(1) NADDER CHURCH OF ENGLAND MIDDLE SCHOOL (2) WILTSHIRE COUNTY COUNCIL v MR DAVID MUNDY [2004] UKEAT 0228_04_2105

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0228_04_2105Case No Appeal No. UKEAT/0228/04Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
(1) NADDER CHURCH OF ENGLAND MIDDLE SCHOOL (2) WILTSHIRE COUNTY COUNCILAPPELLANTSMR DAVID MUNDYRESPONDENT
Before
Mrs Justice Cox Mrs M V McArthurSir William Morris Kbe OjDate 21 May 2004
[1]APPEARANCES For the Appellants MR NICHOLAS SPROULL (of Counsel) Instructed by: Legal Services Wiltshire County Council County Hall Bythesea Road Trowbridge Wiltshire BA14 8JN For the Respondent MR CHRISTOPHER JOLLY (Solicitor) Messrs Farnfield & Nicholls Solicitors 24 Warminster Road Westbury Wiltshire BA13 3PE SUMMARY Unfair Dismissal Failure by ET to ask the right questions in a misconduct dismissal and erroneous direction as to burden of proof. Appeal allowed. THE HONOURABLE MRS JUSTICE COX This is an appeal by the Respondent employers ("the Appellants") against the decision of a Bristol Employment Tribunal promulgated on 16 January 2004 upholding the Applicant's complaint of unfair dismissal. The issue in the appeal is essentially whether the Employment Tribunal erred in law when applying the well known tests laid down in the case of British Home Stores v Burchell [1978] IRLR 379 in deciding that the Appellants had not discharged the burden of proving that the dismissal was for misconduct or, alternatively, in deciding if misconduct was the reason that the dismissal was unfair.[2]The Applicant's case before the Tribunal was that he had been unfairly dismissed following allegations that led first to his suspension and then to his subsequent dismissal for alleged gross misconduct on 4 June 2003. He claimed that his dismissal was unfair because the allegations were untrue and were not investigated properly, partly because the Headteacher, a Mrs Brown, had conducted a vendetta against him. He also criticised the way in which his appeal was considered.[3]The Appellants on the other hand contended that they had had good cause to suspend the Applicant, that their investigation was thorough, that the Applicant was given a fair hearing at which he was represented and that dismissal was well within the range of responses open to a reasonable employer in the circumstances as found by their disciplinary panel.[4]The facts found by the Tribunal are set out at paragraphs 5 (a) to (r) of their Extended Reasons. The Applicant, who qualified as a teacher in 1975, was employed full time at the Nadder C of E Middle School in Tisbury, Wiltshire, from 1 September 2000 until he was dismissed on grounds of misconduct on 4 June 2003. His principal subject was English and he also acted as literacy coordinator.[5]The School, which the Tribunal found is due to close at the end of the summer term this year (2004), has approximately 150 pupils of both sexes in their early teens. The School was described by the Headteacher as "difficult" and morale was low.[6]The Tribunal described the Applicant's personality as "fundamental to this case" and they stated their findings at paragraph 5 (e). Adopting the description of the person who had been the previous Headteacher at the School between 1999 and 2002, the Tribunal found, amongst other things, that the Applicant was a "challenging colleague, exuberant and not a stereotypical teacher". Generally the Tribunal accepted the description of the Applicant given by other teaching colleagues called on his behalf who were clearly supportive of his enthusiasm and forthright manner and respectful of his teaching abilities and "jokey" extrovert style. The Tribunal found that the situation changed with the appointment of Mrs Brown as Headteacher in May 2002 and that:
"It is clear that the Acting Headmistress, Mrs Brown, and the Applicant did not see eye to eye."
