Co-Operative Group Ltd v Baddeley [2014] EWCA Civ 658

[2014] EWCA Civ 658Case No A2/2013/2137
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM The Employment Appeal Tribunal
Mr Justice Keith
UKEAT/0415/12/JOJ
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate Thursday 15 th May 2014
Before
LORD JUSTICE LAWSLORD JUSTICE RYDERLORD JUSTICE UNDERHILL
Between
The Co-Operative Group LtdAppellantMr S BaddeleyRespondent
(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
Mr Bruce Carr QC (instructed by Addleshaw Goddard LLP) for AppellantMr Ian Wheaton (instructed by Bernard Chill & Axtell) for Respondent
Hearing Hearing date: 11 February 2014JudgmentLord Justice Underhill :INTRODUCTION
[1]The Claimant, the Respondent before us, was employed by the Appellant (“the Co-Op”) from November 2007 until his dismissal for misconduct on 20 December 2010. He had a background in the pharmaceutical industry. In the later part of his employment by the Co-Op he was Quality Assurance Manager for a joint venture in which the Co-Op was engaged in China. He spent most of his time in China, but his base remained at the Co-Op’s National Distribution Centre at Meir Park in Stoke-on-Trent.[2]By a judgment sent to the parties on 4 April 2012 an Employment Tribunal chaired by Employment Judge Lloyd held that the reason for the Claimant’s dismissal was that he had made protected disclosures – in the jargon, that he was a whistleblower – and that it was thus “automatically” unfair under section 103A of the Employment Rights Act 1996. It also held that it would, if section 103A had not applied, have found his dismissal to be unfair under the ordinary provisions of section 98 of the Act.[3]The decision that the Claimant’s dismissal was unfair under section 103A was upheld by the Employment Appeal Tribunal, Keith J presiding, in a decision dated 15 November 2013. This is (subject to the procedural wrinkle mentioned at para. 36 below) the Co-Op’s appeal against that decision. It has been represented before us by Mr Bruce Carr QC. The Claimant has been represented by Mr Ian Wheaton of counsel.

THE SEQUENCE OF EVENTS LEADING TO THE CLAIMANT’S DISMISSAL

[4]As discussed more fully below, it is not easy to obtain a coherent narrative from the Employment Tribunal’s Reasons. Fortunately, however, the EAT gives a very clear account at paras. 10-21 of its judgment, to which reference can be made if necessary. For present purposes I can make do with a very short summary.[5]In order to understand the background to the Claimant’s dismissal it is necessary first to say something about the Co-Op’s practice as regard disposal of pharmaceutical stock which was approaching its sell-by date or otherwise not selling: this is referred to as “amnesty stock”. Such stock had initially been returned to a Co-Op site called Sants; but that had recently closed and at least from 2010 it was being returned to Meir Park. Some would be offered for sale to staff at reduced prices, but arrangements would also be made for sales to discount traders for sale in street markets or other such outlets. However, it was necessary to exclude from such sales all prescription-only medicines or so-called “pharmacy-only” items (“POMs” and “POIs”), which were required to be sent for incineration.[6]A sale of amnesty stock to staff took place in the car park at Meir Park on 24 July 2010. It was organised by the Claimant’s sister, who was also employed by the Co-Op. The Claimant was present. It is common ground that he was concerned that the stock being sold might include some POMs and POIs: there was a dispute before the Tribunal about what action he took about that concern. Following the sale the Claimant arranged for some “tote boxes” of unsold stock to be sold on to a discount trader whom he knew called Tim Jackson.[7]On 19 October 2010 the Co-Op was told by the local Trading Standards Office that a number of POMs and POIs originating from the Co-Op had been found on sale at Winsford Market in Cheshire. The officer investigating had been told that the stock had been acquired by the traders in question from Mr Jackson, and he had also been given the Claimant’s name. The Co-Op’s Asset Profit and Protection (“AP&P”) Team started an investigation. Among the people they interviewed was the Claimant. In the course of his second interview with them a further matter of concern emerged. In mid-September he had agreed to sell a further quantity of amnesty stock to Mr Jackson, but prior to actual delivery he had taken the stock in question off site, using a Co-Op van, and stored it for a few days in a lock-up garage which he had rented privately. The team regarded that procedure as highly irregular.[8]The charges that led to the Claimant’s dismissal related both to the sales on 24 July and to how he had handled the further sale in September. So far as the former was concerned, it was said that he had failed to report the concerns that he had that POMs and POIs were among the items being sold to staff and that he had failed to ensure that no such items were included in the stock which he sold to Mr Jackson. As for the latter, it was said that he had not informed management at all that he was taking stock off site and storing it in a lock-up garage prior to its delivery to Mr Jackson. (I should make it clear that it was not part of the Co-Op’s case that the sales to Mr Jackson were improper in themselves, still less that they were for the Claimant’s own benefit. It is common ground that he accounted to the Co-Op for what Mr Jackson paid him.)[9]It was the Claimant’s case that there was nothing wrong in his conduct on either occasion. As for the sales on 24 July, he had in fact carried out a check of the amnesty stock in the car park, with a management colleague, to look for POMs and POIs: they had found none, although they had not been able to check everything. No POMs or POIs had been included in the stock sold to Mr Jackson. As for the other charge, he had taken the stock off site because Mr Jackson was unable to take delivery straightaway but it was important that it be removed because there was about to be an inspection of Meir Park by the Medicines and Healthcare Products Regulatory Agency (“the MHRA”) and, he said, the Co-Op did not have the necessary licence to accept and store amnesty stock: management colleagues had known exactly what he was doing. More generally, it was the Claimant’s case that he himself has always been particularly concerned about the irregular storage of amnesty stock, and specifically POMs and POIs, and about it being irregularly on-sold. Although it was not his management responsibility, he had raised concerns about this subject on more than one occasion earlier in 2010: this indeed was the subject-matter of the protected disclosures which formed the basis of his claim under section 103A.[10]There was a disciplinary investigation, followed by a disciplinary hearing before a Mr Atkinson, the Co-Op’s Divisional Operations Manager, on 16 December 2010. He found the charges proved and decided that that Claimant should be summarily dismissed. The Claimant appealed, but his appeal was dismissed by the Co-Op’s Head of Central Operations, Mr Logue.

