Appeal No. EAT/0573/02 SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 May 2003
Judgment delivered on 1 July 2003

Before
HIS HONOUR JUDGE BIRTLES
THE HONOURABLE DR WILLIAM MORRIS OJ
MR J C SHRIGLEY

MR J WHITTLE	APPELLANT

(1) PARITY TRAINING LTD	RESPONDENTS
(2) PARITY SOLUTIONS LTD

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR DANIEL BARNETT
(of Counsel)
Instructed by:
Messrs Ashby Cohen Solicitors
18 Hanover Street
London W1S 1YN	
For the Respondent	MR ANDREW SHORT
(of Counsel)
Instructed by:
Messrs Salans Solicitors
Clements House
14-18 Gresham Street
London EC2V 7NN	

HIS HONOUR JUDGE BIRTLES

Introduction

1	This is an appeal from the decision of an Employment Tribunal sitting at London (Central) on 21 and 22 March 2002.  The decision of the Employment Tribunal was sent to the parties and entered in the register on 25 April 2002.  The Chairman was Mr N Weiniger.

2	The Employment Tribunal added Parity Solutions Ltd as a second Respondent and dismissed Parity Training Ltd from the proceedings.  The Tribunal unanimously decided that Mr Whittle was not unfairly dismissed.

3	The Employment Tribunal’s findings of fact are set out in paragraphs 14 – 37 of its decision and we incorporate those findings of fact in our judgment.  Suffice it to say that the Appellant was employed on 1 January 1998 with Comtec Computer Training Ltd (“CCTL”).  At the end of 1999 CCTL was acquired by Parity Solutions Ltd.  As a consequence all employees of CCTL became employed by Parity Solutions Ltd.  Contracts of employment were issued by Parity Solutions Ltd to their staff, including the Applicant.  All the requirements of employment involving salary management and payment, issuing pay slips, keeping of records, and payment of and accounting for PAYE and National Insurance were conducted by Parity Solutions Ltd.  The Employment Tribunal decided Parity Solutions Ltd was the employer and added it as a party.  It dismissed Parity Training Ltd from the proceedings.  There is no appeal against that decision.

4	The Appellant’s job description made him responsible for the provision, development and maintenance of quality Information Technology systems and services.  This was a support role overseeing the IT system within Parity Training Ltd and the essential purpose was to ensure that the system ran smoothly.  The details of the Appellant’s activities involved first, ensuing the correct infrastructure for a training business was put in place and kept operational, second to manage the provision and setting up of all classroom and training IT requirements, and third to liaise with staff in Parity Solutions Ltd to review current systems and investigate future possible developments.  Though the Appellant had a line manager he was responsible for 17 staff, reporting to him directly or indirectly, at 10 sites within the United Kingdom.

5	Under CCTL the Appellant had operated very successfully.  That organisation had a centralised reporting structure.  The new owners of CCTL carried out their management function by local management.  There were tensions on the merger between the groups and in the re-organisation.

6	By 2001 there was a slow down in the business being done in the IT services industry.  Parity Solutions Ltd decided it was necessary to develop a redundancy programme.  A first redundancy programme in 2000 was inadequate and a further redundancy programme was planned which involved the Appellant.  A third redundancy programme was completed on 13 December 2001.

7	In a period prior to the redundancy programme which affected the Appellant management held meetings to identify opportunities for saving of costs.  One way forward was for the Second Respondent to restructure its management so that all local staff would report to a local manager.  If that procedure was adopted, the Appellant, who was centrally located and who was responsible for a number of different geographic regions, would no longer be required.  The Appellant was informed that his position was at risk of redundancy at a face to face meeting with a Mr McLeod on 17 May 2001 and he was handed a letter confirming that situation.  The letter provided as follows:

“Further to your conversation with your manager, I am writing to confirm that it is anticipated that a number of employees will be dismissed as redundant in ten day’s time.  This potential redundancy situation could affect you.
The purpose of the ten-day period is to provide opportunities for consultation which will include exploring ways of avoiding the redundancy situation and to provide you with help and support in planning for potential redundancy.
Individual consultation will begin immediately.
If we are unable to avoid the redundancy situation and no redeployment opportunities have been identified by 31 May, you will on that date receive formal notice of redundancy to be effective immediately.  Should you be dismissed as redundant, you will receive a redundant payment, the details of which are enclosed.
If you have any queries regarding this letter please speak with your manager, of contact me.”

The letter was signed by Dr Bernard Harvey who was the Resources Director.

8	Shortly after the meeting on 17 May the Appellant was given the opportunity to stay at work or go home.  He chose to go home.  During the consultation period 17 May 2001 to 31 May 2001, Mr McLeod stayed at work for a number of days and made sure that his personal telephone number was available to the Appellant.  In addition, Dr Harvey was available throughout the whole period apart from when he would be out of his office to discharge normal duties from time to time.

9	The Tribunal found that there was no impediment to communications between the Applicant and the Second Respondent because he was able to contact Mr McLeod by 21 May 2001 in relation to an enquiry concerning provision for a training programme.  In turn, Mr McLeod communicated with Dr Harvey and had received a response which he was able to pass on to the Appellant.

10	Despite the Appellant’s evidence, the Employment Tribunal found that he had been notified of the consultation period and:

31	“…had every opportunity, should he have so chosen, to have contacted Mr McLeod or Dr Harvey about any matters he might wish to raise.  He telephoned Dr Harvey on one occasion and in his absence left no message and in particular no request for Dr Harvey to return the call.”

11	The Appellant met Mr McLeod again on 31 May 2001 and was handed a letter confirming that his employment had been terminated forthwith by reason of redundancy.  He was provided with the appropriate monies in lieu of notice and by way of payment of his redundancy payment.  The Tribunal specifically found that during that period the Appellant had not “made any contact about any issue which may arise as a result of his impending redundancy during the consultation period”: decision, paragraph 32.  The Tribunal went on to say this:

33	“Accordingly, the Applicant had been informed of the availability of consultation.  He had been given the opportunity to respond to the matters which had been averted to in the letter referred to above.  He had spoken with Mr McLeod at the meeting on the same day as the letter was given to him.  He had been taken through the redundancy briefing and had an explanation of the background and reasons for redundancy, and why he was at risk.

12	The Tribunal went on to accept the Second Respondent’s evidence that there was no suitable alternative employment for the Appellant, although they did make the following findings of fact at paragraph 36 of their decision:

36	“Dr Harvey, as the human resources manager, did consider alternative for the Applicant but he could identify no position within Parity Solutions Ltd or indeed any other of the companies within the group which would appear to him to be suitable.  No enquiry was made by the Applicant to see if there were any positions which might be available in any part of the group, or which the Applicant himself might consider to be suitable.”

13	Mr Daniel Barnett of Counsel represented the Appellant at the Employment Tribunal and before us.  Mr Barnett made a submission to the Employment Tribunal that there was no fair consultation process.  In particular, there was a complete failure to look at the question of suitable alternative employment, either properly or at all.  The Employment Tribunal recorded Mr Barnett’s submissions at paragraphs 42 – 50 of its decision.  The Tribunal rejected that submission in paragraphs 70 – 71 of its decision, where it said this:

70	“The duty on an employer is only to take reasonable steps, not to take every conceivable step possible, to find the employee alternative employment.  We accept the argument of Mr Short based on a proposition elicited from Barratt Construction Ltd v Dalrymple, cited, that where an employee at senior management level who is being made redundant is prepared to accept a subordinate position, he ought, in fairness, to make this clear at an early stage so as to give his employer an opportunity to see if that is a feasible solution.  In the present case, no approach was made by the Applicant to his employers to indicate that he might consider a subordinate position and the first time that was intimated to the Respondent was in the present hearing when the Applicant gave evidence that there was a 90% chance that he might accept such a position.  Accordingly, there can be no criticism of the Respondent for failing to offer the subordinate positions which were dealt with in evidence at the hearing.
71	In the present case, the Respondent did conduct with the employee himself which was adequate in the overall context of fairness.  The procedure by which the Respondent determined to treat the Applicant’s position as a stand-alone redundancy was not outside the range of reasonable practice a reasonable employer could have taken.  Accordingly, the selection criterion applied for the Applicant was reasonable and had been reasonably applied in the Applicant’s case.  Further, we conclude that the employers had taken reasonable steps to find the Applicant alternative employment by considering alternative solutions within the group of companies of which Parity Solutions Ltd formed part and that there were no suitable alternatives available and that the positions which the Applicant identified were reasonably treated by the Respondent as not being suitable in view of the fact that at no stage did the Applicant indicate to his employers that he might accept a subordinate position.”

