United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	Mr P Grant-Hutchison, Advocate, Instructed by- Messrs Eversheds Solicitors Senator House 58 Queen Victoria Street LONDON EC4Y 4JL
For the Respondent	Mr B A Murphy, Solicitor Of- Messrs A C White Solicitors 23 Wellington Square AYR KA7 1HG


 


THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1. This is an appeal against the decision of the Employment Tribunal sitting in Glasgow on 2 and 3 December 2002. The hearing had commenced before the Tribunal of a claim brought by Mr Telford, against his erstwhile employers, Sir Robert McAlpine Ltd, the respondents (and the appellants before us). He had been employed as a quantity surveyor by the respondents, which carry on the business of civil engineers, and his claim arose out of his resignation in early 2000. His case was twofold, the resignation, amounting in his case, on either basis, to constructive dismissal. His claim was that he had been constructively unfairly dismissed by, in particular, the refusal of promotion towards the end of 1999 and other unfavourable steps allegedly taken towards him by the employer. His primary case was that this was, what one might call, an "ordinary" unfair constructive dismissal. Further, or in the alternative, he alleged that his constructive dismissal resulted from detriment which he suffered by reason of his having "whistle-blown", that is, made a protected disclosure in or about November 1997, within the meaning of the Employment Rights Act 1996 ("the 1996 Act"), sections 43A and 103A.
2. As we have indicated, the hearing had already commenced. In circumstances which, because this case has been going on for some time, is not fully in the recollection, even of those able advocates who appear before us today, (Mr Murphy, solicitor on behalf of the applicant and Mr Grant-Hutchison, advocate, on behalf of the appellants/respondents), the original intention to have an exchange of witness statements had been overtaken by agreement between the parties, and so the applicant was giving evidence in chief without a prior witness statement having been served. There had however been production of documents. He had reached a certain stage in his evidence, to which we will refer, when there was an anticipatory objection by Mr Grant-Hutchison, in relation to the contents of the evidence he was to give, and there was an adjournment overnight, argument before the Tribunal and when the objection was, as it was, repelled by the Tribunal, the case was stood out to allow the appeal which has now taken place before us.
3. This is therefore an interlocutory appeal against the repelling of that objection. The objection is summarised by the Chairman in his order, namely, that it was an objection by Mr Grant-Hutchison to the line of questioning by Mr Murphy, that is questioning in chief of his own client, the applicant, which line was designed to elicit from the applicant evidence tending to suggest that the respondents had committed alleged fraud in autumn 1998 and early 1999.
4. The basis of the objection was that the allegations of fraud which would have, in any event, been denied by the respondents, but were, of course to be given, had they been given, in open court, were not relevant to the issues to be tried in the Tribunal. The Tribunal is of course not an ordinary court where there is a wider discretion as to the admissibility of evidence being given, in which questions of prejudice to the parties are often weighed against the probative nature of the evidence. Mr Grant-Hutchison accepts that the test before a Tribunal is whether the evidence is relevant and, if it is relevant, then it must be admitted. Of course, Tribunals are far more informal than the Courts, and there is greater flexibility about the admission, for example, of hearsay evidence; but the following factors must plainly be borne in mind, quite apart from the fact that the evidence, if given, is to be given in public, there being no apparent availability of a restricted reporting order in this kind of case.

(i) Where there is an allegation of fraud or criminal conduct, it must, in due course, be proved, albeit on a civil basis, to a higher standard, and certainly must be fully particularised.

(ii) In that kind of area, there is, of course, always in an appropriate case, the question arising of privilege against self-incrimination, and any party must be given an adequate opportunity to consider that aspect.

(iii) Tribunals are, or, at any rate, may be subject, not only to the ordinary principles of fair play which are well known to the civil courts in the United Kingdom, but also to Article 6 considerations.

(iv) Finally there is a point which has arisen particularly acutely in this case in the course of submissions before us. There is the obligation owed to the court as well as to the parties by advocates in the Courts and Tribunals, be they barristers, advocates or solicitors, as a result of their professional codes of practice. This involves considerations of propriety in relation to the asking of questions. If an allegation is to be made of fraudulent conduct, for example, in cross-examination, then clearly an advocate would not dream of putting a derogatory question without some kind of evidential basis in his possession for doing so. If there is no such basis, other than reasonable suspicion, then it can be done by way of a straightforward question which does not expect the answer "yes" or "no", and which certainly does not involve, in the framing of it, any allegation which makes it look as though the advocate asking the question has any information to support it. Thus, "Did you do so and so?" would be likely to be acceptable, rather than, "I suggest you did so and so", unless the advocate has information available which suggests the witness did do it. If the advocate has that evidence available, then in most cases that is evidence which ought already to have been disclosed but which, in any event, ought to be adduced before the Court at some stage so that it can be set against the answers to the question put, and itself tested. This is the more important where the hearsay is strictly not inadmissible as in Tribunals such as the Employment Tribunals, and, thus, there is no basis of avoiding the advocate's obligation only to ask questions in that form by procuring a witness, with a similar absence of support, to give hearsay evidence – except, of course, where the question in issue is as to the belief of the witness, reasonable or otherwise.

5. Against this background we turn to the questions in this case. So far as whistle-blowing is concerned, the whole basis is helpfully made clear, if it needed making clear, by the recent decision of the Employment Appeal Tribunal in Darnton v University of Surrey [2003] IRLR 133, that an employee claiming benefit of the law relating to protected disclosure does not need to show that the conduct about which he or she complained to his employer, which is said to have led to the subsequent detriment, was true. He or she simply has to show that he or she reasonably believed it to be true and so, in those circumstances, plainly, in this case, for example, it is open to the applicant, when alleging that he made the disclosure, to say "I believe that the employer had been guilty of fraud" and, of course, it may turn out that he was wrong so to believe but, provided he believed it on reasonable grounds, he will be protected. In those circumstances, any matters in this case which relate to the belief he had in November 1997 will be admissible, even if it amounts to an assertion through the mouth of the applicant of what turns out to be an unfounded allegation of fraud.
6. We turn then to the line of questioning on which it appears that Mr Murphy was about to launch, in chief, with the applicant. Although there had been no witness statements served, there had been a document produced on behalf of the applicant, called, "Chronological List of Significant Events" which had given some limited notice of the kind of areas which were going to be covered in one way or another, at any rate, in the hearing, not necessarily of course by the applicant in chief. There are also pleadings and, including, as a result of the helpful orders of the Employment Tribunal, responses by both sides to certain questions.
7. It was apparent not only that the applicant was going to say that the detriment he suffered by way of refusal of promotion in 1999/2000, could be ascribed, in part at any rate, to his complaint made in November 1997, but that he also alleged in his pleading that the apparent lack of appreciation by the respondents that his handling of certain contracts had been profitable, could be explained, by what he described as a deliberately false method of inter-company accounting, as between different associate companies and or contracts within the group which, had it not been operated, would have left the contracts for which he was responsible as profitable, rather than as simply breaking even.
8. The assertion that was apparently going to be made by the applicant, would have been, it appears, largely, if not wholly hearsay. That is certainly the way in which the matter was addressed to us on both sides for the bulk of the submissions that were made to us this morning, although towards the close of Mr Murphy's submission a further factor arose to which we will make reference. The basis of the contracts entered into by sub-contractors on the Scottish Football Stadium contract, which is the subject matter of the dispute in this case, was, it seems, at any rate, until the end of 1997, a fixed price one. The applicant alleges that there was a corrupt system, whereby favours were received from sub-contractors, by way of discounts passing to and between the respondents company and their sub-contractors. We hasten to say that allegation is denied and, clearly, it is a matter about which there will need to be a decision in due course by the Employment Tribunal. The applicant alleges that he complained about that system in November 1997.
9. Left as simply as that, the issues before the Tribunal would be as follows:-

(i) Did the applicant make a complaint in November 1997? That itself appears to be in issue between the parties.

(ii) If he made that complaint, did he make a complaint about this alleged practice?

(iii) If he made that complaint about that alleged practice, did he reasonably believe that it was happening?

(iv) Always of assistance in order to decide the question of reasonable belief, would be included the question as to whether, in fact, it was happening; because, if it was happening, then that would assist the Tribunal in deciding that his belief that it was happening was a reasonable one, although it would not of itself be determinative of that aspect, one way or the other.

