Appeal No. UKEAT 0028/05/MAA & UKEAT 0865/05/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 26 April 2005
Judgment delivered on 29 July  2005

Before
HIS HONOUR JUDGE PETER CLARK

MR D EVANS CBE

MR B M WARMAN

EDMUND NUTALL LIMITED	APPELLANT

MR P BUTTERFIELD 	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR THOMAS CROXFORD
(of Counsel)
Instructed by:
Ms Sophie Brandt
Messrs CMS Cameron McKenna
Solicitors
Mitre House 
160 Aldersgate Street
London EC1A 4DD	
For the Respondent	MR JONATHAN FRENCH
(Of Counsel)
Instructed by:
Mr N A Castle  
The Beaumont Partnership
67 Westgate
Wakefield
West Yorkshire WF1 1BW

SUMMARY

Disability; Contributory Fault

Whether less favourable treatment by reason of disability.  Excluded conditions under 1996 Regulations.  Unfair dismissal. Breach of trust and confidence. Contributory fault.

HIS HONOUR JUDGE CLARK

1.	We have before us an appeal brought by the Respondent employer before the Leeds Employment Tribunal, Edmund Nuttall Limited, against that Tribunal’s substantive liability Judgment, promulgated on 6 October 2004, upholding the Claimant, Mr Butterfield’s complaints of disability discrimination and unfair dismissal (the first appeal) and secondly, against an Order made by the Chairman alone, Mr D R Sneath, dated 15 November 2004 (the second appeal).  We shall refer to the parties as they appeared below. 

The Facts
2.	The Claimant commenced employment with the Respondent as a mechanical and electrical co-ordinator, based at their Leeds office, on 4 June 2001.  His duties involved extensive travel by car.  Between November 2002 and September 2003 he covered 36,000 miles. He worked hard for the Respondent and was involved in voluntary work for his church.

3.	On 17 November 2003 he left his home near Wakefield in order to attend a 9 a.m. meeting in Bridgend, Wales.  From there he drove to Banbury on a further call for the Respondent, returning home at 10 p.m.  On the following day he drove from home to a 9.30 a.m. meeting in Camberley, Surrey.  By 4 p.m., he was so tired that he stopped at a service area of the M40 motorway for a rest.  Thereafter he set off for home, as the Tribunal found, his head ringing with all sorts of weird thoughts and emotions.  On the way home he committed criminal offences which resulted in his appearing before the Oxford Crown Court for sentence, following his indication of pleas of guilty in the Magistrates’ Court, on 9 February 2004.  

4.	For two offences of indecent exposure and an offence of dangerous driving, HHJ Mowat sentenced him to a three year Community Rehabilitation Order (CRO) with a condition of treatment under the direction of Dr Nehaul at the BUPA Hospital, Leeds; and two years’ disqualification from driving.  He was also ordered to pay prosecution costs of £230.00.  At that time, the Claimant was aged 49 years and had no previous convictions other than for speeding.  There were, before the sentencing in Court, two reports from Dr Nehaul, a consultant psychiatrist, dated 8 and 31 January 2004 and a report from a second consultant psychiatrist, Dr Mahapatra dated 30 January 2004.  Those reports were obtained by defence solicitors for the purposes of sentence.  We also infer that a Pre-Sentence Report (PSR) was prepared for the sentencing hearing by the West Yorkshire Probation Service.  The reports by Dr Nehaul were before the Employment Tribunal, as was a transcript of the sentencing hearing.  The PSR and Dr Mahapatra’s report were not.  

5.	At this point we interpose reference to an application made by the Respondent in the appeals before us to adduce fresh evidence on appeal.  Specifically, the report of Dr Mahapatra and what is described as a report supplied on a neutral basis in relation to the Employment Tribunal remedies hearing to follow the liability hearing held on 16-17 September 2004 from the West Yorkshire Probation Service.  That report is dated 6 December 2004, signed by a probation officer, Mrs Dickinson and countersigned by Mary Lawton, a senior probation officer.  It was not the PSR which was before HHJ Mowat.  The application was opposed on behalf of the Claimant and having considered the parties’ representations on paper, the Registrar granted the Respondent’s application to adduce the fresh evidence, by Order dated 4 April 2005.  

6.	For the purpose of the present appeals, we accept Mr French’s submission that particularly in relation to the evidence contained in the report of Mrs Dickinson, it will be necessary for that witness to give live evidence and be subject to cross-examination.  In view of the final outcome of the appeals, we have concluded that it is unnecessary and undesirable that she should be called before us.  For the reasons which follow, the cases will be remitted to a fresh Employment Tribunal for re-hearing on certain limited issues.  At the re-hearing, the Tribunal will hear the evidence and make the necessary findings of fact.  

7.	From the material before us, the circumstances of the offences appear to be these.  The Claimant pulled off the road on to a dirt track, undressed save for his shoes and put on a dressing gown.  He put a false set of number plates over his car plates.  He then exposed himself to two sisters, aged 11 and 14 years in Grange Road, Banbury.  Subsequently, he again exposed himself to three adult women on Bloxham Road.  Those women told police, who had begun a search for the man who had exposed himself to the two girls, what car the offender was driving and the (false) registration number of the car.  Police later caught up with the Claimant’s car at a red light.  They attempted to stop him but he jumped the red light and then the second red light.  A chase ensued, resulting in his being apprehended.  In interview, he admitted to police the two offences of indecent exposure and the dangerous driving.  He was released from police custody and attended a meeting the following day, 19 November, at the Respondent’s Humber Sea Terminal, where he broke down.  On 22 November, he was admitted to the BUPA Hospital, Leeds under Dr Nehaul’s care.  He remained off work.

8.	On 19 February 2004, he attended a meeting with his line manager, Mr Emms and the Respondent’s Director of Human Resources, Mr Medcroft.  Prior to that meeting he had instructed solicitors in connection with the criminal proceedings.  He was concerned about his job.  He asked whether he was legally required to give a full account of the criminal proceedings to his employer.  The solicitor advised him that there was no such requirement, unless what had happened had a direct bearing on his ability to do his job, for example, if he was working with children or other vulnerable people.  

9.	At the meeting on 19 February, the Claimant informed his employer:
(i)	That he had been disqualified from driving for two years.  He said that the Judge had imposed that length of ban because she thought that the Claimant should achieve a better work/life balance.  In fact, as the Tribunal found, although the Judge was not disqualifying him for the offences of indecent exposure, she took into account that the Claimant’s car was part of his equipment for committing those offences;
(ii)	He did not mention the offences of indecent exposure, nor the CRO which had been imposed;
(iii)	He was asked by Mr Medcroft about a further enquiry by the Cheshire Police.  The Claimant said that he had been interviewed by that force at Pontefract Police Station because a car similar to his had been used as a getaway vehicle in a robbery.  This account was untrue, as the Tribunal found; the Cheshire Police were investigating a similar offence of indecent exposure which had occurred in their area.

10.	Based on what was revealed by the Claimant, the Respondent was content for him to return to work, being driven by his wife or a retired friend.  Unfortunately for the Claimant, the picture which he had painted began to unravel when his probation officer, Mrs Dickinson, told him that he had to disclose to his employer the offences of indecent exposure.  If he did not, she would.  Distressed at the prospect, he enlisted his wife to break the news to Mr Medcroft.  She did so by telephone and followed that up by sending a copy of Dr Nehaul’s second report dated 
30 January 2004 and suggested that Mr Medcroft obtain a statement from the probation service about the offences.  The Respondent did not contact probation until a time between the Claimant’s dismissal following a disciplinary hearing held on 5 April and the hearing of his internal appeal on 6 May.  We shall return to what was said shortly.

11.	Faced with this new information, Mr Medcroft discussed the matter with two fellow directors, Messrs Belsham and Brooks.  It was the Respondent’s case that no decision was taken on the Claimant’s future with the Respondent prior to the disciplinary hearing, but that was rejected by the Tribunal.  They found, based particularly on a tape recorded conversation between the Claimant and Mr Medcroft on 24 March, that the directors felt that the Claimant had misled Mr Medcroft on 19 February, as plainly he had and that he had to go.  It was also their view, expressed by Mr Medcroft in evidence that his conduct could potentially bring the company into disrepute and may be repeated in future.  Mr Medcroft told the Claimant on 24 March that the company had lost trust and confidence in him as a result of the lies which he had told.  The Claimant denied lying to him.  There then followed the formal disciplinary hearing, after which he was dismissed by letter dated 7 April and his appeal, which was unsuccessful.  

Medical Evidence
12.	Dr Nehaul expressed the opinion that at the time of the index offences the Claimant was suffering from a moderately severe depressive illness requiring in-patient treatment.  Dr Mahapatra obtained a more detailed history from the Claimant, from which it emerged that the Claimant had exposed himself to females over an 18 month period; hence the reference by Judge Mowat (transcript page 9 F) to his having behaved in that way according to his own admissions for about two years at the sentencing hearing.  The doctor also recorded the true circumstances in which the Claimant came to be interviewed by Cheshire Police.  He expressed this opinion:
“I am firmly of the opinion that Mr Butterfield knew at all times that what he was doing was wrong and he seemed to have developed a habit of equipping himself with a dressing gown and balaclava in his car and in the middle of 2000 having made false number plates to avoid detection by the police.”  

The Tribunal Substantive Decision
13.	The Tribunal identified the following issues in the liability hearing at paragraph 2 of their Reasons as follows:
“(1)	Was the Applicant disabled within the meaning of Section 1 of the Disability Discrimination Act 1995?
(2)	If so, did the Respondent, by dismissing him, treat the Applicant less favourably for a reason relating to his disability than it would have treated others to whom that reason would not have applied?
(3)	If so, has the Respondent shown that its treatment of the Applicant was justified?  
(4)	Was there a duty in law on the Applicant to disclose all his convictions?
(5)	If so, did the Applicant breach the duty to disclose all his convictions?
(6)	Did the Applicant breach the implied term of mutual trust and confidence by misleading his employer?
(7)	If so, was the response of dismissal within the range of responses of a reasonable employer?
(8)	If not, did the Applicant contribute by his conduct to his dismissal and, if so, to what extent?”

14.	We note that the dismissal in this case preceded the coming into force of amendments to the Disability Discrimination Act 1995 (DDA) on 1 October 2004.  

15.	Their findings and conclusions on those issues may be summarised thus:
(1)	The Claimant was suffering from a mental impairment which had a substantial adverse effect on his memory and his ability to concentrate and understand.  The effect was long term.  He was disabled within the meaning of Section 1 DDA.  
(2)	The Respondent, in dismissing the Claimant, treated him less favourably for a reason relating to his disability then it treated others to whom that reason would not have applied.  The Tribunal found (Reasons paragraph 49) that the Claimant committed the offences (of indecent exposure) because he was suffering from a mental illness (depression).  The offences gave rise to the reason relating to the Claimant’s conduct for his dismissal.  Accordingly, the Claimant was less favourably treated for a reason relating to his disability.  Had he not been suffering from mental illness, he would not have committed the offences and found himself in the position of being dismissed because of them.  The Respondent, prima facie, discriminated against the Claimant (Section 5.1(a) DDA).  
(3)	The Respondent had not shown that its treatment of the Claimant was justified.  The admission by the Claimant of offences of indecent exposure was a substantial reason for his dismissal in that the very serious nature of the offences was very likely to bring the Respondent into disrepute if it became public.  However, that reason was not material to the circumstances of the Claimant’s particular case.  What was material was the risk of the Claimant re-offending, which the Respondent did not investigate.  
(4)	Although the advice of the Claimant’s solicitor that he need not disclose his convictions for indecent exposure was “wrong” (Reasons paragraph 22), it was not obviously wrong and the Claimant was entitled to act on that advice (Reasons paragraph 52).
(5)	In these circumstances, the Claimant was not in breach of his duty of disclosure. 
(6)	Although the non-disclosure did in fact have a very damaging effect on mutual trust and confidence (Reasons, paragraph 52) a contract of employment is not a contract of utmost good faith and there was no fundamental breach of contract on the part of the Claimant.
(7)	The Tribunal did not specifically identify as an issue the Respondent’s reasons for dismissal for the purposes of the unfair dismissal claim, however, we infer that the Tribunal was satisfied that the Respondent had made out a potentially fair reason, conduct (see Reasons paragraph 42) and they found (Reasons paragraph 53) that Mr Medcroft had prejudged the matter before the disciplinary hearing took place.  That, we would observe, was capable of and did, in the view of the Tribunal, render the dismissal ‘procedurally’ unfair.  Additionally, the Tribunal found that, given the Claimant’s disability and the failure of the Respondent to address the problem posed by the risk of re-offending, dismissal was outside the range of reasonable responses open to the employer. 
(8)	Finally, the Claimant was not guilty of culpable conduct.  His conduct was not treated as such by the Crown Court in the way in which he was sentenced for the offences of indecent exposure.  At most, he was guilty of a lack of judgement in not disclosing those offences to the Respondent on 19 February 2004, but his judgement was impaired by his mental state and he was acting on legal advice ‘given in good faith’.  There would be no reduction in his compensation for unfair dismissal for contributory conduct, nor the Tribunal add, in his compensation for disability discrimination (although no provision to do so exists under the DDA).

The First Appeal

16.	It is convenient to consider the points taken by Mr Croxford on behalf of the Respondent on this appeal under the following headings:

Disability Discrimination
Disability

17.	There is no appeal against the Tribunal’s finding that the Claimant was disabled at the relevant time, save for the point raised before us and below on the effect of the Disability Discrimination (Meaning of Disability) Regulations 1996 (“the 1996 Regulations”). 

18.	The starting point is Section 1(1) DDA, which provides:  
“(1)	Subject to the provisions of Schedule 1, a person has a disability for the purposes of this Act if he has a physical or mental impairment which has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities.”   

19.	Schedule 1, paragraph 1(2) provides:  
“Regulations may make provision for the purpose of this Act –
(b)	for conditions of a prescribed description to be treated as not amounting to impairments”
and by paragraph 1(3):
“Regulations made under sub-paragraph (2) may make provision as to the meaning of “condition” for the purposes of those regulations.” 

The 1996 Regulations were made under Schedule 1 to the principal Act.  They do not contain a definition of “condition” but do provide, so far as is material at Regulation 4, under the Heading “Other Conditions not be treated as Impairments”
“(1)	For the purposes of the Act, the following conditions are to be treated as not amounting to impairment:-
(c)	A tendency to…sexual abuse of other persons
(d)	Exhibitionism”.

20.	We should also refer to the Guidance issue by the then Department for Education and Employment under Section 3 of the principal Act, which must be taken into account by Employment Tribunals where relevant to a question under Section 1 DDA.  Paragraph 11 of the Guidance provides:
“It is not necessary to consider how an impairment was caused, even if the cause is a consequence of a condition which is excluded”.  [Those conditions, to be found in the 1996 Regulations being listed at paragraph 8 of the Guidance].  For example, liver disease as a result of alcohol dependency would count as an impairment”.

21.	This framework gives rise, it seems to us, to a material question in this appeal.  What is a relevant impairment and what is an excluded condition, mental or physical impairment being a necessary ingredient of the meaning of disability for the purpose of the causation question raised by Section 5(1)(a); was the less favourable treatment complained of by reason of the Claimant’s disability?

22.	The point is not free from authority.  The Tribunal was referred to the EAT Decision in Murray v Newham Citizens’ Advice Bureau [2003] IRLR 340 (HHJ Serota QC presiding).  We have ourselves, for completeness, drawn Counsel’s attention to Power v Panasonic Limited [2003] IRLR 151 (EAT, Miss Recorder Slade QC presiding) not referred to in Murray.  

23.	In Murray, the Claimant applied to work as a volunteer at Newham CAB. At a pre-selection hearing he disclosed that he had been sent to prison for stabbing a neighbour.  At that time he had been diagnosed as a paranoid schizophrenic.  He was not offered the post and presented a complaint of unlawful disability discrimination to the Employment Tribunal.  We note that, as Judge Serota recorded at paragraphs 1-2 of this Judgment on behalf of the EAT (a) the Tribunal held that the Claimant was disabled within the meaning of Section 1 DDA and (b) that there was no appeal by Newham against that finding.  The Tribunal concluded that the Claimant had not been discriminated against on the basis of his disability; alternatively, if he had, then the less favourable treatment shown to him by Newham was justified.  The Claimant appealed against both those alternative findings.

24.	The Employment Tribunal reached its finding of no discrimination on the basis of the 1996 Regulations.  Regulation 4(1)(c) provides in full:
“(c)		A tendency to physical or sexual abuse of other persons”.

The Tribunal concluded that the Claimant’s tendency to violence was a condition that fell within Regulation 4 and accordingly could not be considered to be a disability within the meaning of Section 1 of the DDA.  Accordingly, the Claimant had not been discriminated against by being treated less favourably for a reason which related to his disability (see EAT Judgment, paragraph 11).  

25.	The EAT dealt with the Claimant’s appeal against that finding at paragraphs 12-15 of their Judgment.  In essence, they accepted a submission by Counsel for the Claimant that for Regulation 4 to apply the condition must be a free-standing condition.  Once it is found that a Claimant is subject to a disability within the meaning of Section 1 DDA, the Regulations are irrelevant if the condition which the Claimant suffers is a consequence of the disability.  

26.	In Power, the Claimant was off work suffering both from the effects of depression (a legitimate mental impairment) and alcohol abuse (an excluded condition under Regulation 3 of the 1996 Regulations).  A Tribunal found that the core issue for them was whether the Claimant became clinically depressed and turned to drink, or whether events led to alcohol addiction, producing depression.  They found that she was not disabled.  Her appeal was allowed.  The material holding by the EAT is at paragraph 12 of their Judgment, where it is said:

“…It is not material to a decision as to whether a person is suffering a disability within the meaning of the Act, to consider how the impairment from which they are suffering was caused.  What is material is to ascertain whether the disability from which they are suffering at the material time is a disability within the meaning of the Act or whether, where it is relevant as in this case, it is an impairment which is excluded by reason of the Regulations from being treated as such a disability”.

27.	For the Claimant in the present appeal, Mr French adopts the EAT’s approach in Murray, namely that Regulation 4 applies only to “free-standing conditions”.  The manifestation of the condition, here, exhibitionism, is the mental impairment, that is depression.  Accordingly, the Tribunal was correct in finding (Reasons paragraph 49) that had the Claimant not been suffering from mental illness, he would not have committed the criminal offences and had been dismissed because of them.  The Respondent discriminated against the Claimant by reason of his disability, the mental impairment.  

28.	Mr Croxford submits that, by virtue of Regulation 4, the employer is entitled to treat someone less favourably if they tend to exhibitionism, even if they would be regarded as disabled.  

29.	We do not find the relationship between legitimate impairment and excluded condition provided for in the DDA, read with the 1996 Regulations, a comfortable one.  Having considered the earlier cases and the submissions received from Counsel, our analysis, on the facts as found by this Tribunal, is as follows:
(1)	We respectfully agree with the EAT approach in Power that the question is not what caused the legitimate impairment.  
(2)	We are not persuaded that the concept of a “free-standing condition” is helpful, cf Murray.  
(3)	It is plain that a Claimant may have both a legitimate impairment and an excluded condition.  That was the factual position in both Power and Murray and in the present case.
(4)	In these circumstances, it seems to us that the critical question is one of causation.  What was the reason for the less favourable treatment, here dismissal of the Claimant? 
(5)	If the reason was the legitimate impairment, then prima facie discrimination, subject to the defence of justification, is made out; if the reason was the excluded condition and not the legitimate impairment, then the claim fails by reason of his disability.
(6)	That distinction may be easily stated.  However, it does not deal with the case where both the legitimate impairment and the excluded condition form the employer’s reason for the less favourable treatment.  In those circumstances, we find assistance in the approach of Mummery P, consistent with high authority, in O’Neill v St Thomas More School [1996] RLR 372, in relation to dismissal on the grounds of pregnancy.  The then President held in that case that it was not necessary for the Claimant to show that pregnancy was the only reason for her dismissal, provided it was an effective cause.  Reverting to the wording of Section 5(1)(a) DDA, the Claimant must show that the less favourable treatment was for a reason related to the Claimant’s disability.  Thus, in our judgement, focusing on the employer’s reason for the less favourable treatment, if the legitimate impairment was a reason and thus an effective cause of the less favourable treatment, then prima facie discrimination is made out notwithstanding that the excluded condition also forms part of the employer’s reason for that treatment.  

30.	Applying that legal analysis to the facts as found by the Tribunal in this case, our conclusions are as follows:-
(1)	At the time of his dismissal on 7 April 2004, the Claimant was suffering from a mental impairment, depression, and was disabled within the meaning of Section 1 DDA.
(2)	The Respondent was aware of his mental state.  He was admitted to hospital on 22 November 2003 and remained off work thereafter.  Nevertheless, at the meeting on 19 February 2004, based on the account given by the Claimant, the Respondent was content for him to continue working for them with adjustments made to deal with his loss of his driving licence.
(3)	What changed, in the mind of the Respondent’s directors, was the revelation by the Claimant’s wife to Mr Medcroft as to the true position; that the Claimant had been convicted of offences of indecent exposure for which he received a CRO?
(4)	Having discussed the matter with his fellow directors, it was decided by Mr Medcroft that the Claimant must be dismissed, not because he suffered from a moderately severe depressive illness, as was made clear in Dr Nehaul’s report, but because he had committed offences which could be deemed to be unethical or inappropriate behaviour which could bring the company into disrepute (Reasons paragraph 23).  In evidence before the Tribunal, Mr Medcroft added that the Claimant had misled the Respondent (as indeed he had at the meeting on 19 February).
(5)	In these circumstances, it seems clear to us, on the facts as found, that the sole reason for dismissal related to the excluded condition, not to the legitimate impairment.  We do not accept that a legitimate medical impairment underlying an excluded condition, where that condition is the reason for less favourable treatment, means that disability is a reason for the less favourable treatment.  To so find would, as Mr Croxford submits, render the effect of the Regulations nugatory.  That cannot have been Parliament’s intention in passing the Regulations.
Accordingly, we uphold the first ground of appeal and set aside the Tribunal’s finding of prima facie discrimination by reason of disability.

Justification

31.	Our finding under the head of disability means that the DDA claim fails and must be dismissed.  However, and for completeness, we go on to consider Mr Croxford’s second ground of appeal against the Tribunal’s finding of disability discrimination, justification.  For this purpose we shall assume, contrary to our earlier finding, that the Claimant’s mental impairment and consequent disability was an effective cause of the less favourable treatment, that is dismissal.  

32.	The Tribunal appear to have assumed (Reasons paragraph 50) that the Respondent’s reason for the dismissal, that is the serious nature of the Claimant’s offences which were very likely to bring the Respondent into disrepute if they became public in circumstances where the Respondent continued to employ the Claimant, was substantial.  However, they went on to find that it was not material to the circumstances of the Claimant’s case.  What was material was the risk of the Claimant re-offending and the Respondent failed properly to address that risk.  

It is well settled that the threshold for determining whether discriminatory treatment of a disabled person is justified is very low; see Murray paragraph 23; H J Heinz v Kentrick [2001] IRLR 144 (Lindsay P, paragraph 16); indeed, surprisingly low, Collins v Royal National Theatre Board Limited [2004] IRLR 395 (Sedley LJ, paragraph 15). 

33.	Mr Croxford submits that the Tribunal erred in its approach by failing to ask whether the Respondent’s approach was irrational, being beyond the range of reasonable responses open to it: see Jones v Post Office [2001] IRLR 384 (Pill LJ, paragraph 26).

34.	The difficulty with that submission is that, at paragraph 53 Reasons, in the context of their finding on unfair dismissal, the Tribunal specifically find that given the Respondent’s failure to address the issue of re-offending, the Respondent’s decision to dismiss fell outside the range of reasonable responses.  Since that was the test adopted by the Court of Appeal in Jones  in the context of justification under Section 5(3) DDA, it seems to us that the Tribunal did ask itself the correct question and answered it permissibly on its findings of fact.  

Unfair Dismissal

35.	In summary, the Tribunal appears to have found the Respondent’s reason for dismissal was a reason relating to his conduct; dismissal for that reason was procedurally unfair, in that the Respondent pre-judged the matter and its outcome prior to the initial disciplinary hearing (a finding which Mr Croxford cannot and does not seek to challenge) and substantively unfair in that dismissal fell outside the range of reasonable responses due to the Respondent’s failure to address the risk of the Claimant re-offending.  

36.	The Tribunal made other findings which led to the further conclusion that the Claimant was not guilty of contributory conduct under Sections 122(2) and 123(6) of the Employment Rights Act 1996 (ERA).  Those findings lead to two further grounds of appeal.

Mutual Trust and Confidence

37.	At paragraph 52 of their Reasons, the Tribunal said:
“In respect of the Applicant’s alleged fundamental breach of contract, we found that there was not a breach on the Applicant’s part.  A contract of employment is not a contract of utmost good faith in which the employee is obliged to disclose absolutely everything which might affect his relationship with the employer.  The non-disclosure did, in fact, have a very damaging effect on mutual trust and confidence.  We can understand the Respondent’s disappointment at not having been told earlier.  In that respect, we accept that the Applicant may have displayed a lack of judgement.  We note also, of course, that his judgement was at the time impaired by his mental illness.  It is important, however, to acknowledge that the Applicant realised that the Respondent might have difficulty coming to terms with the offences of indecent exposure and accordingly sought advice from his solicitors.  That was a proper course for him to take and he was entitled to act on the advice which he was given.  It was not obviously wrong.  To that extent, the Applicant had proper and reasonable cause for not making the disclosure.  When confronted by his probation officer with an obligation to do so, he did so straightaway”.

38.	Mr Croxford argues that the Tribunal’s conclusion, that the Claimant was not in breach of the implied term of mutual trust and confidence is logically inconsistent with their further finding within the same paragraph that the non-disclosure did, in fact, have a very damaging effect on mutual trust and confidence.  We accept that submission.  Further, it is well settled that an employee in the position of the Claimant is responsible for the acts of his agent, here his solicitor, where that solicitor gives wrong advice (Reasons paragraph 22). See Allen v Hammett [1982] ICR 227.  

Contributory Conduct

39.	The Tribunal found, Reasons paragraph 54, that the Claimant was not guilty of culpable or blameworthy conduct (see Nelson v BBC No. 2 [1980] ICR 110, 121 F-G per Brandon LJ).  The basis for that finding appears to be that the Claimant’s conduct was not treated as such by the Crown Court.  At its highest, the Claimant could be criticised for a lack of judgement in not disclosing the true position to Mr Medcroft on 19 February 2004, at a time when his judgement was impaired by his mental state and he was acting on legal advice given in good faith.  

40.	Unusually, we find ourselves agreeing with Mr Croxford’s submission that the Tribunal’s finding that the Claimant was not guilty of contributory conduct is truly perverse in the legal sense.  On the facts found, it is irrational.  See Stewart v Cleveland Guest (Engineering) Limited [1994] IRLR 440, 443, (per Mummery P).  

41.	Specifically, even if the Crown Court’s approach to the criminal offences was a relevant factor, which we doubt, that Court was sentencing the Claimant for criminal offences to a community penalty.  That was culpable behaviour in a criminal, let alone employment sense.  We have earlier observed that it is no answer that the Claimant was acting on the wrong legal advice.  The degree of culpability may be reflected in the Tribunal’s findings as to his mental state, but committing pre-planned offences of this type and then concealing the true position from the employer is plainly culpable conduct.  

Summary

42.	In allowing the first appeal, we shall;
(1)	Set aside the Tribunal’s finding of disability discrimination on the ground that the Claimant’s disability, mental impairment, was not an effective cause of the less favourable treatment, dismissal; the sole reason was a combination of the Claimant’s excluded condition, exhibitionism, coupled with his misleading the Respondent as to the true position.
(2)	Uphold the finding of unfair dismissal on the procedural ground that the Respondent pre-judged the outcome of the internal disciplinary proceedings and substantively on the ground that the Respondent’s failure to investigate the possibility of re-offending by the Claimant rendered the dismissal outside the range of reasonable responses.  
(3)	Set aside the finding that the Claimant did not contribute to his dismissal by his own conduct.  The extent to which he did contribute to his dismissal must be remitted to a fresh Tribunal for re-hearing.  

The Second Appeal

43.	At paragraph 55 of their liability Judgment, the Tribunal said:
“Remedy
Finally, we note there is no evidence before us as to the degree of risk of re-offending posed by the applicant in early April when the respondent was considering the matter.  Accordingly, it remains open to the parties to adduce such evidence either way.  For, it seems to us that if at the time the applicant posed a significant risk of re-offending, the decision to dismiss might well have been justified.  On the other hand, if the risk of re-offending was not significant, then the respondent would have been obliged to retain the applicant’s services, given that it had already satisfied itself that the applicant would have been able to get about with the help of his wife and his friends.  We are not, of course, able to express a concluded view about that matter, and the parties are free to adduce evidence and make submissions on it, if so advised, in due course”.
44.	We think that these observations were directed, so far as is now material, to the issue of whether a “Polkey” deduction (separate from the issue of contributory conduct) was to be made in the unfair dismissal claim. 

45.	By his subsequent Order dated 15 November 2004, the Chairman, Mr Sneath, appeared to limit the Respondent to relying on the doctors who had earlier reported, Dr Nehaul and Dr Mahapatra, on the issue of the risk of the Claimant re-offending.  He refused the Respondent’s application to call their own independent medical practitioner on that issue.  

46.	We accept Mr Croxford’s submission that that Order is an impermissible one.  Given that the Respondent failed to obtain its own expert evidence prior to dismissal, thus rendering the dismissal unfair, the question at the remedies hearing would be whether, had they obtained such evidence, a fair dismissal would or might have followed.  See Polkey.  

47.	In these circumstances, we shall allow the second appeal, set aside the Chairman’s Order and grant permission to the Respondent to commission their own independent psychiatric report, for which purpose the Claimant is directed to provide his consent to release of his medical and psychiatric records.  He is to do so within 21 days of the promulgation of this Judgment.  The Respondent is directed to serve on the Claimant any medical report on which they will rely within six weeks of the Claimant providing his written consent to release of his medical notes.  There will be liberty for both parties to apply on paper on notice to the other, in relation to these directions.

48.	Finally, we return to Mrs Dickinson, the probation officer.  It will be open to either party to call her as a witness at the remitted Tribunal hearing held to determine the issues of the extent of the Claimant’s contribution to his unfair dismissal and whether or not there should be any and if so, what deduction under the Polkey principle?  The new Tribunal is reminded that the overall loss must first be assessed under Section 123(1) ERA, applying the Polkey principle, if appropriate and thereafter to make any further reduction for contributory conduct under Sections 122(2) and 123(6).  See Rao v Civil Aviation Authority [1994] ICR 495.