[7]At a staff meeting on 15 May 2002 Mrs Brown alleged that the Applicant had "challenged her authority" and she had asked him to leave. The Tribunal did not accept her evidence however and preferred the Applicant's account that he had raised certain questions in a professional manner and had then left of his own accord. The Tribunal also accepted the Applicant's evidence that on the following day, 16 May, Mrs Brown told him that if he did not resign she could put him on "capability procedures" and would have his resignation by the end of the term. They found that she was clearly upset by a perceived challenge to her authority.[8]On 9 September 2002 at a further staff meeting the Tribunal found that Mrs Brown had used very disparaging words during a heated exchange with the Applicant and on 2 October 2002 the Applicant was by letter invited to attend a meeting described both as a "disciplinary" and an "investigatory" meeting, which was ultimately held on 10 October. At this meeting the Applicant apologised for any offence that he had inadvertently caused and the Tribunal found that his apology was accepted.[9]That was the background to the events which led up to the Applicant's dismissal which are set out in full at paragraphs 5 (h) to (r) and in view of their importance in the appeal we shall refer to them in full:
"h) On the 5 th February 2003, for the Respondents' own reasons, the Applicant was put on a process known as "capability procedures" by Mrs. Brown. The Tribunal has seen the capability procedure at pages 215 to 219 of the bundle. The purpose of the procedure is described in clause 1.4 on page 215 as to ensure an employee whose standards of performance is unacceptable is " clearly informed what standards are expected and receives support towards achieving these standards "
. It is designed to establish solutions to problems. Its first stage is informal. It has a relationship with the disciplinary procedure which is described at paragraph 6 on page 219 which makes it clear that issues will be progressed under the disciplinary procedure if it is established at any stage " that the real problem is the employee's conduct ". i) Written evidence as to the outcome of the discussion on the 5 th February is set out in the documents pages 37 and 98. It refers to relationships with some members of the tutor group being " inappropriate ". Nowhere is there evidence that " inappropriate " was defined and explained. We find that its meaning was not explained to the Applicant at that time. We also find that the review meeting promised on the 12 th March 2003 did not take place. It is significant that Mr. Mundy queried the words used by Mrs. Brown in a letter dated the 6 th February 2003 in which he also gave a full response at pages 99 to 101. He did not receive a reply. j) In February 2003 Mrs. Brown considered that she had cause to complain that Mr. Mundy had upset Miss Alison Cooper at a training session in Salisbury. Mr. Mundy wrote to Mrs. Cooper to apologise if he had caused upset. Mrs. Brown intercepted the letter and told Mr. Mundy that he was " either having a joke or suffering from a deranged mind " page 105. Mrs. Brown passed the letter written by the Applicant (without reference to him) to the LEA personnel "" for guidance ". Mrs. Brown's letter to the Education Personnel Department at page 107, concerns the Tribunal as did the reply dated 24 th February 2003. The evidence before the Tribunal (page 108) indicates that Mrs. Brown failed to forward to the local authority the Applicant's responses to the capability procedure because she did not consider it appropriate. The LEA therefore only had one side of the story. We find that Mrs. Brown was advised to check out underlying health problems before going further with the procedure. Mrs. Brown failed to do that. The fact that Mrs. Brown had indicated to the LEA that there were " other issues of concern " without identifying them both gratuitous and prejudicial. k) On the 31 st March 2003, Mr. Mundy was suspended from duty. The letter suspending Mr. Mundy is at page 113 and 114 of the bundle which the Tribunal was told and accepts is in a standard form with regards to the terms of the suspension. Guidance notes, also standard, were enclosed. The guidance notes appear at pages 220 to 222 of the bundle. In part these conflict with some of the terms of the suspension and there is confusion between the two. l) The cause of the action taken was a statement by a teacher, Mrs. V. Rudd (p.110). The complaint did not originate from either a pupil or a parent. The Respondent chose not to call Mrs. Rudd to give evidence. We have also taken note that, when questioned, the pupils regarded Mr. Mundy's comments entirely as a joke. m) A disciplinary interview took place on the 28 th April 2003, which was in effect a fact find to obtain Mr. Mundy's side of the story. Notes of the fact find at which Mr. Mundy was represented appears at page 128 to 134 of the bundle. It appears that no adequate opportunity was offered to Mr. Mundy to explain himself before this date. n) No letter has been produced to this Tribunal stating that proof of the charges or matters that Mr. Mundy had to answer could result in dismissal. o) Mrs. Brown's presentation to the disciplinary hearing is contained at page 135 to 150 of the bundle and from this document at page 135 the allegations that Mr. Mundy had to answer are as follows: 1. Conducted himself in an unprofessional manner and showed lack of judgment which puts his trustworthiness as a teacher into question. 2. Spoke to pupils in sexually suggestive way. 3. Made inappropriate and sexual comments in actions to pupils. 4. Consciously put himself in situations which could compromise his professionalism and integrity. 5. Contravened all aspects of his suspension and then lied about these events. 6. Made critical comments about the school to a pupil. p) We find that there are aspects of this presentation which at worst are false or at best inadvertently misleading in relation to Mr. Mundy. We cite as a particular example page 135 where Mrs. Brown makes a statement that Mr. Mundy had been spoken to regarding an unrelated disciplinary matter on the 5 th of February 2003 and was given a verbal warning. This can only refer to the capability procedure (which is not a matter of discipline). We have found as a fact that Mr. Mundy was not given a warning of any description on that day. It was also misleading to refer to a breach of " all " terms of suspension. We find that Mr. Mundy did contact some members of the staff and that he did enter the school, but only with permission of Mrs. Fielding (the Assistant Headmistress) and accompanied by her. We further find that of the six pupils Mrs. Brown interviewed on or about the 7 th of April 2003, she failed to point out to the disciplinary panel that Master Fraser and Master Dicks had been known to be trouble makers, and further failed to point out that one of the girls, Emma Hayter, was related, that is to say, was the half sister of Josh Dicks, and that this evidence should be treated with appropriate caution. It was also a misrepresentation to suggest that Mr. Mundy was " wielding a stick ", whereas he held a short baton used as a pointer whilst seated at his desk. We also find as regards this investigation that far from being an independent fact find leading the disciplinary panel to make up its mind as to the conclusion to be drawn from the facts, it presented a case for the prosecution. Page 137 is a good example of what the Tribunal consider was an investigation designed to prove a point rather than to establish the facts. q) Mrs. Brown, Mr. Jack May and Lady Juliet Cooper all accepted that this case was the first disciplinary case concerning a teacher that any of them had to deal with. Whilst we accept that the disciplinary panel acted in good faith, we find that although we have no doubt that the disciplinary panel were independent from Mrs. Brown they did not, as a reasonable employer should have done, probe Mrs. Brown's report and account to any extent. r) The appeal process was supposed to be by way of a re-hearing. The appeal was heard in Mr. Mundy's absence for reasons that are not entirely clear. There was also confusion in the process. The appeal took place on the 24 th June 2003. Papers that were before the disciplinary panel on behalf of the employer were circulated to the appeal panel in advance. For reasons which the Tribunal have not been able to understand Mr. Mundy's papers were not sent to the appeal panel, and it was only two hours before the appeal hearing was due to start that the appeal panel became aware that they should have those papers. They made their best efforts to read them. On learning of this oversight Mr. Mundy wished to apply for an adjournment of the appeal to allow the papers to be read properly. Lady Cooper (who chaired the appeal) was not aware of Mr. Mundy's request for an adjournment. We heard in evidence from Lady Cooper that she was not told. Mr Mundy left the premises in a state of stress. Lady Cooper, whose evidence we accept, indicated to the Tribunal that had she been aware of the request an adjournment would have been granted. Lady Cooper received advice to proceed with the appeal and acted upon that advice. That advice was unfortunate and left the appeal panel in an invidious position. As it was and in the absence of the Applicant the appeal panel amended two of the charges found, although they upheld the decision to dismiss."[10]At paragraph 6 of their reasons the Tribunal directed themselves as to the law. They referred correctly to the statutory provisions of section 98 and to the "three fold tests" established in conduct dismissals by the Burchell case, to which they had been referred. This case, as is well known, established that in a case where an employee is dismissed because the employer suspects or believes that he has committed an act of misconduct then in determining whether that dismissal is unfair an Employment Tribunal has to decide whether the employer who discharged the employee on the ground of the misconduct in question entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time.[11]The EAT held in that case that that test involved three separate elements. First, there must be established by the employer the fact of that belief; that is, that the employer did genuinely believe it. Second, it must be shown that the employer had in his mind reasonable grounds upon which to sustain that belief. Third, the employer at the stage at which he formed that belief on those grounds must have carried out as much investigation into the matter as was reasonable in all the circumstances of the case.[12]In paragraph 6.3 the Tribunal warned themselves about what they described as "two potential danger areas", as follows:
"The first is that the Tribunal must not substitute its own standards of what was adequate investigation for the standards to be expected of a reasonable employer. Secondly, that it must not substitute its own view of what it would have done in the circumstances but simply consider the matter from that of a reasonable employer."
[13]So far as they go, the directions of law set out in paragraph 6, as is common ground, were correct. However the Tribunal did not refer to the need to separate out the three elements of the test established in Burchell , a point emphasised by the Court of Appeal in the case of Post Office v Foley [2000] IRLR 827 . Nor did they refer specifically to where the burden of proof lies in relation to the three fold test to which they referred. Nor, save obliquely in the final sentence of paragraph 6.3, did they refer to the test to be applied in relation to the decision to dismiss, the fundamental question being whether the employer's decision to dismiss in the circumstances of the case was within the range of reasonable responses open to that employer.[14]The Tribunal's conclusions are then set out at paragraphs7.1 to 7.5 as follows: 7.1 We have asked ourselves whether this employer has made out conduct as the reason for dismissal. We have come to the conclusion that it has not. We have asked ourselves (applying the British Home Stores tests) whether the employer had established the fact of their belief in the truth of the allegations, that the employer did hold the belief and that there were reasonable grounds to sustain the belief. We have come to the conclusion that a reasonable employer could not have formed a genuine belief on the basis of the information that was before them. The employer failed to take Into account the prejudice in and the incomplete nature of the investigation, they failed to take into account the breach of their own procedures in treating preliminary performance issues as disciplinary matters and failed to give any weight to the known personality of the Applicant or any real consideration to the context in which matters they complained about had to be put. Taking a superficial view out of context, some of the words alleged to be used, (and those admitted to have been used), were a cause for concern but having decided to suspend Mr. Mundy, a reasonable employer would have had ample opportunity to fairly investigate the matter and to establish context.7.2 The way in which a particular subject is taught is a matter of discretion for the teacher in the manner of its delivery. If in a school a teacher uses humour as a mean by which pupils can be encouraged to maintain their interest and as an aid to learning, its use must surely be legitimate provided that matters are kept within reasonable bounds. The Tribunal has accepted Mr. Mundy's explanation of the context of the remarks he admits to have used, aided in that acceptance by the fact that he brought credible witnesses to support him and by the fact that he had no previous disciplinary record. In certain limited aspects it has been admitted by Mr. Mundy that he lacked judgment. Such matters, however, do not by themselves, in the opinion of the Tribunal, justify dismissal by a reasonable employer. Mr Mundy said that had he been told that he had overstepped the mark with his use of humour, he would have dealt with matters differently. The Tribunal are satisfied that he was not told. He was not warned in this area crucial to the Respondent's case and in those circumstances, a reasonable employer properly addressing itself to the issues, could not have dismissed for gross misconduct.7.3 It follows that we do not consider, as the employers have failed to discharge the burden of proof, that the Applicant has contributed to his own dismissal by conduct.7.4 Alternatively, if the employer had succeeded on those facts in establishing the reason for dismissal as being conduct, applying the statutory test in section 98(4) of the 1996 Act, and having regard to the test laid down on British Homes Stores v Burchell , we are not satisfied that the conduct of the investigation and the enquiry that the disciplinary panel made was adequate. Further, a reasonable employer properly addressing the issues, would have regarded a penalty short of dismissal as appropriate. There was no credible evidence of sexual misconduct. Any breach of the terms of suspension here were at worst minor and at best excusable - if not actually brought about in part because of the apparent conflict between the guidance notes and the terms of the letter of suspension. A reasonable employer should have seen that there were personalities working against each other here and thereby made an effort at the disciplinary hearing to distinguish between the fact and fiction. The appeal process was a shambles procedurally and would be sufficient for the Tribunal to seriously query the whole process even on its own.7.5 Applying section 98(4) to the facts, we find the decision to dismiss was unfair. The employer did not act reasonably in the circumstances in treating the matters complained of as sufficient reason for dismissal. We do not find that the employee contributed to his own dismissal."[15]In relation to remedy the Tribunal, having considered the matter, ordered that the Applicant be reinstated and gave their reasons for so deciding in paragraph 8 of the decision. Subsequently, however, at a second remedies hearing held on 30 April 2004 the Tribunal held that it was no longer practicable to reinstate the Applicant and compensation was awarded in the sum of £54,280.[16]On behalf of the Appellants Mr Sproull submits firstly that, in arriving at their conclusions, this Tribunal erred in law in confusing the three separate Burchell questions and placing a burden of proof on the Appellants in establishing reasonableness when, as a matter of law, the burden is neutral. Further, he submits that they erred in failing to address the question whether dismissal was within the range of reasonable responses, to which no express reference is made at any point in their decision. He stresses that the three questions identified in Burchell must be considered separately as the Court of Appeal have confirmed in the Foley case. He contends that the reasoning is so fundamentally flawed that the Tribunal's decision is unsustainable. In addition, he contends that the Tribunal then failed to make a deduction for contributory conduct despite a finding that a reasonable employer would have imposed some lesser sanction on the Applicant.[17]The Appellants' grounds of appeal also include grounds relating to the Tribunal's decision on reinstatement. That matter has now been re-determined in the recent decision, to which we have referred and there is therefore no longer in existence any order for reinstatement on which to found an appeal. Mr Sproull nevertheless relies on the challenge to the Tribunal's reasoning on reinstatement in order to point out the difficulties, if he succeeds on this appeal, caused by the matter being remitted for re-determination, with further directions to the same Tribunal.[18]For the Applicant Mr Jolly concedes that the wording used by the Tribunal in paragraph 7.1 is, as he expresses it, "a little clumsy", but he submits that it is clear from the Tribunal's reasoning as a whole that they were not satisfied that the Appellants had established that they believed that the Applicant was guilty of misconduct. He submits also that the Tribunal found that the Appellants had not established that they had reasonable grounds for any belief in any misconduct alleged and that they were entirely satisfied that the Appellants had failed to carry out as much investigation into the matter as was reasonable in all the circumstances. They described the central issue of the complaints against the Applicant to be out of context and the investigation to be superficial and patently inadequate.[19]In relation to the question of contributory conduct, Mr Jolly submits that the Tribunal were entitled to find that the Applicant had not contributed to his own dismissal by his mis conduct. There was in this case no credible evidence of misconduct and the Appellants were found not to have established to the Tribunal that they had an honest and reasonable belief that such conduct had occurred.[20]The conclusion we have reached, having considered the matter, is that this appeal must be allowed for the following reasons. We agree with Mr Sproull's submission that this Tribunal, in paragraphs 7.1 to 7.3 of their Reasons, have confused the three distinct elements which arise for determination in cases involving misconduct dismissals and in doing so have misdirected themselves as to the burden of proving the reasonableness of the dismissal. It is clear, as we have already stated, that the Court of Appeal in the Foley case confirmed that these issues must be considered separately.[21]In the case of Beedell v West Ferry Printers Ltd [2000] IRLR 650 , the Employment Appeal Tribunal confirmed that in establishing the fairness of a dismissal section 98(1) and(2) of the Employment Rights Act 1996 requires the employer to show a potentially fair reason for dismissal. Having done so, it is then for the Employment Tribunal to form a judgment as to whether in terms of section 98 (4) the employer acted reasonably or unreasonably in treating that reason as a sufficient reason for dismissal. At that stage no burden of proof lies on either party.[22]In applying the three fold Burchell test in a misconduct case stage 1 relates to the reason for dismissal, that is: has the employer established the fact of his belief in the misconduct alleged? If so, the provisions of section 98(1) and(2) are satisfied. Stages 2 and 3, that is, reasonable grounds for the belief based on a reasonable investigation, go solely to the question of reasonableness of the dismissal and not the reason for it. As the Court of Appeal held in Foley, the suggestion in the case of Midland Bank plc v Madden [2000] IRLR 288 EAT that all three elements of the test are directed exclusively to the reason for dismissal and not in any way to the question of reasonableness conflated the question of reasonableness with that of the reason for dismissal and failed to make the distinction between the onus on the employer under section 98 (1) and (2) and the neutral position under 98 (4).[23]In determining the question of reasonableness under section 98 (4) Employment Tribunals are also bound to follow and apply the case of Iceland Frozen Foods Ltd v Jones [1982] IRLR 439 . The Tribunal should therefore determine whether the decision to dismiss fell within the band of reasonable responses which a reasonable employer might have adopted and must not substitute their own decision as to the right course to adopt for that of the employer.[24]It is clear to us in looking at paragraphs 7.1 to 7.3 that the Tribunal did not ask whether the Appellants had established their belief in conduct as the reason for the dismissal. To that question, had they asked it, there is really no dispute but that the answer would have been 'yes', given the findings about the good faith of the disciplinary panel at paragraph 5 (q).[25]Instead, having asked themselves whether this employer had made out conduct as the reason for dismissal, the Tribunal concluded:
"We have come to the conclusion that a reasonable employer could not have formed a genuine belief on the basis of the information that was before them."
In so doing they have erroneously placed upon the Appellants the burden of proving the reasonableness of the dismissal.[26]Further, it is common ground that the reasoning at 7.4 is very difficult to follow. Mr Jolly suggested in oral submissions that we should really regard it as a paragraph which is superfluous to the rest of the reasoning, but realistically the parties are quite unable to understand why that paragraph appears or its relevance to the rest of the reasoning. It indicates, in our judgment, a failure properly to understand the tests which had to be applied, with an erroneous description of their reasoning as an alternative to what has gone before.[27]Having considered the Burchell tests, the Tribunal should then have gone on to consider whether the employer's decision to dismiss fell within the range of reasonable responses. However, at no stage anywhere in their reasoning do the Tribunal make reference to this test, save obliquely in the second sentence at paragraph 6.3.[28]We also consider, reading paragraph 7.2, that despite the warning set out at paragraph 6.3 the Tribunal appear to fall into the trap of putting themselves into the position of the employer and deciding what they consider was the appropriate course for the employer to take in the circumstances of this case.[29]In relation to the question of contributory conduct by the Applicant, in our judgment the Tribunal also misdirected themselves in paragraph 7.3 as a consequence of their failure to separate out the three Burchell tests in the preceding paragraphs. In so determining the matter the Tribunal failed to consider contribution in a case where such a contribution was arguably appropriate, given the findings that the Tribunal made in paragraph 7.4 that "a reasonable employer properly addressing the issues would have regarded a penalty short of dismissal as appropriate" and that "there were personalities working against each other."[30]In fact, as a matter of law, the question of contribution is a discrete issue and falls to be considered even where the burden of proving the reason for dismissal has not been discharged by the employer. See the case of Polentarutti v Autokraft Ltd [1991] IRLR 457.[31]It follows that we regard the Tribunal's reasoning in paragraph 7 to be inadequate and confusing and to include a clear misdirection on the tests to be applied. Mr Jolly has sought to persuade us to consider this decision broadly, having regard to the facts found, and submits that such defects in the reasoning as exist are not such as to render this decision unsustainable. We do not agree. For the reasons we have given. the reasoning in this case is, in our assessment, so fundamentally flawed that the decision cannot stand and the appeal must therefore be allowed.[32]We also accept Mr Sproull's submissions that, given the Tribunal's recent compensation award, the nature of the dispute between the parties as to reinstatement and the alleged errors in the Tribunal's original reasoning in ordering reinstatement, it would be inappropriate for the same Tribunal to consider these matters afresh applying the law correctly. The only just outcome, albeit with some regret on our part, given the inevitable rehearing which must now take place, is to order that the case be remitted for a fresh hearing before a differently-constituted Tribunal.[33]We are grateful to the parties for their assistance.