Appeal No.	 EAT/525/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 5 March 2002
Judgment delivered on 17 June 2002

Before
MR COMMISSIONER HOWELL QC
MR D CHADWICK
LORD  DAVIES OF COITY  CBE

WALKERS SNACK FOODS LTD	APPELLANT

MR E DEFTY	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MISS MELANIE TETHER
(of Counsel)
Instructed By:
Mr Guy Bredenkamp
Messrs Eversheds
Solicitors
Sun Alliance House
35 Mosley Street
Newcastle Upon Tyne
NE1 1XX	
For the Respondent	MISS HELEN GOWER
(of Counsel)
Instructed By:
Mr David Hesselberth
Messrs Ward Hadaway
Solicitors
Sandgate House
Quayside
Newcastle upon Tyne
NE1 3DX	

MR COMMISSIONER HOWELL QC:

1	This is an appeal by the employer, Walkers Snack Foods Ltd, against the finding of the Newcastle Employment Tribunal in Extended Reasons sent to the parties on 13 March 2001 that they had unfairly dismissed Mr Eric Defty, a technical manager who had been with them for over 28 years, on 30 March 2000 by reason of his conduct.  

2	Mr Defty was good at the technical aspects of his job and was, of course, extremely experienced.  His 1997 performance appraisal which was in evidence at the Tribunal recorded that “He is perceived by R & D personnel to add great value and be an asset”.  However, it was apparent from that and other documents and evidence before the Tribunal that he found it difficult to conform to the style and standards expected by the current management (the firm by this stage having been taken over by an American concern) who pulled him up repeatedly on what they saw as his disorganised way of working, dislike for routine and unwillingness to handle and provide information in the way they required.  The same document recorded: 

“Unfortunately his reputation amongst the plant team is not as positive.  He is not seen as a member of the team … 
His dislike for routine and failure to maintain standards of housekeeping and confidentiality of information are a liability …  He requires constant reminders and supervision which are not acceptable in a person at Level 7.
Eric is a plant resource and must act as such.  There will have to be a significant change in his behaviour and contribution to the plant if he is to retain his position. …”

3	Despite a better year the following year in which it was recorded that he had made an increased contribution to the plant performance with various technical improvements, by 1999 his performance was still found to be at fault, and on 13 October 1999 following a disciplinary hearing he was issued with a final written warning letter “for failure to reach the required standards for job performance”, the letter referring to a failure to provide cover over the Christmas 1998 period and “failure to meet a number of your objectives yet again”, stating expressly that:

“It is important that you understand that we expect an immediate improvement in your standard of performance.  This warning will be placed on your personal file and will last for a period of 10 months.  During this time your performance will be monitored.  Should you demonstrate any further failures to meet the Company performance standards during this time, this will result in the application of the next stage of the Disciplinary Procedure, that being dismissal.”

4	The single event which, according to the Tribunal’s findings which on this are in no way in dispute, actually triggered Mr Defty’s dismissal on 30 March 2000 was however his behaviour at a management meeting on 24 March 2000 when he lost his temper.  The purpose of the meeting had been to discuss the new fairness at work legislation; but it is beyond doubt that the emotional temperature of the meeting was raised very considerably above that relatively prosaic subject matter by the plant manager, Mr Francis, who as the Tribunal recorded, “took advantage of this meeting to report back on a recent visit by the company’s UK vice president of operations, Andy McCain” so that the meeting began with that report.  This relayed the information that Mr McCain had a low, and abrasively expressed, opinion of the line management at the plant, describing them as “a bunch of whinging non aligned managers”; which announcement by Mr Francis caused the meeting to become what the plant manager himself described as “relatively animated”, and the Applicant in his evidence as “very emotive”, with himself and other managers becoming angry and upset.  One of the other managers, Val Martin, had to leave the meeting altogether to compose herself.  It was common ground however that the Applicant’s contribution at this stage of the meeting had been positive.

5	It was in the atmosphere thus created that the relatively trivial incident which led to Mr Defty’s dismissal occurred. This took place when it transpired that the manager who was to lead the discussion on the fairness at work legislation, Louise Patterson, had not prepared an information pack for him as she had for other management members who were going to be responsible for training their own staff.  When Ms Patterson told Mr Defty there was no information pack for him, he became very upset as he felt that he was not being treated as part of a team, saying in a loud voice “Bollocks to team” or “team work” to indicate his disgust at this perceived failure by the Respondents to apply their own ideas of team working, and he then left the room.  Almost immediately Mr Defty realised that he had over-reacted, obtained a copy of the pack from someone else and set about seeking to apologise to those involved, which he continued to do the following day.  However by this time Mr Francis (who seems to have departed so that he was no longer present by the time of the incident) had had a report that Mr Defty had shouted at Ms Patterson, and formal disciplinary proceedings were instituted.  

6	On Monday 27 March Mr Francis suspended Mr Defty because of his outburst at the meeting and on the following day issued a letter requiring him to attend a meeting on Wednesday 29 March, though without saying expressly that this was to be a disciplinary hearing.  At that meeting, whose minutes record that it was “called following events of the management meeting”, Mr Francis went over what he understood about the incident and Mr Defty gave his own account, expressing regret, saying that his safety valve just went with the emotion that had built up at the meeting which others too had felt that they had to leave, and that he had apologised to the people involved for his outburst.  However, following an adjournment Mr Francis determined that Mr Defty had to be dismissed taking into account the still current final written warning.  That was confirmed by letter dated 29 March 2000 delivered to Mr Defty on the following day, which referred to the “final level warning for failure to reach the required standards of job performance” and saying that “at the disciplinary hearing held earlier today, it was decided that you had demonstrated further failure to meet the required job standards and that you should be dismissed”.  

7	In his Originating Application Mr Defty complained that his dismissal by reason of his conduct on 24 March 2000 was unfair, as it was unduly harsh and unreasonable taking into account all the circumstances and his longevity of service, and the final written warning had related to performance issues rather than conduct.  The Respondents in their Notice of Appearance gave only “capability” as the reason for the dismissal they had imposed, saying that Mr Defty can have been in no doubt that the behavioural aspects of his performance were causing the company serious concern, he had repeatedly proved himself to be incapable of attaining acceptable standards of behaviour for a senior manager at his level, and in the circumstances his dismissal had been fair. 

8	The Tribunal in their Extended Reasons issued to the parties on 13 March 2001, after recording the facts, as to which there is no significant dispute, first addressed what the actual reason for Mr Defty’s dismissal had been, since as the contentions of the parties showed this was not common ground.  The way the Tribunal dealt with this issue was the subject of argument before us on the appeal, and we record their findings on it in full:

“The reason for the dismissal
18	This was not a case where the reason for dismissal was clear, and the Tribunal spent some time considering the matter.
19	The respondent asserted that the reason was the applicant’s capability, citing a long history of problems, the fact that the applicant was the subject of a ‘live’ final written warning and that his behaviour had been one of the factors which had led to disciplinary action being taken against him.
20	The event which ‘triggered’ the dismissal was the applicant’s conduct at the meeting of 24 March.  John Francis investigated the matter and found that the applicant had said ‘Bollocks to team work’ and directed this comment at Louise Patterson.  If it was not for this event, the applicant would not have been dismissed on 30 March 2000.
21	This falls squarely under the heading of conduct.  The Tribunal do not however consider this to be a case where because the respondent has said that they dismiss for capability, the dismissal is unfair without any further investigations.
22	There is some overlap in this case which needs to be considered.  This however can be considered when determining the section 98(4) issue of fairness.
23	The Tribunal considered the possibility that capability was the real reason for dismissal as it was clearly an important factor in the dismisser’s mind.  The Tribunal, however considered that the actual time of dismissal and what directly caused the dismissal would enable the reason to be identified.”

9	The Tribunal then recorded that having found that the reason for dismissal had been the Applicant’s conduct, they then considered whether the decision to dismiss fell within the band of reasonable responses which a reasonable employer might have adopted when faced with this conduct by this particular employee.  They specifically stated in paragraph 24 of their Extended Reasons that:

“24  … In doing so we did not consider what we might have done in the same circumstances and we considered ‘equity and the substantial merits of the case’ bearing in mind the size and administrative resources of this large employer which has an on-site human resources manager and a national human resources department.”

They then said they considered whether the Applicant’s previous problems could be regarded as misconduct, and said:

“25	… Whilst there may be circumstances in which conduct and capability are difficult to distinguish, in this case, the Tribunal are satisfied that the overwhelming majority of matters which were the cause of disciplinary action against the applicant were pure performance issues which would fall under the heading of capability.
26	The ‘behaviour’ mentioned was not of the same kind as the outburst which led to dismissal.  … 
27	The Tribunal also considered that the respondents were to some extent trying to make the crime fit the punishment rather than the other way around.”

