Patel v Folkestone Nursing Home Ltd

This appeal is concerned with the legal effect of a contractual disciplinary appeal procedure in an employment contract in relation to the dismissal of an employee for misconduct, whose appeal is then allowed by the employer pursuant to that procedure.

The employee (the appellant) was originally dismissed by a letter of 2 April 2014 from his employer (the respondent), but was informed by a letter dated 24 June 2014 that his appeal had been successful. The appellant was not satisfied with the terms of the letter of 24 June 2014, which left important matters unresolved, and so refused to return to work. On 17 July 2014 the appellant filed claims with the Employment Tribunal (“ET”), including a claim of unfair dismissal. At a preliminary hearing, the ET identified as a question for determination whether as at 17 July 2014 there had been a dismissal of the appellant so as to allow him to bring that claim.

The ET answered that question in the affirmative, on two bases. First, it held that the decision on the appellant’s appeal under the contractual procedure did not undo the effect of the earlier summary dismissal, because there was no contractual provision which bound the appellant to accept that a successful appeal under that procedure had the effect of wiping out the previous dismissal. In addition, the ET held that the letter of 24 June 2014 failed properly to address critical matters of concern to the appellant in relation to one of the allegations which had been made against him (that he had falsified patient records at the care home), so there was no clarity about the outcome of the appeal as regards that allegation and as regards the basis on which the appellant was to return to work. This too meant that the appellant was not obliged to return to work and was entitled to treat himself as having been dismissed by the date he filed his claims on 17 July 2014. Accordingly, the appellant was entitled to proceed with his claim for unfair dismissal.

The ET then determined that claim on the merits and held that the appellant had been unfairly dismissed. The ET made an award of compensation in his favour.

On the respondent’s appeal to the Employment Appeal Tribunal (“EAT”), further authority was cited by the respondent on the issue whether the appellant had been dismissed by the relevant date. The EAT allowed the respondent’s appeal, on the footing that the effect of the respondent’s letter of 24 June 2014, stating that the appellant’s appeal under the contractual procedure had been successful, was that he should be treated as not having been dismissed at the time of the dismissal letter of 2 April 2014. According to the EAT, this meant that the appellant had not been dismissed at all by the time he issued his claim on 17 July 2014. He was therefore not entitled to claim for unfair dismissal. It seems that the EAT considered that in law it had been the appellant’s own choice not to return to work with the respondent, rather than having been dismissed.

The principal issue on this appeal concerns the first ground of decision by the ET, which was overturned by the EAT. In my view, however, a further point arises and ought also to be addressed. This concerns whether the appellant in fact also made a claim in his claim form that he had been constructively dismissed by 17 July 2014, by treating the employment relationship at an end by reason of the respondent’s failure in its letter of 24 June 2014 and thereafter to address properly and rectify matters in relation to the allegation of falsification of records which had been made against him. I deal with that at the end of my judgment.

In January 2008 the appellant commenced employment with the respondent as a care assistant working in the respondent’s nursing home. His contract of employment incorporated the respondent’s Employee Handbook. This included a section setting out a disciplinary procedure.

For the purposes of this appeal, the material part of the disciplinary procedure is that concerned with appeals by an employee in respect of disciplinary action taken against him. It provides as follows:

“Capability/Disciplinary Appeal Procedure

1.

You have the right to lodge an appeal in respect of any capability/disciplinary action taken against you.

2.

If you wish to exercise this right you should apply either verbally or in writing to the person indicated in your individual Statement of Main Terms of Employment.

3.

An appeal against procedure will normally be conducted by a member of staff not previously connected with the process so that an independent decision into the severity and appropriateness of the action taken can be made.

4.

If you are appealing on the grounds that you have not committed the offence then your appeal may take the form of a complete re-hearing and reappraisal of all matters so that the person who conducts the appeal can make an independent decision before deciding to grant or refuse the appeal.

5.

You may be accompanied at any stage of the appeal hearing by a fellow employee of your choice. The result of the appeal will be made known to you in writing, normally within five working days after the hearing.

6.

We reserve the right to allow third parties to chair any formal hearings.”

In March 2014 the appellant was charged with two disciplinary offences, said to amount to gross misconduct: (i) that he had been found asleep whilst on duty and (ii) that on the night of 21 March 2014 he had falsified the records of certain residents at the care home by pre-recording that they had slept through the night and had also failed to record the checks he had in fact made in respect of them at particular times during the night. The appellant’s defence to (i) was that he had been asleep during his break, and not during his working hours. His defence to (ii) was that this way of filling in the resident records was common at the nursing home and records in this form in this and similar cases had been signed off by senior managers without criticism.

There was a disciplinary hearing on 28 March 2014. After this the respondent sent the appellant its letter dated 2 April 2014 stating that both charges had been found to be proved, that they constituted gross misconduct, and dismissing him with immediate effect and without notice. In its letter, the respondent said that it would refer the appellant’s name to the relevant regulator in respect of care homes (the Disclosure and Barring Service, “DBS”) in relation to charge (ii), because residents had been put at risk by his actions in failing to maintain complete and accurate records. This was obviously a serious matter for the appellant.

