United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR BRUCE FREW (of Counsel) Instructed by: Natwest Mentor Services 2nd Floor Sapphire West 550 Streesbrook Road Solihull B91 8UF
For the Respondent	MR STEPHEN FOOTE (Solicitor) Henriques Griffiths Solicitors 18 Portland Square Bristol BS2 8SJ


 


SUMMARY

UNFAIR DISMISSAL

Reasonableness of dismissal

Compensation

Employee who submitted timesheets which overstated the hours he had worked was dismissed for misconduct. At internal appeal, the officer hearing it believed that he had done so by mistake, and whilst suffering from stress. The Employment Tribunal held that dismissal for overstating time to the limited extent he did, whilst accepting those reasons, was outside the band of reasonable responses. An appeal that the ET had substituted its own decision in so concluding was dismissed. However, the ET held that there should be a 20 per cent reduction for "contribution" when what it had in mind was a reduction pursuant to the Employment Act 2002 for failing to attend a disciplinary hearing, and did not consider whether the "mistake" in compiling timesheets was blameworthy and therefore justified an assessment of contribution. Held to be in error in failing to do this: case remitted, to a different Tribunal (by agreement, and because the Employment Judge was said to have demonstrated a closed mind by his approach to contribution by rejecting the issue out of hand at the hearing, without reasons for doing so).


 


THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)

Introduction

1. This is an appeal against the Judgment of an Employment Tribunal sitting at Bristol, chaired by Employment Judge Carstairs, whose Reasons were written on 17 December 2010. The Tribunal held that the Claimant had been unfairly dismissed. It assessed his contribution, as it called it, at 20 per cent.

The facts

2. The facts in summary are these. The Claimant had been employed for some eight years or so, since July 2001, by the Respondent building services company. It was a relatively small company with nine staff. The Tribunal records that the Claimant had three warnings for misconduct during the latter course of his employment, but nothing appears to turn on those so far as the decision was concerned. The dismissal arose out of a report in October 2009 that the Claimant had left a site early. When there was further investigation of this it appeared that on 8 and 9 October 2009 and on another day, the date of which is unspecified, he had claimed to work, on his timesheet, half an hour more on each occasion than he actually had worked. Thus he was putting forward a wrongly exaggerated claim for payment to his employer.
3. He was called to a disciplinary hearing in respect of those matters on 28 October. He said he was sick and indeed was off work. He did not attend that hearing nor others which were arranged until finally, on 24 March in the following year, a disciplinary hearing was held by Mr Callow at which, again, the Claimant did not attend. The consequence of that was that Mr Callow decided that he had deliberately falsified timesheets; he did not work the hours he had claimed to work. He regarded that as gross misconduct and dismissed him for that reason. He appealed.
4. The appeal came for hearing on 19 May before Mrs Callow. Everything centres upon that appeal. The Tribunal says at paragraph 4.20:

"On that day, the claimant explained that he had been under stress and had made a mistake. Mrs Callow believed both those matters but did not enquire any further. The claimant said that he would have offered to alter the timesheets if given an opportunity but Mrs Callow did not mention that she knew from Mr Parker [he being another employee] that he had offered the opportunity so she never had the Claimant's view on that allegation by Mr Parker. Mrs Callow decided to uphold the dismissal."

5. In its conclusions the Tribunal applied law that it had set out to the effect, first, that the approach it must take was not the substitution of its own view for that of the employer. It had to identify whether the employer had shown what was the reason for dismissal. It had to reach a conclusion as to whether that reason was genuinely held for good reason after reasonable investigation and whether in those circumstances dismissal fell within the range of reasonable responses open to the employer. There is no point taken on appeal as to the self-direction of the Tribunal.

The Tribunal's conclusions

6. The Tribunal's conclusions are short to the point of terseness. We can set them out in full:

"7.1 The Tribunal was satisfied that the respondent has shown the reason for dismissal, namely belief that the Claimant had deliberately falsified timesheets.

