North v Rhodes & Anor [1994] UKEAT 268_93_1612

EAT
North v Rhodes & Anor
[1994] UKEAT 268_93_1612 · 1994-12-16
MR JUSTICE HOLLAND: This is an appeal by Mr Raymond North, as Applicant, from a decision of an Industrial Tribunal sitting Leeds on 18 December 1992.On that day the unanimous decision of that Tribunal was that the Applicant had been unfairly dismissed and, second, that the Applicant had contributed 100% to his dismissal, so that they made no award of compensation. The full reasons for that decision were sent to the parties on 19 March 1993. It against that decision that the appeal is mounted to this Tribunal.The essential facts are as follows. The Respondents are a coach company who run public service vehicles. The Applicant is a public service vehicle driver now aged 41. On 28 April 1990 he entered the employment of the Respondents as one of their drivers and thereafter drove a public service vehicle.The subsequent history, so far as material, is readily apparent from the documents that were before the Industrial Tribunal and which are now before us. We need only come to 1992 and, initially, to 27 February of that year. By a letter of that date from the Respondents to Mr North a number of contraventions of company and PSV regulations were drawn to his attention, such including the failure to supply his audit roll at the end of his duty. The letter concludes:
"I accept to your credit that you are a smart and polite employee but I cannot allow these constant misdemeanours to continue.

Please take this as a serious warning."

It would seem that on 1 April 1992, a member of the public complained about him and in the result a further letter was sent by the Respondents to him dated 10 April. It reads:
"Further to your interview with me regarding your misconduct. This misconduct being the taking of money from your employer during your duty as a driver. As you know, I could dismiss you for this.
I have, however, decided to give you the chance to prove that this was not what you would normally have done and therefore I will keep you employed.Please remember that to have a good working relationship, I must have complete honesty and loyalty from my staff.It goes without saying that there will be no further warnings. I consider this matter now closed."Unhappily, there was a further incident on 6 July, which led in its turn to the sending of a further letter by the Respondents to the Applicants, that is, the letter of 8 July. That read:
"Dear Mr. North,
On Monday 6th July, 1992 you left your vehicle unattended at Yeadon Morrisons. You were due to finish your shift and should have waited for a relief driver. Michael Rhodes was on [sic] route to take over your vehicle when he saw you walking back to the Garage. Your vehicle was left with passengers on board, the doors closed and the engine running. This was dangerous and also against regulations.When you received your last warning you were told that it was a "Final Warning". Since that date you have once again issued a 10p ticket and charged 48p - this incident was whilst you were on the W5 on the 14th May 1992. Should you wish to see this ticket we do have it on File.In view of the seriousness of the situations outlined above I have no alternative but to suspend you for one week. This suspension will commence when you finish your shift on Saturday July 11th, 1992. Your duties will re-commence on Monday 20th July, 1992.

Any further incident will result in your dismissal."

To that letter, the Applicant himself replied. His letter is dated 9 July and reads:

"Dear Mr Rhodes

On Monday 6th July 1992 I admit that at 14.05, there was no relief driver at Yeadon Morrisons. I closed the doors leaving passengers on board, but I did not leave the engine running, I remember turning it off. The reason for leaving the vehicle so suddenly, is I had somewhere important and very serious to go after receiving a phone call whilst at home on my break. Not been [sic] given the chance to explain I find I have received another letter."He signs it.On Saturday, 11 July, there was a meeting between the Applicant and Mr Michael Rhodes of the Respondents. It seems that in the course of the meeting, Mr Rhodes handed over a pretyped letter. That is dated 11 July and reads:
"Further to your letter of the 9th July, 1992. I have noted your comments. I do feel however, that you had adequate opportunity to get in touch with me, by telephone or in person before I sent you a letter.
On two occasions this week your audit roll has not been handed in with your cash. You have already received a number of verbal warnings on previous occasions regarding your audit roll.I have no alternative but to give you two weeks notice as from today 11th July, 1992. You will not be required to work your notice. All monies due to you will be available for collection on Thursday 23rd July (two weeks wages in lieu of notice plus holiday pay). This weeks wage will of course be paid to you on Thursday 16th July."Considering this particular incident, the Industrial Tribunal, having heard evidence, dealt with it in this way: it found that the meeting in question lasted about half-an-hour and it then went on to put the matter thus:
"7. Therefore having sent him a letter of suspension on 8 July, without the opportunity to explain on 11 July he saw him, dismissed him and gave him a letter of dismissal, giving the reasons for dismissal as being the incident of leaving the bus on 6 July. The only additional matter which seems to have persuaded Mr Rhodes to dismiss instead of continuing with the suspension is the matter of 2 audit rolls which we do not find to be a matter which in itself justifies dismissal. In any case the applicant was not asked for an explanation. Therefore from a suspension on 8 July, suddenly on 11 July it becomes a dismissable offence."
Thus it is that the Industrial Tribunal, having heard the evidence, appears to be finding that that interview was centred upon not the audit rolls but the bus incident and Mr North's reaction to it, as expressed in the letter of 9 July. At all events, the meeting concluded with his dismissal and the application to the Industrial Tribunal raised a complaint that such dismissal was unfair.To this Tribunal the first concern would appear to be as to the conduct that was relied upon as justifying dismissal. On the face of it there were four possible options. First, there was the incident of 6 July, that is, the bus incident. Second, there was that which was relied upon in the letter, namely, the audit roll incident. Third, as was surmised in the notice of application, there was the fact of disagreement on the part of the Applicant with Mr Rhodes, that is, the disagreement expressed in the letter of 9 July. Fourth, there was the potential for the combination of two or more of these reasons.In the event, the Industrial Tribunal tackled the problem in paragraphs 7, 8 and 9 of their Full Reasons. We have already quoted in full paragraph 7. Turning to the remaining two, they read as follows:
"8. There had been previous complaints about the applicant. A customer had complained about him passing her at a bus stop. Thee were another 2 complaints about being charged £1 for a fare and receiving a ticket for less. These were not grounds for dismissal and so we have not taken them into consideration in reaching our decision. There was no evidence that they were deliberate, they could have been mistakes. They were not grounds for dismissal so far as Mr Rhodes was concerned, because if they had been they would have been or should have been included in the letter as reasons for dismissal.
9. So we are left with the dismissal on the basis of the applicant leaving the bus on 6 July and the 2 till rolls which had not been handed in during that latter week."The Industrial Tribunal expressly has found that the reasons for the dismissal were a combination of the two that we have postulated, that is, a combination of the bus incident and the audit roll incident. It was necessary for the Tribunal then to proceed as guided by s.57 of the Employment Protection (Consolidation) Act 1978 and they tackled this task in paragraphs 10 and 11 as follows:
"10. In those circumstances, although there was a ground for dismissal under section 57(2)(b) of the Employment Protection (Consolidation) Act 1978, we do not find that the dismissal was fair in the manner in which it was carried out because Mr Rhodes decided that the correct action was suspension until 20 July when he would re commence [sic] duty and we do not see any grounds to justify 3 days later making it a ground for dismissal. What the applicant did justified suspension although he should have been given a chance to explain. If he had been dismissed on 8 July we could not say that it was not within the band of reasonable responses to dismiss because it was a serious offence. However Mr Rhodes did not dismiss and the applicant was entitled to take the view that having received the letter on 8 July he was subject to suspension until 20 July and then to see him on 11 July and change his mind and say it was dismissal was unfair in the manner in which that was done.
11. It has been put by the applicant's representative that the real reason was because when the applicant went in to collect his wages on 16 July he asked to appeal, but we find no evidence of that. It was after the date of dismissal but the applicant claims he had written to ask for an appeal. It has also been raised by the applicant's representative, Mr Scott, that there was no proper procedure for appeals and indeed there was not, but an appeal in a business of this sort is academic because there was no one to whom he could appeal, and we do under section 57(3) of the Employment Protection (Consolidation) Act 1978 have to have regard to the size and administrative resources of the undertaking. But having considered what the applicant did in leaving his bus unattended had Mr Rhodes gone about it in a different manner he would have been justified in dismissing the applicant for that alone. But the manner in which the dismissal was carried out renders it unfair but we find the applicant was 100% to blame for doing what he did and therefore we make no award of compensation."This Tribunal has carefully considered these two paragraphs in conjunction with the findings succinctly set out and already quoted as paragraph 9. Our reading of the approach of the Industrial Tribunal is as follows: first, on the basis of paragraph 9, they were in a position to find and did find that the employer had shown the reason as is required by s.57(1) and the reason was that which was set out in subsection (2)(b) that is, it was a reason which related to the conduct of the employee.Turning then to subsection (3), we read the findings of the Industrial Tribunal to be these: first, dealing with the bus incident, dismissal was within the range of responses of a reasonable employer but not on 11 July, such being after an earlier decision to suspend and not to dismiss, there being no intervening justification for the revocation of that earlier decision. Second, we find that the Industrial Tribunal is saying that the audit rolls do not of themselves give rise to dismissal as being within the range of responses of a reasonable employer.In summary, therefore, the dismissal was unfair on 11 July, first because the bus incident was no longer within the range of responses of a reasonable employer and, second, because the audit roll incident never was within that range.Having thus analysed that part of the case, one then comes to the consequences. S.74, sets out the statutory framework for the calculation of the compensatory award. In the light of that last analysis of the reasoning of the Industrial Tribunal, this Tribunal focuses upon s.74(1), which reads:
"... the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer."
In approaching the application of those provisions to the instant circumstances, we would emphasize that on the findings of the Industrial Tribunal, this is not one such case in which it could be said that but for some slip in procedure the Applicant would have been dismissed on the 11 July. The findings are quite clear: there was no justification for his dismissal as at that date. Thus it is that there is prima facie a loss that is sustained by him in consequence of the dismissal on that date, which loss is attributable to the action taken by the employer, that is, to treat an offence hitherto regarded as justifying a suspension as one that justified a dismissal. What then is the prima facie loss? Prima facie, it is the wage loss from that date rising from the loss of employment, that wage loss being reduced in the circumstances of this case, by three factors.The first factor is that he would in any event have been on suspension during the following week, that is, he would not have been earning a wage during that week. The second factor is that in the event he was paid wages in lieu for a short period. The third, and important factor, is that having regard to the history already set out the Applicant had poor prospects as at 11 July for sustained employment with the Respondents. It would be noted that by the earlier letter of 27 February, he had been given a "serious warning", by the letter of 10 April he had been given a final warning and by the letter of 8 July, he had been again given a final warning and his situation was in no way strengthened by what had happened on 11 July. Thus it is that, as at 11 July, those continued employment prospects with the Respondents were poor.One can put the matter thus: one further slip was plainly likely to justify dismissal and the Applicant was a man who demonstrated a propensity to slip. It is manifest that had a calculation been done pursuant to s.74(1) whilst it would undoubtedly have produced a figure in favour of the Applicant, it would inevitably have been a modest figure.We then turn to s.74(6), which reads:
"Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."
We would underline the words "to any extent".Turning to the extent to which the Applicant caused or contributed to the dismissal, it seems plain on the findings of the Industrial Tribunal that he did not directly contribute to the dismissal at all. There is no finding that anything that he did made a direct contribution to the conduct of the Respondents on 11 July. The findings of the Industrial Tribunal are, indeed, to the reverse, hence their overall finding that dismissal was unjustified on that date. However, the history plainly demonstrates that indirectly he had made a substantial contribution to that dismissal. In particular, there are the facts of the bus incident itself and his conduct on that occasion. Further, there is the other conduct which appears from the history which certainly made a more tenuous contribution to that which happened on 11 July. It is, therefore, on that analysis that one approaches the first issue raised by subsection (6) and that is, whether there was any causal contribution to the dismissal by the complainant. It is then that one proceeds to the second issue raised by subsection (6) and that is what proportion could be considered to be just and equitable by way of a discount, having regard to the finding already made.That having been the analysis of the appropriate approach under section 74, one then turns to the similar approach pursuant to s.73. There the amount of the basic award falls to be calculated in accordance with the provisions of the earlier part of the section.

(b) , it reads:

"Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) ... was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly."
We understand from Mr McMullen that application of s.73 to the instant facts would have produced an initial calculation of a basic award, albeit one in a modest sum. It would be with respect to that award that consideration should be given to the provisions of (7)(b), bearing in mind that, having regard to the wording of that subsection, that is there only one step in the approach and not two, in that that subsection does not raise any issue as to causation.Having then analysed the approach to the instant problem dictated by s.74 and s.73, we come to the finding of the Industrial Tribunal already cited at the latter part of the last sentence of paragraph 11. It is manifest that this Tribunal cannot be satisfied that that terse finding reflected a proper direction as to the issues raised by law, the more so because the 100% apportioned, pursuant to s.74(6) and presumably s.73(7)(b), plainly needs careful elucidation to be sustained as a decision that reflects proper identification of the issues raised by law and proper identification of those parts of the evidence that bear upon those issues.Thus it is that at this stage this Tribunal finds itself driven to find that the Applicant has identified a question of law, and that that question of law is one that has to be resolved in his favour. We cannot be satisfied that the Tribunal, at this stage, made adequate directions as to law, that is, directions reflecting the analysis of s.74 and s.73, that we have already set out in this judgment. Thus it is that we allow the appeal.We then turn to the way in which we propose to dispose of this matter. The initial reaction of this Tribunal was to remit the matter to the Industrial Tribunal for an appropriate assessment to be made pursuant to those sections. However, this Tribunal reflected, first, that the decision under appeal is no less than two years old and that any such course would introduce further delay into this matter. Second, this Tribunal, dealing with s.74, was conscious that both parties were represented and, if we may say so, represented by experienced persons, yet further there were, as far as we could discern, three elements missing which, if provided, would give the key to resolving the issue of compensation by way of mutual agreement. The first element was the period of forward projection for the purposes of s.74(1), that is, the forward projection as to the continued employment prospects with the respondents. The second element was the proportion of discount appropriate to s.74(6). The final element that would be required, would be the like proportion of discount pursuant to s.73(7)(b).This Tribunal anxiously considered whether it could provide those missing pieces of material. We do have the advantage in this case of a clear history emerging from the documents before us. We have further the advantage of the findings by the Industrial Tribunal. The view of this Tribunal is that it can and should provide those missing elements. Thus it is this Tribunal proposes to deal with the case itself by inviting the parties to agree a compensatory award with the period for the purposes of s.74(1) being six months and, with the discount for the purposes of s.74(6) being 60%. We considered further s.73(7)(b), having regard to the fact that we are obliged to make a discount which is just and equitable, which in its turn must have some relationship with the size of the award and, having regard further to the fact that we are told and we would expect that the basic award is modest. We would not propose to make any discount pursuant to s.73(7)(b).That is, therefore, the way in which we presently leave this appeal but we would invite Mr McMullen and Mr Kirkbright to confirm to us that, with those key elements, there are prospects.