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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Arbon v Welding Alloys Ltd [1995] UKEAT 706_93_2402 (24 February 1995) URL: http://www.bailii.org/uk/cases/UKEAT/1995/706_93_2402.html Cite as: [1995] UKEAT 706_93_2402

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BAILII case number: [1995] UKEAT 706_93_2402

Appeal No. EAT/706/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 24 February 1995

Before

THE HONOURABLE MRS JUSTICE SMITH

MS S R CORBY

MR A D SCOTT

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R J ARBON          APPELLANT

WELDING ALLOYS LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR T LINDEN

(Of Counsel)

Pattinson & Brewer

30 Great James Street

London WC1N 3HA

For the Respondents MR JAN STEKLEY

(Director)


 


MRS JUSTICE SMITH: This is an appeal by Reginald John Arbon from the decision from an Industrial Tribunal sitting at Bedford on 29 June 1993. The unanimous decision of the Tribunal was that Mr Arbon had been fairly dismissed from his employment with Welding Alloys Limited.

Mr Arbon was employed by the Respondents from 1969 until his employment was terminated with effect from the 20 March 1992. At first Mr Arbon had various duties which involved heavy lifting. This led to health problems, owing to a trapped nerve, which eventually resulted in 14 weeks absence on the grounds of sickness in 1989. On Mr Arbon's return to work, it was decided that he could no longer carry out any jobs involving heavy lifting and he was transferred to the job of storeman. The Tribunal found that he was absent from work for what they described as `substantial periods' in 1991. Those absences, as can been seen from documents before the Tribunal totalled 20 days in a 10 month period. The documents relied upon to prove this absence are mainly self certification forms which show a series of short absences for a variety of different reasons. The longest absence was for four days for an ear and throat infection. There were also documents before the Tribunal which showed that the Appellant was not a very good time keeper.

Mr Stekly, the Respondents' Managing Director, who has represented their interests before the Tribunal and before this Appeal Tribunal, formed the view that Mr Arbon's health was poor. That view was shared by Mr Harrison the Respondents' Project Manager. Mr Harrison had not given evidence before the Tribunal but it appears that Mr Stekly had said that Mr Harrison also thought Mr Arbon's health was poor. The Tribunal considered that the conclusion reached by Mr Stekly and Mr Harrison was not unreasonable, in the light of the sick notes. Mr Arbon had told the Tribunal that he had a trapped nerve in the back and that had some difficulty in carrying heavy work loads. In particular a sick note submitted in November 1991 described a fall, after which he had been unable to return to work in the afternoon because his leg and hip had given way on entering his house at lunch time. It appears on that occasion that he was only absent for one day.

However, the Tribunal formed the view that it was reasonable for Mr Stekly and Mr Harrison to have concluded that Mr Arbon's condition was serious and was one which prevented him from performing his duties. We interpose to say that there been no evidence that Mr Stekly or Mr Harrison consulted a doctor or required Mr Arbon to consult a doctor as to his capability for work. Having concluded that Mr Arbon's condition was serious, Mr Stekly then decided that the best course would be to propose to Mr Arbon that he should leave the company under a financial scheme or package which was put to him on the 30 January 1992, that is about six weeks before his dismissal.

The scheme proposed was set out in document A1 and explained to the Tribunal and has been explained to us by Mr Stekly during the course of the hearing. The proposal was that Mr Arbon should leave the company and should claim Sickness Benefit. After six months of continuous absence from work, he would be entitled to receive Invalidity Benefit which would have been at a higher rate that ordinary Sickness Benefit. The scheme envisaged that Invalidity Benefit would be payable at £83.25 a week. The scheme then proposed that at that stage the company should employ Mr Arbon on a part time basis paying him £51.25 a week. Thus he would receive £134.50 per week. As his current weekly net pay was £144.50, under the scheme, at the end of six months, he would suffer a short fall of only £10. The scheme also envisaged the possibility that the company could continue to make payments into Mr Arbon's pension scheme which would result in him receiving a much improved pension at the age of 65 than would be the case if he were dismissed or retired early at his present age of 60.

The Tribunal found that Mr Stekly's scheme was put to Mr Arbon on 30 January 1992. Mr Arbon agreed that he was presented with the scheme as a package deal. Mr Arbon said that he read it over, took it home, talked to his wife and then consulted his doctor. He told the Tribunal that his doctor told him he could not certify him as being incapable of work. Mr Arbon did not tell Mr Stekly that his doctor had so informed him. On the 20 March, Mr Stekly caused a letter to be written and delivered to Mr Arbon which effectively dismissed him. It said:

"Unfortunately, it has been clear for some time now that your health has been deteriorating and the number of days that you have been sick have been increasing. As you will appreciate, the job that you do now, which involves reasonably arduous duties from time to time is not conducive to improving your physical problems and, therefore, it is with much regret that we will have to terminate your employment.

It is my suggestion that you consult a specialist with a view to obtaining a permanent disability allowance."

Mr Stekly has told us that by "permanent disability allowance" he meant Invalidity Benefit. We interpose to observe that the letter is not factually accurate because the number of days which Mr Arbon had had off sick had not been increasing. The last full day that he had off had been the 19 November 1991. It is true to say that he had had some part days off since that time.

Mr Stekly told the Tribunal that the letter of dismissal did not contain all his reasons for dismissing Mr Arbon. The Tribunal found that it was Mr Stekly's intention that the scheme should be an agreed package. Mr Stekly was unaware that Mr Arbon's doctor had told him that he was not disabled and could not have Invalidity Benefit. Mr Arbon told the Tribunal he had told Mr Murray, the Sales Director that the scheme was not acceptable because the doctor would not certify him as disabled. The Tribunal were critical of Mr Arbon for not telling Mr Stekly that the scheme was not acceptable to him for that reason. They said:

"We think that it was up to Mr Arbon to make sufficient efforts to contact Mr Stekly himself, as he had ample opportunity to do in the 6 weeks between document A1 and the letter of the 20 March 1992. In our view it was entirely Mr Arbon's fault that he failed to indicate to Mr Stekly his disagreement to the proposal...

Mr Arbon's employment was terminated, Mr Stekly said, to enable Mr Arbon to proceed with the scheme. Mr Stekly had asked Mr Arbon to come back to see him when he had looked the matter over and Mr Arbon had failed to do so. Accordingly Mr Stekly assumed that Mr Arbon agreed with the scheme."

"If Mr Murray had been called as a witness, and if he had confirmed Mr Arbon's statement that Mr Arbon had told him that he, Mr Arbon, had seen the doctor, and that the proposal in A1 was not acceptable since the doctor was not prepared to certify him as disabled, then there would have been grounds for a claim of unfair dismissal, on the basis that a proper procedure was not followed. If such a claim had succeeded we would have considered, in deciding compensation, what would or might have happened if a proper procedure had been followed. See Polkey v Dayton Services Limited [1988] ICR 142 at 163. The facts would have emerged that either Mr Arbon was, for physical reasons, incapable of carrying out his duties as a store man, since they were too demanding for him in view of his back trouble; or he was capable of carrying out those duties, in which case his extensive absences and lateness were not excusable on medical grounds. In giving his evidence, Mr Arbon seemed to be unable to make up his mind whether or not he was capable of carrying out his duties as a storeman. His position seems to have been that he could only carry out those duties if all duties of heavy loading were carried out by somebody else which, in practice, they were not.

Either way, in our unanimous view, Mr Arbon would still have been reasonably dismissed. It is always unfortunate for an employee who carries out arduous physical duties when, for medical reasons, he becomes unable to continue those duties. However, this is no fault of the employer and it cannot be unreasonable to dismiss an employee in those circumstances. There is an even better case for dismissal if an employee's absences from work are excessive and there are no adequate physical or medical reasons for this. We are prepared to take the view that the former is the case, not the latter. If this is so, Mr Arbon ought to be able to get a disability pension after all, on the footing that the job required lifting, information which, it seems he failed to give his doctor."

Mr Linden, Counsel for the Appellant has submitted that the Tribunal found that the reason for the dismissal was Mr Stekly's mistaken belief that Mr Arbon was consenting to have his employment terminated so as to enable him to take advantage of the proposed scheme. Mr Stekly has submitted that that was not the reason given by the Tribunal as his reason for dismissing Mr Arbon. He submits that the Tribunal accepted that his reason was that he believed Mr Arbon to be incapable of carrying out his duties by reason of ill health. It has been stated many times in this Appeal Tribunal that it is the duty of an Industrial Tribunal to make plain the basis of their decision so that the parties may know why they have won or lost; See Meek v The City of Birmingham District Council [1987] IRLR 250. In our judgment, the best approach which an Industrial Tribunal can take in order to be certain that they make their decision clear, is to follow the relevant statutory provisions. In a case of unfair dismissal, the Tribunal should make an express finding under Section 57(1) and (2) of the Employment Protection (Consolidation) Act 1978 . They should state what was the reason (or the principal reason) for the dismissal. This Tribunal has not done so.

It seems to us that there were here several possible reasons any of which the Tribunal could have found was the principal reason for the dismissal. First of all, it would have been open to the Tribunal to find that the Appellant was dismissed for incapability due to ill health. That was the reason advanced in the letter of dismissal, signed on behalf of Mr Stekly on 20 March 1992. Mr Stekly told the Tribunal that in truth he had dismissed the employee for a mixture of reasons which included his incapability due to ill health. Four such reasons were set out in the Notice of Appearance:

"a) His timekeeping was incorrect. He was given notice that his timekeeping was incorrect (see enclosed letter), despite which his timekeeping did not improve (see late arrival, 23rd February - 45 minutes, and 12th March - 2 hours.)

b) His state of health, mentally and physically, was inadequate. This meant he was unable to handle any loads due to a spine problem, and his absences from work were too substantial.

c) His poor standard of education was such that it was impossible to train him (he refused to accept suggested training into current methods of stock control).

d) Mr. Arbon was prone to deliver verbal abuse towards virtually every employee, and this included the Directors and in dealing with customers. No employee of this company would willingly wish to work alongside, or in any way be associated with Mr. Arbon during any of his outbursts, of which there were sometimes several daily."

Thus the second possibility open to the Tribunal was to find that the reason for dismissal was the mixture of incapacity and misconduct set out in the Notice of Appearance. The Notice of Appearance went on to mention the scheme under which it was proposed that Mr Arbon's employment should cease. It was said that Mr Arbon had accepted that the scheme was adequate and had said he would attempt to implement it but that it appeared now to be unacceptable to him. The third possible reason was that Mr Arbon was dismissed because the employer mistakenly believed that he had consented to the termination of his employment, so that he could draw Invalidity Benefit and come back to part time work in six months time.

It appears to us that the Tribunal probably found that this third reason was Mr Stekly's real reason for dismissing Mr Arbon. If it was, it was plainly not a reason which fell within section 57(2) of the Act. The Tribunal do not appear to have considered whether that reason was some other substantial reason of a kind such as to justify the dismissal of an employee. If they did consider that this reason amounted to some other substantial and potentially fair reason for dismissal, they would then have turned their attention to section 57(3) and would have considered whether in the circumstances the employer acted reasonably or unreasonably in treating the reason as a sufficient reason for dismissing Mr Arbon. There is no sign that they considered this issue at all. If they had considered it, they could not, in our view, have concluded that the dismissal was fair.

There are two factors which we consider are matters of great importance. First, it is not disputed between the parties that the question of the legality of the proposed scheme was discussed before the Industrial Tribunal. Mr Allenson for Mr Arbon submitted that the scheme was of doubtful legality. Mr Stekly has admitted to us that he was uncertain of the scheme's legality. It appears to us that a scheme which entails the drawing of Invalidity Benefit in conjunction with a part time job must be of doubtful legality. Mr Stekly says today that he has taken instructions from the DSS and that they have told him that it may be possible to draw Invalidity Benefit while working part time. What can be said with certainty is that although the legality of the scheme was raised before the Tribunal, it was not resolved. There were no findings of fact or of law, one way or the other. In our judgment an Industrial Tribunal could not properly find that an employer had acted reasonably in dismissing an employee in the belief that he had consented to a scheme which might be unlawful. It seems to us that such a course of action is manifestly unreasonable on the part of an employer.

The second factor about which we are concerned is the Tribunal's conclusion that it was Mr Arbon's own fault that Mr Stekly made the mistake of believing that he was consenting to leave and embark upon the scheme. We consider that no reasonable Tribunal could have reached that conclusion.

In our judgment where an employer proposes to terminate an employee's employment in the belief that the employee consents to that course, the onus must be upon the employer to satisfy himself that consent has been given. In our view, this Tribunal erred in blaming Mr Arbon for Mr Stekly's mistaken belief that Mr Arbon was content to leave and embark upon the scheme. No reasonable employer would have acted as Mr Stekly did, in dismissing Mr Arbon without first speaking to him again about his willingness to adopt the scheme.

That is sufficient to demonstrate that this decision is flawed and cannot stand. However because of the way in which the Tribunal have set out their decision and because of Mr Stekly's contention that the Tribunal found that he dismissed Mr Arbon because of ill health, we think it is appropriate that we should consider the later passages of the decision in which the Tribunal discussed an alternative basis for their decision that his dismissal was fair.

We have already cited the passage in which the Tribunal speculated as to what might have been the situation if they had been satisfied that Mr Arbon had indeed told Mr Murray that his doctor would not certify him as disabled and that therefore the scheme was not appropriate. They said that in those circumstances they would have been obliged to hold the dismissal on grounds of incapability unfair, because a proper procedure was not followed. They did not say in what respect or respects they found that the proper procedure was not followed. However it has been urged upon us that there were several respects in which the procedures were defective. First, no medical evidence was obtained. Second, consultation may not have been adequate. Mr Arbon maintains that the only day on which he was consulted about his departure from the company was the 30 January 1992 although Mr Stekly says that the matter was discussed on many, many occasions. It is not open to us to draw any conclusions as to who is right about that. It may have been that the Tribunal thought that there was inadequate consultation. Third, we do not know what the Tribunal thought about the need for the employer to warn Mr Arbon as to his absences from work, before deciding to dismiss him. They postulate the possibility that Mr Arbon's illness was not genuine as Mr Stekly now believes to be the case. If it were not genuine then a warning would be appropriate before dismissal. We do not know what the Tribunal thought about that.

The Tribunal said that if they had indeed found the dismissal to be unfair, for procedural reasons, they would have awarded no compensation because they would have concluded that in any event Mr Arbon would have been fairly dismissed. Either his illness would have meant that he was incapable of doing the job or, if he were not ill, his absences would have amounted to unacceptable misconduct. They say that they would have awarded no compensation.

We regret to say that we consider that that too was a conclusion which the Tribunal could not properly have reached. First, they have not made any findings as to the inadequacies of the procedures. Without such findings it seems to us impossible for them to have concluded that following proper procedures would have made no difference. Second, they do not appear to have considered what might have happened had proper consultation occurred or medical evidence been obtained. We consider that they have misdirected themselves even on the basis of their alternative consideration of the case.

Accordingly we have reached the conclusion that this decision is so seriously flawed that it cannot stand. We have given anxious consideration as to what we should then do.

Mr Linden has submitted that we should find the dismissal unfair. He argues the reason found for the dismissal was Mr Stekly's mistaken belief in Mr Arbon's consent to termination. Mr Stekly would be obliged to pursue that same reason again if the matter were to be reheard. Thus it would be impossible for a finding of fair dismissal to ensue. If we were sure that the Tribunal had found that the reason for dismissal was Mr Stekly's mistaken belief, we would accept that submission. However we are not sure what the Tribunal's finding was as to the reason for dismissal. It does appear that the Tribunal accepted as genuine Mr Stekly's belief that Mr Arbon was incapable of carrying out his duties. They might have thought that was the reason for dismissal. We cannot conclude that it is inevitable that this dismissal will be found to be unfair.

Accordingly we have with regret reached the conclusion that the case must go for rehearing on all issues by another Tribunal. Therefore the appeal is allowed and the case will be remitted for rehearing.