London Clubs Management Ltd v Rooney

An employer establishes redundancy as the reason for dismissal by showing, on the balance of probabilities, that the dismissal was wholly or mainly attributable to a statutory reduction in the business’s requirements for employees to perform work of a particular kind. The tribunal must identify the facts supporting its conclusion and explain how they establish, or fail to establish, that reason under the Employment Rights Act 1996. A tribunal may assess credibility on collateral matters, but a wholesale rejection of witnesses is irrational if the tribunal accepts substantial parts of their evidence. The question whether redundancy was the reason must be kept distinct from the later question of fairness.

London Clubs Management Ltd appealed against an Employment Tribunal decision finding that Scott Rooney had been unfairly dismissed. The employer maintained that Rooney’s gaming-manager role had been removed during a period of substantial financial loss and that redundancy was the reason for dismissal. The Tribunal rejected that case, principally because it found the employer’s witnesses wholly lacking in credibility and reliability.

The appeal concerned whether the Tribunal had given adequate reasons, properly assessed the evidence and documents, and applied the statutory question concerning the reason for dismissal before considering fairness.

1. Appeal upheld. The issues whether redundancy was the reason for dismissal and, if so, whether the dismissal was unfair were remitted to a freshly constituted Employment Tribunal.
2. The Tribunal had found facts pointing strongly towards redundancy. The gaming-manager role had been removed from the management structure when the business was making substantial losses, Head Office had directed action to restore profitability, and the work had been redistributed. The redundancy process was recorded consistently in the relevant meetings and correspondence.
3. It was irrational to describe the employer’s witnesses as wholly lacking credibility and reliability while accepting significant parts of their evidence. A fact-finder may rely on credibility concerns arising from collateral matters when assessing evidence on a central issue, but that did not explain the Tribunal’s approach here. If the witnesses’ evidence was rejected wholesale, the Tribunal should also have rejected the evidence underlying its other findings.
4. The Tribunal gave inadequate reasons for concluding that the employer had not discharged the burden under sections 98(1) and 98(2) of the Employment Rights Act 1996. It did not explain how it had addressed the facts pointing to redundancy or why those facts were insufficient under section 139. The reasoning also appeared to confuse the existence of redundancy with the separate question whether dismissal was fair.
5. The Tribunal had failed, for the most part, to address relevant documents, including the consultation and dismissal correspondence. The case was therefore remitted for rehearing. The fresh Tribunal could consider fairness under section 98(4), and, if appropriate, a Polkey deduction. The protected-disclosure issue was not open to reconsideration because there had been no cross-appeal.

• Employment Appeal Tribunal: Appeal from the Employment Tribunal’s judgment dated 18 February 2011. The appeal was upheld and the relevant issues were remitted for rehearing.
• Employment Tribunal: Found that the claimant had been unfairly dismissed after rejecting redundancy as the employer’s reason for dismissal.