United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	Miss Claire Palmer (of Counsel) Instructed by: Messrs Sanders Solicitors 2 Queens Park Road Harold Wood Essex RM3 0HJ
For the Respondent	Mr Sean Donovan-Smith (Solicitor/Friend)


 


SUMMARY

Unfair dismissal – Reason for dismissal including substantial other reason

Employment Tribunal failed to consider or deal with Polkey principle when finding procedural defects in the handling by the Respondent of the Claimant's dismissal. This had been flagged up at a CMD and should anyway have been dealt with as a matter of fundamental importance: Red Bank applied. Remitted to the same Employment Tribunal.


 


HIS HONOUR JUDGE MCMULLEN QC

1. This case is about procedural defects by an employer in handling a dismissal which ought to have been the subject of a Tribunal's consideration when awarding compensation. It is known as the Polkey principle, Polkey v AE Dayton Services Limited [1988] ICR 142 (HL).
2. Our task in this case has been made considerably simpler by the exercise conducted by HHJ Peter Clark and Members on 14 March 2007 at a Preliminary Hearing when the appeal was fined down to one point, Polkey.
3. The case was there summarised:

"1. This is the preliminary hearing of an appeal by the Brentwood and Ongar Conservative Association and Others, Respondents before the Stratford Employment Tribunal, against the Judgment of an Employment Tribunal chaired by Mrs B A Bigot, dated 24 April 2006, for the Reasons promulgated on 14 July, upholding the Claimant, Mrs Hamilton's, complaint of unfair dismissal and awarding her the total sum of £4,090.25 in compensation after deducting 25 per cent from both the basic and compensatory awards in respect of the Claimant's contributory fault.

3. The Claimant was employed by the Respondent Association until her dismissal on 12 August 2004. She worked part-time. The Tribunal, at a full hearing, struck out the Respondent's defence to the complaint of unfair dismissal. They found, Reasons para 7.1.3, that whilst the Respondent showed a potentially fair reason for dismissal related to the Claimant's conduct that is that she installed a new piece of computer software at the Respondent's offices without authorisation; indeed contrary to an earlier instruction given to her on 5 August (Reasons para 9.2) - the dismissal was unfair on various procedural grounds identified at paras 7.1.3, 7.1.5 and 7.1.6 applying s98(4) of the Employment Rights Act 1996 (ERA). They noted that the dismissal took effect before s98A ERA came into force, otherwise the dismissal would have been automatically unfair under that provision for breach of the statutory dispute resolution procedures. They further upheld the Claimant's breach of contract claim in respect of her summary dismissal.

7. In the course of giving their reasons, the Tribunal hearing the substantive claim made reference to a case management discussion (CMD) held before a chairman, Ms Laidler, resulting in a written summary, following that discussion, being sent to the parties on 7 December 2005. At paragraph 7.1.4 of their Reasons they observed that paragraphs 9 and 10 of that summary succinctly set out the applicable law in the case of unfair dismissal where there are significant flaws in the procedure. We have, not been shown a copy of Ms Laidler's summary. Instead, we have this morning been taken to an earlier CMD summary following a hearing before a chairman, Mr Leonard, on 22 March 2005. At paragraph 6 that chairman sets out certain legal principles to be applied at the final merits hearing, amongst which he said this:

"If an Employment Tribunal should conclude that a dismissal is unfair on procedural grounds it will go on to ask itself whether a proper procedure, if adopted, might have led to a different conclusion."

That, it seems to us, is a fair summary of the so-called Polkey principle.

9. Despite the fact that this Tribunal found a number of procedural flaws in the approach taken by the Association to disciplining and finally dismissing the Claimant, they do not appear to have considered the Polkev principle, that is whether, had a fair procedure been adopted, there was a chance (if necessary expressed in percentage terms) that the Claimant would have been dismissed fairly. Bearing in mind their finding that the, reason for dismissal related to her conduct - conduct which they found contributed to that dismissal - it seems to us that the Tribunal was bound to consider the Polkey principle. A failure to do so, it seems to us, raises a reasonably arguable point of law to go forward to a full hearing.

l0. Even had the point not been raised at an earlier CMD, we accept Ms Palmer's submission that the question of Polkev should be considered by a Tribunal, if necessary of its own motion; see the Judgment of Tucker J in Red Bank Manufacturing Co. Ltd v Meadows [1992] IRLR 209). Thus, this ground of appeal will proceed to a full hearing."

Thus the case was listed for a one hour Full Hearing before ourselves. The parties here have been represented by Miss Claire Palmer of counsel for the Respondent and Mr S Donovan-Smith, Solicitor, for the Claimant. We have had an unusually experienced address to us, since both advocates are members of a Conservative association and, therefore, have insight into the workings of the Respondent.

4. The short point is whether the Tribunal, when it attended upon the issue of compensation, should have considered whether to make a deduction in accordance with Polkey. We agree with the approach set out by HHJ Clark citing Tucker J and Members in Red Bank Manufacturing Co Ltd v Meadows [1992] ICR 204. When we ventilated that with both advocates, there was no resistance. In any event, at the CMD helpfully called in order to define the issues, Polkey was flagged up, if not by citing the case itself, then citing the principle. See paragraph 9 in the CMD. That is cross-referred in the judgment of the Tribunal in paragraph 7.14.
5. We take the point made by both advocates in relation to the judgment in Moriki v General Council of the Bar [2001] EWCA Civ 1973 that if a principle is enunciated, it is not necessary to cite directly the case itself although it will usually be helpful. In this field, Polkey and the principle for which it stands is well known.
6. However, in this case, the Tribunal did not do enough to tell the parties whether it accepted the submission by the Respondent. The Respondent was in a difficult position because it had been struck out at the end of its evidence. No point is taken on its behalf today that that was an unfair procedure but it does have the following consequences. First, it meant that there was no opportunity to make a submission, relying on evidence on the subject of whether or not the Claimant would have been dismissed had the defects demonstrably shown by the Tribunal not occurred. Secondly, it is rightly accepted by Mr Donovan-Smith, that debarment of a Respondent affects its involvement in liability but does not debar it from making submissions and calling evidence upon the remedy: see Terry Ballard and Co v Ms A Stonestreet (EAT/0568/06/DA.
7. The difficulty faced by the Respondent in attacking, at a hearing, a possible finding of unfair dismissal on the basis that it should have been the subject of a reduced compensation creates further problems. In this case, the CMD flagged up that the Respondent might make such an argument. In exchanges between the Tribunal and Mr McLennan, a representative of the employers' association representing it at the time, he indeed made that point. Thus, whether by virtue of that ventilation of the issue, its consideration at the CMD or the judgment in Red Bank, the Tribunal was bound to make a finding on Polkey. It did not do so. As Tucker J put it, the fundamental point of the case remains untouched and, therefore, an error has been committed by the Employment Tribunal.
8. Both parties were anxious that this case should not take more of their precious resources than is necessary and both parties asked us to consider making a judgment ourselves in substitution for the Tribunal. We decline to do so.
9. In a case such as this, it is often difficult to do so. But the task is made more difficult by the debarment of the Respondent from the proceedings. It will be open to the Respondent on the remedy to call evidence and to cross-examine. We do not see the matter as straightforward, for we are told that within the association, there are those who would and would not have dismissed the Claimant for the infringements with which she was charged. This matter will have to be developed at a hearing. We acknowledge that the money involved is quite small and it may be useful if we record the Respondent's case to us which is that a procedure would have been quite lengthy and would have taken, at the most, three months during which time compensation would be forthcoming, the Claimant's net pay. At the end of that, there was at least a 75 per cent chance of the Respondent dismissing the Claimant fairly.
10. Those aspects are disputed but it does indicate, at least, the thinking of the Respondent should this case be the subject of conciliation, which we urge the parties to conduct. It is now back in the Employment Tribunal. The difference between them on that arithmetic is something like £1,500 and the award already made is £3,900. The other aspects of the award are not touched by this judgment.
11. It does seem to us in light of the strength of feeling of the association, there would very likely be a Polkey award but that, of course, is a matter for the Employment Tribunal. We are very grateful to the advocates today and we hope a realistic compromise can be reached.