Kuzel v Roche Products Ltd

JurisdictionEngland & Wales
JudgeLord Justice Mummery,Lady Justice Arden,Lord Justice Longmore
Judgment Date17 April 2008
Neutral Citation[2008] EWCA Civ 380
Docket NumberCase No: A2/2007/0630
CourtCourt of Appeal (Civil Division)
Date17 April 2008

[2008] EWCA Civ 380

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

HHJ PETER CLARK UKEAT/05/0516/06

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Mummery

Lady Justice Arden and

Lord Justice Longmore

Case No: A2/2007/0630

Between:
Dr Ryta Kuzel
Appellant
and
Roche Products Limited
Respondent

Mr Thomas Linden QC and Mr James Laddie (instructed by BP Collins) for the Appellant

Mr John Bowers QC and Mr Jeremy Lewis (instructed by Clarkslegal LLP) for the Respondent

Hearing dates : 22 nd and 23 rd November 2007

Judgment Approved by the court (subject to editorial corrections)

Lord Justice Mummery

Introductory

1

Dr Kuzel claims that she was unfairly dismissed by Roche Products Limited (Roche). The reason for her dismissal is contested. In the Employment Tribunal (ET) Roche argued that there was a potentially fair reason, either a conduct reason or “some other substantial reason.” Roche failed and was held liable for “ordinary” unfair dismissal. It was ordered to pay compensation capped at the then maximum of £56,800.

2

Dr Kuzel argued in the ET that the reason for her dismissal was making protected disclosures, in which case her dismissal would have been “automatically” unfair and she would be entitled to uncapped compensation. The ET dismissed that claim.

3

The issue on this appeal is whether the ET was doubly wrong: first, in rejecting the rival reasons for dismissal advanced by the parties and, secondly, in holding that she was dismissed for a reason that neither party advanced.

4

Dr Kuzel's case is that, having rejected Roche's reason for dismissing her, the ET was bound, as a matter of law, to accept the protected disclosures reason advanced by her. It should have held that her dismissal was automatically unfair for that reason. Instead, the ET held that she was unfairly dismissed as a result of Roche's failure to establish a potentially fair reason for dismissal. Although the ET decided that she was unfairly dismissed, it was, she says, on the wrong basis.

5

The point appears to be a straightforward factual question: why did Roche dismiss Dr Kuzel? There is no right of appeal from the ET on questions of fact. However, the case has stirred up plenty of argument in the Employment Appeal Tribunal (EAT) and in this court about who has the burden of proving the reason for dismissal. That is a topical question of law on appeals from the ET. It has been extensively argued in recent discrimination cases following specific statutory intervention on the question of who has to prove the prohibited reason for less favourable treatment of the claimant.

The appeal

6

The appeal is from the order of the EAT (HHJ Peter Clark presiding) dated 2 March 2007. The EAT allowed Dr Kuzel's appeal and remitted the matter to the same ET for further consideration of her “whistleblower's” claim under section 103A of the Employment Rights Act 1996, as amended (the 1996 Act). The EAT judgment is reported at [2007] ICR 945.

7

Although Dr Kuzel persuaded the EAT that there was an error of law in the ET decision, she appeals to this court because she is dissatisfied with the order remitting her case for a further hearing in he ET. Her case is that her successful appeal should have resulted in a positive finding in her favour on liability for unfair dismissal contrary to section 103A.

8

This state of affairs is unusual. It arose in this way. The ET unanimously decided on 18 July 2006 that Roche had unfairly dismissed Dr Kuzel, that her dismissal was unfair by reason of the absence of a potentially fair reason and for non-compliance with the relevant dismissal and disciplinary procedures contrary to section 98A of the 1996 Act. It was also in breach of contract.

9

The ET dismissed Dr Kuzel's claim that the reason for her dismissal was making protected disclosures and that her dismissal was contrary to section 103A. She succeeded, however, in demonstrating to the EAT that the ET erred in law in rejecting her whistleblower's claim. The ET's dismissal of her protected disclosure claim should, she says, have been reversed by the EAT rather than just being set aside and remitted to the ET. She was entitled to a substantive decision in her favour rather than another ET hearing. On this appeal it was argued that she is entitled to a judgment for unfair dismissal on the protected disclosures claim for the simple reason that Roche failed to establish a potentially fair reason for dismissal. Remitting the matter to the ET for another hearing was unnecessary and wrong in law.

10

While the ET decision on liability was under appeal it gave a reserved judgment on remedy on 24 November 2006 making an order for Dr Kuzel's re-instatement to her post at Welwyn Garden City and calculating her total loss to provide a gross sum of £79, 988.83.

11

On 24 August 2007 Wall LJ granted Roche permission to cross appeal against the EAT decision to remit her protected disclosures claim to the ET. It wants the ET decision dismissing that claim restored. According to Roche there was no error in the ET decision rejecting the rival reasons for dismissal and in dismissing her whistleblower's claim for uncapped compensation. There were disputes about the extent to which Roche was entitled in this court to argue points that were not raised below. I will deal with the procedural objections in the course of the judgment rather than by way of preliminary decision.

The legislation

12

The provisions governing the law of unfair dismissal are in Part X of the 1996 Act.

13

Section 103A of the 1996 Act was inserted in Part X by section 5 of the Public Interest Disclosure Act 1998. It provides that-

“An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure.”

14

Nothing is said in section 103A or in the related provisions about who has to show that making a protected disclosure was the reason, or the principal reason, for the dismissal. Section 98 (1) appears, however, to provide in general terms that it is for the employer to show the reason for dismissal-

“In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show-

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.”

15

Section 98(2) sets out the potentially fair reasons for dismissal: capability, conduct and, redundancy.

16

Although there is no specific provision about who has to show that the making of a protected disclosure is the reason for dismissal, the effect of section 48(2) of the 1996 Act is that, where an employee complains of being subjected to detriment by his employer for making a protected disclosure

“….it is for the employer to show the ground on which any act, or deliberate failure to act, was done.”

Background facts

17

Roche, an international pharmaceutical group, employed Dr Kuzel as Head of Regulatory Affairs from 9 June 2003 until she was dismissed on 16 March 2005 with effect from 16 May 2005. Roche did not comply with the statutory disciplinary procedures in the Employment Act 2002. As at the date of dismissal, Dr Kuzel was receiving an annual income from Roche of over £100,000 a cap of £56,800 on compensation could have a serious impact on the value of her claim.

18

Dr Kuzel's line manager was Mr Michael Doherty, Global Head of Regional Affairs. The Human Resources Director was Mr Chris Bennett. One of her colleagues was Mr Robert Vogel, Global Head of Regulatory Operations. During the course of her employment Dr Kuzel raised concerns about various issues, one of which was the conduct of Mr Vogel. In November 2004 Dr Kuzel complained about alleged comments by Mr Vogel to an external candidate for employment with Roche.

19

Three other concerns were relied on by Dr Kuzel as protected disclosures made by her: first, “overwrapping”, which was discussed in early June 2003 and raised on 2 March 2004; secondly, archiving irregularities; and, thirdly and most important, notification of a visit in early March to Roche by the Medicines and Healthcares Products Regulatory Agency (MHRA). The visit followed concerns about the sale of a Roche product “Xenical” to three slimming clinics in Derbyshire and other parts of the United Kingdom. The ET made no express finding as to whether the three alleged disclosures were protected disclosures.

20

On 16 March 2005 Mr Doherty summoned Dr Kuzel to a meeting in the office of the Human Resources Director. He told her that her contract was being terminated because of the breakdown in her relationship with Mr Vogel and because she had broken an agreement or understanding with him. He had lost all trust in her. She and Robert Vogel were not working well together.

21

It was common ground between the parties in the ET that Roche failed to comply with the statutory disciplinary procedures, but Roche contended that Dr Kuzel would have been dismissed, even if it had complied with the procedures.

22

When faced with her claim for unfair dismissal Roche initially pleaded that the reason for her dismissal was gross misconduct, a claim that was abandoned at the start of the hearing in the ET. Roche relied alternatively on “some other substantial reason” under section 98(1)(b), this being her breach of trust in...

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