United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr S D Heath (of Counsel) Messrs Knowles Benning Solicitors 24 West Street Dunstable LU6 1SN
For the Respondent	Mr P Blanking (Representative) Luton Rights TUC Centre for The Unemployed 15 New Bedford Road LU1 1SA


 


Summary

Unfair dismissal – Procedural fairness/ automatically unfair dismissal

Employer had followed statutory procedure in full as regards the decision to dismiss but had implemented a suspension without pay prior to 'step 1' – Tribunal held that this made the dismissal automatically unfair under s.98A – Held that that was wrong: s.98A only applies if the procedure has not been completed in relation to the dismissal itself.


 


THE HONOURABLE MR JUSTICE UNDERHILL

1. The Respondent in this appeal was a driver employed by the Appellant whose business primarily involves providing transport services for special needs children. To avoid confusion we will refer to the Appellant as "the employer" and the Respondent as "the employee".
2. In spring last year the employee canvassed some of her colleagues about getting a trade union involved in the employer's business. She believed that one of the drivers to whom she had spoken, Mr Clayden, had reported her activities to management, and on 22 April 2005 there was an incident in which, as the Tribunal found, she confronted Mr Clayden and abused him in the presence of others and at some length. Mr Clayden was very upset, and both he and another employee who had witnessed the incident reported the matter to his manager. The employee was called to a meeting and suspended immediately without pay. There were then further meetings on 19 May and 6 June. The status of the first meeting was unclear, but the second was unquestionably a disciplinary meeting and the employee was by letter of 13 June 2005 notified that she was dismissed for gross misconduct. She was granted a right of appeal but her appeal was dismissed.
3. The employee complained to the Employment Tribunal that her dismissal was unfair. In addition to "ordinary" unfair dismissal she alleged that she had been dismissed on trade union grounds contrary to s.152 of the Trade Union and Labour Relations (Consolidation) Act 1992. The case was heard over three days by a Tribunal sitting in Bedford. The Tribunal found that the employee had been dismissed for gross misconduct and that she had not proved that her trade union activities had affected the dismissal. It found that the test in British Home Stores v Burchell was satisfied and that dismissal was not within the range of reasonable options. It rejected the employee's case that the employer's treatment of her was inconsistent with the treatment of other employees guilty of similar offences. The Tribunal nevertheless found the dismissal to have been unfair by reason of s. 98A of the Employment Rights Act 1996 because of non-compliance on the employer's part with the statutory disciplinary and dismissal procedure. The only non-compliance which it identified, and plainly what it relied on, was the fact that the employee's suspension on 22 April occurred at the very beginning of the process, not only before the first disciplinary meeting but even before any grounds for proposed action had been set out in written form. It went on to reduce the employee's compensation by 40% for "contributory conduct" but to uplift the result in total by 50% under s. 31 (3) of the Employment Act 2002. The resulting award of compensation was some £7254.80, together with a basic award of £924. The Tribunal also found that the employee was entitled to an award of £1255 described as "payment in lieu of notice". Its reason for making this award is stated extremely briefly: it said simply "having been unfairly dismissed the Claimant is entitled to payment in lieu of notice".
4. The Notice of Appeal raises five distinct points, but three of them are concerned with remedy and a fourth is concerned with the award of the payment in lieu of notice. If the primary ground, which is concerned with liability, is successful the issues as to remedy will not arise; nor, in view of the Tribunal's reasoning in the view on the notice point, will the appeal on that issue. We have accordingly heard arguments on the liability issue first.
5. In our view the appeal on liability must succeed. We start by setting out the provisions of s. 98A (1) of the 1996 Act on which the Tribunal based its decision. These are as follows:

An employee who is dismissed shall be regarded for the purposes of this part as unfairly dismissed if

(a) one of the procedures set out in Part 1 of Schedule 2 of the Employment Act 2002 (dismissal and disciplinary procedures) applies in relation to the dismissal;

(b) the procedure has not been completed;

(c) the non-completion of the procedure is wholly or mainly attributable to the failure by the employer to comply with its requirements.

It is common ground that condition (a) is satisfied here and that the dismissal and disciplinary procedures prescribed in Part 1 of Schedule 2 to the 2002 Act apply. We need not set these procedures out in full, but, as is well-known, they provide for three steps - first, a statement of grounds for action, which must be a written statement, and an invitation to a meeting; secondly, a disciplinary meeting; and thirdly, an appeal if required by the employee.

