Potato Marketing Board v Harris [1996] UKEAT 592_95_1302 (13 February 1996)

JUDGMENT Revised APPEARANCES For the Appellant MR BRIAN NAPIER (of Counsel) Messrs Linnells Solicitors 12 King Edward Street Oxford OX1 4HX For the Respondents MR MICHAEL FORD (of Counsel) Messrs Russell Jones & Walker Solicitors Swinton House 324 Gray's Inn Road London WC1X 8DH JUDGE CLARK : In late 1993, as a result of financial constraints, the appellant Board decided to reduce its staff from 228 employees to 158. Of the 70 posts to be removed 30 were among staff working "in the field". Mr Harris fell into that category, having been employed by the board since 2nd June 1969, and at the material times holding the post of Assistant Area Manager. On 10th March 1994 Mr Harris was selected for redundancy and he was dismissed. He commenced proceedings in the Industrial Tribunal complaining that his dismissal was unfair. The matter came before the Reading Industrial Tribunal (Chairman: Mr N Jenkinson) in January and March 1995. The tribunal's reserved decision and extended reasons for that decision are dated 20th April 1995. The Industrial Tribunal accepted that the reason for dismissal was redundancy and the respondent contended that such dismissal was automatically unfair under Section 59(1)(b) of the Employment Protection (Consolidation) Act 1978 ; alternatively, unfair under Section 57(3) of the Act. Section 59(1)(b), which was repealed with effect from 3rd January 1995 but applied to this dismissal, provides so far as is material: "[(1)] Where the reason or principal reason for the dismissal of an employee was that he was redundant, but it is shown that the circumstances constituting the redundancy applied equally to one or more other employees in the same undertaking who held positions similar to that held by him [the employee] and who have not been dismissed by the [employer, and ... (b) that he [the employee] was selected for dismissal in contravention of a customary arrangement or agreed procedure relating to redundancy and there were no special reasons justifying a departure from that arrangement or procedure in his case [in the case of the employee]. then for the purposes of this Part, the dismissal shall be regarded as unfair." The tribunal found that this dismissal was unfair under Section 59(1)(b) of the Act in these circumstances. Prior to 1990 collective bargaining took place between the management and a Staff Association. In 1990 that Staff Association was subsumed into the Trade Union, IPMS. In 1982 an agreement in writing was made between the Board and the Staff Association for handling redundancies. That agreement was revised in a further written agreement dated 6th March 1987 ["the 1987 Agreement"]. Section 5 of the 1987 Agreement is headed `Selection Procedure', and sets out guidelines for the procedure to be adopted when selecting for redundancy. Moving forward to 1994, the tribunal record that the IPMS Officer dealing with this redundancy exercise on behalf of the union, Ms F Sloman, gave evidence that she was unaware of the existence of either the 1982 or 1987 Agreements at all relevant times. The tribunal also record that Mr Harris said he was unaware of the 1988 (we think that should be 1987) Agreement, although he was aware of some sort of document which had been referred to at an AGM of the Staff Association when the members had been told by the then Chairman of the Staff Association whose name he could not recall, that the contents of the document were secret - presumably a secret from the members on whose behalf an agreement had been negotiated. Further at paragraph 18 the Industrial Tribunal record: "18 Mr Cartwright testified that he was not aware of the existence of the Agreement as a whole. He was aware that an agreement had been made in about 1988/89 about the use of a multiplier of salary in calculating entitlement to redundancy payments." It would, of course, have been helpful if instead of simply recording the evidence, the Industrial Tribunal had set out their findings of fact as to the state of knowledge of the persons involved in 1994 redundancy exercise, in so far as such findings were material to the tribunal's conclusions. Doing the best we can we infer that the Industrial Tribunal accepted that Ms Sloman, Mr Cartwright who was the Board Secretary and Solicitor and Mr Harris were unaware of the existence of the 1987 Agreement. At paragraph 14 and 15 the Industrial Tribunal say this: "14 On 16 February [ page 56 of the bundle ] Ms Sloman wrote to Mr Cartwright suggesting procedures to be adopted at a meeting to be held (it took place on 10 March 1994) to decide which posts should be made redundant. She suggested that they allocate the first hour on that day to discussing the criteria which they intended to apply which must include needs and future needs of the Board, length of service and, possibly, age. She suggested that each of the Divisional Managers be called in separately and she suggested what the effect of the reductions might be in the divisions. 15 The meeting duly took place in form similar to that suggested by Ms Sloman and Mr Harris was selected for redundancy." We are unclear as to whether or not the Industrial Tribunal was here finding that an agreement as to selection criteria was reached between management and the union, represented by Ms Sloman, on 10th March 1994, and if so, what were the terms of that agreement. We know that at page 75 of the appellant's bundle of documents before the Industrial Tribunal was a document which sets out criteria used regarding Redundancies of Field Staff. Was that an agreed selection procedure? The tribunal do not answer that question. The tribunal state their overall conclusion at paragraph 25 in these terms: "25 The fact that the Union Representative may not have been aware of the redundancy agreement, does not invalidate it. If anything, it places more emphasis upon the other party to the Agreement, the employer, to raise the matter. There is no doubt that some members of the respondent's management were aware of the existence of an Agrement, if not its precise terms. The Tribunal finds that the document was still in existence and binding on the respondents at the time of the round of redundancies in which Mr Harris was involved. It seems to us to meet the requirements of Section 59. The procedures adopted which led us [ I think that should be "which led" ] to the redundancy of Mr Harris were in breach of the Agreement." Pausing there, the tribunal fail to identify the nature of the breach. They go on to find that there were no special reasons justifying a departure from the agreed procedure. That is on their findings the 1987 Agreement and accordingly find that the dismissal was automatically unfair. In those circumstances the tribunal felt it unnecessary to go on to consider Section 57(3). The kernel of Mr Napier's submission on behalf of the appellant before us is simply this. The tribunal took an over legalistic approach to the question, what was the agreed procedure, if any, applicable in Mr Harris's case? It was the appellant's case, summarised by the Industrial Tribunal in paragraph 2(b) of their reasons, that a selection procedure had been agreed between management and union on 10th March 1994 which superseded any earlier agreement. However, the tribunal did not deal with that contention in their reasons. Indeed, they precluded themselves from so doing by treating the 1987 Agreement as if it were a contract (see paragraph 23 of the reasons). At paragraph 7 they say: "The Tribunal heard no testimony to suggest that the second agreement had been formally replaced by any other documentation or formally cancelled or abandoned. We find that, having regard to its contents, for example the initial unnumbered paragraph, and paragraphs 1 to 4, it replaced the 1982 agreement." That is too formalistic an approach. No formal document is required to alter a procedure agreement of this type. The question here is whether a selection procedure was agreed on 10th March 1994 which replaced earlier agreements, whether within the knowledge of the parties or not, and thus was the agreed procedure to be considered in relation to Mr Harris's dismissal. We think that that submission is correct. We cannot accept Mr Ford's submission that the tribunal has implicitly considered that question and resolved it in favour of the respondent. In our judgment this tribunal fell into error by taking to formalistic an approach and failed to ask itself the correct question. It follows in our judgment that this appeal must be allowed. We think despite the submissions by Mr Ford, that the proper course is to direct that the matter be reheard before a fresh Industrial Tribunal. The questions before the next tribunal will include: (1) was agreement reached between management and union on about 10th March 1994 to provide for a selection procedure to be applied in the redundancy exercise which led to Mr Harris's dismissal? (2) if so, did it replace or vary the 1987 Agreement, and if so in what respects? (3) what were the terms of the relevant agreement as found? (4) was the employer in breach of the relevant agreement in selecting Mr Harris for redundancy and if so, how? (5) if so, were there special reasons for departing from the relevant agreed procedure? (6) if no breach of Section 59(1)(b) is found, was the dismissal reasonable or unreasonable under Section 57(3) of the Act? We think that is the proper approach. It will be for the next Industrial Tribunal to make all necessary findings of fact in order to reach its conclusions on those questions. Accordingly, we shall say no more about the facts of the case. JUDGE CLARK : I will make a correction at paragraphs 3, 4 and 5 of our guidance to substitute for the "March 1994 Agreement" - "the relevant Agreement", as found in 3. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII