North Essex Health Authority v Pearce [1995] UKEAT 1001_93_2305

EAT
North Essex Health Authority v Pearce
[1995] UKEAT 1001_93_2305 · 1995-05-23

JUDGE HULL QC:

This is an appeal to us by North Essex Health Authority against a decision of the Industrial Tribunal sitting at Bury St Edmunds under the chairmanship of Mr Cassel, with two industrial members, who held in favour of the Respondent, Mrs Marie Pearce, that she had been unfairly dismissed by the Appellants, the employers.She worked for many years for the Health Authority as a telephonist and receptionist at their offices at Witham in Essex. Her employment began on 24 June 1974. Her employment, although long-standing, was not always happy. She had suffered a good deal of ill-health apparently, and she had had a slightly difficult relationship with her immediate superior. That is not directly relevant but it does suggest that the employers will have approached the question of her eventual retirement, as it was hoped it would be, with a certain amount of caution. She finally left the employment of the Health Authority on 7 March 1993.What had happened was that there had been "negotiations" between the parties (as they were called) although the Industrial Tribunal found they rarely added up to negotiations. As a result of that, the two protagonists, Mrs Pearce on the one side and Miss Smith on the other side, were in the view of the Tribunal at cross-purposes. Putting it very shortly, the employers thought that they had Mrs Pearce's agreement to take early retirement, that of course would be a resignation or a retirement by agreement, whatever one likes to call it, but most certainly not a dismissal. That was the view on their side.So far as Mrs Pearce was concerned, there had been suggestions (I had better use that word rather than negotiations because the Tribunal disapproved of it) that she should retire and indeed terms had been to some extent discussed, but she had never agreed to retire. At best, the matter could be said still to be in the realm of negotiation.There came a time when a letter was sent dated 1 March 1993 to Mrs Pearce from Mr Johnson the Chief Executive. It is a letter which to us, at any rate, appears to be in some sense ambiguous. The letter says:"This is to confirm that, due to the reorganisation of the reception and the post room your post is to be declared redundant: you are therefore being offered early retirement. Please confirm your acceptance of this offer in writing".That might very well be construed as an "offer". It says it is an offer. However, it goes on to talk about "pay in lieu of notice" and says:"Your last day of service is 1st March 1993".That was the very day on which the letter was written. Mrs Pearce said she was flabbergasted to get that letter and the Tribunal in due course decided that she was indeed flabbergasted, and not insincere in saying that. She, for her part, said that that letter was a letter of dismissal and that was the first matter that the Industrial Tribunal had to consider; indeed, the main matter.They set out the facts at considerable length. They heard evidence from the parties and most important, in this case, they had had the advantage and the parties had had the advantage that both sides were represented by experienced Counsel. Mr Taylor, who appears before us today, appeared for Mrs Pearce and Mr Ciumei, who is experienced in this field, appeared for the authority. The full reasons of the Industrial Tribunal start at page 11. I will not read them all but I ought to read part of them. They say in their first paragraph:"1 .... Mr Taylor .... put the case succinctly: was there an agreement for her to leave or was she told to leave. ....?".And they then go on to consider the facts. They record discussions between Miss Wendy Smith and Mrs Pearce. They say:"3 (4) .... A discussion took place as to a financial package that could be provided for the applicant if she left her employment voluntarily. We were satisfied that the discussions encompassed both early retirement and redundancy. Following their return to their place of work Miss Smith provided the applicant with figures based on the calculation of another or others".They go on to find some further facts and then they say, "On 1 March 1993 the applicant was handed a letter by Miss Smith". They record what is in that letter, the details of the financial benefits which are very similar to those in a note that had been provided on 29 January, following the discussion I have mentioned.
"3 (10) On 2 March 1993 a telephone call was made by the applicant to the respondents. We accept that Miss Smith was elsewhere and the applicant spoke to a junior member of staff.
(11) On the same day .... a further letter was sent by the Chief Executive, Mr Johnson. ....".This was in consequence of the phone call and the effective date of termination was altered from 1 March to 7 March as the leaving date.Then Mr Ciumei made a number of submissions about what had happened. The substance of it was that he was saying, "All the facts here, including Mrs Pearce's behaviour, are quite inconsistent with the idea that she was dismissed. She negotiated; she even negotiated as to the last few days before leaving the Company when she received this letter. The letter itself is quite plainly an offer which may be accepted and the evidence, he says (referring of course to the evidence of Miss Wendy Smith) is that she did accept what was on offer".Then the Tribunal have to come to the contentious matters. Of course they had heard the witnesses and of course the question what they made of the evidence, not merely which witnesses they preferred but what they made of the evidence, was a question of fact for them."5 Without wishing [they say] to reduce the first argument [that is Mr Ciumei's first argument] to one of semantics we fail to see how the term `negotiations' can be applied to the discussions between the applicant and Miss Smith. The final terms are basically the same as those initially proposed with some allowance being made to accrued entitlement. In our view, whatever term is used, we were satisfied that no final agreement between the parties had been reached by 1 March 1993".That was important, because there was a suggestion that the parties were agreed.They then accept that she was astonished, "flabbergasted", they say at receiving the letter, that is the letter of 1 March, and then they deal with another point; and quite disproportionate importance is attached by the Appellant, the authority to this. They say:"7 We also fail to see what relevance there is in the suggestion that the applicant's failure to complain was of significant importance. In our view, the applicant's invoking the grievance procedure during the subsistence of the contract of employment was of an entirely different nature to any representations that could have been made following the determination of the contract of employment".Well there they are saying that she had had legitimate or illegitimate (it does not matter) complaints during her employment and the situation now was quite different. That seems to be the only point they are making. No doubt, the fact of Mrs Pearce's reaction was a matter which they had well in mind. They had found that she was "flabbergasted" and no doubt they had all her behaviour well in mind, in so far as it was relevant, in considering this letter.They then set out the law with perfect accuracy, except that I think they have omitted one or two words from the statute; that is a mere typing mistake obviously. They refer to a number of cases and they say as follows in paragraph 11:"11. In our view, having seen Miss Smith give evidence we accept that she believed that the applicant had agreed to leave her employment on a voluntary basis. Likewise, the applicant satisfied us that on 1 March 1993, the time of the dismissal, for dismissal it was, she believed that the discussions as to her financial package were continuing. There was considerable confusion in the minds of both these parties. [And they say] .... The applicant believed .... that a final offer was still to be made which might or might not be acceptable and that until such an offer was made, no indication of acceptance was appropriate".So the two ladies were quite plainly at cross-purposes in the view of the Tribunal, and it was therefore the duty of the Tribunal to look and see what the effect of what had happened was. The two ladies being at cross-purposes, it could not be said there was a genuine meeting of the minds. They say:"12 .... Miss Smith told us that .... she believed that her agreement with the applicant was based on three options:-(1) she [that is the applicant] could decide not to take up an offer of early retirement,(2) she could take up the offer and leave straight away,(3) she could leave at a later date at her convenience. She later told us that all the applicant had agreed to prior to 1 March was that the discussions were to take place. ....".In other words, certainly from any legal point of view, there was no agreement.And then they say:
"13 .... In our view, the letter is of paramount importance for in it is stated `this is to confirm that due to the reorganisation of the reception and the post room your post is to be declared redundant. You are therefore being offered early retirement. Please confirm your acceptance of this offer in writing. .... Your last day of service is 1 March 1993'. .... Mr Ciumei asked us to consider the surrounding circumstances and suggested that the letter was written in equivocal terms. We have considered this suggestion carefully.
