Court name
Court of Appeal of Turks and Caicos Islands
Case number
CL-AP 9 of 2014

Fulford v. National Insurace Board (CL-AP 9 of 2014) [2015] TCACA 4 (18 September 2015);

Law report citations
Media neutral citation
[2015] TCACA 4
Coram
Zacca, P
Mottley, JA
Forte, JA

IN THE COURT OF APPEAL

TURKS AND CAICOS ISLANDS

CIVIL APPEAL CL/AP 9/14

BETWEEN:

RICARDO FULFORD

APPELLANT

AND:

NATIONAL INSURANCE BOARD

RESPONDENT

Before:

The Right Honorable Sir Edward Zacca, President

The Honorable Mr. Justice Mottley, Justice of Appeal

The Honorable Mr. Justice Forte, Justice of Appeal

On 26 & 29 January 2015, 18 September 2015

Conrad Griffiths, Q.C. for the Appellant

Ariel Misick, Q.C. for the Respondent

Mottley, JA

1.             On 29 January 2014, the Labour Tribunal dismissed the Original Application of Richard Fulford, appellant, in which he claimed that (i) he was unfairly dismissed, (ii) was discriminated against and (iii) was the subject of victimization. The appellant who was employed by the National Insurance Board, the Respondent, as a Compliance Officer was dismissed on 20 August 2012. The appellant alleged that he was dismissed without any procedural hearing or any opportunity to respond to a “misguided ultimatum” contained in letters dated 31 July and 1 August from the Respondent.

2.             On 2 February 2009, the appellant was employed by the Respondent as a Compliance Officer. On 17 March 2009, the appellant entered into a contract with the Respondent (NIB). The terms of the Agreement was governed by the Summary Particulars of Terms of Employment set out in Schedule A and Schedule B.

3.             Paragraph 18 which deals with termination of his employment provides inter alia:

“[18] The employment under this Agreement may be terminated at anytime in any of the following circumstances namely:

(b) If the Employee shall be guilty of any serious misconduct, which is directly related to the employment relationship and has a detrimental effect on the Employer’s enterprise that it would be unreasonable to require the Employer to continue the employment relationship, the Employee at the option of the Employer may be terminated forthwith and without any notice or payment in lieu of notice;

(c) The Employee may also be dismissed for other misconduct, failure to perform duties in a satisfactory manner and/or breach of any of the obligations under this Agreement or the National Insurance Board’s disciplinary rules after two (2) written warnings and in the case of unsatisfactory performance after having been given instructions to correct the unsatisfactory performance within a period of three (3) months.”

4.             The appellant was engaged in doing private business. By letter dated 13 September 2013, the Director of the N.I.B. wrote to the appellant stating inter alia:

“There are no potential conflicts that I can point to in relation to the construction services that you propose to provide as a private business. However, with regard to the consultancy services it is my opinion that potential conflicts can arise between the provision of those services and your duties as a Compliance Officer with the National Insurance Board (NIB).

The National Insurance Board’s Staff Conditions of Service at section 4.11 states: “An officer may not at anytime engage in private activity which could bring the officer and/or the organization in disrepute, conflict with his or her official duties or responsibilities or place him or her in a position to use his or her personal position for personal advantage.

Compliance Officers are required as part of their duties to conduct investigations with regard to contribution payments when migrant workers make application for labour clearances and renewal of work permits. There would therefore be conflicts of interest where an officer providing consultancy services to such an applicant is also involved in the investigation of national insurance contribution paid or due by or in behalf of the same applicant. Such conduct would be in breach of the Staff Conditions of Service and would result in serious disciplinary action being taken against the officer.”

The Director advised the appellant

‘I would therefore advise that it would be in your interest and that of NIB for you as a Compliance Officer to refrain from providing the consultancy services as proposed but in the event that you do kindly avoid any situations where conflicts of interest arise_or where you may have to use your position or the NIB’s equipment or information for personal advantage or to facilitate any application for a labour clearance, work permit or similar activity.”

5.             In the Staff Manual of N.I.B. which was in force at the date of the appointment of the appellant in Section 4.11 under the caption “Conflict of Interest” it is stated:

“53.0 Conflict of Interest

The long term success and visibility of the NIB depends on the competence and integrity of all its employees as reflected in the Vision Statement, Principles and Core Values. The nature of its business demands a very special relationship of trust with all, be it suppliers, contractors, employees or the community. Its operations will always require the very highest standards of ethics and integrity from its employees. It is required that all employees carefully read, understand and comply with this policy on Conflict of Interest. Senior employees and incumbents in certain jobs are required to make the requisite declarations annually. Should any member of staff consider that s/he maybe entering a conflict of interest situation, this should be brought to the attention of the Deputy Director Corporate Service.

The objective of this policy is to ensure that the NIB’s employees are aware of the potential sources of conflict of interest that may arise during the course of their employment and to assist them in resolving the issues related thereto.

In doing so, the NIB would seek to protect its legitimate interests while minimizing limitations on the freedom of action of employees whether during or outside normal working hours.

It is obligatory that employees protect the interest of the NIB at all times. This necessitates that their actions and activities, whether during or outside their normal working hours, do not generate conflict with the NIB’s interest and their own.”

6.             A Memo from acting Director of N.I.B sent on behalf of the Board of Director of the N.I.B. to all staff of the N.I.B. dealing with Staff Conditions of Service provided:

“The National Insurance Board has crafted a Staff Conditions of Service for the organization to acquaint staff with the appropriate information to ensure that everyone adheres to the policies and procedures of the Board

In recent times, it has been observed that there were a number of serious breaches indicative of a blatant disregard for these guidelines.

Accordingly, please be advised that the Board of Directors will now adopt a “zero tolerance ” policy in relation to any future breaches of the Staff Conditions of Service or any deviation from the policies and procedures of the organization.

With immediate effect, any employee who violates these rules and standards will be subject to disciplinary action in accordance with the Staff Conditions of Service up to and including termination of employment.

Members of staff are therefore hereby encouraged to familiarize themselves with the Staff Conditions of Service.

Any further breaches/fraudulent acts will be immediately referred to the relevant authorities.”

This memo contained an endorsement “seen on August 9th 2011” which bears the signature of the appellant.

7.             A new Manual containing the NIB’s Human Resources Policies and Procedures came into force around August 2011. This was circulated in October 2011 and was intended to cover the conduct of all employees

8.             Section 53.0 under the caption “Conflict of Interest” provided:

“53.0 Conflict of Interest

The long term success and visibility of the NIB depends on the competence and integrity of all its employees as reflected in the Vision Statement, Principles and Core Values. The nature of its business demands a very special relationship of trust with all, be it suppliers, contractors, employees or the community. Its operations will always require the very highest standards of ethics and integrity from its employees. It is required that all employees carefully read, understand and comply with this policy on Conflict of Interest. Senior employees and incumbents in certain jobs are required to make the requisite declarations annually. Should any member of staff consider that s/he maybe entering a conflict of interest situation, this should be brought to the attention of the Deputy Director Corporate Service.

The objective of this policy is to ensure that the NIB’s employees are aware of the potential sources of conflict of interest that may arise during the course of their employment and to assist them in resolving the issues related thereto.

In doing so, the NIB would seek to protect its legitimate interests while minimizing limitations on the freedom of action of employees whether during or outside normal working hours.

It is obligatory that employees protect the interest of the NIB at all times. This necessitates that their actions and activities, whether during or outside their normal working hours, do not generate conflict with the NIB’s interest and their own.”

9.             Section 53.1 deals with “Outside Activities” and provides:

“53.1 Outside Activities

It is the policy of the NIB that permanent employees engaging in external business activities must comply with the conditions listed hereunder. Where there is a doubt as to whether such activity may be prejudicial to the NIB’s interests, employees must seek the prior approval of the Director through their Supervisor. Work requirements including overtime will have precedence over any outside activity.

Employees shall not engage in outside activities which substantially interfere with work performance and diminish their contribution to the Board.

Employees must not establish business relationships which may conflict with the Board’s interest, e.g. financial and/or other interests in entities that are in competition with the Board.

Employees must not engage in activities which are prejudicial to the Board’s interest.

There may be certain activities which would redound to the benefit of the community or the territory, e.g. directorship of companies, membership boards, or statutory bodies and public office in which participation of the employee will be guided by existing Board policy governing such memberships, provided that such participation does not lead to conflict of interest situations among the competing offices and functions. Employees who are invited to serve in such capacity should advise the Board in writing as soon as the employee is invited to serve, so that appropriate courtesies can be extended in the circumstances.”

10.          At a meeting of the N.I.B. held on 26 July 2012, the conduct of the appellant in so far as his private business was concerned, a decision was taken to ask the appellant to choose between private business and his job as a Compliance Officer with N.I.B. After reading the relevant excerpts from the HR Manual relating to outside activities of employees of N.I.B, the Board took a decision that any previous authorization for the appellant to engage in outside activities should be withdrawn.

11.          By letter dated 31 July 2012 to the appellant, the Acting Director of the N.I.B stated:

‘‘I refer to the former Director’s September 13, 2010 correspondence to you in which he advised:

“ ...it would be in your interest and that of the NIB for you as a Compliance Officer to refrain from providing the consultancy services as proposed but in the event that you do, kindly avoid any situations where conflicts of interests may arise or where you may have to use your position or the NIB’s equipment for personal advantage or to facilitate any application for labour clearance, work permit renewal or similar activity. ”

The National Insurance Board has now received several opinions which confirm that the operation of any form of immigration/labour/employment consultancy business would indeed present a clear conflict of interest in your position as a Compliance Officer.

You have informed the Board that you are operating such a consultancy business. Accordingly, you are hereby instructed to cease operation of the business with immediate effect.

Should you continue to operate the business, your employment with the National Insurance Board will he terminated with immediate effect.”

12.          This letter made it clear to the appellant that if he continued to operate his private business with his employment with N.I.B. he will be terminated with immediate effect.

13.          The day following, 1 August 2012, the acting Director informed the appellant that “the Board of Directors look forward to your formal confirmation that you will discontinue the operation of your consultancy business forthwith”.

14.          By letter dated 2 August to the Acting Director, the appellant indicated that while he had received the Acting Director’s letters of 31 July and 1 August 2012, he was on vacation and as such he sought the indulgence of the Board. He referred to the letter dated 13 September 2010 which he stated “did not command me to cease the operation of my consultancy business, he merely advised that I should “kindly avoid any situation where conflicts of interest may arise or where you may have to use your position or the N.I.B’s equipment or information for personal advantage or to facilitate any application for a labour clearance, work permit or similar activity”.

15.          The appellant repeated what he had earlier said. He stated:

I              I take my job as a Compliance Officer very seriously, and I serve my country and the NIB with pride and integrity.

II             I have always avoided and will continue to avoid any situation where conflicts of interest may arise.

III            I have never nor do I ever intend to use my position as a Compliance Officer to facilitate any application for anyone whether connected with my consultancy business or not.

IV            I have never nor do I ever intend to use NIB Equipment to facilitate the running of my consultancy business.

The appellant pointed out that he was the person “who notified the Board that I have a consultancy business and requested the then Director to identify any areas where conflict of interest arise so that he could steer clear of them”. The appellant indicated:

“As much as I love working as a Compliance Officer and serving my country in this way, I have to be realistic about my financial situation, and in these tough economic times, it is difficult to comprehend the closing down of my consultancy business. It is also difficult to see the reason for your request when I never went contrary to the guidelines given by the then Director.

In the interest of fairness, I humbly request that you reconsider your position in relation to “terminating me with immediate effect.”

16.          Mr. Chal Misick of Misick Gardiner by letter dated 16 August 2012 wrote to the Acting Director of N.I.B stating that he had “reviewed the National Insurance Board’s Condition of Service Manuel (sic) and Mr. Fulford’s Contract of Employment, we are of the view that nothing in these documents forbids Mr. Fulford from exercising his right to open and operate a small business, provided his business interest does not interfere with his employment.” He expressed the opinion” to threaten the termination of (the appellant) for something that has not yet occurred or may never occur, is wrong in principle and therefore should not be a criteria for ones continued employment”. Mr. Misick went on to point out that:

“It is unjust to prevent Mr. Fulton from making a living on the suspicion that he may engage in activities that conflict with his employment in the future. The Board has to consider the merit of its argument and in so doing should come to the conclusion that terminating Mr. Fulford, or forcing him to abandon his business is unsustainable.”

17.          On 20 August 2015, the Acting Director of N.I.B wrote to the appellant terminating his employment. The letter stated inter alia

“Re: Termination of Employment

Sections 53.0 and 53.1 of the National Insurance Board’s Human Resource Policies and Procedures adopted September 1, 2011, clearly indicate that the Director’s approval is required by employees of the Board engaged in outside activities which may prove to present a conflict of interest.

Our correspondence of July 31, 2012 advised that the National Insurance Board had received several opinions which confirmed that the operation of any form of immigration/labour/employment consultancy business presented a clear conflict of interest in your position as a Compliance Officer.

You were also informed at that time that should you continue to operate the business, your employment with the National Insurance Board would be terminated.

In response, your letter of August 2, 2012 indicated that it is difficult for you to comprehend the closure of your consultancy business.

The Board has therefore considered the matter and has made a decision to dismiss you from your employment with the National Insurance Board.

I am therefore writing to inform you that you are hereby dismissed with immediate effect.”

THE APPLICATION

18.          On 30 October 2012, the appellant applied to the Labour Tribunal alleging that his dismissal was unfair. Alternatively, the appellant alleged that he was constructively dismissed. It was also alleged that he was discriminated against ans was the object of victimization contrary to the Employment Ordinance 2004.

The appellant stated that he believed:

“The NIB was under pressure to downsize and/or they saw fit to single me out for dismissal for reasons that are frivolous and abusive. They used the fact that I has a business as an excuse to unfairly dismiss me under the guise of conflict of interest. The evidence will show that I was never in a position of conflict.”

Insofar as the Particulars of Victimisation and Discrimination the appellant file an amended Particulars:

“PARTICULARS OF VICTIMISATION AND DISCREMINATION IN THAT THE RESPONDENT:

Prejudice the applicant due to his/her legitimate disclosure of information regarding his agency business;

Prejudice applicant who has previously or who may exercise any right, permissible under the terms of employment in place at the time he was hired;

Unfair promotion, demotion, suspension, discipline, training or provision of benefits as direct results of his summary dismissal he lost all entitlements,

Discriminated against the applicant in that he was treated worse or differently than other people who work for the defendant and carried on their private business without being made to choose between their employment and the business which in many ways subsidize their income. The applicant has a right not to be treated worse than other people at work.

Indirectly discriminated against the applicant where they know he was not able to meet the requirement they sort (Closing if his business) which is not justifiable in terms of the policy and procedure that was in place at the time he started his business and as a result he is at a disadvantage

Indirect discrimation against the applicant, in that they brought in new policy and procedure that impacts upon his business without consultation of any kind neither did they give him the opportunity to be grandfathered in.

The Respondent's actions in putting the applicant name in the news paper cause him to be view by the public in a negative light; it gives the perception that he had done something wrong as a result of his employer was entitle to publicize his name as they did. This action amounts to discrimination.

Finally, the applicant was discrimated against when he was dismissed from his job because he stood up for his rights to earn a living whilst doing no harm that he was aware of to his employer. The letter of termination came a day after, his lawyer wrote the Respondent asking for clarification of their procedure as it relates to their claim of conflict of interest such as to warrant the closure of the applicants business.”

In its Defence dated 20 November 2012, the N.I.B alleged that the reason for the appellant’s dismissal was a conflict of interest. They particularly alleged:

The applicant obtained a business licence and operated an immigration consultancy business while being employed as a Compliance Officer at the Turks and Caicos Islands National Insurance Board (TCINIB). As part of this private business, the applicant provided immigration consultancy services to entities against whom he was expected as a compliance officer to enforce the relevant provisions of the National Insurance Ordinance. The applicant has no authorization from his employer to engage in the immigration consultancy business which was in conflict with the interest of the National Insurance Board. He was given an opportunity to terminate the consultancy business and continued his employment with the National Insurance Board but he refused and/or neglected to do so.

DECISION OF LABOUR TRIBUNAL

19.          In its decision, the Tribunal made certain findings. These findings were set out in paras 17, 18, and 19.

“17. The Tribunal finds that there was reasonable time for the Applicant to peruse the Respondents guiding principles as set out in the Staff Conditions of Service Manual (2002) and subsequently the Policy and the Procedures (2011) and make a decision, in the interest of good judgment, either to close his consultancy business or resign from the NIB.

18. The evidence submitted by the Applicant indicates that he was of the opinion that his Contract of Employment should have been ratified to include relevant clauses from the 2011 Policies and Procedures Manual as well as the Conditions of Service Manual (2002). He made reference to the The Employment Ordinance (2004) Section 6(3) to justify this assumption. The section reads:

“If there is a change in the terms of employment to be included or referred to, in a contract, the employer shall not later than 14 days beginning with the day after the date on which the change takes place, confirm the change, by a written statement, give a copy of the statement to the employee and the employee shall preserve the statement.”

19. The Conflict of Interest clauses outlined in the Manuals were not part of the Applicant’s Contract of Employment; perhaps these could be viewed as separate documents which played different roles. However, the Termination Clause 8(a) (b) and (c) in the Applicant’s Contract refers to the reasons for termination remains. Therefore, the Applicant’s assumption that the “NIB unilaterally changed my terms of employment without my knowledge and input or consent (and) unfairly dismiss me due to victimization and unlawful discrimination” is unfounded.

20. It is not disputed that the Applicant was aware of the implementation of a Performance Based Management System (PBMS) which he signed on September 16, 2011 in acknowledgement of its receipt.”

20.          The conclusions reached by the Tribunal in so far as the matter of conflict of interest was concerned are contained in paras 21, 22, 23, 24, 25and 26.

“21. The Tribunal took into consideration the submission made by the Applicant, and the Respondent’s witnesses, and the surrounding circumstances and finds that the Applicant has little or no regard for the NIB’s Conflict of Interest clause in the Staff Conditions of Service Manual 2002 clause 4:11, nor for the revised edition - 2011 section 53.0.

22. Further, the Tribunal finds that the Applicant also ignored the other various correspondences from the Respondent which advised against his actions, and he blatantly operated his consultancy business advertising for his clients in the News paper (sic) and preparing NIB Contributions and Assessments with Ana Godet being a client of particular interest for whom the Applicant provided services over an extended period.

23. The Tribunal finds that the words “refrain from” is a strong enough phrase to have raised a concern for the Applicant from as far back as September 2010.

24. The Respondent’s decision to dismiss the Applicant was based on Termination Clause 18(b) of the Applicant’s Contract of Employment and the Staff Conditions of Service Manual 2002 clause 4:11 which was simplified in the revised HR Policies and Procedures Document (2011) in section 53.0 paragraph 4 which states: “It is obligatory that employees protect the interest of the NIB at all times. This necessitates that their actions and activities, whether during or outside their normal working hours do not generate conflict with the NIB’s interest and their own and section 53.1 paragraph 3 which adds: “Employees must not establish business relationships which may conflict with the Board’s interest”.

25. On August 09, 2011, just over a year before the Applicant’s dismissal, the Applicant received and signed a Memo from the Respondent’s Deputy Director (page 122) which read:

“The NIB has crafted a Staff Conditions of Service for the organization to acquaint staff with the appropriate information to ensure that everyone adheres to the Policies and Procedures of the Board.

In recent times, it has been observed that there were a number of serious breaches indicative of a blatant disregard for these guidelines.

Accordingly, please be advised that the Board of Governors will now adopt a “zero tolerance” policy in relation to any future breaches of the Staff Conditions of Service or any deviation from the policies and procedures of the organization.”

26. This Memo was followed on October 03, 2011 by the Respondent’s advisory of the link to access and familiarize oneself with the newly revised HR Policies and Procedures. The Respondent/Director gave evidence that the Applicant was in possession of the revised HR Policy 2011 Manual when he made a visit to his office.”

21.          In relation to the appellant’s claim of discrimination and victimization the Tribunal found that “no clear line of evidence to highlight these behaviours with the Respondent pursuant to sections 49,53(2) and 54 of the Employment Ordinance 2004. These provisions are

“49. Where by virtue of any provisions of this Part, it would be unlawful, in particular circumstances, for a person to discriminate against another person on the grounds set out in section 35(2), it is unlawful for that person to request or require that other person to provide information (whether by way of completing a form or otherwise) that would not, in the same or substantially similar circumstances be required or requested of the person of the opposite sex, or of a different race, religion, colour, political opinion, ethnic origin, indigenous population, social origin, pregnant state or marital status or with different family responsibilities.

53(2) For the purposes of subsection (1) a person shall be taken to commit an act of victimization against another person if the first- mentioned person subjects or threatens to subject the other person to any determint-

(a) on the ground that the other person -

(i) has made, or proposes to make, a complaint under this Ordinance;

(ii) has brought, or proposes to bring proceedings under this Ordinance against any person;

(iii) has furnished or proposed to furnish, any information, or has produced, or proposes to produce, any documents to a person exercising or performing any power or function under this Ordinance;

(iv) has attended or proposed to attend an inquiry under this Ordinance or to provide evidence or testimony as a witness; or

(v) has made a good faith allegation that a person has commited an act of discrimation in contravention of this Ordinance.

(b) on the ground that the first-mentioned person believes that the other person has done, or proposes to do an act or thing referred to in paragraph (a)(i) to (v).

54. Except where otherwise provided in this Ordinance, the person alleging a violation of this Part shall bear the burden of presenting a prima facie case of discrimination or of an offence related to discrimination under this Ordinance. Upon a prima facie showing of discrimination, the burden of persuasion shall shift to the respondent to disprove the allegations.

THE APPEAL

22.          The appellant’s Amended Grounds of Appeal dated 20 August 2014 comprised seven grounds. These grounds are:

“1A. The Labour Tribunal fundamentally erred in that they failed to establish (i) the reason for dismissal and (ii) failed to address the fairness of the dismissal at all and the lack of any prior notice of dismissal or any disciplinary hearing. Procedurally there was manifest unfairness in the Appellant’s summary dismissal. The decision to dismiss was taken by the Respondent without any prior warning or any hearing at all and was presented as an ultimatum by letters of 31st July, 2012 and 1st August, 2012. The absence of any procedural hearing, any opportunity to be heard or notice of the alleged legal opinions relied on rendered the dismissal automatically unfair in light of the decision in Polkey v AE Dayton Services Ltd. [1988] 1 AC 344. Notwithstanding this glaring error the Labour Tribunal overlooked this fundamental matter in their Decision.

1.             The Labour Tribunal erred in law in that having expressly found as a fact that the Appellant’s contract of employment did not contain the “conflict of interest” clause(s_ upon which the Respondent relied in support of its decision to dismiss (see paragraph 19, page 6 of the Decision) there was then no lawful basis upon which to hold that a valid reason for dismissal had been established by the Respondent, or that the clause could or did form part of the Appellant’s employment contract or that the Applicant’s dismissal was fair. The finding at paragraph 19, page 6 of the Decision that: “The Conflict of Interest clauses outlined in the Manuals were not a part of the Applicant’s Contract of Employment, perhaps these could be viewed as separate documents which played different roles ’’was conclusive and determinative and a bar to the Respondent being able to establish a valid reason for dismissal within the meaning of section 69 of the Employment Ordinance ('the Ordinance ’).

2.             Having expressly found that the contractual clause (sic) referred to above and relied on by the Respondent formed no part of the Appellant’s contract of employment, the Labour Tribunal further erred in that it proceeded to speculate as to whether further documents might have formed part of the contract of employment by the expression “...perhaps these could be viewed as separate documents which played different roles. ” It is no part of the function of any decision making Tribunal to descend into the realm of speculation nor was there in fact any finding as what role these documents played, if any.

3.             The Labour Tribunal erred in law and fact in that they either (i) failed to direct their minds as to whether a reasonable employer having undertaken a reasonable investigation would have concluded that a conflict of interest arose or (ii) failed to reach any or any discernible finding on this issue and (iii) failed to find that there was no conflict of interest.

4.             The Labour Tribunal erred in law and fact in that:

(i) They found that the written opinion of the Integrity Commission was relevant when in fact the Appellant was not a person in public life or a person affected by the Integrity Ordinance at all and thereby such an opinion should never have been offered, was outwith the powers of the Integrity Commission and was, at best, misleading and in fact appeared to adversely influence the Labour Tribunal when it was irrelevant and was wrong as a matter of law;

(ii) No reasonable or fair reading of the letter of 13th September, 2010 could lead to the view that it was a final warning or warning of threatened dismissal in that the letter expressly permitted the conduct of future activity subject to a proviso and the Applicant received no contrary indication or notice that the Respondent’s position on that issue has changed was ever established;

(iii) They confused the reasons for dismissal by failing to determine whether dismissal was in respect of prior activity, and, if so, what activity, or future activity and/or a refusal to confirm that no such activity would be undertaken;

(iv) They failed to state what the reason for dismissal was within the meaning of section 69 of the Employment Ordinance (i.e. was it for (mis)conduct, or (in) capability or some other substantial reason (and if so, what);

(v) They failed to address the relatively junior status of the Appellant and his role by failing to analyze whether his private business either could or did conflict with his employment when plainly it did not as an immigration consultancy; and

(vi) They failed to address or hold that the procedure adopted by the Respondent, such as it was, could not be fair having regard to all the circumstances and the equity of the case.

5.             The Labour Tribunal failed to address correctly the Appellant’s claim for discrimination and victimization in that the Labour Tribunal had failed to give any or any directions for the conduct of these claims prior to the hearing and thereby confused the burdens of proof and conduct of proceedings. These separate claims by the Appellant simply became lost in the erroneous procedure of the Labour Tribunal which proceed on the false premise that the claim for unfair dismissal was the only live issue before the Tribunal.

6.             In all the circumstances the Labour Tribunal failed to deliver a reasoned or properly reason decision as they were required by law to do.”

23.          Section 69 of the Employment Ordinance Cap 17 (“the Ordinance”) sets out the general provisions relating to fairness of dismissal:

“69 (1) In determining for the purpose of this Part whether the dismissal of an employee was fair or unfair, it shall be for the employer to show-

(a) what was the reason (or, if there was more than one, the principal reason) for the dismissal; and

(b) that it was a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) In paragraph (b) of subsection (1) the reference to a reason falling within this subsection is a reference to a reason which-

(a) related to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do;

(b) related to conduct of the employee;

(c) was that the employee was redundant; or

(d) was that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employers) of a duty or restriction imposed by or under any Ordinance.

(3) Where the employer has fulfilled the requirements of subsection (1), then, subject to section 13 and 70 to 77 the determination of the question, whether the dismissal was fair or unfair, having regard to the reasons shown by the employer, shall depend 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 that question shall be determined in accordance with equity and the substantial merits of the case.”

24.          Section 67 guarantees that an employee shall not be unfairly dismissed.

The section states:

“67(1) In every employment to which this section applies every employee shall have the right not to be unfairly dismissed by his employer.

(2) This section applies to every employment where the employee was continuously employed for not less than one month, except in so far as its application is excluded by our under the provisions of section 59 (1) or section 107”

25.          The burden is placed on the Employer by section 82 (1) of the Ordinance to provide the reason for the dismissal. The section states:

“82. (1) In any claim or complaint arising out of the dismissal of an employee it shall he for the employer to prove the reason for the dismissal, and if the employer fails to do so there shall be a conclusive presumption that the dismissal was unfair.”

26.          An appeal to the Court of Appeal from the decision of the Labout Tribunal but this is limited to a question of law. Section 98 (2) provides:

“98 (2) An appeal shall lie to the Court of Appeal on a question of law arising from any decision of, or in proceedings before, the Labour Tribunal under this Ordinance.”

27.          The jurisdiction of the Court of Appeal is similar to the jurisdiction of the Appeal Tribunal in the United Kingdom. In O’kelly v Trusthouse Forte P.L.C. [1984] 1.Q.B. 90 Sir John Donaldson MR observed at page 122:

“The appeal tribunal is a court with a statutory jurisdiction. So far as is material, that jurisdiction is limited to hearing appeals on questions of law arising from any decision of, or arising in any proceedings before, an industrial tribunal: section 136(1) of the Employment Protection (Consolidation) Act 1978. If it is to vary or reverse a decision of an industrial tribunal it has to be satisfied that the tribunal has erred on a question of law.”

28.          The Master of the Rolls continued:

“Whilst it may be convenient for some purposes to refer to questions of “pure” law as contrasted with “mixed” questions of fact and law, the fact is that the appeal tribunal has no jurisdiction to consider any question of mixed fact and law until it has purified or distilled the mixture and extracted a question of pure law.

The purification methods are well known. In the last analysis all courts have to direct themselves as to the law and then apply those directions in finding the facts (in relation to admissibility and relevance) and to the facts as so found. When reviewing such a decision, the only problem is to divine the direction on law which the lower court gave to itself. Sometimes it will have been expressed in its reasons, but more often it has to be inferred. This is the point of temptation for the appellant court. It may well have a shrewd suspicion, or gut reaction, that it would have reached a different decision, but it must never forget that this may be because it thinks that it would have found or weighed the facts differently. Unpalatable though it may be on occasion, it must loyally accept the conclusions of fact with which it is presented and, accepting those conclusions, it must be satisfied that there must have been a misdirection on a question of law before it can intervene. Unless the direction on law has been expressed it can only be so satisfied if, in its opinion, no reasonable tribunal, properly directing itself on the relevant questions of law, could have reached the conclusion under appeal. This is a heavy burden on an appellant. I would have thought that all this was trite law, but if it is not, it is set out with the greatest possible clarity in Edwards v. Bairstow [1957] A.C. 14.”

29.          The question which a Labour Tribunal, in deciding whether a person has been unfairly dismissed should ask itself, engaged the attention of the House of Lords in Polkey v A.E. Drayton Services Ltd. [1998] 1 A.C. 344. Lord Mackay of Clashfern L.C. stated at page 354:

“This appeal raises an important question in the law of unfair dismissal. Where an industrial tribunal has found that the reason for an applicant’s dismissal was a reason of a kind such as could justify the dismissal and has found that there has been a failure to consult or warn the applicant in accordance with the code of practice, should the tribunal consider it whether, if the employee had been consulted or warned before dismissal was decided upon, he would nevertheless have been dismissed? The answer depends upon the application to this situation of section 57(3) of the Employment Protection (Consolidation) Act 1978, as amended, which is in these terms:

“Where the employer has fulfilled the requirements of subsection (1), then, subject to sections 58 to 62, the determination of the question whether the dismissal was fair or unfair, having regard to the reasons shown by the employer, shall depend 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 that question shall be determined in accordance with equity and the substantial merits of the case.”

Where there is no issue raised by sections 58 to 62 the subject matter for the tribunal’s consideration is the employer’s action in treating the reason as a sufficient reason for dismissing the employee. It is that action and that action only that the tribunal is required to characterize as reasonable or unreasonable. That leaves no scope for the tribunal considering whether, if the employer had acted differently, he might have dismissed the employee. It is what the employer did that is to be judged, not what he might have done. On the other hand, in judging whether what the employee did was reasonable it is right to consider what a reasonable employer would have had in mind at the time he decided to dismiss as the consequence of not consulting or not warning.

If the employer could reasonably have concluded in the light of the circumstances known to him at the time of dismissal that consultation or warning would be utterly useless he might well act reasonably even if he did not observe the provisions of the code. Failure to observe the requirement of the code relating to consultation or warning will not necessarily render a dismissal unfair. Whether in any particular case it did do is a matter for the industrial tribunal to consider in the light of the circumstances known to the employer at the time he dismissed the employee.”

30.          The Lord Chancellor continued by indicating that he was adopting and approving the analysis of Browne-Wikinson J (as he then was) said in Sillifant v Powell Duffryn Timber Ltd [1983] I.R.L. 91, 97 where the judge said:

“In our judgment, apart from the authority to which we are about to refer, the correct approach to such a case would be as follows. The only test of the fairness of a dismissal is the reasonableness of the employer’s decision to dismiss judged at the time at which the dismissal takes effect. An industrial tribunal is not bound to hold that any procedural failure by the employer renders the dismissal unfair: it is one of the factors to be weighed by the industrial tribunal in deciding whether or not the dismissal was reasonable within section 57(3). The weight to be attached to such procedural failure should depend upon the circumstances known to the employer at the time of dismissal, not on the actual consequence of such failure. Thus in the case of a failure to give an opportunity to explain, except in the rare case where a reasonable employer could properly take the view on the facts known to him at the time of dismissal that no explanation or mitigation could alter his decision to dismiss, an industrial tribunal would be likely to hold that the lack of ‘equity’ inherent in the failure would render the dismissal unfair. But there may be cases where the offence is so heinous and the facts so manifestly clear that a reasonable employer could, on the facts known to him at the time of dismissal, take the view that whatever explanation the employee advanced it would make no difference: see the example referred to by Lawton L.J. in Bailey v B.P. Oil (Kent Refinery) Ltd. [1980] I.C.R. 642. Where, in the circumstances known at the time of dismissal, it was not reasonable for the employer to dismiss without giving an opportunity to explain but facts subsequently discovered or proved before the industrial tribunal show that dismissal was in fact merited, the compensation would be reduced to nil. Such an approach ensures that an employee who could have been fairly dismissed does not get compensation but would prevent the suggestion of “double standards” inherent in the British Labour Pump principle.

31.          Lord Bridge of Harwich in his judgment at 364 stated:

“Employers contesting a claim of unfair dismissal will commonly advance as their reason for dismissal will commonly advance as their reason for dismissal one of the reasons specifically recognized as valid by section 5 7(2) (a), (b) and (c) of the Employment Protection (Consolidation) Act 1978. These, put shortly, are: (a) that the employee could not do his job properly; (b) that he had been guilty of misconduct; (c) that he was redundant. But an employer having prima facie grounds to dismiss for one of these reasons will in the great majority of cases not act reasonably in treating the reason as a sufficient reason for dismissal unless and until he has taken the steps, conveniently classified in most of the authorities as “procedural,” which are necessary in the circumstances of the case to justify that course of action. Thus, in the case of incapacity, the employer will normally not act reasonably unless he gives the employee fair warning and an opportunity to mend his ways and show that he can do the job; in the case of misconduct, the employer will normally not act reasonably unless he investigates the complaint of misconduct fully and fairly and hears whatever the employee wishes to say in his defence or in explanation or mitigation; in the case of redundancy, the employer will normally not act reasonably unless he warns and consults any employees affected or their representative, adopts a fair basis on which to select for redundancy and takes such steps as may be reasonable to avoid or minimize redundancy by redeployment within his own organization. If an employer has failed to take the appropriate procedural steps in any particular case, the one question the industrial tribunal is not permitted to ask in applying the test of reasonableness posed by section57(3) is the hypothetical question whether it would have made any difference to the outcome if the appropriate procedural steps had been taken. On the true construction of section 57(3) this question is simply irrelevant. It is quite a different matter if the tribunal is able to conclude that the employer himself, at the time of dismissal, acted reasonably in taking the view that, in the exceptional circumstances of the particular case, the procedural steps normally appropriate would have been futile, could not have altered the decision to dismiss and therefore could be dispensed with. In such a case the test of reasonableness under section 57(3) may be satisfied.

My Lords, I think these conclusions are fully justified by the cogent reasoning of Browne-Wikenson J. in Sillifant v. Pwell Duffrytt Timber Ltd. [1983] I.R.L.R. 91 to which my noble and learned friend the Lord Chancellor has already drawn attention.”

32.          In deciding the question whether the dismissal of the appellant was fair, it is necessary to determine whether the NIB acted reasonably in treating the reason for dismissal as sufficient. Complaint is made that there was procedural unfairness as the appellant was summarily dismissed without any prior warning or any hearing.

In order to determine this, it is necessary to consider whether the decision of the NIB, judged at the time of the dismissal was reasonable. The procedural failure in not affording any hearing to the appellant does not, in itself, render the dismissal unfair. This procedural failure is a factor to be weighed in determining whether or not the dismissal was reasonable under the provisions of section 69(3) of the Ordinance. The Labour Tribunal, in determining this issue, was required to look at all the circumstances known to the NIB at the time of dismissal. If the Tribunal came to the conclusion that it was reasonable for the NIB to take the view that whatever explanation the appellant would have given, it would not have made any difference.

33.          By letter dated 2 August 2012 the appellant informed the NIB that, even though he loved working as a Compliance Officer, he had to be realistic about his financial situation and it would be difficult to comprehend that he would close his consultancy business.

34.          In a letter dated 16 August, the appellant’s counsel wrote to the NIB requesting the NIB to review its Condition of Service Manual and the appellant’s contract of employment stating that the appellant was of the view that there was nothing in the documents which prevented him from “exercising his right to open and operate a small business” provided that the business did not interfere with his employment.. His lawyer suggested that it would have been unjust to prevent the appellant from making a living on the suspicion that he may be engaged in activities that may in the future conflict with his employment. The attorney indicated that, having reconsidered its position, the NIB ought to come to the conclusion that terminating his employment or forcing him to abandon his business was unsustainable.

35.          In its response dated 20 August 2012, the acting Director of the NIB (see paral7) pointed out that the appellant had been informed that should he continue to operate his business, his employment with the NIB would be determined. The letter further stated that the appellant in his letter of 2 August indicated that it would be difficult for him to comprehend closing his consultancy business.

36.          In these circumstances, it would have been reasonable for the NIB to conclude that the appellant had no intention of closing his consultancy business. Having regard to this, the NIB could further have concluded that affording the appellant a hearing would not have made any difference as he had made it clear that he did not intend to close his consultancy business. The Labour Tribunal was justified in finding that the appellant had ignored the various correspondence from the NIB relating to conflict of interest.

37.          The approach which the Labour Tribunal was required to adopt in determining whether the dismissal of an employee under section 69(3) of the Ordinance was unfair is set out in British Home Stores LTD v. Burchell [1978] IRLR 379, where it was stated:

“What the Tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further. It is not relevant, as we think, that the Tribunal would itself have shared that view in those circumstances. It is not relevant, as we think, for the Tribunal to examine the quality of the material which the employer had before him, for instance to see whether it was the sort of material, objectively considered, which would lead to a certain conclusion on the balance of probabilities, or whether it was the sort of material which would lead to the same conclusion only upon the basis of being 'sure' as it is now said more normally in a criminal context, or, to use the more old-fashioned term, such as to put the matter 'beyond reasonable doubt'. The test, and the test all the way through, is reasonableness; and certainly, as it seems to us, a conclusion on the balance of probabilities will in any surmisable circumstance be a reasonable conclusion.”

38.          This approach was adopted by Mr. Justice Elias in Associated Society of Locomotive Engineers and Firemen v Brady [2006] IRLR 576 where he stated in paras 51:

“[51] In Devis v Atkins [1977] IRLR 314 at 318 Viscount Dilhorne addressed the reason for dismissal in the following terms:

'The decision of the Court of Appeal in Abernethy v Mott, Hay and Anderson [1974] IRLR 213, was on the 1971 Act. Lord Denning MR said that the reason shown for the dismissal "must be a reason in existence at the time when he is given notice. It must be the principal reason which operated on the employer's mind. "He went on to say that it must be made known to the man before he is given notice or told to him at the time. I do not see anything in the Act which makes it a condition of fair dismissal that the man dismissed must know before he is given notice or told at the time that he is given notice the reason for it. I prefer the view of Cairns LJ, who said:

"A reason for the dismissal of an employee is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee. If at the time of his dismissal the employer gives a reason for it, that is no doubt evidence, at any rate as against him, as to the real reason, but it does not necessarily constitute the real reason. He may knowingly give a reason different from the real reason out of kindness ...'"

The judge continued at para 53:

“[53] The proper approach to s.98(4) was established in the seminal case of British Home Stores v Burchell [1978] IRLR 379at 380, in the following terms by Arnold J:

'What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily, dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case”

39.          In my view a fiduciary relationship existed between the appellant and the respondent. I accept the submission that a fiduciary is prevented from putting himself in a position where there is a possibility of conflict between his interest and duty. It is accepted also that the no conflict rule is a rule of law and does not depend on contract, though it is possible to exclude the rule by the use of clear contractual language. In this case, the no conflict rule was not excluded in the appellant’s contract of employment. I accept that the advice given by the respondent was that the respondent would prefer for him not to provide the consultancy services at all, but that if he went against this, he should avoid situations where conflicts of interest may arise. This advice had also previously been given by Mr. Gardiner but the appellant did not accept it. The appellant had been put on notice as far back as 2010 of the potential conflict of interest.

I find that there is merit in the submission that even if the letter of 13 September 2010 was consent, that consent was withdrawn by the letter of 31 July 2012.

40.          The Tribunal found as a fact that the appellant was dismissed under clause 18(b) of his contract of employment. The Tribunal was entitled to come to the conclusion that the appellant by putting himself in a position of conflict and insisting on continuing in that position was guilty of serious misconduct entitling the respondent to dismiss him.

41.          On the question of whether or not there was a conflict of interest, I accept the submission that it was not necessary for the respondent to prove that an actual conflict of interest arose in a particular case. Consequently in my opinion tthe failure of the Tribunal to point to a specific finding of actual conflict does not render its findings perverse; the possibility of a conflict was sufficient. The respondent contended that the potential impact of being in a conflict situation could be very damaging. The respondent argued that the difficulty with the appellant’s position and his consulting business was that as a consultant he would be dealing with immigration work permits and NIB clearance certificates. At the same time, the appellant would be conducting assessments in his capacity as a compliance officer to determine how much employers should be paying in National Insurance and leading investigations, which impact on whether or not a Labour clearance or work permit was issued.

42.          The Tribunal did give reasons as to why the appellant was dismissed contrary to the assertion in ground 4(iv) of the Notice and Grounds of Appeal. The reasons are set out in para 24 of the decision where the Tribunal states that the decision was based on clause 18(b) of the Appellant’s contract of employment as well as the no conflict rule set out in the policy manual. This clause states that the Appellant could be terminated for serious misconduct which is directly related to the employment relationship. I accept that it is clear that the Tribunal was of the view that the Appellant was guilty of serious misconduct.

43.          This Court is mindful of what was said by Waite J in Royal Society for the Protection of Birds v Groucher [1984] ICR 604:

“We have to remind ourselves also of the important principle that decisions are not to be scrutinized closely word by word, line by line, and that for clarity’s and brevity’s sake industrial tribunals are not to be expected to set out every factor and every piece of evidence that has weighed with them before reaching their decision; and it is for us to recall that what is out of sight in the language of a decision is not to be presumed necessarily to have been out of mind. It is our duty to assume in an industrial tribunal’s favour that all the relevant evidence and all the relevant factors were in their minds, whether express reference to that appears in their final decision or not; and that has been well- established by the decisions of the Court of Appeal in Retarded Children’s Aid Society Ltd. v Day [1978] I.C.R. 437 and in the recent decision in Varndell v. Kearney & Trecker Marwin Ltd. [1983] I.C.R. 683.”

This was adopted by Elias J in Associated Society of Locomotive Engineers & Fireman v Brady [2006] IRLR 576, paragraph 55.

“[55]The EAT must respect the factual findings of the employment tribunal and should not strain to identity an error merely because it is unhappy with any factual conclusions; it should not ‘use a fine tooth comb ’ to subject the reasons of the employment tribunal to unrealistically detailed scrutiny so as to find artificial defects; it is not necessary for the tribunal to make findings on all matters of dispute before them not to recount all the evidence, so that it cannot be assumed that the EAT sees all the evidence; and infelicities or even legal inaccuracies in particular sentences in the decision will not render the decision itself defective if the tribunal has essentially properly directed itself on the relevant law.”

44.          As regards to the claim for discrimination and victimization, the Tribunal stated at para 27:

“[27] Based on the Applicant’s claim of discrimination and Victimization the Tribunal finds no clear line of evidence to highlight these behaviours with the Respondent pursuant to sections 49, 53 (2) and 54 of the Employment Ordinance, 2004:

49. Where by virtue of any provision of this Part, it would be unlawful, in particular circumstances, for a person to discriminate against another person on the grounds set out in section 35(2), it is unlawful for that person to request or require that other person to provide information (whether by way of completing a form or otherwise) that would not, in the same or substantially similar circumstances be required or requested of the person of the opposite sex, or of a different race, religion, colour, political opinion, ethnic origin, indigenous population, social origin, pregnant state or marital status or with different family responsibilities.

53 (2) For the purposes of subsection (1) a person shall be taken to commit an act of victimization against another person if the first-mentioned person subjects or threatens to subject the other person to any deteriment-

(a)           on the ground that the other person-

(i)            has made, or proposes to make, a complaint under this Ordinance;

(ii)           has brought, or proposes to bring proceedings under this Ordinance against any person;

(iii)         has furnished or proposes to furnish, any information, or has produced or proposes to produce, any documents to a person exercising or performing any power or function under this Ordinance;

(iv)          has attended or proposes to attend an inquiry under this Ordinance or to provide evidence or testimony as a witness; or

(v)           has made a good faith allegation that a person has committed an act of discrimination in contravention of this Ordinance.

(b)           on the ground that the first-mentioned person believes that the other person has done, or proposes to do an act or thing referred to in paragraph (a)(i) to (v).

54. Except where otherwise provided in this Ordinance, the person alleging a violation of this Part shall bear the burden of presenting a prima facie case of discrimination or of an offence related to the discrimination under this Ordinance. Upon a prima facie showing of discrimination, the burden of persuasion shall shift to the respondent to disprove the allegations.”

45.          In May v Secretary of State for Transport UKEAT/0270/14/JOJ, Judge Serota, Q.C. stated at paras 73 and 74:

“[73] I also refer to the well-known authority of Royal Society for the Protection of Birds v Croucher [1984] IRLR 425, [1984] ICR 604 (Waite J). The Employment Appeal Tribunal had this to say:

"We have to remind ourselves also of the important principle that decisions are not to be scrutinised closely word by word, line by line, and that for clarity's and brevity's sake industrial tribunals are not to be expected to set out every factor and every piece of evidence that has weighed with them before reaching their decision; and it is for us to recall that what is out of sight in the language of a decision is not to be presumed necessarily to have been out of mind. It is out duty to assume in an industrial tribunal's favour that all the relevant evidence and all the relevant factors were in their minds, whether express reference to that appears in their final decision or not; and that has been well-established by the decisions of the Court of Appeal in the Retarded Children's Aid Society Ltd v Day [1978] ICR 437 and in the recent decision in Varndell v Kearney & Trecker Marwin Ltd [1983] ICR 683." (Page 609)

[74] Factual findings of an Employment Tribunal can only effectively be challenged on what might be described as Wednesbury grounds; that is to say that the Employment Tribunal misdirected itself in law, ignored significant material, or took into account irrelevant material, or was under a misapprehension as to the facts. An Employment Tribunal is not required to refer to all arguments put before it (however important the parties may consider these) and may limit itself to those it considers material and necessary. ”

46.          It was for these reasons that I dismissed the appeal.

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Mottley J.A

I concur.

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Zacca, P

I concur.

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Forte, J.A