Appeal No.UKEAT/0359/04/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 November 2004

Before
HIS HONOUR JUDGE D SEROTA QC
LORD DAVIES OF COITY CBE
MRS M V MCARTHUR

CANDY DOMESTIC APPLIANCES LTD	APPELLANT

MR D C OWEN	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR OLIVER SEGAL
(of Counsel)
Instructed by:
EEF Legal Services
Broadway House
Tothill Street
London
SW1H 9NQ	
For the Respondent	MR D C OWEN
(the Respondent in Person)	

SUMMARY

Practice and Procedure

The Employment Tribunal’s Decision (by a majority) failed to explain the basis of its reasoning and came to the conclusion that the Applicant was unfairly selected for redundancy without any evidence to support the finding.

HIS HONOUR JUDGE D SEROTA QC

1.	This is an appeal by Candy Domestic Appliances from a Decision of the Employment Tribunal at Liverpool, that was promulgated on 2 March 2004, the Tribunal being chaired by Mr E Lloyd Parry.  The Chairman had the misfortune to differ from the two lay members, who concluded, by majority, that Mr Owen had been unfairly dismissed.  From this Decision the Respondent appeals and, pursuant to the Direction of His Honour Judge Prophet on 4 May, the case has come to a full hearing.

2.	We need to set out the factual background because the principal facts, although not all of them, were agreed unanimously by the Employment Tribunal.  The Respondent employer was a well known manufacturer of domestic goods such as refrigerators and, in particular, operated a factory of Bromborough in the Wirral, where Mr Owen was employed as one of the Line Production Managers.  He was employed between 19 October 1990 until 21 January 2002.  

3.	Mr Owen had been a valued employee.  It is clear that, with his colleagues, the Employment Tribunal recognized that Mr Owen has given loyal and faithful service to the Respondent; he had, for example, made helpful contributions to the company’s campaign to reduce scrap; he had trained others in health and safety; he had managed production during holiday shutdown; he trained new-starters and temporary employees; and he had stood in for other managers.  At the time of his dismissal he was the line manager of the Vacuum Forming (Geiss) Section at the Bromborough plant.

4.	Towards the end of 2000 and in early 2001 the Respondent employer faced trading difficulties and initially there was a decision to reduce its shop-floor workforce by some 50.  Thereafter a decision was taken to reduce managers and it would seem that a decision was taken that two of the five Line Production Managers should be considered for redundancy.  The Respondent sought volunteers but, in the absence of volunteers, it set out criteria to select for compulsory redundancies.  It produced a matrix and grading system which was seen by the Employment Tribunal and these were to be assessed by the Factory Manager, Mr Park.  We note that the Employment Tribunal (and we assume that these are typographical mistakes) refers to Mr Park variously as Mr Park, Mr Clark and Mr Pack, but we assume that this is simply carelessness and that the reference throughout is intended to be to Mr Park.

5.	A decision was taken by the Respondent that the Materials Accountant, Mr Dutton, should not be placed in the same pool with the Production Line Managers.  Although Mr Owen submitted that he should have been, the Employment Tribunal accepted that there was a clear and radical distinction between his role to manage and record movement of materials and, that of Production Line Managers, whose responsibility was to manager production lines.

6.	It is to be noted, although this does not appear to be referred to specifically in the Decision of the Employment Tribunal, that copies of the draft selection criteria were made available to Mr Owen and the four other Production Line Managers in the pool, and Mr Park, in his Witness Statement at paragraph 10, recorded that there was no feedback so far as the criteria were concerned.  

7.	Consultation took place and there were several meetings towards the end of 2001.  The criteria were applied.  There were two separate sets of objective criteria, such as time keeping, discipline and what have you, but then there were other criteria which were more subjective and these criteria, which included such matters as abilities to motivate, management skills and what have you, were to be assessed by the Factory Manager, Mr Park.

8.	The criteria were applied and although there was perhaps very little to chose between the five persons in the pool on the objective criteria, as a result of the additional criteria, for which Mr Park was responsible for scoring, Mr Owen scored the lowest of the five members of the pool and this is something of which he complained in his Originating Application.  It would be right to say, however, on the findings of the Employment Tribunal, that the other four managers were also highly regarded.  

9.	The decision was taken by Mr Park that Mr Owen should be selected for redundancy.  He appealed to Mr Lunt, Vice President, Group Human Resources, and his appeal was unsuccessful.  It is apparent from the evidence that we believe Mr Owen gave to the Employment Tribunal, indeed it is apparent from the Respondent’s evidence to the Employment Tribunal, that Mr Owen believed that he had been scored too low; that the scoring was subjective; and that the other members of the pool had been over scored.

10.	The Employment Tribunal firstly, and unanimously, correctly directed itself as to the law relating to dismissal for redundancy and unfair selection: see paragraph 5.  It also recognized that the Respondent was a large organization with professional management and substantial administrative resources, and therefore it was expected to apply the highest standards in relation to any redundancy exercise.  The Employment Tribunal also recognized that it was not its function to substitute its views for that of the employer, but to ask itself whether, on the facts it found, the employer’s decisions were within the range of options reasonably open to it.

11.	The Tribunal made certain additional findings on the facts unanimously:

(1)	There was a redundancy situation in which the employers were reasonably entitled to reduce the workforce.  
(2)	The employer was reasonably entitled to select a Production Line Manager for redundancy.  
(3)	It was entitled, reasonably, to treat the five Production Line Managers as a pool and exclude the Materials Accountant.  
	(4)	The procedure for warning, communication and consultation was reasonable.
(5)	The employer was reasonably entitled to apply criteria to determine who should be selected for redundancy.  We note, however, that they did not make a specific unanimous finding that the criteria selected were reasonable.

12.	We would also note the following.  There does not appear to have been any issue that the reason for Mr Owen’s dismissal was for redundancy.  He does not appear to have challenged this and in his Originating Application his complaint was that he had been unfairly dismissed by reason of unfair selection for redundancy.  We also note, and again this is simply something we note because we do not have any material to say whether this is correct or not, that it is submitted on behalf of the Respondent that Mr Owen never complained that the selection criteria were unfair, either when consulted during the selection process, or on appeal, or before the Employment Tribunal.

13.	The majority came to the following conclusions on the factual basis that we have just set out:

“7.	Here is where we differed:-
The Majority Decision 
(a)	The majority were unable to avoid the impression that the applicant was selected because, come what may, the respondents wanted to get rid of him.  The assessments were so made, the criteria so applied, as to exclude him. 
(b)	The applicant had an impressive record of achievement with the respondents.  It was inconceivable that that record did not justify his retention in the workforce. 
(c)	The majority were not comfortable with the criteria. They did not bring about the result the respondents were trying to achieve, that is sustainability by retaining the best individuals. 
The Minority Decision 
 (a)	The criteria were orthodox ones which are often applied when selections for redundancy are made. They were reasonable. . 
(b)	The fact that the applicant had during his career with the respondents earned much merit did not invalidate his assessment: he might receive the lowest mark because it was compared with that of others, also meritorious. 
(c)	There was no reason to find that the respondents distorted the applicant's assessment in order to ensure that he, and not any of the others, was selected.  Indeed, the finding seemed unlikely.  What the accusation meant was that they wanted to get rid of someone who clearly deserted to be among those rated as suiting the future needs of the company.  To have selected such a person, the respondents would have been acting against their own interests.  Only clear evidence could sustain such a finding.  The applicant did not make the allegation.  There was no evidence to sustain it. 
(d)	Thus, the Chairman found that the applicant was selected after a reasonable assessment resulting from the application of reasonable criteria.”

14.	The conclusion, therefore, of the majority was that Mr Owen had been unfairly selected for redundancy and they were unable to accept that the employer had acted reasonably.  

15.	Before looking at the grounds of appeal, it is important, I think, to note that both in Mr Owen’s Originating Application and in his Witness Statement he was making a submission that it was wrong for him to have been selected for redundancy; he was a longstanding, extremely valued employee who had been offered, approximately six months before the redundancy, a post as an engineer with a salary increase, and that he had also acted up, without any complaint, as manager when some of his colleagues had been of sick.  In those circumstances he felt, quite strongly that it should not have been he who was selected for redundancy, having regard to his record, his abilities and the fact that he had satisfactorily acted as manager when his colleagues were indisposed.  
16.	The case for the Respondent employer is really that the findings of the majority were unsupported by evidence or were inconsistent with the evidence that we have set out.  The Respondent also submits that there were insufficient reasons for it to know why the claim had been upheld and finally that, in the event, the majority was substituting its own views for the employer in the selection process.  These points are made also in the Skeleton Argument and in the submissions made today by Mr Segal.

17.	Mr Owen, who has represented himself and who has presented a Skeleton Argument, really repeats the submissions that he made to the Employment Tribunal, having regard to his own abilities and experience and the fact he was offered the post of engineer and also had, in addition to his own job, taken on the job of fellow managers when ill, that it was wrong that he should have been selected.

18.	We feel bound to say, and individually we all came to the same conclusion when reading this Decision, that the reasoning of the majority is deficient.  We are at a loss to know what evidence it was that they had in mind when they found themselves unable to avoid the impression that the Applicant was selected because the Respondents wanted to get rid of him, and the assessment so made, and the criteria applied, so as to exclude him.  We simply have no idea what, if indeed any evidence, this was based upon because certainly none is set out in the Decision and we have not been able to see any.  While it is right, again, that the Applicant had an impressive record of achievement with the Respondents, as Mr Owen has pointed out, the Employment Tribunal majority do not seem to have addressed the earlier findings that they had made that the other Line Managers also had impressive records of achievements.  

19.	The majority said they were not comfortable with the criteria.  They did not bring about the result that the Respondents were trying to achieve, that is, sustainability by retaining the best individuals.  We do not know in what way they felt the criteria were wrong; we do not know whether they find that the criteria were, in fact, inappropriately or improperly applied.  There is simply no reasoning and no finding of fact, and, furthermore, we are bound to say, although we do not say this is the case, that it looks as though the majority may have been impermissibly substituting their own judgement, without a reasoned explanation, for that of the employer in this regard.  

20.	As we have said this reasoning is so poorly set out that we find ourselves, having regard to the guidance in a number of cases, but, most helpfully, set out recently in the Decision of the Court of Appeal in English v Emery Reimbold & Strick Ltd [2003] IRLR 710, forced to the conclusion that this particular judgment cannot stand.  We echo what was said by the Court of Appeal that justice has not been done in this case because it cannot be apparent to the parties why Mr Owen won and why the Respondent lost.  The issues that are vital to the Decision have not been clearly identified and the manner in which factual findings have been made has not been clearly set out.  

21.	We have adopted the approach of reviewing the judgment in the context of the material evidence and the submissions at the hearing to see whether, when they were all considered, it was apparent why the majority reached the Decision that they did.  Regrettably we simply cannot be satisfied that that reason is apparent to us.  We simply do not know whether it was a valid basis for the judgment and in those circumstances, and with regret, it seems that the appeal must be allowed.

22.	Mr Segal has submitted to us that in those circumstances the appropriate case is for us to allow the appeal on the basis that, on the facts as found by the Employment Tribunal, there could only be one answer, that is, that the Respondents’ dismissal of Mr Owen had been fair.  We did put to Mr Segal, during the course of submissions, that on the one hand he was seeking to persuade us as to how inadequate the reasons of the Employment Tribunal were, yet he was then trying to persuade us that nonetheless the findings that had been made were such that there could only be one result.  Mr Segal has persuaded us, successfully, that the reasoning, generally, of this Employment Tribunal must be regarded as highly suspect.  We simply are in a state of ignorance as to what the material evidence was, if indeed there was any – we do not know, that led the majority to the Decision that it did.  But where, as here, an attack is made on selection criteria and the application of those criteria, unless we can be quite sure that the Employment Tribunal could only have come to one Decision, namely in favour of Mr Segal’s client, we are bound, as it seems to us, to remit this matter for rehearing before another Tribunal.

23.	For the reasons we have given we simply are unable to say that we have any faith, on the findings that have been made by the Employment Tribunal, that it was bound to come to the conclusion that this dismissal was fair, and in those circumstances, and despite Mr Segal’s persuasive advocacy, this case must be remitted to the Employment Tribunal to be heard by a differently constituted Tribunal.