Kelly & Anor v The Hesley Group Ltd (Redundancy : Collective consultation and information) [2013] UKEAT 0339_12_1904

EAT
Kelly & Anor v The Hesley Group Ltd (Redundancy : Collective consultation and information)
[2013] UKEAT 0339_12_1904 · 2013-04-19
[1]Dismissal of more than twenty employees from an establishment for reasons unrelated to the individuals concerned brings into play measures intended to provide some protection for the employees potentially affected. This appeal concerns whether an Employment Tribunal at Sheffield understood and applied the law correctly when in Reasons given on 28 th February 2012 it dismissed the Claimants’ claims that they should be entitled to a protective award for failures in the process of consultation prior to the proposed dismissals taking place.[2]Section 188 of the Trade Union and Labour Relations (Consultation) Act 1992 provides as follows, so far as material:
“188 Duty of employer to consult representatives . E+W+S (1)Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals. (1A)The consultation shall begin in good time and in any event— (a)where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 90 days, and (b)otherwise, at least 30 days, before the first of the dismissals takes effect. (1B)For the purposes of this section the appropriate representatives of any affected employees are– (a)if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union, or (b)in any other case, whichever of the following employee representatives the employer chooses:– (i)employee representatives appointed or elected by the affected employees otherwise than for the purposes of this section, who (having regard to the purposes for and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf; (ii)employee representatives elected by the affected employees, for the purposes of this section, in an election satisfying the requirements of section 188A(1). (2)The consultation shall include consultation about ways of— (a)avoiding the dismissals, (b)reducing the numbers of employees to be dismissed, and (c)mitigating the consequences of the dismissals, and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives. (3) ……. (4) For the purposes of the consultation the employer shall disclose in writing to the appropriate representatives— (a) the reasons for his proposals, (b) the numbers and descriptions of employees whom it is proposed to dismiss as redundant, (c) the total number of employees of any such description employed by the employer at the establishment in question, (d) the proposed method of selecting the employees who may be dismissed, (e) the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect and (f)the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliance with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed. (5) That information shall be given to each of the appropriate representatives by being delivered to them , or sent by post to an address notified by them to the employer, or (in the case of representatives of a trade union) sent by post to the union at the address of its head or main office. ……………………. (7B)If, after the employer has invited affected employees to elect representatives, the affected employees fail to do so within a reasonable time, he shall give to each affected employee the information set out in subsection (4)….”
Section 189 of the 1992 Act also contains material provisions: - “189 (1) Where an employer has failed to comply with a requirement of section 188 …., a complaint may be presented to an employment tribunal on that ground– (a) in the case of a failure relating to the election of employee representatives, by any of the affected employees or by any of the employees who have been dismissed as redundant; (b) in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related, (c) in the case of failure relating to representatives of a trade union, by the trade union, and (d) in any other case, by any of the affected employees or by any of the employees who have been dismissed as redundant. (1A) If on a complaint under subsection (1) a question arises as to whether or not any employee representative was an appropriate representative for the purposes of section 188, it shall be for the employer to show that the employee representative had the authority to represent the affected employees. (1B) On a complaint under subsection (1)(a) it shall be for the employer to show that the requirements in section 188A have been satisfied. (2) If the tribunal finds the complaint well-founded it shall make a declaration to that effect and may also make a protective award. (3) A protective award is an award in respect of one or more descriptions of employees— (a) who have been dismissed as redundant, or whom it is proposed to dismiss as redundant, and (b) in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188, ordering the employer to pay remuneration for the protected period. (4) The protected period— (a) begins with the date on which the first of the dismissals to which the complaint relates takes effect, or the date of the award, whichever is the earlier, and (b) is of such length as the tribunal determines to be just and equitable in all the circumstances having regard to the seriousness of the employer’s default in complying with any requirement of section 188; but shall not exceed 90 days ……………… ” Section 196 of the Act deals with the circumstances in which a person will be an employee representative. It provides, materially: - “196 Construction of references to representatives . (1) For the purposes of this Chapter persons are employee representatives if— (a) they have been elected by employees for the specific purpose of being consulted by their employer about dismissals proposed by him, or (b) having been elected or appointed by employees (whether before or after dismissals have been proposed by their employer) otherwise than for that specific purpose, it is appropriate (having regard to the purposes for which they were elected) for the employer to consult them about dismissals proposed by him, and (in either case) they are employed by the employer at the time when they are elected or appointed…. (3) References in this Chapter to affected employees are to employees who may be affected by the proposed dismissals or who may be affected by measures taken in connection with such dismissals.”[3]The employer provides long term residential care and education services for people with learning difficulties, challenging behaviours, complex needs and autistic spectrum disorders. They employ approximately 1,200 people in South Yorkshire: amongst them some 300 members of staff at a school known as Fullerton House, which provides residential education. Recent financial pressures led management to conclude it would be desirable to change the contracts of these employees to save money by reducing their hours, freezing their salary, and reducing the overtime rate in particular.[4]By 31 st August 2010, the employer had proposed changes to the contracts. It sought agreement to those changes, so that the changed contracts would in law be the original contracts as varied. It is trite law that an employer cannot impose a contractual change upon an employee without the latter’s consent. If consent is forthcoming, there is no termination of the contract, but instead a variation. If consent is not forthcoming, then one option for the employer is to exercise his contractual right to give notice under the contract, so as to terminate it, and offer a fresh contract on the new terms to the employee concerned. In law, that constitutes a dismissal. If the appropriate number of dismissals to engage the obligations in Section 188 of the 1992 Act is proposed, then this will come within provisions of that section. These are known as “collective redundancy” provisions, although the termination of contracts with a view to re-engagement on different terms might not accord with the popular idea of redundancy: the factual context is far removed from such as the closure of a plant, rendering the workers at the plant redundant in both the Section 188 sense and the sense in which ‘redundancy’ is used in the Employment Rights Act 1996 . Nonetheless, it will fall within Section 188: and the requirements of Section 188 must be satisfied just as in the more familiar forms of redundancy.[5]By 25 th November 2010, it became apparent that there was a possibility of job losses if proposals were not agreed. The Tribunal found (Paragraph 8.16) that by 7 th . December, although the company was trying to save jobs by securing the agreement of its employees to a variation of their contracts of employment, it recognised that an alternative might involve job losses - termination of the original contract, and the offer of re-employment on the revised terms, for those who would not agree to a variation, was a possibility.[6]In the event, in January 2011 96% accepted the varied terms which had been offered, in respect of which there had been considerable prior discussion between management and staff. 32 employees did not.[7]The Tribunal found (paragraph 8.21) that on 10 th February 2011 the employer wrote to those members of staff who had not returned signed new contracts to advise them that the employer would now enter into collective consultation in relation to its proposal to terminate their contracts and offer re-engagement on the new terms and conditions.[8]Although the Tribunal thought that the employer did not realise that what it proposed fell within the definition “dismiss as redundant” contained in Section 188 (1), since redundancy is defined by Section 195 of the 1992 Act as being a dismissal “for a reason not related to the individual concerned or for a number of reasons all of which are not so related” the employer was indeed under the duty to consult contained in Section 188. That duty arises under Section 188 (1) as soon as the employer “…is proposing to dismiss as redundant…”[9]It was argued before the Tribunal that the word ‘proposing’ was to be interpreted in the light of Council directive 98/59/EC (“The Collective Redundancies Directive”), Article 2 of which provides:- “(1) Where an employer is contemplating collective redundancies, he shall begin consultations with the workers’ representatives in good time with a view to reaching an agreement.” The word “proposing” might at first blush seem a more definite a state of mind than used here, being close to intending, since “contemplating” suggests an earlier stage, before proposals are formed or at least while they are in an early stage of evolution. However, since the domestic statute is intended to implement in domestic law the obligations derived from European Directives, it is argued by the claimants that the word “proposing” should be construed as far as possible to be consistent with the sense in which the word is used in that Directive. Thus it was argued that the Tribunal should at the latest have concluded as a matter of fact that the dismissal of employees who refused to sign up to the new contractual terms was contemplated in very early November 2010 if not before.[10]That suggestion was made to the Tribunal, and it rejected it. At paragraph 11.1.2 it said that it needed to be clear about what “proposing” meant in the context. It regarded itself bound by the decision of the Employment Appeal Tribunal in MSF v Refuge Assurance plc [2002] IRLR 324 .[11]This gave rise to the point of law argued first on the appeal to us. Ms Tether, who appeared on behalf of the Claimants (though she did not appear below), sought to argue the same point as the Tribunal had rejected.[12]She accepted that in R v British Coal Corporation ex party Vardy [1993] ICR 720, when the Court of Appeal was considering the duty of the British Coal Corporation to consult its workforce in respect of proposed pit closures (a matter to which the Coal Industry Nationalisation Act 1946 applied) observations were made by Glidewell L.J. (at 753 A-D) about whether the wording of Section 188 of the Act of 1992 could be reconciled with the Directive:
“First, it is a principle of statutory construction that, where a statute or statutory instrument is expressly enacted for the purpose of complying with a Council Directive, the courts of the United Kingdom are under a duty to give a purposive instruction to the statute so as to accord, if possible, with decisions of the European Court of Justice on the Directive: see Litster v Forth Dry Dock and Engineering Co Ltd [1989] ICR 341 . However, in this case no decisions of the Court of Justice on the correct meaning of Directive 75/129/EEC …” ( the predecessor to the Directive of 1998 ) “…have been put before us, and, in any case, in my view, the difference between the wording of the Directive and the wording of Section 188 of the Act of 1992 is such that the section cannot be interpreted as having the same meaning as the Directive. I say this because in the Directive consultation is to begin as soon as an employer contemplates redundancies, whereas under the Act of 1992 it only needs to begin when he proposes to dismiss as redundant an employee. The verb “proposes” in its ordinary usage relates to a state of mind which is much more certain and further along the decision making process than the verb “contemplate”; in other words, the Directive envisages consultation at an early stage when the employer is first envisaging the possibility that he may have to make employees redundant. Section 188 applies when he has decided that, whether because he has to close a plant or for some other reason, it is his intention, however reluctant, to make employees redundant…”
[13]In MSF v Refuge Assurance plc and another [2002] ICR 1365 an Employment Tribunal held that there was no duty to consult under Section 188 (1) before an employer had formulated its own proposals. An appeal was brought upon the ground that the duty to consult was triggered at an earlier stage – when the employer was “contemplating” redundancies. An appeal to the Appeal Tribunal was dismissed by a Tribunal presided over by Lindsay J as President. The point thus arose for direct decision in a way in which it had not in Vardy . In an extensive review of the principles and then relevant cases the Appeal Tribunal held that “contemplation” referred to the time when an employer first envisaged the possibility that he might have to make employees redundant, but then observed (paragraph 42):- “…in our view, if our construction of the requirements of the Directive is right, then Section 188 cannot be made to accord with it without distortion. Pace the Hartlebury Case” [ In Re Hartlebury Printers Ltd [1992] ICR 559] “..it would distort the section’s “is proposing to dismiss” to make it akin to the Directives “is contemplating”. We respectfully adopt Glidewell LJ’s view in Vardy ’s case that “proposes” relates to a state of mind which is much more certain and further along the decision making process than the verb “contemplate”: see also Association of Patten Makers and Allied Craftsmen v Kirvin Ltd [1978] IRLR 318, 320, para 9 and see obiter in Scotch Premier Meat Ltd v Burns [2000] IRLR 639, 641, paras 14 and 15. There Lord Johnston giving the judgment of the Appeal Tribunal inclined to the view that it was extremely difficult if not impossible to construe “proposed” as wide enough to cover “contemplation”; he added:
“What concerns us is whether the less can include the greater while the opposite is certainly the case.”
[14]At paragraph 44, Lindsay P added that the question was to be approached on the basis that on a straightforward construction of the language of Section 188 a “proposal” to dismiss emerged at a stage later than the “contemplation” of redundancies. “Of the meanings of “to propose” given by the Shorter Oxford English Dictionary perhaps the most fitting in context is “to lay before another or others as something which one offers to do or wishes to be done.”[15]Ms Tether accepted the Tribunal had been bound to apply MSF , but asked us to depart from it. Although we were taken to Middlesborough Council v TGWU [2002] IRLR 332 it was of no assistance: it did not consider the timing at which consultation should begin, and in any event was decided prior to MSF . Nor did we consider Securicor Omega Express Ltd v GMB [2004] IRLR 9 (the Appeal Tribunal presided over by Mr Justice Burton (President)) to be of assistance. The only other relevant domestic authority to which we were taken was that of UK Coal Mining Ltd v National Union of Mine workers (Northumberland Area) and Another [2008] ICR 163 , again a decision of the Appeal Tribunal, presided over by Elias J as President. It had been argued before the Appeal Tribunal in that case that the obiter comments in Vardy no longer held good after amendments had been made to Section 188 in 1995 (they were made consequent upon a decision in The Commission of The European Communities v United Kingdom Case C-383/92 [1994] ICR 664 , as a result of which Section 188 (1) was amended to include the obligation that consultation should be with a view to reaching agreement.) The judgment turned at paragraph 85 to deal with the meaning of “proposed” and that of “contemplated”. Elias J said this:- “The issue, however, is whether it is possible to give effect to Section 188 so as to achieve [the result contended for by the Unions]. One way potentially would be to read “proposed” so that it means “contemplated”. That would bring domestic law wholly in line with the Directive. However… both the Divisional Court in Vardy and the Employment Appeal Tribunal in MSF v Refuge Assurance plc have expressed the view that, even given the generous scope for interpreting rules compatibly with European law, this would step beyond the legitimate parameters. We have some reservations about that conclusion, but in an area where that assessment is very much a matter of impression, we feel that it would be wrong for a court at this level to depart from those established decisions.” We take it that this Appeal Tribunal therefore had three reasons for reaffirming the MSF approach. First, it was a decision of the Employment Appeal Tribunal – and respect for the decisions of courts of coordinate jurisdiction is such that in general a court will not depart from such a decision (though it has the power to do so) unless satisfied that that decision is wrong. Second, the point was established (consistency and predictability in law are aspects of justice). Third, the assessment of whether a word could be interpreted with the width necessary to permit the argument was “a matter of impression”- i.e. a matter upon which views might legitimately differ, such that a decision in favour of either view could not be said to be wrong: it would therefore follow that consistency, certainty and predictability argued that the approach in the earlier case should be followed.[16]We, for our part are presented with the same argument again as put before Elias J. We reject it for the same reasons. This ground of appeal fails.[17]We should add that in the course of argument we were shown the case of Keskusliitto v Fujitsu Siemens Computers [2010] ICR 444 , a decision of the European Court of Justice which post-dates UK Coal Mining. This would be relevant only if there were a free-standing right derived from the Directive (which there is not because it is not directly effective) or if it filled in the gaps in the UK courts’ knowledge of the position of the European Court on the meaning of the Directive to which Glidewell LJ referred in Vardy , so as to strengthen an argument that purposive construction might support the Claimant’s case and undermine some of the case-law underpinning the decision of MSF v Refuge Assurance to the effect that the Directive and the domestic statute cannot be reconciled on this point. However, prior to Keskusliitto came the decision of the CJEU in Junk v Kühnel [2005] 1C.M.L.R. 42. This expressed, if anything, views of the meaning of “consultation” which were more favourable to the claimants’ case than did the later European decision. The Appeal Tribunal deciding UK Coal Mining was specifically referred to the decision in that case. Since the basis of our decision is as set out at paragraphs 15 and 16 above, following the lead of UK Coal Mining, this later European Court decision does not change our approach. We note, moreover, that the wording used in Keskusliitto, though it lacks clarity, would on one reading be entirely consistent with the approach UK Courts have felt obliged to take under Section 188 of the 1992 Act : thus the answer to the first question posed to the CJEU is to the effect that Article 2 (1) of Council Directive 98/59 EC “…must be interpreted to mean that the adoption… of strategic decisions or of changes in activities which compel the employer to contemplate or to plan for elective redundancies give rise to an obligation on that employer to hold consultations…”. “Contemplation” might be thought to describe a stage which precedes “planning for”, and those latter to be akin to the stage of “proposing”, if not an even later stage when the bare bones of a proposal are fleshed out with some detail. If the judgment intended to equate “contemplation” with “planning for” then it would suggest there is no such incompatibility between the domestic statute and the European Directive as UK case-law has supposed. The precise meaning of the answer of the CJEU is made no easier by the internal reference in its judgment to the duty to hold consultations arising “in connection with the existence of an intention on the part of the employer to make collective redundancies” (paragraph 39: emphasis added), and see the Advocate General at paragraph 56 and 60.[18]We are comforted in finding the reasoning in Keskusliitto v Fujitsu Siemens Computers difficult to follow by noting that that was the view, too of Rimer LJ when giving the judgment of the court (Laws, Hooper, Rimer LJJ) in United States of America v Nolan [2010] EWCA Civ 1223 as expressed at paragraph 53. The court was inclined to interpret the Advocate General as favouring the view that the obligation to consult only arose:
“…once the crucial operational decision is taken and the employer is then contemplating or intending the collective redundancies made necessary by that decision.”
Since the point at which the Court was inclined to think European Law suggested the obligation to consult arose was after the “crucial operational decision” had been taken, it was arguable there is less difference between “proposing” as used in Section 188, and “contemplating” as used in the language of the Directive than had previously been supposed. Appropriate Representatives?[19]There was no union recognised for the purpose of consultation in respect of collective redundancy. Section 188 (1B) (a) therefore did not apply. Nor did Section 188 (1B) (ii). The employer chose to consult with the employee members of a joint consultative committee. This existed on both an establishment and on a group-wide basis. The employer consulted with the Group JCC. This body was set up (JCC Constitution, paragraph 3) as an advisory body to communicate the views of staff to management and vice versa. It was expressly set out (in clauses 2 (i) and 3 of the Constitution) that the JCC was not intended to and did not have a negotiating function. Representatives were to be elected following nomination, except in the case that there was no other contender who had been nominated for the post. In the event of a vacancy (Clause 6) that was to be filled by the person originally nominated at the election for the group who had received the next highest number of votes.[20]Despite this Constitution providing for nomination and election, the employer referred to the necessity to co-opt people onto the JCC “…to ensure that everyone has their voice heard…” The Tribunal made no finding as to the appointment of the rest of the general membership of the JCC, but in 8.9 recorded that Mr Kelly, one of the two Claimants “…became co-opted or elected…” without specifying which. It did not record that it had explored the process of co-option.[21]Section 196 requires the employer to consult “appropriate” representatives. In deciding whether the representatives were appropriate, the Tribunal considered the constitution of the JCC and then said:- “There were various employee representatives including Mr Jackson. By the date of the second meeting on 4 March 2011, Mr Kelly was also a member. There is nothing in the evidence we have heard from the two Claimants to suggest that they did not have authority from the affected employees to receive information and be consulted. We note that… there is an email… apparently on behalf of the Wilsic Education staff..” [ staff in a different establishment] “.. who did not believe that the JCC forum constituted a “pre-existing agreement” for the purposes of informing and consulting the staff. However, we have seen nothing similar from anyone at the Fullerton House School, the relevant establishment for our purposes.” It also considered what the representatives were to do. The constitution of the JCC excluded negotiation as its role. The Tribunal commented (11.1.5):- “Although the Claimant’s (sic) have sought to emphasize the significance of the non-negotiating role of the JCC, we do not see that as relevant. We take the view that whilst consultation might lead to negotiation, they are nevertheless two separate concepts. Whilst we appreciate that section 188 (2) refers to the consultation process being “with a view to reaching agreement with the appropriate representatives” we conclude that the intention there is that that is agreement within the context of consultation rather than negotiation, pure and simple as would be the case if the subject matter was pay or conditions, for example.

(i) ”

[22]Ms Tether argues that the employer may properly treat as employee representatives only those who are “ appointed or elected by the affected employees otherwise than for the purposes of this section”. Here, the process of co-option was neither appointment nor election, and resulted in a committee which was a mishmash of appointees/co-optees and elected representatives; no regard was paid by the Tribunal to the purposes for and the method by which they were appointed or elected, though by 188(1B)(b)(i) it expressly should have been; and though consultation is expressly to be with a view to reaching agreement, which effectively requires negotiation, negotiation was precluded so far as these representatives were concerned. Thus they could not be “appropriate”. She draws particular attention to Section 189 (1A) which provides that, where there is a question as to whether an employee representative was an appropriate one for the purposes of Section 188:
“it shall be for the employer to show that the employee representative had the authority to represent the affected employees”
This places the burden of proof on the employer, and not, as the Tribunal placed it, on the shoulders of the employees.[23]Mr Jones for the Respondent took the point at the outset that the Claimants had not relied at the Tribunal hearing upon the points they were now making. He submitted that the propriety of the appointment or election of representatives to the JCC did not filter through as an argument in the closing submissions. Unless a challenge had been made to the case advanced by the Respondent that the JCC complied with the requirements of Section 188, the Tribunal was entitled to accept that the burden was discharged.[24]We reject Mr. Jones’ argument on this.[25]In the ET1 at paragraph 10, the Claimants alleged a failure to “consult with appropriate representatives” and referred to the argument that the JCC “did not consist of appropriate employee representatives in any event” at sub-paragraph 4. Though this is capable of being a reference to a failure to elect representatives in compliance with 188(1A)(b)(ii), it is more naturally read as putting the issue at large generally.[26]At paragraph 7.2, setting out the issues for its decision, the Tribunal itself considered one of them to be whether there had been a failure to appoint representatives pursuant to Section 188(1A), and whether the employee representatives of the JCC were appropriate representatives pursuant to Section 188(1B)(b)(i).[27]In closing submissions the Claimants referred to a “wholesale failure to engage Section 188…be that in meeting the consultation requirements or the identification of appropriate representatives”, and alleged the employers had failed in “each and every aspect” of their obligations.[28]The matter is put beyond doubt by the Respondent’s closing submissions (core bundle, page 95) which note that the argument was advanced that employee representatives were not properly elected.[29]We are prepared to accept entirely that the emphasis placed by the Claimants has shifted: but shifting the emphasis onto an argument which was given little stress at first hearing is different from raising on appeal a matter which was never canvassed at all below. Accordingly, the attempted pre-emptive strike by the Respondent fails.[30]Of greater substance was Mr Jones’ further argument that to succeed on appeal the Claimants had to show that the Tribunal had reached a perverse conclusion. The question whether the representatives on the JCC had the appropriate authority was an issue of fact for the Tribunal to determine. The reference to there being nothing in the evidence from the two Claimants to suggest that they did not have authority was no more than a comment upon the state of the evidence, and did not represent a shift of the burden of proof (which Mr Jones accepted rested on the employer). It was a legitimate comment, since it may often be said that probabilities are to be judged in part by the evidence which it was within the power of one party to call, or the other to refute.[31]As for the fact that the JCC is stated in its constitution not to be a “negotiating body”, the obligation under Section 188 is not to negotiate, but “to consult with a view to reaching agreement”. There is no duty to achieve agreement: merely to attempt to do so. The Appellants had relied upon observations in Junk v Kühnel C-188/03 [2005] IRLR 310 . The Court of Justice of the European Union had said, in the context of the Directive that “42. (Consultation)… is provided for within the terms of Article 2(1) of the Directive “with a view to reaching an agreement”. According to Art. 2(2), this procedure must, “at least, cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences by recourse to accompanying social measures.” 43. It thus appears that Art. 2 of the Directive imposes an obligation to negotiate.” The arguments of the Appellants, submitted Mr Jones, placed a greater weight upon the word “negotiate” used in that context than it could properly bear. The Court was considering consultation with a view to reaching agreement. Discussion[32]It is important to keep clearly in mind what the Tribunal was deciding at 11.1.5 of its Reasons. It was considering whether the requirements of Section 188(1B)(b)(i) and Section 196 had been satisfied. The sub-section requires that the representatives concerned had been either appointed or elected “by the affected employees”. No point was taken upon the constituency electing the representatives in the present case. However, the second and essential point is that the representative must have “authority from those employees to receive information and to be consulted about the proposed dismissals on their behalf”. The central question is thus the authority of those appointed or elected. That authority is to be determined generally, but with particular regard to the “purposes for and the method by which they were appointed or elected”. It is thus logically to the question of whether the representatives had the authority of the affected employees that the point about the purpose of the JCC was directed. Co-option begs the questions who effected the co-option, and how, and whether in the circumstances the representatives could be said to have the authority of the affected employees. In determining the question of authority the Tribunal was fully entitled to take into account the fact that neither Claimant (who could specifically have said, had they felt it to be the case, that they did not have the authority of the affected employees) had said that they did not, but nonetheless it would be surprising, given the burden of proof, that the employer had not asked them whether that was the case, for if it had the Tribunal would have referred to the evidence given by the Claimants and not to its absence. The thrust of the first paragraph under 11.1.5 is, we think, that there was nothing to challenge the representatives’ possession of authority, and that therefore the representatives must be taken to have had it. Such an approach does not honour the provisions of Section 189 which require an affirmative finding by the Tribunal that there was such authority. The burden of proof is misplaced.[33]The constitutional provision that the JCC was not a negotiating body is problematic: for to elect someone to a body which is not designed to negotiate is hardly to clothe that person with authority on the electorate’s behalf to do so. Section 188(1B)(b)(i) required the Tribunal to consider what the purposes of the election were, with a view to considering whether in the light of those purposes there was authority not simply to receive information, but to consult with a view to reaching agreement, as required by the Act. It said nothing clearly to show it had done so. To the contrary, it expressly thought the non-negotiating role irrelevant. So put, this is a surprising view. It may however simply be using inapt words to indicate rejection of the argument that to elect or appoint individuals to a body which was precluded from negotiating was not to clothe those individuals with any authority from the affected employees to consult with a view to reaching agreement on their behalf. The Tribunal did not address the question of “negotiation” as compared to “consultation” in this context: it saw it as a discrete point, rather than as one centrally related to the authority that members of the committee could be said to have.[34]As to Junk , we accept that the Court should attempt to construe Section 188 in the light of the Directive. Although this cannot be done such that “proposing” can be read as “contemplating”, there is no similar difficulty in understanding that the last two words in the phrase “with a view to reaching agreement” may be substituted by the word “negotiation”. However, there is force in Mr Jones’ suggestion that the Claimants place more weight on the decision than it will properly bear. In the Advocate General’s opinion, in paragraph 59, he reaches the conclusion that article 2 of the Directive imposes an obligation to negotiate, but he does so because earlier in that same paragraph he contrasts consultations which are restricted to the receipt merely of “passive” information for workers, with those which are conducted with “a view to reaching an agreement”, at least as to “ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences.” He may be said to use “negotiating” to describe the opposite of “passive” receipt of information. “Consultation with a view to reaching agreement” is undoubtedly not to be equated merely to the passive receipt of information about an employer’s plans. In context, therefore, the Court was not extending the meaning of this phrase beyond its proper boundaries.[35]We have been shown the constitution of the JCC. It refers to the employees being given an opportunity to express views and the purpose of the body being to communicate the views of staff to management and vice versa. The authority of representatives is to “speak on behalf of their constituents”. The definition (clause 1) is as a formal vehicle keeping employees informed, and a process by which management genuinely seeks the views ideas and feelings of employees before a decision is made. Though a vote can in some circumstances be called for, it might appear in the light of this that the JCC was a body akin to the passive transferee of information and views rather than a participative body, attempting not merely to inform and discuss but to agree, to which the description “negotiation” is addressed.[36]The way in which the JCC actually worked in practice, demonstrating what it did, is relevant to whether those electing or appointing persons to it might be taken to have authorised them to seek to agree matters.[37]Summing up, the Tribunal, in our view, failed(a) to apply the burden of proof as to “authority” appropriately;(b) thereby failed to determine whether the representatives were appropriate:(c) did not specifically deal with the matters to which statute required them to have regard – the purpose of the appointment/election, which appears here to be the same as the purpose of the JCC, and the method of appointment/election: it said nothing about the method and process of co-option of the representatives – a process not provided for by the constitution of the JCC itself, but of particular relevance when considering authority to speak for those for whom the representatives purported to act. Nor(d) was it sufficient to examine simply the position of the two Claimants; Mr Kelly and Mr Jackson: the challenge was to the forum as a whole. In considering whether an employer has consulted appropriate representatives under Section 188, it is not sufficient where he has consulted 16 to show that 2 were properly authorised by those they represented. We accept entirely Mr Jones’ point that a detailed enquiry into the election of each and every representative was not required of the Tribunal: but sufficient facts needed to be found to enable the Tribunal to make a finding, one way or the other as to authority and it was not made. There is no finding as to the authority of those who were consulted.[38]Further, without any factual finding as to that which the affected employees knew of what the JCC did in practice, and hence the authority with which it might be supposed they clothed those who were elected or appointed to it on their behalf, it could not be clear whether they had the authority. The constitution of the JCC expressly excluded negotiation: the Tribunal had to consider whether that ruled out that the authority extended to attempting to reach agreement, which is, we accept, more akin to negotiation, even if the word negotiation is seen in the light used by the Advocate General to distinguish “consultation” for the purpose of the Directive from the mere receipt and transference of information. The phrase used by the Tribunal “intention there is that that is agreement within the context of consultation rather than negotiation, pure and simple as would be the case if the subject matter was pay or conditions for example” is not easy to follow. The Tribunal did not, in our view deal appropriately with the significance of the non-negotiating role of the JCC: it could not be dismissed as irrelevant. Content of the Consultation[39]The duty imposed by Section 188 is imposed upon the employer. The requirement that “the consultation shall include consultation about ways of(a) avoiding the dismissals,(b) reducing the number of employees to be dismissed and(c) mitigating the consequences of the dismissals is mandatory: in Susie Radin v GMB and others [2004] ICR 893 , Peter Gibson LJ said (901A-B):- “24. The following features of the statutory provisions can be identified as relevant: (1) an absolute obligation is imposed on the employer to consult the appropriate representatives of employees who may be affected by the proposed dismissals… (2) the topics for the consultation must include the matters specified in section 188 (2)…” Ms Tether argued that in paragraph 11.1.6 the Tribunal had impermissibly placed the onus upon the employees to raise these matters whereas the obligation rested on the employer.[40]Mr Jones argues that this is a challenge to a finding of fact by the Tribunal. Yet no question of perversity arises. He adds that the context in which the consultation was taking place was that if the remaining employees agreed to a variation in their terms and conditions there would be no dismissals. Thus the consultation did have the purpose (and ultimately the effect) of achieving the three prescribed matters upon which the Appellants relied.[41]The protections afforded by the provisions of Section 188 are important. The judgment of the Court of Appeal in Susie Radin shows that they must be strictly followed. It is the employer’s duty to ensure that the consultation takes the form required by the legislation. It is not enough to provide an opportunity for consultation on the particular topics: if they are not raised by the employees, it is for the employer to raise them. We agree with Mr Jones that the requirement to consult with a view to reaching agreement does not imply that the employer is disentitled from having a firm position: but it does mean that he must be prepared to listen and to move from it if good reason is shown. Here, the fact that ultimately employees accepted the revised terms on offer is not in point. Modifying the terms and conditions on offer might, for instance, have mollified the consequences of the intended dismissals for the employees concerned. If when the Tribunal spoke of the onus being on the employees to suggest alternatives to the employers proposal it was declaring a principle that the content of the consultation was a matter for the employees, and that what mattered was (as the Tribunal put it, four lines from the end of 11.1.6) that they had “scope for appropriate consultation” it was an error of law. The reference to “opportunity” in the last sentence demonstrates that the Tribunal saw the content of consultation as the employer offering an opportunity to employees to discuss matters of concern to them. A close focus on the statute shows that that is not sufficient: it is for the employer to ensure that the matters set out in Section 188 (2) are raised. The flavour of the Tribunal’s findings is that they were not actually discussed – it commented that there “did not seem to have been very much discussion if any” (our emphasis) about the relevant matters.[42]The findings the Tribunal made as to opportunity would be relevant to the amount of any award: but not to the principle of liability. The Fourth Ground of Appeal[43]This ground of appeal alleged that the Tribunal wrongly accepted the employer’s case that its duty to supply the information required by Section 188 to the appropriate representatives was discharged by a letter it had written on 10 th February 2011. There were two aspects to this: that the letter did not contain that information (the “information” point) - the letter should have set out each of the six matters referred to at Section 188 (4) - and that it had not been addressed to the required recipients (the “addressee” point) - in accordance with Section 188 (5) the employer should have given a copy of the written information to each of the appropriate representatives or sent it by post to an address notified by them.[44]As to the information point, the letter says:
“This collective consultation is in relation to the proposal to terminate the contract of and offer re-engagement on the new terms and conditions to, those employees whom (sic) have not agreed to the changes. The Company currently has 96% of its employees on the new contract terms and conditions….”
