SUMMARY
UNFAIR DISMISSAL
Reasonableness of dismissal
Contributory fault
Polkey deduction
The Employment Tribunal did not err in
finding the Respondent unfairly dismissed the Claimant for misconduct. The EAT
would not interfere with its findings: Fuller v London Borough of Brent
[2011] IRLR 414, Bowater v Northwest London
Hospitals NHS Trust [2001] IRLR 331, Salford Royal NHS Foundation Trust
v Roldan [2010] IRLR 721, per Elias LJ, Gayle v Sandwell & West Birmingham Hospitals NHS Trust
[2011] EWCA Civ 924, per Mummery LJ, London Ambulance Service NHS Trust v Small
[2009] IRLR 563, per Mummery LJ, Taylor v OCS and Orr v Milton Keynes
applied.
The Employment Tribunal erred in
making a decision on contribution and Polkey without giving counsel
an opportunity to call evidence and make submissions: Market Force v Hunt
applied. Those two matters remitted to the same Tribunal for reconsideration
at its pending remedy hearing.
HIS HONOUR JUDGE McMULLEN
QC
1.
The case live on appeal is about unfair dismissal and remedies,
including contribution and what is known as a Polkey v A
E Dayton Services Ltd [1987] IRLR 503 reduction. There
is also a procedural issue relating to appeals in the EAT. This is the
Judgment of the court to which all members appointed by statute for their
diverse specialist experience have contributed. We will refer to the parties
as the Claimant and the Respondent.
Introduction
2.
It is an appeal by the Claimant in those proceedings against a reserved
Judgment and Reasons of an Employment Tribunal sitting at the East London
hearing centre under the chairmanship of Employment Judge Prichard, sent
on 15 November 2010 following some 20 days of public hearing and
private discussion. The Claimant has been represented throughout by
Ms Joanne Sefton, and the Respondent by Mr Oliver Hyams,
both of counsel. The Claimant made a very substantial number of complaints
under different strands of the employment protection and anti‑discrimination
canon, but he succeeded only on his claim of unfair dismissal in its ordinary
sense and on one aspect of a claim for reasonable adjustments to be made under
the Disability Discrimination Act 1995. We say nothing
about the DDA point, as it is not live before us, and focus on unfair
dismissal.
The issues
3.
The Respondent contended it dismissed the Claimant on notice for reasons
connected with a previous warning he had been given about taking leave (the “leave”
point) and his contemporaneous engagement by a different university, Birkbeck
(the “Birkbeck” point). Those were the essential issues that survived on
appeal, all other issues having been disposed of either by the Tribunal without
appeal or by the EAT as directed by HHJ Peter Clark. The Employment
Tribunal upheld the Claimant’s ordinary unfair dismissal claim. It held that
he had contributed to it to the extent of 10 per cent, but that the
Respondent should not be entitled to any reduction in any compensation awarded
to the Claimant under the Polkey principle. The Respondent in
various mutations of appeals criticised those findings and, as they emerged
after a hearing before HHJ Hand QC and members, they have been refined
into five points before us.
EAT procedure
4.
At the outset of today’s hearing an application was made by
Mr Hyams to yet further amend the Notice of Appeal. Objection was taken
by Ms Sefton. We have the assistance of Judge Hand QC, who was asked
to comment on this ground; it is known as ground 3. Judge Hand wrote
that his Tribunal had no recollection of ground 3 being argued and that it
does not fall within the permission that his division gave setting up this full
hearing. Mr Hyams accepts that. Judge Hand in his customary graciousness
offered the opportunity to Mr Hyams to put an application before our
division to decide whether or not the amendment might cause any prejudice to
the Respondent and so on, and that is how this application is made today.
5.
The objection is based upon limited prejudice to the Claimant, in that
he has been put to the trouble and expense of drafting written submissions in
opposition to the Notice of Appeal at the preliminary hearing and a skeleton argument
now and he should not be put to this again. There is no reason why this new
point, which has not been through the filter of Judge Peter Clark on
the sift or Judge Hand and members on the preliminary hearing, should now
lap up upon our shore today.
6.
We consider that the issue should not be allowed to surface today.
There is unfairness to the Claimant, in that his team is not prepared to deal
with this, and there was an opportunity in the three previous incarnations of
this Notice of Appeal for it to be put before either a Judge or a three‑person
division, and it has not been so. We consider that it is not in accordance
with the overriding objective to allow this new point to be ventilated, and so
this appeal is limited to the four points that survive.
The facts
7.
Judge Hand introduced the parties in a summary way, so that we need
not repeat the industry that has been put into this case so far:
“4. It would not be at all appropriate for us to do any more
than give the barest sketch of the factual background to this case. The
Respondent was a lecturer at the Appellant University; he taught English and
American literature and drama. The Tribunal went into very great detail as to
the background and history, or as we might put it, genesis, of the Appellant
University and as to some of the difficulties that were created during the
period of gestation and after the birth of the new entity.
5. Two difficulties arose for the Respondent. The first related
to leave and the second to his teaching for other institutions. He had for a
number of years been in the habit of taking quite a long period of leave during
the summer vacation. The Appellant no longer wished to have such long periods
of leave and introduced new rules relating to it. Also for a long period of
time the Respondent had been a lecturer at Birkbeck College, University of London, over a course that ran principally during the summer.
6. In 2006 he took leave at short notice. That generated one
set of disciplinary proceedings. Whilst those were ongoing an issue arose
about his teaching for Birkbeck College and ultimately that generated a second
set of disciplinary proceedings. In respect of the first he was ultimately
given a final written warning; in respect of the second, he was dismissed. The
Employment Tribunal concluded that he had been unfairly dismissed. The Reasons
section of the Judgment, taken at its broadest, probably runs from
paragraph 96 to paragraph 135. In those paragraphs the Tribunal
examines the procedure that was adopted, the substance of the issues between
the parties, the question of contributory fault and the so‑called Polkey
question as to whether, had a fair procedure been followed, there would have
been any different an outcome.
7. In respect of all of those the Appellant alleges that the
Tribunal has fallen into error. As we have already indicated, the above is the
barest sketch of the issues in the case and of the close analysis of the
factual material undertaken by the Tribunal in the first 100 or so paragraphs
of its Judgment.”
8.
To do justice to the facts it is necessary to consider what the Tribunal
considered a complicated factual background, which has inured into an agreed
chronology in ten‑point font extending over five pages. The Claimant was
a lecturer in English and American literature at the predecessor in title of
the London Metropolitan University. At the time it was known as London Guildhall University, and it merged in 2002 with the University of North London. He
began working there in 1994 and full‑time in 1997. In due course he took
on additional work at Birkbeck and declared this to his employer in 1999. He
was one of a number of people active in the union NATFHE, who took the view
that this was a takeover and not a merger, and it is fair to say that there was
not an easy marriage. There were issues to do with the changes of terms of
employment, and one issue concerned the leave point. This required the
Claimant to submit his holiday dates. The Tribunal criticised the Claimant for
the way in which he handled this matter, and it also criticised the Respondent
for the long delays in which the matter was protracted, but the result was that
he was given a final written warning in respect of his leave year 2006 in
2008.
9.
Contemporaneously with the issue of his leave or shortly thereafter
there arose an issue in relation to Birkbeck, and he was told ultimately to
desist. He was engaged in teaching duties there, well known and not in any way
hidden, and as a result of his failure to desist he was dismissed.
10.
The interweaving of the two issues caused a good deal of time in the
Judgment of this Tribunal. In the language of Judge Hand in Greenwood v NWF Retail Ltd
UKEAT/0409/09, this is a narrative Judgment, and when Judge Hand’s
division was asked to look at the findings, that EAT was at pains to analyse where
the decisions were made in this narrative Judgment and where the law was
applied to it. We agree with Judge Hand’s Tribunal that this is a densely
written Judgment, but no criticism is now made of its failure to meet the
standards set out in Greenwood; the reasons are clear.
Hand
11.
The Tribunal decided on the principal matters that the dismissal of the
Claimant was as a matter of substance to do with the Birkbeck issue, and that
questions of procedure were only secondary in its criticism of the Respondent
for failing to meet the standards of a reasonable employer. The Tribunal
separates in its analysis (see, for example,
paragraphs 97 and 98) matters of substance and matters of
procedure, but on analysis, for it says so on half‑a‑dozen
occasions, this dismissal was unfair as a matter of substance.
12.
The Tribunal found the Respondent had discharged its duty to show a
reason under section 98(1) and 98(2) of the Employment Rights Act 1996.
The Tribunal has given its reasons as to why the Respondent acted unfairly in
dismissing the Claimant for the Birkbeck issue, drawing into account the leave
issue. It came to the conclusion that the decision to dismiss was outside the
band of reasonable responses (paragraph 110). The Claimant was dismissed,
as the Tribunal pointed out, not for gross misconduct but simple misconduct,
meaning an accumulation of misconduct and breach of a pre‑existing final
warning. It criticised the Respondent for the very substantial delays in
dealing with the matter, it criticised the Claimant’s representative, and it
criticised the Respondent for initially starting off on a minor misconduct
issue in accordance with its code and ultimately escalating this into a
dismissible matter. This was, the Tribunal found, contrary to Sarkar v West London Mental Health NHS Trust [2010] IRLR 408 CA, upon which both counsel
addressed the ET and us. The Tribunal held that Sarkar applied,
and that the Respondent fell below the standards of a reasonable employer to
invoke a moderate procedure leading to a serious finding of dismissal.
13.
It then went on to consider two aspects arguably related to liability
but equally arguably related to remedy. This is what it said:
“131. Unhelpfully, neither counsel addressed us orally or in
their written submissions on the question of Polkey or contributory
conduct which of course are always at large after any finding of unfair
dismissal, in a conduct case.
132. The tribunal considered that the dismissal was more than
procedurally unfair. A question of substance was raised by the claimant about
the Birkbeck work in particular. If that had been aired properly in the form
of a grievance before going immediately into disciplinary mode, and if it had
been subject to the status quo, matters might have turned out very differently
that year (although it is quite possible that by the following year the
situation would have been different and the claimant would simply not have
worked for Birkbeck). The question of disciplinary proceedings would not have
arisen as, at that stage, the LMU might have had comparable courses running,
and would not have objected to the claimant working for Birkbeck, or, he might
have resigned from Birkbeck. These were both possible. In those highly
speculative contingencies circumstances, Polkey is not applicable, on
the facts. Polkey is more applicable to situations where a tribunal
broadly agrees with the substance of the decision of the employer but finds
that the process was flawed.
133. The tribunal also needs to consider the question of contributory
conduct in any misconduct case where there is a finding of unfair dismissal.
That is always done at the liability stage of the hearing. The degree of
liability is a liability question and not a remedy question. It will be clear
from our foregoing reasons that the tribunal was critical of the claimant
handing in his leave card so late. It was quite likely to have been deliberate
as the claimant was all too aware that this was a controversial area. He had
often taken long periods of leave because he is American and he wishes to go
back to America for a long period of time to make it worth it.
134. It is inevitable that the percentage degree of contribution
is going to be less because what he culpably contributed to was a situation
where he was then more vulnerable to dismissal. The leave issue was not the
immediate reason for the dismissal; it was the reason for the prior warning
which made the dismissal possible. Nonetheless, the tribunal finds that there
was blameworthy conduct and that it is just and equitable in all the
circumstances of the case to assess the claimant’s contribution at 10% to
reflect that. It is not any more because of the indirect nature of the
contribution and because of the flaws in the process leading to the warning
i.e. the long delay and the apparent increase in the sanction from the start of
the process to the end. However, it is not less because it is significant, as
the claimant acknowledged by apologising for it. The apology itself mitigates
the contribution to an extent.
135. The tribunal was not impressed by the claimant’s excuse,
namely that he had to move office so much following the merger that he lost his
leave card. It was in some box of possessions at some campus. He knew that he
was under a duty as he conceded and he could simply have sent an email
notifying his leave request in good time before the intended period of leave or
he could have requested another form. The claimant had the integrity to
apologise for this and did not pretend it was anything other than an
oversight. He cannot therefore be surprised that the tribunal makes a finding
of contributory fault. That disposes of the unfair dismissal claims.”
14.
There is no appeal by the Claimant against that unannounced finding that
he was 10 per cent liable for the dismissal; there is an appeal
against both the Polkey and the contribution points by the
Respondent. This provoked the EAT division under Judge Hand to cause
enquiries of Employment Judge Prichard, who indicated, in a letter of
21 June 2011 on his behalf, this:
“As stated at Paragraph 133, on one view, Polkey and
contribution are a liability issue as opposed to a remedy issue as they
concern the degree of liability, not the amount of loss. In a case management
discussion conducted by Judge Milmo (record sent to the parties
9 March 2009, at Paragraph and copy attached [sic]), the Judge
stated of the original time estimate that “The estimate of 7 days for the
Hearing is made on the basis that this will be sufficient for the consideration
and determination of all issues, save remedies”.
The Hearing considerably exceeded its original and its secondary
time estimates, in circumstances described in a postponement judgment sent to
the parties on 25 March 2010 (copy attached), and because the
secondary time estimate given there (Paragraph 6) was exceeded in the
event. What was explicitly supposed to be a further 3 days of evidence and
submissions and 2 days for deliberation and judgment, turned into 4 days of
evidence and one day of submissions and no time for the tribunal’s deliberation
and judgment at all. Examination and argument was very drawn out indeed.
Had there been longer to deal with submissions, the question
might have been raised for completeness, but in this and many cases I would
consider it obvious to the point of pedantic to tell experienced counsel that
the tribunal would be dealing with Polkey and contribution at the
liability stage in an unfair dismissal case. The Polkey and
contribution arguments are invariably complicit in, and coextensive with, the
arguments on ‘liability’ itself. They would certainly seem to have been so on
the facts of this case.”
15.
The matter has now been left for a remedy hearing, as we are reminded,
four years after the dismissal of the Claimant in February 2008.
The Respondent’s case
16.
In a courteous and realistic submission Mr Hyams recognises that
all of the authorities he cites are against him except for a minority Judgment
of Moore-Bick LJ in London Borough of Brent v Fuller
[2011] ICR 806. He contends that each case of unfair dismissal for conduct
must be seen on its own, and just because in the last three years the Court of
Appeal has on ten occasions visited this problem and upheld a Judgment of an ET
does not mean that this EAT is bound to. However, the law is clear, from the
Judgments to which we have been referred, that an appeal court will be unlikely
to overset the Judgment of an Employment Tribunal on a conduct issue when the
Tribunal has directed itself correctly on the statute and the authorities.
This is clear from Bowater v Northwest London Hospitals NHS Trust
[2001] IRLR 331, Salford Royal NHS Foundation Trust v Roldan
[2010] IRLR 721, Gayle v Sandwell & West Birmingham Hospitals NHS
Trust [2011] EWCA Civ 924, London Ambulance Service NHS Trust v
Small [2009] IRLR 563, Orr v Milton Keynes Council [2011] EWCA Civ 62, and Sarkar (above). Nevertheless, Mr Hyams is
right that each case must be taken on its merits to decide whether the
Employment Tribunal erred in law in the application of its directions.
17.
To some extent Mr Hyams has force in his primary argument, which is
that the Tribunal substituted its view for that of the employer, contrary to Small.
He points to a number of passages where the use of the third‑person
plural might indicate seduction by the Tribunal to place itself in the shoes of
the employer, when what is required is to see whether on the facts as presented
to the employer it was a reasonable response for it to dismiss the Claimant.
Nevertheless, this Tribunal indicated that it understood the law about non‑substitution,
and in Bowater, for example, Longmore LJ indicated that a
Tribunal that said it was not substituting should be taken at its word. True
it is that Mummery LJ elsewhere indicates that Tribunals may cite the law and
yet not apply it. The quest therefore is to determine whether a Tribunal has,
as a matter of assessment for the appellate court, substituted its Judgment for
that of the Respondent employer. The Tribunal, he submits, in our case has
done just that.
18.
A related part of his argument is that the Tribunal failed to apply the
reasonable range of responses of a reasonable employer. Those two grounds,
forming grounds 1 and 2, condemn this Judgment, in his
submission.
19.
As to the remedy issue, he contends that the Tribunal set out to
determine liability only. The notes taken of the exchanges between himself and
the Judge provided to the ET and the EAT by the solicitor for the Claimant
indicate that Mr Hyams was not sacrificing submissions in relation to
contribution and Polkey, and should not be shut out from making
those submissions later (see the Judgment of Mr Recorder Langstaff QC,
as he then was, in Market Force (UK) Ltd v Hunt
[2002] IRLR 863). There is substance in the submissions Mr Hyams wishes
to make as to the availability of an argument based upon subsequent redundancy,
a form of Polkey, and upon the percentage deduction on the facts
found in relation to contribution.
The Claimant’s case
20.
We did not find it necessary to trouble Ms Sefton beyond her written
submissions on grounds 1 and 2, for she argues that we should apply
the law as set out in the seminal authorities we have set out above, and that
this Tribunal, having addressed itself to the correct legal directions, cannot
be condemned for having applied them incorrectly.
21.
As to the two subsidiary matters, Ms Sefton accepts that there was
no argument before the Tribunal on either of these. She argues, however, that
from the notes it is apparent an opportunity was given, and opportunity
is the substance of the Judgment based on natural justice set out in Hunt
above. An opportunity was given and it was not taken, and it is after all for
an employer to make the running on arguments as to why compensation should be
capped by reason either of contribution or Polkey. In any event
the findings by the Tribunal as to Polkey are firm; this is a
dismissal based upon substantive unfairness, not mere procedural defect, and
the Tribunal has already made findings on contribution so that the parties can
see why it is that there should be a deduction. She does not advance any appeal
against the 10 per cent deduction itself or that it was announced
without reference to her.
The legal principles
22.
The legal principles are those contained in the Judgments of the Court
of Appeal that we have set out above. A Tribunal should not substitute its
Judgment for that of the employer, and only when a Tribunal has misdirected
itself in the law or has misapplied the law should the EAT be entitled to
interfere. As to procedural matters, the requirement of natural justice is
that parties should be entitled to put all available arguments to the tribunal
and to receive a decision on those, or to be told why a decision is not to be
forthcoming. A Tribunal should not pluck figures out of the air (see Hunt)
and should give reasons for findings of contribution. The exercise in
contribution assessment is entirely different from unfair dismissal (see Small),
with separate findings being made as to what in fact occurred for the purposes
of contribution.
23.
As to Polkey, in Gover and Ors v Property Care Ltd
UKEAT/0458/05, in a Judgment I gave, a wide range of situations is canvassed,
including a Polkey reduction in its classic sense, where there
has been a defect in the procedure leading to an unfair dismissal. All sorts
of other reasons may stem the losses, such as a mass redundancy, the factory
burning down, or a personality clash making continued employment of the
employee wholly impractical (see those reasons in Gover approved
by the Court of Appeal [2006] EWCA Civ 286).
Discussion and conclusions
24.
We prefer the arguments of Ms Sefton in relation to liability for
unfair dismissal. In our judgement, the Employment Tribunal made decisions
based upon what it found to be the standard of a reasonable employer, and this
employer fell below it. It made even‑handed criticisms of the Claimant
and the Respondent as to the way in which the parties had gone about their
various dealings, but was firm in deciding that as a matter of substance this
was unfair. It was unfair to dismiss the Claimant for the Birkbeck matter with
the subsidiary matter of the leave being brought into account. It directed
itself correctly as to Sarkar, for the Respondent initially
invoked the minor misconduct regime and then promoted it to a higher register
and dismissed him for it. That was a straightforward application of the
Judgment of the Court of Appeal in Sarkar, and so, with respect
to Mr Hyams’ careful written and oral arguments, he has failed to surmount
the by now very substantial hurdles placed in the way of an employer or an
employee on appeal against a conduct dismissal. For the avoidance of doubt,
each case must be taken on its legal merits. The fact that the Court of Appeal
has recently decided against oversetting Tribunals on ten occasions does not
mean that there is not an eleventh, but it is not this case. This was a
Judgment that carefully set out the findings of the Tribunal as a matter of
substance. These grounds are dismissed.
25.
We turn, then, to the two matters that may fall under remedy. The first
thing to notice is that the issues as to liability and remedy as a matter of
practice are taken either as part of a liability hearing, or as part of the
whole hearing if liability and remedy are to be taken, or they may be earmarked
for issues under remedy. The provisions on contribution in section 122
and 123 Employment Rights Act 1996 deal with remedy; the principle
in Polkey arises out of section 98(4), and is in the terms
of the speech of Lord Bridge focussed upon the compensatory, not the basic,
award for unfair dismissal and therefore is as a matter of construction
properly an issue of remedy. Nevertheless, we consider it is usually an
expeditious way to handle matters if the Tribunal says how it is to deal with
issues of contribution and Polkey if they arise during the course
of the hearing. This Judgment did not set off in that way, and we accept that
there was no explicit reference by the Tribunal or by counsel to contribution
or Polkey at any stage prior to one minute to midnight.
26.
At the end of lengthy oral and written submissions by counsel the Judge
announced to the parties that, there being no other issues, they would retire,
reserve Judgment on liability only, and come back to Polkey and
contribution if they arose. As to the extent of contributory liability the
Judge asked whether it should be done now or “leave in a more settleable
state”. What that means is that as a matter of pragmatism if a Tribunal
indicates broadly, even without submissions, that it would find some
contribution, it will help the parties to settle the case without a further
hearing, if it indicates that it has heard evidence and that an event is likely
to stop compensation running (mass redundancies, for example). That would be
helpful to the parties to make it “settleable”.
27.
As to this, the note records Mr Hyams saying that his submissions
are the same. We consider that this is an unsatisfactory state in which to
leave the parties. Hunt says that the parties must be offered an
opportunity to make submissions. The submissions on Polkey we
took first, because there would be no point in allowing argument on this if in
fact there was no Polkey issue. In our judgement, Mr Hyams
is wrong when he submits that there is a Polkey issue in its pure
sense (that is, a procedural defect) in this case. He has mounted no argument
that can overcome the half‑dozen findings that the Respondent
substantively made decisions against the Claimant that were below the standards
of a reasonable employer. Thus there is no room for there to be a procedural
defect, although it did actually criticise the Respondent for some of the steps
it took. So as to Polkey as we have cast it, in its pure sense,
there is no error of law in failing to allow an argument. Mr Hyams would
not have been able as a matter of reality to combat the findings as to
substantive unfairness. We do not need to speculate, because he has entirely failed
to convince us.
28.
However, what he says is of practical relevance is about redundancy.
Four years ago the Claimant was dismissed, and in the world of further
education many changes have occurred and there have been waves of redundancy
within the Respondent University. This is a new matter. He says that had that
matter been squarely raised before the Tribunal reserved judgment on liability,
it would have been dealt with, and we consider that fairness requires that that
matter be addressed by the Employment Tribunal.
29.
We then turn to contribution, which is in a slightly different form.
The reasons are here set out. Mr Hyams criticises a decision that is
actually in his favour. Why is he doing that? The Claimant has been found to
have contributed to the extent of 10 per cent to his own dismissal;
there is no appeal against that, and so Mr Hyams is bound to say that had
he been given an opportunity on these facts, he would have argued for a higher
percentage figure. No evidence is required for that, as he accepts; simply a
submission to try to persuade the Tribunal not to pluck a figure out of the air
but to base it upon findings that he would direct the Tribunal to from its
Judgment. So although there are reasons for this that are exigible from the
Judgment, they are not prefaced by countervailing arguments from the parties.
But in fairness to the Claimant his counsel did not have an opportunity to
challenge that. She may not have raised it on appeal before us for entirely
practical reasons, but nevertheless the Tribunal says the Claimant cannot have
been surprised to see this; on the contrary, he may well have been.
30.
In the circumstances, we consider that the correct solution to these two
aspects of unfairness in the handling of these remedies is to put them back to
the Employment Tribunal. This will be a controlled remission. We will set
aside the figure of 10 per cent for contribution; the findings by the
Tribunal as to contribution will remain, they not having been challenged before
us, but both parties can on the basis of the findings in paragraphs 133‑135
argue as to what figure is to be attached to it. As to Polkey,
there can be no further argument about procedural defects. But the Respondent
is entitled to put, with evidence, arguments as to the likelihood of the
Claimant being dismissed for reasons wholly unconnected with the material that
has already been put to the Tribunal. Arguments can be raised upon evidence as
to whether the Claimant would have survived one or more waves of redundancy
and, if so, until when. The finding by the Tribunal that there be no reduction
for Polkey is set aside. It is convenient that there is to be a
remedy hearing so that these matters can be dealt with all in one place. It
will be remitted to the same Employment Tribunal unless the Regional Employment
Judge decides that that is impractical. The appeal on remedy is allowed in
part,
