United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	THE APPELLANT IN PERSON
For the Respondents	MR MARTYN WEST (Senior Advocate) Peninsula Business Services Ltd Stamford House 361-365 Chapel Street Manchester M3 5JY


 


MR JUSTICE KIRKWOOD: There is before us an appeal by Mr Baker, a former employee of the respondent, in relation to the decision of an Industrial Tribunal on a remedies hearing.

Before coming to the appeal itself, Mr Baker makes a number of preliminary points. The first is that the respondent's answer was due to be filed according to the Practice Direction by 8th April 1997. Although it bears the date "8th April 1997", it was not in fact received by the Employment Appeal Tribunal until 9th April 1997 and is accordingly out of time. The relevant Practice Direction, in that regard, 2(8), reads in these terms:

"(8) A Respondent who wishes to resist the appeal and/or to cross appeal, but has not delivered a Respondent's Answer as directed by the Registrar, may, unless leave is granted to serve an Answer out of time, be precluded from taking part in the Appeal."

The use of the word "may" there, gives a discretion to the Employment Appeal Tribunal as to whether the respondent is to be precluded or not.

Secondly, Mr Baker says that the skeleton argument of the respondent was not received by him until it arrived at his home last Saturday morning. He draws to our attention the Practice Direction about skeleton arguments, 8(6), that says:

"(6) Skeleton Arguments should be exchanged by the parties and copies should be served on the EAT not less than 2 weeks before the date fixed for the hearing of the full appeal. ...

...

(10) Failure to follow this procedure may lead to an adjournment of an appeal or even to dismissal for non-compliance with the Practice Direction."

The third point that Mr Baker makes to us is that it was only yesterday that the Post Office delivered to his home by Registered Postal Service, copies of the authorities to which the respondent had referred in its skeleton argument and upon which it intended to rely. It has not been possible for either Mr Baker or his wife to go round to the Post Office to collect that bundle of papers, so he comes here today without them.

In regard to the first of those main points, Mr Baker asks us to say that for failure to deliver the answer in time, the respondents should be precluded from taking part in the appeal. That, as I have said, is a matter that lies within our discretion. That is to say that we must make a judicial decision as to what is right in the circumstances having in the forefront of our mind that injustice should not be done. The answer was one day late. It was received by the Employment Appeal Tribunal on 9th April 1997, rather more than three months ago. There is no question of Mr Baker being put at a disadvantage by the lateness by a day and it seems to us that the interests of justice would be not served by precluding the respondent from taking part in this appeal on that account.

So far as the skeleton arguments are concerned, the position is just a little more complicated. The Practice Direction calls for exchange by the parties of the skeleton arguments with copies being served on the Employment Appeal Tribunal. It is ordinarily the task of an appellant to make the running, as it were, in that regard, and to prompt the arrangements for such exchange. Mr Baker in fact let the Employment Appeal Tribunal have his skeleton argument in a letter dated 1st July 1997, and he rather assumed that the Employment Appeal Tribunal would copy it on to the respondent. That is, I am afraid, a misunderstanding of the Practice Direction which does not give any indication that that is the way matters would proceed. In the result, the respondent got in touch with Mr Baker last week to ask about exchange of the skeleton arguments. Mr Baker sent a copy of his immediately and the respondent reciprocated, but it was the end of the week before Mr Baker had the respondent's skeleton. That is how it has come about. Again the Practice Direction says that failure to follow the procedure may lead to an adjournment of an appeal or even to dismissal for non-compliance. Technically, there is non-compliance by both sides, on Mr Baker's behalf because his misunderstood the Practice Direction as to exchange. Mr Baker does not however ask us to adjourn this appeal to give him more time to digest what is in the respondent's skeleton argument. He says he wants no more delays. He asks us instead to dismiss the respondent's part in the appeal. We do not think that it would be in the interests of justice that we do so.

So far as the provision of copies of authorities is concerned, there is no requirement in the Practice Direction or elsewhere for a respondent to give copies of authorities to be relied upon to the other side. The respondent's advisers did so in an attempt to assist Mr Baker. For some reason they did not arrive by next day delivery, and it is regrettable that Mr Baker has not had the chance to read them. But he does not ask us to adjourn the case on that account. We will consider them slowly as we hear this appeal, but no relief is appropriate in terms of striking out the respondent or anything like that in that regard.

We will accordingly proceed to hear this appeal. We shall hear first how Mr Baker puts his case. We will then hear from the respondent. We will consider the authorities and when the argument is complete, we will give our judgment.

MR JUSTICE KIRKWOOD: This is an appeal by an employee against the decision as to remedy of an Industrial Tribunal sitting at Norwich on 6th August 1996. Extended reasons for the remedy decision, together with extended reasons for an earlier decision as to liability, were sent to the parties on 19th August 1996.

The award eventually made to the appellant was £2,010.20. The calculation of the award, even on the principles applied by the Industrial Tribunal, was arithmetically wrong. The tribunal has subsequently recognised that, and amended its award to £3,008.52. This appeal is against one aspect of the approach taken by the tribunal in arriving at its decision.

On 2nd February 1996, the appellant, Mr Baker, was dismissed from his employment by Fleet Car Contracts Ltd after 16 years service. The reason for dismissal was misconduct which the took the form, it is said, of bullying staff.

Mr Baker applied to an Industrial Tribunal complaining of unfair dismissal. The tribunal first heard the case on 22nd May and 26th June 1996, confining that hearing to the question of whether Mr Baker had been unfairly dismissed. The determination of that question involved determination both of fact and of law. There was no doubt that Mr Baker had been dismissed. Whether that dismissal was unfair, depended upon the Industrial Tribunal's findings in the light of the considerations of law it was required to consider by s.57 of the Employment Protection (Consolidation) Act 1978. In that regard the Industrial Tribunal found:

"14 It was our view that the dismissal of the applicant was unfair having regard to that provision [that is a reference to s.57] for the reason that the applicant was dismissed solely on the basis of written statements provided by certain past employees of the respondent and two employees currently in its employment. Certain of those persons making the written statements referred to may well have harboured a sense of grievance against the applicant and at least one of them stood to gain by his dismissal. None of those whose statements were relied upon by the respondent appeared at the disciplinary hearing and although the applicant had copies of their statements he was denied the opportunity of testing their evidence. Furthermore, none of those making the statements gave evidence at the hearing before the tribunal with the result that the tribunal was invited to make a finding that the applicant was fairly dismissed based wholly on evidence of doubtful integrity made by witnesses who were not subject to cross-examination and whose statements in some cases referred to incidents which had occurred many months before. The procedure adopted by the respondent was not in accordance with its own "Guidance" concerning disciplinary procedures. For these reasons we did not consider that the procedure adopted at the disciplinary hearing was equitable to the applicant."

Primarily because of the inadequacies in the disciplinary procedure, identified by the Industrial Tribunal in paragraph 14, it found the dismissal to be unfair.

At that same hearing, and with the evidence fresh in its mind as to how the disciplinary process had been mishandled, the Industrial Tribunal went on to consider a question posed by s.74(6) of the 1978 Act:

"(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."

The Industrial Tribunal was entitled to consider that question at that stage, and no appeal is or could be made in respect of that. It may, however, be that the risk of confusion to Mr Baker, who was representing himself, may have been lessened if the question of contributory fault had been delayed to decision at a remedies hearing. But the tribunal dealt with it on 26th June 1996. The advantage of taking that course was that the parties were thereby given a basis on which to discuss and perhaps settle the question of compensation without a further hearing. The decision of the Industrial Tribunal on this aspect, as contained in its extended reasons, is in these terms:

"15 The applicant contributed to his dismissal because he compounded the unsatisfactory nature of the procedure at the disciplinary hearing and later at the Appeal by his failure to co-operate in the investigation being held or indeed in large measure to offer any explanation concerning the charges of misconduct being made against him although he believed himself to be in possession of information which would rebut those charges. By this conduct on his part the applicant in a sense "invited" his own dismissal.

16 We assessed the applicant's contributory conduct as being 50%."

At the conclusion of the hearing on 26th June 1996, the Industrial Tribunal gave verbal expression to its decision. The tribunal suggested to Mr Baker that he go to see a solicitor. It encouraged the parties to try to reach a settlement.

