SUMMARY
UNFAIR DISMISSAL – Reasonableness of dismissal
DISABILITY DISCRIMINATION – Reasonable adjustments
Long-serving employee. Multiple grievances against her
line managers. Unable to continue working in the same department. Employer
willing to provide suitable alternative employment. After long period of
negotiations between employer and employee, in order to bring matters to a
head, employer gives three months notice of dismissal but continues to offer
alternative employments (with continuity of employment) which are unreasonably
refused during the notice period. Employment Tribunal hold that the dismissal
was unfair because at the date notice was given it was premature (no precise
offer had been made and the grievance procedure was incomplete).
The Tribunal also held that the same two matters
constituted failure to make reasonable adjustments for the disabled employee.
Issue on appeal: whether Employment Tribunal should
have considered reasonableness of dismissal as a whole i.e. embracing all
matters between giving of notice and its expiry – including rejection of
reasonable offers carrying continuity of employment and abandonment of
grievances which had had no prospect of success.
Appeal allowed and remitted to same Tribunal to
further consider.
MR RECORDER LUBA QC
Introduction
1.
This is an appeal by an employer, South Tyneside Council (‘the Council’),
from a decision of the Employment Tribunal at Newcastle Upon Tyne, upholding
the claims of Mrs Ann Ward that she had been subject to disability
discrimination and had been unfairly dismissed by the Council. The claims had
been heard in November 2009 and were determined in a very full reserved
judgment.
2.
Both parties sought a review of its substantive decisions by the
Employment Tribunal itself. Their applications culminated in another judgment
of the Employment Tribunal given on review in November 2010.
3.
The Council’s grounds of appeal challenge both the original and review
decisions, on multiple grounds. The amended grounds of appeal extend over 10
closely-typed pages. There was also initially a cross-appeal by Mrs Ward but
that was not pressed further before us and shall stand dismissed.
4.
For the reasons that we give later in this judgment, this appeal will be
allowed on a single issue that touches both the aspects on which Mrs Ward was
successful – disability discrimination and unfair dismissal.
5.
However, it succeeds only on a pure point of law. We are confident that,
with the assistance of our judgment, an Employment Tribunal of the same
constitution can sensibly reconsider matters without needing to re-hear the
(very considerable) evidence and can proceed to determine the claims on
remission. It will be for the Employment Tribunal itself to determine whether
it would be assisted by further oral or written argument by the parties. For
our part, we would make it clear that we have been considerably assisted by
both the written and oral arguments of counsel for both parties.
6.
As the appeal is being remitted to the same Employment Tribunal we shall
give only the barest account of the facts and the issues. Nothing in our judgment
should be taken to influence the Employment Tribunal either way on the ultimate
judgments that fall to be made applying the law as we hold it to be.
Essential background
7.
Mrs Ward had a significant period of service with the Council. She began
work as an Accounts Clerk in March 1987 becoming a Service Support Officer by
July 1987. She was continuously employed up to the expiry of her period of
notice on 18 January 2008. For the bulk of that time she had been engaged in
providing administrative support in the Environmental Health (‘EH’) team.
8.
Difficulties appear to have arisen from about 2003/2004, at which time
three changes occurred in succession. First, in August 2003, a Ms Katy Fortune
became Mrs Ward’s line manager. Second, a Mr Andrew Wainwright was appointed
as the new overall manager in the EH team. Third, the team relocated to new
open plan offices.
9.
The Employment Tribunal’s judgment offers an exhaustive account of what
occurred in the period running forward from those changes until the ultimate
termination of Mrs Ward’s employment. For present purposes it is sufficient to
recount that Mrs Ward alleged that the two new managers eroded her job content,
made her work more physically demanding or difficult and subjected her to
unreasonable criticism. Those and related matters triggered a host of
grievances initiated by Mrs Ward. The reference to making her tasks more
demanding is relevant to the fact that Mrs Ward is a person with disabilities.
10.
During the period of the Employment Tribunal’s factual review there were
significant periods of absence from work and from April 2007 a period of
deployment of Mrs Ward to work in a different team, the Council’s Anti-Social
Behaviour (‘ASB’) team. Matters appear to have come to a head in October 2007.
11.
By then Mrs Ward had asked to be permitted to return to her post in the
EH team. The Human Resources manager (Mr Gibson) had declined that request as
he did not consider it reasonable for her to return to a post in respect of
which there were still unresolved and significant grievances and the advice he
had from occupational health was that she should not return to the EH team but
should be offered suitable alternative employment elsewhere in the Council.
12.
In an attempt to force the Council’s hand, Mrs Ward presented herself
for work in the EH team on 2 October 2007 with the intent of causing
embarrassment or disruption if (as occurred) she was not permitted to resume
her former duties. That manoeuvre having failed, she returned on the following
day to her temporary placement in the ASB team, which placement had been
extended to the end of October 2007.
13.
Mr Gibson had a meeting with Mrs Ward on 17 October 2007 in which he
told her that her employment was to be terminated with notice, although
continuing attempts could and would be made to secure her some alternative
employment with the Council that could be taken up before the notice period
expired. That decision was confirmed in writing the following day (18 October
2007) in these terms:
“In relation to your continuing employment, I would confirm that
it is our intention to continue to seek alternative employment for you at Scale
3 within the Council. That you have been back at work for some time now
indicates your fitness to attend work and carry out such duties. I indicated
that your placement within the Anti-Social Behaviour team, would come to an end
on Friday 26 October, as communicated previously, and that we would then
commence your notice period, of 12 weeks. If a vacancy proved suitable in the
meantime, then this would mean your employment would continue.
[…]
I also confirmed that we did not consider it appropriate for you
to return to your substantive role in Environmental Health, especially
considering you had a number of grievances outstanding which you did not see as
having been resolved.”
14.
The letter also made reference to further meetings and a medical report.
Indeed, by 18 October 2007 there remained a number of extant unresolved
grievances.
15.
No alternative suitable employment had been found by 26 October 2007
when the placement in the ASB team expired and from that date until her notice
period expired Mrs Ward was, in effect, on ‘gardening leave’. That is not to
say that there was anything other than a great deal of continuing communication
between the parties about resumption of employment in the EH team, extant
grievances, an appeal against the decision to dismiss, and options for
alternative employment (including a formal offer). It is not necessary to add
here to the full account of that period given in the Employment Tribunal’s
judgment.
16.
It is sufficient to indicate for present purposes that Mrs Ward had not
returned to work for the Council in any capacity before her notice expired by
effluction of time on 18 January 2008, which was the effective date of
termination of her employment.
Proceedings before the Employment Tribunal
17.
Mrs Ward presented many claims to the Employment Tribunal. In the course
of the proceedings, a number were either withdrawn or dismissed. In respect of
those that remained, the Employment Tribunal received (as might have been
expected in relation to events spanning three or four years) extensive written
and oral evidence over the course of a very lengthy hearing.
18.
As to the claim for unfair dismissal, the Employment Tribunal found that
Mrs Ward was unfairly dismissed on 18 January 2008 and that she did not
contribute to her own dismissal. However, it found that she would have been
dismissed in any event two months after the 18 January 2008 and it limited any
award to that two-month period.
19.
The Employment Tribunal rejected the proposition that the reason for
dismissal had been ‘capability’. It found that the real reason comprised ‘some
other substantial’ reason namely that the Council:
“…could not allow [Mrs Ward] to return to her previous post for
her own potential (sic) welfare, because of the risk to her health and she had
refused any alternative posts when all reasonable efforts had been made to find
her one.
Indeed, in our view, the reason for her dismissal was that there
was no alternative post available for her, and she had, in the view of the
[Council] unreasonably refused to accept posts which had been offered to her.” (Judgment paras [61]-[62])
20.
The Employment Tribunal accepted that this might be a potentially fair
reason for dismissal but found that this dismissal had been unfair in two
respects, each related to the Employment Tribunal’s assessment that giving
notice of dismissal on 17/18 October 2007 had been premature. As to the first
respect in which the dismissal was premature, the Employment Tribunal said (at
[64]):
“Whilst not substituting our judgment for that of the employer,
it seems to us that the potentially fair thing for any reasonable employer to
have done would have been to at least wait for the offer of the allegedly suitable
alternative post to be made, and then, if it were to be refused, to warn that
refusal may lead to dismissal, and then, and only then, if the post was still
refused, (assuming there were no other alternative posts) to proceed to
dismiss. The chronology of the events in this case, however, meant that there
was a dismissal first, and the only way of avoiding it was for it then to have
been withdrawn. As indicated above, that is still a dismissal, and, in these
circumstances, an unfair one, prompted, no doubt, by the understandable degree
of exasperation felt by the [the Council] with [Mrs Ward’s] ever-growing number
of grievances, and lack of any likely resolution of her original workplace
issues which then went back some 18 months.”
