Appeal No.	 EAT/572/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 29 September 1998

Before
HIS HONOUR JUDGE J HICKS QC
SIR GAVIN LAIRD CBE
MISS D WHITTINGHAM

MR P A NUNES DE SOUZA	APPELLANT

THE GOVERNING BODY OF ERNULF COMMUNITY SCHOOL	RESPONDENTS

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	IN PERSON	

	JUDGE J HICKS QC:     Mr De Souza, who was the Applicant before the Industrial Tribunal and is the Appellant before us, was employed as a teacher by the Ernulf Community School.  He had been a teacher for a number of years in that school, which is a comprehensive school with children between the ages of 11 and 18 and a total of some 900 pupils.

	In January 1996 a new Principal took office and was concerned about Mr De Souza’s performance as a teacher, and there were a number of processes of monitoring or assessment of Mr De Souza’s competence and performance which are set out in the Extended Reasons for the decision of the Industrial Tribunal, but the details of which are not necessary to recite in full for our purposes.

	At the end of that process and having, it would seem, begun the formal procedures appropriate to a case of lack of capability to the stage of a single warning, but without going through the full process, the employers dismissed Mr De Souza and he applied to the Industrial Tribunal complaining of unfair dismissal.

	Although it is not immediately apparent at a first reading of the Industrial Tribunal’s Reasons it is quite clear on looking at the employer’s Notice of Appearance and then considering more closely the way in which the reasons of the Industrial Tribunal for its decision are expressed that a major question, perhaps the major question, before the Industrial Tribunal was what was the reason for Mr De Souza’s dismissal in a situation where one might, from the facts and history as I have briefly recited them, expect the reason for dismissal to be one of lack of capability, but in which the reason put forward by the employer and accepted by the Industrial Tribunal was what is described in the relevant section of the Employment Rights Act 1996 as “some other substantial reason”, the “other” being because that section has referred to certain specified reasons, of which one is lack of capability.

	It is the way in which that is dealt with by the Industrial Tribunal which founds the one ground relied upon in Mr De Souza’s Notice of Appeal, because having in paragraphs 1 to 5 of that Notice of Appeal set out the formal and historical matters, paragraph 6 alleges that the Tribunal erred in law in that the Tribunal in paragraph 11 of its Decision relies upon the view taken by the Respondent as determining whether the reason to dismiss was properly “some other substantial reason”, without considering whether such view held by the Respondent was a reasonable conclusion for the Respondent to draw.

	The way in which a Tribunal should deal with the question of “what is the reason for a dismissal” is summarised by reference to the authorities in paragraph 801 of Harvey on Industrial Relations, as follows:

“In determining whether or not a dismissal is fair there are two stages.  First the employer must establish the principal reason for the dismissal and shows that it falls within the category of reasons which the law specifies as being potentially valid reasons.

	Then, after a reference to multiple reasons which does not apply here, the paragraph continues:

“If he relies only upon one reason and that fails it follows that the dismissal will be unfair, even if another reason might successfully have been argued.  Second, it is necessary for the Tribunal to be satisfied that in the circumstances the employer acted reasonably in treating the reason as a sufficient ground for dismissing the employee.  He will not be in a position to do this if the reason in fact relied upon or indeed an important ground constituting that reason is neither established in fact nor believed to be true on reasonable grounds.”

	In this case it is clear that the employer’s case before the Industrial Tribunal was indeed that the reason was not lack of capability in itself, but some other substantial reason in accordance with the statute.

	In the Employer’s Notice of Appearance there is a recital of events, as advanced by the employer, which refers to concerns about Mr De Souza’s performance, to a first written warning having been issued in accordance with the school’s disciplinary procedures for dealing with lack of capability and the fact that that warning was confirmed after an appeal, and then to a disciplinary meeting held on 6 November 1996, and expressly describes that as having been: 

“ ...convened under the capability procedure to consider progress, assessments of the second external inspector and also an assessment undertaken by the principal himself at the request of the applicant. ...”

	The Notice of Appearance continues:

“During those considerations at that meeting it became obvious to the principal that the applicant was either unwilling or unable to accept the assessments of his performance which had been made by two senior external inspectors, one senior Cambs. LEA inspector and the principal, himself an experienced and well qualified science teacher ...” [Mr De Souza being a science teacher]

	Then a little later in the Notice of Appearance there is this passage:

“Rather than continue with a process with which the applicant had made it clear he was unable to co-operate, the principal decided to suspend the applicant and to take the matter to his governors.  The principal’s recommendation to the governors’ panel was that as he was unable to achieve any progress through the school’s capability procedure and there was no reasonable prospect of enabling the applicant to achieve an acceptable level of performance since he was unable or unwilling to accept the assessments being made by senior and highly experienced professionals, then he [that must be the principal] had no confidence in the applicant’s ability to adequately and safely carry out his teaching duties with the students in his classes and therefore the applicant should be dismissed from his post at the school.”

	So it is apparent on the face of the Notice of Appearance that the employer’s case before the Tribunal was that they had indeed begun a disciplinary enquiry under the capability procedure but had broken it off and proceeded with a dismissal on other grounds and that was advanced in the Notice of Appearance as being “some other substantial reason” in accordance with the statute.

	The fact that there was that change of approach is, as we understand it, not only accepted by Mr De Souza but indeed relied upon by him as being one of the matters of complaint against the employers, but for present purposes that simply confirms that there was a change of approach and that the employers, on their case, were indeed not relying on lack of capability as the ground of dismissal but on “some other substantial reason”.

	The way in which the Tribunal dealt with that in their Reasons was as follows.  In paragraph 10 they say:

“10.  ... Capability proceedings are a waste of time and contrary to common sense if the employee is unwilling or unable to accept constructive criticism. ...”

	And that, as we understand it, is plainly an acceptance of the proposition that in the view of the Tribunal there may be situations in which an employer is justified in dismissing for some other reason, without having gone through the full capability proceedings, and we bear in mind in considering that approach by the Tribunal that, although capability procedures such as obtained in this case may indeed eventually lead to a dismissal and compliance with those procedures then be an important factor in considering whether dismissal on ground of lack of capability was fair, nevertheless the main object and purpose of such procedures is not to justify a dismissal but, on the contrary, to lead to an improvement in competence and performance which will enable dismissal to be avoided. 

	In our judgment the Tribunal did not err in law in considering that there may be cases in which an employer may properly consider that to proceed further with capability proceedings, when there is no prospect of an improvement, is a waste of time.  That, of course, is not to decide the question whether this was such a case.  That question the Tribunal, as we understand it, addresses in the following paragraphs.  In paragraph 11 the Tribunal say:

“11  The correct label to attach to the reasons for dismissal, which are accurately set out in the evidence of the Chairman of the Panel of Governors that dismissed him, is probably ‘some other substantial reason’.  The Authority, the School and the Governors, were at no stage sure whether or not the applicant was being deliberately obstructive towards those trying to help him or whether he genuinely believed that he was a good teacher and that the inspectors and others who were trying to help him and setting targets were simply wrong.  In other words, either he was motivated by malice - in which case it would have been misconduct - or he believed wrongly, and totally unreasonably, that he was a good teacher.  The Authority, on balance, believed the latter and therefore in those circumstances the proper label is ‘some other substantial reason’.”

	That, as we understand it, is a plain finding in relation to the first step of what Harvey says on the two stages that must be traversed, namely to establish what was the principal reason for the dismissal and, although in the first sentence of paragraph 11 the Tribunal use the word “probably”, in the last sentence they unequivocally accept that what they call the “proper” label, in other words the real reason or the principal reason, was what the statute describes as “some other substantial reason” and we see no error of law in their approach to that point.

	Having then found that that was the reason actually in the mind of the employer - that was the actual reason for which the employer dismissed - the Tribunal should then, as Harvey says, consider whether in the circumstances the employer acted reasonably in treating that reason as a sufficient ground for dismissing the employee, and that the Tribunal deals with in paragraph 12, saying:

“12  We are satisfied therefore that the School has established, on the balance of probability, a reason which is capable of being fair pursuant to sections 98(1) and 98(2) of the Employment Rights Act 1996.  We are also satisfied [and this is where they go on to the next point] that the dismissal was fair:  it was a sanction open to a reasonable employer in the circumstances of this case. ...”

	And that, as we understand it, is a reference to the familiar and proper test that the Tribunal is not to put itself in the shoes of the employer and decide whether it - the Tribunal - would have dismissed, but whether it was within (as it is often put) the band of reasonable responses open to reasonable employers, and they make a direct finding in the terms of that test that this was a sanction open to a reasonable employer in the circumstances of this case.

	They go on:

“Indeed, it is difficult to imagine any other result.  The applicant at all stages was given every opportunity to state his case.  The applicant complains that he was not allowed to cross examine (as he calls it) everyone who was making allegations against him.  Therein lies the difficulty he has; he would not, or could not appreciate that in capability proceedings one enters into a dialogue and tries to be constructive with a view to improving performance.”

	That last sentence, as we understand it, recognises what we have already referred to as one of the purposes, indeed perhaps the principal purpose, of capability procedures under contracts of employment of this kind, namely that although in certain circumstances the end result may be dismissal the object of the exercise is not primarily to justify dismissal but to lead to improvement, so that if an employee is reasonably believed by the employer to be unwilling or incapable of taking advantage of the capability procedure for that purpose then that may be a ground to be taken into account in considering whether the employer has acted fairly in dismissing for some other substantial reason.

	We therefore see no error in law in the way which the Tribunal dealt with that point.  We have dealt with the matter more broadly, but the precise terms of the Notice of Appeal themselves, in our judgment, pose the wrong test because they suggest that the question is whether the view of the employer that the reason for dismissal was some other substantial reason was a reasonable conclusion for the Respondent, the employer, to draw.  As we have indicated that is not the question.  There is first a question as to what actually was the reason and there is secondly a question whether, in dismissing the employee on that ground the employer acted reasonably in treating it as a sufficient ground.

	Neither, therefore, on the strict terms of the Notice of Appeal nor looking at the matter more broadly is there any error of law on the part of the Tribunal in that sphere, and if the matter rested there we should therefore dismiss this appeal at this stage.

	However, there is a further matter before us in that at the opening of this hearing today Mr De Souza sought leave to amend the Notice of Appeal by adding a further ground alleging bias on the part of the Tribunal, and he gives particulars of that under various heads, the first of which amounts to a complaint that the Tribunal early in the hearing, after having heard two of the Respondents’ witnesses and reading reports and before the Applicant’s case had been opened or evidence called on behalf of Mr De Souza, indicated that, as he puts it, he would not win the case and even if he were to win he would not got any compensation.  That is therefore plainly an allegation that the Tribunal had made up its mind adversely to Mr De Souza before hearing his case.

	The next two items are, as we understand it, elaborations of that point, namely that further matters put to him were that if he continued he would damage his future career and would be liable to costs.

	Then finally there is a completely separate ground, which is that one of the employer’s witnesses was known to the Chairman and that this was indicated, as we understand it - this is the only basis on which this allegation is put forward - by the fact that he referred to the Chairman of the Tribunal by the Chairman’s Christian name at the end of his, the witness’s, evidence.

	That application for leave to amend, as we have said, was made at the opening of the hearing before us.  The Tribunal’s Decision had been promulgated on 3 February 1998 and the Notice of Appeal, not containing any such allegation, although undated, is stamped as having been received at the office of this Tribunal on 17 March.  

	In applying for leave to make this amendment Mr De Souza indicated that such an allegation had been in his mind from the outset and that he had sought and received advice on the question.  We did not of course enquire what that advice was, and it would be inappropriate that we should do so, but that it was obtained was clear from the way in which Mr De Souza made the application.

	The procedure to be followed if an allegation of bias is made on appeal against an Employment Tribunal is set out in the Practice Direction of this Employment Appeal Tribunal and requires that a party who intends to complain about the conduct of the Tribunal must include in the Notice of Appeal full and sufficient particulars of the complaint.  As to that requirement the original Notice of Appeal of course contain no such allegation at all, let alone particulars of it.  We are willing to assume that the proposed draft addition to the Notice of Appeal does contain sufficient particulars to comply with that requirement.

	The Practice Direction goes on at paragraph 9 (2) and (3):

“(2)  In any such case the Registrar may inquire of the party making the complaint whether it is intended to proceed with it.  If so, the Registrar will give appropriate directions for the hearing.”

	That procedure, of course, has not been followed at all because the proposed amendment had only just been handed in.  

“(3)  Such directions will normally include the swearing and filing of affidavits by the complainant or his or her advisers or other witnesses or by the Respondent or his or her advisers or any others who can give relevant evidence as to the facts which form the basis of the complaint and the provision of further particulars in the matters relied on.”

	That requirement, of course, has not been fulfilled because there has been no possibility of there having been any such directions.  The reason for such requirements is plain, that whereas other grounds of error of law refer to matters which can be seen on the face of the Tribunal’s Reasons or, if they involve an allegation of perversity, may require looking at the evidence before the Tribunal, an allegation of bias concerns what actually happened in the proceedings themselves and is therefore raising a totally fresh area of factual investigation and proper evidence about it is required if it is to be dealt with.

	The next step required is that by paragraph 9 (4) of the Practice Direction:

“(4)  When that direction [as to any affidavits] has been complied with the Registrar will notify the Chairman of the Industrial Tribunal and provide copies of the Notice of Appeal, the affidavits and other relevant documents to the Chairman so that he has and, if appropriate, the lay members of the Industrial Tribunal have, an opportunity to comment on them.  Those comments will be supplied by the EAT to the parties.”

	Again the reason for that requirement is plain in terms of fairness, that such a ground of appeal involves serious allegations against not just the accuracy of the Tribunal’s decision and reasons but also against the character of members of the Industrial Tribunal and it is right and essential that they should be given an opportunity of dealing with them.

	Then there are further directions about the possibility of further particulars and finally, at paragraph 9 (6):

“(6)  The EAT [Employment Appeal Tribunal] will not permit complaints of the kind mentioned above to be raised or developed at the hearing of the appeal unless this procedure has been followed.”

	In the light of those requirements and of the history which I have mentioned we have to consider whether in the exercise of our discretion we should, at this late stage, allow this amendment.  If we were to allow it it would, of course, be necessary for us to give directions so that the steps which I have described could be complied with.  Only after all that had been done would it be possible to list that aspect of the appeal for a preliminary hearing to decide whether the matter should go forward to a full hearing.

	We bear that in mind.  We bear in mind that the procedure is clear and well known and that Mr De Souza on his own representations to us was not first apprised of the possibility of this ground at a late stage but had it in mind from the beginning and was in a position to obtain advice on the matter.

	On the other hand we also take into consideration that if we reject this proposed amendment, having dismissed the appeal on the ground already existing, that will be the end of this matter and Mr De Souza will not be in a position to raise this ground of appeal as he wishes and seeks to do.

	In making his submissions to us Mr De Souza advanced various considerations which, as we understand it, went to the merits of that ground of appeal if the amendment were allowed rather than to the question whether the amendment should be allowed at all.  He further submitted, and this perhaps is a point which does bear more directly on the decision whether to allow the amendment, that in his mind the Notice of Appeal, as originally lodged, was wide enough to cover this ground and that he was, in a sense, only giving further particulars of it in the proposed amendment, and it may be in that connection that we have been referred to the case of Quarcoopome v Sock Shop Holdings Ltd [1995] IRLR 353, in which there had been an application to add paragraphs alleging indirect discrimination, contrary to the Race Relations Act 1976, to an existing complaint of unfair dismissal and race discrimination, originally alleging only direct discrimination.  

	The Industrial Tribunal rejected the application for that amendment on the basis that such a complaint should be made at an early stage of the proceedings, but the Employment Appeal Tribunal allowed the appeal on the basis that an Originating Application that makes a claim for race discrimination incorporates any such claim, whether direct or indirect, and that the Tribunal below had wrongly applied a test, that is to say the test of lateness, which would be appropriate to an application to bring a claim out of time, whereas the true situation was that this was an application to amend an existing claim.  The true position was that that was an application just to particularise the claim rather than to extend or amend it, and therefore the test which the Tribunal should have applied was to see whether any hardship or prejudice would be incurred by the employers.

	That is very far removed from this case.  It is absolutely clear in our view that the Notice of Appeal as lodged, and as it has existed to date, has absolutely no suggestion of bias or impropriety.  It turns on the pure point of law whether the Tribunal correctly treated the question of the reason for dismissal and the question whether it was fairly relied upon by the employers in dismissing.

	This application for leave to amend, therefore, is indeed an application to add a totally new ground.  It is a ground which, as we have indicated, requires following the procedure laid down in the Practice Direction in fairness both to the Respondent and to the Industrial Tribunal.  There has been no opportunity for that to have happened before today and, balancing the considerations on both sides, we have come to the clear conclusion that we ought to exercise our discretion by rejecting the application for leave to amend, as we therefore do.  That being so, the appeal as a whole will be dismissed.