William Anthony Lambe and 186K Ltd [CA (Civil), 29/07/2004]

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Wall
Judgment Date29 Jul 2004
Neutral Citation[2004] EWCA Civ 1045
Docket NumberCase No: A1/2003/2711

[2004] EWCA Civ 1045




Royal Courts of Justice


London, WC2A 2LL


The President

Dame Elizabeth Butler-Sloss Dbe

Lord Justice Laws and

Lord Justice Wall

Case No: A1/2003/2711


Mr William Anthony Lambe
186k Ltd

Patrick Green (instructed by MessrsShoosmiths Solicitors) for the Appellant

Robert Moretto (instructed by the Legal Department National Grid Company PLC) for the Respondent

Lord Justice Wall

This is a judgment of the court.

The Appeal


With permission granted by Peter Gibson LJ on paper on 4 February 2004, Mr. William Lambe (the Appellant) appeals against a decision of the Employment Appeal Tribunal (EAT) which, in a constitution chaired by HH Judge Peter Clark on 21 May 2003, dismissed his appeal against the decision of the Employment Tribunal (the Tribunal) sitting at Reading on 25 September and 17 December 2002, the decision being sent to the parties on 20 January 2003.


The Appellant had applied to the Tribunal on the ground that he had been unfairly dismissed from his employment with 186K Limited (the Respondent) . The unanimous decision of the Tribunal was that the appellant had been unfairly dismissed "by reason of the Respondent's handling of his redundancy". In summary, the Tribunal found that although the reason for the Appellant's dismissal was redundancy (a reason permitted by section 98(2) (c) of the Employment Rights Act 1996 ( ERA 1996)), the dismissal was nonetheless unfair because there had been a failure on the part of the Respondent properly to consult him about other job opportunities. The Tribunal decided there should have been a longer period of consultation, and found that seven weeks would have been a reasonable period.


However, the Tribunal went on to find that even at the end of the seven week period the Appellant would not have found alternative employment with the Respondent or any of its associated companies, and that he would have left the Respondent's employment at that point. The Tribunal accordingly awarded the Appellant £4,063, representing seven weeks' salary at the rate of £544.85 per week and £250 as compensation for loss of statutory rights.


The Tribunal also rejected an assertion by the Appellant that he had been misled by the Respondent in relation to his pension rights on leaving the company pension scheme.


The Appellant appealed to the EAT against the Tribunal's finding that he had been fairly selected for redundancy; and against the other adverse findings made by the Tribunal. On 18 March 2003, Mr. Commissioner Howell QC directed that the appeal should be set down for a preliminary hearing ( PH) in accordance with paragraph 9(7) of the Practice Direction (EAT – Procedure) 2002. This reads: -

The purpose of a PH is to determine whether: -

(a) the grounds in the Notice of Appeal raise a point of law which gives the appeal a reasonable prospect of success at a FH (Full Hearing) ; or

(b) for some other compelling reason the appeal should be heard e.g. that the Appellant seeks a declaration of incompatibility under the Human Rights Act 1998; or to argue that a decision binding on the EAT should be considered by a higher court.


Mr. Howell also directed that the PH be listed before a judge and two members. Thus it was that the appeal came before HH Judge Peter Clark sitting with Lord Davies of Coity CBE and Mr. S.M. Springer MBE on 21 May 2003. The Appellant was in person. In accordance with the PH procedure, the Respondent was not represented. The EAT dismissed the appeal. In doing so, it addressed each of the grounds raised by the Appellant in his Notice of Appeal, and came to the conclusion that none of them fulfilled the criteria identified in paragraph 9(7) of the Practice Direction.


The fact that the appeal was dismissed by the EAT at a PH is relevant to an ancillary issue relating to the hearing of the appeal in this court, with which we deal in a footnote to this judgment:—see paragraphs 70 to 84 below.

The appellant's case before the Tribunal


The Appellant is an accountant. He was employed by the Respondent between 8 May 2000 and 8 February 2002. In 2000, the Respondent was a newly established fixed line Telecoms Company based in Reading. The appellant was employed as a corporate finance manager (CFM) . When he joined the Respondent (via a TUPE transfer) he was 28.


