CLYDE VALLEY HOUSING ASSOCIATION LTD v MS M MACAULAY [2008] UKEAT 0045_07_0304

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2008] UKEAT 0045_07_0304Case No Appeal No. UKEATS/0045/07Venue 52 MELVILLE STREET, EDINBURGH, EH3 7HF
Between
CLYDE VALLEY HOUSING ASSOCIATION LTDAPPELLANTMS M MACAULAYRESPONDENT
Before
Lady SmithDate 3 April 2008
[1]APPEARANCES For the Appellant Ms W Somerville (Solicitor) Messrs Brodies LLP Solicitors 2 Blythswood Square Strathclyde Glasgow G2 4AD For the Respondent Mr B McLaughlin (Solicitor) Messrs Thompsons Solicitors 16-18 Castle Street Edinburgh EH2 3AT SUMMARY Jurisdictional Points: 2002 Act and pre-action requirements Statutory grievance procedure. Modified procedure. Whether letter from claimant's solicitor set out the basis for her grievance. THE HONOURABLE LADY SMITH Introduction This case concerns compliance with the statutory grievance procedures.[2]This is an appeal against a judgment of an Employment Tribunal sitting at Glasgow, Chairman Ms FJ Garvie, registered on 20 August 2007 and holding that the Claimant had complied with the requirements of the modified grievance procedure, as set out in the Employment Act 2002 Sch 2, Part I, Chapter 2.[3]I propose to refer to parties as Claimant and Respondents.[4]Before the Tribunal and before me, parties were represented by their solicitors, Mr McLaughlin for the Claimant and Ms Somerville for the Respondents. Background[5]The Claimant was employed by the Respondents from June 2002 until March 2006, when she resigned. She claims that she was unfairly constructively dismissed and that she suffered discrimination on grounds of disability.[6]The parties were agreed that the modified grievance procedure applied in this case. The Claimant's statement of grievance was contained in a letter from her solicitor dated 17 May 2006 ('the grievance letter') which was sent to the Respondents' solicitor. It was in the following terms:
"We are instructed to represent our above named client Margaret MacAulay who was forced to resign from her employment at Clyde Valley Housing Association from the 16 March 2006. In the weeks and months prior to our client being forced to resign she was treated in the most oppressive, unfair and degrading manner by Clyde Valley Housing Association. Notwithstanding that our client's health had been badly affected by depression which she had battled through and still tried to perform her duties as she always had done in a conscientious and diligent manner Clyde Valley Housing Association through its managers harassed and intimidated Margaret MacAulay and thereafter embarked on a wholly unjustified and oppressive disciplinary investigation and process with no foundation or cause resulting in the complete breakdown of our client's physical and mental health. Notwithstanding her pleas and the representations made on her behalf Clyde Valley Housing Association carried on regardless and took no account of our client's disability by subjecting her to degrading and humiliating treatment and took no account or made any adjustment because of our client's disability. For the avoidance of doubt Margaret MacAulay was forced to resign from Clyde Valley Housing Association because her employer set out on a course of conduct not only likely to destroy our client's trust and confidence in her employer but did cause her to have her confidence and trust destroyed and in addition her health and wellbeing was destroyed by the course of conduct her employer embarked up on culminating in our client's forced resignation on 15 March 2006. This letter is written to comply with the requirements of the Employment Act 2002, Schedule 2, Part I, Chapter 2 and the requirements of the Employment Act 2002 (Dispute Resolution) Regulations 2004. For the avoidance of doubt this letter is not be used for any other purpose other than for the above statutory requirements."
[7]The disciplinary process referred to was one which had resulted in the Claimant receiving a warning.[8]Agreement to use the modified procedure was set out in a subsequent exchange of correspondence between the parties' solicitors. In their letter dated 5 June 2006 , the Respondents' agents posed a series of questions in response to the grievance letter. Those questions asked what acts of the Respondents were being founded on by the Claimant, what was the basis for the allegations contained in third, fourth and fifth paragraphs of the grievance letter and what was the course of conduct referred to in the fifth paragraph. They received no reply. The Respondents considered and responded to the grievance letter. In a letter dated 7 August 2006, to the Claimant's solicitor, the Respondents' solicitor advised:
"Unfortunately the Committee have been restricted in the investigations that they could conduct into the grievance due to Mrs MacAulay's refusal to set out in writing the basis of her grievance in response to my letter of 5 June 2006 as advised by you in our telephone conversation on 12 June 2006."
The Relevant Law[9]The starting point is to consider the provisions of s.32 of the Employment Act 2002 and Chapter 2 of its second schedule, all of which, as any reader of employment law decisions over the last few years will know, have provoked a sea of negative comment of Pacific rather than Caspian proportions.[10]They provide as follows:
"32. Complaints about grievances ……….. (2) An employee shall not present a complaint to an employment tribunal under a jurisdiction to which this section applies if – (a) it concerns a matter in relation to which the requirement in paragraph 6 or 9 of Schedule 2 applies, and (b) the requirement has not been complied with."
[11]Paragraph 9 of Schedule 2 applied in this case and it and the following paragraph provide:
" MODIFIED PROCEDURE Step 1: statement of grievance 9 The employee must – (a) set out in writing – (i) the grievance, and (ii) the basis for it, and (b) send the statement or a copy of it to the employer. 10 The employer must set out his response in writing and send the statement or a copy of it to the employee."
[12]So, unlike what happens in the standard procedure, where employer and employee must meet to discuss the grievance, the exchange between them in the case of the modified procedure is confined to writing. The employer will have no opportunity to talk to the claimant face to face about his grievance. Further, he must respond to it so he needs to know what the case is that he has to meet. Under the modified procedure, the only way he can find out about it is by reading what is said in the claimant's written grievance.[13]Turning to the statutory grievance procedures, the question of how much or how little is required for compliance with paragraph 6 of Schedule 2 to the 2002 Act has been considered in numerous authorities since the Act and its associated regulations ( The Employment Act 2002 (Dispute Resolution) Regulations 2004 ('the 2004 regulations')) came into force, the decisions in many of which turn on their own facts. The discussions contained in: Shergold v Fieldway Medical Centre [2006] IRLR 76 , Canary Wharf Management v Edebi [2006] IRLR 416 , Alexander and anor v Bridgen Enterprises Ltd [2006] IRLR 422 and City of Bradford Metropolitan District Council v Ms E C Pratt [2007] UKEAT 0391/06/0901 are of particular assistance. A number of points which are helpful for the purposes of the present case emerge from a consideration of these authorities: - a judicial consensus emerges that is perhaps best summed up by the words of the President (Elias J) in Canary Wharf at paragraph 15:
" These are complex and not happily structured regulations. " - the underlying purpose of the provisions is: "… to seek to prevent the matter going to an employment tribunal if possible by providing the opportunity for differences to be resolved internally at an earlier stage " ( Alexander at paragraph 34; see also Shergold at paragraph 26) - whilst it is important to refrain from approaching the question of whether or not an employee has complied with the regulations in an unduly technical way, it should also be borne in mind that if an employer receives a grievance document and fails to follow the statutory procedure thereafter, he is at risk of having to pay additional compensation if the employee subsequently succeeds in his claim before the Tribunal (2002 Act s.31) and it is not fair to expect him to take matters further unless he is aware that a relevant complaint has been communicated ( Canary Wharf at paragraph 24) - the grievance document does not require to be in any particular form or style. The statutory requirement is: 'simply that the grievance must be set out in writing.' ( Shergold at paragraph 30) and there is thus considerable flexibility about the form of the document ( Canary Wharf ; also see: Arnold Clark Automobiles Ltd v Richard Stewart & anor UKEATS/0052/05) - as regards the required content of the grievance document, there is a significant difference as between the standard and modified procedures ( Shergold at paragraph 30 ; Canary Wharf at paragraph 21). Under the standard procedure, the grievance document communicated at the first stage need not set out 'the basis' for the grievance. It is sufficient that the employee sets out the grievance in writing and if he does so then he will not be prevented from presenting a complaint to an Employment Tribunal by reason of the provisions of s.32(2) of the 2002 Act. Under the modified procedure, he requires to set out both the grievance and the basis for it at the first stage. - the grievance document requires to be in such terms that, on a fair reading of it, the employer can be expected to appreciate that a relevant complaint is being raised ( Canary Wharf at paragraphs 24 and 25); he needs to be able to understand from the grievance document what is the general nature of the complaint that is being made ( Shergold at paragraph 37). - as regards the question of what amounts to the 'basis' for the grievance, which requires to be set out in the grievance document itself under the modified procedure, it is that which the employee relies on to substantiate his complaint. It appears, accordingly, to be a matter of giving fair notice of what, evidentially, is being relied on by the employee who has the grievance; an explanation of how and why it is that they come to be making the complaint contained in the grievance document: "
The contrast between the standard and modified procedure highlights an important feature of the way in which the complaint must be made under the former. As we have noted, there is no obligation to set out the basis of the claim. It is enough, therefore, that the employee identified the complaint. The need to substantiate that with some evidence to justify it arises under the standard procedure at the second stage where the employee has to inform the employer what is the basis of the grievance. " ( Canary Wharf at paragraph 21; see also the discussion with regard to the statutory dismissal procedures in Alexander at paragraph 38 -39 which, similarly, treats the 'basis' of grounds for dismissal as being a matter of giving fair notice of the 'case' against the employee).[14]The City of Bradford case concerned an equal pay claim. The grievance letter was in short compass and the grievance was simply stated to be:
"I have been subjected to unlawful sex discrimination in relation to my pay and conditions. This is a written statement of grievance in compliance with statutory dispute resolution requirements. My grievance is that I believe I have been paid less than male employees of this authority for which work is broadly similar or of equal value. I believe I have been denied access to additional payments enjoyed by male colleagues."
[15]That letter was held not to satisfy the requirement to set out the basis for the grievance. In his judgment, HHJ Richardson helpfully sets out the sort of specification that would have been required for the claimant to satisfy that requirement. At paragraph 50, he said:
"… in my judgment this letter does not sufficiently set out the basis for the grievance. There is no indication of the type of male colleague in respect of whom the grievance is said to apply. There is no indication of the type of additional payment in respect of which the claim is made. There is no indication of the type of work in comparison with which equal pay is claimed. It would be quite impossible for the Council to respond usefully to this letter except (as it did) by asking for further information as to the basis of the complaint being made."
[16]Paragraph 52 of that judgment was referred to by the Tribunal in the present case. Judge Richardson was, however, dealing with a different and separate issue there, namely the question of whether or not the complaint being presented to the Tribunal was essentially or substantially the same complaint that had been aired in the grievance letter. He said:
"However, the claim form subsequently issued does not relate to the basis of grievance put forward by Mrs Pratt in November. It is a different grievance altogether. Mrs Pratt's representatives below and on appeal have been quite right not to argue that the November reply complied with step one of the MGP in relation to the claim actually made."
[17]Since the modified procedure is confined to written exchange, the interpretation of 'basis' as requiring reference to the evidence upon which the Claimant relies is not surprising. If it did not, how would the employer know what failure he was being charged with? If it did not, how would the employer know what enquiries to make? If he is not given fair and adequate notice of the case against him, how can he be expected to resolve the grievance, which is the statutory objective? The statutory objective is not that tribunal claims should ensue; on the contrary, the statutory objective is diversion from contentious litigation before employment tribunals towards agreed resolution of differences.[18]The Claimant's fallback position was to seek to rely on the provisions of regulation 7(1) of the 2004 regulations and I turn to these regulations at this stage but only to exclude them as irrelevant to the determination of the issue in this case. The provisions of regulation 7 include:
"(1) Where the grievance is that the employer has taken or is contemplating taking relevant disciplinary action against the employee and one of the reasons for the grievance is – (a) that the relevant disciplinary action amounted to or, if it took place, would amount to unlawful discrimination ……… the standard grievance procedure or, as the case may be the modified procedure shall apply but the parties shall be treated as having complied with the applicable procedure if the employee complies with the requirement in paragraph (2). (2) The requirement is that the employee must set out the grievance in a written statement and send the statement or a copy of it to the employer – …………. (b) ………………. before presenting any complaint arising out of the grievance to an employment tribunal."
[19]Thus, if the circumstances set out in these provisions apply, the claimant will be treated as though all the requirements of the relevant grievance procedure have been fulfilled even if they have not. That, however, raises the question of what those circumstances are. They are restricted. They are confined to those where the employee's complaint is that the employer has taken or is contemplating taking 'relevant disciplinary action' a phrase which is defined in regulation 2:
" 'relevant disciplinary action' means action, short of dismissal, which the employer asserts to be based wholly or mainly on the employee's conduct or capability, other than suspension on full pay or the issuing of warnings (whether oral or written)."
[20]Accordingly, when regulation 7 refers to 'disciplinary action' it is referring not to the start or progress of a disciplinary procedure but to the action that the employer takes by way of outcome following such a procedure. The Claimant's complaint in the present case did not however, relate to the outcome of the disciplinary procedure to which she was subjected. It was, as was confirmed by Mr McLaughlin in the course of his submissions, that she was treated in a discriminatory manner in the course of the disciplinary process.[21]Further, if the action taken was that the employer issued a warning, regulation 7 does not apply. In the present case, the action taken by the Respondents was to issue a warning. The Claimant cannot, in these circumstances, satisfy the requirements of regulation 7. The Tribunal's Judgment[22]The Tribunal considered the terms of the grievance letter and a paper apart that was attached to the Claimant's ET1 together and, at paragraph 63, stated:
"It seemed to me from a consideration of the terms of letter of 17 May 2006 … and the relevant part of the Paper Apart referred to above, that the letter of 17 May 2006 set out the 'basis' for the claimant's grievance."
[23]It found no assistance in the authorities:
"65. The only assistance the representatives could find in relation to the issue of the MGP where the issue that arises is what is consideration of what is meant by the word 'basis' was the reference to Hansard and the examples therein provided by Lord Falconer ………………."
[24]The judgment continues:
"The situation in the City of Bradford was, in my view, different from the present circumstances. In that case, it was held (see paragraph 52) that the claim form subsequently lodged with the tribunal service did not relate to the basis of grievance put forward by the claimant in November. Rather it was a different grievance altogether."
[25]At paragraph 69, the Tribunal also stated:
"It is not in dispute that the use of a solicitor's letter is competent as a means of articulating a grievance …….. I prefer Mr McLaughlin's submission that the claimant's representative set out the 'basis' for the grievances which she wished to raise with her employer in relation to the investigation and disciplinary process and that the claimant states the basis or foundation for that grievance by giving notice that it was the alleged unjustified and oppressive disciplinary process which caused her to resign her employment. In my view, that amounts to the claimant setting out the basis of her grievance."
[26]At paragraph 70, under reference to the claimant's case of constructive unfair dismissal, the Tribunal comments:
"I accept that the respondent may seek further specification of the evidence on which the claimant seeks to rely and that this may be a matter where Orders could be sought initially on a voluntary basis and, if necessary, by way of formal Orders from the Tribunal."
[27]At paragraph 71, under reference to the Claimant's case of disability discrimination the recognition of the likelihood of a call for further specification appears again:
"I accept that once again, it may that further specification will be sought by applying for Tribunal Orders in due course."
[28]At paragraph 74, the Tribunal considered and accepted an argument that the provisions of s.31 of the Employment Act 2002 were of assistance:
"74. Finally, I note that ………… in terms of Section 31 of the Employment Act 2002 non- completion of a statutory procedure provides a sanction to be applied by way of reduction of any award that a Tribunal may make in the event that a claim is upheld following a Hearing on the merits. It therefore seems to me that even if I was incorrect in accepting Mr McLaughlin's submission that the basis for the MGP had been set out sufficiently to ensure there was compliance with Section 32 of the Employment Act 2002 that there is a mechanism for a sanction to be applied in respect of any award that may be made to the claimant, assuming her claims were to be successful following a merits Hearing to enable a reduction of any award that a Tribunal might be minded to make."
[29]That approach to section 31 of the 2002 Act is advanced as being included in the reasons for the Tribunal concluding that the Claimant had specified sufficient information to provide a basis for her grievances. It is indeed the case that s.31 of the 2002 Act provides a sanction where an employee has failed to comply with the grievance procedure but it is wrong to view that as the Tribunal appears to have done here, namely as indicating that the tribunal has power to entertain a complaint to which the MGP applies as if the claimant has set out the basis for it in his written communication to the employer where he has in fact failed to do so. It is plain from the terms of s.32 of the 2002 Act that an employee cannot be permitted to present a claim to an Employment Tribunal if, where the MGP applies, he has not complied with all the requirements of paragraph 9 of Schedule 2 to the 2002 Act. It matters not that a failure to comply with the statutory procedures can be met by reducing compensation under s.31. That can only arise if there has first been compliance with the s.32 requirement. Section 32 imposes a gateway through which a claim must pass before it gets to s.31 considerations. The Appeal[30]Ms Somerville presented five principal submissions in support of her motion to set aside the judgment of the Tribunal. The Tribunal had misapplied or misconstrued the test for determining whether a claimant has complied with the MGP, as set out in the City of Bradford case, the Tribunal had incorrectly distinguished that case, the Tribunal had failed to have regard to it and to the guidance contained in it, the Tribunal had failed to apply the correct test when interpreting the word 'basis' as it appeared in the statutory provisions, and the Tribunal had misapplied s.32 of the Employment Act 2002 . She also anticipated and resisted the Respondents' submission that the Tribunal's determination was one of fact which was not susceptible to interference on appeal and that the circumstances fell within regulation 7(1) of the Employment Act 2002 (Dispute Resolution) Regulations 2004 .[31]Mr McLaughlin submitted that the Tribunal had not erred in law and submitted that its reasoning was correct.[32]The Respondents' submissions should be rejected: the City of Bradford case could be distinguished on its facts. He thought that the Tribunal did have regard to what was required to set out the basis of a grievance. He did, however, concede that s.31 of the 2002 Act was not relevant when determining whether or not a grievance letter set out the requisite basis.[33]He also submitted, under reference to Carciangia v The British Leprosy Relief Association UKEAT/0071/07 and, Alexander & Anor v Bridgen Enterprises that the Tribunal's determination was one of fact and it was not for this Tribunal to interfere with it. He submitted that the decision was not perverse (Ms Somerville did not present a perversity appeal). He submitted that the letter of 17 May 2006 had to be read 'in context', under reference to the cases of Alexander, Shergold, South Kent College v Hall UKEAT/0087/07 and Hansard (HL) 11 June 2002 col 151 – 152. The 'context' that he had in mind was what he referred to as a considerable amount of 'other documentation' including documents relating to the disciplinary process involving the Claimant. The suggestion seemed to be that the Respondents could have found more details of the Claimant's grievance in those documents. Mr McLaughlin stressed that a succinct few sentences were enough to set out the basis of a grievance relying particularly on the exchange between Lord Falconer of Thoroton and Lord Wedderburn of Charlton set out in Hansard . The grievance letter did not need to be in any particular form : Arnold Clark Ltd . He referred to passages in Draper v Mears Ltd UKEAT 0174/06 and Sahatciu v DPP Restaurants UKEAT/0177/06 which explain that the various parts of steps set out in the standard dismissal procedure do not require to be carried out in any particular order. It was not entirely clear why he considered that that discussion was of assistance when considering the issue that arises in this case.[34]Finally, Mr McLaughlin made a submission that even if the letter of 17 May did not set out the basis for the grievance, that did not matter because of the effect of regulation 7 of the 2004 regulations. Discussion and Disposal[35]The Tribunal required to have regard to the terms of s.32(2) of the 2002 Act. Had the Claimant presented a claim under a jurisdiction to which it applied? The answer to that question was clearly in the affirmative and so it then had to ask: did the claim concern a matter to which the requirement in paragraph 6 or 9 of Schedule 2 to the 2002 Act applied? The answer to that question was also in the affirmative and was that paragraph 9 applied. The Tribunal thus required to recognise that it could not entertain the claim unless the Claimant had sent the Respondents something in writing which set out both her grievance and the basis for it.[36]Whilst the Tribunal approached matters on the basis that there was no helpful authority, as I have indicated in the 'Relevant Law' section of this judgment, that is not so. Guidance was available from a number of different authorities including the City of Bradford case on which the Respondents relied in the course of the appeal. Unfortunately, the Tribunal appears to have overlooked the part of that judgment which contains guidance as to what is required to satisfy the requirement to set out the basis (at paragraph 50) and looked at a part of the judgment that was dealing with an issue which does not arise in the present case, namely that of whether or not there was a sufficient 'match' between the grievance and the claim presented in the form ET1. Also, although the Tribunal refers, in passing, to the passage in Hansard relied on by the parties, it appears not to have noticed that the examples there cited do actually involve it being envisaged that to provide the basis, it is necessary to give details. That passage, which is an exchange between Lord Falconer and Lord Wedderburn includes : (Column 152) "My noble friend Lord Wedderburn asked, "What does 'basis' mean here? Does it have a different meaning in relation to grievance procedures from what it has in relation to disciplinary proceedings?" He gave as an example that if the grievance was that the employee had not been able to exercise his union rights, what "basis" would have to be provided by the employee in support of the grievance? It is unwise for me to go too heavily into what the precise requirements might be in a particular case but, in the example given, what more the employer would need to know and the employee would need to convey is when the employee was prevented from exercising his rights; the circumstances – ………………… in which he was prevented – for example, not being allowed time off for union activities; confirmation that he is a union member; and what exactly happened………. Lord Wedderburn of Charlton: My Lords, I am grateful to my noble and learned friend. If he checks, he will see that I said that any worker who is faced with that kind of obstruction from the employer will say, "Last Tuesday you prevented me from exercising my right of carrying out trade union activities in the paint shop". What other basis for that complaint has to be set out? What has to be said that is extra to "Last Tuesday you prevented me from exercising my trade union activities in the paint shop and, of course, as a union member, I object to that?" What else has he got to say? Lord Falconer of Thoroton: My Lords, subject to confirming that he is a union member and identifying shortly what happened in the paint shop, nothing more would be required…."[37]Whilst Mr McLaughlin sought to make much of the reference in that exchange to the need being only for a short description, what is clear from it, and was available to the Tribunal, was that whilst a short statement was being envisaged, its content was seen as requiring to contain the answers to the essential questions that one would expect to arise in a grievance, namely:
'Who? What? Where? When? Why?'
[38]The Claimant's position was that the sending of the letter of 17 May amounted to compliance with paragraph 9. The Tribunal required to examine its terms to decide whether it did; the issue of whether they erred in doing so is a question of law not, as Mr McLaughlin submitted, a question of fact. The Tribunal was not entitled to take account of what might or might have been contained in any other documentation either produced for the Tribunal or previously in the possession of the Respondents, as Mr McLaughlin suggested was appropriate. The comments regarding the relevance of context in cases such as Alexander , Shergold and South Kent College are not authority for the proposition that it is possible to look outside the four walls of a grievance letter to see if the basis for it can be found elsewhere, as was suggested by Mr McLaughlin. That would be quite contrary to what the statutory provision requires. It was the letter and the letter alone that required to be examined.[39]The Tribunal also required to examine the letter without having regard to any further specification that might be acquired at a later date, such as from that which is contained in the ET1 or as the result of the issuing of a documents order by an Employment Tribunal. The whole point of the MGP is to seek to achieve an outcome whereby parties never have to have resort to the Tribunal. It cannot, accordingly, be correct to have regard to something that has happened or could happen in the Tribunal process as somehow allowing a lesser degree of specification to be given in the grievance letter. The Tribunal here wrongly, in my view, took account of what was in the paper apart to the ET1 and also of the availability, in due course, of documents orders as a way of acquiring further specification of the nature of the Claimant's complaint. In similar vein, as I have already noted, it wrongly considered that the provisions of s.31 should have a bearing on its conclusion as to whether or not the Claimant had complied with the MGP.[40]I turn then to the letter of 17 May 2006. In my view, it does not sufficiently set out the basis for the grievance. There are a series of assertions as to how whatever the acts, conduct and events are that are complained of can be characterised but there is no specification of them at all. The basics: who? what? where? when? and why? the Claimant has a grievance about, these matters are all missing. The evidential basis for the generalised complaint is just not there yet that is what, as I have already discussed, the Claimant required to do to comply with the MGP. Without such compliance, the Tribunal had no power to entertain this claim. Disposal[41]In these circumstances, I will pronounce an order upholding the appeal, setting aside the judgment of the Tribunal and dismissing the claim.