United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR K HORNE (of Counsel) Instructed By: Messrs Cuff Roberts Solicitors 100 Old Hall Street Liverpool L3 9TD
For the Respondent	MR J PETTS (of Counsel) Free Representation Unit 4th Floor, Peer House 8-14 Verulam Street London WC1X 8LZ


 


JUDGE ANSELL:

1. This is an appeal from a unanimous decision of an Employment Tribunal sitting at Liverpool on 12 March this year who, in a written decision promulgated on 31 March, held that the Applicant had been unfairly dismissed on the grounds of misconduct but reduced the award by fifty per cent by reason of her contributory conduct pursuant to Section 123. They refused, however, to make a deduction on the Polkey principles.
2. The facts appear from the Tribunal decision. The employee, today's Respondent, was a Registered General Nurse, and had almost eleven years employment at the Appellant's Nursing Home in Prenton. She had a good disciplinary record and up to the time of the matters that gave rise to this hearing, she was thought of highly by her employer, particularly by her immediate superior, Janet Carn, who was the then Matron. There was some concern about a deteriorating attendance record in 2002 but she had not received any formal warning or counselling about that.
3. One of the Respondent's key duties was the issuing of prescribed drugs to residents. That task rested with Registered General Nurses such as the Respondent, and all agreed it was a very serious responsibility. It required the drugs to be dispensed and given to the patient and proper records to be kept indicating that the drug had, indeed, been taken. The relevant sheet showed the different drugs for different patients and whether the drug had to be given daily or twice daily, when and by whom. The Matron, Janet Carn, had a very good reputation for being strict, understandably, about this procedure, and both she and the Respondent were fully aware of duties.
4. On 30 April, Janet Carn informed directors of the Appellants that she believed that a particular patients' medication was not decreasing as she had expected. She had counted a particular drug called Gabapetin, due to be given to a particular patient before and after the Respondent's shifts on 30 April, and the amounts in the container had not decreased, leading to the view that no dose had been administered. Indeed, there was a suspicion that this had been going on for some time. A check was done on the following evening, 1 May, and again it was discovered that the supply had not diminished by the dosage that should have been given and, indeed, had been signed for as having been given by the Respondent. There was also some evidence, although not much was made of this by the Tribunal, that there were concerns from members of staff about the Respondent's standard of work.
5. The plan was to meet with the employee and take up with her what amounted to two evenings evidence of discrepancies, but that never happened. The Respondent was absent from work on 3 May; it was thought they might be able to deal with it on 4 May but in fact it was considered unlikely that she would come into work that day and, in fact, a decision was taken on 3 May to dismiss her for grounds of unspecified gross misconduct on a number of occasions, and that dismissal was to take immediate effect. She wrote subsequently asking for reasons for dismissal and eventually a response was given that the reason was due to incorrect drug medication procedure, drugs signed for but not proven to be given.
6. The Tribunal effectively concluded that the whole manner of the investigation and dismissal was unfair. Whilst they concluded that the three witnesses for the Appellants were credible, and found that the Respondent had formed a genuine belief about guilt, they held in paragraph 5 that it was an unreasonable belief and did not justify dismissal. They refer to guilt as being the allegation of deliberate misconduct in failing to administer drugs but recording that they had been administered. In paragraph 5.3 they recorded that the employers had denied the Applicant the opportunity of putting forward an explanation. They found that although she could not really give an explanation before the Tribunal, it did not render her case in May utterly useless. There may have been an innocent explanation at the time; there may have been an explanation involving excusable negligence or mistake rather than deliberate unprofessionalism and dishonesty. The Applicant may have given details of extenuating or mitigating circumstances. The Tribunal found that the employers had not got corroboration of the matters that were being put to the Matron by other employees and they were also concerned that there was no record of the Matron's drug count and there was over reliance upon it. They repeat in paragraph 5.5 that an explanation may not have involved deliberate falsification of patient's records and may not have given rise to consideration of a penalty or other action short of dismissal, no such consideration was given in this case and, effectively, they decided that the dismissal did not fall within the range of reasonable responses. They then considered, in paragraph 5.6, whether to discount on the principles in Polkey v Dayton Services Ltd. They had earlier been referred to that case in the context of whether the Applicant's position was utterly useless in the context that before the Tribunal, the Appellant's case was that the employee's conduct was so obviously guilty, that even though there had not been proper procedures followed, that had they been followed it would have inevitably led to dismissal and therefore there was being argued before the Tribunal below that there should be one hundred per cent Polkey deduction.
7. The Tribunal dealt with this in paragraph 5.6; they held that she was denied the opportunity of a hearing on appeal and was given insufficient information for all the reasons stated above. They found, in the circumstances, the situation was not utterly useless at the time of dismissal and there would therefore be no deduction on the Polkey principle. However, somewhat surprisingly, in the next paragraph, they then went on to make a fifty per cent deduction on the basis of contributory conduct. They said that, in light of her conduct and applying principles of justice and equity, they found it appropriate to reduce both the basic and compensatory awards and they assessed the deduction at fifty per cent. They accepted that, under normal circumstances, she would have administered the drug and recorded it but, however, the final sentence reads as follows:

"However, it appears that the patient, for whatever reason, did not receive his medication at a time when the applicant signed his record indicating that he had so received it."

There is not a specific finding there that this Respondent had actually failed to administer the drug on that occasion, although it is clear the implication of what the Tribunal were saying at that time.

8. The complaint primarily made by the Appellants in this case relate to the failure of the Tribunal to make a Polkey deduction, particularly viewed against the deduction that they later make in terms of contributory behaviour. The Appellant's case is that the Tribunal, particularly in paragraph 5.6, have not approached their task in relation to Polkey in the correct manner. In the case of Polkey v Dayton Services [1988] ICR page 142, the Court's task was set out in the final speech of Lord Bridge. He said the following at pages 162-163:

"... the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation. ... If an employer has failed to take the appropriate procedural steps in any particular case, the one question the industrial tribunal is not permitted to ask in applying the test of reasonableness posed by section 57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On the true construction of section 57(3) this question is simply irrelevant. It is quite a different matter if the Tribunal is able to conclude that the employer himself, at the time of dismissal, acted reasonably in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with. In such a case the test of reasonableness under section 57(3) may be satisfied.

...

If it is held that taking the appropriate steps which the employer failed to take before dismissing the employee would not have affected the outcome, this will often lead to the result that the employee, though unfairly dismissed, will recover no compensation or, in the case of redundancy, no compensation in excess of his redundancy payment.

Later on, Lord Bridge cites with approval a passage from Mr Justice Browne-Wilkinson, as he then was, in the case of Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91, where the Judge said this:

"There is no need for an 'all or nothing' decision. If the industrial 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 Appellants argue this approach was not adopted by the Tribunal in this case. Whilst it is right to say that, in submissions before the Tribunal, it had very been much put to them on the basis of an all or nothing situation, it was still open to the Tribunal to form a view as to the percentage possibility that this employee would have lost her employment. Mr Horne for the Appellants, argues that it was appropriate for the Tribunal to do this, since they later found that there was misconduct resulting in the deduction they made of fifty per cent. He argues that the Tribunal by implication found that there was an element of misconduct because this employee, being the only person who administered the drugs to that particular patient, had marked down that she had administered the drugs and that had not taken place. Whilst the Tribunal had reservations about the employer's approach in their investigation, he submits that, in paragraph 3, the Tribunal found only that there may have been an explanation and there may have been an innocent explanation or there may have been an explanation involving excusable negligence and he says, within that finding by the Tribunal, there is the clear possibility envisaged by the Tribunal that this indeed was a guilty employee and, in those circumstances, the Tribunal failed in their task of considering the appropriate Polkey deduction.

9. In equally strong and persuasive submissions from Mr Petts, he sets out why the Tribunal were entitled to come to the view that they did. He first of all submits that the Tribunal's approach in paragraph 5.6 was indeed the correct approach against a background where, as I have indicated already, the case was being put to them on the basis of an utterly useless, all or nothing, situation. In other words, it was being submitted that it had to be a case where one hundred per cent Polkey deduction should be made. He further argues that, if they did not address the point as clearly as they ought to have done, that for a number of reasons the Tribunal's decision on Polkey was a correct one. He first of all submits that there has to be evidential criteria before a Tribunal before they can consider a Polkey deduction and that it must not be a matter of mere speculation. He referred us to a decision of this Court, Irvine Insurance Services Ltd v Robinson, (22 July 1997) a judgment given by His Honour Judge Hull QC where the Judge expressed the matter in this way, at page 7G:

"They are [industrial tribunals], in our view, only required to consider [Polkey] that, if it appears to them that the point arises as a possible credible point. Then of course they must investigate it, as they must investigate any matter which appears to them to tell on the likely size of their award. ... A Tribunal is not obliged to consider hypothetical matters unless they seem to be real possibilities or probabilities."

10. He then referred us to King v Eaton Ltd [1998] IRLR 686, a decision of the Court of Session in Scotland where the judgment was given by Lord Prosser. At paragraph 19, he says as follows:

"19 ... In broad terms, it appears to us that there will be situations where one can say that what went wrong was 'merely' procedural. Equally, in broad terms, we think there will be situations where one can say that an employee has been deprived of 'something of substantive importance' .... We see no need to discard entirely terminology of this kind; and while in many cases it may be inappropriate to allocate the particular facts to either category, or to do so without enquiry, it seems to us that a distinction between the 'merely' procedural, and the more genuinely 'substantive' will often be of some practical use, in considering whether it is realistic, or practicable, or indeed 'just and equitable' to embark upon an attempt to construct a hypothesis, enabling one to assess what would have happened, if only it had. If there has been a 'merely' procedural lapse or omission, it may be relatively straightforward to envisage what the course of events would have been if procedures had stayed on track, rather than briefly leaving the track in this way. If, on the other hand, what went wrong was more fundamental, or 'substantive', and seems to have gone 'to the heart of the matter', it may well be difficult to envisage what track one would be on, in the hypothetical situation of the unfairness not having occurred. .... .

20 So far as Lord Bridge's observations in Polkey are concerned, it is no doubt correct to say that he is not drawing 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 deduction. If in a particular case it is possible to say ... that the fact of the matter is that applicant has lost 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. It does not seem to us that Lord Bridge was considering or commenting upon the question of how or when one would 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."

Those passages support the submission that he makes that the Court should not get involved if it is merely a speculative exercise.

11. The second submission Mr Petts makes is that, in considering whether or not to apply Polkey deduction, the Court are entitled to look at the nature of the defect in relation to the employer's conduct and whilst he accepts that Polkey is not necessarily limited simply to procedural defects, he highlights the passage that I have just read in King v Eaton to contend that the more fundamental the defect in the employer's approach, the more unlikely it is that a Tribunal would be able to speculate about what would have happened if correct procedures had been followed, and then the less likely that a Polkey deduction could be made. He highlights the findings in this case, in particular the finding at the beginning of paragraph 5, that there was an unreasonable belief in the employee's guilt and contends that faced with that finding, it was entirely appropriate for a Tribunal not to go on to consider the possibility of a Polkey deduction.
12. His third submission is that since the Court, in dealing with misconduct, must look at the justice and equity, that in a situation as in this case where a Court has not actually made a clear finding that there was any misconduct, it would be totally inappropriate for a Tribunal then to consider making a Polkey deduction.
13. The difficulty that we have with those submissions is, of course, the further finding made by the Tribunal that there was indeed contributory conduct, which resulted in the cross appeal that was put in in this case, which was to the effect that the Court should not have come to that finding. It is the lack of clarity of the findings in this case that go to the difficulties we have with both the Polkey and the misconduct deduction. Whilst the Tribunal have indeed referred to a deduction in the light of the Applicant's conduct, there is no clear finding that there was any misconduct on her part. There was the evidence which the Tribunal accepted that she was the only person on duty and the finding at the end of paragraph 5.7 that the patient, for whatever reason, did not receive his medication at a time when the Applicant signed his record indicating that he had so received it. This leads us to the conclusion that there is by implication a finding of misconduct without clarity on the part of the Tribunal, as to the precise nature of that misconduct. True, there was what is said to be the very strong inference that this could only have happened through the fault in some way of this employee, simply because she was the person on duty, she was the person administering the drugs and she was the person signing the form, it is not suggested that anybody else was involved in that process. But, at the end of the day, the Tribunal used phrases where they appear to have not crossed the line of making clear findings in relation to misconduct. Even at the end of paragraph 5.7 we note that they use the phrase "for whatever reason" without making findings even in relation to negligence if not deliberate misconduct.
14. We are therefore left with the difficulty as to whether the Tribunal have adopted a consistent approach throughout this case because, if they had made findings of misconduct to the extent of fifty per cent, it seems to us inevitable that they therefore had material before them that would have entitled them to consider making a Polkey deduction. Considering paragraph 5.6, they have not gone through the correct process in relation to that deduction, because if they had found that there was misconduct to the extent that they did find later on in the judgment, it is clear to us that would have raised the case beyond mere speculation to a level where they should certainly have considered the possibility of a Polkey deduction.
15. Therefore there are inconsistencies on the face of this decision and we therefore propose to remit the matter on the basis that the Tribunal should be asked specific questions, namely whether the employers have satisfied them that there was misconduct on the part of the employee in failing to administer a drug on one or more occasion to the patient, having signed for the fact that she did administer that drug and, in the light of that finding, to then consider (a) the possibility of a Polkey deduction and (b) the possibility of a contributory behaviour under Section 123.
16. We will set aside the finding of contributory conduct which is to be reconsidered. The finding of unfair dismissal will remain as it has not been challenged.