Gover v Propertycare Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Buxton,Lord Justice Lloyd,Lord Justice Richards |
| Judgment Date | 28 March 2006 |
| Neutral Citation | [2006] EWCA Civ 286 |
| Docket Number | Case No: A2/05/2794 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 March 2006 |
[2006] EWCA Civ 286
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HH JUDGE MCMULLEN QC AND MEMBERS
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Buxton
Lord Justice Lloyd and
Lord Justice Richards
Case No: A2/05/2794
UKEAT/0458/05/ZT
Mr John Cavanagh QC and Mr Martin Budworth (instructed by Messrs Horwich Farrelly) for the Appellants
Mr John Bowers QC and Mr Mark Trafford (instructed by HomeLet Legal Services) for the Respondent
Background
The Employment Tribunal [ET] from which an appeal in these proceedings was brought to the EAT held that all of the claimants had been unfairly directly dismissed with effect from 1 November 2001. The employer, as for broad convenience I will call the respondent, sold lettings insurance and related products to landlords. The claimants were sales agents, and appear to have considered themselves as self-employed. Changes in their terms, in particular in relation to commission rates, were sought to be unilaterally imposed by the employer in a period leading up to October 2001. The ET expressed its reasons for finding that the process was repudiatory of the claimants' contracts in a number of ways, which I can fairly represent by extracts from §§ 63, 67, 106 and 129 of the ET's determination:
"Simply as a boldly stated issue about whether the halving of the commission rates was justified we have no hesitation in finding that they [sic] were not…..We repeat that the most unimpressive feature of the Respondent's case on all these issues was the one-sided nature of all the business dealings between the parties in those final months….the kind of swingeing reduction in the April-September scheme would have been a fundamental breach of a contract of employment….In the overall picture of the repudiatory behaviour by the Respondents culminating we find in an unreasonably arbitrary employment package administered in a totally unreasonable fashion without even lip service to any established concept or consultation we found particularly unimpressive and reprehensible the very tight timetable administered to the claimants to consider their positions….the whole process of termination of employment was unfair, confrontational, based on erroneous employment law principles and lacking in sympathy and understanding at [sic] any semblance of good industrial practice and procedure"
The claimants repaired with reasonable promptitude to the ET, but there then arose a dispute as to whether they were indeed employees and, if so, of whom. That issue was considered by the ET over a period of three days in December 2002, it holding that they were employees, and of the present respondents. A successful appeal was taken to the EAT, which in November 2003 remitted the issue to a different ET. The second ET reconsidered the issue promptly, over four days at the end of 2003. Its determination was not, however, issued until 9 May 2004, when it confirmed the decision of its predecessor that the claimants were employees of the respondent. That cleared the way for a merits hearing, which occupied 12 days in February to May 2005, by then three and half years after the events complained of.
The ET concluded as to dismissal in the terms already indicated. But it went on to find that even if the employers had as the result of proper consultation and advice proposed terms that would have been reasonable in the sense of not being in fundamental breach of the employment relationship, the employees would still not have accepted those terms. Accordingly, all that the employees had lost as a result of the employer's fault was employment during the period when consultation should have taken place, which the ET found to have been four months, with an added period of two weeks notice. Compensation for the unfair dismissal was accordingly limited to an amount relevant to that period. The appeal to the EAT, and the further appeal to this court, complain of that limitation.
The appeal in this court took a most unsatisfactory course, which raised questions as to the court's jurisdiction. In order to explain that, procedural, issue it is necessary first to summarise in brief terms the case that was sought to be put on appeal. A fuller account of and commentary on the case will be found later in the judgment, when I address the substance rather than the admissibility of the arguments.
The appellants' case summarised
In making the deduction that it did, the ET saw itself as applying a doctrine to be found in Polkey v AE Dayton Services [1988] 1 AC 344 [ Polkey]. Put shortly for the moment, the House of Lords held in that case that after a finding of unfair dismissal compensation for that dismissal can be reduced to account for a chance that the employee would have been dismissed in any event. In order to address the possibility of such a reduction, the ET has to consider what would have happened if the unfair dismissal had not occurred. The appellant contended that such an approach, leading to the reduction in compensation that we have seen, was not open to the ET in this case, for two separate reasons.
First, as a matter of law, the Polkey principle did not apply when the dismissal would have been unfair in any event, such that whatever fair procedure and consultation had been adopted no employer could dismiss for the reason that this employer adopted. Therefore, and possibly as a sub-set of the main contention, it was not open to the ET to consider whether the employer could have subsequently dismissed fairly for a reason different from that of the actual dismissal. Although Mr Cavanagh QC did not put it like this, the first dismissal irretrievably poisoned the wells against any reduction of compensation. This was said to be such a case. The ET had found, not merely that the offer of the original package was procedurally flawed, but also that an offer of that package by any means at all could never be fair. The employer could therefore not save himself by claiming that he could have fairly offered a different package, and fairly dismissed the claimants when they did not accept it.
Second, the ET's findings as to what would have happened after proper consultation and advice were not open to it. The complaint was put in a variety of ways, but included lack of evidence on which the findings could be based; and that the exercise launched the ET on a sea of unreliable speculation, that indeed contradicted findings made at the stage of considering the fairness of the dismissal.
The jurisdiction of this court and its application in this case
Both sides told us that we were constrained by the observation of an extremely strong constitution of this court in Hennessy v Craigmile [1986] ICR 461 at p 470 D-E:
"It is too often forgotten that, in the context of appeals from the Employment Appeal Tribunal, this Court is a second-tier appellate court. It may, and usually does, obtain considerable assistance from the judgment of the Employment Appeal Tribunal, but its concern is with whether the decision of the Industrial Tribunal was right, not with whether the Employment Appeal Tribunal was right."
I would be less than frank if I did not express some reserve about that guidance, both from the point of view of jurisdiction and from the point of view of the management of the business of this court. As to authority, this court's jurisdiction to hear this appeal, coming as it does from a statutory tribunal, is only to be found in section 37(1) of the Employment Tribunals Act 1996, which provides for an appeal from the EAT on a question of law only. I do not see how we can in any realistic sense be hearing an appeal from the EAT if we are only concerned with whether the ET was right. As to the business of this court, the assumption that we in effect repeat the exercise already performed by the expert EAT of reviewing the decision of the ET tends in practice to impose on this court an exercise that is inappropriate both in its nature and in its extent. It was no doubt with this jurisprudence in mind that the parties, if left to themselves, would have required two days of this court's time, and have read to us no fewer than twenty-seven authorities.
In the present case these are not merely formal concerns, because the first of the appellants' complaints, §6 above, only appeared in the case on the morning on which the appeal opened. It was clearly not taken before the EAT, proceedings in which the appellants were represented by leading counsel, though not by Mr Cavanagh. It only came to the court's attention when a document setting out some but by no means all of the considerations attaching to it was handed to us literally as we walked into court. Mr Bowers QC told us that he had received the document the previous evening. It was as much of a surprise to him as it was to us. It was suggested that failure to take the point before the EAT was irrelevant because our task was to review the ET. That contention further reinforces my concern about the guidance given in Hennessy, and is a contention to which, if it should arise before me as a matter of decision, I shall wish to give the most careful scrutiny.
That however is not this case, because the appellants have a preliminary difficulty, that whether or not we in principle simply ignore what happened in the EAT the jurisdiction of the court is constrained by what is in the grounds of appeal and in the grant of permission. Mr Cavanagh said that the point was to be found in the third sentence of ground 4:
"The effect of the...
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