London Borough Of Hackney v Usher [1996] UKEAT 1143_95_1912

EAT
London Borough Of Hackney v Usher
[1996] UKEAT 1143_95_1912 · 1996-12-19

JUDGE PETER CLARK :

We have before us two appeals in this case by the employer, the London Borough of Hackney ["Hackney"].(1) against a decision of the London Industrial Tribunal sitting at London (North) and at Stratford, chaired by Mr P R K Menon sitting on 29th-31st March and 10th July 1995 that the respondent employee, Mr Usher, was unfairly dismissed by Hackney. Extended reasons for that decision are dated 7th September 1995. We shall call this the liability appeal - (EAT/1143/95).(2) against a further decision by that same tribunal following a remedies hearing held on 10th October 1996 ordering that the respondent be reinstated. Extended reasons for that decision are dated 7th October 1996. The remedies appeal - (EAT/1282/96).For completeness, an application was made by Hackney for a review of the remedies decision and that was dismissed.At the outset of this hearing, with the agreement of Counsel, we indicated that we would deal with the appeals consecutively on the basis that it would only be necessary to consider the remedies appeal if the liability appeal failed.

The Liability Appeal

The facts :These may be summarised from the tribunal's detailed reasons in the following way. The respondent was employed by Hackney between 6th July 1970 and 25th May 1993, from which date he was summarily dismissed on grounds of gross misconduct.He began his career with Hackney as a trainee Care Officer. On 9th August 1971 he was promoted to the post of Social worker. On 1st January 1974 he was appointed Superintendent, that is manager in charge of Hackney's Oswald Street Home ["the Home"] for children in care.He remained in that post until he was suspended from duty on 16th July 1992 as a result of allegations made against him by a young man, known as DL, who had formerly been resident at the Home.In 1992 DL was aged 28 or 29 years. He had been a resident in the Home when the respondent became manager in charge in January 1974. He would then have been 10 or 11 years old.By 1992 DL had left the Home, but remained in contact with social workers there, including the respondent, who gave him informal support.In early to mid-1992, after hearing a radio programme on the sexual abuse of children, DL made an initial complaint to his General Practitioner to the effect that he had been subjected to sexual abuse by the respondent during the period of his residence at the Home.The General Practitioner referred DL to a psychologist at Whipps Cross Hospital. That psychologist was concerned at these allegations and asked Ms Maureen Singleton, a social worker who had worked at the Home, knew the respondent, and had been one of those providing informal support to DL, to whom he should report the matter. Ms Singleton did not believe the truth of the allegations but felt duty bound to report them to Hackney. She duly reported the matter to Mr Douglas, the Assistant Director of Social Services (Children and Families).On 16th July 1993 Mr Douglas suspended the respondent from duty and initiated investigations by the police, in the form of the Hackney Child Protection team ["CPT"], and an internal management enquiry by Mr Parnell, Hackney's head of Inspection and Quality Assurance. Ms Marion Wheeler, from the London Borough of Waltham Forest, was appointed as an independent expert to conduct the child protection aspects of the investigation.Mr Parnell interviewed the respondents and other Hackney staff. He did not interview DL. His interview with the respondent took place on 14th July 1992 in the presence of a senior personnel officer. Minutes were taken of that meeting. DL's allegations were put to the respondent in general terms and he denied that he had had any sexual contact with DL. Asked if he understood the nature of the allegations, the respondent replied:
"That DL has said that 'from the day I arrived to the day I left, I was sexually assaulted on a frequent basis' which is very heavy."
DL was interviewed separately by Ms Wheeler and Detective Inspector Jeff Hunt of CPT on 31st July 1992. Her notes of that interview were later prepared by Ms Wheeler on 20th January 1993. The Police statement, taken from DL, together with medical statements, were used in subsequent criminal proceedings and were not released to Hackney at this stage.On 20th August Mr Parnell issued a Notice of Complaint ["NOC"] against the respondent. The charge was:
"It is alleged that you sexually abused a child [DL] resident at 2 Oswald Street on a number of occasions between 1972 and 194. This constitutes gross misconduct."
The tribunal observed that the respondent did not commence employment at the Home until 1974.The respondent put in a written response to the NOC on 24th August, taking certain procedural points and vigorously disputing the charge.On 11th January 1993 Mr Parnell issued a second NOC making further allegations against the respondent arising out of enquiries made concerning his tenure at the Home. In due course the second NOC was withdrawn on 25th May 1993 and no further action was taken on it.Following a number of postponements a disciplinary hearing of the first NOC, relating to the DL allegations, was fixed for 26th January 1993 before Mr Douglas. By early 1993 the respondent was facing serious criminal charges in relation to DL to be heard at the Central Criminal Court. The respondent's trade union representative, Mr Charker requested a further postponement of the disciplinary hearing ["LOH"] until after the criminal trial. Objection to the hearing on this ground was taken in a letter from Mr Charker dated 21st January 1993, and in a further letter from solicitors instructed on behalf of the respondent in the criminal proceedings dated 25th January, and again by Mr Charker on behalf of the respondent at the outset of the LOH. After taking advice from personnel Mr Douglas ruled that the LOH should go ahead. At that point the respondent and Mr Charker withdrew and took no part in the LOH. The hearing proceeded in their absence.The hearing took the following course; Mr Parnell presented the management case. The only document relied upon was the first NOC. Ms Wheeler was the only witness. She gave an oral account to Mr Douglas and presented a written report which had not previously been provided to the respondent or his representative. She apparently had reservations about how much evidence she should give in the light of the pending criminal trial. She relayed what she had been told by police about the medical evidence which had been obtained. Based on her interview, in company with D.I. Hunt, with DL on 31st July 1992 she proffered her opinion that she considered the allegations made by DL to be both serious and plausible. During evidence before the tribunal Ms Wheeler said she was not in a position to say that DL's allegations were true.Mr Douglas took the view that it was not in DL's interest to be interviewed by Mr Douglas, nor to call him at the LOH so that he could form a view as to his credibility.At the end of the hearing held on 26th January Mr Douglas recorded in his notes:

"... children/adult survivors must always be believed."

The tribunal found that Mr Douglas failed to satisfactorily explain the context of that note. All three people who had been the hearing, Mr Douglas, Ms Wheeler and Mr Parnell said in evidence before the tribunal that they had not proffered that view. Nevertheless, the tribunal held that that view must have been expressed by one of them, and that Mr Douglas therefore recorded it.The LOH on the first NOC was adjourned and reconvened on 11th March 1993. The respondent and his representative chose not take part in that adjourned hearing in view of the pending criminal trial. After the first NOC ended, Mr Douglas went on to hear the second NOC. At this stage the respondent and Mr Charker joined the proceedings. The second NOC was spread over a number of days, culminating with a hearing on 25th May, when the second NOC was withdrawn.By letter dated 2nd June 1993 Mr Douglas conveyed his decision on the first NOC, the DL complaint, to the respondent. He concluded that the respondent should be summarily dismissed with effect from 25th May 1993 and notified him of his right of internal appeal.His reasons for reaching that decision are set out in some detail in the letter. The tribunal has extracted what they regard as key passages from that letter, which are set out in paragraph 6(17) of their reasons. In summary Mr Douglas referred to Ms Wheeler's evidence that at interview she found DL to be plausible in his account and that there was an absence of motive for DL to make up a story; on the contrary Mr Douglas heard that there was pressure on DL to withdraw his allegations. He had maintained his account when further interviewed by experienced police officers, and that the medical evidence was consistent with his allegation of sexual abuse. There was no reason, he wrote, to regard DL as other than intellectually, psychologically and emotionally capable of telling the truth. Mr Douglas also referred to other incidents emerging from the enquiries carried out at the Home. He took into account that the respondent was not present at the hearing, but he had considered a transcript of the interview between the respondent and Mr Parnell on 14th July 1992, where he, the respondent, had denied all the allegations, and Mr Douglas assumed that had he taken part in the hearing the respondent would have maintained that denial.He concluded his letter by saying:
"... On the balance of probabilities, I decided my first duty is to the children in the care of the Council, that their need for protection is paramount, and that you have breached the trust placed by the Council in you as an Officer in Charge of vulnerable children.

For these combined reasons, my decision was to dismiss you."

In evidence before the tribunal Mr Douglas said that on balance he believed that the respondent had abused DL. The medical evidence was consistent with that. He relied on Ms Wheeler's interpretation. Her view was that DL was credible.At paragraph 6(19) of their reasons the tribunal make this observation:
"(19) The Tribunal finds and it is not in dispute that there was no nexus between the medical evidence (which neither Mr Douglas nor Ms Wheeler had seen or read at first hand) and the Applicant. The medical evidence may or may not have been consistent with DL's allegations that he had been the victim of sexual assault but it did not connect the Applicant to the alleged offences nor did it provide any proof that the Applicant was the perpetrator of the alleged sexual abuse of DL."
At paragraph 6(21) they further observe that Mr Parnell's evidence to Mr Douglas consisted of hearsay, even double hearsay. That is to say, he reported what he had been told by staff during his investigation.On 6th September 1993 the respondent was acquitted, on the direction of the Judge sitting at the Central Criminal Court with a jury, of three counts of buggery, at the close of the prosecution case. DL gave evidence for the Crown.The respondent appealed against his dismissal.That appeal came before a panel of three Hackney councillors chaired by Councillor Watson on 28th September 1993. The appeal was dismissed. Councillor Watson gave evidence before the Industrial Tribunal and that evidence as to the panel's though process in arriving at their conclusion is summarised at paragraph 6(24) of the reasons. That is the factual background.

The Tribunal decision on liability

At paragraph 7 of the reasons the tribunal found that Hackney had shown that the reason for dismissal in this case was conduct, a potentially fair reason under what was then section 57(2)(b) of the Employment Protection (Consolidation) Act 1978 now section 98(2)(b) of the Employment Rights Act 1996 . That self-direction is entirely consistent with the scheme of the legislation, which put the onus on an employer to prove, on the balance of probabilities, what was the reason for the dismissal. The tribunal then turned to the issue of reasonableness under section 57(3) of the 1978 Act (now section 98(4) of the 1996 Act).It was here that the tribunal took an unusual course. Having heard the evidence called on behalf of the respondent only they invited the parties' advocates to make submissions.Their reasons for taking that course are set out in paragraphs 8 and 9 of the reasons in this way:
"8. At the conclusion of the Respondent's case, the Tribunal came to the provisional view that the evidence from the Respondent's witnesses had not shown that Hackney had acted reasonably or fairly in treating the Applicant's conduct as a reason for the dismissal in all the circumstances of the case."
They then set out their reasoning for arriving at that provisional view. They go on:
"... The Tribunal's task is limited to deciding whether the dismissal was fair or unfair within the meaning of section 57(3) and whether Hackney acted reasonably in concluding that the Applicant was guilty of gross misconduct under the terms of the complaint in the first NOC. The relevant authority is British Homes Stores Ltd v Burchell (Note) [1980] ICR 303, E.A.T.
9. At the conclusion of the Respondent's case the Tribunal indicated to Mr Redhead, Hackney's Counsel, that in the Tribunal's provisional view Hackney had not made out a prima facie case that the Applicant had been fairly dismissed nor that Hackney had acted reasonably in all the circumstances of the case. Mr Redhead was invited to make submissions to the contrary which he did with considerable skill and at some length. The Tribunal did not feel it necessary to call upon Mr Loudon, the Applicant's representative, to respond to Mr Redhead's submissions, because, at the end of Mr Redhead's careful submissions the Tribunal's provisional view that Hackney had not made out its case was, in the Tribunal's view, confirmed."The tribunal go on to find the dismissal unfair, setting out the various factors which led them to that conclusion.

The Liability appeal

On behalf of Hackney, Mr Allen takes essentially two points, which are intertwined.First he says that the tribunal has fallen into the trap, which we identified in Boys & Girls Welfare Society v McDonald [1996] IRLR 129 , of applying literally the guidance given by Sir John Arnold in Burchell v British Homes Stores Ltd [1980] ICR 303 , 304D-E. Whilst there is not doubt that the three-fold Burchell test was quite properly considered by the tribunal in the circumstances of this case, the onus of proof which lay on the employer to establish the reasonableness of the dismissal under paragraph 6(8) of Schedule 1 to the Trade Union and Labour Relations (Consolidation) Act 1974 , then in force, was removed by section 6 of the Employment Act 1980 . Thus, for the past 16 years there has been no onus on an employer to show reasonableness. Of course, if he does not lead any evidence in relation to one or more of the three ingredients in the Burchell test, being matters principally within the employer's knowledge, a tribunal will not find that he has acted reasonably. See the decision of the Inner House of Court of Session in Scottish Daily Record [1986] and Sunday Mail Ltd v Laird [1996] IRLR 665 , paragraph 18, per the Lord President, Lord Hope. That is not this case.Thus the first question is whether the tribunal applied the wrong burden of proof at the reasonableness stage of its enquiry.The Miss Ellenbogen accepts that the question of reasonableness is 'neutral', that is to say, the tribunal should approach that question without either party shouldering the burden of proof. She submits that this is precisely what this Industrial Tribunal did. In particular she relied on the Industrial Tribunal's self-direction at paragraph 7 of the reasons where it is said:
"... The issue for the Tribunal is whether the dismissal was fair or unfair in all the circumstances of the case within the meaning of section 57(3) of the 1978 Act."
And again in paragraph 8 where it is said:
"... The Tribunal's task is limited to deciding whether the dismissal was fair or unfair within the meaning of section 57(3) and whether Hackney acted reasonably in concluding that the Applicant was guilty of gross misconduct under the terms of the complaint in the first NOC."
There is then the reference to British Homes Stores v Burchell .Had the Industrial Tribunal left the matter there we would have accepted that submission. However, they go on to speak, in paragraph 8, of their provisional view that the evidence from Hackney's witnesses had not shown that Hackney had acted reasonably or fairly in treating the respondent's conduct as a reason for dismissal. In paragraph 9 they say that Hackney had not made out a prima facie case; it had not made out its case. These expressions, coupled with the tribunal's reference to the Burchell case itself, compel us to conclude that the tribunal did incorrectly place a burden on Hackney to prove reasonableness.That view is borne out by reference to Mr Allen's second point. He attacks the Industrial Tribunal's course, apparently taken of its own motion, rather than upon a submission of no case to answer by the respondent's representative, Mr Loudoun, of inviting submissions at the chose of Hackney's evidence, and then proceeding to find the dismissal unfair without hearing evidence from the respondent's side.We should say at this stage that we are satisfied that it is open to Mr Allen to argue this point. It does not come within the scope of the 'new point' principle in Kumchyk v Derby City Council [1978] ICR 1116 , as Miss Ellenbogen has submitted.We have been referred to the decision of the Employment Appeal Tribunal in Coral Squash Clubs Limited v Matthews [1979] ICR 607 (Slynn J presiding). That is one of a number of cases decided in this tribunal which deal with the question of submissions at what is known colloquially as "half-time". Others are referred to in Harvey on Industrial Relations and Employment Law , volume 4, T892-4.Coral v Matthews was an unfair dismissal case based on conduct. The submission was made at the close of the employer's evidence on behalf of the employee applicants, that the employer had failed to prove that it had acted reasonably in dismissing the employees, that submission was upheld and the tribunal found that the dismissals to be unfair without hearing evidence from the applicant's side.We pause to observe that, as in the Burchell case, the onus of proving reasonableness then lay on the employer.The employer appealed. The appeal tribunal allowed the appeal on two grounds; first that the tribunal was wrong to refuse to admit hearsay evidence which the employer wished to lead from a temporary manager as to complaints which he had received from customers about the applicants. Secondly, this tribunal held that the Industrial Tribunal should not have stopped the proceedings at the close of the employer's evidence in circumstances where they had refused to admit the hearsay evidence. The two points were therefore intertwined.It was submitted on behalf of the employer that proceedings before the tribunal should always involve evidence from both sides. The appeal tribunal held that that was too extreme a position. Slynn J put the matter this way at page 611G-612A:
" We do not think that there is a rigid rule of the kind which Mr Brooke first contended for. It is clear that in many cases it is of great importance to hear both sides. We think that will be the normal position. This appeal tribunal has already said in cases alleging race or sex discrimination that it is right normally to hear both sides. It has been said also that where constructive dismissal is alleged, in the ordinary case it is important to call upon both sides to give evidence and, indeed, if a question of contribution arises, certainly it should not be decided against the employee without his being allowed, indeed called upon, to give evidence. But as we understand it, this appeal tribunal has never said that the industrial tribunal cannot stop a hearing at the end of the case of the party whose evidence and submissions come first. It clearly is a power which must be exercised with caution; but if the tribunal is satisfied that the party upon whom the onus lies and who goes first has clearly failed either in law or in fact to establish what he set out to establish, then it seems to us that the industrial tribunal is entitled to decide the case at that stage. It should however always bear in mind what was said by this appeal tribunal Ridley v. G.E.C. Machines Ltd. (1977) 13 I.T.R. 195 and in the other cases which also deal with this point."
A number of points arise. First, it is open to a tribunal to stop a case at half-time where the party going first and upon whom the onus lies has clearly failed to establish what he set out to establish. That brings us back to Mr Allen's first point. It is in our judgment because this tribunal mistakenly believed that it was for the employer to establish reasonableness that it may have taken the course of stopping the case when it did. Where there is no burden of proof it is even more difficult to envisage arguable cases where it is appropriate to take such a course.Secondly, Slynn J referred to cases where a question of contribution arises. In this case the Industrial Tribunal found, at the subsequent remedies hearing, that the respondent had not caused or contributed to his dismissal. Just as it would be wrong to decide a question of contribution against the employee, equally, in our judgment, it would be in general be wrong to decide that he had not contributed to his dismissal without the tribunal hearing evidence from the employee. The issue of contribution involves a finding by the tribunal that the employee was in fact guilty of contributory conduct, as opposed to the issue of fairness, which requires the tribunal to consider the reasonableness of the employer belief in that misconduct.That point has been canvassed before us in argument in the liability appeal, however we are not satisfied that before the Industrial Tribunal, Hackney fully and fairly took the point as to contribution. In those circumstances we do not base our judgment in this liability appeal on the question of contribution.Thirdly, there have been and will be utterly hopeless or frivolous cases where a tribunal is entitled to halt the proceedings without hearing the other party. This case, in our judgment, cannot be said to fall into that category.Miss Ellenbogen submits that the tribunal had heard sufficient evidence to decide the issue of reasonableness for the reasons which it gave. Evidence from the respondent's side would not have altered the position. We cannot accept that submission; it is quite impossible for us to speculate as to what the effect of the respondent and any witnesses he chose to call might have had on the overall outcome of the case. In our judgment the tribunal fell into error in its approach in misapplying the burden of proof and in terminating the proceedings at the end of the employer's evidence having heard submissions at that stage.We should add this; we have been referred to the new Rule 9(1) of the Industrial Tribunal Rules of Procedure 1993 which provides:
" (1) The tribunal shall, so far as it appears to it appropriate, seek to avoid formality in its proceedings and shall not be bound by any enactment or rule of law relating to the admissibility of evidence in proceedings before the courts of law. The tribunal shall make such enquiries of persons appearing before it and witnesses as it considers appropriate for the clarification of the issues before it and generally to the just handling of the proceedings."
We accept that this alteration to the Rules emphasises the Industrial Tribunal's role in conducting its own proceedings; however, it must in our judgment be read subject to the existing body of case-law which hold that it is only in exceptional cases that it will be unnecessary to hear both sides before reaching a decision.Miss Ellenbogen's alternative submission is that even if, as we do, we were to find that the tribunal erred in the respects contended for by Mr Allen, we should nevertheless uphold the decision on liability as being 'plainly and unarguably right'. She relies upon the Court of Appeal decision in Dobie v Burns International [1984] ICR 812 .In that case Sir John Donaldson MR gave this guidance to the Employment Appeal Tribunal in exercising its appellate function at page 818G:
" Once you detect that there had been a misdirection, and particularly that there has been an express misdirection of law, the next question to be asked is not whether the conclusion of the tribunal is plainly wrong, but whether it is plainly and unarguably right notwithstanding that misdirection. It is only if it is plainly and unarguably right notwithstanding the misdirection that the decision can stand. If the conclusion was wrong or might have been wrong, then it is for an appellate tribunal to remit the case to the only tribunal which is charged with making findings of fact.
In support of the proposition Miss Ellenbogen has taken us to paragraph 10 of the reasons where the tribunal set out the factors which they took into account in reaching their decision that dismissal was unfair. She submits that all the findings of fact have been made. The decision is plainly and unarguably right.Having considered those submissions we have concluded that we are unable to say that the decision is plainly and unarguably right. An Industrial Tribunal not only makes primary findings of fact, but also makes judgments on those findings in reaching its eventual conclusion. We can see that a different tribunal, properly directing itself might take a different view. We do not know what primary facts might have emerged had the respondent's side called evidence. Accordingly we think the proper course is to remit the whole matter to a fresh Industrial Tribunal for rehearing.In those circumstances we have deliberately not analysed this tribunal's findings in paragraph 10 in this judgment. The new Industrial Tribunal should approach the matter without any preconceptions as to the merits of either sides case as a result of any observations which we might have made on the merits in carrying out that exercise.In these circumstances it is unnecessary to consider the remedies appeal. We shall simply set aside the orders made by the Industrial Tribunal and remit the case for rehearing by a different tribunal.Application for leave to appeal to the Court of Appeal by the respondent is refused.