EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Eassie Lord Mackay of Drumadoon Lord Emslie	[2011] CSIH 68 A902/08 OPINION OF THE COURT delivered by LORD EMSLIE in causa by JOHN DUFFY McCORMACK Pursuer & Respondent; against HAMILTON ACADEMICAL FOOTBALL CLUB LIMITED Defenders & Reclaimers: _______

Act: Davies; Wilson Terris & Co

Alt: Upton; Blacklocks

15 November 2011

The Issue for Determination

[1] On Monday 1 September 2008, the pursuer was summarily dismissed from his position as assistant manager of Hamilton Academical Football Club. In this action he alleges wrongful dismissal and claims damages from the defenders in that connection. According to him, the defenders initially contracted to employ him for a two-year period with effect from 30 June 2008, and as a result of their breach of contract in dismissing him barely two months later he lost significant amounts of salary and bonuses. It is now a matter of agreement that any award of damages should be in the sum of £31,251.44.

[2] The defenders, by contrast, maintain that the pursuer was engaged as assistant manager for one season only and, more importantly, that they were fully justified in dismissing him for gross misconduct. In particular they point to (1) unacceptable conduct and foul language at an under-19 tournament in Oban in July 2008; (2) dressing-room incidents, again at Oban in July, involving offensive and embarrassing conduct and remarks towards a young female physiotherapist; (3) disruptive behaviour, in the nature of a prank, while an invited dietician and nutritionist was giving a talk on 17 August; (4) alleged bullying of certain young players in training; and finally (5) "the last straw", in the form of a drunken and abusive tirade over the telephone towards a new foreign signing on 31 August.

[3] After proof the Lord Ordinary held that all bar the fourth of these complaints against the pursuer had been made out, but that in the whole circumstances (as discussed at paras 79-91 of his opinion) they did not, individually or in combination, entitle the defenders to the remedy of summary dismissal on 1 September. The pursuer's dismissal had to be seen in context. Having received informal warnings from the club chairman as to his future conduct following the Oban incidents, the pursuer had apologised all round and conduct of that character was never repeated. Heated arguments with the manager and others after the nutritionist's talk in mid-August apparently led to an elevation of the pursuer's status within the club rather than any disciplinary response. Between the Oban tournament and the date of dismissal no-one expressed concerns to the pursuer about his coaching style with young players, nor was any relevant complaint recorded. There appeared to be no problem regarding the discharge of the pursuer's primary responsibilities as a first team coach. His conduct was at no time the subject of any internal inquiry or discussion at board level. No written or formal verbal conduct warning was ever issued. And the Lord Ordinary's impression was that the most recent difficulty with the young foreign player did not figure largely in the reasons given at the dismissal meeting. Taking all these factors into account, the Lord Ordinary's conclusion was in inter alia the following terms:

"[92] The obligation of confidence and trust is a mutual one. In my view, Hamilton itself was under a duty to keep the employee fully informed of any perceived deficiencies in his or her (sic) conduct during the course of a contract of employment. That did not occur here.

[93] In my view all the incidents, taken together, did not justify summary dismissal. Mr McCormack's conduct did not in my view justify that step being taken. It was not such as to demonstrate that he was repudiating the contract. Accordingly, I hold that he was wrongfully dismissed."

[4] The short question arising in this reclaiming motion is whether, as the defenders and reclaimers maintain, the Lord Ordinary erred in upholding the pursuer's claim of wrongful dismissal. "No reasonable judge", it is said, "... could have concluded that by the date of the dismissal the continuance of the pursuer's contract of employment was possible", or that the central obligations of mutual trust and confidence between employer and employee still remained intact. On a proper assessment of the evidence, the pursuer was lawfully dismissed for gross misconduct and the defenders should have been assoilzied. The defenders' complaint is thus not of any error of law as such, but of a seriously flawed assessment of the evidence leading to an untenable conclusion.

[5] In that regard, counsel for the defenders sought to persuade us that the various incidents leading to dismissal should properly be seen as a consistent course of misconduct, the common theme being the pursuer's repeated failure "... to behave himself in the civil and professional manner which behoved his senior position with the club". Furthermore, the Lord Ordinary had accepted evidence showing that, by mid-August, the pursuer was well aware that he "... had to mind his Ps and Qs and keep his head down for three months in order to get a contract with the club". This referred back to one of his meetings with the club chairman following the Oban incidents, during which the chairman had declined to issue the pursuer with a written contract. There was also the important consideration that the affairs of a football club were very much in the public eye, and that misconduct by senior officials could do serious damage to the club's reputation and standing in the community. Taking these factors together, it was said, any reasonable Lord Ordinary would have held the pursuer to have been lawfully dismissed. Where the Lord Ordinary had erred was in (a) according inadequate weight to these critical factors, and at the same time (b) giving excessive weight to factors which, in comparison, were either irrelevant or of low materiality. A lack of disciplinary records, for example, was of little significance where the pursuer was plainly aware that his position was precarious, and the same applied to any failure to keep him informed as to perceived deficiencies in his conduct. By reference to the helpful summary in Macphail, Sheriff Court Practice, 3^rd ed., at para 18.104, counsel acknowledged that there was only limited scope for an appellate court to interfere with decisions of fact and degree reached by a judge after hearing evidence. In this case, however, it could be said with confidence that the Lord Ordinary had gone plainly wrong, and that his decision could not stand.

[6] In supporting the Lord Ordinary's reasoning and conclusions, counsel for the pursuer emphasised the limited scope for appellate review in cases of this kind. Reference was made in that context to several well-known cases, notably Thomas v Thomas 1947 SC (HL) 45 and Biogen Inc v Medeva PLC [1997] RPC 1. Against that background, the Lord Ordinary was well entitled to decide the case as he did. He had not misdirected himself in law, nor had he taken account of irrelevant matters or left material considerations out of account, and the relative weight to be accorded to the various competing factors was entirely a matter for his judgment. However serious the pursuer's initial misconduct in Oban may have been, it was clear that the defenders had not treated that as meriting dismissal at the time. On the contrary, the contract of employment had thereafter been allowed to run on for many weeks. Importantly, the incidents in August were much less serious, and at the same time different in character from what had gone before. Even the defenders acknowledged that none of these incidents would, if taken in isolation, have warranted summary dismissal. In the whole circumstances, that exceptional remedy was simply not available to the defenders on 1 September, and there was no legitimate basis on which the Lord Ordinary's conclusion to that effect could be impugned.

Discussion

[7] The general law regarding summary dismissal is not in doubt. As recorded by the Lord Ordinary at paras 71-74 of his opinion, that remedy is warranted only where an employee's conduct amounts to "... a repudiation of the fundamental terms of the contract" and "... makes the continuance of the contract of service impossible": Pepper v Webb [1969] 1 WLR 514, per Harman LJ at 517; Wilson v Racher [1974] ICR 428, per Edmund Davies LJ at 432. There is no fixed rule as to the degree of misconduct required to undermine the mutual trust and confidence on which the whole contract of employment hinges, and this accordingly raises a classic "jury question" in the particular circumstances of a given case: Clouston & Co Ltd v Corry [1906] AC 122; cf Malik v BCCI [1998] AC 20.

[8] On the authorities, however, summary dismissal has to be regarded as an exceptional remedy calling for substantial justification. It will not readily be sustained for misconduct which only peripherally affects the performance of core duties under the relevant employment contract. To bring summary dismissal into play, repudiatory conduct must be so serious as to strike at the foundation of the employer/employee relationship, and for practical purposes to make its continuance impossible. It is, furthermore, a remedy which must normally be exercised as soon as a sufficiently serious episode or course of misconduct comes to the employer's attention. Delay and inaction at that point carry with them an obvious risk that the employer will be held to have passed from his option to accept the repudiation and, conditionally or otherwise, to have affirmed the contract instead. Alternatively, the passage of time without effective action may serve to negate any genuine causal link between misconduct and dismissal. Either way, in our view, summary dismissal having the appearance of an afterthought will stand little chance of being upheld.

[9] There is also no dispute as to the extent to which an appellate court is legitimately entitled to review decisions of fact which have been reached by a judge after hearing evidence. The advantage of seeing and hearing witnesses should not be underestimated, and an appellate court should in general respect conclusions of fact and degree unless it is clear that in some way the judge has gone plainly wrong. In Thomas v Thomas, after referring to "... all the incidental elements so difficult to describe which make up the atmosphere of an actual trial", Lord Macmillan (at p.59) said:

"This assistance the trial Judge possessed in reaching his conclusion, but it is not available to the appellate Court. So far as the case stands on paper it not infrequently happens that a decision either way may seem equally open. When this is so, ..., then the decision of the trial Judge, who has enjoyed the advantages not available to the appellate Court, becomes of paramount importance and ought not to be disturbed. This is not an abrogation of the powers of a Court of appeal on question of fact. The judgment of the trial Judge on the facts may be demonstrated ... to be affected by material inconsistencies and inaccuracies, or he may be shown to have failed to appreciate the weight or bearing of circumstances admitted or proved, or otherwise to have gone plainly wrong."

Along similar lines, in the Biogen case, Lord Hoffman (at p.45) affirmed the need for appellate restraint in relation to all judgments of degree having a factual basis. As he put it:

"Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge's evaluation".

[10] With these important considerations in mind, we are not persuaded that the Lord Ordinary's conclusions on the "jury question" before him should be disturbed. On one view, and at best for the defenders and reclaimers, this is a classic situation of the type considered in Thomas, Biogen and similar cases. There was evidence which, in the Lord Ordinary's view, clearly established a number of separate and individually different acts of misconduct on the pursuer's part. The relative seriousness of these intermittent episodes was a matter for the Lord Ordinary to assess and weigh up in the whole circumstances of the case. At the same time, it was for him to weigh up and assess the manner and timing of the summary dismissal complained of, and in that context to draw any relevant inferences from the way in which the defenders themselves had behaved over the preceding weeks. Having carried out these exercises the Lord Ordinary concluded that, as at 1 September 2008, the defenders had no legitimate basis for taking the precipitate and exceptional course of summary dismissal. Even if our own impression, as an appellate court, had been that the decision could have gone either way, we would not have felt it appropriate to interfere with the judgment of a Lord Ordinary who had had the benefit of seeing and hearing all of the witnesses. At the very least, in our view, it was open to the Lord Ordinary to decide the case as he did.

[11] On reviewing all the circumstances of this case, however, our inclination is to go further in supporting the Lord Ordinary's judgment. We can well understand and sympathise with the reasoning which led him to sustain the pursuer's claim of wrongful dismissal, not least his view that the August incidents, and especially the final telephone call branded by the defenders as "... the last straw", were not of such a serious nature as to amount to repudiation of the employment contract. On the evidence the pursuer had apparently shown great kindness towards the foreign player in question, and even though the call clearly caught him at a bad moment on a Sunday evening we are unable to accept that this entitled the defenders to treat the whole employment relationship as being at an end.

Disposal

[12] For all of these reasons, we shall refuse this reclaiming motion and affirm the interlocutors of the Lord Ordinary dated 1 September and 22 December, both 2010.