McDonald v Capital Coaches Ltd [1995] UKEAT 140_94_2205

EAT

McDonald v Capital Coaches Ltd

[1995] UKEAT 140_94_2205 · 1995-05-22

JUDGE HULL QC:

This is an appeal to us by Mr McDonald against a decision of the Industrial Tribunal sitting at Brighton under the chairmanship of Mr Wilson, with two industrial members, on 15 December 1993. The history of the matter shortly is as follows.

Capital Coaches, the Respondents (the employers) are centred on Gatwick and Mr McDonald's employment with them as a driver of a public service vehicle began on 5 June 1991. All went well, so far as we know, until 5 August 1993, just over two years into his employment, when apparently an earlier illness recurred and he was away sick. He made an effort to get in touch with his employers, but failed to do so. The line was busy and he went back to sleep (one cannot comment on that without knowing about the illness, but that was the situation). The next day he did present himself before his employers. He endeavoured to explain himself but as the Industrial Tribunal put it, matters got out of hand. The Manager became heated and after some altercation he was dismissed.

That was the situation on 6 August. There was a letter received very shortly after that by Mr McDonald. Mr Billimore, the General Manager, wrote. It is a letter which raises a quite new matter; it does not merely relate to the absence. It is headed:

"Re: Attitude and Abusive Language to Managers.

Failure to notify Company that you would not be reporting for

duty".

That of course, was the subject matter of the altercation. The letter reads as follows:

"Dear Mr McDonald,

I was very concerned by your recent attitude towards the Company. It seems prior to our meeting on 6th August 1993 you were very abusive about members of my Management Team. I believe this occurred on 4th August. [That was the first that had been put in writing apparently about this].

At our meeting [that is referring of course to 6 August] you refused to give any reason why you did not notify the Company that you were sick or unable to report for duty. The only comment you would make was `you don't tell us what we're doing'.

I expected at least a reason or an apology and an assurance that in future you would call. Had this been forthcoming then a written warning could have been issued and the matter would not have escalated to the present serious state.

Your Shop Stewart Mr C. Terrington also refused or was unable to make any comment on your behalf.

Your record prior to these recent incidents has been very good, for this reason I would like to invite you to come and see me to discuss any problems you might have and see if these can be resolved amicably.

If you feel you do not wish to discuss this matter any further then I have no option but to carry out your dismissal for gross misconduct.

I await your reply by return before enforcing the latter.

Should you feel that you have been treated unfairly in this matter I must remind you that you have the right to appeal to the Managing Director .... ".

So that was that letter. It is said to us, and we have no reason to doubt it, that that letter contained a number of mis-statements, errors of fact, which we have been told about.

That was not taken up by Mr McDonald. In fact, he launched the proceedings. He complained of unfair dismissal in his complaint to the Tribunal on 2 September, and on 18 October the employers presented their Notice of Appearance and there they said that they did not admit that he had been dismissed.

In due course the Industrial Tribunal sat and they found that he had been dismissed and indeed unfairly dismissed, and to explain the case I had better refer to the reasons in extended form. They say that they have studied the documents. Those documents, we are told, included Mr McDonald's successful attempts to find other employment. He had gone out, he had managed to find full-time employment and then permanent employment and so his claim, in respect of loss, was a fairly limited one. They say, "We make the following findings of facts". That he was dismissed, they say that he had been ill, but attempted to telephone the employers. They say that this meeting when he came in the next day had rapidly got out of hand; they say that he, the Applicant (the Appellant here) clearly felt very aggrieved at a complaint he had about the Respondents' attitude in driving in breach of EEC Regulations which had been the subject of a wrangle the day before he went off sick.

"3(e) .... Mr Billimore on the other hand clearly quickly lost his temper with the Applicant for failing to explain why he had not turned up, for failing to offer any apology for it and we are satisfied that the culmination of this short conversation was that the Applicant believed himself to be dismissed and, indeed, that was conceded by Mr Walker [the Solicitor who appeared for the employers before the Industrial Tribunal]. (f) The Respondents wrote a letter [and here they are referring to the letter which I have just read] to the Applicant on the following Monday .... which was couched in somewhat awkward terms but effectively invited the Applicant to go in to discuss the matter with Mr Billimore, the obvious inference being that his employment could continue and that the dismissal would be replaced with a warning. The Applicant was incensed by this letter, particularly the heading to it which referred to abusive conduct which he felt was totally unjustified and which had not been the subject of any disciplinary discussion or meeting. The Applicant felt that there was no point in going back because he believed that Mr Billimore's intention was simply to cancel the unfair dismissal and dismiss him again, trying on this occasion to `get it right' . Whilst we understand the Applicant's fears [and pausing there, so do we in this Tribunal understand them only too well] we did not believe them to be justified."

