Unison v Leicestershire County Council

Lord Justice Laws:

“1. The trade union Unison, which is recognised by the respondent as representing a substantial number of its employees, complains that, in implementing the results of a job evaluation scheme by the process of dismissing all employees whose terms and conditions of employment were to be changed to their disadvantage and simultaneously offering them re-engagement on the new, less favourable terms, the respondent was in breach of its obligation to consult with them imposed by section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. It seeks a protective award in respect of three descriptions of employees: the downgraded group, said to number about 800 who, as a result of the job evaluation exercise were to be placed in a lower grading in the pay structure: the bonus group, said to number about 300, whose bonus payments were adversely affected by the exercise; and the enhancement group, said to number 1550, whose rights to such things as unsocial hours and weekend working supplements and overtime were adversely affected. Because of the way the scheme was implemented, the downgraded and bonus groups can conveniently be dealt with together and they will be referred to hereafter as the downgraded group.”

“(1) In this Chapter references to dismissal as redundant are references to dismissal for a reason not related to the individual concerned or for a number of reasons all of which are not so related.”

“188(1) 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.

(1A) 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.

(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…”

Section 188(1A) (and some other provisions in the current text of the statute) was introduced by statutory instrument to give effect to the United Kingdom’s obligations arising under Council Directive 98/59/EC on the approximation of the laws of the Member States relating to collective redundancies. Both the Directive and the Act had legislative predecessors, and our attention was directed to some of the provisions there contained. However for reasons I shall give I do not find it necessary to set out or describe those measures.

“(4) The protected period-

(a) begins with the date on which the first of the dismissals to which the complaint relates takes effect, or the date of the award, whichever is the earlier, and

(b) is of such length as the tribunal determines to be just equitable in all the circumstances having regard to the seriousness of the employer’s default in complying with any requirement of section 188…”

“7.1 In 1997, an agreement known as the Single Status Agreement, applicable to all local authorities, was negotiated at national level. It required each local authority to review the pay and grading structures of its administrative, professional, technical and clerical grades on the one hand and its manual grades on the other, and produce a single unified pay structure covering both. This required each job to be evaluated under a recognised job evaluation scheme and placed within the single structure.

7.2 In consequence of this process, some employees were likely to be upgraded, some downgraded – that is placed in a lower salary band than at present – and some would stay the same. As part of the negotiations, at least at Leicestershire, other elements of the pay package, such as unsocial hours payments, overtime, bonuses and the like were also discussed. Other than bonus payments, these can conveniently be described collectively as enhancements. The respondent was anxious to reduce the amount it spent on enhancements, particularly in its Social Services Department.

7.3 Discussions about applying the Single Status Agreement began in 1999. The original intention was that the new grading structure would be implemented by 1^st April 2001. This proved impossible and the date was changed to the autumn of that year and then to 1^st September 2002, this date being announced by the then Leader of the Council at a Council Meeting in March 2002.

7.4 Between July 1999 and May 2002 there were 16 meetings between the management and union sides (seven trade unions were involved) for the purpose of keeping the union side informed of progress on the technically complex task of evaluating some 9000 jobs, the union having decided not to involve themselves in the actual process of evaluation. By June 2002 the majority of jobs with the Council (other than school based jobs) had been evaluated and the respondent’s attention therefore turned to a range of related industrial relations issues which would have to be addressed before the outcomes of the evaluation process could be implemented. These included, the proposed unified grading structure; grading outcomes and pay scale; phasing in the cost of upgrading staff (about 50% of the workforce would be upgraded); the protection period for those to be downgraded; harmonisation of enhancements; outstanding grading reviews and an appeals process; back-dating; a support programme for down graded staff; and the difficult issue of market premia, that is uplifts to reflect the going market rate for certain posts.

7.5 Despite a further 14 meetings, by mid-October no agreement had been reached on the main points and both sides were becoming increasingly disenchanted with the behaviour and attitude of the other. The respondent felt that confidentiality had been breached on more than one occasion and unrealistic demands for information were being made and unrealistic positions being adopted. The unions felt that the respondent was withholding information for collective bargaining purposes in breach of section 181 of the 1992 Act which culminated in a reference to the Central Arbitration Committee under section 183 and a formal failure to agree to the East Midlands Regional Joint Council for Local Government Services. Both of these followed the respondent’s decision at its Employment Committee meeting of the 16^th October, to break off the negotiations. The meeting requested ‘further reports from the officers with a view to the implementation of the … job evaluation scheme at the earliest feasible date’.

“The statutory scheme, imprecise though it is can in our judgment mean only that once the duty to consult arises consultation must begin in good time, (ie speedily) after that date rather than in good time, before what might still be a far distant end date.”

“9.3 That the formal political decision to proceed by way of dismissal and re-engagement was taken at a meeting of the Employment Committee on the 12^th December 2002 seems clear. But there is every reason to suppose that in reality the decision had already been taken for all practical purposes. Mr Shipton told us that by that date the great bulk of the work necessary to carry out the decision had already been done. The Christmas holidays were not far away, and the letters to employees – some 2650 – were to be sent on the 30^th December. Given the amount of officer time this would have required and the cost involved in preparing the letters, there can have been little if any doubt about what the political decision would be. The contemporary documents support this view.

9.4 In his report to the Employment Committee of the 18^th November, Mr Shipton reported that:

‘The County Council is now considering proposals to implement job evaluation following the failure to reach an agreement with the trade unions. This will mean that the Council will be required to give employees (who are downgraded or subject to a reduction in enhancement payments) notice terminating their current contract of employment and simultaneously offering a new contract of employment… Since this is a dismissal, individual members of staff would be entitled to pursue unfair dismissal claims...’

The report was noted.

9.5 In a letter of the 14^th November from John Legrys, the Secretary to the union side, the County Solicitor was asked:

‘3. Revocation of existing employment contracts and the issue of new contracts. It is understood that from discussions at Departmental level preparations are now being made for the issue of these notices in January 2003. Can you please confirm when the notices are to be issued?

In addition for the avoidance of doubt the Trade Union side will not accept or agree to a notice being place [sic] on the back of a ‘Staff Bulletin’ …. Each individual employee must be given formal notice in accordance to [sic] legislation.’

9.6 In her reply dated the 25^th November, the County Solicitor, Elizabeth McCalla, replied:

‘3. I can confirm that, where staff are being downgraded, the intention is to issue notices early in the New Year. Each notice will have to address the employee’s individual circumstances… The timing does, however, depend on discussions taking place at regional level arising out of the failure to agree and final decisions being taken by the Employment Committee.’

9.7 The reference to ‘final’ decisions of the Employment Committee which would affect the ‘timing’ is instructive, as is the absence of any suggestion that, timing apart, nothing is yet certain. Read together with Mr Legrys’ letter to which it is a reply, and the considerable level of activity already underway to implement the strategy, there can be little doubt that, if section 188(1) does require a decision to dismiss to have been taken before the duty to consult arises (which in our judgment it does not) then, for all practical purposes such a decision had been taken. All that took place on the 12^th December was the announcement of a decision already arrived at. Quite clearly, given the tenor of the County Solicitor’s letter and the background activity, any proposal to dismiss was as much that of the elected members as the officers. The duty to consult was therefore triggered by mid- November at the latest.

9.8 On the 13^th December Mr Shipton wrote to Mr Legrys informing him of the formal decision of the committee of the previous day ‘to proceed with imposing job evaluation’ but not explaining how it was to be done. On the 20^th December a document describing itself as a consultation notice under section 195 of the 1992 Act and purporting to contain the information required by section 188(4) was sent to Nasima Sarang the local Unison Branch Secretary. The covering letter simply invited her ‘to discuss this notice’.

9.9 In our judgment, the timing of the formal announcement to the union that dismissals were to take place – which was the notice of 20^th December rather than the letter of the 13^th December – coming as it did at least a month after the decision, places the respondent in clear breach of their duty under section 188(1) and (2) to consult ‘in good time’.”

THE FIRST GROUND

Was the EAT right to refuse to allow the point to be taken?

“38. The high value of the claim and the fact that it involves construction of a domestic statute against a European Directive are not, in themselves, exceptional circumstances. It was never argued below that the words ‘in good time’ fix a time with reference to the contemplated redundancy date. There is plainly a public interest in the finality of litigation, particularly this litigation, which is ongoing three years after the relevant events. Unison has been deprived of a judgment by the Employment Tribunal on this issue and thus is facing the point at the EAT for the first time. It is not simply a construction point: issues of fact would need to be determined and the Tribunal would be required to address the construction contended for in the light of its findings…”

“The Appellant invites the Court of Appeal to exercise its discretion to permit the ‘in good time’ point to be argued. The circumstances are exceptional: the point is one purely of construction requiring no further evidence and is capable of application by an appellate court as by an ET to the agreed, undisputed and found facts, it will not cause any additional delay, it is material to the quantum of the protective awards made and pursuing it is proportionate in this case in which the award of a considerable amount of public money may be dependant upon this point….”

“These authorities show that, although the appeal tribunal has a discretion to allow a new point of law to be raised or a conceded point to be reopened, the discretion should be exercised only in exceptional circumstances, especially if the result would be to open up fresh issues of fact which, because the point was not in issue, were not sufficiently investigated before the industrial tribunal… In Secretary of State for Employment v Newcastle City Council the appeal tribunal presided over by Talbot J said that it was wrong in principle to allow new points to be raised, or conceded points to be reopened, if further factual matters would have to be investigated. In Hellyer Brothers Ltd v Mcleod this court, in a judgment of the court delivered by Slade LJ which fully reviewed the authorities, was inclined to the view that the test in the appeal tribunal should not be more stringent than it is when a comparable point arises on an ordinary appeal to the Court of Appeal… In this case the appeal tribunal… recognised that the consequence of allowing Mr Jones’s appeal would be a new hearing with fresh evidence… It was therefore a case in which the appeal tribunal would have had to have exceptionally compelling reasons for taking such an unusual course.”

THE SECOND GROUND

“… [A]s Mr Shipton, the respondent’s head of human resources readily conceded, none of the issues which the respondent was required to consult with the unions about once their section 188 duty had been triggered had as yet been discussed.”

Mr Shipton’s concession was referred to again at paragraph 14.2:

“The flow of information to individual employees and the union side and the number of meetings are all irrelevant given Mr Shipton’s concession that none of the section 188 issues were addressed.”

“(1) The purpose of the award is to provide a sanction for breach by the employer of the obligations in s.188: it is not to compensate the employees for loss which they have suffered in consequence of the breach.

(2) The ET have a wide discretion to do what is just and equitable in all the circumstances, but the focus should be on the seriousness of the employer’s default.

…

(5) How the ET assesses the length of the protected period is a matter for the ET, but a proper approach in a case where there has been no consultation is to start with the maximum period and reduce it only if there are mitigating circumstances justifying a reduction to an extent which the ET consider appropriate.”

The EAT continued:

“41. The Tribunal clearly had in mind this guidance. We accept the submission that any ‘consultation’ prior to the making of the proposal to dismiss cannot be taken into account. The Tribunal has a discretion as to the amount of time to be awarded within the protected period and begins with the maximum and works down, if appropriate. The fact that the employer here achieved partial compliance with the requirement to provide information does not mean that there should be an automatic reduction. The Tribunal had in mind that provision. It is a separate provision from the duty to consult, although it arises with a view to achieving meaningful consultation. In other words, without information consultation will not be effective. As to the downgraded group, the Tribunal was entitled to be condign in its criticisms, for this was a case of deliberate refusal, intentionally carried out. We see no error in law so as to criticise the Tribunal for being manifestly excessive or wrong in principle which is the test we are asked to apply.”

THE CROSS-APPEAL

“12.1 The meeting proposed for the 9^th January did not take place, nor did any other meeting to discuss the question of enhancements during the 90 day period. Had such a meeting taken place, given the [appellants’] express desire to resolve this part of the dispute, there is little reason to doubt… that it would have been held with a view to reaching agreement about ways of avoiding the dismissals (as required by subsection 2(a)) and reducing the number of employees to be dismissed (subsection 2(b)). Miss Gower [sc. acting for Unison] does however submit that there would have been no attempt to comply with 2(c), mitigating the consequences of the dismissals because pay protection had been ruled out from further discussions.

12.2 There is simply no evidential basis for that submission. The contemporary documents show that the Employment Committee were anxious to discuss with the union side and reach agreement on the issue of enhancements…

12.3 It is important to understand why this offer of negotiations on the enhancements package, which would have inevitably addressed section 188(2) issues, was not followed up… Mr Clinch [Unison’s legal officer] seems to have been unaware of the letter of the 13^th December from Mr Shipton confirming the respondent’s continuing desire to consult on enhancements and, more surprising perhaps, the consultation notice sent to Miss Sarang on the 20^th December.”

“15.2… Once the decision was taken to enforce the changes in enhancements by dismissal and re-engagement, compliance with section 188(2) was only possible by a willingness to negotiate about those enhancements with a view to reaching agreement which could have included an alternative method of implementation, thus avoiding the dismissals.

15.3 By far the greater degree of culpability falls upon the trade union side who simply did not pick up the respondent’s invitation to consult. The only criticism of the respondent, and it is a slight one in the circumstances, is that they could perhaps have repeated the invitation at a somewhat earlier stage. That they remained sincere in their desire to discuss and reach an agreement is not in question.

15.4 There remain the failures in respect of the late notification of the proposal and the shortcomings in the information provided. These are relatively minor and in our judgment it would be just and equitable to confine the protected period for the enhancement group to 20 days.”

“This was not a case, at least in respect of the enhancement group, of a total failure to consult, but simply of lateness. The primary finding of the Employment Tribunal is that there would have been full negotiations with the trade union to resolve the issue which would have included all matters under section 188(2), substantially the prospect of avoiding the dismissals as a way of achieving change. Failure to consider that as mitigation, is an error, with respect.”

Lord Justice Scott Baker:

Lord Justice Brooke: