Appeal No. UKEAT/0202/12/LA

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

	At the Tribunal
	On 15 October 2012

Before
HIS HONOUR JUDGE HAND QC
MR J MALLENDER
MR H SINGH

MR B S O’HANLON	APPELLANT

POST OFFICE LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR NIGEL MOORE
(of Counsel)
Instructed by:
Irwin Mitchell LLP Solicitors
Imperial House
31 Temple Street
Birmingham
B2 5DB
	
For the Respondent	MR ROBERT DICKASON
(of Counsel)
Instructed by:
Eversheds LLP Solicitors
Kett House
Station Road
Cambridge
CB1 2JY

SUMMARY
UNFAIR DISMISSAL
Reason for dismissal including substantial other reason
Reasonableness of dismissal

The Employment Tribunal erred in deciding that the unfair procedure did not matter because it related to matters, which the ET concluded, by a process of itself defining the reason for dismissal as opposed to considering the Respondent’s reason, were not a significant part of the reason for dismissal.

HIS HONOUR JUDGE HAND QC

1.	This is an appeal against the judgment of an Employment Tribunal comprising Employment Judge McLaren and Messrs Ross and Tomey sitting at East London over three days in September and December 2011.

2.	The Employment Tribunal concluded that the Appellant, the Claimant below, when his 20-year career in the Post Office ended on 26 February 2010, had been fairly dismissed.  The Employment Tribunal identified three issues at paragraph 6.1 of the Judgment at page 24:

i.	was the reason for dismissal a potentially fairly one in that the Respondent had a genuine belief in the Claimant’s guilt, based on reasonable grounds and arrived at following a proper investigation?
ii.	was the dismissal procedurally fair?
iii.	was the dismissal within the range of reasonable responses?

3.	The Employment Tribunal then went on to direct itself, in terms of the well known authorities of British Home Stores v Burchell [1978] IRLR 379, Sainsbury’s Supermarkets Ltd v Hitt [2003] IRLR 23 and Hajianou v Coral Casinos Ltd [1981] IRLR 352 on the approach to be adopted where the reason relied on was conduct.  

4.	Having given itself those directions as to law, the Employment Tribunal went onto consider the facts, which were that on 30 December 2009 a regular at Houndsditch Post Office, known only as “George”, arrived there in the morning and started to drink beer, something he was wont to do.  He left but returned after 1.00 pm and settled down to drink some more cans of beer.  He was sitting opposite the counter where the Claimant was working and was both talking and shouting; this too was a regular occurrence.  Not surprisingly there was, in effect, a standing instruction that when he attended with alcohol staff would use their judgment as to whether he should be ejected.  

5.	On this afternoon, George started to make a nuisance of himself with a customer and something said by the Claimant about George to Mrs Jethwa, the Assistant Branch Manager, who was in charge that afternoon, appears to have upset that customer.  The Claimant had in fact used the word, “Okay” and the customer said, “You think that’s okay do you mate?”  This appears to have caused the Claimant to lose his composure; he slapped his hand on the counter and said, “Why does everyone keep fucking asking me?” he then left his position saying, “I’ve had enough of this shit, I am going home.”  Not long afterwards he returned and apologised to the customer who, be it noted, returned the apology.  He then spoke to the Assistant Branch Manager and said he was feeling stressed and was leaving.  She apparently replied, “Okay”.

6.	Although the Claimant telephoned the Assistant Branch Manager later to say that he did not have a personal issue with her and that he would be back at work the following day, in fact he did not come in.  Instead he telephoned to say he was still feeling unable to attend work.  He spoke to Mr Lawrence, the Branch Manager who was present the following day.  Mr Lawrence told him he was suspended because of the incident with the customer.  There followed, during that suspension, two investigations by different managers.  The Claimant, in the course of the investigations, said that his reaction had been due to stress, which in turn had been caused by the fact that the branch was short staffed.

7.	During these investigations a previous incident was disclosed.  Apparently the Claimant had kicked a trolley and hurt his foot.  It was also alleged on behalf of, but apparently not by, Mrs Jethwa, the Assistant Branch Manager, that she was petrified of the Claimant.  The Claimant was charged with serious abusiveness, allegedly swearing and exhibiting aggressive and threatening behaviour towards customers and colleagues and leaving work in the middle of a shift without permission.  The next event is succinctly summarised at paragraph 28 of the Judgment as follows:

“28. The Claimant was then sent an invitation to attend a formal disciplinary interview and this invitation is at page 95 of the bundle.  He was told that the charge was serious abusiveness, allegedly swearing and exhibiting aggressive and threatening behaviour towards customers and colleagues and leaving work in the middle of a shift without permission.”

8.	There was a disciplinary hearing on 10th February 2010.  As a result of which, the Claimant was dismissed for:

“[…] behaviour demonstrated on Wednesday 30 December and the fact that the Claimant had left his place of work without permission.” 
(see paragraph 29)

9.	It is also said at paragraph 29 that the dismissing manager, Mr Middleton, reached a decision to dismiss on the basis of one incident only.  The Claimant appealed against his dismissal and on appeal it seems that Mr Middleton wished to rely on other matters and this is how  the Employment Tribunal puts it at paragraph 29:

“Page 111 of the bundle sets out Mr Middleton’s summary of why he reached the decision.”

10.	Under the heading, “Reasons for Dismissal” Mr Middleton makes reference to other incidents which came to the light during the fact finding interview which showed that the Claimant had behaved in this manner before.  Further, at page 200 in the bundle are the notes of the fact finding interview between Mr Dunn and Mr Middleton, which Mr Dunn carried out as part of his appeal process.  Again, Mr Middleton states that the Claimant’s previous behaviour was not taken into consideration on making his decision to dismiss.  However, he again raises these previous issues. He made a statement that the Claimant was not the sort of person you wanted to be working in Houndsditch.  He is recorded in  his notes as having considered a final warning and a compulsory move or dismissal and that he did not feel it was right to place the Claimant somewhere else because he fear a repetition of his conduct.  The only option, he felt, to prevent a reoccurrence was dismissal. 

11.	These other incidents were the trolley incident, which we have already mentioned, and a new matter relating to the placing of labels on the door of a fridge.  Mr Middleton agreed that the Claimant had known nothing about these matters being under consideration.  At paragraph 31 the Tribunal note:

“He accepted that neither incident had been raised with the Claimant by his line manager. He accepted that the incident of putting the labels on the fridge was not an explosive incident but maintained that it was not rational.  He accepted that the only evidence of intimidation of other staff was contained in Mr Lawrence’s notes and that there was no other evidence of this although he maintained the view that this is what had happened.”

12.	As part of the appeal process other colleagues were interviewed and new evidence was gathered.  The Claimant knew nothing about this.  As a result of the appeal process, Mr Dunn, the manager hearing the appeal, confirmed the dismissal in relation to using abusive language to a customer, but overturned the dismissal decision insofar as it related to the Claimant being aggressive to other colleagues and leaving his place of work.

13.	The Employment Tribunal summarised it in this way at paragraph 38 of the Judgment:

“His [Mr Dunn’s] evidence before the Tribunal was consistent with the summary that he held the Claimant had sworn at a customer.  He relied on the witness statements of those also present to reach this conclusion.  In his summary Mr Dunn did refer to other incidents concluding that these were consistent with the Claimant’s behaviour.”

14.	The Tribunal continues:

“Mr Dunn was asked a series of questions in cross examination as to what was the reason for dismissal.  He was asked for example why he investigated the incident with the trolley and how this was relevant.  Mr Dunn’s answer was that it was relevant for him to ask about and that it showed how the Claimant had reacted in a similar situation to the one he was suspended for.  He was asked whether he used the trolley incident as part of the dismissal and replied that he did not feel that it had been dealt with properly.  He stated that in terms of decision making he was taking into account the likelihood of recurrence and felt there was such a likelihood.  The decision to uphold the dismissal was because it was gross misconduct but it was likely to happen again as it had happened previously.  He did take into account the likelihood of recurrence.”

During the course of argument both Mr Moore of counsel who appeared on behalf of the Claimant and Mr Dickason of counsel who appeared, as he did below on behalf of the Respondent, relied on this as being an important passage.

15.	Mr Dickason pointed out that the Tribunal went on at paragraph 40 to say this:

“He [again Mr Dunn] was asked about what weight he put on this other behaviour and he replied that he included it as evidence of the Claimant’s behaviour as it was not just the one statement he had made and he did not believe the prior incidents had been dealt with properly but that he was not applying punishment.  He said he had dismissed for the incident but again stated that based on the other matters he felt the behaviour would recur.  He did not, however, go so far to say that he would not have dismissed based on one act of misconduct only, i.e. the incident of 30 December.”

16.	At paragraph 49 the Employment Tribunal recorded this in the last sentence:

“[…] we find the reason for dismissal was conduct which is of course a potentially fair reason.”

and then reached this conclusion at paragraph 50, which was another part of the Judgment well travelled by counsel during the argument.  It reads as follows:

“However, we also find that the conduct to which the Claimant was dismissed was not limited to the events of 30 December.  In our view Mr Dunn in reaching a decision also took into account the other instance of the Claimant’s apparent behaviour.  These included the trolley incident and the fridge label incident.  We make this finding based on two points.  Firstly, in cross-examination Mr Dunn confirmed that he took into account the Claimant’s behaviour certainly as to the likelihood of recurrence.  On the evidence given to this Tribunal this behaviour was part of the decision making process and this is further confirmed by the documentary evidence, in particular in the summary of its findings at page 211.  Secondly, we find that his investigation was significantly wider than that carried out by the investigation prior to the disciplinary hearing.  We find that Mr Dunn asked three witnesses who had not previously been asked to give an account of the Claimant’s apparent other behaviour to give him details of that.  We can find no reason to do so unless that formed part of his decision making process which we consider he confirmed to us in answer to cross-examination questions.”

17.	The Employment Tribunal then went on to apply the Burchell test and to conclude that the Respondent had a genuine and reasonable belief in the Claimant’s guilt as to the incident of 30 December.  At paragraph 53 the Employment Tribunal says this:

“However, as noted, we found the dismissal decision was actually based on two grounds.  We find that in relation to the second ground the Respondent does not meet this test.  We find the Respondent could not have had a genuine belief in the Claimant’s guilt in relation to other conduct for a number of reasons.  This includes the fact the account of these matters are very inconsistent.  The Claimant was given no proper opportunity to dispute these facts and perhaps most importantly of all, these matters were not discussed with the Claimant at any point in his career.  His line managers, who apparently witnessed his behaviour, did not institute disciplinary procedures against him.  We find that dismissal based on these particular prior acts of conduct is unfair and that the Respondent could not have reached a reasonable belief in the Claimant’s guilt and had not followed a proper investigation.”

18.	The Tribunal goes on to say at paragraphs 54 and 56:

“54. The Respondent cannot therefore properly rely on the second ground in order to dismiss the Claimant. However, while we have found that Mr Dunn did consider both grounds when reaching his view, we have not found any evidence that Mr Dunn would not have dismissed had he considered the first ground alone.
[…]
56. We would say that in accordance even with the Respondent’s own view of its procedure those interview notes should have been shared with the Claimant prior to the appeal decision being confirmed to him.  We are also concerned as to the presence of Mr Lawrence who after all was a witness to this matter being a companion at the investigatory meeting with others.  However as we have found the dismissal was fair on the first allegation in relation to 30 December these flaws in the process relate only to the second strange and therefore would not have affected the outcome of the dismissal itself.  We do not therefore find them fatal to the fairness of the dismissal.”

The double negative in the last sentence of paragraph 54 echoes the double negative in the last sentence of paragraph 40 to which we have already referred. 

19.	It seems to us that on analysis two matters arise.  Firstly, what conduct was being considered by the Respondent when it dismissed the Appellant?  Secondly, did the dismissal process take account of all of the conduct that was being considered?  Mr Moore of counsel of behalf of the Claimant submitted that the Employment Tribunal had found that the reason for dismissal was conduct; see paragraph 49.  But that that conduct was not limited to the events of the afternoon of 30 December 2009, it included at least the earlier trolley incident and the fridge label incident.

20.	Mr Moore pointed out that in the ET3 form the employer had put forward only the events of 30 December 2009 but, clearly, as the Tribunal had discovered in the course of investigating the evidence, both Mr Middleton and Mr Dunn had taken into account other matters.  Mr Moore’s submissions went so far as to suggest that the Employment Tribunal had come to the conclusion that it should reject Mr Dunn’s evidence and that in effect it had found him not to be a credible witness.  Mr Dickason submitted, on this issue, that a fair reading of the judgment of the Employment Tribunal led to precisely opposite result; that the Employment Tribunal had in fact accepted Mr Dunn’s evidence.  

21.	Our conclusion is that Mr Dickason is correct.  An examination of paragraphs 39 and 40 and 55 and 56 demonstrates, we think, that the Employment Tribunal indeed did accept that Mr Dunn was focusing to an extent on the incident of 30 December but, in upholding the dismissal, he also took account of the earlier material.  Not referred to by either counsel but part of the bundle of authorities placed before us was the judgment of the Court of Appeal in Taylor v OCS Group Ltd [2006] ICR 1602; that it was not referred to is perhaps unsurprising because in many respects it was an entirely different matter under consideration by the Court of Appeal in that case.  The Court of Appeal does however as part of its analysis of the issue in that case refer to West Midlands Cooperative Society Ltd v Tipton [1986] ICR 192.  At paragraph 30 of the judgment of Smith LJ in the Taylor v OCS Group case she quotes from Lord Bridge’s speech at page 202 where he says:

“Both the original and the Appellate decision by the employer in any case where the contract of employment provides for an appeal and the right of appeal is invoked by the employee are necessarily elements in the overall process of terminating the contracts of employment.  To separate them and consider only one half of the process is to introduce an unnecessary artificiality.” 

22.	Neither Counsel has submitted that we should concentrate only on Mr Middleton and, consistent with the approach identified by Lord Bridge, the Employment Tribunal was clearly looking at this matter both in terms of the original dismissal and the appeal and was ultimately considering whether the dismissal, looked at as a whole, was fair or unfair within the statutory parameters set out in section 98(4).

23.	Mr Moore submitted that the Employment Tribunal had found the Respondent could not have a reasonable or genuine belief as to the truth of anything except the incident on 30 December.  The additional matters had not been the subject of a proper investigation and therefore could not reasonably have been regarded by the Respondent as part of the analysis that led to the conclusion that firstly there was a sufficient reason for dismissing the Appellant and secondly, that the dismissal on those grounds would have been a reasonable sanction to apply under section 98(4).  It could not be reasonable because the Appellant had never had any opportunity to consider, answer or challenge those additional allegations, something which plainly was required by section 98(4) if the dismissal was not be characterised as an old fashioned failure to accord him natural justice.

24.	Mr Moore accepted that the Employment Tribunal had appeared to have considered all of this, but at paragraph 54 and 55 had in effect concluded that these matters could be disregarded and that what should be considered was the conduct on 30 December by itself.  If that was considered then it would have been reasonable to have treated that conduct as a sufficient reason to dismiss the Claimant, so any flaws in the process related to additional factors.  Mr Moore submitted this was a flawed analysis.  There was at its heart a misdirection and Mr Moore submitted that the misdirection was of the variety identified by the House of Lords in the case of Smith v City of Glasgow District Council [1987] IRLR 326.

25.	The case of Smith was a case where the employer had set out a series of reasons for the dismissal.  They are to be found at paragraph 3 of the speech of Lord Mackay.  Paragraph 1 of the letter of dismissal was sub-divided into three lettered sub-paragraphs, all of which might be regarded as inter-connected to some extent and paragraph 2 related to an entirely different matter.

26.	Mr Moore’s submission was that when one looked paragraphs 15 and 16 of the speech of Lord Mackay, one could see that what had been identified as an error of law in that case was being repeated by the Employment Tribunal in the instant case.  At paragraph 15 Lord Mackay this:

“As a matter of law, a reason could not reasonably be treated as sufficient reason for dismissing Mr Smith when it had not been established as true, nor had it been established that there were reasonable grounds upon which the special committee could have concluded that it was true.” 

27.	And at paragraph 16 he went on to say:

“This seems to me clearly to imply that the whole conclusion of the special committee on the merit including their decision that 1(b) had been established was regarded by the Industrial Tribunal as reasonably justifying the dismissal.  I cannot agree with the view that the Industrial Tribunal properly considered this question without mentioning it all as is suggested by the Employment Appeal Tribunal.” 

28.	And at the end of paragraph 16 he says:

“To accept as a reasonably sufficient reason for dismissal, a reason which at least in respect of an important part was neither established in fact nor believed to be true on reasonable grounds is, in my opinion, an error of law.  The Industrial Tribunal fell into this error in this case.” 

29.	Mr Dickason submits that not all aspects of what he described as a composite reason for dismissal need to be proved in order for an employer to successfully resist a claim of unfair dismissal.  He points to the case of Carlin v St Cuthbert’s Cooperative Association Ltd  [1974] IRLR 188 where the National Industrial Relations Court sitting in Scotland came to the conclusion that if two reasons for dismissal were given and one reason was not established then the Tribunal could nevertheless still be acting properly so far as the first reason could be said to be the main reason.  

30.	At paragraph 4 of the short Judgment the court says this:

“We agree that if an employer gives two reasons for dismissing an employee and only one is established by the evidence laid before the Tribunal and there is no evidence as to which reason, if either, was subordinate to the other, the employers defence may fail upon the view that what was in fact the principle reason for dismissal has not been proved and so the requirements of section 24(1) have not been satisfied.  This would, in our view, necessarily be the result if either of the reasons did not come within those set out in section 24(2).” 

31.	But the Judgment goes on to say that that is not the case and further down paragraph 24 the following appears:

“But having regard to the whole history of the matter as disclosed in the evidence, there can be no doubt that both for Mr Currie and for the Board, the main reason for the Appellant’s dismissal on 24th May was his failure to discharge adequately his duties and responsibilities with regard to the introduction of the new VAT system.” 

32.	Accordingly the appeal in that case was dismissed.  The Employment Tribunal had found that the principal reason for dismissal had been made out and even though it had found that a subsidiary reason had not been made out, that did not undermine or vitiate its conclusion.

33.	So, submitted Mr Dickason, here the Employment Tribunal were in effect finding that the sticking of labels on the fridge and the kicking of the trolley were subsidiary matters and were reaching the conclusion that the principle reason for dismissal in this case were the events of 30 December.  Accordingly the case of Smith was not as fatal as Mr Moore’s submissions had suggested.

34.	But Mr Moore’s submissions did not rest entirely on the case of Smith.  Mr Moore submitted that what the Tribunal had done was to dissect the reason given for dismissal, amputate the bad and pronounce the residue sound.  As a matter of statutory interpretation, section 98(4) provides no warrant for what Mr Moore described as deconstruction of the reason given for dismissal.

35.	We accept Mr Moore’s submission that what the Employment Tribunal have done here is to take part of what was being put forward by the employer and pronounce it a healthy and sound reason for dismissal.  In our judgment, what the Employment Tribunal had found by a combination of paragraphs 39 and 40 and, for that matter, 49 to 56 of the Judgment is that the reason for dismissal in this case was gross misconduct.  The gross misconduct comprised the conduct on 30 December and conduct on earlier occasions which, whilst it would not of itself necessarily have amounted to gross misconduct, indicated that a sanction of dismissal was a reasonable and justifiable sanction in the circumstances because there was likely to be a recurrence.

36.	What the Tribunal have done is to cut out of that reason the earlier alleged conduct leading to the conclusion that there might be a likelihood of recurrence and to identify as the reason for dismissal the events of 30 December.  In our judgment, that was an error of law on the part of the Employment Tribunal.  In effect, the Employment Tribunal substituted its own reason for dismissal for that of the employer.  Having through a careful sifting of the evidence arrived at a position that 30 December 2009 was not in fact the sole basis on which the Claimant, was dismissed, the Employment Tribunal then proceeded itself to revert to 30 December as the sole reason for dismissal.  In our judgment that was the Employment Tribunal substituting its own analysis for that of the employer.

37.	Mr Dickason in his careful submissions argued that in fact the Employment Tribunal were finding that Mr Dunn was relying only the events of 30 December.  To an extent that submission depended on the charm of the double negative as demonstrated by the last sentence of paragraph 40 and the last sentence of paragraph 55.  We do not find any positive evidence that Mr Dunn had expressed himself in those terms and, indeed, the other findings as to the position of Mr Dunn set out in paragraph 39, and in particular in the penultimate sentence of paragraph 39, contradicts any such analysis.  It may be that Mr Dunn felt that what happened on 30 December was gross misconduct but he clearly dismissed because he thought that such conduct was likely to recur.  He thought that because he was taking into account and had found that there had been previous incidents of misconduct which he thought affected an analysis of the Claimant’s personality and led to the conclusion that dismissal was an appropriate sanction because such conduct was likely to recur.

38.	All of that, on the Tribunal’s own findings, was unsound.  The Tribunal had found that Mr O’Hanlon had not been offered an opportunity to deal with these matters and say what he wanted to say about these matters.  For those reasons we would allow the appeal.

39.	It is not necessary in those circumstances to go on to consider the second and third of Mr Moore’s grounds, but for the sake of completeness we will do so.

40.	Mr Moore submitted that the Employment Tribunal in the way that they approached this have in fact turned the decision of Polkey v A E Dayton Services on its head.  Here the Tribunal have in effect reached the conclusion that it would have made no difference for the Claimant to have had an opportunity to deal with the thinking of Mr Dunn or in fact to deal with whether or not the thinking was soundly based on the true facts relating to either the fridge labelling incident or the trolley kicking incident.  In those circumstances, Mr Moore submits that the Employment Tribunal should have arrived at the conclusion that the dismissal was unfair before taking into account whether or not following a fair procedure might have made any difference.  We were attracted to that argument to a considerable extent but it depends on whether or not the first point made by Mr Moore is accepted or not accepted.  If this is an analysis of two reasons for dismissal and the principal reason for dismissal relates to 30 December and is a sound reason, then it seems to us the argument does not really have any traction.  If, on the other hand, there was an error made then the issue of whether or not the Tribunal have got it the wrong way round is scarcely determinative of the appeal. We would not regard this point as of itself having sufficient strength to stand on its own; as it is, because of our first finding, it does not really take the issue further.  

41.	Mr Moore’s third point related to perversity.  We confess to having some sympathy with the view that this was a harsh decision by the Employment Tribunal.  On the other hand, although we do not actually have the code that is referred to in the Judgment it seems that the Respondent places considerable emphasis on its relations with customers.  Whether this is truly a situation of zero tolerance is something that we cannot actually discern from the factual findings.  Were this ground to stand alone, whilst we would have some sympathy with Mr O’Hanlon’s situation, we do not feel that we could say that this was such a clear situation that we could express ourselves as so astonished by the outcome that we would regard the decision as perverse.  As it is, we do not need to decide that either although we would incline to the view that the Appellant could not clear the very high hurdle that is erected in the path of any perversity appeal.

42.	Therefore, the question arises as to how the matter should be disposed of.  Mr Moore submitted that we should substitute our own decision for that of the Employment Tribunal.  All the facts are set out, this is a clear misdirection by the Employment Tribunal and therefore the matter should not be remitted as to liability to put it in that way, but it should go back only as to remedy.  Mr Dickason submitted that the matter should simply go back for a re-hearing.

43.	This is a case getting on now for 3 years old in the sense that the events happened almost 3 years ago.  It seems to us that we do have all the material available to us, we have all the powers of the Employment Tribunal and we have reached the conclusion that the Tribunal should have decided that this was an unfair dismissal on the basis that the Claimant did not have an opportunity to deal with a number of matters that plainly formed part of the decision making process that led to him being dismissed. 

44.	We will substitute a finding of unfair dismissal for that of the Employment Tribunal.  We will remit all issues of remedy and that will include any arguments as to whether if a fair procedure had been followed that might have made an impact on compensation, issues as to contributory fault and issues as to the quantum of compensation.  We will remit them to the same Employment Tribunal because we think that having heard the factual material, the Tribunal would be most efficiently placed to continue to hear the matter in relation to remedy.  That is, of course, subject to any decision made by the Regional Employment Judge in the event that it is impossible to reconstitute this particular Tribunal.