Nothing more is said about the reasons for the proposals. Nor, complains Ms Tether, did the letter indicate sufficiently the matter set out at Section 188 (4) (e), and in particular the period over which the dismissals were to take place. This was a matter of more than technicality, for if an employee could not bring himself to accept the reduced terms and conditions which were to be applicable, he needed to be given a fair opportunity to plan for and obtain alternative employment – one of the useful functions to which the provision at 188 (4) (e) is directed. Of greater technicality is the fact that the employer did not set out, as required by Section 188 (4) (c) the total of employees of the description who it was proposed to dismiss.[45]Mr Jones argues the passage we have set out above sufficiently expressed the reason for the proposals, because taken in context the employer was essentially saying that it wished to dismiss the remaining 4% to ensure that 100% of its workforce were then on the new contract terms and conditions.[46]The addressee point was that the letter was sent to individual employees in their personal rather than representative capacity. Ms Tether argued that such a letter was not capable of discharging the employer’s duty under Section 188 of (4).[47]As to this latter point, Mr Jones argues that it was not raised before the Tribunal. To determine it would require further evidence. The Claimant should not be allowed to raise that now. Discussion of Fourth Ground[48]The first point is well taken. The Employment Appeal Tribunal (presided over by HHJ Peter Clark) stated in Middlesbrough Borough Council v TGWU and another (2000) IRLR 332, at paragraph 47, that the requirements of s.188 are mandatory. This was later specifically endorsed by the Court of Appeal in the judgment of Peter Gibson LJ (with which Laws and Longmore LJJ agreed) at the end of paragraph 43 in Susie Radin Ltd. v GMB . The mandatory nature of the obligation is further emphasised by paragraph 24 of that judgment, in which the requirements of Section 188 (with particular reference there to Section 188 (4)) are described as ‘absolute’.[49]We do not accept Mr Jones’ contentions that upon its true construction the letter of 10 th February 2011 does deal with the matters with which an employer is obliged to deal in writing. It is no answer that the recipients would have known the reasoning behind the communication from oral communications: the cases emphasise the need for literal compliance. The purpose of such compliance is not difficult to see: without such a requirement, it would be easy for an employer to embark on only a half-hearted attempt at “consultation with a view to reaching an agreement”. Writing addresses the necessary elements in such consultation, and, further, makes it clear that the necessary elements have been addressed. Clarity as to basic facts assists the process of seeking agreement: this is always likely to be better secured by writing to which definitive reference may be made. To the extent that any lack of compliance may be regarded properly as technical, this may be reflected in compensation: but not, as it seems to us, in liability.[50]As to the addressee point, we accept the answer that Mr Jones gives to it. The only response to it is that the Claimant’s case was that there had been a wholesale failure to comply with Section 188 in respect of each and every aspect of the obligations. This is, however, too general to deal with the specific question of the identity of the person to whom the appropriate letter was addressed. There is nothing in the Tribunal judgment to indicate that it was raised specifically. If it had been, it might well have led to the need to call further evidence. We were told in argument that at the same time as letters were sent to those who had not returned signed new contracts, the employer also wrote to those who had. It was arguable that therefore each of the appropriate representatives must have been in receipt of a letter, which if it had set out the matters required by statute would arguably have satisfied the addressee point. The Tribunal judgment dealt with the content of the letter not with the addressee. This second aspect of the fourth ground gives rise to no properly arguable appeal. Conclusions[51]It follows that the Claimants succeed on the first and third grounds in their notice of appeal (taken second and third before us) and the “information” aspect of the fourth, but not upon the first ground argued before us. The conclusion to which the Employment Tribunal came was not one of fact, approached by proper legal reasoning: it is one in which the legal reasoning was deficient (misplacing the burden of proof in respect of the authority of the representatives, and the content of the consultation) or was unsustainable (which depends upon a fair reading of the letter of 10 th February and which we simply cannot construe as the employer would wish). Accordingly, the appeal must be allowed. Consequence[52]On the first two grounds on which we have allowed the appeals, we are in no position to substitute our own decision: this depends on facts which are yet to be found. Thus whether the appropriate representatives (viewed as a body, without the focus being solely upon the two Claimants) had the authority of those affected by the proposals (i.e. the four percent who had not signed up and were potential candidates for dismissal) to consult with a view to reaching agreement on their behalf – is a matter which we are in no position to determine for ourselves. The question of “appropriateness” depends upon a finding of fact as to authority, which we are in no position to make. As to the second ground upon which we have upheld the appeal, the Tribunal was not clear whether there was any discussion about the three matters specifically referred to in Section 188 (2). The tenor of the judgment is that there was not: but we may be reading too much into what the Tribunal had said to regard this too firmly as a finding. The Tribunal did not within its own logic need to make any finding, since it regarded the burden on the employee as being to raise the matters for discussion rather than the employer: and, although hesitantly, we think this matter should, like the first, be remitted. As to the third ground we note that the Tribunal will in consequence of our findings yet have to determine whether to make any award. There is some suggestion made to us that the employer wrote more than the letter of 10 th February, and that the appropriate representatives received it in accordance with Section 188: again, the Tribunal did not develop this because of its view of the letter of February 10 th which we have found erroneous. It might be that the communications read together constituted a sufficient compliance, albeit in more than one written document. Accordingly, since the Tribunal would if the claim succeeded have to determine whether to make any award, and if so to what extent, a proper decision on each of the matters on which we have allowed the appeal will allow the Tribunal to fulfil its functions under Sections 189 and 190 of the 1992 Act (see in particular sections 189, especially 189(4)(b) and 190 of the 1992 Act) we remit that too.[53]It would be disproportionate, given the likely amount of any award, if made, for the matter to be remitted for hearing before a fresh Tribunal. There is no indication that the Tribunal would be any less than professional in applying our judgment to the facts it has found. It may wish to hear further evidence in respect of the authority of the representatives, the content of the consultation, and further argument and evidence as to whether the letter of February 10 th , deficient as it is, may properly be regarded as part only of the written communication which counts under Section 188. Accordingly, we remit the matter for determination before the same Tribunal.[54]Finally, it seemed to the Tribunal that the employer did not realise till late in the process, if at all, that it was bound by the obligations under Section 188 of the 1992 Act . There may well be a case for supposing that the employer’s fault was accidental, and that standing back the employer had sought to involve many of his employees in discussions about entering a new contract. Against that background there is much to be said for a negotiated or mediated settlement between the parties. We hope that they give this consideration.