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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Ashby v JJB Sports Plc (Redundancy : Collective consultation and information) [2012] UKEAT 0114_12_1809 (18 September 2012) URL: http://www.bailii.org/uk/cases/UKEAT/2012/0114_12_1809.html Cite as: [2012] UKEAT 114_12_1809, [2012] UKEAT 0114_12_1809 |
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EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX
At the Tribunal
Before
HIS HONOUR JUDGE DAVID RICHARDSON
MRS M V McARTHUR FCIPD
MR D NORMAN
MR J ASHBY APPELLANT
JJB SPORTS PLC RESPONDENT
Transcript of Proceedings
JUDGMENT
APPEARANCES
(of Counsel) Instructed by: Pannone LLP 123 Deansgate Manchester M3 2BU
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(of Counsel) Instructed by: Messrs Napthens LLP Solicitors 7 Winckley Square Preston PR1 3JD
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SUMMARY
REDUNDANCY
Consultation
Suitable alternative employment
The Tribunal did not err in law in concluding that the Respondent dismissed the Claimant fairly, notwithstanding that it did not inform him of or interview him for a new post of HR director. Polkey v AE Dayton Services Ltd [1988] AC 344 and Duffy v Yeomans & Partners [1995] ICR 1 considered and applied.
HIS HONOUR JUDGE DAVID RICHARDSON
Introduction
1. This is an appeal by Mr Jonathan Ashby (“the Claimant”) against a judgment of the Employment Tribunal sitting in Manchester (Employment Judge O’Hara presiding) dated 24 October 2011. By its judgment, the Tribunal rejected a claim of unfair dismissal which he brought against his former employers, JJB Sports Plc (“the Respondent”).
The background facts
4. The Respondent is a sportswear and sports equipment retailer employing several thousand staff. The Claimant commenced employment with the Respondent on 17 April 2000, again as Payroll Manager. In 2007 he was appointed to a newly created post of Head of Human Resources and Payroll. He became known by the title of Associate Director. His salary was substantially increased. By 2010 it was £86,071. For a short time, from June 2008 until January 2009, he was also company secretary. The Claimant had responsibility for a range of tasks on the payroll management side, assisted by a payroll manager. On the HR side there was a team consisting of the Human Resources Manager and four HR advisers. The Human Resources Manager continued to oversee most of the day-to-day running of the HR department.
7. The Respondent considered that the Payroll Manager could absorb the Claimant’s payroll responsibilities. Other company administrative tasks for which he had responsibility could be undertaken by the Legal and Operations Director. He was, therefore, considered to be redundant. The Tribunal found that “Mr Manning and his colleagues were unable to identify a suitable alternative role for the Claimant within the company.”
“Having made these decisions Mr Manning and his colleagues decided that consultation with the claimant would serve little purpose and would have been a sham which would not have been to the claimant’s benefit. Whilst with the benefit of hindsight he conceded in Tribunal that the respondent could have allowed the claimant to take part in a competition for the HR Director role, he stressed that he could only have been considered for the role with significant training and development. That was not appropriate for the respondent at that time when in order to save the business it needed to move with speed and alacrity. They therefore decided to appoint Mr Mitford. Further, that Mr Mitford would have won any competition because he had the right qualifications and experience at the HR director level. In the event that the respondent had allowed the claimant to compete for the post his employment might have lasted for a month longer than it did.”
The Tribunal’s reasons
“9. The employer is expected to go through a fair consultation procedure, warning and consulting employees at risk of redundancy about the reason for the redundancy, the reason they have been selected, alternative roles available and financial proposals. Employers should give the employee an opportunity to comment and respond before a final decision is made. The ACAS Code of Practice on Discipline provides a procedure whereby written notice that dismissal is being contemplated, attendance at a meeting to discuss and the right of appeal from a decision to dismiss is included. However, the Foreword provides that it: ‘…does not apply to dismissals due to redundancy.’
10. It may not be unfair to dismiss an employee without consultation but only if the employer can show that, based on the facts known at the time, it would have been futile to have done so. If the employer fails to persuade the tribunal that it would have been futile, a percentage reduction from compensation for unfair dismissal may be made if the employer can show that even if they had consulted, they would still have decided to dismiss the employee. This is the Polkey principle from the decision of the House of Lords in Polkey v AE Dayton Services Ltd [1987] IRLR 503.”
13. On the question of the Respondent’s failure to tell the Claimant its plans, the Tribunal said:
“With respect to Mr Norbury, the Tribunal did not agree that it was unreasonable of the Respondent not to tell the Claimant of its plans. The Respondent was entitled to reach a view on the Claimant’s capabilities which resulted in it not including him in what were highly sensitive commercial decisions for the future of the company. The Tribunal found that these were not the decisions of Mr Manning alone and that he worked closely with his two executive directors and the Board.”
14. The Tribunal dealt with the question of fairness in the following passage:
“27. These are potentially fair reasons for dismissal. The tribunal went on to consider the test of fairness. The tribunal noted the lack of warning, consultation associated with the meeting on 7 July when the respondent dismissed him. It also noted the lapse of time from May when the decisions were made to July. The respondent’s case was that consultation would have been futile. The tribunal agreed that Mr Manning had assessed the claimant’s skills and capabilities over the 18 months he had been his line manager and that he was entitled to reach the conclusion he did that the claimant would not be a suitable candidate for the new HR director role. The tribunal found that the respondent did not make assumptions about the claimant’s abilities and history. In those circumstances any further discussion was not necessary and given the urgency of the circumstances for the respondent to turn the business around from potential insolvency, the tribunal concluded that it was reasonable to dismiss the claimant in the way the respondent did. This included the appointment of Mr Mitford without inviting the claimant to compete for the position and the timing of the decisions.
28. The claimant was able to put before the tribunal all the evidence of his capability for the new HR director role. Even after having read and heard this, the tribunal concluded that it was reasonable for the respondent to conclude that the claimant was not qualified for the role. It would therefore have been futile for the respondent to have invited the claimant to take part in a competition with Mr Mitford for the role of HR director. His qualifications and experience were heard and shoulders above those of the claimant for this post. The tribunal therefore found that the dismissal was fair.”
Submissions
Statutory provisions
“(4) Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)–
(a) depends on whether in the circumstances (including the size and administrative resources of the employer´s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
(b) shall be determined in accordance with equity and the substantial merits of the case.”
Discussion and conclusions
20. As a general rule, an employer is expected to give as much advance warning of redundancy as is reasonable and to consult an employee as part of the redundancy process. In Polkey v AE Dayton Services Ltd [1988] AC 344, Lord Mackay said at pages 354 to 355:
“.... the subject matter for the tribunal's consideration is the employer's action in treating the reason as a sufficient reason for dismissing the employee. It is that action and that action only that the tribunal is required to characterise as reasonable or unreasonable. That leaves no scope for the tribunal considering whether, if the employer had acted differently, he might have dismissed the employee. It is what the employer did that is to be judged, not what he might have done. On the other hand, in judging whether what the employer did was reasonable it is right to consider what a reasonable employer would have had in mind at the time he decided to dismiss as the consequence of not consulting or not warning.
If the employer could reasonably have concluded in the light of the circumstances known to him at the time of dismissal that consultation or warning would be utterly useless he might well act reasonably even if he did not observe the provisions of the code. Failure to observe the requirement of the code relating to consultation or warning will not necessarily render a dismissal unfair. Whether in any particular case it did so is a matter for the industrial tribunal to consider in the light of the circumstances known to the employer at the time he dismissed the employee.”
21. Lord Bridge said at page 364:
“If an employer has failed to take the appropriate procedural steps in any particular case, the one question the industrial tribunal is not permitted to ask in applying the test of reasonableness posed by section 57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On the true construction of section 57(3) this question is simply irrelevant. It is quite a different matter if the tribunal is able to conclude that the employer himself, at the time of dismissal, acted reasonably in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with. In such a case the test of reasonableness under section 57(3) may be satisfied.”
22. In Duffy v Yeomans & Partners [1995] ICR 1, Balcombe LJ said:
“It is what the employer (as a reasonable employer) could have done which is required to be tested, so the tribunal must ask whether an employer, acting reasonably, could have failed to consult in the given circumstances.”
23. On the fundamental approach to be taken by a Tribunal it is not necessary to look further than these decisions. There is, however, helpful guidance as to the purposes of consultation in a decision of the Appeal Tribunal, Poat v Holiday Inn Worldwide [1994] EAT/883/93 (His Honour Judge Hull presiding):
“It is, of course, normal for warning and consultation to take place and, as has been pointed out in many, many cases, it is really a matter of commonsense; the purposes of consultation are various. First of all, leaving aside anything else, it is courteous and humane to consult people when you are thinking of making them redundant, or have decided provisionally to make them redundant. Of course, there is the possibility that the employee may have ideas for ways in which redundancy can be avoided altogether, so far as he or she is concerned. The employee may be able to make suggestions about alternative employment, may indicate that he or she would be prepared to accept less well-paid work or work on less favourable terms, or to retrain for other work, or to go abroad, even. Or to do other things which would help the employer out in the emergency which arises. Then, of course, there are other matters which have been pointed out in other cases, such as the question of the length of notice which is appropriate and whether the employer can help the employee in some other way by finding him employment, perhaps with a quite different firm, by giving him a good reference and so forth. These are all matters which might be raised in consultation. Clearly, it will be a very bold thing for any employer to say or, indeed, any person to say, "I can dispense with consulting somebody. Nothing that person could possibly say would make me change my mind in any material way." That is a very strong thing to say.”
24. Against this background we will take Miss Del Priore’s submissions in turn.
“.. a grave danger that this area of the law is becoming over sophisticated and that there is an attempt to lay down as rules of law matters which are no more than factors which an industrial tribunal should take into account in reaching its decision whether the employer acted reasonably in the circumstances of the particular case.”