MR E ROBERTS v WEST COAST TRAINS LTD [2003] UKEAT 0312_03_2407

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0312_03_2407Case No Appeal No. EAT/0312/03Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR E ROBERTSAPPELLANTWEST COAST TRAINS LTDRESPONDENT
Before
Mr Justice Elias Mr H Singh Mr B M WarmanDate 24 July 2003
[1]APPEARANCES For the Appellant MR RYAN CLEMENT (of Counsel) Messrs Duncan Lewis & Co Solicitors 1a Kingsland High Street London E8 2JS For the Respondent MISS MELANIE TETHER (of Counsel) Messrs Eversheds Solicitors 115 Colmore Row Birmingham B3 3AL MR JUSTICE ELIAS : This is an Appeal from the Decision of the Employment Tribunal which held that the Appellant had not been unfairly dismissed. It did so on the grounds that he had not been dismissed pursuant to Section 95 of the Employment Rights Act 1996 . The Tribunal went on to find however, that, had there been a dismissal, then it would have been unfair. The Appellant challenges the conclusion of the Tribunal that there had been no dismissal. The Background[2]The Applicant was a chef employed by the Respondent company, West Coast Trains Ltd. His employment commenced in 1975 and he was summarily dismissed on 6 November 2001 after 26 years service. The dismissal followed a disciplinary hearing in respect of alleged misconduct. The Appellant appealed against the dismissal and the appeal succeeded but only to an extent. He was demoted, being removed from his position as Chef, but being offered an alternative position as Customer Services Assistant. He refused to accept that offer and was deemed to have resigned with effect from 10 August 2002 when he failed to return to work after a period of sickness absence. It is not necessary to set out the circumstances of this case in any detail. Suffice it to say the Appellant was a senior member of a catering crew on a train; the Respondent's Customer Services Manager had conducted a security check on the Euston to Glasgow train on 27 September 2001. Some drink and food was found in the bag of an onboard service supervisor, there was an investigation, and the Appellant was found to be complicit in the theft of food and drink found in the supervisor's bag.[3]The Appellant contended that he had been unaware that any of the material had been stolen, but that explanation was rejected. Following that hearing, the Appellant was told on 6 November that he would be dismissed with immediate effect, and that was confirmed by a letter sent the following day. There was an Appeal against that decision. It was initially due to be heard on 30 December but, at the request of the Appellant, it was adjourned and finally took place on 6 February 2002. Meanwhile, the day before that, on the 5 February 2002, the Appellant lodged an application for unfair dismissal in the Employment Tribunal. That was the last day on which that application could be lodged in order to secure the unfair dismissal challenge in the Tribunal.[4]The Decision of the Appeal body was that the Appellant did know that theft was taking place but not to the extent identified by the original disciplinary body. Having regard to various mitigating factors, including the length of service, the Decision of the Appeal body was that the penalty of dismissal should be revoked and one of demotion given instead, as we have indicated. It also confirmed that the period between 6 November 2001 and 6 February 2002 would be treated as suspension without pay and that the Appellant would be issued with a final written warning.[5]It is accepted, and is clear from the documents before us, that the imposition of the period of suspension without pay and demotion are sanctions which are specifically provided for in the Respondent's Disciplinary Procedures which were agreed with the Unions. The Hearing before the Tribunal[6]Before the Employment Tribunal, the Respondents submitted that there had been no dismissal. The contention was that, since the Appeal had been successful and resulted in the employee being reinstated into his employment, then there had been no termination of a contract of employment. The cases of J Sainsbury v Savage [1981] ICR 1 and BBC v Beckett [1983] IRLR 443 were relied upon. The Tribunal accepted the submission.[7]Their conclusion on the point was as follows:
"His contract of employment provided for an Appeal process and allowed disciplinary sanctions of suspension without pay and demotion. This is what happened in this case and he was demoted in accordance with his existing contract of employment. No new contract was entered into when he was demoted to the position of Customer Services Assistant. It is difficult to distinguish this case from the case of Beckett , and in accordance with the case of Savage we find that he was successful on his appeal against his dismissal and therefore his employment continued."
