Appeal No. UKEAT/0179/11/JOJ

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

		At the Tribunal
		On 8 February 2012

Before
HIS HONOUR JUDGE PETER CLARK
SIR ALASTAIR GRAHAM KBE
MR H SINGH

THE GARDEN CENTRE GROUP	APPELLANT

(1) MRS A OAKLEY
(2) MRS T MADINE	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR DAVID READE
(One of Her Majesty’s Counsel)
Instructed by:
Messrs Memery Crystal LLP Solicitors
44 Southampton Buildings
London
WC2A 1AP
	
For the Respondents	MR PIERS CHADWICK
(Representative)
KLC Employment Law Consultants LLP
Milford Suite
Mill Pool House
Mill Lane
Godalming
Surrey
GU7 1EY	

SUMMARY
PRACTICE AND PROCEDURE – Appellate jurisdiction/reasons/Burns-Barke

Employment Tribunal failed to make significant finding of fact.  Appeal allowed: case remitted to fresh ET for rehearing.
HIS HONOUR JUDGE PETER CLARK
Introduction
1.	This is an appeal by The Garden Centre Group, the Respondent before the Reading Employment Tribunal, against that Tribunal’s Judgment, promulgated with Reasons on 24 January 2011, upholding the complaints of unfair dismissal brought by the Claimants, their former employees Mrs Oakley and Mrs Madine, and awards of compensation in their favour totalling, respectively, £3,176.09 and £43,692.

Background
2.	The Claimants, together with a third Claimant, Ms Stead, whose claim was later withdrawn, were each employed by the Respondent as Regional HR Managers.  Their employment was terminated by the Respondent with effect from 31 October 2009.  It was the Respondent’s case that the reason for the Claimants’ dismissal was redundancy; alternatively, some other substantial reason, namely a business reorganisation.  It was the oral evidence of two witnesses called by the Respondent, Mr Sheldrake, then Regional Manager, and Mr Kozlowski, then Finance Director (both had left the Respondent by the time of the Tribunal hearing on 5 and 6 January 2011) that at a meeting of Regional Managers and Directors, at which the Claimants were not present, held on 9 September 2009 it was decided that the Regional HR Manager role should be considered as part of a programme of staff reductions, against the backdrop of a poor trading year in 2008.  The Respondent operated a chain of some 120 garden centres.  No minutes of that meeting were produced to the Tribunal.

3.	It was the Claimants’ case that no decision was made at that meeting to delete the Regional HR Manager positions.  Although none of the Claimants were present, they pointed to an absence of written evidence of such a decision.  Rather, they contended that the decision to dismiss them was taken by Nicholas Marshall, the Respondent’s Chief Executive, after he had seen an email from Mrs Madine dated 14 September.  There was evidence from Ms Sovel Cunningham, then an HR advisor, called by the Claimants before the Tribunal, that on 16 September Mr Marshall told her that the three Regional HR Managers were to be made redundant; their work would be distributed to an HR Training Manager supporting the garden centre managers and Regional Managers in each region.  The Tribunal accepted her evidence; Mr Marshall did not give evidence below.

4.	It is the Respondent’s case on appeal that the Tribunal was required to make a finding of fact as to whether the decision to identify the three Regional HR Manager posts for redundancy was made at a meeting held on 9 September or by the Chief Executive on 16 September as a result of reading Mrs Madine’s email.  Mr Chadwick argues that that factual question is not determinative of the issue as to whether a genuine redundancy situation arose.  We shall return to that argument later.  At this stage, it is sufficient to refer to the Tribunal’s Reasons, first at paragraph 12, where they say this:

“The starting point is the meeting on 9 September 2009 when we were told that the decision to make the three regional posts should be made redundant [sic].  As indicated the Claimants do not believe that such a meeting took place.  Indeed, we have not been provided with any notes of that meeting and have simply been told that that decision was made.”

and in their conclusions (paragraphs 21‑23), where they found that the process undertaken by the Respondent was a sham from beginning to end; there was no genuine redundancy situation.

