Secretary of State for Justice v Lown (Unfair Dismissal: Reasonableness of dismissal) [2015] UKEAT 0130_15_2807

EAT

Secretary of State for Justice v Lown (Unfair Dismissal: Reasonableness of dismissal)

[2015] UKEAT 0130_15_2807 · 2015-07-28

[36]If the answer to each of those questions is ‘yes’, the ET must then decide on the reasonableness of the response by the employer. In performing the latter exercise, the ET must consider, by the objective standards of the hypothetical reasonable employer, rather than by reference to the ET’s own subjective views, whether the employer has acted within a ‘band or range of reasonable responses’ to the particular misconduct found of the particular employee. If the employer has so acted, then the employer’s decision to dismiss will be reasonable. However, this is not the same thing as saying that a decision of an employer to dismiss will only be regarded as unreasonable if it is shown to be perverse. The ET must not simply consider whether they think that the dismissal was fair and thereby substitute their decision as to what was the right course to adopt for that of the employer. The ET must determine whether the decision of the employer to dismiss the employee fell within the band of reasonable responses which ‘a reasonable employer might have adopted’. An ET must focus its attention on the fairness of the conduct of the employer at the time of the investigation and dismissal (or any internal appeal process ) and not on whether in fact the employee has suffered an injustice. An appeal from the ET to the EAT lies only in respect of a question of law arising from the ET’s decision: see s.21(1) of the Employment Tribunals Act 1996.”26. That was a passage subsequently endorsed by a different division of the Court of Appeal in Teyeh v Barchester Healthcare

[2013] IRLR 387

(paragraph 47).

27. The potential danger of an ET substituting its view for that of the reasonable employer was recognised by the Court of Appeal in London Ambulance Service NHS Trust v Small

[2009] IRLR 563

, in particular at paragraph 43: “43. It is all too easy, even for an experienced ET, to slip into the substitution mindset. In conduct cases the claimant often comes to the ET with more evidence and with an understandable determination to clear his name and to prove to the ET that he is innocent of the charges made against him by his employer. He has lost his job in circumstances that may make it difficult for him to get another job. He may well gain the sympathy of the ET so that it is carried along the acquittal route and away from the real question - whether the employer acted fairly and reasonably in all the circumstances at the time of the dismissal.”

28. An example of such substitution was held to be disclosed by the ET’s expression of its own views on the quality and weight of the evidence in Foley v Post Office and HSBC Bank Plc v Madden

[2000] ICR 1283

; specifically, see the Judgment of Mummery LJ in the Madden case at page 1295A-B.

29. On the question of remedy an ET might reduce an award of compensation pursuant to section 123(6) of the ERA 1996 : “Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.”

30. In considering the question of contributory conduct, it is for an ET to have regard to the conduct of the employee not that of the employer; see per Langstaff P, at paragraph 19, in Steen v ASP Packaging Ltd

[2014] ICR 56

31. More generally, however, the compensatory award in an unfair dismissal case shall be such amount as the ET considers just and equitable in all the circumstances, having regard to the loss sustained by the complainant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer (section 123(1) of the ERA ). It is in carrying out that exercise that the ET may have regard to the potential Polkey limitation to or reduction in any award (see Polkey , HL). In so doing, the case law has made clear that it is unhelpful to distinguish between those cases where the unfairness was procedural and those where it was found to be substantive; see, for example, Lambe v 186K Ltd

[2005] ICR 307

CA.

32. On any of these issues where the challenge on appeal is one of perversity the high test to be applied is that laid down in Yeboah v Crofton

[2002] IRLR 634

. The decision in question must be almost certainly wrong, and the approach of the appellate court has to be that as laid down in Biogen Inc v Medeva Plc

[1997] RPC 1

HL per Hoffmann LJ at page 45:

[54]“ … The need for appellate caution in reversing the judge’s evaluation of the facts is based upon much more solid grounds than professional courtesy. It is because specific findings of fact, even by the most meticulous judge, are inherently an incomplete statement of the impression which was made upon him by the primary evidence. His expressed findings are always surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance (as Renan said, la vérité est dans une nuance ), of which time and language do not permit exact expression, but which may play an important part in the judge’s overall evaluation. It would in my view be wrong to treat Benmax [ v Austin Motor Co Ltd

[1955] AC 370

] as authorising or requiring an appellate court to undertake a de novo evaluation of the facts in all cases in which no question of the credibility of witnesses is involved. Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge’s evaluation. ” Submissions The Respondent’s Case 33. On the unfair dismissal case the Respondent relied on the approach laid down by the Court of Appeal in Graham , submitting that in respect of each stage of its decision-making on these issues the ET fell into the error of substitution recognised by the Court of Appeal in Small . The ET’s error was evidenced in the same way as had been apparent in Madden . In the present case the ET’s criticisms of Governor Hawkings really came down to preferring its own assessment of the evidence to his (see, for example, paragraphs 59, 61 to 62, 65, 81 to 94, and 101). As for the question of reasonable belief the closest the ET came to making any such finding was at paragraph 101, but that still did not actually engage with the question. Similar criticism could be made as to whether the Respondent had acted within the range of reasonable responses. Again, the ET failed to properly engage with the question. 34. Separately, the Respondent complained that the ET took into account irrelevant factors; specifically, Governor Hawkings’ view of Officer Gridley’s evidence and his decision to report his concerns to the Prison Governor, and also whether Officer Gridley had had the opportunity to comment on Mr Collier’s evidence. Officer Gridley was not the subject of the disciplinary hearing; there was no obligation on the Respondent to provide him with that opportunity. These points might not have mattered, but it was apparent that the ET took them into account when determining whether or not the dismissal was fair. 35. The next ground of appeal raised the question of natural justice. In this regard the Respondent relied on the Judgment of the EAT, HHJ David Richardson, in the case of King v Royal Bank of Canada

[2012] IRLR 280

and specifically at paragraph 77: “77. … it may be unfair … to reach an adverse conclusion on an issue that has not been raised in cross-examination. If so, the tribunal ought not to reach a conclusion adverse to the opposite party without raising the matter, hearing submissions and if necessary recalling the relevant witness. …” 36. In this case the ET had reached specific findings adverse to the Respondent; that it acted in bad faith (paragraphs 65, 83 and 93). Whilst the failure to put matters to a witness might not always give rise to an unfairness, here it was sufficiently serious as to have required these matters to be put. It was a sufficiently serious procedural failing to amount to an error of law, thus giving rise to the EAT’s jurisdiction under section 21 of the Employment Tribunals Act 1996 , and the EAT was obliged to consider whether a fair procedure was applied (see R (Osborn) v Parole Board

[2013] UKSC 61

[2013] 3 WLR 1020

, at paragraph 65). 37. On contributory fault the ET’s relevant findings were at paragraphs 102 and 103. Accepting that the focus had to be on the Claimant’s conduct not the Respondent’s, the ET had unduly limited its consideration of the evidence to solely that which was adduced before it from the only eyewitness to the incident, namely the Claimant. It apparently failed to consider all of the other evidence that was before it. 38. On Polkey the key paragraph in the Remedy Judgment was paragraph 16, where the ET apparently made a distinction between substantive and procedural fairness, taking the view that Polkey was not engaged as the dismissal was found to be substantively - not merely procedurally - unfair. That was an incorrect approach. Such a distinction has been held to be unhelpful, see, for example, O’Dea v ISC Chemicals Ltd

[1996] ICR 222

CA per Peter Gibson LJ at page 235B, and, on the rejection of the submission that Polkey only arose in procedurally unfair cases, see O’Donoghue v Redcar & Cleveland Borough Council

