Employment E-Missive No.23 – The Thorny Issues in Redundancy Cases
by Charles Price, LLB.(hons) LLM, barrister No5 Chambers, Birmingham - Bristol - London Telephone 0870 203 5555 www.no5.com
1. Redundancy Pointers – What to Look For in Redundancy Disputes
2. New Case Fails to Clear the Muddy Waters When it Comes to Uplifts
3. Case Watch – An Australian Transvestite Exposes the Law of Discrimination
4. Recommended Expert Witness CVs
A Legal Commentary Email.....
Charles Price specialises in Respondent and Claimant work in England and Wales. This e-mail is for academic purposes only. Legal considerations mustbe looked at in the light of the particular circumstances and it may be wise to seek legal advice.
1) Redundancy Pointers – What to Look For in Redundancy Disputes
Unfortunately, due to the economic slowdown UK Plc is suffering at the moment we are seeing a massive increase in unfair dismissal claims related to redundancy. For this reason I have decided to add a checklist of considerations which often arise in tribunal cases of this type.
When fighting a dismissal for redundancy on behalf of a Claimant the strongest arguments are often procedural as tribunals are often adverse to delving into reasons for selection. Often, the strongest cases involve the question as to whether alternative positions were available at the time of dismissal which the Claimant could have been offered if the employer had actually cared. Cases featuring a lack of consultation can also be meritorious. It is quite possible to run the argument that a lack of consultation meant that the tribunal cannot assess adequately the likelihood that the Claimant would have remained in his or her job if the proper procedures were put in place and there for there should a finding of unfair dismissal and without a reduction of compensation.
The success of this type of case, however will often rely upon thorough preparation. It is imperative that solicitors should ask the other side to produce a list of job vacancies the company had at the pertinent times (before and after the dismissal). This process will involve close scrutiny of the Claimant’s skills and CV. Below is an examination of some of the key features which crop up regularly in redundancy cases.
Points to Remember:
The burden is on the employer - S. 98(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show that the employee was redundant.
What the Respondent Must Show
In unfair dismissal cases the onus of proof is on the employer to show the reason, or, if more than one the principal reason, for dismissing the employee (ERA 1996 s.98(1)). If the employer fails to prove the reason is one of the four reasons set out in ERA 1996 s.98(2) or "some other substantial reason" (ERA 1996 s.98(1)(b)) the dismissal is deemed to be unfair (see Maund v Penwith DC 1984 ICR 143, CA). If the employer does prove that the reason for the dismissal was one of those referred to above, the Employment Tribunal must then decide "in accordance with equity and the substantial merits of the case" whether the dismissal was fair or unfair. There is no onus of proof on either the employer or employee for this purpose - the employment tribunal must simply take into account all the circumstances, including the size and administrative resources of the employer's undertaking (ERA 1996 s.98(4).
The ERA 1996 s.139(1) provides that:
"For the purposes of this Act, an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is attributable wholly or mainly to -
(a) the fact that his employer has ceased, or intends to cease -
to carry on the business for the purposes of which the employee was employed by him, or
(ii) to carry on that business in the place where the employee was so employed, or
(b) the fact that the requirements of that business -for employees to carry out work of a particular kind, or
(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer have ceased or diminished or are expected to cease or diminish.
If the Respondent can show that there was a redundancy situation, the tribunal should ask the question; Was the dismissal fair in accordance with S98(4) or the ERA and the range of reasonable responses along the tests in Iceland Frozen Foods V Jones (1982) IRLR 439? In deciding whether a dismissal is fair or unfair an employment tribunal must not substitute its own view for that of the employer as to whether it was fair to dismiss the employee but rather must determine whether dismissal was within the range of reasonable responses open to the employer see Midland Bank plc v Madden 2000 ICR 1283 ICR 1283, Court of Appeal.
Prima Facie Fair
One of the most important practical implications of " redundancy" is that a dismissal by reason of redundancy is prima facie fair. Whether such a dismissal is in fact fair or unfair will then turn on whether the Tribunal considers that the employer acted reasonably in treating the redundancy "as a sufficient reason for dismissing the employee" (see ERA 1996 s.98(2)(c))
Information Must be Provided About Alternative Roles but Claimant Must Indicate an Interest
The EAT has held, in Fisher v Hoopoe Finance Ltd., that where there are one or more possibilities of suitable alternative employment available to an employee who is to be made redundant, then the employer should normally inform the employee of the financial prospects of those positions to enable the employee to make an informed choice. A failure to provide such information (unless impractical, for example if the salary has not been set) is likely to make any dismissal unfair and, presumably, likely to render it reasonable for the employee to refuse the offer.
That appears relatively uncontroversial. Of greater interest, is an indication by the EAT (HHJ Birtles presiding) that a failure by an employee to indicate an interest in a particular position and/or to request further information (including financial information) is a factor which the Employment Tribunal may wish to take into account in reducing the basic and compensatory awards on grounds of contributory fault.
Failure to consult with an employer about to be made redundant will make it likely that a Tribunal would decide that any resulting dismissal(s) was unfair and in this case discriminatory even though it was genuinely caused by redundancy Alstom Traction Ltd v Birkenhead & ors EAT case 1131/00 10th October 2002.
Consultation must be fair which means that there must be:
"(a) consultation when the proposals are still at a formative stage;
(b) adequate information on which to respond;
(c) adequate time in which to respond;
(d) conscientious consideration by [the employer] of the response to consultation"
(R v British Coal etc ex p Vardy & Ors 1993 ICR 720, QBD).
In the present case consultation was brief did not start at a formative stage and involved no conscientious consideration of the Claimant’s response to the suggestion that the respondent needed a full time member of staff.
Statutory Dismissal Procedures
In a redundancy situation, the statutory dismissal procedure requires an employer to tell an employee of the reason for the redundancy, the selection criteria, his score, but not the threshold (ie the 'break' score beyond which his job is safe) or the scores of other employees. Failure to provide this information renders the dismissal automatically unfair and leads to an increase in the compensatory award.
S98A(2), which partially reverses Polkey v AE Dayton Services, has a wide-ranging effect and cannot be narrowly construed to rescue only employers who fail to comply with formal written procedures over and above the statutory minimum.
In redundancy dismissals, where a matrix system is used, this requires that the employee be told the selection criteria (para. 43) and the scores he has achieved (para. 45). It does not require that the employee be told the threshold score he must achieve to remain in employment, or the scores of other employees (para 46). The Claimant was not told of the selection criteria or given any other details.
In the same case it was decided that, if an employer fails to comply with any procedure which a tribunal feels it ought, in fairness, to have carried out, it is able to avail itself of the new statutory defence in s98A(2). This is not limited to formal procedures, whether written down or not. If the employer's actions are fundamental, then it is likely there will be a breach of the statutory dismissal procedures anyway, in which case s98A(2) does not assist.
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2) New Case Fails to Clear the Muddy Waters When it Comes to Uplifts
Since 1 October 2004 employers and employees have had to follow the statutory dispute resolution procedures set out in schedule 2 of the Employment Act 2002 (EA 2002). The applicable procedure in most cases when the employer is contemplating dismissing or taking disciplinary action against an employee is the standard disciplinary and dismissal procedure (SDDP) (regulation 6(1), Employment Act 2002 (Dispute Resolution) Regulations 2004 (the Dispute Resolution Regulations)). This involves (broadly):
The employer giving the employee a written statement of grounds for dismissal or relevant disciplinary action.
A meeting at which both sides may explain their case, following which the employer must inform the employee of the decision and their right of appeal.
An appeal meeting if requested by the employee.
(Schedule 2, EA 2002.) states that employment tribunals must adjust awards by a minimum of 10% (up to a maximum of 50%), either up or down in cases where there has been a failure by employer or employee to abide by the new rules (Emp'tAct 2002 s.31).
If an employer fails to follow the appropriate statutory procedure, and the employee brings a successful tribunal claim in respect of the matter to which the procedure applied, the tribunal must uplift the employee's award by 10% and may, if it considers it just and equitable to do so, increase the award by up to 50% (section 31, EA 2002). In unfair dismissal cases the uplift is applied to the compensatory award only.
There has been little guidance to date on the factors which a tribunal must take into account in deciding the amount of the uplift . In Giles v Geach & another t/a Cornelia Care Homes, ET case no 3100720/05, 25 July 2005 a tribunal awarded a 40% uplift where an employer had failed to respond to an employee's written grievance under the statutory grievance procedures.
A new Scottish case, however threatens to muddy the waters with new guidance on uplifts.
In McKindless Group v McLaughlin (EAT)
The employer admitted breach of the statutory dismissal proceedings. The tribunal awarded a 50% uplift. Overturning this, and substituting a 10% uplift, the EAT stated that:
a tribunal cannot award more than a 10% uplift in the absence of evidence on the reason(s) for breach of the statutory dismissal procedure (para. 13); and,
a tribunal is not entitled to take into account the way in which the employer subsequently conducted the litigation (para. 26)
This guidance flies in the face of the ‘just and equitable’ discretion suggested in section 31, EA 2002. The tribunal should in my opinion be trusted to look at the situation in the whole. As Barrister Daniel Barnett suggested recently:
‘Both of these conclusions are open to question. As to the first, if correct, it would mean an employer who deliberately flouts the procedures and then takes no part in the proceedings could not be subjected to more than a 10% uplift, whereas a well-meaning but ignorant employer who tries to explain his error could be subject to a greater award.’
There is, it seems nothing in the statute which advocates this approach when assessing what level of uplift is 'just and equitable'.
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I worked as a member of the Scientific Staff and Honorary Lecturer MRC Unit for Epidemiological Studies in Psychiatry in Edinburgh. From 1973 to 1994 I was a clinical teacher and Consultant Psychiatrist specialising in old age psychiatry at Nottingham City Hospital. From 1974 to 1979 I was Secretary and Chairman of the Nottingham Area Psychiatric Division and served on several working parties in relation to nurse education, drug custody and administration on the Nottingham Health Care Planning Team for the Elderly.
I became a member of the Mental Health Tribunals in 1981 until October 2004. I have written several papers on suicidal behaviour, marital neurosis in the British Journal of General Psychiatry and other journals. My areas of expertise are: Anxiety disorders and depression (psychiatry); trauma sequelae (psychiatry, including personal injury); accident victims (psychiatry); post-traumatic stress disorder (psychiatry); stress disorders (psychiatry); mental disorder (psychiatric assessment). Medical legal reporting approximately 50 per year over a 10-year period.
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3) Discrimnation Law Skirts Around Transvestite Issue
Luck certainly wasn’t a lady for transvestite, Paul Hurst recently when he was rejected from a casino for being dressed ‘inappropriately’. Last month ‘The Age’ reported from Australia in its article, ‘Stuck Between a Frock and a Card Place’ that transvestite, Paul Hurst or Anne Maree to his friends had been asked to leave a casino because of his appearance. Australian lawyers are now debating whether transvestites are protected in law.
Dressed in one of his best frocks, Mr Hurst was photographed in a glamorous sequined dress partying at the launch of Priscilla, Queen Of The Desert at Star City's Lyric Theatre. A month later he and a friend again donned their dresses for a night out the casino's new spin-off bar, Priscilla's. Unfortunately Mr Hurst found his way barred by 2 bouncers on the night. A security guard had deemed him to be a "man" and "inappropriately dressed" when he was refused entry to the casino at 9.15 on the night of November 1, 2006.
Mr Hurst, of Coogee, filed an action alleging the casino has discriminated against him because of his sexual gender and was refused service and asked to leave. Mr Hurst told the panel of the Administrative Decisions Tribunal (Equal Opportunity Division), that "I have always regarded myself as a woman and lived my life as a woman,"
The casino changed it’s stance at the initial hearing claiming that that Mr Hurst was "wearing an extremely short skirt that barely covered his groin region, white underwear and garters … were visible". Previous evidence provided stated however, that it was Mr Hurst’s friend, "Russell" who was inappropriately dressed in the short red skirt and white pants and garters, and that Mr Hurst had been welcome to stay.
Deputy president of the Administrative Decisions Tribunal, Nancy Hennessy granted an order to obtain a copy of the casino's security video of the incident. The solicitor for the casino told Mr Hurst that under the Anti-Discrimination Act the tribunal can only hear transgender cases.
"The Anti-Discrimination Act does not protect transvestites, it protects transsexuals, but you said you live as a woman," Ms Hennessy said. "Before the tribunal can hear the case what you have to be able to prove to the court is that sexually you are a transsexual."
The parties have been asked to reappear before the tribunal in July to resolve the matters.
In the UK, Discrimination against transsexuals in an employment or vocational context has been unlawful in Britain since 1st May 1999 (under the Sex Discrimination (Gender Reassignment) Regulations 1999, SI 1999/1102).
Discrimination against homosexuals (ie discrimination on grounds of sexual orientation) in an employment or vocational context became unlawful in Britain on 1st December 2003 (under the Employment Equality (Sexual Orientation) Regulations 2003 SI 2003/1661. Even before May 1999 (for transgender persons) or December 2003 (for homosexuals) a person who had been discriminated against on grounds of change of sex or on grounds of sexual orientation could in appropriate circumstances claim for a breach of human rights under the Human Rights Convention. The Gender Recognition Act 2004. allows people who change sex the right to marry in their acquired gender and be given new birth certificates that recognise the acquired gender.
Although the law has not been tested with regards to transvestites it would seem that they do not fall into either strict category of trans gender or necessarily homosexual.
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The author, Charles Price is an employment barrister of 8 years call.
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