THE LAW

[11]No very sophisticated points of law are raised by this appeal, but I should summarise the relevant statutory provisions.[12]The provisions of section 98 of the 1996 Act are extremely familiar and I need not set them out here. But it is worth spelling out, trite though it may be, that they involve a two-stage exercise. First, by sub-section (1), the employer has to prove that the reason, or principal reason, for the dismissal was one of the admissible reasons identified in sub-section (2), the conduct of the employee being one such reason, or “some other substantial reason”. If he does so, the tribunal then has, by sub-section (4), to decide whether “in the circumstances … the employer acted reasonably or unreasonably in treating [that reason] as a sufficient reason for dismissing the employee”.[13]Section 103A of the Act reads as follows: “An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure.” “Protected disclosure” is defined in Part IVA of the Act, but I need not set out the relevant provisions. Section 103A operates by, in effect, providing that dismissal for making a protected disclosure constitutes dismissal for an inadmissible reason, so that the second stage that would be necessary under section 98 does not arise.

THE PROCEEDINGS IN THE EMPLOYMENT TRIBUNAL

[14]The Claimant commenced proceedings on 15 March 2011. His claims were not perfectly pleaded, but as eventually clarified in Mr Wheaton’s written closing submissions (of which we have a copy) they can be summarised as follows.[15]Unfair “whistleblower” dismissal. The Claimant’s primary claim was that he had been unfairly dismissed by reference to section 103A. The disclosures relied on were three alleged disclosures made to his management colleagues in connection with the storage and handling of amnesty stock at Meir Park, for which – as I have said – he believed that the Co-Op did not have the necessary approvals. In essence his case, as eventually developed, was that his conduct in making those disclosures had led his line manager, Mr Paul Berne, the International Development Manager, and other senior management (in particular Mr Bomphrey, the Director of Logistics) to regard him as a troublemaker who should be got rid of at the first opportunity. The report of the Trading Standards Officer represented such an opportunity. The investigation and subsequent disciplinary proceedings were orchestrated by Mr Berne so as to procure his dismissal.[16]“Ordinary” unfair dismissal. On this alternative the Co-Op must be taken to have proved that the reason for the Claimant’s dismissal was not that he had made protected disclosures, and thus in practice that it was that it believed him to be guilty of misconduct. Quite how the Claimant put his case on this basis is less clear, but it seems to have been that the disciplinary investigation was inadequate and that the hearing and appeal were conducted perfunctorily and unfairly by Mr Atkinson and Mr Logue: if they had approached their tasks with an open mind they would have been bound to accept that the charges were unfounded.[17]“Whistleblower detriment”. Section 47B of the 1996 Act gives an employee the right “not to be subjected to any detriment [other than dismissal] … by his employer … on the ground that [he] has made a protected disclosure”. The Claimant claimed that his suspension during the course of the disciplinary investigation, and the associated prohibition on his communicating with other employees, constituted such a detriment.[18]“Breach of contract”. In addition to a claim for damages for dismissal without notice, the Particulars of Claim referred to unpaid bonus payments but gave no further details.[19]The Co-Op denied the claims. As regards remedy, it pleaded that any compensation for unfair dismissal should be reduced by reason of the Claimant’s “contributory conduct” under section 123 (6) of the 1996 Act and/or because, if he had not been (ex hypothesi) unfairly dismissed when he was, he could and would have been fairly dismissed at or about the same time – i.e. a so-called “Polkey point”. It also pleaded that the whistleblower detriment claim was out of time.[20]The claims were heard in Stoke over ten days in two tranches in late 2011 and early 2012. The Claimant was represented by Mr Wheaton and the Co-Op by Ms Emma Smith of counsel.[21]On 4 April 2012 a formal judgment was promulgated by the Tribunal. It reads as follows:
“JUDGMENT The unanimous judgment of the tribunal is that the claimant was unfairly dismissed by the respondent; “(a) having regard to the provisions of section 98 (4) Employment Rights Act 1996 and; (b) was automatically unfair by virtue of section 103A of the said Act, the claimant having been dismissed in consequence of having made protected qualifying disclosures, (whistle blowing). Breach of contract is proven. We make no finding of contributory conduct against the claimant. We make no Polkey reduction. The claimant shall be entitled to recovery compensation by way of remedy; to be assessed. A Judgment with reasons will be promulgated and sent to the parties in due course.”
The further “Judgment with reasons” promised in that Judgment was sent to the parties on 17 May 2012. It repeated the Judgment of 4 April in identical terms and went on to set out Reasons extending over some 35 pages. A Judgment with reasons will be promulgated and sent to the parties in due course.”[22]The Judgment is defective because it fails to deal with the whistleblower detriment claim, and the nature of the “breach of contract” which is found to have been proved is not identified. (There is also a technical irregularity, since there cannot under the Rules be two “Judgments”. Formally, the operative Judgment was that of 4 April, and what was promulgated on 17 May were the reasons for that Judgment.)

THE EMPLOYMENT TRIBUNAL’S REASONS

[23]The EAT was very critical of several aspects of the ET’s Reasons, even though it felt able in the end to uphold the conclusion which it reached. It described the decision, with what was clearly some under-statement, as “not the Tribunal’s finest hour”. Mr Wheaton did not attempt to argue that the EAT’s criticisms were unfounded, and in my view they are indeed wholly justified. Although I will have to return to some particular points in more detail, it is necessary at this stage to summarise the principal overall defects. I do so as follows.[24]First, the structure of the Reasons is confused and confusing. Although at first sight they appear well organised, with an abundant use of headings, that appearance is dispelled as soon as they are read in detail. There is no coherent narrative and no structured analysis. It is often impossible to identify what issue the Tribunal is addressing at any given point. The headings tend to be more attention-grabbing than analytical and are indeed at some points positively unhelpful: in a telling passage in the judgment of the EAT, at para. 23, Keith J goes through a series of them and demonstrates that they bear no relationship to the text that appears under them. This is symptomatic of a general looseness of thought and expression.[25]Secondly, the language used by the Tribunal is frequently rhetorical, not to say tabloid. The tone can be illustrated by reference to the use of such terms as “stitch-up”, “the strong stench of conspiracy”, “Machiavellian intrigue” and “a brutal act of managerial homicide”. There is nothing wrong in principle in an employment tribunal being strongly critical of a party where the facts justify it; and there is no requirement that such criticism be expressed only in bland terms. But the trouble with using language of the type quoted is that it has an unprofessional flavour which tends to give the impression that the tribunal has lost its objectivity.[26]Thirdly, the focus throughout is on the Claimant’s account of events with very little being said about the Co-Op’s case or the evidence on which it relied. This is illustrated by the fact that under the heading “The Parties’ Cases: ET1 and ET3” the Tribunal gives a reasonably full summary of the Claimant’s case but says nothing about the Co-Op’s answer to it: there is no reference to the ET3 at all.[27]Fourthly, as regards the allegations of misconduct against the Claimant – which were central to the claim of ordinary unfair dismissal – the Tribunal fails to make any clear distinction in its reasoning between(a) the question whether he was in fact guilty of the matters charged and(b) the question whether the employer reasonably believed that he was guilty, as regards which the very well-known guidance in British Homes Stores v Burchell [1980] ICR 303n applies. It is trite law that for the purpose of deciding whether an employee has been unfairly dismissed for misconduct, only the second question is relevant. It is true that a tribunal may also have to decide the first question, either because the employer has pleaded “contributory conduct” and/or because there is a claim of wrongful dismissal (i.e. a claim for compensation for short notice), where liability does depend on whether the misconduct is proved – and both were in fact the case here. But it is very important that in such a case the tribunal clearly and carefully separates out its consideration of the two issues. No such distinction is observed in the Reasons in this case. Most of the Tribunal’s consideration is directed to making its own findings about what happened in the car-park sale on 24 July 2010, how the POMs and POIs found by the Trading Standards Officer got onto the market, and the September episode. There are elaborate assessments of the reliability and veracity of the Claimant, his sister and Mr Jackson, from all of whom it heard evidence about those events. On the basis of those findings it found that the Claimant was not guilty of the misconduct charged: in particular, it found that he had done his best to ensure that no POMs or POIs were among the items sold to Mr Jackson, and in fact that in all probability the items found at Winsford Market had got there from a different source. But it nowhere undertook the exercise of making findings about what investigation was carried out by the Co-Op; what material was, or should have been, available to the decision-makers about the matters charged; and what conclusions were reasonably drawn on that basis. It is right to record that at para. 13.5 of the Reasons the Tribunal does refer to “applying the Burchell test to these findings of fact” (it is not clear what findings are meant), but lip-service of that kind is of no value if the exercise required by Burchell is not carried out.[28]Those defects make it much more difficult than it should be to summarise the Tribunal’s reasoning accurately. But the following should suffice at this stage: Section 103A(1) It found that the Claimant had made the disclosures alleged, and it appears to have found that they were protected disclosures within the meaning of the Act. The latter conclusion was in fact unreasoned; but it is no longer controversial, for reasons which will appear.(2) It found that Mr Berne resented those disclosures and decided that the Claimant “had to go”. He saw the report from the Trading Standards Officer as an opportunity to get rid of him and “orchestrated” his dismissal on that basis.(3) It found that Mr Atkinson and Mr Logue took the decisions to dismiss and to refuse the appeal in pursuit of that agenda on the part of Mr Berne. I will not attempt to summarise here its particular findings on this aspect: see paras. 46-55 below.(4) Apparently on the basis of those findings the Tribunal found, at para. 15.1.3, that “[the Claimant’s] dismissal was in consequence of his making disclosures qualifying for protection”. The phrase “in consequence of” does not reflect the language of section 103A, which requires the protected disclosure(s) to have been “the principal reason” for the dismissal, in the sense of the principal factor operating on the mind of the decision-maker: see para. 41 below. But the EAT held that this was simply loose wording on the part of the Tribunal; and it is fair to note that in a summary of its conclusions at the end of the Reasons (section 19) the Tribunal does state that “the reason or principal reason for his dismissal [was] that he made a protected disclosure”. Section 98(5) The Tribunal nowhere spells out the basis of its alternative finding of “ordinary” unfair dismissal. At paras. 11.1-11.5 of the Reasons there are findings that both the disciplinary and the appeal hearings were conducted incompetently and unfairly, though the particular criticisms (separate from the case under section 103A) are not set out with any particularity; and that finding is repeated in some of the following paragraphs (see, again, paras. 46-55 below). Those findings would in principle be capable of supporting a finding of unfair dismissal under section 98. Mr Carr, however, says that it is apparent that the Tribunal’s finding was based simply on the fact that it did not itself believe that he was guilty – and there are certainly passages that support that contention. “Contributory conduct”/Polkey(6) The decisions that there was no “contributory conduct” on the part of the Claimant and that there should be no Polkey reduction are said at para. 18 of the Reasons to follow the Tribunal’s earlier findings of fact: the findings referred to are presumably the Tribunal’s findings that the Claimant was not in fact guilty of the charges against him. Since this part of the decision is not separately challenged I need say no more about it. The other claims(7) The summary at para. 19 of the Reasons records baldly that the Claimant did suffer such a detriment, but the detriment in question is not identified, and there is no discussion elsewhere in the Reasons.(8) There is no discussion of the breach of contract claim.

