United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR HENDERSON (of Counsel) Messrs Hugh James Solicitors Arlbee House Greyfriars Road Cardiff CF1 4QB
For the Respondent	MR CARR (of Counsel) Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE


 


JUDGE PETER CLARK: This is an appeal by the employer, M R Sensors Ltd, against a decision of the Cardiff Industrial Tribunal, chaired by Dr Rachel Davies sitting on 8th October 1996, that the employee, Mr O'Shea should be awarded the total sum of £6,793.89 by way of compensation for his unfair dismissal as found by an earlier tribunal consisting of the same lay members, but chaired by Miss C Collier, sitting on 16th August 1996.

In this judgment we shall refer to the employer as the appellant; the employee as the respondent. We shall refer to the first tribunal as 'the Collier tribunal' and its decision as 'the liability decision', extended reasons for which were given on 27th September 1996. We shall refer to the second tribunal as 'the Davies tribunal', and its decision as 'the remedies decision', extended reasons for which were given on 18th October 1996.

The facts

We take the outline facts from the liability decision.

The respondent was employed by the appellant from September 1992 as a Production Technician, until his summary dismissal for alleged gross misconduct on 18th March 1996.

On 15th March 1996 the respondent was involved in an altercation with a colleague, Mr Chang, over the latter's refusal to turn down the volume of his radio. No blows were struck. The respondent was abusive and called Mr Chang "slant eyed". Both parties had to be restrained, Mr Chang by Ms Bartlett, the Production Supervisor and the respondent by Mr Holland, the Quality Manager.

Immediately after that incident, Mr Holland, who had witnessed it, spoke to the respondent and Mr Chang and reprimanded them; he then reported the matter to Mr Owen, the Operations Director. Later that morning the respondent went to see Mr Owen to complain of assault by Mr Holland arising out of the altercation. During this conversation, the respondent was interviewed about the incident. He admitted calling Mr Chang "slant eyed" but complained about Mr Holland assaulting him; and the respondent also repeated an allegation he had made some time before regarding staff using drugs, and was reminded that he had previously been told not to spread malicious gossip.

Mr Owen then interviewed Mr Chang and Ms Bartlett. Later that day he received written complaints about the respondent from Mr Chang, and also one from Ms Bartlett, in which she complained not only about the altercation but also about the respondent's abusive behaviour generally.

On 18th March 1996, Mr Owen called the respondent to see him, and handed him a letter of dismissal, explaining the contents. The letter set out the reasons for dismissal which were first that the respondent had been involved in the altercation with a fellow employee on 15th March and secondly that he had spread malicious gossip. He was then escorted from the premises.

The liability decision

The appellant conceded that its disciplinary procedure in this case was defective in that the respondent was given no opportunity to state his case before dismissal. However, it was argued that his aggressive behaviour coupled with racial overtones during the altercation on 15th March 1996 amounted to gross misconduct. It was the respondent's case that his description of Mr Chang as "slant eyed" was not intended to be a racist remark, and that had a disciplinary hearing been held he would have had a proper opportunity to make that point and to explain his behaviour or make a plea in mitigation. Further, he pointed to his good work record and contended that the real reason for dismissal was not related to his conduct, but to his reporting matters relating to health and safety and drug taking amongst staff which were adverse to the Company.

The Collier tribunal reached the following conclusions on liability:

(1) the reason for dismissal was related to the respondent's conduct in (a) being involved in an altercation with Mr Chang when he allegedly made a racist remark (Ground A) and (b) allegedly spreading malicious gossip (Ground B). It rejected the reason advanced by the respondent.

(2) as to the question of the reasonableness of the dismissal it found:

(i) at the time of the dismissal the appellant genuinely believed the respondent had committed the alleged conduct.

(ii) with regard to the altercation, in view of the respondent's admission and the reasonable investigation into the incident as it found, the appellant had reasonable grounds for that belief

(iii) with regard to the spreading of malicious gossip (Ground B), in view of the lack of any investigation the appellant had no reasonable grounds for that belief.

(iv) in failing to call a disciplinary meeting with clearly specified charges thus giving the respondent an opportunity to put his case or to put any plea in mitigation, the appellant failed to apply such procedures as a reasonable employer would have done in the circumstances.

(v) in the absence of reasonable procedures in both matters, and of reasonable grounds for believing in the malicious gossip matter, dismissal did not come within the band of responses a reasonable employer would have made to the situation.

Accordingly, the dismissal was unfair.

As to remedy, the Collier tribunal said this at paragraph 11 of the liability decision:

"REMEDY

11. The applicant seeks reinstatement. Having heard representation from both sides, the tribunal was unable to make a decision on the issue of remedy and therefore adjourned the hearing to a date to be fixed to enable the respondents to present their evidence and submission in full. The parties should come prepared to make submissions on contributory fault, bearing in mind the applicant's admission as to his conduct in the altercation of the 15 March 1996, but also bearing in mind his denial as to any racist intent."

The remedies decision

It is not clear why the same tribunal was not reconstituted for the remedies hearing held on 8th October 1996. We are told that the original Chairman, Miss Collier was sitting at Cardiff on another case that day. No doubt there were good administrative reasons, but the change of Chairman may have contributed to the complaints which arise in this appeal.

The respondent's claim for reinstatement/re-engagement was rejected as impracticable on the grounds that his post had been filled and there were no suitable vacancies. There is no cross-appeal against that finding.

As to compensation, the Davies tribunal dealt first with the issue of contribution. We should set out their findings on this issue at paragraphs 3 to 6 of the remedies decision.