In the statement attached to the Form IT1 which the Appellant issued in the Reading Employment Tribunal on 7 May 2002, he describes his employment as a CFM with the Respondent as embracing a range of activities as follows:

….. to look at mergers and acquisitions, financing requirements for the business, investment opportunities, undertake analysis of our major competitors, undertake due diligence, providing the sales team with financial assistance, develop the companies business plan and support the parent companies head office functions e.g. tax, insurance, treasury.


In the same statement, the Appellant describes the Respondent's corporate finance department as separate from the more mainstream finance departments responsible for financial control, budgeting and the preparation of the management and statutory accounts.


The Appellant's case is that on 25 January 2002 he was told by the Respondent's head of corporate finance (Mr. Walker) that if he wished to remain with the Respondent he would have to change roles and move into the Respondent's Financial Control Department (FCD) because the Respondent wished to transfer one Ian Perry from the FCD into the Appellant's role. Later the same day, the Appellant says he met Mr. Perry and discussed the matter with him. On 28 January 2002 the Appellant says he protested to Sharon Evans, the financial controller, that he had been threatened with redundancy if he did not take the job in the FCD. He says she was unwilling to discuss the matter. He explained to her, he says, why the job in the FCD was unsuitable for him. Later the same day the Appellant says he told Mr. Walker that he had no alternative but to turn the job down, as his background and experience would make it impossible for him to undertake the work required. He says he was then told that there was no longer a role for him in corporate finance, and that Mr. Perry was taking his job. Between 28 January and 8 February 2002 he visited the office twice to clear his desk. He asked to be re-instated and for an apology. Neither was forthcoming and on 8 February he was formally made redundant.


In his form IT1 the Appellant argued that he was unfairly dismissed because his role in the company was not in fact redundant. His case was that he had been forced out because the Respondent wished to transfer Mr. Perry into his role. The alternative role he had been offered in the company was wholly unsuitable, and a demotion in terms of both quality of work and career development. In the alternative, the Appellant argued that if his role was redundant, the manner of his dismissal was both substantially and procedurally unfair.

The Respondent's response


In its form IT3, the Respondent argued that the downturn in the telecommunications industry in the latter part of 2001 required it to make substantial cuts in its workforce. The Appellant had been one of three CFMs: by late January 2002 the Appellant was the only one left. Of the other two, one had joined another department and the other had taken up employment in another company in the group of which the Respondent formed a part. The Respondent took the decision not to replace the other two CFMs and to make the Appellant redundant. The three managers would be replaced by one senior CFM, Mr. Perry, who transferred from the FCD. The Respondent offered the Appellant a position in FCD, but he declined it. No other employment was available and he was made redundant. His dismissal was therefore for redundancy.


Before the Tribunal, however, the Respondent conceded that the Appellant's dismissal was procedurally unfair in that it had failed to allow adequate time for consultation before making the Appellant redundant. It suggested that a further period of seven weeks would have been appropriate, but argued that the outcome at the end of that period would have been the same. The Appellant would not have found an alternative post within the Respondent or its associated companies, and the Appellant's compensation, accordingly, apart from the basic award, should be limited to the seven weeks pay proposed.

The issues before the Tribunal


The first two issues for the Tribunal to decide were, accordingly: (1) was this a genuine redundancy? (2) If it was, but if, as the Respondent accepted, it had not been fairly implemented, was the Appellant's compensation to be limited to the seven weeks pay proposed by the Respondent?


The third issue (loss of pension rights) did not emerge from the Forms IT1 or 3. However, in the list of issues prepared for the Tribunal by the Appellant (who also appeared in person before the Tribunal) item 6 stated: -

The Tribunal are asked to consider whether 186K misled Mr. Lambe in providing advice to him regarding the pension implications of the events, which occurred in February 2002.


The pension dispute arises in the following way. The Respondent operated a pension scheme, which the Appellant joined. The scheme provided that if an employee left the Respondent's employment before completing two years service, his only entitlement under the scheme was the repayment of his contributions to the scheme made during the period of his...

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