursuing efforts to persuade the Respondent that he should be employed as Campaign Manager.[25]The Tribunal noted that the primary element of that role was political lobbying and he did not have experience in that role. Thus the Tribunal found that had he applied for the job and entered into discussions about his suitability he would not have been appointed Campaign Manager. Thus, its overall finding is summarised as follows: 20 "…even if proper consultation with the Applicant had taken place, he would still have been dismissed."[26]The Tribunal assessed the compensation. It noted that the figures which we have given above are required to be adjusted, pursuant to section Employment Rights Act 1996 122 (4) (b). Payment of an enhanced redundancy payment extinguishes the basic award and therefore the excess is to be applied towards the compensatory award.[27]The Tribunal held that it was just and equitable to award the Applicant one month's salary of £2,000 to compensate for the month which would have been a proper consultation period, but it had to apply section 123 (7). The balance of the redundancy payment made by the Respondent after deducting a basic award of £1,440, goes to reduce the amount of the compensatory award. The balance was £9,643.33 and the Tribunal thus found that the compensatory award is reduced to nil. In other words, the Applicant had been compensated for the loss of the period of consultation and had not suffered loss since the result of proper consultation would have been the same; and had the Respondent not paid those sums over and above the statutory redundancy payment it would not have been required to compensate him further.[28]The Applicant submitted that the Employment Tribunal had erred in law in that it had applied the Polkey formula wrongly. The response of the Respondent is that the Tribunal not only applied the judgment in Polkey correctly, but made findings of fact which are not assailable here.[29]The Tribunal directed itself correctly to the relevant authorities, which are Williams v Compair Maxam Ltd [1982] ICR 156 , Mugford v Midland Bank Plc [1997] IRLR 208 and to Polkey . In its approach to the loss of one month's consultation the Tribunal has impliedly applied Mining Supplies (Longwall) Ltd v Baker [1988] IRLR 417, [1988] ICR 676.[30]It is necessary, therefore, to examine the approach which must be taken. Lord Bridge in Polkey , said this:
"If it is held that taking the appropriate steps which the employer failed to take before dismissing the employee would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation or, in the case of redundancy, no compensation in excess of his redundancy payment."
[31]He went on to cite, with approval, the following passage from Browne-Wilkinson J's judgment in the EAT in Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91, at page 96:
"There is no need for an 'all or nothing' decision. If the Tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment."
This, therefore, becomes the assessment of a percentage chance.[32]We agree with the propositions of law set out in Harvey on Industrial Relations and Employment Law D1.18.4 [2551] as follows:
"Where evidence is adduced as to what would have happened had proper procedures been complied with there are a number of potential findings a Tribunal could make. In some cases it may be clear that the employee would have been retained if proper procedures had been adopted. In such cases the full compensatory award would be made. In others the Tribunal may conclude that the dismissal would have occurred in any event. This may result in a small additional compensatory award only to take account of any additional period for which the employee would have been employed had the proper procedures been carried into effect (see EG Mining Supplies (Longwall) Limited v Baker [1988] IRLR 417). In other circumstances it may be possible to make a determination one way or the other. It is in those cases that the Employment Tribunal must make a percentage assessment of the likelihood that the employee would have been retained, as suggested in Sillifant v Powell Duffryn Timber Ltd ."
[33]Thus, the Tribunal has a choice of making a decision either way or of applying a sliding scale. In our judgment Mr Mansfield is correct when he submits that the failure to attach a specific percentage in this case (0%) does not indicate an error of law. The Tribunal applied the authorities.[34]A point of substance which is raised in this appeal is about the evidence. The assistance we have been given, following the Chairman's helpful production of his notes, enables us to say that the findings which we have extracted above are fully based upon evidence which was played out.[35]We have seen the passage in the evidence which the Applicant does not dispute where he says this:
"The Campaign Manager role would have been suitable for me. It would have been challenging, a different role to my marketing role…I did not have a lobbying or media role. My marketing role was marketing the EEF. I assisted member associations in marketing which is quite different to lobbying and media campaigning. My background is in design skills which are different to lobbying and campaigning."
[36]It seems to us, therefore, that the Tribunal made its findings of fact on the basis of that clear evidence given by the Applicant. The Tribunal looked at the job description, heard the evidence given on behalf of the Respondent by its witnesses and considered the evidence given by the Applicant as to his own assessment of his experience and skills. Apart from an example in the Applicant's career in the 1990s, his background was not in lobbying or campaigning which, as we have observed above, is one of the three main areas of endeavour of the EEF.[37]Thus the Employment Tribunal correctly directed itself on the law relating to the assessment of compensation for unfair dismissal and applied that law to the evidence which it had heard and which it made firm findings about. We see cogent reasoning by the Employment Tribunal in this decision.[38]Firm findings were made against the Respondent which are not the subject of an appeal. We do not require higher standards from an organisation whose job it is to advise employers in the engineering and manufacturing industry upon best practice than those that apply generally. But we would expect it to meet those standards effortlessly, which it signally failed to do in this case. It is to its credit that it has recognised the criticisms made by the Employment Tribunal of its handling of this very difficult and sensitive matter since it has not appealed that decision.[39]We have no doubt that the Tribunal was correct in its assessment of Mr Mace, the blow that he suffered as a result of the dismissal and the handling of this matter.[40]The appeal is dismissed.