EAT/1030/01/PRW LONDON UNDERGROUND LIMITED v MS D FERENC-BATCHELOR [2002] UKEAT 1039_01_2910

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 1039_01_2910Case No Appeal Nos. EAT/1039/01/PRW EAT/0045/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
EAT/1030/01/PRW LONDON UNDERGROUND LIMITEDAPPELLANTMS D FERENC-BATCHELORRESPONDENTEAT/0045/02/TC MARK ANDREW HARDINGAPPELLANTLONDON UNDERGROUND LTDRESPONDENT
Before
His Honour Judge J Altman Miss S M Wilson Mr G H WrightDate 29 October 2002
[1]APPEARANCES For the 1st Appellant For the 2nd Appellant MR DIJEN BASU (Of Counsel) MR A FREER Solicitor Messrs Patttinson & Brewer Solicitors 71 Kingsway London WC2B 6ST For the 1st Respondent For the 2st Respondent MR A FREER Solicitor Messrs Patttinson & Brewer Solicitors 71 Kingsway London WC2B 6ST MR DIJEN BASU (Of Counsel) JUDGE ALTMAN This judgment deals with two appeals. London Underground appeal from the decision of the Employment Tribunal at London South on 2 July 2001. Mr Harding appeals from the decision of the Employment Tribunal sitting at London North on 16 October 2001. The appeals have been heard together because they raise issues as to whether London Underground denied to the employees a statutory right to be represented at a disciplinary hearing by virtue of their disciplinary and attendance at work procedures.[2]We are informed that this is the first time that consideration has been given at appeal level to the statutory right and its application to practical disciplinary procedures. Both cases are concerned essentially with that part of London Underground's disciplinary arrangements that deal with the giving of what is called an "informal oral warning" and whether an employee is entitled to be represented on such occasions in accordance with Section 10 of the Employment Relations Act 1999. Section 10 provides:
"(1) This section applies where a worker – (a) is required or invited by his employer to attend a disciplinary or grievance hearing, and (b) reasonably requests to be accompanied at the hearing."
Section 10(2) provides:
"Where this section applies the employer must permit the worker to be accompanied at the hearing by a single companion"
[3]We have been concerned in these appeals only with disciplinary hearings and not grievance hearings. In Section 13(4) of the 1999 Act there is a definition of a disciplinary hearing which gives rise to an entitlement to representation. It provides that:
"For the purposes of Section 10 a disciplinary hearing is a hearing which could result in – (a) the administration of a formal warning to a worker by his employer (b) the taking of some other action in respect of a worker by his employer, or (c) the confirmation of a warning issued or some other action taken."
[4]On the one hand the employer argues that management must be able to deal on the spot with incidents that occur from day to day and which require no more than a stiff admonishment and a warning not to repeat the complained of conduct or words. They argue that they must be able to do this without a set piece hearing that requires a union representative. For London Underground to arrange union representation generally means taking the union representative from duties probably as a driver for a prearranged period with all the disruption that such arrangements imply.[5]On the other hand the employee will say that if his actions or words are to be challenged at a hearing where he on his own may be at a disadvantage and where the outcome may well affect his record, his prospects and his working future, then he should be able, in the words of the Act, to reasonably request to be accompanied. The issue before us requires considering where between those positions the right to representation falls. We have considered first the statutory provisions themselves then their application to London Underground disciplinary procedure and then the fact of the two appeals before us.[6]In applying the Act to the workplace we accept the submissions made that the right to representation arises where there is a disciplinary hearing and that it is necessary to determine whether there has been a hearing or is to be a hearing. It is not simply "disciplinary action" or proposed disciplinary action which gives rise to the right. It follows, it seems to us, that this is essentially a procedural provision, in effect an adjunct to a disciplinary procedure, a compulsory statutory adjunct to any disciplinary procedure that provides for a hearing.[7]Therefore there is required to be some event where an employee is called upon to meet an allegation where he would without representation be vulnerable and at a disadvantage if on his own. In determining whether or not there is a hearing we agree with the submissions that that is not to be judged or at least solely judged by reference to what may happen at that hearing. The wording of Section 13(4) makes it clear that a disciplinary hearing is in fact a hearing. Mr Freer on behalf of the employees in these two appeals agrees that one must look at whether there has been a hearing, but in so far as there is any issue between the parties on this matter it is that Mr Freer cautions against too narrow a test of whether there is a hearing and he submits that it is not necessary to identify whether there is a special room or special representative or whether the hearing is recorded in a particular way. Mr Basu stresses the importance of there having to be some form of hearing. Assistance in this regard is to be seen in the ACAS Code in which in paragraph 54 wording very similar to that in the statute is set out:
"The statutory right to be accompanied applies specifically to hearings which could result in"
The three consequences in section 13(4). It is interesting, however, that in referring to the first possible consequence, the administration of a formal warning to a worker by his employer, the ACAS code provides:
"ie a warning, whether about conduct or capability, that will be placed on the worker's record"
And it seems to us in the end that that highlights a critical distinction.[8]In paragraph 64, as Mr Basu points out, the consequences of representation are described as a right to address the hearing and a right to confer privately either in the hearing room or outside, as demonstrating the sort of ingredients that would constitute a hearing. In paragraph 14 of the Code it says that:
"before a decision is reached or any disciplinary action is taken there should be a disciplinary hearing at which workers have the opportunity to state their case."
Prior to this stage, the code states later:
"where matters remain informal, the statutory right of being accompanied does not arise."
Furthermore reference is made to Section 10(2)(b) of the Act where it is emphasised that where the Section applies the representative must be permitted to address the hearing, again demonstrating to an extent the degree of formality that is needed.[9]It seems to us that whether in a particular case there has been a hearing depends on the findings of fact of the Employment Tribunal. Mr Basu accepts that in order to do justice in a particular case the Employment Tribunal may adopt a liberal approach to the analysis of the evidence in order to determine whether there has been a hearing. It seems to us that no assistance can be gained and no value achieved by seeking to define any more precisely the necessary ingredients of a hearing as a matter of law on appeal. The Tribunal may look at both the form and the substance of what takes place and the process of decision making. They may look at the consequences or the possible consequences that may follow by way of action or sanction. Those may of course not be determinative in any way but may be relevant evidence reflecting on the nature of what has gone before.[10]Further guidance in the approach to this can again be seen in the ACAS Code under the heading of "The Procedure in Operation" and paragraph 12 states that:
"minor cases of misconduct and most cases of poor performance may best be dealt with by informal advice coaching and counselling rather than through the disciplinary procedure. Informal warnings and/or counselling are not part of the formal disciplinary procedure and the worker should be informed of this."
[11]If a hearing has taken place the next question is whether it is the sort of hearing at which there could be one of the three consequences set out in Section 13(4) to which I have already referred. The ACAS Code in the passage that we have just quoted sets out the sort of distinction that is to be drawn; informal warnings and/or counselling are not part of the formal disciplinary procedure and the worker should be informed of this. The code then reminds the reader that that is distinguished in the Code from warnings which form part of the record of the employee. Of the three possible consequences that may define a disciplinary hearing we return later to section 134(a). Section 13(4)(b) relates to the taking of some other action in respect of a worker by his employer. We accept the submissions made by Mr Basu on behalf of London Underground that that is to be read as some sort of action similar to a warning. In other words some form of disciplinary sanction. After all, management conducts all sorts of meetings with their employees and arranges all sorts of action as a result. One could not define all those meetings as disciplinary meetings or hearings. It would make a nonsense of the legislation. Training, counselling and advice are clearly not included in the "taking of some other action" and indeed the passages of the ACAS Code to which I have already referred spell that out. It may be that simple investigations may lead on to the need for a disciplinary hearing but at that stage management will signal a change and the initiation of a disciplinary procedure.[12]Fact finding is not generally regarded or regarded in the Code it seems to us, as part of a disciplinary hearing unless later transformed into it. Management, it seems to us, are entitled to give an instruction without it being a sanction. The aim at an initial stage no doubt is for an employer to get the employee to improve and different methods may be used and that instruction may lead maybe to further training or counselling. It is postulated, and one of the cases before us refers to the possibility, that that instruction may be refused by the employee and that may lead to further action but of course that would be a completely new situation. The issue would have arisen as to whether the refusal of a reasonable management instruction itself would give rise afresh to disciplinary action. There may be situations, as it has been acknowledged in this case, where an instruction for further training or counselling may in truth be a form of punishment. It would be a matter of fact or argument in a particular case. If an instruction for such training or other step is designed as a sanction and not meant genuinely to assist an employee to improve, then it may well be some other action in the sense that it is a penalty. But in its true form training, counselling, advice and so on are not "some other reason". Indeed, paragraph 11 of the ACAS Code points to the process of investigation of the facts which may lead to the arrangement of informal coaching or counselling as not coming within the Section.[13]We come to Section 13(4)(C). It is accepted that the confirmation of the issue of a warning or of some other action to be taken does not arise in this case and is more properly referable to an appeal or similar sort of process.[14]The ACAS Code deals with a disciplinary hearing in paragraph 53 and whether it gives a right to be accompanied. It would depend on the nature of the hearing:
"Employers often choose to deal with disciplinary problems in the first instance by means of an informal interview or counselling session. Equally, employers should not allow an investigation into the facts surrounding a disciplinary case to extend into a disciplinary hearing. If there is to be that, it points to the need to terminate and start the formal hearing."
[15]Accordingly, that leaves under Section 13(4)(a) a disciplinary hearing that gives rise to a right to representation as being one which could result in the administration of a formal warning and that is the essential issue before us. The employee says that in this case the procedure which refers to an informal oral warning is in reality a formal warning. London Underground says no. What takes place is truly an informal warning.[16]The statute specifically uses the word 'formal'. It must follow that Parliament envisaged that there can be an informal warning even following a hearing which lies outside the right to representation and that is why no doubt the Code in paragraph 14 says that prior to the stage where a disciplinary hearing that may give rise to disciplinary action takes place where matters remain informal the statutory right to accompaniment does not arise. But paragraph 15 states that where the facts of a case appear to call for formal disciplinary action a formal procedure should be followed. The first warning as part of a formal procedure is defined in the ACAS Code as follows:
"In the case of minor infringement the worker should be given a formal oral warning. A note of the oral warning should be kept but should be disregarded for disciplinary purposes after a specified period, for example six months."
As will be apparent when we come to look at the disciplinary code it seems to us that what the London Underground describe as an informal oral warning is in truth a formal oral warning as so described in the ACAS Code.[17]This is not wholly capable of analysis by its very nature. Any warning is to an extent tied in to disciplinary procedures that may follow. To reprimand someone is in itself an act that comes to an end. However to warn as to the future is the first step, in a sense, because it refers to the future and a warning is a reference to what may come. It follows that in strict logic to give a warning means that if there is a repetition then the formal procedure will begin whereas without such a warning such a procedure at that stage would not be implemented. However, it is not generally speaking a necessary first step and a disciplinary procedure may be entered at a higher stage straight away in the light of particular conduct. However, we are not here dealing with purely legalistic concepts or immaculate theoretical definitions. We are dealing with the reality of the workplace and the vast range of human conduct that has to be dealt with there on a day to day basis.[18]A hearing which could result in the administration of an "informal warning" may not give rise to a right to representation nor does an investigation. But an informal warning which simply states that a repetition may involve the beginning of disciplinary procedure becomes, or may become at some stage, a formal oral warning. It seems to us, and follows from a simple view of the ACAS Code in paragraph 54, that if the disciplinary warning becomes part of the employee's record it becomes a formal warning.[19]We have considered the application of that principle to the Code of the London Underground and we start with the general summary of the procedure which is at page 30 of the bundle before us headed 'Where does discipline begin?' It refers to "unrecorded discipline not in procedure", "informal oral warning first stage of procedure", and later says:
"Copy of informal warning kept in disciplinary file not staff record file"
. That is reflected in the more detailed provisions of the disciplinary procedure of London Underground where it begins with a description of informal oral warnings, for minor breaches of discipline which are dealt with informally, but provides that:
"all oral warnings will be confirmed in writing and the employee will be informed that disciplinary action may be taken if the expected standards are not met or if a similar offence is committed within a defined time scale."