The Notice of Appeal

14	There was a Preliminary Hearing on 3 September 2002 before a different Employment Appeal Tribunal.  In a short judgment Mr Recorder Burke QC (as he then was) identified two points of law in the Notice of Appeal which he permitted to go forward to a full hearing.

15	Mr Barnett has abandoned his ground of appeal that the decision in Barratt Construction Ltd v Dalrymple [1984] IRLR 385 is contrary to the principle of stare decisis in that it did not take account of the earlier decision in Abbotts and Standley v Wesson-Glynwed Steels Ltd [1982] IRLR 51.

16	The only ground of appeal for us to decide is therefore whether the Employment Tribunal erred in law in allegedly elevating the proposition cited from Barratt, set out in paragraph 70 of its decision into an incontrovertible rule of law.

17	The Second Respondent was represented by Mr Short.  He submitted that a careful reading of paragraphs 70 – 71 of the Employment Tribunal decision made it clear that the Employment Tribunal was not there setting out a rule of law to apply in every case. However, he submitted that the Tribunal were not precluding from applying the reasoning of Barratt to the facts of this particular case.  That did not constitute an error of law.

18	During the course of the hearing, the Employment Tribunal drew the attention of Counsel to the unreported judgment of another Employment Appeal Tribunal in R N Hall v Times Furnishing Co Ltd (Judgment 22 January 1998), and invited written submissions on that case.  Both Counsel have provided written submissions for which we are grateful.

Employment Appeal Tribunal Decision

19	The starting point in this case is section 98 (4) of the Employment Rights Act 1996, because redundancy was not an issue in the case.  The Employment Tribunal correctly directed itself that it had to consider the circumstances in which the redundancy process might be unfair: decision paragraph 60.

20	The Employment Tribunal took account of and set out the standards of guidance given by the Court in William v Compair Maxam Ltd [1982] IRLR 83, decision paragraph 61.  As the Employment Tribunal correctly said “…these are guidelines only and in the present case there is no union involved”: paragraph 62.
21	In our judgment there is no error of law by the Employment Tribunal in this case.  A careful reading of paragraphs 70 – 71 of the Employment Tribunal decision make it clear that the Employment Tribunal concluded that:

71	“…the employers had taken reasonable steps to find the Applicant alternative employment by considering alternative solutions within the group of companies of which Parity Solutions Ltd formed part and that there were no suitable alternatives available and that the positions which the Applicant identified were reasonably treated by the Respondent as not being suitable in view of the fact that at no stage did the Applicant indicate to his employers that he might accept a subordinate position.”

22	At paragraph 70 the Employment Tribunal correctly set out the fact that the duty of the employer in this situation is only to take reasonable steps:

70	“...not to take every conceivable step possible, to find the employee alternative employment.”

23	In this case (“the present case”) the Employment Tribunal accepted a submission that:

70	“where an employee at senior management level who is being made redundant is prepared to accept a subordinate position, he ought, in fairness, to make this clear at an early stage so as to give his employer an opportunity to see if that is a feasible solution.”

24	In the present case the Employment Tribunal specifically found as a fact that despite the opportunity to consult with Mr McLeod and Dr Harvey, this Appellant made no attempt to take up the offer of consultation or indicate that he was in any way prepared to accept a subordinate position.  What was particularly telling in this case was that the first knowledge the Respondent’s had of the Appellant’s willingness to consider a subordinate position was when he gave evidence at the Employment Tribunal itself.  On the facts of this case we can see no error of law and the appeal is therefore dismissed.

25	In conclusion, we do not seek in any way to suggest that Barratt Construction Ltd v Dalrymple is wrong in law on its facts.  Neither do we suggest that Abbotts and Standley v Wesson-Glynwed Steels Ltd is other than correct on its facts.  Neither decision suggests that it was attempting to lay down a general principle or proposition of law.  What we can say is that the further up the ladder of authority an employee is, a reasonable employer is entitled to expect something of a more proactive approach once the opportunity for consultation is given.  One would not expect that in the case of a junior employee or one with relatively short service.  The critical factors are first, the opportunity of consultation (given in the present case) and, second, the fact that the employer has looked at the possibility of redeployment in the company or within any associated company (also done here).

26	For completeness sake we refer to the submissions made in R N Hall v Times Furnishing Co Ltd but, as both Counsel acknowledge, the facts of that case are a long way from those of the present case.  We find no assistance in that case in reaching our decision.

27	For these reasons the appeal is dismissed.