Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REF:   1281/14

 

 

 

CLAIMANT:                      Cormac O’Hare

 

 

RESPONDENT:                O’Hanlon & Farrell Contracts Ltd

 

DECISION

The unanimous decision of the tribunal is that:-

 

The claimant was unfairly dismissed and the tribunal makes an award of compensation to be paid by the respondent to the claimant in the sum of £21,688.77.

 

Constitution of Tribunal:

Employment Judge (sitting alone):      Employment Judge N Drennan QC

 

Members:                                            Mr A Barron

                                                            Mr D Walls

 

Appearances:

The claimant was represented by Mr T Warnock, Barrister-at-Law, instructed by the Elliott-Trainor Partnership Solicitors.

The respondent did not appear and was not represented.

 

Reasons

 

1.1     The claimant presented a claim to the tribunal on 10 July 2014 in which he made a claim for unfair dismissal.  The respondent presented a response to the tribunal on 15 August 2014, in which the respondent denied that it had dismissed the claimant and, if it had, it contended any such dismissal was fair.

 

1.2     The respondent did not attend the hearing and was not represented.  His solicitors informed the tribunal and the claimant’s representatives, in advance of the hearing, by letter sent by e-mail on 4 December 2014, that they were no longer on record for the respondent.  In the circumstances, the tribunal was satisfied that the respondent had received the notice of the hearing dated 19 November 2014 and was fully aware of the date of hearing, namely 5 December 2014.  No reason was given by the respondent for not attending the hearing and the tribunal was not in receipt of any application for a postponement of the hearing.

 

1.3     Under the Industrial Tribunals Rules of Procedure contained in Schedule 1 of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations (Northern Ireland) 2005 (the Rules of Procedure), it is provided:-

 

“Rule 14(3)

 

The chairman or tribunal (as the case may be) shall make such enquiries of persons appearing before him or it and of witnesses as he or it considers appropriate and shall otherwise conduct the hearing in such manner as he considers most appropriate for the clarification of the issues and generally for the just handling of the proceedings.

 

....

 

(5) -    If a party wishes to submit written representations for consideration at a hearing (other than a case management discussion) he shall present them to the Office of the Tribunals not less than seven days before the hearing and shall at the same time send a copy to all other parties.

 

(6) -    The tribunal or chairman may, if it or he considers it appropriate, consider representations in writing which have been submitted otherwise than in accordance with paragraph (5).

 

Rule 27

 

(5) -    If a party fails to attend or to be represented (for the purpose of conducting the party’s case at the hearing under rule 26) at the time and place fixed for such hearing, the tribunal may dismiss or dispose of the proceedings in the absence of that party or may adjourn the hearing to a later date.

 

(6) -    If a tribunal wishes to dismiss or dispose of proceedings in the circumstances described in paragraph (5), it shall first consider any information in its possession which has been made available to it by the parties.

 

No written representations were provided to the tribunal by the respondent.  The tribunal decided to proceed to determine the claimant’s claim in the absence of the respondent, having regard to the terms of the overriding objective.  Before determining the claimant’s claim, in the absence of the respondent, the tribunal considered the claimant’s claim form, the respondent’s response form, the oral evidence given by the claimant, as referred to later in this decision, together with the bundle of documents prepared by the claimant’s representatives and the oral submissions made by the claimant’s counsel at the conclusion of the hearing. 

 

2.1     The tribunal made the following findings of fact, as set out in the following             sub-paragraphs, in so far as necessary and relevant for the determination of the claimant’s said claim.

 

2.2     The claimant was born on 15 July 1955 and was employed by the respondent as a site manager for a period of some eight years prior to 10 April 2014; and at that date was in receipt of £757.50 per week gross and £569.48 per week net.

 

2.3     The Managing Directors of the respondent were Mr Redmond O’Hanlon and Mr Sean Farrell (Senior).  Mr Sean Farrell (Senior’s) sons, Connor Farrell and Sean Farrell Junior, were part of the senior management.  The claimant reported to Sean Quinn, the Contracts Manager, and worked on various sites for the respondent over the period of his employment both in Northern Ireland and in the Republic of Ireland.  In or about May 2013, the claimant asked, at a meeting with Sean Quinn and Sean Farrell Junior, if he could take a period of unpaid leave in order to attend two family weddings in New Zealand in the period January 2014 to April 2014, returning on 4 April 2014.  This was readily agreed.  The claimant worked up until his departure for New Zealand in January 2014 at the respondent’s site at the Limestone Road in Belfast, and he ensured the work had been completed at the site before his departure.  Members of Management wished him well before he left.  On 4 April 2014, the claimant, who is a widower, arrived home to find an envelope had been left at his home address by the respondent containing a P45 which stated his leaving date was 16 January 2014.  The claimant’s last ‘pay date’, before he commenced his period of unpaid leave was 16 January 2014.  The claimant was very upset and confused by the receipt of the P45 and he immediately went to the Head Office of the respondent to ascertain what was his employment position with the respondent.  No Managers or Directors were available to speak to him but he was able to speak to a member of the wages department, Ms EH.  She was unable to give the claimant an explanation, save that she informed the claimant she had been instructed to issue the P45 by Connor Farrell.  She did not suggest to the claimant that the P45 had been sent out in error and indeed informed the claimant that everybody was aware that the P45 had been issued to the claimant.  Later that afternoon the claimant returned to the Head Office and spoke to Sean Quinn, the Contracts Manager and Paul Regan, the Commercial Manager, but they were unable to tell him anything.  They tried to suggest that they did not know that the claimant had been issued with a P45, but the claimant did not believe them, following his conversation with Ms EH earlier that day.  The next morning, on 5 April 2014, the claimant went to Mr Redmond O’Hanlon’s house and showed him the P45 and asked him for an explanation.  In response Mr O’Hanlon said that he and Sean Farrell (Senior) would come up to the claimant’s house and discuss it with him.  Again, there was no suggestion that the P45 had been issued by mistake.  Indeed, Mr Redmond O’Hanlon told the claimant that “things would be done right” and that he and Sean Farrell Senior were “going to sort it out”.  The claimant gathered from this discussion that he was not going to resume his employment, as had been agreed, upon his return from New Zealand, but rather he was in the process of being dismissed by the respondent.  No date was arranged for a further meeting and indeed at no time did Sean Farrell Senior attend any meeting with the claimant about this matter.  On 10 April 2014 Redmond O’Hanlon and Connor Farrell attended a meeting at the claimant’s home.  In the intervening period, the claimant had tried unsuccessfully to contact the respondent to find out his position.  Further, significantly, in the intervening period, no one from the management of the respondent contacted the claimant to find out why he had not returned to work following his return from New Zealand.  At the meeting on 10 April 2014, Connor Farrell told the claimant that the issuing of the P45 was a mistake but he gave no explanation as to how such a mistake could have occurred.  Mr Redmond O’Hanlon told the claimant that they had no work for him at that time, he shook his hand and said if they had any work in the future they would contact him.  He also told the claimant that he would make sure that the claimant got what he was entitled to.  At that point, the claimant knew that he was now dismissed by the respondent.  Indeed, there was no attempt by either Redmond O’Hanlon or Connor Farrell to suggest otherwise.

 

2.4     Following the meeting on 14 April 2014, the claimant immediately attended the Job Centre in Newry to make a claim for Jobseekers’ Allowance.  In the event, he did not claim any statutory benefits, including Jobseekers’ Allowance because, on 28 April 2014, he obtained a permanent position as a Site Manager with another firm of building contractors, namely Kelly Brothers, with effect from 28 April 2014 and he continues to be employed by them.  The claimant receives £1,640.36 net per month (£410.09 per week) from Kelly Brothers and therefore receives £190.94 net per week less than when he was employed by the respondent.

 

2.5     Following the meeting on 10 April 2014, the claimant consulted his legal representatives and there was then some “without prejudice” correspondence between his solicitors and the respondent’s solicitors.  On 24 April 2014, the claimant’s solicitors received, by e-mail, a letter dated 16 April 2014 from the respondent.  This letter was addressed to the claimant at 4 Moore Hill, Newry, County Down, although the claimant’s full and proper address is 4 Moorehill Road, Newry, County Down, BT34 2QJ, which would have been known to the respondent.  The claimant informed the tribunal, which the tribunal accepts, that he did not receive this letter from the respondent.  The letter stated, inter alia:-

 

                    “I refer to your attendance at our office on 04/04/14 and our visit to your home by Mr Redmond O’Hanlon and myself Mr Connor Farrell on 10/04/14 where we discussed the issue and circumstances in relation to the incorrect issue of a P45 in your name by this office. 

 

                    To be clear and so that there is no further misunderstanding we would advise that the issuing of a P45 was a mistake and apologies for any inconvenience caused.

 

                    In respect of your ongoing employment we advise that we currently have an opening on a new project.  We would request that you make contact with Mr Connor Farrell on the below contact details to discuss start date and other standard operational procedures.”

 

          The letter was cc’d to the claimant’s solicitors; but, as indicated above, not only did the claimant not receive the said letter by post nor did the claimant’s solicitors, who only received the letter by e-mail on 24 April 2014.  Having heard the claimant’s evidence of what took place at the meeting on 10 April 2014, which the tribunal accepts, the tribunal in the absence of any evidence by the respondent has come to the conclusion that this letter was written at some stage after the meeting with the claimant at his home when he was dismissed; and, following the involvement of solicitors for the respondent, was an attempt by the respondent to “undo” the dismissal that had taken place on 10 April 2014 and a vain attempt to suggest that rather than a dismissal there had been some misunderstanding.  Again, significantly, there was no attempt in the letter to explain how the P45 had come to be issued incorrectly, as set out in the letter.  In the respondent’s response form, it was suggested that “P45 was issued in error due to an administrative oversight.  In January each year the company conducts a (clean up) of the PAYE (wages) system.  Subsequently any member who is not producing time sheets and is not being paid after a period of time is automatically removed from the pay roll and a P45 is produced and sent to the employee .....”.  The tribunal found this explanation somewhat difficult to accept and, in particular, in the absence of any evidence by the respondent about how such a practice, as referred to in the response, originated and was carried out by the respondent.  In addition, this explanation did not sit easily with the evidence of the claimant, which the tribunal accepts, in relation to what he was told when he called at the Head Office on 4 April 2014, at the meeting at Mr O’Hanlon’s house on 5 April 2014 and the meeting at his own home on 10 April 2014.  It was only at the last meeting he was told the P45 was issued by mistake but no explanation, as set out in the response form, was given on any of these occasions, nor was it stated in the letter dated 16 April 2014.  By the time the claimant’s solicitor received the letter by e-mail on 24 April 2014 the claimant had already agreed to take up the new employment with Kelly Brothers, albeit at the reduced earnings. 

 

3.1     Article 126 of the Employment Rights (Northern Ireland) Order 1996 (‘the 1996 Order’) provides:-

 

                    “An employee has the right not to be unfairly dismissed by his employer.”

 

          Article 130 of the 1996 Order provides:-

 

“(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)      the reason (if more than one the principle) for the dismissal; and

 

(b)      that it is either a reason falling within Paragraph (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)     The reason falls within this paragraph if it –

 

(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)      relates to the conduct of the employee,

 

...

 

(c)      is that the employee was redundant, or

 

(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) if a duty or restriction imposed by or under a statutory provision.

 

                     ...

 

(4)     Where the employer has fulfilled the requirements of Paragraph (1) the determination of a question whether the dismissal is fair or unfair, (having regard to the reasons shown by the employer) –

 

(a)      depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably as treating it as a sufficient reason for dismissing the employee; and

 

(c)      shall be determined in accordance with equity and the substantive merits of the case.

                   

                    ...

 

                     (6)     Paragraph (4) is subject to Article 130A ... .”

 

          Article 130A of the 1996 Order provides:-

 

“(1)     An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if –

 

(a)      one of the procedures set out in Part I of Schedule 1 to the Employment (Northern Ireland) Order 2003 (Dismissal and Disciplinary Procedures) applies in relation to the dismissal;

 

(b)      the procedure has not been completed; and

 

(c)      the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with these requirements.

 

(2)     Subject to Paragraph (1) failure by an employer to follow procedure in relation to the dismissal of an employee shall not be regarded for the purpose of Article 130(4)(a) as by itself making the employer’s action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.”

 

3.2     Substantial changes to the law of unfair dismissal were introduced, following the commencement in April 2005 of the Employment (Northern Ireland) Order 2003 (‘the 2003 Order’); and the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004 (‘the 2004 Regulations’).  The 2003 Order and the 2004 Regulations introduce, inter alia, statutory procedures to be complied with by an employer relating to matters of discipline and/or dismissal.   These provisions came into operation on 3 April 2005.  They were not repealed by the Employment Act (Northern Ireland) 2011 and were therefore applicable, insofar as relevant and material to this matter.

 

In essence, the statutory procedures introduced under the said legislation required employers, subject to certain exemptions which were not applicable to this case, to follow a specific procedure when subjecting employees to disciplinary action or dismissal.  There are two alternatives, namely:-

 

(a)      standard dismissal and disciplinary procedures (DDP);or

 

(b)      a modified DDP.

 

There was no dispute that the latter procedure was never applicable in this matter. 

 

Under the standard DDP it is provided at Paragraphs 1 – 3 of Schedule 1 of the 2003 Order as follows:-

 

“(i)      Step 1 –

 

A statement of grounds for action and invitation to meeting –

 

 (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 a statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

 

Step 2 – Meeting

 

(1)      Meeting must take place before action is taken, except in the  where the disciplinary action consists of suspension.

 

                              (2)      Meeting must not take place unless –

 

                              (a)      the employer has informed the employee of what the basis was for including in the statement in Paragraph (1) the ground or grounds given in it; and

 

                             (b)      the employee has had a reasonable opportunity to consider its response to that information.

 

                              (3)      The employee must take 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.

 

                              Step 3 – Appeal

 

                              (1)      If the employee does wish to appeal, he must inform the employer.

 

                              (2)      If the employee informs the employer of its wish to appeal, the employer must invite him to attend a further meeting.

 

                              (3)      The employee must take all reasonable steps to attend the meeting.

 

                              (4)      The appeal meeting need not take place before the dismissal or disciplinary action takes effect.

 

                              (5)      After the appeal meeting the employer must inform the employee of its final decision.”

 

(ii)       There are a number of general requirements set out at Paragraphs 11 – 13 of Part III of Schedule 1 of the 2003 Order, which provide, as follows:-

 

                                        “Introductory

 

                                        (11)             The following requirements apply to each of the procedures set out above (so far as applicable)

 

                                         Timetable

 

                                         (12)            Each step and action under the procedure must be taken without unreasonable delay.

 

                                         Meeting

 

                                         (13)  

 

                                         (1)     Timing and location of meetings must be reasonable.

 

                                         (2)     Meetings must be conducted in a manner which enable both employer and employee to explain their cases.

 

                                         (3)     In the case of appeal meetings which are not the first meeting, the employer should, as far as is reasonably practicable, be represented by a more senior manager than attended the first meeting (unless the more senior manager attended that meeting).”

 

                    (iii)      Under Regulation 12 of the 2004 Regulations, it is provided, in essence, that the failure of a party to follow the applicable DDP then releases the other party from the obligation to follow it:-

 

                                         “(1)   If either party fails to comply with the requirement of an applicable statutory procedure including a general requirement contained in Part III of Schedule 1, …               non-completion of the procedure shall be attributable to that party and neither party shall be under obligation to comply with any further requirement of the procedure.”

 

                    (iv)      Under Regulation 3(1) of the 2004 Regulations, the standard DDP applies when the employer contemplates dismissing or taking relevant disciplinary action against an employee.

 

                    (v)       Existing contractual and dismissal procedures remain to the extent that they supplement the statutory DDPs – which are intended to give the employee certain ‘basic’ protections.

 

3.3     The Employment Appeal Tribunal, in the case of Venniri  v  Autodex Ltd [UKEAT/0436/07] at Paragraph 34, held the tribunals are under duty to consider whether or not a dismissal is automatically unfair (under the equivalent provisions in the Employment Rights Act 1996 [which then applied in Great Britain] to Article 130 of the 1996 Order), even where that allegation has not been expressly pleaded, which was the case in the present proceedings, on the grounds that these provisions are part of the ‘essential fabric of unfair dismissal law’.  The Employment Appeal Tribunal has also held, in the case of Metrobus Ltd  v  Cooke [UKEAT/0490/06] (Paragraphs 27 – 29), where a tribunal has made a finding of automatic unfair dismissal, pursuant to similar provisions in the Employment Rights Act to Article 130A(1) of the 1996 Order, it may be ‘useful’ for the tribunal to record its judgment, in the alternative, on the ‘ordinary’ unfair dismissal allegation, (ie pursuant to Article 130 of the 1996 Order).

