Perkin v St Georges Healthcare NHS Trust

In a decision promulgated on 27 January 2004, and after a hearing lasting in total 15 days, inclusive of two days taken for consideration in chambers, the Employment Tribunal held at London South, in a constitution chaired by Mr. John Warren, (the Tribunal) unanimously decided that Mr. I.K. Perkin (the applicant before it and the appellant before us) had been unfairly dismissed by his employer, St. George’s Heathcare NHS Trust (the Respondent both in the Tribunal and to this appeal). However, the Tribunal went on to hold that had the dismissal been procedurally fair, there was a 100% chance that Mr. Perkin would have been dismissed fairly. The Tribunal also found that Mr. Perkin had contributed to his dismissal to the extent of 100%. The Tribunal, accordingly, declined to grant Mr. Perkin any relief.

I shall throughout this judgment, including citations from the Tribunal’s reasons and the Employment Appeal Tribunal’s judgment refer to the appellant as “Mr. Perkin”, and to the Respondent to this appeal as “the Trust”.

On 29 July 2004, the Employment Appeal Tribunal (EAT) in a constitution chaired by Mitting J dismissed Mr. Perkin’s appeal against the Tribunal’s decision and refused him permission to appeal. Mr. Perkin applied to this court for permission to appeal. Permission was refused on the papers by Sedley LJ on 9 December 2004, but granted at on oral hearing on 14 January 2005 by Mummery and Neuberger LJJ. On 28 July 2005, we heard argument from leading counsel on both sides (Mr. Brian Langstaff QC for Mr. Perkin and Mr. Christopher Jeans QC for the Trust) and reserved judgment.

The Tribunal’s reasons extend to some 66 pages. Of those, pages 4 to 55 are taken up with the Tribunal’s findings of fact, which run to some 217 sub-paragraphs. Whilst I will need in due course to identify a number of these findings, I can, for the time being, take the essential facts from a succinct summary contained in the judgment of the EAT .

The EAT also records, when outlining the history, that Mr Perkin had accused the Director of Human Resources, Mr. Watts, of doctoring the notes of the investigatory meeting held on 8 August 2002. The Tribunal rejected that allegation, finding that the notes taken by Mr. Watts did not differ in substance from those taken by Mr. Perkin’s representative.

Mr. Perkin’s complaint, as formulated in an attachment to his Form IT1 runs to 189 paragraphs. Apart from a claim for interim relief, his case was stated on two bases: firstly, that his dismissal was automatically unfair under the provisions of Part IVA and section103A of the Employment Rights Act 1996 (ERA 1996) since the reason for it was the fact that he had made protected disclosures (commonly known as “whistle-blowing); and secondly that it was unfair under ERA 1996 section 98.

As to the former, the three protected disclosures alleged were (i) in respect of cancelled operations in October / November 2001; (ii) in respect of the financial probity of the Chief Executive, Mr. I.L. Hamilton; and (iii) by virtue of discussions over the accounts (and his concern about the Trust’s ability to break even) which he had with Simon Sharp (of the Trust’s auditors), in particular in July 2002.

In its Form IT3, the Trust accepted that the cancelled operations issue that Mr Perkin had raised in an e-mail to the Chief Executive on 12 October 2001 was a “protected disclosure” within ERA 1996 sections 43A and 43B. However, it denied (1) that either of the other two disclosures were “protected disclosures”; and (2) that any of the alleged disclosures had been the reason for Mr Perkin’s dismissal.

The Trust asserted that the reason for Mr Perkin’s dismissal was as set out in the letter from the Ms McLoughlin to Mr. Perkin on 4 December 2002, subsequently summarised by the Tribunal in paragraph 14 of its reasons as follows: -

The Trust’s pleaded case was that Mr. Perkin was dismissed “for a reason related to his conduct and / or ‘for some other substantial reason’ (SOSR) (the irretrievable breakdown in relationships to which his behaviour had given rise) within the meaning of ERA 1996 section 98”.

It is unnecessary to set out the provisions of Part IVA of ERA 1996 (Protected Disclosures) in relation to Mr. Perkin’s case for automatic unfair dismissal under ERA section 103A (or the issues in relation to it as identified by the Tribunal) since the Tribunal rejected Mr. Perkin’s case under this head, and there was no appeal in relation to it either to the EAT or to this court. Its relevance, accordingly, goes only to the effect which the Tribunal’s findings of fact on the section 103A issues had on the substantive dispute.

As to the question of unfair dismissal under ERA 1996, section 98, the relevant statutory provisions are, of course, well known. It is, I think, however, necessary to set them out. Part X of ERA 1996 is entitled “UNFAIR DISMISSAL”. Chapter 1 of Part X is entitled “RIGHT NOT TO BE UNFAIRLY DISMISSED”. Section 98 of ERA 1996 reads, where relevant to this case, as follows: -

General

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 –

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

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.

