United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR N GRUNDY (Of Counsel) Instructed by: Messrs Berrymans Lace Mawer Solicitors Castle Chambers 43 Castle Street Liverpool L2 9SU
For the Respondent	MR P BUTLER (Solicitor) Messrs Gwilym Hughes & Partners Solicitors 30 Grosvenor Road Wrexham LL11 1BU


 


JUDGE PETER CLARK

Judgment

1. This is an appeal by the Respondent employer, Flintshire County Council, before an Employment Tribunal chaired by M G H Pritchard sitting at Shrewsbury and elsewhere over some 4 weeks between 4 March and 24 May 2002, against that Tribunal's reserved decision, promulgated with extended reasons on 27 August 2002, upholding the Applicant, Mr Sutton's complaint of (1) automatically unfair constructive dismissal under section 103A of the Employment Rights Act 1996 (ERA) and (2) victimisation contrary to section 47B ERA. There is also a cross appeal by the Applicant. In this judgment we shall describe the parties in the same way as below.

Background

2. The Applicant commenced employment with the Respondent as Audit Manager in October 1997. The employment ended with his resignation by a letter from his solicitor dated 3 April 2001.
3. The starting point for the ultimate breakdown in the employment relationship concerns 4 principal investigations undertaken by the Applicant:

(1) The 'ultra vires' issues. This concerned an investigation into the suggestion that in late 1997 a £20,000 payment was made to a member of the Respondent's staff, C, ostensibly as a redundancy payment when she remained in continuous employment with the Respondent thereafter.

4. At the time the senior officers of the Respondent included Mr Loveridge, County Secretary as he became and Mrs Renshaw, later County Treasurer. The Chief Executive was Mr McGreevy.
5. The ultra vires investigation threw up this issue. So concerned was Mr Loveridge that in January 1999 he instructed Mr James Gurdie QC to prepare an opinion on the matter. There was a suggestion that serving officers were involved in falsification of documentation allowing C to receive her payment.
6. The Applicant and Mrs Renshaw consider that the instructions to Counsel prepared by Mr Loveridge went beyond merely asking for Counsel's opinion as to whether the payment was ultra vires, and sought in some way to protect those serving officers who had been involved.
7. In the event Mr Gurdie gave his opinion in February 1999; it was not what Mr Loveridge wanted to hear. Instead of simply presenting the opinion, as written by Counsel, to a meeting of the full Council, Mr Loveridge paraphrased it, inserting some of the euphemisms contained in his original instructions with which Counsel may not have agreed.
8. The Applicant believed that in his report to the Council Mr Loveridge was seeking to pass off his own views as those of independent counsel; indeed later, in a report presented to the Council in January 2001, the District Auditor was critical of the way in which Mr Loveridge had presented Counsel's views to Council members.
9. The Applicant put his criticisms to Mr Loveridge at a meeting of the ultra vires Panel held on 20 August 1999 and it was common ground that little contact took place between the Applicant and Mr Loveridge thereafter. That was what the Applicant described to the Tribunal as the start of the period of ostracisation which he experienced. The Employment Tribunal accepted that this marked the beginning of bad relations between the Applicant and Mr Loveridge.
10. Matters were made worse, in the view of the Employment Tribunal, when further advice was sought from different leading Counsel, Mr A Webster QC, on the proposed promotion of an employee, D, who had featured in the redundancy payment affair. Mr Webster advised that appointments should not be made until after internal disciplinary proceedings had taken place. That advice was not disclosed, although the Applicant came by a copy, and in the event the appointments were made.

(2) River Lane. Problems developed between the Applicant and the 3 senior officers mentioned earlier; Mr MrGreevy, Mr Loveridge and Mrs Renshaw over this matter which centred on an officer, A, signing a cheque for the purchase by the Respondent of a farm in Cheshire in order to relocate a tenant farmer who occupied a Council-owned property required for an employment creation project, without the necessary financial authority. The cheque was counter-signed by Mrs Renshaw.

11. A was disciplined; the Applicant was the main witness in those internal proceedings. A was dismissed. He then appealed internally. The Appeal hearing date was fixed in liaison with Mr Loveridge. That date in July 1999 fell within the 3 week period of the Applicant's pre- booked holiday in America. He did not attend the Appeal hearing; nor was his witness statement put before the appeal panel. A was reinstated with a formal written warning to remain on his file for 12 months. After the Applicant's return from holiday he requested the notes of the Appeal hearing from Mr Loveridge on 10 August 1999. They were never provided, not even at the Employment Tribunal hearing, despite further requests.

(3) Person F. Person F, an employee of another Council was seconded to assist the Respondent in playing its part in the Waterhouse enquiry into child abuse in North Wales Children's homes. A question arose as to whether she had been overpaid. Mrs Renshaw directed Internal Audit to investigate in July 1999. The Applicant sought information from Mr Loveridge on a number of occasions. Mr Loveridge, who had a problem with the Waterhouse enquiry, simply failed to co-operate in providing that information.

(4) UBAS Investigation. This was an investigation into Housing Benefit fraud which saw one employee convicted in the Crown Court and sentenced to a term of imprisonment. Problems arose over the scope of the Applicant's investigation and the co-operation he received from Mr Loveridge, who was prepared to disclose documentation requested by the Applicant to Mrs Renshaw only and not the Applicant, who felt that his independence was being compromised.

Action by the Applicant

12. On 12 May 2000 the Applicant and Mr Humphreys, a solicitor employed by the Council, composed and circulated to all Council members a memorandum. The main passages are set out at paragraph 38 of the Employment Tribunal reasons. In short, it accused the Respondent's Chief Officers of failing to comply with the Council's financial regulations as to co-operation and providing records to Internal Audit. That 'confidential'memorandum was leaked to the press. It was followed by another, similar memorandum to members on 24 May 2000; it accused Mrs Renshaw of acting improperly in the UBAS matter by giving an instruction dated 16 May for a paragraph to be inserted in the Audit report.
13. At this stage the Deputy Chief Executive, Mr McDonogh and the Respondent's solicitor, Mr Barry Davies became involved. They considered the Applicant's action in circulating members, particularly for the second time, to be provocative at best.
14. The Applicant and Mr Humphreys circulated members for a third time on 10 June 2000, expressing the Applicant's concern that in the matter of the ultra vires redundancy payment case falsification of a document was entirely unacceptable.
15. Mr McGreevy then wrote to members on 14 June, commenting on the Applicant's last memorandum. His letter contained this statement:

"It will be necessary for senior officers to consider carefully what action to take in response to the inappropriate and misleading memorandum and to give consideration to the position of the officers involved."

16. On the same date, 14 June, the Applicant and Mr Humphreys sent their last, fourth memorandum to members; they stated:

"I am writing to you again:

(i) to express my concerns about possible contrived and unwarranted action that may be taken against me for simply doing the job for which I am employed.

(ii) to inform you of very significant further concerns in respect of specific matters relating to the conduct of Chief officers."

Action by the Respondent

17. In these circumstances Mr McDonogh directed the solicitor, Barry Davies, to prepare instructions to leading Counsel to advise on the general issues raised by the Applicant's memoranda to members. Counsel, Mr Andrew Arden QC and his junior, provided their written advice to the Respondent dated 1 September 2000. By then the Applicant had gone off work on 29 August suffering from stress, never to return. Mr Humphreys also went off sick, suffering from work related stress, for a lengthy period commencing in July 2000.

Further action by the Applicant

18. Before going off sick the Applicant had also written to the Nolan Committee on 15 June 2000; to his professional body on 19 June and to Public Concern at Work in London on 20 June, pointing to alleged failures by senior officers in the Respondent to comply with financial regulations.

District Auditor

19. On 8 September 1999, following accusatory correspondence from Mr Humphreys to Mr McGreevy the 3 senior officers of the Respondent met with Mr Stradling, the District Auditor and referred to him for investigation the matters raised by Mr Humphreys.
20. On 9 August Mr Stradling wrote to Mr McDonogh informing him that he intended to publish his findings in the form of a Public Interest Report. He produced a detailed draft report in November 2000 and his final report on 22 January 2001.
21. The Employment Tribunal summarise the main findings and recommendations in that report, which they found to be hard-hitting, at paragraph 81 of their reason. They include unreserved praise and no criticism of the Applicant's pursuit of the various investigations and emphasis on the very serious procrastination and delay which had taken place in dealing with the Applicant's concerns.

The legislative framework

22. These complaints are brought under what has been colloquially called the Whistleblower's Charter, that is the provisions of the Public Interest Disclosure Act 1998 inserted into ERA.
23. There are 2 separate and distinct complaints. First, a complaint under section 48(1A) ERA that the Applicant had been subjected to a detriment in contravention of section 47B ERA (the victimisation complaint).

Section 47B provides, under the heading Protected Disclosures,

"(1) A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure.

(2) … this section does not apply where –

(a) the worker is an employee and

(b) the detriment in question amounts to dismissal (within the meaning of [Part X])."

24. Secondly, a complaint of unfair dismissal, the dismissal alleged being a constructive dismissal under section 95(1)(c) ERA and that dismissal being said to be automatically unfair under the provisions of section 103A which provides:

"An employee who is dismissed shall be regarded for the purpose of this Part [Part X ERA] as unfairly dismissed if the reason, (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure."

25. As to what are protected disclosures, section 43A ERA provides:

"In this Act a 'protected disclosure' means a qualifying disclosure (as defined by section 43B) which is made by a worker [including an employee such as this Applicant] in accordance with any of sections 43C to 43H."

By section 43B:

"(1) in this part a 'qualifying disclosure' means any disclosure of information which, in the reasonable belief of the worker making the disclosure tends to show one or more of the following –

…

(b) that a person has failed, is failing is or is likely to fail to comply with any legal obligation to which he is subject,"

By section 43C:

"(1) A qualifying disclosure is made in accordance with this section if the worker makes a disclosure in good faith –

(a) to his employer,"

By section 43F:

"(1) A qualifying disclosure is made in accordance with this section if the worker –

(a) makes the disclosure in good faith to a person prescribed by an order made by the Secretary of State for the purposes of this section, and

(b) reasonably believes –

(i) that the relevant failure falls within any description of matters in respect to which that person is so prescribed, and

(ii) that the information disclosed, and any allegations contained in it, are substantially true."

By section 43G:

"(1) a qualifying disclosures made in accordance with this section if –

(a) the worker makes the disclosure in good faith,

(b) he reasonably believes that the information disclosed, and any allegation contained in it, are substantially true,

(c) he does not make the disclosure of a purpose of personal gain,

(d) any of the conditions in subsection (2) is met, and

(e) in all the circumstances of the case, it is reasonable for him to make the disclosure.

(2) the conditions referred to in subsection 1(d)

(a) that, at the time he makes the disclosure, the worker reasonably believes that he will be subjected to a detriment by his employer if he makes the disclosure to his employer or in accordance with section 43F,

…

(c) that the worker has previously made a disclosure of substantial of the same information -

(i) to his employer, or

(ii) in accordance with section 43F"

Subsection (3) deals with factors to be taken into account in deciding whether it was reasonable for the worker to make the disclosure.

26. In the course of argument Mr Grundy referred us to the helpful analysis of the questions raised in a section 47B victimisation complaint to be found in the judgment of Mr Recorder Underhill QC in London Borough of Harrow v Knight [2003] IRLR 140 (EAT). It is for the Applicant to show that:

(i) he has made a protected disclosure.

(ii) he has suffered some identifiable detriment.

(iii) the employer has done an act or omission by which he has been subjected to that detriment and

(iv) that act or omission had been done by the employer "on the ground that" he had made the identified protected disclosure.

Issues before the Employment Tribunal

27. It follows that this case raised a number of issues for determination by the Employment Tribunal, applying the law to the facts as found. As to the victimisation complaint, the four questions identified in Knight arose for consideration. As to the unfair dismissal complaint it was necessary for the Employment Tribunal first to determine whether the Applicant had been constructively dismissed, that is to say:

(i) whether the Respondent had acted in repudiatory breach or breaches of the contract of employment, identifying the relevant term(s) breached and the nature of the breach

(ii) if so, whether the Applicant left in response to that breach or breaches

(iii) whether the Applicant waived the breach or breaches.

28. Secondly, if a finding of constructive dismissal is made, what was the reason for dismissal? Mr Grundy tells us that the Respondent advanced no potentially fair reason for dismissal under section 98(1) or (2) ERA. It follows that either the Respondent had 'no reason' for dismissal, in which case the dismissal is unfair under the provision of section 98 and compensation, by way of a compensatory award, is subject to the statutory cap, or, as the Applicant would have it, the onus of disproving the inadmissible reason being on the Respondent, the Respondent's reason or principal reason for dismissal was that he had made a protected disclosure, in which case the dismissal was automatically unfair under section 103A and compensation for that dismissal is unlimited (section 124(1A)).

The Appeal

29. At the outset of his submissions before us Mr Grundy expressly abandoned grounds 2 and 3 of the Respondent's grounds of appeal. The first of those grounds challenged as perverse certain findings of fact made by the Employment Tribunal; the second contended that the Employment Tribunal failed to make relevant findings of fact.
30. In these circumstances, on the appeal (we leave aside for the moment the cross-appeal) we approach the matter on the basis that the Employment Tribunal's findings of fact were sufficient and permissibly reached. We would add that, having considered the Employment Tribunal's lengthy reasons, extending to some 25 pages of close type-script, those reasons provide a clear and careful outline of the factual story, allowing this Appeal Tribunal to obtain a feel for the way in which the evidence emerged at this 4 week hearing and the view which the fact-finding tribunal took of the witnesses and the evidence which they gave. Thus the primary facts are established.
31. Where we think Mr Grundy has grounds for argument on appeal is in the style of the Employment Tribunal's reasons. What is required, in Meek – compliant Employment Tribunal reasons (to use Sedley LJ's expression in Tran v Greenwich Vietnam Community [2002] IRLR 735, paragraph 17) is a reasoned decision, that is a set of reasons which, in telling the parties why they have won or lost, explains how the tribunal reached its conclusions on the relevant issues before it from its findings of fact. For this purpose, a set of reasons which (a) identifies the issues (b) sets out the tribunal's relevant findings of fact (c) states the law which it must apply and (d) applies the legal principles to the facts as found so as to explain its reasoning process, will usually obviate the need for the parties to be put to the inconvenience, stress and expense of a rehearing, particularly in a long case such as the present.
32. On the other hand Mr Butler is also right to submit that the question for this Employment Appeal Tribunal on appeal is whether, by their reasons, the Employment Tribunal have amply demonstrated that they have identified the issues, found the facts, correctly applied the law and produced reasoned conclusions. It is not simply the style of an Employment Tribunal's decision which is to be judged on appeal; it is its substance.
33. It is with these observations in mind that we turn to the Respondent's grounds of appeal. In doing so we should record our gratitude to both advocates in this case, each of whom appeared below, for their economy of presentation. At a directions hearing before a division presided over by HHJ McMullen QC on 31 January 2003 the advocates agreed to limit their respective submissions at this full hearing to a maximum of 2 hours. They have remained within those time limits. The result is not that the parties have been prevented from fully developing their cases. On the contrary, the effect has been to concentrate the mind and to present the rival arguments in a way which is both digestible and focussed for the greater assistance of this Tribunal.
34. Having considered those arguments we think that the most useful way to approach the appeal is to return to the issues before the Employment Tribunal; to identify the relevant findings of the Employment Tribunal on those issues and in doing so, to consider whether the Respondent succeeds, wholly, or in part, in causing us to discern any error or errors of law in the Employment Tribunal's decision.

