United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P OLDHAM (of Counsel)
For the Respondent	MR S COTTLE (of Counsel)


 


HIS HONOUR JUDGE PETER CLARK

1. The Applicant below, Mr Gerald Stephens, was employed by the Respondent Council between May 1990 and August 1997. Following the termination of his employment he presented a complaint of unfair dismissal to the Employment Tribunal on the 6^th November 1997. In his originating application he contended that he was forced into ill health retirement by being threatened with dismissal or compulsory redundancy or alternatives.
2. The claim was resisted by the Council, first on the basis that there was no dismissal. That point was taken as a preliminary issue before an Employment Tribunal sitting at Cardiff on 3^rd April 1998 under the Chairmanship of Mr P Webster. By a decision promulgated with summary reasons on the 20^th April 1998, that Employment Tribunal had no difficulty in concluding that the Applicant was dismissed by the Council. They relied in particular on a letter from the Human Resources Officer to the Applicant dated 13^th August 1997, which stated that

"Due to your continued ill health, it is no longer possible for you to undertake your employment duties with the Council" and continued "consequently, I write now to give you formal notice that your employment with the Council will terminate on 17^th August 1997. Provisions were then made or payments to be made to the Applicant including 7 weeks payment in lieu of notice".

That finding has not been the subject of appeal. The case was to be listed for a three day hearing on the merits of the unfair dismissal claim.

The merits hearing took place before a differently constituted Employment Tribunal chaired by Mr Alan James, sitting at Cardiff on 23^rd-25^th September 1998.

3. By a decision promulgated with extended reasons on 28^th October 1998, that Tribunal found the dismissal to be unfair. It is against that decision, (the substantive decision) that this appeal by the Council is brought. Leave to proceed to this full inter partes appeal hearing was granted at an ex parte preliminary hearing by a division of the Employment Appeal Tribunal sitting on 2^nd March 1999. On that occasion, giving the judgment of the Employment Appeal Tribunal, Mr Justice Holland described the extended reasons given by the James Tribunal as being "somewhat confused!". The principal point of law there identified to be argued at this full hearing was whether the Tribunal had sufficiently demonstrated in their reasons their approach to the questions raised by Section 98 of the Employment Rights Act 1996.
4. Turning to the substantive decision, we do not dissent from the view expressed by Mr Justice Holland that the Employment Tribunal's reasons are somewhat confused. What is required of an Employment Tribunal's extended written reasons to comply with Rule 10 of the Employment Tribunal's Rule of procedure, is not a full judgement on the facts, the legal arguments, the law or the reasons for reaching their decision, rather a summary of their basic factual conclusions and a demonstration expressly or by implication, to what question of law the Employment Tribunal addressed their minds and why they reached the conclusions which they did. In short, the purpose of the Tribunal's reasons is to tell the parties in broad terms why they won or lost. See Martin –v- Glynwed (1983) ICR 511; UCATT –v- Brain (1981) ICR 542 and Meek –v- City of Birmingham District Council (1987) IRLR 250.
5. The Webster Tribunal, having found that the Applicant was dismissed, the questions of law before the James Tribunal under Section 98 were these:

(i) Has the Council shown that it had a potentially fair reason or principal reason for dismissing the Applicant under Section 98(2) or (1)(b)? If not the dismissal was unfair.

(ii) If a potentially fair reason is made out, did the Council act reasonably or unreasonably in treating that reason as a sufficient reason for dismissal, applying the words of Section 98(4).

First a factual summary. The discursive style of the reasons requires the reader to extract the outline the facts from various parts of the reasons. They appear to be as follows.

6. The Applicant was originally employed by the Council as a transport clerk. He had from time to time in the past suffered from a nervous illness but had always recovered and returned to work. Prior to joining the Council's employment he had served in the Royal Navy and for some four years had been director of a haulage company which went into liquidation. From the 1^st April 1996, when the Unitry Authority came in to being, he was employed as Transport Health and Safety officer. At the relevant time the Council was under severe budgetary constraints. It was looking for a 5% reduction in expenditure during 1997/98. It also had a policy of avoiding compulsory redundancies. On 5^th March 1997 the Applicant's general manager, Barry James informed him that his post was redundant. He was then given three options: compulsory redundancy, voluntary early retirement or redeployment.
7. On 2^nd April 1997 the Applicant went off sick, diagnosed from suffering from anxiety and stress, never to return to work before his dismissal effective on 17^th August. During that period an offer of alternative employment as an inspector within the Waste Management Team, originally made at a meeting with Mr Jenkins, the Chief Assistant Municipal Engineer, was rejected by the Applicant. Investigation was carried out into the Applicant's medical condition. On 14^th May 1997 he was seen by Dr Hugh Davies of the occupational health and safety agency. The following day Dr Davies wrote to the Applicant's general practitioner, Dr McCann. He said this:

"I had a long chat with the him and basically advised him that whereas I would be prepared to support early retirement on ill-health grounds it may not be appropriate if he is to seek further employment elsewhere. I am sure that his symptoms will resolve in due course, but I am sure he will remain a bitter man. The prevailing conditions are such that management need to know whether or not he intends taking up his new post. I think that he will not".

