Appeal No. UKEAT/0411/06/DM

 EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 25 October 2006

Before
HIS HONOUR JUDGE McMULLEN QC
MS J L P DRAKE CBE
MR D G SMITH

MR N AFZAL	APPELLANT

EUROPACKAGING LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MISS A MORGAN
(of Counsel)
Messrs Thompsons Solicitors
The McLaren Building
35 Dale End
Birmingham
B4 7LF	
For the Respondent	Written submissions	

SUMMARY
Unfair Dismissal – Automatically unfair reasons
Trade Union Rights - Dismissal
The Claimant was dismissed when his employer took the view that he had fraudulently produced documents to excuse his prolonged absence in Pakistan. The Claimant was an FOC who contended his dismissal was on account of his trade union activities. The Tribunal found that the dismissal was automatically unfair as step one of the statutory procedure had not been followed. Although not necessary for its Judgment, it went on to decide that the reason for dismissal was conduct and not trade union activities and that the dismissal was unfair. But the Tribunal found that it was impossible for the Claimant on account of his trade union activities to receive a fair hearing. The Tribunal’s finding on the reason for dismissal was reversed since it was the logical conclusion that the reason for dismissal was trade union activities. 

HIS HONOUR JUDGE McMULLEN QC

1.	This case is about unfair dismissal for trade union activities. The Judgment represents the views of all three members. We will refer to the parties as Claimant and Respondent.

Introduction

2.	It is an appeal by the Claimant in those proceedings against a Reserved Judgment of an Employment Tribunal sitting over four days and a day in chambers in Birmingham, Chairman Ms H A Harding, registered with reasons on 24 May 2006. The Claimant was represented there and here by Miss Adrienne Morgan of Counsel. The Respondent was represented there by a consultant. Today it has not appeared, but its consultant has made written submissions. 

The issue

3.	The issue as defined by the Employment Tribunal and as now relevant on appeal is solely the reason for the Claimant’s dismissal, for it summarised the position as follows: 
“1.1 It was agreed that the respondent had dismissed Mr Afzal. The reason for his dismissal was in dispute. Mr Afzal’s case was that the principal reason for his dismissal was that he had taken part in the activities of an independent trade union, namely the GPMU. The respondent’s case was that Mr Afzal was dismissed for conduct.”

4.	The Tribunal decided that the Respondent had not complied with the statutory dismissal and disciplinary procedures, and that the dismissal was unfair automatically. It was thus not strictly necessary for it to decide, if it were wrong about that, whether the dismissal was unfair on ordinary principles. It held that it was, but it rejected the contention that the Claimant was dismissed for his trade union activities. 

5.	The Claimant appeals against that aspect of the Judgment and the Respondent does not appeal any part of it. Directions sending this appeal to a full hearing were given in Chambers by Bean J. The utility of the appeal lies in the more generous compensation regime applicable to a dismissal found unfair because of union activities.

The legislation

6.	The relevant provisions of the legislation in respect of the remaining part of the appeal are as follow. Section 152 of TULCRA 1992 states, so far as is relevant,: 
“152
“(1) For purposes of [Part X of the Employment Rights Act 1996] (unfair dismissal) the dismissal of an employee shall be regarded as unfair if the reason for it (or if more than one, the principal reason) was that the employee – 
(b) had taken part, or proposed to take part, in the activities of an independent trade union at an appropriate time.”
Section 98 (of the Employment Rights Act 1998 states:
“(1) In determining for the purposes of this Part, whether the dismissal of an employee is fair or unfair, it is for the employer to show – 
(a) the reason (or, if more than one, the principal reason) for the dismissal”
(2) A reason falls within this subsection if it – 
(b) relates to the conduct of the employee.”

7.	The Tribunal directed itself by reference to those provisions and what we hold to be the leading authorities, which it summarised as follow: 
“10. The case of Abernethv v Mott Hay and Anderson 119741 IRLR 213 (CA) reminds us that a reason for a dismissal is a set of facts known to the employer, or at least held by it, which causes it to dismiss the employee.
11. Identification of the reason for the dismissal calls for an examination of the decision making in the mind of the dismissing officer. The burden of proving the reason for dismissal is on the respondent. In this case the question that we have to ask ourselves is was what was the operative reason for the dismissal? In order for Mr Afzal’s case of dismissal for an automatically unfair reason to succeed we must be satisfied that union grounds (as defined) constitute the main or the predominant reason for the dismissal. It is insufficient that Mr Afzal’s trade union activities might be a subsidiary reason for the dismissal, although this would be relevant to our considerations under section 98 (4) of the Employment Rights Act. As this a case where Mr Afzal asserts that his dismissal was for an automatically unfair reason it is for Mr Afzal to show, without needing to prove, that there is evidence which may be capable of establishing the automatically unfair reason. The burden then remains with the respondent to show, on the balance of probabilities, which of the competing reasons was the reason for dismissal.”

The facts

8.	The Tribunal summarised the facts in this way: 
“6.1	Mr Afzal was employed by the respondent from 28 September 1998 until 21 April 2005, this being his effective date of termination. He was employed by the respondent as a machine, operator.
6.2	The respondent, principally, manufactures paper bags. They supply bags to a number of well known customers such as Gregg’s the Bakers. They also manufacture a small number of carrier bags for customers such as Tesco’s.
6.3	- The respondent employs in total approximately 1,500 people based both in the UK and abroad. The respondent has a presence in Malaysia, Dubai, the USA and Turkey.
6.4	In the UK the respondent employs approximately 500 people. These people are based across sites in London, Newcastle-upon-Tyne and Binningham.
6.7	The respondent is well resourced. Its turnover is approximately one hundred million pounds per annum in the UK.
6.8	The respondent’s chairman is Mr Afzal Majid. Mr Afzal Majid’s son, Mr Shabir Majid, also works in the business. For clarity we shall refer to Mr Afzal Majid as Mr Majid and his son as Mr Shabir Majid.”

9.	From September 2003 a campaign of trade union organisation was conducted by the GPMU, now known as Amicus. It was met with great hostility. A ballot for industrial action was conducted. There was industrial action. On 1 June 2004 the Respondent signed an agreement recognising GPMU for the purposes of collective bargaining. Nevertheless, in the following weeks Mr Majid made clear to the Claimant that he was angry with him by comments made directly to him. Similarly, adverse comments were made by another manager Mr Kitchen.. 

10.	The Respondent has a policy of allowing its employees, many of whom are from the Indian Sub-Continent, to take periods of extended leave to visit relatives. But at this time it was taking measures to tighten up the practice, since there had been further consideration of it. The Claimant travelled to Pakistan and on three occasions when the time had come and gone for his return to work documents were faxed from Pakistan giving an excuse for the Claimant’s non-attendance, based upon, principally, his mother’s medical condition. The Respondent suspected these documents were fraudulently produced and carried out a number of investigations. 

11.	In due course, when the Claimant was back in England, criticisms put to him, but none of them included the evidence upon which the Respondent based its opinion. In due course he was dismissed. 

12.	The Tribunal found that the requirements of the statutory dismissal procedure had not been followed and thus the dismissal was automatically unfair under Employment Rights Act 1996 s98A. It went on to consider, should it be wrong about that and for the avoidance of doubt, the reason for dismissal. As to this it said the following: 
“21. What was the reason for Mr Afzal’s dismissal and if there was more than one reason what was the principal reason? We are satisfied on the balance of probabilities that the principal reason for Mr Afzal’s dismissal was the respondent’s view that Mr Afzal was absent from work without permission having submitted what the respondent had concluded were fraudulent medical documents to support his application for extended leave. This is capable of amounting to a potentially fair reason, namely conduct. It follows that we are satisfied on the balance of probabilities that Mr Afzal’s trade union activities were not the principle reason for his dismissal. In reaching this conclusion we have taken into account the fact that a disciplinary investigation was only started into Mr Afzal’s conduct when he failed to return to work on the date agreed between him and his employer for his return. Despite a year of fraught relations between the respondent, the union and Mr Afzal, which perhaps reached its height during the all-out strike in May, there was no evidence to suggest that the respondent had tried to exit Mr Afzal from the company at an earlier point in time. The catalyst for his dismissal and the set of facts in the respondent’s mind that; principally, caused them to dismiss was the respondent’s belief that Mr Afzal had submitted fraudulent documents to support his annual leave request.”

13.	The Tribunal then considered what would normally be the components in a misconduct dismissal along the lines of British Home Stores Ltd v Burchell [1978] IRLR 379 and said, in summary, the following: 
“22. Did the respondent have a genuine belief that Mr Afzal had mis-conducted himself? We are satisfied that they did. Did the respondent have reasonable grounds for that belief? Judged by the objective standards of the reasonable employer we are satisfied that the answer to this is no. We reach this conclusion on the basis that the investigation carried out by the respondent was so fundamentally flawed that no employer, acting reasonably, would have relied on the evidence produced by the investigation to make a decision to dismiss.”

14.	In coming to that conclusion the Tribunal relied upon very cogent evidence and conclusions which indicated that the Claimant would have been treated unfairly, for it summarised its position as follows: 
“23.5. … We are satisfied based on our findings of fact that Mr Majid and Shabir Majid would not have had an objective and open minded attitude towards Mr Afzal and judged by the objective standards of the reasonable employer their involvement taints the objectivity and fairness of the entire disciplinary case.
23.6 The impact of Mr Afzal’s trade union activities. Whilst we are satisfied that Mr Afzal’s trade union activities did not constitute the principle reason for dismissal, we are satisfied that Mr Afzal’s position as a trade union activist made it impossible for him to receive fair and open minded treatment during the course of the disciplinary case. We draw this inference not only from the attitude of the respondent towards the union but also from the perfunctory and limited investigation that the respondent carried out into Mr Afzal’s suggestion during the disciplinary case that his trade union activities might influence the outcome of events. Mr Spencer’s investigation of this suggestion comprised only a very brief telephone conversation with Mr Majid that was captured in a note which was no more than seven lines long. The note demonstrates that Mr Spencer did not carry out an investigation of any depth into Mr Majid’s attitude towards Mr Afzal. Mr Spencer made no further investigations of this issue. At appeal stage no direct investigations of the issue were carried out at all by Mr Akbar despite information having been provided to the respondent by Mr Afzal about various incidents which he described as victimisation. Mr Akbar concluded that there was no evidence to substantiate Mr Afzal’s claims, but this conclusion was based purely on a conversation that Mr Akbar had with Mr Spencer. He spoke to no one else. The inference that can be drawn from this rather perfunctory investigation is that Mr Afzal’s trade union activities did have an adverse impact on his disciplinary case. Judged by the objective standards of the reasonable employer we are satisfied that it is outside the range of reasonable responses for such a factor to have a bearing on the outcome of the disciplinary matter.”

15.	The Tirbunal then, told an abundance of caution, decided that the Respondent could not rely upon section 98A(2) and indicated that it would then hold a remedy hearing.

The submissions

16.	The Claimant submitted the Employment Tribunal had erred in law in that it failed to give adequate reasons for its Judgment. It failed to examine the principal reason for the dismissal and the causal connection between the set of facts found by it and the dismissal; the Judgment was perverse. It was clear, submitted Miss Morgan, that the Claimant was going to be dismissed. There was a direct connection to the Claimant’s trade union activities. It was this set of beliefs which caused the dismissal by the Respondent. The Tribunal had failed to recall its earlier findings when making the conclusion which it did. Alternatively the Judgment was perverse since there was an overwhelming case that it had got the decision wrong; the reasoning was flimsy. The Claimant’s dismissal was the direct result of management’s hostility towards his trade union activities. It was implicit that he would be dismissed from the start of the disciplinary proceeding and that the connection and real cause of the dismissal was therefore the trade union activities. 

17.	In its written submissions, the Respondent cleaved to the reasons given by the Tribunal and rejected the contention that they were inadequate. As for the Abernethy v Mott Hay and Anderson [1974] IRLR 213 point, that is the set of facts and beliefs held by the employer, the Tribunal had made adequate findings and there was no reason to conclude that the Judgment was perverse. 

The legal principles 

18.	The legal principles in this case are simple. The bar is raised high against an Appellant which seeks to challenge the Judgment of a Tribunal on the grounds of perversity: see Yeboah v Crofton [2002] IRLR 700 CA. A Tribunal must give reasons for its Judgment which are adequate to inform the parties of why they have won and lost. A finding as to a reason for dismissal is one of fact and is based upon a determination as to what the set of facts and beliefs of an employer was at the time the dismissal was effected: see Abernethy.

Conclusions

19.	We uphold the submissions of the Claimant and will allow the appeal. In our experience this case presents many unique features and we have not found the solution easy. It is not now disputed that the Claimant was engaged very properly in trade union activities within the meaning of the 1992 Act. It is not disputed that he was unfairly dismissed for a range of reasons, including an imperfect investigation and the impenetrability of closed minds of the relevant managers. The finding that the Respondent failed to follow the statutory disputes procedures is not challenged, and so the dismissal was automatically unfair, which has consequences in relation to compensation. 

20.	There are very strong findings against the Respondent and its attitude towards trade union organisation in its plant, and this trade union officer in particular, the Claimant being an FOC of the GPMU. The allegation against the Claimant that he submitted fraudulent documents to explain his absence in Pakistan has not been proved for there has not been a remedy hearing when issues such as contribution may well affect such a Judgment. All three of us understand that any workplace case of dishonesty must be carefully investigated and put squarely to an employee charged with it. Being a trade union officer is not defence to a charge properly made and reasonably believed to be true. The Tribunal conducted a very careful examination of the evidence and the submissions over five days. We reject the contention that its reasons are inadequate and that it failed to give an explanation for the connection between the Claimant’s trade union activity and his dismissal. Similarly, Miss Morgan’s submissions do not cross the threshold to establish a successful claim of perversity

21.	. There is no overwhelming case that the Tribunal was wrong on the facts. However, we hold that the Tribunal erred in law in its depiction of the reason for dismissal. True it is, the finding as to a reason for dismissal is pre-eminently one of fact for the Employment Tribunal to make. This Tribunal was assiduous to let the parties know its reasoning lest it be wrong on its primary finding that the dismissal was automatically unfair. 

22.	With respect, we consider it erred in failing to apply the logic of its conclusion that the Claimant could not possibly have had a fair hearing by this employer. Because of his trade union activities it would be impossible for him to defend any allegation, for his employers had a closed mind arising out of their attitude to those activities. The logical conclusion of this finding by the Tribunal is that he was dismissed because of his trade union activities. Once the disciplinary charge was made it was impossible for him to defend himself. It is implicit in the Tribunal’s finding that an employer with an open mind, conducting a reasonable investigation into a genuine belief of wrong-doing, would not have rendered it impossible for its employee to have a fair hearing. The sole difference between the two cases on this hypothesis is the trade union activities of the Claimant. 

23.	We accept that the Tribunal has made firm findings as to the reason for dismissal and this, as a matter of legal analysis, relates to the first stage under section 98, i.e. the employee’s duty to put forward and prove the reason for dismissal. It would be unusual for a Tribunal to find the reason for dismissal, for the purposes of section 98(1) and (2), and then to go back and reconsider it during its reflection on fairness under section 98(4). If, in a misconduct case, the manager’s mind was closed and insufficient investigation was conducted because the manager was under pressure of time and had other things on his mind, that would not affect the finding on section 98(1). But if the reason for the manager being blind to entreaty and failing to conduct a proper investigation was because he had a fixed attitude to the employee on the grounds of his having made a protected disclosure, or making a complaint relating to safety, it is logical to say that the reason for the dismissal was whistleblowing or raising safety issue. A finding that the procedure and the dismissal were unfair by reason of the relevant manager’s closed mind is another example. 

24.	 In the remaining parts of the Tribunal’s Judgment, which deal with fairness, it is we think legitimate to find matters which reflect upon the reason for dismissal. After all, the question of fairness is determined, among other things, “having regard to the reason shown by the employer”. The Tribunal plainly intended to show what impact the Claimant’s trade union activities had on these disciplinary proceedings and his dismissal. Once it had made condign criticism of the Respondent’s conduct of the proceedings and connected it to the Claimant’s trade union activities by the findings of the Respondent’s anti-trade union attitude, and in particular its hostility to the Claimant himself as a union officer, the only logical conclusion is that the principal reason for his dismissal was his trade union activities. 

25.	Having found an error of law, Miss Morgan invites us to substitute our view for the Tribunal’s. Since this is a matter of logic and law, we do not see it necessary to remit the matter to the Employment Tribunal and we will male the finding that the Claimant was unfairly dismissed for trade union activities contrary to section 152 of the 1992 Act. 

26.	The Tribunal adjourned the question of remedy. We have had no submissions from the Respondent as to whether it is appropriate to return it to this Tribunal. Miss Morgan submits we should. Now, with the direction we have given, it is entirely appropriate that it should stay with this Tribunal, since the vast majority of the Tribunal’s Judgment has not been challenged by either party. It will now consider issues on remedy, and these are likely to include contribution and the factors we have been told that there has been a substantial reduction in its workforce at that plant. We would very much like to thank Miss Morgan for her helpful submissions. This appeal is allowed.