The claimants were employed by the respondent, who, in response to the Agenda for Change process, decided to re-band the posts of 22 employees, including the two claimants, which meant that there would be a reduction in level and pay. All employees were offered 2 years pay protection if they agreed. All but the two claimants agreed, the claimants’ contracts of employment were terminated and they were re-engaged on the lower band but without pay protection. They chose to continue employment on those terms. Their claims of unfair dismissal and unlawful deductions from wages failed at the ET, the ET finding that the respondent had showed a good business reason for the re-banding and that a potentially fair reason, SOSR, had been made out by the respondent. As to fairness, the ET found that there had been an absence of consultation both with the trade union and the claimants but overall the dismissal was fair. The claimants appealed.

The EAT dismissed the appeal. They rejected the submission that the ET had fallen into error in failing to take into account the lack of consultation because the breaches of the partnership principal established by AFC occurred well before the disciplinary process leading to the dismissals effective in 2010. That said, the Tribunal plainly did not disregard the background. Secondly the ET had carried out the exercise required by s98(4) and judged the fairness of the dismissals as at the effective date of termination in 2010. Thirdly, the Tribunal had taken into account three relevant factors in reaching its conclusion that dismissal for the prescribed reasons, SOSR, fell within the band of reasonable responses.

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Appeal No. UKEAT/0324/12/DM

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 10 January 2013

Before

HIS HONOUR JUDGE PETER CLARK

MR M CLANCY

MR D SMITH

(1) MR M D SANDFORD 

(2) MR G PARKIN (APPELLANTS)

NEWCASTLE UPON TYNE HOSPITALS NHS FOUNDATION TRUST  (RESPONDENT)

Transcript of Proceedings

JUDGMENT

For the Appellants
MS J CALLAN (of Counsel)
Instructed by:
Thompsons Solicitors
The St Nicholas Building
St Nicholas Street
Newcastle upon Tyne
NE1 1TH

For the Respondent
MS H STOUT (of Counsel)
Instructed by:
Samuel Phillips Law Firm
Gibb Chambers
52 Westgate Road
Newcastle upon Tyne
NE1 5XU

UNFAIR DISMISSAL – Reasonableness of dismissal

SOSR dismissals. New, less favourable terms and conditions of employment offered and refused by Claimants. Contracted terminated on notice with offer of re-engagement (the accepted). ET held' dismissal fair. No error of law shown. Claimants' appeals dismissed.

1. This is an appeal by the Claimants, Messrs Sandford and Parkin, against the reserved Judgment of an Employment Tribunal sitting at Newcastle upon Tyne, promulgated with reasons on 16 March 2012 dismissing their claims of unfair dismissal. Further complaints for unauthorised deductions from wages by both Claimants were also dismissed; that ruling does not form any part of this appeal.

1. The Respondent here and below is their former employer, Newcastle upon Tyne Hospitals NHS Foundation Trust. Unusually for an unfair dismissal case the Employment Tribunal hearing took 14 days and the Tribunal then spent three days deliberating in private.

1. In essence, following the well known Agenda for Change process (AFC) completed in 2004, the Respondent in the course of a reorganisation decided to re-band the posts of 22 employees, including the two Claimants, who were to be reduced one level in the pay structure. All were offered two years pay protection if they accepted the proposed change; 20 employees did so and received that protection. The Claimants refused; their contracts of employment were terminated on notice with an offer of re-engagement on the lower band but without pay protection. They chose to continue in employment on those terms.

1. The Tribunal had to determine, a) what was the reason for the Claimants dismissal. The Respondent relied on some other substantial reason (SOSR); b) if that potentially fair reason was made out, was dismissal for that reason reasonable under section 98(4) of the Employment Rights Act 1996 (ERA).

1. As to the first question, the Tribunal found the Respondent had shown a good business reason for undertaking the reorganisation leading to the re-banding and that both Claimants were dismissed for refusing to accept the new terms and conditions. Applying Hollister v National Farmers Union [1979] IRLR 238 (Court of Appeal), St John of God Care Services v Brooks [1992] ICR 715 and Catamaran Cruisers Ltd v Williams [1994] IRLR 386, the Tribunal found that the potentially fair reason, SOSR, had been made out by the Respondent. As to fairness the Tribunal found that there had been an absence of consultation both with the trade union and the individual Claimants, leading to breaches of the AFC procedure, but overall concluded that dismissal fell within the band of reasonable responses and was fair.

1. In advancing the appeal Ms Callan does not challenge the Tribunal's finding that the reason for dismissal was SOSR. Instead her attack is directed to the finding that dismissal for that reason was fair under section 98(4). In challenging that conclusion Ms Callan focuses on the Tribunal's findings summarised at paragraph 20.4 that neither collectively nor individually did the Respondent consult with either the Claimants or their trade union in any real sense. She submits that the Tribunal fell into error in failing to take those findings into account when addressing the section 98(4) question, particularly at paragraph 12.12.

1. We accept Ms Stout's answer to that submission. First the breaches of the partnership principal established by AFC occurred well before the disciplinary process leading to the dismissals effective in December 2010. That said, the Tribunal plainly did not disregard the background; see paragraphs 20.6 and 20.12 itself.

1. Secondly, they carried out the exercise required by section 98(4). They judged the fairness of the dismissal as at the effective date of termination of the contracts of employment in December 2010. Ms Stout cited passages from decisions of the EAT in [Garside & Laycock Ltd & Booth ]()[2011] IRLR 735; para.14 to 15, St John of God Care Services, 719F and 720F to G, Catamaran Cruises Ltd paras. 26 to 27 and in the Court of Appeal decision in Gilham v Kent County Council [1985] ICR 233, 244F. It is a question of fact for the Tribunal, as Griffiths LJ observed in that passage from Gilham.

1. Thirdly, the Tribunal took into account three relevant factors in reaching its conclusion that dismissal for the prescribed reasons, SOSR, fell within the band of reasonable responses. First, that 91% of the affected employees had accepted the new terms; that is a material factor as is made clear in Brooks at page 722D, Catamaran Cruises paragraph 28(4) and by Burton J in Scott & Co v Richardson UKEAT/0074/04, 26 April 2005 at paragraph 28 by reference to the earlier decision of Lord Johnston sitting in the EAT in Scotland in Grampian Country Food Group Ltd v McInally EATS/0035/04. We do not accept Ms Callan's submission that the Tribunal placed undue weight on that relevant factor.

1. Secondly their finding that the Respondent had reasonably explored all alternatives to dismissal before dismissing the Claimants. There is no criticism of the disciplinary process followed by the Respondent in respect of the two Claimants. Thirdly, they noted at paragraph 20.9 the lack of opposition by the trade unions to the proposed changes.

1. In these circumstances, we are not persuaded that the Tribunal misdirected themselves in law; on the contrary they applied the law correctly to the facts as found and reached a permissible properly reasoned conclusion that the dismissals were fair. We reject Ms Callan's suggestion that the Tribunal's reasons were not Meek compliant. Plainly they were. This is a well reasoned Tribunal Judgment which in our collective view speaks for itself without any additional burnishing by this Appeal Tribunal.

1. In these circumstances, were we to interfere with the Tribunal's conclusion we would be guilty of the error identified by Longmore LJ in [Bowater v North West London Hosp]()itals [2011] IRLR 331 paragraph 19 of substituting our Judgment for that of the ET under the guise of perversity; there is no perversity in this Tribunal's conclusion.

1. Finally, Ms Stout raised a challenge in argument to the apparent finding by the Tribunal at paragraph 17.4 to 17.6 that the job evaluation handbook, part of the AFC process, was incorporated into the individual contracts of employment. We wish to make it clear that that finding is wholly immaterial to our consideration of this appeal and we make no comment on that finding.

1. In these circumstances the appeal fails and is dismissed.