MR A J HADDON v VAN DEN BERGH FOODS LTD [1999] UKEAT 1160_98_2909

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [1999] UKEAT 1160_98_2909Case No Appeal No. EAT/1160/98Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR A J HADDONAPPELLANTVAN DEN BERGH FOODS LTDRESPONDENT
Before
Mr Justice MorisonDate 29 September 1999
[1]APPEARANCES For the Appellant MR A FREER Solicitor GMB National Legal Department 22-24 Worple Road London SW19 4DD For the Respondents MR PITT-PAYNE (of Counsel) Instructed By: Mr R Mason Messrs Mason & Co Solicitors Devonshire Chambers The Square Bakewell Derbyshire DE45 1BT MR JUSTICE MORISON: This is an appeal from the unanimous decision of an Employment Tribunal held at Ashford, which dismissed Mr Haddon's complaint that he had been unfairly dismissed by his employers, Van den Bergh Foods Limited, which is part of the Unilever Group. The Tribunal were, clearly, not only sympathetic to the applicant ["this is a very sad case"; "we have great sympathy for the Applicant"], but also regarded their decision as unfortunate. They considered themselves bound ["we cannot escape the conclusion"] to find the dismissal fair. The facts can be summarised from the decision of the Employment Tribunal. Mr Haddon had fifteen years of blameless service with his employers and, in accordance with their practice, he was to receive a Good Service Award at a presentation ceremony on 26 January 1998. He was sent details of the programme which required him to assemble for drinks at 5.15 pm, with the presentation at 5.30 pm followed by a buffet supper at 6.00 pm with proceedings to finish at 7.30 pm approximately. It was normal practice for workers who were receiving such an award to attend with their spouses. The employers are in the food business and the applicant was a technical operator who required to shower after coming from his workplace. He was scheduled to work on 26 January on the 2.00 pm to 10.00 pm shift. A week before the presentation the applicant spoke to his Business Centre Manager at the canteen at lunchtime about his working arrangements for the day in question. He was told that he could leave early to change and collect his spouse but that he would be required to return to work after the ceremony as the employers were short staffed due to people being off work sick. The conversation lasted some five minutes. The applicant spoke again to management, the Shift Operations Controller, who told him that it was not usual for people to return to duty because alcohol was provided before and during the meal. However, he said that the applicant should resolve the issue with the Business Centre Manager, which the applicant did not do. The employers had a draft policy which was due to be implemented as from the beginning of January 1998 which included the sentence:
"No alcohol will be provided at functions where employees are returning to work."
[2]The applicant and his wife duly attended at 5.15 pm on the appointed day and when he arrived he was offered alcohol and he then decided that he would not return to work. He did not return to work and was dismissed for disobedience. He maintained during the disciplinary hearings that he had not taken the Business Centre Manager's request that he return to duty after the ceremony seriously. He also alleged that there were two people who had left their shift early and without permission who were not dismissed.[3]The Tribunal noted that there was only 1½ hours of the shift left after the ceremony was over and said "Most people would regard that [his dismissal] as harsh in the extreme."[4]The tribunal found the procedure adopted by the employers to be fair. They accepted the Respondent's case about the two alleged comparators. They concluded that he had been given an instruction to return to work although they accepted that the employers could have handled the matter better and the instructions made clearer. They noted that the applicant's absence from work for the short time after the shift "made no difference to the operation of the shift or the company's production that night".[5]It is important to this appeal to set out the reasoning of the tribunal in full:
"16 We next had to consider whether the instruction to return was reasonable. We have no doubt that many people would find such an instruction to be unreasonable. However, we are mindful that we must not substitute our own views for the views of the Respondent, and in this particular case, it was Mr Goodliff who was in charge of that particular shift and who knew, better than most, what was required to be done. He was aware that the shift was short-staffed, and it was entirely his decision as to who should and who should not work on that shift. There would have been only about 1½ hours left for the Applicant to work, but, nevertheless, we cannot say that it was unreasonable of Mr Goodliff to require the Applicant to return to complete that shift. 17 It falls then for us to consider whether dismissal falls within the range of reasonable responses. Once again it is not for us to say what we would have done or would not have done, but if dismissal is to fall outside the range, we have to ask whether no reasonable employer would have dismissed in these circumstances. 18 On the facts as found, and on our analysis above, there was an instruction given to the Applicant and it was a reasonable instruction. The Respondent's disciplinary procedure does state clearly that an employee may be dismissed without prior warnings for an act of gross misconduct, and it does go on to say that "failure to carry out proper and reasonable instructions" is an example of an offence which is normally regarded as gross misconduct. In these circumstances, it is not possible for us to say that dismissal was outside the range of reasonable responses. 19 This case brings no credit at all to Van den Bergh Foods. They invited the Applicant to a Good Service Awards presentation to reflect his 15 years' service. They entertained him to a buffet supper and free drink and gave him a gift. They were aware that the Applicant was due to work the late shift and that there would be less than 2 hours remaining for work at the end of the presentation. Furthermore, Mr Goodliff admitted to us that he could have handled the matter better and made his instructions clearer. It is also significant that the Applicant's absence at the end of his shift apparently made no difference to the operation of the shift or the company's production that night. Nevertheless, the Applicant was dismissed. It was a decision that many reasonable employers would not have taken. 20 Unfortunately, however, in applying the law to the facts of this case, we cannot escape the conclusion that the dismissal was fair, and this application is dismissed."
The Parties' submissions[6]In an argument, which can only be described as conspicuously able, Mr Freer of the GMB's Legal Department, submitted that this Decision exemplifies what he described as a fundamentally erroneous approach to Unfair Dismissal cases taken by Employment Tribunals in misconduct cases. He says that the tribunals are asking themselves the wrong questions and are glossing the statute. Section 98(4) of the Act is straightforward. Whilst the judgment as to whether a dismissal is fair or unfair may be difficult when applying the facts in some cases, the principles are clear and they impose a duty on the tribunal to pass judgment upon the fairness of the dismissal.[7]In practice, the tribunals have made it difficult for employees who are dismissed for misconduct, to have a finding in their favour. This has come about through what he submitted were three errors in law. In the first place, Tribunals applied what is called the Burchell test without regard to the words of section 98(4)(b) which require the tribunal to have regard to equity and the substantial merits of the case. In other words, they concentrated solely on the investigatory process and asked whether it was sufficient. Second, he submitted that the tribunals had turned the range of reasonable responses test into a 'Wednesbury unreasonable' test, or a test of perversity, as here:
"we have to ask whether no reasonable employer would have dismissed in these circumstances"
. Third, he submitted that the Tribunals were over-concerned about the risk of 'substituting their own judgment for that of the employer' and, in consequence, were shrinking from the task which Parliament had imposed upon them to pass judgment on the fairness or otherwise of the dismissal. A combination of these factors had diminished the right not to be unfairly dismissed. The approach of the tribunals was to focus attention on the investigation rather than to look at all the facts for themselves. If an employee succeeded he was likely only to do so on the grounds of a procedural defect and have his compensation reduced by reason of the 'Polkey reduction' principle. In a nutshell, he asked the EAT to redress the balance, and to invite the tribunals to dispose of the jargon and apply the words of the statute without any gloss. He helpfully took us to a number of authorities which we will deal with in our decision.[8]For his part, Mr Pitt-Payne of counsel for the employers, submitted that the law was now clear. Tribunals were not entitled to make decisions on the basis of what they themselves would have done had they been the employer. They also had to recognise that there was a band of reasonableness to be applied. He said that the question posed by the Tribunal about 'no reasonable employer' was not truly a perversity test but was rather the application of the principle that tribunals should recognise there is a band of reasonable responses to any given disciplinary situation. He submitted that the Employment Tribunal had neither erred in law nor arrived at a perverse decision. The Decision of the EAT.[9]The task of a Tribunal, having identified a potentially fair reason for the dismissal [subsections 94(1) and (2)] is set out in section 98(4). This statutory provision has been amended to remove the burden of proof, which was initially upon the employer, and to permit the tribunal to have regard to the size and administrative resources of the employer. Otherwise, it has been in similar form since the Trade Union & Labour Relations Act 1974. As the Court of Appeal indicated in 1974 [although the decision was not reported until later] in Bessenden Properties Limited v Corness [1977] ICR 821:
"It may be hard on employers in the embarrassing situation in which Mr Benfield [the employer] found himself in this case to have the matter so largely removed out of their control and left to the discretion of the so-called industrial jury. But once the case falls within [Section 98(4)] then the tribunal is entitled to take everything into account."
[10]The tribunal's task was put, we think accurately and succinctly, by Phillips J in the case of Grundy v Willis [1976] ICR 323:
"So the duty of a tribunal is to take into account the reason ... and all the other facts and circumstances known to the employer, and ask whether for that reason, and in those circumstances, having regard to equity and the substantial merits of the case, the employer acted reasonably in treating it as a sufficient reason for dismissing the employee. And it has, of course, to judge that in the capacity of what has been described as an "industrial jury"
. This statement was endorsed by the EAT in George Whiley Ltd v Anderson [1977] ICR 167 (July 1976). But in November, 1976, in Vickers Ltd v Smith , the EAT, a division presided over by Cumming-Bruce J, said:
"...that it was necessary to go a stage further, if they [the tribunal] thought that management's decision was wrong, and to ask themselves the question whether it was so wrong that no sensible or reasonable management could have arrived at the decision ... who should be selected …for redundancy."
[11]This case was not cited to the EAT in Wells v Derwent Plastics Limited [1978] ICR 424. In a division presided over by Bristow J, the EAT said:
"Where the legal right or obligation with which you are concerned is not a common law right or obligation but is created by statute, what the statute says, and nothing else, is the law. The judges cannot add to or subtract from the law as you find it expressed in the statute, the instrument by which the will of the people through the ordinary constitutional method of Parliamentary process becomes the law. If what the statute says is intelligible and unambiguous it is for the judges to apply it, not to refine it or add to it frills of their own."
[12]In a later decision, December 1978, Jowett v Earl of Bradford (No. 2) [1978] 431, Bristow J referred to Vickers v Smith , and observed that it appeared that the EAT had posed what looked like a more stringent test. The EAT said:
"In this case the industrial tribunal did not apply the stricter test formulated in Vickers' case ... They would not have been wrong in law to do so. They are not wrong in law because they did not. They applied, and in our judgment rightly applied the plain words of the statute. Grundy's case really says no more than "apply the plain words of the statute"
. Vickers' case says more. It is not a binding precedent to be followed by the industrial tribunals because, although intended as a helpful test, it says more than Parliament says in [section 98(4)]."[13]By a judgment dated May 9 1978, the EAT, presided over by Phillips J. was referred to Vickers but not Jowett in NC Watling & Co v Richardson [1978] ICR page 1049. The EAT said:
"The moral is that none of the phrases used in the authorities, such as "did the employer act in a way in which no reasonable employer would have acted" is to be substituted as the test to be applied. The test is, and always is, that provided by [section 98(4)]. The authorities do no more than try, according to the circumstances, to indicate the standard to be used by the industrial tribunal in applying [the subsection]. But every time the starting point for the industrial tribunal is the language of the [subsection]."
[14]On May 20 1980, the Court of Appeal considered the correct approach to the predecessor of section 98(4) in Bailey v BP Oil (Kent Refinery) Ltd [1980] ICR page 642. There, the court said that the wording of the section was clear and unambiguous and "In our judgment it is unwise for this court or the Employment Appeal tribunal to set out guidelines and wrong to make rules and establish presumptions for industrial tribunals to follow or take into account ..."[15]In a decision in June 1980, in Rolls Royce Limited v Walpole [1980] IRLR 343, the EAT returned to the question of the proper approach to the task in hand. In a division presided over by May J [as he then was] the court said:
"As this Appeal Tribunal pointed out in the judgment in Watling's case, in a given set of circumstances it is possible for two perfectly reasonable employers to take different courses of action in relation to an employee. Frequently there is a range of responses to the conduct or capacity of an employer, from and including summary dismissal downwards to a mere informal warning, which can be said to have been reasonable. It is precisely because this range of possible reasonable responses does exist in many cases that it has been laid down that it is neither for us on an appeal nor for an Industrial Tribunal on the original hearing, to substitute our or its respective views for those of the particular employer concerned. It is in those cases where the employer does not satisfy the Industrial Tribunal that his response has been within that range of reasonable responses that the Industrial Tribunal is enjoined by the statute to find that the dismissal of the relevant employee has been unfair."
[16]It would appear that this judgment was given in ignorance of the earlier decision of the Court of Appeal. And the Court of Appeal considered the fairness provision later that year in British Leyland UK Ltd v Swift [1981] IRLR 91. The Master of the Rolls, Lord Denning, said this:
"The first question that arises is whether the Industrial Tribunal applied the wrong test. We have had considerable argument about it. They said "...a reasonable employer would, in our opinion, have considered that a lesser penalty was appropriate."
I do not think that that is the right test. The correct test is: was it reasonable for the employers to dismiss him. If no reasonable employer would have dismissed him then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness within which one employer might reasonably take one view; another might reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on. Both views may be quite reasonable. If it was quite reasonable to dismiss him, then the dismissal must be upheld as fair; even though some other employers may not have dismissed him."[17]Just over 18 months later, the then President of the EAT, Browne Wilkinson J [as he then was], reviewed some of the authorities [but not Bailey or Bessenden ] in Iceland Frozen Foods Ltd v Jones [1983] ICR 17 . He said:
"...the Jowett case ....is no longer good law. It follows that in the present case the industrial tribunal has misdirected itself in law by failing to follow the Watling ...principle. .... We consider that the authorities establish that in law the correct approach for the Industrial Tribunal to adopt in answering the question posed by [section 98(4)] is as follows: (1) the starting point should always be the words of [the subsection] themselves; (2) in applying the section an industrial tribunal must consider the reasonableness of the employer's conduct, not simply whether they (the members of the industrial tribunal) consider the dismissal to be fair; (3) in judging the reasonableness of the employer's conduct an industrial tribunal must not substitute its decision as to what was the right course to adopt for that of the employer; (4) in many, though not all, cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another; (5) the function of the industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it is unfair. Although the statement of principle in Vickers is entirely accurate in law for the reasons given in Watling ...we think industrial tribunals would do well not to direct themselves by reference to it. The statement in Vickers is capable of being misunderstood so as to require such a high degree of unreasonableness to be shown that nothing short of a perverse decision to dismiss can be held to be unfair within the section. That is how the industrial tribunal in the present case seems to have read Vickers ... That is not the law. The question in each case is whether the industrial tribunal considers the employer's conduct to fall within the range of reasonable responses and industrial tribunals would be well advised to follow the formulation of the principle in Watling or Rolls Royce ..."
[18]In November 1984, the Court of Appeal was referred to Vickers and Iceland in the case of Gilham & Others v Kent County Council (No 2) [1985] ICR 233. The Court emphasised that the question of whether a dismissal was fair was a pure question of fact for the industrial tribunal. Griffiths LJ [as he then was] said, at page 243: "The wording of [section 98(4)] is straight forward and easy to understand, and I do not myself think that it helps to try and analyse it further, save only this, that a tribunal in applying the section must not ask themselves what they would have done, but must ask themselves how a reasonable employer would have acted.[19]Dillon LJ said, at page 244:
"The reported decisions contain, as it seems to me, a good deal of what I would venture to call over sophistication as to the approach to be adopted by industrial tribunals to the question of reasonableness. In my judgment it is sufficient for the tribunal to answer directly the question posed by [section 98(4)]: "
In all the circumstances, did the employer act reasonably or unreasonably in treating the reason in the particular case as a sufficient reason for dismissing the employee?". That is a question of fact and not a sophistication of law. A tribunal may in a particular case react to the facts by saying "What the employer did is not what we ourselves would have done, but we cannot say that it was unreasonable." That again, however, is an answer on the facts to a question of fact, and not a guideline of law to be applied by all other tribunals in all other cases. Because the question is one of fact, and there are many different industrial tribunals, it is quite likely that different tribunals will reach different conclusions on the question of reasonableness on very similar facts. That is inherent in the system which Parliament has set up, and is no indication that any tribunal has misdirected itself or erred in law."[20]Gilham and Iceland were both before the Court of Appeal just over a year later: Neale v Hereford & Worcester County Council [1986] ICR page 471. There was no issue between the parties that the Employment Tribunal had asked themselves the right question, but in an obiter passage, May LJ expressly agreed with what had been said in Iceland , although the Court failed to address their mind to the impact of Gilham upon Iceland.[21]The final case to which we were referred on this central point was Conlin v United Distillers [1994] IRLR 169, a decision of the Court of Session. It is not clear from the report whether the Court was referred to Gilham , although it was referred to Iceland . The court, Lord Ross giving its judgment, said:
"We agree that the Industrial Tribunal appear not to have applied the correct test. There is nothing in their decision to indicate that they ever applied their minds to the question of whether the dismissal of the appellant fell within the ranger of responses open to a reasonable employer. Having regard to what they do say, it appears to us that what the industrial tribunal have done is simply to express their own opinion upon the question whether the dismissal was unfair. That being so, we are satisfied that the Employment Appeal Tribunal were well-founded in concluding that the appeal against the decision of the Industrial Tribunal must succeed."
[22]Whilst it is regrettable that so many words have been spoken by so many judges about the proper interpretation of a section which is so clear and unambiguous, nonetheless at the end of the day, we consider that the courts are saying no more than two things.[23]First, the question for the tribunal is the reasonableness of the decision to dismiss in the circumstances of the particular case having regard to equity and the substantial merits. Because the tribunal are applying an objective test, that is, a test of reasonableness, it is not sufficient for them simply to say 'well, we would not have dismissed in those circumstances'. They must recognise that, however improbable, their own personal views may not accord with reasonableness. Just asking 'what would I have done' is not enough. However, it is neither reasonable nor realistic to expect the objective question to be asked and answered without the members of the tribunal having first asked 'what would we have done'. And provided that they do not stop there, we see nothing wrong with that approach.[24]The mantra 'the tribunal must not substitute their own decision for that of the employer', is simply another way of saying that the tribunal must apply the reasonableness test by going somewhat further than simply asking what they themselves would have done. It is likely however that what the tribunal themselves would have done will often coincide with their judgment as to what a reasonable employer would have done. The tribunal is, after all, composed of people who are chosen to sit as an industrial jury applying their own good sense of judgment. The task of the tribunal is to pronounce judgment on the reasonableness of the employers' actions and whenever they uphold an employee's complaint they are in effect 'substituting their own judgment for that of the employer'. Providing they apply the test of reasonableness, it is their duty both to determine their own judgment and to substitute it where appropriate.[25]The second point simply recognises that there may be cases where a decision not to dismiss would be reasonable and a decision to dismiss would also be reasonable. This point is based upon logic. Because course A would have been reasonable, it does not follow that every other course is unreasonable. In other words, in some marginal cases, the tribunal might well consider that a dismissal by the particular employer was reasonable even though another reasonable employer might not have dismissed. The mantra 'the band or range of reasonable responses' is not helpful because it has led tribunals into applying what amounts to a perversity test, which, as is clear from Iceland itself, was not its purpose. The moment that one talks of a 'range' or 'band' of reasonable responses one is conjuring up the possibility of extreme views at either end of the band or range. In reality, it is most unlikely in an unfair dismissal case involving misconduct that the tribunal will need to concern itself with the question whether the deployment of each of the weapons in the employers' disciplinary armoury would have been reasonable. Dismissal is the ultimate sanction. There is, in reality, no range or band to be considered, only whether the employer acted reasonably in invoking that sanction. Further, the band has become a band or group of employers, with an extreme end. There is a danger of Tribunals testing the fairness of the dismissal by reference to the extreme.[26]In our view the approach taken in Gilham is to be followed. The statute is clear and unambiguous. The two points referred to above are no more than obvious statements which flow from the natural and ordinary meaning of the words of the subsection. In other words, we respectfully suggest that tribunals now return to the task in hand which is to apply the section without embellishment, and without using mantras so favoured by the lawyers in this field.[27]Mr Freer suggested to us that the tribunals, and the courts in particular, had difficulty in coming to terms with this piece of social legislation which changed the balance of power between employer and employee [the master/servant relationship]. Employers are no longer free to dismiss with impunity those whom they judge to be worthy of dismissal. As Lord Justice Roskill observed, the right to dismiss is tempered by the right of the individual not to be unfairly dismissed and the balance between the two is to be struck by the industrial jury.[28]We believe this balance will be best achieved by the industrial jury, the Employment Tribunals, applying the statute as it stands, no more and no less.[29]There is some anecdotal evidence with which we were presented which suggests that 'conduct' is the most frequent reason in contested Employment Tribunal unfair dismissal cases and that employees lost more than 50% of them, but that where they did succeed it was almost always because of the procedure being found to be faulty. Mr Freer points out, we think with justification, that a combination of the judicial embellishments upon the statute has led tribunals to adopt a perversity test of reasonableness and to depress the chances of success for applicants.[30]As for the present appeal, it seems to us that the tribunal have applied the perversity test. Mr Pitt-Payne suggested that there was a distinction to be drawn between a Wednesbury unreasonable test and the test applied by this tribunal. We consider that such distinction is specious. Furthermore, it seems to us that the tribunal have forgotten to consider the case from the employee's perspective. Was the employee subjected to an injustice as a result of the dismissal? [see Dobie v Burns International Security [1984] ICR page 812]. The reference to "equity" in section 98(4) requires at the least a consideration of the case from the employee's perspective. How serious was his failure to return to work for a short time after drinking at a party organised by his employers, when his absence made no difference to the factory output? Even if the instruction was reasonable, why was it reasonable to dismiss him?[31]In our judgment, taking account of the clear findings of fact in the Employment Tribunal's decision, the dismissal was obviously unfair. Accordingly we allow the appeal because the tribunal misdirected itself in law and because its decision was perverse. To dismiss this man in these circumstances is clearly contrary to the actions of a reasonable employer[32]The question of contributory fault has not been considered, as yet. We are minded to make a finding of 25% contributory fault and will permit the parties to make written representations to us within 14 days of receipt of this judgment. In the light of those submissions we shall ourselves fix the level of contribution, if any. It would be wrong, we think, to send the case back for a hearing on this issue, having regard to the length of time since the events complained of. Once contributory fault has been established we consider it likely that the parties will be able to agree the amount of a basic and compensatory award, there being no request for re-engagement or re-instatement. If the parties are unable to agree the quantum in the light of our determination of contributory fault then that issue can be remitted to any Employment Tribunal.