SUMMARY
UNFAIR DISMISSAL
Reasonableness of dismissal
Contributory fault
Compensation
Mitigation of loss
Employment Tribunal decided that when
determining penalty for misconduct (accessing personal records without
authorisation, contrary to a number of policies) the employer had thought that
the only mitigation which could reduce sanction from dismissal to a lesser
penalty would be that which established that the Claimant did not know what she
was doing when she accessed the documents. The mitigation (as presented) did
not go that far. Accordingly, because the employer had not given any weight at
all to that mitigation, and had not explored medical issues with the Claimant
though there was reason to do so, the ET held that dismissal was outside the
range of reasonable responses. It was held entitled to do so, but that it
erred in law by holding that although the Claimant had admitted knowing that
she should not access the records, and accepted she had done wrong, nonetheless
as a matter of fact she did not know what she was doing was a breach, and
therefore ought to be excused any finding of contribution. The ET had made
inconsistent findings, had failed to consider what the Claimant ought to have
known, had not considered the effect of the Claimant saying (misleadingly) to
her employers that she had been guilty of misconduct, having changed her
account from one of denial of misconduct to one of acceptance, had not sought
authorisation to access the records, nor had she made any referral for the
investigation of fraud by others although claiming that was what motivated her
actions.
In a preliminary hearing on a linked
appeal, the employer sought to argue that the ET erred by concluding that a
lifetime pension loss could be attributed within s.123 ERA to its
actions in dismissing the Claimant, and that the ET erred in concluding that the
Claimant had mitigated her loss. Held that these findings were open to
the ET.
In the result, the issue of contributory
fault was remitted to a new Tribunal, in the light of the clear views the ET
had expressed, in the light of which its impartial objectivity might be
questioned.
THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)
Introduction
1.
By Reasons delivered in writing on 18 December 2012 Employment Judge
Lewis, at East London, upheld the Claimant’s complaint that she had been unfairly
dismissed. The Department for Work & Pensions, the Respondent, whom we
shall call “the Department”, appeals against that conclusion and against a
conclusion that the Claimant should not suffer any deduction from any award by
reason of contributory conduct.
The facts
2.
Taken from the Tribunal’s Reasons the facts are these. The Claimant
worked as a performance team manager at Basildon Jobcentre Plus. That was a
band C post; she was for a time acting up as an EO. She was dismissed on 24
March 2011: the Tribunal’s date (25 March 2011) is agreed to be one day out.
That was because in November and on 21 December 2010 she had accessed the
personal records of what the Tribunal said were her sister-in-law, her
sister-in-law’s mother and her boyfriend. The attempt to access personal
records was picked up by the Department’s in-house security team. The Claimant
was interviewed. She agreed that she knew that she should not access records
for friends and family members and should only do so for designated purposes.
But she had accessed the records, she said, in order to report a benefit fraud
which she had suspicions was being conducted by her former in-laws, which she
thought was a legitimate purpose. However, later she was to accept (see
paragraph 42 of the Tribunal decision) that there was no legitimate business
reason for doing so. That explanation was not thought credible by Mr Pole to
whom it was advanced. She was subject to a disciplinary hearing in front of a
Ms Gilbert, who determined that she should be dismissed.
3.
The Claimant appealed. That appeal came before a Mr Gisbey, who
dismissed the appeal. Both he and Ms Gilbert regarded accessing the personal
records of others as a clear breach of departmental standards. It was plainly
something of importance to the Department, not least because a lot of its work
involves the handling of confidential data. At least three separate documents
promulgated by the Department to employees emphasise that fact.
4.
The Tribunal set out at paragraph 24 its findings about the hearing
before Ms Gilbert. It found that the Claimant put mitigation before her. Ms
Gilbert understood that mitigation could only be relevant if it excused the
conduct completely, meaning that the Claimant did not know what she was doing.
If it did not show that the Claimant did not know what she was doing, then it
would not be relevant to the question of penalty, and the mitigation would have
no effect if the conduct was found to have been culpable. For his part, Mr Gisbey
had similar advice from the Department’s HR Department to the effect, as the
Tribunal found, that, unless he were satisfied that the Claimant did not know
what she was doing, any mitigation that she put forward to soften the penalty
in respect to such a serious offence should simply be disregarded.
5.
The Tribunal found that the Respondent’s belief that the Claimant had
been guilty of misconduct was genuine, based on reasonable grounds after a thorough
and reasonable investigation, but, at paragraph 44, that the employer had not
followed its own policies: the policy was to take mitigation into account. The
dismissing officer, Ms Gilbert, and the appeals officer, Mr Gisbey, had been
advised by HR that they could only take account of mitigation if the effect was
that the employee did not understand what she was doing. The Tribunal thought
that to completely disregard mitigation in that way was something no reasonable
employer would do. Secondly, in paragraph 47, the Tribunal noted that Mr Gisbey
had in front of him a letter from the Claimant’s GP. That letter was to the
effect that the Claimant’s mental health may have affected her actions and
suggested that she was on the point of being referred for psychiatric
assessment. Despite having had that letter in front of him, Mr Gisbey, without
any evidence to the contrary, had ignored it and had not investigated the
medical position in which the Claimant had been.
6.
The Tribunal set out that medical position in some detail at the outset
of its decision. The Claimant had been ill. She had suffered a number of
misfortunes in the year or so leading up to the events in November and December
2010. She had had an operation to remove a gall bladder and had since suffered
from chronic diarrhoea, which was, she tells us, being investigated as
potential Crohn’s disease or cancer. She was not sleeping well in
consequence. She had separated from the father of her son, who was now a young
adult, some time before and was not in good relations with him. He was
emotionally vulnerable and had himself a range of autistic spectrum disorders,
a hearing impairment, and as a consequence of past bullying had become
epileptic to the extent that it could be life-threatening. He had been subject
to threats not to reveal some fact relating to his father and the Claimant’s
former in-laws to the Claimant. She thought that must relate to potential
benefit fraud, hence her reason for investigating.
7.
The stresses were compounded by the move of two employees, from whom the
Claimant had previously been separated in her work, when they had been held guilty
of bullying her. She was now required to work alongside them in the same
office. This added to the stress to which she was subject. The Tribunal thus
plainly felt that there was, here, a situation in which any reasonable employer
would have investigated the medical position more thoroughly in order to see
how strong and powerful the mitigation was in order to determine whether the
sanction of dismissal for a Claimant who had served 20 years with unblemished
service and was in what the Tribunal described as “some of the most extreme
personal circumstances it had come across” might not have dismissed her.
8.
Taking the view that any mitigation would be ineffective, no matter what
it was, unless it showed that the Claimant did not understand what she was
doing, and secondly, failing to investigate medical material further, were the principal
defects in the employer’s approach which the Tribunal identified in concluding
that the decision to dismiss was not within the range of reasonable responses.
9.
It had also had to consider the argument put forward by the Claimant
that her own treatment had been inconsistent with the treatment by the
Department of others who had also broken confidentiality in relation to
documents (see paragraph 49). It came to no developed conclusion, so far as we
can see, in respect of that, and we accept what Ms Bell says, appearing as she
does for the Department before us today, that the Tribunal did not regard that
as a reason for holding that the employer did not act reasonably.
10.
At paragraph 50 the Tribunal summed up its reasoning in these terms:
“The Claimant was dismissed despite 20 years’ previously
unblemished service in some of the most extreme personal circumstances that
this Tribunal found any employer might come across. The Claimant’s personal
circumstance was [sic] such that she had clearly been suffering extreme
emotional stress and strain on her mental health throughout the relevant time
that she committed each of accesses in breach of the Respondent’s policy she
had a history of depression [sic]. We are satisfied in the circumstances,
particularly the Claimant’s extreme personal circumstances and the complete
failure to take both into account those circumstances and mitigation of the
sanction that the decision to dismiss was outside the range of reasonable
responses.”
11.
It added to that in the immediate following paragraph, under the heading
“Polkey” (Polkey v A
E Dayton Services Ltd [1987] IRLR 503), as follows:
“We find given our conclusions above that that [sic] there is no
basis for a Polkey reduction. This was not simply a procedurally unfair
dismissal; dismissal was not justified taking into account all the
circumstances. In any event we are satisfied that had the mitigation been
taken into account in accordance with the Respondent’s stated disciplinary
policy it would have reduced the sanction from dismissal to a final written
warning.”
12.
There has been no appeal against the conclusion of the Tribunal in this paragraph
in respect of Polkey, though its wording might illuminate
something of the Tribunal’s approach to the case in general.
The grounds of appeal
13.
The Department raised six grounds of appeal. Three of those (1 to 3)
related to the decision as to the range of reasonable responses. Grounds 4 to
6 related to the Tribunal’s decision as to contribution. As to that the Tribunal
had concluded, at paragraph 52, that it had to make its own findings in respect
of the Claimant’s conduct, that it became clear to it, through the evidence,
that the Claimant had not realised that what she was doing was wrong at the
time, although she had accepted that at the disciplinary hearing (and we might
add, on the findings of fact at the appeal hearing) that was because after she
had committed the actions she had gone through the relevant policy with an
officer of the Department and had realised that she was in breach of it. The Tribunal
found that:
“[…] at the time the Claimant accessed the records she believed
that in doing so she was trying to protect her son, that was not itself a
legitimate business reason. However, we accept that she also did it with the
intention of reporting the individuals for fraud (as this was how she hoped to
protect her son) and that a substantial part of her motive was to prevent fraud
against the DWP. We are satisfied that her belief at the time was that
accessing records to prevent fraud was a legitimate business reason […].”
14.
It goes on to say that she accepted with hindsight that her mental
health meant that the state of her mind might have been impaired and that she
was not exercising clear judgment when she decided to access the records. It
added that:
“[…] it is likely she did not realise at the time that she
carried out the actions that it was a serious breach of the Data Security Policy
[…].”
15.
All of that was summed up at paragraph 53, in which the Tribunal said:
“On that basis we are unable to find that her conduct was
culpable or blameworthy which is the quality needed in order to support a
finding of contribution and we therefore find that there was no contributory
conduct in this case.”
Grounds 1 to 3
16.
The first ground was that the Tribunal, though setting out at paragraph
43 an appropriate reminder that it was not for it to substitute its view for
the employer, had gone on to do just that. Ms Bell reminded us that it has
been recognised in cases such as Crawford v Suffolk Mental Health Partnership
NHS Trust [2012] IRLR 402, EWCA Civ 138 (see in particular paragraph 28)
that the mere fact that the Tribunal has set out an appropriate self-direction
does not mean to say it has necessarily observed it, although it should not
readily be assumed that it had failed to follow its own directions. Here she
emphasised that the Tribunal had indicated it was substituting its own view by
what it had said from paragraphs 7 to 9 when it had set out (plainly with
considerable sympathy) an account of the social and medical background, lifted,
she tells us, virtually word for word from the Claimant’s own witness
statement. The same was true in large part of what was said at paragraph 26.
By the time one got to paragraph 50 the Tribunal was, by using the words it
did, indicating what it would have decided in the circumstances rather than
asking whether the employer did what was within the range of reasonable
responses, as to which it has to be recognised that one employer may choose quite
reasonably to dismiss in circumstances when another might quite reasonably
choose not to do so.
17.
She reminded us of the observations in London Ambulance Service v
Small [2009] EWCA Civ 2200, IRLR 563, where Lord Justice Mummery
recognised that it was all too easy, even for an experienced Employment
Tribunal, to slip in to the substitution mindset. That is what Ms Bell submitted
had happened here. Although paragraph 52 related to contributory fault on the
face of it, it set out a clear view by the Tribunal as to what it made of the Claimant’s
behaviour. That was a view which had not been expressed by her to her employer
during the disciplinary hearing or the appeal, when she had accepted that she
knew that accessing the records as she did had been wrong.
18.
The express view at paragraph 33 (page 9 of the Tribunal Judgment) made
comments about the Respondent which indicated an approach of substitution.
There the Tribunal said:
“The Respondent put much emphasis on its belief that the Claimant
would know exactly what was and was not acceptable under its own policy as to
accessing relevant records and referred to training that she acknowledged she
had received. However, there was absolutely no evidence before us of the
content of the training being relied on. It was never put to the Claimant (either
before us or in the investigation or disciplinary) that the training that she
had received addressed specific policies in respect of accessing records, who
counted as a member of the family, or whether forward referral was a legitimate
use.”
19.
Yet later, in its conclusions, the Tribunal had said (at paragraph 42)
that the Claimant did not dispute that she had received the relevant training.
The Employment Tribunal had failed, she maintained, adequately to separate the
findings it made in respect of unfair dismissal when its role was to review the
employer’s reasons for dismissal and ask whether in the light of those it was
or was not reasonable for the employer at that time to treat that reason as a
sufficient reason for dismissing the employee. The test to be applied there is
the test as set out in section 98(4) in words which are so familiar as not to
bear repetition here. By contrast, where a Tribunal looks at a question of
contributory fault it has to ask itself what the Claimant actually did or did
not do, which fell within the words of section 102(3)(vi):
“Where the tribunal finds that the dismissal was to any extent
caused or contributed to by action of the complainant [it should reduce
the compensation].”
There the Tribunal had to come to its own conclusions as to what
the Claimant did or did not do. There is a risk that a Tribunal might not
sufficiently separate the two. Here it did not do so.
20.
She argued, as a second ground, that the Tribunal had failed to have any
or sufficient regard to the Department’s policies in relation to the misuse of
information, which designated what the Claimant had admitted as being gross
misconduct, for which the appropriate penalty would ordinarily be dismissal.
She drew our attention to the case of Wincanton PLC v Atkinson UKEAT
0040/11/DM, a Judgment of 19 July 2011 by this Tribunal, presided over by Silber J.
That was an example of the application of an approach which took into account
the potential for damage as well as the actuality of harm which had resulted.
She submitted that the principle was that an Employment Tribunal ought to
consider potential as well as actual harm which might result from misconduct.
The employer’s polices classed browsing amongst personal records as serious or
gross misconduct: as serious (in the case of an isolated incident) and gross (in
the cause of a repeated incident).
21.
When the Tribunal came to draw its conclusions it did not refer to the
departmental policy, as contained in our bundle at pages 145 and 146, in
particular paragraphs 7, 31 and 32 relating to access to data. It did not take
sufficient account of the way in which the policy clearly said that a possible
outcome for browsing customer data on more than one occasion would be dismissal.
We observe that although it seems plain to us that that document contemplates
dismissal as a possibility, and emphasises the seriousness of the offence, it nonetheless
does indicate that there is room for mitigation. It is perhaps not as clearly
drafted as it might have been.
22.
She argued that, thirdly (ground 3), the conclusions were perverse and
it was wrong to find that the decision‑makers (Ms Gilbert and the appeal
officer, Mr Gisbey) had failed to have regard to the mitigation relied upon by
the Claimant. She drew our attention to paragraph 23 of the decision. That
set out as matter of fact that Ms Gilbert had completed a check list, tick box,
pro forma, which asked, amongst other questions, whether the misconduct was
minor, serious or gross and identified it as gross, asked whether the offender
had offered any mitigation for the offence and recorded, “Relationship with
ex-husband and family and the stress this has caused”, and asked whether the
mitigation had resulted in a reduced penalty, the answer being, “No”.
23.
The paragraph ended by saying that Ms Gilbert noted that the Claimant
expressed regret for her actions, but otherwise no reference was made to any
mitigating circumstances, and then this:
“There was also no reference in the dismissal letter of any
consideration of mitigating circumstances.”
24.
The dismissal letter, dated 24 March 2011, had on the second page a
summary of the account which the Claimant gave. That included a note that the Claimant
was expressing concern about her son, about stress and gave the reason why she
said she had accessed the data. It was thus incorrect to say that there had
been no reference to considerations of mitigating circumstances. Similarly,
the Tribunal in dealing with the appeal before Mr Gisbey said (at paragraph 30)
that he had found that Ms Gilbert did take the mitigation into account and
commented at 31 that he found there was no basis for him to conclude that mitigation
had been taken into account my Ms Gilbert:
“There was no note of this other than as identified above and
nothing referred to in the decision letter.”
25.
If that decision letter is the decision letter we have just referred to,
there plainly was. Accordingly she submits that that, taken together with the
plain importance to an organisation such as the Department of maintaining data confidentiality
and the extreme seriousness with which it must regard any breach, added to the
fact that the Department had itself set out (albeit not absolutely clearly, but
certainly sufficiently so) that such conduct was likely to result in dismissal,
it could not be said without perversity that dismissal was outside the range of
reasonable responses.
Contributory fault
26.
The three grounds in respect of the finding of absence of contribution
argued, first (ground 4), that the Tribunal erred in law in failing to apply
the appropriate test for contributory fault, as set out in Nelson v British
Broadcasting Corporation (No.2) [1980] ICR 110, secondly, that the Tribunal
erred in law in holding that if the Claimant did not know what she was doing
was wrong at the time of the alleged acts of misconduct there could be no
reduction for contributory fault pursuant to section 123(6) of the Employment
Rights Act 1996 (ERA), and thirdly, (ground 6) reached a decision was
perverse in that the Tribunal: (1) held that the Claimant did not know what she
was doing was wrong at the time of the alleged acts of misconduct; and (2) held
that there was no contributory conduct on the part of the Claimant for the
purposes of section 123(6) of the ERA.
27.
In argument before us she identified further that there was an
incongruity between the Tribunal saying (as it did in paragraph 52) that the Claimant
was not at fault, and that which it said at paragraph 51, where the Tribunal
had expressed satisfaction that if the mitigation had been taken into account
it would have reduced the sanction from dismissal to a final written warning, thereby
on the one hand implying that there was absence of fault and on the other a
sufficient presence of fault to justify not just a warning but a final written
warning.
28.
Nelson contains within it guidance, in the Judgment of
Brandon LJ, as to the meaning to be given to the words “contributory
fault” in the context of section 123. Having noted that there is no express
reference in the statutory predecessor of that section to culpability or blameworthiness,
he went on to use those two words. Thus, at page 121C‑D he noted that:
“An award of compensation to a successful complainant can only
be reduced on the ground that he contributed to his dismissal by his own
conduct, if the conduct on his part relied on for this purpose was culpable or blameworthy.”
29.
In a significant passage, E‑H, he said this:
“It is necessary however to consider what is included in the
concept of culpability or blameworthiness in this connection. The concept does
not, in my view, necessarily involve any conduct of the complainant amounting
to a breach of contract or a tort. It includes, no doubt, conduct of that
kind, but it also includes conduct which, while not amounting to a breach of
contract or a tort, is nevertheless perverse or foolish, or if I may use the
colloquialism ‘bloody-minded’. It may also include action which, though not
meriting any of those more pejorative epithets is nevertheless unreasonable in
all the circumstances. I should not, however, go as far as to say that all
unreasonable conduct is necessarily culpable or blameworthy, it must depend on
the degree of unreasonableness involved.”
30.
Ms Bell maintained that by focusing upon the words “culpable” and “blameworthy”
the Tribunal here had omitted to ask whether the conduct might be described as
perverse, foolish, bloody-minded, or just unreasonable in the sense in which
Brandon LJ meant it. She maintained that had it done so it could have come to
only one conclusion.
Discussion
31.
We did not need to trouble Mrs Coulson to respond to the arguments put
forward to us in respect of the conclusion that the dismissal here was unfair.
We are not convinced that the Tribunal here substituted its own judgment. It
was plainly sympathetic to the Claimant, but sympathy is not to be equated with
substitution. It set itself the right test, though that does not insulate it
from a proper finding of substituting its own judgment impermissibly. As was
observed in Crawford, it should not readily be assumed that a Tribunal
has failed to follow its own directions. The Tribunal here structured its
decision carefully. Before paragraph 43 it had considered the first three
relevant questions upon a standard approach to assessing the fairness of a
dismissal. Thus it had asked about the genuineness of belief, reasonable
grounds for that, and whether there had been a reasonable investigation. It
then turned to the question of the sanction. In doing so it expressly said at
paragraph 45 what it regarded as being the behaviour which a reasonable
employer would, or in this case would not, have adopted. The reasoning it gave
was entirely appropriate. We cannot regard the conclusion was being perverse
if it is a conclusion that the reasonable employer did not act appropriately in
determining the sanction because it ruled out of proper consideration matters
of mitigation which it ought to have taken into account, whatever the result of
doing so might have been.
32.
The evidence before the Tribunal had been sufficient to entitle the Tribunal
to make the findings of fact it did, at paragraph 24, in respect of Ms Gilbert,
and at paragraph 31, in respect of Mr Gisbey. We were shown the relevant passages
in the notes of evidence. Mr Gisbey had said at page 18 of the Notes of Evidence,
in answer to the Employment Judge:
“Unless the mental health was such that she did not know what
she was doing then not an excuse. If I believed that was the case then that
would be strong mitigation to reduce the penalty.”
33.
So far as Ms Gilbert was concerned, at page 4, HR had told her that
dismissal was the obvious sanction:
“[…] unless I could find some mitigation that could lower it to
a final written warning. That mitigation would have to such that the person
was sufficiently mentally ill so as to not know what they were doing, but
normally dismissal would be the expectation.”
34.
Those passages are capable, particularly where a Tribunal has seen and
evaluated the witnesses and considered the context in which the evidence is
given, of supporting the conclusions of fact to which the Tribunal came, which
cannot individually be said to be perverse, that the dismissing officer and the
appeals officer both thought here that unless the mitigation amounted to the Claimant
not knowing what she was doing at the time she committed the acts, it could not
affect the sanction of dismissal. It was open to the Tribunal to conclude that
the mitigation, though reported in the documentation and referred to, was thus
not considered in any real sense except to ask if it amounted to meeting that
hurdle. It did not and so it was discarded. It is not considering mitigation
to ignore its relevance in any other context.
35.
Secondly, we see no error of law in the Tribunal’s approach to the
treatment of the medical report from the GP which was before Mr Gisbey, though
it was not before Ms Gilbert. In effect the Tribunal was deciding that an
employer in these circumstances could not reach the decision it did reasonably
by discarding mitigation rather than considering it, and by failing to ask
further questions of the medical state of the Claimant at the time of the
events.
36.
So expressed, the conclusion as to reasonable response has something of
the flavour of procedural fault and failure about it rather than necessarily
meaning that an employer would be bound to conclude in those circumstances that
the Claimant should not have been dismissed. The Tribunal went to that further
stage, but it did not in doing so, in our view, substitute its own view. It
did so only after it had reached the view that the approach taken by the Respondent
was unfair. We do not see that its mistake in reading the dismissal letter and
thinking that it said nothing about mitigation was of relevance. What mattered
was not whether there was mitigation and whether it was referred to, but the
more subtle factual question of whether it was actively considered.
37.
The second ground is something which emphasises the importance of the
policies of the Respondent. It will almost inevitably be the case that any
conduct which is labelled as gross in an employer’s disciplinary policy will be
something which has serious effects and is considered by the employer to have
serious consequences potentially for its business. That does not mean to say
that a dismissal for that reason cannot be outside of the band of reasonable
responses.
38.
The Tribunal did pay regard to the policies. It did not set them all
out, but there were a number of policies covering the same area. A Tribunal
does not have to dot every “i” nor cross every “t” in giving judgement.
Although Ms Bell complained that it did not set out seriatim the
arguments which had been put before it by counsel for the Department, it did not
have to do so. It had to say why it reached the conclusion it did and what
were the relevant facts, and that it did.
39.
The decision made was, as we have indicated, not perverse. We agree
entirely with the observations made by the former President of the Employment
Appeal Tribunal, now Underhill LJ, on the sift in this case where he
commented that he saw nothing inherently wrong in the Tribunal’s Judgment and
that it was not reasonable to apply the sanction of dismissal on the facts of
this case, adding that it was good to see a Tribunal which was not emasculated
by the range of reasonable responses test (a comment we would fully endorse),
and that he saw no obvious signs of substitution.
Contributory fault
40.
As did the former President, so do we take a rather different view in
respect of the conclusions the Tribunal reached on contribution. Here,
essentially, three points were developed orally by Ms Bell. First, that there
was an incongruity, as we have described it, between the Tribunal’s conclusion in
paragraph 52 and its view as to what it would have done or an employer would
have reasonably done expressed at paragraph 51.
41.
Secondly, she argued that the Tribunal had not considered as it should
have done whether someone in the position of the Claimant ought to have known
that she should not have accessed the records for the purposes which she did.
She had worked for the Department for 20 years. Given the policies of the Department,
there would be no reason to think that she should not have known fully well the
importance of security. She did not ask for authority to investigate the
records. She did not report the fraud which she suspected. She, therefore,
might be said to have been guilty of conduct which had contributed to her
dismissal.
42.
The third is a yet more subtle point. The Tribunal did not express its
view as to what it thought of the Claimant’s understanding until it gave its Judgment.
We are told it did not put that view to the parties and invite their
submissions. That has this consequence. The Claimant here had said at the
outset to Mr Pole that she did not know that what she was doing was wrong but
when she came to the disciplinary hearing and to the appeal hearing she
accepted she fully did. Indeed, there was no hint in her witness statement
that she denied actually knowing what she did was wrong. That plainly emerged
during the course of the hearing.
43.
Accordingly, the employer could not be blamed for approaching discipline
and sanction upon the footing that she accepted that she had knowingly and
deliberately done wrong. That, we can see, was therefore entirely likely to
have had an effect in causing or contributing to her dismissal. It was conduct
which was not revealing. Arguably, it was conduct upon which the employer
could rely in arguing for contributory fault, but the employer here did not
have that chance because the employer did not know that the findings were going
to be made as they were by the Tribunal.
44.
Finally, we regard with such scepticism the viewpoint that an employee
working for this length of time in these surroundings, who was not mentally ill
such as to be unable to perform her job (though plainly had medical problems)
was not someone whose behaviour would not fall within the class identified by
Brandon LJ. The decision, for the reasons we have given in respect of
contributory conduct, cannot, as we see it, stand. In particular, the lay
members would wish to emphasise that it is rarely, if ever, likely to be an
acceptable reason for misconduct not being culpable at all or blameworthy that
the employee, who has had appropriate training and time on the job, is able to
show subjectively that he or she did not know what she was doing was against
the employer’s policies.
45.
Accordingly, in our view, the appeal in respect of contributory fault
must be allowed. That has this consequence: we were invited tentatively by Ms
Bell to assess contributory fault for ourselves. We do not think that we can
do so. We have not heard the dismissing officers to whose decision the fault
may have been contributory. We have not heard the Claimant being
cross-examined. We decline to make such a finding, which is essentially for a
primary fact-finding Tribunal.
46.
We do not in this case remit the case to the same Tribunal. We have in mind
the matters set out in paragraph 46 in the case of Sinclair Roche &
Temperley v Heard [2004] IRLR 763. In particular here we note that the
sum of money ultimately awarded to the Claimant was very considerable. It is
not disproportionate for there to be a fresh hearing purely in respect of
contributory fault upon the footing that there has been an unfair dismissal
because the employer did not take into account the potential effect of
mitigation and did not explore the medical position properly.
47.
Secondly, we think that this Tribunal has so expressed itself as
potentially to be seen by the impartial observer as being so favourable toward
the Claimant’s position that we do not think it proper that the case should be
remitted to the ET for rehearing. Its decision in respect of contributory
fault is, we consider, considerably flawed.
The preliminary hearing
48.
Apart from the appeal, we had to consider a preliminary hearing on a
proposed appeal in respect of remedy. Again, we can take this appeal fairly
shortly, since we did not need to call upon Ms Coulson in the event to respond
to it, although it was an inter partes preliminary hearing.
49.
The Tribunal’s decision on remedy was split into two parts. The first decision,
made on 19 September 2012, dealt with two matters of principle which are
subject to appeal. It permitted the Claimant to claim her loss of income such
as she would have received from the Department up until 22 June 2012, less such
amounts as she had received in an alternative job which she had taken up after
dismissal as a foster carer.
50.
Secondly, it is accepted that the Claimant was entitled to claim a
pension loss which would extend to compensation for the loss she would have
received if she had remained in the employment of the Department until her
retirement, which in her case would be at the age of 68. The Claimant is now
43 years of age and was 42 at the date of the hearing. She had decided to
retrain to become a foster carer, and had her first placement in October 2011.
Subsequently, she had a second placement from 22 June 2012. At that stage, she
obtained more income per week from being a foster parent than she would have if
she had remained in the employment of the Department, subject only to the
financial cost of pension.
51.
The Tribunal found that the Claimant did intend to work until retirement
age and thought that she may well have done so, but at paragraph 20:
“[…] it may not have been possible for her to do so depending on
her health, the vagaries of everyday life, risk, mortality and so forth. Some
reduction is likely to be necessary to reflect that uncertainty. This will be
a matter for further argument on the next occasion.”
52.
As to pension, it was satisfied that the Claimant had lost a civil
service “classic” pension. It was no longer possible for her to replace that
with a comparable pension.
53.
Mitigation of loss was raised. The Tribunal found as to that, paragraph
18:
“The Tribunal found that it was reasonable for the Claimant to
become a foster carer in October 2011 and we were satisfied that once she had
embarked on that route it was reasonable to continue in that role until the day
of this Hearing, being 30 July. We find that she has reasonably mitigated her
loss to date. She does not seek any future loss, save for the pension loss,
beyond 22 June 2012.”
54.
Paragraph 19:
“We are satisfied that there is no pension attached to the role
of Foster Carer. We find that once the Claimant had committed to fostering it
is a reasonable course for her to see that through until the child who was
first placed with her is 18. We do not find that the Claimant has failed in
her duty to mitigate her loss.”
The proposed appeal
55.
The Department again raises six grounds. They fit under two heads: one
is causation; the second is a failure to mitigate. Ms Bell argues that in
applying section 123 of the ERA the Tribunal has to have regard to the loss
sustained by the complainant “in consequence of the dismissal, insofar as that
loss is attributable to action taken by the employer”. That involves the
question of whether the loss can truly be said to be caused by the dismissal.
She takes us to Lord Johnson’s expression of the principles in Simrad Ltd
v Scott [1997] IRLR 148 at paragraph 6:
“The process is a three-stage one, requiring, initially factual
quantification of the losses claimed; secondly, but equally importantly, the
extent to which any or all of those losses are attributable to the dismissal or
action taken by the employer, which is usually the same thing, the word
‘attributable’ implying that there has to be a direct and natural link between
the losses claimed and the conduct of the employer in dismissing, on the basis
that the dismissal is the causa causans of the particular loss and not that it
simply arises by reason of a causa sine qua non, that is but for the dismissal
the loss would not have arisen. If that is the only connection, the loss is
too remote.”
56.
He went on to consider the third part, the phrase “just and equitable”,
which required a Tribunal to look at the conclusion drawn from the first two
questions and determine whether, in all the circumstances, it remained
reasonable to make the relevant award, although what had to be emphasised was
that what was to be considered under the third test already had to have passed
the second.
57.
She argues that the Tribunal did not properly consider the issue of
causation. It was rare for there to be a full lifetime loss, as there would be
here in the case of the pension. The Tribunal had not given full reasons in
responding to the submissions which she made, which are set out at paragraph 17,
in saying, at paragraph 21:
“Addressing, as we do, the test in Section 123 of the Employment
Rights Act 1996, we find that the ongoing loss of pension is attributable to
the action of the Respondent in dismissing the Claimant, and we are also
satisfied that it is just and equitable that she should be compensated for that
loss, although the amount is yet to be quantified.”
58.
No losses, she submits, could be regarded properly as attributable after
October 2011 when she began work as a foster carer. She identifies five
reasons for that in her skeleton argument at paragraph 14. Secondly, she
argues that the Tribunal wrongly conflated the issue of causation of loss and
mitigation when determining the appropriate compensatory award for the purposes
of section 123 and that finding for the Claimant’s loss of earnings or pension
was attributable to the action of the Respondent in dismissing the Claimant was
perverse.
59.
As to those, we say this: when a person is dismissed, a consequence is
bound to be that they will lose the earnings that they have had from the job
from which they are dismissed. Accordingly, subject only to questions of
notice period or lump‑sum payments, the loss suffered by the Claimant
will be the loss of income for as long as she would have held the job from
which she was dismissed. If, in such a situation, a Claimant obtains
employment at the same or higher wage, then usually, though not necessarily
always, any further loss which she claims as, for instance, if the second job
were surrendered by her or lost or if she were found guilty of misconduct in
that second job, would be regarded as something entirely independent of and not
caused by the original dismissal.
60.
There may be occasions when even if there has been an intervening job,
the circumstances may be such that the loss can be said to continue. In those
cases, a Tribunal must carefully explain the reasons why it has regarded the
loss as continuing despite the intermediate position at a higher rate of pay.
That reasoning cannot, however, apply where someone takes a job at a lower rate
of pay and does not act unreasonably in doing so. Then, the headline loss is
that suffered by losing her former employment. It is mitigated to the extent
of her new salary but not completely extinguished. The partial loss continues.
61.
It will be for a Tribunal to assess, having regard to its knowledge of
employment conditions, in particular in the locality which the Claimant is
based, how long that may continue. It is not inconceivable, though much may
depend upon the age and the nature of the employment, that it would go on for a
lifetime, though that would be a less usual case than that of a loss which is
extinguished relatively quickly.
62.
Similar considerations apply in respect of pension. If pension is
treated as a separate head of loss, then again the headline loss is that of the
pension, which the Claimant prospectively would have had arising from her
service in the employment from which she was dismissed less the amount she will
have. To be offset against that would be such pension earnings as she might
reasonably be expected to achieve. That is a matter for assessment in
anticipation as best the Tribunal can.
63.
Looking at the uncertainties and the risks that apply as to the future when
assessing what is a future loss, a Tribunal will be assessing chances and not
probabilities. But there can be no doubt that the starting point established
by the fact of dismissal is the loss of a pension. Historically, so many jobs
may have been pensionable that to obtain another similar job within a short
period of time would entirely extinguish the pension loss arising from loss of the
original post. Economic conditions are such that that is less likely nowadays.
The assessment calls for a judgment from the Tribunal based upon such evidence
as is available to it. It must not speculate, but forecasting is not easy and
often has to be achieved on slim evidential foundations. Here, it is not, as
we see it, an error of law for the Tribunal to decide as a matter of assessment
what was the pension loss which the Claimant suffered, and they were entitled
to hold that it was attributable to her dismissal and went on beyond the time
that she became a foster parent in October 2011: the foster parent role was not
pensionable.
64.
It dealt with the possibilities that the Claimant would obtain a
commensurate pension scheme at paragraph 20. The classic pension scheme was
closed to new entrants some years ago and is no longer available. The Tribunal
did not go on to consider what pension earnings might possibly arise which
would be offset against the pension loss. It did not exclude such an offset.
It expressly said that the quantification of the pension loss was to be dealt
with at a subsequent hearing. Presumably offset is to be decided then.
65.
The decision which we are required to address is the decision in
principle whether the pension loss would be assessed on the basis that the
Claimant would have remained (subject to the chances and vagaries of life, as
the Tribunal put it) until retirement age to be in receipt of the classic
pension. This finding was, we consider, open to the Tribunal.
66.
It is or was open to the Respondent in assessing the loss at a later
hearing, no doubt in accordance with the terms of this Tribunal’s Judgment, to lead
evidence which might allow the Tribunal in assessing the pension loss to offset
any pension, which there was a chance the Claimant might have had, given the
fact that she had some 25 years yet until retirement and the chances that she
might not remain a foster carer throughout that period of time. But as a
matter of law we can see no fault in the Tribunal’s attribution of the loss of
earnings until 2012 and the loss of pension throughout being attributable to
the dismissal.
67.
The second point was mitigation. Here, it was accepted that, in
accordance with Wilding v British Telecommunications PLC
[2002] EWCA Civ 349, the burden of proof is on the Department. It is for the
Respondent, the employer, to show that a Claimant has acted unreasonably in
failing to mitigate. It is not for the Claimant to show that what she did was
or was not reasonable, although a positive finding to that effect will answer
the question of the burden of proof.
68.
We are told frankly by Ms Bell that no evidence was put forward by the Department
showing what other alternative posts the Claimant might have had such that she
was unreasonable to begin to work as a foster carer. The reason for that was
that there had been an application made on 30 July seeking to put off the
hearing so that there might be such evidence. That application was refused.
There has been no appeal against that refusal.
69.
Accordingly, it seems to us that it cannot be said that it was perverse
of the Tribunal to regard the Claimant’s actions as failing to mitigate the
loss. Indeed, we would point out she has succeeded not only in mitigating the
loss but in extinguishing it, albeit it took a year and a half or so to do so.
70.
The argument became that, because as recorded in paragraph 17, the
Claimant accepted in cross-examination that she would now, having had a finding
of unfair dismissal, be able to obtain employment in the civil service and a
comparable pension, and it was clear that she had not made any effort to
attempt to try and find any other work that would pay a wage and a comparable
pension, she had failed to mitigate. The Tribunal, however, felt that it was
not unreasonable for her, having taken on the commitment as a foster carer, to
seek to honour it throughout its natural course until the foster child was 18.
That seems to us a conclusion open to a Tribunal. As Ms Bell frankly accepted
in the course of argument, it would be a sad day if foster parents too readily
abandoned the responsibilities to the children in their care which they had
taken on.
71.
Accordingly, we do not see any force here in the grounds which are
raised in respect of the remedy hearing. The Tribunal was entitled to hold the
losses attributable. It was entitled to hold that there had been reasonable
mitigation. Ground 5, dealing with an alleged error of law in that the
Tribunal failed to have any sufficient regard to aspects of the Claimant’s
evidence, seeks to argue evidential matters which were sufficiently determined
by the Tribunal. In those circumstances, we are obliged to reject, at this
stage, the appeal in respect of remedy.
Overall conclusion
72.
The overall conclusion of these two linked appeals is that the decision
as to unfair dismissals stands, save that the question of contributory fault is
remitted for hearing completely afresh before a new Tribunal. It is not open
to the parties to argue Polkey, since there has been no appeal on
that. It is not open for them to argue the unfairness of the dismissal. It is
open to argue any aspect relating to contributory fault. The issues of
principle determined at the first of the remedy hearings give rise to no
arguable ground of appeal. Accordingly, such unappealable findings as to
overall quantum as were reached by the Tribunal must be accepted, subject only
to a deduction, if any, upon which the Tribunal determines, having had regard
to contribution.
