United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR C MOIR (Representative)
For the Respondent	No appearance or representation by or on behalf of the Respondent

SUMMARY

Practice & Procedure: Bias, Misconduct, and Procedural Irregularity

Tribunal hearing unfair as a result of comment by Chairman which caused Appellant's representative not to pursue a line of cross-examination which was relevant to the case.


 


HIS HONOUR JUDGE ANSELL

1. This is the hearing of an appeal from a Decision of a Birmingham Tribunal sitting on 12 August 2004 who, in Reasons promulgated to the parties on 25 August 2004, unanimously decided that the Appellant was not unfairly dismissed. The appeal today has proceeded following a preliminary hearing before HHJ McMullen QC when the single issue to be considered was in relation to events which occurred on the afternoon of the first hearing when the Appellant's husband was in the process of cross-examining Mr Thompson, one of the two key witnesses on behalf of the Respondents.
2. Just briefly by way of background in terms of the actual facts, the Appellant, at the time of the hearing, was aged 58 and had been employed from February 1996 by Worcestershire County Council at a care home in Upton-upon-Severn where she looked after the day to day financial transactions at that home. In July 1999, the Respondents acquired the care home along with a number of others and her contract of employment was transferred to them under TUPE Regulations. The staff who had come from Worcestershire County Council had certain pension arrangements which were rather more beneficial than those of the new staff who were taken on. The Tribunal record that in March 2003, the Respondents were running at a loss, decided to make economies and one of the measures they proposed was to rationalise the contracts of all the employees so that pay and conditions would be standardised throughout their group; the Appellant was informed that she would lose her pension and that her pay would be frozen until the lower rates paid to the new staff caught up. Neither the Appellant nor her colleagues would accept this proposal and, as a result, they were all given 12 weeks' notice with an option to accept new contracts within the notice period. The Appellant decided not to accept, although her colleagues did so on the advice of the union, and she was dismissed on 5 October 2003. The dismissal was thought to be justified on the basis of some other substantial reason in that the financial pressures on the Respondents prevented them from maintaining her pre-existing contract and that she had unreasonably refused their offer of new terms and conditions.
3. The Tribunal found a number of facts about the financial situation of the Respondents. In paragraph 5, they said that

"As a consequence of the cost of this dramatic expansion in the respondent's business and as a result of the fact that local authority contributions no longer covered the full cost of patient care, the respondents ran into financial difficulties. As they were part of an Industrial Provident Society they faced restrictions on borrowing and we accept that their future was threatened".

At paragraph 6, the Tribunal continued

"The respondents were forced to eliminate the continuing losses and to do this they needed to make drastic economies. As part of their response they decided to standardise terms of employment…."

and in their conclusions in paragraph 17, the Tribunal said this:

"We accept the evidence of Mr Thompson and Mr Dryden that the respondents were in severe financial difficulty and we are aware that many other care homes had suffered in a similar way recently. We accept that in the respondent's case, they were precluded from receiving financial support from their parent organisation…..We accept that they had to make significant economies if they were to survive"

and the Tribunal concluded in that paragraph by finding that this was a substantial reason relating to the dismissal.

4. On the first afternoon of the hearing, the Appellant's husband who represented her then and has done so today with great skill and ability, if we may say so, for a layman, although a layman obviously with some considerable skill and experience, wanted to cross-examine Mr Thompson in relation particularly to the company's accounts to try and show the Tribunal that the suggestions that the company had a £1.5 million deficit and/or was running at a loss were just not made out if one considered the state of the company's accounts. We read from, firstly, the Skeleton Argument which sets out his case. He says this:

"7. Before Mr Thompson could answer, the cross-examination was interrupted by the Chairman, Mr Owen David stating: 'Did you want prove the Respondent's case for him?'

8. The Chairman then offered the following statement by way of explanation, namely that as the Respondent had elected not to offer any formal financial evidence in support of their case, then to allow any questioning of financial matters would only assist the Respondent".

It adds this comment that the Chairman made:

"…The Respondent would not be able to rely on a financial case to support its argument justifying the Appellant's dismissal".

5. As a result, Mr Moir, who was taken aback by what occurred, decided not to press on with the questioning about the accounts. We asked him why he did not, as perhaps some barristers would have done, challenge the Chairman's objections by suggesting that the cross-examination was effectively to disprove the contentions being advanced by the Respondents about their precarious financial position. Mr Moir replied that he was relying on the assurance from the Chairman that in effect the Respondents were not going to rely on a financial case to support its argument to justify dismissal.
6. He has produced a note which he claims he made at the time in handwriting and the note seems to refer to the incident which we have just described which says that if finance is not into written evidence, they cannot rely on a financial case to support dismissal. This assurance which he believes that he received from the Chairman impacted on his future conduct of the case because the following morning, when Mr Dryden was due to be cross-examined, Mr Moir again elected not to put to him accounts and made a statement that the majority of the issues that he wanted to address to Mr Dryden would not actually be questions but would be the subject of submissions which would be dealt with in his formal summing up. It therefore came as some surprise to the Appellant and her husband when, within the Decision, there were the findings that we have referred to in relation to the conclusions the Tribunal reached about the reasons for dismissal. The Chairman was asked at an earlier stage of this appeal to comment upon the grounds of appeal and specifically the incident that occurred on the first afternoon. In his first letter, which appears to be dated 3 December, the Chairman, through the clerk that responded, said this:

"At one point I did interrupt to say that there was little point in pursuing a line of questioning which only served to strengthen the Respondent's case"

and he then confirmed the comment that Mr Moir made on the following morning as to his reasons for not asking Mr Dryden any other questions. There was a later letter from the Chairman dated 17 June where, having looked at his notes, there is one point that he notes:

"No point in Mrs Moir establishing their case for them"

although he does point out, as indeed the solicitors for the Respondents point out - they are not here today – that Mr Moir did go on to ask some further questions of Mr Thompson in relation to some financial matters.

7. Neither the Chairman nor, indeed, the Respondents' solicitors have commented upon what we regard really as the most serious aspect of that intervention which is what was said to lead Mr Moir to believe that the financial information was not going to be used to support the dismissal. That is not commented upon by the Chairman, nor is it commented upon by the Respondents' solicitors.
8. At the end of the day, we really have to ask ourselves whether an impartial observer, looking at what had happened, would come to the conclusion that by reason of the Chairman's intervention, Mr Moir was effectively deflected and persuaded not to pursue a line of questioning which was relevant to an issue in the case. Clearly, one of the key issues in the case was the financial state of the company and their reasons for taking the decision to alter the terms of the older employees whom they had taken on and who had the more beneficial arrangements. Clearly, it seems to us that it was appropriate for Mr Moir to put some questions about the accounts. How far that would have taken him is not for us to say. There was other evidence from Mr Thompson and Mr Dryden as to financial affairs with the bank and the reasons for taking the decisions that they did, but clearly one of their arguments was that the company was in a precarious financial position and therefore the picture, as presented by the accounts, if it did present a more rosy and beneficial picture, seems to us to be an issue that he was entitled to put to the witnesses. It was not simply a matter of the Chairman saying that his questions had the risk of supporting the Respondents' case; it was the assurance that he received that financial information or financial reasons were not going to be used apparently as a basis for supporting dismissal. We do not quite understand that comment by the Chairman since financial information or the financial position of the company was clearly the basis for the Respondents taking the position.
9. We have to accept, on face value, that the Appellant's representative was deflected from a course of action that he should have been allowed to pursue. The fact that he did not pursue it further with Mr Dryden is understandable in the context of the assurance he believes he received the previous afternoon. Therefore, we are left with certainly an impression that this hearing, in particular, the intervention of the Chairman was not fair in all the circumstances and would certainly lead an outside observer, using the well established test in Porter v Magill [2002] 1 AE 465 to say that there had not been a fair hearing and that the Appellant had been effectively deprived of pursuing what was an important line of cross-examination with one, if not two, of the Respondents' witnesses. We do not know whether it would have led anywhere. There was other information in the statements. It may well be at the end of the day, that the Respondents would have established the case which the Tribunal found had been established but on the way to establishing that case, there certainly has to be a fair procedure and we are not satisfied that that was followed in this case. It seems to us, therefore, that the only course would be for this decision to be set aside and for there to be a re-hearing. Not a re-hearing on the whole case, we should add, but simply a re-hearing on the issue of whether or not the Respondents did establish a substantial other reason for the dismissal.