6. On the face of it, that procedure was completed in the present case. It is plain from the Tribunal's findings that there was a written statement of the grounds for the action proposed to be taken against the employee, that there was disciplinary meeting and that there was an appeal. However, the Tribunal, as we have said, based its decision to the contrary on the fact that the employee had been suspended without pay prior to any of those steps having been taken.
7. Mr Heath, who appears before us for the employer, accepts that the suspension of the employee without pay was a breach of the procedure, because suspension without pay constitutes "disciplinary action" within the meaning of the Act and it is clear that the statutory procedures do not permit such action to be taken prior to step 1. But, he says, that is irrelevant because the relevant question for the purpose of s. 98A is whether the procedures have been completed "in relation to the dismissal". That seems to us to be correct. S. 98A is concerned with unfair dismissal, and s-s. 1 (a) focuses attention specifically on whether the procedures apply "in relation to the dismissal". The fact that there has been a failure in relation to a distinct disciplinary step, namely suspension without pay, ought not to have any bearing on the question of whether the procedure has been completed in relation to the matter complained of, namely dismissal.
8. Mr Blanking, for the employee, submits that the distinction advanced by Mr. Heath is artificial and that the suspension and the ultimate dismissal were all part of the same sequence of events. Factually, no doubt that is correct; and it would certainly have been open to the employee to advance an "ordinary" unfair dismissal argument to the effect that her premature suspension without pay in some way infected the fairness of the whole procedure. But the provision for automatic unfair dismissal contained in s. 98A is another matter. It is a strict provision with punitive effect, and it seems to us that both the spirit and the letter of the provision require us to apply its literal words. On that basis the straightforward question is whether the employer had completed the statutory procedures in relation to the decision to dismiss, and they plainly had.
9. It follows that the decision of the Tribunal that there was automatic unfair dismissal in this case cannot stand; and nor can the decisions on remedy which are dependent on it nor the basis of the Tribunal's reasoning on the question of pay in lieu of notice. However we need to consider whether the matter should go back to the Tribunal in order to consider whether the procedure adopted by the employer was unfair on an ordinary s. 98 basis. That question was, so far as we can see, simply not addressed by the Tribunal, and we will now hear submissions on whether it is right that the matter should be remitted in order to enable the Tribunal to consider that aspect of the matter. We should make it plain that it would not be our intention or the effect of any such order that the matters on which the Tribunal has already decided should be revisited: those would stand in any event.

[After further submissions]

10. As floated at the end of our primary judgment, it seems to us right that this case should be remitted to the Tribunal to consider the issue of "ordinary" s. 98 unfair dismissal. The Tribunal need not, and indeed ought not to, revisit the matters on which it has already made findings but because of its recourse to section 98A it did not consider the case based on ordinary procedural unfairness which we are told was advanced below; and it is that aspect of the case on which the employee is entitled to have a decision. The case should plainly go back to the same Tribunal unless that has become for some reason impossible. It will be for the Tribunal itself to decide what further hearing or evidence there needs to be. We can say however that we would hope that the Tribunal would feel in a position to decide the remaining matter fairly on the basis of its notes of the evidence already taken and short further submissions – probably, though not necessarily, advanced at a hearing. But the Tribunal will be better placed than we are to decide what it needs in order to reach a fair decision on the remaining points.
11. There are three particular points which we ought to make in connection with the rehearing.
12. First, if the eventual outcome is a finding of unfair dismissal on procedural grounds the Tribunal will plainly be in Polkey territory. The Tribunal will have to address the Polkey issue and give a reasoned decision on it. It was one of the grounds of appeal before us that the Tribunal had failed to do so in its decision. We have not had to deal with that point specifically, but it is plainly the case that if a Polkey argument is advanced it needs to be properly addressed and a reasonable decision made on it.
13. Secondly, at least in principle, the question of contributory fault could also arise - although this comes in only after the Tribunal has decided what the compensatory award would otherwise be, including any Polkey issues. As to the correct approach, the Tribunal will find helpful guidance in the decision of the Court of Appeal in Digital no. 2 [1998] IRLR 134. Although the Tribunal did in its original decision make a finding as regards contributory fault, that finding will need to be reconsidered in the light of the basis on which any finding of unfair dismissal has been made, and the Tribunal will not be bound by its previous assessment. It will be necessary, if the issue is live, for the Tribunal to give its reasons for any figure which it chooses to take.
14. Thirdly, as noted in our primary judgment the Tribunal treated the question of the employee's entitlement to what it described as "pay in lieu of notice" - strictly speaking, damages for wrongful dismissal - as depending on its finding of unfair dismissal. That seems to us, with respect, wrong in principle. Even if there is a finding of unfair dismissal it does not follow that the employee is entitled to an award of "notice money" under the Tribunal's contractual jurisdiction. The employee may, depending on other issues, receive compensation for loss of the earnings that would have been received in the notice period as part of such compensatory reward as she might receive. But the question so far as any common law award is concerned is whether the employee was guilty of sufficiently serious misconduct to justify her summary dismissal. On the basis of the Tribunal's findings already made the employee plainly was guilty of misconduct, but the Tribunal will need to address the question whether that was sufficient to justify summary dismissal.
15. We end by saying that in any case where a case has to be remitted to the Tribunal it is an unhappy situation because the parties are put to further expenditure of time and costs. The parties here ought at least to consider whether it may not be in both their interests to try to settle this matter by some sensible compromise; but obviously it is a matter for them whether there is sufficient common ground for that to be possible.