Appeal No. UKEAT/0009/04

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH EH3 7HF

	At the Tribunal
	On 26 July 2004

 
Before
HIS HONOUR JUDGE McMULLEN Q.C.
DR A H BRIDGE
Ms A E ROBERTSON

 

MARK HUGGINS	APPELLANT

 

 
MICREL SEMICONDUCTOR (UK) LTD	RESPONDENT

 
 
Transcript of Proceedings
 
JUDGMENT

 

 

 

	APPEARANCES

 

 
 
For the Appellant	Mr P Paterson, Solicitor
Of-
Messrs Tods Murray WS
Solicitors
66 Queen Street
EDINBURGH   EH2 4NE

 

For the Respondent

 

 

 

Mrs E Gale, Solicitor
Of-
Messrs Charles Lucas & Marshall
Solicitors
1 Wood Street
SWINDON   SN1 4AN

 

 

 

 

 

 

 

 

SUMMARY
 
UNFAIR DISMISSAL

A dismissal may be for SOSR under s.98(1), based on a breakdown of trust and confidence caused by A’s conduct.  No error of law in ET’s approach to fairness and contribution.

 

 

 

 

 

 

 

 

HIS HONOUR JUDGE McMULLEN QC:
 
1.	This case is about the correct test in an unfair dismissal case where trust and confidence have broken down.  The judgment represents the views of all three members who pre-read the relevant papers.  We will refer to the parties as Applicant and Respondent.
 
Introduction
2.	It is an appeal by the Applicant in those proceedings against a decision of an Employment Tribunal, sitting over 6 days here in Edinburgh, Chairman Mr K J McGowan, registered with extended reasons on 4 December 2003.  The Applicant and Respondent were represented there and here by Mr P Paterson and Mrs E Gale, respectively, solicitors.  The Applicant claimed unfair dismissal, unlawful deductions from pay and breach of contract.  The Respondent contended it dismissed the Applicant fairly and did not break the contract.
 
The Issues
3.	The essential issues as defined by the Employment Tribunal were to decide the reason for and the reasonableness of the dismissal.  The Tribunal decided the Respondent did not unfairly dismiss the Applicant.  It went on to decide a question under the principles in Polkey v A E Dayton Services Ltd [1988] ICR 142 HL although not strictly necessary for its decision.  It also decided that it was likely that, if the decision was wrong and the Applicant was unfairly dismissed, he had contributed to his dismissal and that compensation would be reduced by 100%. A similar percentage, as it is accepted by Mr Paterson, would be the reduction under the operation of the Polkey principles.  It dismissed the Applicant’s complaint under the other two jurisdictions.
 
The Appeal
4.	The Applicant appeals against the decision on unfair dismissal.  There is no appeal against the Employment Tribunal’s comments as they are put on the Polkey principles as it is accepted to be within the Employment Tribunal’s fact-finding province for it to have made the assessment.  The Applicant accepts that he could not appeal the 100% deduction of a compensatory award in respect of contribution as that is dependant upon any money being awarded.  Since the Polkey decision is not under appeal there would be no money awarded by way of compensatory award but there would still be a basic award, thus, there is still live an appeal against the decision on deduction.  Directions sending this appeal to a full hearing were given in Chambers by the Honourable Lord Johnston.
 
The Legislation
5.	The relevant provisions of the legislation are the Employment Rights Act 1996 (“The Act”) sections 98 (1) and (2) which require an employer to prove a reason for dismissal falling within it.  Those subsections provide as follows:-
 
“98(1) 
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)	(a)    the reason (or, if more than one, the principal reason) for the dismissal, 
and 
(b)	(b)     that it is either 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 the employee held.
 
(2)	(2)                  A reason falls within this subsection if it
(a)	(a)                  relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do,
(b)	(b)                  relates to the conduction of the employee,
(c)	(c)                  is that the employee is redundant, or
(d)	(d)                  is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.”
 
Fairness is dealt with by section 98(4) which provides as follows:-
 
“98(4)
Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)-
 
(a)	(a)                  depends 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
(b)	shall be determined in accordance with equity and the substantial merits of the case.”
 
6.	On the subject of compensation, two separate provisions apply and are relevant here.  Section 122(2) deals with circumstances where a basic award may be reduced and section 123(6) does the same in respect of a compensatory award.
 
