MR P H WADE v AAH PHARMACEUTICALS LTD [2002] UKEAT 272_01_1906

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2002] UKEAT 272_01_1906Case No Appeal No. EAT/272/01Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR P H WADEAPPELLANTAAH PHARMACEUTICALS LTDRESPONDENT
Before
His Honour Judge D M LevyDate 19 June 2002
[1]APPEARANCES For the Appellant MR D BROWN (of Counsel) Instructed by: USDAW Oakley 188 Wilmslow Road Fallowfield Manchester M14 6LJ For the Respondent MR R WHITE (of Counsel) Instructed by: Messrs Addleshaw Booth & Co Solicitors 100 Barbirolli Square Manchester M2 3AB JUDGE D M LEVY QC The Respondent to this case, AAH Pharmaceuticals Ltd, was engaged in the distribution of pharmaceutical products. To operate its business it is required to hold a licence issued by the Home Office. Such licence is only granted if the Respondent can demonstrate that safety and security at all stages of its operation are of the highest standard. Accordingly a failure to comply with the Respondent's strict security rule means that the Respondent is at risk of losing its licence to distribute pharmaceutical products.[2]The Applicant below, the Appellant here, was employed by the Respondent and its predecessors as a driver at its branch in Leeds from 11 July 1980 until his dismissal for gross misconduct on 11 July 2000. As a driver, the Appellant was responsible for the delivery of a range of pharmaceutical drugs, including controlled drugs. It was a strict policy of the Respondent that vans which were or might be carrying such drugs, had to be left locked at all times when they were not manned by the driver.[3]On 15 June 2000, the Appellant was found to have failed to secure the rear door and driver's window of his vehicle while making a delivery. When that was discovered, the Applicant was suspended pending further investigation. On 22 June 2000, the Appellant attended a disciplinary hearing, where he was assisted by John Radigan of his union. The disciplinary hearing found that he should be dismissed. There was an appeal against that where the application to dismiss was upheld. The Appellant was dismissed on 11 July 2000.[4]On 23 August 2000, the Appellant made a complaint to an Employment Tribunal stating that he had been unfairly dismissed:
"Due to the fact that I have done nothing wrong. Security checked my van and found the back doors unlocked and because of circumstances I had previously checked all doors 5 minutes previously and they were locked."
The issue came before a Tribunal sitting at Leeds on 4 December 2000, when the Appellant was represented by Mr Radigan and the Respondent by Mr White, of Counsel. Today, Mr White again represents the Respondent, but today Mr Brown represents the Appellant. It is of assistance if the representation below is shown on the decisions of the Tribunal above the Decision. We were not given this assistance by this Employment Tribunal.[5]The unanimous Decision of the Employment Tribunal was:
"the applicant's complaint that he was unfairly dismissed by the respondent is not well-founded and accordingly that complaint is in itself dismissed."
[6]The Notice of Appeal dated 19 February 2001 raises a number of points which were considered on the Ex Parte hearing of the Appeal on 3 September 2001. Having heard from Mr Brown, the Tribunal ordered that the appeal be allowed to go to a full hearing in accordance with the judgment of the EAT, and the way it was put in Mr Recorder Langstaff's judgment is:
"…it is argued by Mr Brown (who appeared for the Appellant) that the Tribunal recognised in the last two sentences in paragraph 14 of that decision that the Employer had fettered any discretion it might have had to consider whether or not it was fair and reasonable to dismiss this particular employee. Indeed there may be some indication that they thought that continued employment was reasonable because the employer appeared to be prepared to offer it."
That is the point - the principal point - which has been taken by Mr Brown on this appeal. He refers us to paragraph 14 of the Extended Reasons which, having set up the previous history, in the words of the Employment Tribunal, reads as follows:
"14 The applicant chose to exercise his right of appeal. The appeal came before Jim Fowlds, a Regional Director. Although we did not hear from Mr Fowlds, we did see the notes of that hearing and it appears to us that various similar issues were raised on the appeal as had been raised on the disciplinary hearings. Mr Radigan was not able to attend but the applicant was represented by Mary Sharp, a full time officer of USDAW. She produced certain case law to the effect that, despite a company listing a particular offence as gross misconduct, each case had to be considered on its merits. Ms Sharp was right to make that point. It is an accurate representation of the law and it is a factor that we have considered in our own deliberations. Mr Fowlds heard what was said by and on behalf of the applicant, but concluded that there was no room within the respondent's policy to do anything other than dismiss; he therefore intended to uphold the earlier decision. He did however indicate that the applicant could apply for an alternative position if one was available, so that he could be employed in some position other than as a driver. 15 Against that dismissal and the refusal to uphold the appeal, the applicant applies to this Tribunal. He contends that he was unfairly dismissed and the primary point made on his behalf relates not to whether he was guilty or otherwise of the misconduct alleged, (although that was of course unchallenged) but whether it was right and proper that a man of 20 years exemplary service should be dismissed in respect of one isolated incident of this nature."
[7]Having referred to other authorities, the Tribunal concluded that the dismissal was within the band of reasonable responses by a reasonable employer. As appears from the authority to which the Tribunal was referred (paragraph 1 of the Extended Reasons) was the decision in Dobie -v- Burns International Security Services (UK Ltd) [1984] IRLR 329 . That was a case where the employee, the appellant in the case, had been employed as a security officer where the appellant was employed by the respondent as a security officer at an airport controlled by the Merseyside City Council. The Council reserved to itself the right to approve or otherwise the continued employment of any member of the company at the airport. There was a complaint about Mr Dobie and the Respondent dismissed him. An Industrial Tribunal held that there was a substantial reason justifying dismissal, a decision upheld by the Employment Appeal Tribunal. The Court of Appeal allowed the appeal by Mr Dobie and remitted the matter for further hearing in the Industrial Tribunal.[8]In the course of his judgment in the Court of Appeal, the Master of the Rolls, Lord Donaldson said:
"So I agree with the EAT that the industrial tribunal misdirected themselves when they adverted to section 57(3) in those terms" and then this passage: "
In deciding whether the employer acted reasonably or unreasonably, a very important factor of which he has to take account on the facts known to him at the time, is whether there will or will not be injustice to the employee and to the extent of that injustice. For example, he will clearly have to take account of the length of time during which the employee has been employed by him, the satisfactoriness or otherwise of the employee's service, the difficulties which may face the employee in obtaining other employment and matters of that sort. None of these is decisive but they are all matters of which he has to take account , and they are all matters which affect the justice or injustice to the employee of being dismissed."[9]Mr Brown, on behalf of the Appellant, submitted that on the facts as found by the Industrial Tribunal, the Respondent had fettered itself when it said there was no room within the Respondent's policy to do anything other than dismiss.[10]The facts which were under discussion in Dobie -v- Burns are far different to those in this case and it is a moot point as to whether the employer had said that. Because that was in issue, we have been taken to what happened at the Industrial Tribunal. It would be noted that in paragraph 14, that the Extended Reasons say:
"Although we did not hear from Mr Fowlds"
. In fact the Tribunal had received a written statement from Mr Fowlds and referred to him in paragraph 1 of the Extended Reasons as a witness from whom it had heard. In his witness statement, among other things, Mr Fowlds said: "My view is that it is extremely important to be consistent in the measures that are taken against Drivers in respect of breaches of the security rules and there should be no exceptions unless there are extremely good mitigating circumstances . I also believe that all the Drivers need to know what the consequences are of their actions and that is why I took the additional step of getting memos issued to all Drivers to reinforce the security rules." [our underlining] Prior to the matter which led to the Appellant's dismissal, there had been other instances where employees had been dismissed for breaches of security rules.[11]Paragraph 6 of the Respondent's answer to the Appellant's grounds of appeal reads:
"As is correctly recorded in paragraph 1 of the Employment Tribunal's extended reasons (but wrongly stated in paragraph 14) Mr Fowlds did give evidence to the Employment Tribunal. The Appellant's representative did not put to him in cross-examination that he had no discretion under the policy. The Appellant cannot now rely on any failure to exercise discretion. Under the principles set out in Jones v Governing Body of Burdett Coutts School [1999] ICR 38 (CA) the Appellant cannot now introduce a point which should have been dealt with at the substantive hearing. Such a new point would require fresh evidence from Mr Fowlds as to the extent of his discretion and the meaning of the statement recorded in the notes of the appeal hearing ……..that he had "no room within the policy to do anything other than dismiss"
This may, of course, have meant that given the circumstances of the particular misconduct and the matters raised in mitigation, there was insufficient reason to depart from the Respondent's policy. It may be that the Chairman's notes of evidence of Mr Fowlds are required for the full hearing of this matter." The Chairman's notes of evidence were duly sought.[12]In a letter to the Employment Appeal Tribunal, sent early in December 2001. The Chairman said of this request:
"On the second issue, I do not consider that it is necessary for me to arrange the transcription of the entirety of the cross-examination of Mr Fowlds."
He admitted that there was a mistake in the paragraph which said he did not give evidence. He did produce part of his note of evidence which read:
"There is one important section in the context of Paragraph 6 which reads as follows:"
Option other than dismissal? - No option - it was my intention to continue to dismiss but Branch Manager would consider for any other employment when vacancy arose. Reason for that - good employee and long service. We did not want to lose good employee" " He also referred to a letter from the Appellant's solicitor. He said:
"I have a note of certain matters that I raised in questioning of Mr Fowlds. It does not appear from my note that I made any reference to the option/discretion point. It may, however, be (I cannot recollect after this length of time) that the passage quoted above was an answer to a question I asked in the middle of cross-examination, rather than an answer to a question asked by Mr Radigan."
[13]On the basis of that, Mr White has submitted that there was no cross-examination on the paragraph of Mr Fowld's witness statement which we have set out. Consequently he submitted that the Appellant was not entitled to raise this point on appeal. He has referred us, en passant, to paragraph T[1616] in Harvey on industrial employment laws which reads at [1610]:
"The primary document, so far as the EAT is concerned when hearing appeals on points of law, is the written decision of the employment tribunal and, although the chairman's notes of evidence are useful, they are of secondary importance: …….Thus, if there is a conflict between the notes of evidence and the findings of fact as stated in the tribunal's reasons the latter will be accepted unless compelling circumstances show that the reasons inaccurately stated the substance of the evidence."
[14]Before we resolve the issue as to whether this is a new point, we look to the merits of the Decision. Mr White has reminded us that the starting point has to be section 98 of the Employment Rights Act 1996 , with particular reference to section 98(4) which requires the Tribunal to consider:
"(a)……whether the employer acted reasonably or unreasonably in treating [the reason relied on by the employer] as sufficient reason for dismissal, and "(b) shall be determined in accordance with equity and the substantial merits of the case"
[15]As to the substantial merits of the case, he reminded us that there was evidence:
"(i) the Appellant (in common with other staff) had received warnings that such conduct made him liable for dismissal. (ii) the Appellant through his position as a union representative in attending previous disciplinary hearings was aware of the way in which the Respondent was applying the policy. (iii) Strict adherence to the policy was of considerable importance to the Respondent in terms of retaining its Home Office licence to operate, preventing crime and for the protection of the public"
He pointed out that " The Tribunal record the Appellant's length of service and the exemplary record in paragraph 12 of their decision. In this case, the Employment Tribunal considered the matters set out above but did not find the length of service or exemplary record of the Appellant constituted such substantial merits as to make the dismissal unfair when set against the need for the policy to be enforced and the misconduct committed." He disputed the primary submission of Mr Brown that there had been a fettering of the company's discretion when it said "no other option had been considered".[16]Mr White drew our attention to paragraph 16 of the ACAS Code of Practice, found in Butterworths Employment Law Handbook at paragraph 4469: "When deciding whether a disciplinary penalty is appropriate and what form it should take it is important to bear in mind the need to act reasonably in all the circumstances. Factors which might be relevant include, the extent to which standards had been breached, precedent, the worker's general record, position, length of service and special circumstances which might make it appropriate to adjust the severity of the penalty." [our underlining] Mr White stressed the "might" in the second sentence. He submitted, correctly in our judgment, that given the importance to the Respondent of its injunction that vans were to be kept locked when not manned, which had been made clear to the parties, it was quite appropriate and within the reasonable band of responses for it to dismiss the Appellant in this case.[17]If, which we do not think happened, the Respondent did fetter its discretion, in our judgment, on the facts found by the Tribunal of the Appellant's conduct, it would not detract from the decision the Appellant was entitled to take, and the Tribunal was entitled to reach the decision reached, having regard to the provisions of section 98(4) of the Act. As we have said, we think that there was no fetter of discretion. The fact that the error which we saw in the paragraph of the Extended Reasons which suggested that Mr Fowlds had not given evidence, means that the Employment Tribunal overlooked the passage in paragraph 25 of his witness statement. In our judgment, there was no cross-examination on behalf of the Appellant on this passage, the question and answer given to the Chairman is not clear of ambiguities. We conclude that the Respondent had not fettered its discretion when dismissing the Appellant.[18]While we can understand why this matter has proceeded to a full hearing, having carefully considered the oral and written submissions of Mr Brown, we are left in no doubt that the Decision below was correct and accordingly we dismiss this appeal .