United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR P COWAN (of Counsel) Messrs Berrymans Lace Mawer Solicitors Castle Chambers 43 Castle Street Liverpool L2 9SU
For the Respondent	MR T LINDEN (of Counsel) Messrs Pattinson & Brewer Solicitors 30 Great James Street London WC1N 3HA


 


JUDGE HICKS QC: Mr Kerr, the Respondent to this appeal, had been employed by the Appellant and its predecessors for nearly thirty years, in fact since October 1967, when he was dismissed on 3 April 1997, the effective date of termination of his employment for statutory purposes being 26 June 1997. He was a heavy goods vehicle driver. He complained to the Industrial Tribunal (as it then was) of unfair dismissal.

1. The reason for the dismissal, in terms of the categories provided for in section 98(2) of the Employment Rights Act 1996, was found by the tribunal to relate to Mr Kerr's conduct, in that the employer believed that he had failed to report a road traffic accident in which his vehicle had been involved, that failure being a breach of his contract of employment. The employer had conducted a disciplinary hearing, at the close of which the decision to dismiss was taken, and an appeal hearing resulting in the confirmation of that decision.
2. Having made its finding that the dismissal related to conduct the tribunal next asked itself whether the belief on the basis of which the employer dismissed was genuine and one which it was reasonable for the employer to hold and answered both of those questions affirmatively.
3. The tribunal then addressed issues of fairness and found that the employer's investigation and its disciplinary procedure at and before the disciplinary hearing were flawed, but that the appeal hearing was effective to cure the earlier defects. It rejected a submission on Mr Kerr's behalf that the employer dismissed solely because its own disciplinary code provided for dismissal in such a case (in the sense, presumably, that it gave failure to report an accident as an example of gross misconduct).
4. None of those findings is challenged by either party.
5. The tribunal finally considered the significance of the fact that, as was common ground, Mr Kerr had an unblemished record over a period of some 29 years' continuous service. He had had minor accidents in the past which he had always reported. The employer's representative had cited the case of Cunningham v Harrow [1996] IRLR 256 for the proposition that in the case of gross misconduct an employee will not be saved from dismissal merely by long service. The tribunal considered Cunningham distinguishable on its facts because of the blighted disciplinary record of the applicant there. The extended reasons of the tribunal on this point continue:

"... The respondents accepted that the essence of the misconduct here as they perceived it was not in the having the accident but in the failing to report it. We consider that the applicant's 29 years continuous service and his unblemished record were circumstances in this case which place the action of the respondents in dismissing him beyond the band of reasonable responses that a reasonable employer would make. In addition there is the circumstance that the accident with the respondents believed had occurred unreported was on their own evaluation before us a minor or trivial accident. It consisted of minor collision damage to a shop facia board. Whilst it is understandable that the respondents would want to maintain as consistent a policy as possible in the matter of reporting of accidents great or small, it would in our view be unreasonable for an employer to refuse to give any weight at all to the difference between a major and a minor accident. If an employer were totally inflexible on that point it would automatically mean that he would be unable to give any credit at all for any other circumstances in the case, such as long service and good behaviour, but Section 98(4) of the ERA clearly indicates that the reasonableness of the dismissal as a course of action must be considered in the context of a range of circumstances. We do not think that it is open to the respondents to adopt a policy which over-rides the Act."

6. That, implicitly, amounted to a finding that the dismissal was unfair and the tribunal then proceeded, in its reasons, to assess the amounts of the basic and compensatory awards on the basis of full liability.
7. The employer appeals on two grounds and applies for leave to add a third.
8. The first ground of appeal is that the tribunal erred in law in that it decided the issue of fairness under section 98(4) of the Employment Act 1996 on the basis of how it would itself have acted rather than by considering whether the decision to dismiss the employee was one which it was open to a reasonable employer to take in the circumstances.
9. There can be no doubt, in our view (and we did not understand Mr Cowan, for the employer, to contend otherwise), that the tribunal ostensibly directed itself impeccably on this issue by expressing its central conclusion in the form of the finding that the relevant circumstances "place the action of the respondents in dismissing him beyond the beyond the band of reasonable responses that a reasonable employer would make". The employer's case must therefore be, and is, that the tribunal can be seen at other points to have disregarded that correct self-direction or to have made findings inconsistent with its conclusion or that in the circumstances it was bound by authority to reach the opposite conclusion.
10. The Employer's submissions in those regards were marshalled under six numbered heads, but in our understanding heads (i), (ii) and (iv) all concern the tribunal's treatment of the employer's own evaluation of the accident as minor or trivial and are closely connected. The criticism is put in various ways. The last sentence of the passage quoted in paragraph 6 above is said to be a finding that the employer did "adopt a policy which over-rides the Act" and therefore to contradict the earlier finding reported in the second part of paragraph 4 above. The preceding sentence is treated as containing a conclusion that inflexibility by this employer made it unable to give any credit for circumstances such as long service and good behaviour. It is alleged to be contradictory to accept, as the tribunal did, the reasonableness of the employer's wish to maintain as consistent a policy as possible on reporting accidents while relying on the triviality of the accident as one of the factors to be taken into account in assessing whether the employer's action was within the band of reasonable responses.
11. In our judgment, to accept these criticisms as grounds for a conclusion that the tribunal overlooked or disregarded its own correct self-direction would amount to the sort of "nit-picking" which has been deprecated by the Court of Appeal. The repeated references to "an employer" show that in the relevant passage the tribunal is making general observations rather than specific findings about this employer, and indeed in the second instance the tribunal quite plainly expressed no such conclusion as is alleged, while in the third the supposed contradiction simply does not exist. Any remaining infelicity of expression is in our judgment insufficient to justify a conclusion the tribunal erred in law, even reading the extended reasons in isolation. Our conclusion is, however, reinforced by taking into account, as we believe we are entitled to do, the way in which the tribunal first expressed itself on the same issue in its summary reasons:

"... we do not think that dismissal was within the band of responses to be expected of a reasonable employer in this case, bearing in mind the applicant's 29 years service, his unblemished conduct record, and the fact that the respondents own view in evidence today was that the accident was minor. Whilst the respondent has good reason to maintain as consistent a policy as possible in the matter of reporting accidents it would be unreasonable in our view for any employer to fail to give weight to the fact that the accident which did occur in this case was on the respondent own estimation not serious, and that the police appear to have treated it as a minor incident that did not merit their involvement. This coupled with 29 years of service should reasonably be taken in consideration by any reasonable employer."

12. A fair reading of both versions is, in our view, that the tribunal is not making specific findings that this employer disregarded the triviality of the accident or was "totally inflexible", or for that matter disregarded Mr Kerr's length of service and unblemished record, but rather is giving its reasons for concluding that on the facts of this case to dismiss in the concurrent presence of all three factors was outside the range of reasonableness, even after giving due weight to the existence and reasonableness of the employer's desire for consistency in the enforcement of the obligation to report. Just as it is not for the tribunal to substitute its view for that of the employer on decisions which were for the latter, so it is not for us to substitute our view for that of the tribunal on the issues of fact and degree which it had to determine.
13. There is in head (iii) of the employer's submissions a complaint that the tribunal misunderstood the relevance of the Cunningham case and misdirected itself in distinguishing it. We were not, however, ourselves taken to Cunningham, which as we understand it was a disparity case, in support of any proposition of law advanced in the course of the appeal, and need not therefore linger over it.
14. Head (v) relies on heads (i) to (iv) for the submission that the tribunal substituted its view of the appropriate sanction for that of the employer and therefore adds nothing to the points already covered.
15. The final head of the submissions under the first ground of appeal is ostensibly that the tribunal "failed to consider" the "important circumstance" that Mr Kerr denied his involvement in the accident throughout. It is, however, quite plain that the tribunal did in truth have well in mind this aspect of the history; it is set out in some detail in its recital of the facts. The gravamen of this submission is in reality that the tribunal was, and we are, bound by the decision in British Leyland UK Ltd v Swift [1981] IRLR 91 to treat this element of the factual setting as decisive in the employer's favour. It is therefore necessary to examine the facts of that case and the judgments of the Court of Appeal in some detail.
16. The facts were that the employee had pleaded guilty to a charge of fraudulently using his employer's road fund licence found on his own vehicle. The employer conducted an investigation, in the course of which the employee gave an explanation different from that which he had originally given to the police. The employer dismissed him for gross misconduct. The Industrial Tribunal found the dismissal unfair on the ground that it was too severe a penalty for a comparatively minor offence, already dealt with by the magistrates, by an employee of long service with a good work record. The Employment Appeal Tribunal, by a majority, dismissed the employer's appeal, but the Court of Appeal allowed a further appeal and held the dismissal fair.
17. There were two grounds for that decision. The first was that the Industrial Tribunal had applied the wrong test by applying its own view of what a reasonable employer would have done instead of remembering that "in all these cases there is a band of reasonableness, within which one employer might reasonably take one view, another quite reasonably take a different view" (per Lord Denning MR at paragraph 11). That would in itself have been a sufficient reason for allowing the appeal and turns on a proposition of law not in question in the present case; we have dealt in paragraphs 9 to 13 above with its application to the reasons of the tribunal below for the decision now under appeal.
18. The members of the Court of Appeal in British Leyland UK Ltd v Swift, however, gave a further reason for their decision. Lord Denning said:

"But there is a further point. It is whether the Industrial Tribunal took into account all relevant considerations. It seems to me that they failed to take into account the conduct of Mr Swift after the offence was discovered. He did not come forward and say, 'I am sorry; I made a mistake. I ought not to have done it. I will not do anything of the kind again'. He did not even tell the same story he told to the police officer. He forward a 'cock and bull' story about his having lent his Land Rover to another man: and the other man had got the tax disc: and it was the other man's fault: and so forth. As to that, the Industrial Tribunal were quite outspoken. They said: 'It is flying in the face of probability to suggest that he and Mr Rawlins were giving a truthful and accurate account'. So there it is. Mr Swift did not 'come clean' when he was found out. He put forward a wholly untruthful account. That seems to me to be a most relevant consideration for the employers to take into account in deciding whether it was reasonable to dismiss him or not. But there is not a word about it in paragraph 12 when they set out their reasons. On the contrary, the offence was mentioned as being 'a relatively minor one'. They refer to it almost as if he had paid the penalty and ought not to be penalised for it any more. That was the wrong approach. If a man is convicted and fined, it is a ground for dismissing him, not for keeping him on."

19. Ackner LJ, on the same topic, said:

"It seems to me quite clear that in justifying their surprising conclusion, to which I have referred, they have confined their attention to the offence, and they have not done that wholly accurately; ... But what is much more important is that they leave out of account his subsequent behaviour. The apparent justification for leaving that out seems to be found in the phrase, 'Mr Swift is not employed in a fiduciary capacity'. But it is a truism that trust is one of the important foundations of the relationship between master and servant; and, in my judgment, to have confined their attention to the offence, and not to his conduct subsequent to the offence, was a misdirection. ... If they had taken into account the subsequent conduct, I feel sure they would have reached another conclusion - a conclusion that a reasonable employer had at least the option to dismiss an employee in these circumstances, if the employer were so minded."

20. Griffiths LJ, after expressing surprise at the tribunal's decision and recording that the Employment Appeal Tribunal also found it surprising but felt powerless to intervene because they could not go so far as to say that finding of the tribunal was perverse, continued:

"Unwilling to think that an Industrial Tribunal would be perverse, I ask myself, how did they come to this rather astonishing conclusion? For myself, I agree, for the reasons given by my Lord the Master of the Rolls and Lord Justice Ackner, that the answer is to be found in the fact that, when they came to consider the fairness or otherwise of the dismissal, they appear to have concentrated exclusively on the mitigating factors affecting the employee, and entirely disregarded the very serious breakdown in trust which must have arisen from this employee persisting in a lying explanation of his conduct."

21. We do not see how those passages can justify a general proposition that a denial by the employee of an allegation reasonably believed by the employer must always compel a tribunal to find that summary dismissal by the employer is within the band of reasonable responses, or can entail that the tribunal here must have erred in law. There are two important features of the facts as found or assumed in British Leyland UK Ltd v Swift which will not universally be present and were not present here.
22. The first is that the Court of Appeal treats the guilt of the employee as established. That was no doubt because he had pleaded guilty and been convicted. But for those circumstances it would have been contrary to the very principle enunciated by the Court of Appeal itself in the first ground for its decision to have investigated or reached conclusions on a matter as to which the issue for the tribunal and appellate bodies was not what had happened but what the employer genuinely and reasonably believed. Here Mr Kerr's involvement in and knowledge of the alleged accident, denied by him throughout, were quite rightly never made the subject of findings by the tribunal, which confined its attention to the existence, genuineness and reasonableness of the employer's belief on the subject.
23. The second feature is that the fact and nature of the denials were (or were treated by the Court of Appeal as having been) one of the employers' reasons for dismissal in British Leyland UK Ltd v Swift. Here the sole reason for dismissal was the failure to report; the employer did not, of course, accept Mr Kerr's denials, otherwise it could not reasonably have believed in that failure, but they were not relied upon as a further and separate ground for dismissal and there was no investigation before the tribunal of the questions which would have arisen had they been so relied upon.
24. We conclude that we are not required by the authority of British Leyland UK Ltd v Swift to resile from the conclusion which we should otherwise reach that there is no error of law shown in the tribunal's decision or reasons.
25. The second ground of appeal is that the tribunal's decision was perverse. The form of perversity relied upon here is not the disregard of evidence not recorded in the tribunal's reasons, but a self-evident discordance (it is said) between the tribunal's own findings of fact and its conclusions. Perversity of that kind is essentially a matter of first impression. We have carefully considered the tribunal's findings and reasons, in particular those relied upon by Mr Cowan in support of this submission. We have been reminded by Mr Cowan and Mr Linden of the test to be applied on this issue, as to which they are at one, and have applied it. We are of the clear view that this ground of appeal is not made out.
26. That disposes of the appeal as constituted by the original notice of appeal. Mr Cowan applies, however, to add as a further ground that the tribunal erred in failing to find that the dismissal was caused or contributed to by the employee's actions, and in failing to reduce the compensatory award accordingly.
27. The jurisdiction to reduce an award on this ground arises from section 123(6) of the Employment Rights Act 1996, under which a tribunal which finds that the dismissal in question was to any extent caused or contributed to by any action of the complainant is to reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding. As is implicit in those words, and is confirmed by authority, a tribunal exercising that jurisdiction must make its own findings of fact as to any relevant "action of the complainant"; it is no longer concerned only with the employer's beliefs and their reasonableness.
28. Mr Cowan accepts that this point was not raised or argued before the tribunal below. It appears that after hearing the evidence and submissions on liability the tribunal announced its decision and proceeded at once to receive and consider evidence and submissions on the level of the award of compensation. There was no application for or offer of an adjournment or a separate remedies hearing. The evidence tendered on compensation did not include any further evidence as to the accident or Mr Kerr's knowledge of it, nor (we take it) was the tribunal asked to make its own findings in those regards.
29. It is, as we understand it, common ground, and in accord with our own impression, that when the issue of a reduction under section 123(6) is raised a tribunal may be asked to receive additional evidence, with or without an adjournment, but equally may be invited to deal with the issue on the basis of the evidence already adduced on the liability issue, without more, albeit for the different purpose described in paragraph 28 above. As is apparent from paragraph 29 above neither course was explicitly adopted here.
30. The general rule, established by Kumchyk v Derby City Council [1978] ICR 278, is that this appeal tribunal will not entertain points of law not raised by the appellant below, save in certain exceptional circumstances which do not arise here. It is not a ground for departing from that rule that the omission was caused by lack of skill on the part of an appellant appearing below in person, or of his or her advocate or representative, nor is there any duty on the tribunal of first instance to raise points itself.
31. Mr Cowan accepts that statement of the general rule, but relies on Langston v Cranfield University [1998] IRLR 172 for the propositions that (i) there are certain principles now so well established that a tribunal may be expected to consider them as a matter of course, and (ii) an issue, even if not explicitly raised, may be implicit in one which is, and submits that that decision of another panel of this appeal tribunal is applicable to and should be followed in this case. Mr Linden, for the employer, submits that in so far as Langston may be seen as demonstrating a more liberal and flexible approach than Kumchyk it must be disregarded as inconsistent with the full rigour of the orthodox position as re-asserted by the Court of Appeal in Mensah v East Hertfordshire NHS Trust [1998] IRLR 531.
32. The facts of both Langston and Mensah, and the fresh points sought to be raised there on appeal, are very different from those before us and we do not consider it necessary to recount them or to enter upon any general discussion of the respective merits of liberal and rigorous approaches to the application of the rule in Kumchyk v Derby City Council, since even if (which we need not and do not decide) Mr Cowan's propositions are well founded we are satisfied that they do not cover the facts of this case.
33. Proposition (i) concerns the question how far, if it embarks upon consideration of an issue raised before it or necessary for the determination of one which is, a tribunal must apply principles derived from authority even if it is not reminded of them and its attention is not drawn to the relevant authority, and therefore falls into an appealable error of law if it does not do so. But here there is no suggestion that having addressed an issue of reduction under section 123(6) the tribunal applied wrong principles in resolving it; it never did address any such issue because it was never asked to do so.
34. Proposition (ii) requires for its application that the issue not raised may be implicit in one which was. In so far as that may sometimes be the case (which as we have said we need not decide) we are clear that it cannot be so as between the issues of fairness and contributory conduct. The former concerns the employer's procedure and his beliefs about the employee's conduct, the latter the employee's conduct as objectively determined by the tribunal in a way not examinable by it on the issue of liability. It is perfectly consistent for an employer to justify a dismissal as fair by asserting a genuine and reasonable belief at the date of dismissal in the existence of an act of gross misconduct on the part of the employee while at the same time accepting in the light of after-acquired knowledge that the employee was in truth innocent and did not cause or contribute to the dismissal. So far from having implicitly raised the issue of contribution such an employer, if in the event found to have acted unfairly, cannot raise it at all. An employer who is entitled to raise the issue of contribution needs to make it clear to the tribunal that he is doing so, since that involves an embarkation by the tribunal upon new issues of fact which it has hitherto been at pains to exclude from its consideration.
35. We therefore reject the application to amend the notice of appeal, and having already rejected the grounds contained in the original notice we accordingly dismiss the appeal.