United Kingdom Employment Appeal Tribunal

1. MR JUSTICE PHILLIPS: This is an appeal by Parkers Bakeries Ltd from the majority decision of an Industrial Tribunal sitting in Bristol on 6.7.76. By its decision, entered on 20.8.76, the Industrial Tribunal found that the applicant was unfairly dismissed and awarded him £675 by way of compensation.
2. Upon the hearing of the appeal Mr Tron has appeared on behalf of the appellant employers and argued the case most helpfully. Mr Palmer, who was the successful applicant, has not appeared and is not represented, but solicitors on his behalf have written saying that he would not appear; they were not instructed to appear. However, there is before the Court a Respondent's Notice dated 5.10.76 and we have taken that into account in reaching our decision.
3. The outline of the case is simple. Mr Palmer was employed as a driver/salesman. His employment began in February 1973 and he was dismissed on 16.2.76. The dismissal arose out of the way in which he had performed his duties in connection with a customer by the name of Phipps. Mr Phipps had two shops, one in Queen's Street, Eastville, Bristol; the other in Lockleaze. This case only concerns the Lockleaze shop. The way in which the business was done was that Mr Palmer used to call every morning at about 5 am and deliver bread to the shop in Queen's Street and to a mobile shop which would be driven off by Mr Phipps. Next he would deliver some loaves into a Dormobile van standing outside the shop in Queen's Street and which at about 7.30 am would be taken by a Miss Mizen to the Lockleaze shop; so it would be after 5 am - there is a suggestion in the evidence, though it is not precise, that it might be 5.30 am - before the Dormobile was loaded up with the loaves for the Lockleaze shop. The dismissal arose out of complaints which had been made by Mr Phipps. The complaints were that there were discrepancies between the number of loaves shown in the invoice of goods delivered and the number of loaves which he actually received. As will appear presently, those complaints were investigated, but it is convenient to leave that at the moment and to say something about the form of the Decision.
4. Paragraph 11 in effect is the operative part of the Decision. In paragraph 10 the Tribunal had said - and this was the unanimous part of their decision -

"On the evidence before us we find that the reason for dismissal of the applicant was that there was a short fall of approximately 20 loaves a day in the applicant's deliveries for four days to Mr Phipps' shop at Lockleaze. We find that this was the reason for his dismissal and we find that it relates to his conduct."

5. They continued in paragraph 11:

"Now we come to the question as to whether the decision of the employers was a reasonable one."

6. So far so good. They continued:

"The Chairman of the Tribunal took the view that the decision to dismiss the applicant was not unfair but the other two members took the view that in all circumstances the decision was unfair. They were particularly swayed by the fact that there was no proof that someone else had not removed the bread from the van" -

we interpolate, that means over a period between, say, 5.30 am and 7.30 am, when the van was standing loaded outside the shop. So the Tribunal are there indicating that they would have expected positive proof that someone else had not removed the bread. They continued - and this is the view of the majority, still:

"They were also of the opinion that a shortfall of such a small amount did not warrant immediate dismissal."

7. It seems to us that there is an apparent inconsistency there. It may be that what the majority meant was that they were not satisfied that Mr Palmer was responsible for the shortfall, but that, even if he was, such a small amount, namely 20-plus loaves on each of four days, did not warrant immediate dismissal. If the latter is what they meant, we should not agree; it would seem to us that for a man in a position of trust, of whom it had been shown that he was responsible for a daily shortfall of over 20 loaves of bread, in the absence of some explanation or mitigating circumstances, dismissal would be the appropriate action. Then the paragraph continues:

"In their view it would have been sufficient to warn the applicant that any repetition of the act would result in his dismissal."

Again we could not go along with that.

8. In paragraph 15 of the Reasons it is said:

"The total of all these items [of compensation] set out above come to £750.38. We also find that the applicant by his behaviour should make a contribution to his loss which we estimate at 10%."

9. That, although it does not expressly say so, is presumably the view of the whole Tribunal.
10. Before getting down to further details, it seems to us, with respect, that this decision is unsatisfactory in a number of ways in which we find from experience that sometimes decisions of Industrial Tribunals are. We draw attention to it, therefore, both in respect of this case and more generally.
11. First of all, where there is a majority decision it is very desirable that the views of the majority and those of the minority should be set out clearly and distinctly in separate paragraphs. Unless that is done neither the parties nor the Appeal Tribunal can really get a clear idea of precisely what are the views of the majority and the minority respectively.
12. Secondly and quite apart from that, it is essential that decisions should set out the findings of the primary - ie, the basic - facts found. We do not know, for example, precisely what the majority thought had been established; equally we do not know what the minority thought had been established. It is essential that that should be stated before the conclusions are given, because the conclusions must be dependent on the findings of basic fact.
13. Thirdly, in paragraph 15 it is totally unsatisfactory to say, 'We also find that the applicant by his behaviour should make a contribution to his loss which we estimate at 10%.' As has been said more than once, Industrial Tribunals must specify the behaviour, action or conduct which they are taking into account under that head. Consider this case: there seems at first sight to be a complete inconsistency between saying, in one and the same breath, that Mr Palmer was unfairly dismissed but that he contributed to his dismissal to the extent of 10%. It makes it sound as though it is a kind of compromise, which would be wrong. That may be being quite unjust to the Industrial Tribunal. It may be - we can only speculate - that the 10% refers to his conduct when the matter was investigated by way of interview, when he took a somewhat inactive and supine part. That may have been what they had in mind, but the mere fact that we are driven to speculate about it indicates the real need for Industrial Tribunals to spell out in their decisions all the basic facts which they have found. That is not merely for the benefit of the Appeal Tribunal. Even in cases where there is no appeal, and no likelihood of there being an appeal, it is essential that the parties should know why they have won or lost, and the findings on the various controversial issues.
14. So we turn to the findings of fact so far as they can be established, against the background that in some respects some parts of the decision (in so far as reasons have been given for it) do seem to be inconsistent, or anyhow possibly inconsistent.
15. The first thing to say (because there is at least a suspicion that the Industrial Tribunal may not have approached the question correctly) is that the test in a case like this is: what would reasonable employers have done, on the facts which they knew, or reasonably ought to have known, in the circumstances of the case? That in essence is an application of para. 6(8) of Schedule 1 to the 1974 Act to this type of case. There is plenty of authority to that effect, such as Ferodo Ltd v. Barnes [1976] IRLR 302, and Trust Houses Forte Leisure Ltd v Aquilar [1976] IRLR 251. The task of an Industrial Tribunal in this type of case is not simple. There is a grave danger of falling into one or other of two errors. One extreme is, in effect, constituting themselves into a criminal court, or a court of appeal, perhaps, retrying the charge levelled against the employee. That would be wrong. The other extreme would be to assume that it was merely a matter of looking to see what the employer did and, perhaps, giving the impression that that should not be looked at critically. That would not be right, either. The employer does not have the last word; equally the Industrial Tribunal is not there to take the decision for him. The Industrial Tribunal has to look to see what are the facts known to the employer, or which he should have known, and decide whether in those circumstance he acted reasonably.
16. We turn then to the facts in so far as they are established or apparently not in dispute. First of all there is no doubt that the customer complained. Because the complaint was later found to be justified, it indicates that the trouble had been of some previous standing. It plainly indicates that in all probability, if there were shortages, the customer was not responsible for them himself. As a result of the complaint the employers mounted an investigation, having first properly informed the shop steward that this would be done, but not when it would be done. The investigation established on each of the days of 4, 5, 6 and 7 February a shortage of upwards of 20 loaves as between the figures shown in the invoice delivered, on the one hand, and the goods actually delivered, on the other. Part of the trouble was that the invoices were not signed by the consignee.
17. Mr Palmer went on holiday after the last delivery on 7 February. On 16 February, which was a Monday, the first day of his return to work, he was summoned before the employers to explain the apparent deficiencies. He was given sufficient warning to have with him Mr Ryan (shop steward) and the whole matter seems to have been done with a great deal of deliberation. The security personnel who conducted the investigation had put into writing the statements of the various persons concerned. Those statements, in effect, apparently set out the account which we have so far summarised in this judgment.
18. Before turning to see what Mr Ryan or Mr Palmer said, it is important to see what the evidence established. Without going elaborately into the employers' system (which worked on the basis that at the end of the day, if a roundsman had more cash than he expected, he kept it; if he had less than he should have had, he made it up) the following conclusions, we think, are justified. It was not seriously disputed that the investigation was properly conducted and really did establish - prima facie, anyhow, and with a good deal of conclusion - that there was this daily discrepancy. Accepting that fact, and having regard to the system in operation, there seem to have been only three possible explanations. It could have been that the figures for bread in the invoices were deliberately inflated; that in fact it was a case of a manipulation of the invoices and there never was any shortage of bread at all. But if that were the case, then of course nobody but Mr Palmer could have been responsible. Secondly, it could have been that Mr Palmer did not put into the Dormobile all the bread that he said he put into it. Again, if that were so, only he could be responsible. The case seems to have proceeded on the footing that neither of those first two possibilities were applicable, thus leaving the third and only other possibility - indeed, the only one consistent with his innocence of any wrongdoing - namely, that between about 5.30 am and 7.30 am bread was stolen from the van. The evidence as to whether the van was locked or not went both ways, but in the end the Tribunal proceeded on the footing that they were not satisfied that it had been locked; and we should proceed on that footing also. It was on that aspect that the majority said that there was no proof that someone else had not removed the bread from the van. It would be a difficult thing to prove, but the probabilities certainly seem to be against it. In terms of bulk, 20 loaves is a considerable number of loaves; it is certainly not an amount that a petty thief would take for himself, and, if this was a sustained theft, one would have expected that more would have been taken. It was a fact, we are told and seems to be the case, that nothing else was taken from the Dormobile. But it is right to say that that is a question which on the evidence could not be regarded as having been conclusively established one way or the other. It was about that, that in the majority part of the decision in para. 6 it is said, 'There is one weak link in the chain.' The link is that to which I have just referred.
19. Pausing at that stage, the evidence established therefore quite conclusively that something wrong was going on involving these discrepancies day by day, which must have been the fault of Mr Palmer unless someone was taking loaves from the Dormobile. In those circumstances it seems to us that the vital matter is what happened at the interview when this question was further investigated. About this there is a unanimous finding of fact. At the meeting there were present Mr Ing (sales manager) Mr Ryan and Mr Salder (security officer). The Reasons state:

"Mr Ing confronted Mr Palmer and Mr Ryan with the reports of the four days of the test and with the written statements of the witnesses. Mr Ryan and Mr Palmer then withdrew. Before they withdrew, Mr Ing told Mr Palmer that he thought it was a case of serious industrial misconduct, which he asked the applicant to explain."

20. Although the words 'theft,' 'dishonesty,' 'deception' and so on were perhaps not used, it is quite clear from the evidence that everybody understood what was the reality of the complaint being made, and that it was a serious complaint of serious misbehaviour. The Reasons continue:

"8. The applicant offered no explanation apart from saying that he was friendly with Mr Phipps. According to Mr Ing, the security officer said he wished to prosecute but that Mr Phipps would not have it. Mr Ryan and the applicant then withdrew to confer and on their return Mr Ryan asked"

- the next part is in inverted commas and it seems clear that it is a finding of fact by the Tribunal -

"If the applicant pays £16 ..."

21. Interpolating there, that was the amount attributable to the bread in respect of which there were discrepancies -

"If the applicant pays £16 and is dismissed, will that be the end' to which Mr Ing replied 'Mr Phipps does not want a prosecution and there will be no further action.'"

22. On the evidence, we take the words 'there will be no further action' to relate to prosecution and not to the question whether there would be a dismissal. So, having been assured there would be no prosecution, Mr Palmer signed a letter which said:

"I hereby authorise Parkers Bakeries Ltd to deduct the sum of £16.02 from money due to me by the company. This amount acknowledged as a debt owing to them."

23. It should be said that when he had gone away on holiday - presumably after work on 7 February - he was, so he said, £16 to the good in his cash, which he retained.
24. The question, against the background of the evidence which we have summarised, is, what would reasonable employers, directing themselves in accordance with the code of practice and current industrial practice, do? Or to use the words of para. 6(8) of the Act, what did 'equity and the substantial merits of the case' require? They were satisfied that there were those discrepancies. Plainly from their action, they believed Mr Palmer to be responsible. There was abundant evidence on which they could form that prima facie or preliminary view. It seems to us that their eventual conduct must in a case of that kind be largely determined by the reaction of the man against whom the complaint is being made. His reaction was as we have indicated. It is certainly right to say that it was not an outright acknowledgment of guilt, but it was something approaching a tacit one inasmuch as he was prepared to make up the £16 and was content, it seems, if not prosecuted, to be dismissed. Whereas it cannot be said that he resigned, there is certainly a tint of that in the circumstances of what happened.
25. Asking ourselves against that background what the employers could reasonably have done, it seems to us that they acted perfectly reasonably in dismissing Mr Palmer for the reason they gave, on the facts known to them, in the circumstances of the case.
26. The only other relevant matter to be added is that neither then nor later did Mr Palmer, or Mr Ryan, or anyone on his behalf, seek to make use of the grievance procedures, or to appeal, or to make further representations or anything of that character. Indeed, nothing happened until eventually these proceedings were brought by an originating application made by Mr Palmer on 22 April, more than two months later.
27. It is perhaps unusual in a case of this kind to substitute our view for that of the Industrial Tribunal and not to remit the case to be re-heard. We did consider that alternative, of course, but it seems to us that the case is so clear on the uncontroverted evidence, that it really only admits of one answer, which is that which we have given.
28. Accordingly, the appeal must be allowed and the decision of the Industrial Tribunal set aside.