United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR J BOWERS (of Counsel) Messrs Gordons Wright & Wright Solicitors 14 Piccadilly Bradford West Yorkshire BD1
For the Respondent	MR T LINDEN (of Counsel) Messrs Pattinson & Brewer Solicitors 30 Great James Street London WC1N 3HA


 


MR JUSTICE KEENE: This is an employer's appeal against a decision by a majority of an Industrial Tribunal sitting at Leeds, a decision made on 12th January 1996, that the respondent had been unfairly dismissed.

The respondent had worked for the appellants as an HGV driver since 29th April 1991. He was dismissed on 28th July 1995 on the ground of misconduct. That came about in the following way. On 25th July 1995 he had been engaged in transporting goods from the appellants' distribution centre at Wakefield to their store at Morecambe. In the event he failed to deliver the consignment of goods and returned to the distribution centre without obtaining authorisation from his superiors to do so and without contacting the distribution centre. He was seen on his return by Mr Wilczynski the Transport Manager at the distribution centre, and he told Mr Wilczynski that he had had a burst tyre on the M62 at about 2.30 p.m., that it had not been repaired until 4.45 p.m. or thereabouts, and that he found he did not have sufficient time to make the delivery to Morecambe and then return to the distribution centre by 7.30 p.m. which was the time when he was due to finish work. It was pointed out to him by Mr Wilczynski that drivers ought not to make these sort of decisions on their own. According to the Transport Manager, this was something accepted by all the staff in the transport division because of the implications which returning a load to the distribution centre had, both for the store expecting the delivery and also for the schedules at the distribution centre itself. Consequently he suspended the respondent, so that he, the Transport Manager, could investigate the matter.

The next day, the 26th July 1995, Mr Wilczynski held an investigatory meeting. At that meeting the respondent was represented by his shop steward, Mr Clarke and the investigation centred around the fact that the respondent had failed to obtain permission to return to the centre, or to let anyone at the centre know that he was delayed or was returning with his load. Each of the appellants company's vehicles had a two-way radio, so that drivers could contact the distribution centre if they experienced any problems. The respondent claimed that his radio was only working intermittently. The Transport Manager caused tests to be carried out on the two-way radio in the respondent's vehicle, including ones from the same junction at which Mr Talbot had broken down, and according to a letter from the Chairman of the Industrial Tribunal which we have, dated 28th January 1997, the radio was found to have worked on every occasion during the test.

On 27th July 1995, Mr Wilczynski held a disciplinary meeting. Again Mr Talbot was represented by Mr Clarke. The outcome of the tests on the two-radio was described to him, and the Transport Manager also referred to two previous incidents in May and June 1995. These were seen by the manger as being relevant to Mr Talbot's attitude towards contacting the distribution centre. At this meeting Mr Talbot accepted that his conduct in bring the load back to the centre was serious and was the worst possible thing that a driver could do. The Transport Manager heard representations from the respondent and his representative and then adjourned the meeting to consider the matter further.

The meeting was reconvened the next day, and it was on that occasion that Mr Wilczynski took the decision to dismiss the respondent. The Transport Manager did not accept that the two-way radio had not been working on 25th July or that it had, in any event, been impossible for Mr Talbot to contact the centre to obtain instructions. Mr Talbot's evidence was that he did not think of using a public telephone. The Transport Manager also took into account the past incidents which, in his view, indicated that Mr Talbot had resisted taking instructions from management at the distribution centre. He concluded that Mr Talbot had on 25th July avoided communicating with the centre as he had anticipated that management would not agree with his decision. In arriving at the decision to dismiss him, the Transport Manager also took into account Mr Talbot's four years of service, the absence of evidence of any particular loyalty or commitment to the appellant company, and the lack of any remorse on his part about his conduct.

At that final meeting, attention was drawn by Mr Clarke on the respondent's behalf to a similar incident concerning another driver called Johnson employed by the appellant company. He too had broken down on 25th July while in the course of transporting goods to one of the company's stores. His vehicle had been repaired at 5.35 p.m. and Mr Johnson also anticipated that he would not be back at the centre until after 9.00 p.m.. He then made efforts to contact the centre on the two-way radio system, but that had not worked, and so he had returned to the centre without permission. In his case, however, his conduct only led to a final written warning. As the Transport Manager acknowledged there were obvious similarities between the two cases. He again had caused the two-way radio in Mr Johnson's vehicle to be tested. The result was that it was found in fact to be working for, but only for, about 50% of the time. Even so Mr Johnson had made no effort to contact the distribution centre by telephone.

Nonetheless, Mr Wilczynski concluded that Mr Johnson's case and Mr Talbot's case were distinguishable. He took account of the fact that Mr Johnson's radio had been found to be working only intermittently in contrast to this respondent's, although he still regarded the failure to make contact as very serious conduct justifying dismissal. However, he found that there were mitigating circumstances in Mr Johnson's case. He regarded this incident as being, in his case, out of character and a one-off situation, resulting from a lack of thought and not a calculated action. Mr Johnson had had over twelve years service with the company and had no history of resisting instructions. On the contrary he had in the past worked overtime regularly to ensure that loads were delivered, including one occasion when he had been delayed by a breakdown. In addition, at the meetings held with Mr Johnson, the latter had been very apologetic and seemed genuinely to regret his conduct. The Transport Manager found that these mitigating circumstances enabled him to reduce the penalty in this case to a final written warning.

However, he did not find these mitigating factors present in Mr Talbot's case or at least not present to the same degree. He regarded Mr Talbot's conduct on 25th July to be typical of past behaviour. There was no evidence of commitment to the company. Mr Talbot had made excuses for his conduct rather than expressing genuine regret, and there was not the record of long service present in Mr Johnson's case. Hence, the Transport Manager concluded that the two cases were distinct and should be treated differently.

Mr Talbot, having been dismissed, was told of his right of appeal. He exercised it, and the appeal was heard on 2nd August 1995 by Mr Patchett the Transport Controller. Again, the respondent was represented by Mr Clarke, his trade union shop steward, and the circumstances were gone into again. The comparison again was made, and Mr Patchett took into consideration the fact that Mr Johnson had been a very loyal and long serving employee who had in the past shown a total commitment to the company, with no previous record or any record of being reluctant to work or accept instructions. Mr Patchett came to the conclusion that because of the respondent's attitude, he was less apologetic than Mr Johnson, that Mr Wilczynski had made the right decision and therefore the appeal was dismissed.

There was then a further appeal which took place on 10th August 1995. This was heard by Mr Noone, the Deputy Warehouse and Distribution Controller. Again the respondent's case was put by his trade union representative, particularly on the basis of a comparison with Mr Johnson who had not been dismissed but again the appeal was dismissed. Mr Noone, in his decision, referred amongst other things to his belief that Mr Talbot's radio had been working, given the results of the tests, and to evidence of a lack of co-operation on calling in to the distribution centre in the past.

A further and final appeal to the Deputy Managing Director also failed.

The letter from the Chairman of the Industrial Tribunal dated 14th January 1997, sent in response to a request from the President of the Employment Appeal Tribunal after hearing an application for the Chairman's Notes of Evidence, refers to certain items of evidence, apparently accepted as facts by the Industrial Tribunal. Apart from the test results on the radios of Mr Talbot and Mr Johnson, these facts were:

1. that Mr Talbot's only apology for his behaviour was when he was prompted to do so by his trade union representative;

2. that Mr Johnson's past conduct had been exemplary; and

3. that at least in the view of the company, Mr Johnson's overtime record showed a commitment to the company.

The Industrial Tribunal found that there was a permissible reason for dismissal within s.57(2) of the Employment Protection (Consolidation) Act 1978, the statute which was then in force. That reason was misconduct.

The tribunal then turned to consider the test to be applied under s.57(3) of the 1978 Act, that is to say:

"... whether in the circumstances (including the size and administrative resources of the employers undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case."

This statutory test was translated by the tribunal at paragraph 8 of its decision into the following proposition:

"8 ... The Tribunal have to go on to decide under Section 57(3) of that Act whether the dismissal was reasonable in all the circumstances of the case."

It recorded that the applicant, now the respondent, accepted that what he did was serious misconduct. At the hearing before the tribunal it seems to have been accepted, as it has been before us, that the decision to dismiss would have been fair but for the alleged inconsistency with the appellants' treatment of Mr Johnson. The only point which then and now is pursued by the respondent is the alleged disparity of treatment by the employer of the two employees.

The majority of the tribunal below said that there had been inconsistency of treatment between these employees. They contrasted that with what they said was required, namely that there had to be consistency of such treatment. They noted that Mr Johnson had long service, but they said that they did not accept:

"... that that is a ground for drawing a distinction, a person who has four years' service is entitled to be treated as fairly as a person with twenty years' service. Mr Johnson had a clean record but there is nothing of a disciplinary nature in the applicant's record, except he did receive a verbal warning earlier in the year for going over the hours on his tachograph but that is a matter of an entirely different nature. It was only a twelve week warning and that had expired in any event."

The majority of the tribunal went on in paragraph 9 to say that both men had a good record, and that they did not accept that because Mr Johnson had put in more overtime he necessarily had a greater commitment to the company. They added:

"... anyway the idea that the applicant had less commitment was purely a subjective decision."

The majority concluded that Mr Talbot's dismissal was unfair because he was treated inconsistently with Mr Johnson. They cited the decision of the Court of Appeal in The Post Office v Fennell [1981] IRLR 221, for the propositions that:

"... employees who behave in much the same way should have meted out to them much the same punishments. An Industrial Tribunal is entitled to say that where that is not done and one man is penalised much more heavily than others who have committed similar offences then the employer has not acted reasonably in treating whatever the offence is as a sufficient reason for dismissal."

They then said they did not find that case overruled by the more recent case of Paul v East Surrey District Health Authority [1995] IRLR 305.

The minority member of the tribunal found that it was a fair dismissal being within the range of reasonable responses of an employer. The decision then continued:

"The majority consider that parity is important. People should be treated the same, particularly so when the case is almost identical and occurred on the same day."

Before us Mr Bowers, on behalf of the appellants, has submitted that the Industrial Tribunal's decision reveals serious misdirections. He makes essentially four points in support of that argument. First of all, he criticises the tribunal's statement in paragraph 8 of its decision when its says that a difference in the length of service is not a ground for drawing a distinction between two employees. That, it is submitted, is wrong in law.

Secondly, reference is made by Mr Bowers to the tribunal's comment that the case of The Post Office v Fennell is not overruled by Paul v East Surrey Health Authority. It is submitted on behalf of the appellants that while that is true, it fails to recognise the important qualifications attached to the Post Office v Fennell case in the Paul decision. In support of that, Mr Bowers goes onto to say that although the decision of the Court of Appeal in Securicor Ltd v Smith [1989] IRLR 356 was cited to the tribunal below, there is no reference whatsoever to it in the tribunal's decision.

Linked with that is the third point which is prayed in aid on behalf of the appellants, namely that the tribunal below put itself in its decision in the shoes of the employer, and did not apply the correct test. That correct test, submits Mr Bowers, is to ask whether the employer's action in distinguishing between the two employees came within the range of responses of a reasonable employer. Another way of putting the same point, it is said, is to ask whether an employer who conscientiously drew such a distinction had rational grounds for so doing. In support thereof Mr Bowers refers again to the decision in Paul, and to the decision in the Securicor case.

Finally, the appellants argue that the Industrial Tribunal here elevated the factor of parity of treatment between employees to an overriding factor, and that is contrasted with their alleged failure to take into account certain distinguishing features which existed between the two cases. Mr Bowers emphasises that there is no reference in the tribunal's decision to the differences found on testing between the two radios of each of the two employees, and to the conclusions which the Transport Manager drew from those test results. Again, he says, there is no reference in the decision to the fact that Mr Talbot had been warned twice before, unlike Mr Johnson, and this is an important factor because it goes to the question of the attitude of the employees which is important in respect of their future conduct.

On behalf of the respondent, Mr Linden accepts that the appropriate test is that which refers to whether the employer's decision was one which fell within the range of responses which might be expected from a responsible employer, and applying that to the present case, whether the distinction drawn by the employer was one which could reasonably be drawn.

He also accepts that that same question can be expressed in the terms of whether there were rational grounds on which the employer could properly distinguish the two cases, although he makes the point, which to our mind is a valid one, that it is important that one should be careful in putting the test in that way not to drawn into confusing it with the well-known Wednesbury reasonableness test employed in the public law arena which amounts to asking simply whether a decision has been perverse.

The respondent goes on to submit that the majority of the Industrial Tribunal here did indeed have that appropriate test, to which we have just referred, in mind. He says that that conclusion can be drawn from the fact that there is a reference expressly to it in the final paragraph of the decision, which although it is dealing with the minority member's view, does at least indicate that the majority of the tribunal must have been aware of the test. Mr Linden submits that not only was the majority aware of it but they also applied it.

He accepts that the tribunal in its decision does not seem to address the issue about the different results of testing the radios in the two vehicles. So far as the distinguishing features relied on by the employer are concerned which he identifies as length of service, past conduct and remorse, he submits that past conduct was dealt with by tribunal. He accepts that remorse is not something upon which the Industrial Tribunal reaches a conclusion; and in so far as length of service is concerned, he submits that the tribunal in referring to length of service was not seeking to say that this was an irrelevant factor. Mr Linden seeks to construe that part of the tribunal's decision as being a comment simply on the facts of this case. It is accepted on behalf of the respondent that if the tribunal did regard the length of service of each of the two employees as an irrelevant factor, that was wrong in law.

We begin our assessment of this case with the long established principle which has been spelt out in many decisions of this tribunal and superior courts, namely, that it is not the function of an Industrial Tribunal to ask itself whether it would have done the same thing as the employer did in the circumstances. The appropriate question is whether the dismissal fell within the band of reasonable responses which a reasonable employer might adopt. We would refer to part of the classic statement of the appeal tribunal delivered by Browne-Wilkinson J, as he then was, in Iceland Frozen Foods Ltd v Jones [1982] IRLR 439 at page 442, paragraph 24. The appeal tribunal there set out five subparagraphs embodying the approach which in their view an Industrial Tribunal should adopt. For our purposes it is necessary only to quote three of those, beginning at subparagraph (2):

"(2) In applying the section an Industrial Tribunal must consider the reasonableness of the employer's conduct, not simply whether they (the members of the Industrial Tribunal) consider the dismissal to be fair;

(3) In judging the reasonableness of the employer's conduct an Industrial Tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;

(4) In many (though not all) cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another."

That statement very properly focuses attention on the reasonableness of the employer's conduct.

The application of that fundamental approach in cases where disparity of treatment of employees is alleged has been considered in a number of judicial decisions. One of the earlier ones was the case relied upon by the Industrial Tribunal in the present case, The Post Office v Fennell. In the passage referred to by the Industrial Tribunal, the Court of Appeal there was spelling out the proposition that equity embodies the concept that like cases should be treated in a like fashion. That of course is a familiar if not elementary proposition, and it forms a proper starting point. But that passage refers merely to similar offences attracting broadly similar penalties. It makes no mention of other relevant considerations which may exist along with the offence itself, in particular, any aggravating or mitigating circumstances. The Court of Appeal there was not, in our judgment, seeking to suggest that an employer or an Industrial Tribunal must stop at that point of the circumstances of the offence. Indeed, the Court of Appeal in that case went on to recognise at paragraph 15 of the decision:

"... that there is an area of manoeuvre within which it cannot be said that an employer is being unreasonable, ..."

Any employer dealing with an individual case is not only entitled to take into account, along with the offence itself, any mitigating factors which may exist and any aggravating ones, but he is required to do so. Without that there is not a proper consideration of the relevant merits. If that is the situation when the employer is dealing with a single case, it must logically follow that an employer is entitled and required to do so when considering two employees who have committed apparently similar offences, and that if the mitigating factors are materially greater in the one case than in the other, the end result may legitimately be different. Aggravating factors likewise may properly bring about a different outcome.

That indeed was the conclusion reached by the Court of Appeal in the more recent case of Paul v East Surrey District Health Authority to which we have referred earlier. At page 309 of that decision, paragraphs 35 and 36 Beldam LJ said this:

" I would endorse the guidance that ultimately the question for the employer is whether in the particular case dismissal is a reasonable response to the misconduct proved. If the employer has an established policy applied for similar misconduct, it would not be fair to change the policy without warning. If the employer has no established policy but has on other occasions dealt differently with misconduct properly regarded as similar, fairness demands that he should consider whether in all the circumstances, including the degree of misconduct proved, more serious disciplinary action is justified.

An employer is entitled to take into account not only the nature of the conduct and the surrounding facts but also any mitigating personal circumstances affecting the employee concerned. The attitude of the employee to his conduct may be a relevant factor in deciding whether a repetition is likely. Thus an employee who admits that conduct proved is unacceptable and accepts advice and help to avoid a repetition may be regarded differently from one who refuses to accept responsibility for his actions, argues with management or makes unfounded suggestions that his fellow employees have conspired to accuse him falsely."

Clearly an employer must consider any arguments about disparity of treatment raised by an employee, and if it distinguishes between employees in the sanctions which it imposes, it must do so on relevant grounds. But if it does consciously distinguish between two employees on relevant grounds, even though they have committed similar misconduct, then an Industrial Tribunal should simply ask itself: was it outside the range of responses of a reasonable employer to draw such a distinction in the circumstances? The same approach, albeit using different language, is embodied in another two passages in the decision of the Court of Appeal in Paul. Thus at paragraph 30 of that decision Beldam LJ said this:

" The first question therefore, is whether the industrial tribunal could reasonably infer from the reasons given by the appeal panel either that they had failed to consider the arguments of disparity or that, having considered them, they had irrationally concluded that the cases advanced were not truly comparable."

In his judgment in the same case, Sir Christopher Slade said this:

"I agree that in the light of the appeal panel's decision the industrial tribunal was not entitled to investigate the allegedly comparable cases for itself and to make its own findings as to what had actually occurred in those cases and itself to decide whether a comparison between the employer's treatment of the case of Mr Paul and that of the other employees concerned established inequitable treatment for the purposes of s.57(3) of the 1978 Act."

Those passages seem to us also to follow and endorse an earlier decision of the Court of Appeal in the case of Securicor Ltd v Smith (ante). In that case emphasis was placed upon the approach being one of considering whether the employer had consciously sought to distinguish between the two cases and, if he had, whether he had done so on rational grounds.

With those principles in mind, we turn consider the Industrial Tribunal's decision in the present case.

The tribunal below approached this matter on the basis quoted earlier, namely, that its task was to decide "whether the dismissal was reasonable in all the circumstances of the case". That on the face of it seems to us to be adopting the heretical test of asking whether the tribunal considered the dismissal to be fair, and is contrary to the approach spelt out by Browne-Wilkinson J in the Iceland Frozen Foods case and adopted in many other cases. The tribunal does not appear to be asking itself in that part of its decision whether the employer's decision fell within the band of responses that a reasonable employer might properly have given. It seems to suggest that the tribunal was simply putting itself in the shoes of the employer in deciding whether the course of action adopted was one which it would have adopted.

That of course is only one sentence in the decision. But the impression that the tribunal here was adopting the wrong approach in law is born out by the paragraphs which then follow. In those paragraphs the majority examine the various considerations as if they were making the decision whether to dismiss or not. That is particularly so in paragraph 9 of the decision, to which we have earlier made reference. The Industrial Tribunal seems to have substituted its own view of the facts and of the conclusion to be drawn from those facts for those of the employer.

Thus in paragraph 10 of its decision, the tribunal says that the dismissal was unfair because "the Tribunal consider that he was treated inconsistently". Nowhere do the majority of the tribunal make it clear that they are applying the right test to which we have referred earlier. Nowhere does the majority of the tribunal ask itself: did the employer have rational and proper grounds for drawing this distinction given that the employer was consciously comparing the two cases.

When the majority of the tribunal deal with the question of the difference in length of service between Mr Talbot and Mr Johnson, they say that they do not accept that that is a ground for drawing a distinction because a person with four years service is entitled to be treated as fairly as a person with 20 years service. That, in our view, misses the point. Both employees are entitled to fair treatment, but when an employer is faced with serious misconduct, justifying dismissal, he is entitled to attach greater weight as a mitigating factor to a service record of 20 years than to one of four years, depending of course on any differences that there may be in the quality of that service. It was long ago established that length of service may legitimately influence the question whether dismissal is a fair sanction to impose. See Johnson Matthey Metals Ltd v Harding [1978] IRLR 248. Once that is recognised, then a marked difference in length of service may properly contribute to a distinction being drawn between the sanctions to be applied in two cases.

We do not accept Mr Linden's ingenious argument that the Industrial Tribunal in that passage was merely looking at the merits of this particular case. The reference to 20 years service, when Mr Johnson had 12 years service, shows that the tribunal was making a general point as to the irrelevance of this factor. In regarding it as irrelevant, the tribunal was again adopting, in our view, an incorrect approach as a matter of law.

As for the relevant consideration of remorse and the attitude of the employee, there is no mention of that in the Industrial Tribunal's conclusions. We are not satisfied that the majority took account of the fact that that was a legitimate factor for the employer to have weighed in the balance.

Finally the way in which the Industrial Tribunal dealt with the Court of Appeal decision in the case of Paul is very difficult to understand. To say that Paul does not overrule the case of The Post Office v Fennell, and that parity is important, fails to acknowledge the very important point being made in Paul, namely, that an employer is entitled to distinguish between employees who have been guilty of similar misconduct on the ground of their personal mitigating circumstances, including their respective attitudes towards their misconduct. That was the approach applied by the employer in the present case. The employer's decision to distinguish between these two employees required to judged by the Industrial Tribunal on the basis of whether the distinction drawn between Mr Talbot and Mr Johnson fell within the band of responses which a reasonable employer might have made. In our view, it was not so judged in the present case, and for that basis reason this appeal must be allowed.

We have considered whether it would be appropriate in this case simply to substitute a finding of fair dismissal, but because our decision is based upon the incorrect approach having been adopted by the Industrial Tribunal, we have decided that the appropriate order and remedy in this case should be one that the matter be remitted to a differently constituted Industrial Tribunal for it to be reheard.