Sinead Campbell v Tesco Personal Finance PLC

This is an appeal against a decision of an Employment Tribunal at Glasgow dated 29 January 2021. The Tribunal dismissed the appellant’s claims of unfair dismissal (section 98 of the Employment Rights Act, 1996); direct discrimination (section 13 of the Equality Act, 2010); and indirect discrimination (section 19 of the Equality Act, 2010).

Lengthy grounds of appeal were presented. Following consideration under Rule 3. only two grounds were ultimately allowed to proceed to a full hearing. Both of those grounds related to the claim of unfair dismissal.

The first of the two grounds of appeal that were allowed to proceed is in the following terms:

The appellant was employed by the respondent between March 2010 and August 2019. Her job title was Risk Manager. Prior to 2019, the respondent operated three risk teams, Commercial Risk, Customer Risk and CIO Risk. The appellant worked within the respondent’s Commercial Risk team.

In 2018, the respondent undertook a review of its business with a view to making cost savings. A decision was taken to consolidate the respondent’s three risk teams together into two. The effect of this reorganisation was that the appellant and another risk manager, Mr Binnie were both treated by the respondent as being at risk of redundancy. At paragraph 14, the Tribunal found that the reorganisation:

The re-structuring as described by the Tribunal at paragraph 12, however, showed that the new structure, insofar as it affected the appellant and Mr Binnie, created a new Centralised Controls Testing Team, with one new position of Lead Risk Manager and one post of Risk Manager to be filled within that team. At paragraph 15 of its findings in fact, the Tribunal recorded:

A redundancy selection process was undertaken which involved the appellant and Mr Binnie each being scored on a scoring matrix. The criteria of “performance” was scored out of 10 and two other criteria (“leadership” and “technical competencies”) were each scored out of 50. The respondent scored Mr Binnie higher than the appellant, with a total score of 95 out of a maximum score of 110. The appellant scored 87. The appellant was advised by the respondent that she had “come second”. She attempted, without success, to challenge the scores she had been given. On 25 June 2019, she was given a letter which confirmed that her role was formally at risk of redundancy. Following further consultation, her employment with the respondent ended on 2 August 2019.

Both in her claim form (ET1) and at the resultant proceedings before the Tribunal, the appellant’s criticism of her dismissal seems to have been focussed upon the fairness of the redundancy selection process and, in particular, on the scoring exercise. Understandably, therefore, when an attempt was made by an Employment Judge in pre-hearing case management to identify the issues for determination by the Tribunal, the issue of whether there was a genuine redundancy situation did not feature (Footnote: ¹).

Within the claim form, however, the appellant submitted that the redundancy was not “procedurally fair, genuine, adequate or effective”. In pre-hearing correspondence produced as part of the core bundle for this appeal, the appellant made clear that she disputed that there was a “genuine need for redundancy”. Finally, at paragraph 165 of its reasons, the Tribunal noted that:

Having regard to these matters, it is reasonable to conclude that whilst there may have been a much greater level of attention paid to the issue of selection, the existence of a genuine redundancy situation was not an agreed fact in the proceedings before the Tribunal. Accordingly, the onus of establishing that fact still rested upon the respondent in terms of section 98 ERA. The Employment Tribunal proceeded upon that basis.

The Tribunal’s factual findings about the effect of the re-structuring are difficult to follow. At places within those findings, the Tribunal appears to have concluded that the re-structuring resulted in a reduction in the number of risk managers required by the respondent. At paragraph 11, for example, the Tribunal described the impact of the restructuring being that “the number of Risk Managers would reduce from three to two”. As I have already noted, at paragraph 14 it stated that the restructuring “effectively meant the claimant’s role and that of Mr Binnie would be merged into a new role”. At paragraph 15, however, it found that the new structure, so far as it affected the appellant and Mr Binnie, was:

The Tribunal’s analysis of whether or not a redundancy situation existed is found at paragraph 166, and is in the following terms:

Whilst the Tribunal refers (at paragraph 164) to the definition of redundancy contained in section 139 ERA, nowhere in its reasons does it expressly seek to apply that definition to the facts of the case. In particular, there is nothing in the Tribunal’s reasons which explains how it came to the conclusion that the requirements of the respondent for employees to carry out risk management work had ceased or diminished. Having regard, in particular, to paragraph 15 of its findings in fact, such an analysis was important.

Faced with that lack of clarity, I made a Burns / Barke order on 4 October 2022 which invited the Tribunal to respond to the following three questions:

The Tribunal responded to the three questions on 28 October 2022. I have set out the responses in full, as they are important to an understanding the Tribunal’s process of reasoning. The responses were as follows:

The basis of the first ground of appeal is that the Tribunal did not correctly apply its mind to the statutory test under section 139 ERA when considering whether or not the respondent had proved that a redundancy situation existed.

In Murray v. Foyle Meats Ltd [1999] ICR 827, the House of Lords emphasised the importance of applying the unvarnished words of the statute to the issue of whether or not a redundancy situation exists. The relevant question for the purposes of section 139 ERA is whether the requirements of the employer for employees to carry out work of a particular kind have ceased or diminished.

It follows that a reorganisation may or may not end in redundancy. Much will depend upon the nature and effect of the reorganisation (Robinson v. British Island Airways Ltd [1978] ICR 304; Shawkat v. Nottingham City Hospital NHS Trust (No 2) [2001] IRLR 555).

It is not always essential that there should have been a reduction in headcount. A reduction in a requirement for total working hours may suffice (see, for example Packman v. Fauchon [2012] ICR 1362). Clearly, however, where there has been a reduction in the number of employees, the Tribunal may often be able properly to conclude that the reason for that is a diminution in the requirement for employees to carry out work of a particular kind. Similarly, it is not always essential that the amount of work should have diminished. A redundancy situation can arise from a re-organisation which enables the same amount of work to be performed by fewer employees or (per Packman) within a shorter number of working hours.

It is, however, essential, for a Tribunal considering a dismissal said to be by reason of redundancy carefully to analyse the facts and match that analysis to the words of section 139 ERA.

In this case, the Tribunal’s Reasons and Burns / Barke response suggest that it did not correctly consider or apply the statutory test. The fact that three risk teams became two does not, of itself, assist in answering the question whether the requirements of the respondent for employees to carry out risk management work had ceased or diminished. Similarly, the fact that the appellant’s post as a Risk Manager in the Commercial team ceased to exist (because the Commercial team had itself ceased to exist) does not assist in addressing the statutory test. In its Burns / Barke response, the Tribunal referred to the two new posts within the new structure being “not the same as the old roles”. The only difference identified by the Tribunal, however, was that one of the new positions - the Lead Risk Manager role – had a leadership function.

On a careful examination of the Tribunal’s findings in fact and reasons, as supplemented by its Burns / Barke responses, it appears to have concluded that the effect of the reorganisation was that two Risk Manager posts in the old structure (the appellant’s and Mr Binnie’s) were replaced in the new structure by a Risk Manager position and a Lead Risk Manager position. Nowhere, however, does the Tribunal make any finding in fact that the requirements of the employer for employees to carry out risk management work (or risk management work of a particular kind) ceased or diminished. The addition of a leadership role to one of the two positions in the new structure is not directly relevant to the question posed by the statute (cf the facts in Shawkat).

The Tribunal focussed inappropriately upon the reduction in the number of teams and failed to consider whether that truly gave rise to a redundancy situation. It made no finding that there was a reduction in the need for employees to carry out risk management work. Its finding in fact at paragraph 15 suggested that there had not been such a reduction.

For these reasons, I have concluded that the appeal succeeds on the first of the appellant’s two grounds.

That being so, it is not necessary for me to say very much about the appellant’s second ground of appeal. That was also the subject of a Burns / Barke order, the Tribunal’s response to which made clear that, on the evidence presented to it, the Tribunal had not been prepared to make the finding in fact contended for by the appellant. Had the second ground of appeal stood alone, therefore, it would not have succeeded.

Since the first ground of appeal succeeds, however, I will set aside the Tribunal’s Judgment to the extent that it dismissed the claim of unfair dismissal, and remit that aspect of the appellant’s claim to a differently constituted tribunal for a re-hearing.