Kurumuth v NHS Trust North Middlesex University Hospital UKEAT/0524/10/CEA

Appeal by claimant against dismissal of unfair dismissal and breach of contract claims where the claimant's immigration status was in doubt. Appeal allowed on the breach of contract claim but other appeal dismissed..

The claimant was a health care worker, originally from Mauritius. In 1997 she was refused leave  to remain in the UK but was allowed to stay pending an appeal. That appeal was not determined by the time of her appointment in 2003 but the respondent later requested further information and were dissatisfied with the claimant's response and instigated a disciplinary procedure.  She was dismissed as there was no evidence that she had the right to work. In subsequent ET proceedings the dismissal was found to be automatically unfair but no compensation was awarded as she would have been dismissed in any event.

In this appeal, the claimant's principal argument was that the Tribunal ought to have decided her immigration status.  The EAT rejected that submission as, although the ET has misdirected itself on the issue of the burden of proof, they must take "a non-pernickety and non-fussy approach" and the ET's analysis was consistent with the reasonableness approach.  They also confirmed that there was no error of law in the ET's approach in reducing the compensation to zero.


Appeal No. UKEAT/0524/10/CEA



At the Tribunal

On 22 March 2011





Transcript of Proceedings



For the Appellant

For the Respondent
MS LAURA BELL (of Counsel)

Instructed by:
Messrs Beachcroft LLP Solicitors
100 Fetter Lane



Polkey deduction

Reason for dismissal including substantial other reason

The ET did not err in holding that the Claimant would have been dismissed because of the Respondent's view that it could not continue to employ her in any event given the uncertainty in her immigration status. It was not necessary for the Employment Tribunal or the EAT to decide that, a matter for the specialist agency and tribunals.

There was no challenge to the finding of unfair dismissal.

**Polkey** correctly applied. *By consent* the appeal was allowed in part as the ET did not award her compensation for the week it would have taken to organise a proper hearing, and in failing to award her compensation for unlawful suspension and dismissal without notice.**HIS HONOUR JUDGE McMULLEN QC**
  1. This case is about unfair dismissal in the context of the immigration rules and the right to work. It is the judgment of the court to which all members appointed by statute for their diverse specialist experience have contributed. We will refer to the parties as the Claimant and the Respondent.
  1. It is an appeal by the Claimant in those proceedings against the judgment of an Employment Tribunal sitting at Watford under the chairmanship of Employment Judge Mordsley, registered with reasons on 23 August 2010 following a one-day hearing. The Claimant was represented by a solicitor. A Notice of Appeal and skeleton argument have been submitted by Mr David Renton of counsel. At the hearing the Claimant has been represented by her husband Mr Napaul. The Respondent was represented by Ms Bell, of counsel. The Claimant made claims of unfair dismissal and breach of contract. The Respondent contended it dismissed her fairly under section 98(4) for reasons potentially fair under section 98(1) and (2), of the Employment Rights Act 1996. It denied the contractual claims.
**The issues**
  1. The essential issues for the Employment Tribunal were to determine the fairness of the dismissal and the contractual rights associated with the Claimant's claim to notice pay and to pay during a period of suspension. The Tribunal decided in the Claimant's favour on unfair dismissal. It awarded her only the basic award, reducing her compensatory to zero, so she came out with £2,275. The Tribunal dismissed the claims for breach of contract. She appeals against the latter and also the implication that the dismissal was unfair only on the grounds of inadequate procedure. What she really seeks is a remedy of reinstatement and if not, then compensation not limited to what is generally described as procedurally unfair dismissal.
  1. Directions sending this appeal to a full hearing were given in chambers by HHJ Peter Clark who formed the view that the question was whether the Claimant was entitled to work or not. He was clear that there was a reasonably arguable prospect of success in respect of the contractual claims.
**The legislation**
  1. So far as is relevant to the now narrow scope of the appeal, the relevant provisions of the Employment Rights Act 1996 are the following:

"98 General

(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show—

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it—

(a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do,

(b) relates to the conduct of the employee,

(ba) is retirement of the employee,

(c) is that the employee was redundant, or

(d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.

(4) In any other case where the employer has fulfilled the requirements of subsection (1), 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 employer's 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 and the substantial merits of the case."

  1. The Employment Tribunal cited none of above, although there is an implied reference to some of this about which more below.
**The facts**
  1. The Respondent is a large university hospital in North London. The Claimant was a Healthcare support worker in the x-ray department at its North Middlesex site. She began as a "bank" worker in 2001 and became a permanent member of staff in 2003. She is Mauritian. She came with her family in 1992 with a work permit. In 1997 she was refused further leave to remain in the UK but appealed. When appointed permanently in 2003, she produced to the Respondent a letter from the Home Office, the gist of which is that she was entitled to continue to take on paid work until her appeal was determined. It never has been. Documentation must be retained by the employer of a person who is subject to immigration control.
  1. Following the introduction of a new points-based system and information reaching the Respondent, a check was made of the Claimant's status. The Tribunal found that at a number of formal and informal meetings, opportunity was given to the Claimant to say what her status was. The Respondent was dissatisfied with this response. It made checks via the UK Border Agency and took legal advice. It decided to put the Claimant through a disciplinary procedure set up by letter of 12 January 2010 for hearing on 21 January 2010. This was vacated at the Claimant's request. A further letter of 21 January confirmed the new date of 28 January. (We will correct the error in the Tribunal judgment to that effect) The letter never reached the Claimant because it was sent to the wrong address. Nevertheless, that was the date on which a hearing was conducted and the Claimant was dismissed. The relevant officer went through the documentation and he formed the view that there was no evidence that the Claimant had any right to work and that the Claimant acknowledged that she had nothing further to say. The papers including the passport were in the hands of the UK Border Agency. As late as 22 December 2008, it was writing in the following terms.

"I am not therefore able to give you a precise date when Ms Kurumuth's application will be addressed but we will look to resolve the matter as soon as circumstances permit and will contact Ms Kurumuth if we require further documents or evidence at that time."

  1. That is the same file reference as is on the letter of 7 July 1997 and in the letter to her MP, therefore, there is a straight line between these dates spanning 11 years. We are told that the matter has now reached a critical stage and a letter is expected from UKBA any day.
  1. The Respondent had first suspended the Claimant without pay and then dismissed her by a letter on 29 January 2010 without notice. The Tribunal found that because of the absence of any proper procedure involving the Claimant, the dismissal was unfair. No point is taken about automatic unfairness contrary to the repealed statutory dismissal procedures under the Employment Act 2002. This case is an old-style, unfair dismissal in ordinary terms and it was unfair, contrary to section 98(4), because a reasonable procedure was not adopted to deal with the position confronting the Respondent. The Claimant accepts, and this is relevant to the primary finding by the Employment Tribunal as to what the reason for dismissal was, that the Respondent had a genuine belief that the Claimant did not have the right to work. That qualifies under section 98(2)(b) but not 98(2)(d) which is to do with legal enactments since there is no evidence of an actual breach. Nevertheless, the Respondent discharged its duty to provide a reason and that is not challenged by the Claimant. What she does say through Mr Renton's argument is that this ought not to be treated as simply procedurally unfair dismissal but as going beyond and into substance.
  1. As to compensation, the Tribunal reduced it to nil applying the Polkey v AE Dayton Services [1988] ICR 142 HL principle. She would have nothing further to say had there been a proper hearing at the investigative stage, there was nothing more that could been done, and dismissal would have occurred in any event. The Tribunal found against her on the two breach of contract claims.
**The Respondent's concessions**
  1. The Respondent has today accepted the force of the Claimant's contractual arguments and consents to the appeal being allowed in respect of the loss of notice pay and the withdrawal of pay during the period of suspension. The affect of this is that the appeal is allowed in respect of those two matters and the Respondent will pay the Claimant the sum of £5,006.15 within 21 days. In addition, the Respondent concedes that the application of the Polkey principle requires two discrete stages. If the Claimant would have been dismissed on the day she was for the same reason, had the procedure been correct, then it would be just and equitable to reduce compensation to zero. If a proper procedure would have taken some time to go through and the result would have been the same, it would be just and equitable to award compensation during the period of employment up to the date of the putative dismissal. See Mining Supplies (Longwall) Ltd v Baker [1988] ICR 676.
  1. The Employment Tribunal did not address that second feature and the Respondent says that it would take a week, based on the previous experience of listing this disciplinary hearing, and that it will concede that much of the Claimant's case. So the appeal on that ground is allowed too, which is to award £267.69 equivalent to a week's pay as compensation.
**The Claimant's case**
  1. In a carefully argued written submission by Mr Renton, adopted by Mr Napaul on behalf of his wife, it is contended that the Tribunal ought to have decided definitively the immigration status of the Claimant. From that, the only conclusion would be that she was not precluded from working and that all of the Respondent's actions were unlawful. Secondly, Mr Renton contends that this was effectively a substantive unfair dismissal and that the Claimant should have open to her the statutory right to be considered for reinstatement or re-engagement and thereafter to compensation in full and not simply for a procedural failing. A point is made about the amount of compensation awarded in that it did not include a loss of statutory rights. The contract points are no longer live.
**The Respondent's case**
  1. On behalf of the Respondent it is contended that since it is not in dispute that the Respondent's officers had a genuine belief that the Claimant was not definitively entitled to work, the dismissal was fair. The procedure adopted by the Respondent was unfair because there was no proper opportunity for the Claimant but it would have made no difference. Although the burden of proof is placed upon the Claimant in the Tribunal's judgment, expressly juxtaposed against section 98(1)(b) of the statute (see paragraph 35), what the Tribunal really meant was that internally the Claimant had to come up with some documents to satisfy the Respondent's officers that she was entitled to work, as to which see paragraphs 8, 9, 26, 27 and 33.
  1. Ms Bell invites us to take a generous view of this Employment Tribunal's judgment, notwithstanding it got the burden of proof wrong because that relates in fact the Respondent's obligation to provide a reason for dismissal and that is not now in dispute. The Tribunal does not impose a burden of proof in respect of section 98(4). We should take a generous approach to this Tribunal which failed to cite the statutory provision it was applying for elsewhere in the judgment there are copious examples of the Tribunal considering what the Respondent did and that can only be within the context of deciding what was reasonable for the purpose of section 98(4). As to reinstatement, this case proceeded on the basis of liability only at the outset and there is no injustice in this case because there was unfairness in the procedure only.
**The legal principles**
  1. The legal principles to be applied in this case emerge from two judgments of the Court of Appeal dealing with similar circumstances; Bouchaala v Trusthouse Forte Hotels Ltd [1980] IRLR 382 and Elens Klusova v London Borough of Hounslow [2007] EWCA Civ 1127. It should be noted that in the latter the Court upheld the EAT's judgment that the Respondent had shown a genuine reason for the dismissal of the Claimant; namely that the Claimant was not shown to be able to work lawfully in the United Kingdom. Polkey v AE Dayton Services [1987] IRLR 503 is engaged where there is a finding that there has been a procedural defect and also in circumstances where the dismissal would have occurred in any event, or on a sliding scale for the allocation of a percentage chance.
  1. The Respondent has acted with great credit in conceding the two contract points before us. The view taken on the sift by HHJ Peter Clark was the view we took that the Respondent has properly conceded. It is simply this. While the Claimant was employed, she could not be suspended without pay and while she was employed she should be provided with notice pay. So the Respondent has properly allowed this part of the appeal to succeed. So has Ms Bell in respect of that very modest addition to the Polkey jurisprudence.
  1. We turn then to the principal submission of the Claimant which is that we ourselves should decide her immigration status. Let us recall what the current state of play is. Since 1997 as we see it, there has been no change in the Claimant's position in which she was entitled to work. The only clear representation is in 1997 but since that letter was renewed under the same case reference in 2008, there is what would seem to us to be a continuing position that she can work. But that is not a matter that we can decide upon ourselves. This is an Immigration decision. There is a pillar of administrative justice which deals precisely with this specialist field. Nor is it necessary for our decision for that determination to be made because what we are concerned with is whether the Respondent had reasonable grounds for dismissal in the light of its genuine belief that the Claimant was not entitled to work.
  1. An employer is to take all steps which are reasonable in the circumstances to investigate. It did do, and it did not get a clear statement from the UKBA. In Klusova, Mummery LJ criticised the hydra of the immigration bureaucracies for failing to act promptly and clarify the position, and that criticism would no doubt be made by him again in respect of the response of the authorities to the Claimant's representations herself and by her MP in this case. Nevertheless, what is in issue is the reasonableness of the Respondent's conduct.
  1. There is an error in the Employment Tribunal's approach to the burden of proof. The Tribunal said, "The burden of proof in establishing a right to work is clearly on the Claimant and she has failed to prove that". In itself, that is a misdirection. It is placed immediately next to a reference to section 98 but section 98 is not to do with the burden of proof of the Respondent. It is upon the Respondent to show what the reason was. It is accepted that the Respondent gave a genuine reason that it believed the Claimant was not entitled to work. It thus discharged section 98(1) and then went on to reasonableness. Had it continued in that vein, after that initial direction, there would undoubtedly have been an error, although it would be tempered by the fact that the Tribunal found in favour of the Claimant on unfair dismissal albeit on procedural grounds.
  1. Nevertheless, we are enjoined to take a non-pernickety and non-fussy approach to employment tribunals (see [Fuller v The London Borough of Brent]() [2011] EWCA Civ 267. Ms Bell has demonstrated to us that the Tribunal throughout its judgment is doing what could only be described as an analysis consistent with a section 98(4) approach to reasonableness.
  1. The evidence which the Tribunal heard was that there would be no change in the Respondent's position and that remains the case. However, during the course of today in response to our question, instructions have been given to Ms Bell about the Claimant's future employment. We do not in any way underestimate the force with which she puts forward her wish to see her rights vindicated and to be reinstated by this very hospital. Its response is this.

"The Claimant is entitled to apply for employment with the Respondent at any time. Any application would be dealt with in accordance with the normal application process. Unfortunately there is a 'recruitment freeze' in place in the Respondent's organisation as a result of large budget cuts. Applications cannot be processed until the freeze is lifted."

That we hope gives some crumbs of comfort to the Claimant because it does not indicate that there is a barrier to her employment. She will be treated in the ordinary way. Sadly, in the ordinary way in the health service today, employment is hard to come by.

  1. The approach of the Respondent to contractual claims are very useful in looking at the approach to unfair dismissal. The central question now, is whether there should have been a reduction. On analysis of this judgment the Tribunal has decided that the Claimant was unfairly dismissed. She does not have the limited finding of an automatically unfair dismissal under section 98A, procedural fairness. She has a straightforward finding of unfair dismissal in the way tribunals have been doing it for 40 years.
  1. The next question is the remedy and in light of the decision about what the Respondent would do, it is hardly surprising that there is no specific consideration of reinstatement. In our judgment so rare is the order for reinstatement (less than 1% of cases) that we very rarely see it considered in judgments. In any event, this was a judgment on liability. A tribunal is entitled even in a liability judgment to pay attention to Polkey because it often directs the minds of the parties. That is what has happened here. The specific direction under Polkey has not been given and it is for that reason that Ms Bell sensibly concedes that £267-odd is due to the Claimant by way of justice and equity if the rule were applied. The other issue is whether or not compensation should be reduced to zero apart from the week that it would take to go through the procedure. There was ample evidence for the Tribunal to come to that conclusion and we see no error of law in that approach.
  1. The appeal will be allowed in respect of the contract claims and the claim for a week's pay. Otherwise the appeal will be dismissed.

Published: 26/04/2011 16:56

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