Appeal No. UKEAT/0531/11/KN

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

                                                                                                            	At the Tribunal
                                                                                                            	On 11 July 2012

Before
HIS HONOUR JUDGE McMULLEN QC
SIR ALISTAIR GRAHAM KBE
MR R LYONS

NETWORK RAIL INFRASTRUCTURE LTD	APPELLANT

MR W M MOCKLER	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS REBECCA THOMAS
(of Counsel)
Instructed by:
Bond Pearce LLP Solicitors
Oceana House
39-49 Commercial Road
Southampton
Hampshire
SO15 1GA
	
For the Respondent	MR BRUCE HENRY
(of Counsel)
Instructed by:
Thompsons Solicitors
23 Princess Street
Manchester 
M2 4ER 	

SUMMARY
UNFAIR DISMISSAL – Reasonableness of dismissal

The Employment Tribunal did not err in finding the Respondent unfairly dismissed the Claimant for misconduct in failing to observe trackside safety rules.  The EAT would not interfere with its findings: Fuller v London Borough of Brent [2011] IRLR 414, Bowater v Northwest London Hospitals NHS Trust [2001] IRLR 331, Salford Royal NHS Foundation Trust v Rolden [2010] IRLR 721, per Elias LJ, Gayle v Sandwell & West Birmingham Hospitals NHS Trust [2011] EWCA Civ 924, per Mummery LJ, London Ambulance Service NHS Trust v Small [2009] IRLR 563, per Mummery LJ, Orr v Milton Keynes Council [2011] EWCA Civ 62, Oso v Newham University NHS Trust [2011] EWCA Civ 1425 and Henderson v LB Hackney [2011] EWCA Civ 1518. The principles have most recently and authoritatively been rationalised in Arriva Trains v Conant UKEAT2011 0043/11 at paras 23-34, in Crawford v Suffolk Mental Health Trust by Elias LJ [2012] EWCA 138 and Graham v DWP [2012] EWCA Civ 903 applied.

The Employment Tribunal did not cite the statute or any authority, so creating a risk of error, but it plainly upheld the employer on BHS v Burchell, yet finding permissibly that the decision to dismiss was outside the range of reasonable responses.

It gave no reasons for finding 50% contribution: Greenwood v NWF Retail Ltd UKEAT/0409/09. This is remitted to the same Employment Tribunal to take the decision again and give reasons.

HIS HONOUR JUDGE McMULLEN QC
Introduction
1.	This is an appeal by the Respondent in those proceedings against the judgment of an Employment Tribunal chaired by Employment Judge Kloss which sat for a day and considered its judgment for a day in private and sent it to the parties on 11 July 2011. 

2.	The Claimant was represented by different counsel and today has the advantage to be represented by Mr Bruce Henry of counsel, the Respondent throughout has been represented by Ms Rebecca Thomas of counsel. 

3.	The Claimant claimed he was unfairly dismissed by the Respondent, which denied unfairness, and asserted it had dismissed him fairly having carried out a fair procedure.  It also contended that if it were found to have unfairly dismissed him, the Claimant contributed to his own dismissal to the extent of 100% and it would not be just and equitable to make any award in his favour.

4.	The Tribunal upheld the Claimant’s claim but found that he was guilty of contributory fault to the extent of 50%.  A hearing is now awaited on remedy and we understand from the Schedules of Loss exchanged that the figure, even with the 50% reduction, is likely to exceed the statutory cap.  The essential issue was to determine the fairness of the dismissal.  The Respondent appealed and directions sending this to a full hearing were given by HHJ Peter Clark.

The legislation
5.	The relevant legislation which is not cited at all by the Employment Tribunal is the Employment Rights Act 1996. Section 98 provides a reason for dismissal must be shown by the Respondent.  It is not in dispute that it was conduct.  Fairness is determined by section 98(4) which provides as follows:

“Where the employer has fulfilled the requirements of the subsection (1), the determination of the question whether the dismissal was fair or unfair (having regard to the reason show by the employer)
a) depends on whether in the circumstances (including the size and resources of the employers undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
b) shall be determined in accordance with the equity and substantial merits of the case."

6.	In the assessment of remedies, re-engagement and reinstatement are the primary remedies and we understand that that claim is to be made at the Employment Tribunal. Where there has been substantial contribution by conduct to a dismissal that is a reason for reducing what is just and equitable by way of compensation (section 123). It is common ground that such reduction of the compensatory award would be on the basis of blame. Similar provisions apply for the reduction of the basic award under section 122, although the language is slightly different.

7.	As well as failing to mention any statute, the Tribunal cited no authority.

The facts
8.	The Claimant had been employed as a track worker for 23 years when on 4 August 2010 he was spotted by an employee of the Respondent beside a track with a group of workers.  He had been previously been off for 11 months and had just come back to work. He needed a Track Safety Certificate (PTS) and some retraining and because he had not done that, he was asked to work as a driver for a group of track workers whose supervisor was Chris Taylor.  The observation of the Claimant was that he was not wearing a hard hat and that led to an investigation.  The charges against him were that he did not have a hard hat when in the proximity of a track, which is within ten feet of it; he did not have a valid PTS certificate while he was in that vicinity; and he had failed to set up a safe system of work as required by the rules for he was a lone worker, in other words not part of the group. Thus three specific charges under the safety regime were weighed against him.  

9.	At a disciplinary hearing, Mr Turner-Hague upheld each of the three allegations and dismissed him.  Mr Turner-Hague noted that there had been a false statement initially made the Claimant as to what he was doing by the track, but that was retracted during the hearing and the Tribunal found that it did not form part of the decision to dismiss him.

10.	In fairness, the notes which were provided by the Judge at the direction of the EAT indicate he was not dismissed for his lie but Mr Turner-Hague did consider that during the disciplinary proceeding.  That, of course, is right since the retraction of it was at that hearing, but the Tribunal’s finding was that it did not form part of the decision to dismiss and that seems to be grounded in the note we have seen.  

11.	Mr David Hulme heard the appeal, the Claimant again being represented by his union, RMT. The Tribunal noted correctly that the ground of appeal was the severity of the punishment.  Breaches seem to have been admitted but the sanction was too severe. The Tribunal went on to find that the Claimant was in breach of the safety rules in not wearing a hat. He was not aware of the suspension of his PTS until after the relevant event. He reasonably believed it was still valid and that he was not part of Mr Taylor’s team, since he was not working there as a track worker but simply as the delivery driver.

12.	The Tribunal found that the Respondent carried out a reasonable investigation and followed a reasonable procedure; no further investigations might reasonably have been undertaken.  With those findings in the forefront of its mind, it turned then to what appears to be an analysis of fairness under section 98(4) and it said:

“13. The Tribunal is conscious of the rule that it must not substitute its own decision for that of the manager but only determine whether the decision to dismiss fell within a range of reasonable management responses.  However, in this case, the Tribunal finds that the decision to dismiss was outside that range for the following reasons.  First, the Tribunal finds that the claimant was not aware that his PTS certificate had been suspended until the investigation yet that was given as one of the principal reasons for the dismissal.  Secondly, the claimant was not standing near a fully operational line and the risks were minimal.  Thirdly, the Tribunal finds it difficult to see how the claimant could be classified as a lone worker.  He was working as a driver for the team.  Fourthly, in cross-examination both Mr Turner-Hague and Mr Hulme justified the difference between the treatment of Mr Taylor and the claimant as partly because Mr Taylor had owned up to the lie shortly after the investigation started whereas the claimant had only done so later.  The lie formed no part of the decision to dismiss the claimant, therefore there was an inconsistency.  Mr Taylor was in charge of the operation and should have told the claimant to return to his van and reported him.  They were both in breach of the safety rules, but only the claimant was dismissed.  Finally, the claimant had an unblemished record of 23 years’ service and this was a dismissal for a first offence.”

13.	Nevertheless, it went on to consider the Respondent’s written contention in its response as to contribution and said this: 

“14. The Tribunal therefore finds that the dismissal was unfair but that the claimant by his conduct contributed to his own dismissal by 50%.”

14.	That can be supplemented by the words found in the Judgment itself, the Claimant “was guilty of contributory fault”.  On that basis, the hearing was adjourned so that there could be remedy hearing.

The Respondent’s case
15.	On behalf of the Respondent, it is contended that the decision of the Tribunal is perverse and it has erred in law in that it has substituted its view for that of the Respondent.  It has erred by failing to consider the material which was before the Respondent and whether or not in the light of that material it was reasonable to dismiss him. The Tribunal have failed to consider the matter in light of the evidence that was before the Respondent at the time of dismissal.  The Tribunal accepted that the Respondent had conducted a reasonable investigation (para 12(9)) and by virtue of accepting that the reason for dismissal was conduct seem to have accepted that there was a genuine belief that the Claimant’s guilt (para 12(8).  However they have failed to directly address the question of whether that belief was formed on reasonable grounds and instead have made primary findings of fact on the matters which formed the basis of the disciplinary charges. Further in Securicor Ltd v Smith [1986] IRLR 305 (at para 34) the Court of Appeal confirmed that in a case where two employees were dismissed arising from the same incident where one employee was successful on appeal and one was not then the question was whether the appeal panel’s decision was so irrational that no employer could reasonably have accepted it.

16.	Ms Thomas acknowledges the very substantial corpus of Court of Appeal authority now running to at least 15 cases in the last three years where conduct dismissals have been considered. She acknowledges the point which we have elicited from them that broadly speaking finding facts is for the Tribunal and with the correct self direction it is unlikely that the Tribunal will be held to have misapplied the direction.  

17.	Nevertheless, she contends this Tribunal erred in law in all of the aspects cited in paragraph 13.  She contends that the Claimant ought to have been aware of the PTS certificate, that the line was fully operational, there were risks there and the comparison with Mr Taylor, the supervisor, is inapt because of his approach to his lie. Mr Taylor was disciplined but received a final warning. The decision should be set aside and that we should ourselves substitute our Judgment for that of the Employment Tribunal’s and find the Claimant was fairly dismissed.

18.	If we are against her on this, she invites us to consider contribution - this is in two parts.  The first is a reasons challenge; there are no reasons given and on that basis the Tribunal has erred.  The remedy for that, she accepts, would be for this to go back to the same tribunal for reasons to be given.  But she also has a systemic attack on the decision which is that whatever the reasons, 50% is too low.

The Claimant’s case
19.	As to the reasons; Mr Henry accepts there are no reasons, but urges us to hold that the reasons are exigible from the findings. These include criticisms of the Claimant that he was in breach of the rules and this coupled with the word “guilty” in the Judgment indicate the Tribunal knew about blameworthy conduct.  Mr Henry does not seek to unseat the finding of contribution in itself, nor the finding of 50%, but does resist the matter being decided by us if we were in favour of Ms Thomas, and would seek to maintain the position as it is.

20.	As to liability, Mr Henry contends that the approach in all cases of conduct is to rely upon BHS v Burchell [1978] IRLR 379, and to decide whether the Tribunal has found that the tests in Burchell have been satisfied, there being a neutral burden in stages 2 and 3, and then to stand back and look at the band of reasonable responses.  The findings by the Tribunal in paragraph 13 all go to what the Claimant said in his claim form and are referable to his original appeal, which was that the penalty for the breaches was too severe and dismissal of him in the circumstances was unfair.  

The legal principles
21.	The legal principles to be applied in this case emerge from the cases which we have reflected upon with counsel.  They are most recently the Judgment of the Court of Appeal in Graham v The Secretary of State for Work and Pensions [2012] EWCA Civ 903 and the holding by Aikens LJ in the following terms:

“45. AT the heart of this appeal are the two opposing allegations that the two tribunals, first the ET and then EAT, wrongly substituted their own views of the facts, particularly in relation to what we have called Allegation One, instead of evaluating the facts as found by the dismissing officer of the employer.  That is the substance of Grounds 2 and 3 of the Grounds of Appeal, viz that the EAT retried the case on the facts and that a misleading document was introduce at the EAT stage to define “acquaintance” or “acquaintanceship” and Mr Gott’s argument that the EAT was entitled to do what it did because the ET had itself been guilty of “substitution”.  The decision of this court in London Ambulance Service NHS Trust v Small [2009] IRLR 563 (at [41]-[43]) restated the well-established rule that an ET is not entitled to substitute its own findings of fact for those of the employer or its investigating or dismissing officer, except in very exception circumstances, discussed in the Orr case at [79]-[80].  Equally, the EAT is not entitled to substitute its own findings for those of the ET unless the latter are perverse.
46. In these circumstances, it seems to me that this court should start by asking the questions that should be asked when an employee is alleged to have committed misconduct and is dismissed for that reason.  As already noted, there is no dispute that the DWP dismissed Mrs Graham for what it regarded as her gross misconduct in the way she dealt with the case of Mr Moss.  There can be no dispute that this is a “valid” reason within section 98(1)(b) of ERA.  An ET that is considering whether the dismissal of an employee accused of misconduct was fair then has to ask itself three questions.  On the first - did the employer carry out reasonable investigation - the answer in this case is obviously yes, it did.  On the second - did the employer believe that the employee was guilty of the misconduct complained of - the answer, to my mind at least, is also obviously yes.  Mr Glover clearly believed that Mrs Graham was guilty of misconduct in relation to what he described as the five allegations and we called the four.  The “Decision” in the “Allegations of Misconduct” document demonstrates that fact.”

22.	As is plain from that Judgment a wealth of authorities lies behind it including the majority of Judgment of Mummery LJ in Fuller v London Borough of Brent [2011] IRLR 414, Bowater v Northwest London Hospitals NHS Trust [2001] IRLR 331, Salford Royal NHS Foundation Trust v Rolden [2010] IRLR 721, per Elias LJ, Gayle v Sandwell & West Birmingham Hospitals NHS Trust [2011] EWCA Civ 924, per Mummery LJ, London Ambulance Service NHS Trust v Small [2009] IRLR 563, per Mummery LJ, Orr v Milton Keynes Council [2011] EWCA Civ 62, Oso v Newham University NHS Trust [2011] EWCA Civ 1425 and in Henderson v LB Hackney [2011] EWCA Civ 1518. The principles have most recently and authoritatively been rationalised in Arriva Trains v Conant UKEAT2011 0043/11 at paras 23-34, in Crawford v Suffolk Mental Health Trust by Elias LJ [2012] EWCA 138.

