Appeals against dismissal

That document will usually be the employer's internal disciplinary procedure, which may or may not be contractual. If that procedure is incorporated into the employee's contract of employment, and the employer does not carry it out, then the employee may bring an action for wrongful dismissal against the employer in a civil court claiming an injunction or damages (see our Guidance Note in Wrongful dismissal ).

Code of Practice

The 1977 ACAS Code of Practice No.1: Disciplinary practice and procedures in employment ("the Code of Practice") recommends that disciplinary procedures (whether they are contractual or not) should "provide a right of appeal and specify the procedure to be followed" (para. 10(k)). The reason why it contains that recommendation is "so that decisions taken in haste may be considered at leisure" (Farnell Instruments Ltd v Lord). The Code of Practice also recommends that an employee should "be told of any right of appeal, how to make it and to whom" when he or she is given written details of any disciplinary action taken against him or her (para. 13).

Grievance procedures are sometimes used for dealing with disciplinary appeals but, since disciplinary issues are in general best resolved within the organisation and need to be dealt with more speedily than others, it is normally appropriate to keep the two kinds of procedure separate. The external stages of a grievance procedure may, however, be the appropriate machinery for dealing with appeals against disciplinary action where a final decision within the organisation is contested, or where the matter becomes a collective issue between management and a trade union (para. 16 of the Code of Practice). Independent arbitration is also sometimes an appropriate means of resolving disciplinary issues. Where the parties concerned agree, it may constitute the final stage of procedure (para. 17).

An employer's failure to observe any of the Code of Practice's provisions does not of itself make the employer liable to any legal proceedings (s.207(1) of the Trade Union and Labour Relations (Consolidation) Act 1992). However, the Code of Practice is admissible in evidence in any proceedings before an industrial tribunal; and any provision of the Code of Practice which appears to the tribunal to be relevant to any question arising in the proceedings must be taken into account in determining that question (s.207(2)).

The Code of Practice applies only to disciplinary dismissals, but those include dismissals for both misconduct and incompetence. Non-compliance with the Code of Practice does not necessarily make such a dismissal unfair, but a failure to follow a procedure prescribed in the Code of Practice (including an internal appeals procedure) may lead to the conclusion that a disciplinary dismissal was unfair which, if that procedure had been followed, would have been held to have been fair (W Devis & Sons Ltd v Atkins).

Absence of right

The absence of an internal appeals procedure does not in itself make a dismissal unfair: it is just one of the many factors to be considered in determining whether the dismissal was fair or unfair (Shannon v Michelin (Belfast) Ltd). In Farnell Instruments Ltd v Lord, the EAT said: "The right of an employee to bring an appeal is an important matter in industrial relations. The absence of it does not necessarily lead to a finding that the dismissal was unfair, but it may do. It will depend on the circumstances."

The EAT went on to hold that, in the case of an employer with 750 employees, an industrial tribunal was entitled to take the view that the absence of an internal appeals procedure was bad industrial relations practice and contrary to the Code of Practice. Further, the employer's grievance procedure was no substitute. On the other hand, in the case of a small family company, the lack of a right of appeal from a decision to dismiss made by the senior director does not constitute a breach of the Code of Practice. One would expect such a decision to be made by the senior director, and it would not be practicable to provide any right of appeal (Tiptools Ltd v Curtis).

In Whitbread & Co plc v Mills, the EAT commented that, even though an employee has no contractual right of appeal, it may nevertheless be reasonable for the employer to arrange some form of appeal. In Shannon, however, the Northern Ireland Court of Appeal held that an employer without an internal appeals procedure could not be said to be unreasonable in failing to create some ad hoc appeal in the absence of agreement between the employer and the employee's trade union.

According to the Northern Ireland Court of Appeal also, it is never open to an industrial tribunal to find that a dismissal by reason of redundancy was unfair merely because the employee was not given a right of appeal against his or her selection for redundancy (Robinson and others v Ulster Carpet Mills Ltd).

Nature of right

In Vauxhall Motors Ltd v Ghafoor, the EAT said: "The right of appeal is the right of the individual. Without his express agreement he should not be deprived of it. The employer cannot wash his hands of the duty to provide an appeal on the basis of procedure which in fact can deprive the employee of an appeal without his case being heard." Under the procedure in question, if an employee wished to appeal and he or she was a trade union member, his or her case was considered by the union convenor. If the convenor did not consider the matter suitable for an appeal, then no appeal could be made. It was not a question of whether the union would support the appeal: the right of appeal ceased once the convenor had rejected the case. The EAT did not consider the convenor's decision to be an adequate substitute.

Following Ghafoor, Vauxhall agreed a change in its internal appeals procedure. There is now an absolute right of first appeal, and a further avenue of appeal if the union registers a failure to agree with the decision made on the first appeal. In Lalji v Vauxhall Motors Ltd, the EAT rejected a submission that each and every stage of appeal must be granted as of right to the employee. It held that Vauxhall's new procedure, providing for a screening process for second appeals, was not procedurally flawed.

In Blundell v Christie Hospital NHS Trust, an employee had a second right of appeal to her employer's board and the board had a discretion whether or not to hear her appeal. She therefore also had the right to have the board exercise its discretion, and to do so bona fide and on reasonable grounds, held the EAT. In fact, the board never did exercise its discretion. Two of its members purported to exercise its discretion on its behalf, and did so on mistaken grounds. They decided to refuse to hear the appeal. The board then purported to ratify that decision, but the EAT held that the concept of ratification is part of the law of agency and is not appropriate to a quasi-judicial decision. Had the board rescinded the decision and exercised its discretion anew and in good faith, that would have been, on the face of it, a valid and proper decision either to hear the appeal or to refuse to hear it.

