Appeal No.	 EAT/314/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 December 2000
Judgment delivered on 11 January 2001

Before
THE HONOURABLE MR JUSTICE BELL
LORD DAVIES OF COITY CBE
MRS J M MATTHIAS

MR C S EDWARDS	APPELLANT

THE GOVERNORS OF HANSON SCHOOL	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR TERENCE RIGBY
(of Counsel)
Messrs Wilkinson Woodward
& Ludlam
Solicitors
11 Fountain Street
Halifax
HX1 1LU	
For the Respondents	MR COLIN HAWGOOD
(Representative)
First Assist Group Ltd
Marshalls Court
Marshalls Road
Sutton
Surrey
SM1 4DU

	MR JUSTICE BELL:	

1.	Mr Edwards appeals against the decision of the Employment Tribunal sitting at Leeds on 14 January 1999. The Tribunal had previously decided, after a hearing on 29 and 30 September and 1 October 1998, that Mr Edwards had been unfairly dismissed. The decision under challenge on this appeal is that the Respondents should pay Mr Edwards the sum of £2,310 as compensation, the entirety being represented by the basic award; had reasonable procedures been followed by the Respondents, the dismissal of Mr Edwards would have been inevitable in any event and, therefore, there would be no compensatory award.

2.	The main question of principle raised by the appeal is whether it is correct in law for an Employment Tribunal to ignore an allegation that the employer’s unfair treatment of the employee has caused the employee to be ill and made dismissal by reason of lack of capability to perform his work, due to ill health, inevitable, when deciding that it is just and equitable not to make a compensatory order for unfair dismissal. There are, however, a number of other issues, including a question of jurisdiction.

3.	The material history involves events during Mr Edwards’ employment by the Respondents, the procedures followed by the Employment Tribunal and the Employment Appeal Tribunal, and the allowing of Mr Edwards’ appeal by a single Lord Justice of Appeal.

4.	Mr Edwards was employed as a teacher by the Respondent Governors at Hanson School, a grant maintained school, from 1 September 1990 until his dismissal which took effect on 30 April 1998.

5.	As the Employment Tribunal later found, he was intermittently absent through sickness from 1993 to 1996. From September 1996 there was a continuous period of sickness by reason of depression caused by stress at work. Mr Edwards’ Originating Application complaining of unfair dismissal attributed his illness to years of unfair treatment at the hands of the headmaster, Mr Chaplin, compounded by failure to deal adequately with his complaints.

6.	Mr Chaplin was concerned about when Mr Edwards might return to work, so he gave instructions to City of York Education Services which acted as an advisory body to the Respondents on a contractual basis. In January 1997 its personnel officer, Mr Dyson, obtained Mr Edwards’ consent to obtaining information about his illness, and on 29 January 1997 its Occupational Physician, Dr Woodrow, wrote to Dr O’Melia, the consultant physician treating Mr Edwards.

7.	On 11 February 1997, Dr O’Melia reported various of Mr Edwards’ grievances about Mr Chaplin, and his opinion that Mr Edwards was suffering from stress at work, the salient feature of which was depression as a result of which he was unable to go to work. Dr O’Melia had treated Mr Edwards with an antidepressant drug and supportive psychotherapy with the aim of an early return to work, and he had improved. Dr O’Melia concluded that at the existing rate of progress Mr Edwards should be fit to return to work, at least part-time, within the next 28 days. On 17 February 1997 he wrote to Mr Chaplin that Mr Edwards was planning to return to work within the next 28 days and that he, Dr O’Melia, would not oppose that. Mr Chaplin who had previously written to Mr Edwards that he could not be allowed to return to his duties until certified fit to do so, wrote again saying that the Respondents had medical approval for his return.

8.	Mr Edwards returned to work on 10 March 1997 but by then Mr Chaplin had taken the view that the time had come to resolve the difficulties arising from Mr Edwards’ attendance record. On 21 March 1997 Mr Chaplin conducted a Disciplinary Meeting, and Mr Edwards was given a verbal warning, to remain in force for six months.

