Swallow International Hotel Ltd v Elhaouari [1996] UKEAT 477_95_2711

EAT
Swallow International Hotel Ltd v Elhaouari
[1996] UKEAT 477_95_2711 · 1996-11-27

JUDGE PETER CLARK:

This is an appeal by the employer against a decision of the London (North) Industrial Tribunal which upheld the Respondent's complaint of unfair dismissal following a hearing held on 27 February 1995. The Tribunal went on to award compensation of £4,834.92, although it is agreed between the parties that that figure is mathematically incorrect; it should have been £4,543.92. Extended reasons for that decision are dated 13 March 1995.The Respondent originally commenced employment at the Appellants' hotel in Cromwell Road, London, as a Room Service Waiter on 22 May 1990. He had a period away from the employment which broke continuity of service, so the Tribunal found. His period of continuous service for present purposes started in about August 1991.He was dismissed following a staff party held at the hotel on 21 January 1994.What happened that night was significantly in dispute between the parties. We should say immediately that this is a case in which we might have been assisted by the Chairman's notes of evidence. An order was made that the notes be provided at a preliminary hearing in this case held on 10 October 1995. However, the Employment Appeal Tribunal was informed by letter dated 19 August 1996 that the Industrial Tribunal was unable to locate the Chairman's notes. We must therefore piece together the story as best we can from the Tribunal's reasons and the pleadings.The reasons records only the evidence given on behalf of the Appellant by Mr Habib, the duty manager. Apparently, other witnesses were called by the Appellant. He said that the Respondent had to be removed from the party due to his behaviour. It was claimed that the Respondent became violent and swore at Mr Habib. In the end, he had to be forcibly removed by security staff and party guests, including an off-duty policeman married to a member of staff. The police were called and the Respondent was taken away. He was charged with being drunk and disorderly. It was reported back to the manager that the Respondent had been under the influence of drugs.The Tribunal further record that in his evidence and form IT1 the Respondent gave a completely different account. The reasons do not set out that account in any detail, but in the IT1 he contended that he had been stared at by a barman called Peter in an aggressive and intimidatory manner, there was later some pushing between them and then the Respondent was spoken to by Mr Habib, who was with two security officers. He claimed that the security officers grabbed him roughly and he was struck by Peter. He was then ejected from the hotel.He agrees that he was arrested by several police officers. The notice of appearance says that it took five policemen to manoeuvre him into the police van and, he claims, he was assaulted by police inside the van, whereby he suffered injuries which necessitated hospital treatment. The Appellants agree that he was injured. They say because he head-butted the van.Whatever the cause of his injuries he informed the hotel through his wife on Monday, which would be 24 January, that he was unfit for work. The position was discussed by Miss Hough of personnel and Mr Gold, a director of the hotel, and they decided to dismiss the Respondent. Without more, they sent him a letter of dismissal that day. He was not suspended pending a disciplinary investigation; he was not called to give an account of himself, a decision was taken in his absence. The Appellants' disciplinary procedure provided for a right of appeal. He did not appeal. His employment was terminated.

The Industrial Tribunal decision

As to fairness, the Tribunal express their conclusions in paragraph 6 of the reasons in this way:
"6 It is a fundamental part of a fair disciplinary procedure that an employee must know the case against him, and is entitled to make representations before any decision is made to dismiss him. At this Tribunal the Respondent [employer] were not able to bring copies of contemporaneous notes which were alleged to have been made by Miss Hough and by Mr Habib, they both said that the statements were sent to the police for a prosecution. For those reasons we find that the dismissal was unfair."
Those conclusions should be read in conjunction with their findings at paragraph 5 where they say:
"5 The Applicant in evidence and his IT1 gave a completely different story, and it is clear to us that before deciding to dismiss the Respondent [employer] did not investigate the matter, and did not ask the Applicant for his version of the events, neither did they inform him that he was accused of drug taking."
In dealing with compensation, the Tribunal heard from the Respondent that he was offered at job at another hotel in September 1994, which he did not take. They calculated his net loss of earnings by applying a cut-off in September 1994. They also awarded sums in respect of loss of statutory rights and the value of meals at the hotel. Further, they made a full basic award based on his continuous service which they had founded started in August 1991.

Unfair dismissal

Mr Jack, for the Appellants, first attacks the Industrial Tribunal's finding of unfair dismissal.He submits that the Tribunal overstated the procedural requirements for a fair dismissal and in so doing misdirected themselves in law. Secondly, he complains that the Tribunal failed to make adequate findings of fact - or any findings of fact - as to what actually happened on the night of the party. He submits that had the tribunal made the necessary findings it would have concluded that the dismissal was procedurally fair and that the dismissal in all the circumstances was a reasonable response.We cannot accept that the Tribunal erred in its approach to the procedure applied by the Appellants. The importance of giving an employee a chance to state his case with advance notes of the charge against him has been emphasized time and again. The standards of fairness are immutable, see McLaren v National Coal Board [1988] IRLR 215 , applying Polkey vAE Dayton Services Ltd [1988] ICR 142 , per Sir John Donaldson MR, paragraph 20. We see nothing wrong with the Tribunal's approach, which reflects the approach of Wood J in Spink v Express Food Groups Ltd [1990] IRLR 320 , paragraph 26. The Respondent was given no opportunity to state his case in circumstances where there was a complete conflict of evidence. We can properly infer that this led the Tribunal to conclude that this was not an exceptional case where normal disciplinary procedures could be departed from. Nor do we consider that the Respondent can be criticized for not pursuing the internal appeal mechanism on the facts of this case. Christie v Rolls Royce (1971) Ltd [1976] IRLR 336 . Further, the question for the Tribunal at this stage is not whether the employee is in fact guilty of the misconduct alleged, but whether it had an honest belief, based on reasonable grounds following a reasonable investigation, that he was guilty of the offence alleged. The well-known Burchell test. At this stage of the enquiry it is not necessary to make findings of fact as to the circumstances of the incident in order to determine the question of procedural fairness.Accordingly, we reject the employers' appeal against the finding of unfair dismissal. However, that does not end the matter.

Compensation

The statutory regime in force at the time of this Tribunal hearing was contained in sections 74 and 73 of the Employment Protection (Consolidation) Act 1978, which provided, so far as it material:
"74 (1) ... 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.
. ..(4) In ascertaining the said loss the tribunal shall apply 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.. ..(6) 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.73(7B) Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) ... was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly."Dealing first with the compensatory award, the Tribunal awarded the Respondent his full loss up to September 1994, after which, we infer, the Tribunal found that he had failed to mitigate his loss under s.74(4).

Just and equitable

Where a dismissal is held to be unfair on procedural grounds, as in this case, it is necessary for a tribunal to consider whether, had a fair procedure been carried out, the employee would nevertheless have been dismissed. Alternatively, what was the percentage chance of his retaining his employment (see Polkey , per Lord Bridge, at page 163H).In this case the Tribunal failed to carry out this exercise. It made no findings of fact as to what in fact happened on the night of 21 January (a different enquiry to that necessary in relation to the fairness of the dismissal under the Burchell test): it did not apply the Polkey approach to which we have referred. In this respect we find that the Tribunal fell into error.

Contributory fault

This matter was raised before the Industrial Tribunal. Indeed, it was apparently conceded on behalf of the Respondent by his then representative, Mr Tranter, that a 25 percent finding was appropriate. Where the question of contribution is raised, an Industrial Tribunal must make specific findings on that issue, Portsea Island Mutual Co-operative Society Ltd v Rees [1980] ICR 260 . It must decide, having found the facts, whether the employee is guilty of culpable or blameworthy conduct which caused or contributed to the dismissal, Nelson v BBC (No. 2) [1980] ICR 110 . If it so finds, it must assess the level of contribution in percentage terms. It should also be remembered that different levels of contribution may be found under s.74(6) and s.73(7B) in relation to the compensatory award and basic award respectively. Finally, it must apply the percentage reductions, whether under s.74(1) or s.74(6), or both, in that order, to the gross compensatory award calculation. (See Rao v Civil Aviation Authority [1994] ICR 495.)In these circumstances we reject Mr McDonough's submission that it can properly be inferred that the Tribunal considered and rejected the argument, first that there should be a Polkey reduction under s.74(1), and secondly that there was no contribution to his dismissal by the Respondent. There simply is not sufficient reasoning to explain to the Appellant why it failed on both of these points ( Meek v City of Birmingham District Council [1987] IRLR 250 ) .

Conclusion

This appeal succeeds in part. We direct that the finding of unfair dismissal stands, but we allow the appeal against the Tribunal's assessment of compensation. We have heard representations from the parties as to what course we should now take. In our judgment the proper course is to remit the assessment of compensation to a fresh Industrial Tribunal to consider the evidence anew, to make the necessary findings of fact and to apply the law as we have sought to state it.