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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Lewisham v. James [2003] UKEAT 0581_03_1612 (16 December 2003) URL: http://www.bailii.org/uk/cases/UKEAT/2003/0581_03_1612.html Cite as: [2003] UKEAT 581_3_1612, [2003] UKEAT 0581_03_1612

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APPEARANCES

 

For the Appellant	MR JOEL DONOVAN (of Counsel) Instructed by: London Borough of Lewisham Legal Services Lewisham Town Hall London SE6 4RU
For the Respondent	MR CHRIS WHITEHOUSE (of Counsel) Instructed by: Messrs Parken Arrenberg Solicitors 37 Rushey Green Catford London SE6 4AS


 


THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1. This has been the hearing of an appeal and a cross-appeal in relation to decisions on liability and remedy by the Employment Tribunal at London (South). The first Decision, which was made after a hearing on 5 March 2003, in a Decision handed down on 24 April 2003, was that the dismissal of the Applicant, Ms James, by the Respondent, the London Borough of Lewisham, was unfair; but that there should be a reduction in compensation of 60% so that she would receive 40% of the compensation to be assessed.
2. The second Decision, after a hearing on 25 April 2003, in a decision handed down on 12 June 2003, was that she should receive the sum of £10,772.73 in respect of her various claims after deduction for the 60% and after making certain, but, on the case for the Respondent, insufficient, allowance for mitigation of loss.
3. The grounds of appeal and of cross-appeal have been various in this regard. So far as the Respondent is concerned, the Council asserts that the Tribunal erred in various respects in making its finding of unfair dismissal. It does not quibble with the 60% reduction, if it were otherwise unsuccessful. The Applicant, while of course seeking to uphold the finding of unfair dismissal, quarrels with the deduction of 60 or any percent by way of contributory fault. The Respondent Council alleges that there ought to have been reduction on other grounds also in any event and, when turning to the question of compensation, challenges the Tribunal's conclusions as to mitigation.
4. Both sides have set out lengthy Notices of Appeal and cross-appeal and very helpful Skeleton Arguments. But, in the event, the argument became as a result of suggestions from the bench, somewhat shorter, and not all of the arguments on either side were mustered orally.
5. The dismissal of the Applicant originally occurred as a result of a decision of the Respondent on 5 July 2001. She had been a Day Services Officer employed by the Respondent working with adults with working difficulties in what has been loosely called a caring role.
6. She appealed, by way of an internal appeal within the Respondent, and meanwhile issued an application for unfair dismissal before the Employment Tribunal. That application was withdrawn by the Applicant, and the conclusion of a Tribunal on 22 November 2002 (with a different constitution from the subsequent Tribunal appealed from) set out in paragraph 3 that, having heard the submissions of the parties, it directed that the withdrawal of that Originating Application was a complete bar to the new Tribunal hearing any complaints of unfair dismissal relating to the allegations the subject matter of a new Originating Application which was by then issued.
7. That new Originating Application was issued in the following circumstances. On the internal appeal the dismissal was overturned and the decision of the appeal panel in a letter dated 26 April 2002 was recited as follows:

"The panel carefully considered the written and oral evidence presented by both sides and concluded that the Hearing Officer had followed the correct procedure and had made a proper and reasonable decision in this case. The Council has a duty of care for its vulnerable clients and the Panel felt that you had failed to discharge this duty.

However, having considered all the circumstances of the case, the Panel decided that you should not be dismissed but as an alternative should receive a final written warning to remain on your personal file indefinitely. Whilst the Panel decided to commute the decision to summarily dismiss you they considered your misconduct to be extremely serious and unacceptable in this area of care work. The Panel therefore agreed that you should not continue to work with vulnerable clients and that you should be transferred to an alternative post with appropriate training.

The Directorate has been advised of the Panel's decision and will contact you shortly concerning the available options for your return to work."

8. The Applicant was contacted by a letter from the Council dated 29 April 2002 which inter alia said as follows:

"It is our view that this means that the Panel has decided to re-instate your client's contract, though subject to a unilateral variation by way of disciplinary sanction. Such variation is provided for under the Council's contractual disciplinary code. The variation may well mean that your client shall receive lesser terms and conditions than she received previously."

9. The Disciplinary Code referred to contains relevant provisions at paragraph 7, which is headed "Possible Outcomes of the [Disciplinary] Hearing":

"7.2 If as a result of the hearing the Director decides that formal disciplinary action is appropriate, one of the sanctions set out below may be administered…

…

(d) transfer – see para 7.3 (i)

…

(g) relegation – see para 7.3 (iii)"

…

7.3 …

(i) Transfer – may be recommended on its own or in conjunction with a first, advanced or final written warning. Transfer, in this context, cannot take place without the agreement of the employee concerned. The trade unions in the receiving work area will be consulted. Payment would be made at the rate applicable to the new job.

…

(iii) Relegation – this constitutes downgrading the employee and may only be administered as an alternative to dismissal where mitigating circumstances prevail. The employee may be placed in a different work area undertaking different work and would be issued with a final written warning."

10. On 24 May 2002 a further letter was sent by Ms Stirling, the Group Manager, Employee Services, on behalf of the Council, after a meeting which the Applicant, together with her union representatives, had attended. The letter read as follows:

"Thank you for attending the meeting this week to discuss your skills and experience, and for providing me with further information via the UNISON office. This was very helpful in considering the type of post which would be suitable for you following the decision of the Member's Appeal Panel to transfer you.

I am writing to advise you that it is considered that the post of Administrative Assistant, Scale 4 in the Community Occupational Therapy Service is suitable. A copy of the job description and person specification is attached for your information.

I would be grateful if you could advise me, by Friday 31^st May if you wish to continue employment with the Council under these terms by returning the attached copy of this letter which includes a section you will need to complete. If you refuse to continue to work for the Council under these terms, or you do not respond by the 31^st May you will be considered to have resigned from your employment."

and then the rest of the letter deals with provisions on the basis that the Applicant accepted the decision and continued with employment.

11. The Applicant's letter in response is short and it is dated 31 May 2002 and was apparently hand-delivered on the same day, thus meeting the deadline. It read as follows:

"I refer to your letter of 24^th May. As you know I do not accept that the Council has the right to require me to carry out any job other than the one for which I was employed…

I was prepared to meet with you to explore what was meant by the decision of the Appeal Panel since the situation was not at all clear but I can now see that the decision and the way you are trying to implement it are not acceptable.

I am ready and able to return to work in my old job immediately. I have been ready to return since 25 February 2002, which is the date I would have returned had it not been for the original decision to dismiss me. Please note that I am not resigning."

12. The result was that the Respondent, in the light of that refusal to accept the job offered, treated her as resigning; and it was common ground by the time of the hearing that this amounted to a dismissal or constructive dismissal, but the Respondent justified it, not by reference in the light of the decision of the earlier Tribunal, to which we have referred, to the original dismissal and its reasons, but by reference to the decision of the Appeal Panel which had at that stage concluded that at least two of the three allegations against the Applicant were well-founded.
13. The Tribunal considered in detail the events at the Appeal Panel and the outcome of the Appeal Panel; and it is clear to us, not least because there is no challenge by either side, as we see it, to the central paragraph in the Employment Tribunal's Decision, as follows:

"61 It is not for the Tribunal to determine whether or not the Applicant committed the acts with which she was charged. We have concluded that the Respondent had reasonable grounds for believing that the Applicant was guilty and for the same reasons the Tribunal is satisfied that the decision to prevent her working with vulnerable clients was a decision a reasonable employer providing care to vulnerable people could come to. That decision inevitably involved a transfer."

14. It appears to us clear, as we indicate, not least because of the lack of challenge to it, that that was a finding to which this Tribunal was entitled in law to come. It is not simply, as at one stage Mr Whitehouse, of Counsel, who appeared before us, as he appeared below, for the Applicant, sought to argue, a conclusion by the Tribunal that this was a decision which any reasonable appeal panel could come to. It is quite plainly a conclusion that this was a decision which the Respondent reasonably came to, through its Appeal Panel.
15. The Tribunal continues by looking at various unfairnesses which the Applicant had relied upon in relation to that Appeal Tribunal, and it rejects some of the allegations in paragraph 62. However, in paragraph 63 and the first part of 64 the Tribunal concludes that there were certain unfairnesses in relation to the procedure operated by the Panel. However, it is quite clear to us that the Tribunal concluded, as set out in paragraph 61, which is the lead paragraph in this section, that, notwithstanding the unfairnesses that had occurred in relation to the hearing before the Appeal Panel, the decision it came to was a reasonable one, and that the result of that decision was that a transfer was inevitable. This appeared to us to be the inevitable starting point for the arguments at this appeal, and, after some consideration, neither Mr Whitehouse nor Mr Donovan, who also appeared both here and below, on behalf of the Respondent, contended to the contary.
16. But the consequence of the decision of the Appeal Panel was its putting into effect by the Respondent. Mr Whitehouse criticised the fact that no witness was called from the Appeal Panel before the Tribunal. But it appears to us that that aspect is entirely moot because, notwithstanding the absence of any witness before the Appeal Panel, the Tribunal, in the event unchallenged as we have indicated, came to the conclusion it did about the outcome of the Appeal Panel.
17. However, the witness who was called on behalf of the Respondent was Ms Sterling, who sent the letter, which we have quoted, of 24 May 2002. The Tribunal said the following about the letter and its consequences in paragraph 64:

"It was also unfair for the Respondent to dismiss the Applicant without making further attempts to negotiate a change of position with her and her union. They should not have dismissed her for rejecting their first offer. Such negotiations are envisaged by the Respondent's own procedures in the case of Transfers."

18. It is quite apparent, therefore, that the Tribunal regarded the letter of 24 May, notwithstanding its apparently insistent tone and terms, as what it described as a first offer. The criticism by the Tribunal and the Applicant, which is, in our judgment, an understandable one, was of the stance there taken by the Respondent.
19. However, it is also right to say that the position as indicated by the Applicant in the reply letter of 31 May appears to be equally intransigent, because she is not taking issue with the particular job that is being offered or imposed, but with any job other than the original job or, we suppose, by implication, some other caring job; and it appears to us that the impasse between the two was that the Respondent was, albeit high-handedly, carrying out the decision of the Panel that there should be a transfer to a non-caring job, albeit that it had seemingly non-negotiable deciding of what that job should be, whereas the Applicant was not prepared to comply with the decision of the Appeal Panel, which the Tribunal has now decided was a reasonable one, that she should be transferred to a non-caring job.
20. It is apparent that Mr Donovan made the submission that the intransigence of the Applicant meant that, given the decision of the Appeal Panel, there was no alternative but to dismiss or regard the Applicant as having resigned. The Tribunal reflect that submission, albeit in a form which does not accord with the precise basis of the disciplinary code, in paragraph 34 as follows;

"The decision letter unfortunately referred only to transfer but it was explained in correspondence with the Applicant's solicitor that this might involve relegation if necessary. The Applicant explicitly refused to accept demotion by a letter of 31 May and she suggested no alternative."

21. Mr Whitehouse has told us that his recollection is (although it is not supported by any notes of evidence) that in evidence the Applicant at least suggested that she might have been prepared to accept some different job. That is not reflected in the Decision of the Employment Tribunal; and in any event it would require considerable further exploration, not least to see whether that willingness would have extended to a non-caring job.
22. In his Notice of Appeal Mr Donovan has attacked the Tribunal's decision of unfair dismissal, because it was found by the Tribunal that the potentially fair reason for dismissal related to the conduct of the Applicant rather than, as he submits, being a substantial other reason; namely the refusal to comply with the decision to transfer, pursuant to the Appeal Panel's decision.
23. We did not encourage much argument by Mr Donovan on that point and we did not call on Mr Whitehouse; and so it would not be fair of us to express any view, although it appears to us that it was perfectly appropriate for the Tribunal to conclude that this dismissal related to misconduct in the broad sense. But it did not appear to us that the rightness or wrongness of that characterisation led anywhere.
24. However, what appeared to us to be the central submission of Mr Donovan is reflected in two paragraphs of his Notice of Appeal. Paragraph 9:

"The Tribunal erred in law in failing to consider the likely outcome of a fair procedure, namely a procedure shorn of the defects which it identified at paragraphs 62-65."

and at paragraph 12, in relation to remedy:

"The Tribunal erred in law in failing again, in its assessment of Ms James's loss, to take into account the position that she would have been in had a fair procedure been followed, and in particular whether and when she might inevitably have been dismissed for refusing to accept the appeal panel's decision that she should be transferred to other duties."

Which decision, we add, the Tribunal found to be a reasonable one in paragraph 61, as we have already cited. Those grounds appear to us to be strong and to be his best case. In the end, Mr Donovan really only relied on those points.

25. Mr Whitehouse has pointed out that the Respondent did not, it seems, adduce any evidence of any alternative jobs that might have been available had it fulfilled its obligation, both as is clear from the Tribunal's decision and also from the Code itself, which we have cited, to seek to obtain the Applicant's agreement. He has pointed to a decision in the case of Boulton & Paul Ltd v Arnold [1994] IRLR 532 of the EAT per Knox J, which was a redundancy case in which the one issue that was raised on appeal was whether the Employment Tribunal had erred in failing to raise and consider the question of whether the employee's compensatory award should be reduced to reflect the possibility that she would have been made redundant in any event. The conclusion was that where a dismissal is unfair because the employer had taken positive steps which ought not to have been taken, there was no obligation on an Industrial Tribunal of its own motion to consider and to evaluate the possibility of a reduction in the compensatory award on the ground that a proper dismissal would have occurred in the near future in any event. Knox J pointed out that that would require evidence, which there was not in that case.
26. It appears to us that although that of course is right as a principle it is not applicable in this case for a number of reasons. First of all, it is clear that the point was raised in argument by Mr Donovan by reference to paragraph 34 of the Employment Tribunal's Decision, which we have recited. Secondly, this case can be very substantially distinguished from the case in Boulton, because here there was not simply a unilateral position in which different steps might have been taken by an employer, but that there would need to have been consideration of possible steps taken by both sides here. On the face of it, as we have indicated, there was an impasse, with a unilateral stand by the employer that this was the only job available that they were prepared to offer at any rate; and on the other hand a stance by the Applicant that no job, other than her original job, was acceptable; and consideration would have been required, in our judgment, not only of what other jobs, if any, might have been available of a non-caring kind by the employer, which the employer chose not to adduce. There may not have been any. Alternatively, the reality may have been that the employee would not have accepted any non-caring jobs, which was certainly the position that she took in her letter, and the Tribunal made no findings in that regard.
27. What the Tribunal did find we have already cited, at paragraph 64, that there should have been further attempts to negotiate a change of position with her and her union. By the very fact of suggesting that there could and should have been negotiation of a change of position, in our judgment, it was inevitable that the Tribunal ought to have concluded as to whether there could have been such a change of position in the circumstances, in the light of the 'inevitability', as the Tribunal itself had found, that the Applicant would be transferred willy-nilly, to something that she plainly did not wish, namely a non-caring position.
28. Mr Whitehouse referred us to paragraph 66 of the Decision. This is a paragraph which we shall quote in a moment, and which both sides rely on for various purposes, but which, in our judgment, is not compliant in either respect with the principles of Meek v City of Birmingham District Council [1987] IRLR 250. It is surprising, because the Tribunal dealt so fully with what appeared to it to be the contentious parts of the case; but it is a very short paragraph and it is headed up "Contribution".

"66 The Tribunal did not believe the Applicant should be blamed for failing to accept an unsuitable administrative job and make no deduction from compensation for that reason. However, the Tribunal finds that the Applicant's conduct, which was the primary conduct for her dismissal, made a significant contribution and it would be just and equitable to reduce her compensation by 60% so that she will receive 40% of the compensation to be assessed."

We will turn later in this judgment to that second sentence.

29. So far as the first sentence is concerned, it is relied upon by Mr Whitehouse as showing the answer to what the Tribunal did not include in paragraph 64, where it might have done, i.e. what it would in fact have concluded had it turned its mind to the question, namely what would have occurred if there had been an attempt to negotiate a change of position.
30. It appears to us wholly unclear as to whether it gives any clue to how the Tribunal would have reached its decision, had it asked the relevant question in paragraph 64 as to what would have been the outcome of any negotiation. But, in any event, it is a very short conclusion, even in relation to contribution, and it may well be that the reason for its shortness is because the Tribunal was immediately going on to make a conclusion as to substantial reduction for contribution on a different ground. But there is no addressing by the Tribunal there of the arguments as to whether in its judgment the Applicant would have moved to accept a non-caring job (which on its own findings the Applicant would, inevitably, have had to accept) and if so why. It cannot, in those circumstances, make good the obvious lacuna in paragraph 64 of its decision.
31. We are satisfied that the matter should be remitted to the Tribunal on the issue raised in paragraphs 9 and 12 of the Notice of Appeal, against the background of the judgment which are giving.
32. It is plain that it must be and remain the starting point that the decision of the Appeal Panel was, as found by the Employment Tribunal, notwithstanding its inadequacies, a reasonable one, namely a decision by the Tribunal that the employers were entitled to come to the reasonable belief in the Applicant's guilt as sufficient conduct to justify the imposition of a transfer; and, further, that it was a reasonable and non-impugnable decision by the Respondent to make a transfer order, which inevitably involved a non-caring role.
33. What the Tribunal on remission would need to consider, and it appears to us that it is inevitable that there will be a need for some further evidence in this regard on both sides, would be:

What would have been the result if the employer had not sent the high-handed letter imposing the alternative job, but had rather attempted, as was its obligation pursuant to the disciplinary code, to agree a transfer with the Applicant, but one which would inevitably, in the light of the decision of the Appeal Panel, mean a transfer to a non-caring job? Would there have been a job which, in those circumstances, the Applicant would have accepted; or would she either have insisted on retaining her original job or nothing, or would she have accepted some other job which was inevitably non-caring?

34. That is a decision which the Tribunal should feel free to come to, which may lead to one of three possible results. One is that the dismissal was fair, notwithstanding the inadequacies of the procedure in relation to the sending of the letter, and the failure to negotiate an agreement. Two is that, although the dismissal was unfair no loss was suffered, because the result would inevitably have been the same. Three may mean a finding of contribution by the Applicant, after reconsideration by the Tribunal of its conclusion in paragraph 66 by reference to section 123 (6) of the Employment Rights Act 1996, which reads:

"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."

35. On the remission, we are also satisfied that the conclusion of the Tribunal in the second sentence of paragraph 66 must also be reconsidered, on the basis it is ill-founded in law.
36. The Tribunal, as we have indicated, was not permitted by the earlier decision to consider the reasons for the original dismissal, for the purpose of deciding whether that dismissal was fair or not. We have referred to paragraph 3 of the Decision of the November Tribunal. Equally, for the purposes of deciding whether this dismissal, the one that arose out of the decision of the Appeal Panel, was fair or unfair, the Tribunal did not need to consider whether the original conduct of the Applicant was proved, unless of course it was invited to do so and chose to do so. But that would impose a far higher burden on the Respondent than was necessary, because of course it is well established within British Home Stores v Burchell [1980] ICR 303 and other cases that the question is whether the employers had a reasonable belief in the Applicant's guilt. Plainly if the Applicant was obviously guilty and the Tribunal was prepared to say so that would found such a reasonable belief; but a reasonable belief can be established without the need for the proof of the original misconduct.
37. That is the course which properly and inevitably this Tribunal took in this case. In paragraph 61, which we have quoted, the Tribunal began by saying that it was not for the Tribunal to determine whether or not the Applicant committed the acts with which she was charged: and the Tribunal did not, and rightly so, reach that conclusion. What it decided in the balance of paragraph 61 was that the Respondent had reasonable grounds for believing that the Applicant was guilty.
38. In order for there to be a finding of contributory fault, and hence a reduction within section 123 (6), the Tribunal must find that the dismissal was to any extent caused or contributed to by any action of the complainant. That is quite plainly a different question to the question as to whether the employer had a reasonable belief in the conduct of the Applicant.
39. Mr Donovan, in opposition to Mr Whitehouse's cross-appeal in this regard, submits that that imposes what he calls a different forensic standard to the two questions. We do not agree. It is plain that the same forensic standard, if the onus of proof is being referred to, is applied in both regards. But the questions are quite different. In the one case, relating to British Home Stores v Burchell, and the proof of fairness in the dismissal, it is not necessary for the Tribunal to come to a conclusion as to whether an Applicant did misconduct himself or herself. A reasonable belief is all that is necessary, though of course exploration of the conduct will be required. But for the purpose of contributory fault under section 123 (6) of the Act it is necessary for a Tribunal, on the balance of probabilities, to reach a decision as to an action or actions of the Applicant, before it can reduce the compensation.
40. It is quite plain that this does not mean in the ordinary case that the original allegations have to be proved when they might not otherwise need to be. There will be cases in which the original actions are not in dispute; but it is what is to be read out of the actions which could lead to the dismissal. For example, as has been put in the course of argument during the hearing, if an employee has thrown a spanner across the room, narrowly missing another employee, and the employer dismisses the Applicant because he concluded that the Applicant had deliberately thrown it and the Tribunal concludes either that the act was not deliberate, or that in some way the procedure was flawed such that the dismissal should, notwithstanding the facts, be found to be unfair: nevertheless the Tribunal could, in the light of the admitted facts conclude that the employee's action, even if not deliberate, was something that should require a deduction by way of contribution. Equally, in relation, for example, to an allegation of theft, where it is not necessary or appropriate in most cases for the establishing of the reasonable belief of the employer to prove the conduct of the Applicant, it is possible for the Tribunal to isolate actions which lead to a contribution which are not the original actions, which were said by the employer to amount to the misconduct believed in, but, for example, actions which caused suspicion to fall on the employee, or which led to an investigation which might never have occurred if only the employee had spoken out or done something different at the time. But an action or actions of the Applicant must be identified, and proved, to establish contributory fault.
41. In this case, from paragraph 66 (which we have read), it is tolerably plain that, as indeed Mr Donovan accepted, the conduct which is being referred to by the Tribunal as justifying the 60% reduction is the conduct about which, both in the light of the Tribunal's own statement at paragraph 61, and by virtue of the earlier direction by the November Tribunal, it did not make findings; that is, the conduct set out in paragraph 51 of the Decision which was successfully relied upon for reasonable belief by the Respondent.
42. It was of course possible, notwithstanding the original direction of the November Tribunal that the original conduct should not be investigated for the purpose of deciding whether the original dismissal was unfair, for all those matters to have been explored, perhaps at the instance of the Respondent, for the purpose, as a fallback, of examining the question of contributory fault. But it did not occur. It was equally possible, as we have indicated, for some other action of the Applicant to have been highlighted and relied upon, notwithstanding a decision by the Tribunal that it would not make findings as to the original allegations.
43. But in our judgment it is quite plain that section 123 (6) is not satisfied by reference to a finding simply that an employer had reasonable belief in the conduct. The conduct which is to form the basis of a deduction for contributory fault, whatever it is, must be established, proved and identified by the Tribunal.
44. In those circumstances, on the remission of this case to the Tribunal, the question of contributory fault will be at large. It may be that the Respondent will seek to decide to run on a renewed hearing the original conduct in order to establish contributory fault for the purposes of section 123 (6) although I rather suspect that it will not. But it may be that it will seek to identify some other conduct over and above the alleged intransigence of the Applicant in relation to the response to the letter of 24 May; and if it does it must identify such action or actions very speedily so that the rehearing can take place in a sensible form and with as little further oral evidence as possible.
45. We therefore have suggested, and both parties have agreed, that it is a proper course that the Respondent serve on the Applicant within (we suggest) 21 days particulars of any action (s) of the Applicant upon which the Respondent will seek to rely by way of contributory fault within section 123 (6) of the Act on the rehearing, and of course lodge those particulars with the Employment Tribunal.
46. In those circumstances, and to this extent, both the appeal and the cross-appeal on liability are allowed. The remedies hearing falls away in those circumstances, and there is no need for us to make any separate finding in that regard. However, we indicate that, plainly, if the matter comes to be reconsidered in the light of any decision by the Tribunal – and it may not do if the Tribunal either finds fair dismissal or no loss – then, in the light of the Tribunal's own conclusion at paragraph 61 that transfer to a non-caring post was a proper decision by the Respondent, it appears to us inevitable, for the purpose of consideration of one of the arguments of mitigation that was run at the remedies hearing, that if the Applicant had asked for a reference, which she did not, any reference would inevitably have included reference to that reasonable decision, as found by the Tribunal; and if that has, as we suspect it would have, impact on the arguments of loss and mitigation, then in our judgment it would inevitably fall to be taken into account.