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Appeal against a finding that the claimant had been unfairly dismissed. Appeal dismissed.
The claimant brought a complaint of unfair dismissal before the Employment Tribunal. That claim was put in the alternative; it was said that she was dismissed for an automatically unfair reason, making protected disclosures, contrary to s.103A Employment Rights Act 1996; alternatively, if the reason for dismissal was, as the respondent contended, the potentially fair reason of capability, then it was unfair applying the test of reasonableness under s.98(4) ERA 1996. The ET rejected the s.103A claim, found that the respondent had made out their capability reason for dismissal but went on to find the dismissal unfair under s.98(4). The respondent appealed.
The EAT rejected the appeal, saying that the Employment Tribunal was entitled to conclude that it was (subject to future Polkey issue at the remedy stage) based on their finding, having heard the dismissing officer, that her reason for dismissal extended beyond ill-health to perceived performance issues on which the claimant was not given an opportunity to respond.
Appeal No. UKEAT/0637/11/LA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At the Tribunal
On 19 April 2012
Judgment handed down on 1 June 2012
HIS HONOUR JUDGE PETER CLARK, MR C EDWARDS, MR P GAMMON MBE
WESTMINSTER CITY COUNCIL (APPELLANT)
MRS D SOHAL (RESPONDENT)
Transcript of Proceedings
For the Appellant
MR PAUL GREATOREX (of Counsel)
Westminster City Council Legal Services
P O Box 240
Westminster City Hall
64 Victoria Street
For the Respondent
MR LACHLAN WILSON (of Counsel)
85 King William Street
UNFAIR DISMISSAL - Reasonableness of dismissal
Ill-health dismissal. Whether fair at point of dismissal (subsequent appeal immaterial). Employment Tribunal entitled to conclude that it was (subject to future Polkey issue at the remedy stage) based on their finding, having heard the dismissing officer, that her reason for dismissal extended beyond ill-health to perceived performance issues on which the Claimant was not given an opportunity to respond.
Approach to s98(4) ERA appeals in Bowater (CA) applied.
HIS HONOUR JUDGE PETER CLARK
1. This case has been proceeding in the London (Central) Employment Tribunal. The parties are, as we shall describe them, Mrs Sohal, Claimant and Westminster City Council, Respondent.
2. The Claimant was a long-standing employee of the Respondent, having commenced that employment as a clerical officer on 1 December 1986 and, following promotion, reached the position of Finance Officer at the time of her dismissal by the Respondent effective on 17 August 2010.
3. She brought a complaint of unfair dismissal before the Employment Tribunal. That claim was put in the alternative; it was said that she was dismissed for an automatically unfair reason, making protected disclosures, contrary to s.103A Employment Rights Act 1996; alternatively, if the reason for dismissal was, as the Respondent contended, the potentially fair reason of capability, then it was unfair applying the test of reasonableness under s.98(4) ERA 1996.
4. An ET chaired by Employment Judge Pearl heard the case over 4 days in May 2011. Having reserved their judgment the ET deliberated in private for 2 further days, promulgating their Judgment with reasons on 20 September 2011. In short, the ET rejected the s.103A claim, found that the Respondent had made out their capability reason for dismissal but went on to find the dismissal unfair under s.98(4). There is no cross-appeal by the Claimant against the s.103A finding. The question of remedy was adjourned, the ET observing (para. 61) that there was a real question to be tried concerning Polkey, that is whether, had a fair procedure been followed, the Claimant would nevertheless have been fairly dismissed at some point in the future, or whether there was some and if so what percentage chance of that outcome. This is the full hearing of the Respondent's appeal against the ET's liability decision. We were told at our hearing on 19 April 2012 that the remedy hearing was listed before the ET on 3 May. In those circumstances, having considered the parties submissions, we were able to announce our decision, that the appeal failed, with reasons to follow. These are our reasons for dismissing the appeal.
5. Having been promoted to Finance Officer within the Respondent's Transportation Department in 2001 the Claimant's employment was unexceptional during the next 5 years; indeed her appraisals came out as excellent. However, events took a downward turn after Ms Tracey Parnell became her line manager in September 2006, so the ET found (para. 4)
6. During the period 2000-2007 the Claimant had 88 days sick leave. On 23 September 2008 she began 112 days sick leave, caused by a shoulder injury, returning on 16 March 2009. Following her return she had 6 days sick absence from 1 April 2009. On 14 April 2009 she was placed on stage 2 of the Respondent's Enhanced Sickness Procedure (ESP), stage 1 having been missed out. That was not permitted under the procedure (para. 10). On that day she was set an improvement target of not more than 7 days sick leave in the next 365 days. In August 2009 she was seconded to the Housing Department for 3 months.
7. On 10 February 2010 she was sent a letter by Ms Parnell requiring her to attend a meeting on 26 February to discuss Ms Parnell's concerned about the Claimant's unsatisfactory performance at work under the Respondent's Unsatisfactory Performance Procedure (UPP).
8. Before that meeting was held the Claimant went off work sick on 11 February 2010 and remained absent for 98 days until 5 July 2010. On 8 June Ms Parnell wrote to the Claimant inviting her to a meeting on 16 June, said not to be a sickness hearing, although she was warned that there may be referral to a sickness hearing at which a range of options would be considered for her continued employment, including the possibility of dismissal. She wrote again on 15 June in similar terms, moving the meeting to 23 June.
9. Meanwhile, the Claimant had raised a grievance against Ms Parnell which led to a lengthy report by Mr Singh, the Financial Controller, dated 16 November 2009. He interviewed 7 witnesses, including the Claimant and Ms Parnell. Some spoke of the Claimant under-performing. He recommended that appropriate assistance be provided to the Claimant (something which the ET found was never implemented: para. 14). He further recommended that there be a letter of apology from Ms Parnell (she gave a somewhat qualified apology: para. 15); that the Claimant should be monitored by her line manager for 3 months; that a training needs analysis of the whole team should be undertaken and finally clear advice should be given to all team members concerning their responsibilities in assisting colleagues.
10. Following mediation between the Claimant and Ms Parnell a mediation agreement was signed by both of them on 1 July 2010.
11. Whilst the Claimant was off sick between 11 February and 5 July 2010 Ms Parnell received advice from HR as to the Claimant's sickness record dated 26 March. That note identified the risk of proceeding with the Council's ESP and recommended a switch to their Long Term Sickness Policy (LTSP). The recommended option was to conduct a case review meeting following advice from Occupational Health (OH) and the mediator, to run in tandem with the UPP.
12. Following the Claimant's return to work on 5 July 2010 Ms Parnell wrote to the Claimant on 12 July under the UPP to arrange an initial meeting under the UPP on 29 July. The result of that meeting was an action plan letter of even date involving monthly review meetings in September, October and November 2010, with the possibility of a hearing under that procedure if the Claimant failed to improve her performance.
13. However, the UPP procedure was overtaken by events. The Claimant returned to work on 12 July and on 21 July Ms Parnell held a sickness review meeting with her following her letter of 14 July. That led to her dismissal by Ms Moorhouse following a hearing on 12 August. The ET found that nobody was clear as to whether that took place under the ESP or LTSP. Ms Moorhouse's dismissal letter of 17 August is less than clear as to which policy was being used at that point. Mr Greatorex argues that it did not matter. We shall return to that submission later.
14. Ms Moorhouse had before her a lengthy report from Ms Parnell which included OH opinions. The most recent, given on 12 July, was summarised by Ms Parnell in her report in this way; there was no underlying medical condition affecting the Claimant's performance other than significant anxiety about returning to the same environment as before and the performance issue; she was fit for a phased return and would be fit for normal duties in 4-6 weeks. The doctor raised the possibility of redeployment which would not be on medical grounds as she was fit for her present role. The health problem may recur in adverse circumstances. A subsequent appeal to Councillors failed (paras. 41-42).
The ET decision
15. The ET found (para. 50) that the reason for dismissal was capability and not her having made protected disclosures.
16. Having reminded themselves (para. 51) that it was not for the ET to substitute their view for that of the employer and to determine whether dismissal fell within the range of reasonable responses they concluded (para. 52) that the fairness of the dismissal (under s.98(4)) was structurally undermined in three respects; (a) the Respondent's confusion about procedures (b) the legitimate and fair expectations of the Claimant after her grievance and mediation and (c) the unfair conduct of Ms Moorhouse who, as much as anything else, dismissed the Claimant for under-performance. They develop each of those themes at paras. 53-60.
17. We begin by reminding ourselves of s.98 ERA, sometimes passed over, but not by this ET (para. 44). It is for the employer to show a potentially fair reason or principal reason for dismissal. In this case the reason shown related to capability. In practice that will cover, on the present facts, both ill-health capability and performance levels and the reason for dismissal is the set of facts or beliefs held by the employer which lead him (or her, in this case Ms Moorhouse) to dismiss the employee.
18. Turning to s.98(4), the ET must determine (the burden of proof being neutral) whether the dismissal is fair or unfair (having regard to the reason shown by the employer) and that depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking; here, substantial) the employer acted reasonably or unreasonably in treating it (i.e. the employer's reason) as a sufficient reason for dismissal. That judgment must be made at the point of dismissal (subject to new facts emerging on appeal; not this case).
19. On appeals from a finding of fair or unfair dismissal under s.98(4) we are reminded of the Court of Appeal's guidance in Bowater v North West London Hospitals NHS Trust  IRLR 331. That was a conduct unfair dismissal case, but we accept that the general principles relating to s.98(4) appeals apply equally in this capability appeal, namely that proper respect must be paid to the decision of the ET (we bear in mind that the ET, under the guidance of a highly experienced and careful EJ, spent 2 days deliberating on this case). Appeals to the EAT lie on points of law only; it is not for us to substitute our judgment for that of an ET which asks itself correctly whether dismissal fell within the range of reasonable responses (see ET reasons, para. 51). That approach also feeds into the high hurdle faced by an appellant relying, as does the Council in this case, among other grounds on perversity: Yeboah v Crofton  IRLR 634.
20. Against that background we turn to the submissions advance by Mr Greatorex in support of the appeal under 4 heads, which it is convenient to consider in the following order: (1) perversity (2) the 'Spencer v Paragon' point (3) the 'McAdie' point (4) procedural unfairness.
21. The Respondent seeks to challenge, as perverse, certain findings of fact by the ET, namely that Ms Moorhouse did not look at the grievance recommendation by Mr Singh; that the Respondent had not implemented those recommendations (save for Ms Parnell's 'qualified' apology); that the Respondent confused their ESP and LTSP in dealing with the Claimant's sickness absences; that at the 21 July meeting there was no reference by Ms Parnell to which procedure was to be used and that she was at risk of dismissal at the hearing before Ms Moorhouse and findings in relation to the use of UPP, the quality of Ms Moorhouse's evidence and the ET's finding that unfairness lay not simply in the confusion between sickness procedures, but in dismissing the Claimant apparently on grounds of her sickness record, without disclosing to her and seeking her response on a further factor which, it emerged in evidence, influenced Ms Moorhouse's decision to dismiss namely her performance levels.
22. That is not an exhaustive list of all the findings challenged by the Respondent under this head, but a summary of the main complaints. We deal with this head of appeal shortly. It fails. We cannot and shall not retry the facts of the case. We are satisfied that each of the findings of the ET here challenged were permissible findings on the evidence before them. We therefore proceed to the remaining grounds of appeal, based on the ET's findings of fact.
Spencer v Paragon
23. The ET adopted (para. 53) Mr Greatorex's approach in closing based on the judgment of Phillips J in Spencer v Paragon Wallpapers Ltd  IRLR 373. The extract there referred to identifies the basic question (in an ill-health capability dismissal) to be determined in the circumstances of the particular case: can the employer be expected to wait any longer and if so how much longer?
24. Mr Greatorex submits that this ET failed to make a highly material finding, namely whether Ms Moorhouse was entitled, applying the band of reasonable responses test, to conclude, as she said in the dismissal letter, that the Claimant's pattern of sickness absence was unlikely to improve.
25. However, this was not the classic Spencer v Paragon type case, where the employee remains off sick at the date of dismissal and it is uncertain when he is likely to return to work. Here, the Claimant had returned to work following a period of sick absence; she had been certified fit for work by the OH doctor on 12 July. Further and significantly in the view of the ET, her dismissal by Ms Moorhouse was not simply by reason of her sickness record but also as a result of her perception of the Claimant's performance levels and the effect this had on her colleagues and the business. That feature is clearly set out in the ET's reasons.
26. In closing below Mr Greatorex referred to the CA decision in McAdie v RBS plc  IRLR 895. The ET did not refer to that case in their reasons and, submits Mr Greatorex, they fell into the same trap as the ET in McAdie.
27. In that case the CA approved the approach of the EAT (Underhill P) in reversing the ET's finding of unfair dismissal. In particular, the following principles emerge; first, even if the employee's ill-health capacity is caused by the employer, that will not necessarily preclude a fair dismissal on capability grounds. In that case the employee was off work through sickness at the date of dismissal (the date for assessing reasonableness under s.98(4)): there was no prospect of her being fit to return and besides, she had made it clear that she would not return to work for the Respondent.
28. That factual scenario could not be more different from the present case. Here, the ET made no finding that her last sick absence was caused by the employer; she was back at work at the time of dismissal and, so the ET found, she was not dismissed solely as a result of her ill-health, but also for the different performance concern.
29. Mr Greatorex put this point at the forefront of his submissions in response to those of Mr Wilson by way of reply. Even if, as is the case, we were against him on the other heads of appeal, this point he submitted was unanswerable.
30. The complaint is that in finding that Ms Moorhouse's reason for dismissal was as much as anything else (her sickness record) the Claimant's under-performance the ET found against the Respondent on a point which was not raised either by the Claimant or the ET itself. That is a breach of basic natural justice. The ET can only determine the issues placed before it.
31. We do not doubt that general principle; it is trite, as Lady Smith observed in Camelot Group plc v Hogg (UKEATS/19/10, 13 October 2011) para. 49, to which case we have been referred.
32. It is equally clear that the point was not articulated in the form ET1, nor in the Claimant's closing submissions. Mr Wilson did not appear below.
33. However, that overlooks the particular circumstances of this case. It is unsurprising that no positive case as to the employer's reason for dismissal appeared in the form ET1. On the face of the dismissal letter this was a dismissal on the grounds of ill-health capability only. It was, on the ET's findings, only when Ms Moorhouse gave her oral evidence that a different picture emerged; see particularly paras. 32-39. That is what led to their conclusions at paras. 57-59 that Ms Moorhouse's approach was outside the band of reasonable responses in that it was formed in part on her perception of the Claimant's performance, which was at an early procedure stage and on which she did not seek a response form the Claimant.
34. The irony of the Respondent's position, that they were not given an opportunity by the ET to deal with the point that Ms Moorhouse did not give the Claimant an opportunity to deal with her performance concerns has not escaped us. However, that is not the point.
35. Assuming in the Respondent's favour that the ET was in breach of its duty of fairness to alert it to the reason for dismissal question, that does not lead inexorably to our finding that its decision must be set aside – where the result is plainly and unarguably right: see Judge v Crown Leisure Ltd  IRLR 823 (CA).
36. Here, it was for the Respondent to show its reason, its set of facts or beliefs, which led to the dismissal decision and for the ET to judge the reasonableness of dismissal based on that set of facts or beliefs. If it concluded on the evidence that the reason for dismissal by Ms Moorhouse went beyond the Claimant's sickness record and the prospects of a recurrence to take into account also what she had been told about the Claimant's perceived performance levels without giving the Claimant an opportunity to comment; that was capable of amounting to unfairness as at the date of dismissal; indeed, such a conclusion is plainly and unarguably correct. The position was not saved for the Respondent by the internal appeal. Indeed, the Respondent's conclusion that redeployment was not an option, given her previous redeployment, was in part due to Ms Moorhouse's belief that the Claimant would not fit in anywhere due to her under-performing. All this aside from the Respondent's muddle over its various procedures.
37. That said, the ET were careful to restrict their finding of unfairness to the point in time at which the Claimant was dismissed (para. 60). They were alive to the very real Polkey issue which will fall to be determined at the remedy hearing.
38. Nothing we have said in this Judgment is intended to or could influence the ET's approach to the Polkey question.
39. For these reasons this appeal stands dismissed.