London Sovereign Ltd v Gallon (Unfair Dismissal: Reasonableness of dismissal) [2016] UKEAT 0333_15_1305

EAT
London Sovereign Ltd v Gallon (Unfair Dismissal: Reasonableness of dismissal)
[2016] UKEAT 0333_15_1305 · 2016-05-13
[42]“ 42. The ET used its findings of fact to support its conclusion that, at the time of dismissal, the trust had no reasonable grounds for its belief about Mr Small’s conduct and therefore no genuine belief about it. By this process of reasoning the ET found that the dismissal was unfair. In my judgment, this amounted to the ET substituting itself and its findings for the trust’s decision-maker in relation to Mr Small’s dismissal.[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.[44]C. Separate and sequential fact finding 44. I agree with the EAT that the ET was bound to make findings of fact about Mr Small’s conduct for the purpose of deciding the extent to which Mr Small’s conduct contributed to his dismissal. That was a different issue from whether the trust unfairly dismissed Mr Small for misconduct. Contributory fault only arose for decision, if it was established that the dismissal was unfair. The contributory fault decision was one for the ET to make on the evidence that it had heard. It was never a decision for the trust to make. That makes it different from the decision to dismiss, which was for the trust to make. It was not the role of the ET to conduct a rehearing of the facts which formed the basis of the trust’s decision to dismiss. The ET’s proper role was objectively to review the fairness of Mr Small’s dismissal by the trust.[45]I am unable to agree with the EAT that the ET kept the issues and the relevant facts separate or that it avoided the error of substituting its own judgment about dismissal. Although the ET rightly warned itself against substitution and thought that it was not falling into that error, my reading of the reasons is that its findings of fact about Mr Small’s conduct seeped into its reasoning about the unfairness of the dismissal.[46]Mr Marsh spoke of his experience that ETs often structure their reasons by setting out all their findings of fact in one place and then drawing on the findings at the later stages of applying the law to the relevant facts. It is not the function of appeal courts to tell trial tribunals and courts how to write their judgments. As a general rule, however, it might be better practice in an unfair dismissal case for the ET to keep its findings on that particular issue separate from its findings on disputed facts that are only relevant to other issues, such as contributory fault, constructive dismissal and, increasingly, discrimination and victimisation claims. Of course, some facts will be relevant to more than one issue, but the legal elements of the different issues, the role of the ET and the relevant facts are not necessarily all the same. Separate and sequential findings of fact on discrete issues may help to avoid errors of law, such as substitution, even if it may lead to some duplication. Result[47]I would allow the appeal. The ET erred in law in its failure to apply the law correctly. On the issue of liability, the ET should have focused its fact-finding on the trust’s conduct of Mr Small’s dismissal. Instead, it concentrated on the conduct of Mr Small and it then used findings of fact in order to substitute its views for the grounds on which the trust actually formed its belief and acted when it took the decision to dismiss. The ET should only have used its findings about the conduct of Mr Small on the separate issue of whether there was contributory fault on his part. ”26. Separating out findings on different issues in the way Mummery LJ recommended is a good discipline, but it is not always easy to do, especially if reasons are given extempore. For example, facts and evidence that emerge in the course of a disciplinary investigation and process will often be relevant both to section 98(4) and to the primary fact finding required for other issues such as wrongful dismissal and contributory conduct. It will not therefore be at all surprising if an Employment Tribunal has in its Reasons a section that deals in common with facts and evidence that emerge in the course of a disciplinary investigation and process.27. However, it ought then to be possible to address in separate sections the issues required by section 98(4) and the issues raised by, for example, wrongful dismissal or contributory conduct. The former section will not contain the Employment Tribunal’s own conclusions as to whether the misconduct was established. It will concentrate on the section 98(4) questions, which, as I have said, involve finding the employer’s reasons and assessing them according to the standard of a reasonable employer. The latter section will be the place where the Employment Tribunal should consider the primary evidence called at the Employment Tribunal itself relevant to the question of whether the misconduct was committed. It will also be the place for the Employment Tribunal to make its own assessment of the evidence on that question, having regard to its own view of the credibility of the witnesses, reach an overall conclusion of its own.28. It is not in itself an error of law if the Employment Tribunal fails to follow a pattern such as this; but it is a good discipline, and it will avoid the Employment Tribunal slipping into substitutionary thinking. It is, in my experience, more and more common to find that the guidance in Small is followed by Employment Tribunals, although, as I have said, it is not possible to be prescriptive, and there will often be findings that are common to a section 98(4) exercise and a separate fact finding exercise.29. In the context of appeals concerning section 98(4), the Employment Appeal Tribunal must itself be cautious of substituting its own opinion for that of the Employment Tribunal. The Court of Appeal has emphasised this latter point in a number of cases. In Fuller Mummery LJ summarised the position as follows:[28]“ 29. The appellate body, whether the EAT or this court, must be on its guard against making the very same legal error as the ET stands accused of making. An error will occur if the appellate body substitutes its own subjective response to the employee’s conduct. The appellate body will slip into a similar sort of error if it substitutes its own view of the reasonable employer’s response for the view formed by the ET without committing an error of law or reaching a perverse decision on that point.[30]Other danger zones are present in most appeals against ET decisions. As an appeal lies only on a question of law, the difference between legal questions and findings of fact and inferences is crucial. Appellate bodies learn more from experience than from precept or instruction how to spot the difference between a real question of law and a challenge to primary findings of fact dressed up as law.[31]Another teaching of experience is that, as with other tribunals and courts, there are occasions when a correct self-direction of law is stated by the ET, but then overlooked or misapplied at the point of decision. The ET judgment must be read carefully to see if it has in fact correctly applied the law which it said was applicable. The reading of an ET decision must not, however, be so fussy that it produces pernickety critiques. Over-analysis of the reasoning process; being hypercritical of the way in which the decision is written; focusing too much on particular passages or turns of phrase to the neglect of the decision read in the round: those are all appellate weaknesses to avoid. ” 30. In this case, the Employment Judge stated the law correctly. She said she knew she must not substitute her own view for that of the Respondent. I have, however, come to the conclusion that she has fallen into this error. I have three main reasons for doing so.31. First, paragraph 20 of the Employment Judge’s Reasons is problematic. This passage, found within her findings of fact, intermingles considerations that are relevant to wrongful dismissal, where the Employment Judge had to make her own finding based on the evidence, and unfair dismissal, where the Employment Judge had to review the Respondent’s reasoning when it dismissed - at which point of course it did not have the benefit of the evidence at the Employment Tribunal. The first two sentences are relevant to wrongful dismissal but not unfair dismissal. The remainder of the paragraph is couched as a criticism of the Respondent’s investigation, the criticism primarily relevant to unfair dismissal yet stated in this paragraph without any explicit recognition of the “range of reasonable responses” test. It is difficult to be sure why the Employment Judge has interposed criticism of the Respondent’s investigation at this point in her Reasons given that she was making findings of primary fact. If she was minded to make her key finding of fact at this point, I would expect her to have stated her own reasons for reaching the finding of fact, for example whether she found the Claimant and Ms Molyneux credible, what evidence she found to support their respective accounts and so forth. There is, if she were keeping carefully in mind a separation between her task under section 98(4) and her fact finding task, no good reason for structuring paragraph 20 as she has.32. Secondly, in paragraph 36 the Employment Judge said:
“36. … As I have found that the respondent was mistaken in believing that the claimant was using his mobile phone, to dismiss him for that misconduct without a reasonable investigation, falls outside the range of reasonable responses. …” 33. The first part of this sentence is nothing to the point. If the Employment Judge had made no finding that the Respondent had been mistaken, the dismissal would still have been outside the range of reasonable responses if there had been no reasonable investigation. Conversely, it would still have been fair if there had been a reasonable investigation and a reasonable conclusion. The reference by the Employment Judge to her own finding at this point is problematic. 34. Thirdly, and to my mind crucially in reaching my conclusion, is the absence of any real process of reviewing the Respondent’s actual reasoning for dismissal. Section 98(4) required the Employment Judge to identify the Respondent’s process of reasoning and to say whether or not it fell within the band of reasonable responses. At this point, I accept a submission made to me by Mr Nuttman about the length of Ms Molyneux’s observation. This was plainly an important feature for the Respondent both at the disciplinary and at the appeal level. Ms Molyneux said that she saw the driver being distracted for a significant length of time before he drew close to her and she could actually see the mobile phone. The Respondent attached significance to this point; and arguably it would be unlikely that the Claimant would be distracted by two different things in succession, more likely that what Ms Molyneux saw at the end of the period of observation was what had been distracting the Claimant all along. The Employment Judge was not bound to accept that point of view, but section 98(4) required her to identify it, consider it and decide whether it was within the band of reasonable responses. The only real reference to this point, at the end of paragraph 31 of the Employment Judge’s Reasons, is not satisfactory. 35. Similar points apply to the question of investigation. Evidence was given on the Respondent’s behalf at the hearing as to why it did not wait for the telephone records and as to why it did not consider further investigation of the Claimant’s eyesight to be necessary. The Employment Judge’s task was to identify that reasoning and say why it was unreasonable. 36. For these reasons, therefore, I have concluded that the Employment Judge has fallen into the error of substitution. 37. I turn back, then, to the perversity grounds. As separate individual grounds, I would not uphold them. So far as telephone records are concerned, Ms Molyneux’s initial impression had been that the Claimant was “touching the mobile phone as if he was texting”
. If in fact he was texting and assuming he had not seen Ms Molyneux, one would expect his outgoing records to show a text within a few minutes afterwards. If the outgoing records showed no such text, it would have left the possibility that he was using the telephone in some other way, but it would have closed off what Ms Molyneux herself had regarded as a significant possibility. It was not perverse for the Employment Judge to say, applying the standard of the reasonable employer, that the telephone records should have been investigated. 38. Likewise, as to the use of reading glasses, this question is relevant to any purpose for which the Claimant might have been using the phone, which involved reading, including reading an incoming text. It is suggested that the point is irrelevant on the basis that the Claimant could read the instrument dials in the bus so he could read text on a mobile phone screen. I quite see that this is a point that the Employment Judge should have reviewed, since it was part of the Respondent’s reason for not investigating further, but to say that the Employment Judge’s conclusion was perverse is a different matter. The Employment Judge was entitled to take the view that it would have been reasonable to check whether, as the Claimant said, he needed glasses for most purposes for which one would use a mobile phone. 39. Finally, I come to the only question on the appeal that might affect the finding of wrongful dismissal. This, again, is the length of observation. Mr Nuttman suggests that it was perverse for the Employment Judge to reach the conclusion she did in the light of this evidence. I disagree. The Employment Judge saw and heard the witnesses and, for the purposes of wrongful dismissal as opposed to unfair dismissal, was entitled to reach her own conclusions on the facts. I see nothing to persuade me that her conclusion was perverse. It is of course well established that grounds of perversity are difficult to bring home because they are essentially factual grounds (see Yeboah v Crofton [2002] IRLR 634 CA at paragraphs 93 to 95). So, I do not think any grounds of perversity are made out. 40. This brings me, finally, to the question of Polkey . There is indeed in Hill a helpful summary of the Polkey principles. Langstaff J said: “24. A “ Polkey deduction” has these particular features. First, the assessment of it is predictive: could the employer fairly have dismissed and, if so, what were the chances that the employer would have done so? [Original emphasis] The chances may be at the extreme (certainty that it would have dismissed, or certainty it would not) though more usually will fall somewhere on a spectrum between these two extremes. This is to recognise the uncertainties. A Tribunal is not called upon to decide the question on balance. It is not answering the question what it would have done if it were the employer: it is assessing the chances of what another person (the actual employer) would have done. Although Ms Darwin at one point in her submissions submitted the question was what a hypothetical fair employer would have done, she accepted on reflection this was not the test: the Tribunal has to consider not a hypothetical fair employer, but has to assess the actions of the employer who is before the Tribunal, on the assumption that the employer would this time have acted fairly though it did not do so beforehand.” 41. It seems to me that the Employment Judge’s paragraph on this question is essentially unexplained. It is possible that she took the view that Polkey was only relevant to procedure in a narrow sense. If so, that would plainly be an error of law. If she considered Polkey in a wider sense, it is far from clear that she approached it in the manner set out in Hill , starting with the position of management and asking whether there was a chance that management, if it had investigated properly, would still have reached the same result. There is a dissonance between the Employment Judge’s finding in paragraph 31 that it “seems likely” that the Respondent would have reached the same conclusion as her and what amounts to a certainty in paragraph 39 that this would be the position. I would therefore have remitted the question of Polkey in any event, but, as it is, having decided that the Employment Judge fell into the error of substitution, I shall remit unfair dismissal as a whole to a freshly constituted Employment Tribunal.