British Telecommunications Plc v Daniels (Unfair Dismissal : Reasonableness of dismissal) [2012] UKEAT 0554_11

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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> British Telecommunications Plc v Daniels (Unfair Dismissal : Reasonableness of dismissal) [2012] UKEAT 0554_11_1604 (16 April 2012) URL: http://www.bailii.org/uk/cases/UKEAT/2012/0554_11_1604.html Cite as: [2012] UKEAT 554_11_1604, [2012] UKEAT 0554_11_1604

Appeal No. UKEAT/0554/11/MAA

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 16 April 2012

Before

HIS HONOUR JUDGE McMULLEN QC

MR B R GIBBS

DR B V FITZGERALD MBE LLD FRSA

BRITISH TELECOMMUNICATIONS PLC APPELLANT

MR L J DANIELS RESPONDENT

Transcript of Proceedings

JUDGMENT

SUMMARY

UNFAIR DISMISSAL – Reasonableness of dismissal

The Employment Tribunal upheld the employer’s case on BHS v Burchell (despite wrongly imposing the burden of proof on it) but found the gross misconduct dismissal unfair under Iceland for this global employer did not take up the claim that, as the Claimant had a history of mental illness, occupational health advice be sought. Applying Fuller, Bowater and Arriva the appeal was dismissed.

HIS HONOUR JUDGE McMULLEN QC

1. This case is about unfair dismissal. This is the Judgment of the court to which all parties appointed by statute for their diverse specialist experience have contributed. We will refer to the parties as the Claimant and the Respondent.

2. At the very outset it is necessary to make two short points. The first is that there is a howling error in the self‑direction of the Employment Tribunal that reflects the position in the law 32 years ago, of which this experienced Employment Tribunal seems to have lost sight, for in a misconduct case of unfair dismissal the Tribunal directed itself as follows:

“It is for the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further.”

3. That is a citation from British Home Stores v Burchell [1980] ICR 303, a Judgment of the EAT. No sooner was the ink dry on the publication of that ICR in the middle of 1980 than the provision had been repealed by the Employment Act 1980. While correct as to the onus of proof in respect of showing a reason for dismissal, all who cite it without reflection are in error by imposing a burden upon the employer in respect of reasonable grounds and investigation. This position obtained as a matter of law for only two years – 1978 to 1980. Much assistance is given to Employment Judges in helping them avoid obvious pitfalls, and the pitfall is not to say when applying the otherwise wise words in Burchell that the burden of proof has changed. It is probable that this was pointed out to Employment Judges before Post Office Counters Ltd v Heavey [1990] ICR 1, but at least for the last 22 years it has been regularly pointed out by Judges of this court how erroneous Burchell, unalloyed, is. Fortunately, in this case Mr Pirani takes no point, because he recognises that elsewhere in the Judgment the Employment Tribunal did not require the Respondent to prove those elements. Ms Anna Macey, giving her services to the Claimant on behalf of the Free Representation Unit, recognises the error, but we think they are both sensible not to advance the matter further. Nevertheless, it is a distraction to see such an error and it takes up unnecessary time to deal with.

4. The second, which is advanced firmly and with care by Ms Macey, is this. She submits, after a careful review of recent Court of Appeal authorities:

“34. The EAT is respectfully reminded that it is the role of the ET to examine all the evidence and make a finding as to whether a dismissal was fair or unfair. This ET did that and reached a unanimous decision, producing an extensive judgment with lengthy reasons justifying their findings.

35. The facts of this case are complex, but after considering all the evidence the ET were entitled to find that a reasonable employer, faced with misconduct by a long standing employee with very significant mental health problems of which they had been informed of [sic], would have commissioned a full occupational health report before dismissing the Claimant. Their failure to do so renders this dismissal unfair.”

5. We, of course, will treat each case on its merits and are unaffected by the fact that there are strong facts to be determined by an Employment Tribunal. The clear direction of the authorities that Ms Macey puts in front of us is that cases of misconduct are notoriously difficult to determine and require very difficult decisions to be made by Employment Tribunals that must be preceded by clear findings of fact and a simple, correct direction on the law. Once that has happened, it will be rare indeed for a court on appeal to overturn it (see my Judgment on behalf of the EAT in London Metropolitan University v Storfer UKEAT/0073/11).

Introduction

6. It is an appeal by the Respondent in those proceedings against a Judgment of an Employment Tribunal sitting over a day, and then a day in deliberations, at Bury St Edmunds under the chairmanship of Employment Judge Pritchard‑Witts, sent to the parties on 18 July 2011. The Claimant represented himself, and the Respondent, having hitherto been represented by solicitors, has instructed Mr Rohan Pirani of counsel. The Claimant claimed unfair dismissal; the Respondent contended it dismissed the Claimant fairly for gross misconduct having carried out the appropriate procedural steps. The Employment Tribunal decided in the Claimant’s favour and upheld his claim. At a remedy hearing the Claimant was awarded £21,425.92, pursuant to a Judgment sent to the parties on 12 March 2012. That figure was after of a 65 per cent reduction to take account of the Claimant’s contributory conduct under sections 122 and 123 of the Employment Rights Act 1996. There is no appeal from that. The sole issue is the Respondent’s appeal in respect of the adverse finding on unfair dismissal. Directions sending this appeal to a full hearing were given by HHJ Peter Clark.

The legislation

7. The relevant legislation is not in dispute and is cited in full by the Employment Tribunal, as we do: section 98(1) Employment Rights Act 1996 says

“(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, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it— […]

(b) relates to the conduct of the employee. […]

(4) Where the employer has fulfilled the requirements of subsection (1), 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 a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case.”

8. The Tribunal directed itself, as we have said, erroneously in relation to the burden of proof but otherwise correctly on Burchell. It then said this:

“8. The Respondent reminded the Tribunal that it should not substitute its own view but only consider the objective standards of a reasonable employer. That is a matter which we have constantly reminded ourselves about in the course of our discussions and the Judgment.”

9. That is the primary point in this case, for it is contended that, notwithstanding that self‑direction, the Tribunal was in a mindset so as not to take a responsible and reasonable objective view but to put itself in the shoes of the employer, which is what it should not do.

The facts

10. The Respondent is in the business of telecommunications and employs 100,000 people in Great Britain. The Claimant was employed as a customer service engineer commencing on 28 November 2002.

11. Relations between the Claimant and his manager, Mr Easy, became strained, there was a history of ill‑will between them, and the Claimant became affected by depression and stress. In due course the Claimant was referred to his GP, Dr Willis, who treated him for a history of stress‑related problems. It is important to record the GP’s opinion given on 8 October 2010, which is this:

“…Lawrence has a long history of stress related problems going back as far as summer 2006 when he was involved in a fracas at a local pub and was badly beaten by several other men. There were very significant problems in resolving the legalities from that dispute, which took a considerable toll on him resulting in him having to take antidepressants and Diazepam to calm his severe anxiety state. My records show that he experienced stress at work during this period which I understand has recrudesced.

Lawrence’s problems snowballed in late 2007 when he ran into financial difficulty combined with work related and family pressures. He is unwell enough to warrant referral to our community psychiatric link worker, who identified some features of paranoid personality disorder with mood swings ranging from low and hopeless to almost hypomanic. He did not however fit the criteria for depression or cyclothymic mood criteria. She worked with him to try and help him let go of his grudges and put some work into his understanding his anger response. There seems to have been some satisfactory resolution in his overall state of mind by April 2008.

Lawrence presented again in September feeling very harassed and stressed. There was no suicidal ideation or evidence of a formal depressive state but his anxiety levels were such that I again prescribed him Diazepam as an anxiolytic.

Bearing in mind the characterological problems that Lawrence has and the way he reacts to stress, there is no doubt at all that his impending disciplinary procedure is likely to cause significant destabilisation.

I hope this can be taken into consideration by the relevant authorities who may wish to commission an occupational health report prior to proceeding further. …”

12. This is a reflection on the charges made against the Claimant, of which there were six. Three, however, were dropped by the manager, Mr Lipscombe, who investigated the charges against him. The manager above Mr Lipscombe who heard the Claimant’s appeal and dismissed it was Mr Gay. He had replaced Mr Easy as the relevant manager to hear the appeal against Mr Lipscombe’s decision, and he formed the view that it was correct for Mr Lipscombe to have dropped three charges, for he accepted that the Claimant’s irrational behaviour was caused by confusion about his stress‑related illness. So it was that three charges were upheld against him, and in respect of which he was dismissed; they are as follow:

“1. REPEATED UNAUTHORISED USE OF YOUR COMPANY VEHICLE, when you used your Openreach vehicle on numerous occasions for unauthorised journeys.

2. MISUSE OF COMPANY FUEL CARD.

3. ABUSE OF STORES ORDERING PROCESS, in that you have repeatedly ordered excessive stores items for which you had no work requirement.”

13. This was held to be gross misconduct. The principal period during which the offences occurred was April to July 2010. On appeal, Mr Gay considered the material before Mr Lipscombe and he himself formed the view that the offences were made out. The Claimant was represented by different union officers at the disciplinary and appeal hearings. We have been taken in detail to the proceedings and to the decision letters that issued following those hearings. It is plain that the union officers were making a case for the Claimant’s special treatment – as they put it, mitigation – in respect of a history of depression and stress‑related illness, and the drug diazepam, which he had been taking. The latter is found by the Tribunal to be a red herring, because although the Claimant, as can be seen from Dr Willis’ letter, had had that drug at least until 2008, matters seemed to have been resolved satisfactorily, and one assumes there was no re‑prescription until September 2010. So the Claimant was not taking the drug at the time, and this can be dismissed.

14. However, the second part was contentions by the union officers that there should be no dismissal of the Claimant while there were still issues relating to his mental health, and that could not be resolved until occupational health had made a decision.

15. The Tribunal went through the three stages in Burchell, and it is not disputed that the Respondent passed the test. The Tribunal found as follows:

“96. Mr Lipscomb [sic] did genuinely believe the Claimant was guilty of misconduct. The belief was based on reasonable grounds following a reasonable investigation. The facts of the allegations were established and the explanations were not consistent with the facts. However, there was sufficient material before Mr Lipscomb to put him on notice that all was not well nor what it seemed as far as the mitigation situation was concerned. Mr Lipscomb had already been misled in our view by HR stating to him that because of the satisfactory resolution in Mr Daniels’ state of mind by April 2008 he need not look any further. He was further misled by the issue concerning Diazepam. What does operate in our view to taint the dismissal decision with unfairness is the failure to act upon Dr Willis’ final paragraph which was the need to commission an Occupational Health report prior to proceeding further. This of course would not taint a dismissal which related to a small organisation. However, with BT we are dealing with a substantial global concern with substantial facilities and resources at its disposal. In a case of this nature, given the information provided from Mr Willis and from the trade union representative, the Tribunal would have expected a reasonable employer in this position to have certainly written to Occupational Health asking for a full report prior to proceeding any further.”

16. As Mr Pirani correctly says, the first two sentences discharge the burden it had initially imposed on the Respondent, of proving a reason and of the other two tests. The question is whether a reasonable employer would have dismissed the Claimant in all the circumstances. This is the approach to be taken following Iceland Frozen Foods Ltd v Jones [1983] ICR 17.

17. The Tribunal’s conclusion on all other matters appears to be in favour of the Respondent. The outcome was that there had been insufficient attention to the medical history before dismissal. After the claim form was presented to the Tribunal, Dr Willis gave a further opinion:

“I have been asked to provide formal medical confirmation that this gentleman has no history of psychological, emotional or social adjustment problems prior to 2004. His medical records are completely unremarkable up until September 2004 when he was first seen in this surgery by my colleague, Dr Bamber, at that stage he presented with the first of many stress related issues attributable to difficulties in the work place.

In July 2004 Mr Daniels suffered a fracture to his right middle metacarpal bone which necessitated him being off work through to the 10^th September 2004. It is recorded that he had this inordinate amount of time off because his manager at work was insistent that there were no light duties available for him to do.

Over the last 6 or 7 years Mr Daniels has repeatedly suffered from tension, anxiety, anger, relationship difficulties and inability to take his focus off matters that he perceived to be unfair and damaging to his reputation. He has been highly sensitised by his employment difficulties which may well have exacerbated characterological traits that can be characterised as paranoid personality disorder. This has driven him to even considering suicide by thankfully he has an absolute focus on his family and has resisted the temptation.

There can be no doubt that the conflicts of the last several years have damaged Mr Daniels personality. He is keen for it to be understood that he was perfectly ok before all these troubles started. I can vouch for that, but am not in a position to attribute blame to either party.

I hope this information is useful.”

18. What is unusual about this letter is that it was not available to the management at the time, but it was put before the Employment Tribunal as an indication of what further opinion might have reflected had it been taken, and it is referred to by the Tribunal (see paragraph 18). It was an open opinion addressed “To whom it may concern”, the earlier one being sent to the trade union representative. No objection is taken to the Tribunal having considered this letter in the first place or to its being exigible before us.

19. The Tribunal, having addressed the three parts of Burchell – see, further, paragraph 89 – went on to deal with what it called mitigation, and found this:

“We come now to mitigation. Essentially the case against Mr Daniels is that he behaved in a dishonest manner. He has used his vehicle, fuel card and ordering procedures for his own ends effectively. He has basically been shopping at BT’s expense. It is clear from the evidence of Mr Lipscomb that he regarded Mr Daniels as acting dishonestly. This view was clearly subscribed to by Mr Gay when he upheld the decision to dismiss. Accordingly, there were always two elements for the Respondent to consider if it was to act as a reasonable employer. First of all, had the actions actually occurred: there was no doubt that as a result of their reasonably comprehensive and thorough investigation the actions had occurred. The second issue, however, is whether or not there was an explanation for the actions. The medication that Mr Daniels was taking in September was effectively something of a red herring, we find. What the Respondent has not done to any significant degree as a reasonable employer is to look at the motivation behind the commission of these somewhat strange and bizarre activities where, it must be said, Mr Daniels was bound to be eventually detected in the course of his misconduct. It is another odd part of the investigation that not only are the events that are investigated predate [sic] by some months the investigation, but the events are ongoing during the investigation and do not end until July. Accordingly, we have a simultaneous commission [sic] of offences at the time that the investigation is proceeding. The mitigation was really in the medical background from the viewpoint of Mr Daniels and the groundwork for that explanation really lay within the body of Dr Willis’ report.

91. That report, dated 8 October 2010, was provided by the trade union to Mr Lipscomb who, to his credit, agreed to take it into account. It contains this line at the end of the first page: ‘There seems to have been some satisfactory resolution in his overall state of mind by April 2008.’ It was by selecting that particular line out of context, in our judgement, that Human Resources misled Mr Lipscomb and convinced him that he had no need to take into account any further the psychiatric history of Mr Daniels. The second error that seems to have occurred in this case is the failure by Mr Lipscomb, thereafter, to act upon the final sentence of Dr Willis’ report: ‘I hope this can be taken into consideration by the relevant authorities who may wish to commission an Occupational Health report prior to proceeding further.’”

The Respondent’s case

20. The Respondent contends that the Tribunal has doubled back on itself first by acquitting the Respondent of unfairness in its procedures for investigation and yet returning to the absence of an investigation when considering the overall approach required by Iceland. It is further contended that where a medical report is not self‑evidently prescribed there is no obligation on an employer to withhold a dismissal (see Chamberlain Vinyl Products Ltd v Patel [1996] ICR 113). The Tribunal in this case is guilty of substitution of its view for that of the employer; each of Mr Lipscombe and Mr Gay had formed a view that the charges against the Claimant should be upheld and that he was dishonest. Notwithstanding the Tribunal’s firm direction that it should not substitute its opinion (see Bowater v Northwest Hospitals NHS Trust [2011] IRLR 331), this Tribunal has adopted the mindset criticised by the Court of Appeal in London Ambulance Service v Small [2009] IRLR 563.

21. The Tribunal in its substitution has credited the Claimant with a mental condition that was not upheld by the relevant managers, namely that he acted in a bizarre or irrational way. The Tribunal has explained away the offensive conduct by reference to a mental attitude of the Claimant that the management did not accept. There was a clear issue for both of the managers to decide, and they looked at what the Claimant said about each of the three charges and did not believe him. They did not accept his accounts, and the mental element of dishonesty was, to their minds, present.

The Claimant’s case

22. On behalf of the Claimant it was submitted that the strictures set out in the preceding Court of Appeal Judgments apply in this case. It would be wrong for the EAT to intervene in a plain decision by the Employment Tribunal based upon Iceland. It is common ground that the facts in this case were extremely complex; the Tribunal says so, and so does Mr Gay. The Tribunal should be left alone in the decisions that it made, and contrary to the Respondent’s contentions there are clear findings of fact. Patel does not apply in the circumstances of this case, where what was indicated was a further step that could be taken rather than frustration by management as was indicated in Patel. The decision the Tribunal made and upon which it based its decision of unfairness was not simply based on Dr Willis’ opinion that there may be further investigation but upon what the trade union representatives have each separately said at the two levels of internal procedure and what the Claimant himself said.

23. Ms Macey contends that the mental element is central in both of these hearings, demonstrating such by reference to the minutes and to the decision letters, and it is plain that union representatives were seeking a reference to occupational health, as indeed the Claimant was. The Respondent’s management correctly dropped three charges because of confusion and irrationality in the Claimant’s conduct. The GP’s opinion as to a history of mental illness borne out by his 2010 and 2011 opinions were the factual basis upon which, in part, the Judgment could be made, in combination with the representations and the material put before each of the managers by each of the union officials and by the Claimant himself. It would be unfair to take points against the Claimant in respect of his appeal letter, which was, it must be said, directed to Mr Easy, with whom he had had a difficult relationship – and he appeared to be unrepresented there – and in his claim form, when, again, he was unrepresented. The range of reasonable responses required an objective consideration by the Employment Tribunal of matters that included the fact that this is a large employer, the Claimant has a long‑standing relationship with it with no disciplinary record, and at the Tribunal there was, essentially, no dispute about the facts. The matters upon which he was charged indicated some irrationality, Ms Macey contends; that is, that he was bound to be discovered, there is no evidence of personal gain, and some of the matters are irrational, such as taking 500 batteries.

The legal principles

24. We respectfully adopt the approach of Mummery LJ, in Fuller v London Borough of Brent [2011] EWCA Civ 267, who said the following:

“26. This is not an easy case. ... Perhaps it would not be out of place to make a few general comments about these differences, which lawyers and non-lawyers sometimes find unsatisfactory, even inexplicable.

27. Unfair dismissal appeals to this court on the ground that the ET has not correctly applied s.98(4) can be quite unpredictable. The application of the objective test to the dismissal reduces the scope for divergent views, but does not eliminate the possibility of differing outcomes at different levels of decision. Sometimes there are even divergent views amongst EAT members and the members in the constitutions of this court.

28. The appellate body, whether the EAT or this court, must be on its guard against making the very same legal error as the ET stands accused of making. An error will occur if the appellate body substitutes its own subjective response to the employee's conduct. The appellate body will slip into a similar sort of error if it substitutes its own view of the reasonable employer's response for the view formed by the ET without committing error of law or reaching a perverse decision on that point.

29. Other danger zones are present in most appeals against ET decisions. As an appeal lies only on a question of law, the difference between legal questions and findings of fact and inferences is crucial. Appellate bodies learn more from experience than from precept or instruction how to spot the difference between a real question of law and a challenge to primary findings of fact dressed up as law.

30. Another teaching of experience is that, as with other tribunals and courts, there are occasions when a correct self-direction of law is stated by the ET, but then overlooked or misapplied at the point of decision. The ET judgment must be read carefully to see if it has in fact correctly applied the law which it said was applicable. The reading of an ET decision must not, however, be so fussy that it produces pernickety critiques. Over-analysis of the reasoning process; being hypercritical of the way in which the decision is written; focusing too much on particular passages or turns of phrase to the neglect of the decision read in the round: those are all appellate weaknesses to avoid.”

25. Where a correct direction is given, and we hold that this was done in this case, ultimately, on Burchell, and findings of fact are made in a complex factual background, it will be unusual for an appeal to succeed. Nevertheless, it is open in any case to look at all of the material, as we have done. We do not consider Patel to be of assistance in this case, where the facts were more extreme. In Arriva Trains Wales v Conant UKEAT/0043/11 the EAT, Supperstone J and members, set out the approach, taking an astringent view of the ten or so Court of Appeal authorities, and said that in all cases where an ET had properly directed itself in accordance with the band of reasonable responses it would be unusual to interfere with the findings that the dismissals were outside or inside that band. Having taken account of Fuller and Bowater, the primacy of the Employment Tribunal’s decision was reasserted, even as it might have been in the past where there had been reasonable grounds to think that an appeal might succeed.

Discussion and conclusions

26. Echoing the words of Mummery LJ, and the minority Judgment of Moore‑Bick LJ, in Fuller, this is a difficult case, as unfair dismissal for misconduct cases frequently are. The Respondent could listen to this Judgment of the ET and think it had won. True it is that much of the approach of the Respondent managers has been upheld: genuineness of the belief in what was put against the Claimant, a proportionate approach dropping some of the charges against him where there was difficulty in succeeding, and a reasonable investigation meeting the standards set out in Sainsbury’s Supermarkets Ltd v Hitt [2003] ICR 111 CA. The finding by the Tribunal as to what, essentially, is a reasonable decision is one for it and not for the EAT. It anxiously considered whether a dismissal at that time was fair, and in the passages we have cited it relied not only upon Dr Willis in his first report but that includes, we dare say, a reflection on his second report, which does shed more light on the Claimant’s condition.

27. The central finding in paragraph 6 was whether there was sufficient material before the relevant managers to note that there were difficulties in dismissing the Claimant for dishonesty in the light of his history. It must be borne in mind that a lot of this history stemmed from the disagreement between the Claimant and management, including Mr Easy. The union official was seeking a further reference in relation to the use of the drug and the history. Of course it is common ground that the drug issue faded away; but the Tribunal said that it was the failure to act upon Dr Willis’ final sentence that caused the unfairness.

28. Mr Pirani has taken an etymological approach to these words of the GP. Boldly, he says that Dr Willis did not direct a reference to occupational health, and the Tribunal is wrong when it says there was a need to commission an OH report. The problem is that when a Tribunal records what is said and gets it wrong, that is a question of fact, not a question of law. Similarly, when a Tribunal gets a direction wrong yet is rescued by some other phrase in the Judgment, its Judgment as a whole will not be condemned (see Jones v Mid-Glamorgan County Council [1997] ICR 815). This Tribunal actually did cite the precise words of Dr Willis, so it cannot be thought to have overlooked them or effectively got them wrong. We hold, with respect to Mr Pirani’s wordsmanship, that this is to be pernickety and to inject a critique, an ungenerous approach to an Employment Tribunal’s Judgment, precisely along the lines eschewed by the Court of Appeal majority in Fuller.

29. Of course, in context that failure to follow Dr Willis’ suggestion is mirrored by the arguments addressed by both union officials at both levels of the proceedings, and in a case of this nature information provided by the trade union is important, as the Tribunal records in paragraph 96. There is no need for speculation about what might have been revealed, because the Tribunal is looking at what a reasonable employer would do. But, as a matter of record, when Dr Willis returned to the matter in his second report he does give a basis for the arguments addressed to the management that the Claimant was behaving irrationally, and indeed such argument made headway with Mr Gay and Mr Lipscombe. That is the kind of material that might have been forthcoming from the occupational health, which the management decided not to enlist.

30. In our judgment, that was something for the Employment Tribunal, at the end of this long Judgment, to consider, and not for the EAT. They are the ones who heard the Claimant and the managers about what happened during the course of 2010 when these charges were laid, and his history. A failing by management to take the step that it said was necessary for the purposes of Iceland is a judgment that was open to it. We do not consider it fell into error in making that decision. We would very much like to thank Mr Pirani, and of course Ms Macey, giving her services to the Claimant in this case, for their succinct arguments. The appeal is dismissed.

United Kingdom Employment Appeal Tribunal