United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS ANNE WHYTE (Of Counsel) Messrs Jackson & Canter Solicitors 3rd Floor, Merseyside House 9 South John Street Liverpool L1 8BN
For the Respondent	MR TIM KENWOOD (Of Counsel) Instructed by: Liverpool City Council Legal Services Agency Personnel & Administration Direcotrate PO Box 88 Solicitors Businees Unit First Floor, Municipal Building Dale Street Liverpool L2 9SH


 


MR COMMISSIONER HOWELL QC

1. We have before us an appeal and cross appeal against the decision of the Employment Tribunal sitting at Liverpool on 30^th November 1999 and two dates in February 2000 set out in a statement of reasons sent to the parties on 21February 2000 at pages 18-23 of the appeal file before us. That decision rejected claims of unfair dismissal and racial discrimination by a Mr Henry Amaechi against his former employers, the Liverpool City Council. He was employed by the Council as an internal auditor from 14^th September 1991 to the date of his dismissal on 15^th June 1999.
2. Pursuant to the order of the appeal Tribunal made on 19^th October 2000 on the preliminary hearing of this appeal and for the reasons given in the judgment of Sir Christopher Bellamy of that date, the issues on Mr Amaechi's appeal against that decision are limited to the two principal issues. These are whether the Employment Tribunal, in its statement of reasons (which although not headed "Extended Reasons" is accepted by all parties for the purposes of this appeal to constitute and need to be judged as a statement of Extended Reasons) recorded sufficient findings of fact and reasoning in relation to the material issues of fact and law before them on the two claims of unfair dismissal and racial discrimination respectively.
3. By the Respondent's cross appeal, dated 28^th November 2000, the Respondents, in addition to relying on the Tribunal's grounds as sufficient to justify their decision on those two issues, contend, in the alternative, on the racial discrimination claims that the Tribunal erred in not dismissing the racial discrimination complaints they identified in any event. All of the matters complained of had taken place outside the time limit under Section 68(5) of the Race Relations Act 1976 before they were sought to be introduced into the proceedings by Mr Amaechi, and the Tribunal never determined that it was just and equitable to admit them in exercise of its discretion under s68(6), indeed its statement of reasons recorded that it expressly refrained from doing so. It is not necessary to refer to more than the salient paragraphs of the Tribunal's statement of reasons to explain the background to those submissions.
4. In paragraph 3 the Tribunal recorded a narrative of facts, which were largely not in dispute between the parties, in the following terms

"As to the complaint of unfair dismissal on the balance of the evidence before us both verbal and documentary and on the balance of probabilities, we find the facts relevant to that issue to be as follows

(a) The Applicant (born 19^th May 1959) was employed by the Respondent from 16^th September 1991 until 15^th June 1999 initially as a trainee accountant and later as an auditor. He had no disciplinary record.

(b) As a result of concerns about the Applicant's council tax and a renovation grant he had received investigations were carried out by the Respondents Internal Audit's Special Assignments Unit, who reported to the Head of Audit (Mr G Callaghan) in July 1998, recommending the Applicant be interviewed under the disciplinary procedure. Mr Callaghan appointed Mr S Modaley (Senior Audit Manager) to conduct an investigation into the concerns referred to.

(c) On 15^th February 1999 Mr Modaley reported to Mr Callaghan. In short his conclusion was the Applicant had failed declare an increase in salary in excess of £3000 which would have resulted in an increase in excess of £2000 in the contribution made by the Applicant towards the renovation grant he received. A further increase would have been payable had the Applicant not claimed, wrongly in the view of the Respondent's employees, that his daughter lived with him and not with her mother, who did not cohabit with the Applicant at the material time. In addition Mr Modaley concluded as a result of his investigation that the Applicant had not followed proper procedures with regard to his liabilities to Council Tax resulting in an underpayment in excess of £2000 most of which was in the event recouped out of the payment due to the Applicant under a compulsory purchase order. Part of the Applicant's responsibility was to examine the probity of the Respondent's systems including local tax systems. Mr Modaley recommended that a disciplinary hearing be arranged to consider the findings of his investigation . . . .

(d) On 27^th July 1998 the Applicant was suspended from work on full pay while a full investigation took place. The Respondent contended the Applicant did not assist in certain aspects of the investigation.

