AIFOS PLC v MR A BUCKLAND [2005] UKEAT 0076_05_2107

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2005] UKEAT 0076_05_2107Case No Appeal No. UKEAT/0076/05Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
AIFOS PLCAPPELLANTMR A BUCKLANDRESPONDENT
Before
His Honour Judge Ansell Ms V Branney Mr I EzekielDate 21 July 2005
[1]APPEARANCES For the Appellant MS NAOMI CUNNINGHAM (Of Counsel) Instructed by: Messrs Levinson Gray Solicitors 9 Old Queen Street London SW1H 9JA For the Respondent MISS H EVANS (Of Counsel) Instructed by: Messrs Irwin Mitchell Solicitors 150 Holborn London EC1N 2NS SUMMARY Unfair Dismissal Polkey Tribunal invited to deal with issue on basis of whether even if fair procedure applied could have been discussed within 2 months – tribunal not obliged to consider percentage possibility – Tribunal failed to deal with issue of contributory conduct – EAT declined to deal with issue on basis of tribunal's findings. HIS HONOUR JUDGE ANSELL This is an Appeal from a decision of a London Central Tribunal following a hearing on 22 and 23 November last year and in a decision sent to the parties on 8 December held that the employee Mr Buckland had been unfairly dismissed and awarded compensation in the sum of £19,989.82.[2]This Appeal relates to two issues in relation to that award, namely that the tribunal did not deal adequately with the Polkey deduction and did not deal at all with the issue of contributory behaviour although it is conceded that it had been raised as an issue before them.[3]The employers and the Appellants in this case, Aifos, are a subsidiary of a large Spanish property concern specializing in new properties on the southern coast of Spain with the head office in Malaga. They set up a London office in around May of 2003 and Mr Buckland was recruited to head up that office and his employment began in that month. By the beginning of 2004 the office consisted of Mr Buckland, a deputy, a receptionist and some sales staff. The sales generated through the office which are generated mainly through exhibitions totalled some 33 in 2003. Mr Buckland dealt mainly with a Mr Moya who was the international manager for Aifos.[4]Mr Moya decided at the beginning of 2004 to set sales targets, and set what was admittedly on his own admission, an ambitious target for the London office of 250 property sales for the calendar year 2004. This led to what the Tribunal described as quite heated discussions between Mr Moya and the Respondent and also an exchange of emails at the beginning of February. In his email Mr Buckland offered to try and achieve figures of around 160 sales indicating if they wanted any more than that they would have to consider two more sales staff. There was also some discussion about how payment of commission could be made either tax free or grossed up. Nothing in the end turned on that before the tribunal.[5]Aifos also opened a Manchester office in March of last year. In May the Respondent asked for a salary review and Mr Moya told him that it was not a good time. In fact more staff were recruited and were due to start during the middle of 2004. The sales figures for the first five months of the year were poor and amounted to around 26 properties according to the tribunal. On 6 June Mr Buckland was handed a letter by Mr Moya terminating his employment on one month's notice on the basis that sales were not up to the levels expected by the Respondent. The Tribunal were satisfied that the reason for dismissal related to capability but in view of the somewhat drastic way in which his employment had come to an end the Tribunal unsurprisingly came to a decision that the employers had not acted reasonably.[6]We turn to the two issues the subject of this Appeal. Polkey The issue in relation to what might have happened if a proper procedure had been followed was raised first of all by the Respondent's employers in their appearance. And they said this:
"…As the Applicant's performance was so far below what was required, and the Applicant was so at odds with the Respondent's method of doing business, the Respondent contends that warning the Applicant and giving the Applicant time to improve would have done no more than extend the Applicant's employment by one or two months…"
That issue was defined as an issue before the tribunal in both parties' case summary and at the beginning of the case in their narrative, the tribunal dealing with issues said this:
"The Respondent claimed that had it followed the correct procedure the Claimant would nevertheless have been dismissed within two months of the effective date of termination."
And that became a defined issue in paragraph 2.3 of the tribunal decision listing the issues:
"If the dismissal was unfair, were we satisfied that had the Respondent followed correct procedures the Claimant would have been dismissed in any event within two months of the effective date of termination."
So it is there set out as quite a well-defined issue. We have been told that both parties were represented before the tribunal. Miss Evans who appears today also appeared below and certainly no objection was taken to that manner of defining the so-called Polkey issue. The tribunal dealt with the issue in paragraph 6 and they said this: The Respondent argued that if a proper procedure had been followed the Claimant would have been dismissed in any event, albeit a month or two later. It is difficult for us to speculate as to what would have happened if the Respondent had set a more realistic target in the first place and/or it had taken the steps that we have set out above. There was a potential for an increase of sales figures in any event in the light of the tele-marketing that began in April, the new sales recruits who started in May and June and the opening of the Manchester Office in May. We are not satisfied in all the circumstances of this case that setting realistic targets and following the correct procedures would have resulted in the Claimant being dismissed two months later in any event."[7]Miss Cunningham's complaint on behalf of the Appellant's was that the finding by the tribunal and conclusion deals with the so-called Polkey issue in too narrow a way. She argued the tribunal omitted to ask the wider question, the so-called percentage possibility, in other words - what would have been the outcome had a fair procedure been followed. Miss Evans submitted that in this somewhat unusual case the parties chose, and particularly the employers chose to limit the scope of the Polkey issue, in terms of the well-defined issue at the commencement of the case. The employer's representative below could have objected if he was seeking a wider Polkey investigation and did not do so.[8]The authorities clearly indicate that Polkey is one of those issues that a tribunal must enquire into whether or not it is actually raised by the parties before a tribunal. In Langston v Cranfield University [1998] IRLR 172

Judge Clark said this at paragraph 21:

"The generally accepted principle that a party will not be permitted to raise new points on appeal which could have been ventilated below must be seen in the context of cases where a principle is so well established that an industrial tribunal may be expected to consider it as a matter of course."
He goes on in paragraph 22:
"Further, in Red Bank Manufacturing Ltd v Meadows [1992] IRLR 209 (Tucker J presiding) the Employment Appeal Tribunal held that an industrial tribunal was obliged, following an unfair redundancy dismissal finding, to consider the application of the twofold Polkey principle when assessing compensation, namely if a proper procedure had been followed would it have resulted in an offer of alternative employment? If so, at what salary level? The case was remitted to the industrial tribunal for further consideration."
[9]Miss Evans has referred us to a passage in Rugamer v Sony Music Entertainment UK Ltd [2002] ICR 381 where at paragraphs 46 and 47 it is made clear however that generally speaking the tribunal should not conduct on their own behalf any further investigation or fact finding into issues that have not been raised before them. From paragraph 47 I quote:
"…the role of the tribunal is not thereby extended so as to place on it the duty to conduct a free standing inquiry of its own, or require it to attempt to obtain further evidence beyond that placed in front of it on the issues raised by the parties…"
Generally speaking therefore we accept that Polkey is an issue that a tribunal has to raise and has to enquire into if raised by the facts of any particular case even if not raised by the parties.[10]This case, however, was unusual. Polkey was indeed raised and, as we have indicated already, quite narrowly defined by the issue as set out at the beginning of the tribunal decision. But was there any obligation on this tribunal to consider wider aspects of Polkey ? We do not think so. We are of the view that in this unusual case where indeed Polkey had been raised and well-defined by the parties, it was not incumbent on the tribunal to go outside the nature of that enquiry which had indeed been defined by the parties. Even if we are wrong on that matter and there was a duty on the tribunal to take up the wider aspect of Polkey , namely the percentage possibility that dismissal would have in any event have occurred notwithstanding a fair procedure, we are of the view that the tribunal did indeed touch upon that aspect of the matter when they dealt with the Polkey issue as it had been defined by the parties. As we have previously referred to in paragraph 6 in the second sentence of the paragraph the tribunal did indeed make it clear that they find it difficult to speculate as to what would have happened in the future. We are satisifed that within that sentence the tribunal were indeed covering the wider aspect of Polkey and effectively saying to themselves that they were not able to speculate in percentage terms as to what would or would not have happened in the future.[11]We can therefore find no fault in the way that the tribunal dealt with the Polkey issue as it was before them.[12]Turning to the issue of contributory conduct, as we have indicated already this was certainly an issue that had been raised before the tribunal and should have been dealt with by them. Miss Evans urges us to take a view of the facts found by the tribunal to come to the conclusion that in the circumstances of this case and in the facts as found by the tribunal there would not have been any percentage deduction because of contributory behaviour. She reminds us first of all that this was a capability case and has taken us to a passage in Kraft Foods v Fox [1978] ICR 311 where at page 313 Kilner Brown J giving the decision of the EAT said this:
"If an employee is incompetent or incapable and cannot with the best will in the world, measure up to the job, it seems to us to be wrong to say that that condition of incapacity is a contributory factor to his dismissal. The whole point about contribution is that it is something by way of conduct on the part of the .employee over which he has control. Thus a man may be guilty of misconduct. he may misbehave. He does not have to misbehave. He does not have to do something which can be categorised as misconduct. In the case of a man who falls short, he may not try. He may not be doing his best. That is something over which he has control. However, if he id doing his best and his best is not good enough, it does not seem to us to be proper to say that in those circumstances he has contributed and therefore a finding in his favour should be reduced by whatever proportion the industrial tribunal has decided."
[13]She also reminds us of the well-known passages in Nelson v British Broadcasting Corporation [1980] ICR 110 where at page 121 letter D in the speech of Brandon LJ he said this:
"…an award of compensation to a successful com plainant can only be reduced on the ground that he contributed to his dismissal by his own conduct if the conduct on his part relied on for this purpose was culpable or blameworthy. This conclusion can be arrived at in various ways. First, it can be said that the epithet "culpable" or blameworthy" should be implied before the word "action."
[14]In her submissions before us, both written and oral, she set out a number of findings made by the tribunal which indicate that Mr Buckland's work in many areas was satisfactory and that the sales targets that had been imposed upon him were unrealistic. For example at paragraph 4.8 Mr Buckland has said to have worked hard and for long hours. In paragraph 4.9 the tribunal commented that the sales targets were unrealistic and that there was no evidence that any proper research had been carried out in order to reach the figure. In paragraphs 4.12 and 4.15 the tribunal remarked that there had been no proper and meaningful discussion of hitting targets in spite of the matters that Mr Buckland had raised in his discussion paper.[15]She therefore submitted that there is nothing in the tribunal's findings that points to culpability or blameworthiness and therefore that we should come to a view that no reasonable tribunal would have imposed any percentage deduction.[16]Miss Cunningham argued that this is not a task that we should embark upon. She conceded that in incapability cases percentage deductions for contributory behaviour are more unusual than in misconduct cases. She took us to Slaughter v C Brewer and Sons [1990] ICR 730 where at page 738 letter B, Wood J giving his decision of this Court said this, and he was referring to a predecessor section in relation to contributory behaviour:
"…Not every set of circumstances will give rise to the application of section 74(6). The cases of ill-health are perhaps good examples. The circumstances of each case are infinitely variable but it seems to us that in such cases instances where the act or omission of the applicant was a contributory factor within the guidance given in Nelson are likely to be rare. One possible example might be where the applicant had blatantly and persistently refused to obtain appropriate medical reports or to attend for medical examination. However, if a tribunal is proceeding under section 74(6) it must bear in mind the guidance given in Nelson's case. Although ill-health falls under the heading of capability as a reason under section 57, there are other categories under that heading which involve very different concepts-such as laziness or obstructive behaviour which might in some cases border on "conduct."
In such cases section74(6) may well be of appropriate application:.." She took us to allegations that were made particularly in the Witness Statement filed before the tribunal which showed that there were serious complaints being raised in relation to Mr Buckland's capability such as would give rise to a possibility of a contributory behaviour deduction.[17]We are of the view that this is a decision which is really only properly taken by a tribunal that heard all the facts of the case and it would be wrong for us to impose our view not having heard the evidence in the case. Regrettably therefore and mindful of the additional expense involved we must send this back to the tribunal for them to deal with this one specific issue. It may well be that it could be dealt with by simply written submissions to the tribunal and for them to give further reasons, indeed, had I been seeing this matter on a sift possibly one would have referred it back straightaway to the tribunal simply for further reasons. That course has not been taken regrettably and therefore all we can do at this stage for a final hearing is to invite the same tribunal to deal with this aspect of the matter as they think fit.[18]So it is remitted back to them for a re-hearing on that one issue.