 

3.4     Failure to comply with the relevant statutory dismissal procedures has an impact on compensation in relation to a claim of unfair dismissal, resulting in an adjustment upwards (in the case of default by the employer) or in an adjustment downwards (in the case of default by the employee).  Under Article 17(2) and 17(3) of the 2003 Order, the adjustment must be at least 10% and, if the tribunal considers it just and equitable, up to 50%.  However, under Article 17(4) of the 2003 Order, a tribunal can apply no adjustment (or an adjustment of less than 10%) if there are exceptional circumstances making a 10% adjustment unjust or inequitable.  Any potential uplift or reduction is limited to the compensatory award only; and there is no provision in an unfair dismissal claim to uplift the compensatory award beyond the statutory maximum (Article 158A of the 1996 Order).

 

3.5     Although the decisions of the Employment Appeal Tribunal and/or the Court of Appeal in England and Wales are not binding on this tribunal; however, the tribunal, in the absence of any relevant decisions in the Court of Appeal in Northern Ireland in relation to the said statutory dismissal procedures, subject to what is stated later in this decision, has found the decisions of the Employment Appeal Tribunal and/or the Court of Appeal in England and Wales, in relation to such matters, persuasive and appropriate to follow – in particular, in circumstances where the decision of the Employment Appeal Tribunal and/or the Court of Appeal in England and Wales relate to provisions, which were then applicable in Great Britain, and which were in similar terms to the relevant statutory provisions in Northern Ireland, to which reference has been made above.  The Employment Appeal Tribunal and/or the Court of Appeal in England and Wales has been reluctant to set down principles that fetter the discretion of a tribunal in relation to this issue of the uplift and reduction of the compensatory award in relation to a finding of automatic unfair dismissal (see Cex  v  Lewis [UKEAT/0031/07].

 

          In Metrobus Ltd  v  Cooke [UKEAT/0490/06] the EAT did not interfere with an uplift of 40% where the employer had ‘blatantly’ failed to comply with the obligation to send a Step 1 letter and acknowledged that the uplift provisions were more ‘penal than compensatory in nature’.  In Davies  v  Farnborough College of Technology [2008] IRLR 4, Burton J suggested a maximum uplift could apply where there had been a complete and deliberate breach of any procedures.  Subject to what is set out below, ultimately the extent of any uplift would appear to be a matter within the discretion of a tribunal, having regard to all material circumstances, which are unlimited.  Further, the statutory provisions do not require the tribunal to start at an uplift of 50% and work downwards in accordance with evidence of mitigation provided by the respondent (see Butler  v  GR Carr (Essex) Ltd [UKEAT/0128/07].  However, in the case of Aptuit (Edinburgh)  v  Kennedy [UKEATS/0057/06], the Employment Appeal Tribunal (in Scotland) held that, when exercising its discretion to uplift an award, the only circumstances which the tribunal may take into account are those surrounding the failure to complete the statutory procedure.  In the case of McKindless Group  v  McLaughlin [2008] IRLR 678, the Employment Appeal Tribunal (in Scotland) has again confirmed that, in exercising the discretion the tribunal must do so by reference to some particular facts and circumstances surrounding the failure to complete the statutory procedure which can properly be regarded as making it just and equitable that the employer should be penalised further.  Somewhat controversially, the EAT held that an uplift should not follow if the employer does not explain the reasons for the failure to comply, on the grounds that the statutory provisions do not oblige the employer to explain the failure.

 

          In the case of Virgin Media Ltd  v  Seddington & Another [UKEAT/0539/08], Underhill J applied the McKindless Group case and confirmed that a (if not the) primary factor requiring to be taken into account in exercising the discretion in relation to whether an uplift was applicable, related to how culpable the failure to employ the statutory procedures was.  Underhill J accepted that, in some circumstances, failure to employ the statutory procedures might speak for itself.  In addition he said that the issue of uplift should not be approached too mechanistically, as had occurred in the particular facts of that case.  In Abbey National Ltd  v  Chagger [2009] IRLR 86, Underhill J held that it was legitimate for a tribunal to take into account the overall size of an award, when deciding the amount of an uplift.

 

          In the case of Wardle  v  Credit Agricole [2011] EWCA Civ 545, Elias LJ reviewed all the authorities and stated:-

 

“18     Before answering this question, it is necessary to consider the principles which should inform a tribunal when exercising its Section 31(3) discretion.

 

 19     I confess that I do not find the sub-section at all easy to apply. In Chagger the Court stated that its purpose was to operate ‘as an incentive to encourage parties to make use of the statutory procedures’.  It is a stick rather than a carrot, and the sanction for failing to comply has a significant punitive element since failure leads to additional compensation irrespective of the adverse effect on the employee.  It is no doubt because the penalty should be commensurate with the offence that the EAT has expressed the view on a number of occasions that the degree of culpability is a highly significant factor when assessing the appropriate uplift.  Culpability will include such considerations as the extent of the breach and whether it is deliberate or inadvertent : see the observations of the EAT President, Underhill J, in Virgin Media  v  Seddington UKEAT/00539/08, Paragraph 20 and Lawless  v  Print Plus UKEAT/0333/09, Paragraph 10.

 

 20     Whilst I do not dissent from that analysis, I think it would be wrong to see the uplift purely in penal terms.  The breach does have adverse consequences for the other party.  In the case of a dismissal, the employee is deprived of the opportunity to persuade the employer, before the axe falls, that the dismissal would be inappropriate or unfair.  Instead he is compelled to go to law to vindicate his position.

 

21      The consequences of the breach for an employee will vary from case to case.  For example, it may be felt particularly harshly where the dismissal is for misconduct, and especially so if there are what turn out to be false allegations of fraud or dishonesty which can then only be successfully challenged in the tribunal, where they necessarily become aired in public.  In my judgment this would render the breach more culpable than would otherwise be the case and would be a potentially important factor justifying an uplift significantly above the 10%.

 

22      I do not think that the ability of the wrongdoer to pay is in itself a relevant factor when considering the degree of culpability.  Having said that, a large company which infringes the procedures will often be more culpable than a small business because it has less excuse for being ignorant of its obligations and the potential consequences of its actions.

 

23      The curiosity about these provisions - both as they affect the employer and employee - is that the sanction is defined by reference to the compensation awarded to the employee which is in turn a function of the employee's loss.  Yet that depends on a whole host of factors some of which are entirely fortuitous and have no bearing on the employer's conduct at all.  For example, if the employee is unfairly dismissed in flagrant and deliberate disregard of the procedures, but he secures equivalent employment immediately following the dismissal, the compensation will be very small and even the maximum uplift will only result in a very modest sum of money.  By contrast, an employer who inadvertently commits a relatively minor breach in circumstances where considerable loss is suffered will have to pay much more even if the uplift is limited to 10%.  The stick strikes more harshly on the wrong dog.  That, however, is what Parliament has enacted, and tribunals must seek to give effect to Parliament's intention, however difficult or arbitrary the consequences may appear to be.

 

24      In my view, some understanding of Parliament's intention can be gleaned by a careful consideration of the structure of the sub-section.  As the EAT has observed (eg in the Lawless case) the tribunal is not charged with fixing a percentage somewhere between 10 and 50% as it deems just and equitable.  Had that been the formulation then I can see that it may well have been appropriate for a tribunal to choose 10% for the least serious breaches and 50% for the most flagrant with the rest falling at the appropriate point within the range.  Rather the tribunal is enjoined to start with 10% and it must then consider whether it is just and equitable to increase that percentage and, if so, by how much.

 

25      As Lady Smith pointed out giving the judgment of the EAT sitting in Scotland in McKindless Group  v  McLaughlin [2008] IRLR 678, Paragraph 13, this requires a tribunal to explain what facts or circumstances surrounding the failure to comply make it just and equitable to go beyond the minimum at all.  This should not be an automatic response whenever the tribunal thinks that the breach is more than minor.  On the contrary, there must be something about the particular circumstances which justifies the conclusion that 10% would be inappropriate and ought to be increased.  The circumstances need not be exceptional, otherwise that word would have been used here as it is in sub-section (4), but in my judgment they must be such as to clearly justify concluding that the starting point of 10% would not adequately reflect the degree of culpability.

 

26      In my opinion an increase to the maximum of 50% should be very rare indeed.  It should be given only in the most egregious of cases.  An example given by Lady Smith in the McKindless case which would at any event get close to the maximum is where there is a clear finding that the employer is determined to dismiss the employee whatever the merits and has deliberately and cynically ignored the procedures in case they get in the way of his being able to do so.  However, the mere fact that the employer has ignored the procedures altogether would not in my view justify an increase to the maximum, although it would often justify some increase beyond 10%.

