United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS F ASLAM (of Counsel) Instructed by Messrs Etheringtons Solicitors 3 St George's Mews 43 Westminster Bridge Road London SE1 7JB


 


MR JUSTICE LINDSAY (PRESIDENT)

1. We have before us by way of a Preliminary Hearing the appeal of Mr Claudio Lo Sterzo in the matter of Lo Sterzo v London Borough of Lewisham. Today Mr Lo Sterzo is represented by Ms Aslam, who was only instructed very recently.
2. Mr Lo Sterzo, who was a senior surveyor with the London Borough, lodged an IT1 complaining of unfair dismissal. Lewisham's answer was that he was dismissed for gross misconduct. There had been, they said, a disciplinary hearing on 15 and 17 October 1997. They could have added that there was a later appeal by Mr Lo Sterzo which was dismissed. They said that allegations which had been raised in a letter of 3 November 1997 had been found to be substantiated and that gross misconduct was that shown and that Mr Lo Sterzo was accordingly dismissed for that reason.
3. It might be thought, if one looks at the allegations against Mr Lo Sterzo, that some at least are more allegations of incompetence or negligence rather than misconduct and still less of gross misconduct. In the letter of 3 November 1997 allegation 1 says:

"That you have been negligent, unprofessional and irresponsible in carrying out your duties as Contract Administrator of the Dacres Estate project. Specifically:

(a) Mr Lo Sterzo issued a Schedule of Works when the project was re-tendered which reqired insulation to be installed on the balcony return walls as part of the Eternit rain cladding system ("the insulation works") despite his being aware through having been previously advised by Eternit that the insulation were not possible.

(b) Mr Lo Sterzo refused to hold prior to 22 April 1996 design team meetings involving the sub-contractors, William Verry Limited, despite being requested to do so.

(c) Mr Lo Sterzo deliberately failed to inspect work in progress on the balcony return walls."

Allegation 2 was this:

"You withheld information from senior management, which frustrated proper management of the contract.

Specifically during June 1997, Mr Lo Sterzo deliberately failed when asked to brief senior management (Ken Platt and Ralph Harris) on the project.

(a) To inform them that he had been advised by Eternit at the initial design stage that the insulation works were not possible.

(b) To draw their attention to documentation issued by Eternit which was relevant to the issues of whether the insulation works were possible and of what Eternit had advised him on this point.

Allegation 3:

You withheld information which affected a satisfactory resolution of the dispute.

Specifically throughout Mr Lo Sterzo's discussions concerning the project with his team leader, Ken Bryan, he deliberately failed to inform him that he (Mr Lo Sterzo had been advised by Eternit at the initial design stage that the insulation works were not possible.

Allegation 4:

"Your actions have led to unnecessary expenditure for the Council. Specifically, offices in LEED, Housing and DIRECTeam have had to spend time and LEED had to incur a consultants fees in dealing with the dispute which arose over the insulation works not having been carried out. That time and fees would not have been spent and incurred at all or to a lesser extent has in fact been the case, had you not committed the acts of misconduct set out under 1 - 3 above.

In conclusion, it is my view that your actions throughout the whole of this contract were wilful and reckless of the financial and other consequences for the Council and its tenants and that your actions were deliberate, unprofessional and negligent. Accordingly I find that the allegations constitute gross misconduct and it is my decision that you should be summarily dismissed from the Council's service, with effect from 5 November 1997."

