MRS G R JOHNSON v SCOTTISH & NEWCASTLE PLC [2002] UKEAT 1028_00_2602

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 1028_00_2602Case No Appeal No. EAT/1028/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MRS G R JOHNSONAPPELLANTSCOTTISH & NEWCASTLE PLCRESPONDENT
Before
His Honour Judge A WilkieDate 26 February 2002
[1]APPEARANCES For the Appellant MR DANIEL BARNETT (of Counsel) Instructed by: Messrs Samuel Phillips & Co Solicitors Gibbs Chambers 52 Westgate Road Newcastle Upon Tyne NE1 5XU For the Respondent MR NIGEL HUNTINGTON (of Counsel) Instructed by: Peninsula Business Services Ltd Riverside New Bailey Street Manchester M3 5PB JUDGE A WILKIE QC This is an appeal by Mrs Johnson against the determination of remedies by the Employment Tribunal at Newcastle Upon Tyne, on 14 February 2000, the Tribunal having found that she was unfairly dismissed by Scottish & Newcastle PLC.[2]The Tribunal found that the reason for dismissal was by reason of conduct. The conduct involved being abuse of the telephone for personal calls made by her during a time when she was in a managerial position at one of their public houses.[3]The Respondent to the appeal did have the advantage of the Appellant having made a number of statements, in different forms, accepting that she had done wrong in the extent of the use of the telephone for personal calls. The Tribunal found that they did have an honest belief in her misconduct and that that belief was based on reasonable grounds. They also concluded that the sanction of dismissal was one which a reasonable employer could have taken, in all the circumstances.[4]However, the Tribunal decided that it was unfair dismissal because the Respondent, in the Tribunal's view, had not carried out a reasonable investigation into the matter. In particular, other staff at the pub had not been interviewed, nor had any enquiry been made to see how far the Respondent's policy on use of the telephone was known or understood by the staff.[5]The Tribunal implicitly was of the view that such investigations might have revealed that private calls had been made by other staff. They asserted in the Decision that that would clearly not be to the same extent as those made by the Applicant, though it does not appear to us that there was any evidence of that and, in particular, there was no evidence as to what had been investigated with other members of staff, as to their practice. The Tribunal having, nonetheless, decided that Mrs Johnson had been unfairly dismissed, then went on to consider remedies.[6]As to the basic award they carried out the normal and correct calculation but they submitted it to a contributory factor of 90% which left an award of £79.25. They then set out, more or less in a tabular form, the calculation of the compensatory award. As part of that award they made a finding, which they said was based on their local knowledge and time of the year that the Applicant had not mitigated her loss. The evidence was that the Applicant had, following her dismissal, obtained work helping in a guest house as a chambermaid for twenty five hours a week at £3.60 an hour. There is nowhere any finding by the Tribunal of what that would have resulted in terms of a net wage. The Tribunal, however, held that after six weeks of not having any work at all, for which they calculated she was entitled to receive the sum reflecting a total loss of income, she would have been able to secure a position in a public house or restaurant earning approximately £70 per week less, net, than she had received from the Respondent.[7]From the figures culled from the application and Notice of Appearance, we have, with the assistance of Mr Huntington, who represents the Respondent, been able to work out that that meant that the Tribunal was finding that she would have earned £83 a week net as a barmaid. There is nowhere in the Decision any finding of fact as to how many hours that work represents, or at what rate of pay and it is, therefore, not possible for the reader of the Decision to work out what, if any, difference there is between that and her earnings as a chambermaid. At any rate, assuming that level of loss up until the date of the Tribunal hearing, the Tribunal calculated her loss to date, then awarded her a further twenty six weeks at that level of loss, which resulted in a total compensatory award, without any deductions, of £4,620.76.[8]However, the Tribunal went on to make two very substantial deductions from that base figure. The first was to reduce it by 95% This highly significant conclusion is explained by the Tribunal in the following terms:
"The Tribunal made a "
Polkey" deduction having found there to be a 95% certainty that the Applicant would have been dismissed in any event, notwithstanding that a full investigation had been carried out." On top of that, that the Tribunal then made a 90% deduction from the balance, being for 90% contribution. That left a compensatory award of £23.18 from a start figure of £4,620.76. There is nowhere any statement by the Tribunal that in applying the 90% contributory fault deduction to the sum netted down, after the Polkey deduction, that they had any regard at all to the cumulative effect of these two deductions, having regard to their statutory duty to make an award that is just and equitable in all the circumstances.[9]Furthermore, in paragraph 14 of their Decision, they give some reasoning in respect of the contributory factor as applied both to the basic award and the compensatory award and they say that the Tribunal made deductions:
"…….due to the applicant's admission at the disciplinary hearing that she knew that what she was doing was wrong and the fact that there had been large scale abuse over many weeks. Also the Tribunal took into account the fact that after the dismissal, the applicant had made no effort to help herself or to follow up the letter sent to the respondent requesting an appeal hearing."
[10]The remedies award, both basic and compensatory, is subject to attack by Mr Barnett, on behalf of the Appellant. The first point he makes, and it is not seriously disputed by Mr Huntington, is that insofar as in paragraph 14 of the Decision deals with the contributory element they explicitly say that they took into account matters occurring after the dismissal. In doing so the tribunal has erred in law. It has misapplied section 122(2), which deals with the basic award. It has misapplied section 123(6), which deals with the compensatory award, and it has failed to have regard to section 127(A) which gives a specific power to a Tribunal to make a limited deduction of up to two weeks loss of earnings, where there has been a failure to avail oneself of an internal appeal procedure.[11]It seems to us that these points are unanswerable, and that the Tribunal has, as far as the contributory element of the award, plainly made an error. Furthermore, it also seems to us unanswerable, and to his credit Mr Huntington did not seriously attempt to argue the contrary, that they have made a further error in simply automatically lumping the 90% on top of the 95% Polkey reduction, without having regard to its cumulative effect.[12]As far as the question of the 95% Polkey deduction is concerned, whilst we do not go as far as Mr Barnett invites us to in saying that this was a case in which there could be no question of a Polkey deduction, it is our clear view that the Tribunal's Decision does not disclose any reasoning whatsoever, sufficient to support a deduction of 95% under the Polkey principle. Whether the failure to investigate sufficiently, as described by the Tribunal, may properly be described as a procedural or a substantive flaw, it cannot be said to be purely marginal or peripheral, as the question whether the telephone use policy was communicated to staff, and the extent to which other members of staff may or may not have abused the telephone, were plainly capable of having a substantial impact on the nice balance which the Tribunal had to apply in deciding whether the decision to dismiss was within the range of reasonable responses.[13]The fact that the Applicant admitted that she had done wrong is not necessarily the same as her admitting that her dismissal was either reasonable or inevitable. Plainly, by making that admission, she must have thereby let herself in for a contributory element deduction from whatever remedy is awarded, but it seems to us the Polkey reduction of 95%, introduced by the Tribunal, with such skeletal reasoning, is such that it cannot be allowed to stand. It discloses an error of approach and a failure to give adequate reasons, even if it may not be categorised as perverse. In our view, it cannot stand.[14]Therefore the Polkey contribution and the contributory element must be overturned. There remains the question of the calculation of the basic compensatory award of £4,600 odd. Mr Barnett has said that the Tribunal erred in law in the particular circumstances of this case in failing to draw to the parties' attention, for their comment, the fact that they had some local knowledge, which they were minded to apply, in determining when and what kind of work the Applicant might have obtained, particularly in the bar/restaurant trade.[15]We are not persuaded that that constitutes an error of law. But we are persuaded that the reasoning is insufficient. The more Mr Huntington tried to explain the calculation, the more apparent it became that the calculation does not reveal, on its face, the necessary information to enable him to do so. Thus the skeletal nature of the calculation reasoning, the failure to make findings of fact about the rates of pay, number of hours work, the date when Mrs Johnson first started her work as a chambermaid, and whether if, at all, there was any significant difference in the level of earnings of a chambermaid or a barmaid all evidence insufficient reasoning. All of those matters should have been made clear in the Decision. They would have fed into the question whether there was a failure to mitigate and, therefore, what, if any, was the continuing level of loss for the period up until the date of the Tribunal and beyond.[16]Therefore, in our judgment, the totality of the findings of this Tribunal on remedies, fails to pass muster on a number of grounds and therefore this appeal must succeed in its entirety. In view of the wholesale criticisms that we have made of the approach of this Tribunal to the remedies calculation, we think it would be quite wrong to remit this case back to the same Tribunal, or indeed to remit it in terms that it might by happenstance be placed before the same Tribunal. Our direction is that the question of remedies should be remitted to a differently constituted Tribunal for them to calculate the remedies on the basis of the findings of fact on liability and on the basis of any further evidence that the parties might seek to place before them.