United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR D BARNETT (of Counsel) Instructed by: MHL Support Plc Brunswick Court Brunswick Street Newcastle-upon-Tyne Staffordshire ST5 1HH
For the Respondent	MR D ROBINSON-YOUNG (of Counsel) Instructed by: Messrs Lawson & Thompson Solicitors 30 Front Street Newbiggin by the Sea Northumberland NE64 6PL


 


SUMMARY

UNFAIR DISMISSAL

PRACTICE AND PROCEDURE

Perversity

Appeal by Respondent based on an application for fresh evidence, which was clearly material and credible, but which did not satisfy the third Ladd v Marshall test of not being available for the hearing(s) below by the exercise of reasonable diligence.


 


THE HONOURABLE MR JUSTICE BURTON

1. This has been the hearing of an appeal by Mr Todd, trading as Hygia Professional Training, against the decision of the Employment Tribunal at Newcastle-upon-Tyne by way of a remedy hearing, which took place on 26 October 2006, when they reached a decision on quantifying an award made to the Claimant, Mr Cutter, in Reasons sent to the parties on 20 November 2006.
2. The remedy hearing was consequent upon an earlier decision by the same Tribunal made after a hearing on 16 June 2006 in Reasons sent to the parties on the 7th August, when they found that the Claimant, Mr Cutter, was unfairly dismissed by the Respondent, but that his basic award should be reduced by 25%, and that, after the necessary mark up on the compensatory award by virtue of failures of procedure which they found, the compensatory award also should be reduced by 25%. The remedy hearing consequently was to quantify that compensation, as so reduced.
3. The Claimant was employed by the Respondent as a training consultant. He commenced employment on 5 March 2004 and was dismissed on 20 December 2005. It appears that the main, if not the only, reason for dismissing the Claimant was that it was suspected by the Respondent that he was planning to leave and join the opposition. That was said to amount, not surprisingly if established, to a fundamental breach of trust and confidence on the facts of the case, in so far as preparatory steps had been taken, if they were, during the employment of the Claimant, and specifically in relation to poaching clients and customers of the Respondent.
4. The Appellant did not employ solicitors or counsel, but a firm of employment consultants. In circumstances which are not known to this Tribunal, the employment of those consultants was terminated some week or so prior to the hearing, and Mr Todd represented himself at the Tribunal, although the Claimant was represented by counsel.
5. At the liability hearing, the Appellant gave evidence as to his suspicions at the time of dismissal, and produced a letter which had founded or substantiated those suspicions from a client. That letter was dated 13 December 2005, on the note paper of a client called Rosewell Country Home, signed by its Residential Manager, Mrs Scrivens, and she signed a letter as follows:

"TO WHOM IT MAY CONCERN

On the 9th December [that is four days before she wrote the letter] I was approached by Mr Bob Cutter [the Claimant], who explained that he was branching out on his own in January 2006 to deliver training. He had produced his own Logo and Portfolio.

Bob inquired if I thought that Gill [and that is a reference to a Ms Galloway] (Home Manager) would book him for Training.

I explained that he would have to talk to Gill direct, but it would put us all in a difficult position."

That is of course because of the fact that he would thereby be competing, while still employed, with his own employer. It seems that Mrs Scrivens reported that to Mr Todd, which precipitated the dismissal. That letter was produced at the Tribunal, but neither Mrs Scrivens nor Ms Galloway gave evidence. Mrs Scrivens' letter, consequently, although admissible in evidence under the more lax rules of the Employment Tribunal, stood against oral evidence which was given by Mr Cutter. And in oral evidence Mr Cutter gave an explanation about his contact with Mrs Scrivenss. That explanation was sufficiently persuasive that the Tribunal did not make any award under Polkey, but nevertheless was not sufficient to avert a finding of 25% contributory fault by the Tribunal, who clearly considered the matter very carefully.

6. At paragraph 5.9 of their judgement, the Tribunal said as follows:

"The final one [reason], breach of trust and confidence, had some history of which the claimant was unaware on the dismissal date. The respondent had been investigating alleged conversations with customers involving the claimant and produced a note from Mrs J Scrivens … [that is the note which I have read and this of course was the central evidence which seems to have swayed the Tribunal].

