United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR DARREN FINLAY (of Counsel) Instructed by: Messrs Sharpe Pritchard Solicitors Elizabeth House Fulwood Place London WC1V 6HG
For the Respondent	MR COLIN BOURNE (of Counsel) Instructed by: Messrs Thompsons Solicitors Arundel House 1 Furnival Square Sheffield S1 4QL

SUMMARY

Contract of Employment

Construction of agreement relating to sick pay and quantum of damage.


 


HIS HONOUR JUDGE BIRTLES

Introduction

1. These are two conjoined appeals from decisions of the same Employment Tribunal sitting in Leeds. The first decision ("the liability decision") was heard on 28 January and 14 February 2003. The reserved decision of the Tribunal was entered in the Register and sent to the Parties on 21 March 2003. The second decision ("the remedies hearing") was heard on 14 and 15 August 2003. The reserved decision of the Tribunal was entered in the Register and sent to the Parties on 29 September 2003.
2. The Chairman was Mr I K R Brown and the members were Mr I L Graham and Mr J Button.

The Employment Tribunals Decisions

3. The liability decision decided that the Respondent had breached the Applicant's contract of employment. Following a directions hearing on 2 September 2002 the remedies hearing ordered that the Respondent pay the Applicant the sum of £9,590 damages.

The Liability Decision

The Material Facts

4. The liability decision was concerned with a number of allegations by the Applicant that the Respondent had breached his contract of employment in three ways. It is not necessary to deal with two of those three alleged breaches of contract because they are not the subject of appeal.
5. Suffice it to say that Mr King commenced employment as a fireman with the City of Leeds Fire Brigade on 21 January 1972. The Fire Brigade subsequently changed its name to the West Yorkshire Fire and Civil Defence Authority ("the Fire Authority"). He served with the Fire Authority until his employment was terminated on medical grounds on 15 March 2002. Following allegations both by and against him Mr King reported sick on 3 February 1999. He was diagnosed to have a depressive illness and did not subsequently return to work.
6. This appeal is concerned only with the alleged breach of contract relating to reduction in Mr King's sick pay. The relevant material facts in relation to this are set out in paragraphs 8-16 of the decision:

"8. On 13 July 1999, Personnel Department wrote to Mr King informing him that on 4 August his six months full pay sickness entitlement would come to an end and that from .5 August, based on the decision of ADO Arbuthnot, he would receive only half-pay plus his statutory sick pay. On 19 July, Mr King notified ACO Arbuthnot that he wished to appeal against that decision. The grounds of the appeal were partly financial but also, as Mr King stated in his letter, "most importantly" because he was currently diagnosed as suffering from depression due to work-related problems. On 21 July, ACO Arbuthnot wrote to Mr King to inform him that he had reconsidered the case in the light of the information provided by Mr King but his decision remained the same. However, he said that he would forward Mr King's letter to be considered as an appeal by the Authority. The appeal was to be carried out on the basis of written submissions.

9. In a letter dated 5 August 1999 to the Appeal Committee Administrator, Mr King reiterated that his continued absence from work was due to depression brought about as a direct result of extra stresses imposed by work-related problems and that it should therefore be considered as "sickness arising out of authorised duty" and not "normal sickness". He stated that his claim would be supported by his GP, by his Consultant and by the report of the Brigade Medical Adviser. At that time the latest report of the Brigade Medical Adviser was dated 6 May 1999. This report indicated that Mr King was considered unfit for any type of work until his next medical appointment with the BMA but did not touch upon the question as to whether Mr King's depression was work-related. DO Laird's "Management Case" submitted to the Appeal Panel stated that there was no evidence to support Mr King's contention in this respect and that there was "no reason in this case to deviate from the current policy".

10. The Authority Panel dismissed Mr King's appeal on 27 August and, in response to Mr King's request, the Committee Administrator wrote to Mr King on 8 September setting out the reasons for the dismissal of the appeal. The letter stated "the Panel considered all aspects raised in the documentation, most carefully, but since the sickness did not arise out of authorised duty, the Members felt unable to uphold your appea1. That decision is final."

11. Around this time, ACO Arbuthnot attempted to arrange a meeting with Mr King to discuss his grievances but Mr King was not prepared to attend. On 6 December 1999, the Brigade Medica1 Adviser proposed that he seek to obtain agreement from Mr King's General Practitioner regarding measures suggested by the Fire Authority's management to resolve the situation, principally by a return to work on appropriate duties. Mr King's GP responded to the Brigade Medical Adviser on 14 October 1999. He stressed that the view of his colleague, who had been attending Mr King but who had recently left the practice, was that Mr King's depression was work-related. The same opinion was given in the GP's statement in a sick note provided on 4 October 1999.

12. On 13 January 2000, Personnel Department informed Mr King that his entitlement to half-pay would come to an end on 3 February 2000. Mr King appealed against this decision. The appeal was heard on 17 March 2000 and was dismissed without reasons being given.

13. ACO Arbuthnot stated in evidence to the Tribunal that in reaching his decision regarding Mr King's sick pay reductions, he took into account the available medical evidence and advice from the Brigade's Medical Adviser, which did not indicate that Mr King was absent due to an illness arising out of authorised duty. In cross-examination he said:

"I did not exercise discretion to leave pay at a higher level because [Mr King] did not qualify as [he] did not suffer from any illness or injury attributable to [his] work."

14. The terms relating to payment during sick-leave are set out in Appendix A of the National Joint Council Conditions of Service ("the Grey Book"). Paragraph 1 (1) states:

"A member of a brigade on authorised sick leave shall be entitled to full pay for six months in any one year period. Thereafter the fire authority may reduce pay to whatever level they consider appropriate in the circumstances subject to a maximum reduction to half pay for the first six months."

Paragraph 1 (2) states:

"A member of a brigade on authorised sick leave as a result of an illness or injury arising out of authorised duty shall be entitled to full pay for one year. Thereafter the fire authority may reduce pay to whatever level they consider appropriate in the circumstances subject to a maximum reduction to half-pay for the first six months."

Paragraph 8 (1) of Appendix A states:

"Where there is a divergence of opinion between the brigade medical adviser and a member's general practitioner (or other medical adviser) over the member's fitness for duty, or the question of whether an illness or injury has arisen out of authorised duty, the fire authority shall-refer the matter to an independent medical referee drawn from those who sit on the boards that consider medical appeals under the Fire-Fighter's Pension Scheme."

15. It was apparent from Mr King's letters to the Fire Authority, the GP's statement on sickness notes and in the GP's letter to the Brigade Medical Adviser dated 14 October 1999, that Mr King's GP was of the opinion that Mr King's depressive illness was work-related. In his medical reports at the relevant times, the Brigade Medical Adviser did not directly deal with this point. However, DCFO Arbuthnot said in his evidence to the Tribunal:

"I took into account that the available medical evidence and advice from the Brigade Medica1 Adviser did not indicate that Mr King was absent due to an illness arising out of authorised duty - indeed, it was quite clear to me that Mr King's problems were in many respects domestic in nature…"

In the event, the Fire Authority did not refer the matter to an independent medical referee to determine the issue.

16. The same issue was eventually determined on 2 October 2002 when a Board of three medical referees met to consider whether or not Mr King's disablement had been occasioned by a qualifying injury for the purposes of the Firemen's .Pension Scheme. The Board's decision was that Mr King's Brigade service neither caused nor substantially contributed to his medical condition such that it should be designated a Qualifying Injury (or Condition)."

7. All of Mr King's grievances were heard by a Members' Panel on 18 January 2001 and 25 – 26 2001. All of the grievances were dismissed. By December 2001 the Respondent's doctor stated that the Applicant's disablement from duties was likely to be permanent which raised the prospect of medical retirement. On 15 March 2002 the Applicant retired on grounds of incapacity / ill health. That is the effective date of termination. On 25 October 2002 an independent medical review in relation to the Applicant's appeal for an enhanced pension through injury on service was that his sickness was not related to service: EAT bundle pages 141-142.

