APPEARANCES
| For the Appellant |
MR D L REES
(Legal Officer)
First Assist Group Ltd
Jasmine House
Kingston Stert
Chinnor
Oxon
OX39 4NL |
| For the Respondent |
MISS S COWEN
(of Counsel)
Instructed by:
Messrs HLW Commercial Lawyers LLP
Commercial House
Commercial Street
Sheffield
S1 2AT |
SUMMARY
Statutory Discipline and Grievance Procedures
Whether the Claimant was automatically unfairly dismissed under section 98A ERA because the Respondents failed to comply with the general requirement not to delay unreasonably in notifying her of the decision to dismiss her for gross misconduct. Cross appeal allowed.
Unfair dismissal
Failure to state and apply correctly the "Burchell" test, and to comply with the "Meek" requirement in relation to the factual findings and reasoning. Appeal allowed.
THE HONOURABLE MRS JUSTICE COX DBE
- This is the full hearing of an appeal by the Respondent employers, Yorkshire Housing Ltd, from a judgment of the Sheffield Employment Tribunal dated 30 November 2006. Following a four-day hearing the Tribunal held that the Claimant was summarily dismissed for gross misconduct on 14 July 2005 and that the dismissal was unfair. The Claimant was held to have contributed to her dismissal to the extent of 60 per cent. The Tribunal also held that there was a breach of contract by the Respondents in dismissing without notice for gross misconduct.
- The Claimant then applied for a review of that judgment, on the ground that their finding of contribution was based upon an incorrect chronology of events and upon an incorrect finding as to a "previous" warning given to her. The Tribunal agreed to hold a review hearing on 31 May 2007 and, in their judgment sent to the parties on 18 June 2007, they revoked their finding as to the Claimant's 60 per cent contribution. They held that the parties could make submissions on all aspects of remedy, including contribution, at any remedy hearing to follow.
- Grounds of appeal to the EAT relating to the finding of contribution have since been struck out, following judgment on the review. The Respondent's appeal against the finding of unfair dismissal is therefore based essentially on the following:
1) Criticisms of the Tribunal's statement and application of the test in BHS v Burchell [1980] ICR 303 (ground 6.1);
2) Criticisms as to various findings of fact for which there is said to be no evidence to support such findings (ground 6.3);
3) The Tribunal's failures (grounds 7-10) to explain their reasoning adequately or at all in relation to their criticisms of the Respondents' investigative and disciplinary process; to assess and determine the effects of the Claimant's appeal upon those criticisms; and to apply the correct legal principles in determining whether the Claimant's conduct amounted to gross misconduct.
- The Claimant resists the appeal. She acknowledges that the Burchell test was inaccurately stated but contends that the Tribunal's application of the test was in the event correct, and that the remaining grounds of appeal are misconceived. She also cross appeals from the judgment on the grounds that the Tribunal erred in not concluding that her dismissal was automatically unfair under section 98A(1) Employment Rights Act 1996, and in not applying the uplift provisions of section 31(3) Employment Act 2002.
- The cross appeal has raised an interesting point on the effects of an employer's failure to comply with the general requirement of the statutory disciplinary procedure, in Part 3 of Schedule 2 to the Employment Act 2002, that each step and action under the procedure must be taken without unreasonable delay.
The Relevant Facts
- The Claimant was employed by the Respondent as a housing officer and was continuously employed in that capacity between August 2001 and 14 July 2005, the effective date of termination of her employment.
- The Tribunal purport to set out their findings of fact at paragraphs 4.1 to 4.22 of the judgment. However, these are both shortly stated and incomplete, since further factual findings have to be gleaned from their conclusions, set out under paragraph 8. This we found to be somewhat unhelpful and confusing. The confusion led, in part, to the Claimant's successful application for a review, as the Tribunal themselves acknowledged in paragraph 2 of the review judgment of 18 June. Discerning the Tribunal's findings of fact, the basis for them, and their reasoning in relation to the conclusions set out at paragraph 8, has also proved difficult in a number of respects in this appeal.
- Before her employment with the Respondent the Claimant had been employed for some 13 years as a local government officer. She was a member of the Institute of Housing and, although she may not have been fully qualified, the Tribunal held that she could reasonably be expected to have known what standards of conduct were required of her, and of the importance of her job and its responsibilities.
- The Tribunal held at paragraph 8.1:
"Total probity and impartiality is essential. Apart from anything else charitable and public monies are involved and public bodies have, by their very nature, to stand the test of public scrutiny and strive to be beyond reproach, this to maintain public respect and confidence. The Claimant, being a mature person with working experience in public bodies would and should have understood this."
- The Claimant had been friends for a number of years with one Mr. Azam, about whose personal and business circumstances the Tribunal said she would have known a good deal. He had helped her in the past with the purchase of various motor cars.
- On one occasion Mr. Azam had sought the tenancy of a property belonging to the Respondent (in Glamis Close) and the Claimant asked a senior member of staff, Mr. Baugh, whether it was all right for her to introduce a friend in these circumstances. She was told that, provided everything was done impartially and seen to be above board, this was permissible. The Tribunal found at paragraph 8(3) that Mr. Baugh also cautioned that:
"… it would be incumbent upon anyone dealing with a friend in such circumstances to be especially careful and do everything possible to ensure that any ensuing transaction was not only totally transparent but seen to be so. It would need to be and be seen to be 'squeaky clean'."
