Appeal No.	 EAT/572/99/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 20 October 1999

Before
HIS HONOUR JUDGE ALTMAN
MR S M SPRINGER MBE
MR K M YOUNG CBE

MR P METANIE	APPELLANT

TELEGAN GAS MONITORING	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	Mr P Metanie
(In Person)	

JUDGE ALTMAN:
1	This is an appeal from the decision of the Employment Tribunal sitting at London (North) on the 25 March 1998.  It comes before us by way of preliminary hearing to determine if there is an argument in law which can be properly maintained at a full hearing of the Employment Appeal Tribunal.

2	The Appellant complains of unfair dismissal and breach of contract in relation to outstanding commission payments.  The Respondents purportedly dismissed the appellant for redundancy upon the closure of the works which was the place of the Appellant’s employment in Shoreditch.  The real grievance of this Appellant, in relation to which we are bound to say we have some sympathy, is that the operation being carried out at Shoreditch, in circumstances to which I refer, was moved to Crawley and the work that the Appellant was doing was moved to Crawley.  The Appellant was invited himself to move to Crawley but at what the Respondents described in a letter 27 June 1997 as being:

“a much reduced level from your current salary”.

3	Here is an employee whose work is continuing, whose job seems to be continuing but at a different location and for much less pay.  And in those circumstances, when he himself would have been quite willing to go to Crawley for an equivalent salary to that which he had previously received, we can well understand his sense of grievance and his inability to accept that he was dismissed for redundancy, or that he was dismissed fairly.  

4	So far as the claims for commission are concerned, the issue appears to be whether the commission was 10%, as the Respondents claim, or 20% plus any sum agreed with the Purchaser over the list selling price as the Appellant contended.  Indeed it may be that these are also issues in relation to particular contracts which give rise to an entitlement to commission.  
There were many other issues in the Originating Application but apparently by the time of the hearing before the Employment Tribunal, these were no longer live issues.  

5	Having identified the issues the Tribunal described the background to what was alleged to be a redundancy situation.  It is a little difficult to understand, but the finding of fact begins with the bold assertion that the Employment Tribunal preferred the evidence of the Respondents’ witness and rejected the Appellant’s evidence.  That was a very wide ranging finding, and it is without any explanation as to the reason for such a selection.  Nor is there any reference to the facts or particular facts which gave rise to that generalised statement.  

6	It is difficult for an Employment Appeal Tribunal to analyse a decision and understand the thinking of a Tribunal when it is expressed in that way, and we have no doubt that in this case as in others it leaves a litigant in person with a sense of puzzlement.  Be that as it may, the facts as found were not greatly in dispute, it is really the interpretation that the Appellant relies on.  

7	There was, so the Tribunal found, a purchase of shares  in 1996 by the Respondents of the former employers of the Appellant, Research Engineers Limited.  In June 1997 the current Respondents were shown as the Employer of the Appellant.

8	It was accepted by the Employment Tribunal that the transaction or series of transactions led to a transfer within the provisions of the Transfer of Undertaking (Protection of Employment) Regulations 1981.  But they also found that it was not the intention of the Respondents to close the Shoreditch site before the lease expired in November 1998 when works would have had to cease.

9	The events that then followed, on the finding of the Tribunal, were not related to the transfer.  Although the Employment Tribunal made no finding about that, it seems to us to be implicit in what they say that they were of the view that what followed was not related to the transfer.  We say that, because it was the inadequacy of the management structure that the Employment Tribunal found to be the spur to an earlier transfer from Shoreditch, and was otherwise intended.  And the amalgamation of sites was for a reason, that was described as “economically sound” in the estimation of the Respondents. We assume that the Employment Tribunal had in mind an economic reason for any closing down of the site which therefore would break the link between the transfer and any unfairness claimed by the Appellant.

10	A decision was taken to close the Shoreditch site from November 1997 although the Employment Tribunal did not state when that decision was taken.  But the correspondence about it appears to have been in about July 1997 and the Employment Tribunal found that the Shoreditch staff were told they could transfer to a similar position at the Crawley site or could take redundancy.  The Employment Tribunal then analysed the position of the various people at Shoreditch and Crawley and they then found that there was a decision to transfer the service department of which the Appellant formed part, in June 1997, to Crawley for what the Tribunal found to be a sound business reason, albeit that that transfer was 5 months ahead of the closure of Shoreditch.  

11	We were invited to look at the fact that an offer was made to the Appellant to move to Crawley to do the same job that he had done.  That was refused and another job was found not to be appropriate.  We have seen a letter dated, 27 June 1997, from the operations director, Mr Turner upon which the Appellant has relied considerably.  It is to the effect that from the date of the letter ongoing reorganisation within the company was the cause of the Appellant’s post no longer existing, and that his job was therefore redundant.  The final payments were then set out and an alternative, at the much reduced level of salary, was offered.  The Respondents have never maintained that that was a reasonable alternative offer of suitable employment within the Act so as to entitle them to refuse to make a redundancy payment.  At that time it appears that the Appellant was on sick leave and there was no formal written consultation.  The Tribunal accepted:

“that the respondent had properly concluded that formal consultation was utterly futile”.

