MR J DHESI v BUNNCHER & HASELER LIMITED [2000] UKEAT 761_99_1801

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2000] UKEAT 761_99_1801Case No Appeal No. EAT/761/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR J DHESIAPPELLANTBUNNCHER & HASELER LIMITEDRESPONDENT
Before
His Honour Judge Peter ClarkLord Gladwin of CleeDate 18 January 2000
[1]APPEARANCES For the Appellant MR T ROCHFORD (of Counsel) Messrs Bassi Solicitors 220 Soho Road Handsworth Birmingham B21 9LR For the Respondents MISS C D'SOUZA (of Counsel) Messrs Moseley Chapman & Skemp Solicitors 4 Trinity Place, Midland Drive Sutton Coldfield West Midlands B72 1TX JUDGE PETER CLARK : This is an appeal by the applicant before the Birmingham Employment Tribunal, Mr Dhesi, against the decision of that tribunal sitting on 11th March 1999 under the Chairmanship of Mr B Lloyd, promulgated with extended reasons on 9th June 1999, that although unfairly dismissed by the respondent, he was not entitled to any award of compensation therefor. The relevant facts as found by the tribunal were these. The respondent company manufactures kitchen equipment for the catering industry. The appellant commenced employment with the respondent as a machine operator on 12th December 1989. He remained so employed until 8th September 1998, when he was summarily dismissed on the grounds of gross misconduct.[2]The facts leading to his dismissal were not in dispute. The respondent had put in place strict rules, including a rule that employees should not leave the premises during working hours without clocking off or obtaining authorisation from a supervisor. A notice was posted by the clocking machine warning employees that breaches of the rules "may render an employee liable to summary dismissal."[3]On a previous occasion the appellant himself had been warned about leaving the premises and in the week before the material incident, which took place on 7th September 1998, another employee had been dismissed for such an offence.[4]On 7th September the appellant, who was working on the afternoon shift, had parked his car outside the factory premises on the highway. At about 6 p.m., during his break period, he left the premises without clocking off or seeking permission from his supervisor, in order to repark his car. He was seen to leave by the managing director, Mr Brain.[5]On the following day he was questioned by his supervisor and then seen by the work's manager who summarily dismissed him. An appeal to Mr Brain himself was rejected.[6]The tribunal found that the reason for dismissal related to the appellant's conduct, and that the respondent was justified in dismissing him summarily on the grounds that he had not followed their strict procedure for leaving the premises. Consequently the respondent had established a potentially fair reason for dismissal and if it was pursued below, successfully defeated the appellant's claim for damages for wrongful dismissal.[7]As to the fairness of the dismissal, the tribunal found that the dismissal was procedurally unfair. The respondent's investigation was inadequate. The investigation by lower management was a mere formality, given the view, which Mr Brain had formed about the appellant's conduct. The disciplinary process was perfunctory. Mr Brain, having formed that view, could not realistically approach the task of hearing the appellant's appeal objectively. In these circumstances and for those reasons the dismissal was unfair. However, at paragraph 14 of their reasons the tribunal expressly find that dismissal for the appellant's misconduct in this case would fall within the range of reasonable responses applying Lord Denning MR's test in British Leyland (UK) Ltd v Swift [1981] IRLR 91 .[8]Turning to the question of remedies. The appellant sought an order for his reinstatement. The tribunal declined to make that order. They found that, bearing in mind s.116(1)(c) and 3(c) of the Employment Rights Act 1996 , it would not be right to order either reinstatement or re-engagement in circumstances where the appellant had, in their view, seriously misconducted himself. He had contributed to his dismissal, they found, to the extent of 100%.[9]So far as to the alternative remedy of compensation was concerned, the tribunal found that that level of contribution on the part of the appellant extinguished both his basic and compensatory award entitlement. In addition, as we understand the tribunal's reasons, they would have found, for the purposes of the compensatory award, that it would not be just and equitable to make any award since, had a fair procedure been adopted, the appellant would inevitably have been dismissed. Accordingly the appellant received no remedy for his undoubted unfair dismissal. The statutory provisions[10]The following provisions of the 1996 Act are material to the issues raised in this appeal.[11]S.122 deals with deductions from the basic award, normally calculated in accordance with ss. 119-121. S122(2) provides:
"(2) Where the tribunal considers that any conduct of the complainant before the dismissal … was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly."
[12]The regime for calculating the compensatory award is to be found in .s123. The relevant provisions are:
"(1) … the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer. … (6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by the any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."
The proper approach[13]On the authorities, and in particular Rao v Civil Aviation Authority [1994] IRLR 240 CA , the correct order of events for a tribunal assessing compensation for unfair dismissal follows the following three stages:(1) first assess the amount of the loss which the appellant has sustained under s.123(1) including the loss of the chance of the employment continuing if the appellant had not been unfairly dismissed. The Polkey reduction. If, but for the unfairness as found, the appellant would have been dismissed fairly anyway, his loss is nil and there will be no compensatory award. The Polkey principle has no application to the basic award.(2) In the light of that finding the tribunal should consider the extent to which, if at all, the appellant has contributed to his own dismissal under s.123(6). A finding of 100% contribution will extinguish the compensatory award regardless of the finding under s.123(1).(3) Consider whether the appellant's conduct was such that it is just and equitable to reduce the amount of the basic award to any, and if so what extent. The percentage deduction from the compensatory award and the basic award under stages (2) and (3) above may be the same or a different figure. The Appeal[14]Mr Rochford first submits that on the face of their reasons the tribunal have confused those tests. The first with the second and third; and the second and third tests. Although not set out in the order which we have taken from Rao , it seems to us, looking at the tribunal's reasoning, that they concluded:(a) that the loss under s.123(1) was nil, applying the Polkey principle, because a fair procedure would have resulted inevitably in the appellant's summary dismissal. However, it was unnecessary for them to reach a formal finding to that effect because(b) in any event, both the compensatory award, applying s.123(6), and the basic award, applying s.122(2), ought to be reduced to the extent of 100% on the grounds of the appellant's conduct. The findings under (b) were sufficient to result in a nil award to the appellant, regardless of any separate and distinct finding under (a).[15]Secondly, Mr Rochford, whilst accepting that a finding of contributory fault at both stages 2 and 3 is appropriate, submits that the finding of 100% at each stage is perverse. He relies on two matters; first what he describes as the mitigating features, which he lists as follows:(i) that the tribunal found that the appellant had acted "foolishly and unreasonably", rather than dishonestly;(ii) the reason for his absence, that is to enable him to move his car a short distance into the respondent's car park;(iii) the fact that he did so during his break;(iv) there was suggestion that he tried to cover up what he did;(v) that he was honest during the investigation; and(vi) the length of his service, 8 years 9 months, with the respondents. Secondly, he points to the fact that the respondent was found by the tribunal to have acted unfairly in the way in which it dealt with the appellant, so that it could not be said that the appellant's conduct was the sole cause of the dismissal, a necessary prerequisite to any finding of 100% contribution.[16]Dealing with the first point, we are not persuaded that the tribunal overlooked what Mr Rochford calls the mitigating factors. They are set out in their reasons. They were, we think, taken into account by the tribunal. However, the tribunal took a serious view of the appellant's misconduct in the light of the respondent's clearly stated strict disciplinary rule, the previous warning to the appellant and the fate which befell his fellow-employee for a similar offence the previous week.[17]As to the second point, Mr Rochford has referred us to the EAT judgment of Browne-Wilkinson J, on behalf of the EAT, in Gibson v British Transport Docks Board [1982] IRLR 228 . There a finding of 100% contribution was reduced, on appeal, to 90%. However, as Miss D'Souza points out, on the facts of that case the procedural defect which led to the Industrial Tribunal's finding of unfair dismissal was such that the result, dismissal, might have been different had a fair procedure been followed. Hence it could not be said in that case that the employees' conduct was solely responsible for the dismissals. The factual finding in this case is that a fair procedure would inevitably have led to dismissal. That is not to confuse the tests at stage 1 compared with stages 2 and 3; it is to apply the approach in Gibson to the particular facts of this case. Accordingly we reject Mr Rochford's second submission.[18]Finally, Mr Rochford has addressed an argument to us based on certain observations by the Appeal Tribunal, Morison J presiding, in Haddon v Van den Bergh Foods [1999] IRLR 672 , supported, we might add, by Lord Johnston in Wilson v Ethicon Limited [2000] IRLR 4 , on the range of reasonable responses test. We do not think that the question of the proper test under s.98(4) directly arises for consideration in this appeal; in any event, we have not been referred to all the relevant authorities. It is sufficient for present purposes that we are satisfied, applying either the traditional range of reasonable responses test or the apparently narrower test proposed in Haddon , that this tribunal was entitled to conclude, as it did at paragraph 14 of its reasons, that but for the procedural deficiencies identified elsewhere in the reasons, the dismissal would have been fair applying the words of s.98(4).[19]Finally, we bear in mind the warning given by the Court of Appeal in Hollier v Plysu Ltd [1983] IRLR 260 as to our powers to interfere with Employment Tribunal findings as to the level of contribution. In our judgment there are no grounds in law for interfering with this tribunal's conclusions, based on the facts as found. Accordingly, this appeal is dismissed.