[8]The short point in this appeal is, therefore, whether the effect of the employee being reinstated into employment after an appeal, albeit in a post of a lower grade, renders the initial dismissal a nullity. If that is the effect, then plainly the Tribunal's decision is correct. There is no jurisdiction for a Tribunal to find unfair dismissal if there has, in law, been no dismissal. Miss Tether, for the Respondent, submits that this is a plain case which is determined by the two authorities relied upon by the Tribunal, namely J Sainsbury v Savage and the Beckett case. In the Sainsbury case, the employee was dismissed for misconduct and appealed against that decision, the relevant company rules provided that "Pending the decision of an appeal to a Director against dismissal, the employee will be suspended without pay, but if reinstated will receive full back pay for the period of suspension. The employees appeal was unsuccessful. The question arose as to whether he had sufficient continuity of employment to pursue a claim for unfair dismissal. At that time, it was necessary to have six months continuous employment, he did not have that by the date of the original dismissal, but did so by the date when the appeal was rejected. He submitted that the effect of lodging the appeal was to keep the contract alive pending the determination of the appeal. The Industrial Tribunal accepted that argument but it was rejected by the Employment Appeal Tribunal and their decision was, in turn, upheld by the Court of Appeal."[9]Lord Justice Brightman approved the following passage from the judgment of the EAT in that case at 1979 ICR 96 page 102 "In our view, when a notice of immediate dismissal is given, the dismissal takes immediate effect. The provisions of this contract as to the Appeal procedure continue to apply. If an appeal is entered, then the dismissed employee is to be treated as being suspended without pay during the determination of his appeal. In the sense that if the appeal is successful then he is reinstated and he will receive full back pay for the period of the suspension. If the appeal is not successful, and it is decided that the original decision of instant dismissal was right, and is affirmed, then the dismissal takes effect on the original date. In our view, that is the date on which the termination takes effect for the purposes of the Act. Accordingly, the effect of the decision is that the reinstatement has retrospective effect."[10]This analysis was approved by the House of Lords in West Midlands Co-operative Society v Tipton [1986] ICR 192, though their Lordships noted that it was always subject to an express contractual provision to the contrary. The case of BBC v Beckett was, as the Tribunal recognised, closer to the facts of this case. Mr Beckett had been employed by the BBC for nearly 14 years as a Senior Scenic Carpenter. He was dismissed on 12 weeks notice for an act of serious negligence when he left his duty without permission in circumstances which jeopardised the safety of other workers working in the studio. A notice was given on 24 October 1979. He appealed under the internal appeal procedures and the appeal was heard by the Director of Personnel. A decision was taken on 5 March 1980 and Mr Beckett was told that, because it was his first offence, he would be given another chance and could remain in BBC employment. However, he was demoted to a different job and it was said to be on a trial basis. Mr Beckett refused to accept that offer and he applied to the Industrial Tribunal for unfair dismissal. He contended that he had been dismissed by the letter giving him 12 weeks notice. That argument failed before the Industrial Tribunal although Mr Beckett succeeded in establishing that he had been constructively dismissed as a consequence of the demotion effected by the BBC. The BBC unsuccessfully appealed against that part of the decision. We are concerned here only with the finding in relation to whether or not there was an actual dismissal resulting from the BBC's letter of 24 October.[11]The Employment Appeal Tribunal held that there was not and, in so doing, effectively applied the principles in Sainsbury v Savage . The arguments advanced before the EAT, and its conclusions upon them are succinctly stated by Mr Justice Neill who gave judgment for the Court at paragraphs 14 to 18 inclusive "We propose to deal first with the argument put forward on behalf of Mr Beckett that he was dismissed by the BBC in accordance with the letter of 24.10.79 rather than constructively dismissed in the following March, and that the Industrial Tribunal ought to have so found. It is common ground that if Mr Beckett's appeal had been wholly unsuccessful his dismissal would have taken effect in accordance with the terms of the letter of 24 October: cf J Sainsbury v Savage [1980] IRLR 109. Mr Beckett's appeal, however, was not wholly unsuccessful: Mr Bett made him the offer contained in the letter of 5 March. Mr Reynolds submitted on behalf of Mr Beckett that the effect of the letter of 5 March was that the original dismissal stood but that Mr Beckett was offered alternative employment which he was entitled to refuse. Mr Brindle on the other hand submitted on behalf of the BBC that Mr Bett's decision amounted to the imposition of an alternative penalty and constituted a downgrading in accordance with the disciplinary procedures of the BBC. In support of his submission that the original dismissal remained in force, Mr Reynold drew attention to the rule that a notice cannot be withdrawn unilaterally ( Harris and Russell Ltd v Slingsby [1973] IRLR 221) and to the terms of the letter of 5.3.80. He placed particular reliance on the facts that the letter referred to the 'offer' of a job and that the appointment as a maintenance carpenter was to be on a trial basis. The introduction of a trial period, said Mr Reynold, was inconsistent with the continuance of the former employment, and he pointed to the terms of the letter which was considered by the Court of Appeal in Marriott v Oxford Co-operative Society (1970) 1 QB 186 at 190. We see the force of Mr Reynold's submission, but we are unable to accept it. It is necessary to bear in mind the context in which Mr Bett wrote his letter of 5 March. Mr Beckett had appealed in accordance with an agreed system of appeals. The disciplinary procedures of the BBC laid down certain prescribed penalties for misconduct, and these penalties included summary dismissal, dismissal with contractual notice and downgrading. We consider that although Mr Bett did not refer to downgrading in either of his two letters the only sensible construction to be put on his letter of 5 March is that he was offering Mr Beckett the chance to continue in his employment with the BBC but in a different post. It follows that in our view that Mr Beckett's employment came to an end in March 1980 when he rejected the opportunity to continue this employment with the BBC."[12]Miss Tether submits that that authority is equally applicable here. She recognises that, under the statute, there will be a dismissal if the employee's contract is terminated, even if employment continues under a new and different contract. In those circumstances, the original contract would have been terminated. But she submits that, in this case, there is no basis for saying that the effect of the demotion here was to bring about a termination of the original contract and the creation of a new one. Although the continuation of the employment relationship does not preclude in an appropriate case of finding of dismissal, e.g Hogg v Dover College [1990] ICR 39 , that was not the decision here.[13]The Tribunal found in terms, as we have seen, that the demotion did not involve a termination of the original contract and that no new contract was entered into following the demotion. That, she submits, and we accept, was a conclusion that they were entitled to reach. Indeed, it is in accordance with the analysis in the Beckett case that the demotion was pursuant to a specific power given in the contract, as it was in BBC v Beckett . We do not say that the demotion can never in any circumstances give rise to a dismissal; no doubt there will be cases where it may have that result if there are significant changes in terms and conditions of employment, at least, if there is no contractual power to effect the demotion which is accepted by an employee. In addition, in some cases, as indeed in the Beckett case itself, the demotion may give grounds for the employee alleging constructive unfair dismissal. However, that argument was never advanced in this case.[14]Mr Clement, for the Appellant, submits that the Savage and Beckett decisions can be distinguished on two principal grounds. First and foremost in this case, the Originating Application was lodged prior to the appeal being considered. Mr Clements submits that the question of whether or not there has been a dismissal must be considered as at the date when the Originating Application was lodged. At that date, there had been no reinstatement in any position and accordingly the dismissal of 6 November should stand. As Mr Clement accepts, the logic of this argument is that, even where the reinstatement is in fact complete, the employee will, nonetheless, be entitled to make a claim for unfair dismissal arising out of the original determination of the contact, provided that the Originating Application is lodged prior to the appeal being heard. In those circumstances, the employee will be entitled at one and the same time to pursue both the appeal and any claims he may have for unfair dismissal. Of course, the fact that he may be reinstated will affect the remedies that he would be entitled to receive.[15]Plainly, if the employee, having lodged the appeal, withdraws from it, then the employer cannot seek to determine that appeal. In those circumstances, the employee can rely upon the original decision to dismiss. But, in our judgment, if the employee chooses to keep the appeal alive, then he takes the risk that if he is subsequently reinstated in employment, his unfair dismissal claim will be defeated, and that is so even if he lodges an Originating Application prior to the appeal being determined. We say this for a number of reasons. First, nothing in any of the authorities suggests that the rights are crystallised at the date when the Originating Application is lodged. On the contrary, it seems to us that cases such as the Tipton case, to which we have made reference, indicate that the date of termination should not be considered as a watershed so as to exclude matters arising thereafter. Similarly, it seems to us that there is no reason to treat the date of lodging the Originating Application as a watershed either. Take this specific example: in Tipton , the House of Lords held that an employer may be considered to have acted unfairly if he refuses to permit the employee to pursue a right of appeal. Is the Tribunal to be deprived of considering that evidence if, in order to protect his position, the employee has lodged an Originating Application immediately following the termination of his employment, and the employer's refusal to permit the appeal to be pursued is not made until after that date? In those circumstances, we have no doubt that the Tribunal would be entitled to have regard to that evidence, notwithstanding that the refusal of the employer would have, in that case, occurred after the Originating Application had been lodged. Similarly, in this case, it seems to us that the Tribunal must have regard to the effect of the successful appeal, albeit that the Originating Application had been lodged by that date.[16]Second, the argument of Mr Clement would lead to certain arbitrary results. It may be quite fortuitous whether the appeal is determined before or after the Originating Application is lodged. Take this case; the original appeal was to be heard on 30 December, before the Originating Application was lodged. At the employee's instigation, the appeal was adjourned and, in the event, it was not heard until after the Originating Application was lodged. It does not seem to us to be satisfactory in principle that the employee in the one case should be entitled to pursue an unfair dismissal claim but not in the other.[17]Finally, Mr Clements submitted that the principle in Sainsbury v Savage could apply only in circumstances where the employee could be said to have been successful in his appeal. Whether he has been successful, he submitted, would depend upon the grounds on which he mounted his appeal and the decision of the appeal body. If the appeal were wholly successful, then he accepted that the effect of reinstatement would be to cancel the original termination but he submitted that if it were not wholly successful then the original termination would stand. In this case, it was not wholly successful because of the sanctions that were imposed by the appeal body. Mr Clement accepted that the logic of this argument is that if the employee appeals against a dismissal on the grounds that he has committed no misconduct at all, and the appeal body reduces the dismissal but nonetheless imposes some sanction such as a warning, then, in those circumstances, the appeal could not be said to have been successful and the original dismissal would stand.[18]For this proposition, he relies upon certain language in the authorities which do talk of the Appellant succeeding in his appeal and thereby being reinstated, for example Sainsbury v Savage itself. With respect, it seems to us that this argument cannot be right. First, it is a wholly imprecise principle for determining whether or not the original termination stands. It would involve a careful consideration of the precise grounds on which the appeal had been mounted and the effect of the decision of the appeal body. Second, and perhaps more importantly, the question of success or otherwise of an appeal has no bearing at all, it seems to us, on the statutory question, namely whether the contract of employment has been terminated. It is plain from the authorities that if an employee is reinstated, that is taken to have retrospective effect. The notion that it has retrospective effect if the employer is satisfied with the outcome of his appeal, but not if he remains dissatisfied, has no grounding in any principle or rationale whatsoever. Finally, this argument is, in any event, inconsistent with the authority of the Beckett case itself. Mr Clements submitted that, in that case, the Appellant was only appealing against the penalty that had been imposed upon him. He said that he was not appealing, as was the Appellant in this case, against the very finding that there had been any misconduct at all. But we think that cannot be right, as is clear from paragraph 8 of the Decision. For these reasons therefore, we are satisfied that the Tribunal properly considered itself bound by the authorities in Sainsbury v Savage and BBC v Beckett .[19]We should add that Miss Tether advanced a cogent argument based on public policy to justify these decisions. As she pointed out, if a successful appeal has no effect on the original dismissal, then it will mean that employees will be able to mount unfair dismissal challenges, notwithstanding that they have been reinstated. Moreover, employers may well be deterred from upholding appeals for fear that it might lend support to the conclusion that the original dismissal was unfair. Indeed, in this case, the Tribunal noted in concluding that the dismissal, had there been one, was unfair, that this was consistent with the finding of the appeal body set up by the employer. Miss Tether submits that such a result would be inimical to the objective which the legislation on unfair dismissal was designed to achieve and we agree with that observation.[20]Mr Clement put a counter argument. He submitted that an employee who is unfairly dismissed might demote in order to head off an unfair dismissal claim. This is plainly a possibility, although that risk is, to some extent at least, mitigated by the fact that, in those circumstances, an employee may be able to take a claim for a constructive unfair dismissal, as indeed was the case in BBC v Beckett .[21]For the reasons set out above, the appeal is dismissed.

Cited in 2 later judgments