United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR N MILLS Solicitor Messrs Stable & Co Solicitors Maybrook House Queensway Halesowen W Mids B63 4SA
For the Respondent	MR K O' DONOVAN (of Counsel) Messrs Martineau Johnson Solicitors St Philips House St Philips Place Birmingham B3 2PP


 


JUDGE PETER CLARK: This is an appeal by the Applicant before the Birmingham Employment Tribunal Mr Hitchman against that Tribunal's remedies decision promulgated with extended reasons on 20 March 1998.

Background

The Appellant was employed by the Respondent from 6 December 1976. He worked as a Computer Operator/Programmer in the computer department. Part of his function involved processing payroll information. He acknowledged to the Tribunal that it would be wrong to pass confidential information to any person.

During the summer of 1996, in a casual conversation with a Purchasing Manager, Steve Birch, Mr Birch made a comment to the effect "I bet Neil Cornock", a recently recruited Purchasing Manager, "is on more than me". The Appellant responded by saying that he did not know but he could be earning a few thousand more.

The Appellant thought nothing more about that conversation until he was asked about it by the Respondent's management on 17 October 1996.

In September 1996 Mr Birch raised the question of the salary differential between himself and Mr Cornock, and said that he wanted a salary increase. The Respondent wished to know whence Mr Birch had learned of the pay differential which in fact existed. Enquiries by Mr Johnson, the Materials Manager, revealed that the Appellant was the informant.

On 17 October the Appellant was suspended. The following day he was dismissed. The letter of dismissal informed him that he was dismissed with immediate effect for gross misconduct, that is, breach of confidentiality by giving one employee information about the salary of another. He was informed of his right of appeal.

The Appellant appealed first to Mr Hawley, the Marketing Director. Following the appeal hearing held on 5 November 1996 the Respondent wrote to the Appellant informing him that Mr Hawley had concluded that there had been a breach of confidence, but that in view of the Appellant's long service and previous record the penalty of dismissal was rather severe and should be commuted to a final written warning. However, it was felt that the Appellant could not return to a position involving the handling of confidential information. Attempts would be made to find him an alternative position within the works. He was informed that he had a right of final appeal to the Managing Director.

The Appellant pursued a further appeal which was heard by Mr Sullivan on 14 November 1996. He recognised that the 5 November letter was misleading or confusing. Following the hearing Mr Sullivan wrote to the Appellant on 15 November, agreeing with Mr Hawley's view, but explaining that it was not Mr Hawley's decision to downgrade the original dismissal decision, but to offer alternative employment, coupled with a final written warning. That was at all events the effect of Mr Sullivan's final decision.

Various vacancies were mooted, but none were acceptable to the Appellant. In accordance with the Respondent's usual practice, wages had been paid during the appeal process. Payment finally ceased on 29 November 1996. The Appellant did not return to the Respondents but commenced proceedings by an Originating Application presented to the Employment Tribunal on 3 January 1997.

The Tribunal Decisions

Liability

The Tribunal held a liability hearing over 2 days on 10 July and 8 October 1997. Their decision on liability, promulgated with extended reasons is dated 21 November 1997.

The issue before them was identified by the Tribunal as one of unfair dismissal only in paragraph 2 of the liability reasons. That broke down into four separate questions, more particularly set out paragraph 3 of the reasons.

"3. The issues to be determined by the tribunal are:

- was the applicant dismissed or did he resign?

- if the applicant was dismissed, was the dismissal fair or unfair?

- if the applicant resigned, did his resignation come within section 95(1)(c) of The Employment Rights Act 1996; and if there was a constructive dismissal, was it unfair?

- the effective date of termination of the applicant's contract of employment"

We note that the Tribunal did not purport to decide the question of wrongful dismissal at common law, that is, a claim for breach of contract for which the remedy is damages representing payment in lieu of notice due under the contract.

As to the issues determined by the Tribunal the Tribunal found:

1. that although the original dismissal on 18 October 1996 was expressed to be with immediate effect, because wages continued to be paid until 29 November, during the appeal process, that latter date was the effective date of termination.
2. The dismissal was unfair. Although the Respondent had established a potentially fair reason for dismissal relating to the Appellant's conduct, the dismissal was unfair because:

   (a) the breach of confidentiality was not sufficiently serious to justify dismissal; (reasons paragraph 29) and/or

   (b) the dismissal fell out with the band of reasonable responses open to the employer, particularly in light of Mr Hawley's view that dismissal was rather severe and should be commuted to a final written warning; and

   (c) the dismissal was procedurally unfair, such procedural defects not having been cured on appeal.

   Having found the dismissal to be unfair, the Tribunal adjourned the matter for a remedies hearing at which, among other things, the Tribunal would have particular regard to the issues of contributory fault and mitigation of loss (reasons paragraph 36).

   There is no appeal by either party against the unfair dismissal decision.

   Remedies

   The remedies hearing took place before the same Tribunal on 8 December 1997. On this occasion the Tribunal in their remedies decision with extended reasons promulgated on 20 March 1998 identified the issues . They were:

3. Reinstatement; or
4. Compensation, taking into account contributory fault and mitigation.

The Tribunal rejected the Appellant's request for a reinstatement order and proceeded to consider compensation.

They held that the Appellant had contributed to his dismissal. The relevant findings were:

5. The Appellant himself acknowledged that he was aware of the need to maintain confidential information and of some disciplinary sanction against him by the Respondent was appropriate.
6. His conduct was blameworthy.
7. It was a causal factor leading to his dismissal.
8. It was just and equitable to assess the degree of contribution at 40 per cent.

As to mitigation of loss, the Tribunal found that it was not unreasonable for the Appellant to reject the alternative employment offered by the Respondent; that it was reasonable for him to spend 6 months looking for fresh employment, and thereafter he should have taken less well paid work. He had in fact been continuously unemployed since 29 November 1996, that is, just over 1 year.

Accordingly the Tribunal made a basic award, reduced by 40%, of £2,205. The compensatory award consisted of (a) full loss of pre-dismissal earnings for 6 months to 31 May 1997 (b) 6 months and 1 weeks partial loss, based on his taking hypothetical less well paid work up to the date of hearing (8 December 1997) and (c) future loss at the partial loss rate for a further 3 months. In addition he was awarded compensation for loss of statutory rights and pension loss. The whole was reduced by 40%. The grand total awarded was £7,767.53.

The Appeal

At the outset Mr Mills abandoned grounds (v) and (vi) of his Notice of Appeal, on the basis that the claim for statutory notice had not been pursued before the Employment Tribunal. Accordingly the argument centred on the Tribunal's finding of 40% contribution on the part of the Appellant.

He takes 3 points.

First that the Tribunal did not make any finding of fact sufficient to justify the conclusion that the Appellant's conduct was blameworthy. We reject that submission. The material findings were:

(1) that the Appellant acknowledged that it was wrong to pass on confidential information to any person (liability reasons, paragraph 7)

(2) that the reason for dismissal was an alleged breach of confidentiality in that the Appellant revealed that salary information relating to another employee and that reason related to the Appellant's conduct (Liability reasons, paragraph 27), although that conduct was not sufficiently serious to justify dismissal (paragraph 29)

(3) The Appellant acknowledged that some disciplinary sanction was appropriate, possibly in the form of a warning which he would have accepted (Remedies reasons, paragraphs 3(6) and 7(ii)(a))

In these circumstances the Tribunal was entitled to conclude that the Appellant was guilty of blameworthy conduct, as that expression is explained by Brandon LJ in Nelson v BBC (No2) (1979) IRLR 346, paragraph 44.

Next, it is submitted that the Appellant's conduct was not a causal factor leading in whole or in part to his dismissal. Nelson, paragraph 45.

Here the proposition is that the decision by Mr Hawley to commute the penalty of dismissal to a final written warning broke the chain of causation. We reject that contention. The disciplinary procedure, mishandled by the Respondent so the Tribunal found, was triggered by the Appellant's original misconduct. That was not the sole factor leading to dismissal, but it was a causative factor.

Finally, it is submitted that a 40% finding of contribution was perverse. We have been directed to the test for interfering with the level of contribution assessed by an Employment Tribunal on appeal contained in the Court of Appeal decision in Hollier v Plysu (1983) IRLR 260. The level of contribution is essentially a matter of impression and discretion for the Employment Tribunal. We cannot characterise this Tribunal's finding as perverse in the legal sense. Accordingly we reject that third and final argument and in those circumstances, we must dismiss this Appeal.

Costs

Following delivery of our judgment in this appeal, Mr O' Donovan applied for the Respondent's costs in the appeal under Rule 34(1) of the EAT Rules 1993. He submits that there has been unreasonable conduct on the part of the Appellant in bringing or conducting the appeal proceedings.

He has referred us to the costs order made by the Employment Tribunal and referred to in paragraph 13 of the remedies decision reasons. An award of £200 costs was made against the Appellant on the grounds that offers in settlement in excess of the sum awarded by the Tribunal were made by letters dated 6 October and 1 December 1997.

Following the preliminary hearing held on 13 July 1998, when the appeal as originally constituted was allowed to proceed to a full hearing by a division of this Tribunal presided over by Kirkwook J, the Respondent again made persistent attempts to settle the appeal. By letter dated 5 August 1998 the Respondent offered £2,000 over and above the total awarded by the Employment Tribunal to settle the matter. That offer was declined. On 24 August the Appellant's solicitors offered to settle for £13,500, inclusive of the Tribunal's award. As a result, the Respondents increased their offer to £3,000 (exclusive of the Tribunal's award) by letter dated 10 September. That offer was rejected on 24 September 1998. The Respondent made a final offer (exclusive of the Tribunal's award) of £2,500 on 15 October. That offer was rejected on 22 October.

In response, Mr Mills submitted that at the preliminary hearing no indication was given by this Tribunal that the appeal was anything but arguable. It cannot be unreasonable to continue the appeal in these circumstances. Further, the Appellant was entitled to pursue the appeal against the Tribunal's findings of contribution in order to clear his name in the interests of his future employment prospects.

In our judgment the Appellant did act unreasonably in pursuing this appeal in circumstances where:

a) he then abandoned a part of the appeal on which it had been allowed to proceed only at the hearing before us,

b) realistic offers of settlement were made by the Respondents,

c) he was aware, as a result of the Employment Tribunal's costs order, that he was at risk of costs in these circumstances if his appeal failed.

We do not accept that in those circumstances an order allowing the appeal to proceed to a full hearing automatically prevents a cost order being made.

We have taken into account the Appellant's means, and in particular, the fact that he will receive an award of £7,767.53 under the Employment Tribunal's order.

Having been given an indication of the Respondent's costs in the appeal we shall, in the exercise of our discretion, order the Appellant to pay £500 towards the Respondent's costs in the appeal.