APPEARANCES
| For the Appellants |
Mr C J Coleman
Director
Matthews & Hayes Ltd |
| |
|
JUDGE J ALTMAN
- This is an appeal from the Decision of the Employment Tribunal sitting at Stratford on 9 June and 17 October 2000. It comes before us by way of a preliminary hearing to determine if there is an arguable point of law capable of being dealt with in full before the Employment Appeal Tribunal.
- The Employment Tribunal determined that the Appellants were in breach of contract and at the first hearing they adjourned the assessment of remedy to 22 November. The Respondent was dismissed for gross misconduct and it is the Appellants' case that they had before them clear evidence of such misconduct at the time of dismissal and, in the light of information they later discovered could have had more. It is the Appellants' case that they were misjudged by the Tribunal because they gave effectively an ex gratia payment equivalent to notice pay in the run up to Christmas for reasons to which I will return.
- The Respondent was employed by the Appellants pursuant to an agreement in writing from 1 January 1999. The Respondent was telephoned on 21 November 1999 by Mr Coleman, a Director of the Appellants who has presented their case to us today, and he effectively told the Respondent not to attend work due to the Appellant's concern about a number of files. On 22 November a letter was written to the Respondent giving four weeks notice of termination of his employment.
- The starting point for the complaint of breach of contract was the alleged omission on the part of the Appellants to pursue a contractual disciplinary procedure before the dismissal, that such a procedure which was contractual was found by the Employment Tribunal to have provided for investigation and a hearing, and as a result of that breach the Respondent claimed that the dismissal took place at a date earlier than the proper pursuit of his contractual arrangements would have ensured.
- It was the finding of the Employment Tribunal that although the reason for dismissal related to this serious concern about the file, the Appellants accepted that they had presented the Respondent himself with no details of their complaint. In their notice of appearance they do allege nine headings of gross misconduct. The Employment Tribunal recorded the Appellants' case as being that the Appellants felt that they were entitled to dismiss summarily for gross misconduct, but that the Respondent was given four weeks notice pay on the basis that they went beyond what they were contractually bound to do. The Tribunal described the Appellants' case that they did this "for altruistic reasons", but the Tribunal subsequently themselves rejected that as the reason.
- The Employment Tribunal concluded that there was a failure to follow the procedures, and that that was a breach of contract. They assessed the period that the Appellants would have taken to pursue a procedure to dismissal as two weeks, and they awarded compensation for that period, and at the subsequent hearing assessed compensation on the basis that a discount of 50% should be applied because of a risk of contribution.
- We deal with the grounds of appeal that have been raised. In the first ground of appeal the Appellants contend that the Tribunal was wrong to conclude that the Respondent's contract of employment could not be terminated by the Appellants by simply giving four weeks notice without the necessity for a disciplinary hearing. There was found by the Employment Tribunal to have been a contract. In paragraph 6(a) the Tribunal made the following finding:-
"(a) The contract of employment provided for a contractual disciplinary procedure which required, in cases of misconduct, for the allegations to be made known to the [Respondent] and for a discussion to take place. It is common ground that the disciplinary procedure was not invoked by the [Appellants] prior to dismissal.
(b) The [Appellants] were clearly in breach of the contractual disciplinary procedure. The argument put forward that they were entitled by the terms of the contract to simply dismiss on four weeks' notice without a disciplinary procedure is not accepted."
- Faced with those findings by the Employment Tribunal it seems to us that we can discern no error of law in the findings of fact or the conclusions based upon them; each case must depend upon its own circumstances. There may be cases in which the conduct of an employee is so serious that it is a fundamental breach of contract, and undermines the whole contractual relationship so that the employee cannot be heard to rely upon the other contractual terms relating to entitlement to notice.
- This was not the finding of the Tribunal in this case, and although even in a case of gross misconduct, the dismissal can take place instantly, it will generally be accepted that such dismissal itself is bound by the preconditions to dismissal, which is set out in the contract of employment. If there are preconditions to dismissal, namely a disciplinary procedure, then it seems to us unarguable but that the procedure must take place before there can be a dismissal. In the case of very obvious and gross misconduct, of course, such an investigation may take place in five minutes, in the terms of a conversation and a dismissal. But it seems to us that there is no error in law in the finding of the Tribunal in this case that, first, that there was such a contractual disciplinary procedure, and secondly, largely on the evidence of the Appellant, that there was a breach of contract because that procedure was not followed.
- Ground 2 of the Notice of Appeal states that the Tribunal was wrong to conclude that complaints made by the Appellant did not amount to gross misconduct. In the statement of case, furnished by the Appellants for the purpose of the hearing before the Employment Tribunal, nine headings of alleged gross misconduct, particulars of gross misconduct, were set out including the disclosure of confidential information in breach of a clause of the contract; involving the Appellants in a claim against some insurers without obtaining authorisation; the reservation and failure to issue, a cover note which involved alleged criminal liability; the use of the Appellants' letterhead for a personal communication; the failure to action amendments to a direct debit; errors in the issuing of cover notes where an insurer was changed; the issue of a cover note in respect of a vehicle which did not exist; failure to send renewal date details to a third party; risking the absence of cover for which the Appellants were liable to be regarded responsible; and mistakes on various files.
- In paragraph 6 (f) the Employment Tribunal directed their attention to the issue of the allegation of gross misconduct.
"(f) We reject the argument that the [Respondent] could have been dismissed for gross misconduct. The only aspect of his behaviour which in his evidence to the Tribunal Mr Coleman put forward as an instance of gross misconduct was the writing of a letter to a client in which it was alleged confidential information about the [Appellants'] business was given. We do not agree that the mentioning by the [Respondent] to a former client of his business of an amount which he speculated might be the turnover of the new business could constitute the giving of confidential information……..
(g) Even if this constituted a breach of contract of employment, in our assessment it did not constitute gross misconduct justifying summary dismissal."
The assessment of gross misconduct is often very difficult where there are matters of degrees of misconduct. It is even more difficult where it is the accumulation of a number of matters, each one of which may not itself be gross misconduct. Are three enough? Are seven enough? Are nine enough? Where does one draw the line? And it seems to us, inevitably, that we must conclude that this is a matter of judgment on the facts, and that whilst we recognise that the Appellants do not agree with the finding of the Tribunal, it seems to us on that evidence on the Employment Tribunal's assessment of the facts, which was a finding they were entitled to make, no error of law arises.
- In their Decision, the Tribunal went on to gain support for their judgment that this was not gross misconduct from the fact that the Appellants themselves gave four weeks contractual notice to the Respondent. The Tribunal simply say:
"We do not accept the contention that this was simply done out of altruism."
We have been told by Mr Coleman that he had taken some advice as to what he was doing, he told us that he was aware that the Respondent was having a difficult personal time and that his girlfriend was in some difficulties, and that he was concerned that this dismissal was going to take place immediately before Christmas and that he did not want to add to the bad time of the Respondent during that time, just before Christmas. We ourselves note that the dismissal took place on 24 November, and it is quite clear from Mr Coleman's submissions to us that he feels that his own consideration of the Respondent, by paying more than he felt he was bound to do, has as it were been wrongly and unfairly turned round and used against him as an assessment of what was in his mind. It seems to us, however, that the Employment Tribunal must be regarded in the way they have set out their findings, as having assessed the seriousness of the conduct of the Respondent for themselves, and the reference to the contractual notice was really by way of additional support or by way of an aside. We find that it was not central to their decision.
- In any event, the Employment Tribunal acted on the evidence before them and formed the judgment which they did, and it does not seem to us that they were not entitled to do so. A third body such as the Employment Tribunal has to judge conduct as it appears to them, and a person who knows in his heart of hearts why he did something may feel that the third party has come to the wrong conclusion; but that does not mean to say there is an error of law and therefore we cannot interfere with the judgment of the Tribunal on this issue
- The next argument is that the Tribunal was wrong to conclude that if it was necessary to invoke a disciplinary procedure, it would have taken two weeks because the Tribunal failed to take account of the fact that the Appellants were a small company with only two directors; that the Respondent was an experienced insurance broker, and it was the files of the Respondent himself that formed the substance of the reason for dismissal with which the Respondent himself would have been familiar. The point is made that in this sort of organisation, the process of going through an investigation and decision making and giving an employee the opportunity to state his case can be accomplished very quickly indeed. In argument, Mr Coleman said it would take a couple of days, in his grounds of appeal he says that it could not have taken more than one week, and he suggests that the Employment Tribunal were wrong in coming to the conclusion that they did. In paragraph 6 (c) of their Decision they say this:
"(c) Having regard to the nature of the allegations made against the Applicant, consisting of approximately nine separate allegations relating to various insurance files upon which the Applicant was working, the Tribunal conclude that it would have taken at least two weeks for a proper disciplinary procedure to have been carried out."
They rely on particular facts, namely the need to assemble and notify the allegations, the clarification of the allegations, giving the Respondent access to the files to give an opportunity for explanation or mitigation, and they conclude by saying that they have taken account of the:
"evidence they heard as to the nine cases of alleged misconduct, each of which involved a consideration of the history of an insurance file."
This is really again, it seems to us, a matter of judgment for the Employment Tribunal. They come to this case as what is called very often "an industrial jury", and again they have to estimate a period of time. It may be that had we been looking at this matter afresh, and heard the arguments which the Appellant has addressed to us on this matter, and the grounds of appeal, in which he raises the obviously very important ingredients, we would have thought that two weeks was rather a long time. On the other hand, some employers take longer than others. At the end of the day, however, we again find there is no error of law in the estimated period of time and that therefore there is no basis for interfering with the judgment of the Employment Tribunal.
- The next ground of appeal is the allegation that the Tribunal were wrong to conclude in the remedy hearing that the Appellants were complaining as to the Respondent's attitude to work and lack of attention to detail, when in fact the complaint went to the integrity of the Respondent, and the Employment Tribunal did specify that there were serious concerns about the matter. We have some sympathy with the proposition that the nine complaints of conduct are perhaps rather over-generalised by the description of "attitudes to work and lack of attention to detail", but nonetheless it does seem to us that the Tribunal were again forming a judgment on the evidence before them. They were assessing the case for the purpose of remedy in the light of the decision in Raspin v United News Shops Ltd[1999] IRLR 9 and in page 10 of their Decision they said this:
"18 We have to balance the lost chance of continued employment or compensation for unfair dismissal following a disciplinary hearing against the other possibility that there would have been a fair dismissal in early January 2000. Here we have to have regard to the fact that the [Appellants] brought a catalogue of complaints of misconduct and/or poor performance against the [Respondent] and to the fact that the [Respondent] was a very experienced insurance broker who had been the proprietor of the business prior to the commencement of his employment upon the sale of that business to the [Appellants]. We also take account of the fact that the [Appellants] were, in effect, complaining as to the [Respondent's] attitude to his work and his lack of attention to detail. The [Appellants] would have been entitled to place great importance on this lack of attention to detail, having regard to the nature of their business. The Tribunal would have been bound by principles of law …………. not to substitute their view for that of a respondent employer and whereby they are bound to find that a decision which was within a range of reasonable responses by a reasonable employer is not to be regarded as unfair."
- The Employment Tribunal then go on to make a finding of 50% contribution. It seems to us in reality that far from understating the conduct by the use of the words "complained of" the Employment Tribunal was in effect recognising that there was to be a 50% reduction because of the risk of a finding of contributory conduct. Bearing in mind that the finding of a "risk" in itself would probably lead to only a percentage reduction, not 100% reduction, and on top of that that there would then be some reduction for contributory conduct, it is clear that the Employment Tribunal were acknowledging some substantial substance in the complaints that the Appellants were bringing in that paragraph. Accordingly although the words used, so far as the Appellants are concerned may, on a literal analysis, rather understate the position of the Appellants, they actually were a basis for a very substantial reduction in compensation. We do not find that there was any overall error of law in the way in which the Employment Tribunal approached that deduction in that paragraph which we have quoted, and which we consider must be read as a whole to understand what was being said.
- The next ground of appeal is that the Tribunal was similarly wrong to conclude that at the disciplinary hearing, if there had been one, the result could have been anything other than a fair dismissal by the Appellants. The Tribunal had to act on information before it. Mr Coleman for the Appellants has pointed out to us that he had discovered other matters which he could have raised before the Tribunal, but he has said that knowing the need to be honest, in the presentation of the case, he did not pretend to the Tribunal that he knew about them at the time of dismissal. That is, if it is correct, an honourable and commendable stance to take. However, when a Tribunal is faced with an unfair dismissal because no procedure was adopted, it has to do the best it can, if asked to do so, to estimate what may have happened, and to some extent that must be an exercise in crystal ball-gazing because one may ask "Who knows?". Very often, Tribunals will say that what may have happened is such an imponderable that no deduction falls to be made at all, because the employer loses the opportunity of demonstrating what would have happened by failing to adopt the procedure in the first place. In this case, however, the Tribunal was able to make a substantial reduction in the compensation and the Tribunal, it seems to us, set out the facts, and exercised their judgment of evaluation. It does not seem to us that there was any error of law in their approach to their finding of fact or their application of legal principles to it. All we can record is that the Appellants consider they were wrong, but that of course does not in itself demonstrate an error of law.
- Finally, the Appellants complain that the Employment Tribunal failed to properly assess the chance that a fair dismissal may have been the outcome of the disciplinary discussion, as they should have done according to the Raspin case. We have referred to paragraph 10 in which they set out their assessment and essentially the arguments and the answers to them are the same for the previous ground of appeal. We find no error of law in that either.
- In this case the Employment Tribunal knew neither of the parties; they had to act upon the evidence before them. It is important that employers do conduct disciplinary procedures which are fair and properly recorded in order, of course, to do right by their employees. One of the side consequences of such an approach, it can be seen, is that when any outsider, be it a Tribunal or any other body, comes to have to assess what has gone on without knowing any of the people involved, the very pursuit of such a fair and proper procedure will provide the material, which in this case we suspect the Appellants wish they had had, to present to the Tribunal. Without the material an employer cannot complain that he feels at the end of the day that a Tribunal comes to the wrong answer on the material before it.
- We can find no error of law in a Decision which appears to us to have demonstrated that the evidence was absorbed and analysed and considered and judgments made upon it in a way that demonstrated no error of law. Accordingly this appeal must be dismissed at this preliminary stage.
