Flintshire County Council & Anor v Moore & Anor UKEAT/0379/11/DA
Appeal by the respondent against an ET decision which found that the 2 claimants had been unfairly dismissed. Appeal dismissed, although a small point relating to a Polkey deduction was remitted to the Tribunal.
The claimants were both teachers at a small primary school. The school discovered that there was going to be a significant shortfall in the school's funds and so needed to make one full time teacher, and possibly extra, redundant. All teachers, apart from the Head Teacher, Deputy Head and a special needs teacher, were in the pool for redundancy. The school considered the draft criteria for the selection of redundancies and sent these to the relevant unions for their comments, which had to be made within 6 days. The criteria included school development plan priorities which was also given the highest weighting. Both claimants scored nil on this criterion which meant that their overall scores were the lowest and they were made redundant. If one of the claimants had been attributed the highest mark under this head, she would have been retained, whereas the second claimant would still have scored the least and would still have been made redundant. The Tribunal considered the fairness of the selection process in terms of consultation, pool for selection and selection criteria. The Tribunal accepted that the time for consultation was too short, they could see no justification for the special needs teacher not to be in pool for redundancy, and criticised the school development plan criterion because it failed to reflect a teacher's competence if their name did not appear in the school development plan. The school development plan prioritised areas in which the school needed to make improvements. However, the claimants' names were not in the school development plan because the areas in which they taught were not ones that needed improvement. The Tribunal ruled that no Polkey deduction should be made in either case because it was simply not possible to make any assessment of the likelihood of the claimants being made redundant in any event.
The EAT upheld the Tribunal's decision in every respect. The Tribunal was fully entitled to say that the 6 day consultation period was wholly insufficient and more time could and should have been given. The issue of the pool for selection should and could have been investigated had the consultation period been longer. Finally, the Tribunal were entitled to reach the conclusion that the selection criteria were unfair; the only reason the claimants were not in the development plan was because they had performed well in the past. The issue of Polkey was also raised. The EAT ruled that no Polkey deduction should be made to the first claimant because the Tribunal were entitled to take the view that it was not possible other than by speculation to take a view as to what the result of a fair process would have been. However, they remitted the Polkey issue back to the Tribunal in the case of the second claimant, who would still have come bottom even if she had scored the maximum score in the school development criterion, because it was not fair or appropriate for the school to be faced with a position where it was effectively assumed that she would have been employed indefinitely.
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Appeal No. UKEAT/0379/11/DA
EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
At the Tribunal
On 15 September 2011
Before
LORD JUSTICE CARNWATH, MR T STANWORTH, MS P TATLOW
(1) FLINTSHIRE COUNTY COUNCIL; (2) GOVERNING BODY OF YSGOL-Y-FRON & OTHERS (APPELLANTS)
(1) MRS L C MOORE (DECEASED); (2) MRS D LUND (RESPONDENTS)
Transcript of Proceedings
JUDGMENT
**APPEARANCES**For the Appellants
MR RICHARD BRADLEY (of Counsel)
Instructed by:
Flintshire County Council
County Hall
Mold
CH7 6NR
For the Respondents
MR TOBY KEMPSTER (of Counsel)
Instructed by:
Thompsons Solicitors
Agincourt
14-18 Newport Road
Cardiff
CF24 0SW
UNFAIR DISMISSAL
Reasonableness of dismissal
**Polkey deduction**The Employment Tribunal were entitled to find that the procedure adopted by the school authorities for selecting two teachers for redundancy was unfair, because they had left an inadequate time for effective consultation, and adopted criteria which unfairly discriminated against the Claimants. The decision was upheld save that the issue of a Polkey deduction in respect of one of the claimants was remitted to the remedy hearing.
**LORD JUSTICE CARNWATH****Introduction**- This is an appeal against the decision of the Employment Tribunal in relation to redundancies made by a school called Ysgol Y Fron School, which is a small primary school with seven teachers. The Claimants were both teachers at the school: Mrs Lund, who had been employed there since 1982; and Mrs Moore, who had been employed since September 2001, and by the time of the dismissal was working 0.7 FTE teaching special needs. She sadly has died since the dismissal.
- In October 2008 it became apparent that there was going to be a significant shortfall in the school's funds. There was a meeting of the governors on 16 October 2008, at which it was accepted that the school would have one class too many by the following year and that there would be a budget deficit of an estimated £57,000. At a meeting on 21 January 2009 it was confirmed that there was a possibility of one full time teacher plus extra potentially having to be made redundant. Things then became firmer at a meeting on 3 March, at which it was agreed that there would be a redundancy affecting 1.6 posts, on the basis that by then there would be a deficit of £75,000 in the year 2009 2010, Compared with a total income of £455,000, that was clearly very significant. It was agreed that one post would not be sufficient, and that two would mean that class sizes would have to rise above 30, which was not permissible. At the same time it was decided that the redundancy would have to be implemented quickly in order to provide the necessary reductions for the following year. This would involve giving notice by the end of the spring term so that dismissals could take effect by the end of the summer term.
- At a meeting on 5 March the staff were given notice of these expected redundancies. A minute of the subsequent Staff Disciplinary and Dismissals Committee held on 9 March reported that the staff had been informed at that meeting of the possible redundancy situation, and they had been asked if they could see ways of reducing expenditure; for example, by voluntary redundancy, reduced hours, job sharing et cetera. They were asked to consider that and write to the Head by Tuesday, 10 March. At that meeting on 9 March the Committee considered the draft criteria for the selection of redundancies. It was agreed that the following should be the relevant criteria: curriculum responsibility, overall aspirations of the school, professional development, school priorities plan, and episodes of sickness absences over the last three years. At another meeting on 11 March it was agreed that all the teachers would be in the pool for redundancy except for the Head Teacher, the Deputy Head and the teacher currently occupying the position in the special needs unit, a Mr Noon.
- On 12 March notices were sent to the relevant trade unions and also to staff, inviting comments on the selection criteria to be made no later than 18 March, six days later, in time for a meeting of the governing body due on the 19 March. The three unions responded to that. The Association of Teachers and Lecturers (ATL) on 19 March wrote referring to the redundancy situation. The writer said that he had not been able to consult the full time officials who would normally be at his disposal, but made the following observations:
"1. It is unclear what 'contributions to wider school aspirations' would be counted.
2. Training benefiting the school needs clarification - it could be a matter of opinion whether certain training has had an impact on the school.
3. Using periods of absence as a criterion is a major concern as it does not take into account the reasons for those absences. There is a separate policy and procedure for dealing with sickness absence and redundancy cannot be used as an alternative."
- The National Union of Teachers (NUT) responded by an email, also dated 19 March:
"Thanks for the criteria. While understanding your position I have reservations about three criteria:
1. Wider school aspirations should be linked to the SDP [school development plan] and suggest acceptable evidence.
2. Continuous professional development should again be linked directly to the SDP and include evidence of how it has been 'cascaded'. You should bear in mind that not every member of staff will have had the opportunity to attend relevant courses because of e.g. lack of funding, family commitments etc.
3. Absence is really tricky and ideally [should] not be used. An appeal would undoubtedly use this … […]
Staff should always feel comfortable with the notion that it is a POST that is being made redundant, not a person!"
- Last, the National Association of Schoolmasters Union of Women Teachers (NASUWT), through its Flintshire Negotiating Secretary Mr Nixon, sent an email, which in fact was too late for the 19 March meeting because it was sent on 23 March. He said:
"Redundancy selection criteria 'should be designed to avoid … constituting a judgement on the teachers professional capability.' The principle of redundancy selection should be 'not needed' rather than 'not wanted'.
Use of absence or capability criteria can be seen by a tribunal as misuse of a redundancy procedure to secure via dismissal which should be covered by sickness/absence, capability or disciplinary procedures.
The main criterion should be based on the result of a skills audit.
The criterion 'your contribution to wider school aspirations' is totally subjective! I'm sure most people would be unsure as to what the governors will be measuring when assessing against this one."
