Orr v Milton Keynes Council

JurisdictionEngland & Wales
JudgeLord Justice Sedley,Lord Justice Moore-Bick,Lord Justice Aikens
Judgment Date01 February 2011
Neutral Citation[2011] EWCA Civ 62
Docket NumberCase No: A2/2009/2700
CourtCourt of Appeal (Civil Division)
Date01 February 2011

[2011] EWCA Civ 62

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

Before : Lord Justice Sedley

Lord Justice Moore-Bick

and

Lord Justice Aikens

Case No: A2/2009/2700

UKEAT/0506/08/SM

Between
Trevor Orr
Appellant
Milton Keynes Council
Respondent

Mr Richard O'Dair (instructed by Fisher Meredith Llp) for the Appellant

Mr Simon Cheetham (instructed by Milton Keynes Council, Legal Services) for the Respondent

Hearing date: Wednesday 24 November 2010

Lord Justice Sedley

Lord Justice Sedley:

1

The question at the heart of this appeal is whether an employer, when considering dismissal of an employee for misconduct, is to be taken to know exculpatory facts which are known to the employee's manager but are withheld from the decision-maker. This question in turn touches on some larger questions about the law of unfair dismissal.

2

Although the case has a complex history, the essential sequence is the following. Mr Orr, the appellant, who is black and of Jamaican origin, was employed by the respondent council as a part-time youth worker from 2002. On 17 October 2005, in breach of the express instructions of his manager, Peter Madden, the appellant had discussed with some young people at a community centre a sexual assault which had recently taken place. Three days later, in the course of a discussion about working hours, the appellant had become rude and truculent towards Mr Madden.

3

A disciplinary hearing was conducted on the respondent council's behalf by a group manager, John Cove, who found that both allegations were established and that each amounted to gross misconduct. Mr Orr was dismissed by reason of both incidents. I will return at the end of this judgment to the significance of this. For the present it is necessary to note that, while the evidence against Mr Orr came in significant part from Mr Madden, and while Mr Orr for various reasons took no part in the hearing, the propriety of Mr Cove's conclusions on the material before him is not challenged. The same is the case in relation to the internal appeal against this decision, at which Mr Orr was represented but which failed.

4

Mr Orr then brought unfair dismissal and discrimination proceedings against the council. An employment tribunal sitting at Bedford found that the dismissal was fair; but it also found that there had been unlawful discrimination because a female white comparator had been treated more leniently in analogous circumstances. Mr Orr's appeal to the EAT on the inconsistency of the unfair dismissal finding with the discrimination finding resulted in a remission of the entire case.

5

A second employment tribunal sat at Bedford for five days in March and April 2008, and finally on 29 August promulgated a determination (its text deplorably riddled with uncorrected typographical errors) which

a) found that what had sparked the altercation on 20 October 2005 was an underhand attempt made by Mr Madden to reduce Mr Orr's working hours without his agreement;

b) found that in the course of the altercation, when Mr Orr, being upset, had begun to use Jamaican patois, Mr Madden had said: "You lot are always mumbling … I can't understand a word you lot are saying";

c) held without opposition that the latter amounted to direct race discrimination;

d) but held that the dismissal was nevertheless fair and non-discriminatory because

(i) it was a reasonable response to what was known to the dismissing officer at the time, and

(ii) there was insufficient similarity between Mr Orr's case and those of the two comparators on whose more lenient treatment he relied.

6

Mr Orr appealed once more to the EAT (Judge Hand QC, Mr G Lewis and Mr R Lyons), whose judgment—[2009 ] UKEAT/0506/08/SM – describes the procedural history in detail. For reasons which the judgment spells out, the EAT concluded that the tribunal's favourable finding of fact which led to its finding of discrimination could neither be imported back into the disciplinary proceedings so as to render them unfair nor relied on so as to render the dismissal which followed them unfair.

7

From this summary I turn directly to the issues before this court, which have been considerably narrowed. In relation to them we have had the assistance of informed and focused submissions from Richard O'Dair and Simon Cheetham, for which the court records its gratitude.

8

For the appellant, Mr O'Dair limits his case to the situation in which at the time of the disciplinary hearing facts are known to the employer, albeit not to the decision-maker, which exonerate the employee or mitigate his offence. He distinguishes this from the equally problematical but legally different situation in which exonerating or mitigating facts become known after the disciplinary process has been completed. Given the fact findings in this particular case, Mr O'Dair submits that the council as a matter of law knew, through Mr Madden himself, that Mr Orr's behaviour in the second incident had been provoked by Mr Madden's own underhand conduct. That the council's disciplinary officers did not in fact know this, thanks to Mr Madden's concealment of it, does not legally (or for that matter morally) matter.

9

Mr Cheetham submits that this is to let legal fiction supplant reality: the reality was that neither the respective decision-makers nor the council itself knew what a tribunal more than two years later found to be the truth. To impute knowledge of it to them, and thereby to stigmatise a conscientious and careful decision as unfair, is, he says, neither morally nor legally right.

10

It is necessary first to look at the governing legislation. For present purposes this lies in a very small compass. Section 98 of the Employment Rights Act 1996, as amended, provides by subsections (1) and (2) that in a case such as the present it is for the employer to show that the employee has been dismissed for a reason relating to his conduct. Once this is established, subsection (4) provides:

"…. 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.

11

Although it is not at the centre of the argument put before us, it is right to observe that the meaning of these provisions is both problematical and contentious, notwithstanding that this or a very similar formula has been on the statute book since its first enactment in s.24(6) of the Industrial Relations Act 1972, which introduced the concept of unfair dismissal. In the first years of the legislation 1 it was generally supposed that the employment tribunal sat as what Phillips J in Grundy v Wills [1976] ICR 323 called a special jury, taking its own non-technical approach to the question whether in all the circumstances the dismissal had been fair: see in particular Earl v Slater and Wheeler (Airlyne) Ltd [1972] ICR 508. The shift from this approach to a Wednesbury rationality test has been controversial, not least because it seems to have originated in a note in the Industrial Cases Reports of an EAT decision, British Home Stores v Burchell [1980] ICR 303, in which the employer was represented by counsel of great distinction, the employee did not appear at all and was not represented, and the single authority cited by the court had to do with the standard of proof. Burchell has nevertheless acquired authoritative status, initially through its approval (as an unreported case) by this court in Weddel and Co v Tepper [1980] ICR 286, and more recently by its endorsement in the judgment of Mummery LJ in Foley v Post Office [2000] ICR 1283. Mummery LJ there gives a much fuller account than I have done of the course taken by the caselaw over time. In the course of it he notes the (to my mind) cogently reasoned decision of Morison J, sitting in the EAT, in Hadden v Van Den Bergh Foods Ltd [1999] ICR 1150, §25, but holds it to be unsustainable in the light of binding authority. We for our part are bound by the decision in Foley.

12

This being so, we cannot resolve the textbook problem of the fairness of a properly conducted dismissal for a theft of which the accuser has himself been subsequently convicted; nor therefore the question, which Mr O'Dair must reserve, of Mr Orr's having been dismissed for an altercation which it later turned out had been caused by the manager responsible for his dismissal. But it is relevant to the question we do have to resolve that both problems, like the present problem, take the court back to the words of s.98(4)(b).

13

Put concretely, what are the equity of the situation and the substantial merits of an unfair dismissal claim where it turns out that the employee's manager knew of exculpatory facts and withheld them from the decision-maker? These are not, it should be noted, things which s.98(4)(b) merely requires to be taken into account. They are the prescribed statutory test, in addition to the sufficiency of the reason, by which the fairness or unfairness of a dismissal is required to be tested.

14

Mr O'Dair postulates analogous instances where it would be a reproach to the law not to find a dismissal unfair. A female secretary admits that she has struck and abused the male senior executive for whom she works; she says that he was sexually harassing her; he says it was she who was...

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