(v) The question as to whether there was a detriment, and whether that detriment, insofar as the question of constructive dismissal then arises, led to constructive dismissal or not.

(vi) Whether, if that whistle-blowing occasion occurred in November 1997, it had any causal connection with the alleged detriments, really quite some time later in November 1999. Plainly this is a situation in which the respondents would be able to say, with some force, that if there was any matter that occurred in 1997, the applicant would be likely to fail to show that the detriment, if there was detriment, in November 1999, was by reason of what he had said, if he did say it, two years earlier.

10. The way in which Mr Murphy put the matter before us in the earlier part of his submissions was this: that at some stage subsequent to 1997, the system, the basis upon which the sub-contractors in general were remunerated in respect of the football stadium, had changed from fixed price to time and materials: and that he had no instructions or evidence from his client, the applicant, to show that there was any continuing fraud after November 1997, albeit, that his client believed that there would have been, and that that fraud, if it did occur, would have been, of necessity, of a slightly different kind to the kind which occurred in relation to discounts when the subcontractors were working on a fixed term basis. But, nevertheless, that was what his client was going to go on to deal with, in examination in chief, by way, as he accepted, of hearsay evidence.
11. The argument before the Employment Tribunal appears to have ranged on a somewhat different basis from the course which it took before us. That is, of course, very often the case, when an appellate tribunal has the benefit of seeing the argument run below, but the parties themselves have been able to reconsider their position over a longer period of time and, in any event, there has been passage of time.
12. Reading the decision of the Employment Tribunal, there were, it seems, two grounds for the Employment Tribunal repelling the objection, and at the end of its decision, a third was added, as a result of a submission by Mr Murphy, on the applicant's behalf, which the Tribunal was prepared to incorporate into its judgment.
13. The first ground was very generalised and did not include consideration, such as we will turn to in a moment, about the admissibility of evidence, and, indeed, in any event, the question as to whether there was understanding of the precise nature of what evidence there was to be. In general terms, the Tribunal concluded that, once it was raised that there had been a continuing fraud after the end of 1997, it was open to the Tribunal to hear that evidence and, indeed, they would have to decide whether there had been such fraudulent acting by the respondents.
14. The second ground referred to by the Tribunal was that there appeared to be, according to what the Tribunal understood, what it called an alternative case. In the Decision, which we have, in the absence of paragraph numbering, numbered ourselves, in paragraph 10, the Tribunal said this:-

"It is clear that the applicant has an alternative case that the respondents acted fraudulently, that their fraud constituted a fundamental breach of contract, and that he left in consequence of that fraud."

15. That appears to be a statement by the Tribunal that there was what might be called some kind of a BCCI case put forward here; namely that the respondent company could in some way be said to be riddled with corruption, and, thus, in breach of an implied term of the contract as to mutual trust and confidence which was fundamentally breached, and so enabling the applicant, who would otherwise have been tarred with an evil reputation, to accept such repudiation. If that was the case, the Tribunal concluded, then, any and all frauds alleged would need to be adjudicated. It is noteworthy that that appears to have been put as the first basis on which the Tribunal repelled the objection, because they continue:-

"We add that, even if the applicant's case were restricted to one brought in terms of Section 103A, we would still have found against the respondents on this issue."

As will be apparent in a moment, Mr Murphy accepts that there is no BCCI case presently pleaded, and, in those circumstances we would, in any event, have doubted that it was appropriate for the Tribunal to rest its case on the existence of such an alleged case, quite apart from any consideration of any strength that it might have.

16. The third ground on which the Tribunal decided was that which was added at the instance of Mr Murphy, and the paragraph that we have now numbered 13 reads as follows:-

"Additionally, as part of his "ordinary" constructive dismissal case the applicant suggests he was subjected to detriment i.e. the denial of promotion which he says he might otherwise have reasonably achieved. In this regard it is his claim that his work record was deliberately falsified to reflect badly on him."

17. It is on those three grounds that the Tribunal reached its decision.
18. A number of general matters have been raised, with which we should deal before considering our conclusions.
19. First, it is apparent that this was an important discretionary decision by the Employment Tribunal seised of this case, and in the course of a hearing, albeit that it recognised its importance by adjourning the hearing in order for its order to be appealed. Clearly, we would not lightly interfere with a conclusion of the Tribunal in that regard.
20. Secondly, a fundamental objection by Mr Grant-Hutchison, on behalf of the respondents, was that there was, in particular, a breach of Article 6 and of fair play, by virtue of the evidence being sought to be given without adequate notice. To an extent, that objection still remains, by virtue of the case, to which we will refer later, as to whether there was or, indeed, still now is, any particularity of the case intended to be put, or how it is to be rendered admissible. But, insofar as this fundamental case was also accompanied by a complaint that there was inadequate opportunity for his client to be prepared to meet what would be serious allegations, in order to be able to rebut them adequately, that, at least, has been resolved, as Mr Grant-Hutchison has accepted, by the very passage of time resulting from the allowance by the Tribunal of an adjournment for the purposes of this appeal, and then by this very appeal itself and the fact that the hearing will now need to be rescheduled in order to restart.
21. But thirdly, questions must arise in relation to case management. There is, says Mr Grant-Hutchison, a real risk that this case will helter-skelter out of control if there is not some consideration of what issues are, and are not, relevant, how they are to be addressed, both by way of particularity and admissibility, and what notice is to be given to each side of what issues are to be tried. This is an important case from the point of view of the applicant, who has lost an important job, and may be entitled to substantial compensation and has acted, as he would allege, in accordance with his conscience and his professional obligations. It is equally important from the respondents' point of view, who are here standing accused in public forum of allegations of fraud and criminal conduct, are at risk of paying substantial compensation and, have, what is otherwise, a well arguable case that there can be no causative connection between an alleged whistle-blowing in 1997 and a resignation in early 2000, or, at any rate, considerable explanation to be given as to how it comes about that the applicant stayed in post for so long in those circumstances.
22. We can deal quite shortly with, what might be called the second and third grounds, to which we have referred. As to the second ground, there is, as Mr Murphy has accepted, no BCCI case presently pleaded. If it were sought to be pleaded, it seems to us, on the evidence that we have seen as being admissible, that it would be a hard task, at any rate on the present case, for the applicant to plead, never mind to establish. It would require, as we have earlier indicated, proof that the respondents company was riddled with corruption, and that the applicant's reputation was or would be tarnished as a result of continued connection with the company. It would sit ill with his having remained with the company from November 1997 until his resignation in 2000, without apparent further complaint after November 1997, and it would require a different, or at any rate, a supplementary explanation to that which is now given. In any event, as we have indicated, it does not appear anywhere in the papers as having been made or formulated. If it were so formulated, and an amendment could be permitted at this late stage, within the discretion of the Employment Tribunal and on Selkent or other principles, then, at that stage, some justification of the admissibility of this evidence could be put forward on the basis of the amended case. But it appears to us, that the decision of the Employment Tribunal was flawed by putting, as its foremost ground, the reference to this case which was, in fact, not before them.
23. The third ground was not, in any event, it seems to us, the basis on which the Tribunal reached its decision because it was added at the request of the applicant's solicitors and incorporated by them. But, in any event, it has not been in the forefront of the arguments before us today. Mr Grant-Hutchison has taken us to the way in which that case is pleaded in the originating application. In essence, it is part of the case for the appellant that his promotion was detrimentally dealt with because of the inadequate and inaccurate way in which inter-company accounting was operated. In the course of describing that form of accounting, he does say: "my work record was deliberately falsified to reflect badly on me" and, he describes the transferring across between associated companies, as being done by means of false or dummy charges issued by one contract against another. But that is a limited issue and one which will be explored, in any event, in detail, on the question of what the profit of the company really was. We are told by Mr Grant-Hutchison that there will be no issue that there was this kind of inter-company practice and it does not need the addition of the epithets in order to see whether the result was that the applicant was done down in relation to the assessment of the contracts with regard to which he was involved, so far as concerns his consideration for promotion. But that, it seems to us, would not render per se relevant suggestions that, as between the respondents and customers, there was some kind of deliberate fraud by the allowing of unmerited side payments, sums to be paid in return for favours to sub-contractors.
