Appeal No.	 EAT/283/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 July 1998

Before
THE HONOURABLE MR JUSTICE MORISON (PRESIDENT)
MR E HAMMOND OBE
MR J A SCOULLER

GOLDWELL (Hair Cosmetics) LTD	APPELLANTS

MR J R HOPE	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING - EX PARTE

Revised

	APPEARANCES

For the Appellants

MR M WEST
(Senior Advocate)
Peninsula Business Services Ltd
Stamford House
361-365 Chapel Street
Manchester
M3 5JY

	MR JUSTICE MORISON (PRESIDENT):	The purpose of this hearing is to determine whether there is any arguable point of law in an appeal which the employers wish to make against part of a decision of an Industrial Tribunal which was given after a five day hearing. The tribunal had sat at Bedford under the Chairmanship of Mr Robjant. The terms of their decision were reduced to writing and sent to the parties on 17th December 1997.

	Before turning to the issues raised by this hearing, I would like on behalf of the Employment Appeal Tribunal to pay tribute to the Industrial Tribunal in this case for the extremely clear and succinct way in which they have addressed very complicated issues which were presented to them.

	The applicant had made a complaint saying that he was owed money as at the date of the termination of his contract of employment and that there had been an unlawful deduction from wages within the meaning of s. 23 of the 1996 Act.

	In turn, the employers presented a counterclaim for the losses which they say they had sustained as a result of the applicant improperly carrying out his duties on their behalf.

	The applicant’s claims were numerous and were listed in detail in the Industrial Tribunal’s decision. Essentially, he succeeded only in relation to two of them. That is payment in relation to a telephone bill which he was entitled to have paid by the employers, a sum of £39.85; and a more disputed item, namely, commission which he said was outstanding and due to him. He was awarded £1,563.14 in relation to that. There are no appeals in relation to those two items.

	The Industrial Tribunal rejected the employers’ counterclaim.

	The employers are engaged in the business of supplying hair products to the trade, either to hairdressing salons or to the cash and carry market. 

	Mr Hope was employed by them as a salesman. It was his responsibility to make sales to the two outlets and he was provided with a handheld computer terminal so that, in theory, the employers could monitor his sales. He appeared to the employers to have been a successful salesman until they had their concerns raised as a result of things that occurred towards the end of his employment. The applicant eventually resigned due to ill-health.

	The Industrial Tribunal’s conclusion in relation to the counterclaim is succinctly set out in paragraphs 21 through to 27 of their decision. They first asked themselves the question whether they were satisfied, on the balance of probabilities, that the applicant had broken his contract of employment. They said this:

“21. ... But the Tribunal have no doubt from the evidence that the Applicant well knew that what he was doing was improper. He was using his own home address for delivery. He used the address of relatives for the invoices. He had used his own account for personal trading with his employers, and had deliberately and deceitfully taken over the Split Enz and Head Office accounts as a vehicle for his scheme. The Tribunal is satisfied that the Respondents have established the Applicant’s potential liability to them in damages as a result of his conduct.”

The tribunal then proceeded to ask themselves the question whether the employers had established any loss following that breach. Again they correctly directed themselves as to the standard of proof that is required in a case such as this. They noted that the employers produced a table which showed invoice prices, corrected prices and a difference, recording a difference of £6,662.66, which, the employers said, was their provable loss in relation to the proved breach.

	For his part, the applicant produced a table which was constructed in the same way as the employers’ table in order to demonstrate that the employers’ figures were unreliable. He was able to demonstrate through his figures a different invoice price, a different corrected price and produced a difference, not £6,662.66 but of £1,885.78.

	The Industrial Tribunal when faced with this material in the end were unable to place any reliance on the figures for quantum which the employers had produced. The reason why they arrived at their conclusion is admirably set out in paragraphs 25 through to 27. I can summarise in this way: The first point they noted was that the employers had a system of pricing that was extremely flexible and reflected the marketing conditions from time to time. We understand them to be saying that it was therefore quite difficult to say at what price the goods that were improperly dealt with should have been sold. They commented that the respondents accounting procedures left much to be desired. That was obviously a relevant fact when looking at the reliability of the information with which they had been provided. They went on to say that they were quite simply puzzled as to where the respondents’ “corrected price” had come from, and that they simply did not believe the respondents’ figures in the light of what they had learnt about the respondents’ marketing procedures. It seems to us that those findings were ones which were for the industrial jury to arrive at. We see quite readily how they have managed to arrive at their conclusion.

	They then asked themselves the sensible question, did the applicant by putting forward his own table effectively concede that there was at least £1,800 odd owing. They answered that by saying “no”. That was not a concession by the applicant. The table, as I understand it, was put before the tribunal in order to demonstrate the weakness of the evidence given by the employers. The tribunal concluded in this way:

“27.    These findings therefore place the Tribunal in the position, where we are satisfied that there is a potential claim by the Respondents against the Applicant, but we are not satisfied as to the quantum of that claim. There is nothing in the evidence that we have heard, that would assist us in identifying any other figure for quantum than the two figures discussed above. It is not the Tribunal to invent or assess any other figure without reliable evidence to support it on the balance of probabilities. We have therefore come to the conclusion that we can make no finding as to the quantum of the Respondent’s claim and in the circumstances that claim must be dismissed.”

	On behalf of the appellant employer, Mr West submits that the tribunal’s conclusion should be characterised as perverse. He points out that during the course of the hearing Mr Hill, on behalf of the employers, gave evidence as to the table which he produced, and that the tribunal did not appear to be questioning, at that time, the reliability of the figures contained in the table. In effect, I think, he is submitting to us that the rejection of the counterclaim on the basis that the figures were unreliable came as something as a surprise to his clients.

	It seems to us that there is no room for an argument on perversity in this case, having regard to the terms of the decision to which I have drawn attention. The fact that the tribunal did not raise with Mr Hill themselves any concerns that they were having about the reliability of the figures, is not a ground for an appeal to this tribunal. It may well be that they were simply assessing the evidence as it was given to them without seeking to intervene or descend into the arena in a way which might have attracted criticism. They are not obliged to express concerns during the course of a hearing. They are simply obliged to receive the material and to pass judgment upon its reliability in due course.

	We are not persuaded that surprising though in one sense the result might be, the decision of the Industrial Tribunal on the counterclaim can be faulted in any way. It was for the employers to prove their loss. They failed to do so for the reasons the tribunal gave. Accordingly, we do not believe that there is an arguable point of law and the appeal must be dismissed.