United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J R FALKENSTEIN (of Counsel) Instructed by: Tuntum Housing Association 90 Beech Avenue New Basford Nottingham NG7 7LW
For the Respondent	MR A EDGE (of Counsel) Instructed by: Messrs. Ashby Cohen Solicitors Ltd 18 Hanover Street London W1S 1YN


 


SUMMARY

Time Limits – Reasonably practicability

Practice and Procedure – Bias, misconduct and procedural irregularity

Chairman's mistake as to necessity for further claim following Claimant's solicitors earlier failure to follow grievance procedure were grounds to extend time.

Wing member's comment about a witness as 'political black' not sufficient to show apparent bias where no race issues in the case. Comment however was to be regretted.


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal from Nottingham Employment Tribunal, who in a decision sent to the parties on 12 December 2006 found that the Respondent's dismissal was unfair and that he had been treated with detriments short of dismissal by reason of various protected disclosures that he had made to his employer, the Appellants, and the Housing Corporation between April 2001 and April 2005. This appeal follows a preliminary hearing held on 2 May 2007 (Mrs Justice Cox presiding) which permitted certain of the grounds of the Notice of Appeal to proceed, others were withdrawn. Amended grounds were filed on 16 May pursuant to that hearing, supplemented by an affidavit of the Appellant's Counsel, Mr Falkenstein, as sworn on 16 May 2007 and responded to by the Tribunal Chairman on 13 June 2007.
2. The Tribunal's decision ran to some 60 pages, and it is extremely detailed in relation to the history of these events. For the purposes of this appeal, however, we take the very short summary, helpfully set out at the beginning of the Respondent's skeleton argument.

The Facts

3. The Respondent, who is an accountant, was engaged by the Appellant housing association as a consultant from February 2000, becoming an employee on 20 November 2000. He was employed as the Appellant's Finance Director, and in that position was required to be the watchdog of their financial activities. He was required not only to ensure that employees complied with the various internal / external financial regulations but also required to ensure the Appellant's made financial decisions which provided itself with good value for money. The Respondent made protected disclosures regarding these matters, namely:

(1) He approached the Appellant's Chief Executive Mr Renwick some time in 2001/2002 and informed him that the payment of some £4,018 to a carnival (with which the Chief Executive had close connections) was an improper use of the Appellant's expenses.

(2) In December 2004 he requested that the Appellant's repay to the Housing Corporation a cheque that had been received by them two years previously for the sole purpose of Mr Renwick attending a MBA course: Mr Renwick never attended that course. When the Respondent drew up a cheque for repayment it was removed from his desk. By reason of the above the Respondent reported the matter and challenged Mr Renwick.

(3) During an investigation into anonymous rumours that Mr Renwick had provided an employee of the Appellant with a significant pay rise by reason of the fact that he was having an affair with her (the Lawson-Brown report), the Respondent reported various breaches of the Appellant's financial and internal procedures relating to both Mr Renwick and the employee in question.

(4) The Respondent made a number of protected disclosures regarding Mr Renwick's breach of internal financial procedures relating to his failure and/or refusal to provide the Respondent with receipts and/or invoices to support various expenses Mr Renwick had incurred.

(5) Mr Renwick removed from the Respondent's possession the "credit card file" which prevented the Respondent from establishing whether or not, and to what degree, Mr Renwick was providing documentary support for his incurred expenses. The Respondent reported this matter to Roy Taylor, the Respondent's Treasurer.

(6) On 11 April 2005 the Respondent wrote to the Housing Association (a prescribed person pursuant to the Public Interest Disclosure (Prescribed Persons) Order 1999) and informed them of his concerns regarding the removal of the credit card file and the breaches of the Appellant's financial regulations. He had also on 7 April 2005 written to Miss Barlow, an accountant conducting an inquiry into the Appellant's financial affairs, in relation to his concerns on the credit card issue. On 20 April 2005 the Respondent was suspended. No reasons at that time were provided to him as to why this had taken place. The suspension was carried out by Mr Renwick and this led to a physical altercation between them, in the course of which it was alleged that the Respondent pushed Mr Renwick.

4. On 4 May 2005 the Respondent was given in writing disciplinary charges. There were four items: (1) the physical assault on the Chief Executive; (2) the vexatious claim relating to the protected qualifying disclosures; (3) gross negligence in relation to not doing anything about the mobile phone contract issue; and (4) vexatious claims in relation thereto in relation to the remarks made on 20 December 2004.
5. In due course the Respondent was dismissed on the basis of all four charges, all of which were termed gross misconduct. The Tribunal found that charges (2) and (4) were qualifying protected disclosures; and it followed that as each was a stated reason for dismissal, the dismissal was automatically unfair pursuant to Section 103A of the Employment Rights Act 1996. In fact the Tribunal were in error since only charge (2) related to disclosures which the Respondent had alleged were qualifying, namely the letters of 7 and 11 April 2005: it had not been suggested that the events surrounding a meeting on 20 December 2004 also qualified. The Tribunal's conclusion on this aspect of the case was briefly summarised in paragraph 25.2 of their decision:

"The claim for automatic unfair dismissal pursuant to Section 103A succeeds. The principal reason for the dismissal flows as a causa causans from the Claimant making qualifying protected disclosure s whether it be at the meeting on the 20 December or more importantly in terms of the letters written on the 7^th and 11^th April 2005."

6. We turn to the grounds of appeal.

1 Bias – Race Issues

During the evidence of the first witness Daniel Taylor, the Appellant's Human Resources Manager, the Chairman asked about Mr Renwick's racial origin and ethnicity. It was established he was born in Grenada and had been exiled following the military coup in the 1980s. The witness was then asked to describe Mr Renwick's ethnicity and skin colour, to which he responded that Mr Renwick was Afro-Caribbean, with some Irish ancestry, and although his skin colour was no darker than his own (Mr Taylor's) Mr Renwick nevertheless regarded himself as racially black. Thereafter, one of the lay members, Mr Syed, referred to Mr  Renwick as a "political black". In this appeal it is suggested that the term was understood to place a qualification upon Mr Renwick's racial identify as a black Afro-Caribbean. There were no race issues raised during the case. At the beginning of the written reasons the Respondent's witnesses were described in terms of both their age and their ethnicity followed by the following comment:

"Note: This is not a race case but all of the witnesses for the Respondent from whom we heard are white Caucasian."

7. The Chairman's comments on this issue can be found in his response under the heading: "3. Concerns about Race":

3.1. The reference to the racial identities of respective witnesses at page 2 is one of fact, and it is relevant, given that this was an Afro Caribbean Housing Association, in terms of the context of events and the dismissal of the Claimant. It was not a case of race discrimination, and no findings of fact were therefore made in that respect.

3.2 As to the reference to "political black", Mr Syed has asked that I incorporate the following: "This was to explain the term black had been used for all non white people. I tried to explain on the basis of my 25 years experience in equal opportunities that the term black was used for Asians and Africans as well for the purpose of defining racial discrimination".

8. The amended Notice of Appeal makes the following complaint:

"25. No allegations of actual bias are relied on or intended, but having regard to those circumstances, there is a real danger that the Employment Tribunal might (through its concerns about the competing racial origins of the parties) have unfairly regarded the case of the respective parties with favour or disfavour."

9. In his written submissions and before us Mr Falkenstein made it clear that no issue of actual bias was raised but reminded us that the test for apparent bias set out by Hope LJ in Porter v Magill [2002] 2 AC 357 where at paragraph 103 he said this:

"The question is whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the Tribunal was biased."

10. In a recent Employment Appeal Tribunal case His Honour Judge McMullen QC in Thompson v Age Concern (2004) UKEAT/0728/03 said this:

"If it would appear to a reasonably informed bystander that the Chairman was showing favour to one side unfairly as against the other, the Chairman would have acted in breach of her duty."

11. Mr Falkenstein submitted that the test for the Court to adopt was whether there was a real possibility of bias i.e. more than fanciful but not necessarily as strong as probability. He submitted that the comments about the skin colour and ethnicity of Mr Renwick coupled with the comments in the decision in relation to the Respondent's witnesses would indicate that issues of race had actively exercised the minds of the Employment Tribunal coupled with the Chairman's comments in his letter that racial identities of witnesses were relevant in terms of the context of events and dismissal of the Claimant.
12. He therefore argued that there was more than a trivial risk that the Tribunal had from the outset seen this case as a white on black racial dispute, thereby having the potential to taint the decision-making process in this case.
13. In response, on behalf of the Respondent, Mr Edge argued that paragraph 25 of the amended grounds of appeal not only suggest that there were no allegations of actual bias but make no clear allegation of apparent bias. He argued that whilst the use of the term "political black" was troubling and indeed unhelpful this occurred right at the beginning of the case and it was followed by many days of evidence; although there was considerable bitterness between the two sides in the case no race issues emerged thereafter. He also submitted that it is not entirely clear what was meant by the term "political black", and whether, as a result, one could say that one side or another would be favoured. In the end the Tribunal found in favour of the Respondent, a black litigant, although within the decision he was at times criticised.
14. Mr Edge argued that the Chairman in describing the Respondent's witnesses as he did was only using it as a prelude to then dismissing any notion of race issues in the case. He also reminds us that the comment made by the wing member right at the outset of the case did not provoke a response from either side, and in particular any application that the member should be replaced.
15. We agree with Mr Edge's submissions, the comment made by the member was, in our view inappropriate, and should have been dealt with immediately by the Chairman. However, thereafter there was no suggestion within the case that issues of race caused any unfairness to one side or another. As far as the description of the Respondent's witnesses are concerned, whilst at first sight it does seem a little strange to describe one group of witnesses and not the other, we can see that it was done as a prelude to the general comment that race was not an issue in the case; and again, in the remaining 60 pages of the decision race plays no part.
16. This Court has to place itself in the position of the fair-minded and informed observer, and we are unanimous in saying that whilst the comment was troubling it does not lead us to conclude that there was a real possibility or real danger that the original Tribunal was biased.

Jurisdiction Section 47B Employment Rights Act 1996 (ERA)

17. In Paragraph 8 of the amended ground of appeal, the Appellant contends that the Tribunal erred in law in concluding that it was not reasonably practicable for the Respondent to present his detriment complaint in time. Section 48(3) sets out the time limits in which the Tribunal has jurisdiction to hear a complaint pursuant to 47B ERA as follows:

"(3) An employment tribunal shall not consider a complaint under this section unless it is presented –

(a) before the end of the period of three months beginning with the date of the act or failure to act to which the complaint relates or, where that act or failure is part of a series of similar acts or failures, the last of them, or

(b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of the period of three months."

18. The original ET1 filed on 24 October 2005 alleged that the Respondent was dismissed on account of having made a protected disclosure and also that he was subjected to detriment short of dismissal contrary to s47B ERA. The Respondent's solicitors believed that the statutory grievance procedure did not apply to the pre-dismissal detriment. This was wrong, and a regional chairman rejected this part of the claim on the basis that no grievance letter had been written and the Respondent's solicitors were advised to send a written grievance to the Appellant and then allow 28 days to elapse. The letter also pointed out the original time limit was extended by 3 months. A grievance letter was sent on 4 November and in due course there was to be a grievance meeting on 27 January 2006. The ET3 filed on 21 November included a denial that the Respondent had suffered any detriment due to any disclosure he may have made. Although the original claim and the response did not seek to crystallize when the last act of detrimental treatment would have been, the grievance letter complained in particular in relation to the way in which the disciplinary process had been instigated and handled; and the grievance meeting made it clear that the detrimental treatment continued past his suspension from work on 20 April 2005 and through into the investigation and disciplinary process.
19. A case management discussion was held in the usual way before a Chairman, Mr Blackwell, on 8 December 2005. At that hearing the Respondent's solicitor raised the necessity to submit a further claim form to deal with that part of the claim that had initially been rejected. Mr Blackwell made it clear that it was not necessary for such a claim form to be presented and the proceedings could continue in relation to the s47B part of the claim. It is quite clear that the Appellant's representative attending the hearing raised no objection to that course of action.

The order made by Mr Blackwell recites as follows:

"The parties are agreed that the issues are adequately set out in the originating claim and response save that for the avoidance of doubt …. (2) the Claimant further alleges that he has suffered a detriment contrary to s45B of the 1996 Act and particulars of the detriment are set out in a grievance letter of 4 November 2005 sent by the Claimant's representatives to the Respondent's representatives. The Respondent accepts that the letter clarifies the issue of detriment and accepts that it is a valid grievance letter permitting these proven proceedings to continue."

The order continues

"There is no requirement at this stage for either party to provide further information though that may eventually arise after disclosure of the documents."

20. Subsequently Mr Britton, who chaired the final hearing, happened to note Mr Blackwell's adjudication and was of the view that it was necessary for a second claim to be presented to cover the parts of the original claim that had been rejected. The Tribunal wrote to both parties on 26 January 2006 setting out Mr Britton's view of the law. The Appellant's solicitors argued in their letter of 6 February that given Mr Blakewell's ruling they did not need to submit such a second claim but Mr Britton rejected that argument, and as a result a second claim was presented to the Tribunal on 16 February 2006 on the basis that the last date for the detrimental treatment prior to dismissal was 25 July 2005. The fresh ET1 should have been filed by 25 January 2006. The position of the Appellant's representatives was set out by the Tribunal in paragraphs 6.10 and 6.11:

"6.10 The answer to that was the ambiguous letter from Croners which we have already referred to. It flagged up that the solicitors in presenting the original first claim made the mistake in arguing that the statutory dispute procedures do not apply. "In view of the aforementioned, whilst having an understanding of the Claimant's position, we will state that contrary to the pleading made in the claim we do consider that Section 47B does fall within the statutory grievance requirements and the pleading by presentation of the new claim will be out of time."

6.11 They put no date on when the last detrimental act would be so as to render it out of time; and this Tribunal again points out that they took no such issue before Mr Blackwell, and did not at that stage argue that the claim was out of time or that the statutory procedures did apply. We see this therefore as being an opportunistic letter."

The fresh ET1 merely repeated the matters that had been set out in the original claim and the second ET3 raised the issue that the claim had been presented out of time.

21. The Tribunal in dealing with these issues firstly dealt with an issue raised by M Falkenstein as to the last act of detriment. He had submitted that no detrimental act short of dismissal is pleaded after the disclosure letter of 11 April 2005 and that time should therefore run from that date. The Tribunal formed a view that implicit in the concession made by the Appellant's lawyer Mr Marsh before Mr Blackwell was the fact that matters contained in the grievance letter clarified and amplified the issue of detriment and that that grievance made complaint about the disciplinary procedure and the Tribunal therefore ruled that the last date of detrimental treatment was 25 July 2005. The Tribunal's conclusions were set out in paragraph 6.26 to 6.28 as follows:

"6.26 That of course means it is still out of time in terms of thence being presented on the16 February 2006. But it is now out of time because of what was to all intents and purposes an adjudication by Mr Blackwell on the 8 December. Mr Edge then deals with the issue of the importance of advice and late presentation of claims by reference to the Court of Appeal in Marks and Spencer Plc v Williams Ryan (2005) IRLR 562. But that is of course a case where CAB gave wrong advice. Mr Falkenstein counters by arguing that here the fault lies with the solicitors. But again this misses the point. In the final analysis why a second claim was not submitted in time, was because having been asked directly as to whether or not he felt that one was needed, the learned Chairman Mr Blackwell, and being provided with no assistance by the Respondent to the contrary, concluded that the filing of the second claim was not necessary.

6.27 Thereafter they were only triggered into presenting a claim when the lack of jurisdiction was made clear by this Chairman of Tribunal. They then acted promptly and within a reasonable time in presenting the second claim.

6.28 It follows that the Tribunal is persuaded that it was not reasonably practicable for the claim to have been presented within the further three month period afforded by Regulation 15 of the EA 2002 regulations, and because of what took place at the Case Management Discussion on the 8 December 2005. Accordingly the claim for detrimental treatment short of dismissal is not out of time and will proceed. If it succeeds, then the Tribunal can award damages including for injury to feelings."

22. Mr Falkenstein's first submissions in relation to this jurisdiction issue is to repeat the submissions made to the Tribunal that the pleaded case set out in the ET1 showed no detrimental act short of dismissal after 11 April 2005 and that it was inadmissible to amend the ET1 by referring to the later grievance letter which complained about the way in which the disciplinary process had been instigated and handled thereby allowing the Tribunal to find that the last date of detrimental treatment was 25 July 2005. The deadline for presenting the claim to the Tribunal would therefore be 24 October 2005, which was the day on which it was duly presented. Mr Falkenstein argued that, if it was not permissible to incorporate material from the grievance letter without express amendment, then having already concluded that the Respondent had failed to crystallise the last act of detrimental treatment it had failed to discharge the burden of proving that the s47B claim had been presented in time. He referred us to the requirement of Rule 1(4)e of the Employment Tribunal (Constitution & Rules) Regulation 2004 requiring that the details of the claim must be included within the body of the originating application. He argued that the reasoning behind that rule and those rules which require leave to amend is to ensure that a party who brings a complaint does so within time and in terms that do not prejudice the other side. Further he submitted that a letter or discussions at a grievance meeting cannot form the basis of an amendment to a claim without being expressly incorporated.
23. In response Mr Edge reminded us of the concession made by the Appellant's representative in the order of 8 December accepting that the letter had clarified the issue of detriment and that there was no requirement for either party to provide further information at that stage.
24. We do not agree with Mr Falkenstein that the grievance letter sought to introduce such matters as would have required a formal amendment. The ET1 having set out matters that were capable of amounting to protected disclosures, then sought to set out the history of the Appellant's conduct against the Respondent culminating in the conduct of the disciplinary hearings, which were described as unfair. It seems to us that it was open to the Respondent to argue that that course of conduct did indeed represent a detriment short of dismissal and the grievance letter merely clarified that, that was the basis of the claim.
25. The second aspect of jurisdiction argued by Mr Falkenstein is whether a solicitor's mistake as to the law can allow his client to argue that it was not reasonably practicable to present the complaint in time. He contended that the Tribunal ignored the continuing mistake of the Respondent's solicitors in, firstly failing to appreciate their grievance letter was necessary; and secondly, the necessity of resubmitting a further claim to deal with those matters contained in the grievance letter. He argued that the Tribunal were at fault in focussing on the mistaken view of the Chairman, Mr Blackwell, rather than on the failings of the solicitors, particularly since at paragraph 6.13 of the decision the Tribunal made the point that "the solicitors themselves should clearly have been aware of the legal provisions". He argued that the actions of the Regional Chairman, Mr McMillan, who had decided that part of the claim could not be accepted because of the failure to go through the grievance procedure should have sounded alarm bells as far as the solicitors were concerned and yet they persevered with their errors. Indeed he argued that the letter from the Tribunal dated 26 October 2005 setting out Mr McMillan's views made it quite clear that in due course once the grievance procedure had been completed, the claim would have to be resubmitted. He also highlighted that even after the final error had been pointed out it took the solicitors three more weeks to issue; although there is a finding of the Tribunal in paragraph 6.27 that once the lack of jurisdiction had been made clear by Mr Britton the Respondent's solicitors "acted promptly and within a reasonable time in presenting the second claim".
26. Mr Falkenstein reminded us of the well established principle in Dedman v British Building & Engineering Appliances Ltd [1974] ICR 53 that if a Claimant instructs solicitors and does so with full knowledge of the facts giving rise to his complaint and through their default the originating application is not presented in time the Tribunal will normally consider that it was reasonably practicable for the claim to have been presented within the time limit.
27. As regards the compounding of the mistake by the Chairman Mr Blackwell, Mr Falkenstein referred us to Biggs v Somerset County Council [1996] ICR 364. In that case the employee at the time of her dismissal was expressly debarred by statute from bringing her complaint of unfair dismissal because she was a part-time employee. It was only years later the statute was held to impugn EU law and had done so retrospectively. The Court of Appeal held that despite the fact that the Claimant could not have known at the time she was dismissed that she had a legal right to bring a complaint, she could in theory have brought a complaint arguing that the statute which disbarred her infringed Article 119. Had she done so she would have been correct in her assertions. Her ignorance of the law was not a factor she was permitted to rely on. The Court held that the expression 'reasonable practicable' was directed to difficulties faced by an individual Claimant, whereas the Applicant's mistake as to her rights were was a mistake of law and that it would be contrary to the principle of legal certainty to allow past transactions to be reopened and limitation periods to be circumvented because the existing law at the relevant time had not then been fully explained or fully understood. Accordingly it had been reasonably practicable for the Applicant to present a claim within the prescribed time, and that, taking into account all the circumstances in order to achieve a fair balance, her claim would not have been presented within a reasonable period. At page 374D Neil LJ set out the position thus:

"The fact that after 1 January 1973 Acts of Parliament and other United Kingdom legislation might have to yield to provisions determined by a different and superior system of law was, I suspect, fully appreciated only by a comparatively small number of people. . But in my view it would be contrary to the principle of legal certainty to allow past transactions to be re-opened and limitation periods to be circumvented because the existing law at the relevant time had not yet been explained or had not been fully understood."

28. By analogy, Mr Falkenstein argued that it would therefore also be contrary to the principle of legal certainty to allow the limitation period in this case to be circumvented because the existing law may not have been understood by the Chairman, particularly since a proper analysis by the solicitors should have revealed that a further claim form was indeed necessary. Finally, he reminded us that the Tribunal have to be satisfied that it was not reasonably practicable for the complaint to be presented within the normal time limit which he contended was a stricter test than the just and equitable provisions contained in other discrimination legislation.
29. In response Mr Edge reminded us that the Respondent's solicitor did indeed raise with Mr Blackwell whether a second claim was necessary; and received the response that it was not necessary and that proceedings could continue in so far as the s47B part of the claim was concerned. The Appellant's representative said nothing to contradict that view. He argued that, having found those facts and correctly directed itself as to the law, it was plainly correct for the Tribunal to go on to find that it was not reasonable practicable for the complaint to be presented within the three month period and that it could be extended to allow the second claim to be presented. He took us to a passage in Palmer v Southend-on-Sea Borough Council [1984] ICR 372, where at page 382C May LJ cited with approval passages from an earlier Court of Appeal decision in Wall's Meat Co. Ltd. v Khan [1979] ICR 52. Firstly from the judgment of Denning LJ:

"Had the man just cause or excuse for not presenting his complaint within the prescribed time? Ignorance of his rights – or ignorance of the time limit – is not just cause or excuse, unless it appears that he or his advisers could not reasonably be expected to have been aware of them. If he or his advisers could reasonably have been so expected, it was his or their fault, and he must take the consequences."

And then from the judgment of Shaw LJ:

"It seems to me axiomatic that what is or is not reasonably practicable is in essence a question of fact. The question falls to be resolved by finding what the facts are and forming an opinion as to their effect having regard to the ordinary experience of human affairs. The test is empirical and involves no legal concept. Practical common sense is the keynote and legalistic footnotes may have no better result than to introduce a lawyer's complications into what should be a layman's pristine province. These considerations prompt me to express the emphatic view that the proper forum to decide such questions is the industrial tribunal, and that their decision should prevail unless it is plainly perverse or oppressive. Section 88 of the Employment Protection Act 1975 provides for appeal to the appeal tribunal only on questions of law."

30. Mr Edge then sought to distinguish this case from the case of Biggs since Biggs involved no misdirection by a court or tribunal and was very much directed towards a policy of not allowing claims to be reopened where later decisions had clarified uncertainty in the law.
31. Again we favour the Respondent's arguments on this matter. Although the Respondent's solicitors were initially at fault in failing to appreciate that the grievance procedure applied to the detriment claim, once the letter had been served they raised at the next hearing the necessity for filing a second claim to deal with the self-same matters that had been set out in the original ET1. It was only as a result of Mr Blackwell's assurance, a view with which the Appellant's solicitors appeared to agree, that the second ET1 form was not filed.
32. Whilst we accept that the authorities indicate that normally both ignorance of the law and a solicitor's mistake would not be sufficient excuses to allow an extension of time, those were not the principal reasons for the default. It also seems to us that the situation in Biggs can be distinguished, since in the Biggs' case there was no assurance given by a court to Mrs Biggs at the time when she could have issued proceedings. Accordingly on this issue the appeal does not succeed.

Failing to deal with the case before it

33. Section 103A of the Employment Rights Act 1996 provides that:

"Protected disclosure

An employee who is dismissed shall be regarded for the purposes of this Part 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."

34. In dealing with the Respondent's dismissal the Tribunal said this at paragraphs 23.13 and

"23.13 In dismissing and on the subject of the disclosures, the panel found: "in the absence of any other explanation we are satisfied that the claims raised are vexatious and malicious in nature" …"we can find no financial irregularities whatsoever". But there was such evidence as we have already found, and in terms of expenditure on the Carnival and failure to account for the use of the credit card, which in fact was a financial irregularity. They continued: "raising of such a vexatious and malicious allegation constitutes gross misconduct warranting instant dismissal." And they took the same view over the mobile phone case: "raising such a vexatious and malicious allegation constitutes gross misconduct warranting dismissal

23.14 But we have found that these were qualifying protected disclosures, it follows that as each is a stated reason for the dismissal, that the dismissal is automatically unfair pursuant to s103A of the ERA."

35. Before us Mr Falkenstein complained that this Tribunal's approach ignored the fact that only one of the four reasons for dismissing the Claimant was being relied on by him as amounting to a protected disclosure. This error arose because the Tribunal had made an error in coming to the conclusion that a disclosure at a meeting on 20 September relating to the mobile phone issue was a protected qualifying disclosure when in fact that was not part of the Claimant's case.
36. He therefore argued that in the absence of the Tribunal coming to a specific finding that the disclosures in April 2005 were the principal reasons for dismissal then this aspect of the claim must fail. He further submitted that that must involve an analysis by the Tribunal of whether the three other reasons, taken either individually or together, were sufficient to justify dismissal, ignoring the events on 7 and 11 April. We note that the letter on 7 April was again not part of the Respondent's case as regards qualifying disclosures.
37. In response Mr Edge reminded us that the Tribunal's conclusions that the suspension carried out without explanation was as a result of the Respondent making the two protected qualifying disclosures in April "and particularly that to the Housing Corporation". He argued that the disciplinary proceedings flowed directly from that suspension, and although the Tribunal concluded that there were a number of reasons for the eventual dismissal it was clear from their conclusions, particularly paragraph 25.2, that it was the letter written on 11 April to the Housing Corporation that triggered the suspension and dismissal. We agree. Although the Tribunal's conclusions were brief, the whole of the decision, which is lengthy, makes it clear that it was the letter of 11 April that was the overwhelming reason for what followed and we therefore cannot find fault with the Tribunal's conclusions.
38. We move on to deal with other grounds of appeal that were not the subject of oral submissions from Mr Falkenstein but appeared in his written submissions.

The Rogers Spencer Report

39. The background to this aspect is that as a result of the Respondent's complaints the Appellant had the substance of his protected disclosure in relation to Mr Renwick breaching internal financial regulations investigated by an outside body, Rogers Spencer. That body concluded in its full report that there had indeed been various breaches of the regulations by Mr Renwick. The Appellant knew of the content of the full report before the conclusion of the disciplinary process but refused to supply the Respondent or his representative with a copy of the report at any of the disciplinary hearings, or at the appeal. The Respondent's complaint is that in addressing the issue of "reasonable belief" as to the truthfulness of the allegations that he was making, the Tribunal erred in placing undue reliance on the report by reason of the fact that the time the Respondent made the disclosures the report was not yet in existence and the Respondent was unaware as to its content. In the letter of 11 April the Respondent had alleged that there was an investigation against him for harassing and bullying Miss Jane Cox, the Finance Officer, in connection with treatment of the credit card transactions. He alleged that this was all fabrication by Mr Renwick and some managers to undermine his position and internal financial control and a clear attempt to cover up any possible abuse which has been made. Mr Falkenstein argues therefore that the issue before the disciplinary officer was not in fact whether there was financial abuse but whether the Respondent's allegations were made vexatiously, i.e. without good faith and without a reasonable belief in their truth. He argued that the accountant's report could have no bearing on the Respondent's state of mind at the time he made the disclosure, and the Tribunal were therefore in error in placing reliance on that report in assessing the Respondent's reasonable belief. Further, he contended that the Tribunal made no findings in relation to the Respondent's state of mind at the time. In considering these matters we remind ourselves of paragraph 24.1 of the Tribunal decision where the Tribunal dealing with the report said this:

"…the report was so central to the Claimant being able to put his case in relation to reasonable belief for his disclosures to Barlow and the Housing Association."

