Evans v Manweb Plc [1994] UKEAT 546_92_1909

EAT

Evans v Manweb Plc

[1994] UKEAT 546_92_1909 · 1994-09-19

JUDGE HICKS QC:

Mr Evans, the Appellant employee, was employed as a craft attendant by the Respondent employers, Manweb Plc. He was also a member of the EPIU, which was not an independent trade union for the purposes of what was then Section 58 of the Employment Protection (Consolidation) Act 1978, nor was it recognised by the employers, but he was acting as a shop steward of the Transport and General Workers Union, which performed on behalf of the EPIU many of the functions which the latter would have performed independently, had it had full status and recognition.

In the course of police investigations into thefts of electricity there was a search of the Appellant's home, in the course of which equipment belonging to the Respondents was found. The police enquiries also revealed what were alleged to be incriminating entries in a diary or notebook belonging to the Appellant, and the equipment found in his home was equipment which not only belonged to the Respondents but which the Respondents alleged should not have been there.

There were disciplinary hearings into allegations of unauthorised use or possession or theft of company property, unauthorised interference with metering and/or associated electrical equipment and other allegations. Mr McMahon, the Respondents' district manager, who had the conduct of those disciplinary interviews and procedures, dismissed the Appellant at the conclusion of them on 24 January 1991.

The Appellant pursued his rights to appeal procedures within the disciplinary code of the Respondents, but the decision to dismiss was upheld on 8 February and 7 June, as recorded in the Industrial Tribunal's findings, from which it would appear there were two stages of appeal.

There was an application to the Industrial Tribunal on the ground of unfair dismissal, which did not initially refer to trade union membership or activity, and on that basis the hearing of the application began on 10 July 1991, but was not completed on that date. On 19 July 1991, nine days after the first day of the hearing, there was an amendment to the notice of application alleging that the unfair dismissal was for trade union activities and/or membership of the EPIU.

It was common ground before us that since the EPIU was not an independent trade union membership of it was not within Section 58 of the 1978 Act, so that the only relevant trade union point was the Appellant's taking part as a shop steward in the activities of the Transport and General Workers Union.

The Industrial Tribunal dismissed the application and the Appellant's appeal proceeds by direction of this Tribunal, given at a preliminary hearing, on ground 5 of his amended Notice of Appeal only, which is as follows:

"The Industrial Tribunal has erred in law by placing the burden of proof on the applicant under Section 58. The applicant clearly showed that there was another issue at stake, and that there may have another reason, a trade union reason, why he was dismissed. Having raised this issue the burden of proof that this was not the reason for the dismissal rests firmly with the respondents. The Tribunal in their decision have stated that the onus rested with the applicant, and in this respect I submit that they have misdirected themselves in law".

Mr Segal, on behalf of the Appellant, also addressed us on the proposition that the Industrial Tribunal , as he put it, "must do things in the right order", and were in error in that respect also, but in so far as that is a separate ground, and outside ground 5 of the amended Notice of Appeal, it is not as we understand open to him, and in so far as it is part of ground 5 it is taken into account in our consideration of that ground in what follows.

That being the ground of appeal it is necessary to consider the relevant parts of the Industrial Tribunal's Reasons, which I propose to do in part by direct quotation and in part it will be adequate to do it by way of summary. In paragraph 1 the Tribunal sets out the grounds of the Appellant's application and the employer's response to the effect that the Applicant was dismissed for gross misconduct.

Having dealt with the evidence, in paragraph 3 the Tribunal says:

"The issues for the Tribunal are whether the respondent was reasonable to believe that the applicant was guilty of dishonesty and/or in breach of disciplinary rules and it was reasonable to dismiss on that account (not whether he was in fact guilty) and whether the dismissal was on the ground of trade union activities and/or membership".

And then the remainder of paragraph 3 of the Reasons is occupied by a number of findings of fact, of which (a) to (f) set out the history, the relevant parts of which I have already stated and (g) deals with the disciplinary hearings, and it is material to note that near the end of sub-paragraph (g) the Tribunal record that at the disciplinary hearings Mr Evans protested his innocence of all charges and contended he was being interviewed because of his trade union activities, which Mr McMahon, on behalf of the employers denied.

At sub-paragraph (k) of paragraph 3 of their Reasons, the Tribunal sets out the history of what must, we think, clearly be Mr Evans' trade union involvement. The first sentence is stated to relate to Mr McMahon rather than Mr Evans, and that may be right, but the bulk of the paragraph clearly gives Mr Evans' activities and shows that he had attended courses and undertaken other union activities, for which the Respondent had never refused permission, and indeed in September 1990 permission had been granted for him to attend a training course at Eastbourne which was to have taken place after the date of the police raid. It was said that the Applicant had had 100 days' absence in one year, the impression being that they were mainly for trade union reasons.

Sub-paragraph (l) of paragraph 3 deals with the evidence of a Mr Terence Clarke who was formerly the customer accounts manager of the Respondents, and therefore on the management side of the Respondents, but who was called (it is said apparently reluctantly) by the Applicant, Mr Evans.

There was a conflict of evidence between Mr Clarke, called by the Applicant, and Mr McMahon on some points, in particular whether statements were made by Mr McMahon saying that he hoped certain employees, including the Applicant, were involved in the criminal enquiries because they were trade unionists who were thwarting his efforts on network services. As to that, and possibly other matters on which Mr Clarke and Mr McMahon gave inconsistent evidence, the Tribunal preferred the evidence of Mr Clarke and therefore to that extent made findings in favour of the Applicant. But Mr Clarke also said, as recorded by the Industrial Tribunal, that the investigations carried out by the police had nothing to do with the Applicant's position as a shop steward, nor with anything Mr McMahon had said at the briefing and, moreover, that the Applicant was dismissed on grounds relating to his conduct and not for any trade union activity.

Having repeated that they preferred the evidence of Mr Clarke to Mr McMahon as to whether Mr McMahon had ever said he was "out to get the EPIU officials" the Tribunal continue:

"...... but in that respect we prefer the evidence of Mr Clarke particularly that in his experience as a manager the applicant's involvement as a shop steward played no part in his dismissal which was based purely on the evidence produced on the hearing on 21 January 1991 [that being the disciplinary hearing]".

In paragraph 4 of their Reasons the Tribunal say that an unfair dismissal claim has to be dealt with under Section 57 of the 1978 Act (as amended) and they then say:

"It is for the employer to show the reason for the dismissal and that it was an admissible reason within the Act"

And then they summarise the statutory provisions as to what are admissible reasons and go on to summarise the provisions of Section 57(3) of the Act.

Paragraph 5 reads:

"In the present case the reason for the dismissal was quite clear. It was because Mr McMahon entertained a reasonable suspicion amounting to a belief in the guilt of the applicant's breaches of the Disciplinary Rules".

Then in paragraph 6 the Tribunal go on to deal with what are commonly called the Burchell guidelines as to the way in which the question of reasonableness should be approached, and no criticism is made of that.

And then in paragraph 7 they start:

"The applicant also contended that his dismissal related to his trade union membership, in particular his membership of EPIU".

And they refer to the evidence about that, and in particular to his activities as a shop steward and the Respondents' having given him leave of absence to attend the Transport and General Workers Union shops stewards' training course in Eastbourne, and that paragraph concludes with this sentence:

"If the applicant was able to satisfy the Tribunal that the dismissal was on the ground of trade union membership it is to be regarded as being an unfair dismissal".

Paragraph 8 summarises the submissions on behalf of the Applicant, including those relating to the trade union point, and similarly paragraph 9 summarises the submissions on behalf of the Respondent employer, including the sentence:

"He submitted that the applicant had not discharged the burden of proof on him under Section 58 of the Employment Protection (Consolidation) Act 1978".

Paragraph 10 reads as follows:

"We are satisfied that the applicant was not dismissed on the ground of union membership. As stated above, we accept Mr Clarke's evidence that Mr McMahon expressed the hope that the applicant was one of those concerned in the Police and respondent's investigations, which was clearly imprudent but nevertheless was of itself insufficient to discharge the burden of proof on the applicant under Section 58. It was also relevant, however, to the complaint that the applicant was unfairly dismissed, under Section 57. We are not, however, satisfied that Mr Clarke's evidence and the hope expressed by Mr McMahon tainted the totality of the evidence on which the dismissal was based".

And the rest of that paragraph on the face of it deals with the Burchell or Section 57(3) questions as to which, as I have said, there is no complaint.

Paragraph 11 reads:

"In all the circumstances, therefore, we are satisfied that it was reasonable for the respondent to take the view that the applicant had been guilty of gross misconduct justifying dismissal and the dismissal was reasonable and, therefore, fair. In announcing our decision we made it clear that we were not making a finding that the applicant had, in fact, been guilty of theft, which is not the issue for this Tribunal. What we are saying is that the respondent's representative was reasonable to believe that he was guilty of dishonesty and the breaches of the Disciplinary Rules, and in the light of that belief was entitled reasonably to dismiss the applicant on that ground, and it was that and not his trade union membership which was the ground for dismissal".

And that is the end of the substantive part of the Reasons.

The law is not in dispute. Section 57(1) of the 1978 Act provides:

"In determining for the purposes of this Part whether the dismissal of an employee was fair or unfair, it shall be for the employer to show -(a) what was the reason (or, if there was more than one, the principal reason) for the dismissal, and

(b) that it was a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held".

Subsection (2) sets out the reasons falling within that subsection and referred to in subsection (1)(b) and I do not think I need read it.

Subsection (3) deals with the question whether, if those hurdles have been overcome by the employer, the dismissal was fair or unfair and I do not propose to read that because, as I have said, no complaint is made of the Tribunal's treatment of that issue.

Section 58 of the Act has since been repealed, but for the purpose of the Appeal before us both parties were content to proceed on the basis that it was in substantially the same terms as the present Section 152 of the Trade Union and Labour Relations Consolidation Act 1992, which was conveniently before us, and subsection (1) reads:

"For purposes of Part V of the Employment Protection (Consolidation) Act 1978 (unfair dismissal) the dismissal of an employee shall be regarded as unfair if the reason for it (or, if more than one, the principal reason) was that the employee - (a) was, or proposed to become, a member of an independent trade union, or (b) had taken part, or proposed to take part, in activities of an independent trade union at an appropriate time"

And (c) does not add anything for the purposes of this Appeal.

As Mr Segal submitted, therefore, the only relevance of Section 58 is, as it were, to dispose of or pre-empt the issue of unfairness if membership or activities in relation to a trade union within the terms of Section 58, as it then was, were the reason or the principal reason for the dismissal and that issue of course - whether they were or were not - is part of the issue raised by Section 57(1), where the employer has the onus of showing what was the reason and that it was within subsection (2).

The only relevance of Section 58 being to that matter, it impinges on the onus of proof only to this extent, that given the existence of Section 58 (and, indeed, for more general reasons) there is what is called an evidential onus on the employee to show that there is an issue for consideration as to whether that was the reason. Once that has been shown, the legal onus of the employer under Section 57(1) of showing what was the reason (and that would then include that it was not a Section 58 reason) remains and governs the way in which the Tribunal must approach the issues.

On that basis it is clear that the Industrial Tribunal were right in paragraphs 4 and 5 of their Reasons, in the sentence at the beginning of paragraph 10:

"We are satisfied that the applicant was not dismissed on the ground of union membership",

and in the final words of paragraph 11:

"It was that [that is to say the belief in dishonesty] and not his trade union membership which was the ground for dismissal".

All those statements are unexceptionable and show the Industrial Tribunal approaching the question of who has to prove the reason, including the elimination of trade union membership or activities as the reason or principal reason, correctly, and although Mr Segal made some criticisms of paragraph 3, we think that read fairly and in conjunction with paragraph 1 and indeed with the whole of the Reasons (as I think he was disposed to concede) that would not advance his case materially.

On the other hand it seems to us equally clear that two passages were plainly wrong. At the end of paragraph 7 the Tribunal say:

"If the applicant was able to satisfy the Tribunal that the dismissal was on the ground of trade union membership it is to be regarded as being an unfair dismissal"

That plainly implies that there is something for the Applicant to satisfy the Tribunal of in relation to the reason for dismissal and that, for the reasons I have outlined, is wrong. Secondly in paragraph 10, apparently adopting the way in which it had been submitted on behalf of the Respondent, the Tribunal say in relation to their findings on Mr Clarke's and Mr McMahon's evidence that Mr McMahon's conduct, although imprudent, was nevertheless of itself insufficient to discharge the burden of proof on the applicant under Section 58, which again seems, on the face of it, to be a reference not to the comparatively slight evidential onus which truly rests on the applicant under Section 58, but to the onus as one of showing that that was the reason for dismissal.

What then is the result in that state of affairs? Mr Segal referred us to the case of Maund v Penwith District Council

[1984] ICR 143

. That was an application brought by the chief architect of a District Council and the issue was as between redundancy, which was the ground relied upon by the employers, and trade union activities, which was the case put forward by the applicant. As a result of decisions of the employers to put out the development of the last available building land in its area to private tender the employers found themselves with no need for an architectural department, or for the services of the architect, and dismissed him, ostensibly on the basis of redundancy.

The relevant passages in the judgments begin with the Judgment of Lord Justice Griffiths at page 148, where after setting out in more detail than I have that background he says:

"On the face of it, this was a classical redundancy situation. As the result of a decision to go out to private tender, there was no further need for the council to employ the services of an architect. But the employee claimed that things were not as they seemed. In a two-day hearing before the industrial tribunal he gave and called evidence in an attempt to show that the real or principal reason for his dismissal, to use the language of the Employment Protection (Consolidation) Act 1978, was the council's objection to his trade union activities, which led them to engineer a redundancy situation as a pretext for dismissing him".

Then his Lordship summarises the effect of Section 57(1) and (2) of the Act and Section

58 and goes on:

"The legal burden of proving the reason for the dismissal is, by the wording of the Act, placed on the shoulders of the employer. This is obviously sensible; the employer knows why he dismissed the employee, but the employee may not".

And then he refers to the Northern Ireland case of Shannon v Michelin (Belfast) Ltd

[1981] IRLR 505

and continues:

"As a general rule there should be little difficulty in the employer discharging this burden; I should have thought that there will be very few cases when, after a full investigation of the facts, a tribunal will be left in any real doubt as to the reason for the dismissal, especially when one bears in mind that the employer's burden is the civil, not the criminal,burden of proof. But in the exceptional case, in which the employer cannot satisfy the tribunal as to the reason for which he dismissed his employee, the dismissal must be regarded as unfair.

If an employer produces evidence to the tribunal that appears to show that the reason for dismissal is redundancy, as they undoubtedly did in this case, then the burden passes to the employee to show that there is a real issue as to whether that was the true reason. The employee cannot do this by merely asserting in argument that it was not the true reason; an evidential burden rests upon him to produce some evidence that casts doubt upon the employer's reason. The graver the allegation, the heavier will be the burden. Allegations of fraud or malice should not be lightly cast about without evidence to support them.

But this burden is a lighter burden than the legal burden placed upon the employer; it is not for the employee to prove the reason for his dismissal, but merely to produce evidence sufficient to raise the issue or, to put it another way, that raises some doubt about the reason for the dismissal. Once this evidential burden is discharged, the onus remains upon the employer to prove the reason for the dismissal".

And then he goes on to deal with Section 57(3), which is as I say causes no controversy in this case.

At page 150

Lord Justice Griffiths says that:

"the dispute between the parties centred on whether the Industrial Tribunal had decided the matter under Section 57(1) and (2), that is to say what was the reason for the dismissal and was it within the list of admissible reasons or whether they decided under Section 57(3)"

We think it is important to see against that background what Lord Justice Griffiths went on to say, having referred to relevant parts of the Reasons of the Industrial Tribunal in that case. He said:

"To my mind, these passages and many others, show beyond peradventure that the tribunal was applying its mind to the real issue raised in this case, namely, whether or not the employee was dismissed for redundancy or whether redundancy was merely the pretext that cloaked his dismissal because of his union activities.

This, then, brings one to the difficulty in accepting the decision of the industrial tribunal in its present form. In paragraph 21 the tribunal said:

"the burden rests on [the employee] to satisfy us that the principal reason for the resolution of the council was something other than appears on the official record".

This appears to be putting the burden on the employee to establish the principal reason. They returned to the same point in paragraph 25, when they said:

"... The allegation which is made against the councillors that they voted out of personal malice at the expense of their ratepayers is a very serious one, and we are unable to find that it is proven".

And at the bottom of page 151 he continues:

"I have given anxious consideration to the possibility that the tribunal was referring only to the evidential burden as opposed to the legal burden of proof in the passages I have cited. But I have come to the conclusion that it would be straining the language beyond permissible limits to reach this conclusion.

We are therefore faced with the fact that the tribunal misdirected themselves on the burden of proof. This would not necessarily be fatal if the evidence was such that they would inevitably have arrived at the same conclusion even if they had directed themselves correctly. In such a case it would be a waste of time and money to send the decision back for reconsideration by the tribunal. We have been urged by Mr Buxton that this is such a case"

And then he refers to the facts.

"For a time I was much impressed by the view that it would be a waste of time to send this case back. But when there is an error in law on the burden of proof it requires a very strong case to say that it can have had no effect on the decision".

And then again he refers to the detail of evidence and continues:

"Furthermore, the tribunal itself said: [paragraph 16 of their Reasons] "We have found the case one of great difficulty and we are anxious to make clear that we have considered all the evidence which was put before us over two days".

I have accordingly come to the conclusion that it would not be safe to let this decision stand without reconsideration by the tribunal and that it must be remitted to the tribunal for further consideration".

Lord Justice Purchas, who agreed, said:

"Regrettably, but in agreement with Griffiths L.J., I have come to the conclusion that it is clear from the paragraphs, and in particular from those extracts which he has already cited in the judgment just delivered, that it is not possible to say that the question being considered by the industrial tribunal was whether the employee had established the existence of the issue, rather than the fact that the competing reason was the principal reason".

And a little later:

"I also have been anxious to see whether the decision of the industrial tribunal could be preserved on the basis that the material questions which would arise on both issues, namely the existence of the issue itself and also as on the determination as to which was the principal reason, have been at length considered by, and canvassed before, the industrial tribunal. But after anxious consideration I have come to the conclusion that the wording of paragraphs 19 and 25 particularly, to which Griffiths L.J. has referred, is such that it would not be reasonable to preserve the decision of the industrial tribunal on the basis that what they were in fact considering were proper matters and that the question of the onus of proof correctly described the decision as to the issue, but was incorrectly described as the question of which was the principal reason is apparently overlooked".

And

Lord Justice Stephenson said at page 157:

"But I have reluctantly come to the same conclusion as Griffiths and Purchas L.J.J., that the industrial tribunal did transfer the burden of proving this grave charge to the employee. I find that to be the natural interpretation of their decision, particularly paragraphs 21 and 25, and I do not think they would have found the case one of great difficulty after considering all the evidence over two days, as they said in paragraph 16 of their decision, if they had been concerned merely with the question whether the evidence raised an issue as to the bona fides of the council's June resolution and the resolution of October which followed it".

Where, as here, the standard of proof is the civil standard of balance of probability, an issue of legal onus by its nature affects the outcome only if on the relevant issue the tribunal of fact finds itself either wholly without evidence or in doubt as to where the weight of evidence lies. On that basis there is no doubt in our view that no question of onus properly arose here. The Industrial Tribunal on ample evidence found in the clearest terms, after setting out in paragraph 3 their findings of fact as to the trade union position as well as all the other issues, that the reason for dismissal was the employer's belief in the employee's gross misconduct. That way of looking at the matter gains some support from what

Lord Justice Griffiths said in Maund's case at page 152C:

"But when there is an error of law on the burden of proof it requires a very strong case to say that it can have had no affect on the decision".

And also from his reference, three or four lines later, to the Tribunal's finding that they had found the case one of great difficulty, because the relevance of that can only, to our mind, be that the question of onus is much more likely to have affected the outcome when the Tribunal itself says that it found the case one of great difficulty and therefore, presumably, one very close to the borderline of balance of probability. It also gains some support from what Lord Justice Stephenson says at page 157, where he also refers to that reference by the Tribunal to finding the matter of great difficulty.

We do not, however, decide that that is the correct approach or dispose of the appeal on that basis, but are content to treat the question before us, as Mr Segal submitted was correct, on what to our minds is clearly the stricter test posed by

Lord Justice Griffiths at page 152A where he said:

"This would not necessarily be fatal if the evidence was such that they would inevitably have arrived at the same conclusion even if they had directed themselves correctly".

We interpose that it is for its statement of principle that we look to the case of Maund v Penwith District Council

[1984] ICR 143

. Mr Segal sought to suggest that on its facts the present is a stronger case but we regard that as irrelevant as well as doubtful, and we do not therefore take time in analysing whether the differences between the facts of the two cases tell one way or the other. There are certainly, to say the least, elements in the distinction which to our mind would point the other way, but it is not for its facts that Maund is important to us; it is for its statement of principle, and as I have said we are content to approach it on what seems to us to be the highest test of the possible variations in the way it is put in the judgments, that is to say, "would the Industrial Tribunal here inevitably have arrived at the same conclusion even if they had directed themselves correctly"? For that purpose the Tribunal's unchallenged findings as to the evidence of Mr Clarke are, in our view, crucial. He was called by the Appellant, he contradicted Mr McMahon on material points of Mr McMahon's evidence and was preferred, but he also said in passages which the Tribunal either expressly or, we think, clearly by implication accepted, that the investigation carried out by the police had nothing to do with the Applicant's position as a shop steward, nor with anything Mr McMahon had said at the briefing, and that the Applicant was dismissed on grounds relating to his conduct and not for trade union activity, and having repeated that they preferred the evidence of Mr Clarke they go on:

"particularly that in his experience as a manager, the Applicant's involvement as a shop steward played no part in his dismissal"

. The word "particularly" in that context is we accept odd, because it introduces a finding in which Mr Clarke does not contradict Mr McMahon, but that is in our view plainly an infelicity of expression only and does not throw the sense of the findings into doubt.

The Industrial Tribunal could not in law have found membership of the EPIU to be within Section 58, and the facts found in paragraph 3(k) and elsewhere in their Reasons showed clearly had the Respondent had freely permitted extensive activities by the Appellant on behalf of the Transport and General Workers Union and absences for that purpose. In those circumstances, and also taking into account, as we think is right, the Tribunal's repetition at the end of their Reasons of the correct test, namely a finding that the reason for the dismissal not only was the Respondent's belief in the Appellant's gross misconduct, but also it was that and not his trade union membership, we are satisfied that even had they not, in the passages which I have quoted earlier which contained misdirections, misdirected themselves, they would inevitably have arrived at the same conclusion had they at those points not only omitted those misdirections but inserted the correct directions which they had set out elsewhere.

We are satisfied of that and we therefore dismiss this appeal.

[ this page has been retyped after receiving amendments]

in fact finds itself either wholly without evidence or in doubt as to where the weight of evidence lies. On that basis there is no doubt in our view that no question of onus properly arose here. The Industrial Tribunal on ample evidence found in the clearest terms, after considering setting out in paragraph 3 their findings of fact as to the trade union position as well as all the other issues, that the reason for dismissal was the employer's belief in the employee's gross misconduct. That way of looking gained some support from what Lord Justice Griffiths said at page 152(a) where he says that would not necessarily be fatal if the evidence was such that they would inevitably have arrived at the same conclusion even if they had directed themselves correctly and

[ note from Chairman] - sorry - that quotation is not the quotation I intended to give at that point - let me start that sentence again]

That way of looking at the matter gained some support from what Lord Justice Griffiths said at page 152(c) when he said that " when there is an error of law on the burden of proof it requires a very strong case to say that it can have had no effect on the decision" and also from his reference, three or four lines later to the Tribunal's finding that they had found the case one of great difficulty because the relevance of that can only to our mind be that the question of onus is much more likely to have affected the outcome if the Tribunal itself says it found the case one of great difficulty and therefore, presumably one very close to the borderline of balance of probability. It also gains some support from what Lord Justice Stephenson said at page 157 when he also refers to that reference by the Tribunal to a finding that the matter of great difficulty. ......................................................etc

[this page continues up to "This would not necessarily be fatal if the evidence was such that they would inevitably have arrived at the same conclusion even if they had directed themselves correctly".

Judge Hicks 5.10.94

Thank you for your note asking me to phone you, I thought I could explain better by sending you a 2nd draft with explanations as below:

Apologies re: quotes from Maund v Penwith District Council - [1984] ICR

At page 12 of original yellow draft I quoted from page 151(A) instead of page 151(E) so it got rather confusing (they both started with: "The burden rests upon.. etc")

I have put my amendments on the original yellow draft in pencil.

As to page 14 of the original yellow draft please find a re-type of page 14 where I have included your note. You will see that the quote I have typed in is the second one you gave.

I have done a second yellow draft - hope this is okay.