[2001] IRLR 615

, Lambe , and the EAT in WM Morrisons Supermarket Plc v Kessab

UKEAT/0034/13

at paragraph 42. Given the case law it was apparent that the ET’s finding on Polkey could not stand. 39. Finally, turning to the perversity challenge, the Respondent made the general observation that the conclusion reached by the ET was perverse. Specifically, it was incorrect at paragraph 94 to suggest that there was no documentary evidence as to why Mr Collier was called to give evidence. Further, as to how much time had been given to the Claimant’s evidence (see paragraph 56), it had been perverse for the ET to conclude he was asked very few questions when his questioning lasted over an hour. As for the findings of bad faith at paragraphs 65, 83, 89 and 93, these matters had not been put to the Respondent, and there was simply no evidence to support the conclusions reached. As for paragraph 88 this had to be a perverse conclusion, given that the entirety of the Respondent’s investigation was rooted in the particular circumstances of the incident. As the explanation for not calling Nurse Tobella (paragraph 89), it had been accepted by the Claimant that Nurse Tobella was not employed by the Respondent; further, he had not objected to her non-inclusion on the list of witnesses and the ET had been told that the decision regarding witnesses had been taken by Governor Tullett and not Governor Hawkings. Governor Hawkings had further explained in evidence that Nurse Tobella had no training in control and restraint and was also outside the cell at the relevant time, thus raising some question as to the relevance of her evidence. At paragraph 91 it was perverse to say there was no evidence that the Respondent had taken account of Nurse Tobella’s evidence, given it was part of the disciplinary investigation report. Paragraph 95 was simply factually wrong; Mr Collier’s emailed report had plainly been provided to the Claimant in advance of the disciplinary hearing. As to paragraphs 95 and 100, in finding that no consideration had been given to the Claimant’s past record or to alternative penalties, both findings were perverse given the evidence from the transcript of the disciplinary hearing and also the decision letters both for the original decision and on the appeal. The Claimant’s Case 40. By way of introduction Mr Davies made three broad points. First, there was a specific finding by the ET that Governor Hawkings was unreliable as a witness. There could be and was no appeal from that finding; specifically, see paragraphs 59 and 60. Secondly, the appellate court’s approach had to be as laid down in Medeva . Thirdly, the ET was entitled to make findings on the evidence as it was given by the witnesses; it was not required to search through the documents itself. Here the ET had reminded itself of the requirement not to substitute its view for that of the reasonable employer (paragraphs 75 to 77). Moreover, at each paragraph where the ET made findings of which the Respondent now complained, it had been careful to expressly remind itself of the test of reasonableness (see, for example, paragraphs 82, 84 to 86, 88 and 90 to 91). An appellate court should be slow to conclude that the ET, having had express regard to the appropriate test, had then ignored that test in reaching its conclusions. 41. On the question of natural justice the Respondent was aware of the case against it. It was aware that it had to establish the reason for the dismissal and that it bore the burden. As for the specific matters of which the Respondent complained these were plainly inferential findings made by the ET. They did not have to expressly be put to the Respondent’s witnesses. The Claimant had probed Governor Hawkings’ reasoning and approach in cross-examination, and the effect of the findings was that Governor Hawkings did not have a genuine belief. The ET plainly found Governor Hawkings’ responses in cross-examination unconvincing. 42. As for ground 6 and the irrelevant factors, the finding that Mr Collier was allowed to comment on Mr Gridley’s account but not the other way round was something the ET was entitled to have regard to; given that it plainly felt something fishy was going on, it was a relevant fact, a detail that went to support the wider picture. 43. Turning then to the remaining issues of perversity, the finding as to whether the Governor had asked the Claimant many questions was for the ET to assess given the evidence and submissions before it. Similarly, as for the finding whether the Respondent had had regard to the particular circumstances, there had been a lot of cross-examination on this point; again, it was a matter of assessment for the ET. The same point could be made on the decision not to call Nurse Tobella. There had been cross-examination and questions from the Employment Judge on this issue, and Governor Hawkings’ answers could legitimately be found to have been inconsistent and to have provided no - or no plausible - explanation for the failure to call her as a witness before him. As for whether the ET was entitled to make a finding that the Respondent had failed to properly consider the Claimant’s service record and the question of alternative penalty: even if there were references in the disciplinary hearing transcript and/or the dismissal and appeal decision letters as the Respondent contended, it remained open to the ET to conclude that the Respondent had not considered these issues in fact. There was certainly cross-examination on these points, and there were particular submissions by the Claimant to Governor Hawkings as to his past service, the detail of which was apparently ignored when the applicable disciplinary code made these matters that he was obliged to take into account. 44. On contributory fault, this was really a perversity challenge; the Respondent did not agree with the conclusion reached, but that was plainly a matter for the ET. On the Polkey appeal a similar point arose; that was ultimately for the ET. The Respondent in Reply 45. Simply because the ET had expressly referred to the correct test did not mean it had then applied it; see Small . As for what the ET had found, reading the Judgment as a whole, it was apparent that it had found the Respondent had acted in bad faith, hence Mr Davies’ submissions that the ET had seen something “fishy” going on. As for the consideration of alternative penalty, the cross-examination and re-examination of Governor Hawkings showed that he did have regard to the Claimant’s past service and to the possibility of alternative penalties. Discussion and Conclusions 46. The starting point in any unfair dismissal claim has to be the question whether the Respondent has made good its reason for the dismissal for section 98(1) purposes. In this case the reason relied on by the Respondent was conduct. There is no express finding by the ET on this question. I had initially thought that this might be because the point was not really in issue: the Claimant was not putting a positive case as to a particular alternative reason; he was entitled to put the Respondent to proof. The difficulty is, however, that the ET makes a number of findings suggestive of having arrived at the conclusion that the Respondent’s assertion as to a genuine belief in the Claimant having misconducted himself was not to be accepted, e.g.: “65. … I have been driven to the conclusion that Governor Hawkings’ approach was motivated towards a conclusion on his part that the Claimant had in fact assaulted the Prisoner. … 83. … Mr Collier was called to support a contention that the arm movements of the Claimant at the material time had involved an assault. … 93. … I have concluded that this was a case where the only acceptable outcome for the Respondent was a conclusion that the Claimant had assaulted the prisoner. 47. I thought it might still be possible to read these as findings of simply a closed management mind (rather than actual bad faith). I have been persuaded by both advocates, however, that the ET was indeed intending to go further and to make clear its finding that the Respondent, through Governor Hawkings, was acting in bad faith and the ET did not accept that he had a genuine belief in the Claimant’s misconduct in the way he said he had found; in Mr Davies’ words, that “there was something fishy going on”. 48. If that was the ET’s finding - and the parties seem to concur that it was - then I have some difficulty in understanding why the apparent rejection of the Respondent’s case on the reason was not made explicit. As Mr Davies has noted, however, this appeal is not pursued on the basis of inadequate reasons. 49. Mr Davies further says I need not be troubled by the fact that the case of having some improper motive, of acting in bad faith, was not expressly put to Governor Hawkings; that was not expressly the Claimant’s case, as such. Governor Hawkings’ approach and reasoning was, however, certainly explored in cross-examination; the ET was entitled to draw the inferences it did from those exchanges and conclude that Governor Hawkings was not a reliable witness. 50. I am not persuaded that is correct. It seems to me that this is a case where, as HHJ Richardson allowed in King , the Respondent should have been given the proper opportunity to deal with this case; it should have been put. The question is then whether that apparent procedural error vitiates the ET’s Judgment? 51. The difficulty is that this finding of bad faith - the apparent rejection of the Respondent’s assertion of an honest belief - was central to the reasoning. In my judgment, it does indeed render the conclusion unsafe. 52. Even if I were persuaded to take a different view and see this, in the round, as all part of the broad assessment of credibility that the ET was entitled to make, I consider this is a case where the ET fell into the substitution mindset, thus tainting its decision. 53. In saying this, I recognise the difficulties for ETs facing both claims of unfair and wrongful dismissal. The latter requires that the ET make its own assessment of the evidence; the former requires it to assess the approach adopted by others. Here, therefore, the ET was right to look at the CCTV evidence in reaching its decision as to the Claimant’s conduct for the purposes of the wrongful-dismissal claim and also the contributory-conduct issue. To take account of its assessment of that evidence - the tone and the manner of the Claimant’s verbal exchange with Prisoner B - on the unfair dismissal case, could only be a substitution of the ET’s view of that evidence for that of the reasonable employer.54. And I do not accept that the ET’s conclusion on this and other points is rescued by the references made to what a “reasonable employer” might or might not have done. First, because simply making reference to the touchstone of reasonableness does not avoid the substitution in fact. Second, because that is still not the test. The band of reasonable responses is not limited to that which a reasonable employer might have done. The question was whether what this employer did fell within the range of reasonable responses. In this case I consider the ET has seen itself not simply as the assessor of the band of reasonable responses (its role) but as laying down the only permissible standard of the reasonable employer.

55. Thus, on the issue of Nurse Tobella’s evidence (see paragraphs 82 and 89), the question for the ET was whether the decision not to call Nurse Tobella at the disciplinary hearing was within the range of reasonable responses of the reasonable employer in these circumstances; whether to proceed with the disciplinary hearing in the absence of her live evidence fell within that range. Given that the ET had found there was no proper explanation for taking this course and given the high stakes for the Claimant and the appropriateness of making sure all possible evidence was fully considered at the disciplinary hearing, I can see that an ET might take the view that it fell outside the range. The ET here did not, however, ask itself the question as I have set it out. Rather it apparently relied on its own assessment of the evidence to reach a conclusion as to what should have been before the disciplinary hearing (see paragraph 89).

56. Further, on the involvement of Mr Collier, the ET apparently accepted the Claimant’s case that it was inappropriate to call an expert witness when there were eyewitnesses to the event (paragraph 84). The question for the ET was, however, whether deciding to bring in expert evidence was within the band of reasonable responses of the reasonable employer. It was not whether the ET would itself have adopted that course. The ET might have considered it was inappropriate to call on expert evidence when there was eyewitness testimony from somebody with the expertise of Officer Gridley, but that was not the relevant question; the correct question was whether it was within the range of reasonable responses of the reasonable employer in these circumstances to consider it appropriate to call on expert testimony. The ET again erred in substituting its view in this regard. For completeness, in respect of the view taken of Officer’s Gridley’s evidence I should say that I am unable to see the relevance of Governor Hawkings’ reporting of Officer Gridley. What does the ET’s finding in that regard add? If it was meant to be suggestive of a finding of bad faith on the part of Governor Hawkings, there should have been a clear finding to that effect.

57. Returning to the question of substitution, in regard to Ms Russell’s evidence, in my judgment, paragraphs 61 to 62 clearly disclose that the ET relied on its own assessment of her evidence and the weight it was appropriate to give to it as compared to the other evidential material. Indeed, the ET goes as far as to suggest the nature of the enquiry the Respondent should have made; in so doing, it does not test that question against the range of reasonable responses. Further, (see paragraph 88) as to what account was taken of the circumstances in which this incident occurred, the ET again sees its view as providing the only correct standard of what the reasonable employer would have done rather than asking whether what the Respondent did was within the range of reasonable responses; it fails to allow for the possibility of a range rather than only one possible response (that of the ET).

58. In reaching my conclusion on these points I am satisfied that the ET here was not performing the entirely permissible function of assessing the range of reasonable responses but was, impermissibly, setting down one standard as being the reasonable employer’s response. The error in this case was in the ET substituting its view of the evidence and its own conclusions thereon for what it concluded the reasonable employer must have done and found. That error runs through all its findings and conclusions and irredeemably taints the decision.

59. Saying that, I do not find that the ET’s view on all points was necessarily perverse. The Claimant is right that some of the Respondent’s criticisms of the ET’s findings are simply its difference with legitimate findings of fact. That does not, however, rescue the overall Judgment on liability, and I am therefore bound to allow the appeal against that Judgment.

60. Having reached that conclusion, I do not think either the Liability or the Remedy decisions can stand.

61. Although unnecessary given my view on the Liability Judgment, if I had to reach a conclusion on the contributory fault question, I would be inclined to agree with the Respondent that the ET wrongly limited the evidence it took into account to that adduced before it in terms of the eyewitness evidence. As to Polkey , I would also be inclined to agree that the ET wrongly limited its consideration by not allowing that Polkey might be engaged when there was a finding of substantive unfair dismissal. Disposal

62. Given the view I have reached, the appropriate course is for this matter to be remitted for a fresh hearing. Having reached the conclusion that the matter must be remitted, I remind myself of the criteria set out in Sinclair Roche & Temperley v Heard and Anor

[2004] IRLR 763

. This was a relatively short hearing, and the upshot of my Judgment is that it must go back to start again. That being so, I consider the more satisfactory course is that the matter should be heard afresh. Whilst I have no doubt of this Employment Judge’s professionalism, I think it is a very difficult task to ask an ET to approach a case such as this again when it has fallen into, as I have found, the error of substituting the its views for that of the employer. That being so, it should go back, in my judgment, to a new ET for a re-hearing. Costs

63. Having succeeded on its appeals, the Respondent applies for its costs limited to the fees it has incurred; that is £1,600 in respect of each appeal, £3,200 in total. Mr Davies seeks to resist that application on the basis that whilst the Respondent may have won before the EAT, there was no guarantee that it would win below. I see that point but it does not address the fact that the Respondent had to incur the fees in question in order to succeed on the appeal. The power afforded by Rule 34A(2A) EAT Rules 1993 allows the EAT the discretion to make an award in respect of those fees where, as here, a party has succeeded in whole or in part on an appeal. The question arises as to why I should not make such an award here, the Respondent having been successful on both appeals.

64. I have heard nothing about the Claimant’s means to suggest that would be unjust to make such an order in this case; I assume that either he or those supporting him will be able to meet the award. I am not aware of any attempt by the Claimant’s side to avoid a Full Hearing by reaching an agreement with the Respondent or of any other step taken to avoid the necessity of incurring the fees in question. Rather, the appeals were resisted on all grounds. In those circumstances, it seems to me that the Respondent is entitled to its fees. What happens before the ET at the remitted hearing is a matter for it. The Respondent had to bring these appeals in order to get this decision; it has succeeded, and I am unable to see why it should not recover the £3,200 it incurred in fees.