Kingdom Of Leather Ltd v Da Silva [1998] UKEAT 1194_98_0112

EAT
Kingdom Of Leather Ltd v Da Silva
[1998] UKEAT 1194_98_0112 · 1998-12-01
MR JUSTICE MORISON (PRESIDENT) : The purpose of this hearing is to determine whether there is an arguable point of law in the Notice of Appeal which has been filed on behalf the appellant employers against the unanimous decision of an Industrial Tribunal held at Stratford. The hearing before the Industrial Tribunal took place over a three day period in July 1998 and their written decision was sent to the parties and promulgated on 3rd August 1998. By their decision the Industrial Tribunal concluded that the applicant, Mrs Da Silva, had been unfairly dismissed by the employers, Kingdom of Leather Ltd. They adjourned the remedy hearing to a date to be fixed. They also concluded that the employers were liable to pay damages to the employee for breach of contract in relation to holiday pay.The relevant circumstances which need to be recited for the purposes of this judgment are set out in the tribunal's extended reasons. The applicant had been employed as a manager of the respondents' furniture showroom at Harlow in Essex and she had been employed by them for a period in excess of five years. She went off sick from 19th May 1997. The tribunal concluded that the disciplinary hearing which was arranged for 9th September was arranged in circumstances which were unreasonable because she was unable to attend it through her illness and it was as a result of that hearing that the employers decided to terminate her contract of service.The Originating Application was filed with the Industrial Tribunal and the respondents put in a reasonably lengthy response justifying the grounds on which they intended to resist her application. In paragraph 2 they say:
"In or about May 1997, the Applicant stated she wanted to dismiss another employee, one Karen Nicholson. The Applicant stated that she would resign if Karen Nicholson was not dismissed. The Applicant's decision to dismiss was overruled by the Managing Director."
Thereafter, Mrs Da Silva failed to attend for work.The Industrial Tribunal in their decision succinctly summarised the terms of the employers' IT3. They then in paragraph 3 direct themselves to the issue which they had to determine, namely was the conduct of the applicant in one or more of the following respects such that the respondents were entitled reasonably to treat that conduct as a ground for dismissal. In short order they set out and summarised the seven points which they had referred to in paragraph 2 of the decision. One of those points was whether the applicant had been deliberately undermining one of her sales staff, namely Karen Nicholson. They then direct themselves to the law. No criticism can be made of what they say in paragraph 4, where they indicate that the employer must show the reason for the dismissal and that it is a reason which falls within subsection (2). The tribunal then refer to s. 98(4) of the Act.In paragraph 8 the tribunal set about making their findings of fact. They conclude that prior to May 1997 the applicant had been a satisfactory manager; that in early 1997 a new sales recruit, namely Karen Nicholson, was recruited who plainly impressed senior management; in early May 1997 the new recruit complained to senior management, to the person who had taken over the personnel functions, about the way that her manager, the applicant, had been behaving in her professional capacity, that is failing to close two deals which, in the new recruits view, should have been successfully brought to a conclusion. There was then a certain amount of tooing and froing, and on Saturday, 17th May 1997 at the Harlow store, the applicant took Karen Nicholson aside. She had discovered that Karen Nicholson had gone over her head directly to Mr Banks. She said that if she, Karen, had a problem she would have expected her to have brought it to her attention. Miss Nicholson denied having a problem. When pressed as to why she had complained, she stated that she did not have to give reasons, that she felt that the applicant did not like her and that the applicant believed that Miss Nicholson had been responsible for the dismissal of the applicant's husband who had left the company a short time before.On Sunday, 18th May 1997 the Managing Director, I think, attended at the Harlow store. She, very sensibly, tried to adopt the policy of burying the hatchet between the applicant and Miss Nicholson, and she was not prepared to support the applicant when she stated that she would be unable to work with Miss Nicholson in the future, after the abuse and foul language which had been uttered to her. The Managing Director's view was that the value to the company that Miss Nicholson represented in terms of her sales ability was of importance.The applicant was upset at the failure by senior management to back her decision in relation to Karen Nicholson. She thought that either Karen Nicholson should be dismissed or, alternatively, that the two should not be required to work at the same store. The applicant informed the Managing Director that she would be unable to work with Miss Nicholson, and that she needed to go home because she was unwell. She therefore started her sick leave as from the following day.In their letter of dismissal, following the 9th September hearing, but dated the same day, the company set out the respects in which the behaviour of the applicant had fallen below the standard expected of a manager. Included within that letter was a complaint that the applicant appears to have deliberately undermined the sales efforts of Karen Nicholson and that her management behaviour had contributed to the very poor sales performance which had now been revealed as a result of her inexperienced stand-in manager producing better figures whilst she was away sick.The tribunal made a number of findings in paragraph 9 under the rubric "The Tribunal's Assessment". They said it was incumbent upon the respondents properly to investigate the disputes about the allegations made by Karen Nicholson; that Mr Banks, the decision maker, had given them little weight when they were made to him by Karen Nicholson. The tribunal concluded that so far from the applicant undermining the position of Karen Nicholson, the respondents had failed to give the applicant proper support as manager. It was a case, as the tribunal put it, of the employers undermining her authority as a manager by rejecting her judgment so obviously in front of a junior sales person. The tribunal noted that there was no reason to think that the illness of the applicant was other than genuine when she was overcome on 18th May in the Harlow store. The tribunal went on:
"The constant requests by the finance director for information as to when she would return we find to be disingenuous. We find that the real motive of Mr Burgess was to encourage the Applicant into resigning from her employment."
The tribunal noted that the company had taken an unusual decision not to pay her her full contractual pay throughout the period of her illness; and the tribunal concluded that this was because they wished to put pressure on the applicant during her sickness, presumably with a view of getting her to leave their employment.The tribunal looked at the suggestion which had been made in the IT3 referred to in the letter of dismissal relating to the repayment to Barclays Bank of some monies. They concluded that the employers had been unfair in the way they had taken that into account because, as the company must have been aware, the Bank had reached an accommodation with the applicant in July 1997 regarding it, and they went on to note that the documents revealed that Mr Burgess was encouraging the Bank to issue a writ against the applicant.The tribunal concluded that they did not find that the constant requests for information regarding her illness were reasonable. Certificates were being provided.In all the circumstances, they said:
"... the setting up of a disciplinary hearing at a time when the Applicant was unwell and when she could clearly not deal with matters being charged against her and when she was not provided with all the documents or statements which were going to be considered, was unreasonable."
They concluded that:

"The actual handling of the dismissal ... was not reasonable."

At no stage, said the tribunal, were the events of 17th May 1997 considered in detail; and they had not even looked at the fax which the applicant had sent to the Managing Director around that time. Accordingly, the tribunal came to the conclusion that the dismissal was unfair. As to the holiday pay they said that under the terms of the contract the employers had a discretion not to pay accrued holiday pay if there had been dismissal for misconduct. Having concluded that the dismissal was unfair, they said that the employers could not reasonably rely upon that clause in the contract and therefore the applicant was entitled to her accrued holiday pay, the employers not being entitled to forfeit it.In a conspicuously able and succinct submission, Mr Cavanagh on behalf of the employer appellants, essentially makes these points. In the first place he says that the Industrial Tribunal have failed in their primary responsibility, which is first of all to identify what the reasons were for the dismissal. He says that if one looks at the letter of dismissal there is no reference to the incident on 17th and 18th May 1997 and he went on to say therefore that paragraph 9(d) of the tribunal's decision under the rubric "the Tribunal Assessment" was not pertinent to the question at issue. Rather, the tribunal should have found what the reason was for the dismissal and then applied their minds as to whether the decision taken in the light of that reason could be described as fair and reasonable.It seems to us that that is an unfair criticism to make of the tribunal's decision in this case. As was pointed out by one of the lay members during the course of argument, it formed the first point which was made in the IT3 filed on behalf of the employers. It is not uncommon for the employers to rely on matters in their IT3 which were not necessarily contained in the letter of dismissal setting out the reasons for the dismissal. It seems to us unrealistic to suggest that the Industrial Tribunal could have left in the air questions as to what had happened on 17th and 18th May 1997. It formed an essential part of the background to the dispute between the parties. It was common ground that that was an important event because it triggered directly or indirectly the applicant's absence from work which then in itself led to her dismissal. Accordingly, whilst we understand the point which is being made, we do not think that it is a justifiable criticism. This may be an example of taking the tribunal's decision perhaps over literally rather than looking at it in the round.Secondly, he said, that even if he was wrong about that, then if the tribunal were entitled to look at what took place on that weekend, then they have omitted to determine a crucial factor, namely whether, as the employers alleged, the applicant sought to dismiss Karen Nicholson, which she had no authority to do and was done in a way without following the disciplinary procedure and, thus, could have led to the employers becoming liable for an unfair dismissal award. This was, said Counsel, a important and essential feature in the dispute.Again, it seems to us, not fair to criticise the tribunal for failing to make that finding. It was not, as we see it, crucial to the determination which they had to make. It was rather the tribunal's view that it was the employers who should have investigated that issue and should themselves have formed a view about it. That is how we read paragraph 9(k) of the decision. It was not, in our judgment, a crucial point for them to consider and we think that they cannot be held to be at fault in relation to that point.The second and separate ground of appeal is this. In the paragraph which I have already recited it is clear that the tribunal doubted the integrity of some of the evidence which they were given by one of the witnesses for the employers. They were doubting his motivation in the passage where they found that the real motive was to encourage the applicant to resign rather than to genuinely seek information as to when she would be able to return to work. It is said that that was not a point which was put to Mr Burgess during the course of his evidence and therefore it was manifestly unfair to make such a finding against him without him first having had an opportunity to deal with it."Not put" points are always difficult for every Court to deal with. It is to be noted that Industrial Tribunal proceedings are intended to be, although they not always are, relatively informal and more of an inquisitorial nature than an adversarial one. This is a case where both parties had the benefit of legal representation from solicitors. Before making any adverse personal judgment against an individual, it goes without saying that the individual should have had a proper opportunity to give his side of the case before any adverse inferences are drawn against him or her. Whether an adequate opportunity was given is always a question of degree. It depends entirely on the way the cross-examination was directed, what questions the tribunal themselves asked and the manner and demeanour of Mr Burgess himself in dealing with any points which were put to him. We are bound to say that we are not prepared to assume that the tribunal has acted unfairly in the way in which they have dealt with this point in paragraph 9(d) of their decision. As to whether it was pertinent for them to be asking these questions at all, whilst it is technically right probably that motive was irrelevant at this stage of the enquiry of the Industrial Tribunal, because it did not matter whether Mr Burgess hoped that she would resign or not since they were dealing with a dismissal case, it does seem to us that Mr Cavanagh was taking too technical an approach. The Industrial Tribunal were obviously looking at the respective cases for the parties and came to the conclusion that what had happened here is that the applicant was eased out following the row which took place on 17th and 18th May. The company had found a newcomer in the store who appeared to be working more satisfactorily than the applicant and everything that happened thereafter, as the tribunal saw it, appeared to have been somewhat contrived to cause the termination of Mrs Da Silva's employment.Then it said that there is a perversity point because there must come a time in a sickness case where an employer is entitled to say to employee, "if you do not come in for a disciplinary hearing we shall have to hold the hearing in your absence". But it is, as it seems to us, significant that in paragraph 9(j) the Industrial Tribunal are not merely saying that she should have been given an opportunity to attend the hearing, but they are also saying that it was unfair because she had not been provided with all the documents or statements which were going to be considered. Of course if they had done so in advance of the hearing, giving her an opportunity to respond to them in writing, the decision as to whether or not to hold a disciplinary hearing at which she could attend, might take on a different colour.The next point that is made is that there are findings of fact which were inconsistent with the evidence which was given. The first finding that is inconsistent relates to the timing of the withholding of the contractual sickness pay. The tribunal recorded this as having been an unusual decision: namely, to withhold contractual pay for only two weeks absence through illness. Apparently it was common ground that it was not just two weeks it was also for the month of June and therefore, that was a finding of fact which they have got completely wrong.It seems to us that the sting of paragraph 9(g) of the decision lies not in the period of time concerned, namely whether it was two weeks or six weeks, but in the fact that the tribunal was satisfied that the period was not the norm within the company and that full contractual pay would generally be paid as a matter of discretion. Very properly, though, Mr Cavanagh was unable to submit that if they had got the first fact right that could or would have altered the tribunal's conclusion. Therefore, we do not consider that that is a ground on which this decision can properly, arguably be challenged.In relation to the second point. The point that is made by Mr Cavanagh is that the Industrial Tribunal had failed to recognise that it was the timing of the repayment of the monies to Barclays Bank with which they were concerned, rather than the fact that she had not agreed to repay the money. In other words, the employers knew that she had reached an accommodation with the Bank, but it was the fact that it was taking some time that troubled them.Whilst we see the force of that point, we think that that does not detract from the point which the Industrial Tribunal had noted in the way in which the employers had approached this issue. It seems to us that there is some significance to be attached to the statement that the documents revealed that Mr Burgess was encouraging the Bank to issue a writ against the applicant whilst she was still employed by the company.Finally we turn to the question of holiday pay. Whilst we quite understand Mr Cavanagh's submission that was made to us, it does seem to us that the Industrial Tribunal was entitled to construe the contractual provision as to holiday pay in such a way that they could conclude that the respondents were not entitled to rely on the forfeiture clause because the applicant had not, in their judgment, been guilty of any misconduct. That appears to be the conclusion from reading the whole of the decision, although we accept that the expression of their view in the third sentence of paragraph 10 might have been expressed rather more felicitously.Overall, therefore, we take the view that this was a straightforward unfair dismissal case which the employers have lost. The tribunal's reasoning cannot properly be faulted when looked at overall. Accordingly, this appeal since it does not raise any arguable point of law fit for a full hearing must be dismissed.MR JUSTICE MORISON (PRESIDENT) : Mr Cavanagh has quite appropriately asked for leave to appeal, bearing in mind that he is temporarily without instructions. We refuse leave to appeal. We have obviously taken the view that the argument in this case do not merit a full hearing before the Employment Appeal Tribunal. As we have endeavoured to say, this is a very straightforward unfair dismissal case with no point of law in it. In so far as the tribunal's decision can be criticised, we are of the view that those stem from an over-careful analysis of the decision rather than looking at it overall. Accordingly, this application for leave to appeal is refused.