England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(Langstaff J (President), Mr B Beynon, Mr S Yeboah)

		Royal Courts of Justice Strand London, WC2
		29th October 2014

LORD JUSTICE BEAN:

1. The appellant was employed by the Ealing Hospital NHS Trust as a consultant haematologist. She had a second job seeing private patients one morning or one afternoon per week. The Ealing Hospital Trust were aware of this arrangement.
2. In March 2009 she began a period of paid sick leave from the Trust. She submitted a series of medical certificates to the Trust in the usual form stating that she was unfit for work, and eventually (in the case of the last certificates) that she could begin to return to work on a staged basis. But during the period while she was certified as unfit for work, she saw about 11 private patients on six days.
3. There was no express term of her contract of employment with the Trust prohibiting her from undertaking private practice work while on paid certificated sick leave, but Dr Lynn, the Medical Director of the Trust, had both written to her and told her orally in late 2007 that she should not carry out private practice work while on sick leave and that engaging in such work "could be construed as fraud". When a Disciplinary Panel was eventually convened the appellant told them she could not recall being told this nor receiving the letter, but she was disbelieved.
4. She did not discuss her plan to carry out some of her private patient work with either her line managers or with the Practitioner Health Programme or Occupational Health representatives of the Trust whom she saw from time to time during the period of sick leave. She did however mention the private work herself in an email to Dr Lynn of 13th May 2009. She wrote that she had tested herself out on three private patients the previous day. This was, it seems, the first the Trust knew of her having continued private work during the period of sick leave and they launched an investigation. Following the investigation they instituted disciplinary proceedings, of which more later.
5. Before the disciplinary proceedings began she had been sent two letters setting out what was to happen at the forthcoming hearing. Each of these letters stated that the allegation was potentially one of gross misconduct which could, if substantiated, lead to dismissal.
6. At the Panel hearing the appellant was represented by counsel. There was no dispute that she had indeed undertaken private work during the period of her sick leave. She told the Panel that she had thought at the time she was doing nothing wrong, but she now accepted that what she had done was indeed wrong. The Disciplinary Panel concluded that she had committed gross misconduct and that dismissal was the appropriate sanction. Their decision was formally embodied in a letter of 2nd December which included the following:

"The Panel felt that this allegation constituted fraud which could be considered as gross misconduct and therefore turn to consider the mitigation presented by you and on your behalf.

The Panel heard evidence that you had previously been advised verbally and subsequently confirmed in writing by Dr Lynn, Medical Director not to undertake private work whilst medically certified. Whilst your submission was that you did not recollect receiving such a letter, given your recollections of the rest of the meeting which were reflected in the letter the Panel felt this unlikely.

Even if you had not received such advice previously the Panel felt that given your seniority and long service in the NHS it was entirely reasonable to expect you to recognise that working privately whilst medically certified was entirely inappropriate."

The claimant was informed of her right of an internal appeal. She exercised that right. There was a subsequent appeal hearing at which the decision to dismiss was upheld.

7. She brought a claim before an employment tribunal, first of unfair dismissal and secondly of disability discrimination. Again she was represented by counsel. Before the Tribunal a schedule of issues was drawn up, apparently agreed on all sides. These included, in so far as unfair dismissal was concerned, a series of questions derived from the decision in British Home Stores v Burchell, including whether the decision to dismiss for gross misconduct given the facts as known at the time, was within the band of reasonable responses open to a reasonable employer.
8. The Tribunal hearing took place over five days at Watford from 21st to 25th February 2011 before Employment Judge Manley and two lay members. In their reserved determination sent to the parties on 22nd March 2011, the Tribunal rejected both the unfair dismissal claim and the disability discrimination act claim: as to the latter, they held that the claimant was not a disabled person at the relevant time, and there has been no appeal from that part of their decision.
9. The Employment Tribunal's answer to the Burchell questions in their conclusions on unfair dismissal were as follows. Firstly, the reason for the claimant's dismissal was conduct, namely working in private practice whilst certificated and on paid sick leave from her employers. No other reason had been suggested, other than disability, which they had rejected. Secondly, the respondent had a genuine belief in the misconduct having occurred. Third, the Panel had reasonable grounds for that belief. Fourth, the respondent had conducted as full an investigation as was reasonable in all the circumstances.
10. On the question of whether it was fair to dismiss the claimant, the Tribunal said this at paragraph 13:

"... this is a difficult question for us. We of course accept that we are testing the respondent's response within a range of reasonable decisions and must not substitute our own view. On the facts decided by and known by the respondent at the time we take the view that this dismissal did fall within the range of reasonable responses. The respondent was entitled to find that the claimant's actions amounted to gross misconduct. We bear in mind the not unreasonable findings that the claimant had been told in 2007 about this very same conduct, that she was a very experienced doctor who had knowledge of sick certificates and had herself decided not to sign the reverse of those sick certificates as she had indeed been working. Once gross misconduct is found, dismissal must always fall within the range of reasonable responses and it is not for this tribunal to substitute any sanctions we might have imposed or whether we would have dismissed the claimant in these circumstances. We cannot say that the dismissal was outside the range of reasonable responses."

11. On appeal to the Employment Appeal Tribunal against the finding of unfair dismissal, the claimant was partly successful. The EAT found there was no basis for interfering with the Employment Tribunal's finding of gross misconduct. They considered however that in the last two sentences of paragraph 13 (which I have just quoted) the Tribunal had made a "logical jump" from the finding of gross misconduct to the proposition that dismissal must then inevitably fall within the range of reasonable responses and that this gave, in the words of the EAT, "no room for considering whether, though the misconduct is gross and dismissal almost inevitable, mitigating factors may be such that dismissal is not reasonable." The EAT allowed the appeal to the extent of remitting the issue to the same employment tribunal, following the guidelines in Sinclair Roche & Temperley v Heard [2004] IRLR 763, in order for the Tribunal to consider whether the gross misconduct had justified dismissal in the light of all the mitigation available personally to the claimant.
12. I should note before coming to the grounds of appeal to this court some observations of the Employment Appeal Tribunal at paragraph 37 of their judgment with which I entirely agree:

"The lay members of this Tribunal would emphasise that in the employment world claiming sick pay whilst working elsewhere is in general regarded very seriously by employers. In their experience any substantiated case almost inevitably will lead to dismissal, not least because if it did not, the employer might find it difficult to distinguish on any proper basis between the cases of other employees doing the same. That is not, however, to say that it is an inevitable conclusion.

We conclude here, therefore, that it was not perverse of the Tribunal to make the finding it did as to misconduct and as to it being gross. The Tribunal had taken into account in so concluding the fact that the Claimant had had the instructions she did."

13. The claimant sought permission to appeal from the decision of the Employment Appeal Tribunal to this court. The grounds of appeal emphasise the sentence in the letter of dismissal saying that "The Panel felt that this allegation constituted fraud which could be considered gross misconduct." The grounds continue:

"Clearly the Respondent dismissed the Appellant on the basis that it believed the Appellant's conduct to amount to fraud. Therefore the Employment Tribunal had to satisfy itself in considering the fairness of the dismissal, whether there was:

(i) a genuine belief that the Appellant's conduct amounted to fraud.

(ii) reasonable grounds to base the belief that the Appellant's conduct amounted to fraud.

(iii) reasonable investigation into the Appellant's conduct amounting to fraud.

Since the Employment Tribunal did not address the reason for dismissal being fraud, it failed to answer the relevant question in the correct context. It wrongly categorised the Appellant's conduct into general misconduct (sic) and then addressed the relevant questions. Even then, the Employment Tribunal did not appreciate that there was no contractual term that allowed the Appellant to know that her conduct amounted to gross misconduct."

Underhill LJ refused permission to appeal on the papers. He wrote:

"The Employment Tribunal found that the reason for the Applicant's dismissal was that she had done private work while certificated and on sick leave; and it applied the 'Burchell test' to that reason and not to a dismissal for 'fraud'. I believe that that finding was plainly open to it notwithstanding the use of the word 'fraud' in the dismissal letter. That was a label for the actual conduct alleged and found. I accept that it may not have been a good label (I suspect it has its origin somewhere in the written disciplinary procedures), but the Employment Tribunal was rightly concerned with the substance of the misconduct."

He also referred to the second ground of appeal as to the absence of an express contractual term, specifying that the relevant conduct would amount to gross misconduct, and wrote that he could see nothing in that.

14. On a renewed oral application Rimer LJ granted permission to appeal, observing that the reference in the dismissal letter to "fraud which could be considered misconduct" was a "less than competent piece of writing" and that it was properly arguable that it was not for an employment tribunal to treat such a letter as meaning something different from what it in fact said.
15. The Trust have not sought to cross appeal against the Employment Appeal Tribunal's judgment to the extent that it was unfavourable to them.
16. Before us, Miss Mallick for the appellant referred to a number of authorities. In Hotson v Wisbech Conservative Club [1984] IRLR 422 the claimant had been employed at a club bar and was responsible for the stock. A deficiency was found. The club committee debated whether the claimant should be charged with dishonesty but the committee decided against that and that they ought to "proceed in a low key":

"The Chairman and Vice-Chairman went to have a word with Mrs Hotson. They asked her if she had any explanation for the shortages that had occurred in cash takings or in stock or in both. She told them that she could not think of any explanation at all. They thereupon summarily dismissed her."

Mrs Hotson's solicitors requested a statement of the grounds for dismissal but received no reply. She filed a tribunal claim. The club entered their notice of appearance giving grounds of opposition which said nothing about dishonesty. The fact that suspected dishonesty was the true ground for dismissal only emerged during the cross-examination of the vice-chairman. The ratio of the case is set out in the headnote:

"Suspected dishonesty is a grave and serious ground for dismissal which should be stated at the outset by the employer or not stated at all. Although the authorities on the employer's duty to state the grounds of dismissal have the effect that an employer is not tied to the label he happens to put on the particular facts relied on, where the original reason given for dismissal is lack of capability, the substitution or addition of suspected dishonesty as a reason, even though precisely the same facts may be relied upon by the employer, goes beyond a mere change of label. It is too serious and too significant to be given such innocuous character."

Miss Mallick also cited to similar effect Strouthos v London Underground Limited, a decision of this court reported at [2004] IRLR 636. It is unnecessary to go into the facts which are quite complicated. This court in setting aside a decision of the EAT and restoring a decision of an employment tribunal held that:

"An employee should only be found guilty of the offence with which he has been charged. It is a basic proposition, whether in criminal or disciplinary proceedings, that the charge against the defendant or the employee facing dismissal should be precisely framed, and that evidence should be confined to the particulars given in the charge. Care must be taken with the framing of a disciplinary charge and the circumstances in which it is permissible to go beyond that charge in a decision to take disciplinary action are very limited."

17. It is of course an elementary rule of natural justice and disciplinary proceedings that the individual concerned must know the case she has to meet and in particular must know whether or not the allegation is one of dishonesty. But I do not think there was any doubt in this case about what was being alleged against the appellant, nor was anything apparently made of this point either before the Panel or before the employment tribunal. The original letter from Dr Lynn to the claimant of 16th November 2007, which the claimant said she did not recall receiving but which the Tribunal found had indeed been sent, had said that:

"if you are certificated as being unfit to work in your NHS post at Ealing Hospital and then if you engage in work in a similar nature elsewhere then that could be construed as fraud."

18. In an email of 15th June 2009, following a meeting with Dr Lynn and with Mr Stanton of the Trust's Human Resources Department, the claimant wrote:

"We went straight into the issue of my having worked in private practice during my period of certificated sick leave which Janet Ballard had already told me which (sic) construed to be fraud.

You stated that you had already pointed out that this is the case in a letter that you had sent to me.

Unfortunately, I have no recollection of that letter..."

In a memorandum written later in 2009, after the claimant had been interviewed, the investigating officer, Mr Harchowal, wrote:

"I am concerned that despite being informed on two separate occasions in receiving written confirmation that Dr Brito should not undertake any work whilst medically certified as unfit and Dr Lynn further advising that this could be misconstrued as fraud, Dr Brito deliberately chose to undertake private practice whilst certified as unfit to work."

This series of documents leads up to the finding of the Panel that what was alleged, which they found proved, constituted fraud which could be gross misconduct. I do not think that it is fair to the writers of these letters, even of the letter of dismissal, to hold a microscope to them to the extent of finding differences, as Miss Mallick urged us to do, between "could be construed as fraud" "could be misconstrued as fraud" and "constituted fraud". I would agree with the observations of Langstaff J, President, giving the decision of the Employment Appeal Tribunal in this case where he said:

"There is a danger, as it seems to us, in using an emotive word such as fraud or dishonesty as a label rather than as a description of the conduct for which was a dismissal. However, if there is an allegation of fraud or dishonesty, it is a serious allegation and it deserves to be approached with commensurate care and seriousness."

19. The notices of the forthcoming Panel hearing sent to the claimant on 14th September and 13th November 2009 made clear the nature of the charge. The first was headed "Allegation into the undertaking of private practice during the period when certified as medically unfit" and, as I have already noted, both letters contained the sentence "I must advise you that the allegation is potentially one of gross misconduct and if substantiated could lead to dismissal."
20. The statements of the Trust's witnesses were served in advance of the Panel hearing and, although they have not been included in our bundle, there has been no suggestion that they failed to give the claimant and her counsel anything less than a full account of the evidence against her. So she knew very well the charge she had to meet. The issues of disputed fact appear to have been (a) whether she had been told orally and/or in writing in November 2007 that it was impermissible to undertake private practice during the period of certificated sickness and (b) whether her state of health in 2009 was such that even if she had been told this in 2007 she might have forgotten about it or not addressed her mind to it.
21. Having answered these disputed issues of fact "yes" and "no" respectively, the Panel were entitled to find that the conduct amounted to gross misconduct. Whether the label of fraud or dishonesty was attached as well is immaterial. It is notable that the list of questions which the Tribunal were asked to decide were the standard Burchell questions. It was not suggested at that stage that the precise wording of the dismissal letter was a matter of any great significance.
22. Miss Mallick's other arguments before us were essentially directed to the merits. There is of course no appeal from an employment tribunal on issues of fact. Their conclusion that the respondent was entitled to find that the claimant's actions amounted to gross misconduct was in my view) as well as in the view of the Employment Appeal Tribunal) plainly one which they were entitled to reach. Among the factors which led the employment tribunal to that conclusion were: (a) the acceptance that the claimant had been told in 2007 about the very same conduct; (b) the fact that she was a very experienced doctor who had had knowledge of sick certificates (although clearly when one reaches the rank of consultant the issue of a sick certificate is not as regular an event as when one is a GP) (c) that she had made in the witness box what seems to me to have been an extremely damaging admission, that although she had presented to her employer a series of general practitioner's medical certificates in standard form saying she was unfit to work. The Tribunal found at paragraph 6.8 that "she did not sign the back of those certificates because, she says, she realised it would be untruthful, as she continued to see private patients. She accepted that signing the reverse would be fraud because she had in fact worked." Once that admission was made in evidence, the decision by the Tribunal that she had been rightly found to have committed gross misconduct was to my mind inevitable.
23. Miss Mallick drew our attention to an unreported decision of the Employment Appeal Tribunal, Perry v Imperial College Healthcare NHS Trust delivered on 22nd July 2011. In that case the claimant, a midwife, had two jobs, one at a clinic within 100 yards of her home and the other as a community midwife going to patients' homes, usually by bicycle. She developed a painful knee condition which stopped her from travelling to patients' homes but did not stop her working at the clinic 100 yards from her home. The Employment Tribunal made what Wilkie J described in the EAT as "a clear finding of fact that the appellant was not dishonest in failing to ask for permission" to draw sick pay from her job as a community midwife while continuing to work at the clinic. In those circumstances, the EAT held that the ET had been wrong to reject the claim for unfair dismissal. When a decision of the Employment Appeal Tribunal remains unreported three years after being given, that is usually for good reason and the Perry case is no exception to the general rule. The decision, if I may say so, is correct, but turns on its facts. It does not assist Miss Mallick on this appeal. The general principle is as set out by the EAT in the present case: see paragraph 12 above.
24. For these reasons, I consider that there was no error of law in the decision of the Employment Tribunal (other than that found by the EAT as to which there has been no cross-appeal) and I would dismiss the appeal. It is now five years since the appellant's dismissal and the remitted hearing as to whether the gross misconduct was correctly treated as justifying dismissal should proceed to a (hopefully brief) hearing before the Employment Tribunal without any further delay.
25. LORD JUSTICE CHRISTOPHER CLARKE: I agree.
26. LADY JUSTICE ARDEN: I also agree and have nothing to add.