Folkestone Nursing Home Ltd v Patel (Unfair Dismissal: Dismissal/ambiguous resignation) [2016] UKEAT 0348_15_0106

EAT
Folkestone Nursing Home Ltd v Patel (Unfair Dismissal: Dismissal/ambiguous resignation)
[2016] UKEAT 0348_15_0106 · 2015-06-29
[1]By a Judgment dated 29 June 2015 Employment Judge Reid, sitting in the East London Hearing Centre of the Employment Tribunal, determined claims of unfair and wrongful dismissal, which Mr Ramesh Patel (“the Claimant”) had brought against Folkestone Nursing Home (“the Respondent”). The Claimant and the Respondent have both appealed against that Judgment.[2]The Employment Judge held that the Claimant had been dismissed by the Respondent so that the Employment Tribunal had jurisdiction to entertain the claims. She also held that the award for unfair dismissal should be increased by 20% under section 207A of the Trade Union and Labour Relations Consolidation Act 1992 , by reason of a failure to comply with the ACAS Code of Practice. The Respondent appeals against those aspects of the Judgment. The hearing today is a Full Hearing of the appeal.[3]The Employment Judge went on to hold that the Claimant’s compensation for unfair dismissal should be limited in two ways. She held that there should be a reduction of 60% for contributory conduct. She also held that the Claimant did not take reasonable steps to mitigate his loss and if he had done so he would have obtained alternative employment at the same rate of pay by 31 December 2014. The Claimant appeals against those aspects of the Judgment.[4]The hearing of the Claimant’s appeal today is a Preliminary Hearing, ordered to see whether there are reasonable grounds for appealing and, if so, to case manage the appeal. It has been agreed that the Preliminary Hearing will await the result of the Full Hearing. The Background Facts[5]The Respondent operates a nursing home in Folkestone Road, East Ham. The Claimant was employed as a Healthcare Assistant from 23 January 2008. His contract of employment incorporated the Respondent’s employee handbook which contained a disciplinary procedure. The disciplinary procedure provided by section G as follows:
“The operation of the disciplinary procedure contained in the previous section is based on the following authority for the various levels of disciplinary action. However, the list does not prevent a higher level of seniority progressing any action at whatever stage of the disciplinary process.”
[6]It was then specified that for dismissal the level of authority for employees such as the Claimant was “proprietor”. There was also a section setting out an appeal procedure. This stated:
“4. The appeal procedure will normally be conducted by a member of staff not previously connected with the process so that an independent decision into the severity and appropriateness of the action taken can be made.”
Apart from paragraph 4 there was nothing which said anything about the scope of an appeal.[7]By letter dated 2 April 2014 the Claimant was dismissed for gross misconduct. There were two charges: falsifying residents’ records and sleeping on duty. The dismissal followed a hearing conducted by Mr Sam Ndlovu on 28 March 2014. He took the decision to dismiss. He was an external consultant. He was not, himself, the proprietor. The letter of dismissal informed the Claimant of his right of appeal. The Claimant exercised that right. He said he was sleeping during his rest break and that he had been unable to complete the daily record sheets because of an interruption. The appeal hearing took place on 8 May 2014. For reasons which are unclear, the Respondent then wrote to the Claimant saying that the appeal chairman had been changed. It was to be an external manager Mr Dhaval Shah.[8]On 24 June 2014, Mr Shah wrote to the Claimant. The operative part of his letter provides as follows:
“Having given the matter full consideration, I am now writing to confirm that the original decision taken by Sam Ndlovu is revoked for the following reasons: ● You were on an unpaid break when you were asleep and therefore were able to do with this time as you pleased as it was not deemed as working time. Therefore I do not believe that by sleeping in this unpaid hours break you had breached any company rules and procedures. I will therefore arrange for Payal Rajesh to contact you as soon as possible to arrange a date for you to return to work. You have now exercised your right of appeal under our procedures and this decision is final.”
[9]The Claimant, however, did not return to work. He said that the letter was incomplete since it did not deal with the allegation that he had falsified records. He said he was dissatisfied with the reasoning given in the letter. He said he was owed a full explanation. He brought his claim for wrongful and unfair dismissal. The Employment Tribunal Proceedings[10]These relatively simple facts have been overlaid with complexity largely due to the way in which the Respondent has dealt with the proceedings. It has, at all material times, been represented by an organisation known as Peninsula Business Services Ltd (“Peninsula”).[11]The Claimant’s ET1 claim form alleged that he was dismissed on 2 April 2014. The Respondent’s ET3 response form neither admitted nor denied this date. It said that he “did not return to the Respondent’s premises for work and neither did he confirm his intentions”. The narrative section of the form said that it had been decided to dismiss him and that on appeal the Respondent “decided to overturn its original decision to dismiss the Claimant”. It set out the subsequent history, it concluded as follows:
“9. The Respondent denies it unfairly dismissed the Claimant as alleged or at all or that it unlawfully or wrongfully dismissed him from his employment. The initial decision to dismiss the Claimant was based on evidence which was corroborated by other staff members. Upon appeal, the Claimant had been successful in being re-engaged and therefore the Respondent’s decision to offer him his original position stood. The Respondent believes that there was no detriment suffered as a result since the Claimant would have returned to his work place and paid for the time he was away. 10. The Respondent was disappointed that the Claimant did not take up its offer or re-engagement and has instead commenced legal proceedings against it for alleged unfair dismissal.”
[12]A Preliminary Hearing took place on 6 February 2015. The Respondent was represented by a consultant from Peninsula. On that occasion no issue concerning dismissal was identified. The issues which were identified presupposed that there was no dispute that a dismissal had taken place. The Respondent was still willing to reinstate or reengage the Claimant but he declined. The Respondent’s representative intimated that unfair dismissal might be conceded. The Employment Judge gave directions for a final hearing. Shortly afterwards on 17 February 2015, the Respondent’s representative sent an email conceding liability.[13]The Full Hearing was due to take place on 7 May 2015 but it was converted into a further Preliminary Hearing. It was at this hearing, in front of Employment Judge Reid that an issue concerning dismissal was identified. In her summary she said:
“3. It was identified that a possible issue arose as to the Tribunal’s jurisdiction to determine compensation on the unfair and wrongful dismissal claims as follows and despite the Respondent’s concession. When the Claimant submitted his claim form (marked as received by the Tribunal on 17 th July 2014) he had been dismissed with effect from 2 nd April 2014 but the Respondent had by letter dated 24 th June 2014 already notified the Claimant that his dismissal had been revoked on appeal and that he could return to work. The Claimant responded by letter dated 1 st July 2014 asking some questions and saying he was not satisfied with the letter he had received. Paras 5 and 6 of the Respondent’s ET3 also identifies further relevant correspondence. It was identified with the parties that an issue to be determined was whether there was a ‘live’ dismissal at the time of the Claimant’s presentation of his claim on which to base his claim for unfair and wrongful dismissal. Evidence of what was occurring between the parties between the dismissal date and the date of presentation of the claim would therefore need to be contained by both parties in their witness statements. … 10. It was identified that the issues to be determined were: 10.1. Was there a ‘live’ dismissal when the Claimant presented his claim to the Tribunal. If there was not, the Tribunal does not have jurisdiction to decide compensation for unfair or wrongful dismissal and those claims will go no further. 10.2. If there was a dismissal, what compensation is due from the Respondent to the Claimant taking into account the issues identified at para 5 above.”
[14]The Order and Reasons were sent to the parties on 8 May 2015, neither party appealed the Order. The Full Hearing came on before the Employment Judge on 18 and 19 June 2015. The Respondent was again represented by a consultant from Peninsula. The Claimant was represented by a lay representative. On the question of dismissal the consultant referred the Employment Judge to Roberts v West Coast Trains Ltd [2005] ICR 254 CA but he did not refer her to the more recent case of Salmon v Castlebeck Care (Teesdale) Ltd [2015] ICR 735 EAT, a case decided in December 2014, where Peninsula had also represented the employer. It is regrettable that he did not do so. The Employment Judge’s Reasons[15]The Employment Judge found that there was a dismissal. She gave two reasons for this conclusion. The first reason is found in paragraphs 10 and 11 of her Reasons. She said:
“10. Page 28 of the disciplinary procedure sets out the right of appeal but does not cover what happens if an appeal succeeds i.e. the possibility of a disciplinary sanction or dismissal being overturned or revoked on appeal or a different sanction being substituted. 11. I therefore find that although the right of appeal was contractual, the procedure itself did not cover what happened if an appeal succeeded and that the Claimant was not therefore contractually bound by any provisions in the disciplinary procedure about what the Respondent could do if an appeal succeeded, as there were none.”
