United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR COLIN HENSON (Representative) PPCL Enterprise House Great North Road Little Paxton Cambs PE19 4BQ


 


JUDGE PETER CLARK: This is an appeal by the employer, Optikinetics Ltd, against a decision of the Bedford Industrial Tribunal sitting on 7 July 1997, which found that the Applicant, Mr Whooley, had been unfairly dismissed and ordered that the Appellant pay the sum of £10,575.66 in compensation for unfair dismissal, and further that he had been dismissed in breach of contract, and ordered the Appellant to pay a further sum of £3,366 by way of damages.

The Tribunal's decision, with extended reasons, was promulgated on 27 August 1997. The outline facts were these: the Respondent Employee was employed by the Appellant, a medium-sized design and manufacturing company, from 9 March 1993 until his dismissal, which they found to have taken effect on 18 February 1997. During the course of his employment he was promoted to the position of Head of the Screen Printing Department. He enjoyed a privilege of being allowed to do his own printing work using company facilities. The Appellant had laid down certain guide lines for his enjoyment of that privilege in a letter to him, dated 3 May 1996, which reads:

"Dear Kevin,

With regard to your private work.

It was agreed, with your predecessor, that private work could be carried out by the silk screen printer provided that this was done outside of normal working hours, did not cause any form of disruption, was secondary to company business and that materials used were paid for.

To be frank, you have infringed on all of the above points and should be made aware that this is a privilege that can and will be taken away should infringements continue. This, in effect, is one step away from a written warning.

Some guidelines need to be laid down and adhered to. If they are followed there is no problem.

1. No outside work can be carried during any part of any persons working day. That means: If you do any private-work, in future, it must be after 5.00pm and at weekends ONLY. No films or screens during tea breaks or lunch breaks or screening in the morning before your start time etcetera because this does cause disruption.

2. Any outside print work must be cleared from normal working areas during working hours.

3. Optikinetics work takes precedence over any outside work at all times.

4. You must list the materials that you use (ie. films, stencils, screens, cleaning materials, inks etcetera) that are paid for the company and pay for their use. According to Harry this has not been done.

I am disappointed that I feel the need to put something down, officially, on paper regarding attitude and working practices. We all have our faults. Mine is filing and paperwork, at which you excel so, the above should be easy for you."

On 16 January 1997 the Respondent, by his own admission , breached those guidelines by asking a junior employee, during working hours, to help in a stage of one of his private jobs. This took about five minutes at a cost of no more than £2 in materials and minimal disruption to the Appellant's business.

The Tribunal found that this was a minor and isolated transgression. The Appellant, however, took a serious view of the incident. Disciplinary proceedings ensued and at the conclusion of the disciplinary meeting held on 30 January 1997 the Appellant came to the view that the Respondent was guilty of gross misconduct entitling the Appellant to summarily dismiss him. He was told that he would be summarily dismissed subject to him accepting the option of resigning and receiving a payment of around £4,000.

On 18 February, the Respondent having declined to resign, the Appellant confirmed his summary dismissal, which they said was effective as at 30 January 1997. The Industrial Tribunal identified the issues before them as:

First, whether the Appellant acted reasonably in dismissing on grounds of conduct within the provisions of Section 98(4) of the Employment Rights Act 1996.

Secondly, whether at Common Law the Appellant was in breach of contract by the summary dismissal without notice for alleged gross misconduct.

Third, what was the effective date of dismissal for the purposes of the Statutory Provisions?

And finally, if the dismissal was unfair and/or wrongful, what compensation and/or sums due under the contract and/or contractual damages was the Respondent entitled to?

As to the question of unfair dismissal, the Tribunal concluded that no reasonable employer exercising minimum standards of acceptable industrial relations practice could have concluded that dismissal was an appropriate remedy for this single, minor breach of the guidelines by a long-standing employee of otherwise good record, notwithstanding the involvement of an innocent, junior employee. The Tribunal regarded the Appellant's description of the incident as "fraud or theft" as over-dramatic.

Further, they took into account the wording of the letter of 3 May 1996 and concluded that the letter told the Respondent that the sanction for breach of the guidelines therein contained would be withdrawal of the privilege and/or a written warning, rather than the penalty of dismissal. To that extent we infer the Tribunal found that the Respondent was lulled into a false sense of security. Accordingly they found that the dismissal was unfair.

Secondly, they found that the conduct on the part of the Respondent was not so serious as to amount to gross misconduct such as to entitle the employer to summarily dismiss the Respondent at Common Law. Accordingly the Claim for Breach of Contract was made out.

Thirdly, they found that the effective date of termination was 18 February 1997. There were alternative submissions put before the Industrial Tribunal. For the Appellant it was contended that the dismissal took effect on 30 January, the date of the disciplinary hearing. For the Respondent it was said that the effective date of termination was 18 February, when the letter confirming dismissal was sent to the Respondent. It is well established that an employer cannot back-date a dismissal. It seems to us that the Tribunal made a finding of fact that the effective date of determination was 18 February.

When dealing with the question of compensation the Tribunal made two material findings:

The first was that they considered that, although the Respondent's conduct on 16 January 1997 clearly contributed to the dismissal in a causal sense, nevertheless they considered that it was just and equitable that the basic and compensatory awards should not be reduced at all. They observed that that finding reflected their view on the facts that the penalty imposed of summary dismissal was grossly disproportionate to the misconduct.

The second point relates to the Respondent's obligation to take reasonable steps to mitigate his loss. They found that for a period of six weeks after his dismissal he looked for alternative employment as a screen printer without success and thereafter resolved to try to carry on that business on a self-employed basis. They were satisfied that in taking that course the Respondent had taken reasonable steps to mitigate his loss and they awarded him Future Loss of Earnings for a period of eighteen months.

This is a Preliminary Hearing, held to determine whether or not the appeal raises any, and if so what, arguable points of law to go forward to a full appeal hearing. Mr Henson, on behalf of the Appellant, has advanced four, separate Grounds of Appeal before us.

The first is that the Tribunal substituted their own view for that of the employer evaluating the seriousness of the incident on 16 January 1997., that this was an impermissible exercise and that accordingly the finding of Unfair Dismissal was flawed. That is not how we read the Tribunal's reasons. They plainly had in mind that the question was not what they would have done but what a reasonable employer would have done and they concluded that dismissal fell outside the range of reasonable responses. First, by reason of the nature of the disciplinary offence but secondly, and we think equally importantly, because of the terms of the letter of 3 May 1996 and the sanction which the Respondent could reasonably expect to be applied in the event that he was in breach of those guidelines. We therefore reject the first ground of appeal.

His second point relates to the finding on contribution. Here we think there is an arguable point which should proceed to a full hearing. It is established in principle, we think, that the question when considering contribution under Sections 122, sub-section 2 and 123, sub-section 6 of the 1996 Act is whether the employee's conduct has contributed to the dismissal. For this purpose the employer's conduct is irrelevant and the question is whether the employee's conduct contributed to the dismissal, not to the unfairness of the dismissal, see Parker Foundry Ltd v Slack [1992] IRLR page 11.

We think therefore that there is an arguable self-misdirection in the Tribunal's approach to the question of contribution. This case is also unique in our experience. We have come across findings of contribution ranging anywhere from 5% to 100%, but never a case in which no deduction is made in circumstances where a Tribunal finds that the employee has contributed by his own blameworthy conduct to the dismissal. In these circumstances the appeal will proceed to a full hearing on this ground.

The two remaining grounds are as follows: It is submitted that the Tribunal erred in finding that the effective date of termination was 18 February and not 30 January 1997. We are satisfied that the Tribunal reached a permissible finding of fact on this issue and it is not open to this Tribunal to interfere with that finding.

The final point relates to the Tribunal's assessment of compensation on the basis of eighteen months future loss of earnings. Having considered the way in which the matter is put in paragraphs 34 to 36 of the Tribunal's Reasons, we are quite satisfied that the Tribunal reached a permissible finding, that the Applicant had taken reasonable steps to mitigate his loss by carrying on business on his own account after a six week period looking for alternative employment as a screen printer. The onus lies on the employer to show that the employee has failed to mitigate his loss. Plainly this employer failed to discharge that onus, in the view of the Tribunal, on the facts of this case.

The upshot is that this appeal will proceed on one ground only, that is the contribution point, which we have identified earlier in this judgement. For the purpose of the full appeal hearing we give the following directions:

The case will be listed for half a day; Category C. There will be an exchange of skeleton arguments not less than 14 days before the date fixed for the full appeal hearing. Copies of those skeleton arguments to be lodged with this Tribunal at the same time.

There is no requirement for Chairman's Notes of Evidence in order to deal with the contribution point.

Finally, we see from the Respondent's PHD Form that he will be seeking legal aid and in these circumstances we accede to his application for an extension of the time for filing an Answer. In the first instance that will be a 28 day extension. If a further extension is required then application must be made to the Registrar.