[20]Accordingly, the procedure provides that what is called an "informal oral warning" will first be confirmed in writing, secondly will have a formal time scale for continuation attached to it, and thirdly will be part of the disciplinary record of the employee. London Underground say, with such a large organisation, and the employees working possibly under the supervision of different managers at different times with a rapid change over its staff, what on earth is the point of an oral warning if it is not recorded for management purposes somehow or another? But that seems to us to be a totally different matter. For management to record for their own purposes in their daily log or their ordinary reports what has occurred is wholly different from making the warning part and parcel of an individual employee's disciplinary record, even if the entry of a manager's notes or book or log is initialled by the employee concerned by way of confirmation that it has taken place.[21]So far as the time scale is concerned, we recognise that it is argued that it is to the employee's advantage to put a limit on it so that it will only run for a specified period of time, say twelve months, but that is, it seems to us, inevitably to give a degree of formality to what it is intended to be an informal remedy. The purpose of the informal oral warning is to help the employee to improve and its nature is that it will fade and disappear naturally by the passage of time. To give to a warning a set time limit to apply in all cases is to apply a standard formula and consequently it amounts to a degree of standardisation which is a form of formality. Indeed it is interesting to see what was said in the notes of the interview which took place in this case with Ms Ferenc-Batchelor. When she herself asked for representation her manager is recorded as saying that:
"under the LUL disciplinary system you are not allowed trade union representation at this level"
. So whatever is intended by senior management, management on the ground are clearly under the impression that it is a "level", and therefore part and parcel of a procedure.[22]Furthermore the provision appears to be, although it is not clear from the procedure itself but from the summary, that the warning is held on the disciplinary file.[23]The status of an informal warning does not appear to be clear from the procedure of the London Underground in this case. It seems to us that the distinction to be drawn, inevitably, on looking at all the guidance from the ACAS Code and the references to formal and informal warnings is that an informal warning may signal the initiation of a disciplinary procedure in the future if there is a repetition. However, should there be a repetition in the future and the disciplinary procedure is initiated, the moment that an earlier formal or informal warning forms part of anything that then follows, it becomes part and parcel of the procedure. The intention, it seems to us, of having informal oral warnings, whilst they may lead to the initiation of later disciplinary procedures, is that once those procedures are initiated the earlier warnings fall away and play no part in what is to follow or in the judgments of the employer as to the sanctions that he may later impose. Against that background we come to the cases that we have to deal with in this appeal.[24]The first one is that of Ms Ferenc-Batchelor. In that case Ms Ferenc-Batchelor, through what it appears in her interview, as she later conceded, to have been a lack of concentration, took a train wrongly through a red light and having done that proceeded wrongly to the next station. She was called to a disciplinary hearing, so called. There were detailed investigations which involved adjourning to go and visit the area and to seek further information and at the end of that investigation management decided this was not a case for an informal oral warning and they went on to the formal disciplinary procedure where, it is common ground, representation was a proper entitlement of the employee. So although in this case any hearing that took place was not in fact one that led to an informal oral warning, the argument was that it could have led to an informal oral warning. Of course it could, but the argument of the employee is that if it had gone on to an "informal oral warning" under the terms of the London Underground procedure it was, in reality, a "formal warning" that entitled representation. The Employment Tribunal set out the facts of the matter and point out in the second paragraph 5 that there is confirmation in writing. It may continue for twelve months. The record is kept separately to the employee's file, is taken into account and considered in the event of a similar offence and in paragraph 6, the Employment Tribunal point out that it may, but will not inevitably lead, to more formal charges in the event of a repetition.

(b) They say this:

"Whilst the Tribunal accepts and notes that the main disciplinary procedure where the Respondent allows full rights of representation and accompaniment is the main vehicle for imposing disciplinary and other sanctions on employees, the fact remains that the investigative hearing can result in action being taken against an employee – namely the imposition of training, coaching or counselling requirements which, if not adhered to by the employee can be backed up with disciplinary sanction on the basis of it having been a lawful order which has been refused to be complied with."
[25]Two things arise. On behalf of London Underground it is argued that the Employment Tribunal did not go through the process of considering whether or not there was a hearing in the first place. However we have noted the beginning of the extended reasons where the Chairman recorded that the facts were largely agreed but that there was one issue and that was whether or not a meeting that the Applicant was required to attend on 18 December 2000 was a disciplinary hearing. The papers before the Employment Tribunal included the very detailed record, which was minuted, of an exchange of words which dealt with what happened, the reasons for it and the exclusions of things such as drink and drugs as possible explanations and leading to a summary as to what the position was and how it had occurred. It seems to us that if the Employment Tribunal did not specify in terms that they had found that there was a hearing it is a necessary implication of their decision that they did, and one which cannot be challenged bearing in mind the factual nature of what was recorded in the evidence before them.[26]However, we consider that the Employment Tribunal did err in the paragraph to which we have just referred. The fact that there may be imposed training, coaching or counselling does not constitute, without more, it seems to us, any sort of disciplinary sanction. It is an order. It may be an instruction but it does not contain any element of penalty or punishment for what has gone on. However, the Employment Tribunal go on in paragraph 18 to say that they were initially attracted by the argument that the warning was an informal warning because it was named as such and kept in a document separate to, but with, the personnel record. They then go on to say that having looked at the matter further:
"The Tribunal finds that the informal oral warning is in fact in effect a warning which comes within the definition of the formal warning under the Act."
They say that although it is administered orally it is confirmed in writing and is a record that is kept and referred to during its currency. The Employment Tribunal conclude, and we are bound to say we cannot but agree, that that is:
"something more akin to a formal warning than an informal warning. An informal warning, would be something that was not recorded and would be, as set out in the ACAS Code something simply between a worker and a manager as part of an informal interview or counselling session. 19. On the facts of this case the Tribunal concludes that the fact-finding interview amounts to a disciplinary hearing within the meaning of the Act, because of the possibility of its resulting in an informal oral warning or the requirement to undergo training, coaching or counselling."
It seems, first, that there was a misprint in that paragraph and the Tribunal were there referring to a formal oral warning not an informal oral warning. Secondly whilst we disagree with the Tribunal basing their decision on the requirement to undergo training, counselling or coaching, if follows from our analysis and construction of the London Underground disciplinary procedure that what is described as an informal oral warning is in fact a formal oral warning within the meaning of the Act. It follows therefore that that appeal falls to be dismissed.[27]We turn now to the position of Mr Harding. Mr Harding was dealt with by the attendance at work procedure. That procedure, it seems to us, is even stronger in favour of the employee's appeal than the ordinary disciplinary procedure. It sets out the various categories of repeated absence that give rise to what is described in section 5 as poor attendance. Poor attendance may lead to a number of courses of action, first, noting the position and taking no further action secondly instigating sickness counselling procedure thirdly considering medical redeployment, but if all else fails using the company disciplinary procedures. But Section 8 defines the disciplinary action to be taken and provides in Section 8(3):
"referral to a disciplinary hearing will occur if the employee continues to fail to meet the company's standards after two oral warnings confirmed in writing have been given."
That is clearly stage 1 in a formal procedure and that is because, in accordance with that Section stage 2 can only be reached after the oral warnings have been given. It seems to us therefore that it must follow that the disciplinary action there is regarded as part and parcel of a disciplinary hearing so called in relation to the procedure.[28]In the case of Mr Harding he had been absent and was verbally warned in February 2000. A year later he had further sickness absences totalling nine working days and a second process was undertaken by the London Underground. There was an interview but Mr Harding declined to attend because he asserted that he was allowed representation. When it was refused he left the meeting. It is a trite observation that an employee may not attend a disciplinary hearing but it may still be a hearing and we assume that in this case there was a hearing which the notes and memorandum that we have seen record. "An informal oral warning" was given as a result. Having set out the argument of the parties the Employment Tribunal set out its conclusion that the hearing was not a formal oral hearing. They say that:
"The meeting had none of the formality of a disciplinary hearing. The proposed meeting was a discussion about attendance and the consequence was that an informal warning in relation to attendance that would stay on the Applicant's record for twelve months. There were no adverse consequences for the Applicant with respect to promotion, references working conditions or pay. The facts of the case were not in dispute and the existence of the warning was only committed to writing for the purpose of confirming that it had happened."
[29]That does not appear to be the case and we find it difficult to reconcile the various elements of the passage which we have just quoted. If it was to stay on the Applicant's record for twelve months and was then to be part of the record of the employee it seems to us that it did have adverse consequences, although not in relation to the matters that it referred to, and it must follow that if it remained on the record for twelve months it was not committed to writing for the purpose, simply, of confirming that it had happened. The Tribunal go on to say:
"the purpose of the meeting was to warn the Applicant that if his attendance records do not improve he could face a formal disciplinary hearing."
Having seen the procedure upon which the Employment Tribunal were basing that conclusion we have concluded that that is a view that cannot be supported by the analysis of the procedure. Had the purpose of the meeting and the oral warning simply been to warn the employee that if the attendance record does not improve he could face a formal disciplinary hearing and had that been all that it did, then we would have agreed that it was within the procedure and provided for an informal oral warning. However, the fact is that it was confirmed in writing to the employee which translated the warning effectively into a written document. Secondly, it remained for twelve months so it acquired a degree of formality. Thirdly, it formed part of the record of the employee which is just the sort of instance given by the ACAS Code as disqualifying it as an informal oral warning. Fourthly once a formal disciplinary interview is begun it appears that an informal oral warning may be taken into account by management in an undefined way and nowhere do we find anything that confines what is called "an informal oral warning" to the narrow purpose set out by the Chairman in the decision in the Harding case.[30]Accordingly we have come to the conclusion that the Tribunal erred in law in their construction of the disciplinary procedure which led to their conclusion in that case. In those circumstances the appeal should be allowed. We would invite the parties, rather than have this matter remitted for assessment of remedy, to seek to agree today the amount of compensation that should follow because of the costs implications bearing in mind the maximum that can be awarded.[31]Taking all those factors into account we find that, in the way in which the present procedure of London Underground is framed, what is described as an informal oral warning goes beyond the narrow confines of an informal oral warning properly so called and gives rise to the possibility of what is in truth a formal oral warning, giving an entitlement to representation. That does not, of course, prevent there being a true process of informal oral warning in the procedure that does not give rise to a right to be accompanied.