McMillan v Airedale NHS Trust

The Court of Appeal held that the claimant's contract and the Trust's disciplinary code did not permit an appeal panel to impose a more severe sanction than that imposed at first instance. The court construed clause 18 of the contract as incorporating the Trust's disciplinary procedures and relied on paragraphs 4.23–4.26 of the code, which grant an appeal to the employee "against ... written warning or dismissal" and state there is "no further right of appeal". The ACAS Code and Guide formed part of the admissible factual matrix and supported the view that appeals are for the employee's protection and should not result in an increased penalty. The court therefore concluded that reconvening an appeal panel solely to increase the sanction would breach contract and upheld the injunctive relief granted below.

Subsidiary findings included that paragraph 47 of Part IV of the procedures did not apply to Part III misconduct cases, that procedural agreements reached during the hearing did not effect a binding variation of contract, and that the court would not decide the question of the legal consequences of withdrawal of an appeal on the facts of this case since it was unnecessary to the outcome.

Background and facts:

• The claimant, a consultant obstetrician and gynaecologist, was found to have committed misconduct by an internal disciplinary panel and received a final written warning. She appealed and the appeal panel conducted a re-hearing. After the appeal panel upheld the findings, it reserved sanction and invited submissions. The Trust served submissions seeking dismissal for breakdown of trust and confidence. The claimant's representatives renewed criticisms and sought a substantive re-hearing before a fresh panel; when the panel refused to recuse, the claimant's counsel stated that the claimant withdrew the appeal and commenced proceedings. The Trust nevertheless resolved that the appeal panel could reconvene to consider sanction; the claimant sought injunctive relief.
• Procedural posture: The claimant obtained interim undertakings and obtained a permanent injunction below from HHJ Hegarty QC restraining the Trust from reconvening the appeal panel to consider sanction. The Trust appealed to the Court of Appeal.

(i) Nature of the claim/application:

• The claimant sought injunctive relief restraining the Trust from reconvening the appeal panel to consider sanction and/or from increasing the disciplinary sanction, together with a claim for damages.

(ii) Issues framed by the court:

1. Whether, under the claimant's contract and the Trust's disciplinary code, an appeal panel could impose a sanction more severe than that imposed at first instance (in particular dismissal) on an appeal brought by the employee.
2. Whether, having purported to withdraw her appeal, the claimant's withdrawal prevented the appeal panel from proceeding to determine sanction.

(iii) Court's reasoning and conclusion:

• The court interpreted clause 18 of the contract as incorporating the Trust's disciplinary procedures and considered paragraphs 4.23–4.26 of the disciplinary code. The right of appeal in paragraph 4.23 was held to be conferred for the employee’s benefit and not intended to allow the employer, via an appeal panel, to increase sanction. Paragraph 4.26's explicit prohibition on further appeal meant it would be anomalous to allow dismissal for the first time on the employee's appeal.
• The court rejected the Trust's arguments that a statutory right of appeal arose from Appendix A or that paragraph 4.23 contemplated a fresh appeal against a dismissal imposed for the first time by the appeal panel. The ACAS Code and Guide were treated as part of the admissible background and supported the construction that appeals should not increase sanctions. The judge's earlier finding that any procedural agreements during the appeal did not amount to a binding contract variation was upheld.
• Because the only practical purpose of the reconvened hearing was to increase sanction, proceeding would breach contract; accordingly the injunction restraining reconvening the appeal panel was justified. The court did not decide the legal consequences of withdrawal of an appeal on the hypothetical assumption that increasing sanction were permitted.

Wider implications: The court emphasised that disciplinary procedures are protective mechanisms within the hierarchical employment relationship and that where an employer wishes the power to increase sanction on appeal it must be clearly provided for in the contract or procedure.

Appeal dismissed. The Court of Appeal held that the disciplinary code and the claimant's contract did not permit an appeal panel to increase the sanction imposed at first instance; construing paragraphs 4.23–4.26 of the code against the contractual matrix (including the ACAS materials) showed the appeal right was for the employee's protection and could not result in a more severe penalty. Reconvening the appeal simply to increase sanction would therefore breach contract and the injunction below was rightly granted. The court did not decide the effect of withdrawal of an appeal on the assumption that increasing sanction was permitted, as that issue was unnecessary to the decision.

Appeal to the Court of Appeal from the Queen's Bench Division (HHJ Hegarty QC) — His Honour Judge Hegarty QC [2013] EWHC 1504 (QB); appeal decided by the Court of Appeal [2014] EWCA Civ 1031.