Superdrug Stores Plc v Fannon [1997] UKEAT 1190_96_2701

EAT
Superdrug Stores Plc v Fannon
[1997] UKEAT 1190_96_2701 · 1997-01-27
HIS HONOUR JUDGE PETER CLARK : This is an appeal by the employer, Superdrug Stores Plc ("Superdrug") against a decision of the Lincoln Industrial Tribunal sitting on 15 August 1996 that it had unfairly dismissed its former employee, the Applicant Mrs Fannon. A separate complaint of unlawful sex discrimination was dismissed. The Tribunal decided that the Applicant was entitled to full compensation for unfair dismissal, without deduction for contributory fault or under the Polkey principle, that is the just and equitable ground, formerly to be found in Section 74(1) of The Employment Protection (Consolidation) Act 1978 (now Section 123(1) of The Employment Rights Act 1996) . Compensation was assessed in the total sum of £4,410.18 to include a basic award. Extended Reasons for that decision are dated 16 September 1996.The Appellant company does not appear and is not represented today. The Notice of Appeal and Skeleton Argument were prepared in this case by Mr Woodcock, an Employment Consultant who represented the Appellant below. Notice of this preliminary hearing having been given, Mr Woodcock indicated that he would attend today. However, by letter dated 20 January 1997 he informed this Tribunal that he would not be attending today due to circumstances which have arisen. He does not expand on what those circumstances were. As a result of receiving that letter on 22 January a member of staff telephoned Superdrug and informed a person there that this letter from Mr Woodcock had been received. He was told that Mr Brian Hammond would be informed of this development and that the company would get back to us. No further communication has been received from the Appellant.In those circumstances we take the view that it is the responsibility of parties to attend on the day appointed for the hearing of their appeals and in those circumstances we shall proceed to give our judgment in this case, having considered it on paper.The facts as found by the Industrial Tribunal were these. The Applicant commenced part-time employment in Superdrug's Waterside Lincoln store in November 1992. At that time she worked a 16 hour week, mornings only, from Monday to Friday. Her contract of employment incorporated Superdrug's employee handbook "Welcome to Superdrug". As to hours of work the handbook provided that from time to time the Applicant might be required to alter her hours of work on either a temporary or permanent basis depending upon business needs and she was required to be flexible with such changes, of which suitable notice would be given.In July 1994 the Applicant accepted a variation to her contract to the effect that she would, as from 1 February 1994, normally work 16 hours per week including Saturday on a rota basis; would work on those days requested by her store Manager and her starting and finishing times of work may be subject to change from time to time on a temporary or permanent basis of which suitable notice would be given.In November 1994 a new Manager arrived at the Waterside store. He wished to alter the Applicant's hours to include two afternoons working to 5.30 pm. In view of her child-care responsibilities, which involved collecting her daughter from school each afternoon, she complained of the proposed alteration to her hours to the then Area Manager, Mrs France. Following discussions, it was agreed that the Applicant would not be required to work beyond 3 pm, the latest time at which she could leave work in order to collect her child.In September 1995 a Mr Doyle took over as Manager of the store. He took the view that too many staff were employed in the mornings and not enough in the afternoons; that hours of work were fixed to suit the convenience of staff rather than the business needs of the store. Accordingly he devised a new rota in accordance with a company-wide policy whereby each employee would work two mornings, two afternoons and one mid-day shift per week. The afternoon shifts were to run through to 5.30 pm.The new rota was imposed without prior consultation with staff, notwithstanding Superdrug's acknowledgement of the desirability for consulting staff about changes contained in the handbook.The Applicant explained her problem of working after 3 pm to Mr Doyle. He thought she could make alternative arrangements and declined to make an exception in her case. He further thought that by making an exception for her that would create problems with other staff members.Mr Doyle did not remind the Applicant of the formal grievance procedure provided for in the handbook. Nevertheless, a meeting took place between, we presume, the Applicant and the Personnel Manager, Mr Hammond and the Area Manager, now a Mr Davies. Mr Hammond promised to discuss the Applicant's particular situation with Mr Davies and Mr Doyle and explore the possibility of changing her rota back to the previous agreed arrangement or find suitable alternative employment. That would have meant a transfer to Superdrug's other Lincoln store. However, that store would also have required the Applicant to work until 5.30 pm on some week days.The Tribunal found, we think not without significance, that the Applicant herself came up with a suggestion to cut the Gordian Knot. A work colleague, called Kerry, was prepared to work the Applicant's afternoon shift. This proposal was rejected by the employer, apparently on the ground that this would be setting a precedent for other employees, and would detract from the principle of flexibility across the entire work-force.The Applicant then had a period of sick absence following a road accident. Shortly before returning to work she telephoned Mr Hammond in order to discover what progress had been made. He told her that no resolution had been found and that he had no alternative but to dismiss her. That decision was confirmed by letter of 14 February 1996, which contained details of a "termination package" offered to her as an alternative to a change in her rota hours which was necessary due to a business reorganisation. The Tribunal found that this was not a negotiated settlement. It was a plain dismissal which the Applicant did not accept.

The Industrial Tribunal Decision

(1) The Reason for Dismissal .We remind ourselves of two propositions of law, endorsed by the Court of Appeal. The first is that a reason for dismissal is a set of facts known to the employer at the time of dismissal. An Industrial Tribunal is not bound to accept the label which the employer places on that set of facts. It may conclude that the reason is different from that advanced by the employer . Abernethy v Mott Hay & Anderson [1974] ICR 323. Secondly, it is open to an appellate court to interfere where the reason for dismissal found by the Industrial Tribunal is unsustainable in light of the findings of primary fact made by that Tribunal. Baxter v Limb Group of Companies [1994] IRLR 572 . We have taken note of the Notice of Appearance where the 'reason for dismissal' box has been left blank. Whether a specific reason was advanced before the Tribunal we do not know.The Industrial Tribunal found, in paragraph 21 of the Reasons, that the employer's reason for dismissal related to the Applicant's conduct. We have concluded that that finding is unsustainable, given the Industrial Tribunal's primary findings of fact summarised above, and their conclusion expressed at paragraph 20 in this way:
"20. We find that the respondent was reasonable in wishing to change the rota for business reasons in order to improve the flexibility of staff availability throughout the working day and to redress the balance from the morning to the afternoon. Thus, the decision to dismiss the applicant for her inability to work the new rota was potentially fair."
In our judgment the reason for dismissal, based on the facts as found, ought properly to be categorised as some other substantial reason, namely a change in working conditions brought about by a business reorganisation. Hollister v National Farmers' Union [1979] ICR 542.

(2) Contribution

We are fortified in our conclusion as to the correct categorisation of the reason for dismissal by the Tribunal's later finding, in paragraph 25, that there was no contributory fault. Such a finding is consistent with a "some other substantial reason" dismissal, rather than a true conduct reason. On the facts as found it is, in our view, quite impossible to conclude:(a) that the employer dismissed the Applicant on grounds that she had misconducted herself or(b) that she was guilty of "blameworthy conduct" ( Nelson v British Broadcasting Corporation (No.2) [1980] ICR 110) in seeking to retain her existing working conditions and discussing with management alternatives to an enforced change in those conditions.

(3) Reasonableness

Notwithstanding that the Tribunal erroneously, in our judgment, characterised the reason for dismissal as relating to the Applicant's conduct, it nevertheless went on to hold that Superdrug had not acted reasonably in treating that reason as a sufficient reason for dismissal in accordance with what is now Section 98(4) of The Employment Rights Act 1996 (formerly Section 57(3) as amended of the 1978 Act).The Tribunal correctly directed itself that the burden of proof in relation to this issue is "neutral". It found that the employer had acted unreasonably on the following grounds:(a) Procedurally, the employer failed to bring to the Applicant's attention the grievance procedure, or her right of appeal against the decision to dismiss her. There was no consultation prior to Mr Doyle's decision to alter the work rota in September 1995.(b) Substantively, we think, the Tribunal found that dismissal fell outside the range of reasonable responses because the employer could have considered the offer of Kerry to work the Applicant's afternoon shift, among other alternatives set out at paragraph 23 of the Reasons.

(4) Remedies

The Applicant sought compensation only. Her full loss was awarded. Apart from finding that the Applicant had not contributed to her dismissal the Tribunal also declined to make a Polkey deduction. We bear in mind the Tribunal's duty to provide adequate reasons for its findings. ( Meek v City of Birmingham District Council [1987] IRLR 250 . The finding, in paragraph 25, that "A 'Polkey' deduction is not appropriate" appears a little terse. However, we infer that the Tribunal concluded that had Superdrug acted reasonably in accepting the offer by Kerry to work the Applicant's afternoon shifts, the dismissal would not have taken place. That is a finding which, in our judgment, the Tribunal was entitled to make.

The Appeal

The Notice of Appeal advances two grounds of appeal namely:
"(1) The grounds upon which this appeal is brought are that the industrial tribunal erred in law in that given the decision to dismiss the applicant for her inability to work the new rota was potentially fair, then the grounds for her dismissal were fair.
(2) It is also felt that the contribution made by the applicant towards her dismissal was not taken into consideration by the tribunal and that the applicant was also restricting her chances of finding future employment by being specific with regard to working hours, location and job type."In the Skeleton Argument it is said:
"1. We will argue that the Tribunal found the reasons for dismissal to be fair and did not take this into consideration when calculating any contribution to the dismissal by Mrs Fannon.
2. Mrs Fannon's contract was clear in the need for flexibility and we would also argue, therefore, that consultation with regard for flexibility of hours was not an issue.3. All other reasonable alternatives were investigated and considered and Mrs Fannon was unwilling to be flexible at any time."In our view these grounds disclose no arguable point or points of law for the following reasons.(1) We do not construe the Applicant's contract of employment, as varied on 16 July 1994, as giving the employer carte blanche to alter her hours of work at will. By imposing different hours of work without her consent the employer was in breach of her contract.(2) A finding by the Industrial Tribunal that the reason for dismissal (wrongly categorised as conduct in our judgment) was potentially fair merely takes the employer past the first hurdle in an unfair dismissal complaint, namely the reason for dismissal. It is then for the Tribunal to determine whether that potentially fair reason was a sufficient reason under Section 98(4) of the 1996 Act.(3) Given our finding as to the true reason for dismissal as explained above, we conclude that the Tribunal was entitled to come to the conclusion that the Applicant did not contribute by her own conduct to her dismissal.(4) As to the Skeleton Argument, which raises contentions additional to those in the Notice of Appeal;(i) We have dealt with the Tribunal's finding of a potentially fair reason; the true reason for dismissal and the question of contribution above.(ii) References in the contract of employment to the need for flexibility cannot override the requirement of consensual alteration to the contractual hours of work. The Tribunal was entitled to conclude that a reasonable employer would have consulted properly over the change of hours.(iii) The Tribunal found that reasonable alternatives were not properly investigated and considered by the employer. That is a finding of fact with which we cannot interfere.

Generally

In considering whether the Tribunal's decision was "plainly and unarguably right", not withstanding its erroneous approach to the reason for dismissal, Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812 ., we have taken into account, among other factors, the question as to whether the advantage of implementing the reorganisation in working hours to the employer outweighed any disadvantage to the Applicant. Given the finding as to the availability of a fellow employee, Kerry, to work the Applicant's afternoon shift, we conclude that the balance does not favour the employer. We have not, however, treated that as the sole factor. Richmond Precision Engineering Ltd v Pearce [1985] IRLR 179. Overall, we have concluded that there are no grounds for overturning this Tribunal's decision.Accordingly the appeal must be dismissed.