Lancaster & Duke Ltd v Wileman, Court of Appeal - United Kingdom Employment Appeal Tribunal, July 04, 2018,  UKEAT 0256_17_0407
|Resolution Date:||July 04, 2018|
|Issuing Organization:||United Kingdom Employment Appeal Tribunal|
|Actores:||Lancaster & Duke Ltd v Wileman|
Appeal No. UKEAT/0256/17/LA
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE
At the Tribunal
On 27 April 2018
Judgment handed down on 4 July 2018
HER HONOUR JUDGE EADY QC
LANCASTER & DUKE LIMITED APPELLANT
MS V WILEMAN RESPONDENT
Transcript of Proceedings
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JURISDICTIONAL POINTS - Claim in time and effective date of termination
UNFAIR DISMISSAL - Polkey deduction
Effective date of termination - application of section 86(6) Employment Rights Act 1996
Polkey reduction - section 123(1) Employment Rights Act 1996
The Claimant had been summarily dismissed in circumstances that meant that she had just short of the necessary two years' qualifying service to bring a claim of unfair dismissal. She argued that the deeming provision under section 97(2) Employment Rights Act 1996 meant her length of service was extended by the statutory minimum notice period provided by section 86(1), which would mean that she had the requisite service. The ET agreed, rejecting the Respondent's argument that the Claimant's right to rely on her statutory minimum notice entitlement was displaced by virtue of section 86(6), which allowed that the section did not affect an employer's right to dismiss summarily by reason of an employee's conduct. Going on to determine the merits of the Claimant's complaint, the ET upheld the claim of unfair dismissal and declined to make any Polkey reduction, referring to the fact that it had found the dismissal to have been substantively, not merely procedurally, unfair. The Respondent appealed against the ET's Judgment on both the qualifying service and the Polkey reduction points.
Held: allowing the appeal
The qualifying service point:
In allowing for the determination of the effective date of termination to be extended by the statutory minimum notice period, section 97(2) Employment Rights Act 1996 referred to ``the notice required by section 86'' and thus incorporated the entirety of that section, including subsection (6). That meant the deeming provision was subject to the employer's right to give no notice in the circumstances allowed by section 86(6) and the ET had been wrong to hold otherwise. The question was whether this was a material error, given the ET's findings in this case. The ET had made no express finding that the Claimant had been guilty of gross misconduct such as would entitle the Respondent to summarily terminate her contract. It had, however, only been concerned with the questions arising on the Claimant's claim of unfair dismissal and its conclusion on the question raised by section 86(6) could not be assumed and the issue would need to be remitted for determination.
The Polkey point:
As for the ET's refusal to make a Polkey reduction, it had expressly stated that no question of such a reduction arose given it had found the dismissal to have been ``substantively unfair''. That was contrary to the approach laid down in cases such as Lambe v 186K Ltd  ICR 307 CA and W M Morrisons Supermarket plc v Kessab UKEAT/0034/13 and suggested the ET had wrongly limited its approach to the question whether there should be a just and equitable reduction in compensation. This was also a matter that would need to be remitted.
HER HONOUR JUDGE EADY QC
The appeal in this matter raises two questions: first, whether an employee who is summarily dismissed can nevertheless claim a statutory extension of the notice period under section 86(6) Employment Rights Act 1996 (``ERA'') (``the qualifying service point''); second, whether a section 123(1) ERA ``Polkey'' reduction (see Polkey v A E Dayton Services Ltd  1 AC 344) is inapplicable where a dismissal is found to be substantively unfair (``the Polkey point'').
In giving this Judgment, I refer to the parties as the Claimant and Respondent, as below. This is the Full Hearing of the Respondent's appeal from a Reserved Judgment of the Leicester Employment Tribunal (Employment Judge Clark, sitting alone on 25 May 2017, with a day for deliberations in chambers on 16 June 2017; ``the ET''), sent to the parties on 15 July 2017. The Claimant was represented then, as now, by Mr Bidnell-Edwards of counsel. Before the ET, the Respondent appeared by one of its directors (Mr Weaver) but is now represented by Mr Caiden of counsel. The ET upheld the Claimant's claim of unfair dismissal, relevantly finding that the effective date of termination of her employment, for the purposes of the ERA, was 27 September 2016. It went on to make basic and compensatory awards, subject to a 25% reduction in respect of the Claimant's conduct, but declined to make a Polkey reduction on the basis that this was inapplicable in the circumstances of the case.
The Respondent is a small employment agency business, operated by two directors (husband and wife) with three other employees. The Claimant had been one of those other employees, having started her employment with the Respondent as a recruitment consultant on 22 September 2014.
On successfully completing her probationary period, the Claimant was given the title recruitment manager. As the ET found, the Claimant's experience enabled her to fulfil her role in a competent manner, contrasting with the management style of Mr Weaver, one of the Respondent's directors, which the ET described sometimes bordering on ``feckless''. This created a challenging relationship between the two. That said, the Claimant was a productive worker who made money for the business. Although the Respondent claimed she had to be spoken to on several occasions about what was said to have been her ``offensive behaviour'', the ET was satisfied that was not how the Respondent characterised the Claimant's conduct at the time and noted there had been no formal action taken against her; indeed, the Respondent's contemporaneous assessment of the Claimant's contribution had been extremely positive.
The ET did, however, accept there were aspects of the Claimant's manner in dealing with others that could give rise to difficulties, observing:
``5.10 ... the complaints now levelled at the claimant ... have taken on a new light in hindsight following the decision to terminate the claimant's employment. The employer's reference to various ``reprimands'' and ``warnings'' are also retrospective descriptions of what I find was at best no more than passing discussions and, in some cases, I cannot be satisfied that discussion on the issues now referred to in fact took place ... However, that is not to say that there were not aspects of the claimant's personality and demeanour that could give rise to issues in the workplace generally and particularly in respect of her relationship with Mr Weaver. I have seen complaints from third parties, such as the Respondent's landlord ... who emailed Mr [Weaver] on 9 August 2016 complaining about the claimant's rude attitude to one of his staff. I have seen an email from Mr Paine, who was employed for a matter of days in August 2016 who would describe her as ``quite toxic'' and ``behaving like a playground bully'', albeit not until after he was contacted after the claimant's dismissal ... I had also heard the evidence of the respondent's witnesses. Each of them sets out their own experience of the claimant's demeanour in the workplace. It is not insignificant that a distinction was drawn by the other employees between the claimant's demeanour in work and out of work because the claimant was friends with both other employees and they continued to meet socially even after her dismissal. I find it highly likely that the claimant's work ethic (something for which she is otherwise praised) and experience in this industry is of a type that could come across as potentially abrasive in certain situations and is probably one aspect of why she was so good at the job she did. Nevertheless, that could leave her open to being perceived as rude and demanding. I am also satisfied that her experience and work ethic would lead to frustration when she felt systems of work needed to be challenged but such changes were quashed by the directors. Mr Weaver recalled how he and the claimant had clashed over work issues and she had said things to him in a raised tone ending with outbursts such as ``because it's your fucking business''. The claimant accepted in evidence that towards the end of her time with the respondent she was aware Mr Weaver ``had issues with her''.''
More specifically, the ET noted there had been a heated exchange between the Claimant and Mr Weaver on 25 August 2016, during which the Claimant said she was looking for another job and Mr Weaver responded by suggesting that ``maybe we should be looking for an exit strategy as this has to be the last time, we cannot continue like this'' (although the ET rejected the Respondent's suggestion that this had constituted a ``final warning'').
The Claimant had continued to work for the Respondent for a further four weeks or so, during which time, another employee, Mrs Thomas, resigned. Mrs Thomas was friendly with the Claimant and the two had spoken about Mrs Thomas' future with the Respondent (and the possibility that she might leave) in a personal context. When Mrs Thomas handed in her notice, she referred to her conversation with the Claimant and this triggered a discussion between the Weavers and the other two employees about the Claimant's future, which led to the decision that the Claimant should be summarily dismissed for gross misconduct. This was communicated to the Claimant by Mr Weaver in a telephone conversation on 20 September 2016 (confirmed by email on the same day), in which he said that, as she had less than two years' service, she was only entitled to one week's notice. No process was carried out before the Claimant's dismissal and she was not given any right of...
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