21.
The second respect in which the dismissal was said to have been
premature was that, at the date notice was given, Mrs Ward had an extant
grievance which had not by then passed through the fourth (and final) stage of
a hearing by elected members. That hearing had been scheduled for 29 November
2007. The Employment Tribunal held (at [65]) that:
“…to dismiss at that time, when an internal and agreed procedure
which might have led (and was still being represented to [Mrs Ward] as doing
so) to the claimant being able to return to her previous post remained to be
completed, was unfair.”
22.
In respect of disability discrimination, the Employment Tribunal found
that Mrs Ward had been the victim of unlawful discrimination by the Council in
that it had not made reasonable adjustments in two respects, namely:
“(a) re-deploying her to a Scale 3 post in the Anti-Social
Behaviour Unit in or about September 2006; and
(b) awaiting the hearing of her Stage 4 grievance appeal to
Elected Members due to be heard on 29 November 2007 before dismissing her,
and/or the making of a formal offer of a suitable alternative position, and
affording her a reasonable time in which to accept it.”
23.
As will be apparent from the wording of those two matters, the first
related to an earlier re-deployment to the ASB team (and is not subject of any
appeal). The second is bound up with the two aspects which the Employment
Tribunal had found rendered the dismissal unfair.
24.
The Employment Tribunal dismissed claims against the second and third
Respondents to Mrs Ward’s claims – Ms Fortune and Mr Wainwright – and scheduled
a remedies hearing in respect of the successful claims against the Council for
a later date.
25.
As noted above, these decisions were confirmed on review.
The Appeal: the cases for the respective parties
26.
In his written and oral submissions for the Council, Mr Menon sensibly
and helpfully collapsed the extended grounds of appeal into a single
fundamental proposition that, in respect of both unfair dismissal and the
second dimension of the disability discrimination finding, the Employment
Tribunal had erred in law by treating the dismissal as having occurred on 18
October 2007 and as having been - at that date - irremediably tainted by the
twin respects in which the Employment Tribunal had found had it to have been
unfair.
27.
His submission was that, on a proper approach to its respective
functions of determining fairness or unfairness of a dismissal and the
reasonableness or otherwise of possible ‘adjustments’, the Employment Tribunal
should have looked at the whole situation working back from the actual date of
the termination of the employment (in January 2008). Had it done so, he
submitted, it may well have found that whatever unfairness or deficiency had
occurred on 18 October 2007 that had long since been overtaken by events in the
subsequent three months before the employment ended. He pointed in particular
to: (1) the offer and unreasonable rejection of suitable alternative employment
early in that period and (2), in respect of the grievance, a failure to
participate in meetings in that period and the fact that the scheduled final
stage of the grievance procedure (following a postponement of the 29 November
2007 hearing at Mrs Ward’s request) never did result in any finding in her
favour.
28.
He took us through the judgment, and review decision, of the Employment
Tribunal in detail - drawing attention to those many passages in which they had
treated “the dismissal” as a single event taking place by the latest on 18
October 2007 and also to further passages said to demonstrate that the
Employment Tribunal had treated nothing that had happened subsequently as
having cured, or having had the capacity to cure, the unfairness of giving
notice of dismissal at that date.
29.
The thrust of the Council’s case before the Employment Tribunal on
review had been that a focus exclusively on 17/18 October was unrealistic in
the context of a case in which an employer was saying, in effect, “we will
spend the next three months trying to agree with you some alternative deployment
with the Council which will enable your employment to continue rather than be
terminated under the extant notice.” That approach, Mr Menon submitted, was a
fair one in the circumstances and only failed because Mrs Ward unreasonably
rejected what was, on any view, suitable alternative employment which became
available in that interregnum. Indeed, within days of the end of her ASB
placement.
30.
