Salford Royal NHS Foundation Trust v Roldan  EWCA Civ 522
Appeal by employee, on the grounds that the investigation carried out by the employer had been flawed, against decision by EAT that she had been fairly dismissed. Appeal allowed and ET decision reinstated.
The appellant was a nurse recruited from Singapore who worked for 4 years before being suspended in 2007 after allegations were made by a junior colleague that she ill-treated a patient. Following an investigation she was found to have behaved in an unacceptable manner and should be dismissed, the panel preferring the evidence of the nurse making the allegations to that of the appellant. That decision was upheld on an internal appeal, though the appellant accepted some of the criticisms and raised questions about the evidence. The ET found that she had been unfairly dismissed, after directing themselves in accordance with Burchell, and taking into account the seriousness of the consequences for the appellant, who without a job would be deported and which demanded that any investigation be particularly even-handed and fair. The ET adjourned the hearing to consider compensation as they had not heard the appellant on her wish to be reinstated. The employers sought to challenge the liability finding at the EAT and also, through correspondence with the ET, by attempting to review the contributory fault issue at the adjourned hearing and introduce a s98(A)(2) defence. The appeal to the EAT was rejected as an attempt to re-argue factual findings, though a full hearing was later allowed under rule 3(10). Meanwhile the adjourned hearing took place where counsel for the Trust sought to argue that the liability finding be overturned. The ET rejected that attempt but did reduce compensation for contributory fault though not under Polkey principles as there was no evidence that the dismissal would have occurred anyway even if proper procedures had been adopted.
The EAT allowed the Trust's appeal, because the factors that the ET considered had not demonstrated relevant unfairness, that they had placed too much weight on apparent conflicts and contradictions in the evidence, that they have should made a decision on s98(A)(2) point to make the judgment complete and it was open to them to do so. Elias LJ comments that the ET had correctly applied Burchell and that the dismissal was unfair
"particularly so given that here was a woman who had given service to the employers over 4 years, apparently without complaint, and there was a real risk that her career would be blighted by this dismissal."
He then considers the s98(A)(2) issue, commenting that he assumes that the ET should have addressed the point of its own motion, as it would with Polkey, even if it was not raised before them. However, it was clear that there was no evidence adduced on the point so there was no obligation to engage it.
Neutral Citation Number:  EWCA Civ 522
Case No: A2/2009/2139/EATRF
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL
HIS HONOUR JUDGE McMULLEN QC
Royal Courts of Justice
Strand, London, WC2A 2LL
THE CHANCELLOR OF THE HIGH COURT
LORD JUSTICE ETHERTON
LORD JUSTICE ELIAS
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**SALFORD ROYAL NHS FOUNDATION TRUST (Appellant)
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Mr Jonathan Cohen (instructed by Messrs Woodcocks) for the Appellant
Mr Giles Powell (instructed by Hill Dickinson LLP) for the Respondent
Hearing dates : 29 April 2010
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**Lord Justice Elias:
**1.The appellant, a Filippino nurse, was recruited from Singapore and employed by the respondent Trust from 3 July 2003 until her summary dismissal for misconduct on 12 October 2007. She successfully pursued a claim of unfair dismissal to the Employment Tribunal and was awarded compensation, but the Tribunal's conclusions were overturned on appeal by the Employment Appeal Tribunal. She now seeks to appeal that decision and to restore the finding of the Employment Tribunal.
**2.The appellant was an experienced registered nurse and was employed in the Neuro high dependant Unit (NHDU) as a staff nurse. On 22 September 2007 she was working with a health care assistant, Ms Keeley Denton. Subsequently, Ms Denton complained that the appellant had ill-treated a patient (referred to as 'PB'). The appellant was suspended pending an investigation. At the point of suspension she was merely told that serious complaints had been made.
3.An investigation was subsequently carried out by Mrs Pemberton, the Assistant Director of Nursing for Neuro-Sciences and Orthopaedics at the Trust. She interviewed Ms Denton and asked her to complete an incident report form setting out what she had seen. This was completed on 26 September. Mrs Pemberton also interviewed the appellant and took into account a statement prepared by the appellant's supervisor, Sister Lavin. She concluded that the appellant's recollection was inconsistent and vague, and that of Ms Denton was consistent and precise, and recommended that the matter should proceed to a disciplinary hearing.
4.The disciplinary hearing took place on 12 October. The allegations against the appellant were not set out in any precise way but she was given in advance of that hearing the witness statements of both Ms Denton and Sister Lavin. The hearing was conducted before Ms Citrine, the Assistant Director of Nursing, and Mr Dobson, Assistant Director of Human Resources. They concluded that the appellant should be summarily dismissed on the grounds of gross misconduct.
5.The dismissal letter sets out the grounds for the dismissal. These grounds effectively recounted each of the allegations that had been made by Ms Denton and therefore it is not necessary separately to set those out. The six factors said to constitute gross misconduct were as follows:
"i) You threw/discarded cleaning wipes which landed on the patient's face. You claimed the outcome was not intended but made no attempt to apologise to the patient or to retrieve the wipes. In fact you left an inexperienced HCA (Keeley Denton) to deal with the situation.
ii) Keeley reported that you had been tapping the patient's foot with a saturation probe with increasing force. Whilst you denied this, you could offer no explanation as to what may have occurred or why Keeley should describe it in such a way.
iii) Keeley also reported that you had slapped the patient's hand. Again, you denied this but could offer no explanation.
iv) Keeley stated that you had made an abusive gesture (V-sign) to the patient and laughed in his face. You claimed that you had made a similar hand gesture to signify peace and did not mean to offend the patient.
v) In (ii) to (iv) above it was reported that you looked around to check if your actions were being observed. You denied acting in such a way.
vi) Keeley referred to an earlier incident when you had behaved inappropriately towards a patient but she had not felt confident enough to report it at the time."
6.The disciplinary committee stated that they accepted the evidence presented by Ms Denton and preferred it to that of the appellant, whom they found to be unreliable and at times inconsistent. They considered the appellant's conduct to be wholly unacceptable and unprofessional and to warrant instant dismissal.
7.There was an appeal which was heard jointly by the Director of Finance and the Director of Nursing on 30 January 2008. In a letter sent to the appeal body by the appellant's representative prior to the hearing, the appellant accepted that she had unintentionally, but wrongly, discarded cleaning wipes which had landed on the patient's face. She also accepted that the other criticisms found in ground (i) were justified. She recognised that as a consequence her conduct had fallen below the standard required. She noted, however, that she had been subject to an assault by the patient. She denied the other allegations. She accepted that she did make a hand gesture of the 'V' sign in response to the patient having shown two fingers to her but it was, as she says she told the patient, a sign of peace designed to calm him.
8.As to ground (v), it was emphasised as a matter of importance that the side room where the patient was treated would not typically have the door open and the window would be covered by a closed blind. Therefore the contention that the appellant had looked out to see if others were around was strongly rejected; it would not have happened. The letter also queried why the word of someone with four months' experience would be preferred to someone who had provided four years' service without any - or at least any formal - complaint.
9.The appeal took the form of a re-hearing with all the witnesses giving evidence again. The appeal was rejected. The appeal body in substance found proved the alleged acts of misconduct which had been relied upon by the disciplinary committee. The appeal body stated that they too chose to believe the evidence presented by Keeley Denton in preference to the evidence of the appellant. They therefore confirmed the summary dismissal.
10.The consequences for the appellant were very significant. Not only did she lose her job, but in addition she lost her work permit and the right to remain in the United Kingdom. Also she was the subject of a criminal investigation by the police. The Employment Tribunal found that this was a consequence of the Trust's actions since the reference to the police was in accordance with Trust procedures. In the event, she was prosecuted but acquitted.
**11.The relevant legal principles are not in dispute. Section 98(1) and (2) of the Employment Rights Act provide that misconduct is a potentially fair reason for dismissal. Section 98(4) sets out the principle of fairness:
"(4) 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 … the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and shall be determined in accordance with equity and the substantial merits of the case."
- The application of that principle to misconduct cases was described in the following terms by the Employment Appeal Tribunal (Arnold J presiding) in British Home Stores Ltd v Burchell  IRLR 379, in a passage which has been cited with approval by the Court of Appeal (see e.g. Sainsbury's Supermarkets Ltd v Hitt  EWCA Civ 1588;  IRLR 23):
"What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. ….".
13. Section 98(4) focuses on the need for an employer to act reasonably in all the circumstances. In A v B  IRLR 405 the EAT (Elias J presiding) held that the relevant circumstances include the gravity of the charge and their potential effect upon the employee. So it is particularly important that employers take seriously their responsibilities to conduct a fair investigation where, as on the facts of that case, the employee's reputation or ability to work in his or her chosen field of employment is potentially apposite. In A v B the EAT said this:
"Serious allegations of criminal misbehaviour, at least where disputed, must always be the subject of the most careful investigation, always bearing in mind that the investigation is usually being conducted by laymen and not lawyers. Of course, even in the most serious of cases, it is unrealistic and quite inappropriate to require the safeguards of a criminal trial, but a careful and conscientious investigation of the facts is necessary and the investigator charged with carrying out the inquiries should focus no less on any potential evidence that may exculpate or at least point towards the innocence of the employee as he should on the evidence directed towards proving the charges against him."
12.Section 98(A)(2) provides that in certain circumstances an otherwise unfair dismissal may be rendered fair if the unfairness is merely procedural and the employer can show that the decision would have been the same even had fair procedures been adopted. The section (which was in force at the material time but has since been repealed) is as follows:
"98A Procedural fairness
(2) Subject to subsection (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure."
"Prior to the coming into force of this section, the House of Lords had established that if a dismissal was found to be unfair for procedural defects then the fact that the employer would have been dismissed in any event, even had he complied with all the proper procedures, would not generally render a dismissal fair. It could only do so in the very exceptional circumstances where a reasonable employer could dispense with all such procedural safeguards. The relevance of the fact that the employee might have been dismissed in any event went to the question of remedy and not liability: see Polkey v A E Dayton Services Limited  IRLR 503 HL overruling the earlier Court of Appeal decision in British Labour Pump Co Ltd v Byrne  ICR 347 IRLR 94."
- The effect of section 98A(2) was to reverse Polkey and to reinstate the position as it had been under British Labour Pump v Byrne (save in a situation, not material here, where the statutory procedures have been breached).
15. The consequence is that if the employer satisfies the tribunal on the balance of probabilities that the employee would have been dismissed even had fair procedures been adopted, the dismissal must be held to be fair. If the tribunal finds that there would have been a chance of such a dismissal but falling short of 50%, then the tribunal must find that the dismissal was unfair but reduce the compensation, in line with the Polkey decision itself, to take account of the risk that a fair dismissal would have occurred anyway.
**The hearing before the Employment Tribunal.
**16.The appellant pursued a claim before the Employment Tribunal for unfair dismissal and breach of the Race Relations Act. The latter claim failed, was not appealed, and I say no more about it. Prior to that hearing, the parties had been told that the Tribunal intended to consider issues of both liability and, if relevant, remedy at the same hearing. The case was heard between the 5 and 7 November 2008 and a reserved judgment was sent to the parties on 27 November 2008. The Tribunal found that the dismissal was unfair but for reasons we shall explain later, they did not in fact deal in their judgment with the question of remedy, notwithstanding that it had originally been their intention to do so.
**Tribunal's decision on liability.
**17.In the claim to the Employment Tribunal, numerous grounds were advanced, some of which were rejected by the Tribunal and have not been appealed. They need not detain us. However, the grounds included a complaint that the procedures were inadequate and also that the appellant had not been given proper details of the allegations made against her.
18.The Tribunal directed themselves in accordance with Burchell and observed that since the consequences for the appellant included potential criminal charges and deportation, the employers had to be particularly even handed and fair in the way they conducted the investigation, as suggested in A v B. There is no complaint about these directions.
19.The Tribunal then set out its reasons for finding the dismissal to be unfair in the following terms (paras 18-29):
"18. The Tribunal has some concerns about the manner of the disciplinary proceedings. Mrs Pemberton, Mr Dobson and Mr Whitfield all said, in terms, that they preferred the evidence of Keeley Denton over that of the claimant. Their reasons for doing this were that they could see no reason why she should lie, and that she was a relatively recent recruit to the Trust and that as a more junior person, it took some considerable courage for her to raise the complaint.
19. The Tribunal is concerned that because each of these persons believed Ms Denton, they did not in any way seek to question the reliability of her evidence. In particular, when Mrs Pemberton conducted her investigation, she spoke only to the claimant and Ms Denton and did not cast her net any wider in looking for witnesses who may have observed Ms Roldan's interaction with PB.
20. When Mrs Pemberton was questioned by Mr Shroot she said:-
"I did not speak to any nurses other than Lisa Lavin who had been told (about the incident). It took place in a side room. It was not appropriate to ask other staff. There are two side rooms on the unit and they are separate. You can't see in. You would have to go to the door and look in. There are blinds on the windows. They are inside rooms for a reason. A lot of intimate care. On Keeley's account everything went on in the side rooms. No one would have seen or heard anything. You can't see through a closed door and blinds. They would be closed because they had been washing him".
21. In Keeley Denton's witness statement (page 104/5) she twice refers to the claimant as looking "through the window". The suggestion here was that the claimant looked to check that nobody was watching her. This is in direct contrast to Mrs Pemberton's own beliefs.
22. On 7th November 2007 the Royal College of Nursing submitted an appeal against dismissal. At point 7 Ms Parkinson wrote "… no one can see into the side room like what is being suggested as the window and door are mostly closed and the other window is too high so there is no chance that the nurses can see what staff are doing in relation to intervention …".
23. While the Tribunal does not think that it is necessary to interview all of the staff who were working on the ward on 22nd September, we certainly feel that it would have been appropriate to have made further enquiry into whether or not the claimant would be able to "look through the window" as stated by Ms Denton.
24. Despite the explicit reference to not being able to look through the window in the letter of appeal, Keeley Denton repeated this evidence during the appeal hearing. She said "… took couple of steps – looked at window, blinds open, onto to ward – looked out window, picked up probe and hit about four times. Poss looking to see if anyone there.".
25. In view of the emphasis the respondents placed on Ms Denton's credibility, we are surprised that this glaring contradiction between her evidence and that of Mrs Pemberton was not investigated further, particularly as the respondent appears to rely on it as evidence that the alleged acts were premeditated and malicious.
26. It appears to us that there may be documentation missing in the paper trail. Lisa Lavin asked Keeley Denton ".. to put the above described incident in writing which she agreed to do. She is going to write it this evening and bring it into work tomorrow". (page 98). However, when Susan Pemberton interviewed Keeley Denton she also had to ask her "to fill out an incident report setting out what she had seen, a copy of which is at page 104-105 of the bundle". (Paragraph 4 of her witness statement). In addition, there are quite lengthy typewritten notes of the investigatory meeting between Mrs Pemberton and the claimant (pages 107 to 110), however, we have not seen any of Mrs Pemberton's notes of interview with Mrs Denton.
27. It is an essential part of the fairness of any dismissal proceedings that the person accused should know the exact nature of the allegations that have been made against him or her. This does not appear to us to have been done in the claimant's case. In Ms Denton's statement she referred to "a previous occasion about two months ago" when she said she witnessed the claimant "mimicking a patient to his face". She goes on to say that "later that same day, the claimant smacked him on the hand". While the letter of suspension and the letter inviting the claimant to a disciplinary hearing refer to "allegations regarding an incident that occurred on 22nd September 2007. "it is clear from the dismissal letter itself that the "earlier incident" was taken into account and was weighed in the balance when the panel concluded that the claimant's employment should be summarily terminated.
28. When Ms Roldan was asked to comment on this allegation at the investigatory meeting she was only able to say that "she could not recall any such incident" (page 109). Despite this no further inquiry was made to establish either the name of the patient or to obtain fuller evidence of this allegation to allow the claimant to defend herself.
29. In the circumstances, the Tribunal find that the dismissal was unfair as the respondent did not carry out an inquiry which, to our mind satisfies even the Burchill test, nor were the allegations she had to face clearly spelled out to her."
20.The Tribunal reminded themselves again at paragraph 35 that it was not their job to re-run the investigation and that they were not simply a further tier in the appeal process.
- As I have said, the Tribunal did not in their decision consider the question of remedies. They explained why in their judgment. They said that although they had heard evidence on what they termed "remedy compensation", they noted that the appellant's preferred remedy was an order of reinstatement or re-engagement under section 113. They are required to explain certain matters to the appellant and consider her wishes with respect to these orders (see s.116) and this had not been done. Accordingly, they said that the case would be listed for a later date in order to consider what orders they should make. The renewed hearing was fixed for 16 March 2009.
**Challenging the liability decision.
**22. Meanwhile, the employers sought to challenge aspects of the liability ruling in two different ways. First, by a notice of appeal dated 7 January 2009 they appealed the liability ruling to the Employment Appeal Tribunal on three distinct grounds. They alleged that the Tribunal had erred in law in various ways in concluding that the dismissal was unfair and that this was not a finding open to them on the facts; they complained that the Tribunal had failed to consider section 98(A)(2) of the 1996 Act which might have rendered the dismissal fair in the circumstances of this case; and they alleged that the Tribunal had failed to deal with the issue whether any compensation awarded should be reduced because of the appellant's contributory fault, despite the fact that the matter had been specifically raised in argument before the Tribunal.
23.Second, it emerged during the course of the hearing before us that there had been some correspondence between the employers and the Employment Tribunal following the liability decision which ultimately led to an application for a review of that decision. The employers indicated in a letter dated 15 December 2007 that they wished to call witnesses at the resumed hearing to give evidence on two issues potentially relevant to compensation, namely the Polkey principle and contributory fault. They did not at that stage suggest that they wished to raise section 98(A)(2) as a basis for overturning the finding on liability itself. The employment judge through the Tribunal office replied on 16 December saying that this would not be permitted since:
"the respondent's representative made submissions on remedy and it is not now open to the respondent to present evidence on a Polkey defence".
24.There was further correspondence and eventually on 29 January the employers lodged an application requesting the Tribunal to review part of its decision. That application was made whilst the appeal on liability was still pending. This review application reflected the third ground of the appeal only; it was said that the Tribunal had heard argument on the question of contributory fault but had made no finding about it and should do so on review. It was pointed out that the question whether the employee is guilty of contributory fault was material not just to the amount of compensation that might be awarded, but also to the question whether reinstatement or reengagement should be ordered (see section 116(3) of the 1996 Act). It is pertinent to note that no review was sought of the finding of unfairness itself.
25.By a letter dated 3 February 2008 the employment judge rejected the application for review but directed that the parties would have the opportunity to address the Tribunal on contribution at the remedies hearing. We were told by counsel that the employment judge later said that this was a mistake and that the Tribunal was merely willing to hear argument as to whether they should allow further submissions on contribution, given that they had already heard argument on it at the first hearing. However, in the event they did allow further argument both on Polkey and on contributory fault.
26.By a letter dated 5 February 2008 the EAT notified the employers that His Honour Judge Clark had rejected the appeal in accordance with rule 3(7) of the Employment Appeal Tribunal Rules on the grounds that it was seeking to re-argue factual findings and raised no issue of law. However, he added that:
"Issues of Polkey and contribution may be raised and resolved at the adjourned remedy hearing."
27.On the 2 April 2008, at a renewed oral hearing pursuant to rule 3(10) of the EAT Rules, Mrs Justice Cox allowed the appeal to go to a full hearing.
**The adjourned hearing before the Employment Tribunal.
**28.Meanwhile, the adjourned hearing took place on the 16 March 2009 and a judgment was sent to the parties on 7 May 2009. As the Tribunal observed in its decision, much of the time was taken up with Mr Powell, counsel for the Trust (who also appeared before us but did not appear at the original liability hearing) seeking to argue that the Trust should be allowed to contend that the dismissal should be found to be fair under section 98(2).
29.Counsel argued that when His Honour Judge Clark had referred to the fact that the Polkey argument could be addressed at the remedies stage, he had intended to include the question whether the dismissal might be rendered fair by section 98(A)(2). Furthermore, Mr Powell sought to adduce further evidence in support of both this argument and the related Polkey point, as well as wanting to recall witnesses on the question of contributory fault.
- The Tribunal refused to allow the issue of liability to be reopened. They held that the issue had been determined. In any event, there was no evidence before them which even began to suggest that the dismissal might have been fairly carried out even if fair procedures had been adopted. They said this:
"We heard no evidence at the liability stage to persuade us that even had any procedural irregularities been corrected, that the claimant would have been dismissed in any event. There was simply no evidence on this point ……".
- They also reaffirmed what the employment judge had said in correspondence, namely that no further evidence, whether documentary or by way of recalled witnesses, would be permitted. So far as section 98(A)(2) was concerned, it was, said the Tribunal, an attempt to "reinvigorate" the evidence with respect to a determination of unfair dismissal that had already been reached and should not be reopened. They did not accept that His Honour Judge Clark's reference to Polkey was intended to suggest that the Tribunal would reopen its finding on liability, but merely that it would consider the more limited argument with respect to compensation. As to the request to recall witnesses to give evidence relevant to compensation, the Tribunal observed that the Trust had had the opportunity to adduce any evidence material to Polkey and contributory fault at the first hearing.
32.Having rejected this application, the Tribunal heard argument on the appropriate remedy. They refused to make an order of reinstatement or re-engagement on the grounds that it was not practicable to do so, and simply awarded compensation. They considered submissions that the compensation should be reduced both on Polkey grounds and for contributory fault. The Tribunal observed that the unfairness they had found "went to more than procedural irregularities" and, as I have indicated, they held that there was no evidence to support the view that the dismissal would have occurred anyway even if proper procedures had been adopted. In the light of this finding they did not consider it appropriate to reduce the compensation in line with the Polkey principle. They did, however, reduce the compensation by 30% for contributory fault. They then assessed the compensation in line with usual principles.
33.A separate appeal was then lodged with respect to the remedy decision. It covered three principal grounds. It was alleged that the Tribunal ought to have considered whether the dismissal was fair under section 98(A)(2); that it ought to have allowed fresh evidence to be adduced on that matter and on the issues of Polkey and contributory fault; and that the compensation was assessed over too long a period. Bean J at the sift stage considered that the appeal should go to a full hearing on all these grounds.
**The Appeal to the Employment Appeal Tribunal.
*34.The grounds of appeal to the EAT were, so far as liability is concerned, that the Employment Tribunal had misdirected itself in law and/or reached a perverse conclusion in finding that the procedures were unreasonable; and that they were wrong not to consider the potential effect of section 98(A)(2). Related to this latter ground was the contention that the Employment Tribunal ought to have allowed the employers to adduce fresh evidence on that matter, as well as on Polkey* and contributory fault.
35.The EAT upheld all these contentions. They read the judgment of the Employment Tribunal as demonstrating that the Tribunal had found the dismissal to be unfair for three reasons. First, the appellant had not been given proper details of the case against her; second, that certain documents may have gone astray; and third, that the investigation had been inadequate. The EAT held that none of these factors demonstrated relevant unfairness.
36.As to the alleged failure to give details of the case, they held that whilst the nature of the complaint had not been spelt out in the letter sent to the appellant prior to the disciplinary hearing, nevertheless the allegations were clearly identified in Ms Denton's witness statement which had been provided to the appellant, and these allegations were clear and precise. Further, the EAT considered that since the appeal constituted a re-hearing, any defects at the first stage were remedied by the rehearing on appeal in accordance with the principle in Taylor v OCS Group Ltd  EWCA Civ 702  IRLR 613.
37.The EAT held that the observations about the missing documents (in paragraph 26 of the Employment Tribunal's decision) were unjustified and in any event ought not to have had any bearing on the issue of fairness. There was an earlier brief account of the incident prepared by Ms Denton, as the Tribunal had anticipated, but the EAT had seen it and it was entirely consistent with her later and fuller account. As to the other document which the Tribunal indicated might be missing, namely notes of the interview which Mrs Pemberton conducted with the complainant, in fact it had never existed. Apparently, the further evidence which the employers had sought to adduce at the adjourned hearing was directed to this issue and was intended to show that even if the missing document had been provided to the appellant prior to the disciplinary hearing, it could not possibly have changed the outcome.
38.The EAT also held that a reasonable tribunal could not properly conclude that the failure by the employers to investigate the conflicting evidence as to whether the window blinds would be closed or not rendered the procedures unfair. The EAT described this as a "distraction" because Ms Denton had witnessed what had occurred and this was sufficient to establish the misconduct relied upon and to justify the summary dismissal irrespective of whether or not the appellant had looked out of the room in the manner alleged.
- Accordingly, the EAT concluded that there was no proper basis on which the Employment Tribunal could conclude that there had been a failure to act procedurally fairly.
40.The EAT further concluded that the Tribunal ought to have dealt with section 98A(2). This was a specific ground relied upon by the employers and yet there was no reference to it in the Tribunal's decision. The EAT considered that if an employment tribunal does not expressly make a decision on section 98(A)(2), its judgment on unfair dismissal is incomplete. Even at the adjourned hearing, it was open to them to review their decision so as to allow the argument to be advanced. Furthermore, His Honour Judge Clark's reference to Polkey being considered at the adjourned hearing was intended to include the section 98(A)(2) point. The EAT further held that the Employment Tribunal ought to have allowed evidence about the documents to be adduced with respect to the section 98(A)(2) point, and in addition ought to have allowed witnesses to be recalled on the issue of contributory fault.
41.Finally, the EAT held that the Tribunal had made an error in the assessment of compensation. The error identified was that the Employment Tribunal had wrongly held that the Trust was liable for the inability of the appellant to obtain alternative employment even in the period when a possible criminal conviction was pending against her. The EAT did not consider that the Trust could be held responsible for the appellant's failure to obtain alternative employment during that period. It is conceded, in our view rightly, that this part of the decision is not sustainable given the findings of the Employment Tribunal. So that part of the appeal succeeds by consent.
**The appellant's grounds of appeal.
**42.The first ground raises the question whether the Employment Tribunal was entitled to conclude that the employers had failed to carry out a satisfactory disciplinary investigation. Mr Cohen, counsel for the appellant, submits that the EAT has erred in three ways.
43.First, it simply misunderstood the Employment Tribunal's decision on this point in two respects. The Tribunal did not make any finding that the procedure was unfair because of the lack of documents. As Mr Cohen puts it, the Tribunal's observation in paragraph 26 (see paragraph 21 above) might have involved an implication that the procedures were sloppy, but no more than that. Further, he contends that EAT appears to have acted under the mistaken impression that the Employment Tribunal had found that all the charges were inadequately framed because they had not been set out in sufficient detail in the letter notifying the appellant of the disciplinary hearing. The EAT's response was that this did not focus on the substance of the matter, which was that the appellant had seen the witness statements and well knew the nature of the case she had to meet. However, this was not the basis of the Employment Tribunal's criticism: they were not focusing on a general failure to provide sufficient details of the case but rather on the different concern that earlier incident, which was identified as ground (vi) of the decision to dismiss, had been inadequately particularised.
44.Second, contrary to the finding of the EAT, it was simply wrong to say that this earlier incident did not figure in the decision of the Trust. They did not just focus on the incident on the 22 September but stated in terms in the dismissal letter that they accepted the complainant's evidence, and this included the earlier incident which the appellant had denied.
45.Third, Mr Cohen submitted that the EAT had been wrong to say that the issue relating to evidence about the window blind being closed was immaterial. It was potentially very important and the Tribunal were justified to focus on it. It provided some basis for testing the complainant's credibility, and it also went to the heart of the gravity of the allegations. If the employers believed that this was a deliberate and cynical act of misconduct that would be more grievous than an inadvertent or even spontaneous single incident.
46.The second ground of appeal is that the EAT were wrong to say that the Tribunal should have reopened the question of liability at the adjourned hearing. They had already determined the question of liability by then and it would have been wrong to reopen it even if they were in error in failing to have formally given a ruling with respect to it. In any event, it was obvious from the remedies decision what they would have said had they addressed the issue, and therefore any error was immaterial. They stated in terms in the remedies' judgment that there was simply no evidence capable of sustaining a section 98(A)(2) defence.
47.Finally, Mr Cohen submitted that the EAT was wrong to say that the Trust should have been allowed to adduce further evidence on any matter. They had been told from the start that liability and remedy should be heard together, and they should have been ready to adduce evidence relevant to both these issues at the first hearing. Indeed, they did adduce evidence on contributory fault and even made submissions on it. Moreover, it would be ridiculous to allow the Trust to recall all their key witnesses in order to try to satisfy the Tribunal that the appellant did commit the misconduct alleged when they had already heard evidence from those witnesses with respect to the fairness of the dismissal.
48.Mr Powell seeks to uphold the EAT's decision, essentially for the reasons they gave.
49.Before considering these grounds of appeal, I would make this preliminary observation. It is not disputed that the Tribunal properly directed themselves in accordance with the principles established in Burchell v British Home Stores, as further explained in a case of this kind by A v B. In these circumstances, save at least where there is a proper basis for saying that the Tribunal simply failed to follow their own self direction, the EAT should not interfere with that decision unless there is no proper evidential basis for it, or unless the conclusion is perverse. That is a very high hurdle. In Yeboah v Crofton  EWCA Civ 794**;  IRLR 634 Mummery LJ said that this would require an "overwhelming case" that the decision was one which no reasonable tribunal, properly appreciating the law and the evidence, could have made.
50.In my judgment, that is the test that has to be applied here.
51.I agree with Mr Cohen that the EAT misunderstood the basis of the Employment Tribunal's criticisms of the disciplinary process. I do not accept that the observation made in paragraph 26 of the decision of the Employment Tribunal about the failure to produce certain documents formed a basis for the finding of unfairness. It is not one of the two matters which they identified in paragraph 29 of their decision when they summarised the reason why they considered the procedures unfair; and when they referred to the documents they merely observed that "there may be documentation missing in the paper trail". This is not even a categorical finding that there were documents missing, still less that the failure to produce them rendered the dismissal unfair.
- Equally, in my judgment Mr Cohen's submission that the Tribunal was merely limiting its criticism of the lack of particulars to the failure to clarify the charge with respect to the earlier incident is also correct. I do not accept that the Tribunal was making the formalistic point that even though the witness statements set out in some detail the nature of the incident on the 22 September, this was inadequate without the charges again being rehearsed in the letter informing the appellant of the disciplinary process. In my judgment, a fair reading of the Tribunal's decision shows that they were focusing solely on the failure properly to particularise the earlier incident. I have no doubt that they were entitled to say that this was a material procedural flaw. The fact that there is more than one incident would inevitably colour the gravity of the charge. Furthermore, had the incident been identified in more detail, that might have assisted the appellant to recall and explain her conduct; she might even have been able to show that she could not have been involved in the incident at all.
53.I do not accept, as the EAT thought, that the earlier incident was peripheral and that in deciding to dismiss the Trust focused only on the principal and later incident. As I have said, the dismissal letter refers in terms to the earlier incident which the Trust believed had occurred as described by the complainant. It cannot, in my judgment, be fairly assumed that this matter did not weigh with the employers.
54.In my judgment, the Employment Tribunal was also entitled to conclude that given in particular the fact that the case turned on the conflict of evidence, the employers ought at least to have tested the evidence of Ms Denton where it was possible to do so. The one objective area where the evidence might have been tested concerned the question whether it was likely that the appellant would have been able to see out of the window or whether the blinds would have been drawn. If there is indeed a strong practice that the window blinds are drawn, as the appellant and Mrs Pemberton both asserted, then this would have cast doubt on this aspect of the complainant's account.
55.It is common experience that if part of a story begins to unravel, other aspects may do so also. Doubts begin to emerge, and the interpretation of actions changes. Mr Powell properly makes the point that it was only at the Employment Tribunal that Mrs Pemberton gave evidence that the blinds would have been closed - this providing an explanation why it would have been futile to see if other members of staff might have seen anything - but the potential significance of this matter was firmly drawn to the appeal body's attention. Mrs Pemberton's evidence merely confirmed that there was potentially considerable force in the appellant's contention on this point.
56.The EAT thought that this was immaterial because there was still evidence from Ms Denton of the wrongdoing within the room relating to the treatment of the patient. I respectfully disagree. That assumes the very reliability of her evidence which this further investigation might have put in issue. Moreover, as the Tribunal observed, an additional significance of this allegation was that it suggested that the appellant's acts were premeditated and malicious. Even if the employers had found that the appellant had committed the acts alleged - and, in part, the misconduct was admitted - they may well have treated the matter less severely if instead of treating her actions as premeditated, they had taken the view that here was a respected nurse with years of good service who had in the heat of the moment acted foolishly in response to aggressive conduct from a hostile patient.
57.Finally, if the evidence showed that the blinds were probably open, that would have undermined Mrs Pemberton's reasons for not seeking to discover whether anyone else may have witnessed any of the incident.
58.In my judgment, therefore, the Employment Tribunal were entitled to find, subject to the section 98A(2) issue, that that the dismissal was unfair for the reasons they gave. This is particularly so given that here was a woman who had given service to the employers over 4 years, apparently without complaint, and there was a real risk that her career would be blighted by this dismissal. It would certainly lead to her deportation and destroy her opportunity for building a career in this country. In my judgment, the case of A v B, not specifically referred to in the EAT's judgment, reinforces the justification for the Tribunal's conclusion.
59.In my judgment, section 98(A)(2) does not change matters. It is true that it was a matter which had been raised by the employers in their response to the unfair dismissal challenge, although we were told that there was no argument about it actually advanced before the Tribunal.
60.There is authority in the EAT that when assessing compensation, Polkey should be addressed by the Tribunal of its own motion even if the point is not expressly raised, at least where there is evidence putting the point in issue: see Red Bank Manufacturing Ltd. v Meadows  ICR 204. It seems to have been assumed below that this applies likewise to the application of section 98(a)(2). No challenge has been mounted to that principle in this case. So we shall assume it to be correct even in a case such as this where the employer is legally represented and makes no submissions on the point. However, it is plain from the remedies' decision that the Tribunal concluded that there was no evidence adduced to put the point in issue. On that basis there was no obligation on the Tribunal to engage with the issue at all.
- Nor, in my judgment, can the Tribunal be criticised for refusing to allow the Trust to raise the section 98(A)(2) point at the adjourned hearing. The parties had been told that issues of liability and remedy would be heard together and any submissions going to liability should have been advanced at the initial stage. Indeed, absent a formal application for a review of the finding of unfair dismissal - and as I have said the application for review which was made did not encompass this issue - there was, in my judgment, no jurisdiction for the Tribunal to revisit its conclusion that the dismissal was fair. They would have been depriving the appellant of the fruits of her victory without a proper jurisdictional basis for so doing.
62.Admittedly, the Employment Tribunal could have reviewed the decision of their own motion, but I do not think it can possibly be said to have been an error of law for them not to have done so. In my view, the Tribunal were right to allow the order to stand.
63.For similar reasons I think the Tribunal was right not to allow fresh evidence, either in respect to the section 98(A)(2) point, or indeed with respect to Polkey and contributory fault. The parties had been told to deal with all aspects of the case at the first hearing. They did so and the employers even made submissions on contributory fault. Indeed, their complaint at that stage, made in both the appeal and review applications, was that notwithstanding that fact, the Tribunal had made no finding about it. In those circumstances I can see no proper basis for saying that the Tribunal erred in law in failing to allow the employers to have a second bite of the cherry.
64.I accept that difficulties do sometimes arise where liability and remedy decisions are heard on different occasions. Sometimes nothing is said about whether at the liability decision parties should also deal with section 98A(2), Polkey and contributory fault, and there may be some genuine misunderstanding as to what evidence needs to be adduced at which stage. However, it cannot fairly be said that any such uncertainty prevailed here. There was no unfairness in the Tribunal reaching its decision on Polkey and contributory fault on the basis of the evidence already called at the first hearing.
65.I would add that so far as the section 98(A)(2) point is concerned, the Trust wished to adduce evidence going only to the question whether all relevant documents had been disclosed. They wanted to demonstrate that there was only one document not disclosed, namely the earlier and briefer statement of the incident from the complainant. The Trust wanted to show that this was at one with the later statement and that therefore its omission did not prejudice the appellant. However, since I have concluded that failure to produce this document was not a reason for the finding of unfairness in any event, it follows that this evidence, even if admitted, could not have had any effect on the conclusion that the dismissal was unfair.
66.It follows that, in my judgment, the appeal must succeed. I would restore the decision of the Employment Tribunal.
67.There are, however, two wider points of significance arising out of this appeal. The first is this. It cannot in the normal run of things be appropriate for witnesses to give evidence first on the question of liability, and then separately and at a later date, to give similar, if not identical evidence, to deal with the question of contributory fault. An economic and efficient approach, in line with the overriding objective, would normally require witnesses to deal with all relevant evidence they have to give on one occasion.
68.Of course there will be exceptions to that, particularly with small employers where the factual evidence relating to the dismissal and questions relating to remedies, for example on the practicability of reinstatement, may be given by the same person. There it will generally be appropriate to leave evidence on the latter to a later stage, if it arises. However, the notion that the Tribunal must hear all the witnesses twice, first considering the significance of their evidence with respect to the fairness, and then on contributory fault, would unnecessarily add to the length and cost of the hearing without any obvious benefit.
69.It is true in the recent case of London Ambulance Service NHS Trust v Small  EWCA Civ 220;  IRLR 563(CA) Lord Justice Mummery observed, without laying down any fixed rule, that it would often be helpful for a tribunal when looking at questions of fairness, contributory fault, Polkey and so forth, to set out their relevant findings of fact separately with respect to each element. That is not, however, the same as suggesting that the witnesses should given their evidence in any such compartmentalised way.
70.Furthermore, it is important that where there is a split hearing, the parties before the Tribunal clarify with the Tribunal precisely what issues the Tribunal wish to have determined at which stage. If there is doubt about whether a party needs to adduce evidence on a particular point or whether it should be left to a later hearing, that ought to be raised with the Tribunal.
71.The second point raised by this appeal concerns the approach of employers to allegations of misconduct where, as in this case, the evidence consists of diametrically conflicting accounts of an alleged incident with no, or very little, other evidence to provide corroboration one way or the other. Employers should remember that they must form a genuine belief on reasonable grounds that the misconduct has occurred. But they are not obliged to believe one employee and to disbelieve another. Sometimes the apparent conflict may not be as fundamental as it seems; it may be that each party is genuinely seeking to tell the truth but is perceiving events from his or her own vantage point. Even where that does not appear to be so, there will be cases where it is perfectly proper for the employers to say that they are not satisfied that they can resolve the conflict of evidence and accordingly do not find the case proved. That is not the same as saying that they disbelieve the complainant. For example, they may tend to believe that a complainant is giving an accurate account of an incident but at the same time it may be wholly out of character for an employee who has given years of good service to have acted in the way alleged. In my view, it would be perfectly proper in such a case for the employer to give the alleged wrongdoer the benefit of the doubt without feeling compelled to have to come down in favour of on one side or the other.
**Lord Justice Etherton:
**73.I agree that the appeal should be allowed and the decision of the Employment Tribunal restored for the reasons given by Elias LJ.
Published: 14/05/2010 09:35