Ostendorf v Barclays Capital Services Ltd

In an unfair-dismissal claim, the employer must prove the actual reason for dismissal. Where consultation or notice intervenes, the tribunal must ensure that the operative reason remained the reason for dismissal until employment ended. A pre-existing redundancy situation may support that conclusion, but is not conclusive.

An employment tribunal may assess the evidence as a whole, including the absence of evidence that a proposed alternative was commercially viable at the material time. This does not reverse the legal burden. An appellate court may not substitute its factual assessment or interfere merely because a finding could have been expressed more precisely. Redundancy consultation must be genuine and open-minded, but an individual non-disclosure will not necessarily render the overall process unfair where the tribunal permissibly finds it fell within the range of reasonable responses.

The claimant, formerly the respondent bank’s Global Head of Funding Structuring, was dismissed for redundancy. He alleged that redundancy was a pretext: he had devised a financial proposal, described as the Second Solution, and his manager wanted others to obtain its benefit.

The East London Employment Tribunal rejected the unfair-dismissal claim in February 2013. On reconsideration, it examined new evidence concerning a 2012 transaction with an Italian bank. It held that the later transaction had not implemented the Second Solution and that the proposal had not been commercially viable during the redundancy process. It also upheld the fairness of the consultation despite an undisclosed hostile email from a manager involved in one meeting.

The claimant appealed both decisions. The central issues were the reason for dismissal, the burden of proof, the alleged factual errors in the reconsideration decision, and whether the consultation was a sham or unfair.

1. Appeals dismissed. The Employment Tribunal was entitled to find that redundancy, and no ulterior motive connected with the Second Solution, was the reason for dismissal. It properly examined the reason both when the claimant was placed at risk and throughout consultation until termination.

2. Under section 98 of the Employment Rights Act 1996, the legal burden remained on the employer to establish the reason for dismissal. The tribunal’s findings that there was no agreement by the Italian bank, little evidence of favourable market conditions, and no reliable evidence that practical obstacles could be resolved were findings on the evidence. They did not transfer the legal burden to the claimant.

3. The Employment Tribunal permissibly treated the history of an unproductive role and earlier consideration of redundancy as corroborative, though not determinative, of the manager’s stated reason. It also permissibly concluded that the Second Solution was not commercially viable at the relevant time and was not implemented by the 2012 transaction.

4. The Tribunal had made an error insofar as it suggested that the relevant exposure lacked collateral. That error was immaterial. Read as a whole, the reconsideration decision showed a detailed understanding of the financial arrangements and contained independent, sustainable reasons for its conclusions.

5. Consultation in a redundancy case must be a genuine attempt to identify alternatives to dismissal and must be approached with an open mind. However, the Tribunal was entitled to find that non-disclosure of the manager’s hostile email was a judgment call within the range of reasonable responses. The claimant already knew that the manager opposed his proposals, and the consultation comprised more than that single meeting.

6. The challenges sought, in substance, to reopen primary findings of fact. No perversity, material evidential defect, or other error of law was established.

• Employment Appeal Tribunal: dismissed the claimant’s appeals from both Employment Tribunal decisions.
• East London Employment Tribunal: dismissed the unfair-dismissal claim by judgment promulgated on 6 February 2013.
• East London Employment Tribunal: after a reconsideration hearing, upheld the original dismissal of the claim by decision sent on 14 December 2015.