James Halstead Ltd v Curtis [1992] UKEAT 152_91_1812

EAT

James Halstead Ltd v Curtis

[1992] UKEAT 152_91_1812 · 1992-12-18

JUDGE J HICKS QC:

This is an appeal by the employers, James Halstead Limited, against the Decision of the Industrial Tribunal promulgated on 19 March 1991, that the Respondent to the appeal (the Applicant before the Industrial Tribunal), Mr Stephen Paul Curtis, had been unfairly dismissed. It is a case in which it is necessary to set out the facts as found by the Industrial Tribunal fairly fully and they are as follows:

3.(a) The applicant was employed by the respondent on 14th July 1976. He was a good worker and caused no problems until December 1988 when he began to complain of harassment and persecution. He worked at a job in the warehouse cutting up vinyl and was able to work alone, but from time to time he would begin to should and accuse people of talking about him. (b) In May 1989 he went into Mr Falcus's office [Mr Falcus being the Personnel Manager] - he was very agitated and upset. He accused the respondent company of not sorting out his problems. He complained of harassment and victimisation and demanded three months leave with pay to recover, and a sum of £1,000,000 as compensation for damage to his health. Later in the same month he again saw Mr Falcus in a similar manner. As a result he was sent to see the company doctor who examined him twice and contacted his general practitioner. The latter said that the applicant was fit for work, and prescribed a beta-blocker drug called propranobol. (c) Miss Tilly began to work for the respondent in 1987. After some time she met the applicant at a club. On a number of occasions he asked her to go out with him but she refused. The applicant had an operation of an intimate nature and became convinced that people were laughing at him because of it. Miss Tilly and two other female office staff were in the habit of sitting together for lunch in the canteen. The applicant became convinced that they were laughing at him, and in May 1989 he caused a disturbance in the canteen and called Miss Tilly an "evil cow". She was very upset and complained about this to Mr Falcus. A disciplinary interview was held attended by Mr Falcus and Mr Stringer. [Mr Stringer was another member of the employers' management, the Distribution Manager] The applicant tried to justify himself and refused to apologise. He was told that if he did anything similar in the future he would be dismissed. (d) The applicant's fits of shouting in the warehouse continued and he was again seen by the company doctor in May 1990. On 11th September 1990 Mr Falcus was out of his office interviewing a candidate when the applicant left his place of work without consent and pushed his way into Mr Falcus's office and lay down on the floor. Mr Falcus was sent for along with Mr Stringer, Mr Turner [the Warehouse Manager] and Mr Dixon [the Warehouse foreman]. The applicant said he had had enough of victimisation and was going to lie on the floor till he died. He shouted very loudly and was heard in nearby offices and also outside the office block. Mr Falcus telephoned the applicant's doctor who refused to speak to him, but passed a message through the receptionist that the applicant was only seeking attention and should be sent home and instructed to see the doctor. The applicant refused to move and again demanded three months leave and £1,000,000, or occasionally £1,000 compensation shouting at the top of his voice. After about 1 3/4 hours the applicant was persuaded to get up by the threat that the police would be called and he then drove himself home.

That was the situation with which the employers were faced and they had a substantial code of disciplinary procedure which included the following paragraphs under the heading

" GROSS MISCONDUCT"

Acts of gross misconduct will not be condoned and render the offender liable to immediate dismissal or to suspension without pay for five days.

Any allegation of gross misconduct will be thoroughly investigated by the Personnel Manager or by his substitute and the employee may be suspended with pay whilst enquiries are being made.

The employee will be informed in writing of the Company's decision by the Personnel Manager.

. .............

NOTE :

At any stage of the foregoing procedure the employee has the right to be represented by his/her Shop Steward or other employee of similar status to him/herself of his/her choosing."

There was a table of Disciplinary and Appeal Procedures in which, under the column "Type of Offence", the last and most serious item is:

"Commits acts of gross misconduct"

and shows as the "Penalty":

"Dismissal OR 5 Days Unpaid Suspension & Final Written Warning as at STAGE V.(Without Notice).

Interviewed by Personnel Manager."

There is then a column dealing with "Appeal" and a final column headed "Notes" which states:

"Investigation must be carried out during which employee is suspended on pay. Consult District Officer as necessary.

Penalty to be confirmed in writing."

What in fact happened, following the facts that I have hitherto recited, is, as the Industrial Tribunal found, that on the same day, that is the 11 September 1990, Mr Falcus sent a letter to the applicant dismissing him forthwith for gross misconduct.

Before the Industrial Tribunal there was no dispute that that was dismissal in terms of Section 57(1) and (2) of the Employment Protection (Consolidation) Act 1978 , a dismissal relating to the conduct of the employee or possibly as to his capability. Given that fact, the main matter canvassed before the Industrial Tribunal in relation to that initial dismissal was the question under Schedule 57(3) whether the employer acted reasonably or unreasonably in treating that as a sufficient reason for dismissing the employee. Also, whether or not the conduct on 11 September, was itself evidence of a defect of capability, there being no doubt that it was "conduct" in the sense of what happened on that date which was the employers' given reason for dismissal.

The Tribunal dealt with that issue in this way:

"6. Faced with behaviour such as that of the applicant on 11th September and previously, no reasonable employer could be expected not to take action. However, before taking action a decision had to be made as to whether the applicant's behaviour was the result of wilful misconduct or of some mental problem. If the former the proper disciplinary procedure should be used - if the latter the proper procedure for dealing with incapability due to sickness should be used. The respondent did not use either procedure. It is clear that Mr Falcus considered that the applicant's behaviour constituted gross misconduct, but his behaviour on 11th September differed only in degree and not in kind from his behaviour in May 1989 (excluding the insult to Miss Tilly) and for that earlier behaviour no disciplinary action of any sort had been taken. The respondent has a set of disciplinary rules and procedures agreed with the trade union. This permits immediate dismissal for acts of gross misconduct after a thorough investigation by the personnel manager, and also provides for suspension. At any stage of the procedure the employee is entitled to be represented by his trade union. It did not seem to the tribunal that this procedure had been followed, and [it did seem to the Tribunal] that the procedure actually followed was not reasonable in all the circumstances. As already mentioned the applicant had behaved in a similar, but not so outrageous, manner before and had not been disciplined. On llth September he was not warned that he would be dismissed and he was not suspended. There was no disciplinary hearing and the letter of dismissal was written shortly after he left the premises. The tribunal did not consider that this was reasonable and [did consider] that a reasonable employer would have suspended the applicant and held a disciplinary interview at which he was properly represented. This failure of procedure rendered the dismissal unfair. ..........

7. The tribunal also considered that there must be grave doubts as to whether the applicant was guilty of gross misconduct. His doctor had stated that he was not suffering from a mental illness, but the doctor seemed to be of the opinion that the applicant was actually being harassed and persecuted which, in the opinion of the tribunal was not the case. ......."

I interpolate that that seems to be, in fact, a reference to a letter written by the doctor after the dismissal procedure, including the appeal, was complete and could not, therefore, have been before the employer at the time of dismissal.

"....... It is difficult for laymen to contradict the opinion of a doctor, but the behaviour of the applicant over the last two years, culminating in the events of 11th September, was so bizarre as to make any reasonable person doubt whether he was responsible for his actions. It appears that he has never been examined by a psychiatrist. One of the members of the tribunal with some professional experience of mental illness considered that the applicant showed clear signs of paranoia. It was also noted that his immediate supervisor considered him to be "mental". .........."

Again, we think that it is common ground that that is a reference to evidence by Mr Dixon before the Industrial Tribunal.

"......... In these circumstances it appeared to the tribunal that the applicant's behaviour related to capability not to conduct and that a reasonable employer would have suspended him so that an examination could be carried out by a consultant. Depending on the result of such examination he could have been given sick leave or, if no cure was likely in a reasonable time, dismissed with notice. Alternatively, if it was found that he was not mentally ill normal disciplinary procedure could have been used. From this point of view also therefore the tribunal considered that the dismissal was unfair."

Mr Cavanagh's major criticisms centre on paragraph 7. He draws attention to a number of phrases including "there must be grave doubts as to whether the applicant was guilty of gross

misconduct" which seem to be direct involvements of the Tribunal in fact - finding as distinct from asking itself what was reasonable or unreasonable about the conduct of the employers. A little later, "in the opinion of the tribunal [that] was not the case" - that is to say, actual harassment and persecution was not the case. Again, on the face of it a finding by the Tribunal as to those primary facts. As Mr Cavanagh concedes, the phrase that the applicant's behaviour "was so bizarre as to make any reasonable person doubt whether he was responsible for his

actions." could not itself be criticised but then the Tribunal goes on to say that "One of the

members of the tribunal with some professional experience of mental illness considered that the applicant

showed clear signs of paranoia." As Mr Gilroy quite rightly concedes that was a matter that the Tribunal plainly should not have taken into account without giving the parties the chance of commenting upon it and making submissions about it.

The reference to Mr Dixon's view that he was mental, on the face of it seems to be something in reference to evidence that was before the Tribunal but there is nothing to indicate that that was before the managers who were dealing with the issue of dismissal.

Then, "it appeared to the tribunal that the applicant's behaviour related to capability not to

conduct....", and Mr Cavanagh says with some force that this seems to be substituting the Tribunal's own view. To continue "that a reasonable employer would have suspended him" is not, we think, subject to the same criticism. They then return to the procedural aspects with which they had dealt in paragraph 6.

As I have said, Mr Gilroy concedes that one part of that is properly open to criticism and we agree that there are other references, and I think that I have indicated which they are in paragraph 7, which if determinative of the Industrial Tribunal's Decision would be appealable errors of law. It is important, therefore, to consider what part paragraph 7 played in the Industrial Tribunal's decision. In our view, the only reasonable construction of paragraphs 6 and 7 taken together, and I have read them all so far as they relate to the initial dismissal, especially the first and last sentences of paragraph 7, is that the Industrial Tribunal considered and held that its finding of unfair dismissal was fully justified by paragraph 6 independently of the matters canvassed in paragraph 7.

As to paragraph 6, Mr Cavanagh submitted that the Industrial Tribunal erred in law in construing the employers' disciplinary code as permitting immediate dismissal for acts of gross misconduct [only] after a thorough investigation by the personnel manager. We agree that the construction of a document, such as this code, is a matter of law and therefore open to correction by this Appeal Tribunal if the Industrial Tribunal erred. However our construction of it, that is to say the code, and particularly the passages which I read earlier, is that in the circumstances of this case it required, as the Industrial Tribunal held, an investigation and the opportunity to be represented by a shop steward or another employee before dismissal. It seems to us that the relevant passages of the code are really with one exception all one way so far as that is concerned.

The only arguable exception is the very first sentence - "Acts of gross misconduct

will not be condoned and render the offender liable to immediate dismissal or to suspension without pay for

five days" - but read in the context of the remaining relevant passages - the two paragraphs that immediately follow, the right to representation and the way in which the matter is set out in the table annexed - we are clearly of the view that the true construction is that which I have stated which, although I have not expressed it in exactly the same words as the Industrial Tribunal, in our view leads to the same result in relation to the facts of this case. That was the major matter relied upon by the Industrial Tribunal in paragraph 6, and in our view properly so.

In the light of the way in which the Employment Appeal Tribunal is required to approach Decisions of Industrial Tribunals in such cases, as formulated in the authorities which Mr Gilroy referred us to, Kent County Council -v- Gilham

[1985] IRLR 18

, Hollister -v- National Farmers' Union

[1979] IRLR 238

, Thomas & Betts Mfg Ltd -v- Harding

[1980] IRLR 255

and Piggott Bros -v- Jackson

[1991] IRLR 309

, we find nothing in paragraph 6, as to the initial decision to dismiss, which would justify interference by us with the conclusion of the Industrial Tribunal.

If we were wrong about the relationship of paragraphs 6 and 7, or about the balance of the various matters canvassed in paragraph 6, we would still uphold the decision of the Industrial Tribunal as to the original dismissal because we are of the view, using the industrial experience of the Industrial Members of this Tribunal, that no Industrial Tribunal properly directing itself in law could have come to any conclusion other than that the course followed by the employers in this case, particularly in sending the employee home and then dismissing him on the same day by letter without further investigation or hearing, or the opportunity of representation, was outside the band of reasonable conduct of reasonable employers.

That deals with the decision of the Industrial Tribunal as to the reasonableness in terms of Section 57(3) of the dismissal.

As to the internal appeal which followed and which was provided for by the disciplinary code, the Industrial Tribunal in its findings of fact, after referring to the letter of dismissal continued:

"3(e) ...... He was informed of his right of appeal and submitted an appeal. This was heard on 18th September by Mr Raw the production director. The applicant was represented by his trade union. Mr Falcus was present and described the sequence of events leading to the dismissal. Mr Raw then retired to consider the matter and was accompanied by Mr Falcus. They went to Mr Raw's office where he asked Mr Falcus for some additional points of clarification and Mr Falcus replied. They then returned to the room where the appeal had been heard and Mr Raw dismissed the appeal."

In paragraph 6, the Industrial Tribunal dealing with this point said:

"6 ......... Furthermore the procedure at the appeal was completely unacceptable. It is not expected that such hearings will be conducted with the strictness of courts, but where, as in this case, the dismissing officer, who had presented the case to the person hearing the appeal, retired with that person, and gave him further information in the absence of the appellant and his representatives it is quite clear that justice had not been seen to be done."

It is a trite law, accepted by Mr Gilroy, that a fair appeal by way of re-hearing can cure earlier defects. The issue here is whether the Industrial Tribunal either mis-directed itself or was perverse in its implicit conclusion that that did not occur here. In our view, it did not mis-direct itself and was not perverse.

It is true that the phrase "justice had not been seen to be done" can be criticised if, what has been called the "fine tooth-comb" approach to Industrial Tribunals' Reasons is applied, but adopting the proper approach by the Employment Appeal Tribunal to an Industrial Tribunal's decision, as already discussed in relation to the earlier point, this is not a case in which it would be right to interfere, and in that connection it seems to us that one of the authorities cited by Mr Cavanagh, when properly understood, supports that conclusion. That is the case of Rowe -v- Radia Rentals Ltd

[1982] IRLR 177

at paragraph 14, in the Judgment of the Employment Appeal Tribunal given by Browne-Wilkinson J:

"On the facts of this case, the majority of the Industrial Tribunal have come to the conclusion that the appeals procedure was proper and that justice was done. In those circumstances, it would be wrong for us to say that the rules of natural justice had been breached simply because justice might not appear to have been done. In the context of these internal appeals from one man in line management to another, it must be difficult to show that rules of natural justice have been infringed if the person hearing the appeal in fact took the decision, the employee having been given the opportunity to deal with the case against him and having been heard."

That passage justifies some criticism of the phrase "justice has not been seen to be done" standing alone. On the other hand, the final words of that quotation seem to us to draw attention to what, in our view, is plainly a matter of substantial importance, and not just a matter of comparatively technical rules operating in other spheres, namely the employee must have the opportunity to deal with the case against him. Here, there is the fact that information was given to Mr Raw, who was deciding the appeal, by Mr Falcus after the appeal hearing to which the employee was a party had concluded and, as would appear from the Reasons of the Industrial Tribunal, supported by the minutes before them of the internal appeal, Mr Raw immediately came back and gave his decision without an opportunity for the employee to deal with that.

So far as this aspect is concerned, therefore, approaching the way in which we consider that we should approach the Industrial Tribunal's Decision, this is not a case in which we should interfere with their conclusion on that aspect. The appeal against the finding of unfair dismissal is, therefore, dismissed.

As to compensation, the Industrial Tribunal, in a short paragraph at the end of their Reasons, dealt with the matter in this way:

"8 The tribunal considered that compensation should be awarded, but felt that even if proper procedures had been used there was a possibility that dismissal would have been the final result. It felt that this must be taken into account in assessing compensation, and decided therefore that compensation should be reduced by 25%."

That finding is attacked on the ground of perversity. It is one, Mr Cavanagh says, which no reasonable Tribunal could have reached and in particular, it is one which no reasonable Tribunal could have reached referring only to the possibility that if proper procedures had been used there was a possibility that dismissal would have been the final results because there is no reference there to reduction on the ground of contribution to the dismissal by the employee.

The principles which we should apply here are, we think, sufficiently summarised in Harvey on Industrial Relations part X paragraph 297, and in particular the passage which reads as follows:

"In the Fougere case, Phillips J explained that the reason for this......"

[that is to say, the rule that the Employment Appeal Tribunal will only interfere when there is a serious error]

"....... is a practical one:

"industrial tribunals have to work in practical conditions, and they are obliged to assess the amount of compensation quickly - and fairly of course - but they are bound of necessity to operate in a somewhat rough and ready way, and to paint the picture with a broad brush. It is in everybody's interest that that should be the case". "

In our view, the facts in relation to compensation were all in the Industrial Tribunal's mind. As regards this aspect of their duties, whatever criticism may be levelled against paragraph 7 of their Reasons on the issue of unfair dismissal, those views were, in our judgement, relevant to the issue of compensation, when they were considering what were the possibilities that a fair procedure would nevertheless have resulted in dismissal, with the one exception, of course, of the fact that the member's own professional experience of mental illness should not have been taken into account without disclosure to the parties. However, that matter of itself is not, in our view, sufficient ground for interference by us with the Tribunal's assessment of compensation, given the approach which we ought to have to it.

The question is not whether we would have made a different assessment of compensation, or even whether we view the percentage arrived at by the Industrial Tribunal with a degree of surprise; the question is whether we can say that no Industrial Tribunal properly directed could have made that award, and in our view we cannot. We therefore also dismiss the appeal against compensation.