Victimisation

(1) Did the Applicant make one or more protected disclosures?

35. The Employment Tribunal found that (i) the 4 memoranda written by the Applicant and Mr Humphreys to members of the Council were protected disclosures within the meaning of section 43G ERA. (ii) that a challenge by the Applicant to Mr Loveridge at the ultra vires panel meeting on 20 August 1999 was a protected disclosure under section 43C. (iii) that the numerous disclosures made by him to the District Auditor were protected disclosures under section 43F. (iv) that the letters sent to outside bodies in June 2000 were section 43G disclosures.
36. Those disclosures were made by the Applicant in good faith holding a reasonable belief as required by the Act.

(2) Did the Applicant suffer some identifiable detriment?

37. He did; he did not receive the support from the Respondent to which he was entitled either in health or in sickness (reasons paragraph 97).

(3) Had the Respondent done an act or omission by which the Applicant had been subjected to that detriment?

38. It had. It had not provided the support to which he had been entitled.

(4) Had that act or omission been done by the Respondent on the ground that he had made the identified disclosures?

39. As to disclosures (i) and (ii) above they were, but not the disclosures to the District Auditor (iii). The disclosures to outside bodies (iv) played a part in the detrimental treatment afforded to the Applicant by the Respondent, although not a major part (reasons paragraph 100).
40. It follows, in our judgment, that the Tribunal made all necessary findings to complete the statutory tort under section 47B. We turn then to Mr Grundy's challenge to those findings.

(i) The 4 memoranda.

41. Mr Grundy submits that the Employment Tribunal fell into error in failing to consider whether or not, individually, each of those memoranda fell within section 43G; alternatively they reached a perverse conclusion in finding that they did.
42. The Employment Tribunal found (reasons paragraph 100) that the memoranda to Council members, not being the Applicant's employer, fell within section 43G he having earlier raised the matters there contained with senior management who could be regarded as his employer under section 43C. We see no good reason for the Tribunal to distinguish between the individual memoranda making up the sequence of 4 in May and June 2000. In these circumstances we reject these grounds of appeal.

(ii) The Employment Tribunal confused the 2^nd and 3^rd stages of the Knight analysis, failing to ask themselves what was the detriment and what was the act or omission on the part of the Respondent. We do not think that there was any confusion in the minds of the Employment Tribunal. The 2 stages in the enquiry merged on the facts. The detriment suffered by the Applicant was the Respondent's failure to provide proper support to him; that lack of support constituted the relevant omission.

(iii) Causation

43. The Employment Tribunal clearly find (reasons paragraph 97) that the 'detriments' (that is, the failure to provide support) were omissions on the grounds of his protected disclosures which the Employment Tribunal found to be causatively material. The Applicant had become a problem and an embarrassment to the senior officers.

Limitation

44. The Employment Tribunal deal with the issue of limitation, arising in the victimisation complaint only, at paragraph 98 of their reasons. They found that the Respondent's course of conduct in failing to give support to the Applicant began after the ultra vires panel meeting held on 25 August 1999, at which the Applicant made a relevant protected disclosure under section 43C, and continued up until termination of the employment. There was a series of similar failures, the last of which fell within the last 3 months before the Originating Application was presented, for the purposes of section 48(3)(a) ERA.
45. Mr Grundy submits that in so finding the Employment Tribunal failed to engage with the near impenetrable language of section 48(4)(b), which provides, for the purposes of sub-section (3) -

"(b) a deliberate failure to act shall be treated as done when it was decided on; and, in the absence of evidence establishing the contrary, an employer shall be taken to decide on a failure to act when he does an act inconsistent with doing the failed act or, if he has done no such inconsistent act, when the period expires within which he might reasonably have been expected to do the failed act if it was to be done."

46. Not, we have to say, the Parliamentary draftsman's finest hour. Happily it is unnecessary to attempt a construction of section 48(4)(b) since, on the facts of this case, as Mr Butler submits, the last relevant omission in the series to which the Employment Tribunal refer at paragraph 98 was the decision by Mr McGreevy, communicated to the Applicant by letter dated 23 February 2001, not to reinstate his full sick pay which had ended on 9 January. Accordingly, in our judgment, the Employment Tribunal was entitled to conclude that the victimisation claim was not time-barred.

Constructive Dismissal

47. The first question for the Employment Tribunal was what was the relevant contractual term. We accept Mr Butler's submission that the primary finding by the Employment Tribunal related to the implied term of mutual trust and confidence.
48. In what way was it breached? The Employment Tribunal answered that question by reference to the sequence of events as a whole continuum. The detriments complained of (the lack of support) feed the constructive dismissal claim in a cumulative way amounting to a very clear breach of the implied term. (reasons paragraph 97).
49. Mr Grundy submits that the Employment Tribunal also found that the Respondent was in fundamental breach of an express term of the contract in failing to pay full sick pay after 9 January 2001. That is not how we read paragraph 93 of their reasons. They put their finding of breach on the basis of the implied term of mutual trust and confidence.
50. In finding that a fundamental breach of that term had been made out they applied the 'last straw' principle to be found in Lewis v Motorworld [1986] ICR 157. It was the Respondent's refusal, through Mr McGreevy, to reinstate full sick pay in the exercise of their discretion which was the last straw entitling the Applicant, looking at the Respondent's conduct as a whole as set out in the Employment Tribunal's findings of fact, to leave treating himself as constructively dismissed.
51. Further, he left in response to the breach, the refusal to reinstate full sick pay being the trigger event. We note the Employment Tribunal's express finding of fact, based on the evidence of Christine Roberts, the Applicant's Trade Union representative, that such refusal was the exception rather than the rule (reasons paragraph 95). That refusal was all of a piece with the Employment Tribunal's judgment overall that because the Applicant was seen as a problem by senior management following his earlier disclosures he was not given proper support, particularly after going off sick, and the refusal to exercise discretion in favour of paying full sick pay after the period to which he was strictly entitled under the terms of the contract of employment, cumulatively went to undermine his necessary trust and confidence in the Respondent.

Unfair Dismissal

52. What was the reason or principal reason for dismissal? It seems to us perfectly clear from the Employment Tribunal's reasons as a whole that they concluded that the reason why the Respondent was in repudiatory breach of the implied term of mutual trust and confidence was their perception of the Applicant as a problem because he had made the relevant protected disclosures. From this state of affairs they went on to conclude that it was those protected disclosures made by the Applicant which were the reason or principal reason for dismissal. It was a section 103A dismissal. That the Employment Tribunal has not spelt out its finding in these simple terms does not, in our judgment, vitiate its decision on this complaint. All necessary findings and reasoning appear in the reasons of the Employment Tribunal read as a whole leading to the conclusion which it reached.
53. In these circumstances, as a matter of substance, we accept the case advanced before us by Mr Butler, that on final analysis this Employment Tribunal reasons are both Meek-compliant and disclose no error of approach.
54. The appeal is dismissed.

Cross Appeal

55. Since the Applicant claims no different relief in the cross-appeal, having dismissed the Respondent's appeal it becomes largely academic.
56. However, in deference to the argument advanced by Mr Butler and with a view to future remedies proceedings we shall deal shortly with the point which he raises.
57. He challenges the Employment Tribunal's observation at paragraph 97 of their reasons that the Applicant's illness, assuming it to be proved to have resulted from the Respodent's conduct, was a consequence of the detriment suffered (the Respondent's failure to provide support to the Applicant) not the detriment itself. We agree with the Employment Tribunal's analysis. Having found that the statutory tort of victimisation has been completed, we think permissibly, the question for the Employment Tribunal at a remedies hearing will be what loss has the Applicant suffered as a result of the Respondent's breach of section 47B; that loss may include injury to feelings, itself reflected in attributable psychiatric sequelae.
58. In these circumstances we shall also formally dismiss the cross-appeal.