9.	Mr Edwards worked until 22 March and on 7 and 8 April 1997. He then went off sick and never returned to work again.

10.	Mr Chaplin decided that the matter of Mr Edwards’ illness ought to be properly investigated and pursued. Dr Woodrow obtained reports from Mr Edwards’ doctors and she saw him on one occasion, on 12 May 1997. On 2 June 1997 she wrote to Mr Dyson that there would be stress if Mr Edwards returned to work or if he took early retirement on health grounds with a reduction in gainful activity and income. She concluded that she did not think that he would be fit to return to work for the remainder of the summer term. In the longer term it was unlikely that he would sustain the duties associated with his full-time post, in her view. On 30 June 1997, she wrote again to Mr Dyson who had asked for an opinion on Mr Edwards’ fitness for part-time employment:

“I last saw Mr Edwards on 12 May 1997. Despite appropriate medical support, he remained unwell, as was obvious to me from his symptoms and from his overall demeanour. I judged that he would not be fit to return to part time work in the foreseeable near future, by which I mean at least the next few months from the date of seeing him.”

11.	The Tribunal in due course found that Mr Edwards was not shown either of Dr Woodrow’s June letters or consulted by the Respondents about their contents or given an opportunity to challenge them or to produce further medical evidence. Mr Chaplin caused a meeting of the Respondents’ Staffing Sub-committee to be convened on 18 July 1997. Mr Edwards was not invited. A decision was taken to dismiss him, and he was sent notice of termination of his employment by letter dated 21 July 1997.

12.	The Respondents realised the inappropriateness of this procedure and wrote to Mr Edwards’ trade union representative that it had been decided that the whole process would recommence. A meeting of governors took place on 15 September 1997, at which Mr Edwards was represented by the union officer. Mr Chaplin presented a case that absence was the only issue. Mr Edwards’ absences had been a cause for concern for six years. It was clear that he was not capable of fulfilling his contractual duties. The only medical evidence before the governors was the letters of 2 and 30 June 1997. Mr Edwards and his representative did not produce medical evidence; nor had they seen the medical evidence upon which the governors were relying. A decision was made that Mr Edwards should be dismissed. The letter dated 17 September 1997, described the reason for dismissal as follows:

“ ... the decision of the Governor’s Sub-Committee is that the level of your absence from school is no longer sustainable and the duty or incapacity to fulfil your contract of employment owing to ill-health, that you be given notice of dismissal from your post as teacher at Hanson School with effect from 31 December 1997.”

13.	An appeal hearing took place on 15 December 1997. Mr Edwards was unwell and did not attend. There was a rehearing at which Mr Chaplin presented the same case as he had presented in September. The decision to dismiss was upheld. The notice given expired on 30 April 1998.

14.	When Mr Edwards’ complaint of unfair dismissal came before the Tribunal at the end of September 1998, the Respondents called evidence which appeared to the Tribunal to indicate that the question of whether they had followed appropriate procedures in dismissing Mr Edwards on the grounds of long term sickness fell to be considered. But when Mr Edwards gave evidence, he made a number of very serious allegations that Mr Chaplin had maliciously caused him to be ill and in general persecuted him and treated him unreasonably and unfairly, in respect of his teaching allocations and choosing to treat his illness as a disciplinary matter. Those allegations had not been put to Mr Chaplin by Mr Edwards who represented himself. The Tribunal decided that it would be appropriate to consider the question of the fairness of the Respondents’ procedures before entering into those “wider grounds”, so Mr Hawgood who represented the Respondents did not cross-examine Mr Edwards about the wider grounds and Mr Chaplin was not called to rebut them. The Tribunal made no finding in respect of those matters and noted that neither the Respondents nor Mr Chaplin made any admission in respect of them.

15.	The Tribunal concluded that the reason for Mr Edwards’ dismissal was incapacity by reason of long-term illness, which fell within the category of capability for the purposes of section 98 of the Employment Rights Act 1996. It found that there was no proper consultation by the Respondents with Mr Edwards in respect of his dismissal for long-term sickness. The lack of proper consultation made the dismissal of Mr Edwards unfair and the unfairness was not cured by the appeal process.

16.	The Tribunal adjourned the hearing for determination of remedy while indicating a strong provisional view that had fair proceedings been followed, the dismissal of Mr Edwards would have been inevitable. It understood that Mr Edwards was contemplating proceedings in the High Court for damages and urged him to consider whether he wished to ventilate the wider allegations before the Tribunal. It expressed the view that they were matters of extreme difficulty, best dealt with before the High Court, with all its expertise, rather than by the Tribunal.

17.	Nevertheless Mr Edwards returned to the Tribunal on 14 January 1999 for his remedy.

18.	The Tribunal assessed the basic award at £2,310. So far as any compensatory award was concerned it reminded itself of the provisions of section 123(1) of the 1996 Act, that:

“ (1) Subject to the provisions of this section and sections 124 [,126, 127 and 127A(1), (3) and (4)], the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.”

	Section 124, of course, set a limit on any compensatory award. At the material time the limit was £12,000.

19.	The Tribunal referred to its earlier decision, and continued:

“6. ......... The applicant has argued that if proper procedures had been followed, he would have been able to produce evidence from his medical attendant to show that if he was not dismissed then the likelihood was that he would, in any event, have made a recovery. As against this, our attention has been drawn to medical evidence from the respondent’s occupational physician to the effect that that the applicant would never have recovered. We have not heard sworn evidence from any medical attendant. On such evidence as is before us and having heard particularly the evidence of the Governors as to the matters which were in their mind collectively, we take the view that this was one of those cases where there was a long-term illness suffered by an employee and where the Governors were very anxious that proper service to the children in the school should be maintained. The prospects of recovery of the applicant were problematical to say the least of it and, on balance of probability, we are satisfied that even if the applicant had been able to present his case as he wished, the respondents would have come to the conclusion, in any event, that he be dismissed. Furthermore, we would have regarded this decision as being within the range of response of a reasonable employer. On those grounds, therefore, so far we would find that the decision to dismiss would have been inevitable.
7. However, the matter does not quite end there since the applicant has alleged in his evidence that the headmaster of the school, Mr Chaplin, by reason of a long and purposive campaign of ill-treatment, caused the applicant to become ill and that this was, in effect, the cause of his dismissal. As we have found, the Governors were not, on the evidence before us, privy to any such matter. It has not been properly ventilated but, nevertheless, on the law as we understand it, if Mr Chaplin did cause the applicant to suffer illness through malice or even through thoughtlessness or negligence or nothing worse than that, then on the face of it the applicant might well proceed in Court to claim damages. The question which concerns us is whether it would be just and equitable in all the circumstances of this particular case, to award the applicant a measure of compensation by way of a compensatory award if he could show that his illness arose from some wrongful act or omission on the part of Mr Chaplin.”

20.	The Tribunal referred to Devine v. Designer Flowers Wholesale Florist Sundries Ltd [1999] I.R.L.R.517, and to London Fire and Civil Defence Authority v. Batty [1994] I.R.L.R.384 where the judgment of the Employment Appeal Tribunal was given by Morison J., then President.

21.	The Tribunal concluded:

“9. Bearing those two decisions in mind, we take the view that in this particular case the issue of dismissal is on the facts a separate one from that of any injury which may have been caused to the applicant by reason of the acts or omissions of Mr Chaplin. The applicant had been ill for a protracted period before the matter of dismissal came into question. He would be entitled to seek damages in the Court if he could establish that his illness did result from such acts or omissions but bearing in mind especially the decision of Morrison J. to which we have referred, we do not think it just and equitable for this tribunal to go on to award the applicant a compensatory award if he were able to prove these allegations, bearing in mind our findings as to the dismissal and the reasons for it. This, of course, does not in any way prejudice the applicant as regards any further claim which he may be advised to make and equally does not disadvantage the respondent. In all the circumstances, therefore, we find it just and equitable that there should be no compensatory award in this case.”

22.	Mr Edwards appealed to this Appeal Tribunal, differently constituted, which dismissed his appeal at a Preliminary Hearing at which Mr Edwards again represented himself. The Appeal Tribunal’s judgment considered and rejected two grounds which were clearly set out in Mr Edwards’ Notice of Appeal.

23.	Mr Edwards applied for a Review of the Appeal Tribunal’s decision, which was refused, as was his application for permission to appeal to the Court of Appeal. So he applied to the Court of Appeal for permission to appeal. His application came before a single Lord Justice of Appeal who identified a third ground of appeal. In the view of the Lord Justice it was “arguable that it is not necessarily just and equitable to deny an Applicant a compensatory award if it be the case that the illness which made his dismissal inevitable was itself brought about by the way the Applicant was treated by the employer.” With the wisdom of hindsight, it is possible to see that this point was raised in the last few lines of Mr Edwards’ Notice of Appeal to the Appeal Tribunal, albeit so indirectly that we understand why our colleagues did not appreciate it.

24.	The single Lord Justice thought it better that the Appeal Tribunal should hear the matter out than that the Court of Appeal should undertake it without the benefit of the Appeal Tribunal’s fully considered view, so he gave Mr Edwards permission to appeal, but urged the parties “to agree that the appeal be allowed to the extent only of remitting the case to the Employment Appeal Tribunal for a full hearing inter partes on the point [he had] indicated”, provided that Mr Edwards obtained legal representation; otherwise the matter might as well stay in the Court of Appeal.

25.	Mr Edwards did obtain legal representation, and the Respondents did agree to the appeal being allowed, to the extent suggested by the single Lord Justice, at least. On 23 May 2000 an order was sealed in the Court of Appeal, albeit bearing the name of the single Lord Justice alone: “BY CONSENT IT IS ORDERED that the appeal be allowed to the extent of remitting the appeal from the Employment Appeal Tribunal to the Employment Appeal Tribunal to be heard by the Employment Appeal Tribunal notice.”

26.	So the matter was listed and argued before us.

27.	Early in the hearing we raised the questions, firstly, of whether the matter was before us on the one ground of appeal noted by the single Lord Justice of Appeal, or on all the grounds which Mr Rigby wished to argue on Mr Edwards’ behalf, and secondly, whether a single Lord Justice had jurisdiction to allow an appeal from the Appeal Tribunal with the consent of the parties, and thirdly, if so, whether there was jurisdiction to remit the matter to the Appeal Tribunal rather than to allow the appeal with reasons and to remit the matter to the Employment Tribunal.

28.	We heard very little argument on those questions, which is hardly surprising, since we raised them without warning. We took the pragmatic course of hearing Mr Rigby’s arguments on all his grounds of appeal. Our own researches since the hearing have revealed that section 59 of the Access to Justice Act 1999 substituted for section 54(2) to (4) of the Supreme Court Act 1981 provisions which enable a single Lord Justice to deal with any proceedings save where the Master of the Rolls directs a larger, minimum number. Even before then a Court of Appeal Practice Direction enabled a single Lord Justice to dispose of appeals in accordance with the written consent of the parties. Moreover, as a matter of practice the Court of Appeal has on occasion remitted a matter to the Appeal Tribunal, rather than to the Employment Tribunal, where a decision of the Appeal Tribunal at a preliminary hearing has been reversed. We still have some reservations about an appeal being allowed against a decision of the Appeal Tribunal, albeit made at a preliminary hearing, on the basis that a ground of appeal is merely arguable, however well-intentioned and sensible that course may appear to be in the particular case. But we are clearly bound by the formal order of the Court of Appeal to which we have referred, which contains no restriction on the grounds to be relied upon. As it happens, the decisive ground of appeal is the one raised by the single Lord Justice, which was not dealt with by the Appeal Tribunal, and in that sense remained undecided. So, we have jurisdiction to make the order which appears at the end of this judgment, in our view.

29.	Mr Rigby contended firstly, that the Employment Tribunal was wrong in law to decline at the first, “liability” hearing to hear evidence of, and to adjudicate upon, Mr Edwards’ allegations that his illness had been caused, aggravated and perpetuated by the Respondents, through Mr Chaplin, persistently and for no good reason refusing to allow him to teach “A” level courses, initiating disciplinary proceedings in March and May 1997 and issuing a verbal warning in respect of absences from school which were due to genuine ill-health, and failing to follow proper ill-health procedures.

30.	Secondly, he contended that the Employment Tribunal thereby failed at the “remedy” hearing to consider whether the dismissal was “substantively” as opposed to “procedurally” unfair, and whether it was appropriate, therefore, to enquire at all into whether dismissal would have been inevitable even if there had been no procedural unfairness.

31.	Thirdly, he contended that the Employment Tribunal was in any event perverse in deciding that there should be no compensatory award because dismissal would have been inevitable, when this involved “embarking upon a sea of speculation” without medical evidence about Mr Edwards’ fitness to work at the September 1997 date of dismissal; without consideration of whether sympathetic and sensitive consultation might have effected a recovery of fitness to work; without considering whether it was just and equitable to deny Mr Edwards a compensatory award if the illness which made dismissal inevitable was itself brought about by the way that he had been treated by the Respondents; and without considering whether the compensatory award should be reduced rather than extinguished.

32.	In our view the case of Devine, to which the Employment Tribunal referred, does not bear on Mr Rigby’s first point, but the case of Betty does, and Mr Rigby accepted that he had to demonstrate that Betty was wrong. He could not distinguish it on the facts, so far as the question of unfair dismissal is concerned.

33.	Mr Betty was accused by his employers of racial discrimination and harassment of fellow employees, which subsequently proved to be groundless. He suffered a nervous breakdown from which he never fully recovered. As a result, he was retired from the fire service on medical grounds.

34.	An Industrial Tribunal found that he had been unfairly dismissed. According to the Tribunal, although the employee was permanently unfit to serve as a fire-fighter and the employers had properly examined his medical condition before taking the decision to dismiss, the dismissal was unfair because his illness was due to his treatment by the employers.

35.	The Employment Appeal Tribunal held that, for unfair dismissal purposes, the Industrial Tribunal should not have concerned itself with the cause of the employee’s problems. In the words of Morison J., the President:

“The  employers say that for the purpose of unfair dismissal, the Industrial Tribunal should not have concerned itself with the issues as to the cause of the employee’s problems. The fact that the employer may have caused or contributed to them might give rise to actions for damages for breach of duty of care or to issues, as here, which have to be resolved outside the procedure of the Industrial Tribunal as to whether the injuries he has sustained were injuries attributed to his service or not.
It seems to us that implicit in the Tribunal’s decision is the proposition that because they found the employee was ill, because of the way that the employer had treated him, he could not fairly be dismissed on grounds of ill health. Whether the Tribunal took the view that wherever an employer injured an employee he could not fairly dismiss the employee on grounds of ill-health, or were distinguishing this case from hundreds of other similar cases where, for example, an employer is in breach of his Factory Act obligations to guard a machine’s blade and thus the employee’s fingers or hand are amputated, we cannot discern. Nor can we discern whether the Tribunal was saying that on the facts of this case the employee could not have been fairly dismissed. Nowhere do they say that the dismissal was premature, and it appears that they were taking the view that because of the behaviour of the employer, which is to be deplored, the dismissal for the illness which the employers caused could never be fair.
It seems to us that Tribunals should not be concerned to ascertain whether the illness which is the reason for the dismissal was caused or contributed to by the employer. The question in issue is whether, in the light of the employee’s medical condition and the enquiries and procedures the employer made and used before deciding to dismiss, the dismissal was fair. To introduce questions of responsibility for illness or injury would take a Tribunal down a path that could lead to endless dispute on matters on which that they would have no special expertise. We do not consider that the employer has disabled himself from fairly dismissing an employee whom he has injured. If the employee was injured by a breach of the employer’s duty to the employee, the employee will be entitled and able to recover appropriate compensation.
The question as to whether the dismissal was fair or unfair depends on different factors. An employer’s duty to act fairly in the dismissal is unaffected by considerations as to who was responsible for the employee’s unfitness for work. Here it is clear that the employee was unfit for work. The employers were reasonably justified in so concluding after proper investigation and after the matter had been fairly debated.”

So the employers’ appeal was allowed.

36.	We are conscious of the authorities which provide that this Appeal Tribunal should only rarely disagree with a previous decision of its own. But if the judgment in the case of Betty is to be taken as authority for the proposition that an employer’s treatment of an employee, which causes ill health which in turn causes incapability which the employer treats as a reason for dismissal, can never of itself make the dismissal unfair, we do respectfully disagree. In our view, this conclusion would place an unjustified fetter upon the purpose of section 98(4) of the Employment Rights Act 1996, which provides that where an employer has established the reason(or, if more than one, the principle reason) for the dismissal and that it is a reason falling within subsection (2), such as the employee’s lack of capability to perform his work,

“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 sufficient reason for dismissing the employee, and 
(b) shall be determined in accordance with equity and the substantial merits of the case.”

37.	The jurisdiction of the Employment Tribunal is entirely the creature of statute, and that provision is widely drawn. It may well be that the cases where an employer’s earlier treatment of an employee leading to incapacity through ill-health means that it can only dismiss him unfairly will be exceptional, as Mr Rigby appeared minded to concede, and that they would not include “standard” cases of injury caused by the employer’s negligence or breach of statutory duty where there is a clear cause of action in a civil court for damages which may, in any event, exceed the statutory limit on a compensatory award for unfair dismissal. In such cases it would no doubt be inequitable that an otherwise fair employer should only be able to dismiss the employee at the cost of a finding of unfair dismissal. Moreover it might well be that the High Court or County Court, with its daily experience of such cases, would be particularly well equipped to judge and award proper compensation, without statutory limit.

38.	But it is not difficult, in our view, to imagine cases where those factors carry less weight or no weight at all. If the employer or someone for whom it is responsible has acted maliciously, or wilfully caused an employee incapacitating ill-health, we see no reason why dismissal, however fair the ultimate procedures in themselves, should not lead to a finding of unfair dismissal. In many cases malicious injury will be followed by unfair procedures, but this does not necessarily follow. Even where the employee has been badly treated and has suffered ill health, there may be cases where the employee’s prospects of bringing a successful court case for damages are limited. Perhaps illness was not a foreseeable result of the particular unfair treatment at work. We do not believe that Employment Tribunals are ill equipped to investigate and resolve issues relating to an employer’s conduct causing illness leading to dismissal.

39.	This said, Mr Edwards did achieve a finding of unfair dismissal at the first “liability” hearing by the Employment Tribunal, and in our view it is not possible to say that the Tribunal erred in law at that hearing in not considering the wider issues, since it merely decided that it was “appropriate to consider the matter of the fairness of procedures before entering into [the] wider grounds” of unfairness alleged by Mr Edwards. That was a pragmatic course which the Tribunal was entitled to take, in our view, in circumstances where the Tribunal had heard evidence of unfair procedures before Mr Edwards raised his complaints of malicious treatment which he had not put to the Respondent’s witnesses. The Tribunal was, in our view, entitled to take the view that since Mr Edwards’ case of unfair dismissal was to succeed on other grounds, there was no advantage to gain by adjudicating upon his complaints of long-standing ill-treatment and inappropriate disciplinary proceedings and verbal warning in March and May 1997.

40.	So Mr Rigby’s first ground of appeal fails in the particular circumstances of this case.

41.	Turning to the second ground, the distinction between “procedural” unfairness and “substantive” unfairness came into prominence in Steel Stockholders (Birmingham) Ltd v. Kirkwood [1993] I.R.L.R.515, a decision of the Employment Appeal Tribunal sitting in Edinburgh. It was said that in the case of “substantive” unfairness it was not legitimate for a Tribunal to ask whether  the employee might have been dismissed for redundancy even if there had been no unfairness; that question could be asked where the unfairness was merely “procedural”.

42.	However, in O’Dea v. ISC Chemicals Ltd [1995] I.R.L.R.599, the Court of Appeal described the remarks in Steel Stockholders and in particular the distinction between substance and procedure as controversial. Peter Gibson L.J. saw considerable force in the comments of the editor of Industrial Relations Law Reports at [1993] I.R.L.R.509:

“In truth, whether unfairness is substantive or merely procedural cannot be assessed by a predetermined classification of conduct. Whether the failure was related to substance rather than procedure can only be judged in retrospect, and the criterion for so judging surely must be whether the unfairness made any difference to the outcome.”

Peter Gibson L.J., with whom Hutchison L.J. agreed, said:

“I do not regard it as helpful to characterise the defect as procedural or substantive nor in my view should the industrial tribunal be expected to do so, though in fact in the present case the industrial tribunal did repeatedly describe the defect as procedural.”

43.	Nevertheless in King v. Eaton Ltd (No.2) [1998] I.R.L.R.686, Lord Prosser giving the judgment of the Court of Session, Inner House, saw no need to discard entirely terminology such as “merely procedural” or “of substantive importance”. The distinction would often be of some practical use in considering whether it was realistic or practicable, or “just and equitable”, to embark upon an attempt to construct an assessment of what would have happened but for the unfair departure from what should have happened. A Tribunal should not “embark upon a sea of speculation”.

44.	In the light of O’Dea we do not consider that the Employment Tribunal can be faulted for failing specifically to consider whether Mr Edwards’ dismissal was “substantively” as opposed to “procedurally” unfair as a matter of mere categorisation, but Mr Rigby’s argument on his second ground merged into his argument on the third.

45.	In our view the Employment Tribunal was wrong in this case to conclude, as in effect it did in reliance on Betty, that Mr Edwards’ allegations against the Respondents in respect of his treatment before March 1997 and his treatment including the decision to take disciplinary action through March and May 1997, were irrelevant to the question of whether it would be “just and equitable” for the Tribunal to make a compensatory award.

46.	The wording of section 123(1) of the Employment Rights Act 1996 does not purport expressly to follow the ordinary common law principles relating to causation of loss from, for instance, negligence or breach of contract. In so far as it does reflect those principles by requiring “regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer”, it is very widely expressed and it is, in our view, made potentially wider still by saying that “the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances” having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer. The words “such amount as the tribunal considers just and equitable in all the circumstances” must in our view be intended to keep the field of causation open to an element of discretion on the part of the Tribunal. It would have been simple to provide that, subject to section 124, “the amount of the compensatory award shall be the loss sustained by the complainant in consequence of the dismissal in so far as the loss is attributable to action taken by the employer”, otherwise. The words “just and equitable”, in our view, enable the Tribunal to take full account of the conduct of employer and employee, provided that that the award remains compensation of the employee rather than punishment of the employer.

47.	We do not believe that our conclusion on this point, the point identified by the Lord Justice of Appeal, expressly conflicts with Betty if Betty was correctly decided. No finding of unfair dismissal had been made in that case, so section 123(1) never came into play. In any event we do not believe that to introduce questions of responsibility for illness, in judging whether it is just and equitable to make a compensatory award, would lead to endless disputes which an Employment Tribunal is ill equipped to investigate or resolve. On the contrary we  consider that failure to carry out at least some investigation of allegations such as Mr Edwards wished to raise in this case, once unfair dismissal had been established (by whatever route), led to a result (no compensatory award at all) which was arguably not “just and equitable in all the circumstances”. It left him to bring additional and separate court proceedings which, in his state of health, he might not relish. Admittedly he might have to bring such proceedings, if it is not too late to do so, in order to achieve compensation above the maximum allowed by section 124, but in our view the choice in that respect ought to be left to him, rather than be forced upon him.

48.	Accordingly, we propose to allow this appeal and to remit the question of a compensatory award to a fresh Tribunal.

49.	The other matters argued by Mr Rigby as part of his third ground of appeal fall into place behind our decision to remit the question of a compensatory award. It may become apparent that Mr Chaplin’s earlier treatment of Mr Edwards was not even ill judged, let alone malicious. It may not be established that anything done by Mr Chaplin, whether in March to May 1997 or before then, caused or contributed to Mr Edwards’ ill health, whatever Dr O’Melia may think. It will be the responsibility of the parties to introduce such medical and other evidence as they choose. If the Tribunal does find that misconduct for which the Respondents are liable caused or contributed to Mr Edwards’ ill-health leading to his dismissal it will be for the Tribunal to assess whether it is just and equitable that a compensatory award should follow and, if so, to what extent.