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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Patel v Hi-Way Hifi Ltd [1994] UKEAT 801_92_1204 (12 April 1994)
URL: http://www.bailii.org/uk/cases/UKEAT/1994/801_92_1204.html
Cite as: [1994] UKEAT 801_92_1204
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At the Tribunal
Before
THE HONOURABLE MR JUSTICE MORISON
MISS J W COLLERSON
MRS P TURNER OBE
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellant MR J CHHOTU
(OF COUNSEL)
Messrs Ved & Co
79A High Road
Willesden
London NW10 2SU
For the Respondents MR A SZERARD
(OF COUNSEL)
Messrs Hugh Cartwright &
Amin
45 Russell Square
London WC1B 4JP
MR JUSTICE MORISON: The Tribunal had an opportunity of considering this matter and I propose to give an ex-temporare judgment of the Employment Appeal Tribunal and as is my practice, whenever I give an ex-tempore judgment I tell the parties that I reserve the right to add to, alter, vary or otherwise generally try and improve the language with which I seek to express this, our decision.
This is an appeal against a unanimous decision of an Industrial Tribunal held at London (South) on 4 days between 24 April and 4 August 1992. The decision was reserved and is in writing dated 28 September 1992, when it was entered on the register. The Tribunal was chaired by Mr Mostyn a full time chairman, who has since retired. The essence of the decision is as follows.
Firstly, the Appellant was dismissed on 30 September 1991 (paragraphs 10 and 13) on the grounds of the Appellant's alleged misconduct, namely during his employment running a private business which was, without satisfactory explanation to the contrary, apparently embarrassingly similar to or competing with that of the Respondents. Secondly, the dismissal was unfair in that the reason for it was not a sufficient reason because the employers did not have reasonable grounds for believing that the Appellant was running such an embarrassingly similar or competing business because they took the decision to dismiss without adequate investigation, or in accordance with proper procedure (paragraph 23). Thirdly, the Appellant was largely responsible for his own dismissal because he was less than frank when discussing his own business interests and failed to tell the whole truth about it (paragraph 24). His degree of blame was assessed at 75%. Fourthly, on 10 October 1991, during an interview with a senior director of the Respondents, but before a letter of dismissal was handed to him, he was offered reinstatement provided he undertook to wind up his private business within one month and promised not to conduct any private business whilst in their employ (paragraphs 12 and 25).
The offer of reinstatement together with a payment of £2,000 was allegedly repeated on the first day of the Tribunal Hearing. It seems to us that it would be inappropriate for this
Employment Appeal Tribunal to place any reliance on negotiations towards a settlement which did take place whilst the Tribunal was sitting. It seems to us, broadly speaking, that a Tribunal should not draw inferences adverse to either party where negotiations take place during the course of a hearing which are reported to the Tribunal as they progress. Accordingly we approach this appeal on the basis that we shall concentrate only on the events which occurred prior to the date of the hearing.
It was held by the Tribunal that the failure to accept reinstatement was a total failure to mitigate which disentitled him to any compensatory award (paragraphs 20, 21 and 25). Finally, he was not entitled to any basic award because he had unreasonably refused an offer of reinstatement (paragraph 26). It was held by the Tribunal that he was entitled to 10 weeks net pay amounting to £1,938 being calculated as the money in lieu of notice.
The Appellant appeals from that decision and makes the following points:
Firstly, in relation to the finding of 75% contributory fault in paragraph 24, he says
(1) there was no evidence to support the findings to the effect that the Appellant had concealed the fact that he had his own business or that he had denied that he had his own business and (2) Tribunal were wrong to blame the Appellant for failing to put his employers' minds at rest by spelling out in detail what his business interests were, having regard to their findings in paragraph 16 that he had not been given advance information about the reasons for his interview or of the charge he would have to face or given time to prepare a defence or offered a representative or informed of his right of appeal.
Secondly, as regards the finding that he failed to mitigate his loss
it is said (1) that the Appellant was not offered true re-instatement at the hearing, merely the offer of a new contract with loss of intervening salary and a loss of accrued status;
(and we have indicated we shall not pay any regard to what happened at the hearing) and (2) the Tribunal were wrong to conclude that the Respondents were reasonably entitled to ask the Appellant to give up his private business.
On 9 November 1992 this Court received a Notice of Appeal lodged by the Appellant's solicitors and as it appeared that the matters raised in it might not give rise to any arguable grounds of appeal, the matter was listed for an ex parte preliminary hearing. This came before the Court on 25 February 1993 and it was ordered that the appeal should proceed and the Chairman's Notes of Evidence be called for. The Notes were provided on 23 November 1993 but the Appellant believed that they were defective. The essence of the complaint is that the Chairman has not accurately recorded the discussions which took place regarding the possible settlement of his complaint of unfair dismissal; in particular he (the Chairman) wrongly believed that an offer of re-instatement had been made when it had not been. The Appellant made an application to this Court which came before the President on 18 March 1994. Amongst other things, the Appellant asked, through Counsel, for an opportunity to look at the Chairman's original Notes. The President refused that application and he gave certain directions. The Appellant subsequently filed an affidavit setting out his version of what happened at the Tribunal.
In his affidavit, which was sworn on 29 March 1994, the Appellant says at paragraph 25:
"In the circumstances, I would urge this Honourable Court to obtain the Members' notes to see if they could corroborate what I have written above and the Notes of [Counsel]."
The affidavit refers also to notes taken by the associate and asks that they should be disclosed. The Regional Office of the Industrial Tribunal has indicated that as the Chairman has transcribed his Notes and signed them the matter should be allowed to rest unless this Court were to order otherwise.
When the matter came before us we were not invited to make any order for disclosure of the Notes referred to. However, for the record, we should say that had such an application been made it would have been dismissed on the basis that it is misconceived. Firstly, we do not consider that any further material would assist us in determining the outcome of this appeal. Secondly, the Rules provide for the Notes of Evidence to be made by the Tribunal Chairman, and by no-one else. Although Members may, and often do, make their own notes during a hearing, those notes are private notes which are not intended to and do not form part of the record of the proceedings and there is no power to order their disclosure. The same applies to any notes made by the associate.
The Rules place upon the Chairman's shoulders the exclusive burden of making an accurate record of the proceedings. Where they form part of the record in this Court, parties may of course, seek to interpret them as they consider appropriate. In cases where there is a challenge to the accuracy of the Chairman's Notes, this Court, in the case of Dexine Rubber Company Ltd v Alker [1977] ICR 434 page 438 has laid down a recommended procedure for what should happen which involves Counsel for the party alleging error in the Notes contacting the opposing Counsel, where Counsel have been acting, and seeking agreement as to a proper correction of the Chairman's Notes. Thereafter the matter should be submitted to the Industrial Tribunal Chairman for him to consider the question and make such alterations or corrections as he thinks appropriate or such other comments as he wishes to do so. If the Chairman is satisfied that his Notes were accurate that is then an end of the matter.
That procedure was not followed in this case. For reasons which we fully understand in terms of acquitting Counsel of any kind of improper conduct, he did not have time to notify his opponent of the corrections he wished to make; instead he referred the matter directly to the Tribunal sending a copy of the affidavit setting out the corrections that should be made to the other side. Counsel for the Appellant received a response from the Industrial Tribunal Chairman to the effect that I have already indicated in this judgment but he does not wish to continue with his application for disclosure of the Notes made by the lay members or by the associate. The reason for this is that the Chairman has since retired, that is since the date when he had certified his Notes as being accurate and it is regrettable to say no more that the matter should have been left outstanding from the date which I have given in November 1993 to March 1994 before the question of the accuracy of the Notes was raised.
We must make it clear for the future that there is no power given to this Court to go behind the Notes certified as accurate by the Chairman subject to the procedure that I have already indicated. In the extremely unlikely event that a Chairman has been guilty of improper conduct then no doubt the Courts would take appropriate action to remedy such a situation. In this case we see no grounds for believing that the Chairman has been guilty of any impropriety in the way in which he performed his duties. His Notes are clear and appear to be complete. Further, we see no grounds for thinking that the Notes signed by the Chairman do not provide a fair and accurate record of what happened, although, I repeat, for our part, we prefer to consider only the events prior to the hearing itself.
We turn therefore to the appeal and the grounds for it which have been amplified by a further amended Notice of Appeal filed on 25 March 1994. We have to say that we have some concern as to the use of the word "reinstatement" in the Decision and the possibility that there may have been some confusion between that and the concept of re-engagement. Although we have some misgivings about the terms in which this decision has been made, broadly we are of the view that the appeal cannot succeed.
There was in our view evidence before the Tribunal which entitled them to find as a fact, that the Appellant had been engaged in a business which was sufficiently similar in the absence of a satisfactory explanation, to raise a doubt in the minds of the employers which they were entitled to resolve by requiring an appropriate undertaking. Secondly, it is plain that there was evidence on which the Tribunal could conclude that the Appellant had been less than frank about his involvement in that business. In the first place there was evidence that he had denied that he was involved in any private business yet on his own admission he had been so engaged for at least 9 months. Secondly the Tribunal were right to be sceptical about the Appellant's evidence that the description on his private company's invoice "Car Radio and Telephone Consultants" was wrong (paragraph 19). Thirdly, even on the Appellant's own admissions under cross-examination his private company competed to some extent with the business of the Respondents. In those circumstances we do not think it unreasonable for the Tribunal to take the view that the offer of reinstatement made on 10 October 1991 was reasonable subject as it was to the condition that he should give up such business.
