United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 632_95_0905

Appeal No. EAT/632/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 9th May 1996

Before

THE HONOURABLE MR JUSTICE BUTTERFIELD

MR A E R MANNERS

MR A D TUFFIN CBE

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MR A JOHNSON          APPELLANT

T J GUINAN LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MISS A GUMBS

(of Counsel)

Sedgwick Phelan & Partners

Solicitors

Argyle House

Warwick Court Park Road

Middleton

Manchester

M24 1AE

For the Respondents NO APPEARANCE OR

REPRESENTATION BY OR ON BEHALF OF THE

RESPONDENTS


 


MR JUSTICE BUTTERFIELD: The appellant Mr Johnson was employed as a delivery driver by the respondent company in May 1990. On 23rd November 1994 he was summarily dismissed from that employment. He complained to the Industrial Tribunal sitting at Manchester that he was unfairly dismissed.

The tribunal is a decision promulgated on 2nd May 1995 agreed that he had been unfairly dismissed, but held that he had contributed towards his dismissal by reason of his conduct, and assessed the contribution as 100% and awarded him nothing.

Against that decision, the appellant now appeals. He is represented before us today by Miss Gumbs. The respondents have not appeared at this hearing, they did however respond to the Notice of Appeal and submitted to the court a skeleton argument which each member of the court has carefully considered.

The facts fall within a small compass and concern an incident which occurred on 22nd November 1994, the day before the appellant's dismissal. On that day the appellant was loading his delivery vehicle with sheets of plaster board. The plaster board was stored in a shed. On top of the sheets of plaster board was a heat sealing machine, apparently quite bulky and heavy. As the appellant was removing one of the sheets of plaster board, in some way the machine fell to the floor causing damage to it.

Mr Guinan, whom we assume to be a director of the respondent company, learned of the incident. He was told by his brother and two other witnesses that the appellant had deliberately thrown the machine to the floor in a fit of temper. He spoke to the appellant in the yard of the company premises and asked him what had happened. At the hearing before the Industrial Tribunal there was a dispute about the conversation that then ensued. The tribunal found that during the conversation the appellant was less than frank about how the incident had occurred, at first indeed denying all knowledge of it. However, he went on to apologise and offered to pay for any damage to the machine. The tribunal found, as we understand the decision, that the appellant's attitude was somewhat at odds with the words he was speaking.

Mr Guinan having spoken to the appellant, did not accept the offer of amends. He concluded that the appellant had indeed deliberately thrown machine to the floor causing damage to it. The appellant was summarily dismissed.

On those facts as found by the tribunal, the tribunal proceeded to determine the appellant's complaint. We remind ourselves that it is for the Industrial Tribunal to find the facts and decide the case on the facts. Our function is to correct any error of law where one is established and identified.

It is plain that the reason for the appellant's dismissal related to his conduct. In determining whether for the purposes of Section 57(3) of the Employment Protection (Consolidation) Act 1978 the respondents acted reasonably or unreasonably in treating the appellant's conduct as a sufficient reason for dismissing him, the tribunal was required to consider the procedure adopted by the respondents in investigating the incident. This the tribunal did and found that there was a procedural unfairness to the appellant. First, he was given no prior warning of the interview, (if it is to be graced with such a name) in the yard. Second, he was not told that the interview could result in his dismissal. Third, he was not given any opportunity to present his case fully. Fourth, he was not permitted to have a colleague present at the interview. Finally, the interview itself was of such extreme informality that it simply did not constitute a proper procedural disciplinary interview.

Those findings plainly amounted to substantially more than technical procedural flaws. Taken together they amount to a finding in any real sense, that the appellant was denied natural justice. The tribunal found that the dismissal was unfair.

Thus far the tribunal's approach cannot be criticised. It was for them to judge the reasonableness of the respondents action, not to consider the injustice or lack of it done to the appellant. That factor may be relevant in assessing compensation, but not in fixing of liability in the first place.

Having concluded that the appellant was unfairly dismissed for procedural reasons, the tribunal considered the application of the principles derived from Polkey v A E Dayton Services Ltd [1988] ICR 142, namely, what would have happened if the proper procedures had been carried out. Such consideration often involves the assessment of a percentage chance of the employee retaining his job if there had been a proper hearing. On this issue the tribunal found as follows:

"10. ... Having considered all the evidence and the conclusion having been reached by the Tribunal that the respondents genuinely believed on reasonable grounds that the applicant had deliberately thrown the machine to the floor causing the damage in a fit of temper, it is satisfied that the dismissal would nevertheless have taken place."

There is no finding as to the percentage chance of the appellant keeping his job, if the respondents had acted fairly in their investigation into the incident.

The respondents in their written submissions to this tribunal, in effect invite us to conclude that the tribunal must have found that there was no chance at all of that happening. That in effect the tribunal found that the appellant would inevitably have been dismissed however fair the procedure was. The tribunal did not say so, there was no finding as to what the response of the employer would have been had the procedure been fairly conducted. The tribunal must not of course substitute its own view for what it thinks the employer might have done.

In the light of the tribunal's stated findings of fact, we do not consider it right to infer that the tribunal did in fact find that the appellant would have been inevitably dismissed. The procedural irregularities were serious. The appellant's attitude had he known the interview might lead to his dismissal could have been wholly different and might have significantly affected the respondent's response to the incident.

We are strengthened in our view that the tribunal did not find that the appellant would inevitably have been dismissed by the very fact that the tribunal went on to consider the question of contributory fault. If the tribunal had been satisfied the appellant would inevitably have been dismissed, it would be otiose to address that issue at all. When the tribunal did address the issue of contributory fault, they clearly fell into error.

Section 74(6) of the 1978 Act provides:

" (6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."

Those are clear words. There are two stages for the tribunal to go through. First whether to order a reduction. Second, if so, by how much? The first stage is a question of causation, and it is the conduct of the employee which alone is relevant. Improper conduct by the employee may justify a reduction of award if it contributed directly to his dismissal. It has long been recognised that where a tribunal makes a reduction in compensation because of the employee's own behaviour, it must in its extended reasons specify the behaviour, action or conduct that it is taking into account under this head, (see Parkers Bakeries Ltd v Palmer [1977] IRLR 215) and must further explain its reasons for making the particular reduction which it has made (see Pirelli General Cable Works v Murry [1979] IRLR 190).

The tribunal expressed itself thus in relation to Section 74(6):

"11. ... the respondents having been satisfied that the actions of the applicant were deliberate and the respondents having reasonable grounds for coming to that conclusion, the Tribunal is further of the opinion that the applicant contributed towards his dismissal by reason of his conduct. The percentage contribution assessed by the Tribunal is 100%."

The test applied by the tribunal was whether the respondents were satisfied that the actions of the appellant were deliberate, and whether the respondents had reasonable grounds for arriving at that conclusion. So far as Section 74(6) is concerned that is nothing to the point. There is a plain error of law disclosed in the extended reasons on this issue and the tribunal was simply wrong.

It is not a difficult matter for an Industrial Tribunal to follow the necessary steps in a case such as this. They must first consider, in a procedural situation, whether the procedure was unfair. If the answer to that question is yes, then the tribunal must ask itself whether if the procedure had been fair would the employer still have dismissed the applicant. If the answer to that question be no, the tribunal must go on to assess compensation and must give full compensation to the applicant subject to any reduction for the applicant's conduct under Section 74(6). If the answer to the question relating to dismissal is yes, then the tribunal must consider whether the dismissal was inevitable, that is to say there was no chance of the applicant keeping his job even had the employer followed a fair and proper procedure. If the answer to that questions is yes, the applicant will be entitled to no compensation. If the answer is no, the tribunal must assess the chance of his keeping his job through a fair procedure. The tribunal must then calculate the compensation to be awarded to the applicant, bearing in mind any conduct alleged against him, and reduce that compensation by the percentage it considers appropriate in the light of its findings.

If the tribunal had followed that course in this case, no difficulty would have arisen. It chose not to do so, and in our judgment, fell into error by so doing as a matter of law. This conclusion, so far as compensation is concerned, cannot stand. We propose therefore to remit the matter back to a new Industrial Tribunal for its consideration on the issue of compensation alone. The tribunal found that the appellant had been unfairly dismissed. There is no cross-appeal by the respondents that that conclusion was in any way flawed, and in those circumstances we do not consider it appropriate to remit that part of the decision for any redetermination. However, the question of compensation will be assessed by a fresh tribunal which of course will be entitled in reaching its conclusions on that matter to take into consideration the Polkey point together with any contributory conduct alleged against the appellant.

For those reasons and to that extent this appeal is allowed.