5.10 The claimant accepted that he had discussions with Mrs Scrivens, but stated in evidence that, because his own and his wife's wages and expenses were not being paid by the respondent, he discussed with two clients the possibility of working for them direct in the event that the respondent's business folded in the future. He states that he told them, "If this happened would you be interested in me delivering the training?"

5.11. He denied that he was intending to set up on his own in January 2006 but said that his conversations were with people he regarded as friends in the context of him expecting the respondent's business to fold and in the context of the non-payment of wages and expenses from the respondent. On these matters, in the absence of any witnesses being called by the respondent, the Tribunal preferred the claimant's evidence of the discussions that he had held with two of the respondent's customers, which were along the lines set out above."

7. In those circumstances the Polkey finding, which might otherwise have been made, had the witnesses been adduced to say that in fact this was, as they understood it, a firm decision to go, not one that was simply that he might be leaving, was not made.
8. Paragraph 19.2 of the judgment, in relation to Polkey, reads as follows:

"We were unable to conclude that the procedural irregularities in this case really made no difference to the eventual outcome. The procedural inaccuracies were very grave, and even at the Tribunal hearing the respondent was unable to prove on balance that the claimant had committed the acts, i.e. the specific acts that the claimant had been dismissed for. We concluded this, but noted that we fully appreciate that these were genuinely the reasons why Mr Todd dismissed the claimant. We assessed that there was, on the evidence, no chance of the claimant having been dismissed fairly if a proper procedure had been followed. In the circumstances, no reduction under section 123(1) of the Employment Rights Act 1996 shall be made to compensation once quantified."

9. However, in relation to both basic award and compensatory award, a deduction was made.

"19.1 Basic Award.

Taking into account the discussions which the claimant had with two of the respondent's customers, although not sufficiently serious to amount to a breach of the implied term of fidelity and good faith owing to the context of those discussions, nevertheless we found that they were inappropriate and had caused or contributed to his dismissal and we concluded that the appropriate amount by which the basic award should be reduced by 25%."

and then at paragraph 19.2(iii):

"On the same grounds as discussed earlier in relation to the basic award, we concluded that the claimant had contributed to his dismissal due to his conversations with customers, which we considered to be culpable and blameworthy. Under section 123(6) we concluded it would be just and equitable to reduce any compensation by 25%."

10. The remedy hearing then went forward on 26 October, as we previously indicated. Mr Todd represented himself again at this Tribunal as, this time, did the Claimant. The Claimant submitted a schedule of loss, which eventually led to a sum to be paid of £13,400, after allowance for the 25% deduction. The evidence led to the two findings of fact by the Tribunal, at paragraph 3.10 that:

"The claimant stated he had attempted to find work with other employers as well, but ultimately felt he had to try to set up the business as the respondent would not, he anticipated, give a favourable reference to him."

That of course was evidence which was entirely inconsistent with the position of his having already decided to set up the business in January 2006, even prior to his leaving the Appellant.

11. The submissions during the Tribunal remedy hearing had been of course by the Appellant to the contrary, namely paragraph 4:

"The respondent made the following submissions: (i) that he believes the claimant always intended to set up business on his own."

To the contrary (and in the event successfully), in paragraph 7 the Claimant submitted that:

"(i) he was not considering setting up business until he was dismissed and the evidence shows Business Link [that is the new business], contact begins in January 2006."

In those circumstances the Tribunal made an award which ignored any question of the impact of a prior decision to leave, and assumed that he had simply taken reasonable steps to mitigate after the termination of his employment.

12. At long last Leviathan moved and Mr Todd began to make some inquiries. And we now have, by way of support for this appeal, witness statements from four people: Mrs Scrivens and Ms Galloway from Rosewell Country home, and Mr Cochrane, a freelance training consultant for the Appellant's business, and Ms Armstrong, who is an employee of the Appellant's business.
13. Mrs Scrivens now gives full particulars of the event which lay behind her letter, which she wrote four days after it occurred, and Ms Galloway has also supplied a witness statement. It is quite apparent from the evidence of both of them, which relates to the incident in December 2005, Ms Galloway apparently referring to the 8th December and Mrs Scrivens to the following day on 9 December, that, as they recollect what was told to them by Mr Cutter, he was definitely going out on his own in the new year. He was leaving Hygia on the 1st January, and he handed out a business card. If that evidence had been given and had been believed, plainly, there would have been a 100% Polkey finding at the liability hearing and/or, in any event, no loss at the remedy hearing.
14. Mr Todd has also produced, on the appeal, witness statements from Mr Cochrane and Ms Armstrong. Mr Cochrane speaks not of the incident in December, at which, of course, he was not present, but of an earlier incident, on the 6th October, when he and Ms Armstrong were present at a training course with the Claimant in Sunderland. Mr Cochrane recorded a conversation with the Claimant that he was waiting to get his expense monies, which were still owed for him, and that that was the only basis on which he was still staying with the company, because he was leaving the company to start up on his own after Christmas 2005.
15. There was a similar statement from Ms Armstrong confirming her presence at the same time, when she confirms that the Claimant stated that he planned to leave the Appellant after Christmas to start his own training company. He did not say at any time that he was concerned about the financial state of the Appellant, or that his leaving the company was dependent on the Appellant's business collapsing, which was the explanation that he had given which had sufficiently swayed the Tribunal at the first hearing so as to tone down its reaction to Mrs Scrivens' letter.
16. The basis of his appeal is, and is alone, fresh evidence and it is alone in respect of the remedy hearing. There has been no attempt to seek to leave to appeal out of time in respect of the liability hearing. A remedy hearing, of course, would be sufficient in terms of establishing no loss, notwithstanding his earlier failure to dissuade the Tribunal in respect of Polkey, and no point was taken before the remedy hearing or is taken on appeal that in some way the Appellant is shut out from arguing no loss by the result of the liability hearing.
17. Thus, if this evidence had been available at the remedy hearing, it would have been very powerful evidence indeed to establish no loss, which of course would have been a very much more satisfactory result for the Appellant, albeit that there would still have been a finding for the Claimant of unfair dismissal and an up-rated basic award.
18. But that is only the starting point for a consideration where there is an appeal based on fresh evidence. The courts, both in the High Court and County Courts and in Employment Tribunals, set their face against second bites of the cherry. It is in the interests of the public that justice be seen to be done only once, and that so far as possible all evidence be brought forward on the one occasion, always subject to the statutory procedures for reviews and appeals, but not at re-hearings. Re-hearings will only take place where the missing evidence said to make a difference complies with the well established principle in Ladd v Marshall [1954] 1 WLR 1489, which, it has been made clear, apply also in Employment Tribunals, see for example, Wileman v Minilec Engineering Ltd [1988] ICR 318.
19. There are three tests in general terms for this fresh evidence to surmount. The first is whether it is credible, and plainly where we have here four signed witness statements, two of which only corroborate and expand upon a letter which was written four days after the original incident, and where the Claimant himself accepted that at least the incident had occurred, albeit that he put a different spin on the conversation, the evidence is plainly credible. As to whether it is material, what we have said in the course of this judgement makes it plain that, if believed, it would have had a very dramatic effect on the result.
20. But the issue that we have to decide is as to the third hurdle, namely whether the evidence was reasonably available at the first hearing, or in this case at either or both of the first hearings - whether it could have been made available by the taking of reasonable steps. There has been some discussion before us as to precisely what is meant by reasonable steps, but Mr Barnett, who vigorously pursued the appeal on behalf of the Appellant, does not suggest there is any authority on the topic which in any way confines our conclusion as effectively a judge of first instance in relation to this question.
21. We are entirely satisfied that this evidence could have been made available by the taking of reasonable steps. First in the firing line must be the employment consultants who were acting on behalf of the Appellant until shortly before the liability hearing. It seems extraordinary, if they were briefed to prepare a case on their client's behalf, that (i) they did not at least recommend the securing of Mrs Scrivens to give evidence; (ii) they did not also explore and obtain a statement from, and in due course procure the attendance or advise their client to procure the attendance of, Ms Galloway, who was referred to in the original letter from Mrs Scrivens; (iii) they ought to have advised the Appellant to take steps to find out whether anyone else might have any information about the planned activities of the Claimant, at the very least the Appellant's own employees.
22. After the liability hearing the Appellant had no advisers, but should not be regarded as in any way thereby entitled to act incompetently or non-diligently. Of course, he would not have the benefit of any legal advice and it appears that - although there is no witness statement to confirm this, we have been so told by Mr Barnett - he did not appreciate that he could call evidence at the remedy hearing. But as Mr Barnett accepts, the notice of hearing would have put him on notice that he could call witnesses, and in any event it is not competent of him not to have so appreciated.
23. The circumstances in which the evidence in fact became available only after the remedy hearing are described by Mr Todd in the very frank witness statement which he has produced. He gives no explanation as to what happened before the remedy hearing, not least because of course, for the purposes of this Appeal Tribunal, it is the remedy hearing which is significant. But he says that he was unhappy about the remedies decision and discussed it with a number of colleagues. And he then says this:

"I was approached before dismissing Mr Cutter by Gill Galloway, carrying out training for her at the home in Bristol where she is the Manager. Jeanne Scrivens is the manager of the Residential Unit at the same home. Until she spoke to me about it and gave me the 2 statements that they had made before my arrival, I knew nothing of Mr Cutter's approach to her the week before."

So although he had Mrs Scrivens' letter, it appears that he at any rate, and clearly, in the absence of information, one must assume the advisers who should have been taking steps at the time, did not have any statement from Gill Galloway, albeit that her existence was known about. It is quite plain that reasonable steps could have secured the attendance at the liability and/or remedy hearing of Mrs Scrivens and Ms Galloway.

24. So far as Armstrong and Cochrane are concerned, he says this, in paragraph 7:

"I did not speak to either Janet Armstrong or David Cochrane about the Employment Tribunal myself. After the Remedies hearing and their award to Mr Cutter, the then Centre Manager at Hygia, Janine Parkin had been relaying her incredulity at their findings to Janet Armstrong. It then emerged in conversation that Mr Cutter had already said that he planned to leave in January and had set up his own business, during a CIEH Health and Safety training session that he had carried out for her and David Cochrane on the 6th October 2005. Up until that point I knew nothing of this."

25. It thus tumbled out in the course of a stray conversation. It appears to us overwhelmingly clear that if there had been steps taken by the employment consultants at the appropriate time, well before the liability hearing, it would have similarly tumbled out.
26. What Mr Todd has told us, through Mr Barnett, today is that he did not speak to any employees about the position and he would have given in the witness box, if we had permitted it, some explanation as to why he did not approach, or think it appropriate and necessary to approach, either Mr Cochrane or Ms Armstrong.
27. We did not permit that evidence, albeit that Mr Robinson-Young was sharpening his fangs ready to cross-examine, not only on the fresh evidence but on the original statement, because it would not appear to us that it would assist in the slightest. The fact is that he did not approach any of his employees or subcontractors, and more important, his employment consultants did not do so either.
28. What is said in paragraph 8 is:

"The evidence could not have been obtained in time for the remedies hearing with reasonable diligence because up until after the remedies hearing I did not know of its existence."

That of course begs the question. It is not suggested that he had the knowledge but kept it from the Tribunal; it is accepted that he did not know. The question is whether by reasonable diligence it could have been found out. We are entirely satisfied that with such reasonable diligence, until they ceased to be employed by him, would have been that of the employment consultants, who could have been expected to have done their job properly. Their failure must be ascribed to the Appellant. After their ceasing to act then the lack of reasonable diligence would be his. On any basis it is no answer to say, in relation to witnesses who were employees/consultants of the Appellant, 'I did not know that they had important evidence to give because I never asked them'.

29. In those circumstances the Appellant does not come close to satisfying the third hurdle, which is perhaps the most fundamental, in Ladd v Marshall, and this appeal is dismissed.