United Kingdom Employment Appeal Tribunal

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URL: http://www.bailii.org/uk/cases/UKEAT/1978/108_78_2007.html
Cite as: [1978] UKEAT 108_78_2007, [1978] IRLR 379, [1980] ICR 303, (1978) 13 ITR 560

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JISCBAILII_CASE_EMPLOYMENT

		BAILII case number: [1978] UKEAT 108_78_2007
		Appeal No. UKEAT/108/78

EMPLOYMENT APPEAL TRIBUNAL

	At the Tribunal
	On 20 July 1978

Before

The Hon. Mr. Justice ARNOLD
Mr. J.D. Hughes QBE
Mrs. J.G.C. Milligan OBE

BRITISH HOME STORES LTD APPELLANT

BURCHELL RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellant	Mr. L. BRITTAN Instructed by Messrs. Field, Fisher & Martineau, Lincoln Ho., 296-302 High Holborn, London WC1V 7JL.
For the Respondent	No appearance or representation.

MR. JUSTICE ARNOLD: This is an appeal by British Home Stores Ltd. against the decision of the Industrial Tribunal sitting in London on 14th and 15th December of last year, when they had to consider an application by Miss Burchell, the applicant before them and the respondent to the appeal, in which she claimed that she had been unfairly dismissed by the present appellants. What has happened in fact is that Miss Burchell is back working for the appellants and everything so far as we know is perfectly happy in that quarter. It is for that reason, as she has said, in a letter she has written to the Tribunal, that she is determined not to come here to oppose the appeal. That makes oar task not easier but more difficult, since it is we who have had to put to the appellants the matters which might have been put by an advocate for Miss Burchell had she been anxious to defend the decision, which was a decision that she had been unfairly dismissed.

The case is one of an increasingly familiar sort in this Tribunal, in which there has been a suspicion or belief of the employee's misconduct entertained by the management, it is on that ground that dismissal has taken place, and the tribunal then goes over that to review the situation as it was at the date of dismissal. The central point of appeal is what is the nature and proper extent of that review. We have had cited to us, we believe, really all the cases which deal with this particular aspect in the recent history of this Tribunal over the three or four years; and the conclusions to be drawn from the cases we think are quite plain. 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 of the case. It is the employer who manages to discharge the onus of demonstrating those three matters, we think, who must not be examined further. It is not relevant, as we think, that the tribunal would itself have shared that view in those circumstances. It is not relevant, as we think, for the tribunal to examine the quality of the material which the employer had before them, for instance to see whether it was the sort of material, objectively considered, which would lead to a certain conclusion on the balance of probabilities, or whether it was the sort of material which would lead to the same conclusion only upon the basis of being "sure," as it is now said more normally in a criminal context, or, to use the more old-fashioned term, such as to put the matter "beyond reasonable doubt." The test, and the test all the way through, is reasonableness; and certainly, as it seems to us, a conclusion on the balance of probabilities will in any surmisable circumstance be a reasonable conclusion.

Now here the tribunal has started off, as we think, entirely correctly by stating in an opening paragraph of their Reasons: "In these proceedings we are not concerned with whether Miss Burchell was guilty or innocent of the offences charged against her but whether the respondents had reasonable grounds for believing that she had committed the offences when they dismissed her on 28 October 1977."

That is quite correct. It is important always in these cases to bear in mind, as we bear in mind and choose to say, that on no view of the matter did the industrial tribunal, nor does this Tribunal, adjudicate upon the guilt or innocence of Miss Burchell. Miss Burchell has never been prosecuted. Miss Burchell has never had any finding against her by any tribunal, certainly not by this tribunal, that she was guilty of any offence of dishonesty which the employers believed she had committed. Nothing which was said in the industrial tribunal, and nothing which is going to be said by us, ought to be taken in any way as any conclusion on their part, or our part, that she was a guilty person. She is entitled to go ahead as a person who has not been convicted of, or even charged with, any criminal offence.

What happened was this. There were four matters which were known to management, which, as the case had been put to us, were the ingredients in the state of mind of management which resulted in their belief of Miss Burchell1s guilt. It is, we think, beyond question on the evidence, and indeed on the tribunal's finding, that the employers did entertain that belief as a fact. Those four matters were these, very shortly stated.

The first was a departure from the normal method of signing for internal purchases. What happened was that in certain classes -most classes, no doubt - of goods the terms of the employment permitted the employees in the store run by the appellants to purchase goods on offer for sale to the public on advantageous terms. But that had to be done by a specific procedure which involved the employee going into a changing room, taking off her overall, coming out dressed In her ordinary clothes, selecting the goods, taking them to a sales assistant, getting a docket (which she had drawn before she came back into the store) signed by a sales assistant, and then on the way out paying for the goods, at the preferential rate. That is a short and very likely inadequate description of the system. But the system, as a norm within it, contained this as part of the training instruction which new employees were given ( and there was evidence that it was the norm), that the sales assistant who signed the docket for the purchase by the employee would be the one who was adjacent to the department from which the goods were to be purchased, and, therefore, a person who would (more likely than not at least, if one may speak for a moment as a customer) be familiar with the goods and with the prices which were payable for them.

In early October some material had come to the notice of management which indicated that something dishonest was going on. The first step which was taken in the investigation of that matter was that a member of the detective staff, a Miss Parry, was instructed by the deputy manager to undertake an analysis of the staff purchase dockets appertaining to Miss Burchell and one other employee who had been implicated by the allegation (no more) to see how far there was a departure from the norm which we have mentioned. That investigation took place during October and covered the period April to October 1977, and it threw up a pattern of signing for staff purchases, involving by a process of logical extension as the investigation proceeded not only Miss Burchell and the initially other involved employee, but two others, which showed that within that group of four there was a preponderance of inter-signing not to be accounted for by accident affecting the particular department in which the staff purchases had ' been made. That was the first factor.

The second factor was that one of the four persons investigated (in fact, one of the two that came in by the extension), in the course of the investigations, was challenged about the matter and was accused in general terms of using this departure from the signing norm as a cover for dishonest activities - the dishonest activity being the acquisition, by the acquiescence or friendly co-operation or whatever it may be of the particular signing assistant, of the goods at a less price than that at which they ought to have been obtained even given the staff concession. This particular lady, "Mrs. L.," (as she should be referred to), was minded to admit that something like this had taken place, and she said that Miss Burchell also was involved. How that, as a piece of evidence looked at from the point of view of the criminal law, was of course a statement by an accomplice and would only be safely acceptable, one would have to warn a jury, if it were corroborated. But that sort of consideration, in our judgment, has nothing whatever to do with this present problem; it was a piece of evidence which came to the notice of the management, and a piece of evidence, for what it was worth, that they were within reason entitled to take into account.

The third matter was this. Another lady who was a part of the investigation - in fact she was the one who started off the investigation with Miss Burchell, who was one of the original two persons to be investigated - had purchased a garment, in accordance with the staff procedure, quite regularly except in one respect: that although she was the purchasing employee, it was on Miss Burchell's docket that that purchase had taken place. That was quite outside the proper procedure, and that was the extent of that irregularity.

Lastly (this is the fourth matter) there was a matter concerning a purchase by Mrs. L. of some sun-glasses. Now there were two sorts of sun-glasses of the relevant character in this department. There was the more expensive polychromatic type which cost £6.99 to the public; there was the cheaper, polarised type which cost £2.99 to the public. The evidence suggested very strongly that Mrs. L. had bought the more expensive pair and had got away with paying for the cheaper pair on a docket which had been signed by Miss Burchell. That by itself, of course, was not an indication of guilt on the part of Miss Burchell; "but if Miss Burchell knew that the pair of sun-glasses was of the more expensive sort, then of course a very different situation applied.

Those four matters, so it was said, were the ground of the management's belief and the subject of appropriate investigations, so it is alleged.

Now it is important to observe that the tribunal, who saw the witnesses called on behalf of management, had this to say about the investigations which took place: "We place it on record that we accept implicitly the evidence they [the witnesses] gave of the manner in which the various interviews were conducted and of what was said to them. We accept that each of the parties, and in particular Miss Burchell, were invited at each interview to be accompanied by a friend, that the interviews were conducted fairly, and that the respondent acted throughout in the utmost good faith." Then they say that the only suggestion to the other effect was made in relation to a quite irrelevant aspect. So we must start with this, that the evidence which was given by the various witnesses who were concerned on behalf of management in the investigation was true evidence as to what had passed between the persons concerned in the course of the interviews and that the interviews were conducted in such a way that any statements which were made in the course of them may be taken to have been made against the background of a fair interview.

