England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ JUDGE McMULLEN QC
UKEAT/0479/08/DM

		Royal Courts of Justice Strand, London, WC2A 2LL
		19/03/2010

Lord Justice Mummery :

The issue

1. This is a case of summary dismissal for gross misconduct. The question on the appeal is whether the employment tribunal (ET) erred in law by misapplying s98(4) of the Employment Right Acts 1996 (the 1996 Act) and by holding that the dismissal of the appellant was unfair.
2. Dr Sameer Sarkar was a Consultant Psychiatrist based in the London Directorate, which included a High Dependency Unit at Broadmoor Hospital. The Hospital is a high security unit specialising in Forensic Psychiatry. The Hospital is one of the sites on which the West London Mental Health NHS Trust (the Trust) operates. The Trust employed Dr Sarkar for nearly 6 years. On 6 August 2007 it summarily dismissed him for gross misconduct. His internal appeal was rejected on 21 September 2007. The ET upheld his unfair dismissal claim. On appeal by the Trust the Employment Appeal Tribunal (EAT) overturned that decision. Dr Sarkar asks this court to restore the original ET decision.
3. Section 98(4) provides that-

" …the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)-

(a) depends on whether in the circumstances…the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case."

4. The landmark judgment in Iceland Frozen Foods Limited v. Jones [1983] ICR 17 (Browne-Wilkinson J) and later authorities binding on this court and on the tribunals identify the question for the ET in this way: was it within the range of reasonable responses for this employer to have dismissed this employee? The ET must answer the question without substituting themselves for the employer. Substitution happens when the members of the ET decide what they would have done if they had been the employer. That is an error of law. It ignores the fundamental fact that the ET are not the employer and that their function under the 1996 Act is to judge the fairness of the actions of the employer objectively. They must do that by applying to the circumstances of the particular case the test of the reasonable response of the hypothetical reasonable employer: Foley v. Post Office [2000] ICR 1283 at 1293.
5. Different aspects of the Trust's disciplinary procedures are central to this case. An unusual aspect of them has sparked a sharp difference of view in the tribunals on the proper application of the range of reasonable responses to the facts found by the ET.
6. Following an investigation into complaints about Dr Sarkar's treatment of colleagues and staff, but before the disciplinary panel's decision to dismiss him, the Trust, with his agreement, embarked on an internal procedure "The Fair Blame Policy" (FBP). As part of the Trust's disciplinary policy, FBP was a procedure for dealing with matters "which might otherwise have been dealt with under the formal Disciplinary Policy." It was designed for the case of "fairly low level breaches of conduct or performance standards" which "do not constitute potentially serious or gross offences." It had been recently introduced for situations in which a member of staff accepted that he or she had done wrong, but the conduct was only serious enough to warrant a first written warning. Under the FBP a written warning was the most severe sanction that could have been imposed by the Trust on Dr Sarkar. The sanction of summary dismissal for gross misconduct was not available under the FBP. A clause in the FBP provided that the matter could be dealt with fully under the formal disciplinary provisions, if it became apparent at any stage that the alleged misconduct was more serious than originally envisaged. Although FBP did not strictly apply to a person in the type of clinical post held by Dr Sarkar, it was agreed between the Trust and Dr Sarkar's representative from the British Medical Association that the FBP should be applied to his case.
7. In the ET and the EAT the Trust's main contention was that the circumstances in which the FBP was used in Dr Sarkar's case, but then followed by the formal disciplinary panel and dismissal, were irrelevant to the issue of reasonable responses. Both the ET and the EAT rejected that contention, though the outcomes differed. The Trust did not pursue that contention on this appeal.

The proceedings

8. The hearing in the ET lasted 6 days with a gap of 3 months in mid-hearing. In their careful judgment, which they sent to the parties on 20 August 2008, the ET found that the Trust unfairly dismissed Dr Sarkar, but they reduced the compensation payable to him by 25% to reflect the degree to which he caused or contributed to his own dismissal. Dr Sarkar does not contest the finding of contributory fault.
9. The ET found that Dr Sarkar was dismissed for a conduct reason. They also found that the Trust genuinely believed on reasonable grounds that Dr Sarkar was guilty of the misconduct as charged; that there had been a reasonable investigation; and that the procedure followed was fair and reasonable. Dr Sarkar does not challenge any of those findings, all of which are favourable to the Trust. The dispute is about the correctness in law of the ET's conclusion that the dismissal was unfair because it broke the bounds of reasonable responses.
10. In allowing the Trust's appeal in a judgment handed down on 27 March 2009, the EAT substituted a finding that Dr Sarkar was not unfairly dismissed and dismissed his claim. The EAT held that the ET had erred in law (a) by failing to take relevant matters into account on the core question whether, in all the circumstances, the decision to dismiss fell within the range of reasonable responses; and (b) by substituting their view of Dr Sarkar's conduct for that of the Trust's management. The EAT rejected the suggestion that in those circumstances the appropriate course was to remit the matter to the same or to a different ET rather than deciding the merits of the case on appeal.
11. I granted permission to appeal on 10 June 2009.

The Facts

12. Between September 2006 and January 2007 Dr Sarkar was involved in a number of incidents that provoked allegations by staff and colleagues of bullying and harassment. There were no complaints from patients. There were strained relations between Dr Sarkar and a nurse on his ward, the lead psychologist in charge of a restructuring exercise, a colleague with whom he had had an affair and an occupational therapist colleague. They said that his treatment of them made them feel vulnerable and intimidated.
13. Between January and April 2007 the Trust investigated the allegations under its "Bullying and Harassment" policy. A report of 25 April 2007 concluded that his actions warranted the instigation of the disciplinary process, but added that "it must be considered whether the disciplinary process will resolve the current issues" having regard to the deterioration in relationships. Although the Trust could have instigated formal disciplinary action with a view to possible dismissal for misconduct, it entered into discussions with Dr Sarkar with a view to resolving the matter through the FBP. The adoption of this course was agreed.
14. On the basis of the investigation report discussions under the FBP took place on 4, 11 and 17 May 2007. They covered Dr Sarkar's return to work in a different Directorate, staffed by a different team. However, the FBP procedure, in which agreement had been reached, broke down when, at the end of the meeting on 17 May, Dr Sarkar was informed for the first time by the Trust's Medical Director (Dr Elizabeth Fellow-Smith) that she would have to send a report about him and his behaviour to the General Medical Council (GMC). Dr Sarkar, who sat on the GMC's Fitness to Practise Panel, made it clear that he was not willing to accept any such proposal, which would have a potentially devastating effect upon his career.
15. On 30 May 2007 Dr Sarkar was suspended pending the outcome of the formal disciplinary process. The allegations made against him in that process were based not only on the report of 25 April. They included additional allegations relating to 3 incidents: a car park incident on 30 March 2007 when Dr Sarkar parked his car in an incorrect place in the Broadmoor car park; an inappropriate email sent by Dr Sarkar to a colleague, Dr Bhattacharjee; and an allegedly abusive phone call made by him to a Service Director, Mr Mark Ashby. The two latter incidents occurred on 24 May 2007.
16. On 30 and 31 July 2007 the hearing before the disciplinary panel took place. The panel found the allegations proved. It made findings of gross misconduct in the form of repetitive minor or serious offences on 21 September 2006 (Ward Clinical Team Management meeting); 20 December 2006 (Directorate Clinical Improvement Group meeting); 30 March 2007 (car parking incident) and end of May 2007 (telephone conversation with Mr Mark Ashby). It also made findings of bullying and/or harassment of Dr Anna Manners (a psychologist with whom Dr Sarkar had had an extra-marital affair that ended acrimoniously) which continued during the investigation and the disciplinary process; of Ms Fiona Clark (lead psychologist overseeing re-structuring exercise); of Mr Ian Hodson (a nurse on his ward); and of Dr N Psyzora, a colleague in the High Dependency Unit. The bullying and harassment allegations had formed part of the FBP discussions, but the additional incidents had not.

ET decision

17. The ET correctly directed itself on the law regarding dismissal for gross misconduct and concluded that the decision to dismiss Dr Sarkar fell outside the range of reasonable responses (paragraphs 3.5 and 3.9) In applying s98(4) of the 1996 Act the ET found that the dismissal was unfair for 3 main reasons: the use of FBP till May 2007 implied that the alleged misconduct was, in the estimation of the Trust, of a "relatively minor nature" rather than gross misconduct justifying summary dismissal, a formal written warning being the most severe sanction that could have been imposed under the FBP; the additional matters subsequent to the FBP process were not found to be reprehensible or blameworthy and did not, individually or cumulatively, amount to gross misconduct; and the FBP discussions had been intentionally frustrated by the Medical Director, who attended the discussions on behalf of the Trust.
18. The Trust's criticisms of the ET judgment were directed against paragraphs 3.5 and 3.7:-

"3.5 Was the sanction of dismissal within the range of reasonable responses? We think not. We are well aware that it is not for us to substitute our judgment for that of the respondents, and that the range of reasonable responses open to them is necessarily very wide. However, it seems to us entirely clear on the evidence we heard that the main charges against the Claimant were those initially introduced in the original Terms of Reference…which were the subject of what can really only be sensibly described as protracted negotiations in May 2007. These discussions took place, we are satisfied, within the context of the "Fair Blame" Policy, as indeed the Respondents' own contemporaneous notes confirm. Whilst, strictly speaking, that Policy may not have specifically applied to medical staff such as the Claimant, the adoption of its principles must, we consider, necessarily imply that, in the Respondents' own estimation, the misconduct alleged was of a relatively minor nature. Once discussions in accordance with the "Fair Blame" Policy had been intitiated, following a specific agreement with the Claimant's BMA representative, the most severe sanction or outcome that could have resulted was a formal written warning, together with other agreed outcomes, including redeployment to another directorate, thereby sidestepping/avoiding the staff previously affected. We do not understand how or accept that, merely because the "Fair Blame" discussions were discontinued, these same offences can somehow properly come to be regarded as matters of such a grave and serious nature as to constitute gross misconduct and lead to summary dismissal. It is, we think, no answer to say that, because bullying and harassment can, at least, in principle, be characterised as gross misconduct under the Respondents' disciplinary procedure, they can rightly be so characterised in this case, since all the relevant matters and information concerning the Claimant's behaviour was fully known to the Respondents in May 2007, when the "Fair Blame" discussions were initiated. The only other additional or subsequent matters raised against the Claimant (to summarise, the parking incident; his conversation with Mark Ashby; and his email to Dr Bhattacharjee), cannot, in our judgement, either individually or cumulatively amount to gross misconduct, within the parameters of the Respondents' disciplinary procedure. Mr Kent confirmed in his evidence to us that these matters were (as indeed we find) of a relatively minor nature. Additionally, we do not in fact find that there was anything in the Claimant's email to Dr Bhattacharjee or his conversation with Mr Ashby which could, objectively, be properly described as reprehensible or blameworthy. The Claimant may well have expressed himself unwisely and perhaps robustly, but he cannot sensibly be described as behaving threateningly. In relation to the inappropriate parking, and whilst we accept the Claimant was probably rude, aggressive and unhelpful, this too is a minor incident, and should be seen in the context of a lengthy suspension, whereby the Claimant was effectively prevented from undertaking his normal professional duties for a protracted period, and the inevitable stress, worry and frustration that this would cause.

