Appeal No. EAT/970/93

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 22 November 1994

	Before

	THE HONOURABLE MR JUSTICE HOLLAND

	MRS M L BOYLE

	MR K M HACK JP

MR D R PEDDER	APPELLANTS
T/A D R PEDDER VEHICLE
REPAIR & TYRE CENTRE

MR G BIRD	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR A SUTCLIFFE
Manager
Advocacy
Peninsula Business 
Services Ltd
Advocacy & Litigation Department
Stamford House
361/365 Chapel Street
Manchester
M3 5JY

For the Respondents	MR H R VINCENT
	Representative
	Oldham Law Centre
Prudential Buildings
	79 Union Street
	Oldham
	OL1 1HL

	MR JUSTICE HOLLAND:   This is an Appeal by the Respondents against a Decision of an Industrial Tribunal sitting at Manchester, which Decision was reserved and eventually made on 30 April 1993.

	The decision was that the Applicant had been unfairly dismissed by the Respondents.  The circumstances giving rise to the application can be shortly stated.  The Applicant is a young man, his date of birth is 2 November 1969 and the Respondents trade as a small garage firm with Mr Pedder as principal.

	The Applicant's employment with the Respondent commenced on 8 August 1988.  His then employment was as assistant motor mechanic, his employment having arisen through the YTS scheme.  By 26 June 1990, his position had become that of sole motor mechanic answerable directly to Mr Pedder.  The subsequent events were succinctly, even tersely summarised in the Reasons.  For our present purposes however, such summary will suffice.  It reads as follows:

		"2. We find on the evidence, having heard the applicant and the respondent that:-

			(a)  the Applicant was responsible for a number of incidents of defective workmanship;

			(b)  the applicant was shy of informing the respondent of these incidents as he had been told to do on a number of occasions by the respondent;

			(c)  these incidents occurred variously before and after the applicant became the respondent's sole motor mechanic on 26 June 1990;

			(d)  following each occasion of defective workmanship the applicant was told by the respondent, firstly, where he had gone wrong, and secondly, always to seek advice when he was having difficulty and not to repeat any problems or mistakes;

			(e)  notwithstanding such requirements he did not seek advice, nor report problems or mistakes.

		3.  On 22 February 1992 the applicant damaged the hub of a vehicle at the respondent's premises for repair.  As a result the wheel seized.  This forced the applicant to report the problem to the respondent on this occasion.

		4.  The respondent, as a result of this incident, first told the applicant off as he had done on previous occasions and then suspended the applicant on full pay 2 days later having spent the weekend considering the matter further.  He then called the applicant to a meeting which was in the event held on 26 February 1992 when he handed the applicant a letter outlining the incident complained about and explaining the applicant's rights of hearing and representation.

		5.  However, the respondent there and then continued to deal with the matter, concluding with the dismissal of the applicant which was confirmed in writing the next day.  Although there was reference in that letter to a right of appeal, the applicant did not appeal. 

	In the event, on 25 March 1992, this application was made to the Industrial Tribunal alleging unfair dismissal.  

	On 19 January 1993, the hearing started before a Tribunal consisting of Mr M.W. Brunert as Chairman, and Members Miss P.J. Byrne and Mr K. Taylor.  For the purpose of that hearing, the Chairman took a very full and careful note.  From that note we learn that on that day the Tribunal took full evidence from the Respondent, Mr Pedder.  At the conclusion of his evidence, the matter was adjourned to 9 March 1993.  On that latter date the hearing of evidence was completed, again with the benefit of a full note being prepared by the Chairman.  The hearing was then adjourned for a Reserved Decision, the date to which it was adjourned being expressed to be 28 April 1993.  

	In the event, the Reserved Decision was seemingly made on 30 April 1993 and was communicated to the parties in writing on 7 May 1993.  That decision was then expressed to be in terms "the unanimous decision of the Tribunal is that the applicant was unfairly dismissed and that this application be adjourned to 21 May 1993 for the hearing of evidence on remedies".

	Turning to the Reasons, the Reasons were specified as given in summary form.  As said to be in summary form the reasons appeared in paragraphs 6 and 7.  Those paragraphs read as follows:

		"6. On the forgoing basis we find that the respondent acted precipitously in dismissing the applicant.  We find that he should have, in fact, held a proper disciplinary hearing as his letter of 26 February 1992 outlined and if he had, as a result, concluded that the applicant was guilty of misconduct, he should properly, in the circumstances of this case, have issued the applicant with a formal written warning which he could have expressed to be final, in our view.

		7. In coming to our conclusion we have applied to the circumstances of this application the provisions of Section 57(3) of the Employment Protection (Consolidation) Act 1978". 

	The balance of paragraph 7 is taken up with the terms of that subsection.

	We then turn to the subsequent procedural history.  On 10 May 1993, that is following receipt of what were expressed to be the "Summary Reasons", Mr Sutcliffe on behalf of the Respondent, wrote to the Assistant Secretary of the Regional Office of the Industrial Tribunal in these terms:

		"I acknowledge receipt of the Industrial Tribunal's reserved decision in which reasons are given in summary form.  I also note that it appears this matter has been adjourned to 21st May 1993 for the hearing of evidence on remedies.  Having only received this decision today, we do not appear to have received the requisite 14 days notice and I am scheduled to be representing in another case on that day.

		Furthermore, we would like to request full written reasons of the Tribunal's decision and be in receipt of these prior to any hearing on remedies as we may wish to look at any procedural defects as they may affect the issue of remedy.

		I trust we will receive full written reasons of the Tribunal's decision in the first instance and secondly, be invited to a agree a date for a hearing on remedies after the aforementioned full written reasons have been received".

	The response came two days later by way of a letter of 12 May.  It reads:

		"The Chairman of the Tribunals has read your letter of 10 May 1993, and directs me to reply that a copy of your letter has gone to the applicant's representative today for his representations on your request for an adjournment from 21 May 1993, on question of remedies.

		The Chairman will decide on your request once he has seen the applicant's representative's reply.

		In regard to your request for full reasons prior to the remedy hearing, the Chairman refuses the request".

	Mr Sutcliffe, for the Respondents replied on 17 May.  He noted in his reply that the Chairman had refused to provide full written reasons for the Industrial Tribunal's decision prior to the remedies hearing.  He then went on:

		"I trust that if the remedies hearing is postponed this will not artificially delay the production of these full reasons for the Tribunal's decision and I trust you will confirm that full written reasons are to be provided in reply to my request of 10th May 1993".

	That received a response of 18 May in which he was notified that the application for an adjournment from 21 May was to be granted in the circumstances and that a hearing would be arranged in due course.  On 21 July Mr Sutcliffe wrote again:

		"We wrote to your office on 10th May 1993, asking for the full written decision of this case to be produced before its original scheduled remedies hearing on the 21st May 1993.

		My understanding is that the Chairman refused to produce full written reasons prior to that hearing, however, matters have moved on and that particular hearing has been postponed.  It is now awaiting relisting and as I indicated to you in my letter of 17th May 1993, I did hope that the postponement of the remedies hearing would not delay the production of the full reasons for the Industrial Tribunal's decision.

		I asked in that letter if you would confirm that the full written reasons would be provided in reply to my request of 10th May 1993.  As it is now over two months since that enquiry and I have neither received your confirmation, nor a copy of the full written reasons of the Industrial Tribunal's decision, I felt it appropriate to write to you again and ask what progress was being made with the production of these full written reasons".

	He received an acknowledgment to that letter dated 30 July which read:

		"Your letter of 21 July has been referred to the chairman who confirms that the request for full written reasons to be given prior to the remedy hearing is refused, and directs that application be re-listed for remedy as quickly as possible". 

	They then indicate in the balance of the letter that a hearing date would be notified as soon as possible.  Mr Sutcliffe, understandably, wrote at some length on 6 August.  We quote from the opening part of his letter:

		"I write with regard to this case because I am a little concerned about the fact that a Chairman of Industrial Tribunals is for some reason artificially delaying producing full written reasons for this case and has refused to produce these full reasons until what appears to be an artificially extended period of time, being after the remedies hearing has been resolved.

		I could understand it if no reasons had been produced and the Chairman may wish to have the merits reasons and remedy reasons promulgated together, but whereas in this case summary reasons have already been produced on the merits hearing, I cannot understand the refusal to produce full written reasons until after the remedies hearing has been resolved.

		This is particularly difficult in these circumstances because in the light of the `percentage view' in relation to `any difference test', arising out of Polkey  v  A.E. Dayton Services Limited (1987 IRLR 503), specifically approving the speech of Brown Wilkinson J. in Sillifant  v  Powell Duffryn Timber Limited (1983 IRLR 91), and all the various cases that now flow from that principle establishing what would have happened had procedural matters been handled differently

		It is helpful to have a detailed understanding of the Tribunal's criticism of any procedural defect in a dismissal case, in order that one is able to produce either additional evidence or a legal argument in relation to the `any difference test' whether it be an all or nothing decision or a level of doubt expressed as a percentage, such as in the case of Rao  v  Civil Aviation Authority (1992 IRLR 203)

		One would have thought (and it is the practice at certain Industrial Tribunal Offices) that receipt of the full written reasons would be useful to assist with this process.  It is particularly relevant in this case because the decision of the Industrial Tribunal was reserved and the only indication we have of the Tribunal's reasoning behind their decision of a finding of unfair dismissal is that contained in the summary reasons .

	By a letter of 16 September, he received a reply.  The relevant passage reads as follows:

		"He [the Chairman of the Tribunal] asks me to make it clear that he has not, as you put it, `artificially delayed' the production of full written reasons for this case, nor does any artificiality exist with regard to any element at all".

	The letter then goes on to deal with the date for the remedies hearing and explains the delay in providing a date.  The letter then continues:

		"On reading your letter of 30 July the Chairman directed that the remedies hearing take place as early as possible.  That has been the intention all along.  Consultation will now take place in order that a date for that hearing can be fixed as soon as possible.  At the remedies hearing the Tribunal will hear any appropriate submissions, with regard to the Polkey Case and as to contributory conduct".

	It then, so far as material to this matter of Reasons, concludes:

		"The Chairman has reviewed the Decision and the Reasons and has read in full his Notes of Evidence taken at the hearings on 19 January and 9 March 1993.  It is clear to him that the Reasons given for the Decision should have been expressed as Full Reasons.  There is nothing in the Notes of Evidence that would cause any addition or other alteration to the Reasons given to be made.  It is clear to him that he made an accidental slip in describing the Reasons given as "summary".  Accordingly, a certificate of correction is being issued by virtue of Rule 9(9) of the 1985 Regulations to make paragraph 1 of the Reasons in this case read "These reasons are given in full".  

	The letter concluded by indicating the copy was being sent to the applicant's representative.

	On 11 October, Mr Sutcliffe received a further letter from the Regional Office.  This read as follows:

		"I refer to my letter of 21 September 1993 informing you that the hearing of this case will take place at 10.00 am on Friday, 29 October 1993.  I now regret to inform you that one of the Members of the Industrial Tribunal in this case has indicated that due to circumstances beyond her control she will probably not be able to attend on that date".

	The balance of the letter then goes on to ask Mr Sutcliffe whether he would agree to the Tribunal on that day consisting simply of the Chairman and the remaining Member, that is Mr Brunert and Mr Taylor.  Mr Sutcliffe replied on 14 October in these terms:

		"I note that you suggest that one of the lay members is not available to attend the remedies hearing on 29 October and have asked whether or not he would be prepared to agree to this hearing to be conducted simply by the Chairman and one lay member.  Might I say that in usual circumstances I would have no objection to this course of action.  However, with this particular case and bearing in mind his conduct in the past, I would feel the respondents would be happier at the full three member Tribunal were to hear the evidence and submissions in relation to remedy and compensation.  

		When we receive the reserved decision which was clearly stated to be in summary form on 7 May, we were very disappointed to learn there was a finding of unfair dismissal and that clearly the Tribunal had expressed their view rather than the view of a reasonable employer.  Furthermore, they had made errors in their findings of fact". 

	We need not trouble with the balance of the letter.  On 26 October Mr Sutcliffe had a short response.  The heading to the letter being "The Industrial Tribunals (Rules of Procedure) Regulations 1985", it reads:

		"The Regional Chairman has directed that the above-mentioned case remain in the list for hearing on Friday, 29 October 1993.  As Miss Byrne is indisposed another lay member will be appointed in her place at the hearing for remedy".  

	On 27 October the promised Certificate of Correction was issued making the forewarned alterations at the previously promulgated Decision and Reasons, and then on 29 October there was held the remedies hearing.  This time the personnel of the Tribunal were Mr Brunert, Chairman, Mr Taylor as before, but Mr Ecclestone being substituted for Miss Byrne.  That Tribunal, as so constituted, announced its decision and then sent it to the parties in writing on 24 November 1993, together with Reasons described as "Summary".

	Dealing with those Reasons, it is material for present purposes simply to read three paragraphs thereof which refer back to the earlier Decision.

		"3.  The applicant was dismissed and the effective date of termination of his employment was 26 February 1992.  

		4.  The reason for the dismissal was gross negligence and carelessness in his work.

		6.  The dismissal was unfair having regard to the criteria in Section 57(3) of the 1978 Act for the reasons set out at paragraph 6 of our Decision on merits.

		7.  The applicant contributed to his dismissal because in regard to the incident which led to the dismissal he had failed to report to the respondent a mistake in his work and by such failure he had repeated similar failure on several previous occasions despite his knowledge (which he confirmed in evidence) that communication of mistakes or difficulties in work and the seeking of advice and/or assistance was a prime requirement of the respondent.  The percentage reduction should be 50% in relation to both the Basic Award and the Compensatory Award.  We consider that to be the just and equitable reduction in all the circumstances of this Application". 

	And then:

		10. "In calculating compensation we have taken into account, in addition to the applicant's age and length of service, the efforts he made to find new work following dismissal and the continuing partial loss of wage as against what he was earning with the respondent.  We find the applicant has sufficiently mitigated his loss.  Finally, we have reduced the amount of compensation by 50% in order to reflect our views of the applicant's contributory conduct.  We make a further reduction of 20% in the net Compensatory Award (ie after the 50% reduction referred to above) to reflect our assessment that the applicant would still have lost his employment but for the matters contained in paragraph 6 of our Decision on merits following the principle contained in Polkey  v  A E Dayton Services Ltd [1987] IRLR 503 in the House of Lords.  We have determined that on a balance of probabilities".

	It should be noted that nowhere in these Reasons is there any reference to the circumstances in which there was a change in the composition of the Tribunal.  Having therefore set out the history of this matter with some deliberate care, we turn to the Appeal.

	At the outset of our hearing, this Tribunal had an immediate concern as to the terms of the Reasons for the Decision of 30 April 1993, which Reasons became in due course to be categorised as "Full".  Our concern reflected two matters.  First, we were concerned because of the observations of the Court of Appeal in Meek  v  City of Birmingham District Council [1987] IRLR 250.  In that decision the Court of Appeal had occasion to consider the Reasons promulgated by an Industrial Tribunal for a ruling that the Applicant had been unfairly dismissed, and had therefore to occasion to consider the standard that ought to be achieved by those who prepared such Reasons.  

	The decision of the Court of Appeal is apparent from a short passage in the judgment of the Court which was given by Lord Justice Bingham.  It reads:

		"It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of refined legal draftsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons which have led them to reach the conclusion which they do on those basic facts.  The parties are entitled to be told why they have won or lost.  There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises; and it is highly desirable that the decision of an Industrial Tribunal should give guidance both to employers and trade unions as to practices which should or should not be adopted".

	Our concern, secondly, reflects our understanding of the issues to which this Industrial Tribunal should have directed itself in order to arrive at a finding of unfair dismissal.  The source of such issues has to be Section 57 of the Employment Protection (Consolidation) Act 1978, which so far as material reads as follows:

		"(1)  In determining for the purposes of this Part whether the dismissal of an employee was fair or unfair, it shall be for the employer to show - 

			(a)	what was the reason (or, if there was more than one, the principal reason) for the dismissal, and

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

		(2)  In subsection (1)(b) the reference to a reason falling within this subsection is a reference to a reason which -

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

			(b)	related to the conduct of the employee....".

	We need read no further. Subsection 3:

		"(3)  Where the employer has fulfilled the requirements of subsection (1), then .... the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether, in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case. 

	To fulfil the requirements of that section in the circumstances of this case, the Industrial Tribunal should have made findings as to the following matters:

		"(1)  Had the respondents shown a reason for the admitted dismissal of the applicant?

		(2)  Was that reason within subsection (2), that is, did it relate to the applicant's capability or qualifications for performing the kind of work for which he was employed or did it relate to his conduct or did both categories of reasons found the dismissal?

	We interpose.  As has been pointed out to us in argument, there was an apparent issue before this Industrial Tribunal as to the reason for dismissal.  That argument arose because there was a contrast between the reason apparent from the contemporaneous documentation, which reason related to bad workmanship and the reason given in evidence to the Tribunal which invoked reliance upon the Applicant's lack of candour in reporting errors.

	We return to the required findings and the third, that is:

		(3)"Whether, in all the circumstances, including the size and administrative resources of the Respondents' undertaking, the equity and the substantial merits of the case, the Respondents had acted reasonably or unreasonably in treating that reason as sufficient for dismissing the Applicant"?

	Having thus analysed the issues for resolution we turn back to paragraphs 6 and 7 of the Reasons that were expressed to be "Full", and notwithstanding our bias in favour of the succinct, we cannot discern therein finding sufficient to fulfil the requirements posed by Section 57.  Thus, although the focus that is expressed to be upon Section 57(3) makes it implicit that there were findings pursuant to subsections (1) and (2), such are not set out.  That in turn means that no reason for dismissal is clearly specified for the purpose of the balancing exercise required by subsection (3) which in further turn means that this Appeal Tribunal cannot safely review that exercise whereby to discern whether any question of law arises.  

	In the result two members of this Tribunal were driven to assume that any reason for dismissal as shown by the employers was found to be sufficient to justify immediate dismissal, but that such was precipitous given the lack of a proper disciplinary hearing, an assumption that accorded with the subsequent 20% discount made pursuant to Section 74(1) seemingly to reflect the potential for dismissal had there been no procedural defect.  The third member assumed that any reason relied upon had been found to be insufficient to justify immediate dismissal so that, as was seemingly found as a consequence, a formal written final warning would have sufficed in place of dismissal.  That such alternative interpretations of the Tribunal's findings should have been open, each sustainable by reference to different parts of the text leads inexorably to our unanimous finding that these Reasons are so defective that they do not satisfy the standards set by the Court of Appeal in Meek  v  City of Birmingham District Council, and taking this view and doing so reluctantly, this Tribunal has considered the Decision of 24 November 1993, following the Remedies Hearing on 29 October 1993, to see whether that served to illuminate the reasons for the earlier Decision.  We are satisfied that it does not assist, and given that the Tribunal was then differently constituted, it would be surprising if it did.  Incidentally, that further Decision is itself flawed and not only by being speculatively founded in terms of factual findings.  The deduction pursuant to Section 74(1) should be made before any further deduction pursuant to Section 74(6) - see Rao  v  Civil Aviation Authority [1994] ICR 495 at 501.  Had such been done a different result would have followed.

	What then, do we direct?  Although we are acutely conscious of the passage of time already featured in the procedural history of this matter, we are satisfied that the inadequacy of the Reasons rendered the Decision prima facie perverse, so that we have no option but to remit the case for a fresh hearing of all issues by a differently constituted Tribunal.  Further, we record our concern at that procedural history and in particular at the delay and prevarication in the face of a proper request for Full Reasons.  

	It is the more regrettable when we reflect that had the response been appropriate, then Reasons that were adequate to satisfy the parties, further alternatively this Tribunal may well have been forthcoming, not least when there was available a seemingly comprehensive note of the evidence upon which to base such.  

	We particularly draw attention to the opening paragraphs of the letter of Mr Sutcliffe of 6 August pointing out the implications of a failure to provide Full Reasons.  We wish to associate ourselves with the concern that he expressed and the manner in which he expressed it.

	It follows that we think it right further to direct that the attention of the Regional Chairman be drawn to this case and to this judgment.  We think that he will be concerned by such and will wish to reflect upon the procedural history to see whether lessons cannot be learnt.  Yet further, he may think it right to do everything within his power to ensure that the unfortunate parties have the benefit of an early hearing.

	We cannot leave this matter without drawing attention to a further feature that has concerned us.  In the procedural history we have set out the events which led to the substitution of Mr Ecclestone for Miss Byrne as Members of he Tribunal part way through the disposal of this matter, that is between the hearing as to the dismissal and the Remedies Hearing.  

	We have considered in that context the then prevailing regulations.  The letter notifying the change invoked the Industrial Tribunals (Rules of Procedure) Regulations 1985.  Those regulations refer the reader to the Industrial Tribunal (England Wales) Regulations 1965 with respect, to the constitution of Tribunals.  Turning then to Regulation 5, sub-regulation 4 we read:

	"The President or a Member of the Panel of Chairmen for the time being nominated by the President for the purpose, may at any time select from the appropriate panel another person in substitution of the Chairman or other member of a Tribunal previously selected to hear an appeal".  

	We are disposed to imagine that it was that power which was exercised in order to make the substitution in this case.  For our part we have not had a full argument on the point, but we respectfully question whether it is appropriate to effect any such substitution mid-way through proceedings that are current.  Even the law gives a discretion to do so, we are quite satisfied that it must be wrong to exercise such, save in extreme circumstances and after  giving the parties opportunity to make representations.

	We draw attention again to the history of this matter which shows that the step was taken administratively and without any invitation to the parties to consider the implications of such a course.  Yet further, we are quite satisfied that given that such a substitution was made, the fact of such substitution should have been set out in the Decision that followed the hearing of 29 October, together with the reasons for such substitution.  

	Finally, we draw attention to the potential significance of the part played in that latter hearing by Mr Ecclestone, that is, a person who had not heard the evidence for the purposes of the preceding hearing.  We hope that Mr Ecclestone did not make a contribution to so much of the Decision as is reflected in paragraphs 7 and 10 of the Reasons, given that he had no knowledge whatsoever of the contents thereof.  If that be the position one may ask rhetorically, as to what actually his role was for the purposes of that hearing?  All this now may be academic given that the case is to be remitted for hearing by a fresh Tribunal, but once again here is a procedural step in the history of this case which understandably causes concern to this Tribunal and which, again may be the matter for careful reconsideration by the Regional Chairman.  We would however emphasise that we have not had full argument before us on this point, it being a point taken by this Tribunal and not by the parties themselves.