Samels v The University For The Creative Arts (Redundancy : Suitable alternative employment) [2011] UKEAT 0573_10_3008

EAT
Samels v The University For The Creative Arts (Redundancy : Suitable alternative employment)
[2011] UKEAT 0573_10_3008 · 2011-08-30
[1]This case is about unfair dismissal in the context of redundancy and the remedy applicable. I read the papers and I also read additional documents provided to me today. I will refer to the parties as the Claimant and the Respondent. Introduction[2]It is an appeal by the Claimant in those proceedings against a Judgment on liability of an Employment Tribunal chaired by Employment Judge T Elliott sitting at London South, registered with Reasons on 11 March 2010. A review of that Judgment was refused on 20 April 2010. I will take the Reasons together.[3]The Tribunal found in favour of the Claimant and proceeded to a remedy hearing, which resulted in a Judgment sent to the parties on 22 October 2010, where the Claimant was awarded £4,629.37 as a compensatory award. The Claimant represented himself throughout; the Respondent was represented by counsel. Essentially the Claimant had contended that his dismissal was unfair, and there should be no reduction in any compensation awarded to him.[4]The issue first was for the Employment Tribunal to decide on liability, it being common ground there was a redundancy situation in the Respondent university. The issue was set out as follows: “5. As the parties were in agreement that the Claimant had been dismissed and that it was for a potentially fair reason of redundancy the issues for the Tribunal were:5.1 Was the dismissal procedurally fair and;5.2 Was the dismissal within the range of reasonable responses open to the employer and;5.3 If the dismissal was not procedurally fair then the Tribunal had to decide what was the percentage chance of the Claimant being fairly dismissed? Those issues were outlined at the outset of the hearing on both 18 and 19 February 2010. 6. The relevant law is found at section 98(2)(c) of the Employment Rights Act 1996. It was accepted that the Claimant was dismissed and that the potentially fair reasons for dismissal was redundancy.[7]The principles in the case of Williams v Compair Maxam Ltd [1982] ICR 156 were considered including whether there was any alternative work available.”[5]In respect of remedy the Tribunal decided the issues were as follow:
“6. The issue for the Tribunal was to assess the Claimant’s losses flowing from his unfair dismissal in terms of his compensatory award pursuant to section 123 of the Employment Rights Act 1996 . In particular one of the principal issues for the Tribunal was whether to adopt the simplified or the substantial loss approach to pension loss. 7. Certain heads of compensation were agreed between the parties and the issues for the Tribunal to determine were in relation to future loss of earnings and pension loss. 8. The Claimant also sought either reinstatement or reengagement with the Respondent and this was resisted by the Respondent so it was an issue for the Tribunal to determine this question under sections 114‑116 of the Employment Rights Act 1996 .”
[6]Many issues were agreed between the parties in relation to the remedy, in particular that the Claimant had made substantial efforts to mitigate his loss, and the Tribunal was asked to consider reinstatement or re‑engagement. It decided not to pursue either of those, and the Claimant was awarded compensation. The Claimant appeals against both of those Judgments. I gave directions allowing his appeal against the Registrar’s out of time ruling.[7]The Appeal

Judge who first considered the merits was HHJ David Richardson, who formed the following opinion:

“I am here concerned with the Claimant’s appeal against the liability judgment of the Tribunal dated 11 March 2010. The question is whether there are reasonable grounds for saying that the Tribunal erred in law. Grounds (i) to (iii). I do not think the Tribunal erred in law in its conclusions. In this case the Respondent was not choosing which of several people holding the same position it should make redundant. It was re‑organising, dispensing with two grade 5 posts and replacing them with a single grade 4 post. Once granted that this was genuinely the position (disputed by the Claimant but accepted by the Tribunal as set out in paragraph 17 of its reasons), the Respondent was not engaging in a selection process. It did not have to place storemen in the same pool or apply some additional objective test. It was entitled to make the two people holding the grade 5 posts redundant. Ground (iv). This was a question of fact for the Tribunal. I do not see any real prospect of establishing perversity. I see that the ET1 said only that the consultation process, agreed by the unions, was ‘inadequately applied’. The ET3 said it was the first step in the consultation process. The Tribunal had material on which it could reach the conclusion it did. Ground (v)-(vi). Once the Tribunal found the dismissal unfair on the ground that the Respondent failed to offer the Claimant alternative work it was obliged to make an assessment of how likely it was he would have accepted that work. This would be the case whether the Tribunal called the failure procedural or substantive. The Tribunal’s assessment of 25% is a question of fact, not a question of law. There were reasons for that assessment and I am not persuaded that there is any realistic chance of establishing that it was perverse or unreasoned. Ground (vii). I do not think the Tribunal intended in paragraph 16 to say that the appeal hearing’s conclusions were correct; merely that the appeal hearing addressed the main issues. In any event, the Tribunal found the dismissal unfair by reason of the failure to offer the Claimant the alternative work, so this ground on its own would make no difference to the outcome. For these reasons I consider that the Notice of Appeal contains no reasonable grounds for appealing.”
[8]Dissatisfied with the Judge’s opinion, the Claimant exercised his right under rule 3(8), which provoked the following opinion from

Judge Richardson:

“’Pool of one’. As I understand the position, there were 2 grade 5 posts which were replaced by one grade 4 post. But his colleague Julie Flude applied for and took the grade 4 post. He did not. So although two posts were redundant he was the only one left to be dismissed. I think this is all the Tribunal mean when they use the phrase ‘pool of one’. Fairness in selection and Lack of objectivity in selection. Please see what I have already said about the question of selection when considering the previous Notice of Appeal at (i)‑(iii) set out in the Appeal Tribunal’s letter dated 3 February 2010. I do not think the Tribunal erred in law in its consideration of this part of the case. Substitution. The Tribunal was fully entitled to conclude that a manager against whom a complaint has been dismissed may continue to carry out his duties as manager in respect of the employee who made the complaint. There is no error of law or impermissible substitution involved in reaching this conclusion. Bad faith. Whether the Respondent was motivated by bad faith was a question of fact for the Tribunal to determine. There is no prospect of establishing that the Tribunal’s finding was perverse. Consultation, including consultation about savings and appeal. The Notice of Appeal sets out a range of arguments about consultation. But the Tribunal directed itself correctly in law, having the principles in Williams well in mind. The Tribunal found that the Claimant chose not to attend the meeting on 20 March 2009: see paragraph 14 of the reasons. I cannot see any error of law in the Tribunal’s reasoning. Polkey /Redeployment. I see no error of law in the way in which the Tribunal has dealt with these matters.”
[9]The Claimant’s appeal against remedy was dealt with by

Judge Richardson as well; the extant opinion is as follows:

“Although the Claimant has now ably furnished his grounds with legal references, I can detect no error of law in the reasoning of the Tribunal and no point with reasonable prospects of success. Grounds 19‑22. On the re‑engagement issue, the Tribunal applied well known legal principles and made no error of law. The references which the Claimant provides in paragraphs 19‑21 of his grounds set out no principles of law of relevance to the case. Grounds 23 and 24. I have not understood the relevance of these issues, given that the question was what compensation the Claimant should receive for not being offered alternative part time employment when his position was redundant. I do not see why the Tribunal was obliged to consider these issues. Grounds 25 and 26 and 28. I see nothing perverse about the Tribunal’s careful consideration of the pension issue. The Tribunal did consider his career prospects (unless ground 26 makes the same point as ground 24, in which case see above). Ground 27 and 29‑32. The Tribunal’s finding that he would find suitable employment is not perverse or unreasoned. Nor are its findings relating to use of facilities, etc. The relevance of tax was only to the question whether any such benefits as the Claimant said existed would be taxable in law. That is related to taxation statutes, not to section 123 - paragraph 31 is misconceived. The Tribunal did not misdirect itself in paragraph 29 as the Claimant suggests - it referred to a policy not to a contractual document. Ground 33 and 34. I have some sympathy with the Claimant if, as appears to be the case from his Notice of Appeal, he agreed figures which wrongly gave credit for some earnings which he would have had even if he had been employed part‑time by the Respondent. The Tribunal, I will accept, had a discretion to allow him to withdraw his agreement. But there is only an appeal if the Tribunal erred in law in the exercise of its discretion. I cannot see why it did, if the Claimant first sought to withdraw his concession in final submissions.”