Where a contractual appeals procedure does not specifically provide for appeals to be heard within a defined space of time, it may be necessary - in order to give efficacy to the exercise of the right of appeal - to imply a term that appeals will be determined expeditiously (London Borough of Brent v Hayes).

RELEVANCE OF APPEALS

In the context of a complaint of unfair dismissal, the exercise of a right of appeal against dismissal may be relevant to one or more of the following three questions:

Effective date of termination

Section 97(1)(b) of the ERA provides that the EDT, in relation to an employee whose contract of employment is terminated by the employer without notice, means "the date on which the termination takes effect". The employee must generally have been continuously employed for a period of not less than two years ending with that date in order to be eligible to complain of unfair dismissal to an industrial tribunal (s.108(1) of the ERA).

Where an employee who has a right of appeal against dismissal is summarily dismissed, and he or she exercises that right but the appeal is unsuccessful, the question may arise whether the appeal had the effect of suspending the dismissal and keeping the contract of employment alive. If it did have that effect, then the EDT within the meaning of s.97(1)(b) would be the date on which the appeal was finally rejected. If, however, the dismissal was effective immediately but subject to review, then the EDT would be the date of the original dismissal. The answer to the question depends on the correct interpretation of the employer's internal disciplinary procedure.

In the leading case of Savage v J Sainsbury Ltd, the employer's procedure provided that a summarily dismissed employee would be "suspended" without pay pending the determination of any appeal against dismissal. The Court of Appeal held that this meant that, if the appeal was wholly successful, the employee would be reinstated and would receive full backpay for the period of the suspension. But if the appeal was unsuccessful the dismissal would take effect on the original date, and that date would be the EDT.

Lord Justice Brightman said: "... if an employee is dismissed on 1 January on the terms that he then ceases to have the right to work under the contract of employment, and ... the employer ceases likewise to be under an obligation to pay the employee, the contract of employment is at an end ... the contract of employment is saved if the appeal succeeds, because the employee is reinstated with full backpay. But if the appeal fails, then the inevitable result is that the employee is not only deprived of his right to work as from 1 January, but also of his right to remuneration from that date. If he has had no right to work after 1 January and no right to be paid after 1 January, the contract of employment must have been determined as from 1 January."

In West Midlands Co-operative Society Ltd v Tipton, the House of Lords agreed with that reasoning unless the contract of employment expressly provided to the contrary. In the absence of an express contractual provision to the contrary, it is implicit in every employee's contract of employment that, if he or she is dismissed and appeals against the decision to dismiss him or her, the intervening period has to be treated as one of suspension without pay and the final decision of the appeal process relates back to the date on which the purported dismissal was effected. If the appeal is successful, the employee is reinstated. If it is unsuccessful, he or she is deemed to have been dismissed on the original date (Howgate v Fane Acoustics Ltd).

In National Heart and Chest Hospitals Board of Governors v Nambiar, the body which heard an employee's appeal against summary dismissal recommended that the appeal should be "upheld" but that, rather than reinstate the employee, the employer should "seek every opportunity to employ [him] in a suitable alternative capacity". The employer accepted those recommendations, with the result that the employee was paid the arrears of salary due to him and continued to receive his former salary whilst suitable alternative employment was sought for him. He then insisted on being reinstated, and so the employer stopped his salary.

The EAT held that the EDT was the date of the original dismissal. The employee's right to work in his former employment was not restored, and his contractual right to the payments that he received may have been questionable. It seemed probable that his continuity of employment was preserved whilst he continued to be paid, but the dismissal still stood. The correctness of the decision to dismiss was confirmed by the appellate body and its recommendation, accepted by the employer, was merely that the effects of that decision should be mitigated, if possible, by an attempt to find suitable alternative employment for the employee. There was no special contractual provision saving the contract of employment in any fuller sense pending the determination of the appeal.

Whether there was such a provision or not, the fact that an employer was not contractually entitled to dismiss an employee summarily does not alter the EDT if the employer had clearly communicated to the employee, in terms which could bear no other meaning, that it had decided to dismiss him or her with immediate effect. However, the employee may still bring an action for wrongful dismissal (Batchelor v British Railways Board).

In Hatch v Sun Life Assurance Society plc, an employee received one month's notice of dismissal on 27 February. He indicated that he wished to appeal against the decision to dismiss him on 1 March, but the appeal was not determined until 14 July. His contract of employment provided that, if any appeal against dismissal had not been determined by the date on which he was due to leave, he would be suspended on full pay. That did not happen, however, and an industrial tribunal concluded that the EDT was 27 March.

The EAT was unable to detect any error of law in the tribunal's decision. If the employer had suspended the employee on full pay pending the determination of the appeal, then the EDT would have been 14 July. But that did not happen, probably because neither party realised that the relevant contractual provision existed. Had the employee been aware of it, and insisted on its performance, then, if the employer had indicated a refusal to do so, it would have been in repudiatory breach of contract and the contract would have continued until the employee accepted the repudiation.

In British Broadcasting Corporation v Beckett, the EAT had to consider a case where an employee's appeal against dismissal was partially successful. The person who heard the appeal decided that the employee should be removed from his present post but that he should be offered another job, which the employee rejected. The EAT held that the appellate decision amounted to the imposition of an alternative penalty, namely downgrading, and that the employer had not dismissed the employee. The EAT was unable to accept that the original dismissal stood but that the employee was made an offer of re-engagement, under a new contract, which he was entitled to reject.

It was necessary to bear in mind the context in which the offer was made: the employee had appealed in accordance with an agreed system of appeals; and the employer's disciplinary procedures laid down certain prescribed penalties, including downgrading. Although the offer did not refer to downgrading, the only sensible construction to be put on it was that the employee was being offered the chance to continue in his employment with the employer but in a different post. In different circumstances, an industrial tribunal might find that the employee was offered re-engagement, in which case the EDT would be the date of the original dismissal.

If an employee's appeal against dismissal is successful, then not only is he or she reinstated but the dismissal is cancelled and there is no break in continuity of employment. It is not a case of termination of one contract, a period of limbo, and then a fresh contract being entered into (Howgate).

In Pearce v Eastern Electricity Board, a summarily dismissed employee complained of unfair dismissal to an industrial tribunal before his appeal against dismissal was heard and determined. That appeal was successful to the extent that he was reinstated, but he was not awarded backpay for the period between the date of the dismissal and the date of his reinstatement. He therefore pursued his complaint of unfair dismissal. But the tribunal decided that it had no jurisdiction to hear it, because the employee had not been dismissed. The EAT agreed. The effect of the successful appeal had been to cancel the dismissal with retrospective effect.

The effect of the EAT's decision in Pearce is that the employee was worse off than he would have been if his appeal had been unsuccessful and the tribunal had upheld his complaint and made an order for reinstatement. Section 114(2)(a) of the ERA provides that, on making such an order, an industrial tribunal must specify "any amount payable by the employer in respect of any benefit which the complainant might reasonably be expected to have had but for the dismissal (including arrears of pay) for the period between the date of termination of employment and the date of reinstatement".

Claim in time

Section 111(2) of the ERA provides that an industrial tribunal "shall not consider" a complaint of unfair dismissal "unless it is presented to the tribunal -

(a)before the end of the period of three months beginning with the effective date of termination, or

(b)within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months."

If a dismissed employee were to present a complaint of unfair dismissal while at the same time pursuing an appeal against dismissal, that might be interpreted as prejudging the outcome of the appeal. It might also alienate those responsible for conducting the appeal and thereby prejudice the fair hearing of the appeal. Despite that, the mere fact that there is an appeal against dismissal pending, by itself, is not sufficient to justify a finding of fact that it was "not reasonably practicable" to present a complaint of unfair dismissal within the period prescribed by s.111(2)(a). There may, however, be cases where the special facts (additional to the bare fact that there is an internal appeal pending) may persuade an industrial tribunal, as a question of fact, that it was not reasonably practicable to complain within the time limit (Bodha v Hampshire Area Health Authority).

In Palmer and Saunders v Southend-on-Sea Borough Council, two employees were summarily dismissed on 8 April 1981 for having been convicted of theft. They exercised their right of appeal against dismissal, and the appeals were heard and rejected by the employer's appeals committee on 21 April 1981. The following day, the employer wrote to the employees' representative saying that its appeals committee would be prepared "to look at the matter again" if the employees' convictions were quashed. The Court of Appeal (Criminal Division) quashed the convictions on 19 February 1982 and, having had a request for their reinstatement turned down by the employer, the employees complained of unfair dismissal to an industrial tribunal. Their complaints were presented on 28 April 1982, more than a year after the EDT.

The tribunal found that the employer's internal appeals procedure had been exhausted in April 1981. On the question posed to it by s.111(2) of the ERA, the tribunal was satisfied that it had been reasonably practicable for the complaints to have been presented within the relevant three-month period. It therefore dismissed the complaints, and both the EAT and the Court of Appeal (Civil Division) held that its decision was not perverse.

Giving the judgment of the Court of Appeal, Lord Justice May said: "... to construe the words 'reasonably practicable' as the equivalent of 'reasonable' is to take a view too favourable to the employee. On the other hand, 'reasonably practicable' means more than merely what is reasonably capable physically of being done ... In the context in which the words are used in [the ERA] ... they mean something between these two. Perhaps to read the word 'practicable' as the equivalent of 'feasible' ... and to ask colloquially and untrammelled by too much legal logic - 'was it reasonably feasible to present the complaint to the industrial tribunal within the relevant three months?' - is the best approach to the correct application of [s.111(2) of the ERA]."

May LJ added: "... the answer to the relevant question is pre-eminently an issue of fact for the industrial tribunal ... Dependent upon the circumstances of the particular case, an industrial tribunal may wish to consider the manner in which and reason for which the employee was dismissed, including the extent to which, if at all, the employer's conciliatory appeals machinery has been used ..."

Fairness of dismissal

Section 98(1) of the ERA provides that, in determining whether the dismissal of an employee is fair or unfair, it is for the employer to show what was the principal or only reason for the dismissal and that that is a "potentially fair" reason. Section 98(4) provides:

Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) -

(a)depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b)shall be determined in accordance with equity and the substantial merits of the case.

The reason shown by the employer must be one which was in its mind at the time of dismissal, and cannot be a different reason for which the decision to dismiss the employee was confirmed at the conclusion of an appeal against dismissal. The time of confirmation cannot be regarded as being the time of dismissal (Monie v Coral Racing Ltd).