8. The Tribunal added their view that at that stage Dr Davies clearly did not consider the Applicant to be incapable of work and foresaw a recovery in the future, although no time scale was put on that recovery. On 16^th June Dr McCann replied to Dr Davies. The last paragraph of his letter reads as follows:

"I think Mr Stephen's prognosis is good and that in two or three months time his mental health will be back to normal if his employment problems (which are the precipitating factory for this illness) are resolved. If that is the case he should be fully fit to return to work. His past history of chest pain should not affect his future fitness to work"

The Tribunal add that in fact the Applicant had been examined by a consultant cardiologist in September 1996 and was found to have an excellent prognosis

9. Dr Davies saw the Applicant again in June after receiving Dr McCann's report and then again on the 3^rd July. On that occasion he found the Applicant, "much more relaxed" and keen to start back at work in August. However, after consultation with his own doctor the Applicant did not return to work and felt unable to say when he would be able to return to work. The question of redeployment had not by then been resolved. The Council then actively pursued the question of ill-health retirement on the 4^th August 1999; the Applicant accepted this option, Dr Davies issued a certificate of incapacity and the Applicant was dismissed by the letter of the 13^th August to which we have earlier referred.
10. We return to the questions of law to be determined by the Tribunal:

First, what the reason or principal reason for dismissal?. The Tribunal make no clear express finding as to the reason or principal reason. Two potentially fair reasons were advanced by the parties. Ill-health capability by the Council and redundancy by the Applicant. Neither is identified as the reason or principal reason by the Tribunal, neither is rejected. Mr Cottle appearing on behalf of the Applicant before us, submits that on a fair reading the Tribunal concluded that no potentially fair reason was made out by the Council. Accordingly, the dismissal was unfair without proceeding to the question of reasonableness under Section 98(4).

11. In support of that submission he has referred us to the Judgment of Mr Justice Brown-Wilkinson in Timex Corporation –v- Thompson (1981) IRLR 522. There, on the facts, the Employment Tribunal expressly found that the employer had not satisfied them as to the reason for Mr Thomson's dismissal. The Tribunal were left in doubt as to whether the reason was redundancy or capability. That finding was upheld by the Employment Appeal Tribunal. Accordingly, the employer's defence to a claim of unfair dismissal failed at the first hurdle, the dismissal was unfair. Mr Cottle argues that the position is the same in this case, we disagree. Here, the Council advanced one reason for dismissal, ill-health capability; on the other side the Applicant advanced the true reason as redundancy. The Tribunal has simply made no discernible finding, expressed or implied on that critical point. What appears to us, from reading the decision and reasons, to have happened is that the Employment Tribunal approached the matter globally. They concluded that because the Applicant was pressured by the Council into accepting ill-health retirement, in circumstances amounting to dismissal, that dismissal was unfair. There is no attempt to analyse the potential two stage process under Section 98 which we have identified.
12. In our view that is not, as Mr Oldham submits, adequate reasoning to support the Tribunal's conclusion that this dismissal was unfair. Pressure to accept ill-health retirement applied by the Council to the Applicant, may be relevant to the question of whether or not there was a dismissal or a consensual termination of the contract. It may go to the reasonableness of the decision to dismiss for a potentially fair reason. But it cannot go to the question of the employer's reason for dismissal. Mr Cottle has urged on us this proposition on the facts; that since the Applicant's post was redundant in March and he had not been redeployed before dismissal in August, the Council could not establish ill-health capability as the reason for dismissal. We do not think that that follows and more to the point, we cannot see any trace of such reasoning in the Tribunal's reasons. We should mention in particular the way in which the Tribunal deal with Dr Davies' evidence at paragraph 21 of their reasons. They found that evidence to be somewhat ambivalent but they did not suggest that Dr Davies was a party to a course of action with which he did not entirely agree. We find the findings on Dr Davies' evidence equivocal to say the least. Either Dr Davies signed a certificate of incapacity when he did not believe that the Applicant was unfit for continued employment or he did not. If he genuinely signed that certificate then it is difficult to see why it might be held that the Human Resources officer who took the decision to dismiss, did not do so on the grounds of ill-health capability. We mention these matters in passing, it is really a question for speculation, but it fortifies us in the view that these reasons simply do not stand close to scrutiny.
13. In these circumstances we are driven to conclude that this Tribunal decision cannot stand, it must be set aside. Mr Oldham sought to persuade that we could ourselves carry out the proper two stage process under Section 98 and find:

(i) That the reason for dismissal related to the Applicant's capability and

(ii) That on the Tribunal's findings that dismissal was fair

We cannot accede to that submission. On the Tribunal's findings of fact we feel quite unable to carry out what will amount to a fact-finding exercise to reach the point of saying that the Tribunal's decision was plainly and unarguably wrong, a necessary pre-requisite for reversing the findings of unfair dismissal.

14. In these circumstances the case must be remitted for rehearing. Mr Cottle asks us to send it back to the same Tribunal to consider the question under Section 98(1) and to give their further reasons. That would not be satisfactory in our judgment. Reluctantly, bearing in mind the delay and the expense to the parties, and the effect which a further hearing may have on the Applicant's health, we have concluded that the only proper course is to remit the matter to a fresh Employment Tribunal for a complete rehearing on the merits, given the Webster Tribunal's finding, which remains undisturbed, that the Applicant was dismissed by the Council on 17^th August 1997.