4. It is to be noted that charge 1(b) was that there had been a refusal, 1(c) said 'deliberately failed', Charge 2 said 'deliberately failed', Charge 3 'deliberately failed' and each of those charges were proven by the Borough's internal disciplinary hearing as that last citation from the letter shows.
5. The line between capability or incompetence on the one hand and misconduct and gross misconduct on the other can sometimes be difficult to draw. If one has tasks within a qualified man's duties which are deliberately left unperformed or deliberately performed badly one can see that one might go from a capability case to a misconduct or gross misconduct case. The word 'deliberate' in that context would really need to be substantiated by showing that the person in question knew of the description of the task required of him and knew that its performance to a given standard was expected of him, and that the task was such that, had he chosen, he could have performed it or at least attempted its performance to the required standard and yet had freely chosen not to perform it or to perform it to an inadequate standard. Without attempting something of a definition, one can see that incompetence can become in particular circumstances wilful misconduct.
6. It was thus important for the Employment Tribunal to focus on whether the Council satisfied the well known three-part test emerging from the Burchell case as to misconduct being the reason shown for a dismissal. Within that test, in particular, the Tribunal would need to have focussed on whether the employer had, by 3 November 1997, reasonable grounds for a belief in the deliberateness or the wilfulness or the recklessness of the shortcomings which were alleged against Mr Lo Sterzo and there would need to be reasonable grounds substantiated by or still subsisting after a reasonable investigation.
7. That would not have been the only issue before the Employment Tribunal because it would have had to go on to consider the issues raised in Section 98 Sub-section 4 of the Employment Rights Act but we will look at that as a start. The Employment Tribunal at London (South) heard the matter on 13 April and 14 April and then on 1 July of last year and their unanimous decision was that the claim for unfair dismissal failed. It may be useful to look firstly at the refusal to hold Design Team meetings involving the subcontractor William Verry Ltd., secondly, at the awareness that the insulation in the Schedule of works was not possible and thirdly, at the failure to inform the Team Leader that such works were not possible. As to the first of those matters, the Tribunal says this:

"The question of substance which we have to decide is whether the activities of the Applicant in supervising works at the site in question amounted to more than professional negligence and could reasonably be classified as gross misconduct. In our view an employer might reasonably conclude that the Applicant was guilty of gross misconduct.

On page 11 they say:

"In our view the Respondent also took account of the fact that the failure of the Applicant to hold one or more meetings with the specialist sub-contractor Verry was also a deliberate avoidance of a solution to the difficulties. In our view this is a reasonable deduction. Our view is that the deduction is actually strengthen by the explanation the Application sought to give which was that Verry's were not parties to the Contract between the Respondent and his main contractor. In our view this would be a technicality which no reasonable person would rely on in view of the fact that the sub-contractor was effectively carrying out all the works on the site."

8. That reference shows that in the Tribunal's view there had been a failure of the Applicant to hold one or more meetings. But a failure to hold a meeting is not a refusal to hold a meeting, which was what the charge against Mr Lo Sterzo had been and the difference is a significant one when one is seeking to draw a line between incompetence or negligence on the one hand and misconduct which has become gross misconduct on the other.
9. So there may be an arguable point of law there, that the Employment Tribunal's conclusion goes to a different charge to that of which Mr Lo Sterzo was accused and does not assist in making good the charge of which he was accused.
10. As to the second matter I mentioned, the awareness that the insulation and the Schedule of Works was not possible, that too, was dealt with by the Tribunal. They say this:

"The specifications put out (twice) for Tender required that the Eternit system should be taken into the balconies. On the face of it this would mean that the cladding inside the balconies should allow for an 80 mm space between the cladding and the wall. In fact this was impossible. At the inside return wall such a projection would extend over the glazed part of the window. On the outside return wall the projection will prevent the balcony door from opening. The Respondent asserts that the Applicant appears to admit, that the Applicant knew about this when he issued these specifications."

11. Now that is, of course, an important finding. It is however later followed by the Tribunal saying:-

" None of the facts that we have so far noted have any direct relevance to the charges eventually brought against the Applicant."

12. In Mr Lo Sterzo's Notice of Appeal he says this:

"The fundamental fact remains that the design submitted by Verry and formally approved by me, 50mm thick mineral wool insulation between timber battens behind cladding boards, without an gap, can be constructed within this space existing in the balconies. This has always been the case and I have always been aware of this."

He goes on:

"The wrong belief that the work could never have been done and that I, as a professional, knew this from the beginning has coloured the whole situation."

He also asserts this:

"Clauses 2.3 and 2.5 of the LEED Report of June 1997 (see bundles) clearly and simply explain this test and its implications. The said clauses 2.3 and 2.5 also establish that firstly the building work to the balconies could always have been done as there was at all times sufficient space to do it, and that 2. – the employer (Lewisham) knew this before any action had been initiated against the applicant on 15 July 1997 (suspension from work).

Furthermore, evidence in the bundles as well as that provided orally at the hearing proves that the said LEED Report was prepared by the employer's representative, and this makes it impossible to suggest that a.- the work could never have been done, and 2.- that there was any issue of concealment, let alone deliberate, on my part. The charge of gross misconduct cannot therefore be supported."

13. Now, it is not a point that we can resolve on the information before us. Paragraph 29 of the Employment Tribunal's decision, the paragraph that examines the nature of the case as put at the disciplinary hearing and the reasonableness of the conclusion then arrived at, does not refer to whether or not it had been found that Mr Lo Sterzo knew of the impossibility of the carrying out of the Schedule of works. It obviously is a point of great importance on the line between incompetence on the one hand and wilful misconduct on the other.
14. If there was a failure to understand a technicalities on the Employment Tribunal's part, certainly if there was that failure to understand which Mr Lo Sterzo asserts was the case, that could amount to an error of law. We cannot really rule one way or another on that but we certainly can not simply assume that there was nothing in Mr Lo Sterzo's Notice of Appeal on that point.
15. As for the third of the matters that I mentioned, a failure to inform the Team Leader, that the works were, indeed, not possible, of course, if Mr Lo Sterzo was truly of the view that the works were not impossible it hardly would be just to criticise him for not reporting that they were impossible. Thus any weakness in the second part that I mentioned becomes or might become therefore a weakness in the third part and again we cannot resolve it on the information before us. We cannot tell whether the Tribunal misunderstood the whole technical case.
16. On the 3 points we have mentioned and identified, there is at least an element of doubt as to whether the Employment Tribunal truly reflected on the reasonableness of the grounds for the employer's belief that Mr Lo Sterzo's shortcomings had been deliberate which was, as it seems to us, an important ingredient towards their conclusion that there had been gross misconduct.
17. On balance we conclude that it is arguable that there has been here (and, of course, we only concern of what is arguable) an error of law and that the matter therefore, in our view, should go to a full hearing.
18. As the full hearing is likely to be somewhat technical in surveying terms the Employment Appeal Tribunal will need all the help it can reasonably get. Therefore, even at this stage we think it is appropriate to make some requests to the Chairman of the Employment Tribunal. We think we will be assisted by the Chairman's notes of all evidence tending to show that such of the shortcomings of Mr Lo Sterzo which were listed in the letter of 3 November 1997 as were held to exist were not mere negligence or incompetence but were either deliberate or wilful or reckless. We will need notes of evidence on the topic identified in the second sentence at the top of page 3 of the Employment Tribunal's decision where it says:

"The respondent asserts, and the Applicant appears to admit, that the Applicant knew of this impossibility when he issued the specifications.

Evidence of the Applicant's apparent admission will be needed.

19. Thirdly, any evidence that may touch the allegation at the foot of page 6 of Mr Lo Sterzo's Notice of Appeal will be needed where, as I have cited earlier, he says:

"The fundamental fact remains that the design submitted by Verry and formally approved by me, 50mm thick mineral wool insulation between timber battens behind cladding boards, without an gap, can be constructed within the space existing in the balconies. This has always been the case and I have always been aware of this."

Notes of any evidence that the Employment Tribunal received relative to that argument, evidence going either way on the point, should be requested of the Chairman.

20. Last, so far as I am concerned, of notes to be requested of the Chairman are notes of any evidence that touches the matter explained at the foot of page 2 of the Notice of Appeal that begins:

"Clauses 2.3 and 2.5 of the LEED Report of June 1997 (see bundles) clearly and simply explain this test and its implications. The said clauses 2.3 and 2.5 also establish that firstly the building work to the balconies could always have been done as there was at all times sufficient space to do it, and that 2. – the employer (Lewisham) knew this before any action had been initiated against the applicant on 15 July 1997 (suspension from work).

Furthermore, evidence in the bundles as well as that provided orally at the hearing proves that the said LEED Report was prepared by the employer's representative, and this makes it impossible to suggest that a.- the work could never have been done, and 2.- that there was any issue of concealment, let alone deliberate, on my part. The charge of gross misconduct cannot therefore be supported."

Such notes should also be requested of the Chairman.

21. It is very hard for us to tell how easy it will be for the Chairman to separate out evidence of this subject or that it might well be that the simpler course would be for the Chairman not to attempt to give notes of evidence under separate headings relating to the 4 headings that I have mentioned but simply to give all evidence, but that we leave to him to decide, whichever is the less inconvenient.
22. We apologise to the Chairman for the requests we need to make, but it is plainly going to be, in some respects, a technical appeal partly depending on the technicalities of surveying and the Employment Appeal Tribunal will need as much help as it can to ensure that it understands the technicalities involved.
23. So, with that request for Chairman's notes, we allow the matter to go to a full hearing which can then deal with the matter on a more informed basis and of course, upon hearing by both sides.