Appeal No. EAT/980/93
	I N T E R N A L

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 14 February 1994

	Before

	THE HONOURABLE MR JUSTICE WATERHOUSE

	MR J H GALBRAITH CB

	MRS T MARSLAND

DARCARS LTD	APPELLANTS

MR C T A BABATUNDE	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

	PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellants	MR C BAYLISS
	(OF COUNSEL)
Wallace-Jones
108 Beaufort Street
London SW3 6BU

	MR JUSTICE WATERHOUSE:  In this case the Appellant employers allege that an Industrial Tribunal sitting at London (North) on 3 September 1993 reached a decision that was wrong in law.  The unanimous decision of the Tribunal was that the Respondent employee had been unfairly dismissed by the Appellant but they went on to find that he had contributed to his dismissal by his own fault and assessed the degree of that fault at 50%.  The result was an award of compensation reduced by 50% the reduction applying both to the basic award under Section 73 of the Employment Protection (Consolidation) Act 1978 and to the compensatory award under Section 74 of that Act.

	The brief facts of the case are that the Appellants are a small company of car dealers and repairers, with two directors, Mr Smith and Mr Heaphy.  The Respondent had begun work with the Appellants as a car mechanic in May 1989 but there was no written statement of the terms of his employment at any time.  Various complaints were made by the Appellants about the Respondent's working record between May 1989 and January 1992.  It is unnecessary to go into detail but the finding of the Tribunal was that attendance and time-keeping generally within the Appellants' organization had been poor and that management control had been slack.  The result was that on 14 January 1992 a number of employees were given written warnings.  The Tribunal accepted that the warnings were justified and, in particular, that the warning issued to the Respondent was justified.  They found also that the Respondent refused to accept the warning and that he returned the letter in which it was set out. 

	It appears that there were problems in the relationship between the Respondent and Mr Heaphy subsequently and some further complaints about time-keeping were made but Mr Heaphy acknowledged in his evidence that there had been an improvement in the Respondent's record and disciplinary action on that ground was neither contemplated nor justified.  However, on 25 March 1992 there was an altercation between the Respondent and Mr Heaphy about a car that required repair.  Mr Heaphy believed that the repair had not been carried out by the Respondent despite a request that he should do so.  Mr Heaphy lost his temper:  offensive and abusive language was used by him in the presence of a customer and another employee and the Respondent replied in similar vein.  It was accepted that Mr Heaphy used profane language at work and he made use of such language in the course of the altercation.

	Mr. Smith, the other director, was not present at this incident but he did overhear the exchange from his office.  There was no discussion about the matter between him and the Respondent, according to the finding of the Tribunal, but he did issue a final written warning to the Respondent by letter dated 25 March.  The Respondent was given an opportunity to appeal against the decision and he prepared a written statement of his case, which was set out in a five-page letter.  The circumstances in which the Appeal was considered by Mr Smith are in dispute.  It was the case for the Appellants that Mr Smith discussed the appeal letter with the Respondent before making any decision about the matter but the finding of the Tribunal was that he discussed the events with Mr Heaphy only.

	There followed a meeting on 3 April 1992, which was attended by the Respondent and by other employees, but not by Mr Heaphy.  At that meeting a letter was handed to the Respondent bearing the same date, acknowledging receipt of the Respondent's written appeal and saying this:

	"I studied with care the contents of your letter and indeed I further discussed the situation with you in detail at a meeting on 2 April 1992.  Further, I have discussed the situation in detail with Mr Heaphy."

	The finding of the Tribunal in relation to that assertion in the letter was that, whatever may have been Mr Smith's intention, there had been no such meeting on 2 April 1992.  The letter went on to refer to bad time-keeping and poor workmanship by the Respondent but the Respondent had not been given any notice that disciplinary action was being considered on either of those grounds before he received the written warning letter of 25 March 1992.  Moreover, the only matters in issue on 25 March 1992 were the circumstances in which the altercation had occurred between the Respondent and Mr Heaphy and the conduct of the Respondent in relation to that altercation.

	Having regard to that short history, the view of the Tribunal was that no reasonable employer applying his mind fairly to the events of 25 March 1992 and the other criticisms then levelled against the Respondent would have concluded that a final written warning was the appropriate response.  Their view was that Mr Heaphy was at least as culpable as the Respondent in relation to what had been said that day and that it was Mr Heaphy who had set the tone of the exchange by abusing the Respondent in the way that he did.

	In the end however, it was the events of the 3 April 1992 and the subsequent history that were crucial to the dismissal of the Respondent.  Having been handed the letter of that date in the presence of other employees, the Respondent was required to countersign the letter.  According to the Tribunal, the Appellants claimed initially that the counter-signature was required as evidence of receipt by the Respondent but that reason was expanded in the course of the hearing below:  it was said that the counter-signature was intended to provide evidence of acceptance by the Respondent of Mr Smith's right to make the decision and of the Respondent's acceptance of that decision.  The Respondent, however, did not accept either that the letter was factually accurate or that the decision it reflected was fair or reasonable.  The upshot was that Mr Smith made it clear that a refusal to sign would be regarded as wilful disobedience of a lawful order and would result in dismissal. 

	The matter lingered on until 8 April 1992 when there was another meeting between the Respondent and Mr Smith.  On that occasion the Respondent was handed a letter confirming the consequence of his refusal to countersign the earlier letter.  The letter of 8 April contained the sentence:

	"I pointed out to you that I was not asking you to agree with my decision by signing the letter.  I simply wanted you to acknowledge my decision by your signature."

	The letter went on to record the Respondent's refusal and to point out that, unless he did sign the letter, he would be summarily dismissed for failing to follow reasonable orders.  It also contained a statement at the end that the decision of Mr Smith was final and said: 

	 "I look forward to you signing the enclosed copy of the letter (of 3 April)." 
The Respondent had taken advice and he attended the meeting on 8 April with a letter, which he wished Mr Smith to read.  The Respondent said at the meeting that he was prepared to sign Mr Smith's letter of 3 April provided that he could also add qualifying words to the effect that, in acknowledging receipt of the letter, he was not to be taken as accepting the accuracy or fairness of its contents.  However, Mr Smith refused to read the Respondent's letter and he refused also to allow the Respondent to add any words to the letter of 3 April.  By then Mr Smith, according to the Tribunal, regarded the issue as one of principle and a challenge to his right to manage.  He accordingly dismissed the Respondent with immediate effect.

	The Tribunal considered fully the circumstances of the dismissal and applied their minds, first of all, to a submission on behalf of the Appellants that there was an implied term in the Respondent's contract of employment to the effect that they had the right to determine their disciplinary procedures and that they could impose such rules as they thought appropriate to the circumstances of a particular case.  It was also a part of the submission that there was an implied term that the Respondent should obey lawful orders and that, accordingly, the Tribunal should find that there was a breach by the Respondent in failing to obey a lawful order when he refused to countersign the letter of 3 April 1992.

	The view of the Tribunal was that there was no implied term in the contract that the Respondents could impose any disciplinary rules that they thought appropriate to the circumstances of any particular case and they set out reasons for not accepting that proposition.  They went on to say, however, that, had they felt able to include the suggested term as part of the contract, they would not have considered in the circumstances of the case that it would have been reasonable for the Appellant to insist upon the Respondent countersigning the letter of 3 April for a number of reasons.  The first was that the letter contained material inaccuracies and, in particular, referred to a meeting that had not taken place.  Secondly, it reflected a decision that no reasonable employer could have reached and followed an inadequate appeal process.  Thirdly, the Respondent's concern that signing would be tantamount to an acceptance of the validity of the decision was lent weight to by the Appellants' unreasonable refusal to allow the Respondent to add qualifying words or to consider the letter that he had offered to them at the meeting of 8 April.

	In seeking to support the appeal against that decision on the first issue before the Industrial Tribunal, Mr Bayliss, who appeared below on behalf of the Appellants, submits that the Tribunal misdirected themselves in law when they rejected the Respondent's argument that it was an implied term of the contract of employment that the Respondent was obliged to accept the orders of an employer provided that such orders were lawful.  From what has already been said in this Judgment, it will be apparent that the implied term, as the Tribunal understood it, was put in rather wider terms with reference to the disciplinary procedures when the matter was considered below.  This Appeal Tribunal has, however, considered the argument on the basis that it was an essential part of the Appellants' case before the Industrial Tribunal that it was necessary to imply such a term in order to give efficacy to the contract between the Appellants and the Respondent.

	The difficulty that faces Mr Bayliss is that he has sought to persuade the Appeal Tribunal that the lawfulness of an order should be considered in a separate compartment from the question of the reasonableness of the order.  Mr Bayliss's reason for doing that is that the Tribunal below reached the firm conclusion that the order to the Respondent to countersign the letter of 3 April 1992 was unreasonable and it is obviously difficult for Mr Bayliss to assert, as a matter of law, that the Tribunal were not entitled to reach that conclusion.  He suggests, therefore, that there was an error of law on the part of the Tribunal because they should have confined their attention initially to the question whether or not there was the implied term asserted and then gone on to decide whether or not there was a breach of that term by the Respondent in his refusal to countersign the letter.  

	For out part, we find that suggested approach quite unreal in the context of industrial relations.  Of course, in general, employees are expected to obey the lawful orders of their employer but any consideration of an implied term to that effect does involve introduction of the test of reasonableness.  It cannot be suggested that the Appeal Tribunal should lay down as a matter of law that there is to be implied into the contract between employer and employee the requirement that he should obey what are described as lawful orders, even if those orders are unreasonable.  Looking at the matter more closely in relation to the facts of this case, we are not aware of any decision binding on the Industrial Tribunal or this Appeal Tribunal to the effect that an employee is required to countersign a letter of the kind written on 3 April whether or not he agrees with its terms.  The weakness of the argument on behalf of the Appellants is illustrated by the fact that they shifted their ground, according to the Tribunal, in the course of the hearing below.  Having asserted initially (as we have said) that the counter-signature was required simply as evidence of receipt, the reason for the requirement was expanded to include evidence of acceptance by the Respondent of Mr Smith's right to make the decision and of the Respondent's acceptance of that decision.

	Our conclusion is that Mr Bayliss has not been able to identify a point of law linked to the alleged implied term that might have a prospect of success before the Tribunal if this case were to proceed to a full hearing.  The fact is that any term to be implied for reasons of business efficacy would have involved a requirement that any relevant order to be obeyed should be a reasonable order and the Appellants would have no prospect of upsetting the finding of the Industrial Tribunal that it was unreasonable for the Appellants to have insisted upon the Respondent countersigning the letter of 3 April for the reasons that they set out in detail.

	Mr Bayliss has, therefore, been driven back to an assertion that the decision made by the Tribunal below was perverse or one that no reasonable Tribunal could reach on the evidence before them.  The precise formulation of this ground does not matter because we can find no acceptable basis for the criticism.

	The argument hinges to a substantial extent on the suggestion that the Tribunal failed to evaluate the evidence properly because they rejected the evidence of Mr Smith and Mr Heaphy to the effect that there had been a meeting between Mr Smith and the Appellants to discuss the contents of his appeal letter before the letter of 3 April 1992 was formulated and handed on that date to the Respondent.  The assertion that the Tribunal were wrong to make that finding is based on the suggestion that Mr Smith and Mr Heaphy gave positive evidence to the effect that there was a meeting on 2 April and that it was noted in a diary kept by Mr Smith.  It is pointed out also that the letter of 3 April referred expressly to a meeting the previous day.  It is submitted that it is highly unlikely that Mr Smith would include such an assertion in the letter if it was not true.  Mr Bayliss asserts that in contrast, the evidence of the Respondent about the matter was vague and conflicting and that the evidence of certain other witnesses called on his behalf was similarly vague on the question whether or not there had been a meeting or meetings between the Respondent and Mr Smith before the letter of 3 April 1992 was drafted.

	No notes of evidence have been produced before us to substantiate the assertion that there was no evidence to justify the Tribunal's conclusion about the alleged earlier meeting on 2 April.  Mr Bayliss said that the Tribunal's finding was inconsistent with what was set out quite carefully in the particulars annexed to the Respondent's originating application but, when one looks at paragraph 8 of those particulars, it can be seen that there was no assertion by the Respondent of a separate discussion of his appeal letter before he was handed the Appellants' letter to countersign.  On the contrary, although the Respondent made a mistake in giving the date of the occasion when he was handed the letter to countersign, it is quite clear that he was alleging in his originating application that there had been one meeting only with Mr Smith following the submission of his own appeal letter on 31 March 1992.

	In these circumstances, we are unable to accept that the Tribunal made an unreasonable finding in relation to the chronology of the meetings in the light of the evidence before them.  They made it plain that they rejected the suggestion that there had been a meeting before 3 April to discuss the appeal letter.  They made that point more than once in the statement of full reasons and the suggestion that their finding was perverse or contrary to the evidence must be rejected in the absence of any material to support that suggestion.  It must be said also that the finding by the Tribunal that the dismissal was unfair did not depend wholly or mainly on the absence of a meeting on 2 April 1992.  What stands out from the history is that the events on 25 March 1992 were augmented by allegations of bad time-keeping and poor workmanship to justify the Respondent's dismissal without any adequate opportunity being given to him to deal with these other matters.

	The finding by the Tribunal was that the final warning, given on the basis of a combination of those criticisms, was not an appropriate response and there is no doubt that, whether or not there had been a discussion on 2 April 1992 between the Respondent and Mr Smith, the Appellants would have been found to have dismissed the Respondent unfairly. The Tribunal were satisfied that there were major reasons in addition to the absence of a meeting on 2 April 1992 for the Respondent refusing to countersign the letter of 3 April without adding qualifying words.

	Overall, it is clear that the Tribunal looked at this case thoroughly.  It examined the Respondent's own behaviour realistically and came to the conclusion that he had displayed a degree of obstinacy and folly, which was both culpable and blameworthy.  They assessed his contribution at the substantial figure of 50% and we can see no ground upon which an appeal could succeed before the full Tribunal.