Appeal No. UKEAT/0171/11/LA

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

		At the Tribunal
		On 6 February 2012

Before
HIS HONOUR JUDGE McMULLEN QC
MS K BILGAN
MRS D M PALMER

MR R HALPIN	APPELLANT

SANDPIPER BOOKS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR R HALPIN
(The Appellant in Person)	
For the Respondent
	Written Submissions	

SUMMARY

UNFAIR DISMISSAL – Reasonableness of dismissal
REDUNDANCY - Fairness

Since the Claimant was the only employee based in China, the Respondent’s decision to make the post redundant could only be based on a “pool of one”.  Decisions as to pools and criteria are matters for management and an Employment Tribunal will rarely interfere with them.  The Employment Tribunal correctly dismissed the challenge to the fairness of the decision based solely on the question of “the pool”, an elusive concept where only one relevant employee is involved.

HIS HONOUR JUDGE McMULLEN QC

1.	This case is about unfair selection for redundancy.  It is the Judgment of the court to which all members appointed by statute for their diverse specialist experience have contributed.  We will refer to the parties as the Claimant and the Respondent.

Introduction
2.	It is an appeal by the Claimant against a Judgment of an Employment Tribunal sitting at London South under the chairmanship of Employment Judge Tsamados, sent with Reasons on 14 October 2010.  The Claimant did not attend; the Respondent was represented by a consultant.  He had been employed for just over two years, but was working at the relevant time in China. The first issue which arose out of an earlier hearing was whether the Tribunal had jurisdiction. It did. The Claimant contended that he was unfairly selected for redundancy.  The Respondent said that he was the only person working in China, and the need for employees to do that work had ceased or diminished.

3.	The Employment Tribunal upheld the Respondent’s case. The Claimant appealed, and the matter was considered initially on the sift by Underhill P, who doubted whether there was anything in the case but, without the documents, felt that a preliminary hearing was necessary.  At that preliminary hearing, before HHJ David Richardson and members, most of the appeal was dismissed, many subsidiary issues having been raised by the Claimant, but one issue was set out for determination at a full hearing.  It is this (ET Judgment, paragraph 41):

“The Claimant was fairly selected in a [sic] far as he was in a pool of one given his unique position dealing solely with sales and based in China.” [in so far as substituted]

The legislation
4.	The Employment Tribunal set out the legislation, as to which there is no dispute.  Section 139 of the Employment Rights Act 1996 defines redundancy, section 98(2) deals with the reason for dismissal (here, redundancy), and section 98(4) with fairness.  The correct approach to dealing with redundancies is set out in Williams v Compair Maxam [1982] ICR 156, which the Tribunal cited.

The facts
5.	The Tribunal introduced the parties to us in the following way:

“6. The Respondent is a book distributor and its main business is through catalogue sales within the UK.  The business is run from its office in London and distribution centre in Devon.  The Respondent also sold books in Europe and the United States.
7. In 2008, Mr Collie, the Respondent’s Managing Director, made the decision to look into the prospect of selling books within the Chinese market.  In order to do this, the Respondent would have to acquire local knowledge as to the market and work closely with distributors on the Chinese mainland.
8. The Claimant was employed by the Respondent from 23rd August 2007 to work at its London office as an Administrator/Analyst.  Mr Collie, had identified the Claimant as having considerable potential, particularly given the additional benefit of his experience having spent a year in China teaching English as a foreign language.  This was reflected in paying the Claimant a higher salary.  The Claimant was promoted quickly in order to give his responsibilities that were challenging.”

6.	During the early days of the Claimant working in China he continued to do some of the work that he had done in the UK, and the Tribunal made the following relevant findings:

“9. Whilst working the UK, the Claimant carried out analysis of the Respondent’s mail order sales, but this work had generally been completed by the time he was moved to China.  When the Claimant was working in the UK the Respondent’s other administrators were working on separate administrative tasks.
[…]  
12. The Claimant’s principal duties were to liaise with the local international book importers and distributors in order to raise the Respondent’s profile there.
[…]  
14. Whilst the position in China was evolving, the Claimant undertook some administrative and analysis work.  The administration work took less than 1 day per month, the campaign work and analysis work from between one to three days per week to begin with, diminishing as time went on to less than a day and a half a week […].
15. Whilst in China, some of the administrative tasks that the Claimant otherwise had undertaken were redistributed to staff in the UK because of the practical difficulties of the difference in time between China and the UK.  Otherwise, the administrative staff in the UK took telephone orders and undertook process work and the Claimant was not involved in that side of the work at that level at all.
16. In any event, the main body of analysis work had been completed by the Claimant before he left for China and with the redistribution of administrative tasks throughout the Respondent company, the Claimant was left with very little administrative work to do when not devoting himself to developing sales in that country.”

7.	In due course a decision was taken as to the work being done in China, and, as the Tribunal put it, a management decision was taken by Mr Collie.  The Tribunal said the following:

“20. Mr Collie therefore took the decision to put the sales management position in China at risk of redundancy.  His view was that it might be possible to have the role undertaken locally by an already existing agency which would work for the Respondent on a commission basis only.  In other words the work was outsourced.  In effect the Claimant’s position was surplus to the Respondent’s requirements.
21. Mr Collie believed that using established Chinese agents would give the Respondent a better chance in the Chinese market.  The Claimant’s language skills were not as extensive as required and he was still having Chinese lessons paid for by the Respondent.  It was much easier for locally known and trusted book agents to deal directly with the book importers, colleges and institutions, in order for the Respondent to establish a market position in the country.”

8.	There was extensive consultation with the Claimant. The outcome was that although the Respondent offered alternative solutions to the problem, which included what became an offer of two days’ work a week on administration and analysis in Devon, the Claimant refused the work.

9.	The Tribunal’s conclusions are concise:

“36. The Respondent has shown us that the potentially fair reason for the Claimant’s dismissal was redundancy within section 98(2)(c) ERA 1996.
37. We are also satisfied that there was a genuine redundancy situation within s139(1)(b)(ii) ERA 1996.  The Respondent no longer had a requirement for work of the particular kind in the place where the Claimant was employed, namely to promote sales based in China.  This was the major part of the Claimant’s role, the remaining administrative and analysis work was of an insufficient amount to justify a full‑time or part‑time position within China and for that matter within the UK.
38. We are also satisfied that the Claimant’s dismissal was attributably wholly to the redundancy situation.
39. The Claimant was given adequate warning of his potential redundancy within correspondence we were referred to.
40. The Respondent reached a business decision to close the China office in early August 2009 because it was simply not financially viable and decided to continue the work through a locally based agency rather than employed staff.  It is not for the Employment Tribunal to question this decision any further in the light of our findings.  However we could see the business sense behind this decision.”

10.	As Mr Halpin accepts, what follows in paragraphs 42‑46 is the ticking of boxes against the criteria set out in Williams: that the Tribunal upheld the Respondent’s position that there was meaningful consultation, there were reasonable steps to investigate the possibility of alternative employment, a fair procedure had been followed in his case including meetings and the right of appeal, and then this: “We feel that the Respondent did all that could be expected in the circumstances”.  Mr Halpin accepts that the words “could be expected” mean “could be expected of a reasonable employer”, and yet he contends that that is a failure to apply section 98(4).  His principal target for attack is the finding in paragraph 41, which we have already considered.  So it was that the Tribunal dismissed the claim.

The Claimant’s case
11.	In a very carefully written argument presented with conspicuous clarity and courtesy to us today, what the Claimant plainly regards as a gross unfairness has been opened to us.  It is the simple proposition that he should not have been made redundant and that the Tribunal, in coming to the conclusion that it did, committed an error of law by failing to apply the relevant authorities to his case.  The central arguments can be summarised in his short exchange, which is that no reasonable employer would automatically limit the pool to those workers whose work had itself diminished, would exclude those with interchangeable skills, would dispense with a post and automatically decide that the person holding it must be dismissed, and would not allow such person to continue working.

The Respondent’s case
12.	The Respondent relies on written submissions, since its representative is unable to attend today due to severe weather conditions.  The Tribunal made a decision that was open to it on the material available.  It also made a decision as to credibility based upon the live and written evidence of its witness, his evidence being unchallenged, since the Claimant had not attended the hearing. Where issues of fact were to be found the Tribunal was entitled to accept the evidence of the Respondent’s witnesses.

The legal principles
13.	The legal principles have been set out in Williams, and since there is no issue as to those passages we have cited, we need look no further.  Mr Halpin’s principal contention is that the Tribunal did not expressly make a finding that the decision came within the band of reasonable responses as required by Iceland Frozen Foods v Jones [1982] IRLR 439.  In our judgement, the language of a Tribunal once it cites the statute is for it to decide, and a Tribunal will not usually go wrong if it uses precisely the language of the statute in its finding, nor will it necessarily go wrong if it uses its own language, provided its sense is clear.

14.	When dealing with a selection process a Tribunal will err if it decides that the pool chosen by the Respondent was wrong, for that is to make itself the decision‑maker as to pools (see Fulcrum Pharma v Bonassera [2010] UKEAT/0198/10/DM). The decision on pool and of selection are questions of fact for an Employment Tribunal (see my Judgment in Inchcape Retail Ltd v Symonds UKEAT/0316/09).

Discussion and conclusions
15.	Applying those principles, we prefer and adopt the argument in writing of the Respondent and have decided to dismiss the appeal.  The first issue is whether the Tribunal failed in its duty to make a finding under section 98(4); we regard this submission as misconceived.  The Tribunal had before it the statute, it set it out, it has been in place for over 40 years, and when it came to the conclusion that the Respondent had done all that could be expected of it, it was applying section 98(4).  The principal decision by the Respondent as to the pool of one was not only open to it; it is one that a Tribunal could not easily overturn.  It is logical.  The Claimant was on his own out in China.  The work that he was there to do had been decided by management to be no longer of interest to it.  The fact that he had in his earlier career taken on administrative and analysis duties that were still mainly done by others did not mean that he was not at risk of redundancy, and he was the sole person within the management decision that the China job should cease.  

16.	It is in legal if not grammatical terms correct to say that the selection of the Claimant as from of a pool of one was right.  Selection only operates, when fairness is concerned, where there is a number of similarly qualified possible targets for redundancy.  In this case there was only him.  The decision by management to make that post redundant inevitably put him at risk.  Once the Tribunal had acquitted the Respondent of any criticism about the procedure it adopted, then it seems to us that the Tribunal would not have been correct to interfere with any decision of the management that caused the redundancy of the Claimant.

17.	The decision as to the pool (we use the word advisedly, since there was only one) is for the management (see Fulcrum Pharma, where a Tribunal erred in adjusting the decision as to one or two people in the pool).  In our judgement, the decision by management was one that was reasonably open to it, and the Tribunal has committed no error.  We can understand the sense of unfairness the Claimant feels at having been sent to China and then the job terminated, but we are applying the primary legal principle that a decision that follows a correct self‑direction and clear findings of fact by an Employment Tribunal on unfair dismissal should not be interfered with (see the difficulty in so doing set out by Mummery LJ in the majority Judgment he gave in Fuller v London Borough of Brent [2011] EWCA Civ 267).

18.	We would very much like to thank Mr Halpin for his careful arguments.  The appeal is dismissed.