The appellant indicated that he wished to appeal in relation to both charges against him, pursuant to the contractual appeal procedure. The appeal hearing took place on 8 May 2014 before a Mr Shah. By the letter from the respondent dated 24 June 2014, the respondent informed the appellant that his appeal had been allowed.

The letter was, however, in curious and unsatisfactory terms. It referred only to charge (i) and stated that the finding on the appeal was that the appellant had indeed been asleep during an unpaid break, as he had claimed, and that this was not in breach of any company rule or procedure. It did not refer at all to charge (ii), make any substituted finding in relation to that charge or say that the notification to the DBS regarding the appellant had been withdrawn. The letter stated that the appellant would be contacted as soon as possible to arrange a date for him to return to work. It concluded, “You have now exercised your right of appeal under our procedures and this decision is final”.

Mr Shah’s evidence to the ET, which it accepted, was that on investigation in respect of charge (ii) he came to the conclusion that the appellant’s conduct was not as serious as it had appeared at first, in that he had not ‘made up’ false entries in the residents’ records of events which did not in fact happen, as matters transpired, and that in light of the appellant’s good employment record it was not a matter which merited dismissal. However, Mr Shah did not tell the appellant this and, as I have said, it was not explained in the letter of 24 June 2014 by which the appellant’s appeal was allowed. The issues in relation to charge (ii) were simply left up in the air.

The appellant was not happy about this. He was also unhappy about the way in which the disciplinary procedure had been handled by the respondent. He maintained that Mr Shah had not been the appropriate person to deal with his appeal. In subsequent exchanges with the respondent, the appellant considered he did not receive satisfactory responses about these matters. He did not return to work, taking the view that he was not obliged to do so and could treat himself as having been dismissed.

The appellant commenced proceedings in the ET claiming unfair dismissal, wrongful dismissal and wrongful deduction of holiday pay due to him. At first, the respondent conceded that the appellant had been dismissed. However, when the proceedings came to a hearing the respondent was permitted to withdraw that concession and to argue instead that, by reason of the exercise by the appellant of his contractual right of appeal and the successful outcome of that appeal, there had been no valid or effective dismissal of the appellant.

In its decision, however, the ET dismissed this submission by the respondent. The ET was referred to the decision of this court in Roberts v West Coast Trains Ltd [2004] EWCA Civ 900; [2005] ICR 254 but distinguished it, holding at [10]-[11] that the contract terms governing the right of appeal in the present case were silent as to the consequences of a successful appeal and no relevant additional terms could be implied into the contract to say what the consequences should be. In particular, the ET held that the successful disciplinary appeal by the appellant did not have the effect of reviving his contract of employment so as to prevent him from being entitled to claim that he had been unfairly and wrongfully dismissed.

The ET also set out a further reason at [12] for finding that the appellant had been dismissed as at the date he filed his claim on 17 July 2014, based on the lack of clarity in the respondent’s letter of 24 June 2014. Allegation (ii), regarding the falsification of records, was the more serious one, but the letter did not address it and just left it hanging in the air. The ET said:

“If the respondent was going to revoke the [appellant’s] dismissal that more serious allegation needed to be addressed so that the [appellant] knew where he stood on it. I find that what the letter amounted to was an offer for the [appellant] to return to work on an unspecified basis and left the significant issue of the second allegation undealt with, particularly as to what its future effect on the [appellant] might be. It did not for example tell the [appellant] that the second allegation too had been dismissed or tell him that no [DBS] report had been made. There was no clarity as to the outcome of the appeal as regards the second allegation and as regards the basis on which the [appellant] was to return.”

Having held that the appellant had been dismissed as at 17 July 2014, the ET proceeded to find that the appellant’s claims were made out.

The ET made an order for, among other things, payment of the basic award and a compensatory award in relation to the unfair dismissal, but significantly reduced by reason of contributory fault on the part of the appellant in relation to his poor and inappropriate record-keeping and by a failure properly to mitigate his loss by seeking employment elsewhere. The amount of the compensatory award was increased by 20% pursuant to section 207A(2) of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRA”), because the ET found that the respondent had failed to comply in material respects with the ACAS Code of Practice on Disciplinary and Grievance Procedures (March 2015) (“the ACAS Code of Practice”) in its handling of the disciplinary procedure in the appellant’s case.

The respondent appealed against the ET’s decision that, notwithstanding the appellant’s successful disciplinary appeal, he had been dismissed by the respondent by the date of the appellant’s claim filed with the tribunal and also against its decision to increase the award made pursuant to section 207A(2) of TULRA. The appellant cross-appealed in relation to the deductions in relation to the monetary award in his favour for contributory fault and failure to mitigate.

On 1 June 2016 a hearing took place before the EAT (HHJ Richardson). This was treated as a full hearing of the respondent’s appeal, but was only a preliminary hearing in relation to the appellant’s cross-appeal, to see if there were reasonable grounds for that cross-appeal and if so to manage the cross-appeal. In the event it was agreed that the preliminary hearing of the cross-appeal should await the outcome of the hearing of the full appeal by the respondent. This was on the ground that, if the respondent succeeded on its appeal in establishing that there had been no relevant dismissal of the appellant, the cross-appeal would be redundant.

