THE INDUSTRIAL TRIBUNALS

CASE REF:  7019/09

CLAIMANT:			Linsey Blair 

RESPONDENT:		Impact Marcom Limited

DECISION

The unanimous decision of the tribunal is that the dismissal of the claimant was not an automatically unfair dismissal nor was the dismissal unfair in light of the provisions of Article 130A (2) of the Employment Rights (Northern Ireland) Order 1996.  

Constitution of Tribunal:

Chairman:		Ms M Sheehan

Panel Members:	Mr Hall
			Mr Lowden

Appearances:

The claimant was represented by Rory Donaghy, Barrister-at-law instructed by Donaghy Carey Solicitors.

The respondent was represented by Mr A Harkin, Barrister-at-Law, instructed by 
C & H Jefferson Solicitors. 

Sources of Evidence
1.	The claimant gave evidence on her own behalf.  The following gave evidence on behalf of the respondent: Mr Myles Brea and Ms Gill Barnett. There was also submitted to the tribunal an agreed bundle of documents.

The Claim and the Defence

2.	The claimant claimed that her dismissal from her employment with the respondent as an internal sales consultant on the grounds of redundancy on 19 June 2009 was unfair. The respondent accepted the claimant was dismissed with notice on the grounds of redundancy but denied the dismissal was unfair in all the circumstances.

Issue to be Determined

3.	The issue to be determined was whether the claimant had been unfairly dismissed contrary to the Employment Rights (Northern Ireland) Order 1996 (the 1996 Order).

Relevant Findings of Fact

4.	The respondent is a company of substantial size. At the relevant time of the claimant’s dismissal it had in excess of 150 employees based at its headquarters. It also had a number of regional offices located in Edinburgh, Manchester and Belfast. There were five directors on the Board of the respondent company.

5.	The profit figures produced at the hearing show that a substantial downturn in business occurred in the first quarter of 2009 for the Belfast office. While the respondent claimed the last quarter in 2008 was also poor vís a vís the previous year this was not supported by the figures produced at hearing.  

6.	A new Sales Director, Mr Brea, joined the respondent company in January 2009. He made a visit to the Belfast Office and met with the staff present including the claimant. At the time the other staff in the Belfast office consisted of a Sales Manager, administrator and an engineer. 

7.	The claimant and the Sales Manager had been employed from the outset of the setting up of the Belfast regional office in January 2004. They were the only persons involved in the “sales” side of the business at the relevant period in 2009.  In late 2008 the claimant changed her role within the Belfast office to move to an external sales officer. There was no documentation produced to the tribunal relevant to this change of role but it was not disputed by either party to the proceedings that as a result of this change an additional member of staff was employed on a “full time” basis to fulfil the claimant’s administrative role and duties. On the claimant’s own evidence at hearing the requirements of the post did not fully occupy the time of that member of staff. 

8.	No direct evidence was given by any of the respondent’s witnesses as to the arrangements governing this change of role for the claimant in the latter part of 2008. Therefore the claimant’s evidence that she exercised her right to revert to the internal sales/administrative role in early 2009 was not contradicted. The administrative member of staff employed while the claimant was testing the outside sales role in the latter quarter of 2008 and into 2009, was made redundant in January 2009 – to accommodate the claimant returning to her internal sales role.

9.	The tribunal heard conflicting evidence on the motivation of the claimant to revert to the internal sales/administrative role. In light of the lack of documentation on the claimant’s part to raise her alleged concerns with the respondents re lack of training etc, the tribunal concluded little credence could be given to that contention. The tribunal preferred the evidence of Gill Barnett that some time round the January 2009 redundancy at the Belfast office the claimant expressed her belief that the internal sales role was “safer in the economic climate” and that she hadn’t enjoyed the pure sales role.

10.	The board of directors of the respondent company in the latter part of 2008 and early 2009 were constantly seeking ways to protect profit margins. A number of redundancies occurred in 2008 as well as posts not being filled through natural wastage. The claimant in her own evidence conceded that she “knew they were scraping by sales wise”. In evidence the claimant also conceded that the engineer working out of the Belfast office was “more out of the office than in”. In the early part of 2009, financial returns from all business areas were being monitored weekly.  It is also clear that both those employed in the Belfast office and at Headquarters were concerned at sales turnover generated in 2009 by that office. 

