Appeal No. UKEATS/0018/15/SM

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

	At the Tribunal
On 16 December 2015

Before
THE HONOURABLE LADY STACEY
(SITTING ALONE)

JOSEPH BOLTON CARTER	CLAIMANT

AULDS BAKERIES LTD	RESPONDENTS

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Claimant	Mr P Harvey solicitor, Messrs Blair and Bryden, Greenock
	
For the Respondents	Mr S Miller solicitor, Clyde & Co

SUMMARY

Unfair dismissal.  The claimant was absent from work due to having been sentenced to imprisonment.  The respondents dismissed him.  The ET found the dismissal unfair.  The claimant sought reinstatement.  The ET refused to make an order for reinstatement.  The ET reduced the basic and compensatory awards by 100%, finding that the claimant was wholly to blame for his dismissal. 

The claimant appealed arguing that the ET had based its decision on reinstatement on a finding that such an order would not be practicable despite there being no argument to that effect.  Further, it had insufficient reasoning for the reduction by 100% of each award. 

Held:  Appeal allowed and case remitted to the same Employment Tribunal to reconsider remedy on the facts found, and to give sufficient reasoning for its fresh decisions.

THE HONOURABLE LADY STACEY

1.	This is a full hearing in which the claimant appeals against a decision of the Employment Tribunal (ET) sitting in Glasgow in December 2014, comprising Employment Judge Ian McPherson sitting alone, in which the written reasons were sent to parties on 23 April 2015, a verbal decision having been given in February 2015.  I will refer to parties as claimant and respondents as they were in the ET.  Mr Harvey, solicitor, appeared for the claimant and Mr Miller, solicitor, appeared for the respondents both before the ET and before me.

2.	The decision of the ET was that the claimant had been unfairly dismissed by the respondents but that as he had by his own conduct caused the dismissal both the basic award and the compensatory award should be reduced by 100%.  The ET declined to make any order for reinstatement or re‑engagement.  

3.	At the start of his submissions, Mr Harvey stated that he did not intend to proceed with any of his grounds of appeal relating to credibility or reliability and the assessment of evidence by the tribunal.  His ground of appeal therefore related to the decision by the ET that the appellant had caused his own dismissal; that the EJ had erred in relation to the issue of reinstatement, it not having been argued before him by the respondents that it would be impracticable for the appellant to return to work.  The EJ was said to have made his decision despite there being a lack of evidence before him.  Mr Harvey also argued that the EJ had not explained in sufficient detail why he found that the basic award and the compensatory award should both be reduced by 100%. 

4.	The underlying facts of the case are that the claimant was employed by the respondents from March 2005 until he was dismissed in October 2014.  His last day at work was however 8 September 2013.  On 9 September 2013 he was sentenced to 6 months’ imprisonment, in respect of a charge of dangerous driving and a charge of public disorder.  He was released on 5 November 2013 and on reporting to work was told that he could not come back.  He was given a letter of dismissal on 13 November 2013.  He lodged a letter seeking to appeal against that dismissal.  At that stage, the respondents took the view that the contract of employment had been frustrated and that there could be no appeal.  The claimant made a claim in respect of unfair dismissal and shortly before a full hearing, the respondents, following a change of agency, sought a postponement on the basis that it wished to allow the claimant to have an internal appeal.  That appeal was heard, taking several months, and on 10 October 2014 the claimant was told that the appeal had not been upheld.  The ET found that the respondents’ terms and conditions provided that if an employee was unable to attend work, he should contact his manager no later than 3 hours after the time he was due to start work.  Any employee absent for a full day would have a “return to work” discussion with his manager on the first day back.  Failure to attend work would involve disciplinary proceedings.  The claimant had a clear disciplinary record when he carried out his last shift, on 8 September 2013.  

5.	The claimant was imprisoned on 9 September and released with remission on 5 November 2013.  During that time he made no direct contact with the respondents.  His partner, Ms Shaw, attended the respondents’ premises on 9 September and met Mr Marr, the managing director.  She told him that the claimant had been imprisoned on charges arising out of a road traffic incident.  The sentence was 6 months but he hoped to be released on interim liberation. (He was not admitted to interim liberation, as it turned out.) Thereafter Ms Shaw spoke to Mr Gallacher, a supervisor, employed by the respondents.  While the ET made no finding in fact about what Ms Shaw said to Mr Gallacher, the EJ did find Ms Shaw a credible and reliable witness.  The solicitor for the respondents referred to her evidence that she had been in contact every week, and therefore it seems that the EJ must have accepted that.  No application was made for authorised absence during the period.  Some holiday pay was paid.  It is not entirely clear from the judgment if the holiday was actually paid during the period of imprisonment.  Some sick pay may have been paid.

6.	The chair of the appeal panel, Mr Drummond, gave the decision of the panel by letter in the following form:
“My apologies once more for the delay in contacting you regarding the decision of the Appeals Committee in respect of your dismissal. This has been an unusual case with no precedent in the combined experience of the committee members. 

It is the decision of the committee to unanimously uphold the decision to terminate your employment because:

1.	You were unable to attend work to do the job you were employed to do.

2.	You failed to adequately inform the company of the reason and likely duration of your absence. 

3.	You did not request whether you could take holidays or seek leave of absence to cover the period during which you were unavailable for work.

In the absence of any formal clarity as to the cause and length of your inability to perform your contracted duties, it is the decision of the committee that the dismissal was a proportionate response to your actions and situation.”

7.	At the hearing before the ET, it was conceded by the respondents that the correct procedures had not been followed when the first letter of dismissal was issued.  It was however argued that the deficiencies had been made good by the hearing of the appeal.  Mr Miller, the solicitor for the respondents, argued that the appeal committee had carried out a reasonable investigation and had held a fair hearing.  He emphasised that there had been no authorisation of the absence.  While some holiday pay had been paid, it had not covered the whole period and no attempt had been made by the claimant to seek special leave.  Mr Miller submitted that the dismissal was not unfair;  his fall back position was that if it was unfair, the claimant had breached his contract by being absent from work and so a reduction in his compensation should be made.  He left the percentage to the ET. 

8.	For the claimant Mr Harvey argued that the appeal did not cure the defects.  He criticised confusion amongst the members about what paperwork was before them.  The question about holiday pay was unclear, and the appeal committee knew that, but made the decision in the face of that lack of clarity.  He commended Ms Shaw’s evidence as reliable and credible, and submitted that she had said that she had asked if holiday pay could be paid.

9.	The ET found at paragraphs 122 to 124 the following:
“122. His [Mr Miller’s] position was that there was a dismissal, that it was conduct related, and that the procedure adopted by the respondents was eventually fair and reasonable.  He conceded that the claimant’s dismissal, on 13 November 2013, by Mr Marr was an unfair dismissal, and further stated that the respondents’ witnesses had conceded, by that time there was no basis for saying that the contract was terminated by frustration.  

123.  In light of that concession made by Mr Miller, I had no difficulty in finding, in my judgment dated 18 February 2015, that in respect of the claimant’s complaint of unfair dismissal by the respondents, the claimant’s dismissal by Mr Alan Marr on 13 November 2013 was unfair.

124.  Similarly, in that judgment, I came to the conclusion that confirmation of the claimant’s dismissal by the respondents’ appeals committee on 10 October 2014 was also unfair, and in respect of that unfair dismissal, I found that the appeals process afforded to the claimant did not cure the defects of the original dismissal, and the appeal process was itself tainted by procedural defects, and that there were unreasonable failures by the respondents to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures.”

10.	The decision was explained in paragraphs 136 and 137 as follows:
“136. But for the procedural flaws in the original dismissal of the claimant, on 13 November 2013, by Mr Marr, the respondents’ Managing Director, it may well have been that had the respondents complied with both their own disciplinary procedures, and the ACAS Code of Practice, that the claimant may well still have been dismissed after them following a fair procedure . The fact is, at that early stage, Mr Marr followed no procedure whatsoever, and the claimant’s employment was regarded by the respondents as terminated on the basis of frustration. 

137. While, thereafter, the respondents afforded the claimant a right of internal appeal, that process did not cure the initial defects in procedure, and the appeal process followed by them itself had further defects in procedure. That is why, in my judgment dated 18 February 2015, I concluded that conformation of the claimant’s dismissal by the Respondents’ Appeal Committee on 10 October 2014 was also unfair.”

Thus the ET decided that the dismissal process had been unfair. 

11.	The ET then proceeded, at page 56 and paragraph 138 onwards to consider remedy.  The EJ directed himself that there are three remedies for unfair dismissal, namely reinstatement, re‑engagement and compensation.  He noted that in the form ET1 the claimant had stated that he wanted reinstatement.  The EJ then directed himself in terms of section 116 of the Employment Rights Act 1996 to consider the following three matters:
“(a)  whether the employee wants an order to be made and in the case of re‑engagement what sort of order he wants.

(b)  whether it is practicable for the employer to comply.

(c) and whether it would be just to make either type of order where the employee’s conduct caused or contributed to some extent to his dismissal.”

12.	He directed himself that he had a general discretion to take into account a wider range of other facts including the consequences for industrial relations if the order is complied with noting the judgment in the case of Port of London Authority v Payne 1994 ICR 555.  The EJ noted that the solicitor for the respondents, Mr Miller had stated that he would make no submission that it was not practicable to reinstate the claimant.  It appears from paragraph 148 that neither solicitor made submissions about practicability when making their closing submissions.  At paragraph 149 the EJ noted that the first solicitors for the respondents in reply to an information order issued by the tribunal stated that the respondents did object to the claimant’s application for reinstatement in view of the nature of the offence, the position held by the employee and the length of the prison sentence, but the EJ went on to state the following: 
“I took the view that the respondents were not objecting to the reinstatement of the claimant, if he were to be successful in his claim for unfair dismissal.”

13.	The EJ stated as follows in paragraphs 150 and 151:
150. “Having carefully considered both parties’ positions on this matter, for there were no specific closing submissions made on this point by either parties’ representative, I decided that while the respondents had not argued that it would be impracticable to reinstate the claimant to his old job in their employment, I felt that the claimant having caused and contributed to his dismissal was, of itself, a reason not to order his reinstatement.”

151. In my judgment dated 18 February 2015, I found that while it was not argued by the respondents that it would be impracticable to do so, I regarded that claimant’s causing and contributing to his dismissal as a reason not to reinstate him to his old job with  the respondents, and so I refused the claimant’s application of reinstatement and compensation.” 

14.	He went on in paragraphs 152 to 156 to give his views about practicability.  At paragraph 157 he stated the following:
“As regards section 116(1)(c) and whether it would be just to make a reinstatement order, where the employee’s conduct caused or contributed to some extent to his dismissal, I consider that that matter did apply in this particular case.”

15.	At paragraph 158 under the heading “contributory conduct” the EJ stated:

“In my judgment dated 18 February 2015, I found that, on the basis that the claimant did cause or contribute to his dismissal, the tribunal should make no award of compensation to the claimant for his unfair dismissal by the respondents.  That same argument applies to my reason for not ordering his reinstatement.”

16.	He referred to sections 122 and 123 of the Employment Rights Act 1996, in the following terms:
“122(2) Where the tribunal considers that any conduct of the complainant before dismissal...was such that it would be just and equitable to reduce …the amount of the basic award to any extent, the tribunal shall reduce ...that amount accordingly.
123(6)  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.”

17.	The EJ gave his reasons in paragraph 160 where he stated that he was mindful of the case of Nelson v DDC (No 2) [1979] IRLR 346 in which the Court of Appeal had said that three factors must be satisfied if a tribunal is to find contributory conduct:
1.	The relevant action must be probable and blameworthy.
2.	It must have actually caused or contributed to the dismissal.
3.	It must be just and equitable to reduce the award by the proportion specified.
He then directed himself in terms of Hollier v Plysu Limited [1983] IRLR 260 that contribution should be assessed broadly and when a person was wholly to blame it should be a deduction of 100%.

18.	The EJ stated in paragraphs 162 to 164 as follows:
162. “In the particular circumstances of the present case, I was satisfied that the claimant did wholly cause or contribute to his own dismissal.  Had he not been imprisoned, then he would likely have attended for work as usual as he had done previously while employed by the respondents.

163.	Further the claimant took no pro‑active steps to notify the respondents of the reasons for his absence (except in so far as Miss Vicky Shaw contacted them), nor did he seek special or unpaid leave of absence from the respondents, and while he attended for work, almost immediately following his release from prison, the undisputed fact is that he was absent from work for a significant period, and that absence was unauthorised by the respondents.

164.	The claimant is very much the author of his own situation in that regard and I consider him wholly to blame for what caused and contributed to his dismissal by the respondents.  On that basis, I considered a 100% reduction to his compensation for contributory conduct appropriate.”

19.	The EJ adopted his reasoning for not ordering reinstatement in respect of not ordering re‑engagement.

20.	As regards reinstatement, Mr Harvey argued that the EJ had stated that in his view reinstatement would cause more issues for the respondents than it would resolve and that he considered that there was a real risk that there would be no mutual trust and confidence between the claimant and his line managers.  There was no evidence to that effect.  Neither Mr Harvey nor the respondents’ solicitor had argued that it would be impracticable to make an order for reinstatement.  In those circumstances, while Mr Harvey recognised that it was for the EJ to consider whether reinstatement would be just, he argued that the EJ had made his decision either on the basis of matters for which there was no evidence, or on the basis that he found that the claimant had caused his own dismissal.  He did not explain why he reached the decision. 

21.	Mr Harvey sought to argue that the Employment Rights Act 1996 employed two different tests, in that the test for reinstatement was whether or not it was just whereas the test for reduction in respect of the basic award and the compensatory award in sections 122 and 123 was that a reduction could be made if it was “just and equitable”.  He sought to argue that the two phrases are different but used in the same statute and therefore must have different meanings.  When Mr Miller replied to this part of the argument he pointed out that there is nothing in the ground of appeal giving notice of this argument.  Mr Miller is correct in that and I do not allow the argument to be made.

22.	Mr Harvey argued that the written reasons did not explain why the EJ decided to make a reduction of 100% in both the basic award and the compensatory award.  The EJ made no distinction between the awards and beyond simply finding that the claimant was the author of his own misfortune he did not explain why the reduction in either or both should be 100%.

23.	Mr Miller argued that he did not concede at the hearing that there should be an order for reinstatement if there was a decision that the claimant had been unfairly dismissed.  He accepted that he did not argue that it was not practicable that the claimant be reinstated.  He relied on the provision of section 116(1)(c) to the effect that where the complainant caused or contributed to some extent to the dismissal, the EJ had to consider whether it would be just to order his reinstatement.  Mr Miller submitted that the EJ had done that and that it was a matter for him.

24.	Mr Miller argued that the E J was entitled to come to the view which he did about the reduction of the basic and compensatory awards.  He argued that finding that the dismissal was entirely the fault of the claimant was plain and in those circumstances the EJ was entitled to take the view that the reduction should be 100%.

25.	Both solicitors referred to the case of Ladrick Lemonious v Church Commissioners 2013 UKEAT/0253/12/KN in which a fairly similar situation arose and in which a helpful analysis is given by Langstaff P.  The President found that a tribunal may make a decision that the basic and the compensatory awards should be reduced by 100% in a situation where it is open to the tribunal to conclude that the sole cause of the dismissal was the misconduct of the employee.  At paragraph 35 he stated that reasoning carefully setting out why it was just and equitable to do so would be required. Mr Miller accepted that it is unusual to make such a reduction and he recognised that the President had quoted from the case of Moreland v David Newton t/a Aden Castings EAT/435/92 where Mummery P said:
“We agree with (counsel for the employer) that depending on the facts of a case it is possible to have both a finding of unfair dismissal and a refusal to award any compensation on the grounds of contributory fault, but it is a rare and unusual combination.  Because of its rare or exceptional combination it requires justification by reference to evidence and requires the giving of reasoning.”

Langstaff P cautioned against a tribunal assuming that because there is no other reason for the dismissal, 100% contributory fault is appropriate.  He noted that that may be the case but that the percentage might still require to be moderated in the light of what is just and equitable.  In his conclusion at paragraph 60, the President noted that:
“What is ‘just and equitable’ may or not always be easy to explain at any length.  However given that the employer had not dealt fairly with a long serving employee in respect of whom (though he lied) the offending emails were (per paragraph 43) ‘relatively mild’, it is not obvious why the tribunal felt it was just and equitable to reduce what would otherwise have been his compensation to nil.  Even a few short words might have sufficed, but they are not there.  In a case such as this there is a clear distinction to be drawn between the basic award and the compensatory award.  The latter requires causation for the dismissal to be established.  The former requires no such matter to be proved.  Though usually (se the cases set out at paragraph 29 above) the percentage reduction may be the same for both basic and contributory awards, this does not have to be the case: and since the employer is necessarily at fault, since it has acted unfairly towards its employee, cogent reasons are required to show why nonetheless it is just and equitable that compensation should be nil.”

26.	Mr Miller argued that in the current case there was a sufficiency from the written reasons to know why the ET had decided that the reduction should be of 100%.

27.	I do not accept Mr Miller’s submission. The ET found that the dismissal was unfair.  While it does not give many details of the deficiencies of the appeal, it seems that the ET found that the investigation was not sufficient, and that the claimant was not informed of all that was before the Appeal Committee.  It may be that the ET was of the opinion that a better process would have yielded more information for the Appeal Committee to consider before deciding to uphold the appeal; but it is not clear if the ET was of that view.  It did however find the appeal process unsatisfactory.  It is not clear, in my opinion, what the EJ made of the Appeal Committee’s reasons for dismissal in light of Ms Shaw’s conversations with the respondents’ management, and in light of the lack of clarity about holiday pay.  From the letter refusing the appeal it appears that the Committee found that the claimant had failed to “adequately inform” the respondents of the reason for his absence and the length of it, and had not requested holiday pay.  The ET however found that Ms Shaw was credible and reliable, and had informed the managing director and the supervisor of the reason for absence.  The position about holiday pay was according to the EJ’s finding unclear.  While the EJ was entitled to conclude that the claimant caused his own dismissal by taking the actions which led to his conviction and imprisonment, he still required to consider in all of the circumstances whether that should lead to a reduction and if so, what percentage.  If there was any lack of information before the Appeal Committee due to their lack of proper procedure, then that might affect the decision made by them.  Thus the decision by the ET that the claimant caused his dismissal by his own actions requires further explanation: clearly he was responsible for his actions in committing offences, but the decision making thereafter requires examination.  The ET requires to give its reasoning for finding that the dismissal was unfair, but was caused wholly by the claimant.  It may well be able to do so, but it needs to be spelled out. 

28.	Further, the EJ found that the claimant failed to take proactive steps to notify the respondents of reason for his absence, but he qualified that finding by referring to Ms Shaw’s involvement.  He may well have considered that qualification in his decision making but he does not explain that he did so.

29.	It may be that the EJ had reasons in mind why 100% was required, and did not proceed simply on the basis that the dismissal was caused entirely by the fault of the claimant.  That is not however clear from the way in which the reasons had been written.  It is at least possible that the EJ proceeded to make the deduction of 100% because he found that the dangerous driving and the breach of the peace were actions of the employee and therefore, had he not acted in that way, he would not have been dismissed.  While that may be factually accurate it is not all that is required.  It is still necessary for the Employment Judge to consider whether it is correct that the awards should be reduced and if so by how much.

30.	In his consideration of reinstatement, I find that the EJ has not given sufficient reasoning.  It is agreed between parties that the respondents did not submit that it was not practicable to have reinstatement.  Thus the EJ’s views on practicability are obiter.  It appears from the written reasons that no submissions were put up about what would be just.  While I accept that it was for the EJ to make that decision, it is not clear from his written reasons what he took into account in making his decision.  I accept that an EJ is entitled in such a case to find that the making of a reinstatement order would not be just; but the party who seeks reinstatement is entitled to know why he takes that view. 

31.	Parties were agreed that if I was satisfied that the decision cannot stand it should be remitted to the same Employment Judge for him to reconsider the question of remedy.  I respectfully adopt the dicta of Langstaff P at paragraph 64 of the Lemonious case, as it applies to this case:  I have every confidence in the professionalism of the ET to consider, on the basis of the facts found by it, and taking into account submissions to be made by parties' solicitors, the matter of remedy afresh.  The ET should reconsider the matter of reinstatement, including any sum payable under section 114(2)(a), and should reconsider under section 116(1)(c) whether it would be just to make such an order.  If no order for reinstatement is made, the ET should reconsider under sections 122 and 123 any reduction which it finds just and equitable to make from the basic and the compensatory awards.  It should give full reasons for each of its decisions.