…

3.7 There is also the strong suspicion that the "FairBlame"discussions, which could only have resulted at most in a first written warning for the Claimant, were intentionally frustrated by Dr Fellow-Smith by means of the very late introduction of the (almost inevitably unacceptable) requirement for a GMC reference. On the limited evidence before us, we think it likely that those suspicions are well founded. Whilst we appreciate the difficult position in which the Respondents found themselves in the light of Mr Wishart's email of 16 May, the situation was, at least in part, of their own making, in that they had suggested and adopted the "Fair Blame"discussions; and in our judgment they could not reasonably sabotage those discussions and then proceed down the disciplinary route on alleged misconduct."

The EAT judgment

19. In the EAT there was only 1 lay member (rather than the usual 2), but nothing turns on that as the parties consented to that panel deciding the appeal. The EAT held that the ET erred in law by focussing on the initial use of a procedure (FBP) leading to a lesser penalty than dismissal and the breakdown of that procedure. The ET also erred by substituting their view for that of the Trust as to the seriousness of the incidents charged against him, in particular the incidents additional to or subsequent to the FBP, and by deciding that the matters put against Dr Sarkar did not justify dismissal.
20. In essence the EAT's decision was that the Trust was not precluded, when the FBP broke down, from raising the matters subject to the FBP within the more formal disciplinary procedure, which was still available to the Trust.

Dr Sarkar's submissions

21. In her excellent presentation of Dr Sarkar's appeal Ms Drew (who did not appear in the tribunals below) says that the ET was entitled in law to hold that the dismissal was outside the range of reasonable responses. The FBP was key to that issue. The ET (and the EAT) correctly rejected the Trust's submission that the FBP was an irrelevant circumstance. It is submitted that it was for the ET to decide what weight to attach to the circumstances of the dismissal, including the use of the FBP. Short of a perversity challenge, which has not been made, there are no legal grounds for overturning its decision.
22. The case for Dr Sarkar is essentially based on the unfairness and unreasonableness in the Trust's inconsistency of treatment of his conduct at different times. The Trust had offered FBP for the resolution of the complaints that had been investigated. That offer, which was accepted by Dr Sarkar's representative, was dependent on the Trust taking the view that the matters investigated were not such as to justify dismissal. The ET were entitled in law to take the view that it was inconsistent for the Trust then to sabotage the FBP discussions at a late stage by introducing the reporting of the matter to the GMC and then to charge him with and to dismiss him summarily for gross misconduct.

