THE INDUSTRIAL TRIBUNALS

CASE REF: 2809/16

CLAIMANT:          	 Marie McManus	

RESPONDENT:   	 Her Majesty’s Revenue and Customs	

DECISION

The unanimous decision of the tribunal is that, although the claimant was automatically unfairly dismissed because the respondent did not comply with the statutory disciplinary and dismissal procedures, no compensation is payable.  The claimant’s breach of contract claim is not well founded and is therefore dismissed. 

Constitution of Tribunal:

Employment Judge:	Employment Judge Knight	

Panel Members:		Mrs A Hamilton
                                           	Mr I Foster           

Appearances:

The claimant represented herself.

The respondent was represented by Ms Rachel Best, Barrister-at- Law, instructed by the Crown Solicitors Office.

ISSUES

1.	The respondent accepted at a Case Management Discussion held on 20 November 2017 that it did not comply with Step 2 of the dismissal and disciplinary procedures and that the claimant’s dismissal was therefore automatically unfair.  At the Hearing the claimant clarified that the only remedy sought by her was compensation. 

2.	Therefore the issues to be determined by the tribunal were:

2.1.	Whether the claimant was entitled to compensation for being automatically unfairly dismissed, and

2.2.	Whether the respondent failed to provide the claimant with a “valid voluntary redundancy” before considering compulsory redundancy and if so, whether this constituted a breach of the claimant’s contract.

EVIDENCE

3.	The tribunal considered the written and oral evidence of the claimant on her own behalf and of Ms Annette Ross and Ms Susanne Marie Williams on behalf of the respondent.  The tribunal also considered those documents to which it was referred contained in the agreed Hearing Bundle. 

FINDINGS OF FACT

4.	Having considered the written and oral evidence of both the claimant and the respondent and considered documentation to which it was referred, the tribunal found the following facts to be proven on the balance of probabilities:

4.1.	The claimant was employed by the respondent as an Administrative Assistant (“AA”) in Abbey House, Enniskillen continuously from 6 February 1989.  She was based in the Personal Tax Operations (“PT Ops”) business stream.  From 2010 she also assisted in the National Imports Relief Unit business stream prior to being made compulsorily redundant on 16 August 2016, the effective date of dismissal (“EDD”).  At the EDD, the claimant was 51 years old and had 27 years continuous service.  Her gross weekly pay was £316.40 and her net weekly pay was £264.45.  Her pension contributions from January until July 2016 were 4.6% of her gross (monthly) salary and in August 2016 she paid 3.6% of her gross (monthly) salary.

4.2.	From 2010 onwards the respondent made operational decisions which reduced the amount of administrative work that the AA grade carried out throughout the UK.  It was anticipated that business requirements would lead to a need for office closures and reduction of the workforce.  The respondent consulted with the relevant Trade Unions about workforce planning and actions to mitigate redundancy action.  This included the respondent encouraging its AA staff to seek promotion to the Administrative Officer (“AO”) grade by setting up an AA-AO promotion list.  The claimant was on the promotion list. 

4.3.	On 20 November 2013 the respondent informed staff based in the Enniskillen office of its intention to withdraw the PT Ops stream of business from Enniskillen as part of the UK strategy.  An email was sent to the claimant (and also to other AAs in PT Ops in the Enniskillen office) on 20 November 2013 advising that she was eligible to apply for voluntary exit (“VE”) and attaching guidance for the VE scheme.  The claimant decided not to apply for VE. 

4.4.	At this stage the claimant and other staff were made aware that the Enniskillen office was unlikely to remain open in the long term but there was a commitment that it would not close before 2015.  The claimant’s line manager wrote to her on 12 June 2014 to inform her that she had been placed in the redeployment pool in order to find her a suitable alternative post. 

4.5.	Following an announcement to staff at the Enniskillen office in early August 2014, on 11 August 2014 Ruth Owen, Director General of HMRC emailed the claimant to inform her that she had been declared “surplus” with effect from 6 August 2014, meaning that HMRC did not have clear redeployment plans for her and that she was at risk of redundancy.  The claimant was informed that in compliance with the Civil Service Compensation Scheme rules, HMRC must invite her to apply for voluntary redundancy before considering compulsory redundancy. 

4.6.	The claimant was sent details of her voluntary redundancy offer on  26 September 2014.  She was offered compensation of £40,250.00 on the basis that she would agree to the termination of her employment as from 31 December 2014.  The accompanying information made it clear that the next step could be compulsory redundancy in the event that the offer was refused and a suitable redeployment post was not found and that another voluntary redundancy scheme would not be available in these circumstances.  The claimant, unlike the majority of her colleagues, declined the offer of voluntary redundancy.  The tribunal did not accept her contention that she did not fully understand the basis upon which this offer was made.  While it was correct that at this point no firm closure date had been fixed the tribunal is satisfied that the claimant was fully aware that in all likelihood the Enniskillen office would not remain open in the long term after 2015.

4.7.	The claimant had a number of meetings with her line manager between 14 January 2015 and 25 August 2015 at which her redeployment plan was kept under review.  The tribunal accepted that the respondent made genuine efforts to find alternative employment for the claimant but that the opportunities for her were limited, partly because the claimant expressed a preference to carry on working in the Enniskillen office and for personal reasons could not consider relocating to a post outside Enniskillen.  Additionally there was no arrangement in Northern Ireland for HMRC employees to be redeployed to the Civil Service as existed in other parts of the UK. 

4.8.	In August 2015 the claimant was advised that HMRC intended to start the process of “meaningful consultation” with the Trade Unions followed by a “period of reflection” and that these processes could result in compulsory redundancy notices being issued if alternative solutions could not be found.  The claimant’s case was discussed as part of the meaningful consultation process on 15 October 2015 between the Workforce Management and Planning Team and the Trade Unions.  This confirmed that she was on the AA –AO promotion list, that she wished to be redeployed within the Enniskillen location only and that she would not consider the Belfast office due to her responsibilities and that she would wish to stay until the Enniskillen office closed.  The claimant was not present at this meeting. 

4.9.	A period of reflection (“POR”) commenced on 7 December 2015.  At a meeting of representatives from HMRC and the National Trades Unions Committee on that date it was noted that redeployment was unlikely for the claimant.  On 10 December 2015 and 7 January 2016 the respondent emailed the claimant (and other affected staff) to advise that while HMRC would continue to look at redeployment possibilities, the options were limited and an indication was requested as to whether she wished to acquiesce to compulsory redundancy.  On 20 January 2016 the POR meeting decided that all redeployment options had been explored for the claimant and that the next step would be to issue a compulsory redundancy notice to her.  The respondent did not arrange a meeting with the claimant prior to issuing the compulsory redundancy notice.  The tribunal is satisfied that had such a meeting been arranged it would not have made a difference to the outcome for the claimant. 

4.10.	On 16 February 2016 the claimant was given 6 months’ notice of her compulsory redundancy to take effect on 16 August 2016.

4.11.	She appealed against this decision on the grounds that:

•	Procedures for dismissal had not been followed.

•	There were alternatives to dismissal that could have been explored.

•	Selection for redundancy was potentially discriminatory.

•	Other factors had not been considered.

4.12.	The appeal meeting took place on 22 April 2016.  This was conducted by Ms Ross.  The claimant was accompanied by her Trade Union representative.  The claimant’s appeal was not upheld and the claimant was notified accordingly and informed of the reasons for the decision.

4.13.	The respondent paid the claimant contractual redundancy pay of £23,000.00 based on her last day of service of 16 August 2016.

4.14.	The claimant registered with two Recruitment Agencies and secured employment as a temporary Administrative Officer in the Northern Ireland Civil Service based in Enniskillen from 4 August 2016 until 12 July 2017.  The tribunal notes that the claimant’s new job commenced before her dismissal by the respondent took effect and she therefore received her salary from the respondent and her earnings from her new job from 4 August 2017 until and including 16 August 2017. 

4.15.	Based on the claimant’s payslips and Schedule of Loss it appears that the claimant sustained a net loss of earnings of £300.19 between 16 August 2016 and 28 October 2016. 

4.16.	From 28 October 2016 the claimant started to earn more that she had when employed by the respondent and her loss of earnings therefore ceased from that date.  She was unemployed from 13 July 2017 until 6 August 2017 when she received £177.00 in Job-Seeker’s Allowance.  She resumed employment as an AO on 7 August 2017 on a temporary contract until July 2018.  The claimant further contended that she had lost three weeks pension contributions in July 2017 and three months pension contributions between 16 August 2016 and 7 October 2016.  She did not quantify the pension contributions claimed.  The claimant did not seek any other employment after securing her temporary position in the civil service in 2016.

4.17.	The Enniskillen office was closed by the respondent at the end of December 2017.

4.18.	At the hearing the claimant did not dispute that there was a genuine redundancy situation but rather disputed the timing of her dismissal contending that she could have been kept on until the office closed.  She alleged that she continued to help NIRU with filing until her dismissal and that an AO and an AA left and that she could have performed these roles.  However, on the claimant’s own case it appears that a business case to replace these staff was not approved due to a policy of “no vacancy filling” outside regional centres, although the claimant was not aware of this policy at the relevant time.  The tribunal therefore accepted that there was in fact no suitable vacancy to which the claimant could have been redeployed after 16 August 2016.

4.19.	In relation to her breach of contract claim, she further alleged that it would not have been “outside the gift” of the respondent to offer her voluntary redundancy for a second time at the same time as other colleagues in a different business stream.  The claimant could not identify any contractual term which would have imposed such an obligation upon the respondent.

Conclusions

Breach of Contract
  
5.1	The tribunal does not consider that the claimant has shown that there was any contractual obligation on the part of the respondent to pay her the balance between what she would have received had she accepted the offer of voluntary redundancy and the contractual redundancy payment made.  There was no contractual obligation upon the respondent to offer the claimant voluntary redundancy a second time.  The tribunal is satisfied that the amount of redundancy payment made to the claimant was in accordance with her contractual rights and that the respondent fully complied with its contractual obligations in this regard.  Therefore it follows that she cannot prove on the balance of probabilities that there was a breach of contract on the part of the respondent and this claim must fail.

Unfair Dismissal

5.2	The tribunal was satisfied that the respondent has shown on the balance of probabilities that the principal reason for the claimant’s dismissal was redundancy and therefore had discharged its burden under Article 130(1) of the Employment Rights (NI) Order 1996.  The fairness or unfairness of the dismissal (having regard to the reason shown by the employer depends on whether “(a) in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and (b) shall be determined in accordance with the equity and substantial merits of the case.” [Article 130(4) 1996 Order].  In the present case the tribunal is satisfied that the respondent largely adhered to the standards of fair behaviour set out by the Court of Appeal in England and Wales in the case of Williams v Compair Maxam Limited [1982] ICR 156.  The respondent gave adequate warning of the impending redundancies, consulted with the Unions in order to mitigate the effects of the proposed redundancies and imposed compulsory redundancy only when the redundancy avoidance measures had been exhausted and extensive efforts, albeit unsuccessful, were made to find a suitable redeployment post for the claimant. 

5.3	Nevertheless the claimant’s dismissal was automatically unfair due to the respondent’s admitted failure to comply with the statutory dismissal and disciplinary procedures. 

5.4	The tribunal therefore considered the measure of compensation payable to the claimant. 

Basic Award

   	The basic award is £7,910.00 based on:

Claimant’s age at EDD	=	51 years

27 full years’ continuous service

Gross weekly pay		= 	£316.40

However as the principal reason for the claimant’s dismissal was redundancy, any redundancy payment must be offset against the basic award as per Taylor v John Webster, Building Civil Engineering [1998] ICR 561.  Therefore the amount of basic award payable to the claimant in this case is reduced to nil.

Compensatory Award

5.5 	The object of the compensatory award is to compensate an employee for loss flowing directly from the dismissal and is to be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the claimant in consequence of the dismissal insofar as the loss is attributable to action taken by the employer. (Article 157 of the Employment Rights (NI) Order 1996 as amended). 

In the present case the tribunal was satisfied that the claimant’s loss of earnings effectively ceased on 28 October 2016.  Taking account of the fact that the claimant has not sought any other employment since securing her current role, the tribunal considers that it would not be just and equitable to make any compensatory award beyond that date.  The tribunal considered that the claimant’s pension loss based on her gross pay was restricted to the period from 16 August 2016 until 7 October 2016, when pension contributions were first paid in her new employment.  However the claimant did not provide sufficient evidence to enable the tribunal to quantify the amount of pension loss during this period. 

  	The compensatory element is therefore calculated to be:

           Actual Loss of Earnings as found in paragraph 4.15 above            		£300.19

           Loss of statutory rights (equivalent to one week’s pay)                   		£316.40   

										        		£616.59
                            
Plus 10%Statutory Uplift for Failure to Comply
with the statutory dismissal procedure                                             		£  61.66  

      	The total compensatory award                                                         		£678.25

However applying Polkey, as the tribunal has concluded that there was a 100% chance that the claimant would have been dismissed with effect from 16 August 2016 had the respondent followed the statutory dismissal procedures, the compensatory award must also be reduced to nil.  Had there not been a “Polkey deduction”, the amount of compensatory award would still have been reduced to nil, as the balance of the contractual redundancy paid, exceeds this amount.

Employment Judge: 

Date and place of hearing:  17 May 2018, Belfast.

Date decision recorded in register and issued to parties: