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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Mirab v Mentor Graphics (UK) Ltd [2018] UKEAT 0172_17_0401 (4 January 2018) URL: https://www.bailii.org/uk/cases/UKEAT/2018/0172_17_0401.html Cite as: [2018] UKEAT 172_17_401, [2018] UKEAT 0172_17_0401 |
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At the Tribunal | |
Before
HER HONOUR JUDGE EADY QC
(SITTING ALONE)
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR MARK STEPHENS (of Counsel) Instructed by: Lester Dominic Solicitors Upper Floors 85-87 Ballards Lane Finchley Central London N3 1XT |
For the Respondent | MR THOMAS KIBLING (of Counsel) Instructed by: Cater Leydon Millard 68 Milton Park Abingdon Oxfordshire OX14 4RX |
SUMMARY
UNFAIR DISMISSAL - Reasonableness of dismissal
Unfair dismissal - reasonableness of dismissal - section 98(4) Employment Rights Act 1996
The Respondent had determined that the Claimant's role as Sales Director was no longer required. The ET was satisfied this was a redundancy for the purposes of section 139 ERA and constituted a potentially fair reason for his dismissal for section 98 purposes. In determining whether the dismissal had been fair, under section 98(4), the ET had concluded the Respondent had done sufficient in terms of looking for alternatives, specifically it had not been required to consider "bumping" any other employee working at a subordinate Account Manager level (there were no other Sales Directors) because such an obligation only arose if the employee himself raised it and the Claimant had given no sign that he would have been willing to work as an Account Manager. In considering the fairness of the process followed, the ET accepted that the internal appeal had been "superficial" and carried out without independent judgment but considered the appeal was only relevant to an unfair dismissal claim if the original process had been unfair; that was not the case here. The Claimant appealed.
Held: allowing the appeal in part
The ET had erred in its approach to the consideration of alternatives. It had assumed there was a general rule that an employer was not required to consider subordinate positions unless raised by the employee but that was not what the case-law said and the ET had failed to show that it had applied the band of reasonable responses test in this regard. Even if that was not fatal, the ET had stated that the Claimant had given "no sign" that he would have been prepared to consider redeployment as an Account Manager. That was perverse given that, on either side's case, there was at least one such indication made during the consultation process and other statements made by the Claimant could similarly be construed in this way (a possibility with which the ET had apparently not engaged). The ET had further erred in law in its approach to fairness in respect of the internal appeal. It was wrong to say (as it had) that the appeal was only relevant if the original process had been found to have been unfair. Given the errors made in terms of the ET's approach to the question of fairness, the appeal would be allowed on these points and these two issues would need to be remitted for reconsideration.
The Claimant had also sought to argue that the ET had erred in failing to take into account the size and resources of this employer and/or in failing to provide adequate reasons, expressly engaging with case-law cited by the Claimant. These aspects of the appeal were dismissed. The ET had expressly referred to the size and resources of the Respondent in its findings of fact and there was no reason to think it had lost sight of these factors in its conclusions. It had, further, not been required to expressly refer to each position of law and authority cited by the Claimant (of which there had been some 20 separate propositions and 27 cases referred to); the requirement under Rule 62(5) ET Rules did not go so far.
HER HONOUR JUDGE EADY QC
The Relevant Background
The ET's Decision and Reasoning
"17. … Mr Perry's interests lay in maximising sales of the division as a whole, including general embedded systems. If the claimant had been successful in his new role after January 2015, I am sure that Mr Perry would have been pleased. He did not in any way, at least on the evidence presented to me, seek to procure the dismissal of the claimant at the time of the subdivision in January 2015. …"
"17. … Between May 2015 and November 2015, when the restructure plan that affected the claimant was devised, the automotive sales channel existed without a Director of Sales. Given the imbalance in revenue between the two sales channels, it is almost inconceivable that close observers of the structure of that part of the business would not notice that the more successful subdivision was achieving its results without the need for a Director of Sales. It is therefore logical that the business would think very carefully about whether or not it needed to have a Director of Sales in relation to the general embedded systems sales sub-division."
"18. In my judgment, this is a much more likely and feasible reason for the claimant's dismissal, than that Mr Perry was determined to remove the claimant from the company. I cannot rule out the possibility that Mr Perry and/or others wanted to place the claimant in a position where he was likely to fail. This seems to me to be an inherently unlikely proposition however. Any business wants to succeed by maximising sales. What is more likely is that, based on his success as Director of Sales in the combined division, the claimant was perceived as someone who could develop the general embedded systems sales division into a more successful business sector. The automotive subdivision did not require the claimant's special expertise because it was already successful.
19. My judgment as to the reason for the claimant's dismissal is therefore that the business decided that it no longer required a Director of Sales in the general embedded system sales division and that that decision was particularly underlined by continuing relatively poor sales in that subdivision and the fact that the more successful automotive subdivision did not have such a position. The consequence of those factors was to lead to a decision to dispense with the claimant's role. In my judgment, that was the reason for his dismissal."
"21. … The role of Director of Sales was distinct from the role of Account Manager. I did not hear much about this, but I infer that the role of the director was to motivate and encourage the Account Managers, because the Director of Sales would be rewarded by their efforts. It was a distinct role and the respondent's decision to dispense with it represents a decision to cease a requirement for an employee to carry out work of that particular kind. The section 139 test is therefore satisfied and the reason is therefore a potentially fair reason by reference to section 98. The reason that the claimant lost his job was, as a matter of causation, because the respondent took the decision to dispense with the role of Director of Sales in the general embedded systems sales channel."
"23. … notwithstanding that the respondent is a company registered in the United Kingdom, which represents a comparatively small part of the overall business operated by the group of which it is a part, the claimant was regarded as part of a global structure. His colleagues and subordinates worked in different legal jurisdictions across the world. …"
"23. … in my judgment, in terms of selection, the claimant was entitled to be compared and placed in a pool with any other Director of Sales in the embedded systems division, viewed as a whole, including individuals working in different countries. However, there were no other Directors of Sales in that division. In my judgment, the respondent was entitled to regard the claimant as occupying a unique position. Put another way, the adoption of a pool of one was not outside the range of reasonable selection options. …"
"27. … Given the narrow effect of the decision made in November, it is difficult to see that the respondent could have done anything more in terms of consultation with the claimant. There was no attempt to pretend otherwise than that the decision to remove the particular role placed the claimant at risk of redundancy. His redundancy was a likely outcome, and the focus of consultation should have been in relation to redeployment, as to which see below."
"30. There is no sign that the claimant ever offered to take an account manager position, although it must be said there were no such vacancies. It might have been possible for the respondent in the UK to consider within the wider company the possibility of "bumping" someone like Gregor Braun, but the claimant himself did not suggest it. I did consider the decision in Barratt Construction v Dalrymple [1984] IRLR 385 in this respect. That case suggests that the onus was not on the respondent to suggest to the claimant that he might wish to take a more junior position. Of course, if the claimant himself had suggested it, the respondent would have been bound to consider that suggestion. I do not think that the respondent could have done any more in this respect than they did do."
"31. … The appeal is only relevant if the original process was unfair, and I do not hold that it was."
The Appeal
(1) the ET erred in concluding that the Claimant's dismissal had been fair, given its findings regarding the appeal;
(2) the ET further made a perverse finding when it held (see paragraph 30) that the Claimant had not himself suggested bumping;
(3) in finding also (see paragraph 30) that the Respondent could not have done any more in terms of seeking alternative employment for the Claimant, the ET had erred and/or failed to provide sufficient reasons for that conclusion.
Submissions
The Claimant's Case
The Respondent's Case
The Relevant Legal Principles
"(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show -
(a) the reason (or, if more than one, the principal reason) for the dismissal, and
(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.
(2) A reason falls within this subsection if it -
…
(c) is that the employee was redundant, …
(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."
"47. Although, as we have said, both Whitbread and Adivihalli contain a correct statement of the law, it would be advisable for Whitbread not to be cited in future. The use of the words 'rehearing' and 'review', albeit only intended by way of illustration, does create a risk that ETs will fall into the trap of deciding whether the dismissal procedure was fair or unfair by reference to their view of whether an appeal hearing was a rehearing or a mere review. This error is avoided if ETs realise that their task is to apply the statutory test. In doing that, they should consider the fairness of the whole of the disciplinary process. If they find that an early stage of the process was defective and unfair in some way, they will want to examine any subsequent proceeding with particular care. But their purpose in so doing will not be to determine whether it amounted to a rehearing or a review but to determine whether, due to the fairness or unfairness of the procedures adopted, the thoroughness or lack of it of the process and the open-mindedness (or not) of the decision-maker, the overall process was fair, notwithstanding any deficiencies at the early stage.
48. In saying this, it may appear that we are suggesting that ETs should consider procedural fairness separately from other issues arising. We are not; indeed, it is trite law that section 98(4) requires the ET to approach their task broadly as an industrial jury. That means that they should consider the procedural issues together with the reason for the dismissal, as they have found it to be. The two impact upon each other and the ET's task is to decide whether, in all the circumstances of the case, the employer acted reasonably in treating the reason they have found as a sufficient reason to dismiss. So for example, where the misconduct which founds the reason for the dismissal is serious, an ET might well decide (after considering equity and the substantial merits of the case) that, notwithstanding some procedural imperfections, the employer acted reasonably in treating the reason as a sufficient reason to dismiss the employee. Where the misconduct was of a less serious nature, so that the decision to dismiss was nearer to the borderline, the ET might well conclude that a procedural deficiency had such impact that the employer did not act reasonably in dismissing the employee. The dicta of Donaldson LJ in Union of Construction, Allied Trades and Technicians v Brain [1981] IRLR 224 at page 227 are worth repetition:
Whether someone acted reasonably is always a pure question of fact. Where parliament has directed a tribunal to have regard to equity - and that, of course, means common fairness and not a particular branch of the law - and to the substantial merits of the case, the tribunal's duty is really very plain. It has to look at the question in the round and without regard to a lawyer's technicalities. It has to look at it in an employment and industrial relations context and not in the context of the Temple and Chancery Lane."
"16. … Whilst the conduct of the internal appeal process is relevant to the overall question of fairness under s.98(4), the question, as Morritt LJ formulated it in Westminster City Council v Cabaj [1996] IRLR 399, paragraph 29 by reference to the House of Lords decision in Tipton v West Midlands Co-operative Society Ltd [1986] IRLR 112 and Polkey v A E Dayton Services Limited [1987] IRLR 503 itself, is whether the procedural defect denied to the Claimant employee an opportunity of showing that the employer's reason for dismissal, here capability, was an insufficient reason for the purpose of s.98(4)."
"(5) In the case of a judgment the reasons shall: identify the issues which the Tribunal has determined, state the findings of fact made in relation to those issues, concisely identify the relevant law, and state how that law has been applied to those findings in order to decide the issues. Where the judgment includes a financial award the reasons shall identify, by means of a table or otherwise, how the amount to be paid has been calculated."
Discussion and Conclusions