Where the employee was dismissed for reason A and evidence at the appeal invalidates that reason but demonstrates that a different reason B would justify dismissal, the original dismissal ought not to stand and the employer must look at the matter afresh in order to decide whether a later dismissal on the new evidence is appropriate (National Heart and Chest Hospitals Board of Governors v Nambiar). It is not open to the employer, from whatever motive, to substitute reason B for reason A if the latter, when given, was the real reason (Monie).

On the other hand, when applying s.98(4) of the ERA, an industrial tribunal may look at information that came to light in the course of the appeal if, at the conclusion of the appeal, the decision to dismiss the employee was confirmed for the reason given by the employer at the time of dismissal (Nambiar). The tribunal must exclude from its consideration anything that occurred after the final rejection of the appeal (Greenall Whitley plc v Carr). But there is nothing in the language of the ERA to exclude from consideration, when applying s.98(4), evidence relevant to show the strength or weakness of the real reason for dismissal which the employer had the opportunity to consider in the course of the appeal (West Midlands Co-operative Society Ltd v Tipton).

In Tipton, Lord Bridge said: "... there is nothing to mitigate the injustice to an employee which would result if he were unable to complain that his employer, though acting reasonably on the facts known to him when he summarily dismissed the employee, acted quite unreasonably in maintaining his decision to dismiss in the face of mitigating circumstances established in the course of the domestic appeal procedure which a reasonable employer would have treated as sufficient to excuse the employee's offence on which the employer's real reason for the dismissal depended."

The principle established in Tipton - that an industrial tribunal must take into account all the material which either was or ought to have been available to the employer at the end of the appeal process - should not, however, involve losing sight of the fundamental question whether the dismissal was fair or unfair (Post Office v Marney). In Whitbread & Co plc v Mills, the EAT said that, although that question must be considered as a single question, an industrial tribunal is bound in its deliberations to ask itself a number of subsidiary questions. These will probably include the following:

Where the employer did not carry out a contractual appeals procedure, the tribunal may not ask itself whether, if the employer had carried out the procedure, the employee would still have been dismissed. But, in judging whether what the employer did was reasonable, it is right to consider what a reasonable employer would have had in mind at the time of dismissal as the consequence of not carrying out the procedure. The employer might well act reasonably if it could reasonably have concluded, in the light of the circumstances known to it at the time of dismissal, that carrying out the procedure would be utterly useless (Polkey v A E Dayton Services Ltd). The same applies to a non-contractual appeals procedure (Boxall v Southside Rehabilitation Association Ltd).

The tribunal may ask itself whether the employee would still have been dismissed if the employer had carried out an internal appeals procedure when assessing the amount of any compensatory award payable to the employee. If the tribunal thinks there is a doubt whether or not the employee would still have been dismissed, then it should reduce the amount of any compensatory award by a percentage representing the chance that the employee would still have lost his or her job (Polkey).

DENIAL OF APPEAL

An industrial tribunal is entitled to find a dismissal to be unfair when the employer has refused to entertain an appeal to which the employee was contractually entitled and thereby denied the employee the opportunity of showing that, in all the circumstances, the employer's real reason for dismissing him or her could not reasonably be treated as sufficient (West Midlands Co-operative Society Ltd v Tipton).

In National Coal Board v Nash, the EAT said it was clear from the House of Lords' decision in Tipton that they were not limiting it to cases where the employee has a contractual right of appeal. Further, in London Borough of Brent v Hayes, the EAT held that the principles of their Lordships' decision were not limited to an employer's express refusal to allow an employee to exercise a right of appeal. Thus the employer's total failure to carry out an internal appeals procedure may also entitle an industrial tribunal to find that the dismissal was unfair, although it does not necessarily follow that the tribunal should do so (Whitbread & Co plc v Mills). Such a failure may be the result of a policy of deliberate inaction. It may also be due to an unreasonable delay which prevents the hearing of an appeal (Hayes).

There may be cases where, on the undisputed facts, the dismissal was inevitable, as for example where a trusted employee, before dismissal, was charged with, and pleaded guilty to, a serious offence of dishonesty committed in the course of his or her employment. In such a case the employer could reasonably refuse to entertain an appeal on the ground that it could not affect the outcome (Tipton).

In Boxall v Southside Rehabilitation Association Ltd, the general manager of a corporate charity, who was answerable only to the charity's board of unpaid, non-executive directors, was summarily dismissed for gross misconduct: having failed to provide regular financial reports, he deliberately obstructed an investigation into the charity's finances. He exercised his contractual right of appeal to the board but they refused to hear the appeal, on two grounds. First, they had deliberated the decision to dismiss him. Secondly, in the light of the extremely serious nature of his misconduct, they considered that to carry out the appeals procedure would make no difference to their decision. This was one of those rare cases where the employer could reasonably have concluded that hearing an appeal would be a pointless exercise (see Polkey above).

A final point to note is that clause 13 of the Employment Rights (Dispute Resolution) Bill (see the box on p.9) provides for the inclusion of a limited "supplementary award" in the compensation awarded to an unfairly dismissed employee whose employer prevented him or her from appealing against the dismissal under its internal appeals procedure.

CONDUCT OF APPEALS

The ACAS advisory handbook Discipline at work, published in 1987, recommends what an internal appeals procedure should contain (see the box on p.6) and how an appeal hearing should be conducted (see the box at right). The handbook is intended to complement the Code of Practice, but it is purely advisory and does not have the same status (see p.3 above).

Both a departure from an internal appeals procedure (whether it is contractual or not), unless the employee has agreed to it, and an appeal hearing which is conducted in breach of the rules of natural justice (see below) constitute procedural defects. An industrial tribunal is not bound to conclude that any such defect makes a dismissal unfair, but it is one of the factors to be taken into account by the tribunal when applying s.98(4) of the ERA. The weight to be attached to it will depend on the circumstances known to the employer at the time it dismissed the employee (Sillifant v Powell Duffryn Timber Ltd).

Where there is such a procedural defect, an industrial tribunal must ask itself whether the employer's procedure constituted a fair process; and the tribunal must find that the dismissal was unfair if the defect was of such seriousness that the procedure was not fair (that is, if it produced a procedure which was intrinsically unfair), or if the results taken overall were unfair (Fuller v Lloyds Bank plc).

Cutting short an appeal process is also a procedural defect (Rao v Civil Aviation Authority). In that case, the person who heard an employee's appeal against dismissal agreed to defer his determination of the appeal for 10 days to enable him to consider further evidence. The day after the hearing, he was told that the employee had complained of unfair dismissal to an industrial tribunal. He thought that the employee had prejudged the outcome of the appeal and that he had been used. Two days later, he wrote to the employee informing him that his appeal was rejected. The tribunal found that he acted unreasonably in going back on his agreement, but it concluded that the dismissal was fair. The EAT reversed the tribunal's decision, holding that the tribunal had been bound to decide that the dismissal was unfair.

A decision as to whether or not to adjourn an appeal process until after the employee's criminal trial has taken place is essentially a matter very much falling within the discretion of the person or body conducting the appeal. Where that person or body refused the employee's application for an adjournment, the industrial tribunal must ask itself whether that was within the band of reasonable conduct, or margin of appreciation, of a reasonable person or body conducting an appeal. It must set out the relevant factors which weigh on either side of the balance. In other words, it must look at the damage that could be done to the employer if the adjournment was granted, on the one hand, and the damage that might be done to the employee if it was refused on the other (Kent County Council v Evans).

Departures from procedure

It is impossible to say that, in following a collectively agreed appeals procedure, an employer is acting unreasonably, unless the procedure is inherently defective (see, for example, Vauxhall Motors Ltd v Ghafoor above). Conversely, it may be said that, in not following a collectively agreed appeals procedure, an employer is acting unreasonably (East Hertfordshire District Council v Boyten).

Similarly, an employer's failure to adhere to its own contractually enforceable appeals procedure does not inevitably require an industrial tribunal to conclude that a dismissal was unfair. The tribunal must consider whether the employee was thereby denied an opportunity of showing that the employer's real reason for dismissing him or her could not reasonably be treated as sufficient. It is irrelevant to that question to consider whether the employer would have acted differently if it had followed the procedure. On the other hand, it is relevant to consider whether the employer acted reasonably if, at the time of dismissal, it actually considered, or a reasonable employer would have considered, that to follow the procedure would in the circumstances of the case be futile (Westminster City Council v Cabaj).

In Cabaj, an employee was contractually entitled to have his appeal against dismissal determined by a panel consisting of three members. However, the panel which heard and rejected his appeal was made up of only two members. The Court of Appeal held that, although the employer had failed to perform its contractual obligations in that respect, that did not inevitably require an industrial tribunal to conclude that the dismissal was unfair. The Court remitted the case to a differently constituted industrial tribunal to consider whether the employer's failure to convene a panel comprising three members impeded the employee in demonstrating that the real reason for his dismissal was not sufficient, and the reasons (if any) why the employer decided to dismiss the employee without having followed its procedure.

The Court of Appeal also endorsed the general approach of the EAT in Post Office v Marney, that not every breach of an employee's contractual rights of appeal necessarily makes his or her dismissal unfair: it depends on whether, looked at overall (that is, taking into account both the defective appeal process and the earlier disciplinary hearing), the dismissal was unfair.

Once it is conceded that the disciplinary hearing was intrinsically a proper one which arrived at a conclusion that was proper (that is, the decision to dismiss the employee), the fact that one of the constituent parts of that process was not considered or reviewed during the appeal process does not involve the proposition that the dismissal was, as seen overall, unfair (Marney). On the other hand, in Byrne v BOC Ltd the EAT doubted whether there could ever be a combination of a somewhat defective disciplinary hearing and a somewhat defective appeal which overall amounted to a fair process.

The Court of Appeal's decision in Stoker v Lancashire County Council is consistent with its decision in Cabaj. In Stoker, only the first of three appeals to which an employee was contractually entitled took the form of a full rehearing. The second and third appeals ought also to have taken that form, but were in fact reviews of the decision to dismiss the employee. An industrial tribunal found that, procedurally, no reasonable employer could have been expected to do more for the employee. But the Court of Appeal held that the tribunal, by misinterpreting the contractual appeals procedure, had necessarily erred in law.

The tribunal had failed to consider whether the employer followed the appeals procedure incorporated into the employee's contract of employment. It should have addressed its mind to the fact that the employee was not accorded the rights of appeal to which he was contractually entitled, since it might be the view that a reasonable employer could be expected to comply with the full requirements of its own internal appeals procedure. Accordingly, the Court of Appeal remitted the case to a differently constituted industrial tribunal for a rehearing. It did not hold that the employer's departure from the procedure necessarily made the employee's dismissal unfair.

In Rank Xerox (UK) Ltd v Goodchild and others, the EAT held that an employer's refusal to allow employees to be represented at the hearing of their appeals against dismissal, in breach of their contractual rights to such representation, amounted to a substantial failure in procedure such as to make their dismissals unfair. That does not mean, however, that every denial of representation at an appeal hearing necessarily makes the dismissal unfair.

Rules of natural justice

It would be surprising to find that an appeal hearing conducted in accordance with Whitley Council procedures turned out to have been conducted in breach of the rules of natural justice (Khanum v Mid-Glamorgan Area Health Authority). As regards the conduct of an appeal by a line manager against his or her subordinate's decision to dismiss an employee, it would be difficult to show a breach of the rules of natural justice if the employee had been given an opportunity to deal with the case against him or her and had been heard (Rowe v Radio Rentals Ltd).

The failure of the person or body conducting an appeal against dismissal to allow the employee to challenge evidence which was obtained in the course of the appeal, and which was taken into account in determining the appeal, is also a clear breach of the rules of natural justice (Johnson v Entertainment (UK) Ltd). Further, that person or body should not without good reason refuse to produce witnesses whom the employee has asked to be called to give additional evidence (Johnson Matthey Metals Ltd v Harding). But a refusal or failure to produce witnesses whom the employee has asked to be called so that he or she can cross-examine them is not a breach of the rules of natural justice (Khanum).

In Rowe, the EAT said: "It is very important that internal appeals procedures run by commercial companies (which usually involve a consideration of the decision to dismiss by one person in line management by his superior) should not be cramped by legal requirements imposing impossible burdens on companies in the conduct of their personnel affairs."

The EAT added: "There may be some exceptional case ... in which the rule that justice must appear to be done might apply to the full extent that it applies to a judicial hearing. But, in general, it is inevitable that those involved in the original dismissal must be in daily contact with their superiors who will be responsible for deciding the appeal: therefore the appearance of total disconnection between the two cannot be achieved. Moreover, at the so-called appeal hearing (which in this and many other cases is of a very informal nature) the initial dismisser is very often required to give information as to the facts to the person hearing the appeal. It is therefore obvious that rules about total separation of functions and lack of contact between the appellate court and those involved in the original decision simply cannot be applied in the majority of cases."

It seemed to the EAT that the correct approach was not to force those who hear appeals "to become entramelled in the nets of legal procedure". So long as they act fairly and justly, their decisions should be supported. In Whitbread & Co plc v Mills, similarly, the EAT said "not every formality of legal or quasi-legal process is required during the disciplinary and appeals procedures." And in Royal Naval School v Hughes, the EAT held that natural justice, in this field, does not mean that the person or body hearing an appeal must be neutral, only that they act honestly.

On the other hand, the appeal process would be unfair if the person who conducted the appeal could properly be regarded as "a judge in his or her own cause". That would be a case of justice not being done, not merely of justice not appearing to have been done. The person conducting the appeal may be disqualified from doing so fairly if he or she was personally involved in the events that led to the dismissal or in the decision to dismiss, or if he or she was merely involved in the investigation. It is entirely possible that a person who investigates an alleged disciplinary offence may become so involved in the matter that it realistically becomes his or her cause, so as to disentitle him or her from being a person who can conduct a fair appeal from a decision made at the disciplinary hearing in which he or she played no part (Byrne v BOC Ltd).

In Byrne, the person who heard an employee's appeal against dismissal, for falsifying her overtime claims, personally played a significant part in investigating the allegation against her. He rechecked the claim forms completed by the employee against her time sheets, and recalculated the amount of overtime that she had overclaimed. Moreover, it was his calculation that was used when the allegation against the employee was put to her at the disciplinary hearing. He also consulted personnel to find out what the appropriate procedure and penalty would be before setting the date of the disciplinary hearing. In the view of the EAT, therefore, he was a judge in his own cause.

In Ferodo Caernarfon Ltd v Owen, an employee was deprived of the opportunity to have her appeal against dismissal heard objectively because the person who chaired the hearing had already been responsible for destroying her trust and confidence in her employer. A reasonable employer would have appreciated that fact and, given the employer's size and administrative resources, would have arranged for another member of management to chair the appeal hearing. Failure to do so made the dismissal unfair.

In Rowe, by contrast, there was no question of the person who heard an employee's appeal against dismissal having been a judge in his own cause. He was informed in advance of the decision to dismiss the employee by the person who made that decision, and had simply said that the employee should be suspended until his union had been informed. In Lalji v Vauxhall Motors Ltd, similarly, the EAT was satisfied that the person who chaired an employee's appeal against dismissal could not be described as a judge in his own cause: he had been involved in the initial investigation, but not at the stage where evidence was being gathered. Nor did the EAT think it a telling point against his conduct of the appeal that he did not adjourn the hearing before announcing his decision to reject the appeal.

If there is such an adjournment, which is to be recommended, then the person who made the decision to dismiss the employee should not remain behind with the person determining the appeal after the employee has left the room. That is plainly an irregularity and certainly to be deprecated. It offends against natural justice and all notions of proper procedure. But it does not necessarily make the dismissal unfair (Express Foods Group (International) Ltd v Putnam).

The industrial tribunal must, however, investigate and hear evidence about what happened when the two people in question were alone together, in order to satisfy itself that the employee suffered no injustice as a result and that the decision to reject the appeal was made solely by the person who conducted the appeal (Putnam). The tribunal must also give the employee an opportunity to cross-examine both people (Lawton v Park Cake Bakeries Ltd).

Finally, the concept of natural justice does not include the right of an employee personally to be present throughout the hearing of an appeal against dismissal at which he or she is represented (Pirelli General Cable Works Ltd v Murray). However, unless the employer's own contractually enforceable appeals procedure provides to the contrary, an employee has no right to legal or other representation at an appeal hearing. He or she is normally entitled to be accompanied only by a trade union representative or a fellow employee of his or her choice (para. 10(g) of the Code of Practice), who is entitled to be present simply as a companion and, possibly, an adviser rather than as an advocate entitled to address the person or body conducting the appeal on the employee's behalf.

EFFECT OF APPEALS

A fairly conducted appeal hearing is capable of "curing" procedural defects at the disciplinary hearing, so as retrospectively to make an otherwise unfair dismissal fair. Whether it does so or not depends on the degree of unfairness at the disciplinary hearing and the nature of the appeal hearing (Whitbread & Co plc v Mills).

Where the disciplinary hearing was seriously flawed, it is essential, if the appeal process is to be properly treated as establishing fairness overall, for it to be able to stand on its merits as conferring on the employee all the rights which the contract of employment is intended to protect, notably proper notice of the complaint and a full opportunity of stating the employee's case (Byrne v BOC Ltd). The appeal hearing must also be "of a comprehensive nature, in essence a rehearing and not a mere review" (Mills).

An appeal by way of a review of the decision to dismiss an employee could be fairly conducted and yet be inadequate to make good the deprivation which the employee suffered by being denied a proper disciplinary hearing. Accordingly, it is desirable that the industrial tribunal should in terms deal with the issue of whether or not the appeal hearing, as well as being fairly conducted, was "sufficiently comprehensive adequately to cure the deprivation of rights suffered at the disciplinary hearing" (Byrne). The question whether an appeal hearing amounts to a rehearing or a review is substantially a question of fact (Clark v Civil Aviation Authority).

In Clark, the decision to dismiss an employee was reached in breach of the rules of natural justice. She was not given a clear indication of either the allegation or the evidence against her, nor was she given an opportunity of being heard and making representations. In normal circumstances, that alone would have been sufficient to make the dismissal unfair. But the employee appealed, and the appeal rectified the earlier procedural defects. The employee in the end suffered no injustice because there was a full and proper hearing on appeal, in effect a rehearing, at which she had every opportunity of presenting her case and making her points.

In Sartor v P & O European Ferries (Felixstowe) Ltd, similarly, procedural defects at a disciplinary hearing which were sufficiently serious to make the decision to dismiss an employee unfair were cured by an opportunity to appeal. The employee had not been told the nature of the allegation against her before the disciplinary hearing, the conduct of which did not adhere to the employer's internal procedures. But the appeal took the form of a rehearing, and on that occasion there was no significant defect in the proceedings. By the time of the appeal hearing, the employee was well aware of the nature of the allegation against her and there had been time for her to prepare her defence. She also had the opportunity to call witnesses at the appeal hearing if she so wished. Accordingly, the disadvantage to which she had been put at the disciplinary hearing no longer applied at the appeal hearing.

FAILURE TO APPEAL

An employee who is dismissed and fails to appeal against the decision to dismiss him or her does not thereby acquiesce in his or her dismissal, so as to prevent him or her from complaining of unfair dismissal to an industrial tribunal. The failure to appeal may be of evidential value as an indication of the employee's attitude to his or her dismissal at the time, but no more can be read into it than that (Chrystie v Rolls-Royce (1971) Ltd).

Further, there is no obligation on an employee who is dismissed to exhaust an internal appeals procedure before complaining of unfair dismissal to an industrial tribunal. Nor is the employee's failure to appeal one of the circumstances which may be taken into account by the tribunal in determining whether the dismissal was fair or unfair. That question, if the employee chose not to appeal, has to be considered in the light of the circumstances obtaining at the time the decision to dismiss the employee was made (Hoover Ltd v Forde).

Where the tribunal finds that the dismissal was unfair, it cannot regard the employee's failure to appeal as something which contributed to the dismissal. If, however, the tribunal found that the decision to dismiss the employee might well have been reversed had he or she appealed from it, then - according to the EAT in Forde - it is arguable that the employee failed to mitigate his or her loss.

In William Muir (Bond 9) Ltd v Lamb, however, a different division of the EAT had great difficulty in accepting that reasoning. It seemed to be purely speculative to attempt to assess what would have happened in the event of an appeal being taken. The EAT said: "There are many imponderable factors. One is the manner in which the appeal is handled. Another is the person or persons to whom the appeal lies. In an industrial situation it may very often happen that an employee who is dismissed considers that there is no point in him following up the internal appeals procedure because he does not have confidence in the persons who would hear that appeal." It would therefore be quite wrong, in the EAT's view, to penalise an employee who has been unfairly dismissed by reducing his or her compensation because he or she did not follow through whatever internal appeals procedure may have existed.

In Lock v Connell Estate Agents, the EAT held that Lamb was to be preferred to Forde and that an employee's failure to exercise a right of appeal can never amount to a failure to mitigate his or her loss. The EAT said: "The employer has made up his mind to dismiss the employee ... If the decision was a careful and responsible one, then the prospect of it being reversed on appeal must be remote. The prospect may be even more remote in the unlikely event that the decision has been an irresponsible and hasty one; in that event, what possible confidence can the employee have in the integrity of the employer?"

The EAT's decision in Lock is, however, likely to be rendered somewhat academic by Parliament. Clause 13 of the Employment Rights (Dispute Resolution) Bill (see the box on p.9) provides for a limited reduction of the compensatory award component of compensation awarded to an unfairly dismissed employee who chose not to appeal against the dismissal under the employer's internal appeals procedure.

