Appeal No.	 EAT/253/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 23 July 1998

Before
HIS HONOUR JUDGE PETER CLARK
MRS E HART
MR K M YOUNG CBE

HOWLETT MARINE SERVICES	APPELLANTS

A E E U	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR D TROTTER
(Of Counsel)
Messrs Watson Burton
Solicitors
20 Collingwood Street
Newcastle upon Tyne
NE99  1YQ	
For the Respondents	MR B CARR
(Of Counsel)
Messrs Rowley Ashworth
Solicitors
247 The Broadway
Wimbledon
London
SW19  1SE	

	JUDGE CLARK:   This is an appeal by the employer, Howlett Marine Services (“the Company”) against the reserved decision of an Industrial Tribunal sitting at Newcastle upon Tyne, promulgated on 10 December 1997, upholding in part the Respondent Union’s application for a protective award under Section 189 of the Trade Union and Labour Relations Consolidation Act 1992 (“the Act”).

The facts
	The Company operated the business of supplying labour as an employment contractor to the marine industry mainly in the Tyneside area.  The Managing Director of the Company was Mr Babadi.

	In about July 1996 the Company entered into a written contract with Swan Hunter to supply scaffolders as and when required to work on a ship, “The Solitaire” owned by a third party.  Swan Hunter were the main contractors on that project.

	Under the terms of the contract Swan Hunter were entitled to suspend work in whole or in part at any time and with immediate effect; take part of the contract work away from the Company and require a reduction in manning levels on site.  Swan Hunter did not guarantee any minimum manning levels; if there was over-manning Swan Hunter would not pay the Company.	
	Swan Hunter gave instructions as to how many scaffolders were required at any time.  The Company then recruited those tradesmen.  Initially 12 scaffolders were supplied by the Company; that number rose to 35 and finally to ninety.

	On 29 January 1997 Swan Hunter summoned Mr Babadi to a meeting.  At that meeting he was handed a written instruction to reduce the scaffolding personnel by approximately 15 scaffolders by 31 January.  As a result he telephoned Mr Brian Hunter of the Union, which represented the relevant workforce, informing him of this development.  He followed that up with a letter and fax the following day.  The first tranche of scaffolders, 22 in all, then made redundant, were given one week’s notice of dismissal.

	On 31 January Mr Moody, the Union Deputy Shop Steward was called into the office at 9.30 a.m. to be told of the redundancies.  He was unhappy with the list of those to be made redundant.  He contended that the “last in first out” principle was supposed to operate.  On that basis some of those named ought not to be redundant.  He telephoned Mr Clive Hunter, a full-time official of the Union, who advised him to go back to management and tell them that if 20 men were to be made redundant there would have to be consultation and a 30-day notice period.  

	It was Mr Moody’s evidence to the Industrial Tribunal that Mr Babadi was made aware of the statutory consultation requirements.  Mr Babadi denied being aware of those requirements but the Tribunal preferred Mr Moody’s evidence.

	On 6 February Mr Babadi attended a further meeting with the representative of Swan Hunter, Mr Marshall.  On that occasion he was instructed to reduce the number of scaffolders by 20 immediately.  Again he gave one week’s notice to the second tranche of redundant scaffolders.

	On 13 February Swan Hunter gave a further instruction that a reduction of 20 more scaffolders should take place with immediate effect.  Again, notice of one week was given to the third tranche of redundant workers.

	Between 18 and 25 February Mr Babadi was absent from work due to a family bereavement.  On 19 February a meeting took place between Swan Hunter and Mr Errington who represented the Company.  They indicated to him that they wished to terminate the scaffolding contract.  At that stage there was some 25 scaffolders remaining.  On 21 February the Company gave notice of termination of the contract.  That fact was communicated to the Union.  The remaining scaffolders, the 4th tranche, were given one week’s notice of dismissal.

The Industrial Tribunal Decision
	Before the Industrial Tribunal the Company made the following concessions recorded at paragraph 19 of the reasons in this way:
“(a)   that there was a dismissal by reason of redundancy, of workers on the Solitaire project site;
  (b)   that it was a common establishment;
  (c)   that no proper consultation had taken place;
  (d)   that the AEEU had locus standi to bring the action before the industrial tribunal;
  (e)   that written information given to the union, did not set out all the elements of facts, required by section 188(4).”		

Mr Trotter has made clear that as to concession (c) the concession was that no, rather than inadequate consultation had taken place.  However, the Company relied upon the provisions of Section 188(7) of the Act, namely:
“If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a [consultation] requirement .....  the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances.”
	In deciding that issue the Industrial Tribunal was directed to the relevant authorities and in particular the leading Court of Appeal case of Clarks of Hove Ltd v Bakers’ Union [1978] ICR 1079.  In that case Geoffrey Lane LJ observed (at page 1085G) that to be special the relevant event must be something out of the ordinary, something uncommon.  Further, on the facts of that case, Roskill LJ reminded appellate Tribunals and Courts that so long as the facts found by the Industrial Tribunal were capable of amounting to special circumstances, it is a question of fact for the Industrial Tribunal whether those facts do, in their view, so amount to special circumstances (page 1087B).

	On the facts in Clarks of Hove the Tribunal found that insolvency was not a special circumstance.  The Employment Appeal Tribunal set aside that finding.  The Court of Appeal restored it.

	Turning to the findings in the instant case it dealt with the four tranches of redundancies separately as follows:
	(1)  As to the first tranche on 31 January 1997 the special circumstances defence was 	made out.  There is no appeal by the Union against that finding.
	(2)  As to the second tranche, the defence failed.  These redundancies, following on from 	the first tranche, could not, in the view of the Tribunal, be described as “out of the 	ordinary, exceptional or uncommon.”  A 15-day protected period was awarded under 	Section 189(4)(b) in respect of the second tranche.
	(3)  Again, the Tribunal found that the defence under Section 188(7) was not made out 	in relation to the third tranche on 13 February, moreso because of the earlier 	redundancies.  The protected period in respect of these employees was thirty days.
	(4)  The same finding was made in relation to the fourth and final tranche.
	The Company appeals against both the liability and quantum findings in relation to the second and third tranches and against the quantum finding only in relation to the fourth.

The Appeal
	The principal submission made by Mr Trotter in relation to the Tribunal’s liability findings on the second and third tranches of dismissals is that the Tribunal fell into error in back-dating the proposals to make employees redundant, in paragraphs 24 and 25 of their reasons, to the date on which first tranche of redundancies was carried out, rather than the date on which the instructions to de-man were given by Swan Hunter and acted upon by the Company in relation to the second and third tranches, that is the 6 and 13 February 1997 respectively.  Such error, he submits, vitiates the Industrial Tribunal’s findings that no special circumstances existed in relation to those second and third tranches.

	We are unable to accept that submission.  In the light of the Company’s concessions there was no issue but that proposals to dismiss as redundant 20 or more employees at one establishment, came into existence for the purposes of Section 188(1).  The Tribunal did not put a date on those proposals but we infer that they were held to have been formed on 6 and 13 February respectively.

	Paragraphs 24 and 25 deal first with whether or not special circumstances existed under Section 188(7).  The Tribunal found that they did not because what had been special on the first occasion was no longer special when repeated on the second and third occasions.  	In our view that finding was a permissible one in each of those two cases.

	Secondly, he submits, that in fixing the quantum of the protected period for the second, third and fourth tranches of redundancies, the Tribunal ought not to have taken into account the fact that the Company did not make enquiries of Swan Hunter as to what the position would be, following the first instruction to de-man.  He asserts, with no factual finding to support the assertion, that if asked, Swan Hunter would not have disclosed the true position.  We are not prepared to make such an assumption.  We think that the Tribunal was entitled to take the Company’s lack of enquiry into account for the purposes of judging the seriousness of the employer’s default in order to carry out the balancing act required by Section 189(4)(b).

	His third submission was that the Tribunal failed to take into account, on the face of their reasons, the fact that the Union did not respond in writing to the Company’s faxes of 30 January and 6 February informing the Union of the members to be made redundant in the first and second tranches.  We find that a difficult submission, given that Mr Trotter asserts that no consultation took place, and the attitude of the Union to consultation, first communicated to Mr Babadi by Mr Moody on 31 January on the Tribunal’s findings.

	Finally, Mr Trotter submits, in the alternative, that both the finding of liability in respect of the second and third tranches, and the level of protected awards in respect of the second, third and fourth tranches, were perverse conclusions.  We cannot accept that proposition in either case.  The nature of the industry and the contract entered into between the Company and Swan Hunter, is the background to this case.  It does not of itself give rise to special circumstances as Mr Trotter has made clear.  What was special in respect of the first tranche, that is, the unheralded instruction by Swan Hunter to de-man when there was plenty of work for all the Company’s scaffolders, was capable of and was in the Tribunal’s judgment, such as to amount to special circumstances.  When repeated it did not.  As to the length of the protected periods, a reduction from thirty to fifteen days was made by the Tribunal when history repeated itself on the second occasion; no such reduction was appropriate in its view when it happened for a third time and finally when the Company terminated its contract with Swan Hunter and dismissed the remainder of its workforce on site.

	Our conclusion is that this decision discloses no error of law and accordingly the appeal must be dismissed.