United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr P Michell (of Counsel) Instructed by: Messrs Sherrards Solicitors 45 Grosvenor Road St Albans Hertfordshire AL1 3AW
For the Respondent	Miss N Ling (of Counsel) Instructed by: Messrs O.H. Parsons & Partners 3rd Floor Sovereign House 212-224 Shaftesbury Avenue London WC2H 8PR


 


SUMMARY

Unfair dismissal – Contributory fault / Polkey deduction

The Claimant was found to be unfairly dismissed. The Tribunal found that the employer had not acted reasonably under section 98(4) and made no Polkey and/or contribution deduction. The EAT found the Employment Tribunal did not deal adequately with Polkey and/or contributory fault issues.


 


HIS HONOUR JUDGE PUGSLEY

1. This is an appeal by the employer from the decision of the London (Central) Employment Tribunal promulgated on 6 March 2007. The Tribunal found that the Claimant had been unfairly dismissed and they awarded him a figure of £435 as a basic award and a compensatory award of £22,092.50. At the start of that hearing Mr Daley, the Claimant, had requested a further postponement because he said he wished to call witnesses. The Tribunal dismissed that application and the case proceeded on basis that Mr Daley had had adequate time to prepare the case and call any witnesses he thought necessary. The Tribunal pointed out that this had occurred on a previous occasion when the Claimant had sought an adjournment in November 2006 and that it really did behove him to have prepared the case so that it was ready on the appointed day.
2. The Claimant, Roy Daley, was employed by the United Grand Lodge from 26 July 2004 and his employment was terminated by summary dismissal on grounds of gross misconduct on 8 May 2006. The circumstances leading to his dismissal were that on Sunday 2 April 2006 Mr Daley together with other colleagues had worked overtime and they were paid double time for this overtime. They were emptying the contents of two large safes which contained archival material. A couple of days later the Respondent became aware that rather then working from 9-5 as had been claimed they had actually only worked from 9 until 12.30 or 1.30. The dispute as to whether it was 12.30 or 1.30 seems to turn on whether the timing of the CCTV was updated to take into account British summertime. In any event this Tribunal observed in paragraph 6 of the decision on any view there was still 3 ½ hours in which a payment had been claimed and made and no work done. Mr Daley's answer to the allegation was that there was an agreement that they would work that day until the job was completed and they would be paid for the whole day. He referred to this as a job and knock and said it was common practice within the Respondent's organisation. The Respondents did not accept this and he was dismissed.
3. The Tribunal set out its findings of fact from paragraph 6 of its decision to paragraph 15:

"6 Mr Daley was employed as Principal Security Officer. One of his functions was 'to manage a team of senior security officers and security officers'. On 2 April 2006 when he worked overtime with colleagues he was the most Senior Security Officer on duty and despite his instance that Mr McCarthy was in charge and responsible for overtime matters, we find that the Claimant was the person in charge by virtue of his position. As a consequence he was paid overtime at a higher rate than his colleagues and we therefore do not accept that he was simply 'a spare pair of hands'. There was a dispute as to whether the Senior Security Officers left the site at 12.27 pm (as recorded on the CCTV footage) or at 1.27 pm. The timing would depend on whether the system automatically updated following the advent of British summertime the Tribunal accepts the Respondent's evidence backed by our own knowledge of computers that systems do up date automatically and we are inclined to accept that the men left the site at 12.30 pm rather than 1.30 pm. However the Respondent's evidence is that this does not matter as even if the later hour had been the hour of departure, this was still a claim for 3½ hours of double time which was un-worked. Mr Daley suggested that the same practice had happened on 25 March, that is in the preceding week when Mr McCarthy, Mr Lambert and Mr John Wall had started the same job. He said that he had learned of this from John Wall. On Monday 3 April Mr Daley filled in overtime sheets for all of those who had worked on Sunday with him and the Respondents suggested that this appeared to be in unseeingly haste as the claims did not need to be submitted until the 12th of the month.

7 On Monday 3rd or Tuesday 4th and we do not know which, Mr McCarthy reported to Mr Frost saying that he was speaking also on Mr Lambert's behalf and that they were uncomfortable with the large overtime claim that had been presented for the preceding Sunday. The Respondents referred to Mr McCarthy and Mr Lambert as "whistleblowers" and subsequently this was the reason given to us why following a disciplinary procedure they were given a final written warning, and not dismissed. Mr Frost said that he investigated with the advice of Mr Howard (14, 15 and 16 of his statement) and Mr Carter. He held investigatory meetings on 28 April 2006 when all six were suspended. He was not able to explain to us why there had been such a lengthy delay since the incident had been reported except that he had a week's holiday starting 10 April which was followed by a week's sick leave.

8 Mr Frost said that he had seen the CCTV footage in the first week and that it showed that all six had left at 12.3Opm but that he was unable to get a copy until some weeks later. By this time footage for the preceding week had been lost. The Tribunal is not impressed by the lack of any contemporaneous notes regarding the start of the investigatory proceedings. As Head of Security we would expect Mr Frost to realise the importance of times of recording. Mr Daley was suspended on 28 April and was given a letter inviting him to a disciplinary hearing on 3 May (page 119). Mr Howard said that all staff were given the same letter. We understand that the disciplinary hearing was subsequently re-scheduled to 8 May.

9 On 8 May Mr Roger Carter held a disciplinary hearing for the Claimant, Mr Spurling, Mr McCarthy and Mr Lambert. That same day he dismissed the Claimant and Mr Spurling. Mr McCarthy and Mr Lambert's disciplinary hearings were adjourned to 16 May. On 16 May Mr Carter heard disciplinary cases for Mr Goodchild and Mr Haidarah both of whom had been on holiday on 8 May, and he reconvened the disciplinary hearings for Mr McCarthy and Mr Lambert. The outcome was that Mr McCarthy and Mr Lambert were given final written warnings and Messrs Goodchild and Haidarah were summarily dismissed.

10 At Mr Daley's disciplinary hearing on 8 May he was represented by a Transport and General Workers union official Alan Scott. Mr Daley presented a statement (page 120) which Mr Carter refused to read although read it 'sometime after the hearing' and confirmed that in his view 'there was nothing of any substance in that statement that would have affected my judgment on the day' (paragraph 29). This is reflected in the notes of the hearing (page 123). There is no suggestion that the Claimant was aware of the enquiry before he was called to the meeting on 28 April. He was summoned to the disciplinary hearing on 3 May by a letter of 28 April. On 1 May he wrote his statement (pages 120-121). It is addressed to Mr Carter. There was no suggestion that it was given to Mr Carter before the meeting at the disciplinary hearing on 8 May Mr Carter had been given Mr Frost's notes of his investigation (pages 122A to 122C) and these were dated 5 May. Mr Carter subsequently refused to accept Mr Daley's statement.

11 The Tribunal is concerned at the lack of fairness. The Claimant was not allowed to defend himself. He raised a number of questions in his document in particular that Mr McCarthy, Mr Lambert and Mr Wall had each left early on 26 March and (page 120) "John Wall assured me that he was told by Tom McCarthy that it was agreed with Mark Frost that they will be paid for (8) hour on a 'job and knock' basis, they finished work on the day at 14.00 hours and left, but claiming 8 hours at overtime rate".

12 On the second page of his letter he repeats the understanding that the 'job and knock' allegations were not read by Mr Carter, and there is no suggestion that any of the questions raised in Mr Daley's statement were put to other security officers. Indeed, the Claimant was summarily dismissed on the date of the disciplinary hearing whereas the disciplinary hearing for Messrs McCarthy, Lambert, Goodchild and Haidarah were not concluded until 16 May. It does not appear that any enquiries were made of Mr Wall, nor that Mr Frost was asked whether he had authorised 'job and knock'.

