Appeal No. EAT/1151/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 February 2001

Before
HIS HONOUR JUDGE PETER CLARK
MR P DAWSON OBE
MR A E R MANNERS

DUNLOP EQUIPMENT LTD	APPELLANT

1) MR A HAMMOND  2) MR R HAMILTON	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING 

	APPEARANCES

For the Appellant	MR T LINDEN
(of Counsel)
Instructed by:
Ms C Hagestadt
Legal Adviser
Engineering Employer's Federation
Broadway House
Tothill Street
London SW1H 9NQ	

JUDGE PETER CLARK

1	This is an employer’s appeal against a reserved decision of the Birmingham Employment Tribunal chaired by Mr R W Hutchinson upholding the employees, Messrs Hammond and Hamilton’s complaints of unfair dismissal.  We shall refer to the parties as “the Company” and “the Applicants”.  

2	Both Applicants were long standing employees of the company.  Mr Hamilton, a capstan setting operator, started in 1963, Mr Hammond, a driller setter operator, in 1989.

3	On 5 November 1999 the board of the Company resolved to implement a limited redundancy programme.  The recognised unions’ representatives were then informed of that decision.  

4	On 8 November Mr Johnson, the Managing Director, issued a notice to the workforce informing them of a proposed 10% reduction in the workforce, then standing at 125 people, during the year 2000.  

5	On 9 November a consultation meeting took place with the trade unions.  Mr Johnson indicated that volunteers for early retirement would be sought and then the Company would define the areas affected and the criteria for selection.  At that stage the Company had identified 8 potential redundancies, including 2 machine operators in the actuator module. 

6	No volunteers came forward, the Company having withdrawn an earlier scheme for enhanced pension rights on early retirement.  

7	On 17 November Mr Davies, the Manufacturing Manager, saw the two Applicants.  He told Mr Hamilton that the machine on which he worked would be removed at the end of the month, and Mr Hammond that the 4 spindle driller on which he worked would be moved to a different area.   Their work would consequently be reduced.  The Tribunal found that a new machine had been ordered in August 1999 but there had been no discussion with either Applicant on the effect of its introduction on their jobs prior to 17 November. 

8	On 19 November Mr Rock, the Quality & Personnel Manager, met with union representatives. The representatives put up various options by way of alternatives to redundancies.  All were rejected then and there.  There was talk of the application of selection criteria. 

9	On 22 November Mr Rock again saw the trade union representatives and went through the selection criteria.  The representatives asked for an open redundancy programme but were told that the selections had already been made earlier that day.  Mr Johnson felt that the selection process attached too much weight to length of service.  The Tribunal found that at that stage the Company had already decided that the selection process would not apply to the Applicants.  Both had long service.  Length of service was one of the criteria used in the selection process applied to other workers.  

10	Mr Rock then looked for vacancies within the group.  

11	Following a meeting with unions on 24 November, both Applicants were seen by Mr Davies the following day.  They were told that a selection process had not taken place because each was in a unique position. Both were told that their redundancy dismissals would take place on 7 December if no alternative position was found.  They were told that they could leave the factory if they wished during the consultation process.  

12	The Tribunal found that the way in which these long serving employees, particularly Mr Hamilton were dealt with was indicative of the Company’s approach.  The workforce staged a walk-out in protest at the redundancies.  

13	Further meetings took place, with Mr Hamilton on 26 November and Mr Hammond and others on 29 November, to explain the Company’s rationale.

14	Further consultation meetings with the unions took place on 1 and 7 December and on 8 December both Applicants were seen and their dismissals confirmed.  

15	Both appealed against dismissal.  Their appeals were heard by Mr Farnell, Financial Controller, on 21 and 22 December.  Mr Johnson played an active part in the appeal, speaking to Mr Farnell prior to the second meeting held on 22 December.  The appeals were dismissed.  The Tribunal found that the appeals were not fairly conducted.  They did not believe that there was any possibility of Mr Farnell overturning what was effectively the Managing Director’s decision.  

16	On these facts the Tribunal concluded:

(1)  that the reason for dismissal in each case was redundancy, a potentially fair reason, but that;
(2)  the dismissals were unfair, applying 98(4) of the Employment Rights Act 1996, because:
(a)  the Company did not give as much warning as possible to recognised unions of the possibility of impending redundancies.
(b)  It did not carry out a proper consultation exercise with the unions.
(c)  The Applicants were arbitrarily chosen for redundancy.
(d)  The individual consultation with the Applicants fell short of what could be expected of an employer with the Company’s resources, dealing with long serving employees.
(e)  No serious effort was made by the Company to examine the Applicants’ skills with a view to retaining them.
(f)  No proper selection process was applied to them.
(g)  The appeal procedure was flawed. 

17	The involvement of the Managing Director who had driven the redundancy process, contraindicated impartiality in Mr Farnell’s consideration of the Applicants’ cases.  

18	In advancing the Company’s appeal, Mr Linden submits first, that the Tribunal failed to apply the range of reasonable responses test to the question raised by section 98(4) of the Act, indeed no reference is made to that test in the course of their reasons.  

19	Secondly, that the Tribunal in a number of respects, substituted its own view, impermissibly, for that of the employer.  He has also added a fair pinch of perversity. We are conscious, as a result of the restatement of the law by the Court of Appeal in Post Office v Foley and HSBC Bank PlC v Madden [2000] IRLR 827, of the need to look closely at a Tribunal’s decision in a case such as this to ascertain whether they have substituted their own view for that of the employer, instead of applying the test of the reasonable employer.  

20	In support of that submission, Mr Linden takes a number of points.  He submits that it was far from arbitrary for the employer, in this case, to separate out the two Applicants who worked on particular machines which were to be disposed of, and thus to treat them differently from other groups of workers who properly fell within a selection pool.  

21	We take the view that it was permissible for the Tribunal to conclude that a reasonable employer would have applied the selection criteria to all at-risk employees, rather than to take out those employees who happened to work on particular machines which were not to be continued with, as happened in this case.  

22	He further submits that the Tribunal’s finding in relation to the internal appeal was perverse in circumstances where the Applicants’ trade union representatives had expressly agreed to Mr Farnell chairing the appeal, in circumstances where the Managing Director had been closely involved in the initial decisions to identify these two Applicants for redundancy.  

23	We take that point, but we bear in mind the Tribunal’s specific finding in the course of their reasons at paragraph 17 that it was between the two appeal meetings that Mr Johnson spoke with Mr Farnell.  It goes, in these circumstances, further than simply being a case of a junior director hearing an appeal against a decision of a more senior director. 

24	Whilst on the topic of the internal appeal, Mr Linden submits that that finding was further perverse in circumstances where there were three appeals arising out of this redundancy exercise - these two Applicants and a third man  - whose appeal was allowed by Mr Farnell.  He  submits that it cannot be right in those circumstances for the Tribunal to conclude that the appeal process was unfair.  

25	We have enquired into the detail of that employee’s appeal, and it appears that his appeal succeeded on a particular factual ground peculiar to him; that is whether or not he had completed a probationary period following his reinstatement, after being made initially redundant in an earlier exercise.  That, it seems to us, is rather different from a finding that in principle the decision to exclude these two employees from the selection pool was unfair.  

26	Further factual matters are raised by Mr Linden but they are, in our view, just that - attempts to re-argue factual points which had been determined by the Tribunal - which is the sole arbiter of fact.  

27	Looking at the matter in the round, we reject Mr Linden’s submission that the Tribunal has here substituted its view for that of the employer.  We think that they applied their industrial know-how in reaching the conclusion that no reasonable employer would dismiss these Applicants in the circumstances as found.  

28	So far as the range of reasonable responses test is concerned, Mr Linden has referred us to the Court of Session decision in Conlin v United Distillers [1994] IRLR 169, but he accepts as the Court of Session found in that case, that a failure by an Employment Tribunal to mention the range of reasonable responses test in their Reasons in not of itself fatal.  The question for us is whether we are satisfied that the Tribunal did in fact apply that test, bearing in mind their reference to the statutory provision in section 98(4); we are so satisfied.  

29	Finally, as to the question of perversity, we are unable to say that this decision, although it may appear to the Appellant to be irrational, is in fact so.  In these circumstances the appeal is dismissed.