United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS EADY (of Counsel) Messrs Otten Penna & Co Solicitors 339 Palatine Road Northenden Manchester M22 4HH
For the Respondents	MR N J HARNEY (Representative) Messrs Nightingales Solicitors 12 St John Street Deansgate Manchester M3 4DX


 


MR JUSTICE MORISON (PRESIDENT): The lay members with whom I am sitting now, after discussion with me, had expressed a wish to sit at the substantive hearing of this appeal if that could conveniently be arranged, and it was. The President is grateful for their assistance in this case.

This is an appeal against the decision of an Industrial Tribunal which was given on 17 June 1997 following a hearing on 3 June at Manchester. By their decision the Industrial Tribunal awarded the Applicant, Miss J.J. Wilson, the sum of £296.23 as compensation for unfair dismissal.

The hearing on 3 June was a remedies hearing, following an earlier determination by the same Industrial Tribunal, whose decision was sent to the parties on 3 June 1997. It is necessary to have both decisions in mind when approaching this appeal.

The Industrial Tribunal at the remedies hearing approached the question of compensation in this way. They first of all asked themselves the question, what were the chances that Miss Wilson would have remained in her employment had the employers acted fairly towards her? They assessed that chance of her remaining in employment at 30% or in other words, they took the view that if the employers had acted fairly, there was a 70% chance that she would have been dismissed.

In relation to deductions for contributory fault, they were of the view that she should have her compensatory award reduced, so that effectively she received 10% of it, which meant that in terms of the compensatory award there was a reduction of 60%, which added to the 30% caused the 90% reduction and in relation to the basic award, they said that that should be reduced by reason of her conduct by 90%.

The appeal is against the reductions made by the Industrial Tribunal and it should be said at the outset, that it is only on very rare occasions that the Employment Appeal Tribunal will be persuaded to interfere with such reductions made by Industrial Tribunals who are the arbiters of the facts, and whose responsibility it is to make the judgments called for in this case.

The background circumstances can be shortly stated. The Applicant had been employed for some time as a Playworker at the Respondent's Playgroup. The Manchester Adventure Playgrounds Association is a charitable organisation which is responsible for running a number of Adventure Playgrounds for Disadvantaged Children, in what might colloquially be described as difficult areas within the Manchester region. They had four such Playgrounds, one at Moss Side where the Applicant worked, one at Ardwick, one at Hulme and one at Benchill.

In 1995 an incident took place involving money and one of the infants under Miss Wilson's care. Put briefly, it would appear that the child arrived at the Playgroup waving a large quantity of money about and insisted on buying Miss Wilson a radio. She plainly ought to have drawn the authority's attention to this incident, and to the attention of the child's parents. The matter came to light some six months later, in April 1996, and following various procedures the Association was of the view that, although it was a serious piece of misconduct, it was not appropriate that she should be dismissed in relation to it, but that she should be given a final warning. That final warning was given to her in early June 1996. Subsequently, the employers resolved that they should transfer her from the Wythenshawe Playground to the Moss Side Playground and she was told of this and told that she was to be transferred.

The employers asserted that the decision to transfer her was not part of the disciplinary action following the incident in September 1995 which had been investigated, but the Tribunal felt on the balance of probabilities, that it did indeed form part of the disciplinary action which had been taken following that incident.

The Tribunal went on to conclude that there was no entitlement in the employers under the contract to require her to move from one Playground to another. But, as a result of the proposal to move her becoming known, a demonstration took place in June, which the Applicant did not organise and apparently, was unaware of, when it commenced. She was not on duty on the day in question, but she came to the Playground with two children and the Tribunal noted that the employers concluded that the Applicant, by her presence at the demonstration, and in particular her failure to leave when the temperature rose, had inflamed the situation and had behaved in a way that was inconsistent with her professional responsibilities, notwithstanding the fact that she was not working.

The Tribunal's decision in relation to this is not entirely clear, but they go on to say in paragraph 4 of their liability decision, that the Respondents, the employers, clearly genuinely believed that she had been guilty of misconduct by attending at the Playground on 15 June and in particular failing to leave when matters got out of hand. They were also entitled to believe, said the Industrial Tribunal, "that the applicant by the remarks she had made was unconcerned about the safety of children". That last finding related to the investigation carried out by the Association into the incident at the demonstration and, it would appear that children had become involved in the demonstration, and were persuading car drivers to sound their horn in support of their case. That involved them in coming near to motor cars, and when this was pointed out to the Applicant, she took the view and said, that she was not on duty at the time and the matter was not her responsibility.

There was then a disciplinary procedure in which the employers acted, according to the Industrial Tribunal, in a way which was unfair. Having examined the issues in question, what then happened was that without allowing her to take any part in it, the Investigating Officer of the 1995 incident made representations to the Disciplinary Tribunal and the Industrial Tribunal found as a fact that the Investigating Officer:

"... contributed substantially to the decision taken by the disciplinary hearing to dismiss the applicant. Had it been the incident standing alone Miss Wilson would not have been dismissed. Clearly the previous incident weighed heavily in the balance. However the disciplinary committee had only the evidence of Mr Ferguson [the Investigating Officer] on this and did not hear from the applicant. In this important and vital procedural matter the respondents had not acted fairly. They should have called Miss Wilson back and a reasonable employer would have given the applicant the opportunity to comment, not only on the previous incident but on the circumstances relating to alleged intimidation and the transfer. Therefore the applicant had been unfairly dismissed."

In their decision on liability, no doubt in order to assist the parties to arrive at a compromise, the Industrial Tribunal indicated that they thought that it was likely that the Applicant only had a 30% chance of retaining her employment. What they said was this:

"The Tribunal in announcing its decision expressed a preliminary view to the parties that had the respondents given the applicant the opportunity to speak it was clear that she would have had no answer whatsoever on the previous incident. Furthermore, it is likely that the decision to transfer her would have been a decision that the respondents would still have taken. The Tribunal therefore felt that at best the applicant had only a 30% chance of retaining her employment. Furthermore the applicant by her behaviour had clearly behaved in an unprofessional manner. In particular the applicant's behaviour in respect of the first incident was reprehensible and the applicant was probably lucky to have retained her employment in respect of that incident. There was therefore certainly a distinct possibility that the Tribunal would be considering that the applicant had substantially contributed to her own dismissal."

In their decision on remedies, the Industrial Tribunal dealt first with the 'Polkey reduction' of 70%. They said this:

"At the previous hearing the Tribunal had expressed a preliminary view that although the respondents had, in a number of respects, acted unfairly at the disciplinary hearing, nevertheless, had the respondents given the applicant the opportunity to speak, after they had heard from Mr Ferguson in relation to the applicant's disciplinary record, it was clear that she had little or nothing to say in respect of the previous incident and the Tribunal had expressed the preliminary view that there was only a 30% chance of the applicant retaining her employment. The Tribunal heard nothing further on this occasion to dissuade them that this was the correct view ..."

In relation to this aspect of their decision, in a conspicuously able argument, Miss Eady, on behalf of the Appellant, submits to us that the Industrial Tribunal's approach cannot be justified in law. She said that, of course the Applicant could not be expected to give a satisfactory answer to the September matter, because she had been given a final warning in relation to it, and the Tribunal should simply have approached the case on the basis that they were dealing with somebody who had committed a further act of misconduct shortly after receiving a final warning for a different, but serious act of misconduct, committed in the past. She had already been disciplined for the earlier incident and, it was incorrect in law for the Tribunal to have asked themselves the question, would she have had a satisfactory explanation for the earlier incident?

Secondly, it would appear that the Industrial Tribunal also took into account, as the other 'Polkey factor' the fact that the Applicant would have refused to have transferred, but nonetheless the employers would have insisted on it, and therefore, her employment would inevitably have come to an end for that reason.

It was submitted by Ms Eady that the Tribunal had misdirected themselves in relation to that issue because the employer had, as a matter of law, in accordance with the Industrial Tribunal's decision, not been in a position to require her to transfer. Therefore, if they had terminated her employment because of a refusal by her to transfer, they would have been acting unfairly and accordingly, the Polkey principle was not being correctly applied.

In an equally forceful and helpful submission, Mr Harney on behalf of the Respondent Association, accepted that it was not easy to understand what the Tribunal were saying as to the relevance of the transfer issue. He submitted to us that really the question of transfer was not a matter which the Tribunal should have been concerned with, and what they should have asked themselves was whether, if the Appellant had had an opportunity to make representations about the transfer, it would have made any difference to the employer's decision? He submitted to us that the Industrial Tribunal were entitled to take into account the seriousness of the previous incident and that the decision on the Polkey reduction could not be faulted.

