United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Mr M Jones (Solicitor)
For the Respondent	Mr P Kilcoyne (of Counsel) Instructed by: Office of the Solicitor – Department for Work & Pensions New Court Room 543 48 Carey Street London WC2A 2LS


 


SUMMARY

Unfair dismissal – Contributory fault

Employment Tribunal took into account post-dismissal behaviour in assessing reduction for contributory fault.

Argument that Employment Tribunal had in mind assessing compensation as less because of after dismissal actions of Claimant dismissed not only on basis of what Employment Tribunal said, but on basis that Soros v Davison correctly applied: such actions are not to be taken into account.


 


THE HONOURABLE MR JUSTICE LANGSTAFF

1. This is an appeal from a decision of the Employment Tribunal at Bury St Edmunds promulgated on 20 June 2005. That Tribunal held that the Claimant, Mr Mullinger, was unfairly dismissed but concluded that he should receive only 25% of the compensation otherwise due because his contributory fault should be assessed at 75%. It also found that he had been wrongfully dismissed in that there was no contractual notice given to him. It dismissed a claim that he had made that he had been less favourably treated by reason of his disability but concluded that the Respondent was not justified in failing to make reasonable adjustments to a motorcar he used. It ordered the Claimant to pay £5000 by way of costs.
2. The only matter which we have to consider on this appeal was identified in an order which Burton J made at this Tribunal on 14 November 2006. It relates to the finding in respect of contribution. He permitted the appeal to proceed on 3 grounds only, all of which focused upon that, two relating to whether the conduct prior to dismissal, which the Tribunal appeared to have regard to in its findings, was properly taken into account by them in the light of the evidence, and the third whether the Tribunal had had regard to a matter which occurred after the dismissal and whether if they did so that was permissible.
3. The essential facts can be stated shortly, given the nature of the issues before us. Mr Mullinger was a long serving employee about whose conduct or capability there had been no complaint for some 30 years. He was then reprimanded over an investigation which he conducted into a case known as the C case. He was employed by the Respondent, at that stage, as an investigator. He investigated dubious claims made to the Respondent by individuals. He appealed against that reprimand. Before the appeal was finally determined on 16 December 2002, he was interviewed about two allegations in respect of his conduct. First, that he had refused to handover notebooks known as QB50 notebooks in which his work as an investigator had been recorded, and secondly that it was suggested that he had misused office equipment by using his computer for personal work and not for official work. As a result of that, charges were raised against him under the Respondent's disciplinary procedure.
4. On 11 February 2003 there was a hearing which was intended to be an oral hearing but Mr Mullinger refused to attend. On 16 April 2003 he was dismissed. The faults which the Tribunal found in that decision to dismiss were that the dismissing officer made the decision taking into account the reprimand which had been given but before the appeal in respect of that reprimand had been determined. Secondly, she could not reasonably have concluded that there was a material distinction to be made between the misuse of office systems and misuse of the email facility (as Mr Mullinger had claimed) but was aware of an allegation that others in the office were themselves misusing the computers during office hours and that this was apparently tolerated by management. She did not take account of the suggestion made by Mr Mullinger that he needed to practise typing, he being effectively one handed. She took into account his long service, not in order to excuse the penalty which she might otherwise have imposed upon him, but instead to his disadvantage taking the view not that a long serving employee should be given credit for a long and blameless career but rather that any person with such experience should have known better than to act as he did.
5. When the Tribunal came to its conclusions, which it set out so far as unfair dismissal is concerned, between paragraphs 22 and 27, it concluded that the failings taken together were sufficient to render the decision an unfair one. It then said this:-

"In considering the entitlement of the Claimant to a basic award, under the provisions of section 122 Employment Rights Act 1996 where the Tribunal considers if any conduct of the complainant before the dismissal was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the Tribunal shall reduce or further reduce that amount accordingly. In considering the entitlement of the Claimant to a compensatory award under section 123 of the Act, where the Tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."

6. We note that in setting out the effect of section 122 and 123 as the Tribunal did, it referred more than once to what was just and equitable in the context, and in the context only, of the extent to which an award otherwise to be made would be reduced by reason of contributory conduct. It continued as follows:-

"26. Through his obstinacy and intransigence, Mr Mullinger was in open challenge to the right of the respondent to manage its operation. Whilst, in the circumstances, the reasonable employer is unlikely to have taken a particularly severe view of the misuse of office equipment and would probably have concluded that a final warning was appropriate, that employer would have taken a serious view of the claimant's persistent refusal to return official documents. When the respondent could have insisted upon strict compliance, it made all reasonable efforts to reach an accommodation. Mr Mullinger maintained his refusal, despite being on plain notice of the possible consequences. Whilst not a factor in his dismissal, Mr Mullinger's reprehensible conduct, in secretly removing official papers from the respondent's office on the day of dismissal, is a factor that must be taken into account in considering what is, in all the material circumstances, just and equitable."

We note that the only prior reference in the flow of text to "just and equitable" was in relation to a deduction for contributory fault. It seems plain to us as a matter of the natural reading of that which the Tribunal said, that they were here considering the extent to which it was just and equitable to reduce the award, by reason of contributory conduct:-

"Taking all the above factors into consideration, the Tribunal assess the claimant's level of contribution to his dismissal at 75% and his entitlement to both a basic and a compensatory award is to be reduced to that extent."

7. It is realistically accepted by Mr Kilcoyne, who appears for the Respondent, that if the Tribunal did take into account, in coming to the 75% figure it did, not just the conduct of Mr Mullinger prior to dismissal but his reprehensible conduct as they called it after dismissal, their conclusion is necessarily flawed. He is right to take this view. He is driven to it by the terms of section 122 and section 123 itself. In section 123 of the Employment Rights Act 1996 subsection 6 provides:-

"Where the Tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."

8. What the contributory conduct has to cause, or contribute to, is the dismissal. It is therefore obvious that actions of the employer after the dismissal, cannot be taken into account in assessing contributory conduct. However, despite this, Mr Kilcoyne makes two submissions to us. He must succeed on each if he is to do as he aims to do, namely to uphold the conclusion of the Tribunal. The first is to submit that by reference to "just and equitable", the Tribunal had in mind not the reference to "just and equitable" contained in section 123(6) or for that matter in similar terms in 122(2) but were instead making reference to the general principle upon which a compensatory award may be made. That, as set out in section 123(1), is to make an award which is:-

"Of such amount as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the Claimant in consequence of the dismissal in so far that loss is attributable to action taken by the employer."

He says that the Tribunal expressly noted that the reprehensible conduct, as they called it, was not a factor in Mr Mullinger's dismissal. Since in paragraph 25 the Tribunal had posed the test correctly whether the dismissal was to any extent caused or contributed to by any action of the complainant, they must have had it in mind that by those words what they then were going to go on to discuss was not something which caused or contributed to the dismissal. They could not therefore have had in mind that what they were describing should be taken into account in respect of contributory fault. The only way therefore to explain the reference to "just and equitable" is that they must here have been referring to the words of section 123. Therefore, they reduced the overall award, then they further reduced it by reason of contributory conduct. The assessment at 75% is a pragmatic and broad brushed assessment of the combined affect of those two percentages.

9. We simply cannot accept that that is what the Tribunal were doing. We have these reasons. First, upon a natural reading of the paragraph, it is not what the Tribunal said. We conclude that the Tribunal were apparently referring to the test for contributory fault. Secondly, if that is what they had in mind they would have made reference to section 123(1), where the "just and equitable" approach comes from. Thirdly, they would have made it plain that they were carrying out two different and distinct exercises the first being an assessment of loss; yet it should be noted that the assessment of loss was to be heard later, as they recognised in immediately succeeding paragraph. Fourth a single assessment of 75% is appropriate to an approach to deduction for contributory fault and not the two stage approach which Mr Kilcoyne's submissions suggest the Tribunal must have had in mind.
10. If, as he did not, Mr Kilcoyne had succeeded in persuading us, that was what the Tribunal had intended in paragraph 26 even thought they did not clearly say so he would then have faced a yet further hurdle. That is whether it is open to a Tribunal to reduce an award under section 123(1) upon the just and equitable principle in respect of conduct which did not take place during employment but afterwards. This is, in effect, to impose a principle of penalisation, a penalty, in an exercise which is otherwise one of compensation, compensatory. Mr Kilcoyne supports the necessity for such an approach by reference to some dramatic and extreme examples. He suggests, for instance, that if an employee furnished by his employer with a letter of dismissal were to react so badly that he thereupon assaulted or, in Mr Kilcoyne's example, killed the messenger for delivering the message, it surely would be the case that a Tribunal would be entitled to take that conduct into account in reducing the award otherwise to be made in respect of an unfair dismissal.
11. The problems for this submission are threefold. First, as it seems to us, it does not take sufficient account of the wording and the overall provisions of the Employment Rights Act 1996. The wording requires a Tribunal to focus upon the loss. That is the purpose of the words "having regard to the loss sustained" and the reference to the loss being "attributable to the action of the employer". It is thus plain, it seems to us, that the relevant circumstances to which a Tribunal has to have regard are the circumstances in so far as they relate to the loss and its assessment. So far as the general pattern of the Act is concerned, it is to set up first by section 123(1) what is to be the amount of an award. It is then by 123(6) to reduce it if there is contributory conduct. If Mr Kilcoyne were right, there would be no need for Parliament to have constricted contributory conduct to being conduct prior to and causative of dismissal. Secondly, he has to face the fact that it is well established in the employment sphere that the decision of Soros v Davison [1994] UKEAT 22 is the leading authority. Indeed, exercising his duty as an advocate, Mr Kilcoyne himself referred us to a case decided recently by Mr Recorder Underhill QC as he was, of Rowe & Cohen v Rankin judgment delivered on 4 December 2002 UKEAT/0739/01 in which the Soros approach was adopted.
12. In the relevant passage Tudor Evans J for the Tribunal considered whether or not a Tribunal assessing compensation for dismissal should ask itself whether it was just and equitable that the employee should be compensated fully or at all for that loss, bearing in mind all the circumstances, including the fact if it be so that during his employment the employee had been guilty of such misconduct as would have justified his dismissal had the employer been aware of it. He continued to say:-

"We do not consider that the House of Lords intended to lay down the far reaching proposition that any misconduct, even if committed after the employee had been dismissed, should be brought into the scales of assessment. In our view section 74(1) of the Act," [the reference there is to a predecessor of the section with which we are here concerned,] "is concerned with events which existed during and not subsequent to the contract of employment. That is the plain meaning of the language of the subsection, and the contrary construction is not supported by taking a single sentence from the speech of Vicount Dilhorn out of its context. A contrary construction could lead to unacceptable results."

13. What is submitted to us is that that general principle though correct is subject to an exception. The exception Mr Kilcoyne wishes to create is based upon a principle, as it would have to be, that where acts are closely connected with employment but occur afterwards, an Employment Tribunal may take them into account in assessing the compensation which it is just and equitable to award. The way he put it was "conduct so closely connected with employment it should be considered by the Tribunal". This cannot, it seems to us, be established simply upon a temporal basis. It must be a close connection in matters other than time. But one of the difficulties with the argument is that for any matter to be taken into account as a relevant circumstance it must relate either to the loss, as we would accept section 123 considers, or to employment. The case after all arises in an employment sphere and conduct with no connection to employment could not possibly be considered and was plainly not being considered in the Soros case.
14. In argument it appeared to us that one of the reasons why Mr Kilcoyne drew our attention to an example as extreme as that he posited, was to invite the ordinary sense of justice of any court to draw the conclusion that such disreputable and criminal behaviour should affect the financial relations between the employer and the employee concerned. His contention however, is that the route by which it should do so is by calculation of compensation under section 123. We would merely observe that if it is the case that there is some financial consequence to an employer of some action taken by a former employee after his employment has ceased then there are remedies in law which an employer may be able to take advantage of. It does not seem to us to be at all unjust to leave the employer to those remedies. It does seem to us to strain the language of the statute, to be inconsistent with Soros, and to establish a principle with uncertain boundaries if we were to accede to his submission. Accordingly, though it is not directly relevant to our decision which technically is based upon our reading of the Tribunal's decision, had we been required to decide this issue, we would have found against the Respondent on this basis too.
15. It follows therefore, that there is no need to consider, in this appeal, whether the grounds advanced at grounds (i) and (ii) of the Notice of Appeal are or are not well founded. The appeal must succeed, on the basis of the ground (xx) which is that the Employment Tribunal wrongly took into account, post dismissal action in assessing contributory conduct.

Remedy

16. We were invited by the Respondent ourselves to determine what the proper deduction for contributory fault should be. We have declined to do so. We consider whereas we might make such a determination, we do not have before us the evidence with which to properly draw the balance between, on the one hand the enormity of the employer's conduct and on the other the culpability of the employee's relevant conduct in causing or contributing to his own dismissal. It is upon that balance that that assessment critically depends. It is, as Mr Jones for Mr Mullinger pointed out to us, a matter quintessentially within the province of an Employment Tribunal. Accordingly we have decided that this matter must be remitted to an Employment Tribunal. Should it be the same Tribunal, or another one? We are invited by Mr Jones to remit the case to a fresh Tribunal. We think that that is the right course. We do so because there may be administrative problems in restoring the present Tribunal. Secondly there are outstanding appeals against decisions of the current Tribunal. We do not think that the parties and particularly Mr Mullinger would necessarily have confidence that the Tribunal would reach a fresh decision in line with the remission which was not influenced by the fact that it had taken the approach it did in that the first hearing. This works two ways too. It seems to us to be open to a Tribunal on remission to come to whatever conclusion it feels appropriate as to the degree of contributory fault, whether that be more or less than 75% depending upon its proper reaction to the submissions made to it, the evidence before it and its proper assessment of the position.

The scope of the remission

17. In our view, the scope of the remission needs to be narrowly constrained. It is to consider the extent to which the culpability of the Claimant, Mr Mullinger, should reduce an award of compensation for unfair dismissal by reference to two respects. First, his conduct in refusing to return official documents, those being the QB50 forms. Secondly, his conduct in using his computer for personal work. That however has to be balanced, as we have noted, against the enormity, as we have called it, of the Respondent's conduct however the Tribunal assess it, in the respects set out at 22 to 24 of the reasons of this Tribunal. It will be, as we see it, for a Tribunal to decide at a case management hearing the scope of the evidence and submissions which it will be necessary for it to have before it in order properly to resolve the issues that arise upon this remission. We leave it open to the parties whether they seek from the Tribunal service a venue other than Bury St Edmunds. We are not, we think, able to give any such direction nor do we give any indication about it. So that is something which the parties may themselves wish to consider.
18. On that basis this appeal is allowed, with that order.