United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S GORTON (COUNSEL) Instructed By: Mr T Lang Messrs Weightmans Solicitors 79-83 Colmore Row Birmingham B3 2AP
For the Respondent	MISS SINCLAIR (COUNSEL) Instructed By: Messrs Hill Taylor Dickinson Solicitors Irongate House Duke's Place London EC3A 7LP


 


JUDGE WILSON: By Order of the Employment Appeal Tribunal at the ex-parte Preliminary Hearing, dated 18^th January 1999, this Appeal was allowed to proceed to a Full Hearing on the matters set out in the Notice of Appeal. It was further ordered that the Chairman of the Employment Tribunal should be invited to comment on the matter raised by the Appellant with regard to an indication that the dismissal fell within the range of reasonable responses open to the Employer. The Employment Appeal Tribunal further directed that the Chairman should be asked to provide his Notes of Evidence in relation to Ms Hayes' evidence as to her considerations as to penalty.

1. This Tribunal has been considerably assisted by the Skeleton Arguments which have been submitted by Mr Gorton on behalf of the Appellant and Miss Sinclair on behalf of the Respondent. Those Skeleton Arguments are appended to this Judgment and are to be regarded as part of it. Counsel amplified the arguments set out in their Skeletons and the documents themselves accurately summarise the submissions which have been made to us.
2. In paragraph 5 of their Extended Reasons, the Employment Tribunal stated that the issues in this case were the reason or principal reason for the dismissal of the Applicant and, if there was a potentially fair reason, whether or not the dismissal was in fact fair or unfair having regard to the provisions of Sections 98(4) of the Employment Rights Act 1996. The Employment Tribunal set out the facts which it found proved clearly in paragraphs 6-12 of its Extended Reasons. The Employment Tribunal went on to set out the law accurately in paragraphs 19 and 20 of their Extended Reasons. Having applied the law to the facts which they found proved, the Employment Tribunal found that the Employer had a potentially fair reason for the dismissal.
3. At this point in our judgment, we turn to the comments of the Employment Tribunal Chairman on the matter raised by the Appellant with regard to the Employment Tribunal's indication that the dismissal fell within the range of reasonable responses open to the Employer. The Chairman commented as follows:

"On the afternoon of 15^th July 1998 I gave the decision of the Tribunal orally. I said that the majority of the Tribunal thought that dismissal was within the range of responses to the situation found by the Tribunal in this case which was open to a reasonable employer; and the minority did not think dismissal was within that range in that situation. I then said that, nevertheless, the Tribunal unanimously considered that the disciplinary process was so flawed as to render the dismissal unfair. I went on to say that neither (disciplinary) enquiry considered any options other than dismissal or nothing. I referred to other factors to which the Tribunal had attached importance, for example, Mr Hall's length of service."

4. The Chairman went on to say that:

"My recollection of the deliberations of the Tribunal, supported by the note I made at the time, is that the Tribunal was unanimous that the employer's reason for dismissal was related to conduct, a potentionally fair reason; and that the employer had a genuine belief that Mr Hall had misconducted himself grossly. The Tribunal was, however, unhappy about the disciplinary procedures followed. My further recollection is that the majority of the Tribunal considered that an employer who genuinely believed that an employee had behaved as Mr Hall was believed to have done, could reasonably dismiss that employee; but that the way matters had been handled by the employer in this case rendered the dismissal unfair. My indication on 15^th July was intended to express conclusions of the Tribunal to that effect."

5. The written decision and Extended Reasons of the Tribunal were sent to the parties on 7^th August 1998. So far as the indication contained in the oral announcement about the way in which the Employment Tribunal viewed the disciplinary procedures which had been followed was concerned, those matters are dealt with in detail in paragraph 22 of their Extended Reasons. Having said in paragraph 21 that the Respondent had a potentially fair reason for the dismissal, the Employment Tribunal went on, in paragraph 22, to say:

"However, the Tribunal finds that the disciplinary enquiries were fatally flawed. The enquiries were not a sham, but in view of the fact that Miss Hayes was not only the Applicant's immediate senior officer but also the person who had initiated the investigation in request of him – that is, the person who had complained – it was not fair that she should also conduct the disciplinary enquiry. A complainant should not also be judge and jury. The respondent company is large enough to be able to provide fairer disciplinary procedures. There was no real conflict of evidence on the facts of what had occurred, so that that did not create any particular difficulties for Miss Hayes, but the Tribunal finds that Miss Hayes did not consider any options other than those of dismissal or (presumably) withdrawing the allegations of misconduct (which, as the actual events were not disputed by the Applicant, was in reality not an option). Miss Hayes said straightforwardly in evidence that she did not consider anything except dismissal. In particular, she did not consider moving the Applicant, although she was aware that he had requested a transfer at an earlier date. The disciplinary procedure to which the Applicant was subject provided that a failure to improve or a repetition of misconduct following a final written warning "will normally lead to dismissal". This must mean that there is a discretion in the enquirer to consider other penalties in unusual circumstances; and a corresponding duty to consider whether the case is exceptional or not. The Tribunal considers that in the Applicant's case, there were sufficiently unusual circumstances to oblige an enquirer to direct his or her mind to these circumstances. Although it is not for the Tribunal to speculate as to all the matters an enquirer might properly consider, in this case the Tribunal notes the Applicant's length of service, the death of his wife, the request for a transfer, his acknowledgement of his relevant acts and omissions, the absence of private profit arising from these, and the achievements of the George Inn under the Applicant's management. He had improved the inn considerably over some 12 years, but the Respondent did not weight this properly against the possible reasons for the deficiencies of the Applicant's conduct of the business in 1997. For these reasons relating to the procedure of the Respondent, the Tribunal finds that the Applicant's dismissal was unreasonable and unfair. The Appeal, although held by a person outside the Application's line of management, similarly did not look at factors peculiar to the Applicant and at penalties less than dismissal. It did not do enough to correct the defects in the original hearing. There were serious procedural failings in the Respondent's enquiries, so as to render the dismissal unfair."

6. It is plain beyond peradventure from the wording of Section 98(4) of the Employment Rights Act 1996, that where the Employer has fulfilled the requirements of sub-section (1) and (2) of the Act - as was the case here - the determination of the question whether the dismissal is fair or unfair depends on whether, in the circumstances, including the size and administrative resources of the Employer's undertaking, the Employer acted reasonably or unreasonably as 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. It is equally plain on a perusal of paragraphs 19 and 20 of the Extended Reasons, that the Employment Tribunal correctly directed itself concerning this aspect of the law in question.
7. It was not in dispute that relations between Mr Hall and his immediate superior, Miss Hayes, were not the most cordial and we note that the Employment Tribunal found as a fact, that they did not see eye-to-eye. Mr Hall considered Miss Hayes' behaviour aggressive and demotivating. In these circumstances, when Miss Hayes discovered shortcomings in the conduct of Mr Hall and suspended him pending investigation, it offended the principle that justice should not only be done but be seen to be done for her to conduct the subsequent disciplinary proceedings and dismiss Mr Hall. She frankly said that she considered no other penalty. This Tribunal finds itself in agreement with the Employment Tribunal that it was not fair for her to conduct the disciplinary enquiry and impose the penalty of dismissal. The Respondent company is large enough to be able to provide fairer disciplinary procedures.
8. The same goes for the appeal procedure which took place. This appeal procedure was conducted by Mr Sowa who was somebody outside Mr Hall's line of management but we note that the time occupied by the whole appeal process was 65 minutes and that Mr Sowa spent 26 of those minutes discussing matters with Miss Hayes. Furthermore, when he confirmed the dismissal he made no reference to any of the other factors or any of the other options which might have been open.
9. We do not agree with the submission on behalf of the Appellant that the Employment Tribunal fell into the error of substituting its own view of matters for that of the Employer. It seems to us quite plain that the Employment Tribunal tested what happened by the statutory requirements set out in Section 98(4) of the Employment Rights Act. In our judgment they were entitled to come to the conclusions to which they did come and to find that the procedural failings in the Respondent's procedures were so serious that they rendered the dismissal unfair.
10. We therefore dismiss this Appeal.


 


Case No 2301614/1988/CH

IN THE EMPLOYMENT APPEAL TRIBUNAL

B E T W E E N :

WHITBREAD PLC T/A WHITBREAD MEDWAY INNS

Appellant

- and - MR J HALL

Respondent

SKELETON ARGUMENT ON BEHALF OF THE RESPONDENT
11. The Tribunal were entitled to find that the dismissal was unfair because of a procedural failing in the disciplinary inquiry. See Polkey -v- A E Dayton Services Ltd [1987] ICR 142.

The Appellant submits that the Tribunal's finding that the dismissing officer should not have acted as a judge and jury was an error of law and/or is perverse for a number of reasons. The Respondent will deal with each of the reasons in turn.

A (i) The Applicant did not admit all of the allegations which were levelled against him by the investigating officer. He did not admit:

(a) that he had taken money and deliberately bounced a cheque

(b) disregarded management instructions to cease allowing false tips by service charging at 10%.

(ii) Although some of the allegations made by the Appellant were admitted the Appellant had an explanation for each of them. Under the Appellant's own disciplinary procedure at Section 45 page 39 of their manual, they could only dismiss summarily once all the facts had been considered. The Appellant was therefore entitled to a fair hearing.

(iii) The Appellant seems to be suggesting that the outcome of the hearing was a fait accompli and therefore any procedural unfairness could not render the dismissal unfair. This is contrary to what Lord Bridge said in Polkey at page 162-163.

"But an employee having prima facie grounds to dismiss for one of these reasons will in the great majority of cases not act reasonably in treating the reason as a sufficient reason for dismissal unless he has taken the steps, conveniently classified in most of the authorities as "procedural" which are necessary in the circumstances of the case to justify that course of action …; in the case of misconduct, the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation …

If an employer has failed to take the appropriate procedural steps in any particular case, the one question the industrial tribunal is not permitted to ask in applying the test of reasonableness posed by section 57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On the true construction of section 57(3) this question is simply irrelevant."

B (i) The Applicant did raise the issue of the fairness of the disciplinary inquiry during the course of the hearing. See paragraph 11 of the application. It was the Applicant's case that he had not been given a fair hearing and that a full investigation into his conduct had not taken place because Debbie Hayes, the disciplinary officer, had a personal grudge against him.

(ii) It was obvious that the Industrial Tribunal were concerned with procedural fairness from the questions which they asked about the disciplinary enquiry. The tribunal were entitled to look at the fairness of the disciplinary procedure in assessing whether the employer has acted reasonably under section 98(4) Employment Rights Act 1996.

C (i) The evidence suggests that the Tribunal did analyse the procedural defect to see whether on the facts of this particular case the impact of the alleged error was such as to render the dismissal unfair.

At paragraph 22 the Tribunal referred to the size of the Appellant company and their ability to provide a fair disciplinary procedure, the Applicant's length of service, the recent death of his wife, the request for a transfer, the absence of private profit for him, and the achievements of the George under the Applicant's management.

(ii) The Industrial Tribunal are not entitled to ask whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. See Lord Bridge in Polkey at page 163 above.

D (i) The Industrial Tribunal were in difficulties in considering whether the "Appeal" cured any procedural defects because Mr Sowa was not present at the hearing, despite an adjournment of the original hearing to allow him to attend. However, they did consider the "Appeal" at paragraph 11 of their extended reasons.

(ii) The Industrial Tribunal were entitled to attach as little or as much weight to the statement provided by Mr Sowa as they saw fit, bearing in mind that his evidence could not challenged in cross-examination.

(iii) The Industrial Tribunal were entitled to consider the extent of the procedural unfairness and whether these defects were capable of being cured by a review or whether a rehearing was necessary.

(iv) It is submitted that a re-hearing was necessary whereas the hearing on 25^th February 1998 was at best a review. Note Mr Sowa consulted with Miss Hayes, the disciplinary officer for at least 15 minutes during the hearing on 25^th February 1998.

(v) It was not accepted that the Appeal was a rehearing.

12. The decision to dismiss

A The Industrial Tribunal were not substituting it's view of the Applicant's conduct for that of the employers. Miss Hayes said in evidence that the only penalty which she considered was dismissal. This was a finding of fact. See Chairman's note of evidence at paragraph 12.

B Dismissal was not inevitable and therefore the argument that the Appellant failed to consider any other option is not flawed.

(i) Miss Hayes never raised the presence of the final written warning at the disciplinary hearing. Miss Hayes said in evidence that she did not regard the low liquor stocks as gross misconduct. Miss Hayes appeared to attach little significance to the existence of the final written warning. See paragraph 1 of the Chairman's notes of evidence.

(ii) The letter dated 27^th May 1997, which was described as a final written warning about liquor stocks, was in dispute. This should not have been a final written warning since there was no previous verbal or written warnings within the previous 12 months. The status of the warning dated 27^th May 1997 was in issue and was a matter which fell to be considered at the disciplinary hearing. Therefore dismissal was not inevitable.

C The majority of the Industrial Tribunal decided in their ex-tempore decision that dismissal was within the range of reasonable responses which were open to a reasonable employer. Under Section 98(4) Employment Rights Act 1995 the Industrial Tribunal still had to decide whether the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee. The Industrial Tribunal were correct to consider procedural fairness when considering whether the employer acted reasonably or not.

D (i) The Industrial Tribunal did not ignore the evidence that there was an appeal on 25^th February 1998. See paragraph 11 of extended reasons. However, there was no evidence before the Industrial Tribunal that the appeal hearing properly considered the issue of penalty. Mr Sowa does not say in his witness statement that he considered an option other than dismissal. The Industrial Tribunal were entitled to assume that he did not consider other options in light of his non-attendance at the hearing and his consultation with Miss Hayes during the appeal hearing which inferred that it was Miss Hayes who considered the question of penalty.

E There is no evidence to suggest that the Industrial Tribunal misunderstood the meaning and effect of the disciplinary procedure.

(i) At Section 45 page 37 of the handbook on disciplinary policy it states:

"Any mitigating circumstances should be taken into account.

The employee must be given every opportunity to state his/her case and the decision whether or not to give a warning or dismiss must be taken after due consideration of all the circumstances."

This and other passages suggest that the company must consider options other than dismissal even in cases where gross misconduct is alleged.

(ii) There is nothing to suggest in the statement of Mr Sowa that he considered the Applicant's mitigating circumstances. These were set out in a letter from the Applicant's solicitors for the re-hearing. This was a breach of the company handbook.

(iii) Miss Hayes failed to consider any other option open to her other than dismissal. This was her evidence at the hearing.

(iv) Mr Sowa does not say in his witness statement whether he considered any other option. The Industrial Tribunal were entitled to assume that he did not consider other options in light of his non-attendance at the hearing and his conversation with Miss Hayes during the appeal hearing which inferred that it was Miss Hayes who considered the question of penalty.

13. Appeal

A The Industrial Tribunal were entitled to find that the Appeal failed to cure the defects in the original procedure.

(i) The Industrial Tribunal did not hear from Mr Sowa because of his failure to attend.

(ii) The evidence suggested that the Appeal was not a re-hearing but a review. Mr Sowa left the room to consult with Miss Hayes during the hearing. The Appeal could not cure any defects in the original hearing since Miss Hayes was still closely involved in the Appeal. See Byrne -v- BOC [1992] IRLR 505.

(iii) The Appeal should have been of a comprehensive nature, in essence a rehearing and not a mere review. See Wood J in Whitbread & Co plc -v- Mills [1988] ICR at page 509 where he said:

"If there is a rehearing de novo at first instance, the omission may be correct, but it seems to us that if there is to be a correction by the Appeal then such an Appeal must be of a comprehensive nature, in essence a rehearing and not a mere review."

B It was the Applicant's case that Miss Hayes was closely involved in the Appeal hearing in that she was consulted during the hearing, and that she instigated the dismissal because of a personal dislike for the Applicant. By implication the Applicant was criticising the appeal hearing.

