Ham v The Governing Body of Beardwood Humanities College [2017] EWCA Civ 1629

[2017] EWCA Civ 1629Case No A2/2015/2773/EATRF
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HIS HONOUR JUDGE EADY QC
UKEAT/0179/15/MC
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 19/10/2017
Before
LORD JUSTICE McFARLANELORD JUSTICE BEANLORD JUSTICE MOYLAN
Between
LESLEY HAMAppellantTHE GOVERNING BODY OF BEARDWOOD HUMANITIES COLLEGERespondent
Paras Gorasia (instructed by Rochdale Legal Enterprise) for AppellantEdward Morgan (instructed by Forbes Solicitors) for RespondentHearing Hearing date: 5 th October 2017
Judgment ApprovedLord Justice Bean :
[1]The Appellant was employed at the college as Head of Science, later Director of Science, from September 1994 until her dismissal in May 2011. The reason for her dismissal related to her conduct. The respondent carried out a disciplinary investigation. A panel conducting a disciplinary hearing on 18-19 May 2011 (in the Appellant’s absence) found all four charges made out and the Appellant was dismissed with immediate effect on 23 May 2011.[2]She lodged an internal appeal against that decision which was heard on various days beginning in late November 2011 and ending on 3 January 2012. This time she attended the hearing and was accompanied by a trade union representative. Witnesses were called on both sides. Three charges were upheld in full and one only in part. The appeal against dismissal was refused.[3]The original disciplinary panel had considered a variety of options before concluding that dismissal would be the only appropriate sanction. Redeployment to another position was not felt to be appropriate. Nor was a warning, since the panel had no confidence that the Appellant would engage in any performance management procedure.[4]The appeal panel made detailed findings set out in an appeal outcome letter sent to the Appellant on 24 January 2012. They found that the Appellant had repeatedly failed to follow reasonable management requests to meet to discuss leadership and management issues. They found that “relationships had broken down significantly and there was a substantial loss of trust and confidence”; indeed, they noted in the letter that “you confirmed when presenting your case that you felt relationships had broken down”. The decision stated that “the panel first considered each allegation individually but felt that the allegations as a cumulative constituted gross misconduct”.[5]Ms Ham lodged a complaint of unfair dismissal. It was heard by an employment tribunal (Employment Judge Sherratt and two lay members) sitting at Manchester for the ten sitting days from 13-24 August 2012. Ms Ham was represented by a trade union official, the respondents by a solicitor. A list of issues had been agreed by the parties and was presented to the Tribunal at the start of the hearing. The Appellant’s primary case was that she had been subjected to detriment, and later dismissed, because of her trade union activities. These allegations took up a substantial part of the liability hearing. They were rejected by the employment tribunal and no issue about them arises on this appeal. There were no less than 21 issues under the heading “unfair dismissal” (that is to say the “ordinary” unfair dismissal jurisdiction under s 98 of the 1996 Act), number 14 of which asked “was the decision to dismiss within the band of reasonable responses open to the employer in this particular instance”? None of the 21 issues made any express mention of warnings.[6]The findings of the employment tribunal in relation to ordinary unfair dismissal were aptly summarised by the Employment Appeal Tribunal (HHJ Peter Clark and two lay members) when the case had its first substantive hearing in the EAT, in the following terms:-(1) The primary reason for dismissal related to the Claimant’s behaviour: i.e. conduct (paragraph 185).(2) The original disciplinary panel had a genuine and reasonable belief that the Claimant was guilty of the misconduct alleged (paragraph 286).(3) Nevertheless the original decision to dismiss was unfair because it was reached in the absence of the Claimant (paragraph 286).(4) The appeal panel was properly constituted and conducted a full re-hearing rather than a review of the original dismissal decision (paragraph 292).(5) As to the question of fairness under section 98(4) of the Employment Rights Act the employment tribunal expressed their conclusions at paragraphs 295-6 as follows:
“295. The allegations against the claimant, four in number, do not tally with the examples of gross misconduct taken from the disciplinary policy that are set out in this judgment at paragraph 283. The allegations do not themselves individually constitute gross misconduct. It is not right for a reasonable employer to ‘gross up’ individual allegations of misconduct to make them together constitute gross misconduct. The safeguarding issue which led to the claimant’s suspension and to Mr Kennedy’s investigation was the allegation considered the least serious by the appeal panel. 296. Considering these matters in relation to this employee, who had 17 years of service as a teacher without any adverse disciplinary findings against her and who would to the knowledge of all concerned [have] had her employment terminated by reason of redundancy on 21 August 2012 on the closure of the school, and considering them against the findings of the appeal panel that relationships had broken down significantly with a substantial loss of trust and confidence rather than relationships having broken down absolutely with a complete loss of trust and confidence, then the decision to dismiss the claimant summarily for gross misconduct did not fall within the band of reasonable responses of the hypothetical reasonable employer and as such was unfair.”
[7]The matter proceeded to a remedy hearing on 18 March 2013. The Tribunal made a basic award of £9,400 for unfair dismissal and a maximum compensatory award of £68,400. That decision, after referring to the decision of the EAT in Software 2000 Ltd v Andrews [2007] IRLR 568and the principles emerging from that case, continued with two paragraphs relied on in support of the present appeal:- “5. Based on the matters set out in the judgment we conclude that if the claimant had been managed properly and had any warnings been in place the claimant would not have been dismissed for issues relating to her conduct before she would have come to the end of her employment by reason of redundancy when the school was scheduled to close on 31 August 2012. Looking at the loss from our sense of justice, common sense and experience, we take the view that a Polkey reduction is not appropriate. 6. Then turning to section 123(6) of the Employment Rights Act 1996, was the dismissal to any extent caused or contributed to by any action of the claimant? We did not find that any acts of the claimant were acts of gross misconduct; if there were acts of misconduct and they had been dealt with properly under a process and the claimant was aware of the likely consequences to her of going outside of the rules, then we are satisfied that the acts of the claimant that we were taken to, none of them was sufficient to warrant any contribution towards the dismissal that the claimant was subjected to by the respondent in advance of the claimant’s anticipated redundancy date of 31 August. So, again, we take the view that nothing that claimant did caused or contributed to her dismissal or would have precluded her employment continuing to the end date of 31 August 2012.”[8]As already noted the College appealed to the EAT against the finding of unfair dismissal. The hearing took place on 4 April 2014. The EAT held that the Tribunal had erred in its conclusions set out at paragraphs 295-296 of its liability decision, cited above, and commented:- “The expression “gross misconduct” is steeped in industrial history, It pre-dates the introduction of the statutory concept of unfair dismissal, introduced by the Industrial Relations Act 1971. It is convenient shorthand for the old common law concept of wrongful dismissal: that is, where the employee is guilty of repudiatory conduct entitling the employer to summarily dismiss him without notice or pay in lieu thereof. The expression does not appear in s.98 of the Employment Rights Act. Employment Tribunals have a separate wrongful dismissal jurisdiction under the Extension of Jurisdiction Order 1994. However, unfair and wrongful dismissal are separate and distinct causes of action: see Redbridge London Borough Council v Fishman [1978] ICR 569; applied in Farrant v Woodroffe School [1978] ICR 184. A wrongful dismissal may be unfair; a fair dismissal may be wrongful. The error of approach by this Employment Tribunal, as set out above, is not saved by Ms Newell’s submission that the Employment Tribunal permissibly considered the entirety of the Claimant’s conduct and how it did not amount to gross misconduct. That is not that correct approach. The question is not whether the individual acts of misconduct found by the appeal panel individually, or indeed cumulatively, amounted to gross misconduct. Rather, it is whether the conduct in its totality amounted to a sufficient reason for dismissal under section 98(4).”[9]The EAT were also critical of the reference in para 296 of the ET’s judgment to the fact that the Appellant’s employment was due to end by reason of redundancy on 31st August 2012 on the closure of the College. The EAT observed that the prospect of future dismissal by reason of redundancy was simply irrelevant, but the employment tribunal appeared to have taken it into account in their overall assessment of the reasonableness of the dismissal by reason of conduct.[10]Before the EAT, counsel for Ms Ham argued that the Employment Tribunal’s decision could be upheld on a different ground, namely what she described as the lack of seriousness of the four disciplinary charges against Ms Ham, and that dismissal fell outside the range of reasonable responses. The EAT said:- “We cannot say that that conclusion is plainly and inarguably right or wrong. We therefore are unable to reverse or uphold the finding of unfair dismissal on appeal. Having fallen into error the ET decision on unfair dismissal cannot stand. The appeal is allowed. The case will be remitted for re-hearing on the reasonableness of sanction issue. This was a lengthy hearing below. Although we have found errors in the original Employment Tribunal approach, we accept Ms Newell’s submission [on behalf of Ms Ham] that the point should be remitted to the same Employment Tribunal, if practicable for reconsideration in the light of our judgment. The matter may be determined upon submissions, no further evidence is required.”[11]So the case was remitted to Judge Sherratt and his colleagues in the Employment Tribunal. At the remitted hearing no fresh evidence was called, but the Tribunal received oral and written submissions from the Claimant in person (the only time she acted in person during this litigation) and counsel for the employers. In their decision dated 3 September 2014 the Tribunal noted that they had already accepted the evidence about what the findings of the internal appeal panel had been on the four charges levelled at the Claimant which caused the Respondent at the appeal stage to decide to dismiss the Claimant. They further noted the terms of the judgment of the EAT that “the question is not whether the individual acts of misconduct found by the appeal panel individually or indeed cumulatively amounted to gross misconduct, rather it is whether the conduct in its totality amounted to a sufficient reason for dismissal under section 98(4).” They concluded:- “8. On the basis of the findings of the appeal panel chaired by Mr Osman, having reminded ourselves of the various matters that they took into account when reaching their decision, the Tribunal feels it must decide that the decision to dismiss the claimant was within the range of reasonable responses, albeit in our judgment at the extreme end of that range. 9. We therefore, taking the decision again on the question of fairness, find that the dismissal was fair…”.[12]Ms Ham appealed to the EAT from the decision that her dismissal had been been fair. The main issue raised on that appeal was whether the employment tribunal had erred in failing to consider whether dismissal was a reasonable sanction in a case where the appellant had not previously received warnings about her conduct. Much reliance was placed before the EAT, as it has been before us, on the words in paragraph 5 of the Tribunal’s earlier decision (of 18 March 2013) on remedy, where they said that “if the claimant had been managed properly and had any warnings been in place the claimant would not have been dismissed for issues relating to her conduct before she would have come to the end of her employment by reason of redundancy when the school was scheduled to close on 31 August 2012”. [emphasis added][13]Ms Ham’s appeal to the EAT was heard on 23 October 2015 by HHJ Eady QC sitting alone. She held:- “26. The ET on the remitted hearing was engaged in a limited reconsideration of its earlier conclusion. It was entitled to draw and rely upon the findings it had previously made on the fuller case presented before it at the original, Full Merits Hearing (when the Claimant was, moreover, represented by her trade union representative). At that stage, the very long detailed list of questions did not specifically raise the issue of warnings. Although reference was made to the ACAS Code, that was not to the paragraphs upon which Ms Niaz now seeks to rely.27. It was in that fuller Judgment that the ET considered the detail of the matters that would go to the questions raised by section 98(4). Aside from the matters upon which the EAT adjudicated in the first appeal, none of those earlier findings were subject to challenge. That meant that, at the remission hearing, the ET was proceeding on the basis of its earlier finding that there had been a fair investigation and that the decision of the original disciplinary panel - which had expressly rejected alternatives to dismissal, including warnings - was potentially within the band of reasonable responses (only being rendered unfair because that decision had been reached in the Claimant’s absence). In reaching that conclusion, the ET had addressed the various - very detailed - points raised by the Claimant (then represented). It was persuaded by her objection to the disciplinary panel proceeding in her absence, but not otherwise.28. The ET then considered the appeal panel’s decision. That was correct, because a disciplinary process has to be considered in total, not in separate parts. Bringing in its reasoning on the remitted hearing, it is clear that the ET accepted the Respondent’s evidence as to the findings of the appeal panel. That provided the immediate context for the ET’s finding as to the reasonableness of the dismissal for that reason. It was not, however, set in isolation. It did not mean that the ET’s earlier positive findings as to the original disciplinary panel’s decision had no relevance. Indeed, that would make no sense, given the need to consider the process as a whole and given the appeal panel’s express upholding of the earlier decision.29. Considering paragraph 8 of the remitted hearing Judgment necessarily imports the earlier reasoning in the original liability Judgment, absent those matters overturned by the EAT on the first appeal. It is simply artificial to read paragraph 8 in a vacuum. An ET in the normal course is entitled to expect its reasoning to be read as a whole. That must be all the more so where, as here, the ET has been required to carry out a limited reconsideration of its earlier conclusion and has already provided a fully reasoned Judgment, most of which still stands.30. Adopting this approach and thus having regard to the totality of the reasoning from both Judgments, I am satisfied that the ET had in mind the entirety of its earlier findings. Those included its finding that the original disciplinary panel’s decision to dismiss had potentially fallen within the range of reasonable responses; that decision including, as it did, the rejection of lesser sanctions such as warnings because it was considered that the Claimant would simply not co-operate and that trust and confidence had been lost. The only unfairness identified at that stage was that the decision was made in the Claimant’s absence. It was that unfairness that was remedied on appeal. Having reached its findings on the specific allegations, the appeal panel took the same view as the original disciplinary panel that dismissal was the appropriate sanction, that decision importing, by implication, the rejection of any lesser sanction. The ET found that fell within the range of reasonable responses. That the ET itself had been alive to the issue of possible lesser sanctions is implicit from its reference to the range; all the more so from its observation that the decision was at the extreme end of the range. I do not think this can be read as failing to have regard to the possibility of warnings: the ET was satisfied that this dismissal fell within the range of reasonable sanctions open to the Respondent. The other possible sanctions in the range must have included the possibility of disciplinary warnings.31. Although not the focus of oral submissions before me, for completeness I should say that I do not consider that this conclusion could in any way be affected by the ET’s earlier Remedy Judgment. In considering a Polkey reduction or contribution an ET is engaged in a different task to that facing it when considering liability for unfair dismissal. Moreover, when making its earlier decisions on remedy this ET had been proceeding on the mistaken premise that it was simply not open to the Respondent to fairly dismiss on the basis of an accumulation of acts of misconduct. It was therefore considering what might have happened if warnings had been given instead. Set right by the EAT, on the remitted hearing the ET was not undertaking the same exercise. It was concerned solely with the question whether it was within the range of reasonable responses to dismiss on the basis of the matters found proven at the appeal stage, rather than to impose some lesser sanction. As Ms Niaz acknowledged, the earlier Remedy Judgment had fallen away as a result of the EAT’s Judgment on the first appeal. The ET was not bound by those earlier conclusions. The Remedy Judgment cannot assist the Claimant.”[14]Judge Eady accordingly dismissed the appeal. From that decision Ms Ham, with permission granted by Simon LJ on the papers on 31 May 2016, appeals to this court.[15]It was argued for the appellant at the permission stage and before us that the ET erred in law in concluding at the remitted hearing that the decision to dismiss was in the range of reasonable responses “given its findings at paragraphs 5 and 6 of the remedy judgment to the effect that had the Appellant been made aware of the likely consequences of her actions or warned then she would not have been dismissed”.[16]But this is not, with respect, what the employment tribunal were saying. It is impossible to interpret their remedy judgment as including a finding that the dismissal was unfair, not because of an illegitimate accumulation of a number of incidents so as to amount to gross misconduct, nor because of any procedural failing by the original disciplinary panel, but on the simple basis that dismissal without prior warnings was an unreasonable sanction and that a warning (perhaps even a final written warning) was the only level of sanction that fell within the band of reasonable responses. If that was what they thought, they could have said so in the first liability decision. An employment tribunal, in assessing whether a dismissal for misconduct is outside the band of reasonable responses, will always have in mind the possibility of a less drastic sanction such as a warning or a final written warning. In fact the lack of prior warnings does not appear to have featured as an issue at the liability hearing before the employment tribunal, where there was no mention of warnings in the list of 21 issues agreed between the Claimant’s trade union representative and the Respondent’s solicitor which the tribunal used as the agenda for their consideration of the ordinary unfair dismissal claim.[17]The critical sentence in paragraph 5 of the 2013 remedy decision relates to what would have happened between May 2011 and August 2012 if the appellant had not been dismissed but instead been subjected to a performance management procedure and/or given a warning. That is an exercise which the employment tribunal were bound to carry out in assessing the amount of the compensatory award to be made to the appellant following their finding of unfair dismissal. It did not amount to the tribunal saying “on reflection we find that the dismissal was unfair because the claimant had not previously been given a warning.” It was not suggested at the first EAT hearing (the employers’ appeal heard in April 2014) that this passage in the remedy judgment was another ground on which the first decision on liability in the claimant’s favour should be upheld. Nor was it suggested that this issue should be considered by the employment tribunal when the case was remitted to them. Indeed, since it was not an issue raised at the first liability hearing it would have involved a failure of due process for it to be determined by the tribunal at the remitted hearing without it being put to the respondent’s witnesses, unless both sides agreed to the matter being resolved on submissions only.[18]In challenging the conclusion of the tribunal at the remitted liability hearing that the dismissal was fair Mr Gorasia also relied on paragraphs 5 and 6 of the remedies judgment for two other propositions. He argues that in refusing to make any reduction for contributory conduct the employment tribunal were expressing the opinion that none of the acts of alleged misconduct by the Appellant had been serious enough to warrant dismissal nor even to have contributed to the dismissal. He further submits that the tribunal’s finding that with any appropriate warnings or performance management procedures in place the Appellant (had she not been unfairly dismissed) would have remained in post until the closure of the College demonstrates that in the tribunal’s opinion the Appellant would have engaged with such processes, which reinforces the unreasonableness of dismissal as a sanction.[19]I do not consider that these two paragraphs of the remedies judgment of 18 March 2013 can be relied on to impugn the conclusions of the same tribunal in the remitted liability decision of 3 September 2014. They are tainted by the two errors of law in the first liability judgment identified by the EAT: namely in assuming that only individual acts of “gross misconduct” could justify dismissal, rather than the employee’s conduct viewed as a whole; and in taking into account the prospect at the time of the dismissal of the College closing only 15 months later. Moreover, as Mr Morgan rightly submits, whereas at a liability hearing the focus is on the reasonableness or otherwise of the employer’s decision to dismiss, at a remedies hearing the tribunal forms its own view as to what would or should have happened.[20]Mr Gorasia also complains that paragraph 8 of the remitted liability decision gives the tribunal’s conclusion that dismissal fell within the band of reasonable responses (though only just), but does not give reasons for that conclusion, so that his client does not know why she lost. Although the reasoning is compressed and could have been spelt out more explicitly, it is clear enough to me. The tribunal had been instructed by the EAT to reconsider the single issue of reasonableness of dismissal as a sanction. They noted in paragraph 4 that they had accepted the evidence of Mr Osman (who had chaired the appeal panel) and the findings of the appeal panel on the four charges levelled at the Claimant. In paragraph 8 they said that on the basis of those findings and the matters the appeal panel had taken into account, the tribunal “feels it must decide” that the decision to dismiss was fair. The panel had among other things found (as recorded in the appeal outcome letter set out in paragraph 171 of the tribunal’s liability decision) that the Appellant had repeatedly failed to follow reasonable management requests to attend meetings to discuss leadership and management issues, had on a number of occasions communicated in an unreasonable and intimidating way, and that her unreasonable and uncooperative behaviour with work colleagues had caused a breakdown in working relationship. The tribunal held that on the basis of those findings the panel’s decision was reasonable. It was not essential for the tribunal to say any more than that.[21]Mr Gorasia’s skilful arguments do not in my view create any ground on which to set aside the decision of the employment tribunal at the remitted hearing, however reluctant, that “the decision to dismiss the claimant was within the range of reasonable responses albeit in our judgment at the extreme end of that range”. It follows that I consider that Judge Eady was right to uphold that decision in the EAT and I would accordingly dismiss this appeal. Lord Justice Moylan:[22]I agree.

Lord Justice McFarlane:

[23]I also agree with the judgment of Bean LJ. I am persuaded that, legally, it would have been impermissible at the remitted hearing for the ET to have referred back to any conclusion that it had made in its earlier 'remedy' determination. The 'remedy' evaluation had been based upon the tribunal's finding on unfair dismissal which had subsequently been set aside. Secondly, the process of evaluation at the 'remedy' stage, where the tribunal exercises its own discretion on the basis of the facts that have been found, is a wholly different undertaking from that of determining the primary question of unfair dismissal which was the question before the ET at the remitted hearing. It follows that, contrary to the Appellant's central submission, the ET was entirely correct not to have regard to the 'remedy' judgment.

Cited in 1 later judgment