SECOND DIVISION, INNER HOUSE, COURT OF SESSION
Lord Justice Clerk Lady Paton Lord Drummond Young	[2012] CSIH 46 XA132/11 OPINION OF THE LORD JUSTICE CLERK in the Appeal from the Employment Appeal Tribunal by TAYSIDE PUBLIC TRANSPORT COMPANY LIMITED (t/a TRAVEL DUNDEE) Appellant; against JAMES REILLY Respondent: _______

For the appellant: Hay; Biggart Baillie LLP (for Ford & Warren, Leeds)

For the respondent: Cameron; Balfour and Manson LLP (for Muir Myles Laverty, Dundee)

30 May 2012

Introduction

[1] The respondent has lodged a claim with the Employment Tribunal (ET) that he was unfairly dismissed by the appellant. On 4 August 2010, at a Pre-Hearing Review at Dundee, Employment Judge Hendry struck out the claim on the ground that it had no reasonable prospect of success.

[2] The respondent appealed to the Employment Appeal Tribunal (EAT). On 27 May 2011 Lady Smith allowed the appeal and remitted the claim to the ET for a full hearing. On 28 July 2011 she refused leave to appeal to this court. On 2 December 2011 this court granted the appellant's unopposed motion for leave to appeal.

The facts

[3] The respondent was employed as a bus driver by the appellant. He had a good work record. On 21 November 2009, he set off in a double-decker bus on a route from Ninewells Hospital, Dundee to Tesco. Since part of the normal route had been closed off, he had to take a diversion within the hospital grounds. He took the wrong diversion. The bus collided with an overhead pedestrian walkway. The top of the bus was sheared off. No one was injured.

[4] In his incident report the respondent said that he had thought that he was following the correct diversion. It was raining heavily. He was driving at around 25mph.

[5] The appellant's health and safety co-ordinator, Ms Jo Burnett, conducted an investigation. She reported that the correct details for the diversion were on the running board of the bus; that is to say in a document setting out the route that the driver was to follow. On the approach to the walkway there were signs warning drivers of the maximum height; pedestrian and ambulance hazard signs and chains hanging from a gantry. Cctv footage of the incident suggested that the windscreen wipers of the bus were not switched on before the accident. When interviewed by Ms Burnett the respondent said that he did not think that the diversion description was on the running board. He said that the roads were wet. It was raining heavily. Visibility was impaired. He had driven the route before. He was travelling at about 20 mph. Ms Burnett had evidence that when the bus was checked after the accident, the diversion notice was on the running board; and that there was a 15 mph speed limit within the hospital grounds.

The disciplinary proceedings

[6] The appellant's disciplinary policy provides for dismissal for gross misconduct for inter alia "causing, by negligence to duty, a serious blameworthy accident which results in damage to persons, property, vehicles, plant or equipment, etc."

[7] On 1 December 2009 there was a disciplinary hearing. The respondent was present with his trade union representative. The investigating officer's report was read over together with the statements of certain employees. The respondent told the hearing that he could not recall having seen the diversion notice on the running board. He thought that the route of the diversion was not clear. He had not heard the chains hit the roof of the bus. He said that a relief driver had told him that the route that he followed was the correct one.

[8] The appellant's operations manager gave the decision of the disciplinary hearing there and then. He said that the respondent had caused a blameworthy accident. He failed to follow the correct diversion. He should have checked the running board. His speed had contributed to the accident. He had failed to follow the warning signs. He was therefore to be dismissed for gross misconduct.

[9] On 10 December 2009 the respondent's internal appeal against dismissal was refused.

The claim before the ET

[10] The respondent claims that the disciplinary procedure was unfair; that before the disciplinary hearing he was not given notice of the evidence against him, and that matters raised at the hearing were not followed up. He avers that in any event he was not guilty of an act of gross misconduct. The accident occurred because he was not properly advised about the change of route. The appellant had wrongly based its decision to dismiss on the value of the damage to the bus. Furthermore it had been comparatively lenient in its treatment of other employees who had had accidents or had engaged in unsafe driving (Appendix, pp 6-7).

The test for unfair dismissal

[11] Where a former employee alleges that he has been unfairly dismissed, the question

"(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." (Employment Rights Act 1996, s 98(4)).

[12] The ET should not substitute its view on the point for that of the employer. Instead, it should consider whether the employer's decision was within the range of reasonable responses to the employee's conduct (Foley v Post Office [2000] ICR 1283).

The test for striking out

[13] Rule 18(7)(b) of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 (SI No 1861) entitles the Employment Tribunal to strike out a claim if "it has no reasonable prospect of success."

The Pre-Hearing review

[14] The hearing before Employment Judge Hendry was conducted by reference to certain productions and without oral evidence.

[15] As part of his case the respondent's solicitor relied on a precognition of John Brown, another bus driver. The precognition was to the effect that on the day before the accident Mr Brown drove a single deck bus by the route that the respondent took. He was told on the internal radio to take that route. On the same day he handed over the bus to the respondent. He told the respondent what route to take. The accident occurred only because on the following day the respondent was put on the same route but with a double-decker bus. Mr Brown said that he told the investigating officer about this, but that what he said was ignored.

[16] The respondent's solicitor submitted there were factual disputes that could be resolved only after a full hearing. There was a dispute as to whether the speed was excessive and as to the adequacy of the information given to the respondent about the diversion. The respondent had not been told before the disciplinary hearing that he could be dismissed. He had not been forewarned of any specific allegation regarding speed, failure to see signs or failure to read information about the diversion.

[17] The appellant's solicitor submitted that the appellant had an honest belief, held on reasonable grounds and after an extensive investigation, that the respondent had committed gross misconduct (British Home Stores v Burchell [1980] ICR 303). Dismissal was within the range of reasonable responses open to the appellant. It was not for the ET to substitute its own view. The accident had cost the appellant about £60,000.

The decision of the ET

[18] The Employment Judge gave his decision on the day. In his written reasons dated 30 August 2010, he observed that the background facts to the case, which he then set out (paras 4-29) were relatively straightforward (para 3). After recording the parties' submissions he discussed the merits of the appellant's application. He recognised that to strike out the claim would be a draconian step; that the test was a high one (para 38); and that the evidence of Mr Brown was "clearly potentially relevant" (para 40).

[19] In his view, the allegation against the respondent was a simple one, namely that he drove into a bridge and caused considerable damage. The disciplinary process should be seen against that background. There was no dispute that the accident had occurred (para 46). The purpose of the investigation was to find an explanation for it. In reality, the respondent was not facing a series of allegations such as that of driving too fast. These matters arose from the claimant's own explanation (para 47). In any event the investigating officer's report was read out to him at the disciplinary hearing. The respondent did not ask for an adjournment. He could not have been in any doubt as to the case against him (para 48). The respondent had the opportunity to appeal and had not taken any point about lack of notice or any other unfairness in the procedure (para 51).

[20] The Employment Judge accepted that Mr Brown's evidence would have been relevant to the respondent's culpability. There was no reference to Mr Brown in the notes of the disciplinary hearing. The matter had not been raised at the appeal. This was fatal (para 52). The information from Mr Brown was therefore not before the appellant (para 53).

[21] The allegation of disparate treatment was put in general terms without any specified comparators (para 54). It was not for the ET to substitute its own view for the employer. The ET ought not to interfere with the appellant's decision to take the cost of the damage into account in coming to the conclusion that the accident amounted to gross misconduct (para 55). The appellant was possibly open to criticism for having failed to warn the claimant before the disciplinary hearing of all the evidence that it had collected against him; but there could be no doubt from the notes of the hearing that the essence of the case against the respondent, and the particular information on which it was based, was brought to his attention. He had an opportunity to respond to that evidence. There appeared to have been no prejudice (para 57).

[22] This was the conclusion of the Employment Judge:

"I am in a position to assess the likelihood of the claimant's case being successful at Tribunal. In the circumstances narrated the reasons advanced that the dismissal was unfair have no foundation on the basis of the information and documents that I have before me at present and that accordingly I am prepared to strike out the claimant's application for unfair dismissal" (para 58).

The decision of the EAT

[23] Lady Smith observed that the Employment Judge's decision had a lengthy section headed "Facts". However, it was important to remember that, as this was a pre-hearing review, no firm findings in fact could be made beyond the parties' admissions (para 4). The Employment Judge said that Mr Brown's evidence would have been relevant to culpability, but discounted it as the respondent had not referred to it at the disciplinary hearing or at his appeal. It was not apparent from the documents that the respondent knew that Mr Brown had spoken to the investigating officer (para 5).

[24] Her Ladyship was readily satisfied that the Employment Judge had gone too far and too fast in concluding that the claim had no reasonable prospects of success. She said that it was worrying that "he had determined a series of 'Facts' in circumstances when he did not have all the evidence before him that could have been led about the relevant events at a full hearing" (para 9).

[25] The Employment Judge recognised that Mr Brown might have evidence that could assist the respondent, but he discounted it for reasons that her Ladyship found to be inadequate (para 9). He had paid no more than lip service to the principle that striking out the claim was a draconian measure. There were plainly issues between the parties that could not be resolved by looking at the documents (para 10). Her Ladyship was concerned that the application to strike out seemed to be an effort to circumvent a full hearing (para 11). She was further concerned by the fact that the Employment Judge sitting alone had reached a view on whether the dismissal was within the range of reasonable responses open to the appellant. That was a matter that required to be judged by an Employment Judge sitting with two lay members. The Employment Judge had overlooked this (para 12).

Grounds of appeal to this court

[26] The appellant submits that the EAT failed to identify any error of law made by the Employment Judge. An appeal to the EAT lies only on a point of law (para 1.1). The Employment Judge's decision was permissible given the circumstances of the case (para 1.2). His setting out of certain details in a section entitled "Facts" was unobjectionable where those facts were uncontroversial (para. 1.3).

[27] The ratio decidendi of the EAT's decision would require the ET either to have a full hearing whenever there was a factual dispute or to take the employee's claim pro veritate. This was contrary to Ezsias v North Glamorgan NHS Trust ([2007] ICR 1126) (paras 2.1-2.3, 3.1).

[28] It was permissible for the Employment Judge, though sitting alone, to assess the respondent's prospects of showing that the dismissal was outwith the band of reasonable responses. The respondent had elected not to give evidence at the pre-hearing review and had not requested a hearing before a full tribunal (para 3.2).

Conclusions

[29] The power of the ET to strike out a claim at a pre-hearing review may be exercised only where the ET determines that the claim "has no reasonable prospect of success" (Rule 18(7)(b), supra). Even if the Tribunal so determines, it retains a discretion not to strike out the claim.

[30] Counsel are agreed that the power conferred by Rule 18(7)(b) may be exercised only in rare circumstances. It has been described as draconian (Balls v Downham Market High School and College [2011] IRLR 217, at para 4 (EAT)). In almost every case the decision in an unfair dismissal claim is fact-sensitive. Therefore where the central facts are in dispute, a claim should be struck out only in the most exceptional circumstances. Where there is a serious dispute on the crucial facts, it is not for the Tribunal to conduct an impromptu trial of the facts (ED & F Mann Liquid Products Ltd v Patel (2003) CP Rep 51, Potter LJ at para 10). There may be cases where it is instantly demonstrable that the central facts in the claim are untrue; for example, where the alleged facts are conclusively disproved by the productions (ED & F Mann Liquid Products Ltd v Patel, supra; Ezsias v North Glamorgan NHS Trust, supra). But in the normal case where there is a "crucial core of disputed facts," it is an error of law for the Tribunal to pre-empt the determination of a full hearing by striking out (Ezsias v North Glamorgan NHS Trust, supra, Maurice Kay LJ, at para 29).

