United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 1163_94_1810

Appeal No. EAT/1163/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 18 October 1995

Judgment delivered on 27 November 1995

HIS HONOUR JUDGE CLARK

MR J A SCOULLER

MR P M SMITH

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BOYS AND GIRLS WELFARE SOCIETY          APPELLANTS

MR D MCDONALD          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR NIGEL GRUNDY

(of Counsel)

Messrs Addleshaw Sons &

Latham

Dennis House

Marsden Street

Manchester

M2 1JD

For the Respondent MR BRENDAN ANDERSON

(of Counsel)

Messrs Keogh Johnson

Meadow Court

Meadow Street

Northwich

Cheshire

CW8 5EJ


 


JUDGE CLARK: On 18 October 1995 we heard argument in this appeal and indicated that we would allow it. We now give our reasons for that decision. This is an appeal by the Boys and Girls Welfare Society ("the Society") against a reserved unanimous decision of the Manchester Industrial Tribunal chaired by Mr E.T.Connolly, reached after a four-day hearing and entered on the register on 11 October 1994, that the Respondent, Mr McDonald, had been unfairly dismissed by the Society.

The Society is a registered charity. It employed the Respondent from 1 October 1989 until his dismissal effective on 12 July 1993 as a residential social worker at their residential children's home, Lockhart House, in South Manchester.

The facts are fully set out in the Industrial Tribunal's extended reasons. What follows is merely a summary of those facts in order to provide a basis for our consideration of the issues of law raised in this appeal.

It was common ground between the parties that most of the young people placed at Lockhart House came from difficult backgrounds and presented with extreme behaviourial difficulties.

Recognising that fact, the Society published a lengthy document headed "Statement of Purpose and Function for Lockhart House". That statement forbids the use of corporal punishment, as defined, and as the Tribunal observed, the Society's internal disciplinary procedure contain a statement that all employees were reminded that the children in the Society's care might not always behave in ways normally to be expected of children and therefore the highest standards of personal control would be required of all staff at all times.

On Saturday, 26 June 1993, an incident occurred involving the Respondent and a 15 year old boy, referred to as NH, who was then a resident at Lockhart House. NH gave his account of the incident to a key worker, Peter Davidson, on the morning of 28 June 1993. So far as is material Mr Davidson recorded NH's complaint in writing in these terms:

"NH stated that the incident took place around the lounge door at Lockhart House. Other residents present were AR who was sitting on the stairs and BB who was in the hallway, discharging a fire extinguisher. NH said BB then threw the extinguisher at the wall, and that he was laughing at him. NH said that the Respondent, the member of staff present at the time, picked up the extinguisher and discharged it in BB's face, saying `oops, I'm so sorry'. NH objected to this action and told the Respondent that he was `tight'. The Respondent then replied to NH `you're nothing but scum'. NH feels this was a reference to NH shooting a bird with an air gun. The Respondent then spat in NH's face. NH spat back at the Respondent. The Respondent then spat at NH and again NH spat back at him. The Respondent then punched NH in the eye, pushing his middle knuckle into his face."

Another member of staff, Julie Johannessen, was present at the time of the incident. She provided a written statement as follows:

"The Respondent took the fire extinguisher (from BB) and as he walked past BB, the extinguisher was released into BB's face. At this point there was an incident between the Respondent and NH. NH accused the Respondent of spitting at him and NH went to spit back, they both had their backs to me but I did see the Respondent raise his hand and catch NH in the face, I assume this was to protect himself from being spat at, NH's face was red on one side and his eye was watering, he accused the Respondent of punching him which is not true he did not punch him, but the back of his hand did catch NH's face ... ."

The Respondent was asked to give his account by Daniel Tuohy. In a written note made on 28 June Mr Tuohy records the Respondent as saying:

"However, the Respondent did confirm that he spat in NH's face after NH had spat in his face, and he enjoyed every minute of it. I said to the Respondent that albeit with provocation, this was not the professional behaviour we would expect from a member of our staff, and that I had no alternative but to suspend him from duty, pending an investigation."

The Respondent was accordingly suspended and an internal disciplinary hearing was held on 12 July 1993. During the course of that hearing the Respondent gave a further account of the incident. He accepted that he had agreed that he had spat in a child's face, however he said that he could have lied about that at the time but did not. He told the truth instead which had got him suspended. A series of questions were put to the Respondent. He was asked if he had spat in the child's face to which he replied that he only spat in his direction not directly at him. He was asked if he had punched NH in the face and replied that he had only pushed NH's head away to stop him from spitting at him. He thought he may just have caught him. He totally denied the allegation that he had punched NH in the eye pushing his middle finger into his face. He went on to say that NH spat at him approximately five times whilst the Respondent had his back to the wall and could not get away and that in order to defend himself the only thing he could do was to move NH's head. The Respondent further said that some of NH's spittle went into his mouth, he moved back to remove it from his mouth and he had no other option but to spit to get rid of it as he did not wish to swallow it.

