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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Kilgallon & Ors v Pilkington United Kingdom Ltd [2004] UKEAT 0771_03_1106 (11 June 2004) URL: http://www.bailii.org/uk/cases/UKEAT/2004/0771_03_1106.html Cite as: [2004] UKEAT 0771_03_1106, [2004] UKEAT 771_3_1106

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APPEARANCES

 

For the Appellants	MR JAMES STARK (of Counsel) Instructed by: Messrs Thompsons Solicitors Martins Buildings Water Street Liverpool L2 3SX
For the Respondent	MR PAUL GILROY (of Counsel) Instructed by: Pilkington Plc Group Legal Department Prescott Road St Helens Merseyside WA10 3TT


 


HIS HONOUR JUDGE BIRTLES

Introduction

1. This is an appeal from the decision of an Employment Tribunal sitting at Liverpool on 16-17 September 2002, 29-30 May 2003 and 3 June 2003. The Summary Reasons were sent to the parties and entered in the Register on 18 June 2003. The Extended Reasons were sent to the parties and entered in the Register on 15 July 2003. The Employment Tribunal unanimously decided that the claims for unfair dismissal and breach of contract should be dismissed.

The Material Facts

2. The material facts are set out in paragraph 6 of the decision which says this:

"6. In the light of the evidence both oral and documentary, and on the balance of probabilities, the Tribunal finds that the relevant facts with regard to the issues are as follows: -

(i) The applicants were employed by the respondent from various dates until 30 September 2001, as Supervisor/Mechanical Engineer, Shift Supervisor, Production Glassmaker (Float), Hot End Operator (Glassmaking) and Shift Supervisor respectively, at the respondent's Greengate Site in St Helens, Merseyside.

(ii) In 1999 volunteers for redundancy within the Float Manufacturing Division of the respondent were sought in the hope that the reduction required in the workforce could be achieved by the end of March 2000, but insufficient volunteers came forward.

(iii) A proposal to offer secondment to a new Float line in Sagunto, Spain was suggested by the respondent, the proposal being that any employee within the Float Division accepting such secondment would leave the Company on voluntary redundancy terms. In September 1999 Mrs Jolley took on responsibility for that project.

(iv) On 12 August 1999 a Works Notice was placed on notice boards offering the secondment opportunities, and a further Works Notice giving more details was issued on 22 September 1999. The terms of the secondment included an increase of salary during the secondment, a further bonus on completion of the secondment, accommodation and other benefits, but secondment was conditional upon the employees agreeing to leave the Company on voluntary redundancy terms, either prior to or on completion of the secondment and also on undertaking Spanish language training. An initial period of secondment of 12 months was contemplated but was later changed to a maximum of 18 months. There was a possibility that the seconded employees would be offered permanent employment in Sagunto under Spanish terms and conditions.

(v) There was considerable interest in the secondment opportunities but that diminished when Mrs Jolley explained that the whole point of the exercise was to reduce the numbers within Float Division, and secondees would be required to leave the Company on voluntary redundancy terms at the end of the secondment, which considerably reduced the number of those interested.

(vi) Eventually 14 employees, the applicants being included in that number, applied for the secondment and all were accepted.

(vii) A "Sagunto secondment offer" letter was sent to the applicants, who counter-signed a copy agreeing and accepting that secondment and the terms and conditions as set out. An example dated 14 December 1999 is the letter to Mr Kilgallon, pages 64-70 in the bundle of documents. This sets out the offer of secondment in Sagunto as a leading line operator for 18 months, with effect from 13 March 2000, as then expected. Continued employment by the respondent was a term of the offer which was expressly conditional, in paragraph 4 of the letter, upon his "agreement to leave (the respondent), on Voluntary Redundancy terms, at the end of your secondment. Your redundancy benefits will be calculated on your age, length of service and UK notional salary as at the end of your secondment." Paragraph 5 of the letter states "the Company's agreement to you leaving on Voluntary Redundancy terms on this date is conditional upon the following: - (a) you complete the full period of the secondment, (b) you attend work regularly during the period of your secondment, (c) you demonstrate satisfactorily performance and conduct during the period of your secondment". Paragraph 6 provides "should you fail to satisfy any of the above, the Company reserves the right to terminate your secondment earlier than the agreed date, and to bring forward the date of your voluntary redundancy. In these circumstances your redundancy benefits would be based on your age, length of service and salary, at that point in time". In addition to other relevant details numbered paragraph 4 entitled "on completion of the assignment" provides: -

"(i) Incentive bonus

Following the successful completion of the first 12 months of your secondment you will receive an incentive bonus of 10 per cent of your basic salary. You will receive a further pro-rata incentive bonus of 10 per cent of your basic salary on successful completion of the remaining 6 months of your secondment.

(ii) Employment Opportunities

You have agreed to leave the Company on Voluntary Redundancy terms at the end of your secondment. It is possible that Glapilk A. I. E. may offer you employment, on Spanish terms, at the end of your secondment, but the Company can give you no guarantee regarding this. Should there be any other opportunities for further employment within Pilkington at the end of your secondment, you will have the opportunity to be given full consideration (the Chairman's italics). There are additional clauses as to moving expenses and transportation of personal effects."

(viii) The secondment commenced in March 2000. On 13 July 2000 Mr Jones returned to the UK, on sick leave. Mrs Jolley met with Mr Jones and his wife and confidential counselling was offered. Mr Jones and his wife were concerned as to the options available should he not return to Spain and Mrs Jolley pointed out that in accordance with the secondment agreement it may result in his employment terminating earlier than anticipated and arrangements were made for Mr Jones to see the Company Doctor, which took place on 26 June 2000, the Company Doctor being of the opinion that Mr Jones was suffering from reactive anxiety caused by his difficulties in settling in Spain. On 1 August Mrs Jolley met with Mr Jones and his Union representatives, who asked if consideration had been given to finding alternative work opportunities for Mr Jones, who did not wish to return to Spain. Mr Jones and his Union representatives accepted that under the secondment agreement Mr Jones was committed to taking voluntary redundancy at the end of the secondment and the respondent had the right to bring forward his leaving date if he did not complete the secondment. Temporary employment was offered and on 12 January 2001 Mrs Jolley wrote to Mr Jones confirming a leaving date of 31 March 2001, but in the event temporary employment was extended and Mr Jones continued to be employed by the respondent until 30 September 2001, helping to cover for long-term sick employees at the Greengate site.

(ix) The second part of paragraph 4(1.1) of the secondment agreement was inserted at the instigation of the secondees and/or their Union representatives. No evidence was given to the Tribunal as to the identity of the parties' representatives who negotiated that sub-clause, nor by whom it was drafted, nor as to the precise intention of the parties. However it was only as a result of adding the clause that the respondent obtained a sufficient number of employees to allow the secondment to go ahead.

(x) In December 2000 the secondees were asked by Sagunto Management if they wished to be considered for permanent employment in Spain, but they did not wish to be considered, apparently for economical reasons. In late August 2001 Mrs Jolley travelled to Spain to speak to the secondees to confirm their leaving date, details of payments they would receive on the termination of their employment, and to discuss arrangements for their return. In the event because of production problems no such meetings or discussions took place with the applicants. Mrs Jolley provided a letter confirming the termination dates and payments. Mrs Jolley had explained to other secondees that no suitable job opportunities existed for further employment with the respondent, but it was prepared to offer out- placement support to help them find jobs outside Pilkington. At that stage no representations were made by or on behalf of the applicants/secondees, which did not occur until after 30 September 2001.

(xii) Vacancies were filled within the Company business in 2001 for the positions of Instrument and Control Engineer, and Engineers and Programmers within the Research and Development area of the respondent's European Technical Centre at Lathom, those positions having been displayed on the Company website. Those selected were professional engineers, a requirement being that such engineers were chartered members of their relevant engineering institution and who had current and extensive experience in the relevant field. If not so chartered at that stage the Company required that applicants should be actively working towards membership with current and extensive experience giving a high probability of early success. None of the applicants satisfied those criteria.

(xiii) On 29 December 2000 Mr Smith wrote to Mrs Jolley asking to be notified of any vacancies with the respondent which became available but he was never contacted to be asked about any vacancies or opportunities of further employment. As to the offer to Mr Smith of permanent employment with Glapilk, Mr Smith did not consider the offer was reasonable and he did not wish to be considered on the terms offered. Mr Smith received a letter dated 22 August 2001, document 95 in the bundle. It contains no mention of any alternative vacancies nor attempts to make efforts to find employment for Mr Smith in the respondent Company. Mr Smith considers he could have easily slotted into the work being carried out by the agency staff supplied by CND Contracting Limited to the respondent.

(xiv) The respondent has a recruitment policy which had been negotiated with the approval of the Unions, under which ex-apprentices who were carrying out work for the respondent were prioritized when employment vacancies occurred. On a date in August, probably 21 August 2001, Mr Halsall raised with Mr P McKeon (Float Manufacturing Manager) the fact that 3 full-time vacancies had been become available which Mr Halsall felt should be given to his members who were coming to the end of their secondment terms in Spain, in particular pursuant to Clause 4(ii). Mr McKeown responded that the 3 ex-apprentices were to be slotted into the 3 available positions. That position remained unchanged, Mr Pilling echoing Mr Halsall's decision. It seems the ex-apprentices were given fixed-term contracts with the respondent.

(xv) On 30 September 2001 the employment of all the applicants by the respondent was terminated, that being the effective date of termination. Subsequently, they received a redundancy payment, with enhancement.

(xvi) On 5 October 2001 Mr Kilgallon had an appointment with Mr P Case in the Human Resources Department and there met Chris Newitt (an Engineer) who mentioned that he was being interviewed that afternoon for the post of Instrument and Control Engineer. Richard Kells (a Production Technician) (? and/or a Mr Martland) was also present and Mr Kilgallon realised that these positions must have been advertised during September for interviews to be held on 5 October 2001. He raised this with Mr Case who said it was nothing to do with him and he knew of no available employment. The meeting concluded unsatisfactorily in Mr Kilgallon's opinion. Mr Kilgallon considers he could have carried out the 3 jobs filled by the ex-apprentices and the agency work.

(xvii) On 17 October 2001 a meeting took place between Mr G Patterson and Mr E Halsall on behalf of the applicant's Union, and Mr Pilling (Human Resources Manager). Despite their representations, in particular as to the use of agency staff and the filling of vacancies by ex-apprentices, reliance being placed on a Work's Notice dated 19 October 2001, none of the applicants were offered employment, re-engagement or continued employment by the respondent.

(xviii) The respondent has a written Redundancy Policy (pages 190- 191)."

The Employment Tribunal Decision

3. The Extended Reasons are in conventional form. The issues are clearly defined in the decision at paragraph 5 as follows:

"5. The issues between the parties were relatively clear-cut. By way of summary, on various dates in November and December 1999 the applicants had countersigned letters from the respondent agreeing and accepting secondment to a plant at Sagunto in Spain, on the terms and conditions set out in the letters. The fourth paragraph of the letters states, "This offer is conditional upon your agreement to leave PUKL (Pilkington UK Limited), on Voluntary Redundancy terms, at the end of your secondment". Clause 4(ii) states, "Should there be any other opportunities for further employment within Pilkington at the end of your secondment, you will have the opportunity to be given full consideration". The applicants rely on Clause 4(ii) as the basis of their claim for breach of contract by the respondent. The respondent relies on the fourth paragraph as being the reason for the dismissals (i.e. voluntary redundancy and/or some other substantial reason). Those are the categories of the reason for dismissal for the purposes of Section 98 of the Employment Rights Act 1996."

4. The facts are set out in paragraph 6 (as above); the parties' submissions are set out in the decision at paragraphs 8-10 and its conclusions are set out at paragraphs 11-12. There the Tribunal say this:

"11. The Tribunal reserved its decision not least because of the late hour on the fourth day of the hearing. The unanimous decision of the Tribunal is that both complaints of all applicants are dismissed. As to the breach of contract claim it was considered that Clause 4(ii) is arguably not sufficiently certain to be enforceable. However, construing the clause as drafted, the Tribunal considered the following issues, and decided each as indicated: -

(i) Were there other opportunities? - The answer is in the affirmative, the phrase "the end of your secondment" being assumed to be towards the end of September 2001, and 30 September 2001 at the latest.

(ii) Were the applicants entitled to the opportunity to be given full consideration? - The answer is in the affirmative.

(iii) Did the applicants have the opportunity? - The answer is in the negative.

(iv) Were the applicants entitled to be given full consideration for any other opportunities for further employment? - The answer is in the negative, the respondent was only obliged to give the applicants the opportunity. The respondent was in breach to the extent that they did not give the applicants the opportunity, for example by informing them of the opportunities, but no more.

(v) Would the applicants have been offered further employment if given other opportunities and given full consideration? - This is a matter of speculation, but having regard to the agreed policy regarding ex-apprentices and Mr Snowdon's requirements for the Instrument and Control Engineer vacancies referred to at page 193 of the bundle, this has not been established by the applicants to the satisfaction of the Tribunal and accordingly the answer is in the negative. It must follow that therefore the applicants cannot establish any loss or any entitlement to compensation for breach of contract, and that claim is accordingly dismissed.

12. As to the alleged unfair dismissals, the Tribunal decided unanimously that the dismissals were on the ground of redundancy. There is no doubt but that there was a redundancy situation at the end of 1999, and the applicants volunteered - but the date of termination of their employment was delayed by agreement because of the secondment to Spain, which was also by agreement. In those circumstances neither selection nor consultation are relevant matters, but consultation is only ever a part in considering the reasonableness of the procedure, and is not determinative of the issue; further consultation on redundancy towards the end of the employment would not have affected the position, particularly in view of the fourth paragraph of the secondment letters. Furthermore even if there had been consultation which had prolonged the employment by a few weeks the applicants cannot be said to have suffered any financial loss, having regard to the enhanced terms which they accepted. Looking broadly at the matter even if, which the Tribunal does not consider to be the case, there are shortcomings they are not viewed as so serious as to render the dismissals unfair. In short the dismissals were on the ground of redundancy, by earlier agreement, and were fair."

The Grounds Of Appeal

The Notice of Appeal

5. The Notice of Appeal drafted by Mr Stark contains 17 separate grounds of appeal. However, Mr Stark's Skeleton Argument and his oral submission have helpfully reduced those grounds of appeal to a more manageable number. We propose to deal with those grounds of appeal in the order in which they were argued by the parties before us.

Ground 1

6. In respect of the unfair dismissals Mr Stark submits that there was a failure to consult (a) at the date when the secondment agreements were signed, i.e. November/December 1999 and (b) prior to the dismissals themselves. The failure to consult in each case is a failure to consult in respect of (i) whether or not there was a redundancy situation and (ii) suitable alternative employment. The Appellants conceded at the Employment Tribunal that they could not raise the issue of unfair selection.
7. In those circumstances it is difficult to see how there can be consultation on the issue of whether or not there was a redundancy situation. Indeed, a close reading of the Employment Tribunal decision and the associated documents makes it quite clear that that was not the Appellants' case before the Employment Tribunal. Indeed, we understand the Appellants' case on consultation before us to be a failure to consult with the individual Appellants about suitable alternative employment, as well as considering whether or not such suitable alternative employment existed in fact. We do not understand it to mean consultation about (a) the issue of whether or not there was a redundancy situation and (b) the selection process.
8. There is no doubt that the principles of consultation and suitable alternative employment apply both to voluntary as well as compulsory redundancies: Cole v Hackney LBC (EAT/973/99 unreported 17 October 2000, Mr Recorder Langstaff QC). In our judgment the Employment Tribunal did not find that the ordinary principles of consultation and suitable alternative employment only applied to compulsory redundancy. That is a misreading of paragraph 12 of the decision. What the Tribunal is saying is that the fact that the Applicants volunteered for secondment to Spain in order to avoid a redundancy situation at the end of 1999 is a factor which they are entitled to take into account in considering the issue of reasonableness under section 98 (4) of the Employment Rights Act 1996. We agree.
9. Turning to the alleged failure to consult in 1999, we cannot accept Mr Stark's submission. First, we note that this was some 18 months before the dismissals actually took effect. There clearly was consultation at that time because of the Appellants' interest in the Works Notices which triggered an explanation by Mrs Jolley: decision paragraph 6 (iv) and (v). The agreement itself contained clause 4 (ii) (set out above) which was specifically inserted in the agreement at the request of the Appellant secondees and/or their union representatives: decision paragraph 6 (ix). Each of the Appellants signed the agreement before going on secondment to Spain. We cannot accept any more than the Tribunal did that the Appellants did not know exactly what they were signing on the dates that they were signing: decision paragraph 6 (v) and (vi).
10. The question of alternative employment in 1999 did not arise because the Appellants were going to Spain. In any event, the wording of clause 4 (ii) of the secondment agreement is not an offer that the Appellants will be offered further alternative employment at the end of their secondment but:

"Should there be any other opportunities for further employment within Pilkington at the end of your secondment, you will have the opportunity to be given full consideration."

In our judgment these factors more than satisfy any requirement to consult in 1999, as well as dealing with the question of suitable alternative employment.

11. We turn to the alleged failure to consult about suitable alternative employment in the period leading up to 30 September 2001 which was the date of the dismissals when the secondment period in Spain ended. In our judgment there was again no distinction in the Employment Tribunal's language between a voluntary and a compulsory redundancy: this is simply a misreading of what the Tribunal said.
12. It is necessary to look at both paragraphs 11 and 12 of the Employment Tribunal's conclusions. They deal with the issue of consultation in 2001 in paragraph 11 and focused upon the secondment agreement itself and in particular clause 4 (ii). They pointed out precisely what the Appellants had signed up to when they took the offer of secondment in 1999 in order to avoid redundancy at that time. What the Respondent had agreed to do was to give the Appellants full consideration for any other opportunities for further employment. The Employment Tribunal specifically found that the Respondent had breached that obligation but that it was a matter of speculation as to whether or not the Appellants would have benefited if the Respondent had complied with that obligation: decision paragraph 11 (iv) – (v).
13. Although those findings were in relation to the breach of contract claim, it is quite clear, when one reads paragraph 12 of the decision, that the Employment Tribunal took those findings into account in relation to the unfair dismissal claim and specifically said:

"…further consultation on redundancy towards the end of the employment would not have affected the position, particularly in view of the fourth paragraph of the secondment letters."

That is an express reference to clause 4 (ii) which they had just analysed in paragraph 11. That finding specifically refers back to the Respondent's recruitment policies relating to the employment of ex-apprentices having priority (a policy agreed with the unions): decision paragraph 6 (xiv); the fact of other posts being available which the Tribunal found these five Appellants were not suitable for: decision paragraph 6 (xvi) – (xvii). It follows that in our judgment the Employment Tribunal did not commit an error of law in failing to find that there was an inadequate consultation process here.

Ground 2

14. The second ground of appeal is that the Tribunal erred in law in finding that further consultation on redundancy towards the end of the employment would not have affected the position. In other words, further consultation would be futile. In our judgment that is a matter of fact for the Employment Tribunal which heard substantial oral evidence from both sides: decision paragraph 4, read a bundle of documents as well as other documentation submitted during the hearing: decision paragraph 4. The whole hearing took several days.

Ground 3

15. The third ground of appeal is that there was a failure to consider the Respondent's duty to find alternative employment for these five Appellants. The submission is that the Employment Tribunal did not make any findings at all on this issue in paragraph 12 of its decision. In support of this submission Mr Stark refers us to Langston v Cranfield University [1998] IRLR 172. In particular he points us to the principles set out by His Honour Judge Peter Clark at paragraph 27 – 34. We obviously accept what Judge Peter Clark said in the Langston case, but in our judgment it is implicit in the conclusions of the Tribunal in paragraph 12 that it had considered the question of alternative employment. In our judgment that is implicit in the sentences:

"…further consultation on redundancy towards the end of the employment would not have affected the position, particularly in view of the fourth paragraph of the secondment letters. Furthermore even if there had been consultation which had prolonged the employment by a few weeks the applicants cannot be said to have suffered any financial loss, having regard to the enhanced terms which they accepted. Looking broadly at the matter even if, which the Tribunal does not consider to be the case, there are shortcomings they are not viewed as so serious as to render the dismissals unfair."

16. That passage has to be read in the light of the specific findings of fact made by the Tribunal as to what job opportunities were available to the Appellants in late 2001: decision paragraphs 6 (xii) – (xiv) and (xvi) – (xvii). In our judgment the Employment Tribunal did consider the question of alternative opportunities for employment for these Appellants and having carefully considered the facts decided that none of the vacancies were suitable or appropriate for them despite the Appellants' claims.

Ground 4

17. The next ground of appeal is that the Employment Tribunal confused or conflated the rule in Polkey v A E Dayton Services Ltd [1988] AC 344. The reference here is to paragraph 12 of the decision (which we have set out above). In our judgment this is a wrong analysis. What the Employment Tribunal were saying is that on the facts which it found in relation to job opportunities, further consultation would have made no difference as there were simply no suitable jobs available for the Appellant taking account of the policies of the Respondent and the jobs available. The sentence beginning "Furthermore…" is no more than a completely valid statement of the fact that even if consultation had continued over job opportunities (whether the same or others) and no jobs had been found which might have rendered the dismissal unfair would have made no difference in financial terms because of the substantial redundancy payments already made to the Appellants. Those redundancy payments would have liquidated any award made for unfair dismissal by the Employment Tribunal. We can see nothing wrong in the Employment Tribunal pointing this out in its decision.

Ground 5

18. The fifth ground of appeal is that there was no finding by the Employment Tribunal that there was any or any adequate consideration given to finding or looking for alternative employment. For the reasons already given, we find there is no substance in this ground of appeal.

Ground 6

19. The sixth ground of appeal is that the Employment Tribunal made certain errors in its findings of fact. These are set out in paragraphs 13-15 of the Extended Reasons. Suffice it to say that we have carefully considered Mr Stark's submissions and we find no error of fact as he alleges. In any event, in our judgment, they are not material and do not affect the result.

Ground 7

20. Ground 7 is a general submission that the Employment Tribunal has given inadequate reasons. Mr Stark relies on the well known cases of Meek v City of Birmingham District Council [1987] IRLR 250 and Tran v Greenwich Vietnam Community Project [2002] IRLR 735. While we accept that the Employment Tribunal could have given lengthier reasons than it does in paragraphs 11 and 12 of its decision, in our judgment there is no difficulty in either party understanding why they lost or won.
21. Mr Stark adds to that primary submission the fact that the Employment Tribunal stated in its summary reasons that in addition to redundancy the dismissal was for some other substantial reason. That does not appear in the Extended Reasons and Mr Stark relies on that as evidence that the Employment Tribunal has failed to address its mind correctly to the issues in this case. We decide this case by looking at the Extended Reasons and indeed we note that in his Skeleton Argument Mr Stark abandons a separate ground of appeal in relation to the Summary Reasons. We find no substance in this ground of appeal.
22. We now turn to the ground of appeal in relation to breach of contract.

Ground 8

23. This ground is that although the Employment Tribunal found that the Respondent was in breach of contract: decision paragraph 11, it did not go on to find that the Appellants had thereby lost a chance to be given full consideration for other opportunities and therefore award damages for that loss of a chance: decision paragraph 11 (v). In our judgment there is nothing in this ground of appeal. It is quite clear on a fair reading of paragraph 11 (v) that the Employment Tribunal concluded as a fact that the Appellants could not establish any loss, whether in fact or of a chance.

Conclusion

24. For these reasons this appeal is dismissed.