United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J SWIFT (of Counsel) Instructed by: Free Representation Unit 4th Floor Peer House 8-14 Verulam Street London WC1X 8LZ
For the Respondent	MR B UDEJE (of Counsel) Instructed by Consignia PLC Legal Services Impact House 2 Edridge Road Croydon Surrey CR9 IPJ


 


HIS HONOUR JUDGE REID QC

1. By a decision entered on the register and sent to the parties on 12 August 2002 an Employment Tribunal held at London South (chairman Mr RD Salter) held that Mr Frewin had not been unfairly dismissed by the Post Office. His dismissal was on the grounds of lack of capability in circumstances in which he was said to be suffering from a stress related illness. Against that decision he appeals.
2. The basis of the appeal is that, according to Mr Frewin, the Tribunal wrongly refused to take into account whether (and the extent, if any) to which his illness was caused by the actions of the Post Office or its employees. The allegation made by Mr Frewin in his originating application was that "the reason he could not work was a direct result of harassment, bullying, victimisation and humiliation in the workplace, and the management's complicity in this."
3. The Tribunal made elaborate findings of fact relating to Mr Frewin's allegations of mistreatment in the work place. In summary the Tribunal found that Mr Frewin had been employed by the Post Office in Isleworth (and later Brentford) from 1990 and was initially happy. By 1995 he was less content and raised concerns about the way he was being treated by his colleagues with Mr Evans, then the delivery office manager, because he felt he was not being supported by the delivery manager Mr Watts, his immediate superior. Mr Evans advised him not to react to provocation. Mr Frewin made no formal grievance complaint. In 1997 Mr Frewin decided to work part time and from 1998 raised a series of grievance procedures because he perceived he was being singled out by Mr Emmins, the new delivery manager. From May 1999 Mr Frewin was placed on light duties as a result of complaining about a pain in his heel. On 8 July his period of stress related illness commenced. He never returned to work. On 7 September Mr Cole, who had become the delivery office manager, visited Mr Frewin at home to see if there was anything he could do in assisting Mr Frewin to return to work. He noticed the house was for sale and asked if Mr Frewin was intending to apply for a transfer or to resign. Mr Frewin made no reply. On 7 October Mr Frewin moved to New Milton in Hampshire. On 12 January 2000 the Post Office notified him that consideration was being given to dismissal on the ground of capability after his absence by reason of illness since 8 July 1999. Mr Frewin was not well enough to attend a meeting until 7 June 2000. At the meeting Mr Frewin was accompanied by a union representative and he made it clear he would not return to work. In the meantime he had applied for retirement on medical grounds. Dr Guess, the Post Office's Occupational Physician Eastern Territory, concluded he did not meet the criteria for retirement on medical grounds but that he was unable to return to work for nine months. On 21 August 2000 the Post Office, having considered her evidence, dismissed Mr Frewin on medical grounds. He was paid in lieu of notice and given a lump sum of £6228.82 in addition. After his dismissal Mr Frewin unsuccessfully pursued an appeal against the refusal of medical retirement, and on 9 November 2000 issued his originating application alleging unfair dismissal.
4. Before the Tribunal it was contended on behalf of Mr Frewin that the Post Office had acted wilfully in refusing to follow up his complaints of harassment, thereby placing him under pressure with the result that his illness followed and he was dismissed. In those circumstances it was submitted that the dismissal on the grounds of his illness was unfair.
5. The Tribunal dealt with the law at paragraphs 5 to 12 of their decision in these terms:

"5 Subject to certain exceptions and qualifications employees have the right not to be unfairly dismissed (s. 94 Employment Rights Act 1996). Section 98 of the Act sets out the way the Tribunal should approach the question of whether a dismissal is fair. First the employer must show the reason for the dismissal (s. 98(1)(a)) and that the reason is one of the potentially fair reasons in s 98 (2) of the Act. One of the potentially fair reasons for dismissal relates to the capability of the employee for performing work of the kind he or she was employed to do (s. 98 (2)(a)).

6 The Tribunal must then consider whether the employer acted reasonably in dismissing the employee for that reason. Section 98(4) states that the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) - (a) depends on whether in the circumstances including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and (b) shall be determined in accordance with equity and the substantial merits of the case.

7 Absence from work by reason of long-term ill health is a potentially fair reason for dismissal as it relates to the capability of the employee of the employee to work. The key to a fair dismissal is a fair procedure consisting of three major elements: consultation with the employee; medical investigation and consideration where appropriate of alternative employment.

8 It was held by the Employment Appeal Tribunal in London Fire & Civil Defence Authority v Betty [1994] IRLR 384 that the employer's duty to act fairly in dismissing an employee on the grounds of ill health is unaffected by considerations as to who was responsible for the employee's unfitness to work.

9 Employers may be expected to show more sympathy to employees who are injured or suffer long-term illness as a result of an accident or injury at work.

10 In Edwards v Governors of Hanson School [2001] IRLR 733 the EAT held that in assessing compensation the Tribunal may take into account evidence that the employer was responsible for the illness or injury. Obiter the EAT stated that the decision in Betty could not be agreed with if was to be taken as authority for the proposition that an employer's treatment of an employee which causes ill health which in turn causes incapability which the employer in turn treats as a reason for dismissal, can never of itself make the dismissal unfair.

11 In Young v Post Office [2002] EWCA Civ 661 the Court of Appeal held that an employer could be liable for psychiatric injury suffered by an employee

12 Employment Tribunals are bound by the decisions of superior Courts including the EAT. As Betty has not been overruled it remains authority for the proposition that Tribunals should ignore the cause of the illness when considering whether the employer acted reasonably in dismissing the employee and Edwards is authority for the proposition that the Tribunal may take it into account when assessing compensation."

6. On behalf of Mr Frewin it was submitted that the decision of the Tribunal in the present case was based on an analysis of the two EAT decisions in the Betty and Edwards cases. Counsel submitted:

(i) If the decision in Betty is, for any purposes still to be regarded as good law, it should be limited to the specific situation in which it arose i.e. a conclusion by the Tribunal that the fact that an employer had caused the incapacity which was the reason for dismissal did not render the decision to dismiss, de facto, automatically unfair. To this extent the decision in Betty is correct since any such approach would place an unwarranted restriction on the obligation on a Tribunal, pursuant to section 98(4), to consider all the circumstances of the case, and the equity and substantial merits of the case.

(ii) However, the more general proposition in Betty (i.e. that whether or not the employer caused the incapacity that was the reason for dismissal is irrelevant) cannot be correct:

(a) no such limitation can be derived from the language used in section 98(4) of the 1996 Act. Applying such a limitation distorts the application of the section 98(4) test;

(b) introducing such a limitation in relation to capability dismissals would be to apply a test for dismissals for a reason within section 98(2)(a) which was different to that applied in relation to any other category of dismissal;

(c) the rationale of the decision in Betty rests on two false premises: first the conclusion that the existence of possible common law claims limits the scope of a claim for unfair dismissal; and second, pessimism as to the ability of tribunals to consider and determine "complicated" issues of causation;

(d) the first premise is false for two reasons: (1) The existence of a possible common law claim does not affect the proper construction of section 98 of the 1996 Act. In this respect the reasoning in Betty would also require tribunals to ignore (for the purposes of a claim of unfair dismissal) whether or not the employer had acted in breach of any contractual obligation, since that too could be the basis of a successful common law action. Any such suggestion is patently wrong. In all cases a tribunal is bound to have regard to all circumstances pertaining to the state of affairs that led to the decision to dismiss. (2) The existence of the common law claim is unrelated to whether or not there has been an unfair dismissal (or for that matter, any decision to dismiss at all). The fact that a decision to dismiss might give rise to two or more causes of action that may overlap is not of itself a basis for limiting the scope of section 98(4). The proper scope of the unfair dismissal claim under the 1996 Act turns only on the proper construction of the relevant statutory provisions;

(e) The pessimism of the EAT in Betty is groundless (certainly now, and in reality, even in 1994). Tribunals regularly have to decide complex issues of causation — e.g. under the Equal Pay Act and other anti-discrimination legislation. Under the Disability Discrimination Act such issues arise in a context which borders on that covered by common law personal injury actions. In any event, there is no basis for concluding that Tribunals lack the competency to consider and determine causation issues. Even if this was not the position, such considerations cannot affect the proper meaning and effect of section 98 of the 1996 Act.

(iii) The correct approach to the application of section 98(4) of the 1996 Act in relation to a capability dismissal is:

(a) When determining whether a decision to dismiss in such a case was fair (i.e. was the reason for dismissal a sufficient reason for the dismissal), the tribunal should have regard to all circumstances which pertain to the incapacity which is the reason for the decision to dismiss.

(b) It is relevant to consider whether or not the state of affairs which was the reason for dismissal was caused wholly or in part by the employer (or those for whom he is vicariously liable). This includes consideration both of relevant acts and relevant omissions.

(c) A tribunal should also take into consideration any acts/omissions which are the responsibility of the employer which exacerbated the illness/incapacity which was the reason for dismissal.

