Moore v Phoenix Product Development Ltd (UNFAIR DISMISSAL) [2021] UKEAT 0070_20_2005
EAT
Moore v Phoenix Product Development Ltd (UNFAIR DISMISSAL)
[2021] UKEAT 0070_20_2005 · 2021-05-20
[23]“23. The first question for us is to decide what the Tribunal were saying in paragraph 123 was the reason for its conclusion that the employer had not acted reasonably. We accept that it was saying that it was unreasonable not to have a further meeting or further discussion. Mr Shaw points out that discussion falls short of meeting but does involve some constructive communication between the parties.[24]The need for a further meeting and why a further meeting should be an essential aspect of fairness in the present case is, however, not spelt out by the Tribunal. By using the words: “There was no further meeting, no further discussion and that cannot be a fair dismissal”, the Tribunal appears to be stating a proposition of law. If so it was wrong to do so. The law is contained in section 98(4). Section 98(4) does in terms require a given or any procedure involving further meetings. That is not to say that in most contexts a decision would not be unfair if there were no such meetings. It is plain that what is unreasonable or reasonable may often depend upon such a meeting or meetings, but as we have already pointed out, all depends upon the particular circumstances of the case to which section 98 makes explicit reference.[25]As it was put during the argument the expression of opinion here looks rather like a knee-jerk reaction by a Tribunal. Here it was requisite that the Tribunal should have considered what purpose in fairness such a further meeting would have had. The Tribunal does not explain that. It says that there were no further meetings with the Claimant:
“At which he had an opportunity to put forward his position.”
But his position had already been to state that he would not return to work and that he had totally lost confidence in the employer. The Judgment is to the effect that there had been a mutual and irreparable breakdown of confidence. To have a further meeting to restate that position, which on the findings of fact would be all it could achieve, would be to require the parties to go through a meaningless charade simply for the sake of it. It is no part of a fair procedure to be conducted for the sake of it if the procedure is truly pointless. …[28]This was, therefore, simply a case in which there had been a recognised complete breakdown of trust and confidence between the parties. We cannot for ourselves see, and the Tribunal does not say anything to enlighten us, what the purpose of having a further meeting in these particular circumstances would be; Mr Shaw cannot help. We would simply emphasise that section 98(4) has to be applied sensibly and with regard to the substance of the case. It should never result in a Tribunal applying a standard approach to a case, certainly without considering whether that case fully and properly justifies such an approach. It invites the Tribunal to consider the circumstances of each case, which inevitably differ.”39. Mr Powell says that this is not a case in which the employer had decided at the time that a further hearing would be futile, as is apparent from the various written reasons given before the Tribunal for not granting an appeal. These included that it would take too long for the appeal process to be concluded and that it was based on undisclosed legal advice. As such, says Mr Powell, the Respondent’s case did not satisfy the requirements for fair procedure as set out by Lord Bridge in Polkey vAE Dayton Services Ltd [1988] 1 AC 344 .40. Insofar as the Tribunal based its conclusions on futility on the loss of trust and confidence, Mr Powell invites me to note that only two Board members had expressed a loss of trust and confidence in the Claimant prior to the dismissal, the other two had not. The Tribunal’s reliance on Jefferson was misplaced because that was a case in which there was a mutual breakdown in trust and confidence, whereas in the present case there was no such finding; indeed, the Claimant’s conduct, submits Mr Powell, was such that he wished to continue to serve the company to sell the product which had become his life’s work. Furthermore, it is wrong in principle, says Mr Powell, to rely on the absence of trust and confidence as providing any sort of justification for the absence of an appeal. Any gross misconduct dismissal will involve a loss of trust and confidence, and yet the absence of an appeal against such dismissals will only be justified in exceptional cases.41. Mr Stilitz submits that, given the Claimant’s own role in the destruction of trust and confidence and the relatively small size of the company, this was an exceptional case in which an appeal would have been “truly pointless”. There was, in any case, no-one more senior to whom he could appeal. The futility of an appeal was highlighted by the wholly unrepentant stance of the Claimant, which showed no signs of abating even after the dismissal.42. Both Counsel referred me to the case of Perkin v St George’s Healthcare NHS Trust [2006] ICR 617 .