Sheridan v British Telecommunications Plc

An Employment Appeal Tribunal may interfere with an Industrial Tribunal’s decision only on a question of law. It must not substitute its own view of the evidence or findings of fact.

A misunderstanding or misapplication of fact can amount to an error of law where the Tribunal has misstated a relevant undisputed or indisputable fact and based further findings on that error. An attack on a factual finding remains a factual challenge where the finding was open to the Tribunal on the evidence, unless there was no supporting evidence or the conclusion was perverse. The second category stated in Watling v William Bird & Son Contractors Limited should not be followed insofar as it treats misunderstanding or misapplication of facts as a separate general ground of appeal.

Mr Sheridan resigned from British Telecommunications Plc after disciplinary proceedings concerning an alleged falsification of an overtime time sheet. An Industrial Tribunal, by a majority, dismissed his constructive-dismissal complaint. It found that the employer had material on which to conclude that he had over-booked time, that the penalty was within the range of reasonable responses, and that the earlier counselling and appraisal matters were neither sufficiently serious nor causative of the resignation.

The Employment Appeal Tribunal allowed his appeal and remitted the matter to a differently constituted tribunal. The employer appealed, arguing that the Employment Appeal Tribunal had identified no error of law and had impermissibly reconsidered the Industrial Tribunal’s factual conclusions. The central issue was the extent of the Employment Appeal Tribunal’s jurisdiction on an appeal limited to questions of law.

1. Appeal allowed. The Employment Appeal Tribunal had not identified an error of law, nor held that the Industrial Tribunal’s decision was perverse. It had in substance substituted its own view of the evidence for that of the Industrial Tribunal.
2. All three members of the Industrial Tribunal were entitled to find that the counselling and appraisal complaints did not amount to a fundamental breach of contract. The majority was also entitled to find that the evidence supported the conclusion that Mr Sheridan had falsified his time claim, that the disciplinary penalty was within the range of reasonable responses, and that the earlier matters had not caused his resignation. Those were findings open to the Tribunal and could not be reversed merely because another tribunal might have evaluated the evidence differently.
3. Lord Justice McCowan accepted the first and third categories identified in Watling v William Bird & Son Contractors Limited, namely misdirection in law and a finding unsupported by evidence or amounting to perversity. He doubted whether misunderstanding or misapplication of facts was a distinct second category.
4. Lord Justice Ralph Gibson clarified that a misunderstanding or misapplication of fact may constitute an error of law where a relevant undisputed or indisputable fact has been got wrong and further factual conclusions depend on that demonstrable error. It cannot be used to convert an attack on a finding open to the Tribunal into a point of law, absent lack of evidence or perversity.
5. The Master of the Rolls stated that, on questions of fact, the Industrial Tribunal is the final and only judge, subject to legal misdirection, absence of evidence, or perversity in the sense explained in Neale v Hereford & Worcester County Council. He stated that Watling should not be followed in future insofar as its second category is concerned. The order was appeal allowed, with costs to be taxed if not agreed.

• Court of Appeal (Civil Division): [1989] EWCA Civ 14. Appeal by British Telecommunications Plc allowed, with costs to be taxed if not agreed.
• Employment Appeal Tribunal: Unanimously allowed Mr Sheridan’s appeal from the Industrial Tribunal and remitted the matter for rehearing before a freshly constituted tribunal.
• Industrial Tribunal: By majority, dismissed Mr Sheridan’s complaint of constructive dismissal.