The claimant was the club secretary of a golf club. In 2008 the club started to suffer serious financial problems and needed to make redundancies. The claimant was one of those made redundant. He claimed at the ET that the real reason for dismissal was not redundancy but in reality because of the dim view the then committee took as to his conduct and capability, and that redundancy was the pretext for dismissal, or at least the opportunity to effect it principally for those other reasons.  The ET rejected his claim even though some evidence pointed to other reasons and that the employer might have acted to disguise those reasons by alleging redundancy. The claimant appealed.

The EAT rejected the appeal. The ET had dealt with the material which could have pointed to dismissal for other reasons but found that there was no adverse inference to be made. The ET was entitled to conclude that the reason it found for dismissal, ie redundancy, was the principal reason. They also rejected the argument that the ET had not dealt with the question of lack of consultation – the EAT were not satisfied that the argument had been clearly made at the ET.

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Appeal No. UKEATS/0057/11/BI

EMPLOYMENT APPEAL TRIBUNAL

52 MELVILLE STREET, EDINBURGH EH3 7HF

At the Tribunal

On 23 October 2012

Before

THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT); MISS J GASKELL; MR M SMITH OBE JP

FISH (APPELLANT)

GLEN GOLF CLUB (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellant
MR BRIAN NAPIER (One of Her Majesty's Counsel)

Instructed by:
Quantum Claims
70 Carden Place
Queens Cross
Aberdeen
AB10 1UL

For the Respondent
MR DAVID HAY (of Counsel)

Instructed by:
Mr Ian Kennedy WS
The Work Ethic Limited
Glebe End
23 Cramond Glebe Road
Cramond Village
Edinburgh
EH4 6NT

UNFAIR DISMISSAL – Reason for dismissal including substantial other reason

The Employment Tribunal was entitled to conclude that the reason it found for dismissal (redundancy) was the principal reason, even though some evidence pointed to other reasons (capability, conduct) and that the employer might have acted to disguise those reasons by alleging redundancy. Nor, on the facts, had the ET erred by not dealing with a contention said to have been advanced to it, since there was no clear evidence to that effect.

1. In North Berwick there is a links golf course that has been run for some 100 years by a committee as an unincorporated association. Between 1999 and 2008 the Claimant was the club secretary of the golf club, which we shall call "the club". On 11 April 2008 he was dismissed with effect from 6 June 2008 purportedly by reason of redundancy. He made a case that had a lot to be said for it at the Tribunal; that is, dismissal was in reality because of the dim view the then committee took as to his conduct and capability, and that redundancy was the pretext for dismissal, or at least the opportunity to effect it principally for those other reasons. The Employment Tribunal sitting at Edinburgh decided, however, for written reasons delivered on 18 May 2011, that he had not been unfairly dismissed. This appeal is against that decision.

1. The club had arranged in the years leading up to 2006 to build a new clubhouse. To do so, in 2006 it took out a loan of £1.2 million. Up to that year it had annually made a profit of around £40,000. After 2006, however, and after the loan required to be serviced, it started making significant losses. It was not in dispute that in the year to November 2006 the club made a loss of £94,000. In the following year, the situation was worse: £135,000. Serious losses of membership loomed in mid#2008. The club maintained that it was for that reason that it sought a review from a management consultant, a Mr Whiteford. He recommended, in short, reducing the salary bill substantially. Organisationally, he suggested that senior roles amongst the staff should be removed, and he recommended replacing the role of the secretary.

1. His report was dated 14 February 2008. For reasons that will become apparent, we shall call this "the first report". It was addressed to the committee. The committee considered its content at a meeting on 5 March 2008. It concluded that a restructuring should be considered as soon as possible and contemplated redundancies as a potential outcome. The secretary's position was discussed significantly. That meeting was adjourned and reconvened on 10 March, and the agreement was reached to create a part#time role of golf services manager reporting to the committee and at the same level of departmental managers in place of the previous management, including the secretary. The vice#captain, a Mr Alasdair Kerr, and a Mr Ross, also a committee member, were deputed to consult with those who might be subject to redundancy. The view taken by committee members was not unanimous. A Mr Foley took the view that it would be corporate suicide, as he put it, to remove the secretary's post from the management structure.

1. Following on from that meeting, Kerr and Ross met with the Claimant on 2 April. They met again on 9 April, after providing the Claimant with some financial information. By a letter dated 11 April, the Claimant was given notice of the termination of his employment on 6 June 2008. The Tribunal found at paragraph 35 that:

"The reason for the Claimant's dismissal was a decision that the work which he carried out as secretary could in fact be carried out by others in the organisation, including the unpaid committee members and, under the guidance of such committee members, by the managers who had previously reported to the Claimant. In short, the Respondent had concluded – due to the financial constraints to which it was subject – that it would have to do without a club secretary and divide the former responsibilities of his position amongst others some of whom were employees and some of whom were not. In addition, some of his functions (referred to in the evidence as 'ambassadorial') which involved raising the profile of the club within the industry and worldwide would no longer be carried out at all."

1. The redundancy of the Claimant was one of four redundancies made at the time, another of which was that of the assistant club secretary, Rita Wilson.

1. The Claimant was three days later sent job descriptions and application details for new positions that were to follow reorganisation. One of those was the post of office manager. There was a deadline of 21 April for applications. Rita Wilson applied for the post before that date; the Claimant did not. He applied after the event, by which time Rita Wilson had already been announced as confirmed in that post. Finally, the Claimant appealed against his dismissal. This appeal came in front of the club captain, Jinty Kerr, who is no relation to Alasdair Kerr, the vice#captain. She recommended to the committee that the appeal be dismissed, and the committee confirmed his dismissal. The decision, it is clear from the way the Tribunal set out the facts, was a committee decision and not the decision of any one individual whatever his or her views might have been.

1. The Claimant's case advanced to the Tribunal is of some importance in this appeal. He maintained that there had in the 15 months or so leading up to his dismissal been a constant undermining of his position by those in club authority. He noted that he had not been permitted during the course of consultation to see the first report from Mr Whiteford, and he did not even know then that there were two reports. The way in which the second report came to light seems highly surprising to say the least. The Claimant had commenced his claim within three months of his dismissal. In the course of interlocutory applications his representative sought to obtain a copy of the Whiteford report. That was initially rejected but eventually was ordered. He had in his hands a report dated 29 February 2008 across which was printed on each page the word "original" slanted diagonally. Because, he said, a copy of another similar but significantly different report had been passed through his letterbox, Mr Lefevre, on his behalf, asked Mr Kennedy, acting for the Respondent, if there was any other version of the report. He was told that was not the case. Indeed, in an email of 22 October 2010 in answer to a specific and repeated question the assurance was given on behalf of the Respondent that the review that the Claimant had was the only version ever in existence and/or circulation. That was not the case.

1. When the two versions were compared, it was plain, submitted Mr Napier to us, as did Mr Lefevre to the Tribunal, that there were differences between them. The first report, which the Claimant now had, had emblazoned in diagonal across it the word "confidential". It contained at least four paragraphs that were critical of him, in particular reciting what Alasdair Kerr, the vice#captain, had had to say about him, his abilities and capabilities. In addition, the later report, which we shall call "the edited version", dated 29 February, included material that had not been in the earlier report. Thus it included a sentence that suggested that Alasdair Kerr had had significant regard for the qualities and abilities of the Claimant even though it immediately went on to explain that there was a lack of responsibility taken by the Claimant in accepting that he was the lynchpin in making the club work across all departments.

1. Whereas the earlier, first report contained an organogram that showed the proposed club structure diagram, replacing the Claimant with an operational managing sub#committee, that organogram showed the names of all the existing heads of department, four in number, who had reported to the secretary. When that was repeated in the edited version, the names of all were missing. It is not difficult to see that the circumstances in which the first report had come to light, in terms more critical of the Claimant, and the fact that there had been an edited version that omitted that criticism and included compliments, might fuel suspicion and an argument that this indicated something of the real reasons why the club had sought to dismiss the Claimant. The reluctance to reveal the existence of the original report and the extent of reluctance to reveal the edited report, which also made criticism though less strenuously of the Claimant, might suggest that the club wished to sit upon evidence that it saw as harming its case and, as the Claimant would have it, revealing of the truth.