 

27      Once the tribunal has fixed on the appropriate uplift by focusing on the nature and gravity of the breach, but only then, it should consider how much this involves in money terms.  As I have said, this must not be disproportionate, but there is no simple formula for determining when the amount should be so characterised.  However, the law sets its face against sums which would not command the respect of the general public, and very large payments for purely procedural wrongdoings are at risk of doing just that.  The EAT referred to the case of HM Prison Service  v  Johnson [1997] ICR 275 when Smith J, as she then was, observed, with respect to the level of compensation for injury to feelings, that it was necessary to have regard to ‘the view which members of the public would have to the amount of the award’.  In my judgment, that is a fortiori the case where the award is either unrelated, or at least only partially related, to any specific injury to, or loss suffered by, the employee.

 

28      In considering the sort of sum which would be proportionate and acceptable, it is, in my view, of some relevance to have regard to the sums which the courts are willing to award for injury to feelings and for aggravated damages.  

 

...

 

29      I do not suggest that these are entirely analogous situations, but I think that save in very exceptional cases, most members of the public would view with some concern additional payments following an uplift for purely procedural failings which exceeded the maximum payable for injured feelings.”

 

In a recent case, before the Court of Appeal in Northern Ireland, in the case of Brinks Ireland Ltd  v  Hines [2013] NICA 32, one of the issues which the Court could have been required to consider on appeal was the uplift of 50%, in circumstances where the tribunal had found that the dismissal was unfair; but, in the event, the Court of Appeal remitted the case to the industrial tribunal to further consider the nature of the dismissal and, in light of same, the application (if relevant) of the said uplift provisions.  The industrial tribunal, upon remittal, decided the claimant was expressly, deliberately and unfairly dismissed and affirmed the its earlier decision of a 50% uplift of the compensatory award.  This subsequent decision was not the subject of appeal.  In a decision in the Court of Appeal in the Northern Ireland, in the case of Lewis  v  McWhinney’s Sausages Ltd [2013] NICA 47, the provisions relating to an uplift, pursuant to Article 17(3) of the 2003 Order were also, inter alia, the subject-matter of the proceedings; but in the event, it was again not necessary for the Court of Appeal to make any observations on the said provisions, relating to uplift, when dismissing the appeal. 

 

3.6     In considering the statutory dismissal procedure, to which reference has been made above, in the case of Lewis  v  McWhinney’s Sausages Ltd [2013] NICA 47, in the course of his judgment, Morgan LCJ, delivering the judgment of the Court, referred to the requirements of these provisions, as referred to by the Employment Appeal Tribunal in the case of Alexander  v  Bridgen Enterprises Ltd [2006] ICR 1277, when he stated:-

 

“In Step 1 the employer merely had to set out in writing the grounds which lead him to contemplate dismissing the employee.  Under the second step the basis for the grounds was simply the matters which had led the employer to contemplate dismissing for the stated grounds.  The objective is to ensure that the employee is not taken by surprise and is in a position to deal with the allegations.  The letter of 20^th of May 2010 identified the occasion on which the alleged insubordination occurred and identified verbal abuse as to the nature of the insubordination.  The letter was sent two days after the meeting of which a complaint was made so the appellant was in a good position to contradict any alleged statement or explain anything said by him.  In those circumstances the letter satisfied both of these tests so that no failure to comply with the statutory procedures arose in this case.  The statutory procedures do not require the employer to set out the evidence in respect of the matter as an issue although it can be helpful if the employer chooses to do so.”                                                 (See Paragraph 23 of the judgment)

 

          (See also further Paragraph 4.4 of this decision in relation to the relevance of appeals in any dismissal procedure.)

 

3.7     In particular, in Alexander, the Employment Appeal Tribunal stated that the Step 1 statement should:-

 

“Do no more than state the issue in broad terms ... the employee simply needs to be told that he is at risk of dismissal (or, presumably, other disciplinary action) and why (Paragraph 38).  In conduct cases, the Step 1 statement will need to ‘[identify]’ the nature of the misconduct in issue, such as fighting, insubordination or dishonesty,  In other cases it may require no more than specifying, for example, that it lack of capability or redundancy.”

 

          (See further Cartwright  v  Kings College London [2010] EWCA Civ 146)

 

          In Sahatciu  v  DPP Restaurants Ltd [UKEAT/0177/06] it was held that ‘A widely pedantic reading of the DPP is as unattractive as an overly technical construction of a Step 1 grievance letter under the statutory grievance procedure (the statutory grievance procedure is now repealed in Great Britain and Northern Ireland)’.

 

          In the case of YMCA Training  v  Stewart [2007] IRLR 185, Underhill J, as he then was, referred to the statement as a statement in ‘headline terms’ – Paragraph 9.

 

          Somewhat surprisingly, in the case of Homeserve Emergency Services Ltd  v  Dixon [UKEAT/0127/07], the Employment Appeal Tribunal held that an employer’s letter had complied with Step 1 even where it did not say where that it was contemplating dismissal.  However, this was because, according to the Employment Appeal Tribunal, it was ‘implicit’ from a letter inviting the employee to a ‘formal disciplinary meeting’ for ‘breach of contractual obligations’ that it was contemplating with some disciplinary action.  However, in Zimmer Ltd  v  Brezan [UKEAT/0294/08] the Employment Appeal Tribunal held that a Step 1 letter was defective because it did not specifically inform the employee that he was at risk of dismissal (and, on the facts, that there was no contacts that could save it).  In the case of Draper  v  Mears [2006] IRLR 869, the Employment Appeal Tribunal held that it was sufficient in a case involving dismissal for driving a vehicle after consuming alcohol for the Step 1 letter, to refer only to ‘conduct which fails to reasonably ensure the health and safety of others’.  Indeed, the Employment Appeal Tribunal held that, where there is ambiguity over the content of the Step 1 letter, the tribunal is ‘entitled to look at the whole context’ in order to resolve any such ambiguity.  It may be thought that this is somewhat similar to the relevance of context which was referred to by Elias P in the well-known case of Canary Wharf Management Ltd  v  Edebi [2006] IRLR 416, when considering the then somewhat similar provisions relating to the statutory grievance procedures (now repealed).  The Employment Appeal Tribunal held that looking at the whole matter in context, made it impossible for Mr Draper, who ‘knew full well the allegations against him before the Step 1 letter reached him’, to argue there had been non-compliance with the DDP that rendered his dismissal automatically unfair.  In Draper, the Employment Appeal Tribunal also noted that, while the Step 1 letter and the Step 2 meeting are separate matters, it may often be the case that Step 2 is complied with before Step 1.

 

          In YMCA Training  v  Stewart [2007] IRLR 185, the Employment Appeal Tribunal suggested that tribunals should not ‘be distracted by the fact that the parties have been following an internal procedure with more elaborate requirements and different terminology from those required by the statute : it is necessary to look between the parties own labels and focus on whether the substantial requirements of the statute, which are simple and non-technical terms, were or were not met’.

 

          In Cartwright, the Court of Appeal emphasised a prior oral exchange could not fill a gap in the statutory procedure since the procedure required a statement of the minimum information in writing stating, ‘if the opposite were true, it would mean an employer could send an employee a statement saying no more than ‘Re our discussion yesterday, please come to a meeting tomorrow to discuss it further’ and then proffer it as a sufficient Step 1 statement as proof the discussion had covered the headline information required to be included in such a statement’. The court also made clear the writing and sending of a Step 1 statement was an elementary exercise requiring minimal skill, and any employer familiar with the requirements had only himself to blame if he was unable to create and send the necessary statement.

 

3.8     In relation to the Step 2 meeting, Employment Appeal Tribunal in Alexander considered the nature of the information the employer must give to the employee in order to inform him of the ‘basis’ for the concerns in the Step 1 statement.  In particular, it noted the following:-

 

“(i)      To comply with Step 2, the information does not need to be in writing and can be given orally.                                            [Paragraph 39]

 

 (ii)     The information is ‘an explanation ... as to why the employer is contemplating dismissing that particular employee’.          [Paragraph 41]

 

(iii)     In misconduct cases, the information required involves ‘putting the case against the employee’.  This does not require ‘detailed information’ but ‘sufficient detail ... to enable the employee properly to put forward his side of the story.”                                  [Paragraph 40]

 

As noted above, it may be permissible for a Step 2 requirement to be complied with before a Step 1 requirement; thus the stages of the statutory procedure are not necessarily sequential.  However, failure to comply with the Step 2 requirement cannot be cured at the Step 3 appeal; (see Davies  v  Farnborough College of Technology, Paragraph 19 [2008] IRLR 14).  In Davies, Burton J, in a case relating to dismissal for redundancy, said it was necessary to give sufficient information to allow the employee both to understand and to challenge why it was proposed to dismiss him for redundancy.

 

Again, in view of the absence of any relevant decisions by the Court of Appeal in Northern Ireland, other than the Lewis  v  McWhinney’s Sausages Ltd, referred to above, in relation to the statutory dismissal procedures, the tribunal considered it relevant to consider and follow, as appropriate, the various decisions of the Employment Appeal Tribunal and Court of Appeal in England and Wales, as referred to above when considering the proper interpretation of the said statutory dismissal procedures and, in particular, the three step process referred to in the said procedures.

 

3.9     Following the introduction of the new statutory dismissal procedures, Article 130A(1) and (3), as set out above, provided a dismissal was automatically unfair if the new procedures were not followed. 

 

3.10    Article 130A(2) made further changes in the law in relation to unfair dismissal and, in particular, provided in certain circumstances, the partial reversal of the principles set out in the well-known House of Lords decision in the case of Polkey  v  AE Dayton Services Ltd [1988] ICR 344 (‘Polkey’).  However, Article 130A(2) does not apply in a case where there has been a dismissal in breach of the statutory dismissal procedures, whereby the dismissal is automatically unfair under Article 130A(1).  Article 130A(2) of the 1996 Order therefore is only of application  where the statutory dismissal procedure has been complied with but there has been a breach of procedures, other than statutory dismissal procedures. 

 

4.1     In relation to the alternative claim of ‘ordinary’ unfair dismissal, pursuant to Article 130(1)(a) of the 1996 Order, there was no dispute by the representatives that the burden was on the respondent to establish the reason relied upon by it.  The question of whether it did in fact justify the dismissal requires the tribunal to consider whether the respondent acted reasonably in all the circumstances in treating the reason as sufficient, pursuant to the provisions of Article 130(4) – (6) of the 1996 Order.  (See further Harvey on Industrial Relations and Employment Law, Section D1, Paragraph 8, and Mental Health NHS Trust  v  Sarkar [UKEAT/0479/08], where it is established in relation to the issue of fairness, there is no burden of proof on any party).

 

4.2     In relation to a case where the reason for the dismissal is found to relate to a reason within the terms of Article 130(1) and (2) of the 1996 Order, the tribunal, as set out above, then has to determine whether the dismissal is fair, having regard to the provisions of Article 130(4) – (6) of the 1996 Order, referred to previously. 

 

          Applying the dicta, which originated in the well-known case of British Home Stores Ltd  v  Burchell [1980] ICR 301, and other subsequent cases, which was a conduct case, it is necessary for a tribunal to determine:-

 

“(i)      whether the employer had a genuine belief in the guilt of the employee;

 

                    (ii)      whether it had reached that belief on reasonable grounds;

 

                    (iii)     whether this was following a reasonable investigation; and

 

(iv)     whether the dismissal of the claimant fell within the range of reasonable responses in light of that misconduct.”

 

          As seen above, it has long been established that in relation to the matters set out in Article 130(4) there is a ‘neutral’ burden of proof (see further DSG Retail Ltd  v  Mackey [2013] UKEAT/0054/13 and Singh  v  DHL Services [2013] UKEAT/0462/12]).

 

In Sainsburys Supermarkets Ltd  v  Hitt [2003] IRLR 23, it was made clear the range of reasonable responses test applies as much to the question of whether an investigation into suspected misconduct was reasonable in all the circumstances as it does to other procedural and substantive aspects of the decision to dismiss a person from his employment for a conduct reason.  Mummery LJ also pointed out in Hitt the reasonableness of the employer’s investigation is to be considered by the objective standards of the reasonable employer, having regard to the particular circumstances of the case.

 

In Iceland Frozen Foods Ltd  v  Jones [1983] ICR 17 – Browne-Wilkinson J offered the following guidance:-

 

          “ …

 

(1)      the starting point should always be the words of [Section 57(3)] themselves;

 

(2)      in applying the Section the industrial tribunal must consider the reasonableness of the employer’s conduct, not simply whether they [the members of the industrial tribunal] consider the dismissal to be fair;

 

(3)      in judging the reasonableness of the employer's conduct an industrial tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;

 

(4)      in many (though not all) cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another;

 

(5)      the function of the industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted.  If the dismissal falls within the band the dismissal is fair : if the dismissal falls outside the band it is unfair.”

 

It has long been established in relation to a reasonable investigation the need for an employer to acquaint itself with all relevant facts before taking its decision.  As Viscount Dilhourne said in W Devis & Sons Ltd  v  Atkins [1977] IRLR 314:-

 

“The employer cannot be said to have acted reasonably if he reached his conclusion ‘in consequence of ignoring matters which he ought reasonably to have known and which would have shown that the reason was insufficient’.”

 

          In W Weddel & Company Ltd  v  Tepper [1989] IRLR 96, it was held that:-

 

“ … [employers] do not have regard to equity or the substantial merits of the case if they jump to conclusions which would have been reasonable to postpone in all the circumstances until they had, in the words of the [employment] tribunal in this case ‘gathered further evidence’ or, in the words of Arnold J in the Burchell case, ‘carried out as much investigation into the matter as was reasonable in all the circumstances of the case’.  That means they must act reasonably in all the circumstances, and must make reasonable enquiries appropriate to the circumstances.  If they formed their belief hastily and act hastily upon it, without making the appropriate enquiries or giving the employee a fair opportunity to explain himself, their belief is not based on reasonable grounds and they are certainly not acting reasonably … .”

 

The above dicta was followed and adopted in this jurisdiction by the Court of Appeal in the cases of Dobbin  v  Citybus Ltd [2008] NICA 42 and Rogan  v  South Eastern Health & Social Care Trust [2009] NICA 47 and again, more recently, in the case of Antrim Borough Council  v  McCann [2013] NICA 7 and Gould  v  Regency Carpet Manufacturing Ltd [2013] NICA 26.  In London Ambulance NHS Trust  v  Small [2009] IRLR 563, Mummery LJ re-stated the normal rule that a tribunal is not entitled to substitute its own findings of fact for those of the employer or its investigating or dismissing officer.  In the recent decision of McCann, Girvan LJ, in considering the issue of the band of reasonable responses which a reasonable employer must have adopted, expressly referred to the dicta of Longmore LJ in Bowater  v  Northwest London Hospitals NHS Trust [2011] EWCA Civ 63, when he stated:-

 

“The employer cannot be the final arbiter of its own conduct in dismissing an employee.  It is for the tribunal to make its judgment always bearing in mind that the test is whether dismissal is within the range of reasonable options open to a reasonable employer.”

 

4.3     In a recent decision in the Court of Appeal in Davies  v  Sandwell Metropolitan Borough Council [2013] EWCA Civ 135, when deciding whether the employer acted reasonably in dismissing the employee, held:-

 

“It is not for ET to conduct a primary fact-finding exercise.  It is there to review the employer’s decision.  Still less is the ET there to conduct an investigation into the whole of the employee’s employment history … .” (Paragraph 33 of the judgment)

 

4.4     Procedural defects in the initial disciplinary hearing may be remedied on appeal, provided that in all the circumstances the later stages of the procedure are sufficient to cure any earlier unfairness.  As the Court of Appeal held in Taylor  v  OCS Group Ltd [2006] EWCA Civ 702:-

 

“If an early stage of a disciplinary process is defective and unfair in some way then it does not matter whether or not an internal appeal is technically a re-hearing or review, only whether the disciplinary process as a whole is fair.  After identifying a defect a tribunal will want to examine any subsequent proceedings with particular care.  Their purpose in so doing will be to determine whether, due to the fairness or unfairness of the procedures adopted, the thoroughness or lack of it of the process and the                      open-mindedness (or not) of the decision-maker, the overall process was fair, notwithstanding any deficiencies at an early stage.”

 

          In a recent decision, the Employment Appeal Tribunal, in the case of Holt  v  Res On Cite Ltd [2014] UKEAT/0410 it was emphasised that the tribunal’s role is to consider the fairness of the processes as a whole, and an appeal should not be seen separately but should be seen as part of the entire disciplinary process (see further First Hampshire & Dorset Ltd  v  Parhar [2012] UKEAT/0643]).

 

          In McMaster  v  Antrim BC [2010] NICA 45, Coghlin LJ emphasised:-

 

The fundamental purpose served by an agreed appeal disciplinary procedure is to ensure that both sides have a full and fair opportunity to put their respective cases and secure a just outcome to any dispute, including putting right, where necessary, any errors or shortcomings apparent in the initial hearing.  As a matter of principle it is difficult to accept that the effective operation of an appeal could be simply prevented by an employer either refusing the employee the right to such an appeal procedure or by rejecting an outcome considered to be advise to  his or her interest leaving the frustrated employee with compensation for breach of contract as his or her only remedy.”

 

See further West Midlands Co-Operative Society Ltd  v  Tipton [1986] AC 536)  In London Probation Board  v  Kirkpatrick [2005] ICR 965, approved by Coghlin LJ, HH Judge McMullan QC made clear:-

 

... the whole point of internal appeals is to allow for bad or unfair decisions to be put right.”

 

          The above dicta in relation to the importance of an appeal procedure clearly have relevance to any consideration of issues of uplift if there is a failure to provide an appeal under the statutory dismissal procedure.

 

4.5     In the well-known House of Lords decision in Polkey  v  AE Dayton Services Ltd [1988] ICR 344 it was held that, in essence, an employer who had acted unreasonably and in breach of procedures could not contend that, since the dismissal would have occurred anyway, even if proper procedures had been followed, the dismissal should be found to be a fair dismissal.  Indeed, it is only in limited circumstances that an employer would be able to successfully argue that compliance with fair procedures would be futile. 

 

          However, although the tribunal that might find that dismissal to be unfair, the tribunal, following Polkey, was able to reduce the employee’s compensation by a percentage to represent the chance the employee would have still been dismissed.  A Polkey reduction therefore required an employer to satisfy the tribunal it would have dismissed the employee, even if it had complied with fair procedures. 

 

4.6     Article 130A(2), as set out previously, made a further change to the law of unfair dismissal and resulted, in certain circumstances, in a partial reversal of the principles set out in Polkey, as indicated above.

 

          Article 130A(2) provides that a dismissal, following a failure to follow other procedural steps, will not affect the fairness of the dismissal, provided the employer can show the employee still would have been dismissed, if he had followed the steps correctly.  The Polkey decision was partially reversed and the ‘no difference rule’, which had applied before Polkey, was reinstated for a failure to follow procedures, other than the new statutory dismissal and disciplinary procedures.  The reference to procedures in Article 130A(2) was the subject of some conflicting decisions in the Employment Appeal Tribunal, but the generally accepted view would seem now to be that it applies to any procedure, written or otherwise, which the tribunal considers a reasonable employer might follow (see Kelly-Madden  v  Manor Surgery [2007] IRLR 17).

 

4.7     However, what is clear, from the legal authorities, is that Article 130A(2) is only of assistance to an employer, whenever the DDP has been complied with.  Automatic unfairness cannot be cured by invoking Article 130A(2) (Butt  v  CAFCSS [UKEAT/0362/07]).  As was made clear in the case of Goodin  v  Toshiba [UKEAT/0271/08], there can be a Polkey reduction of up to 100% in an automatic unfair dismissal case, where the breaches of procedure would have made no difference to the dismissal.  If the employer has complied with the DDP (but the dismissal is nevertheless unfair for other reasons), but there is a greater than 50% chance that the employer would have dismissed the employee, pursuant to Article 130A(2), the dismissal will be fair.  Thus, where the relevant DDP has been complied with but the dismissal is procedurally unfair for the ordinary purposes of Article 130(4) of the 1996 Order, any Polkey deduction cannot exceed 50%.

 

4.8     In Software 2000 Ltd  v  Andrews [2007] UKEAT/0533/06, Elias J, as he then was, emphasised that tribunals must consider any reliable evidence, even if speculative, in carrying out the exercise to determine whether or not dismissal would have occurred if a fair procedure had been followed.  Using its common sense experience and sense of justice in the normal case, that would require to assess for how long the employee would have been employed but for the dismissal.  However, it is for the employer who seeks to contend that the employee would or might have ceased to be employed in any event had fair procedures been followed, or alternatively would not have continued in employment indefinitely, to adduce any relevant evidence on which it wishes to rely; but in doing so, the tribunal must have regard to all the evidence from making the assessment, including any evidence from the employee itself.  As Elias J stated in his judgment:-

 

“The mere fact an element of speculation was involved was not a reason for the tribunal refusing to have regard to the evidence.”

 

          In Brinks Ireland Ltd  v  Hines [2013] NICA 32, Girvan LJ followed, with approval, Software 2000 Ltd  v  Andrews and stated:-

 

“ ... If an employer seeks to contend that the employee would or might have ceased to be employed in any event if a fair procedure had been followed or alternatively it would not have continued in employment indefinitely it is for the employer to adduce relevant evidence on which it wishes to rely.  Where the nature of the evidence which the employer adduces or on which it seeks to rely is unreliable, the tribunal may take the view that the whole exercise of seeking to re-construct what might have been is so riddled with uncertainty that no sensible prediction based on the evidence can be made ... .”

 

In a recent decision of the Employment Appeal Tribunal in the case Dev  v  Lloyds Tsb Asset Finance Division Ltd [2014] UKEAT/0281, Langstaff P emphasised the following:-

 

“6.      A tribunal asked to consider a Polkey question must ask not what would have happened, but rather what might have happened.  To ask what would have happened asks for a decision, effectively, on the balance of probability, with a straight yes or no answer.  [tribunal’s emphasis].  The second looks at the matter as one of assessment of chances.  It is well established that the latter is the correct approach ... (see further Ministry of Justice  v  Parry [2013] ICR 311, Hill  v  Governing Body of Great Tey Primary School [2013] ICR 691).”

 

4.9     In the case of Morrison  v  Amalgamated Transport & General Workers Union [1989] IRLR 361, the Northern Ireland Court of Appeal held in relation to the issue of contributory fault:-

 

“(i)      the tribunal must take a broad common sense view of the situation;

 

(ii)     that broad approach should not necessary be confined to a particular moment, not even the moment when the employment is terminated;

 

(iii)    what has to be looked for in such a broad approach over a period is conduct on the part of the employee which is culpable or blameworthy or otherwise unreasonable; and

 

(iv)    the employee’s culpability or unreasonable conduct must have contributed to or played a part in the dismissal.”

 

In Allders International Ltd  v  Parkins [1982] IRLR 68, it was emphasised that it is the employee’s conduct alone, which is relevant to the issue of whether the loss resulting from the dismissal should be reduced on grounds of contributory fault.

 

In a recent decision of the Employment Appeal Tribunal in the case of Steen  v  ASP Packaging Ltd [2013] UKEAT/0023, Langstaff P, confirmed it would be a rare case where there would be a 100% reduction for contributory fault.  He also confirmed it was necessary for the tribunal to focus on what the employee did or failed to do and if any such conduct, as identified by it, which it considers blameworthy, caused or contributed to the dismissal to any extent and, if so, to what extent the award should be reduced and to what extent it is just and equitable to reduce it.  Langstaff P noted that Polkey deductions and deductions for contributory fault are approached on different basis and do not directly overlap:-

 

“That is because the focus in a Polkey decision is predictive, it is not historical, as is the focus when establishing past contributory fault as a matter of fact.  Second, Polkey focuses upon what the employer would do if acting fairly.  Contributory fault is not concerned with the action of the employer but with the past actions of the employee.  A finding in respect of Polkey thus may be of little assistance in augmenting reasons given by a tribunal in respect of contributory deduction.”

 

4.10    Article 156(2) of the 1996 Order, provides in relation to the issues of the amount of a basic award and contribution on the part of the claimant:-

 

“Where the tribunal considers any conduct of the complainant before the dismissal ... 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.”

 

Article 157(6) of the 1996 Order, provides in relation to the issues of the amount of a compensatory award and contribution on the part of the claimant:-

 

“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.”

 

4.11    In the Northern Ireland Court of Appeal, in the case of G McFall & Company Ltd  v  Curran [1981] IRLR 455, which would normally be binding on this tribunal, it was held that the general rule is that both the basic and the compensatory awards should be reduced by the same amounts.  It should be noted, however, that the relevant legislation in Northern Ireland at the time of that decision was differently worded to that now seen in the 1996 Order.  In particular, the provisions relating to both a basic award and a compensatory award were in similar terms to that now seen in Article 157(6) of the 1996 Order and both provisions, at that time, therefore had reference to causation/contribution.

 

          Now Article 156(2) and Article 157(6) of the 1996 Order, as set out previously, are in similar terms of those set out in Sections 122(2) and 123(6) of the Employment Rights Act 1996, which applies in Great Britain.

 

          As has been made clear in a recent decision of Langstaff P in the case of Steen  v  ASP Packaging Ltd [2013] UKEAT/0023/13:-

 

“The two sections are subtly different.  The latter calls for a finding of causation.  Did the action which was mentioned in Section 123(6) cause or contribute to the dismissal to any extent?  That question does not have to be addressed in dealing with any reduction in respect of the basic award.  The only question posed there is whether it is just and equitable to reduce or further reduce the amount of the basic award to any extent.  Both sections involve the consideration of what is just and equitable to do.”

 

He also points out that, in applying the provisions of Section 123(6), if the conduct which it has identified and which it considered blameworthy did not come or contribute to the dismissal to any extent, then there can be no reduction, pursuant to Section 123(6), no matter how blameworthy in other respects the tribunal might consider the conduct to have been.  If it did cause or contribute to the dismissal, then issues arise to be determined in relation to what extent the award should be reduced and to what extend it is just and equitable to reduce it.

 

Langstaff P emphasises that:-

 

“A separate question arises in respect of Section 122(2) (the basic award) where the tribunal has to ask whether it is just and equitable to reduce the amount of the award to any extent.  It is very likely, but not inevitable, that what a tribunal concludes is a just and equitable basis for the reduction of the compensatory award will also have the same or a similar effect in respect of the basic award; but it does not have to do so.”

 

So, in light of the foregoing, although the relevant provisions have been amended since the decision of the Court of Appeal in Northern Ireland, in the case of G McFall & Company Ltd was decided, in most cases the same result will be achieved.

 

5.1     In relation to the issue of compensation, where a claimant has obtained income from a new job, following an unfair dismissal, the Employment Appeal Tribunal, in the case of Whelan  v  Richardson [1988] IRLR 144, summarised the approach to be taken by tribunals; albeit emphasising that tribunals had a discretion to do what was appropriate in individual cases:-

 

“(1)     The assessment of loss must be judged on the basis of the facts as they appear at the date of assessment hearing (‘the assessment date’).

 

 (2)     Where the (claimant) has been unemployed between dismissal and the assessment date then, subject to his duty to mitigate in the operation of the recoupment rules, he will recover his net loss of earnings based on the pre-dismissal rate.  Further, the Employment Appeal Tribunal will consider for how long the loss is likely to continue so as to assess future loss. 

 

 (3)     The same principle applies where the (claimant) has secured permanent alternative employment at a lower level of earnings than he received before his unfair dismissal.  He will be compensated on the basis of full loss until the date in which he obtained the new employment and thereafter for partial loss, being the difference between the pre-dismissal earnings and those in the new employment.  All figures will be based on net earnings. 

 

 (4)     Where the (claimant) takes alternative employment on the basis it will be for a limited duration, he will not be precluded from claiming loss to the assessment date, or the date on which he secures further permanent employment, whichever is the sooner, giving credit for earnings received from the temporary employment.

 

 (5)     As soon as the (claimant) obtains permanent alternative employment paying the same or more than his pre-dismissal earnings his loss attributable to the action taken by the respondent employer ceases.  It cannot be revived if he then loses that employment either through his own action or that of his now employer.  Neither can the respondent employer rely on the employee’s increased earnings to reduce the loss sustained prior to his taking the new employment.  The chain of causation has been broken.”

 

This guidance was described as helpful by the Court of Appeal in Dench  v  Flynn & Partners [1998] IRLR 653, although the Court considered that the obtaining of permanent employment at the same or a greater salary would not in all cases break the chain of causation.  The Dench decision was applied in Cowen  v  Rentokil Initial Facilities Service (UK) Ltd [2008] AER (D) 70.  Further, in a recent decision of the Employment Appeal Tribunal, in the case of Commercial Motors (Wales) Ltd  v  Hawley [2012] UKEAT/0636, the Employment Appeal Tribunal cited with approval the case of Dench and, in particular, the judgment of Beldam LJ, when he stated at Paragraph 19 of his judgment:-

 

“19     ... no doubt in many cases a loss consequence upon unfair dismissal will cease when an applicant gets employment of a permanent nature at a equivalent or higher level of salary or wage than the employee enjoyed when dismissed.  But to regard such an event is always and in all case putting an end to the attribution of the loss to the termination of employment, cannot lead in some cases to an award which is just and equitable.

 

 20     Although causation is primarily a question of fact the principle to be applied in deciding whether the connection between the cause, such as unfair dismissal and its consequences, is sufficient to find a legal claim to a loss of damage, is a question of law.  The question for the tribunal was whether the unfair dismissal, could be regarded as a continuing course of loss when she was consequently dismissed by her new employer with no right of compensation after a month or two in her new employment.  To treat the consequences of unfair dismissal as ceasing automatically when other employment supervenes, is to treat the effective cause that which is simply closest in time.”

 

In Salvesen Logistics Ltd  v  Tate [UKEAT/689/98], the Employment Appeal Tribunal made clear that the chain of causation will not be broken where it is clear from the outset that the employment would be on a temporary basis. 

 

5.2     In relation to the issue of mitigation of loss, there is no dispute that the principle that a claimant is under a duty to take reasonable steps to mitigate his loss is              well-established under common law and that the principles of mitigation of loss apply equally to awards of compensation by a tribunal in relation to awards of compensation for unfair dismissal (see Fyfe  v  Scientific Furnishings Ltd [1989] IRLR 331) and that therefore the employee must take reasonable steps to obtain alternative employment.  In the case of Wilding  v  British Telecommunications PLc [2002] IRLR 524, the Court of Appeal ruled that the following general principles apply in determining whether a dismissed employee, who is refused an offer of employment, has breached the duty to mitigate:-

 

“(a)     The duty of the employee is to act as a reasonable person unaffected by the prospect of compensation from her employer.

 

 (b)     The onus is on the former employer as wrongdoer to show that the employee has failed to mitigate by unreasonably refusing the job offer.

 

 (c)     The test of reasonableness is an objective one based on the totality of the evidence.

 

 (d)     In applying that test, the circumstances in which the offer is made and refused, the attitude of the former employer, the way in which the employer had been treated, in all the surrounding circumstances, including the employee’s state of mind, should be taken into account.

 

 (e)     The tribunal must not be too stringent in expectations of the injured party (that is, the employee).

 

The guidance in set out in the Wilding case has been applied in a number of recent decisions by the Employment Appeal Tribunal; but each relate to their own particular facts (see further Harris  v  Tennis Together Ltd [2009] UKEAT/0358/08, Hibiscus Housing Association Ltd  v  Mackintosh [2009] UKEAT/0534/08, and Beijing Ton Ren Tang (UK) Ltd  v  Wang [2009] UKEAT/0024/09.”

 

The state of the labour market can be relevant in deciding whether an employee has made reasonable efforts to find a new job (see Korn Employment Tribunals Remedies, Paragraphs 13 – 28).  It was held HG Bracey  v  Kes [1973] IRLR 210 that the duty of mitigation does not require the dismissed employee to take the first job that comes along, irrespective of pay and job prospects. 

 

          In the recent decision of Look Ahead Housing and Care Ltd  v  Chetty (2014) UKEAT/0037 Langstaff emphasised, in relation to the burden of proof by the employer:-

 

“But without there being evidence (whether by direct testimony or by inadequate answers given by a claimant in cross-examination) adduced by the employer on which a tribunal can be satisfied, on the balance of probabilities, that the claimant has acted unreasonably in failing to mitigate, a claim of failure to mitigate will simply not succeed”.  (Tribunal’s emphasis)

 

6.1     In light of the facts as found by the tribunal and after applying the legislative provisions and the guidance set out in the legal authorities referred to in the previous paragraphs of this decision, the tribunal reached the following conclusions, as set out in the following sub-paragraphs.  

 

6.2     Having found as a fact that the claimant was dismissed by the respondent at the meeting on 10 April 2014, the tribunal was satisfied that the respondent failed fully and properly to comply with the requirements under Step 1 of the statutory dismissal procedure.  There was nothing sent to the claimant, in writing, before he was dismissed at the meeting on 10 April 2014.  In particular, the respondent failed to set out, in writing, the relevant circumstances which led the respondent to contemplate dismissing the claimant and further failed to send a statement or copy of it to the claimant and the respondent did not invite the claimant to attend a meeting to discuss the matter.  The P45 which was left at the claimant’s home stating that his contract of employment was terminated from 16 January 2014 could never be of any assistance for the respondent, in the absence of any evidence from it, to show compliance with the said Step 1 of the statutory procedure.  Further, the tribunal is not satisfied the respondent complied with the requirements of Step 2 of the statutory procedure.  Such a Step 2 meeting must not take place unless “the employer has informed the employee what the basis was for including in the statement under Step 1 the ground or grounds given in it; and the employee has had a reasonable opportunity to consider its response to that information.  At the meeting on 10 April 2014 no explanation was given for how the P45 came to be issued in error but the claimant was merely told there was no work for him at the time and Redmond O’Hanlon shook his hand and said if there was any work in the future they would contact the claimant and that the claimant would get what he was entitled to.  He was faced with a “fait accompli” and was given no opportunity to respond to and/or challenge this decision and to find out the exact circumstances which had led to his dismissal.  Indeed, the claimant, in evidence, informed the tribunal that before he went to New Zealand, as far as he was aware, the respondent had plenty of work.  If there was a change when he was in New Zealand, he was not given any detail about the alleged lack of work; nor was he given the opportunity to find out why he and not others had been dismissed in the circumstances.  The respondent provided no such evidence to the tribunal about this lack of work.  Further, at the conclusion of the meeting, the respondent did not notify the claimant of his right to appeal against the decision, if he was not satisfied with it.

 

6.3     Given the failures, as set out above, to comply with the requirements under Step 1 and 2 of the statutory procedures, the dismissal of the claimant was automatically unfair, pursuant to Article 130A(1) of the 1996 Order, when he was dismissed, without notice, on 10 April 2014.  Having found the claimant was automatically unfairly dismissed, the tribunal had to consider whether, if the statutory procedures had been complied with, the claimant would have been fairly dismissed and a Polkey reduction should therefore be made.  In the absence of any evidence from the respondent and given the respondent has denied dismissal, the respondent has suggested the P45 was sent in error and it was a misunderstanding, all of which the tribunal does not accept, the tribunal decided, in the circumstances, it could not determine the breach of procedures would have made no difference to the dismissal and, as a consequence, decided there should not be any Polkey reduction in relation to any award of compensation to the claimant.    

 

6.4     If it had been necessary to do so, the tribunal, in the alternative, would also have found the claimant to have been unfairly dismissed (‘ordinary’ unfair dismissal), pursuant to Article 130 of the 1996 Order.  Firstly, the respondent has denied there was a dismissal, which the tribunal does not accept.  The respondent, in any event, has not established, in the circumstances, the reason for the claimant’s dismissal.  Further, if it had been necessary for the tribunal to consider the fairness of any such dismissal, the tribunal would have relied, in particular on the failures outlined in the previous sub-paragraphs in relation to the failures of compliance with the statutory procedures by the respondent, which would have had similar application in relation to the finding of ordinary unfair dismissal.  In the circumstances, given the finding of automatic unfair dismissal, it was not necessary for the tribunal to set out its findings on a claim of ordinary unfair dismissal in any greater detail, for the purposes of this decision (see Metro Bus  v  Cooke) UK EAT/0490/06).

 

6.5     Given the failure by the respondent to comply with Step 1 and Step 2 of the Statutory Dismissal Procedure, which applied to the claimant’s claim of unfair dismissal, and the non-completion of the statutory procedure was wholly or mainly attributable to the failure of the respondent to comply with the requirements of the said procedure, it was necessary for the tribunal to consider the relevant uplift, if any, to be made to the compensatory award made to the claimant, pursuant to Article 17 of the 2003 Order.  As stated previously, the tribunal has a wide discretion.  It was not satisfied there were any exceptional circumstances established by the respondent, who did not give evidence to the tribunal or appear at the hearing of this matter, to show that it would be unjust or inequitable to make an uplift to the said award.  In essence, there was a complete failure to follow Step 1 and Step 2 of the procedures.  The statutory dismissal procedure has been in existence for some considerable period of time and there therefore can be no excuse for an employer not complying with them.  In any event, the statutory procedures merely provide the minimum requirements for any statutory dismissal procedure.  The respondent clearly, within a short period of the meeting on 10 April 2014, had instructed legal representatives, who had then engaged in “without prejudice” correspondence with the claimant’s representatives in the period immediately following the meeting of 10 April 2014.  However, there was no acceptance by the respondent that there had been a dismissal of the claimant at the meeting, and/or there had been a failure to follow Step 1 and Step 2 of the statutory procedure; rather, the letter, dated 16 April 2014, was an attempt, by suggesting it was a misunderstanding, to avoid the consequences of what had taken place at the meeting on 10 April 2014, namely a dismissal in breach of the procedures, and to put a gloss on what had actually taken place.  If the dismissal and breach of the procedures had been promptly acknowledged, this would have been a relevant factor in the tribunal’s consideration of what uplift, if any, should be made to the compensatory award, following the tribunal’s finding of automatic unfair dismissal.  In the circumstances, and given the complete failure of the respondent to comply with Step 1 and Step 2 of the Statutory Dismissal Procedure, the tribunal concluded that an uplift of 50% was appropriate in the circumstances for such a serious failure by the respondent, taking into account, in particular, the culpability of the respondent.

 

6.6     The tribunal was satisfied the claimant had made reasonable efforts to obtain other employment, following his dismissal.  Indeed, he had not wasted any time and had agreed before 24 April 2014 to commence employment as a site manager with Kelly Brothers on 28 April 2014, albeit at a reduced rate.  In this context it has to be remembered that it was for the respondent to show that the claimant had acted unreasonably in failing to mitigate his loss (see further Wilding  v  British Telecommunications PLc [2002] EWCA Civ 349).  Indeed, it also has to be remembered that the respondent did not appear and did not produce any evidence to the tribunal on this issue (see Look Ahead Housing & Care Limited  v  Chetty & Another (2014) UK EAT/0037).  No evidence was produced by the respondent to explain why the letter dated 16 April 2014 was not received by the claimant from the respondent in the post, the address on the letter was inadequately stated.  Further, there was no evidence why the letter was not received in the post by the claimant’s representative, albeit it had been cc’d to them, and was only received by them by way of e-mail on 24 April 2014.  They immediately told the claimant, but by this time the claimant had already agreed to commence work with Kelly Brothers.  The tribunal was impressed by the claimant, who was clearly hurt and disappointed that he had returned from New Zealand following an agreed trip and unpaid leave, to find himself, without warning or any explanation, dismissed.  He clearly had had a good relationship with the Managing Directors and owners of the respondent, Mr Redmond O’Hanlon and Mr Sean Farrell (Senior), and he clearly found it difficult, even now, to reconcile what happened to him and his previous good relationship with them.  Trust between them was seriously damaged.  The claimant clearly was not a man to break his word’ and, given all that had happened, the tribunal could not fault him, in the circumstances, for taking up his employment with Kelly Brothers, albeit at a reduced rate. 

 

6.7     The claimant was dismissed summarily without notice.  In light of the tribunal’s finding that the claimant was unfairly dismissed, the claimant is entitled to notice pay of eight weeks, pursuant to the terms of his contract, which was not paid to him (see further Article 118 of the 1996 Order which requires minimum notice of not less than one week’s notice for each year of continuous employment, if the period of continuous employment is two years or more but less than twelve years.

 

6.8     In relation to the issue of contributory fault by the claimant, the tribunal had to consider the actions of the claimant alone (see further paragraph 4.10 of this decision).  The tribunal, on the facts as found by it, and in the absence of any relevant evidence by the respondent, is satisfied the claimant had not contributed to his dismissal.

 

7.1     The tribunal therefore makes the following assessment of the sums to be awarded to the claimant by the respondent, as set out in the following sub-paragraphs.

 

7.2     Compensation for unfair dismissal –

 

                    (A)      Basic Award

 

                              12 x £470.00 (subject to statutory cap)                       £ 5,640.00

 

                    (B)      Compensatory Award

 

                              (i)       Notice pay – 8 weeks from

11 April 2014 - 6 June 2014

8 x £569.48                                                     £ 4,555.84

 

                              (ii)      Loss of earnings from

                                        6 June 2014 to 5 December 2014

26 x £569.48                                                   £14,806.48

                                                                                                              £19,362.32

                                        less

                                        Earnings from Kelly Brothers for

                                        28 April 2014 to 5 December 2014

                                        32 x £410.09 per week                                    £13,122.88

                                                                                                              £  6,239.44

                   

                              (iii)      Loss of future earnings for

5 December 2014 to 1 May 2015

£190.94 per week (taking account of

earnings with Kelly Brothers)

21 x £190.94                                                   £4,009.74

 

(iv)      loss of statutory rights                                      £    450.00

 

                                                                                                              £10,699.18

 

                                        50% uplift                                                        £ 5,349.59

 

                                                                                                              £16,048.77

 

                    Total Monetary Award (A) + (B)                                         £21,688.77

 

8.1     This is a relevant decision for the purposes of the Industrial Tribunals (Interest)   Order (Northern Ireland) 1990.

 

8.2     The Employment Protection (Recoupment of Jobseekers’ Allowance and Income Support) Regulations (Northern Ireland) 1996, as amended, do not apply to this decision, as the tribunal is satisfied, on the evidence, the claimant did not receive any statutory benefits relevant to the said Regulations.

 

 

 

 

 

 

 

Employment Judge

 

 

Date and place of hearing:  5 December 2014, Belfast

 

 

Date decision recorded in register and issued to parties: