White v South London Transport Ltd [1997] UKEAT 910_96_0910

EAT
White v South London Transport Ltd
[1997] UKEAT 910_96_0910 · 1997-10-09

JUDGE PETER CLARK :

On 30 January 1995 the Appellant, Mr Terence White, presented an Originating Application to the Central Office of Industrial Tribunals complaining of unfair dismissal, unlawful deductions from his wages in failing to make overtime payments allegedly due to him, and discriminatory treatment on the grounds of his sex, against the Respondent, his former employer, South London Transport Ltd.The matter occupied some eight days of hearing before the London (South) Industrial Tribunal in November 1995 and February 1996. The Tribunal met again on 3 June 1996 to consider the case. Finally, by a decision with Extended Reasons promulgated on 27 June 1996 the Tribunal unanimously dismissed all three complaints.Against that decision the Appellant served a Notice of Appeal dated 7 August 1996. The appeal came on for a Preliminary Hearing before this Tribunal on 7 March 1997. On that occasion, in a short judgment delivered by the President, Morison J, the Tribunal permitted the matter to proceed to a full hearing, limited to three points relating to the Tribunal's decision to dismiss the complaint of unfair dismissal. It follows that we are not concerned at this full appeal hearing with the remaining two complaints originally raised in the Originating Application.In order to place the points held to be arguable at this full hearing into context, it is first necessary to summarise the material factual findings made by the Industrial Tribunal.

The Facts

The Appellant commenced employment with the Respondent's predecessor, London Transport, in its Bus Division, on 28 April 1975. By 1994 he had reached the level of Grade R14 Operating Manager for Brixton and Norwood Bus Garages. He was a highly effective and hardworking manager, who put in long hours to raise the performance in garages which he managed.On 13 July 1994 his general practitioner, Dr Gallagher issued a one month sick certificate. The diagnosis was hypertension, and the certificate records that he was under investigation for coronary artery disease. Subsequent certificates were issued in respect of heart disease. The Appellant never in fact returned to work with the Respondent.On 15 July the Appellant met with Mr Withey, the then Managing Director of the Respondent. He told Mr Withey of his condition and that his doctor had ordered him to have a complete rest. He then expected to be off work for two or three months.On 12 August the Appellant met with Mr Withey and Mr Scowen, the Commercial Director. At this time the privatisation of the business was in the offing. Mr Withey, himself a trustee of the pension fund of which the Appellant was a long-standing member, raised the question of ill-health retirement for the Appellant. He explained that if the Appellant retired on health grounds before privatisation he would receive a more favourable pension, by some £5,000 per annum, than if he retired after privatisation. Unsurprisingly, the Appellant was very upset about his health problem. Nothing was resolved at that stage, although both the Appellant and Mr Withey thought it a good idea for the Appellant to see the company doctor, Dr Langley.On 17 August 1994 Dr Langley saw the Appellant. He gave him a static ECG test and checked his blood pressure.On 7 September 1994 the Appellant underwent an exercise test designed to record his heart function.In October 1994 Mr Withey spoke with Dr Langley, who proffered the opinion at that stage that the Appellant's recovery would be a "long job". On 11 October Dr Gallagher issued a three month medical certificate.On 20 October Mr Withey visited the Appellant at home. The Tribunal made a finding, at paragraph 17 of their Reasons that the question of alternative employment was discussed, but that the Appellant said that he was not interested in anything but a front line job. That finding was challenged in the Notice of Appeal. At the Preliminary Hearing the President directed that the Chairman produce his notes of the evidence supporting that finding. He duly did so. The point is no longer pursued by Mr Ford on behalf of the Appellant. That disposes of the third point identified by the President in his judgment.Reverting to the meeting of 20 October, there was discussion about the Appellant's pension position and other financial matters, including his overtime claim which the Tribunal rejected, and with which we are not concerned. Mr Withey told the Appellant that he was coming to the conclusion that he would have to dismiss the Appellant on medical grounds because he would not be able to return to work for a few months. However, he said that he would consult with Dr Langley before starting action for a medical dismissal.Following that meeting Mr Withey left a message for Dr Langley to contact him. In the event he never did speak to Dr Langley before himself resigning from the Respondent on 4 November. Shortly before that resignation, on 2 or 3 November, Mr Withey spoke to the Appellant, telling him that he intended to dismiss him subject to speaking to Dr Langley. Mr Scowen took over the case, following Mr Withey's resignation, having had the position explained to him by Mr Withey.On 10 November a Personnel Officer, Mr Warlow, telephoned the Appellant to arrange a meeting with Mr Scowen at which, so Mr Warlow informed the Appellant, Mr Scowen intended to terminate his employment.That meeting took place on 16 November. It was attended by the Appellant, Mr Scowen and Mr Warlow, who took notes. The Tribunal's findings as to that meeting are set out in paragraph 23 of their Reasons, as follows:
"Mr Scowen went through the medical position in some detail with Mr White. It was clear to him that Mr White was not likely to return for some time. Mr Scowen decided to dismiss Mr White because of the poor prognosis and the fact that there was no certainty of a return even in the long term. Most of the meeting involved discussing issues of payments that Mr White should receive on termination. At no time up to and including this meeting did Mr White express any objection or concern regarding his dismissal or likely dismissal on the basis of his ill health."
In the course of that meeting Mr Scowen informed the Appellant that his employment was to be terminated on medical grounds.Following the meeting the Appellant saw Dr Langley. On the same day Dr Langley wrote to Mr Warlow in these terms:
"As you know, I have followed up Mr White's history during his recent investigation for hypertension and ischaemic heart disease, and saw him again today. He is not fit to continue in employment and is retiring on medical grounds.
"I fully support an application for an enhanced level of benefits appropriate to his seniority etc on medical grounds."
Also, on 16 November 1994, Mr Warlow wrote to the Appellant, referring to his sick absence since 17 July, and to information supplied by the Appellant at the meeting to the effect that he was to see a heart specialist on 29 December 1994, and thereafter he would undergo an angiogram.The letter continued:
"It was agreed that there was no prospect of you resuming work in the foreseeable future and the Company Doctor has stated that you are not fit to continue in employment. In these circumstances you were informed that your employment with the Company would be terminated on medical grounds with effect from 27 November 1994."
That paragraph was disputed by the Appellant in a letter which he wrote to Mr Brown, the new Managing Director, on 1 December 1994, where he said:
"I did not state, and it was not agreed as Warlow's letter indicates, that 'there was no prospect of resuming work in the foreseeable future'. I also refute the suggestion that the company Doctor had stated that I was not fit to continue in employment prior to the meeting with Scowen on 16 November."
For completeness, following termination of the employment on 27 November 1994, the Appellant was seen by his Consultant on 29 December 1994; presumably an angiogram followed because on 30 May 1995 he underwent an angioplasty. He remained unfit for work up to and during the Industrial Tribunal hearings.

The Industrial Tribunal Decision

The Tribunal expressed its conclusion as to the unfair dismissal complaint in paragraphs 43 to 46 of the Reasons in this way:

"Unfair Dismissal

43. The Tribunal was satisfied that the reason for dismissal was Mr White's illness rendering him unable to work for the Respondents. This is a reason related to capability for the purposes of section 57(2)(a) of the 1978 Act.44. So far as fairness was concerned, it was clear to Mr Withey and, latterly, to Mr Scowen that Mr White would not be able to return to work in the foreseeable future if at all. Mr Withey intended to speak to Dr Langley one last time before reaching a final decision to dismiss but never did so before he resigned. He did not take the decision to dismiss although it was his intention once he had spoken to Dr Langley. Mr Scowen was advised by Mr Withey of Mr White's position. Mr Scowen did not contact Dr Langley before deciding to dismiss Mr White. However Mr White was not resisting dismissal even though he knew that that was the purpose of the 16 November meeting. Furthermore at that meeting Mr White was asked to confirm the medical position in some detail which he did. He had been off work for four months and had been issued a three months' certificate with a further two months to run and was not likely to return at the end of that period. The Respondents were trying to act, in those circumstances, to his benefit by ensuring that as he was not likely to return in the foreseeable future and was therefore likely to be dismissed at some stage in the future, his dismissal occurred before privatisation so that he would gain the benefit of an extra £5,000 per year on his pension.45. In those unusually, if not unique, circumstances the Tribunal found that the Respondents acted reasonably in treating the reason for dismissing Mr White as a sufficient reason for dismissing him.46. If the Tribunal was wrong in this decision, it would have found that, bearing in mind the letter produced by Dr Langley on 16 November, dismissal would have occurred on the same day and therefore Mr White would have suffered no loss at all."

The Appeal

The third point identified by the President in his judgment at the Preliminary Hearing having fallen away, two issues remain for our determination. The President formulated them in this way:
"In the first place, we think that a full tribunal should consider whether the conclusion that the dismissal was fair despite the fact that at that time the employers had not got evidence from their own doctor was perverse.
Secondly, whether the tribunal misdirected itself in paragraph 46 of its decision as to the effect of their failure to obtain Dr Langley's report before the decision to dismiss was taken. They deal with it on the basis that Mr White would have suffered no loss at all. It may be arguable that the proper conclusion was that the employers had unfairly dismissed Mr White albeit that he was not entitled to any compensation because the unfairness did not cause him any loss."Having considered the helpful skeleton arguments, lodged by the parties' advocates in advance of the hearing, we invited them to consider and present submissions in relation to the date at which the reasonableness of the reason to dismiss is to be assessed for the purposes of these points identified by the President.In Stacey v Babcock Power Ltd [1986] ICR 221, the EAT (Waite J presiding) held that the material date was the effective date of termination of the contract, not the date on which notice of termination was given. The significance of that holding was that on the facts of that case dismissal by reason of redundancy was fair at the time notice was given, but unfair at the time that the notice expired due to an up-turn in work during the notice period. The EAT allowed the Applicant's appeal in that case and substituted a finding of unfair dismissal for the Industrial Tribunal's finding that it was fair.The principle in Stacey has been cited without disapproval by the Court of Appeal in Parkinson v March Consulting Ltd [1997] IRLR 308. We propose to follow and apply the reasoning in Stacey .In so doing we reject Mr Ford's submission that as a matter of policy the principle in Stacey , there favouring the employee, should not apply so as to allow an employer to bolster his case that the dismissal was fair. Just as the employer may rely upon consultation in a redundancy dismissal case occurring during the notice period, (see Mugford v Midland Bank Plc [1997] IRLR 208 , paragraph 40) so, in a capability case such as this, he is entitled to rely on medical evidence which comes to hand after notice is given, but before the contract terminates, if that evidence supports the reason for dismissal relied upon. Conversely, if medical evidence is obtained during the notice period which undermines the state of the employer's knowledge as to the employee's medical condition at the time when notice was given, that may in turn render an otherwise fair dismissal into an unfair dismissal.Applying that approach to the facts as found by this Tribunal, we are quite satisfied that the opinion obtained from Dr Langley and contained in his letter dated 16 November was wholly consistent with the Respondent's understanding of the medical position obtained from the Appellant himself at the meeting on that date and borne out by the medical certificates which the Appellant had provided from Dr Gallagher. In our judgment no further consultation in these circumstances with the Appellant was necessary after receiving Dr Langley's opinion which was all of a piece with the picture which had already emerged. Far from being a perverse finding, the Tribunal's conclusion in our judgment is strengthened and affirmed by reference to Dr Langley's final opinion which was a matter which this Industrial Tribunal was entitled to take into account when considering the reasonableness of the dismissal.In these circumstances the second point in the appeal does not strictly arise. The Industrial Tribunal were merely indicating in paragraph 46 of the Reasons that if they were wrong in finding the dismissal to be fair, then the Appellant would have suffered no loss in view of Dr Langley's opinion. That of course deals only with the question of a compensatory award. It is common ground that had the dismissal been found to be unfair the Appellant would have been entitled to a basic award. However, since we uphold the Tribunal's finding of fair dismissal it follows that this appeal must be dismissed.