Akzo Coatings Plc v Thompson & Ors

Factual and Procedural Background

This opinion concerns two appeals arising from redundancy dismissals at a distribution centre operated by Company A. The employer announced the closure of the Middleton Distribution Centre ("MDC") affecting 45 employees, including the eight employees who are the subject of these appeals. Alternative employment was offered at two other sites: the Warrington Distribution Centre and the Middleton Paint Centre. Selection criteria for these alternative positions were established and interviews conducted. The eight employees were unsuccessful in securing alternative employment and were dismissed on 12 March 1993.

The employees brought claims of unfair dismissal before the Manchester Industrial Tribunal. The Tribunal found in favour of the employees, holding that the dismissals were unfair due to flaws in the selection procedure for alternative employment. The employer appealed this decision, constituting the first appeal. The employees subsequently appealed against the dismissal of their application for a review of the Tribunal's remedies decision, constituting the second appeal.

Legal Issues Presented

1. Whether the employer acted reasonably in treating redundancy as a sufficient reason for dismissal under Section 57(3) of the Employment Protection (Consolidation) Act 1978.
2. Whether the selection procedure for alternative employment was fair and reasonable.
3. Whether the Tribunal erred in law by applying the Williams and Others v Compair Maxam guidelines, which relate to selection for dismissal, to the employer's process for offering alternative employment.
4. Whether the employees were entitled to a review of the remedies decision based on allegedly insufficient evidence concerning pension losses.

Arguments of the Parties

Appellant's Arguments (Employer)

• The employer argued that the Tribunal misdirected itself by applying the Williams guidelines, which concern selection for dismissal, to the process of offering alternative employment.
• The employer contended that the selection procedure for alternative employment was reasonable and that they took adequate steps to find suitable alternative roles for the employees.
• The employer submitted that the appeal against the remedies decision should be dismissed, as the employees failed to provide sufficient evidence concerning pension losses at the remedies hearing.

Respondents' Arguments (Employees)

• The employees argued that the Tribunal correctly found the selection criteria and procedure to be unfair and unreasonable.
• They contended that the secret subjective assessments and lack of transparency in the interview panel process rendered the selection procedure flawed.
• The employees sought a review of the remedies decision, asserting that insufficient consideration was given to pension losses.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court considered the Tribunal's findings that redundancy was the reason for dismissal and examined the fairness of the employer's selection procedure for alternative employment. The Tribunal had applied the Williams guidelines, which are designed for assessing the fairness of selection for dismissal within a redundancy pool. The Court held that this was a misdirection in law because those guidelines do not apply to the process of offering alternative employment.

The Court distinguished between selection for dismissal and the employer's duty to take reasonable steps to find alternative employment. It found that the employer had taken reasonable steps in offering alternative positions and that the flawed selection procedure identified by the Tribunal related improperly to dismissal selection criteria rather than alternative employment.

Accordingly, the Court substituted its own finding that the dismissals were fair, reversing the Tribunal's decision. The Court also addressed the employees' application for review of the remedies decision, concluding that the employees had failed to provide necessary evidence concerning pension losses at the remedies hearing. The refusal to allow the review was upheld as not perverse, and the employees' late appeal on remedies was dismissed.

Holding and Implications

The Court's final decision was to allow the employer's appeal and dismiss the employees' appeal regarding remedies. The Court substituted findings of fair dismissal in each of the eight cases.

The direct effect is that the employees were not unfairly dismissed. No new precedent was established beyond clarifying that the Williams guidelines on selection for dismissal do not apply to an employer's process of offering alternative employment. The employees' failure to provide sufficient evidence at the remedies hearing precluded a successful review or late appeal of compensation awards.