[31] The respondent submits that there are factual disputes on the questions whether the evidence gathered by the investigating officer was withheld from him; whether the appellant failed to follow up on matters that he had raised in the disciplinary proceedings; whether the accident constituted gross misconduct; whether in the assessment of the degree of misconduct, if there was any, the cost of the damage done was the relevant measure; and whether there were other drivers who had had accidents or had committed disciplinary offences and had not been dismissed. On the papers that are before us, it is obvious that all of these are live issues. I would add that it appears that the significant questions whether the diverted route was properly brought to the respondent's notice and whether the respondent was innocently misled by what John Brown told him are also in dispute.

[32] The existence of these factual issues sufficiently demonstrates, in my opinion, that the respondent's claim can be properly resolved only by a hearing before a full tribunal.

[33] The central questions for the ET will be whether in all the circumstances the occurrence of the accident demonstrated gross misconduct on the part of the respondent and whether in all the circumstances, including his previous work record, the sanction of dismissal was reasonable. In considering these questions the Tribunal will have to assess both the substantive issues attending the occurrence of the accident and the fairness of the procedures by which the decision to dismiss was reached (British Home Stores Ltd v Burchell [1980] ICR 301; Iceland Frozen Foods Ltd v Jones [1983] ICR 17; Foley v Post Office; HSBC Bank v Madden [2000] IRLR 827; Employment Rights Act 1996, s 98(4), supra).

[34] It is quite clear, in my view, that the Employment Judge was not entitled to take it upon himself to strike out the respondent's claim. In his conclusion, which I have quoted, he says that his decision is based on "the information that I have before me at present" (supra). In my view, he should have considered whether a full Tribunal conducting a formal hearing into the claim might have fuller information before it than he had. In my view, the Employment Judge made a serious error in deciding the matter as he did. Lady Smith was right in setting the decision aside.

[35] Counsel for the respondent took the point that the respondent was denied a fair hearing before the Employment Judge and therefore that his rights under article 6 of the Convention were infringed. It is unnecessary for us to consider this point. It adds nothing to the case.

Disposal

[36] I propose to your Ladyship and to your Lordship that we should refuse this appeal, adhere to the decision of the EAT and remit the case to the ET for a full hearing on the merits of the claim. In the circumstances, the Employment Judge whose decision we have considered should not be a member of the Tribunal that hears the case.

SECOND DIVISION, INNER HOUSE, COURT OF SESSION
Lord Justice Clerk Lady Paton Lord Drummond Young	[2012] CSIH 46 XA132/11 OPINION OF LADY PATON in the Appeal from the Employment Appeal Tribunal by TAYSIDE PUBLIC TRANSPORT COMPANY LIMITED (t/a TRAVEL DUNDEE) Appellant; against JAMES REILLY Respondent: _______

For the appellant: Hay; Balfour and Manson LLP (for Muir Myles Laverty, Dundee)

For the respondent: Cameron; Biggart Baillie LLP (for Ford & Warren, Leeds)

30 May 2012

[37] I agree with your Lordship in the chair and have nothing to add.

SECOND DIVISION, INNER HOUSE, COURT OF SESSION
Lord Justice Clerk Lady Paton Lord Drummond Young	[2012] CSIH 46 XA132/11 OPINION OF LORD DRUMMOND YOUNG in the Appeal from the Employment Appeal Tribunal by TAYSIDE PUBLIC TRANSPORT COMPANY LIMITED (t/a TRAVEL DUNDEE) Appellant; against JAMES REILLY Respondent: _______

For the appellant: Hay; Balfour and Manson LLP (for Muir Myles Laverty, Dundee)

For the respondent: Cameron; Biggart Baillie LLP (for Ford & Warren, Leeds)

30 May 2012

[38] For the reasons given by your Lordship in the chair I agree that this appeal should be refused.