Appeal No. UKEAT/0426/05/LA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 1 December 2005

Before
HIS HONOUR JUDGE RICHARDSON
MRS M McARTHUR FCIPD
MS B SWITZER

ROYAL LIVERPOOL CHILDREN’S NHS TRUST 	APPELLANTS

MRS T P DUNSBY 	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellants	MR RICHARD BRADLEY
(of Counsel)
Instructed by:
Messrs Mace & Jones Solicitors
Drury House
19 Water Street
Liverpool L2 0RP
	
For the Respondent	MR KEVIN McNERNEY
(Legal Officer (RCN))
Instructed by:
Royal College of Nursing Legal Department
Raven House
81 Clarendon Road
Leeds LS2 9PJ	

SUMMARY

Disability Discrimination: Justification & Unfair Dismissal: Reasonableness of Dismissal

Tribunal erred in law in its approach to justification (DDA) and s98(4).

HIS HONOUR JUDGE RICHARDSON

1.	This is an appeal by the Royal Liverpool Children’s Hospital NHS Trust against a judgment of the Employment Tribunal sitting in Liverpool, dated 8 June 2005.  By its judgment, the Tribunal held that Mrs Dunsby had been unfairly dismissed by the Trust and that, as the Tribunal put it, her dismissal was for a reason which related to an assumed disability and was not justified. 

The Facts
2.	Mrs Dunsby was employed by the Trust as a staff nurse assigned to the Paediatric Intensive Care Unit.  In that Unit she often undertook one-to-one nursing of critically ill children.  As the Tribunal found, periodic but repeated absences caused severe operational difficulties in the Unit.  Mrs Dunsby had, as the Tribunal said, an appalling sickness absence record.  The Tribunal, we have no doubt, meant by this to say that her rate of sickness absence for whatever reason was well above the level that the Trust could be expected to accept. 

3.	The Trust has a sickness absence procedure involving four stages.  As the Tribunal found, it was reasonable for the Trust to treat stage 1 as having been complied with in June 2003.  The Trust held a stage 2 meeting in October 2003, a stage 3 meeting in January 2004 and a stage 4 meeting on 1 June 2004.  

4.	By June 2004, Mrs Dunsby had been closely monitored for a year.  During that year she had lost 60 working shifts or 38% of her working time due to sickness absence.  The sickness absence had been for various reasons.  She had mentioned gynaecological problems but she had also mentioned personal stress, stress due to child-care difficulties and the like.  Her shift hours had been adjusted upwards in response to a suggestion that she had financial problems and then downwards again because of child care difficulties.  She had been referred to the Trust’s Occupational Health Service.  The doctor had reported that her absence was due essentially to problems in her own personal life.  On a later occasion, the doctor reported that she was fit for work but commented that past attendance patterns could often be a prognosticator for likely attendance patterns in the future. 

5.	At the hearing on 1 June, Mrs Dunsby said that some absences during 2003 were not merely due to headaches, as previously recorded, but migraines caused by her gynaecological problems.  It was said that her medication had changed and the migraines would not recur.  Her representative argued that in his view, the Trust would be acting in breach of the Disability Discrimination Act 1995 if it dismissed her.  

6.	Mrs Dunsby’s employment was terminated at stage 4 on the grounds of her unreasonable attendance levels.  The Trust’s letter dated 3 June 2004 recorded her varying reasons for absence; involvement of occupational health, the effort to support her by changing her shifts and the previous meetings at which she had been told that a sustained improvement was required.

The Tribunal Proceedings
7.	Mrs Dunsby presented a claim to the Tribunal alleging unfair dismissal, sex discrimination and disability discrimination.  A case management discussion took place on 15 October 2004.  At this hearing a course was taken of which this constitution of the Appeal Tribunal has no previous experience.  The course was avowedly undertaken to avoid the necessity of obtaining expert evidence at that stage in the proceedings.  We set out the direction which the Chairman gave.
“The first hearing in this case will determine 
(a)	the unfair dismissal claim;
(b)	on the assumption that the Applicant was a disabled person on all three bases
(i)	whether the implementation of procedures and the dismissal itself can be said to be for a reason related to disability;
(ii)	if so, whether the Respondents have established justification”
The three bases of disability alleged were gynaecological problems, migraines and depression.

8.	The parties were given an opportunity to object to this direction within seven days.  Neither party did so.  The Tribunal hearing therefore took place on 17 and 18 February 2005 on the basis of this direction.  As the Tribunal and the parties grappled with the practical implications of the direction, there was some confusion as to the issues to be determined, reflected in paragraphs 2 and 4 of the Tribunal’s reasons.

9.	Even in submissions before us today, there was no agreement as to what the direction was intended to achieve.  Mr Bradley submitted that the full hearing was to be conducted on the basis that all absences were assumed to be disability related, so that the hearing would focus on justification and the reasonableness of the decision to dismiss.  That would have simplified the task of the Tribunal at the full hearing, but is not what the direction actually says.  Mr McNerney, along with the Tribunal at the full hearing, clearly considered that the Tribunal had, in some way, to take into account whether absences were, in fact, disability related.  A difficult task, to say the least, if there was no finding or evidence as to the disability.

10.	The Tribunal reserved its reasons, held a Chamber’s day to consider them on 3 May 2004 and delivered a reserved judgment with reasons on 8 June 2005.  

The Disability Discrimination Act Claim
11.	The Tribunal noted that, of the many absences in the year from June 2003 to June 2004, two were said, on Mrs Dunsby’s behalf at the fourth stage meeting in June 2004, (but not before) to relate to migraines caused by drugs that Mrs Dunsby was taking for a gynaecological problem.  The Tribunal placed great weight on those two absences.  They had been recorded at the time as due to headaches.  The Tribunal noted that if the two migraines in August 2003 had been ignored as relating to a disability related condition, there would not have been a stage 2 review in October 2003 and in the review in June 2004 would have been stage 3, not stage 2.  Therefore, the Tribunal reasoned, but for the two migraines, she would not have been dismissed in June 2004.  The Tribunal set out its reasoning in paragraph 6.4 and paragraph 8 of its reasons on this question.  

12.	The Tribunal went on to reach the following conclusions in relation to the Disability Discrimination Act 1995 claim.  
“8.	It was reasonable of the respondent, on its analysis, to treat the October review as at stage two of the new sickness policy and that in January 2004, as at stage three, since it reasonably treated the June 2003 review as the first stage of the process.  But it is clear to us that once advised on 1 June 2004 that the sole triggers for the October 2003 review were disability related or possibly so, it must follow that they, and thus the stage two review, should be discounted, which means the claimant should have been given another “life”.  The fact that she was not, means that her dismissal was for a reason that related to an assumed disability – gynaecological problems.
9.	We next considered whether the treatment – the decision to dismiss – was justified, i.e. whether the reason for the treatment was material to the circumstances and substantial.  It was not because but for the disability related absences the claimant would not have been at risk of dismissal in June 2004”.

13.	On behalf of the Trust, Mr Bradley submits that this reasoning is fundamentally flawed.  He accepts that if one assumes that migraine related absences related to a disability, the Tribunal were correct to find that the Trust had treated Mrs Dunsby less favourably than it would have treated others who did not have that disability (see Clark v Novacold Limited [1999] IRLR 318).  But he says the question whether the treatment was justified was not properly considered by the Tribunal.  The Tribunal had in mind the question whether the employer’s treatment of Mrs Dunsby was for a reason which was material to the circumstances of the case and substantial (see Jones v Post Office [2001] IRLR 384).  But, he submits, the Tribunal has not answered that question.  He goes on to submit that there was only one possible answer to the question of justification, namely that the Trust did have a reason which was material to the circumstances of the particular case and substantial.  He prays in aid unfair dismissal cases such as International Sports Co v Thomson [1980] IRLR 340 and Rolls Royce Limited v Walpole [1980] IRLR 343 where the Appeal Tribunal overturned Tribunal decisions in sickness absence cases and substituted decisions of its own, that the dismissals were fair.  

14.	On behalf of Mrs Dunsby, Mr McNerney seeks to uphold the decision of the Tribunal.  He says that the Tribunal has correctly set out in paragraph 9 of its reasons the test for justification.  That is whether the reason for the less favourable treatment was material and substantial. He submits that the Tribunal must be taken to have applied that test and, in particular, that there must be read into paragraph 9 the considerations which have already been set out in paragraph 6.4 and 8 of the Tribunal’s reasons.  He submits that the Tribunal was entitled to take the view that the Trust could no longer properly rely on being at stage four of the procedure once it learned that the migraines were caused by medication for disability and that the reason for the migraines no longer existed.

15.	In our judgment, paragraph 9 of the Tribunal’s reasons either discloses a fundamental error of law or expresses the reasons for the Tribunal’s decision so defectively that it cannot stand.  The Tribunal says that the reason for the treatment i.e. the decision to dismiss was not material and substantial because “but for the disability related absences, the claimant would not have been at risk of dismissal in June 2004”.  In our judgment, there are two difficulties with this reasoning.  

16.	Firstly, it is the starting point for an enquiry into justification, not its conclusions.  The provisions of the Disability Discrimination Act 1995 do not impose an absolute obligation on an employer to refrain from dismissing an employee who is absent wholly or in part on grounds of ill-health due to disability.  The law requires such a dismissal to be justified so a Tribunal does not answer the question whether a dismissal is justified merely by saying that it was, in part, because the employee was absent on grounds of disability.

17.	Even if paragraph 9 is read along with paragraph 6.4 and paragraph 8, there is a second difficulty about the Tribunal’s reasoning.  The Tribunal has said that it must follow that if the migraines were disability related, the stage 2 review should be discounted.  This does not follow.  It is common ground that the sickness absence procedure operated by the Trust did not require the employer to disregard disability related absences.  In the experience of this Tribunal, it is rare for a sickness absence procedure to require disability related absences to be disregarded.  An employer may take into account disability related absences in operating a sickness absence procedure.  Whether by doing so he treats the employee less favourably and acts unlawfully will generally depend on whether he is justified or not.  It is precisely the question of justification that the Tribunal failed to consider in this case.  For those reasons, we have no doubt that the appeal in relation to the disability discrimination judgment must be allowed.  We will return later to the question whether we can substitute our own view.  

Unfair Dismissal
18.	The Tribunal held that the reason for dismissal was repeated short term absences and that that was some other substantial reason for dismissal and potentially fair.  The Tribunal therefore went on to consider the test in Section 98(4) of the Employment Rights Act 1996 namely whether it was reasonable for the Trust to dismiss Mrs Dunsby, having regard to equity and the substantial merits of the case.  The Tribunal’s reasoning was as follows:
“The Claimant had an appalling attendance record which had the potential to cause the respondent significant operational difficulties.  The respondent was entitled to be cynical as to her failure to disclose her indisposition on 18 April 2004; but, Mr Corrin’s conclusion that she had demonstrated a lack of commitment by cancelling a proposed date for a stage four interview hearing due to annual leave, was unreasonable.  Further, it was not reasonable for the respondent to treat disability related absences as part of the ‘totting up’ review process.  Thus she would have been at stage three in June 2004 not stage four, and so would not have been at risk of dismissal.  In these circumstances her dismissal was unfair”.

19.	Mr Bradley submits that this reasoning is flawed.  He submits that the Tribunal has taken as fact that Mrs Dunsby’s reasons for absence were in part related to disability when this remains to be established and that the Tribunal has also, in this respect, made a similar error to the one it has made in respect of disability discrimination.  

20.	Mr McNerney submits that the Tribunal did not err in law and was not perverse in concluding that the Trust acted unreasonably in including in a “totting up” process a stage 3 review absences which related to disability, especially since the employer was told the reasons for these absences prior to dismissal.  

21.	We conclude that, once again, the Tribunal’s reasons either express a fundamental misapprehension about the law or are so poorly expressed that they cannot stand.  The Tribunal state that it was not reasonable for the Trust to treat disability related absences as part of the totting up review process as though that proposition were self-evident.  But there is no absolute rule that an employer acts unreasonably in treating disability related absences as part of a totting up review process or as part of a reason for dismissal on grounds of repeated short term absence.  

22.	If the Tribunal considered that it was unreasonable to do so in this case, it should have said why.  It was, in our judgment, by no means self-evident that the Trust acted unreasonably in treating the migraine related absences as part of the totting up process.  Those absences were described contemporaneously as headaches; there were no other migraine or other headache related absences in the whole of the absence record.  The assertion by a Union representative for the first time at the fourth stage that just two absences nearly a year before out of a whole pattern of absences should be left out of account does not necessarily make it unreasonable for the Trust, looking at the whole pattern, to dismiss.  As we have said, there is no rule that an employer, in operating a sickness absence procedure, must leave out of account her disability related absences.  

Substituting Our Own Decision  
23.	It is a rare case in which the Appeal Tribunal can substitute its own decision on questions of disability discrimination and fairness of dismissal for that of the Tribunal.  We have carefully considered whether it is appropriate for us to do so in this case.  We conclude that it is not.  Firstly, there is the point made by the Tribunal concerning Miss Corrin’s conclusion that Mrs Dunsby had demonstrated a lack of commitment by cancelling a proposed date for stage 4 review hearing due to annual leave.  We find difficulty with this conclusion of the Tribunal.  The Tribunal do not say how Miss Corrin’s conclusion impacted on the decision to dismiss – indeed, the Tribunal found that the reason for dismissal was repeated short term absences.  Although we are doubtful about this part of the Tribunal’s reasoning, it is hard for us, not having seen or heard the witnesses, to substitute any conclusion of our own.  Moreover, although we see the evident strength of the Trust’s case that periodic and repeated absence cause severe operational difficulties for the unit and we note the Tribunal’s finding that there was an appalling absence record, we find it difficult, without ourselves seeing all the underlying materials or having the sickness absence procedure or seeing or hearing the witnesses and the detailed argument, to be certain that the only possible outcome was in favour of the Trust.  Therefore, this case must be remitted for rehearing.  

24.	We have no doubt that the hearing should be before a freshly constituted Tribunal.  The freshly constituted Tribunal should, in our judgment, not have a full hearing until there has been a further case management discussion below.  If the further hearing is still to take place on assumptions, there must be the clearest possible understanding and agreement of what those assumptions are and how they are to operate.  We do not wish to lay down a rule that it is impossible for a hearing to take place on an assumption about disability, but such a course is, in our judgment, fraught with danger.  If there is to be an issue at the full hearing as to whether some or all of the absences were disability related, it is a very difficult task for the Tribunal to conduct a hearing without being in the position to make findings or hear evidence on the nature of the disability.  Of course, if there were to be any question (as it appears there was not in this case) whether reasonable adjustments were required prior to any decision to dismiss, it would be impossible to hold any hearing on assumptions.  While therefore we do not absolutely rule out the possibility of a hearing on assumptions, we caution against it and we say that it should be undertaken only with the clearest possible agreement as to what the issues are to be at the main hearing and how the main hearing is to be conducted.