Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:   1093/13

 

 

CLAIMANT:                      Kathleen Doherty

 

 

RESPONDENT:                Castle Hotels N.I. Ltd

 

 

DECISION

The unanimous decision of the tribunal is that:-

 

(1)      the claimant was unfairly dismissed by the respondent and the tribunal makes an award of compensation to be paid by the respondent to the claimant in the sum of £7,378.00; and

 

(2)      the tribunal declares the claimant had unauthorised deductions made by the respondent from her wages and the said claim is well-founded and the respondent is therefore ordered to pay to the claimant the said sum of £507.50 deducted from her wages by the respondent.

 

Constitution of Tribunal:

Employment Judge:         Employment Judge Drennan QC

Members:                        Mr J Boyd

                                        Ms E McFarline

 

Appearances:

The claimant was represented by Mr M O’Brien, Barrister-at-Law, instructed by P Fahy & Company, Solicitors.

The respondent did not appear and was not represented.

 

Reasons

 

1.1     The claimant presented to the tribunal on 5 June 2013 a claim for unfair dismissal, arrears of pay/holiday pay/notice pay and breach of contract against the respondent.  The respondent presented to the tribunal on 2 July 2013 a response denying liability for the claimant’s said claims. 

 

1.2     The claimant had brought previous proceedings to the tribunal (Case Reference Nos:  2458/10 and 305/11) together with a number of other persons who had all been employed by various employers at the Lough Erne Hotel in Kesh, Co Fermanagh (‘the Hotel’), in respect of claims for unauthorised deduction of wages in relation to employment by them with these employees at the Hotel.  In a decision on a pre-hearing review issued to the parties on 4 February 2014, under the name Catherine Claire Grainger  v  1.  Lough Erne Hotel Ltd, 2.  Department of Employment and Learning, 3.  Castle Hotels N.I. Ltd (Case Reference No:  300/11), the background to this claim was set out.  The said decision on the pre-hearing review has not been the subject of an appeal.  For the avoidance of any doubt, the claimant adopted and relied upon the decision in the pre-hearing review and the reasons therein, for the purposes of her claim in the present proceedings against the respondent.

 

          In summary, the decision in the pre-hearing review found that there was a relevant transfer, pursuant to the Transfer of Undertakings (Protection of Employment) Regulations (Northern Ireland) 2006 (‘TUPE Regulations’) from Markville Trading Ltd (‘Markville’) to ACEC Enterprises Ltd (‘ACEC’) on or about 30 April 2010/1 May 2010.  The tribunal was satisfied, following the said transfer to ACEC, there subsequently was a further relevant transfer from ACEC to the respondent, pursuant to the TUPE Regulations on 11 November 2011.  The tribunal so concluded for the following reasons.  The respondent in its response, dated 3 October 2013, denied liability for the claims of the claimant, the subject-matter of the pre-hearing review.  This response was provided by Alan Castle, the then managing director of the respondent, who appeared at the hearing of the                    pre-hearing review.  In this said response, it was accepted by him that, at all material times, there was a relevant transfer, pursuant to the TUPE Regulations, from ACEC to the respondent on or about 11 November 2011.  In the response of the respondent, received by the tribunal on 2 July 2013, there was a reference by the respondent to the claims, the subject-matter of the pre-hearing review; but, in particular, there was no denial in the response there was such a relevant transfer from ACEC to the respondent on 11 November 2011, which was consistent with what was stated in the said response, dated 30 October 2013.  In the circumstances, if it had been necessary to do so, the tribunal would have followed and adopted the reasons set out in the decision on the pre-hearing review that there was such a transfer between ACEC and the respondent.  The tribunal was further satisfied, on the oral evidence of the claimant, prior to her employment with Markville and thereafter ACEC and the respondent, that there had been a series of relevant transfers, pursuant to the TUPE Regulations; with the consequence the claimant had continuity of employment from the commencement of her employment at the Hotel in or about April 1985 to the termination of her employment with the respondent, as set out elsewhere in this decision.

 

1.3     The respondent did not appear and was not represented at the substantive hearing in respect of the present proceedings.  Notice of Hearing was issued to the respondent on foot of an Order for Substitute Service made by the Vice President, dated 31 October 2014.

 

1.4     In accordance with Rule 27(5) of the Industrial Tribunals Rules of Procedure, in the absence of the respondent, the tribunal, before it determined the issues in these proceedings, considered the information in its possession, which had been made available to it by the parties, including the response of the respondent, presented to the tribunal on 2 July 2013, referred to previously.

 

2.1     Having heard the oral evidence of the claimant, and considered the documents contained in the ‘trial bundle’ including the amended schedule of loss provided to the tribunal by the claimant’s representative and the submissions of the claimant’s representative, insofar as relevant and material for the determination of the claimant’s claims, the tribunal made the following findings of fact, as set out in the following sub-paragraphs. 

 

2.2     The claimant, who was born on 10 February 1953, commenced employment at the Hotel in or about 8 May 1979 as a housekeeper and, following the said series of relevant transfers between various employers, pursuant to the TUPE Regulations, the claimant commenced employment with the respondent as housekeeper from on or about 11 November 2011 and she remained in that position until the termination of her employment with the respondent on or about 6 March 2013.  In addition to her duties as housekeeper, from in or about December 2011, the claimant was also employed as a chef at the Hotel, as the previous chef had left and had not been replaced by the respondent. 

 

2.3     For a period of three weeks from mid-February to early March 2013, the claimant was not paid by the respondent the wages to which she was entitled, namely £607.50 (3 x £202.50).  On 4 March 2013, the claimant arrived at work at the Hotel to find there was no heating and limited supplies to make breakfast and the lunches.  She was informed later that day by the receptionist, and de facto manageress, Mrs Grainger there was no money to purchase food supplies and that the Hotel was closing from Monday to Friday; but, as there were already guests checked-in, the claimant had to make breakfast for them on the morning of 6 March 2013.  After several attempts to contact Mr Castle, she was told by him to get money from reception to buy foods from the nearby shop.  He later arrived at the Hotel and told the claimant he was closing the Hotel and would send her a letter of redundancy.

 

2.4     On 6 March 2013, the claimant received the following Notice from Mr Castle, on behalf of the respondent:-

 

                    “The Lough Erne Hotel

 

                    To whom this may concern

 

Due to the economic downturn [sic] in the hotel industry, Kate unfortunately could not be maintained in her current role in the company and was let go due to financial pressures with the company.”

 

2.5     The claimant was not paid any redundancy payment by the respondent, nor was she paid any pay in lieu of notice.  Further, despite repeated requests by the claimant, she was not paid the outstanding wages, referred to previously, which remain outstanding, although on 18 March 2013, Mr Castle did lodge £100.00 into the claimant’s bank account in respect of the outstanding wages, leaving a balance of £507.50.  On 27 March 2013, the claimant, believing that she had been unfairly dismissed and was owed wages and/or notice pay, wrote to Mr Castle in relation to these matters.  He subsequently sent a letter dated 10 April 2013, in which, inter alia, he denied the claimant’s claims.

 

2.6     The claimant, at the date of termination of her employment, was earning £240.00 gross per week and £202.50 net per week.  On 8 November 2013 the claimant obtained alternative employment but at £140.00 net per week (reduction of £62.50 per week).  Unfortunately, due to ill-health, the claimant had to resign from this employment on 9 June 2014; and, fairly, she accepted in evidence she would not have been able to continue to be employed at the Hotel or any where else from that date. 

 

2.7     Within a very short period, following the termination of the claimant’s employment, the tribunal is satisfied the Hotel ceased to operate as a going concern.  The respondent, however, continued in existence.  In the circumstances, even if all relevant procedures had been followed by the respondent (see later).  The tribunal is satisfied the claimant’s employment would have terminated, in any event, by 10 April 2013, the date of the said letter from Mr Castle, and no claim for financial loss could extend beyond that date.

 

Relevant law

 

3.1     Article 126 of the Employment Rights (Northern Ireland) Order 1996 (‘the 1996 Order’) provides:-

 

                    “An employee has the right not to be unfairly dismissed by his employer.”

 

          Article 130 of the 1996 Order provides:-

 

“(1)     In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair it is for the employer to show –

 

(a)      the reason (if more than one the principle) for the dismissal; and

 

(b)      that it is either a reason falling within Paragraph (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

 

                     (2)     The reason falls within this paragraph if it –

 

(a)      relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

 

(b)      relates to the conduct of the employee,

 

...

 

(c)      is that the employee was redundant, or

 

(d)      is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) if a duty or restriction imposed by or under a statutory provision.

 

                     ...

 

(4)     Where the employer has fulfilled the requirements of Paragraph (1) the determination of a question whether the dismissal is fair or unfair, (having regard to the reasons shown by the employer) –

 

(a)      depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably as treating it as a sufficient reason for dismissing the employee; and

 

(c)      shall be determined in accordance with equity and the substantive merits of the case.

                   

                    ...

 

                     (6)     Paragraph (4) is subject to Article 130A ... .”

 

          Article 130A of the 1996 Order provides:-

 

“(1)     An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if –

 

(a)      one of the procedures set out in Part I of Schedule 1 to the Employment (Northern Ireland) Order 2003 (Dismissal and Disciplinary Procedures) applies in relation to the dismissal;

 

(b)      the procedure has not been completed; and

 

(c)      the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with these requirements.

 

(2)     Subject to Paragraph (1) failure by an employer to follow procedure in relation to the dismissal of an employee shall not be regarded for the purpose of Article 130(4)(a) as by itself making the employer’s action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.”

 

Article 45 of the Employment Rights (Northern Ireland) Order 1996 (‘the 1996 Order’) provides as follows:-

 

“(1)     An employer shall not make a deduction from wages of a worker employed by him unless —

 

(a)      the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or

 

... .”

 

          Article 56 of the 1996 Order provides as follows:-

 

“56.    Where the tribunal finds a complaint under Article 55 well-founded, it shall make a declaration to that effect and shall order the employer –

 

(a)      In the case of a complaint under Article 55(1)(a) to pay to the worker the amount of any deduction made in contravention of Article 45.

 

                    ... .”

 

          Article 59 of the 1996 Order provides as follows:-

 

“(1)     In this Part ‘wages’ in relation to a worker, means any sums payable to the worker in connection with his employment, including –

 

(a)      any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise.

 

 ... .”

 

3.2     Substantial changes to the law of unfair dismissal were introduced, following the commencement in April 2005 of the Employment (Northern Ireland) Order 2003 (‘the 2003 Order’); and the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004 (‘the 2004 Regulations’).  The 2003 Order and the 2004 Regulations introduce, inter alia, statutory procedures to be complied with by an employer relating to matters of discipline and/or dismissal.  These provisions came into operation on 3 April 2005.  They were not repealed by the Employment Act (Northern Ireland) 2011 and were therefore applicable, insofar as relevant and material to this matter.

 

In essence, the statutory procedures introduced under the said legislation required employers, subject to certain exemptions which were not applicable to this case, to follow a specific procedure when subjecting employees to disciplinary action or dismissal.  There are two alternatives, namely:-

 

(a)      standard dismissal and disciplinary procedures (DDP);or

 

(b)      a modified DDP.

 

There was no dispute that the latter procedure was never applicable in this matter. 

 

Under the standard DDP it is provided at Paragraphs 1 – 3 of Schedule 1 of the 2003 Order as follows:-

 

“(i)      Step 1 –

 

A statement of grounds for action and invitation to meeting –

 

 (1)     The employer must set out in writing the employee’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.

 

 (2)     The employer must send a statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

 

Step 2 – Meeting

 

(1)      Meeting must take place before action is taken, except in the  where the disciplinary action consists of suspension.

 

                              (2)      Meeting must not take place unless –

 

                              (a)      the employer has informed the employee of what the basis was for including in the statement in Paragraph (1) the ground or grounds given in it; and

 

                             (b)      the employee has had a reasonable opportunity to consider its response to that information.

