Appeal No. UKEAT/0190/12/RN
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At
the Tribunal
On
10 July 2012
Before
HIS HONOUR JUDGE DAVID RICHARDSON
MR D J JENKINS OBE
MR J R RIVERS CBE
WREXHAM
GOLF CO LTD APPELLANT
MR
G R INGHAM RESPONDENT
Transcript of Proceedings
JUDGMENT
SUMMARY
UNFAIR DISMISSAL – Reasonableness of dismissal
The employer, a Club, needed to make savings and decided that the
role of club steward was no longer required. It dismissed the employee, the
club steward, for redundancy. The Tribunal found that the dismissal was
unfair, in particular because “no consideration was given to the possibility of
establishing a pool from which any redundancies could be made”. Held:
section 98(4) required the Tribunal to consider whether it was reasonable for
the club to focus upon the club steward as the employee potentially to be made
redundant. Appeal allowed. Cases considered: Taymech Ltd v Ryan [1994]
UKEAT/663/94, Capita Hartshead v Byard [2012] UKEAT/0445/11, and Halpin
v Sandpiper Books Ltd [2012] UKEAT/0171/11.
HIS
HONOUR JUDGE DAVID RICHARDSON
1.
This is an appeal by Wrexham Golf Club Limited (“the Club”) against a
judgment of the Employment Tribunal sitting in Prestatyn (Employment Judge
Evans presiding) dated 21 December 2011. By its judgment the Tribunal upheld a
claim of unfair dismissal brought by Mr Graham Ingham.
The factual background
2.
Mr Ingham was employed by the Club as Resident Club Steward from 1 June
2005 until 21 March 2011 when his employment was terminated on the grounds of
redundancy. His responsibilities included management of the bar area, cashing
up and locking up at the end of the evening and taking sole responsibility of
the Clubhouse area over the weekend. He was one of 11 employees at the Club.
The senior employee was the Club’s Secretary, Mr West.
3.
In October 2010 the Club’s Board took a decision that money needed to be
saved. A sub-group was appointed to look at all aspects of bar and catering
facilities, including staff costs. Its unanimous view was that the role of
club steward was no longer required. The strategy proposed was that the bar
and catering aspects of the Club should effectively become one operation. The
Steward’s activities would be undertaken by other members of staff.
4.
At a board meeting on 9 November 2010 it was agreed that the
recommendation should be acted on, and resolved that Mr Ingham should be
consulted and advised that the role of steward was at risk should alternative
measures not be identified.
5.
On 10 November Mr West met Mr Ingham, informed him about the sub-group’s
conclusion, and told him that a period of consultation was taking place in
order to seek suggestions or ideas from him as to how the potential redundancy
could be avoided. He confirmed the position in writing on 11 November. A
further meeting took place on 26 November. Mr Ingham was offered 11 hours bar
work as an alternative to his position as club steward, but only on a 4 week
trial. Mr Ingham was told there would be a board meeting on 29 November.
6.
On 29 November Mr Ingham wrote a letter to the Board of Directors
putting forward various points in his favour. He said that it was not
appropriate to distribute some parts of his role to other members of staff, since
they were less experienced in the licensed trade. He said the bar had operated
at a profit, whereas the catering facilities operated at a loss; he questioned
why there should be a redundancy in the bar, when other avenues did not return
a profit. He queried whether other areas within the Club had been considered
for savings – such as catering, administration, greens and cleaning contracts.
He referred to two members of the “waiting on staff” and questioned whether
savings could be made there.
7.
In a letter dated 1 December 2010 Mr West invited Mr Ingham to a meeting
on 8 December. He was told that his position had been selected at risk of
redundancy; that no final decision had been taken and he would have a final
opportunity to put forward comments, concerns or counter-proposals. The
meeting was postponed until 20 December. On 22 December Mr West wrote to Mr
Ingham to inform him that it had been decided to make him redundant. An appeal
was heard on 13 January 2011 and rejected.
The Tribunal’s reasons
8.