THE PROCEEDINGS IN THE EAT

[29]The Co-Op appealed to the EAT. Its grounds of appeal were as follows:
“(1) They [i.e. the ET] failed in numerous instances to make proper findings of fact and/or to provide adequate reasons for the trenchant conclusions they reached with regard to the Appellant and their treatment of the Respondent which conclusions are substantially based on pure supposition by the Tribunal; (2) In their consideration of the reason for dismissal and the fairness thereof, they repeatedly substituted their view for that of the Appellant as to the Respondent’s conduct; (3) They failed properly to apply the test for determining the reason for dismissal namely by having regard to the set of facts known to the employer, or a set of beliefs held by him, which causes him to dismiss the employee, and, in particular, to the set of facts known to, or the respective sets of beliefs held by David Atkinson and Christian Logue (the individuals who, respectively, took the decisions to dismiss and uphold the dismissal on appeal) and which caused them respectively to dismiss the Respondent or uphold the dismissal on appeal; (4) They failed to identify any relevant detriment to which the Respondent had been subjected for the purposes of section 47B ERA.”
[30]The appeal was heard on 22 February 2013. Mr Wheaton again appeared for the Claimant. Mr Carr appeared for the Co-Op. Judgment was handed down on 11 July 2013. The reason for the delay was that Keith J wished to hand down judgment on the same occasion in another case in which similar criticisms were made of Reasons drafted by the same Employment Judge (the case seems to have been Story Wood School v Jones UKEAT/0522/12).[31]The EAT’s conclusions and reasoning can be summarised as follows:(1) Notwithstanding its strictures on the way in which the Reasons were drafted, it believed that it was adequately clear that the ET had made findings (a) that the Claimant had made the disclosures which he alleged and (b) that those disclosures were the principal reason for Mr Atkinson’s decision to dismiss him and Mr Logue’s decision to uphold the appeal (see paras. 44-48); and that those findings were adequately reasoned (see paras. 52-53).(2) It followed that if the disclosures in question were protected disclosures within the meaning of the Act the Claimant’s dismissal fell within the terms of section 103A. However, it held that there was no reasoning in support of the Tribunal’s apparent finding to that effect. It believed that that lacuna could and should be addressed by addressing further questions to the Tribunal under the Burns/Barke procedure (see Barke v SEETEC Business Technology Centre Ltd. [2005] EWCA Civ 578, [2005] ICR 1373).(3) It acknowledged the force of Mr Carr’s submissions that the Tribunal’s approach as I have summarised it at para. 27 above meant that it had fallen into the trap of “substitution” which is so repeatedly condemned in the case-law (most recently and authoritatively in London Ambulance Service NHS Trust v Small[2009] EWCA Civ 220, [2009] IRLR 563). But that did not undermine the finding of unfair dismissal to the extent that it was based on section 103A: if the principal reason for the Claimant’s dismissal was that he had made protected disclosures it could not also have been that the Co-Op believed him to have been guilty of misconduct, so the question of the reasonableness or otherwise of such a belief did not arise.(4) It noted that the ET had simply failed to deal with the whistleblower detriment and unpaid bonus claims.[32]Accordingly the ET was asked to address a number of questions in relation to(a) its reasons for finding (if it did) that the Claimant’s disclosures were protected disclosures;(b) what (if anything) it had decided about the whistleblower detriment and unpaid bonus claims.[33]Employment Judge Lloyd duly provided the ET’s response to the EAT’s questions. He gave its reasons for the decision that the disclosures were protected disclosures. He confirmed that it had intended to find that the Claimant had suffered a detriment by being suspended during the disciplinary process and prohibited from speaking to his colleagues, and that his claim in that regard was not time-barred. He also confirmed that since the Claimant had provided no evidence in support of his claim in relation to bonus the only award that the Tribunal had intended to make under the head “breach of contract” was for compensation for lack of notice.[34]Having considered written submissions from the Co-Op, the EAT on 15 November 2013 dismissed the appeal.

THE APPEAL

[35]The Co-Op pleads three grounds of appeal, as follows:(1) “Substitution of View and the Reasons for the Dismissal”. In short, the Co-Op contends that the ET plainly fell into the trap of substitution as identified above; that that infected not only its view on the (alternative) case under section 98 (4) but its decision on the reason for the dismissal under section 103A; and that the EAT erred in law by failing to so hold.(2) “Adequacy of Reasons”. Para. 13 of the Notice of Appeal reads as follows:
“[It] is … trite law that the parties to ET proceedings are entitled to know why they have won and lost and the ET is under a duty to explain how it got from its findings of fact to its conclusions. The ET in the present case failed to comply with its duty and provide the Appellant with a proper explanation of the basis on which it concluded that a substantial number of senior managers employed by it were engaged in what amounts (on the ET’s findings) to a dishonest conspiracy to procure the dismissal of the Respondent. The somewhat chaotic structure of the ET decision indicates that it was reaching unexplained conclusions about the conduct of the Appellant and its employees without having first gone through the exercise of making findings of fact.” (3) “Remitting back to the ET for Additional Reasons”
. The Co-Op pleads that, given the fundamental inadequacies of the Reasons, this was not an appropriate case for the employment of the Burns/Barke procedure.[36]I should mention one technical point. The appeal before us is an appeal against the EAT’s decision of 11 July 2013. Strictly, the EAT did not in that decision do any more than ask further questions of the ET, and only that decision could be the subject of an immediate appeal. A purist would require a separate appeal against the decision of 15 November. But the approach taken by the Co-Op was understandable, given that the EAT had in substance decided most of the issues in its first judgment, and it has meant that the appeal came on sooner. Mr Wheaton made it clear that he took no point on this.[37]In his oral submissions Mr Carr did not pursue ground 3, recognising that it was only in practice sustainable if either or both of his first two grounds were made out – in which case it would add nothing. I take the two surviving grounds in turn.

GROUND 1

[38]I have already made clear that I agree with the criticism that the ET failed properly to distinguish between(a) the exercise of deciding whether the Co-Op had acted reasonably, on the material available to it, in concluding that the Claimant was guilty of misconduct and(b) the exercise of deciding for itself (for the purpose of remedy and/or the wrongful dismissal claim) whether he was in fact so guilty. But on the face of it the EAT was plainly right (see para. 31 (3) above) that that criticism is immaterial if the ET’s finding that the Claimant was dismissed for an inadmissible reason stands, because “substitution” is relevant not to the question of what the reason for dismissal was but only to the question of whether the employer’s decision to dismiss for that reason was reasonable under section 98 (4).[39]Mr Carr’s answer to that point was that he was alleging not only conventional “substitution” but that the Tribunal had taken its findings that the Claimant was not in fact guilty of the misconduct alleged into account at the first stage of the exercise and not merely the second: in other words, it had reasoned not “because he is not guilty, it was unreasonable of the Co-Op to dismiss him for misconduct” but – more startlingly – “because he is not guilty, the Co-Op must have dismissed him because of the protected disclosures”. Mr Carr took us to several passages in the Reasons which he said demonstrated that that was the Tribunal’s thought process. But none of them seemed to me clearly to prove his case. Some showed a general looseness of thought and expression, but that is not by itself enough to get him home.

GROUND 2

[40]The finding with which we are concerned is the finding of the ET that Mr Atkinson and Mr Logue made their decisions respectively to dismiss the Claimant and to reject his appeal not because they believed him to be guilty of the misconduct alleged but because (or at least principally because) they wanted to give effect to Mr Berne’s wish to dismiss him because he had made protected disclosures. The issue is whether the ET gave proper reasons for that finding. I need, however, to clear some ground before turning to the detail of the Tribunal’s findings and reasoning.[41]The starting-point is that section 103A uses the formulation “the reason (or, if more than one, the principal reason) for the dismissal” which also appears in section 98 (1) and has been central to the concept of unfair dismissal from its first introduction. That phrase was, classically, explained by Cairns LJ in Abernethy v Mott Hay & Anderson [1974] ICR 323 as referring to the “set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee” (see p. 330 B-C). Cairns LJ’s exact language may not be wholly apt in every case, but the essential point is that the “reason” for a dismissal connotes the factors operating on the minds of the person or persons who made the decision to dismiss. The same approach applies to the “ground” for a putative detriment contrary to section 47B.[42]That requires the identification of the decision-maker(s). It was accepted before us, and appears to have been accepted by the ET, that the relevant decision-makers – that is, the persons with whose motivation we are concerned – are Mr Atkinson and Mr Logue. In principle, therefore, it is immaterial what Mr Berne may have thought or wanted except to the extent that that operated on their minds. There was some discussion before us of whether that approach was applicable in all cases or whether there might not be circumstances where the actual decision-maker acts for an admissible reason but the decision is unfair because (to use Cairns LJ’s language) the facts known to him or beliefs held by him have been manipulated by some other person involved in the disciplinary process who has an inadmissible motivation – for short, an Iago situation. Mr Carr accepted that in such a case the motivation of the manipulator could in principle be attributed to the employer, at least where he was a manager with some responsibility for the investigation; and for my part I think that must be correct. But, as will appear, this does not appear to be the way that the Tribunal viewed the present case: Mr Atkinson and Mr Logue were found to be not innocent dupes but knowing participants, who consciously followed Mr Berne’s agenda. It is that finding which Mr Carr says was not properly reasoned.[43]One other distinction is important. It would not be enough for the Tribunal to find that Mr Atkinson and Mr Logue welcomed the opportunity to dismiss the Claimant for misconduct because he was a whistleblower – or, perhaps more pertinently, because they knew that that was Mr Berne’s view. Such a finding is not the same as a finding that that was their reason for his dismissing him (or, in the case of Mr Logue, rejecting his appeal). The correct approach was clearly explained by the EAT, Elias J presiding, in ASLEF v Brady [2006] IRLR 576, at paras. 78-79 (p. 584):
"78. We would agree that in principle there is indeed a difference between a reason for the dismissal and the enthusiasm with which the employer adopts that reason. ([Counsel for the employer] in fact drew a distinction between reason and motive, but we do not think that the analysis in this case is assisted by referring to the elusive concept of motive.) An employer may have a good reason for dismissing whilst welcoming the opportunity to dismiss which that reason affords. For example, it may be that someone perceived by management to be a difficult union official is perfectly properly dismissed for drunkenness. The fact that the employers are glad to see the back of him does not render the dismissal unfair. What causes the dismissal is still the misconduct; but for that, the employee would not have been dismissed. 79. It does not follow, however, that whenever there is misconduct which could justify the dismissal a tribunal is bound to find that this is indeed the operative reason. The Thomson case [Times Corporation v Thomson [1981] IRLR 522] shows that even a potentially fair reason may be the pretext for a dismissal for other reasons. To take an obvious example, if the employer makes the misconduct an excuse to dismiss an employee in circumstances where he would not have treated others in a similar way, then in our view the reason for dismissal – the operative cause – will not be the misconduct at all. On this analysis, that is not what has brought about the dismissal. The reason why the employer then dismisses is not the misconduct itself. Even if that in fact merited dismissal, if the employee is treated differently to the way others would have been treated, being dismissed when they would not have been, then in our judgment a tribunal would be fully entitled to conclude that the misconduct is not the true reason or cause of the dismissal. The true reason is then the antipathy which the employer displays towards the employee."
I respectfully agree with that exposition (see also, to the same effect, Governing Body of John Loughborough School v Alexis UKEAT/0583/10, at paras. 32-34). Distinguishing between cases falling on either side of the line may not be straightforward and will often require careful consideration of the decision-makers’ mental processes.[44]Finally, the burden of proof of an admissible reason for dismissal is on the employer, even in the case of a claim under section 103A: see Küzel v Roche Products Ltd [2008] EWCA Civ 380, [2008] ICR 799.[45]I turn to examine the passages in the Reasons which bear on the Tribunal’s conclusion that Mr Atkinson and Mr Logue were following Mr Berne’s agenda. There are several such passages, and the relationship between them is not entirely clear. I will take them in the order in which they appear.[46]Section 9 of the Reasons contains a lengthy narrative of, mostly, the Claimant’s dealings with Mr Bomphrey, with whom he disagreed about the procedures for the disposal of amnesty stock, but it also covers a meeting between him and Mr Berne on 14 October 2010 on the same subject, which the Tribunal described as very heated. At para. 9.10 the Tribunal found that following that meeting:
“[Mr Berne] decided to marginalise [the Claimant] at the very least and to get rid of him completely if he possibly could. The Winsford Market incident gave him the peg on which to hang that ambition. It was in truth an opportunity which arose unexpectedly. But it gave the conduit through which the claimant’s forced exit from the respondent was engineered.”
[47]Section 10 of the Reasons is headed “Wrong place, wrong time ?”. A passage in paras.10.1 and10.2 contains what seems to be intended as an overview of the Tribunal’s conclusions. Having referred in para. 10.1 to the possibility that the Claimant “was sacked simply by reason of his turning up on 24 July; or of merely being in the wrong place at the wrong time” (though that was neither his case nor the Co-Op’s), it continues:
“… There was in our view much more Machiavellian intrigue behind the claimant’s dismissal than that. We think that the claimant had set himself against [Mr Berne] in particular, on the grounds of integrity and professionalism. The claimant paid the price for that. 10.2 We sadly came to the view that the events surrounding the claimant’s dismissal have “stitch up” written all over them. Having heard all the evidence there is the strong stench of a conspiracy. [Mr Berne] and probably [Mr Bomphrey] were protagonists. [Mr Bomphrey] was probably aware of what was [Mr Berne’s] true agenda. [Mr Atkinson] and [Mr Logue] were pulled in as naive and unwitting bystanders. However, by the time the disciplinary process got under way and gathered momentum against the claimant we believe they realized what the underlying agenda was in relation to the claimant. But they had no choice but to go along with it.”
That is clear enough as an outline. Mr Berne, pursuing his “agenda” of using the Trading Standards Officer’s report as a reason to get rid of the Claimant, put the disciplinary process in motion. Mr Atkinson and Mr Logue were initially ignorant of that agenda but became aware of it as the disciplinary process went ahead. But no particulars are given of the basis on which that finding is made.[48]The next section of the Reasons is headed “David Atkinson and Christian Logue”. Para. 11.1 contains the following passage:
“The respondent’s AP&P investigation in our view having been sadly deficient from the claimant’s standpoint, [Mr Atkinson] and subsequently [Mr Logue] were assigned the task of handling the claimant’s overall disciplinary process. They are young men who have not been employees of the respondent for very long. They are we believe conscientious and well qualified pharmacists. However, we think they were following [Mr Berne’s] lead (express or implied) in their manner of dealing with the claimant. We judge [Mr Atkinson’s] handling of the first instance disciplinary determination of the claimant’s case to be distinctly faulty on a number of levels. The claimant’s dismissal was badly tainted with major substantive and procedural unfairness. At its very best assessment – which we do not think is deserved – [Mr Atkinson] had taken a dismissive, broad brush approach to the disciplinary hearing which was based on a pre-conception that the claimant was guilty of mal-practice in the handling of the respondent’s stock.”
The Tribunal then sets out three “facts of particular importance”. The first is that Mr Atkinson “only listened to the AP&P interview of the claimant and not the full 13 CDs which had been recorded”. The second is that “he came to a conclusion on inadequate evidence of the claimant’s guilt of the charges laid against him”. The third is an admission made by Mr Atkinson in cross-examination that he “probably did not have evidence to give him a reasonable and genuine belief that the claimant knew there were [POMs and POIs] … sold to Mr Jackson”. I should make three points about para. 11.1: (1) The first sentence represents the full extent of the criticism of the AP&P investigation. The Tribunal does not say in what way it was “sadly deficient”. There are no primary findings about the investigation elsewhere in the Reasons, though para. 14.5 adds a little (see para. 53 below). (2) The criticisms of Mr Atkinson’s handling of the disciplinary hearing are hardly any more fully explained. Of the three “points of particular importance”, the first does not explain why it was important to listen to the other CDs. They are not referred to elsewhere in the Reasons. The second simply states that the evidence was inadequate, but it is not said why: there is no finding of what the evidence consisted of. The third, Mr Atkinson’s admission in cross-examination, is indeed significant; but it is, again, very general in nature. (3) Neither Mr Atkinson’s admission nor the other two “facts” go to the question of whether he was consciously following Mr Berne’s agenda (which incorporates the whistleblowing element). They go simply to the question of unfairness.[49]Para. 11.2 starts with a finding that Mr Logue in his appeal decision was judging the Claimant by higher standards than other employees involved in the 24 July incident. It then continues:
“At the same time he was probably acting as he did to protect his own position in a very hard edged business environment. [Mr Berne] we think was in charge as far as the accusations against the claimant were concerned. We suspect that both [Mr Atkinson] and [Mr Logue] knew in their heart of hearts that the claimant was being singled out apparently over a single incident.”
I have three observations about that passage: (1) The statement that Mr Berne was “in charge as far as the accusations against the claimant were concerned” is entirely general. The ET does not say what he did or said, particularly in the direction of Mr Atkinson and Mr Logue, to indicate what he wanted to happen. (2) The finding about what Mr Atkinson and Mr Logue understood about Mr Berne’s agenda is expressed only as what “we suspect”. Mr Carr submitted that what was tantamount to a finding of bad faith required more than suspicion. Likewise the finding that they knew “in their heart of hearts”: does that mean something of which they were consciously aware ? or some kind of subconscious awareness that they failed to acknowledge to themselves ? (3) What Mr Atkinson and Mr Logue are said to have known (in their “heart of hearts”) is not, as such, that Mr Berne wanted the Claimant dismissed but that he was “being singled out over a single incident”. It is not clear whether the Tribunal’s thinking was that they should have inferred from that it was intended that he should be dismissed.[50]Para. 11.3 starts with a statement that “DA was simply not competent in his conduct of the dismissal hearing”, but no details are given. Both stages of the process are then described as “clumsy and ‘mob-handed’”: it is not clear what “mob-handed” means in this context. There are then some criticisms of Mr Logue’s handling of the appeal process – specifically that “he didn’t adhere to the two reasons given in the dismissal letter and he didn’t investigate further evidence brought and enquiries raised specifically by the claimant” – but the evidence and enquiries referred to are not identified. The paragraph ends with a criticism of Mr Atkinson and Mr Logue for being “somewhat generalist … in their decision-making process … [which] became pretty much a personalised approach … rather than an objective one”.[51]Para. 11.4 contains further generalisations about the unfairness of the disciplinary procedure and to the effect that the outcome was a foregone conclusion, but no more particulars. It records the Tribunal’s “conclusion on the balance of probabilities that the claimant’s dismissal was subtly orchestrated by [Mr Berne]”. This does not take matters much further.[52]Section 13 is headed “The Damning of the Claimant”. Most of it is concerned with a character assessment of the Claimant. There is an unparticularised statement at the start of para. 13.2 that “the respondent’s senior managers had drawn a conclusion about the claimant before the investigative, disciplinary and appeal process had been completed”. Para. 13.4 refers to a “rolling juggernaut of allegations against the claimant which had gained momentum towards a decision to dismiss him”; but it is not clear what this means. Para. 13.5 starts by referring again to the existence of a “Machiavellian … agenda” to get rid of the Claimant because of his disclosures but gives no details about it. But it then switches to an acceptance of a submission by Mr Wheaton “that [Mr Atkinson] made no constructive effort to deliberate and give his determination on each separate incident of alleged misconduct … he was possessed of no clear view of what precisely was the claimant’s alleged misconduct to start with”.[53]Section 14 of the Reasons is headed “Who will Rid me of this Meddlesome Priest ?” (an inapt reference to Henry II’s alleged outburst about Thomas Becket); but again it confines itself to generalities. Paras. 14.1-3 repeat how the Claimant had antagonised Mr Berne, and para. 14.4 repeats the point made earlier that Mr Berne seized the opportunity presented by the Winsford Market incident “to hasten his exit”. Para. 14.5 begins:
“… [Mr Berne] took a close and continuing interest in the AP&P investigating process. The claimant was the first person interviewed. We think that the claimant was the principal focus of the investigative process from first to last. He was we think earmarked as the guilty party from the outset of the report from trading standards. That conclusion was probably assisted by [Mr Berne].”
[54]Section 15 of the Reasons is headed “Further Findings”, but it adds little. Para. 15.1.3 and 15.2 contain what appears to be intended as the formal finding that the dismissal was “in consequence of” the protected disclosures made by the Claimant: cf. para. 28 (4) above. Paras. 15.3 and 15.4 repeat, though in rather different language, the general findings made in the previous paragraphs. They read (so far as material):
“15.4 To put it bluntly, [Mr Berne] was probably the architect of a “stitch up” of the claimant and [Mr Atkinson] and [Mr Logue] were “place men” given the dirty jobs to do, to execute the plan. That plan was to marginalise and exclude the claimant. And the trouble at Winsford Market was the ideal peg on which [Mr Berne] could hang his ousting of the claimant from the company. Truly, by this means he was able as Mr Wheaton has put it get rid of “the troublesome [sic] priest”. [The sic is the ET’s not mine.] 15.5 We came to the view that [Mr Atkinson] and [Mr Logue] were offered up by the respondent to the tribunal hearing as sacrifices to the respondent’s incompetence and duplicity in its dismissing of an experienced manager of clear record who challenged what he legitimately saw as unacceptable practices by the respondent.”
At para. 15.6 the Tribunal says:
“The respondent [Mr Berne] and [Ms McNally, the Head of Healthcare HR] handed [Mr Atkinson and Mr Logue] very difficult roles as disciplinary officer and appeal officer respectively. They were we feel constrained to convict the claimant who in our finding should never have stood trial in the first place.”
[55]Finally, in section 17 (headed “The Claimant: Assessment of his Evidence”) there is a short passage concerning Mr Berne, Mr Atkinson and Mr Logue. Para. 17.9 reads (so far as material):
“… If the claimant was indeed guilty then all well and good in [Mr Berne’s] mind. Indeed if he but more particularly [Mr Atkinson and Mr Logue] were Burchell satisfied on all tests then our finding would follow. However, such satisfaction was patently absent in our view. From [Mr Berne’s standpoint the claimant’s guilt or innocence of the Winsford Market events or the lockup/[Mr Jackson] affair was irrelevant. It was a chance opportunity which [Mr Berne] used to his advantage.”
[56]That is the totality of the factual findings on which the Tribunal’s conclusion that the principal reason for the Claimant’s dismissal was the protected disclosures was based. There is no doubt that it found that Mr Atkinson and Mr Logue were led to make the decisions that they did by the knowledge that Mr Berne wanted to get rid of him. One or two of the passages might be consistent with some sort of subconscious knowledge, but para. 10.2 is explicit: by the end “they realised what the underlying agenda was”. The question is whether sufficient reasons are given for that conclusion.[57]There is no dispute about the nature and extent of the duty on the Tribunal to give reasons. The case most often cited is Meek v City of Birmingham Council [1987] IRLR 250, but the authorities are in truth legion. The reasons given must be sufficient for the parties, and any appellate tribunal, to understand why the ET reached the decision that it did on any issue that affects the result of the claim. The degree of detail required will vary according to the nature and significance of the issue in question.[58]I have come to the reluctant conclusion that the passages that I have quoted above do not satisfy the Tribunal’s duty to give reasons. It is important to appreciate that the allegations both against Mr Berne and, more particularly, against Mr Atkinson and Mr Logue are very serious. The allegation against Mr Berne is that he deliberately engineered the dismissal of the Claimant for an ostensible reason other than the true reason: that is an allegation of bad faith. As for Mr Atkinson and Mr Logue, the Tribunal evidently felt that their behaviour was less culpable because it believed that they had no choice but to go along with Mr Berne’s agenda (apparently because they were young – and perhaps, though this not stated, less senior than Mr Berne). Nevertheless, they are said to have knowingly colluded in what was happening; and it is a serious criticism of them that they did not have the moral courage to stand up to the pressure that the Tribunal believed they were under. I believe that the Tribunal was obliged to explain the basis for such serious findings with particularity. As I have pointed out, no particulars of any kind are given. The Tribunal paints with the broadest of brushes. No detail is given about how Mr Atkinson and Mr Logue were made aware of Mr Berne’s agenda, or even about how that might have happened. There is no finding that they met, or spoke, or that there was any e-mail communication between them, or that some intermediary was used to make sure that they got the message. (Mr Wheaton told us that he had argued that Mr Berne’s influence had been mediated through a Mr Irvine, who had spoken to Mr Atkinson before the hearing; but there is no finding about this in the Reasons.) In fact it seems clear – see in particular the phrase “express or implied” at para. 11.1 – that the Tribunal was not in a position to make any detailed findings of this character. We are simply given a conclusion, which does not become any better explained by being repeated.