MR M J LOOSLEY v SOCIAL ACTION FOR HEALTH [2007] UKEAT 0378_06_1502

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2007] UKEAT 0378_06_1502Case No Appeal No. UKEAT/0378/06Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR M J LOOSLEYAPPELLANTSOCIAL ACTION FOR HEALTHRESPONDENT
Before
Mr Justice Langstaff Mr G Lewis Ms G MillsDate 15 February 2007
[1]APPEARANCES For the Appellant MR MARTIN CONDRON (Representative) For the Respondent MS NADIA MOTRAGHI (of Counsel) instructed by: Natwest Mentor Services Litigation Department 2nd Floor Sapphire West 550 Streetbrook Road West Midlands B91 1QY SUMMARY Practice and Procedure – 2002 Act and Pre-action Requirements Unfair Dismissal – Reasonableness of dismissal; Polkey deduction Employee due to be dismissed for redundancy unfairly not told of an alternative job, which was within his capability. Instead it was allocated to a more junior employee. Tribunal found that the job was funded by a third party, who did not want the employee to have the job, but wished the other employee to do so, such that if he had been offered the opportunity of applying for the post he would not have got it. The employers otherwise did all they could to assist the employee. A claim that the employer could not rely on s. 98A (2) because the defect was one of substance, not procedure, was dismissed: s.98A (2) considered. Observations about the practice of submitting written argument to tribunals without disclosing it to the other party THE HONOURABLE MR JUSTICE LANGSTAFF This appeal is brought against a decision of an Employment Tribunal sitting at Stratford, whose extended reasons were promulgated on 9 May 2006. By its decision, the Tribunal dismissed the Appellant employee's claims for unfair dismissal. He maintained that he had been unfairly selected for redundancy.[2]The Appellant was a mental health worker. He was employed from April 2003, following a TUPE transfer of him from his previous employment which he had with the Community Health Council. His work involved representation and development work in the community, in respect of which he became a manager with effect from April 2004. Representation work and development work were, the Tribunal found, different. They related to each other but could be considered as being at different ends of the spectrum. The work which the Respondent Social Action for Health did was funded by the Local Authority, Tower Hamlets.[3]Tower Hamlets became unhappy with the way in which the contract was being performed by the Respondent and decided to terminate the funding arrangement. This was to be with effect from 31 March 2005. More than six months before that, the Appellant was told that he would therefore potentially be made redundant. At a time after the anticipated withdrawal of funding was to take place, the Respondent employed a Mr Walker. He, it seems, focused upon the development work rather than both areas, which was the Appellant's own focus.[4]It appears from what the Tribunal found that Tower Hamlets preferred to work with Mr Walker and did not wish to continue working with the Appellant. The Tribunal found, without hearing from the London Borough of Tower Hamlets, that this view was genuinely held by it. In doing so they may, in our view, perhaps have exceeded that which the evidence supported, but nonetheless it was plain that the funding party was not happy to have the Appellant continue in work for them if they could avoid it.[5]Work was, however, available beyond 31 March 2005 when otherwise the posts of both the Appellant and Mr Walker would be redundant. It was necessary, so Tower Hamlets thought, that there should be continued work in supporting what was known as the 'SUN network' (the Support Users Network). In respect of this, an email was sent to the Respondent on 19 January 2005. This requested that the Respondent formally consider undertaking a project to continue after 31 March 2005 in developing the SUN network. The Tribunal regarded it as significant that this email, which proposed further work and further funding, was sent not just to the manager of the Respondent, a Miss Bayliss, but also to Mr Walker directly. It was not, however, sent to the Appellant. The Tribunal drew from this, as in our view it was entitled to do, that Tower Hamlets wished Mr Walker to have the post for which the additional funding would become available. The Tribunal found, from the email and also from the evidence of Miss Bayliss, that there was a strong indication from the funders that the funders wished the position, which was available as alternative employment following redundancy, to go to Mr Walker and that they would have been unhappy if the Respondent had appointed the Claimant to continue in that particular role.[6]At para 57 of its decision, the Tribunal said this:
"57 We find that the Claimant was not considered for this role but that he was qualified to do it and therefore should have been considered for it in April 2005 when the contract on which he was employed ceased. 58 We find, however, that it is unlikely that the Claimant would have been successful in securing that role even if he had been considered by the Respondent as we find that the Respondent believed that Mr Walker was better at this particular aspect of the job than the Claimant…."
