Appeal No. UKEAT/0179/11/JOJ
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX
At
the Tribunal
On
8 February 2012
Before
HIS
HONOUR JUDGE PETER CLARK
SIR ALASTAIR GRAHAM KBE
MR H SINGH
THE
GARDEN CENTRE GROUP APPELLANT
(1)
MRS A OAKLEY
(2) MRS T MADINE RESPONDENTS
Transcript of Proceedings
JUDGMENT
SUMMARY
PRACTICE AND PROCEDURE – Appellate jurisdiction/reasons/Burns-Barke
Employment Tribunal failed to
make significant finding of fact. Appeal allowed: case remitted to fresh ET
for rehearing.
HIS HONOUR JUDGE PETER CLARK
Introduction
1.
This is an appeal by The Garden Centre Group, the Respondent before the
Reading Employment Tribunal, against that Tribunal’s Judgment, promulgated with
Reasons on 24 January 2011, upholding the complaints of unfair
dismissal brought by the Claimants, their former employees Mrs Oakley and
Mrs Madine, and awards of compensation in their favour totalling,
respectively, £3,176.09 and £43,692.
Background
2.
The Claimants, together with a third Claimant, Ms Stead, whose
claim was later withdrawn, were each employed by the Respondent as Regional HR
Managers. Their employment was terminated by the Respondent with effect from
31 October 2009. It was the Respondent’s case that the reason for
the Claimants’ dismissal was redundancy; alternatively, some other substantial
reason, namely a business reorganisation. It was the oral evidence of two
witnesses called by the Respondent, Mr Sheldrake, then Regional Manager,
and Mr Kozlowski, then Finance Director (both had left the Respondent by
the time of the Tribunal hearing on 5 and 6 January 2011)
that at a meeting of Regional Managers and Directors, at which the Claimants
were not present, held on 9 September 2009 it was decided that the
Regional HR Manager role should be considered as part of a programme of staff
reductions, against the backdrop of a poor trading year in 2008. The
Respondent operated a chain of some 120 garden centres. No minutes of that
meeting were produced to the Tribunal.
3.
It was the Claimants’ case that no decision was made at that meeting to
delete the Regional HR Manager positions. Although none of the Claimants were
present, they pointed to an absence of written evidence of such a decision.
Rather, they contended that the decision to dismiss them was taken by
Nicholas Marshall, the Respondent’s Chief Executive, after he had seen an
email from Mrs Madine dated 14 September. There was evidence from
Ms Sovel Cunningham, then an HR advisor, called by the Claimants
before the Tribunal, that on 16 September Mr Marshall told her that
the three Regional HR Managers were to be made redundant; their work would be
distributed to an HR Training Manager supporting the garden centre managers and
Regional Managers in each region. The Tribunal accepted her evidence;
Mr Marshall did not give evidence below.
4.
It is the Respondent’s case on appeal that the Tribunal was required to
make a finding of fact as to whether the decision to identify the three
Regional HR Manager posts for redundancy was made at a meeting held on
9 September or by the Chief Executive on 16 September as a result of
reading Mrs Madine’s email. Mr Chadwick argues that that factual
question is not determinative of the issue as to whether a genuine redundancy
situation arose. We shall return to that argument later. At this stage, it is
sufficient to refer to the Tribunal’s Reasons, first at paragraph 12,
where they say this:
“The starting point is the meeting on 9 September 2009
when we were told that the decision to make the three regional posts should be
made redundant [sic]. As indicated the Claimants do not believe that such a
meeting took place. Indeed, we have not been provided with any notes of that
meeting and have simply been told that that decision was made.”
and in their conclusions (paragraphs 21‑23), where
they found that the process undertaken by the Respondent was a sham from
beginning to end; there was no genuine redundancy situation.
5.
The process emerging from the evidence and findings of the Tribunal was
that Mr Sheldrake held meetings with Ms Stead and Mrs Madine on
16 September and with Mrs Oakley on 23 September. Those meetings
were minuted, and the three Claimants were told that their posts were at risk
of redundancy. Further consultation meetings took place with all three
Claimants on 1 October 2009, at which Ms Cunningham was present. A
further meeting took place on 22 October. The Claimants were informed of
alternative vacancies available, but none were acceptable to them. They were
dismissed with effect from 31 October and appealed to Mr Pierpoint,
the Development Director; he dismissed their appeals, and gave evidence to the
Tribunal.
The Tribunal Decision
6.
The first question for the Tribunal was whether the Respondent had made
out a potentially fair reason for the Claimants’ dismissals. They contended
that the principal reason was redundancy or, alternatively, some other
substantial reason, as we have earlier observed. The Claimants argued that
they were dismissed at the whim of Mr Marshall. The Tribunal accepted the
Claimants’ case (paragraphs 21‑23). The Respondent had failed to
make out either potentially fair reason for dismissal. It followed that it was
not strictly necessary in the light of that finding for the Tribunal to go on
to consider reasonableness under section 98(4) of the Employment Rights Act 1996
(ERA). However, they criticised the pool for redundancy, the three original HR
Managers only (paragraph 13), were unimpressed by the consultation process
(paragraph 14), found that no genuine attempt was made to find alternative
positions for the Claimants (paragraph 17), and found that the appeal
process was flawed because Mr Pierpoint failed to investigate the
allegation that the decision was effectively made by Mr Marshall, piqued
by Mrs Madine’s email (paragraph 18).
7.
On those findings it is fair to assume that had the Tribunal been
satisfied that a potentially fair reason for dismissal had been made out, they
would have gone on to find that such dismissal was unfair under
section 98(4). They rejected a submission that compensation fell to be
reduced under the Polkey v A E Dayton Services Ltd
[1987] ICR 142 principle. In assessing compensation the disparity in awards
arose from the fact that Mrs Oakley soon found fresh employment;
Mrs Madine did not. In the latter case the Tribunal awarded one year’s
future loss in addition to her lost earnings and benefits to the date of
hearing.
The appeal
8.
Central to the way in which the Respondent’s appeal is advanced before
us by Mr David Reade QC, who did not appear below, is the
factual issue set up by the rival contentions identified at paragraph 12
of the Reasons which we have earlier recited. If that is the starting point,
which is it? Was there a discussion at a meeting of senior management on
9 September about the Regional HR Managers roles or not? We accept
Mr Reade’s contention that such a finding of fact was significant in the
Tribunal’s chain of reasoning (see Levy v Marrable & Co Ltd
[1984] ICR 583). It follows that we reject Mr Chadwick’s contention that
the point was of peripheral importance.
9.
Did the Tribunal accept or reject the evidence of Messrs Sheldrake and
Kozlowski? We are not told. In our judgement that is a fatal flaw in the
Tribunal’s approach to this case, particularly in circumstances where their
conclusion appears to be that the Respondent failed to make out a potentially
fair reason for dismissal. It followed, as we have said, that strictly it was
unnecessary for the Tribunal to consider, because section 98(4) is not
engaged in these circumstances, the fairness of the process followed by the
Respondent. However, some consideration was given to that question without
firm conclusions being reached. For example, on the pool for selection (paragraph 13)
the Tribunal say, “there is some doubt whether it was fair and reasonable to
limit the pool to the 3 managers”. Having embarked on that analysis, it would
have been helpful to know what this Tribunal’s answer to that reasonableness
question was.
10.
Further, the Polkey finding (paragraph 24) only makes
sense in the light of the Respondent’s failure to establish a potentially fair
reason for dismissal. Had they established such a reason, questions under Polkey
would inevitably arise, even if the dismissals were found to be unfair under
section 98(4).
Conclusion
11.
In these circumstances we have concluded, not without regret, that this
decision cannot stand. The appeal is allowed.
Disposal
12.
A further issue arises as to whether the matter should be remitted to
the same Tribunal, chaired by Employment Judge Griffiths, or a fresh
Tribunal. It is not suggested, correctly in our view, that we should determine
the case here and now. Having considered the rival submissions, we prefer
those of Mr Reade. The case must return to a fresh Tribunal for complete
rehearing. That means that either party may call additional evidence at the
rehearing. The original hearing is effectively to be expunged, subject only to
any question of inconsistent statements being made by the same witness at the
original and remitted hearings.
