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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Kelly-Madden v. Manor Surgery [2006] UKEAT 0105_06_1910 (19 October 2006) URL: https://www.bailii.org/uk/cases/UKEAT/2006/0105_06_1910.html Cite as: [2007] ICR 203, [2007] IRLR 17, [2006] UKEAT 0105_06_1910, [2006] UKEAT 105_6_1910 |
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At the Tribunal | |
On 4 October 2006 | |
Before
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
MR P PARKER CBE
BARONESS M T PROSSER
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | Ms Rebecca Thomas (Of Counsel) (via Bar Pro Bono Unit) |
For the Respondent | Mr David Kelly (Advocate) Peninsula Business Services Ltd Riverside New Bailey Street MANCHESTER Lancs M3 5PB |
SUMMARY
The employee was the practice manager at a general medical practice. She was dismissed for dishonesty, taking unauthorised pay for overtime hours. She alleged that she had been told by the former practice manager that she should do so, but the Tribunal found that she did not raise this with any of the doctors.
The Tribunal found that there were various defects in the way in which the case was handled. However, it held that the employers had a genuine belief based on reasonable grounds that she had committed the alleged misconduct, and that even had the proper procedures been carried out, the likelihood was that the decision would have been the same. So, whilst not in terms referring to s.98A(2) of the Employment Rights Act 1996, they applied that section and concluded that the dismissal was fair. They further held that even if unfair, this was a case where there should be a 100% contribution with respect to both the basic and compensatory awards.
There are numerous grounds of appeal. The central ones are that the Tribunal misconstrued s.98A (2); it adopted the construction of the EAT in Alexander & Hatherley v Bridgen Enterprises UKEAT/0107/06 whereas it ought to have adopted the different construction suggested in Mason v The Governing Body of Ward End Primary School UKEAT/043305. Further, the Tribunal was not entitled to conclude that the dismissal would have occurred in any event; and the finding of 100% contributory fault was insufficiently reasoned and perverse.
The EAT, having considered both earlier decisions, adopted the construction in Alexander & Hatherley. It also concluded that the Tribunal was entitled on the evidence to conclude that dismissal would have occurred in any event. Accordingly, the finding that there was no unfair dismissal was upheld. Had it been material, the EAT would however have found that the Employment Tribunal erred in law in finding 100% contributory fault.
THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)
The facts
The Tribunal's conclusions
17. Having set out the facts, the Tribunal then summarised the legal principles, referring to the well known cases of British Home Stores v Burchall [1978] IRLR 379 EAT, Boys & Girls Welfare Society v MacDonald [1996] IRLR 129, and Sainsburys Supermarket Ltd v Hitt [2003] IRLR 23. They referred to the Burchall test as being "guidelines only", but did in fact analyse the evidence by reference to the three issues posed in that case. There is no fundamental disagreement about the application of these principles save with respect to the construction of s.98A (2) of the Employment Rights Act 1996, to which we return.
18. The Employment Tribunal found that the reason, or at least the principal reason, for dismissal was misconduct, namely the claimant's alleged dishonesty with respect to the overtime payments, and that the employers did genuinely believe that she had committed misconduct. They also found that it was reasonable for the employers to have formed that view. Mr Rounsevell had accepted that the role of practice manager is one which requires the highest standards of trust. The Tribunal concluded that the employers were entitled to find that she had breached that trust and had in principle been justified in dismissing her.
19. However, the Tribunal was dissatisfied that the procedure overall had been fair. As we have indicated, the investigation was inadequate because not all proper enquiries had been made, and further, there was some blurring of the role of Dr Craze on appeal because as one of the partners, he had been involved in the original decision to dismiss. The Tribunal did not itself make a finding that the claimant had been dishonest, but they did state that it was open to the employer in the circumstances to form that view.
"However, would the respondent has dismissed her anyway if the correct procedure had been followed? The only area which in evidential terms remains unresolved is that of Mr Hellyer. Dr Davies is adamant he never agreed overtime, evidence we accept, as overtime was an issue the partners would have felt strongly about given the bonus arrangement. Flawed though the financial management was, we are satisfied Dr Edmunds did not oversee, other than superficially, the payment of salaries. In our view, Mr Hellyer's evidence would have been tainted. He and the claimant entered into a sensible arrangement in relation to the handover but neither his terms of payment nor her overtime up to the time she says she spoke to Dr Davies were ever ratified. Had Drs Blake and Craze dealt with each part of the process independently the outcome would have been the same as it would if the other points we have identified were dealt with correctly."
"Whatever the management failings of the respondent, and there were many, the claimant was in a position of authority and trust. The example of the holiday chart illustrates the fact that she set a poor example. On her own words she breached the financial authority in the payments made to Mr Hellyer. We found that a particularly serious matter. She conducted matters in such a way that she exposed herself to a complaint of dishonesty or, in our view, of a fundamental breach of her duties through her own misjudgement."
Grounds of Appeal
Was the finding of unfair dismissal sustainable?
Would dismissal have occurred in any event?
"Subject to sub-section (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of s.98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure."
"To a limited extent only, then, the Polkey doctrine is reversed by s.98A(2). That occurs where there is a procedure as we have defined it, written or unwritten, contractual or non-contractual, contained in an agreement or a policy which relates to dismissal of employees and which has not been followed. It does not apply to any more general criticism based upon a failure to comply with the standards of a reasonable employer, whether as exemplified in the ACAS Code or not."
He then considered the significance of the phrase "by itself" as follows (para 26):
"The second limitation is in the use of the words 'by itself' in s.98A(2). A breach of a procedure such as we have described accompanied by a more general criticism deriving from the standards of a reasonable employer or from the Code would not fall within the subsection"
"The effect of s.98A(2), Mr Barnett [counsel for the employer] submits, is that if the employer satisfies the tribunal that on the balance of probabilities he would have dismissed fairly anyway even if fair and proper procedures had been followed, then the employer cannot be taken to have acted unreasonably under s.98(4) and the dismissal is not unfair (unless for non-procedural reasons).
Mr Toms [counsel for the employee] accepts that the effect of the subsection is in part to reverse Polkey. However, he contends that it does so only in narrowly prescribed circumstances. He distinguishes between what he terms 'procedural' and 'substantive' defects. He points out that the provision refers to the failure to follow a 'procedure'. He submits that a failure to consult is more than simply an error in following a procedure; it is what he terms a substantive matter which goes to the heart of the decision itself. He says that the concept of procedures in that subsection envisages written procedures adopted by the employer and that only relatively minor or technical breaches would fall within the scope of that subsection.
We see no justification for so limiting that provision. There is no basis at all for considering that the concept of procedure merely applies to such procedures as have been reduced into writing by the employer, nor is there any limitation on the nature of the failure to comply found within the terms of the subsection itself. It is of course the case that if there is a fundamental failure, including a wholesale disregard of procedures, then that will almost inevitably mean that there is a breach of the relevant statutory dismissal procedure rendering the dismissal unfair under s.98A(1), and in that case s.98A(2) does not apply at all and the Polkey analysis continues to apply. Subject to that, we see no limitation on the nature of the procedural breaches caught by the subsection. We recognise that the section refers to 'a procedure' but we do not think that this is limited to cases where the employer fails to comply with his own established procedures (whether written or otherwise). In our view it simply means any procedure which the tribunal considers in fairness the employer ought to have complied with. If the employer has failed to comply with a procedure which ought to have been carried out, that will not render the dismissal unfair if the employer shows that the employee would have been dismissed anyway even had that fair procedure been adopted. (To this extent we would respectfully part company with the decision of this tribunal in Pudney v Network Rail [2006] UKEAT/0707/05 (HH Judge McMullen QC presiding) in which, obiter, a narrower construction of the section was suggested, but in circumstances where the wider construction we have adopted does not appear to have been suggested by either party.)
In short, we consider that s.98A(2) applies to all procedures, which we take simply to mean the steps which ought to be taken by an employer before determining that he will dismiss a particular employee. Those steps will of course vary depending on the reason for the dismissal. There is no magic in the word 'procedure' and there is no justification for seeking to redefine some steps which would naturally be described as 'procedural', such safeguards for the employee. All procedural requirements are important for employees."
a breach of the procedural provisions which the Code recommends ought to be adopted; but it is still properly described as a breach of procedures.
Was the Tribunal entitled to find that the dismissal would have occurred anyway?
Standing in the shoes of the employer.
Relying on irrelevant matters.
Contributory fault.
Conclusion.