7.2 Mr Mackie [he being the solicitor appearing for the Claimant] accepted that the respondent had undertaken a reasonable investigation. The Tribunal agrees with that concession, since Mr Parker obtained the statements and found support for the allegation against the claimant. It was suggested during the Claimant's evidence that not all the statements could be relied on but there was no evidence to suggest that the respondent had any reason to disbelieve what the witnesses had said. The investigation and disciplinary hearing was fairly conducted [thus far, plainly, the Tribunal was considering the disciplinary hearing and had not yet turned to the appeal].

7.3 The respondent had reasonable grounds for its belief which led to the decision to dismiss.

7.4 However, the appeal was unsatisfactory. The Claimant attended and said that he had made a mistake because he was under stress. Mrs Callow did not investigate that, telling the Tribunal that she had believed what the claimant said.

7.5 Therefore, the issue as to whether the dismissal was within the range of reasonable responses has to be seen in the light of that concession. The Tribunal has concluded that no employer who believes that an employee has made a mistake through stress would have dismissed the employee purportedly for gross misconduct; Mrs Callow accepted that the claimant had made a mistake.

7.6 Taking into account, as Mr Mackie noted, that the issue concerned only two timesheets with reference to three days, the Tribunal has concluded that dismissal was not within the range of reasonable responses and, therefore, was unfair.

7.7 The Tribunal has noted that the claimant had failed to attend a disciplinary hearing which was finally fixed five months after the original disciplinary hearing date. The Tribunal is of the view that that amounted to contribution to the dismissal since he forewent the opportunity to put his case at the disciplinary stage. The Tribunal has concluded that the contribution in those circumstances amounts to 20 per cent.

7.8 The Tribunal concluded that the dismissal was wrongful as it was satisfied, on the basis of the conclusion reached by Mrs Callow, that the Claimant had not been guilty of gross misconduct but had been guilty of making a mistake as a result of being under stress."

Grounds of appeal

7. Before us two grounds of appeal are taken. They are that the Tribunal should have but did not consider contributory conduct by considering whether or not the failure of the Claimant, as he accepted, to submit accurate timesheets had caused or contributed to his dismissal and if so what percentage deduction should be appropriate. Secondly, it is argued that the Employment Tribunal substituted its own view for that of the employer, impermissibly, in determining that dismissal fell outwith the range of reasonable responses in these circumstances.
8. For those who later read this decision, it is important to note what was not argued before us. It was not asserted that the findings of fact were made in material misapprehension of the evidence. Occasionally the submissions of Mr Frew for the Appellant flirted with this issue but no such ground was raised and it would have required a different procedure to be adopted since it would have required us to be sure that we had seen all the evidence before the Tribunal. Accordingly, we approach the findings of primary fact as ones which, although briefly stated by the Tribunal, the Tribunal was fully entitled to make.
9. Secondly, no point is taken as to any inconsistency in conclusion between paragraph 7.1 and the reference to Mrs Callow's belief at the time she heard the appeal. That, we think, is because the Tribunal's Judgment, properly read, was talking at paragraph 7.1 about the initial decision to dismiss and not about the dismissal process taken as a whole, to which it is common ground the requirement of assessment of fairness under section 98 of the Employment Rights Act 1996 relates. We shall deal with each of the grounds in slightly greater detail.

Contributory conduct

10. It is submitted by Mr Frew, and conceded by Mr Foote in his realistic and succinct submissions for the Respondent to this appeal, that the Tribunal's decision at paragraph 7.7, although described as contribution, was made by reference to the failure of the Claimant to attend a disciplinary hearing. At the time that this case was decided and the issues arose, the 2002 Act applied. That required a Tribunal to make a deduction in a range from 10 to 50 per cent in circumstances in which a Claimant had not attended a disciplinary hearing. The finding of 20 per cent is entirely consistent with those provisions and it is the joint understanding of the parties before us that that is what the Tribunal were doing. To describe it as contribution is a misnomer but may perhaps have something to do with what occurred, we are told by Mr Frew, (although Mr Foote, not being there, cannot comment) immediately after the decision had been given in the Tribunal by Judge Carstairs. Mr Frew asked if the Tribunal intended that the question of contribution, which he considered on the available authorities the Tribunal was obliged at least to consider, should be dealt with at the remedies hearing. The response was terse: "No". No reasons were given.
11. We are satisfied, and Mr Foote concedes, that the appeal on the contribution point must be allowed. We accept that Swallow Security Services Ltd v Millicent [2009] EAT/0297/08, a decision of this Tribunal of 19 March 2009, HHJ Jeffrey Burke QC presiding, is to the effect that an Employment Tribunal may err when it fails to consider the issue of contributory fault in circumstances in which it is plain that an employee has been guilty of unacceptable conduct. The decision in the case of Sodexho Defence Services Ltd v Steele [2009] EAT/0380/08, again a decision of this Tribunal, on this occasion presided over by HHJ Reid QC on 11 June 2009, is to the same effect, at least to the extent that it requires a Tribunal to consider whether or not to hear the question of contributory conduct.
12. It seems to us that this case so cried out for a consideration of the effects upon his dismissal of the Claimant having put in timesheets which overstated the hours he had worked that a Tribunal could not properly fail to deal with the question of whether and to what extent that had contributed to his dismissal such that his damages should be reduced. Indeed, we would go so far for our part as to suggest that this would be one of those rare cases in which it could be said to be perverse of a Tribunal not to have considered the point and come to some conclusion. Absent the conduct which appears on the face of it unacceptable, there would have been no dismissal, as we understand the primary findings of fact. It follows that some assessment of contribution needed to be made, but it was not. If there were reasons not to do so which appeared to the Tribunal to be good, they needed to be spelt out, but were not.

Substitution

13. The argument of Mr Frew for his part was as realistic as was the argument of Mr Foote in accepting that it would be a difficult submission for him to contend that the conclusion of the Tribunal which he contends was "substitution" was perverse. He did not shrink from it, but he accepted, rightly, the difficulty. We agree that perversity is a very high hurdle. We do not need, in this case, to set out the various different expressions which have been used to indicate the height of that hurdle, save two: "wholly impermissible" and "flies in the face of logic". It seems to us that the Judgment of the Tribunal cannot possibly in this case be said to be perverse once the evidence was accepted that the Appellant officer, Mrs Callow, believed that the Claimant had entered the excessive timesheets, to the limited extent he did, as a mistake through stress. It was open, as it seems to us, to the Tribunal to come to that conclusion.
14. We begin our discussion of whether the Tribunal here substituted its own view with the question of perversity, because in a substitution argument the fact of substitution is often indicated, it is argued, by the quality of the conclusion which is reached. The more surprising it is, the greater the temptation for an appeal court to conclude that the decision was one in which the Tribunal simply asked itself what it would have done rather than asked itself, as it properly should, whether it was reasonable for this employer to have acted as he did, applying the tests in section 98 of the Employment Rights Act.
15. Here, therefore, we begin our discussion acknowledging that the decision which the Tribunal reached was not a perverse decision. In the case of Bowater v Northwest London Hospitals NHS Trust [2011] EWCA Civ 63, Longmore LJ in his short Judgment, agreeing with the other members of the court, said when the court reversed the decision of this Tribunal in that case:

"The EAT decided that the ET had substituted its own judgment for that of the judgment to which the employer had come. But the employer cannot be the final arbiter of its own conduct in dismissing an employee. It is for the ET to make its judgment always bearing in mind that the test is whether dismissal is within the range of reasonable options open to a reasonable employer. The ET made it more than plain that that was the test which they were applying ... The EAT apparently did not believe that the ET decision were being true to their word, but there is just no evidence of that.

19. It is important that, in cases of this kind, the EAT pays proper respect to the decision of the ET. It is the ET to whom Parliament has entrusted the responsibility of making what are, no doubt sometimes, difficult and borderline decisions in relation to the fairness of dismissal. An appeal to the EAT only lies on a point of law and it goes without saying that the EAT must not, under the guise of a charge of perversity, substitute its own judgment for that of the ET."

16. Here, as in Bowater, the Tribunal had expressly reminded itself that it was not permitted to substitute its own view. We should take it at its word unless there is some powerful reason not to do so. There is no such powerful reason provided by the decision itself, for that fails the test of perversity. There is nothing in paragraph 7 which suggests by the words used, which would be the only clue to the Tribunal's reasoning process, that the Tribunal here was asking not what it was reasonable for the employer to do but was asking what in the employer's place it would itself have done.
17. Mr Frew points to the opening words of paragraph 7.4, "However, the appeal was unsatisfactory". That, he says, may be some indication that the Tribunal here was reaching a Judgment of its own and substituting its view for a view which properly depended upon the employer. As to that, it seems to us that the answer is this. First, a Tribunal's decision is not to be regarded as would be an elaborate piece of legal draughtsmanship. It is to be read as a whole. The pattern of this part of the Judgment, properly understood, is one in which the Tribunal has dealt in the first three sub-paragraphs with the disciplinary hearing and thereafter with the appeal hearing. By describing the appeal as "unsatisfactory", it is describing a conclusion it reached as to the relative processes of each set against the test it had derived from British Home Stores Ltd v Burchell [1978] IRLR 379, which is summarised above. It plainly did not regard the investigation as meeting the test of reasonableness, but in any event its decision as to fairness was not based upon the lack of investigation. It was based fairly and squarely upon the question whether, given that Mrs Callow, the appeals officer, conceded (in evidence it must be, since her written statement and letter contemporaneous with dismissal said the opposite) that she believed the Claimant when he said that he had made a mistake through stress but yet went on to dismiss him – that decision was within the range of reasonable responses. The Tribunal does not say it is not the decision it would have made. It applied the right test. The opening words of paragraph 7.4, which indicate within themselves no actual substitution although they beg some questions, do not, as it seems to us, go any way towards persuading us that here the Tribunal has substituted its own Judgment.
18. Generally we accept that the Judgment is perhaps less full and elegant than it might have been. We confess, having heard Mr Frew, to a sense of unease but, applying the tests which are applicable, and reminding ourselves that the task of the Tribunal is to make its own decision as to what falls within the range of reasonable responses, and that it cannot abrogate that judgement to an employer but is called upon by Parliament to make it, we cannot say either that it is perverse or that the Tribunal here has substituted its own Judgment. It follows that on this ground the appeal must fail.

Conclusion

19. The appeal succeeds on the basis of contributory conduct. The parties are agreed that the case must be remitted and are both agreed that remission should be to a fresh Tribunal. We accept that invitation, both because the parties are agreed and because of that which Mr Frew said to us had occurred at the conclusion of the hearing before the Tribunal, because it might indicate a closed mind to the question of contribution which falls for decision. The scope of the remission needs to be carefully understood. It will not be open to the Tribunal to conclude that there has not been an unfair dismissal. That it must accept. Equally, it must accept that the Claimant acknowledges that he submitted timesheets which overstated the hours he had worked. It will be open to the Tribunal to investigate how serious and how blameworthy that conduct was in context.
20. We do not wish to put limits upon the extent to which the Tribunal may consider evidence about this, but it will plainly want to establish whether the Claimant knew that to put in inflated timesheets was blameworthy in the context of his relationship with his erstwhile employer and may wish to consider the extent to which any real stress that he suffered caused him to make what is described as a mistake. It will wish to consider and take as a fact that Mr Parker mentioned to the Claimant, at a time when he could have remedied his mistake in one timesheet, that his timesheet was inaccurate but that the Claimant declined to do so. The Tribunal will not consider, in dealing with this aspect of contributory conduct, the failure to attend a disciplinary hearing. In respect of that, whatever the result as to contribution there will be a further 20 per cent reduction.
21. Given the scope of this case, there is much to be said for the parties discussing between themselves whether some compromise can be effected. It seems plain to us that the level of contribution which is likely, although we are in no position to say any more than that (and of course we would defer to any fact-finding by the Tribunal) will probably be substantial. However, whether or not the parties accede to that invitation must, of course, be a matter entirely for them.
22. On that basis, this appeal is allowed to the extent that we have indicated.