“122(2)
Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly.
 
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.”
 
The Employment Tribunal directed itself by reference to the relevant provisions of the Act.
 
The Facts
7.	The Respondent sells Electronic Integrated Circuits, silicon chips.  It employs no more than 17 people, 6 of whom are employed in Scotland.  He was engaged as a design engineer at a salary of £47,750 in 2000, until the relationship ended by his dismissal with one month’s pay in lieu of notice on 11 October 2002. 
 
8.	The Applicant’s line manager was Dr Gater and the Managing Director was Mr Bijan Mohandes, both of whom gave evidence.  The President of the respondent corporation was Mr Zinn, who is based in San Jose, California.  
 
9.	The Applicant had a remuneration package which included long-term disability protection, operated by an outside provider.  Participation was subject to a medical examination.  The Applicant was refused participation by the provider, and so was not entitled to sick pay whilst engaged by the Respondent.  The Tribunal said this:-
 
“Other than appreciating that the applicant might he difficult to manage, Dr Gater was not told, and the respondents did not know at the time they recruited him, that the applicant had been treated for stress, depression or any related illness or condition.
 
For the first year of his employment, there were no particular issues concerning the applicant's conduct, although he did tend to have an abrasive manner with his colleagues. It was necessary as part of the applicants work that there was a technical interface with his US colleagues and in this connection the applicant had visited the US on a couple of occasions.”
 
10.	There were, however, deteriorations in the relationship.  The Respondent was anxious to develop a product (“the 2114”) which was at a very advanced stage of development and in which the Applicant had a considerable hand.  By May 2002 relationships deteriorated.  Dr Gater formed the opinion that the Applicant was unable to stay focussed on launching the product successfully and there were two underlying issues, pay and lack of support.  Both of these issues seemed unresolved.  The Applicant had a different view about his involvement in 2114.  The Applicant considered that it was pointless to speak to Dr Gater about it since he was not to be involved in it.
 
11.	By August 2002, Dr Gater had become very concerned about strains in the relationship between himself and the Applicant.  The Tribunal found as follows:-
 
“By this time, relations between the applicant and Dr Gater had become very strained. The applicant tended to be defensive in any conversations. Dr Gater felt that he could not talk to him. Up until that point, Dr Gater felt that he had been trying to coach the applicant and now felt that matters were beginning to get out of hand.  He felt that their e-mail from the applicant was a threat to his authority. Accordingly, Dr Gater replied to the applicant on 13 August.”
 
12.	A meeting was arranged offsite at a garden centre where the Applicant had a list of matters which he was unhappy with which included Dr Gater’s management style, the workload and the equipment in the laboratory.  He made it clear he had taken advice and required Dr Gater to apologise for calling him to a meeting, for it was regarded by those advising the Applicant as in the context of a warning.  The meeting was tense.  Although cordially conducted, nothing was resolved.  The Applicant had been on sick leave.  Dr Gater had decided that the Applicant would come back to work, and he did on 19 August, but the situation was getting out of hand, and, so, although there were intervening stages in correspondence, on 4 September 2002 a meeting, described as a disciplinary meeting, was conducted by Dr Gater.
 
13.	There is no dispute that there is a full record of this meeting.  The Tribunal found as follows:-
 
“By the end of the disciplinary meeting, the applicant's health had become the key focus of the discussion and the major issue to be properly investigated and resolved.  In relation to the other matters there was no resolution.  Dr Gater felt that he could not make a judgment about the position without knowing whether the applicant was disabled or not. The issue facing the employers had become more complex and relations had deteriorated still further. At the meeting, the applicant declined to allow the respondents access to his medical records or GP.
 
Dr Gater felt that the medical issue was of paramount importance and issued a letter - see R34. The applicant initially indicated that he was not proposing to respond unless he got an answer to certain questions which he had outstanding -see R35.  In the event, Mr Mohandes replied to the applicant on 6 September. This resulted in another letter from the applicant dated 7 September - see A21 -
22. On Monday, 9 September Dr Gater pressed the issue of a response to the medical report. Consent to the respondents obtaining a medical report was given by letter dated 10 September - see A30.”
 
14.	In due course, the Applicant contacted his GP and was given, on 27 September 2002, a GP’s Report.  At no stage was this given to the Respondent before the dismissal, to which we will come, at the appeal, or thereafter.  Meanwhile, another piece of correspondence emerged to which considerable importance appears to have been attached.  This was an e-mail described as a letter by the Applicant to Mr Zinn.  We need say no more about it because it is accepted by the Applicant that this was an intemperate letter which effectively sought to undermine and express no confidence in the Respondent’s UK management
 
15.	By 11 October 2002 Dr Gater had concluded that the Applicant’s failure to produce the medical report, which he knew existed, had become a stalling tactic. He therefore reviewed the circumstances and decided that he had no option but to terminate the Applicant’s employment.  He wrote to the Applicant on 11 October 2002 detailing various matters, but, in summary, came to the conclusion as follows:-
 
“I have reached the conclusion that your attitude and actions have constituted a breach of both the written and implied terms of your contract It is clear that there has been such a breakdown in the relationship of mutual trust and confidence between us that we can no longer see any way of repairing the damage and moving forward.
 
I have considered your actions and attitude towards the company over the past months and I am of the view that the relationship has now completely broken down.  In particular I have considered your remarks and comments concerning the management of the company and the nature of your grievances and complaints.
 
It has become clear that you are not happy working for Micrel,\ and that you consider your managers to be incompetent and lack understanding. You have created a level of disharmony within the working environment that has worsened over the past months. Indeed, since you have been suspended the atmosphere in the office has improved.
 
Your emails and letters to the company clearly indicate that you have numerous grievances against the company but you have also failed to accept that the company has rules and procedures, which you have not followed. You have, in short, created a situation where a future working relationship has become untenable.
 
The company has sought to allow you time to enter a medical report in order to confirm whether or not you do indeed have a disabilitv. Despite repeat assurances from you (via your solicitor), you have failed to produce the report You have appeared to treat this reasonable request as a hostile exercise on behalf of the company. We are therefore of the opinion that the Company cannot allow you to continue to delay matters any longer.”
 
16.	Although there was no specific procedure, the Applicant was offered, in that letter, an opportunity to appeal to Mr Mohandes, which he took up. So it was that on 21 November a meeting was held where the Applicant was represented by his solicitor and the Respondent was represented by Mrs Gale, or, at least, they were in attendance, in front of Mr Mohandes.  The basis of the meeting was a letter from the Applicant’s solicitor setting out grounds of appeal.  The Tribunal had before it, as do we, a very lengthy document which is accepted to be the substance of the meeting.  During that meeting it was made clear as follows:-
 
“BM
One other point I would like to make to you is that one of the factors that led to Chris believing that there was a breakdown in relationship, was a letter that Mark wrote to the president of the company.  In this letter that he wrote, I don’t know if you have a copy of this letter, there is a tirade of comments that both Chris and myself having been involved in …
I was actually in New Zealand on vacation at the time, in here there is a whole bunch of things over here saying basically that I am not qualified to be in this job, neither is Chris, and this letter in itself is provocative.
This letter was basically the final element of it, is that it was impossible ….”
 
“BM
You have a copy of this letter, then you can understand that the nature of this letter, being sent to the president of the company, which basically alleges that both Chris and I are incompetent to be able to deal with him does establish that there is a complete breakdown in the relationship with the company. You can see that whatever the condition, whatever conditions existed to do with the disciplinary view this is the crowning end of it. I can't understand however it's possible that Mark can ever understand that anybody here can be competent to ever manage him again.”
 
17.	Mr Mohandes did not make a decision on that day but caused further investigations to take place and wrote on 28 November, after the expiry of the time given to the Applicant to produce medical evidence, as follows:-
 
“I have considered all the points that both you and your solicitor raised at the appeal meeting and have sought further information or re-interviewed others in order to ensure that all of these matters have been assessed properly.  I propose to deal with the disciplinary matters in sequence.”
 
18.	He deals with a number of matters including his unauthorised absence but a central focus is the passage dealing with trust and confidence. He says this:-
 
“Trust & Confidence
 
As you are aware from the letter of termination the reason for your dismissal was not for the absences or work relationships but was ultimately for the breakdown in the relationship between yourself and Micrel. You behaved in an unprofessional manner that led to the disciplinary hearing. Prior to this event I understand that you had become increasingly disruptive and non-co-operative within your work group. It is the view of Micrel that the root cause of your dissatisfaction was your level of remuneration and your inabilitv to handle pressure of project work. You have claimed that you have worked in excess of 48 hours but we have been unable to find any evidence of this. It was not a requirement that you worked such long hours and that no pressure was placed upon you to do so.
 
Throughout the disciplinarv process you were unwilling to take any responsibility for your own conduct and stated repeatedly that the company discriminated against you. You stated at the appeal hearing that the company was fully aware of your disability however I can find no evidence of this whatsoever. It seems that the company was aware that vou were not offered insurance by Allied Dunbar but did not have any information as to the reasons why or whether this related to any disability. When you raised the issue of your disability we sought advice as to how to handle this. We were advised that we needed to understand the nature of the disability in order for us to make adjustments if necessarv and to consider how we could reasonably accommodate your disability. Instead you choose to treat our genuine request as an act of hostility. The comments made in your correspondence to the company, both here in the UK and in the US were indicative of how far relationships had deteriorated.
 
Whilst I accept that at the appeal hearing you stated that you apologised for some of the comments made in your letter to the Company CEO I am unable to see realistically how the relationship could ever be repaired.”
 
Applicant’s Case
19.	On appeal it is submitted on behalf of the Applicant that the Employment Tribunal made four errors.  They are:-
(1) In its determination of the reason for dismissal
(2) In its decision that there was no procedural unfairness
(3) In its decision that if there were such unfairness the appeal cured it 
(4) In its approach to contribution. 
 
Remission to a fresh Employment Tribunal is sought.
 
20.	In an engaging submission, Mr Paterson submitted that the Employment Tribunal had taken a “scunner” to the applicant, that is, took an instant dislike to him, after which all was an uphill, fruitless struggle.
 
21.	Documentary material was relied upon including the minute of the disciplinary meeting, letter to Mr Zinn and the dismissal letter, together with the conclusion of the appeal hearing, resulting in Mr Mohandes’ letter.  It was contended that the letter to Mr Zinn, intemperate as it was, was not actually the subject of the Respondent’s reason for dismissal.
 
22.	It is contended that the Tribunal failed to deal with this issue as one of conduct in that the Tribunal accepted the Respondent’s submission that this was some other substantial reason under section 98(1).  The difference in practical terms, it was submitted, was that a decision to dismiss based on conduct, would be bracketed with a fair procedure under section 98(4), whereas, if the decision were depicted as some other substantial reason, an employer could evade the requirements of fairness in procedure, in particular, fairness in the investigation.  It was contended that in this case, section 98(4) should never have been reached, for a knock-out blow would have been delivered to the Respondent had the Tribunal not erred.  The Tribunal should have found the Respondent failed to discharge its duty to show the reason for dismissal.  The true facts were never ventilated in the dismissal process.  Reliance was placed on Cobley v Forward Technology Industries Plc [2003] IRLR 706, see below, and Pritchett & Dyjasek v J McIntyre Ltd [1986] IRLR 97.
 
23.	It was contended that the Employment Tribunal had erred because it had held that there was no procedural unfairness since the matter was in the Applicant’s hands.
 
24.	It was contended that the Tribunal had correctly decided that what happened in front of Mr Mohandes was, as a matter of construction, a review.  This was not a full rehearing as required by the judgment in Whitbread & Co plc v Mills [1988] IRLR 501 EAT.
 
25.	As to the question of deductions, it was accepted by Mr Paterson (on what we may say is an entirely realistic basis) that there being no grounds of appeal based on Polkey, there would be no further point in considering contribution.  But since Polkey does not attach to a basic award, the contribution point is still open to him.  On this basis he contends that there must be blameworthy conduct for the purposes of, at least, section 123(6), and the Tribunal erred in its depiction, not only of there being blameworthy conduct causing a reduction but in its decision to reduce by any sum at all.
 
The Respondent’s Case
26.	On behalf of the Respondent, it was contended that this case was not just an issue of conduct, it related to the relationship between parties in a very small business, which broke down early in 2002, over two issues, pay cuts and the Applicant’s refusal to travel as required to the United States.  Within such a small group of engineers, there was no room for a combative attitude as found by the Tribunal, by the Applicant to his employers.  As to the appeal hearing it is contended that Mr Mohandes did have the Zinn letter in mind (see page 84).  Dealing with the matter as one of reality, the hearing on 4 September was properly categorised as a disciplinary hearing, but investigation was focussed on the medical evidence.  That was correct at the time.  The Applicant was being given a chance.  There was an attempt to conclude the issues which divided the parties at that meeting but matters also required resolution in the medical sphere.
 
27.	The Applicant had a fair hearing, and, indeed, at the appeal hearing a fair rehearing of all of the issues.  It was contended that all of the requirements for a full rehearing were in place, for Mrs Gale submitted as follows:-
 
“6.9	With reference to 6.3 the Tribunal found that there was evidence of a manifestly fair appeal procedure and hearing with Mr Mohandes carrying out a full review.  The Appellant takes issue of the word review.  The Appeal hearing consisted of (1) the Appellant attending a meeting accompanied by his solicitor (2) all points referred to at the disciplinary hearing of the 4th September were put to him again (3) the Applicant was given the opportunity to answer all of the point fully (4) the Respondent stated intention was to conduct a further investigation (5) the Respondent carried out an investigation within a 7 day time scale and clearly allowed for a reinvestigation of those issues (6) the Appellant did not produce the medical report once again (7) the Respondent was entitled to make findings and upheld the decision.  Whilst the Tribunal uses the words “review” there can be no doubt in the Appellant’s mind that a full rehearing did indeed take place.”
 
In any event, the Applicant was blameworthy.  Writing the Zinn letter was part of it but so was his failure to adduce the medical material.
 
The Legal Principles
28.	The legal principles to be applied derive from the following authorities.  In R S Components Ltd v Irwin [1973] IRLR 239 it was held by the NIRC, Sir Hugh Griffiths, as follows:-
 
“19 
 
We do not quarrel with the Tribunal’s proposition that the words ‘substantial reasons of a kind such as to justify … dismissal’ ought not as a matter of good industrial relations and common fairness to be construed too widely against an employee.  This is not, however, something upon which the appellant is able to build a successful argument in the present case.  The words must be construed according to the ordinary canons of construction and consistently with the manifest intention of the Act.”
 
29.	In Cobley v Forward Technology Industries above, it was held by the Court of Appeal, Lord Justice Mummery, giving the principal judgment that the approach to deciding on issues within section 98(1) and (2) is held as follows:-
 
“16
 
In my judgment, there was no error of law in the decision of the employment tribunal as to the reason for Mr Cobley's dismissal. The finding of fact in paragraph 6(A) of the extended reasons was open to the tribunal on the evidence, following the leave granted by them at the start of the hearing to clarify the reason for dismissal as 'some other substantial reason', namely 'where an acquisition follows a hostile or bidding war situation the managing director/chief executive cannot remain in place.'
 
18
 
The first point for the tribunal was the purely factual question: what was the reason for Mr Cobley's dismissal as chief executive? As was said by Cairns LJ in Abernethy V Mott Hay & Anderson [1974] lRLR 213 at 215 -
 
A reason for the dismissal of an employee is a set of facts known to the employer, or
it may be a set of beliefs held by him, which cause him to dismiss the employee.”
 
30.	As to matters of procedure, it is accepted that a full rehearing may cure a defective first instance hearing: see Whitbread v Mills at paragraph 50 citing from and following the opinion of Lord Wilberforce given in the Privy Council in Calvin v Carr [1980] AC 574. Tying this to employment cases, in the EAT, Mr Justice Wood P said as follows:-
 
“Ultimately a Tribunal has to answer the question whether the dismissal is fair bearing in mind the wording of s.57(3) and all the circumstances of the case including the equity and substantial merits. This issue is often posed in the form - has the employer, on the facts of the case as found by the Tribunal, and in all the circumstances, reached a decision which an employer could reasonably have reached or is it one which an employer could not reasonably have reached? (See Polkey [1987] IRLR 503 p.507).
 
It seems to us that in the context of industrial relations those appeal procedures form an important part of the process of ensuring that a dismissal should seek to be fair. Secondly, as Lord Bridge said at p.115 in Tipton [1986] IRLR 112 - a passage already quoted above
- both the original and the appellate decision of the employer are necessary elements in the overall process of terminating the contract of employment. Thirdly, in the context of s.57 it seems to us that the legislature envisages that the principles to be applied in considering overall fairness - and we are dealing with 'unfair dismissals' - are closer to the domestic disputes and the intermediate cases envisaged by Lord Wilberforce. We are conscious that in our example he referred to 'employment'.
 
If it has, then whether or not an appeal procedure has rectified the situation must depend upon the degree of unfairness at the initial hearing. If there is a rehearing de novo at first instance, the omission may be corrected, but it seems to us that if there is to be a correction by the appeal then such an appeal must be of a comprehensive nature, in essence a rehearing and not a mere review.”
 
31.	When issues of trust and confidence arise, the definition of how this is to be approached is contained in the speech of Lord Steyn in Malik v Bank of Credit and Commerce International [1997] IRLR 462 followed and cited to us in the judgment of the EAT, Ms Recorder Cox and Members in Morrow v Safeway Stores plc [2002] IRLR 9 and is as follows:-
 
“the employer shall not:
 
“… without reasonable and proper cause, conduct itself in a manner calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee”.”
 
And of course the mirror image of that applies in respect of relations where it is a breakdown caused by the employee.
 
32.	As to deductions under sections 122 and 123 it is generally accepted that those provisions, albeit, in different language, would normally be construed to produce the same result of a percentage deduction although the language is different, and, as will be apparent, is important in our case.
 
Conclusions
33.	We apply those principles to the circumstances before us.  In doing so we reject the arguments of the Applicant and have decided that the Applicant’s appeal should be dismissed.  We uphold the submissions of Mrs Gale.  Turning first to section 98, we reject as wrong in principle the submission that any conclusion based on some other substantial reason must be wholly outwith the issues of conduct.  It is probably simplistic, but at least, it does have some reality, in our judgment, for a decision to be based on a breakdown of trust and confidence caused by the conduct of an employee.
 
34.	In many employment situations there will be developed procedures for dealing with, for example, conduct, performance, sickness and redundancy.  The very small number of potentially fair reasons specified in section 98(2) indicates how important it is for there to be a residual category of substantial reasons now known as SOSR under section 98(1).  
 
35.	There is no error of law when an Employment Tribunal upholds an employer’s decision that the breakdown of trust and confidence has been caused or contributed to by the Applicant’s conduct, categorising this as some other substantial reason for a dismissal. Thus, the employer in this case discharged its duty under section 98(1) to show a reason.  The Tribunal considered most anxiously the submissions, for it records in its judgment of 22 pages, all of the submissions made by the Applicant’s and Respondent’s solicitors, covering at least half of the extended reasons.
 
36.	It was also careful to consider whether or not this was an issue of mislabelling, and, if it was, what the reason was for it.  Taking both of those contingent positions, the Tribunal found in favour of the Respondent submission.  The true facts of and beliefs in the dismissal pursuant to the judgment of the Court of Appeal in Abernethy v Mott Hay & Anderson [1974] ICR 323 had been ventilated at each stage and the Tribunal had no doubt that the reason was that given by the Respondent.  This ground of appeal is dismissed.
 
Fairness
37.	The Tribunal then went on to consider, both as a matter of substance and procedure, whether the Respondent’s conduct was unfair.  It is notable that it accepted the Respondent’s case that the Applicant had battled on every single point, both substantive and procedural, and, in forceful reasoning, it itemised each particular ground on which it relied.  It further held that the Respondent was entitled to conclude that relationships had broken down by 11 October, the date on which the dismissal occurred and that the cause of the breakdown and the impediment to the restoration of confidence was the Applicant’s conduct.  That then is the basis for deciding that the dismissal was fair in substance, subject only to the issue of procedure.
 
38.	The Tribunal acknowledged that no recognised orthodox procedure was in place here.  This was a very small business.  It also noted:-
 
“It is also true that the applicant had been told that neither of these issues would lead to his dismissal.  But it was not these issues on their own which led the respondents to dismiss him - it was the cumulative effect of everything that had happened over the preceding two months which brought about the respondent’s decision.”
 
But it concluded that there was no procedural unfairness because the matters were in the hands of the Applicant rather than the Respondent.
 
39.	By this comment we take it that the Tribunal is assuming that the Applicant had the means by which he could resolve one of the issues, that is, the medical issue.  He chose not to do so.  Sadly, we have been told today that the Applicant has indeed suffered mental illness and has been detained under the Mental Health Act at some stage since the conclusion of these proceedings. We can now well understand both the Tribunal’s and the Respondent’s approach to the medical issue in this case.  The Respondent was, in our judgment, entitled to resolve the matter in the way it did, in the absence of the Applicant producing medical evidence.  That, of course, related to the very beginning of the Tribunal’s judgment, and ours, and the source of one of the problems which is the Applicant’s absence.  Disability under the 1995 Act has not become an issue in this case.  Thus, in our judgment, the Tribunal did not err in law when it decided that the Respondent fairly dismissed the Applicant.
 
40.	Lest it be criticised for incompleteness in its decision, the Tribunal went on to deal with the submissions made to it in relation to Polkey.  It was not strictly necessary for it to do so but the conclusion which it came to was that, had there been a defect in the procedure, as to which there was none, then any fairer procedure the Respondent might adopted would have resulted in the same conclusion, even if medical evidence had been produced.  In the absence of any ground of appeal based on this auxiliary finding, it is not necessary for us to take the matter any further.  No argument was put before us.  
 
41.	Nevertheless the Tribunal considered further if there were any residual unfairness whether the appeal process had resolved it. Applying Whitbread, and looking at the dismissal and the appeal process as one, we accept the Respondent’s contentions that what was going on here, despite its label as a full review by the Tribunal, was indeed a full rehearing.  All of the components were in place.  It must be borne in mind that what fairness requires, as a matter of substance, is for certain steps to be taken and we accept that those steps which were taken at the appeal, constitute a full rehearing of the matter. On that second auxiliary point of the Tribunal, no error arises.
 
42.	We turn then to Mr Paterson’s final submission relating to contribution.  As we indicated, language differs in the two subsections.  “Blameworthiness” is a component (see Nelson v BBC [1977] ICR 649) in any decision to reduce a compensatory award under section 123(6).  In the absence of any appeal on Polkey, this matter simply does not arise.  We then turn to section 122 for a Polkey reduction does not extinguish a basic award. The question, therefore, is whether any conduct of the Applicant prior to the dismissal would make it just and equitable to reduce any compensation, which, on this footing, might be due to him.  The Tribunal concluded that it did not need to answer this question in the light of its early findings but said this:-
 
“We merely state that if the applicant had been unfairly dismissed, we would assess his contribution at 100%.  The letter to Mr Zinn would have justified summary dismissal.”
 
43.	In our judgment, that is a conclusion of fact by the Employment Tribunal, having assessed the letter as a matter of language and in its context of the Applicant’s relationship with his employers.  Its finding that that would have justified summary dismissal was a decision to which, if it had been called upon to make it, would have been properly made, based upon legal authority. This may be an almost academic matter since the basic award would be £500 we are told.  But we can find no error and we can find no error in the assessment of what is regarded as just and equitable at 100%, and so this ground of appeal too is dismissed.  We would like to thank both solicitors very much for their kind attention to the detail and for completing this case in time made available today.
 
Expenses or costs
44.	On hearing our judgment an application was made by Mrs Gale for costs or expenses pursuant to Rule 34.  The basis of the application was that the appeal was misconceived.  The Applicant had been put on notice that such an application would be made if the appeal failed.  We have had an indication from Mrs Gale of the costs incurred, which, on a very preliminary view, appear to us to be reasonable, if we were to do the assessment ourselves, based on her level of experience and her rates and her travel costs from England, and, upon the basis that the EAT encourages representatives who have appeared below, to be given the opportunity to appear on appeal for obvious reasons of continuity and consistency.
 
45.	On behalf of the Applicant it is contended that the Applicant had the right to have his case vindicated, and, although in practical terms, as our judgment makes clear, he would stand to gain very little if he won, he would at least stand to have the decision of fair dismissal reversed and be in possession of an unfair dismissal finding.
 
46.	This case was set down for a day.  It had been considered by the Judge on the sift as meriting a full hearing.  That in itself, is not a ground for refusing an application for costs but we do refuse the application.  This case does not come within the condign epithets as appear in Rule 34, or, in our judgment, as being misconceived as that term is now understood in the 2001 Employment Tribunal Rules.  Arguments have been put.  The Applicant has lost, and, probably he will think he has lost quite comprehensively, but, in our judgment, he does not cross the threshold into the territory of Rule 34 and we will refuse the application.
 
47.	The Employment Tribunal is still seised of an outstanding application following its decision and reasons, for costs made on behalf of the Respondent, which will need to be dealt with and our judgment will be made known to it by the parties.