He submitted that the Employment Tribunal had become deflected by Mr
Gibson’s reference in evidence to his understanding that the notice of
dismissal on 18 October 2007 was, in effect, “conditional” and would be
“withdrawn” if an alternative post was found and accepted. This was treated by
the Employment Tribunal as raising an issue of law about whether there could be
conditional notices and whether they could be unilaterally withdrawn.
31.
At that point, Mr Menon’s submissions took in a treatment of the
relevant authorities on conditionality/withdrawal (or otherwise) of notice of
dismissal but, in sum, the contention he advanced was that on a true construct
of the notice of dismissal it had nothing to do with conditionality or
unilateral withdrawal. The whole, and obvious, premise was that a successful
identification and acceptance of an alternative post would lead to the
continuation of the employment by mutual consent.
32.
Notwithstanding the centrality of the above-described challenge, Mr
Menon did not abandon his subsidiary perversity challenge to the Employment
Tribunal’s finding that the Council could not rely on Employment Rights Act
1996 section 98A(2).
33.
For Mrs Ward, Ms Callan developed helpful submissions essentially
seeking to uphold the decision of the Employment Tribunal for the reasons it
had given both in its initial judgment and on review. She submitted that the
Employment Tribunal had made no error in treating this as a quite ordinary
dismissal on notice rather than something conditional or capable of being
withdrawn.
34.
Her case was that it had been entirely open to the Employment Tribunal
to find, as it had, on both the unfair dismissal claim and the disability discrimination
claim, that this was a case in which the employer should have waited for a
specific offer of alternative employment to be made and for a grievance
procedure to be seen through.
Discussion & Conclusion
35.
We must begin our discussion of this appeal by paying tribute to the
Employment Tribunal for the full and comprehensive way it has set out its
findings of fact and its reasoning leading to its conclusions. From them, the
parties can see clearly why, in the Employment Tribunal’s judgment, certain
claims succeeded, to what extent (if at all) success was to be limited, and
which claims failed.
36.
However, that very transparency enables us to discern without any
hesitation a clear misdirection in law by the Employment Tribunal which we
consider was then applied to consideration of both the unfair dismissal claim
and the termination-related aspects of the disability discrimination claim.
37.
We entirely understand how the layman’s reference by Mr Gibson to the
notice of dismissal being conditional or capable of withdrawal led the
Employment Tribunal to heavily emphasise that this was (as we agree) a case in
which the employer was unilaterally exercising a power to terminate an
employee’s employment at the end of a stipulated period of notice. We reject,
as the Employment Tribunal did, the proposition that this notice was
conditional or anything other than a unilateral notice that employment would
terminate when it eventually did. In our judgment Mr Menon’s submissions in
this regard can draw no comfort from Rai v Somerfield Stores Ltd
[2004] IRLR 124 which turns on the ascertainment of effective date of
termination and is thus wholly distinguishable from the present case in which
no such issue arises.
38.
But the error, to which this diversion led, was an “ossification” of the
dismissal as an event which occurred by delivery of the letter of 18 October
2007. A fair reading of the initial judgment and review decision makes plain
that the Employment Tribunal did not consider that anything which could have
happened or did happen between 18 October 2007 and 18 January 2008 could ‘undo’
what it perceived as having been the two unfair aspects of giving notice when
the employer did.
39.
The Employment Tribunal relied on Harris and Russell Ltd v
Slingsby [1973] ICR 454 for the uncontroversial
proposition that notice once given cannot unilaterally be withdrawn. But that
decision of the NIRC is also authority for the proposition that ‘by agreement’
such notice may be withdrawn so that the employment continues notwithstanding
expiry of the notice period. That was highly material to the way the Council’s
case was being put.
40.
In our judgment, it was a requirement of the jurisdiction that they were
exercising for this Employment Tribunal to consider the fairness or otherwise
of the termination of employment on 18 January 2008 in the round. That
involved engaging with and delivering judgment upon the Council’s case that (to
put it shortly in our own terns):
(1) Any initial procedural unfairness in giving
notice before a specific offer of alternative employment was put on the table
was outweighed by the fact that when, well before the anticipated expiry of the
notice period took effect, such an offer was made as anticipated, it was
unreasonably rejected. Had it been accepted, the earlier prematurity would
have become irrelevant as the termination of employment would (by consent) have
either been deferred or avoided. Any such procedural unfairness as had
occurred was, in effect, trumped by the capricious refusal of the opportunity
of continued employment in a different post by Mrs Ward;
and (to like effect)
(2) Any
procedural unfairness in giving notice before the final stage of the grievance
procedure had been completed had to be looked at in overview. As emerged, that
final stage was never in fact completed during the notice period or otherwise.
