Appeal No. UKEAT/0458/09/ZT

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 5 February 2010

Before
HIS HONOUR JUDGE SEROTA QC
MRS R CHAPMAN
MR A HARRIS

BRADFORD & BINGLEY PLC	APPELLANT

MR S McCARTHY	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR DANIEL TATTON BROWN
(of Counsel)
Instructed by: 
Messrs Bradford & Bingley Plc
Group Legal Department
PO Box 88
Crossflatts
Bingley
West Yorkshire  BD16 2UA

For the Respondent	MR STEPHEN McCARTHY
(The Respondent in Person)	

SUMMARY
UNFAIR DISMISSAL:  S.98A(2) ERA
PRACTICE AND PROCEDURE:  Appellate jurisdiction/reasons/Burns-Barke
The Employment Tribunal had not imposed a burden on the Respondent of proving that the dismissal of the Claimant was fair.  There was such substantial evidence of potential unfairness that the Employment Tribunal as a matter of common sense was entitled to expect the Respondent to call the relevant evidence to rebut the strong prime facie case of unfairness.  When the Respondent failed to call such evidence, the Employment Tribunal was entitled to have regard to that failure.  That did not mean the Employment Tribunal placed a burden of proof on the Respondent.

The case was remitted to the Employment Tribunal on a further ground of appeal.  The Employment Tribunal has failed to deal with the question of whether had there been a fair procedure, the Claimant would have been fairly dismissed in any event, by reason of s. 98(2) of the ERA.

Observations on the importance of parties asking the Employment Tribunal to deal with omissions on its decisions as soon s those decisions are delivered – see Bansi v Alpha Services [2007] ICR 308.

HIS HONOUR JUDGE SEROTA QC

1.	This is an appeal by the Respondent from a decision of the Employment Tribunal at Leeds presided over by Employment Judge Keevash who sat with two lay members that was sent to the parties on 19 July, and which held that the Claimant had been unfairly dismissed.  It also held he was entitled to recover £500 for breach of contract.  The appeal only relates to the unfair dismissal claim, which was referred to a full hearing by HHJ Clark on 30 October 2009.  

The Facts
2.	We now set out briefly the factual background, which we have taken largely from the decision of the Employment Tribunal.  The Claimant was employed by the Respondent from, we believe, 4 March 2007 as Head of Customer Management.  It is clear that from around about February 2008 the Respondent wished to reorganise its market planning and that might lead to the loss of the Claimant’s post.  The Respondent was considering in particular removing the Claimant’s role as Head of Customer Management and the post of Head of Planning which, we believe, was occupied by a Ms Burns, to create a new role, the Head of Marketing Planning, to combine both roles.  

3.	Mr Rowe, who had been the director of Marketing and Communications, was to be the person to whom this new post would report.  He had in February approached the then Head of Planning, Ms Burns, about the new post and asked whether she would be interested in it.  He had discussed the proposed reorganisation with her and there is no doubt that he at all times considered her to be the most appropriate person for the new role of Head of Marketing Planning, certainly in comparison to the Claimant.  

4.	The Claimant learned about the reorganisation in March 2008 when the Director of Insight Planning, Mr Robbins, informed him that he, Mr Robbins would be moving to the strategy team and the rest of his team would be incorporated into the marketing team, reporting to Mr Rowe, who would then be responsible for both teams.  This information was passed to him following advice having been taken by Mr Robbins and Mr Rowe from the Respondent’s Human Resources Department.  

5.	Later, however, the Human Resources Manager informed Mr Rowe that the previous advice was incorrect and it was necessary for the Claimant and Ms Burns to go through a redundancy process and both would have to be considered for the new role.  Mr Rowe explained why it was that he considered that Ms Burns was the most suitable candidate and said he would have an informal chat with the Claimant, who he met on 3 April.  He told him of the proposed restructure; he offered him some form of compromise agreement which would have led to Mr McCarthy leaving on terms, as appears to be fairly common in reorganisations in the financial services industry.  As part of the discussion between Mr Rowe and the Claimant the Claimant was offered a sum of £500 towards his legal costs in considering the compromise agreement, and it was this that formed the subject matter of the judgment for breach of contract.  We need say no more about this.

6.	The Claimant said that he would consider his position but he obviously considered it had been made fairly clear to him that he would be going and he told members of the team that he would be leaving shortly, however he mentioned this to colleagues before going back to Mr Rowe.  We believe that Mr McCarthy was absent attending some course and in the meantime Ms Burns was appointed as Acting Team Head in his absence by Mr Rowe.  

7.	On 7 April the Claimant raised a grievance relating to what he described as his “dismissal” and he wanted to appeal against his redundancy and he made it clear that he would be returning to work, although by this stage Ms Burns had taken over his role and he wanted to know what role he was to fill.  He received communication from Ms Bashir, of the Respondent’s Human Resources Department, informing him that he had not been dismissed, nor was his dismissal pending, and at that point in time the restructure had not displaced his role.  However, he was told by Mr Rowe on 8 April that it was not appropriate to return to work until the way forward for him was clear and he was asked to remain at home.  It was at this point in time that the proposed restructure was notified to the relevant Trade Union, UBAC.  

8.	The Claimant, in response, maintained that at the meeting with Mr Rowe on 3 April, Mr Rowe had effectively told him he was not going to be part of the restructured team.  He was invited for a meeting with Mr Rowe on 17 April to discuss the restructuring.  Prior to that, two days before, he had raised his grievance and Mr Anderson, the Group Human Resources Director, had asked Mr Townsend, who was the Change Delivery Practice Manager to hear it.  

9.	On 17 April a meeting took place between Mr Rowe, Ms Bashir, and the Claimant at which the proposed restructure was discussed and the Claimant made it clear that he wished to be considered for the new role of the Head of Marketing Planning.  At that point in time the Respondent decided to put in place a selection process.  The details were supplied to the Claimant and the interviews were to be conducted by Mr Rowe and Mr Watson, who was the Sales Support and Governance Director.  Mr McCarthy raised two issues about this: firstly, he considered Mr Watson should not be involved in the interviews because he had had a close relationship (we assume a professional relationship) with Ms Burns, and he also wished the interview to be postponed until after the grievance procedures had been completed.  He said Mr Rowe had long wanted to make him redundant and shared his views with Ms Burns and the procedure was pre-determined and Mr Rowe would only be going through the motions.  

10.	The Respondent, in its response, took the view that it was not appropriate to postpone the redundancy process and that Mr Watson had no previous or existing working relationship with Ms Burns and would be wholly impartial.  

11.	On 15 and 22 May Ms Burns and the Claimant were interviewed by Mr Rowe and Mr Watson.  Identical questions were asked.  Mr Rowe and Mr Watson coincidentally both gave identical marks to Mr McCarthy and identical marks to Ms Burns.  The result was that Ms Burns appeared to be the stronger candidate.  The details of the process, including the result were then passed to Mr Crawford, the Group Services Human Resources Manager, who approved the process and on 4 June the Claimant was informed by letter that his grievance had been rejected, although it was accepted the Respondent had not diligently followed its own procedures, but proper procedures had been put in place, including additional measures to ensure he had been treated fairly in the redundancy process and this included specifically an impartial assessor and a moderation process.

12.	On 9 June the Claimant was informed by Mr Rowe as a result of the interviews that he was at risk of redundancy and Ms Burns was appointed as Head of Marketing Planning.  The Claimant appealed against both the rejection of his grievance and the outcome of the redundancy selection process.  The appeal, in relation to his grievance, was conducted by telephone because of logistical differences by Mr Partington, the Group IT Director, and rejected.  The Employment Tribunal dealt with this at paragraph 4.39.  Mr Partington said:
“... the interview selection was a fair and equitable process and the outcome reflected the evidence gathered during the interviews.”

13.	On 23 July the Claimant was informed that he was redundant as from 23 October.  There was a further grievance appeal conducted by Miss Abid of Human Resources, which was rejected, and we believe that on 16 October an appeal against his dismissal was rejected.  Meanwhile the Claimant had issued his ET1 on 3 October.

14.	The Employment Tribunal, in its judgment to which we now turn, identified the issues with which it had to deal.  

“2.1  	Was the dismissal unfair because the Respondent failed to comply with the statutory disciplinary procedures.  
2.2  	What was the reason for the dismissal?  
2.3  	Did the Respondent act reasonably when dismissing the claim having regard to Section 98(4) of the Employment Rights Act 1996 (“the 1996 Act)?  
2.4  	Did the Respondent act in breach of the Claimant’s contract of employment?”

15.	Surprisingly, and regrettably, there was no reference there to consideration of the effect of Section 98A(2) of the Employment Rights Act.  When the Employment Tribunal set out the relevant law, and it did so in a manner which was uncontroversial at paragraph 5, it again referred to Section 98A(1) of the Employment Rights Act, but not to Section 98A(2).  When it came to setting out the relevant submissions of the parties at paragraph 6 it made no reference at all to submissions made in writing by the Respondent which we have in our bundle and it is quite clear, if one goes to page 88 of our bundle.  The issue under Section 98A(2) was raised at paragraph 38 and Section 98A(2), it will be recalled provides that:
“A failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.”

16.	The Employment Tribunal rejected the Claimant’s case that his dismissal had in effect taken place on 3 April and accepted he had been dismissed on 23 July by letter.  The Employment Tribunal also concluded that the Respondent had complied with the statutory dispute procedures by that date and the Employment Tribunal also was satisfied that the dismissal was on the grounds of redundancy.  

17.	At paragraph 11 the Employment Tribunal noted that Mr Rowe had spoken to Ms Burns and asked her in February if she would be interested in the role of Head of Marketing Planning but he had not discussed the matter with the Claimant.  They noted this left Mr Rowe open to the criticism of bias and they also noted that he had made up his mind that he wanted Ms Burns to undertake the new role and that he wished the Claimant to leave under a compromise agreement as he had made clear at his meeting with the Claimant.  This, clearly, the Employment Tribunal noted, also left Mr Rowe open to the criticism of bias.

18.	At paragraph 12 the Employment Tribunal went on to consider whether the Respondent acted reasonably when permitting Mr Rowe to be involved in the process from March 2008.  The Claimant submitted the process was a sham.  Ms Evans, for the Respondent, submitted that the process was genuine and robust.  The rationale had been amended and was approved by UBAC.  Other protections were put in place.  The Tribunal understood it was usual practice for a line manager to interview for a role in his team and Mr Rowe had clearly formed the view that Ms Burns was more suitable for the post.  It was therefore reasonable for the Respondent to arrange for Mr Watson to be involved in the interview process.  

19.	Ms Evans submitted that Mr Rowe gave evidence which demonstrated his objectivity during the interviews.  The Tribunal finally decided the evidence was insufficient to support this contention that he remained objective throughout the process.  The Respondent chose not to call Mr Watson whose evidence could have dealt with that matter.  Mr Rowe led the questioning.  It was unclear as to what role Mr Watson played in agreeing the scores and to what extent, if at all, he exercised independent judgment when assessing the Claimant’s ability to do the job.  

20.	At paragraph 14 the Employment Tribunal dealt with the submission by Ms Evans that the process had been moderated by Mr Crawford, whom it will be recalled had not attended at the interview but had been sent the relevant documents.  The Respondent chose not to call Mr Crawford.  The Tribunal was concerned he only met with Mr Rowe.  It noted that he conceded during the interview with Mr Partington that:

“If I was doing this again I would probably have spoken to Kenny [Watson] to ensure that he’d agreed with the overall scores.”

21.	The Respondent then submitted that Mr Partington had considered the roles of Mr Watson and Mr Crawford during the process and the Employment Tribunal said the Respondent chose not to call Mr Partington and without his oral testimony the Tribunal was not satisfied there was sufficient evidence that the Respondent’s safeguards had worked in practice.  Accordingly, the Employment Tribunal concluded, and we now quote from paragraph 16:

“The Tribunal decided the Respondent acted unreasonably having regard to the factors set out in Section 98(4) of the 1996 Act.  It was not satisfied the Respondent put in place sufficient safeguards to ensure that the process of selection for the new post was conducted objectively.  In the absence of all further oral testimony the Tribunal was unable to find and decide that the decision to select Ms Burns was only made in accordance with objective criteria.  There remained significant doubt as to whether those criteria had been fairly applied.  That doubt was sufficient to lead the Tribunal to conclude that the dismissal was unfair.”

22.	The Tribunal then went on to deal with other matters, including the legal fees.  

23.	In its notice of appeal the Respondent has raised essentially four matters.  The first is that the Employment Tribunal failed to consider the effect of Section 98A(2) of the Employment Rights Act.  Secondly, that the Employment Tribunal had fallen into error in imposing a burden of proof on the Respondent not only to prove the reason for the dismissal but that the dismissal was fair under Section 98(4).  Linked with this are complaints that the Employment Tribunal effectively put a burden on the Respondent to call witnesses to give evidence as to the implementation of the redundancy policy when it was not for the Employment Tribunal “officiously to scrutinise the selection process” and fourthly, in imposing a requirement, it is said, that the Respondent prove that the interview process was objective as opposed to one that a reasonable employer would have adopted.  In the context of selecting individuals for a new job the requirements of reasonableness, it was submitted, only extended to showing that the Respondent had acted in good faith.

24.	So far as the first point is concerned, and the failure of the Employment Tribunal to consider Section 98A(2), it is quite clear that the matter was raised and it needed to be considered by the Employment Tribunal.  It is most unfortunate that an error such as this was not immediately brought to the attention of the Employment Tribunal.  I would like to draw attention to what I said in a case which has been referred to and applied in subsequent cases in the case of Bansi v Alpha Flight Services [2007] ICR 308 in which I said this, having referred to English v Emery Reimbold & Strick Ltd[2003] IRLR 710 and in Re T (A Child) [2003] IRLR 303:

“In our opinion it is certainly good practice where parties are legally represented in Employment Tribunals, for advocates to ask the Tribunal to amplify its reasoning where it is considered that there has been a material omission in its findings of fact or in its consideration of the issues of fact and law before it.  Where reasons are given extempore the application should be made at the time. If reasons are given in writing the request should be made as soon as possible after the reasons are received. We would encourage advocates to seek clarification from the ET promptly in any case where there might otherwise be an appeal based on alleged insufficiency of reasons. It is much easier for Tribunals to deal with requests for clarification when they are fresh in their minds and the amplification of insufficient reasons and finding will save the parties time and expense and may in some cases obviate the need for an appeal and subsequent remission of the case.  The approach we have set out above is wholly consistent with the overriding objective and the principles that should govern appeals before the EAT.”

25.	We would add that the then President, Burton J, expressly approved of the approach we have set out.  It is most unfortunate, as we have said, that the omission of the Employment Tribunal to deal with this matter was not immediately referred back to the Employment Tribunal.  We would also note that were this to be an appeal to the Court of Appeal from a decision of a civil court in which it was asserted that the court below had not dealt with a specific matter, it is likely that permission to appeal would be refused unless an application had first been made to the lower court to deal with the matter which it had omitted to deal with in its original judgment.  

26.	However, that may be, this matter was not dealt with.  We are quite unable to say with certainty what the result would have been had this matter been considered by the Employment Tribunal and we have come to the conclusion that the appropriate way to deal with this matter is to remit the case to the same constitution of the Employment Tribunal to deal with the question of whether the dismissal could be regarded as fair having regard to the provisions of Section 98A(2) of the Employment Rights Act.

27.	We now turn to the second ground of appeal.  Mr Tatton Brown submits that the Employment Tribunal’s decision is flawed, because it imposed a burden of proof on the Respondent to prove that the dismissal was fair and in this regard he relies upon the authority of Post Office Counters v Heavey in which it was made clear by the then President of the Employment Appeal Tribunal, Wood J:

“It is not for the employer ‘to show’, nor for the Tribunal ‘to be satisfied’ - each of which expressions indicate the existence of a burden of proof.”

that a decision to dismiss could be regarded as fair.   

28.	He draws our attention to paragraphs of the decision of the Employment Tribunal to which we have referred.  For example, in paragraph 13 the Employment Tribunal said it was for Mr Rowe to prove that he remained objective throughout the process.  Also in that paragraph that it was necessary for the Respondent to call Mr Watson to prove he had exercised independent judgment.  Thirdly, and Mr Tatton Brown says this was implicit in paragraph 14, that the Respondent should have called Mr Crawford to show that his moderation exercise was valid.  Finally at paragraph 15 the Employment Tribunal said if it were to be satisfied that the Respondent’s safeguards had worked in practice, Mr Partington should have been called.

29.	The Employment Tribunal had also expressed itself as not being satisfied that the Respondent had put in place sufficient safeguards to ensure the process of selection was conducted objectively (see paragraph 16).  In the absence of further oral testimony it was not possible to decide whether the decision to select Ms Burns was only made in accordance with objective criteria and finally that there was “significant doubt” as to whether the criteria had been fairly applied sufficient to conclude the dismissal was unfair.  

30.	In relation to this Mr Tatton Brown points to the absence of any specific findings, firstly, that the process was a sham, secondly that Mr Watson had not exercised independent judgment, thirdly, that Mr Crawford’s moderation was inadequate, fourthly, the Respondent had not put in place sufficient safeguards, and fifthly, that the safeguards had not worked.  

31.	It is fair to say that one might look at this judgment of the Employment Tribunal as finding that it was deciding the matter on the basis of a flawed view as to the burden of proof.  However, we remind ourselves of what was recently said in the Court of Appeal by Mummery LJ in relation to the burden of proof.  In the Court of Appeal, which is Kuzel v Roche Products Ltd [2008] EWCA Civ 380, Mummery LJ has to say at paragraph 46:
“The summary of the submissions shows how worked up lawyers can get about something like the burden of proof. In some situations, such as being charged with a criminal offence, there is plenty to get worked up about. It is very important indeed. In many areas of civil law, however, the burden of proof is not a big thing. Discrimination law is an exception, because discrimination is so difficult to prove. In the case of unfair dismissal, however, there has never been any real problem for the tribunals in practice. The danger is that in cases like this something so complicated will emerge that the sound exercise of common sense by tribunals will be inhibited.”

32.	Now, if one reads the judgment fairly as a whole it is quite clear, and indeed it is startlingly obvious that the involvement of Mr Rowe in the decision-making process for the appointment of Ms Burns and the subsequent redundancy of the Claimant was something which was likely to make the whole process unfair unless it could be demonstrated that the unfairness of his participation was somehow counterbalanced by other actions taken by the Respondent.  It frequently happens that evidence is led by one party to a dispute that points strongly to a particular conclusion.  This does not mean that the burden of proof as a matter of law switches to the other party to rebut that evidence.  It is a matter of common sense and it seems to us, that whatever language the Employment Tribunal used that what it was saying was, “Here is a case in which this redundancy process is potentially seriously flawed by the participation in it of Mr Rowe.  As a matter of common sense the Respondent needs to demonstrate to us that the unfairness to the Claimant of the participation of Mr Rowe has been overcome”. 

33.	In those circumstances it seems to us that what the Employment Tribunal was simply doing was saying that by reason of the evidence as to Mr Rowe’s conduct and participation, the Respondent needed to rebut the evidence pointing to unfairness and that it has failed to do so.  It may well be that the Employment Tribunal considered that it was, at least theoretically, possible for there to be a fair selection process, notwithstanding the participation of Mr Rowe, but it needed the Respondent to demonstrate that this was the case or rebut the clear evidence of potential unfairness.  We are not able to accept that the Employment Tribunal considered the process to have been fair or that it placed a burden on the Respondent to prove that it was.  All the Employment Tribunal was doing was to say, “Look, here the participation of Mr Rowe clearly renders the selection process potentially unfair.  It looks to be unfair, so let us see what the Respondent has been able to show to us to rebut the prime facie case of unfairness”.  In those circumstances it was perfectly entitled to point to the Respondent’s failure to call relevant witnesses.  It seems to us therefore that this ground of appeal cannot succeed.  

34.	The next ground of appeal is really very much linked with this and that is the implicit requirement, as put by Mr Tatton Brown, that the Respondent should have called a number of witnesses it did not call.  He draws our attention to the judgment of Waite LJ in British Aerospace v Green that an employer only needs to show he set up a fair system and marking should not be officiously scrutinised.  Mr Tatton Brown submitted that the Employment Tribunal did not criticise the arrangements with the selection process which had apparently been approved by the trade union and there was ample evidence to show that it was fairly administered.  But this again does not meet the point.  This is not simply a question of looking at the questions that were asked and looking at the scores.  Here there was such a clear case of potential bias that it needed to be answered and the failure to call other persons involved to say and to give evidence as to how the potential bias was overcome was a matter that the Employment Tribunal was well entitled to consider.  

35.	The same relates to the final ground of appeal, the alleged erroneous approach to the fairness of the selection exercise.  While it may well be, as submitted by Mr Tatton Brown that in the context of selecting potentially redundant individuals for a new job, only minimum standards of reasonableness were required and it was only necessary to show good faith, here one has a position where the selection process appeared to be inherently flawed and the Respondent had not been able to show that those flaws had been overcome.  

36.	In those circumstances, it seems to us, that this ground of appeal also cannot succeed.  In the circumstances therefore we will dismiss the second, third and fourth grounds of appeal and we will allow the appeal on the first ground and remit the matter to the Employment Tribunal, the same Employment Tribunal that determined this matter, to determine whether or not had there been a fair selection process Section 98A(2) would have come into play.  

37.	We are very grateful to Mr McCarthy for his written submissions and to Mr Tatton Brown for his.

38.	This matter will be remitted to the Employment Tribunal.  The parties are to be permitted to make such further submissions as directed by the Employment Tribunal but we will give no direction in relation to the lodging of further evidence.