5.	The process emerging from the evidence and findings of the Tribunal was that Mr Sheldrake held meetings with Ms Stead and Mrs Madine on 16 September and with Mrs Oakley on 23 September.  Those meetings were minuted, and the three Claimants were told that their posts were at risk of redundancy.  Further consultation meetings took place with all three Claimants on 1 October 2009, at which Ms Cunningham was present.  A further meeting took place on 22 October.  The Claimants were informed of alternative vacancies available, but none were acceptable to them.  They were dismissed with effect from 31 October and appealed to Mr Pierpoint, the Development Director; he dismissed their appeals, and gave evidence to the Tribunal.

The Tribunal Decision
6.	The first question for the Tribunal was whether the Respondent had made out a potentially fair reason for the Claimants’ dismissals.  They contended that the principal reason was redundancy or, alternatively, some other substantial reason, as we have earlier observed.  The Claimants argued that they were dismissed at the whim of Mr Marshall.  The Tribunal accepted the Claimants’ case (paragraphs 21‑23).  The Respondent had failed to make out either potentially fair reason for dismissal.  It followed that it was not strictly necessary in the light of that finding for the Tribunal to go on to consider reasonableness under section 98(4) of the Employment Rights Act 1996 (ERA).  However, they criticised the pool for redundancy, the three original HR Managers only (paragraph 13), were unimpressed by the consultation process (paragraph 14), found that no genuine attempt was made to find alternative positions for the Claimants (paragraph 17), and found that the appeal process was flawed because Mr Pierpoint failed to investigate the allegation that the decision was effectively made by Mr Marshall, piqued by Mrs Madine’s email (paragraph 18).

7.	On those findings it is fair to assume that had the Tribunal been satisfied that a potentially fair reason for dismissal had been made out, they would have gone on to find that such dismissal was unfair under section 98(4).  They rejected a submission that compensation fell to be reduced under the Polkey v A E Dayton Services Ltd [1987] ICR 142 principle.  In assessing compensation the disparity in awards arose from the fact that Mrs Oakley soon found fresh employment; Mrs Madine did not.  In the latter case the Tribunal awarded one year’s future loss in addition to her lost earnings and benefits to the date of hearing.

The appeal
8.	Central to the way in which the Respondent’s appeal is advanced before us by Mr David Reade QC, who did not appear below, is the factual issue set up by the rival contentions identified at paragraph 12 of the Reasons which we have earlier recited.  If that is the starting point, which is it?  Was there a discussion at a meeting of senior management on 9 September about the Regional HR Managers roles or not?  We accept Mr Reade’s contention that such a finding of fact was significant in the Tribunal’s chain of reasoning (see Levy v Marrable & Co Ltd [1984] ICR 583).  It follows that we reject Mr Chadwick’s contention that the point was of peripheral importance.

9.	Did the Tribunal accept or reject the evidence of Messrs Sheldrake and Kozlowski?  We are not told.  In our judgement that is a fatal flaw in the Tribunal’s approach to this case, particularly in circumstances where their conclusion appears to be that the Respondent failed to make out a potentially fair reason for dismissal.  It followed, as we have said, that strictly it was unnecessary for the Tribunal to consider, because section 98(4) is not engaged in these circumstances, the fairness of the process followed by the Respondent.  However, some consideration was given to that question without firm conclusions being reached.  For example, on the pool for selection (paragraph 13) the Tribunal say, “there is some doubt whether it was fair and reasonable to limit the pool to the 3 managers”.  Having embarked on that analysis, it would have been helpful to know what this Tribunal’s answer to that reasonableness question was.

10.	Further, the Polkey finding (paragraph 24) only makes sense in the light of the Respondent’s failure to establish a potentially fair reason for dismissal.  Had they established such a reason, questions under Polkey would inevitably arise, even if the dismissals were found to be unfair under section 98(4).

Conclusion
11.	In these circumstances we have concluded, not without regret, that this decision cannot stand.  The appeal is allowed.

Disposal
12.	A further issue arises as to whether the matter should be remitted to the same Tribunal, chaired by Employment Judge Griffiths, or a fresh Tribunal.  It is not suggested, correctly in our view, that we should determine the case here and now.  Having considered the rival submissions, we prefer those of Mr Reade.  The case must return to a fresh Tribunal for complete rehearing.  That means that either party may call additional evidence at the rehearing.  The original hearing is effectively to be expunged, subject only to any question of inconsistent statements being made by the same witness at the original and remitted hearings.