Appeal No.	 EAT/782/95

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 13 November 1996

Before
HIS HONOUR JUDGE PETER CLARK
MR D A C LAMBERT
MRS M E SUNDERLAND JP

MR D WOODROW	APPELLANT

SELNATE COMPANY LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR R HARRISON
(of Counsel)
Martin Pilkington
Association of Teachers and Lecturers
7 Northumberland Street
London WC2N 5DA	
For the Respondents	MS H SANDERSON
(Representative)	

	JUDGE PETER CLARK:	This is an appeal by Mr Woodrow against a decision of an Industrial Tribunal sitting at Reading on 25 April 1995 that he was not unfairly dismissed by his former employer, Selnate Company Ltd.  Extended Reasons for that decision (the reasons) are dated 25 May 1995.

	The Respondent was a subsidiary of a Japanese Company whose business was teaching English Language, European cultural training and European business practice to mature Japanese students.

	Mr Woodrow was employed by the Company as an English tutor from 27 August 1991 until his dismissal on 2 September 1994.  There were two other tutors engaged on a self-employed basis also working for the Respondent.

	The background to his dismissal was that in June 1994 the parent Company in Japan instructed Mrs Ducker, the Office Manager, to lose one of the three tutors.  The question was, which one?  In the event, Mr Woodrow was chosen to go.

	Before the Industrial Tribunal the Appellant contended that his selection was unfair, and that there had been no prior consultation before the decision to dismiss him.

	The Tribunal dealt with both arguments in paragraph 16 of their reasons in this way:

“16  Having considered the evidence and the contentions of the parties in this matter, we first of all came to the conclusion that the main reason for the dismissal was that of redundancy.  We then went on to consider whether or not the applicant had been unfairly selected for redundancy.  We accept that the criteria used were fair and we then looked at the lack of consultation.  It is true that case law has said that consultation is most desirable, particularly in redundancy cases.  Nonetheless, lack of consultation does not automatically make a dismissal unfair.  What we have done here is to look at the position to see what would have happened had there been consultation in this case.  ”

	They then considered that matter and conclude:

“In all the circumstances of this case, we find that consultation would not have made any difference to the eventual result, that is, the termination of the applicant’s employment.”

	The sole point now taken by Mr Harrison in this appeal is that on the face of paragraph 16 of the reasons the Tribunal has erred in law by applying what may be called a Polkey misdirection.

	In Polkey v A E Dayton Services Ltd [1988] ICR 142, the House of Lords disapproved the principle formulated by this appeal tribunal in British Labour Pump Co Ltd v Byrne [1979] ICR 347, namely that if it would make no difference to the eventual outcome if a proper procedure had been followed, then the dismissal may be fair.

	A passage from the speech of Lord Mackay, L.C., in Polkey summarises the ratio in that case.  At page 153 D - G his Lordship said this:

“Where there is no issue raised by sections 58 to 62 the subject matter for the tribunal’s consideration is the employer’s action in treating the reason as a sufficient reason for dismissing the employee.  It is that action and that action only that the tribunal is required to characterise as reasonable or unreasonable.  That leaves no scope for the tribunal considering whether, if the employer had acted differently, he might have dismissed the employee.  It is what the employer did that is to be judged, not what he might have done.  On the other hand, in judging whether what the employer did was reasonable it is right to consider what a reasonable employer would have had in mind at the time he decided to dismiss as the consequence of not consulting or not warning.
If the employer could reasonably have concluded in the light of the circumstances known to him at the time of dismissal that consultation or warning would be utterly useless he might well act reasonably even if he did not observe the provisions of the code.  Failure to observe the requirement of the code relating to consultation or warning will not necessarily render a dismissal unfair.  Whether in any particular case it does so is a matter for the industrial tribunal to consider in the light of the circumstances known to the employer at the time he dismissed the employee.” 

	Here, it is clear in paragraph 16 of the reasons that the Tribunal has asked itself the impermissible question “what would have happened had there been consultation in this case”, and answered that question; “consultation would not have made any difference to the eventual result, that is, dismissal”.

	Further, there is no finding that a reasonable employer in these circumstances would have concluded that consultation would have been utterly useless, and Mr Harrison tells us, without contradiction, that no such point was raised by the Respondents before the Industrial Tribunal.

	Ms Sanderson, on behalf of the Respondent, submits that there was a continuous dialogue amounting to consultation, up until the dismissal.  However, we note that at paragraph 11 of the reasons the Tribunal say:

“11  In June 1994, Tokyo gave the instruction to reduce and on 10 June the applicant was told that ‘due to the reduced number of forthcoming trainees, it will no longer be possible to continue to employ you.  I regret that your last day of work will be 22 July 1994’.”

	The inference from that is that having received instructions from Japan, Mrs Ducker promptly dismissed Mr Woodrow without prior consultation.

	But the short answer is that there is no finding of fact by the Industrial Tribunal that consultation about the proposed redundancy ever took place.  On the contrary, we think that at paragraph 16 the Tribunal have proceeded on the basis of an implicit, if not express finding, that there was no consultation.  Ms Sanderson does not seek to challenge the principle, to which we have referred in the case of Polkey, as to the “no difference rule”.

	In these circumstances we accept the submission made by Mr Harrison.  In our judgment this decision is fatally flawed and cannot stand.  What, then, should we do?

	Mr Harrison asks us to reverse the Industrial Tribunal finding of fair dismissal and substitute a declaration that the Appellant was unfairly dismissed and remit the case to a fresh Industrial Tribunal for a remedies hearing.  He relies upon the decision of this Tribunal in Heron v Citylink - Nottingham [1993] IRLR 372.

	Ms Sanderson opposes that course.  She submits that if we find that this Industrial Tribunal fell into error the whole case ought to be remitted for a re-hearing.

	We prefer the approach suggested by Ms Sanderson on this aspect of the case.  This is not a case like the Heron case where lack of consultation was the only issue in relation to fairness.  The question of the selection criteria and their application were also raised by the Appellant in this case.

	On any remedies hearing, assuming that compensation is to be the remedy, it should be for the Industrial Tribunal to determine the extent of unfairness in the dismissal, if that be their conclusion, in order for it then to go on to assess the percentage chance of the employee retaining his employment had a fair procedure been adopted.

	With this in mind we think it would be right that the entire case be remitted to a fresh Industrial Tribunal for re-hearing, both as to fairness and remedy so that the new Tribunal may reach its own judgment on the evidence as to the extent of any unfairness which it finds to have taken place, before going on to consider the appropriate remedy.

	In these circumstances the appeal is allowed and the case remitted to a fresh Industrial Tribunal for re-hearing.