Paragraph 25 of the decision reads as follows:
"He had also been offered and refused reinstatement on the terms proposed by Mr N Mehta on 10 October. We find that those refusals [and we include only the refusal on 10 October] were unreasonable and constituted a total failure to mitigate since we find, for the reasons mentioned in the last paragraph, that the Respondents could reasonably in the circumstances have required the Applicant to give up his private business in the absence of adequate explanation by him to convince them that he was not in competition. Moreover, his refusal to accept other employment because he had too much on his mind, or to work for P.T. [the private company of the Appellant] at a salary as he told us he could have done had he wished, adds to his failure to mitigate. We find therefore that the Applicant is entitled to no compensatory award save as mentioned below."
It seems to us that subject to the point which we will make in a moment about the last sentence of that paragraph, there is nothing in the arguments which have been raised before us to lead us to suppose that the Tribunal have misdirected themselves in law. That was a finding of unreasonable behaviour on the part of the Applicant which the Tribunal was entitled to make on the basis of the evidence which they had heard.
Having reached that decision the Tribunal was, we believe, entitled first to regard the secrecy and lies about the business as being a contributory factor in the dismissal. Even if, on 30 September, the date of dismissal, the Appellant was taken by surprise, by the time of the meeting on 8 or 10 October the Appellant was perfectly well aware of what the employer's concerns were. It seems to us that what the Tribunal has said on this topic in paragraph 24 of their decision is a finding which they were entitled to make on the evidence before them. I read:
"Nevertheless, we find that Mr Patel knew his employers would object to him competing with them. The two businesses had much in common and the Applicant could have put the respondents' fears at r est by spelling out in detail and providing documentary evidence in support, the precise differences between what the Respondents sold and what the private business transacted, but we find that not only did he not do so but he both concealed the fact and denied that he had his own business, thereby inflaming the Respondents' suspicions. We find that this behaviour resulted in him contributing to his dismissal to the extent of 75%."
It seems to us the question as to whether there has been contributory fault on the part of the employee is essentially a question of fact and as to the percentage of contributory fault that in our view is entirely a matter for the Industrial Tribunal which this Court will only interfere with in the most extreme of cases. We say that for the very good reason that section 74(6) expressly imposes on the Industrial Tribunal the task of deciding whether the dismissal was to any extent caused or contributed to by any action of the complainant, and shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding. That leaves the matter very much in the hands of the Industrial Tribunal and as we have already observed, this was a unanimous decision.
Accordingly, in relation to the appeal on the question of contribution, we think that there are no grounds in law for disturbing the findings made by the Industrial Tribunal.
As to the complaint about the Tribunal's decision on mitigation of damage we can see no reason why the Tribunal should not have concluded as they did, that the Appellant was being foolhardy and unreasonable in not accepting the offer of reinstatement when it was made within 10 days after the dismissal. The Appellant's only reason for refusal was rejected as being unsatisfactory by the Tribunal who were uniquely placed to weigh the respective merits. Again, it is clear from the wording of the Act that the question as to mitigation is a matter entirely for the Industrial Tribunal. That raises questions of fact. The Tribunal were apparently given the benefit of submissions on behalf of the Appellant to the same effect as we have had and must have had very well in mind the submissions which had been made on behalf of the Appellant in this Court. The conclusion that they reached, namely that there had been total failure to mitigate because there had been an unreasonable refusal of the offer of reinstatement was a finding which was very much a matter for the Tribunal to make and we see nothing wrong in principle or in law with the finding.
The final point which caused us some misgivings is this. The Tribunal, having reached the conclusions they did then applied their minds to the question as to whether there should be any basic award. Again the terms of the Act put the matter within the hands of the Industrial Tribunal for them to decide by a reference to what it considers just and equitable. They applied their minds to this question and concluded that because of the failure to accept the offer of reinstatement the Appellant had been unreasonable in his behaviour and they concluded that it would not be just and equitable for him to receive a basic award at all. Having arrived at that conclusion and having come to the conclusion which we have already indicated, as set out in paragraph 25, one might ask the question as to how it came about that he was awarded 10 weeks pay in lieu of notice.
It seems to us that logically the Tribunal were not in a position to arrive at that conclusion in the light of the findings which they had previously arrived at but insofar as that that may represent an error of law, it is of course an error in favour of the Appellant rather than to his detriment and no cross-appeal has been filed in this case. Accordingly, in these circumstances although we agree that there are matters which give rise to legitimate criticism of the Industrial Tribunal's decision, in the end we are not persuaded that there is any point of law which arises on this appeal and we are not persuaded that the Tribunal have erred in any way on a point of law. Accordingly we dismiss this appeal.