United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR NIGEL LEY (of Counsel) Instructed by: Eurolawline Oakworth Hall Oakworth Nr Keighley West Yorks BD22 7HZ
For the Respondent	MR DAMIAN McCARTHY (of Counsel) Instructed by: Messrs Stevens & Bolton LLP The Billings Guildford Surrey GU1 4YD


 


SUMMARY

Victimisation Discrimination - Whistleblowing

By agreement, a preliminary hearing was converted to a full hearing. The Employment Tribunal finding of fact that protected disclosures were not made were not disturbed. It was not necessary to decide whether, if they had been, the Respondent's action was on the ground of such disclosure.

HIS HONOUR JUDGE McMULLEN QC

1. This case is about one aspect of whistle blowing where there has been disclosure of material which is to be protected in the public interest. The judgment represents the views of all three members who pre-read the papers. We will refer to the parties as the Claimant and the Respondent.

Introduction

2. It is an appeal by the Claimant in those proceedings against the judgment of an Employment Tribunal sitting at London (Central), chaired by Employment Judge Burger, over four days in October 2006, registered with reasons corresponding to those which were given orally at the hearing on 22 November 2006. The parties were represented respectively by Mr Nigel Ley and Mr Damian McCarthy of Counsel.
3. The central claim of the Claimant, since she had less than one year's service required for ordinary unfair dismissal, was that she had been employed and dismissed for whistle blowing about the wrongdoing of the Respondent for which no minimum service is required. The Respondent denied that there had been disclosure and denied that she was dismissed for that reason, contending that she was dismissed for what will broadly be described as performance.
4. The essential issue for the Employment Tribunal, therefore, was to determine the components in whistle blowing, which are in section 47 of the Employment Rights Act 1996 and dismissal under section 103A. Once a person makes a protected disclosure, it is unlawful to dismiss her or to cause her to suffer a detriment. The Tribunal decided against the Claimant on disclosure and against the Claimant's case on performance, upholding the Respondent's defence.
5. The Claimant appeals. Two other points were decided by the Tribunal, one in favour of the Claimant awarding her a bonus which she had claimed and which had not been paid, and the other in favour of the Respondent in an application it had made for costs of part of the preparation of the case. As it happens, the Tribunal appears to have taken a practical stance and the figures actually cancel each other out.

Full hearing of the Appeal

6. The appeal against the substantive judgment came before HHJ Clark. He decided on the sift that this appeal disclosed no reasonable prospect of success. In accordance with Rule 3, the Claimant was given the opportunity to submit a fresh Notice of Appeal or to have the case heard before a judge. The Claimant decided to do both. When the case came with a fresh Notice of Appeal before HHJ Birtles, he was of the same view, taken independently, as HHJ Clark was. He said that the Notice of Appeal based upon evidence of perversity discloses no point of law and is an attempt to re-argue the facts as a point of law.
7. A third opportunity was given to the Claimant and she expressed dissatisfaction with the judgment of HHJ Birtles and also of HHJ Clark and at a hearing where Mr Ley presented argument, Burton J, immediate Past President, took two steps. He operated the powerful tool in the hands of the EAT which was to call for further reasons from the Employment Tribunal on the performance issue. He also agreed that the other aspects should go to a preliminary hearing on which the Respondent was directed to make written submissions and was given the opportunity to attend and make submissions orally. Since that date, the employment judge has sent back additional responses pursuant to Burton J's order answering this question: "what were the serious concerns about the Claimant's ability referred to in paragraph 3.18 which the Employment Tribunal found to be well founded so as to have led to the dismissal of the Appellant?". The reply to this is jejune and unsatisfactory for, as Mr Ley submits, it simply points to two documents which were in evidence and which were before Burton J and gives no further insight into the Tribunal's thinking. That reply is before us for the first time, it not having been put to Burton J.
8. The other aspect of this case which is logically anterior is whether there was a disclosure. The appeal today has taken an unusual course because of the ready acceptance by both counsel of a pragmatic way forward. We indicated, having heard some argument, that we were minded to send the second point, the performance or causation point, to a full hearing. If that were so, the outcome would either be dismissal of the appeal or the only relief sought viz a rehearing before a Tribunal. We indicated that if we were to hear this case at a full hearing it would probably not be appropriate to remit to the Employment Tribunal for further reasoning but to send it to a different Tribunal.
9. We considered with counsel whether we should turn this preliminary hearing into a full hearing and to the benefit of their respective clients, they have saved further delay and costs because they have so agreed. The matter is also important because Mr Ley is giving services pro bono to the Claimant and obviously there are considerable advantages to all concerned if this matter is treated as a full hearing. So it was that these experienced counsel agreed to that practical way forward and for us to hear it. We descended upon the first argument of Mr McCarthy which was agreed would be dispositive of this case; that is, whether a disclosure was in fact made.

The facts

10. We can do no better than to record the judgment of Burton J at the Rule 3(10) hearing. In his characteristically thorough way, while allowing this matter to go to a preliminary hearing, Burton J set out in detail the facts and the issues. His judgment should be read with and incorporated into ours. The Rule 3 hearing, however, focused only upon the causation point. No suggestion was made by counsel at that hearing that there should be further examination of the Employment Tribunal's reasons on the disclosure point. This case proceeds on the basis of Burton J's judgment and the additional reasons given by the Tribunal on 10 August 2007.
11. In brief summary, the Tribunal found that the Claimant had been employed by the Respondent directly and not by an agency from 8 November 2004 to 14 October 2005, just short of one year. She was paid £77,000 a year and was in a very senior position within the business of publishing. The Claimant contended that she had made a protective disclosure in respect of two aspects which she alleged constituted wrongdoing by the Respondent. The first related to "Account number 21206", a double payments account, indicating discrepancy of some £250,000. The second related to the profit and loss account indicating a discrepancy of £1.3 million in respect of wages. The basis of the claim for whistle blowing was that disclosure had been made by the Claimant in telling Mr Lally on 15 August 2005, and again, in respect of the second alleged wrongdoing, on 24 August 2005, when four people in addition to the Claimant attended. The Tribunal made these findings:

"3.13 On 15 August 2005 the Claimant spoke to Mr Lally about the audit process and the IFRS issues. We do not find that the Claimant made a protected disclosure on this date. The Claimant alleged that in her ET1 that she mentioned a £250,000 balance on the 21206 account which was stated as being for bad debt provision when it was not actually for bad debt provision. This allegation does not appear in her witness statement or her document which she stated to be contemporaneous aide memoir of what auditors were asking of her.

3.15 On 24 August 2005 the Claimant attended a finance meeting to discuss the codes of charging individual employees to the profit and loss account. The Claimant attended this meeting 20 minutes late. In her ET1 the Claimant alleges that she stated that salaries and wages were overstated by £1.3 million in the profit and loss account. None of the Respondent's witnesses who had attended that meeting accepted that this was said. The Claimant's aide memoir does not make any reference to this. The Tribunal was also very surprised that there was no mention of this made in the Claimant's lengthy witness statement given as her evidence in chief. The Tribunal do not find that there was a protected disclosure on 24 August 2005. "

12. On the basis of those findings, the case was of course dismissed but the Tribunal went on to hold in relation to the causation issue that if it were wrong about disclosure then it would still have rejected the Claimant's case both for unfair dismissal and unlawful detriment.

The Claimant's case

13. It is contended on behalf of the Claimant that the finding by the Employment Tribunal is perverse. The Claimant appears to have been discredited in her evidence since the Tribunal did not accept it but the Tribunal failed in its duty to set out its findings on credibility. That is in respect of 15 August 2005. The Claimant did cite the disclosure in her claim form but it is accepted, as the Tribunal found, that there was no mention of this in her contemporaneous aide-memoire. Her witness statement incorporates the claim form and there was no specific necessity to deal with it. With a degree of tolerance upon which we have placed caveats, a passage from the Claimant's evidence was read into submission indicating it may arguably be said that she had made a disclosure on 15 August 2005.
14. Turning to the second disclosure, Mr Ley acknowledges that he is on weaker ground since there is a plain finding by the Tribunal that the other attendees of the meeting had given evidence rejecting the Claimant's account. Again, the aide-memoire diary makes no reference, nor does the witness statement itself except, as it were, by cross-reference. Nevertheless, on those findings, the Tribunal failed to set out its reasons, was in breach of its duty to decide issues of credibility providing justification for its view and made a perverse decision in the light of the material with which the Tribunal was presented.

The Respondent's case

15. The primary submission by Mr McCarthy is that since we are now at a full hearing the only record available to us is the documents produced, the Tribunal's reasons and its additional reasons. They do not give additional reasons in relation to point 1. There was an opportunity at the Rule 3(10) hearing for further reasons to be sought in the same order from Burton J, but none was taken.
16. This was an issue of fact and credibility. The Tribunal reached a conclusion relating to credit. Mr Ley did not dispute the critical analysis made by Mr McCarthy in his skeleton argument about the other ways in which the Claimant had put her case. It is hardly surprising, given the different ways in which the Claimant had presented her case, which involved disclosure to different officers in addition to Mr Lally, Ms Ann Townsend, Mr Geoff Wilmott and other members of staff, and at different times and dates and in particular, a detailed analysis following cross-examination, we are told, of the way in which the Claimant expressed her alleged disclosure to Mr Lally and the CFO.

Discussion and conclusions

17. Taking, as we do, only point 1, we prefer the argument of Mr McCarthy. The EAT will not overturn a judgment of an Employment Tribunal on a simple question of fact. The reasons given by this Tribunal are jejune and that is the reason why Burton J sent part of it off for further reasoning. The reasoning which came back takes the matter no further. But on this point the Tribunal has given some, albeit meagre reasons, for its finding of fact as to whether or not there was a protected disclosure. All other aspects of the statutory protection are in place here for it is not disputed that there was an allegation of wrongdoing under part VIIA of the Employment Rights Act. The Claimant, it is conceded, had a reasonable belief in that and no issue as to bad faith arose. What was missing was an actual disclosure. The Claimant, we accept from Mr McCarthy's careful analysis, put her case in many different ways. On appeal the only issue is whether or not the Tribunal erred in holding there was no disclosure on 15 and 24 August 2005 in respect of the two separate matters she raised.
18. That finding was open to it. It heard evidence and we have no doubt there was extensive examination and cross-examination on this matter. The Tribunal accepts that a claim was made in the claim form, which we infer is capable of being an allegation under the statute. But when the Tribunal says that this did not appear in her witness statement, it is, from the material before us, likely to be correct. But even if there were a cross-reference to the claim form, as appears to have been said, it is surprising that this was not made more explicit. As the Tribunal notes, the Claimant's own diary does not include this matter. We have been told by Mr McCarthy, without objection from Mr Ley, that there is very substantial detail of every single issue which concerned the Claimant while working at the Respondent but this is not one.
19. Thus the Tribunal was entitled to take the view which it did. Although we do not have the Tribunal's thinking on this, we would also hold that if the alternative cases made by the Claimant were before the Tribunal, as we assume they were since detailed written submissions were made, that would be a basis for it not to accept the Claimant's evidence. It would have been easier had the Tribunal directed itself in respect of that. Shorn of this matter, the Tribunal has made a simple finding of fact which was open to it to do.
20. We take the same view about the 24 August 2005 disclosure. Here the Tribunal has balanced the evidence of the Claimant against the Respondent's four witnesses. We can understand why a Tribunal might take the view that the Claimant was wrong and the Respondent's witnesses were right. Again, there is surprise at the silence in the aide-memoire or diary and at the absence of this matter in the witness statement.
21. It is one thing for a Claimant to refer to a claim form and to incorporate it. But by the time a case reaches a hearing, particularly in this case where, as the Tribunal told us, there was a very lengthy witness statement by the Claimant and the Claimant presented herself as a doughty opponent of the Respondent's witnesses, it is surprising that this matter was not expressly dealt with in that witness statement. This is a claim that £1.3 million appeared in the Respondent's P&L which should not have been there. It is a serious allegation. If it were part of her case for the 24 August 2005 disclosure, it ought to have been set out in the witness statement. We can understand why the Tribunal has come to the conclusion that its absence is very surprising.
22. On those two issues of fact, therefore, we see no error of law in the Tribunal's approach and by agreement of counsel that disposes of the case. If it is any consolation to the Claimant, the issue of causation would have been one which we would have been minded to send back to a Tribunal but we heard only short arguments and have not called upon counsel to develop that at a full hearing, although we doubt whether there would have been a good deal more to say about it.
23. We would like to thank both counsel for their considerable help in the practical steps taken to dispose of this case today. The appeal is dismissed.