United Kingdom Employment Appeal Tribunal

APPEARANCES

 

 

For the Appellant	Mr F H Lefevre, Solicitor Of- Quantum Claims Employment Division 70 Carden Place Queens Cross ABERDEEN AB10 1UP
For the Respondents	Mr M Anderson, Solicitor Of- The Commercial Law Practice Commercial House 2 Rubislaw Terrace ABERDEEN AB10 1XE


 


LORD JOHNSTON:

1. There is a somewhat complicated background to this appeal.
2. The appellant succeeded before the Employment Tribunal in a decision dated 28 January 2002, successfully obtained an order against his former employers and obtained compensation, albeit under a deduction. The conclusions of the Tribunal are as follows:-

"The circumstances of this case were confused by what at first sight appeared to be a dismissal on 19 or 23 April, followed by a further dismissal on 29 April. The respondents' decision to dismiss at the meeting on 19 April was not ratified, because Mr Catto, on being asked to confirm agreement, indicated that dismissal be deferred for 3 months. The terms of the letter of 23 April (R2) did not in the tribunal's view terminate the applicant's contract of employment, for its wording was not that of unambiguous dismissal. To say "We are inclined to terminate your employment forthwith…., [but] we will defer this decision to give you an opportunity to demonstrate that you can adhere to the company's rules and regulations", displayed, the tribunal considered, less the finality of a dismissal and more a last chance in a final warning. Further, the letter went on to confirm in the present tense, the rate of pay and hours for the night shift agreed with Mr Catto, which, had its real purpose been termination, would have had no purpose. As the question of when the dismissal took place was a question of law or mixed fact and law, the fact that Mr Catto and Miss Maclennan may have considered 19 April to be the date of dismissal, as Mr Lefevre emphasised, was not conclusive. An additional factor in determining that there was no dismissal on 19 or 23 April was Mr Fraser's telling the applicant he had no casual work for him during the week of 23 April while he was signed off, and that he should return to his normal job on Monday 30 April. Even if the tribunal erred about the date of dismissal, in both instances the reason shown by the respondents for dismissal related to the applicant's conduct in failing to turn up for work and in the first incident, by deliberately deceiving them about the reason for doing so. The tribunal was satisfied from the evidence they had genuine belief in his misconduct. A reason related to conduct falls within the category of admissible reasons for dismissal and accordingly it was not substantively unfair.

The tribunal then turned to consider the question of reasonableness. Although there was reference to a "book" in relation to the procedures the respondents applied, it was not produced, nor was it apparent that they had adopted any disciplinary policy and procedures. They conceded they took no advice before dismissing the applicant. Had he been issued with a written statement of particulars of employment which should contain terms and conditions relating to hours of work and entitlement to holidays, including public holidays, then there would have been no dubiety about the applicant's obligation to work on Easter Monday. In the absence of written particulars relating to hours of work and public holidays and of any testimony from Mr McCallum that he told the applicant he was to work the night of 17 April there was, in the tribunal's view, insufficient evidence to support the respondents' contention that he knew for certain he had turn up for work that night. Understandably Mr Catto was upset at having to go to the harbour on Easter Monday to cover the applicant's shift in his absence. Having admitted his conduct in drinking the previous evening, then misleading or promoting the cause for misleading his employers as to the reason for his non-appearance, the initial penalty imposed was a week's suspension with pay. Standing his admissions, it was not clear why he was instructed to stay away from work and from his colleagues, and no explanation was given for that penalty (R1). The "recurring problems" referred to as a reason for the suspension were not identified, and although there appeared to be something of a background of lateness and not turning up, the applicant had not been formally disciplined over these alleged shortcomings. The letter suspending him and requiring him to attend the meeting on 18 April did not indicate the disciplinary actions which might be taken, including a warning that his job could be at risk. It stated simply: "If disciplinary action is to be taken as a result of this meeting you will be informed in writing" (R1). The applicant's strange and uncharacteristic conduct during the initial stages of the disciplinary proceedings exacerbated the respondents' attitude to the gravity of his misconduct and was a factor in the consideration of dismissal as an appropriate penalty. However, they deferred dismissal on 23 April, accepting he was experiencing problems in his private life. The applicant did not clearly explain at the outset that he was involved in something of a domestic and emotional crisis. He took the decision not to attend the High Court hearing in Edinburgh on Tuesday 17 April, to which his parents went instead. It was Miss Maclennan's evidence that she knew nothing of the court case involving the applicant's girlfriend until Wednesday 18 April. The question for the tribunal was whether on the morning of Sunday 29 April the respondents' decision to dismiss for failing to turn up for work fell within the band of reasonable responses, having regard to the ultimatum issued to him a week previously. In the tribunal's opinion the applicant was not wholly credible about the circumstances of his Sunday working. Firstly, we queried why he waited until 11.00 to telephone to find out what was happening when he knew that a 07.30 start had been fixed. Secondly, if he had accepted the information given him by 2 of his workmates that he was not going to be working on that day, the question remained why he telephoned the office at all that morning. Plainly any doubts he might have had about the arrangement, which was fixed personally between him and Mr Catto as a favour to the applicant, should have been addressed to Mr Catto. The stronger likelihood was, it seemed to the tribunal, taking into account the timing of events, that he slept in and attempted to shift the blame for his failure to turn up on to others. The respondents offered the applicant no right of appeal, but as Mr Catto was the senior manager, it was not clear who, as an objective party with little or no involvement in the disciplinary process, could have conducted an appeal had one been provided for.

The tribunal, bearing in mind that its function is not to substitute its own decision as to what would be the right course to adopt for the respondents, was unable to conclude, that dismissal was a response which no reasonable employer might adopt, Iceland Frozen Foods v Jones [1982] IRLR 439.

However, we did consider for reasons already detailed that there were significant procedural shortcomings on the part of the respondents and commend to them the ACAS Code of Practice relating to disciplinary and grievance procedures, which it is an error of law for an employment tribunal to fail to have regard when determining the fairness of dismissal on grounds of misconduct Lock v Cardiff Railway Co Ltd [1998] IRLR 358. Among the good disciplinary procedures which employers should adopt in the ACAS Code are the following recommendations, that they -

i should be in writing;

ii specify to whom they apply…

iii be non-discriminatory;

iv provide for matters to be dealt with without undue delay;

v provide for proceedings, witness statements and records to be kept confidential;

vi indicate the disciplinary actions which may be taken;

vii specify the levels of management which have the authority to take the various forms of disciplinary action;

viii provide for workers to be in formed of the complaints against them and where possible all relevant evidence before any disciplinary hearing;

ix provide workers with an opportunity to state their case before decisions are reached;

x provide workers with the right to be accompanied;

xi ensure that, except for gross misconduct, no worker is dismissed for a first breach of discipline;

xii ensure that disciplinary action is not taken until the case has been carefully investigated;

xiii ensure that workers are given an explanation for any penalty imposed;

xiv provide a right of appeal – normally to a more senior manager – and specify the procedure to be followed."

3. Thereafter, those representing the employer sought a review of the decision which was duly held and a further decision issued on 27 June 2002. Mr Lefevre, who had represented the appellant throughout, determined not to be present at the review hearing, he telling us, firstly, that he thought it had no prospects of success, given the general practice in relation to such matters and, secondly, for economic reasons. We do not criticise him in this respect but merely record this.
4. The substance of the decision of the review was as follows:-

"The Tribunal considered the request for a review. Mr Anderson's grounds for review indicated that an adherence to proper procedures would have made no difference to the outcome in this case. What we considered he was in fact raising, was the question of a Polkey reduction, as established in the case of Polkey v A E Dayton Services [1987] IRLR 503, which had not been referred to in his original submissions and which the tribunal's decision had not taken into account. Accordingly, the tribunal concluded there had been a procedural mishap such as occurred in the case of Shortall t/a Auction Centre v Carey EAT 351/93 and allowed the application for review on the grounds that the interests of justice required such a review.

Where an employee is dismissed in circumstances in which the respondents have not applied a fair procedure, the fact that such a procedure would have made no difference to the outcome will not make the dismissal unfair. The 'no difference rule' however, can affect the compensation which a tribunal awards. As the House of Lords in the case of Polkey held, "Where a dismissal is unfair because of the employer's failure to take the appropriate procedural steps, the likely effect on the situation had those steps been taken should be considered at the stage of assessing compensation. At that stage ….. "There is not need for an all or nothing decision. If the employment tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment"." The question the tribunal should have asked itself was what the percentage likelihood was that the applicant would have been dismissed as a result of his failure to attend work specially scheduled for him on 29 April, had the respondents applied a fair procedure at that time. Standing that the applicant had been warned in the letter of 23 April that "the company will have no alternative but to terminate your employment immediately if there is any incident or breach of our rules during this period [of 3 months]", and given an opportunity to mend his ways, the tribunal was certain that, even with a fair procedure, the outcome would have been the same: the respondents were entitled to say, "enough is enough." He would, we had no doubt, still have been dismissed. The inescapable consequence of that finding was that the award of compensation be reduced to nil.

Accordingly, the tribunal varied its decision be deleting paragraphs 2, 3 and 4 on page 1 and adding at the end of paragraph 1 "but that no compensation is payable to him."

5. Appearing before us, Mr Lefevre, firstly, effectively challenged the competency of the review which went beyond, he submitted, what should be the scope of such a procedure. In any event, he pointed out to us that in terms of the findings of the Tribunal in its main hearing, the substance of its conclusion was that there had been significantly substantive procedural shortcomings and that in itself supported the decision and did not admit a review. Those shortcomings were listed by the Tribunal in the passage we have quoted. He further submitted, in any event, that against that background the issue focussed by the case of Polkey v A E Dayton Services [1987] IRLR 503, which features in the review, did not arise having regard to the general approach adopted by the Second Division of the Court of Session in King & Ors v Eaton Ltd (No.2) [1998] IRLR 686.
6. Mr Anderson, appearing for the respondents, submitted that all that was being attempted and ultimately achieved by the review process, was a clarification and a proper conclusion of the decision of the Employment Tribunal which to that extent was left unfinished. Properly understood upon the evidence, he submitted, the inevitable conclusion was that dismissal would follow from the conduct of the employee even if there were procedural defects at the instance of the employer. That was the conclusion the Tribunal should have addressed and achieved in its first hearing and had done in the review hearing.
7. The proper approach to this matter, commences with an examination of the basis which the decision of an Employment Tribunal may be reviewed. Such is found in Regulation 13 of the Employment Tribunals (Constitution and Rules of Procedure) (Scotland) Regulations 2001, Schedule 1 which is in the following terms:-

"13 (1) Subject to the provisions of this rule, a tribunal shall have power, on the application of a party or of its own motion, to review any decision on the grounds that –

(a) the decision was wrongly made as a result of an error on the part of the tribunal staff:

(b) a party did not receive notice of the proceedings leading to the decision;

(c) the decision was made in the absence of a party;

(d) new evidence has become available since the conclusion of the hearing to which the decision relates, provided that its existence could not have been reasonably known of or foreseen at the time of the hearing; or

(e) the interests of justice require such a review.

8. What must be said at once, as was affirmed by the EAT in the case of Trimble v Supertravel Ltd [1982] IRLR 451, is that it must be emphasised that a review hearing is not an appeal hearing and does not direct itself to questions of law. If questions of law arise, which must include whether or not a Tribunal has left out of account things it should have taken into account, or has reached an inadequate decision, for example such must be referred to this Tribunal on the appeal process. The scope of a review is related to the five matters listed in the subsection and is accordingly severely limited. We do not consider that the phrase "the interests of justice" admits a wide-ranging or even narrow appeal on questions of law. It is merely a catch-all within the context of the other four subsections.
9. Even the most cursory examination of the review procedure in this case as contained in the decision, shows that what in fact was taking place was an exercise against the background of the Tribunal's findings in fact to achieve a wholly different conclusion on, to some extent, questions of law. We therefore consider that the whole review process in this context was incompetent and should not have been embarked upon.
10. In any event, we consider it highly significant that, on the face of the Tribunal's decision, in its main decision, the substances of the issue were significant procedural defects such as would fall into the gloss, quite properly put on Polkey supra by Lord Prosser in King supra, in paragraph 20 of the decision where his Lordship says:-

"So far as Lord Bridge's observations in Polkey are concerned, it is no doubt correct to say that he is not drawing a categorical distinction between 'procedural' cases and 'substantive' case, or excluding the latter as a category from the possibility of what has become known as a Polkey reduction. If in a particular case it is possible to say (as in O'Dea) that the fact of the matter is that the applicant has only a one-in-five chance of being retained, then we concur with Peter Gibson LJ in saying that there is no arguable case that he should have been compensated on the same footing as if he was bound to have been retained. But it does not seem to us that Lord Bridge was considering or commenting upon the question of how or when one might discover what would have happened, but for the employers' unfair acts or omissions; and we cannot read him as trying to lay down a general proposition, to the effect that an employer will always be entitled, however fundamental his unfair course of action may have been, and, however speculative the question of what would have happened but for these acts and omissions, to insist upon a tribunal hearing a tract of evidence, designed to reconstruct the world that never was, and ask for a finding as to the likelihood of the employee having been dismissed in that speculative world."

11. Beyond that observation, we offer no further view as to the substance of the original decision of the Employment Tribunal since no appeal is taken to us in that respect.
12. Mr Lefevre, in passing, also raised the issue of the contribution fixed by the Tribunal in relation to the employee's conduct.
13. We consider this is an incompetent way of approaching this issue which must be the form of a substantive appeal from the original decision. In any event no notice was given to the employers that such a point would be taken at this hearing.
14. The result of this approach is that the appeal is allowed, the review proceedings will be quashed and the original decision of the Tribunal, in its entirety, reinstated.
15. If either party remains dissatisfied with the original decision looked at intrinsically, consideration can be given to a formal appeal to this Tribunal in which case, in view of what has happened, this Tribunal would look favourably upon an extension of time in terms of Regulation 37 of the Employment Appeal Tribunal Rules 1993.