THE INDUSTRIAL TRIBUNALS

CASE REF:	441/05

CLAIMANT:		Terry Cooper

RESPONDENT:		Brian McCance Steel Limited

DECISION
The unanimous decision of the tribunal is that the claimant was unfairly dismissed by the respondent by being unfairly selected for redundancy and the respondent is ordered to pay to the claimant the sum of £25,854.80.

Constitution of Tribunal:
Chairman:		Mr T Browne
Members:		Ms N Wright
			Mr J E Martin

Appearances:
The claimant was represented by Mr M Wolfe, Barrister-at-Law, instructed by Wilson Nesbitt, Solicitors.
The respondent was represented by Mr P Moore, of Peninsula Business Services Limited.

Issues and facts

1.	The tribunal had to decide if the claimant had been unfairly dismissed by the respondent.  The claimant accepted the respondent’s assertion that there might well have been a redundancy situation, but contended that the process used by the respondent which resulted in selecting him (and only him) for redundancy was unfair.

2.	It was common case that the claimant had been employed by the respondent at its steel stockholding business from 1 February 1996 until his dismissal after appeal was confirmed on 4 March 2005; at the time of his dismissal he had been the Warehouse Manager since August 2003.  The tribunal therefore found that the effective date of termination of the claimant’s contract of employment was 4 March 2005.

3.	It also was common case that in November 2004 the claimant went off on sick leave, which lasted for approximately six weeks, as the result of the deterioration in his own health from caring for his wife, who had been diagnosed with cancer, from which she died in 2005.  Even before the claimant went off on sick leave, it was common case that the respondent was aware of the fact and nature of the claimant’s wife’s illness and deteriorating health.

4.	Upon the claimant’s return to work on Monday 13 December 2004, he was called into the office of Mr Brian McCance, Managing Director of the respondent company.  Mr McCance then told the claimant that during his absence on sick leave, Mr McCance had conducted a review of the claimant’s work in order to identify how to distribute it among the other staff during his extended absence, and had been ‘shocked’ to discover that the claimant had only enough work to justify one hour per day.  As a result, Mr McCance informed the claimant that he was being made redundant, without any offer of alternative work within the respondent company.  Mr Brian McCance stated in evidence that he had not offered the claimant alternative lesser work such as working in the warehouse because he thought that either he was not qualified to do work such as driving a forklift truck, or because he thought the claimant would not accept a reduction in status and salary.  The tribunal found from the evidence of the claimant that not only was he qualified to carry out such alternative work within the respondent company, but that, had he been asked, he would have been willing to do lesser work and accept a reduction in status and income.

5.	The tribunal found as fact that even in the course of his employment, the claimant carried out many manual warehouse and driving functions, and was a qualified forklift truck driver, as a result of a course paid for by the respondent.  The tribunal could not reconcile Mr Brian McCance’s assertions in evidence that he was unaware of this training with his later (hesitant) acceptance in evidence that he was in fact aware that the claimant had driven a forklift truck in the course of his employment.  Mr McCance stated that he was unaware of the claimant’s qualification because he had not checked before deciding that the claimant could not be offered alternative (albeit lesser) work, but conceded that the authorisation for such a course would have come from him.

6.	Even if it was true that Mr McCance was unaware that the claimant was qualified to drive a forklift truck, the tribunal found that his ignorance was strongly indicative of a lack of any proper investigation as to what the claimant did in the course of his employment or as to whether he might be capable of doing alternative work.  The tribunal found that the claimant in practical terms was compared only to Philip Graham, who was promoted in August 2003 to a position below but similar to that of the claimant. The tribunal also found from the acceptance in evidence by Brian McCance that Mr Graham’s position was created for him.  The tribunal found that as a result of this one-to-one comparison, there was no possibility of an objective, realistic review of all of the employees whose jobs included skills and functions also possessed or carried out by the claimant.  By comparing him only to the salaried managerial and office staff (and to one in particular), the tribunal found that the parameters of the initial investigation immediately excluded a significant proportion of the skills and abilities brought to his employment by the claimant if anything approaching a fair system of comparison was to be carried out.

7.	The claimant appealed against his selection for redundancy.  The appeal was dealt with by Neil McCance, son of Brian McCance and director of the respondent company.  He concluded that the claimant’s contention that this was a sham redundancy was incorrect, and that the claimant’s job was redundant, as evidenced by his confirmation from his own enquiries that his father’s findings had been correct as to the minimal amount of work the claimant had to do or actually did.

8.	The tribunal found that the initial investigation by Brian McCance and the subsequent appeal investigation by Neil McCance involved speaking only to other members of the salaried management and office staff, but not to any of the works staff in the warehouse or to the drivers.

9.	The tribunal found that the other members of staff were more than likely aware of the reason for the initial investigation, and by the time of the second investigation by Neil McCance, it was common knowledge that the claimant had been dismissed on the ground of redundancy and was appealing the decision.  The tribunal found that Mr Brian McCance was genuinely shocked at what his managerial and office staff told him about the amount of work done by or required of the claimant.  The tribunal considered however that it was entirely predictable that the same office and managerial staff, who clearly were aware of the implications for their own positions, especially where they lacked any additional practical skills on the shop floor, would have every incentive to be less than candid when asked about their own workload and realistically would not be likely to say that they did anything less than a full day’s work.

10.	Brian McCance in his evidence to the tribunal stated that he did not speak to Philip Graham, to investigate the work done by the claimant as compared to Mr Graham, relying instead in that regard on a conversation with Colin Ingram.  Mr McCance also relied upon Mr Ingram rather than the other warehouse staff as to the claimant’s work.  The tribunal found that Mr McCance’s reliance upon this method of enquiry could not have given him anything like a clear picture of what work was being done and by whom.  This is the case even where an employer is seeking to conduct an objective and fair enquiry into all staff to determine which posts, if any, might be redundant.

11.	The tribunal found that Mr McCance had never been in this situation before. The tribunal was mindful of the fact that he consequently might simply have made an error of judgment in not speaking to the very staff whose daily work was supposed to be directed by the claimant but which in Mr Ingram’s view as expressed to Mr McCance had in effect been taken over by Philip Graham.  Mr McCance in his evidence sought to confirm that his judgment in that regard was correct, but even allowing for the benevolent view that to have done so initially might have been an error, the tribunal found that maintaining the stance in his evidence was indicative of a lack of insight into the practicalities of what even to a layman ought to have been an obvious line of enquiry.

12.	The tribunal found that such a blinkered view was further restricted by its focus on only one individual, namely the claimant, who was identified by Mr McCance from the outset as being under scrutiny.  The tribunal found that this narrow view resulted, whether deliberately or inadvertently, in a framework of justification being constructed around the claimant, as opposed to the identification of the redundancy of his post at the end of a reasoned and objective process.

13.	The tribunal found that the scant notes drawn up by Mr McCance as he performed his assessment gave the clear impression of someone who had already made his decision and was seeking to justify it, rather than being capable of demonstrating a proper procedure evolving into a position where a reasoned business decision could be taken.

14.	That impression was substantially reinforced by the tenor of the notes of the meeting with the claimant on 13 December.  At that meeting, the claimant, who had never been informed that such an investigation was being carried out into his work and who had not been consulted or given an opportunity to respond to allegations that he spent 90% of his time doing nothing, was informed that he was being made redundant.

15.	The claimant was asked in evidence why he did not stand up for himself and make the point that he did in fact work hard, rather than acquiescing.  The tribunal had no hesitation in accepting the evidence of the claimant that he had just returned to work after a debilitating period of being unwell, brought on by the strain of caring for his terminally-ill wife, and that to be brought in and dismissed on the spot without any prior warning or consultation left him in a state of shock.  The tribunal found the claimant to be a very truthful witness, whose unassuming nature would have been unprepared to cope with a situation where his entire world was being turned upside down in the space of a few moments, even without the tragic situation outside his place of work.

16.	The appeal against the decision to dismiss the claimant was conducted by Mr Neil McCance, son of Brian McCance, who is a director of the respondent company, in charge of purchasing steel.  He appears to have conducted the appeal investigation in much the same manner as the initial investigation was carried out, although he included in his investigation queries raised by the claimant at their initial appeal meeting on 10 February 2005.

17.	Those queries were:-

whether there was a personal grudge between Brian McCance and the claimant which was the real reason for selection of the claimant;

whether there had in fact been a (proper) redundancy procedure followed before identifying the claimant’s post as redundant; and

whether other staff had been reviewed.

18.	The tribunal found that there was no viable alternative individual within the respondent company because of its small management structure to conduct the appeal.  Neil McCance contradicted Brian McCance, who had said in evidence that he deliberately at no stage discussed this matter with his son during the appeal process.  Neil McCance however stated that he went to his father to obtain and read his notes and minutes from the initial dismissal procedure and read them in his presence.  The tribunal found that this disparity was indicative of a likelihood that the two men had probably discussed the case inappropriately, but it is not possible to conclude that any undue influence was exerted by Brian McCance upon his son in that regard. 

19.	It was accepted by Neil McCance in evidence that he then also obtained from his father the names of the staff whom he had consulted before dismissing the claimant.

20.	The tribunal found that Neil McCance made virtually no notes of interviews or discussions he conducted with those other staff members.  The tribunal found that this lack of written records significantly eroded any assertion by the respondent that a proper procedure had been followed, since there was nothing to assist the tribunal in assessing the fact or degree of investigation.  Neil McCance asserted in evidence that the only notes he might have made would be on a blotter pad, and then only to prompt himself as to the next question to ask of individual staff members as he spoke to them, as opposed to making a record of what each member of staff was saying.

21.	Even if this were true, the tribunal found that in the circumstances of this case, given not only the nature of the process generally but the particular assertions by the claimant of a ‘sham’ redundancy as a result of an alleged personal vendetta by Brian McCance against him as the core of his appeal, it ought to have been obvious to a reasonable employer that a verifiable record would have been essential to ensure that such allegations of bad faith or inadequate procedure could not be repeated regarding the appeal procedure.

22.	The tribunal found from the respondent’s evidence that neither Brian or Neil McCance had any previous experience of such a situation.  They had not sought any guidance before they embarked upon this exercise, and sought only limited information during it.

The law and conclusions

23.	By virtue of Article 126(1) of the Employment Rights (Northern Ireland) Order 1996, “an employee has the right not to be unfairly dismissed by his employer”.  In determining whether such dismissal is fair or unfair, Article 130(1) of the 1996 Order states that “it is for the employer to show:-

(a)	the reason (or, if more than one, the principal reason) for the dismissal; and

(b)	that it is … for a reason falling within Paragraph (2);”

That the employee was redundant is such a reason under Paragraph 2 for dismissing him.

Where, as in this case, the claimant has accepted that a redundancy situation existed, the employer has discharged the burden of establishing the reason and that it was a potentially fair reason. The tribunal then must have regard to the provisions of Article 130(4) of the 1996 Order, which states that “the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer):-

(a)	depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as sufficient reason for dismissing the employee; and

(b)	shall be determined in accordance with equity and the substantial merits of the case.”

The respondent in this case sought to rely upon the redundancy under Article 174(1) on the basis that “the dismissal is wholly or mainly attributable to:-

(b)	the fact that the requirements of that business – 

(i)	for employees to carry out work of a particular kind

have ceased or diminished or are expected to cease or diminish.”

24.	It was agreed by the claimant at the tribunal hearing that there might well have been a redundancy situation, which acceptance required the tribunal to focus upon the fairness of the selection of the claimant for redundancy.  In order to determine the fairness of the dismissal, the tribunal must be satisfied from the evidence that the respondent acted reasonably in treating the redundancy as sufficient reason for dismissing the claimant.

25.	Whilst the circumstances of the respondent made it inevitable that some employee must be dismissed, it remains necessary for the tribunal to consider the means whereby the claimant was selected by the respondent for dismissal and the reasonableness of the steps taken by the respondent to choose the claimant, rather than some other employee, for dismissal.

26.	The tribunal’s findings of fact regarding the initial investigation and that conducted on appeal led it to the unanimous conclusion that there was no meaningful attempt to conduct an objective assessment of the workings of the business which could be expected of a reasonable employer. Whilst there was evidence that Brian and Neil McCance had inappropriately discussed the case, the tribunal did not conclude that anything as sophisticated as a conspiracy had occurred between them.

27.	The tribunal concluded that despite the admitted complete lack of experience of both Brian and Neil McCance in this situation, it regrettably did not occur to them to seek any meaningful advice before moving to dismiss the claimant, and the tribunal concluded that the attitude of both men in their evidence was that they still felt they had reached the correct business decision, with no apparent regrets that any procedural requirements might have been overlooked.

28.	The tribunal concluded from the facts found that the methods adopted by Brian and Neil McCance were wholly inadequate.  That conclusion found significant support in the complete absence of any consultation with the claimant or any verifiable consideration as to the possibility of alternative employment within the organisation of the respondent company.  The tribunal concluded that the absence of such considerations, which separately are well established in law as requirements of the reasonable employer in this situation, combined in this case to reveal a respondent whose conduct throughout this process fell well short of that of the reasonable employer.  The tribunal additionally felt that whilst the conduct of the respondent in adopting such a threadbare procedure might have been a genuine but clumsy attempt to address a business issue, it was little wonder that the claimant, on account of the dreadful personal circumstances in which he found himself, with such a bleak prognosis for his wife, a matter of days before Christmas, felt so aggrieved.

29.	Part of the claimant’s case is that he has been denied pension entitlement arising from his dismissal because his case is that the respondent’s contributions ought to have continued up until his retirement, which he stated he intended to be the age of 65.  The tribunal heard evidence from both parties in this regard, but unanimously concluded that that issue is incapable of resolution in this forum because it relates to interpretation of a contract made with a third party and representations which may have been made by that third party.  Whilst connected with his employment, that issue does not fall within his contract of employment for these purposes.

30.	The tribunal therefore unanimously concluded that the respondent did not act reasonably in treating redundancy as a sufficient reason for dismissing the claimant and the dismissal is unfair.

The award

31.	The basic award and the notice pay had already been paid to the claimant, although there is an agreed amount of £280.00 for loss of statutory rights.

Compensatory award

32.	By virtue of Article 157 of the Employment Rights (Northern Ireland) Order 1996, “the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer”.

33.	To that end, the tribunal assesses the loss sustained by the claimant as follows, based upon what the tribunal concluded were genuine efforts by the claimant to mitigate his loss by actively seeking employment:

34.	The compensatory award, based upon the schedule produced by the claimant and annexed to this decision is determined by the tribunal to be correctly assessed at £10,345.30.

Future Loss

35.	The tribunal next considered the question of future loss. The tribunal concluded that it could not be stated with certainty that the claimant would work until he was 65. The tribunal therefore based its calculation upon what it viewed as a more likely timescale of 2 ½ years (130 weeks), which results in : £117.50 x 130 = £15,229.50.

36.	As indicated earlier, the tribunal concluded that it does not have jurisdiction to adjudicate in the matter of the pension, therefore no award can be made in respect of any potential loss to the claimant regarding contributions from the respondent.

37.	The respondent therefore is ordered to pay to the claimant a total amount of £25,854.80.

38.	This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1996.

Chairman:

Date and place of hearing:	18 January 2006, 1 - 2 March 2006 and 
29 March 2006, Belfast

Date decision recorded in register and issued to parties: