Taylor v H Backhouse (Baker Street) Ltd [1996] UKEAT 729_96_0312

EAT

Taylor v H Backhouse (Baker Street) Ltd

[1996] UKEAT 729_96_0312 · 1996-12-03

MR JUSTICE MORISON (PRESIDENT) : This case has an unfortunate history. The applicant, Miss Taylor, was dismissed on 14th July 1993. She was employed in a betting shop which was run by her employers, H Backhouse (Baker Street) Ltd. She complained of unfair dismissal. The Industrial Tribunal heard her complaint and concluded that she had not been unfairly dismissed by a decision which was entered in the register and sent to the parties on 10th August 1994.

Miss Taylor appealed against that decision, essentially upon the ground that the Industrial Tribunal appeared not to have applied their mind to the provisions to what were then section 57(3) of the Employment Protection (Consolidation) Act 1978 .

The Employment Appeal Tribunal heard that appeal on 29th November 1995, and in their judgment they allowed the appeal. The relevant passage:

"... It [ the Industrial Tribunal ] cannot close its eyes to the whole range of pros and cons of dismissing the employee. The mere fact that the Tribunal here found that the employer had good and sufficient commercial reasons for altering the contractual terms does not mean that dismissal therefore was fair or that the Industrial Tribunal had given proper consideration to Section 57(3). For example in the present case at the time of dismissal the altered hours of work had only some 10 weeks to run before the original hours of work would re-apply, and in fact there were only 6 weeks left from the date when the Appellant's employment actually ended. That could be a relevant consideration when deciding whether or not to dismiss. Length of service and the performance of the employee in the past will normally also be relevant considerations. Such matters may all affect the substantial merits of the case, and those merits must be considered, and it must be possible to tell from the decision that they have been considered.

In the present decision not merely does the Tribunal make no express reference to Section 57(3) but its two concluding paragraphs seem to be dealing almost exclusively with the test set out in Section 57(1)(b) which is quoted in terms. The final paragraph appears to deal solely with Section 58(1) test, with the Industrial Tribunal concluding that the Appellant's refusal to accept the company's decision:

"when all other Managers and counterhands had done so amounted to "some other substantial reason of a kind as to justify her dismissal" within the meaning of Section 57(1) of the Employment Protection (Consolidation) Act 1978."

The decision then immediately states:

"Accordingly we find that the applicant was fairly dismissed."

We are bound to comment that that final sentence does not follow from the preceding passage in the way which "accordingly" would suggest. It may be that the Tribunal did have in mind the further stage laid down by Section 57(3) and the consideration there wet out, but we cannot identify from the reasoning any clear indication that that was so. As thing stand the reasoning of the decision are deficient. For that reason this appeal must be allowed and we will remit this matter for it to be reconsidered in the light of this judgment."

Accordingly the matter went back before the original Industrial Tribunal who considered the matter again. At the outset of those proceedings, they made a short statement indicating that they had in fact already considered section 57(3) when giving their original decision contrary to the impression given to the Employment Appeal Tribunal. They then gave their decision by a document which was sent to the parties on 22nd May 1996. The decision is very short:

"Mr Millar representing the applicant in a lengthy and detailed submission has drawn our attention to a number of matters which he contends renders the respondents' decision to dismiss the applicant unreasonable and therefore unfair. We cannot uphold his submission. In our view the one single fact which rendered the respondents' decision to dismiss not only reasonable but unavoidable was that the applicant was the only one out of 18 managers who refused to accept the change to her contractual terms of employment so that she could be required to cover evening racing as and when necessary. Her refusal to do so caused considerable resentment among the other 17 managers and at no time, up to and including the appeal hearing, did the applicant indicate that she was prepared to accept the changes in principle on any basis. Although at the date of her dismissal there was only six weeks of evening racing left, we are completely satisfied that the respondents would have lost all credibility with the rest of their staff if they had dealt with the matter in any way other than by dismissing the applicant. We find that the decision to dismiss was reasonable with the provisions of s.57(3) of the Act."

Miss Taylor appeals against that decision, arguing in effect that she has been denied the reconsideration which the Employment Appeal Tribunal had suggested should take place, pointing out that at the outset the Industrial Tribunal indicated that it had already considered section 57(3), and therefore she must have been left with the clear impression that it did not matter what was said on her behalf, the decision that they had previously arrived at would remain the same.

On behalf of the employers before us, Mr West has argued that because this was a case which involved some other substantial reason of a kind such as to justify dismissal, the employers having established that reason for the dismissal were, as he put it, "half-way home" under the test to be applied under section 57(3). We regard that submission as fundamentally wrong.

I refer to paragraph 808 of Harvey on Industrial Relations and Employment Law Volume 1, Section D, where it is headed "THE BURDEN OF PROOF":

"In this first stage of determining the reason for the dismissal, the burden of proof is on the employer. But he does not at this point have to establish that the principal reasons did justify the dismissal, merely that it was the reason he in fact relied upon and that it was capable of justifying the dismissal. The question of whether it did in fact justify it will depend upon whether the tribunal is convinced that the employer acted reasonably in all the circumstances in treating the reason as sufficient, ie whether s 98(4)-(6) [ of the Employment Rights Act 1996 ] has been complied with. There are two distinct stages, and tribunals should not confuse them. Indeed, until a reason for dismissal is established, the tribunal should not go on to consider s 98(4)-(6) at all (see Post Office Counters v Heavey [1989] IRLR 513, [1990] ICR 1, EAT). Moreover, that case also demonstrates that if the employer relies upon a reason and it is not suggested that it is not the real reason, it will generally be an error of law for an industrial tribunal to find that it is not in fact the reason relied upon by the employer."

It seems to us quite clear from this passage which we believe accurately sets out the legal position, that there is no distinction between a reason such as conduct or capability, or a reason of a kind which is sufficient to be capable of justifying the dismissal when it comes to the question of applying section 57(3) of the Act.

It seems to us that the tribunal may have been led into error by a submission of this kind, because it seems to us that in the second decision they have not visibly weighed the various personal factors which this court had indicated should be taken into account, or should like to be taken into account, in an exercise which involved a consideration of equity and the substantial merits of the case.

Furthermore as Mr Wright pointed out during the course of the hearing, it seems to us that the Industrial Tribunal, without hearing any further evidence, have arrived at a conclusion in the second case which was inconsistent with the conclusion that they had arrived at in the first instance. It seems to us, as he was correctly pointing out, that the sentence in paragraph 7 of the first decision:

"In these circumstances although it was perfectly proper for the applicant to endeavour to negotiate additional benefits for herself she was bound by the company's decision in this regard and her refusal to accept it when all other Managers and counterhands had done so amounted to some other substantial reason of a kind as to justify her dismissal ..."

is inconsistent with the finding which I have already referred to which said that the applicant did not indicate that she was prepared to accept the change in principle "on any basis".

In these circumstances, despite the submission by Mr West, there is a conclusion of an Industrial Tribunal which effectively says that they had already applied their minds to section 57(3) and therefore we should not have allowed the appeal in the first place. It seems to us that there are serious concerns as to whether Miss Taylor's case has been given proper consideration by an Industrial Tribunal applying its mind to the two stage test which has to be applied in every case of unfair dismissal where the employer has put forward a reason which falls within what was section 57(2).

Accordingly and very reluctantly, but we see no other course, this is a case where Miss Taylor's claim for unfair dismissal is going to have to be properly considered by an Industrial Tribunal, plainly not the Industrial Tribunal which has attempted to consider the matter so far, but by a new Industrial Tribunal, freshly constituted for the purposes of determining Miss Taylor's complaint. It seems to us that that should take place as soon as is reasonably practicable, and we would respectfully ask the Regional Chairman to make the necessary arrangements to give effect to that request. As we have already indicated, the dismissal is now more than three years ago, and it is with great reluctance that we require the case to be re-litigated at this late stage.

It seems to us, very unfortunate that both parties have found themselves in this position through perhaps no particular fault of their own. Accordingly we allow the appeal and order that the case be heard and determined by a fresh tribunal.