Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2010/05856_09IT.html
Cite as: [2010] NIIT 05856_09IT, [2010] NIIT 5856_9IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 05856/09

CLAIMANT: Gordon Watton

RESPONDENT: Ten Square Hotel

DECISION

The unanimous decision of the tribunal is that the claimant’s claim of unfair dismissal is dismissed.

Constitution of Tribunal:

Chairman: Mr I Wimpress

Panel Members: Mr Hunter

Mr Killen

Appearances:

The claimant was represented by Mr O’Neill of NIPSA.

The respondent was represented by Mr Mercer, Barrister-at-Law, instructed by C & H Jefferson, Solicitors.

The Claim and the Response

1. The claimant brought a claim of unfair dismissal against the respondent arising from the termination of his employment as a bar manager. The dismissal was for misconduct and arose from a shortfall of £7,394 in monies that the claimant was responsible for. In his claim form the claimant denied that he was guilty of misconduct and queried the adequacy of the investigation, the fairness of the procedures with particular reference to the failure to provide information and documentation and the severity of the sanction imposed. The claimant also denied that he was solely responsible for the money and drew attention to disciplinary action taken against other staff members in respect of same. In its response the respondent stated that the claimant was summarily dismissed for gross misconduct that it complied with all requests for relevant information and set out in detail the basis for the disciplinary action that was taken.

The Issues

2. The sole issue for the tribunal was whether the claimant was unfairly dismissed from his employment.

Sources of Evidence

3. The tribunal received a bundle of documents from both parties and heard evidence from the claimant, Mr Kevin Smyth, Mr Raymond McGreevy and Mr Ronan Boyle.

The Facts

4. On 16 January 2009, the claimant met with the hotel owner, Mr Miskelly, and informed him that his safe float was short. The claimant advised Mr Miskelly that he first noticed a problem some 10 weeks previously but did not inform anyone of his concerns. Mr Miskelly asked Mr Smyth, the general manager, to join the meeting and the claimant went over the matter again. The claimant was unable to offer any explanation as to why the safe float was short but accepted that he was responsible for the money and offered to take out a bank loan to pay it back. Mr Smyth commenced the first of several safe counts which revealed that the safe float was £9,317.74 down. The claimant then produced £2,160 from another safe without any explanation and this reduced the shortfall to £6,977.74.

5. A second safe count took place on Monday 19 January which revealed a shortage of £6,952.16. Mr Smyth asked the claimant to make a full statement as soon as possible and deliver it to him. Further checks were carried out by the respondent's head office and accounts office. These showed that no additional funds had been lodged and that all monies were accounted for. A third safe count was completed on Wednesday 21 January and this produced a shortfall of £7,207.01. Mr Miskelly and Mr Smyth questioned the claimant further but he was unable to provide any explanation for the shortfall. Mr Smyth reminded the claimant that he required a full statement from him as soon as possible. The claimant still had not produced a statement by 7.30 pm on Thursday 22 January and as a result Mr Smyth instructed the claimant to write up his statement immediately as it was needed the following morning at 9.00 am.

6. On the morning of Friday 23 January the claimant still had not produced a statement as instructed and was not contactable until late afternoon. On checking the rotas, Mr Smyth discovered that the claimant had scheduled himself on holiday on Saturday 24 January and Sunday 25 January. A fourth and final safe count revealed a shortfall of £7,394.00.

7. The claimant returned to work on Monday 26 January without producing a statement. Mr Smyth asked the claimant to explain why he had not produced a statement and the claimant replied that he was too busy. Mr Smyth advised the claimant that he was suspending him on full pay pending the outcome of the investigation and requested him to return his safe and store key.

