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Appeal No.	 EAT/889/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 9 November 2000
Judgment delivered on 24 January 2001

Before
SIR CHRISTOPHER BELLAMY QC
MR K EDMONDSON JP
MR J C SHRIGLEY

MR M SOUL	APPELLANT

ADWEL INTERNATIONAL LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant

MRS L SOUL
(Representative)

For the Respondents

MR NIRAN DE SILVA
(of Counsel)
Instructed By:
Mr A Toplin
Messrs Pickworths Solicitors
DX 51504
Watford 2

SIR CHRISTOPHER BELLAMY QC:
1.	This is an appeal by Mr Martin Soul, and a cross appeal by his former employer, Adwel International Limited, against the decision of the employment tribunal sitting at London North on 19 April 1999.  By that decision the tribunal decided (1) that Mr Soul was not dismissed for asserting a statutory right; and (2) that Adwel International Limited, (‘the respondent’), was in breach of contract in dismissing him, the breaches being the respondent’s failure to give notice and its failure to operate its disciplinary procedure.  As regards damages, the tribunal held that Mr Soul had already received pay in lieu of notice, so he had already been compensated for that breach.  As regards the failure to operate the respondent’s disciplinary procedure, the tribunal held that damages should be assessed on the basis that had the respondent completed the disciplinary procedure there was a 100% chance that Mr Soul would have been dismissed; a 100% chance that the dismissal would have been unfair procedurally; and a 100% chance that any tribunal dealing with any complaint of unfair dismissal would have found that Mr Soul had been guilty of blameworthy conduct contributing to his dismissal and that any award should accordingly be reduced by 75%.
2.	On this appeal Mr Soul raises three main points: (a) the hearing before the tribunal was procedurally unfair, principally in that the applicant was prevented from reading out parts of his statement in evidence in chief, even though the matters omitted were relevant to the issues; (b) the tribunal did not give adequate reasons in accordance with the principles of Meek v City of Birmingham District Council [1987] IRLR 250, notably as regards the finding that the applicant’s damages should be reduced by 75% on account of his blameworthy conduct; and (c) in deciding that the applicant was not dismissed for asserting a statutory right, the tribunal did not clearly identify the statutory right in question, nor give adequate reasons for its finding.  As regards the cross appeal, the respondent contends that the tribunal erred in law in finding that there was an implied term of the contract that entitled the applicant to the benefit of the respondent’s disciplinary procedure.
The facts
3.	The factual context, very briefly, is that Mr Soul started working for the respondent on 3 February 1997 as, in effect, Sales Manager.  The respondent is Canadian owned and supplies electronic test equipment.  The most senior management were based in Canada and the United Kingdom manager was Mr Derek Paley.  The United Kingdom office was small, about four persons, and was responsible for sales in the United Kingdom and Western Europe.
4.	As the tribunal found (paragraph 6) “Mr Soul and Mr Paley did not get on”.  On 21 February 1998 Mr Soul wrote a letter, stated to be in confidence, to Mr Green, the President of the respondent, in Canada.  In that letter, which is not quoted by the tribunal, but has been shown to us, Mr Soul complained to Mr Green in strong terms both of his own treatment by Mr Paley regarding his remuneration and other matters, and of what Mr Soul saw as Mr Paley’s serious shortcomings.
5.	It appears, also from paragraph 6 of the tribunal’s decision, that Mr Green did not do anything about the letter of 21 February 1998, save that he decided that Mr Soul should no longer report to Mr Paley, but to Mr Maybury, the Sales Director based in Canada.  After some delay that change was formally notified by Mr Paley to Mr Soul on 10 August 1998.  That, however, did not work out either and on 16 October 1998 Mr Green informed Mr Paley of his decision that the applicant should revert to reporting to Mr Paley.  Mr Soul was apparently informed by Mr Green at the same time.
6.	On 14 November 1998 Mr Soul wrote to the Chairman of the respondent, Mr McDonald, sending him the sales results of the United Kingdom operation for 1997/98, which showed a 40% increase in sales revenue, and forecasts showing a further increase for 1998/99.
7.	The tribunal found, at paragraph 7, “Between 16 October and 25 November [1998] Mr Paley became aware that Mr Soul had written to the Chairman of the company, Mr McDonald, in effect complaining about Mr Paley and making trouble for him.  This is referred to by Mr Paley in the warning letter as being ‘unsettling’.”
8.	However, in the course of these appeal proceedings no letter written by Mr Soul to the Chairman of the company, Mr McDonald, between 16 October and 25 November 1998 has been identified to us, other than the letter of 14 November 1998 to which we have just referred.  That letter contains no mention of Mr Paley nor any complaint about him.
9.	On 25 November 1998 Mr Paley wrote to Mr Soul on behalf of the company in the following terms:
“Careful consideration has been given by the company to the problems arising in the performance of your duties and to your discussions and correspondence with managers on this matter.
You initially wrote to inform the President of the company that you could not work under the current UK management structure which you also wished to change.  You were later verbally warned by him that it was necessary for you to carry out the duties of your post by reporting through the line managers and also to raise any issues in the first instance through them.
An attempt was nevertheless made to investigate whether an alternative arrangement could be found whereby your sales duties could be more directly supervised by the company Director of Sales & Marketing John Maybury, your working and reporting arrangements to be established in consultation with him.  Your further correspondence and discussions indicated that this did not produce a solution to working relationships and it was decided by the company to revert to the arrangement whereby you would report to the manager of the UK Operations.  This was conveyed to you in Canada by the President, although you advised that this would not be acceptable.
Your attitude has prevented your sales role being carried out in the manner that the company expected.  In a small company of our size it is necessary that you seek to be and work as part of the existing team, whereas your conduct has sought to undermine your managers, has been considered in some instances to be insubordinate, and is unsettling to other staff.  In order to convey the seriousness with which this is viewed by the company it is necessary that it be confirmed in writing.
You are therefore given this written warning that your conduct is unacceptable and must not continue.  Unless you agree to report to and be supervised by your designated manager, including carrying our your duties following reasonable procedures laid down by the manager, and unless you also act accordingly thereafter and raise any grievances via normal reporting channels, there will be no alternative to the termination of your employment.  As this is a significant matter for the well-being of the company no further warning will be issued.
If you require further information on matters above which relate more directly to the President, or you wish to appeal to him against this disciplinary warning, you should do so by initially advising me and I shall pass on your request to him.”

The tribunal found that Mr Paley had consulted Mr Green before sending that letter.
10.	In acknowledging receipt of that letter Mr Soul stated “I do not agree with its contents and request formal grievance procedures to be implemented”.  After seeking legal advice, Mr Soul replied at length on 29 November 1998 in these terms:
“...
I was therefore completely shocked to have been presented out of the blue with your letter of the 25^th November threatening me with dismissal.  The allegations contained within this letter and the implications for my career are of such a very serious nature, that I have been forced to seek specialist advice regarding these allegations and UK employment legislation.
I completely refute your allegations and insinuations.
Over the nearly 2 years I have been with company, I have been employed in a position of trust and responsibility and left to work autonomously.  I have done this although I have been given almost no assistance from you or from the Sales & Marketing Director of the company, despite many requests from me for information.  In Europe this year alone, I have worked a frequent 60 to 80 hour week (with no financial benefit to myself for these extended hours), visited 12 Countries, many more than once, and increased the sales intake of the UK Office by 40%.  I have enjoyed an excellent working relationship with the administration and engineering departments of the company, both here and in Canada, as well as with customers and overseas agents.  I have always acted in and represented Adwel in an exemplary manner and could not be a more professional, loyal or hard working employee.
Last February 21^st, and after a whole year of employment with Adwel, I wrote a letter of complaint in confidence to Vince Green, the President of the Company, to be discussed by us.  This was made because you would not address the responsibilities of your position as UK Manager, much of these being left to me, eg instructing me to undertake final interviews for the position of UK Office Administrator and to select and appoint one.  You also would not discuss with me important and relevant issues regarding my work, which made it impossible for me reporting to you.
This letter was obviously a legitimate grievance I registered, but no grievance procedure was put in place and no attempt was made to seek corroboration on the matters I raised.  There was however a verbal acceptance by Vince Green, which has been repeated since, that there had been previous complaints about you and my reporting line was thereafter changed to John Maybury, the Sales and Marketing Director.  This worked well until John Maybury visited the UK in July and whilst here tried to undermine my efforts and could not when pressed in writing, substantiate this in any way.  Correspondence regarding this matter is fully documented and clearly indicates unjustifiable intimidation by Mr Maybury at a time when my work rate could not have been higher and when UK sales revenues were increasing considerably.
Contrary to what you allege about reporting channels, I was at the time encouraged by Vince Green to discuss any concerns I might have over John Maybury’s attitude towards me with Mr H J McDonald the Chairman of the Company.  I told Vince Green that I would not do this.  He was the President of the Company and Mr Maybury’s immediate superior and was therefore the proper channel I should go through.
...
Your letter must be viewed as a deliberate attempt to intimidate me out of a job that I do well and enjoy, by baseless and vindictive allegations about the manner in which I carry out my duties.  As you know, I have requested that you implement a grievance procedure regarding your allegations and that this should be carried out without delay.  As none of the UK staff have ever been supplied with a Contract of Employment, which would normally contain procedures regarding Grievances and Misconduct, I would request that you supply these to me within the next 2 days, so I am informed of what is involved.
Your letter is improper, deliberately misleading, inaccurate and unsubstantiated”

Mr Soul’s letter then concluded by requesting detailed particulars of the misconduct alleged, and of the earlier alleged verbal warning, and intimated that Mr Soul would have no option but to commence proceedings if that information was not supplied by 4 December 1998.
11.	On 2 December 1998 Mr Paley, having discussed the matter with Mr Green and the company’s lawyers, called Mr Soul and Mr Bertenshaw (the new United Kingdom manager) into his office and dismissed Mr Soul.
12.	On 3 December 1998 the respondent wrote to Mr Soul in the following terms:
“As promised this letter is formal confirmation of our meeting on 2^nd December.  At the meeting I reminded you that you were verbally warned the previous week that your conduct had been unacceptable and this was confirmed by the letter dated 25 November 1998 presented to you.  Your formal grievance expressed on receipt of the letter was noted and the President of the company Vincent Green informed.
The letter to you also specified that unless you agreed to conduct yourself in future in the manner required, described in the letter, your employment would be terminated.  Your response regarding your conduct, which you expressed at the time of the above warning and since, indicated that you do not intend to give any such assurance.
You also confirmed that you continued to have no respect for my contribution to the very small UK team under my management of which you are a part.  It has become evident to the company that you were not able to form the type of relationship in the team required for efficient co-ordination of our work.
In view of the situation, and the resulting adverse and undermining effect that your actions have had on the company, it was therefore decided to terminate your employment that day.”

Mr Soul appealed to Mr Green but that appeal was dismissed on 26 January 1999.
13.	By his IT1 dated 2 February 1999 Mr Soul complained of breach of contract and unfair dismissal.  By a letter of 12 February 1999, he added a complaint that he had been dismissed for asserting a statutory right contrary to section 104(1)(b) of the Employment Rights Act 1996, identifying the right in question as the right to a minimum period of notice.  He added, in that letter, that had the respondent followed correct disciplinary procedures, he would have been employed for more than two years for the purposes of the law of unfair dismissal.
14.	The respondent in its IT3 denied breach of contract and unfair dismissal and further denied Mr Soul’s right to bring an unfair dismissal claim since he had been employed for less than two years.
The tribunal’s decision
15.	In its decision of 19 May 1999 the tribunal prefaced its findings of fact with the following comment:
“In making our findings of fact, the Tribunal found that Mr Paley was an unsatisfactory witness.  His evidence did not stack up with itself nor with some of the documents.  We preferred the evidence of Mr Soul where there was a conflict.  That position is not altered by the fact that Mr Soul did not appreciate before or at the hearing exactly what evidence was relevant to the issues and that the Tribunal was confining itself to the issues which we have identified and not investigating Mr Paley’s management skills.”

16.	Having found the facts, the essence of which we have already summarised, the tribunal found at paragraph 11:
“In view of the fact that the company saw nothing inherently unfair in Mr Green’s conducting an appeal when he had been a party to the decision to dismiss, we consider that had the company completed the disciplinary procedure there was a 100% chance that Mr Soul would have been dismissed; a 100% chance that the dismissal would have been unfair procedurally; and a 100% chance that any Tribunal dealing with any complain of unfair dismissal would have found that by his letters of 21 February 1998 and behaviour between October and November 1998 Mr Soul had been guilty of blameworthy conduct contributing to his dismissal and that any award should be reduced accordingly by 75%.”

17.	After discussing the law to be applied, the tribunal set out its conclusions at paragraph 17:
“The Tribunal has considered its findings of fact in the light of the law.  We conclude that the reason for dismissal was not that Mr Soul had asserted a statutory right to notice.  We find that the reason for dismissal was the company’s view that Mr Soul had misconducted himself by his behaviour in relation to Mr Paley, his line manager.  As to the complaint of breach of contract, we conclude that Mr Soul was entitled under his contract to receive one month’s notice and that it was an implied term of his contract that he was entitled to the benefit of the company’s disciplinary procedure.  We imply that term because we have no doubt that had anyone raised the matter at the time both contracting parties would have regarded it as obvious.  We find that the company’s failure to give notice and failure to operate its disciplinary procedure constituted breaches of contract.  As to the failure to give notice, Mr Soul is not entitled to damages because he has already received pay-in-lieu of notice that he should have been given.  So he has been compensated for that breach.  As to the failure to operate the company’s disciplinary procedure, he has not been compensated for that breach.  The hearing is therefore adjourned to 16 June 1999 for the Tribunal to assess the damages in accordance with this Decision unless before that date the parties can agree them.”

18.	The remedies hearing in fact took place on 22 July 1999, and the tribunal’s decision on remedies was sent to the parties on 27 July 1999.  The tribunal said in that decision at paragraph 5:
“Section 123(4) [of the Employment Rights Act 1996] says in effect that the common law rule as to mitigation and damage applies.  So in a case like the present we have to import that approach into our assessment of what the Tribunal would have awarded had Mr Soul brought an unfair dismissal claim and to do that in accordance with our findings at paragraph 11 of the decision of 19 April.”

19.	In its calculations, the tribunal in its decision on remedies essentially awarded to Mr Soul the sum it considered he would have received as a compensatory award in an unfair dismissal claim, on the basis that, had the disciplinary procedures been properly completed, he would have had the necessary two years service, but taking into account the reduction of 75% for blameworthy conduct found in paragraph 11 of the decision now under appeal.  As appears from the calculations on pages 5 and 6 of the remedies decision, the sum awarded to Mr Soul (including an agreed figure to represent the basic award) was £1,652.47.  Without going into details, we were told at the hearing of this appeal that, had the 75% deduction for blameworthy conduct not been made, on the tribunal’s calculations Mr Soul would have been awarded an additional £1,587.48.  Mr Soul considers that this figure could have been higher because, according to him, the whole of the remedies decision was ‘infected’ by the findings in the decision presently under appeal.  There has been no appeal against the remedies decision of 27 July 1999.
The sufficiency of the tribunal’s reasons regarding blameworthy conduct
20.	It is convenient to deal first with the sufficiency of the tribunal’s reasons in finding that Mr Soul’s damages for breach of contract should be reduced because his blameworthy conduct contributed as to 75% to his own dismissal.  The test to be applied is the well-known test in Meek v City of Birmingham District Council [1987] IRLR 250, at 8 to 10, namely that:
“The parties are entitled to be told why they have won or lost.  There should be a sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises... .”

and that:

“The overriding test must always be:  is the Tribunal providing both parties with the materials which will enable them to know that the Tribunal has made no error of law in reaching its findings of fact?”

21.	Mr Soul, who has been represented by his wife, Mrs Soul, argues that the tribunal’s reasoning fails that test.  The respondent, who is represented by Mr Niran de Silva, argues that it passes that test, referring in particular to Martins v MBS Fastenings [1998] IRLR 326 where it was held that it is not necessary for tribunals to give such an account of their conclusions of fact as would be appropriate if there were a right of appeal on fact, nor is it necessary for them to record all the evidence. 
22.	The tribunal’s reasoning as regards Mr Soul’s blameworthy conduct is to be found in a single phrase in paragraph 11 of its decision (see paragraph 16 above), where the tribunal found that “by his letters of 21 February 1998 and behaviour between October and November 1998 Mr Soul had been guilty of blameworthy conduct contributing to his dismissal and that any award should be reduced accordingly by 75%”.  The letter of 21 February 1998 is referred to in paragraph 6 of the decision, and the events of October and November 1998 in paragraph 6, last sentence, and paragraphs 7 to 9 of the decision.  It is also to be noted that the tribunal found in paragraph 3 that it preferred the evidence of Mr Soul to that of Mr Paley wherever there was a conflict.
23.	As regards the letter of 21 February 1998, Mr Soul contended before the tribunal that that letter constituted an entirely legitimate raising of a grievance, in view of what he saw as Mr Paley’s intolerable attitude, and that the respondent had explicitly or implicitly accepted that there was force in his complaint.
24.	It is common ground that the letter of 21 February 1998 was written nine months before the dismissal which took place on 30 November 1998.  There is nothing in the tribunal’s decision to suggest that the respondent treated the writing of that letter by Mr Soul as a disciplinary matter at the time, and it appears from paragraph 6 of the decision that the respondent sought to address the matters raised by Mr Soul in that letter by deciding that he should report to Mr Maybury rather than Mr Paley, albeit that that particular decision was later reversed.
25.	In those circumstances, in our view the single unexplained reference to the letter of 21 February 1998, does not constitute a sufficient explanation, in the tribunal’s reasons, as why that letter was regarded by the tribunal as blameworthy conduct, and what the tribunal considered the causal connection to be between that letter and Mr Soul’s dismissal nine months later.  Moreover, the tribunal does not give any reason for rejecting Mr Soul’s contention that that letter was justified, and that the company had at least partly accepted it. 
26.	The tribunal also refers, in paragraph 11, to Mr Soul’s “behaviour between October and November 1998”, but the tribunal does not state to what behaviour it is referring, why that conduct was blameworthy, and the connection between that conduct and Mr Soul’s dismissal.
27.	If and to the extent that the tribunal is implicitly referring to the fact, stated in paragraph 7 of the decision, that “Between 16 October and 25 November Mr Paley became aware that Mr Soul had written to the Chairman of the Company, Mr McDonald, in effect complaining about Mr Paley and making trouble for him”, we have already stated that the only letter in the material before us written by Mr Soul to Mr McDonald during that period is the letter of 14 November 1998 (paragraphs 6 to 8 above).  That letter simply reports an increase of United Kingdom sales and does not complain about, or even refer to, Mr Paley.  It is hard to see, therefore, on what basis this letter could be construed as complaining about or “making trouble” for Mr Paley, or as being “unsettling” to Mr Paley.
28.	In the absence of any further explanation, we do not see on what basis the letter of 14 November 1998 could constitute support for the tribunal’s finding as regards Mr Soul’s blameworthy conduct, nor is it clear on what basis the tribunal made its finding of fact regarding the content of that letter at paragraph 7.
29.	It is true that the warning letter of 26 November 1998 does raise a number of allegations about Mr Soul’s conduct, which were essentially that (i) his attitude had prevented his sales role being carried out as expected; (ii) he had failed to work as part of the team; (iii) his conduct had sought to undermine his managers, and had been in some instances insubordinate and unsettling; and (iv) despite a verbal warning, he had failed to follow normal reporting channels and grievance procedures.  However, as is apparent both from his letter of 29 November 1998 (paragraph 10 above), and from his statement in evidence to the tribunal, which has been produced to us, Mr Soul strongly contested those allegations.  His case was, in effect, that (i) he had been a highly successful Sales Manager, increasing sales by over 40% and working long hours with little support from the company; (ii) his complaint to Mr Green in his letter of 21 February 1998 about the difficulty of working with Mr Paley was a legitimate grievance; (iii) Mr Paley was an unstable and inefficient person whose behaviour was intolerable; and (iv) the allegations made in the warning letter were wholly without foundation and constituted a deliberate and vindictive attempt “to intimidate me out of a job that I do well”.
30.	However, there is no finding by the tribunal as to whether or not it accepted the allegations made in the warning letter of 26 November 1998, which were denied by Mr Soul, nor whether the conduct mentioned in that letter constituted, in the tribunal’s view, the blameworthy conduct in October and November 1998 to which the tribunal was referring in paragraph 11, nor whether the tribunal accepted or rejected Mr Soul’s case as to the difficulties, as he saw them, of working with Mr Paley.
31.	The same comment applies to the last matters of conduct in the relevant period, mentioned elsewhere in the decision but not referred to in paragraph 11, namely that there was a “bad tempered scene” between Mr Paley and Mr Soul when the warning letter was handed over on 26 November 1998, and that Mr Soul’s letter of 29 November 1998 was “bad tempered and intemperate” (see paragraphs 7 and 8 of the decision).  Those are findings of fact by the tribunal, and it is certainly true that the letter of 29 November is couched in intemperate terms.  However, the tribunal does not state in paragraph 11 whether those facts constituted the blameworthy conduct it had in mind, nor whether to what extent it accepted or it rejected Mr Soul’s case that, however bad tempered or intemperate his reaction may have been, the respondent was behaving oppressively and unfairly towards him.
32.	We entirely accept that the employee’s duty of co-operation normally involves the loyal acceptance of the employer’s instructions.  However, in a case such as the present, where (a) the issue is whether the employee is guilty of blameworthy conduct, (b) the employee alleges that it was the employer who had behaved intolerably, or in a way that the employee could not be expected to put up with, and (c) the tribunal considers nonetheless that the employee was primarily to blame, it is in our judgment necessary for the tribunal to explain, at least succinctly, why it has rejected the employee’s contentions.  While of course the tribunal has a wide margin of discretion in deciding questions of blameworthy conduct, with which an appellate tribunal cannot interfere save in exceptional circumstances, in the present case the tribunal has not, in our judgment, adequately explained what facts and matters it took into account in arriving at the conclusion that it was Mr Soul who was, at the end of the day, substantially to blame for his own dismissal, despite the tribunal’s finding, to which we have already referred, that it preferred Mr Soul’s evidence to that of Mr Paley.  As it was put to us in argument, Mr Soul’s case “just isn’t there”.
33.	In these circumstances we find that the tribunal erred in law in not giving adequate reasons for its finding in paragraph 11 to the effect that Mr Soul’s award of damages should be reduced by 75% by reason of his blameworthy conduct, contrary to the principles of Meek.  Needless to say, we make no finding either way as regards the merits:  our finding is limited to the sufficiency in law of the tribunal’s reasons.
The procedural issue
34.	Our observations above regarding the tribunal’s approach to the issue of how far Mr Soul’s conduct was blameworthy, are not without relevance to his complaint that, at the hearing, the Chairman stopped him from reading large parts of his statement that were relevant to that issue.  Mr Soul argues that, as a result, the hearing was procedurally unfair.  The respondent submits that the course taken by the Chairman was reasonable in the circumstances and not unfair.
35.	As appears from Mr Soul’s affidavit of 27 July 1999 and the Chairman’s comments of 5 November 1999, it appears to be common ground that, at the hearing, the Chairman asked Mr Soul to go straight to that part of his statement which dealt with the summary dismissal, thus leaving out a substantial part of Mr Soul’s evidence about the difficulties he had encountered with Mr Paley in the period between February 1997, when he joined the company, and the autumn of 1998, when he was dismissed.  Mr Soul was then cross-examined about events during that earlier period, such as his letter of 21 February 1998, about which Mr Soul, on the Chairman’s direction, had not been able to lead his evidence-in-chief.  Apparently, in the course of this cross-examination, the Chairman did ask Mr Soul to go back and read out parts of his statement which had earlier been omitted, but Mr Soul contends that the procedure followed led to him being thrown on the defensive and unable to present his case in the way he would have wished.
36.	The Chairman in her comments states that the reason the tribunal did not want to hear Mr Soul read out the whole of his witness statement was “that large parts of it related to his early years of employment and were not relevant to the issues which had been defined and which had been agreed with both sides before any evidence was taken and which are stated in the Decision.”
37.	The issues to which the Chairman refers are stated, in paragraph 2 of the decision, as being: 
“(1)		Unfair Dismissal.  Whether the reason for dismissal was Mr Soul’s assertion of a statutory right to notice and was therefore automatically unfair;
(2)	Breach of Contract.  Whether the company breached Mr Soul’s contract of employment by dismissing him without notice.  In the course of the hearing, a further issue emerged which was whether Mr Soul was entitled under his contract of employment to the company’s disciplinary procedure and, if he was, whether the company breached the contract of employment by not applying that disciplinary procedure and, if it did, what is the measure of damages.”

38.	Unfortunately, within the issue stated to have “emerged during the course of the hearing” regarding the company’s contractual failure to operate its disciplinary procedure and the consequent measure of damages, there is a further issue which in fact turned out to be a central issue, namely the question whether Mr Soul’s damages for breach of contract should be reduced by reason of his own blameworthy conduct.
39.	It appears to be the case that Mr Soul did not read out in evidence in chief parts of his statement which were relevant to that issue.  The copy of the statement of 12 pages produced, without objection, before us devotes only a few lines to Mr Soul’s previous employment and then outlines the difficulties he says he faced, since joining the company, in dealing with Mr Paley.  At page 4 of his statement he explains the letter of 21 February 1998, and the events which took place between then and 26 November 1998 are covered at pages 4 to 7, the remainder of the statement being largely devoted to the dismissal itself.  The matters in the early part of the statement were thus directly relevant to the question of whether Mr Soul was guilty of blameworthy conduct, either as regards the letter of 21 February 1998, or as regards the events of October and November 1998.
40.	We have every sympathy with the tribunal’s legitimate desire to cut out irrelevant material and we accept that this was not a particularly easy case to manage from the tribunal’s point of view.  Unfortunately while it is true, up to a point, that the tribunal was “not investigating Mr Paley’s management skills”, as the tribunal says at paragraph 3, it does seem to us that in investigating the issue of whether Mr Soul was guilty of blameworthy conduct the tribunal necessarily had to form some view about whether, if Mr Soul’s conduct was open to criticism, that conduct was, as Mr Soul argued, provoked by unreasonable behaviour on the part of Mr Paley.  It was essentially to that issue that certain parts of Mr Soul’s statement that were not, apparently, read out, were directed.
41.	In these circumstances we find that the procedure followed regarding the presentation of Mr Soul’s evidence did not turn out to be wholly satisfactory and has given rise to a perception of unfairness in the eyes of Mr Soul.  While this matter, standing above, would not necessarily be a sufficient basis on which to allow this appeal, it does in our view reinforce the findings we have already made with regard to the absence of sufficient reasoning on the issue of Mr Soul’s blameworthy conduct.  The fact that the tribunal, no doubt with the best of intentions, initially conveyed the impression that Mr Soul’s evidence in chief regarding matters prior to his dismissal was not relevant, in our view made it even more important that the tribunal’s subsequent criticism of Mr Soul’s conduct prior to his dismissal – implicit in the finding that he was 75% to blame – should be fully and clearly reasoned.
Dismissal for asserting a statutory right
42.	Mr Soul contends that the tribunal failed adequately to address the question whether or not he had been dismissed for asserting a relevant statutory right in his letter of 29 November 1998, and thus unfairly dismissed by virtue of section 104(1)(b) of the Employment Rights Act 1996 (“the ERA”).  He points out, in particular, that the tribunal in its decision failed to identify correctly the right concerned, referring in paragraph 2(1) to his “statutory right to notice”, in paragraph 12 to his “statutory right not to be unfairly dismissed”, and finally in paragraph 17 his “statutory right to notice”.  He contends that his case was that primarily that he had been dismissed for asserting his statutory right not to be unfairly dismissed, which would be a right arising by virtue of section 104(4)(a) of the ERA, and not just for asserting his right to a minimum period of notice under sections 86 and 104(4)(b) of the ERA.  By not clearly identifying the right with which it was dealing, the tribunal disabled itself from approaching this issue correctly.  The respondent contends that the tribunal did consider all Mr Soul’s assertions in relation to his dismissal and must be taken to have rejected his contention that he was dismissed for asserting a statutory right, whether it be a right to notice, or a right not to be unfairly dismissed, by virtue of its conclusion in paragraph 17 that the reason why Mr Soul was dismissed “was the company’s view that Mr Soul had misconducted himself by his behaviour in relation to Mr Paley, his line manager”.
43.	We note that in paragraph 2(1) of its decision, the tribunal defines the issue as being whether Mr Soul was dismissed for asserting his statutory right not to be dismissed without notice.  In so defining the issue, the tribunal no doubt had in mind Mr Soul’s letter to the tribunal of 12 February 1999 where he defines the statutory right on which he relies for the purposes of section 104(1) of the ERA as “the right conferred by Section 86 of this Act, the right to a minimum period of notice”.  At paragraph 17 the tribunal rejects Mr Soul’s case on that point, finding that the reason for his dismissal was not his assertion of that right, but Mr Soul’s misconduct.  Thus far, we can detect no error of law in the tribunal’s approach.
44.	The difficulty, however, is that it appears from paragraph 12 of the decision that the tribunal considered that the case Mr Soul was advancing was in fact that he had, or had also, been dismissed for asserting a statutory right not to be unfairly dismissed, which would be a relevant statutory right by virtue of section 104(4)(a) of the ERA.  Moreover, Mr Soul’s acknowledgement of the letter of 25 November 1998 requesting a formal grievance procedure, and his letter of 29 November 1998 repeating that request and asking for particular of the matters alleged, arguably constitute the assertion of a statutory right not to be unfairly dismissed for the purposes of section 104(1), having regard also to subsections (2) and (3) of that section.  An argument along these lines is also in our view implicit, if not explicit, in Mr Soul’s letter to the tribunal of 19 February 1999 where he refers to the fact that he had been dismissed after making it clear to the company that the threat to dismiss him without warning and without following a grievance procedure was unlawful.
45.	In those circumstances, having regard to the tribunal’s own description of Mr Soul’s case in paragraph 12, in our view the tribunal ought to have dealt expressly, in its conclusions, with Mr Soul’s argument, or alternative argument, that he had been dismissed not merely for asserting his statutory right to a minimum period of notice but also for asserting a statutory right not to be unfairly dismissed.  The tribunal does not expressly deal with that latter argument but only with Mr Soul’s assertion of his statutory right to notice.
46.	However, in order to succeed under section 104(1) of the ERA Mr Soul would have had to demonstrate. in any event, that his assertion of a statutory right not to be unfairly dismissed was either “the reason for his dismissal or, if more than one, the principal reason” (our emphasis).  At paragraph 17 the tribunal finds as a fact that “the reason for dismissal was the company’s view that Mr Soul had misconducted himself by his behaviour in relation to Mr Paley, his line manager”.  In the light of the respondent’s letters of 25 November 1998 and 3 December 1998, that finding cannot be attacked as perverse.  In those circumstances, it seems to us that, even if the tribunal had dealt with the matter explicitly, Mr Soul would have been unable to demonstrate that the, or the principal, reason for his dismissal was the assertion of his statutory right not to be unfairly dismissed.  The tribunal’s finding that the reason for dismissal was Mr Soul’s conduct effectively excludes the possibility that the, or the principal, reason was the assertion of a statutory right, whether the right in question is the right to a minimum period of notice or the right not to be unfairly dismissed.
47.	In the result, unsatisfactory though the position is, we do not consider that the lacuna in the tribunal’s reasoning regarding Mr Soul’s contention that he was dismissed for asserting a statutory right not to be unfairly dismissed, is sufficient in itself to allow the appeal, since that argument is implicitly but necessarily rejected by the tribunal’s finding in paragraph 17 that the reason for the dismissal was Mr Soul’s misconduct.
The cross appeal
48.	The respondent argues that the tribunal was wrong to find, at paragraphs 15 and 17, that it was an implied term of Mr Soul’s contract that he was entitled to the benefit of the company’s disciplinary procedure.  The respondent emphasises that Mr Soul’s letter of engagement makes no mention of disciplinary procedures.  The fact that the relevant procedure is set out in a handbook rather than in a contractual document indicates the company’s view that the procedure constitutes ‘guidance’ rather than a contractual obligation breach of which sounds in damages.
49.	The tribunal makes the following findings of fact at paragraphs 5 and 6:
“...
Mr Soul’s letter of appointment is at page 16 of R1.  There is nothing in the letter and at the time Mr Soul was taken on nothing was said about what notice of termination should be given or about general terms and conditions of service or about disciplinary and grievance procedures.  So there were no express terms about those matters.  However, Mr Soul was paid monthly and it appears that both sides assumed that the notice period was one month either way.  That is in accordance with page 44 of A1 which shows that under the general terms and conditions of service of Adwel International Ltd the notice period was one month either way.  Those terms were contained in documents in the office available to Mr Soul.  We note page 43 of R1, a notice on the front on the terms and conditions of service.  That said:
“Following the transfer of Adwel Industries business and employees to FES International and the subsequent change of name to Adwel International, the existing standard procedures and terms of employment of Adwel Industries will continue to apply, subject to changes in company’s name and related references where appropriate until such time that the procedures are updated.”

