Chauhan & Anor v Man Truck & Bus UK Ltd [1995] UKEAT 931_94_0711

EAT
Chauhan & Anor v Man Truck & Bus UK Ltd
[1995] UKEAT 931_94_0711 · 1995-11-07

JUDGE CLARK:

These are appeals brought by Mr B Chauhan and Mr J Wood against parts of a decision of the Bristol Industrial Tribunal dated 24 August 1994.At the outset both Appellants sought leave to amend their joint Notice of Appeal to challenge the Tribunal's decision to dismiss their claims of racial discrimination. Having considered representations on all sides, we concluded that this amendment was too late in the day and it would be unfair to expect the Respondent to deal with the point. There was no application for an adjournment and accordingly leave was refused. A further amendment sought on behalf of Mr Wood was permitted, on the basis that it focused on a point which had already been raised in the original notice, and did not take the Respondent by surprise.The factual background to the appeals is set out in the Tribunal's extended reasons. Both Appellants were employed by the Respondent until their dismissals on 31 October 1993. At that time Mr Chauhan was employed as Finance Manager and Mr Wood reported to him as Assistant Accountant.The background to the dismissals, so the Tribunal found, was that the Respondents financial section ran into serious problems, identified in reports first by their auditors, Touche Ross, and secondly by a consultant Mr Peter Marsden. On 15 October 1993, the Financial Controller, Mr Grant, saw both Appellants and dismissed them. Those dismissals were confirmed to each Appellant by letters of the same date. The reason given for dismissal was redundancy. Both Appellants then presented complaints to the Industrial Tribunal of unfair dismissal and race discrimination.In response to the complaints of unfair dismissal, the Respondent contended that the reason for dismissal was redundancy. At the outset of the Tribunal hearing, the Respondent successfully applied for leave to amend the Notices of Appearance to allege in the alternative, some other substantial reason for dismissal. However, as Mr Sproull told us at the hearing of these appeals, it was not contended at any stage by the employer that conduct or capability on the part of the Appellants constituted the reason for dismissal.The first issue for the Tribunal was what was the reason or principal reason for dismissal? In the case of Mr Chauhan they rejected the employer's alternative reasons for dismissal, and concluded that no prescribed reason within Section 57(1) or (2) of the Employment Protection (Consolidation) Act 1978 had been made out. It followed that his dismissal was unfair.In the case of Mr Wood, the Tribunal accepted that the reason for dismissal was redundancy, but went on to find that the dismissal was procedurally unfair due to the lack of proper consultation.Against those findings of unfair dismissal there is no appeal by the employer.However, the Tribunal went on to consider two issues relating to compensation. The first was whether either or both of the Appellants had caused or contributed to their dismissals by their own actions, and if so, the extent of such contribution ( 1978 Act , Section 74(6)). Secondly, the question of what loss each Appellant had sustained under the just and equitable provision contained in Section 74(1) of the 1978 Act , applying the approach of the House of Lords in Polkey vAE Dayton Services Ltd [1988] ICR 142 [`The Polkey principle'].They deal with those matters in paragraphs 14 and 15 of their extended reasons in this way:"14 It has been agreed between the parties that the two questions of contributory conduct and what is known as the "second limb" in Polkey vAE Dayton Services Ltd [1987] IRLR 503 HL should be dealt with at this stage. As far as contributory conduct is concerned we have set out the shortcomings of the applicants. In addition there is evidence given by two of their subordinates to the effect that they were unhelpful with regard to training and they were unwilling to assist when needed. There is an element in these criticisms both of capability and conduct because our view is that the applicants, taken on as they were originally in what was in effect a branch of VAG, were not really capable of handling the role they were assigned of Finance Manager and Assistant Accountant. Nevertheless we have formed a clear view over the course of the evidence that they each of them failed to make proper efforts to perform their job correctly. Each has taken the view that he just had to sit there and wait for someone else to tell him what to do rather than taking any initiative. It seems to us that we can properly regard those matters as contributory conduct and we have come to the conclusion that it is just and equitable that each of the applicant's compensation should be reduced by 75% in respect of that contributory conduct.15 We turn now to the second limb in Polkey as to whether, had a different procedure been adopted, the result would have been the same. It has been held that this aspect can be cumulative and that we should deal with contributory conduct first. As far as Mr Chauhan is concerned, we do not see any basis for saying the result would have been the same. We have come to the conclusion that there was not a redundancy situation, there was not some other substantial reason and therefore had a proper procedure been adopted the applicant would not have been dismissed he would simply have become the Financial Accountant. However the situation with regard to Mr Wood is somewhat different. We have come to the conclusion that had a proper procedure been adopted the result would have been the same. However, the respondents' procedure makes clear provision for warning and a consultation period. It seems to us that consultation would normally have taken place. We do not think the full three months referred to in the document would have been appropriate in this case but we think that had a reasonable procedure been adopted there would have been a period of about a month during which Mr Wood would have been consulted over alternatives to redundancy. We have come to the conclusion, in view of the performance of Mr Wood over the previous period, that even if there had been that consultation period the result would have been the same."It is with those findings that we are concerned in these appeals.

Contributory conduct

Section 74(6) of the 1978 Act provides:
"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."
The first question for an Industrial Tribunal is whether to order a reduction in compensation for contribution, and if so, the second question is what is the quantum of that reduction?Dealing with the first stage, this requires a two-fold enquiry:(1) Was the conduct of the employee culpable or blameworthy, in the sense of being perverse, foolish or bloody-minded? and(2) Did that conduct cause or contribute to some extent to the unfair dismissal?Nelson v BBC (No.2) [1980] ICR 110, 121C-122A .It follows that it is not sufficient for a Tribunal to find that the employee was guilty of some bad behaviour, without also finding that that behaviour was causally linked to the unfair dismissal. See Hutchinson v Enfield Rolling Mills Ltd [1981] IRLR 318 . However, it is possible for a Tribunal to find that although the employer has failed to establish one of the prescribed reasons for dismissal, it may nevertheless hold that the employee has contributed to his dismissal. Polentarutti v Autokraft Ltd [1991] ICR 757 . That was a case of unfair constructive dismissal in which this Appeal Tribunal held that the employee's conduct contributed to the employer's repudiatory breach of contract which entitled him to treat himself as being constructively dismissed. Although no reason for dismissal was found and accordingly the dismissal was held to be unfair, this Tribunal held that the Industrial Tribunal had been entitled to go on to find that there had been a causal connection between the employee's conduct and his dismissal, such that a reduction could be made.In this case, the Tribunal found that each Appellant had been guilty of blameworthy conduct in two respects. First the reports by Touche Ross and Mr Marsden had identified shortcomings in their job performance. The Tribunal also formed the view on the evidence that they had failed to make proper efforts to perform their jobs correctly. Secondly, the Tribunal refers to complaints made by junior employees Mrs Fox and Miss Vaughan, about the Appellant's failure to assist them by way of training and due to their lack of communication.Mr Sproull has taken us to the Chairman's Notes and we have reached the conclusion that there was evidence to support these findings.As to causation, although this is not spelt out by the Tribunal, it concluded that these matters could properly be regarded as matters of contributory conduct. That imports a finding of causal connection. There was evidence from Mr Grant to support such a finding. In these circumstances we are unable to conclude that in making a finding of contributory conduct the Tribunal erred in law.As to the assessment of 75% contribution, that is essentially a matter of fact for the Industrial Tribunal, which saw and heard the witnesses over three days. We can only interfere with that assessment where it is shown to be perverse. Hollier v Plysu [1983] IRLR 260 . We are not persuaded that this assessment can be characterised as perverse. Although we may not ourselves have made such a finding were we sitting as an Industrial Tribunal, that is not a ground on which we can interfere with this Tribunal's decision. Accordingly those findings must stand.

The Polkey principle

In the case of Mr Wood, the Tribunal concluded that had the Respondent properly consulted with him before dismissal, the result, that is dismissal by reason of redundancy, would have been the same. It went on to find that a proper consultation period would have been one month.Mr Oldham submitted that such a finding was perverse, given the Respondent's own redundancy procedure which provided that:
"The Company will endeavour, whenever possible, to give employees and the Trade Unions, three months notice of a potential redundancy situation."
He relies upon the cases of Stoker v Lancashire County Council [1992] IRLR 75 and Cabaj v Westminster City Council [1994] IRLR 530 , as authority for the proposition that an employer must comply with its own contractual procedures.Both those cases were concerned with the question of fairness of dismissal. Here, the issue is what was a reasonable consultation period. The Tribunal, in paragraph 15 of its reasons, referred to the Respondent's procedure making provision for a normal warning and consultation period of three months. However, it found on the facts that a reasonable consultation period would have been one month. That finding is not inconsistent with the judgment of the Employment Appeal Tribunal in Mining Supplies (Longwall) Ltd v Baker [1988] ICR 676 . We have concluded that it was a permissible finding and again we were unable to interfere with it.In these circumstances, both appeals must be dismissed.

ZZZZZZZZZZ APPEAL TRIBUNAL

Audit House

Telephone : 0171 273 1010

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From: Peter Clark To: Joyce Collerson

Garfield Davies

8 December 1995

RE: (1) MR B CHAUHAN (2) MR J WOOD v MAN TRUCK & BUS UK LTD - EAT/931/94

When we discussed this appeal briefly at the end of the hearing on 7 November, we were each of us unhappy with the Tribunal's finding of 75% contribution in each case.I have now had an opportunity to go through the evidence and arguments and have reluctantly concluded that we cannot properly interfere with those findings. I have been particularly influenced by John Knox's judgment in Polentarutti and the evidence to which we were referred by Counsel for the Respondent.In these circumstances I would value your observations on my draft judgment.