MR C MCCABE v LONDON BOROUGH OF GREENWICH [2004] UKEAT 0608_04_0612

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0608_04_0612Case No Appeal No. UKEAT/0608/04Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR C MCCABEAPPELLANTLONDON BOROUGH OF GREENWICHRESPONDENT
Before
His Honour Judge Richardson Mr M Clancy Mrs R A VickersDate 6 December 2004
[1]APPEARANCES For the Appellant MR D MATOVU (of Counsel) Instructed by: Messrs Gough Clinton & Broom Solicitors 104 Bellegrove Road Welling Kent DA16 3QD For the Respondent MS C McCANN (of Counsel) Instructed by: London Borough of Greenwich Borough Secretary & Solicitors Department 29-37 Wellington Street Woolwich London SE18 6PW SUMMARY Unfair Dismissal The Employment Tribunal did not err in law in finding that the Respondent was not in breach of the implied term of trust and confidence. The Employment Tribunal's conclusion on affirmation / waiver is open to criticism, but the appeal is dismissed because the issue of affirmation / waiver did not arise in view of its primary finding. HIS HONOUR JUDGE RICHARDSON This is an appeal against a Decision of the Employment Tribunal sitting at London South, entered in the Register on 8 December 2003, dismissing the claim of Mr Colin McCabe that he had been constructively and unfairly dismissed from his employment with the London Borough of Greenwich (hereafter "Greenwich"). The background[2]Mr McCabe had been employed by Greenwich since 7 March 1983. By 2002 he was employed as a grade 5 refuse driver in the Waste Services Division. He was experienced in the job. He knew the area well.[3]On 30 January 2002 a Waste Service Manager, Mr Dalley, saw him loading a window frame into the back of a vehicle. He was suspicious for two reasons. Firstly, the vehicle should not have been in the place where it was at that time. Secondly, the vehicle and crew were not authorised to make a collection of waste of that type. When Mr Dalley investigated he obtained a statement from a builder who said that he paid £10 to a council refuse staff member to pick up the window frame.[4]After initial investigation disciplinary proceedings were instituted. The charge was set out in a letter dated 26 February 2002:
"On 30 January 2002 at 8.45am outside 62 Lakedale Road, Plumstead SE18 you collected a window frame and placed it in the back of the refuse vehicle for money."
Underneath this charge were set out a number of respects in which this conduct was said to have been improper. It was said to constitute the acceptance of a bribe, and to be dishonest. It was also said to have denied Greenwich potential trade waste income.[5]Subsequently, however, the charge was reduced. Mr McCabe and a union representative had visited the builder and obtained a further statement from him saying that the person to whom he paid £10 was not Mr McCabe. In view of this Greenwich reduced the charge to one which was in lesser terms. It was set out in a letter dated 24 April 2004. It reads:
"That on 30 th January 2002 at 8.45am outside 62 Lakedale Road, Plumstead SE18 you were allegedly seen by Mr Peter Dalley (Manager) to make a collection of unauthorised waste."
The letter, however, made it clear that the charge was still said to be extremely serious and to constitute gross misconduct.[6]A disciplinary hearing took place on 13 May 2002 chaired by Mr Edwards. By this time the fellow occupants of Mr McCabe's vehicle had been interviewed. At that hearing Mr McCabe admitted making a collection of unauthorised waste at the time alleged. He said that he made a mistake of judgment. He thought he was just doing a favour for a member of the public who waved him down.[7]Mr Edwards took a more serious view of the matter. In his letter dated 13 May 2002 he said:
"At the conclusion of the hearing I found that by your own admission you had made a collection of unauthorised waste. I found that you were an experienced Refuse operative, well versed in the service and I was satisfied that this action constituted very serious misconduct."
Later, in explaining his decision for the purpose of an appeal, he said:
"Colin McCabe admitted the allegation of making an unauthorised collection of waste. This incurs unnecessary cost for the Council through the misuse of an expensive vehicle and crew, the additional costs of disposal, and a loss of income from charges that are made to commercial or trade producers of waste. The consistent penalty for such misconduct in Waste Services over a number of cases is a Final Warning usually with a financial penalty or demotion, or dismissal."
[8]It was Greenwich's case that Mr Edwards approached the matter on the basis of what Mr Dalley saw and what Mr McCabe admitted, not taking into account any evidence from the builder. Nevertheless he viewed what Mr McCabe had done as gross misconduct. But, accepting there were mitigating factors, he did not dismiss Mr McCabe. Rather he gave him a final written warning and assigned him to duties in the Street Cleansing Service for three months. Mr McCabe did not lose any money or grading, but the duties were perceived as menial, and he found them humiliating. He became too depressed to continue working, and went off sick in early June.[9]On 25 May 2002 Mr McCabe appealed against the disciplinary decision. The appeal was to a board of senior management. For reasons set out in the Tribunal's Decision his appeal was not heard until 14 November 2002. The appeal was dismissed. The appeal board reviewed Mr Edwards' decision. They accepted that what he had done was gross misconduct, that the plea of mitigation had been taken into account, and that the period of reassignment was a consequence of the decision being taken as an alternative to dismissal, and represented a reasonable period to re-establish trust.[10]Mr McCabe did not return to work. He resigned on 7 January 2003, alleging that the appeal had been a charade, that he had been victimised and that the delay in hearing his appeal was totally unacceptable. The Tribunal's Decision[11]The Tribunal had clarified the issues at the outset of the hearing:
"The Applicant relied on a breach of the implied term of trust and confidence and relied on four matters in support of this contention. He alleged that it was not adequately proven that he was guilty of gross misconduct; that he was demoted when he was re-assigned to road sweeping duties and this was imposed without reasonable and proper cause; that his working hours were changed unilaterally; and, there had been excessive delay in dealing with the disciplinary process (particularly in disposing of the appeal) in the light of the Applicant's health."
[12]The Tribunal set out in an orderly and careful way its findings of primary fact. In the course of doing so it recorded, in detail, in paragraphs 13 -17 of its Decision, its findings about Mr Edwards' reasons for imposing the final warning and the reassigned duties.[13]The Tribunal directed itself that in order to establish a constructive dismissal, Mr McCabe had to establish a breach of contract – either an individual breach or a cumulative breach – going to the root of the contract. The Tribunal did not quote in full the implied term of trust and confidence, but it is well known and the Tribunal plainly had it in mind.[14]On the question of gross misconduct the Tribunal set out its reasoning in three passages, all in paragraph 29. The first passage deals with the question whether what Mr McCabe admitted amounted to gross misconduct. The Tribunal said:
"The conclusion of the Tribunal is that in light of the Applicant's admission as to the collection of unauthorised waste and the Respondent's genuine and legitimate needs to ensure a well managed refuse collection service and safe disposal of waste particular in light of health and safety requirements, the Respondent has succeeded in establishing that the Applicant was guilty of gross misconduct in the unauthorised waste col1ection."
[15]The second passage deals with a suggestion that in reality Mr Edwards had been disciplining Mr McCabe, wholly or in part, for the allegations which had been withdrawn:
"We noted the Applicant's concerns and suspicion that the Respondent had really never altered its mindset from the initial allegation of unauthorised trade waste collection for personal gain, but were satisfied on the basis of the evidence before us and the facts found above, that the Respondent was judging the Applicant on the basis of the charges set out in the second letter of collecting unauthorised waste, rather than the earlier, more serious, charge."
[16]The third passage dealt with the level of sanction imposed:
"In view of the Tribunal's conclusion that the Applicant was guilty of gross misconduct, a reassignment of the Applicant's duties to road sweeping for a temporary period cannot be said to have been imposed without reasonable and proper cause… in light of the finding of gross misconduct, the reassignment of duties was not an unreasonable sanction, nor was the imposition of a final written warning."
[17]The Tribunal went on to reject the argument that delay in the disciplinary and appeal process amounted, in this case, to a breach of the implied term of trust and confidence.[18]At the end of its Decision, the Tribunal said that, for the reasons it had given, it did not accept that there had been a fundamental breach of contract such as to entitled Mr McCabe to resign. It went on, however, to deal with the position if it had concluded that Mr McCabe's allegations of breach of contract were well founded. It said:
"…the Applicant has not succeeded in showing that he resigned in response to the alleged breaches of contract. His decision to leave was taken in early June 2002 and he did not resign until 7 January 2003. We would have said (all other things being equal) that he had delayed too long before implementing his decision and by his delay, affirmed any breaches of contract that we might have found."
Submissions[19]Mr Matovu submits that the Tribunal approached its task in fundamentally the wrong way. He says that its task was to review the decision taken by employer at the time, and that there is no sufficient indication that such a review has taken place. He cites a recent unreported Court of Appeal case, Post Office v Burkett [2003] EWCA 748, a case concerning section 98(4) of the 1996 Act , where the issue is explicitly whether an employer's decision to dismiss is reasonable. He cites an older case, Parker Bakeries Ltd v Palmer [1977] IRLR 215 , which concerned a statutory predecessor of section 98(4). He also refers to BBC v Beckett [1983] IRLR 43, a constructive dismissal case, although not one expressly based on the implied term of trust and confidence.[20]Mr Matovu submits that the Tribunal has not properly concentrated upon Mr Edwards' process of reasoning and review it. He points to the lack of discussion of disciplinary rules in the Tribunal's decision. He points to his second ground, namely the lack of any discussion of the evidence of Mr Sears or Mr Welsh. He submits that the failure of the Tribunal to consider Mr Edwards' decision can also be seen in its failure to look at the appeal process. He submits that management case at the appeal board, which was put by Mr Edwards, was presented on a fundamentally different basis to that which was accepted below. He submits that the Tribunal's finding of affirmation is unsustainable in the light of the continuing nature of the alleged breaches, including, of course, the fact that a disciplinary hearing was not held until November.[21]Ms McCann upholds the Tribunal's Decision. She submits that the Tribunal has given proper and adequate reasons for its Decision and has properly focused on the questions which it had identified at the start if the hearing as being the key ones between the parties. She submits that it has given adequate explanation of the finding of gross misconduct, that it has looked at Mr Edwards' evidence, that it has made no findings which are unsupported by evidence. She submits that the finding of affirmation is to be explained by the Tribunal's findings in paragraph 19 of its Decision that he had decided not to go back to work in May or June of 2002, and that its Decision cannot properly be described as perverse. Our conclusions[22]The Tribunal was concerned with the question whether the contract of employment had been terminated by the employee in circumstances in which he was entitled to terminate it by reason of the employer's conduct: section 95(1)(c) of the Employment Rights Act 1996 . It is well established that this depends on establishing a repudiatory breach of contract.[23]The contractual term relied on was the implied term of trust and confidence. In Mahmud v Bank of Credit and Commerce International SA [1997] ICR 606 , the term was defined as:
"The employer shall not without reasonable and proper cause conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee."
[24]The task for the Tribunal was to decide whether Greenwich conducted itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee without reasonable cause.[25]In disciplining Mr McCabe for gross misconduct, Greenwich might have been in breach of that term in more than one way. For example:(1) It would be a breach of that term, without doubt, to charge him with one matter, but take into account and punish him for another.(2) It would be a breach of that term to hold him guilty of gross misconduct if Greenwich did not really believe him to be guilty of gross misconduct.(3) It would be a breach of that term to discipline him on the basis of gross misconduct if the finding of gross misconduct was in fact unjustified.(4) It would be a breach of that term to impose a punishment which is grossly out of proportion to the offence. Although BBC v Beckett [1983] IRLR 43 was not explicitly concerned with the implied term of trust and confidence, it is authority for the proposition, with which we agree, that the imposition of a punishment which is grossly out of proportion to the offence can amount to a repudiation of a contract of service: see paragraph 21.[26]Applying those principles here, we are satisfied that the Tribunal addressed and answered the correct questions in its Decision. The Tribunal clearly had in mind that it was necessary to look at the decision making process of Mr Edwards. It had made careful findings of fact in paragraphs 13-17 about his decision making. It applied those findings of fact in paragraph 27.[27]We have identified four possible ways in which the finding of gross misconduct could have led to a conclusion that there was a breach of the implied term of trust and confidence. The Tribunal dealt with each of these. It concluded that Mr Edwards judged on the basis of the second letter, not the first. It found that he did believe the charge to be gross misconduct: see paragraph 13. It found that Mr McCabe was guilty of gross misconduct in the unauthorised waste collection: see paragraph 29, first conclusion. In so doing it was not substituting its own decision for Mr Edwards': rather it was agreeing with Mr Edwards. It was on his evidence (coupled with the admission made by Mr McCabe) that the Tribunal was persuaded. The vice in Post Office v Burkett [2003] EWCA 748 was that the Tribunal found the employer to be wrong by substituting is own view without asking whether the employer was reasonable. The Tribunal here made no such mistake. As to our fourth possibility, the Tribunal found that the reassignment of duties was not an unreasonable sanction: see paragraph 29, third conclusion.[28]Once granted that there was no error of law in the Tribunal's approach, and we are satisfied there was none, it is not for this Tribunal to substitute its own conclusion for that of the Tribunal on any of the above questions. A conclusion by the Tribunal that gross misconduct was made out is a conclusion of mixed law and fact. Unless an error of law can be distilled from the mixture the Employment Appeal Tribunal cannot interfere.[29]We can deal more briefly with the next ground. The Tribunal had evidence from Mr Sears and Mr Welsh. We do not think any error is demonstrated in the circumstances of this case by the Tribunal failing to refer to that evidence. In the case of High Table Ltd v Horst [1998] ICR 409 at 420, it was said that while an employment tribunal must consider all that is relevant, it need only deal with the points seen to be in controversy relating to the statutory issues raised by the case, and then only with the principal important, controversial points. The evidence of Mr Sears and Mr Welsh cannot be said, in our judgment, to be so central to this case that the Tribunal needed to deal with it. Indeed, it can be said, so far as that evidence is concerned, that there are things in it which point in both directions. Thus, for example, Mr Welsh said in his evidence, giving an instance of taking a fridge-freezer away from a public place, that they first telephoned for authorisation to a manager. That might be said to support Greenwich's case.[30]As to the appeal hearing, it is important to bear in mind that the central criticism which the Tribunal had identified at the outset of the case concerning the appeal hearing was that there had been excessive delay in dealing with the disciplinary process, especially the appeal. This matter the Tribunal dealt with carefully. The submission that is made is that the Tribunal ought also to have dealt with the basis of the appeal. Reference is made to the opening of the appeal, both in writing, in a memo dated 6 September 2002, which we have quoted, and orally by Mr Edwards. It is said that these show that the appeal Decision was taken on a different basis, and indeed the appeal also argued on a basis, from that which Greenwich now say to have been the case.[31]We have looked at the materials in question. The Tribunal do not deal with the substance of the appeal in terms, but it must be borne in mind that the appeal was presented by Mr Edwards and the Tribunal, in paragraph 13 of its Decision, make express findings about Mr Edwards. We are satisfied that, both in his written opening and in his oral opening, Mr Edwards was doing no more than dealing, in general terms, with the consequences that can arise from unauthorised collection of waste. He was not saying that Mr McCabe was guilty of fraud or of depriving Greenwich of revenue. The Tribunal has expressly found, in paragraph 13, that that was not his state of mind. Indeed there are references in the notes of the appeal, in our bundle, which indicate that this was the position. Mr Edwards was not saying that the unauthorised waste was necessarily chargeable: he was simply saying that if chargeable, it would have been set up for charge. He was certainly, in our judgment, not putting the case on the basis that Mr McCabe was fraudulent.[32]We are satisfied that, having regard to their findings about Mr Edwards, and having regard to the way in which the principal issues in the Tribunal had been defined, the Tribunal are not to be criticised, and have not fallen into an error of law, by not dealing more fully with the substance of the appeal.[33]That is sufficient to dispose of this appeal, but we deal, briefly, with the question of affirmation. Generally speaking an employee cannot be said to have affirmed a breach of contract which consists of the imposition of a measure for misconduct while he is still appealing the measure. The Tribunal therefore seems to us in its rather brief finding in paragraph 33 of its Decision to have fallen into error by looking at the whole period from early June 2002 until 7 January 2003. It seems in so doing to have placed reliance upon its finding that Mr McCabe had decided he could not go back to work by May or June 2002.[34]But we would not ourselves have read that finding as meaning he would not have gone back to work if the appeal had been successful. He was, as we understand it, waiting for the appeal to take place, and it cannot be said that while he is appealing a decision, and waiting for the appeal to take place, he is waiving the breach or affirming the contract.[35]However, as we say, that was not a conclusion the Tribunal needed to reach in order to dispose of the case before it. The Tribunal's central conclusions, in our judgment, reveal no error of law. This appeal will be dismissed.