Foley v Post Office; HSBC Bank Plc (formerly Midland Bank Plc) v Madden

: Lord Justice Mummery will deliver the first judgment on these appeals.

Background to Appeals

The court expedited the hearing of these two appeals in view of the current state of uncertainty in the Employment Tribunals on some fundamental aspects of the law of unfair dismissal following two recent decisions of the Employment Appeal Tribunal: Haddon v Van Den Bergh Foods Ltd [1999] ICR 1150 (" Haddon"), which has been followed in Wilson v Ethicon [2000] IRLR 4, but was settled while under appeal to this court; and Midland Bank plc v Madden [2000] IRLR 288 ("Madden"), from which we have heard the appeal, along with the appeal in The Post Office v Foley, an unreported case decided by the Employment Appeal Tribunal before Haddon and Madden were decided. The judgments in both Haddon and Madden are analysed in detail, in the context of both the legislative history of unfair dismissal and the development of judicial interpretation, in yet another recent decision of the Employment Appeal Tribunal: Beedell v West Ferry Printers Ltd (7th July 2000), in which judgment on behalf of the Appeal Tribunal was given by His Honour Judge Peter Clark.

General Introduction

Since Employment Tribunals throughout Great Britain decide thousands of unfair dismissal cases every month, it is crucial that uncertainty about the law to be applied by them should be dispelled as soon as possible.

In my judgment, the Employment Tribunals should continue to apply the law enacted in section 98(1),(2) and (4) of the Employment Rights Act 1996 ("the 1996 Act"), giving to those provisions the same interpretation as was placed for many years by this court and the Employment Appeal Tribunal on the equivalent provisions in section 57(1), (2) and (3) of the Employment Protection (Consolidation) Act 1978 ("the 1978 Act").

This means that for all practical purposes:

(1)" The band or range of reasonable responses" approach to the issue of the reasonableness or unreasonableness of a dismissal, as expounded by Browne-Wilkinson J in Iceland Frozen Foods Ltd v Jones [1983] ICR 17 at 24F-25D and as approved and applied by this court (see Gilham v Kent County Council (No 2) [1985] ICR 233; Neale v Hereford & Worcester County Council [1986] ICR 471; Campion v Hamworthy Engineering Ltd [1987] ICR 966; and Morgan v Electrolux [1991] ICR 369), remains binding on this court, as well as on the Employment Tribunals and the Employment Appeal Tribunal. The disapproval of that approach in Haddon (see p.1160E-F) on the basis that (a) the expression was a "mantra" which led Employment Tribunals into applying what amounts to a perversity test of reasonableness, instead of the statutory test of reasonableness as it stands, and that (b) it prevented members of Employment Tribunals from approaching the issue of reasonableness by reference to their own judgment of what they would have done had they been the employers, is an unwarranted departure from binding authority.

(2)The tripartite approach to (a) the reason for, and (b) the reasonableness or unreasonableness of, a dismissal for a reason relating to the conduct of the employee, as expounded by Arnold J in British Home Stores Ltd v Burchell [1980] ICR 303 at 304 and 308G-H, and as approved and applied by this court in W Waddel & Co Ltd v Tepper [1980] ICR 286, remains binding on this court, as well as on Employment Tribunals and the Employment Appeal Tribunal. Any departure from that approach indicated in Madden (for example, by suggesting that reasonable grounds for belief in the employee's misconduct and the carrying out of a reasonable investigation into the matter relate to establishing the reason for dismissal rather than to the reasonableness of the dismissal) is inconsistent with binding authority.

Unless and until the statutory provisions are differently interpreted by the House of Lords or are amended by an Act of Parliament, that is the law which should continue to be applied to claims for unfair dismissal. In so holding I am aware that there is a body of informed opinion which is critical of this interpretation of the 1996 Act. Those views have been comprehensively debated in the able arguments advanced on these appeals by Mr David Bean QC, Mr Reade, Mr McMaster and Mr Manjit Gill QC.

A reminder of the fundamental constitutional difference between the interpretation of legislation, which is a judicial function, and the enactment and amendment of legislation, which is a parliamentary function, is required in view of the number of occasions on which reference was made in the submissions to a "judicial gloss" on the legislation. As Lord Nicholls said in Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 at 592E-F:

"The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature."

In this case the interpretation placed by the tribunals and courts, including this court, on the provisions of the 1978 Act in the cases of Iceland Foods and Burchell has not led Parliament to amend the relevant provisions, even though Parliament has from time to time made other amendments to the law of unfair dismissal, since those authoritative rulings on interpretation were first made. So those rulings, which have been followed almost every day in almost every Employment Tribunal and on appeals for nearly 20 years, remain binding.

They should be applied to the two cases under appeal with the result that both appeals should be allowed and both claims for unfair dismissal fail.

A.The Post Office Appeal

Mr John Foley was employed by the Post Office as a postal worker from 18th September 1998 until 19th June 1997, when he was dismissed for a reason relating to his conduct. On 3rd November 1997 he presented a complaint of unfair dismissal to the Employment Tribunal which held, as explained in the Extended Reasons sent to the parties on 16th April 1998, that he was not unfairly dismissed. His appeal against that decision was allowed by the Employment Appeal Tribunal on 30th March 1999 and the case was remitted to the Employment Tribunal for a remedies hearing. The Post Office appeals with the permission of Lord Justice Peter Gibson.

The Decision of the Tribunal

The tribunal found that the reason for Mr Foley's dismissal was "unauthorised absence for part or whole of a duty on 16th May 1997", that that was a reason relating to conduct within section 98(2)(b) of the 1996 Act and that the decision to dismiss him for the conduct alleged, though "harsh", was reasonable pursuant to section 98(4) of the Act. It was fair. The tribunal was "mindful that we must not impose our decision upon that of a reasoned on the spot management decision". The dismissal was "within the range of reasonable responses".

The Facts

That conclusion was based on the following findings of fact.

(1)Mr Foley was on a late shift on Friday 16th May 1997 at the Princess Royal Distribution Centre, Stonebridge Park, London NW10. The shift was due to finish at 11.00pm. His wife telephoned him at 7.30pm from home at 56 Portland Road, London W11, saying she was in a bad state of nerves and required his attention. His immediate line manager, Mr Martin Joyce, gave him permission to leave work early. He left between 7.30 and 7.45pm.

(2)At about 8.47pm another manager, Mr Simon Kowalski, who was off duty, reported that he saw Mr Foley at the Innisfree Public House in Harrow Road, Wembley, which was about 12 minutes away from the depot, and notified Mr Joyce on his mobile phone. The late shift manager, Ms Susan Johnson, sent two managers (the indoor patrol) to the pub, but Mr Foley could not be seen.

(3)On 20th May Ms Johnson instructed Mr Kowalski to conduct a fact-finding interview. He then passed the papers to Ms Johnson, who sent a charge letter to Mr Foley on 3rd June 1997.

(4)On 11th and 12th June a disciplinary hearing was conducted by Ms Johnson. Mr Foley was accompanied by his trade union representative. There was a dispute about the timing of the events on 16th May. Mr Foley's case was that he was not in the pub at the time when Mr Kowalski said he had seen him. He had gone into the pub at about 8.00pm to phone for a taxi as he wished to get home early and the bus would not arrive for another 18 minutes. The taxi came at 8.20pm. According to Mrs Foley, he arrived home at 8.40pm.

(5)Ms Johnson dismissed Mr Foley, who had a clean conduct record, for the alleged misconduct. The hearing was not, however, "conducted as fairly as it...