The Tribunal noted that it was accepted on behalf of Mr Ingham that the
dismissal was for redundancy. It referred to section 98(4) of the Employment
Rights Act 1996 and set out, in paragraphs 13-20 of its reasons, a legal
self-direction in impeccable terms.
9.
The Tribunal then set out detailed findings of fact. In the course of
doing so it made a finding that by 10 November 2010 the Club had decided to
terminate the role of club steward and with it the employment of Mr Ingham and
a finding critical of the Club’s response to Mr Ingham’s letter dated 29
November 2010.
10.
The Tribunal stated a conclusion that the Club “did not act within the
range of reasonable responses” in choosing to make Mr Ingham redundant
(paragraph 50). It gave, in essence, the following reasons for its conclusion.
11.
Firstly, the Tribunal was critical of the Club for failing to consider
the possibility of establishing any kind of pool. The Tribunal said:
“51. In particular, the panel is mindful of the fact that by
admission under cross-examination from Mr John Williams and from Mr West, no
consideration was given to the possibility of establishing a pool from which
any redundancies could be made.
52. The Tribunal finds that from the outset the respondent was
clear that if any employee was to be made redundant, it would be Mr Ingham.
53. The respondent should have considered the issue of a pool.
The evidence was quite clear that the respondent company had not in fact
considered any sort of pool. Nor had they given any thought to the fact that
there was a considerable overlap between a lot of the work carried out by Mr
Ingham and that of the other bar staff employed by the respondent company.
54. Having not considered the issue of a pool, consideration as
to whether they employed a fair selection criteria or procedure inevitably have
to be answered in the negative. No selection criteria were employed other than
the fact that because the decision had been taken to make the role of Club
Steward redundant, that automatically meant that Mr Ingham’s employment went
with it.”
12.
Similar reasoning was repeated in paragraph 59 and in paragraph 62 of
the Tribunal’s reasons.
13.
Secondly, the Tribunal was critical of the information provided to Mr
Ingham and the consultation with him. At least in part this followed from its
conclusion that the Club ought to have considered a pool: see the paragraphs
which we have quoted. The Tribunal however had wider criticisms of information
and consultation, set out in paragraphs 56 and 57.
14.
Thirdly, the Tribunal had a procedural criticism. The sub-group which
had originally met and considered the question of making savings in October
included both Mr West (who was responsible for the dismissal) and Mr Brunyee
(who was a member of the appeal panel). The Tribunal said that the size of the
Club’s undertaking ought to have enabled it to ensure that Board members other
than those on the sub-group, were appointed to deal with the dismissal and
appeal (paragraph 58).
Submissions
15.
On behalf of the Club Mr Sam Healy submits that the Tribunal’s
conclusion on the question of the pool was erroneous in law. He submitted
that it did not follow that, because the Club did not consider the question of
a pool, the decision to make Mr Ingham redundant was necessarily outside the range
of reasonable responses. There is no inherent reason why there should not be a
pool of one. There must be cases where it is so obvious which person should be
selected for redundancy that it is reasonable for an employer not to consider
other employees for redundancy at the same time. In this case the Club’s
sub-group had decided that the role of Club Steward was potentially redundant;
Mr Ingham was the only person in the role of Club Steward; his role may have
overlapped with bar staff but it was a discrete role, therefore it could not
possibly be described as unreasonable for the Club to consider him on his own
for redundancy. The Tribunal must have failed to apply the “band of reasonable
responses” test to the question of the pool; and it may have taken an
over-legalistic approach to some words of Mummery J in Taymech Ltd v Ryan
[1994] UKEAT/663/94. Mr Healy took us to relevant authorities of
the Appeal Tribunal on the question of choosing the pool: in particular, Taymech,
Capita Hartshead v Byard [2012] UKEAT/0445/11, and Halpin v
Sandpiper Books Ltd [2012] UKEAT/0171/11.
16.
Further Mr Healy submitted that the Tribunal’s conclusions on the
question of consultation were perverse. The Club was a small employer which
had carefully undertaken a process of consultation, keeping open in its
correspondence the possibility of retaining the role of steward and making
savings elsewhere, specifically stating that no final decision had been taken.
In any event he submitted that the Tribunal’s reasoning on the question of
consultation was in part at least dependent upon its erroneous conclusions on
the question of the pool.
17.
Mr Ingham has taken only a limited part in this appeal. Through
solicitors he has filed an answer saying that the decision of the Tribunal was
correct and pointing out that there is in any event no appeal from the
Tribunal’s criticisms of the procedure adopted. He and his solicitors have
written to the Appeal Tribunal to say that due to financial restrictions caused
by unemployment he is unable to attend or be represented.
Discussion and conclusions
18.
Since it was common ground that the dismissal was by reason of
redundancy, the task for the Tribunal was to apply section 98(4) of the Employment
Rights Act 1996, which provides that: –
“..The determination of the question whether the dismissal is
fair or unfair (having regard to the reason shown by the employer)—
(a) depends on whether in the
circumstances (including the size and administrative resources of the
employer’s undertaking) the employer acted reasonably or unreasonably in
treating it as a sufficient reason for dismissing the employee, and
(b) shall be determined in accordance
with equity and the substantial merits of the case.”
19.
The Appeal Tribunal’s task is quite different. Parliament has vested in
the Appeal Tribunal power only to deal with questions of law. The Appeal
Tribunal is concerned only to ensure that the Tribunal has taken its decision
upon correct legal principles, giving reasons which are tenable in law.
20.
It is convenient first to consider the Tribunal’s reasoning on the
question whether the dismissal was unfair by reason of the failure of the Club
to consider establishing a pool rather than concentrating upon the position of
Mr Ingham as bar steward.
21.
The word “pool” is not found in section 98(4) of the Employment
Rights Act 1996. But it is well known to employment lawyers and those who
work in human resources. It gives expression to a key decision which has to be
made when an employer has decided that its requirements for employees to carry
out work, or work of a particular kind, have ceased or diminished. Which
employees will be considered for selection? The group of employees from whom
the selection will be made is often called “the pool”. There is no rule that there
must be a pool: an employer, if he has good reason for doing so, may consider a
single employee for redundancy: see, for an example, Halpin v Sandpiper
Books Limited at paragraphs 14-15. Thus it is sometime said that there
may be a “pool of one”; a somewhat inelegant phrase representing an underlying
reality.
22.
The Tribunal referred to, and may have placed particular weight upon, Taymech
v Ryan. In that case the employee was employed as a
telephonist and receptionist, although she did some other general
administrative work when she could. The employer decided it could manage
without a telephonist/receptionist and dismissed her. The Tribunal, applying
what was then section 57(3) of the Employment Protection (Consolidation) Act
1978, considered that the pool for selection should have included the
larger group of those who did administration, not merely the employee who was
telephonist/receptionist. The Appeal Tribunal held that the Tribunal did not
err in law. Mummery J said:
“There is no legal requirement that a pool should be limited to
employees doing the same or similar work. The question of how the pool should
be defined is primarily a matter for the employer to determine. It would be
difficult for the employee to challenge it where the employer has genuinely
applied his mind [to] the problem.
This is a case where the Tribunal concluded that the employers
had not even applied their mind to the question of a pool, consisting of people
doing similar administrative jobs. As the employers had never applied their
mind to anything, except Mrs Ryan 's actual job of
telephonist/receptionist, they had not applied their mind to a pool and
therefore there was no meaningful consultation.”
23.
In Capita Hartshead v Byard the Appeal Tribunal (Silber J
presiding) has recently reviewed the cases and set out the following
“applicable principles where the issue in an unfair dismissal claim is whether
an employee has selected a correct pool of candidates who are candidates for
redundancy” (para 31):
(a) “It is not the function of the [Employment] Tribunal to
decide whether they would have thought it fairer to act in some other way: the
question is whether the dismissal lay within the range of conduct which a
reasonable employer could have adopted” (per Browne-Wilkinson J in Williams v Compair
Maxam Limited [1982] IRLR 83 [18];
(b) “[9]...the courts were recognising that the reasonable
response test was applicable to the selection of the pool from which the
redundancies were to be drawn” (per Judge Reid QC in Hendy Banks City Print
Limited v Fairbrother and Others (UKEAT/0691/04/TM);
(c) “There is no legal requirement that a pool should be limited
to employees doing the same or similar work. The question of how the pool
should be defined is primarily a matter for the employer to determine. It
would be difficult for the employee to challenge it where the employer has
genuinely applied his mind [to] the problem” (per Mummery J in Taymech v Ryan
[1994] EAT/663/94);
(d) The Employment Tribunal is entitled, if not obliged, to
consider with care and scrutinise carefully the reasoning of the employer to
determine if he has “genuinely applied” his mind to the issue of who should be
in the pool for consideration for redundancy; and that
(e) [Even] if the employer has genuinely applied his mind to the
issue of who should be in the pool for consideration for redundancy, then it
will be difficult, but not impossible, for an employee to challenge it.”
24.
In this case we are conscious that the Tribunal has referred to section
98(4) and to the range of reasonable responses test. We have concluded,
however, that the Tribunal did not apply that test to the question whether it
was reasonable to focus upon the Club Steward as the person at risk of
redundancy.
25.
The Tribunal did not criticise the conclusion of the Club that the role
of Club Steward should cease. Its reasoning seems to proceed from its finding
that the Club did not consider developing a wider pool of employees. At this
point the Tribunal needed to stop and ask: given the nature of the job of Club
Steward, was it reasonable for the Respondent not to consider developing a
wider pool of employees? Section 98(4) requires this question to be addressed
and answered. On its face, it would seem to be within the range of reasonable
responses to focus upon the holder of the role of Club Steward without also
considering the other bar staff. The Tribunal does not say why it was
unreasonable to do so. This may be because the Tribunal had in mind the words
of Mummery J in Taymech which we have quoted; but no judgment
should be read as a statute. There will be cases where it is reasonable to
focus upon a single employee without developing a pool or even considering the
development of a pool. The question which we do not think the Tribunal really
addressed was whether this was such a case.
26.
We turn then to the question whether the Tribunal was perverse in the
conclusion it reached concerning consultation. The difficulty of succeeding on
a perversity appeal before the Tribunal is well known. A
perversity appeal is essentially a complaint about the Tribunal’s findings of
fact. Because Parliament has expressly provided that there is to be an appeal
to the Appeal Tribunal only on a question of law, there is only the most
limited scope for such an appeal: see Yeboah v Crofton (2002) IRLR 634 at para 93.
27.
We do not think the Tribunal’s findings were perverse.
28.
The Tribunal’s findings were, however, to a considerable extent linked
to its prior finding relating to the pool. At least in part, the Tribunal’s
findings on the question of consultation must fall with its conclusions on the
question of the pool.
29.
As an Appeal Tribunal we have a limited role. We can substitute our own
view that a dismissal is fair, or unfair, only if it is plain what the answer
must be. Otherwise the matter must be remitted for reconsideration. In our
judgment we cannot safely disentangle the different elements of the Tribunal’s
reasoning so as to say that the dismissal must be found to be fair or unfair.
30.
It follows that the matter must be remitted for re-hearing. Applying
the criteria in Sinclair Roche Temperley v Heard [2004] IRLR 763,
we consider that remission ought to be to a freshly constituted Tribunal. The
Tribunal will hear the case afresh; it is not bound by any of the conclusions
of the first Tribunal – but nor is it precluded from reaching similar
conclusions. It must, however, when it addresses section 98(4) specifically
consider whether it was within the range of reasonable responses for the Club,
once it had decided that the role of Club Steward was to disappear, to focus
upon the Club Steward as the person at risk of redundancy without developing a
pool.
