THE INDUSTRIAL TRIBUNALS

CASE REF:	1842/04

CLAIMANT:			Jim Davis 

RESPONDENT:		Dessian Products Limited

DECISION
The unanimous decision of the tribunal is that the claimant took protected industrial action, and was dismissed after five weeks of the start of such protected action.  The principle reason for his dismissal was that he had taken protected industrial action.  Pursuant to Article 144A (1) – (3) of the Employment Rights (Northern Ireland) Order 1996, the dismissal is thus unfair.  The claim will be      re-listed for a hearing on remedy, and further evidence on an application for one half of one day’s costs for the respondent on 4 April 2005.
Appearances:
The claimant was represented by Mr J Park, of Counsel, instructed by Agnew Andress Higgins, Solicitors.
The respondent was represented by Ms A Jones-Campbell, solicitor.

The Issues to be decided

1.	At the outset of the hearing, the parties agreed the single issue to be determined by the tribunal was as follows:-

“Was the reason, or the principal reason, for the claimant’s dismissal the fact the claimant had taken part in protected industrial action?”

2.	It was agreed that the tribunal should consider the alleged liability of the respondent on this above issue, and – if required – reconvene to consider any issues of remedy.

3.	It was agreed that the claim of Mr J Davis would be led as the sample claim for each of the other claims set out in Appendix 1.  However, it is clear from the above agreed issue, that the findings below and the subsequent determination are applicable only to the claimant’s complaint.

4.	The tribunal sat at 9.30 am on 4 April 2005 to hear evidence from Mr Davis.  Mr Davis did not notify that he was unable to attend the tribunal that day, and the respondent sought one half day’s costs, alleging that Mr Davis had conducted the proceedings unreasonably, contrary to Rule 40(3) of Schedule 1 to the Industrial Tribunals (Constitution & Rules of Procedure) Regulations (Northern Ireland) 2005.

Sources of evidence

5.	Mr Jim Davis gave evidence, as did Mr Maurice Cunningham (ATGWU) for the claimants.

6.	Mr Stephen Greeves, Ms Judith Hewitt and Ms Nicola Powderly gave evidence for the respondent.

Findings of fact

7.	By his originating application, presented to the tribunal on 28 June 2004, Jim Davis stated he was a member of the ATGWU, and had been employed from 6 September 1991 until he was dismissed on 23 June 2004 (the relevant date).  Mr Davis had worked as a production operative within the respondent company, and had experience in most production duties in Dessian Products Limited.  At the relevant date, the claimant was a Team Co-Ordinator.  He complained, inter alia, he had been unfairly dismissed for trade union activities, that he had been unfairly selected for redundancy and had been unfairly dismissed.  The claimant had been involved in industrial action consisting of strike action since 19 May 2004, which was protected industrial action.  Mr Davis alleged the respondent made no serious effort to negotiate a solution to the cause of the dispute, and informed him that he would be dismissed on 23 June 2004.

8.	By its notice of appearance, presented on 9 August 2004, the respondent admitted the claimant had been dismissed, but maintained this was due to the fact he was redundant.  The respondent set out an extensive defence of the claimant’s contentions, and asserted the industrial action commenced on 19 May 2004 had a detrimental impact on its business and rendered redundancies necessary.  The respondent thus asserted the reason for the claimant’s dismissal was redundancy and not that he had taken part in protected industrial action.

9.	The respondent manufactures PVC windows, and has factories in Belfast and Scotland.  The respondent has recognised the ATGWU since 1999.  The respondent’s business is such that it makes bespoke windows for customers.  It operates a three-week cycle.  For the Belfast site, by Wednesday in Week 1 orders are received.  These are made in Week 2, and loaded into lorries for transportation on Thursday & Friday of Week 2.  The product is mainly delivered to England by the Monday of Week 3, and fitted thereafter.  The factory in Scotland follows a similar pattern, except it can take orders up to the Monday of Week 2, and delivers up to Monday of Week 3. 
 
10.	Pay talks between the respondent and the ATGWU were ongoing from early 2004.  From the evidence of Stephen Greeves (respondent Financial Director) it is clear relations between management and employees in Dessian Products Limited were degenerating from about March 2004.  This is because the respondent suspended an employee for an alleged disciplinary offence.  On 16 March 2004, Stephen Magee (Shop Steward) told Paula Barber (Human Resources Manager) that the union would ballot its members with a view to industrial action.  On 25 March 2004, Mr Cunningham confirmed by letter to Alan McGaughey (respondent Managing Director) that the union would ballot its members for industrial action, and this was subsequently confirmed by a further letter from Mr Cunningham on 8 April 2004.  The ballot was open from 21 April to 30 April 2004.  Mr McGaughey wrote to Mr Cunningham on 15 April 2004 expressing his concerns at the threatened industrial action and indicating he would write to the Labour Relations Agency to seek their assistance.  The employee at the centre of this wider dispute was dismissed for misconduct on or about 16 April 2004, and an appeal was heard of 28 April 2004.  Extensive correspondence passed between the union and the respondent from 28 April until 11 May 2004, when the union informed the respondent that 67 of its employees would be taking lawful continuous industrial action from 19 May 2004.  This forthcoming industrial action was widely publicised in the press within Northern Ireland.  None of the respondent’s witnesses explained to the tribunal how clients in England could, so swiftly, be deterred from placing orders/persuaded to cancel orders, by this press coverage in Northern Ireland. 

11.	The respondent’s sales (which for the period 7 May 2004 onwards until early July 2004 were forecast to be in the region of 2,700 – 3,000 frames per week) dropped to circa 1,500 in early May and this fell further to just over 1000 per week in early June 2004.  Appendix 2 shows a graph where the upper line represents the budgeted sales, and the lower line the actual orders for the same period.  By the week ending 14 May 2004, there was a 25% shortfall in the numbers of orders in budgeted sales (700 frames = £63,000.00 per week in sales turnover).  The industrial action began on 19 May 2004.  By 21 May 2004, there was a 42% fall in anticipated sales (1,200 frames = £108,000.00 per week).  It was foreseen that the downfall for the next week would be of the same order.  The respondent continued production on 19 May 2004.  Its non-unionised employees and temporary staff continued this production.  Ms Nicola Powderly counselled the respondent management that, by Regulation 7 of the Conduct of Employment Agencies & Employment Business Regulations 2003, it is unlawful to engage temporary work-seekers to replace employees on lawful industrial action.  However, the documentary evidence suggests that during the course of the industrial action, and up to the relevant date, the respondent engaged two such work-seekers, viz: James McCrory and Robert McClean.

12.	The respondent management convened emergency meetings with its advisers.  These meetings were held on Friday 21 May, Saturday 22 May and Monday 24 May 2004.  Despite the fact the respondent had the benefit of specialist Human Resources Advisers at these meetings, no minutes were taken of these crucial meetings.  Judith Hewitt and Nicola Powderly (both of Evolution Human Resources) attended these meetings, but could not recall how much consideration was given to the implications of Article 144A of the 1996 Order.  Ms Powderly was astonished at the speed of the downturn in respondent sales from 19 – 24 May 2004. 

13.	At the meeting on 24 May 2004, Alan McGaughey and Stephen Greeves decided that potentially 50 redundancies would be necessary.  At that point in time the respondent employed 139 workers at its Belfast site, 97 of which were production operatives, and 60 - 67 of which were members of the ATGWU.  This figure of 50 potential redundancies was calculated on the basis that 720 frames less per week would be made, and each operative making windows can make 18 frames a week, plus support jobs.  By letter to Mr Cunningham dated 24 May 2004, Mr McGaughey put the union on formal notice of potential redundancies at its Belfast plant, stating:-

“This potential redundancy scenario has arisen as a result of a down turn in sales and lost business as a consequence of industrial action. 

The number of employees potentially affected by a potential redundancy scenario will be approximately 50 individuals.

We, therefore, wish to commence formal consultation with immediate effect as all employees today are concurrently being issued with notice”.

14.	All employees potentially affected were notified individually by letter from Mr McGaughey dated 24 May 2004.  Moreover, Mr McGaughey signed the HR1 form to the Department of Economic Development.  At Section 4 of the form, under the heading “reasons for the redundancies”, the reader is presented with four ‘tick box’ reasons for the redundancies, or can add it his/her own narrative, if desired, under the heading “If other reason(s) please give details”.  The four options given in the tick boxes are:-

(i)	reduced demand for products or services;

(ii)	changes in work methods or organisation;

(iii)	transfer of work to another establishment; and

(iv) 	new plant, equipment or new technology. 

Ms Powderly completed the form and Mr McGaughey signed it. At Box 4 the respondent chose the option of “other reasons”, and stated:-

	“Downturn in sales and lost business as a consequence of industrial action”.

15.	Mr McGaughey wrote to Mr Cunningham on 24 May 2004 and notified him the first wave of redundancies would commence on 23 June 2004, and enquired as to the union’s availability for joint consultation.  The respondent wrote again to the union on 26 May 2004 again seeking consultation with a view to avoiding redundancies, reducing the numbers to be dismissed and mitigating the consequences of any dismissals which must be affected.  This evinced correspondence from the union seeking the respondent address the cause of the original disputes (the dismissed employee), by letter dated 27 May 2004.  The respondent again sought consultation by letter of 28 May 2004.

16.	By 3 June 2004, with no further contact from the union, the respondent wrote to each employee to inform them they were engaging in a redundancy selection process, and seeking to engage in individual consultation.  On 7 June 2004, the respondent applied the selection criteria (disciplinary warnings and warnings for timekeeping and attendance) to the selected pools of employees.  The tribunal heard no evidence about the conduct of a skills audit by the respondent management, and skill level was not a criterion for redundancy selection.

17.	On 8 June 2004, Jim Davis met Judith Hewitt as part of a consultation exercise.  Ms Hewitt’s evidence was that Mr Davis was being consulted and warned of his impending redundancy, and that there were no vacancies in the respondent company at that time.  Tiago Menzies, a temporary worker, was employed on 9 June 2004, initially as a temporary worker, and then as a permanent worker in October 2004.  Ms Hewitt could not inform the tribunal why Mr Davis was not offered the post taken up by Mr Menzies 24 hours later, and conceded before us that the information she had been given about vacancies and employment opportunities in the respondent’s business on 8 June 2004 was incorrect. 

18.	In June 2004, the claimant was one of three Team Co-Ordinators in the Production Department.  All three Team Co-Ordinators were made redundant, and their duties delegated to the Team Leaders.  The Team Co-Ordinator in Despatch (Stephen McKeown, who also participated in the industrial action) was not made redundant as there was no Team Leader in Dispatch.  He returned to work on 25 May 2004, after a return-to-work interview with Mr Greeves.  The tribunal saw documentary evidence of minutes of this interview, signed by Mr Greeves.  Mr Greeves asked Mr McKeown if he had been on strike on 24 May 2004, if he had now resolved his dispute with the respondent, and if he would be at work from now on. 

19.	There were three Quality Technicians before the relevant date.  None were members of the trade union and none participated in the strike.  Yet all were made redundant.  Moreover, the claimant conceded that a Mr Phillip Cunningham, who was not a union member and who did not participate in the industrial action, also was made compulsorily redundant. 

20.	Because of natural shedding and voluntary redundancies, the number of compulsory redundancies was reduced from 50 to 35.  These 35 employees were made compulsorily redundant on 23 June 2004.  The relevant date was 34 days after the start of industrial action on 19 May 2004.  Of these 35 employees, seven were employed outside the Bargaining Unit of the Production Department.  Out of 97 production employees, 28 were made compulsorily redundant.  Of these 28 redundancies, 19 were members of the ATGWU, and nine outside such membership.  Thus, circa 45% of those made redundant were not members of the ATGWU.  All the claimants before the tribunal (listed in Appendix 1) were members of the union, and participated in the industrial action.

21.	Mr Greeves accepted that any industrial action will cause disruption, and that the greater the number of the workforce participating in any such action, the greater will be the disruption to the employer.  Moreover, he accepted that the downturn in sales from 2,700 frames to 1,100 frames per week owed entirely to the industrial action and the lost business that that entailed.  The respondent was cognisant of the eight week protected period afforded by Article 144A of the Employment Rights (Northern Ireland) Order 1996 [“the 1996 Order”], but felt that the financial concerns of the respondent (the loss of sales and the impact of that on the business) overrode the considerations of Article 144A.  In other words, the respondent considered that it faced a redundancy situation pursuant to Article 174(1)(b) of the 1996 Order, and that the diminution of demand for the respondent’s product superseded the protections provided by Article 144A.

22.	After the relevant date, the respondent continued to use temporary staff within the Belfast site.  On 22 July 2004, the respondent temporarily laid off all 27 of its production staff in Scotland.  All 17 Scottish employees were subsequently made redundant, and all production re-located in Belfast.

23.	The respondent made a profit of approximately £500,000.00 in 2003. In 2004, the respondent made a loss of approximately £500,000.00. 

24.	During the strike the respondent recruited six temporary workers. In fact, from 10 May 2004, the respondent recruited 12 people. 

25.	The respondent recruited a number of people in 2004.  None of these new starts were people who had previously been employed and made redundant in June 2004.  The respondent employed 13 full-time employees within six weeks of the relevant date, and availed of the services of 25 agency workers and six temporary workers from 23 June 2004 to 30 September 2004.  Thus, in the three months from the relevant date when it made 35 employees redundant, the respondent had recruited 45 employees.  These agency and temporary workers were recruited through employment agencies and the respondent did not place advertisements in newspapers.  Mr Greeves’ evidence is that the use of such agency and temporary staff owed to the closure of the Glasgow factory on 22 July 2004, which closure could not have been foreseen on 23 June 2004, even though the respondent was aware of difficulties brewing in the Glasgow site.  Despite this state of knowledge, the respondent did not factor into its deliberations on 24 May 2004 the difficulties at the Scottish site.  Ms Powderly conceded that the closure of the Scottish factory created jobs in Belfast. 

26.	Despite the fact Mr Davis had experience in production in the respondent’s workplace, the respondent could not account for not offering him alternative employment in this Department, or why adaptability to other duties, or a worker’s skills level, was not included with the settled criteria for redundancy

Applicable law

27.	The applicable law in respect of the claims made out by the claimants is to be found in Articles 1441A of the Employment Rights (Northern Ireland) Order 1996. Article 144A(1) – (3) of the 1996 Order provides:-

144A – (1) 	For the purposes of this Article an employee takes protected industrial action if he commits an act which, or a series of acts each of which, he is induced to commit by an act which by virtue of Article 97 of the Trade Union & Labour Relations Order is not actionable in tort.

(2)	An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if -

(a)	the reason (or, if more than one, the principal reason) for the dismissal is that the employee took protected industrial action; and

(b)	Paragraph (3), (4) or (5) applies to the dismissal.

(3)	This paragraph applies to a dismissal if it takes place within the period of eight weeks beginning with the day on which the employee started to take protected industrial action.

28.	The parties also referred to Article 174 of the 1996 Order.

29.	Regulation 7 of the Conduct of Employment Agencies & Employment Businesses Regulations 2003.

The decision of the tribunal

30.	The tribunal has considered all the evidence before it – oral and documentary.  Before proceeding to give its decision, it wishes to record its gratitude for the very helpful submissions made by Mr Park and Ms Jones-Campbell, and for their assistance throughout the hearing.

31.	The tribunal has referred to Harvey on Industrial Relations & Employment Law, Volume 1, D 2145-2200.  At D 2148, Harvey states:-

“…it can be seen that the effect [of Article 144A] is that an employee has an         eight-week period of protection in which he can participate in ‘protected’ action and if he is dismissed as a result this dismissal will be unfair…”

32.	In Crosville Wales Limited  v  Tracey (No 2) [1997] IRLR 691, the House of Lords distinguished between the protection given by the legislation, and some novus actus interveniens; for example, where the striking worker commits an act of vandalism whilst on lawful industrial action.  The House took the view dismissal in such circumstances would not be for the principle reason of industrial action, but for ordinary misconduct.  The leading speech was given by Lord Nolan, in which he said:-

“Individual blameworthy conduct additional to or separate from the mere act of participation in industrial action must in principle be capable of amounting to contributory fault”.

33.	In Mr Davis’ claim, the facts speak largely for themselves.  His industrial action was lawful.  There is no contention that it was not.  It commenced on 19 May 2004.  It gave a protected period from dismissals for the principle reason of the industrial action for a period of eight weeks, by Article 144A of the 1996 Order.  Five weeks (34 days) into the protected period, the claimant was dismissed on 23 June 2004.  

34.	When the industrial action began, the respondent had 139 employees in Belfast, 97 of them in production.  A maximum of 67 of this 139 were members of the trade union.  Therefore, less than half of the workforce went on strike, and some, like Mr McKeown, were only on industrial action for a short time. 

35.	The tribunal has balanced, very carefully, all the evidence it has heard, and the findings made, particularly at Paragraphs 19. – 20. and 23. above.  We have made findings that the respondent is a quick turn-around bespoke manufacturer, requiring specialist skills.  We have taken due cognisance of the differential in sales performance in 2004 against 2003, as set out in Appendix 2.  Nevertheless, on balance of probabilities, we are more persuaded that the claimant satisfies the provisions of Article 144A for the following reasons:-

(a)	despite the fact that the claimant had the ability, by reason of his previous experience, to perform a range of tasks in the respondent’s workplace, little or no attempt appears to have been made to offer him any suitable alternative employment at a lower level of supervision on the factory floor;

(b)	there is no evidence before the tribunal as to why the respondent’s sales drastically fell away from the end of April 2004.  The evidence pointed to the major market being England.  There was no evidence before us as to how so many English customers and potential customers were deterred from continuing with their orders because of extensive media coverage in the Northern Ireland press.  We accept that customers may have realised by the beginning of Week 3 that there was a problem with delivery.  But the evidence was that within a day or two of the start of the protected industrial action, the respondent company was in crisis meetings with its advisors and already considering redundancies;

(c)	likewise, there was no evidence before us of what measure, if any, the respondent took to find another manufacturer that could make some/all of the windows it could not make during the industrial action, thus alleviating the pressure on the respondent.  In particular, there was no evidence as to why the Scottish factory could not have stepped up production during such a critical period, or staff from the Scottish site (especially if it too were facing unrelated difficulties) could not have come to Belfast to work alongside non-striking colleagues;

(d)	despite the fact that Nicola Powderly counselled against the illegal use of work-seekers during the industrial action, the respondent decided to use such agency workers.  Whatever the degree of compunction the respondent may have had about engaging such workers, it is difficult to understand why – when it had decided on their use – it then enforced redundancies within the protected period;

(e)	it is difficult for the tribunal to understand why Mr Greeves kept a minute of the meeting with Mr McKeown on 25 May 2004, when no such minutes were kept of the much more crucial meetings on 21 - 24 May 2004.  The absence of such documentation is a serious defect in the respondent’s contentions that it gave due consideration to Article 144A.  There is no record of such consideration, and neither the two Human Resource personnel who gave evidence (Ms Powderly or Ms Hewitt) gave precise evidence as to the extent of any such discussion;

(f)	of major importance to the tribunal’s determination is the letter to Mr Cunningham from Mr McGaughey dated 24 May 2004.  In that letter, he attributed the downturn in sales as a consequence of the industrial action;

(g)	of even greater significant, indeed the most probative evidence we received, was the HR1 document completed by Ms Powderly and signed off by Mr McGaughey on 24 May 2004, just four days into the industrial action.  Opting not to tick any of the tick box reasons, including that marked ‘reduced demand for products and services’, the respondent’s Managing Director declared the reason for the redundancies was the “downturn in sales and lost business as a consequence of industrial action”.  This was the frankest and plainest statement of the respondent’s reasons for making redundancies.  With regard to Article 144A(2) of the 1996 Order, other than semantically, we can see no real difference between “as a consequence of” and “by reason of” industrial action;

(h)	albeit that the respondent was anxious to consult with its employees, as evidenced in the correspondence from 24 May to the relevant date, the tribunal had difficulty construing why no skills audit had been conducted by the respondent management.  When the claimant consulted Judith Hewitt on 8 June 2005, he was not offered any alternative employment.  Yet Tiago Menzies, a temporary worker, was engaged within 24 hours.  With no skills audit, yet anxious to halt the deleterious impact on sales and performance caused by the industrial action of less than half its workforce, the respondent appears (almost simultaneously) to be dismissing for redundancy a multi-skilled worker with one hand and recruiting a temporary worker with the other.  That appeared to the tribunal not to make sense within the meaning of Article 174(1) of the 1996 Order.  Ms Hewitt conceded that the information given her by the respondent must have been wrong.  From this evidence, we have gone on to infer that the real or principle reason for the claimant's redundancy was that he had participated in industrial action;

(i)	we were not at all persuaded by Mr Greeves’ assertions that a diminution in demand, pursuant to Article 174(1) of the 1996 Order, can compete with – or supersede - the provisions of Article 144A.  It strikes us that almost all industrial action is aimed at putting pressure on the employer for one reason or another.  In such a situation of pressure, if the employer is able to turn to his/her striking employee and say “because you are causing a cessation or diminution of the work that you are employed to do, you are going to be made redundant pursuant to Article 174(1) of the 1996 Order”, then Article 144A would be rendered meaningless and ineffective.  Where such dismissals during the protected period follow directly on from protected industrial action, then (as Harvey points out at D 2148) the dismissal will be unfair.  There is no new act here which the respondent can argue is evidence of Mr Davis’ misconduct;

(j)	our conclusion that the principle reason for the claimant’s dismissal within the protected period is that he took protected industrial action is fortified by the fact that the respondent was aware on the relevant date that it had problems at its Scottish base, which one month later led to 17 redundancies, and thus the transfer of vacancies to Belfast.  In fact, whilst the respondent was under notification of the industrial action, it was recruiting 12 workers.  During the industrial action six workers were recruited.  After 23 June 2004, 13 full-time employees were employed, plus 25 agency workers and six temporary workers.  Our finding that, in the three months from 23 June 2004 (when it enforced 35 redundancies) the respondent recruited 45 employees, none of whom had been made redundant, or recruited by open advertisement, strengthens our conclusions that the respondent was not seriously seeking to retain the skilled services of Mr Davis, and lead us also to conclude that the real and principal reason for his dismissal was he had taken protected industrial action pursuant to Article 144A (1) - (3) of the 1996 Order.

36.	Therefore, we answer the single issue put to us in the claimant’s case, as adumbrated at Paragraph 1., in the affirmative, and we declare his dismissal to be unfair.

37.	The tribunal will reconvene, if required, to consider any outstanding issues of remedy that arise.  We note that, apart from the claim for interim relief, the claimant has not completed Section 14 of his originating application as to the remedy he seeks.

38.	We reserve on the issue of costs set out in Paragraph 4. above.  We direct that issue of the respondent’s costs for one half of 4 April 2005 should be fully evidenced by it at any reconvened hearing.

Chairman:

Date and place of hearing:		23 – 24 February 2005, 4 April 2005 and 11 May 2005-07-29					Belfast

Date decision recorded in register and issued to parties:

APPENDIX 1

Claimant						Tribunal Ref No.

1.	Ciaran McPhillips	                             	1825/04

2.	John Patrick O’Hagan				1826/04

3.	Kieran Gerard McVeigh			 1827/04

4.	Patrick Hamilton				1834/04

5.	Paul Gilhooly					1836/04

6.	Kieran Robinson				1837/04

7.	Patrick McShane				1838/04

8.	Joseph	Felloni					1839/04

9.	Emmanuel O’Hagan				1841/04

10.	Jim Davis					1842/04

11.	Henry Hall					1843/04

12.	Noel McGrath					1844/04

13.	Jonathan Campbell				1845/04

14.	Patrick Altimas					1847/04

15.	Joseph Francis McCleave			1848/04

16. 	Seamus Rice					1849/04

17.	Joseph	Scott					1850/04

18.	James McKeown				1851/04

19.	Sonia Ferguson				1852/04

Appendix 2