24. We return then to the main case on which the evidence is sought to be justified by Mr Murphy, and which was the alternative ground on which the Employment Tribunal reached its decision. Two bases have been put forward. The first appears to us as a matter of principle to be arguable. As we have indicated, on the face of it, the respondents here has a good case to put forward that the applicant would have some difficulty in establishing his burden of proof in relation to causation between a 1997 whistle-blowing and a 2000 resignation. If the position were that the respondents had allegedly been involved in some fraud, but, or at any rate, was whether it was guilty or not, reasonably believed to have been involved in some fraud, but that any such fraud ended, and or such belief ended, in 1997, the establishment of that causation would be the more difficult. The case that was put forward by Mr Murphy until the latter end of his submission, was that the appellant had no reason to believe that any fraud continued or any similar fraud continued, albeit, that he would expect that it might have done and, if it had done, it would have to have taken a slightly different form. However if, in fact, albeit unknown to the applicant, the fraud continued, then that might form the basis of an argument and, certainly of cross-examination, that the respondents continued at fear of discovery, because it continued to carry on allegedly fraudulent conduct, such that, albeit belatedly, the applicant was a target for the taking of detrimental steps and the refusing of promotion.
25. The other way in which it was sought to be put by Mr Murphy, appears to us to be less persuasive. He submits that in testing the reasonable belief of the applicant in November 1997, not only is the court enabled to look at what is strictly not probative, namely whether in fact that conduct was taking place, in order to assess the reasonableness of the belief (just as if it can be shown that it was not taking place it would be suggested that such belief was not reasonable) but in addition the Tribunal ought to be able to use, as a tool, the question as to whether somewhat different fraudulent conduct subsequently took place, in order to support the existence of a reasonable belief in November 1997. We do not consider that that is arguable.
26. However, we are persuaded that, in principle, there is arguability in relation to the first way in which Mr Murphy put his case. To that then falls to be added the development of the submission to which we have been referred by Mr Murphy orally, which plainly was not before the Employment Tribunal when the matter was argued, and, indeed, as we have indicated, only really became developed by Mr Murphy on his feet. He took us to the chronology document, to which we have referred, and he referred to events recited in October 2000 and a letter sent by a sub-contractor. His own belief, apparently uninstructed at that stage by his client, was that his client, the applicant, did not know about the letter at the time, or, at any rate, may not have known about the letter at the time. But by dint of instruction which he obtained from the applicant, who was sitting with him in court, it became clear that, in fact, the applicant's case is that he did know about that letter at the time and had some involvement in relation to it. If that is right, then it becomes relevant of itself, and renders the argument, to which we have been referring, even more sustainable. That would show, not only that some kind of fraudulent activity was, at any rate, possibly occurring in late October 2000, and/or, that if it was not so occurring, a sub-contractor hoped that it would so occur and/or may have been asserting that it had previously so occurred, but that he himself knew about it. He would if so then be able to give, orally, something that was not hearsay evidence, and, possibly, it may be indicative or supportive of a case on causation, as a link between detriment and the fraud in question, if it were the fact that he raised further matters in October 2000, only shortly before his refusal of promotion. That is a case which has nowhere been pleaded and, except in the inference to be drawn from this document, does not otherwise appear and has not been previously relied upon in relation to this very argument, either in the Employment Tribunal or until belatedly in the course of Mr Murphy's submissions before us.
27. The very fact of the belated nature of what may or may not turn out to be a good arguable point for the applicant, further emphasises the conclusions to which we had already come. And they are these. We are satisfied, as we have indicated, that in principle, exploration of the possible continuation in a different form of similar fraudulent activity, as is alleged to have occurred prior to November 1997, by the respondents, could be probative, at least in relation to the issue of causation between the alleged whistle-blowing and the alleged detriment.
28. But it must be clear, that before allegations of that seriousness are permitted, there must be: (i) proper notice; (ii) proper foundation by way of the matters to which we have referred earlier, including, of course, the propriety of asking any questions or of admitting any hearsay evidence. This is the more emphasised by the fact that, if we have understood the position rightly, and if Mr Murphy is now properly instructed, a case has now belatedly emerged which was not apparent, even to him, and certainly not to the respondents, until then, which may itself be admissible and supportive of the applicant's case. We conclude that the very new evidence that has possibly thus arisen, or at any rate, new allegations, justify us in interfering with the discretion of the Employment Tribunal, to the extent of concluding that the objection was well founded, not necessarily as a matter of principle, but, certainly, on the basis that such questioning should not have proceeded without further appreciation of its legal, jurisprudential and evidential basis.
29. We conclude as follows:-

(i) Unless it becomes apparent that there is evidence which this applicant can directly himself give – and there may now be as a result of the reference to October 2000 – he should not deal with these matters in chief.

(ii) For the purpose of identifying whether there is any such evidence that he can give, a witness statement should be served by the applicant in which this can become apparent.

(iii) If there are any witnesses whom it is intended by the applicant to call to support the existence of any allegedly corrupt activity of the respondents in relation to this football contract continuing after November 1997, witness statements or, at any rate, synopses of evidence intended or believed to be admissible and given by those witnesses, should be served by the applicant.

(iv) Production of any further documents should similarly be given by the applicant, if there is such case to be made out.

(v) If there is a positive case thus to be made, then it can both be made as part of the applicant's case and, of course, will in normal course, be the subject matter of cross-examination by Mr Murphy, on behalf of his client, when the respondents' evidence is given, if and when the relevant witnesses are called.

(vi) But if there is no such positive case which is to be made on behalf of the applicant, then, it appears to us, the furthest that it can be taken, is proper questioning in cross-examination by Mr Murphy of the respondents' witnesses and, when we refer to proper questioning, the kind of unloaded question, leading to an answer "yes" or "no", can, if appropriate, be asked, with the answers being accepted as final answers: because there will be no way in which it can be suggested that they are wrong, either in the form of the initial question, or in any follow-up questions, in the absence of any evidence in the possession of the applicant.

30. But thus, to that extent, the Tribunal, in our judgment, was premature in concluding that it was appropriate to allow this evidence to come out in chief, but, that rather, it would have been appropriate to enquire as to what the nature of the evidence would be and whether it could ever be admissible and, if so, what it was, and then make a decision as to the stage at which it would become admissible, if it would be ever so.
31. It appears to us, appropriate, therefore, that there should be an order for exchange of witness statements but, given the fact that the purpose of the exchange in this case, will be in order that the applicant can make this new case clear if he has to make it, the witness statements should be sequential, as should be the production, because it clearly cannot be right for the respondents to have to guess at what alleged corrupt activity they are going to have to deal with, and/or deny. We are happy to leave it to the parties to agree a timetable and, if they cannot agree, to apply on paper on notice to the Employment Tribunal for directions as to the timescale within which the sequential service of such witness statements and productions is to occur. But plainly that timescale should be short because the sooner this case comes back for a proper hearing the better.
32. One final matter needs to be dealt with, and that is this: in the chronology document, to which we have referred, there was a reference to another contract which had nothing directly to do with the applicant, and, on the face of it, no relevance to these proceedings. Apparently production of a document has been made, in which a third party made a statement that some conduct had occurred but, that, subsequently, there was a settlement between the respondents and such third party which would appears to have been, on the face of it, favourable to the respondents in relation to the question of whether such allegations were true. Mr Murphy has accepted that, on the face of it, none of that would be admissible, as part of his case by way of a positive case, and that it would be unlikely to get him very far to ask any questions about it in cross-examination, because he would be bound by any answer and, indeed, in any event, neither question or answer would at present appear to assist his case. But we say nothing about that other than to leave that matter to the discretion of the Employment Tribunal hearing a case and, to see whether by the stage that that is reached, either any admissible further direct evidence relevant to the case has been adduced, or the position has been become clear, one way or the other, as to whether it would assist the Tribunal if such questions were asked, while one suspects one knows what answer would be given.
33. We have dealt with this last point simply in order that it should be clear that nothing we say specifically pre-empts any decision by the Employment Tribunal in relation to that matter, and because we thought all matters before us should be dealt with, but, in relation to the specific question, which is as to any evidence about continuing alleged fraudulent activity in respect of the Football Stadium Contract after November 1997, we are satisfied that it is not appropriate for any evidence in chief to be given without the prior notice, particularisation and consideration to which we have referred, although it does appear, as a result of the submissions which have been put before us, that there could now be a basis in which these questions can in above form be adduced; and that a satisfactory method can be found without substantially expanding, and possibly, even by way of contracting the hearing, and such that fairness can be achieved to both sides.
34. To that extent this appeal is allowed.