40. In response Mr Edge took us to Darnton v University of Surrey [2003] ICR 615, where the EAT held that the truth or accuracy of alleged protected disclosures was not necessarily determinative and will often be evidentially relevant to an employee's reasonable belief. At paragraph 29 His Honour Judge Serota giving the judgment of the Court said :

"In our opinion, the determination of the factual accuracy of the disclosure by the tribunal will, in many cases, be an important tool in determining whether the worker held the reasonable belief that the disclosure tended to show a relevant failure...Thus, if an employment tribunal find that an employee's factual allegation of something he claims to have seen himself is false, that will be highly relevant to the question of the worker's reasonable belief. It is extremely difficult to see how a worker can reasonably believe that an allegation tends to show that there has been a relevant failure if he knew or believed that the factual basis was false, unless there may somehow have been an honest mistake on his part. The relevance and extent of the employment tribunal's inquiry into the factual accuracy of the disclosure will, therefore, necessarily depend on the circumstances of each case. In many cased, it will be an important tool to decide whether the worker held the reasonable belief that it required by section 43(B)(1). We cannot accept Mr Kallipetis's submission that reasonable belief applies only to the question of whether the alleged facts tend to disclose a relevant failure. We consider that as a matter of both law and common sense all circumstances must be considered together in determining whether the worker holds the reasonable belief. The circumstances will include his belief in the factual basis of the information disclosed as well as what those facts tend to show. The more the worker claims to have direct knowledge of the matters which are the subject of the disclosure, the more relevant will be his belief in the truth of what he says in determining whether he holds that reasonable belief."

And in Sir Robert McAlpine v Telford (EATS/0018/03, 13 May 2003) Burton P giving the judgment of the Court said this at paragraph 9(iv):

"Always of assistance in order to decide the question of reasonable belief, would be included the question as to whether, in fact, it was happening; because, if it was happening, then that would assist the Tribunal in deciding that his belief that it was happening was a reasonable one, although it would not of itself be determinative of that aspect, one way or the other."

41. Mr Edge then went on to highlight eight occasions in the Tribunal's decision where the Tribunal considered the Respondent's state of mind at the time he made the alleged protected disclosure. We do not propose to repeat them in detail; they are set out in his written submissions but they clearly go to rebut the suggestion made that this issue was not properly dealt with.
42. We are quite satisfied that the Tribunal approached this matter correctly. They set out extensively the law both as regards reasonable belief and good faith, and correctly set out the correct approach. Significantly they reminded themselves that bad faith was not raised in the Notice of Appearance nor specifically dealt with in the Appellant's witness statements. Significantly in dealing with the letter of 11 April 2005, the Tribunal set out its conclusions at paragraph 22.2 and paragraph 22.3. It seems to us that the Tribunal were quite entitled to assess the issues of good faith and belief as against what the accountants eventually found, particularly in the light of the Respondent's reluctance to permit sight of the full report. We are satisfied that the Tribunal did not place undue reliance on this report in judging whether or not the Respondent was vexatious and malicious but judged his intent against the whole of the evidence which they had carefully set out.

Failing to act on the credit card receipt

43. The basis of this complaint is that the Appellant had sought to argue before the Tribunal that the Respondent's delay in reconciling a bundle of credit card slips was a matter capable of having an impact on the issues of both good faith and reasonable belief; and that the Tribunal failed to deal with this issue. In response Mr Edge took us to three passages in the Tribunal decision in which he maintained the Tribunal dealt with this issue. They are as follows:

Paragraph 13.8 — "all that the Claimant was ever to receive from Mr Renwick, and this was in late August 2004, was a A4 see through envelope in which were approximately 25 receipts and for a period of about three years… .From the report there was still outstanding a considerable shortfall in the number of receipts as against transactions in each year";

Paragraph 22.2 — "Yes he [the Claimant] should have looked at the credit card slips received in August 2004 earlier, but subsequent thereto we find that he has been deliberately obstructed. It substantially mitigates that negligence. It does not undermine our finding therefore that he would have a reasonable belief in the making of his disclosure to Miss Marshall that the circumstances at least tended to show the respondent was failing or likely to fail to comply with a legal obligation"; and

Paragraph 22.3 — "Therefore he is not acting in bad faith, if his principal motive in raising the matter with the Housing Corporation is to draw attention to these concerns which he has a reasonable belief in holding. They are after all the regulatory body. We do not find that his principal motive is a malicious or vexatious one because it does not fit with our findings so far".

We are satisfied that these passages indicate that the Tribunal did indeed give careful consideration to this issue.

44. There is a second issue relating to the credit cards. The Appellant contended that the Respondent admitted in evidence that he had in his possession the credit card receipts. He had until then claimed he did not have them. It is alleged that the Chairman said that, in that case, the Respondent could not have a case that the disclosures relating to the credit cards were made in good faith and with reasonable belief. The Appellant's Counsel took that as an indication on which he was entitled to rely and did not reasonably cross-examine further on the point, and subsequently the Tribunal reached findings of fact inconsistent with that indication.
45. The Chairman commented upon this allegation in his response (paragraph 4). It is right that we set out the Chairman's response in detail:

"4. Credit card receipts in the Claimant's possession

4.1 1 do accept that during the afternoon of the 9^th June, and in particular at the end of it, I did ask of the Claimant as to whether he accepted that his failure to look into the carrier bag, which he had admitted during cross examination, meant that at the time he had been grossly negligent. 1 did find it difficult at that stage of the proceedings to understand why the Claimant should have made so much fuss about not getting credit card slips, and then fail to inspect them when provided with the carrier bag. I accept that this of course can go to the reasonableness of his belief in terms of the subsequent disclosures to the Housing corporation. But I reject the inference that by so doing, this unfairly gave Mr Frankenstein [sic] a false sense of security and therefore shut off in his mind lines of cross examination which he would otherwise have pursued~

4.2 I say that because Mr Falkenstein fails to mention that there was an adjournment of these proceedings between 9 June and 15 August. On 8 August, 1 held an urgent case management discussion on a contested application for further discovery by the Claimant. For reasons which' are covered by the minute of that CMD discussion, substantial further discovery was ordered and in particular going to the issue of the accounting file for the purposes of the Rogers Spencer report. It is also to be noted that at that stage it was planned that the Respondent would call Mr Renwick. When the hearing re-started on 15 August that discovery had just occurred and both Counsel wanted the morning to look at it. It then became obvious that the issue of the reasonable belief of the Claimant, in the context of not examining the credit card slips, was to be re-visited. The Respondent decided not to call Mr Renwick and instead, the tribunal heard from Mr Alcock a partner at Rogers Spencer. He was interposed part through the re-examination of the Claimant. The point is that the Claimant was re-examined extensively by Mr Edge on matters arising from the new documentation, and then emerging from the evidence of Mr Alcock, and including why he had not looked in the carrier bag. There was no objection from Mr Falkenstein.

4.3 By so doing, Mr Edge was able to successfully exploit the new documents which he also thoroughly explored in his closing submissions; and this persuaded the tribunal in terms of dealing with the issue of failing to look at the credit card slips and its interrelationship to the last two PIDA disclosures in the sequence. We dealt with why this negligence did not mean that the disclosures were not qualifying and protected in our fact finding at paragraphs 13.14 through to 13.16 and then paragraphs 20 onwards; and particularly paragraphs 22.2 and 22.3, and how therefore the "undermining substantially mitigates that negligence". The negligence is of course reflected in the contribution at paragraph 27.

4.4 Given the CMD, and all the additional discovery, and the calling of Mr Alcock and the re-examination of the Claimant, Mr Falkenstein must have been aware that the negligence point had not destroyed the Claimant's good faith for the purpose of "whistle blowing". He had every opportunity to seek leave to further cross-examine if he wished to. Indeed in the circumstances it would have been granted He chose not to do so. That Mr Falkenstein was alive to the fact that these issues were in play, is clear from his paragraphs 29 and 30 in his replies to Mr Edges submissions."

46. In addition, Mr Edge makes the point that the Respondent was cross-examined in some detail by the Appellant regarding his failure to reconcile the receipts that had been provided. It was also apparent this issue was to be the foundation stone of the Appellant's defence of lack of reasonable belief / lack of good faith although the matter had not been pleaded in the ET3 form nor had been mentioned in any of the Appellant's witness statements. Further the Appellant did not disclose the receipts which it alleged had been provided to the Respondent nor the Rogers Spencer report which set out how many receipts had been provided to it during its investigation, and it was that additional documentation referred to by the Chairman that caused the issue to be revisited, certainly by Mr Edge in re-examination.
47. We are quite satisfied that in asking questions during the Respondent's cross-examination the Chairman did not express a concluded view on the matter, and moreover when it became clear after the further disclosure that this was still very much a live issue it was open to Mr Falkenstein to seek leave to further cross-examine if he wished to, which he failed to do.

Fraud

48. Mr Falkenstein contends that in the course of setting out the issues at the beginning of the case the Chairman said this was not a case where fraud was alleged, it was a case of failing to comply with financial procedures and regulations. However the Appellant argued that the disclosure of "using the credit card for personal gain" made by the Respondent against Mr Renwick in a letter to the Housing Corporation on 25 April 2005 could support the suggestion that the "likely abuse" disclosure on 11 April 2005 to the same body was intended to create the impression that the Chief Executive was acting fraudently in his financial dealings. The relevance of that issue was that if the Respondent had no evidence or real belief to support an allegation of fraud, real belief in the truth of the allegation and good faith could not be established. He argued that notwithstanding the importance in relation to this allegation of fraud, the Employment Tribunal failed to make proper findings having fettered itself by its earlier insistence that this was not a case of fraud.
49. Mr Falkenstein deals with these matters further in his affidavit from paragraph 6 onwards:

"6. It occurred to me then, as it does now, that the learned Chairman may have been attempting to prevent the proceedings from being used to make allegations of fraud and dishonesty, which he may have felt were unnecessary, unpleasant or gratuitous. However, in seeking to contain the allegations of wrong doing to something rather more 'domestic' – the learned Chairman has closed off to the respondent an important area which it was entitled to explore in evidence. Had in fact the claimant been making allegations of fraud and dishonesty which he knew not to be true, the Employment Tribunal would have been entitled, if not compelled, to reach an entirely different conclusion from that which it reached.

7. In accordance with the Chairman's direction, I cross examined on the Financial Regulations in order to demonstrate that the disclosures did not, and could not amount to an abuse of those Regulations. During the second day of my cross examination I was being repeatedly encouraged by the learned Chairman not to question on some areas, but to focus on others – the Chairman did this by repeating what he saw as the issues. At one point one of the panel members mentioned that he no longer knew whether to make a note of the claimant's answers, because by the end of the Chairman's interventions, he was uncertain what to write.

8. Towards the end of his evidence on the 'alleged abuse of the Financial Regulations', the claimant indicated that in fact his actual belief was that the Chief Officer had been dishonest and fraudulent in his use of the credit card, and that his concerns were not about any alleged breach of the Financial Regulations.

9. The Employment Tribunal was invited to make findings upon those admissions, see paragraphs 78 - 80 of the respondent counsel's skeleton argument, which were clearly relevant to questions of good faith and reasonable belief.

10. The Employment Tribunal's reasons are silent on the point."

The Chairman's response can be seen from his letter paragraphs 2.4 – 2.7:

'2.4 As to the issue of fraud and dishonesty, the Respondent's Counsel appears to be confused. I draw the EAT's attention to paragraph 77 of his own closing submissions, thus: "At the outset of the hearing the Claimant (my emphasis) was at pains to stress that he was not making allegations of fraud and dishonesty against the CEO, but that his case was based on alleged breaches of the Financial Regulations. It is perhaps significant that these representations were made through the Claimant's Counsel as opposed to through the Claimant's evidence. Nevertheless, in reliance upon those representations, the Claimant was cross-examined upon his own case in respect of the Financial Regulations, which, for the avoidance of doubt, the Respondent says cannot be construed in the way alleged by the Claimant".

2.5 On the issue of fraud, in his reply to the Claimant's skeleton argument and at paragraph 9 he states, in the context of the Respondent not calling Mr Renwick. "That submission owes more to the extent to which the Claimant has sought to use these proceedings to vent his personal vendetta against Mr Renwick than it does to the matters the Respondent had a duty to prove. As was pointed out by the learned Chairman on numerous occasions, this was not a public enquiry into the internal affairs of the Respondent nor was it an enquiry into the integrity of its CEQ". (The underlining is my emphasis)

2.6 It was clear from the outset that there was a great deal of bitterness on both sides and considerable public interest. I did not want the tribunal's proceedings high-jacked into a quasi public inquiry.

2.7 As it is Mr Falkenstein was not "closed off" from cross-examining the Claimant on the issue that fraud and dishonesty could be expressly or impliedly inferred from the accusations that he made. My very extensive and more or less verbatim notes show Mr Falkenstein in the course of what was some 2½ days of cross~ examination going into considerable length in lines of cross-examination with the Claimant to show lack of good faith in terms of unjustified suggestions of alleged dishonesty, express or implied.'

50. In response Mr Edge submitted that Mr Falkenstein had conflated two distinct issues. Firstly, whether any of the protected disclosures were allegations of fraud, and secondly, whether at any other stage if the Respondent had made allegations of fraud against Mr Renwick such allegations could impinge on the issues of good faith and reasonable belief. He contended it was absolutely clear throughout the case that none of the protected disclosures suggested that Mr Renwick was guilty of fraud. However, it was argued by the Appellant that the letter of 25 April 2005 had made such an allegation and therefore should impact on the Tribunal's findings as to whether the protected disclosures were made in good faith and or with reasonable belief. The Tribunal dealt with this issue at paragraph 8.4 as follows:

"8.4 The Respondent argues that it is entitled to bring in the disclosures made on the 25 April 2005, and on the basis that if it they are not qualifying disclosures because they were made in bad faith, then that must impact on whether or not the preceding disclosures are protected by good faith. We accept that premise, because we can look at the surrounding circumstances in making our findings of fact. On the other hand we only accept the submission in that limited way, and because there is no evidence at all that the Respondent took into account these subsequent disclosures for the purposes of the dismissal."

However, the Tribunal did not agree that either the disclosures were made in bad faith or that the content of the letter of 25 April should impact on the issues of good faith or reasonable belief of those disclosures. As we previously indicated the Tribunal found that the Respondent's concerns were well-founded, reasonable and genuine.

51. The Tribunal did find that the letter of 25 April contain disclosures which had gone further than the previous ones. The Tribunal deal with this issue in paragraphs 27.4 and 27.5 of their decision as follows:

27.4 These disclosures went far further than the previous ones. The Claimant hardened up his allegations and was now (see bundle page 319) and in the letter to the Area Director, Margaret Allen of the Housing Corporation alleging: "Chief Executive had been using the Association's credit card for his personal gain (our emphasis) and for Carnival events." His other letter to Councillor Collins (bundle page 319) states. "I also highlighted to Richard Renwick a number of financial irregularities such as the association's credit card for his own personal use, without supporting invoices... I furthermore highlighted that despite being instructed by the Board of Tuntum and the Housing Corporation that it was ultra vires to spend the association's money on the Nottingham Carnival, he used the sum of £5,500 towards insuring the Carnival". The latter point is correct. But he is wrong to maintain that the Chief Executive had used the card for his personal gain. That follows from our findings so far and the report of Rogers Spencer. All the evidence shows that the irregularities were the failing to provide proof of expenditure and the ultra vires expenditure on the Carnival

27.5 As to what motivates the Claimant in terms of these disclosures: by now he was beleaguered and had been unfairly treated and could see his dismissal round the corner. He threw caution to the winds in what was an attempt to get the Housing Corporation to investigate; the aim obviously being that this would ward off his dismissal. Nevertheless he should not have effectively accused Mr Renwick of dishonesty."

52. We agree with Mr Edge that the Tribunal expressly found there were special reasons for the letter of 25 April due mainly to the extraordinary position in which the Respondent found himself in late April, but we are satisfied that although the Claimant had gone further than perhaps he should in that letter, it did not diminish the genuineness of his earlier allegations. However, because of that letter and other factors the Tribunal decided to reduce the basic compensatory elements by 25%.
53. Accordingly for the reasons that we have set out this appeal is dismissed.