Appeal No. UKEAT/0059/09/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 28 May 2009

Before
HIS HONOUR JUDGE McMULLEN QC
DR K MOHANTY JP
MR S YEBOAH

THE GOVERNORS OF BIRDWELL PRIMARY SCHOOL	APPELLANT

MRS J A FITZGERALD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR H S HIRST
(Solicitor)
Barnsley Metropolitan Borough Council Legal Services
PO Box 600
Barnsley S70 9EZ	
For the Respondent	MR N RANDALL
(of Counsel)
Instructed by:
National Union of Teachers
7-9 Chequer Road
Doncaster DN1 2AA

SUMMARY
JURISDICTIONAL POINTS:  2002 Act and pre-action requirements
A teacher was given notice to terminate her limited-term contract of employment before a meeting to discuss it. The Employment Tribunal correctly found this was a breach of the 2002 Act regime and automatically unfair contrary to Employment Rights Act 1996 s98A. The correct sequence is this: the employer contemplates dismissal, calls a meeting to discuss it, makes the decision in the light of what was discussed and gives notice to terminate on a given date. The Step 2 meeting precedes the decision, the carrying into effect of the decision by giving notice, and its expiry. Employer’s appeal dismissed.

HIS HONOUR JUDGE McMULLEN QC
1.	This case is about the Statutory Dispute Resolution Procedures memorably described by Underhill P as rebarbative and still five years from their introduction causing difficulties to employers, employees and the employment justice system, now repealed.  It is in the context of a claim for unfair dismissal.

2.	This is the judgment of the court to which all members appointed by statute for their diverse specialist experience have contributed.  We will refer to the parties as the Claimant, Mrs Fitzgerald, and the Respondent, who are the Governors of Birdwell Primary School, interchangeably with Barnsley Metropolitan Borough Council which is the Local Education Authority for the school.

Introduction
3.	It is an appeal by the Respondent in those proceedings against a judgment of an Employment Tribunal sitting at Sheffield over three days and a day in private registered with Reasons on 14 October 2008 under the Chairmanship of Employment Judge Little.  The Claimant today is represented by Mr Nicholas Randall of Counsel, a representative of the NUT having represented the Claimant below, and Mr Steven Hirst appears, as he did at the Employment Tribunal, a Solicitor for the Respondent.

4.	The Claimant made a number of claims including sex discrimination, pregnancy discrimination, automatic unfair dismissal and ordinary unfair dismissal.  She failed on her discrimination claims but succeeded on automatic unfair dismissal contrary to section 98A of the Employment Rights Act 1996 and ordinary unfair dismissal contrary to section 98(4).  The Tribunal assessing the projection of compensation concluded that there was a 25 per cent chance that had she not been unfairly dismissed she would have been dismissed in any event: Polkey [1987] IRLR 503 HL. A remedy hearing awaits.

5.	The Respondent appeals.  Directions sending this to a full hearing were given on the sift by HHJ Peter Clark.  The parties agree that the second and third grounds of the appeal do not arise. They were a challenge to the finding of ordinary unfair dismissal and an issue relating to termination of employment by reason of the ending of a limited-term contract, as it is described in section 95, as amended by the Fixed Term Employment Regulations 2002. 

6.	The Tribunal made its judgment on section 98A and recorded that it was not necessary for it to make a decision on ordinary unfair dismissal.  We are grateful to it for having made that decision lest it were incorrect in its application of the law on section 98A, but since the Employment Tribunal was not strictly required to make a judgment on it the parties agree before us that nor need we add a hypothesis to that hypothesis.  

7.	The issue, therefore, is section 98A, which makes a failure to follow the regime an automatically unfair dismissal. That is a reflection on the regulations and upon Schedule 2 to the Employment Act 2002, which provides in relevant part for dismissal and disciplinary procedures in the following way,

“Step 1: statement of grounds for action and invitation to meeting
1	(1)	The employer must set out in writing the employee’s alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.
(2)	The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

Step 2: meeting
2	(1)	The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.
(2)	The meeting must not take place unless‑
(a)	the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b)	the employee has had a reasonable opportunity to consider his response to that information.
(3)	The employee must tale all reasonable steps to attend the meeting.
(4)	After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it.”

There is provision in Step 3 for an appeal but that is not relevant for today’s purposes.  The Employment Tribunal directed itself in accordance with those statutory provisions.

The facts
8.	The Respondent is a primary school in Barnsley.  The Claimant was employed pursuant to a contract now known as a limited-term contract with effect from 1 September 2005 for one year to terminate on 31 August 2006.  She had one year’s service for unfair dismissal claims by reason of her service elsewhere (Employment Rights Act 1996 s 108).  The Claimant was in a school where some positions were the subject of change, principally because of the demographic changes occurring amongst the school population in the Barnsley area.

9.	So far as is now relevant to the appeal, the Respondent’s need for the Claimant to continue in the role she was in was ceasing.  There were two vacancies.  There were three contenders, the Claimant, Mr Hussain and Mrs Priest.  The Tribunal found that there was no policy for slotting teachers into a particular category.  That was the subject of an inchoate challenge before us but on an invitation to Mr Hirst to consider applying to amend the Notice of Appeal no amendment was sought.

10.	The position for what became Mrs Priest’s job was the subject of a slotting in exercise; she got the job.  But the one that became Mr Hussain’s job was one for which the Claimant was required to compete.  There were 26 applicants, six were short-listed, including the Claimant and Mr Hussain, but she could not attend and, as the Tribunal found, inevitably did not get the position.  The Claimant registered a grievance and attended a meeting on 30 June 2006.  Her grievance was as to the way in which the process of finding an alternative position for her had been conducted.  There was no resolution.  She raised a grievance to which written answers were provided which are instructive, both letters dated 11 July 2006.  The first from the school was sent by Jane Gilmore, the Head, and the second was sent by Barnsley.  They were both, it is accepted by Mr Hirst, in response to the Claimant’s grievance.

11.	The Head’s letter she invited the Claimant to a meeting to take place on 17 July 2006 with governors.  On the other hand, the letter from Barnsley, which holds the contract of employment of the Claimant, was in these terms,

“I write to remind you of the notice given to terminate your fixed term contract on the 31 August 2006, detailed in the contract of employment letter sent to you on the 20th September 2005.  (Copy attached for your information).
The reason for the fixed term nature of the post was explained to you on commencement of your employment and is due to falling class numbers.  This was a defined role for a specific purpose, which, as we informed you, will cease on the 31 August 2006.
With effect from 01 September 2006, the post of Teacher in the reception class will be deleted from the school structure.
I would like to take this opportunity to thank you for your service to Birdwell School and wish you well for the future.”

12.	The Claimant duly attended a meeting of the governors on 17 July 2006.  The decision was confirmed on 24 July 2006, having been communicated earlier, that for the purposes of what the governors described as the formal stage of the grievance procedure for school teachers the Claimant’s contract was to be terminated on 31 August 2006.  She was offered an appeal against that decision - it is common ground that that corresponds to the duty under Step 3 - and an appeal was conducted without success on 2 November 2006.

13.	The Tribunal found that at both meetings the kind of material which one would expect to be canvassed was.  The finding as to Steps 1 and 2 is set out in full since it has been the subject of considerable debate before us,

“Has Step 1 been complied with?
Having regard to the description of this step in Schedule 2 to the Act, we need to determine whether the Respondent set out in writing the circumstances which led it to contemplate dismissing the Claimant.  Mr Hirst contends that that was done at the time the Claimant was appointed in September 2005 because of what is said in the letter of appointment (A23) and in the statement of written particulars (A52-A57).  He also refers us to the letter of 11 July 2006 (page A48) wherein the Claimant is reminded that the employment would cease on 31 August 2006.  We accept that each of those three documents sets out the circumstances which lead to contemplated dismissal.  However, the additional requirement of the Step 1 letter, or at least Step 1 itself, is that the employer must invite the employee to attend a meeting to discuss “the matter”.  In this regard, Mr Hirst refers us to another letter written on 11 July 2006 (A47).  That letter does invite the Claimant to a meeting - a meeting scheduled for 17 July 2006.  However, as that letter goes on to confirm, it is a meeting which “you (the Claimant) have requested in your grievance notification”.  That meeting, of course, took place, and accordingly, Mr Hirst says that that fulfilled the requirement of Step 2.  There was then the meeting which took place on 2 November 2006 and here, Mr Hirst says that met the requirement of Step 3 - that there was an appeal.  We find that we cannot accept these contentions.  The Claimant was never invited to a meeting in respect of which the Respondent had taken the initiative, because it was contemplating dismissal.  We accept that there had been informal meetings, or at least “chats”, between the Claimant and Mrs Gilmour, but the Claimant had not been invited to such meetings in any Step 1 letter.  The meetings on 17 July and 2 November 2006 did, of course, take place.  The matters discussed during the course of those meetings were most likely to have been very similar to what would have been discussed at Step 2 and Step 3 meetings under the statutory procedure.  However, there was a difference, and we find that it was more than a technical difference.  That related to context.  As early as the meeting between the Claimant and the Head Teacher on 30 June 2006, the Claimant believed that she had been unfairly dismissed.  That was because Mrs Priest had been slotted in and she had not been.  She had not been slotted into the second vacancy and, having been unable to attend the interview for the second vacancy, inevitably had not got that job.  Her notification of grievance document (A13) dated 6 July 2006 described the nature of the grievance as: “I believe that my dismissal from my position as a Class Teacher within Birdwell Primary School was unfair.”  Strictly speaking, the Claimant had not yet been dismissed, but she thought she had, or at least inevitably would be.  It followed that the meetings on 17 July and 2 November had the characteristic that the Respondent’s approach and demeanour was directed solely towards justifying a decision which it appears to have acknowledged (as had the Claimant) had already been taken.  Clearly, the intention of Parliament in establishing the requirement for a minimum statutory process was to ensure that before a decision was taken by the employer, the employee should have had the opportunity to put forward his or her case and persuade the employer not to take the step he was contemplating.  In the context of Mrs Fitzgerald’s case, such a meeting would have provided an opportunity for some clarity to have been given to as what the Respondent was pleased to call its policy.  There could also have been a proper enquiry and exchange of information, so that, for instance, the Respondent could correctly assess the Claimant’s length of service and so that there could be proper consultation and consideration of alternatives to dismissal, be that by way of slotting in or some other alternative.  It is for these reasons that we do not accept Mr Hirst’s contention that it was sufficient that the 3 documents came into being then meetings happened.  We need to enquire how the meetings came about and what their purpose was.  Having done that, we are satisfied that the statutory procedure was not completed and that non-completion was wholly attributable to the Respondent.  It follows that whatever else we decide, this was an automatically unfair dismissal by virtue of the Employment Rights Act 1996 s.98A.”

14.	The Tribunal alluded to what would have occurred had it been required to consider the matter under Section 98(4), ordinary unfair dismissal, and made criticisms of the Respondent for failing to consider alternatives to dismissal and the lack of consultation prior to a decision being made.  

15.	It then went on to make the decision relating to Polkey (para 4 above).

Submissions
16.	The simple proposition advanced with considerable force by Mr Hirst is that the Respondent did indeed comply with Steps 1 and 2 for the meaning of “action” in Step 2 is dismissal, in this case on 31 August 2006.  The governors were fully seised of the authority to change a decision which had been made, he volunteers, in the form of what he accepts is a notice of termination given by Barnsley on 11 July 2006.  The point he makes, however, is that since the governors often do change decisions when they go into the grievance procedure, the decision that is subject of the complaint under the grievance and disciplinary procedures was not made until the governors had decided to uphold the previous letter.

17.	Mr Randall contends that with three tools, helpfully put before us for our use, that approach must be wrong: as a matter of construction of the regulations, as a matter of authority based upon the regulations and as a matter of policy.  He further contends that the finding by the Employment Tribunal, put in shorthand as being a closed mind by the governors, is one which is a classic finding of fact for an Employment Tribunal to make and cannot be opened at this appeal.  Again, Mr Hirst was invited to consider whether an application should be made for permission to amend the Notice of Appeal to add a ground of perversity about that finding, but the matter was left as it fell.

Conclusions
18.	We prefer the arguments of Mr Randall.  We accept from Mr Hirst that in many cases the governors of a school in Barnsley, indeed any school where governors are appointed to hear a grievance or a matter relating to a dismissal, will have an open mind.  They may often decide to hear matters before a decision is in any way communicated.  But the problem with the submission is that there are firm findings of fact by the Employment Tribunal of a closed mind by the governors here.  One can see the use of the word “inevitably” and the finding that the governors’ approach on the day was directed solely towards justifying a previous decision.

19.	In those circumstances the Tribunal made a permissible finding about what occurred.  The approach of the Tribunal cannot be faulted since there is no challenge on the basis of perversity.  The Tribunal was alert to the possibilities of other alternatives.  We have not dealt in depth with those because it has not been necessary for us to hear submissions on its findings of ordinary unfair dismissal set out in paragraph 10.5.2.  But, it is sufficient to indicate that in response to a concern we had about what else the school could do, given Mr Hussain’s appointment, that the Tribunal did consider alternative ways in which the Respondent could deal with this problem.

20.	We have considered the Polkey finding and that does show an anxious consideration given to the outcome of this procedurally unfair dismissal.  

21.	As to the construction of the regulations it is clear to us that the meeting must be conducted before action is taken (see heading to paragraph 2.1).  The action is not the expiry of notice of dismissal; otherwise other forms of language would have been used corresponding, for example, to effective date of termination under the Employment Rights Act sections 97, 108.  The action referred to in para 2(1) is the decision to dismiss. The decision referred to in paragraph 2.4 is the decision to take action which in this case is to send the notice of termination.  One does not have to wait until 31 August 2006 for action to be taken in this case.  Thus, the meeting must be held before a decision is made. In simple terms the sequence is this: the employer contemplates dismissal, calls a meeting to discuss it, makes the decision in the light of what was discussed and gives notice to terminate on a given date. The Step 2 meeting precedes the decision, the carrying into effect of the decision by giving notice, and its expiry.

22.	The provisions of Step 1 are also illustrative.  This is to as to what is to be done while there is contemplation of a dismissal.  The matter to be discussed at a meeting for which the employer must send an invitation is the employer’s contemplation of dismissal.  That is not the same as making a decision to dismiss.  The use of “to contemplate dismissing” indicates that this is an inchoate stage in an employer’s thought process ahead of a decision.  That is because a decision is only reached at the end of a meeting under Step 2.

23.	As to authority, both parties relied upon the judgment of Elias P and members in Alexander v Bridgen Enterprises Ltd UKEAT/0107/06/DA 2006 where there was held to be a breach of these statutory procedures when employees facing redundancy were not, at a meeting, given proper information.  It is instructive to look at what the invitation was (see paragraph 4 of the judgment) for the employee is potentially at risk of redundancy and the meeting is to be a consultation meeting and no final decisions have been made at this time.  At the meeting proper scores were not given and so the EAT said this:

“47. Analysing the case in that way, we are satisfied that there was not here the requisite compliance. The employees were given in advance of the meeting the criteria which were adopted and we do not agree with Mr Toms that it was necessary in order to comply with this minimum standard to give them the specific guidelines which assisted management in the assessment exercise. But each of these appellants ought to have had, in our view, his own particular assessment. He ought to have been able to make a considered response to the information bearing directly on his own situation so as to correct errors and make representations about particular aspects. In this case the assessment was not given until the employees were leaving the meeting on the 21 January, but by then their fate was already determined. That was, in our view, too late to amount to compliance with step two. It was neither in advance of the meeting nor was there even an opportunity for the employees to respond to that essential information at the meeting itself. The benefit of this procedure, to enable a considered and informed response to the employer's decision, was lost in those circumstances.”

24.	Mr Randall correctly contends that that is authority for the proposition that the decision should not have been made at the time the meeting begins.  As that passage makes clear, if an employee’s fate has already been determined there is no point in having a meeting and there will be a failure to comply with Steps 1 and 2.

25.	As to policy, we reach the same conclusion.  There is no point on the one hand in writing out a notice of termination and calling the employee into a meeting, as happened here.  We note that the initiative for this was taken by the Claimant.  That seems to us to be a technical failure by the Respondent and would not, on its own, have justified us finding that in this case there was a breach.  One can imagine both parties meeting in an informal way in the corridor and on the basis of what is said between the parties a meeting is held.  But, in the context of this case it is clear that the Claimant is facing an uphill struggle.  She is registering a grievance.  For the purposes of the statutory procedures a dismissal must be preceded by action by the employer, whereas for a grievance the initiator is the employee.

26.	As Mr Hirst accepted, the letter sent by Barnsley is a notice of termination.  It is final.  The expression of goodwill at the end makes that clear.  At one point in the case it was the Respondent’s view that the contract would end automatically because of the expiry of the fixed term, but this letter makes clear that notice is given to terminate what might well have been a continuing relationship.  So, for those three reasons - construction, authority and policy - we hold that the requirements of the Step 1 and Step 2 procedure were not met.

27.	The factual basis upon which to found that judgment is, as has been set out by the Tribunal, that the governors did have a closed mind on the day.  The Tribunal had the opportunity to hear from the governors and we have heard no submission by reference to evidence that they regarded themselves as entirely free to make whatever decision they liked.  In the circumstances we accept Mr Randall’s submission that this is a classic jury question.  What was in the minds of the governors on 17 July 2006 was pre-eminently for the Tribunal to find and it found that they were simply seeking to justify a decision already made. That cannot be challenged now on appeal.

28.	In those circumstances the judgment of the Employment Tribunal was correct in relation to Steps 1 and 2.  It follows that in the light of the agreement recorded earlier this appeal will be dismissed.