The Employment Tribunal Decision

8. The Employment Tribunal's decision is set out at paragraphs 30-32 of its decision. They said this:

"30. The evidence given by DCFO Arbuthnot and the reason given in the correspondence for the dismissal of Mr King's appeal against the reduction of his salary to half-pay indicates a misunderstanding of the wording of the Brigade's Sick Leave provisions (documents 333 to 336). DCFO Arbuthnot said that he did hot exercise discretion to leave Mr King's pay at the higher level because he did not qualify on the grounds that he did not suffer from an illness or injury attributable to his work. The Appeal Panel, giving its reason for dismissing Mr King's appeal said: "since the sickness did not arise out of authorised duty, the Members felt unable to uphold your appeal."

As stated above, paragraph 1 (1) of the Sick Leave provisions states:

"A Member of a Brigade on authorised sick leave shall be entitled to full pay for six months in anyone year period. Thereafter, the fire authority may (the Tribunal's emphasis) reduce pay to whatever level they consider appropriate in the circumstances subject to a maximum reduction to half- pay for the first six months."

Paragraph 1 (2) has similar wording in respect of a member of the Brigade on (authorised sick leave as a result of an illness or injury arising out of authorised duty save that there is entitlement to full pay for one year. It is clear that the Fire Authority may reduce a Brigade member's pay by no more than half in the first year of sickness after six months if the illness or injury has not arisen out of authorised duty. The reduction will depend on what level the Fire Authority of "consider appropriate in the circumstances". Contrary to the statement made by DCFO Arbuthnot and the Appeal Panel there is no requirement to reduce pay simply because the sickness did not arise out of authorised duty. Although the words "may reduce pay" give the Fire Authority a right to do so, the words "to whatever level they consider appropriate in the circumstances "require that the Fire Authority consider the circumstances, including Mr King's written representations. The statements of both DCFO Arbuthnot and the Appeal Panel demonstrate that "the circumstances" were not given due consideration "since the sickness did not arise out of authorised duty". This failure amounts to a breach of the sick leave provisions.

31. The evidence indicates that the Fire Authority had taken the view that the Brigade Medical Adviser's opinion at the relevant time of the salary review was that Mr King's illness had not arisen out of authorised duty. On the other hand, Mr King's letters to the Fire Authority, at least one sick note and, on 14 October 1999, Mr King's GP's report, all showed that Mr King's GP felt that Mr King's illness at this time had arisen out of his authorised duty.

32. As we have seen, paragraph 8 (1) of the Sick Leave provisions states:

"Where there is a divergence of opinion between the brigade medical adviser and a member's general practitioner (or other medical adviser) over the member's fitness for duty, or the question of whether an illness or injury has arisen out of authorised duty, the fire authority shall refer the matter to an independent medical referee drawn from those who sit on the Boards that consider medical appeals under the Fire-fighter's Pension Scheme."

Such a reference is stated as a mandatory requirement - "shall refer". This was not done and the Tribunal has concluded that such failure amounts to a breach of the sick leave provisions. The Tribunal has read the decision of the Board of Medical Referees .dated 2 October 2002 (document 306 to 322) and it may be unlikely that a different conclusion would have been reached by an independent medical referee appointed under the provisions of paragraph 8 (1). The consequences of both these breaches in terms of remedy will be a matter for a further Tribunal hearing."

The Remedies Decision

9. The Employment Tribunal heard evidence and submissions and made the following findings:

"3. In his evidence, ACO Hughes provided for the Tribunal a summary of those cases occurring since May 1998 where the Fire Authority's discretion had been exercised to extend sick pay at the higher level beyond the six months period. There were apparently 9 cases out of some 400 considered in that period. Mr Hughes divided the nine cases into four categories, namely terminal illness (2 cases), poor quality of life (1 case), self-help, i.e. payment for medical treatment to speed recovery (1 case), and short-term bridging extensions, i.e. where an early return to duty or retirement on ill-health grounds is likely (5 cases). Mr Hughes maintains that each case was considered on its individual merits, and that in the case of Mr King it was clear that there were no special or unusual circumstances that would justify the exercise of the Fire Authority's discretion in his favour.