[16]The second reason is found in paragraph 12 of her Reasons. She said:
“12. Further, I find that there was a lack of clarity in the letter at page 60A, said to be a revocation of the dismissal. Mr Shah who decided the appeal said that as far as he was concerned it was a ‘clean sheet’ for the Claimant but acknowledged that the second allegation (completing inaccurate diary entries for residents) was the more serious one; this second allegation was not mentioned in the letter at page 60A, leaving it hanging. Mr Shah’s oral evidence was that he had decided that the second allegation was not in fact so serious as first thought because, unlike some other employees, the Claimant had not ‘made up’ false entries of events which did not happen so Mr Shah decided in the light of the Claimant’s good record that it did not merit dismissal - but he didn’t tell the Claimant that. If the Respondent was going to revoke the Claimant’s dismissal that more serious allegation needed to be addressed so that the Claimant knew where he stood on it. I find that what the letter amounted to was an offer for the Claimant to return to work on an unspecified basis and left the significant issue of the second allegation undealt with, particularly as to what its future effect on the Claimant might be. It did not for example tell the Claimant that the second allegation too had been dismissed or tell him that no Disclosure and Barring Service (DBS) report had been made. There was no clarity as to the outcome of the appeal as regards the second allegation and as regards the basis on which the Claimant was to return.”
[17]She returned to and amplified these reasons in paragraph 31, where she said:
“31. Based on the findings set out above, although the Claimant’s right of appeal was contractual, the disciplinary procedure did not identify what the Respondent’s powers were when allowing a successful appeal against dismissal. The situation was not therefore one within paragraph 26 of Roberts v West Coast Trains Ltd [2005] ICR 254 , relied on by the Respondent, because the Claimant had not agreed to be bound by particular rules if an appeal succeeded. Even if that were not the case, the ‘revocation’ of dismissal was in any event too unclear and left out significant issues. For these reasons there was therefore a dismissal on 17 July 2014 when the Claimant presented his claims and the Tribunal therefore had jurisdiction in relation to the unfair and wrongful dismissal claims.”
[18]The Employment Judge also found that there should be an increase for breach of the ACAS Code of Practice. She said:
“22. I find that the Respondent breached paragraph 21 of the ACAS Code of Practice in terms of who took the decision to dismiss. Paragraph 21 of the ACAS Code effectively imports section (G) of the Respondent’s disciplinary procedure in terms of who had authority to dismiss the Claimant, it being Mr Singh the proprietor. In fact it was Mr Ndlova, an external consultant, who took the decision to dismiss not Mr Singh who was the authorised person, the footnote 5 on page 27 being brought into the policy in November 2014 after the Claimant’s dismissal. Although authorisation can be at a higher level than the nominated person (top page 27 of procedure) there was no-one more senior than Mr Singh. I do not accept the Respondent’s argument that Mr Ndlova, an external consultant, had authority to take the decision to dismiss as set out in the policy in force at the time.”
Submissions[19]On the Respondent’s behalf Ms Reece submits that the Employment Judge erred in law in concluding that there had been no effective reinstatement. She relies on Roberts v West Coast Trains Ltd and more particularly on Salmon v Castlebeck Care . She submits that these authorities show that the Employment Judge’s reasons for holding that the appeal did not revive were incorrect. Salmon showed that there was no requirement for the appeals procedure expressly to give the right to reinstate or impose any particular sanction. It was implicit that the appeal could overturn the dismissal and revive the contract. The decision did not need to be communicated at all for it to have the effect of reviving the contract, but in any event it was communicated in this case and the words were clear enough to make it plain that the dismissal decision had been revoked.[20]On the question of the section 207A uplift Ms Reece accepts that it would be a breach of the Code if the decision to dismiss was taken by a manager who had no authority to do so. She submits, however, that it was the Respondent’s case before the Employment Tribunal that Mr Ndlovu had that authority delegated by the proprietor and the Employment Judge has rejected that case without explaining why. I asked her what evidence there had been before the Employment Tribunal on this question. She was unable to tell me and there is no evidence on the question in the bundle prepared for the appeal.[21]On the Claimant’s behalf, Mr Matthew Jackson, who appears through the Free Representation Unit and has made admirable submissions on the Claimant’s behalf, first submits that the Employment Judge erred in law in determining the issue of dismissal at all. There had been an admission of liability in February. The Employment Judge was entitled to, and he would say bound to, accept that admission as determining the issue. It did not go to jurisdiction. The only issues in Part 10 of the Employment Rights Act 1996 which went to jurisdiction were those which were expressly said to bar consideration by the Employment Tribunal, such as time (see section 111(2)). He referred to Rule 21 of the Employment Tribunal Rules 2013 and to Segor v Goodrich Actuation Systems Ltd [2012] UKEAT/ 0145/11 for the proposition that the Employment Tribunal was entitled to accept a concession if that concession was clear, unambiguous and equivocal (see paragraph 11 in Segor ). The Employment Judge, he submitted, ought to have relied on the admission and should not have considered the question of dismissal at all.[22]In any event, Mr Jackson submits that the Employment Judge was correct. Nothing in Roberts v West Coast Trains Ltd stood in the way of the Employment Judge’s reasons. It was a case where the terms of the contracts provided for reinstatement. He accepts that Salmon v Castlebeck Care is a difficulty for him but he submits that insofar as this case provides that it is implicit in a system of appeal that the allowing of the appeal will revive the contract, the decision is wrong and per incuriam . He submits that the true position is to be found in Attorney General of Belize v Belize Telecom Ltd & Anor [2009] 1 WLR 1988 at paragraph 17 where Lord Hoffmann said:
“17. The question of implication arises when the instrument does not expressly provide for what is to happen when some event occurs. The most usual inference in such a case is that nothing is to happen. If the parties had intended something to happen, the instrument would have said so. Otherwise, the express provisions of the instrument are to continue to operate undisturbed. If the event has caused loss to one or other of the parties, the loss lies where it falls.”
[23]He further submits that that point, namely that it was implicit in the appeal procedure that the contract would revive, was not taken before the Employment Judge and it would be wrong on established principles to permit it to be taken now. He also submits that Salmon v Castlebeck Care can be distinguished. No contractual terms were established in that case (see paragraphs 1 and 20) where, as in this case, the employment terms were established and that made no relevant provision as to the consequences of an appeal.[24]On the question of the section 207A uplift, Mr Jackson accepts that it would be an error of law to find that an external consultant could never be authorised, but this was not the Employment Judge’s finding here. She found only that there was a departure from the Respondent’s processes in this case and her reasoning was sufficient. Discussion and Conclusions[25]I will begin with Mr Jackson’s submission that the Employment Judge ought not to have considered the question of dismissal at all because of the concession in the Respondent’s February email. I reject that submission for the following reasons.[26]Firstly an Employment Judge is not bound to act upon and give effect to a concession if the concession appears to be wrong or arguably wrong. An Employment Judge is entitled to allow a concession to be withdrawn and to list the matter as one for decision. This is particularly so if it goes to an essential element of the claim, such as the existence in law of an employment relationship or a dismissal or the application of a time limit.[27]Mr Jackson relied on Rule 21(1) and (2) of the Employment Tribunal Rules of Procedure 2013 :
“21. Effect of non-presentation or rejection of response, or case not contested (1) Where on the expiry of the time limit in rule 16 no response has been presented, or any response received has been rejected and no application for a reconsideration is outstanding, or where the respondent has stated that no part of the claim is contested, paragraphs (2) and (3) shall apply. (2) An Employment Judge shall decide whether on the available material (which may include further information which the parties are required by a Judge to provide), a determination can properly be made of the claim, or part of it. To the extent that a determination can be made, the Judge shall issue a judgment accordingly. Otherwise, a hearing shall be fixed before a Judge alone.”
[28]These paragraphs show that it will always be a matter for the Employment Judge to decide whether the fact that part of a claim is contested means that a determination can properly be made and a Judgment issued. It remains open to the Employment Judge to fix a hearing to decide an issue.[29]The principles which I have set out apply both to cases where there is an express statutory bar on the commencement of proceedings, such as where there is a time limit issue under section 111(2), and to cases where the existence of a particular feature is integral to the cause of action, such as, for example, employment status; see Radakovits v Abbey National plc [2010] IRLR 307 CA at paragraph 22 where valuable guidance is given to Employment Judges as to the approach to be taken in such cases. In paragraph 22 an example given by Elias LJ was a concession that the Claimant was an employee. Similar principles may apply to a concession relating to dismissal.[30]In this case, to my mind, the Employment Judge was entitled to list the question of dismissal for decision. No doubt in the vast majority of cases a concession of dismissal will be taken at face value by an Employment Judge. There will be no reason to do anything else. But, in this case the pleadings themselves showed that there was a live issue as to whether the dismissal had been revoked on appeal. Any Employment Judge, aware of Roberts v West Coast Trains Ltd would be alert to the point. She cannot be faulted in law for raising it.[31]Secondly, in any event, this decision was taken at the Preliminary Hearing in May. The Order listed the issue; the decision was not appealed. The Employment Judge cannot be said to have erred in law by proceeding on the basis of her own earlier decision to determine the issue. Good order required her to adhere to her earlier decision.[32]I turn then to the question whether the Employment Judge’s decision as to whether there was a dismissal was correct. I have concluded that it was not correct. I have concluded that the reasoning of the Employment Appeal Tribunal in Salmon compels the opposite conclusion. I do not think Salmon can be described as per incuriam and I consider, in any event, that it was correct.[33]A convenient starting point in the authorities is Roberts v West Coast Trains Ltd . Here Mummery LJ said the following:
“24. … (1) The employment contract of Mr Roberts included provisions in the staff handbook, in the onboard terms and conditions and in the procedure agreement, which entitled West Coast Trains to impose a range of sanctions when disciplining an employee for misconduct. That range could be imposed either at first instance or on an appeal brought by an employee who was dissatisfied by the first instance decision. (2) The range of sanctions included dismissal. That was the sanction imposed at first instance and was effective at the date when Mr Roberts presented his complaint of unfair dismissal to the tribunal. (3) The range also included reduction in grade or demotion. That was the decision ultimately taken on Mr Robert’s appeal. (4) The outcome of the appeal procedure initiated by Mr Roberts, and not withdrawn by him before the completion of the appeal procedure, was that the decision to dismiss should be replaced by a decision to demote. (5) The terms of Mr Roberts’s employment contract permitted West Coast Trains to impose such a sanction in place of the earlier decision to dismiss, so that they could retrospectively achieve a position where he was not dismissed for the purposes of bringing an unfair dismissal claim. (6) It was within the terms of that contract that the appeal decision was taken. It was not necessary to effect an express reinstatement to the position of chef previously held by him, nor was it necessary to make an offer to him to enter into a new contract in order to continue Mr Roberts’s contract of employment.”
[34]In Salmon the Employment Appeal Tribunal built upon the decision in Roberts . In Salmon the disciplinary procedure did not specify that reinstatement was an option on appeal. Langstaff J, the President, said the following:
“36. I therefore have no hesitation in this case in thinking that the tribunal was in error in looking for a separate decision, consequent on a successful appeal, that there should be “reinstatement”
. The word “reinstatement” itself may mislead because it may be seen in the light of one of the remedies available should a claim for unfair dismissal succeed before a tribunal. The word reinstatement here, I emphasise, is used in the sense of reviving the contract, the expression used in Roberts which, in my view, is more appropriate. I see no reason in principle why in any event it would be necessary for there to be an express revival or reinstatement. It must be implicit in any system of appeal, unless otherwise stated, that the appeal panel has the right to reverse or vary the decision made below. Where a decision is to dismiss, being the most draconian of sanctions, any success on appeal means that the decision is one in which dismissal does not take effect, though some lesser sanction might.”[35]In this case the disciplinary procedure did not specify that reinstatement would be the result of a successful appeal, but, it was to my mind, inherent in the provision of the appeal. I find it a helpful statement by Lord Hoffmann in paragraph 21 of the Belize Telecom case. He said:
“21. It follows that in every case in which it is said that some provision ought to be implied in an instrument, the question for the court is whether such a provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean. …”
[36]To my mind the decision in Salmon is an application of this principle. It simply spelt out what is inherent in the provision of a right of appeal unless, of course, there is some express provision to the contrary. It is true, as Mr Jackson points out, that no precise contractual term was before the Employment Tribunal or Employment Appeal Tribunal in Salmon , but the Employment Appeal Tribunal’s decision is a general application in cases where there is a contractual disciplinary procedure providing for an appeal. It would be implicit that the contract will revive if the appeal is successful. To my mind this case is a straight forward application of Salmon .[37]I was addressed by Mr Jackson on the possible consequences of a decision in this case for cases where the disciplinary procedure was not contractual, or cases where an appeal decision involved not straightforward revocation of the dismissal but the imposition of some other sanction. I do not think that I need address such cases in order to determine this appeal. The submission was also made by Mr Jackson that this point was not open to the Respondent because it was not argued below. I disagree. While Salmon was not cited, the submission was an inherent part of the argument before the Employment Tribunal.[38]The Employment Judge’s second ground was that the letter announcing the result of the appeal was unclear. I do not agree. It expressly stated that the decision was revoked. It was clear. The Claimant was entitled to start work again, his contract revived; he was entitled to back pay. In any event, so long as this was the decision, it did not need to be communicated. See Salmon at paragraph 41 where Langstaff J, the President, said this:
“41. Where the effect at common law, contractually, is that a decision has been taken to allow the appeal, it seems to me that it is a decision which, on the law as I have set it out by reference to Roberts , GS4 and McMaster , has the effect of reviving the contract, subject only to there being some contractual term or provision which prevents it. The judge may have understood it never to have been determined previously, but it seems to me that the citations from authority which I have set out above show that it is not necessary, in order for a successful appeal to have that effect, that there should be a communication of the result of the appeal.”
[39]It follows that the appeal will be allowed and there will be a declaration that the Claimant was not dismissed.[40]It these circumstances ground 2 of the appeal, concerned with the statutory uplift for breach of the ACAS Code does not arise. I would however comment as follows. It would be for the Respondent to put evidence before the Employment Tribunal that the Respondent’s proprietor had delegated the decision to dismiss. If there was such evidence then it would have been incumbent upon the Employment Judge to assess it and explain her reasons; but if there was no such evidence her decision would be adequately reasoned. In this case, in order to establish some want of good reasoning on the part of the Employment Judge, it was incumbent upon the Respondent to establish before me that there was some evidence on this point before the Employment Tribunal. It did not do so. For those reasons, however, as I have said, the appeal will be allowed on ground 1. Following an Application under Rule 34A(2)A[41]I have an application under Rule 34A(2)A by the Respondent for payment of the fees of £1,600 incurred in bringing this appeal to a Full Hearing. The starting point is that a successful party will generally be given the fees by the unsuccessful party (see Portnykh v Nomura International plc UKEAT/0448/13 and Horizon Security Services Ltd v Ndeze UKEAT/ 0071/14), but there is a discretion and in Look Ahead Housing and Care Ltd v Chetty UKEAT/0037/14 Langstaff J, the President, set out at paragraph 53 matters which might bear upon that discretion. He noted that the discretion would include making no award at all, though in circumstances in which an appeal has been partly successful, this would have to be carefully justified and is likely to be rare.[42]I have reached the conclusion that this is one of those rare cases where I should make no award for fees. Firstly, I have already set out in my Judgment how this appeal comes before the Employment Appeal Tribunal. The appeal was brought largely because, firstly, the point was not identified initially by the Respondent and, secondly, when the Employment Judge identified the point for the Respondent, it did not bring to the Employment Judge’s attention Salmon v Castlebeck Care , a case decided in 2014 where its representative acted for the employer. Add to that that it did not even after the Judgment draw it to the Employment Judge’s attention by way of reconsideration; add to that that I would not have found in favour of the Respondent on ground 2 of the appeal, and add to that that the Claimant, while he is now working, is a relatively low-paid worker for whom the sum of £1,600, or any significant order, would be a very substantial sum of money.[43]I think that I would have made no order on the application merely because of the first of those grounds, but when I add them all together I am quite sure that this is one of those rare cases where I should not make an order for the payment of fees.