United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 796_94_0202

Appeal No. EAT/796/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 2 February 1995

Before

THE HONOURABLE MRS JUSTICE SMITH

MS MARGARET EXLEY

LORD GLADWIN OF CLEE CBE JP

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CHAMBERLAIN VINYL PRODUCTS LTD          APPELLANTS

MR N PATEL          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR P NICHOLLS

(of Counsel)

Hewitson Becke & Shaw

7 Spencer Parade

Northampton NN1 5AB

For the Respondent MR D PITTAWAY

(of Counsel)

Josiah Hincks Son

and Bullough

22 De Montfort Street

Leicester LE1 7GB


 


MRS JUSTICE SMITH: This is an appeal from a decision of an Industrial Tribunal sitting at Leicester on 27 May 1994. The unanimous decision of the Tribunal was that the Respondent to this appeal, Mr N Patel, had been unfairly dismissed by his former employers, the Appellants, Chamberlain Vinyl Products Ltd.

The Tribunal made the following findings of fact. The Respondent employee was employed as an operative by the Appellant Company from 1977 until his dismissal on 26 November 1993. On 27 October 1993, a Mr Gunvant Patel, the departmental manager, went to the Respondent's place of work. He found the Respondent unsteady on his feet and formed the view that he was drunk. He said that he could smell drink upon him. The Respondent became argumentative and angry with his manager. He protested that he was fit for work. He lunged forward and grabbed the manager's throat. He was sent home.

That incident was reported to the works manager, Mr Caldwell, who interviewed the Respondent on Monday, 1 November. He asked him for his version of events. The Respondent explained that he was under the care of a psychiatrist. Mr Caldwell told the Tribunal that in the circumstances he felt that he should investigate further. He suspended the Respondent.

From that day until about 25 November, Mr Caldwell made about twelve attempts to contact either or both the Respondent's General Practitioner and his Consultant Psychiatrist. Those attempts met with no success. Mr Caldwell spoke to the Respondent, who agreed to contact his doctor. The Tribunal accepted that he had done so. Eventually, a letter came from the Respondent's General Practitioner. It was dated 22 November 1993 and it confirmed that the Respondent was a patient and that he suffered from `recurrent depression'. It stated that he was undertaking treatment by medication.

The Tribunal found that, at that point, Mr Caldwell became frustrated and decided that the matter should be brought to a conclusion. He called the Respondent in on 26 November and asked him again if there were any circumstances which could explain or mitigate his conduct. The Respondent was unable to add anything further. Mr Caldwell then dismissed him for gross misconduct.

The Tribunal examined the employer's disciplinary code which, amongst other examples, provided that physical violence towards other employees and/or incapability for work through drink or drugs, would be regarded as gross misconduct. Plainly, the employer had taken the view that the Respondent was in breach of those provisions.

In considering the question under s.57(3) of the Employment Protection (Consolidation) Act 1978, the Tribunal asked themselves whether after a reasonable investigation, the employer had formed an honest belief that the Respondent had committed acts of gross misconduct. Pausing there, it appears to us that the Industrial Tribunal were there applying their minds to the test set out in the case of British Homes Stores Ltd v Burchell [1980] ICR 303. They went on:

"Having considered carefully all the evidence, it is the Tribunal's view that an employer acting reasonably would not have ended the investigation on the 26 November 1993. At that time the respondents had received a letter from Doctor Amin dated 22 November, and although the letter raised some doubts, these were not investigated further."

We interpose to say that we understand the Tribunal to mean that Mr Caldwell's enquiry into the question of whether the Respondent had an illness which might have affected his behaviour and might account for his conduct on the night in question, had still not been answered although it was clear that the doctor's letter confirmed in broad outline the claim made by the Respondent that he was ill and receiving treatment.

The Tribunal continued:

"The Tribunal finds it strange that the respondents did not put in writing to either the doctor or consultant at any stage its queries regarding Mr Patel and although a limited conversation took place between Mr Caldwell and the company doctor no attempt was made for the company doctor to become actively involved. Faced with unanswered questions the Tribunal finds that an employer acting reasonably would have done more to resolve the issues satisfactorily."

We remind ourselves that the Tribunal had found that Mr Caldwell had abandoned his enquiries not because he felt that he had obtained sufficient information to make a proper decision but because he had become frustrated and wanted to bring matters to a conclusion.

At paragraph 10 of their decision, the Tribunal went on to consider an additional issue which had been raised in the case, namely, that Mr Caldwell had told the Tribunal that before deciding on what penalty to impose upon Mr Patel, he had taken into account a final warning given some two years earlier. The company's disciplinary procedure provided that any final warning would stand for only 12 months, at the end of which period, providing the conduct of the employee had been satisfactory, the warning would lapse and be disregarded. In this case, as the Tribunal found, the warning was not disregarded. The Tribunal took the view that Mr Caldwell treated the previous disciplinary offence as more than background. They considered that it was an influential factor. They referred to Mr Caldwell's completion of the notice of appearance in which he had written:

"However in the light of previous disciplinary meetings/decision regarding Mr Patel the Company felt that dismissal was the only option."

The final conclusion reached by the Industrial Tribunal was that:

"For these reasons but principally because the company failed to investigate fully, the Tribunal finds the dismissal to be unfair."

In challenging the Tribunal's finding of unfairness, Mr Nicholls, for the Appellant, made three submissions. The first was that, as a matter of law, the Tribunal erred in holding that there was any duty upon an employer to make an investigation into matters raised by the employee by way of mitigation of his offence. In a misconduct case, it was submitted, the employer's duty is strictly limited to an investigation of whether the offence has been committed. In other words, it is to be limited to the issue of guilt.

Mr Nicholls cited a number of authorities in support of this proposition. His starting point was Burchell's case, to which we have already referred, where Arnold J., as he then was, at page 304C said this:

"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."

Mr Nicholls submits that that passage is authority for his proposition that what must be investigated is the guilt of the employee. We observe before passing on to the next authority that that was a case which did, indeed, involve the investigation of whether the employee was guilty of the alleged misconduct. Arnold J. was not applying his mind to the issue in question in this case, which is whether there are any circumstances in which the investigation by the employer ought, in all the circumstances of the case, to go beyond the bounds of mere guilt or innocence.

The next authority to which we were referred was British Gas plc v McCarrick [1991] IRLR 305. In that case, the Court of Appeal considered the case of a man who had been dismissed for misconduct. He denied the offence at his disciplinary hearing although he had pleaded guilty in the criminal courts. He sought to say that he was, in fact, innocent and that he had been pressurised into offering a plea of guilty. The Industrial Tribunal held that the employer had failed to make a proper enquiry and should have spoken to the legal advisers, who would have been able to confirm or deny the circumstances in which the plea of guilty had been offered. The Court of Appeal held that the Industrial Tribunal's decision was perverse. At paragraph 23 of the decision, the Vice-Chancellor, Sir Nicholas Browne-Wilkinson, said this:

"Moreover, in the suggestion that a reasonable employer would have made inquiries of the respondent's legal advisers regarding the circumstances in which he was unwilling to plead guilty [until the very last moment], I agree ... that that was to impose far too high a burden on employers. In this case there was the most meticulous disciplinary proceeding. The accused employee was given the right to appear with his trade union representative and four witnesses. He was given a right to appeal against the first decision. He availed himself of those facilities. He deployed the evidence that he wished to before the employers for the purpose of establishing whether or not the pressure that had been brought to bear on him cast doubt on the genuineness of his admission. He did not adduce evidence from those who had been his legal advisers in the Crown Court. In my judgement it is perverse to suggest that where an employee is given full facilities himself to bring forward information which is under his control the employer has failed to make proper inquiries in not pursuing such inquiries himself."

We, of course, accept that decision as binding upon us insofar as it seeks to lay down any general principle. But the facts of that case are quite different from those of the present case. That was a case involving an investigation into guilt or innocence and not involving any question of an enquiry into a mitigating circumstance. Moreover, the circumstances of the case were quite different. There, as the Vice-Chancellor made plain, there was a meticulous disciplinary procedure with every safeguard available to the employee. In the instant case, the Respondent was not represented at the disciplinary hearing. He is of Asian origin and we understand has some language difficulty. The disciplinary proceeding which was conducted was of a rudimentary nature. No complaint is made of that but the circumstances of the case were very different from those contemplated and described by the Vice-Chancellor in McCarrick's case. We cannot say that the Court of Appeal would have reached the same conclusion if the circumstances surrounding the disciplinary procedures in McCarrick's case had been those that prevailed in this case.

We were also referred to the case of the Royal Society for the Protection of Birds v Croucher [1984] IRLR 425. That was a case in which the employee was charged with offences of dishonesty in relation to petrol bills, which he had submitted for reimbursement by his employers. At the initial hearing, he had denied his guilt, then on appeal he had put forward a different story, admitting that his claims were false but claiming that he had underclaimed on other occasions and that he had done no more than to claim the money that he was entitled to. The Industrial Tribunal held that the employers should have investigated his new defence. At paragraph 36 of the decision, the Employment Appeal Tribunal, Mr Justice Waite presiding, said this:

"It is difficult to escape the impression that the source of error in the present case may have been their evident view that the British Home Stores v Burchell test was one that 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 s.57(3). The Burchell case, it will be remembered, was a case which concerned, as the report itself makes plain, cases 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: here 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; and 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 Burchell, something to which this Appeal Tribunal had recent occasion to refer in Lintafoam (Manchester) Limited v Fletcher, reported in The Times for 12.3.84.

We repeat what we said then. The Burchell case remains, in circumstances akin to those that 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 s.57, subsection 3, requires them to be viewed: and so this appeal will be allowed."

Mr Nicholls cites this case as an illustration of the kind of case where little or no investigation is required because the facts of the misconduct are clear. He submits that in the instant case the facts of the misconduct were clear and that is plainly so. However, in our view, this case is of no real assistance to Mr Nicholls as support for his general contention because it was a case where only the misconduct of the employee was in issue. It did not raise the question with which we are concerned, namely whether there are circumstances in which an employer should investigate a matter raised in mitigation.

Finally, Mr Nicholls referred us to the case of ILEA v Gravett [1988] IRLR 497 and cited a useful passage from the judgment of Mr Justice Wood at paragraphs 14-17. It is not necessary to burden this judgment with that citation because we take the view that this case was yet another which entailed consideration of the employee's guilt or innocence and there is nothing in this decision which, in our view, throws any light on the need for an investigation into an aspect of mitigation.

Perhaps of greatest assistance to the Appellant is Lord Bridge's brief summary of the employer's duty to be found in the case of Polkey v A E Dayton Services Ltd [1988] ICR 142. At page 162H Lord Bridge said:

"... in the case of misconduct, the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation;"

We do not understand Lord Bridge there to have implied that the employer's duty is to be strictly limited to hearing the employee's mitigation and that his duty of investigation is to be strictly limited to the issue of guilt or innocence. In the great majority of cases, that will be an adequate procedure but, in our view, there may be cases where some aspect of the background needs to be investigated in order to put the misconduct into proper context. In those circumstances, an Industrial Tribunal may, in our judgment, be justified in criticising the employer for failing to investigate a point raised in mitigation by the employee. We think that this is such a case where, on the view the Industrial Tribunal took of the facts, they were justified in so doing.