Discussion and conclusion

23. At the forefront of the Trust's case in the ET and in the EAT was the contention that the FBP and the events under it were irrelevant in assessing the reasonableness and fairness of the dismissal. That line is not now pursued: see Airbus UK Ltd v. Webb [2008] IRLR 309 on the width of what is relevant to that issue. It follows that, subject to a perversity challenge, the ET did not err in law in taking account of the FBP factor and that the weight to be attached to it was a matter for the ET.
24. Mr Sutton, who appears for the Trust, seeks to uphold the EAT's reasons for allowing its appeal and for dismissing Dr Sarkar's claim. The EAT described the FBP as "taking on a disproportionate aspect" in the ET's decision, and said that they had wrongly "focused upon FBP" and that the ET was "distracted" by it. Building on this Mr Sutton submits that the reasonable responses test has to be applied to the totality of Dr Sarkar's misconduct, as found by the disciplinary panel at the time of the dismissal. The error of the ET was in concentrating on the parties' attempt at an earlier stage of the disciplinary process to use the FBP procedure to avert the need for a formal disciplinary process. By their focus on that point the ET failed to address the essential issue: whether Dr Sarkar's misconduct found by the disciplinary panel and, taken as a whole at the time of the dismissal, was permissibly viewed as gross misconduct justifying dismissal.
25. Though it was relevant, the fact of the earlier decision to use the FBP procedure did not fetter the Trust in its disciplinary options, or prevent the Trust from relying on the earlier incidents as part of Dr Sarkar's overall course of conduct, or restrict the range of reasonable responses to that conduct. In the context of a disciplinary process the Trust was entitled to revise its approach to the misconduct following a detailed assessment of the evidence of the continuing course of his conduct and its impact.
26. I am unable to accept Mr Sutton's submission that the ET erred in law on the reasonable responses point. The misconduct found by the disciplinary panel consisted of matters that were covered by the initial investigation and those matters were the basis of the FBP discussions. The ET were entitled to regard the agreed use of FBP as an indication of the Trust's view that the misconduct alleged against Dr Sarkar was relatively minor and that it was prepared to deal with it under a procedure that could not result in his dismissal. In my judgment, the ET did not err in law in concluding that it was inconsistent of the Trust then to charge Dr Sarkar with, and find gross misconduct based on, the same matters and to dismiss him. That was a factor to which the ET were entitled to attach weight in applying the range of reasonable responses test.
27. Turning to the incidents that were not covered by the initial investigation and the FBP procedure, Mr Sutton submits that the ET made an error of law in substituting their judgment for that of the Trust and in reaching a decision that the dismissal was unfair without taking into account the whole of the relevant misconduct on the part of Dr Sarkar. The additional incidents should have been considered in conjunction with the earlier misconduct. They were a continuing course of conduct. Further, Mr Sutton submits that wrongful substitution occurred when the ET considered the degree of culpability or blameworthiness of the additional matters and concluded that the other incidents were matters of a "relatively minor nature." That substitution infected their analysis of the range of reasonable responses.
28. I do not agree that this was an instance of wrongful substitution by the ET of themselves for the Trust. Evidence was given by the chairman of the dismissing panel, Mr Ian Kent, who was an Executive Director of the Trust, that the additional incidents were relatively minor or, in the case of the phone call to Mr Ashby, "less important issues." The ET were entitled to accept that evidence and, on a fair and reasonable reading of the judgment, did not go beyond that evidence.
29. I am also unable to accept Mr Sutton's submission that there is an error of law in the ET's adverse and unfair findings about the conduct of the Medical Director. That finding related to her change of approach in the FBP discussions and the decision to report Dr Sarkar to the GMC, which is said to have been prompted by an allegation of Dr Sarkar's continued harassment of Ms Fiona Clark, as evidenced by an exchange of emails on 16 May 2007. It is submitted that this point was not pleaded or specifically identified and that the Medical Director had no opportunity to respond to it or to make submissions on it, explaining her change of heart about Dr Sarkar and why there were sufficient grounds for the Trust to withdraw from the FBP. It should not have been taken into account by the ET as a consideration relevant to the range of reasonable responses. It had infected the ET's consideration of the Trust's reasonableness.
30. In my judgment, the ET were entitled in law to take the view that reporting to the GMC was introduced by the Medical Director as a new condition at a very late stage in the FBP and that it was the reason why the FBP process terminated. The findings of the ET were not unfair to the Medical Director. Although she had made a witness statement, she was not called to give evidence at the initial hearing in the ET in April 2008 or at the reconvened hearing at the end of July 2008. It was clearly alleged in Dr Sarkar's ET1 (paragraph 16) that reporting to the GMC was a "volte face " by the Trust following his acceptance of the FBP. The volte face was denied by the Trust in the ET3 (paragraph 15). Evidence could have been called by the Trust on that point at some point in the hearing in order to challenge Dr Sarkar's account of the termination of the FBP procedure.
31. On the final point whether the EAT erred in its order for the disposal of the appeal by not remitting the matter to the same ET and instead deciding it itself, it is unnecessary to express a view: the ET did not err in law in holding that the dismissal was unfair.

Result

32. I would allow the appeal and restore the judgment of the ET. There was no error of law in it. The matter should now proceed to a remedies hearing.

Lord Justice Richards:

33. I agree.

Lord Justice Rimer:

34. I also agree.