23.	The question of contribution under section 123 is to reflect blameworthy conduct and the Tribunal is to assess it on a percentage basis if it is assessing compensation, and if it is making a percentage decision that will be relevant to the remedies of reinstatement and re-engagement when sought.  

24.	It is a fundamental principle of the administration of justice that reasons be given for a decision so that the parties can understand why they have won and lost.

Discussion and conclusions
Liability
25.	We prefer the argument of Mr Henry on the substantive point and have decided to dismiss the appeal.  The clear message of the massy caseload we have looked at is that when a Tribunal has directed itself on the law and founds the facts, it will rarely be the right of an Appellant court to intervene.  In this case, we uphold the Respondent’s contention, as did the Employment Tribunal, that safety is paramount, equipment is provided, it must be worn by those who are exposed, and exposing others, to danger. The Claimant did not wear his hard hat.  The fact that he may have been wearing other bits of protective equipment is neither here nor there; the Respondent is entitled to enforce its rules.  The Claimant did not have a valid PTS certificate and he had not made a safe system of work as required by the rules.

26.	But the point about is that they go to the establishment of the framework under BHS v Burchell.  As Ms Thomas addressed us, it appeared that she was criticising the Tribunal in respect of favourable findings under Burchell.  The analysis of this very short Judgment is that the Tribunal had in mind, although it did not say so, three stages in Burchell for it found the reason given by the Respondent, reasonable investigation and a reasonable procedure. Thus, the requirement in a misconduct case to determine whether standards in the three stages in Burchell have been met was met in this case. The question then, as most recently adumbrated in Graham, is whether the dismissal fell within a band of reasonable responses.  

27.	In this case, there is a band of reasonable responses.  The comparator Mr Taylor was not sacked for his part in the breach of the safety rules.   The point about the finding of the Tribunal and the breach of the safety regime is that when one stands back to determine whether the sanction falls within the band of reasonable responses, one is looking at the extent of the breach. We accept Mr Henry’s example: Mr Mockler may have been wearing a hard hat but taking it off to apply insect repellent or suntan cream and he would be in breach of the rule, but that would not justify a dismissal as being within the band of responses.  

28.	So, the first stage is always to find by way of BHS v Burchell whether the employer had reason to believe there were infractions and secondly, to decide what the response is. That is the proper responsibility of the Employment Tribunal.  Here it has given four reasons why the breaches found in the safety regime would not justify the summary dismissal of the Claimant.  Those are matters for the Tribunal applying its experience of workplace relations and the standard of the reasonable employer.  We hold the Tribunal did do just that.

29.	As to comparators, the proper approach is to look at section 98(4) which by its invocation of “equity and the substantial merits” caters for fair dealing by an employer of employees in the same circumstances. We decided this in a compromised appeal CFS v Bashir UKEAT/0057/12 para 3, but now apply it in a contested appeal. There is no difference between unreasonably and irrationally.  The case was properly regarded as one of inconsistent treatment with Mr Taylor’s.

30.	A Tribunal will be at risk if it does not cite the statute or the relevant authorities but here we can understand in this simple misconduct case what its thinking was.  

Contribution
31.	That, however, cannot be said in respect of the contribution point.  Mr Henry says there are three possible findings which would go to blameworthy conduct.  They may indeed, but we cannot say what they are, the Tribunal must do that. Until it does, we cannot say that its decision is correct or, more likely, we have to side with Ms Thomas and say that the decision on 50% cannot stand in the light of the jejune reasoning.  It may be that when the Tribunal, as we direct, meets to consider what its reason is for the finding of contribution (that finding being intact, as not being challenged by Mr Henry) it will give its reasons and it will then assess what percentage in the light of those reasons should be affixed.  It will be open to it to reach any conclusion upon that but we daresay that it will be unlikely to go below its initial finding of 50%.  

32.	Those are matters for the Tribunal and at that stage; whatever reasons are given will be open to consideration by the parties.  The Respondent may be unhappy if the figure stays the same, but if the reasons are robust and not subject to appeal as a question of law, at least it will know what those reasons are.  If they are challengeable, no doubt Network Rail will receive advice upon that.

33.	So the appeal is allowed in part insofar as the challenge to the contribution point will be remitted to the same Employment Tribunal for it to give reasons and to make a fresh decision in the light of the reasons which it puts forward.