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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Gover & Ors v Propertycare Ltd [2006] EWCA Civ 286 (28 March 2006) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2006/286.html Cite as: [2006] EWCA Civ 286, [2006] ICR 1073, [2006] ICR 1128, [2006] 4 All ER 69 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HH JUDGE MCMULLEN QC AND MEMBERS
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE LLOYD
and
LORD JUSTICE RICHARDS
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MR T GOVER AND OTHERS |
Appellants |
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- and - |
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PROPERTYCARE LTD |
Respondent |
____________________
Mr John Bowers QC and Mr Mark Trafford (instructed by HomeLet Legal Services) for the Respondent
Hearing dates : 8 March 2006
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Crown Copyright ©
Lord Justice Buxton :
Background
"Simply as a boldly stated issue about whether the halving of the commission rates was justified we have no hesitation in finding that they [sic] were not…..We repeat that the most unimpressive feature of the Respondent's case on all these issues was the one-sided nature of all the business dealings between the parties in those final months….the kind of swingeing reduction in the April-September scheme would have been a fundamental breach of a contract of employment….In the overall picture of the repudiatory behaviour by the Respondents culminating we find in an unreasonably arbitrary employment package administered in a totally unreasonable fashion without even lip service to any established concept or consultation we found particularly unimpressive and reprehensible the very tight timetable administered to the claimants to consider their positions….the whole process of termination of employment was unfair, confrontational, based on erroneous employment law principles and lacking in sympathy and understanding at [sic] any semblance of good industrial practice and procedure"
The appellants' case summarised
The jurisdiction of this court and its application in this case
"It is too often forgotten that, in the context of appeals from the Employment Appeal Tribunal, this Court is a second-tier appellate court. It may, and usually does, obtain considerable assistance from the judgment of the Employment Appeal Tribunal, but its concern is with whether the decision of the Industrial Tribunal was right, not with whether the Employment Appeal Tribunal was right."
I would be less than frank if I did not express some reserve about that guidance, both from the point of view of jurisdiction and from the point of view of the management of the business of this court. As to authority, this court's jurisdiction to hear this appeal, coming as it does from a statutory tribunal, is only to be found in section 37(1) of the Employment Tribunals Act 1996, which provides for an appeal from the EAT on a question of law only. I do not see how we can in any realistic sense be hearing an appeal from the EAT if we are only concerned with whether the ET was right. As to the business of this court, the assumption that we in effect repeat the exercise already performed by the expert EAT of reviewing the decision of the ET tends in practice to impose on this court an exercise that is inappropriate both in its nature and in its extent. It was no doubt with this jurisprudence in mind that the parties, if left to themselves, would have required two days of this court's time, and have read to us no fewer than twenty-seven authorities.
"The effect of the application of Polkey in this case is to construct the world as it plainly never would have been and to imagine employers as behaving in a way in which it was manifest they never would behave"
That was a hopeless submission. The terms of that sentence assume what the argument put to us denies, that the Polkey jurisprudence was potentially applicable, but complain that that jurisprudence was wrongly applied. That is the second issue, §7 above, and not the first issue with which we are now concerned. And, in any event, it has been the practice for all of my time in the law, and no doubt for many years before that, that even if only as a courtesy to the court a departure from the case as put in the court below is clearly identified and permission sought for it.
"properly arguable that the employment tribunal indulged in speculation about what would have happened and went beyond the limits indicated in King v Eaton (No 2) and other authorities."
Those observations are unmistakably directed at and only at the second of the appellants' points. They demonstrate not merely that the first point was never taken in the grounds, but also that the appellants do not have permission to pursue it in this court.
Polkey
"the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer"
To that observation Mr Bowers added a plea that we should not add to the already excessive number of technical rules in this area. I respectfully and strongly agree with both of those observations. My first and overriding difficulty about the appellants' first point is that, at least as explained to us, it would introduce some very technical and verbally sophisticated rules into a decision-making process that should be a matter for the commonsense, practical experience and sense of justice of the ET sitting as an industrial jury.
"there is no need for an 'all or nothing' decision. If the industrial tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment"
It was that principle that the ET saw itself as applying in this case. It is necessary to set out their approach in their own words:
139. We had to hypothesise about the period during which it would have been reasonable to consult about a totally new contract of employment and what would have been a reasonable period and what would have been the consequences at the end of such a period. This exercise was we found particularly difficult in view of our findings on a whole number of issues about the conduct and behaviour of the Respondents and trying to visualise them theoretically as "reasonable employers".