The legislation[10]The legislation is not in dispute; it is, as summarised by the Employment Tribunal, found in the Employment Rights Act 1996 . Fairness is dealt with under section 98(4), and includes all issues of fairness commonly reduced to the shorthand of substantive and procedural unfairness. As to compensation, section 123 provides for what is just and equitable to be awarded. The facts[11]The Respondent is a substantial educational institution employing some 800 people. It is common ground that a redundancy situation existed in 2009, and the university was required to make very substantial staff savings. The Tribunal found as follows:
“8. The Claimant’s post was at grade 5 and his colleague Julie Flude was also a grade 5 and the two posts were amalgamated to create a new grade 4 post. 9. We felt that there was some confusion on the part of both parties as to the difference between a rationale for redundancy and selection criteria. We saw the document at page 657 of the bundle as a rationale for redundancy as to why the post or posts were proposed for redundancy. 10. In our judgment selection criteria come into focus when there is more than one individual in a particular post. Our finding of fact is that the Claimant was the only person at Farnham occupying the role of a grade 5 equipment technician. He was alone in that category and therefore in a pool of one. 11. The Tribunal cannot go behind the managerial reasons for redundancy. It is not for us to tell the Respondent how they should manage their business or which posts should or should not be identified for redundancy. What we are concerned with is the fairness of the process and the reason for the dismissal.”
[12]The Claimant was offered a meeting, which he failed to attend because he thought he would be prejudiced by the involvement of Mr Jones, the Resources Manager who was his line manager, against whom he had made a complaint of bullying and harassment. The Tribunal found that the point could have been put by the Claimant to Mr Coyle, the Executive Dean, who was Mr Jones’ line manager, and there was no bad faith. This is made clear by the response on the review. The Claimant attended an appeal panel; there is no express finding as to the fairness of that, but the Claimant offers the view that there is an implied finding that there was no unreasonableness about the appeal. The appeal dismissed the Claimant’s case. The passages from the Employment Tribunal’s Judgment up to the question of alternative employment indicate the formation of a view against the Claimant, in that as one reads these passages it appears that the Respondent had not done anything unfair.[13]The Tribunal then looked at the issue of alternative employment and identified three posts. In fact there were four, and we will include the whole of the passages relating to this:
“18. We now turn to the issue of suitable alternative employment. There were three posts identified: (i) Workshop Technician at Canterbury. The Claimant understandably turned this down as it was a very difficult commute and only a part‑time post. (ii) Metal Foundry role which the Claimant rejected. He described this as similar to a ‘blacksmith’s role’ and we find that although the Respondent, as a higher education establishment, was prepared to offer training for this, we equally accept that the Claimant was not suited for the role. (iii) As a result of the disestablishment of the Claimant’s role and his colleague Julie Flude’s role both of which were at grade 5, a new grade 4 role was created of EHD support. The Claimant was given the opportunity to apply for this post. He said he regarded it as Julie’s post and out of loyalty to her he did not apply for it. Nevertheless that was a matter of his choice and by not applying for it he increased his risk of being made redundant. He explained that it was a lower grade post but it was also accepted that there was pay protection available. However it was a term‑time only post and this had not been the Claimant’s work pattern to date and it would have resulted in an overall lower salary. In our view we do not believe that the Claimant was unreasonable in refusing these roles but we do find that he increased his risk of becoming redundant by not applying for the grade 4 position. 19. We considered in detail the fact that a stores person Mr Craig Lamer left his employment on 23 February 2009. He was on a job share with Mr Scott Shortland and we have noted from document C1 that Mr Lamer had a 0.4 post and Mr Shortland had a 0.7 post. They were both on a lower grade post of grade 4 and the Claimant was full‑time. We have considered whether there was a failure to offer suitable or alternative employment in this respect and we also take into account the Respondent’s policy at page 27 of the bundle which states methods of avoiding redundancy which include restrictions placed on recruitment and also holding other vacancies for redeployment opportunities.”
[14]Thus up to the end of paragraph 17, in simple terms, the Claimant was failing in his claim. Paragraph 18 indicates that he was right to reject suitable employment offered to him, but paragraph 19 indicates a failing by the Respondent which was itself the reason for the finding of unfair dismissal against it, and the Tribunal concluded in the following way at paragraph 20:
“20. The judgment of this Tribunal therefore is that there was a failure to offer this suitable alternative employment and for that reason we find that there was procedural unfairness and therefore the Claimant was unfairly dismissed.”
[15]This was an unfair dismissal because of the failure to offer the extant position of Mr Lamer to the Claimant. The Tribunal therefore considered Polkey v AE Dayton Services Limited [1988] ICR 142 HL. It concluded in the following way:
“21. However we have also considered the Polkey issue and we take the view and our finding is that even if the Claimant had been offered Mr Lamer’s post there is a 75% chance that he would not have accepted it. Our reasons for this are as follows. (i) In many respects we rely on the same reasons that the Claimant gave for not accepting the grade 4 post which subsequently was accepted by Julie Flude. It was at a lower grade and the Claimant said that he thought that they would be able to ‘sort something out on flexibility’ but the Respondents were not obliged to adjust Mr Shortland’s job in order to fit in with the Claimant. (ii) There was no guarantee that even if flexibility was considered, that the Claimant would have got the arrangements he wanted. He told us that he was not keen on working on the mornings and he said that sometimes he also took freelance work. (iii) The Claimant also said in evidence that if he had been offered Mr Shortland’s job there was ‘a chance’ that he would have accepted it and we therefore assess that percentage chance at 25%. This will result in a 75% Polkey reduction.”
[16]The Tribunal was correct to deal with the issue of Polkey since it arises in every case where there has been a failure on procedural grounds. At the remedy hearing, first it considered the issue of reinstatement and re‑engagement. The Tribunal considered that although the Claimant was aggrieved as a result of his dismissal he did not hold sufficient trust and confidence for a future employment relationship to be practicable. Because of that fundamental lack of trust re‑engagement or reinstatement was not ordered.[17]The Claimant’s case then turned to the losses, and the Tribunal rejected a number of heads of claim for reasons that it provided. These included the use of facilities to employees in a non‑work capacity, the amount of deductions from the Claimant’s freelance work and pension.[18]As to pension, the Tribunal regarded itself as guided by the guidelines contained in Compensation For Loss of Pension Rights - Employment Tribunal (Third Edition) , as applied in Bentwood Brothers (Manchester) Ltd v Shepherd [2003] ICR 364 and in my own Judgment in Orthet Ltd v Vince‑Cain [2004] IRLR 857 . It chose, for reasons set out in paragraph 37, to apply the simplified formula and appropriate multiplier. As to future loss of earnings, these were based on the earnings of Craig Lamer, who, it will be recalled, was the person who had left and whose job was not offered, and it made a future loss of earnings award in the Claimant’s favour. It also made an award in respect of expenses seeking to obtain work. To all of the relevant awards a deduction of 75 per cent was made under Polkey . The Claimant’s case[19]In a well‑researched and scholarly skeleton argument of 15 pages, supported by extracts from some 26 authorities, the Claimant contends that both of the Employment Tribunal Judgments were wrong. I indicated in order to assist the Claimant that I had read the skeleton argument but invited him to make any additional submissions, and he has done so. The scope of the submissions on liability mirrors the impression one gets from reading the initial part of the Judgment on liability, which is that the Claimant was about to lose his case. Many of the arguments Mr Samels addressed to me are in the language commonly associated with an appeal by an employee against the dismissal of his or her unfair dismissal claim; it is the opposite here. Arguments based on substitution of the Employment Tribunal’s Judgment for that of the employer are those that commonly appear in employers’ appeals against a finding of unfair dismissal.[20]The principal contention relates to a number of criticisms of the procedure in this case. Mr Samels helpfully before me accepts that those relating, for example, to consultation are procedural matters and would invoke a Polkey finding. However, he contends that the findings in this case go to the very heart of the decision‑making and are aptly described as “substantive” (see, for example, the reliance the Claimant places on the Judgment I gave in Marshalls of Cambridge Aerospace Ltd v Warnock [2003] UKEAT/0250/03). He also contends that the Tribunal was wrong to regard him as being in a pool of one. Discussion and conclusions[21]I am sure he feels dissatisfied when I say that I do not accept the criticisms that are made of the Employment Tribunal, and I fully agree with the opinion expressed twice by Judge Richardson in this matter in a very thorough rule 3 opinion. It is clear to me that the Tribunal was expressly applying the law as set out in Williams . It is also clear that the Tribunal was correct in its finding that the Claimant was the only person at Farnham occupying the role of a grade 5 equipment technician. He accepts that before me. The conclusion that he was in a pool of one is one he resists. With respect, I do not see the logic in that. If he is the only person in that position, then he is properly described as in a pool of one, so selection criteria do not come into it. The choice therefore of employees to be dismissed is not a difficult one. It must be borne in mind that it was in Polkey itself that the House of Lords described the process of unfairness in selection in redundancy, for Lord Bridge said this:
“In the case of redundancy the employer will normally not act reasonably unless he warns and consults any employees affected or their representatives, adopts a fair decision which to select for redundancy and takes such steps as may be reasonable to minimise a redundancy or redeployment within his own organisation.”
[22]The learned authors of Harvey (at D/1685) describe the process of selection as follows:
“Ultimately the pool from which the selection will be made is for the employer to determine and, in the absence of a customary arrangement or procedure, it will be difficult for an employee to challenge where the employer can show that he has acted reasonably.”
[23]The central issue in this case was about what alternatives could be offered. The obligation on an employer under Williams is to consider whether there are other jobs available (see Vokes Ltd v Bear [1973] IRLR 363 and my Judgment in Evans v Capio Healthcare (UK) Ltd [2004] UKEAT/0143/04, relied on by Mr Samels in this case (as the decision not to search for other work in this substantial organisation went to the heart of the unfairness of the dismissal). In this case there was a search for other work; three other posts were identified. The Claimant chose not to apply for the one following disestablishment of his own post, gallantly holding the door open for Julie Flude, but that was his decision. The real issue in the case was why the Respondent had not made available the work of Mr Lamer when he left, and it was for that that the Tribunal made its decision that the Respondent fell below the standard of a reasonable employer in these circumstances. The difficulty for the Claimant is challenging that decision in his favour.[24]In my judgment, it was a decision that was open to the Tribunal and has certainly not been appealed by the Respondent, and the unfairness in this case consisted of just that. The fact that there may not have been sufficient consultation with the Claimant was one that was discussed by the Employment Tribunal and, as it said, it was just about enough to pass the relevant tests. In my judgment, the finding on liability cannot be challenged by the Claimant, since he won. The finding that it was unfair for the procedural reason that Mr Lamer’s job was not offered to him cannot be challenged either. What follows is that there would be a Polkey reduction if there were evidence as to that, and in the passage I have cited from the Judgment there is acknowledgement by the Claimant that there was a chance of other work being available to him and accepted by him. The assessment of a chance is for the Employment Tribunal to determine. This has been described as speculation (see Scope v Thornett [2006] EWCA Civ 1600 ), but it is a job for which the Employment Tribunal is uniquely qualified. It is to make the assessment as best it can. I see no error in the Employment Tribunal’s approach to a Polkey reduction; indeed, it was bound in the circumstances to consider and to make such a reduction, and the percentage reduction is a matter of fact for it to decide upon its own assessment.[25]Before turning to the remedy I must deal with the issue of Mr Jones and bad faith. This is disposed of by the Employment Judge’s refusal of the application for review under rule 35(3), there being no bad faith whatever in all of this process.[26]I then turn to the remedy appeal. Again, with respect, my opinion is the same as that of Judge Richardson. I of course read a good deal more, but it seems to me that the decision of the Employment Tribunal first that there should be no re‑engagement was one that was open to it. Re‑engagement is a very unusual remedy; less than 1 per cent of all successful claims achieve this, and issues such as practicability addressing the employer’s argument to it must be matters of fact for the Employment Tribunal. The essential argument put by the Claimant is as to the forward losses and as to other matters of calculation within the award made. In my judgement, these issues of calculation and fact are for the Employment Tribunal. Where there was evidence, it applied it, and was assisted by the evidence in making the projections forward along, for example, the Bwllfa and Merthyr Dare Steam Collieries (1891) Ltd v Pontypridd Waterworks Co [1903] AC 426 , 431 principles so memorably contained within the speech of Lord Macnaughten as follows:
“If the question goes to arbitration, the arbitrator’s duty is to determine the amount of compensation payable. In order to enable him to come to a just and true conclusion it is his duty, I think, to avail himself of all information at hand at the time of making his award which may be laid before him. Why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?”
[27]Ultimately these are challenges on appeal based on perversity and lack of reasons. These are customary grounds of appeal before our Tribunal. The Judgment in neither case is perverse, and there are ample reasons to justify the Tribunal’s findings. I appreciate that Mr Samels, having come so far, continues to be disappointed, but he must bear in mind that he succeeded before the Employment Tribunal and he succeeded in obtaining a remedy at the second hearing. These are orders in his favour. At many stages during this afternoon’s proceedings he sounded as though he had lost at the Tribunal, but the opposite of course is the case. I would like to thank him very much for his erudite written and oral submissions, but the application is dismissed. Pemission to appeal refused [reasons not reproduced].