Appeal No.	EAT/1340/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 1 July 1999

Before
HIS HONOUR JUDGE J ALTMAN
LORD DAVIES OF COITY CBE
MR T C THOMAS CBE

TRIANGLE CARS	APPELLANTS

MISS A M HOOK	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR I WILSON
(SOLICITOR)
MESSRS DEAN-WILSON
96 CHURCH STREET
BRIGHTON
EAST SUSSEX
BN1 1UJ	
For the Respondent	MR P DEAN
(OF COUNSEL)
(INSTRUCTED BY)
MESSRS WALTER WILSON RICHMOND
360B STATION ROAD
HARROW
MIDDLESEX
HA1 2DE	

	JUDGE J ALTMAN:	This is an Appeal from the Employment Tribunal sitting at London (North) on 27th August 1998.  They found that the Respondent to this Appeal was unfairly dismissed but rejected her claim of sex discrimination and they made an award of compensation.  The Appellants appeal from the finding of unfair dismissal.

1	The Respondent was a Telephonist/Controller in the Appellants’ firm of mini-cab operators.  She began work in October 1995.  Mr Brady began work there at a later date.  He too was a Controller but then he was made Operations Manager.  The Employment Tribunal heard evidence and came to the conclusion that there was antagonism between the two people.  Mr Brady complained to the Respondents about her timekeeping and control.  On 12th September 1997 he gave her a written warning.  18 days later, he gave her a second warning.  He set out his complaints in a letter on 4th October and on 18th November 1997, the Respondent was dismissed.  The Tribunal found:

“These complaints  - that is, Mr Brady’s complaints about the Respondent, arose from the fact that Mr Brady and Miss Hook were having difficulties working together and that she insisted on working these long shifts.  The Employment Tribunal addressed the statutory tests for unfair dismissal.  As to the reason for this dismissal they found as follows.  The ostensible reason for the dismissal in the first case is that the Appellants alleged that (the Respondent) did not obey instructions.  It appears to us however, that the real reason for the dismissal was that the antagonism between the (Respondent) and Mr Brady, which was not addressed by Mr Sharp.  That is not a potentially fair reason for dismissal.”

2	Mr Sharp was managing this obviously small business.  That is because his father, who had been running the business for some time, had suffered a severe heart attack and his son had stepped into the breach.  

3	The Employment Tribunal having found the reason for dismissal went on to direct themselves to the question as to whether it was fair, under Section 98(4) of the Employment Rights Act.  They directed themselves that they had to take into account the management and size of the undertaking and whether the reason for the dismissal was a sufficient reason for dismissing this employee.  Their conclusion that it was unfair was expressed as follows:

“It appears that there was proper management in this concern because of the circumstances which Mr Philip Sharp found when he had to take over the running of the business.  Proper employment procedures had not been followed in any way and the Applicant was treated up to the time of her dismissal in an unacceptable manner.  
Although the Tribunal sympathises with Mr Sharp in coming into a situation where he had to, at short notice, take over a business where the (Respondent) had been happily employed over the previous two years, he failed to seek advice as to the best way to manage Miss Hook’s attitudes and relied on Mr Brady’s account of the unhappy situation that had developed.”

4	There are 3 grounds set out in the Notice of Appeal as now argued.  The first ground takes issue with the finding as to the reason for dismissal.  It is alleged that the Tribunal misdirected itself in law in finding that this was not a potentially fair reason for the dismissal because, Mr Wilson says, a conflict between employees can amount to some other substantial reason.  We have been referred in this context to the case of Turner –v- Vestric Ltd [1981] IRLR p23, where the reason for dismissal was clearly a personality clash, where there had been little investigation and it was found to be a potentially fair reason.  

5	We have considered the wording of Section 98 in the following terms.  

“In determining, for the purposes of this part whether the dismissal of an employee is fair or unfair, it is for the employer to show (a) the reason for dismissal and (b) that it is … some other substantial reason of a kind such as to justify the dismissal of an employee holding a position such as the employee held.”  

6	We would observe that that is a two-fold requirement.  First of all, the employer must show the reason for dismissal.  In this case, the Tribunal, on the face of it, found an objective reason contrary to that which the Appellants had said, which was the ostensible reason and the Tribunal describe it as not being a potentially fair reason.  The identification of some other substantial reason is not easy, but it is not to be judged, it seems to us, by the tests of fairness which are the concern of the next stage of the investigation of an unfair dismissal.  It is a process in which, first of all, the Tribunal considers if the employer has shown the reason and then, as to whether it is an admissible reason in the terms as described.  We accept the proposition that as a matter of law a clash of personalities, whether or not it has been investigated or whether or not the employer has tried to resolve it, can be some other substantial reason.  But in this particular case, what the Employment Tribunal clearly found was that this was not such a reason.  It may be, because it is not clear from the words they used, that the Employment Tribunal was using a test of fairness or potential fairness as a means of defining the reason.  If that is so, it seems to us they did err in law in failing to ask themselves directly the question posed by the Act, “no matter whether fair or unfair, good or bad, what was, objectively speaking, the actual reason which the employer had for dismissing?”  

7	We are uncertain as to whether that was really the approach of the Employment Tribunal, in any event, because they then went on to consider whether the Appellants were reasonable in treating the clash of personalities as the reason for dismissal in the latter part of the decision.  Even if there was an error of law in the identification of the reason for dismissal, it is not an error that had any impact on the decision because even if they had held that there was an admissible reason for dismissal, what follows, which is the finding of unfairness could not, on the facts of this particular case, have been any different at all.  It is very rare that in cases of unfair dismissal the employer falls at the first hurdle.  It is nearly always a question of whether the employer behaved reasonably.  On balance therefore, we would have been inclined to accept that there was an error of law as argued for in the Notice of Appeal in respect of that matter.

8	The next matter arises from paragraph 12 of its decision, in which the Employment Tribunal stated that the 

“Respondent was treated up to the time of her dismissal in an unacceptable manner”.

The complaint is made that the parties cannot know why they have won or lost because it is not possible to see from that, what is called, “bald statement” what matters the Tribunal took into consideration in apparently concluding that this was a substantively unfair dismissal as well as a procedurally unfair dismissal.  We have had cause to look therefore, at the findings of fact of the Employment Tribunal.  

9	Apart from the circumstances to which I have already referred, the Tribunal found this at paragraph 4.  We have already referred to the antagonism which developed and that they were having difficulties working together.  The Tribunal then dealt with the background to the complaints that were set out in the letter of 4th October to which I have referred.  It was pointed out that the difficulties arose from the parties working together and the insistence of Miss Hook on working long shifts.  The Employment Tribunal adverted on those issues between them to the fact that Mr Brady had not given her a contract of employment or set out her hours and dealt with the paperwork in relation to remuneration.  It is clear that they also found that that was in contrast to an earlier period where the Respondent had a happy working environment before Mr Brady took over management.  They dealt with the allegation in evidence that there had been discussions between Mr Brady and Mr Sharp and the Respondent, but clearly they felt unable to make any findings of fact about that because they treated the suggestion by the Appellants that there was warning and counselling as having taken place “allegedly”.

10	The Tribunal then go on, still referring to that letter, to draw the inference that it revealed the background of the matters between the two protagonists and they refer to the complaint by Mr Brady that the Respondent, in effect, had been undermining his position with the mini-cab drivers.  There was an argument about who was going to do what shift and who was going to resign and then Miss Hook refused to walk out of the office at the end of her shift and would not take instructions, and Mr Brady wanted Mr Sharp to exert discipline so their working relationship would improve.  They make a finding of fact that as a result of all this, it was clear to the Tribunal in their words that Mr Sharp had lost control of the management of the company and decided even though the Applicant had been a loyal employee working for his father, that he could no longer work with her as she could not work with Mr Brady.  Because of that antagonism, the dismissal followed and before the dismissal the Tribunal found that there was a meeting, but there was no intimation to the Respondent that it was a disciplinary meeting.  The dismissal was effected by letter.

11	So here is a difficult personality clash; the Tribunal finding that the management of Mr Sharp, whether through inexperience or diffidence was not being used to try to resolve it; that there were some meetings about which there was inconclusive evidence and that dismissal was simply by the delivery of a letter.  Not surprisingly to us, therefore, the Employment Tribunal concluded it was clear from the evidence that Mr Sharp was not aware of the proper procedures that should be followed in disciplining employees and in good management practice.  We cannot find other than that when the Employment Tribunal found, as they did, two things, namely not just the unacceptable manner but as follows:  proper employment procedures had not been followed and the Respondent was treated, up to the time of her dismissal in an unacceptable manner, it is clear to us that those are the findings of fact to which they were referring.  It is clear to us that they were taking into account, not just procedural disciplinary matters, but substantive matters.  In some cases, it may be difficult to draw the line between when is management managing and when is management disciplining, because, short of dismissal, disciplinary steps taken by management is a way of managing employees, to get the best out of them and to keep them in employment.  But in this particular case, it is quite clear to us that the Tribunal was not simply and only concerned with the strict, narrow sense of disciplinary procedure, but also with the absence of any management intervention to try to resolve a personality clash.  Those are management steps which would, in the normal course of events, precede any disciplinary measures and disciplinary measures would only take place, it seems to us, on the findings of the Tribunal and on any common-sense view, when management attempts to resolve the clash had first, been tried and secondly, failed.  The passages that I have quoted from the decision shows that that is exactly what the Employment Tribunal had in mind.  No-one reading that decision could fail to know why the Respondent won and the Appellants lost.

12	The next ground of Appeal was really mentioned to us in argument, which is that having directed their attention to the need to consider the size and administrative resources of the Appellant company the Tribunal did not, on the face of the decision, demonstrate either explicitly or implicitly that they had taken this into account.  Mr Wilson, who has argued the points carefully on behalf of the Appellants, points out that this is only a very small organisation which, implicitly, could be forgiven for not having the resources of a very large company.  But the findings of fact of the Employment Tribunal set out the personal working relationships, particularly the way in which an inexperienced manager had stepped in to try to save his father’s business and the Tribunal made allowances explicitly in their decision for his inexperience.  In paragraph 13 they specify these words:

“although the Tribunal sympathises with Mr Sharp in coming into a situation where he had to, at short notice, take over a business.”  

That, it seems to us, is an explicit reference to the administrative resources of this organisation and it is clear, it seems to us, that the Employment Tribunal did take it into account.  

13	The next matter of complaint by way of Appeal is that in the correspondence that was sent to the Respondent by the Appellants were actual complaints relating to her work performance, and it is said that the Tribunal failed to take it into account.  We disagree.  They refer specifically in paragraph 4 to Mr Brady’s beginning to complain and they refer specifically to letters setting out complaints.  In paragraph 10 they specify that the ostensible reason for the dismissal is the Appellants’ allegation that the Respondent did not obey instructions.  There is no doubt whatsoever that they failed to consider the complaints.  If on the other hand, Mr Wilson is saying that they failed to accept that the complaints were justified, it is quite clear from the finding of the Tribunal that they did not consider that those matters had a bearing upon the dismissal.  The dismissal was for a totally different reason.  

14	Mr Wilson then argues that the Tribunal should have considered what would have happened, even if there had been a proper procedure and they should have adopted what is called a Polkey approach.  Polkey, it must be remembered, was a case of redundancy.  It sometimes happens that one can say that external factors are so clear that as between employer and employee, however well the employer had conducted things, the consequence was clearly written and could not have been avoided and in some cases, one can measure the risk of that happening.  But it very rarely occurs.  We cannot see that a Tribunal can be criticised as a matter of law in a case where there was a personality clash which was wholly unresolved in failing to ask that question.  Indeed, had they asked that question, what would their answer have been other than, “who knows what would have happened if management had tried to get these two people to work better together?”  Even if they had asked that question, they could not have come, it seems to us on their findings, to any sort of answer which would assist the Appellants.

15	It is then suggested that in the approach to compensation, they should have considered whether in two respects the Respondent was to be categorised as having contributed to her loss.  First, it is said that by participating in a clash of personality she contributed and secondly, that the Tribunal should have asked itself whether there was sufficient validity in the other matters to have contributed.  As to the latter, the Tribunal, having found that that was not the reason for dismissal, it does not seem to us logical for them to make a reduction for contribution.  It was not a causative element.  It was not a contributory element.  We were a little concerned by the case referred to by Mr Wilson of Moyes -v- Hylton Castle Working Men’s Social Club & Institute Limited [1986] IRLR p482.  In that case, because there was found by the Industrial Tribunal to have been a possible breach of what could be called “natural justice”, the argument on appeal was that it was not open to a Tribunal to make a reduction for contribution.  That was the reverse of the argument here.  In considering that question, at page 485, and looking at the procedure, Mr Justice Popplewell said:

“It is a frequent occurrence in unfair dismissal cases that there has been a breach of procedure which entitles a Tribunal to say that the dismissal is unfair.  Thereafter, it is open to a Tribunal to consider whether the dismissal has been contributed to by the Applicant’s conduct.”

16	That was the answer to the argument put forward.  The argument was that the Tribunal was not entitled to look at it and the Learned Judge expressed the view of the Employment Appeal Tribunal that the Tribunal, contrary to the submission, has effectively a discretion to consider it.  In fact, he went on to say, in parenthesis, as it were, that the relevant section as it then was of the relevant act required a Tribunal to do so and later on he said:

“When considering compensation the Tribunal have to make up their own mind on the facts presented to them, whether he did in fact, contribute irrespective of any finding by the committee or sub-committee."

17	In the end, we do not consider that by the reference, as an aside, to an apparent obligation to consider the matter, that the Learned Judge was intending by that decision to raise into a proposition of law, an obligation on a Tribunal in all cases to consider contribution.  We have revisited the section of the act which deals with the question of contribution as follows:  

Section 123, (6) “Where the Tribunal finds that the dismissal was to any extent caused or contributed to by any action of the Complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.”

18	There are similar, but not exactly the same provisions in relation to the basic award.  The statutory obligation is limited to the reduction of the compensatory award but it is clear that there is an open discretion as to whether or not to consider whether there has been any cause or contribution by the employee.  It does not say that the Tribunal must consider it.  It is simply a provision as to what happens in those circumstances where the Tribunal has found contribution.  The implication of the submission of Mr Wilson is that in all cases, we should establish or reiterate as a point of law an obligation to do so.  Secondly, it is said that the facts of this case give rise to the need to do so.  The only circumstances in which, it seems to us, an Employment Appeal Tribunal would interfere with the failure or the lack of any reference by an Employment Tribunal to the question of contribution would be where the facts either as found by the Employment Tribunal, or which were staring them in the face without such findings, were such that an Employment Appeal Tribunal would conclude that no reasonable Tribunal properly directing itself could have failed to consider the question of contribution.  But that is not the case here.  As has been pointed out the Appellants here were purporting to act on complaints as to the way in which the Respondent did her job.  They were not addressing at all the question of her clash with Mr Brady.  We, on the findings of the facts, can find no circumstances in which, even if the Tribunal had addressed that issue, they could have come to any conclusion other than to say, in effect, “the whole point of our decision is that there may not have been a need to have any sort of discipline or dismissal if only management had intervened earlier.”  

19	In those circumstances, when it is the failure to intervene that has led to the dismissal, it seems to us circular and illogical to argue that there could be found at one and the same time, any contribution by the employee and in those circumstances, we find that there is no error of law on the part of the Tribunal in that respect either.  We find that the decision of the Tribunal was clear and succinct.  It is true that the Chairman did not reiterate the mantra of the range of reasonable responses, but in some ways, it is better when Tribunals do not, because those reading the decision can then look behind the form of words to see the real substance of the decision which is what we have been unable to do in this case.  There is no error in law in relation to the decision of the Employment Tribunal and this Appeal is dismissed.