[59]I accept, of course, that there may be cases where a tribunal has to make a serious finding on the basis of circumstantial evidence. But in such a case it is important that it makes clear what the circumstances are which are said to justify the finding. The Tribunal in this case does not do so. I have considered whether, even so, it is sufficiently apparent what its thinking was. If the only circumstances were(a) that Mr Berne wanted to get rid of the Claimant and(b) that Mr Atkinson and Mr Logue did in fact dismiss him, that would plainly not be enough to justify the inference that (b) was the result of (a): quite apart from anything else, it would leave unanswered the important question discussed at para. 43 above. I have considered whether the gap can be filled by reference to the findings that Mr Atkinson and Mr Logue performed their roles in a perfunctory and unfair manner: Mr Wheaton in his submissions before us placed great weight on the admission made by Mr Atkinson which I have quoted at para. 48. But the trouble is that those findings are hardly any more fully reasoned. If the Tribunal had demonstrated that the case against the Claimant was patently weak, then that might justify the conclusion that Mr Atkinson and Mr Logue cannot genuinely have believed that it was made out, which might in turn justify the inference that they were dancing to Mr Berne’s tune. But it does not perform that exercise. On any view there were matters involving the Claimant that required investigation. His name had been given by the trader who was found selling Co-Op POMs and POIs at Winsford Market. Similarly, there was no dispute that he had been storing amnesty stock in a private garage off-site, which is on the face of it an irregularity which obviously needed to be explained (though I repeat that it was not suggested that the Claimant was acting for personal gain). It may be that the results of the AP&P investigation and/or the other evidence that was or should have been before Mr Atkinson and Mr Logue showed that he had done nothing culpable – or at least nothing that merited dismissal. But this is not something of which the Tribunal offers a reasoned demonstration. It does of course find, on the evidence before it, that the Claimant had done nothing wrong; but it needs to be shown that the Co-Op was obliged to come to the same conclusion, on the evidence which it considered (or should have considered).[60]I have anxiously considered whether I am applying an inappropriately high standard to the Tribunal’s Reasons. It is well established that the decision of an Employment Tribunal should not be overturned merely because the reasoning, or its expression, is less than perfect; and I am very alive to the hardship to the Claimant of having to re-litigate this claim from scratch (incurring, it may be, substantial further costs), and so many years after the event. But it would be equally unjust to the Co-Op, and more particularly to the individuals so strongly criticised by the Tribunal, for a decision to be allowed to stand which does not properly explain the basis on which the Tribunal reached its conclusion. In the end I believe that that is indeed the case; and I am reinforced in that conclusion by the other criticisms of the Tribunal’s Reasons made at paras. 23-27 above. In truth, the Reasons at no point inspire confidence that a cool and rational judgment has been applied to the issues.[61]Mr Wheaton also made the point that what might be obscure to us in the Tribunal’s reasoning was not obscure to the parties, who had heard the case and knew what the submissions had been. That is a fair point in principle, but it can only go so far. In my view the gaps in the reasoning here are such that the Co-Op cannot fairly know on what basis the crucial findings against them were made.[62]I should perhaps add, though this did not form a separate ground of appeal, that I was left in real doubt whether the strong findings made against Mr Atkinson and Mr Logue were ever put to them in cross-examination. We have no note of the evidence; but Mr Wheaton’s written closing submissions suggest that his case was more that they were misled by the results of an inadequate investigation than that they themselves acted in bad faith. At para. 54 of those submissions he says:
“It is the Claimant’s case that Paul Berne choreographed a situation whereby the Claimant was subject to a seriously flawed investigation leading to an inevitable conclusion on the part of David Atkinson, supplied as he was with incomplete evidence which excluded anything that supported the Claimant’s case.”
A later passage (para. 63) refers also to “the incomplete facts presented to David Atkinson”; and at para. 98 he is said to have been “presented with a fait accompli by the investigators”. It is fair to say that in another passage (para. 61) he says that it is the Claimant’s case “that [Mr Atkinson and Mr Logue] were talked through their roles”, a point also made at para. 96; but this seems to fall short of the Tribunal’s findings. Mr Wheaton told us that he had put to Mr Atkinson that he knew that the Co-Op wanted the Claimant dismissed, though he had not put any detailed case.[63]I accept that the EAT came to a different conclusion. It set out at para. 52 of its judgment a number of what Mr Carr submitted were instances of the Tribunal having “failed to explain why it made the findings that it did make”: those instances broadly correspond to those which I have identified above. It then said, at para. 53:
“We see entirely where Mr Carr was coming from, but we think that these are just examples of the tribunal resorting to inappropriate hyperbole to get its findings across. The tribunal unnecessarily laid itself open to criticism because of the robustness of its language. But the passages in its reasons which are criticised were really just different ways of saying that Mr Berne, probably along with Mr Bomphrey, wanted Mr Baddeley’s employment to come to an end because of his insistence on speaking his mind – whether that related to the storage of pharmacy only items and prescription only medicines on the site or his concerns over the joint venture in China. The fortuitous discovery of pharmacy only items and prescription only medicines being sold to the public at Winsford market gave Mr Berne the opportunity to get rid of Mr Baddeley without revealing what his real agenda was. We have not been able to discern in what way the tribunal thought that the investigation was deficient, but the disciplinary process was subverted by Mr Atkinson and Mr Logue having been persuaded to implement the outcome which Mr Berne wanted. And to the extent that the real criticism of the tribunal was that this scenario was merely supposition on its part, we disagree. It was the scenario advanced by Mr Baddeley. Having (a) accepted Mr Baddeley’s account of his meeting with Mr Berne on 14 October, and having (b) rejected Mr Atkinson’s claim that the disciplinary process had been a genuine attempt to consider and adjudicate on the allegations made against Mr Baddeley, we think that it was open to the tribunal to reach the conclusions which it did, and that its judgment sufficiently explained how it came to them.”
Mr Wheaton urged us to take the same approach; but, with all respect to the EAT, I do not think that that passage meets the essential criticism that the Tribunal does not give any basis for its finding that “Mr Atkinson and Mr Logue [were] persuaded to implement the outcome which Mr Berne wanted”.[64]I would accordingly allow the appeal on this ground. The consequence, if My Lords agree, is that the case must be remitted to the Employment Tribunal for re-hearing. Given the basis on which the appeal has been allowed, that hearing will have to be before a different Tribunal. I do not think that it would be possible or in any event fair for that Tribunal to be required to accept any of the findings of the previous tribunal: all the claims will have to be re-heard. I have already made clear that I regard this as a very regrettable outcome; but I see no alternative.

Lord Justice Ryder:

[65]I agree.

Lord Justice Laws:

[66]I also agree.

Cited in 148 later judgments

and 41 more of the most senior

Showing the 50 most senior of 148.