Appeal No. EAT/115/92

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 5 November 1993
	Judgment delivered on 24th November 1993

	Before

	THE HONOURABLE LORD COULSFIELD

	MISS J W COLLERSON

	MR S M SPRINGER MBE DL

MR W COWLEY	APPELLANT

MANSON TIMBER LTD	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR T KIBLING
	(Of Counsel)
	Freeth Cartwright
	Solicitors
	Willoughby House
	20 Low Pavement
	Nottingham
	NG1 7DI

For the Respondents	MR P LAWRENCE
	(Of Counsel)
	Messrs Eking Manning
	Solicitors
	44 The Ropewalk
	Nottingham
	NG1 5EL

	LORD COULSFIELD:     This is an appeal against the decision of an Industrial Tribunal, dated 30 December 1991, sitting at Nottingham under the chairmanship of Mr W G Senior.  The Industrial Tribunal held that the appellant had been unfairly dismissed, but awarded  only the sum of £283.20 as compensation.  The appellant appeals against that decision.  There was a cross-appeal at the instance of the respondents, but that was not argued before us.

	The appellant was employed by the respondents as a fork-lift driver from 18 March 1970 until 1 March 1991, when he was dismissed by reason of redundancy.  The Industrial Tribunal heard evidence that the respondents had suffered a downturn in trade in the course of 1991.  Their staff numbered nine, and they decided to make two of those nine redundant.  There was no trade union involved, and no agreed procedure for redundancies.  Each of the nine employees had particular tasks, skills, and responsibilities, and all, except one, had long service.  The redundancies followed upon a meeting between representatives of a number of companies forming a group to which the respondents belong.  The actual selection was made by the respondents' managing director, who considered the various employees and their skills and capacities.  Before the Industrial Tribunal, evidence was given in relation to each of the employees, and as to the reasons for selecting the two who were made redundant.  The Industrial Tribunal's decision on the question whether this was a case of redundancy is set out, in the statement of reasons, as follows:-

"11.	It was argued on behalf of the applicant that the respondents had not made out a case for declaring the applicant to be redundant.  It was submitted that the work which the applicant did had not ceased or diminished.  The Tribunal did not accept this submission.  There was in any effect a need to reduce this small workforce and also the evidence showed that work which the applicant as a forklift truck driver had diminished.  These two factors had to be read together."

Having decided which two were to be made redundant, the managing director invited each of them to attend at his office, and presented a letter of dismissal and details of the package which they were to receive.  Neither of them was warned, nor consulted, before the declaration of their redundancy.  The appellant contended that, in any event, the lack of consultation made the dismissal unfair.  With regard to this, the relevant findings of the Industrial Tribunal are:-

"13.	..........In a case such as this where there is no union involvement, one has to look at the practical question as to whether any form of consultation with the employee could be meaningful.  Clearly it would be unfair to expect an employer to have to discuss with small workforce the question of which amongst them had to be selected.  This obviously had to be a matter for management.  However, some form of warning and announcement to the employees might have achieved advantages for employers and employees alike having regard to a number of possibilities which might have arisen.

14.	It is difficult to particularise as to what could have occurred in a situation like this, where the opportunity for voluntary redundancies did not appear to be appropriate, and where the opportunities for alternative employment within this small company and the associated companies, did not appear to be a real possibility.  However, to deal with the matter entirely without any pause for warning or otherwise appeared to the Tribunal to be less than reasonable.  However, if the company had acted without so much haste, and even if something in the nature of a reasonable process had been adopted, the finding of the Tribunal is that the result would have been the same, and an objective selection of Mr Cowley being made redundant would have resulted in any event.

15.	The finding of the Tribunal was that if this reasonable procedure had been adopted the result might well have been that Mr Cowley would have worked a further 14 days before being declared redundant."

On that basis, the Industrial Tribunal awarded to the appellant a sum equivalent to his wages for that period.

	The appeal before us was argued on two grounds.  The first was that the Industrial Tribunal had failed to explain the various remedies open to the appellant, and, in particular, failed to explain to him the possibility of re-engagement, and that their decision was thereby rendered a nullity.  The second submission was that the Industrial Tribunal had adopted the wrong approach to the assessment of compensation.  It was submitted that they should have assessed the appellant's loss, and the likelihood of his being dismissed if proper consultation procedures had been observed, expressed as a percentage:  and, on that basis, should have made their award.  These two submissions are separate and distinct.  In our view, the second submission can be disposed of briefly and we, therefore, deal with it first.  It was submitted that the Industrial Tribunal had lost sight of what the objective of consultation was.  It was not merely a matter of exchange of information, but of seeking ways of avoiding redundancy.  Matters such as lay-off, short-time, or part-time working could be considered, and, since the respondents formed part of a group, there was also the possibility of alternative employment.  In such a situation, the approach should be to assess the lost chance of continuing in employment, on the lines adopted in Sillifant -v- Powell Duffryn Timber Ltd [1983] IRLR 91.   In the present case, the appellant's contract had contained a flexibility clause, and there was no certainty as to what might have emerged if proper consultation had taken place.  Similarly, there might have been the potential for lay-off or short-time.  The managing director had not been aware of all matters affecting the employee which might have been taken into account.  The decision of the Industrial Tribunal was inconsistent and, insofar as they suggested, in paragraph 13, that some form of warning and announcement might have achieved advantages, that was not truly consistent with the finding that the result would have been the same, even if proper consultation had been carried out.

