DR R KUZEL v ROCHE PRODUCTS LIMITED [2007] UKEAT 0516_06_0203

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2007] UKEAT 0516_06_0203Case No Appeal No. UKEAT/0516/06Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
DR R KUZELAPPELLANTROCHE PRODUCTS LIMITEDRESPONDENT
Before
His Honour Judge Peter Clark Mr K EdmondsonDate 2 March 2007
[1]APPEARANCES For the Appellant MISS RUTH DOWNING (of Counsel) Instructed by: Messrs B P Collins Solicitors Collins House 32-38 Station Road Gerrards Cross Bucks SL9 8EL For the Respondent MR JOHN BOWERS (One of Her Majesty's Counsel) Instructed by: Clarkslegal LLP Solicitors One Forbury Square The Forbury Reading Berks RG1 3EB SUMMARY Unfair Dismissal – Automatically unfair reasons Public Interest Disclosure Section 103A of the Employment Rights Act 1996 inadmissible reason for dismissal – burden of proof – whether Protected Disclosures – case remitted to same Employment Tribunal for further consideration. HIS HONOUR JUDGE PETER CLARK This is an appeal by Dr Kuzel, the Claimant before an Employment Tribunal sitting at Bedford chaired by Mr P Robjant, against so much of that Tribunal's reserved Judgment, promulgated with Reasons on 18 July 2006, following an eight day hearing and a further day's deliberations in private, as found that the reason or principal reason for her dismissal by the Respondent, her former employer Roche Products Limited, was not that she had made protected disclosures, an inadmissible and automatically unfair reason by virtue of s103A of the Employment Rights Act 1996 (ERA).[2]The dismissal was held to be automatically unfair by reason of the Respondent's failure to complete the statutory dismissal and disciplinary procedures (s98A); further, she had completed more than one year's continuous service (s108(1)) and the Respondent failed to make out a potentially fair reason for dismissal under s98, so that the dismissal was also unfair under that section.[3]The financial significance of the issue raised in the appeal is that whereas compensation for "ordinary" (s98) and s98A unfair dismissal is subject to the statutory cap, dismissal for a s103A reason is not (see s124(1A)). The Facts[4]The Respondent is a major international pharmaceutical group, employing some 50,000 people world-wide. On 9 June 2003 the Claimant was appointed Head of Regulatory Affairs. It was a senior appointment, attracting an initial salary of £87,550 per annum, making her responsible for all regulatory matters such as the application for and maintenance of licences for the Respondent's products.[5]During the course of her employment, ending with her dismissal by Mr Michael Doherty (Global Head of Regional Affairs) at a meeting held on 16 March 2005, effective on 16 May 2005, the Claimant contended that she made protected disclosures as defined in s43A ERA in respect of three matters, described in the Employment Tribunal's Reasons as Overwrapping, Archiving irregularities, and The Derbyshire Slimming Clinic. The details of those matters are not material to the issues raised in this appeal.[6]It is also apparent from the Tribunal's findings that the Claimant did not enjoy good relations with her colleague, Robert Vogel. Following remarks made to a job applicant by Mr Vogel about the Claimant, reported to her by a colleague, she took out a grievance against him.[7]Matters came to a head on 16 March 2005 when Mr Doherty called the Claimant into the office of Chris Bennett, HR Director. What there happened is set out a para 12.5 of the Reasons thus:
"12.5 On Wednesday 16 March 2005 at Welwyn, Mike Doherty called Dr Kuzel into a meeting at 12:30 pm in Chris Bennett's office. As she entered the room Mr Doherty told her that her contract was being terminated because of the breakdown of her relationship with Robert Vogel and because she had broken an agreement with him. Mr Doherty told Dr Kuzel that he had lost all trust in her and that she and Robert Vogel were not working well together. Mr Bennett then told her that Susie Dyer would be waiting for her when she went back and would allow her to collect her personal belongings. Dr Kuzel was then escorted off site by Miss Dyer in front of her whole department."
