Shields Automotive Ltd v Shields & Anor UKEATS/0059/12/BI
Appeal against the awards made to two claimants where the respondent had failed to comply with the regulation regarding the election of employee representatives in a TUPE transfer. Appeal allowed.
The respondent failed to properly conduct the election of employee representatives in a TUPE transfer. One claimant decided not to be involved in the nominations because of concerns about the short timescale and the other claimant had a day off when the nominations were done, thus had no chance to be involved. The first claimant was awarded 2 weeks pay and the second 7 weeks. The respondent appealed alleging that the decision was perverse.
The EAT rejected the perversity argument but said the ET had erred by saying that the circumstances were less serious than those in the case of Todd v Strain yet awarding the same level of award as had been made in that case; by approaching the award as compensation, rather than as a punitive award; and being manifestly excessive for the fault of the employer which could not be characterised as severe. It had distinguished between the claimants by holding that in one case only one of the reasons for liability applied, whereas in the other both did demonstrating an erroneous compensatory approach.
Appeal No. UKEATS/0059/12/BI
EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH EH3 7HF
At the Tribunal
On 21 March 2013
THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT), MISS J GASKELL, MRS G SMITH
SHIELDS AUTOMOTIVE LIMITED (APPELLANT)
(1) LANGDON; (2) BROLLY (RESPONDENTS)
Transcript of Proceedings
For the Appellant MR DAVID HAY (Advocate)
Instructed by: Messrs Levy & McRae Solicitors 266 St Vincent Street Glasgow G2 5RL
For the Respondents MR DAVID LANGDON & MR GERARD BROLLY (The First and Second Respondents in Person)**SUMMARY**
TRANSFER OF UNDERTAKINGS – Consultation and other information
Employers tried to comply with the requirements of TUPE 2006 for consultation and information, but failed to provide for the election of appropriate representatives in a manner which complied with reg.14. An election was called at 2pm on a day, with voting to be completed by 5pm, when it knew that an employee would be absent till the next day, without showing any good reason why it could not have waited for him to return. The result was that one employee was clearly elected, but there was a tie for the next of two posts. Rather than telling any of the employees or candidates about this, the manager chose one of them. The Employment Tribunal held this unfair: an argument on appeal that this decision was perverse was rejected. However, the ET erred by saying that the circumstances were less serious than those in the case of [Todd v Strain]() (as they plainly were) yet awarding the same level of award as had been made in that case; by approaching the award as compensation, rather than as a punitive award; and being manifestly excessive for the fault of the employer which could not be characterised as severe. It had distinguished between Mr Langdon and Mr Brolly by holding that in one case only one of the reasons for liability applied, whereas in the other both did (demonstrating an erroneous compensatory approach), but there was no cross-appeal from Langdon, and the award (2 weeks' pay) was not manifestly excessive in his case and so should stand. In the case of Brolly, 7 weeks pay was reduced to 3: as it happened, to a figure only 3p different from that awarded to Langdon.**THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)**
- This appeal raises the question of liability and consequent compensation for alleged breaches of regulations 13 and 14 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Regulation 13 is headed, "Duty to Inform and Consult Representatives". Those representatives are defined as appropriate representatives by regulation 13(3) if they are under 13(3)(b)(i) employee representatives appointed or elected by the affected employees.
- The appeal arises out of a decision made by a Tribunal sitting at Glasgow chaired by Employment Judge McManus, the Reasons for whose decision were delivered on 8 November 2012. That Tribunal upheld a complaint made by each of Mr Langdon and Mr Brolly that their employer, Shields Automotive (Shields) had failed to comply with the requirements of Regulations 13 and 14. It upheld their claims and awarded Mr Langdon £1,384.62 compensation and Mr Brolly £3,230.71, those sums representing respectively two weeks and seven weeks pay.
- Shields was engaged in the sale of motor vehicles in both Glasgow and Hamilton. It was a Toyota dealer. The dealership and franchise were transferred to Arnold Clark Automobiles Ltd with effect from, the Tribunal found, 9 August; we are told 10 August 2011. The transfer of that dealership from Shields to Arnold Clark affected a number of employees. All of them, save one who objected to the transfer, were in the event transferred from Shields to Arnold Clark. At Hamilton there were 18 who could potentially have voted.
- The Tribunal found that though aware in March 2010 of the wish of Toyota to transfer the dealership and by July 2011 that heads of terms were in place, it was at only at 2.00 pm on 2 August 2011 that the employees were told by management of the transfer and were invited to elect appropriate representatives as provided for by Regulation 13(3)(b)(i) and Regulation 14 of TUPE. They were given that afternoon until the close of business at 5.00 pm to nominate those who might be prepared and willing to act and to cast a vote for those persons. Mr Langdon was present at the meeting. He tells us that, concerned about the short timescale, he deliberately chose not to exercise his vote. Mr Brolly was not present, because it was his day off. The employer knew that there would be one or more employees on a day off whatever day was chosen for the purposes of the election. He therefore, though entitled formally to vote, was given no opportunity to exercise that vote. There was no correspondence between the employer and Mr Brolly for that purpose, nor was there any form of contact of which evidence was given before the Tribunal.
- Against those background facts the Tribunal added a number of findings about the way in which the employer had acted. It found at paragraph 12(e) that it had sought advice from Arnold Clark as to its duties in a transfer which was likely to be governed by TUPE. It sought specific advice from a solicitor experienced in employment law and it decided to adopt a more robust process than had been suggested by Arnold Clark. Importantly the Tribunal concluded:
"Mr O'Donnell [he was the managing director whom the Tribunal later found was a man of high moral standards] was conscious of the Respondents legal obligations with regard to TUPE and sought to comply with these."
- The Tribunal found that each employee was given separately a sealed envelope containing a ballot sheet providing for nomination. The papers were returned to an office in Hamilton used by Mr McLaren and placed in a box. All of the 18 members of staff who were present that day, save Mr Langdon, returned their ballot papers. Mr McLaren counted the votes. He found that Norma Cook had received six votes, Martin Jones and Tom Lorraine had each received four votes and Mr Brolly, even though he had not been present that day to affirm his willingness to stand, had received three votes. It was, therefore, plain to him that Norma Cook had been elected by the members but there was a tie for second place. The Tribunal found that he, Mr McLaren, decided that it was not appropriate for Tom Lorraine to be an elected representative since he had a regular day off on a Thursday and the consultation meetings were due to take place on Thursday. He did not consult with anyone; he did not discuss his availability on Thursday with Tom Lorraine. He chose Martin Jones to be the representative duly elected by the affected employees.
- So far as Mr Brolly was concerned the Tribunal found that the Respondent was aware, at paragraph 12(n), that as a result of their normal working patterns not all employees were present at their premises on Tuesday 2 August. The Tribunal went to note that as matters turned out neither Mr Langdon nor Mr Brolly made any express objection to the identity of the employee representatives, Norma Cook, who had been elected, and Martin Jones, who had been chosen from the two with the next highest level of votes. It found that the consultation process continued with those two, Cook and Jones, as the appropriate representatives. It did not criticise the quality and content of that consultation at all. It came to a finding of fact (12(t)) which it was to repeat in the same terms in two subsequent paragraphs in its decision as follows:
"The Respondent failed to ensure that there was a fair election process in respect of the election of representatives for the purposes of providing information and consulting on the transfer. In particular these failures were:
* Failing to set an appropriate timescale for return of votes to give all affected employees the opportunity to cast their vote for an elected representative.
* Determining which individual should be the elected representative in the event of a tie in the number of votes between two candidates, without informing the affected employees of this tied situation or of this determination."
- These two findings represented by the two bullet points gave rise to the two heads under which Mr Hay, who appears for Shields before us on this appeal, cast his argument terming them the "timescale" and the "tie-break" points respectively.
- As to the timescale point the Tribunal decided at paragraph 38 as follows:
"38 Regulation 14(1)(a) states:
'the employer shall make such arrangements as are reasonably practicable to ensure that the election is fair'
The Respondent set a timescale for close of the election process as at around 5pm on Tuesday 2 August 2011, in circumstances where this election process was initiated at a meeting beginning around 2pm on the same day and in circumstances where it was known that not all of the affected employees would then have the opportunity to place a vote for their preferred candidate. There was therefore a requirement placed on affected employees that they had to be at work at the respondent's premises at either Glasgow or Hamilton on the afternoon of 2 August 2011 to be able to vote. There was no explanation provided by the respondent as to why the deadline could not be extended until shortly after the start of business on 3 August 2011. It was not argued that extending the deadline until the morning of the following day was not reasonably practicable. The letters advising affected employees of the names of the representatives were delivered to the Hamilton premises on the morning of Wednesday 3rd August. Had the deadline been extended to the morning of the following day, Mr Brolly would have been able to vote for his preferred candidate [earlier, we interpose, the Tribunal had pointed out that if he had chosen to vote for himself there would have been a three way tie]. Additionally, this would have allowed more time for all of the affected employees to discuss which of them should stand for as a candidate (sic) for election, and to reflect on who should be elected.
39 It would have been reasonably practicable for the respondent, in ensuring that its election process was fair, to ensure that there was appropriate accommodation in the election process, including the time period within which votes had to be placed, for the regular working patterns of all affected employees, so as to ensure that no affected employee would be unable to vote because of their regular working pattern."
- As to the tie-break point, the Tribunal expanded its reasoning at paragraph 40 as follows:
"40 The respondent made no accommodation for the procedure which would follow in the event of a tie in the number of votes between two candidates. Of itself this does not make the election processes unfair. However, there was a tie in the number of votes between two candidates, and Mr McLaren then made the decision as to which of these two candidates would be one of the elected representatives. Mr McLaren made this decision on his own, without consultation with anyone. Mr McLaren made this decision on the basis of his understanding of one of the candidate's availability for consultation, without enquiring whether his understanding of this candidate's availability for consultation was correct. The final decision on the elected representatives was made by Mr McLaren without offering the affected employees the opportunity of choosing between the tied candidates and without informing the affected employees that there had been a tie between two candidates and that one of these candidates had been chosen by Mr McLaren. It would have been reasonably practicable for the respondent, in ensuring that the election was fair, to ensure that the final decision on the elected representatives should be that of the affected employees. It did not do so. Mr McLaren chose between two candidates."
- Having thus found liability the Tribunal went on to direct itself in respect of compensation. Compensation in this area is a misnomer. It was agreed between the parties that the appropriate authority, though decided against the background of other statutory provisions but nonetheless applicable, is that of Susie Radin Ltd v GMB & Others  IRLR 400 CA. At paragraph 45 in the judgment of Peter Gibson LJ with which Lord Justices Longmore and Laws agreed he set out the matters which an Employment Tribunal should hold in its mind in exercising its discretion to make a protective award and for what period; the maximum being an award of 13 weeks pay. He said:
"1 The purpose of the award is to provide a sanction for breach by the employer of the obligations in section 188 [we interpose that is a reference to the statutory provisions with which that case was directly concerned. Here the relevant provisions are those at Regulations 13 and 14 of TUPE]. It is not to compensate the employees for loss which they have suffered in consequence of the breach.
2 The ET have a wide discretion to do what is just and equitable in all the circumstances but the focus should be on the seriousness of the employer's default.
3 The default may vary its seriousness from the technical to a complete failure to provide any of the required information and to consult.
4 The deliberateness of the failure may be relevant as may the availability to the employer of legal advice about his obligations under section 188.
5 How the ET assesses the length of the protected period is a matter for the ET, but a proper approach in a case where there has been no consultation is to start with the maximum period and reduce it only if there are mitigating circumstances justifying a reduction to an extent which the ET consider appropriate."
- It is because of point 1 that we emphasis that the expression "compensation" is inappropriate. An award is to be made, but not to compensate the employee: it is to punish the employer. Its purpose is to ensure that employers generally are mindful of their obligations to consult and inform, particularly in circumstances in which there will inevitably be pressures often of time upon the employer to do the opposite.
- As to point 5; although the length of the protected period, hence the amount of the award, was said to be a matter "for the ET" that does not prevent the Appeal Tribunal deciding that an award is manifestly excessive, depending on the circumstances. An example of this was the appeal in the case of Todd v Strain  IRLR 11, a decision by the Appeal Tribunal presided over by Underhill P. In that case there had been a failure of consultation. It concerned the transfer of a care home. There was a meeting at which the manager of the home was told without any prior notice of the intended transfer. No detailed information was given. The precise date of the transfer was not known. Nothing was communicated in writing. No attempt was made to communicate with employees who were not at the meeting. Employees tried to find out more and were unable to do so.
- The Tribunal in that case correctly thought that there was a "complete failure" to observe Regulations 13 and 14 of TUPE but, despite that it was not a case in which no information had been given to the workforce at all. At least some basic information had been given and, importantly, a reassurance that there would be no changes in staffing or terms and conditions of employment consequent upon the transfer. It could not, thought the Appeal Tribunal, be compared with a case such as Sweetin v Coral Racing  IRLR 252 EAT in which the first the employees had known about the transfer was when the representative of the new owners announced himself at the premises on the day that it took place. On that case a maximum award was held to be appropriate. But in the light of the fact that the employer in Todd had taken significant steps to tell its employees of some of the information, even though there had been no compliance at all with Regulations 13 and 14 of TUPE, this Tribunal thought that the finding of the Employment Tribunal that the claimant should receive 13 weeks pay could not stand; it was too much. It observed that the guidance given at point 5 in Susie Radin was directed at a case where the employer had done nothing at all, and should not be applied mechanically to a case in which some information had been given or some consultation had occurred, though without using the statutory procedure. The Tribunal exercised its own powers to make an award of seven weeks pay in that case.
- Before us Mr Hay, in a careful and impressive argument to which we pay particular tribute, has taken pains to avoid any exaggeration and has been realistic and frank. He submitted that the appeal was a perversity appeal. He argued that the Tribunal had erred to the extent of being perverse in concluding that there was liability in either the timescale or the tie-break point. If, but only if, the appeal in relation to liability failed he sought to argue also that the conclusion as to remedy was also perverse. Given the minimal nature of the employer's default here, the attempt by Mr O'Donnell to honour his obligations faithfully and the somewhat technical nature of the defaults which had occurred in circumstances where the motivation of the employer was entirely benign, there really should have been no award at all. If he were wrong on that he would argue that the amounts given on the one hand to Mr Langdon and on the other to Mr Brolly were wrong and should, he submitted, be reduced given the limited nature of the amounts at stake. He argued that we should exercise our discretion here if we were in his favour on this point.
- He notes that in arguing his appeal in respect of liability that the Tribunal had found that Regulation 14 had been breached because the requirements under Regulation 14(1)(a) had not been met. So far as material for our purposes Regulation 14 provides as follows under the heading, "Election of Employee Representatives":
"(1) The requirements for the election of employee representatives under Regulation 13(3) [we interpose to note that is the regulation which describes who are to be appropriate representatives] are that:
(a) the employer shall make such arrangements as are reasonably practicable to ensure that the election is fair …
(b) all affected employees on the date of the election are entitled to vote for employee representatives…"
- He submitted that in its conclusions the Tribunal could not without perversity have decided that there had been a breach of 14(1)(a). His central argument was that the Tribunal had focused overly upon the position of Mr Brolly. He was one person. To argue that there was or might have been some unfairness to him is to miss the point of the Regulation. The Regulation does not require that the election arrangements or the election is fair for each and every employee who is an affected employee; it is an overarching requirement to ensure that the election is fair. That is, he submitted, the election process taken overall. Taken overall, of the 18 employees affected at Hamilton, 17 had the opportunity participate in the election. The overall purpose was to provide a vehicle for consultation. Mr Brolly, who had not been present on the day of the election, was offered the opportunity individually to be consulted when he returned to work the next day; accordingly, appropriate accommodation was given to him. In those circumstances an overall view of the process would result in the conclusion that it was fair.
- The Tribunal ignored what Mr Hay said was the fact that he was given the opportunity to object to the representatives who had been elected and he did not take it. It ignored the fact that overall the consultation process could be, and was, effective. The Tribunal had no criticism in the event of the quality and extent of the consultation that took place, only with the fact that it did not take place with appropriate representatives, all of whom had been elected by a process as required by Regulation 14.
- When he came to argue the tie-break point he argued that effectively the process had produced a person who had been elected by the affected employees, at least to the level of Mr Lorraine. He drew our attention to a passage at paragraph 53 of the Tribunal's decision which showed that the Tribunal had wholly overstated the impact and significance of the issue. The Tribunal there said:
"[…] by Mr McLaren choosing between two candidates who had received the same number of votes leave (the failure set out at (b) above), he, and therefore the respondent, had circumvented the election process. This went to the heart of the requirement for a fair election and was serious with regard to the democratic nature of the voting process […]"
- If that was its approach then it was ignoring the reality which was that nothing so serious had actually occurred. The way in which Mr McLaren had approached matters was not such, nor could arguably be said to be such, that it would fundamentally undermine the fairness of the process. The Tribunal was, he submitted, approaching the situation with hindsight whereas what had to be looked at was a question of anticipating what might happen in advance. There was nothing in either the timescale nor the tie-break point taken separately or cumulatively which could be said to impugn the fairness of what took place.
- The argument was on the basis of perversity. Arguments which seek to hold that an Employment Tribunal's findings of fact are perverse or that an Employment Tribunal is simply not entitled to exercise its judgment as it has done face a high hurdle. We do not need to quote the several cases in which the height of that hurdle placed in the way of such an argument has been described, merely to record that it must be shown that the decision which the Tribunal has come to is one which is "wholly impermissible" or "flies in the face of reason" or one which would excite astonished gasps from the amazed observer.
- The issue is not to be decided by broad appeals to fact but by beginning with the statutory provisions. So far as the timescale point is concerned the Tribunal decided that the employer had not made such arrangements as were reasonably practicable to ensure that the election was fair. Those words require close examination. The question is not whether the result of an election is fair. The question is not whether there has been fair consultation taken overall despite it. Regulation 14 deals only with an election process. The context may be information and consultation but the requirement of the Regulation is in relation to the election itself.
- The party which has the duty under the Regulation is the employer. It is for the employer to make arrangements. That word contemplates some advance consideration of what will be needed; undoubtedly there may be many cases in which the advance consideration given may, for very good reason, be rushed. That no doubt is why the clause does not require that the employer guarantees the election is fair or that the arrangements ensure that the election is fair. The arrangements must be such as are reasonably practicable to achieve that effect. That does not require the employer necessarily to take "all possible" steps, because the requirement of reasonableness exists, but where reasonable practicability is to be relied upon it is, in our view, and Mr Hay did not dispute the point in argument, for the employer to satisfy a Tribunal of that fact; that is because it is the employers' duty to make such arrangements as are reasonably practicable to ensure that the election is fair.
- If, therefore, there is a particular reason why an electoral process must be rushed and cannot reasonably practicably be taken over a slightly longer timescale, it is for the employer to provide that material. It is a pity, perhaps, that the Employment Tribunal here did not have, so far as we know, the employer's answer to any direct question why Mr Brolly was left out of the process as a result of the adoption of the timescale that was chosen. But if there had been a reason why it was not reasonably practicable, as the Tribunal suggested, to extend the deadline until the morning of the following day, it was for the employer to put that forward and it is plain that the employer did not here do so. The Tribunal at an earlier stage in its decision did not say that this particular transfer was one which had to be rushed. There was no particular special circumstance which it identified in respect of it, and it made that clear.
- The general principle, as we see it, is that in an election in which all affected employees are entitled to vote the arrangements should ordinarily and ideally be such that they may have a proper opportunity to exercise that entitlement. We note that in 14(1)(g) the requirement is of entitlement to vote. It is not opportunity to vote. The entitlement will, however, be a hollow vessel if there is no opportunity to exercise it. We accept there may be many circumstances in many cases in which the particular occasion is such that although formally entitled to vote, the arrangements made by the employer have to be such that it may be one or two or more affected employees do not have a reasonable opportunity to exercise that entitlement. That is because the question of opportunity to vote is to be looked at the through the spectacles of 14(1)(a), but we return: if there is to be a diversion from what we see as a general ideal in the light of circumstances it is for the employer to show that those circumstances exist. Accordingly, so far as timescale is concerned, the Tribunal was entitled, in our view, to come to the conclusion that the process as a whole was unfair because it did not make sufficient provision for those who had entitlement to vote, such as Mr Brolly, and in particular in this case for him to exercise that opportunity. It was not perverse of the Tribunal to come to that conclusion.
- As to the second point, the tie-breaker point, we note here that the requirement of the statute in Regulation 13(3) is for the employee representatives to be appointed or elected by the affected employees. The effect of what happened here was that although the employees had a voice in the election and selection, the ultimate selection was not made by them, it was made by the employer. That, on any showing, is a breach, albeit it might be thought in some circumstances a technical breach of the requirements. Accordingly, we cannot regard it as perverse for the Tribunal here to come to the conclusion that that too had an impact overall upon whether the election was fair, as producing representatives who had the authority of the majority of those who wished to vote for them.
- If follows that given the high standard which needs to be taken to perversity, given the requirements of the statute, given the fact that there was no evidence put forward of which we are aware, that there were particular circumstances which made it not reasonably practicable to make arrangements which would quite easily have secured the vote to all who had the entitlement to exercise it and given that it was not established that it was not reasonably practicable for Mr McLaren to have alerted employees to the fact of a tie and to have allowed the employees to resolve how the tie would be broken, the Tribunal's decision on liability must stand. We turn, therefore having dismissed the appeal in respect of liability to the appeal in respect of the amount of the award.
- Here we have to draw a very clear distinction between the cases of Mr Langdon and Mr Brolly. The way in which the matter was put before us was again on the basis of perversity; we think that that perhaps is an inappropriate word to use when looking at the quantum of an award. The test is rather whether the sum awarded is manifestly excessive. A Tribunal's decision as to what figure an award should be is, as point 5 in paragraph 45 of the Radin case demonstrates, a matter upon which the Tribunal's discretion will generally be accepted. There is a very wide margin within which there is a room for reasonable disagreement as to what the precise amount of an award should be. It s not the function of any Appeal Tribunal to interfere in such circumstances. But it has to be recognised that there are some cases in which undoubtedly an award is simply too much.
- Here the first submission made by Mr Hay (that there should be no award at all) has in our view to be rejected. The Tribunal was entitled, having found liability, to make an award. The purpose is perhaps to ensure that employers who are, as this employer was, mindful of their duties and obligations nonetheless are particularly scrupulous to ensure that they are observed to the letter. Accordingly, it was not wrong, in our view, for a punitive award to be made to some extent. So far Mr Langdon is concerned we have not been persuaded that the sum which the Tribunal gave him, being two weeks pay, was inappropriate as a punitive award.
- We, however, have some comments to make about the approach which the Tribunal took. It directed itself in respect of compensation from paragraphs 48 onward to the conclusion of its decision. At paragraph 48 it noted that compensation should begin at the maximum level, 13 weeks, unless it was to be reduced by reason of mitigating circumstances; that is a correct starting point given the observations of Peter Gibson LJ in Radin. It then said that it had regard to Todd v Strain, in particular paragraphs 28 and 29. It thought that the circumstances of the present case were not similar to those in the Sweetin case where there had been no attempt whatsoever to comply with any of the obligations, and went on halfway through paragraph 48 to say that it thought this case, "comparatively less serious than the circumstances in Todd v Strain".
- Having concluded that, it might be thought that it is a matter of surprise that it should then in the event award exactly the same figure to Mr Brolly, that of seven weeks pay, as was determined by this Tribunal appropriate in the more serious circumstances of Todd v Strain. This suggests to us an error of approach. The Tribunal has not justified why it should go to seven weeks, the equivalent of Todd v Strain, in a case which it accepts is less serious. It said at paragraph 50 that the focus had to be on the punitive nature of the award and not to the extent of any loss caused to the employees by the failure, but yet when it came to consider the awards for Mr Brolly and Mr Langdon it awarded them different sums because of their different personal circumstances. But both were affected employees: the employer's failures in general terms were the same. It concluded that it should award different sums to each because, as it said at paragraph 54:
"The Tribunal considered each wrong set out as (a) and (b) [that is the timescale and the tie-break points respectively] in respect of each Claimant. Mr Langdon was present at the meeting on the Hamilton premises on 2 August 2011 and had the opportunity to vote although he chose not to do so. The circumstances leading to the failure as set out at (a) affected each Claimant; each being an affected employee. The circumstances leading to the failure as set out at (b) affected only Mr Brolly as Mr Langdon has chosen not to vote. In all these circumstances it was considered that the appropriate compensation should not be the same in respect of each Claimant."
- The use of the word "compensation" is in our view indicative. The Tribunal here was looking at the different circumstances of, and looking at the impact of the employer's default on, each Claimant. But the approach is not compensatory, it should be punitive. In other words, the Tribunal here was taking the wrong approach to an award. What it needed to do was to assess the seriousness of the default of the employer. That would be the same in the case of Mr Langdon as it would in the case of Mr Brolly because each was an affected employee. However, the Tribunal itself had limited its opportunity to award punitively a sum to Mr Langdon because it did not regard the sum awarded to him as punishing the default in respect of the tie-break. It made an award against the employer to Mr Brolly on behalf of both timescale and tie-break but in respect of the default and timescale only to Mr Langdon.
- We have not been invited by any form of cross appeal to consider whether the Tribunal should have awarded Mr Langdon a sum to represent an award in respect of the tie-break as well and consider that no further.
- It seems to us that the approach which the Tribunal took in respect of Mr Brolly therefore was wrong. It was wrong because it considered the approach as being compensatory when it was not. It was wrong because it considered that the circumstances requiring a punitive award were less serious than those which had applied in Todd v Strain and yet assessed the sum in the same amount for Mr Brolly without explaining why.
- Accordingly, we think that so far as the award in respect of Mr Brolly is concerned the appeal should succeed. So far as in respect that Mr Langdon is concerned, as we have said, the sum in respect of the matter which it thought affected him is not obviously excessive, it cannot be said to be perverse, it is within the broad scope of awards which a Tribunal might make and we decline, therefore, to interfere with that. We consider ourselves to have no power to do so.
- The consequence of our decision must be that we decide whether we remit the question of appropriate award to Mr Brolly to the Tribunal or whether we determine this matter for ourselves. We are invited by both Mr Hay and Mr Brolly, should we be in this position, to make that determination for ourselves and we shall do so. The first question is to recognise what the award is for. It is not compensation; it is to punish the employer for its failure. That requires a view as to where in the scale of seriousness the employers conduct falls. At the top end, the 13-week end, is an employer such as that in Sweetin where the employer simply takes no steps whatsoever to inform or consult with anyone, whether elected or otherwise.
- The Tribunal in the case of Todd v Strain considered a case in which there had been no attempt to consult with any appropriate representative because there had been no compliance whatsoever with Regulations 13 and 14 and there had been some, but inadequate, consultation. That, it thought, merited a sum somewhere in the middle of the range at seven weeks.
- The factual features which characterise this case are, it seems to us, these. First the Tribunal found that this employer was conscious of its obligations and sought to comply with them. It was thus concerned with an employer who despite its best motives fell into error. Since the purpose is to punish an award against such an employer is going to feature lightly on the scale, because such an employer has done almost its best to do what is necessary. Second, the Tribunal made it clear that there was full consultation here, albeit not with elected representatives in total, for the purposes of TUPE. This employer had two elected representatives in respect of Glasgow about whom there is no criticism, one in respect of Hamilton in respect of whom there is no criticism and one chosen by the employer from amongst the two employees with the next highest votes at Hamilton. He is someone who might well have been an appropriate representative even if he was not. To that extent, therefore, the breaches may be seen as more to the technical end to which reference is made in the cases rather than an egregious breach. Thirdly, it is a matter of regret that Mr McLaren did not think to take the steps that would have informed employees, and we were surprised to note that it was not until the Tribunal hearing itself that the employees were aware of the tie, but the Tribunal specifically did not criticise his motivation; it set out his reasoning. He chose for himself, not upon the basis of any malice, of which he was expressly acquitted, but seeking what he thought was the most practical solution. In such circumstances the punishment, in our view, does not require a large award. Given that in Mr Brolly's case because of the way the Tribunal approached matters at paragraph 54 the award falls to be made both in respect of the timescale and the tie-break point, it must be higher than that made to Mr Langdon in respect of whom only one of those applies. But for the reasons we have given, it must be significantly lower than the seven weeks which appealed to this Tribunal in Todd v Strain. Since the breaches were to the technical end of the spectrum, for the reasons we have given this is a case in which we, for our part, are agreed that the appropriate award of compensation in the case of Mr Brolly will be one of three weeks pay and not the seven weeks which the Tribunal determined. We expect that Mr Hay and Mr Brolly will be able to agree how much that award should be. We have not attempted any extrapolation from the wage figures we have been given.
- To that extent, but that extent only, this appeal is allowed.
- We reject the appeal in respect of liability. We reject the quantum appeal in respect of Mr Langdon. We allow the appeal in respect of the quantum of the award made to Mr Brolly and reduce it to one of three weeks' pay rather than seven.
Published: 16/05/2013 16:17