Appeal No. UKEAT/0601/11/KN
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At
the Tribunal
On
25 April 2013
Judgment handed down on 6 June 2013
Before
HIS
HONOUR JUDGE PETER CLARK
MR I EZEKIEL
MR D NORMAN
CROYDON
HEALTH SERVICES NHS TRUST (FORMERLY
MAYDAY HEALTHCARE NHS
TRUST) APPELLANT
MR G BROWN RESPONDENT
Transcript of Proceedings
JUDGMENT
SUMMARY
UNFAIR DISMISSAL
Reasonableness of dismissal
Contribution
PRACTICE AND PROCEDURE - Perversity
Employment Tribunal finding of unfair dismissal due to lack of
reasonable investigation, applying Burchell, and procedural
failings. Decision not perverse; not a case of substitution of view by ET.
Perversity not made out.
However, ET failed to address issue of contribution raised before
it. At request of parties EAT made its finding of 25 per cent contribution
rather than remitting the point.
HIS HONOUR JUDGE PETER CLARK
Introduction
1.
The parties before the London South Employment Tribunal in this matter
were Mr Gary Brown, Claimant and Croydon Health Services NHS Trust, Respondent,
as we shall describe them. This is the full hearing of an appeal by the
Respondent against the Judgment of an ET chaired by Employment Judge Silverman,
sitting over 6 days, upholding the Claimant’s complaint of unfair dismissal
brought against the Respondent, his former employer and awarding him
compensation totalling £43,300. That Judgment, with reasons, was promulgated
on 22 July 2011.
Background
2.
The Claimant was a long serving employee of the Respondent, his
employment having commenced on 19 April 1982 and ended with his summary
dismissal by Mr Ralph, Director of Estates and Facilities, on grounds of gross
misconduct, on 2 March 2010. The Claimant was a Project Officer in the
Respondent’s Estates Department. Following an investigation by the civilian
police and Mr Mark Howard, an NHS counter fraud specialist, known as Operation
Kateri, an investigation was carried out by Helen Daniels leading to the
Claimant facing three charges of misconduct arising out of his relationship
with Trevor Randall, a contractor and his brother John Brown and his son (the
Claimant’s nephew) Paul Brown. First it was said that the Claimant coerced Mr
Randall to employ John and Paul Brown on work for the Respondent. Next, that
he, the Claimant, improperly authorised invoices submitted by his brother’s
firm, Indecs, without supporting documentation. Thirdly, that he acted
inappropriately in assisting Indecs in the tendering process operated by the
Respondent. Mr Ralph found all three charges made out. An appeal against
dismissal was rejected by a panel chaired by Ms Smith. She did not give
evidence before the ET but another panel member, Ms Alagaratnam, did.
The ET decision
3.
The ET rejected the Claimant’s case that he was dismissed for making a
protected disclosure but upheld the complaint of ‘ordinary’ unfair dismissal
under s.98(4) Employment Rights Act 1996. The ET found that the reason
for dismissal related to the Claimant’s conduct but held that it was unfair,
principally because, in the view of the ET, the Respondent had not carried out
a reasonable investigation into the charges against the Claimant and in
addition on procedural grounds. They went on to find that no deduction should
be made under the Polkey principle, but say nothing about the
issue of contribution by the Claimant to his dismissal, an issue identified in
the list of issues agreed between the parties and on which the ET was addressed
in oral closing submissions by Mr Panesar representing the Respondent. The ET
went on to assess compensation in the total sum of £43,300, including the basic
award, compensatory award and a 10 per cent uplift under s.207A Trade Union
& Labour Relations (Consolidation) Act 1992.
The appeal
4.
It is now well established that in a case of unfair dismissal the ET
must not substitute its view for that of the employer. The test is whether the
employer acted within the range of reasonable responses. That test applies to
procedural considerations, including the reasonableness of the employer’s
investigation, as well as substantive matters including the appropriateness of
the sanction, here dismissal: see the cases cited in Sainsbury v Hitt
[2003] ICR 111 (CA).
5.
The EAT must approach with caution appeals based on the perversity
ground, as explained by Mummery LJ in Yeboah v Crofton [2002] IRLR 634. Just as it is wrong for the ET to substitute its view for that of
the employer in a case such as this, equally it would be wrong for the EAT to
substitute its own judgment for that of the ET under the guise of perversity:
see Bowater v NW London Hospitals NHS Trust [2011] IRLR 331,
para. 19, per Longmore LJ. It would appear that I fell into error in that way
in Graham v DWP [2012] IRLR 759 (CA). In considering the
perversity ground(s) in the present appeal advanced by Mr Panesar we are
reminded by Mr Sullivan of the formulation of Burton J in Chambers-Mills
v Allied Bakeries (UKEAT/0165/08/LA, 18 November 2008) para. 9, where
he said:
“It is of course not enough for a tribunal to be in factual
error; far from it, it is required before this tribunal can interfere, that
there be an error of law. There can in rare circumstances be such a
concatenation of errors of fact, or so gigantic a howler, that such error might
amount to perversity, but perversity, as has been made clear in so many recent
authorities in the Court of Appeal, is a very narrow ground.”
Unfair dismissal
6.
Mr Panesar submits that in finding the dismissal unfair the ET was
guilty of substituting its view for that of the Respondent employer and further
that that conclusion was legally perverse.
7.
On the charge of the Claimant coercing Mr Randall to employ his
relatives, Mr Panesar submits that it was for the Respondent to form a view of
the credibility of the wholly conflicting accounts given by the Claimant and Mr
Randall, who gave evidence at the disciplinary hearing before Mr Ralph and was
there cross-examined both by the Claimant and his trade union representative.
It was not for the ET to reach its own conclusion as to the credibility of the
disputed versions.
8.
All this true, however we are not persuaded that this ET fell into the
substitution trap. On the contrary, applying the Burchell test
they held (paras. 41-44) that the Respondent had failed to carry out a
reasonable investigation, specifically, into the Claimant’s case that Mr
Randall had an ulterior motive for accusing the Claimant of coercion, namely
that the Claimant believed that he, Randall, had been guilty of fraudulent
activity and had as a result excluded his company from the tendering process.
As Mr Sullivan points out, in his dismissal letter dated 5 March 2010 Mr Ralph
acknowledges that the Claimant contended that he had raised the issue of Mr
Randall’s integrity with his line manager, Bob Woodham. However, Mr Ralph does
not appear to have taken this up with Mr Woodham; nor did the appeal panel. Both
the disciplinary and appeal hearings proceeded on the basis of Ms Daniels’
investigation and the evidence and submissions which they received. There was
no additional enquiry by either disciplinary authority.
9.
In reality, the critical question for us is whether the ET’s finding
that the Respondent failed to carry out a reasonable investigation into the
three charges levelled against the Claimant (it was the Respondent’s case that
any one or more of the charges amounted to gross misconduct entitling the
Respondent to dismiss him) is sustainable on appeal, applying the strict test
to which we have earlier referred. Whilst Mr Panesar succeeds in landing some
blows in his challenge to the ET’s findings; by way of example the finding at
para. 47 that the Respondent ignored the evidence of three people that the
Claimant was not involved in the tendering process appears to be contrary to
the agreed position between the parties that he was, so that bells began to
ring as we absorbed Mr Panesar’s careful submissions, having then had the
advantage of Mr Sullivan’s detailed response we were not persuaded that this
was a case giving rise to the full concatenation which causes us to interfere.
The egg is sufficiently good, albeit in parts.
10.
We are further satisfied that, in addition to further enquiries of
witnesses, including Mr Woodham and a former Project Officer, James Brown (no
relation), the ET was entitled to conclude that the Respondent ought to have
disclosed to the Claimant the Operation Kateri file (para. 59) and to be
concerned that the main players in the forthcoming disciplinary process all met
to review the outcome of the police and counter fraud investigation on 25
September 2009 (para. 58).
11.
In short, we see no basis in law for interfering with the ET’s finding
of unfair dismissal.
Contribution
12.
On this aspect of the appeal we are persuaded that the ET fell into
error. We have earlier referred to the agreed list of issues and Mr Panesar’s
closing argument on this aspect of the case. Mr Sullivan submits that it is
implicit in the ET’s reasons that the contribution argument failed; we are
unable to draw that inference, particularly in light of the ET’s finding of
fact (para. 50) that the Claimant authorised payment of invoices submitted by
his brother/Indecs which were unsupported by any documentation. We have been taken
to a comparison between Indecs invoices approved by the Claimant and a Randalls
invoice with supporting documentation. The ET accepted that the Claimant
should not have approved the Indecs invoices without supporting documents.
Although there was no written instruction or policy to this effect there was
extensive evidence from employees as to the practice.
13.
At para. 63 the ET observe that a proper investigation might have
resulted in a finding that the Claimant should have ensured that he was not
involved in authorising payments to his brother/Indecs, however that is a
different point from his authorising payment without the necessary
documentation. Further, in that paragraph the ET expressly address the quite
separate Polkey question only.
14.
The question which then arises is what is to be done with the
contribution issue? We proffered three options to the parties: remit the
question to the same or a different tribunal or resolve the matter ourselves.
Both parties expressed a preference for the third option. We are content to
take that course, which is proportionate in the interests of saving further
time and expense and in line with the approach of Jacobs LJ in Buckland v
Bournemouth University [2010] IRLR 445, paras. 57-58.
15.
Loyal to the ET’s finding at para. 50 we find that in approving Indecs
invoices without supporting documentation the Claimant was guilty of culpable
or blameworthy conduct which materially contributed to his dismissal. In our
judgment the appropriate level of contribution is represented by a 25 per cent
reduction in both the basic and the compensatory awards.
Uplift
16.
Mr Panesar raised a faint argument that the ET failed to give adequate
reasons for their finding (para. 83) of a 10 per cent uplift for breach of the
ACAS Code. The range, under s.207A of the 1992 Act is 0-25 per cent. The ET
settled on 10 per cent. Looking at their reasons as a whole that reflected the
procedural failings which they had earlier identified. We see no force in this
submission.
Disposal
17.
It follows that the ET finding of unfair dismissal is affirmed.
However, the compensation awarded is subject to a 25 per cent deduction in
respect of the Claimant’s contributing conduct as we have found it to be.
Consequently, the overall award of compensation is reduced to £32,475.
