United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR S. MAGUIRE (Solicitor) Creideasach Employment Law Specialists Office 21, Inglewood House Inglewood Alloa FK10 2HU
For the Respondent	MR D. FRANK BURR (Advocate) Instructed by: Innes Johnston Solicitors 5 – 7 Commercial Road Leven Fife KY8 4LE














 


SUMMARY

1. Statutory dismissal procedure. Tribunal erred in finding that there had been a failure to follow the procedure where they had considered only whether or not it had been followed prior to the date of the employers' decision to dismiss. They should have considered whether or not it had been followed in the course of the procedures that were followed by the employers after that date and before the claimant was actually dismissed since those procedures were capable of remedying the earlier deficiency.
2. Tribunal also failed to have proper regard to apparent anomaly between date of "dismissal" meeting and termination date in circumstances where an agreement was reached between parties involving payment of money to claimant.
3. Interpretation of paragraph 13(1) of Schedule 2 to the Employment Act 2002.


 


THE HONOURABLE LADY SMITH

INTRODUCTION

4. This is an appeal from the judgment of an Employment Tribunal sitting at Glasgow, Employment Judge, L Doherty, registered on 27 May 2009. The Tribunal found that the claimant was unfairly dismissed and that a monetary award of £19,088.54 was payable to the claimant. The finding was that the dismissal was automatically unfair under and in terms of s.98A(1) of the Employment Rights Act 1996.
5. We will continue to refer to parties as claimant and respondents.

BACKGROUND

6. The respondents service and maintain gym equipment for a single client, "TechnoGym". The claimant was employed as a service engineer. The claimant's father is the uncle of the respondents' managing director, Mr Ian Park.
7. The claimant's employment commenced on 11 November 2004. It was terminated by letter dated 24 September 2008.
8. In November 2007, the claimant received a first written warning. It related to failure to complete worksheet forms as a result of which the respondents were not paid for work done. He received a second written warning on 18 March 2008. It again related to proper completion of worksheet forms; he had used badly photocopied forms and again the client had refused to pay for work done. The second warning was a final warning and he was told that his work ethic would be monitored over the next three months.
9. In June 2008, the claimant was one of a team of 4 service engineers who travelled to Belfast to service gym equipment at sites there. Prior to departure he was told that he was to use a particular type of worksheet and that they were to be completed individually so that the engineer responsible for the work shown on the worksheet had to complete and sign it. The respondents' Ms McCaig, an after- sales manager, went to Belfast to audit the work. She found evidence of unsatisfactory work in several significant respects which included that treadmills at a site in Adelaide Street had not been properly serviced. She took photographs which demonstrated the unsatisfactory state of the treadmills.
10. The treadmills which had not been properly serviced were recorded on worksheets signed by the claimant and by one other engineer, Mr Sewell. Ms McCaig spoke to the claimant. He said that the worksheet that he had signed did not necessarily reflect those treadmills which he had serviced.
11. On 16 June 2008, Ms McCaig and Mr Ian Park called three of the members of the team who had done the work in Belfast into the office, including the claimant. The fourth team member, Mr Rooney, was not at work that day.
12. Mr Sewell, who had less than one year's service, was summarily dismissed. Mr Somerville, another member of the team, was given a final written warning, penalised with a deduction of a week's wages and sent back to Belfast, at his own expense, to carry out necessary work on equipment that had not been properly serviced. The following day, 17 June, the same sanctions were imposed on Mr Rooney.
13. When he was called into the office on 16 June, the claimant told Ms McCaig and Mr Ian Park that the whole trip to Belfast, "had been like a circus" (Tribunal , paragraph 24). On being shown a photograph of a treadmill and the worksheet which he had signed that bore to relate to it, he denied that he was responsible for having serviced it. He said that the sheets had been filled out in such a way that it did not follow that the engineer whose signature was on a sheet had serviced the equipment shown on it.
14. The claimant was told by Ms McCaig that he was dismissed. She referred to the previous warnings that he had received. He said that they could not dismiss him that way as they had to follow a procedure. Ms McCaig said then they would do that "and they would sack him on another day." (paragraph 25). The next day the claimant attended the respondents' premises. Ms McCaig asked him why he was there to which he said no-one had told him what was happening. In answer she told him he was suspended.
15. The respondents then wrote to the claimant by letter dated 17 June 2008, in terms which the Tribunal accepted satisfied Step 1 of the statutory dismissal procedures (Employment Act 2002 Schedule 2,Part 1).
16. A Step 2 meeting took place on 20 June 2002. By that date, the claimant knew exactly the nature of the respondents' concerns; he was on a final written warning in terms of which he had been told his work ethic would be monitored over the next three months. During that period Ms McCaig had seen evidence, in Belfast, of his work not being performed to a satisfactory standard; treadmills had not been serviced properly there and he had signed a worksheet in respect of such treadmills. He had accepted that the whole trip had been like a circus. The claimant's father attended the meeting with him and it became very heated. He referred to Ms McCaig as being "nothing but a silly girl". At one point there was a break in the meeting. We were advised that some agreement was reached, the details of which were unclear but involved the claimant being retained as an employee for a further three months. He was to be paid during that period without having to perform any services for the respondents, while he looked for other work, which is what happened according to what we were told. The Tribunal record this as being "a discussion around what payment would be made to the claimant on the termination of his employment." (paragraph 35) which we have to say raises a question in our minds as to whether what occurred at the meeting was that parties' differences were resolved on the basis of an agreed termination rather than that the claimant was dismissed; hence perhaps the fact that the letter of 24 September 2008 does not advise the claimant that he is dismissed but, rather, advises him that his "services are no longer required." Unfortunately the Tribunal leaves matters there and gives no further consideration to the evident anomaly that whilst the claimant's case seemed to be that he was unfairly dismissed at a meeting on 20 June 2008, his employment did not come to an end until some three months later. We observe, in passing, that if the claim concerned a dismissal in June, it would have been time barred, the ET1 not having been presented until towards the end of the year (the date stamp on our copy of the ET1 is not clear but would appear to be a date in December).