140. We took into account our own industrial experience of other industries where fundamental job changes are introduced over a period of time which are not necessarily popular with the workforce. Thus for example the Tribunal panel has had experience of cases where a large workforce in the "care" world has sought to introduce shift working. That kind of exercise in our judgment would usually require particularly in special cases involving no doubt wide ranging changes to family arrangements and issues of that kind a period, say, of at least six months.
142. We supposed that if the Respondents had taken the question seriously and had taken proper legal advice they could have in due course put together a package which did not amount to a fundamental breach of contract but which would nevertheless have been sufficiently unattractive to the majority of the Claimants.
143. We suspect that the final package would still have been unattractive to the majority of the Claimants particularly the older members of staff who still hoped to have found (as it appears they had in fact done) a business opportunity for their long term retirement years.
144. We are satisfied that we had sufficient material before us to reach a conclusion that even the high earning Claimants would have been faced after a period of consultation with a salary plus commission sort of arrangement or indeed even a commission only arrangement on a PAYE basis which would not have been particularly attractive but which would have been justifiable after proper consultation and inquiry.
145. As we have already referred to above the Claimants always saw themselves as a group and we have no doubt that during such a period of consultation even more so they would have acted as a group and sought to protect the interests of the high earning Claimants and the lower earning Claimants and that consultation would certainly have been justifiably protracted. Equally the Respondents could have justified what the Claimants would have seen as an unattractive final much more fixed rate of income albeit of course with the benefits of employment right protection on the one hand and the obligations of employers duties on the other.
146. We have come to the conclusion that the correct period for consultation, a radical overhaul of the whole employment contract terms and details would have been a period of four months terminating on 1 February 2002. At that time we are persuaded that the Respondents would have been able to put together a proper contract of employment with proper terms and conditions continuity of service absence of probation period and fair industry standard wages on an employed insurance sales basis.
147. Equally we are satisfied that it is extremely probable that the higher earning and/or more elderly Claimants would have found that package unacceptable because of their age and their desire to build up a business of their own and that they would not have found that acceptable. The younger/lower paid Claimants we find would have maintained solidarity and also rejected the package. At that point the Respondents we find would have been fairly entitled to dismiss the Claimants for some other substantial reason i.e. non acceptance at that point of a finally worked out and properly consulted package. That dismissal would have been on noticed and therefore our overall conclusion therefore is quite simply that the Claimants are entitled to a basic award calculated quite simply on two years service at the relevant statutory maximum and loss of earnings (subject to any earnings during that period) up to 15 February 2002 i.e. the statutory 2 weeks notice.
The ET's error on the facts
"the matter will be one of impression and judgment, so that a tribunal will have to decide whether the unfair departure from what should have happened was of a kind which makes it possible to say, with more or less confidence, that the failure made no difference, or whether the failure was such that one cannot sensibly reconstruct the world as it might have been"
That, when applied to an ET, indicates very strongly that an appellate court should tread very warily when it is being asked to substitute its own impression and judgement for that of the tribunal. I have set out how the ET approached the issue in this case, and despite the lengthy criticisms addressed to that treatment I am not persuaded that they went outside the very wide ambit permitted to them by Lambe.
26. In that passage the Tribunal is doing what it is engaged to do: to draw upon its own industrial experience of circumstances such as this and to construct, from evidence not from speculation, a framework which is a working hypothesis about what would have occurred had the Respondent behaved differently and fairly. The Tribunal acknowledged that there would have been a radical overhaul of all employment terms. In the passage at para 144, it has made a finding that that would have occurred and if the Claimants had failed to adopt them, as they appeared particularly unattractive, their dismissals would have occurred in any event.
27. The criticism advanced by [counsel] is that in seeking to construct the hypothesis this Tribunal had so many pieces of the jigsaw missing that the only correct approach was to disallow any kind of Polkey reduction. We do not accept that proposition because the findings based upon a careful analysis of the material which it had before it, and drawing upon its experience, do indicate that it was satisfied that there was material sufficient to make its judgment. It is true that in one place a more tentative approach, using the word "could" rather than "would" appears, but it is overwhelmed by the numerous occasions when the positive "would" is used. Similarly the use of the words "we supposed" and "we suspect" in building the blocks towards the hypothesis shows the way in which the Tribunal was approaching its task correctly.
28. The Tribunal was engaged in what it described as the "what if?" exercise. The Tribunal made strong criticisms of the Respondent but it is not necessary to describe this process as a procedural flaw or a substantive flaw; all that is necessary, adopting the highlighted extract from Lord Prosser's judgment is that the Tribunal can sensibly reconstruct what would have happened. Here it made its own findings and we see no error in its approach to it.
Lord Justice Lloyd:
25. I agree.
Lord Justice Richards:
26. I also agree.