11.	On 8 January 2009 the respondent company had circulated via the internal email system details of graduate sales posts. The claimant did not see or apply for these posts. As the claimant did not have a degree she could not satisfy the criteria for the posts. The creation of these posts was the first step of a new strategic sales approach initiated by the Managing Director in consultation with the Sales Director Mr Brea. The successful candidates for the Sales graduate posts received offers of employment on 10 and 13 March 2009 respectively with both commencing employment on 6 April 2009. These posts were solely for placement at the respondent’s headquarters in Sunbury on Thames, Middlesex, England. 

12.	The evidence of the respondent’s witness Mr Brea, as to how and when the decision was taken to make redundancies and who was selected for redundancy, did not tally with the records of dates of the relevant Board meetings. Mr Brea claimed in evidence that the “decision was made at the April 2009 Board meeting to make the claimant’s role redundant”. At other parts of Mr Brea’s evidence he claimed that the decision was made by him, immediately after a visit to Belfast on  29 April 2009. The tribunal subsequently heard that the relevant Board meetings were held either on 17 April or 24 April 2009. It was clear however that Mr Brea did visit Belfast on 29 April 2009 and accompanied by the sales manager of the Belfast office, Eamonn Duffy, he held meetings with two of the three main clients in Ireland to assess likely business requirements for the rest of 2009. The forecast gleaned was not positive and resulted in a projected substantial shortfall of turnover – in the absence of new business being found. There were no immediate ideas or potential sources identified by the Sales manager of the Belfast office.
 
13.	No record, of written or verbal communication with either the claimant or the respondent’s HR department regarding potential redundancies or selection of candidates exists before 30 April 2009. The tribunal did not find credible the evidence of Mr Brea that prior to his communication with Gill Barnett on 30 April 2009 re the claimant’s position to be made redundant, there had been “informal talks held with HR”. It is clear Gill Barnett is the sole HR resource of the respondent company and she was unable to give clear supporting evidence to Mr Brea’s assertion. The tribunal concluded, in light of the evidence from both witnesses for the respondent, that any communication with HR was not a direct communication re potential redundancies but indirect.  Concern was expressed to Gill Barnett by the Managing Director that “Belfast figures were very poor for that quarter, that no decision had been taken but Myles was to make decision when he’d been over to see Eamonn and Clients in Northern Ireland”. 

14.	The decision to make the claimant redundant was taken by Myles Brea, but it fell to Eamonn Duffy to communicate that decision to the claimant. While Mr Brea during his evidence contended that four options were considered, the tribunal was not satisfied due to the lack of documentary evidence to support that contention that any other options were considered other than, for a brief period, the closure of the Belfast office. When that option was ruled out due to the lease commitments the only post considered for redundancy was that of the claimant. She was the only employee in a unique mixed role of sales and administration. There was no other substantially similar post in the respondent company that carried out that mix of functions. The major determinative factors in the claimant’s selection for redundancy was that the respondent needed to save costs from the Belfast office in light of the projected reduced sales turnover, it could centralise her administrative role as they did in other regional offices and it was uneconomic to shut the whole Belfast office down. 

15.	Gill Barnett was instructed by Mr Brea to speak to Eamonn Duffy re the procedure to be followed. In effect HR was to ensure that “Eamonn Duffy did the right things”. The decision was communicated at a meeting between Eamonn Duffy and the claimant on 30 April 2009. While the notes of the meeting refer to the claimant being advised that there was a “potential redundancy”, the tribunal was satisfied that the decision had been taken and the consultation was more of a “going through the process” than a review of all available options. 

16.	A second meeting was held on 7 May 2009, when the claimant raised a number of    matters upon which she was seeking clarification. Some of those matters had been raised at the end of the preliminary meeting held on 30 April 2009. The claimant requested a “full answer or response to each question”. A third meeting was arranged for  14 May 2009. In between 7 May and 14 May Eamonn Duffy compiled and forwarded to the claimant answers to the various matters raised by her in the meeting of 7 May 2009. In summary the claimant was advised that the decision to make her redundant was motivated by a strategy to reduce costs for Belfast in line with projected reduced revenues, centralising the claimant’s administrative functions from staff based in Sunbury on Thames headquarters. 

17.	On 14 May 2009, the claimant was advised that Mr Duffy had been informed there were no alternative positions that could be offered to the claimant. Mr Duffy gave no evidence to the tribunal so the source of his information was unclear. Clearly he had carried out no enquiry himself. On the evidence of Mr Brea and Ms Barnett the tribunal concluded that Mr Brea advised Ms Barnett that there were no alternative posts available – and that conclusion had been arrived at by 30 April 2009. The claimant’s redundancy was confirmed orally and her financial entitlements were notified to her. The claimant was advised of her right to appeal.  On 14 May 2009 Mr Duffy also wrote to the claimant confirming dismissal on the grounds “that your present role with the company is redundant”.  The letter advised the claimant of her financial entitlements and of her right to appeal. 

18.	 On 18 May 2009 the claimant wrote to Mr Duffy by email setting out her grounds of appeal. The claimant’s contention was that her role was not being made redundant but relocated to Head office at Sunbury. The claimant queried why she had not been offered one of the new “Inside Sales” roles “based in Sunbury on Thames (I may have chosen to relocate) or to do the role remotely”. In fact the posts the claimant referred to were “Sales Executive” posts, which were to have an external sales role. There existed no mobility clause in the contract of the claimant.

19.	An appeal hearing was arranged and conducted by Myles Brea on 28 May 2009.  Mr Brea upheld his decision to make the claimant redundant. He advised the claimant there were no alternative positions to offer the claimant. The notes of the appeal hearing clearly indicate that Mr Brea got his timeline regarding the central sales roles created in January 2009 wrong as the posts were advertised some months in advance of the sales meeting held in or around March 2009. It was clear that the “type of person” sought to fulfil these roles were “graduates”.

Relevant Law

20.	The relevant legislation in respect of redundancy payment entitlement is found at Articles 170, 171, 174 and 175 of the Employment Rights (Northern Ireland) Order 1996. Article 174 of the Order makes it clear that, for the purposes of that legislation, the concept of redundancy includes:-

"	(b) the fact that the requirements of that business – 

(i) for employees to carry out work of a particular kind,
…
have ceased or diminished or are expected to cease or diminish."

21.	The issue for the tribunal is to determine whether the dismissal on grounds of redundancy was fair or unfair in accordance with Article 130 of the Employment Rights (Northern Ireland) Order 1996.  It is for the employer to show the reason for the dismissal, and that it is a potentially fair reason within Article 130(2) of the Order.  In this case the respondent relies on redundancy which is a potentially fair reason.

22.	By Article 130(4) 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 the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and

(b)	must be determined in accordance with equity and the substantial merits of the case.

23.		In Iceland Frozen Foods Ltd  v  Jones [1983] ICR 17, Browne-Wilkinson J offered 	the following guidance:-

“Since the present state of the law can only be found by going through a number of different authorities, it may be convenient if we should seek to summarise the present law.  We consider that the authorities establish that in law the correct approach for the industrial tribunal to adopt in answering the question posed by Section 57(3) of the [Employment Protection (Consolidation) Act 1978] (the equivalent provision to Article 130 of the Employment Rights (Northern Ireland) Order 1996) is as follows:-

(1)	the starting point should always be the words of Section 47 themselves;

(2)	in applying the section an industrial tribunal must consider the reasonableness of the employer’s conduct, not simply whether they (the members of the industrial tribunal) consider the dismissal to be fair;

(3)	in judging the reasonableness of the employer’s conduct an industrial tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;

(4)	in many, though not all cases there is a band of reasonable responses to the employee’s conduct within which one employer might reasonably take one view, another quite reasonably take another;

(5)	the function of the industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case, the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted.  If the dismissal falls within the band the dismissal is fair; if the dismissal falls outside the band it is unfair.”

24.	In Williams and others v Compair Maxam Ltd [1982] IRLR 83 EAT the question 	the tribunal should ask itself is summarised as whether the “employer acted 	reasonably in treating redundancy as a sufficient reason for dismissing the 	employee”. N C Watling & Co Ltd v Richardson [1978] IRLR 255 EAT cautions a 	tribunal to recognise “that there may be circumstances where more than one course 	of action may be reasonable”. The test for fairness is “whether what has been done 	is something which no reasonable management would have done”. 

25.		Article 130(A) of the 1996 Order provides;

“(1)	An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if –

(a)	one of the procedures set out in Part I of Schedule 1 to the Employment (Northern Ireland) Order 2003 (Dismissal and Disciplinary Procedures) applies in relation to the dismissal; 

(b)	the procedure has not been completed and,

(c)	the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.

 (2)	Subject to paragraph (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of Article 130(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.”

