United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR N GRUNDY (of Counsel) Manchester City Council Chief Executive's Department PO Box 532 Town Hall Albert Square Manchester M60 2LA
For the Respondent	MR B CARR (of Counsel) Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE


 


HIS HONOUR JUDGE D PUGSLEY

1. This is an appeal from the Employment Tribunal sitting in Manchester where, by a majority, the Tribunal decided that the Respondent had made an unlawful deduction from the Applicant's remuneration. The Chairman is the dissenting voice.
2. The appeal concerns the proper legal construction and application of clause 14(a)(i) of the Joint Negotiating Committee for Local Authorities (Building and Civil Services Engineering) Agreement incorporated into the contracts of employment of many employees of the Appellant and the other local authorities.
3. That clause provides as follows:

"14 EXCLUSION FROM BENEFIT

(a) An employee whose absence on account of sickness is due or attributable to:

(i) his or her own misconduct, ….

shall not be entitled to an allowance under this Scheme, except at the discretion of the employing authority."

4. We are told that the Respondents, who are a large local authority, are concerned about the practice whereby some of those employees who are to face disciplinary proceedings take time off due to stress related illnesses. We think we can take judicial notice that the incidence of time lost due to stress related illness is a major problem for employers.
5. The decision sets out the relevant issues with care and we do not think we can improve upon the position by paraphrasing as opposed to quoting from it. Paragraphs 3-11 of the decision say this:

"3 The applicant commenced employment with the respondent in August 1976. He was employed as an electrician and had a satisfactory sickness absence record up to March 1998. According to a sickness absence record produced by the respondent covering the period from July 1994 to March 1998 the applicant had not taken any time off work due to stress or depression. However, the applicant has been continuously off work since 20 March 1998. According to medical evidence introduced at the Hearing it is apparent that the applicant is suffering from an anxiety/depressive illness which is preventing him from returning to work at the present time.

4 In January 1998 an investigation was undertaken by the respondent in relation to the way in which the applicant was carrying out certain aspects of his job. The applicant was not formally notified of this investigation until the beginning of February 1998. The investigation related to the alleged mis-booking of work by the applicant in respect of certain activities he had undertaken during December 1997. A disciplinary hearing was convened for 19 March 1998 and the applicant notified accordingly.

5 On 17 March 1998 (2 days before the disciplinary hearing was due to take place) the applicant consulted his own doctor describing symptoms of depression which the applicant stated had begun during December 1997. This was the first time the applicant had consulted his doctor about these symptoms. He was offered a "sicknote" which he declined since according to the Doctor's medical report "there were important matters at work to be resolved".

6 The applicant attended the disciplinary hearing on 19 March 1998, as a result of which the applicant was issued with a "second stage written warning" for "mis-booking of work". On the following morning the applicant notified the respondent that he was unwell and claimed that he was suffering from "an industrial injury". This allegation was referred to in a report from the respondent's Occupational Health Nurse who examined the applicant on 24 March 1998. In the same report she stated that the applicant felt victimised as a result of the disciplinary sanction which had been imposed upon him.

7 On 27 March 1998 the applicant was seen by the respondent's Medical Officer. In his brief report he indicated that the applicant was suffering from "reactive anxiety/depression" which "seems to be a response to process which started in December/January".

8 On 31 March 1998 the respondent wrote to the applicant advising that the respondent did not propose to pay to the applicant during his period of absence sick pay to which the applicant would otherwise have been contractually entitled because the respondent took the view that the stress from which the applicant was then suffering was a direct consequence of his own misconduct for which the disciplinary sanction had been imposed. The respondent produced an extract from the Joint Negotiating Committee for Local Authorities (Building and Civil Service Engineering) Agreement which the applicant accepted had been incorporated into his own contract of employment. The relevant extract for the purpose of these proceedings is as follows:-

"14. EXCLUSION FROM BENEFIT

(a) an employee whose absence on account of sickness is due to or attributable to

(i) his own misconduct …shall not be entitled to an allowance under this Scheme except at the discretion of the employing authority".