4. Mr King has argued that the Respondent did not give proper consideration to his personal circumstances, to the nature and seriousness of his illness, to the medical evidence, to its own duty of care, to the appeal from his Member of Parliament that special circumstances existed in his case and to the request by the Fire Brigade's Union in February 2000 to restore his full salary after agreement had been reached to carry out a new investigation into his grievances.

5. A Tribunal may not substitute its own view of how discretion should have been exercised for that of the employer. However, in this case the Tribunal found (paragraph 30 of the substantive Decision) that, contrary to its sick leave provisions, the Fire Authority did not consider the circumstances of Mr King's case when deciding to reduce his pay. No medical evidence was sought by the Fire Authority as to what effect, if any, on Mr King's condition the reduction in pay might have. Indeed, approximately two months after making the initial decision to reduce Mr King's pay, ACO Arbuthnot wrote to the Brigade Medical Advisor:

"Having studied the medical review reports compiled by yourself, it is impossible for me to conclude that this is a bone fide medical case..."

6. In his submission to the salary reduction appeal panel in August 1999, Mr King referred to the various problems that his wife had suffered, which had resulted in her being off work for the previous 21 months and during that time being treated by her doctor for depression. The management's case to the salary reduction appeal panel dated 16 August 1999 stated that:

"Whilst noting Station Officer King's wife's condition, it is not directly relevant to the salary reduction."

The Tribunal has concluded that it would be irrational for an employer to regard the circumstances of both earners in a household suffering from long-term sickness involving absence from work as irrelevant and as anything other than unusual circumstances. On the face of it those circumstances would meet the criteria for granting an extension of pay at the higher level suggested by the Respondent.

7. The appropriateness of the level of any reduction in pay and its timing would be influenced by medical and welfare opinions as to its effect. Those opinions were not sought. In quantifying the loss arising from the Respondent's breach, the Tribunal has had regard to the reasons put forward by the Respondent for other extensions of sick pay and their relative short-term purpose. In this case, any extension would need to allow time for enquiry into Mr King's medical and welfare circumstances and for the Respondent, preferably with Mr King's assistance, to prepare a firm plan of action for his return to work or otherwise.

8. The Tribunal is unanimous in its conclusion on the evidence that the Respondent failed to consider the circumstances relating to Mr King, as required by the Sick Leave provisions, before reducing his sick pay. It is only in respect of the calculation of the loss arising from the Respondent's breach, and specifically what period of time would have applied at the higher level but for the breach, that the conclusions of the Tribunal members have differed. The Chairman and one member consider that an extension of six months on full pay would have been found to be appropriate in the circumstances. Obtaining medical and welfare reports tends to be a slow process and, having regard to the history of this case, the identification of appropriate duties and preparation of an action plan were likely to take several months. The member in a minority on this point considered that the reports would be obtained and the action plan agreed within a much shorter period of some three months, particularly bearing in mind the short-term purpose for which the employer considered any such extension should be granted.

9. Taking the conclusion of the majority, an extension of sick leave by six months at full pay, would provide additional earnings for the Respondent of £9,590. The calculation of that figure was made by the Respondent and agreed by Mr King at the hearing. Whether or not the Respondent would have continued paying sick pay after the second six months period and at what level would have been dependent on the reports and the circumstances pertaining at that time. In light of the uncertainty the Tribunal has concluded that the further period of six months at half pay, which the Respondent allowed after the Applicant's initial six months absence, should remain to take effect following the extended period of six months at full pay."

The Amended Notice of Appeal

10. The Fire Authority appeals against both of those decisions. The amended Notice of Appeal has been supplemented by the Skeleton Argument and oral submissions of Mr Darren Finlay. We are grateful to him and to Mr Colin Bourne who appeared for the Respondent. The submissions were cogent and clear. In the event the Appellant has abandoned much of his Notice of Appeal and there are only two issues with which we have to deal.

Ground 1

11. The Appellant argues that the Employment Tribunal were in error / alternatively perverse to find that it had not given full consideration to the circumstances and not given full or any consideration as to whether to exercise a discretion to pay the Respondent more than half pay after 6 months or any pay after 12 months on sick leave, even though his sick leave was not related to an injury which arose out of his authorised duty: Employment Tribunal decision paragraph 30.
12. The Respondent submits that this appeal can only succeed if the decision of the Employment Tribunal was not a permissible option. Mr Bourne referred us to Neale v Hereford and Worcester County Council [1986] ICR 471 and Piggott Brothers & Co Ltd v Jackson [1992] ICR 85. To that we would add the recent decision of the Court of Appeal in Yeboah v Crofton [2002] IRLR 634. It is sufficient to cite a short passage by Mummery LJ in the Yeboah case, where he says this about perversity at paragraph 93:

"93. Such an appeal ought only to succeed where an overwhelming case is made out that the employment tribunal reached a decision which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. Even in cases where the Appeal Tribunal has 'grave doubts' about the decision of the Employment Tribunal, it must proceed with 'great care': British Telecommunications plc v Sheridan [1990] IRLR 27 at paragraph 34."

13. In this particular case we agree with the submissions of Mr Finlay. In our judgment the liability decision of the Employment Tribunal was perverse for the following reasons:

(a) Mr Arbuthnot had said (as noted in paragraph 30 - core bundle page 9) that pay is normally reduced if the sickness did not arise out of authorised duty but did not state that this was absolute and conceded a discretion to extend existed. There was no evidence that he had shut his mind to the possibility of a voluntary extension. He said in cross-examination by Mr King "Your case had no merits to exercise the discretion differently."

(b) The documents at pages 101 - 123 of the hearing bundle relating to that issue and Mr King's internal salary reduction appeal show that the main basis of his argument was that he felt entitled to sick pay because he felt his injury did arise out of authorised duty and that he was entitled to sick pay. That aspect of his appeal did not succeed in any event. The only other feature he raised in argument for the exercise of a discretion was his 'financial circumstances' and the fact that his wife was also suffering depression (pages 106 - 108 of the bundle). A letter from his MP at page 121 also put the point on his behalf that 'adding financial stress to the individual will do nothing to help recovery'. Both Mr King and his MP on his behalf did therefore request the appeal panel to grant him extended sick pay irrespective of whether his condition arose out of authorised duty and therefore the internal appeal panel knew of his arguments when rejecting his appeal. But he did not go into any greater details about his or his wife's circumstances and the Respondent therefore had to exercise their discretion based only on what information they did have at the time.

(c) The documentation at page 113 states that the Appellant's case presented in his internal appeal was that "The Fire Authority maintains a fair and consistent approach on the issue of sick pay and there is no reason in this case to deviate from the current policy". They thus recognised the existence of the discretion but found no arguments or reasons to exercise it in the Applicant's favour. During the remedies hearing and at paragraph 6 of the Extended Reasons, the Tribunal has observed that the management's case at the internal appeal hearing had said "whilst noting Station Officer King's wife's condition, it is not directly relevant to the salary reduction" - The Tribunal were therefore wrong / perverse to conclude that the Appellant had not given consideration to the Applicant's circumstances and / or had failed to exercise its wider discretion at all. In fact the Appellant had noted the submissions with regard to the financial hardship of the Applicant and his wife but had decided that they were not relevant reasons. This was reinforced by the evidence of Mr Hughes at the remedies hearing that as by definition all, persons who have reduced pay will suffer financial hardship, financial implications were not something the Appellant would consider.

(d) At page 116 the Tribunal noted that the appeal panel had considered "all aspects raised in the documentation." The Tribunal confused the fact that the Applicant had not pressed any particular factual case for the exercise of a discretion in his favour with the issue of whether the Appellant had considered the exercise of that discretion. The evidence as presented above is conclusive that the Appellant did recognise the existence of a discretion - but did not find any merits / arguments / evidence put forward by Mr King to exercise any discretion in his favour or depart from the contractual provisions which saw his sick pay end. The Applicant did not give any further details of his financial circumstances or hardship - other than to note in his letters that his wife was sick as well. It is submitted that the Appellant would need much clearer particulars to understand what the financial / medical circumstances were or to conclude that those financial / medical circumstances were something unusual. In fact he produced no medical evidence and no financial evidence, nor made any submissions of the impact upon him or his wife for the Appellant to consider.

Ground 2

14. The second ground of appeal relates to the remedies hearing and in essence alleges that the Employment Tribunal substituted its own view of how the discretion should be exercised for that of the Appellant. The law is clearly set out in the decision of Burton J in Clark v Nomura International plc [2000] IRLR 766 at paragraph 40 where he said this:

"40. Quite apart from the additional contractual straitjacket for the discretion in this case, the employer's discretion is in any event, as a result of the authorities, not unfettered, as both sides have accepted to be the law in this case. Even a simple discretion whether to award a bonus must not be exercised capriciously (United Bank Ltd v Akhtar [1989] IRLR 507 EAT, Clark v BET plc [1997] IRLR 348 and Midland Bank plc v McCann 5/6/1998 unreported EAT) or without reasonable or sufficient grounds (White v Reflecting Road Studs Ltd [1991] ICR 733 EAT, and McLory v Post Office [1992] ICR 758). I do not consider that either of these definitions of the obligation are entirely apt, when considering whether an employer was in breach of contract in having exercised a discretion which on the face of the contract is unfettered or absolute, or indeed even one which is contractually fettered such as the one here considered. Capriciousness, it seems to me, is not very easy to define: and I have been referred to Harper v National Coal Board [1980] IRLR 260 and Cheall v APEX [1982] IRLR 362. It can carry with it aspects of arbitrariness or domineeringness, or whimsicality and abstractedness. On the other hand the concept of "without reasonable or sufficient grounds" seems to me to be too low a test. I do not consider it is right that there be simply a contractual obligation on an employer to act reasonably in the exercise of his discretion, which would suggest that the court can simply substitute its own view for that of the employer. My conclusion is that the right test is one of irrationality or perversity (of which caprice or capriciousness would be a good example) i.e. that no reasonable employer would have exercised his discretion in this way. I canvassed this provisional view in the course of argument with both counsel, and neither appeared to dissent, and indeed Mr Temple QC in his closing submissions expressly adopted and used a test of irrationality. Such test of perversity or irrationality is not only one which is simple, or at any rate simpler, to understand and apply, but it is a familiar one, being that regularly applied in the Crown Office or, as it is soon to be, the Administrative Court. In reaching its conclusion, what the court does is thus not to substitute its own view, but to ask the question whether any reasonable employer could have come to such a conclusion. Of course, if and when the court concludes that the employer was in breach of contract, then it will be necessary to reach a conclusion, on the balance of probabilities, as to what would have occurred had the employer complied with its contractual obligations, or, as Timothy Walker J put it in Clark v BET plc, assess, without unrealistic assumptions, what position the employee would have been in had the employer performed its obligation. That will involve the court in assessing the employee's bonus, on the basis of the evidence before it, and thus to that extent putting itself in the position of the employer; but it will only do it if it is first satisfied, on the higher test, not that the employer acted unreasonably, but that no reasonable employer would have reached the conclusion it did acting in accordance with its contractual obligations, and the assessment of the bonus then of course is by way of an award of damages."

15. Unfortunately, this decision was not cited to the Employment Tribunal. In our judgment paragraphs 3-6 of the Employment Tribunal decision on remedies does clearly substitute its discretion for that of the employer. The Tribunal overrode the evidence of the Appellant as to how the discretion would be exercised and declared that irrational. At paragraph 6 of its remedies decision the Tribunal state that any reasonable employer would be irrational not to have regard to the circumstances of both earners in a household suffering from long-term sickness as anything other than unusual circumstances and thus meeting the criteria for an extension of pay. In our judgment that finding flies in the face of Clark and is perverse for the following reasons:

(a) In context the Appellant's sick pay scheme is extremely generous and considerably more generous than minimum statutory sick pay entitlements and sick pay schemes found in the private sector. In context to grant sick pay for a further 6 months beyond an already generous 12 months is unusual. If the Tribunal's findings reflecting on 'an employer' mean all reasonable employers would be expected to offer 12 months full pay and 6 months half pay to persons on long term sick who have a spouse or partner that is also on long term sick - then the implications of that finding / observation are wide and not supported by adequate evidence or reasoning.

(b) Generally the fact that the Respondent's wife was also on long term sick should not, have been regarded - in and of itself - as so special or unusual as to demand the exercise of a discretion in his favour. The parties were both in receipt of benefits and the Respondent's wife was rendered sick in the long term following car accidents for which she was pursuing compensation. The Respondent provided no evidence either to the Appellant or to the Tribunal of actual financial hardship. If his wife had interim payments or was ultimately compensated for her loss through the claims pursued then there may have been no actual or long-term hardship. Nor was there any medical information that the lack of full pay might make the Respondent's wife worse. What was her / their income? What were their expenses? What did she receive in compensation and when? What savings did they have?: all questions to which no answers were given.

(c) As an extension of that argument everyone on long-term sickness not earning as they did before - suffers hardship. Those with dependents, or a partner that does not work will be in the same or worse category. Those who live alone may also be worse off. If circumstances giving rise to financial hardship were a criteria that all employers must consider - and not just on the basis of whatever information the Respondent puts forward, but by making enquiries of their own - and which should lead to them making discretionary or ex gratia payments on the basis of need - then employers would be fulfilling a duty extending beyond the normal, employer / employee relationship (see also the dicta of Lord Rodger of Earlsferry Barber v Somerset CC [2004] UKHL 13 at paras 32- 34). Further if financial hardship is a mandatory criteria to consider what about those persons with heavy financial commitments, such as a high mortgage or school fees? Which sorts of hardship are more meritorious than others? And of those with disabled children or partners is that alone a criterion for sympathy irrespective of whether or not there is also financial hardship?"

(d) The Tribunal failed to take into account any counterbalancing arguments of the Appellant. Mr Hughes - at the remedies hearing - gave evidence that as well as not perceiving any unique features of Mr King's case - his refusal to engage with the Appellant (until his pay had been reduced to half pay) led the Appellant to believe that if sick pay had been extended there would never have been any resolution (or delayed resolution) to Mr King's continued absence - and this was a good reason not to extend sick pay in the circumstances (see also page 120 - Dr Lloyd's view corroborates the impression of non co-operation).

(e) The Tribunal's subsidiary finding (para 5 remedy hearing extended reasons) that the Appellant should have sought evidence as to any effect on Mr King's condition that a reduction in his pay might have had upon him - was wrong. Anyone who is on long term sick and reduced pay will be adversely affected, will suffer hardship, and that may make any physical, emotional or psychological symptoms worse. If the Respondent wished to submit any grounds for the exercise of a discretion in his favour the burden would be on him to set out all the reasons for any such decision and provide whatever evidence he wanted the Appellant to consider - not for the Appellant to make detailed subjective enquiries in every case itself. However, the Appellant did have the reports of Dr Lloyd (Document Bundle pages 110 arid 124 to 126) available for the internal appeal panel to consider.

(f) The Appellant gave evidence of the four areas where it have made discretionary / ex-gratia extensions to pay in the past: these were summarised in paragraph 3 of the extended reasons and in Mr Hughes evidence [p84]: (the terminally ill, those who are bed ridden or with poor quality of life, those who are demonstrating a degree of self help and those demonstrating an early return to work is likely). None of those categories were apposite to this Respondent - and there is no residual claim for implied contractual entitlement based on the way past discretions had been exercised.

(g) The Tribunal did not adequately reason or explain why it found the Appellant's existing criteria / pattern for the exercise of discretionary remedies to be inadequate or perverse: although they must impliedly have thought so to make a finding of irrationality.

Other Matters

16. In the course of his submissions Mr Bourne made an interesting submission as to the proper construction of paragraphs 1 (1) and 1 (2) of Appendix A of the National Joint Council Conditions of Service ("the Grey Book"). In effect he submitted, on its true construction, those paragraphs meant that full pay continued indefinitely unless and until the Fire Authority took action to reduce the pay. That submission was not put to the Employment Tribunal and is not contained in any cross-appeal. It is not necessary for us to decide it. We do not do so and express no view upon it.

Conclusion

17. For these reasons these appeals are allowed and the matter is remitted to a fresh Employment Tribunal.