Issues before the Tribunal[8]The Claimant contended that the reason or principal reason (hereafter 'the reason') for her dismissal fell within s103A ERA, which provides:
"An employee who is dismissed shall be regarded for the purposes of this Part [Part X] as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure."
[9]She also raised a complaint that she had suffered detrimental treatment by reason of having made protected disclosures contrary to s47A ERA. That complaint was withdrawn. Further claims, of breach of contract and in relation to holiday pay, were compromised.[10]Initially, the Respondent contended that the reason for dismissal was not the s103A reason, but gross misconduct.

(b) ), that "other substantial reason" was there said to be:

"SOSR owing to the Claimant's breach of trust in respect of her working relationship with Mike Doherty and her deteriorating relationship with Robert Vogel. The decision [to dismiss] was within the range of reasonable responses available to the Respondent."
The Employment Tribunal decision[11]The Tribunal made no express finding as to whether any or all of the three alleged protected disclosures were in fact protected disclosures within the meaning of Part IVA ERA. They directed themselves (Reasons para 13) that it was "for the Respondents to show the reason for dismissal;" (the Claimant having sufficient continuous service). They rejected the potentially fair reason now advanced by the Respondent, SOSR. At para 23 they held:
"23. The Tribunal have concluded that the reason for Dr Kuzel's dismissal was Mr Doherty's catastrophic loss of temper and his failure to follow the advice given to him by his own Human Resources Director."
As to the s103A reason contended for by the Claimant, they said this (para 17):
"17. Nonetheless, the Tribunal cannot find that it was Dr Kuzel's actions and zeal in pursuing the regulatory issues described above that led to her dismissal. There is evidence enough both of Mr Doherty encouraging and supporting Dr Kuzel in the actions that she was taking, and a clear absence of evidence of the Respondents criticising Dr Kuzel for pursuing these issues, even if there was a difference in style and approach between the Respondents and Dr Kuzel. Accordingly, Dr Kuzel's claims under Section 103A of the 1996 Act are not made out."
Public Interest Disclosure[12]The Public Interest Disclosure Act 1998 was promulgated to protect 'whistleblowers'; those workers/employees who reveal nefarious activities by their employer in good faith and in the public interest. As to what is a disclosure qualifying for protection, the criteria are set out in Part IVA ERA, into which the provisions of the 1998 Act were inserted. Those criteria have already led to considerable judicial consideration which it is unnecessary to rehearse in this judgment.[13]Of greater relevance for our purposes are the "parallel elements" in the statutory protection provided to whistleblowers contained in s47B and s103A ERA, as Chadwick LJ described them in the course of his helpful analysis of the provisions in Melia v Magna Kansei Ltd [2006] IRLR 117 , paras 7-21.[14]For reasons which will become clear later, we think it necessary to draw out the similarities and differences between the forms of protection to be found in ss47A and 103A ERA.[15]First, the ingredients of what is a protected disclosure, to be found in s43A-J, are common to both. However, the two forms of protection are strictly delineated. Section 47B(2) provides that the protection for workers against detrimental treatment in s47B(1) does not apply where— "(a) the worker is an employee, and (b) the detriment in question amounts to dismissal (within the meaning of [Part X])."[16]Thus, "detriment" protection applies(i) to the wider group of workers; it is not limited to employees (see the definitions in s230 ERA), and(ii) covers action short of dismissal, but not dismissal itself.[17]Dealing with "detriment" protection, the wording of s47B(1) is as follows:
"(1) A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure."
[18]Remedies for breach of s47B detriment, following a successful complaint to the Tribunal under s48, are contained in s49.[19]In Melia Smith LJ (para 46) was of the opinion that an employee (we interpose, worker) who suffers an unlawful detriment under s47B is entitled to compensation up until dismissal (or, in the case of constructive dismissal, as in that case, until the date of the repudiatory act by the employer leading to that constructive dismissal), which compensation may include compensation for personal injury and injury to feelings. Including compensation for injury to feelings under s49 accords with the view I expressed in Cleveland Ambulance NHS Trust v Blane [1997] ICR 851, a case of which Mr Bowers QC reminded me during argument. Blane involved a complaint by an employee of the Trust that his employer had taken action short of dismissal against him contrary to s146(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), in not short-listing him for a management post because of his trade union activities. An Industrial Tribunal upheld his complaint and awarded him £1,000 compensation for injury to feelings. We upheld that award, made under s149(2) TULRCA, in terms identical to the provisions of s49(2) ERA.[20]Further, we note the provisions of s48(2) ERA:
"On such a complaint it is for the employer to show the ground on which any act, or deliberate failure to act, was done."
[21]Turning to the protection against dismissal by reason of making a protected disclosure, we have earlier set out the wording of s103A. This protection is placed within Part X ERA, headed Unfair Dismissal.[22]In cases of 'ordinary' unfair dismissal, dealt with in s98, it is for the employer to show that his reason for dismissal is one of the potentially fair reasons set out in s98(2) or s98(1)(b) (SOSR). As the Tribunal correctly observed (Reasons para 13) it is, for this purpose, for the Respondent employer to show the reason for dismissal.[23]However, s103A says nothing about the burden of proof. It is how the Tribunal approaches the burden of proof where conflicting reasons are advanced before it that forms the nub of this appeal. We shall examine that question later.[24]As to remedy for unfair dismissal, we have earlier pointed out that the statutory cap on compensation for ordinary unfair dismissal and automatically unfair dismissal under s98A does not apply where the reason is an inadmissible reason, for example, the s103A reason. A further distinction lies in the fact that the one year's service qualification for ordinary unfair dismissal protection (s108(1)) is disapplied in various instances of dismissal for an inadmissible reason (s108(3)), particularly the s103A reason (s108(3)(ff)). It is also the case, as mentioned previously, that the "detriment" protection for whistleblowers extends to workers; the unfair dismissal protection for s103A dismissals is limited to the narrower category of employees.[25]However, although compensation for unfair dismissal for a s103A reason is uncapped, it does not include compensation for personal injury or injury to feelings (contrasted with the remedies available for detriment suffered contrary to s47B). That is now clear from the House of Lords decision in Dunnachie v Kingston-upon-Hull City Council [2004] ICR 1052 . Proving the Reason for dismissal[26]Where the issue is simply one of ordinary unfair dismissal under s98 ERA the position is straightforward. It is for the employer to show a potentially fair reason for dismissal; if he fails to do so the dismissal is unfair. If he passes the 'reason' hurdle the Tribunal must then decide whether dismissal for that reason was fair or unfair, applying s98(4). At this stage, the burden of proof is neutral. Boys and Girls Welfare Society v McDonald [1996] IRLR 129 .[27]As to cases where the s103A reason is raised by the employee, if he has less than one year's continuous service, and is thus ineligible for ordinary unfair dismissal protection, he must establish that his protected disclosure was the employer's reason (or principal reason) for dismissal in order, in the first instance, to found the Tribunal's jurisdiction to entertain his complaint. Smith v Hayle Town Council [1978] IRLR 413 (CA).[28]If he has completed one year's service then, in our view, the position is still governed by the later Court of Appeal decision in Maund v Penwith District Council [1984] IRLR 24, a case to which Mr Robjant's Tribunal was specifically referred by Miss Downing in her written closing submissions below. In that case, following Mr Maund's dismissal, the Council contended that the reason for his dismissal was redundancy; he, on the other hand, contended that the reason or principal reason was his engaging in trade union activities, an inadmissible reason contrary to (now) s152 TULRCA.[29]In giving guidance to Tribunals as to how to approach these conflicting reasons for dismissal, Griffiths LJ put the matter in this way (paras 11-12):
"11. If an employer produces evidence to the Tribunal that appears to show that the reason for the dismissal is redundancy, as they undoubtedly did in this case, then the burden passes to the employee to show that there is a real issue as to whether that was the true reason. The employee cannot do this by merely asserting in argument that it was not the true reason; an evidential burden rests upon him to produce some evidence that casts doubt upon the employer's reason. The graver the allegation, the heavier will be the burden. Allegations of fraud or malice should not be lightly cast about without evidence to support them. 12. But this burden is a lighter burden than the legal burden placed upon the employer; it is not for the employee to prove the reason for his dismissal, but merely to produce evidence sufficient to raise the issue or, to put it another way, that raises some doubt about the reason for the dismissal. Once this evidential burden is discharged, the onus remains upon the employer to prove the reason for the dismissal."
[30]So far so good; assuming the employee has raised a prima facie case of an inadmissible reason for dismissal, the onus then rests on the employer to prove his reason for dismissal.[31]But what happens, as in this case, where the employer fails to establish the reason which he advances? Does it necessarily mean that the Tribunal is bound to conclude that the reason for dismissal is that advanced by the Claimant employee?[32]Miss Downing so submits. Drawing on Maund , she contends that at the second stage it is for the Respondent employer to satisfy the Tribunal which of the two competing reasons is the true one. It follows, she submits, that in finding a third and different reason to either contended for by the parties the Tribunal fell into error.[33]Moreover, she seeks to advance a separate argument, not raised below, for the proposition that, having rejected the reason advanced by the employer, the Tribunal was bound to conclude that dismissal was for the reason advanced by the Claimant. Mr Bowers objects to our permitting this new point to be taken for the first time on appeal, invoking the " Kumchyk " principle. We shall return to that objection in due course, but, having heard substantive argument on the point, we think that it is of considerable importance and we should express our opinion.[34]Miss Downing's starting point is the observation by HHJ McMullen QC in Boulding v Land Securities Trillium (Media Services) Ltd (UKEAT 0023/06/RN. 3 May 2006), a claim of detriment contrary to s43B ERA, that (para 24):
"24. Whistle-blowing is a form of discrimination claim (see Lucas v Chichester UKEAT/0713/04)."
[35]In Lucas , also a Judgment of HHJ McMullen QC, the Claimant did not have one year's continuous service. She contended that the reason/principal reason for her dismissal was the s103A reason. The EAT held that the claimant had made protected disclosures in good faith, contrary to the finding of the Employment Tribunal, and remitted the matter to the Tribunal to make a finding as to the reason for dismissal. Although there is discussion in the Judgment (para 39) as to the burden of proof, the issue in the present appeal did not arise for close scrutiny.[36]For completeness, we have also been referred to HHJ McMullen QC's judgment in The Trustees of Mama East African Women's Group v Dobson (EAT 0219 & 0220/05/TM. 23 June 2005) where observations are made as to the determination of the reason for dismissal in a s103A case (paras 16-19). Reference is there made to the test for the statutory tort of victimisation under the Race Relations Act 1976 (RRA) adumbrated by the House of Lords in Chief Constable of West Yorkshire Police v Khan [2001] IRLR 850, particularly para 29, where Lord Nicholls considered the meaning of "by reason that" in s2 RRA.[37]We note that the cases of Smith v Hayle and Maund are not referred to in any of the above three Judgments. We infer that the EAT were not referred to them. On the other hand, Maund was recently considered by Elias P in ASLEF v Brady [2006] IRLR 576 , see para 67. However, that was in the context of an 'ordinary' unfair dismissal case where the issue was whether the reason or principal reason for dismissal was gross misconduct (the ostensible reason) or whether it was an impermissible reason, that is, the union's hostility to the Claimant.[38]Seizing on HHJ McMullen QC's observation that whistleblowing is a form of discrimination, Miss Downing submits that it therefore follows that, in deciding the conflicting reasons issue, if the Tribunal reject the Respondent's reason they should apply the reverse burden of proof in discrimination cases discussed in the Court of Appeal Judgment in Igen v Wong [2005] IRLR 258 . This is the 'new point' raised in this appeal. She is not alone in adopting this approach. We note that in Bolton School v Evans [2007] IRLR 140 (CA), an alleged s103A reason case, reliance was placed on the Igen principles in the course of the Claimant's submissions. At para 20, Buxton LJ concluded - on the assumption that the Tribunal had to be satisfied that the dismissal was on no grounds whatsoever because of the protected disclosure (reflecting Igen stage 2) - that that requirement was satisfied on the material facts found by the Tribunal.[39]However, we do not read that part of the Judgment as constituting an endorsement of the Igen approach in a s103A case. On the contrary, it was unnecessary for the court to decide the point, because the facts satisfied the test contended for by the Claimant. Thus, as Counsel before us agree, the point now arises before us for determination (subject to the " Kumchyk " argument which we address below).[40]We shall express our considered view on the Igen question, regardless of the strength of the Kumchyk argument. In that sense we adopt the approach of the Court of Appeal in dealing with a point of importance on an application for permission to appeal. See, for example in this jurisdiction Apelogun-Gabriels v London Borough of Lambeth [2002] ICR 713 , para 24, per Chadwick LJ.[41]In our judgment there is a danger in taking a broad view that because the protection afforded to 'whistleblowers' is protection against a form of discrimination (more particularly, we think, victimisation) the statutory regime applied to those unlawfully discriminated against on grounds of sex, race, disability, religion, sexual orientation, or now age, can simply be grafted onto the provisions of the ERA under which the protected disclosure protection is provided.[42]First, we take the view that the differences between the parallel elements in the whistleblowing protection must be borne in mind. The wording of the protection against detriment (action short of dismissal) in s47B - the right not to be subjected to any detriment by any act (or omission) by his employer done on the ground that the worker has made a protected disclosure - finds some resonance in the classic definition of direct discrimination, e.g. less favourable treatment on the ground of sex or race. However, the "reverse burden of proof" introduced into the discrimination statutes, e.g. s63A Sex Discrimination Act (SDA), leading to the Igen guidance, has not been incorporated into Part IVA ERA. The burden of proof is provided in s48(2) ERA. There is no room to import some different formulation of the burden of proof from another statute.[43]Section 103A does not provide expressly for the burden of proof. We derive no direct assistance from the fact that in ordinary unfair dismissal the burden of proving a potentially fair reason for dismissal lies on the employer, but we think that it informed the Court of Appeal's guidance in Maund which we regard as binding on this EAT and Employment Tribunals. The alteration to the burden of proof in the discrimination statutes does not, in our view, alter that approach.[44]There are a number of reasons for that conclusion. First, whereas it is enough, for the purposes of a race, etc, discrimination claim that the Claimant's race was a significant factor in the less favourable treatment, s103A requires that making the protected disclosure was the reason or principal reason for dismissal. That is a set of facts known to the employer, or at least held by it, which causes him to dismiss the employee. Secondly, Parliament has chosen to distinguish between statutory protection for a whistleblower who is dismissed and one who suffers a detriment short of dismissal. No such distinction is drawn in the discrimination Acts. Thus, for example, discriminatory acts in Part I SDA are rendered unlawful under s6(2)(b) where an employer discriminates against a woman employee:
"by dismissing her, or subjecting her to any other detriment."
[45]Thirdly, we think it significant that compensation for personal injury and injury to feelings, available to a Claimant who has been discriminated against under the discrimination Acts (and Part IVA ERA), is not available to Claimants unfairly dismissed under s103A.[46]That said, we do derive some assistance from the discrimination case of King v Great Britain-China Centre [1991] IRLR 513 . That case was decided before the statutory reversal of the burden of proof discussed in Igen . It will be recalled that within the guidance there formulated by Neill LJ, where the employer's explanation for the treatment complained of was found to be inadequate or unsatisfactory, it was open to the Tribunal to infer that the discrimination was on the proscribed ground. Now, since the alteration in the burden of proof, the Tribunal is required to do so.[47]Reverting to the Maund test, applicable to s103A dismissals, we would formulate the approach to be applied on the findings made by the Tribunal in this case as follows:(1) Has the Claimant shown that there is a real issue as to whether the reason put forward by the Respondent, some other substantial reason, was not the true reason? Has she raised some doubt as to that reason by advancing the s103A reason?(2) If so, has the employer proved his reason for dismissal?(3) If not, has the employer disproved the s103A reason advanced by the Claimant?(4) If not, dismissal is for the s103A reason. In answering those questions it follows: (a) that failure by the Respondent to prove the potentially fair reason relied on does not automatically result in a finding of unfair dismissal under s103A; (b) however, rejection of the employer's reason, coupled with the Claimant having raised a prima facie case that the reason is a s103A reason entitles the Tribunal to infer that the s103A reason is the true reason for dismissal, but (c) it remains open to the Respondent to satisfy the Tribunal that the making of the protected disclosures was not the reason or principal reason for dismissal, even if the real reason as found by the Tribunal is not that advanced by the Respondent; (d) it is not at any stage for the employee (with qualifying service) to prove the s103A reason. New Point[48]We accept Mr Bowers's submission that the application of the Igen approach to determining the s103A reason question raises a new point of law on appeal. Even had we accepted Miss Downing's analysis, which we have not, we should not have permitted her to raise the point for the first time on appeal. See particularly the Court of Appeal approach in Jones v Governing Body of Burdett Coutts School [1988] IRLR 521, considered by Lindsay P in Gloystarne & Co Ltd v Martin [2001] IRLR 15 , para 20.[49]That said, as we have indicated earlier, we have found it necessary to consider the proper approach to the burden of proof in this case in order to direct the Tribunal in the circumstances considered below. The present case[50]Miss Downing has presented a detailed argument in support of the proposition that the Tribunal's finding that the Claimant was not dismissed for a s103A reason was legally perverse, recognising the high hurdle which she must transcend, applying the Court of Appeal guidance in Yeboah v Crofton [2002] IRLR 634 ; see especially per Mummery LJ, paras 92-95. We mean no disrespect to her argument when we simply say that she has not persuaded us that, applying the correct approach as we have stated it to be, such finding was an impermissible option.[51]However, we see greater force in her contention that the Tribunal has not demonstrated by their Reasons that they have correctly approached the burden of proof question. We have earlier set out the critical part of the Tribunal's reasoning at para 17. First, it is wholly unclear why the Tribunal were satisfied, having rejected the Respondent's professed (alternative) reason for dismissal, that the Respondent had disproved, as they must, the s103A reason advanced by the Claimant. Secondly, as Mr Bowers fairly recognised, the final sentence of para 17; "Accordingly, Dr Kuzel's claims under Section 103A of the 1996 Act are not made out." gives rise to the clear inference that in some way it was for the Claimant to prove the s103A reason. That, as we have endeavoured to explain, is an error of law.[52]At this point in the argument it is for Mr Bowers to satisfy us that such error is immaterial. That will be so if, based on the evidence and findings made, the Tribunal would inevitably have arrived at the same conclusion even if they had directed themselves correctly. See Povey v Dorset County Council (EAT 209/01. 10 October 2002. Mrs Recorder Cox QC presiding).[53]In our judgment, on the particular facts of this case, such a conclusion would not inevitably follow. Just as we have rejected the perversity argument advanced on behalf of the Claimant, so we reject Mr Bowers's submission that, properly applying the burden of proof, the Tribunal would inevitably find that the reason for dismissal was not a s103A inadmissible reason. Disposal[54]It follows that this case requires reconsideration by the fact-finding Employment Tribunal. We shall allow the appeal and order remission. Both Counsel realistically accept that the matter should return to the same Tribunal. We agree. Such a course is entirely consistent with the principles stated by Burton P in Sinclair Roche & Temperley v Heard [2004] IRLR 763 , endorsed by the Court of Appeal in Barke v SEETEC Business Technology Centre Ltd [2005] ICR 1373 .[55]Accordingly, we shall direct that the matter be remitted to Mr Robjant's Tribunal for further consideration, applying the burden of proof as we have stated it to be applied. That issue can be resolved on the basis of submissions only. No further evidence is required unless specifically directed by the Tribunal (in advance of the further hearing). In addition to determining the reason for dismissal, taking into account all the circumstances, the Tribunal must also make findings as to whether all or any of the three alleged protected disclosures do in fact fall within the s43A definition; in particular, whether the Claimant held the necessary reasonable belief that the disclosures were substantially true, an issue raised in the Respondent's written closing submissions below (see para 2.1-2.11).

Cited in 1 later judgment