12	Pausing there for a moment, the letter written without notice terminating employment without consultation is a matter which probably formed part of the factual situation but the Employment Tribunal made a determination of fact from which no point of law appears to us to arise.  

13	The Appellant has raised a large number of matters in his Notice of Appeal having helpfully set out the matters that were not in issue up until Paragraph 21.  He then takes issue with the reason for dismissal.  He correctly points out that it is for the employer to show the reason for dismissal and he suggests that the employer was inconsistent in the way he did so and failed to meet that test, or at least that the Employment Tribunal failed to have considered that.  He starts with the letter to which I have already referred in which it is shown that there is reference to ongoing reorganisation within the company and that his position is redundant.  He points out, however, that other forms of description were used, service such as that the department at Shoreditch was “closed down”, that being, so says the Appellant, referring to the witness statement of the managing director.  It is said that does not look like reorganisation, it looks like closing down.

14	It is pointed out that in the skeleton argument submitted by the Respondents for the Employment Tribunal Hearing there was an assertion that the dismissal was wholly attributable to the “closure of the service department”.  He goes on to point out that in the skeleton argument it later states that the employer had “ceased or intended to cease to carry on the business”.  But on the following page they say the requirements that business for employees to carry out work “ceased or diminished” or are expected to cease or diminish and indeed the Employment Tribunal then in paragraph 6 of its decision says that the Respondents took an;

“economic and or organisational decision”.

15	The Appellant fairly suggests that all those descriptions use different words and it must be very confusing for a litigant in person to follow the different forms of words that are used in this sort of situation.  The Appellant complains that the closure of the business is not its reorganisation and that in effect there is no real grasp of what is going on and he asks why it should be redundancy.  But the section of the Act to which our attention was directed was helpfully presented in a ring-file.  The test for redundancy was at Page 30, the relevant section being 139 (1)(a)(2) 

“the fact that his employer had ceased or intends to cease to carry on that business in the place where the employee was so employed”.

16	It is perfectly true that the ceasing of a business is not its reorganisation.  But this seems to us simply to be a confusion of thought.  Whilst the Shoreditch operation itself was being closed, that was clearly part of a wider reorganisation which involved the merging of two sites into the Crawley site, and when one looks at reorganisation it is the business that is described as being reorganised, not just what is going on at Shoreditch.  Those words whilst different are all consistent with the proposition that this was a redundancy exercise properly so called and no point of law arises from the different words used in relation to the reason for dismissal. 

17	It is true, as the Appellant alleges, that the managing director, Mr Turner does not acknowledge the dismissal of the Appellant in his witness statement but it is also true that he implied by refers to it by using the term “redundant”.  

18	There is then a confusion, which the Appellant permitted me to explain, in the different definitions of redundancy, the one for individual redundancy claims in Section 139 and the other for claims for a collective failure to consult and for a protective award under the Trade Union and Labour Relations Act.  It is only the former that is relevant to his case.  Again the Appellant refers to the letter of 27 June and the words in that letter. 

“As an alternative to accepting redundancy”

19	The Appellant points out he never accepted redundancy and that is at the very best clearly a euphemistic use of words.  The word “accepting” need not have been there, but it does not seem to us to affect the substance of what was happening.  

20	The Appellant then raised some matters as to why he believed he had been dismissed.  In Paragraph 52 onwards those reasons can be summarised as being the response of the Appellant to matters drawn to his attention at that time.  That response included the assertion that the employer had no legal right to change the applicant’s terms and conditions by closing Shoreditch and offering Crawley at reduced pay, the fact that the Appellant refused to accept that other work, the fact that he is of continental European race and a Romanian nationality, and the fact that he enquired about the Equal Opportunities Policy of the Respondents.  He also complained of unfair discrimination on the grounds of race and sex.  He does not seek to allege those as free standing complaints, but says they were relevant to the claim for unfair dismissal.  

21	We cannot accept that proposition because that sort of complaint was abandoned or dismissed and cannot come in, it seems to us, by the back door.  The Appellant had made certain comments about the conduct of the Industrial Tribunal in Paragraph 62 of his skeleton argument.  But he recognised that that was his personal opinion, possibly due to his upset at the time, and that he could not substantiate it and did not effectively wish to pursue it.  

22	Other reasons that were put forward by the Appellant were the merger with the Respondents, the relocation to Crawley, other matters relating to the transfer of undertaking, and that there was therefore automatic unfairness under the Transfer of Undertakings Regulations.  It was pointed out that different words were used to describe that transfer, the Appellant referring to the evidence of the managing director, Mr Turner.

“He was offered the position of a repair technician but this job was on a reduced salary level”.

23	The Respondents maintained there was “a suitable alternative position” but this was a stance apparently not maintained at the hearing by the Employment Tribunal.  It is clear to us that the Respondents, and indeed the Tribunal in their findings noted the offer of alternative work, not as part of the procedure for denying an entitlement for redundancy, but as part of their analysis of whether the Respondents were reasonably treating the redundancy as the reason for dismissal when the matter is viewed in the light of equity and the substantial merits of the case.  In other words, was it unfair?  And the Appellant referred to the definition of “position” in the definition section of the Employment Rights Act 1996, and the need to include within that the terms and conditions of employment. But it does not seem to us that the word “position” had been used as a technical term of art in this case at all.  

24	The Appellant points out that after he expressed his interest in re-locating to Crawley the Respondents were in breach of their contract with him, indeed it is recognised it was a breach of contract in that there was a wrongful dismissal.  

25	There is however, it seems to us, one point of law relating to the allegation of unfair dismissal which is properly arguable in full before the Employment Appeal Tribunal.  In Paragraph 7 of their decision, the Employment Tribunal found:

“The Tribunal accepted that the Respondent had properly concluded that formal consultation was utterly futile”.

26	The notice of termination to which we have referred, the letter of 27 June 1997, was stated to have effect on that very day at a time when the Appellant was on sick leave.  The reasons why the Employment Tribunal found that consultation was utterly futile was because the Appellant knew of the relocation, because the new salary was at a lower scale for reasons which they state,  and thirdly, that the Appellant was the only full-time employee working in the service department at Shoreditch.  

27	It seems to us arguable that in paragraphs 12 and 13 the Employment Tribunal considered the question of “no difference” and utter futility of consultation in relation to the fairness of the dismissal rather than in relation to compensation.  It has been recognised time and again by Tribunals, that where a dismissal was inevitable, the fact of consultation cushions the blow, and it seems to us arguable that an employee may behave differently, when faced with the final choice of leaving or going to Crawley at a reduced salary.  It is arguable that the Employment Tribunal erred in failing to consider all the issues before deferring the utter futility of consultation.

It is arguable that this employee was deprived of the opportunity of changing his mind.  Litigants often change their minds at the door of the court and possibly consultation leads to employees doing the same.  

28	Accordingly, we find that the full hearing before the Employment Appeal Tribunal could consider as a point of law whether the Polkey approach, which the Appellant refers to in his Notice of Appeal, was properly applied by the Tribunal, and whether the Tribunal considered it in relation to compensation so as to decide those well rehearsed elements, for instance as to whether if there had been proper consultation, and even if the end result would have been no different, the employee’s employment might have gone on for a bit longer, or whether he might have changed his mind.  Subject to that we consider that there is no arguable point of law on the point of unfair dismissal.  

29	We turn now to the assessment of compensation.  Apart from the bold assertion of preferring evidence, the evidence was analysed by the Employment Tribunal in Paragraph 8 of the decision and they find;

“The agreement was that he would receive a commission of 10% of the sales value of all successful orders.  This rate was agreed with Mr Tim Collins”.

30	The Employment Tribunal then goes on to refer to two documents as an example of how commission was calculated.  It is the Appellant’s case, which he says he pursued before the Employment Tribunal, that these documents were not true documents.  He has pointed out that whilst dated November 1995, the heading of those documents, which were Page 61 and 62 of the bundle, refer to the company as “Research Engineers, A Division of Telegan Emissions Monitoring Limited”.  And whilst the document is dated September 1995 that heading was not in existence for at least one year, and possibly more than one year, afterwards.  It is also apparent, from looking at another invoice described as a pro-forma invoice at Page 37, that in March 1996 there was a pro-forma invoice from Research Engineers Ltd, making no reference to Telegan Limited.  And also, interestingly, it bears an invoice number numerically lower than that of the invoice relied on by the Respondents.  

31	Bearing in mind the absence of any description by the Tribunal of the reasons for preferring the evidence of the Respondents, to that of the Appellant, it seems to us that there is an arguable point of law on the question of commission, as to whether from the decision of the Tribunal it is possible to determine the way in which they approached the essential, what we are told was the essential evidence in the case.  For there is on the face of it a very curious transposition of dates in those documents to which we have been referred.  

32	Accordingly, we find an arguable point of law as to the way in which the Tribunal approached their findings of fact on the allegation of breach of contract.  Whilst we recognise the enormous burden that preparation of Chairman’s notes imposes upon a Chairman, it seems to us that this aspect of the case cannot be dealt with other than by requesting the Chairman to provide his notes of evidence relating to the claim for breach of contract, and in relation to the calculation of commission or the orders to which such commission should attach.  

33	Accordingly on those two grounds, namely as to the finding that consultation was utterly futile and as to the finding that commission was at the rate of 10%, we permit this matter to be argued in full and we direct that it be listed for a day in Category C that the Chairman’s notes as described be furnished and that skeleton arguments be presented to the Tribunal not less than 14 days before the date listed for the hearing.