Prior v City Plumbing Supplies Ltd UKEAT/0535/11/CEA
Appeal against the Tribunal’s findings as to contributory fault and the rejection of the remedy of reinstatement or re-engagement, following a successful claim of unfair dismissal. Contributory fault appeal rejected, reinstatement appeal allowed and remitted for re-consideration and reasons.
The claimant was dismissed when he was sent to prison for 18 weeks (to serve 9 weeks) after he broke a restraining order. The Tribunal found that the Claimant was not dismissed for misconduct but on the basis that his contract of employment had been frustrated by the prison sentence to which he had been made subject; but, the Tribunal concluded in effect, that sentence was not long enough to create a frustration and, therefore, no reason for dismissal falling within section 98(1) of the Employment Relations Act 1996 had been established. The Tribunal said
"It seems to us that the respondent's management had had difficulties with the claimant and saw the prison sentence as an opportunity to terminate his employment, but unfortunately for them erroneously using, as a reason, frustration of contract."
The Tribunal reduced the award by two thirds for contributory fault and simply said that the claimant's application for an order for re-engagement was declined. The claimant appealed both decisions.
The EAT rejected the first appeal, saying the ET was entitled, on the facts as found, to find contributory conduct which was causative of the dismissal. However, the ET had given no reasons at all for their decision as to reinstatement/re-engagement; that issue was remitted to the ET to re-consider and to give reasons.
Appeal No. UKEAT/0535/11/CEA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX
At the Tribunal
On 27 March 2012
HIS HONOUR JEFFREY BURKE QC, MR B BEYNON, MR J R RIVERS CBE
MR P PRIOR (APPELLANT)
CITY PLUMBING SUPPLIES LTD (RESPONDENT)
Transcript of Proceedings
For the Appellant MR NATHANIEL CAIDEN (of Counsel)
For the Respondent Written Submissions**SUMMARY**
UNFAIR DISMISSAL – Contributory fault
The Claimant was dismissed after having been sent to prison for breaking a restraining order while on a suspended sentence. He was dismissed, not for misconduct but because the Respondent believed that the contract of employment was frustrated. The Employment Tribunal held that no fair reason for dismissal had been demonstrated but that the Claimant was guilty of contributory conduct, assessed at two-thirds. They rejected reinstatement/re-engagement.
On appeal by the Claimant (there being no appeal against the finding of unfair dismissal:
(1) The ET were entitled, on the facts as found, to find contributory conduct which was causative of the dismissal. The EAT would not interfere with their decision as to the amount of reduction.
(2) The ET had given no reasons at all for their decision as to reinstatement/re-engagement; that issue must be remitted to the ET to re-consider and to give reasons.**HIS HONOUR JEFFREY BURKE QC****The appeal**
- This is an appeal by Mr Prior, the Claimant, against two aspects of the Judgment of the Employment Tribunal sitting at Reading and presided over by Employment Judge Hardwick, the Reasons for which were sent to the parties on 22 June 2011.
- By that Judgment, the Tribunal found that Mr Prior had been unfairly dismissed, that he had contributed to his dismissal to the extent of two thirds, and that he should not be re-engaged. The Tribunal ordered compensation in a figure which was agreed, in the light of those conclusions, at £6,050.29. The appeal is brought against the Tribunal's findings as to contributory conduct and against the rejection of the remedy of reinstatement or re-engagement.
- Before the Tribunal Mr Prior was represented by Mr Graham of counsel and the employers, City Plumbing Supplies Limited, were represented by Mrs Bullingham, who is in house counsel. Yesterday morning, the Employment Appeal Tribunal received a request from Mrs Bullingham for this appeal, which had been fixed for today's date for some time, to be adjourned on the basis that she was suffering from ill health. The Deputy Registrar of the Employment Appeal Tribunal rejected that application just before lunchtime yesterday, on the grounds that there was time for counsel to be instructed on behalf of the Respondent. Mrs Bullingham was notified of that decision straight after the time at which that decision was made.
- Just before 4.30pm yesterday afternoon, the Tribunal received another email from Mrs Bullingham, saying that it was too late to instruct counsel, particularly because the files were at her home, and asking if the appeal could be heard on the basis, from the Respondent's side, of her written submissions as embodied in her skeleton argument dated 8 March. She did not seek to appeal against the Deputy Registrar's decision or to invite us, nor have we been invited this morning, to consider adjourning the hearing; and we have proceeded with the hearing. It seems to us that there was plenty of time, after the decision to turn down the application made yesterday, for counsel to have been instructed on the Respondent's behalf. If, in the course of the argument on this appeal which we have heard from Mr Caiden of counsel on behalf of the Claimant, we had found that there was some point in respect of which we needed further information from somebody who had been before the Tribunal, then we would have acted accordingly; but we have not found that to be necessary; and we have heard the appeal to its end so far as Mr Caiden's submissions were concerned. We have taken Mrs Bullingham's written submissions fully into account.
- The Claimant was employed as a driver by the Respondent who, as its name suggests, is a specialist in plumbing and heating supplies. In May 2008 he was convicted of an offence of homophobic behaviour towards a neighbour, was given a community sentence and was made subject to a restraining order. In December 2008 he was again convicted of such an offence; and this time he was given a 12 week sentence of imprisonment suspended for 12 months. In June 2009 the Claimant was arrested while at work for breaking the restraining order. The Respondent, as a result, gave him a final written warning for bringing it into disrepute, to remain on his file for 12 months. In March 2010 the Respondent received a complaint from a customer about the Claimant's behaviour. He was given a further written warning in respect of that incident; but that was subsequently overturned on appeal.
- In May 2010 the Claimant was sentenced for a breach or breaches of the restraining order to six weeks' imprisonment and the suspended sentence of 12 weeks' imprisonment, which had been passed on him in December 2008, was activated; so he received a total sentence of 18 weeks' imprisonment, of which, pursuant to the usual principles, he would have had to have served half.
- As a result, he was dismissed. He appealed against his dismissal. By that time he was out of prison. His appeal was unsuccessful. The Tribunal found that the Claimant was not dismissed for misconduct but on the basis that his contract of employment had been frustrated by the prison sentence to which he had been made subject; but, the Tribunal concluded in effect, that sentence was not long enough to create a frustration and, therefore, no reason for dismissal falling within section 98(1) of the Employment Relations Act 1996 had been established.
- They said this at paragraph 24:
"It seems to us that the Respondent's management had had difficulties with the Claimant and saw the prison sentence as an opportunity to terminate his employment, but unfortunately for them erroneously using, as a reason, frustration of contract."
- It is clear from the decision that the Respondent had also relied on "some other substantial reason" as a potentially fair reason for dismissal, but that the Tribunal rejected at paragraph 22 of their Judgment, for reasons into which we need not go, there being no appeal, or, to be more accurate, cross appeal in the context of this appeal by the Claimant against the finding of unfair dismissal.
- It may be thought that, if the Respondent had decided to dismiss for misconduct, the prospects of a finding of unfair dismissal might not have been great; but that is not what happened. The finding that there was an unfair dismissal is one which, as we have said, has not been the subject of an appeal and, therefore, stands.
- As to contribution, the Tribunal said this at paragraphs 27 and 28 of their Reasons:
"27. As regards contribution, the catalyst for the dismissal was the imprisonment of the Claimant. There has been previous difficulties with him including a final live final written warning. The customer complaint dimension for which there was a final written warning was overturned on the basis that there was insufficient evidence.
28. In our view there has to be significant contribution on behalf of the Claimant to his dismissal although we do not put it at the level of 100% as suggested by the Respondent. We conclude that it is just and equitable that the basic and compensatory award should be reduced by a percentage of two thirds to reflect the significant contribution by the Claimant to his departure from the Respondent."
- As to remedies, the Tribunal said nothing at all in their Reasons. In their formal Judgment, they simply said this as to reinstatement or re-engagement, "The Claimant's application for an Order for re-engagement is declined". They then went on to set out in detail how they arrived at their compensation figure.
- We will address first the appeal against the contributory conduct decision. Mr Caiden, on behalf of the Claimant, puts forward two broad submissions, namely:
(1) The Tribunal made errors of law in concluding that the Claimant had been guilty of contributory fault. They failed to specify the conduct on which they were relying and they failed to determine whether and how such conduct contributed to the dismissal.
(2) They failed to give adequate reasons for their conclusion. The reasons they gave were not sufficient or, to use an expression familiar in this Tribunal, "Meek" (i.e. Meek v City of Birmingham District Council  IRLR 250) "compliant".
- Mrs Bullingham, on behalf of the Respondent, submits in her skeleton argument that the Tribunal made none of these errors, that they made all the necessary findings in their Judgment and that they gave adequate reasons.
- Mr Caiden's argument takes as its point of departure the well known tests for contributory conduct set out in the Judgment of Brandon LJ in Nelson v British Broadcasting Corporation (No 2)  ICR 110, namely:
(1) Was there conduct in connection with the unfair dismissal which was culpable or blameworthy?
(2) Was the unfair dismissal to some extent caused or contributed to by that conduct?
(3) Was it just and equitable to reduce the assessment of compensation by the amount proposed?
- The need for it to be established that the blameworthy conduct alleged to some extent caused or contributed to the dismissal was emphasised by the Employment Appeal Tribunal (Browne Wilkinson J presiding) in Hutchinson v Enfield Rolling Mills Ltd  IRLR 318, in which at paragraph 9 the EAT said:
"Without reference to authority, it is clear from that subsection that in order to apply it the Tribunal must find that the action of the employee caused or contributed to the dismissal and the amount of the reduction is the amount which is just and equitable having regard to that finding. In our view, there has to be a causal link between the actions of the employee and the dismissal. You cannot simply point to some bad behaviour of the employee and say, 'By reason of that matter, we are going to reduce the amount of the compensation'."
- It would seem that Nelson was not cited in Hutchinson; but the two authorities on this point speak with one voice. The need for the blameworthy conduct to be identified by the Tribunal and proved and that a reasonable belief in misconduct on the employer's part is insufficient is trite to anyone who has any experience of the law of unfair dismissal. Mr Caiden has referred us in his skeleton argument to two authorities to that effect. They are London Borough of Lewisham v James UKEAT/0581/03 and Cornwall County Council v McCabe EAT/147/97, but we do not need to refer to those Judgments any further. The proposition for which Mr Caiden has cited them is well known.
- Mrs Bullingham relies on paragraph 26 of the decision of the National Industrial Relations Court in Maris v Rotherham County Borough Council  IRLR 147. That paragraph, insofar as material, says this:
"The matters to which the complaint relates in the subsection are words of wide import and bring into consideration all the circumstances surrounding the dismissal requiring the Tribunal to take a broad commonsense view of the situation and to decide what, if any, part the Applicant's own conduct played in contributing to his dismissal and then, in the light of that finding, decide what, if any, reduction should be made in the assessment of his loss."
- That quotation is not in any way inconsistent with the principles set out in Nelson. The causative link must be between the conduct which is said to be blameworthy and the dismissal, not the unfairness of the dismissal. In considering that issue, the Tribunal must take a broad commonsense view of the situation and decide what part, if any, the employee's conduct played in causing or contributing to the dismissal. See also Hollier v Plysu Limited  IRLR 260, per Stevenson LJ.
- Finally, it is well established law that the decision of an Employment Tribunal on the amount of reduction for contributory conduct can only be interfered with on appeal in an exceptional case (see Nelson again, per Brandon LJ at page 127G and Stevenson LJ at page 130E; see also Warrilow v Robert Walker Ltd  IRLR 304 at paragraph 22).
- All of these principles are well known to those who have any substantial professional dealings with the law of unfair dismissal and are wholly uncontentious. That is perhaps demonstrated by the fact that all of the authorities to which we have been referred come from the 1970s and 1980s when the law of unfair dismissal and the principles by which that law was to be applied were being considered and laid down by the Court of Appeal, the National Industrial Relations Court and the Employment Appeal Tribunal.
- As to the law relating to reasons, we need say no more than that the well known case of Meek requires the Tribunal to set out reasons sufficient to inform the parties as to why they have respectively lost or won on each individual relevant issue. There are, of course, other authorities in this area, but it is not necessary to go into them for present purposes.
- We turn then to Mr Caiden's submissions. His first submission is that the Tribunal did not state what conduct they found to be blameworthy conduct and did no more in paragraphs 27 and 28 of their reasons than to give a narrative. We do not know, he submits, whether they had in mind only the imprisonment or whether they also had in mind the previous difficulties to which they refer in the second sentence of paragraph 27, or even whether they also had in mind the customer complaint for which there was a written warning, which was overturned, to which they refer in the third sentence of paragraph 27.
- Mrs Bullingham, who represented the Respondent before the Tribunal, has, however, informed us in her written submissions that the only conduct on which she relied as contributory conduct was the Claimant's being imprisoned or, to be more full, his breaking of the restraining order which led to his sentence of imprisonment and his inability to work at all for a substantial period, that conduct having taken place in the context of the previous history. She submits that the reference by the Tribunal to the overturned warning is one which makes it clear that the Tribunal were not relying on that as part of the blameworthy conduct.
- We accept Mr Caiden's submission that the overturned warning could not be treated as such conduct; but there is, however, nothing in the Tribunal's Judgment which suggests that the Tribunal did so treat it. On the contrary, the Tribunal pointed out in the last sentence of paragraph 27 that the warning had been overturned. The purpose of including that sentence in paragraph 27 must have been to show that they had eliminated it or not considered it as contributory conduct. In our judgment, it is plain from paragraph 27 what conduct the Tribunal did regard as established and as blameworthy, namely the Claimant's being imprisoned. That that had happened was not in dispute and, in any event, is set out in the Tribunal's findings of fact at paragraphs 7 to 11.
- We see no reason to construe paragraph 27 as including the previous difficulties as contributory conduct, particularly when we are told by Mrs Bullingham that that is not the way the case was put to the Tribunal on behalf of the Respondent. All the Tribunal should be taken to have been saying there was that the imprisonment occurred in the context of the previous difficulties. That they were entirely entitled to say.
- As to causation, Mr Caiden submits that the Tribunal have not made any finding as to whether the conduct they found to be contributory conduct caused the dismissal or contributed to it, and that the finding of the Tribunal that the Respondent saw the prison sentence as an opportunity to terminate his employment and to treat the employment as frustrated has the effect that there could not be a finding that the imprisonment had caused the dismissal or at least not to the extent of two thirds.
- We do not accept those submissions. Had the Respondent gone through a proper procedure and dismissed for misconduct, the same would have been highly likely to have been said by a Tribunal which considered such circumstances; but that would not have led to any difficulty in the proof of a causative link between the conduct and the dismissal. As we have already said, the fairness of the dismissal is not relevant to the question of a causative link between the dismissal and the conduct which is said to be blameworthy, which has to have been proved to have existed irrespective of the state of mind of the employer.
- We do not understand why the fact that the employer relied unsuccessfully on frustration as its reason for dismissal or as the process by which the contract came to be terminated should have any effect upon the Tribunal's consideration of whether there was blameworthy conduct, whether that blameworthy conduct caused or contributed to the dismissal or the extent of such contribution. Mr Caiden suggested that, because the Tribunal on the balance of probabilities found that there was no frustration and also no other substantial reason for dismissal, the Tribunal could not have assessed contributory fault at higher than 50 per cent. In our judgment, that argument is without substance, and we reject it for the reasons we have set out.
- Once blameworthy conduct and causation were established, and causation is demonstrated as established by the Tribunal's first sentence in paragraph 27, "As regards contribution the catalyst of the dismissal was the imprisonment of the Claimant", it was for the Tribunal to assess the amount of the reduction which they regarded as just and equitable. We set out the law earlier, we as an appellate Tribunal can only interfere with such an assessment if there has been some error in principle or perversity. No perversity is alleged in this case. Mr Caiden submitted that the quantification should have been lower because the Claimant had been in double jeopardy, in that he had been given a warning for being arrested for breaking the restraining order and then suffered the penalty of dismissal and imprisonment on top. We see no reason why the Tribunal should be said to have been in error of law or in principle in not assessing matters in that way. What they took into account is clear. What figure they arrived at as the appropriate reduction was entirely a matter for them. Even if we were to think that a different reduction were right or just, it would not be open to us to interfere with the Tribunal's assessment which they made, having heard the evidence and having seen the witnesses, including the Claimant.
- We turn then to reasons. The reasons in paragraphs 27 and 28 in the area of reduction for contributory conduct are not full; but they do not need to be. They need only to inform the parties why they have respectively won or lost. The Tribunal set out in paragraph 27 what was the contributory conduct. They set out that it was causatively linked to the dismissal. At paragraph 28 they set out that it was just and equitable to come to an assessment not of 100 per cent of contributory fault as sought by the Respondent but one of two thirds. Those conclusions must be read in the light of all their findings of fact. If they had expressly used words such as, "In coming to our apportionment we have taken into account the facts that we have found", then there could be no possible criticism of their reasons; but they did not need to say that expressly, their Judgment must be read as a whole. Reading the Judgment as a whole, it is sufficient to convey to both parties why they respectively won and lost; and we see no basis on which it could be said that their reasons fell short of what is required by the law. Thus the appeal against the Tribunal's decision on contributory conduct fails.
- We turn then to the appeal in relation to reinstatement and re-engagement. There, the position is very different. The Tribunal have given no reasons at all for rejecting what, it is not in dispute, was a live issue before them, namely whether an order of re-engagement or reinstatement should be made. Whether reinstatement was a live issue before them as opposed to re-engagement we doubt; for there was evidence before the Tribunal that the post which Mr Prior had previously had no longer existed; thus reinstatement would have been a matter of some difficulty. But that re-engagement at least was a live issue is not in dispute. In her skeleton argument, Mrs Bullingham has put forward, in effect, reasons which were reasons that the Tribunal might have given to explain their decision that there should be no re-engagement or reinstatement; but unfortunately those reasons are simply not given, even in the barest outline, by the Tribunal. There are no reasons for that aspect of this Tribunal's decision; that must be an error of law.
- There are two routes which we could take in order to enable the parties to address this unfortunate situation. The first is this. We could, under what is known in the Employment Appeal Tribunal as the "Burns/Barke" procedure, now ask the Tribunal to give to the Employment Appeal Tribunal their reasons for their decision on reinstatement and re-engagement. We are told that not only was there discussion about those issues but there was some evidence about them, although apparently not very much.
- The problem with that course is, firstly, that the reinstatement/re-engagement part of this appeal would have to be adjourned until we had reasons from the Tribunal. There might be difficulties in assembling the same panel of the Employment Appeal Tribunal without some delay and it is, in theory at least, possible that the reasons given might then be the subject of an argument that they were unsatisfactory, ending up with a remission to the Tribunal in any event.
- The alternative course is to remit the issue of reinstatement or re-engagement to the Tribunal for them to reconsider. We have not been able to ask Mrs Bullingham which course she on behalf of the Respondent would have preferred, for the reasons which we have set out earlier. Mr Caiden has suggested that the second course is probably one which will cause less delay and less expense; and we agree. Therefore, we intend to allow the appeal against the decision of the Tribunal which rejected the application for an order for re-engagement and remit the issue of reinstatement/re-engagement to the same constitution of the Tribunal, assuming that such a constitution can be achieved, for that Tribunal now to reach a decision afresh on those issues and to give reasons for their decision.
- Had Mrs Bullingham been present, we would have sought to achieve agreed directions as to what form any new hearing before the Tribunal should take; but in her absence we cannot do that. It will be for the Tribunal to decide what form of hearing is required, whether live evidence is necessary or whether they can make a decision on written submissions alone. The Tribunal will, no doubt, issue directions after consulting the parties in due course.
- The result, therefore, is that the appeal is dismissed in so far as it relates to contributory conduct. It is allowed, in so far as it relates to reinstatement and re-engagement, in the terms that we have just set out.
Published: 13/05/2012 22:18