Lifeline Energy v Miedziolka (Unfair Dismissal : Polkey deduction) [2013] UKEAT 0258_12_1804

EAT
Lifeline Energy v Miedziolka (Unfair Dismissal : Polkey deduction)
[2013] UKEAT 0258_12_1804 · 2013-04-18
[1]The short point in this case is to do with the assessment of compensation under the doctrine in Polkey vAE Dayton Services Limited [1988] ICR 142 HL following an unfair dismissal. This is the judgment of the Court to which we have both contributed, the parties before us consenting in writing to it being heard by this constitution. We will refer to the parties as the Claimant and the Respondent. Introduction[2]It is an appeal by the Respondent in those proceedings against part of a judgment of an Employment Tribunal sitting at London (Central) under the chairmanship of Employment Judge Ms Sharma over two days, sent with reasons to the parties on 13 December 2011. The Claimant was represented by counsel from the Free Representation Unit, and the Respondent was represented by counsel too. Today the leading light in this small charity, Ms Pearson, represents it, and the Claimant represents herself. The Claimant claimed unfair dismissal as a result of being made redundant. The Respondent contended that she was dismissed fairly.[3]The Tribunal decided that she was unfairly dismissed, for the Respondent had failed to carry out a fair procedure leading to her dismissal. It then went on to assess compensation in the sum of £19,897.85, being the compensatory award, and noted that £1,200 would be payable as a basic award, which would be wiped out by the redundancy payment which was in fact made to the Claimant in that sum. So the outstanding award is in respect of compensation, and it is to that award that the Polkey doctrine applies.[4]The Respondent appealed, but at various stages on paper and at hearing, other grounds have been rejected and dismissed. Vouchsafed to us by a division of the EAT presided over by HHJ Peter Clark are two issues. They are Polkey and the Meek v City of Birmingham District Council [1987] IRLR 250 issue; that is whether there were sufficient reasons. Since that is the very narrow remit of this hearing, we hope we can be forgiven for being brief in our explication and also for taking advantage of the work done by that other division, so the circumstances are these:
“1. This is an appeal by Lifeline Energy, a charity and Respondent before the London Central Employment Tribunal, against the remedy findings of a Tribunal chaired by Employment Judge Sharma. The judgment is dated 11 November 2011 and the reasons for the judgment were promulgated on 13 December. 2. The Claimant, Ms Miedziolka, was employed by the charity as Head of Finance and Administration. It had some five employees. The Chief Executive Officer was Ms Pearson. 3. It seems clear that the charity encountered some serious financial difficulties and resolved that job cuts had to be made. In due course the Claimant was dismissed, it was common ground, by reason of redundancy. She was not replaced. The Tribunal found that that was unfair principally on the basis that no or no proper consultation had taken place. In particular, they found that there was the possibility of a part-time book-keeping post which the Claimant could have filled had she chosen to do so. There is no specific finding as to whether or not she was willing to take that post. It would have involved a substantial cut in salary. 4. The Tribunal went on to consider remedy and made two findings relevant to this appeal. First they concluded that the Claimant had not failed to mitigate her loss in that she went to Montenegro, where we are told she has a home, and attempted to set up a business which was sadly unsuccessful. However, the clear finding by the Tribunal was that there was no failure to mitigate. She had taken reasonable steps to mitigate her losses. She attempted to set up her own business in Montenegro but this was not successful.”
[5]The Tribunal decided that the Claimant was unfairly dismissed for procedural reasons because there was no consultation with her leading up to the redundancy. The Tribunal had in mind the principles set out in Williams v Compair Maxam [1982] ICR 156 and considered each of the criticisms made on the Claimant’s behalf against the five principles in Williams , Against those standards the consultation and warning failed. So the Tribunal had to consider, pursuant to Polkey , whether it would have made any difference if these defects were not found, and it came to this conclusion:
“22. Jan 4 th 2011: During the Skype conversation, the Claimant was told that she was at risk of redundancy. However, (para 13), the message being relayed to Ms Pearson to the Claimant was not clear, according to the Claimant. If such a conversation was forming part of the consultation process, this was not, on a balance of probabilities, made clear to the Claimant. The Tribunal determined that a reasonable employer would have ensured that such an important communication would have been clear; so as to leave the Claimant in no doubt at all as to what was happening. 27. Applying Duffy and Mugford, the Tribunal determined that a more detailed consultation than the one carried out and one which a reasonable employer would have carried out would have served a useful purpose. (Duffy) and would not have been utterly futile (Mugford). The Tribunal determined that a more detailed consultation may have changed the position from the Claimant being made redundant to that of her working as a part-time booker. Applying Polkey , the Tribunal determined that failure to consult did in this case render the dismissal unfair in the light of the circumstances known to the Respondent at the time of the dismissal (for instance, the Respondent knowing that the Claimant wanted to embark upon more consultation but this being refused by the Claimant (para 187). Alternative Employment 29. Applying the fifth “Compair” principle, the Tribunal determined that the Respondent had not acted reasonably in this regard. 30. The Claimant was not offered the position of part-time book-keeper (para 18). Had a full and detailed consultation taken place, both parties would have been given the opportunity to have expressed their own views as to the suitability or otherwise of this position for the Claimant. One reason given by the Respondent for not offering the role of part-time book-keeper was because Ms Pearson assumed that the Claimant was moving to Montenegro. The Tribunal were unable to determine whether this was a valid assumption to make, based upon the evidence presented to the Tribunal at the hearing. A reasonable employer would have put all personal circumstances of the Claimant to one side, however, and would have informed and offered the employee this position. 31. A reasonable employer would not have based its decision on whether or not to offer its employee a possible alternate position based upon assumptions only; a reasonable employer would have fully discussed this with the employee at risk of redundancy to see if such alternate employment could be offered so that the redundancy situation could be circumvented.”
[6]An issue was raised as to the Claimant’s competence, but there was insufficient evidence. The Tribunal then made its finding in relation to the compensation and awarded the Claimant 35 weeks’ pay, which was roughly the loss up to the date of the hearing. We have been told today that shortly after the hearing, the Claimant was able to obtain work at a much lower rate and so there really is no issue about the value of that. It is whether or not the Tribunal gave sufficient reasons for awarding the sum it did. As to Polkey , it said this:
“No Polkey reduction was applied as the Tribunal determined that that it had not been presented with enough evidence to be able to determine that even if a proper consultation had taken place, it would have made no difference as the Claimant would nevertheless have been made redundant.”
Arguments and conclusions[7]The assessment of loss by an Employment Tribunal is very much one of making decisions based on evidence as to what it predicts is likely to happen. The Tribunal cannot construct a world which did not exist unless there is some basis upon which it can make forward calculations (see Scope v Thornett [2007] IRLR 155 and Software 2000 Limited v Andrews [2007] IRLR 568 ). Application of the Polkey principle means that an employer, for it is an employer’s argument, has to produce some evidence to show that the defect identified on this footing as causing the unfairness would have made no difference. Here consultation, the Respondent had to say, would have made no difference to the outcome, for the Claimant would have been dismissed at that time in any event, even if the consultation had been flawless.[8]The Tribunal held that on this material there was insufficient evidence for it to make that decision and it followed that the award was not reduced. Only one issue was canvassed at the Tribunal hearing, which was whether or not the Claimant would have taken a bookkeeper’s job on considerably less pay and hours. She acknowledged in the course of her cross-examination that she would, but that was never put to her, nor were suggestions about what else could have happened.[9]Today we have taken a flexible approach to both these self-represented parties and note that it is the Claimant’s submission that had there been proper consultation with all of the staff, all sorts of alternatives might have been available to show that she should not have lost her job. We were told that one person was leaving anyway and there was a contractor who was not directly employed. There might have been discussion about more flexible working, utilisation of the Claimant’s qualifications in business studies and putting her to work as a fundraiser.[10]This is a very small and, if we may say so, highly worthwhile charitable organisation, which like many charities has faced difficulties in maintaining its role given a fall in available spending power by the public. At the time it employed about five people. But the point about Polkey criticisms is that one does not know exactly what would have happened had the procedure been operated fairly. That requires an assessment based on evidence, and there was no evidence that satisfied the Tribunal that the Claimant would have been dismissed in any event, and we can see why. There was, for example, the suggestion of the bookkeeping job, never discussed at the time, but only raised at the hearing. The Claimant acknowledged she would have taken it and so would not have been dismissed. But on the other hand, there may have been other suggestions and alternatives that might have saved her. It was for the Tribunal to assess that material in the light of whatever was put in front of it by the employer , but it was wanting. For that reason it was not in a position to accede to a submission that there should be a reduction in what was otherwise coming to the Claimant by way of compensation. This ground is dismissed.[11]As to the second ground, the lack of reasons, in our judgment the reasoning is short, but we can fully understand it and so can the parties. The Claimant was awarded her losses up to the date of the hearing and that is demonstrable from the figures. It made no forward loss calculations, and indeed, the Claimant was fortunate to obtain some work. The reasons seem to us to be plain, so ground 2 is also dismissed.[12]We would like to thank both Ms Pearson and Ms Miedziolka for the very measured way in which they have presented what is undoubtedly a stressful position for each of them before us today and we hope that this matter can be put behind them. We have been shown the woeful state of the accounts of the charity and its ability to pay. We have pointed out that that is not a matter for us to decide today. We hope that this matter can now be resolved between the parties perhaps with some discussion if there is an understanding of the financial position of the Respondent. The appeal is dismissed.