(e) The disciplinary hearing took place on 20^th and 22^nd April, 24^th May and 8^th and 10^th June 1999. The Applicant was represented by Mr Dunlop, his Union official. The case against the Applicant centred on 3 main elements i.e. the irregularities with regards to the renovations grant, the Applicant's conduct of his Council Tax and his general conduct during the investigation. Mr Callaghan was satisfied there was substance in the allegations made against the Applicant in respect of those matters. He considered the Applicant had undermined the trust placed in him as an auditor and what had occurred had amounted to gross misconduct, leaving with him with no alternative other than to dismiss him from his employment with immediate effect.

There was then a reference to Mr Callaghan's witness statement and dismissal letter which are among the papers provided to us for the purposes of this appeal. The Tribunal continued

"(f) The Applicant appealed against Mr Callaghan's decision but after consideration on 9^th and 10^th November 1999 the appeal was unanimously rejected."

5. The Tribunal then directed themselves as to the matters which an employer needs to show under Section 98 in relation to a claim for unfair dismissal. They recorded in paragraph 5

"In this case the reason for the dismissal is quite clear. It was because Mr Callaghan held a reasonable suspicion amounting to a belief in the guilt of the Applicant of the misconduct alleged against him".

6. In paragraph 6 of their Extended Reasons the Tribunal then directed themselves, in impeccable terms, as to the relevant test of determining whether the Respondent had acted reasonably, or unreasonably, in deciding to dismiss for that reason. In particular they referred to the cases of British Home Stores Ltd v Burchell [1978] IRLR 379 and Weddell v Tepper [1980] IRLR 96, and recorded, in relation to the employer's belief in the employee's misconduct, that the question they had to ask themselves was "Was that a reasonable belief in the light of what was known to the employer at that time?" and "Was it a belief arrived at after as much investigation as was reasonable in the circumstances?".
7. Finally they recorded in the last sentence of that paragraph

"The Tribunal is required to pronounce judgment on the reasonableness of the employer's actions, as well as considering the case from the employee's perspective".

8. They then summarised the submissions made to them and expressed their conclusions on these issues in paragraph 8, which was a matter of debate and dispute in the argument on the appeal hearing before us, and the following paragraph as follows:

"8. The Tribunal are unanimous in the decision that the Applicant was fairly and not unfairly dismissed. Mr Callaghan undoubtedly believed that there were reasonable grounds on which to believe the Applicant was guilty of misconduct in the respects referred to, that there were reasonable grounds on which to sustain that belief and at the stage at which Mr Callaghan formed that belief the Respondent had carried out as much investigation as was reasonable in the circumstances of the case. Accordingly we are unanimously satisfied that it was reasonable for the Respondent to take the view that the Applicant had been guilty of gross misconduct and to dismiss on that account

9. Accordingly the Applicant's complaint of unfair dismissal fails and is dismissed"

9. That concluded the Tribunal's statement of reasons as regards the complaint of unfair dismissal, and they then went on to consider the complaint of racial discrimination, which had been made to them not in the Originating Application but in a supplemental document headed "Complaint of Racial Discrimination". This we have been told was supplied to the Tribunal under cover of a letter dated 14^th December 1999 and there was no dispute it was before the Tribunal at the time of the hearing.
10. The Tribunal identified the complaints by reference to what was said in that document as follows in paragraph 10 of their statement of reasons

"As to the complaint of racial discrimination the Applicant makes eight specific allegations, two against Mr Callaghan and six against Mr Modaley. They are all denied and in addition the Respondent contends that the application of racial discrimination to the Tribunal was made out of time and therefore the Tribunal has no jurisdiction to hear or determine those complaints. On the basis of the evidence before us, both verbal and documentary, and on the balance of probabilities we find the facts relevant to those issues to be as follows"

The Tribunal then set out the summary details of the nature of various complaints including, first, a complaint against Mr Callaghan that the decision to dismiss the Applicant on 15^th June 1999 on the ground of gross misconduct had been an act of racial discrimination. The other complaint against Mr Callaghan had been in relation to his appointment of Mr Modaley the previous year, on 30^th July 1998 to conduct the disciplinary investigation which led to the disciplinary proceedings against Mr Amaechi and ultimately to his dismissal. There were then six more specific complaints of various types of oppressive or unacceptable conduct by Mr Modaley against the Applicant personally.

11. The Tribunal then directed themselves as to the relevant provisions as to time limits under Section 68 of the Race Relations Act 1976, recorded the submissions in summary of the parties on the substance of the racial discrimination complaints and expressed their conclusions in the final paragraphs of their statement of reasons as follows

"13. The Tribunal are unanimous in deciding that the Applicant has failed to satisfy the Tribunal that he had been discriminated against on the ground of his race. Unfortunately the Applicant (somewhat belatedly) attributed particularly the Respondent's investigation and his ultimate dismissal to supposed racial dislike on the ground only of his race. In the view of the Tribunal that was totally unjustified having regard to the totality of the circumstances and the facts set out above. Moreover the Tribunal must have regard to its own finding that the Applicant was dismissed fairly. That said it is recognised that the Applicant has come to believe genuinely in the merit of this complaints which the Tribunal considers to be without justification and that the inferences he seeks to draw from certain thing are mistaken and wrong. It would be unfortunate if the Applicant allowed an obsession with the past to prejudice his future. He is a man of some ability as shown by the skilful manner in which he has persisted with his complaints over a period of time despite their constant rejection and the way he conducted his case before this Tribunal, for which he is to be congratulated; he need never think that he left anything unsaid or any document overlooked during the course of this hearing.

14. For the sake of completeness in view of the decision of the Tribunal that the Applicant has failed to establish a case of race discrimination, it is unnecessary to determine whether the complaints or any of them were submitted out of time, which would be dealt with as a preliminary issue if and as appropriate.

15. Accordingly the Applicant's claim of racial discrimination also fails and is dismissed."

12. The principles which we must apply in deciding whether the Tribunal's findings of fact and reasons are adequate on the issues that were before them for decision are well established and not in dispute. It is sufficient to refer, only briefly, to the main authority mentioned to us of Meek V Birmingham District Council [1987[ IRLR 250 for the proposition that the Tribunal's reasons are not to be subjected to a process of over-refined legal analysis, but it must be possible of the parties to understand, on a fair reading of the Tribunal's statement of reasons as a whole, who has won and who has lost on the material issues of fact and law in the case, and the reasons why the decision has gone for or against them respectively.
13. In relation to the racial discrimination complaints, the recent decision of the Court of Appeal in Anya v University of Oxford [2001] IRLR 377 emphasises the particular importance of a Tribunal recording sufficient findings of primary fact from which inferences for, or against, the finding of racial discrimination alleged are, or are not, to be drawn by it.
14. Applying those principles to the statement of the Tribunal's reasons in this present case, we have concluded that we must accept the submissions of Miss Whyte, who appeared for Mr Amaechi on the appeal, in relation first to the unfair dismissal claim. In particular it appears to us that, having regard to the issues raised in the document headed Statement of Case, which it is common ground was before the Tribunal, the Tribunal's findings and statement of reasons do not extend to all the material issues that we are satisfied were properly raised before them for decision.
15. In particular there appears to be no findings or reasoning stated by the Tribunal on the following two issues raised by Mr Amaechi, albeit in a document not prepared with the benefit of legal assistance. First that the whole process against him, including the disciplinary investigation and the proceedings that eventually led to his dismissal, was a product of bias on the part of his employers involving from an early stage Mr Callaghan, the Head of Audit personally. Secondly that the procedure adopted by the employer leading up to the decision to dismiss was unreasonable and defective because it was based on a disciplinary investigation by Mr Modaley which was itself fatally flawed by the misconduct alleged against him.
16. We have been satisfied that even if those claims were not justified or substantial as a matter of fact, they were issues properly raised in the proceedings. The Tribunal should have recorded express findings on them and given, albeit in only brief terms, the reasons why they were not satisfied those complaints were well founded. Paragraph 8 of the Tribunal's statement of reasons (even reading it with the omission of the word "that" from the fourth line in the printed statement of reasons, so as to identify the second question under the Burchell test as a matter for the Tribunal's own determination rather than an enquiry as to what Mr Callaghan on behalf of the employers had had in his mind, which we think is the fairer way of reading it, having regard to the express directions the Tribunal had given themselves about the law in the preceding paragraphs), does not appear to us to do more than contain an expression of the Tribunal's conclusion on that second issue as distinct from a statement or explanation of the reasoning process leading up to that conclusion. For those reasons we consider that the Tribunal's statement of reasons was defective in relation to their finding of unfair dismissal.
17. We have reached a similar conclusion in relation to the way in which the Tribunal dealt with the racial discrimination issues, on the assumption that it was proper for those issues to be the subject of a decision on their merits by the Tribunal at all. Again, applying the principles laid down by the Court of Appeal in Anya, we have not been satisfied that the Tribunal adequately addressed the relevant issues of primary fact in order to make clear to the Applicant why the Tribunal had declined to draw inferences of racial discrimination in his favour as he contended.
18. However, we have conversely to accept the submissions of Mr Kenwood, who appeared on behalf of the Respondent, that in fact the racial discrimination claims all being, as we are satisfied, only put forward outside the normal time limit were not in fact properly before the Tribunal for determination at all. Under Section 68(1) of the Race Relations Act 1976 there is an express prohibition on an Employment Tribunal considering a complaint made under Section 54 unless it is presented to the Tribunal before the end of the period of three months beginning when the act complained of was done.
19. In the context of all these complaints, the jurisdiction to deal with the complaint outside that time, it is well established, arises only when the Tribunal finds, in exercise of its discretionary power under Section 68(6), that it is just and equitable in all the circumstances of the case to consider the complaint. We, therefore, have been satisfied by Mr Kenwood's argument that the Tribunal, who expressly recorded that they were not determining that jurisdictional question, erred in proceeding to pronounce on the merits of the racial discrimination complaints at all.
20. The consequence is that we have to set aside the Employment Tribunal decision in its entirety. First, as regards unfair dismissal, we have concluded that, in the light of our decision that the present Employment Tribunal decision cannot be allowed to stand, the only just course is for us to remit the unfair dismissal claim to a fresh Tribunal to re-hear and re-determine all relevant issues under Section 98(1) and Section 98(4) of the Employment Rights Act 1996.
21. We did consider whether it would be possible to limit the issues for re-determination to the issues of reasonableness under Section 98(4) which have formed the main part of the argument before us. However, we concluded that that would not be the right course for us to adopt, for the particular reason that one of the allegations made by Mr Amaechi was that the whole process against him had been the product of bias. In those circumstances for a proper determination of that issue we think it would be more appropriate for the new Tribunal to have the power and the duty to re-determine the issue of what was the genuine reason for his dismissal under 98(1).
22. Secondly, as regards the racial discrimination complaint. The position, in the light of our judgment, is that the complaints listed in paragraph 10 of the Tribunal's statement of reasons, numbering a total of eight (two against Mr Callaghan and six against Mr Modaley) were all, we are satisfied from what appears before us, clearly out of time by the time they were sought to be introduced into the proceedings before the Tribunal. Those complaints were never properly before the Tribunal for determination on their merits at all, since no decision had been taken and no decision has yet been taken, by any Tribunal to admit them for consideration in exercise of the discretion under Section 68(6) of the Race Relations Act 1976.
23. It will, therefore, in our judgment be a matter for the new Tribunal to which the case is remitted for re-determination of the unfair dismissal claim, to decide whether any renewed application to it to admit those racial discrimination claims out of time should be allowed in exercise of their discretion under Section 68(6). That will be a matter for determination by that Tribunal if, and when, the application is renewed, and will be a decision to be taken in the light of the circumstances put before the fresh Tribunal to justify that application.
24. We comment only that it must not be overlooked that substantial grounds do have to be shown to warrant a Tribunal exercising that discretion under Section 68(6) to admit complaints which by themselves are out of time and otherwise the wrong side of the prohibition in Section 68(1). We comment further that on the material which has been put before us, which admittedly may not be all the relevant material to aid a determination of this question, we have not ourselves been satisfied that any such grounds would have existed for the present Tribunal to have admitted them for determination.
25. The appeal and cross-appeal are both allowed and the case remitted accordingly.