The Co-Operative Group Ltd v Mr S Baddeley
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Lord Justice Ryder,Lord Justice Laws |
| Judgment Date | 15 May 2014 |
| Neutral Citation | [2014] EWCA Civ 658 |
| Docket Number | Case No: A2/2013/2137 |
| Date | 15 May 2014 |
| Court | Court of Appeal (Civil Division) |
[2014] EWCA Civ 658
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM The Employment Appeal Tribunal
Mr Justice Keith
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Laws
Lord Justice Ryder
and
Lord Justice Underhill
Case No: A2/2013/2137
Mr Bruce Carr QC (instructed by Addleshaw Goddard LLP) for the Appellant
Mr Ian Wheaton (instructed by Bernard Chill & Axtell) for the Respondent
Hearing date: 11 February 2014
INTRODUCTION
The Claimant, the Respondent before us, was employed by the Appellant ("the Co-Op") from November 2007 until his dismissal for misconduct on 20 December 2010. He had a background in the pharmaceutical industry. In the later part of his employment by the Co-Op he was Quality Assurance Manager for a joint venture in which the Co-Op was engaged in China. He spent most of his time in China, but his base remained at the Co-Op's National Distribution Centre at Meir Park in Stoke-on-Trent.
By a judgment sent to the parties on 4 April 2012 an Employment Tribunal chaired by Employment Judge Lloyd held that the reason for the Claimant's dismissal was that he had made protected disclosures – in the jargon, that he was a whistleblower – and that it was thus "automatically" unfair under section 103A of the Employment Rights Act 1996. It also held that it would, if section 103A had not applied, have found his dismissal to be unfair under the ordinary provisions of section 98 of the Act.
The decision that the Claimant's dismissal was unfair under section 103A was upheld by the Employment Appeal Tribunal, Keith J presiding, in a decision dated 15 November 2013. This is (subject to the procedural wrinkle mentioned at para. 36 below) the Co-Op's appeal against that decision. It has been represented before us by Mr Bruce Carr QC. The Claimant has been represented by Mr Ian Wheaton of counsel.
THE SEQUENCE OF EVENTS LEADING TO THE CLAIMANT'S DISMISSAL
As discussed more fully below, it is not easy to obtain a coherent narrative from the Employment Tribunal's Reasons. Fortunately, however, the EAT gives a very clear account at paras. 10–21 of its judgment, to which reference can be made if necessary. For present purposes I can make do with a very short summary.
In order to understand the background to the Claimant's dismissal it is necessary first to say something about the Co-Op's practice as regard disposal of pharmaceutical stock which was approaching its sell-by date or otherwise not selling: this is referred to as "amnesty stock". Such stock had initially been returned to a Co-Op site called Sants; but that had recently closed and at least from 2010 it was being returned to Meir Park. Some would be offered for sale to staff at reduced prices, but arrangements would also be made for sales to discount traders for sale in street markets or other such outlets. However, it was necessary to exclude from such sales all prescription-only medicines or so-called "pharmacy-only" items ("POMs" and "POIs"), which were required to be sent for incineration.
A sale of amnesty stock to staff took place in the car park at Meir Park on 24 July 2010. It was organised by the Claimant's sister, who was also employed by the Co-Op. The Claimant was present. It is common ground that he was concerned that the stock being sold might include some POMs and POIs: there was a dispute before the Tribunal about what action he took about that concern. Following the sale the Claimant arranged for some "tote boxes" of unsold stock to be sold on to a discount trader whom he knew called Tim Jackson.
On 19 October 2010 the Co-Op was told by the local Trading Standards Office that a number of POMs and POIs originating from the Co-Op had been found on sale at Winsford Market in Cheshire. The officer investigating had been told that the stock had been acquired by the traders in question from Mr Jackson, and he had also been given the Claimant's name. The Co-Op's Asset Profit and Protection ("AP&P") Team started an investigation. Among the people they interviewed was the Claimant. In the course of his second interview with them a further matter of concern emerged. In mid-September he had agreed to sell a further quantity of amnesty stock to Mr Jackson, but prior to actual delivery he had taken the stock in question off site, using a Co-Op van, and stored it for a few days in a lock-up garage which he had rented privately. The team regarded that procedure as highly irregular.
The charges that led to the Claimant's dismissal related both to the sales on 24 July and to how he had handled the further sale in September. So far as the former was concerned, it was said that he had failed to report the concerns that he had that POMs and POIs were among the items being sold to staff and that he had failed to ensure that no such items were included in the stock which he sold to Mr Jackson. As for the latter, it was said that he had not informed management at all that he was taking stock off site and storing it in a lock-up garage prior to its delivery to Mr Jackson. (I should make it clear that it was not part of the Co-Op's case that the sales to Mr Jackson were improper in themselves, still less that they were for the Claimant's own benefit. It is common ground that he accounted to the Co-Op for what Mr Jackson paid him.)
It was the Claimant's case that there was nothing wrong in his conduct on either occasion. As for the sales on 24 July, he had in fact carried out a check of the amnesty stock in the car park, with a management colleague, to look for POMs and POIs: they had found none, although they had not been able to check everything. No POMs or POIs had been included in the stock sold to Mr Jackson. As for the other charge, he had taken the stock off site because Mr Jackson was unable to take delivery straightaway but it was important that it be removed because there was about to be an inspection of Meir Park by the Medicines and Healthcare Products Regulatory Agency ("the MHRA") and, he said, the Co-Op did not have the necessary licence to accept and store amnesty stock: management colleagues had known exactly what he was doing. More generally, it was the Claimant's case that he himself has always been particularly concerned about the irregular storage of amnesty stock, and specifically POMs and POIs, and about it being irregularly on-sold. Although it was not his management responsibility, he had raised concerns about this subject on more than one occasion earlier in 2010: this indeed was the subject-matter of the protected disclosures which formed the basis of his claim under section 103A.
There was a disciplinary investigation, followed by a disciplinary hearing before a Mr Atkinson, the Co-Op's Divisional Operations Manager, on 16 December 2010. He found the charges proved and decided that that Claimant should be summarily dismissed. The Claimant appealed, but his appeal was dismissed by the Co-Op's Head of Central Operations, Mr Logue.
THE LAW
No very sophisticated points of law are raised by this appeal, but I should summarise the relevant statutory provisions.
The provisions of section 98 of the 1996 Act are extremely familiar and I need not set them out here. But it is worth spelling out, trite though it may be, that they involve a two-stage exercise. First, by sub-section (1), the employer has to prove that the reason, or principal reason, for the dismissal was one of the admissible reasons identified in sub-section (2), the conduct of the employee being one such reason, or "some other substantial reason". If he does so, the tribunal then has, by sub-section (4), to decide whether "in the circumstances … the employer acted reasonably or unreasonably in treating [that reason] as a sufficient reason for dismissing the employee".
Section 103A of the Act reads as follows:
"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."
"Protected disclosure" is defined in Part IVA of the Act, but I need not set out the relevant provisions. Section 103A operates by, in effect, providing that dismissal for making a protected disclosure constitutes dismissal for an inadmissible reason, so that the second stage that would be necessary under section 98 does not arise.
THE PROCEEDINGS IN THE EMPLOYMENT TRIBUNAL
The Claimant commenced proceedings on 15 March 2011. His claims were not perfectly pleaded, but as eventually clarified in Mr Wheaton's written closing submissions (of which we have a copy) they can be summarised as follows.
Unfair "whistleblower" dismissal. The Claimant's primary claim was that he had been unfairly dismissed by reference to section 103A. The disclosures relied on were three alleged disclosures made to his management colleagues in connection with the storage and handling of amnesty stock at Meir Park, for which – as I have said – he believed that the Co-Op did not have the necessary approvals. In essence his case, as eventually developed, was that his conduct in making those disclosures had led his line manager, Mr Paul Berne, the International Development Manager, and other senior management (in particular Mr Bomphrey, the Director of Logistics) to regard him as a troublemaker who should be got rid of at the first opportunity. The report of the Trading Standards Officer represented such an opportunity. The investigation and subsequent disciplinary...
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