Appeal No. EAT/83/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 22 May 2002

Before
MS RECORDER SLADE QC
MR D J JENKINS MBE
MR P A L PARKER CBE

MR D GREEN	APPELLANT

ROBINS & DAY LTD t/a WARWICK WRIGHT CLAPHAM	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised 

	APPEARANCES

For the Appellant	MR JOHN NECKLES
Representative
Public Transport Staff Consortium
31b Mervan Road
Brixton
London SW2 1DP	
For the Respondents	MR ANDREW-FRASER URQUHART
(of Counsel)
Instructed by:
Peugeot Motor Company PLC
Aldermoor House
PO Box 227
Aldermoor Lane
Coventry CV3 1LT	

MS RECORDER SLADE QC

1	This is an appeal by Mr Green against the Decision of an Employment Tribunal which reduced his awards for unfair dismissal by 100% and so gave him no remedy.  The Respondent, Robins & Day Ltd, cross-appeals against the finding of unfair dismissal.  Mr Green was employed by Robins & Day Ltd as a motor vehicle technician.  He had been employed by them and their predecessor from 14 April 1998 until his dismissal on 9 September 1999.  

2	The Tribunal found that the events giving rise to his dismissal were that between 17 - 20 August 1999 a vehicle was in the Respondent’s workshop which belonged to the sister of a member of staff who was herself a former member of staff.  The vehicle had not been booked in, in the proper way.  During the period the vehicle was in the workshop, Mr Green carried out some work on it, as did a trainee mechanic, but Mr Green only booked in 2.6 hours on the vehicle.  The General Manager, a Mr Steatham, was informed by the Workshop Controller that he suspected that labour costs were not being charged for work on the vehicle.  

3	On 3 September 1999, Mr Steatham commenced an investigation.  In the course of his investigation, he interviewed Mr Green, amongst others.  Notes made of that meeting by the Respondents as recorded at paragraph 4(ix) of the Employment Tribunal’s Decision that:
“(a)  the Applicant admitted doing work on the car;
 (b)  the Applicant admitted covering some of the work done on the car on other jobs;
 (c) the Applicant after initially denying fitting any parts to the car, admitted fitting a radiator, ten cylinder bolts, thermostat, belt pulley and exhaust flange kit.  The Applicant said the parts were with the car.”

4	Mr Green attended a disciplinary hearing on 9 September 1999.  At the end of the disciplinary hearing, Mr Steatham was of the view that the Applicant had done 10 hours work on the vehicle, having only booked out 2.6 hours, and booked out the other time to other customers.  Mr Green was dismissed for gross misconduct and was advised of his right to appeal.  

5	Mr Steatham carried out other disciplinary hearings on that day, in respect of other persons whom he considered were involved in the matter, and issued them with written warnings; three people were issued with such warnings.  There was correspondence between Robins & Day Ltd and Mr Green and his representative regarding his appeal, but eventually on 6 November, Mr Green’s union representative wrote, relinquishing his right to appeal.  

6	The majority of the Employment Tribunal concluded that Mr Green did not have a fair disciplinary hearing.  The majority considered that Mr Green was entitled to have a hearing before a person who would approach the matter with an open mind, listen to Mr Green and be prepared to believe him if he gave a credible explanation.  They considered on balance that the dismissal was unfair.  

7	The Tribunal then considered the question of contributory conduct and held, in paragraph 17 of its Decision that it was:
“satisfied from the evidence that the Applicant was actively involved in a plan which would, and did, defraud other customers of the Respondent.  The Tribunal finds that the Applicant as a senior member of staff carried out work on this vehicle and booked that work to other customers.  The Tribunal unanimously finds that such conduct amounts to gross misconduct and in all the circumstances considers that the Applicant was guilty of 100% contributory conduct.”

8	Three issues are raised by the Appellant in this appeal.  First, whether as a matter of law, the Employment Tribunal has the power to make a deduction of 100% from the basic and compensatory awards.  Second, if it does have such power, whether it was perverse for this Employment Tribunal to have done so, and third, whether the Employment Tribunal erred in failing to inform the Applicant that it was going to consider the question of contributory fault, thus depriving the Applicant of opportunities of adducing evidence and making submissions on the point. 

9	We will first consider a preliminary point which has been raised in this appeal, namely the absence of Extended Reasons.  This preliminary point was initially taken by Mr Fraser-Urquhart, Counsel for the Respondents, that this appeal cannot proceed, in any event, because Extended Reasons were not obtained.  The Reserved Decision of the Employment Tribunal runs to seven pages, but is headed “Summary Reasons”.  Extended Reasons were requested out of time, and the request was refused.  Mr Fraser-Urquhart draws attention to the Rules of the Employment Appeal Tribunal and we will turn first to Rule 3(1)(c).  That provides:
“(1) Every appeal to the Appeal Tribunal shall, subject to paragraphs (2) and (4), be instituted by serving on the Tribunal the following documents -…..
(c)   in the case of an appeal from an employment tribunal, a copy of the extended written reasons for the decision or order of that tribunal;”
Rule 39(1) provides:
“Failure to comply with any requirements of these Rules shall not invalidate any proceedings unless the Appeal Tribunal otherwise directs.”

10	The Employment Appeal Tribunal clearly has a discretion to proceed to hear an appeal in the absence of Extended Reasons, and clearly can do so if it can properly adjudicate on the matters before it in the absence of Extended Reasons, see, for example, Wolesley Centers Ltd -v- Simmons [1994] ICR 503.  Mr Fraser-Urquhart accepts that it is possible for us to adjudicate on the three matters raised in this appeal and, fairly, did not maintain his objection to the appeal proceeding without Extended Reasons.  We consider that we can properly decide the issues raised in this appeal, and on the cross-appeal on the Summary Reasons, and we therefore exercise our discretion under Rule 39 so to do.  

11	We turn to the first matter raised in the appeal - the power of the Employment Tribunal to reduce the basic and compensatory awards by 100%.  Section 118 of the Employment Rights Act 1996 provides that:
“where a Tribunal makes an award of compensation for unfair dismissal …. the award shall consist of  -
(a) a basic award (calculated in accordance with sections 119 to 122 and 126),
and 
(b) a compensatory award (calculated in accordance with sections 123, 124, 126 
[….and 127A(1), (3) and (4)]”
Section 122 (2) provides:
“Where the tribunal considers that any conduct of the complainant before the dismissal ……was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly.”
And section 123(6) provides:
“Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.”

It is to be noted that the Statute contains no limit on the percentage of the reduction.  

12	Further, it is clear from authority that there is power to make a 100% reduction.  In Hollier -v- Plysu Ltd [1983] IRLR 260, the Court of Appeal considered the broad approach of the Employment Appeal Tribunal in that case to be correct, while holding that it had erred in overturning the percentage reduction made by the Employment Tribunal.  The Court of Appeal set out, without dissent, the first category of case referred to by the Employment Appeal Tribunal, namely that when the employee is wholly to blame, the reduction could be 100% - see page 262, paragraph 17.  Whilst Mr Fraser-Urquhart has also brought Devis -v- Atkins [1977] ICR 662 and Chaplin -v- H R Rawlinson Ltd [1991] ICR 553 to our attention, those cases decided that it could be just and equitable to make a nil award of compensation, under what is now the Employment Rights Act 1996 section 123(1), rather than whether a 100% reduction can be made under what is now section 123(6), a compensatory award, or section 122(2), basic award.  However, it is clear that sections 123(6) and 122(2) provide power to reduce a compensatory and basic award to a nil amount; that power is unfettered, and therefore, the Employment Tribunal did not err in considering that it had discretion so to do.   

Perversity
13	It is said by Mr Neckles, who appears for the Appellant, that the decision to reduce by 100% the amount of compensatory and basic awards was perverse.  He draws attention to the fact that others involved in the misconduct in which Mr Green engaged, were given warnings and were not dismissed.  This factor was, no doubt, relevant to liability and was a matter advanced, it seems, at the Employment Tribunal.  However, it is not a matter which is relevant to the question of deduction for contributory fault - see Parker Foundry Ltd -v- Slack [1992] IRLR 11.  From the headnote it appears that the Court of Appeal decided:
“In determining whether to reduce compensation under ss.73(7B) and 74(6), of the Employment Protection (Consolidation) Act, an Industrial Tribunal is confined to taking into account the conduct of the complainant and not what happened to some other employee.”

14	Mr Neckles also draws our attention to the fact that Mr Green has always maintained his innocence of any wrongdoing, and that was a position he maintained throughout the Employment Tribunal proceedings.  Mr Fraser-Urquhart says that the findings of fact made by the Tribunal, particularly those in paragraph 17, support the 100% reduction for contributory fault.  He asks what could be more serious than an employee committing a fraud on other customers.  Further, he draws our attention to the well-known passage in Hollier -v- Plysu at paragraph 19, in which Lord Justice Stephenson said, referring to the percentage reduction:
“In a question which is so obviously a matter of impression, opinion, and discretion as is this kind of apportionment of responsibility, there must be either a plain error of law, or something like perversity, to entitle an appellate Tribunal to interfere with the decision of the Tribunal which is entrusted by Parliament with the difficult task of making the decision.”

Mr Neckles, in reply, referring to paragraph 17, asserted that there was no evidence that it was customers in the plural who were defrauded.  In our view, the 100% reduction was plainly open to the Employment Tribunal on the findings of fact made by it.  

15	Thirdly, it is said by the Appellant that the Employment Tribunal erred in law in failing to state that it would consider the deduction for contributory fault.  It appears that this Employment Tribunal did not inform the parties expressly that it would proceed to consider the question of deduction for contributory fault at the same time as it was considering the fairness of the dismissal.  It is said by Mr Fraser-Urquhart that the way in which the proceedings were conducted by the Respondent should have made it apparent to the Applicant that that matter was being considered and dealt with.  

16	Employment Tribunals are masters of their own procedure; it is clear that the question of a nil award was raised in the IT3 but it is also apparent that the Employment Tribunal did not expressly state that they would be dealing with this question of contributory fault, at the same time as they were considering the question of the fairness of the dismissal.  Mr Fraser-Urquhart says that whilst it would no doubt have been preferable for the Employment Tribunal to have said so expressly, it was no error of law on its part by failing to do so. 

17	It seems to us that it is an aspect of the fair conduct of proceedings that the parties should be informed by the Tribunal of what it will consider and decide at each stage of the proceedings.  In Iggesund Converters Ltd -v- Lewis [1984] ICR 544, at page 552G, Mr Justice Waite said:
“The requirements of justice are well recognised as including, for this purpose, the necessity to maintain clearly in the minds both of the tribunal and of the parties at every stage, the distinction emphasised by the House of Lords in W.Devis -v- Atkins between the considerations relevant to an investigation of fairness on the one hand, and those relevant to an investigation of contributory fault on the other.”

18	It is this question of contributory fault which is most liable to give rise to confusion which could be avoided if Employment Tribunals made it clear when that issue would be considered.  In this case, it appears that the Employment Tribunal did not do so.  However, when asked what arguments would have been advanced in support of any proposition of contributory fault, Mr Neckles mentioned two matters.  First, disparity in treatment between Mr Green and others who were interviewed in connection with the work done on the motor car, and, second, that Mr Green maintained he was not guilty of the gross misconduct for which he was dismissed.  

19	So far as the first matter is concerned, the disparity in treatment, as we have already found in our judgment, and on the basis of the authority of Parker Foundry, is not relevant to the question of contributory fault.  So far as Mr Green’s contention that he was not guilty of the offence for which he was dismissed, that was a matter which was before the Tribunal, fully considered by it, and on which the Tribunal, in paragraph 17 of its Decision came to its conclusion.  Therefore, in our judgment, on this occasion, no injustice has been caused by the failure to make clear to the parties that contributory fault would be considered at the same time as consideration of the fairness of the dismissal.  

20	We now turn briefly to the question of the cross-appeal.  Mr Fraser-Urquhart urges on us that this Employment Tribunal erred in law in finding the dismissal of Mr Green to be unfair in that it wrongly failed to take into account that there was available to him an appeal procedure which, if invoked, could possibly have rectified the unfairness of which the Tribunal found the employers to have been guilty.  

21	The Employment Tribunal clearly considered the effect of the existence of the appeal in that they have set out in their Decision the fact that the right to appeal had been drawn to Mr Green’s attention and the correspondence that had subsequently followed.  It cannot, in our view, be maintained that the Employment Tribunal overlooked the availability of an appeal to Mr Green.  It was a matter for the Employment Tribunal to assess the fairness of the dismissal against the factual background, and it cannot, in our judgment, be said that its assessment was such that no reasonable Employment Tribunal could have concluded, on the findings of fact as made by it, that this dismissal was unfair.  Accordingly, we dismiss the appeal and the cross-appeal.