Before us the appeal focussed on three main areas. Firstly, that the Tribunal in criticising the fairness of the procedure had ended up by substituting their own view as to fairness rather than considering whether the employer's actions did or did not fall outside the band of reasonable responses; secondly, that the Tribunal were in error within the decision in seeking to place the burden of proving fairness on the employers, whereas it is mutual; and, thirdly, failing to make any Polkey deduction.
At the hearing below Ms Gregory was unrepresented. At a very late stage prior to the hearing before us Ms Gregory was able to obtain the assistance of Ms Sivanandan through the Bar Pro Bono Unit. Ms Sivanandan prepared a helpful skeleton argument and at the beginning of the case sought leave to amend the answer by cross-appealing. The cross-appeal related to certain findings made by the Tribunal in relation to whether or not a true redundancy situation existed and also an appeal against the Tribunal's dismissal of the direct sex discrimination claim. We refused leave to file the answer out of time and gave reasons, which appear in a separate judgment.
The background facts are that Ms Gregory from 24 January 2005 worked as an administrator and ambulance driver until her dismissal on 12 January 2007 on the grounds of redundancy. E-Zec operated a private ambulance service and an important part of their business was the transportation of injured and sick holidaymakers who had been repatriated back to the UK. They had three branches at Croydon, Stafford and Portsmouth with a total number of employees of 147.
Ms Gregory has a profoundly disabled daughter, and in 2006 it was agreed that her working hours should be reduced from 40 to 30. At this time she was working predominantly at Mayday Hospital in the transport office and on the road and carrying out some repatriation work at weekends and at nights. In October 2006, because of increasing problems with her daughter, the employer agreed to her request to work only term time, although she maintained that her reduction in hours caused resentment between her and two of the directors of the company and that the decision to dismiss her arose not through a true redundancy situation but because she had had to go onto reduced hours.
During 2006 E-Zec faced a downturn in the repatriation work caused certainly in part by holiday insurers keeping injured holidaymakers in overseas hospitals for treatment until they were fit to return home. The employer had no alternative but to consider redundancies and decided to restructure the Redhill site where Ms Gregory worked and in particular the control room. At the end of the day there was a necessity to make redundant four employees out of a pool of fourteen.
The selection process was to be supervised by Mr West, the senior HR manager, who would carry out the non work-related marking by checking personnel files for information. Other criteria were to be marked by Mr Paul Dean, the regional manager, who was Ms Gregory's line manager, on the basis that he had worked with all the staff and knew their strengths and weaknesses. It was also agreed that Mr Quaife would act as an appeals officer.
A group announcement was made on 27 November 2006 and Ms Gregory was given an independent letter explaining the reasons for the proposed redundancies. Volunteers were first sought and one person volunteered. Mr West had a meeting with the staff. The Tribunal record that one of the key questions asked was the nature of the selection criteria. There was a second meeting held with the staff on 21 December 2006. Although the Respondents claimed that Ms Gregory was present in fact she was on annual leave at the time and had not been informed or invited to the meeting. At some stage Ms Gregory was informed that there were two possible vacancies at Mayday Hospital; but it was made clear that they were full-time vacancies and that she would find it difficult if not impossible to apply for them. Two of the candidates who were in the pool of fourteen applied for and were successful in obtaining these jobs. As regards the criteria for selection for redundancy Mr West chose nine. He was going to mark the issues relating to service, absence, sickness days, sickness occasions and discipline, being matters that were generally verifiable by reference to personnel files. Mr Dean marked the issues relating to performance, commitment and attitudes, skill base and team working. The scoring matrix was shown to the Tribunal and there were definitions for the criteria, with a score of 5 at the top down to 1 at its lowest. The Tribunal record at paragraph 35 that the trade union was not consulted about the criteria until after it had been applied nor was the process ever explained to staff, who were merely told that the criteria would be used. In paragraph 36, a paragraph which we found rather confusing, the Tribunal dealt with the actual scoring. It was agreed between the parties that Ms Gregory was one of three who scored 26, this being the second lowest score, the lowest score being 20. The next highest score was that of a male who scored 27. The three who scored 26 together with the person who scored 20 were made redundant. The Tribunal concluded in paragraphs 36 that " We found the guidelines and in particular the definitions for the criteria to be wholly subjective and incapable of objective measurement ." The process then adopted was set out by the Tribunal in paragraphs 37 and 38 as follows:
Early in the decision the Tribunal had noted that the employers accepted that no appraisals had ever been carried out for staff as there was "no such system".
