(1) MR M LARDER (2) MRS L MILES v WARWICKSHIRE COUNTY COUNCIL [2003] UKEAT 0128_02_0906

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0128_02_0906Case No Appeal No. EAT/0128/02Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
(1) MR M LARDER (2) MRS L MILESAPPELLANTSWARWICKSHIRE COUNTY COUNCILRESPONDENT
Before
His Honour Judge J BurkeDate 9 June 2003
[1]APPEARANCES For the Appellant Mr GERARD CLARKE (of Counsel) Instructed by: National Association of Head Teachers Legal Department The Nook Maynestone Road Chinley High Peak SK23 6AH For the Respondent MR NIGEL GIFFIN (of Counsel) Instructed by: Warwickshire County Council Legal Services Clerk's Department PO Box 9 Shire Hall Warwick CV34 4RR HIS HONOUR JUDGE J BURKE QC The Nature of This Appeal This appeal raises questions which appear, at first blush, to be unfamiliar to the Employment Appeal Tribunal; to a substantial extent, by the conclusion of the argument that initial impression was demonstrated to be only partly justified. The broad issue between the parties, which the Employment Tribunal, sitting at Birmingham and chaired by Mr A D Puttick, were called upon to resolve and did, by a majority, resolve against the Applicants before them, Mr Larder and Mrs Miles, in a decision promulgated with Extended Reasons on 12 December 2001, was for that forum certainly unusual. It was whether the decision of the governing body of a school as to the salaries of senior teachers for the year September 1999 to August 2000, was unlawful on public law grounds and therefore not binding on the Local Education Authority ("LEA") which would, if the decision were lawful, be responsible for payment of those salaries. Such an issue would, as the parties agreed, normally be determined by the Administrative Court in judicial review proceedings; however, there is no suggestion that it was not properly raised before the Employment Tribunal in the manner which we will describe.[2]The two Appellants, Mr Larder and Mrs Miles, were at the material time respectively the Head and Deputy Head of Stockingford Junior School in Nuneaton, Warwickshire. It was common ground that the school had, under the guidance of the Appellants, developed from one which in 1991 had been described as "At Risk" to one which in 1998 received a glowing OFSTED report and had continued to achieve to a high standard. During this period the school had changed somewhat in nature; it had been a Middle School with pupils within the 8 to 12 years age range; in September 1996 it became a Junior School with pupils in the 7 to 11 years age range.[3]The Respondents, Warwickshire County Council, are the LEA responsible for the school. The school controls its own budget through a Board of Governors. The Governors delegate decisions as to the pay of its staff to a Standing Committee ("the Committee"), pursuant to a document entitled " STOCKINGFORD JUNIOR SCHOOL SCHOOL PAY POLICY – REVISED SUMMER 1997 "; but the Governors' functions in respect of the pay of teachers, delegated to this Committee, had to be exercised in each year within the framework of a document produced in each year by the Secretary of State for Education and Employment called "School Teachers Pay and Conditions Document" ("The Pay Document"), which is given effect in each year by a statutory instrument made under section 2 of the School Teachers Pay and Conditions Act 1991 . The terms of each year's Pay Document are based on the recommendations of the government-appointed School Teachers Review Body.[4]The Pay Document for each school year takes effect from 1 September in each year. The Tribunal had before them, as have we, the Pay Documents for 1998/1999 and 1999/2000. Although at the time of the decision as to the salaries of Mr Larder and Mrs Miles which is central to this appeal the 1998/1999 Pay Document held sway, the salaries in issue related to the year 1999/2000; it was agreed during the course of argument that the Pay Document for that year was before the Committee; and we will principally refer to the 1999/2000 Pay Document.[5]That Pay Document required, by paragraph 3 (1), that the determination of the remuneration of a qualified teacher was to be made, in the case of a school which had a delegated budget, by the Governing Body of that school annually with effect from 1 September. The salaries of Head Teachers and Deputy Head Teachers are based upon a pay spine or spines set out in the Pay Document. Each school falls within one of 6 groups, numbered 1 to 6; and a range of spine points prima facie applicable to Head Teachers and Deputy Head Teachers in each group is set out in the Pay Document. Stockingford Junior School was a group 3 school.[6]Paragraph 4.1 of the 1999/2000 Pay Document provided that: 4.1 "A head teacher shall be paid such salary based upon pay spine A set out in paragraph 4.4 as the relevant body shall determine in accordance with paragraph 5.4 or 6." The "relevant body" was, in the case of a teacher at a school which had a delegated budget, the Governing Body of that school (see paragraph 1.2). Paragraph 5.1 provided that: 5.1 "Paragraph 5 applies for the purposes of the annual determination of a head teacher's salary with effect from 1 September 1999."[7]The spine points for head teachers from 1 September 1999 were set out in a new 34-point pay spine called Pay Spine A; but provisions were made for the assimilation of head teachers' salaries based upon the old 51-point pay spine, Spine B, to Pay Spine A; and effectively for a group 3 school the 1999/2000 spine points, based on Pay Spine B, were the same as those for 1998/1999. Assimilation was a purely mechanical exercise, did not affect the sums payable in this case and can safely be put on one side for present purposes for which Spine B can safely be used. Using Spine B, the range of spine points for the Head Teacher of a group 3 school was 15-29 and for the Deputy Head of such a school was 9-13.[8]Paragraph 5.2 of the Pay Document provided as follows: 5.2 "The relevant body shall first determine the salary of each individual head teacher based upon pay spine B. When determining the salary of a head teacher upon pay spine B, the relevant body: … 5.2.1(b) shall subject to paragraph 5.2.2 have regard in particular (but not exclusively) to the following criteria:(i) the responsibilities of the post;(ii) the social, economic and cultural background of the pupils attending the school;(iii) whether the post is difficult to fill; and(iv) whether there had been a sustained high quality of performance by the head teacher in the light of performance criteria previously agreed between the relevant body and the head teacher; 5.2.2 shall subject to paragraph 5.2.3 ensure that the salary determined under paragraph 5.2 is not lower than the minimum and not higher than the maximum of the range specified in the appropriate table set out in paragraph 4.4.2 of the 1998 Document for the group to which the school was assigned on 31 August 1999 under the 1998 Document. 5.2.3 may, if they are satisfied that no salary payable to the head teacher under paragraph 5.2.1 is adequate, having regard to the duties, responsibilities or performance of the head teacher, or the circumstances of the school, determine that he shall be paid such higher salary as they consider appropriate."[9]Paragraph 5.3 provided: 5.3 "Having determined the individual head teacher's salary based upon spine B, the relevant body shall next assimilate the head teacher's salary to pay spine A in accordance with paragraph 5.4."[10]Paragraph 5.4 set out how the assimilation process should be carried out.[11]The provisions of the Pay Document in relation to Deputy Head Teachers, contained in paragraphs 12.1.1 to 12.1.4, were for present purposes in identical terms to those which applied to the case of Head Teachers, save that there was for 1999/2000 no change of pay spine and therefore no need for any assimilation process.[12]By this system, while the primary power to determine teachers pay lay with the Secretary of State for Education who produced the annual Pay Document, in the case of schools with delegated budgets the governing bodies had the duty of determining the pay of their teaching staff consistently with the parameters specified by the relevant Pay Document. The Governors were empowered to decide upon salaries based on a spine point higher than the top of the range specified for the group to which the school was assigned only, for present purposes, if they were satisfied that no salary payable within the range of spinal points specified for the group to which the school was assigned was adequate, having regard to the duties, responsibilities or performance of the Head Teacher or Deputy Head Teacher or the circumstances of the school.[13]The School's Pay Policy provided that: B "PROCEDURE The Standing Committee of the governing body will be established to deal with all pay matters." And that: (b) " Terms of Reference The Committee will have fully delegated powers to make decisions within the pay policy determined by the governing body."[14]The document continued:
"The terms of reference of the committee will be determined by the governing body. Suitable terms of reference would be: … * To minute clearly (by the clerk to governors) the reasons for all decisions and report these decisions to full governors. … The full governing body will receive the report of the Standing Committee in the confidential section of the agenda and will either endorse or refer back without debate in order not to prejudice any appeal."
The policy provided that each teacher would receive a points statement by the end of the summer term and would have a right to appeal within 14 days. In the event of an appeal the chair of the Governing Body had to convene an appeals panel consisting of three governors.[15]Mr Larder and Mrs Miles put forward to the committee a document entitled "Salary Review 1999" in which they recommended that their salaries should be increased by advancement, in the case of Mr Larder, from spine point 35, which was the spine point on which his salary for the year 1998/1999 was based, to spine point 40 for the year 1999/2000 and, in the case of Mrs Miles, from spine point 21 on which her salary for 1998/1999 was based to spine point 26 for the year 1999/2000 (the recommendations were, in fact, for such increases from July 1999). It can be seen from a comparison between these figures and the spine points set out in the 1998/1999 Pay Document that, for 1998/1999, Mr Larder received a salary calculated on the basis of a spine point 6 points above the top of the group 3 range, nearly at the top of the group 4 range and a third of the way up the group 5 range. Mrs Miles for 1998/1999 received a salary calculated on the basis of a spine point which was 8 points above the top of the group 3 range, 1 point above the top of the group 4 range and in the middle of the group 5 range.[16]The Committee, according to the findings of the Tribunal, met on three occasions to consider teachers' pay for 1999/2000. On 14 July 1999 it resolved that Mr Larder's salary should be based on point 39 of the pay spine and that Mrs Miles salary should be placed on point 25 of the pay spine. That decision was minuted. The Governing Body met immediately after the Committee's meeting had concluded; the minutes of that meeting state: 5 "STATUTORY MATTERS The Annual Salary Review has been carried out in accordance with set procedure. The LEA will be informed in writing of the outcome." On 21 July the chair of the Governing Body, Mrs Morgan, duly informed the LEA of the pay awards to Mr Larder and Mrs Miles.[17]In the case of Mr Larder, his advancement to spine point 39 would have placed him 10 spine points higher than the top of the range of spine points for group 3, 2 points higher than the range for group 4, above the middle of the range for group 5 and at the bottom of the range for group 6. In the case of Mrs Miles, her advancement to spine point 25 would have taken her to a position 12 spine points above the top of the group 3 range, 5 points higher than the range for group 4, 1 point below the top of the group 5 range and 3 points above the bottom of the group 6 range. In terms of annual salary, on the figures in the 1999/2000 Pay Document, the increases determined by the Committee were, in Mr Larder's case, from £45,585pa to £49,158pa and, in Mrs Miles' case, from £36,354pa to £38,733pa. Their annual salaries, if they were placed at the top of the group 3 range, would have been £41,115pa and £32,619pa respectively.[18]Much correspondence between the Governing Body and the LEA followed; the Governing Body instructed the LEA to authorise payment to Mr Larder and Mrs Miles as determined by the Committee. The LEA declined to do so on the basis that the determination was not properly reached, unwarranted and ultra vires and invited the Committee to reconsider.[19]On 17 February 2000 the Committee met again to review the procedures taken by the Committee in deciding upon the salaries of Mr Larder and Mrs Miles in the light of the points taken by the LEA. The minute of that meeting was provided to us by Mr Clarke on behalf of Mr Larder and Mrs Miles; it was not before the Tribunal and, according to Mr Giffin on behalf of the LEA, had never been seen by the LEA. We agreed to receive it on a de bene esse basis.[20]However, the LEA continued to refuse to pay the increases; it took the view that the need to protect public funds and to preserve fairness to other staff and other comparable schools required it to act as it had never acted before in the case of any of its 258 schools with delegated budgets. Accordingly, Mr Larder and Mrs Miles presented applications to the Employment Tribunal in which they claimed, to put it shortly, that the withholding by the LEA of the difference between their salaries based on the spine points to which the Committee sought to advance them for 1999/2000 and the points on which they were for 1998/1999 represented a wrongful deduction from their wages, in contravention of section 13 of the Employment Rights Act 1996. Thus the issue of the lawfulness of the decision to increase their salaries to the level we have described came to be decided by the Employment Tribunal rather than by way of judicial review or other proceedings in the High Court and has, on appeal, come before us in the Employment Appeal Tribunal. The Tribunal's Decision[21]It was common ground at the hearing before the Tribunal that the Governing Body, in taking decisions as to pay, were subject to ordinary public law principles, that if they had acted in breach of those principles, their decisions as to the pay of Mr Larder and Mrs Miles for 1999/2000 would be void (subject, possibly, to the exercise of a discretion which might prevent that result in the case of procedural error) and the LEA would have acted lawfully in refusing to implement those decisions and that, if the Governing Body had not acted in breach of public law principles, Mr Larder's and Mrs Miles' claims were well-founded and should succeed.[22]Two points were taken by the LEA. The first was that the Governing Body had not properly followed their own procedure; the second was that the exercise of their discretion under the Pay Document was unreasonable in all the circumstances and was therefore void pursuant to the familiar principles set out in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1KB 223 ("Wednesbury") and CCSU v Minister for Civil Service [1985] 1AC 374 ("the GCHQ Decision").[23]In contrast to the procedure which would normally have applied had these issues been raised by way of judicial review, the Tribunal had assistance not only from witness statements but also from the oral evidence, including cross-examination, of Mrs Morgan, the Chair of the Governing Body and from Mr Berkovits, Human Resources Manager to the LEA. There were also witness statements from Mr Larder and Mrs Miles; they were not cross-examined.[24]In paragraph 7 of their decision, the Tribunal, by a majority, concluded on the first issue that the School's pay policy required that the Committee should put their reasons for reaching a pay decision before the full Governing Body and that such decision should then be endorsed by the Governing Body as a whole, that no such reasons were provided by the Committee to the Governing Body and that the Governing Body had not endorsed the Committee's decision in the cases of Mr Larder and Mrs Miles. The Chairman, who was the dissentient member of the Tribunal, expressed the view that the Committee's reasons did not have to be placed before the Governing Body but were confidential to the Committee and that, on the facts, the Governing Body had endorsed the Committee's decision.[25]Accordingly, in paragraph 8 of their decision, the Tribunal found that the Committee's decision was "void for non-endorsement" and that the LEA should not act on it and therefore the claims failed.[26]However, the Tribunal then went on to consider the substantive issue of the reasonableness of the Committee's decision; and on this issue, too, they reached a majority conclusion, the Chairman again disagreeing with the two lay members. Having directed themselves as to the test for "unreasonableness" in Wednesbury and for "irrationality" in the GCHQ case, the majority concluded (in paragraph 14 of their decision) that the decision in question was unreasonable and outrageous. The Chairman, however, concluded that the decision had been reasonably reached (decision paragraph 15). The majority specifically found that the Committee took into account and was influenced by the proposition put forward in the submission of Mr Larder and Mrs Miles that the School was only marginally below group 4 which, the majority concluded, should not have been taken into account. The Procedural Issue[27]On behalf of Mr Larder and Mrs Miles, Mr Clarke submitted, in summary, that:(i) the Governing Body were entitled to delegate the power to make decisions as to salaries to the Committee;(ii) the Committee was therefore entitled to make the salary decisions in respect of Mr Larder and Mrs Miles;(iii) while the Committee was required by the School's pay policy document to minute the reasons for its decisions, it was not required to provide those reasons to the Governing Body; it was required to report to that Body as it had done; and the LEA's procedural point at the Tribunal hearing was not lack of minuted reasons but lack of endorsement;(iv) the Governing Body had clearly indicated its endorsement of the Committee's decision at their 14 July meeting by not referring that decision back to the Committee, by recording that it should be communicated to the LEA and by so communicating, through the agency of Mrs Morgan on behalf of the Governing Body, on 21 July 1999;(v) alternatively to (iv), the Governing Body endorsed the Committee's decision by pressing the LEA thereafter to act on that decision and, after the decision had been reconsidered by the Committee on 17 February 2000, by a letter of 18 February 2000 written by Mrs Morgan on its behalf to the LEA.[28]Mr Clarke did not shrink from using strong language in his description of the nature and effect of the point taken by the LEA; he submitted that the point was highly technical, divorced from reality, devoid of merit, silly and tempted the majority of the Tribunal into a legalistic trap. He expressed surprise that an LEA could seriously take such a point in effect against its own staff and the governors of one of its own schools. He suggested that the validity of these comments was demonstrated by the fact that the Governing Body could, even now or hereafter, validly endorse the Committee's decision at any time.