In its notice of appeal to the EAT, the respondent for the first time drew attention to and relied on the decision of the EAT (Langstaff J, President) in Salmon v Castlebeck Care (Teesdale) Ltd [2015] ICR 735 in support of its submission that the effect of the appellant’s successful appeal against his dismissal pursuant to the contractual procedure was that he could not be regarded as having been dismissed, with the result (so the respondent contended) that his claims for unfair dismissal and wrongful dismissal must fail. The respondent argued that Salmon showed that there was no requirement for the appeals procedure expressly to give the right to reinstate or impose any particular sanction: it was implicit in the terms of the employment contract governing disciplinary appeals that a successful appeal against dismissal would overturn the dismissal and revive the employment contract. HHJ Richardson accepted this argument and overturned the decision of the ET on the dismissal point. The judge concluded that the reasoning of the EAT in Salmon compelled him to come to the conclusion that by virtue of the contract provision and the appellant’s successful appeal, the appellant could not be regarded as having been dismissed by the respondent by the date the appellant filed his claim, 17 July 2014. Therefore, the respondent’s appeal in relation to the application of section 207A(2) of TULRA did not arise (though the judge indicated that it would not have succeeded) and the appellant’s cross-appeal was rendered otiose, and so was dismissed without any examination of the merits.

The appellant now appeals to this court in relation to the EAT’s ruling that there had been no relevant dismissal in this case by 17 July 2014, with permission granted by Elias LJ. The sole ground of appeal before us is that the EAT was wrong to reverse the ET in relation to its decision that there was no term implied in the contract of employment that a successful appeal would automatically revive a terminated contract, and was wrong to find in place of this that such a term was implied as being “inherent in the provision of an appeal.” Also, if he succeeds in his appeal, the appellant asks this court to grant permission to appeal in relation to his cross-appeal and to allow his appeal in relation to that, so that his cross-appeal can be remitted to the EAT for it to resume the preliminary hearing which it curtailed previously, and to consider whether there are reasonable grounds for the cross-appeal to proceed in the EAT.

The respondent has had notice of the appeal to this court but has chosen not to appear or to be represented. The court has had the benefit of very helpful submissions made by Mr Jackson, acting pro bono, for the appellant. In view of the absence of representation for the respondent, Mr Jackson sought very properly to draw our attention to points and arguments which might be raised in favour of the respondent, of which the court should be aware. In addition, after the hearing the court conducted further research itself and invited the parties to make written submissions in relation to additional authorities which it drew to their attention. Mr Jackson, for the appellant, did this. The respondent chose not to take advantage of this opportunity.

In my judgment, the appellant’s appeal in relation to the dismissal issue should be dismissed, so far as concerns the ground of appeal which has been put forward. In my view, so far as this aspect of the case is concerned, the EAT was right to follow and apply the approach in the Salmon case.

I consider that the short answer to this ground of appeal is that it is clearly implicit in a term in an employment contract conferring a contractual right to appeal against disciplinary action taking the form of dismissal that, if an appeal is lodged, pursued to its conclusion and is successful, the effect is that both employer and employee are bound to treat the employment relationship as having remained in existence throughout. This is not a matter of implying terms, but simply the meaning to be given to the words of the relevant contract, reading them objectively.

By including a contractual right of appeal in the employment contract, the employer makes available to the employee a facility to seek to overturn the disciplinary decision made against him and to have the dismissal treated as being of no effect. If the appeal is successful, then subject to any other contractual provisions, the employee is entitled to be treated as having never been dismissed, to be paid all back pay and to have the benefit of all other terms of his contract of employment through the relevant period and into the future. Those terms include the usual implied duty of an employer to maintain trust and confidence.

Conversely, if the employee exercises his right of appeal under the contract and does not withdraw the appeal before its conclusion, it is obvious on an objective basis that he is seeking to be restored to his employment and is asking and agreeing (if successful) to be treated as continuing to be employed under his contract of employment for the interim period since his previous dismissal and continuing into the future, so that that dismissal is treated as having no effect. It is not a reasonable or correct interpretation of the term conferring a right of appeal that a successful appeal results in the employee having an option whether to return to work or not.

If an appeal is brought pursuant to such a term and is successful, the employer is contractually bound to treat the previous dismissal as having no effect and the employee is bound in the same way. That is inherent in the very concept of an appeal in respect of a disciplinary dismissal.

An employment contract involves significant obligations on each side, and each party has a clear interest in knowing where they stand in relation to the contract and those obligations, as to whether they exist or not: see Geys v Société Générale, London Branch [2012] UKSC 63; [2013] 1 AC 523, [57]-[59] per Baroness Hale of Richmond JSC. If a contractual appeal is brought against a dismissal for disciplinary reasons, a reasonable person in the shoes of the employee will expect his full contractual rights and employment relationship to be restored without more as soon as he is notified that his appeal has been successful. He would not think that any further action by him was required, in terms of saying that he agrees that this is the effect. He has asked for that to happen by the very act of appealing. Similarly, a reasonable person in the shoes of the employer will understand that this is the effect of a successful appeal as soon as the parties are notified of the outcome of the appeal, without any question of a further round of debate about whether the employee is prepared to accept this or not. The reason is the same: the employee has already asked for that to be the outcome by the very act of appealing.

Mr Jackson pointed out that there may be other reasons why an employee might wish to exercise a right of appeal under a disciplinary procedure. Mr Jackson accepted that, of course, the employee may wish to get his job back, effectively by putting the clock back so that he is treated as not having been dismissed. But Mr Jackson says that the employee might simply wish to clear his name so as to improve his chances of getting other employment elsewhere in the jobs market, without wishing to go back to the original employer. Or the employee might regard it as expedient to bring a disciplinary appeal, as a way as protecting his right to full compensation for unfair dismissal, since if he does not he will by virtue of section 207A(3) of TULRA potentially be exposed to a penalty of a deduction of up to 25% of any monetary award due to him. This is because paragraph 26 of the ACAS Code of Practice states that “Where an employee feels that disciplinary action taken against them is wrong or unjust they should appeal against the decision”; and section 207A(3) says that a deduction may be made if the employee does not comply with such a code of practice. Therefore, says Mr Jackson, the mere fact that an employee commences an appeal under a contractual disciplinary procedure cannot be taken as some kind of offer by him to waive reliance on his dismissal. Nor can it be taken as an acceptance by him that he must take back his old job if his appeal is successful, agreeing thereby to treat this dismissal as if it had never happened.

However, in my view these other possible reasons why an employee might wish to invoke a contractual appeal process are collateral to the object of having such a process included in the contract of employment. That object is, that the employee is contractually entitled to ask the employer to reopen its previous decision to dismiss and to substitute a decision that there should not be a dismissal. Where a contractual appeal is brought, that is the obvious purpose of the appeal, judging the matter objectively. The fact that an employee might have other motives for seeking to appeal does not affect the interpretation of the contract.

There is strong authority which supports this analysis. In West Midlands Cooperative Society v Tipton [1986] AC 536, a case involving a contractual right of appeal against a decision to dismiss the employee, the employer dismissed the appellant employee with immediate effect by letter dated 25 February 1982 and thereafter, in breach of contract, refused to entertain an appeal. The House of Lords held that a refusal by an employer to allow an employee to appeal could be found to justify a finding of unfair dismissal in respect of the dismissal which had taken effect on 25 February 1982. Lord Bridge (with whom the other members of the appellate committee agreed) was explicit about the effect of a simple contractual term allowing for a disciplinary appeal, at p. 542:

“A preliminary point must be considered, which arose from questions put to counsel in the course of the argument. A possible view might be that when an employee whose contract entitles him to a domestic appeal is summarily dismissed, the dismissal does not take effect until the refusal to entertain an appeal or its ultimate rejection effectively confirms the dismissal. If this view were right, Mr. Lee [counsel for the employer] readily concedes that his case would be unarguable. [What is now section 97(1)(b) of the Employment Rights Act 1996] provides that "the effective date of termination" in relation to an employee whose contract of employment is terminated without notice, means "the date on which the termination takes effect." The application of this provision was considered by the Court of Appeal in J. Sainsbury Ltd v Savage [1981] ICR 1 where an employee had been summarily dismissed on 21 February 1978. His domestic appeal was heard on 30 May and dismissed by letter dated 1 June 1978. He could only establish that his total period of employment was sufficient to qualify him to make a claim of unfair dismissal if it included the period from 21 February to 1 June 1978. The Court of Appeal held that it did not. My noble and learned friend, Lord Brightman (then Brightman L.J.), quoted at p. 5 with approval the following passage from the judgment of the Employment Appeal Tribunal [1979] ICR 96, 102:

‘In our view, when a notice of immediate dismissal is given, the dismissal takes immediate effect. The provisions of this contract as to the appeal procedure continue to apply. If an appeal is entered, then the dismissed employee is to be treated as being 'suspended' without pay during the determination of his appeal, in the sense that if the appeal is successful then he is reinstated and he will receive full back pay for the period of the suspension. If the appeal is not successful and it is decided that the original decision of instant dismissal was right and is affirmed, then the dismissal takes effect on the original date. In our view, that is the date on which the termination takes effect for the purposes of the Act.’

I entirely agree with this reasoning in the absence of an express contractual provision to the contrary effect. In the instant case the effective date of termination of the appellant's contract of employment was 25 February 1982.”

This passage is obiter so far as concerns a case where the domestic appeal is successful. But it is powerful persuasive authority concerning the meaning and effect of an appeal provision in a contract of employment. In the contractual term in the case before us there was no express provision to disapply the usual interpretation of a term providing for a contractual right of appeal as stated by Lord Bridge.

Roberts v West Coast Trains Ltd [2004] EWCA Civ 900; [2005] ICR 254 concerned the dismissal of an employee as a disciplinary sanction for misconduct. His employment contract incorporated a disciplinary procedure which included a right of appeal to a superior official of the employer, against “the punishment to be inflicted and/or the interpretation of the facts of the case”; it was expressly provided that, on an appeal, the employer could substitute different punishments, including a demotion ([17]). The contract of employment therefore included an express provision which modified the usual effect of a contractual right of appeal, namely that if an appeal were successful the employee would be restored to the same employment relationship as before. The employee appealed under the contractual procedure against his dismissal and secured partial success, in that a sanction of demotion was substituted for the sanction of dismissal. However, the employee did not return to work and was eventually treated as having resigned. In the period after the employee was dismissed but before his disciplinary appeal was heard, he brought a claim in the ET for unfair dismissal, relying upon the original decision to dismiss him. His claim was dismissed by the ET on the basis that by the time that his claim came on for hearing, after his disciplinary appeal had been upheld, he could not be regarded as having been dismissed.

The employee’s appeal to the EAT was dismissed. As Mummery LJ explained in this court at [22]:

“It was held by the Appeal Tribunal, correctly in my view, that the decision on the internal appeal was not a matter of creating a new contract for a new position: it was a question of giving effect to a decision to apply a different sanction on appeal than had been applied at first instance. The sanction applied on appeal was one specified in the existing contract. Within that existing contract it was possible to demote Mr Roberts without terminating his existing contract and without making an offer to enter into another contract re-engaging him into a different position.”

The reasoning of the EAT in Roberts, in which Elias J (as he then was) presided ([2003] UKEAT 0312 03 2407),was expressly endorsed in strong terms by the Court of Appeal at [20], [22] and [24]. The judgment of Elias J repays study as a particularly clear analysis of the position where a contractual right of appeal is invoked by an employee. I set out paras. [13] to [18] in that judgment:

“13.

The Tribunal found in terms, as we have seen, that the demotion did not involve a termination of the original contract and that no new contract was entered into following the demotion. That, [counsel for the employer] submits, and we accept, was a conclusion that they were entitled to reach. Indeed, it is in accordance with the analysis in the Beckett case that the demotion was pursuant to a specific power given in the contract, as it was in BBC v Beckett [[1983] IRLR 43]. We do not say that the demotion can never in any circumstances give rise to a dismissal; no doubt there will be cases where it may have that result if there are significant changes in terms and conditions of employment, at least, if there is no contractual power to effect the demotion which is accepted by an employee. In addition, in some cases, as indeed in the Beckett case itself, the demotion may give grounds for the employee alleging constructive unfair dismissal. However, that argument was never advanced in this case.

14.

Mr Clement, for the Appellant, submits that the Savage and Beckett decisions can be distinguished on two principal grounds. First and foremost in this case, the Originating Application was lodged prior to the appeal being considered. Mr Clements submits that the question of whether or not there has been a dismissal must be considered as at the date when the Originating Application was lodged. At that date, there had been no reinstatement in any position and accordingly the dismissal of 6 November should stand. As Mr Clement accepts, the logic of this argument is that, even where the reinstatement is in fact complete, the employee will, nonetheless, be entitled to make a claim for unfair dismissal arising out of the original determination of the contact, provided that the Originating Application is lodged prior to the appeal being heard. In those circumstances, the employee will be entitled at one and the same time to pursue both the appeal and any claims he may have for unfair dismissal. Of course, the fact that he may be reinstated will affect the remedies that he would be entitled to receive.

15.

Plainly, if the employee, having lodged the appeal, withdraws from it, then the employer cannot seek to determine that appeal. In those circumstances, the employee can rely upon the original decision to dismiss. But, in our judgment, if the employee chooses to keep the appeal alive, then he takes the risk that if he is subsequently reinstated in employment, his unfair dismissal claim will be defeated, and that is so even if he lodges an Originating Application prior to the appeal being determined. We say this for a number of reasons. First, nothing in any of the authorities suggests that the rights are crystallised at the date when the Originating Application is lodged. On the contrary, it seems to us that cases such as the Tipton case, to which we have made reference, indicate that the date of termination should not be considered as a watershed so as to exclude matters arising thereafter. Similarly, it seems to us that there is no reason to treat the date of lodging the Originating Application as a watershed either. Take this specific example: in Tipton, the House of Lords held that an employer may be considered to have acted unfairly if he refuses to permit the employee to pursue a right of appeal. Is the Tribunal to be deprived of considering that evidence if, in order to protect his position, the employee has lodged an Originating Application immediately following the termination of his employment, and the employer's refusal to permit the appeal to be pursued is not made until after that date? In those circumstances, we have no doubt that the Tribunal would be entitled to have regard to that evidence, notwithstanding that the refusal of the employer would have, in that case, occurred after the Originating Application had been lodged. Similarly, in this case, it seems to us that the Tribunal must have regard to the effect of the successful appeal, albeit that the Originating Application had been lodged by that date.

16.

Second, the argument of Mr Clement would lead to certain arbitrary results. It may be quite fortuitous whether the appeal is determined before or after the Originating Application is lodged. Take this case; the original appeal was to be heard on 30 December, before the Originating Application was lodged. At the employee's instigation, the appeal was adjourned and, in the event, it was not heard until after the Originating Application was lodged. It does not seem to us to be satisfactory in principle that the employee in the one case should be entitled to pursue an unfair dismissal claim but not in the other.

17.

Finally, Mr Clements submitted that the principle in Sainsbury v Savage could apply only in circumstances where the employee could be said to have been successful in his appeal. Whether he has been successful, he submitted, would depend upon the grounds on which he mounted his appeal and the decision of the appeal body. If the appeal were wholly successful, then he accepted that the effect of reinstatement would be to cancel the original termination but he submitted that if it were not wholly successful then the original termination would stand. In this case, it was not wholly successful because of the sanctions that were imposed by the appeal body. Mr Clement accepted that the logic of this argument is that if the employee appeals against a dismissal on the grounds that he has committed no misconduct at all, and the appeal body reduces the dismissal but nonetheless imposes some sanction such as a warning, then, in those circumstances, the appeal could not be said to have been successful and the original dismissal would stand.

18.

For this proposition, he relies upon certain language in the authorities which do talk of the Appellant succeeding in his appeal and thereby being reinstated, for example Sainsbury v Savage itself. With respect, it seems to us that this argument cannot be right. First, it is a wholly imprecise principle for determining whether or not the original termination stands. It would involve a careful consideration of the precise grounds on which the appeal had been mounted and the effect of the decision of the appeal body. Second, and perhaps more importantly, the question of success or otherwise of an appeal has no bearing at all, it seems to us, on the statutory question, namely whether the contract of employment has been terminated. It is plain from the authorities that if an employee is reinstated, that is taken to have retrospective effect. The notion that it has retrospective effect if the employer is satisfied with the outcome of his appeal, but not if he remains dissatisfied, has no grounding in any principle or rationale whatsoever. Finally, this argument is, in any event, inconsistent with the authority of the Beckett case itself. Mr Clements submitted that, in that case, the Appellant was only appealing against the penalty that had been imposed upon him. He said that he was not appealing, as was the Appellant in this case, against the very finding that there had been any misconduct at all. But we think that cannot be right, as is clear from paragraph 8 of the Decision. For these reasons therefore, we are satisfied that the Tribunal properly considered itself bound by the authorities in Sainsbury v Savage and BBC v Beckett.”

As Elias J points out at [13], absent a term permitting the employer to reinstate the employee in a lesser post, an attempt to demote the employee as the result of an appeal may well give grounds for the employee to claim constructive dismissal as at the time the result of the appeal is announced. In my view, the same will be true if there is some feature of the employer’s handling of the appeal which constitutes a breach of another important term of the contract, including the duty to maintain trust and confidence.

Also, I agree with the view of Elias J at [15] that if the employee exercises his right to have a domestic appeal and “chooses to keep the appeal alive, then he takes the risk that if he is subsequently reinstated in employment, his unfair dismissal claim will be defeated, and that is so even if he lodges an Originating Application prior to the appeal being determined.” Elias J sets out cogent reasons for such a view. This court endorsed his analysis when the case went on appeal.

Before us, Mr Jackson emphasised that in this court Mummery LJ (in a judgment with which the other members of the court agreed) said at [28] that all the points he had dealt with turned on the particular contract in the case, and that little was to be gained from comparing different cases. In particular, Mummery LJ said that little was to be gained from comparing the case before him with the decisions in Savage and Beckett.

However, I think it is clear from the context that the point being made by Mummery LJ was that the contract in Roberts was unusual, in that – unlike the employment contracts in Savage and Beckett - it included an express power on the part of the employer to demote the employee in consequence of an appeal by him. Mummery LJ was not seeking to suggest that courts and tribunals should ignore relevant guidance to be gleaned from Tipton, Savage and Beckett in a more usual contractual setting.

Mr Jackson invited us to focus on para. [24] in the judgment of Mummery LJ. In that paragraph Mummery LJ began by stating that he agreed “with everything said” by Elias J. He added that he would simply highlight the following points:

“(1)

The employment contract of Mr Roberts included provisions in the staff handbook, in the Onboard Terms and Conditions and in the Procedure Agreement, which entitled West Coast Trains to impose a range of sanctions when disciplining an employee for misconduct. That range could be imposed either at first instance or on an appeal brought by an employee, who was dissatisfied by the first instance decision.

(2)

The range of sanction included dismissal. That was the sanction imposed at first instance and was effective at the date when Mr Roberts presented his complaint of unfair dismissal to the Tribunal.

(3)

The range also included reduction in grade or demotion. That was the decision ultimately taken on Mr Roberts's appeal.

(4)

The outcome of the appeal procedure initiated by Mr Roberts, and not withdrawn by him before the completion of the appeal procedure, was that the decision to dismiss should be replaced by a decision to demote.

(5)

The terms of Mr Roberts' employment contract permitted West Coast Trains to impose such a sanction in place of the earlier decision to dismiss, so that they could retrospectively achieve a position where he was not dismissed for the purposes of bringing an unfair dismissal claim.

(6)

It was within the terms of that contract that the appeal decision was taken. It was not necessary to effect an express reinstatement to the position of chef previously held by him, nor was it necessary to make an offer to him to enter into a new contract in order to continue Mr Roberts' contract of employment.”

It seems to me that in this passage Mummery LJ was going out of his way to emphasise that the outcome of the appeal in Roberts turned upon the special term in the employment contract, which permitted the employer to allow the appeal and demote the employee without that involving any breach of contract.

Mummery LJ said this at [25]-[27]:

“25.

In my view, there was a misunderstanding on the part of Mr Roberts in thinking that, when he received the notification of the appeal decision, he was being made an offer, which he could accept or reject. What was being notified to him, as was made clear in a later letter, was the continuation of the contract. He acted as if the contract was being continued when sick notes were submitted by him after the date of the appeal decision.

26.

In summary, the effect of the decision on the appeal was to revive the contract of employment terminated by the earlier decision to dismiss. That was something which Mr Roberts had agreed could be done by West Coast Trains, as employer, as part of the disciplinary process, including the appeal procedure which he himself had initiated.

27.

The fact that he had made a complaint of unfair dismissal to the Tribunal at a date when he was still in a state of dismissal, and before the appeal had been heard, does not affect the legal position. It is legally irrelevant. It would have been relevant, if he had never instituted an appeal and/or if he had instituted an appeal, he had withdrawn his appeal before a decision was made. In such circumstances, the initial dismissal would have stood. I am unable to accept the submission made by Mr Clement that somehow the date of the issue of the proceedings freezes the position on jurisdiction, and that it is not permissible for the Employment Tribunal to look at the real world as it existed at the date when the case came on before them at the hearing.”

Mummery LJ’s analysis in his judgment is contrary to the submission of Mr Jackson in this case. In our case, the appellant lodged an appeal and did not withdraw it before it was found to be successful, even though that happened after he had lodged his claim with the tribunal. According to the analysis of Mummery LJ, in line with the view of Elias J, the success of the appeal means that the appellant’s employment contract was treated as continuing down to that point, with no dismissal. In line with Mummery LJ’s indication in Roberts at [25], the success of the appeal in the present case did not constitute an offer which the appellant could accept or reject. Similarly, in my view, the appellant’s success on his appeal did not give rise to an option for him to continue with the employment or not. When his appeal was successful, the appellant was bound by the result to the same extent as the respondent.

Later authorities are to the same effect: McMaster v Antrim Borough Council [2010] NICA 45; [2011] IRLR 235, Northern Ireland Court of Appeal, and Ladbrokes Betting & Gaming Ltd v Ally [2006] UKEAT/0260/06; [2006] All ER (D) 77, Silber J. In McMaster, the Northern Ireland Court of Appeal held that if a contractual disciplinary appeal succeeds, the employee is reinstated with retrospective effect; it is not necessary to effect an express reinstatement to the position previously held by the employee, nor to make any offer to him to continue the contract of employment. Applying that analysis, the court found that the employee was entitled to say that he had not been dismissed at the time of his original dismissal, but only at a later date after his successful appeal. The result was that he was in time to bring his claim of unfair dismissal. In Ally, Silber J applied the same analysis to conclude that the employee who had brought a domestic appeal under a contractual appeal process was bound by the result of that appeal, which meant that his contract of employment was treated as having continued throughout and he could not seek to rely on the original dismissal. These decisions were in accordance with the guidance in the authorities referred to above and were decided correctly.

It follows that I consider that Langstaff J, sitting in the EAT in the Salmon case, was correct in his analysis of the position where there is an ordinary contractual right of appeal, without any express qualification of the kind referred to by Lord Bridge in Tipton. Langstaff J found that such an ordinary right of appeal was incorporated in the employment contract in that case on the facts: see [2015] ICR 735, at [20]. His statement at [28] that the effect of a successful appeal in such a case is now well established in law is amply justified, including by the authorities referred to above. They establish that, in the context of an ordinary employment contract and absent some express qualification, the meaning to be given to a provision setting out a contractual right of appeal against dismissal is that the employment relationship is revived, without more, so as to extinguish the original dismissal. The authorities indicate that this is the natural meaning of the words of the provision, used in that context.

It also follows that I consider that the decision of HHJ Richardson in the present case was correct, so far as concerns the ground of appeal.

However, that leaves the issue of the unsatisfactory nature of the respondent’s letter of 24 June 2014 by which the appeal was allowed. In my view, it is strongly arguable that it was unacceptable, and a breach of the respondent’s implied duty to maintain trust and confidence within the employment relationship, that the respondent failed by its decision to resolve the most serious of the allegations against the appellant. It is also strongly arguable that it was a breach of that term for the respondent not to withdraw any complaint it had made in respect of that matter to the DBS and to explain that it had done so to the appellant. The appellant asked the respondent to clarify the position, which the respondent failed to do. As appears from its decision at [13], quoted above, it seems to me that the ET considered that the respondent had acted in a wholly unacceptable way in these respects.

In accordance with the analysis above, in particular at [13] in the judgment of Elias J in Roberts, set out above, a serious breach of contract by an employer in its handling of a contractual appeal may justify the employee in treating himself as having been constructively dismissed. It is arguable that, on a fair reading of the appellant’s grounds of claim in this case, this was part of the case he was seeking to advance. If such an analysis is available and is correct, it means that the decision of the ET that the appellant had been dismissed by the time he made his claim on 17 July 2014 would be correct. It is also arguable that this is covered by the ET’s reasoning on the dismissal point and also that it was an aspect of the case which the EAT ought to have addressed when it made its decision.

Had the respondent participated in the appeal process, these points could have been put to its counsel. As it is, I think that the just course is to give directions to allow the respondent and the appellant to have an opportunity to make submissions whether this analysis, which is arguable, is available and is correct and whether the appeal ought in fact to be allowed on the basis of this alternative analysis. The issue is reasonably straightforward and clear, and it is proportionate at this stage for the resolution of this aspect of the case to proceed on the basis of written submissions.

For the reasons given above, I would dismiss the appeal in respect of the existing ground of appeal. However, I would invite the parties to make written submissions as to whether the appeal should be allowed for different reasons, as explained above.

I agree.

I also agree.

After handing down the main judgment, above, the court received written representations on behalf of the appellant in accordance with directions made by the court. The respondent chose not to make any representations in response. It is fair and in accordance with the overriding objective that the court should now proceed to a final determination of the appeal on the basis of the written submissions received.

The appellant drafted his claim as set out in the ET1 form himself, as a litigant in person. Accordingly, it is appropriate to read the ET1 to identify the substance of the matters being complained of, rather than expecting fine precision in the formulation and pleading of the claim. In my view, on a fair reading of the claim it included a complaint that the appellant had been unfairly dismissed by reason of the unsatisfactory way in which the respondent dealt with the outcome of the appeal, which led to the appellant refusing to return to work. That is to say, the claim included a claim that he had been constructively dismissed.

I also consider that on a fair reading of the ET’s decision, in particular at [12], set out above, it accepted that, if it were necessary to refer to it, that claim of constructive dismissal was made out. In my opinion, that reading of the decision is supported by the care with which the ET identified the issue before it as whether the appellant had been dismissed by 17 July 2014 (i.e. when the claim was presented, after the date of the alleged constructive dismissal), rather than simply saying that the issue was whether the appellant had been dismissed on 2 April 2014 (the date of the original purported dismissal).

The respondent’s notice of appeal to the EAT correctly identified at paras. 4 and 5 the two distinct bases for the ET’s decision on the jurisdiction point regarding whether there was a relevant dismissal by 17 July 2014, including that the ET had found that the letter of 24 June 2014 was not sufficiently clear and that the appellant had acted reasonably in refusing to return to work on the basis of it. This was the ruling which covered the claim of constructive dismissal. The notice of appeal addressed both these points. The respondent made the alternative submission that the ET’s finding that the appellant acted reasonably in refusing to return to work in light of the unsatisfactory nature of the letter of 24 June 2014 was perverse.

Unfortunately, the EAT in its judgment only addressed the first ground of decision by the ET on the jurisdiction point in a satisfactory way. In relation to the question of constructive dismissal, the alternative basis of reasoning of the ET on that point, I consider that the EAT’s reasoning at [38] to address it was inadequate. The EAT said that the letter of 24 June 2014 announcing the result of the appeal was clear; it was sufficient that the letter expressly stated that the earlier dismissal decision was revoked and that the appellant was entitled to start work again. I respectfully disagree. The letter was unclear and failed properly to deal with ground (ii) of the grounds for dismissal, as explained above. It was not sufficient for the letter simply to say that the earlier decision was revoked and that the appellant was entitled to start work again. In my judgment, by leaving the issues in relation to ground (ii) completely up in the air as it did, the respondent acted in breach of the implied duty to maintain trust and confidence in the employment relationship and in consequence the appellant was entitled not to return to work and to treat himself as constructively dismissed in the way he did. There was no error of law in relation to the ET’s determination that there was a dismissal prior to 17 July 2014 on this basis. The EAT should have dismissed the respondent’s appeal in relation to that aspect of the ET’s decision.

Accordingly, I would allow the appellant’s appeal on the basis of this alternative analysis, as foreshadowed in the main judgment above. The respondent has been given a fair opportunity to deal with this issue and it is just and appropriate to give the appellant permission to rely upon this as part of his grounds of appeal in this court. The ET was right to find that it had jurisdiction to determine the appellant’s claim for unfair dismissal. In consequence of allowing the appeal, the appellant should also be granted permission to appeal to this court in relation to his cross-appeal in the EAT, which was dismissed by the EAT on the basis that it held that he had not been dismissed by the respondent. The appellant’s appeal in relation to this should also be allowed and the case remitted to the EAT to consider whether there are reasonable grounds for the cross-appeal to proceed in the EAT.

Since the respondent’s second ground of appeal in the EAT, regarding the effect of section 207A(2) of TULRA, was considered by HHJ Richardson and rejected by him for what appear to me to be sound reasons, and the respondent has not suggested the contrary on this appeal, I would simply substitute an order in relation to the respondent’s appeal to the EAT that the whole of that appeal is dismissed. I think it would involve disproportionate cost and tribunal time to allow the respondent to seek to raise further arguments in the EAT regarding the ET’s decision in relation to the application of section 207A(2) of TULRA.

I agree.

I also agree.