9 By letter dated 22 April 1998 the applicant's union representative requested the respondent to review its decision to withhold sickness pay from the applicant. On 20 May 1998 the respondent replied to that letter referring the applicant's representative to the relevant section of the Agreement (set out in the previous paragraph of this Decision) and indicating that the respondent would be happy to review its decision if the applicant was able to produce some medical evidence to support the applicant's contention that the medical problems from which the applicant was then suffering had commenced prior to the disciplinary process. The applicant then forwarded to the respondent a letter from his doctor dated 18 May 1998 stating "I first saw him (i.e. the applicant) on 17 March when he was describing symptoms of depression dating from Christmas 1997". There was some further correspondence between the applicant's union representative and the respondent in which the respondent confirmed its position that it would continue to withhold sickness pay from the applicant and this was formally confirmed to the applicant. A final appeal to the respondent's Policy and Resources Employee Appeals sub-Committee by the applicant on 3 November 1998 was also dismissed.

10 By letter dated 15 January 1999 the applicant's union representative forwarded to the respondent a copy of a medical report which had been obtained from Dr P Mbaya, a Consultant Psychiatrist based at Withington Hospital, Manchester. In his report Dr Mbaya confirmed that he first saw the applicant on 27 July 1998 and had been monitoring his progress since that date. He confirmed that both the applicant and his wife demonstrated symptoms consistent with clinical depression and that the applicant stated these symptoms began "at the end of last year and gradually got worse". Dr Mbaya went on to say that he had no reason to doubt this information and that he was satisfied that the symptoms had started at the end of 1997 (although he did not offer any explanation for this particular conclusion other than the information he had received from the applicant). The respondent replied by letter dated 26 January 1999 suggesting that the date on which the stress allegedly commenced coincided with the date of the misconduct for which the applicant had been disciplined and that as the medical report contained no other explanation for this condition the respondent continued to maintain that it was due to the applicant's own misconduct but that if some alternative explanation could be provided the respondent would be happy to review the situation.

11 On 27 May 1999 the applicant presented an Originating Application to this Tribunal complaining that the respondent had made unlawful deductions from the applicant's remuneration. Following a couple of adjournments from hearing dates previously allocated the case eventually came before the Tribunal on 4 November 1999, but was then further adjourned due to unexpected administrative difficulties. The Chairman of the Tribunal on that occasion suggested to the parties that some further medical evidence might be helpful. Consequently, the respondent arranged for the applicant to be medially examined on 29 November 1999 by Dr S McKeown, a Consultant Psychiatrist based at Cheadle Royal Hospital in Cheshire and Dr McKeown prepared a report dated 30 November 1999 which was introduced in evidence on behalf of the applicant. In that report Dr McKeown stated that the applicant informed him that his stress problems commenced towards the middle of 1997 and it was only when his wife threatened to leave him that he consulted his own doctor in March 1998. The report also contains the following relevant comments:

"On the balance of probabilities it is very unlikely that one single event or traumatic experience can trigger a medical problem of this nature. It is also not unusual for individuals to conceal a developing depressive disorder at work and for their performance at work to be unremarkable".

"I think it is unlikely that the pressures of disciplinary proceedings have led to his problem although they may certainly have exacerbated it."

"I would not necessarily expect the medical reports provided to give any indication as to the likely cause of his medical problem and I don't think there is any significance to be drawn from this".

"The absence of previous time lost through stress/anxiety is neither particularly unusual nor significant".

"Mr Thurston is presenting with and describing a typical anxiety depressive illness which began from his wife's account as early as the Summer of 1997 and which certainly seems to have been well in place by the end of 1997 as described by Doctors Ream and Mbaya separately"."

6. The Tribunal decided that in order to make a determination as to whether the decision to withhold payment of sickness benefits was lawful they should ask themselves three questions: -

(a) What was the principal reason for the Applicant's absence from work on 20 March 1998?

(b) If the applicant's absence was due principally to the imposition of the disciplinary sanction on the previous day, whether this would fall within the definition of the expression "his own misconduct"?

(c) If they were satisfied that the Applicant's absence from work was due to or attributable to his own misconduct, whether the Respondent's refusal to exercise discretion in the Applicant's favour was perverse or wholly unreasonable in all the circumstances?