[29]Mr Giffin on behalf of the LEA submitted, in summary as follows:-(i) he accepted that the governors had lawfully delegated full power to decide on teacher's salaries to the Committee;(ii) he accepted that the LEA's point at the Tribunal hearing was not lack of minuted reasons or of reporting of such reasons to the Governing Body but of the absence of endorsement of the Committee's decision by the Governing Body – although the lack of a report of the Committee's reasons for their decision was, he said, evidence of the absence of a properly informed endorsement;(iii) he further accepted that the lack of endorsement of 14 July 1999 could have been rectified by a subsequent endorsement by the Governing Body; but(iv) it was important that the validity of the decision as to the salaries of Mr Larder and Mrs Miles was ascertained now; if it was valid they ought to receive their full pay; if it was not, there would have to be a new decision taken by the Governing Body which might not, in the financial circumstances currently prevailing, be the same decision as that which had been invalidly taken in 1999; and(v) the minute of the Governing Body's meeting of 14 July showed that the Governing Body did not know what the decision of the Committee was and were informed only that a decision had been taken; the Governing Body could not validly endorse the Committee's decision without knowing what it was;(vi) this was supported by the evidence of Mrs Morgan that she did not tell the Governing Body the amount which the Committee had decided to award lest there should be an appeal which would have to be heard by governors; it was submitted that although there may have been sound reasons for Mrs Morgan's course, the policy document required that the Governing Body knew what the Committee's decision was and endorsed it or referred it back without debate;(vii) the correspondence following the meeting of 14 July between Mrs Morgan and the LEA did not amount to an endorsement by the Governing Body as a whole of the Committee's decision;(viii) if, contrary to Mr Giffin's primary submission, we were prepared to admit the minute of 17 February 2000, it recorded a meeting of the Committee and not of the Governing Body; there had been no subsequent endorsement of the Committee's further decision; Mrs Morgan's letter to the LEA of 18 February was not and did not evidence any decision by the Governing Body to endorse the Committee's subsequent decision.[30]Mr Giffin further submitted, in response to Mr Clarke's trenchant criticisms of the LEA, that while the LEA had no express statutory duty to check the decisions of the Governing Body of a delegated budget-holding school, it had a statutory duty to provide suitable education within the relevant area and had to consider whether such a school was overspending on salaries and comparability between different schools and that, if a Governing Body made a decision which was unlawful as to the amount of a teacher's remuneration, then the LEA need not and indeed should not implement that decision and was entitled to take substantive and procedural points in support of its argument that it was justified in not implementing that decision. This general point, of course, applies to both facets of the Tribunal's decision which we are now examining.[31]During the course of the argument before us, which regrettably had to be adjourned for want of time at the end of the first day, a further issue arose, namely whether if there was a procedural error in that the Committee's decision was not endorsed by the Governing Body, the Tribunal had a discretion to overlook that error. Mr Giffin contended that, if the point was validly taken, no such discretion existed in the circumstances of this case; but he also submitted that the point was not validly taken because the Tribunal had not been asked on behalf of Mr Larder and Mrs Miles to exercise a discretion or informed that they had such a discretion and had not been taken to the authorities now relied on as to the possible existence of such a discretion. Therefore, he submitted, on established principles the EAT should not allow this new point to be taken at an appellate stage; Mr Clarke submitted, however, that he had raised the discretion point in oral argument before the Tribunal although he had not developed it by the citation of an authority.[32]We should make it clear that, whatever the justification for Mr Clarke's forthright criticisms of the LEA for taking the procedural point (as to which we make no comment), if the majority of the Tribunal arrived at a conclusion on that point which was not based on any error of law, it would not be open to us to allow an appeal against that conclusion. Subject to the discretion point, the issue as to whether there was or was not a procedural error was acknowledged on both sides to be a pure point of law; and no adjectival description of the LEA's choosing to take the point can determine or even inform our decision which must be made without reference to the general merits, either as perceived by Mr Larder and Mrs Miles or as perceived on a wider basis.[33]We agree with Mr Giffin's argument that the LEA need not and should not implement a decision by the Governing Body of a school holding a delegated budget as to the remuneration of staff of that decision is unlawful; but that point equally could not inform either the Tribunal's decision or our decision as to whether there had been a procedural error in this case.[34]However, without being influenced by any of the factors to which we have just referred, we have reached the conclusion that, on this issue, the majority of the Tribunal reached a decision which was based on error of law and that the correct view was that expressed by the Chairman of the Tribunal.[35]There are three reasons for our conclusion. Firstly, in our judgment the majority erred in basing their decision at least in part on the failure of the Committee to provide to the Governing Body reasons for their decision as to Mr Larder and Mrs Miles' salaries. That point had admittedly not been taken by the LEA; and it was not open to the members of the Tribunal to conclude against Mr Larder and Mrs Miles and in favour of the LEA on the basis of a point which had not been taken and which did not go to any jurisdictional issue.[36]Secondly, even if the majority were entitled to decide on the basis of the absence of the provision by the Committee to the Governing Body of reasons, we prefer the view of the Chairman that on the proper interpretation of the relevant words in the school's pay policy the Committee was not required to provide its reasons for its decision to the Governing Body. Assuming (as seems to have been universally assumed) that what are set out in the school's pay policy as suitable terms of reference had been adopted as the terms of the reference of the Committee, the words "to minute clearly…the reasons for all decisions and report these decisions to full governors" do not, as we see it, require the reporting to the Governing Body of reasons for the decisions reached by the Committee; the words are not "to report the reasons for all decisions to full governors". The words used contain a clear contrast between the need to minute the reasons for decisions and the need to report those decisions (but not the reasons) to full governors.[37]As we read the relevant words of paragraphs 7 and 8 of the Tribunal's decision, the majority concluded that the Committee's decision was void for non-endorsement because of the absence of the provision to the full Governing Body of the reasons for the Committee's decision. The majority do not appear to have given any other reasons for concluding that there had been no valid endorsement. However, we must, of course, consider the validity of the point which the LEA did make to the Tribunal and has relied on before us, namely that, irrespective of the absence of a report by the Committee of its reasons, the Governing Body did not endorse the Committee's decision and could not have done so when they did not know what it was.[38]The Tribunal did not make any finding as to whether the Governing Body, when they met on 14 July immediately after the Committee meeting, knew of the precise position and the relevant spine points decided upon by the Committee for 1999/2000 and set out in the Committee Minutes. The evidence before the Tribunal was that the Governing Body did not have that knowledge; but in our judgment the School's pay policy document, when considered as a whole, did not require that the Governing Body should have such knowledge before validly endorsing a decision of the Committee to which they had validly delegated all the functions of determining staff salaries. As the Chairman of the Tribunal pointed out in his dissenting comments in paragraph 7 of the Tribunal's decision, the policy document expressly provided that all discussions, statements and findings of the Committee were confidential to the Committee, the Chair of Governors and the Head Teacher and that only the individual(s) concerned would be notified by the Committee except in the event of an appeal when all relevant information would be given to panel members.[39]In her evidence (at paragraph 8 of her witness statement) Mrs Morgan said that she was not able to tell the Governing Body the amount (she meant, of course, the number of spine points) which the Committee had decided to award because Mr Larder and Mrs Miles might have wanted to appeal and such an appeal would involve governors. She wrote to the LEA to the same effect on 2 November 1999. We appreciate that any governor who agreed to sit on an appeal panel would, of course, have to learn of the number of spine points awarded by the Committee; but it is understandable that the policy was drafted in such a way as to seek to preserve confidentiality so far as possible and that the Chairman of the Governing Body should seek, in reporting to the Governing Body after the Committee meeting, to preserve that confidentiality. In the particular context, it is our view that the policy did not require the Governing Body to have knowledge of the number of spine points or of the amount of salary which that number of spine points represented, as decided upon by the Committee in order validly to endorse or to reject the decision of the Committee to which, under the pay policy, the Governing Body had given fully delegated powers to make pay decisions, within the pay policy determined by the Governing Body.[40]The Governing Body, having been notified on 14 July that the Committee had made decisions as to the salaries of Mr Larder and Mrs Miles, had under the policy only two choices, to endorse the Committee's decision or to refer it back without debate. It is common ground that the Governing Body did not refer back. The minutes of the Governing Body's meeting on that day state only that the LEA would be informed in writing of the outcome; but the appearance of that statement in the minutes indicates, in our judgment, that the Governing Body at the very least did not dissent from that course of action and may have expressly supported it. As we see it, the only reasonable interpretation of the terms of the Governing Body's minutes is that the Governing Body was content to let the decisions of the Committee be treated as the outcome of the determination of the salaries of Mr Larder and Mrs Miles for 1999/2000 and to allow that decision to go forward to the LEA for implementation. The words "we endorse" or "we support" or some other expression conveying the same meaning did not have to appear in the Minute. We regard the effect of the minute as plain; the Governing Body was endorsing the Committee's decision as opposed to referring it back.[41]However, it is not in our judgment necessary to look at that minute alone. The Chairman of the Governing Body, in her letter to the LEA of 21 July 1999 wrote:
"…governors decided to grant the following pay award to the Head and Deputy Headteachers."
It has not been suggested to us that, in her evidence, Mrs Morgan described that letter as using words which did not accurately convey what the Governing Body had agreed on 14 July 1999, that is to say to endorse the decision of the Committee. The letter does not purport to report only the decision of the Committee; it reports, in effect, that the decision had been adopted by the governors as a whole. That, in our judgment, is powerful evidence that the Governing Body had, indeed, endorsed the Committee's decision.[42]There is yet further evidence of endorsement by the Governing Body. On 20 December 1999 Mrs Morgan wrote to the LEA a brisk letter in these terms:
"The Governing Body of Stockingford Junior School instructs you to authorise the payment of Mr M Larder, Headteacher, and Mrs Miles, Deputy Headteacher, on points 39 and 25 respectively of the pay spine as determined by the Salary Review Committee on 14 July 1999."
While we have not seen any formal minute, we have not been told of any evidence that Mrs Morgan, in writing this letter, was not doing so with the authority of the Governing Body as a whole. Even if there were no other evidence, that letter is clear evidence of endorsement by the Governing Body. Furthermore, it is evidence of endorsement on the basis of knowledge of the spine points which the Committee had determined should apply to Mr Larder and Mrs Miles for the 1999/2000 year. By this time, of course, the time for appealing against the Committee's decision had long expired; and there was no longer any reason for confidentiality, as between the Committee and the Governing Body, as to the proposed level of salary increases. Mrs Morgan's letter of 18 February 2000 to the LEA similarly evidences endorsement of the Committee's decision on the basis of knowledge. For this purpose we do not need to rely upon and have excluded from our consideration the Minute of the Committee's meeting of 17 February 2000, the admissibility of which before us was in dispute.[43]For these reasons we conclude that the only conclusion reasonably open to the Tribunal was that there had been a lawful and valid endorsement by the Governing Body of the Committee's decision. If we are correct in describing the procedural point as a pure point of law, the majority's decision was, in our judgment, in error of law. If the majority's decision was one of fact, it was a decision to which no reasonable Tribunal could have come on the basis of the evidence before it and therefore was, for that reason, in error of law. We are satisfied that the LEA's procedural point should not have succeeded.[44]Despite the encouragement of Counsel, we do not regard it as appropriate, in the circumstances of this case and in the light of our conclusion on the endorsement issue, that we should set out any views of ours upon Mr Clarke's submission that the Tribunal had a discretion to overlook any procedural error on the part of the Governing Body. We regard it as inappropriate to express any views on that issue for these reasons:(i) a decision on this point is not necessary for our decision upon this appeal;(ii) there is a dispute between the parties as to whether the point was taken before the Tribunal;(iii) we do not have the benefit of the views of the Tribunal upon the exercise of any such discretion, had they been satisfied that in law such a discretion existed;(iv) while Mr Giffin did not dispute that there has been a move in public law decisions away from the familiar mandatory/directory analysis and a greater reliance on the need to determine the consequences of failing to comply with a procedural requirement in all the circumstances, this is at best a relatively new and developing area of the law.[45]The Employment Appeal Tribunal is not usually involved in what may be described as a pure public law point; and we regard it as potentially unhelpful for the Employment Appeal Tribunal, especially where it is not necessary for our decision to do so, to assert its own view as to the nature and extent of any such discretion such as that ventilated before us, in an unfamiliar area. We regard it as wiser to leave such a controversial topic to courts more familiar with the relevant concepts. The Reasonableness Issue[46]Mr Clarke submitted, in summary, that:(i) in order successfully to attack the substance of the decision as to the salaries of Mr Larder and Mrs Miles for 1999/2000 the LEA had to discharge the difficult and rarely achieved task of establishing that the decision was irrational;(ii) the threshold which the LEA set out to demonstrate to have been crossed was a very `high one, as prescribed by high authorities such as Wednesbury itself and the GCHQ case and in such text books as Judicial Review Handbook by Michael Fordham 3 rd Edition 2001 at paragraph 57.1.4.(iii) the threshold was higher than merely that of unreasonableness;(iv) a court or Tribunal faced with an irrationality challenge to a public law decision must avoid substituting its own view for that of the person or body entrusted with the decision-making power and duty; it must not cross the boundary between lawful exercise of a decision-making power and duty, whether good or bad, and unlawful performance of such a power or duty;(v) in this case, the Pay Document, in the case of Mr Larder, required the Committee to have regard in particular to the four criteria set out in paragraph 5.2.1; (b); and paragraph 5.2.3 entitled the Committee to decide on whatever level of salary they considered appropriate outside of the normal range for a group 3 school if satisfied that no salary payable within that range would be adequate; there were parallel provisions in the case of the Deputy Head Teacher; these were matters for the judgment of the Committee, endorsed by the Governing Body;(vi) the School's performance under the leadership of Mr Larder and Mrs Miles had been and continued to be outstanding;(vii) those who made the decision were uniquely placed to judge how well the school had done and how excellently Mr Larder and Mrs Miles had performed; and while it was correct to say that increased salaries payable out of a school's delegated budget caused less money to be available for books and other necessary expenditure, it was for the school through its authorised decision-makers and not for the LEA to decide upon allocation of the budget;(viii) the LEA's case was based only on the subjective views of Mr Berkovits;(ix) the budgets of other schools remained unaffected by the expenditure decisions of an individual school with a delegated budget;(x) despite the LEA's views that the decisions were unreasonable, they were reaffirmed in February 2000;(xi) none of the four reasons set out by the majority in paragraph 14 of the Tribunal's decision for their conclusion that the salary levels decided upon were unreasonable withstood proper examination; in particular, the majority erred in treating the Committee's decision as tainted by consideration of the closeness of the school to a place in group 4; and(xii) having regard to the factual material available to the Committee on the basis of which the decision was taken, the conclusion of the majority of the Tribunal was perverse and/or involved their substituting their own view of the merits for the view of the Committee. Indeed, submitted Mr Clarke, the majority decision was itself such as to merit the use of the adjective outrageous and the LEA's case would have failed hopelessly in judicial review proceedings.[47]In response Mr Giffin submitted, again in summary, that:(i) the Tribunal properly directed themselves to the applicable test or threshold in paragraph 12 of their decision;(ii) they did not make the mistake of considering merely whether the decisions were reasonable;(iii) the result of the application of the correct test to the facts of the individual case was a matter for the Tribunal in the light of the evidence; and the EAT could not interfere with the Tribunal's factual evaluation unless it was perverse;(iv) the reasons given by the majority for their conclusions in paragraph 14 of the decision were soundly based on the evidence and disclosed no error of law;(v) while the Pay Document did not expressly prescribe an upper limit to the salary of a Head Teacher or a Deputy Head Teacher, it was open to a Tribunal to decide on the evidence in any particular case that the decision of a Governing Body or its delegated committee went so far outside the primary parameter, i.e. the range of spine points appropriate for the relevant group, as to be irrational. Whether that point had been reached or not was itself a question of fact for the Tribunal(vi) specifically in relation to the finding that the decision as to salary was erroneously based in part on Mr Larder and Mrs Miles' submission that the school was almost a group 4 school, the Tribunal were right so to find: (a) because the submission seriously misrepresented the true position for 1999/2000 and ought not to have been taken into account by the Committee; and (b) because the Tribunal were entitled to conclude that on the evidence that submission had been taken into account.(vii) the circumstances referred to in the penultimate sentence of paragraph 14 of the Tribunal's decision included the evidence of Mr Berkovits, which was not in dispute, as to the wider effect of the Committee's decision.(viii) it was significant that the Pay Document did not give a free hand to the Committee to set salaries at the level they chose; the existence of a national pay scale prima facie dependent on the group to which the school was assigned and from which departures were permitted only in particular circumstances indicated that the salary range appropriate to the group was not merely a starting point but a key factor and that that key factor was directed to achieving broad comparability.[48]There was nothing between the parties as to the tests which the Tribunal had to apply. In Wednesbury Lord Green MR said, at page 230:
"It is true to say, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That, I think, is quite right, but to prove a case of that kind would require something overwhelming."
In the GCHQ case Lord Diplock at page 410 defined an irrational decision as one:
"which is so outrageous in its defiance of logic or accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it."
We do not doubt that those tests and the further descriptions of the appropriate test set out in the relevant passages of Fordham define a high threshold and that in only a small proportion of judicial review cases in which irrationality is argued does the argument succeed; but, no doubt basing themselves on the submissions made to them by Counsel, the Tribunal in this case directed themselves impeccably as to those tests in paragraph 12 of their decision when they said:
"The test of reasonableness is put succinctly in [ Wednesbury ] which said that irrelevant matters must be excluded from consideration, whilst all relevant matters must be considered. Further, it states that if a decision is so absurd that no sensible person could ever dream that it lay within the power of the authority, then it must be void. In [the GCHQ case] the test of "
Wednesbury unreasonableness" was said to apply to a decision which was so outrageous in its defiance of logic that no sensible person who had applied his mind to the question to be decided could have arrived at it."[49]It is important that the Tribunal specifically reminded themselves of Lord Diplock's test which directs the focus of the reviewing Tribunal's attention not upon a general examination of reasonableness but upon an examination of the decision under review in order to consider whether a sensible person applying his mind to the right question could have reached the relevant decision.[50]It is important, too, in our judgment, that the concept of perversity, as involving or including a conclusion which no reasonable decision-maker could reach, which is similar to, if not identical to, the concept of irrationality (indeed at paragraph 57.1.4 (B) Fordham describes perversity as one of the tests of irrationality), is no stranger to the members of Employment Tribunals; it is a basis on which their decisions are regularly, albeit rarely successfully, attacked on appeal.[51]Members of Employment Tribunals are also wholly familiar with the long-established (although at times criticised) principle that, in considering in unfair dismissal cases whether in various ways an employer has acted reasonably, the Tribunal must judge reasonableness not on what they themselves regard as reasonable but on whether the employer has acted within the range of reasonable responses. It may be said that the concept of the range of reasonable responses, so prominent in unfair dismissal litigation, is not identical to that of irrationality, so common in judicial review proceedings; but the two concepts are plainly far from wholly dissimilar. In any event, whatever the extent of the Tribunal's familiarity with the test for irrationality, in our view they directed themselves correctly as to those tests in this case.[52]Another principle with which members of Employment Tribunals are wholly familiar is the need to avoid substituting their view for that of the relevant decision-maker. We accept that that need applies equally and possibly with greater force when the public law concept of irrationality is under consideration. We do not, however, see any basis on which the majority of the Tribunal can be properly criticised for substituting its view or the view of one of the parties for the view of the decision-maker in paragraph 14 of their decision in this case. There are no words or expressions on their part which indicate that they made that mistake. If their reasons for their conclusion that the relevant decision was unreasonable within the tests which they directed themselves to apply are not sound, then that conclusion would be open to attack on that basis – in which case it would not be necessary to demonstrate that the majority has substituted another view for that of the decision-maker; as a freestanding point we are satisfied that the argument that they did substitute their view or the view of one of the parties for that of the decision-maker is not made out. At the highest it could be said that the Tribunal accepted the submissions, or some of the submissions, put forward by the LEA and that in concluding that the decision as to the salaries of Mr Larder and Mrs Miles was unreasonable they reached a view which coincided with that of the LEA. It does not follow that they improperly substituted the LEA's view or their own view for that of the decision-maker.[53]We turn, therefore, to the reasons given by the Tribunal's majority for their conclusions. It is to be noted that the Tribunal, at paragraph 11, accepted and indeed recorded that it was common ground that the School's performance had been and continued to be excellent; there is no suggestion in the Tribunal's decision that the Committee was not in the best position to judge what Mr Larder and Mrs Miles had achieved. However, the Tribunal majority was entitled, in our judgment, to find, in the light of the specific terms of the pay documents, that the intention of those documents (which admittedly provide the principles pursuant to which decisions as to teachers' salaries have to be made) was that the appropriate range of spine points for a Head Teacher or a Deputy Head teacher was primarily to be based on the size of the school but that the Committee had erroneously considered performance as the primary factor. The findings of fact set out by the Tribunal at paragraph 13 provide support for that conclusion; and we did not understand Mr Clarke to be arguing that there was no evidence to support that conclusion; in our judgment there plainly was such evidence. It is not for us in the EAT to consider afresh the strength of the evidence or to reach our own view upon it; we in our turn must not substitute our view, in what was an area of factual determination, for that of the Tribunal which, having heard oral evidence from Mrs Morgan on the one hand and Mr Berkovits on the other, was in a better position to reach conclusions on areas of disputed fact than may sometimes be the case in judicial review proceedings.[54]It was, in our judgment, also open to the majority, for similar reasons, to conclude on the facts that the achievements of Mr Larder and Mrs Miles were not such as to justify salary increases to a point, in each case, well in excess of the top of the range for group 3 schools and into the range for a group 5 school.[55]Further, the majority of the Tribunal were, in our judgment, entitled to take comparability into account as they did in considering whether the increases decided upon by the Committee could on the one hand be justified or were on the other hand "outrageous". While it was the case that the increases, if paid, would come out of the School's delegated budget and therefore would not directly decrease the funds available for other schools in the LEA's area, the potential effect on the salaries of other Head Teachers and Deputy Head Teachers of the placing of the salaries of Mr Larder and Mrs Miles at so high a level was a factor as to which there was specific evidence from Mr Berkovits; that evidence was plainly relevant; it was for the Tribunal to weigh it.[56]We need to address in particular Mr Clarke's argument that the majority of the Tribunal erred in treating the Committee's decision as tainted by consideration of the joint submission made by Mr Larder and Mrs Miles that the school was only marginally below group 4. That submission argued that, by September 1999, the number of pupils and statemented pupils on the School's role would be such that only a further 13 pupils, on top of the 480 on the school roll, would bring the school into group 4. The Chairman of the Governors, we were informed, had said in cross-examination that the Committee had not been influenced by this submission; but she had in her evidence in chief herself referred to the fact that the school was "only a dozen off being a group 4 school"; and the Minute of the Committee meeting of 14 July 1999 expressly refers to discussion of the submission at that meeting. There was evidence from which the majority, who on this factual issue differed from the Chairman of the Tribunal, could conclude that the Committee had taken the submission into account.[57]However, Mr Giffin submitted, the School was not, for 1999/2000 only 13 pupils away from group 4 status because, in error, the submission had used a table which did not apply to that year, as in cross-examination Mrs Morgan agreed. On the table which did apply, there would have to have been not another 13 but another 170 pupils joining the roll for the School to fall into group 4. It was, we were told, at this point in cross-examination that Mrs Morgan said that the Committee had not taken the submission into account; on the basis of a finding that the Committee had taken the submission into account, the Committee clearly proceeded on the basis of a major error on an important point and had indeed taken into account an irrelevant factor, the supposed proximity of the School to group 4.[58]Mr Clarke did not suggest, by way of reply, that Mr Griffin's description of the evidence before the Tribunal on this issue was inaccurate; he suggested that the case was not put on the separate basis of irrelevancy, i.e. taking an irrelevant factor into account, as opposed to irrationality; but in our judgment the Tribunal was entitled to conclude on the facts that the Committee had, in its decision-making process, taken into account a factor which they should not have taken into account and to regard the Committee's misapprehension as to the proximity or, rather, lack of proximity of the school to group 4, as a factor in deciding whether or not their decision as to the salaries of Mr Larder and Mrs Miles was outrageous.[59]Having considered each of the reasons put forward by the majority of the Tribunal for their conclusion, we can now summarise the position in broad terms. We see nothing to indicate that the majority, acting on the basis of an exemplary direction as to the relevant law, departed from that direction or made any error of law in reaching their conclusion on this part of the case before them. Mr Clarke accepted in the course of argument that the Committee did not have power to decide upon the salaries for Mr Larder and Mrs Miles at any level which the Committee thought was appropriate and that there must be a point at which the Committee's decision could properly be described as unreasonable or outrageous. He agreed, too, that whether that point had been reached was a question of fact. Those were realistic acceptances on his part. Essentially the conclusion whether, on the evidence, the levels of salary for Mr Larder and Mrs Miles decided upon by the Committee fell within the category of "unreasonable" or "outrageous" was, indeed, one of fact. There was evidence upon which the majority of the Tribunal could reach the conclusions of fact which they reached for the reasons they set out; and we are satisfied that their decision was one which contained no error of law. Conclusion[60]For the reasons set out above, the appeal is dismissed.