United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JAMIE MORGAN (of Counsel) Instructed by: Geoffrey Forrester & Co. 4 Grange Road West Jarrow Tyne and Wear NE32 3JA
For the Respondent	MR MARTYN WEST (Representative) Peninsula Business Services Ltd Litigation Department Riverside New Bailey Street Manchester M3 5PB


 


SUMMARY

UNFAIR DISMISSAL – Reasonableness of dismissal

Employee driving a school bus – Dismissed at the insistence of the local authority because of allegations of sexual abuse which he denied and in respect of which the police had declined to prosecute – Tribunal held dismissal to be fair because the employer had done its best to persuade the Council to change its stance and had no other work for the employee.

Appeal dismissed – The decision of the Court of Appeal in Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812 did not mean that an omission expressly to refer to the injustice caused to an employee by a dismissal at the behest of a third party was an error of law, provided that it was apparent that the tribunal had taken that factor into account.


 


THE HONOURABLE MR JUSTICE UNDERHILL (PRESIDENT)

INTRODUCTION

1. This is an appeal from the decision of an Employment Tribunal sitting at Newcastle-upon-Tyne, chaired by Employment Judge Shepherd, dismissing the Appellant's claim of unfair dismissal. The Tribunal's decision was given at the hearing on 27 October 2008, and written Reasons were sent to the parties on 19 November 2008.
2. The Appellant was represented before us by Mr Jamie Morgan of counsel, and the Respondent by Mr Martyn West (of Peninsula Business Services), neither of whom appeared below.

THE FACTS

3. The Respondent company is a charity which provides transport services to community and voluntary groups in South Tyneside. From September 2004 until his dismissal in April 2008 the Appellant was employed by the Respondent driving a minibus which took disabled children to school. The service was provided under a contract with South Tyneside Metropolitan Borough Council ("the Council") and the Respondent. Under the terms of the contract the Council had an absolute right to veto the employment of particular individuals in providing the service.
4. The Appellant had initially received a clean bill of health on the mandatory Criminal Record Bureau checks; but in January 2008 the Council brought to the Respondent's attention information which it had received alleging that the Appellant had been involved in the sexual abuse of his two young nieces. The Respondent's General Manager, Ms Elsy, put those allegations to the Appellant, who said that they related to a period several years back; that he had done nothing wrong; and that the matter had been investigated by the police in 2004, who had decided not to prosecute. However, on 4 February there took place what is described as an "Incident Evaluation Meeting" convened by the South Tyneside Safeguarding Children Board: it was attended by representatives of the school and the Council Social Services and Legal Departments, by a police officer, and by Ms Elsy. The Appellant was not asked to attend. According to the Tribunal:

"The professionals agreed that abuse had taken place with the claimant's nieces and that the claimant could no longer work with children."

5. In the light of that decision the Respondent felt obliged to suspend the Claimant with immediate effect. However, the decision taken at the meeting was not itself final, and the Respondent made further representations to the Council: the precise formal position is unclear, but the Tribunal described the Respondent as having "appealed" to a "reviewing officer". As it found (see para. 5.6 of the Reasons):

"Ms Elsy wrote to the reviewing officer on 11 February 2008 explaining that the Claimant had provided a letter from Northumbria Police dated 7 July 2004 stating that they were taking no further action against him. Ms Elsy wrote to the council trying to persuade them not to exercise their contractual right to veto any of the respondent's employees working on the contract. The reviewing officer eventually responded that a clear decision had been made at the meeting that the council would not be prepared to allow the claimant to resume his driving duties."

6. There were meetings between the Appellant and Ms Elsy on 14 February and 5 April, and there was also correspondence between the Respondent and the Appellant's solicitors. The Appellant's solicitors suggested that the Respondent should "offer [him] a different route whilst [the] investigations were carried out", but the Respondent said that that was not possible: the only possible alternative driving work that it had was for a PCV driver, but the Appellant did not have a PCV licence (he had not needed one in order to drive the school minibus). The Respondent had in fact funded the Appellant through a PCV course in 2004, but he had twice failed the test.
7. In those circumstances, the Respondent decided that it had to dismiss the Appellant, and it did so with immediate effect (although paying him money in lieu of notice) by letter dated 7 April 2008. That letter summarised what had happened at the meeting of 4 February and continued:

"As you are aware, South Tyneside Safeguarding Children Board has written to us inform us that they no longer wish for you to continue working, in your current capacity, on their premises and that you cannot work with children. We have sought to persuade our client that you should be allowed to work on their premises; however they have insisted that you be removed.

In our meeting of Saturday we discussed alternative employment and I informed you that we had no other roles. Unfortunately, as there is no other work available for you I regret to inform you that your contract of employment has been terminated for some other substantial reason, namely third party pressure."

The letter also referred to the suggestion that the Appellant could be given other work and repeated that the only available work was for a PCV driver. It continued:

"As discussed on Friday Connect have no other vacancies available, which you understood."

THE TRIBUNAL'S REASONS

8. The Tribunal's Reasons are fairly short. At para. 5 they set out the facts broadly as we have summarised them above. Para. 6 contains the Tribunal's conclusion, as follows:

"In this case the claimant accepted that the reason for his dismissal was third party pressure. This comes within some other substantial reason and is a potentially fair reason for dismissal under Section 98(2) of the Employments Right Act 1996. However the Tribunal must then consider whether the dismissal was fair in all the circumstances. There was no allegation of procedural unfairness and the Tribunal is satisfied that a fair procedure was followed. The Tribunal must also consider whether it was reasonable to dismiss the claimant as a result of the third party pressure. In this case it was clearly reasonable. The respondent's contract with South Tyneside Council allowed the council to veto employees working with children on the contract. The respondent had no choice. The respondent did appeal the decision and looked into the situation. Both the respondent and the claimant were fully aware of the reason the council refused to allow the claimant to work on the contract. There was a good reason for the dismissal and the respondent acted reasonably. The respondent has done all it could reasonably be expected to do to assist the claimant and prevent him from losing his employment. The decision to dismiss the claimant was within the band of reasonable responses available to the respondent. In these circumstances the Tribunal is satisfied that the dismissal was not unfair."

THE GROUNDS OF APPEAL

9. The Appellant's Notice of Appeal raises two grounds.
10. Ground 1 is that:

"There is no evidence in the Written Reasons that the Tribunal, when considering whether the Appellant's dismissal was fair, considered the nature and extent of the injustice caused to the Appellant by dismissing him when (1) he denied the allegations of sexual abuse (2) he was a man of good character (3) he was never subject to criminal proceedings arising out the allegations of sexual abuse (4) the allegations were of a historic nature (ie, predated his employment by the Respondent)."

In support of that pleading the Appellant refers to the decision of this Tribunal in Greenwood v Whiteghyll Plastics Ltd (UKEAT/0219/07), which applies the earlier decision of the Court of Appeal in Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812: we consider the effect of those cases at paras. 15-19 below.

11. Ground 2 is as follows:

"There is no evidence in the Written Reasons that the Tribunal, when considering whether the Appellant's dismissal was fair, considered whether it would have been reasonable for the Respondent, prior to dismissing the Appellant, to have paid the Appellant to attend a Public Carry Vehicle License training course to seek to obtain his PCV license at the third attempt, and if successful, thereby retain his employment with the Respondent."

12. As regards ground 2, the Respondent in its Answer contended that no point had been taken before the Tribunal to the effect that it should have continued to employ the Appellant pending a further attempt on his part to obtain a PCV licence. The Employment Judge by letter dated 4 August 2009 has confirmed that:

"The question in ground 2 was not raised by the claimant in his application to the Tribunal, his written statement or in his evidence given at the hearing. When asked why he thought that the respondent's actions were unfair he merely said that he just thought it was unfair. The question was not raised by the claimant's representative during the cross-examination of the respondent's witness, Janet Elsy, the general manager … There was no evidence given to the Tribunal that the claimant had ever raised the question of a further training course with the respondent and this was not mentioned at the hearing by or on behalf of the claimant."

13. In these circumstances we are satisfied that ground 2 is not available to the Appellant on this appeal; and Mr Morgan did not seek to argue otherwise. He did however submit that the point made in ground 2 remained relevant as an illustration of the kind of point that could have been made if the Tribunal had not misdirected itself in the manner alleged under ground 1: as to this, see para. 22 below.

DISCUSSION AND CONCLUSION

14. The present case is an instance of what is characterised in the books as "dismissal at the behest of a third party". In a typical case of this kind a client of the employer, for whom the employee is working, takes against the employee for some reason - good or bad - and tells the employer that he is not willing to have the employee work at his premises, or on his business, any longer: he will not generally insist on dismissal as such, but in many cases the employer may have no other work that the employee can do, so that dismissal is (subject to the points discussed below) an inevitable consequence of the client's stance. The client, not being the employer, is under no statutory obligation to act and will not generally give the employee the chance to put his case. The employer may follow a fair procedure; but that will be of limited value since he is not the real decision-maker. The employee thus suffers a clear procedural injustice. If the client's decision is in fact unreasonable, the injustice will also be substantive.
15. In the present case the Appellant clearly suffered a procedural injustice: he had no chance to put his case to the meeting or otherwise to the Safeguarding Children Board. We were not informed about the procedures adopted by the Board or the Council in cases of this kind, nor (rightly, because the only claim here is against the employer) were we referred to the recent case-law about disclosure of allegations of child sex abuse or "listing": see, e.g., R (X) v. Chief Constable of the West Midlands Police [2005] 1 WLR 65 and R (Wright) v Secretary of State for Health [2009] 1 AC 739. But if it is indeed the case that a man may be judged unfit to work with children, and can lose his job in consequence, because of a conclusion reached on evidence which he does not see, by people whom he does not know and has no chance to address, applying criteria which he has no chance to challenge, and without any effective appeal, that is a deplorable state of affairs. It is of course a separate question whether the decision taken at the meeting and adopted by the Council was substantively unjust, i.e. whether its conclusion that the Appellant was unfit to work with children was unreasonable. As to that, the Tribunal was not, and nor are we, in a position to make a fair judgment. The Respondent, understandably, did not take up the burden of trying to prove that the Council's decision was correct or reasonable: it was not its own decision, and it might well not have been in a position to call the supporting evidence even if it had wished to do so. (We note, however, that Ms Elsy wished to continue employing the Appellant and was not prepared to let the Board's decision go unchallenged.) Accordingly the case proceeded before us on the basis that the Appellant had suffered at least a procedural injustice and possibly a substantive injustice as well, for essentially the reasons identified under ground 1.
16. Cases of this kind are not very comfortable for an employment tribunal. Nevertheless, it has long been recognised that the fact that the client who procures, directly or indirectly, the dismissal of an employee may have acted unfairly, and that the employee has thus suffered an injustice, does not mean that the dismissal is unfair within the meaning of the statute. That is because the focus of s. 98 of the Employment Rights Act 1996, and its statutory predecessors, is squarely on the question whether it was reasonable for the employer to dismiss. S. 98 is (so far as relevant) in the following terms:

"(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show—

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it— 

(a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) relates to the conduct of the employee,

(ba) is retirement of the employee,

(c) is that the employee was redundant, or

(d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.

(2A)-(3A)    …

(4) In any other case where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)—

(a)     depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b)     shall be determined in accordance with equity and the substantial merits of the case.

(5)     …".

It must follow from the language of s. 98 (4) that if the employer has done everything that he reasonably can to avoid or mitigate the injustice brought about by the stance of the client – most obviously by trying to get the client to change his mind and, if that is impossible, by trying to find alternative work for the employee – but has failed, any eventual dismissal will be fair: the outcome may remain unjust, but that is not the result of any unreasonableness on the part of the employer. That may seem a harsh conclusion; but it would of course be equally harsh for the employer to have to bear the consequences of the client's behaviour; and Parliament has not chosen to create any kind of mechanism for imposing vicarious liability or third party responsibility for unfair dismissal.

17. That is, we believe, the correct analysis in principle and well-established in the authorities. In the first reported case of this kind, Scott Packing & Warehousing Co. Ltd v Paterson [1978] IRLR 166, Lord McDonald in this Tribunal pointed out that third party pressure to dismiss could constitute a substantial reason justifying the dismissal of the employee so as to fall within the terms of what is now s. 98 (1) (b), and he continued (para. 6 at p. 167):

"In our view an employer cannot be held to have acted unreasonably if he bows to the demands of his best customer in a situation such as this even if the customer's motive for seeking the removal of the employee was suspect."

In the later case of Grootcon (UK) Ltd v Keld [1984] IRLR 302 Lord McDonald qualified that observation by pointing out that in such a case the requirements of what is now s. 98 (4) still need to be satisfied (see para. 9 at p. 303); but the basic underlying point recognised in Scott Packing remains sound. An illustration of a case where a dismissal was held to be fair notwithstanding that the outcome was, or may have been, unjust to the employee can be found in the decision of this Tribunal, chaired by Judge McMullen QC, in Martin v J F X-Press Ltd (EATS/0010/04) (and see also Davenport v Taptonholme for Elderly People (EAT/1559/98) and Community Living Concepts v Aitken (EAT/0188/01)).

18. We turn to consider the effect of the decisions in Dobie and Greenwood relied on in the grounds of appeal.
19. In Dobie the appellant was a security guard employed by the respondent at Liverpool airport, which was owned and operated by the local authority. He fell out with the chief security officer, who was employed by the authority, and the authority said that he could no longer work at the airport. The case proceeded on the basis that there was no fault on the part of the appellant. The respondent had no equivalent work for him but offered him a lower-paid job nearby. He refused and claimed that he had been unfairly dismissed. The industrial tribunal dismissed his claim. An appeal to this Tribunal was likewise dismissed: it was held that the tribunal had misdirected itself but that the decision should nevertheless stand. The Court of Appeal allowed his appeal and remitted the case to the industrial tribunal. Sir John Donaldson MR gave the leading judgment. At pp. 815H – 816A he said this:

"The industrial tribunal, not very surprisingly I think, came to the conclusion that the pressure being exerted by the county council could have justified the dismissal of the employee. But they then directed themselves as follows. They said:

'This is a case in which it is, perhaps, necessary to stress at this early stage what the functions of this tribunal are; what it can do and what it must not attempt to do. The test which the tribunal has to apply is, in the words of the statute, whether the employer acted reasonably, and section 57(3) of the Act … clearly directs the tribunal to focus its attention on the conduct of the employer and not on whether the employee suffered any injustice; and the question has to be answered by reference to the circumstances known to the employer at the time of dismissal.'"

Sir John then set out the terms of s. 57 (3) of the Employment Protection (Consolidation) Act 1978, which are substantially identical to those of s. 98 (4) of the 1996 Act; and continued (at p. 86C):

"On the face of it it is an astonishing proposition that in determining that question, namely whether the employer acted reasonably or unreasonably in treating the reason as a sufficient reason for dismissing the employee, in accordance with equity and the substantial merits of the case, one should have no regard to any injustice suffered by any employee; and, indeed, the appeal tribunal has held [1983] ICR 478 that that is a misdirection."

Having analysed how the Tribunal came to say what it did, he said (at p. 817 B-D):

"... I agree with the appeal tribunal that the industrial tribunal misdirected themselves when they adverted to section 57(3) in those terms. In deciding whether the employer acted reasonably or unreasonably, a very important factor of which he has to take account, on the facts known to him at that time, is whether there will or will not be injustice to the employee and the extent of that injustice. For example, he will clearly have to take account of the length of time during which the employee has been employed by him, the satisfactoriness or otherwise of the employee's service, the difficulties which may face the employee in obtaining other employment, and matters of that sort. None of these is decisive, but they are all matters of which he has to take account and they are all matters which affect the justice or injustice to the employee of being dismissed."

Sir John then went on to consider whether, in the light of that misdirection, it was necessary for the case to be remitted to the tribunal: his reasons for holding that it was necessary to remit are often cited but it is not necessary to consider them for the purpose of the present appeal.

20. In Greenwood the facts were essentially similar. The respondent employers were shopfitters. One of their clients was Morrisons, the supermarket chain. Morrisons complained about the standard of the claimant's work and refused to have him on their jobs. Their stance was at least arguably unfair, but the respondents could not offer him other work and he was dismissed. His claim was dismissed in the employment tribunal. In the judgment of this Tribunal the key passages from Dobie were referred to, and Silber J. said this, at paras. 20-24:

"20. In our view, the difficulty for the respondent in this case is that there is no evidence that that the Employment Tribunal considered what Sir John Donaldson MR considered that they should have done when he said in Dobie (supra) at page 817 (with our underlining added) that:

'In deciding whether the employer acted reasonably or unreasonably, a very important factor of which he has to take account, on the facts known to him at that time, is whether there will or will not be injustice to the employee and the extent of that injustice.'

21. The reasons of the Employment Tribunal do not show that there was any evidence on this point adduced to it on this "very important factor" and neither the notes of the respondent's disciplinary hearing on 21 July 2006 nor the initial letter of dismissal of 27 July 2006 nor the decisions at the respondent's appeal hearing on 7 August 2006 show that this factor relating to the injustice to the employee or the extent of the injustice was considered by the respondent in the way described by Sir John Donaldson in Dobie (supra) in the passage set out in paragraph 16 above or indeed in any way at all.

22. We considered whether we could conclude as the Court of Appeal did in Retarded Children's Aid Society v Day [1978] ICR 437 in respect of a Code of Practice that:

'So reading between the lines, it seems to me that, although not explicitly stated in the Reasons, this Tribunal very probably did have all the considerations in mind which it is not suggested they may not have had.'

(per Lord Denning MR at page 443G).

23. In our view, this case is very different as there was nothing in the documents or anywhere else to which we were referred to show that the injustice to the appellant was considered by the respondent in deciding to dismiss the appellant or to dismiss his appeal from that decision or was even the subject of any evidence to the Employment Tribunal. Thus we reach the conclusion in spite of Miss Gower's clear submissions that the Employment Tribunal did not consider as the Court of Appeal said that they should have done and what they described as the "very important factor" of whether the respondent considered the injustice to the claimant and the extent of the injustice in deciding whether the respondents acted reasonably. This we regard as an error.

24. It might well have been that if the injustice to the claimant had been considered, it would have made no difference to the decision of a reasonable employer. It is noteworthy that the Employment Tribunal did not make any finding criticising the claimant's work or his capability. Perhaps the injustice suffered by the claimant from dismissal was so severe that the respondent might have been able to reorganise its business so that the claimant could have taken the job of the person who took over his job with the respondents working for Morrison's or perhaps there could have been a reorganisation of jobs so that the claimant could have worked for another customer of the respondent in place of an existing employee who would have taken over the claimant's job or how else the matter could have been resolved without the claimant being dismissed. We do not know how the Employment Tribunal would have determined this matter and it cannot be shown that after considering these matters, it would have inevitably have upheld the dismissal of the claimant as being a fair one."

21. Mr Morgan did not submit that the reasoning of either Dobie or Greenwood was inconsistent with the position as we have summarised it at para. 16 above: he acknowledged that it is implicit – if not indeed explicit – in both judgments that there will be cases where, however much the employer "takes into account" the injustice to the employee caused by the third party's stance, he may still reasonably decide to dismiss - see in particular Sir John Donaldson's recognition in Dobie (at p. 817 C-D) that the factors to which he draws attention cannot be decisive. As we understand it, the effect of Dobie is that in a case where the client's stance appears liable to cause injustice, the tribunal must consider with special care whether the employer had indeed done all that he could to avoid or mitigate that injustice: in a case of patent injustice it may be necessary for an employer to pull out all the stops. But Dobie cannot be read as holding that, even where the employer has done all he could to avoid or mitigate the injustice but without success, an eventual decision to dismiss will be unfair. (We should note that the Court of Appeal in Dobie was not referred to Scott Packaging, or to Grootcon, which had been decided only three days previously - although the decision of this Tribunal in Dobie had been cited in Grootcon, and was indeed the basis of the qualification referred to at para. 17 above. But the point is not significant, since we see no radical inconsistency between the cases.)
22. Instead, Mr Morgan made a more limited submission. He submitted that the decisions in Dobie and Greenwood establish that a tribunal considering a case of this character must, as a matter of law, explicitly refer to, and expressly put into the balance, the injustice to the employee; and that the Tribunal in the present case erred in law by failing to do so. We do not accept that submission. In Dobie the tribunal had created a problem by saying in terms (at least as the Court of Appeal interpreted it) that any injustice to the employee was irrelevant: see the passage from its reasons quoted by Sir John Donaldson at p. 816A. In Greenwood the tribunal had not gone so far; but this Tribunal took the view that, on an analysis of its reasons in the light of the facts of the case, it could be shown not to have taken "the injustice factor" into account. But neither case supports the proposition that there is automatically an error of law where a tribunal fails to make express reference to the injustice factor. That would be to promote form over substance. While it is certainly good practice for a tribunal explicitly to direct itself by reference to Dobie, a failure to do so need not be fatal. In some cases it will be sufficiently apparent that the Tribunal has indeed taken the injustice to the employee fully into account: indeed in many cases it will be at the heart of the case and could not realistically be overlooked. We are satisfied that this is such a case. The Tribunal was plainly very conscious that the Appellant was being dismissed because of concerns based on allegations of misconduct which he had had no chance to rebut and for which he had never been charged: it referred explicitly to the representations to this effect which Ms Elsy made on his behalf. But it found that the Respondent had done "all it could reasonably be expected to do to assist the Claimant and prevent him from losing his employment". That conclusion addressed the right question and was an answer which was open to it on the facts, if not indeed inevitable. The fact that the Tribunal did not consider whether the Respondent could have retained the Appellant in employment while he made a third attempt to obtain a PCV licence – where no such suggestion had been made at the time or was advanced before it – is no evidence that it had applied an insufficiently rigorous test.
23. We must accordingly dismiss this appeal.