A reason falls within this sub-section if it -

relates to the conduct of the employee, ……..

In sub-section 2(a) –

“capability”, in relation to an employee, means his capability assessed by reference to skill, aptitude, health or any other physical or mental quality, and

“qualifications”, in relation to an employee, means any degree, diploma or other academic, technical or professional qualification relevant to the position which he held.

At the outset of its reasons, the Tribunal identified the issues for determination relating to the question of unfair dismissal. These had been agreed between the parties as follows: -

Did Mr. Perkin by his blameworthy conduct cause or contribute to his dismissal?

Using the same numbering as that which I have used for the issues which the Tribunal identified as requiring resolution, the Tribunal, in relation to issue 1 (reason or principal reason for dismissal) accepted the reason for dismissal given by the Trust, which I have already set out. It found (paragraph 36 of its reasons) that “the reasons for dismissal was conduct some other substantial reason” (sic) and added: (paragraph 37) “Both are potentially fair reasons within the meaning of section 98”.

In relation to issue 2 it answered points 2(1), 2(2), 2(4) and 2(5) in the Trust’s favour. As to point 2(3), however, it found that the disciplinary procedure had been unfair. It expressed its conclusion on this point as follows: -

As to the remaining three issues, the Tribunal found that Mr. Perkin had contributed 100% towards his dismissal, and that there was no prospect of Mr. Perkin retaining his job had a different (fair) procedure been followed. Those findings effectively disposed of issue 5.

The Tribunal’s reasons for their decision run from paragraph 11 to paragraph 50. The Tribunal throughout does not distinguish between a case founded on Mr. Perkin’s “conduct”, and a case founded on SOSR. It refers throughout to “conduct some other substantial reason”, save when identifying the issue at the outset, where the reference is to “conduct / SOSR”. ERA 1996 section 98(1) distinguishes between them, and treats them as alternatives. The reason for dismissing an employee must either be a reason within section 98(2) (which includes conduct) or it must be SOSR “of a kind such as to justify the dismissal of an employee holding the position which the employee held”.

The point is not, I think, fully addressed by paragraph 15 of the Tribunal’s reasons, which reads: -

In paragraph 34 of its reasons, the Tribunal summarises the evidence available to the Trust when making the decision to dismiss Mr. Perkin.

Having decided that the “reasons” for Mr. Perkin’s dismissal were potentially fair, the Tribunal then applied the British Home Stores v Burchell [1978] IRLR 379, Post Office v Foley; HSBC v Madden [2000] IRLR 827 tests and concluded as follows:

The Tribunal then examined the procedure adopted by the Trust, and found it wanting (see paragraphs 40 to 44 set out above in paragraph 15 of this judgment). It then dealt with the Polkey / contribution point. It is, I think, necessary to set out this part of the Tribunal’s reasoning in its entirety: -

In a carefully crafted introduction to their grounds of appeal to the EAT, Mr. Langstaff and Mr. Wilson relied heavily on the fact that no allegations of specific misconduct, personal, professional or financial had been levied against Mr. Perkin. They argued that he had been dismissed on account of his personality only, and that personality, as a reason for dismissal, was incapable of constituting “conduct” within ERA 1996, section 98(2)(b) . They pointed out that the Trust had not argued that Mr. Perkin’s dismissal related to his “capability” within section 98(2)(a). They pointed to the length of his service, and to the fact that complaints against Mr. Perkin had been found by the Tribunal to have been first made to the Chief Executive in October 2001. He had not, however, communicated those complaints to Mr. Perkin, and although in April 2002, during the course of a performance review conducted by the Chief Executive mention had been made of concerns expressed about Mr. Perkin’s style, no steps were taken by the Chief Executive to address the issue, and Mr. Perkin had been commended for his work as Finance Director.

That, counsel argued was the actual background to the abrupt decision to request Mr. Perkin’s resignation on 29 July 2002. The decision of the Chair of the Trust to conduct the disciplinary hearing when she had made it clear to the Trust’s external reviewers that she wanted Mr. Perkin out of the organisation rendered his dismissal manifestly unfair, and his eventual dismissal was supposedly not just for “conduct” but for the robust manner in which Mr. Perkin had defended himself, something for which, of course, he had not been charged, and which, counsel submitted, could not properly be conduct within section 98(2)(b).

In these circumstances, counsel argued that the Tribunal had erred in law in relation to both limbs of its decision relating to Mr. Perkin’s responsibility for his dismissal. In addition, it had erred in finding that there was a potentially fair reason for Mr. Perkin’s dismissal.