- The Claimant proceeded to help Mr. Azam, who completed application forms in which he declared, amongst other things, that he was in receipt of social security benefits.
- Later on, however, Mr. Azam was arrested and was apparently detained in custody at some point. The police then told the Respondents that they suspected that the Claimant, in assisting Mr. Azam, may herself have been involved in fraudulent activity.
- On 1 November 2004 the Claimant was questioned by her line manager, Claudia Walsh, and immediately suspended from her duties on suspicion of assisting Mr. Azam to obtain a tenancy of one of the Respondent's properties; and of doing so when she must have known that he was not in receipt of state benefits, as he had claimed on his application form.
- The matter was then investigated by Mr. Rich, a central area manager of the Respondent, who prepared a written report. The outcome on this occasion was that the Claimant was exonerated and her suspension lifted. She returned to her duties on 1 December 2004. However, in his report, Mr. Rich made it clear that this might not be the end of the matter, if other matters arose concerning the Claimant's conduct during the course of the ongoing police investigation.
- In fact, very shortly after her return to work, the Claimant was suspended again on 3 December, following further information received from the police as to the Claimant's conduct. She never returned to work following this suspension for her suspected involvement in events which led ultimately to her dismissal. It appears from paragraph 4.11 that at some stage the Claimant herself was arrested by the police on suspicion of fraud, this relating, in part, to the earlier incident involving Mr. Azam. She was not, however, detained in custody.
- On 3 December the Claimant was suspended because of suspicions: (a) that she had introduced Mr. Azam as a potential purchaser to a Mr. Collins, who wished to sell his own house and obtain a tenancy of one of the Respondent's properties; and that she had thereby committed a serious breach of the Respondent's code of conduct resulting in a personal friend potentially obtaining an unfair advantage or material benefit in circumstances where the Claimant had a duty towards Mr. Collins to act completely impartially; and further (b) that she was involved in the theft of some items of property belonging to Mr. Collins.
- Mr. Rich was appointed once again to investigate these allegations, with a view to deciding whether or not disciplinary proceedings should be brought against the Claimant. Mr. Rich held an investigative meeting with the Claimant, who was unaccompanied, on 22 December 2004.
- In their findings of fact at paragraphs 4.16 to 4.22 the Tribunal stated as follows:
"4.16 Following that Mr Rich not only recommended that the claimant should be dealt with under the respondent's disciplinary procedures, he also recommended that she be dismissed for gross misconduct. This was beyond the scope of what was required of him by the respondent's rules nowhere within which does it say that an investigation officer should make recommendations of that sort.
The investigation itself was not reasonably carried out in all the circumstances of the case.
No statements of any description were taken e.g. from Mrs Hirst, Mrs Pritchard, Mrs Bate and Clare Vernon, potential witnesses whose testimony might have had a bearing on the outcome of the investigation and, not least, upon any sanction which might subsequently be imposed. This was despite the claimant raising concerns about these matters at the disciplinary hearing and later at her appeal.
A delay occurred in dealing with the matter, a delay which was not reasonable in all the circumstances.
Following the disciplinary hearing (before Mr Atkinson) on 17 February 2005 Mr Atkinson on 14 July (some 5 months later) and after a reconvened meeting dismissed the claimant for gross misconduct.
The claimant was given a right of appeal which she exercised. Her appeal was heard by Mr Payne (Group Chief Executive) and two of the respondent's directors on 1 August 2005.
The panel made further enquiries after adjourning the appeal hearing and later by letter dated 12 August 2005 informed the claimant that her dismissal was upheld."
- In relation to "ordinary" unfair dismissal the Claimant complained of both procedural and substantive unfairness; and contended that the sanction of dismissal was one which no reasonable employer would have imposed in the circumstances.
- She further claimed that the delay in dealing with the disciplinary process and in notifying her of the outcome was such as breached the statutory requirements set out in the Employment Act 2002. We shall deal with that when we come to consider the cross appeal in this case.
The Tribunal's Decision
- The Tribunal's conclusions as to ordinary unfair dismissal are set out at paragraphs 8(9) to 8(13) as follows:
"8(9) Mr Rich again was invited to investigate this latest matter with a view to seeing whether disciplinary action should be taken against the claimant. This time Mr Rich decided not only that it merited disciplinary action but went further and quite categorically stated that in his view the claimant ought to be summarily dismissed for gross misconduct. This was, we believe, beyond his brief. In any event, in accordance with the company's procedure after an investigation of that sort there should then be a disciplinary hearing. It would follow, as a matter of natural justice, that the person chairing the disciplinary meeting should not only be impartial but be seen to be completely impartial. It would be perfectly proper for an investigating officer to present any facts that he or she had found to the disciplinary officer. In this case we have no doubt whatsoever that Mr Atkinson (who chaired the disciplinary meeting) acted largely on what the police had informed the respondent and upon Mr Rich's recommendation rather than on evidence gained from any reasonable and impartial enquiry mounted within the respondent's organisation itself. Mr Rich had not attended the disciplinary hearing and could not, therefore, be questioned. He had prepared his report without questioning potential witnesses referred to by the claimant. As for Ms Hirst who, said the claimant, she had cleared matters with, Mr Atkinson and a Human Resources officer, Alicia Hutchinson, had gone to Leeds (where Miss Hirst was based) and had spoken to her fairly briefly. It was quite evident from the evidence we heard and from the documentary evidence before us that no statement was ever taken from her. The claimant was never given an opportunity to cross examine Ms Hirst or to see, on paper, what Ms Hirst said in response to the claimant's suggestion that she had cleared the matter of Mr Azam's involvement with her. Again, in relation to one of the charges which was, as far as the claimant was concerned at least, being considered as part of the disciplinary process i.e. the loss or theft of missing items belonging to Mr Collins, the claimant had suggested that witnesses might be available to assist her. None were questioned and when, later, this matter was raised the respondent was dismissive of the claimant's protests. It is true that the respondent had decided not to pursue that aspect of the matter (i.e. the missing items) but that had never been made clear to the claimant who, as far as she was concerned, was at risk of disciplinary action and dismissal for possible theft or misappropriation of property belonging to one of the respondent's tenants.
8(10) The respondent did not, in our view, carry out an impartial enquiry of its own nor did it take reasonable steps to investigate matters. Certainly the respondent would be entitled to rely on any cogent evidence the police might put forward and place at its disposal but at that stage no trial i.e. criminal trial, had taken place and the claimant herself had never had been able to see sight of what it was the police were telling her employers. The investigation process was therefore flawed. Furthermore, Mr Collins who was the tenant at the centre of all this had never himself complained to the Association directly. According to the police he had complained to them.
8(11) At a late stage during the disciplinary process the claimant had sight of letters which, say the respondent, led them to believe that the claimant had acted improperly insofar as her relationship with Mr Azam, the Association and one of the Association's tenants was concerned and whilst there was certainly evidence which could reasonably lead an employer to believe, on the balance of probabilities, that the claimant may have acted wrongly the investigative and procedural process was such as to make any fair appraisal at the end of the day risky to say the least.
8(12) The failure to deal adequately in relation to Ms Hirst was in our view an important factor which seriously flawed the respondent's case. Shortly before Miss Swanson dealt with Mr Azam in relation to his tenancy of one of the respondent's properties (Glamis Close), she had told Mr Baugh, one of her managers, that she was introducing a friend who wanted a tenancy. At that stage the respondent, apart from saying that she should act with propriety, had allowed her to continue to deal with the matter. That had led to her being arrested by the police and suspended by her employer. Whilst, following an investigation, she had been allowed to return to work, it was made clear to her that she needed to be very careful in future. Shortly on the back of that here she was again involving herself with Mr Azam, and in a transaction involving a tenant of the respondent. At that stage, knowing what she did in relation to Mr Rich's cautionary note, she should have been particularly careful and far more explicit than even she herself admits she was in relation to her conversation with Ms Hirst. If one looks at what the claimant herself claimed she said to Ms Hirst, it was about wishing to contact 'contractors' and 'landlords'. This would hardly suggest that she had a specific person i.e. a friend in the person of Mr Azam, in mind. We are quite sure on the whole of the evidence we have heard that at the time she claims to have spoken to Ms Hirst it was Mr Azam that she had in mind and given what had gone on before it was very remiss of her not to have cleared her lines specifically with management. Had she done so we are quite sure that she would not have been allowed to continue to deal with matters in the way she did. Despite what Mr Rich had earlier said and despite not having cleared matters with Ms Hirst the claimant went ahead and dealt with matters affecting Mr Collins in a way which could have, at least potentially, compromised herself, Mr. Collins and the respondent.
8(13) We believe that the respondent has established conduct as being the principal reason for dismissal but we believe that the investigative process was flawed, inadequate and not carried out reasonably in the circumstances. We fully appreciate that an employer is not required to carry out a police style investigation. Police carry out enquiries into matters which end up in court where allegations have to be proved beyond reasonable doubt. In this case we have no doubt that the respondent relied heavily on what the police had said whilst the claimant herself was largely kept in the dark. There was no truly independent investigative process as is always necessary when an employer is considering dismissing an employee. There may be circumstances where police evidence is overwhelming and where an employee has fair knowledge of it in which case dismissal might legitimately follow but not without an employer himself applying his mind to the matter after carrying out a reasonable enquiry of his own and affording an employee every opportunity to challenge the evidence."
The Appeal
- Mr. Rees' first and main ground of appeal is that the Tribunal misdirected themselves as to the Burchell test and that, as a result of that misdirection, they failed to apply the test correctly to the facts found.
- The Tribunal dealt with the relevant law at paragraphs 7(1) to 7(10). They stated, correctly, that it was the Respondents' task to establish a potentially fair reason for the dismissal. They went on to find at paragraph 8(13) that the Respondents had discharged this burden and had shown that the principal reason for the dismissal was the Claimant's conduct.
- The Tribunal then directed themselves at paragraphs 7(5) to (7) as follows, in relation to the fairness of the dismissal:
"7(5) If the respondent is able to establish a potentially fair reason for dismissal the tribunal would need to go on to consider the provisions of Section 98(4) of the Employment Rights Act 1996 and decide whether the respondent had adopted and carried out fair procedures before coming to its decision. Further, the tribunal needs to consider whether the decision itself was one within a band of options open to a reasonable employer in all the circumstances of the case.
7(6) Applying the test in Burchell v British Home Stores the tribunal needs to consider (1) whether there were reasonable grounds for the employer to suspect the claimant of misconduct, (2) if so whether it subsequently carried out a reasonable investigation in all the circumstances of the case, (3) whether fair procedures were carried out and (4) at the end of the day was the decision to dismiss one which a reasonable employer could make in the circumstances.
7(7) With regard to that latter factor (i.e. the sanction imposed) it is not for the tribunal to determine what in the same circumstances it might have done itself. One employer might dismiss someone for an act or omission whilst another employer might impose a lesser sanction. It is quite possible that neither decision (though different) would be unreasonable. It is only if an employer dismisses in circumstances in which no reasonable employer would have dismissed can the tribunal intervene and say that this was an unfair dismissal. We must not place ourselves in the shoes of respondents themselves."
- We agree with Mr Rees, and Ms Cowen did not seek to suggest otherwise, that the Tribunal's direction at paragraph 7(6) was an incorrect statement of the Burchell test. It is common ground that the Tribunal were required to ask themselves the following questions in this case.
As at the time of the Claimant's dismissal:
i. Did the Respondent believe that the Claimant was guilty of the misconduct alleged?
ii. If so, were there reasonable grounds for that belief?
iii. At the time it formed that belief, had it carried out as much investigation into the matter as was reasonable in the circumstances?
In determining the reasonableness of the investigation carried out the Tribunal should consider whether the process adopted by the Respondent in this case fell within the range of reasonable investigative procedures open to an employer in such circumstances.
- After considering each of the three elements of the Burchell test the Tribunal then had to ask themselves the final question, namely whether the decision summarily to dismiss the Claimant was within the range of reasonable responses open to an employer in the circumstances.
- It is apparent from paragraph 7(6) that, erroneously, the Tribunal referred to this final question as being part of the Burchell test; conflated the first two elements of that test; and misdirected themselves as to the necessity to consider the procedural fairness and reasonableness of a subsequent investigation, rather than of an investigation which preceded the forming of the Respondent's belief.
- Mr. Rees submits that these errors resulted in the Tribunal failing correctly to apply the tests for fairness of the dismissal, and failing to address each of the Burchell elements; and in their failing, further, to consider and state whether both the investigative process adopted, and the decision subsequently to summarily dismiss the Claimant, fell within the "range of reasonableness" for employers in these circumstances and, if not, to give adequate reasons for so finding.
- In developing these arguments Mr Rees emphasised that there was no consideration of, or finding as to, the first Burchell element, namely that the Respondent did themselves genuinely believe at the time of the Claimant's dismissal that she was guilty of gross misconduct. The Claimant's case was that Mr. Atkinson, whose decision it was to dismiss her, had merely accepted at face value what the police had said, through Mr. Rich. This was denied by the Respondent, but the Tribunal do not appear to have considered the evidence or made a clear finding on this issue. Nor did the Tribunal address the second Burchell element at all. They state only that the investigation was not impartial and that no reasonable steps were taken to investigate matters. They seem, therefore, to have addressed only the third element of the test and Mr. Rees submits that even that was not addressed adequately in the judgment.
- Ms Cowen, whilst accepting that the Tribunal's direction at paragraph 7(6) was not an accurate statement of the relevant test, nevertheless sought to persuade us that the Tribunal's findings demonstrated that they had, in the event, asked themselves the right questions and, as she eloquently expressed it, that they had "played all the right notes, though not necessarily in the right order". She points out that the first element of the Burchell test was conceded by the Claimant's representative in her written closing submissions, so that there was no need for the Tribunal to refer to the Respondent's genuine belief as to her misconduct. She submits too that, reading between the lines at paragraph 8(11), the Tribunal are also implicitly finding that there were reasonable grounds for that belief. In relation to the third element she submits that it is clear from the Tribunal's conclusions that they had many criticisms of the investigative and disciplinary procedure; and that they adequately explained their disapproval of it and the reasons why they considered it impartial and unreasonable. Ms Cowen therefore submits that the second and third elements of the Burchell test were in fact correctly covered in the judgment, albeit as she acknowledged they were covered "haphazardly". Further, she submits that the "range of reasonable responses" test, although not expressly referred to in the judgment, is to be regarded as implicit in the decision, in view of the serious flaws found to exist in the investigative process. Ms Cowen drew our attention to a number of paragraphs from which she sought to extricate sentences demonstrating that the correct application of this test was to be inferred (see, for example, the final sentence of paragraph 8(13).
Conclusion
- The main difficulty for Ms Cowen, in relation to this first and main limb of the appeal, is that the force of these submissions was necessarily diluted by her acknowledgment at the start that the Tribunal had approached the fairness of this dismissal for gross misconduct in an unfocussed and haphazard way, after misdirecting themselves as to the legal test to be applied.
- It is correct of course, and has often been re-stated, that the judgments of Tribunals are not to be read as if they were statutes. Allowance should be made, and often is, for a degree of imprecision in the legal directions, even very familiar directions, so long as it is clear from the judgment as a whole that the correct legal principles have been correctly applied to the facts found; and that the Tribunal's reasoning is sufficient to enable the parties, and this Appeal Tribunal, to understand the basis upon which they have arrived at their conclusions. Notwithstanding Ms Cowen's helpful and succinct submissions however, this judgment in our view does not pass that test.
