Appeal No. UKEAT/482/05/DZM & UKEAT/0592/05/DZM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 11 November 2005

Before
HIS HONOUR JUDGE PETER CLARK
MR D SMITH
MR L TINSLEY

EAST RIDING OF YORKSHIRE COUNCIL 	APPELLANT

MS A STRUTT 	RESPONDENTS

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR COLIN BOURNE
(of Counsel)
Instructed by:
East Riding of Yorkshire Council Legal Services
County Hall
Beverley
East Riding of Yorkshire HU17 9BA	
For the Respondent	MR GARY MORTON
(of Counsel)
Instructed by:
Messrs Thompsons
Solicitors
17 Wellington Street
Leeds LS1 4DL	

SUMMARY

Unfair Dismissal: Reasonableness of Dismissal, and Polkey Deduction

Reasonableness of redundancy dismissal.  Polkey deduction.  Pension loss.

HIS HONOUR JUDGE CLARK

1.	The parties before the Leeds Employment Tribunal, chaired by Mrs C Lee, were Mrs Strutt, the Claimant and (1) East Riding of Yorkshire Council and (2) the Governing Body of Holme on Spadling Moor School (“the School”), Respondents.  

2.	It is accepted that the First Respondent, the Educational Authority, was the Claimant’s employer.  In these circumstances, this appeal is brought by that Respondent against both the liability and remedy judgments of the Employment Tribunal, promulgated with reasons on 13 June and 27 July 2005 respectively, upholding the Claimant’s complaint of unfair dismissal by reason of redundancy and awarding her a compensatory award in the total sum of £38,002.06, there being no basic award because the Respondent had paid an equivalent redundancy payment.  

3.	We say at the outset that it is our clear conclusion that no error of law is shown in either judgment and consequently, the appeals must fail.  We are conscious of the learning in the Court of Appeal that on any further appeal, the question is not whether we are right but whether the Employment Tribunal was wrong in law.  In those circumstances, we hark back to the halcyon days of the first three EAT Presidents when short judgments were delivered.  We shall emulate that so far as is possible in dealing with the arguments raised in both appeals.

The Liability Appeal
4.	The Claimant was employed at the school, a primary school, set in a rural area in North Yorkshire where the Claimant lived, as a nursery nurse.  Her permanent employment then as a child support assistant commenced on 15 March 1999 on a part-time basis.  She became a full-time nursery nurse on 1 September 2001.  She was dismissed following a redundancy exercise carried out principally by the head teacher of the school, Mr Alston, in May 2004.  An internal appeal against that decision failed.  

5.	The reason for her dismissal, redundancy, was agreed.  In relation to the issue of fairness under Section 98(4) of the Employment Rights Act 1996, Mr Morton draws attention to the Tribunal’s formulation of the issue at paragraph 1 of their reasons for the liability judgment.  They say this:
“At the commencement of the hearing, the representatives confirmed that the only issue in connection with the unfair dismissal claim was whether the Respondents properly applied the relevant criteria to the selection of the staff to be made redundant, of whom the Claimant was one”.  
The Respondent purported to follow a redundancy procedure agreed with the Trade Unions.  That procedure, so far as selection for redundancy was concerned, involved a sequential three stage process: first to seek volunteers, secondly to carry out a skills assessment on those members of staff who were in the pool for selection and thirdly and finally, if necessary, to look at those candidates for selection cumulative service. 

6.	The Tribunal found that Mr Alston did not properly apply stage 2 of the procedure, but proceeded to stage 3 which, again, they found was not properly applied in the Claimant’s case.  It is common ground and accepted before us by Mr Bourne, that the internal appeal did not, as the Tribunal found, cure any original failings in the dismissal process.  

7.	In advancing this appeal, Mr Bourne does not challenge the Tribunal’s self-direction as to the law contained in paragraph 4 of their liability reasons.  They there say:
“We remind ourselves that it is not our function to decide whether we would have selected the Claimant.  The Respondent has to act in a reasonable way.  There may be several reasonable responses to any problem.  It is only if the Respondent acts outside of the range of reasonable responses that the decision to dismiss is unfair.  Defects in following a proper procedure are subject to the to the same test”.
8.	Mr Bourne nevertheless submits that the Tribunal failed to apply that self-direction; instead merely finding that there was a breach of the agreed procedures so far as stage 2 was concerned.  We accept that mere breach of an agreed procedure following the repeal of what was Section 59(1)(b) of the Employment Protection (Consolidation) Act 1978, does not render a dismissal automatically unfair. But, first, we repeat the issue identified at paragraph 1 of the Tribunal’s reasons and secondly, we note that at paragraph 6 the Tribunal find that the failure by Mr Alston to undertake the stage 2 exercise rendered the dismissal outside the band of reasonable responses.  We are not persuaded that that is, in any way, a misdirection in law. We think that the Tribunal not only identified the correct approach, but also followed it in reaching that conclusion.  

9.	In those circumstances, it is not strictly necessary to consider their further and alternative finding at paragraph 7 of the liability reasons in relation to the first stage of the procedure.  However, we accept Mr Morton’s submission that the Tribunal was entitled to find at the end of paragraph 7 as follows:
“Further, the Respondents have not demonstrated to us that they genuinely believed that the length of service of both women, including the deemed service of the Claimant, was in fact equal, as we have accepted the points made in Mr Cunliffe’s [the trade union representative] correspondence, that he had been told that the length of service was equal prior to some of the additional dates being found, which the Respondents themselves conceded they had pay records for”.
In these circumstances, we reject the arguments in relation to the liability appeal and for completeness, we are quite satisfied that the Respondent has failed to make out a perversity ground for appeal applying the Court of Appeal guidance in Yeboah v Crofton [2002] IRLR 634. 

The Remedy Appeal
10.	Two issues arise.  First, an issue arose under the Polkey principle as to what was the chance, had a proper selection procedure been followed, that the Claimant would have retained her employment with the Respondent.  There were five employees in the selection pool.  Applying stage two of the procedure, the Tribunal made a comparison between the Claimant and Mrs Saunders.  They found that the Claimant was better qualified and thus would probably have retained her employment ahead of Mrs Saunders under the skills assessment criteria.  They did so on the basis that her NNEB qualification was superior to the B Tech qualification held by Mrs Saunders and secondly, that the Claimant held a certificate in professional practice and learning support, which Mrs Saunders did not.  

11.	Mr Bourne principally challenges the finding at paragraph 2 of the remedies reasons that the NNEB qualification was superior to the B Tech.  This factual issue had been flagged up at the end of the Tribunal’s liability reasons, paragraph 10 and were quite satisfied that no finding on this issue was made at the liability hearing stage. Mr Bourne relies on material published on the Department for Education and Science website showing suitable qualifications for the nursery nurse post.  It is clear that the list of qualifications is not ranked so that the question of equivalence or superior qualifications is dealt with in that information.  The Tribunal considered the print outs from the Department’s website and against that, set the evidence of the Claimant and her former colleague, Mrs Parkin, as to conversations which they had had with Mrs Saunders as to the nature of the course which Mrs Saunders attending leading to the B Tech qualification.  

12.	Mr Bourne submits that the Tribunal ought not to have accepted that indirect or hearsay evidence in preference to the evidence displayed on the Department’s website.  We cannot accept that submission.  We, of course, are not here to retry the facts of the case.  It is well established that hearsay evidence is admissible before an Employment Tribunal, it being a matter for the Tribunal as to what weight they apply to that evidence.  As we have earlier said, we are not satisfied that the information on the Department’s website purported to determine the question as to whether or not those two qualifications were equivalent or one was superior to the other.  In these circumstances, it seems to us that the Tribunal reached a permissible finding, particularly bearing in mind the intensity of the respective courses to which Mr Alston himself had spoken as is recorded at paragraph 3.1 of the Tribunal’s liability reasons. 

13.	The Tribunal, in these circumstances, appeared to have made no specific deduction under the principle of Polkey for the risk of a fair dismissal in the future.  However, the Tribunal did reduce the overall award by 25%, leaving 75%, on the basis of a number of factors which they took into account. That again, we cannot say was not an impermissible finding.  It is, however, relevant to the second issue which is as to pension loss.  Here, the question was whether the Tribunal applied a substantial loss approach, as opposed to the simplified approach, applying the third edition of the Guidelines prepared by a panel of Employment Tribunal chairmen.  They chose the former on the basis that, in their judgement, the prospect of the Claimant returning to work in the public sector (where final salary pension schemes remain in place), compared with her actual experience in two subsequent jobs in the private sector, and the Tribunal’s collective experience of the labour market in the local area, was minimal.  

14.	Mr Bourne challenges that approach, although not the final pension loss figure which is the product of that approach.  He particularly contends that, having taken into account the effect of demographic changes as negating the chance of the Claimant returning to the public sector in the future, they then failed to take that factor, leading to falling school rolls and thus loss of teaching jobs, into account when assessing the prospect of her losing her employment with the Respondent by reason of redundancy at some time in the future.  She was aged 38 years, had only five years’ service with the Respondent and the calculation rate was based on employment to age 65.  We are again unable to translate that submission into an error of law in the Tribunal’s approach.  It was a permissible one on the evidence and argument put before them.  We also bear in mind the overall reduction of 25% under the Polkey principle which particularly affected the pension loss, by far the greatest element in the overall compensatory award.  For these reasons, the appeals fail and both are dismissed.