As to the first limb (the finding that there was a 100% chance that Mr. Perkin’s employment would have been terminated even if the disciplinary proceedings had been chaired by an independent person) this conclusion had been erroneously reached on the basis that the Trust was entitled to dismiss Mr. Perkin for his conduct. The reasons given by the Trust could not properly amount to a case of conduct. The only ground open to the Trust was capability: had that ground been alleged, fairness would have required a stepped approach towards establishing it: - warning or mentoring, followed by targets, objective review and close management. Had that occurred, it would not have been possible to argue that there would have been a 100% chance of failure. The Trust’s written disciplinary procedures stated clearly that summary dismissal would only be used in exceptional circumstances for extremely serious cases treated as gross misconduct. Mr. Perkin was not, and could not have been accused of gross misconduct.

Further, the Tribunal’s view had been based on the proposition that an independent disciplinary tribunal would have come to the view that the appropriate sanction for Mr. Perkin’s behaviour was dismissal. This was unsound and gave insufficient weight to the fact that the disciplinary tribunal was manifestly biased: - see the false evidence given by the Chair of the Trust to the Tribunal. Having reached the conclusion that the Chair had not been impartial, the Tribunal had failed to acknowledge the extent to which the fact of her bias had affected the course of the disciplinary process. No reason had been given for the Tribunal’s conclusion that an independent person would have reached the same conclusion: alternatively, such a conclusion was perverse.

Insofar as the Tribunal had relied on Mr. Perkin’s robust conduct of his defence within the disciplinary hearing itself, this is something with which he should have been charged. He was not. Further, Mr. Perkin had not been adequately warned that the continuation of his management style would lead to his dismissal. In so far as the Tribunal had found to the contrary, it had been wrong.

As to the conclusion that Mr. Perkin had contributed 100% to his dismissal, counsel argued that no reasonable Tribunal could have reached it. There were no details of the conduct relied upon, nor any explanation as to why it was causative of dismissal. Insofar as reliance was placed on Mr. Perkin’s conduct during the disciplinary hearing, the Tribunal had failed to take into account the fact that the hearing was manifestly unfair, and the Chair’s unacceptable behaviour, which was known to Mr. Perkin.

As to the conclusion that there was a potentially fair reason for Mr. Perkin’s dismissal (conduct or SOSR), this finding, counsel argued was perverse. Neither personality, nor style was capable of constituting misconduct or SOSR warranting dismissal. The decision to dismiss was effectively taken on 29 July 2002 without warning or any opportunity given to Mr. Perkin to change his behaviour. The subsequent attempt to label his qualities as misconduct or SOSR was adventitious. Furthermore, the Tribunal had not considered why the decision to dismiss had been taken at this point.

The EAT accepted that there was some limited force in Mr. Langstaff’s submission that the Tribunal had not made a clear finding as to the reason or, if more than one, the principal reason for Mr. Perkin’s dismissal, and that the phraseology it used in paragraph 36 of its (“conduct some other substantial reason”) demonstrated the point. It rejected a submission made on behalf of the Trust that all that was necessary was that a general affirmative answer should be given to the question whether or not the reason thus described falls within one or more of the reasons set out in ERA 1996 section 98(2) or 98(1)(b). It went on: -

However, the EAT went on to say: -

The EAT was thus of the opinion that the Tribunal was entitled to take Mr. Perkin’s behaviour at the disciplinary hearing into account when reaching its judgment that a fair hearing would, inevitably, have produced the same result. It rejected Mr. Langstaff’s submission that Mr. Perkin might not have made the same accusations had the hearing been conducted by an impartial chairman: -

The EAT deal finally with the question of the Tribunal’s finding that Mr. Perkin had contributed 100% to his dismissal. Unfortunately, the Tribunal’s finding appears in the final paragraph (paragraph 50) of its reasons, in the simple sentence: “We also would find Mr. Perkin by his conduct contributed to his dismissal to the extent of 100%”. It is thus unclear whether the reasoning in the preceding paragraphs, which deal principally with the Polkey 100% reduction, was also intended to apply also to paragraph 50.

The EAT dealt with this point by reference to the judgment of Brandon LJ in Nelson v BBC (No 2) [1980] ICR 110 at 120 and 121, where he identified the three factors which had to be established before an order for contribution could be made. These were (1) conduct on the part of the employee which was culpable or blameworthy in the sense that it was foolish or perverse or unreasonable in the circumstances; secondly, that the conduct contributed to the dismissal; and thirdly that it was just and equitable to reduce the assessment of the employee’s loss. The EAT then continued: -

Although there was an initial anxiety on behalf of the Trust that Mr. Langstaff was seeking to advance in this court arguments not deployed below, that was not the case, and Mr. Langstaff, in effect, sought skilfully to revisit the grounds of appeal argued before the EAT and to rebuild the edifice which it had knocked down. His argument ran along the following lines. The simple fact of the matter was that Mr. Perkin had been dismissed on account of his personality. Personality, as a reason for dismissal, was not capable of constituting “conduct” within ERA section 98(2)(b). Insofar as Mr. Perkin’s personality was capable of constituting “capability”; (a) that had not been alleged; and (b) even if it had been, it would have been bound to fail because the Trust could not have established fairness within ERA 1996 section 98(4). Mr. Langstaff placed considerable weight on the chronology, and the undisputed facts of Mr Perkin’s long service and qualities as head of the Finance Department and as a line manager. He had done nothing wrong, and nothing he had done had damaged the Trust in any way.

Mr Langstaff relied on the decision of this court in Wilson v Post Office [2000] IRLR 834 for the proposition that an error of characterisation by an Employment Tribunal of the reason for dismissal was an error of law. Accordingly, if the Tribunal had been wrong to characterise the dismissal as being for conduct or SOSR they had made an error of law. In its final submission to the Tribunal, the Trust had relied on a “personality clash” or the consequence of a breakdown in trust and confidence between colleagues. As the Trust had itself accepted, this was not “conduct” within ERA 1996 section 98(2)(b). The letter of dismissal had referred to Mr. Perkin’s management style and his (in)abilty (inter alia) to form the necessary quality of relationships with various third parties. The focus throughout had been on Mr. Perkin’s “inability” to behave in a particular way. However, section 98(2)(a) had not been invoked, nor had he ever been accused of gross misconduct. Mr. Langstaff neatly summarised his case on this point with the phrase: being a square peg in a round hole is not appropriately to be called “conduct” so as to justify dismissal, whatever other ground it may come under, particularly when its effect is classed in terms of the repeated use of the word “ability”.

Mr. Langstaff took us to Harvey on Industrial Relations and Employment Law, section D1 paragraphs 1554 to 1566, where examples of gross misconduct were given. He took us to the Trust’s own disciplinary rules, as incorporated into Mr. Perkin’s contract where, once again, examples of what would and what would not constitute conduct meriting summary dismissal were given. He also took us to the ACAS Code of Practice on Disciplinary and Grievance Procedures. He relied on the decision of this court in Dietmann v Brent [1987] ICR 842 (in which an allegation of gross negligence in the performance of a social worker’s responsibilities was held not to constitute gross misconduct so as to warrant summary dismissal) in support of the proposition that “management style” and “ability to interact” were to be excluded from the list of matters which could properly be classed as conduct justifying summary dismissal.

In relation to the dismissal being for SOSR, Mr. Langstaff submitted that the Tribunal had provided no argued basis for its decision. Here, even more, given the breadth of the concept, definition of the factual basis underlying the finding was important. Moreover, both SOSR and capability as grounds for a fair dismissal required as a necessary precondition an attempt by the employer to address the concerns in a meaningful way. That had not occurred.

The Tribunal was furthermore wrong, Mr. Langstaff submitted, when it expressed the view (in paragraph 44 of its reasons) that at Mr. Perkin’s level of employment, a warning of dismissal if there is no improvement was unnecessary. He relied again on Dietman v Brent [1987] ICR 842 at 851, where Balcombe LJ, giving the leading judgment in this court had adopted Hodgson J’s comment in the court below in relation to the local authority’s submission that no disciplinary meeting was necessary where the charge was one of gross misconduct. Hodgson J had said: “Such a construction would mean that the more serious the offence …. the less procedural protection the employee charged with misconduct would have”. It was perverse to suggest that the further a senior executive had to fall, the less procedural protection he should have. To endorse the Tribunal’s views on this point would be to endorse an approach in which all that was necessary for a fair dismissal was for colleagues to raise unspecified complaints relating to the employee’s personality and “approach” and for senior management to give credence to them.

Mr. Langstaff further submitted that the Tribunal’s approach to section 98 was flawed because it treated the reason for dismissal as conduct, which it could not possibly be. If it had concluded that the reason for dismissal was SOSR, the Tribunal would probably have approached the determination of fairness differently. The Tribunal should not have followed the British Home Stores v Burchell [1978] IRLR 379 approach. That was a case under section 98(2)(b). The Tribunal should have focused on the reasons in the mind of the Trust on 29 July 2002. The flawed procedure that followed added nothing. If the reality was that the decision to dismiss had been taken on 29 July, it was on the reasons for that decision which the Tribunal should have directed its primary focus.

On the Tribunal’s conclusion that there was a 100% chance of dismissal, Mr. Langstaff’s argument was similar to that which he had advanced before the EAT. He criticised the EAT’s conclusion that the Tribunal had adequately set out its reasoning in paragraphs 47 to 49 of the decision. No sufficient reason had been provided by the Tribunal for the 100% finding, which was unsustainable on the facts as found.

As to the failure to follow a proper procedure, Mr Langstaff divided his criticisms into two parts. The first related to the process up to the disciplinary hearing: the second related to the Tribunal’s failure to consider the effect of Ms McLoughlin’s bias. As to the latter, the Tribunal had failed to consider the extent to which the fact of her bias had affected the course of the disciplinary process. It had also failed to give adequate reasons for its conclusion that an independent person would have reached the same conclusion.

For the Trust, Mr. Christopher Jeans QC and Mr. Simon Devonshire did not seek to go behind the Tribunal’s finding that the dismissal was procedurally unfair. They submitted, however, that the unanimous conclusion of the Tribunal had been based on fact and industrial judgment. The EAT had found no error of law and had been right not to do so. They described the appeal as a misconceived attempt to re-litigate disputes of fact already decided against Mr Perkin, by dressing them up as (supposed) errors of law. They made the conventional point that issues of fact are exclusively matters for the Tribunal, and invited us not to forget that; (i) the Tribunal had the benefit of seeing all of the witnesses give evidence; and (ii) a Tribunal’s Reasons will “always [be] surrounded by a penumbra of imprecision as to emphasis, relative weight, minor qualification and nuance ... of which time and language do not permit exact expression, but which may play a part in the ... overall evaluation”: - see the speech of Lord Hoffman in Piglowska -v- Piglowski [1999] 1 WLR 1360 at 1372 E to F.

Counsel argued that the Trust’s case against Mr Perkin was wholly corroborated by the way in which Mr Perkin gave his evidence to the Tribunal, as appeared from its findings, including references to unjust criticisms made by Mr. Perkin of fraud and lack of integrity, and in particular to unsustainable allegations of dishonourable and fraudulent conduct by Mr. Watts. Even at the Tribunal, they pointed out, Mr Perkin persisted in allegations of dishonesty and impropriety against senior colleagues which were “wholly unsustainable” (see paragraph 24 of the Reasons in respect of Colin Watts) and in which Mr. Perkin had no “reasonable belief” (paragraph 33 of the Reasons, in respect of Ian Hamilton). The Tribunal had concluded that Mr Perkin “would not or could not accept that he could possibly be at fault in even the slightest way” (Reasons, paragraph 7 (lv)).

All these findings (which, counsel submitted, were plainly unappealable); (i) supported the Tribunal’s acceptance that the Trust’s witnesses gave genuine evidence about the reason for Mr Perkin’s dismissal, and (ii) ran counter to one of the general themes in the Appellant’s Notice, namely that Mr Perkin’s behaviour at the disciplinary hearing was explained by the fact that the hearing was chaired by Ms McLoughlin, whom he believed was biased, and/or that he would have behaved differently before an “independent disciplinary panel”.

Mr Jeans submitted that the Trust’s reasons for dismissing Mr. Perkin were (a) clear; (b) were contained in the dismissal letter; and (c) were accepted by the Tribunal: that is to say, the Tribunal was “satisfied that the Trust had a reasonable belief that Mr Perkin’s style of management was such that it was seriously adversely affecting the proper running of the Trust and that it was this belief that caused it to dismiss Mr Perkin”. These conclusions were reached, counsel argued, following the Tribunal’s extensive review and consideration of the evidence before the disciplinary panel. The Tribunal had found in terms that it was this evidence which had led to the disciplinary panel’s conclusions - “[f]or all those reasons Ms McLoughlin and Ms Mark concluded that the conduct and behaviour of Mr Perkin had meant that he had not been able to discharge effectively his role as Finance Director and that he should be dismissed” (see paragraph 35 of the Tribunal’s reasons ).

As to the legal challenge, Mr. Jeans and Mr Devonshire argued that an employer must have the right to take action to address problems of personality, approach and trust and confidence (even if those problems do not lend themselves to detailed and specific particularisation) that are seriously adversely affecting the proper operation of its business at a senior level, and adversely reflecting upon the Trust both internally and externally (even if no-one was to blame for those problems, which was not the case here). There are, they submitted, many “potentially fair reasons” which can be categorised under more than one of the Section 98 labels. In such circumstances, the identification of the proper label is a matter for the tribunal, and the EAT can only interfere in the event of perversity.

Counsel identified a number of cases in which more than one label could be apposite, but a label nonetheless has to be picked. They cited Lynock -v- Cereal Packaging Ltd [1988] IRLR 510 at 511, paragraph 5 (a case of persistent absenteeism, which could have been classified as conduct or capability); Sutton & Gates (Luton) Ltd -v- Boxall [1979] ICR 67 at 70B to 71C (on the fine line between capability and conduct where the shortfall in performance is not due to an “inherent incapacity to function”, but involves some degree of fault on the part of the employee); and Slaughter -v- Brewer [1990] ICR 730, which they relied upon for the proposition that there are other categories under the capability heading which involve very different concepts – such as obstructive behaviour which might in some cases border on ‘conduct’. Counsel also referred us to Harvey Vol 1 para D1/1125, making the point that since the distinction between conduct and capability is often difficult to draw, the general concepts of fair play in disciplinary dismissals are also applicable in many capability dismissals.

In the present case, counsel submitted that whether the Trust had a genuine belief in the reason given for dismissal was a question of fact for the Tribunal (and the Tribunal accepted the Trust’s evidence); Furthermore, the “reason” given by the Trust was plainly capable in law of being characterised as a reason related to Mr Perkin’s conduct (the way he conducted himself in his dealings with colleagues and peers both internally and externally to the Trust), or as SOSR (the serious and disabling breakdown of trust and confidence between him and those persons). There was nothing perverse in the Tribunal’s choice of “label” (or acceptance of the Trust’s choice of label). In any event, the Tribunal in fact considered whether the dismissal would have been unfair had the dismissal been characterised as being for “capability”, and concluded that even if the case had been treated as a capability one, the same result would have followed: see paragraph 44 of the Tribunal’s Reasons, set out at paragraph 15 above.

For the avoidance of doubt, counsel argued that in determining whether an employee has shown a “potentially fair reason for dismissal”, it was not necessary or relevant to ask whether the reason relied upon would as a matter of contractual analysis have justified the summary termination of employment. It was well established that a wrongful dismissal can be fair, just as a dismissal with contractual notice can be unfair. The issue of contractual notice did not bear on whether the employer had shown a potentially fair reason for dismissal. In any event, it is to be noted here that Mr Perkin received a full payment in lieu of his contractual notice entitlement.

In relation to the Polkey chance appeal, Mr. Jeans argued that there was no error of law in the Tribunal’s conclusion in paragraph 47 (set out at paragraph 22 above). It was an issue of fact for the Tribunal, who were able to look at matters as an “independent” panel (Reasons, paragraph 46). In particular, the Tribunal was able to listen to the evidence of Mr Perkin, and had found as a fact (as it was entitled to) that the way in which Mr Perkin operated at the disciplinary hearing (and the Tribunal) “was illustrative of the concerns and complaints that had been raised by colleagues and others” (Reasons, paragraph 48).

In a case where trust and confidence had broken down, and which was concerned with the maintenance of working relationships, counsel argued that it was perfectly proper to consider Mr Perkin’s conduct at the Disciplinary Hearing in deciding upon the proper disposal of the charges. Furthermore, Mr Perkin’s behaviour at the Tribunal (e.g. making extravagant but unfounded allegations of bad faith, some of which he did not even believe) amply demonstrated that his behaviour before an independent panel would have been no different (as the Tribunal found at Reasons paragraph 48).

To the extent that the Tribunal relied upon Mr Perkin’s attacks on Mr Hamilton and Mr Watts at the disciplinary hearing, counsel argued that these attacks were not simply part of a “robust defence”, but were unfounded and unjust, and Mr Perkin did not genuinely believe them. It was not said that it was per se an error of law for the Tribunal to have made a 100% Polkey chance deduction, nor could it be: see Chaplin -v- Rawlinson [1991] ICR 553.

Whether another disciplinary panel would have decided that the Trust must continue to engage a Finance Director whose attitude and intransigence had produced such a widespread breakdown in key relationships (within and without the Trust) was, Mr. Jeans submitted, a paradigm “industrial jury” issue on which Employment Tribunals (with their experienced lay membership) were especially well qualified to adjudicate.

The thrust of this ground of appeal, counsel argued, proceeded from the erroneous hypothesis that the Tribunal would have come to a different conclusion on the Polkey chance of Mr Perkin retaining his job, had the dismissal been treated as being for capability, not conduct. Thus it had been argued for Mr. Perkin that if it had been genuinely perceived that he was not capable of carrying out his role as Finance Director in the manner required by management, a stepped approach towards establishing incapability (warning, or mentoring, followed by targets, objective review, and close management) would have been an essential pre-requisite of fairness. However, the Tribunal had in terms considered this contingency, and had concluded that at Mr Perkin’s level of seniority the “stepped approach” to addressing capability would not have been “strictly required” (a conclusion wholly consistent with authority). Furthermore, Mr Perkin knew of the concerns and did nothing to address them.

As to the contributory fault appeal, counsel submitted that questions of contributory fault are quintessentially questions of judgment for the Tribunal, and the EAT has very limited scope for interference. They relied on Hollier -v- Plysu [1983] IRLR 260, in which this court had restored a 75% finding of contribution which the EAT had reduced to 25%. Conduct which is “perverse, foolish or ... bloody-minded” can suffice. Equally, they argued, it was plainly the case that a deduction for contribution can be appropriate in a capability case, or in a case of the conduct/capability borderline.

The finding of 100% contributory fault was, counsel submitted, fully justified. The Tribunal made numerous (unappealable) criticisms of Mr Perkin’s conduct both during his employment and at the disciplinary hearing. The Reasons provided overwhelming support for the conclusion that Mr Perkin was guilty of 100% contributory fault. The Tribunal’s Reasons were not deficient merely because the Tribunal had not repeated in expressing its conclusion on the contributory fault question each and every criticism it has made of Mr Perkin’s conduct. To the extent that it was claimed that Mr Perkin’s conduct at the disciplinary hearing was excused by his belief that Ms McLoughlin was “biased” (and thus should not have been relied upon in support of a finding of contributory fault), he would, for the reasons already given, have behaved no differently before a different panel

Mr. Langstaff commented during the course of his submissions that the Tribunal’s reasons were long on fact and short on analysis. That was, I think, an accurate statement. I also agree with Sedley LJ that in the course of the 65 pages of its Reasons, the Tribunal does, from time to time, lose sight of the wood for the trees. But in my judgment, Mr. Langstaff’s criticism does not ultimately help him, since this is a case which depends critically upon its unusual facts, and in which the Tribunal’s findings of fact (assuming it was entitled to make them) are effectively determinative of the outcome. It is, accordingly, a case in relation to which generalisations, or statements of general principle, are likely to prove unhelpful. What is required is a careful application of ERA 1996 section 98 to the particular facts.

That said, I agree with Mr. Langstaff that personality, of itself, cannot be a ground for dismissal within ERA 1996 section 98. For there to be a potentially fair reason for dismissal, an employee’s personality must, it seems to me, manifest itself in such a way as to bring the actions of the employee, one way or another, within the section. Whether, on the facts of a particular case, the manifestations of an individual’s personality result in conduct which can fairly give rise to the employee’s dismissal; or whether they give rise to SOSR of a kind such as to justify the dismissal of an employee holding the position which the employee held, the employer has to establish the facts which justify the reason or principal reason for the dismissal. Provided the employer can do so, section 98(4) then kicks in. So much is, I think, obvious.

I did not understand Mr. Langstaff to argue that in a given case a breakdown in confidence between an employer and one of its senior executives; (a) for which the latter was responsible; and (b) which actually or potentially damaged the operations of the employer’s organisation (or which rendered it impossible for the senior executives to work together as a team) was outwith section 98 as SOSR and therefore could not result in an employer fairly dismissing the employee whom the employer deemed responsible for that state of affairs. Indeed, I think Mr. Langstaff was minded to accept that the facts found by the Tribunal could have amounted to SOSR. In my judgment, that concession was both correct, and realistic. Standing outside the case for a moment, it seems to me that it must be possible for an employer fairly to dismiss an employee in the circumstances set out in the earlier part of this paragraph, provided always the terms of section 98(4) are satisfied.

The real thrust of Mr. Langstaff’s argument, as I understood it, was that the Tribunal erred fundamentally by treating the case as being one of conduct within section 98(2)(b). Mr. Perkin had been summarily dismissed, when his behaviour manifestly was not capable of being described as gross misconduct. Secondly, the Tribunal’s treatment of the case as one of conduct had led it to adopt the wrong approach to fairness, and into error both on the issue of the Polkey reduction and contributory fault.

The success of the first limb of Mr. Langstaff’s argument seems to me to depend critically on whether Tribunal was wrong to categorise the reason for dismissal as conduct as opposed to SOSR. Whilst it is, of course, important that an employee should know clearly why he or she has been dismissed, and whilst I see the force of Mr. Langstaff’s criticism of the “conduct” analysis, particularly in relation to the question of what constitutes gross misconduct or otherwise warrants summary dismissal, I find myself on this part of the case in complete agreement with the reasons given by Sedley LJ when refusing permission to appeal on paper, and do not think I can better his succinct way of expressing them:

In my judgment, as Mr. Jeans argued, the essential and determinative facts were for the Tribunal to find. If there was properly material on which they could make such findings (and there was) the Tribunal was entitled to come to the conclusion that the Trust had a potentially fair reason to dismiss Mr. Perkin. Like Sedley LJ, I see this, speaking for myself, as a case as falling within SOSR rather than conduct, and it would have been preferable, in my judgment, if the Tribunal had so analysed it. However, like the EAT in paragraphs 18 and 19 of its judgment (set out at paragraph 31 above) I do not see the Tribunal’s failure to categorise the reason as fatal to its reasoning or to the safety of its decision.

The critical question which follows is whether Mr. Langstaff was right in his submission that the Tribunal’s erroneous insistence in treating the case as one of conduct within section 98(2)(b) led it to apply the wrong test of fairness under section 98(4). This can be summarised as the British Home Stores Ltd v Burchell [1978] IRLR 379 point.

There are, I think, two principal answers to Mr. Langstaff’s argument on this point. The first, perhaps less persuasive, is that it is difficult to criticise the Tribunal for applying the Burchell test when the second issue identified by consent for its determination (see paragraph 13 above) was essentially couched in Burchell terms. Secondly, however, whilst Burchell is itself a “conduct” case, I see no reason why the principles it sets out relating to fairness should be limited to cases under ERA 1996 section 98(2)(b). For my part, therefore, I do not think that the Tribunal directed itself erroneously on the fairness issue by following the Burchell approach.

The uncontroversial status of the principle established by Polkey v AE Dayton Services Ltd [1988] AC 344 was demonstrated by the absence of the case from both parties’ lists of authorities. Mr. Langstaff, moreover, did not challenge the capacity of a Tribunal to find a 100% contribution, as in the case of Chaplin v Rawlinson on which Mr. Jeans had relied. The 100% Polkey reduction is thus, in my judgment, an assessment which depends critically on the facts.

The point which I have found most difficult in this part of the case is that which relates to the conduct of Ms McLoughlin. There is no dispute that this plainly rendered the dismissal procedurally unfair. The question is whether it goes further, and whether the Tribunal was right to find; (1) that had Mr. Perkin’s disciplinary proceedings been conducted before a properly constituted and unbiased tribunal there was a 100% chance that he would have been fairly dismissed; and (2) that Mr. Perkin “by his conduct Mr. Perkin contributed to his dismissal to the extent of 100%” .

I have to say that I find it quite extraordinary that a person in Ms McLoughlin’s position could think it right to chair an internal disciplinary procedure when she herself, only days before, had made it clear beyond peradventure that she wanted Mr. Perkin dismissed. The overwhelming and irresistible inference is that she not only wanted him out, but was of the view that this was the speediest and most effective way of achieving her objective, since there was plainly no prospect, with her in the chair, that the disciplinary procedure would result in anything other than confirmation of Mr. Perkin’s dismissal. Against that background, it must, at first blush, be reasonable to think that a fair procedure, and a genuinely independent investigation would – or at the very lowest might - have produced a different result – and certainly not a result which placed the entire responsibility for his dismissal on Mr. Perkin itself.

That, I have to say, was my initial reaction on reading the papers. Mr. Jeans was, however, able to take us through the Tribunal’s factual findings, and it must be said that they are very powerful indeed, both in so far as they precede the disciplinary hearing and in so far as they relate to the manner of Mr Perkin’s defence of the case against him.

Mr. Perkin was, of course, entitled to defend himself, but the manner of his defence, and in particular his attacks on the honesty, financial probity and integrity of his colleagues (and in particular his dogged insistence on maintaining his stance in relation to those attacks when they were manifestly ill-founded – see, as an example, the notes taken by Mr. Watts referred to in paragraph 4 of this judgment) opened the door, in my judgment, to the Tribunal being able to find that any other disciplinary process would have ended with exactly the same result. In my judgment, the Tribunal was plainly entitled to reach the conclusion that it would have been quite impossible for Mr Perkin to work again with, for example, Mr. Hamilton, after the former had called the latter a bully and a liar. Mr. Jeans was also entitled to make the point that Mr. Perkin behaved in this way, even though he was not at the outset aware of Ms McLoughlin’s unprincipled conduct.

I remind myself of the obvious. It is for the Tribunal to find the facts. The test is whether it was open on the facts for the Tribunal to reach a conclusion that this was a 100% Polkey reduction case. I have come to the conclusion that the submissions made by Mr. Jeans are to be preferred, and that in Sedley LJ’s phrase the Tribunal’s findings “make the Polkey answer ineluctable”. I have thus come to the conclusion that it was open to the Tribunal to find a 100% Polkey reduction, and that its reasons for doing so are compliant with the standard identified in the decision of this court in Meek v Birmingham City Council [1987] IRLR 250.

As to the question of 100% contribution, I find myself, once again, in agreement with Sedley LJ’s written reasons. He said: -

If the Polkey 100% reduction is not properly capable of challenge, the concept of 100% contributory fault is perhaps of lesser significance. Whether I, had I been a member of the Tribunal, would have said Mr. Perkin was 100% responsible for his own misfortune I do not know, and of course that is not the test. Mr. Perkin was plainly operating in a difficult world, where the standards set by Ms McLoughlin, to take the obvious example, left a great deal to be desired and where his desire to protect his back was understandable. The terseness of the Tribunal’s final paragraph is unfortunate. At the same time, I am conscious of the warnings contained in Meek v Birmingham City Council against reading the Tribunal’s decision too analytically. For my part, therefore, I am content to take the view that the reasoning which informs paragraphs 45 to 49 also informs paragraph 50, and, like Sedley LJ, do not think it appropriate for this court to second guess the Tribunal’s decision.

For all these reasons, I would dismiss this appeal.

I would not wish it to be thought that I had overlooked the reasons given by Mummery and Neuberger LJJ in giving permission to appeal. In his judgment, Mummery LJ stated: -

As I stated in paragraph 58 of this judgment, the facts of this case are highly unusual. I have, I hope, covered the points which troubled Mummery LJ, and remain of the view that, for the reasons I have attempted to give, the conclusions reached by the Tribunal on the facts of the case were warranted.

Lord Justice Mance: I agree.

Lord Justice Tuckey: I also agree.