(d) The relevance of points at (a) and (b) does not depend on any conclusion by the Tribunal as to whether or not the employer acted intentionally (or "wilfully"), or negligently. Such considerations are material only to the weight to be attached to the causation issue, not to whether or not it is a relevant consideration.

(e) When considering whether or not the decision to dismiss was fair (i.e. the employer acted reasonably in treating the reason for dismissal as a sufficient reason), the fact that the employer was responsible in whole or in part for the incapacity which was the reason for dismissal will be merely one of the relevant factors to take into account. The weight to be attached to it will depend on all the circumstances of the case. In some instances the existence of causation could render the decision to dismiss unfair; in other cases it may not. Thus the existence of a causative link will not require the conclusion that the decision to dismiss was unfair or raise any presumption of unfairness. It is merely a factor to be considered and to be weighed in the balance.

(iv) The Employment Tribunal erred in two respects:

(a) it concluded that it should not have regard to whether or not Mr. Frewin's illness was caused by the actions of his employer;

(b) when considering as an alternative scenario that the actions of the employer insofar as they caused the incapacity were relevant to the decision under section 98(4), the Tribunal limited its consideration only to whether or not the illness had been caused by the Respondent (either wilfully or negligently). It did not consider either whether the Respondent's actions had exacerbated or contributed to the illness which was the basis of the decision to dismiss.

7. On behalf of the Post Office Counsel submitted that the decision in Betty remained good law and that the Tribunal had been correct in holding that the cause of Mr Frewin's illness was irrelevant to the fairness of his dismissal. In any event, he submitted, the Tribunal had considered and dismissed the alternative way in which the case was put.
8. In considering these submissions we begin with the words of Morison J in Betty at [1994] IRLR 385:

"It seems to us implicit in the Tribunal's decision is the proposition that because they found the employee was ill, because of the way the employer had treated him, he could not fairly be dismissed on the grounds of ill health. Whether the Tribunal took the view that wherever an employer injured an employee he could not fairly dismiss the employee on grounds of ill health, or were distinguishing this case from hundreds of other similar cases where, for example, an employer is in breach of his Factory Act obligations to guard a machine's blade and thus the employee's fingers or hand are amputated, we cannot discern. Nor can we discern whether the Tribunal was saying that on the facts of this case the employee could never have been fairly dismissed. Nowhere do they say that the dismissal was premature, and it appears that they were taking the view that because of the behaviour of the employer, which is to be deplored, the dismissal for the illness which the employers caused could never be fair.

It seems to us that Tribunals should not be concerned to ascertain whether the illness which is the reason for the dismissal was caused or contributed to by the employer. The question in issue is whether, in the light of the employee's medical condition and the enquiries and procedures the employer made and used before deciding to dismiss, the dismissal was fair. To introduce questions of responsibility for illness or injury would take a Tribunal down a path that could lead to endless dispute on matters on which they would have no special expertise. We do not consider the employer has disabled himself from fairly dismissing an employee whom he has injured. If the injury was caused by a breach of the employers duty to the employee, the employee will be entitled and able to recover appropriate compensation.

The question as to whether the dismissal was fair or unfair depends on different factors. An employer's duty to act fairly in the dismissal is unaffected by considerations as to who was responsible for the employee's unfitness for work. Here it is clear that the employee was unfit for work. The employers were reasonably justified in so concluding after proper investigation and after the matter had been fairly debated."

9. The Edwards case arrived before Bell J in the EAT after having been in the Court of Appeal. Initially the decision of the Employment Tribunal had been upheld by the EAT. The EAT had struck out the appeal under the summary procedure, on the basis that in assessing compensation for unfair dismissal the allegation that the applicant's illness which led to his dismissal had been caused by the acts of his employer was irrelevant. The EAT had relied on the Betty case to support this decision. Beldam J refused the initial application on paper for leave to appeal, expressing the view that it was not reasonably arguable that Betty was wrongly decided. Sedley J heard the renewed oral application and said that he was "inclined to share his view, although not necessarily for all the reasons given by Morison J in that case". He took the view, however, that this left open the question whether the same principle applied to the assessment of compensatory awards. Following the expression of this view the matter was remitted to the EAT by consent.
10. Bell J commented on the Betty case in the course of giving judgment:

"We are conscious of the authorities which provide that this Appeal Tribunal should only rarely disagree with a previous decision of its own. But if the judgment in the case of Betty is to be taken as authority for the proposition that an employer's treatment of an employee, which causes ill health which in turn causes incapability which the employer treats as a reason for dismissal, can never of itself make the dismissal unfair, we do respectfully disagree. In our view, this conclusion would place an unjustified fetter upon the purpose of s.98(4) of the Employment Rights Act 1996, which provides that where an employer has established the reason (or, if more than one, the principal reason) for the dismissal and that it is a reason falling within subsection (2), such as the employee's lack of capability to perform his work, 'the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)—(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as sufficient reason for dismissing the employee, and (b) shall be determined in accordance with equity and the substantial merits of the case.

The jurisdiction of the employment tribunal is entirely the creature of statute, and that provision is widely drawn. It may well be that the cases where an employer's earlier treatment of an employee leading to incapacity through ill-health means that it can only dismiss him unfairly will be exceptional, as Mr Rigby appeared minded to concede, and that they would not include 'standard' cases of injury caused by the employer's negligence or breach of statutory duty where there is a clear cause of action in a civil court for damages which may, in any event, exceed the statutory limit on a compensatory award for unfair dismissal. In such cases it would no doubt be inequitable that an otherwise fair employer should only be able to dismiss the employee at the cost of a finding of unfair dismissal. Moreover it might well be that the High Court or county court, with its daily experience of such cases, would be particularly well equipped to judge and award proper compensation, without statutory limit.

But it is not difficult, in our view, to imagine cases where those factors carry less weight or no weight at all. If the employer or someone for whom it is responsible has acted maliciously, or wilfully caused an employee incapacitating ill health, we see no reason why dismissal, however fair the ultimate procedures in themselves, should not lead to a finding of unfair dismissal. In many cases malicious injury will be followed by unfair procedures, but this does not necessarily follow. Even where the employee has been badly treated and has suffered ill health, there may be cases where the employee's prospects of bringing successful court case for damages are limited. Perhaps illness was not a foreseeable result of the particular unfair treatment at work. We do not believe that employment tribunals are ill equipped to investigate and resolve issues relating to an employer's conduct causing illness leading to dismissal."

11. It can be said that words of Bell J are obiter in that it was not necessary or the purpose of deciding the issue as to remedy to consider the issue as to dismissal which was before the EAT in Betty. It can also be said that there is support for the decision in Betty in the remarks of two members of the Court of Appeal. However we share the view expressed by Bell J. We respectfully agree that if the judgment in the case of Betty is to be taken as authority for the proposition that an employer's treatment of an employee, which causes ill health which in turn causes the incapability that the employer treats as a reason for dismissal, can never of itself make the dismissal unfair, it is incorrect. In our view it is properly limited to being authority for the proposition that the fact that the incapacity causing the dismissal was caused by the employer does not necessarily make the dismissal unfair. But we take the view that in considering the fairness of the dismissal the Employment Tribunal is entitled to take into account the fact that the incapacity was caused by the employer. We respectfully agree that to hold otherwise would place a fetter on section 98(4) which is not justified by the words or the purpose of the section. Furthermore we do not agree with the proposition that Employment Tribunals are in some way unfitted to the task. The task is by no means as complicated or onerous as many of the other tasks now entrusted to tribunals, for example in the fields of the equal pay and disability discrimination legislation.
12. It follows that the Employment Tribunal, loyally following Betty, were in our view incorrect insofar as their decision held that the cause of Mr Frewin's illness was irrelevant. However the Tribunal went on at paragraph 14(ii) to make a further finding that there was "no evidence to suggest that the Respondent had wilfully caused the Applicant's illness or that the Respondent had acted in such a way that it ought to have appreciated that the likely consequence could be a psychiatric illness." This formulation is clearly harking back to the words of Bell J "If the employer or someone for whom it is responsible has acted maliciously, or wilfully caused an employee incapacitating ill health…" It was a finding made to cover the possibility that the cause of Mr Frewin's illness was relevant.
13. It was submitted that this further finding was inadequate because it did not deal with the causation of the illness. The submission was that malice or wilfulness go only to the weight to be attached to the causation issue and not to its relevance. In our view this is a mistaken submission in the context of this case. The case which Royal Mail had to meet, and on which the Tribunal had to adjudicate, was that the illness was the direct result of deliberate acts. It was this issue of causation which the Tribunal had to address and which it did address. There was no need for it to address the causation issue at any greater length. It is clear from the findings that the Tribunal's view was in the absence of any evidence of wilfulness and in the absence of any evidence that Royal Mail ought to have appreciated that psychiatric illness was a likely consequence, the onset of that illness (even if caused by events at work) did not and could not have rendered this particular dismissal unfair. The conclusion to which the Tribunal came was therefore unaffected by their view of the Betty case and was correct.
14. For these reasons the appeal fails and will be dismissed.