The context from October 2007 to January 2008 was of non co-operation by Mrs
Ward in bringing matters to a conclusion. Considering events in the round would
demonstrate that no real ‘opportunity’ had been lost because Mrs Ward would
have unreasonably been holding out for her old position back and,
unrealistically, for the removal of two managers before that could/would
happen: see Employment Tribunal judgment at [70] –[73]. The Employment Tribunal
had itself found Mrs Ward’s perception of the issues, and her evidence,
unsatisfactory and it was highly unlikely that any outcome of the grievance
procedure could have brought her any satisfaction at all.
41.
In contrast, a fair reading of the judgment and the decision on review
demonstrates to our unanimous satisfaction that this is a case in which – to
use language from Mr Menon’s skeleton argument – “the approach adopted by the
Employment Tribunal effectively stopped the clock” at the date the period of
notice started.
42.
That approach cannot be squared with the statutory language of section
98(4) of the Employment Rights Act 1996 which requires the Employment
Tribunal, when determining whether the dismissal of an employee is fair or
unfair, to have regard to whether “in the circumstances” the employer acted
reasonably in treating the reason for dismissal as sufficient and to
make the assessment of fairness/unfairness “in accordance with equity and the
substantial merits of the case”. There is no statutory definition of
‘dismissal’ (see Rai v Somerfield Stores Ltd [2004] IRLR 124,
EAT, para [21]) which could support its being limited to the moment at which a
notice of termination is issued.
43.
It is settled law that, in conducting the statutory exercise, an
Employment Tribunal may, and in some circumstances must, have regard to what
takes place between the giving of notice, the date of commencement of that
notice and the ultimate termination of the employment. Otherwise, not least,
Employment Tribunals would never have regard to such matters as the substance
and procedure of internal appeals against decisions to dismiss.
44.
Indeed, the Employment Tribunal itself appeared - in its review decision
at paragraph [15] - to have accepted that this is indeed the law. Responding
to the very point now advanced before us, the Employment Tribunal said in para
[15]:
“…[W]hat the Tribunal is really doing, it seems to us, is
looking at the whole process of dismissal. As has been said in other contexts
(appeals – see West Midlands Co-operative Society v Tipton 1986 ICR192)
dismissal is a process, not an event, as highlighted by the fact that a
Tribunal takes into account the appeal process, which often takes place long
after the dismissal takes effect, in assessing the fairness of the dismissal as
a whole. That rather demonstrates that it can be an error to identify any
particular precise, and perhaps artificial, point at which the issue of
fairness falls to be decided. The requirement of s.98 is to look at ‘all the
circumstances’.”
45.
The Employment Tribunal go yet further and set out passages from the
judgment of Lord Justice Simon Brown (as he then was) in Alboni v Ind
Coope Retail Ltd [1998] IRLR 131. The learned Lord Justice expressly
there approved this part of the headnote of the earlier case of Stacey v
Babcock Power [1986] ICR 221:
"... when considering whether an employee had been unfairly
dismissed within the meaning of section 57(3) ... it was necessary to take
account of the whole process of dismissal initiated by the giving of notice and
completed by its expiry rather than regarding the giving of the notice of
dismissal as fixing the moment of dismissal and precluding consideration of
events which occurred during the notice period ..."
46.
LJ Simon Brown, when applying that proposition to the case before him,
said that it was:
“entirely clear that the Industrial Tribunal in the present case
were not merely entitled, but were bound to have regard to events between
notice and dismissal, both for section 57(1) purposes and also, indeed to my
mind a fortiori, for section 57(3) purposes.”
47.
It is right at this point to acknowledge that Ms Callan did not seek to
suggest that the law was otherwise. Indeed, in the course of submissions she
acknowledged that it did not matter from which end (the giving of notice or its
expiry) an Employment Tribunal began the examination of fairness of a dismissal
provided that they look “at the whole”. Indeed, as the editors of Harvey’s indicate, at [824.05]:
“In practice, events occurring during the notice period are more
likely to impact upon the fairness of the decision rather than affecting the
reason why the dismissal was carried out.”
48.
However, despite having set out the passages from the authorities, in
their review decision, the Employment Tribunal then fail to apply them to the
ascertainment of fairness overall. At the end of paragraph [16], they rightly
reject what they perceive to be Mr Menon’s submission that one looks only at
the end of the process. But having done so, they direct themselves that
the dismissal must have been fair at the time notice is first given and remain
so throughout. That necessarily excludes the possibility of a dismissal, which
was potentially unfair when the clock of notice was activated, becoming
nevertheless fair by the time the clock stops. It is that possibility that
requires examination on the facts of this case.
49.
By paragraph [18], the Employment Tribunal’s review decision has again
reverted to treating the unfairness of the dismissal as standing or falling at
the date when the decision to dismiss was taken on 17/18 October 2007. That
clearly echoes the main judgment at paragraphs [60]-[65] in which the
Employment Tribunal manifestly treat the giving of notice as “the dismissal”,
the fairness of which – at that date – it treats itself as exclusively confined
to deciding.
50.
Despite our clear conclusions on the point of law, we have sufficient
confidence in the calibre of the consideration that this Employment Tribunal
has already given to the factual aspects of this matter to be prepared, without
hesitation, to remit the unfair dismissal and disability discrimination claims
to the same constitution for further consideration - embracing the broader
approach that we have been satisfied is what the law requires, rather than the
narrower one earlier taken by the Employment Tribunal.
51.
It necessarily follows that, on remission, and taking that broader
approach, the Employment Tribunal may come to a different ultimate decision, a
modified decision or one which produces entirely the same result. Application
of the facts found on a proper direction as to law is entirely for the
Employment Tribunal.
52.
It seems to us that the termination-related aspects of the successful disability
discrimination claim are so intertwined with the shortcomings which were said
to have rendered the dismissal unfair that they too must be remitted for
further consideration. Likewise, the question of whether – in the event of a further
finding of unfair dismissal – what occurred between 18 October 2007 and 18
January 2008 would cause the Employment Tribunal to take a different view of
whether Mrs Ward contributed (and if so to what degree) to the ultimate
termination of her employment.
53.
Indeed, it is a striking feature of the Employment Tribunal’s judgment
that, by treating the dismissal as having occurred at the moment notice was
given, the Employment Tribunal are able to hold that there has been no
contribution by Mrs Ward to her own dismissal notwithstanding its clear
conclusions that: (1) she unreasonably rejected satisfactory employment
elsewhere in the Council offered months before her notice expired and would
have held to such rejection whatever adjustments or accommodations the Council
would have made for her; and (2) that there was no sufficient merit in her
grievances to suggest any prospect of success with them had they been pressed
to a conclusion and fully and completely considered before notice expired.
54.
However, we do not consider that the Employment Tribunal was wrong to
find that the Council could not, in all the circumstances, rely on section
98A(2) Employment Rights Act 1996. Mr Menon’s challenge to that aspect
of the Employment Tribunal’s decision-making is not infused by the more
fundamental error already described and his perversity challenge gets nowhere
near the high threshold for success that an appeal on that ground must achieve.
Indeed, if anything, the failure of the appeal on section 98A(2) rather strengthens
the general point on the main appeal. In an obiter passage in Alexander
v Bridgen Enterprises Ltd [2006] IRLR 422, Elias J said this at [64]:
“It is arguably implicit in section 98A(2) that in order for the
dismissal to be fair, it is necessary for the employer to show not merely that
the employee would have been fairly dismissed if appropriate procedures had
been complied with, but that he would have been dismissed at the same time as
he was.”
55.
As we have sought to explain, that implication is not generally the
position in respect of claims for unfair dismissal.
56.
Accordingly, we will order that this appeal be allowed to the extent
indicated in this judgment and that the judgments of the Employment Tribunal at
paragraphs 9(b), 10, 11, 12 and 13(b) shall be remitted to the same Tribunal
for further consideration in the light of this judgment. The cross-appeal will
stand dismissed.
