United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S SPENCER (Solicitor) Messrs Jones & Warner Solicitors 60 Lombard Street London EC3V 9EA
For the Respondent	MISS A WHYTE (Of Counsel) Messrs Jackson & Canter Solicitors 3rd Floor, Merseyside House 9 South John Street Liverpool L1 8BN


 


MR COMMISSIONER HOWELL QC

1. We would all like to preface the judgment I am about to give by saying how grateful we were for the assistance we received from Counsel on both sides in this case with two very well presented arguments. This is an appeal by a charity, The Brothers of Charity Services Merseyside, against the decision of the Liverpool Employment Tribunal given after a hearing in March 2000 and set out in Extended Reasons sent to the parties on 19^th April 2000, at pages 5-9 inclusive in the appeal file.
2. The proceedings in which that decision was given were proceedings for alleged unfair dismissal brought by a Mr George Eleady-Cole who had been employed by the Brothers for only a short period of under three months between 1^st May and 29^th July 1999, as a full time support worker in a hostel for disadvantaged persons which they operate in Liverpool. Proceedings for unfair dismissal after a period of service of only that length are, of course, completely precluded under the Employment Rights Act 1996 unless there is some special reason to take them outside the normal rule that a year's continuous service before termination of employment is required before proceedings can be brought at all.
3. In this case, the reason put forward was that Mr Eleady-Cole had been improperly and unfairly dismissed because he was, what is colloquially called a "whistle blower". In other words he had made a "protected disclosure" for the purposes of Section 103A Employment Rights Act 1996, inserted along with other provisions related to protected disclosures, by the Public Interest Disclosure Act 1998. The claim by Mr Eleady-Cole's Originating Application, registered on 25^th October 1999, was that the reason for his dismissal, or rather the non-renewal of his employment at the end of a probationary period, was in the words of paragraph 9-11 in his Originating Application

"9. I believe that the Respondents dismissed me because I had informed on other employees through the EAP Programme.

10. The EAP Programme is a programme set up independently of my employers whereby you can discuss family problems, relationships, bereavement or legal problems and it is supposed to be fully confidential.

11. My complaint was about my fellow workers use of pornographic material and illegal substances at the residence where I worked".

4. The then Respondents' answer, dated 16^th November 1999, acknowledged that disclosures relating to misconduct by other employees in a superior position to Mr Eleady-Cole at the home had been made by him, but they referred only to disclosures made in the course of an internal disciplinary investigation which the Respondents themselves conducted. There is no dispute that Mr Eleady-Cole and another support worker gave evidence to this investigation and was acknowledged that those disclosures had been made in the course of it during July 1999, while Mr Eleady-Cole was still employed by the Brothers. It was also expressly acknowledged in paragraph 14 of the Respondents' Notice of Appearance that these constituted protected disclosures.
5. Nevertheless it was disputed that this had been the reason for Mr Eleady-Cole being dismissed. The case put forward in the Respondent's answer was that the reason for his trial period of employment not having been extended was that the appraisal conducted of his performance at the end of that trial period had been insufficiently good to warrant his being offered further employment.
6. In particular there was a further reference in paragraph 10 of the Respondents' Notice of Appearance to certain specific matters which had been reported by a Mr Bonnar, who had made the final appraisal report on Mr Eleady-Cole towards the end of July 1999, recording various aspects in which it was Mr Bonnar's view that the Applicant's conduct was less than satisfactory for a continuing employee. In particular he had behaved stringently and inflexibly or otherwise insensitively towards the persons using the hostel, he had shouted at them to wake up if they fell asleep during the day, he had rushed to get jobs done so that he could watch television and he had regularly criticised the job performance of other support workers. There was also an allegation that he had not acted properly when an inmate in the hostel had had some form of fit which had resulted in Mr Bonnar, as manager admonishing the Applicant.
7. It was therefore crucial, before the unfair dismissal complaint could have succeeded, for it to be determined whether, accepting that there had been some protected disclosure of which the relevant managers had been aware before the decision was taken to dismiss, that had indeed been the reason or a principal reason for Mr Eleady-Cole's dismissal. Only if that was established could the proceedings be entertained by the Tribunal for the purpose of making any award in his favour at all, and only if that was established were the conditions of 103A met by which he would be taken, for the purposes of the Act, to have been unfairly dismissed.
8. That issue was a matter of fact for the Tribunal to determine itself on the balance of probabilities on the evidence presented to it. It was common ground in the argument before us that it was an issue of that nature. This is not a question for a more limited enquiry such as the Tribunal is concerned with under Section 98(4) of the same Act, to determine whether an employer's conduct has been within a band of reasonable responses. This is an issue on which a Tribunal is bound to form its own view, on the balance of probabilities as a question of fact and causation on the evidence before it.
9. The Tribunal's Extended Reasons for the decision they reached that Mr Eleady-Cole had indeed been unfairly dismissed contrary to this section and that, therefore, it had been the fact of a previous protected disclosure that caused his dismissal, are set out in their statement. It is not necessary to refer to them all but certain passages were the subject of argument before us and we will refer to them briefly as follows.
10. In paragraph 4.7 to 4.14 (extracted below), the Tribunal record their findings on the nature of the disclosures made by Mr Eleady-Cole to the advice service "EAP" to which he referred to in his Originating Application, and also to the Respondent's disciplinary investigation.

