Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2011/6883_09IT.html
Cite as: [2011] NIIT 6883_09IT, [2011] NIIT 6883_9IT

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THE INDUSTRIAL TRIBUNALS

CASE REF: 6883/09

CLAIMANT: John Ross

RESPONDENT: John Shilliday Ltd

DECISION

The unanimous decision of the tribunal is as follows:-

(A) The claimant was unfairly dismissed.

(B) The respondent shall pay to the claimant the sum of £1,678.50 compensation in respect of that unfair dismissal.

Constitution of tribunal:

Chairman: Mr Paul Buggy

Members: Mr John Kinnear

Mr Teddy Martin

Appearances:

The claimant was represented by Mr P Moore, of P M Associates.

The respondent was represented by Mr K Smith.

REASONS

1. In these proceedings, the claimant initially brought his claim against Mr John Shilliday as an individual. However, it was agreed between the parties that, in reality, the claimant was employed by John Shilliday Ltd. Therefore, the title of the respondent to these proceedings has been changed, to reflect that reality.

2. The claimant was employed by the respondent company from June 2007 until May 2009. He was dismissed with effect from 31 May 2009.

3. In these proceedings, the claimant makes a complaint of unfair dismissal. He also claims an award pursuant to Article 27 of the Employment (Northern Ireland) Order 2003.

The claim and the defences

4. The claimant was dismissed because of what he allegedly did, and because of what he failed to do, in relation to the sale by the employer of certain building materials which were intended for use in the building of the claimant’s new home. The claimant accepts that that was indeed the true reason for his dismissal. A reason relating to conduct is a potentially fair reason for dismissal. Accordingly, the focus of attention in this case shifts to Article 130(4) and Article 130A(1) of the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”).

5. According to Mr Moore (on behalf of the claimant), the dismissal was unfair within the meaning of Article 130(4) because the employer acted outside “the range of reasonable responses” in dismissing the claimant for that conduct, because the sanction was disproportionate and because of certain alleged procedural shortcomings which occurred in the context of the disciplinary process.

6. According to Mr Smith (on behalf of the employer), the dismissal was within the range of reasonable responses, in the sense in which that term is used in the context of Article 130(4), because it was an entirely proportionate sanction, and there were no procedural shortcomings. Furthermore, Mr Smith argued, if (contrary to the employer’s contention) there were any procedural shortcomings, the employer was entitled to the protection of Article 130A(2), the effect of which was to prevent a dismissal from being an unfair dismissal, even if it would otherwise be unfair because of procedural shortcomings, if the employer can show to the tribunal that, in the absence of the relevant procedural shortcomings, a fair dismissal would probably have occurred.

7. It was acknowledged on both sides of the case that the letter inviting the claimant to his initial disciplinary hearing did not state that his dismissal might be an outcome of that hearing. According to Mr Moore, that omission rendered the dismissal automatically unfair because of the effect of Article 130A(1) of the 1996 Order. Mr Smith denied that Article 130A(1) had that effect in the circumstances of this case and he asserted that, regardless of the relevant omission in the letter, the claimant well knew that his job was “on the line”.

8. The employer is a small, family-run firm. It supplies building materials. Fewer than ten people work in the firm. Mr John Shilliday (a witness in this case) and his wife, Mrs Pamela Shilliday (also a witness in this case) are the directors of the firm, and they own most or all of the shares in the firm.

Sources of evidence

9. The claimant gave evidence on his own behalf. The following gave evidence on behalf of the employer:

(1) Mr John Shilliday

(2) Mr Paul Smylie, the firm’s lorry driver

(3) Mr Kieran Heenan, the employer’s Yard Manager

(4) Mrs Pamela Shilliday.

10. We saw an agreed bundle of documents, along with some separate miscellaneous documents.

11. We told the parties that we would not take the contents of any document within the bundle into account for evidential purposes unless that document was drawn specifically to our attention by one or both of the parties.

The facts

12. We now set out findings of fact which are relevant to the issues which we have determined. (In order to minimise avoidable duplication, and in the interests of clarity, we have also set out various other findings of fact elsewhere in this Decision).

13. Mr Shilliday was the overall manager of the business. Mrs Shilliday was mainly responsible for book-keeping and for office activities. In that role, she was assisted by a woman called Sorcha. Mr Paul Smylie was employed as a driver, and was responsible for the delivery of goods to customers. Mr Kieran Heenan was employed as the Yard Manager. The claimant was employed as a Yard Hand.

14. The employer had no written disciplinary procedures and had no written disciplinary rules.

15. The employer had no written purchasing or book-keeping procedures. The procedures which it did have were procedures which had developed through custom and practice, as augmented from time to time by oral instructions and guidance from management.

16. Sometimes customers paid in advance of delivery of the goods, or at the time of the delivery of goods. The purchasing and book-keeping procedures which applied in that context were slightly different from the purchasing and book-keeping procedures which applied in the context with which we are concerned, which is situations in which goods are not paid for prior to, or at the time of, delivery.

17. The relevant procedures which applied in the latter category of situations can be summarised as follows. The goods which were being delivered were recorded in a diary. In relation to any particular transaction, the diary included a list of the goods which were being delivered, along with the identity of the person who was purchasing them. It was the responsibility of the Yard Manager or the Yard Hand to make sure that the diary details of each relevant transaction were entered onto the computer. Once the diary details of a particular transaction had been entered onto the computer, a “squiggle” was endorsed on the relevant part of the delivery book, to indicate that the details of that particular transaction had been entered onto the computer. (According to one dictionary definition, a squiggle is a line that bends and curves in an irregular way).

18. Often, but not always, the practice was to enter details of a particular “credit transaction” onto the computer before the goods had left the premises. However, it was accepted practice not to do so. As is indicated in the written statement of Mr Heenan (which formed part of his oral testimony to us), the expectation was that details of all materials involved in a credit transaction would be entered onto the computer no later than five days after the goods had been delivered.

19. According to practice, all customers who had received goods on credit within a particular month would be invoiced in respect of those deliveries at the end of that month. Mrs Shilliday and Sorcha were responsible for the invoicing. In drawing up invoices, they used the details of the various credit transactions which had been entered onto the computer during that month.

20. So, the purchasers were not invoiced in respect of credit transactions immediately. Instead, they were invoiced at the end of the month during which the relevant materials had been delivered to them.

21. In the context of the present proceedings two transactions are relevant.

22. The first incident (the Farm “incident”) related to the purchase of posts and other materials by Mr Ross for use on his family’s farm.

23. The second incident related to the purchase by the claimant’s contractor, Mr Ciaran Malone, of materials for use in connection with a house which Mr Malone was building for the claimant. (This is the “New-build” incident).

24. The Farm incident occurred in April 2009. The claimant arranged for fencing posts, and other fencing materials, to be delivered to his family farm. Mr Smylie delivered them. The claimant, at that time, carefully noted the details of the goods which were being delivered. He noted them in the appropriate office diary. The note recorded that the goods were being purchased by himself. He did not pay for them prior to or at the time of delivery. Accordingly this was a credit transaction.

25. He did not inform the Shillidays of this transaction.

26. He did not ensure that the details of the transaction were entered onto the computer promptly.

27. Some days after it had taken place, the transaction came to Mr Shilliday’s attention. He then immediately required the claimant to enter details of the transaction onto the computer without further delay.

28. When the claimant entered those details onto the computer, he put the posts down as 5 foot posts, although in fact they were 6 foot posts. (The 6 foot posts were slightly more expensive than the 5 foot posts). That inaccuracy came to Mr Shilliday’s attention.

29. Mr Shilliday confronted the claimant about two aspects of the matter. First, he told the claimant that the claimant should have promptly recorded the transaction on the computer, without having to be prompted to do so by himself. Secondly, he confronted the claimant about the inaccuracy regarding the size of the posts. In relation to the latter aspect of the matter, the claimant told Mr Shilliday that his description of the posts had been an error. Mr Shilliday accepted that a mistake had been made. There the matter was left, both by the claimant and by Mr Shilliday.

30. In his evidence to us, Mr Shilliday asserted that he had told the claimant at that time that any similar incidents in future could result in disciplinary action and that his (the claimant’s) actions in the context of the Farm incident could be classed as gross misconduct. We reject those aspects of the testimony of Mr Shilliday. We noted that Mr Shilliday lied to us about the 2008 Christmas bonus (see below) and we are sure that, at the time of the Farm incident, Mr Shilliday had very limited knowledge of disciplinary processes or procedures; against that background, it is highly unlikely that he referred to any conduct as being “gross misconduct”. Overall, we are satisfied that the outcome of the Farm incident is that there was a frank exchange of views both on the part of the claimant and on the part of Mr Shilliday, but that the matter was not treated as a disciplinary matter, and that no disciplinary warning was given. Instead, Mr Shilliday merely made clear to the claimant his displeasure about the conduct of the claimant in relation to the Farm incident, accepted that the 5 foot/6 foot inaccuracy was a genuine mistake, and agreed to let the matter rest there.

31. About three weeks later, the New-build incident occurred. This time, the claimant was getting building materials delivered to the site of the new home which Mr Malone was building for the claimant. This time, the claimant took great care to make sure that Mr Shilliday was aware that the relevant goods were being delivered to his site. He did so before any goods had been delivered.

32. Mr Shilliday agreed to the goods being delivered.

33. The parties were agreed that, when Mr Shilliday was informed of the intended transaction, it was on the basis that the claimant would be purchasing the goods himself. However, soon afterwards (and without any further discussion with

Mr Shilliday) it was agreed between the claimant and Mr Malone that the goods would be purchased by Mr Malone. Mr Malone purchased those goods on credit. It appears that Mr Shilliday has never had any difficulty with the goods being delivered on credit. His main concern was about the prompt recording of the transaction on the employer’s computer.

34. The claimant made sure that the transaction was fully and accurately and promptly recorded in the delivery book (the appropriate office diary.)

35. However, the claimant did not make sure that details of the transaction were promptly recorded on the computer. Eight days after the goods had been delivered, Mr Shilliday checked whether or not the transaction had been recorded on the computer and found that it had not been. At that time he also looked at the delivery book. Someone had put a “squiggle” through the record of the transaction in the delivery book (thus indicating, inaccurately, that details of the transaction had been entered on the computer).

36. Mr Shilliday then commenced disciplinary proceedings against the claimant, ostensibly only about the New-build incident. However, in reality, those proceedings also related to the Farm incident.

37. He interviewed Mr Smylie, Mr Heenan and the claimant. He held a disciplinary hearing.

38. The outcome of that hearing was that Mr Shilliday concluded that the claimant had failed to promptly enter details of the Farm incident onto the computer promptly, and that when he had belatedly entered details of that transaction onto the computer, he had done so inaccurately; and that he had failed to enter details of the New-build transaction onto the computer promptly. He notified the claimant of the outcome of the disciplinary hearing, by letter dated 30 May 2009. The following extracts from the letter indicate the outcome:

“I have given careful consideration to all the evidence available including the information provided by you at our meeting and have decided that your behaviour amounts to Gross Misconduct.

I have decided to impose the following disciplinary penalty which is effective with immediate effect (Saturday 30 May 2009):

Dismissal – on the grounds of a serious breach of procedures – this means actions likely or intended to corrupt or seriously affect the integrity of our purchasing and book-keeping procedures and consequently destroying the trust between management and staff”.

39. At that first stage of the disciplinary process, Mr Shilliday also concluded that the claimant was responsible for putting the “squiggle” on the diary in respect of the New-build transaction.

40. The claimant lodged an internal appeal against Mr Shilliday’s dismissal decision. His main ground of appeal was that any relevant breach of procedures did not constitute “Gross Misconduct”.

41. The appeal was conducted by Mr Smith, a witness in this case, and the person who acted as the respondent’s representative in these proceedings. Mr Smith told the claimant that he was an independent Human Resource professional who specialises in recruitment, selection and employee relations for a number of small businesses throughout Northern Ireland.

42. Mr Smith upheld the original decision. He concluded that there was sufficient evidence to confirm a breach of procedures on two different occasions and, according to Mr Smith, there was a consequential breakdown in trust between the claimant and the employer.

Was the dismissal automatically unfair?

43. The effect of Article 130A(1) is that an employee is automatically unfairly dismissed if the statutory dismissal and disciplinary procedure “has not been completed” and that non-completion is wholly attributable to failure by the employer to comply with its requirements.

44. In that connection, Mr Moore (for the claimant) drew our attention to the case of Zimmer Limited v Brezan (UKEAT/0294/08). In that case, the Employment Appeal Tribunal decided that the employer was in breach of the statutory disciplinary and grievance procedure, because the “Step 1” letter did not tell the claimant that he was at risk of dismissal. In the same case, the EAT observed that the relevant Step 1 requirements can also be complied with if the claimant is aware from the letter, and from information provided with it, that dismissal is contemplated.

45. However, that is not the situation in the present case. It is true that the claimant did in fact know that his job was at risk. However, he had not been informed to that effect as a result of the combination of the relevant letter (the letter summoning him to the initial disciplinary hearing) and any information provided with that letter. Instead, this was a conclusion which he had himself independently reached (because he knew how angry Mr Shilliday was).

46. Accordingly, on that rather technical basis, the contention that this was an automatic unfair dismissal (pursuant to Article 130A(1) of the 1996 Order), is correct.

An “ordinary” unfair dismissal? (The squiggle and the other alleged procedural shortcomings)

47. On behalf of the claimant, Mr Moore argued that the dismissal was an “ordinary” unfair dismissal, in the sense in which “unfair” is used in Article 130(4), because of what he contended were various serious procedural shortcomings. On behalf of the respondent, Mr Smith denied that there were any such shortcomings.

48. We are satisfied that no reasonable employer, acting within the range of reasonable responses, would have acted on the basis of a belief that the claimant was guilty of the “squiggle” offence. A reasonable employer would have known that a number of people could have done the squiggle. There was nothing distinctive about the squiggle which would support the proposition that the claimant, rather than somebody else, had done it. We reject the proposition that only the claimant could gain from the squiggle. In our view, the claimant had nothing to gain from doing the squiggle, because Mr Shilliday already knew that the relevant goods were being delivered to the claimant’s new-build site and, therefore it was obvious to all concerned that he (Mr Shilliday) would, in due course, be checking whether or not the relevant transaction had been properly recorded.

49. We are satisfied that the employer carried out as much investigation as was feasible in respect of the squiggle allegation. Even if more thorough investigations had been carried out, there would have been no adequate basis upon which any reasonable employer could have concluded that the claimant was the “squiggler”. Accordingly, Article 130A(2) of the 1996 Order is of no assistance to the respondent in relation to that aspect of this matter. (Article 130A(2) provides that a dismissal will not be unfair within the meaning of Article 130(4) merely on account of a particular procedural shortcoming, if the employer shows to the tribunal that he could and would have dismissed the claimant fairly in the absence of the relevant shortcoming).

50. Having arrived at those conclusions on the “squiggle” issue, we do not need to consider any of the other allegations of “ordinary” procedural shortcomings, because of the conclusions which we have arrived at in connection with the disproportionality of sanction issue. (See below).

A disproportionate sanction?

51. In this part of the Decision, we focus on the question of whether or not the employer stepped outside the range of reasonable responses in dismissing the claimant for the failure to promptly record the “New-build” transaction on the employer’s computer system. We set out some additional findings of fact which are relevant to this issue. We refer to the arguments of the parties on this issue, to the extent that those arguments are necessary for the purpose of understanding our determination. We set out what we consider to be the main legal principles which are applicable. And we set out our conclusions on this issue.

52. The outcome of the first stage of the employer’s disciplinary process was that Mr Shilliday concluded that the claimant had been wrong to fail to ensure that the “New-build” transaction was promptly recorded on the employer’s computer system and decided that dismissal was the appropriate sanction. Those determinations were upheld by Mr Smith at the second stage of the employer’s disciplinary process. The next issue, and the issue with which we are mainly concerned in this part of the Decision is the question of whether or not the decision to dismiss the claimant, on account of that determination, was inside or outside the “range of reasonable responses”. In arriving at conclusions on that matter, it is necessary for us to have regard to the question of whether or not a reasonable employer would have regarded dismissal, in the circumstances, as constituting a disproportionate sanction.

53. In the context of the present issue, the provisions of Article 130(4) of the 1996 Order are of central importance. According to paragraph (4) of Article 130, where an employer shows that a claimant has been dismissed for a specific reason which relates to the conduct of that claimant, the determination of the question of whether dismissal for that reason is fair or unfair:

“(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”.

54. In considering the question of whether an employer acted reasonably or unreasonably (in the context of Article 130(4) of the 1996 Order) in deciding on dismissal as a sanction, a tribunal should generally follow the guidance which was set out in British Leyland UK Limited v Swift [1981] IRLR 91. In that case,

Denning MR set out the correct test in the following terms:

“Was it reasonable for the employer to dismiss him? If no reasonable employer would have dismissed him, then the dismissal was unfair. But if a reasonable employer might reasonably have dismissed him, then the dismissal was fair. It must be remembered that in all these cases there is a band of reasonableness, within which one employer might reasonably take one view: another quite reasonably take a different view. One would quite reasonably dismiss the man. The other would quite reasonably keep him on. Both views may be quite reasonable. If it was quite reasonable to dismiss him, then the dismissal must be upheld as fair: even though some other employers may not have dismissed him”.

55. In considering the Article 130(4) question, we must consider the reasonableness of this employer’s conduct, not simply whether we (the members of this tribunal) ourselves consider the dismissal to be fair. Furthermore, in judging the reasonableness of this employer’s conduct, we must not substitute our own decision (as to what would have been the right course to adopt) for that of this employer. Instead, our function, as an industrial jury, is to determine whether in the particular circumstances of this case the decision to dismiss (as a response to the claimant’s relevant acts and omissions) fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within that band, the dismissal is fair; and if the dismissal falls outside that band, it is unfair.

56. The question is not whether some lesser sanction (than dismissal) would in our view have been appropriate. Instead the question is whether or not the dismissal for the relevant conduct was within the band of reasonable responses.

57. We have concluded that dismissal, as a response to the claimant’s failure to make sure that the “New-build” transaction was promptly recorded on the computer system, was outside the range of reasonable responses. We have arrived at that conclusion for the following reasons and against the following background.

58. We do not consider that an employer, acting inside the range of reasonable responses, would have treated the claimant as a “repeat offender” for the purpose of the relevant disciplinary process. It is true that Mr Shilliday had previously expressed considerable concern, and annoyance, about the claimant’s acts and omissions, in April 2009 in relation to the “Farm” order. However, we are satisfied that the expression of those concerns by Mr Shilliday was not done within any formal disciplinary context. He never explicitly told the claimant that he was being given a disciplinary warning. He never told the claimant, and the claimant was not informed through any documentation, that any repetition of the relevant conduct would be likely to, or might, lead to the claimant’s dismissal. Instead, the Farm incident was not treated as a disciplinary issue. Accordingly, although the employer, in considering the appropriate sanction for the conduct which was the subject of the “New-build” allegation, was entitled to take account of what had occurred some weeks earlier in the context of the Farm conduct, it was not acting within the range of reasonable responses, when deciding upon the appropriate sanction for the New-build conduct, by treating the claimant as someone who had a previous disciplinary record.

59. The claimant failed to ensure that details of the New-build transaction were entered promptly on the computer. However, no reasonable employer would have regarded that omission as being sufficiently serious to constitute an offence of “Gross Misconduct” (in the sense in which the term Gross Misconduct is used in the context of unfair dismissals).

60. That failure on the part of the claimant had no actual or potential harmful consequences for the business. The claimant had made sure that Mr Shilliday knew that the relevant goods were being purchased from the employer, and that they were being delivered to the site of the claimant’s new house. When Mr Shilliday realised that the transaction had not yet been recorded on the computer, the time had not yet come for the sending out of bills. (Bills in respect of transactions which were not paid for “in cash” were, according to the practice of the employer, sent out only at the end of the month within which the relevant transaction took place). During the hearing of this case, Mr Shilliday and Mr Smith did their best to convince us that the relevant failure on the part of the claimant was an attempt on his part to avoid payment. However, we do not see how that was ever a real possibility. Mr and Mrs Shilliday were well aware of the fact that the relevant goods had been delivered to the claimant’s new-build site. In that situation, it was always obvious that Mr Shilliday would, in due course, be making enquiries with a view to ensuring that the record of that transaction was up-to-date, and with a view to making sure that either payment had already been made, or that payment would be made within an appropriate timescale. So, in our view, no reasonable employer would have concluded that the failure on the part of the claimant (the failure to ensure that the transaction was recorded on the computer at the time, or soon after it took place) would lead to any inappropriate advantages for the claimant, or to any practical disadvantage to the employer.

61. In arriving at our conclusions on this aspect of the case, we have taken full account of the fact that this is a small business.

62. We have noted that the letter of dismissal of 30 May includes the following paragraph:

“Dismissal – on the grounds of a serious breach of procedures – this means actions likely or intended to corrupt or seriously affect the integrity of our purchasing and book-keeping procedures and consequently destroying the trust between management and staff”.

In our view, no reasonable employer would have concluded that the relevant omission on the part of the claimant constituted actions which would be likely to corrupt the integrity of the purchasing and book-keeping procedures, or which would be likely to seriously affect the integrity of those procedures. Furthermore, in circumstances in which the claimant had gone out of his way to make sure that

Mr Shilliday would know what was being delivered to the new-build site, and that he would know it before any delivery took place, we consider that no reasonable employer would have concluded that the relevant omission would destroy the “trust between management and staff”.

63. It appears that, during the course of the disciplinary process, some confusion arose as to precisely what offences were the subject of the disciplinary process. The letter of 26 May makes it quite clear that the scope of the disciplinary process was limited to the New-build incident. (The Farm incident had related to the delivery and charging of materials in respect of the claimant’s family’s farm, and had not related to his building site). The scope of the disciplinary process was defined in the first letter of 26 May, which had invited the claimant to attend “disciplinary interview”. That paragraph was in the following terms:

“I am investigating a possible breach of conduct in relation to the purchase, delivery and charging of materials to your building site [our underlining]”.

64. However, in the letter of 14 August 2009 (notifying the claimant of the decision of

Mr Smith, at the second stage of the internal disciplinary process), the following comment is made:

“I am content that there is sufficient evidence to confirm a breach of procedures on two different occasions and consequently I understand why there has been a breakdown in trust between you and your employer”.

The Article 27 claim

65. Article 27 of the Employment (Northern Ireland) Order 2003 (“the 2003 Order”) applies to unfair dismissal proceedings.

66. The effect of paragraph (3) of Article 27 can be summarised as follows. If, in proceedings for unfair dismissal, an industrial tribunal makes an award to the employee in respect of the unfair dismissal, and when the proceedings were begun, the employer was in breach of its duty to the employee under Article 33(1) or 36(1) the Employment Rights (Northern Ireland) Order 1996 (“the 1996 Order”), the tribunal should, as a general rule, make an award of “the minimum amount” and it may (if it considers it to be just and equitable in all the circumstances to do so), award “the higher amount”.

67. That general rule does not apply if there are exceptional circumstances which would make an Article 27 award (or increase) unjust and inequitable.

68. Article 33(1) and Article 36(1) of the 1996 Order require the employer to provide the employee with a statement of employment particulars.

69. No such statement was ever provided by the respondent to the claimant. Accordingly, we are satisfied that, when the present proceedings were begun, the respondent was in breach of its Article 33 duty to the claimant.

70. We know of no exceptional circumstances which would make an Article 27 award unjust or inequitable. The respondent knew, or ought to have known, that the claimant was entitled to receive written particulars of employment.

71. We note that the respondent company is a small business. We do not consider it to be just and equitable, in all the circumstances, to award the “higher amount” which is referred to in Article 27.

72. Accordingly, we make an award of the “minimum amount” within the meaning of Article 27.

73. As Article 27(4) makes clear, references in that Article to the “minimum amount” are references to an amount equal to two weeks’ pay.

74. At the time of the claimant’s dismissal his gross weekly pay was £298. Accordingly, pursuant to Article 27, we must augment his compensatory award (subject to the subsequent reduction, as specified below, in respect of conduct) by the sum of £596. (See Article 158A of the 1996 Order.)

Uplift

75. The effect of Article 17 of the Employment (Northern Ireland) Order 2003 (“the 2003 Order”) can be summarised as follows. As a general rule, if the statutory dismissals procedure was not completed solely because of a failure on the part of the employer (see below), a tribunal is under an obligation to increase any compensatory award in unfair dismissal proceedings by at least ten percent.

76. That general rule is subject to an exception. The exception is provided for at paragraph (4) of Article 17, which provides that the general duty does not apply if there are exceptional circumstances which would make an increase of that percentage unjust or unequitable.

77. We are satisfied that such exceptional circumstances do exist in this case. Accordingly, we have decided not to make any Article 17 increase. The exceptional circumstances are as follows. In this case, the statutory disciplinary and dismissals procedure was not completed only because the claimant was not informed in writing, in the letter inviting him to the disciplinary hearing, that dismissal might be the outcome of that hearing. However, that omission was inadvertent, as distinct from being deliberate. The employer is a small employer. The claimant knew in any event that his job was at risk (as is clear because of certain comments which were made to Mr Shilliday by the solicitor who the claimant hoped to engage as his representative at the disciplinary hearing).

The amount of compensation (General)

78. The claimant’s gross weekly wage was £298. The parties noted the effect of Article 154(1A) of the 1996 Order. Against that background, the parties are agreed that, subject to any contributory conduct deduction, the amount of any basic award paid to the claimant should be £1,192. Accordingly, we award the claimant a basic award of that amount, subject to “a conduct” deduction, pursuant to Article 156(2) of the 1996 Order (see below), of 25 percent. Accordingly, the claimant’s basic award will be £894.

79. On behalf of the employer, Mr Smith argued that there should be a Polkey deduction from the amount of the compensatory award. We have decided that there should be no such deduction, against the following background and for the following reasons.

80. Article 157(1) of the 1996 Order sets out the following basic rules in respect of the calculation of a compensatory award, in the following terms:

“(1) Subject to the provisions of this Article and [ the provisions of certain other Articles], the amount of the compensatory award shall be such amount as a tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer”.

81. So the award has to be “just and equitable” in all the circumstances.

82. One effect of the “just and equitable” aspect of Article 157(1), as applied in the case of Polkey v Dayton Services, is that, if a tribunal decides that a particular claimant has been unfairly dismissed, but considers that there is a chance that he could and would have been fairly dismissed in any event (in the absence of any of the particular dismissal shortcomings which rendered that particular dismissal unfair), the tribunal can reduce the compensatory award by a percentage representing the chance that the employee would still have lost his employment, either at the time when he did lose it, or at some subsequent time. Therefore, a tribunal could, for example, make a “20%” compensatory award (a compensatory award reduced by 80%) if that tribunal considered that there was only a one in five chance that a fair dismissal process would have resulted in the claimant keeping his job. This type of deduction is usually referred to as a Polkey deduction.

83. In this case, the claimant was dismissed because of Mr Shilliday’s reaction to the claimant’s alleged acts and omissions, in connection with the purchase of materials in respect of the claimant’s new house. As already noted above, we are satisfied that the decision to dismiss the claimant in respect of that matter was unfair within the meaning of Article 130(4), in all the circumstances. (This was a disproportionate sanction, and that disproportionality of sanction put the decision to dismiss outside the range of reasonable responses). We have no adequate evidential basis upon which we could conclude that there was any significant risk that the claimant would, in any event, have been dismissed, at some point in the future, if the employer had not dismissed him for the “new-build” conduct. On the contrary, if the claimant had not been dismissed on that occasion, we think there is every likelihood that the employment relationship would have continued indefinitely, without any further incident.

84. Accordingly, the claimant is entitled to recover, by way of compensatory award, all of the financial loss which he sustained as a result of his dismissal, subject to any “conduct” deduction, subject also to any reduction on account of any failure on his part to mitigate his loss.

85. As part of that financial loss, the claimant is entitled to a sum to represent the value of his loss of statutory rights. The claimant’s period of employment with this employer was relatively short. We are satisfied that the sum of £200 is appropriate as an award in respect of statutory rights. According to case law, such “loss” is deemed to have occurred, and does not have to be proven.

86. The claimant was sacked without notice. He was entitled to one week’s pay in lieu of notice. However, the effect of the well-known case of Norton Tool Co Ltd v Tewson [1972] ICR 501 is that an employee who has been unfairly dismissed without notice, and who takes up fresh employment during what would have been the notice period, is entitled to receive a sum equivalent to notice pay as part of his unfair dismissal compensation, without giving credit for any monies he has earned from new (post-dismissal) employment. Accordingly, anyone who is unfairly dismissed is entitled to a sum equivalent to the amount of notice pay which he or she should have been given, and does not have to prove actual loss in respect of that aspect of the compensatory award. Therefore, this claimant is entitled to the sum of £250 in respect of financial loss (because his net week’s pay was £250).

87. However, the legal principles in respect of loss of statutory rights and in respect of notice pay should be regarded as exceptions to a general rule. The general rule, in respect of a compensatory award, is that it can be used only to compensate proven financial loss. The claimant has failed to prove any financial loss in this case, against the following background and for the following reasons. Therefore, he is not entitled to any amount, by way of compensatory award, over and above the amounts (in respect of failure to provide particulars, loss of statutory rights and notice pay) already specified above.

88. The claimant’s oral testimony on matters relating to his efforts to obtain alternative employment was testimony which was vague and unconvincing. According to his own account of events, he only actively sought alternative employment during a period of a very short number of weeks. We are satisfied that those efforts were perfunctory, and were mainly made for the purpose of attempting to show to a tribunal that there had been no failure to mitigate loss.

89. It was contended on behalf of the employer that, in reality, the claimant was at all material times engaged in alternative employment, in his own business, or elsewhere. We consider that there is no adequate evidence to support that proposition, although we do find it very surprising that the claimant made such minimal efforts to obtain an alternative employment.

90. As is made clear in detail later in this Decision, we were led to believe during the September segment of this hearing that the claimant had made no claims in respect of social security benefits. However, as a result of post-hearing correspondence from his mother, it emerged that he had indeed made such claims. Furthermore, we disbelieved the claimant when he told us, in September, that he did not know the identity of the public sector body in which his wife worked. (In fact, as was accepted on behalf of the claimant during the December segment of this hearing, she works for the Social Security Agency). We do not believe that his evidence in September was truthful in that connection. The claimant asserted that he had never had any discussion with his wife regarding the possibility of claiming benefits. Again, this is unbelievable testimony. The claimant’s mother testified that she made all the arrangements in relation to the claimant’s claim for sickness benefits. She is a former lecturer at a third level educational institution. However, according to her testimony during the course of the December segment of this hearing, she thought that social security benefits could be obtained simply by submitting certificates, without submitting any application forms, and therefore that is what she did in this instance; that is a surprising piece of testimony.

91. Accordingly, the position can be summarised as follows. According to his own evidence, the claimant made only perfunctory and short-lived efforts to obtain
post-dismissal jobs from employers, despite the lengthy period which has now elapsed since the date of the claimant’s dismissal. Secondly, the claimant has told us untruths in relation to his knowledge of his wife’s job and in relation to the extent of his discussions with his wife regarding social security matters. Thirdly, during the September segment of the hearing, we were wrongly led to believe that the claimant had made no applications for benefits, whereas in fact applications for such benefits had been made on his behalf.

Contributory conduct

92. We have already specified above that we consider that there should be a 25% reduction from the basic award to reflect the conduct of the claimant. We also consider that there should be a 25% deduction from the compensatory award to reflect that conduct.

93. The “conduct” deduction from a basic award is provided for in Article 156(2) of the 1996 Order. That paragraph provides as follows:

“Where the tribunal considers that any conduct of the complainant before the dismissal … was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly”.

94. Article 157(6) deals with conduct-related reductions from compensatory awards, and provides as follows:

“(6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding”.

95. There are some differences between those two sets of provisions. For example, in the compensatory award “conduct” reduction provision, causation and “contribution” are essential components. They are not essential components in the basic award reduction provision. Those differences are irrelevant in the factual context of the present case.

96. In our view, in considering reductions from awards (whether from basic awards or from compensatory awards) in respect of conduct, account can only be taken of conduct which was culpable or blameworthy. In the context of both of these provisions, we have a broad discretion as to the amount of any reduction in respect of conduct.

97. We have decided to make a 25% deduction from both the basic award and the compensatory award, because of the claimant’s neglect in failing to make sure that Mr Malone’s debt was recorded promptly on the employer’s computer system. That conduct was culpable and blameworthy; and the claimant knew, or should have known, that the prompt recording of the transaction was something about which Mr Shilliday felt very strongly.

Compensation (Summary)

98. We can now summarise our conclusions in respect of compensation. The claimant is entitled to an overall award of £1,678.50, which is made up of a basic award and a compensatory award.

99. The basic award consists of the agreed amount of £1,192 subject to a 25% “conduct” deduction, leaving a net basic award of £894.

100. The compensatory award is an award of £784.50. This consists of the following:

(1) £250 in respect of financial loss, which has been subjected to a 25% “conduct” deduction”, leaving a balance of £187.50.

(2) £200 in respect of loss of statutory rights, which has also been subjected to a 25% “conduct” deduction, leaving a balance of £150.

(3) £596, which has been awarded pursuant to Article 27 of the 2003 Order, and which has also been subjected to a 25% conduct deduction, leaving a balance of £447.

(4) No “Polkey” deduction has been made.

(5) The award has not been increased pursuant to Article 17 of the 2003 Order.

General comments

101. A disturbing feature of this case was that seriously inaccurate testimony was given on both sides of the case.

102. We are satisfied, on the balance of probabilities, that the claimant lied to us when he told us that he had given Mr Shilliday advance warning of the fact that he was having the posts delivered to his property. (We refer to this transaction as “The Farm Order”.) We are satisfied that this did not happen, for the very good reason that this matter was never mentioned by the claimant, either to his representative or to the employer, until after the beginning of his oral testimony in this case.

103. We are satisfied, on the balance of probabilities, that, on the claimant’s side of the case, we were provided with untruthful oral testimony in respect of matters relevant to the quantification of any losses which he claims to have sustained as a result of his dismissal. (See above.)

104. During the course of Mr Shilliday’s oral testimony, he was asked whether or not he had withheld Christmas bonus from the staff at Christmas 2008. He replied that he did not know whether he had done so. We are satisfied, on the balance of probabilities, that this was false testimony. Ultimately, the employer accepted (as indeed it was constrained, because of the course of the evidence, to accept) that the reality was that 50% of the Christmas bonus had been withheld, by Mr Shilliday, from all staff, at Christmas 2008. We believe that it is very unlikely that Mr Shilliday genuinely forgot about that.

105. On the day after Mr Shilliday had provided oral testimony in relation to the bonus, both Mr Smylie and Mr Heenan gave evidence in this case. In the course of their evidence, both were asked by Mr Smith (on behalf of the respondent) whether they had received their full Christmas bonus in 2008. They both answered those questions by stating that they had indeed received their full Christmas bonus. The inaccuracy of their testimony in those respects was a matter which did not come to light until after they had left the hearing. Accordingly, we are reluctant, in this Decision to characterise their testimony, in that respect, as being false (as distinct from being merely inaccurate).

The course of the proceedings

106. During the course of the hearing in September 2010, we were shown a letter which was signed on behalf of Margaret Haugh of the Social Security Agency in Downpatrick, and dated 13 November 2010, and which was in the following terms:-

“I can confirm that customer John Ross has never been awarded any benefits after his employment ended on 31/05/2009 to date and Mr Ross has never made a claim to receive benefit help at any stage in his working career.”

107. However, on 9 October 2010, the claimant sent a letter, which had been drafted by his mother, in the following terms:-

“[During the course of my oral testimony at the hearing] I stated that I visited a number of businesses seeking employment and provided a list thereof. An issue rose as to whether I had attempted to apply for benefits. I said I didn’t think I would be eligible but I had never been on benefits and didn’t know a lot about them. I said I had applied for “something” but could not remember what.

My representative moved to ask my mother, who had accompanied me, if she could recall but she said she didn’t think [that] we had followed through on any particular benefits and the representative conveyed this to the chairman.

Well, I have searched for days and found the sick notes my doctor wrote following my dismissal - covering a period of 16 weeks. I sent these off as shown on enclosed documents, to Castlecourt Social Security Office. I did not receive any reply and wrote off on 8 September as my first certificate from [the GP] had been signed on 1 June 2010. I used registered mail. I enclose the documents that were then sent to me as evidence.

Following this, I thought I was not eligible for benefits of any kind.”

108. It was decided to re-convene the hearing, in view of the apparent contrast between the information set out in the letter of 9 October 2010 and the oral and documentary evidence which had been provided in the course of the September hearing; it was decided to re-convene the main hearing of this case, so that the claimant and his mother would have the opportunity to provide further evidence in respect of the extent of the claimant’s loss, and in respect of any benefits which he might have claimed. Unfortunately, the first date which suited for a re-convened hearing (in light of other commitments of parties, witnesses and the members of this tribunal) was 8 December 2010.

Interest

109. This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing: 6-9 September and 8 December 2010, Belfast.

Date decision recorded in register and issued to parties: