LONDON UNDERGROUND LIMITED v MR PRAFUL SHAH [2001] UKEAT 0140_00_2702

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 0140_00_2702Case No Appeal No. EAT/0140/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
LONDON UNDERGROUND LIMITEDAPPELLANTMR PRAFUL SHAHRESPONDENT
Before
Mr Justice LindsayLord Davies of CoityDate 27 February 2001
[1]APPEARANCES For the Appellant MR BENJAMIN UDUJE (of Counsel) Instructed By: London Underground Limited Westminster London SW1H 0BA For the Respondent MR PHILIP GALWAY-COOPER (of Counsel) Instructed By: Messrs Baron Grey Solicitors Langtry House 441 Richmond Road East Twickenham Middlesex TW1 2EF THE HONOURABLE MR JUSTICE LINDSAY (PRESIDENT) : This is the appeal of London Underground Limited in the matter Mr Praful Shah v London Underground Limited. Mr Uduje appears for London Underground Limited and Mr Galway-Cooper for Mr Praful Shah. The appeal concerns only the remedies hearing and the result of the remedies hearing but it is necessary to set the scene by saying something as to the earlier liabilities decision.[2]The liabilities decision was the result of a hearing at London North under the Chairmanship of Mr R A Hemmings. Five witnesses gave oral evidence and there was a written note from a sixth. The unanimous decision was that the Applicant was not wrongfully dismissed but was unfairly dismissed and the proceedings were adjourned to 25 November 1999 to determine remedy. That decision was sent to the parties on 21 October 1999.[3]There are a number of features of it which we need to bear in mind when the remedies come to be discussed. First of all, Mr Shah had been dismissed by reason of his conduct. It was held that his job was such that the consequences of defective work due to the influence of alcohol had the potential to put the safety of his colleagues and the public at risk. The employer in its briefings to staff in relation to alcohol had made it clear, (and this is the finding of the Tribunal), "the key points are zero tolerance of alcohol affecting performance or safety; no alcohol to be consumed prior to duty; all employees whether safety critical or not are subject to discipline for breaches of the alcohol policy".[4]Despite that Mr Shah went drinking on 17 September 1998 at lunchtime and thereabouts knowing that he was rostered to start work at 11pm that evening. He drank 7 – 8 pints of lager. The Tribunal said " we find the Applicant took a calculated risk of drinking at least double the number of units expressed in the guidelines as the maximum pre-work consumption ". He was then deliberately (as opposed to randomly) tested for alcohol. He had had a past alcohol problem. Testing on request was a term of his contract. The Tribunal cited from it as follows: " At anytime whilst on duty, or on the company's premises for the purposes of taking up duty, staff must provide on request by an authorised person, a specimen of breath and/or urine for the purpose of screening for alcohol or for prohibited drugs. Any failure to comply will be a disciplinary offence which may render the person concerned liable to summary dismissal ".[5]Mr Shah was tested at 00:22 on Friday 18 September and found to be positive. At 1.30 he was suspended. There were then a series of disciplinary hearings appointed or convened that went off. Thus there was a meeting convened for 24 September 1998. That was postponed by reason of a message on the 22 September that Mr Shah had chest pains and would be off all week. On the 22 October 1998 it was said that a medical certificate would be forthcoming on 23 October. On the 30 October 1998 the disciplinary hearing was re-fixed for 10 November 1998. On the 5 November that was put off and re-fixed for 24 November, coupled, this time, with a warning. The warning (as found by the Tribunal) was:- " The letter advised Mr Shah that if he failed to attend, the hearing would take place in his absence and he will be notified of the results in writing ". The 24 November 1998 hearing went ahead in his absence. The disciplinary hearing ruled in his absence that there had been gross misconduct and it imposed summary dismissal as the appropriate sanction. As to that the Tribunal said; " We find on the totality of Mr Norton's evidence in this respect that the decision on penalty was a considered one ."[6]Mr Shah could have appealed against the disciplinary outcome but did not do so and no explanation is given as to why he did not. The Tribunal held that the Applicant's conduct consisted as follows: " The Respondent was discharged from its obligation to terminate with due notice by the Applicant's conduct in consuming excessive alcohol before reporting for work and being present at work with the alcohol readings referred to in our findings of fact ".[7]As we have mentioned, the reason for the dismissal was conduct and the Tribunal then dealt with two points that most seem to have impressed it. First of all they said this:
" In our judgment, the employer acted unreasonably in all the circumstances in selecting the Applicant for testing when the process being adopted was not selection for cause but an unannounced random selection. "
It does seem to us a rather strange notion. The contract enabled specimens to be required on request. The Tribunal's reading would seem to be that one cannot have a deliberate selection, only a random selection. That would lead to the extreme view that if a man staggered in, obviously drunk, obviously the worse for alcohol, he could not be tested other than randomly. It must at least be arguable that any policy that the Underground had on the subject should yield to the contract. There is certainly no need to imply into the contract that the request of which the contract spoke would only be randomly made as that would lead to the absurd result we have mentioned. But, at all events, that is the finding of the Tribunal on that subject and there is no way of going behind it. There is no appeal against it. That was one of the two points that most impressed the Tribunal. The second one is this; they continue:
" Further, in our judgment the employer acted unreasonably in all the circumstances in proceeding with the disciplinary hearing on the 24 November 1998, without any attempt to establish the genuine medical situation and the justification for the Applicant not attending the disciplinary hearing. Going ahead with the hearing without such enquiries in our combined experience of the work place falls outside the range of reasonable options facing an employer in such circumstances ."
[8]It is not very clear precisely what the position was as at the 24 November 1998. There had been a warning to Mr Shah, as we have already indicated, and it seems that only on the morning of the 24 November was there a telephone call stating, in effect, that Mr Shah was not attending and possibly saying that he was unable to attend. The finding of facts as to medical certificates are virtually non-existent but it does appear that there was a series of medical certificates and during the course of the morning here, we asked whether the last of the medical certificates covered the 24 November 1998. It was only, in fact, after the whole argument had been concluded and we came back in order to give judgment that we were handed a medical certificate dated the 23 November 1998 that seems to say Mr Shah should refrain from work for a month. Against the words "diagnosis of your disorder causing absence from work", doctor's remarks, it says "Under investigation by hospital". Whether that 23 November certificate was shown to the Tribunal below is not entirely clear. But, at all events, we know from the passage that we have read that the Employment Tribunal below was impressed by the notion that the employer should have found out more about the medical situation before going ahead on the 24 November .[9]Those are the two factors that alone determined the Tribunal to hold the dismissal to be unfair. They say in their paragraph 20 (3):
" For these reasons alone we find the dismissal to be unfair "
. Certainly the first of those two reasons would seem to be somewhat less than robust and the second one depends on the date when the certificate of 23 November was first revealed to the employer, which is not a fact that is found. We need not go into that because there was no appeal by LUL against the liability decision and accordingly, a remedies hearing was arranged.[10]Mr Galway-Cooper on behalf of Mr Shah has sought, late, to put in a cross-appeal in the remedies hearing. It seeks, in effect, to challenge findings of fact made in the liabilities decision. But there had been no appeal by Mr Shah in relation to the liability decision. The latest position is that the Registrar has refused to extend time to accept that notice of cross-appeal. At the outset today, we ruled, after hearing both parties, that Mr Galway-Cooper could not challenge the findings made at the liability decision and that the remedies appeal would have to be considered against the background of that being so.[11]On the 25 November 1999, there was a remedies hearing at the Employment Tribunal. On 14 December 1999, the decision was sent to the parties. It was, of course, the same Tribunal that had heard the liability issues and the unanimous decision was that the Applicant was awarded the sum of £13,100 as compensation for unfair dismissal, to be paid by the Respondent, LUL.[12]The Tribunal held in their paragraph 2; " We conclude that the fundamental loss of trust in the Applicant's self discipline regarding alcohol in the context of public safety considerations would make his reinstatement impracticable. It is not in our view, practicable to require London Underground to reinstate Mr Shah when the workforce have operated under a considerable period under a strict zero tolerance regime and the Respondent genuinely and justifiably believe that Mr Shah is a potential safety risk to his colleagues and the travelling public, nor, in our judgment, would it be just to order reinstatement given such profound misgivings on the part of the Respondent bearing in the mind the extent to which the Applicant bears responsibility for the loss of his employment ." As for re-engagement they said; " On the limited evidence before us regarding re-engagement, we reach the same conclusion for essentially the same reasons as our conclusions on reinstatement. Accordingly we do not order reinstatement or re-engagement ."[13]The Tribunal went on to reduce the basic award by 50%; as to that they said:
" Conduct before dismissal; a 50% reduction which we consider just and equitable in the context of our findings of fact regarding the Applicant's conduct before his dismissal ."
There is, in fact, no appeal as to the basic award. They also reduced the compensatory award by 50% and they said in relation to that:
"b) Contributory Fault A 50% reduction which we consider just and equitable to reflect the extent to which we find that the Applicant's actions caused or contributed towards his dismissal bearing in mind a range of factors including the Respondent's abuse of process in selecting the Applicant for testing other than randomly ."
Hence there was a 50% reduction. We shall have to come back to those later words, the words after "bearing in mind". One might add that the range of factors was not identified save for the feature that was expressly included, namely the Respondent's abuse of process in selecting the Applicant for testing other than randomly. There was then what is called a Polkey reduction and they deal with under (c) where they said; " c) A further 50% reduction under the Polkey principle to reflect our assessment of the likelihood of the Applicant having been fairly dismissed at the conclusion of due process. Properly represented there was scope for mitigation for an exceptional disciplinary sanction (i.e. short of dismissal) to be adopted due to the alcohol test results having been obtained through abuse of process. "[14]The Tribunal awarded two year's future loss of earnings and again reduced it by 50% saying:
" A 50% reduction on the grounds we set out in paragraph 6.1(b) above, which we consider just and equitable to reflect the extent to which, we find, that the Applicant's actions caused or contributed towards his dismissal ."
They concluded in their paragraph 8:
" Although we assess the gross losses of the Applicant to be in excess of £45,000 the total net amount payable under the compensatory award is £13,627.92 (loss to date of £5,186.25 plus future loss and other eligible categories of loss £8,441.67)which is itself capped under the prevailing statutory maximum for a compensatory award at £12,000 ."
And in paragraph 10 they say:
" Accordingly the Applicant is entitled to a basic award of £1,100 and a compensatory award limited to £12,000 ."
[15]On the 13 January 2000, LUL presented a Notice of Appeal in relation to the remedies decision. The first ground argued in the LUL appeal on behalf of Mr Uduje in the skeleton and Notice of Appeal is this:
" 6.1.1 In the process of determining the level of reduction in respect of contributory fault, the Tribunal misconstrued or misapplied the statutory test under Section 123(6) of the Employment Rights Act 1996 ("the ERA 1996") in that it had regard to the Respondent's [Mr Shah's] as well as the Appellant's [LUL's] conduct, rather than (as it should have done) limiting its enquiry to the Respondent's [Mr Shah's] conduct ."
It seems to us that that point is sound and, indeed, Mr Galway-Cooper accepts that that is the law. We revert to the passage we read earlier that said:
"…. Bearing in mind a range of factors including the Respondent's abuse of process in selecting the Applicant for testing other than randomly…. ."
[16]Section 123(6) says that where a Tribunal finds that the dismissal was to any extent caused or contributed to by 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. Mr Galway-Cooper has taken us to Parker Foundry Limited v Slack [1992] IRLR 11 and Mr Uduje has drawn our attention to Optikinetics Limited v Whooley [1999] ICR 984 EAT. All show that in considering 123 Subsection (6) one is limited to looking at the question of the extent to which the dismissal has been caused or contributed by any action of the complainant and that one must not go outside that area.[17]The passage we read from the decision of the Tribunal related expressly to the compensatory award down to the date of the hearing but the percentage reduction was the same when the Tribunal turned to the question of a reduction of future earnings lost. In considering the future earnings case, the Tribunal expressly referred back to paragraph 6.1(b) so that the argument affects future earnings as well as the earnings down to the date of the Tribunal hearing. It seems inescapable to us that the Tribunal here erred in law in that it looked outside that to which Section 123 Subsection (6) limits it.[18]In context, the extraneous matter that was taken into account can, it seems to us, only to have served to reduce the amount of the reduction, as if to reflect some wrong on LUL's part. This error of law, as it seems to us, alone justifies setting aside the compensatory award.[19]There are other points that are raised in the Notice of Appeal and which have been raised in oral argument or at least touched on that, we are bound to say, cause us considerable unease. Given the threat to the safety of colleagues and of the public and the policy of zero tolerance, all of which are represented by findings of the liability decision, could it be right to reduce by only 50% when reflecting on Mr Shah's contribution to his own dismissal? He had, after all, been held to have taken a calculated risk in drinking as he did. Does that not operate to cause the 'Oh my goodness that can't be right' reaction which is said to be the hallmark of perversity? Could it really have been right to reflect that there was scope for a sanction short of dismissal given that there was held to have been a fundamental loss of trust in Mr Shah's self discipline regarding alcohol and that he could be and was justifiably believed to be a potential safety risk to his colleagues and the public? Given that the reason why the dismissal was held to have been unfair was largely or perhaps wholly relative to procedure then, beyond a short spell during which an undeniably fair disciplinary process could have been organised, (perhaps, let us say four weeks), could it be regarded that thereafter loss over the whole remnant of two years could be truly said to be attributable to action taken by the employer and hence to fall within Section 123 Subsection (1)?[20]Such issues cause us real unease. They are such that one cannot describe them as errors of law with quite the same certainty as the misreading or misapplication of Section 123 Subsection (6). But we do not feel that we need ultimately to deal with those issues definitively. They are not black and white issues, as is the question under Section 123 Subsection (6). But the decision on compensation is very much a unity and the case of Raoul v Civil Aviation Authority [1994] IRLR 240 in the Court of Appeal shows how closely related considerations are in compensation. One fact needs to be taken into account along with another and sometimes in a particular sequence. 21.. Indeed Mr Galway-Cooper himself argues that the Tribunal erred in law further in relation to the points emerging from Raoul and also from Wolesley v Simmons [1994] ICR 505 EAT as to the order in which reductions are to be made if they are to be made in relation to the matters to be considered under Section 123 Subsection (6) and 123 Subsection (1). Given the error of law that we have mentioned, we set aside the whole of the Remedies decision save for the basic award, as to which there has been no appeal. However, we are not so confident that we have a full enough picture of the evidence given at the Liability hearing and what was argued and what was given in evidence (if at all) at the Remedies hearing, to be able confidently to substitute our own figure for the figure for reduction which the Tribunal settled on. Accordingly, it seems to us that what we have to do is to remit the matter. On balance we remit it to the same Tribunal as before although, obviously, we hope that they will take account of the doubts and difficulties that we have mentioned and, of course, in particular, take into account our findings as to Section 123 Subsection (6).[21]The parties will be able to address argument afresh as to contribution by Mr Shah to his own dismissal and as to Polkey and as to any other relevant matters. Unless the Tribunal below rules otherwise, it is not to receive further evidence. If it rules that it is not in a position fairly to reconsider the question of compensation without fresh evidence then, of course, it will be open to it to require that there be further evidence. But, short of that, we see no need for the Tribunal to embark on fresh evidence. Of course, the parties will be able to address argument afresh based on such evidence as has already given on the compensation issues.[22]The Employment Tribunal must also, of course, be careful to regard itself as bound by its own findings at the Liability hearing and not to permit those to be re-opened. Subject to that direction, we simply set aside the whole of the Remedies decision save for the basic award, as I have mentioned. We remit the matter to the same Tribunal as before and the position as to further evidence is as to be as we have just indicated.