"3. Mr Bater for the respondents submits that any compensation award should be substantially reduced to reflect contributory fault in that the applicant admitted to the respondent his involvement in the altercation with Mr Chang that led to his dismissal and admitted calling Mr Chang "slant eyed".

4. Mr Bater would have liked to call evidence as to what took place during the altercation but this was not permitted on the ground that the respondents had already called or had their opportunity to call such evidence at the hearing of 16 August 1996 and all material facts extracted from that evidence and all findings of fact are set out in the decision. We therefore confined ourselves on contributory fault to hearing submissions on the basis of those material facts and findings.

5. In considering contribution we bear in mind that the altercation was only one of two reasons for dismissal, that the "slant eyed" remark constituted only part of the altercation, and that the altercation itself arose as a result of Mr Chang's refusal to turn down his radio. We also bear in mind that the tribunal found that the respondents did not have reasonable grounds for believing the other alleged reason for dismissal namely the alleged spreading of malicious gossip. The admitted "slant eyed" remark was a contributory factor and the respondents were rightly concerned that it was a personal remark based on racially physical characteristics, but they failed to give the applicant the opportunity to explain he had no racist intent. It may be that had they given him such opportunity their concern would have been lessened.

6. Having taken all these factors into account we find the applicant's contributory conduct was not substantial. We assess contribution at 5% and are satisfied that it is just and equitable to reflect that contribution in the compensation calculations of both the basic and the compensatory awards."

Having made the finding of 5% contribution the Davies tribunal applied that discount to both the basic and compensatory awards as calculated by that tribunal, and made the final total award of £6,793.89.

The Appeal

This appeal raises essentially two points.

First, that the Davies tribunal erred in not permitting the appellant to call evidence as to the nature of the altercation on 15th March 1996, and secondly, that at neither hearing did the tribunal make a material finding of fact as to whether or not the respondent made the "slant eyed" remark with racist intent.

As to the first point, Mr Henderson submits that on a proper reading of paragraph 11 of the liability decision it was envisaged by the Collier tribunal that it was open to the appellant to call evidence both as to reinstatement/re-engagement and as to contribution. Mr Carr, on the other hand, contends that on a fair reading the admission of evidence was limited to the question of reinstatement/re-engagement and not to contribution.

On this aspect we prefer the submission of Mr Carr as a pure matter of construction. However, the problem which arose lay in the fact that the constitution of the tribunal changed. In our view the Collier tribunal made no findings of fact as to the detail of the altercation, nor as to the respondent's intent in making the remark, because such findings were immaterial to their conclusions on liability with which the liability decision was concerned. However, it must have been envisaged that at the remedies hearing the tribunal would make such further findings of fact as were necessary on those two matters, based on the evidence heard on the first occasion. We have been referred by Mr Carr to Iggesund v Lewis [1984] ICR 544 for the proposition that where an employer had the opportunity to call factual evidence as to contribution at the first hearing but did not do so, he may not be given that opportunity at the second hearing. To that extent we uphold the ruling the Davies tribunal.

However, and this is Mr Henderson's second point, no express finding as to the respondent's intent in making the remark was made in the Collier tribunal's reasons. We reject Mr Carr's submission that a finding that the respondent had no racist intent is to be inferred from the Collier tribunal's reasons; on the contrary, that tribunal merely recorded the respondent's denial of such intent. Further, we are not prepared to work backwards from the Davies tribunal's finding of 5% contribution to infer, because Dr Davies was sitting with the same two lay members who had sat with Miss Collier, that such a finding must have been made following the remedies hearing. Paragraph 4 of the remedies decision makes it clear that the Davies tribunal was limiting itself to findings of fact made by the Collier tribunal in the liability decision reasons.

In our judgment this is the fatal flaw in the remedies decision under appeal. An assessment of the degree of contribution was made by the Davies tribunal without there first being a necessary finding of fact as to the respondent's intent in making the remark.

For this reason we are driven to conclude that the remedies decision cannot stand. The question then arises as to what we should do with the case.

Mr Carr submits that we should remit the matter to the Collier tribunal for its finding on contribution after it has made the necessary finding of fact, which we have held was not made, as to the respondent's intent based on the evidence which the Collier tribunal heard on 16th August 1996. To do otherwise would be unjust to the respondent, since it would allow the appellant to lead evidence as to the altercation which the Davies tribunal permissibly excluded.

We see the force of that submission, but in our judgment the overall justice of the case requires that the issue of compensation be remitted to a fresh Industrial Tribunal, as Mr Henderson submits. At the further hearing it will be for the parties to lead such evidence as they choose, subject to relevance, directed to two issues:

(1) the level of compensation which is just and equitable under s.123(1) of the Employment Rights Act 1996. That will involve consideration of the percentage chance of the respondent retaining his job had he been given the opportunity to state his case at a disciplinary hearing (the Polkey deduction), and

(2) the level of contribution on the part of the respondent to his dismissal.

Those matters should be considered separately and in that order. See Rao v Civil Aviation Authority [1994] ICR 495.

It is only after the new tribunal has heard the evidence on both sides and made all necessary findings of fact that it can reach conclusions on these two issues.

It follows, and we state it for the avoidance of doubt, that the new tribunal will proceed on the basis of the Collier tribunal's findings as to unfair dismissal, and the Davies tribunal's findings:

(a) that this is not a case for re-instatement or re-engagement;

(b) as to the calculation of gross loss, and the basic award; and

(c) that the respondent did contribute to his own dismissal.