8. The claimant finally produced a short statement later on the same day. In the statement the claimant indicated that he had first become aware of a problem some months previously when Lea Takacsova from Accounts told him that he should be making two lodgements. The claimant advised her that he was only to make one lodgement and as nothing more came of it he assumed that it was an error. This reoccurred some 10 to 12 weeks prior to 26 January. The claimant thought that the problem would right itself and he continued to make regular lodgements. The remainder of the statement consisted of requests for information of various types. This included a request for relevant CCTV footage. The statement concluded with a request that Head Office Human Resources should become involved both in order to resolve the matter which was causing him considerable stress and to negate any potential conflict of interest arising from management investigating management.

9. On 30 January 2009, Mr Smyth wrote to the claimant and invited him to attend an investigatory meeting on 4 February 2009. The letter set out seven potential breaches of the respondent's Code of Conduct which were to be examined at the meeting as follows:

“(1) Failure to account for a shortfall of £7,394.00 in change float in the main safe.

(2) Failing to inform the company that the amount could not be accounted for at least 10 weeks prior to 16 January 2009.

(3) Failings in your duties as Bar Manager in respect of 1 and 2 above.

(4) Breach of trust and confidence.

(5) Failing to drop money previously not dropped from holding safe.

(6) Failing to provide an explanation for 5 above.

(7) Failing to carry out a reasonable request from a senior member of staff.”

10. The investigatory meeting took place on 4 February 2009 and was chaired by Mr Smyth. Mr McGreevy from the Group Human Resources attended primarily to take a note of the meeting. The meeting was also tape recorded but due to an equipment failure towards the end of the meeting, the record of the latter part of the meeting was confined to Mr McGreevy's handwritten note. Rosie Boyce of the Ten Square Human Resources Department was also in attendance. The claimant attended with his trade union representative, Mr O'Neill. The claimant was offered the opportunity by Mr Smyth to provide an explanation as to why he had not accounted for the missing money. In response the claimant said that he had lost the money and that an error had occurred. The claimant also mentioned the previous problem involving Lea Takacsova asking him to make two lodgements or drops rather than one and he was questioned at length by Mr Smyth about the procedure for lodging change bags. The claimant was also asked how long he had been aware of the discrepancy and he replied that he had known for about 10 to 12 weeks and that he had continued lodging money as he was hoping that another lodgement would come back thereby making up the shortfall. The claimant was asked to provide an explanation as to why he had failed over a ten week period to inform the respondent about the discrepancy and the claimant again stated that he thought that it was an error in the office and that the money would come back to him. The claimant also claimed that he intended telling Mr Miskelly about it on 23 December 2008 but that in the event he did not do so but did refuse to accept a Christmas bonus from Mr Miskelly. According to the claimant this was because he felt “sick to his stomach” about the missing monies. The claimant was asked whether he had made any attempt to disclose the discrepancy to anyone in authority and the claimant replied that he spoke to his wife and brother-in-law about putting money back. The claimant accepted that he should have told Mr Smyth about it sooner. Mr Smyth also asked the claimant why the £2,160 in the holding safe had not been dropped and the claimant explained that it was Joanne Hunniford's safe and had nothing to do with him. The claimant was also asked about his unavailability to do a safe count when requested on 22 January 2009 and the claimant explained that he was unwell and had to go home. The claimant was asked about his delay in making a statement and the claimant replied that this was due to holidays and shift patterns. The claimant was also given an opportunity to ask questions. The claimant took up this offer. The claimant asked whether an audit should be done and enquired about CCTVs and problems with computer systems crashing. As appears from the record of the meeting Mr Smyth was doubtful about the relevance of these matters. Mr Smyth closed the meeting by reminding the claimant that he remained suspended on full pay pending the outcome of the disciplinary process and that he was not to enter the respondent's premises or make contact with any employee.

11. On 16 February 2009, Mr Smyth wrote to the claimant and advised him that the matter would proceed to a disciplinary hearing based on five of the seven charges which if proven would constitute gross misconduct and that one of the possible sanctions would be the termination of his employment. The charges relating to the failure to drop money were not proceeded with. The claimant was invited to attend a disciplinary hearing on 3 February 2009. In the event the hearing ultimately took place on 20 February 2009.

12. Mr Smyth again chaired the hearing with Mr McGreevy acting as note taker. The claimant attended with his trade union representative, Mr O'Neill. The claimant complained about Mr Smyth personally delivering a letter to his house on 16 February despite his request that material should not be left at his house. The claimant also complained about not being provided with handwritten notes of the investigatory meeting or with any papers and documents prior to the meeting. Mr McGreevy apologised and explained that the claimant's request was overlooked due to the urgency of the matter and that the handwritten notes would be made available to enable the claimant to verify their authenticity. Mr McGreevy offered to adjourn the proceedings so that he could do so. The claimant also alleged that Mr Smyth offered him the opportunity to pay back the missing monies and resign. Mr Smyth denied that this occurred. There then followed an exchange about the provision of excel spread sheets. The claimant accepted that he had received these but said that he also wanted copies of Lea Takacsova’s change orders for the previous ten to twelve weeks. Mr Smyth queried the relevance of this material. The claimant persisted with his request for records and widened the request to include G4S delivery records so that he could check these against the lodgements and the reconciliation of the records. Mr Smyth pointed out that this was irrelevant as the claimant was not making matching lodgements. The claimant indicated that he was not disputing the amounts of the missing monies. The discussion about the provision of documentation continued and Mr McGreevy offered the claimant an adjournment but Mr O' Neill declined this offer on the basis that they had all of the evidence that was being relied on. Mr McGreevy repeated his offer of an adjournment and Mr O'Neill responded by seeking a short break.

13. The meeting resumed and the offer of an adjournment was not taken up. Mr Smyth then questioned the claimant about the matters with which he was charged. The claimant was asked if he had anything to add and in response he commented about the record of the investigatory meeting not being agreed. Mr Smyth offered the claimant an opportunity to go through the notes but the claimant indicated that he was happy to proceed. The questioning of the claimant resumed and the claimant accepted that he was responsible for the shortfall. The claimant then had the opportunity to ask questions, which he took up, and was invited to add anything in the nature of extenuating circumstances. In response the claimant stated that he took full responsibility and that although he did not take the money, he accepted that he was responsible for it. In addition he stated that he would have preferred to have paid some of the money off a couple of months ago if he had been given the opportunity to do so. The meeting then closed and Mr McGreevy indicated that everything would be reviewed and a decision would be given the following Tuesday.

14. On Tuesday 23 February 2009, Mr Smyth gave his decision orally in the presence of the claimant and Mr O'Neill.

(1) Mr Smyth found against the claimant in respect of the failure to account for the shortfall based on the claimant's acknowledgment that he did not have any methods or records in place to account for monies for which he was solely responsible.

(2) Mr Smyth also found against the claimant in respect of his failure to inform the respondent of the shortfall for at least 10 weeks again based on the claimant's acknowledgement that he had failed to do so.

(3) On a similar basis Mr Smyth found against the claimant in respect of failings in his duties as a bar manager.

(4) Mr Smyth found that the claimant had breached his duty of trust and confidence to the respondent.

(5) Mr Smyth found that the claimant had failed to carry out a reasonable request from a senior member of staff in that he had failed to provide a statement when requested without any reasonable excuse.

Mr Smyth considered that the first four charges amounted to gross misconduct and that the appropriate penalty was dismissal. Mr Smyth confirmed the decision in writing by letter dated 24 February and advised that any appeal should be made to Mr Ronan Boyle within 5 working days.

15. The claimant notified Mr Boyle of his intention to appeal by letter dated 2 March 2009. The letter set out eleven separate reasons for the appeal. The first ground alleged that the decision was unfair and unreasonable on the basis that prior to the disciplinary investigation the claimant had offered to address the shortfall, assisted in the initial investigation and had requested information which could have identified where and how the shortfall occurred. The next two grounds were concerned with the failure to provide a tape recording or notes of the investigatory meeting and that the minutes should have been agreed. The claimant alleged that this placed him at an unfair disadvantage at the disciplinary hearing. Two further grounds focussed on failure to provide information. The claimant also complained about being blamed for the shortfall given that a more robust checking system had since been introduced and contended that this meant that the previous systems were either faulty or not in existence. The claimant claimed that he did in fact inform the respondent of the shortfall once he was sure of it and had co-operated since. The claimant disputed that he had failed to comply with the request to provide a statement as soon as possible on the basis that Mr Smyth had not requested it as soon as possible and that he should have had a similar facility. The claimant also alleged that when delivering the papers to his home Mr Smyth stated that if the claimant was still willing to repay the shortfall, he should get the money to Mr Miskelly before Friday and resign, that would be an end to it as, after Friday, it would be out of their hands. The claimant concluded by requesting a copy of the investigation report and the other information previously requested in order to fully prepare for the appeal.

16. The appeal hearing was initially fixed for Tuesday 24 March 2009 but ultimately took place on 9 April 2009 and was heard by Mr Boyle. Both the claimant and Mr O'Neill provided detailed written submissions which elaborated on the grounds of appeal. During the appeal hearing both were also given the opportunity to comment further. It emerged in the course of the appeal hearing that disciplinary action in respect of the shortfall was taken against another person who was also found guilty of gross misconduct but was not dismissed. At the conclusion of the hearing Mr Boyle indicated that he would give his decision within 14 days.

17. On 24 April 2009, Mr Boyle wrote to the claimant and advised him that he was upholding Mr Smyth's decision to dismiss him. Mr Boyle stated that it would be inappropriate to reduce the penalty of dismissal to another form of penalty short of dismissal and that and as the most significant proportion of the breaches of discipline found against the claimant constituted gross misconduct, dismissal was appropriate. Mr Boyle also noted that no new evidence or material had been introduced at the appeal hearing.

Submissions

18. On behalf of the claimant, Mr O'Neill emphasised the absence of any training being provided when the claimant was given responsibility for the safe. Mr O’Neill also pointed out that a more robust system had since been introduced. Mr O’Neill submitted that the claimant had requested information to assist him in finding where the shortfall had occurred and that this had been consistently denied. Mr O'Neill also criticised the investigation as being insufficient and the standard of minute taking which should have been agreed before the process moved on and about material being delivered to the claimant only a few days before the disciplinary hearing. Mr O'Neill also pointed out that it was only revealed at the appeal hearing that disciplinary steps were taken against another person in respect of the shortfall and commented that this was unfortunate timing for the claimant. Mr O'Neill drew attention to the fact that the claimant had raised issues about faults in the drop safe and in particular that monies had been found in the safe unopened. Mr O’Neill commented that despite this it was maintained throughout the process that the claimant was solely responsible for the safe and lodgements to the drop safe. Mr O’Neill also submitted that the respondent should have produced an investigation report and made it available to the claimant. Mr O'Neill also suggested that it was inconsistent to charge the claimant with gross misconduct but suspend him on full pay. Mr O'Neill accepted that the respondent broadly complied with the procedures but submitted that it did not follow due diligence within the process with particular reference to the accuracy of minutes, the standard of the minutes and the timescale between meetings with no clear policy of openness. In relation to the sanction Mr O'Neill submitted that the decision to dismiss the claimant was unreasonable and that a lesser penalty should have been imposed. Mr O'Neill contended that no account had been taken of mitigating factors. Mr O'Neill drew attention to the very specific nature of the charge and that the claimant accepted that he was guilty of negligence which was a different level of guilt and was not consistent with dismissal. In addition, Mr O’Neill submitted that the shortfall was not the claimant's sole responsibility.

19. On behalf of the respondent, Mr Mercer submitted that it had been proved beyond peradventure that the claimant was guilty of gross misconduct. Mr Mercer drew attention to the contemporaneous records which demonstrated that at all stages of the process the claimant had accepted that he was solely responsible for the monies that had gone missing and on several occasions the claimant had offered to pay the monies back. The claimant also accepted that on his watch an average of £1000 per day went missing. Mr Mercer also drew attention to the claimant’s failure to approach his employer about the discrepancy for 10 to 12 weeks although he had discussed it with his wife and brother-in-law. The claimant then tried to get off the hook by saying that he only became seriously concerned on 17 January 2009 when Lea Takacsova approached him. Mr Mercer suggested that it was significant that this evidence was first given by the claimant in his evidence to the tribunal and was not contained in the claimant's statement or raised by him either in the investigatory process or disciplinary process. Mr Mercer submitted that this proved far beyond the balance of probabilities that the claimant knew that there was a serious problem 10 to 12 weeks before the safe count and he should have told his employer. If the claimant continued to make lodgements as he should have done, there must have been a third party involved and therefore he should have had no problem in approaching his employer. However, the claimant only approached Mr Miskelly when Mr Smyth required a safe count and therefore it was correct to find the claimant guilty of gross misconduct.

20. On the question of the appropriate penalty, Mr Mercer pointed out that when the respondent reached its decision in these circumstances its trust and confidence in him had broken down. A bar manager is responsible for a considerable amount of money and it would have been impossible for the respondent to continue to employ a bar manager where in his first 6 to 10 months of employment money went missing and he did not tell anyone about it. In these circumstances, Mr Mercer submitted that trust and confidence had unequivocally broken down. Demotion was not appropriate because on the evidence the claimant could not be trusted with money. Therefore he could not continue in the respondent’s employment and dismissal was inevitable because the relationship had broken down. Mr Mercer also relied on the comments of Phillips J in Trust House Forte Leisure Ltd v Aquilar [1976] EAT IRLR 251 that it is not for the industrial tribunal to substitute its own views as to the appropriate penalty.

“It has to be recognised that when management is confronted with a decision to dismiss an employee in particular circumstances there may well be cases where reasonable management might take either of two decisions: to dismiss or not to dismiss. It does not necessarily mean if they decide to dismiss that they have acted unfairly because there are plenty of situations in which more than one view is possible.”

A reasonable employer would not have taken the option of demoting the claimant because trust and confidence had broken down. Therefore the claim should fail. Mr Mercer submitted that the Code of Conduct stated that the punishment for gross misconduct would normally be summary dismissal and that for a lesser penalty to be imposed there would have to be mitigating circumstances such as long service. In the present case, Mr Mercer submitted, there had been no explanation by the claimant and he had been employed for 2 years rather than 20 years and therefore the respondent was not weighing a longstanding employee in the scales when determining the appropriate penalty. It was, Mr Mercer submitted, perfectly reasonable for Mr Smyth to come to the conclusion that dismissal was appropriate particularly as the missing money equated to a week’s profit for the hotel. The same considerations applied to the appeal before Mr Boyle.

The Law

21. Article 130 of the Employment Rights (Northern Ireland) Order 1996 insofar as relevant provides as follows:

“130. — (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, and

(b) that it is either a reason falling within paragraph (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) A reason falls within this paragraph if it —

(b) relates to the conduct of the employee,

(4) Where the employer has fulfilled the requirements of paragraph (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 in treating it as a sufficient reason for dismissing the employee, and

(b) shall be determined in accordance with equity and the substantial merits of the case.”

22. As this was a conduct dismissal we bear in mind the approach commended in British Homes Stores -v- Burchell [1980] ICR 303, in relation to the showing of a reason for dismissal in a misconduct case where Arnold J 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."

23. Useful guidance as to the application of Article 130 is to be found in the case of Iceland Frozen Foods v Jones [1982] IRLR 439 where the Employment Appeal Tribunal in applying the then equivalent English provision stated as follows:

“(1) the starting point should always be the words of [Article 130(4)] themselves;

(2) in applying the section an industrial tribunal must consider the reasonableness of the employer's conduct, not simply whether they (the members of the industrial tribunal) consider the dismissal to be fair;

(3) in judging the reasonableness of the employer's conduct an Industrial tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;

(4) in many (though not all) cases there is a "band of reasonable responses” to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another;

(5) the function of the industrial tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it is unfair.”

The tribunal must therefore apply the three limbs of the Burchell test followed by the Iceland Frozen Foods test, namely whether the decision to dismiss was within the band of reasonable responses.

Conclusions

24. The evidence clearly establishes that the claimant was dismissed for a potentially fair reason namely his conduct in the form of the five charges in respect of which he was found guilty. Whether or not the decision to dismiss the claimant was actually fair depends upon the application of the Burchell test and the Iceland Frozen Foods test and we will now proceed to address these tests on a stage by stage basis. There are essentially six questions which we must answer which we will answer in turn.

25. (1) Did the respondent carry out a reasonable investigation?

We are satisfied that Mr Smyth carried out a thorough investigation in relation to the shortfall of £7,394.00 and the associated matters in respect of which the claimant was ultimately found guilty. Mr Smyth conducted a total of four safe counts and conducted checks with head office and accounts in order to assure himself that the monies could not be accounted for. He also obtained statements from all relevant witnesses and questioned the claimant in conjunction with Mr Miskelly. In light of the information obtained by Mr Smyth he determined that an investigatory meeting should be held. This was attended by the claimant and his representative Mr O’Neill and we are satisfied that the matter was given detailed consideration and that the claimant who was the focus of the investigation was given a full opportunity to give his side of the story. Mr Smyth subsequently concluded that five of the seven charges should be taken forward. The complaint made by Mr O’Neill that there should have been an investigatory report is not well founded. While in some large organisations a report of this nature will be compiled, there is no requirement in law to do so. We are therefore satisfied that the respondent carried out a reasonable investigation.

(2) Did the respondent carry out a reasonable disciplinary hearing?

The disciplinary hearing was also commendably thorough and the only real complaint raised by the claimant and his representative was in relation to the late provision of the record of the investigatory meeting. However the claimant and his representative were offered an adjournment on several occasions but these offers were declined. More importantly the claimant accepted that he was responsible for the missing monies and did not seriously dispute the other charges. Moreover, in his evidence both to the disciplinary hearing and the tribunal the claimant did not make any bones about having deliberately kept his alleged concerns about the missing monies to himself for 10 to 12 weeks although he did share his concerns with his wife and brother-in-law. We are therefore satisfied that the respondent did carry out a reasonable disciplinary hearing.

(3) Did the respondent carry out a reasonable appeal hearing?

Mr O’Neill did not seek to argue that the appeal was unfair in any way. The claimant also raised no complaint about the appeal.

(4) Did the respondent believe that the claimant was guilty of the misconduct alleged against him?

It is absolutely clear that the respondent believed that the claimant was guilty of the alleged misconduct. The fact that another person was also disciplined does not detract from the claimant’s culpability and no case of inconsistent treatment was made out.

(5) Was the respondent’s belief in the claimant’s guilt reasonable?

We have no doubt that the respondent’s belief in the claimant’s guilt was reasonable. The matter was thoroughly investigated by Mr Smyth which led to an investigatory meeting being undertaken followed by a fair and reasonable disciplinary hearing.

(6) Was the decision to dismiss the claimant for the offences within the range of reasonable responses?

Four of the five charges which the claimant was found guilty of amounted to gross misconduct and as provided in the Code of Conduct the normal sanction for gross misconduct is dismissal. We are entirely satisfied however that both Mr Smyth and Mr Boyle considered other lesser sanctions but considered that the appropriate penalty was dismissal. Furthermore, the inevitable loss of trust and confidence in the claimant that ensued understandably strongly militated against any lesser penalty such as demotion being imposed. Having regard to the gravity of the offences with which the claimant was found guilty and in particular the size of the missing monies and the failure to report the matter for 10 to 12 weeks, it is clear to us that the penalty imposed was well within the range of reasonable responses.

26. The claim must therefore be dismissed.

Chairman:

Date and place of hearing: 3-4 November 2009, Belfast.

Date decision recorded in register and issued to parties: