JJ Food Service Ltd v Kefil UKEAT/0320/12/SM

Appeal against a ruling that the claimant had been unfairly dismissed. Appeal dismissed.

The claimant was a manager with the respondent. In 2010 he was given a letter in respect of his conduct, the letter being described as an informal warning. The letter reminded the claimant of the deficiencies of his management style but did not warn that if he continued to behave in this way he may be dismissed. In 2011 a complaint was made by several colleagues about another manager, but also raised concerns about the behaviour of the claimant, his management style and the way in which he treated his subordinates, in particular telling them that if they did not do as he told them, they could lose their jobs. The claimant was dismissed. The ET ruled that the dismissal was unfair because dismissal was outside the range of reasonable responses of a reasonable employer. The respondent appealed.

The EAT dismissed the appeal. They rejected the argument that the ET had adopted a substitution mindset. There was no indication that the Tribunal had asked what it would have done in the light of the basic and underlying facts instead of whether what the employer did was fair. A perversity challenge was also dismissed. The Tribunal plainly felt that it was outside the range of reasonable responses to dismiss without first giving the claimant a warning which was not just a warning about what he was doing, but indicated that he might be dismissed if he went on doing it. ________________

Appeal No. UKEAT/0320/12/SM

EMPLOYMENT APPEAL TRIBUNAL

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

At the Tribunal

On 12 February 2013

Before

THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT); MRS R CHAPMAN; MR D NORMAN

JJ FOOD SERVICE LTD (APPELLANT)

KEFIL (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant MR TOM GRADY (Representative)

Employment Law Chambers 23 Cottage Field Close Sidcup Kent DA14 4PD

For the Respondent MR ABOU KAMARA (Representative)

Free Representation Unit 289-293 High Holborn London WC1V 7HZ

**SUMMARY**

UNFAIR DISMISSAL – Reasonableness of dismissal

An argument that it was perverse (or substitution) for an Employment Tribunal to hold that a dismissal of a manager for behaving in an over-authoritarian manner towards junior staff was unfair was rejected. It was open to this ET to come to that conclusion.

**THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT)****Introduction**
  1. This is an appeal against the decision of an Employment Tribunal sitting at Watford, chaired by Judge Hyams which for reasons delivered on 13 February 2011 upheld the complaint of the Claimant that he had been both unfairly and wrongfully dismissed. The employer appeals against those conclusions.
  1. Before us it is only the finding in respect of unfair dismissal which is challenged; the appeal in respect of wrongful dismissal was regarded by HHJ Peter Clark on the sift as unarguable.
**The facts**
  1. The underlying facts were these; the Claimant had been 14 years an employee of the Respondent employer which was a major distributor in the food industry. He had twice been promoted, first to Warehouse Manager and then in what was described as a promotion, though the Tribunal thought it a sideways move, to Stock Control Manager. There had been only one complaint of which there was evidence in respect of his conduct; that occurred in July 2010. It came by letter but the letter described the warning as informal. It reminded the Claimant of the deficiencies of his management style.
  1. The following April 2011, a letter of complaint was written by three members of staff and signed by ten others. The complaint was made in particular about a Mr Sitki who was the then Warehouse Manager, but it also raised concerns about the behaviour of the Claimant of whom it was said that he was acting together with Mr Sitki in some respects.
  1. The ten signatories were interviewed by management in May 2011. Most of the complaints relating to the Claimant were general in nature. They alleged mistreatment of the employees beneath him. The allegations were not generally tied to any specific date or time although there were some specific dates in respect of unfair treatment; see paragraph 15. The Claimant was called to a disciplinary hearing in respect of these allegations.
  1. The Employment Tribunal concluded in an important paragraph, for present purposes, that the employer had found the case against the Claimant proved in part. The Tribunal accepted that its reason for dismissal was expressed in the first paragraph of the letter which it wrote on 23 May to the Claimant. It is in these terms:

"Having listened to your explanations I consider them to be unsatisfactory because you have evidently abused your position of Stock Control Manager to threaten employees' job security which has created an intimidating environment for your subordinates. Furthermore, communicating in Turkish with employees who understand the language puts employees who cannot understand at a disadvantage as they are unaware of the context of the discussion. As manager you are expected to set an example and must treat all employees equally and fairly at all times."

  1. It went on to say that the employer regarded the actions as gross misconduct so he would normally be summarily dismissed, but in the light of his service demotion on a substantially reduced salary and in a substantially reduced capacity was offered. The appeal by the Claimant against that decision was dismissed.
**The Tribunal decision**
  1. In approaching what was a dismissal purportedly for misconduct, the Tribunal took the familiar four stage analysis. Thus it asked whether the employer had a genuine belief in the misconduct, secondly whether it had reached that belief on reasonable grounds, thirdly whether that was following a reasonable investigation and, fourthly whether the dismissal of the Claimant fell within the range of reasonable responses in the light of that misconduct.
  1. It accepted the genuineness of the belief, though the Tribunal accepted hesitantly that there were reasonable grounds for that belief and that the investigation had, taken as a whole, been reasonable. Accordingly, its decision as to fairness rested entirely upon its decision as to whether or not dismissal in those circumstances was within the range of reasonable responses.
  1. It expressed its conclusion at paragraph 37 in these terms:

"37. However, the Tribunal came to the clear conclusion that the Claimant's dismissal for the misconduct of which the Respondent had found to be guilty was outside the range of reasonable responses of a reasonable employer. This was for the following reasons.

37.1 The sole reason for dismissing the Claimant was the manner in which he had acted as a manager of the staff of the warehouse.

37.2 The letter of 1 July 2010 was at most an informal warning to the Claimant about his management style. It did not say that if he continued to manage in the way about which complaint had been made then he might be dismissed.

37.3 The Claimant was given no management training at that time to remedy his perceived (and probably actual) deficiencies.

37.4 The main focus of the letter of complaint at pages 78-83 was Mr Sitki and not the Claimant.

37.5 The complaints about the Claimant coincided with those about Mr Sitki. It appeared to the Tribunal (but in fact no concrete evidence was put before the Tribunal in this regard) that the Claimant had been Stock Control Manager for some time before Mr Sitki was appointed the Warehouse Manager. In any event, the Claimant was the Warehouse Manager himself from 2001 onwards, and there had not been complaints made about his management before 2010.

37.6 Thus, in the view of the Tribunal, dismissing the Claimant without having warned him formally that his management style had to change and that if it did not then he might be dismissed, especially since he had not been given any management training after being given the letter of 1 July 2010, was in the circumstances outside the range of reasonable responses of a reasonable employer."

**The appeal**
  1. Mr Grady argues that for two reasons that decision betrays an error of law. He submits first that the Tribunal adopted a substitution mindset: instead of asking objectively whether the decision made by the employer was fair in accordance with section 98, it had therefore asked what it, the Tribunal, would have done had it, the Tribunal, been the employer. That is impermissible. Secondly, he argued that closely linked though it was to substitution it could separately be said that the decision was perverse; that is that no reasonable Tribunal could possibly reach such a conclusion. It would be one which would fly in the face of reason. He reminded us of the approach taken in British Leyland v Swift [1981] IRLR 91.
  1. As to substitution, he relied in particular upon indications within the reasoning as a whole that the Tribunal had impermissibly made its own judgments about the underlying facts rather than assessed the employer's response to those facts. Thus, he argues that in paragraphs prior to paragraph 37 the Tribunal had downplayed the offences of which the Claimant was guilty. It had described them in terms which did not give full colour to what had occurred. Thus it was adopting what he described as a euphemistic approach to hold that all that was really being complained about was "management style".
  1. Turning to the critical paragraph 37 he argued that, to summarise at 37.1, as the sole reason for dismissing the Claimant, "the manner in which he had acted as a manager of the staff of the warehouse" underplayed the true gravity of what had occurred.
  1. As to perversity and the reasoning at paragraph 37, he complained that it downplayed in paragraph 37.2 the effect of the letter of 1 July. He accepted expressly in his argument that the paragraph was factually accurate. Thus he submitted that it was not an error for the Tribunal to regard the letter of 1 July as at most an informal warning. But his case was essentially that a Claimant in this position, being a manager and having managed for some years, must have been fully well aware that if he behaved as had been found to do in effect telling employees that they might lose their jobs if they did not do as he, the manager, insisted, he was liable to be dismissed. He argued it was clearly gross misconduct. For that purpose he took us to what is at our page 42, in which rules covering gross misconduct are set out in the Employer's Disciplinary and Disciplinary Dismissal Procedures. Though he was inclined on consideration to agree that deliberate acts of unlawful discrimination or harassment was perhaps aimed at behaviour other than speaking in Turkish to those who were Turkish to the disadvantage of those who were not Turkish and could not, therefore, easily understand what was being said, would come within that description. But he emphasised that physical violence or bullying was arguably capable of covering the behaviour which the Claimant had been found guilty of.
  1. In any event, the list was a list of examples. It was not a conclusive list, though he accepted that on the next page in the disciplinary procedure a careful procedure leading from formal verbal warning, to written warning, to final written warning, to dismissal was set out. Nonetheless, in the case of McCall v Castleton Crafts [1979] IRLR 218 the Appeal Tribunal had said that there is no special magic about a written warning. The fact was that he had received a shot across the bows. In short, he must have known that if he behaved as he did he was committing an act of gross misconduct which would justify his dismissal. The only significance of requiring a warning telling him of that consequence was that he might not otherwise know of it since this should have been plain to him; it was no basis upon which to conclude that he should not have been dismissed. For those reasons, the dismissal of this man was perverse. The matter was emphasised if one considered the position of those employees who had been subject to his dictatorial management.
  1. If the employees bullied by the Claimant had brought a claim for constructive dismissal it is difficult submits Mr Grady to see how those claims could have been resisted. That demonstrates the seriousness of the conduct of which the Claimant was found responsible.
**Discussion**
  1. A substitution mindset is all too easy to allege. There is a great danger which is readily apparent to those of us who sit day by day in this Tribunal that employers who do not like the result which a Tribunal has reached, but cannot go so far as to say it is necessarily perverse, seek to argue that the very fact of the result in the circumstances must indicate a substitution. That is not, in our view, a proper approach. We bear in mind that section 98 of the Employment Rights Act 1996 in subsection 4 provides as follows:

"… the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) -

(a) depends on whether in the circumstances (including the size and administrative 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 equity in the substantial merits of the case."

  1. In other words, the very business of the Employment Tribunal is considering whether once the employer has established the reason for the dismissal the decision to dismiss for that reason was fair or unfair. In order to see if a Tribunal has stepped beyond the permissible and gone outside the scope of its duty as set out in section 98(4), it is necessary to have regard to a Tribunal's decision as a whole, but what one is looking for is some indication that the Tribunal has, in dealing with a complaint of unfair dismissal, asked not whether what the employer did was fair but asked instead what it would have done in the light of the basic and underlying facts.
  1. So approached, we can see nothing in this decision which shows that the Tribunal substituted its own decision for that of the employer. Indeed, it is sometimes difficult in a case in which a Tribunal considers both wrongful and unfair dismissal for a Tribunal to clearly separate the findings of underlying fact which it has to make in respect of the wrongful dismissal claim from its assessment of how the employer acted in respect of the unfair dismissal claim; but this Tribunal did so. The only basis for suggesting that there might be a substitution (apart from the surprise of the employer at the overall conclusion) was that it downplayed the offence in what it said in paragraph 37.1.
  1. We consider to the contrary that that is an appropriate synopsis of the material which had gone before. The Tribunal had recognised already that the reason for dismissal was that set out at paragraph 18 which we have quoted in full so far as material.
  1. Substitution then put to one side, we turn to the question of perversity. Here we must be careful of not ourselves substituting our decision as it might well have been had we been the Tribunal for that which the Tribunal itself reached. It is rare for an Appeal Tribunal to interfere with the decision of an Employment Tribunal where perversity is alleged; that is because of the height of the hurdle which the Appellant must overcome. He must show that the decision reached is wholly impermissible. Various phrases have been used in different cases to describe the same result, from "flying in the face of reason" to "provoking astonished gasps from the amazed observer".
  1. Mr Grady does not shrink from alleging perversity here. We bear in mind that the Tribunal was particularly well constituted, being a Tribunal of three and containing lay members appointed from both sides of industry, to assess whether in these circumstances dismissal was or was not within the range of reasonable responses. In effect, it focused upon the fact that the Claimant had behaved in an over authoritarian manner but that this was a Claimant who had not been trained how to manage, and in that light it thought it was only fair for him to have had a warning, not that he should stop doing what he did, but that if he did not he would be dismissed for it. The point which Mr Grady makes in respect of a warning are proper points, but he takes too much from McCall v Castleton Crafts; in that case the appellant, whose appeal was dismissed by the Appeal Tribunal, Lord McDonald presiding, had been dismissed as a salesman for persistently dealing in the goods of other manufacturers; there was an express prohibition on doing so and he had had a number of verbal warnings. An Employment Tribunal found that the dismissal was fair. It was argued that the warnings had to be in writing. It was in that context that Lord McDonald for the Tribunal said at paragraph 8:

"The position in the present case is that the Appellant who was found by the Tribunal to be an intelligent man knew full well that he was contravening a rigid requirement of the Respondents when he continued dealing in other peoples' goods. He had been warned about this conduct not once but on several occasions. It was suggested that he had never had a written warning; there is no special magic about a written warning. To an intelligent man a verbal warning should be just as effective. The only advantage in a written warning might be for evidential purposes later on. No such problem arises in the present case."

  1. The issue is whether the employee has sufficiently been told or should sufficiently have realised that behaving as he did would or might lead to his dismissal. The significant point upon which this Tribunal, in our case, focussed was not the absence of a warning, nor was it that the Claimant had not been told in July 2010 that what he had done on that occasion was not appropriate. It lay in the fact that it thought that he had not been told that a consequence of further misconduct would be his potential dismissal. It was that, coupled with the fact that he had no training which would have indicated the same to him, which it summed up in paragraph 37.6.
  1. We acknowledge that Mr Grady's argument that a man in his position ought to have known that this would be the consequence has some force, but the Tribunal here was in the position properly to evaluate all the facts which had been placed before it, including what it made of the Claimant, and it must be observed that in a number of its comments it had been less than complimentary about aspects of the Claimant's behaviour. It plainly did not see him with rose tinted glasses. Despite that, the Tribunal plainly felt that it was outside the range of reasonable responses for this employer to dismiss this man, in these circumstances, for these allegations of misconduct, summarised as they had been in paragraph 18, without first giving him a warning which was not just a warning about what he was doing, but indicated that he might be dismissed if he went on doing it.
  1. We for our part, though sympathetic to much of the case which has been put before us, simply cannot conclude that the Employment Tribunal in so finding, went so far beyond reason as to be perverse. Indeed, it might be said that the over authoritarian manager is not unknown in industry and the lay members, in particular, make the point that it would be unfortunate if such managers were not warned, if the circumstances were such that they might not clearly have understood, that repeat of that conduct might lead to their dismissal.
  1. For those reasons and with that observation this appeal must be and is dismissed.

Published: 17/04/2013 14:49

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