- We have referred already to the confusion caused by the Tribunal's failure to set out fully at paragraph 4 the evidence and their findings of fact, including crucially their findings on disputed factual issues, of which there were a number in this case, and the basis for those findings. This weakness in the judgment, coupled with the inaccurate summary of the legal principles to be applied at paragraph 7, has resulted in a labour intensive and ultimately unsuccessful trawl through individual paragraphs in the conclusions, in order to attempt to discover what facts were found and whether the Tribunal did, in the event, ask themselves the right questions and adequately explain their reasoning.
- The importance of accurately stating the test to be applied is that it provides the structure and sequence to be followed by the Tribunal when applying it to the facts, thereby enabling them to focus on the issues in the right way, avoiding omissions and ensuring coherence.
- Here, even though the point had been conceded by the Claimant, it is correct that the Tribunal themselves made no finding as to whether the Respondent, and in particular the decision-maker Mr. Atkinson, genuinely believed as at the time of the Claimant's dismissal that she was guilty of the gross misconduct alleged. Nor did they say whether they considered he had reasonable grounds for so believing. In considering the fairness of a dismissal, these are important elements of the Burchell test.
- The Tribunal's conclusions seem to us to be almost entirely devoted to the third element of the test, and in particular to criticisms of Mr. Rich's investigation. In that respect Mr. Rees makes a number of criticisms as to the Tribunal's misdirections on the evidence and as to factual findings which, he submits, were either not open to them on the evidence or are inadequately explained. We shall return to those later on. However, we agree that what is absent from the Tribunal's consideration of the Respondent's investigation and disciplinary process is any assessment of whether, given that a police investigation was continuing at the same time, the procedure adopted by the Respondent in these particular circumstances fell outside the range of reasonable procedures open to an employer in that situation.
- Nor was there any clear assessment or finding as to whether Mr. Atkinson's decision to dismiss summarily for gross misconduct on 14 July fell outside the range of reasonable responses. This error seems to us compounded by the Tribunal's further finding at paragraph 8(17), in considering the breach of contract claim, that:
"We do not believe, because of the inadequate investigation and defect in the procedures that it was reasonable to conclude that Miss Swanson was guilty of gross misconduct, not least when she had earlier and fairly recently been allowed to involve herself in a transaction concerning her friend Mr. Azam. For those reasons we believe she should have been dismissed with notice."
In so finding the Tribunal appear erroneously to have substituted their own view as to the reasonableness of the Respondent's decision to dismiss summarily in the circumstances, after recognising correctly at paragraph 7(7) that this was not the correct approach.
- For these reasons, in our judgment, the first ground of appeal succeeds and the Tribunal's finding of unfair dismissal cannot stand. We also accept Mr. Rees' submissions that the finding as to breach of contract cannot be sustained in the circumstances.
- It is unnecessary for us to deal in detail with Mr. Rees' other grounds of appeal but, in fairness to the parties, we shall summarise our conclusions on the main points.
- (1) Firstly, given the Tribunal's finding that Mr. Rich did in fact conduct an investigation into the allegations against the Claimant and produce a written report, which was adduced in evidence and which we have been shown, we agree with Mr. Rees that the Tribunal do not then adequately explain why they found his investigation to have been impartial and why it was found (at paragraph 4.17) not to have been reasonably carried out in the circumstances. Mr. Rich's six-page report provided a detailed account both of the information received from the police on 2 December 2004 and of the steps taken by him to investigate it, including the Claimant's own answers to him in interview and responses to documents shown to her, and the results of further interviews with Ms. Hirst and Mrs Walsh, all of which led to his conclusions and recommendation. Notwithstanding the reference, at paragraph 8(10) of the judgment, to the Claimant never having been shown what the police were telling her employers, the report that Mr. Rich produced indicated that all the material received from the police had been put to the Claimant in interview and her responses to it had been recorded. Further analysis and explanation by the Tribunal as to the inadequacy of this investigation, and as to the impartiality said to undermine it, was therefore called for in the circumstances.
- (2) Notwithstanding the Tribunal's criticisms of Mr. Rich, there is no evidence referred to and little by way of analysis or explanation for the conclusion at paragraph 8(9) that Mr. Atkinson "acted largely on what the police had informed the Respondent and upon Mr. Rich's recommendation". There was no finding that Mr. Atkinson had decided to dismiss the Claimant because Mr. Rich had "gone beyond his brief", as they found, and no explanation as to why, if so they found, Mr. Atkinson as the decision maker was himself acting impartially or unreasonably. Further, save for a brief reference to the Claimant's appeal, to the appeal hearing and the further enquiries made and to its result (at paragraphs 4.21 and 4.22), the appeal is not referred to again at paragraph 8. There is therefore no consideration given by the Tribunal to the extent to which any defects identified in the investigative and disciplinary process were or were not rectified on appeal.
- (3) The Tribunal found, at paragraph 4.18, that no written statement was taken from Ms. Hirst, whose evidence was said to be relevant to the investigation and its outcome. This finding was repeated at paragraph 8(9) and was said, at paragraph 8(12), to be an important factor which "seriously flawed" the Respondent's case. Yet the Tribunal found as a fact, at paragraph 8(8), that the Claimant had not cleared the matter with Ms. Hirst as she had claimed; and, at paragraph 8(9), that Mr. Atkinson (this we assume must mean Mr. Rich) had travelled to Leeds to speak to Ms. Hirst and obtain her response to the Claimant's account. Further, Mr. Rich had set out Ms. Hirst's response in his written report, a copy of which was given to the Claimant.
- Whilst the evidence referred to indicates, therefore, that the Claimant knew what Ms. Hirst was saying and had had an opportunity to respond to it, no reference is made to this by the Tribunal. Nor do they adequately explain how the absence of a "written statement" from Ms. Hirst, or the Claimant's inability to cross-examine her, amounted to a serious flaw in these circumstances.
- (4) In relation to the other witnesses referred to at paragraph 4.18, it is not in dispute that Mrs. Pritchard and Mrs. Bate were witnesses brought by the Claimant herself to the disciplinary hearing; and that they were relevant only to the allegation of theft of items of Mr. Collins' property which was, by then, no longer being pursued by the Respondent. It does not appear to be in dispute that the only relevant witness identified at the Claimant's interview with Mr. Rich was Ms. Hirst, who was then interviewed by him, in addition to Claudia Walsh, the area manager. The Tribunal do not explain how the evidence of the witnesses named at 4.18 might have had a bearing on the outcome of the investigation concerning the option to purchase Mr. Collins' property, still less on the sanction imposed. It does not appear to be suggested that they were relevant to either issue.
- (5) Considerable importance is attached by the Tribunal to the fact that Mr. Rich, as the person who had carried out the investigation, did not attend the disciplinary hearing. Certainly, we agree that investigators will usually attend such hearings to present their reports. It is not in dispute, however, although not recorded by the Tribunal, that the Claimant had received a copy of his report in advance of the disciplinary hearing and that, although she was in receipt of legal advice at this time, she made no request for his attendance either before or during the hearing. The extent to which its factual basis was the subject of challenge, if at all, is not referred to. Nor does it appear to have been suggested in this case that the Claimant ever asked for the opportunity to question Mr. Rich as to his investigation or the contents of his report and was denied the chance of doing so. Further, an examination of the Minutes of the disciplinary hearing (page 293 of the appeal bundle), not referred to by the Tribunal, reveals that Mr. Atkinson went through Mr. Rich's report with the Claimant at the disciplinary hearing, asking her questions about its contents, putting the case to her, and affording her an opportunity for further input into the process.
- (6) Finally, at paragraph 8(11) the Tribunal refer to the Claimant having had sight of relevant letters only "at a late stage during the disciplinary process", these being the two letters supplied by the police, which led the Respondent to believe that the Claimant had acted improperly. It is clear, however, from the record of Mr. Rich's interview with the Claimant on 22 December 2004 (pages 200-205) that these two letters were presented to the Claimant during that initial interview; that she was questioned closely about their contents; and that she gave an explanation as to the circumstances in which they came to be written. To the extent that the Tribunal sought to criticise the Respondent for withholding relevant evidence from the Claimant, the evidence before us suggests no basis for such criticisms.
- We refer to these evidential and factual matters because, viewed cumulatively, they demonstrate in our judgment that the Tribunal failed to explain clearly and sufficiently what evidence they were relying upon in order to conclude, as they did, that these Respondent did not take reasonable steps to investigate matters and that it acted impartially. We agree with Mr Rees therefore that this judgment, regrettably, does not pass the "Meek" test (Meek v City of Birmingham District Council [1987] IRLR 250). For these reasons in addition we would allow this appeal.
The Cross Appeal
- In addition to "ordinary" unfair dismissal the Tribunal, at paragraph 6(3), identified the following issue to be determined,
"Ms Swanson also claims that the delay in dealing with the disciplinary process and in notifying her of the outcome was such as breached the statutory requirements set out in the Employment Act 2002."
- At paragraph 7(4) they referred to the Claimant's allegation that there had been a breach of section 31 of the Employment Act 2002 in that there was such a delay in the procedures as to amount to a breach of that Act. They directed themselves that:
"If the Tribunal is persuaded that that is the case then again the dismissal would be automatically unfair under section 98A of the Employment Rights Act 1996."
- Their conclusions, so far as is relevant to this issue, appear at paragraphs 8(14) and (15) as follows:
"8(14) Insofar as the procedure is concerned we find that there was a considerable delay between the date of the disciplinary hearing (17 February 2005) and the notification of the outcome to Mrs Swanson i.e. 5 months.
…
8(15) We believe that the respondent's failure to notify the claimant of the outcome of the disciplinary hearing within a reasonable period amounts to a breach of the Employment Act 2002. If one looks at Part 3 of the Act (within Schedule 2) – under the heading "General Requirements" it therein (at 12) states "Each step and action under the procedure must be taken without unreasonable delay". This is a requirement under the Act and in this case, despite what the respondent said in relation to adjourning the disciplinary hearing and about new evidence coming to light, it is our view that the delay between February or July was unreasonable and, we believe, indefensible."
- The Respondent has not appealed against or sought to criticise these findings. It is, further, common ground that the Standard Procedure in Chapter 1 of Part 1 of Schedule 2 applied in this case.
- Ms Cowen submits firstly that, having found that the Respondents was in breach of a general requirement of the statutory disciplinary procedure, the Tribunal erred in not then going on to determine the issue identified at paragraphs 6(3) and 7(4) in the Claimant's favour and find that she had been automatically unfairly dismissed under section 98A(1) Employment Rights Act 1996. Secondly, if the Tribunal ought to have made a finding of automatic unfair dismissal, then it follows that they ought also to have considered an uplift to the Claimant's compensation under section 31 of the 2002 Act; and that they erred in failing to hold that the Claimant was entitled to a statutory uplift.
- Mr. Rees submits that the failure to comply with a procedural requirement under section 98A(1) does not include non-compliance with a general requirement contained in Part 3 of Schedule 2 to the 2002 Act. Regulation 12 of the Employment Act 2002 (Dispute Resolution) Regulations 2004, merely sets out the circumstances under which either party will no longer be under any obligation to comply with any further part of the statutory procedures if there is non-compliance with any part of them, including non-compliance with a general requirement.
- Alternatively, he submits that if the failure to comply with a procedural requirement in section 98A(1) does include non-compliance with a general requirement, then since the Tribunal made no finding that the unreasonable delay was applicable to any of the procedures set out in Part 1 of Schedule 2, as required by paragraph 11 of Part 3, they were not bound to make a finding of automatic unfair dismissal or to hold that the Claimant was entitled to an uplift.
The Law
- The relevant statutory provisions are as follows:
Employment Act 2002, Schedule 2
PART 1
DISMISSAL AND DISCIPLINARY PROCEDURES
CHAPTER 1
STANDARD PROCEDURE
STEP 1: STATEMENT OF GROUNDS FOR ACTION AND INVITATION TO MEETING
1
(1) The employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.
(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.
STEP 2; MEETING
2
(1) The meeting must take place before action is taken, except in the case where the disciplinary action consists of suspension.
(2) The meeting must not take place unless-
(a) the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and
(b) the employee has had a reasonable opportunity to consider his response to that information.
(3) The employee must 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
3
(1) If the employee does not wish to appeal, he must inform the employer.
(2) If the employee informs the employer of his 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 his final decision.
PART 3
GENERAL REQUIREMENTS
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.
MEETINGS
13
(1) Timing and location of meetings must be reasonable.
(2) Meetings must be conducted in a manner that enables 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 most senior manager attended that meeting).
Employment Rights Act 1996
s. 98A Procedural fairness
(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 1 of Schedule 2 to the Employment Act 2002 (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 its requirements.
(2) Subject to subsection (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(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) For the purposes of this section, any question as to the application of a procedure set out in Part 1 of Schedule 2 to the Employment Act 2002, completion of such a procedure or failure to comply with the requirements of such a procedure shall be determined by reference to regulations under section 31 of that Act.
Employment Act 2002 (Dispute Resolution) Regulations 2004
12 Failure to comply with the statutory procedures
(1) If either party fails to comply with a requirement of an applicable statutory procedure, including a general requirement contained in Part 3 of Schedule 2, then, subject to paragraph (2), the non-completion of the procedure shall be attributable to that party and neither party shall be under any obligation to comply with any further requirement of the procedure.
Employment Act 2002
31 Non-completion of statutory procedure: adjustment of awards
(1) This section applies to proceedings before an employment tribunal relating to a claim under any of the jurisdictions listed in Schedule 3 by an employee.
…
(3) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that-
(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,
(b) the statutory procedure was not completed before the proceedings were begun, and
(c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure,
it must, subject to subsection (4), increase any award which it makes to the employee by 10 per cent and may, if it considers it just and equitable in all the circumstances to do so, increase it by a further amount, but not so as to make a total increase of more than 50 per cent.
Discussion and Conclusions
- The starting point, in this case, is that Part 3 of Schedule 2, Employment Act 2002 establishes a number of general requirements which, under paragraph 11, apply so far as applicable to the dismissal and disciplinary procedures contained in Part 1. The relevant procedure in this case, pursuant to Regulation 3(1) Employment Act 2002 (Dispute Resolution) Regulations 2004 (the Regulations), is the Standard Procedure in Chapter 1.
- Paragraph 12 of Part 3, addressing "Timetable", contains a general requirement that each step and action under the Standard Procedure must be taken without unreasonable delay. In relation to paragraph 12, the words "so far as applicable" in paragraph 11 mean, in our judgment, that the paragraph 12 requirement will apply wherever delay is relevant to the particular step or action. It will therefore apply to the employer's duty under paragraph 2(4), after a Step 2 meeting, to inform the employee of his decision and to notify him of the right to appeal.
- There is no dispute in this case that the Step 2 meeting was the Claimant's disciplinary meeting with Mr. Atkinson on 17 February 2005. The Tribunal rejected the Respondent's explanation for the delay between that meeting and the notification of its outcome to the Claimant on 14 July. They held that the delay of 5 months between the meeting and the notification to the Claimant of her summary dismissal for gross misconduct was unreasonable and indefensible. The Respondent has not appealed against these findings.
- By virtue of section 98A(1) the Claimant is to be regarded as unfairly dismissed if the Standard Procedure which applies has not been completed; and if the non-completion of that procedure is wholly or mainly attributable to failure by the Respondent to comply with its requirements. We are not concerned in this case with the provisions of section 98A(2), because it is agreed that we are dealing with a breach of the minimum statutory procedure.
- The question that arises in this case is therefore whether the Standard Procedure was not completed, due wholly or mainly to the Respondent's failure to comply with its requirements. Under section 98(3) any question as to the completion of that procedure, or failure to comply with its requirements, is to be determined by reference to the 2004 Regulations, made under section 31(6) Employment Act 2002. Section 31 is headed "Non-completion of statutory procedure: adjustment of awards" and section 31(6)(b) provides:
"The Secretary of State may for the purposes of this section by regulations –
……
(b) make provision about when a statutory procedure is to be taken to be completed;"
- Ms Cowen submits that provision was made in regulation 12(1). Pursuant to that regulation the failure to comply with a requirement of the Standard Procedure, including the general requirement that each step must be taken without unreasonable delay, is to be taken as a non-completion of that procedure. Thus, if the Respondent fail to comply with a general requirement of the Standard Procedure, as has been found by the Tribunal in this case, then the "non-completion" of that procedure shall be attributable to the Respondent. (Paragraph 12 (2) does not apply in this case).
- The Respondent's failure in this case to comply with paragraph 12 of Part 3 therefore means, she submits, that the Standard Procedure has not been completed, and that its non-completion is wholly attributable to the Respondent's failure. The Claimant is therefore to be regarded as unfairly dismissed under section 98A(1).
- Mr. Rees submits that this cannot be what was intended by the introduction of these statutory procedures. It does not accord with common sense, he says, to suggest that there was a "non-completion" of the Standard Procedure in this case, when both parties continued to operate it, and indeed to proceed to and conclude the Step 3 appeal. As a matter of fact, therefore, the procedure was completed. He points out that there is no reference in section 98A(1) to Part 3 of Schedule 2 and the general requirements; and that Parliament would have amended section 98A(1) to include such a reference if failure to comply with a general requirement was intended to result in a dismissal being held to be automatically unfair. Under Regulation 12(1) the effect of a failure to comply with a general requirement is merely that the innocent party is no longer under any obligation to continue with the procedure, although they can still elect to continue notwithstanding that failure, if they wish.
- We can see the logic of Mr. Rees' submissions. If Ms Cowen's submissions are correct, where an employer is subsequently found by an employment tribunal unreasonably to have delayed at any stage of the procedure, even for example in sending the conduct statement to the employee under paragraph 1(2) of Part 1, the employee may be regarded as having been unfairly dismissed under section 98A(1), even if both parties had decided at the time to continue with the procedure and had in fact followed each stage through to its conclusion.
- An employer might in some cases be able to argue that it was not "practicable" to comply with a general requirement "within a reasonable period", within the meaning of Regulation 11(3)(c). In such circumstances it appears that the parties are to be treated, under Regulation 11(2), as having complied with the procedure. That however is not this case, the tribunal having rejected the Respondent's explanation for the delay, and we emphasise that we have not heard any argument on that point in this appeal.
- In our judgment, though not without some unease, Ms. Cowen's submissions as to the effect of these provisions in the present case are correct. Notwithstanding section 31(6)(b), there is in fact no regulation which makes express provision as to when a procedure is to be "taken to be completed". "Completion" and "non-completion" are nowhere defined, save that non-completion is stated in regulation 1 to include the non-commencement of a statutory procedure. Regulation 12 alone refers to "non-completion" and, in the context in which those words appear, it seems clear to us that regulation 12 is making provision for the consequences of an employer's failure to comply with the requirements of the statutory procedures including, expressly, the general requirements. Such a failure is therefore to be regarded as a non-completion of the procedure.
- Mr. Rees' submission that Parliament did not intend this to be the effect of these provisions is weakened by the fact that section 98A was brought into force on the same day as the 2004 Regulations, namely 1 October 2004. Ms. Cowen observed that the intention, no doubt, was to give "teeth" to the new statutory procedures to be followed by employers.
- In this respect we would also add, by way of general observation, that delay is always the enemy of fair dispute resolution in the workplace, leading as it does to fading memories, prolonged anxiety, the entrenchment of parties' positions, prejudice to a fair hearing of the issues, and thereby to injustice. The over-arching general requirement in paragraph 12 to avoid unreasonable delay at all stages of the procedures no doubt seeks to achieve this; and employers will be well advised to comply with it at every step.
- In this case, therefore, given the clear and unchallenged finding of the Tribunal at paragraph 8(15), we agree with Ms. Cowen that they should then have gone on to consider and resolve the question they posed at paragraph 7(4), which they appear simply to have overlooked. Since they were persuaded that the Respondent had unreasonably delayed in notifying the Claimant of the outcome of the disciplinary meeting they should have found that the procedure had not been completed, and that the Claimant's dismissal was automatically unfair under section 98A.
- We therefore allow the cross-appeal on the first ground and substitute a finding of unfair dismissal under that section.
- It follows that we also allow the cross-appeal on Ms. Cowen's second ground. Under section 31 (4) the Tribunal should have held that the Claimant would be entitled to a statutory increase in her compensation because of the non-completion of the statutory procedure, which they found was due to the Respondent's failure to comply with a general requirement.
- This case must therefore be remitted for determination of the appropriate remedy, that determination to include the question of contribution and consideration of the statutory increase to which the Claimant is entitled under section 31. In fact, we did not hear full submissions from the parties as to the basis on which this case should be remitted, that depending upon our conclusions on the appeal and cross appeal; and we will therefore grant liberty to apply in this respect if necessary and, failing agreement, as to the appropriate terms of the order to be drawn following this judgment.
