“However, I think it clear that the effect of Mr Hick’s evidence in the passage which May L.J. has quoted was that the appeal panel thought that it would have been unfair to dismiss the employee on that ground. On that footing I do not see how, without the evidence to the absence of which Mr. Sendall has pointed, we can assume that the employer would have dismissed the employee on that ground, even if it had known that it could do so with impunity. Mr Brockley said that he did not suggest that in all circumstances an employer cannot rely on a different reason for dismissal when advancing a Polkey argument. 72. Mr Brockley contended that there was no evidence to support the conclusion of the ET that Mr Abbott would have dismissed the Claimant because their relationship had broken down. In Software 2000 Ltd. V Andrews[2007] IRLR 568 Elias P (as he then was) held at paragraph 54 of the principles emerging from the authorities: “(2) If the employer seeks to contend that the employee would or might have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, it is for him to adduce any relevant evidence on which he wishes to rely. However, the Tribunal must have regard to all the evidence when making that assessment, including any evidence from the employee himself. (He might, for example, have given evidence that he had intended to retire in the near future).” 73. Even if the ET, having heard evidence, were entitled to conclude that the Claimant would have been dismissed because of the breakdown in her relationship with Mr Abbott, they would still have had to consider whether a dismissal for that reason would have been fair and when it would have taken place had a fair procedure been used. Mr Brockley contended that faced with the possibility of dismissal because of a breakdown of the relationship the parties may have resolved their differences. When EJ Lewis asked Mr Abbott about reinstatement he replied “Maria would have to change her attitude.” 74. Accordingly it was submitted that the ET erred in deciding the Polkey issue. 75. Ms McCann submitted that the ET did not err in concluding that if a procedure appropriate to dismissal for a breakdown in relations between the Claimant and Mr Abbott had been used the Claimant would have been dismissed at the latest by23 June 2009 . 76. During the course of the hearing before us, Ms McCann handed up a copy of the statement of the Claimant which was before the ET. Counsel drew attention to four paragraphs which included the following: “98. [At the appeal hearing] … I felt uncomfortable meeting MA face to face, given his previous violent behaviour towards me. I did not shake his hand … 105. [On26 July 2009 ] I suggested that the sabbatical without pay would then be a viable option but MA said it would be difficult as HS had said I had not even acknowledged MA at the Appeal Hearing. I reminded him of his violent behaviour towards me and abusive conduct on the telephone.”
“I had hoped to be able to resolve matters amicably with Ms Schaathun following the breakdown of our relationship and instructed lawyers in or around December 2008 to try to effect an agreement in full and final settlement of all personal issues, employment matters and shareholding issues. Negotiations began in December 2008 and continued until April 2009 when it became clear that it was not going to be possible to reach an amicable settlement. I continued to pay Ms Schaathun throughout this period.” 77. Ms McCann submitted that there was evidence before the ET that the relationship between the Claimant and Mr Abbott could not continue on any level. There were only three employees in the Respondent company: Mr Abbott, the Claimant and an apprentice. Two pilots and an air hostess were employed in the associate company. The organisation was so small that it would not have been possible for the Claimant and Mr Abbott to work together. There was no basis for contending that the dismissal for a breakdown in relations between the Claimant and Mr Abbott would not have taken place by23 June 2009 at the latest. The Appeal from the refusal to review the Judgment of5 August 2011 78. Both counsel agreed that the Review Decision stands or falls with the appeal against the substantive Decision and Judgment of5 August 2011 . 79. It was submitted on behalf of the Claimant that given the nature of the application for review, it should not have been determined by EJ Lewis as, in effect, he was “being a judge and jury in his own cause.”
“…if there is a proper case, and I emphasise those words, that there may have been bias or an appearance of bias or a material procedural irregularity, the Tribunal might be thought to be judge and jury in its own case if it were the sole arbiter of fact.” 80. At paragraph 13 Langstaff P held that for the purposes of a Review Hearing after setting out the relevant facts the ET should decide whether the defects identified to it satisfied the Tribunal that there had not been a fair hearing. Counsel submitted that the refusal of the EJ to review the decision of the ET showed an unwillingness or failure to recognise the procedural unfairness of the hearing. 81. Ms McCann pointed out that the Claimant did not make allegations of bias in her application for a review of the decision. This came in 2013 when witness statements in support of the appeal were served. Ms McCann submitted that the complaints made of EJ Lewis did not satisfy the well known test of appearance of bias explained in Porter v Magill[2002] 2AC 357 paragraph 103 “The question is whether the fair minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased.”
“C. Look at the second and third line of the conversation… EJ We can spend a lot of time on this but he was not under oath and might not have known these conversations were being recorded and might not tell the truth to an ex-girlfriend. J. What is your case, that MA knew that you had reported him to HMRC MS: MA knew about that as he suggested I had been in contact with the auth. 9.1 MA was aware of that J. You are getting into difficulty, I asked if you have shown or told him about it. MS I had not told him or shown him them. He did raise them with me. He did contact me. J so someone unknown to you made a protected disclosure; by Are you aware of the ability of the ET to make costs for these proceedings. Do I need to warn you. J. is there evidence in support of 9.4 relating to HMRC alleging R put personal expenditure through co. a/cs Miss S? [MS reading bundle] MS: no ref to that in letter but ref to that in conversation J: so the answer to that is no. What you rely upon is what you say MA said in convos to you in tape recorded convos.”
“MS Spring 2009, in our convos you suggested that I had been in contact with HMRC MS: did we discuss gift with funds J: my understanding as you read ledger entry for any expenditure, need to get into CO., goes into Director’s loan a/c J: not unlike how self employed people manage their affairs, it is a way of dealing with CO a/c and personal a/cs mistakenly applied.”
“During cross-examination of your client directed by the judge I stopped cross-examination at which point Employment Judge Lewis took over cross-examination when he had completed.” 84. Whilst the notes of the proceedings before the ET show that the Claimant was able to ask Mr Abbott questions on the content of her telephone conversations with him they also show that the Claimant was relying on those transcripts as evidence that Mr Abbott was aware that she had complained to HMRC about his putting personal expenses through the company. However the notes of proceedings show that EJ Lewis curtailed this line of questioning and gave the Claimant a costs warning when she said Mr Abbott raised her reporting him to the HMRC. In light of the notes of the interventions set out and others it is unsurprising that the Claimant and her witnesses considered that the EJ was preventing her from relying on the transcripts. 85. The concern of the Claimant and her witnesses was reinforced by the admitted display of irritation by the EJ towards her. Whilst the EJ does not agree that he slammed down a file on his desk in annoyance with the Claimant as she and her witnesses assert, he wrote in his letter of18 June 2012 commenting on the allegation: “My recollection is that there was a moment during the hearing when regrettably I betrayed my frustration. The Claimant had returned to a point from which I had directed her to move on. I accept that I pushed away the open bundle which was lying in front of me, and said words to the effect that the Tribunal had powers to strike out for unreasonable conduct, which could include failure to obey the direction of the Tribunal. I did not throw or slam the bundle, as alleged. As I was sitting with members, I believe that I took care not to express myself in personalised terms (i.e. not to say that I had powers to strike out if my directions were not followed), but to refer to the powers of the Tribunal, working as a whole.” 86. Thus, according to the notes of proceedings taken by the Respondent’s legal advisors and the letter from the EJ, it appears that on two separate occasions he gave the Claimant a costs warning for alleging that Mr Abbott knew about a protected disclosure when she had not told him or shown him a letter about it and referred to his powers to strike out her claim when the Claimant returned to a point from which he had directed her to move on. In our judgment these examples of intervention in the Claimant’s cross-examination of Mr Abbott and the warnings of a costs and a strike out order together with an overt display of irritation may well have given an informed or objective bystander the impression of hostility towards the Claimant. However, we do not consider that those acts on their own cross the high threshold of appearance of bias although this came close. 87. The group of grounds of appeal brought together under Notice of Appeal ground 7.12, 7.5, 8 referring to Review grounds (a)(b) and (c) and Amended Notice of Appeal paragraphs 2.1, 2.2 and 4.2 all refer to the prevention or deterrence of the Claimant relying on transcripts of her telephone conversations with Mr Abbott. The transcripts she wished to rely upon were placed before us. We have considered them carefully. In our judgment they do not contain evidence supporting the contention that Mr Abbott was aware that the Claimant had made protected disclosures about his conduct to relevant authorities. Accordingly, although there is some force in the argument that the Claimant was deterred from pursuing cross-examination of Mr Abbott on the transcripts to the extent she would have wished, nothing we have been shown on appeal shows that she was thereby disadvantaged. Notice of Appeal: grounds 7.2 and 7.3 88. These grounds of appeal challenge the decision of the ET to strike out the allegations that the Claimant had made the protected disclosures listed by EJ Cowling as 9.2, 9.3, half of 9.4 and 9.5 to 9.8. They also challenge the observation by the ET that it became common ground that Mr Abbott had not been aware of the qualifying disclosures at the time of dismissal. What was accepted was that the Claimant had not told Mr Abbott about the disclosures she asserted that he knew or must have known about them. The ET erred in dismissing the Claimant’s claim that she was dismissed for making protected disclosures on the basis that she had not told Mr Abbott about them. 89. At paragraph 4.11 the EJ set out the matters which he considered to be in issue between the parties. It is recorded that, rightly, Ms McCann directed the ET to the elements of ERA section 43B and 43C. Counsel was not going to cross-examine on any element of section 43B but reserved the right to cross-examine on the good faith requirement of section 43C. The observation by the ET in paragraph 4.11: “This approach assisted the Tribunal to concentrate its task by focussing on what was relevant which, as the Judge pointed out to the Claimant, in light of Ms McCann’s concession, was the question of what Mr Abbott knew of the alleged disclosures at the time.” is ambiguous. Was Mr Abbott’s knowledge of the disclosures regarded as relevant to whether the disclosures were protected disclosures within the meaning of ERA section 43 or was such knowledge regarded as relevant to whether the reason for dismissal was making protected disclosures? The ET found in respect of disclosure to HMRC: “6.30.15… we have also found that Mr Abbott was not shown or told of the disclosure at any time material to the issues in this case. Therefore the disclosures did not become protected disclosures. 6.30.16 It follows on that ground alone that the Claimant’s claim underSection 103A Employment Rights Act 1996 did not become protected disclosures.”
“deal with this issue which was not before us, ie. as to the reason for dismissal.”
“It was necessary at the start of the hearing to stress to the parties that the Order of Judge Cowling of January 2011 set out exhaustively the issues which were before the Tribunal, and that no further issues would be permitted.”
“10. Were any of the above protected disclosures made? 11. If so, do any of those disclosures qualify for protection under section 43B ERA?” 12. If so, were any of these disclosures made in accordance with Section 43C ERA ie disclosure to an employer or other responsible person? [emphasis added] 13. And/or were any of those disclosures made in accordance with Section 43D ERA ie disclosure to a legal advisor? 14. And/or were any of those disclosures made in accordance with Section 43F ERA ie disclosure to a prescribed person? 15. In particular were any of those disclosures made in good faith? 16. Was the Respondent aware that the Claimant had made any of the above protected disclosures? 17. Was the reason, or if more that one reason the principal reason, for the Claimant’s dismissal on23 June 2009 that the Claimant had made any qualifying protected disclosure?”
“A claim or response may not be struck out unless the party in question has been given a reasonable opportunity to make representations, either in writing or, if requested by the party, at a hearing.” 93. It is apparent from paragraph 4.12 of the Judgment of the ET that striking out followed an “extensive intervention by the Judge in cross-examination” of Mr Abbott. This is also clear from the extracts of proceedings set out by counsel for the Respondent in her written submission for the Preliminary Hearing in the EAT. These show that EJ Lewis questioned the Claimant at length as she was cross-examining Mr Abbott. The questioning gives the impression that the EJ was cross-examining the Claimant. The following extract appears at paragraph 16 of the Respondent’s submission: “EJ: You are getting into difficulty. I asked if you had shown or told him about it. C: I had not told him or shown him them. He did raise them with me. He did contact me. EJ: So someone unknown to you made a protected disclosure to Mr Abbott but you didn’t know who or when. Are you aware of the ET’s ability to make costs for these proceedings – do I need to warn you? C: Mark Abbott knew that I had raised a concern about my tax return – there is evidence based on a clandestine tape recording not just about the tax return issues but also other issues. EJ: Do you accept that Issues 9.2, 9.3, 9.4, 9.6 and 9.8. Mr Abbott did not see, did not know about, was not copied into. Is there any reason why these claims should not be struck out? C: I’m grateful that you have told about the structure and the technicality and I do accept on a technicality or I have worded myself incorrectly then they cannot stand. Based on a misunderstanding. EJ: So Issues 9.1, 9.4 and 9.7. 9.4 in relation to the communication to Manches. You didn’t tell him about Manches. You have relied on pages 46-47 of the Supplementary Bundle which is a letter from Manches to Mr Abbott. Where in that letter is it stated that Mark Abbott was putting personal expenses through the Respondent’s accounts? C: Issue 9.4 is two-fold: HMRC and solicitors. EJ: Do you agree that the Manches part of the claim can’t go forward? C: Yes sir. EJ: That leaves us with 9.1, 9.4(HMRC) and 9.7. We are striking out the others which are dismissed as there is no evidence that Mr Abbott knew of these disclosures. The only protected disclosures going forward are 9.1, 9.4 (Insofar as it relates to the HMRC) and 9.7. And on 9.1 and 9.4, the Claimant’s case is that she did not copy of tell Mark Abbott about her communications with HMRC – correct? C: Yes sir.”
“EJ: Section 103A of ERA 1996 is different to some of the other law on unfair dismissal. A protected disclosure dismissal is unfair if the reason or, if more than one, the principal reason was the protected disclosures. And you seem to agree that he was not aware of the various letters in which you allegedly made the disclosures: page 120 to Darbys; 143 to the HMRC; the letter to Manches; the letter to the CAA; the letter to the Environment Agency. Do you accept that Mark Abbott didn’t know about these disclosures? C: Mark Abbott knew about the protected disclosures made to him about the alcohol issue and the Environment Agency issue.”
“the sole operative reason for the Claimant’s dismissal was not redundancy, but the breakdown in her relationship with Mr Abbott, and the irretrievable destruction of trust which arose from the events of December 2009.”
“… for the sake of completeness, that in the light of this finding, we would not, if the issue had been before us, have found that any protected disclosure was the sole or main reason for dismissal (as required by the language of Section 103A).” 101. If the ET had not erred by striking out the majority of the alleged protected disclosures, we may have upheld their decision to reject the claim of automatic unfair dismissal under ERA section 103A for the reasons set out in paragraph 7.9 of the Judgment. However, in light of our conclusion that the ET erred in law in a number of important respects in other decisions reached by them and having regard to our concern about the conduct of the proceedings and the overriding objective of dealing with cases justly, we set aside the decision of the ET rejecting the claim that the dismissal was unfair by reason of ERA section 103A. Since this decision has an effect on the conclusion reached by the ET as to the reason for dismissal, the finding that the reason for dismissal was the breakdown in the relationship between the Claimant and Mr Abbott is also set aside. Notice of Appeal: ground 7.6 102. Mr Brockley submitted that the ET erred in holding that the Claimant would inevitably have been dismissed at the time she was, in light of the reason for dismissal found by the ET, the breakdown of the relationship between the Claimant and Mr Abbott. In our judgment, on the findings made by the ET they were entitled to conclude that the termination of the Claimant’s employment was inevitable. The ET had concluded on the basis of the evidence before them that there was an irrevocable breakdown in the relationship between the Claimant and Mr Abbott. The Respondent was a small organisation with only three employees and their associate flight crew company was small and had reduced requirements for staff. At paragraphs 6.24 and 6.35 the ET set out extracts from letters from the Claimant’s solicitors of 11 February and13 May 2009 referring to the possibility of an agreement on termination. The extract from the letter of13 May 2009 concludes: “As the Separation Agreement purports to dismiss all of our respective clients’ claims against each other howsoever arising, our client is not willing to enter such an agreement at the present time.” 103. The ET held at paragraph 6.26: “there had been no resolution of any of the areas of dispute between the Claimant and Mr Abbott or the Respondent at the time of termination of the Claimant’s employment.”