	In our opinion, this argument is not well founded.  It is, perhaps, not entirely clear what "advantages" the Industrial Tribunal had in view in the last sentence of paragraph 13 of their reasons.  It is, however, clear, looking at the statement of reasons as a whole, that the Industrial Tribunal took the view that consultation would, at most, have delayed the decision to dismiss, and would not have saved the appellant's job.  The managing director had considered the position of each of the employees, and had described in evidence how he had weighed up the factors affecting each of them in describing who should be made redundant.  The decision was based on an assessment of each individual in relation to the employers' requirements.  There was, in our opinion, ample evidence upon which the Industrial Tribunal were entitled to reach the conclusion which they did reach.  That is entirely a conclusion of fact, and one for the Industrial Tribunal.  This was not a case in which criteria of selection, such as last in/first out, were appropriate;  nor was it a case in which the number of persons to be made redundant had to be selected from a number of employees with essentially similar skills and capabilities;  and the Industrial Tribunal were entitled to hold that this was not a case in which lay-off or short-time were relevant considerations.  This was a case in which a small company had to reorganise the staff carrying out its work so as to produce a reduction in staff, leaving employees who could cope with the requirements of the business.  In our opinion, therefore, the Industrial Tribunal were fully entitled to reach the conclusion which they did.

	The first submission made on behalf of the appellant has to be considered in the context of the attitude taken, on instructions, by counsel for the respondents.  Counsel for the appellant founded on s.68(1) of the Employment Protection (Consolidation) Act 1978, which provides, inter alia, that the Industrial Tribunal:-

"shall explain to the complainant what orders for reinstatement or re-engagement may be made under section 69 and in what circumstances they may be made, and shall ask him whether he wishes the tribunal to make such an order, and if he does express such a wish the tribunal may make an order......"

It was common ground that the Industrial Tribunal, in the present case, did not explain what orders for reinstatement or re-engagement might be made, or invite the appellant to express a wish.  It was, however, also common ground that the appellant was legally represented at the hearing before the Industrial Tribunal, and that no suggestion was made at the hearing that there should be an order for reinstatement or re-engagement.  It is not surprising that that should have been so because the appellant was born on 19 January 1929, so that at the time of his dismissal he was approaching an age at which he might have retired, and, on the information before us, had asked for early retirement on previous occasions. The only remedy sought at the hearing was compensation;  as, indeed, it had been in the applicant's IT1 form. It is perhaps unlikely, in the circumstances, that this might ever have been regarded as a case for reinstatement or re-engagement.  Counsel for the appellant, however, submitted that s.68 imposes an imperative statutory requirement upon Industrial Tribunals of such a character that, any failure to comply with it, renders the proceedings null.  It was suggested that this may be a question of some importance, because the relatively small number of cases in which reinstatement or re-engagement orders are made raises doubt whether Industrial Tribunals do in fact, in many cases, comply with this imperative instruction.  Certainly, it was the experience of the industrial members of this Tribunal that there have been cases in which the requirement was not formally observed.  Counsel for the respondents, however, did not seek to argue that there was any construction of the provisions of s.68 contrary to that advanced on behalf of the appellant, although he did not concede the point.  His submission was that, in the present case, as the point had not been taken before the Industrial Tribunal, it was a new point of law, and, although it had what might be called a jurisdictional flavour, there was a discretion in this Tribunal as to whether the point should be heard and determined, or not.  He further submitted that, in the particular circumstances of this case, we should exercise our discretion against hearing and determining the point.  He added, however, that he did not concede that, even if the literal construction of s.68(1) adopted on behalf of the appellant was correct, it necessarily followed that the subsequent proceedings would be invalid, but did not refer to any relevant authority.   In this state of the argument, we are left to determine a point which could be of some importance, without the benefit of truly competing arguments, and to do our best to reach a decision, on the material before us. 

	The appellant's argument in relation to the construction of s.68(1) founded primarily on the wording of the provision itself, supported by reference to other similar statutory provisions, including ss.53 and 69 of the Act and, in addition, ss.8 and 11(8), as well as s.30 of the 1993 Act.  Secondly, the construction was supported by reference to Pirelli General Cable Works Ltd -v- Murray [1979] IRLR 190 in which it was observed that the obligation imposed by s.68(1) was mandatory, although, in London Transport Executive  -v- Clarke [1980] ICR 532, it was questioned whether that interpretation necessarily applied in all cases.  Thirdly, it was pointed out, by reference to the proposals of the Royal Commission on Trade Unions and Employers' Associations [1965-1968] Cmnd. 3623, and the Current Law Statutes annotations to s.71 of the Employment Protection Act 1975, that the purpose of the provision had been to encourage the use of orders for re-engagement or reinstatement in the light of evidence that such orders were not being used by Industrial Tribunals to the extent which had been thought desirable;  while the current figures suggested that Industrial Tribunals were, even now, not responding to the purpose of the Act since, of approximately 6000 claims per annum coming before Industrial Tribunals, in ninety per cent the decision was to award compensation.   Finally, reference was made to the speech of Lord Bridge in Polkey -v- A E Dayton Services Ltd [1988] ICR, at p.164, in which it was emphasised that, at least as far as re-engagement was concerned, Industrial Tribunals required to consider the position as at the date of the hearing, which might involve quite different questions from those which arose at the time of the original dismissal.  

	It is obvious that the wording of s.68(1) of the 1978 Act is, on its face, imperative.  In Pirelli General Cable Works Ltd -v- Murray supra, Bristow J observed:-

"This requirement, however unnecessary it might seem in cases where a complainant is professionally represented, is mandatory.  So the Tribunal has first to decide whether the dismissal was unfair.  Having done so, if yes, then it must explain reinstatement and re-engagement and ask if the complainant wants such an order made."

That was, however, a case in which the Industrial Tribunal had held the dismissal to be unfair, but the Employment Appeal Tribunal had concluded that they were not entitled to reach that decision, and that there was not sufficient material before the Employment Appeal Tribunal to enable it to decide whether the dismissal was unfair and, therefore, that the case would have to be remitted to a different Industrial Tribunal.   The comments on the procedure arose because the Industrial Tribunal had made an order for reinstatement on terms to be agreed between the parties, and the Employment Appeal Tribunal were pointing out that, before making such an order, the Industrial Tribunal must follow the procedure laid down in the Act, and must specify the terms of the reinstatement or re-engagement in the order which was made.  It does not appear that there was any argument in Pirelli General Cable Works Ltd -v- Murray on the question whether s.68(1) should be treated as directory or mandatory.  In the circumstances, we do not think that the case can be taken as having definitely established any rule, and that is especially so in view of the comment by May J in London Transport Executive -v- Clarke supra, to the effect that the interpretation given in the Pirelli  case did not necessarily apply in all cases.   It seems to us, therefore, to be open to us to consider, in accordance with principle, whether a failure to comply with the requirements of s.68(1) necessarily makes a decision invalid.  The relevant principles are discussed in Maxwell on Statutes, p.314, and it is clear that, in each case, it is necessary to look to the subject matter and the importance of the provision disregarded in relation to the general object of the Act, and so to try to arrive at the intention of the legislature.  In B -v- B [1961] 2 AER 396, Scarman J, in dealing with a question of a decree for divorce or nullity of marriage, said:-

"I agree that prior authority on other statutes is not of great assistance to the court in determining the intention of the legislature when this section was enacted.  It seems to me that it is my duty to look at this statute, to look at the circumstances in which it was enacted and the purposes that it was intended to serve, and then to come to a conclusion whether the purposes intended this requirement as to the court's action before making a decree absolute be something without which the parties should have no decree absolute or merely a beneficial requirement which, if ignored by the parties (of course in all innocence) could thereafter be ignored by the law of the land."

	It is clear from the material put before us, by counsel for the appellant, that the legislature regarded it as of substantial importance that Industrial Tribunals should specifically find out what the complainer's wishes were in regard to orders for reinstatement or re-engagement.  We would not seek in any way to detract from the importance of that requirement, or to encourage Industrial Tribunals not to follow it.  If there is indeed a practice of ignoring the requirement in Industrial Tribunals, then, plainly, that is a practice which should not continue.  It is, however, a very different matter to conclude that failure to follow this procedural requirement must be treated as, in all cases, rendering the decision a nullity.  It would, in our view, be going too far to hold that, in the present case, in which the complainer was legally represented and in which, for the reasons to which we have referred, it might well be thought that an order for reinstatement or re-engagement was never a real possibility, the failure on the part of the Tribunal should send both parties back for the expense and inconvenience of a further hearing.   We do not think that the purposes and objects of the legislation compel us to hold that every such failure should render the decision invalid.  Considering the matter as thus best we can, therefore, we have come to the conclusion that the failure to comply with s.68(1), in the present case, does not render the decision invalid.  It follows that this appeal should be dismissed.

	We should also refer briefly to the argument advanced on behalf of the respondents  that the contention here put forward on behalf of the appellant was a new point of law, which we should not allow to be raised at this stage.  In the present case we are concerned with a somewhat different question from any considered in the authorities to which we were referred.  In the present case, the alleged failure was a failure on the part of the Industrial Tribunal, rather than a failure on the part of a party, or his advisers, to take a point of law which should properly have been taken before the Industrial Tribunal.  That being so, it seems to us that the proper approach is not to consider whether a new point of law has been raised at too late a stage, but whether the proceedings have been properly conducted in accordance with the statutory requirements.

	In the whole circumstances, therefore, we shall dismiss both the appeal and the cross-appeal.