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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Cameron v. Kurt Mueller (UK) Ltd [2001] UKEAT 1205_00_1812 (18 December 2001) URL: http://www.bailii.org/uk/cases/UKEAT/2001/1205_00_1812.html Cite as: [2001] UKEAT 1205__1812, [2001] UKEAT 1205_00_1812

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APPEARANCES

 

For the Appellant	MR C SPRATT (of Counsel) Instructed by: Mr Jeremy N Young Messrs Baily Gibson Solicitors 30 High Street High Wycombe Bucks HP11 2AG
For the Respondent	MR T LINDEN (of Counsel) Instructed by: Mr P Schofield Engineering Employers Federation Broadway House Tothill Street London SW1H 9NQ


 


JUDGE D M LEVY QC

1. By an Originating Application dated 30 March 2000, Mr J A Cameron ("the Appellant") complained that he had been unfairly dismissed and that, Kurt Mueller (UK) Ltd ("the Respondent") were in breach of contract. The IT3 by the Respondent was submitted on 25 April 2000.
2. There was a hearing of the Appellant's complaint before an Employment Tribunal sitting in Reading on 20 July 2000. The Decision was promulgated on 4 August 2000; the Decision was that the Appellant succeeded on his claim for unfair dismissal; compensation was assessed and awarded.
3. An appeal from that Decision dated 15 September 2000 came for a preliminary hearing before a panel headed by Miss Recorder Slade QC. She found, with her colleagues, that there was an arguable case and sought the Chairman's notes for the benefit of the appeal, which we have heard today. Mr Spratt appeared at the Court below on behalf of the Appellant, and he has appeared before us today. Mr Linden, on this occasion, appears for the Respondent.
4. It seems to be common ground that the appeal raises four matters. First, whether the Employment Tribunal considered whether it should make a reduction as considered in Polkey -v- A E Dayton Services Ltd [1988] AC 344 and decided to make one. Secondly, a complaint about the extent of the reduction which was made. Third, a complaint about the finding that the Appellant would retire at the age of sixty two, and fourth, a complaint about the finding that the Appellant would receive income from self-employment for twelve months.
5. As to the first issue, which really forms the springboard for the others, Mr Spratt submitted that there was no evidence on which the Tribunal could have made its findings on Polkey. It was put this way by Miss Recorder Slade:

"5 The grounds of appeal challenge the approach of the Employment Tribunal in considering itself obliged to apply a percentage reduction to the compensation and to consider a percentage likelihood that the dismissal would have happened in any event had proper enquiries been made as to whether there was alternative employment which could have been offered to the Appellant, having regard to the likelihood that he would have accepted that employment. The point is made that there is no material finding of fact upon which the Tribunal could base its finding in paragraph 16 and the reduction by two thirds of the compensatory award"

We have had the advantage, which the panel hearing the preliminary appeal did not, of seeing the notes of evidence and not only the notes of evidence, but the witness statements which preceded the hearing before the Tribunal. It is clear to us because we have been taken to the appropriate passages, that there was material from which such findings of fact were made and could be made in the circumstances of the case.

6. In paragraphs prior to paragraph 15 of the Extended Reasons the Tribunal, considered whether the dismissal of the Appellant was fair. It concluded that it was unfair for many reasons of which one was because almost anything to do with redundancy had not been properly considered by the Respondent.
7. Having made those findings, the Tribunal's Extended Reasons continued:

"15. The Tribunal invited submissions on the effect of Polkey -v- A E Dayton. That case has two limbs to it, one is that the dismissal may not be unfair if following procedures would have been totally useless. The Tribunal do not find that this was the case. There was a possibility that the dismissal might not have happened had full proper procedures been followed. However, the Tribunal must also consider under that case the possibility of a percentage likelihood that the dismissal would have happened in any event had proper procedures been followed. If the Tribunal does so find then a percentage reduction to the compensatory award, not the basic award, may be applied if the Tribunal consider it just and equitable to do so."

8. We have been taken to the Polkey decision itself and we have been reminded of the paragraphs in Lord Bridge's speech which many decisions have implemented. The material paragraph commences:

"Employers contesting a claim of unfair dismissal will commonly advance as their reason for dismissal of the reasons specifically recognised as valid. ………These, put shortly, are: (a) that the employee could not do his job properly; (b) that he had been guilty of misconduct; (c) that he was redundant. But an employer having prima facie grounds to dismiss for one of these reasons will in the great majority of cases not act reasonably in treating the reason as a sufficient reason for dismissal unless and until he has taken the steps, conveniently classified in most of the authorities as 'procedural', which are necessary in the circumstances of the case to justify that course of action."

Here, the employer complained it was redundancy, and on that Lord Bridges, in his speech, said this:

"….in the case of redundancy, the employer will normally not act reasonably unless he warns and consults any employees affected, or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation. If an employer has failed to take the appropriate procedural steps in any particular case, the one question the Industrial Tribunal is not permitted to ask in applying the test of reasonableness posed by [the section] is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On the true construction of [the section] this question is simply irrelevant. It is quite a different matter if the Tribunal is able to conclude that the employer himself, at the time of dismissal, acted reasonably in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with. In such a case the test of reasonableness under [the section] may be satisfied."

In our judgment, the Tribunal, quite clearly, and this is not disputed, did apply that test in looking to see whether there was a fair dismissal. In our judgment the conclusion that it was unfair was plainly right.

9. Lord Bridge's speech continues:

"If it is held that taking the appropriate steps which the employer failed to take before dismissing the employee would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation, or, in the case of redundancy, no compensation in excess of his redundancy payment……………………

But in spite of this the application of the so-called British Labour Pump principle ……….tends to distort the operation of the employment protection legislation in two important ways. First, as was pointed out by Browne-Wilkinson J in Sillifant's case, if the Industrial Tribunal, in considering whether the employer who has omitted to take the appropriate procedural steps acted reasonably or unreasonably in treating his reason as a sufficient reason for dismissal, poses for itself the hypothetical question whether the result would have been any different if the appropriate procedural steps had been taken, it can only answer that question on a balance of probabilities. Accordingly, apply the British Labour Pump principle, if the answer is that it probably would have made no difference, the employee's unfair dismissal fails. But if the likely effect of taking the appropriate procedural steps is only considered, as it should be, at the stage of assessing compensation, the position is quite different. In that situation, as Brown-Wilkinson J puts it in Sillifant's case, at p.96:

"There is no need for an "all or nothing" decision. If the Industrial Tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment." "

10. That is a case that was referred to and considered by a Tribunal headed by Judge Hague in Dunlop Ltd -v- Farrell [1993] ICR 885 and Mr Spratt took us to the penultimate paragraph of that sentence where Judge Hague and the panel said this:

"First, the tribunal must ask itself the question: If the proper procedure had been followed and consultation had taken place would it have resulted in the employee still being retained or would it have made no difference? If the answer is reasonably clear one way or the other there is no difficulty, but in many cases, of which this is one, the answer may be uncertain. In that situation in order to give proper effect to section 74(1) of the Act of 1978 and in accordance with the passage from the judgment of Browne-Wilkinson J,……….the tribunal should as the second stage of the process make a percentage assessment of the possibility or probability of the employee being retained which must then be reflected in the award of any compensation."

It is quite clear that the Tribunal invited submissions on the effect of Polkey and, as the citation from Lord Bridge's judgment and the Dunlop judgment show, that case has two limbs of it: one is that dismissal may not be unfair, if following procedures would have been totally useless.

11. The Tribunal did not find this was to be the case. They found there was a possibility that the dismissal might not have happened, had full proper procedures been followed. However, a Tribunal must also consider in that case a possibility of a percentage likelihood that the dismissal would have happened in any event, had proper procedures been followed. If a Tribunal does this, then a percentage reduction to the compensatory award, not the basic award, may be applied if the Tribunal consider it just and equitable to do so. It is quite clear to us, having looked at all the evidence as well as the Decision, that the Tribunal took into account the expertise of the Appellant and that it was wider than, perhaps, the Respondent was willing to accept.
12. The Tribunal also, in our judgment, took a realistic approach. The recovery of the markets in which the Appellant had been working, was unlikely, even with the suggestions being made by the Appellant as to how management could seek contracts. Also, it was known that the contracts on which the Appellant's primary employment was based were disappearing. In those circumstances, the Tribunal was entitled to find that it was more likely than not that the Appellant would have been dismissed by reason of redundancy, if correct procedures had been followed.
13. Having made this finding the Tribunal were entitled on the just and equitable basis to reduce the award it would have otherwise have made by two thirds.
14. Mr Spratt has energetically submitted that there was no evidence on which the Tribunal could have made the findings which it made as to quantum. We emphatically disagree with him. It is quite clear to us that, from looking at the evidence, that the work that the Appellant was doing was in issue; it is further quite clear to us that the Tribunal looked at the sort of matters which it would have to do, in order to answer the question which it had to look to, in the second stage of a Polkey approach. In our judgment therefore, the first ground of appeal fails.
15. As to the question of compensation, as to the extent of the reduction which is made, we have already said that the Tribunal was entitled to make it.
16. In our judgment, Mr Linden is right when he says that what Mr Spratt is attempting to do is to re-argue the point which was before the Tribunal and which was part of the evidence before that Tribunal. We cannot accept Mr Spratt's submission that the Tribunal had no material to reach its Decision. The Respondent's case, as is apparent from the papers we read, was that the Appellant was employed to develop a way to manufacture better plastic combs. The part of the Respondent's business in which he worked accounted for the vast majority of the Respondent's plastic combs business; that business was about to end. The Tribunal looked to see whether there was a realistic alternative employment which would have been acceptable to the Appellant and found that there was not.
17. Mr Spratt has attempted to argue that it did not look into this question, but it is quite clear to us, having seen the Appellant's CV that he had been in a managerial role and had a managerial salary for many years prior to the dismissal. The Tribunal was entitled to consider that such other jobs as would have been open to him on paper were neither ones which he would have wanted to accept, nor indeed, ones which the Respondent would have wanted him to accept.
18. It is quite true that the Employment Tribunal found that the Respondent assumed too much about the Appellant's views and that it should have discussed its assumptions with him. However, it does not follow from this that those assumptions were wrong. Indeed, as the Respondent maintained before the Employment Tribunal, on the evidence they heard their assumptions were right.
19. It is also true that the Employment Tribunal found there were other jobs which were within the skill range of the Appellant, however, it also found that they were occupied by other employees. Those employees might, of course, been bumped out of their jobs, but it was open to the Employment Tribunal to take the view that this was unlikely, given that (a) the Appellant was paid more, (b) had previously worked in a narrow specialism, and (c) the overall outlook for the plastic combs business was pessimistic.
20. Mr Linden submitted that it could not be said that there was no material on which the ET could base its judgment on the likely outcome of a different procedure; moreover, he submitted that whilst there was a possibility that a fairer procedure would have led to the retention of the Appellant, it was permissible for the Employment Tribunal to take the view that this was not the likely outcome. In our judgment, those submissions are right.
21. As to the last two issues, the first of these was a matter which arose in the evidence. Among the evidence as to his retirement age, on his executive pension application form dated 12 April 1995, the Appellant had anticipated that his retirement age would be sixty two. That was material on which the Employment Tribunal could base its findings in making the calculations.
22. As to the question of future loss, that was again a matter of judgment and impression for the Tribunal. There was evidence before the Employment Tribunal which could make it consider that the Appellant was being pessimistic about the amount of future employment that he could achieve. Its conclusion, in our judgment, cannot be said to be perverse, and it is only if it was perverse that we would interfere.
23. On questions of compensation, this Tribunal is unhappy about interfering unless there is a very gross error in the Decision of the Employment Tribunal. We do not find any such errors here. In the circumstances, we dismiss the appeal.
24. Mr Linden has a cross-appeal on behalf of the Respondent. He has not pressed this, and therefore we dismiss it too.