Appeal No. UKEAT/0167/05/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 28 June 2005

Before
HIS HONOUR JUDGE REID QC
MR B BEYNON
MR P A L PARKER CBE

FM FABRICATIONS LTD	APPELLANT

MR M DOCKERTY	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR A J LENG
(Solicitor)
Messrs John Leng & Co
11 High Street
Old Town
Bridlington
East Yorkshire YO16 4PR
	
For the Respondent	Mr John Falkenstein 
(of Counsel)
Messrs Browell Smith & Co
Solicitors
Pearl Assurance House 
7 New Bridge Street
Newcastle upon Tyne NE1 8AQ	

SUMMARY

Polkey Deduction

Respondent unfairly dismissed in circumstances where there was a redundancy situation.  Employment Tribunal held “it was impossible to conclude that had the procedure been correct applied, [Respondent] would have been dismissed in any event”.  No apparent consideration of chance of dismissal.  Remitted to consider the Polkey point.

HIS HONOUR JUDGE REID QC

1.	This is an appeal from a Decision of an Employment Tribunal held at Newcastle-upon-Tyne on 26 November of last year.  The Decision was then sent to the parties on 12 January this year.  By that Decision, the Tribunal held that the Applicant, Mr Dockerty, had been unfairly dismissed and ordered that the Respondent, the Appellant here, F M Fabrications Ltd, pay him £17,997.40.  The basis on which it was held that he was unfairly dismissed was that the redundancy process through which he was selected for redundancy and the basis on  which he was dismissed, was unfair.

2.	The appeal relates to one point only and that is that the Tribunal is said to have erred in law in not considering, and not making, a Polkey reduction (as it usually called after the decision of the House of Lords in Polkey v A E Dayton Services Ltd [1987] IRLR 503).  What is said on behalf of the Appellant, very shortly, is that the Tribunal simply did not go through the exercise that they should have gone through.  All the Tribunal had to say about the possibility of making any Polkey reduction was this, at the last sentence of paragraph 9 of the Decision:
“The Tribunal decided that it was impossible to conclude that had the procedure been correctly applied, the Claimant would have been dismissed in any event”.  

3.	An attempt was made before us to introduce a note of the oral decision given to the parties on the day of the hearing, but we rejected this on the basis, first of all, that it was not agreed and second that, in any event, what matters is the final decision produced by the Tribunal in the form of its written reasons.  It is a commonplace that the judiciary is entitled to refine its reasons between the conclusion of the hearing and formalising those reasons and if it does so, it is the finalised reasons which are to be looked at.  

4.	The contentions therefore on the one side are that the Tribunal clearly did not have regard to Polkey and the possibility that the Claimant might have  been fairly dismissed and on the other side the contention that if one looked at the decision in the context of the evidence and submissions, it was apparent that the Tribunal had decided that it was not a case in which any Polkey deduction should be made either at 100% or at all.  

5.	The duty of a Tribunal, when a redundancy dismissal is unfair because of the employer’s failure to follow a fair procedure, following Polkey is for the Tribunal to ask a two stage question when calculating the compensation to be awarded.  If the proper procedures had been followed, would it have resulted in an offer of employment?  If so, what would that employment be and what wages would have been paid in respect of it? That is a fundamental question which the Tribunal should expressly address that covers two possibilities:  (1) that he might retain his existing job; or (2) that had proper procedures been gone through, he might have found some other employment with the employer.  That was spelled out, for example, in Red Bank Manufacturing Company Limited v Meadows [1992] IRLR 209.  The position in this case is that there is nothing to indicate what the Tribunal did take into account or whether they did anything by way of answering the questions that they should have tried to answer.  It is, of course, entirely possible that they took the view that, on the evidence before them, they were unable to say one way or the other what chance, if any, there was of Mr Dockerty retaining his employment.  That, though, is only one possibility, given that there was certainly evidence about the reduction in the workforce and of what the workforce consisted of.  

6.	In our judgment, the single sentence suggests that the Tribunal simply decided that there was no certainty that Mr Dockerty would have been dismissed if a fair procedure had been adopted and did not then go on to ask the question what were his chances of survival if the cull had been fair.  In those circumstances, it seems to us that the appropriate course to adopt is to remit the case to the same tribunal, assuming that the same tribunal can be reassembled to further consider the question of whether a Polkey reduction and, if so, what percentage, should be made. We take the view that, in the circumstances of this case, that should be by way of a re-hearing rather than simply by way of remitting the matter to the Tribunal after this considerable length of time for it to publish further conclusions based on the evidence that they already heard.  In those circumstances and to that extent, the appeal will be allowed.  There is, of course, no saying what result may come from the further hearing.  It may be that the tribunal will, with the benefit of the further evidence, come to the same conclusion as it has come to already, namely that there should be no deduction but, equally, it is possible that on considering the questions that it has to ask itself, it will come back with a decision which results in a deduction from the figure of compensation which they have already determined.

7.	We thank both representatives for their lucid and brief submissions.