Appeal No. UKEAT/0058/06/MT

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

	At the Tribunal
On 10 May 2007

Before
THE HONOURABLE LADY SMITH
MR M SIBBALD
DR W SPEIRS

ROBERT ALLAN DAVIE	APPELLANT

WASTEMASTER LIMITED	RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant	MR ROSS PILKINGTON
Advocate.
Instructed by:
Messrs Stirling & Co Solicitors
Steeple Chambers
122 High Street
Falkirk
FK1 1NW	
For the Respondent	MR ANDREW BOWEN
Advocate.
Instructed by:
Messrs Wright Johnston & Mackenzie Solicitors
302 St Vincent Street
Glasgow
G2 5RZ	

SUMMARY

UNFAIR DISMISSAL – Automatically unfair reason

The claimant, who was dismissed for conduct reasons, was found to have been unfairly dismissed on account of the respondents’ failure to comply with the requirements of Part 1 of Schedule 2 to the Employment Act 2002.  The tribunal found that if the proper procedures had been followed, the claimant would have been dismissed within three weeks in any event and that the basic award should be reduced by 90% in respect of the claimant’s own contribution to his dismissal. An appeal against the reduction of the basic award was dismissed but an appeal against the restriction of the compensatory award to a three week period was allowed on the basis that the tribunal had failed to follow the correct approach (see: Polkey v A E Dayton Services Ltd [1987] IRLR 503) and had made no findings in fact which entitled them so to restrict it. The case was remitted to the same tribunal for a rehearing restricted to the issue of amount of the compensatory award. 

THE HONOURABLE LADY SMITH

Introduction
1.	The appellant (who we will refer to as the claimant) was employed by the respondents as a high pressure water cleaner from 8 March 1983 until his dismissal on 14 June 2005. The Employment Tribunal sitting at Edinburgh, Chairman Mr Roy McIver, found that he had been unfairly dismissed as none of the relevant statutory dismissal procedures had been followed. They awarded him a basic award and compensation. The basic award was reduced by 90% to take account of the extent to which the claimant’s conduct had contributed to his dismissal. The compensatory award was restricted to being based on three weeks earnings on the view that the claimant would have been dismissed within a period of three weeks even if the statutory procedures had been followed.

Background Facts
2.	The following can be gleaned from the facts found by the tribunal. The claimant had, for most of the period of his employment with the respondents worked at the premises of their clients Rohm and Haas, a chemical company in Grangemouth.  Flammable and hazardous substances are involved in their production processes and they, accordingly, impose strict procedures which included rules regarding the wearing of specified protective clothing. One of those procedures was that they had a system of issuing “Permits to Work” to operatives prior to the commencement of any work being carried out. The claimant required to be issued with such permits for the work he was engaged in.   

3.	On 28 May 2004, the claimant was found to be carrying out a procedure for which the minimum protective clothing included a face visor but where he was only wearing goggles. He was suspended from work for a week as a result and one of the respondents’ directors wrote to him and his fellow employees by letter dated 28 May 2004, in terms which included:
“Rohm and Haas have always maintained and insisted upon the highest standard of safety in the past and at present. They are also modifying some of their method statements and work practices at present to further increase their standards of safety.

The management of Wastemaster have always worked closely with the Rohm and Haas Health and Safety Department to try and maintain the levels of safety required and hopefully in the very near future we will have further meetings to discuss any new practices.

With the knowledge and information you have gained over the years we are very disturbed and disappointed that one of you failed to carry out the correct safety work practices.

As you are already aware, Robert Davie has been suspended from the Rohm and Haas site and also suspended without pay from Wastemaster.

It has been clearly stated to us from Rohm and Haas management that a repeat occurrence of any failure to comply with site safety rules will not be tolerated.

With this information in mind, Wastemaster has no alternative but to inform you that in the event of any further failures to comply with Rohm and Haas site safety rules that this would ensure that Wastemaster would take drastic disciplinary action against any employee failing to comply.” 

4.	The claimant signed a docket to certify that he had understood and accepted the terms of that letter. 

5.	By letter dated 25 June 2004, Rohm and Haas’ production manager wrote to Mr Clark regarding the incident, indicating that the claimant would be allowed to restart working at Grangemouth but including the following:

“As I said in my review with yourself, and your whole team on 22 June, the only reason you are being allowed to continue working on the site is that myself and the rest of the Management team are convinced that you will work in a safe manner and abide by all the site safety rules. You must be in no doubt however that any subsequent breach of safety rules or unsafe acts by any of your team will not be tolerated. They will not be a point of discussion, they will result in action against the individual and potentially the whole team……….”

6.	On 14 June 2005, the claimant was working at the Grangemouth plant. His work that day involved cleaning an item of plant known as “Fluid Bed Plenum” which was in two sections, an upper and a lower section. He and his workmates were told that there would be separate permits issued for each section. They were issued with a permit for and cleaned the upper section.  The respondents’ manufacturing technologist, Lyn Philp went to carry out the necessary checks prior to issuing the work permit for the lower section. These included an atmosphere test which is carried out via a gas monitor. It was not working properly so she went to the plant offices to obtain a replacement, telling one of the claimant’s workmates that she was doing so. 

7.	The claimant returned to the Fluid Bed Plenum as Ms Philp was returning to her office. He assumed that she had carried out the necessary checks and instructed one of his workmates to go and collect the work permit which he assumed that she would be issuing.  He then began working on the lower section which involved standing on scaffolding and playing water from a high pressure hose upwards into a hopper to ensure that all material had been washed out.  He did not realise that the atmosphere check still required to be carried out. Ms Philp returned with a gas monitor, to carry out the necessary check, found the claimant working on the lower section and immediately reported the matter to the production superintendent, Mr Gow. 

8.	The claimant and his colleagues were called to a meeting immediately thereafter at which the claimant confirmed that he had started the job without first obtaining a work permit and that he took full responsibility. He was then suspended from the site. The following day there was a meeting between Mr Clark and another of the respondents’ directors, Matthew Johnson, and Mr Scattergood and Mr Gow, of Rohm and Haas. The latter advised that they had decided, because of the incident the previous day taken together with the previous incident involving the claimant on 28 May 2004, permanently to suspend him from the site. Those two directors of the respondents visited the claimant at home the following day and advised him of Rohm and Haas’ decision. His reaction was that he had expected that that would be the case and he would be resigning. 

9.	A week later, the same two directors visited the claimant at home again, taking a letter of resignation with them for him to sign. He refused to sign it. On his return to the office, Mr Clark wrote to the claimant dismissing him with effect from 14 June 2005. 

10.	Nothing can be gleaned as to what would or might have happened if a dismissal procedure had been gone through. The tribunal make no findings in fact regarding the time that the respondents would have taken if they had followed the dismissal procedures provided for in Schedule 2 to the Employment Act 2002 nor do they make any findings in fact regarding what would or might have been put forward on behalf of the claimant in the course of such a procedure or what would or might have been taken into account by the respondents. They make no findings regarding what other steps, such as reverting to Rohm and Haas to see if there were any means by which they could agree that this employee of such long standing could remain on site in some form of employment and what Rohm and Haas’ response would have been. Nor do they make any finding regarding what the respondents’ decision after such procedures would or might have been.   We recognise that that may well be on account of there being a lack of evidence on these matters but for reasons which will be evident from our discussion later in this judgment, this lack of findings in fact seemed to us to be significant in the circumstances of this case.

The Tribunal’s Decision
11.	The dismissal was clearly automatically unfair under and in terms of section 98A of the Employment Rights Act 1996 given the complete lack of adherence to the requisite statutory procedures. The tribunal so held and it is not disputed that they were correct to do so. 

12.	As regards compensation, the award included sums in respect of the basic award and compensation.  The calculation of the basic award under reference to the claimant’s length of service was carried out at paragraph 25 and there is no dispute about the figures brought out in that calculation. 

13.	As regards the compensatory award, the tribunal, at paragraph 26, state:

“With regard to the compensatory award, we accept Mr Grant’s submission that if proper procedures had been in place and had been complied with by the respondents, the claimant would have been dismissed for the conduct in question within a period of three weeks and such a dismissal would have been within the range of reasonable responses by an employer in the circumstances. Accordingly the compensatory award should be based on three weeks’ earnings, a sum of £900, to which should be added the sum of £300 in respect of loss of statutory rights, a total of £1200.”

14.	It was also submitted that the claimant had contributed substantially to his dismissal and that any award should be reduced accordingly. The tribunal refer, appropriately, to the provisions of section 122(2) and 123(6) of the 1996 Act which allow for reductions, on that basis, of both the basic and compensatory awards. They then explain:

“28. Mr Stirling sought to minimise the seriousness of the claimant’s conduct, arguing that he had proceeded to carry out work believing that the Permit which he required had been issued and was in the possession of his colleague, that the operation which he had carried out had in the past been carried out with the necessity of a separate permit , that he had no basis for believing that a gas monitor was to be required nor that it would serve any useful purpose if it had been present, and that no convincing evidence had been led as to the nature of the threat to health and safety of the claimant or any others present as a result of his proceeding as he did. Against that, we have to consider that he was operating in a regime in which there were strict requirements and a constant emphasis on the need to comply with the instructions of the appropriate production management staff; while it was obviously desirable that an operative in the claimant’s situation should understand and appreciate the reasons for the imposition of any particular requirement, he was not entitled to disregard the rules. Following the incident in 2004, he was also operating under what was in effect a final warning that any breach of the compliance requirements and not only one of the same kind as one which had occurred, would result in disciplinary action. Taking all these considerations together it is our conclusion that the basic award should be reduced by 90%, to the sum of £800 in round terms, but that as the compensatory award has been restricted to £1200, it should not be further reduced.”

15.	Accordingly, shortly put, the tribunal assessed the basic award at £7,980 but found that the claimant’s entitlement to an award in respect thereof should be reduced by 90% to £800. Separately, they found that the appropriate compensation should be the sum of £1200, based on a conclusion that he would have been dismissed within three weeks in any event but that the compensatory award should not be reduced any further due to contributory conduct because it had already suffered the restriction of being based only on the three week period. 

The Appeal
16.	For the claimant, Mr Pilkington submitted that the tribunal had fallen into a serious error of law in respect of their assessment of the compensatory award. They had made no finding in fact that the claimant had wilfully flouted health and safety rules.  In restricting the award to a three week period, they had had no regard to the claimant’s long service and the other factors that weighed in his favour. The tribunal had assumed that the claimant would have been dismissed in any event within three weeks but they had made no finding in fact which supported them in making that assumption. They required to have made findings in fact regarding what the respondents’ were saying about the claimant’s position, namely that he had not thought that a gas monitor was required and that he had thought that a permit had been issued.  

17.	The tribunal should, he submitted, in determining the compensatory award, have followed the usual route, as set out in the case of Digital Equipment Co Ltd v Clements (No 2) [1997] IRLR 140.  They had failed to do so and had thus erred. 

18.	Separately, Mr Pilkington sought to suggest that the tribunal should have taken account that a gas monitor test was not required prior to the issuing of a work permit. He made that submission under reference to the copies of the permits that had been lodged but that was not an argument that had been advanced before the tribunal and we do not see that it can be deduced from a reading of the permits themselves that he was right in that assertion.  In the end of the day, the submission was not pressed. 

19.	Turning to the 90% reduction, Mr Pilkington accepted, under reference to paragraph 2785 of Harvey: Industrial Relations vol 1, he said that he accepted that the assessment of contributory fault was so obviously a matter of impression, opinion, and discretion that there required to be a plain error of law or perversity before this tribunal could interfere. There had though, in his submission, been such error. He submitted that the tribunal ought to have made findings regarding the claimant’s position and they ought to have made findings about the respondents’ position regarding the mitigatory factors put forward.  This was a drastic reduction; they had found the claimant to have been almost 100% at fault and that was not warranted. 

20.	Mr Pilkington submitted that the case should be remitted to a fresh tribunal rather than the same tribunal. The tribunal that had heard the case previously had committed themselves to finding the claimant to have been almost 100% at fault and could not be expected to look at the matter with fresh minds. He did though accept that there was a likelihood of there being some finding of contributory fault. 

21.	For the respondents, Mr Bowen, plainly recognising that there may be difficulties with the tribunal’s compensatory award, confined his argument to indicating that his submission had to be that the tribunal were entitled to infer from the findings in fact made, the content of Rohm and Haas’ letter of 15 June 2005 in which they referred back to the warning given the previous year and the speed with which the respondents acted to dismiss the claimant that even if they had followed the statutory procedures, the urgency of the matter was such that there would have been dismissal within three weeks in any event . It was not, however, a submission that he pressed.  

22.	Regarding the 90% reduction in the basic award, Mr Bowen submitted that paragraph 28 of the tribunal’s showed that they had properly directed themselves. They had considered both parties’ positions and reached their decision in the light of that consideration. They had not reached a decision that no reasonable tribunal would have reached. 

23.	Regarding disposal, Mr Bowen submitted that if the case were to be remitted, it should be to the same tribunal. There was no good reason to think that they would not be able to deal appropriately with the remit. 

Discussion
24.	Dealing firstly with the appeal against the compensatory award, we are readily persuaded that the tribunal have fallen into error. Even if it could be said that drawing on their judicial knowledge, they were entitled to conclude that a proper disciplinary procedure would have been completed within three weeks (and we are not entirely convinced that they were since time scales for dismissal procedures to be worked through may vary from employer to employer), the problem is that they have clearly concluded that the claimant would have definitely been dismissed at the end of that procedure without having made any findings in fact which support that conclusion. We would refer back to the references we have made at the end of the section of this judgment headed “Background Facts” regarding the matters which would seem to be relevant and which, depending on the nature of the findings made, might have supported a conclusion of inevitable dismissal but might, equally, have led to the conclusion that whilst there was a chance of dismissal, there was also some prospect of retention of employment. 

25.	What the tribunal required to do but appear to have overlooked, is to work through a stage by stage process involving firstly, calculating the claimant’s overall loss which in this case would have required them to assess the period in respect of which they would (ignoring any question of whether he would have been dismissed in any event) have considered it reasonable to award a sum for loss of earnings, secondly, bearing in mind, as Browne–Wilkinson J put it in Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91, as approved in Polkey v A E Dayton Services Ltd [1987] IRLR 503 that:
“If the Industrial Tribunal thinks there is a doubt whether or not the employee would have been dismissed, this element can be reflected by reducing the normal amount of compensation by a percentage representing the chance that the employee would still have lost his employment.” 

they should then have made what is now commonly referred to as any “Polkey reduction” they considered, on the evidence, to be appropriate. They should then have turned their mind to whether or not, on the evidence, they considered it appropriate to make any reduction in the compensatory award to allow for contributory fault.   They then required to satisfy themselves that whatever award they then proposed to make was “just and equitable” as required by section 123 of the 1996 Act.  

26.	It is plain that the tribunal did not follow that approach. In these circumstances, we are satisfied that the award of compensation should be set aside.

27.	Turning then to the matter of reduction for contributory fault, we do not consider that the claimant’s criticisms are well founded. Whilst it is fair to say that the tribunal did not make specific findings in fact as to the claimant’s state of mind as referred to in submission and recorded in the first part of paragraph 28, it is clear to us that the tribunal have approached the question of reduction on the basis that his approach was as there set out. It does not, accordingly, matter from the claimant’s point of view, that there are no express findings of fact.  As regards the suggestion that they could not properly determine this issue without making findings as to the respondents’ position regarding the mitigatory factors advanced by the claimant, we do not consider that submission to be well founded. The tribunal did not require to know that before they could make a proper assessment of the extent of the claimant’s contributory fault. The respondents’ response to the claimant’s mitigation would have been irrelevant to that task.  

28.	We agree with Mr Bowen that, contrary to what was suggested on behalf of the claimant, the tribunal have clearly properly directed themselves and that that is plainly evident from the terms of paragraph 28. We do not see that they could, in all fairness, have been asked to give more by way of explanation than they have done. Moreover, bearing in mind, as Mr Pilkington accepted was the case, that the fixing of levels of contributory fault is largely a matter of impression, opinion and discretion, we consider that, in the circumstances of this case, 90% was clearly a percentage reduction at which the tribunal were entitled to arrive. 

Disposal
29.	In these circumstances, we will pronounce an order allowing the appeal but only to the extent of setting aside the compensatory award. 

30.	That will require the case to be remitted for a rehearing on that matter. The question of whether the remit should be to the same or to a fresh tribunal then arises. In the event, the matter which concerned Mr Pilkington, namely the risk of prejudgment on the question of contribution does not arise because the remit will be confined to the assessment of the compensatory award. We also take account of the fact that although parties may lead further evidence, if the same tribunal hears the case again, there should be a saving in the time taken over that evidence and their existing familiarity with the case should, in all the circumstances, be of assistance to both parties. 

31.	We will, accordingly, remit the case to the same tribunal for a rehearing to fix what sum, if any should be paid to the claimant by way of compensatory award.