There is no update of which the Tribunal is aware.  Paragraph 8 deals with disciplinary procedure.  It says:
“Disciplinary Rules and Procedure.  The disciplinary rules and procedure applicable to your employment with the company are set out in the company’s rules and disciplinary procedures.  If you are dissatisfied with any disciplinary decision, you can raise this first with your supervisor.  Details of the manner in which an appeal should be raised and the steps consequent upon such an application are set out in the company’s disciplinary procedures.”
An extract from the Handbook is at page 47 and following of R1.  That set out the disciplinary procedure.  We note its provisions.  “Gross misconduct” is specified as being a non-exhaustive list.  Paragraph 3 provides:

“In the event of an employee being involved in an offence of this nature, a full investigation of the circumstances will be carried out without delay.  If appropriate, the employee may be suspended with pay during the period of this investigation.  A disciplinary hearing will then be convened.”

50.	At paragraph 15 the tribunal says this:
“It is well established law that in a contract of employment there are not only express terms but also implied terms.  It is not permissible to consider the way in which a contract has been performed as an aid to its construction but, in deciding whether to imply a term into a contract, the Tribunal is entitled to take into account various tests.  One of those is the one of the “officious by-stander”.  In effect, that means that if such a person had suggested to the contracting parties at the time the contract was being made that a particular term should be included, both would have told him “yes of course” the term should be included.  It seems to us that as a matter of industrial reality in the workplace that if there is an existence of disciplinary and grievance procedure and various other terms and conditions of service in a Handbook which is available to employees then, whether or not a particular letter of appointment rehearses that they are applicable, nevertheless, a term is to be implied that they are.  If the officious by-stander had prompted the parties at the time the contract was entered into, they would undoubted say “yes of course” unless there were particular circumstances of the individual’s contract of employment that made it inappropriate that the terms which applied to everybody else should not apply to him or to her.”

51.	In the light of the tribunal’s findings of fact at paragraphs 5 and 6, it seems to us that the tribunal’s approach to the law, as set out in paragraph 15 is not open to criticism.  In our view the conclusion that there was an implied term of Mr Soul’s contract that the company would observe its own disciplinary procedures as set out in the documents to which the tribunal refers at paragraphs 5 and 6 is a conclusion that the tribunal was entitled to come to on the evidence before it.  We see no perversity in the tribunal’s findings of fact and no error in its application of the law to those facts.
Conclusion
52.	In the result the appeal is allowed for the reasons given at paragraphs 20 to 33 above, reinforced by the procedural considerations referred to at paragraphs 34 to 41 above.  The cross appeal is dismissed.
53.	Since this matter has already been the subject of a remedies hearing, we propose to convene the parties, at a date to be fixed, to a meeting for directions as regards the future progress of this case, pursuant to Rules 24 and 36 of the Employment Appeal Tribunal Rules 1993.  At that meeting we would also propose to explore the possibility of conciliation with a view to avoiding further proceedings.  The respondent’s representatives at such a meeting must include an officer of the company authorised to act on its behalf.  There will be an order to that effect.

© Copyright 2001

EAT/889/99

EAT/889/99
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