APPEARANCES
| For the Appellants |
MR P GREGORY
(of Counsel)
Legal Administration Service
Walsall Metropolitan Borough Council
The Civic Centre
Darwall Street
Walsall
WS1 1TP |
| For the Respondent |
MR J SMITH
(Solicitor)
Higgs & Sons
Solicitors
31 Wolverhampton Street
Dudley
West Midlands
DY1 1EY |
JUDGE PETER CLARK: This is an appeal by the employer, Walsall Metropolitan Borough Council ["the Council"] against a decision of the Birmingham Employment Tribunal sitting on 2nd-4th September 19998, upholding the applicant, Mr Heath's complaint of unfair dismissal. That decision, with extended reason ["the liability decision"] was promulgated on 7th October 1998.
Preliminary
- By a letter dated 25th June 1999 the applicant's solicitors made application for leave to amend the Answer. That application was put over to the hearing of the appeal. It was opposed by Mr Gregory on behalf of the Council.
- The nature of the proposed amendment was to raise an argument that the Council was estopped from pursuing its appeal against the liability decision on the grounds that it had compromised the applicant's claim in the following circumstances.
- On 15th January 1999, whilst the current appeal was in train, the original Employment Tribunal reconvened for a remedies hearing. By a decision promulgated on 27th January 1999 the tribunal recorded the following:
"The parties having agreed terms of settlement between them, this application is adjourned to enable that agreement to be carried into effect. If the applicant has not requested in writing to dismiss this application on or before 1 March 1999, by consent, this application will be treated as having been withdrawn by the applicant and it will be dismissed."
- No written terms of settlement were agreed between the parties on that day. The applicant appeared in person; the Council was represented by its solicitor, Mrs Horrocks.
- Following the hearing Mrs Horrocks wrote to the applicant on 1st February 1999 in these terms:
"I write further to decision of the Employment Tribunal held on 15th January 1999 and the terms of settlement agreed between us.
The basis of the settlement agreed was as follows:-
Basic Award £ 1,260.00
Compensation £11,300.00
Less amount of benefit you receive being £ 1,372.00
Total £11,088.00
I would be grateful if you would confirm that this was the agreed basis of settlement."
- It is common ground that that letter contains a mathematical error in addition. The total ought to read £11,188.00.
- Mr Heath replied by letter dated 3rd February, pointing out that error in addition, and further:
"Further to this I clarify my understanding of the arrangements regarding the recoupment of the benefits paid to me by the state. According to the Tribunal recoupment is to be made by me, and as per my agreement with Mrs Horrocks I would be paid to £12,560.00 and make the appropriate return of benefits.
However if you wish to confirm in writing, your agreement to paying the recoupment sum to the state and the amended total as shown above to me I will agree to such arrangements.
I would be grateful if you could confirm my correction of the sum involved and your decision regarding the recoupment."
- There was no reply to that letter from the Council and on 22nd March Mr Heath wrote to the tribunal, pointing out that he had not received settlement of compensation; asking what recourse he had and recording the fact that he was not withdrawing his application.
- In these circumstances we have concluded that the estoppel argument sought to be advanced by way of the amendment is bound to fail for the following reasons:
(1) There is no written evidence that a concluded agreement was in fact reached by the parties. The exchange of correspondence between the parties does not demonstrate a meeting of the minds. In particular, the Council believed that the claim was settled on payment of £11,188. The applicant believed that he was to receive the sum of £12,560, of which £1,372 was to be paid to the Department in respect of benefit received by him.
(2) If there was an agreement, enforceable at the applicant's suit, it followed that that would dispose of the application, which would then stand dismissed under the tribunal's order. His letter to the tribunal of 22nd March was inconsistent with that state of affairs; alternatively, by preserving his application he had reneged on the agreement.
(3) In these circumstances there remained an extant application on which the tribunal had reached a decision, the liability decision. Accordingly the appeal also remained live.
(4) Although not expressly stated in the Council's letter of 1st February, the disposal of the remedies issue remained subject to the pending appeal. There is no indication that the Council had withdrawn its appeal as part of an overall settlement between the parties.
(5) The case of Dathani v Trio Supermarkets [1998[ ICR 872, to which we were referred by Mr Smith, does not, in our view, assist on the facts of this case.
- In these circumstances we refused this late application for leave to amend and proceeded to hear the Council's appeal against the liability decision.
The Facts
- The applicant was employed as General Manager of the Council's catering service DSO (Direct Service Organisation). That employment commenced on 11th October 1993 and ended with his dismissal on 17th January 1997.
- As General Manager it was his responsibility to put together a tender bid in 1996 for the catering service by DSO under the Government's then compulsory tendering procedure. The closing date for the tender was 2nd August.