C It was quite obvious from the Tribunal's questioning of Debbie Hayes that they had concerns about the procedural fairness of the disciplinary hearing.

(i) The Appellants failed to call Mr Sowa which inhibited questions about the rehearing.

(ii) The Industrial Tribunal were entitled to draw their own conclusions from the information before them.

D The Industrial Tribunal were entitled to conclude that the Appeal failed to correct the defects in the original hearing. The Industrial Tribunal had limited evidence about the appeal because of the failure of Mr Sowa to give evidence. The Industrial Tribunal considered the Appeal in sufficient detail as they could.

14. Conclusion

The appeal should be dismissed.

JANE SINCLAIR

9 Gough Square

London EC4A 3DE

6^th July `999


 


EAT/1233/98

IN THE EMPLOYMENT APPEAL TRIBUNAL

B E T W E E N :

WHITBREAD PLC T/A WHITBREAD MEDWAY INNS

Appellant

- and - MR J HALL

Respondent

APPELLANT'S SKELETON ARGUMENT

A INTRODUCTION

15. This Appeal is brought with leave of the Employment Appeal Tribunal and is argued on all points raised in the Notice of Appeal. . See Order of HHJ Clark
16. Subsequent to the preliminary hearing and order of the Employment Appeal Tribunal the following documents have been disclosed by the Employment Tribunal:

(a) Chairman's (sic) comments re issue of reasonable response; See page 35-36 of Appeal Bundle.

(b) Notes of evidence of witness Miss Hayes in relation to penalty. See pages 37-40.

17. The crucial passage in the decision of the Employment Tribunal is paragraph 22. The Appellant submits the Employment Tribunal committed three errors of law:

(a) The Employment Tribunal erred in law in criticising the Appellant in connection with "procedural" defects in the manner of dismissal. On the basis of the Employment Tribunal's findings and in light of the Respondent's admissions, there were no substantive facts in dispute and the only issue the Employment Tribunal should have focused on was that relating to penalty. As the Employment Tribunal held, by a majority, dismissal would have been a response of a reasonable employer, the Employment Tribunal were bound to find the Respondent to have been fairly dismissed;

(b) In any event the criticisms identified by the Employment Tribunal of the Appellant's officers' conduct of the dismissal were flawed;

(i) The dismissing officer was not and could not in the circumstances have been acting as judge and jury and in any event there was nothing to stop the dismissing officer from so acting;

(ii) The Employment Tribunal misunderstood the evidence in respect of penalty and/or substituted its view for that of the employer.

(c) The Employment Tribunal failed to hold that the Appeal had cured any of the defects or flaws in the Appellant's case following dismissal.

18. The Employment Tribunal, at a later remedy hearing, awarded the Respondent his statutory losses. See pages 14-16 of EAT bundle.

B THE FACTS AND THE DECISION OF THE EMPLOYMENT TRIBUNAL

19. The Employment Appeal Tribunal is referred to the chronology. See pages 69-70.
20. The facts in this case are not materially in dispute:

(a) The Respondent was the licensee of a prestigious public house ("The George") leased to the Appellant from 19^th April 1985 until his dismissal from the employment of the Appellant on 28^th January 1998;

(b) The Respondent was subject to a number of disciplinary sanctions whilst at The George culminating in a final written warning in respect of stock deficit on 27^th May 1997 and such warning was extent at the time of dismissal. See page 37 of ET bundle;

(c) As a result of a preliminary investigation in January 1997 the Respondent admitted the following conduct:

(i) estimating a food audit in respect of December 1997, from Scotland whilst on holiday;

(ii) wrongly accounting for cash revenue from room hire at The George by describing it as staff wages; See para 12 of ET decision page 9 in Bundle

such conduct being described in the Appellant's disciplinary handbook as being offences relating to falsification of documents liable to attract summary dismissal. See page 34 of ET Bundle.

(d) The Appellant's dismissing officer considered the Respondent to have committed, in addition to the admitted offences, additional matters relating to disregard of management instructions and potential dishonesty in connection with a bounced cheque. See letter of 29^th January 1998, page 32.

(e) The Respondent appealed and the Appeal was conducted as a full hearing. The Appeal's officer did not find the allegation proven (or at least accepted the Respondent's explanation) in respect of the bounced cheque but did criticise the Respondent in relation to his failure to stock management. See letter of 27^th February 1998, pages 67-68.

21. The Respondent's case was essentially directed at the issue that the sanction applied was disproportionate to the offences committed. See paras 13-15 of ET decision page 9.
22. The Employment Tribunal held:

(a) The Appellant's reason for dismissal related to conduct;

(b) The Appellant had reasonable grounds to believe, and did, that the Respondent had been guilty of misconduct in relation to estimation of food stocks, failure to keep up liquor checks and the incorrect classification of certain revenues in respect of room hire. See para 21 of ET decision page 11 in Bundle.

(c) The Appellant would have been justified in dismissing the Respondent for the above conduct on the basis that such a decision would have fallen within the permissible range of reasonable responses open to an employer in such circumstances. See Page 35.

(d) However, the dismissal was rendered unfair by:

(i) the dismissing officer acting as judge and jury;

(ii) the dismissing officer failing to consider any penalty other than dismissal. See para 22 ET's decision page 11

with such procedural unfairness not being cured by the appeal hearing.

C FAILURE TO FIND THE RESPONDENT WAS FAIRLY DISMISSED

23. As the Employment Tribunal found the Respondent had been guilty of misconduct of a serious nature on the basis of their findings in relation to the Appellant's reasonable belief and in light of the Respondent admitting a substantial part of the allegations, there existed no material factual contest in relation to the conduct of the Respondent.
24. The Employment Tribunal's task therefore was to assess the penalty imposed by the Appellant. Royal Society for the Protection of Birds -v- Croucher [1984] ICR 604. Boys and Girls Welfare Society -v- Macdonald [1995] ICR 693.
25. In the circumstances, the Employment Tribunal should not have scrutinised the disciplinary procedures of the Appellant but should have progressed, as in effect both parties invited them to do, to the issue of penalty.
26. The Employment Tribunal did reach a finding on the issue of penalty in their ex tempore decision on 15^th July 1998. See page 35 para 2. This finding should have been determinative of the application.
27. In any event the finding that the procedures adopted buy the Appellant was fatally flawed is perverse.

D PROCEDURE

28. The Employment Tribunal fell into error in relation to the judge and jury finding.

(a) A dismissing officer is perfectly at liberty to investigate a matter of discipline and then act as the person who conducts the disciplinary hearing and imposes any disciplinary sanction. The strict rules of natural justice do not apply as the statutory test is what is to be followed ie reasonableness in accordance with Section 98(4) ERA 1996. See Sarter -v- P & O Ferries [1992] IRLR 271.

(b) If anything the Appellant could be criticised for acting in the manner suggested by the Employment Tribunal ie the dismissing officer not being the investigating officer. See Budgen & Co -v- Thomas [1976] ICR 344.

(c) In any event the dismissing officer could not be described as either the complainant or as a jury.

29. The Employment Tribunal fell into error in relation to the criticism that the dismissing officer considered no other option:

(a) The Employment Tribunal clearly was substituting its view of the merits of the dismissal for those of the employer,

(b) This is a bizarre and perverse finding when one considers the fact the Respondent was subject to a final written warning in relation to a like offence.

E. THE APPEAL

30. It is not a controversial statement of law that procedural defects in a dismissing process can be cured on appeal if the appeal amounts to a rehearing of the merits. See Whitbread -v- Mills [1988] IRLR 501.

(a) Purporting to criticise the appeal process without specifying what the defect(s) in the process actually were;

(b) Ignoring the letter of the Appeal's officer which plainly dealt with the issue of penalty afresh. (Page 67-68)

F THE ORDER OF THE EMPLOYMENT APPEAL TRIBUNAL

31. As the Employment Tribunal have made material findings of fact and concluded dismissal was a proper sanction, the Employment Appeal Tribunal is entitled to:

(a) substitute a finding of fair dismissal; and

(b) set aside the remedy order.

SIMON GORTON

14 Castle Street

Liverpool

30^th June 1999