Appeal No.  UKEAT/0454/05/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal
On 24 January 2006

Judgment delivered on 21 February 2006

Before
HIS HONOUR JUDGE J R REID QC
MS P TATLOW
MR M WORTHINGTON

MRS ALWNYN BARON	APPELLANT

BLISS MEDIATION SERVICES	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR MATTHEW SHERIDAN
(Of Counsel)
As instructed by:
Messrs Ward Hadaway
Sandgate House
102 Quayside
Newcastle upon Tyne
NE1 3DX	

For the Respondent	MISS DEBORAH DAVIES
(Of Counsel)
As instructed by:
Messrs Geldards LLP Solicitors
The Arc
Enterprise Way
Nottingham
NG2 1EN	

SUMMARY

Unfair Dismissal – procedural fairness/automatically unfair dismissal 

Appellant was dismissed for (allegedly) serious misconduct.  ET held disciplinary process flawed but remedied by an appeal which looked only at ‘new’ material.  ET held dismissal within range of reasonable responses in light of matters not considered by the employer.  Held:  ET could not properly have held appeal remedied original procedural defects.  Appellant was unfairly dismissed.  Case remitted to a new tribunal to consider compensation and contribution.

HIS HONOUR JUDGE J R REID QC

1.	 This was an appeal by the claimant, Mrs Alwyn Baron, from a decision of an Employment Tribunal held at Newcastle upon Tyne on 6 and 7 April 2005. By its reserved decision sent to the parties on 5 June 2005 the Tribunal dismissed her claim against the respondent, Bliss Mediation Services, for unfair dismissal. This originating application also included a claim for wrongful dismissal but there is no reference to that claim in the Tribunal’s record of the claimant’s submissions to the Employment Tribunal, the decision or in the notice of appeal and it is not now open for the claimant to complain that the point was not dealt with. 

2.	The respondent is a charitable organisation providing a mediation and dispute resolution service in Blyth Valley and South East Northumberland. The respondent is funded from various bodies such as the local District Council and is run by a management committee, who are all volunteers. The claimant started working for the respondent as its volunteer co-ordinator in April 2002. She was one of four paid employees. Her husband was vice-chairman of the management committee until he resigned by letter dated 5 January 2004. In November 2003 he had applied for, but was not appointed to, a full time paid position within the respondent. He has since December 2003 been taking steps to develop his own mediation service (“NMS”), a fact of which the chairman of the management committee was aware but of which the claimant did not inform her line manager, Ms Walker, until July 2004. In January 2004 both the respondent and NMS applied for funding from Wansbeck District Council. Neither bid was successful. 

3.	On 23 July 2004 the claimant was suspended “pending an investigation into conflict of interest” and invited to attend a meeting of officers on 5 August. She consulted Mr Pidcock of the local CAB who wrote to the respondent asking for further information and clarification. The response dated 29 July was that no further information would be supplied because no allegation had been made. On 2 August the claimant was informed that the meeting on 5 August was to be a disciplinary hearing. She was given no information as to the charges.

4.	The disciplinary hearing was held on 5 August. As the respondent now accepts (and as the Employment Tribunal rightly held), the respondent failed to adhere to the basic standards outlined by ACAS for conducting a disciplinary hearing. It failed to give advance notice of the allegations under investigation, failed to give the claimant any documents in advance (although the documents were in the meeting room for the claimant and Mr Pidcock to study at the hearing itself), and took the evidence of Ms Walker (who presented the entire “prosecution” case) in the absence of the claimant and her representative, who were then not shown a copy of the questions put and answers given. Mr Pidcock was refused any adjournment to prepare his case and to call witnesses.

5.	It was only during the meeting that it emerged that there were in effect three charges: (1) that the claimant had taken the “Wansbeck bid” file relating to the respondent’s bid for funding from the local authority, presumably so her husband could make use of it for his business, (2) that the claimant had taken another old file relating to funding, and (3) that she had prepared a data base of mediators which she had taken home. Questions were also asked about her failure to inform her line manager, Ms Walker, of her husband’s new business. 

6.	In essence the claimant’s defence was a denial of the first two charges, an assertion that the database had been prepared as part of a college course and the explanation that she had not informed her line manager of her husband’s new venture because she was not on good terms with her and in any event the chair of the management committee knew (which was accepted to be the case). 
7.	After the hearing the claimant was summarily dismissed because, as the dismissal letter put it, “you have been found guilty of Gross Misconduct and Improper Practice”. The dismissal letter did not specify what had amounted to gross misconduct or improper practice. The letter notified her of her right to appeal. By letter dated 9 August 2004 the claimant requested an appeal hearing. By letter of 11 August 2004, the respondent indicated an appeal hearing would take place on 19 August 2004.

8.	The appeal panel of three was chaired by Ms Edwards. Mr Pidcock again represented the claimant. The tone of the meeting was set when Ms Edwards opened the proceedings by “discussing the three points of improper practice and informing [the claimant] that the hearing today was to consider any new points that [the claimant] would like to bring to the attention of the panel”. A little later on she “informed [Mr Pidcock] that the panel were not here to discuss procedures; they were here to listen to [the claimant] and find out if there was any new evidence for the appeal to hear.” Ms Walker was not in attendance and no opportunity was given to question her.

9.	The appeal hearing upheld the decision of the original hearing. In due course the claimant brought proceedings for wrongful dismissal and unfair dismissal. 

10.	The Employment Tribunal determined that “The issues for the Tribunal to determine were was there a proper investigation into the allegation made by the respondent; did the respondent follow a proper procedure; did the claimant contribute to her dismissal?” On the basis of the issues it defined it considered whether there was an adequate investigation, whether on the basis of the information before it the disciplinary panel was entitled to reach the conclusion it did, and whether the appeal hearing made good the admitted deficiencies in the original disciplinary hearing. Although it did not identify this as an issue which required to be addressed, the Tribunal also considered whether dismissal was within the reasonable range of responses to the employer’s findings of misconduct and held that it was. 

11.	The notice of appeal specifies a considerable number of grounds of alleged perversity in relation to the findings of fact by the Tribunal, asserting that the Tribunal misunderstood the grounds of dismissal. It also asserts that the Tribunal was wrong in law or perverse in holding that the appeal hearing made good the deficiencies in the original disciplinary procedure. 

12.	In the light of our conclusions on this last point we need say nothing about any of the other grounds of appeal except one to which we revert at the end of this judgment. However we note that the hurdle set for an appellant alleging perversity is a high one and that it very far from plain that this claimant could have cleared it.

13.	As to the issue of whether the Tribunal was right to hold that the appeal hearing remedied the deficiencies in the original hearing, the Tribunal “concluded that on the basis of the information before the disciplinary panel it was entitled to reach the conclusions it did” in relation to the three separate matters, the Wansbeck file, the funding file and the database. This is of little assistance to the respondent since the information before the disciplinary panel was the limited information available to it from a notably unfair hearing at which the claimant had been deliberately denied knowledge of the charges laid against her and the nature of the case she had to meet, and refused an adjournment to prepare her case.

14.	The Tribunal then went on to examine the appeal process, holding that the claimant “had sufficient information upon which she was able to prepare her case”. The Tribunal noted in particular she now had the notes of the questions put to, and answers made by, Ms Walker at the disciplinary panel which she had been prevented from hearing at that stage. It also accepted Ms Edwards’ evidence that “[The claimant] did not want to answer questions” and that “the only direct question [she] answered was that she did not take the funding file.” The Tribunal expressed the view that “the claimant was given every opportunity to state her case but failed to do so”.

15.	In our view this is a finding which was unsustainable. In Byrne v BOC [1992] IRLR 505 the EAT held that where the first stage of the disciplinary hearing is seriously flawed, it is essential if the appellate process is to be treated as establishing fairness overall that it should be able to stand on its own merits as conferring upon the employee all the rights which should have been conferred at the initial stage, notably proper notice of the complaint and a full opportunity of stating the employee’s case.

16.	In this case the original hearing was seriously flawed: indeed it seems to us that there is considerable force in the claimant’s description of it in her letter of appeal as “a kangaroo court”. It was necessary therefore for the appeal hearing to be able to stand on its own merits as conferring on her all the rights to which she was entitled. But the claimant was told at the outset of the appeal that the panel was to “consider any new points”. Then later it was said that the panel was there to “find out if there was any new evidence”. Clearly Mr Pidcock took this on board: he referred back to the previous panel’s deliberation highlighting that all accusations had been denied, following which the minutes record “The Panel agreed that [the claimant] had denied the three issues at the original hearing. However the Original Panel believed otherwise and that had been the reason [the claimant] had been dismissed under a Gross Misconduct charge”. This attitude was highlighted by Ms Edwards’ evidence (which the Tribunal said it accepted) which contained the passage “The purpose of the hearing was to decide if there was any new information that had not been discussed in the original hearing”. Whilst it is true that the minutes also record Ms Edwards as telling the claimant “she is at the appeal to put forward her side of the case”, this has to be seen in the context of Ms Edwards’ opening remarks and the very clear inference that the decision below was to stand unless there was any new information.

17.	In our judgment it was simply not a permissible conclusion on the evidence which was before the Tribunal for it to hold that the appeal hearing made good the grave deficiencies in the original disciplinary hearing. To do so was “obviously wrong”, and to elicit the response “That cannot be right”. It follows inevitably from this that the dismissal was unfair and that we should substitute a finding of unfair dismissal.

18.	That leaves the question of what should happen next. Although we have substituted a decision of unfair dismissal, it does not answer the question as to what if any compensation the claimant should receive. The Tribunal indicated that if it had made a finding of unfair dismissal “a substantial contribution to it was made by the claimant’s actions prior to dismissal”.

19.	We considered whether in these circumstances we could remit the case to the same tribunal simply to consider the question of compensation. We concluded that though this was an attractive option and one which would save time and expense it was not the proper one in this case. The rehearing will have to examine the question of what would have been the likely outcome had there been a proper disciplinary process. This is not something which could be properly entrusted to the same Tribunal. Furthermore it is clear that in deciding whether the respondent’s decision to dismiss was within the bounds of reasonable response it is clear that the Tribunal took into account an inadmissible factor which was not ventilated before either disciplinary hearing or taken into account in their decisions.

20.	At paragraph 12.2 of its decision the Tribunal in holding that dismissal was within the band of reasonable responses refers to “previous conduct which may be considered a breach of trust”: “In particular the forwarding of the email from her computer at work to her husband’s computer at her home address when she returned to work from sick leave.” This was an entirely separate incident which had been dealt with at the time and ended with the claimant undertaking not to do such a thing again. It was not a matter referred to or relied upon by the respondent as an element in the dismissal, and before us counsel for the respondent could do no more than accept that this was an error by the Tribunal and suggest that it was some sort of irrelevant grace note. We are unable to accept this submission. This error is an additional factor against remitting the case to the same Tribunal.

21.	The rehearing (if the parties insist on carrying the case through to its final conclusion) will effectively have to consider the entirety of the case. The claimant has now established what we were told was most important to her, namely a finding she was unfairly dismissed. If the case is re-argued she may quite conceivably end up with a finding that she made a very substantial contribution to that dismissal. It would seem unfortunate (and no very good advertisement for the process) if in a case which is concerned with mediation agencies the parties could not in the end mediate their way to a solution. But for the moment all we can do is allow the appeal, substitute a finding of unfair dismissal and remit the case to a fresh Tribunal to determine the question of remedy.