[60]“ 60. I did not understand Mr. Langstaff to argue that in a given case a breakdown in confidence between an employer and one of its senior executives; (a) for which the latter was responsible; and (b) which actually or potentially damaged the operations of the employer's organisation (or which rendered it impossible for the senior executives to work together as a team) was outwith section 98 as SOSR and therefore could not result in an employer fairly dismissing the employee whom the employer deemed responsible for that state of affairs. Indeed, I think Mr. Langstaff was minded to accept that the facts found by the Tribunal could have amounted to SOSR. In my judgment, that concession was both correct, and realistic. Standing outside the case for a moment, it seems to me that it must be possible for an employer fairly to dismiss an employee in the circumstances set out in the earlier part of this paragraph, provided always the terms of section 98(4) are satisfied.[61]The real thrust of Mr. Langstaff's argument, as I understood it, was that the Tribunal erred fundamentally by treating the case as being one of conduct within section 98(2)(b). Mr. Perkin had been summarily dismissed, when his behaviour manifestly was not capable of being described as gross misconduct. Secondly, the Tribunal's treatment of the case as one of conduct had led it to adopt the wrong approach to fairness, and into error both on the issue of the Polkey reduction and contributory fault.[62]The success of the first limb of Mr. Langstaff's argument seems to me to depend critically on whether Tribunal was wrong to categorise the reason for dismissal as conduct as opposed to SOSR. Whilst it is, of course, important that an employee should know clearly why he or she has been dismissed, and whilst I see the force of Mr. Langstaff's criticism of the "conduct" analysis, particularly in relation to the question of what constitutes gross misconduct or otherwise warrants summary dismissal, I find myself on this part of the case in complete agreement with the reasons given by Sedley LJ when refusing permission to appeal on paper, and do not think I can better his succinct way of expressing them: It is a fair criticism of the ET that in the course of 65 pages of reasons they appear in certain respects to have lost sight of the wood for the trees. But their findings seem to me to make the Polkey answer ineluctable. Although capability might have been an appropriate statutory category for their findings, it was not the only one. Before the proceedings were initiated, Mr. Perkin had conducted himself unacceptably towards colleagues and others. I accept that if all that was at issue was his aggressive reaction to the proceedings, the decision might be unsustainable. But the reaction amounted to corroboration of the accusation that he had already shown himself near-impossible to work with (rather than for). For my part, however, I would think this was an "other substantial reason" case: an employee in a senior position who could not or would not work harmoniously with colleagues and outsiders with whom a harmonious relationship was essential. While the absence of a warning and guidance is relied on only, as I understand it, on the premise that this was a conduct case, I would have thought it capable of having a bearing on both of the two grounds founded on by the ET. But their view, and that of the EAT, was evidently that Mr. Perkin was too entrenched in his attitude to respond positively…...” Mr Stilitz submits that the circumstances of this case are ‘on all fours’ with those described in Perkin . Discussion43. Section 98(4) of the 1996 Act provides that whether a dismissal is fair or unfair depends on whether, in the circumstances, including the size and administrative resources of the employer’s undertaking, the employer acts reasonably or unreasonably treating it as a sufficient reason for dismissing the employee. Although an appeal will normally be part of a fair procedure, that will not invariably be so, as to take that fixed approach would be to disregard the clear terms of the statute, which dictate that the circumstances are to be taken into account. Here, the relevant circumstances included the fact that the Claimant was a board-level director and employee; that the Respondent was a relatively small organisation with no higher level of management; that the Tribunal had found that the Claimant himself had brought about an “irreparable breakdown” in trust and confidence (para. 125); that this was considered to be “destructive”, destabilising and a “drag-factor” for the company (para. 114); that he was unrepentant about his conduct and attitude (para. 127); and that he had not shown any sign that he was likely to change (para. 128).44. In my judgment, it was open to the Tribunal to conclude, in these circumstances, that an appeal would have been futile; this was not the kind of organisation where the Claimant’s shortcomings and the consequent threat to the Respondent’s future could be addressed through some sort of re-training programme, or where different managers might be found to work with him more effectively. In fact, the conclusion of the independent reviewer, Mr Bicket, was that the Claimant would “sabotage any CEO coming into the business” (see para. 39). The fact that the loss of trust and confidence was only manifest in two of the directors at the time of dismissal does not advance Mr Powell’s case; it is clear that by the time of the decision to dismiss, four of the directors had come to that view, with only the Claimant dissenting. The loss of trust and confidence amongst his fellow directors was, therefore, complete.45. In any case, the decision in Jefferson is not to be read as providing a checklist of items that must be present before dismissal without an appeal can be regarded as fair. That, too, would be an approach that disregards the plain statutory imperative to consider the particular circumstances of each case. Thus, it is nothing to the point that, unlike the situation in Jefferson , the Claimant in this case had not himself lost trust and confidence in the employer. An appeal might be futile even where the loss of trust and confidence only resides in the employer. Mr Powell’s reliance on the opinion of Lord Bridge in Polkey is also, it seems to me, misplaced. The passage on which he relied made it clear that the steps set out were those that one would “normally” expect to see in a fair procedure. The House of Lords was not thereby seeking to dictate what must apply in every case, and nor could it have done so as that would be, once again, to disregard the plain terms of s 98 (4).46. Mr Powell’s further argument is that the loss of trust and confidence cannot justify an absence of an appeal because that would mean that an employer could deny the right of appeal in any dismissal for gross misconduct where loss of trust and confidence is inevitable. Once again, it all depends on the circumstances. In a different context, if a finding of gross misconduct is overturned on appeal to a higher level of management, there may well be scope for rebuilding trust and confidence. That possibility was not present here, given the seniority of the Claimant; his stated intransigence; and the nature of the misconduct in question.47. The Tribunal here expressly did something that the tribunal in Jefferson did not; it explored whether an appeal would serve any purpose. There was no “knee-jerk” response to the absence or presence of the step that is normally found in most dismissal procedures. Instead there was detailed consideration, over a number of paragraphs, as to whether this was one of those cases in which the Respondent would be acting reasonably in not providing an appeal. In concluding that the Respondent did act reasonably, the Tribunal did not err in law. Ground 2 therefore fails and is dismissed. Ground 348. Mr Powell submits that the Tribunal failed to take account of the Claimant’s Supplemental Witness Statement, in which he explains why he would have exercised his right of appeal. Furthermore, he submits that the Tribunal’s reason for concluding that the Claimant would not have appealed (namely, the fact that he did not appeal against the grievance decision) is misplaced because the grievance decision came over a month after he had presented a claim to the Tribunal and the situations were not comparable.49. As Mr Stilitz points out, this Ground of Appeal is concerned with a finding that is, in effect, obiter , given that the Tribunal did go on to decide that the absence of an appeal did not render the dismissal unfair. In any event, it seems to me that the finding that the Claimant was unlikely to have exercised the right of appeal was one that the Tribunal was entitled to reach. As a senior employee of the Respondent he could be expected to pursue an appeal if that was his choice, notwithstanding the absence of any reference to an appeal in the termination letter. The letter did not expressly exclude such a right. The Claimant’s failure to be proactive about an appeal provides some support for the Tribunal’s conclusion that he would have been unlikely to appeal even if it had been mentioned in the dismissal letter. The Claimant’s Supplementary Statement provides that he could have responded to the dismissal with an appeal if he had been given reasons for dismissal. However, that does not provide unequivocal evidence as to what he would have done in the circumstances.50. The main point made by the Claimant in the statement, so far as is relevant to this Ground of Appeal, is that if he had had a right of appeal, he would have made it clear that he would have accepted a lower-ranked position, if that meant he could have stayed in the organisation. Whilst the Tribunal did not address that item of evidence expressly, it clearly did not accept that the Claimant was capable of changing in that way. The fact that he still referred to the Respondent as “my company”, even after being removed as CEO and was found to have been unable to “let go of the reins”, supports that observation. Ground 3 of the Appeal therefore fails and is dismissed. Ground 451. This Ground and also Ground 5 would only arise if the Claimant had succeeded on Grounds 1 to 3. As he has not done so, I can deal with these Grounds very briefly. The submission here is that the Tribunal failed to direct itself in accordance with the case of Andrews v Software 2000 Ltd [2007] IRLR 569 . In particular, it is said that the Tribunal failed to consider evidence in the Claimant’s Statement that he would have accepted demotion rather than lose his employment. Had that evidence been taken into account, submits Mr Powell, the Tribunal could not reasonably have concluded that dismissal was inevitable, such that a 100% Polkey reduction was appropriate. He also submits that there is no indication from the Judgment that the judge gave any consideration to the numerous allegations of procedural and substantive flaws and all we have is an unreasoned conclusion without any real explanation. Furthermore, it is said that the Tribunal did not appear to have in mind the fact that the burden of establishing a Polkey reduction lies with the employer.52. I do not accept those submissions. As I have already mentioned, the Tribunal made a clear finding about the Claimant’s unrepentant stance and the lack of likelihood of change on his part. That does not bode well for the Claimant’s continued employment, given the reasons for the breakdown in relations. This is not a case that involves analysis of complex or subtle issues of fact which might have a bearing on the likely outcome had a different procedure been followed. The situation here is one of an irreparable breakdown in relations and an unrepentant employee. In those circumstances, it seems to me that the Tribunal could reach the conclusion that it did without having to reiterate in terms the particular factors which led it to that decision.53. As to the issue about the burden of proof, it is clear that the Tribunal accepted the evidence put forward by the Respondent as to the Claimant’s conduct and the consequences that had for the relationships within the business and on the business itself. The Tribunal does not need to refer to the burden of proof in terms to be satisfied that it has been discharged by the employer in this case. Ground 554. This is concerned with contributory fault. The contention is that the Tribunal failed to make findings of primary fact to support its conclusions of contributory fault, and, insofar as it rejected the Claimant’s evidence in rebutting the Respondent’s allegations, there is no explanation or reasoning for that. I was referred to the case of Flannery v Halifax Estate Agencies Ltd [2001] All E.R. 373, which, in a different context, dealt with the obligation to give reasons. The Court of Appeal said as follows at 378C-E: “(3) The extent of the duty, or rather the reach of what is required to fulfil it, depends on the subject-matter. Where there is a straightforward factual dispute whose resolution depends simply on which witness is telling the truth about events which he claims to recall, it is likely to be enough for the judge (having, no doubt, summarised the evidence) to indicate simply that he believes X rather than Y; indeed there may be nothing else to say. But where the dispute involves something in the nature of an intellectual exchange, with reasons and analysis advanced on either side, the judge must enter into the issues canvassed before him and explain why he prefers one case over the other. This is likely to apply particularly in litigation where as here there is disputed expert evidence; but it is not necessarily limited to such cases.”55. The submission is that, as in that case, there was a dispute on a matter amounting to an intellectual exchange, not on a matter of credibility and, in those circumstances, the Tribunal ought to have set out its reasons in full. Once again, I cannot accept those submissions. If one reads the Judgment as a whole and not by isolating specific paragraphs dealing with the conclusions on contributory conduct, it is apparent why the Tribunal came to the reasoned conclusions that it did. Paras. 82, 86, 94 to 97 and 109 all make serious findings as to the Claimant’s conduct. The conclusion that the breakdown in relations was the Claimant’s fault is explained by the Tribunal’s finding that the Respondent and, in particular, the Claimant’s fellow directors were “willing to make a go of it”.56. Unfortunately, as events transpired, it was clear that the Claimant was the one unwilling or unable to heed the warnings or make the necessary changes. His intransigent and unrepentant approach to the allegations against him, and the continued reference to the company as his when he knew that was problematic, all support that conclusion. Furthermore, it is not clear to me to what extent or on what basis it is said that the Respondent ought to have been held responsible for the breakdown in relations. Mr Powell’s submissions focus not so much on the breakdown in relations but on other matters of conduct which gave rise to the specific allegations. However, given that the Tribunal’s conclusions on contributory fault are squarely based on the breakdown in relations aspect (which, I accept, may have some relation to the conduct issues), means that those submissions carry less force than they might otherwise have done. Ground 5 therefore fails and is dismissed. Ground 657. Ground 6 is a Meek ground. Mr Powell rightly dealt with this in the course of his submissions on Ground 1. Although the Tribunal’s Judgment cannot be described as a model of clarity, it explains adequate reasoning to explain to the Claimant why he lost and why the dismissal was fair. The Tribunal did not deal with every evidential point raised, but it was not required to do so. This ground is also dismissed. Conclusion58. For these reasons, and notwithstanding Mr Powell’s helpful submissions, this Appeal fails and is dismissed. No doubt this will come as a bitter disappointment to the Claimant, who has invested a large part of his working life to this product and, latterly, to the company. However, for all its shortcomings, the Judgment of the Tribunal dealt with the issues it needed to adequately and I do not consider there to have been an error of law. It just remains for me to thank both Counsel for their submissions.