ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ SEROTA QC
Strand, London, WC2A 2LL
B e f o r e :
VICE PRESIDENT OF THE COURT OF APPEAL
LORD JUSTICE ELIAS
SIR STEPHEN SEDLEY
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Mr Jason Galbraith-Marten and Ms Sheryn Omeri (instructed by Kennedys Solicitors) for the Respondent
Hearing date : 9 October 2012
Crown Copyright ©
Lord Justice Elias :
"It is correct that in the course of the Hearing the Judge did observe that there are no instances of potentially suspect tickets having been issued "en bloc" but that rather the evidence relied upon points to a single, usually low value, ticket being generated occasionally and usually only once per shift. Whilst the Judge might, therefore, have been inclined to question the likelihood of this pattern being in fact indicative of the dishonesty alleged it is highly significant that the lay members of the tribunal have no such scruples. From their long experience of both sides of industry both Mr Bratby and Mrs Bullock readily accept that the evidence before the Respondents was more than sufficient to justify the conclusion that this was indeed indicative of repetitive, albeit spasmodic pilfering, and that the relatively low sums involved are not at all atypical of this type of dishonesty in the workplace. There is certainly no reason to say that the view taken by the Respondents was, therefore, outside the band of reasonable responses. To hold otherwise would indeed be inappropriately to substitute our own view for that of the reasonable employer with specific knowledge of their own industry."
The decision of the Employment Tribunal on the Article 8 points.
"It is not immediately obvious, on a reading of section 98 without reference to a particular set of facts, as to how it could be incompatible with or be applied so as to violate article 8 and article 14 and so attract the application of s3. Considerations of fairness, the reasonable response of a reasonable employer, equity and substantial merits ought, when taken together, to be sufficiently flexible, without even minimal interpretative modification under s3, to enable the employment tribunal to give effect to applicable Convention rights. How, it might be asked, could the proper application by the employment tribunal of the objective standards of fairness, reasonableness, equity and the substantial merits of the case result in the determination of a claim for unfair dismissal that was incompatible with article 8?"
The statutory provisions.
"(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show –
"(a) the reason (or, if more than one, the principal reason) for the dismissal,
(b) that it is either 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."
"In any case where the employer has fulfilled the requirements of sub-section (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 treating it as a sufficient reason for dismissing the employer, and
(b) shall be determined in accordance with equity and the substantial merits of the case."
"…(4) In applying that subsection, the employment tribunal must decide on the reasonableness of the employer's decision to dismiss for the "real reason". That involves a consideration, at least in misconduct cases, of three aspects of the employer's conduct. First, did the employer carry out an investigation into the matter that was reasonable in the circumstances of the case; secondly, did the employer believe that the employee was guilty of the misconduct complained of; and, thirdly, did the employer have reasonable grounds for that belief. If the answer to each of those questions is "yes", the employment tribunal must then decide on the reasonableness of the response of the employer.
(5) In doing the exercise set out at (4), the employment tribunal must consider, by the objective standards of the hypothetical reasonable employer, rather than by reference to its own subjective views, whether the employer has acted within a "band or range of reasonable responses" to the particular misconduct found of the particular employee. If it has, then the employer's decision to dismiss will be reasonable. But that is not the same thing as saying that a decision of an employer to dismiss will only be regarded as unreasonable if it is shown to be perverse.
(6) The employment tribunal must not simply consider whether they think that the dismissal was fair and thereby substitute their decision as to what was the right course to adopt for that of the employer. The tribunal must determine whether the decision of the employer to dismiss the employee fell within the band of reasonable responses which "a reasonable" employer might have adopted.
(7) A particular application of (5) and (6) is that an employment tribunal may not substitute their own evaluation of a witness for that of the employer at the time of its investigation and dismissal, save in exceptional circumstances.
(8) An employment tribunal must focus their attention on the fairness of the conduct of the employer at the time of the investigation and dismissal (or any appeal process) and not on whether in fact the employee has suffered an injustice."
"It was made clear in Iceland Frozen Foods Ltd. v. Jones  ICR 17 , 25 b-d , that the provisions of section 57(3) of the Employment Protection (Consolidation) Act 1978 (which were re-enacted in section 98(4) of the Employment Rights Act 1996 ) did not require "such a high degree of unreasonableness to be shown that nothing short of a perverse decision to dismiss can be held to be unfair within the section." The tribunals were advised to follow the formulation of the band of reasonable responses approach instead. If an employment tribunal in any particular case misinterprets or misapplies that approach, so as to amount to a requirement of a perverse decision to dismiss, that would be an error of law with which an appellate body could interfere."
"Serious allegations of criminal misbehaviour, at least where disputed, must always be the subject of the most careful investigation, always bearing in mind that the investigation is usually being conducted by laymen and not lawyers. Of course, even in the most serious of cases, it is unrealistic and quite inappropriate to require the safeguards of a criminal trial, but a careful and conscientious investigation of the facts is necessary and the investigator charged with carrying out the inquiries should focus no less on any potential evidence that may exculpate or at least point towards the innocence of the employee as he should on the evidence directed towards proving the charges against him."
This dictum was approved by the Court of Appeal in Salford Royal NHS Foundation Trust v Roldan  ICR 1457 para 13.
The grounds of appeal.
(1) Section 3 of the Human Rights Act requires that, where possible, legislation should be construed so as to be in conformity with the requirements of the Convention. Even though the respondent is not a public authority, the Section 3 obligation does not distinguish between legislation governing public authorities and that governing private individuals. Section 98(4) should if possible be read compatibly with Article 8, and the fact that the employee could not directly enforce Convention rights against this respondent employer is immaterial.
(2) The consequences of the dismissal in this case were of a nature and quality to engage Article 8 rights.
(3) Strasbourg authorities establish that respect for Article 8 rights requires the employer to comply with certain procedural safeguards before taking steps that will infringe those rights. This is a necessary part of the Article 8(2) evaluation.
(4) It is for the court to determine whether what is colloquially known as the proportionality test in Article 8(2) is met. This includes being satisfied that fair procedures, including fair and proper investigations, have been adopted.
(5) The Employment Tribunal did not adopt that approach; it simply applied the traditional unfair dismissal test, asking itself whether a reasonable employer could consider that the investigations undertaken were adequate. That is not a sufficiently rigorous evaluation of the fairness of the investigations.
(6) Had the Employment Tribunal adopted the appropriate Article 8 test, it might have reached a different conclusion as to whether the procedures were adequate. If it had concluded that Article 8 had not been complied with, it would have been compelled to find the dismissal unfair.
(7) Hence the decision of the Employment Tribunal should be quashed and the case should be remitted to another tribunal to hear the matter afresh.
(1) Article 8 rights were not engaged, not least because such adverse consequences as resulted from the decision were brought about by the employee's own conduct.
(2) In any event the band of reasonable responses test provides a sufficiently objective test to satisfy any Article 8 procedural obligation to act fairly, as the Employment Tribunal rightly concluded.
(3) Even if the Article 8 procedural test is more rigorous, any failure by the Employment Tribunal to apply the right test is immaterial in this case since the procedures were manifestly fair and were in accordance with any sensible objective test that could be applied.
(4) It is not, and could not be, contended that dismissal was not a fair sanction once a proper finding of dishonesty had been made.
(5) Accordingly, the dismissal was clearly fair, as the Employment Tribunal found.
Was Article 8 engaged?
"Article 8 – Right to respect for private and family life
(1) Everyone has the right to respect for his private and family life, his home and his correspondence.
(2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others."
"a person's reputation, even if that person is criticised in the context of a public debate, forms part of his or her personal identity and psychological integrity and therefore also falls within the scope of his or her private life".
In that case a person had committed suicide as a result of a highly critical article. In Petrenco v Moldova  EMLR 5, another case involving an alleged defamatory newspaper article, the Strasbourg court held that a state's positive obligation to protect Article 8 rights might require it to take steps to protect the right to reputation from interference by private bodies.
"The ban has, however, affected the applicants' ability to develop relationships with the outside world to a very significant degree, and has created serious difficulties for them as regards the possibility to earn their living with obvious repercussions on their enjoyment of their private life."
"…It cannot be said that, because an activity allows an individual to establish and develop relationships, it falls within the scope of Article 8 such that any regulation of that activity will automatically amount to an interference with that individual's private life."
Article 8 and the employee's own conduct.
"[Article 8] cannot be relied upon in order to complain of a loss of reputation which is the foreseeable consequence of one's own actions such as the commission of a criminal offence."
"[The court] notes however that the applicant had never been convicted of the commission of the offences in relation to which he had been dismissed. His responsibility in this respect had never been determined or established in criminal, civil or even disciplinary proceedings while the officers under his command had been acquitted of the offences with which they had been charged and the domestic court had found that there had been no case for the defence to answer."
Procedural fairness and Article 8.
"While there are no explicit procedural requirements contained in Article 8, the case law of the Commission and Court establish that in this area, where decisions may have a drastic effect on the relations between parent and child and become irreversible, there is particular need for protection against arbitrary interferences. In a case where it was alleged that the local authority had not consulted the parents of a child in its care before taking crucial decisions as to its future, the Court adopted the following approach:
In the Court's view, what therefore has to be determined is whether, having regard to the particular circumstances of the case and notably the serious nature of the decisions to be taken, the parents have been involved in the decision-making process, seen as a whole, to a degree sufficient to provide them with the requisite protection of their interests. If they have not, there will have been a failure to respect their family life and the interference resulting from the decision will not be capable of being regarded as 'necessary' within the meaning of Article 8."
"the decision making process leading to measures of interference must be fair and such as to afford due respect to the interests safeguarded to the individual by Article 8."
"In particular, the Court will examine whether the procedural protection enjoyed by the applicant at the domestic level in respect of his right to respect for his private life under Art.8 of the Convention was practical and effective and consequently compatible with that Article."
Bringing the consequences on herself.
Is there a difference between the two tests?
"Disciplinary authority is one of the essential prerogatives of the employer, whether private or public. In this connection employers have a broad discretion to impose the sanction that they consider the best adapted to the accusations against the employee; the scale of possible sanctions encompasses the power to dismiss a person who has seriously compromised the interests of the company or the public service. In parallel, this power of dismissal is accompanied by a prohibition on dismissing employees on grounds relating to trade-union activity. A measure of dismissal may be based on misconduct or on a legitimate ground. In the first case it relates to a given – identified – form of conduct. In the second, the conduct is considered in general terms."
"Moreover, an examination of the comparative-law material available to the Court reveals that employers generally enjoy broad discretion in determining the sanction that is best adapted to accusations against an employee; the scale of possible sanctions encompasses the power to dismiss a person who has seriously compromised the interests of the company. In the countries examined, the domestic legislation seeks to reconcile the employee's right to freedom of expression with the employer's rights and prerogatives, requiring in particular that a dismissal measure be proportionate to the conduct of the employee against whom it is taken. The homogeneity of European legal systems in this area is a relevant factor in balancing the various rights and interests at stake in the present case."
"the measure of dismissal taken against the applicants was not a manifestly disproportionate or excessive sanction…"
The word "manifestly" of itself suggests that some deference should be paid to the views of management that dismissal is an appropriate sanction.
The alleged procedural failures in this case.
(1) The appellant claimed that sometimes when her machine issued an ANI this was because the machine was temporarily broken. She would return to the back cab and fix the machine. It may be that one of the ticket inspectors (those who inspect tickets and randomly check that passengers have bought tickets) may have sold passengers the appropriate ticket before the appellant had fixed her machine and been able to do so. The appellant submitted that the employers would have been able to show from their records which inspectors were on the appellant's train during various journeys and for what stages of those journeys, and that might have indicated that there were occasions when this had in fact happened.
(2) The appellant contended that she had particular problems with the Avantix machine and was regularly returning to the back cab to fix it.
(3) She contended that it was extremely difficult to manipulate an Avantix machine so as to produce a sufficiently authentic ANI.
(4) She also claimed that the ANIs had not necessarily been retained satisfactorily by the employers and some of her missing ANIs could be ascribed to the fact that they may have been lost after having been returned by her.
"The explanation for not pursuing this line of enquiry is perfectly satisfactory. It does not constitute a failure on the part of any investigating officer to look for exculpating matters. This is not, of course, any more than a possible means of establishing that at some point an identical ticket to one of the missing ANIs may have been issued by another person, it would not establish that this was in fact a replacement ticket in any particular case nor would it answer the question of why the ANI was missing or go directly to the issue of why the claimant had a disproportionate number of suspicious ANIs."
If the test is different, would it have made any difference?
Sir Stephen Sedley:
Lord Justice Maurice Kay: