Kumchyk v Derby City Council, United Kingdom Employment Appeal Tribunal, Judgment, Law, casemine.com

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Attorney(S)

For the Appellant Mr. A. IRVINE instructed by Messrs. Harvey and Ingrain, 20 New Walk, Leicester.
For the Respondent Mr. R. TEDD instructed by Messrs. Denham, Foxon & Watchorn, 16 New Street, Leicester

Judges

MR R THOMAS
THE HON MR JUSTICE PHILLIPS P
MR R V COOPER

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Kumchyk v. Derby City Council

Smart Summary

Factual and Procedural Background

Mr. Clarke, an engineer employed for several years by Company A as head of a research section, was declared redundant in autumn 1975, with notice expiring on 30th April 1976. He received appropriate redundancy payment and was treated reasonably concerning severance pay. His complaint concerned the manner of redundancy and the employer’s failure to make reasonable efforts to find him alternative employment. An Industrial Tribunal in The City found on 6th January 1977 that Mr. Clarke had been unfairly dismissed. The case was adjourned to consider compensation, and the employer appealed the decision.

Legal Issues Presented

Whether the dismissal of the Plaintiff for redundancy was unfair despite proper selection for redundancy.
Whether the employer failed in its duty to consult properly as required by the Code of Practice and statutory provisions.
Whether the employer failed to make reasonable efforts to find alternative employment for the Plaintiff.
The appropriate approach for an Industrial Tribunal in assessing unfair dismissal claims related to redundancy, particularly when consultation or reasonable efforts to re-employ are alleged to have failed.
The correct remedial approach where an unfair dismissal finding is made but the likely outcome of proper employer conduct is uncertain.

Arguments of the Parties

Appellant's Arguments

The employer contended that the Plaintiff was fairly selected for redundancy from three employees competing for two positions.
The employer argued that all necessary consultation had been conducted and reasonable efforts to find alternative employment had been made.
It was submitted that the Industrial Tribunal’s findings to the contrary were unreasonable and unsupported by evidence.
The employer reserved the question of whether the precedent requiring reasonable efforts to find alternative employment was correctly decided.

Appellee's Arguments

The Plaintiff accepted fair selection but argued the employer failed to consult properly on the overall restructuring plan, which was imposed as a fait accompli without his involvement.
The Plaintiff contended that the employer did not make reasonable efforts to find him alternative employment.
It was argued that had proper consultation and efforts been made, the dismissal might have been avoided or alternative employment found.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Jackson v. General Accident Fire & Life Assurance Co. Ltd [1976] I.R.L.R. 338	Differences in approach to redundancy dismissal fairness between Scotland and England & Wales.	Noted that industrial tribunals in England & Wales are more ready to find unfair dismissal than in Scotland.
Lifeguard Assurance Ltd v. J. J. Zadrozny [1977] I.R.L.R. 56	Industrial tribunals should exercise care before finding unfair dismissal once redundancy and fair selection are established, especially if unfairness is unrelated to selection.	Emphasized the need for relevant evidence to justify unfair dismissal beyond redundancy and selection.
P. W. Kelly v. Upholstery and Cabinet Works 'Amesbury Limited [1977] I.R.L.R. 91	Importance of proper consultation by employers under the Employment Protection Act 1975.	Supported the necessity of consultation and that failure may lead to protective awards.
Vokes Ltd. v. Bear [1974] I.C.R. 2	Employers must make reasonable efforts to find alternative employment when dismissing for redundancy.	Applied as a standard of the reasonable employer; court cautioned against imposing unrealistic standards.
Lowndes v. Specialist Heavy Engineering Limited [1977] I.O.R. 1	Where proper employer actions would not have changed dismissal, tribunal may find no unfair dismissal or nil compensation.	Supported the approach that tribunals have discretion to find dismissal not unfair or award nil compensation if no benefit would have accrued.
Clarkson International Tours Limited v. Short [1973] I.C.R. 191	Similar principle to Lowndes regarding assessment of unfair dismissal and compensation.	Referenced to support tribunal discretion in findings and compensation assessment.

Court's Reasoning and Analysis

The court acknowledged the Plaintiff was fairly selected for redundancy, a concession by his counsel. The focus was on whether the employer fulfilled its duties of consultation and reasonable efforts to find alternative employment. The court emphasized established legal principles requiring proper consultation and reasonable efforts as per statutory and case law, notably the Employment Protection Act 1975 and precedents such as Vokes Ltd. v. Bear.

The Industrial Tribunal’s findings of failure to consult on the overall restructuring plan and failure to make reasonable efforts to find alternative employment were held to be open on the evidence and not perverse or legally flawed. The court noted some members’ concerns that the standard applied to reasonable efforts might verge on perfectionism, but ultimately upheld the tribunal’s discretion.

However, the court criticized the Industrial Tribunal for not expressly considering what the likely outcome would have been had proper consultation and efforts been made. The court explained that tribunals have discretion either to find no unfair dismissal or to award nil compensation if no benefit would have resulted from proper employer conduct. The tribunal must assess the likelihood and loss suffered rather than punish the employer.

Given the absence of a clear finding on the hypothetical outcome of proper consultation and efforts, the court remitted the case for reconsideration. The tribunal was urged to be practical and avoid unrealistic assumptions when evaluating probable consequences.

Holding and Implications

The court SET ASIDE the Industrial Tribunal’s order and REMITTED the case back to the same tribunal for rehearing. The tribunal is to reconsider the matter, including calling further evidence if necessary, with particular attention to assessing the likely outcome had the employer fulfilled its consultation and re-employment obligations.

This decision directly affects the parties by requiring further examination of the compensation issue and the fairness of dismissal under the specific circumstances. No new legal precedent was established; rather, the court clarified the application of existing principles and the tribunal’s discretion in assessing unfair dismissal claims related to redundancy.