10	The Tribunal were critical of what they found on the evidence to have been attempts by the employers in the course of an appeal hearing to reconcile the discrepancy by extracting an admission from the Applicant that “conduct and behaviour was an overall part of performance”, saying that this was, of course, for the Tribunal to decide and was not a matter for the Applicant to concede.

11	They then found that they were not satisfied that the Respondents had taken the Applicant’s length of service into consideration, they had not offered him training to address the problems they had found in his performance or his behaviour, which with such a long-standing employee had contributed to the unfairness of the dismissal, and that there were subsidiary procedural faults.  They concluded that:

“33 … Taking a broad view of the facts of this case and considering the reason for the dismissal, the size of the employer and the applicant’s length of service the decision to dismiss was not within the band of reasonable responses which a reasonable employer might have adopted”.

12	Against that decision the employer appeals on the three principal grounds set out in their Notice of Appeal dated 23 April 2001 and developed on their behalf by Miss Tether in her skeleton argument and orally before us.  These are that the Tribunal erred in drawing a too rigid distinction between dismissal for conduct and for capability and holding that this was the former; they had wrongly held that the final written warning could not be taken into account, and in determining whether dismissal was a fair sanction, they had erroneously substituted their own subjective judgment for that of the employer. 

13	We have however concluded that the arguments of Miss Gower on behalf of Mr Defty are to be preferred, and we have not been persuaded that the Tribunal fell into error of law on any of these grounds.  It is, of course, established beyond argument that it is for the employer under section 98(1) Employment Rights Act 1996 to show to the satisfaction of the Tribunal that the actual reason for which the sanction of dismissal has been imposed on a particular employee is one of the potentially fair reasons under section 98(2); and in a case of disagreement as to what the real reason was, it is a matter of fact for the Tribunal to determine this for themselves on the evidence before them.  As the Tribunal recorded, they did spend some time considering this matter, and we think the passage quoted above from their Extended Reasons on this issue shows that they did so carefully.  As recorded in the judgment of the Appeal Tribunal in Sutton & Gates (Luton) Ltd v Boxall [1979] ICR 67 at 70 B to 71 C, there can be scope for confusion over the line between lack of capability and misconduct, and it is always important for Tribunals to distinguish in their own minds, on the facts of the particular case before them, how far the dismissal raises “a question of sheer incapability due to an inherent incapacity to function, compared with a failure to exercise to the full such talent as is possessed”.  Contrary to the submissions made to us on behalf of the employers in this case we think the Tribunal did have that important distinction well in mind, and were justified on the facts to which they referred in concluding that the true reason which caused Mr Defty to be dismissed from his employment on 29 March 2000 was, indeed, his outburst at the management meeting on 24 March, which was properly a matter of conduct.

14	The Tribunal’s finding that the references to “behaviour” in the earlier performance appraisal documents leading to the final written warning for “failure to reach the required standards of job performance” related primarily to Mr Defty’s perceived failure to conform to the way the current management required him to go about his work and co-operate with his colleagues, was in our judgment one it was open to them to reach on the material evidence before them to which we have been referred; and it both explains and justifies their conclusion that these perceived failures were “not of the same kind as the outburst which led to dismissal”.  Similarly their findings as to failure to take the Applicant’s length of service into consideration, or to offer training or assistance to remedy the perceived defects in his performance, were justified on the evidence and proper for the Tribunal to take into account in addressing the question they expressly asked themselves on fairness.  This was, as they said more than once, whether the decision to dismiss was within the band of reasonable responses which a reasonable employer might have adopted: not what the Tribunal themselves might have done in the same circumstances.

15	We do not think it is right to infer that the Tribunal held the existence of the final written warning should have been ignored altogether.  Its existence, given their justifiable finding that the conduct at issue was not just a repetition of previous performance failures for which he had been warned, was one, but no more than one, of the factors that had to be taken into account in addressing the question of reasonableness, and paragraphs 25 to 26 of the Tribunal’s Extended Reasons show, in our judgment, that they recognised this.  Nor in our judgment is it right to infer on any fair reading of the Tribunal’s Extended Reasons that they wrongly substituted their own view of the merits of this particular case for the standard to which they twice expressly referred, of the band of responses for a reasonable employer.  It is not for us to say what decision we would have reached on the issue of reasonableness under section 98(4) in this particular case, but it is sufficient, and we are satisfied, that the Tribunal’s conclusion applying the “band of reasonable responses” test was one they were entitled in the circumstances of this particular case to reach.

16	For those reasons, we dismiss this appeal.