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Cite as: [2017] EWCA Civ 145, [2017] ICR 737, [2017] WLR(D) 186

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Neutral Citation Number: [2017] EWCA Civ 145
Case No: A2/2015/3377

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Employment Appeal Tribunal
HH Judge Serota QC

Royal Courts of Justice
Strand, London, WC2A 2LL
15/03/2017

B e f o r e :

SIR TERENCE ETHERTON MR
LORD JUSTICE DAVIS
and
LORD JUSTICE UNDERHILL

____________________

Between:
GEORGINA O'BRIEN
Appellant
- and -

BOLTON ST CATHERINE'S ACADEMY
Respondent

____________________

Ms Elaine Banton (instructed by Berg) for the Appellant
Mr Edward Legard (instructed by RBS and Natwest Mentor Services) for the Respondent
Hearing date: 25 January 2017

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lord Justice Underhill :

    INTRODUCTION

  1. The Appellant is a teacher. In 2005 she started employment at Withins School in Bolton as Head of Information and Communication Technology. In 2009 Withins became an academy and was re-named Bolton St Catherine's Academy; the Appellant's job title changed to Director of Learning ICT. The academy (to which I will refer as "the school") is the Appellant's employer.
  2. On 25 March 2011 the Appellant was assaulted by one of the pupils at the school. The physical consequences of the assault were not, fortunately, very grave and she had only a short period off work in the immediate aftermath. But she was very shaken by the incident. She felt unsafe in parts of the school and her duties were restricted accordingly. She believed that the school authorities were not taking sufficiently seriously the incidence of aggressive behaviour by students; in particular, she was dissatisfied by its refusal to reinstate an earlier policy under which pupils who assaulted staff were automatically excluded. After some further incidents, on 9 December 2011 she went off sick. The initial diagnosis was stress at work. There were subsequently other diagnoses, including anxiety, depression and post-traumatic stress disorder.
  3. Eventually, after the Appellant had been off work for over a year, she was dismissed for medical incapacity with effect from 31 January 2013. The dismissal was upheld on an internal appeal.
  4. The Appellant brought proceedings in the Employment Tribunal. She complained both about her treatment by the school in the period prior to her dismissal and about the dismissal itself. We are not now concerned with the non-dismissal claims. As regards her dismissal, she claimed:
  5. (a) that it constituted "ordinary" unfair dismissal within the terms of section 98 of the Employment Rights Act 1996;

    (b) that it constituted "automatic" unfair dismissal, within the terms of sections 100, 103A and/or 104 of the 1996 Act – we are not now concerned with those claims;

    (c) that her illness constituted a disability and that either;

    (i) she was dismissed because of it so as to give rise to direct discrimination within the meaning of section 13 of the Equality Act 2010; or
    (ii) that her dismissal constituted unfavourable treatment arising from that disability which the School could not justify and thus constituted discrimination within the meaning of section 15 of the 2010 Act;
    the discrimination in either case being rendered unlawful by section 39 (2) (c); and

    (d) that the dismissal was wrongful because the school had dismissed her summarily and paid "money in lieu of notice" in the absence of any contractual right to do so.

    There was also a claim for arrears of holiday pay.

  6. Those claims were heard by an Employment Tribunal sitting in Manchester, chaired by Employment Judge Porter, over four days in September 2014. It was common ground at the hearing that the Appellant was at the material times suffering from a disability.
  7. By a judgment sent to the parties on 6 November 2014 the Tribunal dismissed the claims in relation to the Appellant's pre-dismissal treatments, including the claim for arrears of holiday pay. It also dismissed the claims for automatic unfair dismissal and direct discrimination. However, it upheld her other claims in relation to the dismissal, i.e. ordinary unfair dismissal, the claim under section 15 of the 2010 Act and (though this was of marginal significance) wrongful dismissal. It directed a remedy hearing. I should say at this stage that the judgment is a clear and thorough piece of work.
  8. The school appealed to the Employment Appeal Tribunal (except with regard to the finding of wrongful dismissal). The Appellant did not cross-appeal in respect of the claims on which she had lost.
  9. The appeal was heard by HHJ Serota QC sitting alone on 3 June 2015. By a judgment handed down on 18 September he allowed the school's appeal and remitted the case to a differently constituted tribunal for a re-hearing of the claims which were the subject of the appeal.
  10. Before us the Appellant has been represented by Ms Elaine Banton and the Respondent by Mr Edward Legard, both of whom also appeared before both tribunals below.
  11. THE BACKGROUND LAW

  12. The claim for unfair dismissal is governed by the very familiar provisions of section 98 of the Employment Rights Act 1996, which I need not set out in full. In summary, a dismissal will be unfair unless it is for one of the admissible reasons specified in sub-sections (1): those reasons include "capability", which in turn covers health (sub-section (3) (a)). If it is proved to be for one of those reasons, then, by sub-section (4):
  13. "… the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)—
    (a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and
    (b) shall be determined in accordance with equity and the substantial merits of the case."
  14. It is trite unfair dismissal law that in assessing the reasonableness of the employer's conduct an employment tribunal for the purpose of sub-section (4) must not substitute its own opinion about whether the employee should have been dismissed but must recognise that there will be (sometimes) a range of reasonable responses and that a dismissal should not be held to be unfair unless it falls outside that range. But it has also been emphasised that that is not equivalent to a test of perversity: Post Office v Foley [2000] EWCA Civ 3030, [2001] ICR 1283, per Mummery LJ at p. 1291-2, and, most recently, Turner v East Midlands Trains Ltd [2012] EWCA Civ 1470, [2013] ICR 525, per Elias LJ at paras. 18-19 (pp. 533-4).
  15. There is a good deal of case-law about the dismissal of employees with long-term illness but most of the reported cases simply illustrate the point made by Phillips J in one of the first such cases in the EAT, Spencer v Paragon Wallpapers Ltd [1977] ICR 301, that (p. 307 B-D):
  16. "Every case depends on its own circumstances. The basic question which has to be determined in every case is whether, in all the circumstances, the employer can be expected to wait any longer and, if so, how much longer? Every case will be different, depending upon the circumstances."

    He noted that the relevant circumstances include "the nature of the illness, the likely length of the continuing absence, the need of the employers to have done the work which the employee was engaged to do" (p. 306G).

  17. As for the discrimination claim, section 15 (1) of the 2010 Act reads as follows:
  18. "A person (A) discriminates against a disabled person (B) if—
    (a) A treats B unfavourably because of something arising in consequence of B's disability, and
    (b) A cannot show that the treatment is a proportionate means of achieving a legitimate aim."

    Discrimination against an employee by dismissal is rendered unlawful by section 39 (2) (c) of the Act. Counsel used the familiar shorthand of "justification" for the test embodied under element (b) in the definition, and I will do the same. Again, there is of course a plethora of case-law about the correct approach to justification in discrimination cases but I need not refer to any of it here. The effect of section 6 of the 2010 Act, read with paragraph 1 of Schedule 1 is (broadly) that an illness which has lasted, or is likely to last, twelve months will constitute a disability; but we were not referred to any cases addressing the issue in the particular context of dismissals for long-term sickness.

    THE DECISION OF THE EMPLOYMENT TRIBUNAL

  19. Much of the Tribunal's judgment is concerned with the Appellant's complaints about her pre-dismissal treatment. In this appeal, however, we are only concerned with its findings and reasoning about the dismissal.
  20. THE FINDINGS OF FACT

  21. The sequence of events leading up to the Appellant's dismissal is fully recounted at paras. 51-85 of the Reasons. For present purposes it can be sufficiently summarised as follows:
  22. (1) When the Appellant went off sick on 9 December 2011 she submitted a sick note from her doctor referring to stress at work. The school arranged for her to undergo a course of CBT.

    (2) On 14 March 2012 there was a meeting between Mrs Wilkinson, the school's Human Resources Director, the Appellant and her trade union representative, Mrs Simpkins. It was agreed at the meeting that the Appellant should be referred to an occupational health physician; the school used the occupational health service offered by AXA.

    (3) On 19 April the AXA doctor reported. He described the case as difficult and said that considerable work would be required to resolve the Appellant's anxieties and overcome her perception that she was inadequately supported by the school; that if that proved possible she would be able to return to work; but if not, not.

    (4) On 21 August AXA reported again. It noted that although the Appellant was continuing to receive both psychological treatment and medication from her GP her condition had not improved and the GP had suggested a diagnosis of PTSD. She remained unfit for work and no adjustments had been identified that might facilitate her return.

    (5) On 24 August the Appellant was signed off work for two months.

    (6) A meeting was arranged with the Appellant for 1 November, in accordance with the school's procedures for managing sickness absence, to discuss her continuing absence and the latest report from AXA. On 31 October, the day before the meeting, Mrs Simpkins telephoned Mrs Wilkinson to say that the Appellant did not wish to attend because she felt that she had nothing more to say and the meeting would upset her. Mrs Wilkinson explained that the school wanted the meeting because the Appellant had been off work for almost a year and it needed to understand whether a return to work was likely and whether there were any adjustments which could be made to facilitate her recovery. Mrs Simpkins asked if the information could be given in writing, and Mrs Wilkinson agreed.

    (7) On 1 November Mrs Wilkinson sent the Appellant a list of nine questions. The first six sought more detailed information about her recent treatment. The last three were:

    "7. What do you believe are the barriers to you returning to work?
    8. Do you feel that you will be able to return to work at some point in the future and if so what are the likely timescales?
    9. Are there any adjustments that can be made by the Academy in order to facilitate return to work ?"

    (8) The Appellant failed at first to reply, but when Mrs Wilkinson sought an answer through Mrs Simpkins she received, on 21 November, a reply to most of the questions to the effect that she was not qualified to answer and that AXA should contact her GP. As to the last three questions she said:

    "7. I believe that the work environment at [the school] has made me ill.
    8. This is impossible for me to answer this point in time.
    9. I refer you to my answer to question 7. I also suggest that you look at your own notes on that subject to which could provide you with all of the information that you need in this regard."

    (9) Mrs Wilkinson took up the invitation in that response and wrote to the Appellant's GP, though only after a hiccup caused by the Appellant failing at first to provide the necessary consent. However, his reply, received only after the Christmas holiday, was to the effect that he was unable to answer the questions and that the school should speak to the Appellant.

  23. At that point Mrs Wilkinson, who the Tribunal found was – I must say entirely understandably – frustrated at the non-co-operation by the Appellant and her GP, decided that she should proceed to a formal medical incapacity hearing under the school's procedures.
  24. The hearing took place on 28 January 2013 before a panel of three governors, chaired by Mr Hopkinson, the Chair of the Governors Standards Committee. Mrs Wilkinson presented the case for the management. She set out the history of her dealings with the Appellant and Mrs Simpkins and advanced the case that the Appellant should be dismissed for long-term sickness. The Tribunal noted that no material was put before the panel about the effect of the Appellant's absence on the school. The Appellant was represented by Mrs Simpkins and both addressed the panel. There was no challenge to the medical history as presented by Mrs Wilkinson, but the Appellant told the panel that she had recently been referred to a therapist, who had decided to treat her for PTSD, although she was not in a position to make a formal diagnosis; the treatment would involve seven sessions. She said that it had made a big difference to her to be told that her condition was treatable; that she had told her GP that she wanted to come off her medication; and that she hoped to be able to return to work by the end of April 2013, when she would have concluded her treatment, though she thought her return to work should be on a phased basis. She and Mrs Simpkins did, however, say that the therapist had not felt able to confirm that she would be able to return to work and would not feel able to express a view until the conclusion of the treatment. In response to a question from Mr Hopkinson about what her reaction would be if following a return to work there was another incident similar to that in March 2011 she said that she was unable to say.
  25. The panel's decision, communicated at the end of the hearing and confirmed in writing on 29 January 2013, was that the Appellant should be dismissed. The Tribunal found that the factors that led it to that decision were those identified in the letter, namely:
  26. "1. the length of time off work to date with no substantive progress of condition;
    2. no prognosis that indicates a return to work likely in the near term;
    3. concern that the incidents that precipitated your condition could occur again in the school environment".

    The Tribunal found that in reaching its decision the panel

    "… did not consider the impact of the claimant's absence on the business, did not way up the effects of terminating the claimant's employment against the prospect of having to incur further expense, disruption and asking colleagues to provide extra support for a further 3 months"

    (Reasons, para. 95). It appears that Mr Hopkinson did say, in cross-examination and in answer to questions from the Tribunal on this aspect, that the school's top priority was the students' educational needs, that the Appellant's absence created a "challenging situation", and that "not having a head of a very important department was going to impact on the students' education"; but the Tribunal found his evidence on this aspect to be vague and in some respects contradictory.

  27. The school's procedures provide for an appeal against a range of disciplinary and other decisions, including decisions under the medical incapacity process. Para. 1 (d) of the written procedure provides:
  28. "The function of an appeal is not to conduct a full rehearing of the facts of the case, though it is inevitable that reference will have to be made to the earlier hearing. Usual grounds for appeal will therefore be the coming to light of new information, procedural irregularities or alleged unreasonableness of the decision."
  29. The Appellant exercised her right of appeal. She submitted grounds: most are immaterial for our purposes, though I should note that she said that she would provide up-to-date medical evidence, though none was included with the grounds. The school produced a written response, drafted by a Mr Watts of its external HR consultants, Mentor.
  30. The appeal hearing took place on 10 April 2013, before a panel of a different three governors, chaired by Mr John Wallington. Mr Hopkinson attended to explain the decision of the original panel. The Appellant was represented by a different trade union representative, Mrs Greaves. At the start of the hearing she presented two documents, as follows:
  31. - The first was a standard-form Statement of Fitness for Work signed by her GP and dated 9 April. The note recited that he had assessed her case on 9 April, i.e. the previous day, and advised, by ticking the appropriate box and deleting the word "not" that she was "fit for work". In a further box addressing how long that would be the case he wrote "ongoing". That is unequivocal as far as it goes but it might be thought unsatisfactorily summary as evidence that the Appellant was indeed fit to return after so long an absence.

    - The second was a letter from Mrs Catherine Welden, an Associate Psychologist, dated 23 February 2013. It recorded that she had met the Appellant on 22 February and administered various tests from which she diagnosed mild depression and severe anxiety. There is also a reference to PTSD, though it is unclear whether a specific diagnosis is being made. The report recommends a course of "EMDR (Eye Movement Desensitisation and Reprocessing)", saying that she would "expect [the Appellant] to return to her pre-trauma functioning within 10-12 sessions"; alternatively twelve sessions of "trauma-focused CBT". Though this is broadly in line with the position recounted by the Appellant to the medical incapacity hearing, the details are difficult to reconcile, since Mrs Welden does not appear to have seen the Appellant until February 2013; this oddity was not resolved by the Tribunal. The report is clearly helpful to the Appellant as far as it goes, but it pre-dates her undergoing the treatment which it recommends.

  32. The Appellant and Mrs Greaves told the appeal panel that following an original failure to diagnose her condition she had now undergone the appropriate treatment and was fit to return to work full-time. They relied on Mrs Welden's report and on the GP's "fit note". Mr Watts asked the Appellant at the very start of the hearing whether she really felt well enough to return, and without any adjustments to her work. She confirmed that "healthwise" that was the case, although she understood that she might need some time to learn systems that had changed in her absence. She confirmed this in her formal statement which she read to the panel, saying (in summary) that her condition had not been properly diagnosed but that when it had been decided to treat her on the basis that she was suffering from PTSD she had begun to improve at once. The notes of the hearing are rather ambiguous – and the Tribunal made no finding – about whether she told the panel that she had completed the full number of sessions of EMDR recommended by Mrs Welden (which seems rather unlikely given that less than three weeks had elapsed); but she certainly said that she had undergone sufficient treatment to feel fully recovered.
  33. The panel's decision was communicated to the Appellant by letter dated 15 April 2013. Since the Tribunal found that the letter, which was drafted by Mr Watt, did not fully reflect the panel's reasoning I will set out its own findings as to what those reasons were. At para. 104 it said:
  34. "The appeal panel reviewed the decision to dismiss to decide whether the decision was reasonable. In reaching its decision the panel: -

    (I have omitted two bullet points that are neutral for our purposes.) The position, therefore, is that the panel was not satisfied that the fresh evidence really established that the Appellant was fit to return to work. The Tribunal went on to note (para. 105):

    "There was no evidence before the Appeal panel as to the affect [sic] the claimant's absence had had on the business, no evidence as to the burden, expense, disruption or extra support provided by colleagues arising from the claimant's absence. The Appeal panel, in reaching its decision, did not, as asserted in the letter confirming the decision weigh up those factors against the effects of terminating the claimant's employment."
  35. At para. 107 the Tribunal found that in June 2012 the hours of a previously part-time ICT teacher, Mr Kemp, were increased to full-time to cover the Appellant's absence. He did not, however, act as Head of Department: he simply replaced her teaching hours.
  36. THE TRIBUNAL'S SUMMARY OF THE LAW

  37. At paras. 110-160 the Tribunal set out the relevant law very fully. There are no particular passages to which I need refer.
  38. THE TRIBUNAL'S REASONING

  39. The Tribunal's reasoning and conclusions on the various claims are at paras. 161-213 of the Reasons, but we are only concerned with the part dealing with the Appellant's dismissal, and more particularly with her claims under section 15 of the 2010 Act and for unfair dismissal, which are at paras. 196-203 and 204-209 respectively. I take them in turn.
  40. The Section 15 Claim

  41. The Tribunal started, at paras. 196-198, by noting that the Appellant's dismissal constituted unfavourable treatment because of something arising in consequence of her disability, namely her long-term sickness absence; and that it followed that it was for the school to show that that treatment was a proportionate means of achieving a legitimate aim. It identified its aims in dismissing the Appellant as being "the efficient running of the school, the reduction of costs and the need to provide a good standard of teaching"; and it accepted that those aims were legitimate.
  42. At para. 199 the Tribunal turned to consider "whether the claimant's dismissal was a proportionate means of achieving that legitimate aim". It continued:
  43. "We have conducted a balancing exercise weighing the discriminatory effect of the treatment of the claimant against the employer's reasons for the treatment".

    It considered a number of factors. Its conclusion was that the Appellant's dismissal was disproportionate, essentially because (a) it had adduced no satisfactory evidence about the adverse impact which her continuing absence was having on the running of the school and (b) that in the absence of such evidence it was reasonable to wait "a little longer" to see if she would be able to return to work, particularly in the light of the encouraging evidence available at the appeal hearing. The reasoning is very fully stated, and I need not quote it all.

  44. The Tribunal's views about the inadequacy of the evidence provided appear sufficiently from para. 199.3, which reads (so far as material):
  45. "… [V]ague assertions have been made as to need for consistency in teaching but that aim, that requirement, and the effect of the claimant's absence on it, has not been explained. The respondent has not adduced satisfactory evidence, has not provided a satisfactory explanation, as to: -
    199.3.1 the disruption caused by the claimant's absence, the nature of the support provided by colleagues, the cost of covering her teaching duties, the effect of the claimant's absence on the running of the school and/or the standard of education provided to students. Mr Kemp covered the claimant's teaching duties. It is not known for what period and at what cost and to what extent, if any, that affected the standard of teaching.
    199.3.2 what steps had been taken to cover the remainder of the claimant's duties during her absence, that is, her position as head of ICT. Mr Hopkinson expressed concern about the absence of a Head of Department. No satisfactory evidence has been led as to how that adversely affected the business or the standard of education provided.
    199.3.3 why the claimant had to be dismissed at that point, how any continued absence would have affected the business and the standard of teaching, and how the dismissal of the claimant was intended to rectify any such adverse effect.
    199.3.4 what the respondent did to cover the remainder of the claimant's duties after her dismissal, what steps, if any, the respondent took after the dismissal of the claimant to rectify the asserted adverse impact on the business of the claimant's absence of a Head of Department. No evidence has been led as to how that was rectified following the dismissal."
  46. As for the reasonableness of waiting a little longer, para. 201 reads:
  47. "Dismissal was the most discriminatory means of achieving the aims. A less discriminatory way of treating this case was, at the time of the dismissal, to wait a little longer, to establish whether the claimant was, as she asserted at the Medical Incapacity hearing, able to return to work in the near future, whether the new treatment with the therapist would assist a return to work. There is no satisfactory evidence as to any adverse effect on the running of the business and/or the standard of the teaching by waiting a little longer. No satisfactory evidence has been provided as to why the respondent decided that the inability of the claimant to provided a definite date for return to work by the end of April 2013 adversely affected the business or the standard of teaching, why a total of 17 months absence was wholly unacceptable compared to an absence of say 20 or 21 months."
  48. At para. 202 the Tribunal addressed the position as it stood at the date of the appeal hearing, as follows:
  49. "At the Appeal hearing the claimant did provide a fit note to say that she was fit to return. She had also produced medical evidence from Mrs Welden, dated 23 February 2013, (page 469) which reported that after treatment, she would expect the claimant to return to her pre-trauma functioning. That was consistent with the claimant's assertion at the Appeal hearing that she had completed the treatment and that she could return to school, knowing that with amendments to the policies and procedures, incidents were likely to be fewer and she was better able to deal with them. Mr Hopkinson had told the Appeal Panel that for 20 years the claimant was able to deal with these situations. We accept that the respondent was entitled to review all the medical evidence, and the evidence of the claimant, before reaching their decision. We note in particular the decision in D. B. Schenker Rail UK Ltd v Doolan UKEATS/0053/09. We recognise that an employer owes a common law duty of reasonable care to the employee and, in cases, such as this, is entitled, if not obliged, to make his own assessment of the risk of a return to work causing a recurrence of the employee's ill health. We note that the EAT stated that any such assessment will normally be informed by the content of an expert report or reports. In these circumstances, if the Appeal Panel doubted the effectiveness of the treatment on the claimant and her assertion that she was now fit enough to return to work and was now better able to cope with any incidents, because it conflicted with the earlier Occupational Health reports, then a less discriminatory action would have been to seek clarification of the medical condition, to obtain a further OH report, before making a final decision. Part of the reason for dismissal, and part of the reason for the upholding of that decision on appeal, was because the respondent was concerned that a recurrence of an incident would lead to further absence. That reason was founded on an assumption made by both panels about the claimant's ability to cope with incidents with threatening/abusive students. This was a matter arising in consequence of the claimant's disability. In effect the panels decided that because the claimant was sick after the incidents. That assumption was contrary to the report of Mrs Welden, who stated that she would expect the claimant to return to her pre-trauma functioning within 10-12 sessions. Clearly the OH reports were not helpful on this point. They did not address the question of likelihood of recurrence after the claimant regained her health and went back to work. A less discriminatory response would have been to postpone the decision pending up to date medical evidence on that point, that is, the claimant's ability to cope with similar events in the future. There is no satisfactory evidence as to any adverse effect on the running of the business and/or the standard of the teaching by waiting a little longer after the Appeal hearing to acquire the appropriate medical evidence."

    In short, the Tribunal believed that in the light of the evidence supplied by the Appellant it was not reasonable for the panel to proceed to dismissal at that point. It recognised that it would be reasonable for the school to obtain its own evidence to confirm (or otherwise) what she was saying; but that need only occasion a short delay and there was no real evidence that serious further damage would be done during that time.

    The Unfair Dismissal Claim

  50. The Tribunal found, inevitably, at para. 205, that the Appellant was dismissed for an admissible reason, namely capacity. At para. 206 it recited, accurately, the effect of section 98 (4) of the 1996 Act. It noted that the test was not the same as for the disability discrimination claim. It continued, at para. 207:
  51. "Any reasonable employer would have conducted the appropriate balancing exercise required of it under s15 Equality Act before reaching the decision to dismiss, before upholding that decision on appeal. Both panels, at the Medical Incapacity Hearing and at the Appeal hearing, failed to carry out that balancing exercise. The respondent was well aware that the claimant was a disabled person within the meaning of the Act. In all the circumstances we find that dismissal fell outside the band of reasonable responses because it was a discriminatory act."

    It concluded, at para. 208: "The dismissal was substantively unfair".

  52. At para. 209 the Tribunal held that a fair procedure had been followed. That is not in issue before us, and I need not set out the reasoning.
  53. THE DECISION OF THE EMPLOYMENT APPEAL TRIBUNAL

  54. Judge Serota summarised the school's grounds of appeal at paras. 67-74 of his judgment as follows:
  55. "67.              Ground 1: The Employment Tribunal was wrong to find the dismissal was not a proportionate means of achieving a legitimate aim.
    68.              Ground 2: The finding of the Employment Tribunal that the Respondent unlawfully discriminated against the Claimant by failing to conduct "a balancing exercise required of it under section 15 Equality Act" was wrong in principle and an error of law …
    69.              Ground 3: The Employment Tribunal is said to have erred in law by concluding that dismissal was disproportionate in the circumstances where the Respondent could reasonably have been expected to "wait a little longer".
    70.              Ground 4: The Employment Tribunal erred in applying the test of justification to circumstances prevailing at the date of the appeal rather than the date of the dismissal.
    71.              Ground 5: The Employment Tribunal erroneously conflated unfair dismissal and section 15 Equality Act jurisdictions.
    72.              Ground 6: The Employment Tribunal concluded there was an unfair dismissal without considering the authorities on dismissals on the grounds of capability and health.
    73.              Ground 7: In finding that the Claimant was unfairly dismissed the Tribunal fell into error by substituting its view for that of the dismissing employer.
    74.              Ground 8: In relation to the findings of unfair dismissal and discrimination under section 15 Equality Act the Judgment was not "Meek"-compliant nor compliant with the Employment Tribunal Rules of Procedure Rule 62(5) by providing adequate reasons in support of the same."
  56. Judge Serota found in the school's favour on all those grounds save the last. His reasons appear at paras. 135-148 of his judgment. It will be more convenient if I address them in the context of considering the submissions before us. I should, however, note that he did not dismiss the claim. Rather, he remitted it to be re-heard by a fresh tribunal. That means that he did not regard the outcome of either claim as obvious: to put it another way, although at one point in his judgment he flirted with such a finding (see para. 49 below), he did not find that the Tribunal's decision had been perverse. There is no Respondent's Notice contending that the claim should have been dismissed rather than remitted.
  57. THE APPEAL

  58. It was the initial reaction of HHJ Serota that the Tribunal's criticism of the absence of any detailed evidence of the impact that the Appellant's continuing absence had on the functioning of the school – see paras. 28-29 above – was contrary to common sense. As he put it at para. 135 of his judgment,
  59. "One does not need to be a management consultant to see that in a large school, which I have referred to as having problems, the absence of the head of an important department holding a leadership role for 17 months, with her teaching responsibilities having to be covered by having to make additional payments to a part-time teacher and also her leadership and development and administrative roles having to be covered by colleagues (if covered at all), would have had a significant effect on the school especially in these times of austerity and shortage of resources.  Yet there is no mention of this at all by the Employment Tribunal.  It is clear that Mrs Wilkinson, who was found by the Employment Tribunal to be sympathetic to the Claimant, had come to the conclusion that enough was enough."
  60. I have some sympathy with that reaction. More generally, the proposition that it was unfair of an employer to decide, after a senior employee had already been absent for over twelve months and where there was no certainty as to when she would be able to return, that the time had come when the employment had to be terminated, seems to me to require very careful scrutiny. The argument "give me a little more time and I am sure I will recover" is easy to advance, but a time comes when an employer is entitled to some finality. That is all the more so where the employee had not been as co-operative as the employer had been entitled to expect about providing an up-to-date prognosis (see para. 15 (7)-(9) above) and where the evidence relied on at the appeal hearing was only produced at the day of the hearing and was not entirely satisfactory.
  61. However, an appellate tribunal needs to be wary of second-guessing the judgment of the fact-finding tribunal; and it is important to bear in mind that the appeal was not decided by the EAT on the basis that the Tribunal's decision was perverse. The Tribunal clearly approached this case very carefully and even-handedly – much of the Appellant's claim was dismissed – and gave full reasons for its decision. The outcome of this appeal cannot depend on a broad-brush reaction on our part but on an analysis of whether the Tribunal erred in law in any of the specific respects alleged. I accordingly turn to the grounds of appeal before the EAT, but it is convenient to take them in a slightly different order.
  62. Ground 4: Date of Dismissal or Date of Appeal ?

  63. I start with ground 4, because it is important to the analysis of the other grounds to know whether we are concerned only with the original decision or whether it is necessary to look also at the appeal. Mr Legard in his skeleton argument relied on the fact that the school's procedures provided for an appeal to be by way of review rather than re-hearing – see para. 19 above – and submitted that it followed that the question both for the appeal panel and for the Tribunal was whether the Appellant's dismissal was justified as at January 2015 and on the basis of the material available at that date. In taking this stance he was adopting a point made in the letter of 15 March 2013 conveying the appeal panel's decision. The panel – or, rather, Mr Watt, who drafted the letter – acknowledged that the Appellant had produced updated medical evidence and that this appeared to show that she could return to work earlier than predicted in January. But, it continued, "it is for the Appeal Panel to assess whether it was reasonable for the Panel to dismiss based on the evidence to hand as of the 28th January 2013".
  64. However in the course of the hearing before us Mr Legard did not press this submission. He conceded that the appeal panel was obliged to assess the fresh medical evidence produced before it. He was right to make that concession. As a matter of form the Appellant's discrimination complaint was pleaded in relation to the decisions of both the medical incapacity panel and the appeal panel. As a matter of substance, her dismissal was the product of the combination of the original decision and the failure of her appeal, and it is that composite decision that requires to be justified. This is well recognised in the context of unfair dismissal – see Taylor v OCS Group Ltd [2006] EWCA Civ 702, [2006] ICR 1602, esp per Smith LJ at para. 47 – and it must equally be the case in the discrimination context. The appeal procedure expressly contemplated that one of the grounds for allowing an appeal might be "the coming to light of new information". I suspect that that language may be primarily directed at cases of dismissal for misconduct and at situations where information "comes to light" which was not, or not readily, available, at the initial hearing. But it is also apt to cover a case of medical incapacity where the position has changed between the hearings as a result of developments in the condition itself or the progress of treatment. To take a stark case for the sake of illustration, suppose that an employee who at the date of the initial decision had a diagnosis which made it certain that he or she would be unable ever to return to work was able at the appeal hearing to show that they had been misdiagnosed and that the condition was easily treatable and that they would be fully fit in a few weeks: I do not see how it could possibly be justifiable for the appeal panel to ignore that evidence on the basis that it was only concerned with reviewing the reasonableness of the initial decision. (Of course the Appellant says that those are in essence the facts of her case, but at this stage I am concerned only with the question of principle.)
  65. I should say that it does not follow that the distinction between a review and a rehearing has no content. We are here concerned with the specific case of an employee who deploys on the appeal evidence of changes in her medical condition and prognosis since the date of the initial hearing. A different approach may well be appropriate where what the employee is seeking is a second bite of the cherry as regards material that was available, still more as regards material that was deployed, at the first hearing. (Having said that, I think that the cautionary observations of this Court in Taylor v OCS must apply equally in cases under section 15: where the justification for a dismissal may turn on things that happened in the appeal process, characterising the process as a review or a re-hearing is unlikely by itself to yield the answer.)
  66. My conclusion on this issue is important. The Appellant's case that her dismissal could not be justified on the basis of the material before the original medical incapacity panel seems to me to be very weak. She had been off work for over a year, and there was no evidence that she would be fit to return in the foreseeable future if at all. But the position had changed by the time of the appeal hearing. There was now evidence, albeit not unproblematic, that she was fit to return to work at once. In my view this appeal turns on whether it was open to the ET to reach the conclusion that it was unjustifiable for the appeal panel to confirm the dismissal of the Appellant (at that point) in the light of that evidence.
  67. I should say for completeness that Judge Serota does not give any reasoned conclusion on ground 4. He does say, at para. 143 of his judgment, that he considers that the Tribunal "fell into error in applying the test for justification to circumstances prevailing at the date of appeal rather than the date of dismissal especially as the appeal was a re-hearing"; but he does not explain why.
  68. Grounds 1-3: The Proportionality of the Dismissal

  69. I turn to the question of whether the ET made any error of law in concluding, in effect, that the Appellant's dismissal, but more particularly the dismissal of her appeal was, on the basis of the material then available, disproportionate. This is the subject of grounds 1-3. I take them in turn.
  70. Ground 1 is very generally expressed, but the concrete point developed by Mr Legard by reference to it is that the Tribunal was wrong to require detailed evidence of the impact on the school of the continuing absence of the Appellant. This is of course the point to which Judge Serota attached particular weight, as noted at para. 36 above; and, as I say there, I have some sympathy with it. I have to say, however, that I have difficulty seeing how it can be characterised as a point of law. In principle the severity of the impact on the employer of the continuing absence of an employee who is on long-term sickness absence must be a significant element in the balance that determines the point at which their dismissal becomes justified, and it is not unreasonable for a tribunal to expect some evidence on that subject. What kind of evidence is appropriate will depend on the case. Often, no doubt, it will be so obvious that the impact is very severe that a general statement to that effect will suffice; but sometimes it will be less evident, and the employer will need to give more particularised evidence of the kinds of difficulty that the absence is causing. What kind of evidence is needed in a particular case must be primarily for the assessment of the tribunal, and the fact that Judge Serota, or I, might think that in this case the impact on the school of the Appellant's absence was obvious does not mean that the Tribunal erred in law in taking a different view. In truth, I think that this ground could only succeed on the basis that the Tribunal's decision was perverse. That runs up against the difficulty that the EAT did not allow the appeal on that basis; nor in any event did Mr Legard seek to put his argument that way, either in his skeleton argument or in his oral submissions.
  71. However, I think I should say that even if it had been open to the school to advance a perversity argument on this point I doubt if I would have accepted it. By the time of the appeal hearing the Appellant was claiming that she was fit. It is true that the Tribunal accepted that the panel might reasonably have required a further examination before accepting that – see para. 202, which I quote at para. 31 above – but, even if that took a little time to arrange, the available evidence suggested that – to put it no higher – she might well be fit to return in the near future. In those circumstances the question of the impact of the Appellant's continuing absence on the school was thrown into sharp focus: even if her absence over the previous fifteen months had caused real difficulties, as I would for myself be very willing to accept without detailed evidence, that harm was already done, and if the school had in fact managed to cope adequately with those difficulties it might be expected it to cope a little longer. It is clear from the concluding sentence of para. 202 that that is how the Tribunal was approaching the question. I find it hard to say that the Tribunal was perverse in wanting more evidence about the school's ability to put up with the Appellant's absence for that short further period.
  72. I can deal with ground 2 more shortly. The essence of the pleaded point is that in order to establish a defence of justification it is unnecessary that an employer demonstrate that it had itself carried out the necessary balancing exercise to establish whether the act complained of is proportionate; what matters is what the tribunal concludes on carrying out that exercise for itself. That is true, but the Tribunal plainly did not think otherwise. As appears from para. 28 above, it explicitly made its own assessment. It is true that it did in the course of doing so also refer to the fact, as it found, that neither panel had properly assessed the impact of the Appellant's absence; but that was not illegitimate, since it is well recognised that a tribunal will look more narrowly at a justification which was not articulated at the time.
  73. Ground 3 challenges the Tribunal's decision that the school should have waited "a little longer". As regards this ground, Mr Legard did indeed submit in his skeleton argument that the Tribunal's conclusion was perverse. Again, he faces the difficulty that that is not what the EAT concluded. But I would be reluctant to dispose of the point on that basis alone. It is important to appreciate the basis of the Tribunal's reasoning in para. 202. This was not a case where the Appellant was predicting that she would be fit soon, and asking the school to wait a little longer for that point to be reached. If it had been, I might very well have found it hard to accept that it was disproportionate for the school, after so long a period, to say that it could not proceed on the basis of predictions, particularly when they were as uncertainly expressed as they had been in January. But the Appellant's position at the meeting in April was that she was fit now and that she was ready to return to work at once. The reason why the Tribunal found that it might be necessary to wait "a little longer" was only so that the school could obtain its own evidence, based on a further examination by AXA, which would confirm or otherwise what the Appellant was saying and the GP's "fit note". That is an important difference. I am not prepared to say that it was perverse of the Tribunal to conclude that it was disproportionate of the school to pull the plug at that point rather than take that further step.
  74. I need not deal in detail with Judge Serota's reasoning on this point. His conclusion at para. 143 was that the school's decision not to wait any longer in order to obtain its own evidence was "within the range of reasonable responses" and that the Tribunal had fallen into the error of substituting its own view of what should have been done for the school's (reasonable) contrary view. (He also said – though this appears to be more in the nature of an observation than part of his decision, otherwise he would not have remitted – that "it might be said that [the Tribunal's] finding was perverse".) The language of the range of reasonable responses is of course classically deployed in the context of section 98 (4) of the 1996 Act, but I assume that Judge Serota also intended to say that the school's decision was proportionate. But both questions were primarily decisions for the Employment Tribunal; and, as I have said, I am not prepared to say that the conclusion that it reached was one which was not open to it on the facts.
  75. In his skeleton argument Mr Legard suggests, somewhat in passing, that the Tribunal may have inadvertently conflated the tests under section 15 of the 2010 Act and under section 98 of the 1996 Act, alternatively that it may have believed that this was a case where the Appellant was entitled to more indulgence because the development of her condition was the result of a breach of duty on the school's part (see McAdie v Royal Bank of Scotland [2007] EWCA Civ 806, [2007] IRLR 895) despite having earlier declined to decide whether that was the case. Wisely, he did not seek to develop either point in his oral submissions. As to the former, I consider below whether this would indeed have been an error; but the truth is that there is no sign whatever in its reasoning that the Tribunal went down either of the paths suggested: it has to be perversity or nothing.
  76. Grounds 5 and 6: Unfair Dismissal

  77. It will be recalled that ground 5 is that the Tribunal "erroneously conflated the unfair dismissal and section 15 Equality Act jurisdictions". As advanced in Mr Legard's skeleton argument, this is a challenge specifically to the Tribunal's conclusion on unfair dismissal as expressed at para. 207 of the Reasons. What is said is that the Tribunal in effect held that it necessarily followed from the fact that the Appellant's dismissal was unjustified on the application of the test in section 15 of the 2010 Act that it was also unreasonable on the application of the test under section 98 (4) of the 1996 Act; and that that was wrong. The point only arises in practice if we reinstate the Tribunal's decision on disability discrimination, since if the EAT was right to hold that that decision was flawed the ET's decision on unfair dismissal, being explicitly based on it, must be likewise flawed. (No doubt for that reason this ground is not separately discussed by Judge Serota.) Even in that scenario it is of limited significance because I cannot see how the Appellant could recover in her compensatory award for unfair dismissal for any loss that would not be covered by her compensation for discrimination. But she would be entitled to a basic award, so the point is not wholly academic.
  78. I am bound to say that I do not think that para. 207 of the Tribunal's reasons is perfectly expressed. In particular, I am not sure that the fact that the school did not at either hearing, as it held, carry out the balancing exercise required by section 15 of the 2010 Act was itself decisive. Nor am I sure that if the Tribunal meant in its final sentence to say that any (unlawfully) discriminatory dismissal was ipso facto unfair that is necessarily the case.[1]
  79. However the basic point being made by the Tribunal was that its finding that the dismissal of the Appellant was disproportionate for the purpose of section 15 meant also that it was not reasonable for the purpose of section 98 (4). In the circumstances of this case I regard that as entirely legitimate. I accept that the language in which the two tests is expressed is different and that in the public law context a "reasonableness review" may be significantly less stringent than a proportionality assessment (though the nature and extent of the difference remains much debated). But it would be a pity if there were any real distinction in the context of dismissal for long-term sickness where the employee is disabled within the meaning of the 2010 Act. The law is complicated enough without parties and tribunals having routinely to judge the dismissal of such an employee by one standard for the purpose of an unfair dismissal claim and by a different standard for the purpose of discrimination law. Fortunately I see no reason why that should be so. On the one hand, it is well established that in an appropriate context a proportionality test can, and should, accommodate a substantial degree of respect for the judgment of the decision-taker as to his reasonable needs (provided he has acted rationally and responsibly), while insisting that the tribunal is responsible for striking the ultimate balance; and I see good reason for such an approach in the case of the employment relationship. On the other, I repeat – what is sometimes insufficiently appreciated – that the need to recognise that there may sometimes be circumstances where both dismissal and "non-dismissal" are reasonable responses does not reduce the task of the tribunal under section 98 (4) to one of "quasi-
  80. Wednesbury" review: see the cases referred to in para. 11 above[2]. Thus in this context I very much doubt whether the two tests should lead to different results.[3]
  81. Judge Serota dealt with this point only briefly, at para. 137 of his judgment, where he said:
  82. "While in determining if a dismissal is discriminatory, contrary to section 15 of the Equality Act 2010, it may be appropriate to carry out a balancing exercise the test is objective and therefore it is inappropriate to import the reasonable range of responses considerations relevant to unfair dismissal."

    I respectfully disagree with that formulation. The test under section 98 (4) of the 1996 Act involves is objective, no less than the test under section 15 of the 2010.

  83. Ground 6 is not in truth distinct from ground 5 because it only has traction if the exercises required to determine the two claims are substantially different. It is quite true that the Tribunal did not in reaching its conclusion on the unfair dismissal claim discuss any of the authorities on long-term sickness dismissal, such as Spencer v Paragon Wallpapers. But it did not need to. The factors which it had so thoroughly discussed in relation to the justification of the Appellant's dismissal for the purpose of the discrimination claim – specifically, the duration of her absence to date; the evidence as to when she might be expected to return; the reasonableness of the school waiting a little longer; and the impact of her continuing absence – were substantially the same as those which have to be weighed in the unfair dismissal context: see para. 12 above.
  84. CONCLUSION

  85. For the reasons given above I do not believe that there was any error of law in the decision of the Employment Tribunal, and I would allow the appeal. The case can fairly be regarded as near the borderline because of the length of the Appellant's absence and the unsatisfactory nature of the evidence about when she might be fit to return. But the essential point is that by the time of the appeal hearing there was some evidence, albeit not wholly satisfactory, that she was now fit to return; and in my view it was open to the Tribunal to hold that it was disproportionate/unreasonable for the school to disregard that evidence without at least a further assessment by its own occupational health advisers.
  86. The upshot is that the case must now proceed to the remedy hearing already directed. In assessing compensation the Tribunal will have to assess the various contingencies, which will include whether the school's own assessment would have confirmed the view that the Appellant was fit to return and, further, whether, if she had returned, she would have maintained her health. That may not be a straightforward exercise; and I would urge the parties to consider whether settlement may be possible.
  87. Lord Justice Davis:

  88. I naturally feel a good deal of diffidence in disagreeing with Underhill LJ on an employment matter: but disagree I do, on the facts of this particular case. I will say why relatively briefly.
  89. The appellant had been a long-serving Head of Department at the school. Her sustained and continuing absence from the school was bound to cause it significant and ongoing detriment. I regard it as unreal – as did the Employment Appeal Tribunal – to think that specific further detailed evidence was required to be lodged by the school before the appeal panel (which included experienced school governors) to that effect. It was obvious. The appellant, through her representative, did not even raise any challenge before the appeal panel to there being an adverse impact on the school by reason of her continuing absence.
  90. During the period of her sustained absence, the appellant had, for whatever reason, been to a degree unco-operative. It was wholly unsurprising, at all events, that the school felt frustrated by her non-co-operation, notwithstanding all its own efforts. The school's position as to the effect of the appellant's continued absence after all these months was in any event explained by Mr Hopkinson in evidence at the incapacity hearing in January 2013. I consider, as I understand Underhill LJ to accept, that the written decision of 29 January 2013, which included a finding that no prognosis indicated that a return to work was likely in the near future was justified.
  91. The question then is whether circumstances changed such that the decision of the appeal panel, following the hearing of 10 April 2013, was unjustified. The appellant never herself sought an adjournment of that hearing in order to put in further medical evidence. I find it rather odd that the appeal panel is now in effect to be criticised for not adjourning the matter "for a little longer" to make further checks when the appellant herself, through her representative, had wished to proceed. Further, through her union representative she accepted at the hearing that the focus was primarily on the validity of the previous panel decision. It is true that, very late in the day, the appellant had produced further limited materials relating to her medical condition at the appeal hearing. In my view they were demonstrably half-baked. It is said that the fresh evidence was "not entirely satisfactory". In my view, it was more than that: it was entirely unsatisfactory. At all events the appeal panel, which considered it, could properly so conclude. Self-evidently the pro forma note of the GP as to fitness to work was cursory and evidenced no real engagement whatsoever with the psychological issues of the appellant or (for instance) her prospective reaction if she came into contact with her pupil assailant or there were a recurrence of some trigger event. The letter of Mrs Welden was dated some months earlier and pre-dated the proposed course of treatment. It was cautious and equivocal. Nothing updated thereafter was put in by her of the actual effect of the recommended treatment, assuming it – or some of it – had in the meantime taken place as proposed. The appellant's own assertions of current fitness to return thus could, in such circumstances, properly be discounted - as they were - by the appeal panel in the absence of proper corroborating evidence.
  92. Governors of schools do not have an easy task. Of course they have to comply with prescribed procedures. Of course, on behalf of the employers, they have to comply with employment law and process. But it lends no service to their role if they are to be tripped up by tribunals by a process of, in effect, second guessing. In my view, the decision which the appeal panel reached on the evidence presented to it and as appraised by it not only was within the range of reasonable responses open to it but also was proportionate and objectively justified.
  93. Underhill LJ cautions against a broad brush approach. I do understand that. But this decision of the appeal panel in my view was a proper one. I consider that the decision of the Employment Tribunal was, with respect, unacceptably purist. It in effect substituted its own view for that of the appeal panel without, in my opinion, sufficient cause. Moreover, it did so in circumstances where its reasoning was tainted by the unrealistic requirement for more specific evidence as to the ongoing detriment to the school occasioned by continued absence of the appellant. It thereby erred in law.
  94. How much longer was the school to wait? The Employment Tribunal does not say. It could not say. I can just about see some prima facia attraction, in the abstract, in the argument that a "little longer" might be considered appropriate, given the time already elapsed, had the appellant been asserting on a properly evidenced basis that she was now (or almost) fit to return to work: see paragraph 201 of the decision of the Employment Tribunal. But the point is not just whether the panel could have adjourned further; it is whether it should have done. Given the wholly unsatisfactory nature of the further evidence, such as it was, produced by the appellant at the last minute at the appeal hearing, given the course the appeal hearing took and given the whole history of this protracted saga that assertion could properly be treated with scepticism by the appeal panel and rejected as a reason for giving the appellant yet more time. It thus could perfectly properly be concluded, some 17 months on since the appellant first went off sick, that enough was enough here. It goes too far, in my opinion, to say that the decision of the appeal panel on this was unreasonable or unjustified.
  95. I therefore think that the Employment Appeal Tribunal was quite right. It does not matter that the Employment Appeal Tribunal refrained from making a finding of perversity. The point remains that, as I see it, the Employment Tribunal had no sufficient basis for interfering with the decision of the appeal panel, conscientiously reached after a fair hearing and on a proper appraisal of the evidence and circumstances.
  96. I would, for myself, have upheld the decision of the Employment Appeal Tribunal and dismissed this appeal.
  97. Sir Terence Etherton, MR

  98. I agree with Lord Justice Underhill that the appeal should be allowed for the reasons which he gives.

Note 1    Not all findings of discrimination involve findings about proportionality. In Amnesty International v Ahmed UKEAT/447/08, [2009] ICR 1450, the EAT held that the refusal of an employer to promote an employee which constituted direct racial discrimination was not a repudiatory breach of contract: see para. 71 (1) (pp. 1482-3). The question is not quite the same, and the circumstances were extremely unusual, but the case illustrates why an absolute equation between liability for discrimination (of any kind) and liability for unfair dismissal may not be appropriate.     [Back]

Note 2    I acknowledge that in Turner Sir Stephen Sedley contrasted the jurisdiction under section 98 (4), which he described as a “forum of review, albeit not bound to the Wednesbury mast” with the “full merits hearing” attracted by discrimination claims: see para. 71 (p. 545B). But it does not necessarily follow that there is a great difference in practice. And in fact Elias LJ held in that very case that the unfair dismissal test gave no lesser protection than the proportionality test that would be required if article 8 was engaged – see paras. 49-58 of his judgment (pp. 540-3). His discussion may afford an instructive parallel with the case of indirectly discriminatory dismissal with which we are concerned here.     [Back]

Note 3    I should, for completeness, acknowledge that the provisions about the burden of proof are different. The burden under section 98 (4) is neutral, whereas in a discrimination claim the burden of proof provisions under section 136 of the 2010 Act apply. But it will be rare for cases of this kind to turn on the burden of proof.     [Back]


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