Appeal No. UKEAT/0266/10/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 15 December 2010

Before
HIS HONOUR JUDGE PETER CLARK
MR D BLEIMAN
MR P GAMMON MBE

KIER ISLINGTON LTD	APPELLANT

MR A PELZMAN	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR IVAN HARE
(of Counsel)
Instructed by:
Kier Group plc
Tempsford Hall
Sandy
Bedfordshire 
SG19 2BD	
For the Respondent	MS JO MORRIS
(of Counsel)
Instructed by:
Messrs Churchills Solicitors
Churchill House
137 Brent Street
Hendon
London 
NW4 4DJ	

SUMMARY
UNFAIR DISMISSAL – Reasonableness of dismissal

Conduct dismissal – Employment Tribunal substituted its view of disparity of treatment compared with an earlier disciplinary offence and relied on employer’s failure to issue a specific written warning of the risk of dismissal when the offence in question was covered by the examples of gross misconduct in its disciplinary procedures, leading to summary dismissal.

Finding of unfair dismissal (subject to 75 per cent contribution) and consequent compensation order set aside and finding of fair dismissal substituted on appeal.

HIS HONOUR JUDGE PETER CLARK 
Introduction
1.	This is an appeal by Kier Islington Ltd (Kier), the Respondent before the Watford Employment Tribunal, against the judgment of an Employment Tribunal chaired by Employment Judge Lewis, dated 22 February 2010, followed by Reasons dated 11 March 2010, upholding the Claimant, Mr Pelzman’s complaint of unfair dismissal, subject to a finding of 75 per cent contribution.  He was awarded compensation totalling £11,755.28.

The Facts
2.	The Claimant commenced his period of continuous employment as long ago as January 1979 with the London Borough of Islington (the Council).  His employment was transferred to Kier in 2000, who took over the council building maintenance work.  At the relevant time he worked as a driver and loader of building site rubble.

3.	On 19 February 2009 he was engaged with a colleague, Mr Carpenter, in clearing lumber from an empty second floor flat.  There came a point where he ceased taking items downstairs to his lorry; instead he stood on the balcony of the flat and threw a kitchen unit door onto his truck.  At this point an elderly resident, Mrs Montague, aged 87 years, emerged from her ground floor flat to see what was going on.  The Claimant’s aim was less than perfect; the kitchen unit door hit the side of the truck and bounced off, striking Mrs Montague and causing swelling and bruising to her foot, according to her General Practitioner whom she consulted later that day.

4.	The Claimant did not report the incident to his employer, although he visited Mrs Montague the following day in order to check that she was all right.  The missile also did some damage to the door strip of her flat which the Claimant himself repaired straight away.

5.	The matter came to the attention of Homes for Islington, Kier’s principal client.  They contacted Kier the following day in an email which said, “Can you please investigate this and ensure it never happens again”. 

6.	The practice of throwing materials out of upper floor properties is known as “bombing”.  The Claimant knew he should not do it.  He had been told informally by Mr Richard Rowe, a manager, not to indulge in bombing.  He did not receive formal or written notice of this prohibition but, as the Employment Tribunal observe at paragraph 29 of their Reasons, he was aware that he should not do it and indeed it should have been obvious to him.

7.	There had been a previous incident of bombing in 2005.  Three employees received final written warnings for engaging in the practice; one of them acted as lookout during the bombing episode and no one was hurt.  That incident followed a memo dated 2 June 2004 which said that bombing was unacceptable (it did not specify the penalty for such a practice); the three miscreants in the 2005 incident were aware of that memo; it was not circulated to the Claimant.  The final warning penalty was imposed by the General Manager for an offence of putting at risk the health and safety of members of the public.  He had not dismissed the men because they guaranteed that they would not repeat the practice.

8.	Disciplinary proceedings were taken against the Claimant.  He was suspended on 23 February 2009 and attended an investigation meeting with Mr Rowe on 25 February 2009.  The Claimant promptly admitted that he had thrown the door and that he was aware that he should not have done so.  He apologised for his actions and blamed stress as a result of a backlog of work following his return from eight days leave.

9.	Following that investigation the Claimant was summoned to a disciplinary hearing before Mr Newis, accompanied by an HR Manager, on 8 April 2009.  Mr Newis was aware from Mr Rowe’s investigation that Mrs Montague did not want the Claimant to lose his job, something she later confirmed in a letter dated 7 May 2009.

10.	Mr Newis found the Claimant guilty of gross misconduct.  In considering sanction he took into account in the Claimant’s favour his candid admissions, his length of service and his clean disciplinary record.  He was also aware of the 2005 incident leading to final written warnings.  As to the comparison between the two incidents, he formed the view that the present incident was more serious because the Claimant’s actions caused injury to Mrs Montague and damage to property and because of the damage to Kier’s reputation with its client.  The Employment Tribunal record (at paragraph 13) that as an aside, Mr Newis mentioned in evidence that he also took into account the fact that a lookout was present in the 2005 incident, but the Employment Tribunal found, on the evidence as a whole, that this was not the reason why Mr Newis, or Mr Martin, who heard the Claimant’s subsequent appeal, treated the 2005 incident as less serious than that involving the Claimant.

11.	I should say that Kier wished to challenge the Employment Tribunal’s lookout finding by reference to the Employment Judge’s Notes of Evidence.  However, I rejected the application for those notes for the reasons contained in the Employment Appeal Tribunal’s letter dated 9 December 2010.

12.	Having weighed up the various factors, Mr Newis decided that the proper penalty in the Claimant’s case was dismissal.  He felt boxed in by the final warning given in 2005 (whatever that means) and was concerned that if someone was killed in future in a similar incident he would be asked why he had not dismissed on this occasion.

13.	We note that following this incident Mr Rowe, for the first time, introduced the subject of bombing in his “Toolbox Talks” to staff.

The Employment Tribunal Decision
14.	Applying the well known Burchell test, as modified by the Employment Act 1980 as to the neutral burden of proof when considering section 98(4) Employment Rights Act 1996, the Tribunal found that the reason for dismissal related to the Claimant’s conduct (a potentially fair reason); that Kier had a genuine belief, based on reasonable grounds following a reasonable investigation that the Claimant was guilty of the misconduct alleged and no criticism is made of the fairness of the procedure followed by Kier.

15.	However, they found that dismissal fell outside the range of reasonable responses in the circumstances of this case.  The basis of that conclusion, rendering the dismissal unfair, appears to be twofold (Reasons paragraphs 29 and 30).  First, disparity of treatment between the way in which the 2005 incident was dealt with by a final warning as opposed to dismissal in this case.  Secondly, because no written instruction indicating the seriousness of bombing had been issued to staff, including the Claimant, after the 2005 incident, despite advice from HR that such a course ought to be taken.

The Appeal
16.	In this appeal Mr Hare challenges both findings which led the Employment Tribunal to conclude that the sanction of dismissal fell outside the range of reasonable responses open to this employer. 

17.	Dealing first with disparity of treatment (Reasons paragraph 29) he submits that the Employment Tribunal impermissibly substituted their view of the comparative seriousness of the 2005 incident for that of the employer.

18.	The line of authority dealing with disparity of treatment begins with Post Office v Ferrell [1981] IRLR 221 (CA) where Brandon LJ made the point that employees who misbehave in much the same way should have meted out to them much the same punishment; where that is not done the employee more harshly treated by dismissal may have been treated unfairly.  Plainly that will be the case where, knowing of previous instances, the employee has been lulled into a false sense of security.  That is not the present case; Mr Pelzman was unaware of the 2005 disciplinary incident. 

19.	When considering an argument based on disparity caution must be exercised to ensure that the comparative cases arise in truly parallel circumstances; Hadjioannou v Coral Casinos Ltd [1981] IRLR 352 (EAT), paragraphs 24 and 25, Waterhouse J presiding.  That approach was approved by the Court of Appeal in Paul v East Surrey District Health Authority [1995] IRLR 305, paragraph 34, per Beldam LJ.

20.	In Securicor v Smith [1989] IRLR 352, the Court of Appeal held that where an employer has distinguished between previous cases and the index case, or, as in Smith, between employees involved in the same incident, that distinction may only be impugned where the distinction is irrational; see also Paul, paragraph 30.

21.	The Employment Tribunal in this case was referred to both Securicor v Smith and Hadjioannou.  Did they correctly apply those principles?  In our judgment they did not. 

22.	A useful starting point is Mr Newis’s letter of dismissal dated 8 April 2009, where he said this:

“I have looked at a similar case of ‘bombing’ for a past precedent and the penalty was severe.  This incident had the additional factor of causing an injury to the tenant and damage to the property.  Although you claimed to be ashamed of your behaviour, I was disappointed to discover that you had failed to report this accident.
In view of the injury and damage caused not only to the tenant but to the Company’s reputation, I have no option but to terminate your employment with immediate effect.”

23.	At paragraph 29 of their Reasons the Employment Tribunal expressed their view that the 2005 incidents would rationally be regarded as more serious by any reasonable employer, because those employees were aware of the management instruction dated 2 June 2004.  That instruction did no more than inform employees of what this Claimant, on the Employment Tribunal’s findings knew; that the practice of bombing was unacceptable.  The 2004 instruction did not warn employees of the penalty for disregarding it.

24.	The Employment Tribunal also observed that the absence of injury to anyone in the 2005 incident was not a factor in the 2005 disciplinary penalty.  However, the fact of injury to Mrs Montague and, very much secondary, damage to the step, which the Claimant repaired, were factors taken into account by Mr Newis.  The Tribunal did not in terms find that to be an irrational distinction.  Plainly and unarguably it was not.  Further, the absence of a lookout in 2009 was a rational distinction to make.  A lookout will not always prevent an accident but it is a sensible safety precaution which was taken in 2005 but not by the Claimant in 2009.  Further, the Employment Tribunal did not deal, in their reasoning at paragraph 29, with the perceived damage to Kier’s reputation with its principal customer, Mrs Montague’s landlord, which learned of the incident after Mrs Montague complained to the caretaker of her block of flats, leading to the email to Kier, Kier being unaware of the matter because the Claimant had chosen not to report it to them.

25.	In these circumstances we are persuaded that the Employment Tribunal fell into error in carrying out its own assessment of comparability between the 2005 and 2009 incidents.  Had they considered the proper question ‑ was Mr Newis’s reasoning irrational ‑ the answer, in our judgment, was that plainly it was not.

26.	Turning to the need to warn the Claimant specifically of the possible sanction if he were to engage in bombing, the Tribunal was perfectly entitled to take the view that Kier’s management ought to have taken HR advice and sent out a memo to all staff emphasising the seriousness of bombing and the possible disciplinary consequences if that practice continued.  However, that does not fully answer the reasonableness question under section 98(4) ERA.  Did the absence of specific written notice render the dismissal unfair, setting aside the disparity finding which we have overturned?  As the Tribunal noted (paragraph 11), Kier’s Performance Management Misconduct Procedure set out examples of gross misconduct, including, gross negligence, bringing Kier into disrepute and conduct which jeopardises health and safety.  The Procedure also states that gross misconduct may be visited with the penalty of summary dismissal.

Conclusion 
27.	The Claimant had 30 years service; he knew that bombing was prohibited (paragraph 7).  It must have been blindingly obvious to him that throwing material from an upper floor balcony, particularly without a lookout, gave rise to a risk of injury to persons below; although as Mr Hare put it, a formal written instruction would be a counsel of perfection, Ms Morris has not persuaded us that on the particular facts of this case its absence rendered the dismissal unfair, particularly when the Claimant had not been misled by the 2005 penalties of which he was unaware. 

28.	In these circumstances we shall uphold this appeal, reverse the finding of the Employment Tribunal and declare that the Claimant’s dismissal was fair.