It seems to us that the Industrial Tribunal has fallen into error in relation to what is called 'the Polkey reduction'. We consider that Ms Eady was correct in identifying the questions which had to be asked by the Industrial Tribunal in this case, namely, if the Respondents had not acted unfairly in the way found by the Industrial Tribunal, could the Respondents have dismissed the Applicant for a fair reason and secondly, would they have done so? In answering these questions, the Industrial Tribunal might well consider it appropriate to make reference to the percentage chance that a particular course might have been taken or to consider the answers by reference to future events, but the analysis should be founded upon those two questions.

It seems to us that the Industrial Tribunal were asking themselves the wrong question. This is particularly demonstrated by their approach to the question of transfer. If they are saying, as we believe they may be, that she had nothing useful to say about transfer and therefore would have lost her job in any event because of her refusal to transfer, that was an inappropriate approach, bearing in mind their conclusion that the employer had no power to ask her to transfer.

Furthermore, we consider that Ms Eady is correct in her submission that the Industrial Tribunal should not have used as a Polkey reduction factor. the fact that she had no adequate explanation for the earlier incident. That was an error as it seems to us in the light of the fact that she had been given a final warning, and that the Industrial Tribunal were considering her case on the basis that she had done a further act immediately after having been given a final warning.

This is not a case, in our view, where the Industrial Tribunal could have arrived at any conclusion other than that if the employers had acted fairly the employee would have remained in her employment.

However, that does not deal with the question of contributory fault. In this respect the arguments can be described in this way.

For the Appellant, Ms Eady said that the Tribunal had misdirected itself by substituting its own view of the seriousness of the first incident, namely by describing her as "lucky not to have been dismissed" when they should have accepted and acknowledged that, in truth, the employers had taken the decision that she should not be dismissed for that first incident. Hence, they gave her a final warning.

On behalf of the Respondents, Mr Harney submitted that looked at it in the round, and having regard to all the circumstances, the Industrial Tribunal were well entitled to conclude that her conduct both at the time of the demonstration, and by reference to what had happened before, was such as to warrant a 90% reduction in the figure for compensation. We have found this issue more finely balanced than the previous one, but have been persuaded to the view that the Industrial Tribunal did err in the way that Ms Eady suggested.

We are of the view that the Tribunal had approached the case on the basis that she probably should have been dismissed for what she did in September 1995, but she was lucky not to have been dismissed at that time and therefore overall, she was 90% to blame for her dismissal. If they had concentrated, as we believe they should, more on the nature and seriousness of the offence which she committed in 1996, in the light of having received a final warning, we are of the view that their decision would have been different. There is no doubt that she committed her act of misconduct on the second occasion when she was off duty, when she was present at a demonstration which she had not organised, and had been unaware of, until she arrived on the scene, and that the demonstration was to support her in her position at that Playground against the employer's unlawful decision to transfer her.

Against that background, it seems to us, even taking into account the fact that she had previously shortly before been given a final written warning, harsh and unjust to deprive her of 90% of her compensation. That said, the Industrial Tribunal would have been entitled to have concluded that overall, she was more to blame for what happened than her employers.

It has been agreed by the parties that we should not refer the matter back to the Industrial Tribunal, were we of the view that there had been an error of law, and we were asked to apply our own judgment to the figures which the Industrial Tribunal had given. We respectfully agree with the parties' view as to how we should proceed. It would be expensive and unnecessary to refer the matter back. For the figure of 90% by way of contributory fault, we would substitute the figure of 60%. That means that Miss Wilson is entitled to 40% of her basic award and 40% of her compensatory award. Those two figures, we think, amount to £283.24 and £751.40 respectively, giving a total of £1,034.64 in substitution for the figure which the Industrial Tribunal awarded.

Accordingly, this is one of those rare cases, in our judgment, where we believe that through a perfectly understandable error, but error nonetheless, the Industrial Tribunal has arrived at a conclusion with which we can, and should interfere, and accordingly, the appeal is allowed to the extent I have indicated.