13 Mr Daley appealed on 17 May (page 126). His grounds of appeal were, amongst other things that the Respondent had not carried out an adequate investigation and they had apparently added a further allegation (for disclosure) to those set out in the letter summonsing him to the disciplinary hearing. In effect the Claimant had been dismissed for failing to supervise correctly and encouraging the submission of false overtime claims. Neither of these allegations were set out in the letter summonsing Mr Daley to the disciplinary hearing. This was chaired by Graham Redman who had not previously been involved. He read and re-read the documents provided to him. He sat with Diane Clemments Director of Library and Museum, and their decision was a joint one. The notes of the appeal hearing are at pages 139-142 in the bundle. Mr Redman said the appeal was a re-hearing as the Claimant was allowed to introduce new evidence. The disciplinary procedure does not say that the appeal is by way of rehearing, nor does the letter inviting Mr Daley to the appeal (pages 37 and 137). We were not shown a copy of the appeals procedure. The Tribunal is not satisfied that the appeal was a re-hearing. Firstly because Roger Carter attended and gave evidence presumably about the conduct of the disciplinary hearing and secondly because the Claimant was expected to present his grounds of appeal thereby having to overturn the finding. If there had been a re-hearing the Tribunal would expect that there would be a clean start, and for the employer to set out its case for the disciplinary.

14 Although Mark Frost said that he attended the appeal and answered questions from Graham Redman and Diane Clemment, there is no reference to his appearance in the appeal notes that we have seen. John Wall was called to the appeal and he confirmed Mr Daley's evidence about what had been the practice. He confirmed his case about the understanding of the arrangements on that day - ".... job done, go home and expect to be paid the 8 hour shift." (page 141).

15 Mr Wall spoke to Mr Red man after the meeting and said that he had lied during the appeal hearing when he said that he (Wall) had not left early. Mr Redman says that the appeal committee ignored his evidence as 'unreliable'. We are perturbed by this, and at three points in the notes, Mr Wall corroborated the Claimant's assertion that they did work on 'job and knock' basis. That is, they all expected to be paid for 8 hours or the full shift 'as a inducement'. This appears to have been supported to a certain extent by Peter Roberts although as his reference to the practice was many years out of date at this time his evidence would carry less force. Curiously the notes of the appeal hearing (page 142) record that at 3.25 pm Mr Redman suggested a '15 minute comfort break'. However the appeal note goes on to record that at 3.30 pm Jim Spurling's appeal meeting was held, at 3.35 pm Michael Goodchild's appeal meeting was held, and at 3.40 pm Brian Haidarah's appeal meeting was held. Each was reinstated with a final warning. At 3.45 pm Mr Daley's case was reconvened and he was told that his appeal had been dismissed."

4. The Tribunal directed itself according to the well-known propositions in Burchell v British Homestores [1980] ICR 303.
5. The Tribunal then set out its conclusions both as to the finding of unfair dismissal and the compensatory award at paragraphs 18 to 22 of the decision:

"18 The Tribunal is not satisfied that there was a proper enquiry leading to dismissal. At the disciplinary hearing Mr Carter refused to allow the Claimant to read his statement. There were matters relevant to his defence that were ignored. They should not have been. Further the Respondent did add a separate allegation to those they were said to be considering (compare pages 119 and 125). It followed that the Claimant was not aware of the case he had to answer and could not therefore properly address the allegations. As a consequence the Tribunal is satisfied that the dismissal was unfair. We do not accept that the appeal was by way of re-hearing and that it was therefore capable of remedying any defects in the disciplinary hearing. In any event the appeal itself was flawed as the panel appears to have disregarded John Wall's evidence and disposed of three appeals while they were purportedly considering the Claimant's case. There is also a suggestion that the Claimant was treated less fairly than others. Mr Howard confirmed that all Security Officers working on 2 April got the same letter (page 119) and presumably therefore they had to face the same allegation. However as we say above, different disciplinary findings led to the Claimant's dismissal. Consequently an element of disparity was introduced at the hearing without Mr Daley's knowledge and therefore it was easier for the Respondent to reinstate three employees by distinguishing their cases from that of the Claimant. This is explained at paragraph 23 of Graham Redman's witness statement and is reflected also at paragraph (c) of the letter giving the outcome of the appeal. While the Tribunal accepts that Mr Daley was the Principal Security Officer this distinction did not appear in the disciplinary allegations and furthermore we can see no adequate reason why Mr Redman and Ms Clemment took into consideration the Claimant's conduct at the hearing which was not recorded in the appeal outcome letter, and was in any event an irrelevant consideration. For all these reasons the Tribunal was satisfied that the dismissal was unfair.

19 The Tribunal announced the outcome to the parties and after a short deliberation Mr Daley confirmed that he was looking for compensation. Mr Mitchell then made a further submission with regard to remedy. He said that the Tribunal should either find that there had been contributory fault on the part of the Claimant or that there would have been a fair dismissal had a proper procedure been followed. The Tribunal should find that the Claimant was negligent in failing to check the Respondent's procedure for payment of overtime in these circumstances, and that 'job and knock' was not a practice. All the other Security Officers had confirmed that 'job and knock' did not exist and any proper investigation would have led the panel to this conclusion. The Tribunal should accept the evidence of Mr Frost who said he had never heard it. He submitted that the Claimant had made a false claim or alternatively had been negligent in checking the basis of the claim. The Tribunal should make a substantial deduction either on the basis of Polkey or contribution.

20 The Tribunal has considered the Respondent's submissions. We do not accept that Mr Daley did contribute to his dismissal by his conduct and we do not accept that there would have been a fair dismissal had the Respondent followed proper procedures. We are satisfied on the evidence we have heard that "job and knock" was wider than that accepted in his evidence by Mr Redman. We did not find Mr Frost a very persuasive witness and we are concerned by his apparent involvement in the practice, which may account for the vagueness of his evidence and his lack of enthusiasm initially in pursuing the disciplinary investigation. We note that the allegation of negligence levelled at the Claimant could also possibly be levelled at Mr Frost who did not after all counter-sign the overtime claims.

21 The Tribunal is satisfied that there is no basis for concluding that Mr Daley would have been dismissed because of his bad record in any event. Although we have heard a lot about disagreements, we have had no evidence before us that there has been any disciplinary history prior to the matters that we have been considering. We do not accept that he is likely therefore not to have stayed the course. On the contrary we accept that a man of his age would have done' everything that he thought reasonable to attempt to retain what after all does appear to have been a pleasant job, and we conclude and accept Mr Daley's evidence that he would have remained in post until he was 65.

22 We considered Mr Daley's evidence on his attempts to find employment. We are not satisfied that he has not mitigated his loss. He told us he didn't want a security post, and thought it time to look for something else. We heard that there had been no job offers to date, and that although he had looked for work he has only recently signed at one agency who told him that they could find him a job at £17,000 per annum within a fortnight. When we pressed him about this he said that he was confident that he could find such a position. We heard that his pay with the Respondent was £25,800 and we make the following award based on an approximate approach which cannot of necessity be precise. We have taken the guidance into consideration at section 1(2)(3) of the Employment Rights Act which direct us to a just and equitable approach."

6. Before us it has being argued that the decision as to unfair dismissal was flawed. A number of points had been put before us by Mr Michell to suggest that the Tribunal erred in finding the dismissal was unfair. With all respect to the detailed nature of Mr Michell's submissions we cannot accept that it is our task to take a myopic scrutiny of each of the reasons the Tribunal has given for finding a dismissal unfair and subject them to a minute dissection of the evidence. All decisions could have been better drafted but in the event we do not consider that the points that have been made which have challenged the various conclusions really amount to more than wishing to reargue matters that were proper to argue before the Employment Tribunal which do not in reality raise and identify issues of law which enable us to say that it is an error of law. Although as with most cases the drafting could have been more specific and detailed and is somewhat discursive, at the end of the day, we consider we would be usurping the function of the Employment Tribunal if we were to say that there was any fault in the reasoning that can give rise to allowing this appeal. We do not accept that if one took the decision in its totality it can be said that the Tribunal substituted its own view for that of the employer or that the decision can be said to be perverse. The test of perversity is a high one and we are united in the view that it was open to the Employment Tribunal to reach the decision that the dismissal was unfair. To attempt to summarise the detailed submissions and factual analysis of the documents before us seems inappropriate; it is a process which, on the facts of this case, could lead us into turning ourselves into a fact finding Tribunal.
7. In the case of Hadjioannou v Coral Casinos Ltd [1981] IRLR 352 the EAT considered the approach that Tribunals should adopt when considering the parity of treatment argument. That case is not an authority for the proposition that how other employees are treated can never be a relevant argument as to fairness. It is a timely reminder that Tribunals should scrutinise arguments based on parity of treatment with particular care because there will not be many cases in which the evidence supports the proposition that other cases are truly similar, or sufficiently similar, to afford an adequate basis for comparison. Moreover in his judgment Waterhouse J makes it clear that it is of the highest importance that flexibility should be retained and employers and Tribunals should not be encouraged to think that a tariff approach to an industrial misconduct is appropriate. However, on the facts of this case we consider the disparate treatment of the other employees was a matter to which the Employment Tribunal could have regard. We do not consider that this is one of those cases where it can be said that the Tribunal erred in law in construing that as part of the reason for their finding the decision was unfair.
8. The Tribunal announced its decision and then after a short deliberation Mr Daley confirmed he was looking for compensation and it seems that at that stage Mr Michell, who was appearing for the Respondent, made a further submission with regard to remedy. His submissions were that the Tribunal should either find there had been contributory fault on the part of the Claimant or that there would have been a fair dismissal had a proper procedure been followed. It was said that the Tribunal should find the Claimant was negligent in failing to check the Respondent's procedure for payment of overtime in these circumstances and the job and knock was not a practice. There is no reference in the decision to s.98A(2) although it is clear the Tribunal in paragraph 20 of its decision appears to be addressing this matter. We consider that Mr Michell does have a good point when he argues that the Tribunal did not really direct itself with clarity as to the issues that were involved. S.98A(2) provides that a failure by an employer to follow a procedure in relation to the dismissal of the employee shall not be regarded for the purpose of s.98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employer if he had followed the procedure. It is clear from the wording of the section that the burden on the employer is to show that on the balance of probabilities if the correct procedure had been followed the employee would not have been dismissed. Obviously an employer cannot rely on his own unreasonable attitude as a defence see Loosley v Social Action for Health (UKEAT/0378/06/DA). However, even if an employer does not discharge that burden the Tribunal still has to consider whether or not the employee contributed to the dismissal or whether there is a reduction in Polkey. We have been referred to a number of decisions but one of the most recent decisions of the Employment Appeal Tribunal CEX Ltd v Mark Lewis (UKEAT/0013/07/DA) conveniently summarises the authorities are on this point. At paragraph 12 of the judgment of HHJ Burke QC it is made clear that a Tribunal must first consider what would have happened but for the unfairness. If a Tribunal finds as a matter of probability the employer would have been dismissed if the relevant procedures had been followed the Tribunal must find the dismissal to have been fair. But if it is not established, on the balance of probabilities, the Claimant would have been dismissed in any event, the Tribunal must seek to determine where there was more than a minimal chance the employee would not be dismissed in which case the Tribunal must assess the percentage of such chance.
9. We are not seeking to lay down definitive guidelines but we question the wisdom of a Tribunal making a finding as to unfair dismissal without considering s.98A(2).
10. Although we are not suggesting that in any way the Tribunal's discretion should be fettered it does seem to us that it is much more appropriate, right at the outset of the hearing, for a Tribunal to approach any unfair dismissal case in this way. Is there a dismissal? If there is a dismissal was that unfair and subsumed within that question the considerations that apply in s.98A(2) should be decided. Was there a possibility, which was other than minimal, that the employee might have been dismissed albeit the employer cannot discharge the burden under section 98A(2). The Tribunal should consider whether the employee contributed to his own dismissal and possibly, it depends on the circumstances, make findings of fact as to whether quite irrespective to the circumstances relating to dismissal itself the employment might have only continued for a limited fixed period of time. An obvious example in the latter type of case would be where there was an unfair dismissal but by the time of the hearing the employers had shut down the business or was in the process of doing so.
11. We consider that although it could have been much more clearly expressed the Tribunal finding that on the balance of probabilities the Claimant would not have been dismissed if a fair procedure had been followed is one that we cannot disturb. We shrink from finding that we can say that there was an error of law in that finding.
12. However, we are bound to say that we do not consider the Tribunal has done justice to the arguments that had been put before them as to whether or not even though the employer could not discharge the burden imposed of showing that he would still have been dismissed if a fair procedure had been adopted deductions should still have been made. It is not clear that the issues of whether there was a chance which was more than minimal, that he might still have been fairly dismissed if a fair procedure had been adopted; the extent to which he contributed by his conduct to that dismissal and the question of how long that employment might have continued in any event have been properly considered. The Appellant (the Respondent before the Employment Tribunal) set out various matters, which were before the Tribunal, which suggested that for reasons unconnected with the circumstances of this matter his employment might have been terminated because of previous difficulties but none of these matters surface in the decision in any great detail although mentioned in paragraph 21. We consider that this is a case in which greater consideration should have been given to the Tribunal's findings that even though the dismissal was unfair there was still a Polkey deduction to be considered, there was still an issue as to the contribution and there was still an issue as to how long the employment might have lasted for reasons not related to the immediate circumstances of this dismissal.
13. The Tribunal based the compensatory award on the Claimant's losses to retirement age on the net difference between his earnings with the Respondent at £25,800 gross and the earnings which the Tribunal held he should have received within one month of dismissal namely £17,000 gross. The Appellant complains that the Tribunal ignored the evidence produced by themselves that there were other jobs which offered a range of salaries in excess of £17,000 and none had a salary that low. Complaint is made of the fact that even if it was appropriate to make an award of future loss of earnings for as long as 3 years and 8 months the Tribunal ought to have made some deduction for the fact of accelerated receipt, namely that the Claimant was receiving the manner as a capital sum and therefore had the advantage of interest thereon. We have been referred to the case of Melia v Magna Kansei Ltd [2005] IRLR 449 which sets out the general proposition that there should be a reduction of 2.5 per annum in respect of some of the Claimant's unfair dismissal compensatory award in order to make allowance for accelerated payment. That case also pointed out that as a Tribunal has no general power to award interest on compensation for unfair dismissal it is appropriate particularly where a discount is made for accelerated payment to have a premium for decelerated payment at the same rate.
14. The first point we make is the Tribunal has a discretion about the evidence before them and we hesitate to say that because there might be evidence that suggests that there were better paid jobs than the one they took as the template, which is what the Claimant said he was confident he could get a job at, that is an error of law.
15. We should note that there seems to be a misprint in the decision that paragraph 22 states we are not satisfied that he has not mitigated his loss. We think that the lawyer's propensity to double negatives has proved a poison chalice and what that means is that they were satisfied that he had not mitigated his loss because under loss of earnings they make the finding on the Claimant's evidence that he should have got a job within one month of the dismissal at £17,000 per annum.
16. We have decided that the appropriate course is to send this case back to the same Tribunal to consider the issue of a Polkey deduction and also whether or not the Claimant contributed to his dismissal and also to consider the issue as to whether or not the previous difficulties that his employment had meant that they should reconsider whether there was a limit to how long he would have been employed in any event. In view of that we consider that the Tribunal should also look again at whether or not there should have been a deduction for accelerated receipt.
17. We allow the appeal to the limited extent that the unfair dismissal decision stands but the original Tribunal should reconvene to consider whether there should be a deduction in respect of Polkey; a deduction in respect of contributory loss; any limitation as to the period in which the Claimant would have stayed in view of the history of his relationship with the Respondents and also to consider the issue of any accelerated payment. Moreover we are bound to observe that the Tribunal decision was on the basis that the Claimant would get a job. Our understanding is that at the time of the hearing in the Employment Tribunal he had no job but he now has employment.
18. We hope that despite our order that the case go back before the same Tribunal to reconsider those issues that we have raised the parties will explore the possibility of settling this matter without a further Tribunal hearing. The appeal is allowed to the extent indicated. The representatives have sent comments on the proposed draft judgment and where these involve minor textual matters they have been incorporated into the draft. For the avoidance of doubt it should be made clear that as set out in the judgment we consider section 98A(2) should be determined at the same time as the Tribunal consider whether there was an unfair dismissal. It seems that this Tribunal only considered this issue when considering remedy. However the Tribunal did making a finding at paragraph 20 and we do not consider we can disturb that finding for the reasons we have given. The fact that this finding was made when it seems that the Tribunal was considering remedy does not justify us in sending that matter to be further reconsidered by them. The appeal is sent back on the limited issue we have set out.