G K N Kwikform Ltd v Keogh [1993] UKEAT 79_93_2106

EAT
G K N Kwikform Ltd v Keogh
[1993] UKEAT 79_93_2106 · 1993-06-21

JUDGE N HAGUE QC:

This is an appeal by employers, G K N Kwikform Limited, against the decision of an Industrial Tribunal sitting at London (North) entered on the register on 3rd December 1992 in favour of the employee Mr Keogh. The Tribunal decided that Mr Keogh had been unfairly dismissed and ordered the employers to re-engage him, on stated terms, and to pay him compensation of the maximum amount of £10,000.Mr Keogh had been employed by the employers for some seventeen years as a scaffolder. There was no complaint about his work and there was no evidence of any previous disciplinary hearings. He was a member of the Transport & General Workers' Union and was a shop steward. It is in relation to his activities as shop steward that this case arises. Before turning to that, however, we think it is helpful to consider briefly his terms of employment. They are set out on page 5 of the Exhibit Bundle and include the provisions of certain documents amongst which (under paragraph 1b) is:
"The Working Rule Agreement of the Regional or District Joint Committee for the Building Industry as approved by the National Joint Committee for the Building Industry, appropriate to the job or site where you are employed."
Paragraph 4 of that Agreement reads as follows:
"Any grievance you may have arising from or relating to the employment to which this statement relates should in the first instance be raised verbally with your immediate supervisor. Subsequent steps in the procedure are as described in the employee handbook and in the National Working Rule 9."
That Rule, we interpose, is now National Working Rule 27. We continue with paragraph 5:
"Other terms and conditions of employment are in accordance with the provisions of the Working Rule Agreement referred to at paragraph 1b above and in the employees handbook."
The Working Rule Agreement in force at the relevant time was the 1989 addition. Paragraph 13.4 of that provides for dismissal procedures, common form provisions for warnings and so on. Paragraph 13.4.6 says:
"Any grievance arising out of the foregoing procedure must be processed in accordance with NWR 27."
NWR 27, which is headed "Grievances, Disputes and Differences", provides in NWR 27.1 the following as regards individual cases:
"An individual operative having an issue or grievance shall in the first instance raise it verbally with his immediate supervisor and every effort should be made to reach a settlement at this level.
Failing settlement the issue or grievance may then be taken up with the site or works manager, agent or general foreman, or other person designed by management for that purpose."NWR 27.2 refers to "Collective Cases" and NWR 27.3, which is headed "Further Steps - Disputes or Differences" starts as follows:
"In either case where the issue or grievance arises between members of the bodies affiliated to the National Joint Council, or any of them, and it has not been resolved or was not appropriate for resolution, through the procedure laid down in NWR 27.1 and 27.2 then it shall be the duty of the union steward or convenor steward, or appropriate full-time union official to report the facts to the full-time trade union officer or the Operatives' Regional Joint Secretary, as the case may be. In the event that management and the full-time trade union officer or the Operatives' Regional Joint Secretary are unable to resolve the difficulty it shall be the responsibility of both sides to progress the matter in accordance with the provisions and requirements of Rule 8 of the Constitution and Rules of the Council or, where applicable, the Construction Industry Scaffolders' Record Scheme. In the meantime there shall be no stoppage of work, restriction of hours worked, or reduction in output and the stewards shall see that this requirement is carried out."
There is provision which was utilised in this case for hearings before a Regional Conciliation Panel and for an appeal from there to the National Conciliation Panel. The exact status of such hearings and appeals has been a matter of some difficulty and dispute before us, but in the end we do not think it really makes any significant difference. The Tribunal in this case appears to have regarded them as a sort of internal appeal, and so part of a disciplinary procedure. Mr Stopford, who has appeared on behalf of the employers, has said that is quite wrong and they are not in truth part of a disciplinary procedure, but machinery for conciliation. There is, he says, a significant difference between the two. In either event, however, it is quite clear from what we have read out already, that they are part of the agreed grievance procedure. We will return to that shortly.The facts of the case are that in April 1990 Mr Keogh was working on a site in Greenford, the main contractors being Kyle Stewart. The foreman of this operation was a Mr Bigham. Mr Bigham, who was apparently thought to be a very good foreman, was moved to some other site and the workforce took exception to that. Mr Bigham asked Mr Keogh, as his union shop steward, to try and have the matter resolved. Mr Keogh took steps to do that by telephoning Mr Reding, the Regional Contracts Manager of the employers, and trying to contact a full-time union official.Meanwhile, the men, who were about nine in number, appeared to have ceased work and Mr Reding told Mr Langan and Mr Hulcoot (of management) to go to the site and to give the workers warnings about their conduct, saying that they were in breach of contract and in breach of the particular items which we have referred to. There was an oral warning. There were also unaddressed envelopes with written warnings in them and there was a certain amount of evidence about those. In paragraph 6 of the Tribunal's decision they say this:
"Although several workers did not take them [that is envelopes with warnings in] and the Applicant said he never received the final warning (although both Mr Hulcoot and Mr Langan said they had seen him open it and read it - a recollection we consider unlikely) we are satisfied that it is probable that everyone present knew that warnings of dismissal if work was not resumed were being issued and that everyone knew management was requesting them to return to work."
The "everyone present" referred to there clearly included Mr Keogh.One of Mr Stopford's complaints is that the Chairman of the Industrial Tribunal refused to allow him to cross-examine Mr Keogh about the evidence which he had given to another industrial tribunal at a previous hearing about the receipt of the warnings. We think there was a good deal of force in the submissions of Mr McMullen, Counsel for Mr Keogh, that if a complaint of that kind was going to be made, the proper procedures for obtaining the Chairman's views on it and so on ought to have been gone through, and they were not in this case. However, this matter does not seem to us to be of any importance, because from what we have already read out it is, we think, quite plain that the particular issue was resolved by the Tribunal in favour of the employers. The Tribunal came to the conclusion that everybody concerned, including Mr Keogh, knew very well what was going on, and that final warnings had been given.As a result of those warnings five of the nine scaffolders employed on the site left indicating they were not interested in pursuing the dispute. The four that remained, including Mr Keogh, were told, that they were dismissed.According to paragraph 7 of the findings of the Tribunal Mr Keogh appealed to the Regional Conciliation Panel which found that both parties had acted hastily and recommended re-engagement. The employers appealed to the National Conciliation Panel which rescinded that finding and held that the employers were entitled to dismiss in the face of industrial action, but went on to recommend re-engagement. Following that the employers did offer to re-engage the other three, but not Mr Keogh. This offer was made outside the 3-month period mentioned in Section 62(2)(b) of the Employment Protection (Consolidation) Act 1978 , but for other reasons which we need not go into this Appeal Tribunal in earlier proceedings has held that section 62 does not preclude Mr Keogh from bringing an unfair dismissal claim.The Industrial Tribunal in their Decision made it clear that Mr Keogh was in breach of his contract of employment. They went on to find that the Clause which we have referred to in NWR 27 was not incorporated into individual contracts of employment. Mr Stopford has drawn our attention to the relevant wording of the various documents we have outlined and says it clearly was. However, we agree that Mr McMullen that it must be borne in mind that the Working Rule Agreement is an agreement between employers and unions and there are good reasons why that particular provision does not apply to Mr Keogh at any rate in his capacity as an employee, and we accept Mr McMullen's submissions in that respect. In that regard he drew our attention to Section 18(4) Trade Union and Labour Relations Act 1974 and we think his point on that is a good one. However, in the end it does not seem to us that that is of any importance because on any footing the Tribunal found, clearly rightly, that Mr Keogh was in breach of his employment contract.The question thus arose, being a conduct case, as to whether the employers acted reasonably in dismissing him within the meaning of Section 57(3) of the 1978 Act. It is at this point that Mr Stopford's argument concerning the exact status of the Regional Conciliation Panels and the National Conciliation Panel come into focus, because he say that the Tribunal placed too much emphasis on the findings of those panels, in particular the National Conciliation Panel, and that as they were not properly appeal panels, that was incorrect. He says that evidence of what they found should not have been looked at, because it related to looking at facts which were subsequent to the actual dismissal. Had those panels been true internal disciplinary panels, we think it is clear on authority that that submission would be unfounded. See particularly West Midland Co-Operative Society Ltd v. Tipton [1986] ICR 192 at page 203 where Lord Bridge of Harwich cites with approval some dicta of Mr Justice Browne-Wilkinson, as he then was, in Sillifant v. Powell Duffryn Timber Ltd [1983] IRLR 91 at p.95:
"The commonsense of industrial relations demands that in considering the reasonableness of the employer's conduct account must be taken of information coming to his knowledge on the hearing of the appeal: the appeal is part of the procedural structure established by the employer to ensure fair treatment: . . . In our judgment this apparent exception to the rule that one can only look at facts known at the date of dismissal does not run contrary to the underlying principle of Devis v. Atkins. Although technically if the internal appeal is dismissed the original dismissal stands (and therefore information emerging on the appeal was not known to the employers at the date of dismissal), the underlying principle of Devis v. Atkins is not offended. The relevant point in time at which to assess the reasonableness of the employer is the time when he takes the final decision to dismiss."
With all respect to Mr Stopford, we really cannot see that there is any sensible distinction to be drawn in that context between the final result of a genuine appeal system and the final result of a conciliation system. The point is, as Mr

Justice Browne-Wilkinson put it:

"The relevant point in time at which to assess the reasonableness of the employer is the time when he takes the final decision to dismiss."
and here in our case, it seems to us, that point of time came after the final appeal to the National Conciliation Panel and its recommendation of re-engagement. It seems to us that Mr Stopford's distinction is a distinction without a true difference.Paragraph 10 of the Tribunal's Reasons sets out its decision about reasonableness and their reasons for that decision. The Tribunal finds that the employer's action was unreasonably precipitate in the circumstances. They set out the circumstances quite fully about the time involved, some 3 1 / 2 hours; about Mr Keogh's length of service; and the facts that he was not a trouble-maker, and that he was genuinely trying to process a legitimate grievance for one of his members. They set all those matters out in some detail and come to the conclusion that, as we have said, the Respondents' action was unreasonably precipitate. There is not a word in that about the decision of the National Conciliation Panel and it seems to us that in coming to the conclusion which they did in paragraph 10 that the Tribunal were not in fact taking into account and relying on what the National Conciliation Panel had said. No doubt the National Conciliation Panel said much the same thing but that is not a matter on which the Tribunal relied. Paragraph 10 appears to look at the matter simply as at the date of the actual dismissal.At paragraph 11, however, where they give further reasons, the Tribunal say that Mr Keogh was singled out for ultimate dismissal. That does appear to give further reasons which are bound up with what happened after the actual dismissal and obviously takes into account the recommendation of the National Conciliation Panel.In our view those various reasons which the Tribunal gave are all matters well within the Tribunal's discretion and their findings in that respect are not capable of being challenged as a matter of law. For those reasons we dismiss the appeal against the finding that Mr Keogh was unfairly dismissed, and we turn to the question of the orders for re-engagement and for compensation which the Tribunal made.As to the order for re-engagement Mr Stopford says that that was a perverse decision. He says that the Tribunal were informed by him, very clearly, as to the state of the industry in general and of the employers in particular and the effect of the recession, and also the probable consequence that if Mr Keogh was re-engaged some other operative would have to be made redundant. He says that in face of those particular matters the order for re-engagement made was one which no reasonable tribunal, properly directed, could have made. We cannot agree with that. The Tribunal, in paragraph 15 clearly did take into account the difficulties involved; they say that they were inclined to hesitate a long time before making an order for re-instatement or re-engagement against an unwilling employer, but they come to the conclusion that in this instance they think that the circumstances call very strongly for an order for re-engagement. We do not think that that can be stigmatised as being perverse.The final matter concerns the question of compensation. In paragraph 14 the Tribunal consider the question as to whether Mr Keogh should make a contribution, and they come to the conclusion that he was, to a certain extent, to blame for his dismissal and that he should make a 25% contribution. Again, Mr Stopford has suggested that that is wrong and it is perverse. But we see nothing perverse about it, and it was a matter within the Tribunal's discretion, subject to the point we come to in a moment. In fact it appears that in view of the amount involved the question of contribution, having regard to the statutory maximum, is rather academic.However, Mr McMullen, on behalf of Mr Keogh, has put forward a cross-appeal on that point. He says that in a case of this kind where there is a dismissal as a result of industrial action, as a matter of law, it is not possible for an industrial tribunal to order a contribution. For that he relies on a decision in Courtaulds Spinning Ltd v. Moosa [1984] ICR 218. Mr Justice Browne-Wilkinson giving the judgment of this Appeal Tribunal in that case held that Section 74(6) of the 1978 Act, which refers to contribution, could not be applied to reduce the compensation where it was industrial action which constituted a breach of contract. At p.224H he says this:
"We therefore reach the conclusion that it is not possible for an industrial tribunal to hold under section 74(6) that the industrial action in which the employee was taking part (whether or not it was in breach of contract) in itself justifies a reduction in compensation, since an industrial tribunal is unable to determine whether or not, and to what extent, it is just and equitable to make such a reduction."
He goes on to say that it is possible that there would be other conduct which might justify a reduction under Section 74(6), but there is no suggestion in the present case that there was any other justification for a reduction than the industrial action to which we have referred. It may be that it is somewhat academic as to whether we should reverse that part of the Industrial Tribunal's reasoning. It will not affect the actual decision of the Tribunal, because the actual decision of the Tribunal was simply to pay compensation of £10,000. However, we see the force of Mr McMullen's argument that it may have an effect if compensation has to be awarded in the event that the employer does not comply with the order for re-engagement, and it is possible that it may have some effect as regards to the recoupment provisions.Courtaulds Spinning Ltd v. Moosa is not a case which has won universal approval, and Mr Stopford referred us to some remarks by the Editor of "Harvey on Industrial Relations" which perhaps cast some doubt upon its correctness. This is clearly not a case where we should go into the question of its correctness and we have not heard any detailed argument about it. In the circumstances, without really expressing any approval or disapproval of the case, we think we should simply follow it and to say that in our view the Tribunal ought not to have made an order for contribution at all. We do not think that that is going to make any difference to the actual order made by the Industrial Tribunal, and we think it is sufficient just to simply dismiss the appeal and allow the cross-appeal.