 

                              (3)      The employee must take all reasonable steps to attend the meeting.

 

                              (4)      After the meeting the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.

 

                              Step 3 – Appeal

 

                              (1)      If the employee does wish to appeal, he must inform the employer.

 

                              (2)      If the employee informs the employer of its wish to appeal, the employer must invite him to attend a further meeting.

 

                              (3)      The employee must take all reasonable steps to attend the meeting.

 

                              (4)      The appeal meeting need not take place before the dismissal or disciplinary action takes effect.

 

                              (5)      After the appeal meeting the employer must inform the employee of its final decision.”

 

(ii)       There are a number of general requirements set out at Paragraphs 11 – 13 of Part III of Schedule 1 of the 2003 Order, which provide, as follows:-

 

                                        “Introductory

 

                                        (11)             The following requirements apply to each of the procedures set out above (so far as applicable)

 

                                         Timetable

 

                                         (12)            Each step and action under the procedure must be taken without unreasonable delay.

 

                                         Meeting

 

                                         (13)  

 

                                         (1)     Timing and location of meetings must be reasonable.

 

                                         (2)     Meetings must be conducted in a manner which enable both employer and employee to explain their cases.

 

                                         (3)     In the case of appeal meetings which are not the first meeting, the employer should, as far as is reasonably practicable, be represented by a more senior manager than attended the first meeting (unless the more senior manager attended that meeting).”

 

                    (iii)      Under Regulation 12 of the 2004 Regulations, it is provided, in essence, that the failure of a party to follow the applicable DDP then releases the other party from the obligation to follow it:-

 

                                         “(1)   If either party fails to comply with the requirement of an applicable statutory procedure including a general requirement contained in Part III of Schedule 1, …               non-completion of the procedure shall be attributable to that party and neither party shall be under obligation to comply with any further requirement of the procedure.”

 

                    (iv)      Under Regulation 3(1) of the 2004 Regulations, the standard DDP applies when the employer contemplates dismissing or taking relevant disciplinary action against an employee.

 

                    (v)       Existing contractual and dismissal procedures remain to the extent that they supplement the statutory DDPs – which are intended to give the employee certain ‘basic’ protections.

 

3.3     The Employment Appeal Tribunal, in the case of Venniri  v  Autodex Ltd [UKEAT/0436/07] at Paragraph 34, held the tribunals are under duty to consider whether or not a dismissal is automatically unfair (under the equivalent provisions in the Employment Rights Act 1996 [which then applied in Great Britain] to Article 130 of the 1996 Order), even where that allegation has not been expressly pleaded, which was the case in the present proceedings, on the grounds that these provisions are part of the ‘essential fabric of unfair dismissal law’.  The Employment Appeal Tribunal has also held, in the case of Metrobus Ltd  v  Cooke [UKEAT/0490/06] (Paragraphs 27 – 29), where a tribunal has made a finding of automatic unfair dismissal, pursuant to similar provisions in the Employment Rights Act to Article 130A(1) of the 1996 Order, it may be ‘useful’ for the tribunal to record its judgment, in the alternative, on the ‘ordinary’ unfair dismissal allegation, (ie pursuant to Article 130 of the 1996 Order).

 

3.4     Failure to comply with the relevant statutory dismissal procedures has an impact on compensation in relation to a claim of unfair dismissal, resulting in an adjustment upwards (in the case of default by the employer) or in an adjustment downwards (in the case of default by the employee).  Under Article 17(2) and 17(3) of the 2003 Order, the adjustment must be at least 10% and, if the tribunal considers it just and equitable, up to 50%.  However, under Article 17(4) of the 2003 Order, a tribunal can apply no adjustment (or an adjustment of less than 10%) if there are exceptional circumstances making a 10% adjustment unjust or inequitable.  Any potential uplift or reduction is limited to the compensatory award only; and there is no provision in an unfair dismissal claim to uplift the compensatory award beyond the statutory maximum (Article 158A of the 1996 Order).

 

3.5     Although the decisions of the Employment Appeal Tribunal and/or the Court of Appeal in England and Wales are not binding on this tribunal; however, the tribunal, in the absence of any relevant decisions in the Court of Appeal in Northern Ireland in relation to the said statutory dismissal procedures, subject to what is stated later in this decision, has found the decisions of the Employment Appeal Tribunal and/or the Court of Appeal in England and Wales, in relation to such matters, persuasive and appropriate to follow – in particular, in circumstances where the decision of the Employment Appeal Tribunal and/or the Court of Appeal in England and Wales relate to provisions, which were then applicable in Great Britain, and which were in similar terms to the relevant statutory provisions in Northern Ireland, to which reference has been made above.  The Employment Appeal Tribunal and/or the Court of Appeal in England and Wales has been reluctant to set down principles that fetter the discretion of a tribunal in relation to this issue of the uplift and reduction of the compensatory award in relation to a finding of automatic unfair dismissal (see Cex  v  Lewis [UKEAT/0031/07].

 

          In Metrobus Ltd  v  Cooke [UKEAT/0490/06] the EAT did not interfere with an uplift of 40% where the employer had ‘blatantly’ failed to comply with the obligation to send a Step 1 letter and acknowledged that the uplift provisions were more ‘penal than compensatory in nature’.  In Davies  v  Farnborough College of Technology [2008] IRLR 4, Burton J suggested a maximum uplift could apply where there had been a complete and deliberate breach of any procedures.  Subject to what is set out below, ultimately the extent of any uplift would appear to be a matter within the discretion of a tribunal, having regard to all material circumstances, which are unlimited.  Further, the statutory provisions do not require the tribunal to start at an uplift of 50% and work downwards in accordance with evidence of mitigation provided by the respondent (see Butler  v  GR Carr (Essex) Ltd [UKEAT/0128/07].  However, in the case of Aptuit (Edinburgh)  v  Kennedy [UKEATS/0057/06], the Employment Appeal Tribunal (in Scotland) held that, when exercising its discretion to uplift an award, the only circumstances which the tribunal may take into account are those surrounding the failure to complete the statutory procedure.  In the case of McKindless Group  v  McLaughlin [2008] IRLR 678, the Employment Appeal Tribunal (in Scotland) has again confirmed that, in exercising the discretion the tribunal must do so by reference to some particular facts and circumstances surrounding the failure to complete the statutory procedure which can properly be regarded as making it just and equitable that the employer should be penalised further.  Somewhat controversially, the EAT held that an uplift should not follow if the employer does not explain the reasons for the failure to comply, on the grounds that the statutory provisions do not oblige the employer to explain the failure.

 

          In the case of Virgin Media Ltd  v  Seddington & Another [UKEAT/0539/08], Underhill J applied the McKindless Group case and confirmed that a (if not the) primary factor requiring to be taken into account in exercising the discretion in relation to whether an uplift was applicable, related to how culpable the failure to employ the statutory procedures was.  Underhill J accepted that, in some circumstances, failure to employ the statutory procedures might speak for itself.  In addition he said that the issue of uplift should not be approached too mechanistically, as had occurred in the particular facts of that case.  In Abbey National Ltd  v  Chagger [2009] IRLR 86, Underhill J held that it was legitimate for a tribunal to take into account the overall size of an award, when deciding the amount of an uplift.

 

          In the case of Wardle  v  Credit Agricole [2011] EWCA Civ 545, Elias LJ reviewed all the authorities and stated:-

 

“18     Before answering this question, it is necessary to consider the principles which should inform a tribunal when exercising its Section 31(3) discretion.

 

 19     I confess that I do not find the sub-section at all easy to apply. In Chagger the Court stated that its purpose was to operate ‘as an incentive to encourage parties to make use of the statutory procedures’.  It is a stick rather than a carrot, and the sanction for failing to comply has a significant punitive element since failure leads to additional compensation irrespective of the adverse effect on the employee.  It is no doubt because the penalty should be commensurate with the offence that the EAT has expressed the view on a number of occasions that the degree of culpability is a highly significant factor when assessing the appropriate uplift.  Culpability will include such considerations as the extent of the breach and whether it is deliberate or inadvertent : see the observations of the EAT President, Underhill J, in Virgin Media  v  Seddington UKEAT/00539/08, Paragraph 20 and Lawless  v  Print Plus UKEAT/0333/09, Paragraph 10.

 

 20     Whilst I do not dissent from that analysis, I think it would be wrong to see the uplift purely in penal terms.  The breach does have adverse consequences for the other party.  In the case of a dismissal, the employee is deprived of the opportunity to persuade the employer, before the axe falls, that the dismissal would be inappropriate or unfair.  Instead he is compelled to go to law to vindicate his position.

 

21      The consequences of the breach for an employee will vary from case to case.  For example, it may be felt particularly harshly where the dismissal is for misconduct, and especially so if there are what turn out to be false allegations of fraud or dishonesty which can then only be successfully challenged in the tribunal, where they necessarily become aired in public.  In my judgment this would render the breach more culpable than would otherwise be the case and would be a potentially important factor justifying an uplift significantly above the 10%.

 

22      I do not think that the ability of the wrongdoer to pay is in itself a relevant factor when considering the degree of culpability.  Having said that, a large company which infringes the procedures will often be more culpable than a small business because it has less excuse for being ignorant of its obligations and the potential consequences of its actions.

 

23      The curiosity about these provisions - both as they affect the employer and employee - is that the sanction is defined by reference to the compensation awarded to the employee which is in turn a function of the employee's loss.  Yet that depends on a whole host of factors some of which are entirely fortuitous and have no bearing on the employer's conduct at all.  For example, if the employee is unfairly dismissed in flagrant and deliberate disregard of the procedures, but he secures equivalent employment immediately following the dismissal, the compensation will be very small and even the maximum uplift will only result in a very modest sum of money.  By contrast, an employer who inadvertently commits a relatively minor breach in circumstances where considerable loss is suffered will have to pay much more even if the uplift is limited to 10%.  The stick strikes more harshly on the wrong dog.  That, however, is what Parliament has enacted, and tribunals must seek to give effect to Parliament's intention, however difficult or arbitrary the consequences may appear to be.

 

24      In my view, some understanding of Parliament's intention can be gleaned by a careful consideration of the structure of the sub-section.  As the EAT has observed (eg in the Lawless case) the tribunal is not charged with fixing a percentage somewhere between 10 and 50% as it deems just and equitable.  Had that been the formulation then I can see that it may well have been appropriate for a tribunal to choose 10% for the least serious breaches and 50% for the most flagrant with the rest falling at the appropriate point within the range.  Rather the tribunal is enjoined to start with 10% and it must then consider whether it is just and equitable to increase that percentage and, if so, by how much.

 

25      As Lady Smith pointed out giving the judgment of the EAT sitting in Scotland in McKindless Group  v  McLaughlin [2008] IRLR 678, Paragraph 13, this requires a tribunal to explain what facts or circumstances surrounding the failure to comply make it just and equitable to go beyond the minimum at all.  This should not be an automatic response whenever the tribunal thinks that the breach is more than minor.  On the contrary, there must be something about the particular circumstances which justifies the conclusion that 10% would be inappropriate and ought to be increased.  The circumstances need not be exceptional, otherwise that word would have been used here as it is in sub-section (4), but in my judgment they must be such as to clearly justify concluding that the starting point of 10% would not adequately reflect the degree of culpability.

 

26      In my opinion an increase to the maximum of 50% should be very rare indeed.  It should be given only in the most egregious of cases.  An example given by Lady Smith in the McKindless case which would at any event get close to the maximum is where there is a clear finding that the employer is determined to dismiss the employee whatever the merits and has deliberately and cynically ignored the procedures in case they get in the way of his being able to do so.  However, the mere fact that the employer has ignored the procedures altogether would not in my view justify an increase to the maximum, although it would often justify some increase beyond 10%.

 

27      Once the tribunal has fixed on the appropriate uplift by focusing on the nature and gravity of the breach, but only then, it should consider how much this involves in money terms.  As I have said, this must not be disproportionate, but there is no simple formula for determining when the amount should be so characterised.  However, the law sets its face against sums which would not command the respect of the general public, and very large payments for purely procedural wrongdoings are at risk of doing just that.  The EAT referred to the case of HM Prison Service  v  Johnson [1997] ICR 275 when Smith J, as she then was, observed, with respect to the level of compensation for injury to feelings, that it was necessary to have regard to ‘the view which members of the public would have to the amount of the award’.  In my judgment, that is a fortiori the case where the award is either unrelated, or at least only partially related, to any specific injury to, or loss suffered by, the employee.

 

28      In considering the sort of sum which would be proportionate and acceptable, it is, in my view, of some relevance to have regard to the sums which the courts are willing to award for injury to feelings and for aggravated damages. 

 

...

 

29      I do not suggest that these are entirely analogous situations, but I think that save in very exceptional cases, most members of the public would view with some concern additional payments following an uplift for purely procedural failings which exceeded the maximum payable for injured feelings.”

 

In a recent case, before the Court of Appeal in Northern Ireland, in the case of Brinks Ireland Ltd  v  Hines [2013] NICA 32, one of the issues which the Court could have been required to consider on appeal was the uplift of 50%, in circumstances where the tribunal had found that the dismissal was unfair; but, in the event, the Court of Appeal remitted the case to the industrial tribunal to further consider the nature of the dismissal and, in light of same, the application (if relevant) of the said uplift provisions.  The industrial tribunal, upon remittal, decided the claimant was expressly, deliberately and unfairly dismissed and affirmed the its earlier decision of a 50% uplift of the compensatory award.  This subsequent decision was not the subject of appeal.  In a decision in the Court of Appeal in the Northern Ireland, in the case of Lewis  v  McWhinney’s Sausages Ltd [2013] NICA 47, the provisions relating to an uplift, pursuant to Article 17(3) of the 2003 Order were also, inter alia, the subject-matter of the proceedings; but in the event, it was again not necessary for the Court of Appeal to make any observations on the said provisions, relating to uplift, when dismissing the appeal. 

 

3.6     In considering the statutory dismissal procedure, to which reference has been made above, in the case of Lewis  v  McWhinney’s Sausages Ltd [2013] NICA 47, in the course of his judgment, Morgan LCJ, delivering the judgment of the Court, referred to the requirements of these provisions, as referred to by the Employment Appeal Tribunal in the case of Alexander  v  Bridgen Enterprises Ltd [2006] ICR 1277, when he stated:-

 

“In Step 1 the employer merely had to set out in writing the grounds which lead him to contemplate dismissing the employee.  Under the second step the basis for the grounds was simply the matters which had led the employer to contemplate dismissing for the stated grounds.  The objective is to ensure that the employee is not taken by surprise and is in a position to deal with the allegations.  The letter of 20^th of May 2010 identified the occasion on which the alleged insubordination occurred and identified verbal abuse as to the nature of the insubordination.  The letter was sent two days after the meeting of which a complaint was made so the appellant was in a good position to contradict any alleged statement or explain anything said by him.  In those circumstances the letter satisfied both of these tests so that no failure to comply with the statutory procedures arose in this case.  The statutory procedures do not require the employer to set out the evidence in respect of the matter as an issue although it can be helpful if the employer chooses to do so.”                                                 (See Paragraph 23 of the judgment)

 

          (See also further Paragraph 4.4 of this decision in relation to the relevance of appeals in any dismissal procedure.)

 

3.7     In particular, in Alexander, the Employment Appeal Tribunal stated that the Step 1 statement should:-

 

“Do no more than state the issue in broad terms ... the employee simply needs to be told that he is at risk of dismissal (or, presumably, other disciplinary action) and why (Paragraph 38).  In conduct cases, the Step 1 statement will need to ‘[identify]’ the nature of the misconduct in issue, such as fighting, insubordination or dishonesty,  In other cases it may require no more than specifying, for example, that it lack of capability or redundancy.”

 

          (See further Cartwright  v  Kings College London [2010] EWCA Civ 146)

 

          In Sahatciu  v  DPP Restaurants Ltd [UKEAT/0177/06] it was held that ‘A widely pedantic reading of the DPP is as unattractive as an overly technical construction of a Step 1 grievance letter under the statutory grievance procedure (the statutory grievance procedure is now repealed in Great Britain and Northern Ireland)’.

 

          In the case of YMCA Training  v  Stewart [2007] IRLR 185, Underhill J, as he then was, referred to the statement as a statement in ‘headline terms’ – Paragraph 9.

 

          Somewhat surprisingly, in the case of Homeserve Emergency Services Ltd  v  Dixon [UKEAT/0127/07], the Employment Appeal Tribunal held that an employer’s letter had complied with Step 1 even where it did not say where that it was contemplating dismissal.  However, this was because, according to the Employment Appeal Tribunal, it was ‘implicit’ from a letter inviting the employee to a ‘formal disciplinary meeting’ for ‘breach of contractual obligations’ that it was contemplating with some disciplinary action.  However, in Zimmer Ltd  v  Brezan [UKEAT/0294/08] the Employment Appeal Tribunal held that a Step 1 letter was defective because it did not specifically inform the employee that he was at risk of dismissal (and, on the facts, that there was no contacts that could save it).  In the case of Draper  v  Mears [2006] IRLR 869, the Employment Appeal Tribunal held that it was sufficient in a case involving dismissal for driving a vehicle after consuming alcohol for the Step 1 letter, to refer only to ‘conduct which fails to reasonably ensure the health and safety of others’.  Indeed, the Employment Appeal Tribunal held that, where there is ambiguity over the content of the Step 1 letter, the tribunal is ‘entitled to look at the whole context’ in order to resolve any such ambiguity.  It may be thought that this is somewhat similar to the relevance of context which was referred to by Elias P in the well-known case of Canary Wharf Management Ltd  v  Edebi [2006] IRLR 416, when considering the then somewhat similar provisions relating to the statutory grievance procedures (now repealed).  The Employment Appeal Tribunal held that looking at the whole matter in context, made it impossible for Mr Draper, who ‘knew full well the allegations against him before the Step 1 letter reached him’, to argue there had been non-compliance with the DDP that rendered his dismissal automatically unfair.  In Draper, the Employment Appeal Tribunal also noted that, while the Step 1 letter and the Step 2 meeting are separate matters, it may often be the case that Step 2 is complied with before Step 1.

