Appeal No. UKEAT/0102/03/RN

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 18 & 25 May 2004
Judgment delivered on 28 June 2004

Before
THE HONOURABLE MRS JUSTICE COX
MR P DAWSON OBE
MR I EZEKIEL

CORUS & REGAL HOTELS PLC	APPELLANTS

MR I M WILKINSON	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR MICHAEL DUGGAN
(of Counsel)
Instructed by:
Messrs Astons Solicitors
The Stables
Manor Road
Staverton
Nr Daventry
Northamptonshire NN11 6JD	
For the Respondent	MR ADAM SOLOMON
(of Counsel)
Instructed by:
Messrs Finn Gledhill Solicitors
1-4 Harrison Road
Halifax
West Yorkshire HX1 2AG	

SUMMARY

Unfair Dismissal

Whether a business reorganisation involved a redundancy.  Appeal by employers, who said the Employment Tribunal erred in holding that it did not.  Dismissed.  Matter of fact for the Employment Tribunal applying section 139 of the Employment Rights Act 1996.

THE HONOURABLE MRS JUSTICE COX

1.	This is an appeal by the Respondent employers (the Appellants) from a decision of the Leeds Employment Tribunal, promulgated on 15 November 2002, upholding the Applicant’s complaint of unfair dismissal on the basis that the Appellants had failed to show that the reason for dismissal was redundancy.

2.	The appeal was originally listed for a full hearing before us on 1 July 2003, but after the hearing began on that date unfortunately it became necessary to adjourn the appeal pending clarification by the Employment Tribunal of their findings of fact, upon which the parties based their submissions on the alleged error of law.

3.	We refer to our short judgment given on 1 July for the relevant background and to the Order made on that day (at pages 57A to F in our bundle.)  Since that date the Chairman has kindly provided us with his note clarifying the Tribunal’s findings, now at pages 57G to I of the bundle.

4.	The lengthy delay before this hearing could resume is most regrettable, but we were able on 18 May last to consider all the issues fully and to conclude this appeal.  We then reserved our decision and with the consent of the parties, and in order to avoid further delay, this judgment is being given orally today.  It is the judgment of all three members of this Appeal Tribunal and, although the two lay members are unable to attend today, they are in full agreement with the decision and with the reasons given for the conclusion which we have all reached.

5.	The issue in this appeal can be shortly stated.  Mr Duggan, on the Appellant’s behalf, submits that on the facts found by the Tribunal, when properly understood, and by correctly applying to them the statutory test for redundancy, as interpreted in the authorities, the Tribunal could only have concluded that this Applicant was fairly dismissed for redundancy and that they erred in law in deciding that he was not.

6.	Mr Solomon, on the Applicant’s behalf, resists the appeal on the basis that the Tribunal correctly directed themselves as to the law, made clear findings of fact and concluded that the Appellants had not discharged the burden of proving that the reason for dismissal was redundancy.  He submits that we should not interfere with those findings in the absence of an allegation of perversity which is not made in this case.  No alternative reason for the Applicant’s dismissal having been advanced below, the decision that the dismissal was unfair should be upheld.

The Facts

7.	The Tribunal set out their findings of fact in the Decision at paragraphs 3 to 5 of their Extended Reasons as follows:

“3.	The applicant had been employed by the respondent from 11 April 1997.  At the time his employment ended he was working at the Imperial Crowne Hotel in Halifax as a general manager.  The respondent is a substantial company with about 85 hotels throughout the United Kingdom and some 5000 full and part time staff.  It was the respondent's evidence that from some time in the year 2001 the respondent decided upon a restructure of the operation of its business and that restructuring was to involve changes in the way that supervision of the various hotels was to be effected.  Although the respondent has a system of consultation committees, it does not appear that the organizational changes which would be brought about as a result of the decision taken in 2001 was communicated to such committees.  In the alternative, if it was communicated, it was done in such a way that there was no understanding by those affected of the likely impact.

4.	Towards the end of 2001, the respondent decided that a group of hotels located in Harrogate, Huddersfield and Halifax would be subject to the re-organisation already alluded to.  The first intimation the applicant was given of this intention was at a meeting on 12 January 2002 when he was told that there would be changes and the impact of the changes could be that his job would be at risk.  There then followed a process whereby the applicant was invited to apply for other posts but ultimately he left the respondent's employment on 18 February 2002.
5	It is not necessary for the Tribunal to set out at length the events which took place.  These are well documented in the witness statements and bundle of documents.  In the main, there was little dispute between the parties as to the factual matrix.  The real gulf between the parties lay in the interpretation to be placed on the factual matrix.  Insofar as there were differences in the evidence, we preferred that of the applicant to that of the respondent.  There were a number of inconsistencies in respondent's evidence and in some respects, the contemporaneous documentation appeared at odds with the evidence given.”

8.	They referred to the Appellants’ contention that the Applicant had been dismissed by reason of redundancy and to the statutory definition of redundancy in section 139 of the Employment Rights Act 1996.  They then concluded as follows at paragraph 7:

“7	What happened was that the respondents decided to carry out their business in a different way.  The tasks that were to be carried out to enable their business to be continued in the hote1s in general and in the Halifax, Huddersfield and Harrogate hotels in particular would remain the same.  It may be that the identity of the persons carrying out the work and the job title that they were to be given would change.  It may be that some employees would do different tasks to those which they had done prior to the reorganisation but what we were unable to ascertain from the evidence before us was that the requirements of the business for employees to carry out the work had ceased or diminished.  As at 18 February 2002 and as at subsequent dates, there were no fewer employees doing the work.  Indeed it may well be on a strict headcount that there were more employees doing the work than there had been previously.  It may be that the overall cost of the employees who were to do the work was marginally less than it had been prior to 18 February 2002 but when we apply the statutory definition of redundancy to the facts in the case, and these facts were not significantly in dispute, we cannot find that the respondent has established that as at 18 February 2002 or any subsequent date the test postulated by section 139 of the Employment Rights Act 1996 was met.”

9.	The Tribunal then observed, at paragraph 8, that it was open to the Appellants to advance a case that there was some other substantial reason justifying the dismissal, but they had not done so.  In the circumstances the Appellants were held not to have established a reason for the dismissal in accordance with section 98 (1) of the Act and the dismissal was therefore unfair.

10.	The difficulties which led to the hearing of this appeal being adjourned arose from paragraph 5 of the reasons (referred to above).  The Chairman’s note at page 57H has clarified the position and states, at paragraphs 3 to 5 as follows:

“3.	The Tribunal's relevant findings of fact are as follows:
a)	The Respondent is a large company which operates a chain of hotels throughout the United Kingdom and has something in excess of 5,000 emp1oyees.  The Applicant had been the General Manager of the Imperial Crown Hotel in Halifax from 1999.  As General Manager he reported to Mr Hothersall the Northern Regional Manager.  On a day to day basis he was responsible for the running of the Imperial Crown Hotel and to enable him to undertake that role he had immediately reporting to him the heads of the various departments or functions within the hotel.
b)	The position at the Halifax hotel was replicated at the hotels located in Huddersfield and Harrogate.  Each of those hotels had a General Manager supported in the same way as the General Manager at Halifax.
c)	The purported intention of the re-organisation which the Respondent undertook in early 2002 was to create an Area General Manager apparently on a temporary basis, whereby an existing General Manager of a hotel would be responsib1e for additional hotels within their area and paid an allowance accordingly.  However to achieve that goal it will be necessary to appoint Resident Managers not only to the additional hotels for which the Area General Manager would have responsibility but also for the base hotel from which the Area General Manager had risen.
d)	The effect of the restructuring was that an Area General Manager was put in place to cover the hotels within the clustering (in the Applicant's case three hotels).  Resident Managers would be appointed to each of the hotels within the cluster and in addition other aspects of the role within the individual hotels would be relocated.  However the overall effect was that there would not be fewer employees carrying out the work.  Indeed, in the case of the Applicant's cluster, there would be more employees carrying out the same work.
4.	This is the factual matrix to which reference is made in paragraph 5 of the original decision.  The effects of that factual matrix are set out in paragraph 7.  The conclusion reached therein is that the re-organisation which was effected by the Respondent did not satisfy the statutory test set out in the Act.
5.	As set out in the original decision any differences in the evidence given did not relate to the basic factual issues but rather the interpretation to be placed on them for example it was the Respondent's contention that the Area General Manager would have a significantly different function to that undertaken by the Applicant as General Manager of an Individual Hotel.  The Applicant's case was that any such changes were peripheral.  A comparison of the job description provided by the Respondent in respect of both roles supported the Applicant's contention rather than the Respondent.  In relation to other issues there were differences in the evidence and to which reference is made in paragraph 5 of the Tribunal's original decision.  These did not relate to areas of great significance indeed some were in respect of very minor matters which were dearly ascertainable from the contemporaneous documentation but which was expressed in evidence by the Respondent's witnesses in terms which contradicted that documentation.  However the reference to differences in the evidence does not relate to the overall finding as to the effect of the reorganisation which the Respondent undertook.”

11.	During the four years that the Applicant had been performing his duties as General Manager there was no evidence before the Tribunal that there was ever any criticism of him or of his performance in that post.  Nor are we satisfied on the material before us that there was evidence before the Tribunal showing that following the reorganisation the area general manager did any more than take over the managerial functions of the General Manager.

The Legal Framework

12.	The question whether, following a business restructuring or reorganisation, a redundancy situation exists is a matter of fact for the Employment Tribunal to decide applying the test set out in section 139 (1) (b) of the 1996 Act which defines a redundancy situation as follows:

“139	Redundancy
(1)	For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if 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, or
(ii)	for employees to carry out work of a particular kind in the place where the employee was employed by the employer
have ceased or diminished or are expected to cease or diminish.”

13.	This will necessitate an examination of the evidence concerning any business reorganisation and a decision on the facts as found whether a particular reorganisation or reallocation of functions between staff is such as to change the particular kind of work which an individual employee is required to carry out and, if so, what effect that change has on the employer’s requirement for employees to carry out a particular kind of work.

14.	That cases involving this question turn inevitably on their own individual facts is clear from the four authorities to which we have been referred in this appeal.  In view of the submissions made to us, it is necessary to refer to the cases in some detail.

15.	In Murphy v Epsom College [1985] ICR 80 the Court of Appeal referred at length to the detailed facts found by the Tribunal which they said was necessary in order to gain a “proper understanding of the decision” (page 83 at B).  The facts essentially were that the Respondent college employed one plumber and then took on the Applicant as a second plumber.  Part of his function was to modernise and extend the college’s heating system.  Much of his work strayed beyond normal plumbing and into the field of a heating engineer.  Initially he was happy to carry out such wider duties but subsequently after a dispute with the college authorities he declined to do anything but plumbing unless he was properly supervised.  The college therefore reviewed its needs and decided to retain the original plumber, to dismiss the Applicant and engage a heating engineer to replace him.  The heating engineer would be expected to help out with general plumbing.

16.	Upholding the Tribunal’s majority decision that the Applicant was dismissed for redundancy, Sir Denys Buckley, with whom the other members of the Court of Appeal agreed, stated as follows at pages 90B to H of the judgment, after referring to paragraph 31 of the Tribunal’s reasons:

“It is in this connection that the apparently contradictory statements in paragraph 31 of the decision are significant.  For the employee it was argued that there was no such cessor or diminution because it was found as a fact that there was sufficient general plumbing work for two plumbers even if a heating technician was added to the staff; for the employers it is contended that there was a diminution in the need for two plumbers because it was found as a fact that the employers had a requirement for only one full time trained plumber on the general plumbing work of the college as a result of the reorganisation of the staff.

It appears to me that the proper rationalisation of paragraph 31 is, or at any rate may be, as follows.  There was no diminution of the employers' requirement for employees to carry out the maintenance of the heating installations and the general plumbing work of the employers taken together.  If the employers added a heating technician to their works department staff, there would in fact still be enough general plumbing work to keep two plumbers employed.  But, bearing in mind that the heating technician would be able, both on grounds of competence and availability of time, to assist in carrying out the general plumbing work, it was for the employers as a matter of commercial judgment to decide the size and balance of their works department staff in the light of the resources which they were prepared to devote to general plumbing.  The employers decided that they would henceforth employ a heating engineer and one plumber only; there was consequently a diminution in the requirements of the employers for plumbers; they had a new requirement for an employee having different qualifications and skills to deal with the heating installations because the employment of a plumber for that work had proved unsatisfactory , and this may have been, and probably was, increased by reason of the 1981 improvements and extensions, including the introduction of electronic controls.  They still had a requirement for a relief plumber which the heating engineer could supply part time, but they had no requirement for a second full time plumber.  They might have decided to increase their staff by one body, but they were under no obligation to do so; this would be a purely commercial decision for the employers.”

17.	In Safeway Stores Plc v Burrell [1997] IRLR 200 the Applicant was employed as a petrol-filling station manager.  The Company’s senior management decided that the structure was top-heavy and two departmentally orientated.  Accordingly, a reorganisation called “Safeway 2000” was set up.  One of its aims was to “de-layer” the management structure.  Under the new structure it was envisaged that the store manager would have four managers reporting to him or her responsible for stock replenishment, customer services, administration and support services and human resources.  Each of those managers would have controllers reporting to them.  One of those controllers was the petrol-filling station controller.  The post of petrol-station filling manager was to disappear under the reorganisation.

18.	By a majority the Employment Tribunal decided that there was no redundancy because the work which the Applicant used to do was still being done but by someone who had a different job title.  The Chairman, dissenting, held that as a matter of contract the manager’s job on paper was a wider and more responsible job and that job had disappeared.  The Applicant was therefore redundant.

19.	On appeal the EAT disapproved of both these approaches and held that the question was not what work was required, nor what the contract said, but whether the particular business needed fewer employees to do the work in question.  At paragraph 24 the EAT identified a three-stage process in the statutory framework, namely:

“24	Free of authority, we understand the statutory framework of s.81(2)(b) to involve a three-stage process:
(1)	was the employee dismissed?  If so, 
(2)	had the requirements. of the employer's business for employees to carry out work of a particular kind ceased or diminished, or were they expected to cease or diminish? If so, 
(3)	was the dismissal of the employee (the applicant before the industrial tribunal) caused wholly or mainly by the state of affairs identified at stage 2 above?”

20.	After reviewing the case law they stated the correct approach in relation to stages (2) and (3) of that process to be as follows:

“69	The correct approach
Like the appeal tribunal in Cowen v Haden Carrier; we started by looking at the statute and construing the words free of authority.  Similarly, we have looked at the authorities.  Unlike that tribunal, we return to our original approach and conclude first that it was correct, and secondly that no binding authority causes us to abandon that position.  We would summarise it as follows:
70	(1)	There may be a number of underlying causes leading to a true redundancy situation; our stage 2.  There may be a need for economies; a reorganisation in the interests of efficiency; a reduction in production requirements; unilateral changes in the employees’ terms and conditions of employment.  None of these factors are themselves determinative of the stage 2 question.  The only question to be asked is: was there a diminution/cessation in the employer’s requirement for employees to carry out work of a particular kind, or an expectation of such cessation/diminution in the future [redundancy]?  At this stage it is irrelevant to consider the terms of the applicant employee’s contract of employment.  That will only be relevant, if at all, at stage 3 (assuming that there is a dismissal).
71.	(2)	At stage 3 the tribunal is concerned with causation.  Was the dismissal attributable wholly or mainly to the redundancy?  Thus - 
(a)	Even if a redundancy situation arises, as in Nelson, if that does not cause the dismissal, the employee has not been dismissed by reason of redundancy.  In Nelson the employee was directed to transfer to another job as provided for in his contract.  He refused to do so.  That was why he was dismissed.
(b)	If the requirement for employees to perform the work of a transport clerk and transport manager diminishes, so that one employee can do both jobs, the dismissed employee is dismissed by reason of redundancy.  See Pennington.  The same explanation applies, on the facts, to the eventual decision in Robinson.  In Cowen v Haden Carrier the requirement for employees to do the work of a divisional contracts surveyor ceased.  The postholder was dismissed.  That was a dismissal by reason of redundancy.
(c)	Conversely, lithe requirement for employees to do work of a particular kind remains the same, there can be no dismissal by reason of redundancy, notwithstanding any unilateral variation to their contracts of employment.  See Chapman, Lesney and Johnson.
(d)	The contract versus function test debate is predicated on a misreading of both the statute and the cases of Nelson and Cowen v Haden Carrier.  Save for the limited circumstances arising from Nelson where an employee is redeployed under the terms of his contract of employment and refuses to move, and this causes his dismissal, the applicant employee's terms and conditions of employment are irrelevant to the questions raised by the statute. 
(e)	This explains the concept of 'bumped redundancies'.  Take this example: an employee is employed to work as a fork-lift truck driver, delivering materials to six production machines on the shop floor.  Each machine has its own operator.  The employer decides that it needs to run only five machines and that one machine operator must go.  That is a stage 2 redundancy situation.  Selection for dismissal is done on the LIFO principle within the department.  The fork-lift truck driver has the least service.  Accordingly; one machine operator is transferred to driving the truck; the short-service truck driver is dismissed.  Is he dismissed by reason of redundancy?  The answer is yes.  Although under both the contract and function tests he is employed as a "fork-lift driver, and there is no diminution in the requirement for fork-lift drivers, nevertheless there is a diminution in the requirement for employees to carry out the operators' work and that has caused the employee's dismissal.  See, for example, W Gimbert & Sons Ltd v Spurett [1967] 2 ITR 308; Elliott Turbomachinery v Bates [1981] ICR 218. In our judgment, the principle of 'bumped' redundancies is statutorily correct, and further demonstrates the flaw in the 'contract test' adumbrated in Pink. 
(f)	Our approach is also consistent with the decision of the Court of Appeal in Murphy v Epsom College [1984] IRLR 271.  There, the applicant was one of two plumbers employed by a school.  His work consisted mainly of general plumbing work.  The employers decided to employ a heating technician to maintain their improved heating system.  They then decided to dismiss one of the two plumbers and selected the employee for dismissal.  The Court of Appeal upheld the majority view of the industrial tribunal that the reason for dismissal was redundancy.  The employer originally had two plumbers; now it only required one.  The employee was dismissed by reason of redundancy.”

21.	The case was remitted to the Tribunal for them to consider whether the employer had shown that the reason for dismissal was redundancy, applying the approach which the EAT had identified as correct.  We emphasise this because Mr Duggan incorrectly suggested at paragraph 23 of his Skeleton Argument that the EAT were satisfied that the test was met and that there was a redundancy as he contends we should conclude in the present case, on facts which are said by him to bear “a striking resemblance” to the facts in that case.

22.	Despite the EAT’s clear interpretation of the statutory provisions in Safeway, disputes continued to arise in this area.  In Murray v Foyle Meats Ltd [1999] IRLR 562 the Respondents employed a number of meat plant operatives.  Some, like the Applicant, worked on the killing lines in the slaughter hall.  Others worked in the boning hall or in the loading bay and so on.  Trade declined and the Respondents decided to close down one of the killing lines.  The Applicant was dismissed as redundant.  He appealed contending that he was not redundant because his contract did not specify that he was to be employed in the slaughter hall and therefore he could lawfully have been redeployed instead of being dismissed.

23.	The House of Lords, unanimously dismissing the Applicant’s appeal, held that the Applicant was redundant and that the terms of his contract were irrelevant in the circumstances.  Lord Irvine of Lairg LC expressly approved the EAT’s reasoning and conclusions in the Safeway case stating as follows at paragraphs 5 to 6 of his speech:

“5	My Lords, the language of para. (b) is in my view simplicity itself.  It asks two questions of fact.  The first is whether one or other of various states of economic affairs exists.  In this case, the relevant one is whether the requirements of the business for employees to carry out work of a particular kind have diminished.  The second question is whether the dismissal is attributable, wholly or mainly, to that state of affairs.  This is a question of causation.  In the present case, the Tribunal found as a fact that the requirements of the business for employees to work in the slaughter hall had diminished.  Secondly, they found that that state of affairs had led to the appellants being dismissed.  That, in my opinion, is the end of the matter.
6.	This conclusion is in accordance with the analysis of the statutory provisions by Judge Peter Clark in Safeway Stores plc v Burrell [1997] IRLR 200 and I need to say no more than that I entirely agree with his admirably clear reasoning and conclusions...”

Lord Clyde at paragraph 14 of the report observed that:

“4.	…the temptation of substituting other expressions for the words of the statute in the course of interpreting it is to be discouraged, however attractive such a course may seem to be by way of explaining what it is thought the legislature is endeavouring to say.  It may certainly be useful to analyse a statutory provision so as to identify the successive elements of which it is composed and so focus attention on the particular word or words which call for interpretation, or isolate the particular requirements which have to be met for its application.  That was usefully done by the Employment Appeal Tribunal in Safeway Stores plc v Burrell [1997] IRLR 200.  But such an exercise should not involve any significant departure from the actual language which has been used.”
At paragraph 17 he also said this:

“17.	Counsel for the appellants sought to justify the proposition that reference must be made to the terms of the employee's contract by pointing to the word 'employees' in s.11(2)(b).  But that is a perfectly natural and proper word to use in the particular context and cannot bear the significance which he sought to put upon it.  It is properly used to distinguish work being done by employees of the particular employer as distinct from work done by others than persons employed by that employer.  I cannot spell out of the use of the word 'employees' a necessity to treat the terms of the contract of employment as the conclusive measure of the 'work of a particular kind' to which the subsection refers.  On the contrary the appellants' approach seems to require a rewriting of the section so that it would refer to 'employees of a particular kind' or to 'work specified in their contracts of employment.'  But that is not what the paragraph says.  It is not to the actual contractual arrangements which the employees have made that the paragraph directs attention but to the requirements of the business.  The requirements of the business may call for a particular number of employees and for employees of particular skills and abilities.  But the contractual provisions which the employer may make with the employees are not necessarily a requirement of the business: they are rather a means whereby the requirements of the business in respect of the workforce may be met.“

24.	Most recently the issue was considered by the Court of Appeal in the case of Shawkat v Nottingham City Hospital NHS Trust (No. 2) [2001] IRLR 555 where the Applicant was employed as a thoracic surgeon.  The Hospital Trust subsequently built a cardiac unit and instructed the Applicant to combine pure thoracic work with cardiac work.  Dr Shawkat refused, resigned and successfully claimed constructive unfair dismissal.  On the issue whether he was entitled in addition to a redundancy payment, the Employment Tribunal held that purely thoracic work was work of a different kind from combined thoracic and cardiac work.  However, the Applicant was not redundant, as defined, because the hospital still needed as much thoracic work to be done and they still needed as many employees to do that thoracic work.

25.	Analysing the decisions of both the Employment Tribunal and the Employment Appeal Tribunal, Longmore LJ, with whom Walker LJ agreed, said as follows at paragraphs 7 to 8:

“7.	What the employment tribunal in fact did was to reiterate its finding that there was no diminution in the requirements of the Trust for employees to carry out work of a particular kind and explain that that finding related to thoracic surgery.  They then stated in paragraph 11 that the evidence before them could only lead to a finding that some members of staff at Dr Shawkat's level (and above) would be required to carry out thoracic duties.  The fact that Dr Shawkat's thoracic sessions were reduced was not because there was any diminution in the requirements of thoracic surgery but only because the Trust wanted him to do cardiac work in part of his time and not thoracic work in that part of his time.  The tribunal then stated in terms that there was no reduction in the amount of thoracic surgery that needed to be performed, that there was no reduction in the number of employees required to perform this work and that the Trust's requirements for employees to carry out thoracic surgery had not diminished.  They then concluded that Dr Shawkat was not dismissed by reason of redundancy but because the Trust attempted to impose unreasonable duties on Dr Shawkat which he had reasonably declined to carry out. 
8.	The Employment Appeal Tribunal decided that this process of reasoning disclosed no reasonably arguable point of law and that Dr Shawkat's appeal had to be dismissed.  The argument presented to the appeal tribunal was that the employment tribunal should have taken into account the fact that Dr Shawkat's replacement did both cardiac and thoracic surgery and was thus doing work of a different particular kind and that it must then follow that Dr Shawkat was redundant.  The appeal tribunal concluded, however, that the employment tribunal was perfectly entitled to conclude that the relevant work to which they should direct their attention was thoracic surgery and that, since the tribunal was entitled to approach the question in that way, the decision to which they came was a simple matter of fact which could not be challenged.”

26.	He then referred to the three-stage process for the fact-finding Tribunal, as identified in Safeway, and endorsed in Murray, and in paragraphs 10 to 12 he referred to the parties’ submissions and set out the court’s conclusions, as follows:

“10.	Submissions
Mr O'Dempsey submitted that the stage (2) process required the employment tribunal to consider not only the work which the employee was doing at the time of dismissal but also the work which any replacement employee did after the dismissal.  If that work was of a different particular kind from that which the employee was doing at the time of dismissal then the requirements of the employer's business for employees to carry out work of a particular kind must, in law, have diminished.  This is tantamount to saying that any reorganisation of the employer's business, as a result of which he requires one or more of his work force to do a different job from that which he or she was previously doing must be a redundancy situation. 
11.	Mr Kibling, for the Trust, submitted that this had never been the law and that the only question for the employment tribunal was whether the requirements of the Trust's business for employees to carry out thoracic surgery had ceased or diminished. It might or might not be helpful, in the context of that decision, to consider whether the work done by any replacement employee was work of a different kind, but the mere fact that it was did not compel the conclusion that any dismissal was by reason of redundancy. In this case, the tribunal was well aware that Dr Shawkat had been required to do cardiac work as well as thoracic work (and thus that any replacement would be likely to be doing precisely that) but they had decided that, in spite of that, there was no diminution in the Trust's requirements for employees to carry out thoracic surgery.  That was a decision of fact to which the tribunal was entitled to come. 
12.	Conclusion 
In my judgment, Mr Kibling's submission is correct. It is clear on the authorities that the mere fact of reorganisation is not conclusive of redundancy.  Mr O'Dempsey relied strongly on Murphy v Epsom College [1984] IRLR 271 in which the school had originally employed two plumbers but decided, after improving the heating system, to employ a heating engineer of superior skill to the plumbers in order to maintain the improved system and perform functions of a more responsible kind than the functions which the plumbers were expected to perform.  The heating engineer would also do ordinary plumbing work.  The school then dismissed one of the plumbers, who claimed that he had been unfairly dismissed; the school defended the claim on the basis that he had been dismissed by reason of redundancy and that such dismissal was fair.  That defence succeeded since the school's requirements for the part-time plumbing services of the employee to assist the other plumber in general plumbing work had ceased, but Sir Denys Buckley in the course of the leading judgment said (p.276):
'Every case of reorganisation must, I think, depend ultimately on its particular facts. In each case it must be for the individual tribunal to decide whether the reorganisation and reallocation of functions within the staff is such as to change the particular kind of work which a particular employee, or successive employees, is or are required to carry out, and whether such change has had any, and if so what, effect on the employer's requirement for employees to carry out a particular kind of work.'
In the present case the employment tribunal did, in its first decision, decide that the reorganisation of the cardiac and thoracic departments changed the work that its employees in the thoracic department were required to carry out.  It was for that reason that the tribunal decided that Dr Shawkat had been unfairly dismissed in the course of the Trust seeking to implement that change.  But it cannot follow of itself that Dr Shawkat was dismissed by reason of redundancy, because the tribunal had to go on to decide, in Sir Denys Buckley's words, whether that 'change has had any, and if so what, effect on the employer's requirement for employees to carry out a particular kind of work'.  The tribunal has found that, despite the change that did occur, the employer's requirements for employees to carry out thoracic surgery had not ceased or diminished and that is a conclusion that was open to them on the facts and must be the end of the matter.”

27.	Rejecting further submissions of the Appellant’s Counsel based on the case of Murphy, on Lord Clyde’s dictum in Murray at paragraph 17 (referred to above), and on various passages in Harvey: Industrial Relations and Employment Law in the section dealing with redundancy, Longmore LJ emphasised that the essential question was always one of fact for the Employment Tribunal: see in particular at paragraphs 13 and 18.

The Issues

28.	Mr Duggan contends that the Employment Tribunal in this case misapplied the law to the facts because they did not understand that there could be a redundancy where the volume of work remained the same or where the “headcount” remained the same or even increased.  He refers to paragraph 3 (d) of the Chairman’s note and to the sentence:

“However the overall effect was that there would not be fewer employees carrying out the work.  Indeed, in the case of the Applicant’s cluster there would be more employees carrying out the same work.”

This, he submits, illustrates the Tribunal’s erroneous understanding that there cannot be a redundancy where the same number of employees remain or where there is an increase in the numbers of employees.

29.	He further submits that the Tribunal failed adequately to differentiate between the role of General Manager, which the Respondent had been performing, the new day-to-day role of the Resident Manager, from which certain tasks and responsibilities previously carried out by the General Manager had been removed, and the new role of Area General Manager, which had none of the day-to-day functions now taken over by the Resident Manager.

30.	Mr Duggan then sought to persuade us that what he termed “a proper application of the case law” should have resulted in a finding that the Applicant was redundant because the facts amounted to “a classic redundancy situation” to which the provisions of section 139 plainly applied.  He relied on the passage in Lord Clyde’s speech in Murray at paragraph 17 (referred to above) and to extracts from the commentary by the authors of the redundancy section in Harvey.  Adopting this approach he contends that the Tribunal should have found that the Applicant was redundant.  On the facts found, the General Managers were replaced by Resident Managers and an Area General Manager, so that the Appellants no longer needed General Managers.  The overall requirements of the business may have remained the same and the same or even more employees may have been required to perform the tasks, since the Area Manager took over the managerial functions formerly done by General Managers.  However, the Appellants no longer needed a General Manager and the requirement for the Applicant’s skills and abilities as General Manager had therefore disappeared.  Thus, he submits, applying the tests established in Murphy, Safeway and Murray, the only conclusion which this Tribunal could have reached is that the Applicant was dismissed for redundancy.

31.	He further submits that the decision of the Court of Appeal in Shawkat is irreconcilable with that in Murphy, relying on the following analysis.  In Murphy the employers continued to need as much plumbing work and as much heating work as before and continued to need as many employees as before to do it.  The Applicant was held to be redundant because the employers needed fewer plumbers.  In Shawkat the employers continued to need as much thoracic surgery as before and continued to need just as many employees as before to do it; but the Applicant in that case was held not to be redundant despite the fact that the employers needed fewer thoracic surgeons.

32.	The Shawkat decision, in which Murphy was approved, can therefore he submits, only be authority for the proposition that the appellate courts should not interfere with the findings of fact by the Employment Tribunal.  On the other hand, we should interfere in this case because the Employment Tribunal have clearly misapplied the law to the particular facts found.

33.	We have considered Mr Duggan’s submissions carefully, but we are unpersuaded by them.  Our clear conclusion is that this appeal must fail for the following reasons.  Firstly, we accept the submission of Mr Solomon that the common thread running between all the authorities to which we have been referred is that each case involving consideration of the question whether a business reorganisation has resulted in a redundancy situation must be decided on its own particular facts.  The mere fact of reorganisation is not in itself conclusive of redundancy or, conversely, of an absence of redundancy; and we consider it unhelpful to seek to compare very different factual scenarios in an attempt to argue by way of analogy that a Tribunal’s conclusion in one case should be the same as that reached in another.

34.	So long as the Tribunal have applied the statutory test in section 139 correctly, the findings of fact and the conclusions to be drawn from them are pre-eminently the tasks of the Employment Tribunal having heard all the evidence.  In the present case it is clear, in our judgment, that the Tribunal found that, following the reorganisation, the same work was in fact required by the Appellants to be carried out and that the requirements for employees to carry out that work had therefore not ceased or diminished.

35.	We do not accept Mr Duggan’s submission that the Tribunal misunderstood the correct approach by relying exclusively on the numbers of employees remaining in order to determine that no redundancy existed.

36.	We do not read paragraph 7 of the Tribunal’s reasons as including a direction to themselves that there can never be a redundancy if greater numbers of employees are taken on to do the same work.  It was clearly one of the relevant factors in the present case to which they had regard; but it is clear from the Chairman’s note at page 57H that they had regard to all the facts set out at paragraphs 3 (a) to (d) in arriving at their conclusions.

37.	In this respect, the finding of fact in the final sentence of paragraph 3 (d) is important because it is clear from that finding that “in the case of the Applicant’s cluster, there would be more employees carrying out the same work.”  The Tribunal were considering there not only the fact that there were more employees but also, crucially, that they were doing the same work.  This is supported by the findings in paragraph 5 on page 57I, that a comparison of the job descriptions for both General Manager and Area General Manager led to the Tribunal preferring the Applicant’s contention that the changes to the work involved in both jobs were “peripheral”.

38.	There is no perversity challenge to these findings of fact and it seems to us that the Appellant’s arguments must fail on the basis that no error of law has been identified and that the Tribunal were entitled to conclude, as they did, on the facts found, applying the provisions of section 139, and what was clearly the two-stage test referred to in Murray.

39.	No error of law having been shown, we would therefore dismiss the appeal on that basis.  In deference to Mr Duggan’s further submissions however, we shall give our conclusions on the state of the authorities and in particular on his submission that the cases of Murphy and Shawkat are irreconcilable.

40.	We take the view that Mr Duggan’s submissions to us on the approach he contends this Tribunal should have adopted in the present case mirror, almost exactly, the unsuccessful submissions presented to the Court of Appeal on behalf of Dr Shawkat: see paragraph 10 of the judgment (referred to above).  Like Mr O’Dempsey, Mr Duggan also relied strongly on the case of Murphy and on the dictum of Lord Clyde in Murray at paragraph 17: see paragraph 23 of our judgment above.

41.	We note also that reliance was placed by Mr O’Dempsey on the same passages in the commentary in Harvey on which Mr Duggan now seeks to rely before us.  Indeed, permission to appeal was apparently granted in Shawkat in part on the basis of the critique in those passages, which we note remain unchanged in the current edition of Harvey.

42.	Mr Duggan’s difficulty is that in seeking to persuade us to interfere with this Tribunal’s decision on the basis that they were obliged, on the facts found, to hold that there was a redundancy, he is unable satisfactorily to explain why the Court of Appeal refused to interfere with the Tribunal’s decision in Shawkat and arrive at the same conclusion, save by an attempt to suggest that the facts in that case were different, thereby conceding the flaws in his argument.

43.	The fact is that the Court of Appeal clearly preferred the Trust’s submissions and rejected those of Dr Shawkat.  In paragraph 13 Longmore LJ, referring to the case of Robinson v British Island Airways Ltd [1977] IRLR 477, concluded as follows:

“13.	Some dicta in some earlier cases had conversely suggested that, if a dismissal had been caused by reorganisation, the reason could not be redundancy.  But in Robinson v British Island Airways Ltd [1977] IRLR 477, the Employment Appeal Tribunal said that that could not be right, Phillips J saying: 
'In truth a reorganisation mayor may not end in redundancy; it all depends on the nature and effect of the reorganisation.'
In that case the employee worked as a flight operations manager answerable to a general manager, operations and traffic.  The employer effected a reorganisation abolishing both posts and creating a single job of operations manager.  The new job involved different tasks, new responsibilities and enhanced status for the occupant and both previous employees were dismissed.  The employer paid appropriate redundancy pay but the employee complained he had been unfairly dismissed.  The employment tribunal and the Employment Appeal Tribunal said the case was not a case of unfair dismissal but of redundancy, so the employee was arguing against redundancy as in Murphy, whereas in the present case it is, of course, the employer who submits there is no redundancy. Mr Robinson argued that only one post was abolished and it was impossible to squeeze two redundancies out of one post.  The appeal tribunal held that the work of the new post was different in kind from that done by either of the two previous employees and continued: 
'Thus in our judgment it can truly be said that the dismissal of the employee was attributable to the fact that the requirements of the business for employees to carry out work of a particular kind had ceased or diminished and that each was redundant.' 
For my part, it does not seem to me that the appeal tribunal was saying that it must follow, from the fact that the new post is different in kind from the previous post or posts, that the requirements of the employer's business for employees to carry out work of a particular kind must have diminished.  It can follow and the appeal tribunal, therefore, upheld the tribunal's decision.  It need not follow, however, and it is for the tribunal to decide whether it does or not.”

44.	Similarly, we consider that it was for this Employment Tribunal to decide whether the Applicant was redundant on the facts of this case and it cannot legitimately be said that they were obliged so to find.  The Court of Appeal at paragraph 16 of Shawkat summarised the Tribunal’s findings in that case by stating that:

16.	“… What seems to have happened is that the Trust has reorganised its staff to do more cardiac surgery than previously; the requirements for thoracic surgery, as the tribunal found, still exist undiminished.”

45.	If the Tribunal were entitled to conclude on those facts that Dr Shawkat was not redundant we are not persuaded that the Tribunal in the present case were obliged to conclude, on the facts they found, that this Applicant was.  Further, insofar as Mr Duggan relies on the dictum of Lord Clyde in Murray, we agree with the Court of Appeal that Lord Clyde in Murray did not intend in any way to depart from Lord Irvine’s opinion that this was always a matter of fact for the Employment Tribunal to decide.

46.	In our judgment, therefore, the Court of Appeal in Shawkat dealt with precisely the arguments being raised before us now and dismissed them.  The decision in our judgment accurately reflects the law as it is and as it binds this Appeal Tribunal.

47.	Nor do we consider, any more than the Court of Appeal in Shawkat who were referred to Murphy, that Shawkat and Murphy are irreconcilable decisions.  It seems to us that the factual background in Murphy was entirely different and it is therefore incorrect to suggest, as Mr Duggan does, that the facts were essentially the same but were interpreted in irreconcilable ways.

48.	It is clear from paragraph 83B in the judgment of Sir Denys Buckley in Murphy that the Employment Tribunal’s findings of fact in that case were both complex and lengthy and were referred to in detail.  Further, as he pointed out at paragraph 88G, paragraph 31 in the Tribunal’s reasons seemed to contain two mutually contradictory statements about the continuing need for plumbing services.  He resolved this in the passages already referred to at page 90C to H (see paragraph 16 above).

49.	O’Connor LJ also understood the factual background in this way concluding at page 96D:

“As to the question of whether the employee was redundant, for my part I am quite satisfied that the modernisation of the heating arrangements diminished the requirement of the employers for plumbers, because the maintenance of the plant as modernised was not a plumber’s work.  The fact that the heating technician did some plumbing work, or would be required to do some plumbing work, does not alter the situation.  Sir Denys Buckley has dealt with the matter fully; I agree with his judgment on that part of the case and I also agree with the reasoning and judgment of the appeal tribunal.”

50.	On that analysis of the facts, there was a reduction from two plumbers to one plumber and the Employment Tribunal were held to have reached a permissible conclusion that the Applicant was dismissed for redundancy.  This, it seems to us, is to be strongly contrasted with paragraph 16 in Shawkat where the Court of Appeal held:

“16.	In the context of a business such as the Trust's, the tribunal's conclusion that the Trust's requirements for employees to carry out the business of thoracic surgery has not ceased or diminished is scarcely surprising.  What seems to have happened is that the Trust has reorganised its staff to do more cardiac surgery than previously; the requirements for thoracic surgery, as the tribunal found, still exist undiminished.  That does not mean that Dr Shawkat was redundant nor that his dismissal was dismissal by reason of redundancy within s.139(1).  It may be added that even if the requirements of the Trust for employees to carry out thoracic surgery had in truth diminished, it would on the tribunal's findings be extremely difficult to say that Dr Shawkat's dismissal was attributable to that state of affairs.”

51.	Consideration of the issues in this appeal only serves to confirm, in our judgment:

(1)	that the facts in all these cases are fundamental to the Employment Tribunal’s decision and to a proper understanding of it by this Appeal Tribunal;

(2)	that the test to be applied in such cases is that contained in the statutory provisions themselves, the language of section 139 (1) (b) being “simplicity itself”, as the House of Lords held in Murray, approving the analysis of the EAT in Safeway; and

(3)	the variety of glosses on the statutory test previously referred to, including the “contract”, “function” or “kind of employee” test, are confusing, unhelpful and are best avoided by Employment Tribunals in applying the language of the statute to the facts they have found.

52.	For these reasons this appeal must be dismissed.

53.	At the conclusion of oral argument Mr Duggan submitted that if we dismissed the appeal he wished to apply for permission to appeal to the Court of Appeal, on the basis of the conflict which he submits exists between the decisions in Murphy and Shawkat.  We refuse permission, not only on the basis that in our judgment there is no such conflict, but because primarily we consider that no error of law has been identified in this Tribunal’s conclusions for the reasons we have given and that no real prospect of success exists for an appeal from their decision.