Appeal No. EAT/968/94

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 14th September 1995
		Judgment delivered
		On 10th November 1995

	Before

	HIS HONOUR JUDGE J HICKS QC

	MR D J JENKINS MBE

	MRS M E SUNDERLAND JP

WILLIAM LEWIS	APPELLANT

SKF (UK) LIMITED	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR B CARR
	(of Counsel)
	Messrs Rowley Ashworth
	Wimbledon
	London SW19

For the Respondents	MR N CHRONIAS
(Legal Advisor)
Engineering Employers Federation
Broadway House
Tothill Street
London SW1H 9NQ

	JUDGE HICKS Q.C.:  The Industrial Tribunal from which this appeal is brought had before it a complaint by the appellant, Mr Lewis, of unfair dismissal.  The facts found by the tribunal and its conclusions on the issue of unfair dismissal appear from paragraphs 1 to 4 of its reasons, as follows:

		"1		The applicant was employed as a warehouseman by the respondents from April 1988 until they dismissed him in September 1993 for misconduct arising out of the fact that he had pestered a lady security officer, a Ms Ball, at his place of work in circumstances which led to her to complain to the respondents of harassment. The complaint did not allege any assault of any kind and was limited to occasional suggestive verbal approaches to which Ms Ball took exception.

		2		At the end of April 1993 the applicant was involved in an altercation with a colleague, Miss Linda Goodfellow, which led to a disciplinary interview after which he refused for about an hour to comply with a management requirement that he leave the premises on suspension. By letter dated the 1 June 1993 the respondents advised him that he had been given two stage 1 warnings for those offences. He appealed against those warnings and it is common ground that at the date of his subsequent dismissal the appeal procedures he had invoked had not been finally exhausted.

		3		Following upon the complaint made by Ms Ball, referred to above, the respondents suspended the applicant and conducted a full investigation of the circumstances giving rise to the complaint at the end of which, taking a serious view of the applicant's conduct, they dismissed him. The respondents agree, however, that they would not have dismissed the applicant on this occasion had it not been for the warning he had received as recorded in their letter to him of the 1 June 1993.

		4		Given that the applicant's final appeal against the last mentioned warnings was still, by reason of the incidence of holidays, outstanding at the time of his dismissal the tribunal finds that the respondents acted unreasonably and therefore unfairly in counting those warnings against the applicant for the purpose of concluding that he must be dismissed for his misconduct in respect of Ms Ball. In addition, the tribunal is satisfied that in any event dismissal for misconduct was a sanction which no reasonable employer would, in the circumstances and having regard to the absence on the applicant's formal record of any misconduct before the end of April 1993, have thought it necessary or appropriate to impose."

	Mr Lewis sought reinstatement or re-engagement and the tribunal ordered re-engagement on terms which included as term 9 the following:

		"9.	The applicant is to be treated as having received a stage 3 written warning on the date of his dismissal about the problems involving Ms Ball and as having no earlier warnings on the record."  
	
	The order for re-engagement was complied with and Mr Lewis is again working for the respondent, SKF (UK) Ltd.

	Although the Tribunal found the dismissal unfair it is implicit in their reasons and in term 9 that they cast no doubt on the employer's conclusion that Mr Lewis had sexually harassed Ms Ball, and that nothing in their decision (as nothing, we may add, in ours) should be understood as minimising the seriousness of that offence, albeit one which in the circumstances of this case the employer accepted as being insufficient in itself to justify dismissal.

	There is no appeal by the employer against the decision that the dismissal was unfair.  Mr Lewis appeals against the Industrial Tribunal's finding that he contributed to a significant  degree to his dismissal, expressed in paragraph 5 of their reasons as follows:

		"5		Following upon our finding the applicant seeks reinstatement in his old job or re-engagement under Section 69 of the Employment Protection (Consolidation) Act 1978. In exercising our discretion under that section we are required to consider whether it is practicable for the respondents to comply with any such order and, where the complainant caused or contributed to some extent to his dismissal, whether it would be just to make any such order. We have concluded that the applicant contributed to a significant degree to his dismissal by from time to time adopting an aggressive and uncooperative demeanour and attitude to disciplinary problems in which he was involved. That is not to say that he was unjustified in pursuing rights of appeal which the respondents' Rule Book conferred upon him, but we consider that the manner he adopted in pursuing those rights led inevitably to frustration and ill-will in those with whom he was dealing and were an important factor in their ultimate decision to dismiss him. For those reasons we do not consider it appropriate to order reinstatement."

	Section 69 of the 1978 Act, so far as material, reads as follows:

		"69	Order for reinstatement or re-engagement

		(1)	An order under this section may be an order for reinstatement (in accordance with subsections (2) and (3) or an order for re-engagement (in accordance with subsection (4), as the industrial tribunal may decide, and in the latter case may be on such terms as the tribunal may decide.

		(2)	An order for reinstatement is an order that the employer shall treat the complainant in all respects as if he had not been dismissed, ...

		(4)	An order for re-engagement is an order that the complainant be engaged by the employer, or by a successor of the employer or by an associated employer, in employment comparable to that from which he was dismissed or other suitable employment, and on making such an order the tribunal shall specify the terms on which re-engagement is to take place including-

		...

		(b)	the nature of the employment;
		(c)	the remuneration for the employment;
		(d)	any amount payable by the employer in respect of any benefit which the dismissal, including arrears of pay, for the period between the date of termination of employment and the date of re-engagement;
		(e)	any rights and privileges, including seniority and pension rights, which must be restored to the employee; and

		...

		(5)	In exercising its discretion under this section the tribunal shall first consider whether to make an order for reinstatement and in so doing shall take into account the following considerations, that is to say-

		...

		(c)	where the complainant caused or contributed to some extent to the dismissal, whether it would be just to order his reinstatement.

		(6)	If the tribunal decides not to make an order for reinstatement it shall then consider whether to make an order for re-engagement and if so on what terms; and in so doing the tribunal shall take into account the following considerations, that is to say-

		...

		(c)	where the complainant caused or contributed to some extent to the dismissal, whether it would be just to order his re-engagement and if so on what terms;

		and except in a case where the tribunal takes into account contributory fault under paragraph (c) it shall, if it orders re-engagement, do so on terms which are, so far as is reasonably practicable, as favourable as an order for reinstatement."

	As to what must be found to justify the conclusion that "the complainant caused or contributed to some extent to the dismissal" within the meaning of sub-sections (5)(c) and (6)(c) we were referred to two authorities.

	Robert Whiting Designs Ltd v Lamb [1978] ICR 89 was a case where the employer dismissed, ostensibly for misconduct but in reality, as the Industrial Tribunal found, for incompetence.  Nevertheless there had been misconduct by the employee as well as incompetence.  Much of the judgment of the Employment Appeal Tribunal is directed to the question whether, as the Industrial Tribunal had decided or assumed, only conduct going to the "real" reason for dismissal could be taken into account as contributory conduct or whether, as the appeal tribunal held, the misconduct on which the employer had ostensibly but fictitiously founded the dismissal could weigh in the balance if it in fact contributed to the dismissal.  The element of a "bogus" reason is not a feature of the present case, but in a sentence of more general application Kilner Brown J at page 92 G said: 

		"The employee's conduct certainly contributed to his dismissal in the sense that it was a factor in the minds of the employers." 

	We were also referred to Morrison v Amalgamated Transport & General Workers' Union [1989] IRLR 361, again not for the facts but for the following summary in the headnote, which accurately reflects the judgment of Kelly LJ, with whom MacDermott LJ agreed:

		"	The authorities establish the following principles and guidelines for determining contributory fault: (i) the Tribunal must take a broad common sense view of the situation; (ii) that broad approach should not necessarily be confined to a particular moment, even the terminal moment of the employment; (iii) what has to be looked for in such a broad approach over a period is conduct on the part of the employee which is culpable or blameworthy or otherwise unreasonable; and (iv) the employee's culpability or unreasonable conduct must have contributed to or played a part in the dismissal."

	There are thus two necessary elements to be established in the conduct of the applicant relied upon as having "caused or contributed to some extent to the dismissal" (or, for brevity, "contributory conduct"): culpability and causation, and causation is a factual question addressed to the employer's state of mind.

	The Notice of Appeal alleges that the Industrial Tribunal's finding of contributory conduct was "perverse and/or unsupported by the evidence".  The main burden of Mr Carr's submissions on behalf of the appellant, although couched in terms of perversity, was that there was indeed no evidence on which that finding could be based.  That, as we understand it, if established, would be an error of law in itself, but we take Mr Carr's case to be put in the alternative, as in the Notice of Appeal, so that if there is some scintilla of relevant evidence  he nevertheless invites us to find that it is so plainly and fundamentally inadequate to found the tribunal's conclusion that that conclusion is perverse.

	The Industrial Tribunal does not itself, in paragraph 5, find any specific facts or identify the evidence on which it relies.  We therefore consider the evidence to which Mr Chronias, for the employer, drew our attention in support of the decision.  It falls into two distinct parts.

	First, in relation to the incident described in paragraph 2 of the tribunal's reasons, Mr Chronias relies on Mr Lewis' refusal to leave the premises when suspended and required by management to do so.  He submits that that refusal was within the tribunal's category of "an aggressive and uncooperative demeanour and attitude to disciplinary problems".  We accept that that is so.  Nor is there any problem about the requirement of causation; this refusal was plainly part of the employer's reasons.   The difficulty we find is in accepting that the Industrial Tribunal, without saying so, could properly take it into account as culpable conduct proved against the applicant when it had just held it improper  for the employer to do so.  It may be true (we do not decide the point, which has not been fully argued before us) that it would have been open to it to do so, on sufficient evidence, on the basis that its position, as an independent tribunal of fact, was different from that of the employers, who were in effect pre-empting the outcome of their own appeal procedure, but if the Industrial Tribunal had intended to draw that somewhat subtle distinction it should certainly have said so.  Moreover such an investigation into the facts of the Linda Goodfellow incident would have involved calling direct evidence of those facts, of which there is no record, and giving Mr Lewis the opportunity of dealing with them.  The only cross-examination of him which Mr Chronias referred to in this context was recorded in the Chairman's note of the liability hearing (not the later remedy hearing at which the issue of contributory conduct was canvassed) as follows:

		"Goodfellow appeal - would you have said anything different?	 No."

	There may be some connection between that note and term 8 of the order for re-engagement, which provided that Mr Lewis had "no further right of appeal in respect of the two matters for which he received a warning [i.e. the Goodfellow incident]", but neither separately nor in combination do they amount to an adequate indication that the tribunal investigated the underlying facts as having any bearing on the issue of contributory conduct or put Mr Lewis on notice that it was doing so.  It is plain from the employer's note of an appeal meeting held on 21 July 1993 that Mr Lewis was then actively pursuing his appeal against the warning for failing to leave as well as that for the altercation with Linda Goodfellow. 

	Since the Tribunal did not give its reasons for the finding of contributory conduct it is not certain whether this incident was part of them. One of us (the Chairman) could infer that it was not, in the absence of any indication that the Tribunal investigated the matter in the way which would have been necessary. The majority believe that it was, since they consider that only this incident can explain the use by the Tribunal of the word "aggressive". The difference between us does not, however, affect the outcome, since on neither view could the Tribunal properly take the incident into account on the basis of the evidence before it and of the course which the hearings had taken.

	The other category of evidence on which Mr Chronias relied is of a quite different kind and raises a different issue.  It relates to the earlier history of Mr Lewis' employment and raises the question whether it was evidence of "an aggressive and uncooperative demeanour and attitude to disciplinary problems in which he was involved" in the sense intended by the tribunal.

	The first instance in this category was part of the cross-examination of Mr Lewis at the remedy hearing, as follows:
		"Throughout your employment there have been many disciplinary problems?   No - more of failure to resolve disciplinary complaints.

		You have always appeal[ed] disciplinary proceedings - don't accept discipline?   I would have been dismissed long ago."

That was of course not evidence in direct support of the tribunal's finding, since Mr Lewis denied the first suggestion and the second question, as to "always appealing", went to a point which the Industrial Tribunal expressly and rightly said it was not taking into account, but Mr Chronias relied on the first question as showing that the employer did raise the point and that Mr Lewis did have an opportunity of dealing with it.

	Next Mr Chronias relied on the following evidence in chief of Mr Butcher, the employer's human resources manager:

		"From A's point of view I believe his confidence in Management non-existent - we as company have lost trust and confidence because of deteriorating relationship.

		R5 submitted - Lewis not able to accept discipline and supervision of immediate manager.

		We have no other employee with whom I have had such involvement as personnel officer."

R5 was Mr Lewis' disciplinary record, as follows:

			"5th April 1988	Commenced Employment

		1.	Feb 1989	Verbal Warning: Time off without permission.

		2.	July 1990	Disruptive behaviour investigated.

		3.	Sept 1990	Stage 1 Warning: disruptive behaviour.

		4.			Appeal against Stage 1 Warning

		5.			Appeal against Appeal.

		6.	Oct 1991	Complained about failure to be appointed to new job. Threatened appeal to an Industrial Tribunal.

		7.			Stage 1 Warning for unreasonably long private phone call and verbal outburst.

		8.			Complaint submitted about supervisors handling of above incident.

		9.	Nov 1991	Verbal warning for misconduct.

		10.			Appeal against verbal warning.

		11.			Appeal against Appeal.

		12.	Dec 1991	Appeal against Appeal against Appeal.

		13.			Complaint about lack of responses by Company to above appeal.

		14.			Letter from RAB explaining why appeal rejected.

		15.	Jan 1992	Follow up meeting with Mr Lewis.

		17.			22 points contending racial discrimination submitted.

		18.			Amending Memo from Mr Lewis.

		19.			Memo amending memo received.

		20.	April 1992	Letter to Luton Law Centre.

		21.			Complaint submitted by Mr Lewis.

		22.			Verbal Report back by MHB to Mr Lewis.

		23.	May 1992	Formal report back.

		24.	June 1993	Letter from D Lawrence.

		25.			Meeting arranged with D Lawrence.

		26.			Complaint by Mr Lewis regarding appraisal.

		27.			Response to MHB to points raised.

		28.	July 1992	Letter from D Lawrence with specific enquiries.

		29.			Letter from MHB to D Lawrence.

		30.	August 1992	Letter from D Horn to Mr Lewis.

		31.	Sept 1992	Letter from D Lawrence.

		32.	October 1992 Letter from MHB to Mr Lewis

		33.			Letter from Mr Lewis to MHB.

		34.	April 1993	Incident with Linda Goodfellow.

		35.	June 1993	x2 First Stage Warnings issued.

		36.	July 1993	Appeal against Appeal.

		37.	August 1993	Appeal against Appeal against Appeal - Mr Lewis declined.

		38.			Mr Lewis declined to sign appraisal.

		39.			Appeal against appraisal."

	The first and last of the answers quoted above from Mr Butcher's evidence do not of themselves support the tribunal's finding, and the middle one seems to be Mr Butcher's summary of the record produced rather than additional evidence.  The record looks long, but one must eliminate entries 34 to 39 (which all relate to the Goodfellow incident already dealt with), and those recording appeals (which the tribunal rightly disregarded). Of the remainder some record events and communications which must be taken to have been neutral for present purposes (since their subject-matter was never investigated), but others are capable of being relevant.

	Finally Mr Chronias relied on the evidence of a warehouse supervisor, Mr Gilheaney, one of three supervisors of Mr Lewis, that "he always thought I was picking on him - supervision was challenged".  

	It is not for us to assess the weight to be given to this evidence, so far as relevant, but whether it was capable of founding the Tribunal's conclusion must be judged against the Tribunal's own formulation of that conclusion in paragraph 5 of their reasons, which we have already set out, and which we understand as relating to the way in which Mr Lewis behaved in conducting or reacting to disciplinary processes, rather than to any alleged substantive offences. It is true that "demeanour and attitude to disciplinary problems" leaves some ambiguity as to which is intended, but that is resolved by the next sentence, in which after upholding Mr Lewis' entitlement to pursue his rights of appeal the Tribunal continue:

		"... but we consider that the manner he adopted in pursuing those rights led inevitably to frustration and ill-will in those with whom he was dealing and were an important factor in their ultimate decision to dismiss him."

	Examining the evidence relied on by Mr Chronias is that light we find none on which the Tribunal could properly have concluded that Mr Lewis had adopted an "aggressive ... demeanour" in pursuing his rights, although there was evidence which could have based a finding of a "uncooperative ... attitude".

	We conclude that the Industrial Tribunal erred in law in dealing with the issue of contributory conduct and allow the appeal.

	It might be argued that the best method of achieving substantial justice would be to remit the application for a fresh remedy hearing by a differently constituted tribunal, but neither party wished that course to be adopted.  We agree that it would be undesirable on grounds of time and expense and of the added strain to relationships in a situation in which Mr Lewis would be a current employee, and  also on the ground that it would give the employer the opportunity of improving its evidence, to which Mr Carr naturally objected and which Mr Chronias disavowed any intention of seeking. Clearly the fact of Mr Lewis's re-engagement must stand, although the terms imposed need to be reconsidered.

	We therefore remit the matter to the same Industrial Tribunal, if it can be re-assembled, for reconsideration, on the basis of this Tribunal's judgement, but without further evidence, of its finding of contributory conduct and of the terms of re-engagement appropriate in the light of the reconsideration.

	We add two comments, which are not part of our decision, one for the possible assistance of the Industrial Tribunal, and one directed to the parties. The first is that the remedy is compensation, contributory conduct is normally reflected in a percentage reduction. That is a useful discipline, in that it directs attention to the relative importance which the final decision assigns to the unfair dismissal on the one hand and the contributory conduct on the other. There is no such direct ratio when terms are imposed on a re-engagement, but it may be a helpful exercise to estimate the financial effect of any proposed terms in the light of the other factors at work.

	Our second comment is that the parties will no doubt wish to use the interval before any rehearing to consider whether it is possible to dispose of the matter by agreement.