 

          In YMCA Training  v  Stewart [2007] IRLR 185, the Employment Appeal Tribunal suggested that tribunals should not ‘be distracted by the fact that the parties have been following an internal procedure with more elaborate requirements and different terminology from those required by the statute : it is necessary to look between the parties own labels and focus on whether the substantial requirements of the statute, which are simple and non-technical terms, were or were not met’.

 

          In Cartwright, the Court of Appeal emphasised a prior oral exchange could not fill a gap in the statutory procedure since the procedure required a statement of the minimum information in writing stating, ‘if the opposite were true, it would mean an employer could send an employee a statement saying no more than ‘Re our discussion yesterday, please come to a meeting tomorrow to discuss it further’ and then proffer it as a sufficient Step 1 statement as proof the discussion had covered the headline information required to be included in such a statement’. The court also made clear the writing and sending of a Step 1 statement was an elementary exercise requiring minimal skill, and any employer familiar with the requirements had only himself to blame if he was unable to create and send the necessary statement.

 

3.8     In relation to the Step 2 meeting, Employment Appeal Tribunal in Alexander considered the nature of the information the employer must give to the employee in order to inform him of the ‘basis’ for the concerns in the Step 1 statement.  In particular, it noted the following:-

 

“(i)      To comply with Step 2, the information does not need to be in writing and can be given orally.                                            [Paragraph 39]

 

 (ii)     The information is ‘an explanation ... as to why the employer is contemplating dismissing that particular employee’.          [Paragraph 41]

 

(iii)     In misconduct cases, the information required involves ‘putting the case against the employee’.  This does not require ‘detailed information’ but ‘sufficient detail ... to enable the employee properly to put forward his side of the story.”                                  [Paragraph 40]

 

As noted above, it may be permissible for a Step 2 requirement to be complied with before a Step 1 requirement; thus the stages of the statutory procedure are not necessarily sequential.  However, failure to comply with the Step 2 requirement cannot be cured at the Step 3 appeal; (see Davies  v  Farnborough College of Technology, Paragraph 19 [2008] IRLR 14).  In Davies, Burton J, in a case relating to dismissal for redundancy, said it was necessary to give sufficient information to allow the employee both to understand and to challenge why it was proposed to dismiss him for redundancy.

 

Again, in view of the absence of any relevant decisions by the Court of Appeal in Northern Ireland, other than the Lewis  v  McWhinney’s Sausages Ltd, referred to above, in relation to the statutory dismissal procedures, the tribunal considered it relevant to consider and follow, as appropriate, the various decisions of the Employment Appeal Tribunal and Court of Appeal in England and Wales, as referred to above when considering the proper interpretation of the said statutory dismissal procedures and, in particular, the three step process referred to in the said procedures.

 

3.9     Following the introduction of the new statutory dismissal procedures, Article 130A(1) and (3), as set out above, provided a dismissal was automatically unfair if the new procedures were not followed. 

 

3.10    Article 130A(2) made further changes in the law in relation to unfair dismissal and, in particular, provided in certain circumstances, the partial reversal of the principles set out in the well-known House of Lords decision in the case of Polkey  v  AE Dayton Services Ltd [1988] ICR 344 (‘Polkey’).  However, Article 130A(2) does not apply in a case where there has been a dismissal in breach of the statutory dismissal procedures, whereby the dismissal is automatically unfair under Article 130A(1).  Article 130A(2) of the 1996 Order therefore is only of application  where the statutory dismissal procedure has been complied with but there has been a breach of procedures, other than statutory dismissal procedures. 

 

4.1     In relation to the alternative claim of ‘ordinary’ unfair dismissal, pursuant to Article 130(1)(a) of the 1996 Order, there was no dispute by the representatives that the burden was on the respondent to establish the reason relied upon by it.  The question of whether it did in fact justify the dismissal requires the tribunal to consider whether the respondent acted reasonably in all the circumstances in treating the reason as sufficient, pursuant to the provisions of Article 130(4) – (6) of the 1996 Order.  (See further Harvey on Industrial Relations and Employment Law, Section D1, Paragraph 8, and Mental Health NHS Trust  v  Sarkar [UKEAT/0479/08], where it is established in relation to the issue of fairness, there is no burden of proof on any party).

 

4.2     In relation to a case where the reason for the dismissal is found to relate to a reason within the terms of Article 130(1) and (2) of the 1996 Order, the tribunal, as set out above, then has to determine whether the dismissal is fair, having regard to the provisions of Article 130(4) – (6) of the 1996 Order, referred to previously. 

 

          Applying the dicta, which originated in the well-known case of British Home Stores Ltd  v  Burchell [1980] ICR 301, and other subsequent cases, which was a conduct case, it is necessary for a tribunal to determine:-

 

“(i)      whether the employer had a genuine belief in the guilt of the employee;

 

                    (ii)      whether it had reached that belief on reasonable grounds;

 

                    (iii)     whether this was following a reasonable investigation; and

 

(iv)     whether the dismissal of the claimant fell within the range of reasonable responses in light of that misconduct.”

 

          As seen above, it has long been established that in relation to the matters set out in Article 130(4) there is a ‘neutral’ burden of proof (see further DSG Retail Ltd  v  Mackey [2013] UKEAT/0054/13 and Singh  v  DHL Services [2013] UKEAT/0462/12]).

 

In Sainsburys Supermarkets Ltd  v  Hitt [2003] IRLR 23, it was made clear the range of reasonable responses test applies as much to the question of whether an investigation into suspected misconduct was reasonable in all the circumstances as it does to other procedural and substantive aspects of the decision to dismiss a person from his employment for a conduct reason.  Mummery LJ also pointed out in Hitt the reasonableness of the employer’s investigation is to be considered by the objective standards of the reasonable employer, having regard to the particular circumstances of the case.

 

In Iceland Frozen Foods Ltd  v  Jones [1983] ICR 17 – Browne-Wilkinson J offered the following guidance:-

 

          “ …

 

(1)      the starting point should always be the words of [Section 57(3)] themselves;

 

(2)      in applying the Section the industrial tribunal must consider the reasonableness of the employer’s conduct, not simply whether they [the members of the industrial tribunal] consider the dismissal to be fair;

 

(3)      in judging the reasonableness of the employer's conduct an industrial tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;

 

(4)      in many (though not all) cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another;

 

(5)      the function of the industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted.  If the dismissal falls within the band the dismissal is fair : if the dismissal falls outside the band it is unfair.”

 

4.3     In a recent decision in the Court of Appeal in Davies  v  Sandwell Metropolitan Borough Council [2013] EWCA Civ 135, when deciding whether the employer acted reasonably in dismissing the employee, held:-

 

“It is not for ET to conduct a primary fact-finding exercise.  It is there to review the employer’s decision.  Still less is the ET there to conduct an investigation into the whole of the employee’s employment history … .” (Paragraph 33 of the judgment)

 

4.4     Procedural defects in the initial disciplinary hearing may be remedied on appeal, provided that in all the circumstances the later stages of the procedure are sufficient to cure any earlier unfairness.  As the Court of Appeal held in Taylor  v  OCS Group Ltd [2006] EWCA Civ 702:-

 

“If an early stage of a disciplinary process is defective and unfair in some way then it does not matter whether or not an internal appeal is technically a re-hearing or review, only whether the disciplinary process as a whole is fair.  After identifying a defect a tribunal will want to examine any subsequent proceedings with particular care.  Their purpose in so doing will be to determine whether, due to the fairness or unfairness of the procedures adopted, the thoroughness or lack of it of the process and the                      open-mindedness (or not) of the decision-maker, the overall process was fair, notwithstanding any deficiencies at an early stage.”

 

          In a recent decision, the Employment Appeal Tribunal, in the case of Holt  v  Res On Cite Ltd [2014] UKEAT/0410 it was emphasised that the tribunal’s role is to consider the fairness of the processes as a whole, and an appeal should not be seen separately but should be seen as part of the entire disciplinary process (see further First Hampshire & Dorset Ltd  v  Parhar [2012] UKEAT/0643]).

 

          In McMaster  v  Antrim BC [2010] NICA 45, Coghlin LJ emphasised:-

 

The fundamental purpose served by an agreed appeal disciplinary procedure is to ensure that both sides have a full and fair opportunity to put their respective cases and secure a just outcome to any dispute, including putting right, where necessary, any errors or shortcomings apparent in the initial hearing.  As a matter of principle it is difficult to accept that the effective operation of an appeal could be simply prevented by an employer either refusing the employee the right to such an appeal procedure or by rejecting an outcome considered to be advise to  his or her interest leaving the frustrated employee with compensation for breach of contract as his or her only remedy.”

 

See further West Midlands Co-Operative Society Ltd  v  Tipton [1986] AC 536)  In London Probation Board  v  Kirkpatrick [2005] ICR 965, approved by Coghlin LJ, HH Judge McMullan QC made clear:-

 

... the whole point of internal appeals is to allow for bad or unfair decisions to be put right.”

 

          The above dicta in relation to the importance of an appeal procedure clearly have relevance to any consideration of issues of uplift if there is a failure to provide an appeal under the statutory dismissal procedure.

 

4.5     In the well-known House of Lords decision in Polkey  v  AE Dayton Services Ltd [1988] ICR 344 it was held that, in essence, an employer who had acted unreasonably and in breach of procedures could not contend that, since the dismissal would have occurred anyway, even if proper procedures had been followed, the dismissal should be found to be a fair dismissal.  Indeed, it is only in limited circumstances that an employer would be able to successfully argue that compliance with fair procedures would be futile. 

 

          However, although the tribunal that might find that dismissal to be unfair, the tribunal, following Polkey, was able to reduce the employee’s compensation by a percentage to represent the chance the employee would have still been dismissed.  A Polkey reduction therefore required an employer to satisfy the tribunal it would have dismissed the employee, even if it had complied with fair procedures. 

 

4.6     Article 130A(2), as set out previously, made a further change to the law of unfair dismissal and resulted, in certain circumstances, in a partial reversal of the principles set out in Polkey, as indicated above.

 

          Article 130A(2) provides that a dismissal, following a failure to follow other procedural steps, will not affect the fairness of the dismissal, provided the employer can show the employee still would have been dismissed, if he had followed the steps correctly.  The Polkey decision was partially reversed and the ‘no difference rule’, which had applied before Polkey, was reinstated for a failure to follow procedures, other than the new statutory dismissal and disciplinary procedures.  The reference to procedures in Article 130A(2) was the subject of some conflicting decisions in the Employment Appeal Tribunal, but the generally accepted view would seem now to be that it applies to any procedure, written or otherwise, which the tribunal considers a reasonable employer might follow (see Kelly-Madden  v  Manor Surgery [2007] IRLR 17).

 

4.7     However, what is clear, from the legal authorities, is that Article 130A(2) is only of assistance to an employer, whenever the DDP has been complied with.  Automatic unfairness cannot be cured by invoking Article 130A(2) (Butt  v  CAFCSS [UKEAT/0362/07])  [tribunal’s emphasis].  As was made clear in the case of Goodin  v  Toshiba [UKEAT/0271/08], there can be a Polkey reduction of up to 100% in an automatic unfair dismissal case, where the breaches of procedure would have made no difference to the dismissal.  If the employer has complied with the DDP (but the dismissal is nevertheless unfair for other reasons), but there is a greater than 50% chance that the employer would have dismissed the employee, pursuant to Article 130A(2), the dismissal will be fair.  Thus, where the relevant DDP has been complied with but the dismissal is procedurally unfair for the ordinary purposes of Article 130(4) of the 1996 Order, any Polkey deduction cannot exceed 50%.

 

4.8     In Software 2000 Ltd  v  Andrews [2007] UKEAT/0533/06, Elias J, as he then was, emphasised that tribunals must consider any reliable evidence, even if speculative, in carrying out the exercise to determine whether or not dismissal would have occurred if a fair procedure had been followed.  Using its common sense experience and sense of justice in the normal case, that would require to assess for how long the employee would have been employed but for the dismissal.  However, it is for the employer who 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, to adduce any relevant evidence on which it wishes to rely; but in doing so, the tribunal must have regard to all the evidence from making the assessment, including any evidence from the employee itself.  As Elias J stated in his judgment:-

 

“The mere fact an element of speculation was involved was not a reason for the tribunal refusing to have regard to the evidence.”

 

          In Brinks Ireland Ltd  v  Hines [2013] NICA 32, Girvan LJ followed, with approval, Software 2000 Ltd  v  Andrews and stated:-

 

“ ... If an employer seeks to contend that the employee would or might have ceased to be employed in any event if a fair procedure had been followed or alternatively it would not have continued in employment indefinitely it is for the employer to adduce relevant evidence on which it wishes to rely.  Where the nature of the evidence which the employer adduces or on which it seeks to rely is unreliable, the tribunal may take the view that the whole exercise of seeking to re-construct what might have been is so riddled with uncertainty that no sensible prediction based on the evidence can be made ... .”

 

In a recent decision of the Employment Appeal Tribunal in the case Dev  v  Lloyds Tsb Asset Finance Division Ltd [2014] UKEAT/0281, Langstaff P emphasised the following:-

 

“6.      A tribunal asked to consider a Polkey question must ask not what would have happened, but rather what might have happened.  To ask what would have happened asks for a decision, effectively, on the balance of probability, with a straight yes or no answer.  [tribunal’s emphasis].  The second looks at the matter as one of assessment of chances.  It is well established that the latter is the correct approach ... (see further Ministry of Justice  v  Parry [2013] ICR 311, Hill  v  Governing Body of Great Tey Primary School [2013] ICR 691).”

 

5.1     As stated previously, dismissal for redundancy may be a potentially fair reason but as Cairns LJ said Abernethy  v  Mott Hay and Anderson [1974] ICR 323:-

 

“A reason for the dismissal of an employee is the set of facts known to the employer or it may be of beliefs held by him, which cause him to dismiss the employee.”

 

In this case, it has to be recalled that the respondent did not give any evidence; but, as stated previously, the tribunal did consider, pursuant to Rule 27(5) of the Industrial Tribunals Rules of Procedure, the response of the respondent, which made no reference to the reason for the dismissal of the claimant being redundancy; but this was stated in the Notice sent to the claimant on 6 March 2013, as set out above, and which the tribunal was prepared to accept, given the clear evidence of financial difficulties was the reason for the dismissal.

 

5.2     The respondent failed to comply, in any way, with the statutory dismissal procedure when it dismissed the claimant for redundancy, without notice, on 6 March 2013.  Given this failure by the respondent, the dismissal of the claimant was automatically unfairly dismissed pursuant to Article 130A(1) of the 1996 Order.  Having found the claimant was automatically unfairly dismissed, the tribunal had to consider, if these statutory procedures had been complied with, the claimant might have been fairly dismissed and a Polkey reduction should therefore be made.  In the absence of any evidence from the respondent, the tribunal decided, in the circumstances, that to carry out the said procedures would have taken some time.  By 10 April 2013 the tribunal was satisfied, given the letter of 10 April 2013 sent by Mr Castle to the claimant, there was certainly no prospect of employment by that date at the Hotel and that no claim for financial loss could extend beyond that date, even if compliance with the statutory dismissal procedures might have taken longer.  In view of the tribunal’s award of pay in lieu of noticed, as set out below, the tribunal did not award the claimant any sum for loss of earnings in the circumstances from the date of termination of her employment.

 

5.3     Given the complete failure of the respondent to comply with the statutory dismissal procedures, the tribunal was satisfied an uplift to the compensatory award should be made; but, in the circumstances, given the fact the Hotel ceased to operate as a going concern by on or about 10 April 2013, the tribunal limited the uplift to 10% in the circumstances.

 

6.1     The respondent, having failed to pay to the claimant, as a worker, the wages set out in Paragraphs 2.3 and 2.5, the tribunal is satisfied, and so declares the claimant has had unauthorised deductions made from her wages and her claim in respect of such wages is well-founded; and orders the respondent to pay to the claimant the sum of £507.50 deducted from her wages by the respondent.

 

6.2     The claimant was dismissed without notice.  In light of the tribunal’s finding that he claimant was unfairly dismissed the claimant is entitled to pay in lieu of notice for a period of 12 weeks (see Article 118 of the 1996 Order):-

 

                    12 x £202.50                                                             £2,430.00

 

6.3     In relation to the unfair dismissal of the claimant, the tribunal assessed the compensation to be paid by the respondent to the claimant as follows:-

 

                    A.       Basic award

 

                              £240.00 x 1.5 x 12                                           £4,320.00

 

                    B.       Compensatory award

 

                              (i)       Loss of statutory rights                          £   350.00

 

                              (ii)      Pay in lieu of notice                                £2,430.00

                                                                                                    £2,780.00

                                        Uplift of 10%                                         £   278.00

                                                                                                    £3,058.00

 

                                        Total Monetary Award (A) + (B)           £7,378.00

 

6.4     This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

 

6.4     The Employment Protection (Recoupment of Jobseeker’s Allowance and Income Support) Regulations (Northern Ireland) 1996, as amended, does not apply. 

 

 

 

 

 

 

Employment Judge

 

Date and place of hearing:         29 January 2015, Belfast

 

Date decision recorded in register and issued to parties: