United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR M WEST (Senior Advocate) Peninsula Business Services Stamford House 361-365 Chapel Street Manchester M3 5JY
For the Respondent	NO APPEARANCE BY OR REPRESENTATION ON BEHALF OF THE RESPONDENT


 


JUDGE J HULL QC: This is an appeal to us by Irvine Insurance Services Ltd against a decision of the Industrial Tribunal which sat at Exeter under the chairmanship of Mr Hildebrand, with two industrial members.

Miss Robinson, the Respondent to the Appeal, began her employment with a predecessor company (insurance brokers or agents) in May 1990. She continued her employment with that predecessor company until the summer of 1995 in Ilfracombe, and in the summer of 1995 there was a merger or takeover (it does not matter which) and the Appellants took over or merged with the firm in which she had been working. She was kept on but, we are told, not in quite the same job. She had been a manager earning more than £10,000 a year. She was now in the position of a clerk and secretary. She is a lady of 30 years of age. Her pay was certainly reduced.

She was dismissed on 11 February 1996, that was the effective date of termination and the Industrial Tribunal sat to try the question of liability on her complaint of unfair dismissal on 17 June 1996; they promulgated their decision on 15 July. That is at page 5 of our bundle. They found that she had been unfairly dismissed. They sat out the facts. She had been employed originally at £10,300 per annum. After the merger she was offered a post at a salary of £8,700 as an insurance clerk. She hesitated over that and eventually she accepted a post at the lower figure of £8,268 per annum. She was told that the further reduction in her salary was because she had expressed doubts as to whether she would join Irvine Insurance Services Ltd. She was issued with an employment contract which purported to provide for a three month probationary period.

Then the Tribunal go into what has gone wrong. They say that there was a verbal warning given to her with regard to what appear to be capability matters. She was not doing her work efficiently. Then on 20 November they say there was a formal written warning. Before that warning was imposed there was a short discussion. Mr Irvine, who signed the letter, had indicated that the terms of the letter and the list of errors alleged against the Applicant had been typed and prepared before the interview began. Thus the outcome of that disciplinary procedure had been decided before the Applicant was even aware of the appointment. They say that she put forward explanations for some of the matters which arose and they say that despite that, the Appellants went on with the formal disciplinary procedure.

So she was given another contract with another three month period of probation. Then they say, in paragraph 5:

"Shortly thereafter, on the 11 December 1995 there was a further disciplinary interview. No formal list of failings was provided to the applicant on this occasion. There may have been a short opportunity for a general discussion beforehand and she was then provided with a letter which had been typed before the interview which expressed itself to be a final written warning."

It is said, in the formal written warning, that she was ignoring written instructions. The Tribunal go on, in paragraph 6:

"At that stage some instructions which the applicant states were first given to her on 20 November were reiterated and thereafter there was a period until 11 January without any formal record. On that date the applicant was called to Mr Irvine's office at 4.30 pm and he indicated that the situation had been monitored and she had failed to comply with instructions and she was dismissed with one month's notice, with her dismissal to take effect on 11 February 1996. Those are the relevant facts."

They say that the employers had not suggested lack of capability. It was misconduct which was alleged against her. Then they go on, in paragraph 9, setting out the statutory provisions, they say:

"9 Applying that short statement of the law to the facts of this case the Tribunal has failed to find any significant evidence of an appropriate procedure in the way in which the respondents undertook the disciplinary procedure in this case. Clearly, the respondents had decided on the outcome of the various disciplinary appointments before the interviews in question commenced and no opportunity was given to the applicant to consider the issues which were being put to her, nor was she invited to have anyone in attendance with her, to assist or take a note of the discussion, and no formal note of any of the discussions was made by the respondents."

So procedurally, it was ruled to be unfair, not merely unfair in some particular respect, but totally unfair. They go on, in paragraph 10:

"10 In those circumstances the Tribunal is satisfied that the dismissal was unfair on procedural grounds alone. The Tribunal has also considered the question of the fairness or otherwise of the dismissal in relation to the test in section 57(3). Disregarding the procedural aspects, even if the various alleged incidents of misconduct had been established the tribunal is not satisfied that it would have been appropriate in the circumstances for the applicant's employment, which had lasted for in excess of 5 years, to have been brought to an end on the grounds stated. The tribunal does not accept that this action was within the band of reasonable responses to the situation arising. In the circumstances the Tribunal's finding is that the dismissal was unfair, both on the grounds that the disciplinary procedures throughout the warnings and dismissal were unfair, and on the ground that the respondent did not act reasonably in treating the alleged misconduct as sufficient to justify dismissal."

The Applicant, Miss Robinson, had complained of harassment in her job and complained particularly that the work she was asked to do was difficult for her:

"More than I could cope with in the absence of training and support. As a result [she said frankly] I made some mistakes."

So there it was, that was her case to the Industrial Tribunal and that was the way they decided the question of liability. Then we come to the hearing on the subject of compensation. They adjourned to 30 September and then they sat. At the liability hearing the employers had been represented by a Solicitor and at the compensation hearing, the quantum hearing, they were represented by Counsel.

Notes of Evidence have been asked for and the Industrial Tribunal has provided the Chairman's notes. First of all Counsel cross-examined Miss Robinson, perfectly properly. It emerged that Miss Robinson had obtained a job in a supermarket and was earning £102 per week net in her ordinary hours, as opposed to £120 net which she had earned with the Appellants - £26 a week less, she said. Then she admitted that she did overtime, as she has said to us in what she has written. "Of course I might have earned overtime with the Appellants", but at any rate she admitted to having some earnings in the order of £17 or £18 a week in overtime on average. So that was the case with regard to figures. It was also not in dispute that it had taken her, I think, 11 weeks to find her fresh employment.

Then Counsel sought to make submissions to the Tribunal:

"Miss Young sought to make submissions in relation to contributory fault on the part of the applicant and to reopen whether conduct is such as to make a reduction in compensatory award appropriate. The Tribunal had a discretion to reduce the award.

Chairman indicated that the hearing will adjourn briefly to consider whether further evidence could be led in relation to this. It was provisionally indicated that the Tribunal would hear a submission in relation to this but would not consider further evidence as all the applicant's conduct had been raised in the hearing on the merits. The decision was clear that the dismissal was unfair both in procedural terms and substantively and it would be inappropriate to receive further evidence in relation to those matters already considered."

After consideration they adhered to that, they would hear no more evidence, though they heard a submission:

"Miss Young of Counsel made a submission in relation to contributory fault. She accepted that the ordinary heads of loss applied. The applicant received in hand a figure which was the same as that previously. She had a possibility of promotion in the future and no future loss. The applicant was partially to blame and so the Basic and Compensatory awards should be reduced. Section 74(6) [of the Act] provided compensation should be just and equitable. Conduct had contributed to the dismissal."

So that was her submission. The Tribunal had heard all about the facts at the previous hearing and, in our view, they were quite entitled to say, "We have heard this Applicant examined and cross-examined, we have heard all that the employers had to say about her failure to come up to standard and her conduct. We are not going to hear any more evidence about that. We have formed a clear view". Counsel nonetheless made a submission to them. They considered the evidence which they had heard about that and they came to the view that there was no contributory fault, as will be seen in a moment.

What is suggested by Mr West, on behalf of the Appellants, is that in fact Miss Young was endeavouring to persuade the Tribunal to consider the Polkey point; that is to say, to ask themselves, "What difference would it have made if these employers had been fair, both substantively and procedurally, to this employee; had treated her with every possible fairness, would they still have dismissed her? Would they still probably have dismissed her? Might they have dismissed her? Might they have dismissed her later?". And, says Mr West, unhappily, none of these points were noted, the Chairman has got it wrong. Mr West tells us that he has conferred with Counsel and that is her recollection. All we can say about that is, that if that were to be pursued before us, as a contention, it would be essential that that should be laid before the Chairman so that he could comment on the contention that he has made a mistake in taking his note, that he has not done justice to the submissions which were being made before him and that, in fact, it was the Polkey point on which it was sought to make submissions and to adduce evidence.

Now we look at what the Tribunal did, in fact, decide on this occasion, having heard what was said by Counsel. They said, after saying that they declined to hear further evidence on the matter of contributory fault:

"... the questions in relation to possible contributory conduct were fully aired at the [earlier] hearing in relation to the merits of the dismissal in this claim and the tribunal declined at that stage to make any finding in relation to contribution."

So that was their decision about that and, in spite of what has been said about that, in our view that is beyond criticism from the point of view of law. They had the responsibility of deciding whether or not the employers were to blame and had been unfair. They had the responsibility of deciding whether this young woman had, in any way, contributed to her dismissal.

Then they go on to the arithmetic. They take her net salary of £102 a week and they compare it with the salary of £128 a week, which she had been earning for her standard time, working with the Appellants, and they do a simple sum. They first of all had to decide how much longer her lost earnings would continue. They do that sum. They work out her wages until she got the job: 11 weeks at £128 a week; then in the supermarket they made the difference £26 and multiplied that by 22 weeks and they arrived at a sum of just over £3,000, including the Basic Award which is not involved in this argument.

So now we turn to look at the argument which is addressed to us. Looking at the Notice of Appeal, the contention made is that in paragraph 5:

"(a) The Tribunal were required as part of the assessment of remedy to consider the 'any difference test' [in other words, the Polkey test]. They failed to do so.

(b) The Tribunal refused to allow the Appellants to adduce evidence in respect of (5a) above."

But the evidence which they were asked to allow, and the evidence which they refused to admit, was evidence of contributory fault and, as Mr West makes clear in his Skeleton Argument to us, that was quite a different point. Mr West says, "The Chairman is mistaken. He has taken a wrong note", and for the reasons I have indicated we cannot entertain that. Nonetheless, says Mr West, even if we cannot entertain the argument that the Tribunal should have admitted evidence on the Polkey point, whatever that evidence might have been, the Tribunal were nonetheless under an obligation, whether it was procedural unfairness or substantive unfairness, or both, to consider the Polkey point and to ask themselves, "What difference would it have made if this young woman had been treated with perfect fairness? Would she perhaps have lasted another three months in the employment? - or six months? Would she perhaps have been dismissed promptly, even if perfect fairness had been observed? Would she perhaps have stood only a 30 per cent chance of lasting until the hearing date or thereafter?". All those are the sort of questions which a Tribunal has to ask itself, if it is considering the Polkey point.

This would mean that in every single case an Industrial Tribunal would have to set out, like a sort of mantra, "We have considered the Polkey point and we make the following findings on it". This point was not ostensibly even raised by Counsel, when the matter was before the Industrial Tribunal and, as I have suggested (and it does seem a perfectly credible suggestion) perhaps because of fear of ridicule. The fact is that, on the findings of this Tribunal, the utter unfairness in every conceivable respect of this employer, to say, "Oh it would have made no difference if this capable young woman, who had been employed at a higher salary for five years, made no difference at all, or not much difference, or might have made no difference if she had been treated with perfect fairness", would have been regarded by this Tribunal as positively risible.

But however that may be, we are not of the opinion that an Industrial Tribunal is required in every case solemnly to consider whether Polkey applies and, if so, what percentage reduction they should make or what findings they should make. They are, in our view, only required to consider that, if it appears to them that the point arises as a possible credible point. Then of course they must investigate it, as they must investigate any matter which appears to them to tell on the likely size of their award. Such matters include the health of the Applicant. "Is it likely that health would have enabled the Applicant to survive in the job?". Such possibilities, indeed, as, "How long would the employee have been able to go on in view of age?". All sorts of matters may arise. A Tribunal is not obliged to consider hypothetical matters unless they seem to be real possibilities or probabilities.

The Industrial Tribunal, in view of the emphatic nature of their findings, was not obliged to consider the Polkey point unless, in their view, it arose as a possibility. In their view it is quite clear it did not arise, and they were not obliged to consider it. They are not obliged, as I say, to set out all the matters which they have not considered because they appear not to arise, such as illness, such as other imponderables and, in our view, they are not to be criticised for not considering the Polkey point expressly. If it could be shown that they never even addressed their minds to it, that would be different, but the fact is that this was a plain case in which there was unfairness at every turn and they were entitled, in the circumstances, not to consider the Polkey point expressly and set it out and set out all the imponderables that would involve.

Next we come to the question (and this is the final question) of quantum. It is said by Mr West, "Here the Tribunal should have considered the overtime earnings and reduced the difference of £26 between £128 and £102 in their calculation". But as the Respondent herself says, she has written to us:

"I might have earned overtime in my previous employment."

There was no evidence of that, it is true. Moreover, the Tribunal were considering imponderables. When we look at the Skeleton Argument, it very helpfully sets out the figures as Mr West would have them worked. We see that during her employment with the supermarket Miss Robinson's earnings were continually increasing, no doubt owing to her merits and industry. She was a young woman who, in her previous employment, had shown that she was capable of earning higher earnings than she was earning in the supermarket. If she had been treated fairly, as she should have been treated by the Appellants, with the necessary training to enable her to cope with the job, the necessary supervision and encouragement, is it not, at any rate, a possibility that she would have improved her earnings considerably? Certainly, she was capable of higher earnings. When we look at the calculation which the Tribunal engaged in, although of course it is ostensibly a matter of arithmetic, in essence and in truth it is a calculation which is embarked on to enable the Tribunal to quantify imponderables. What would she have earned in her previous employment? Nobody can be certain. Would she have earned overtime? Would she perhaps have changed her employment? All these are imponderables. And so the Tribunal did it in the way which they did.

The question for us is not, "Was that the best method? Was it a method which was beyond criticism? Might they have adopted some different method, made other discounts or made other additions?". The question for us is, whether this assessment of imponderables, as it was underneath, at bottom, was this assessment of imponderables flawed in a manner which shows an error of law? It is noteworthy that the criticism which Mr West addresses to us results in a difference of £300 - a sum which in this connection, in view of the imponderables which we have mentioned, seems almost beneath notice and certainly does not, of itself, suggest an error of law. This is a customary type of calculation and it can, for the reasons which I have mentioned, only be an indication. If it appears to indicate, in the view of the Tribunal, a just assessment then of course it is the right way for them to proceed. In particular cases it may be necessary for them to proceed in a different way. I have mentioned the fact that they did not include overtime. It was again, for the reasons we have indicated, a matter which was within their discretion.

Having thought about it, we cannot find any error of law in this assessment. We acknowledge the force of what Mr West says to us, that the calculation could have been done differently, could have resulted in a different conclusion. If we were to go down that road, we ourselves could do calculations which would show very different conclusions. It is not a matter for us. These are matters of fact for the Industrial Tribunal. We can only intervene if we find a question of law. Having thought about it as carefully as we can, even with Mr West's assistance, I am afraid we cannot find any error of law and the appeal therefore falls to be dismissed.