MISS S VALTON v THE LONDON BOROUGH OF HACKNEY [2000] UKEAT 410_99_1407

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2000] EAT 410_99_1407Case No Appeal No. EAT/410/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MISS S VALTONAPPELLANTTHE LONDON BOROUGH OF HACKNEYRESPONDENT
Before
Mr Justice Keene Mrs A Gallico Ms G MillsDate 14 July 2000
[1]APPEARANCES For the Appellant MR A PAYNE (of Counsel) Messrs Hargreaves Solicitors 2nd Floor, Roycraft House Linton Road Barking Essex IG11 8HE For the Respondents MR G MILLAR QC Head of Legal Services Trading Unit London Borough of Hackney 183-187 Stoke Newington High Street London N16 0LH MR JUSTICE KEENE : This is an employee's appeal from a decision of an Employment Tribunal sitting at London (North) and entered in the Register on 25th January 1999. By that decision the tribunal found that the appellant had been fairly dismissed by reason of capability and her complaint of breach of contract was also dismissed. The appellant had been employed by the respondent from 1980 to 14th January 1998. She was employed as a Special Educational Needs Administration Officer dealing with the procedures laid down for assessing children with special educational needs. The tribunal noted that the Department had a high workload and that the work was high pressure.[2]On 22nd January 1997 the appellant was assaulted by her neighbour and as a result from the following day she began a continuous period of sickness absence. She was initially signed off for one week for a viral infection but from 30th January she was signed off for two weeks with depression. There then followed a four week sickness certificate for depression. She remained absent from work through illness. There were various medical reports on her condition through the middle of 1997, none of which could give a timetable for her return to work.[3]On 10th October 1997 the respondent's Personnel Department wrote to Miss Valton indicating that a review of her case was being contemplated. A sickness review meeting had to be deferred but it was refixed. In the letter refixing it the respondent told the appellant that the sickness review meeting was the opportunity for her and/or her representative to put her case and it warned her that if either she or her representative did not attend on the day fixed the service head would make the decision to go ahead with the review in her absence.[4]The review hearing was refixed for 12th December 1997. Further medical reports before then confirmed that she suffered from clinical depression and gave no information as to when she would be able to return to work, save that it was most unlikely before mid-February 1998.[5]The review meeting duly took place on 12th December 1997. The appellant did not herself attend but she was represented by an official of her trade union. The hearing officer, Miss Thompson, subsequently wrote to the appellant a letter dated 14th January 1998. In it she stated:
"You clearly appeared to need time to recover your health but given the nature of the job you do, in the context of statutory responsibilities of all LEAs, this is incompatible. I have formed the view on this aspect that since neither medical opinion nor your trade union representative could give time scales as to your recovery and the fact that you have been absent from work for over 10 months, the Council cannot continue to hold your job open until you are sufficiently well to return to work. My decision to dismiss you is effective from the date of this letter."
The appellant appealed against that decision.[6]The appeal was heard by Mr N Jarman, the Acting Director of Education. The appellant herself attended with a friend and her trade union representative. At the hearing, which took place in late-March 1998, a letter dated 13th January 1998 from the Senior House Officer to a Consultant Psychiatrist was presented by Miss Valton, together with a letter from her General Practitioner dated 6th March 1998 stating that she would be fit to return to work on 30th May 1998. The tribunal recorded that it was "satisfied from the evidence of Miss Valton and Miss Jackson that those letters were presented to the appeal hearing but that the appeal hearing declined to take note of them." The appeal panel upheld the decision to dismiss the appellant and this was recorded in a letter from Mr Jarman dated 1st April 1998.[7]The tribunal recorded that the reason for the appellant's dismissal was that she had some 126 days sickness absence from the 23rd January 1997 until the date of the sickness review meeting on 12th December 1997. They properly identified that as a reason relating to capability and consequently as a potentially fair reason for dismissal under section 98(2)(a) of the Employment Rights Acts 1996 . There is no challenge to that part of the Employment Tribunal's decision.[8]The tribunal then turned to the issue of the fairness of the dismissal. The tribunal noted that at the time of the sickness review meeting in December 1997 the medical certificate of the general practitioner, still prevailing at that time, certified that the appellant should refrain from work for an indefinite period. The medical letters between the date of that medical certificate on 24th September 1997, and the review meeting on 12th December, did not state when she would be able to return to work.[9]The tribunal then dealt with the internal appeal proceedings, observing that the appellant's letter of appeal asserted that she would be able to return within a matter of weeks but said nothing explicit about new medical evidence.[10]There then come the following two paragraphs in the tribunal's extended reasons:
"19 …(l) We did not find Mr Jarman, who heard the appeal, a reliable witness. He was unable to recall what had happened and was uncertain what guidelines he was working under and when they came into force. Both guidelines provide that the appeal is a review and as such there is no discretion for the appeal panel to take into account evidence which was not available at the time of the sickness review meeting. Miss Valton had not indicated in her grounds of appeal that there was any new medical evidence and accordingly there was no discretion for the appeal panel to admit it. 20 Having taken these matters into account it is the unanimous decision of the Tribunal that the Respondent has satisfied the requirements of section 98(4) of the Employment Rights Acts 1996 and dismissal for capability fell within the range of reasonable responses and is therefore fair."
[11]The tribunal then dealt with the appellant's complaint of breach of contract, a breach consisting, it was said, of monies owing which had not been paid to her. It dealt very briefly with this part of the case. It stated that the burden of proof rested on the appellant to show what was due to her and she had not discharged that burden. It was insufficient for her representative to complain that he had had no breakdown of figures from the respondent. Therefore the claim of breach of contract failed.[12]There are thus two matters which have to be dealt with on this appeal: the unfair dismissal claim and the claim for breach of contract through failure to pay monies due. We shall deal first with the unfair dismissal issue.[13]On behalf of the appellant Mr Payne raises a number of points, but for present purposes it is only necessary to refer to one of them. The appellant criticises the appeal panel's failure to take into account the new medical evidence in the shape of the GP's letter of 6th March 1998, stating that she would be fit to return to work on 30th May 1998. Mr Payne emphasises the Employment Tribunal's finding of fact that the appeal panel declined to take note of that letter, which, he submits, was a highly material document. He refers to the principles set out in West Midland Co-operative Ltd v Tipton [1986] 1 All ER 513 , as to the relevance of information coming to light during an internal appeal process to the issue of the reasonableness of a dismissal. It is submitted that the Employment Tribunal went wrong in finding that the respondent's procedural guidelines excluded the admission of new evidence on an internal appeal.[14]For the respondent, Mr Millar QC argues that, whatever the guidelines in documentary form may say, there was oral evidence before the Employment Tribunal that the practice of the respondent was not to admit new evidence on these appeals. It is submitted that, even if the GP's letter was wrongly excluded, there was no unfairness in the decision to dismiss. It is said that the appeal panel, in the shape of Mr Jarman, took into account the appellant's argument as stated in her Notice of Appeal, that she could be back at work in some four weeks. Mr Millar questions whether even if the tribunal went wrong, the decision by Mr Jarman would have been any different if he had taken into account the letter from the GP.[15]It is clear to us that the tribunal made a finding of fact that Mr Jarman, the appeal panel, did not take into account the medical evidence as constituted by the letter of 6th March 1998. That letter was, on the face of it, clearly relevant evidence to the issues being considered on appeal, especially to that of when the appellant would be well enough to return to work. That might almost be described as the central issue in the case. The Employment Tribunal regarded the exclusion from consideration of that evidence as justified and, indeed, as required by the respondent's guidelines, on the basis that those guidelines provided for a review and not an appeal. We have looked at those guidelines. The relevant section is entitled "APPEALS AGAINST DISMISSAL AFTER A REVIEW MEETING". The text then goes on to state that:
"The purpose of the meeting is to … ( consider the employee's grounds of appeal ( decide if dismissal was reasonable in the circumstances of the case ( give the opportunity to remedy any procedural defects."
They indicate that the director, who will chair the appeal hearing, may request an advisor from one of the specialist units to attend the meeting, if appropriate. The employee's representative is described as having the function of stating the grounds of appeal and making recommendations based on certain factors including:
"( whether there is an underlying illness ( the likelihood of a change in attendance"
That clearly is a reference to the likelihood of any change in attendance of the employee in question. The guidelines state that the appeal panel: "May ask questions about either presentation. S/he will then make the decision, after taking advice in private from the DPO and any specialist advisor at the meeting. The decision may be to … ( review the case after getting more information , or ( confirm the dismissal ( reinstate the employee, subject to any provisions s/he may wish to make regarding the employee's future attendance." [ Emphasis added ][16]It is to our mind quite clear that these guidelines do not exclude new evidence, whatever label is being attached to the process, whether it be one of appeal or review. There is no express exclusion of new evidence. The guidelines, indeed, envisage that further information may be supplied to the appeal panel or may, for that that matter, be sought by the appeal panel itself. The only words suggesting a review of things confined to matters as they stood at the date of the original hearing is the reference to "decide if dismissal was reasonable in the circumstances of the case", where the use of the past tense could arguably be seen as pointing to such a construction. But that, in our judgment, cannot prevail over the clear indications that new evidence and information is admissible.[17]Moreover, the normal principle is that new evidence is admissible in such internal appeals and that must inform the construction of these guidelines. In general, when considering the reasonableness of an employer's conduct, account must be taken by a tribunal of information coming to the employer's knowledge at the hearing of an internal appeal: Sillifant v Powell Duffryn Timber Limited [1983] IRLR 91 , at page 95, an approach approved by the House of Lords in West Midlands Co-operative v Tipton [1986] ICR 192 . Generally, at the appeal hearing the employer would be expected to take account of anything relevant to the decision to dismiss. Putting it at its very lowest, it would take clear language in the written disciplinary procedures of an employer to justify shutting one's eyes to such further information. No such clear language exists in this case. We would add that, though it does not fall for decision in the present appeal, we doubt whether even the language of such procedures could justify such an approach. We bear in mind the speech of Lord Bridge in the West Midlands Co-operative v Tipton case when he indicated that, if an internal appeal succeeds, the employee is reinstated with retrospective effect. That was a reference by his Lordship to the effect of the decision in J Sainsbury Ltd v Savage [1981] ICR 1 . That reasoning would seem to us to apply as much to a review process as to an appeal process. Consequently, new information coming into the possession of an employer on the topic of reasonableness before the appeal or review decision has been arrived at should generally be taken into account. That seems to us to accord also with the principles set out by this Appeal Tribunal in Williamson v Alcan (UK) Ltd [1977] IRLR 303 , at paragraph 15. To do anything other than take into account such new information, if relevant, seems to fall outside the range of responses of a reasonable employer. The mere fact that the tribunal below heard oral evidence about the practice of the employer being not to admit new evidence, cannot assist the respondent on this. Nor can the fact that the appeal panel took some new evidence into account as Mr Millar argues. Indeed, that almost makes it worse that the panel declined to take the medical letter from the GP into account at the hearing.[18]We conclude, therefore, that the Employment Tribunal fell into an error of law by misconstruing the guidelines and by concluding that the appeal panel was right to exclude from its consideration the medical evidence about the appellant's anticipated date of return to work. The appeal panel should have taken that evidence into account. It was highly material to its decision.[19]Normally, in cases such as this, the EAT will remit the matter for the Employment Tribunal below to reconsider it on the correct legal basis. It has, however, been urged upon us by the appellant's counsel that a further liability hearing would put an intolerable strain on the appellant who has already been suffering from a depressive illness. We are asked, therefore, to consider exercising our undoubted powers to substitute our decision on liability for that of the Employment Tribunal. We have given this aspect of the case very careful consideration. We have decided that, because of the failure of the respondent's appeal panel to take account of the new medical evidence that the appellant would be fit to return to work on 30th May 1998, the decision to dismiss her was and can be found by us to be unfair. We record that the appellant through her counsel has, for the purposes of the remedies hearing, formally abandoned any argument about the respondent's failure to offer her alternative employment.[20]The case in respect of unfair dismissal will have to be remitted to the Employment Tribunal for a remedies hearing.[21]Finally, we turn to the breach of contract issue. It is said by Mr Payne on behalf of the appellant that it is clear from the document entitled "Framework for Action" that an employee dismissed after sickness is clearly entitled either to notice or to pay in lieu thereof. Indeed, he says, it was common ground that over £6,000 should have been paid to the appellant on that basis. The respondent resisted that only on the basis of a set-off. But, says Mr Payne, when one comes to a question of set-off the burden of proof there rests upon the party who is asserting such a set-off. Consequently, it is said, that the tribunal here got the burden of proof on set-off wrong in paragraph 21 of its extended reasons, a passage to which we have already referred earlier where the tribunal indicated that the appellant bore the burden of proof and had failed to discharge it.[22]On behalf of the respondent, Mr Millar has put forward a basis on which the tribunal's finding of no breach of contract could have been justified. It is said that a witness, Mr Strong, gave evidence that the appellant was overpaid by something in excess of £7,000 and that to a certain degree that evidence could be supported by documentary evidence before the tribunal. It is acknowledged that the documentary evidence only established such overpayment to a limited extent, and assumptions were being made in respect of the remaining part of the alleged set-off.[23]However, we have to observe that, in the relevant paragraphs of its decision dealing with this topic, the tribunal does not say that it relied upon Mr Strong's evidence as establishing a set-off. Indeed, the extended reasons make no reference whatsoever to a set-off. There is no doubt that the respondent was pleading a set-off by way of an alleged overpayment of sick pay, said to extinguish the amount admitted to be due to the appellant. It follows, in our judgment, that the onus was on the respondent to prove the set-off, not on the appellant to prove the initial debt, which had, in effect, been admitted by the respondent.[24]Mr Millar concedes that as a matter of law the burden of proof in respect of set-off rested on the respondent. But he suggests that the passage in paragraph 21 of the extended reasons referring to burden of proof may simply have been a form of shorthand for saying that the appellant had not proved her case.[25]We, for our part, cannot accept that. At the very least the reasoning of the tribunal on this is unclear; but we go beyond that because we have concluded that in the circumstances the tribunal was wrong in finding that the burden of proof was on the appellant. It was not. It rested on the respondent because of the nature of the defence, namely that of set-off. In those circumstances it follows that this matter also will have to be remitted to the tribunal and that will be our order.[26]To the extent that we have indicated, therefore, this appeal succeeds.