It seems to us that the crucial points here were that, following the first disciplinary meeting when the employee had said that he was under psychiatric treatment, Mr Caldwell plainly thought that he could not deal with the case properly without making an enquiry into that aspect of the case. He must have felt the need to know whether illness had caused or contributed to the employee's misconduct. He then voluntarily undertook that investigation. His attempts were unsuccessful so he told the employee to contact his own doctor. The general practitioner wrote but provided only very limited information, not answering the question which really needed a reply. However, instead of pursuing the matter, Mr Caldwell, frustrated as the Tribunal found him to be, proceeded to a conclusion. He did not, it appears, tell the Tribunal that he felt that, on receipt of the general practitioner's letter, he knew enough to deal with the matter properly.

On those facts we consider that the Industrial Tribunal's conclusion was entirely justified. It was open to them to find that the investigation had been concluded prematurely and that no reasonable employer in those circumstances would have dismissed the employee at that stage. That disposes of the first ground of appeal.

The second ground advanced by Mr Nicholls is that at paragraph 9 of their decision the Industrial Tribunal have substituted their own view for the view taken by the employer which view, in Mr Nicholls' submission, was a proper view for the employer to have taken. The particular passage of which he complains is that in which the Tribunal express the view that they find it strange that the employer had not made a written enquiry to the doctor and had not involved the Company doctor, save to a very limited extent.

We do not accept the submission that the Industrial Tribunal was at that stage substituting its own view for that of the employer. In our judgment the Industrial Tribunal were doing no more than giving examples of what steps could have been taken by the employer to solve the difficulty and obtain the information which was needed. We do not think that the Industrial Tribunal were saying that the employer ought to have taken any one particular step. They were saying what he could have done. That, in our view, is not a substitution of their own view.

Mr Nicholls' third ground of appeal was to submit that the decision of the Industrial Tribunal was perverse. He did not suggest that it was perverse in the sense that it was not founded in the evidence. He submitted that it was irrational and that no reasonable Tribunal could have reached the conclusion that this Tribunal reached. In view of the discussion of the facts which we have already set out in considering the first ground of appeal, we think it is plain why we have taken the view that this decision was not perverse and it is not necessary to say anything further about that ground.

That then disposes of the appeal in relation to unfairness. However, another point arises on the assessment of compensation. Having found the dismissal to be unfair the Tribunal said this:

"In turning to consider remedy the Tribunal has taken into account the contribution of the applicant and the possibility that the outcome of this case could have still been a dismissal.

The Tribunal has found that Mr G Patel [the manager] was justified in reaching the conclusion that the applicant had been drinking. Mr Patel clearly knew the company rule. As such he has contributed to his dismissal.

Secondly, if further investigation had been made of a doctor it is by no means certain that new evidence would have influenced the outcome.

The Tribunal finds that the compensation to be afforded to the applicant should be reduced by 65%. It is also the Tribunals view that in assessing any future loss it would be fair and equitable to take six months into account."

It is plain therefore that the Tribunal have decided that there are two bases upon which compensation must be reduced but they have made only one global deduction. Mr Nicholls complains that that is an erroneous approach. The proper approach to cases of this kind has been set out by the Court of Appeal in Rao v Civil Aviation Authority [1994] IRLR 240. It is not necessary for the purpose of this judgment to cite from the case of Rao but it is clear that separate deductions must be made where the Tribunal considers that there should be a deduction for contributory fault and a deduction for the chance that the outcome of the case would have been dismissal, even had a proper enquiry been made.

The main reason why separate deductions must be made is that it is not permissible to reduce the basic award of compensation, under what has become known as the Polkey principle, on the ground that the outcome of the case might still have been a dismissal. The only basis upon which a basic award may be reduced is under section 73(7B) to take account of contributory fault. As the case of Rao explains, the compensatory award may be reduced first for the risk element under the Polkey principle under section 74(1) and then it may be further reduced for contributory fault under section 74(6). Here, the global reduction provides no basis for an assessment of the basic award. Accordingly, in our judgment, the Tribunal have erred in that respect.

To that limited extent this appeal will be allowed. The case will be remitted to the same Industrial Tribunal for re-consideration of remedies in the light of this judgment.