They say:

"(4) It was quite clear that Mr Billimore had not anticipated [and I think the next word is missing - `dismissing'] the Applicant on this occasion but that his temper had got the better of him. There had been no warnings of previous misconduct on the part of the Applicant and there had been no advance notice of a disciplinary hearing at which the Applicant may be dismissed. It was conceded that nothing the Applicant had done could constitute gross misconduct. Having regard to the very well known principles laid [down] by Judgments in the House of Lords in the case of Polkey vAE Dayton Services Limited , [1987] IRLR 503 a dismissal without a proper disciplinary hearing will almost invariably be unfair, save in exceptional circumstances and we find that there were none here.

(5) It follows that the dismissal was unfair and not within the range of responses of a reasonable employer in the particular circumstances of this case. However, we have decided to award the Applicant no compensation because we find a total failure to mitigate his loss. Had he swallowed his pride and been prepared to go and see Mr Billimore, we are satisfied that his employment would have continued and that there would have been no financial loss. We believe that the Applicant was misguided, perhaps on advice, in his decision not to respond to that invitation. We express the hope that the Respondents will feel able to give a generous reference to the Applicant should the need arise.

(6) One of the duties of a Tribunal on finding a dismissal to be unfair is to attempt to establish what loss flows from that unfair dismissal. Section 73(7)(a) Employment Protection (Consolidation) Act 1978 provides as follows:-

`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 to such an extent as it considers just and equitable having regard to that finding'.

The Tribunal have found that in all the particular circumstances of this case no loss would have flowed from the unfair dismissal if the Applicant had accepted the offer of Mr Billimore and the Applicant was unreasonable in his rejection of that offer.

Section 74 of the same Act provides that the Tribunal shall award such Compensatory Award as the Tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant (Applicant in this case) so far as that loss is attributable to action taken by the employer. For the same reasons that we reduced the Basic Award to nil, we reduced the Compensatory Award to nil because we find that such loss as may have been sustained by the Applicant was not attributable to action taken by the employer but to action taken by the Applicant in his unreasonable refusal to discuss his future employment with Mr Billimore".

We now have to look at what is said about that award. It could be said to be, on the face of it, a strong award because here this letter (as I say) contains a number of errors of fact which were, no doubt, pointed out to the Industrial Tribunal and the tone of the letter is, as has been pointed out, to raise fresh matters of complaint and the Tribunal themselves recognised the fears that it might give rise to in the mind of Mr McDonald.

First of all, with regard to the basic award Mr Bibby says that we are confined by the terms of section 73(7A) of the 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 to such extent as it considers just and equitable having regard to that finding".

And he says that that subsection is perfectly plain. What is required to bring the subsection into operation is an offer and this letter, whatever else you say about it, is quite plainly not an offer. In any lawyer's sense of the term, so far from being an offer it is merely an invitation to treat. I will not read it again, but it is quite clear that all that is being suggested is "Come in and have a chat about it", asking for concessions by Mr McDonald and at any rate hinting at concessions by the employers.

That, says Mr Bibby, is incapable of being an offer. An offer is something, he says, which is intended to have legal effect. The employee must not be left in doubt. If he is properly advised he must be able to look at it and say, "Well if I refuse this offer I shall be doing so unreasonably. It is an offer which means that if I accept it, I shall be reinstated in my employment in all respects as if I had not been dismissed". And Mr Bibby says, it quite simply cannot be described in those terms and the Tribunal have made an obvious error of law in so describing it.

Concerning that, Mr Clark says that this is in effect giving an extended meaning to the word "offer". It does not have to be an "offer" which is an offer of reinstatement, it need only be an "offer" which if accepted would have the effect of reinstating the complainant. He compares and contrasts that with the language of section 82 of the Act which, as he points out, in subsection (3) relates to the case of redundancies and offers by the employer in those circumstances. The Tribunal were entitled to construe the letter as constituting an offer within section 73(7A).

We are all of the opinion that subsection (7A) of section 73 means what it says. The offer which has to be made to bring this subsection into operation must be one which can be accepted, not in the layman's sense but in the lawyer's sense; the employee must be able to say "This is an offer to reinstate me". There may be some details to discuss but it is an offer of reinstatement and that I accept or do not accept in the knowledge that if I do not accept, and that is unreasonable, then I may lose part or the whole of my basic award".

So in our view this was not, on any view, an offer within section 73(7A).

We now therefore turn to the compensatory award. As I have said, there are a great many comments which could be made concerning this letter. On the face of it, some would say it is not really an offer of reinstatement even in the layman's sense. We have looked at a letter which was sent in reply, probably on advice, which is at page 16A of our papers in which Mr McDonald says that he has a "lack of confidence that I would be fairly treated if I was reinstated, I have decided not to avail myself of the possibility of reinstatement". And what Mr Bibby says about that is that it essentially tells under section 74(4). He says that in ascertaining the loss, "the Tribunal shall apply" [this is of course concerning the compensatory award]" the same rule concerning the duty of a person to mitigate his loss as applies to damages recoverable under the common law [of England and Wales or of Scotland as the case may be]". And he makes a basic complaint about this; that the Industrial Tribunal were placed by that subsection under a duty to consider first and foremost what Mr McDonald did do, and in fact what he did do was to go out and seek at first temporary employment until he could get permanent employment, and then obtain permanent employment; and the Tribunal, he says, have not considered that matter and set it against what they thought he might, or should, have done in reacting to this letter by saying, "Yes I will come in to have a chat about it". The Tribunal found that he should have done that.

Now they have short-circuited it Mr Bibby says, because what they have done is simply to consider whether he should have mitigated his loss by taking up what is suggested in that letter and they have not carried out this balancing exercise. It is, after all, for an Applicant to say what he did do and then the burden is on the Respondent in the Industrial Tribunal to show that there was something unreasonable about that.

So far as that is concerned, Mr Clark has invited our attention to the actual terms of the decision. He says it is self-evident that they did consider these matters. They say at the very outset that they have considered all the documents and evidence which has been laid before them. And they did not proceed, he said, simply on the basis of a failure to mitigate. They also considered section 74(1) which provides, for our purposes, that:

"....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".

So they considered it, he said, under both of those subsections of section 74 and he says, (and this is the most important submission) that this is fundamentally a question of fact, and it matters not, he says, that this Employment Appeal Tribunal would, or might, have reached a different decision if they had heard all the evidence; heard the Managing Director cross-examined; heard Mr McDonald cross-examined; and heard what they had to say about these documents.

The facts are that this Tribunal, having found that Mr McDonald was unfairly dismissed and really very unfairly dealt with, then considered this matter and held that first of all, he should in all the circumstances have taken up this offer and that in failing to do so, he neglected an obvious and reasonable suggestion which was being made to him, and in those circumstances they found, again as a matter of fact, that that would on balance of probabilities have led to his being reinstated.

As we indicated in argument, simply looking at the letter and the circumstances as we understand them from what we have read, that might be said to be a very strong decision. Nonetheless, having considered the submissions as carefully as we can, we have come to the conclusion that we should accept Mr Clark's submission about this.

It is in truth a matter of fact for the Industrial Tribunal in which, by law, we have no right to interfere; and it cannot be said that we can interfere simply because a decision is one which we take a different view about, or might take a different view about. It is not our business to form views about those matters, except for the purpose of saying (as happens very rarely) "this is so far beyond reason and so beyond the pale of what is possible that one has to describe it as perverse".

We are not invited to say that. We think that in all the circumstances this was a decision which it was open to the Tribunal, as a matter of law, to reach and however strangely it may read on paper, it is in our view within the range of factual decisions which the Tribunal was able to come to.

So in those circumstances, with regard to the compensatory award we feel unable to interfere.

With regard to the basic award, we find that the Tribunal was wrong in law in their construction of section 73(7A) and to that extent the appeal will be allowed.