LOGAN AGAINST A DECISION OF THE EMPLOYMENT APPEAL TRIBUNAL AGAINST FUTURE TECHNOLOGY DEVICES INTERNATIONAL LTD [2019] ScotCS CSIH

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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> LOGAN AGAINST A DECISION OF THE EMPLOYMENT APPEAL TRIBUNAL AGAINST FUTURE TECHNOLOGY DEVICES INTERNATIONAL LTD [2019] ScotCS CSIH_46 (10 September 2019) URL: http://www.bailii.org/scot/cases/ScotCS/2019/2019_CSIH_46.html Cite as: [2019] ScotCS CSIH_46, 2019 GWD 30-480, [2019] CSIH 46

[1] The appellant was dismissed from her position as principal engineer with the

respondent on 15 April 2008, having been employed subject to a probationary period of one

year. She applied to the Employment Tribunal (“ET”) claiming that her dismissal had been

[2] Part of the appellant’s role within the company came to be liaison with an external

contractor, a former company employee, whose relationship with the company and

continued work for them was critical to the success of the company. A dispute arose

between the appellant and the contractor about the use and application of certain coding

standards. This dispute extended to involve senior managers within the company, and

eventually resulted in a production stoppage. By email of 11 April 2008 to the appellant, the

contractor and internal managers the Managing Director said “I don’t honestly care how

you sort it out but work together and get it sorted ASAP”. The appellant responded that she

did not think she had the MD’s full support, that she believed it was time to move on, that

she wished to leave on good terms and wished to ensure she had support in the form of a

reference. In an email of 14 April 2008 she asked to be excused working on any project with

the contractor in question. At a management meeting on 14 April 2008 certain emails sent

by the appellant were considered to have been inappropriate, as were the threats to resign.

It was noted that she was still within the probationary period of her contract and the

decision was taken that a “clean break” should be made, terminating the appellant’s

employment and paying two weeks’ notice in lieu. In acting this way the respondent

believed that the appellant would not obtain employment protection rights.

[3] The respondent admitted dismissal but denied that this had been unfair, under

reference to alleged concerns relating to the appellant’s conduct and performance in relation

to effective communication with sub-contractors. They relied on the fact that the appellant’s

contract provided for dismissal any time during the probationary period, and their

understanding that this meant that dismissal could follow without further consequences.

The respondent however averred that there had been difficulties with the appellant,

specifically referring to problems which had developed in her working relationship with an

essential contractor. The employer averred that this working relationship with the

contractor was causing “great difficulty” and was effectively stopping the development of a

project. It was averred that the operations manager had offered to mediate between the

appellant and the contractor but the appellant refused this offer. Thereafter the situation

was described as becoming “almost impossible”. It was averred that following an issue with

certain project documentation “the entire production line was on hold for over two weeks

whilst the Applicant held this matter up. The cost to the company in terms of revenue for a

single product line being inoperative would be fairly stated at being at least $300,000 US

Dollars and potentially up to half a million US Dollars”. By email of 12 April 2008 the

appellant indicated her intention to seek alternative employment and requested a reference.

The decision to dismiss the appellant was taken at a management meeting on 14 April 2008.

Although the decision was based on the (erroneous) belief that during the probationary

period the appellant would not have acquired employment rights and could simply be

dismissed, it was averred that “high in the mind of the management meeting was the

ongoing business efficiency situation which required ongoing effective communications

[4] In the course of proceedings, the respondent subsequently admitted, in an amended

ET3, that the dismissal was unfair on the basis of a failure to follow procedure, but

elaborated upon the reasons for dismissal, asserting that any award should be reduced to

reflect Polkey principles and contributory conduct. It was asserted that had proper

procedures been followed, the likely outcome would have been a fair dismissal based upon

conduct, largely an inability to interact appropriately with both internal staff and external

contractors, which included a refusal to continue to work with the aforesaid critical

contractor. The appellant’s repeated and inappropriate threats to resign had also been a

feature, having regard to the respondent’s need to consider business efficiency.

[5] After an evidential hearing, it was asserted for the respondent that the appellant had

been dismissed for conduct reasons, namely an inability to work with colleagues and

contractors in an appropriate way, intransigence in respect of her attitude to the critical

contractor, and a refusal to work with him, as well as repeated criticisms of him and others

as incompetent, or dishonest. The appellant maintained the reason was that the CEO was

angry over the content of certain emails she had sent, at her threat to resign and at her

statement that she would not work further with the contractor in question.

[6] The ET recognised that the onus lay with the employer to show the reason for

dismissal, and that it was a potentially fair reason within the terms of the legislation such as

was capable of justifying dismissal. The reason for a dismissal was a set of facts known to

the employer, or beliefs held by him, which caused him to dismiss the employee (Abernethy

v Mott, Hay & Anderson [1974] ICR 323). The approach of the Tribunal was to discover the

real reason for dismissal by examining the facts and beliefs which led to it. It did not have to

accept the employer’s stated reason where supporting evidence was poor or where an

ulterior motive was suspected (Associated Society of Locomotive Engineers and Firemen (ASLEF)

v Brady [2006] IRLR 576). Where the employer has put the wrong label on a set of facts,

however, the Tribunal may nevertheless conclude that those facts, when the correct label is

applied, were sufficient to justify dismissal. If the facts were known to the employee, the

fact that the wrong label was attached was of no moment, if the facts correctly labelled

[7] The ET noted that general issues relating to the appellant’s working practices,

relationship with other employees and so on had not been raised with her at the time, and

concluded that these were neither material nor the reason for dismissal, and indeed were

introduced to pad out the reasons for dismissal. It did not accept that there was dismissal

for conduct. However the ET considered that there was no dispute that the material facts in

the case related to difficulties between the appellant and the contractor, which led to the

stoppage in production, to the appellant’s email that it was time to move on, and her request

not to work further with the contractor. The ET was satisfied that it was the loss of

fabrication time which brought matters to a head. The company was faced with an

employee still during the probationary period who refused to work with a critical contractor

and who now indicated that they were considering leaving. This effectively required the

[8] This was the real reason for the dismissal. The employer classified this as a conduct

matter. The ET disagreed with this label: however, on the basis of Abernethy it was open to

the ET to apply the correct label, which was in fact “some other substantial reason” of a kind

capable of justifying dismissal, namely that the appellant could/would not work with the

[9] The dismissal was nevertheless unfair since proper procedures had not been

followed. The respondent had been under a duty to (i) provide the appellant with a

statement of grounds for action and an invitation to a meeting; (ii) arrange a meeting, at

which the appellant might be represented, to allow an opportunity to respond to the

grounds; and (iii) allow an opportunity to appeal. Under reference to Polkey v A E Dayton

Services Limited [1988] ICR 142 the ET considered what might have happened had the correct

procedure been followed. The ET considered that had such procedures been followed, there

was an 85% chance that the appellant would still have been dismissed. The ongoing

relationship with the external contractor was crucially central to the company. While the

statutory procedure may have afforded the company and the appellant with an opportunity

to discuss continued employment and options therein, this had to be balanced with the fact

that the appellant appeared to be a difficult person to work with. The ET accordingly

reduced the compensatory award by that amount. It also reduced the award by 10%

because it considered that the appellant’s actions caused or contributed to her dismissal.

The appellant had been instructed to “sort out” progression of the project with the

contractor. While resolution was not entirely within her hands and she had sought

assistance from a representative of the employer she had not complied with this instruction.

She was blameworthy. There was an overriding duty on her to find a solution to progress

the project, and the failure resulted in a crisis point which should never have been reached.

The award was increased by 15% because of the employer’s failure to follow the relevant

statutory procedures when dismissing the appellant, which had rendered the dismissal

[10] Leave to appeal was granted by the procedural judge who noted that:

“It is arguable that the facts and circumstances of Abernethy are distinguishable from

the present, in that in Abernethy there was no issue as to the reason communicated at

the time for the dismissal, only as to how it was described, or “labelled”…. The

question arises as to whether, and if so when, a tribunal can make a finding of a

potentially fair reason for a dismissal on (a) a set of circumstances not communicated

at the time, and (b) on a ground different not only from that advanced at the time,

but also from that founded upon by the employer after the proof, all by way of

“relabelling” of the reason for dismissal? A further question arises; namely, if and

when a tribunal proposes to do this, what procedural safeguards, if any, are

appropriate to ensure that the rules of natural justice are observed? In so far as the

present case is concerned, were the rules of natural justice and fairness followed?”

[11] A detailed note of argument was lodged and relied upon by the appellant. It

covered a number of issues some of which concerned historical decisions by the ET

concerning inter alia document production, outwith the scope of issues for review by this

court. The principal argument advanced via a number of threads was that the reason relied

upon by the ET and the label given by it were new and raised for the first time in its written

judgment. As a consequence the appellant was not put on notice and was prevented from

answering it. This had resulted in a breach of adversarial procedure, natural justice (see

Byrne v Kinematograph Renters Society Ltd 1958 1 WLR 762) and the appellant’s right to a fair

[12] The burden of proof under the Employment Rights Act 1998 (“ERA 1998”) was on

the employer to establish the reason and label for dismissal. That statutory right could only

be restricted by statute - R (on the application of Unison) v Lord Chancellor [2017] UKSC 51.

There was no statutory authority for an ET to pick out a reason not used by the employer.

[13] In adversarial proceedings it was incompetent for a tribunal to act of its own motion

- Jackson v Dowdall [2008] CSIH 41; Margarot Forrest Care Management v Kennedy

[2010] UKEATS 0023/10/2611. To do otherwise was a breach of Article 6: Affaire Clinique de Acacias

et Autres v France (Application numbers 65399/01, 65406/01, 65405/01 and 65407/01) at

para 43. The ET required to decide a case on the basis of what was before it, not on the

construction it would have adopted. Esto a tribunal could so act, which was denied, the

facts or law relied upon required to be put to the parties - Duraliyski v Bulgaria 2014 ECHR

45519/06, 4 March 2014. This had not happened. A tribunal must confine its enquiry to the

statutory tests, and to the powers defined in its rules - Sokurenko and Strygun v Ukraine 2006

ECHR 757, 29458/04; 29465/04, 20 July 2006. The ET had failed to do so. If the ET could

substitute its own reasoning for that of the employer’s it would have the effect of shifting the

statutory onus of proving the reason for the dismissal from the employer - a proposition

emphatically rejected by the Court of Appeal in Kuzel v Roche Products Ltd [2008] EWCA Civ

[14] The appellant submitted that the ET in the present case had misdirected itself to its

role (see para 87 of its decision). By substituting the employer’s reason and label for one of

its own, not advanced by the parties at the hearing it acted in breach of Article 6 and natural

justice. It fell to the present court to substitute the ET’s finding for one that the employer

had failed to show a principal qualifying reason under the ERA 1996 for the appellant’s

[15] The ET3 in the present case did not disclose the assertion founded upon by the ET

that a breakdown in working relationships forced the employers to choose between the

parties, nor that continued employment for the appellant required her working with the

contractor in question. The ET3 raised matters of conduct and capability but did not state

that the dismissal fell to be determined as one due to capability. In concluding that some

other substantial reason (“SOSR”) was the reason for dismissal the ET proceeded on

findings in fact of which the parties had not been given notice. Nelson v BBC (No 1)

[1977] IRLR 148 prohibited facts which had been found in relation to one test being applied to

[16] There was no obligation upon the ET to seek out a reason even when one wasn’t

advanced by the parties - Kuzel; ASLEF. The fall-back position was to hold that the

[17] The ET incorrectly applied Abernethy. An employer was only permitted to rely upon

a different label where it had made all the facts and beliefs known prior to dismissal. The

employer had not done so here. Nor was there notice contained in the ET3. Hotson v

Wisbech Conservative Club [1984] IRLR 422 was authority for the proposition that a

subsequent change of label or reason must not prejudice the claimant. The ET erred in

concluding that there was a breakdown in the relationship between the appellant and the

contractor which forced the employer to choose the contractor. Such a position was not

advanced in the ET3 nor in evidence. The ET even acknowledged the fact no evidence had

been led in its decision but still came to the conclusion that it did. Per Smith v City of

Glasgow District Council [1987] IRLR 326 where any part of a reason has not been established

in evidence, a tribunal could not adopt that reason. Other errors by the ET included an

incorrect reliance upon a finding that there was no dispute that the appellant was party to a

situation where planned fabrication was stopped (paras 94, 127). The appellant had

disputed this. There was no assertion by the employer or in the ET3 that the manufacturing

[18] The ET had failed to consider or expressly ignored evidence advanced by the

appellant, particularly in respect of items which it labelled as falling within Protected

Disclosure. It failed to consider the employer’s minutes which showed that the true reason

for the appellant’s dismissal was the complaints in the emails she had made, rather than a

breakdown in the relationship as the ET found. The minutes constituted strong prima facie

evidence of the true reason: Maund v Penwith District Council [1984] IRLR 24.

[19] In adopting McCrory v Magee t/a Heatwell Heating Systems [1983] IRLR 414 the ET had

[20] The ET erred in holding (at para 85) that a reason did not need to justify dismissal for

it to be a qualifying reason. The statutory test in fact provided the exact opposite. It was

also incorrect to say that its reason for dismissal required no fault on the part of the claimant

- see Wadley v Eager Electrical [1986] IRLR 93 - and that blame and fault could not save her

[21] The ET erred in its consideration and application of Polkey. The employer’s reason

for dismissal not having been established no deduction should therefore have taken place.

Esto it was open to the ET to adopt its own reason for dismissal, it could not lawfully adopt

that reason and use it for the purposes of applying a Polkey deduction. The ET did not

conduct a wider examination of all the circumstances, and in particular, the actions and

omissions of the employer. It had wrongly applied the “no difference” test to the Statutory

Dismissal Procedure; and incorrectly relied upon W Devis & Sons v Atkins 1977 ICR 662.

[22] The principles quoted by the ET from Software 200 Ltd v Andrews and Others

[2007] IRLR 568, in support of its approach related to redundancy only and were not applicable in

the present case. Triangle Cars v Hook [1999] UKEAT/1340/98 (1 July 1999) was, however,

[23] The ET correctly concluded that allegations of the appellant’s conduct in relation to

other individuals were unfounded; that “tittle tattle” was never raised with her nor

investigated; that these were issues upon which it did not require to adjudicate and that they

had played no part in the decision to dismiss (para 50 and 90). However, it wrongly took

these matters in to consideration when applying and making a Polkey deduction (para 120),

contrary to Swanston New Golf Club Ltd v Gallagher [2013] UKEAT/0033/13/BI.

[24] In calculating the uplift for failure to apply any of the statutory procedures, the ET

erred in assessing only the intent and effect on the outcome (para 133 and 134). The penalty

was not related to the effect on loss, but was to be judged by the degree to which the failure

inhibits the goal of clarifying the reason for dismissal prior to an ET claim: Alexander & Anor

[25] The real issues here are (i) whether the appellant had reasonable notice of the

underlying facts on which the ET based its decision; (ii) whether those underlying facts

featured in any way in the decision to dismiss, regardless of the label attached by the

employer to the dismissal; and (iii) whether the label attached by the ET was one which the

underlying facts might reasonably bear. The appellant maintains that the facts relied upon

by the ET relating to the alleged breakdown of relations with the contractor and the

stoppage of production had not been raised in the ET3 and had not been addressed in

evidence. It will be seen from the summary of the original ET3 noted above, and from the

[26] The original ET3 was not produced by the appellant; nor were various orders of the

ET and EAT which would have enabled this court to have a much clearer understanding of

the procedural steps which had been taken in the case, which has had a long and protracted

history. At the court’s request the original ET3 was produced, as were certain orders of the

Tribunal. It was apparent that the employer had been given leave to amend the ET3. The

terms of the original ET3 and that of the amendment, both of which appeared as a “paper

apart” are summarised at paras [3] and [4] above. It is not clear to us whether the second

paper apart was to be in addition to, or substitution for, the original. The ET made an order

seeking confirmation of this point from the employer, but since it, with numerous other

orders, has not been lodged, we do not know what the ultimate position was. However, this

appears to be of no moment. It is clear that the ET3 as originally provided gave the

appellant notice of matters which then featured in the ET’s decision. Moreover, it is clear

that evidence on these matters was led without objection. Not only was the stoppage and

the breakdown referred to, the ET3 noted that at the time of dismissal the issue of

communication with contractors and their importance to business efficiency featured in the

[27] The ET made certain findings in fact which were based on the evidence led before it.

These included a finding that an email from one of the employer’s managers, Mr Mills,

indicated that he had (a) spoken to the appellant suggesting she “grow up”; (b) spoken to

both the appellant and the contractor offering effectively to mediate but that the appellant

“is not up for that”. The appellant advised Mr Mills that she was thinking of resigning. The

Tribunal made a specific finding that the situation between the appellant and the contractor

“culminated in a production stoppage” and also led to the email of 11 April 2008 from the

Managing Director to inter alia the appellant referred to above. In response the appellant

again said she intended to leave, stated that she wished to do so on good terms and asked

for a reference. In respect of the management meeting which led to dismissal the ET made a

finding that “rather than finding workable solutions, it was felt the claimant had become

uncompromising in her way of working”. In the discussion which led to the conclusion that

a “clean break” dismissal within the probationary period was the way forward, the ET

found that the appellant’s stance and emails threatening to resign had featured. The ET

found Mr Mills to be a credible witness. He gave evidence that there was an onus on the

appellant as a senior employee of the company to find a resolution in the company’s

interests; that she had been given a lawful instruction to make progress on the project; but

that instead of doing so she made it plain she would not work with the contractor and was

considering resignation. The ET plainly accepted this evidence, as it was entitled to do.

Mr Mills accepted that issues relating to the appellant’s relations with internal staff had not

been raised with her, but made it clear that the situation with the contractor had been raised

with her (see eg para 43). Mr Mills attended the management meeting at which the decision

to dismiss was taken. At para 44 of its decision the ET noted that:

“Mr Mills believed the claimant’s inability to move work forward in an appropriate

manner by working with [the contractor], together with her clear desire to leave the

company and request a reference were two critical factors which, when taken

together with the history of difficulties in the engineering department and the

inability of the claimant to work well with other staff led to the decision to terminate

The ET did not in general criticise the credibility of the appellant, but clearly had issues over

her reliability, saying that “we accepted that she fundamentally believed what she told us.”

The ET specifically rejected her evidence that she had been given specific authority by the

Managing Director to deal with the contractor as she saw fit, even to the extent of removing

him from the project. They gave a valid and reasoned basis for doing so.

[28] During the hearing before the ET, the appellant made submissions regarding Polkey

and the basis upon which deductions may validly be made; and cited a total of 53

authorities which she subjected to a case by case analysis. It is instructive to note that these

included Abernethy; Software 2000; Devis; Nelson; ASLEF and Kuzel. It appears therefore that

the options which might be available to the ET, both in respect of finding a reason for

dismissal, and as to how to address the issue of deductions all featured in the discussion.

The appellant’s inability to work with the relevant contractor, and intransigence in that

regard, featured in the respondent’s submissions, which were that dismissal had been for

capability and conduct. It was submitted that her actions and attitude had “brought the

company to a crisis point in their operational progress.” It was submitted that the

appellant’s refusal to work with the contractor was “an invitation to the respondent to back

either the claimant or [the contractor] and the outcome of this choice was inevitable.” For the

company it was accepted that the statutory procedures had not been followed, but it was

asserted that it may have been open to the company to “have contemplated some other

substantial reason given the factors when combined”. Submissions were then made as to

[29] It is axiomatic that a tribunal which proceeded to decide a case on the basis of

material not aired in the proceedings, and of which the parties thus had neither notice nor

opportunity to comment would be acting unfairly. However, as can be seen from the

preceding paragraph, that is not what occurred in the present case. The essence of the

employer’s case was that whilst the claimant was dismissed because they understood it was

an action open to them without consequence during the probationary period, the reasons

which led them to that course of conduct were the breakdown in communications which

had led to the expensive business stoppage. Notice of this had been given in advance, had

been the subject of repeated discussions and emails with the appellant, and had featured in

the evidence led at the ET without objection. The possibility that the situation might have

amounted to some other substantial reason was specifically aired during submissions, and

the cases cited by the appellant confirm that she must have been aware of the possibility that

the ET might make a finding that this was the real reason for dismissal, on the same facts.

[30] The ET correctly directed itself on the issues arising from ASLEF and Abernethy, in

the terms noted at para [6] above. It is true that the ET misspoke in saying that there was

“no dispute” regarding the material facts relating to the contractor, which brought the

company to a crisis, led to the stoppage, and the 11 April email. However, it is clear that

these were the facts which the ET found to be established, and from its survey of the

position of the appellant and summary of her submissions there is no indication that it erred

in its assessment of the extent to which the appellant took issue with these matters. Her

position was clearly understood by the Tribunal which records her submission that she did

not consider herself to be at fault for the stoppage. The ET noted that the appellant was not

spoken to about the developing situation with the contractor, but recorded that action was

taken to try to resolve the situation through the use of an intermediary, and we have noted

above the findings in facts which were made in this respect. We consider that on these

findings the appellant did have sufficient notice of the underlying facts upon which the ET

eventually based its reasons, and in particular that the employer’s frustration with her

attitude to the contractor was known to her; further, that these facts were known to the

employer and featured in the decision to dismiss, even though the employer believed it

could simply dismiss because the probationary period had not concluded; and that on the

principles enunciated in Abernethy and subsequent cases in which that principle has been

refined the ET was entitled to make a finding that the real reason for the dismissal was some

other substantial reason, namely the crisis with the contractor and the stoppage. The ET

noted the appellant’s submission relating to Triangle Cars but stated that they were satisfied

that the respondent had taken steps to resolve the situation, and that when these failed (due,

as they had already noted, to the appellant’s unwillingness to engage), this led to the

employer having to make a direct choice between the appellant and a critical contractor.

We have been unable to identify any error by the ET in its approach to the Polkey deduction,

or that it misdirected itself in respect of Nelson. The issue of blame was considered in terms

by the ET. Criticisms were also directed at the 10 per cent deduction for contributory

conduct and at the 15 per cent uplift for failure to follow proper procedures, but suffice to

say that they were without merit. The appeal must therefore be refused.

Scottish Court of Session Decisions