"4.7 The Respondent provides what is styled an as Employee Assistance Programme. It has a commercial contract with a company called PPC Ltd and all employees have access to that service. It is a confidential telephone [report] service and an employee can seek assistance on any matter of concern. The Applicant chose to make use of this facility to voice his concerns.

4.8 In circumstances such as those under consideration, whilst preserving the anonymity of the informant, the above mentioned service will report the matter to the Respondent where the circumstances so require. This was done. The Director of Administration, Lucy Jones, then arranged a meeting on 7^th July 1999, at which Keith Flanagan, Director of Human Resources, Katherine Murphy, Director of Residential Services and Susan Quayle, Service Manager for the Group of Homes which included Newhutte Lane were also present.

4.9 The meeting was told that an "external agency" had provided information that illegal substances and pornographic material were being taken into the Newhutte home and that the Manager was aware of this.

4.10 The above circumstances led to there being an investigation by Susan Quayle and Keith Flanagan. They visited the home on 8^th July 1999 and interviewed all the support workers. Copies of the statements to be found in the Respondents bundle of documents (Exhibit R1, pages 19 to 27 inclusive). The substance of these statements provided the material for a report which is to be found at pages 44 and 45 of Exhibit R1.

4.11 In consequence of the above mentioned findings Mr Brown (then Manager of the home) and Mr A Powell, a member of staff, were suspended to allow investigations into the allegations which had arisen. Both subsequently ceased to be employed by the Respondents.

4.12 Mr Brown having been suspended, his place at the home was temporarily taken by Mr Bonnar, an experienced manager, well regarded by the Respondents. It was during this interregnum that concerns were voiced which ultimately led to termination of the Applicant's employment. The issues are to be found in reports from Mr Bonnar which are at pages 46, 55 and 56 of Exhibit R1. All these have been carefully considered by the Tribunal. In one report Mr Bonnar comments, "I have worked a few shifts with George Cole". That is an exaggeration. The Tribunal has examined the shift patterns for the period concerned and it is clear that, in fact, Mr Bonnar and Mr Eleady-Cole only worked together on shifts on two occasions.

4.13 Many of the recorded complaints against Mr Eleady-Cole are, we find, of a somewhat trivial nature. Certainly not certain enough to determine his probationary period without some further enquiry being made at a higher level. The main complaint related to an incident on 25^th July 1999. One of the residents (with whom it must be said, Mr Eleady-Cole had far more contact than Mr Bonnar) had what, for the purposes of this decision, we can only refer to as an "attack". We have no precision evidence before us as to the precise nature of the episode and whether, for example, it was epileptic in nature or not. The resident in question had a habit of sleeping in a chair and would then get up and throw his arms about or run down the corridor. In the past, the method followed in dealing with this, was to observe him but not to restrain him in any way and within a very short time he would settle down and sit again. Mr Bonnar disagreed with Mr Eleady-Cole on this approach and chose to make the matter the subject of a formal report. Again, the Tribunal considers, and finds, that this was a matter which needed more detailed consideration before any final conclusion leading to dismissal could be reached.