26.	Article 130A(2) of the 1996 Order provides that if the employer does not comply with the requirements of the statutory dismissal and disciplinary procedure set out in the Employment (Northern Ireland) Order 2003 the dismissal will be automatically unfair.  Insofar as is material, Part 1 of Schedule 1 of the Order provides:-

	“Step 1 : statement of grounds for action and invitation to meeting

1(1)	The employer must set out in writing the employee’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.

(2)	The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

Step 2 : Meeting

2(1)	The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.

 (2)	The meeting must not take place unless:-

(a)	the employer has informed the employee what the basis was for including in the statement under Paragraph 1(1) the ground or grounds given in it; and

(b)	the employee has had a reasonable opportunity to consider his response to that information.

(3)	The employee must take all reasonable steps to attend the meeting.

(4)	After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.”

27.		Even if the dismissal is not automatically unfair, Article 130A (2) of the 1996 Order 	provides that if there has been any failure by the employer to follow any other 	procedure that ought to be followed, the dismissal may nevertheless be unfair.  	However, if the employer establishes that he would have dismissed the employee 	even if he had followed a fair procedure, then procedural unfairness, of itself, is not 	a reason to hold the dismissal to be unfair.  (Alexander v Brigden Enterprises 	Limited [2006] IRLR 422; Software 2000 v Andrews [2007] IRLR 568.)

28.	If an employer fails to follow a fair dismissal procedure, it was held in Polkey  v  AE Dayton Services Ltd [1998] ICR 142, that the tribunal may reduce the compensatory award by an appropriate percentage to reflect the probability of a dismissal occurring in any event had the appropriate procedure been completed.

29.	In Software 2000 Ltd v Andrews [2007] IRLR 568 it was established that the s 98A (2) (the equivalent provision in Northern Ireland being Article 130A(2)) exercise of determining whether the employer has shown that the employee would have been dismissed if a fair procedure had been followed, and the assessment of whether, instead, the dismissal is unfair but subject to a Polkey reduction, are exercises which run in parallel.  One of the five possible outcomes is “the employer may show that if fair procedures had been complied with, the dismissal would have occurred when it did in any event.  The dismissal will then be “fair” in accordance with Article 130A (2) of the 1996 Order. 

Submissions

30.	At the conclusion of the hearing oral submissions were made on behalf of both parties. In summary it was submitted on behalf of the claimant that the tribunal should draw an adverse inference from the failure of the respondent to call Eamonn Duffy to give evidence. Essentially the procedure adopted by the respondent was unfair as the person who made the decision also heard the appeal. The sole criteria used by the respondent were skills and geographical position. No consideration was given to relocating the claimant even though there were roles she could fulfil in England – Graduate sales executives or the Order Management Team.  No evidence was produced by the respondent that voluntary redundancies were sought.

31.	On behalf of the respondent it was submitted the respondent had provided evidence that the economic crisis justified redundancy being declared and in that situation it was not for the tribunal to consider what the business did. The panel should not review the employer’s decision. In this redundancy situation the only pool of employees was Belfast and the only saving that could be made was the claimant. Her post was unique and no similar post existed elsewhere in the company. The respondent accepted that there were procedural issues in this case but those deficiencies are not the main issue unless the claimant could have been accommodated elsewhere within the company. 

32.	Both legal representatives requested the opportunity to provide additional submissions regarding the impact if any on the decision of the tribunal of the absence of any written notification to the claimant prior to the initial meeting held with her on 30 April 2009. Only the respondent chose to make additional submissions. In summary they were (a) as the claimant was not unfairly dismissed the statutory procedures do not arise, (b) that the claimant never made the case that the statutory procedures were not adhered to, (c) that meetings were held with the claimant on three dates when a detailed response to her queries were provided and that the claimant acknowledged in her letter of appeal that “the company had followed procedure to the letter regarding this redundancy”. 

Decision

33.	It is clear to the tribunal there was an economic downturn particularly in the first quarter of 2009. All parties were in agreement that the first quarter of any year was the major source of the annual turnover. The prospects for making up that revenue were non-existent in the absence of new business flows and there was no prospect of any in the immediate future. At the same time the respondent company had determined on a new strategy for sales persons – to train and develop appropriately qualified persons into experienced external sales persons over a two year period. It was clear to the tribunal that redundancies had already been made in the latter part of 2008 in areas of the respondent’s business that did not include Belfast until January 2009 when an administrator was made redundant when the claimant returned from an external sales role to her mixed role of Internal sales/admin. There was a clear diminishment in sales with a consequent reduction in the number of workers required to perform that work. Equally the centralisation of administration resulted in making that element of the claimant’s role obsolete. The tribunal was satisfied that there was a genuine redundancy situation in the Belfast office by April 2009. 

34.	Alexander v Brigden Enterprises Limited [2006] IRLR 422; was a case concerning dismissal on the grounds of redundancy. Similarly to this case there had been a financial downturn for the employer necessitating redundancies.  In this case Elias J at paragraphs 33 – 39 of his judgement sets out the information that “ought to be provided to an employee in order for the employer to comply with the statutory obligation”. It “must be at least sufficient to enable the employee to give a considered and informed response to the proposed decision to dismiss”. As the procedures are concerned only “with establishing the basic statutory minimum standard, and it is plainly not the intention of Parliament that all procedural defects should render the dismissal automatically unfair with the increased compensation that such a finding attracts – it suggests that the bar for compliance with these procedures should not be set too high”.  “Once the statutory procedures have been complied with, employers are thereafter provided with a defence for failing to comply with fuller procedural safeguards if they can show that the dismissal would have occurred anyway even had such procedures been properly followed. This factor, in out view, militates against allowing the bar for the statutory procedures being set too low.” The duty on the employer at the Step 1 and Step 2 is to “provide the ground for dismissal and the reasons why he is relying on that ground….At the first step the employer merely has to set out in writing the grounds which lead him to contemplate dismissing the employee, together with an invitation to attend a meeting. At this stage the statement need do no more than state the issue in broad terms”.  In this case instead of the claimant receiving a letter, a “preliminary meeting” was held with the claimant – which was aimed at providing the information required to be provided by the letter required by Step 1. There were also two other meetings held. In the view of the tribunal, the minutes of the second meeting held on 7 May 2009, which were provided to the claimant prior to the third meeting held on the 14 May 2009, could be viewed as the respondent complying with the obligations imposed by Step 1 of the Statutory Dismissal Procedure. The meeting held on 14 May 2009 in the view of the tribunal did comply with the obligations imposed by Step 2 in that the claimant was provided with information as to why she was selected for redundancy.  Accordingly the tribunal concluded that the respondent had in essence complied with the Statutory Dismissal Procedures. 

35.	The provisions of Article 130A(2), referred to above, apply only where the statutory dismissal procedures have already been complied with and relates solely to a failure by the employer to follow some other procedure, such as an internal dismissal procedure or a recommendation in the Labour Relations Agency Code.    See Alexander-v- Bridgen Enterprises Ltd [2006] IRLR 422.

36.	There were deficiencies in the procedure adopted by the respondent. There was no genuine consultation regarding the redundancy as the decision had been taken by Mr Brea prior to the claimant being notified that she was at risk of same. No other employee, based at Belfast or elsewhere in the respondent company, was included in the pool of employees under consideration for redundancy when the claimant was advised that she was at risk. Mr Brea selected the claimant for redundancy and then delegated the task of communicating same to the claimant. Later he was the person who held the claimant’s appeal against her dismissal on the grounds of redundancy. In this case Mr Brea was so “personally involved in the events that led to the decision to dismiss”. It was realistically his case so as to disentitle him “from being a person who can conduct a fair appeal” – Byrne v BOC Ltd [1992] IRLR 505 EAT. There were other directors, in particular the Financial Director or Managing Director who could have carried out that appeal function. The procedure adopted flouted all the rules of natural justice.  

37.	The tribunal having considered all the evidence is satisfied that the posts the claimant suggests as alternative posts were not posts that were “substantially similar” to the post she held. The Graduate Executive posts were training posts to eventually result in a fully fledged external sales role. The Order Management Team posts were strictly administrative with no sales element to them. When a redundancy had been made to the Order Management team in late 2008, the claimant had not been considered in the pool of employees for that redundancy process.  Unfortunately for the claimant the tribunal having considered all the evidence is equally satisfied that although the process was procedurally unfair a change of appellate authority would have made no difference to the outcome.  In the tribunal’s view, the claimant would still have been dismissed if the respondent had arranged and conducted an appeal hearing by a fair and impartial member of management who had not been involved in the initial decision. The tribunal is therefore satisfied that the dismissal was not unfair and the claim is dismissed.

Chairman:

Date and place of hearing:	27 and 28 January 2010, Belfast.

Date decision recorded in register and issued to parties: