United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR C CIUMEI (of Counsel) Instructed by: Messrs Doyle Clayton Solicitors London EC3R 7HS
For the Respondent	MR R HARPER (of Counsel) Instructed by: Messrs Burroughs Day Solicitors 14-16 Charlotte Street Clifton Bristol BS1 5PT


 


JUDGE PETER CLARK

1. This is an appeal by Mr Lee against a Decision of the Bristol Employment Tribunal, chaired by Mr C F Sara, following an eight day hearing in January 2001, dismissing his complaint of unfair dismissal brought against his former employer, Bristol City Council ("the Council"). That Decision, with Extended Reasons, was promulgated on 24 February 2001.
2. The Appellant had a long career in local government, the last six years of which were spent as the Respondent's Divisional Director of Contract Services. He was summarily dismissed on 10 May 2000. The set of facts amounting to the Council's reason for dismissal, relating to the Appellant's conduct, found by the dismissing officer, Mr Mitchelson were that the Appellant had used a piece of equipment, a dumpy level, hired by the Council for his own private use, together with complaints about arrangements which he had made over his own wedding which involved Council staff and facilities. In short the Tribunal found that Mr Mitchelson was entitled to conclude that the Appellant was guilty of gross misconduct, albeit that conduct fell short of fraud and dishonesty. Dismissal was a reasonable response. There was no procedural unfairness. The dismissal, overall, was fair. This appeal challenges the finding by the Tribunal that the dismissal was procedurally fair in two respects.

Breach of the contractual disciplinary procedure

3. The Tribunal found that the Appellant was a second tier officer. The contractual disciplinary procedure applicable to the Appellant prior to June 1999 (the old procedure) provided for a preliminary investigation to be carried out by the Chief Executive and then, if the matter was to proceed, an Investigating Committee of Councillors was to investigate the matter and reach a decision (Reasons, paragraph 6).
4. On 1 June 1999 the Council sought to implement a new disciplinary procedure (the new procedure) which removed the requirement for investigation by either the Chief Executive or the Investigating Committee of Councillors. Investigation was to be by managers designated by their chief officers to operate the procedure. Thereafter a disciplinary hearing was to take place before a manager. In the event of disciplinary action being taken, the employee had a right of appeal to the Corporate Services Sub-Committee. Such appeals, before Councillors were not re-hearings of the disciplinary hearing but a review of the Decision (new procedure, paragraph 9.3).
5. The Tribunal found that a copy of the new procedure was not sent to the Appellant in June 1999 and the Council had no right to impose it (Reasons, paragraph 39). He first received a copy of the new procedure under cover of a letter dated 6 December 1999 in the following circumstances.
6. The Appellant was first suspended from duty in February 1999. At that time he was arrested by the police, who, following investigation, informed him on 23 March 1999 that no criminal charges would be brought against him.
7. On 15 July 1999 an investigative meeting was conducted by Stephen Wray (Director of Leisure Services) and Stewart Clark (Divisional Director of Planning Transport & Development). They then prepared a report (the Wray report) which suggested:

(1) that the matter of the dumpy level gave rise to breaches of the Code of Conduct, not sufficient to warrant a charge of gross misconduct;

(2) concerning the wedding catering, there was no case to answer;

(3) in the matter of the printing and stationery for that wedding, this was worthy of further investigation.

The Council consciously decided not to disclose a copy of that report to the Appellant (Reasons paragraph 17).

8. The Wray report was made available to the Appellant's Chief Officer, Mr Wagstaff, who had originally been appointed, together with a Mr Powell, to carry out the investigation. That appointment was challenged by the Appellant's solicitor on the basis that both men were relevant witnesses to the Appellant's wedding arrangements.
9. Messrs Wagstaff and Powell did not accept the views expressed in the Wray report. On 16 August Mr Wagstaff wrote a memorandum indicating that he believed that "a successful outcome was still achievable" and suggesting that Counsel's advice be taken and that it might be in the Council's best interests to consider a Compromise Agreement with the Appellant.
10. On 30 September Mr Wray was formally appointed Investigating Officer. Mr Wagstaff then prepared his own analysis of the case dated 11 November. Having read that analysis Mr Wray changed his views, expressed in his July report and recommended disciplinary proceedings to be taken against the Appellant by letter dated 19 November.
11. Mr Mitchelson, then acting Chief Officer with experience of disciplinary proceedings, was appointed disciplinary officer in accordance with the new procedure. He was provided with a pack of documents which excluded the July Wray report and the Wagstaff analysis, neither of which was disclosed to the Appellant.
12. On 6 December 1999 the Council wrote to the Appellant's solicitors, Kelcey & Hall, informing them that a disciplinary hearing chaired by Mr Mitchelson was being arranged. The letter, from Mr Stephen McNamara, a Divisional Director, continued:

"I confirm on behalf of Mr Wray that the findings set out in his letter of 19 November constitute his own findings and that there has been no third party influence".

Pausing there, we repeat that neither the July Wray report, nor the Wagstaff analysis, were disclosed to the Appellant or provided to Mr Mitchelson.

That letter concluded:

"I enclose a copy of the Council's procedure [the new procedure] and confirm that when the disciplinary hearing in this matter has been arranged, a statement of case, together with accompanying evidence will be served upon you, in preparation for that hearing".

13. Estoppel

Before the Tribunal Mr Ciumei, on behalf of the Appellant, took the point that the new procedure was unilaterally imposed. He was entitled to have the contractual benefit of the old procedure. At paragraph 42 of their Reasons the Tribunal found that under the old procedure the Appellant was entitled to a hearing by councillors and failure to provide such a hearing (at the investigative stage) would be a fundamental defect which might well have affected the result. They refer to the Court of Appeal decision in Westminister City Council -v- Cabaj [1996] IRLR 399.

14. However, they found that the Appellant was estopped from relying on the old procedure. It is that finding which is the subject of challenge under this first ground of appeal.
15. The Tribunal deal with estoppel at paragraphs 39 - 41 of their Reasons. We should first set out the facts found by the Tribunal at paragraph 39:

"39 The appointment of Mr Mitchelson. This has proved a very difficult matter for us, especially as the contractual issue was raised at a very late stage of the proceedings. The respondents (63) implemented a new disciplinary procedure on 1 June 1999. The previous disciplinary procedure had been a Collective Agreement as it makes clear in the first paragraph. The new one was not. There is no evidence that the applicant was sent this new procedure in June 1999 when it was implemented and the respondents had no right to impose it. On 6 December the applicant was sent "a copy of the Council's disciplinary procedure". The procedure before us is clearly dated and states when it was adopted. The applicant throughout has been legally represented. On 27 December (1004) Mr Mitchelson stated:

"Please note that the hearing will be held in accordance with the provisions of the City Council's disciplinary procedure, a copy of which you have already been given."

We have already referred to the applicant's solicitors' letter of 21 January which objects to Mr Mitchelson, but does not indicate that any objection is taken to the disciplinary procedure sent to them. Then at page 1024 the last paragraph of the applicant's solicitors' letter of 10 February:

"We are therefore driven to the conclusion that our client's position is such that he cannot now have a fair hearing in any disciplinary format in the light of the way the City Council have conducted themselves and given the background that has developed in this case, it would seem appropriate that our client should now be allowed to return to work forthwith. Our client has been denied the opportunity of having a fair hearing given the factors referred to above."

So there is a challenge to any procedure the Council might then adopt. Thereafter, no issue was raised about the disciplinary procedures and the use by the respondents, both at the disciplinary hearing and the appeal, of their new procedures."

16. Findings of fact are for the Employment Tribunal and not for us. However, where a material finding of fact is shown to be unsupported by evidence, or we would add contrary to the undisputed evidence, that will amount to an error of law. Piggott Bros Ltd -v- Jackson [1992] ICR 85, 92D per Lord Donaldson of Lymington, MR.
17. We have been taken to the relevant correspondent and the Council's notes of the disciplinary hearings held by Mr Mitchelson which were held before the Tribunal. We have earlier referred to Mr McNamara's letter of 6 December 1999, enclosing a copy of the new procedure. In the Appellant's solicitors' letter of 21 January 2000 they say:

"May we also make the point that we do not consider Mr Mitchelson is the appropriate person to deal with the disciplinary hearing in this matter. Our client was appointed by the members and as such it seems to us that the issue of discipline and gross misconduct should be considered by members and not by an Acting Director."

18. The Tribunal found that after 10 February 2000 no issue was raised about the disciplinary procedure and the use by the Council, both at the disciplinary hearing and the appeal, of their new procedures. The evidence before the Tribunal included the following:

On 21 March 2000 the Appellant's solicitors wrote:

"We now turn to the question of Mr Mitchelson himself. Will you please explain by reference to documentary evidence how he is properly appointed under the delegated powers. Please explain the powers and provide the appropriate references. You will appreciate because of the district auditors powers in relation to actions carried out ultra vires that it is important that Mr Mitchelson has the proper delegated powers and the appropriate authority to conduct this hearing. To date we have seen nothing, that convinces us that this is the position."

The Council replied by fax the same day:

"In response to the further points made in your fax of 21 March, you are aware of the position I am taking as the Presenting Officer, in respect of Mr Mitchelson continuing to hear your client's case. This has been set out in previous correspondence. No doubt you will make representations to Mr Mitchelson on this point."

On 22 March 2000 the Appellants' solicitor wrote:

"Can I now turn to the issue of Mr Mitchelson's powers to deal with matters because of obviously from our point of view our concern is that were he to be acting ultra vires then any surcharge imposed by the District Auditor would fall upon him personally. Under the old code adopted by the City Council that excluded grade one and 2 Officers from being disciplined by other Officers and they were to be disciplined by Members only. Under the new code imposed in June 1999 it is silent on grade 2 Officers but they are JNC appointments the same as Chief Officers and again we respectfully submit members only should be conducting the discipline hearing."

19. The first day of the hearing was 29 March 2000. On that day the hearing was adjourned due to the Appellant's imminent admission to hospital. Before the proceedings were adjourned his solicitor, Mr Kelcey, objected to Mr Mitchelson hearing the matter. That objection was overruled. The new procedure was to apply. The Appellant was not entitled to a disciplinary hearing before Councillors.
20. On 3 April Mr Mitchelson wrote to Mr Kelcey, confirming that the hearing would resume on 25 April. He asserted that as acting Director of Housing Services he had delegated authority to determine the matter on behalf of the Council. Finally, he said this:

"In conclusion, I would confirm that the City Council will proceed on the above basis, and that there will be no further consideration of procedural/legal issues when the hearing is reconvened."

21. Mr Kelcey responded by letter to Mr Mitchelson dated 17 April 2000. He informed him that at the reconvened hearing the Appellant would be represented by senior Counsel, Mr John Ryder and added:

"With the greatest of respect it is not appropriate to say that there should be no further consideration of procedural/legal issues when the hearing is reconvened. Clearly if Mr Ryder has matters to raise then he cannot be stopped from raising them on the reconvened hearing."

22. By an undated letter in response Mr Mitchelson made clear that Mr Ryder should not go over again ground which has already been covered.
23. The question of Mr Mitchelson's power to hear the matter was not pursued at the resumed disciplinary hearing nor at a subsequent appeal heard by Councillors.
24. It is accepted by Mr Harper, on behalf of the Council, that there was no mutual variation of the contract of employment, substituting the new procedure for the old. He relies upon the Tribunal's finding that the Appellant was estopped from relying on the old procedure. That finding is expressed at paragraphs 40 - 41 of their Reasons.
25. At paragraph 40 the Tribunal cite a passage from the judgment of Judge Hicks QC on behalf of the EAT in Aparu -v- Iceland Frozen Foods PLC (No 1) [1996] IRLR 119, paragraph 14, itself an extract from the judgment of Browne-Wilkinson P in Jones -v- Associated Tunnelling Co Ltd [1981] IRLR 477, paragraph 21.
26. Jones raised the question as to whether an employee, issued with a statutory statement of terms and conditions of employment and then continuing to work without objection, impliedly agreed to a variation recorded in the statement or was estopped from denying the variation. The President expressed the opinion, obiter, that the EAT would not be inclined to imply assent to a variation from the mere failure by the employee to object to the unilateral alteration by the employer of the contractual terms of employment contained in the statutory statement, particular where the variation related to a matter which had no immediate practical application.
27. The Tribunal's conclusion on this issue is expressed at paragraph 41 of their Reasons thus:

"41 There are significant differences between that case [Jones] and the present.

(1) Crucially the applicant was represented by solicitors and Leading Counsel.

(2) The procedures had a direct and immediate effect on the applicant in that it was known that he was subject to disciplinary procedures and likely to be put before a disciplinary hearing.

(3) The applicant's solicitors and Counsel at the disciplinary hearing and solicitors at the appeal objected on many grounds to the panel, including the general objection which we have read, to the entire procedure, but at no point did they challenge the application of the June 1999 Procedure. There followed a long disciplinary hearing and a long appeal.

In our view this gives rise to an estoppel which prevents the applicant now from alleging that there was contractual right to the original terms and estops him from alleging that there has been no variation in the disciplinary procedures."

What is meant by estoppel in this context?

28. Mr Ciumei had taken us to the textbook definition contained in Chitty on Contracts (28^th  Ed), paragraph 3-081. For the equitable doctrine of estoppel to operate there must be a legal relationship giving rise to rights and duties between the parties; a promise or a representation by one party that he will not enforce against the other his strict legal rights arising out of the relationship; an intention on the part of the former party that the latter will rely on the representation; and such reliance by the latter party.
29. In the present case the necessary legal relationship existed between the parties by virtue of the contract of employment. Did the Appellant promise or represent that he would not enforce his strict legal rights against the Council in the form of the old procedure, it being common ground that he did not agree to the new procedure, intending the Council to rely on that representation?
30. The representation need not be express, but it must be clear and unequivocal. Failure to object to a known defect within a reasonable time of its discovery may be regarded as an unequivocal indication of the injured party's intention not to insist on his legal rights.
31. Further, the representation must in some way have influenced the conduct of, here the Council, to whom it was made. It need not form the sole inducement, but it must be some inducement.
32. We return to the Tribunal's approach. It is simply not correct to say on the undisputed evidence, as do the Tribunal at paragraph 41(3) of their Reasons, that at no point did the Appellant's advisers challenge the application of the June 1999 procedure. They challenged Mr Mitchelson's appointment under that procedure by their letters dated 21 January, and 21 and 22 March 2000. The point was raised again by Mr Kelcey at the first day of hearing on 29 March. Although those challenges were not directed specifically at the procedure as a matter of contract, the letter dated 22 March refers to the new code "imposed" in June 1999, and it is absolutely clear that, unlike the proposition considered in Jones, the Appellant was not silent on the matter. He protested. In these circumstances we conclude that the Tribunal erred in law insofar as it implicitly found that the Appellant made a clear and unequivocal representation to the Council that he would not seek to rely on his contractual right to the old procedure.
33. Further, there was no evidence before the Tribunal that the Council had acted in reliance on any representation made by the Appellant. It was made absolutely clear in correspondence by Mr Mitchelson that the new procedure would apply, notwithstanding objection to his conducting the disciplinary hearing by the Appellant's solicitors.
34. Yet further, the fact that the Appellant was represented by solicitors and leading Counsel does not advance the estoppel argument in circumstances where Mr Mitchelson made it equally clear that, having already dealt with the procedural objection, it was not to be raised again at the adjourned disciplinary hearing. His ruling was final.
35. In these circumstances we conclude that the Tribunal fell into error in finding that the Appellant was estopped from relying on the old procedure. Having fallen into error it is apparent, from the finding at paragraph 42 of their Reasons, that the Decision cannot stand. Bearing in mind the Court of Appeal's approach in Cabaj, disapproving the EAT's decision in that case on disposal, we shall allow the appeal on this ground and remit the case for re-hearing before a different Employment Tribunal.

Procedural unfairness

36. In these circumstances, as Mr Ciumei accepted, his second point relating to the Council's non-disclosure of the Wray report and the Wagstaff analysis is rendered academic. We prefer to say no more about that point. It will fall to be considered by the next Employment Tribunal at the remitted hearing.