- He attached a page from his union's advice under the heading, "Do the proposed selection criteria conform to the test of objectivity and fairness?" That pointed out that the union had been keen to argue for "last in, first out tempered by the curriculum", which was considered to be the most objective criterion. It went on to consider possible selection criteria, and included this:
"Performance - this is far too subjective unless based on clear evidence, but if there was such evidence it should have been dealt with through further support and training or ultimately capability procedures;
Skills and knowledge (experience) - these are reasonable criteria providing they are assessed objectively using the outcomes of an audit of staff skills. The data sought by any skills audit should be limited to that which is necessary to apply the criteria, to avoid any temptation to apply additional ad hoc factors, or suspicion that this may have taken place;
Curriculum needs - this is a reasonable criteria if it is in accordance with the school/college development plan."
- We have quoted from those responses in some detail, because, as will be seen, they form a significant element in Mr Bradley's submissions for the school authorities.
- Going back to the chronology, the governors met on 19 March and, in response to the union comments and possibly for other reasons, decided to give weighting to the criteria. The result was the following weighting: five for the school development priorities, four for curriculum responsibilities, three for wider contribution to the school's aspirations, two for continuing professional development, and one for periods of absence. For each category it was possible to score between nought and three, to which score the appropriate weighting would be applied.
- On 31 March the Staff Disciplinary & Dismissals Committee adopted those proposals, and at that stage they had an opportunity to consider the NASUWT's representations. On the same day they appraised each candidate against the criteria, and the two lowest-scoring candidates were the two Claimants before us. We have in the bundle the table setting out the criteria and the marking for each of the candidates, although only the two Claimants are specifically identified. The scoring resulting from those was, for Mrs Moore, 28, and, for Mrs Lund, 18. The other candidates scored 40, 40, 36, 33 and 35. The striking feature is that for the school development plan priorities, which had been given the highest weighting, all the candidates except for Mrs Moore and Mrs Lund scored the highest score of 15, whereas they scored nil.
- It is to be noted that the actual wording of the criterion in the relevant form was this:
"State clearly what impact you feel you have had on school priorities either currently or within the past three years."
That appears to suggest that the candidates were expected to make their own judgment about their performance, presumably subject to some sort of appraisal by the Headmaster or the governors. However, what in fact seems to have happened was that all those who had responsibilities within those development plan priorities were given the highest mark of 15. It is also apparent from those figures that if Mrs Moore had been attributed the same score under that head, she would have been well up among those who were to be retained, whereas Mrs Lund, even with an additional 15 points, would still have been at the bottom of the table.
- Again going back to the chronology, on 1 April the two Claimants were informed that they had been selected for redundancy, and they were invited to a meeting of the committee on 27 April to make representations. Paragraph 18 of the decision explains what happened there:
"Both Claimants were represented by Mr Nixon and he challenged the need to make redundancies; indicated that the Deputy Head and Mr Noon should have been put in the pool; and made a number of other representations. In the minutes it is recorded that the Head Teacher stated that if a school was performing well in a particular area it would not feature in the school development plan. In her witness statement, Mrs Moore indicates that in fact it was she had said this, and that no one disagreed with it. Certainly as far as we understand it that basic proposition is not in dispute and was not disputed at the meeting, irrespective of who raised it. In our judgment this is a point of some significance. No one at that time at least within the governing body appears to have appreciated the significance of the point - that the criteria themselves were seriously flawed in that they failed to fairly reflect a teachers competence whose name did not appear in the school development plan, and failed to reflect the teachers contribution to the school over the previous years. Certainly at the time nobody did anything to consider the point."
- Each of the Claimants then appealed. The appeals were heard and dismissed respectively on 14 May and 18 May. There was no reassessment of the criteria at that point. As a result, the Claimants' employment came to an end on 31 August 2009. There were subsequent advertisements for a full time temporary teacher and an 0.8 FTE teacher, but the Claimants were not successful in their applications for those jobs.
- The first two issues raised before the Tribunal are no longer live. The first submission was that the dismissals were a sham, in that one or both of the Claimants had been targeted by the Head Teacher, Mr Davies. The Tribunal rejected that, accepting that the decisions had been made in good faith in very difficult circumstances. That is a point that has not been pursued here. Secondly, there was an argument about whether there was a genuine redundancy situation. There was some argument about whether the school should have taken on extra staff two years before. However, by the end of the Tribunal hearing it was common ground that it was a genuine redundancy situation.
- So the issues before us relate solely to the Tribunal's decision as to the fairness of selection. As to the proper approach to that, there has been no dispute before us. The law has been well settled at least since Williams and Ors v Compair Maxam Ltd [1982] ICR 156. In summary, the steps required in a redundancy are processes of warning, consultation (including consultation as to selection criteria), selection in accordance with the criteria, consideration of representation as to the application of the criteria, and assistance in obtaining alternative employment. In particular, we note the following words of Browne Wilkinson P:
"The employer will seek to give as much warning as possible of impending redundancies so as to enable the union and employees who may be affected to take early steps to inform themselves of the relevant facts, consider possible alternative solutions and, if necessary, find alternative employment in the undertaking or elsewhere. [page 162(c)]"
We were referred also to Polkey v A E Dayton Services Limited [1988] ICR 142, 162(h) where Bridge LJ said:
"In the case of redundancy, the employer will not normally act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimise redundancy by redeployment within his own organisation."
- On the other hand it is clear that the decision as to the pool for the criteria of selection and the application of the criteria are decisions for the employer, on which the Tribunal should not substitute its own views. The Tribunal is concerned whether the actions are those of a reasonable employer and within a range of reasonable responses. The Tribunal were clearly aware of those principles; at paragraph 31 they say:
"[…] we have to judge the fairness of the dismissals under the ordinary principles. We bear in mind that all of the questions we have to ask as to the composition of the pool, the fairness of the selection criteria, the correctness of the weighting, the scoring of those criteria and the ultimate selection, are ones to which the range of reasonable responses test applies. We are not determining whether we would or would not agree with any particular aspect, but whether a reasonable employer could have conducted the redundancy selection procedure as the respondent did."
- There are three issues relating to fairness. Although they are to some extent connected, we will deal with them in the order in which they were argued. They are: first, consultation; second, pool for selection; and third, selection criteria. On the first, the case for the Claimants was that the time for consultation was simply too short. They pointed to the fact there was less than a week for them as individuals or for the trade unions to make submissions as to the appropriateness of the selection criteria, and the selection itself was made only 11 days later. It was not until some three weeks later that there was an effective opportunity to make representations to the committee. It had been known since October 2008 that redundancies were likely, and that should have given time for a more measured approach. In particular the six day period was wholly insufficient to allow them or the trade unions to make serious representations about the criteria.
- The Tribunal accepted this submission. In paragraph 35 they said:
"The Claimants submit effectively this was consultation in form and not substance and that in reality the truncated timescale gave no opportunity for genuine consultation. In our judgment the consultation period was unreasonably short in two respects. Firstly we can see no good reason why the consultation began in March when it was known as early as October the previous year that at least one member of staff would have to be made redundant. In addition the six day consultation period on the selection criteria was clearly insufficient. Had it been longer the points made at the dismissal hearings and appeal hearings about the criteria skewing the selection could have been properly addressed."
- Mr Bradley, for the school authorities, responds that it was not open to the Tribunal to question the decision on this point. Although in October it was anticipated that there would be one less class size, with an estimated budget deficit of £57,000, that was not certain, and indeed in the end it turned out the figure was rather higher. It was also known that there were teachers making applications for headships, and had these been successful the need for redundancies would have been avoided, or in part avoided. He says that in the circumstances it was not unreasonable at that stage for the governors to report the projected deficit without setting in train the redundancy process, which might cause unnecessary anxieties and moves by others to seek different jobs when that might not in the end be necessary.
- He makes a separate point that the Tribunal has ignored the responses to the consultation with the trade unions. He submits that this was not a case where the school was flying in the face of the consultations; on the contrary, they took on board the consultations, and adopted the weighting in order to give effect to them. So, he says, there is no reason to think that a longer time for consultation would have made any difference. There was no likelihood of the unions adopting a different line from their policy position.
- We are unpersuaded with respect by either submission. As to the first, it is true that in October the position was not entirely clear. It may be that it would not have been appropriate to begin consultation then. But what was clear was that, if redundancies were going to be necessary within the timescale anticipated, and the process was left until the spring, there was going to be very little time to give the necessary notices to allow the redundancies to take effect before the Autumn term. It is not for us, and it was not for the Tribunal, to say when things should have started. However, there was a meeting on 21 January at which the position had been become rather clearer, and that might well have been a time when the process could have been started. In any event it seems to us the Tribunal was fully entitled to say that the six day period ultimately given was wholly insufficient, and more time could and should have been given if the matter been properly thought about. This is not a case of substituting their view for that of the school, because as far as we know the school did not consider this issue at all in October or January.
- Similarly, on the second point, Mr Bradley's reliance on the union responses depends on looking at only is only part of the picture. He can fairly point to some points in the union responses as supporting the school's approach. For example, the union representatives were at one on the unsatisfactoriness of using sickness absence as a criterion. But on other matters the responses do not speak with one voice. For example, the NASUWT advice dismisses performance as "too subjective", but on the other hand does not exclude reliance on "skills and knowledge" provided they are assessed by "an audit of staff skills". There was no evidence before the Tribunal as to how this might have been put into effect in practice. Nor is it possible to say what would have happened had the unions had more time to discuss these matters either between themselves or with the school, or perhaps more importantly with the teachers.
- What in our view the Tribunal were perfectly entitled to say is that the shortness of the time meant that there was no real opportunity for the points that emerged at the hearing on 27 April to be fed into the earlier discussion when the ground-rules were set in place. No doubt at the stage, as Mr Bradley says, Mr Nixon was looking at the matter principally from the point of view of the individual teachers, whereas earlier he would have been concerned with the interests of the teachers as a group, which might produce a different result. However, it led to the problem, identified by the Tribunal, that at the meeting of 19 March when the criteria were being sorted out, and the meeting on 31 March when they were applied, no-one had sufficiently thought through their practical consequences. Again, this is not a question of the Tribunal substituting their view for that of the school; simply that the matter was not properly considered at all. In our view therefore this aspect of the Tribunal's decision was unimpeachable in law.
- That conclusion provides the background for the other two points. The point about the selection pool is a relatively narrow one and in practice only applies to Mrs Moore. At paragraph 16 the Tribunal explain that they fully accepted the need to exclude the Deputy Headmaster from the pool, but they did not take the same view in relation to Mr Noon unless there was no other teacher personally capable of filling the role. It had not been disputed that Mrs Moore would have been so qualified. They return to the point at paragraph 38, where they said this:
"We entirely accept that the unit was separately funded and that if for any reason it had been decided to close the School or to move the unit, the likelihood was that the teacher then in post would move with the unit. We can see no justification by reason of that for Mr Noon being taken out of the pool for selection. Given that the post was separately funded and therefore had to be filled, it was in our view perfectly rational for the governors to conclude that it would need to be filled going forward, but that could perfectly easily have been accomplished by it being the first post to be filled in the redundancy selection procedure with any teacher who had been considered for it, if unsuccessful, falling back into the larger group for general selection. If that had happened, certainly we believe that Mrs Moore, who had very considerable experience in that field, would have been considered against Mr Noon and we have no reason to suppose that she would not have had a reasonable chance of being selected for that post ahead of him. By his absence from the pool that possibility was excluded and we can see no rational or reasonable justification for that. Essentially Mr Noon was removed from the pool for no better reason than that he happened to be occupying a post which was to be retained going forward."
- Mr Bradley says that that was another example of the Tribunal substituting their own view for that of the school, on a matter on which there could possibly be two views but it could not be said that the school's view was unreasonable. He says also that the Tribunal ignored certain factors. First, Mrs Moore was a part time employee working 0.7 FTE, so that putting her into Mr Noon's role would increase the requirement for redundancy amongst other teachers. Secondly, Mrs Moore had never applied for the post, which had been vacant in September 2008 when Mr Noon was appointed, nor had Mrs Moore suggested that she wanted to fill that post as part of the redundancy consultation. On the contrary, she had indicated that she would be prepared to reduce her time to 0.3 FTE.
- If this had been the only point in the case, we would have seen force in the view that it was a matter of judgment for the school, although it is not entirely clear to us to what extent the points made by Mr Bradley were in fact in the governors' or the committee's mind. However, we think that, taken with the consultation point, the Tribunal's decision can be upheld on this point also. This matter was clearly raised by Mrs Moore and her representative at the meeting of 27 April. We are entitled to infer from that that she would have wished at least to have been able to consider putting herself forward for that post if it had been possible at the earlier stage. It is quite clear that by the time of that meeting the die was effectively cast. If an attempt had been made to change the pool at that stage, no doubt Mr Noon would have had objections to make, and the whole process would have been delayed beyond the time in which it had to be completed. This is an issue that could and should have been investigated, earlier had the consultation time been longer.
- The last point relates to the selection criteria. As has already been made clear in this Judgment, the point was made at the meeting of 27 April, that there was a fundamental flaw in the criteria because they failed to reflect a teacher's competence if their name did not appear in the school development plan. At paragraph 41 that point was expanded:
"41. The Claimants fundamentally make the point that the school development plan prioritises those areas in which the school feels there is a need to improve and they point to the fact that every other teacher within the school scored 15 in respect of that, which indicates they are making a current contribution to the school priorities. They say, and it has not seriously been disputed, that the reason their names are not included in the school development plan was because the areas they taught were not ones that needed improvement. Whilst by definition the school development plan reasonably and sensibly concentrated on the areas in which improvement was needed; to use it as the single most significant factor in redundancy selection effectively meant that the teachers whose subject areas did not require improvement were excluded from being able to score at all. Unless there were some other compensating criteria which rewarded good performance, effectively, they were being penalised for competence. This is not compensated for by the fact that they were given maximum scores for curriculum responsibilities and that they taught core subjects, in as much as that also applies to teachers whose names also appear on the school development priority list.
42. Their fundamental point therefore, is that even given the broad ambit of discretion to the Governors to determine the appropriate criteria, and even given that the test we have to apply is not whether we would or would not have adopted those criteria, that they are so unreasonable as they automatically prejudiced the teachers who had demonstrably achieved the best results in the past that they are in and of themselves outside any band of decision making reasonably open to the Governors."
- The Tribunal in effect accepted those submissions, saying (at paragraph 44) that the school must:
"[…] create a reasonably level playing field so that the application of the criteria does not automatically pre select particular individuals. In this case, by adopting the criteria and weighting those criteria as they did, they effectively guaranteed that those who had existing roles which had been identified in the school development plan were bound to score more highly in the redundancy selection criteria, whereas those who were not, would effectively automatically be penalised. […]"
- Mr Bradley repeats his submissions to the Tribunal that this point was effectively requiring the Tribunal to substitute its views. In effect he says that the Tribunal, who had no knowledge of the merits or de merits of the other candidates in the pool, have concluded that Mrs Lund and Mrs Moore were competent, experienced teachers who should not have been made redundant. He also notes that if all the factors were weighted equally, it would have produced the same result. He also criticises the observations of the Tribunal at paragraph 46, that it should have become obvious to the governing body at the time they adopted the criteria, and by the time they came to do the scoring, that something had gone seriously awry with the scores given that the only distinction between the two teachers who were to be made redundant and those who were not was the criterion of their current contribution to the school development plan. Mr Bradley says that this stage was only reached at the end of the process and it would have been wholly unrealistic to expect the school to go back over the criteria then without incurring legitimate complaints from the other teachers.
- We accept that the criteria needed to be settled at a reasonably early stage before the process of applying them to the individual candidates. That indeed is what the established principles seek to achieve. But of course this also goes back to the consultation point. Had the school, with the assistance of the Claimants and their representatives, been alerted to this point in early March or before the criteria had been finalised, they would have had time to alter them. Mr Bradley says also that there is a fundamental inconsistency between the Tribunal's emphasis on past performance of the teachers and the union representations, which emphasise that this should be about the post and not the individual. However, as we have already said, that is too narrow a view. It may be that the Tribunal's suggestion for taking into account past performance would not have been an acceptable way forward. But it is clear from the extracts we have read from the union representations that this is not the only possibility. As we have said, the NASUWT referred to the use of results based on "a skills audit". It was not necessary for the Tribunal to examine how that could be done. What mattered was that the criteria as they were resulted in these two Claimants being unfairly excluded merely because their particular subjects were not in the development plan, the only reason for that apparently being that they had performed well in the past. For these reasons it seems to us that the Tribunal were fully entitled to reach the conclusion they did.
- There is one other point, which relates to what is called the Polkey deduction. In that case at page 163(D) Bridge LJ said:
"If it is held that taking the appropriate steps which the employer failed to take before dismissing the employee would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation or, in the case of redundancy, no compensation in excess of his redundancy payment."
The principle is well established in employment practice. We were referred to a recent statement by this Tribunal under Elias J in Software 2000 Ltd v Andrews and Ors [2007] IRLR 568. (In looking at that case it has to be borne in mind that at that time there was in effect section 98A(2) of the Employment Rights Act 1996, the effect of which was that if the employer could show on the balance of probabilities that he would have decided to dismiss the employee anyway, there would be no award. That explains, as we understand it, the reference in paragraph 54 of the Judgment to the need to consider whether there was a chance of dismissal, "but less than 50 per cent." Section 98A(2) has since been repealed. Subject to that however there was no dispute before us that this Judgment embodies the appropriate principles.); the principles are summarised in paragraph 54, which says this:
"(1) In assessing compensation the task for the Tribunal is to assess the loss flowing from the dismissal, using its common sense, experience and sense of justice. In the normal case that requires it to assess for how long the employee would have been employed but for the dismissal.
(2) If the employer seeks to contend that the employee would or might have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, it is for him to adduce any relevant evidence on which he wishes to rely. However, the Tribunal must have regard to all the evidence when making that assessment, including any evidence from the employee himself. […]
(3) However, there will be circumstances where the nature of the evidence which the employer wishes to adduce, or on which he seeks to rely, is so unreliable that the Tribunal may take the view that the whole exercise of seeking to reconstruct what might have been is so riddled with uncertainty that no sensible prediction based on that evidence can be made."
- Earlier in that Judgment at paragraph 38, following a reference to King v Eaton Ltd [1998] IRLR 686, it is made clear that what the consequences are of such a situation. Paragraph 38 reads:
"It is important to note that the court is not making a finding that employment would have continued indefinitely; it is simply saying that the nature of the exercise is too speculative to enable the court to take any sensible view about that. It is not practical that it should try to do so. The consequence of that approach, however, is that the Tribunal must thereafter make the assessment on precisely the same basis as if it had found that employment would have continued indefinitely. That may work an injustice to the employer. That fact alone cannot of course dictate that a Tribunal should undertake an exercise which it justifiably believes is simply too speculative, but it does suggest that the Tribunal should not be unduly reluctant to engage in the process."
- The Tribunal in this case dealt with the matter very shortly. They said at paragraph 48:
"We have been asked to consider the Polkey question that in the event that we consider that the process adopted was unfair, what the chance was of the Claimants being selected for redundancy in any event. We concluded in the light of the fact that we have decided that the process was fundamentally flawed as outlined above, that it is simply not possible to make any assessment of the likelihood of the Claimants being made redundant in any event and accordingly that there will be no Polkey reduction to any compensation awarded to them."
- Mr Bradley submits that the Tribunal has not given adequate weight to Elias J's guidance. This was a case where they ought to have grappled with the issue, and at least in the case of Mrs Lund it should have been reasonably clear that a reduction should be made. On the other side, Mr Kempster says that this was a matter for the judgment of the Tribunal and it would be wrong for us to interfere unless they have gone wrong in principle.
- In the case of Mrs Moore we think that it is not possible to upset the Judgment. As we have said, had she been entitled to a score for the school development criteria as had the others, she would have been among those likely to be retained. There is also the factor of Mr Noon's post, for which she might have been able to apply. The Tribunal were entitled to take the view that it was not possible other than by speculation to take a view as to what the result of that process would have been.
- In relation to Mrs Lund on the other hand, we do not think they were justified in taking that course. In any view she would have scored at the bottom of the list. There is not in her case the complication that she might have been able to apply for Mr Noon's job. It is not in our view fair or appropriate for the school to be faced with a position where it is effectively assumed that she would have been employed indefinitely. In our view the Tribunal should have considered a Polkey adjustment in her case. In fact the Tribunal have remitted the matter for the remedy hearing, but the effect of their decision, as we understand it, is that they have ruled out any consideration at that stage of the Polkey reduction. In our view that matter should be open for consideration at the remedy hearing.
- For those reasons we will dismiss the appeal subject to the one point that we will reverse the Tribunal's finding in relation to the Polkey adjustment in Mrs Lund's case, and refer that to the remedy hearing.
Published: 23/10/2011 10:52