1. Taking that into account with the history that the Claimant claimed, the rushed nature of the consultation process and what might be thought as undue haste to appoint Rita Wilson to the only post for which the Claimant might sensibly have been considered, there was a strong case that the real reason, or at least the predominant reason, for dismissal was to do with the Claimant's character, capability or conduct and not to do with redundancy.

1. The Tribunal dealt with that by setting out the facts, which we have summarised, and then addressing the law, which included section 139(1) of the Employment Rights Act 1996 (ERA):

"[…] an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly [our italics] attributable to [the circumstances are then defined]."

1. It referred to considerable case law. There is no criticism of the accuracy or appropriateness of the Tribunal's self#direction in law. However, Mr Napier QC, to whose highly impressive argument we would wish to pay tribute, submitted that it did not as it might have done make reference to the case of Timex Corporation v Thomson [1981] IRLR 522, in which a Tribunal presided over by Browne-Wilkinson J had said at paragraph 5:

"It was urged that since the employers had tendered the evidence as to Mr Thomson's alleged unsatisfactory performance in his job as evidence of the reason why he rather than others was selected for redundancy, it was not open to the industrial tribunal to look at such evidence as suggesting that it was the incapability, not the redundancy, which was the reason for dismissal. We reject this submission. In our view, there is no such presumption as is suggested. Even where there is a redundancy situation, it is possible for an employer to use such a situation as a pretext for getting rid of an employee who wishes to dismiss. In such circumstances, the reason for dismissal will not necessarily be redundancy. It is for the industrial tribunal in each case to see whether, on all the evidence, the employer has shown them what was the reason for dismissal, that being the burden cast on the employer by [the Act; he referred to section 57(1), to which the successor is now section 98 of the ERA]."

1. That was a case in which the Tribunal had concluded that the principal reason for the dismissal was not the redundancy that the employer had claimed. The question was whether that conclusion was open factually to the Tribunal. The argument was that if there were a redundancy, then redundancy must be the reason for dismissal was, and was rightly, rejected, as the passage that we have cited shows. It was prayed in aid by Mr Napier here for the broader point; that is, that the fact that a dismissal occurs during a redundancy situation does not necessarily show that it was because of the redundancy situation that it occurred. There is a difference between redundancy being the occasion for a dismissal and for it being shown by the employer to be the reason for a dismissal.

1. The Tribunal, it seems to us, were fully alert to the point made in Thomson, even if it did not cite Thomson by name. Thus in paragraph 51 the Tribunal said that it was entitled to examine whether or not a redundancy situation in the terms of section 139 existed and also whether or not the reason (or principal reason) for the dismissal of the Claimant was the redundancy situation. It went on:

"If, however, a redundancy situation existed and if that situation was the cause (wholly or mainly) of the dismissal, we are not […] entitled to go further and examine the wisdom of the business decision… for the creation of the underlying redundancy situation […]."

1. Here the Tribunal was plainly drawing on the principle that the mere fact of a "redundancy situation" did not answer the question of what the reason for dismissal was. It was necessary to consider all the facts. That same approach was exemplified in paragraph 64, which, together with paragraph 65, we shall set out in full as the Tribunal's reasoning.

1. But first we should note the submissions made to the Tribunal. On the one hand, the club, on whom the burden of proof lay, asserted that the principal or main reason was redundancy. The Claimant asserted that the true reason was not redundancy. He did not (in one sense) need to go further, but he did assert that it was either conduct or performance. The Tribunal, in the light of those submissions, concluded as follows:

"64. The Tribunal was in no doubt that the principal reason for the Claimant's dismissal was redundancy."

1. We pause there to note that the Tribunal was not committing the error of identifying the reason as the sole reason. We continue:

"The difficulty with the alternative hypothesis put forward by Mr Lefevre was that it involved a rather selective reading of the contents of the Whiteford Report so as to focus almost exclusively upon the negative comments about the Claimant as an individual. Read as a whole, however, and taken with the other evidence in the case (much of which was unchallenged) a fair reading of what Mr Whiteford suggested was, in summary, that the Respondent's overheads were vastly exceeding its income, fixed overhead costs required to be cut, and that the best way to do that would be to eliminate the higher paid positions of employment from the management structure. On a fair reading of the Whiteford Report, the criticisms of the Claimant were ancillary. They were not the reason (or at any rate not the principal reason) for the recommendation that the position of secretary be abolished."

1. We note that in these last two sentences the Tribunal had described the argument of the Claimant based upon the Whiteford report as showing that the criticisms were not central or predominant, as they would have to be if the principal reason for the dismissal were shown by those reasons, but were ancillary. The Tribunal's evaluation of the report was that the principal reason for the recommendation that the report made was the financial pressure upon the club; a lesser reason, if it was a reason, was the criticism of the Claimant. The fact that the Tribunal understood well that it had to consider the reason or reasons and, if more than one, to assess which was the principal and which was not, and thereby honour the principle of Thomson in the observance even if they had not done so in actual words, is demonstrated by the brackets in the last sentence. This Tribunal was well aware of the fact that it should not jump straight from the fact that there was a redundancy situation to the assumption that that was necessarily the cause of any dismissal that then took place. It went on in paragraph 65 to say this:

"Although, somewhat surprisingly, we were never shown a copy of the Sentinel Report – that being in fact the document which the Respondent's Management Committee approved, thereby setting in train the consultation process which led to the Claimant's dismissal, it was clear enough (especially from the evidence of Mr Foley) that the strategy which the Committee ultimately approved was the removal of the secretary role altogether from the management structure. That decision was taken on financial grounds and in an attempt to reverse the trend of losses which the Club had been suffering. That was a business decision which the Committee was perfectly entitled to take and with which we have no locus to interfere."

1. The Tribunal were there rightly identifying that the committee was the decision#maker. It ascribed to it the approval of the removal of the secretary role and came to a conclusion that that was a business decision essentially on financial grounds.

1. The Tribunal went on to discuss the second strand to the submissions that had been made to it on behalf of the Claimant. It summarised those in these words (paragraph 61):

"Even if we were to find that the proven reason for dismissal was indeed redundancy, Mr Lefevre was also critical of the consultation process followed – especially the denial to the Claimant of access to the Whiteford Report – as well as of the Respondent's efforts to appraise him of alternative positions in the organisation until after his dismissal had been intimated to him. Finally, Mr Lefevre was critical of the role of Jinty Kerr in and the conduct of the appeal process."

1. The Tribunal dealt with those arguments in respect of consultation at paragraph 70:

"We were not persuaded by Mr Lefevre's alternative submission that the degree of consultation with the Claimant and the information provided to him as part of that process rendered the dismissal unfair. Even on the hypothesis that the Claimant was at any disadvantage by not having sight of the financial information in the Whiteford Report at the first meeting, that was not the case by the time of the second meeting. The Claimant was also particularly well placed in that regard since he processed virtually every important document in relation to the club's revenue and expenditure. In consequence, he had a full and detailed knowledge of the club's sources of income and of expenditure and of the financial circumstances."

1. Accordingly, and having considered submissions that might have been made but were not, such as the question of selection, the Tribunal rejected the claim.

1. The grounds of appeal were, until argument before us, entirely allegations of perversity. Perversity is a very high hurdle. It is unnecessary for us in this Judgment to recite the various different ways in which courts and Tribunals have sought to articulate the lengths to which an argument has to go to satisfy the requirements of perversity. The conclusion of fact must be one that is "wholly impermissible", flies in the face of reason or confounds all logic. It has been said that it must be such as to cause astonished gasps from the well#informed observer. It is effectively a submission that there is no evidence to support a particular finding or that, taken as a whole, the evidence is such that no reasonable Tribunal could possibly reach the factual finding it did.

1. Here, Mr Napier's argument did not, as we saw it, centrally demonstrate that the Tribunal could not on the evidence before it have come to the conclusion it did. It had to determine what the reason for dismissal was. It had evidence before it as to that, called both by the Claimant and the Respondent. Significantly, it had considerable documentation. We have had three bundles of productions put before us for this appeal in addition to a core bundle. That is indicative of the wealth of material available to the Tribunal, which considered it over a period of three days of hearing.

1. On the material that is evident from the summary of fact we have already set out, it is plain that a finding that the Claimant was dismissed by reason of redundancy was open to the Tribunal. The fact that the Tribunal might also have, had it so assessed facts, been able to come to a conclusion that the principal reason was not redundancy but factors other than redundancy and personal to the Claimant might equally have not been susceptible to any challenge on the ground of perversity, but that is not the decision that the Tribunal reached. Accordingly, on perversity, viewed alone, the Tribunal plainly was entitled to come to the conclusion it did, and this is not one of those exceptional and unusual cases that surmounts the high hurdle we have described.

1. However, that does not pay justice to the real gravamen of Mr Napier's submissions. He took us through the first Whiteford report. He demonstrated the extent to which that contained material adverse to the Claimant that was removed from the edited report. He demonstrated that the edited report contained some material favourable to the Claimant that the first report had not included. He was able to suggest by comparison of the organograms that there might well have been a motive hostile to the Claimant for removing the names of the departmental managers from the edited report, whereas the name of the Claimant had already been removed from the first report. This material, he submitted, had been before the Tribunal, but the Tribunal in setting out its conclusions did not deal with any of the differences between the first and the edited reports, nor did it set out and discuss any explanation that it might have had for those differences, nor, he submitted, could the conclusion reached be accepted unless the Tribunal had first done so. The decision would be perverse not in the sense that the findings of fact were not open to the Tribunal but because no reasonable Tribunal would not set out and deal with the allegations that had been made by the Claimant as part of his case. It should not have ignored the substantial direct and circumstantial evidence of inconsistency and inaccuracy in the explanations for the dismissal put forward by the Respondent. It could not reach its decision without dealing with the documented averments of the Claimant to the effect that the accounts given by the Respondent's two witnesses – that is, Mr Whiteford and Mr Alasdair Kerr – were not to be accepted. It required to deal in detail with the changes made in the two versions of the review.

1. As to that, we must draw back and ask what the principles are that are applicable. We have dealt with the principles that relate to a charge of perversity simpliciter, but these two further matters need to be stated. First, a Tribunal in its decision is not required to set out and deal with every dispute of fact. It does not have to dot every "i" nor cross every "t". It must say sufficient to indicate to the parties why one has succeeded and the other lost. However, it is no requirement of a decision that it, for instance, sets out and deals with the credibility of witnesses if upon a proper analysis of the issues that was not central to its decision.

1. The second point is that a Tribunal must focus upon the main questions that fall for its decision. One would usually expect clearly articulated grounds of argument to be dealt with so that the parties understood why it was that those arguments had been accepted or rejected, but beyond that there is no need for a Tribunal to say more; indeed, appellate courts have recently and frequently been critical of the length of many Tribunal decisions. Here, applying focus, the question was what the reason for dismissal was. In the circumstances, that was a question of causation. There were, effectively, two choices. The Tribunal had to choose which it preferred. If it was the reason contended for by the employer, it had to be satisfied of that on the burden of proof. As we have indicated, the Claimant had to prove nothing in this respect save to raise sufficient to show that the employer had not made out the reason it asserted.

1. The Tribunal dealt, however, with those central arguments. The differences between the Whiteford reports were potentially relevant, but they were not central to the question of what the reason was. The differences did not establish any reason or lack of reason; rather, they gave ground for asking some questions. Those questions were open to the parties and undoubtedly would have been asked in the process of examination and cross#examination. They did not, and nor could they, have led to a conclusion that the facts were other than the Tribunal ultimately determined. Little, as it seems to us, in this case depended on credibility. It was not one of those cases in which rival groups of witnesses describe the same central event from different perspectives. Credibility then may be of critical importance and would need to be set out. Here, there was, as we have indicated, such ample documentation, in particular by way of minutes, to show what the club's decision was, apparently acceded to by Mr Foley, who gave evidence as a witness on the Claimant's behalf, when he indicated that he had fought but had lost the battle in committee to retain the secretary post.

1. We consider that the Tribunal might well have said more than it did about the unusual circumstances of the Whiteford reports coming to light and about the differences between them, and as to whether the Tribunal should draw an inference from those differences as to whether the Respondent club sought to cover up the real reason for dismissal, that being hostility to the Claimant rather than advancement of restructuring. But they did say this about the reports (paragraph 28):

"On or about 29 February 2008, Mr Whiteford produced a second version of his Report […] for the Respondent's bankers. The second version of the report was very similar to the first save that certain of the criticisms of the Claimant which had been noted in the first version were removed by Mr Whiteford. His reason for removing them was the Report was to be shown to a third party (the bank)."

1. The Tribunal there dealt with a reason for the difference in the reports. That reasoning would give no room for the adverse inference to which we have referred. It is a finding of fact, and it was open to the Tribunal. It is plain that the Tribunal there recognised the fact of two reports as it did when it recited Mr Lefevre's submissions to it. It was well aware of the issue; what it said was sufficient, in our view, to resolve that issue, even if it might well have said more than it did. It is not an error of law to say as little as it did.

1. We turn to the second part of Mr Napier's submissions to us. He submitted that the finding in respect of consultation was in error. He described this, too, as perverse (see paragraph 18 of his skeleton argument). He argued that the Tribunal had dealt with the arguments on consultation at paragraph 70 by simply asserting that the Claimant was not disadvantaged in the consultation because he had all the information he needed to make his case. That, says Mr Napier, simply did not address the "central point". That was, in his words, that if as the discrepancy between the two versions of the report demonstrated the Respondent had taken the decision to get rid of the Claimant by the time the first version was compiled, there could have been no true consultation as the law required.

1. As we have indicated, an argument that is raised should be dealt with by a Tribunal. Was this argument, on the material shown to us, a central argument, as Mr Napier has described it, and was it raised by the Claimant? We have been shown the summary grounds of argument to which Mr Lefevre would have spoken at the conclusion of the case. Under the heading of the "Pleadings and written evidence" he said, amongst a number of paragraphs, at 3.xi:

"The business review of 14th February 2008 contains as stated the various elements condemning the Claimant and indicative of the likelihood that a decision had already been made to make his position redundant just as the business review bearing the date of 29th February 2008 shows the attempt to redact therefrom the entries, indicative of the probability that the Respondent had already set its mind against the continued employment of the Claimant."

1. The submissions do not come back again to any challenge to the consultation process. It is plain from the way in which the Tribunal set out the arguments addressed to it by the Claimant that it did not see itself as having had an argument contained, as it could only have been contained, in writing, in this paragraph to which we have just referred to the effect that the dismissal had been so predetermined that consultation thereafter was a hollow exercise.

1. As to paragraph 3.xi itself, it seeks to draw attention to the difference between the business review of 14 February and that of 29 February. As we have just pointed out, the Tribunal concluded that there was no sinister motive for that; the sanitised version was for the bank, upon a no doubt understandable basis that personal material would be reduced if not eliminated from any third#party communication. If the Employment Tribunal drew the conclusion that the difference between the reports was such that one could infer that the decision was unavoidable, then plainly what is said in paragraph 3.xi would reflect on consultation, but, having concluded as it did as to the purpose of the edited business review, the point in the way it is expressed becomes redundant. The argument then was not the main thrust, if it was any thrust at all, of the argument about consultation; it was not the way the matter was put. The Tribunal had the material in front of it, it said it considered the overall position to assess the overall fairness, and we are not in the event satisfied that here there was an argument clearly made which the Tribunal did not deal with as it should have done.

1. It follows that we cannot conclude that the Tribunal in dealing with consultation was in error in failing as alleged to deal with an argument put to it. It follows that on this ground, too, the appeal does not succeed and must be dismissed.

1. For the reasons we have given, we reject the argument that the decision was perverse. We do not consider that in the particular circumstances of this case this Tribunal was in error of law in failing to deal at greater length than it did with the differences between the first and edited Whiteford reports and any conclusions to be drawn therefrom. We do not consider that it was in error of law in dealing with such matters of credibility as it might have done, since it made relevant findings of fact, bearing in mind its proper focus on the reason for dismissal, and we are satisfied that, adopting as it did an unchallengedly correct approach in law to the question of consultation, it did not commit any error of law in procedure by ignoring an argument properly and clearly addressed to it in respect of the fairness of that consultation. It reached a decision that it was entitled to reach.