Appeal No. UKEAT/0109/03

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH EH3 7HF

	At the Tribunal
	On 28 July 2004

 
Before
HIS HONOUR JUDGE McMULLEN Q.C.
MISS J A GASKELL
MR P M HUNTER

 

EILDON LTD	APPELLANT

 

 
MISS EMMA SHARKEY	RESPONDENT

 
 
Transcript of Proceedings
 
JUDGMENT

 

 

 

	APPEARANCES

 

 
 
For the Appellants	Miss M Kerr, Solicitor
Of-
Messrs Harper Macleod
8 Melville Street
EDINBURGH   EH3 7NS

 

 
 
For the Respondent

 

 

 

 
 
Mr R McDonald, Solicitor
Of-
Messrs Stronachs
Solicitors
46 Church Street
INVERNESS   IV1 1EH

 	

 

 

 

 

 

 

 

 
SUMMARY
 
PRACTICE AND PROCEDURE
 
Employment Tribunal made adverse findings against Respondent when the point had not been put to its 3 witnesses in XX.  Remit to new Employment Tribunal.

 

 

 

 

 

 

 

 

HIS HONOUR JUDGE McMULLEN QC:
 
1.	This case is about the procedure of an Employment Tribunal handling a complaint of unfair dismissal on the grounds of pregnancy.  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 Respondent in those proceedings against a decision of an Employment Tribunal sitting at Inverness, Chairman, Miss F C C Carmichael, registered with extended reasons on 10 October 2003 after a one day hearing.  The Applicant was represented there by a solicitor in Mr McDonald’s firm, who is no longer with it, and, today, by Mr McDonald himself.  The Respondent was represented there and here by Miss M Kerr, Solicitor. 
 
3.	The Applicant claimed unfair dismissal.  She was not permitted to make a last minute amendment to the originating application to make a claim for sex discrimination.  She alleged that she was dismissed for reasons of her pregnancy and that all relevant people knew of her pregnancy, except for Mr MacIver, the Manager.  
 
4.	The Respondent contended Mr MacIver dismissed the Applicant for reasons unconnected with her pregnancy.  On the contrary, it was for her closeness to illicit possession of the Respondent’s liquor.
 
The Issues
5.	The essential issues as defined by the Employment Tribunal were as follows:-
 
“The applicant claimed she was unfairly dismissed from her employment as a barmaid by the respondents for a reason connected with her pregnancy. The respondents admitted dismissing, contending they did so by reason of her conduct and claiming they were unaware of her pregnancy at the date of dismissal.
 
ISSUES FOR THE TRIBUNAL
The issue for the tribunal was to determine what the reason for the applicant's dismissal was and whether it was a reason connected with her pregnancy.”
 
6.	The Tribunal decided that the Applicant was unfairly dismissed on the grounds of pregnancy and awarded her £5,094.  The Respondent appeals against that decision.  Directions sending this appeal to a full hearing were given in Chambers by the Honourable Lord Johnston.
 
The Legislation
7.	The relevant provision of the legislation is section 99 of the Employment Rights Act 1996.  The Tribunal directed itself by reference to that provision as follows:-
 
“Only if the reason for the applicant's dismissal was found to be pregnancy or a reason connected with her pregnancy, could she competently complain of unfair dismissal, since she did not have the necessary qualifying service to bring a complaint otherwise. Under section 99 of the Employment Rights Act as amended, an employee who is dismissed is to be regarded as unfairly dismissed if the reason or the principal reason for the dismissal is of a prescribed kind, or takes place in prescribed circumstances. Under subsection (3) of that section -
"A reason or set of circumstances prescribed under this section must relate to-
(a)	pregnancy …””
 
8.	There is no dispute between the parties before us that that is a correct direction.  It also common ground that it is for an employer to show the reason for dismissal, even where as here, what is described as automatic unfair dismissal is alleged.
 
The Facts
9.	The Employment Tribunal found as follows;-
 
“i Facts material to the Tribunal's decision
The respondents are the owners of the Grosvenor Hotel in Inverness, of which Harleys Bar forms part, and in which they employ around 40 employees.
The applicant first worked at Harleys Bar for the respondents from December 2001 until March 2002, when she resigned without notice, giving as her reason difficulties she was experiencing with a few customers (R1). Sometime in April, she returned to request a further opportunity to work at Harleys Bar, where a friend of hers was also then employed. She was then newly 19. The respondents agreed to her resuming employment, which she commenced on 1 May 2002. The respondents did not give her any letter of offer or written terms and conditions of employment. Her line manager was John Wilson, the bar manager.”
 
10.	In addition to Mr MacIver, his daughter, Mrs Nina Cooper, had day-to-day running responsibility of the business.  The Tribunal found as follows:-
 
“On 13 or 14 June, the applicant went to look at the rota for the coming week. She discovered her name was not on it. Colleen Brown was unable to explain why not, so she asked Mr MacIver. He told her he did not know anything about it and suggested she return on Monday 16 June and speak to Nina, his daughter, who had been on holiday the previous week. The applicant returned on the Monday, accompanied by Mrs Sharkey, her mother, who waited for her while she went to speak to Mrs Cooper. Mrs Cooper told the applicant it was John Wilson who had dismissed her, that she would be paid what was owing to her and to clear her belongings from her room. Mr Wilson at no time informed the applicant she was dismissed.  Mrs Sharkey later telephoned Mr MacIver to ask what the reason for dismissing her daughter was, adding, "You know she is pregnant".
Her baby was born on 31 January 2003.”
 
11.	The Tribunal found the evidence of the Respondent’s witnesses incredible and inconsistent and rejected its case that the reason for dismissal of the Applicant was her conduct.  It provided cogent reasoning for that finding.  It decided that the real reason why the Applicant was dismissed, in the gap created by the failure of those reasons to be accepted by the Tribunal, was, as she contended, her pregnancy.
 
“The attempt to pin to the applicant the blame for storing spirits stolen by someone else in the flat of her partner, then disclosing the theft to Mrs Cooper, in her version, and to the police, in Mr MacIver’s version, could not either way, in our view, constitute a reason for dismissal.  Accordingly, as the respondents’ reasons were not genuine, the tribunal concluded the real reason for dismissing her was her pregnancy, which is an automatically unfair reason.”
 
It awarded compensation based on, in part, an entitlement to maternity allowance.
 
The Respondent’s Case
12.	The Respondent submitted that the Employment Tribunal had erred in law in three respects.  First, it was not fair to the Respondent to have rejected their unchallenged evidence that the decision-maker was Mr MacIver.  Inadequate reasons had been provided by the Tribunal on key issues in the case.  Secondly, the Tribunal had misdirected itself when it found the reasons which we have cited from the Tribunal’s decision at lines 45 and onwards above.  Thirdly, the Tribunal had no evidence upon which to base its calculations that the Applicant would have been entitled to maternity allowance but for her unlawful dismissal.  No opportunity was given to the Respondent to make submissions or call evidence about this.  There was no enquiry by the Tribunal.  It is contended that if we upheld the submission we should make our own judgment that the Applicant was not dismissed on the grounds of pregnancy.  Alternatively, we should remit it to a fresh Employment Tribunal.
 
The Applicant’s Case
13.	On behalf of the Applicant it is contended, that, if there were any failure to challenge the cross-examination of the evidence of the Respondent, this would not amount to an admission.  There is no strict law of evidence applicable in the Employment Tribunal to that effect.  It is contended, that, since that was accepted to be the position, the Respondent could have sought the recall of the witnesses to have the knowledge of pregnancy point put to them.
 
14.	It is contended that as the Respondent is a limited company there was knowledge within the company, through, certainly, Mrs Cooper, and probably Mr Wilson, who was the line manager, of the Applicant’s pregnancy. Therefore, that knowledge can be imputed to the company as a whole, which is the relevant employer.  It is not fatal to the decision of the Tribunal that it did not pinpoint the decision-maker on dismissal, and, in any event, it appears to be Mr Wilson (see page 3).
 
15.	As to the competing reasons for the dismissal, the Tribunal had come to conclusions dismissing the Respondent’s reasons as being spurious, and, therefore, no error occurred in relation to the second submission made on behalf of the Respondent.  
 
16.	Finally, as to maternity allowance, there is a concession that the Tribunal got the wrong figure.  It should have been 18 or 26 weeks but it was open to it to make the decision which it did.
 
The Legal Principles
17.	The legal principles to be applied in this case appear to us to emerge from the following authorities.  A Tribunal must give reasons for its decision so that the parties can understand why they have won or lost (see Meek v City of Birmingham District Council [1987] IRLR 250 CA).  A respondent must show how a dismissal came about and what the reason for it was and this must be the subject of a finding by a Tribunal (see Del Monte Foods Ltd v Mundon [1980] IRLR 224):-
 
“The section of the Act relied upon for the purposes of this claim, it seems to us, makes quite clear that there is to be a finding of unfair dismissal, without more, if either the reason or the principal reason for the dismissal is that the woman is pregnant or is for some other reason connected with her pregnancy.  It must be shown in this case that the dismissal was because of the pregnancy or for another reason connected with the pregnancy.  If this section is relied on, it seems to us essential that it be shown that the employers knew or believed that the woman was pregnant or that they were dismissing her for a reason connected with her pregnancy.  If they do not know of the pregnancy, or do not believe that the pregnancy exists, it does not seem to us that it is possible for the employers to have as their reason for dismissal that the woman was pregnant.  In a case where it is said that the reason for the dismissal is another reason connected with her pregnancy, not the pregnancy itself, it seems to us that the employers have to know the facts alleged by the employee as grounding the reason and also to know or believe that those facts relied upon are connected with the woman’s pregnancy.”
 
18.	In a case where what is to be considered is the reason for an action, it is the mind of the decision-maker which must be examined.  See the speech of Lord Nicholls of Birkenhead in Chief Constable of W Yorkshire Police v Khan [2001] ICR 1065, 1072 para 29 citing his speech in Nagarajan v LRT[1999] ICR 877, 844F. 
 
19.	An Employment Tribunal should not make a finding on an issue in dispute in a case adverse to a party without the party being given the opportunity to comment on it Chapman v Simon [1994] IRLR 124 CA.  An Employment Tribunal is not bound by formal rules of evidence and the rule of evidence in Scotland that a point not put to a witness constitutes an admission by the other party does not apply strictly in an Employment Tribunal but the rule as to fairness we have cited does.
 
Conclusions
20.	Applying those principles to the circumstances before us, we uphold the submissions of the Respondent, that the heart of this case is the reason for the treatment by the Respondent of the Applicant.  The company is not to be fixed with knowledge here of pregnancy just because one of its managers knows that the Applicant is pregnant.  The critical questions are:-
 
(a) Who, on behalf of the company dismissed the Applicant?
(b) Did that person at the time know she was pregnant?
(c) If so, did that person dismiss her for a reason which relates to her pregnancy?
 
21.	It follows if there was no knowledge in the mind of the relevant decision-maker, the dismissal cannot relate to the pregnancy.  It is common ground that the three witnesses called by the Respondent were not challenged when they said that the decision-maker was Mr MacIver.  This is indeed consistent with the Respondent’s Notice of Appearance.  It also follows from the Applicant’s assertion in her Originating Application that all knew, bar Mr MacIver, of her pregnancy.  
 
22.	The passages which we have cited, indicates the Applicant’s first impression that it was Mr Wilson who had made the decision.  If that is a finding, appearing where it does in the Tribunal’s reasons, then, in our judgment, it is unfair to have made such a finding against the evidence, all one way, that it was Mr MacIver who made the decision, unless those witnesses, including Mr MacIver, had been challenged. This was a key element in this case and there is no satisfactory finding by the Tribunal on that key question.  Since knowledge is such an important issue, a finding, which effectively is adverse to the Respondent on that matter, should not have been made without the relevant witnesses having the opportunity to comment upon it.
 
23.	It follows that this failure of natural justice leading to the decision on the principal issue cannot be rectified by a simple controlled remission pursuant to our powers in, for example, English v Emery Rheinbold [2003] IRLR 700 CA. Attractive as that proposition might have sounded when we canvassed it with both of the representatives today, it still would not solve the problem which Miss Kerr adverted to, that none of her witnesses had been able to give a comment on the key issue, which was who made the decision and who had knowledge of the Applicant’s pregnancy at the time the decision was made.
 
24.	It will be remitted to a freshly constituted Employment Tribunal for a rehearing. In those circumstances it is not necessary for us to deal with the second point of the appeal and we note the concession that the third is correctly made.  We would very much like to thank both of the solicitors who appeared today for their very fair and controlled presentations. This case is likely to be heard after the new regulations come into effect on 1 October 2004/ In order to focus people’s minds on what the essential issues are, we will order that 28 days from today there be exchange of witness statements of all those to be called which will form the evidence in chief of those witnesses; and a transcript will be available of this judgment. Appeal allowed.