Appeal No.	 EAT/285/97

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 10 July 1997

Before
HIS HONOUR JUDGE J HULL QC
MR J R CROSBY
MR N D WILLIS

MR H VAN-DIJK	APPELLANT

KLM ERA HELICOPTERS (UK) LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MR S HURLEY
(Solicitor)
Messrs Steele & Co
Solicitors
2 The Norwich Business Park
Whiting Road
Norwich NR4 6DJ	

	JUDGE J HULL QC:  This is an appeal to us by Mr Hendrikus Wilhelmus Van-Dijk.  He was employed as an engineer by the well-known firm KLM, in and after 1986.  He then had his employment transferred from the Dutch company to a United Kingdom subsidiary, which is the Respondent in the present case.  He was clearly in a very responsible position and the events which give rise to this case are shortly that on 15 February 1995 he was responsible for towing a helicopter belonging to the Respondents and on this occasion, in circumstances which were looked into, of course, by his employers and by the Industrial Tribunal in due course, he had an accident.  It was alleged and, it appears to us, accepted, that that accident occurred because he adopted an irregular and improper method of towing.  He did not tow the helicopter down the middle of the strip, which is marked by a yellow line, but went right over to one side.  He gave various reasons for doing that, which were not accepted by the employers and did not greatly impress the Industrial Tribunal apparently and the employers certainly said that he was guilty of misconduct and they dismissed him out of hand, giving him four weeks’ pay.

	The Industrial Tribunal had to enquire into this because he made an application averring unfair dismissal and breach of contract and in his particulars he claimed damages for the breach of contract.  The Industrial Tribunal had, of course, also the notice of appearance, which was put in by the employers on 11 August 1995, saying that there had been gross misconduct.  That was what the employers said.

	The employers also took a jurisdiction point.  They said that his employment only dated from 11 December 1993, so he has not done his two years to qualify for relief in respect of unfair dismissal.  That point they persisted in and a preliminary hearing was arranged to consider that jurisdiction point and to decide whether there was in fact continuity of employment, which would mean that he had been in employment since 1986.
	On the very eve of that jurisdiction hearing the point was conceded by the employers, or on their behalf, and so there was no hearing at all on 1 December, when that was to take place.

	The Industrial Tribunal sat to hear the merits of the case on 8 February 1996 at Norwich under the chairmanship of Mr Crome.  Their decision is at page 11A of our bundle.  Mr Crome sat with two Industrial Members.  They went into the matter, they came to conclusions that:
“2.  the applicant was guilty of contributory misconduct and was 30% responsible for his dismissal”
and that
“3. had a fair procedure been followed he had a 50% chance of retaining his employment.”

That was in their decision which was promulgated on 13 March 1996.

	They went into the way in which the accident had happened and that, of course, was the foundation of their finding of contribution and, indeed, their finding under what has been called the Polkey point; if a fair procedure had been followed he had a 50% chance of retaining his employment.  They found he had not been fairly treated by the employers.  His dismissal had been decided on without his being given a right to be heard.

	That was their decision then, they record that he had caused £250,000 damage to a very nice helicopter, which was certainly a serious matter and certainly was capable, as a matter of law, to judge from the facts that we have seen, of being a breach of contract which justified the employers in dismissing him.  

	Pausing at this point, simply to say what our view of the law is, it is of course not every breach of contract by an employee which entitles the employer to dismiss him summarily.  It must be a breach which is so serious that the employer is entitled to accept it as terminating the contract.  Sometimes that is called a fundamental breach, sometimes a breach which goes to the root of the contract, sometimes a breach of a condition as opposed to a mere warranty.  There are various ways of looking at it.  Trivial misconduct, being late for work on one occasion, that sort of thing, clearly does not justify an employer in saying “You have repudiated your contract”.  On the other hand, one would have thought departing from the proper course of conduct in a skilled task, and thereby inflicting very serious damage on the employer’s helicopter, was a breach which was capable of going to the root of the contract.  That, of course, would be a matter for the Industrial Tribunal and unless they made an error of law it would be for them to say whether that was so or not.  Having reached the conclusion I have mentioned it was, of course, the duty of the Industrial Tribunal to hold a compensation hearing.  They did that on 15 July.  They promulgated their decision on 22 August and that is at page 6 of our papers.  We are told that on the hearing date, 15 July, when again Mr Crome sat with his two industrial Members, an application was made for the costs for what had happened the year before when the jurisdiction point had been conceded only the day before the hearing and the Applicant said through Mr Hurley, who appeared on this occasion, “I want  my costs.  This is unreasonable.”  

	Then we come to the decision itself which is at page 6 and the Tribunal first of all applied the percentages which they had found at the earlier hearing.  They then dealt with various heads of claim which were put forward.  Many of them were rejected expressly.  Paragraphs 6, 7, 8 and 9 are all heads of claim which were rejected.  The Tribunal said nothing about costs.  There was no order for costs.  They said nothing about the claim for breach of contract which had been made.  On the view, which was now conceded, that his employment had been continuous, he would be entitled to 9 weeks’ pay, he had only had 4 weeks, so he would be entitled to something for breach of contract if the employers were not entitled to dismiss him summarily.  Nothing about that in the decision.  No award for that and no award of costs.

	Of course, in those respects, Mr Van-Dijk could have appealed.  Every day we deal with appeals in which it is said the Tribunal has not dealt with matters which they should have dealt with.  This is a complete omission.  Sometimes we say, “Well, it is not a material omission, it is quite clear what they were saying and if they did not deal with a particular head it is quite clear that that was because it did not appeal to them”.  It all depends on the facts.  He did not do that.  He could have launched an appeal and he could have accompanied that by an application for a review.  That is often done, perhaps on a belt and braces principle.  He applied instead for a review and the Industrial Tribunal decided to conduct a review.  They did not reject the matter out of hand.  The Chairman, if he thought there were no reasonable grounds for reviewing the decision, could, himself, as a matter of discretion, have rejected the application.  He did not and so the Tribunal sat to hear the review.  They sat on 16 December and they promulgated their decision on 10 January 1997.

	They can only review their decision on limited grounds and the one relied on here was that there had been a procedural mishap.  The Applicant, Mr Van-Dijk, appeared in person on this occasion and addressed them.  They would not have had the assistance they would otherwise have had from Mr Hurley, but it was open to them, if they found there had been a procedural mishap, to review their decision; and simply overlooking something would, in our view, amount to a procedural mishap.  In that case they could add to their decision, review it by adding to it and say, as the case might be, that they would make an award of costs or say, as the case might be, that they would make or would not make an award of damages.  

	Dealing first of all with the claim for damages, they said:
“We allow the application for review to proceed.  As to the first point we deal with it very shortly.  Whilst there was no explicit decision it is implicit in the decision that the dismissal of the applicant was a dismissal which was the result of the applicant’s own misconduct.  In our view no notice pay or compensation for other benefits is due for the notice period in common law.  Of course the tribunal have already made its award for the unfairness of the dismissal ...”

That was saying, “That was part of our first decision”.  If that is correct then, of course, they were quite right not to review their first decision or add to it.  There had been no procedural mishap, it was well in their minds, they had found that his dismissal was the result of his own misconduct.  That means, in other words, that he was repudiating his contract and the employers were entitled to accept that if they chose to do so and to give him either no notice or pay, in lieu of notice, which was less than the 9 weeks pay he would otherwise be entitled to.

	That is what they were saying and if that is right, of course, this appeal against the review decision is misconceived because they had no alternative as a matter of law.  There had been no mishap.  The remedy would have been to appeal against the original decision and seek to persuade us, which would certainly have been a difficult task, that this behaviour by the employee was, in fact, something which the Tribunal should have held was not a fundamental breach of contract.

	Mr Hurley takes a verbal point on that.  He says that they found it was misconduct but not gross misconduct.  It seems to us that that is only a verbal point and in the circumstances it is quite clear from the way they describe it that they were, in fact, holding that it was a breach which went to the root of the contract, which was a fundamental breach.

	If we are wrong about that and the Tribunal were, in fact, entitled to review their decision because there had been a mishap, then it seems to us that what they say here amounts to precisely what we have said, that is to say, that they were now finding, having thought about it, that this was a breach which went to the root of the contract.  The dismissal was the result of his own misconduct and when one looks at the facts, that was an absolutely unchallengeable decision.  A man who behaved in this way, it seems to us, could hardly complain of such a finding.  It was inevitable and there it was.

	Whichever way one looks at it, and with Mr Hurley’s help we have looked at it in at least two or three ways, it seems to us that this point is simply unarguable and that we should dismiss the appeal on that ground.

	We come to the costs point.  On 15 July Mr Hurley had asked for the costs of what had passed late in the previous year when the preliminary point was abandoned at the last moment.  It is quite clear that that was not acceded to, that when the decision came out there were no costs awarded.  Again, was this the result of a mishap or was it because they had considered the matter and they were not prepared to accede to the application?  It is not quite so clear in this case, it seem to us.  They gave their reasons in paragraph 3; they said:
“The tribunal has power to award costs in circumstances where a party has behaved vexatiously or frivolously or otherwise unreasonably.  The tribunal are not of the view that the behaviour of the respondent in this regard was unreasonable.”

How can that possibly be challenged?  Whether they were now making up their minds for the first time or whether they had made their minds up way back in July, that was again, on the face of it, an irrefragable, unchallengeable, decision.  Any party who asks for costs in the Industrial Tribunal or here is asking the Tribunal to take a quite exceptional decision and Parliament has said and the Secretary of State in the Rules has said that such ought only to be made if there has been vexatious or frivolous behaviour; or unreasonable behaviour - of course in the legal sense.  Wednesbury unreasonable, it might be called.  Here the Tribunal were not satisfied of that, that was not their view.  They said so again later.  It is true that they added eventually, after saying that there was no question of this defence being a sham:
“There was no request ... for Further and Better Particulars of [this] ground of resistance”

and Mr Hurley fastens on that and says, “Well, this is really not a situation in which a party can be blamed for failing to ask for further and better particulars.  Industrial Tribunals ought not to look for such behaviour, indeed, it should be discouraged” and he refers us to a case in which he says that that observation is expressly made.  That case is Rajguru v Top Order Ltd [1978] ICR 565 and I will just read the headnote:
“When the employee’s complaint of unfair dismissal came on for hearing before the industrial tribunal counsel for the employee submitted that the true meaning of the reason for the dismissal given by the employer was not apparent.  Counsel for the employer then made five specific allegations, two of which were completely new.  An adjournment was requested on behalf of the employee on the ground that, because of language problems, there would be difficulty in obtaining proper instructions in regard to the new matters.  The industrial tribunal granted an adjournment but ordered the employee to pay the employer’s costs of the day’s attendance pursuant to rule 10(2)(a) ... on the ground that the employee’s advisers had been at fault in failing to request further and better particulars of the employer’s case at an earlier stage.”

In other words, this was the complete reverse of what the present case is.  It was said that the Tribunal said, “Your failure to ask for particulars means that you behaved unreasonably, so unreasonably that we ought to order costs against you.”  The employee appealed.  Clearly, the facts were quite different, he had been taken by surprise.  He was a man with a limited command of English, new grounds were sprung on him when he asked what this meant and he had been given the adjournment for which he asked and then condemned in costs.  On appeal by the employee, our Tribunal under the chairmanship of Mr Justice Kilner Brown:
“Held, allowing the appeal, that it was not reasonable to have expected the employee’s advisers to ask for further and better particulars of the employer’s allegation, resort to procedural process being unnecessary in such litigation;  and that, in any event, failure to ask for further and better particulars went to the question of whether or not to grant an adjournment and the industrial tribunal, having decided that an adjournment was justified in the circumstances, were wrong to subject it to an award of costs.”

It is entirely superfluous to point out the differences between that case and this but nonetheless, with great fortitude, if we may say so, Mr Hurley has seized on that point and has invited our attention to what this Industrial Tribunal said towards the end of this courteously long and detailed paragraph in which they say, “This is why we were not prepared to give costs”.  The Tribunal said:
“In our view the respondent was perfectly entitled to adopt that position, it is not unusual and certainly not unreasonable.  There was no request on the applicant’s side for any orders against the respondent for Further and Better Particulars of the grounds of resistance and the applicant cannot now complain that the resistance was a sham.  ...  Indeed far from being unreasonable conduct so as to be condemned in costs the withdrawal of bad points is something which the tribunals encourage, as they encourage the settlement of cases wherever possible.  We are not in the Courts of Record here where costs follow the event and there is nothing in the features of this case that I have just described which suggest to us behaviour which ought to be marked by an order of costs and accordingly that application is dismissed.”

That is about 10 lines out of a paragraph about 30 lines long in which they give the details of their reasons.

	To distinguish this case from the Rajguru case, which we have referred to, would be utterly unnecessary.  They are as different as chalk and cheese, it seems to us.  Here the Tribunal was merely making the comment that had it been thought that this defence, which was so belatedly withdrawn, was simply a sham, the Applicant could have asked for particulars of it.  That is stating the obvious.  Whether or not a decision was truly reached in July or whether it was simply reached on this application for review, we regard it as an utterly unchallengeable decision.  There is more than one ground for saying that and I am afraid I have said a good deal about it.  The fact is that a party who wants costs must satisfy the Tribunal that there has been unreasonable behaviour.  This Appellant failed to do so.  That was the end of the matter.  If he had succeeded in doing so, then it was a matter for discretion.  We are shown no ground whatever on which it can be said their discretion was improperly exercised.  We are simply taken to a particular remark and told that that indicates that there was an error in the way discretion was exercised.  It seems to us all that that is quite hopeless, with all respect to the careful and courteous way in which Mr Hurley has put it before us.

	This case is in our list under our practice direction to see whether there are any arguable grounds on which it can be said that it has any prospects of success.  We are all of the opinion that there are no such grounds and, therefore, to avoid any unnecessary further expenditure and the incurring of further costs, we have to say that it must be dismissed at this stage and we so order.