Mr Dean's scoring was carried out on 30 November 2006 and then the process was handed over to Mr West for him to complete the process. Ms Gregory returned to work on 8 January 2007 and the following day she was informed of the scores that she had received. Although the meeting was described as a "consultation meeting" the Tribunal did not agree and found that it was a meeting to impart the scores Ms Gregory had been given. She was shown her scores and a copy of the guidelines but not allowed to view the whole matrix. She did her best to challenge the scores and asked pertinent questions as to how the criteria were applied. At the end of the meeting she was handed a letter saying that she was at risk of redundancy and advised a further meeting would take place on 12 January, again described as a "consultation meeting". In fact on 12 January she was handed a letter informing her of dismissal due to redundancy; the Tribunal noted that Mr West had already prepared a letter terminating the contract notwithstanding that the meeting had been described as a "consultation meeting".
On 15 January Ms Gregory appealed against her dismissal on the grounds that the scoring was tainted by sexual and disability discrimination, that the matrix was not objective and its application was subjective leading to her low scores. She repeated the assertion that she had been made redundant because she had requested term time working 8 weeks prior to being dismissed.
Mr Quaife heard the appeal. He had familiarised himself with all the documentation before the appeal hearing and having considered the documents and the scoring did not form the view that there was any bias in the scoring although at no stage did he speak to Mr Dean to establish how the scoring was done nor whether there were any notes from Mr Dean supporting his scoring; however he expressed the view that Mr Dean and Mr West had acted fairly and transparently. The appeal was dismissed and the Claimant was notified by letter dated 16 March 2007.
The Tribunal's conclusions as to fairness were set out in paragraphs 55-59 as follows:
Fairness of Dismissal
Although Mr Dean's alleged subjective marking was very much at the heart of this appeal neither party in their written submissions filed prior to the hearing before us had dealt in depth with this particular issue nor referred us to the cases on the subject. At the commencement of the hearing Judge Ansell handed to the parties an extract from Harvey section D1 paragraphs 1666-1703 together with copies of three authorities Eaton Ltd v King [1995] IRLR 75, British Aerospace v Green [1995] IRLR 433 and John Brown Engineering Ltd v Brown [1997] IRLR 90.
The guidelines as to the standards which Tribunals should use in determining whether dismissal for redundancy is fair were set out in the well known authority of Williams v Compair Maxam Ltd [1982] IRLR 83 where Mr Justice Browne-Wilkinson (P) giving the judgment of the court set out five principles:
In Eaton Ltd v King the four employees concerned were dismissed on the grounds of redundancy. Their selection had been based on the operational needs of the business and involved assessment of the individual employees on the basis of the following criteria, namely commitment, flexibility, trainability, quality of performance, use of initiative, length of service with the company, qualifications, specific skills, efficiency, attendance record and disciplinary record. The unions had conveyed no objection to that method of selection. The assessment of each employee had been made by the appropriate departmental supervisor and reviewed by the manager of plant and the manufacturing manager. A selection had been made from the lowest scoring employees.
When the employees were informed they reacted angrily and insisted on seeing their marks. The company agreed but refused to disclose the marks of others in their sections. They complained that they had been unfairly selected for redundancy. The manager of the plant was the only person involved in the selection process to give evidence before the Tribunal. From his evidence it emerged there was an error in the marking of one of the employees under the heading "Qualifications" and that in some other areas the employees should perhaps have been marked higher. However, since he himself had not carried out the assessments he was unable to say with any degree of certainty why particular marks had been awarded. The EAT in Edinburgh overturning the Tribunal's decision that the dismissals were unfair said this at paragraphs 10 and 11 of their decision:
This decision was approved by the Court of Appeal in British Aerospace v Green where Waite LJ said this at paragraph 25:
Before us Mr McFarlane on behalf of the Appellant sought to derive considerable support from the Eaton case. He argued that the employers had consulted adequately with the staff given them as much warning as possible. He further argued that the criteria were as objective as possible and although Mr Dean was using his personal knowledge in relation to the areas he was being asked to mark, he was able to do so fairly from his own personal knowledge of all the staff with the assistance of the definitions for each level that had been set out by Mr West. The evidence was that the system had been applied to all the potential candidates in a similar way and there was no evidence that Mr Dean had any particular bias against Ms Gregory. He argued that the evidence that Mr West gave before the Tribunal should be sufficient in setting out the basis of how the scoring was carried out and his satisfaction that it was carried out fairly and objectively, and that therefore there was nothing in the Tribunal's findings to indicate that the assessment was not carried out honestly and reasonably.
Similarly he argued that as regards the appeal process it was not necessary for Mr Quaife to go into the details of the individual scoring but only to satisfy himself that overall there was fairness and that there was no bias in the scoring.
Ms Sivanandan sought to distinguish the facts of the instant case from Eaton and pointed to the totally subjective system surrounding Mr Dean, totally unverified by any company documents and indeed unsupported by any notes that Mr Dean made in relation to his scoring. She submitted that it was his low scoring of Ms Gregory in the areas of performance and commitment that made the difference in her case.
She argued that there was a complete absence of any attempt to agree the criteria or the method to be adopted with either the union or the employees concerned who were effectively presented with a pre-determined plan worked out primarily by Mr West. She argued that had the union been involved they would no doubt have examined closely the proposed subjective areas of scoring to be carried out by Mr Dean to suggest possible ways that they could be verified by reference either to company documents or alternatively in consultation with other managers. She argued that in particular it should not be left one person to judge areas such as performance and commitment completely devoid of any verification by objective means. She argued that in Eaton not only were the criteria shown to the union but it raised no objection to the method of selection, but the scoring carried out by the departmental supervisors was viewed by the plant manager and the manufacturing manager, whereas Mr West as HR manager was in no position to have any knowledge as regards the staff involved nor at any time were there notes made by Mr Dean in relation to the scoring. She also argued that Mr Quaife's appeal process did not attempt to cure these defects as he had not spoken to Mr Dean to establish how the scoring was done.
On this aspect of the case we agree with Ms Sivanandan. Unlike the Eaton case there was no attempt to consult with the unions or the employees as to the method of selection, the criteria to be adopted and the marking process. We agree with the Tribunal's views that it was an unfair process that fell outside the band of reasonable decisions for the key criteria to be left to one individual who was not able to support his marking by reference to any company documents such as performance appraisals, who had not spoken to any other manager concerning those marks and who had made no notes or given any indication as to how he had made this individual choice. The Tribunal were careful in making it clear that their task was not to subject the marking system to microscopic analysis or to check that the system had been properly operated but they did have to satisfy themselves that a fair system was in operation. In our view were entitled to come to the conclusions that this was not a fair system and that the appeal process did not cure it.
Fairness
In paragraph 58 of the decision the Tribunal said this:
Mr McFarlane submitted that the Tribunal have in this phrase erroneously placed a burden upon the employers which does not exist, the issue of fairness being a neutral one to be determined by the Tribunal from the evidence presented to it. He accepted that there may well be an evidential burden on an employer to show what the system was in order to justify its fairness but he submits that the Tribunal went too far in suggesting that there is a burden of proof upon the employers.
Whilst the Tribunal's phraseology in this area is regrettable, looking at the position as a whole, we are quite satisfied that, irrespective of the error concerning the burden of proof, the Tribunal were correct in their conclusions regarding fairness. In particular we would refer to the end of paragraph 58 where the Tribunal set out their task as being to " assess whether the Claimant has been treated fairly by the employers ". We are satisfied therefore the Tribunal decision and conclusions were correct notwithstanding Paragraph 58.
Polkey
The Tribunal dealt with this area in paragraph 61 as follows:
Section 98A(2) of the Employment Rights Act 1996 provides that:
Although the Tribunal have not specifically referred to this sub-section we take the first three lines of paragraph 61 of their decision as dealing with this issue. However, Mr McFarlane argued that even if the Tribunal found that the employers did not cross the 50 per cent threshold so that s98A(2) provided that the dismissal was fair, there was still a failure to consider what might have happened had fair procedures been applied by E-Zec. He submitted on the facts found by the Tribunal there was no reason to conclude there was no risk that the employee would have been dismissed even if a fair procedure had been followed. He referred us to the guidance given by the President of this court Mr Justice Elias in Software 2000 Ltd v Andrews [2007] IRLR 568 and referred us in particular to the principles in set out in paragraph 54 of that decision:
Mr McFarlane argued that the Tribunal were in error by failing to make an assessment as to whether or not there was at least a possibility that Ms Gregory would have been dismissed in any event. He relied upon the findings in relation to the redundancy situation – her low scoring and lack of any available alternative employment.
Ms Sivanandan submitted that the Tribunal in paragraph 61 by highlighting the possibility of alternative vacancies clearly formed the view that there was so much uncertainty that no clear prediction could be made as to the likelihood of the employee's dismissal even if a fair procedure had been followed. We agree with that view. It is clear that this Tribunal had made clear findings on substantial failures as far as the employers' procedure was concerned relating to a complete failure of consultation including proper discussion of alternative vacancies together with criticism of Mr Dean's marking and in our view the Tribunal were entitled to come to a conclusion that there was not even a possibility that dismissal would have occurred.
Therefore for the reasons which we have stated this appeal is dismissed.