Appeal No.UKEAT/0713/04/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 December 2004
Judgment delivered on 7 February 2005

Before
HIS HONOUR JUDGE MCMULLEN QC
MR J MALLENDER
MR S M SPRINGER MBE

MS S R LUCAS	APPELLANT

CHICHESTER DIOCESAN HOUSING ASSOCIATION LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR TONY GREENSTEIN
(Representative)
Instructed by:
Brighton & Hove Unwaged Advice & Rights Centre
4 Crestway Parade
The Crestway
Brighton
BN1 7BL	
For the Respondent	MR BENJIMIN BURGHER
(of Counsel)
Instructed by:
Messrs Devonshires Solicitors
Salisbury House
London Wall
London
EC2M 5QY	

SUMMARY

Public Interest Disclosure

On the evidence and on the chronology presented to the Employment Tribunal there were no grounds for finding that the Claimant’s protected disclosures were not made in good faith.  The Tribunal failed to make a finding as to the reason for dismissal and that issue was remitted.  The Tribunal did not err in its approach to the construction of the notice term in the contract of employment.

HIS HONOUR JUDGE McMULLEN QC

1.	The Public Interest Disclosure Act 1998 inserted provisions into the Employment Rights Act 1996, protecting an employee, who has made a disclosure, in the public interest, to his or her employer, from dismissal and from suffering a detriment short of dismissal.  A key element is that the disclosure should have been made in good faith.  The issue in this appeal is whether such protected disclosures were made in good faith, or out of spite.

2.	The judgment represents the views of all three members, who read what appeared to us to be the relevant papers.  We will refer to the parties, in the language of the 2004 Regulations, as the Claimant and Respondent.  The parties disputed many of the steps in the preparation for this appeal.  The documents are voluminous.  The Claimant’s essential reading list consists of 75 pages, yet the Respondent’s of only 25.  The Notice of Appeal of 11 pages is supported by a Skeleton Argument of 20 pages and four appendices.  I gave directions sending this appeal to a full hearing and in the meantime conducted a meeting for directions.  The parties have agreed little.  So it is that we have been provided at short notice with the Chairman’s manuscript notes which, including Witness Statements, extend for over 60 pages.  The hearing of the appeal began after several interim applications.  The sense of outrage felt by the Claimant has been readily apparent, and we have been at pains to deal with the submissions in a measured and proportionate way.

Introduction

3.	It is an appeal by the Claimant in those proceedings against a Reserved Decision of an Employment Tribunal sitting over six discontinuous days and a day in chambers at Brighton, Chairman Mr M J Davy, registered with Extended Reasons on 29 July 2004.  No one has explained why better case management could not have allocated sufficient hearing time to this unacceptably fragmented case, taking almost six months.  The Claimant was represented there and here by Mr Tony Greenstein of the Brighton Unemployed Workers Centre.  The Respondent was represented here by Mr Benjimin Burgher, and there by different Counsel.  The Tribunal and we ourselves were asked to take account of that apparent inequality of arms.  Before the appeal, Mr Greenstein was assisted by Public Concern at Work, whose Director, Mr Guy Dehn, also assisted him at the appeal hearing.  

4.	The excellent work done by Public Concern at Work in relation to whistle-blowing was acknowledged by the Court of Appeal in Street v Derbyshire Unemployed Workers’ Centre [2005] ICR 97.  That judgment approved a judgment I gave on behalf of the EAT which was relied on by the Employment Tribunal whose hearing was completed prior to the judgment of the Court of Appeal: [2004] ICR 213.  We have been referred to the fifth report of the Shipman Inquiry, Chairman Dame Janet Smith DBE, Volume 1 Chapter 11: Safeguarding Patients: Lessons from the Past – Proposals for the Future, where Dame Janet records the evidence of Mr Dehn and discusses the approach to PIDA in the context of the judgment in Street.  This is a very helpful guide to the public policy, which informs tribunals’ handling of this important subject.

5.	The Claimant contended she had been unfairly dismissed by reason of having made a protected disclosure.  She also claimed that she had been wrongfully dismissed in that she had not been paid for the whole of a fixed-term contract upon which she said she was engaged.  The Respondent denied dismissing her for having made a protected disclosure and contended she was not an employee.

6.	The Tribunal upheld the Claimant’s submission that she was an employee and upheld in part her claim of wrongful dismissal, awarding her one month’s pay in lieu of notice by way of damages.  It rejected her claim of unfair dismissal.

7.	The Claimant appeals against the finding that she was not unfairly dismissed.  She had less than 12 months’ service and so a claim of “ordinary” unfair dismissal could not proceed.  She also contends that the correct assessment of damages should be based upon a finding that she was engaged on an 18 month fixed-term contract, terminated after six months, and is entitled therefore to 12 months’ damages.  

8.	A dispute also arises out of the Respondent’s cross-appeal.  There is no appeal against the finding that the Claimant was an employee or that she was entitled to one month’s notice, pursuant to a monthly “roll-over” contract.  The Tribunal ordered the Respondent to pay £1,296 which was based on an 18 hour week and the Respondent paid this.  However, it contends that the Claimant received notice of termination on 17 July 2003 and continued to work with pay until 31 July 2003 so the exposure to damages is in respect only of two weeks’ pay.  As to this, the Claimant contends that the Respondent is estopped from raising this matter now.  This is because both sides sought a review of the Tribunal’s Decision and both sides effectively agreed to drop hands provided the Claimant kept the £1,296 which had been paid to her.  In the light of that agreement, and having examined the correspondence relating to it, we are satisfied that it would be unjust for the Respondent to raise that matter now and we will dismiss the cross-appeal.  The matter was effectively compromised by a pragmatic approach taken by both parties in order to avoid yet further litigation.  We will give effect to that.

The legislation

9.	Section 94 of the Employment Rights Act 1996 gives an employee the right not to be unfairly dismissed.  Section 98(1) requires an employer facing a claim of unfair dismissal to show the reason or principal reason for the dismissal and that it falls within the potentially fair reasons set out in section 98(1) and (2).  Section 103A provides one of the categories of what is conveniently known as an automatically unfair dismissal:

“103A	Protected disclosure
An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure.”

The requirement for one year’s continuous employment does not apply to an unfair dismissal claim made under section 103A: see section 108.

10.	Part IVA of the Act deals with protected disclosures as mentioned in section 103A.  Its protection applies to workers who are more broadly defined than employees, and in any event on the finding by the Tribunal the Claimant was an employee, the distinction does not matter.  A “protected disclosure” is a “qualifying disclosure” and a “qualifying disclosure” is defined as follows so far as is relevant for our appeal:

“43B Disclosures qualifying for protection
(1)	In this Part a “qualifying disclosure” means any disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show one or more of the following- 
…
(b)	that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject.”

11.	Where the recipient of the material disclosed is an employer section 43C applies:

“43C Disclosure to employer or other responsible person
(1)	A qualifying disclosure is made in accordance with this section if the worker makes the disclosure in good faith- 
(a)	to his employer.”

The facts

12.	It is not now in dispute that the Claimant was engaged on a contract of employment.  The relationships were described as follows:

“1.	As a preamble to the Reasons, it is helpful if the relationship between the parties is set out very briefly.  The Brighton & Hove Corporation, as part of an urban renewal programme, created a department designated eb4u and the Deputy Project Director of eb4u at the material time was Sean Hambrook, who gave evidence to the Tribunal.  eb4u sponsored a project for increasing awareness of information technology in east Brighton and provided the funding for that project by way of grant.  The management of the project was placed with Chichester  Diocesan Housing Association Ltd (CDHA), whose Business Development Director was Rhys Daniel, who also gave evidence to the Tribunal.  It was apparent from the evidence before the Tribunal that apart from ensuring that targets were met and expenditure monitored, the input from CDHA Ltd (the Respondent) was minimal.  The Respondent took a percentage management fee and Mr Daniel did not expect the Respondent to undertake more work than indicated above.
The Respondent placed a contract for the work itself with Jill Mercer, who describes herself as a Project Development Consultant.  She was responsible for two contracts, namely, ICT Co-ordinator Project and the World Web Wise Project, both of which were funded by eb4u.  There was a formal partnership agreement between Brighton & Hove Corporation and the Respondent within the bounds of which Ms Mercer was expected to operate.
…
3.	The Applicant was engaged by Ms Mercer after responding to an advertisement (page 36) for a post described as an “ICT Co-ordinator for eb4u to establish a network forum for local ICT providers, work with our programmer to design an online database and implement eb4u’s ICT strategy”. A contract brief was delivered to the Applicant (page 37) and she attended an interview, in consequence of which she was appointed. 
4.	The Applicant was part of a small team whose functions were never properly described to the Tribunal and whose method of recruitment does not appear, in every case, to have been as formal as that of the Applicant.”

13.	The advertisement to which the Claimant responded and the contract brief provided as follows:

“The contract is for a maximum of 18 months and based on an hourly rate of £16.00 to £18.00 depending on level of experience and work delivered.  We anticipate for the first 3 months of the contract, time required would be approximately 20/25 hours per week, reducing to 16/18 hours p.w. to December 2003.  The consultant will be contracted on a self-employed basis and progress at delivery will be monitored and evaluated quarterly.”

14.	The Tribunal noted that the draft contract given to the Claimant provided for one month’s notice.  It held that the contract was not for a fixed term, as the Claimant claimed, but on a rolling month to month basis.  

15.	The particular set-up in which the Claimant worked was the subject of firm criticism by the Tribunal, for it said this:

“19.  It will probably be self-evidence from the Extended Reasons given above that the Tribunal were deeply concerned that a project funded by public money should have had so little supervision by the funding agency and the Project Manager.  If the bid made by the Respondent had been too competitive to allow for more supervision than CDHA were prepared to undertake, then they should not have made the bid in the first place and it must be incumbent upon an agency dispensing public funds to ensure that the management processes in place are satisfactory.  It is also a matter of concern that the contract’s implementation was placed in the hands of people who really did not seem to have the background and experience to administer a project involving a substantial sum of public money.  There are occasions where it is appropriate for Tribunals to make recommendations and in this case the Tribunal would strongly recommend that Brighton & Hove Corporation look very seriously at the whole question of accountability in this kind of undertaking.
It has to be said that there was no evidence before the Tribunal which would justify a finding that any person had acted dishonestly in the handling of public funds, but there is a great deal of evidence which justifies a lack of confidence in the way in which this project was administered.”  

16.	In due course the Claimant raised concerns which were summarised and resolved by the Tribunal as follows:

“12.  The contentions of the Applicant are twofold.  Firstly, that monies from the grant to the ICT Project were being expended on the WWW Project and that premises for the ICT Project were rented outside the east Brighton area contrary to the requirements of the partnership agreement.  The Applicant contends that she made this information known to Mr Rhys Daniels, who reported it back to Ms Mercer and, in consequence of a discussion between Ms Mercer and Mr Daniel, the Applicant’s employment was terminated.
The Tribunal finds that Ms Lucas’ allegations were substantiated.”

It also found that Ms Mercer was in breach of duty and there were difficulties in the working relationship between the Claimant and Ms Mercer.
17.	The Tribunal approached the Claimant’s contention that she made protected disclosures on 19 June and 3 July 2003 by the following findings:

“15.  In the course of this deeply worsening relationship Mrs Lucas had arranged a meeting with Mr Rhys Daniel on 19 June 2003.  Essentially, it appears that she went there to inspect some of the project files which were in his office and, having inspected them, she claimed that she had not been told about certain invoices relating to the Jew Street office and said that she was going to speak to an officer at eb4u about this.
On 3 July 2003, the Applicant went to see Sean Hambrook and asked to speak to an Appraisal Officer.  She raised the issue of the reduction in her hours but to Mr Hambrook’s recollection she did not raise the issue of the rent for Jew Street, nor the fact that the premises at Jew Street were outside the eb4u area.”

18.	Having evaluated the evidence of Mr Daniel, Mr Hambrook and the Claimant, and Ms Mercer’s subsequent notes, it plainly preferred the Claimant’s and held that “a disclosure in the terms mentioned in paragraph 12 above was made by the [Claimant]”.  Thus the first disclosure, as the Claimant contends, took place on 19 June 2003.  

19.	The Tribunal made a finding as to why she did this and said as follows:

“[The Claimant] made it perfectly clear in her evidence that the reason for making the disclosure was that having been deprived of hours she believed she had been promised in order to bring the project within budget, she objected bitterly to the use of that budget in a way which she deemed to be a breach of the contractual relationship.”

The Tribunal relied in support of that finding on what Ms Mercer said to the Claimant in a letter of dismissal dated 15 July 2003, received on 17 July 2003.  This is described by the Tribunal as the reason given for the dismissal but it made no finding as to what in its judgment was the reason.

20.	We have been taken in detail to the Chairman’s notes of the evidence of that meeting on 19 June 2003 and we found no record of a linkage between the disclosure and the Claimant’s unhappiness about her hours, which would support the finding cited in paragraph 19 above. Far from it being “perfectly clear” there is no note of this.

21.	Shortly after this meeting the Claimant met Ms Mercer and Ms Elaine Nash, the Appraisal Officer of eb4u, on 23 June 2003.  This meeting features in the Claimant’s Originating Application.  She said the appraisal meeting went extremely well and Ms Nash asked the Claimant to extend her work.  Then, in the absence of Ms Nash, Ms Mercer 

“..came up to me in the garden and said ‘I’m extremely angry with you’.  I asked why and she said, ‘You’ve been knocking me in public’.  I asked what she meant.  She told me that she had had a phone call from Rhys Daniel and that his words were that he had a member of his team in his office who was causing problems.  I asked her why she hadn’t told me that the money for the Broadband service for the Jew Street office was coming out of ICT money.  She simply said ‘I forgot’.”

This meeting is dealt with in the Claimant’s Witness Statement (paragraph 92).  A note of the meeting attended by the three officers, taken by Ms Nash and sought to be adduced by the Claimant (Appendix 3 of the Skeleton) deals also with another issue and this is recorded:

“No issues over performance – too early to say at this stage…”

22.	There was no cross-examination of the Claimant’s evidence on this meeting.  Ms Mercer in her evidence said that in order “to pre-empt any trouble I raised the issue…” ie the two matters disclosed by the Claimant.  Ms Mercer complained that the Claimant had raised these issues with Mr Daniel before raising them with her.  In her account, the discussion continued on friendly terms and the issues seemed to be resolved.  According to the Chairman’s notes she was asked some questions about this meeting but essentially her account was not challenged.  The next day, according to the Claimant’s account, again unchallenged, Mr Daniel told the Claimant that he had told Ms Mercer of the Claimant’s comments in order that “no dirty laundry was aired in public”. 

23.	The Tribunal does not mention the events of 23 and 24 June 2003.

24.	As we have cited above from paragraph 15 of the Tribunal’s reasons, the Tribunal disbelieved Mr Hambrook’s account of the disclosure on 3 July 2003, but it seems to have found that the Claimant also mentioned her hours.  

25.	On 15 July 2003 Ms Mercer dismissed the Claimant in the following terms:

“For some time now it has been evident that the relationships between yourself and other members of the World Web Wise team are becoming strained.
This situation is now having an adverse effect on the delivery of the ICT Co-ordinator Project.
We have had several discussions in an attempt to improve matters, but recently have reached an impasse – you have refused to meet to put together the latest eb4u quarterly return and claim.
As the person responsible to CDHA, the host organisation, and eb4u, our funders, for the World Web Wise project and ICT Co-ordinator project, I regret that I have to bring you contract to an end.
I hereby give notice that your arrangement with World Web Wise will end with effect from the end of July this year.  Provided we can get together quickly to agree a work programme up to the end of the month, we will pay your hours for July.
Please ring me to arrange a time to meet.”

It will be noted that there is no reference there to the Claimant’s complaints about the hours she was working.  This letter provoked a further complaint from the Claimant that the reason for her dismissal was Ms Mercer’s “paranoia and spite” and “vindictive behaviour”.

26.	Turning then to the disclosure which the Tribunal describes as “the statements”, the Tribunal found as follows:

“The Tribunal upon the evidence found that the statements were made to spite Ms Mercer and not with the intention of deploying an honest intention in good faith.  Quoting from the decision in Street v Derbyshire Unemployed Workers’ Centre “It is not…the purpose of the Public Interest Disclosure Act to allow grudges to be promoted and disclosures to be made in order to advance personal antagonism.  It is, as the title of the statute implies, to be used in order to promote the public interest.  The advancement of a grudge is inimical to that purpose”.”

For that reason the Tribunal held that her claim did not meet the requirements of section 103A.

27.	Throughout this history is said to run the thread of the Claimant’s hours.  It will be recalled that the Claimant began on 25 hours a week which would continue for three months.  The Tribunal noted that Ms Mercer considered that the hours should go down in April 2003.  But that is after only two months.  In any event the Tribunal recorded the agreement between Ms Mercer and the Claimant that she should continue at 25 hours for May, yet in mid May, as the Tribunal notes, Ms Mercer was recording an agreement as to 20 (not 25) hours.  The Claimant’s response to a colleague was as follows:

“Yes reducing the hours was written into the project bid.  When I accepted the job – I did not fully appreciate how this would make me feel.
One, of course is the reduction in wages, and let’s face it that’s crap.
But also there came a deep sense that my job is just a sham – what can you do in two days a week?  It felt like there was no real commitment to the post, its value, or its purpose other than to provide WWW team with some work.
What is more, every other co-ordinator is full-time employed and in a very different capacity to my employment terms.”

This was dated 30 May 2003, but the Tribunal noted that the Claimant’s belief was that she had negotiated a four month extension at 21 hours.  On that basis it would in September 2003 have reduced to between 16 and 18 hours.  Thus it was that the Claimant was surprised to receive an email from Ms Mercer, telling her that for July and August her hours were to be reduced to 16.  The Claimant sought an explanation and in response to an invitation, replied that “given your level of hostility towards me, I am unwilling to attend the team meeting today”.  The Claimant’s evidence as recorded in the Chairman’s notes was as follows:

“Reducing hours for July and August to 16 hours… Gill had every right to do this – I was surprised by the method.”

On the basis of the Claimant’s response to the hours issue, the Tribunal held that her disclosures were made out of spite and antagonism towards Ms Mercer and thus were not protected by section 43C for they were not made in good faith.
The Claimant’s case

28.	On the contract point, the Claimant contends that she was engaged on a fixed-term for 18 months and was entitled to the balance by way of damages.

29.	On the good faith point, it is contended that the Tribunal’s Decision was perverse and that the chronology indicates a protected disclosure without reference to the dispute over the hours which is said to motivate the disclosure.  An examination of the e-mail traffic between the Claimant and Ms Mercer does not reveal a fraught relationship in the terms the Tribunal described.

The Respondent’s case

30.	It is contended that the correct analysis of the contract is that it provided a month by month rolling contract, terminable on a month’s notice.

31.	As for perversity, the high threshold required for this to succeed on appeal is not met.  In a fact-sensitive area such as determining motive and good faith, the Tribunal’s judgment should be left alone.  

32.	It is contended that if the Decision of the Tribunal on this issue were overturned, the matter would have to be remitted, for the Tribunal did not make any finding as to the causation of the dismissal.

The legal principles

33.	The correct approach to cases under the protected disclosure provisions has been laid down by the Court of Appeal in Street.  It is for an employment Tribunal to assess on a broad and common sense basis whether a particular disclosure meets the requirements of section 43C.  It is open to a tribunal to consider whether disclosure was not made in good faith if an ulterior motive exists which is the dominant or predominant purpose for making the disclosure.  Personal antagonism is one such.  In ALM Medical Services Ltd v Bladon [2002] ICR 1444 it was held that particular care has to be taken in acknowledging the difficulties faced by whistle blowers who may be regarded in different lights by different people.  They are entitled to protection by the statute if they meet the terms of the statute. The threshold for establishing a case of perversity is high: see Yeboah v Crofton [2002] IRLR 634 per Mummery LJ at paragraph 12.

Conclusions

(i) The contract point

34.	This contract was not for a fixed term.  It was expressed to be for a maximum of 18 months.  As a matter of language, it cannot be fixed at 18 months. The draft contract at least had a notice period of one month.  The Claimant was paid monthly.  It was open to the Tribunal to determine what a reasonable period of notice would be and to fix it at one month.  If we are wrong and this is a fixed term, it is nevertheless capable of lawful termination earlier on notice: Allen v National Australia Group Europe Ltd [2004] IRLR 847.

35.	The agreement between the parties was for 25 hours a week to be worked for three months with a reduction to 16-18 hours.  By agreement it went down to either 21 or 20 hours for the month of June.  The Claimant thought that that agreement extended to the end of September.  The Tribunal did not record Ms Mercer’s understanding about what would happen after the end of June, nor is this made clear in her Witness Statement.  We consider it likely that the agreement was as the Claimant said.  That is why her evidence to the Tribunal was that although Ms Mercer had the right to reduce her hours to 16, she was surprised at the method, coming as it did at one day’s notice in an e-mail a month or so after the agreement had been made.  This construction is important for the finding by the Tribunal about the motivation for the disclosure which we will discuss next.

(ii) The reason for disclosure

36.	On the understanding of the Claimant recorded above, by 19 June 2003 when she made her first protected disclosure, she had been assured that she would continue to be employed for 20 or 21 hours per week until the end of September.  Although she said in her e-mail that the reduction in wages was “crap”, an understandable reaction to a cut of 20%, she went on to say that her principal concern was that the job warranted more than two days work a week.  She does, in our judgment, appear to demonstrate that she was prepared to accept the extension of the agreement to continue at 20 or 21 hours a week until the end of September.  She was, after all, doing far better than was envisaged by the initial agreement which would have seen her on 16-18 hours from the end of April.

37.	There was no linkage to her hours in the Claimant’s statement to Mr Daniel where she disclosed the two financial irregularities which constituted the protected disclosures.  That perhaps is understandable, for she is unlikely to reveal the ulterior motive ie a spiteful attitude to Ms Mercer founded upon Ms Mercer’s reduction in her hours.  But it is important to note that the Claimant’s account of the reason for her disclosure to Mr Daniel was not challenged in cross-examination.  

38.	We accept the contention by the Claimant that personal antagonism was not an issue in this case.  It is not in the Notice of Appearance. It is not put to the Claimant for her comment in evidence. It emerges only from the Respondent’s written argument that a legal ground was to be developed that the Claimant did not meet the terms of section 43C in the absence of good faith. The allegation was that ‘the motive for the Applicant’s disclosure was the protection of the ICT budget so that her hours… could be maintained at their initial level, rather than with the honest intention of exposing wrongdoing.’  The Chairman’s notes do not reveal it being put to her in cross-examination that the dominant or predominant motive for her disclosures was seeking to maintain her hours, or spite towards Ms Mercer.  On the contrary, the notes abound with assertions by the Claimant that even before 19 June 2003 she was extraordinarily concerned about the two matters which are accepted to be financial irregularities.  (We have been told that both of these irregularities have been stopped by the Respondent).  So it is only on 30 June 2003 that the Claimant is told that her hours are to be reduced the next day to 16, in apparent breach of the agreement reached with Ms Mercer.  On 3 July 2003 she then gave her full account to Mr Hambrook, and it appears from the finding of the Tribunal that she mentioned the hours issue.  Be that as it may, a protected disclosure was made on 19 June 2003 and we see no evidence from which it could be inferred that it was motivated by spite following action by Ms Mercer in relation to the Claimant’s hours.  The Tribunal failed to pay any attention to what we and apparently the parties regard as the significant meeting on 23 June where the Claimant’s account was unchallenged.  This demonstrates the reaction both of Mr Daniel and Ms Mercer to what the Claimant told Mr Daniel on 19 June 2003 and might in ordinary language be regarded as an unfair response by those two.  Just as important is the reaction of Ms Nash.  The appraisal appeared to be extremely positive.  The project was given the green light.  Whether the reference to “performance” refers to the personal performance of the Claimant or to the performance of the project, the fact that there is no criticism of it or that it is too early to make such criticism, gives substance to the Tribunal’s unchallenged finding that Ms Mercer was seeking to undermine the Claimant by making criticisms of her performance.  As we see it, after 23 June 2003, the Claimant had made her disclosures, the matters were in hand, the relationship had been put on an even keel and the project was moving forward.  Even if the Claimant in her disclosure to Mr Hambrook on 3 July 2003 raised the issue of her hours, it does not undermine a disclosure made quite properly on 19 June 2003 and it reflects the new change on 30 June 2003.  In our judgment the Tribunal had no basis for its finding that such antagonism towards Ms Mercer was evident on 19 June 2003 and was the reason for the disclosure.  The disclosure was based upon the very real, and as it turned out substantiated, concerns the Claimant had and expressed about the financial irregularities she encountered from the early stages of her work.

39.	In the Skeleton Arguments a dispute arose as to where the burden of proof lay on such an issue.  It seems to us that the burden of proof, even in an automatically unfair dismissal, remains on the employer pursuant to section 98.  Where the Claimant has less than one year’s continuous employment, she must establish that the Tribunal has jurisdiction and she does that if the Tribunal finds from the evidence as a whole that the reason for dismissal was the making of a protected disclosure.  Where an allegation is made that the disclosure was not made in good faith, the evidence as a whole must be cogent, for bad faith is a surprising and unusual feature of working relationships, and as Lord Nicholls said in In Re H (Minors) (Sexual Abuse: Standards of Proof) [1996] AC 563 at 586:

“The more serious the allegation the more cogent is the evidence required… to prove it”
Auld LJ in Street [2005] ICR 97, at 115 paragraph 57 expresses some views on the degree of proof required for the existence of bad faith in this legislation but does not say whether there is a burden of proof and if so upon whom it lies.  It seems, therefore, that an Employment Tribunal must consider all the evidence and decide for itself whether the dominant or predominant motive is an ulterior one in which case it will not attract the protection.  As in all cases where improper motivation is alleged, it should be made explicit in advance, and it should be put squarely to the Claimant. In a case like this, the chronology of events and the impression given by a witness are very important. It may be that the Tribunal, returning to this case on seven separate days, lost sight of these subtleties. Essentially, the Claimant lost this case on one point only which was not put to her. That is unfair. We have decided that it was not open to the Tribunal to make the finding that the disclosure on 19 June 2003 was actuated by spite against Ms Mercer flowing from the handling of the hours issue.  We were invited by the Claimant to substitute a finding of unfair dismissal.  Having detected that error in the Tribunal’s judgment, and in the absence of any submission by the Respondent to the contrary, all that it is necessary for us to do is to hold that the Claimant satisfied section 43C.

40.	However that is not an end to the story because we accept Mr Burgher’s submission that the Tribunal did not decide on the reason for the dismissal.  The Tribunal noted the Respondent’s reason for dismissal but that does not satisfy the requirements of the statute.  He invited us, if this were to be our judgment, to remit this aspect to the Employment Tribunal. That is the only course which is appropriate: the parties cannot be said to have lost confidence in the Employment Tribunal, as evidenced by both of them being willing at one stage to urge a Review by it. With the substitution of our holding at paragraph 39, the Employment Tribunal will be able to complete its duty.  We do not imagine the Tribunal will wish or need to hear evidence but an opportunity will be given to the parties to make oral submissions, supported in writing, bearing in mind our finding that section 43C was satisfied.  The Tribunal may if it wishes convene a hearing to deal with that matter.  It will be returned to the same Employment Tribunal.

41.	We would very much like to thank Mr Greenstein and Mr Burgher for their very helpful written and oral submissions.  The appeal is allowed.  The cross-appeal is dismissed.  The case will be remitted to the same Employment Tribunal for a finding on the reason for dismissal.