The mutual signing pattern, to give it a shorthand phrase, which we have mentioned was capable, obviously, of various interpretations. It could be (the tribunal perhaps rather suggested it might have been) to some extent actuated by the circumstance that it was more pleasant to do business with a chum, when one might have a pleasant chat in the course of the business, than to do business with someone one knew less well. It was also susceptible, obviously, of an explanation of a more sinister character: that if one were trying to get away with something, one was more likely to do so with a friend who would be either actively co-operative or at least less exigent, perhaps less suspicious. But what we think, or what the tribunal may think, is the likely explanation is not material. What is important was that beyond question the management, in its consideration of the matter, concluded that his was a suspicious circumstance fit to be put into the general pot of circumstances out of which their conclusion should be drawn. It is quite impossible to say that that was not a reasonable point of view.

We have already mentioned the second matter, the matter of Mrs. L,'s statement of implication by Miss Burchell. The tribunal dealt with this is in a way which is in a measure unsatisfactory. The tribunal was inclined to say that the proper course for management to have pursued in relation to its investigations was to confront Mrs. L. and Miss Burchell and to observe from what passed between them upon such confrontation where perhaps the truth was most likely to lie; and indeed Miss Burchell suggested, or challenged management to pursue, such a course. Well, it might be regarded as reasonable to have done that, although we have some doubt even about that. But to say that it was unreasonable not to have done that appears to us to be a quite impossible conclusion, particularly in a case in which, as here, there was no trade union representation; and it would have been, as we think, very essential for there to have been an arbiter independent of management and minded to look after the employees if any such venture was to be contemplated. But we are content to say that we cannot think that it was unreasonable to resist the idea of confrontation.

Where the matter however is somewhat less satisfactory is in relation to the nature of the allegation as put to Miss Burchell, which of course could only be pursued by question put by management to Miss Blurchell in the guise and with particularity in which they had been received by management from Mrs. L. Mrs. L. had not in fact, so far as the evidence goes, implicated Miss Burchell in any particular dishonest transaction. It is not easy to see that Mrs. L. could have "been in any way compelled (short at any rate of recourse to the criminal law) to give any full explanation of the general nature of her admission of dishonesty (which is where this thing starts) and of a consequential, or at least an associated, implication of Miss Burchell. But there it was; the matter was put in general terms, in the same general terms as management had it from Mrs. L. to Miss Burchell, and Miss Burchell denied it. She denied it in terms of saying "You'll have to prove it," and adopted not surprisingly in the circumstances, a somewhat hoity-toity attitude, and in a sense that one might say to oneself, "Who wouldn't?" But the matter was put to her and she was invited to give her explanation,

We discard for our part the next matter. We do not accept the submission that the matter of Mrs. H.'s garment played any real part in management's conclusion, and we put that on one side.

But now we come to what seems to us at any rate (although that is not particularly material), the most important of the grounds which gave management its conclusion; and that is the matter of the sunglasses o Now of course it must be right that it would be quite unreasonable to feel sure, to feel satisfied, in a belief of guilt, merely from the circumstance that the advantage - the dishonest advantage - which Mrs. L. obtained by buying expensive sun-glasses at a price of cheap sun-glasses was because Miss Burchell signed the piece of paper, unless there was some indication that she knew what she was about. It is therefore very important to see what was the evidence given about this matter - evidence which was, on the tribunal's finding, true evidence. The evidence was that of a Miss Boothman, who was assistant staff manager, and she said this: she was describing an interview which. Mr. Hamer, in charge of the investigation, had with Miss Burchell in the presence of Miss Boothmn:

"I think Mr. Hamer was trying to put Miss Burchell at her ease and to be free to ask me questions."

Miss Boothman had been brought in partly because she was a manager, but partly because she was acting as a sort of "prisoner's friend," if I may use that phrase, Miss Burchell having been asked if she would like somebody else there. No one suggested, of course, that she was not telling the truth.

"She understood what was going on. Mr. Hamer made it clear and Miss Burchell did not need assistance from me.

Miss Burchell said she had put the sun-glasses on Mrs. L.'s docket, that was discussed with Mrs. H. who said £6.99. Mr. Hamer put it to Miss Burchell that she knew when she left the store they were £6.99. Miss Burchell agreed. Mr. Hamer was emphasising 'knowingly' - she did not deny but accepted."

What one there finds, as it seems to us, is the undisputed fact that management did form the belief that Miss Burchell was guilty; that the matters which went into that belief were what had emerged from the examination of the docket signing pattern, what Mrs.L. had said (though very unspecifically), and Miss Burchell's denial of the equally unspecific retailing of that to her; and the matter of the sunglasses, where she had accepted, according to the evidence as found by the tribunal, that she knew that Mrs. L. was getting the goods too cheap. The question which had to be determined by the tribunal was, as we think, quite simply whether a reasonable management could find from those three matters material for a belief that this young lady had done what she was suspected of doing. It seems to us impossible to answer that question except in the affirmative.

What seems to have happened here, as we read the Decision, is that having, as we have already mentioned, started out by stating the function of the tribunal with accuracy, they then were in the course of their observations or considerations - perhaps very humanly with some degree of sympathy with, the young applicant, not professional!; represented, and an anxiety to see that she got a fair crack of the whip - departing from the task which they had set themselves; and that they embarked upon an independent evaluation of the evidence, not for the purpose of seeing whether management could reasonably have drawn the conclusion which management in fact drew, but whether that was by an abjective standard a correct and justifiable conclusion. And moreover they were led into examining the matter from the point of the standard of proof which could be derived from the matters which had been stated, which were known to management, in .order to see whether the conclusion was justified. There are extensive citations from the well known case of Hornal v. Neuberger Products Ltd. (1956) 3 All ER 970 in which the Court of Appeal considered in great particularity different standards of proof - or, perhaps more accurately put, whether there was a different standard of proof - in a civil case on the one hand and in a criminal case on the other. That, as we think, had absolutely nothing whatever to do with the proper task of the tribunal, which had throughout to do that which this tribunal initially embarked on doing, which was to examine the reasonableness or otherwise of the conclusion reached by management.

They also, it seems to us, became confused along the line between the two somewhat distinct tasks of investigating whether the conclusion of management was a reasonable conclusion on the basis of the material which they had before them and whether, in assembling that material, management had carried out the sort of investigation which a reasonable management could have regarded as sufficient. At the end of the day, no doubt, the two things run close and parallel; but they are distinct.

We were particularly disturbed to find that in a consideration of the justification for the management to have concluded that Miss Burchell was guilty they had in some sort of way departed from their general policy of recourse to the criminal law. The tribunal say:

"It is the respondents' policy to prosecute anyone for committing an act of dishonesty. Mr. White (security Executive) who is a former chief superintendent of Metropolitan Police admitted that the respondents had insufficient evidence to charge Mrs. L. or Miss Burchell. By the same token there was insufficient prima facie evidence on 28 October to justify the dismissal of Miss Burchell on grounds of dishonesty."

That is a total misapprehension, as it seems to us, of the distinction between the sort of evidence which can justify a reasonable conclusion of management, and the sort of evidence of a quite different standard which a prosecuting officer, such as a superintendent of police, would regard as sufficient to place before a magistrate or a jury.

It is not helpful to dwell further upon the matter. The misconception of that character seems to us to have informed not only the tribunal's conclusion as to the sufficient level of material to justify a belief of guilt, but also as to what they could legitimately require as the quality and level of investigation antecedent to the formulation of that belief on the basis of the resulting material. We think here it must be right to say that there has been such a confusion of thought upon the matter as to justify the conclusion that the tribunal were not entitled to characterise the belief of the management, the fact of which is not in dispute, as unreasonable, either in its formulation or in relation to the antecedent investigation0 We think that accordingly the prescriptions of sub-para. (1) of para. 6 of Schedule 1 to the Trade Union and Labour Relations Act 1974 as to the existence of a ground of dismissal which would justify it, and the prescriptions of sub-para. (8) of para 6 as to the taking of the decision in a reasonable way, are both of them satisfied by the evidence brought forward by management so as to discharge the burden, with the consequence that this was not, as we think, an unfair dismissal.

Accordingly the appeal is allowed.

United Kingdom Employment Appeal Tribunal

BRITISH HOME STORES LTD APPELLANT BURCHELL RESPONDENT

BRITISH HOME STORES LTD APPELLANT

BURCHELL RESPONDENT