Appeal No. EAT/550/90

	EMPLOYMENT APPEAL TRIBUNAL
	4 ST. JAMES'S SQUARE, LONDON, SW1 4JU

		At the Tribunal
		On 22 November 1991

	Before

	THE HONOURABLE MR JUSTICE TUCKER

	MR S M SPRINGER MBE

	MRS M E SUNDERLAND JP

HLF LTD	APPELLANTS

MR R M PARRY	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	Mrs M Fricker
(of Counsel)
Atherton & Godfrey
8 Hall Gate
Doncaster
DN1 3LU

For the Respondent	Mr D R Sneath
(of Counsel)
Hett Stubbs & Kemp
239 Ashby High Street
Scunthorpe
S Humberside
DN16 2SQ

	MR JUSTICE TUCKER:  This is an employer's Appeal from a decision of the Industrial Tribunal held at Hull on 14 August 1990 whereby it was decided that the Applicant, the Respondent to this Appeal, had been unfairly dismissed.  He was awarded compensation of £6,439.  The Appeal is brought on the following points of law.

1.That the Tribunal erred in law in finding that the Appellants had not fulfilled the requirements for consultation, when in fact the Appellants had complied with the requirements of consultation in the Code of Practice of the Industrial Relations Act 1971 at paragraphs 65 and 66. 

2.That the Tribunal erred in law in finding on the one hand that consultation with the staff association and trade union had occurred and the accepted criteria for redundancy had been notified to the Department of Employment and finding on the other hand that consultation with the employee had not occurred.

3.That the finding of the Tribunal was perverse in that having found that a redundancy existed, therefore that both the supervisor post and an inspector post had to go, it was perverse to find that a post for the Respondent as inspector could have been found when no vacancy existed and to create such a post would have necessitated another inspector being made redundant.

4,That the Tribunal were wrong in law in failing to acknowledge that consultation was futile in accordance with the test proposed by Lord Bridge in the case of POLKEY v A E DAYTON SERVICES LTD [1988] ICR 142.

	In his answer the Respondent relies on the grounds relied upon by the Tribunal and also the following grounds:

1.That the Tribunal acted properly in law in its finding as to the redundancy situation prior to the Respondent's dismissal.

2.	That grounds 5 - 8 in the Applicants' Notice of Appeal cannot be made out.

	The facts are not in dispute and they are helpfully set out in the Tribunal's reasons.  The Respondent was employed by the Appellants as a quality control inspector.  The Appellants' business grew extensively during the middle to late 1980's.  They manufacture three-piece suites but economic downturns have affected them cruelly, as the Tribunal put it so that they made a loss in 1988 and a continuing loss situation was occuring at the date of the hearing.  The Appellants employed during early 1989 500 persons but it was by the time of the hearing, down to 380.

	The first redundancy exercise in February 1989 was to make 31 people unemployed by reason of redundancy.  Then there is this important finding.  There is a staff association which has regular meetings to be updated on the facts of current business.  When the company faced redundancy declarations in late 1988 and early 1989, they cast about for what should be their proper principles of selection.  They eventually concluded that they were to be these:

1.First those holding positions that would no longer be retained.
2.On the basis of individual disciplinary records.
3.On individual skills.
4.If employees cannot be differentiated on the preceding factors, on the last in first out basis.

	Those were the criteria that were accepted by the staff association and the trade union and they were notified to the Department of Employment.  That was the situation at the last round of redundancies in February 1989.

	So there were consultations in late 1988 and early 1989 between the Appellants and the staff association and trade union and criteria were drawn up and notified to the Department of Employment.  Mrs Fricker for the Appellants, submits that consultation with the union includes, or must be deemed to include consultation with the employee.  She says that it was not right to describe the dismissal as "a bolt from the blue" so far as the Respondent was concerned.  He knew that the company were facing a redundancy situation and that redundancies were taking place.  In any event she contends that consultation would have been futile since there was no suitable job available to be offered to the Respondent.

	Mrs Fricker submits that the Tribunal got itself into a conundrum.  They found that the Respondent ought to have been retained, though there was no job for him to do so someone else would have had to be made redundant to make way for him.

	It is clear that at the Industrial Tribunal the Respondent, who appeared in person, focused his argument on the fact that he had not been personally consulted.  He felt that had consultation taken place he would have been able to persuade the Appellants to offer him a job.  The only appropriate job was the lower paid job of an inspector which he was qualified to do.  It is accepted on his behalf that such work could only have been made available to him either by "bumping" someone else out, as the expression is, or by appointing the Respondent as an inspector at large to cover for other inspectors when they were absent through illness.

	Mr Sneath on the Respondent's behalf submits that the consultations which took place with the staff association were insufficient, occuring as they did in 1989 over a year before the Respondent's dismissal which was on 30 March 1990.  In his words, it is stretching a point to suggest that those consultations can govern what took place.  He contends that although the Respondent knew that some restructuring was taking place, he was not aware that he had been selected for redundancy.  He submits that there was an obligation to consult about the particular proposal, and to do so directly and personally with the employee concerned.  He says "It is wrong to suggest that such an exercise would have been futile". 

	 What of the law?

	Section 99(1) of the Employment Protection Act 1975 imposes a duty on an employer proposing to dismiss an employee as redundant, to consult representatives of that employee's trade union about the dimissal in accordance with the following provisions of the section.  Para. 65 and 66 of the Industrial Relations Code of Practice 1972 define what consultation means and what it involves.  Mrs Fricker submits that the Appellants complied with these provisions by holding the discussions with the staff association and trade union and by drawing up, with their agreement, the criteria to be adopted in selecting employees for redundancy.  Mr Sneath refers also to para. 46 of the code setting out the matters which should be covered by such consultations but he does not criticise  the Appellants for the consultations which did take place or the criteria which they adopted, and he does not suggest that the Appellants did not follow those criteria when selecting the Respondent for redundancy, nor does he suggest that he was wrongly selected ahead of some other employee.  Mr Sneath's submission is restricted to a criticism that no personal and immediate consultation took place with the Respondent.

	It might, we think, have been more courteous to the Respondent if such a consultation had taken place but would it have made any difference?  What had the Appellants to offer?  Did they consider that it would have been futile to do so?

	That is the word used by Lord Bridge in his oft quoted speech in the well-known case of POLKEY v A E DAYTON SERVICES LTD [1988] ICR 142, the relevant passage of this speech being reported at page 163.

	The speech of the Lord Chancellor, Lord Mackay in the same case should not be overlooked, particularly the passage which occurs at page 153 of the report between (E) and (G).  This is what the Lord Chancellor said:
"..On the other hand, in judging whether what the employer did was reasonable it is right to consider what a reasonable employer would have had in mind at the time he decided to dismiss as the consequence of not consulting or not warning.  

If the employer could reasonably have concluded in the light of the circumstances known to him at the time of dismissal that consultation or warning would be utterly useless he might well act reasonably even if he did not observe the provisions of the code.  Failure to observe the requirement of the code relating to consultation or warning will not necessarily render a dismissal unfair.  Whether in any particular case it did so is a matter for the industrial tribunal to consider in the light of the circumstances known to the employer at the time he dismissed the employee."

	Having regard to the evidence which the Tribunal accepted that one post at supervisory level and one inspector had gone, did the Appellants act reasonably in not holding personal consultations with the Respondent?  What could have been achieved by doing so?  The Tribunal found that the Respondent was right in saying that he could have done an inspector's job and that he would have accepted an offer of such work, but they made no finding that had he been consulted he would have managed to persuade the Appellants to offer him such a job.  They were not in a position to do so.

	It is in our opinion unrealistic to suggest that the Respondent might have been offered a position as inspector at large, and not only unrealistic to suggest but also highly undesirable in practice that someone else should have been made redundant in order to keep him on.

	We conclude that in the circumstances in which they found themselves the Appellants acted reasonably in failing to consult with the Respondent personally.  They had fulfilled their obligations under the statute and the Code of Practice by having consultations with the staff association and trade union and by drawing up and agreeing, and adopting fair criteria.  We bear in mind the judgment of Mr Justice Browne-Wilkinson as he then was in WILLIAMS v COMPAIR MAXAM LTD [1982] ICR 156, the relevant part of the judgment occuring at page 162.  If there was a departure from the principles which Mr Justice Browne-Wilkinson there enunciated, there was in our view a good reason for doing so.  It would have been utterly useless and futile for the Appellants to have consulted the Respondent about alternative employment because they had no job to offer him.  We cannot excuse the Appellants from their lack of courtesy in failing to consult with an individual beforehand about his selection for redundancy.  We would have been minded to make a nominal award to mark that view had we concluded that this amounted to unfairness, but we do not so find.  In our judgment the Appellant acted fairly in dismissing the Respondent.

	We disagree with the Tribunal's conclusion that there were no exceptional circumstances here.  That is not a conclusion which they were entitled to reach on the facts which they found.  Further, they erred in law in finding that the Appellants had not fulfilled the requirement for consultation and also in failing to acknowledge that consultation was utterly useless and futile.  For these reasons the decision of the Tribunal must be set aside and the award quashed.