MR J P COOK v SOUTH THAMES (WHOLESALE) [2005] UKEAT 0349_05_2510

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2005] UKEAT 0349_05_2510

Case No Appeal No. UKEAT/0349/05

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR J P COOKAPPELLANT

SOUTH THAMES (WHOLESALE)RESPONDENT

Before

His Honour Judge Richardson Mr M Clancy Mr J C Shrigley

Date 25 October 2005

[1]APPEARANCES For the Appellant MR J P COOK (The Appellant in Person) For the Respondent MR WHEEL (Partner) SUMMARY Unfair Dismissal and Race Discrimination When considering on a claim for unfair dismissal by reason of redundancy, the Tribunal gave no reasons relating to section 98(4) except on the Polkey issue. The Tribunal did not err in law in rejecting a claim of race discrimination. HIS HONOUR JUDGE RICHARDSON This is an appeal against a judgment of the Employment Tribunal sitting in London (South) dated 27 October 2004. Mr Cook had presented a complaint alleging unfair dismissal and race discrimination. The Tribunal upheld his complaint of unfair dismissal but awarded compensation of only £365 representing a week's pay and an amount for loss of statutory rights. The Tribunal dismissed his complaint of race discrimination.

[2]Mr Cook has appealed against the Tribunal's decision. Today Mr Cook has represented himself. He has a Skeleton Argument which is in our bundle which we have read and with which he has clearly had some assistance. He has addressed us today. On behalf the company who employed him, South Thames (Wholesale), Mr Wheel, a director, has attended and he has addressed us on the issues arising in the case. Both parties have addressed us succinctly and helpfully. We would like to record in this judgement what a pleasure it was to listen to both of them and, that we found ourselves liking both of them, and sorry and sympathetic that they should have found themselves taking a day to be in the Appeal Tribunal.

[3]The Appeal Tribunal deals only with questions of law. We do not find facts in the Appeal Tribunal. We do not have a general discretion to re-hear a case or to deal with factual issues ourselves. Questions of fact are for Tribunals. But one of the tasks for the Appeal Tribunal is to see that an Employment Tribunal has not gone wrong in law and, included in that task, is the Appeal Tribunal's duty to ensure that a Tribunal's reasons cover the issues that arose for decision by the Tribunal. Sometimes the Appeal Tribunal can guess or thinks it can guess what the answer might be if an issue is not covered by the reasons. But that is not the Appeal Tribunal's function. The Appeal Tribunal's function is to deal only with questions of law.

[4]The hearing before the Tribunal was short. Both parties represented themselves. The reasons that the Tribunal gave are succinct. We set them out in full. "REASONS FOR THE TRIBUNAL'S JUDGMENT 1. In this case we heard the evidence of the Claimant in support of his various claims. From the Respondent we heard the evidence of one of the four directors of this small family wholesale confectionary drinks company. 2. We accepted in general terms the evidence of Mr Wheel the partner/director who described how the business was going through a very difficult cash flow crisis during the New Year spring period of 2004. The business had spent a substantial sum of money in getting printed and distributed an expensive new catalogue for all the main customers in the hope of bringing in new business. Although some new business was generated there was still a significant need we find and accept for the company to cut costs on the only obvious area for cost saving namely the staffing costs. 3. As at June 2004 the staff complement consisted of Mr Wheel himself, a young member of the family Jason Butchart (who was living with Mr Wheel at his home) a sales clerk of Indian origin, a van boy/delivery assistant of Sri. Lankan origin; and a Pakistani warehouse manager. The warehouse manager Richard (white British), another white British member of staff described as a van assistant and another Sri Lankan member of staff employed in the warehouse and on forklift duties together with the Claimant Mr Cook made up the workforce. 4. We find that with this small complement of staff Mr Wheel carried out an assessment of the main required job duties and where savings could be made came to the conclusion that he himself would take over more driving duties and that he would arrange for his nephew Jason also to qualify as an HGV driver. Mr Wheel came to the conclusion that .the best overall resolution to achieve a reduction of staff would be to remove the Claimant from driving duties and consider placing him onto warehouse duties at a lower rate of pay. The other member of staff, Richard left because of problems of selling his house and moving off to Spain and that had not in fact been completed by the time of the Claimant's termination of employment. 5. We accepted that there was a "redundancy situation" i.e. a need to reduce the total of staff overall and to reduce in particular the requirement for drivers out of this very small number of staff. In the result therefore a major element of the Claimant's job function was removed. 6. There was we find nothing really to consult the Claimant about other than whether he was prepared to take a noticeable reduction in wages and move into warehouse duties as was clearly offered to him by the correspondence within the bundle. 7. Perfectly understandably the Claimant decided that the reduction in wages and alternative duties was not acceptable and he left; He was we find formally dismissed by reason of redundancy. 8. The Claimant's case was really put on two levels. First of all there was a challenge as to whether there was a redundancy situation at all and in effect an allegation that he as a reasonably paid worker was being replaced by two "cut-price" immigrant workers. 9. We do not accept that this was anything other than a genuine redundancy situation. It is indeed correct that for a period of some weeks two East European employees were taken on but they were taken on at short notice and left we find not long after the Claimant himself. 10. There was also a more wide ranging case that the Claimant was being racially discriminated against as a native born and brought up employee who as it were was familiar with his rights and could not be taken advantage of. We found that this was an inherently difficult argument in any event but it was not necessary for us to decide this interesting question of principle. We find that from time to time on a seasonal basis casual staff had been taken on and that by the nature of the market those casual staff may well have mainly been from Eastern Europe/the immigrant community. This was not however we find any conscience policy but a symptom of the employment of casual staff. We found therefore that there was nothing in the race discrimination complaint. Unfair dismissal 12. We had regard to the classic principles in the decision of Po/key v Dayton Services

[1988] ICR 142

and many subsequent authorities. We find that there was a moderate breach of procedure in lack of consultation in this case. We find however that this was a very small company and consultation would have reasonably been completed within the space of one week. The Claimant had received his redundancy pay (i.e. the equivalent of his basic award). We found therefore that he was entitled to be compensated for one week's further pay to cover the notional period of consultation together with £1 00 for loss of statutory rights making an overall total of £365. 13. The Claimant commenced his evidence at 1 0.25am.. Mr Wheel's evidence was concluded at approximately 12.30am."

[5]It will be seen that the Tribunal do not make any complete finding as to what Mr Cook's duties were. But the Tribunal did find that the requirement for drivers was reduced and that in the result a major element of Mr Cook's job function was removed. His own Originating Application had described his duties as general duties including driving, delivering, collecting payments, picking orders, scanning for invoices, computer and data entry. In answers to questions from us he said that to begin with he did little driving but in February 2003 he moved over mainly to do driving duties on vehicles up to 7½ tons for which he was qualified. The parties tell us his contract of employment did not restrict him to driving duties.

[6]The Tribunal concluded that Mr Cook was redundant because there was a reduced requirement for drivers. That finding is not in itself challenged in the Notice of Appeal or the Skeleton Argument. As we understand the position, though it must be appreciated that we record this, not find it, Mr Wheel's case before the Tribunal was that the there were three drivers available, himself, his nephew and Mr Cook. All of them could drive vehicles up to 7½ tons. He needed to cut costs. He cut Mr Cook's job as he wished to keep his nephew on. His nephew had come down in circumstances which he mentioned to us from Chester and he felt that it was right to keep his nephew on and to make Mr Cook redundant.

[7]The argument for Mr Cook is that the Tribunal did not deal adequately with the question of selection for redundancy. His argument is that the Tribunal has not asked or answered the question whether it was reasonable to select him for redundancy. It has for example not addressed the question whether it was reasonable to select him for redundancy rather than the nephew, Mr Butchard. It has not asked the question whether it was reasonable to dismiss him for redundancy having regard to the scope of his contract of employment and what work there was available in the warehouse. He points out that in paragraph 13 of its reasons the Tribunal addresses Polkey v Dayton Services

[1988] ICR 142

but no other issue.

[8]The relevant provisions of section 98 of the Employment Rights Act 1996 are the following:

"98 General (1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show- (a) the reason (or, if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held. (2) A reason falls within this subsection if it- (a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do, (b) relates to the conduct of the employee, (c) is that the employee was redundant, or (d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment. (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]It is essential that the Tribunal should consider and be shown by its reasons to have considered and answered the question that is raised by section 98(4): did the employer act reasonably or unreasonably in treating the reason given, in this case redundancy, as a sufficient reason for dismissing the employee? Polkey v Dayton Services addresses only one aspect of that question. It is not the whole story. Mr Cook's case had been that redundancy was not the real reason. But subsumed within that case inevitably is the argument that it was not reasonable to make him redundant and this is a matter which the Tribunal must consider.

[10]Generally speaking in our experience Tribunals set out the provisions of section 98 including subsection (4) and then generally go on to ask and answer the question posed by section 98(4) explicitly having regard to the issues in the case. We do not say that the matter need be dealt with at great length by a Tribunal particularly in a case where, as here, the whole hearing was over in a couple of hours. But a Tribunal must address that question. It must answer the question one way or the other.

[11]In our judgment the Tribunal in this case simply has not asked or answered the section 98(4) question. Or, if it has, it has failed to record the answer and any succinct reasons for its answer in its decision. It has mentioned Polkey v Dayton Services but as we have said that is not the whole section 98(4) story. We therefore think that there is force in the criticisms that have been made of the Tribunal's decision.

[12]It does not however follow that the Tribunal has also erred in law in its conclusion on the question and race discrimination. The law there is of course quite different. The issues that are raised are quite different.

[13]The relevant provision of the Race Relations Act 1976 are the following:

"1 Racial Discrimination (1) A person discriminates against another in any circumstances relevant for the purpose of any provision of this Act if- (a) on racial grounds he treats that other less favourably than he treats or would treat other persons if; or (b) he applies to that other a requirement or condition which he applies or would apply equally to persons not of the same racial group as that other but- (i) which is such that the proportion of persons of the same racial group as that other who can comply with it is considerably smaller than the proportion of persons not of that racial group who can comply with it; and (ii) which he cannot show to be justifiable irrespective of the colour, race, nationality or ethnic or national origins of the person to whom it is applied; and (iii) which is to the detriment of that other because he cannot comply with it. 4 …Applicants and employees (2) It is unlawful for a person, in the case of a person employed by him at an establishment in Great Britain, to discriminate against that employee- (a) in the terms of employment which he affords him; or (b) in the way he affords him access to opportunities for promotion, transfer or training, or to any other benefits, facilities or services, or by refusing or deliberately omitting to afford him access to them; or (c) by dismissing him, or subjecting him to any other detriment."

[14]We see no error of law in the Tribunal's decision dismissing the race discrimination claim. It is plain from the Tribunal's decision that the Tribunal found that the reason for Mr Cook's dismissal for redundancy was a financial reason. This reason would have applied just as much if he had been from a different ethnic background. We do not think that it can be said in this case either that there is direct discrimination or that there has there been any requirement, condition, provision, criterion or practice of the kind which can give rise to a discrimination claim, still less that the Tribunal erred in law in concluding that there was no discrimination.

[15]Our conclusion therefore is as follows. The appeal against the dismissal of the race discrimination claim will be dismissed. The appeal against the finding of compensation in the sum of £365 will be allowed and the matter will be remitted to the Employment Tribunal. We have considered whether it could be remitted to the same Employment Tribunal but some months have passed, the reasons for the decision are brief and we think it would be an unkindness to all concerned if we attempted by some halfway house to ask the same Employment Tribunal to reconstitute and try to remember some or all of what it heard in a short compass last year. We think the sensible course is for the short hearing that will have to take place to take place before a fresh Employment Tribunal. A fresh Employment Tribunal will need, in order to consider the question of compensation, also to consider the question of unfair dismissal and section 98(4) in particular; it will need to address the question whether it was reasonable to dismiss Mr Cook not just a week later than he was actually dismissed but also whether it was reasonable to dismiss him at all or at any rate within a much larger timescale than a week.

[16]We wish to say that by remitting the matter to the Tribunal we are not in any way, shape or form seeking to pre-judge the conclusion that the Tribunal might make. The Tribunal will hear the evidence and reach its own conclusions as to compensation, which will depend on whether it considers that it was or was not unreasonable to dismiss Mr Cook on more general grounds than merely the Polkey ground.

[17]|The final matter with which we wish to deal in this judgment is to record that there was an issue relating to holiday pay in the sum of £46. The Chairman omitted to put in his decision a finding in Mr Cook's favour in the sum of £46. But that £46 has been paid now to Mr Cook and no further point arises on it.