MS C E SAMUEL v LONDON BOROUGH OF LEWISHAM [2001] UKEAT 1015_00_2911

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 1015_00_2911Case No Appeal No. EAT/1015/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MS C E SAMUELAPPELLANTLONDON BOROUGH OF LEWISHAMRESPONDENT
Before
His Honour Judge Peter Clark Mr P DawsonDate 29 November 2001
[1]APPEARANCES For the Appellant MR GARY MORTON (Of Counsel) Instructed by: Messrs Grant Saw & Sons Solicitors 142 Greenwich High Road Greenwich London SE10 8NN For the Respondent MR T J PULLEN (Of Counsel) Instructed by: London Borough of Lewisham Legal Services Department Lewisham Town Hall London SE6 4RU JUDGE PETER CLARK This case comes before us for a full hearing with both parties present in the following circumstances.[2]By an Originating Application presented to the Employment Tribunal on 9 April 1999 the Appellant, Ms Samuel, complained of unfair dismissal, breach of contract and race and sex discrimination, following her dismissal by the Respondent Council by whom she was employed as a Community Support Worker in their Social Services Department from 22 October 1990 until her summary dismissal on 14 January 1999. The claims were resisted.[3]The matter came on for hearing before an Employment Tribunal sitting at London (South) under the chairmanship of Mr D N Milton over 8 days in November 1999 and June 2000, followed by 2 days deliberation by the Employment Tribunal in private. The Employment Tribunal's decision, with very full Extended Reasons running to 25 pages, was promulgated on 5 July 2000.[4]Due to limitation constraints the claims which the Employment Tribunal was required to consider were:(1) Indirect sex discrimination(2) Race and sex victimisation(3) Unfair dismissal(4) Breach of contract; wrongful dismissal.[5]The Employment Tribunal dismissed all claims, save for that of wrongful dismissal. As to that successful claim, they held that the Appellant was entitled to 9 weeks pay in lieu of contractual notice, less monies earned from alternative employment during the notional notice period.[6]Against the Employment Tribunal's findings adverse to her the Appellant appealed by a Notice dated 1 August 2000 and settled by Mr Gary Morton, who had appeared on her behalf below as he does today. There were 8 separate grounds of appeal.[7]In the usual way the appeal was listed for an Ex Parte Preliminary Hearing. That hearing took place before a division presided over by Lindsay P on 31 January 2001. In a detailed judgment given by the President on behalf of this Tribunal the first 5 grounds of appeal, relating to discrimination and victimisation findings below, were dismissed. The remaining grounds, grounds 6, 7 and 8 were permitted to proceed to this full hearing. Those 3 grounds all relate to the Employment Tribunal's decision to dismiss the Appellant's complaint of unfair dismissal.[8]By their Answer dated 3 May 2001 the Respondent challenged the Employment Tribunal's finding as to the Respondent's reason for dismissal for the purpose of the unfair dismissal claim and raised a cross-appeal against the measure of damages found by the Employment Tribunal to flow from the Appellant's wrongful dismissal.[9]Thus our attention is focussed essentially on the Employment Tribunal's findings in relation to both unfair dismissal and wrongful dismissal. That said, it is relevant to relate the Employment Tribunal's findings in relation to the complaint of indirect sex discrimination in order to fully understand their reasoning.[10]We begin with the material facts as found by the Employment Tribunal. The Appellant worked in the Respondent's service unit called Community Support Team (CST). CST provided 24 hour support to adults with learning disabilities to enable them to live in their own homes.[11]Teams of support workers were based at a shared house providing 24 hour cover for the house. Critically, staff worked a revolving shift rota which required them to sleep-in on the premises from time to time.[12]The Employment Tribunal found that there was a contractual obligation for CST workers including the Appellant to sleep-in. That had been the case for a number of years and the Appellant had performed that duty without demur until after her period of maternity leave, leading to the birth of her first child. She returned to work on 23 November 1997. There then followed a period of grace, long-established within the Council by custom and practice, of 6 months during which she was not required to do late shifts nor sleep-in shifts.[13]That was followed by a large number of discussions, meetings, correspondence and finally disciplinary hearings about whether and if so when the Appellant would return to sleep-in duties. The Employment Tribunal found that considerable efforts were made by management to re-deploy the Appellant so as to accommodate her desire to avoid sleep-ins. On 2 November 1998 her Service Unit Manager wrote to her saying that various temporary short-term measures were now at an end; the Appellant would be required to work to her contract. In response the Appellant wrote shortly thereafter:
"I am unable to do the sleep-in in as rostered for 9 November 1998 for the reasons previously set out and since you are unwilling to grant annual leave indefinitely or considering internal swaps and I must now leave it in your hands to make the final decision in this matter."
[14]The disciplinary process then swung into operation. She was suspended from duty on full pay and charged with gross misconduct, that is, her refusal to work her contracted shifts.[15]Following a full disciplinary hearing which took place on 5 January 1999 she was given a final ultimatum, warning of summary dismissal if she continued with her refusal to comply with her contractual obligation to do sleep-in duty, by letter dated 7 January. On 10 January she wrote to the Respondent stating that she was not willing to work shifts after 8 pm or to undertake sleep over shifts. As a result she was summarily dismissed by letter dated 14 January. Against that factual background the Employment Tribunal concluded:(1) indirect sex discrimination The Employment Tribunal rejected the Appellant's principal submission that the Appellant's dismissal for failure to carry out her sleep-in duties was indirectly discriminatory on the basis of her sex in that it was a requirement or condition within her contract of employment with the Respondent which indirectly discriminated against women as the principal child carers. The Employment Tribunal accepted that the Appellant's contract, in common with other colleagues in the CST, imposed such a requirement or condition. They found that the relevant pool for the necessary comparison was staff in the CST Department, but found no disproportionate impact on women. Had they done so, they would have upheld the Respondent's defence of justification. The Respondent had a duty to clients of CST to provide a 24 hour service. There was a professional need for continuity across the shifts. The whole set-up involved full involvement by support workers with the clients. It was not desirable or possible to run separate day and night shifts (see reasons paragraph 37). The Employment Tribunal carried out the balancing exercise between the needs of the Respondent and those of the Appellant. Finally they concluded that the Appellant was able to comply with the requirement.(2) Unfair Dismissal The Employment Tribunal found that the factual reason for the Appellant's dismissal was her refusal to work the full terms of her contract in particular the sleep-in and late shift obligations. That was not in dispute (reasons paragraph 83). The Respondent was entitled to require the Appellant to work to her contract for the reasons given for their finding on justification in the indirect sex discrimination claim (reasons paragraph 85). However, they found that the Respondent was wrong to conclude that the Appellant was guilty of gross misconduct and to label her refusal to work to her contract as gross misconduct (paragraph 96) or for that matter misconduct (paragraph 99). They continue, in paragraph 99:
"We came to the conclusion that the Employment Rights Act 1996 and indeed all the predecessor Acts have solely been concerned with the fairness or unfairness of "the dismissal" and not with the additional feature of whether the employer was wrong to dismiss summarily and to attach the dismissal (sic) of gross misconduct."
They go on to express the view that the correct label to attach to the clear and obvious factual reason for the dismissal was either "capability" or "some other substantial reason". They then went on to consider whether the dismissal was fair under Section 98(4) ERA and found that it was, expressing their reasoning at paragraph 102 thus: "We find that as a matter of fact they (the Respondent) acted in most regards as if the Applicant was at risk of dismissal for redundancy or capability save by the attaching of the label and implementing the suspension. We had no doubt that the Applicant found her suspension and the label attached hurtful and we find that that was unnecessary hurt which she did not deserve. On the other hand we find that the procedure adopted by the Respondents the efforts to find alternative employment for the Applicant the amount of time she was given to wait for opportunities to come up and the very extensive consultation discussion and exchange of arguments about all the possibilities and alternatives over a number of months were all eminently reasonable and particularly reasonable in the face of the very intransigent attitude being adopted by the Applicant. For these reasons therefore we also came to the conclusion that the Applicant's claim of unfair dismissal fails. (3) Wrongful Dismissal They found that the Appellant's breach of contract was not so grave as to require summary dismissal. Accordingly the complaint of wrongful dismissal was upheld. There is no cross-appeal against that finding on liability. As to the measure of loss they considered a submission made on behalf of the Respondent, relying on the authority of Miles v Wakefield Metropolitan District Council [1987] ICR 368 (HL) and Wilusznski v Tower Hamlets London Borough Council [1989] ICR 494 (CA), that the employer is not required to accept partial performance by employees or to pay wages to non-performing employees. They nevertheless found that the Appellant was entitled to 9 weeks full pay in lieu of notice, net of deductions, less monies earned during the notional notice period, leaving the mathematics to the parties.[16]In considering both the appeal and cross-appeal now before us it is convenient to consider the matter under the general heads of unfair and wrongful dismissal. Unfair Dismissal[17]Three issues arise in relation to the Employment Tribunal's findings on this part of the Appellant's claim:(1) The first question is whether the Employment Tribunal fell into error in finding that the reason for dismissal, for the purposes of Section 98(1) and(2) ERA, was not conduct as the Respondent contended, but capability or some other substantial reason. Mr Morton submits, correctly in our view that:
"a reason for the dismissal of an employee is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee."
That formulation appears in the judgment of Cairns LJ in Abernethy v Mott Hay & Anderson [1974] ICR 323, 330C. It was approved by the House of Lords in West Midlands Co-Op Society Ltd v Tipton [1986] IRLR 112, paragraph 17 and gratefully adopted by me in Beedell v West Ferry Printers Ltd [2000] IRLR 650 , a case in which an appeal to the Court of Appeal was dismissed [2001] ICR 962 , as was a subsequent petition for leave to appeal to the House of Lords (965D).[18]Returning to the facts of Abenethy , the employer dismissed the employee ostensibly by reason of redundancy. In resisting his claim of unfair dismissal they contended that the potentially fair reason for dismissal was redundancy and/or lack of capability. An Employment Tribunal found that there was no redundancy situation, but concluded on the facts that the employer had established some other substantial reason for dismissal, a potentially fair reason. They went on to find that dismissal for that reason was not unfair.[19]The Court of Appeal upheld that decision, holding that the wrong legal label applied by the employer did not matter so long as there was a set of facts which the Employment Tribunal could find was the principal reason for dismissal.[20]It follows, contrary to Mr Morton's broad submission, that it is open to an Employment Tribunal in an appropriate case to categorise the set of facts found to be the employer's reason or principal reason for dismissal differently from the statutory label attached by the employer.[21]The real question, we think, in the present case, is whether the Employment Tribunal permissibly found, on the facts, that the reason for dismissal was not conduct, but capability or some other substantial reason.[22]The short answer, accepting Mr Pullen's alternative submission that the Employment Tribunal ought to have found the reason for dismissal to be the Appellant's conduct, is in our judgement, in the negative.[23]The Tribunal made a clear finding on undisputed evidence that the Respondent's factual reason for dismissal was the Appellant's refusal to work the full terms of her contract, in particular the sleep-in and late shift obligations. Dismissal for an employee's refusal to obey a lawful and, as the Employment Tribunal here found, reasonable instruction by the employer is a classic example of dismissal by reason of conduct. The examples in the cases are legion and need not be repeated here. I reviewed this branch of the law in Farrant v The Woodroffe School [1998] ICR 184. I adhere to what I said in that case. Even a genuine but mistaken belief by the employer that his employee has acted in breach of contract by refusing to obey an instruction will suffice to discharge the burden, not a heavy one, on the employer to show that conduct was the reason for dismissal. See Beedell , paragraph 19 and the cases there cited, particularly Kent County Council v Gilham [1985] IRLR 18, paragraph 18, per Griffiths LJ.[24]On the facts here the instruction given by the Respondent was both lawful and reasonable. The Appellant steadfastly refused to comply with it, despite a clear warning that by continuing to take that line she faced dismissal.[25]In these circumstances we would hold that the Employment Tribunal was wrong in law to attach the labels capability or some other substantial reason to the reason for dismissal here. It was plainly conduct as both Counsel accept.[26]We think that the explanation for this error may lie in the confusion between the question as to whether the employee was in fact guilty of gross misconduct, traditional industrial short-hand for a repudiatory breach of contract by the employee allowing the employer to treat himself as discharged from further performance under the contract and thus to summarily dismiss the employee without notice at common law and the statutory question raised by Section 98 (1)(a) and (2)(b) ERA, has the employer shown that his reason or principal reason for the dismissal relates to the conduct of the employee? For a discussion as to this distinction, see Farrant 192B-194E. (2) The next question is whether, having mislabelled the Respondent's reason for dismissal, the Employment Tribunal's further finding that the dismissal was fair under Section 98(4) ERA can be impugned.[27]Mr Morton boldly submits that since the Respondent's reason for dismissal was gross misconduct and the Employment Tribunal went on to find that this was not the reason for dismissal (reasons paragraph 99) they ought to have gone on to find that the dismissal was unfair.[28]He submits, correctly, that the question of reasonableness in Section 98(4) refers back to 'it', that is, the potentially fair reason for dismissal. See Smith v Glasgow City District Council [1987] ICR 796 (HL)[29]We return to Abenethy . In the present case the Employment Tribunal made a clear finding as to the set of facts which constituted the Respondent's reason for dismissal. It was that reason, subsequently mislabelled by the Employment Tribunal, the reasonableness of which they were judging under Section 98(4).[30]It follows that we can properly look at the Employment Tribunal's reasoning under Section 98(4). Having done so it is abundantly clear that the Employment Tribunal's conclusion that the dismissal was fair can be sustained. The Respondent took all reasonable steps to accommodate the Appellant; it was entitled to require the Appellant to work to her contract; there was no real alternative; their stance was justified; the Appellant was given an opportunity to recant. She knew, following the disciplinary hearing on 5 January 1999, that her continued defiance would lead to her dismissal (see the ACAS Code of Practice, to which Mr Morton has referred us) but she persisted. Having been given every opportunity she maintained her position and her dismissal became inevitable.[31]Insofar as it is not spelt out by the Employment Tribunal, it is plain to us that dismissal fell within the range of reasonable responses open to this employer. See Beedell paragraphs 23-50, 70 and Post Office v Foley [2000] IRLR 827 , paragraph 9, per Mummery LJ. (3) Having found that the Appellant was wrongfully dismissed at common law it must follow that the Appellant was unfairly dismissed, submits Mr Morton.[32]We reject that proposition utterly. The tests for wrongful dismissal at common law and statutory unfair dismissal are quite different. See Farrant . It is correct to say that the contract test is relevant both to questions of constructive dismissal under Section 95(1)(c) ERA, Western Excavating (EEC) Ltd v Sharp [1978] ICR 221 and to both the question of dismissal, if it arises and the employer's entitlement to dismiss summarily at common law. However, it has nothing to do with(a) the reason and(b) the sufficiency of that reason under Section 98 ERA. The statutory reason for dismissal in this case was conduct, not gross misconduct; the question of the reasonableness of dismissal for that reason is not dependent on the contractual test of repudiatory breach of contract by the employee, but the statutory test as developed in the cases and discussed fully in both Beedell and Foley .[33]It follows, in our judgment, that there is no logical inconsistency between an Employment Tribunal finding that the dismissal was fair but wrongful, nor indeed the other way about.[34]Because Employment Tribunals now, since the Extension of Jurisdiction Order 1994, are frequently asked to decide both the questions of unfair dismissal and wrongful dismissal it is essential that the different tests in each claim and the different factual questions raised are kept clearly in mind. In short, for the purposes of unfair dismissal, where there is a dismissal, actual or constructive, has the employer shown a potentially fair reason for dismissal under Section 98(1) and/or (2) ERA and if so, has he acted reasonably in treating that reason as a sufficient reason for dismissal. Section 98(4)? As to wrongful dismissal, is the employee in fact in repudiatory breach of the contract of employment, entitling the employer to summarily dismiss him? Wrongful Dismissal[35]We need say no more about the Employment Tribunal's finding that the Appellant was wrongfully dismissed. That finding is not challenged by way of cross-appeal. The question here relates to the measure of loss recoverable by the Appellant flowing from her wrongful dismissal.[36]Mr Pullen submits, on the authority of Miles v Wakefield MDC [1987] ICR 368 (HL), that the employer is not obliged to accept partial performance from the employee. He should be assumed to have performed the contract in the way most favourable to him for the purposes of assessing damages. Therefore the Appellant is not entitled to pay in lieu of notice by way of damages.[37]We reject that argument on the facts here. In Miles the employer refused to accept part-performance by the employee and told her not to attend for work. He was held by the House of Lords entitled not to pay her for those days.[38]Here, the Respondent continued to pay the Appellant her full pay during her suspension after she had indicated that she would not fully perform her contract. Had the Employment Tribunal found that her refusal amounted to a repudiatory breach of contract, that she had wrongly repudiated the contract, to use the words of Diploch LJ in Lavarack v Woods [1967] IQB 278, 294 C-D, to which Mr Pullen referred us, then she would have been entitled to nothing. She would not have been wrongfully dismissed. But that was not the Employment Tribunal's finding; she had breached her contract, but not fundamentally. The Respondent continued to pay full pay after she had indicated her determination not to comply fully with her contractual obligations. In these circumstances she is entitled to 9 weeks net pay, less monies earned or state benefits received during that notional 9 weeks period. For these reasons we dismiss both the appeal and cross-appeal.