Appeal No. EAT/0877/02/RN
EAT/0901/02/RN

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 7 April 2003

Before
THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)
MR J R CROSBY
MRS L TINSLEY

EAT/0877/02/RN
SECURICOR OMEGA EXPRESS LTD	APPELLANT

GMB (A TRADE UNION)	RESPONDENT

EAT/0901/02/RN
GMB (A TRADE UNION)	APPELLANT

SECURICOR OMEGA EXPRESS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT 

Revised
________________________________________________________________________________

	APPEARANCES

FOR GMB (A TRADE UNION)	MS ANNA DIAMOND
(of Counsel)
Instructed By:
Messrs Thompsons
Solicitors
The McLaren Building
35 Dale End
Birmingham
B4 7LF	

FOR SECURICOR OMEGA EXPRESS LTD	

MR ANDREW HOGARTH
(of Counsel)
Instructed By:
Securicor Management Services Ltd
Legal Services
Sutton Park House
15 Carshalton Road
Sutton
SM1 4LD	

THE HONOURABLE MR JUSTICE BURTON (PRESIDENT):

1.	This has been the very well argued appeal from the decision of the Employment Tribunal at Birmingham in which, after a hearing on 28 May and 26 June 2002, it handed down a unanimous decision on 8 July that the Respondent, Securicor Omega Express Ltd, had failed to comply with the requirements of section 188 of the Trade Unions and Labour Relations Consolidation Act 1992 (“TULRA”), that the Respondent should pay a protective award in respect of all those employees of the Respondent who were dismissed by the Respondent by reason of redundancy from the Respondent’s branches at Hams Hall and Droitwich, on 18 January 2002, and that the protective award should be for the protective period of 35 days (5 weeks) beginning 18 January 2002.  The Counsel in front of us, who have, as we have indicated, so well argued the case, are the same Counsel who argued the matter below, before the Tribunal, Miss Diamond, for the union, the GMB, and Mr Hogarth, for the Respondent.  There is a cross-appeal by GMB, as will appear.

2.	The facts were that the Respondent company, described, understandably, by the Tribunal as a well-known national firm, had decided, at any rate by the time of a meeting of 30 November 2001, that two of their branches must be closed, one at Droitwich and one at Hams Hall, and there needed to be redundancies at another branch in Lichfield.  All three of these branches were in the same area, namely, the Midlands area.  The union was given notice of a meeting on 10 December 2001 at Hams Hall.  What had occurred was that Mr Lockwood, a senior representative of the GMB, had been telephoned prior to the meeting and requested by Mr Gilmour, of the Respondent company, to attend.  He was told that the meeting was to discuss redundancies, and was given no other information.  That is the finding of the Tribunal at paragraph 9.  One assumes that it is to be inferred from that that the two union representatives who attended, Mr Lockwood and his more junior union representative, Mr Owen, thus had the same degree of notice of the content of the meeting.

3.	The minutes of the meeting were not in issue between the parties.  The meeting was recorded as being attended by Mr Derek Monk, the Midlands Area Director, Mr Betts, the Midlands General Manager and Mr Gilmour, the Midlands and North Personnel Manager as well as Mr Lockwood and Mr Owen.  The meeting lasted from 14.45 to 16.00.  We shall return later to the content of those minutes, in order to describe by reference to them what occurred at the meeting.

4.	The proposal at the time, put forward by the Respondent in the light of their decision to make the closures of the two branches and to make some redundancies at Lichfield, was that there be 28 redundancies, namely the entire personnel, at Hams Hall, 15 redundancies at Droitwich, and, out of the employees at Lichfield, which was not to close, as we have indicated, there were proposed to be redundancies of 12 employees, making a total number across the three operations of 55.  In the event, as we will explain, there were no redundancies at Lichfield and at Hams Hall the numbers were reduced from 28 to 22, and, at Droitwich, from 15 to 10.  There were no voluntary redundancies and we understand that the reductions were achieved as a result of relocations of a certain number of the employees otherwise intended or proposed to be made redundant.

5.	In those circumstances, there were no redundant employees at Lichfield, and the only employees, in respect of whom the union has brought an application, are those who had been employed at Hams Hall and Droitwich.  It is recorded by the Tribunal in paragraph 13 of its Decision, that the Respondent accepted, for the purposes of the Tribunal’s decision, that Hams Hall and Droitwich were one “establishment” within the meaning of the Act.  The significance of this is that thereby it was accepted that section 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRA) was triggered, in respect of the totality of the redundant employees.  Section 188(1) reads as follows:-

“Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.”

But for that concession, the 10 who had been made redundant at Droitwich would not have been entitled to claim.

6.	The findings by the Tribunal must be recited in material part:-

“14 There were no further meetings between the respondents and union representatives in respect of the closure of Hams Hall and the redundancies at Droitwich.  Notice of the impended redundancies were posted at each branch at or around 13 December 2001.  On 13 December copies of the minutes of the meeting on 10 December were sent to Mr Lockwood.

15 Those employees of Hams Hall selected for redundancy were given notice of termination on 14 December effective from 18 January 2002.  Individuals at Droitwich selected for redundancy had their contracts terminated with effect from 18 January 2002.  The Tribunal were not told when notices were given to those individuals.

17. There was then a meeting described as a redundancy consultation meeting on 4 January 2002 at Lichfield.  Mr McClean and Mr Lockwood attended for the union. There were 6 representatives of the respondents, including Miss Wade and Mr Gilmore.  The meeting did not address Hams Hall and Droitwich.”

7.	We interpose in this regard to deal with the question of Lichfield.  Given the fact that there were no redundancies from Lichfield, and that the union made no claim in respect of Lichfield, the matter did not arise as to whether there was or was not some concession or some finding that Lichfield formed part of one establishment for the purposes of section 188(1) of TULRA, as Hams Hall and Droitwich did.  Consequently, but for any such concession or finding, had there been any redundancies, there only being 12 people even being proposed to be redundant, Lichfield would not have, on its own, fallen within the ambit of the relevant provisions of the Act.  It will be seen that the meeting of 10 December did deal, not simply with Hams Hall and Droitwich, but also with Lichfield, and it is also manifestly the case that, after 10 December, there was ongoing consideration, to put it neutrally, in relation to Lichfield and that there was a specific meeting on 4 January 2002 in relation to Lichfield, attended, as the Tribunal has recorded, by the senior representatives of the union, and, as a result of that meeting, and, as a result of the various steps and consultations taken, there were no redundancies at Lichfield.  

8.	It had appeared to us, at one stage of the hearing, that Mr Hogarth might be able to rely on the continuing steps in relation to Lichfield as part of a case that there was a consultation procedure, contrary to the Tribunal’s conclusion, relating to the three branches in respect of which the proposals had been put forward together at the meeting on 10 December.  However, in the light of the way that the Tribunal hearing went, and the fact that there was the concession of establishment made in relation to Hams Hall and Droitwich but not Lichfield, and the finding by the Tribunal in paragraph 17, which we have read, that Lichfield was to be regarded as a separate issue, it became apparent that this was not a line which could prove fruitful for Mr Hogarth.

9.	The central argument has revolved around the conclusions of the Tribunal set out in paragraphs 22, 23, 24 and 25 of its decision which we now set out:-

“22	In this case the duty to consult arose “in good time” and in any event at least 30 days before 18 January 2002.  By the conclusion of their meeting on 30 November, the respondents had decided on closures and redundancies.  They were in a position at that stage to notify the Department of Trade and Industry.  At that stage the respondents should have opened the consultation process by providing proposals in writing to the recognised union.  They did not do so.

23	The meeting on 10 December 2001 was not a consultation meeting.  The meeting consisted of Mr Monks telling the representatives that decisions had been made to close two branches with consequential redundancies.  The union representatives were given no warning.  In fairness to Mr Owen he immediately put up counter proposals but these were rejected.  In the view of the tribunal the respondents present the applicants with a “fait accompli” in respect of Hams Hall and Droitwich.  During the hearing, Mr Monks strove to maintain that he was merely making proposals and would have considered counter proposals.  The tribunal conclude that he was notifying the union representatives of decisions already reached.  That is not a consultation.

24	It is correct that copies of the minutes were later sent to the union representative.  The respondents suggested that they had complied with section 188(4) by so doing.  That information was provided after the meeting on 10 December in any event.  There was no further meeting between the respondents and the union representatives to discuss Droitwich and/or Hams Hall.  Whilst parts of the minutes could be said to comply with section 188(4), that document did not form part of a consultation process.

25	The tribunal accordingly concluded that there was no consultation with the union to consider ways of avoiding the dismissals and reducing the number of employees to be dismissed. The decision to close branches had been made before the unions were involved.  In fact, Hams Hall closed finally on 21 December, although the employees contracts of employment did not terminate until 18 January 2002.”

10.	The balance of section 188 of TULRA should now be referred to, so far as material to consideration of this appeal.  Section 188(1A) reads as follows:-

“The consultation shall begin in good time and in any event-

(a)	where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 90 days, and

(b)	otherwise, at least 30 days,

before the first of the dismissals takes effect.

As to the balance of section 188:-
(2)	The consultation shall include consultation about ways of -

(a)	avoiding the dismissals,

(b)	reducing the numbers of employees to be dismissed, and

(c)	mitigating the consequences of the dismissals,

and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives.

(4)	For the purposes of the consultation the employer shall disclose in writing to the appropriate representatives-

(a)	the reasons for his proposals,

(b)	the numbers and descriptions of employees whom it is proposed to dismiss as redundant,

(c)	the total number of employees of any such description employed by the employer at the establishment in question,

(d)	the proposed method of selecting the employees who may be dismissed, …

(e)	the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect and

(f)	the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliance with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed.”

11.	In the event of a failure to comply with the requirements of section 188, a complaint may be presented to an Employment Tribunal and that is what, in this case, the GMB has done.  On presentation, and on a conclusion as to their being breach, by the Tribunal, the Tribunal may make a protective award.  That is provided for in section 189(3):-

“A protective award is an award in respect of one or more descriptions of employees -

(a)	who have been dismissed as redundant, or whom it is proposed to dismiss as redundant, and

(b)	in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188,

ordering the employer to pay remuneration for the protected period.”

If such a protective award is made, then that can be turned into money, by virtue of section 190 of the Act, which we reads in subsection (1):-

(1)	Where an employment tribunal has made a protective award, every employee of a description to which the award relates is entitled, subject to the following provisions and to section 191, to be paid remuneration by his employer for the protected period.”

Subsection (2) provides in respect of the calculation of the remuneration based on a week’s pay, and remuneration in respect of the period of less than one week may be calculated by reducing proportionately the amount of a week’s pay.

12.	The Tribunal, as Miss Diamond made clear, made firm findings, as we have summarised them, that there was here no consultation.  The basis of Mr Hogarth’s attack, leaving aside the basis to which we have referred above, by reference to Lichfield, has been, in the main, twofold.

1.	It is plain from paragraphs 23 and 25, run together, that the Tribunal here regarded 10 December 2001 as not being a consultation meeting, as not being consultation, because there had been a prior decision to close the branches before the unions were involved.  That, he submits, is an error of law.

2.	The Tribunal further concluded that, whilst parts of the minutes of the meeting of 10 December could be said to comply with section 188(4), and, indeed, on any basis, a substantial number of the sub-paragraphs of 188(4) are likely to be engaged, the document did not form part of the consultation process, because it was not served prior to the meeting of 10 December.  The 10 December was not a consultation meeting and there was no consultation thereafter. 

He submits that both those two foundations of the Tribunal’s decision are erroneous in law.  He submits, that in those circumstances, the basis of the Tribunal’s decision falls away and he invites us to substitute our own conclusion and submits that no other conclusion could be reached than that there was adequate consultation within section 188 of the Act.  Miss Diamond submits that if the substantive basis of the Tribunal’s decision falls away then, at the worst, we should remit the matter for a fresh conclusion by a different Tribunal.

13.	We turn to the factual situation, as it appears clear from the documents before us, which are not challenged.  The first place to go is the minutes of the meeting of 10 December 2001. These record that Mr Monk opened the meeting, and indicated that it had been decided to follow a course in the Midlands of site closures and redundancies, and he indicated the two branches that were to be closed and the three sites from which there were to be consequential redundancies, including the numbers that were then envisaged such that, across the three operations, there were to be 55 redundancies.  The employees were to be made redundant on a LIFO (last in first out) basis, followed by the basis of Location.  

14.	There was in existence, between the union and the employers, a written memorandum of agreement, which had been in place for some time, which provided that the selection criteria on redundancy should be LIFO, and there were also in existence procedures and agreements relating to enhanced redundancy pay in the event of redundancy.  All that would have been, and was, well known between the parties who attended at the meeting.  The issue, of course, was the understandable one, the moment that Mr Owen and Mr Lockwood were faced with the precise details of the proposed redundancies put before them, namely to see how many jobs could be retained and, indeed, if possible all of them, but, certainly, what steps could be taken to avoid as many of the redundancies as possible.

15.	The minutes record that Mr Owen’s immediate reaction was that he was surprised about the need to close Droitwich.  He added that he had thought that instead of Hams Hall, Oldbury and Loughborough would have been down-sized with the work put into Hams Hall.  There was then some considerable discussion about matters like that, and dealing with administration and management questions.  Mr Lockwood raised the question of voluntary redundancy, and Mr Monk said it had been considered but the answer was “no”.  The primary reason for taking the course of action was to reduce costs and that is why they had gone with LIFO.  Mr Lockwood said he was not himself very enthusiastic about LIFO, but it was the option that they preferred as a union and was considered to be fairer, and Mr Gilmour agreed.  There was then some discussion about the future and about possible other redundancies.  Mr Lockwood asked what about if someone wanted to relocate to another area.  Mr Monk said that would be fine, where they had vacancies they would prefer to keep their skilled people.  Mr Lockwood asked Mr Owen whether he was happy that he understood what was happening because he would be the front-line man, and Mr Owen said that he was happy.  The meeting then moved to discussion about communication with the branches and the need for Mr Owen to be involved.  Mr Gilmour confirmed that LIFO was the clearest method and that everyone understood it and Mr Owen also confirmed that the union advocated LIFO. 

16.	Then, there were further matters in relation to the need to keep the process confidential, and how they would set about the next steps, and Mr Owen was asked by Mr Lockwood whether he was in agreement with all of this, and he confirmed that he was.  Mr Lockwood asked this:-“Can we check with the other divisions of the Company such as Guarding, Connect at Telford, Coalville etc to see what vacancies exist.” 

And Mr Gilmour said that he would do that and let him know and Mr Lockwood said:-“ What about CV writing, job shops etc”.  Mr Gilmour said:- “Again we will help all we can and discuss this when we hold the one to ones”.  

That is a reference to the proposed individual consultation meetings with those concerned.

Further discussion took place about confidentiality, and then Mr Monk said:-“ Are we all clear about what needs to be done and does anyone have any other concerns.”  Mr Lockwood said:- “No.  It is regrettable but please lets make sure it is done properly and lets hope there are no more.”  Mr Owen said:- “No it’s not very nice but I understand why we need to do it.”

17.	A Notification of Reduction was sent by Mr Gilmour thereafter to Droitwich which read as follows:-

“Due to a significant downturn in parcel volumes it is with regret that I must inform you that the Company proposes to significantly reduce the size of the operation at Droitwich with effect from 18th January 2002.

It is proposed that:

7 staff remain based at Droitwich

5 staff transfer to Sandwell

The remainder of staff will be placed in a potential redundancy situation.

The Company are currently entering into a consultation process with the trade union and will commence individual consultations with all effected employees on 11th December 2002 to allow any concerns to be addressed.

The Company intend to work closely with the trade union over this issue in order to mitigate the consequences of the proposal.”

A similar Notification of Reduction, although with different proposals as to the staff, was sent to Hams Hall.

18.	Evidence was given by Mr Gilmour, which we are led to believe was not challenged before the Tribunal, that the redundancy announcement at Droitwich was made on the following day, 11 December 2001, and that consultation with the employees at local level was dealt with by Mr Gilmour’s deputy, Mrs Louise Hurley, and the Regional Manager, Mr Cahill, together with Mr Owen, on behalf of the GMB.  So far as Hams Hall is concerned, the announcement of the redundancies was made on 12 December and Mr Gilmour himself dealt with the local consultations together with the Branch Manager, Mr Tony Moore, and two representatives of the union, Mr Owen, and a local representative Mr Brian Hobsworth.  Individual consultation meetings took place on 12 December.  An announcement was placed on the company notice board and letters were sent out on 14 December.

19.	On 14 December a letter was despatched by Mr Maclean, the lead officer on behalf of the GMB, to Mr Davies the Human Resources Director at the respondent’s, complaining that there had been a breach of the procedures agreed between the union and the company.  And it concluded:-

“Until the above steps are taken, [which appears to have been a requirement for notice to be re-given or at any rate given if there were to be any further redundancies, as were then threatened] I have instructed area and branch representatives they must not in any circumstances become involved with any local consultation.” 

It appears, in fact, that the probability is that by that time all the local individual consultations had already taken place with the involvement of the union in any event.  It also appears that, notwithstanding that letter, very shortly afterwards, what one might call normal service re-commenced between the GMB and the Respondent, because there was a letter from Mrs Wade, the Head of Human Resources, to Mr Maclean, dated 21 December 2001 setting up the meeting on 4 January 2002, to which we referred earlier, and which was to deal inter alia with Lichfield.

20.	It is apparent that from 10 December onwards, leaving aside Lichfield, which eventually was entirely successful, so far as the GMB is concerned, in eliminating the risk of any redundancies, there were reductions in the proposed redundancies at both Hams Hall and Droitwich, and that the union was, at national level, on 10 December and, at local level in the local meetings, involved in the discussions which led to various reductions.

21.	We turn then, against that factual background, to the submissions on this appeal in relation to the Tribunal’s Decision.  In the, as ever, clear judgment of Judge Clark, at the EAT, in Middlesbrough Borough Council v TGWU [2002] IRLR 332, a good deal of what has become important to us in the course of this hearing is clearly set out at paragraph 27, Judge Clark said as follows under the heading:  “Section 188 Consultation”:-

“A number of features merit attention in the context of this case:

(1)	Consultation

“An employer is not required, under s. 188, to consult with the recognised unions about the reasons for the proposed redundancies, in the present case, financial reasons.  (R v British Coal Board ex parte Vardy [1993] IRLR 104 and ex parte Price [1994] IRLR 72).

28 The topics for consultation include those specified in s. 188(2).  As to those, consultation must be genuine and meaningful.  In the later judgment of the Divisional Court in ex parte Price [1994] IRLR 72, Glidewell LJ, said, paragraphs 24-25;

‘It is axiomatic that the process of consultation is not one in which the consultor is obliged to adopt any or all of the views expressed by the person or body whom he is consulting.  I would respectfully adopt the test proposed by Hodgson J in R v Gwent County Council ex parte Bryant, reported, as far as I know, only at [1988] Crown Office Digest, p.19, when he said:

“Fair consultation means:

(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 an authority of the response to consultation.”

Another way of putting the point more shortly is that fair consultation involves giving the body consulted a fair and proper opportunity to understand fully the matters about which it is being consulted, and to express its views on those subjects, with the consultor thereafter considering those views properly and genuinely’.”

And then in paragraphs 45 to 47 Judge Clark returns to the subject matter of consultation and he said this:-

“45	We have earlier observed that the employer is not obliged to consult as to his reasons for proposing redundancies:  ex parte Vardy.  However, consultation must (‘shall’) include consultation about ways of avoiding dismissals: reducing the number of employees to be dismissed and mitigating the consequences of the dismissal, and shall be undertaken with a view to reaching agreement with the unions:  s.188(2).

46	We view those three features of consultation disjunctively.  Thus an employer may genuinely consult with the unions about ways of reducing the numbers of employees to be dismissed and mitigating the consequences of the dismissals, without genuinely consulting as to the principle of whether or not to declare redundancies at all.  The fact that the employer, when embarking on consultation, who believes that his case for redundancies is unanswerable will not, as a matter of law, fail to discharge his statutory duty under s.188, see Hough, passage cited earlier, so it does not follow, as a matter of fact, that such a belief precludes a finding that he has not engaged in genuine consultation for the purposes of s. 118(2)(a).

47	The duties under the section are mandatory.  It is not open to an employer, for this purpose, to argue, as would be open to him in defending a complaint of unfair dismissal by the individual employee, that consultation would, in the circumstances, be futile or utterly useless:  see Polkey v A E Dayton Services Ltd [1987] IRLR 503.”

22.	That enshrines two principles.

1.	That the consultation must in general be fair and meaningful and certainly must not be a sham.

2.	That the consultation does not need to extend to the economic background or context in which the proposal for redundancy arises.

Mr Hogarth has drawn our attention to the recent decision of this Tribunal presided over by Lindsay P, MSF v Refuge Assurance plc [2002] IRLR 324,(“MSF”) in which it is emphasised that the duty of consultation does not arise until redundancies are proposed.  But, of course, implicitly, it must arise before the precise redundancies are decided upon.

23.	There was consideration, as we have made clear, by quoting paragraph 25 of the Decision of the Tribunal as to the effect of the notice under section 188(4) which the Tribunal itself found could be constituted, at least as to most of its subsections, by the sending of the minutes of the meeting of 10 December 2001.  Miss Diamond has relied on the decision in Green v ASTMS [1984] IRLR 135.  In that decision Mr Justice Nolan, presiding at the Employment Appeal Tribunal, recited what was then section 99(5) of the Employment Protection Act 1975 which is almost identical to the wording of the present Act, section 188(4) of TULRA.  It began:-

“For the purposes of the consultation required by this section [our underlining] the employer shall disclose in writing …”

Otherwise, it was materially identical.

Mr Justice Nolan said this at paragraph 18 of his judgment:-

“Flexibility in the course of consultation is obviously desirable, but the consultation envisaged by s. 99 cannot begin until the employer has provided the information set out in subsection (5).”

24.	Miss Diamond did not rely on that authority for the proposition that if a notice under section 188(4) were not served prior to a consultation exercise beginning, the consultation exercise must be deemed to be void, as if there was in some way a precondition of the service in section 188(4), without which anything that happened thereafter could not be regarded as consultation.  Once she did not support that proposition, and we respectfully agree with her, and would not have found, on a proper construction of 188(4), that such is required, then the basis for the Tribunal’s decision is, to put at its lowest, shaky;  because it appears from the Tribunal’s dealing with the section 188 notice, in paragraphs 22 and 24, that the absence of a notice formed an important part of their conclusions that the consultation process did not start on 10 December, indeed, in essence, could not have started, because it had not been preceded by the service of a notice.  But, quite apart from whether it is appropriate to regard the notice as a precondition, it is worth considering whether Nolan J is, or remains, right, when he says that a consultation cannot begin until the employer provided the information set out in subsection (5), i.e., a construction that a section 188(4) notice must be served before the consultation commences.  That is, of course, not, in terms, what section 188(4) says.  All that it provided, even as in the old Act with the addition of certain words, but, certainly as now set out in the new Act, is that the employer shall disclose the matters for the purposes of the consultation.

25.	When Green was decided, and the equivalent section of the Employment Protection Act 1975 was being construed by Nolan J, the Council Directive which formed the basis of the English legislation was in different terms from its present wording.  Article 2(3) of the Council Directive 75/129 of 17 February 1975, reads as follows:-

“To enable the workers’ representatives to make constructive proposals, the employer shall supply them with all relevant information and shall in any event give in writing the reasons for the redundancies, the number of workers to be made redundant, the number of workers normally employed and the period over which the redundancies are to be effected.”

That condition did not specifically deal with when that relevant information had to be supplied by the employer.  It was to enable the workers’ representatives to make constructive proposals and that is not very different to the wording in the Statute, “for the purposes of the consultation”.

26.	That Article was replaced in 1992 by an amending Council Directive of 24 June 1992 92/56/EEC.  As a result the Directive as from 1992 (with our underlining) has read as follows:-

“To enable workers’ representatives to make constructive proposals, the employer shall in good time during the course of the consultations supply them etc …”

And in the present Directive, which is now Council Directive 98/59/EEC 20 July 1998, Article 2(3) remains in that form.

27.	At the time when Nolan J construed the 1995 Act, therefore, he was faced with wording which at least enabled him to conclude that the relevant information must be supplied before the consultation began.  Not only is that not now the case, but the Directive, which has been in force since 1992, says to the contrary, namely that the provision of information must be provided in good time during the course of the consultation which could not allow for the possibility of an argument, that it is of no value or, indeed, even worse, invalid, if it is not provided before the consultation begins.

28.	Of course it is possible for the English legislation to provide differently from the European legislation.  It has been the subject of some discussion in MSF, to which we referred, that the use of words in the English legislation requires that there be consultation when something is proposed, whereas, the European legislation provides for consultation when something is contemplated.  In the course of his judgment in MSF, Lindsay P repeated the conclusion of Nolan J, but certainly the matter was not in any way the subject of argument before him.

29.	We are of the view that it is not necessary or desirable to construe the 1992 Act, TULRA, which in fact came into force in July 1992 after the amended Directive in the same way as Nolan J construed the 1975 Act.  We say so for three reasons.

1.	It appears to us arguable that it is possible to construe the 1992 Act differently from the 1975 Act by virtue of the addition of the words, to which Mr Hogarth has drawn some attention, coupled with the fact that it came into force after the new Directive.

2.	Irrespective of that statutory point, we feel able to construe the 1992 Act in the light of the new Directive as it has now been clarified and enacted.  There is nothing in section 188 which prevents us construing it in the light of the clear terms of the Directive.

3.	If necessary, we would respectfully conclude that Nolan J is not right when he said that it was essential, if that is what he says, for the section 188 notice to be served before consultation began, and his judgment, of course, although persuasive, is not binding upon us.

30.	What, in any event, we conclude, as we have already indicated, is that the service of a section 188 notice should not be a question of procedural or substantive bar wholly, but should form part of the wider question as to whether there has, in a particular case, been fair consultation.  In this case, Miss Diamond would submit that the fact that there was only the slightest of notification to Mr Lockwood and Mr Owen of the nature of the meeting on 10 December, coupled with the absence of a section 188 notice, showed, that there was not, or at the least, put in issue whether there was adequate, consultation, given that the section 188 notice here did not follow until after the meeting.

31.	In the light of that analysis of the law, we turn to our conclusions on the facts of this case.  We are satisfied that the Tribunal erred in law.  The fundamental way in which they erred was the approach they took in paragraphs 23 and 25 of the Decision, in which the Tribunal concluded that because there had been no consultation in relation to the decision to close the branches, therefore, there could not be held to have been consultation at all.   Judge Clark in his summary of the law, to which we have referred, and with which we agree, in Middlesbrough, expressly referred to the decision in Vardy ( R v British Coal Corporation and Secretary of State for Trade and Industry ex parte Vardy & Others [1993] IRLR 104), a decision of the Divisional Court, given on behalf of the Court by Glidewell LJ.  In that lengthy judgment at paragraph 116, Glidewell LJ, having referred to section 188, said this:-

“In my judgment this section does not require a consultation about the reasons for the redundancy, including whether or not a plant should close.”

That entirely fits with the factual scenario in MSF, where the issue was whether there had been an early enough consultation about redundancies, against a background that there had been a decision to close an office at Southwark.  There does not appear to have been any suggestion in that case that the redundancy consultation should have started before the decision to close the office.  The issue was, at what stage after the decision to close, in relation to the particular redundancies, there should have been consultation and, that of course, is the same factual situation as here.

32.	It appears clear to us, that the employer had indeed made a decision to close the branches at Droitwich and Hams Hall, but had not made any decision, either as to the numbers of the redundancies, or, in particular, as to who they should be.  If there was a proposal in relation to a number of redundancies it was, in the event, as a result of the process that was carried out substantially reduced;  if Lichfield were included, the total number of 55 to which the Tribunal referred in paragraph 11 of its decision was almost half in the event.

33.	In those circumstances, we conclude that the decision of the Tribunal that the 10 December meeting should be effectively ignored, was wholly flawed and the issue that should have been addressed was whether there was fair and adequate consultation of the trade union by virtue of what appeared, on and after, 10 December 2001.

34.	We turn to the question of the notice.  Given the conclusion that we have reached that there was no requirement that the notice be served prior to the meeting of 10 December, the fact that it was only served afterwards becomes only part of the issue of whether there was there an adequate consultation.  Even if we were wrong as to our conclusion that there is no requirement to serve the notice prior to the start of the consultation exercise, we would, as we have already discussed, and, indeed, as Miss Diamond did not disagree, have concluded the non-service of the notice prior to the 10 December meeting could not possibly render the 10 December meeting void, or not a consultation exercise, on that ground alone.  And we would, as we have already indicated, conclude that the Tribunal also erred in this important regard in paragraphs 22 and 24 of its decision.  And so taking account of the fact that the notice was only served after the minutes of the meeting, what is the position in relation to fairness and adequacy of the consultation?  It is apparent that we conclude that the Tribunal’s decision must be set aside and, so we are, as is often the case, faced with two conflicting arguments by Counsel as, at any rate so far as concerns the GMB, fall back arguments.

35.	Mr Hogarth submits that once we set aside the Tribunal’s decision, on the Tribunal’s own findings of fact, certainly on the basis of the facts, the unchallenged facts, which we have set out in the course of this judgment, no other conclusion but that there was fair and adequate consultation can be arrived at;  consequently, we should not remit this to another Tribunal.

36.	Miss Diamond submitted that once the decision of the Tribunal falls away it may be that a different Tribunal would nevertheless find that there was inadequate consultation, both by virtue of the late notice to the union officials as to the content of the meeting, and by virtue of the finding of fact by the Tribunal, which indeed is clearly right, namely, that the 10 December was the only substantive meeting between the union representatives and the employers and the fact that the notice under section 188 was not served until after that meeting and the paucity, at any rate, of findings by the Tribunal in relation to what occurred thereafter.

37.	We are satisfied that the only possible conclusion on the facts of this case that we have seen, is that there was adequate consultation under the Act.  Of course matters might have taken a different course, and could have been done differently, but we conclude that, looked at on the basis of the facts that we have summarised in this decision, there is no other conclusion that a Tribunal, properly directed, could have reached than that there was adequate consultation.  The notification prior to the meeting of 10 December was in exiguous terms, the union members who attended only knew that they were going to be discussing a redundancy situation.  It may be that that was because of the inevitable confidentiality of the position which, indeed, was emphasised both at, and after, the meeting, of 10 December.  Nevertheless, it is clear to us that the union officials fully understood the position at the meeting on 10 December, and that although the closures were taken as a fait accompli and although Mr Owen did make certain suggestions, no doubt doing his best on short notice, none of those appear to appeal to the employer.  As the employer was not, in our judgment, obliged to consult on those economic decisions, at any rate on the present law, until, and unless, there are changes as a result of the Consultation Directive, that, in itself, could not amount to any criticism of a failure to consult.

38.	What the employer was required to consult about, in relation to its proposals for redundancy, were ways of avoiding the dismissals which would result from the closures, reducing the numbers of the employees to be dismissed and mitigating the consequences of those dismissed.  It appears to us, that that is in fact what occurred at the meeting on 10 December.  There was very nearly a meeting of minds between the parties, certainly, as to the procedure to be gone through and the basis of selection.  There was to be, and was, local consultation, in which either the union was fully involved or, insofar as it ceased to be involved, if it did after 14 December, that was as a result of a decision by Mr Lockwood.  And the result of the consultation procedures was a reduction in the number of redundancies, by virtue of exactly that process which, perfectly rightly and understandably, Mr Lockwood himself had suggested in the course of the meeting on 10 December.

39.	We conclude that the Tribunal here allowed itself to be overtaken by its conclusion that there had been no consultation, which is clearly the case, in relation to the closures.  Had they asked themselves the question as to whether there had been adequate consultation in relation to the consequences of the closures, with a view to reducing, possibly even avoiding entirely, but certainly reducing, the redundancies which were consequential upon it, they would be bound to have answered that question in the affirmative.

40.	In those circumstances we allow the appeal, subject to what we say in a moment.

41.	Two other matters were raised before us which, in the circumstances, do not arise, but with which we should deal because they have been so ably argued before us.  The first related to the protective award that followed the Tribunal’s conclusion, to which we have referred, which is set out in paragraph 26 of its decision:-

“The tribunal accordingly declare that the respondents have not complied with the obligations contained in section 188 of the Act.  In considering whether to make a protective award and, if so, the extent of the period of that award, the tribunal have taken into account that there was an obligation on the respondents to consult for a minimum period of 30 days.  The respondents could have commenced a consultation process immediately after the meeting on 30 November 2001.  The tribunal have concluded that it is just and equitable in all the circumstances to make a protective award for the protected period of 35 days.”

42.	Mr Hogarth submits that this is a wholly unreasoned and, consequently, inadequate conclusion by the Tribunal.  Further, insofar as it makes a finding of a protected period of 35 days, given that the statutory requirement under section 188(1A)(b) was for 30 days consultation, it would appear odd, to say the least, that a protected period of 35 days is imposed. It is plain that there is jurisdiction to award up to 90 days by way of a protective award, but of course, there will be occasions, many, when the statutory duty is to consult for 90 days, viz,. when the employer is proposing to dismiss 100 or more employees, as per section 188(1A)(a).  It may be that there are justifications for awarding a longer period than the statutory period of 30 days, but that requires explanation.

43.	Miss Diamond has drawn our attention to Spillers French (Holdings) Ltd v Union of Shop, Distributive and Allied Workers [1979] IRLR 339 in which the basis of the protective award is persuasively analysed by Slynn P and, at paragraph 31, he said as follows:-

“The question is, to compensate for what?  It seems to us that it is to compensate for the failure to consult.  It seems to us that here Parliament is providing that employers should, in this kind of potential or actual redundancy situation, discuss the matter with the union and the Secretary of State in the hope of achieving one or other of the alternative courses to which we have referred.  True it is that the Tribunal has power to make a declaration.  It seems to us that there is a duty, in the appropriate case, to make a declaration.  In addition it seems to us that Parliament has given to the Industrial Tribunals the power, if they so decide, also to make a protective award which involves the payment of money.  It seems to us that when that decision is taken, the question which has to be looked at is not the loss or potential loss of actual remuneration during the relevant period by the particular employee.  It is to consider the loss of days of consultation which have occurred.  The Tribunal will have to consider, how serious was the breach on the part of the employer?  It may be that the employer has done everything that he can possibly do to ensure that his employees are found other employment.  If that happens, a Tribunal may well take the view that either there should be no award or, if there is an award, it should be nominal.  It does not seem to us that the Tribunal has to be satisfied, before it can make an award. that the employees have been paid during the relevant period.  Indeed, if the application is made before the dismissals take place, these facts may not be known.  It might be quite impossible to know, until the end of the period, what is the position so far as earnings from the same employer or from other sources are concerned.”

And then at paragraph 35:-

“Therefore this case will now go back to the Industrial Tribunal for them to decide, on the material before them, whether there should be a protective award and, if so, what should be the length of the period which they find to be just and equitable in all the circumstances having regard to the seriousness of the employer’s default in complying with the requirements of the section.”

He concluded:-

“That, as the cases to which we have referred show quite clearly, will involve a consideration of the length of period, the nature of the default, and the ‘just and equitable’ provision.  It will also involve a consideration of the steps which were taken by the employer to deal with the situation which arose and to obtain other employment for their employees, even though they were in breach of the obligation to consult.”

44.	Miss Diamond has also referred us to EC Commission v UK: C383/92 [1994] IRLR 412 ECJ which held that the United Kingdom had not complied with its obligations under the Directive when it allowed offset of monies, paid in lieu of notice, by an employer against the protective award, and she submits that this emphasises that the fundamental underlying point about the existence of the protective award scheme is not, at any rate primarily, compensatory, but is intended to ensure compliance with the Act, but, at any rate, one of the situations in which it could have been said that no protective award at all ought to be made because no loss had been suffered, was thereby eliminated.

45.	It is plain that there are a number of matters which lie behind the setting of the protected period under section 189(4), which reads at (b):-

“The protected period is of such length as the tribunal determines to be just and equitable in all the circumstances having regard to the seriousness of the employer’s default in complying with any requirement of section 188; but shall not exceed 90 days.”

The protective award, of course, then has to be turned, as we said earlier, into money and that occurs under section 190.

46.	A number of factors, therefore, has to be considered by the Employment Tribunal.  The first, of course, is whether there has been a breach, and, if a breach, how serious a breach.  In this case, even on the basis of the findings of the Employment Tribunal that there had been no consultation, because it had found that the 10 December meeting was not a consultation meeting, this is far from being the most serious case which one could imagine of non-consultation.  There will be many cases, hopefully ever decreasing, in which employers will not consult at all and will make employees redundant overnight without having gone through any of the procedures and those certainly merit a high award, up towards the maximum.  This cannot possibly be considered to be anywhere near that analogy, even on the basis of the conclusions by the Tribunal, but certainly taking into account the factual findings which we have already summarised, namely, that we have certainly found adequately, but even, on the Tribunal’s findings, inadequately, there was in the broad sense, involvement of the union.

47.	Secondly, and after the question of the serious nature of the breach has been considered, no doubt, it is clear that the duration must be looked at, and, we have already mentioned the fact, that 30 days would have been the statutory period here, not 90 days.  Thirdly, there is then the matter of what is just and equitable.  It is plainly at this stage that the question of compensation will arise.  Of course it must be right to say, as Judge Clark has said in Middlesbrough, that Polkey does arise as a matter of substance, but Slynn P, at the end of Spillers, himself, allowed for the possibility that there could be no award, and that the Tribunal ought, in the ordinary case, to seek to analyse whether any loss has been suffered;  for example, it could ask itself the question, if there had been a longer period of consultation might anything else have been done to save the jobs.  It could ask itself the question, if there had been a longer period of consultation would that have meant that, at the very least, the termination date would have been delayed, so that the employees in question would have remained employed for longer.

48.	None of these questions were asked by this Tribunal, who arrived at the conclusion of 35 days.  One can only attempt to find out what the reason was, although even Miss Diamond was unable to help greatly as to the thinking behind the reference to the fact that the respondents could have commenced their consultation process earlier, namely, immediately after the meeting on 30 November 2001.  If they had done, as she pointed out, that would have meant that there would have been 48 days, which would have perhaps even allowed for the fact that there might have been an earlier dismissal date.  But none of that, in any event, can begin to explain the thinking that it led to a 35 day protective award.  If we were remitting this to a Tribunal we would invite such a Tribunal to think again on a reasoned basis but, in fact, we are not proposing to remit.

49.	There is one matter, however, with which, having said that we will allow the appeal in all material respects, we must deal, and that is the one respect which Mr Hogarth has not been able to justify in respect of breach of section 188.  That is not the breach of the major part of section 188, that is the failure to consult, but a breach in respect of section 188(4), not in respect to not having served it before the consultation process began, because that is not even there in the statute, but rather in relation to the contents of the notice that was served.  It is plain, from reciting the material contents of the minutes, that section 188(4)(a)(b)(d) and (e) were satisfied in the circumstances.  The union representatives fully understood both, orally and, in due course, in writing, the reasons for the proposals for redundancy, the numbers and descriptions of employees whom it was proposed to dismiss as redundant, the proposed method of selecting the employees who might be dismissed and the proposed method of carrying out the dismissal which was going to involve one to one meetings at the local level, including the obligation to look for alternative employment.

50.	Nothing was said in the minutes about the total number of employees at Droitwich and at Hams Hall and nothing was said as to the proposed method of calculating the amount of any redundancy payments to be made.  It is quite clear to us, that no prejudice was suffered as a result of that failure by the employer, because the union knew perfectly well how many employees there were at Hams Hall and Droitwich no doubt, and the issue, of course, was not how many were there but how many were going to be made redundant, and, there was, in existence, we are told, a generous redundancy agreement which would enable calculation of the proposed redundancy payments.  But, nevertheless, there has been a breach of that section and we propose that that should be marked by an order of a nominal one day protective award and a day’s pay, calculated under section 190 in that regard, in substitution of the finding by the Tribunal.

51.	Finally, we turn to the cross-appeal, a point which Miss Diamond has candidly said she did not argue before the Tribunal.  The application was made in respect of the employees who were made redundant at Hams Hall and Droitwich, but because there is no requirement for the names of those employees to be listed in an application, it could be said that there were also represented before the Tribunal, by the union, those employees who, although threatened by redundancy by the proposal that was canvassed at the meeting of 10 December, were not, in the event, made redundant, in that, as we have already indicated, there was a reduction, so far as Hams Hall is concerned, from 28 to 22, and at Droitwich from 15 to 10.  There were therefore 11 employees who were retained and employed and, not in the event, made redundant.

52.	Miss Diamond submits that the purpose of the legislation is to ensure compliance by the employer with its obligations under statute and not in order to compensate.  We have already dealt with that submission earlier;  it is plain to us that although there is a penal element as a justification for the award, it is only part of the justification, and part of it includes compensation.  Therefore, it is far from certain that what Miss Diamond submits to be a matter of first principles, namely, that it is said to be manifest as a matter of common sense and justice that those who remained employed but were inadequately consulted should be compensated just as are those who were made redundant, having been inadequately consulted, because the breach by the employer would be the same.

53.	It is far from clear to us, therefore, that that is any more arguable than the counter-argument by Mr Hogarth that such an award would be counter-productive to the efforts being made by an employer to find alternative employment, and that at least there being a substantial measure of justification by reference to compensation, it would not be right not to differentiate between those who have lost their job and those who have not.

54.	But we do not descend to questions of first principles of commonsense or otherwise.  We are content to construe the Act, and we begin with section 189(3) which is the jurisdiction for the protective award which we have already read, but read again:-

“A protective award is an award in respect of one or more descriptions of employees -

(a)	who have been dismissed as redundant, or whom it is proposed to dismiss as redundant, and

(b)	in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188,

ordering the employer to pay remuneration for the protected period.”

55.	If Miss Diamond’s submissions were right, the words here would read, “an award in respect of employees (a) who have been dismissed as redundant or whom it was proposed to dismiss as redundant” i.e., who have, at any time, been under threat of redundancy, albeit, that they were not in the event dismissed.

The section does not say that.  There is a clear differentiation between a past tense used in respect of those who have been dismissed and the present tense in respect of those whom an employer is proposing to dismiss.  That fits far more clearly with the submission which Mr Hogarth puts forward, namely, that this is intended to cope with two different situations.  The second is where there is an anticipatory claim for a protective award, by employees applying, through their union no doubt, to an Employment Tribunal, before redundancies have been announced, presumably in an attempt to stave off any redundancies by ensuring that there is adequate consultation, rather like an interlocutory injunction which, says Mr Hogarth, may or may not eventually be encashable, dependent upon whether those who are proposed to be dismissed are in the end dismissed.

56.	As compared to the first part of section 189(3), which deals with applications in respect of those who have been dismissed, made after the event, it is plain to us that the use of the different tenses and the different parts of the subsection favour the argument of Mr Hogarth and not that of Miss Diamond.

57.	It does not rest there, however, because Mr Hogarth further points out that when, as we have put it, encashing the protective award, in taking one’s protective award further to section 190, which relates to where an Employment Tribunal have made a protective award and every employee to which the award relates is entitled, (subject to the following provisions, and to section 191) to be paid remuneration by the employer, there are exceptions to those who can encash their protective award, and those exceptions are clear from section 190(4) and section 191.  Save in respect of an employee who receives notice, which is, of course, notice pay, which is covered by, and consequently disregarded as a result of, the decision in Commission of the European Communities v United Kingdom of Great Britain and Northern Ireland [1994] IRLR 412, if an employee receives remuneration, and continues to receive remuneration, as a result of continuing to be employed by his employer, then he is not entitled to encash his protective award as a result of section 190(4).  Conversely, if, during the protected period, as a result of section 191, alternative employment is offered, and that alternative employment is, in accordance with the section, reasonably refused by the employee, he remains entitled to encash his protective award. The inevitable result of that is, if he does accept the alternative employment, he is no longer entitled to encash his protective award.

58.	It is plain to us, therefore, that those who remain in employment of the employer do not qualify for a protective award.  They would not therefore qualify even if Miss Diamond had asked for it in terms before the Tribunal, in respect of the protective award which the Tribunal decided upon, which we have overturned, and therefore we do not need to consider the further problem for her which is posed by Kumchyk v Derby City Council [1978] ICR 116 in relation to points not taken below.  But, in any event, we are satisfied that, in relation to the nominal award now made by us on appeal, in respect of the applicants, the trade union members for whom the applicant union act, it is only those who were actually made redundant who are entitled to that nominal award.