United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S GILL (of Counsel) Instructed by: MR C BELL Messrs Latham & Co Solicitors 15 High Street Melton Mowbray Leicestershire LE13 0TX
For the Respondent	MISS S McKIE (of Counsel) Instructed by: MR I KERSHAW Messrs Kershaw Solicitors 160 Brompton Road Knightsbridge London SW3 1RP


 


HIS HONOUR JUDGE WILCOX:

1. This is an appeal against the decision of an Employment Tribunal made on 5 March 1999. The Appellant employed the Respondent as a Technician. He worked at the site of one of the Appellant's customers. (LMP) The Appellant, following the spilling of inflammable ink and an allegation of failure of his part to clear that ink up suspended the Respondent employee on 3 March 1998. The Appellant held a meeting with the Production Director of LMP on 5 March. They stated that they did not want the Respondent employee back on site. The Appellant then investigated the possibility of placing the Respondent on a different site, unsuccessfully and he was dismissed with effect from 15 March 1998. The reason put forward was that the customer LMP had insisted upon removal from the site. The Employment Tribunal found this a fair reason for the dismissal, being "some other substantial reason" within the Act, but they went on to find that the dismissal was procedurally unfair, and that the Respondent should have had the opportunity to give his side of the spillage incident, so as to allow for the possibility that the customer LMP might have been persuaded to change its mind.
2. In the course of a second hearing, as to remedies, they went on to find that there was a 60% chance that had the proper procedure been followed, the Respondent would have remained employed. They made a compensatory award, a final award in excess of £9,000 and found in relation to an application for holiday pay entitlement that the Respondent employee was entitled to £907.20 holiday pay. This appeal concerns only the remedy aspect of the case. In dealing with that it is right to put the matter in context as factually found by the Tribunal. The relevant findings and conclusions, are to be found in the extended reasons as to the first part of the hearing at paragraph 5. It is necessary and appropriate to make extensive reference to that paragraph because it helps one to appreciate the approach the Tribunal took, subsequently in the separate hearing as to remedies. The question which the Tribunal had to decide here was whether or not the Respondent acted reasonably both procedurally and in making the decision to dismiss on 11 March 1998.

5. "The Tribunal finds that the Respondent did not act fairly. First, they suspended the applicant on full pay but never gave him the opportunity to state his case. There is no consultation whatsoever, following his suspension. Only in exceptiponal cases that an employer can justify a no consultation whatsoever was made clear in Polkey v A E Dayton & Son case. At the very least the failure to consult the applicant or to allow him to have his say denied him the opportunity of having representation made on his behalf, perhaps accompanied by an apology to LMP. The letter of dismissal stated that the company had made representations to Smith Bros. (sic) on the applicant's behalf. In fact, no evidence had been given by or on behalf of the respondent that anybody approached either Mr Nairn or Mr Newlands (they are Management Representatives of the Customer Company) after 5 March to make any representations on the applicant's behalf. It is noteworthy in this particular case, and indeed to the credit of both Mr Parrot and Mr Cheatham as witnesses of truth, that each of them accepted that they did not consider the applicant's conduct to be sufficiently serious to justify dismissal but would had it not been for the attitude of LMP, have imposed a written or perhaps a final warning. Although the attitude of LMP in banning the applicant from the site cannot be described as entirely capricious, the Tribunal considers that if the respondent had held some form of disciplinary enquiry and had indicated to LMP that in their view the conduct of the applicant did not justify summary dismissal, it is at least possible that LMP would have given the applicant a second chance. The Tribunal asks itself what was the point of the respondent suspending the applicant if they did not intend to consult the applicant before dismissing him. They might just as well have dismissed him instead of suspending him on the afternoon of 3 March or perhaps on 5 March. The apparently intransigent attitude of the third party LMP at those times did not absolve the respondent as a matter of common justice from the duty to give the applicant a chance to explain himself. The extent to which such consultation might have resulted in the avoidance of the applicant's dismissal is a matter for further argument."

3. It is against that background therefore that they went to on to consider the next and vital questions. I turn to the specific grounds of appeal. Firstly:

Ground 1

12. "The tribunal asked itself the wrong question in determining the Respondent's entitlement to compensatory award."

The duty of the Tribunal of course is set out in the statute at section 123, I need not set that out:

Ground 2

15. "Further, the tribunal was wrong and/or perverse to find that the Appellant had admitted that a fair procedure would have resulted in a written or final warning.

Ground 3

16. The tribunal was wrong and/or perverse to find that there was a 60% chance that the Respondent would not have been dismissed had a fair procedure been adopted."

Ground 4

22. "The tribunal finding that there was a 60% chance that the Respondent would not have been dismissed if a fair procedure had been adopted was based upon speculation, and not upon evidence adduced before the tribunal. The tribunal's finding was thus wrong and/or perverse."

Ground 5 is no longer before us. Ground 6 relates to the Tribunal finding as to accrued holiday entitlement:

Ground 6

27. "The tribunal's finding that the Respondent had accumulated from 1997 the right to be paid for a holiday taken in 1998 was wrong and/or perverse having regard to:

a) The tribunal's finding that the Respondent's holiday entitlement accrued on a monthly basis, but holiday undertaken in any one year could not be carried forward into the next year."

and pleading an absence of evidence there. I will deal with that matter separately.

4. The first grounds however, relate to the task that the tribunal set itself in relation to the compensatory award. It is not in issue in this case whether they should not have embarked upon an investigation to see, whether or not a deduction should have been made on the basis of Polkey and A E Dayton Service Ltd [1988] ICR 142. It is agreed that between the parties to this appeal that there was sufficiency of evidence before the Tribunal to warrant it embarking upon that exercise. Submissions were made on behalf of the employer that there should have been a 100% deduction, so far as the employee is concerned; the submission was there should be no deduction.
5. The Tribunal in fact found, as a result of their investigations that there should be a 60% reduction. The ground of the complaint made on behalf of the employer by Mr Gill is that the Tribunal asked completely the wrong question. He says that if one goes to authority, the test should have been a two-fold test. First would the adoption of a proper procedure have made any difference to the decision by the Applicant to dismiss the Respondent? If satisfied on the balance of probabilities, then what is the assessment of the chance that was lost? That in our judgment is the proper test to apply. Can it be said that this Tribunal did not in fact consider these criteria? Mr Gill submits that in fact they did not because they fell into error and the question that was put by the Tribunal was that in paragraph 3 of the extended reasons:

3."The Tribunal had to assess what were the chances of LMP having changed its mind and permitted the applicant to return to work on the site if a fair procedure had been carried out, which, on the respondent's admission, would have resulted in a written or final warning but not dismissal by the respondent."

6. That is a question of fact that relating to the change of heart of a third party but when one analyses the question and, the matter of fact that confronted the Tribunal in undertaking what was the proper exercise participated in the separate hearing by both parties, that was the real question that they had to determine. It is clear from the findings of the Tribunal in relation to the employer, the respondent, that their representatives Mr Cheatham and Mr Parrot whom the Tribunal and heard cross-examined and give evidence that they, were sympathetic, towards the employee. The third party was concerned that really was the stumbling block, so found by analysis in paragraph 5 of the extended reasons, that I earlier made reference to. The factual question concerned was addressed by the Employment Tribunal and was, in reality the relevant question of fact that they had to determine and there was material, that justified them in coming to the conclusion that they did.
7. It is implicit in their formulation of that question that they were satisfied on the balance of probabilities that it would have made a difference, had the proper procedures been carried out. Their exercise was then to carry out the task, which they did, of evaluating the chance. King v Eaton [1998] IRLR 686. There is a helpful passage there:

"It is for the Tribunal to decide as a matter of impression and judgment, whether the unfair departure from what should have happened was of a kind which makes it possible to say with more or less confidence, that the failure made no difference, or whether the failure was such that the world as it might have been cannot be sensibly constructed."

Both parties felt that it could be sensibly constructed. That was the exercise that they embarked upon, that gave rise to the compensatory hearing with to the evidential burden put upon the employer in these circumstances. It is in that context of course that one must consider those findings of the Tribunal that are the subject of adverse criticism by Mr Gill in the course of his submissions.

8. I turn to the extended reasons so far as the compensatory award was concerned. They first of all of course considered s.123 (1) of the Employment Rights Act and then went on to say at paragraph 3:

3."The tribunal had to assess what were the chances of LMP having changed its mind and permitted the applicant to work on the site of their procedure being carried out."

Which on the Respondents submissions would have resulted in a written or final warning but not dismissal by the Respondent. Now came the criticism. The Tribunal considered the telephone note made after the first hearing in which representative of LMP refused to reconsider his position and then made this comment:

"It is noteworthy that no witnesses will called from LMP to explain their hard line attitude, despite the Employment Tribunal's notification in the previous decision that the issue remained open and that further evidence could be called."

That is the context of paragraph 5 that I recited in some detail:

5. "We find that a reasonable employer would have communicated their disciplinary findings to site only and made representations as to why the Applicant should be allowed to return."

There was adverse comment made by Mr Gill of the finding that no witnesses were called from LMP to explain their attitude.

9. In an investigation of a matter of fact and where the burden of proof is upon the employer, it seems to us that it is a perfectly proper in evaluating and assessing the evidence, to consider the absence of evidence, as to a given relevant issue of fact. We find that the ground of appeal based upon that criticism is without foundation. Whilst the Tribunal below it might have expressed its reasons more for teliciously, none the less, they have made it clear that they followed the proper test. Secondly, in conducting the investigation as to whether it would have made a difference had the procedures been followed and evaluating the chance, they did so upon evidence that was properly before them in the light the employers burden of proof and in our judgment drew Competent inferences and make findings of fact, based upon the evidence and information before them.
10. It cannot be said in our judgment that they took into account any matter that they should not have taken into account, or that they gave such undue weight to any particular matter, that we could conclude that their decision was perverse. Of course, it may not always be the decision that we may have come to but if it is a decision a Tribunal applying the right tests and properly directed themselves, it be not for us to interfere. In relation to the findings of a 60% chance, that he would have remained in his job, again unless that assessment is so wildly different from that, that we think is sustainable on the evidence there is no basis for us to interfere with the assessment of that chance by a Tribunal, who had the benefit and the advantage of seeing and hearing the witnesses, forming their impression of the parties at the time at the original hearing.
11. Therefore for those brief reasons we hold that there is no merit in the appeal. We dismiss the appeal in that respect. I then go on to consider the separate limb, that is the holiday pay. As it is observed in the course of the submissions made before us, the Tribunal reasons on this aspect of the matter were rather brief. We have to look at the actual evidence; we do not have the Chairman's notes. We have first of all, the letter of the letter of 18 March 1996, the relevant passage being paragraph 4:

4."The holiday year ran from 1 January to 31 December and your entitlement accrues on a monthly basis. Holiday entitlement may not normally be carried forward to the next holiday year. Should you leave the company's employment, your accrued holiday entitlement will be paid to you and will be calculated by multiplying your monthly entitlement by your completed months of service in the calendar year of your departure, deducting there from any days of holiday taken that calendar year."

At page 18 of the extended reasons as to the compensatory part of the award, paragraph 8 the Tribunal said:

8. "The applicant's entitlement to a holiday is defined in his letter of appointment dated 18 March. The holiday year ran from 1 January to 31 December. The entitlement accrued on a monthly basis, but holiday undertaken in any one year could not be carried forward into the next year."

That may in fact be a typographical error, I know not, but it certainly does not accord with the express terms of the letter, which says that normally it would not but leaves open that it could. The quote continues:

"The applicant commenced employment on 12 March 1996 and took no holiday in 1996. During that period his holiday entitlement accumulated and he took his entitlement from 1996 in 1997."

12. Upon that basis they come to the conclusion that he had accumulated holiday entitlement and was entitled to 21 days paid holiday at £216 per week. Is that a perverse finding as Mr Gill submits? We find that there was a sufficiency of evidence for the tribunal to conclude as they did. There was an entitlement, in the basis of the letter. The norm was 'no accrued entitlement, but it could be' and then the evidence of the applicant which was clearly accepted that he in fact did operate that exception, implicitly with their approval and agreement for the 1996/1997 year. There is sufficient in our judgment for the tribunal to have concluded that they did. That there was an arrangement between the parties as to holiday, and as to accrual of entitlement, as to warrant them coming to the decision that they did in this compensatory award.
13. For those reasons therefore we dismiss the Respondent's appeal in relation to the complaints as to the compensatory part of the award, relating to holiday entitlement. That disposes, I think of all matters that are before us.
14. Application for Costs by the Respondent

Leave was given for these matters to come before this court. They were clearly therefore judged as being arguable. Whilst comments have been made in the appeal, that we might have taken a slightly different views on the fact, that is of no consequence, we are not disposed to consider a costs award in this case.