14 The burden of proof is of course on the applicant in this case to show that dismissal took place. In our view the words of the letter are unambiguous".So that was their primary finding:" but if we are wrong, having considered all the surrounding circumstances including other clauses of the letter and later correspondence in the light of what a reasonable employee would have understood by the words, we reach the same conclusion".So they are looking at it, quite rightly, in the light of all the surrounding circumstances, and they are saying, "This was a letter of dismissal in our view".They then go on to say:"15 Dismissal having been found we must then consider the provisions of section 57, [the Act of 1978 of course] .... the reason for dismissal was the respondents' belief that the applicant had agreed to leave their employment on financial terms set out in the letter of 1 March 1993. ....".In other words, Miss Wendy Smith's belief."16 We then have to consider the provisions of Section 57 subsection 3 of the Act. We were satisfied that the belief held by the respondents was mistaken and the respondents acted unreasonably in treating it as a sufficient reason for dismissing the applicant. As such they acted unfairly".One asks what is, on the face of it, wrong with that. Miss Smith was mistaken.It is easy for parties to be at cross-purposes, particularly if they are not used to negotiations and evidently Mrs Pearce was quite capable of being a difficult person, from the point of view of the employers. All the more reason, in those circumstances, for Miss Smith, in her position of responsibility, to make quite sure that she had it in writing, so that there could be no doubt that there was an agreement on all terms and that Mrs Pearce was content to retire early on those terms.And one asks oneself, if that is the correct view, and certainly it is the obvious view, why on earth should the Tribunal not find that it was unreasonable to act on that mistaken belief? This was a vitally important decision for the employee and it was a decision on which there had been fairly long drawn out discussions. Surely, what the Tribunal were entitled to find, and we would have been surprised if they had reached any other finding, was that it was unreasonable to go ahead and act on that mistaken belief. Of course it is innocent, in the sense that there is no malice or dishonesty in it at all, but fault can just as well, in the appropriate context, consist of carelessness; and since the statute says that if the employers have not acted reasonably, that they have not acted fairly, the Tribunal so found."Finally, [they say] in our view no contributory fault can be attributed to the applicant. We were satisfied that she did no more than consider the proposals of the respondents, sought some advice from her son and requested clarification" .And they said that they would proceed in due course to the remedies hearing where they will consider the question of compensation. They have not yet got to that because it has been adjourned generally, pending this appeal.A number of complaints have been made to us by Miss Romney. Mr Ciumei appeared as I say for the authority before the Tribunal and Miss Romney appears for the authority today. And she makes a number of complaints on behalf of the authority.She complains that the Industrial Tribunal did not make sufficient findings to show the true grounds on which they proceeded. It makes it very difficult to consider their conclusions, she says.The fact is that we have all read this rather long decision by the Industrial Tribunal and we found, none of us, any difficulty in understanding the basis of it although certainly some things could be put more happily, Miss Romney says as follows:"They say that the Industrial Tribunal found that Miss Smith believed that the Applicant was going, but they do not say when that belief was formed. And that makes it difficult to assess whether the belief prompted the writing of the letter, was the letter written in that belief?".That does seem, with great respect, to be a very pedantic point. The fact is that they have found quite sufficient to entitle them to say, first of all that the letter was a letter of dismissal and that it was written in a mistaken belief, and that it was unreasonable to act on that belief, and it does not seem to us that the precise moment when Miss Smith formed that belief is something into which the Industrial Tribunal should have enquired.They say that on 3 March there were discussions, but they do not find if Miss Smith had made a job offer to the Applicant (the Respondent here). That is a matter which they will have to consider, if necessary, on the compensation hearing.

(A) of the Employment Protection Act:

"Where the Tribunal finds that the complainant has unreasonably refused an offer by the employer which if accepted would have the effect of reinstating the complainant in his employment in all respects as if he had not been dismissed, the tribunal shall reduce or further reduce the amount of the basic award ...".And of course, the same rule applies under section 74(1) and section 74(4) if an offer was made which the Applicant (the Respondent here) should have accepted; that is a matter which they are entitled to consider in assessing compensation. They have not got to that stage yet and the Industrial Tribunal, in our view, were entitled to form the views which they did, and make the findings which they did on the materials which they had found, and did not have to go further and find a number of details of which this was one.Then Miss Romney attaches what to us appears to be quite excessive weight to the fact that there was an agreement between the parties, on any view, that the actual day of going should be 7 March and not 1 March.It seems to us that whether or not it was a dismissal; whether or not the employer had acted reasonably; whatever Miss Smith's beliefs; whatever Mrs Pearce's beliefs; the fact is that the parties were entitled, as civilised people often do, to say "Do you mind if I don't go till the following Friday". So there it was.And then Miss Romney complains that the Tribunal do not say why it was unreasonable for the employers to conclude that there had been an agreement. The answer is that if you are wrong over a matter like that, where the employers have as good information as anybody, then it is not exactly necessary to seek out reasons for saying it is unreasonable for them to entertain a wrong belief about that. It must be due to carelessness, to say the least.Then she suggested that there was evidence of conduct on the part of Mrs Pearce that showed that she had accepted an offer by conduct. Again that is a matter which the Tribunal was certainly considering among everything else, they were considering her conduct. And, says Miss Romney, "It is our case that an offer to rescind the dismissal was made. There should have been a finding about that".Since Miss Smith had the very firm belief that all she had done was to make an offer of early retirement, it is rather hard to see how the Tribunal should then have gone off on an alternative tack to say, "Well assuming it was a dismissal, was there an offer to rescind the dismissal?". One has heard of pleading in the alternative often enough, but treating evidence in the alternative may be too sophisticated and we do not think there is anything of valid criticism disclosed there.Then Miss Romney comes to a point which seems to us to be much more important as a matter of criticism. She says the Tribunal decided that there was no contributory fault here on the part of Mrs Pearce and, says Miss Romney, they never made it clear that they were going to reach that finding. It is true they had all the evidence which was laid before them, but they never said, "We will now hear submissions on the question of contributory fault". That is undoubtedly a misfortune, if they did not hear argument about that.The fact is that when Counsel are present in front of an Industrial Tribunal, it most certainly is, as well as the Tribunal's responsibility, Counsel's responsibility to be quite sure that the submissions which they wish to lay before the Tribunal are made to the Tribunal at a time when the Tribunal is willing to receive them. In my experience, and I think that of all of us, it is the normal and common thing for Counsel to say to the Tribunal, if they have a submission of contributory fault to make, "Is it convenient for this to be heard at the first hearing or is it more convenient to hear this at the Remedies Hearing?".The Tribunal will have to consider, of course, as has been said in the authorities, whether it is wise to split up the evidence; whether it is better really to hear all the argument on liability together, including contributory fault.So we asked Miss Romney what allegations of contributory fault would have been argued. She says as follows. The averments of contributory fault that were to be made were that Mrs Pearce failed to protest at what was happening. (The Tribunal certainly considered her conduct in that way and found that she was "flabbergasted"). She failed to take the opportunity to come back to work, the offer of further employment, of which the Tribunal heard among the other evidence, and she, Miss Romney, was guilty of careless negotiation.One knows, I think, what that means, but the fact is that here, if Mrs Pearce was being a little bit wayward and was saying first one thing and then another, or not insisting on matters being tied down, who better to put that right than Miss Smith.It was up to Miss Smith who was (so to speak) leading the "negotiations", who was seeing what could be agreed, to make quite sure that if there were any ambiguities or difficulties, that was sorted out. And it seems, with all respect, fanciful to suppose that on the facts as they are disclosed by the Industrial Tribunal's findings, they could have held that there was contributory fault, having found that there was this unfair dismissal. In so far as offers and what happened afterwards are material, of course they may be highly material to the question of compensation.Was there an offer made which Mrs Pearce should have, at any rate, considered? Was it an offer which she should have accepted? Is she guilty of other blameworthy conduct which should reduce her compensation? All those matters remain to be considered under sections 73 or 74.It is only the question of contributory fault which has been considered so far and in those circumstances we do not think that there is anything in this. If Mr Ciumei had desired to address the Tribunal he should have made very certain that he did so at the first proper opportunity and made quite sure that the Tribunal were not going to consider that matter before they had heard him. He did not, and in those circumstances, in a case of this sort, we cannot criticise the Industrial Tribunal for not asking what appears to us to be a pedantic question:, "Do you want to make allegations of contributory fault against this lady?".We think it is significant that we are told that the first time this surfaced was in the Notice of Appeal. We think, so far as merits go, there really is (with great respect) nothing in this point.So having heard all that has been said about this, we think that the just view is this. This is plainly a case which presented some difficulties, so far as evidence is concerned. It is plainly a case which could not be decided without hearing the parties. It is probably also a case in which all those concerned at the Industrial Tribunal had to draw on their experience and understanding of employment matters. Basically, what this Tribunal has decided are questions of fact for them and not for us, and it appears to us that every argument raised by the authority before us today is really saying, "This Tribunal should have decided other matters; should have reached a different conclusion; should have given greater weight to certain parts of the evidence; should have noted certain comments and given effect to them". Those are all arguments which are not for us and which are not matters of law.So having considered it as carefully as we can and being grateful to Counsel for their endeavours to help us with their submissions, we cannot any of us find any point of law here upon which we could possibly entertain this appeal.In those circumstances it falls to be dismissed.