Panama v London Borough Of Hackney

Permission to appeal from an Employment Appeal Tribunal decision should be limited to grounds raising a point of law with a real prospect of success or another compelling reason. An employment tribunal is required to determine the complaints actually made, rather than unpleaded allegations advanced only in submissions. It must give sufficient reasons for the principal controversial issues, but need not address every point. An appellate tribunal should respect the Employment Appeal Tribunal’s discretionary application of the Ladd v Marshall criteria unless an error of principle is shown. A finding that an employee would have been summarily dismissed for gross misconduct may raise a point of law where the finding rests on inadequate evidence and the employee had no notice that fraud was being alleged.

Felicia Panama appealed from two Employment Tribunal decisions concerning discrimination, victimisation, unfair dismissal and compensation following a reorganisation by the London Borough of Hackney. The Employment Tribunal rejected the discrimination and victimisation complaints, found the dismissal unfair, but awarded no compensation because it considered that she would have been summarily dismissed for gross misconduct if disciplinary proceedings had continued.

The Employment Appeal Tribunal dismissed both appeals. It rejected arguments concerning maternity rights, discrimination in the manner of dismissal, the admission of fresh evidence, the Tribunal’s reasons and the absence of compensation. Miss Panama applied to the Court of Appeal for permission to appeal, principally alleging inadequate reasons, perversity and misdirection. The central issue was whether any proposed ground disclosed a real prospect of success on a point of law or another compelling reason for an appeal.

Lord Justice Peter Gibson allowed the application only in part and limited permission to a single ground.

1. Scope of complaints. An employment tribunal may determine a discrimination complaint only insofar as specific matters are pleaded in the originating application. The complaint concerning discrimination inferred from the manner of dismissal had not been identified in either application. Applying Chapman v Simon, the Tribunal was not required to determine it. The Tribunal had nevertheless given adequate reasons on the pleaded complaints concerning non-selection and suspension.
2. Adequacy of reasons. A tribunal need not address every submission. It must deal with the points that are in controversy and the principal important issues. The reasons, read as a whole, sufficiently explained why the parties succeeded or failed. The principle stated in High Table Ltd v Horst supported that conclusion.
3. Fresh evidence. The Employment Appeal Tribunal was required to apply the Ladd v Marshall guidelines. Its conclusion that the proposed evidence could reasonably have been obtained earlier and was not likely significantly to affect the outcome disclosed no arguable error warranting appellate intervention.
4. Gross misconduct and compensation. The Employment Tribunal was entitled to distinguish between the initial allegation of ordinary misconduct and the later allegation that the letter constituted an attempt to defraud Hackney. If attributable to Miss Panama, the latter conduct could plainly amount to gross misconduct. However, there was no direct evidence that she wrote the letter, and the alleged fraud and evidence said to justify summary dismissal had not been properly notified to her. It was therefore arguable that the Tribunal erred in law in finding that she would have been summarily dismissed and, on that basis, awarding no compensation.

Permission to appeal was granted on that ground alone. The application was otherwise refused.

• Employment Tribunal: dismissed the discrimination and victimisation complaints, found the dismissal unfair, and awarded no compensation because of the anticipated outcome of disciplinary proceedings.
• Employment Appeal Tribunal: dismissed both appeals and refused permission to appeal.
• Court of Appeal (Civil Division): allowed the application for permission in part, limited to the arguable error concerning gross misconduct and compensation.