They went on to say in the same paragraph:
"… However, we do find from the evidence that the funders were unhappy with the Claimant's performance… They made those concerns known to the Respondent… The Respondent and funders were clearly of the belief that Mr Walker was better at this aspect of the job than the Claimant and we find that this was a genuinely held belief from their experience of working with him."
[7]When the Tribunal came to consider the application of the relevant law (which it had earlier set out) to the facts, it said this at paras 77-79:
"77 It is our judgment that at the 1 April 2005, a vacancy arose for someone to maintain the SUN network on a three months temporary contract with the Respondent, funded by Tower Hamlets. This was suitable alternative employment and the Respondent should have considered the Claimant for this position. The Respondent did not do so. They accepted the intimation from the funder and offered this position to Joseph Walker only. As it was for a short period of time, there was no recruitment exercise conducted for this post. Although at the time it was envisaged that this position would be for three months, it has in fact been extended so that Mr Walker was in post at the time of the full merits hearing on 5 December. 78 When the project came to an end for redundancy on 31 March 2005, the Claimant ought to have been considered for the post of Support Worker for the SUN network commencing between April and June 2005. However, the Tribunal are aware that the Respondent and Tower Hamlets, were unhappy with the Claimant's performance and it is highly unlikely that he would have been appointed for the post had he been so considered. 79 We are concerned that the Claimant was not even considered for the temporary role of Support Worker for the SUN network that was to exist between April and June 2005. However, we judge that realistically, the Claimant would not have been appointed to that post even if he had been considered. It is our judgement that it does not make the decision to dismiss him unfair. The Respondent's opinion of the Claimant's ability to do the job as opposed to Mr Walker is one of the circumstances to be taken into account in assessing the fairness of the decision not to offer him that position."
[8]The Tribunal went on to take account of the fact that the Respondent employer had used funds from other sources to keep the Claimant in employment, in the hope that he might secure alternative employment with the East London Mental Health Trust which, for a time, it seemed virtually certain he would do. That would have been suitable alternative employment. It would have been work which was commensurate with his status and skills. In addition, the Tribunal found that he was virtually certain to have been appointed to a post as Mental Health User Development Co-ordinator with a sister organisation of the Respondent in Hackney. It was the same post in Hackney as the Appellant had been performing for the Respondent in Tower Hamlets. However, the Appellant, in respect of that, refused to attend the interview.[9]The Tribunal found also (para 64) that the Claimant was given ample opportunity whilst remaining in their employment to seek alternative employment elsewhere during the last few months of his employment with the Respondent. They found that the employer retained the Claimant in employment for as long as they could. The effect of their decision was that they kept him in their employment for as long as they had funds to do so. The grounds of appeal[10]On an initial notice of appeal (which extended beyond 20 separate complaints about the way in which the Respondent employer and the Tribunal had approached the case) the grounds of appeal which were properly arguable were reduced at a preliminary hearing for this Tribunal to focus upon the failure to consider the Appellant for the alternative post working in the SUN network.[11]The grounds were, first, that the Tribunal erred in that it found that there was alternative work that the Appellant should have been considered for, but was not, and then went on to hold that, despite that finding, the dismissal was fair. Secondly, having regard to its findings, the effect of which we have already set out, the Tribunal incorrectly found that the dismissal was fair. It could not hold that the Respondents had consulted the Appellant properly, nor did it deal properly with the question of alternative employment, and the submission was made by ground of appeal that the Tribunal were in error in having regard to the probability that the Claimant would not have secured the alternative employment which was, it was said, a matter relevant to compensation.[12]It would appear to us, therefore, that the grounds of appeal accepted within their terms that there was a probability that the Claimant would not have been given the alternative work with the SUN network upon which his appeal depended. There is reference within the Tribunal decision to s98(4) of the Employment Rights Act 1996 . There is no reference, in terms, to s98A(2) which reads as follows:
"(2) Subject to subsection (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure."
That the Tribunal had in mind the provisions of s98A was plain from the fact that, imposing the issues on itself which it did in para 3, it asked whether the Respondent had followed the statutory dismissal procedures and the Respondent's internal procedures in dismissing the Claimant. However, it seems to us that that is a specific reference, without using the terms, to s98A(1), and does not assist with whether the Tribunal actually had in mind s98A(2). Counsel who appeared for the Respondent cannot assure us that the Tribunal were referred to that section. We shall therefore determine this appeal upon the basis that there was no such reference. Submissions[13]Before us, Mr Condron, a consultant, has advanced the following submissions. First, he argues that s98A(2) should not be considered by this Tribunal on appeal. This is because he had no opportunity, on behalf of the Claimant, to address the applicability of s98A(2) to the Tribunal. A Claimant should have such an opportunity. He should not have it for the first time on appeal. It would be manifestly unfair to deny him the right to raise a central issue at first instance. In any event, s98A(2) does not apply here.[14]Central to this proposition was that the facts of this case make it a very unusual one. It is a case in which one might characterise the behaviour of the employer, said Mr Condron, as deliberate concealment of a job offer, available from the Respondent following funding from Tower Hamlets in respect of the SUN network, which would have been suitable employment. He maintains that in a case where there is, if not deliberate concealment at any rate a failure to draw attention to a job opportunity for which, the Tribunal found, the Appellant should have been considered and for which he was qualified, so it could not be said to be a hopeless opportunity. Bearing in mind the fact that he was the senior employee when compared with Mr Walker, both in terms of service and in terms of status, the unfairness of the failure was so significant as to make the error necessarily one of substance and not of procedure.[15]He drew attention to the words "by itself" in s98A(2). Those words gave a Tribunal latitude to distinguish a case in which a minor or mere procedural and technical defect could not any more render a dismissal unfair, but left it open to a Tribunal to hold that, notwithstanding a conclusion that on the balance of probabilities the employee concerned would not retain his employment, his dismissal was unfair within s98(4). He summed it up by saying that this case goes beyond s98A(2). Discussion[16]We have to ask ourselves whether the Tribunal was entitled to come to the conclusion it did. Was there an error of law in its decision or approach? The case would, upon the face of it, appear to have been decided without reference to s98A(2). Therefore, the first question we ask ourselves is whether it is open now to the Respondent to raise, in answer to the claim, the submission that on the facts found by the Tribunal, s98A(2) means that no other decision was open to it. It is well-established that there are very limited circumstances in which this Tribunal can consider a point of law which was not raised before the Employment Tribunal. In particular, it should not do so where the applicability of the point of law would depend upon the evidence and the conduct of the proceedings below. We note, however, that in this case there has been no suggestion that the evidence was in any way affected, or would have been in any way affected, if s98A(2) had been explicitly in play.[17]Where a point of law depends upon a statute which is mandatory in its terms and all the relevant facts have been determined by a Tribunal, then it seems to us to be open to this Tribunal to hear and consider the effect of the section. Indeed, we understood Mr Condron's submissions to be to the effect that he accepted that if a statute required in certain circumstances result X and a Tribunal, not having been alerted to the statute, found Y, it would be open to this Tribunal, upon appeal, to have regard to the statute and to reverse the decision, assuming of course that no issue of fact was involved which it would be necessary, in light of the statute, to explore further below and in respect of which a party was denied an opportunity of doing so.[18]So far as s98A is concerned, it relates to s98. Central to this case, on any view, was the applicability of s98. If s98A(2) had, in its drafting, been a subsection of 98, it would be obvious that the subsection could not be legitimately overlooked by a Tribunal, if it was. The effect of the section is effectively to make it that. One cannot read s98 without also having in mind the provisions of ss98A(1) and (2). To do so would be a plain error of law.[19]Secondly, s98A(2) is mandatory in its terms:
"failure by an employer to follow a procedure… shall not be regarded…"
. The word "shall" indicates this. Accordingly, proper application of the law gives no choice if the section is otherwise applicable.[20]Therefore, we consider that we should ourselves determine whether s98A(2) applies to this particular case. We cannot accept Mr Condron's central submissions. On his interpretation of the words "by itself" there is latitude, without any guiding star, given to an Employment Tribunal to determine whether they should or should not have regard to what is otherwise a mandatory subsection. We consider, just as Elias J (President) did in the case of Software 2000 v Andrews and others (UKEAT/0533/06, in a judgment delivered on 26 January 2007) that those words are there to prevent an employer relying upon his own entirely unreasonable attitude and approach as an employer in other respects in order to demonstrate that even if the employee had been, for instance, considered for a post he would not have been selected, or that so unreasonable was their approach to the employee that he would inevitably have been dismissed. If there were no such saving words, then the employer would be entitled to set up his own unreasonable behaviour as a complete defence to a claim of unfair dismissal. The point is so obvious that it does not bear further expansion.[21]We do not, therefore, think that one can simply side-step subsection (2), as Mr Condron's submissions would have us do, by suggesting that this case demonstrates such a serious breach of procedure - in the failure to consider and the failure to consult or, as he puts it, deliberately to conceal the existence of a job opportunity - that s98A(2) is inapplicable. We should add that there is absolutely no material to support the suggestion that the employer here acted(a) deliberately and(b) to conceal the job opportunity. The Tribunal based its decision upon a failure to draw the Appellant's attention to it, and rightly condemned the employer for failing to do so, but it did not use the colourful and loose terms (as Mr Condron to his credit himself described them) in which the Appellant described them to us.[22]That said, does s98A(2) apply here? This involves the question whether or not the employer's failure was procedural. Procedure has a broad meaning (see Software 2000 ) and we agree with the analysis there set out. In our view, a failure to draw attention to a job opportunity is properly to be regarded as procedural in this context. There may be contexts, other than this, in which that is not so; that must be for a Tribunal to determine, but we see that no reasonable Tribunal could, upon the findings of fact made here, come to any other conclusion.[23]Next, we have to ask if the employer has shown that he would have decided to dismiss the employer if he had followed the procedure. Here, some general observations may be of assistance to Tribunals. The effect of failing to follow a procedure may be to deprive an employee of a chance that he would otherwise have retained employment. The case of Polkey vAE Dayton Services Ltd [1988] ICR 142 , permitted the employee, in such circumstances, to have the wrong done to him acknowledged and compensation rendered to him for the loss of that chance. That is no longer the law. It must, however, be appreciated that the starting point is a failure by the employer. The failure may be a minor or technical one. It may be a serious one, with serious consequences. Determination of the question whether the employer has shown that he would have decided to dismiss the employee if he, the employer, had followed the procedure which was applicable is, as Elias J identified, to invoke the balance of probability approach. Is it more likely than not that this would have happened? But Employment Tribunals should remember that it is for the employer to show.[24]Although the conclusion may be reached upon all the evidence, it will no doubt have in mind that the more serious the breach and the more serious the consequences of it, the more cogent the evidence is likely to have to be if it to satisfy a Tribunal to the standard appropriate, that there would have been a decision to dismiss. This is not to say that the test of balance of probabilities is modified. It is to take the same approach here as, for instance, is taken elsewhere in the law where, for example, an allegation of fraud is raised by one party to a civil case. Where the allegation is serious, so the proof must be cogent. It is so because of the inherent unlikelihood of such a serious allegation being established as the fact. Thus, because of the unlikelihood that a serious breach will have no practical consequences for an employee, and the difficulty that there must be of showing that the employee would have been dismissed where the breach of fair procedure is significant, it is, we think, necessary to have regard to the cogency of the evidence. This depends, as always, upon the context. In the present case, however, the balancing exercise has been done.[25]Here, the Tribunal expressed itself in different passages and in different word s but to much the same effect. In para 58: it was "unlikely that the Claimant would have been successful in securing the role". In para 78: it was "highly unlikely that he would have been appointed". By para 79, he "would not have been appointed", judged realistically. Those three references, though differently expressed, are all to the effect that this was no mere balance; it was a case in which the answer was clear. That is, perhaps, to state the obvious. If an employer, whose business depends upon gaining a contract understands that the contract will only be obtained if a particular employer is concerned with its administration once obtained, then it is difficult (issues of sex and race put to one side) for that employer to avoid the inevitable consequence that it is that employee who is likely to be appointed to administer it. It is one of the factors to which a Tribunal must appropriately have regard in looking at the circumstances referred to in s98(4).[26]Where the result of consultation is an obvious one, there may be something to be said for an employer not requiring the formality of consultation, if the employer's mind is appropriately made up. This is, we emphasise, likely to be a highly exceptional case, but it is the burden of the submissions by Mr Condron that it is indeed a highly exceptional case which falls for consideration here. Accordingly, having regard to the facts, it is quite obvious that this Tribunal had no option other than to determine that this dismissal was "fair". If the argument that it was not depends purely upon the employer's failure to follow a procedure, the only grounds which we have to consider relate to such a failure. The argument does depend on that. Therefore, there was no other answer to which this Tribunal could properly and lawfully come, given the proper meaning of s98A(2).[27]That is sufficient for our decision to dismiss this appeal. However, if the matter had rested upon s98(4) alone, we would have had regard to the facts that s98(4) requires that all the circumstances of a case need to be considered. What was in issue here was not the redundancy. That, it was accepted, was inevitable. What was in issue was whether or not the employer did sufficient to secure suitable alternative employment for the Appellant. That issue fell, as we see it, to be considered not just by reference to the one incident of a failure to tell the Appellant of the possibility that there might be a job working for the SUN network, but also by reference to what else the Respondent did. The Tribunal went to some lengths to set out those other matters and to commend the employer in those other respects for doing as much as it could to satisfy both its legal and moral obligations to the Appellant.[28]Upon that basis, had it been in issue, the Appellant would have faced a very uphill struggle in convincing us that, despite the unfairnesses done to the employee, which the Tribunal recognised and referred to in paras 57 and 77, in any event this dismissal was in all the circumstances unfair. It was a judgment for the Tribunal to come to. Although we would hope that in almost every case a Tribunal would be inclined to find it unfair to fail to tell an employee of alternative job opportunities that were within the employee's competence and which might have been open to him and perhaps to make a dismissal unfair, we recognise that this does not inevitably have to be the case and would have inclined to think that this was one of those exceptional cases.[29]For those reasons, we have no hesitation in dismissing this appeal.[30]We should add only this, relevant to a matter of practice: it emerged during the hearing that the final submissions were made in writing at the request of the Tribunal Chair. This, we know, is often done. What appeared to be the case was that those submissions, once prepared, were not exchanged between the parties. This failure to require that the submissions be exchanged, or the failure to exchange them (whichever it may be, and perhaps both) is something which is to be deprecated. It is essential that proceedings in public determining adversarial rights are determined with each party having a clear view of that which the other party is saying. If it is the practice that written submissions are not disclosed to the other party, it is a practice which should cease.[31]There has been application for leave to appeal here based upon two matters. One, the legal significance of this case, with the Court of Appeal not yet having had an opportunity to consider s98A(2), and secondly, whether a failure to inform must amount, in these circumstances, to a substantive rather than a procedural issue and therefore s98A(2) not being applicable. Although we recognise that the Court of Appeal has not yet, if it ever will, consider s98A(2), we think the law is clear. We do not think that there is any remote chance of arguing, in the circumstances of this case, that a failure to inform amounted to substantive rather than procedural failure and it follows that we see no reasonable prospect of success on appeal.[32]The application is therefore dismissed.