- Work started on the tender document in March. Although a tender was submitted within time, Counsel advised that it was not a valid tender and ought to be withdrawn. It was withdrawn. Fortunately, no other contractor entered a bid and the DSO continued with the service for another year. Thereafter, following the applicant's dismissal, a change in the law removed the requirement for compulsory tendering.
- Following failure to submit a valid tender the applicant was suspended. Disciplinary proceedings followed. He faced five charges. A disciplinary hearing took place over five days before Mr Porter-Williams, Corporate Board Director for Resources. He found three of the charges proven; that the applicant failed to take responsibility for the bid, secondly that he failed to complete the tender documents in accordance with the deadline and thirdly that he had behaved aggressively towards staff. On these grounds Mr Porter-Williams summarily dismissed the applicant. An appeal against that decision was rejected.
The Employment Tribunal decision
- On his complaint of unfair dismissal the tribunal had before them the full notes of both the disciplinary and appeal hearings and heard evidence over three days. Their conclusions may be summarised in this way:
(1) On the evidence before Mr Porter-Williams the allegation of bullying staff was not made out (paragraph 10).
(2) Mr Porter-Williams was entitled to conclude that the applicant had been blameworthy and lacked capability in running the tendering exercise; he failed to get a valid tender in on time which was a serious matter to the Council (paragraph 9). Thus a potentially fair reason for dismissal was made out.
(3) The applicant had a fair hearing of his case. There was no procedural deficiency in the disciplinary process (paragraph 9).
(4) The sanction of dismissal fell outside the range of reasonable responses. Mr Porter-Williams had not taken into account the applicant's good record with the Council prior to this matter; further, the tribunal concluded that the applicant was not adequately supported by his line management, particularly Mr Christie. It was inconceivable that the same thing would happen again since Mr Christie would keep a grip on proceedings from the beginning (paragraphs 11, 12).
In these circumstances the tribunal held that no reasonable authority would have dismissed the applicant, despite the gravity of his failing.
The question of remedies was adjourned.
The Appeal
- Mr Gregory does not challenge the tribunal's finding in paragraph 10 in relation to the charge of bullying; the misconduct charge. He nevertheless submits that the tribunal fell into error in concluding that no reasonable employer would have imposed the sanction of dismissal in relation to the capability charges which the tribunal found Mr Porter-Williams had properly concluded were made out. He puts his case in three ways.
- First, it is said that there is an inconsistency between the tribunal's findings at paragraph 9 and 11 of their reasons. Having found that Mr Porter-Williams reached a proper conclusion on the serious charges of lack of capability, the tribunal could not then go on to find that no reasonable authority would dismiss for that reason.
- We reject that submission. It seems to us that in paragraph 9 the tribunal found that the Council had a potentially fair reason for dismissal; it does not follow that having so found the tribunal was bound to conclude that the sanction imposed in respect of that reason was itself reasonable in all the circumstances.
- However, Mr Gregory goes on to make a more powerful submission, in our view, in relation to the factors which the tribunal took into account in reaching the conclusion that the sanction of dismissal fell outside the range of reasonable responses open to the Council. In order to fully appreciate this submission it is necessary to paint in some of the background to the disciplinary process which led to the dismissal.
- A number of witnesses called by the management side gave evidence before Mr Porter-Williams and were cross-examined by Mr Heath. One of those witnesses was Mr Christie, Corporate Board Director for Contracts. A full transcript of the evidence given by those witnesses was prepared. It was before the tribunal, which took its contents into account.
- It is apparent from reading the evidence given by Mr Christie to Mr Porter-Williams at the disciplinary hearing that it was not suggested to him by Mr Heath that he, Mr Christie, bore responsibility for the state of the tender bid. Further, Mr Heath did not choose to give evidence himself at the disciplinary hearing.
- Against that background we turn next to Mr Porter-Williams reasoned decision following the disciplinary hearing. As to the charge against the applicant of failing to take responsibility for the tendering process, Mr Porter-Williams referred to the evidence which he had heard from staff members about the applicant's lack of leadership, decision making, unwillingness to seek specialist advice, inaccessibility and an overall lack of confidence by the tender team in the applicant's ability to manage the bid process. Pausing there, that was the evidence before Mr Porter-Williams, it was not contradicted by evidence from the applicant. Those staff members were not called before the tribunal since, as Mr Gregory correctly points out, the tribunal's task is not to evaluate such evidence as a fact-finding body, its task is to judge the reasonableness of the disciplining manager, Mr Porter-Williams decision to dismiss.
- Mr Porter-Williams went on to deal with the applicant's submissions. He had asserted that Mr Christie was the one at fault in that his position as Corporate Board Director ultimately makes him responsible. He then said that the failure to prepare the tender could not be a disciplinary offence as in fact the tender was prepared and produced on time. Finally he went on to say that "How I do it is up to me as long as the job is completed."
- Mr Porter-Williams considered those statements to be inconsistent. He found:
(1) That responsibility for preparation of tender bids to undertake catering contracts was the applicant's, as per paragraph 3 of his job description. It follows that Mr Porter-Williams rejected the applicant's submission, unsupported by evidence, that the responsibility lay with Mr Christie.
(2) That since the tender bid was so unsatisfactory that it had to be withdrawn, it could not be said that it was prepared and completed on time.
(3) The Council in concerned about how managers manage and perform their day to day management tasks.
He concluded, in the absence of disputed witness testimony, that the applicant's actions during the process of the tender were inappropriate to the level of responsibility expected of a senior manager holding the applicant's post. We observe that he was paid just over £34,000 per annum.
- It was that conclusion, together with Mr Porter-Williams finding that the applicant had failed to complete appropriately the tender documents, which the tribunal found were conclusions reached quite properly and with which the tribunal would have no basis for quarrelling in any way.
- We turn next to the evidence before the tribunal. This time the applicant chose to give evidence. That evidence, summarised by the tribunal at paragraph 7 of their reasons, was to the following effect. Virtually all the tender documents were ready for submission by the end of July. He was then summoned to a management board meeting. At that meeting Mr Christie put forward three alternative costings. Apparently all three were rejected and the management board prescribed a different price for meals. The applicant said this caused his work on the financial elements of the tender document to be thrown into disarray. He told the board that this could well prevent a valid tender being submitted but the board stuck to its decision, causing a state of panic over the next couple of days as a tender document was scrambled together. It was submitted on time but withdrawn due to errors and omissions in the document.
- Finally we go to the tribunal's reasoning at paragraph 11 of their reasons. They found that dismissal fell outside the range of reasonable responses for essentially two reasons:
(1) Mr Porter-Williams gave insufficient consideration to the applicant's achievements in post; he had eliminated a £400,000 deficit since joining as General Manager in 1993. Further, the applicant had no prior disciplinary record.
(2) The tribunal took the view that it was virtually inconceivable that the same thing could happen again, as Mr Porter-Williams feared, because Mr Christie would not make the same mistake as he did previously and would keep a grip on proceedings from the beginning. In this connection we observe that at paragraph 6 of their reasons the tribunal say this:
"The thought occurred to the Tribunal that Mr Christy's [sic] long experience and expertise in these matters would have been useful perhaps at an earlier stage and had he taken a grip of the proceedings and initiated an action plan the problem would not have arisen."
Added to that is the tribunal's observation at paragraph 12 of their reasons that:
"… the applicant was we feel [not] adequately supported by his line management and that perhaps some of the responsibility for failure to get a valid tender in the time rested with the management board's decision on policy at the last minute."
- Mr Gregory submits that the tribunal fell into error in that instead of judging the fairness of Mr Porter-Williams' decision to dismiss the applicant on grounds of incapability, based on the material before him following an exhaustive investigation, they substituted their own view for that of management based on what they had heard in evidence, particularly from the applicant who did not give evidence before Mr Porter-Williams. Iceland Frozen Foods Ltd v Jones [1983] ICR 17.
- In our judgment that submission is made out. It is apparent to us, from the sequence which we have set out, that the tribunal lost sight of the circumstances as they appeared to Mr Porter-Williams at the disciplinary hearing stage and judged the reasonableness of the decision to dismiss for incapability on their own view of the applicant's culpability based on the evidence which he gave, for the first time, to the tribunal. In particular, the question was not whether the tribunal thought that Mr Christie ought to have involved himself at an earlier stage (something which was not suggested to him by Mr Heath when questioning him before Mr Porter-Williams), but whether having properly concluded, as the tribunal found at paragraph 9 of their reasons, that the applicant alone was responsible for the tendering process, that, together with Mr Porter-Williams' further finding that the applicant had failed to complete the tender document, was a sufficient reason for dismissal, bearing in mind the applicant's history of employment.
- It is this failure to ask itself the correct question which in our judgment led the tribunal into error.
- Mr Gregory's final submission is that the tribunal's decision that the dismissal was unfair was perverse, in the sense that no Employment Tribunal, properly directing itself in law could reach such a conclusion. It was an impermissible option on the facts.
- We are not persuaded that the substantial hurdle of establishing perversity is here made out. It is a matter for the tribunal, properly directing itself to make a judgment, having heard and read all the evidence, whether dismissal fell within or outside the range of reasonable responses. We cannot say on the facts of this case, that a finding of unfair dismissal would be so impermissible as to amount to an error of law.
- In these circumstances we are left in the unsatisfactory position that due to the misdirection of law to which we have referred this decision cannot stand; on the other hand it is not so plainly and unarguably wrong that we can ourselves substitute a finding of fair dismissal. Accordingly we shall allow the appeal and direct that the case be reheard by a fresh Employment Tribunal.
