Appeal No.	 EAT/1012/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 12 February 2002

Before
HIS HONOUR JUDGE WILKIE QC
DR D GRIEVES CBE
MR R SANDERSON OBE

DSI DATA SYSTEMS INTERNATIONAL LTD T/A "ACTION"	APPELLANT

(1) DR F R HILMI 
(2) MR J CLARK	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING EX PARTE

Revised

	APPEARANCES

For the Appellant	MR M DULOVIC
(of Counsel)
Action Computer Supplies Holdings plc
Group Legal Department
Alperton House
Bridgewater Road
Wembley
Middlesex
HA0 1EH	

HIS HONOUR JUDGE WILKIE QC

1	This is an appeal by DSI Data Systems International Ltd and Mr James Clark against a decision of the Employment Tribunal at Watford which upheld the complaint of Dr Hilmi that he had been unfairly dismissed, awarded him £345 by way of a basic award and £50,000 by way of a compensatory award.  The Tribunal hearing took place on 7 days between 17 April and 27 June, the decision being sent to the parties on 19 July 2001.  Dr Hilmi had made a number of other complaints of breach of contract and race and sex discrimination.  Each of those 3 complaints was dismissed.  Dr Hilmi has not appealed against any of those conclusions.  

2	The factual matrix may be set out shortly.  Dr Hilmi commenced employment with DSI on 19 July 1999.  He worked in the project development team within the information systems division.  Mr Clark was the manager of that project development team.  Due to poor trading results DSI wrote to all staff on 22 June 2000 to inform them of the need to make a significant number of redundancies.  On 4 July there was an announcement of a staff redundancy programme which set out a selection process involving the adoption of certain selection criteria, a weighting process to be applied to the relevant criteria, and then the function manager approaching individuals with a letter saying their position may be at risk.  They would later be given the opportunity to have a one-to-one consultation with employee relations following which ‘garden leave’ would be offered.  The Tribunal recorded that the development of this selection process was effectively on a ‘like it or lump it’ basis, not deriving from consultation.  However, the Applicant had indicated that if that procedure had been followed in relation to him he would never have made a claim.  

3	At first it had not been envisaged that there would be any redundancies in the project development section but on 29 June 2000 Mr Gill, a recently appointed director of that division and Mr Clark’s immediate superior, was told to find a further saving of approximately £40,000.  It was decided that a member of project development was to be selected for redundancy.  There was a pool of 4 individuals, one of whom was Dr Hilmi.  It appears that Mr Clark devised what he was pleased to call ‘a selection criterion matrix’ identifying 9 different systems and assessing each of the members of the pool in respect of each system, giving 4, 3, 2 and 1 markings to each of the individuals but not applying any weighting as between the items.  Plainly this was a different process from that which had been announced by the company as applicable to the other people in respect of whom redundancy decisions were to be taken.  The Tribunal has indicated in paragraph 35 of its decision that Mr Gill, when he gave evidence, was adamant that some of the items within the 9 selected by Mr Clarke were more important than others and by implication therefore there should have been a weighting element attached to them.  Mr Dulovic, who has addressed us with persistence and no little skill this morning, has accepted that that evidence was given.  

4	The findings of the Tribunal however, in respect of the selection of Dr Hilmi, are very clear and are very cogent.  In paragraph 36 they say this:

“Effectively, we are convinced that this matrix was nothing more than a show concocted at some time on or after 29 June 2000 to give the outward appearance that the selection was made on a methodical and rational basis.  In fact, we believe that the selection was purely the preference of Mr Clark.  Mr Gill, who had only been with the company for a few weeks, accepted that he did not know much about what people were doing, let alone what they were capable of doing.”

The Respondent, it is true to say, gave evidence that Mr Houseman, another manager, had cross-checked the scoring and came out with virtually the same as Mr Clark’s.  The Tribunal states of that:

“We believe that was done after the event.”

In paragraph 39 of the decision the Tribunal records that one of the other members of the pool, Mr Davis, was a person who had been with the company for 12 years.  As between himself and Dr Hilmi, his scores on the matrix were slightly better than Dr Hilmi’s but below both of the other 2 individuals.  However, if we take note (as we do) of the order of importance placed on the various skills by Mr Gill in his oral evidence, then in a weighted selection process Dr Hilmi would have kept his job and Mr Davis would have lost his.  The whole point was that there was absolutely no consultation with the staff over any item of the selection procedure.  The consultation which had taken place collectively with the staff committee was at a time when there were no redundancies envisaged in project development.  Mr Dulovic accepted, more or less, that Mr Gill had given evidence to the effect summarised in paragraph 39 but indicated that it was far less firm than the Tribunal has indicated, essentially to the effect that upon consultation and applying the weighting, then more or less anything could have happened.

5	In paragraph 40 of the decision the Tribunal say as follows:

“Accordingly, we are of the view that the selection process actually adopted in the Project Development Department was one which no reasonable employer could have adopted, was intrinsically unfair, bore no resemblance to what had been agreed with the staff committee as the general principle, and was tainted by favouritism and financial interest on the part of the person who made the selection i.e. Mr Clark.  In every conceivable way, therefore, we find that the selection of the Applicant for redundancy was unfair.”

One of the aspects which plainly informed the decision of the Employment Tribunal was the absence of any consultation.  The Tribunal addressed the question whether this was a deliberate decision or not.  They concluded in paragraph 41 that it was a deliberate policy of non-consultation.  They had been referred to the case of Polkey and also to the case of Duffy v Yeomans & Partners Ltd and plainly having in mind in particular what was said in the case of Duffy v Yeomans & Partners Ltd, they went on to say that the deliberate policy of non-consultation was adopted:

“…in circumstances where no reasonable employer could have thought that consultantion would have been useless.  Mr Gill accepted as much when he said that had he had the time to discuss and consider things with the Applicant he may have come to a different conclusion.  We do not think Mr Clark would have come to a different conclusion because he was interested not in who went but rather who he kept.  He was determined to keep Mr Seymour and Mr Balchien at whatever cost.”

6	On the back of these findings it is hardly surprising that the Tribunal found, not only against the Respondent that their dismissal of Dr Hilmi was unfair, but also when it was assessing remedy it declined to adopt the kind of approach sometimes available to Tribunals to speculate on what might have been the outcome of the chances of a fair dismissal had a fair and proper procedure been adopted.  In paragraph 60 of their reasoning they say:

“We are convinced therefore, that his entire losses between the effective date of termination and the date of Tribunal should be compensated without any reduction under the Polkey principle for the reasons we have earlier set out.”

They refer also to King v Eaton (No 2).

7	Mr Dulovic has sought to argue that this appeal is reasonably arguable essentially on 
2 inter-related points.  The first is, he says, that the Tribunal erred in law in that it failed to apply what he says is the principle to be derived from Duffy v Yeomans & Partners Ltd namely, that provided one can construct a set of circumstances in which, on the facts as known to the employers, they could have fairly dismissed Dr Hilmi, the fact that they manifestly failed to adopt or apply a fair procedure should not prevent a defence against an application of the complaining employee succeeding.  

8	The case of Duffy v Yeomans & Partners Ltd concerned one aspect of a potentially unfair dismissal namely, the failure to consult the Appellant employee before dismissing him on grounds of redundancy.  The decision in that case of the Court of Appeal was that if it was a case in which, on the facts known to the employers at the time the employee was dismissed, consultation would have served no useful purpose, then a decision to dismiss without consultation may be a fair decision even although the employer had not taken a deliberate decision not to consult.  It seems to us quite hopeless to argue from that limited area of concern addressed in Duffy that there is some general proposition that if, on the facts reasonably known to the employers, a fair dismissal might have arisen, then however unfair the procedure actually adopted, the complaint of the Applicant should fail.  

9	On the contrary, in this particular case the Tribunal came to a conclusion that the decision not to consult was a deliberate one.  The failure to consult was in circumstances where this Tribunal having heard all the evidence was perfectly entitled to reach the view that no reasonable employer could have concluded consultation would have been useless.  In any event this was not a case in which the fairness or otherwise of the dismissal hinged upon the single issue of consultation.  The findings of the Tribunal were that this was a fundamental and comprehensively unfair dismissal.  It is a little hard to see how much more unfair it could have been.  Therefore even were Mr Dulovic’s submissions as a matter of law reasonably arguable (and we think they are not) in the context of this particular decision those arguments were very much on the margins and entirely failed to take account of the centrality of the conclusion of the Tribunal on unfairness.

10	The converse of the argument is one which sounds in remedies.  Mr Dulovic criticises the Tribunal for failing to embark on a process of constructing a fair procedure and then considering what were the chances that Dr Hilmi would have been selected for redundancy in those circumstances as a guide to determining the remedy.  In our judgment the Tribunal addressed this issue.  They address it succinctly, but by reference to the wealth of material to which they have already referred.  Mr Dulovic has acknowledged that in order to embark on such an exercise the Tribunal would have to have envisaged: -

	1	A different manager performing the selection exercise.
	2	A different system, in the sense that it would have to be weighted in some way rather than un-weighted.
	3	That there would have been consultation..

Furthermore this is against what he acknowledges was the evidence which emanated from Mr Gill namely, that there was some prospect that Dr Hilmi would have retained his job if there had been consultation.  

11	It is right to say that the House of Lords in Polkey adopting the approach of the Employment Appeal Tribunal in Siliphant v Powell Duffrin has concluded that it may well be that in some circumstances it will be appropriate for the Tribunal to embark on such an exercise in assessing the loss of the chance of a fair dismissal in circumstances where the primary complaint is of a procedural nature.  Mr Dulovic is unable to point to any authority to the effect that there is always an obligation on the Tribunal to embark on such an exercise in speculation, however fundamental and comprehensively unfair the procedure or its application might have been in an individual case.  Indeed, the Tribunal was at pains to refer to the authority in King v Eaton where the memorable phrase of ‘not requiring the Tribunal to embark upon a sea of speculation’ informs the decision that there is no such obligation upon the Tribunal to embark on such an exercise.  Therefore, in our judgment, it is quite hopeless to argue that this Tribunal in this case erred in law in declining to do so.

12	That leaves the third argument which is that this Employment Tribunal erred in law in assessing Dr Hilmi’s compensatory award at the maximum of £50,000.  In fact the Employment Tribunal assessed his loss compensable as over £60,000 but was constrained to reduce it to £50,000 because of the then maximum limit of £50,000.  Mr Dulovic has homed in on one particular aspect of their assessment of the compensatory award namely, the fact that they awarded him £5,000 per annum loss of future earnings for the remaining 6 years of his employment life between the age of 59 and 65.  He says, firstly, that the £5,000 is far too much bearing in mind the possibility of Dr Hilmi obtaining freelance work which paid an hourly rate at a higher level than that which translates from his salary.  Secondly, he says, that they were wrong to take 6 years without any discount either for accelerated payment or for the various risks of employment life.  

13	We must remind ourselves that the calculation of a compensation award is very much a matter for the Tribunal.  It is not a matter for us to engage in fine tooth combing through the decision to see whether it passes muster with absolutely the highest standards of Roll Royce justice that one might expect in a multi-million pound claim for damages.  The Tribunal is obliged to approach the matter in a common sense way, using its expertise as the industrial jury.  In this case it is clear to us that they have adopted sensibly a very conservative approach to the level of Dr Hilmi’s continuing loss, because the £5,000 continuing loss is in respect of somebody who is earning at the date of his dismissal £36,500 per annum.  We can see no reason to criticise their conclusion that someone of the age of 59 with skills that the Respondent described as ‘out of date for their requirements’ may well suffer that level of loss deriving from this dismissal for the remainder of the few years left to him until the age of 65.  In our judgment the approach that Mr Dulovic invites us to take is to comb through this decision with a fine tooth comb in order to find each and every aspect which he says was to his client’s disfavour and ignoring other things which perhaps on the other side might have been said to be overly favourable to his client.  It therefore follows that we can see no reasonably arguable prospect of him establishing that the remedy calculation was such that no reasonable Tribunal could have come to, bearing in mind the evidence that they had.  Therefore we are constrained to dismiss this appeal at this ex parte stage.