4.14 In the event, the Respondent nevertheless chose to determine the Applicant's employment. On 29^th July 1999 Mr Flanagan wrote to the Applicant in these brief terms (Exhibit R1 – page 65)

Dear Mr Eleady-Cole

Re: Unsuccessful Probationary Period

I would confirm that your employment with the service is terminated as of today's date. The reason for tour termination is that your Probationary Period has been unsatisfactory inasmuch that we have a number of concerns regarding your work performance and standards that we can not reconcile.

You will be paid 1 weeks wages as payment for your notice entitlement and your P45 will be forwarded to you in due course.

Yours sincerely

Mr T K Flanagan

Director, Human Resoucres"

We should record that in paragraph 4.7 the Employee Assistance Programme, run by the commercial company PPC Ltd under contract with the Brothers, is mis-described as a "confidential telephone report service". In fact it is common ground that that is a clerical error and it should be described as a telephone support service. We were helpfully directed to a short passage in the evidence before the Tribunal, which was not in dispute, making the nature of the EAP service clear.

11. The Tribunal then expressed their reasons and their conclusions that the case of unfair dismissal was found proved. They also expressed their reasons, on the evidence put forward by the Brothers and their witnesses to the effect that Mr Eleady-Cole's dismissal had been for other reasons than a protected disclosure, for finding that evidence untrue and rejecting it, as follows in paragraph 5 of their Extended Reasons.

Applying the relevant law to the above facts our findings are as follows. The Public Interest Disclosure Act 1998 came into being precisely for the purpose of addressing circumstances such as those which have arisen in this case. It provides specific rights for those who disclose information to a third party about an alleged wrong doing in defined circumstances. The Tribunal is satisfied that the Applicant made a protected disclosure, within the meaning of the Act. We accept that it was made in good faith, believing its substantial truth and not made for personal gain. That being so, it then has to be asked what, in fact, was the reason for his dismissal? Was it a consequence of the protected disclosure, or not. The stated reason in the letter of dismissal was "that your probationary period has been unsatisfactory in as much as that we have a number of concerns regarding your work performance and standards that we can not reconcile.". presumably, although somewhat imprecisely worded, that was a reference to matters of either conduct or capability. Be that as it may, since the Applicant's service was of such short duration it would not be possible for him to bring a normal unfair dismissal claim. Had he been able to do so, then there must have been very serious doubts as to the adequacy of the reasons advanced for his dismissal and the degree on investigation. That, however, is not, of course, our direct concern in this instance, although not without significant in the general process of determining what was the true reason for dismissal. The Applicant's earlier appraisals were good. Susan Quayle accepted, in evidence, that that was so, and, indeed, she went further than that saying "there was not only every prospect at that time that Mr Eleady-Cole would successfully pass his trial period, I thought that he may have the potential to become a Home Manager in the future". That very favourable view then suddenly changed. Why, we ask? On the face of it, it appears mainly to be the unfavourable comments put forward by Mr Bonnar. These, on due consideration are in the main insubstantial, other than the question of proper treatment of the resident who had the "attack". That was a matter, however, where there was a possibility of a difference of opinion as to the proper course of action or treatment to be taken. Why would those who had, so far, been impressed by Mr Eleady-Cole suddenly, over what was a very short period of time, completely change their views and readily come to the conclusion that he was unfit to remain. Significant, the only new factor during that time was the protected disclosure made by the Applicant, and its consequences. In making the disclosure the Applicant, on the face of it, was performing a very real service for the Respondent. Something for which, one might properly think, gratitude would seem to be the appropriate response and certainly not dismissal. There is, however, an alternative scenario which is to the effect, here is someone who, on this occasion, has done good. However, taking a longer view, and disregarding the immediate situation, a view might then emerge to the effect, here is someone who has been a "whistle blower" on this occasion is it, therefore, possible that he might act I this way again in the future and thereby prove a source of, if nothing more, irritation. Is he going to "rock the boat"? If he took such action in circumstances where, and perhaps more than once, he was shown to be right in what he did, might that be seen as something of a de-stabilising influence within the establishment? Taking all the known circumstances into account, with particular emphasis on the sudden change of view as to his abilities and qualities, the Tribunal concludes and finds, that the true reason for his dismissal was the making of the protected statement. Accordingly we find in his favour. He was unfairly dismissed."

12. The grounds argued before us on the Notice of Appeal dated 17^th May 2000 at pages 1-2 of the appeal file, were confined to paragraphs A and B of that Notice of Appeal, a third point in paragraph C having been abandoned at the outset of the hearing before us by Mr Spencer who appeared on their behalf. The firsthand major ground was that the Tribunal, in their statement of reasons, had failed to set out with sufficient clarity the reasons which led them to the conclusions which they arrived at and, that having regard to such findings of fact as they did make, it was not possible for the Appellants before us, or indeed for any reasonable person, to be satisfied as to the basis upon which the case had gone against them.
13. The second ground is that in the passages referring to the fairness, or otherwise, of the conduct of the employers and their managers, the Tribunal had wrongly, despite what they had said at one point in paragraph 5 of their Extended Reasons, directed themselves to issues of reasonableness which would have been relevant on an issue of unfair dismissal under Section 98, rather than the factual question of what had actually led to this man's dismissal.
14. Under the first head Mr Spencer argued that part of the way in which the Tribunal had misdirected themselves, or had failed adequately to record how they addressed the material issues, was a misconception relating to the nature of a protected disclosure, and a misdirection in holding that the confidential disclosure to EAP, to which they referred in paragraph 4.7, had been a relevant "protected disclosure" which was capable of leading to the conclusion they later drew.
15. He referred, in particular, to a reference in the third sentence of paragraph 5 of their Extended Reasons to persons having specific rights for those who "disclose information to a third party" in support of the submission that they had, in their reasoning, wrongly concentrated on what had been said confidentially to EAP, without recording any specific findings of fact to demonstrate how that confidential disclosure had, in fact, led the employer to impose a sanction of dismissal. There was no finding which demonstrated that any awareness on the part of the employer, before Mr Eleady-Cole's actual dismissal, that he had been the person who had initially approached the EAP.
16. For this purpose Mr Spencer invited us to consider the proper scope of the provisions of Section 43C Employment Rights Act 1996 on the persons to whom a protected disclosure for the purposes of the Act may be made. There is no dispute between the parties before us that the nature of the disclosures themselves, either to EAP or to the employers in the course of their disciplinary investigation, counted as qualifying disclosures for the purpose of Section 43B. In our judgment that is clearly right having regard to the content of what was acknowledged to have been said.
17. Mr Spencer, however, submitted that as the Tribunal focussed their attention on the disclosure to EAP, they had wrongly taken account of disclosures to such a body, these were not protected disclosures at all since, in his submission, EAP was self evidently not the employer itself, and it was not a person having "legal responsibility" for the matters which were the subject of the disclosures. Therefore there could be no question of disclosures to EAP constituting protected disclosures under Section 43C(1).
18. Additionally, in Mr Spencer's submission, disclosures to EAP viewed by themselves did not fall within protected disclosures by virtue of Section 43C(2), which extends the qualifying disclosures which may be protected disclosures for the purposes of the Act as follows

"(2)A worker who in accordance with the procedure whose use by him is authorised by his employer makes a qualifying disclosure to a person other than his employer is to be treated for the purposes of this part as making the qualifying disclosure to his employer".

Mr Spencer said that provision cannot be construed entirely literally, to make into a protected disclosure any kind of disclosure of information to a person under a procedure of any kind whatever which has been authorised by the employer. That would make a nonsense of the provision in the context of the other provisions defining what are to be protected disclosures for the purpose of the Act. Accordingly the types of procedures, authorisations and disclosures to be held within Section 43C(2) should be restricted to the kind of situation where an employer sets up a specific procedure for permitting employees to make qualifying disclosures to it or by setting up another person or body with some authority to take specific action in consequence of whatever a worker discloses to him or it.

19. On any footing it is not necessary for us, for the purposes of this case, to attempt to give an exhaustive definition of the kind of procedures of disclosures that we consider would fall within Section 43C(2). Insofar as it is necessary for us to determine the question at all in relation to the disclosure made by Mr Eleady-Cole in confidence to EAP at the beginning of July 1999, we would, for our part, hold that on the facts found by the Tribunal, which are not in dispute between the parties, that disclosure was capable of constituting a disclosure within Section 43C(2), and was capable of amounting to a protected disclosure.
20. We reach that conclusion having regard in particular to the fact that, as recorded by the Tribunal and pointed out by Miss Whyte, who appeared for Mr Eleady-Cole, there was a specific contract under which assistance was provided by the company PPC Ltd under the Employees Assistance Programme to the employees of this particular employer and all employees had access to that service.
21. Secondly we think it is significant and important that it was the accepted practice under the arrangements between the employer and PPC Ltd that in the event of a disclosure being made to PPC Ltd of the fact of criminal activities within the employer's homes or organisation, then a disclosure would be made by PPC to the employer of that fact, though subject to preserving the anonymity and confidentiality of the informant. If, for example, with a procedure in place of that nature, an employee made a confidential disclosure of the fact that criminal activity or suspected criminal activity was going on in the workplace and this was then reported by the advisory service to the employer, in confidence, and then despite the attempts to maintain confidentiality, the employer subsequently became aware which employee had been responsible for the matters coming to light and that employee was then immediately dismissed by the employer for that reason, we have little doubt that such a dismissal contrary to Section 103A.
22. So far as it is necessary for us to determine the question we, therefore accept the arguments of Miss Whyte that the disclosure to EAP was capable of constituting a protected disclosure. We are not, however, satisfied that it is right that the Employment Tribunal erred in focussing their attention on the EAP disclosure to the exclusion of the later disclosures in the course of the disciplinary investigation. Nor are we satisfied they erred materially in failing to differentiate the protected disclosures for the purposes of its decision. We say that because it was conceded by the Respondents before the Tribunal that there had been some kind of protected disclosures, and the only real issue before the Tribunal was whether such protected disclosures as there had been were the principal reason for Mr Eleady-Cole being dismissed or not. We, therefore, think that the Tribunal were justified in the approach they took of moving on for practical purposes fairly speedily to the question of causation, having recorded that they were satisfied that a protected disclosure had taken place.
23. On that second issue, despite the arguments of Miss Whyte, we have concluded that the appeal must succeed. We are satisfied that the Employment Tribunal in its statement of reasons and, in particular paragraph 5 where the reasoning for their conclusion is set out, erred in failing to give a sufficiently reasoned explanation on the basis of necessary findings of material fact to show how the factual questions relevant to the finding of improper unfair dismissal under Section 103A of the Act had been addressed.
24. We identify four reasons in particular for our decision on that. The first is that we accept Mr Spencer's argument that questions of unfairness, the lack of proper procedure in relation to the complaints against Mr Eleady-Cole and the decision to dismiss, which are questions far more appropriate to issues of reasonableness under Section 98(4) where an unfair dismissal under that section is being considered, were given undue prominence. They appear to us to have played an undue part in the Tribunal's reasoning, or at any rate there is a lack of explanation as to why those matters have been taken into account to the extent they are.
25. In particular we note that in paragraph 4.13 of the Tribunal's Extended Reasons, in referring to the recorded complaints as being of a somewhat "trivial nature", they said that they "certainly were not certain enough to determine his probationary period was without some further enquiry being made at a higher level" adding that the Tribunal considered, and found, that this was a matter which needed more detailed consideration before any final conclusion leading to dismissal could be reached. That appears to us to demonstrate that the Tribunal were not directing their attention at their point in their decision, as they should have been, to whether those complaints were in fact the reason which led to Mr Eleady-Cole's dismissal, rather than whether they would have justified a dismissal, as would have been the issue in a more normal unfair dismissal case.
26. Secondly we think Mr Spencer is justified in saying there was a failure to give an adequately reasoned explanation of why those complaints that were referred to were found to be trivial: so trivial that the Tribunal reached a conclusion that they were in effect a trumped-up set of charges, not the true basis for the dismissal at all. We note that the Tribunal failed even to specify whether they found the matters alleged in paragraph 10 of the answer was to have been established as a matter of fact, or whether they were, but the Tribunal took the view they could not have been a proper or genuine reason for dismissal at all. We think clear findings on that kind of issue were necessary in the circumstances of this case before the conclusion that the grounds put forward were untrue and not genuine was reached.
27. Thirdly we think there was a material failure to address or explain why what the Tribunal referred to as the "sudden change of view" in the appraisal as to Mr Eleady-Cole's suitability for continuation of employment, was taken as the major factor, as the relevant passages in paragraph 5 of the Tribunal's statement of Extended Reasons appear to us to make it clear it was, from which the Tribunal drew the inference that the Brothers' reasons and evidence as to the appraisal being the reason for Mr Eleady-Cole's dismissal were rejected as untrue.
28. In particular we say that because it appears to us that the Tribunal erred in failing to address at all in paragraph 5 what, it appears to us on any view, should have been taken into account as a significant "new factor" in addition to the one they referred to. That is that the old and more favourable appraisals had both been done by a Mr Brown who, although not so recorded in paragraph 5 of the Tribunal's Extended Reasons, was the person who had been implicated in the misconduct, suspended from duty in the course of the disciplinary investigation, and ceased to be in the Brothers' employment at all. The new appraisal on which the final decision on Mr Eleady-Cole was based had been made by Mr Bonner who as recorded in paragraph 4.2 was an "experienced manager, well regarded by the Respondents."
29. We think that against that evidence, which was not mentioned in paragraph 5 of the Tribunal's Extended Reasons, it was incumbent on the Tribunal to explain why the up to date appraisal by the experienced and trusted manager was rejected and regarded as insignificant, in the context of the inference they drew that the real reasons for dismissal were not what the Brothers and their witnesses had stated before the Tribunal.
30. Fourthly and finally, we think in general that the Tribunal's explanation for how they came to draw the inferences they did relied too much on surmise as to what the reasons might have been in the absence of what they considered reasonable explanations, and too little on a reasoned explanation of their own having regard to specific findings of fact that ought to have been made. In particular there was no finding, for example, on which of the employees who were parties to the actual decision to dismiss, a Ms Quayle and the Director of Resources Mr Flanagan, were being found by the Tribunal to have been guilty of improper motives and indeed of lying to the Tribunal itself in the course of their evidence. A conclusion that either or both of them had been doing so was a necessary part of the Tribunal's rejection of the explanation put forward as to why Mr Eleady-Cole had been dismissed.
31. In this context, there was force in the submissions of Mr Spencer that under Section 103A where a finding of unfair dismissal in circumstances such as those in this case necessarily involves a finding that the reasons put forward by the employer were not genuine and that evidence given before the Tribunal was untruthful, it is incumbent on the Tribunal to base its conclusions on clear findings as to the primary facts about which of the persons before it were responsible for what happened, and to explain clearly how those findings lead causally to the conclusion that the protected disclosure had been the true reason for the employee's dismissal.
32. Again, having looked at the Tribunal's stated reasons in paragraph 5 as a whole, we have not been satisfied that they meet the well established requirement in such cases as Meek v City of Birmingham District Council [1987] IRLR 230 that as a minimum a Tribunal's explanation of reasons must give the parties a sufficient basis to understand why the case has gone against them and why the material issues of fact have been decided against them in the way they have been.
33. For those reasons we allow this appeal. We unanimously set aside the decision of the Tribunal, and the consequence is that we remit the case to a freshly constituted Tribunal for rehearing and redetermination of all the issues of causation and protected disclosure on which this case it appears to us to depend.