Following that hearing the Disciplinary Panel wrote to the Respondent on 12 July 1993 setting out its findings and conclusions. That letter records:

"The Panel finds that you breached the Society's Disciplinary Rules 5.2.(d) and 7.1., that you spat at a young person in your charge and caught him in the face with your hand. The Panel considered that this behaviour was likely to bring the Society and its services into disrepute (5.3.(i)). The Panel's final determining was influenced by your previous disciplinary record with the Society, culminating in the final written warning on 16.7.92. The Panel considered that despite the mitigating circumstances which you outlined, such behaviour towards a young person in your care was totally unacceptable.

The Panel decided it had no option but to take the most serious view of your conduct in this matter and recommended that you be dismissed from the Society's employment. ... ."

The Respondent was reminded of his right of appeal. He exercised that right. Following a hearing held on 11 September 1993, that appeal was dismissed by letter dated 12 September.

Against that background the Industrial Tribunal came to consider the questions raised by section 57 of the Employment Protection (Consolidation) Act 1978 ("the Act"). The first question was whether the Society had shown a reason for dismissal falling within section 57(1) or (2) of the Act. In paragraph 9 of their reasons the Industrial Tribunal observes correctly that the onus of proving a reason lies on the employer and concludes:

"9. ... We were satisfied that the reason for dismissal was because the respondents' management believed that the applicant, whilst on duty, had spat at a young person in the respondents' charge and had also caught him in his face with his hand. This was clearly a reason relating to conduct which is one of the reasons set out in section 57 of the 1978 Act as being a reason which can justify the dismissal of an employee. The respondents had therefore discharged the burden referred to earlier, ie they had shown that their reason for dismissal was a potentially fair reason."

We pause to observe that the Industrial Tribunal here accepts the set of facts given by the Disciplinary Panel in their letter of 12 July 1993 as the reason for dismissal. That panel's findings are based on the account given by the Respondent and not the alleged punch complained of by NH.

In paragraph 10 of the reasons the Industrial Tribunal sets out in full the provisions of section 57(3) of the Act, as amended by section 6 of the Employment Act 1980, which has been in force in relation to dismissals taking effect since 1 October 1980.

Then at paragraph 11 the Industrial Tribunal set out their findings as to reasonableness under section 57(3) of the Act. It is on that paragraph of the Industrial Tribunal decision that the issues raised in this appeal are focused. We set it out in full.

"11. Whilst we were satisfied that the respondents' management, and also the appeal panel which dealt with this appeal against dismissal, genuinely believed that the applicant was guilty of the above-mentioned conduct we were also satisfied that they did not have reasonable grounds for their belief and that they had not conducted a reasonable investigation of the matter. It was clear to them, ie the respondents' management, when the applicant was suspended that a serious incident had taken place involving two young persons at the home (one of whom subsequently made the allegation against the applicant) and for which these two young persons were responsible. However this young person had not been interviewed by any members of the disciplinary panel or the appeal panel but had answered questions put to him by a key-worker which were then embodied in a written statement prepared by the key-worker. We were satisfied that this was not an investigation of the matter such as any reasonable employer would have conducted. We were also satisfied that any reasonable employer, taking into account the potential serious consequences for the applicant, would have questioned this person about the allegations he had made or caused the officer who had suspended the applicant to do so. We were further satisfied that on the evidence before the Disciplinary Panel and the Appeal Panel any reasonable employer would have considered that the applicant had suffered extreme provocation on the day of the incident and that what he had done by way of spitting in the direction of this young person had merely been a reactive step on his part to get rid of the spittle which had landed upon him when this young person had spat on him and that he had not assaulted this young person. We were satisfied that no reasonable employer, charged with the similar responsibilities which the respondents have, would have taken the view that the applicant was guilty of blameworthy conduct in the circumstances of this case and that his statement that he had `enjoyed every minute of it' when interviewed about the matter had merely been said at a time when he was overwrought and had been on duty for some considerable time. We were satisfied that in the circumstances, having regard to equity and the substantial merits of the case, and taking into account the size of their undertaking and administrative resources the respondents acted unreasonably in treating their reason as a sufficient reason for dismissal. We therefore found that the applicant had been unfairly dismissed."

Mr Grundy, appearing on behalf of the Society, attacks the Industrial Tribunal's findings in paragraph 11 of their reasons under four separate, but overlapping heads. First he says that the Industrial Tribunal has placed the onus of proof on the employer to show that it has acted reasonably for the purposes of section 57(3) when, as a consequence of the amendment effected by section 6 of the Employment Act 1980, the burden of proof is neutral. Second, he submits that the Industrial Tribunal is guilty of a slavish application of the Burchell test; third, he says that the Industrial Tribunal has substituted its own view of the facts for that of management; finally he contends that the Industrial Tribunal has failed to ask itself whether dismissal in this case fell within the range of reasonable responses open to the employer. In reply Mr Anderson principally relies upon the reasoning of the Industrial Tribunal and contends that this was a conclusion open to a reasonable Industrial Tribunal based on the findings of fact which this Industrial Tribunal was entitled to make.

In order to properly evaluate these rival contentions we first remind ourselves what we take to be a correct statement of the law applicable to that most basic provision in employment legislation, section 57(3) of the Act.

The Test of Reasonableness

One starting point is the oft-cited "Burchell test". British Home Stores Ltd v Burchell [1980] ICR 303 (Note) was decided by this Appeal Tribunal (Sir John Arnold presiding) on 20 July 1978. Although earlier reported in the Industrial Relations Law Reports it came to prominence after being cited with approval by the Court of Appeal in W Weddel & Co v Tepper [1980] ICR 286, see per Stephenson L.J. at page 296G and Cumming-Bruce L.J. at page 301H - 302F. The decision in Burchell was consequently published as a Note following the report of Weddel in the Industrial Cases Reports and has since come to be regarded as the leading authority on section 57(3) of the Act.

The three-fold Burchell test is set out at page 304C-E in these terms:

"What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further."

Whilst accepting unreservedly the importance of that test, we consider that a simplistic application of the test in each and every conduct case raises a danger of Industrial Tribunals falling into error in the following respects.

(1) The Burden of Proof

Burchell itself was decided on the provisions of paragraph 6(8) of the First Schedule to the Trade Union and Labour Relations Act 1974, which provided that the question of reasonableness:

"shall depend on whether the employer can satisfy the tribunal that in the circumstances (having regard to equity and the substantial merits of the case) he acted reasonably in treating it as a sufficient reason for dismissing the employee."

That wording was reproduced in the 1978 Act as originally drafted.

The amendment to section 57(3) affected by section 6 of the Employment Act 1980 produced the following wording:

" ... The determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether in the circumstances ... the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case."

Thus, as a result of the 1980 amendment, it was no longer necessary for the employer to satisfy the Tribunal that it had acted reasonably. The burden of proof on the employer was removed. The question was now a "neutral" one for the Industrial Tribunal to decide.

The risk that by following the wording of Sir John Arnold's test in Burchell a Tribunal may fall into error by placing the onus of proof on an employer to satisfy it as to reasonableness is not confined to Industrial Tribunals. In Post Office (Counters) Ltd v Heavey [1990] ICR 1, this Appeal Tribunal, presided over by Wood J, reviewed the legislative history and observed at page 5F - G:

"As the Court of Appeal has indicated on many occasions, the correct direction for an industrial tribunal to give themselves is to use the actual wording of the statute, and to remind themselves that there is no burden of proof on either party. A `neutral' issue is indeed strange to those brought up with our adversarial system. It is not for the employer `to show,' nor for the tribunal `to be satisfied' - each of which expressions indicate the existence of a burden of proof."

In the next paragraph of the judgment, Wood J, acknowledges that it is all too easy to fall into the trap of applying the wrong burden of proof, as the Appeal Tribunal did in Inner London Education Authority v Gravett [1988] IRLR 497, at paragraph 14 of that judgment.

Other examples exist. We note that Linfood Cash & Carry Ltd v Thomson and Others [1989] ICR 518 (EAT Wood J, presiding), a guideline case on the correct approach to be taken by employers when relying on material obtained from informants who wish to remain anonymous, and which emphasises the need for Industrial Tribunals to avoid substituting their view of the facts for the view reasonably reached by the employer, concludes with these words, having earlier set out the Burchell test, at page 524E:

"... In the present appeal the industrial tribunal found that the employers had failed to satisfy them upon the Burchell test and we can find no flaw in the reasoning of the tribunal. ... ."

A member of the present Appeal Tribunal, Mr Scouller, also sat on the case of Linfood. Without in any way wishing to otherwise detract from the correctness of the Linfood decision, we observe that in the sentence above-cited that appeal tribunal fell into the trap of placing the onus of proof on the employer which was correctly stated in the Burchell case, but now no longer applies.

(2) Universal Application of the Burchell Test

Setting aside the question of onus of proof, it is apparent that the three-fold Burchell test is appropriate where the employer has to decide a factual contest. The position may be otherwise where there is no real conflict on the facts. In Royal Society for the Protection of Birds v Croucher [1984] ICR 604, a decision of the Employment Appeal Tribunal presided over by Waite J, the employee was suspected of dishonesty in relation to reimbursement of private petrol use by way of false expenses claims. He admitted the offences but said by way of mitigation that on earlier occasions he had omitted to claim genuine expenses. The Industrial Tribunal, applying the Burchell test, concluded that the employer had failed to carry out sufficient investigation and that the dismissal was unfair. On appeal the Employment Appeal Tribunal held that, the employee having admitted the misconduct, there was little scope for further investigation and reversed the Industrial Tribunal's finding of unfairness. At page 611G - 612C Waite J said:

"It is difficult to escape the impression that the source of error in the present case may have been their evident view that the test in British Home Stores Ltd v Burchell (Note) [1980] ICR 303, 304, was one which fell to be applied automatically whenever reasonableness was in issue, at all events in cases of dishonesty, for the purposes of assessing whether a dismissal had been fair under section 57(3). The Burchell case, it will be remembered, was a case which concerned instances in which there has been a suspicion or belief of the employee's misconduct entertained by the employers. Here there was no question of suspicion or of questioned belief: there the dishonest conduct was admitted. There was very little scope, therefore, for the kind of investigation to which this appeal tribunal was referring in Burchell's case; investigation, that is to say, designed to confirm suspicion or clear up doubt as to whether or not a particular act of misconduct has occurred. So we think that this may perhaps be another case where an industrial tribunal has fallen into error by a misplaced and artificial emphasis upon the guidelines in the Burchell case, something to which this appeal tribunal had recent occasion to refer in Lintafoam (Manchester) Ltd v Fletcher, The Times, 12 March 1984.

We repeat what we said then. The Burchell case remains, in circumstances akin to those that there were there under consideration, a most useful and helpful guideline; but it can never replace the soundness of an appraisal of all the circumstances of each particular case viewed in the round in the way that section 57(3) requires them to be viewed."

(3) The Range of Reasonable Responses Test

It should always be remembered that at the conclusion of the three-fold test in Burchell Sir John Arnold observed that it is the employer who manages to discharge the onus of demonstrating those three matters, who must not be examined further. See [1980] ICR 304C. Leaving aside the onus of proof, we do not understand Sir John Arnold to be saying that the converse is necessarily true; that is to say, an employer who fails one or more of the three tests is, without more, guilty of unfair dismissal. In British Leyland UK Ltd v Swift [1981] IRLR 91, the Court of Appeal formulated the range of reasonable responses test. At paragraph 11 of the Court's judgment Lord Denning MR said this:

"... It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view: another quite reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on. Both views may be quite reasonable. If it was quite reasonable to dismiss him, then the dismissal must be upheld as fair: even though some other employers may have not dismissed him."

The test was further formulated by the Employment Appeal Tribunal in Iceland Frozen Foods Ltd v Jones [1983] ICR 17, 24G - 25A:

"Since the present state of the law can only be found by going through a number of different authorities, it may be convenient if we should seek to summarise the present law. We consider that the authorities establish that in law the correct approach for the industrial tribunal to adopt in answering the question posed by section 57(3) of the 1978 Act is as follows:

(1) the starting point should always be the words of section 57(3) themselves;

(2) in applying the section an industrial tribunal must consider the reasonableness of the employer's conduct, not simply whether they (the members of the industrial tribunal) consider the dismissal to be fair;

(3) in judging the reasonableness of the employer's conduct an industrial tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;

(4) in many, though not all, cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another;

(5) the function of the industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it is unfair."

The desirability of Industrial Tribunals demonstrating by their written reasons that they have applied their minds to the range of reasonable responses test is illustrated by the judgment of the Scottish Court of Session in Conlin v United Distillers [1994] IRLR 169.

At paragraph 6 of the judgment Lord Ross put the matter in this way:

"Miss Dorrian (Counsel for the employee) accepted under reference to Iceland Frozen Foods Ltd v Jones [1982] IRLR 439 and Scottish and Newcastle Beer Production Ltd v Cannon EAT 254/90, that what the Industrial Tribunal required to do was to consider whether, in the circumstances of the case, dismissal fell within the range of responses open to a reasonable employer. The Employment Appeal Tribunal came to the conclusion that the Industrial Tribunal's statement of reasons did not indicate that they had applied that test. In reaching that conclusion, the Employment Appeal Tribunal appreciated that an express reference to s.57(3) of the Employment Protection (Consolidation) Act 1978 may not always be essential. They stated:

`Failure to make such express reference may not always amount to a fatal flaw in the decision of an Industrial Tribunal; we would be reluctant to say that there is some formula which must always appear in a decision on a matter of this kind. There may be cases in which it is possible to tell from the reasoning of the Industrial Tribunal, taken as a whole, that the correct test has been applied, notwithstanding the absence of express reference to it, just as there are cases in which it can be seen that although the Industrial Tribunal have expressed the correct test, they have failed to apply it. Nevertheless, it is essential that it should be apparent from the decision of the Industrial Tribunal that the correct test has been identified and applied.'

In Scottish and Newcastle Beer Production Ltd v Cannon, the Employment Appeal Tribunal emphasised that unless the Industrial Tribunal does refer to s.57(3) or at least summarise the wording, the Employment Appeal Tribunal may have difficulty in concluding that the Industrial Tribunal has applied its mind to the statutory requirements. That is no doubt so, and we agree with what the Employment Appeal Tribunal have said regarding this matter in this case. In the course of their decision the Employment Appeal Tribunal has quoted the reasons which the Industrial Tribunal gave for their decision. We agree that the Industrial Tribunal appear not to have applied the correct test. There is nothing in their decision to indicate that they ever applied their minds to the question of whether the dismissal of the appellant fell within the range of responses open to a reasonable employer. Having regard to what they do say, it appears to us that what the Industrial Tribunal have done is simply to express their own opinion upon the question of whether the dismissal was unfair. That being so, we are satisfied that the Employment Appeal Tribunal were well-founded in concluding that the appeal against the decision of the industrial tribunal must succeed."

The Present Case

Applying the principles set out above, we have reached the conclusion that the Appellant's submissions as to the Industrial Tribunal's approach in paragraph 11 of their decision are well-founded. Throughout that paragraph they refer to their not being satisfied as to two of the matters set out in the Burchell test, namely the employer's reasonable grounds for their belief and the question of reasonable investigation. In our judgment the Tribunal has demonstrated that it applied an incorrect burden of proof on the employer, despite having reminded itself of the current wording of the statute at paragraph 10 of its reasons. Whilst it is not clear to us on precisely what basis the Industrial Tribunal found that the employer did not have reasonable grounds for its belief in his misconduct, it is apparent to us that the findings of the internal disciplinary panel which led to the Respondent's dismissal were based on a version of events which he himself had given and not on the account given by NH. It further follows, in our judgment, that the Industrial Tribunal's finding that a reasonable investigation was not carried out because NH was not called to give evidence during the internal disciplinary proceedings was flawed. Leaving aside any question of the undesirability of calling a troubled 15 year old child to give evidence in such proceedings, this was a case in which the employer proceeded on the basis of the employee's own evidence. The observations in Royal Society for the Protection of Birds v Croucher [1984] ICR 604, 611G - 612C cited above apply here. Next, we take the view that the Industrial Tribunal did fall into the trap of substituting its own view of the facts for that of management. See Iceland Frozen Foods Ltd v Jones [1983] ICR 17, 24H, followed in Royal Society for the Protection of Birds v Croucher [1984] ICR 604, 611D - F. Examples of this approach lie in their findings, first that any reasonable employer would have considered that the (employee) had suffered extreme provocation, a fact of which the employer both considered and accepted; and secondly, in finding that the employee's statement that he had "enjoyed every minute of it" when interviewed was made because he was overwrought and had been on duty for some considerable time. That finding, made by the Industrial Tribunal sitting as a Tribunal of fact in relation to the circumstances of the incident, is reproduced from paragraph 8(xiii) of their reasons. Finally, although the Industrial Tribunal concludes its reasoning in paragraph 11 of the decision by reference to the statutory test of reasonableness, we have come to the view, reading that paragraph as a whole, that the Industrial Tribunal did not ask itself whether in the true circumstances of this case dismissal fell within the range of reasonable responses.

It follows, in our judgment, that this decision is fatally flawed and cannot stand. We have considered Mr Grundy's submission that we should substitute a finding of fair dismissal, but we conclude that this is a case which must be remitted to a fresh Industrial Tribunal for re-hearing. We propose to say nothing about the merits of the case, which must be a matter for the new Tribunal. Finally, in view of the age of this case, we express the hope that it can be re-listed for hearing before an Industrial Tribunal at the earliest convenient date.