Relevant Law

17. The statutory dismissal procedure set out in Part 1 to Schedule 2 of the 2002 Act provides:

"1(1) The employer must set out in writing the employee's alleged conduct or characteristics or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.

(2) The employers must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

2(1) The meeting must take place before action is taken , except in the case where the disciplinary action consists of suspension.

(2) The meeting shall not take place unless –

(a) the employer has informed the employee what the basis was for including in the statement under paragraph (1) the ground or grounds given in it.

(b) The employee has had a reasonable opportunity to consider his response to that information.

(3) The employee must take all reasonable steps to attend the meeting.

(4) After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against that decision if he is not satisfied with it."

18. Part 3 of schedule 2 sets out the general requirements about procedure and, at paragraph 13(2) provides:

"(2) Meetings must be conducted in a manner which enables both employer and employee to explain their cases."

19. Paragraph 12(1) provides:

"If either party fails to comply with a requirement of an applicable statutory procedure , including a general requirement contained in Part 3of Schedule 2, then subject to paragraph 9(2), the non completion of the procedure shall be attributable to that party and neither party shall be under any obligation to comply with any further requirement of the procedure."

20. The phrase "action taken", in subparagraph 2(1) is not further defined but we agree with the analysis of HHJ Judge Burke QC in the case of Smith Knight Fay Ltd v McCoy UKEAT/0245/08 at paragraph 32, where he explains:

"32 …in our judgment, 'action taken' refers to the action which the employer is contemplating, either dismissal or disciplinary action other than dismissal. This view is supported by the fact that the modified procedure in Chapter 2 of Part 1 of Schedule 2 to the 2002 applies, by regulation 3(2) of the Regulations, to limited circumstances in which the dismissal has already occurred; it contained no reference to any requirement in relation to 'action taken'. 'Action taken', in our judgment is not some lesser step such as informing the employee that he is going to be made redundant."

21. We, similarly, conclude that the fact that an employer decides that a particular sanction is going to be imposed is not "action taken" within the meaning of subparagraph 2(1). It is a mental step but it does not constitute the action involved in imposing that sanction, even if the fact of having taken that mental step is communicated to the employee. That action takes place only when the sanction is actually imposed. Thus, as in the case of Smith Knight Fay, if an employer fails to carry out the statutory procedure before reaching a view as to sanction, all is not necessarily lost. In Smith Knight Fay that meant that there had not been an automatically unfair dismissal where there had been no statutory procedure in advance of a meeting at which the employee was told that he was going to be made redundant because after that meeting the statutory dismissal procedure was followed. As Judge Burke put it, matters were retrieved.
22. It is only sensible that the correct analysis is as above. It means that, in circumstances such as in the present case, provided dismissal has not actually occurred or disciplinary sanction been imposed, it leaves open the possibility of the employer changing his mind as the statutory procedure is worked through. That accords with the underlying purpose of the statutory procedure, namely the resolution of employment disputes without recourse to the Tribunal.
23. So far as paragraph 13(2) and 12(1) of the Schedule is concerned, they too support the underlying the purpose of the statutory procedures. Meetings which take place under it are expected to be carried out in a civilised manner. The emphasis is on the manner in which the meeting is conducted. It is not simply a question of asking whether each party managed to explain their case. If, for instance, one party has had to do so in the face of insults being thrown at him, that is not a manner which is likely to achieve the underlying purpose of the statutory procedure and we do not consider that that would constitute compliance with paragraph 13(1).
24. If the statutory dismissal procedure is not completed wholly or mainly due to the fault of the employer, any ensuing dismissal is held to be unfair (Employment Rights Act 1996 s.98A(1)), generally referred to as "automatically unfair" and unless there are exceptional circumstances, any award must be increased by at least 10 per cent (and not more than 50 per cent): Employment Act 2002 s.31.
25. A separate matter which arose in this case is that of whether or not an employer can fairly conclude that a member of a group of employees has been guilty of gross misconduct where it is possible to identify that at least one of the group was responsible but not possible to identify which member(s). On the authority of Monie v Coral Racing Ltd [1981] ICR 109, it is plain that the employer can do so, even although he cannot determine anything further than that the employee was a member of that group.

The Tribunal's Judgment

26. The Tribunal considered that what happened after 16 June 2008 was a "sham" (paragraph 68). They concluded:

" …at the point when the respondents took the action of deciding to dismiss the claimant (Step 2(1)) they had failed to comply with Step 1(1) or 1(2) in that they had not written to the claimant setting out his alleged misconduct before the meeting took place. They also failed to comply with a (sic)2(2)(a) in that they had not informed the claimant at that point the basis of including the statement of the claimants alleged misconduct." (paragraph 67)

27. Thus, although they were satisfied that the letter of 17 June 2008 was sufficient for the purposes of step 1, in the Tribunal's view, it came too late. A fatal failure to follow the statutory procedure had already occurred. They were also of the view that even if they were wrong about that, the respondents had failed to follow step 2(4) in that they had not advised the claimant of his right to appeal. They did not accept, as had been argued, that by that stage the claimant had failed to comply with Regulation 13(2) of the 2004 Regulations relieving the respondents of their obligation to do so. They considered that, despite the way that the meeting was conducted, there was no breach because parties had nonetheless managed to explain their respective cases.
28. Separately, the Tribunal considered whether a Polkey deduction was appropriate but concluded that it was not because the respondents had not dismissed the claimant for a reason that was substantially fair ( paragraph 80). The Tribunal's reasoning in that regard seems to have been that the respondents ought to have taken account of Mr Rooney supporting what the claimant said about the way in which the worksheets were completed in Belfast and that there was no evidence to point to "the claimant as opposed to Mr Sewell" (paragraph 84) having serviced the treadmills in question. Had they done so, they would, the Tribunal found, have had to conclude that there was insufficient evidence to support a fair dismissal of the claimant.
29. The Tribunal did, however, conclude that the claimant had contributed to his dismissal to the extent of 10 per cent in respect that he had not done what he had been told to do and complete the worksheets so as to show that the engineer signing had in fact carried out the servicing referred to on them.
30. The Tribunal awarded an uplift under s.31 of the 2002 Act, of 20 per cent. The reason for them awarding an uplift in excess of the minimum was that the whole procedure was, they said, a sham.

The Appeal

31. Mr Maguire addressed us under reference to three grounds of appeal although he did not press his first ground. It had been drafted on the basis that Mr Mooney's evidence had been that his understanding was that each engineer had completed his own worksheet for equipment serviced by him, at Adelaide Street. However, the note of evidence provided by the Employment Judge did not, as he ultimately accepted, support that proposition.
32. Mr Maguire's second ground of appeal was, put shortly, that the Tribunal had erred in finding that the respondents had failed to comply with the statutory dismissal procedure in respect that their findings conflicted. On the one hand they had found that the decision to dismiss was taken on 16 June but that was not consistent with him being told he was suspended on 17 June or with the findings regarding the meeting on 20 June. Further, he referred to the evidence regarding the agreement reached between the parties during a recess from that meeting which included the claimant being kept on the books and paid for a further three months, without though, having to work for the respondents. The Tribunal had not given proper consideration to its implications. In all the circumstances, the finding of automatically unfair dismissal was not sustainable.
33. Thirdly, Mr Maguire submitted that the Tribunal's finding that the claimant was only culpable to the extent of 10 per cent was perverse in the circumstances. Matters were such that the claimant's culpability, against the background of a final written warning, was of a high degree and such that if the correct procedure had been followed he was likely to have been dismissed in any event. He referred to the fact that Mr Sewell had been dismissed and to the sanction imposed on the other two engineers who had the good fortune not to be on final warnings. In support of his submission anent perversity, Mr Maguire referred to Securicor v Smith [1989] IRLR 356, Walpole v Vauxhall Motors Ltd CA No: LTA 98/5444 CMS3,and London Borough of Harrow v Cunningham [1996] IRLR 256 in support of his submission that the distinction between the sanctions imposed on the claimant and his fellow engineers were understandable and reasonable in the light of their different circumstances. He also relied on the case of Monie v Coral Racing by way of questioning whether the Tribunal had erroneously taken the view that the claimant could not be held responsible for the poor workmanship; on the authority of that case, he could.
34. For the claimant, Mr Burr reminded us that questions of credibility and reliability were for the Tribunal of first instance. There was no question of inconsistency or confusion about Mr Mooney's evidence and the first ground of appeal should be rejected. As to the second ground, Mr Burr very frankly acknowledged that there were difficulties. He accepted that, as in the case of Smith Knight, an employer might be able to correct earlier failures in compliance with the statutory dismissal procedures. However, in this case, the note of the meeting of 20 June read as if it was an appeal hearing; the claimant thought that it was. Then, the letter he received in September did not advise him of his right of appeal. So far as the issue of contribution was concerned, that was a matter for the Tribunal and their decision was not perverse. He referred to Compass Group v OkoroUKEAT/0055/08.and Foster v Somerset County Council [2004]. EWCA Civ 222. Whilst he accepted that 10 per cent seemed on the low side, it was not perverse.

Discussion and Decision

35. We are satisfied that the Tribunal has fallen into error. They asked themselves the wrong question ; it was not a matter of considering whether or not the respondents had held the meeting referred to in the statutory dismissal procedure prior to reaching the decision that they reached on 16 June , namely that they were going to dismiss the claimant. The correct question was to ask whether, prior to "taking action" to dismiss or otherwise discipline the claimant, they had held the meeting. They failed to have regard to the fact that there is a clear distinction to be drawn between deciding to do something and acting to implement such a decision. So long as it is unimplemented the possibility of revocation or alteration of the decision remains. Thus, an employer may be able to cure an earlier failure to take the first two steps of the statutory dismissal procedure; matters are not necessarily irretrievable, as explained in the case of Smith Knight.
36. The Tribunal found that the whole disciplinary process was a sham. The basis for that seemed to be that the respondents had decided to dismiss the claimant on 16 June 2008 and notwithstanding the Step 1 letter and Step 2 meeting that followed, they adhered to that decision; shortly put, the working through of the statutory procedure made no difference. The respondents did what they had earlier intended to do. Even if they are right about characterising the respondents' approach as being a sham, a matter which may well be relevant when considering whether or not a dismissal is fair for the purposes of s.98(4) of the 1996 Act, it does not mean that the statutory procedures were not complied with. There is nothing in them to prohibit an employer from deciding, before the Step 1 letter, that he is going to impose a particular sanction, or to prohibit him from, in due course, imposing that sanction. Provided he follows the steps set out and conducts himself in a civilised manner at the step 2 meeting, there is no risk of him being found in breach of the statutory requirements simply because he ultimately does what he had always intended to do so far as disciplining the employee is concerned. It may well be thought that that just goes to show, once again, the unsatisfactory if not impotent, nature of these provisions but that is not to say that such circumstances amount to a breach of them. Whether or not the Tribunal considered that the proceedings were a "sham" was, accordingly, irrelevant to a consideration of whether or not the dismissal was automatically unfair. It did not mean that the procedure had not been followed.
37. Turning then to the third stage of the statutory procedure, we accept that the letter of 24 September 2008 does not advise the claimant of his right of appeal and thus, on the face of matters, that would seem to indicate that there had, nonetheless, been a failure to comply with the whole of the statutory dismissal procedure so leading to the conclusion that, as the Tribunal found, there was an automatically unfair dismissal. The matter of uplift in the award to the claimant would, however, have to be regarded in that light, not in the light that it was regarded which involved the Tribunal viewing the whole disciplinary procedure as a sham and awarding a higher than minimum uplift on that basis. As we have already commented, their findings of the procedure being a "sham" are irrelevant. On a remit, the question of whether or not paragraph 13(1) of Schedule 2 was complied with will require to be addressed, this time bearing in mind that the focus should be on the manner in which the meeting was conducted, as we have discussed above.
38. Separately, however , we are persuaded that Mr Maguire's submission that the Tribunal erred in failing to have regard to the evidence about the agreement that was reached at the meeting on 20 June 2008, in conjunction with the fact that the claimant's employment did not actually come to an end until three months later, was well founded. We would refer to the concerns we have expressed about this matter earlier in this judgment. The Tribunal required to consider the evidence about what happened in that meeting carefully and ask whether what happened was that a settlement of the differences between these family members was reached at that meeting which meant that the claimant's employment came to an end by way of agreed termination rather than dismissal.
39. As regards the third ground of appeal, we can see that there is force in the respondents' argument. His contribution could, we accept, be regarded as being not merely a matter of having failed to follow the specific instruction about the worksheets but as being in a position whereby, on the authority of Monie, he could properly have been held responsible by his employers for the poor workmanship since it was plain that there were only two engineers who had worked on the relevant treadmills and they had no means, in the circumstances, of determining who had worked on which one. The Tribunal's view on contribution was reached on the basis that the only contributory conduct was in relation to the worksheets; in that respect he was 20 per cent responsible. Allowance ought, however, to have been made for the poor workmanship element and whilst mindful of the warnings in cases such as those referred to by Mr Burr to the effect that this Tribunal should not readily interfere with an Employment Tribunal's assessment of contribution percentages, we are persuaded that this is one of the cases where it would be appropriate to interfere.
40. We will, however, refrain from going further and determining the appropriate percentage deduction because we consider that in all the circumstances, there requires to be a remit to determine whether or not the claimant was dismissed unfairly and if so, then to determine remedy. Given the comments that this Tribunal made to the effect that the respondents' actions were a sham, we do not consider it appropriate to remit the case to them. The remit will accordingly be to a fresh tribunal.

Disposal

41. We will pronounce an order upholding the appeal and remitting the claim to a freshly constituted Employment Tribunal to determine whether the claimant was dismissed unfairly and if so, to determine remedy.