7. It was submitted on behalf of the Applicant that the words 'his own misconduct' in Section 14 of the agreement must be restricted to absences as a result of injury suffered in the course of some unlawful activity, and that the employer was seeking to distort the interpretation of this expression by including absences from work as a result of the consequences of misconduct. It was submitted that the medical evidence introduced suggested that the Applicant's depression commenced in December 1997 and that the Respondent acknowledged that the Applicant was not formally notified of the investigation until February 1998. The alternative submission was made that if the Tribunal took the view that the Applicant's absence was due to his own misconduct, the Respondent should have exercised discretion to make payments in favour of the employee having regard to the nature of the incident for which he had been disciplined and the fact that the Applicant was then clearly suffering from depression. It was pointed out that there had been no submission on behalf of the Respondent that the Applicant was in any way feigning his illness.
8. It was submitted on behalf of the employer that the wording of Section 14 of the agreement made it quite clear that an employee would be disqualified from sickness benefits when the reason for his absence from work was directly connected to his misconduct or the consequences of that misconduct. It was pointed out that the Applicant's absence from work started on the day immediately following the disciplinary hearing and that the Applicant had taken no time off prior to that date for stress or similar related conditions. It was urged that despite the conclusions reached by Dr Mbaya and Dr McKeown neither of the doctors had been able to demonstrate in their reports any plausible reason for the Applicant's failure to seek medical advice prior to 17 March 1998 or take any time off work prior to the disciplinary hearing.
9. The Majority View

The majority of the Tribunal considered that on the medical evidence before them the Applicant's absence from work on 20 March 1998 was a direct result of stress/anxiety which had commenced some time prior to that date. Although the disciplinary hearing and the sanction imposed upon the Applicant probably exacerbated the Applicant's state of health, the medical evidence suggested that his absence from work from 20 March 1998 was not directly due nor attributable to his own misconduct. They therefore considered that the Respondent was not entitled to withhold sickness payments to the Applicant under the relevant scheme. Both the members also agreed that even if they had concluded that the Applicant's absence had been due to the disciplinary sanction imposed upon him the Respondent would still not have been entitled to have withheld payment since the expression 'his own misconduct' should not be extended to include consequences of that misconduct. One member considered that this expression should be limited to absences due to an injury suffered in the course of some unlawful activity. The other member took the view that the word 'misconduct' was somewhat removed from the pressures which can build up in the advance of a disciplinary hearing causing stress/anxiety. The majority noted that the Applicant had stated in evidence that he had never known such an interpretation to be used before and that this assertion had not been challenged in cross-examination. The majority, although they did not in terms say so, were clearly, on any real and robust reading of the decision, of the view that the authority should have exercised their discretion to pay sick pay since they did not produce any evidence to show the extent and the consistency of their approach in their exercise of discretion in these circumstances. In a nutshell, the majority thought that the Applicant was entitled to the payments, further, they thought that even if he was not then this was a case where the local authority should have exercised their discretion to make payments.

10. The Chairman's View

The Chairman noted that the consultant psychiatrists in their two medical reports were relying almost exclusively on information provided by the Applicant and his wife as to the date on which the Applicant's stress and anxiety symptoms commenced. The fact that the Applicant was suffering from clinical depression when he had been examined did not assist in pin pointing when or how the depression had started. The Chairman therefore examined the credibility of the Applicant in relation to other factual circumstances of a more objective nature. In particular the Applicant had never consulted his Doctor about stress or depression until two days prior to the disciplinary hearing; the Applicant had never taken any time off work due to stress or depression prior to the disciplinary hearing; on the day following the disciplinary hearing the Applicant for the first time asserted that he was unable to continue to work due to stress. The Chairman noted a discrepancy in that the Applicant had told Dr McKeown that his stress symptoms had begun in the middle of 1997, whereas he had informed the doctors who examined him earlier that the symptoms started in December 1997. Taking all of these facts into account the Chairman was of the firm conclusion that the principal reason for the Applicant's absence from work on 20 March 1998 was a combination of the disciplinary proceedings and the disciplinary sanction imposed upon the Applicant. The Chairman disagreed with the interpretation of the majority of Section 14 of the agreement. In the Chairman's view the expression 'sickness due to or attributable to his own misconduct' was sufficiently wide to include the reasonably anticipated consequences of such misconduct namely, a disciplinary sanction. Finally, the Chairman considered on the basis of his own conclusions about the Applicant that it was not unreasonable for the Respondent to exercise discretion against making payments under the scheme to the Applicant, notwithstanding the Applicant's length of service and the mitigating circumstances advanced on his behalf.

11. Before us, Mr Grundy, who appears for the Appellant, has abandoned the argument that appeared in his skeleton argument, that we should apply the dictionary definition of 'attributable' as "To regard as resulting from." and namely the 'but for' test. We accept that that is an appropriate concession.
12. Mr Grundy's patient researches have disinterred the case of Walsh v Rother District Council [1978] ICR 1216 in which the Court considered the meaning of the words "attributable to" in the context of Regulation 4(1) of the Local Government Compensation Regulations 1974.
13. The detailed factual background to that case is not one which is immediately relevant to this case. In 1973 the Applicant, who had been the Town Clerk of a Borough Council which was abolished by the reorganisation following the Local Government Act 1972, was appointed chief executive of a newly formed District Council. That Council had created a post of chief executive after considering the change in structure following a study group that was published in 1972. The Applicant was made redundant in 1976 after the Council decided to change the administrative structure and to abolish the post of chief executive. The Applicant claimed that he was entitled to compensation under the Compensation Regulations on the ground that the loss of his employment was:

"Attributable to the Local Government Act of 1972."

Mr Justice Donaldson, cited the dictum of Lord Reid in Smith v Central Asbestos Co Ltd [1973] AC 518 533:

"… 'attributable'. That means capable of being attributed. 'Attribute' has a number of cognate meanings; you can attribute a quality to a person or thing, you can attribute a product to a source or author, or you can attribute an effect to a cause. The essential element is connection of some kind."

Mr Justice Donaldson then went on to say at 1220:

"Suffice it to say that these are plain English words involving some causal connection between the loss of employment and that to which the loss is said to be attributable. However, this connection need not be that of a sole, dominant, direct or proximate cause and effect. A contributory causal connection is quite sufficient."

Mr Grundy has argued that if the Applicant's misconduct which led to disciplinary proceedings had any connection, or to put it more accurately, a connection of some kind, with his absence from work, then the local authority were justified in withholding his sick pay.

14. It is pertinent to note that that is a considerably wider interpretation than was argued on behalf of the Respondent before the Employment Tribunal when it was claimed that an employee would be disqualified from claiming sickness benefits under the scheme where the reason for his or her absence from work was directly connected to his or her misconduct or the consequence of that misconduct.
15. Mr Grundy has referred us to that part of Chitty on contracts of employment, paragraph 12/049 for the proposition that the ordinary meaning of words should be adopted. Mr Grundy has pointed out to us that the majority gave separate and different meaning to the expression:

"Absent on account of illness… due to or attributable to his own misconduct".

One member considered the expression should be limited to absences due to an injury suffered in the course of some unlawful activity; the other member took the view that the word 'misconduct' was:

"Somewhat removed from the pressures which can build up in advance of a disciplinary hearing causing stress/anxiety."

Mr Grundy makes a point that both these words are somewhat vague and the word 'unlawful' can convey a wide number of words, as can the phrase 'somewhat removed'.

16. Mr Carr points out that there was evidence on which the majority were entitled to make the finding that the Applicant's symptoms had pre-dated any knowledge of the disciplinary action. The local authority's own medical officer had reported that his condition seemed to be a response to a process which started in December or January (paragraph 7); the Respondent's Doctor reported that he saw the Respondent on 17 March and he was describing symptoms of depression during Christmas 1997 (paragraph 9); in a medical report from Dr Mbaya, a Consultant Psychiatrist, it was stated that the Respondent had first been seen (by him) on 27 July 1998 and his symptoms began "at the end of last year and gradually got worse" (paragraph 10); in a report dated 29 November 1999 Dr McKeown, Consultant Psychiatrist recorded that the Applicant had "Informed him his stress problems commenced towards the middle of 1997 and it was only when his wife threatened to leave him that he consulted his own doctor in March 1998". It was noted that that report (of which we do not have a copy but we assume Mr Carr has correctly quoted it) stated that it was not unusual for individuals to conceal a developing depressive disorder at work and for their performance at work to be unremarkable. Dr McKeown was of the view that it was unlikely that the pressure of disciplinary proceedings had led to this problem although they may certainly have exacerbated it:

"Mr Thurston is presenting with and describing a typical anxiety depressive illness which began, from his wife's account, as early as the Summer of 1997 and which certainly seems to have been well in place by the end of 1997 as described by Doctors Ream and Mbaya separately."

17. Mr Carr notes that the Preliminary Hearing of the Employment Appeal Tribunal identified three issues for consideration at the Full Hearing. Did the majority fall into error in failing to make a finding of fact as to the date at which the Applicant first suffered depression? Mr Carr points out that we are not dealing with a personal injury case in which an injury arises from a clearly defined single incident. The nature of the condition of depressive illness/anxiety is one in which it would be difficult, if not impossible, to identify a precise date when it started. Although not Mr Carr's words, essentially his submission was, that this is a condition that arises over a period of time rather than necessarily at a point in time. Mr Carr submits that in any event the majority were perfectly entitled to come to the conclusion that, even if the absence was due to the disciplinary sanction which was imposed on him, it was still not an error for the majority to take as they did that this was not covered by the expression "Absence on account of sickness ….. due or attributable to his own misconduct". Mr Carr points out that the exclusions should be consistent with the other exclusions within paragraph 14(a), and they demonstrate that there must be a direct connection between the absence and the prescribed activity (active participation in sport as a professional/injury; working in his own time on his own account or for another employer).
18. Mr Carr contends that on its proper construction the clause should be read as applying to acts of misconduct which directly cause injury. Obvious examples would be horseplay or deliberate misuse of equipment rather than be the consequence of what the employer at a later stage does in respect of such misconduct. The fact that the majority express their reasoning in different form does not, Mr Carr urges, invalidate the correctness of their construction. Mr Carr points out that an exemption clause, if ambiguous, should as a matter of construction be construed against the party seeking to rely on it.
19. Mr Carr further argues that in the event that the absence did fall within clause 14 it was open to the majority to concluded that the Appellant was entitled to benefit on the ground that the Appellant had not produced evidence to show the extent and consistency of their approach. This, Mr Carr says, is an alternative finding and that on a fair reading of the decision the view of the majority was that the Appellant had failed to demonstrate any proper basis on which it could properly conclude in the exercise of its discretion it had acted properly in excluding the Respondent from benefit. This, says Mr Carr, was a finding open to them.
20. By the very nature of the condition much of the diagnosis of depressive illness will depend on what the patient has said. Employers are faced with a real problem when they are confronted with employees claiming they are unfit to work by reason of stress related conditions or depressive illnesses. Where a medical certificate authenticates this condition in the briefest of terms with words such as 'stress related symptoms' we can well understand that employers feel it necessary to view this with concern. Absenteeism not only effects the efficiency with which an undertaking can be run but it also throws an unneeded and unwanted burden on other employees. It is pertinent to note, as was submitted on behalf of the Applicant at the initial hearing, that there had been no suggestion on behalf of the Respondent that the Applicant was feigning his illness. Both the psychiatrists, including the psychiatrist instructed by the Respondent, considered that the Applicant had a depressive illness.
21. We accept Mr Carr's conclusion that on the evidence before them of the medical reports and all the other evidence, the majority were entitled to conclude that the reason for the absence from work was not connected with his misconduct. We accept that it would be inappropriate to be able to date the start of this depressive illness with the sort of precision that would be appropriate if someone had, for example, suffered injuries in a car accident. We accept that on the evidence before them it was possible for them to reach the conclusion which they did reach.
22. Given the context in which clause 14(a) of the Joint Negotiating Agreement occurs we consider that the majority were not in error in their construction of that clause, and that the expression "his own misconduct" should not be extended to include consequences of that misconduct. The exclusions from sick benefit clearly indicates that a person who works for another employer or who is involved in working on his own account in his spare time or plays a sport for financial gain is to be excluded if the injuries arise therefrom. It is obvious that an employee who deliberately misused equipment as part of horseplay or something of that sort would be excluded from benefit. We consider the majority were correct to say that where there is a genuine psychiatric illness, even if that is a consequence of disciplinary proceedings which were foreseeable, if an employee was guilty of misconduct, that is too remote to come within the construction of these rules. Further we consider the majority were correct in their view that even if they were to have construed Section 14 as covering the Applicant we consider it was open to them to say that the Respondent should have exercised discretion to make payments in favour of the applicant having regard to the nature of the incident for which he had been disciplined and the fact that the Applicant was clearly suffering from depression. We consider that the majority were entitled to take the point that it was unchallenged evidence from the Applicant that he had never known such an interpretation be placed on this clause before. The fact that the Respondent did not produce any evidence to show the consistency and extent of their approach was a matter which the majority were entitled to take into account.
23. Employment Tribunals were set up to provide an expeditious and economic way of resolving differences that arise in the workplace. The members of the Tribunal have an advantage of being able to make assessments based on their experience of the realities of working life and of industrial practice. This Tribunal can find, as we say, no error of law in their approach and the appeal is therefore dismissed.