Two days after the hearing, on 28th June 1996, the respondent wrote to the tribunal saying that in order to consider settlement it needed a copy of the tribunal's summary reasons. Those were handed down on 22nd July 1996 and they were in these terms:

"The unanimous decision of the Tribunal is that the applicant was unfairly dismissed but that he contributed to his own dismissal. In percentage terms that contribution was 50%.

...

SUMMARY REASONS

1 These reasons are given in summary form.

2 The applicant was dismissed and the effective date of termination of his employment was February 2nd 1996.

3 The reason for dismissal was the bullying of other employed staff."

I strongly suspect that there is second page to those summary reasons, but if there is, I do not think that Mr Baker has seen it, and certainly we do not have it in the papers before us. However that may be, Mr Baker tells us that he thought the decision as to 50% contribution was harsh, but that he accepted the Industrial Tribunal's decision. He brought no appeal in respect of it. It is clear to us from his argument today, however, that he feels very sore indeed about what has happened to him. If only the disciplinary procedures of the employer had been followed properly, and he had been able to cross-examine those who had made allegations against him, Mr Baker feels sure that he would never have been dismissed.

Following the June 1996 hearing, Mr Baker did, as the tribunal had advised, go to see a solicitor. But no settlement was reached. The day for the remedies hearing was 6th August 1996. Mr Baker took it from the verbal decision of the Industrial Tribunal on 26th June 1996, and from the summary reasons which he had in black and white before him, that the case had been decided. All that remained to be done was a calculation of the figures.

Mr Baker attended the remedies hearing on 6th August 1996. He attended without legal or professional representation. What Mr Baker had entirely failed to appreciate was that the remedies hearing was not simply about calculation of figures. Again, the tribunal had to deal with principles of law, as well as making decisions about facts.

After he arrived and about fifteen minutes before the hearing, Mr Baker was handed by the respondent's representative a copy of the decision of the House of Lords as reported in the Industrial Relations Law Reports in the case of Polkey v A E Dayton Services Ltd [1987] IRLR 503. Of course as Mr Baker says to us, he did not have time to read it or digest it, and he naturally told the Chairman that.

The hearing proceeded and seemed to Mr Baker to cover ground already covered in the May and June hearings, and to be reviewing the decision as to 50% contribution already found against him. Mr Baker told us that he found it all extremely confusing and disorientating, and at one point in the hearing he broke down. It came then as a considerable surprise to Mr Baker, so he tells us, that when the decision came out he found that his compensation had been subjected to a further 50% reduction. It is against that he appeals.

Mr Baker make two main points. The first is that, as he sees it, the hearing on 6th August 1996 amounted to a review of or an appeal against the tribunal's earlier decision that his compensation must be reduced by 50% on account of his own contributory conduct to his unfair dismissal. He had been given no prior notice of any such review or appeal.

Secondly, he was given no advance notice of the Polkey case or of any intention on the respondent's part to make an argument for a further reduction and reliance on it. The respondent was legally represented, he was not. He considers that he should have been given 14 days notice, or at least sufficient advance notice to give him time to prepare himself to deal with it.

What plainly happened at the remedies hearing was that the employer's representative relied upon a passage in the Polkey case from the speech of Lord Bridge of Harwich which is at paragraph 30 in the report to which I have referred. It reads as follows:

"If it is held that taking the appropriate steps which the employer failed to take before dismissing the employee would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation or, in the case of redundancy, no compensation in excess of his redundancy payment. Thus in Earl v Slater & Wheeler (Airlyne) Ltd [1972] IRLR 115 the employee was held to have been unfairly dismissed, but nevertheless lost his appeal to the Industrial Relations Court because his misconduct disentitled him to any award of compensation, which was at that time the only effective remedy. But in spite of this the application of the so-called British Labour Pump principle (British Labour Pump Co Ltd v Byrne [1979] IRLR 94) tends to distort the operation of the employment protection legislation in two important ways. First, as was pointed out by Browne-Wilkinson J in Sillifant's case, if the Industrial Tribunal, in considering whether the employer who has omitted to take the appropriate procedural steps acted reasonably or unreasonably in treating his reason as a sufficient reason for dismissal, poses for itself the hypothetical question whether the result would have been any different if the appropriate procedural steps had been taken, it can only answer that question on a balance of probabilities. Accordingly, applying the British Labour Pump principle, if the answer is that it probably would have made no difference, the employee's unfair dismissal claim fails. But if the likely effect of taking the appropriate procedural steps is only considered, as it should be, at the stage of assessing compensation, the position is quite different. In that situation, as Browne-Wilkinson J puts it in Sillifant's case, at p.96:

'There is no need for an "all or nothing" decision. If the Industrial Tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment.'

Applying that passage to Mr Baker's case, the question posed is this. Assuming that the employer had in fact followed the disciplinary procedures, would Mr Baker have been dismissed or not? If he would have been dismissed anyway, he has suffered no loss and is not entitled to compensation. If he would not have been dismissed, then he is entitled to the full award, that is to say the compensation for unfair dismissal less the 50% deducted because of his own contributory conduct. Put in another way, what are the chances that if the correct disciplinary procedures had been followed, Mr Baker would or would not have been dismissed? It was for the Industrial Tribunal to address this question on the totality of the evidence before it and the findings of fact that it made. This is what the tribunal found:

"17.13 The Polkey effect. Mr McNerney drew our attention to the judgment of Lord Bridge of Harwich in the well known Polkey case. He asked us to consider What difference it would have made to the applicant's position if the respondents had followed a fair procedure at the disciplinary hearing? It was our view that had the respondents witnesses been called to give evidence at the disciplinary hearing the evidence of those witnesses might well have been found to be unreliable both by reason of personal bias on their part and also because of the period which had elapsed since certain incidents which were the subject of complaint had taken place. Had the respondent followed a fair procedure we were of the view that the applicant's chances of avoiding the sanction of dismissal were 50/50. It was therefore appropriate to make a deduction of 50% from the compensation which we would otherwise have awarded."

At the risk of being repetitive, but in an attempt, which I recognise may not succeed, to make things clear to Mr Baker, I underline that on the facts of his case, there were three key questions that the tribunal was required by law to address.

(1) Was Mr Baker unfairly dismissed? Relevant to that is s.57 of the 1978 Act.

(2)

(a) if so, did Mr Baker contribute to his dismissal? Relevant there are ss.73(7)(b) and 74(6) of the 1978 Act.

(b) If the answer is "yes", by what proportion does the tribunal consider that it would be just and equitable to reduce the amount of the award?

Those are the two questions the tribunal dealt with at the May and June 1996 hearings, and they are answered in the summary reasons of 22nd July 1997 and later enlarged upon in the extended reasons of 19th August 1996.

(3) The third question was one that, as Lord Bridge of Harwich said in the Polkey case, should not be considered at all until the stage is reached of assessing compensation. That is why it was not considered until 6th August 1996 hearing. The question is: What is the percentage chance that even if there had been no irregularity in the disciplinary procedures, Mr Baker would anyway have lost his job? That is what has been referred to as the Polkey effect. That is the exercise the tribunal undertook as the law required it to on 6th August 1996.

It follows that on 6th August 1996 the tribunal was not in any sense reviewing its earlier decision on contribution or embarking on any sort of hearing of an appeal. That Mr Baker thinks otherwise is due to a misapprehension on his part. On 6th August 1996 the tribunal was considering a point on the assessment of its award that was quite separate and distinct from its earlier finding of contributory fault.

Mr Baker's argument that it was unfair that the Polkey argument was sprung on him just before the hearing is one that inevitably attracts sympathy. We note, however, that Mr Baker had been recommended to see a solicitor. We have heard nothing to suggest that the Industrial Tribunal itself conducted the 6th August 1996 hearing in a materially unfair way. The fact is that there is no requirement of the Rules that one party in Industrial Tribunal proceedings gives to the other advance notice of its arguments of law or of the propositions it intends to advance in reliance upon the law.

There has not been identified to us any respect in which the decision of the Industrial Tribunal is flawed by an error of law. Nor has it been argued before us, that the tribunal reached a decision on the facts that no reasonable tribunal could have reached on the material before it. Accordingly, it is inevitable that this appeal be dismissed.