Northgate HR Ltd v Mercy

In collective redundancy consultation, where appropriate employee representatives are already in place, a complaint about a failure relating to those representatives, including failure to provide written information, may be brought only by the representatives under section 189(1)(b) of the Trade Union and Labour Relations (Consolidation) Act 1992. An affected employee cannot rely on the general provision in section 189(1)(d), and the statutory scheme creates no protection gap.

In redundancy selection, bad faith is not a necessary condition of unfairness. A glaring inconsistency caused by bad faith or simple incompetence may place the decision outside the band of reasonableness. Appellate bodies must avoid re-marking or over-analysing the employer’s decision, but must correct a material misdirection of law.

Nigel Mercy was selected for redundancy after a comparison with another quality consultant. The Employment Tribunal rejected his unfair dismissal claim and initially rejected his protective-award claim. On review, it found a breach of section 188(4) of the Trade Union and Labour Relations (Consolidation) Act 1992, but limited the protective award to one week’s pay.

The Employment Appeal Tribunal, in reference UKEAT/0446/06/DM, allowed Mr Mercy’s appeal and Northgate’s cross-appeal. It removed the protective award and remitted the unfair dismissal issue to a differently constituted tribunal. The Court of Appeal considered standing to claim a protective award, the proper approach to alleged inconsistency in redundancy scoring, and the propriety of the remittal.

1. Protective award. Mr Mercy’s appeal was dismissed. The court interpreted section 189(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 as a carefully structured provision defining and restricting standing. A complaint about failure to provide information in writing under section 188(4), where appropriate employee representatives are already in place, is a failure relating to those representatives under section 189(1)(b). It may therefore be presented only by the representatives to whom the failure relates. It does not fall within section 189(1)(d), which concerns other cases. Article 6 of Council Directive 98/59/EC did not require a different construction. The legislation made no relevant distinction between trade-union and non-union representatives and created no protection gap. [6]-[16]
2. Unfair dismissal. Northgate’s cross-appeal was dismissed. The Employment Appeal Tribunal was entitled to consider the argument challenging the Employment Tribunal’s approach to the selection process. Although amendment would ideally have been sought, Northgate had timely written notice and suffered no significant surprise or prejudice. [17]
3. The Employment Tribunal had found a glaring inconsistency in the redundancy scoring but treated good faith as excluding unfairness. That was an error of law. Bad faith is not the outer limit of the band of reasonableness: simple incompetence may also produce an inconsistency which evidences a decision outside that band. The appellate court must not take a pedantic or overzealous textual approach, elevate a single loose phrase into material error, re-mark the employer’s assessments, or conduct a fine-toothcomb review. The question is whether the tribunal significantly misdirected itself on the law. The court referred to Hollister v National Farmers’ Union [1979] ICR 542, Jones v Mid-Glamorgan County Council [1997] ICR 815 and McLoughlin v Jones [2006] EWCA Civ 1167 in this context. [18]-[23]
4. The Employment Appeal Tribunal was entitled to remit the unfair dismissal issue to a differently constituted tribunal. The factors identified in Sinclair Roche & Temperley v Heard [2004] IRLR 763 did not compel remittal to the original tribunal. The choice made was permissible and disclosed no error of law. [24]-[26]
5. The court dismissed both Mr Mercy’s appeal and Northgate’s cross-appeal. Lord Justice Wilson and the President of the Family Division agreed. [27]-[29]

1. Court of Appeal (Civil Division) — On 13 December 2007, dismissed both appeals and upheld the Employment Appeal Tribunal’s conclusions on standing, the unfair-dismissal error of law, and remittal. [2007] EWCA Civ 1304
2. Employment Appeal Tribunal — On 6 March 2007, allowed Mr Mercy’s appeal and Northgate’s cross-appeal. It removed the protective award and remitted the unfair-dismissal issue to a differently constituted Employment Tribunal. Reference UKEAT/0446/06/DM.
3. Employment Tribunal — Initially rejected both claims. On review, it found a breach of section 188(4) of the Trade Union and Labour Relations (Consolidation) Act 1992 and awarded one week’s pay as a protective award.