England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE LANGSTAFF
UKEATPA140511CEA

		Royal Courts of Justice Strand, London, WC2A 2LL
		26 /02/2013

Lord Justice Mummery:

The issue

1. This appeal comes, via the Employment Appeal Tribunal (EAT), from the rejection by the Employment Tribunal (ET) of a teacher's unfair dismissal claim.
2. What is the legally permissible role of a final warning in an employer's decision to dismiss an employee, who is accused of subsequent misconduct while the warning is still in force?
3. In February 2003 the claimant was taken on as "Second in Science" at Willingsworth High School. In 2006 her employer, Sandwell Metropolitan Borough Council, dismissed her from her post with effect from the end of the year. The reason given by the Council for her dismissal, which was preceded by a period of suspension, investigation and a disciplinary hearing, was the alleged misconduct between November 2005 and February 2006.
4. In reaching that decision the Council took account of a prior final written warning issued by it on 10 February 2005. The warning was given in respect of alleged misconduct by the claimant on 8 October 2004 during a lesson on static electricity. That warning was preceded by a period of suspension, investigation and a disciplinary hearing. The Council notified the claimant that the warning was to remain on her record for 24 months.
5. The claimant returned to work after the warning. She lodged an internal appeal against the misconduct finding at the disciplinary hearing and against the issue of the final warning. She contended that the evidence showed that the events could not have happened as alleged in complaints against her by pupils.
6. The appeal of 15 March 2005 from the final warning was aborted. It was re-scheduled for 23 May 2005, but then adjourned at the request of the claimant's trade union representative (from West Midlands Region of NASUWT). The date for the hearing of the appeal was never re-arranged or restored. In consequence the final warning remained on the claimant's record at the time of the alleged subsequent misconduct and of the Council's decision to dismiss her.

The tribunal proceedings

7. The claimant presented an unfair dismissal claim to the ET. She had and still has a lay representative, Mr Ivan Yates. In response to questions at the hearing Mr Yates informed the court that the claimant's trade union did not provide her with advice or representation in connection with her unfair dismissal proceedings; that he had "inherited" her case from the Free Representation Unit at the University of Central England in Birmingham, which had ceased to represent her, as the size of the case proved beyond its meagre resources; and that he had no professional legal qualifications or practical experience of the ET.
8. The ET decided unanimously that the claimant was not unfairly dismissed. On the first time round there was a 24 day hearing between September and December 2008. The ET rejected the claim for reasons set out in their judgment sent to the parties on 23 March 2009. They concluded that the decision to dismiss was for a conduct reason; that it was within the range of reasonable responses; that the existence of the final written warning was essential to the decision; and that the dismissal was fair. The Council accepted that, absent the final written warning, it would not have dismissed the claimant.
9. In the proceedings the claimant challenged the issue of the final warning. The ET expressed concerns in their first judgment about the deficiency in the Council's procedure and about the adequacy of the investigation undertaken before the issue of the warning. The ET went on to describe the circumstances in which it had been possible for the claimant to further pursue the appeal against the warning, but it was found that she had chosen not to do so.
10. The claimant made four unsuccessful requests to the ET for a review of their decision.
11. In 2011 the ET heard the case for a second time and unanimously reached the same decision as on the first occasion. That decision was reached after a remitted hearing following on an unsuccessful appeal to the Employment Appeal Tribunal (EAT), with an appeal to the Court of Appeal that resulted in a consent order remitting the case to the EAT on limited grounds. They related to re-opening the question of the status of the final warning. The EAT remitted the case to the ET to re-consider their ruling.
12. The ET again dismissed the claim for the reasons set out in their judgment sent to the parties on 4 August 2011. The EAT rejected the claimant's latest appeal on 21 March 2012.

Permission to appeal

13. The only ground on which permission has been granted to appeal from the EAT to this court was formulated as follows: whether the final written warning on which the Council relied should be treated as a nullity in circumstances where, although there is evidence to support the decision to issue the warning, the employer has deliberately chosen not to consider evidence which, objectively viewed, might have caused him to believe that the misconduct alleged has not been committed and therefore not to issue the warning.

The final warning

14. The key question is whether there was an error of law in the ET's second judgment in their approach to the Council's reliance on the final warning. The ET reconsidered the evidence in the light of further submissions, but concluded that there was no basis to depart from their previous findings of fact. The ET remained of the view that the Council had issued that warning in good faith, that it was not manifestly inappropriate to issue it and that there was evidence to sustain it. They said that:-

"8. As to whether there were prima facie grounds for [the final warning] there is, in our judgment, no doubt that the respondent did have a substantial body of evidence upon which it could properly conclude that the claimant had committed the act of misconduct alleged. On any view, there clearly was a prima facie case for the issue of a final written warning. Accordingly, applying the Stein and the Tower Hamlets test, we are satisfied that the employer and this tribunal should properly regard the final written warning as valid when then taking it into account when considering the later misconduct. The final written warning was not issued in bad faith, nor was it manifestly inappropriately issued. It was valid for the purposes of subsequent disciplinary proceedings and therefore the dismissal was fair and the claim for unfair dismissal is dismissed."

15. The claimant contends that, before the final warning was issued, the Council had deliberately chosen not to consider evidence before the Panel. Objectively viewed that evidence might have caused the Council to believe that misconduct had not been committed by her and therefore not to issue the warning. The claimant contends that there were procedural irregularities in the issuing of the final written warning; that the ET should have gone behind it and allowed it to be re-opened ; and should have treated it as "a nullity" when determining her unfair dismissal claim.
16. The decision of the EAT in Stein v. Associated Dairies Ltd [1982] IRLR 444, in which the employer took account of a final warning that was subject to an outstanding appeal at the date of the decision to dismiss for subsequent misconduct, was approved by the Court of Appeal in Tower Hamlets Health Authority v. Anthony [1989] IRLR 394. Both cases were cited on the question whether the Council was entitled to act on the final written warning as valid and whether it was open to the ET to go behind the prior issue of a final warning.
17. The EAT rejected the submission that there was any inconsistency between the two cases and quoted the legal principle as laid down in Stein :

"6. …It was argued before the Industrial Tribunal on behalf of the appellant that he should never have been given a final warning at all. We do not consider that it was the function of the Industrial Tribunal to sit in judgment upon this matter. It was sufficient if they were satisfied that the final warning had been issued in good faith and that there were at least prima facie grounds for following the procedure..."

18. At this hearing neither side questioned the correctness of that statement, save that Mr Yates said that he would add to it the references in Stein as to whether it was manifestly inappropriate to issue the warning or that it had been issued for an oblique or improper motive. The claimant's contention is that the ET incorrectly applied that test; that the final written warning was manifestly inappropriate; that the Council had failed to establish prima facie grounds against her; and that the evidence against her did not justify the imposition of the final warning.

Discussion and conclusions

19. The correct starting point for this appeal is Part X of the Employment Rights Act 1996. It enacts the law of unfair dismissal. Section 98, which the ET cited in their first judgment (page 9), provides that:-

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

(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) 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."

20. As for the authorities cited on final warnings, Elias LJ observed, when granting permission to appeal, that the essential principle laid down in them is that it is legitimate for an employer to rely on a final warning, provided that it was issued in good faith, that there were at least prima facie grounds for imposing it and that it must not have been manifestly inappropriate to issue it.
21. I agree with that statement and add some comments.
22. First, the guiding principle in determining whether a dismissal is fair or unfair in cases where there has been a prior final warning does not originate in the cases, which are but instances of the application of s. 98(4) to particular sets of facts. The broad test laid down in s.98(4) is whether, in the particular case, it was reasonable for the employer to treat the conduct reason, taken together with the circumstance of the final written warning, as sufficient to dismiss the claimant.
23. Secondly, in answering that question, it is not the function of the ET to re-open the final warning and rule on an issue raised by the claimant as to whether the final warning should, or should not, have been issued and whether it was a legally valid warning or a "nullity." The function of the ET is to apply the objective statutory test of reasonableness to determine whether the final warning was a circumstance, which a reasonable employer could reasonably take into account in the decision to dismiss the claimant for subsequent misconduct.
24. Thirdly, it is relevant for the ET to consider whether the final warning was issued in good faith, whether there were prima facie grounds for following the final warning procedure and whether it was manifestly inappropriate to issue the warning. They are material factors in assessing the reasonableness of the decision to dismiss by reference to, inter alia, the circumstance of the final warning.
25. Turning to this case the ET made relevant findings of fact on those points.
26. On the basis of those findings of fact it is clear that the ET did not err in law in concluding that the final warning was properly taken into account by the Council when it decided to dismiss the claimant. The dismissal was fair.

Result

27. I agree with the judgments of Lewison LJ and Beatson LJ. The appeal is dismissed.
28. ETs, practitioners and users alike should take note to heed the constructive comments of Lewison LJ's judgment paragraph 33. As Langstaff J said in the EAT judgment, this case has "a considerable procedural history." Much of the evidence given at the first hearing was of little or no relevance to unfair dismissal, which was the only claim. The ETs are responsible for ruling on what is relevant and what is irrelevant. The parties and their representatives are under a duty to co-operate with the ETs by sticking to relevant issues, evidence and law. The ETs are not obliged to read acres of irrelevant materials nor do they have to listen, day in and day out, to pointless accusations or discursive recollections which do not advance the case. On the contrary, the ETs should use their wide-ranging case management powers, both before and at the hearing, to exclude what is irrelevant from the hearing and to do what they can to prevent the parties from wasting time and money and from swamping the ET with documents and oral evidence that have no bearing, or only a marginal bearing, on the real issues.

Lord Justice Lewison:

29. There are two aspects of this case, neither of which is directly relevant to the narrow issue raised by the appeal itself, on which I would like to say a few words.
30. Procedure in the Employment Tribunal is governed by The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004. In common with both the Civil Procedure Rules and also rules applicable to other tribunals, the 2004 Regulations begin by describing the overriding objective. Again in common with other procedural codes, the overriding objective is dealing with cases justly: Reg 3 (1). Reg 3 (2) goes on to say:

"(2) Dealing with a case justly includes, so far as practicable:—

(a) ensuring that the parties are on an equal footing;

(b) dealing with the case in ways which are proportionate to the complexity or importance of the issues;

(c) ensuring that it is dealt with expeditiously and fairly; and

(d) saving expense."

31. The parties themselves have a duty to assist the tribunal to further the overriding objective (Reg 3(4)).
32. The Employment Tribunal Rules give the Employment Tribunal wide powers of case management. These include the power to conduct a case management discussion and a pre-hearing review. The objective of all these powers is to enable the ET to concentrate on the real issues as quickly, shortly, and cheaply as possible without injustice. As far as the hearing is concerned, rule 14 (3) states:

"The Employment Judge or tribunal (as the case may be) shall make such enquiries of persons appearing before him or it and of witnesses as he or it considers appropriate and shall otherwise conduct the hearing in such manner as he or it considers most appropriate for the clarification of the issues and generally for the just handling of the proceedings."

33. As a newcomer to this field, I cannot believe that it was intended that a claim for unfair dismissal should take some four weeks to hear, with witnesses producing witness statements hundreds of pages long and being subjected to cross-examination for days on end. In our case aspects (b), (c) and (d) of the overriding objective seem to have been largely forgotten. The function of the ET is a limited one. It is to decide whether the employer acted reasonably in dismissing the employee. It is not for the ET to conduct a primary fact-finding exercise. It is there to review the employer's decision. Still less is the ET there to conduct an investigation into the whole of the employee's employment history. The ET itself commented in this case that much of the evidence that it heard was irrelevant to the issues it had to decide. But irrelevant evidence should be identified at the case management stage and excised. It should not be allowed to clutter up a hearing and distract from the real issues. The ET has power to do this and should not hesitate to use it. The ET also has power to prevent irrelevant cross-examination and, again, should not hesitate to exercise that power. If the parties have failed in their duty to assist the tribunal to further the overriding objective, the ET must itself take a firm grip on the case. To do otherwise wastes public money; prevents other cases from being heard in a timely fashion, and is unfair to the parties in subjecting them to increased costs and, at least in the case of the employer, detracting from his primary concern, namely to run his business. An appellate court or tribunal (whether the EAT or this court) should, wherever legally possible, uphold robust but fair case management decisions: Gayle v Sandwell & West Birmingham Hospitals NHS Trust [2011] EWCA Civ 924; Broughton v Kop Football (Cayman) Ltd [2012] EWCA Civ 1743.
34. The second comment I wish to make relates to the written warning and its aftermath. This was one of the factors that the employer took into account in deciding to dismiss Miss Davis. Given that the question is whether the employer acted reasonably, the sub-question is whether it was reasonable to take that historic written warning into account. The fact of the written warning was a fact in the real world; and I cannot see that history can be rewritten. It was also a fact in the real world that, as the ET found, Miss Davis appealed against the written warning but her appeal was not pursued to a conclusion. In its first decision the ET decided that it was reasonable for the employer to take into account both these real facts. However, the EAT held that the ET had made an error of law in having regard to the fact that the appeal against the written warning was not pursued to a conclusion. Although the point is not formally part of this appeal, I would not wish to be taken as endorsing the view that it is always unreasonable for an employer to take into account the fact that an appeal (not against the dismissal itself, but against a historic disciplinary sanction) has been withdrawn or abandoned.
35. With these additional observations, I agree with Mummery LJ that the appeal must be dismissed for the reasons that he gives.

Lord Justice Beatson:

36. I have read the judgments of Mummery and Lewison LJJ in draft, and agree that the appeal must be dismissed for the reasons Mummery LJ gives. I also agree with the comments made by Lewison LJ.
37. I add one further observation about the written warning. In this appeal, the appellant sought to revisit the question whether the final written warning should in fact have been issued. She did so by maintaining that where, at the hearing which led to the warning, there is conflicting evidence which wholly or significantly undermines the evidence which led to the disciplinary process, it is "manifestly inappropriate", within the tests in the cases of Stein v Associated Dairies Ltd [1982] IRLR 444 and Tower Hamlets Health Authority v Anthony [1989] IRLR 394, to issue the written warning without further investigation. The court was invited to consider the details of that evidence. It was argued that, in the light of it, it was unreasonable in later disciplinary proceedings which lead to dismissal for the employer to take account of the fact that a written warning had been issued. These arguments vividly illustrate the need for a restrictive approach to the question of when it is legitimate for a Tribunal considering the fairness of a dismissal to go behind a final written warning given in the past.
38. The requirement in Stein v Associated Dairies Ltd and Tower Hamlets Health Authority v Anthony that there be either "bad faith", "an oblique or improper motive" or that it was "manifestly inappropriate" to give the warning shows that what is intended is a restrictive approach. To give "manifestly inappropriate" the broad meaning the appellant has invited us to give it, a meaning which involves the tribunal and the appellate bodies, is either inconsistent with such an approach or significantly lowers the threshold. The appellant's arguments in this appeal, if accepted, open up the prospect of tribunals, the EAT, and this court, when considering the lawfulness of a dismissal, later and sometimes often considerably later than the earlier disciplinary process which led to a formal warning, considering and unpicking the details of that process and having to inquire into the adequacy of the evidence. It would involve doing so even when the earlier process and the formal warning has not been challenged, has been unsuccessfully challenged, or where a challenge has been made but not pursued. There is, however, a need for finality. Where there has been no appeal against a final warning, or where an appeal has been launched but not pursued, I consider there would need to be exceptional circumstances for going behind the earlier disciplinary process and in effect re-opening it.
39. The employer in this case has not sought to appeal the EAT's finding that the Tribunal erred in law in having regard to the fact that Miss Davies had abandoned her appeal, and so the issue is not before us. I, however, consider that it may be reasonable for an employer to take into account the fact that an appeal against an earlier disciplinary sanction has been withdrawn or abandoned when considering, in later proceedings, whether to take into account the earlier sanction in assessing whether to dismiss the employee.