Appeals against dismissal: main points to note

Contents of appeals procedures

The ACAS advisory handbook Discipline at work recommends that an internal appeals procedure should:

Conduct of appeal hearings

The ACAS advisory handbook Discipline at work contains the following recommendations concerning the conduct of an appeal hearing.

Action before the hearing

The hearing

Action after a successful appeal

Internal appeals procedures and unfair dismissal awards

Clause 13 of the Employment Rights (Dispute Resolution) Bill¹ reads:

"After section 127 of the Employment Rights Act 1996 insert -

'127A. Internal appeal procedures

(1) Where in a case in which an award of compensation for unfair dismissal falls to be made under section 112(4) or 117(3)(a) the tribunal finds that -

(a) the employer provided a procedure for appealing against dismissal, and

(b) the complainant was, at the time of the dismissal or within a reasonable period afterwards, given written notice stating that the employer provided the procedure and including details of it, but

(c) the complainant did not appeal against the dismissal under the procedure (otherwise than because the employer prevented him from doing so),

the tribunal shall reduce the compensatory award included in the award of compensation for unfair dismissal by such amount (if any) as it considers just and equitable.

(2) Where in a case in which an award of compensation for unfair dismissal falls to be made under section 112(4) or 117(3)(a) the tribunal finds that -

(a) the employer provided a procedure for appealing against dismissal, but

(b) the employer prevented the complainant from appealing against the dismissal under the procedure,

the award of compensation for unfair dismissal shall include a supplementary award of such amount (if any) as the tribunal considers just and equitable.

(3) In determining the amount of a reduction under subsection (1) or a supplementary award under subsection (2) the tribunal shall have regard to all the circumstances of the case, including in particular the chances that an appeal under the procedure provided by the employer would have been successful.

(4) The amount of such a reduction or supplementary award shall not exceed the amount of two weeks' pay.'"

¹ See IRLB 577.

CASE LIST

Batchelor v British Railways Board [1987] IRLR 136

Blundell v Christie Hospital NHS Trust [1996] ICR 347

Bodha v Hampshire Area Health Authority [1982] ICR 200

Boxall v Southside Rehabilitation Association Ltd 27.11.96 EAT 1156/95

British Broadcasting Corporation v Beckett [1983] IRLR 43

Byrne v BOC Ltd [1992] IRLR 505

Chrystie v Rolls-Royce (1971) Ltd [1976] IRLR 336

Clark v Civil Aviation Authority [1991] IRLR 412

Devis (W) & Sons Ltd v Atkins [1977] IRLR 314

East Hertfordshire District Council v Boyten [1977] IRLR 347

Express Foods Group (International) Ltd v Putnam 29.7.92 EAT 189/91

Farnell Instruments Ltd v Lord 9.9.86 EAT 417/86

Ferodo Caernarfon Ltd v Owen 13.1.97 EAT 262/96

Fuller v Lloyds Bank plc [1991] IRLR 336

Greenall Whitley plc v Carr [1985] IRLR 289

Hatch v Sun Life Assurance Society plc 21.11.95 EAT 565/94

Hoover Ltd v Forde [1980] ICR 239

Howgate v Fane Acoustics Ltd [1981] IRLR 161

Johnson v Entertainment (UK) Ltd 21.12.92 EAT 568/90

Johnson Matthey Metals Ltd v Harding [1978] IRLR 248

Kent County Council v Evans 8.11.96 EAT 1035/95

Khanum v Mid-Glamorgan Area Health Authority [1978] IRLR 215

Lalji v Vauxhall Motors Ltd 24.5.96 EAT 1025/94

Lawton v Park Cake Bakeries Ltd 13.12.88 EAT 90/88

Lock v Connell Estate Agents [1994] IRLR 444

London Borough of Brent v Hayes 14.2.91 EAT 395/89

Monie v Coral Racing Ltd [1980] IRLR 464

National Coal Board v Nash 2.5.86 EAT 769/85

National Heart and Chest Hospitals Board of Governors v Nambiar [1981] IRLR 196

Palmer and Saunders v Southend-on-Sea Borough Council [1984] IRLR 119

Pearce v Eastern Electricity Board 6.2.86 EAT 726/85

Pirelli General Cable Works Ltd v Murray [1979] IRLR 191

Polkey v A E Dayton Services Ltd [1987] IRLR 503

Post Office v Marney [1990] IRLR 170

Rank Xerox (UK) Ltd v Goodchild and others [1979] IRLR 185

Rao v Civil Aviation Authority 12.6.90 EAT 31/89

Robinson and others v Ulster Carpet Mills Ltd [1991] IRLR 348

Rowe v Radio Rentals Ltd [1982] IRLR 177

Royal Naval School v Hughes [1979] IRLR 383

Sartor v P & O European Ferries (Felixstowe) Ltd [1992] IRLR 271

Savage v J Sainsbury Ltd [1980] IRLR 109

Shannon v Michelin (Belfast) Ltd [1981] IRLR 505

Sillifant v Powell Duffryn Timber Ltd [1983] IRLR 91

Stoker v Lancashire County Council [1992] IRLR 75

Tiptools Ltd v Curtis [1973] IRLR 276

Vauxhall Motors Ltd v Ghafoor [1993] ICR 376

West Midlands Co-operative Society Ltd v Tipton [1986] IRLR 112

Westminster City Council v Cabaj [1996] IRLR 399

Whitbread & Co plc v Mills [1988] IRLR 501

William Muir (Bond 9) Ltd v Lamb [1985] IRLR 95