MR. JUSTICE BROWNE-WILKINSON: This is an appeal from a decision of an industrial tribunal which held that Mr. Jones had been unfairly dismissed by his employers, Iceland Frozen Foods Ltd. which we will "call the company".
Mr. Jones was employed by the company from 13th April 1980 until 2nd July 1981 when he was summarily dismissed by the warehouse distribution manager, Mr. Boyland. The company carries on business in retail food distribution selling frozen foods. They operate 43 shops 11 of which are supplied from a cold store at the Deeside Industrial state at Queensferry. Adjacent to that store are the administrative offices of the company. The store and the administrative offices do not inter-communicate. At the time of his dismissal Mr. Jones was the night shift foreman at the warehouse. The company is of fair size with bout 450 employees altogether.
The circumstances of the dismissal were these. The night shift operated a 40 hour week. If, on any night, they had finished their work hey knocked off early; if they had not finished their work by the end f the shift they continued to work thereafter. Only if in any week they had in all worked more than 40 hours was overtime paid. They were also working under a scheme which provided a bonus in the event that errors in the loading of the lorries were avoided. The ordinary night shift hours were from 10.00 p.m. until 6.00 a.m. There was a break between the last day shift and the commencement of the night shift, and also a break between the end of the night shift at 6.00 a.m. in the morning and the commencement of ordinary work some hour and a half later, it was part of Mr. Jones's duties at the start of the night shift to unlock the warehouse and disconnect the electronic security system covering both the warehouse and the office. At the end of the night shift, it was his duty to lock up the warehouse (and the office accommodation if it were open) and to re-activate the security system which was itself linked to a central security system run by an independent contractor.
The events in question took place on the night of 1st/2nd July 1981. When the day shift arrived on the morning of 2nd July it was found that tie office accommodation was unlocked and although the warehouse was locked the electronic security system had not been re-activated. Mr. Boyland was present when that was discovered. Mr. Boyland then looked into the matter with the security company and confirmed that the electronic alarm had not been re-activated. He drew the inference, correctly, that Mr. Jones could not have locked the administrative block or re-activated tie alarm before leaving the premises after the conclusion of the night shift. He also discovered that the night shift had worked for the full eight hours on the night of 1st/2nd July but the number of items that ad been loaded was substantially smaller than the normal average for a full eight hour shift; indeed, it was approximately 20% less than on tie previous night. He reached the conclusion that there had been a deliberate "go-slow" by the night shift workers with the object of earning overtime for that week. He thought that Mr. Jones, as foreman, must be a party to that deliberate go-slow.
As a result, Mr. Boyland summoned Mr. Jones to an interview before the start of the night shift on the evening of 2nd July. The meeting took place at 6.30 p.m. that evening and lasted for about ten minutes. The industrial tribunal were unable to make express findings as to what took place at that meeting save in certain respects which we will mention hereafter. At the conclusion of the meeting Mr. Boyland summarily dismissed Mr. Jones.
Mr. Jones then brought proceedings claiming that he had been unfairly dismissed. The industrial tribunal held that the dismissal was unfair and awarded him compensation assessed at £1,719, having held Mr. Jones to have contributed to his own dismissal to the extent of 40% and reduced the compensation by that proportion.
The industrial tribunal approached the question of the substantive fairness of the dismissal and the procedural fairness of the dismissal separately. The tribunal came to the conclusion that the reason for dismissal of the applicant was his failure to re-activate the security alarm and to lock up the premises, and also the belief which Mr. Boyland held that Mr. Jones, as foreman, had allowed or possibly encouraged the night shift to "go-slow" that night.
As -to-the substantive merits of the decision to dismiss, the tribunal asked itself this question: Did the two-fold faults by the applicant lake it reasonable to dismiss him? They answered that "In our view, they did not." They did not regard Mr. Jones's failure in relation to the alarm as being serious, saying that everyone makes mistakes sometime, they did not regard the particular error as to security as being of an obviously serious nature on that occasion. They obviously regarded the time of day at which it took place, namely, in the morning between 6.00 urn. and 7.30 a.m. as being a time at which the premises were not very vulnerable and pointed out that there were drivers around at that time.
As to the "go-slow", they did not think it was reasonable to dismiss on that ground bearing in mind the fact that some three months previously Mr. Jones, as foreman, had been told that he had been too tough and peremptory with his gang. Having set out their reasons much more fully than we have sought to summarise them they conclude by saying:
"...in our view neither of the applicant's faults, either singly or taken together, came anywhere near being sufficiently serious to make it reasonable to dismiss him applying the provisions of section 57(3) as amended.
For these reasons we find this dismissal to be unfair on its general merits."
They then went on to say that in their view the dismissal was also unfair on procedural grounds. Mr. Jones, under his contract, had the right to be accompanied by a representative at any disciplinary meeting Before a decision was taken to dismiss him. That provision had been breached. They also came to the conclusion that at the short ten minute meeting Mr. Jones was not allowed to put over his case at all, Mr. Jones's case being that the night shift were working slower than usual with the object of avoiding errors and thereby earning the full bonus for careful loading. The tribunal also took the view that the reality of the case was that there had been over much haste in the dismissal. The tribunal for those and other reasons held that the dismissal would have been unfair on procedural grounds alone.
Although, as will appear, we do not regard the treatment of the case in two separate portions (the one dealing with the reasonableness of the substantive decision and the other the reasonableness of the procedure) to be a desirable course, in order to deal with the arguments presented to us we too will divide it into those two sections.
As to the decision of the industrial tribunal that the dismissal was unfair in that dismissal was an inappropriate sanction for the offence committed, it is submitted that the industrial tribunal misdirected themselves in law in the way they approached section 57(3). From the passages we have read (which in our view are the only ones that are material) it is clear that the industrial tribunal simply find that it was lot reasonable to dismiss him. They do not indicate in the passage we have read whether in so saying they are taking the view that they would not have thought it reasonable in the circumstances, or whether they were considering whether the decision to dismiss fell within the band of reasonable conduct which a reasonable employer could adopt. However, in paragraph 20 of their decision they make it clear that they were not adopting the latter test. They say this:
"In this connection we should mention the case of Rolls Royce Ltd. v Walpole [1980] IRLR 343- Miss Tracey-Forster's submission was that this case decided that an industrial tribunal should not when applying section 57(3) find the dismissal to be unfair unless the decision to dismiss was so unreasonable that no reasonable employer would have decided to dismiss. If the Walpole case really decides this, then it is really harking back to the decision in Vickers Ltd. v. Smith [1977] IRLR 11 EAT which the present chairman endeavoured in the case of Jowett v The Earl of Bradford (2) [1978] ICR 431 EAT to apply in his dissenting view at first instance in the latter case: it seems to us that if the Walpole case really has the effect submitted by Miss Tracey-Forster then it must be regarded as inconsistent with Jowett v The Earl of Bradford. We do not really regard the Walpole case as being any more than a primarily factual decision that in that particular case there was no evidence upon which the industrial tribunal could reasonably find that the dismissal was other than reasonable, .applying the section 57(3) test. There can be no doubt of course (with all respect to the EAT) that different divisions of the EAT have from time to time set out the test in different language, and we would not wish to try and reconcile all the statements of the law in a considered paper on the subject. It seems to us that the right course is simply to endeavour to apply as industrial jurors the test laid down by section 57(3) as amended without adorning the language of that section in any way. That is what we have endeavoured to do in this case."
We then omit a passage and the industrial tribunal go on:
"It certainly .seems to us that if a test on the lines of Vickers Ltd. v Smith is the true test, then it would result in the number of successful claims for unfair dismissal (presently, we understand, only about one-third of the cases which are actually contested) being very much reduced because the number of cases which come before us in which there has been a 'conduct' dismissal on grounds so slim that a tribunal would be likely to form the view that no reasonable employer would have dismissed, is relatively small."
In our judgment, the industrial tribunal misdirected themselves in aw in their approach to this question. The paragraph we have just read indicates that the industrial tribunal disregarded the principle enunciated n Rolls Royce Ltd. v Walpole (which they regarded as being identical with he principle in Vickers Ltd. v Smith) relying, as they did, on the decision of another division of the Employment Appeal Tribunal in Jowett v The Earl of Bradford (2). In the Jowett case it was held that Vickers Ltd. v. Smith did not lay down any rule of law as to the principle to be adopted in approaching the application of section 57(3) but merely laid .own guidelines. Therefore, in the view of the Employment Appeal Tribunal in the Jowett case, an industrial tribunal could not misdirect itself in law if it failed to adopt the approach set out in Vickers Ltd. v Smith.
In our view, the decision in Jowett's case is no longer good law. he history of the matter is this. In Vickers Ltd. v Smith this appeal tribunal reversed the decision of an industrial tribunal on the grounds that "not only was it necessary to arrive at the conclusion that the decision of the management .was wrong; but that it was necessary to-go a stage further, if they thought that the management's decision was wrong, .and to ask themselves the question whether it was so wrong, that no sensible or reasonable management could have arrived at the decision at which the management arrived in deciding who should be selected for redundancy." This appeal tribunal only has jurisdiction to alter the decision of an industrial tribunal if it has erred in law. It necessarily followed that in Vickers Ltd. v Smith the Employment Appeal Tribunal was regarding the principle we have just read as a principle of law, failure to comply with which constituted an error of law.
Next, comes the decision in the Jowett case which, as we have said, treated Vickers Ltd. v. Smith as laying down guidelines only, not as stating a principle of law.
Very shortly thereafter the matter was considered by another division f this appeal tribunal in N.C. Watling & Co. Ltd. v Richardson [1978] ICR 049. In that case Phillips J, having quoted the words of the predecessor of section 57(3), said this at p.1056D:
"The difficulty is that the words can be applied in practice in more than one way. One view - now rejected in the authorities, and to be regarded as heretical - is that all the industrial tribunal has to do is say to itself, reciting the words of paragraph 6(8), 'Was the dismissal fair or unfair?); that having done that it has arrived at an unappealable decision; and that in answering that question it is not required to apply any standard other than its own collective wisdom. What the authorities, including Vickers Ltd. v Smith, have decided is that in answering that question the industrial tribunal, while using its own collective wisdom is to apply the standard of the reasonable employer; that is to say, the fairness or unfairness of the dismissal is to be judged not by the hunch of the particular industrial tribunal, which (though rarely) may be whimsical or eccentric, but by the objective standard of the way in which a reasonable employer in those circumstances, in that line of business, would have behaved. It has to be recognised that there are circumstances where more than one course of action may be reasonable. In the case of redundancy, for example, and where selection of one or two employees to be dismissed for redundancy from a larger number is in issue, there may well be and often are cases where equally reasonable, fair, sensible and prudent employers would take different courses, one choosing A, another B and another C. In those circumstances for an industrial tribunal to say that it was unfair to select A for dismissal, rather than B or C, merely because had they been the employers that is what they would have done, is to apply the test of what the particular industrial tribunal itself would have done and not the test of what a reasonable employer would have done. It is in this sense that it is said that the test is whether what has been done is something which 'no reasonable management would have done1. In such cases, where more than one course of action can be considered reasonable, if an industrial tribunal equates its view of what itself would have done with what a reasonable employer would have done, it may mean that an employer will be found to have dismissed an employee unfairly although in the circumstances many perfectly good and fair employers would have done as that employer did. ...
The moral is that none of the phrases used in the authorities, such as 'did the employer act in a way in which no reasonable employer would have acted?', is to be substituted as the test to be applied. The test is, and always is, that provided by paragraph 6(8). The authorities do no more than try, according to the circumstances, to indicate the standard to be used by the industrial tribunal in applying the paragraph. But every time the starting point for the industrial tribunal is the language of the paragraph."
It does not appear that the decision in the Jowett case was cited in N.C. Watling & Co. Ltd. v Richardson.
In Rolls Royce Ltd. v Walpole exactly the same principle as that set out in Watling v Richardson was enunciated in different but helpful words; the decision of the industrial tribunal was reversed "by the Employment Appeal Tribunal for failure to conform to that principle. May J said this at paragraph 16:
"As this Appeal Tribunal pointed out in the judgment in Watling's case, in a given set of circumstances it is possible for two perfectly reasonable employers to take different courses of action in relation to an employee. Frequently there is a range of responses to the conduct or capacity of an employee on the part of an employer, from and including summary dismissal downwards to a mere informal warning, which can be said to have been reasonable. It is precisely because this range of possible reasonable responses does exist in many cases that it has been laid down that it is neither for us on an appeal, nor for an industrial tribunal on the original hearing, to substitute our or its respective views for those of the particular employer concerned. It is in those cases where the employer does not satisfy the industrial tribunal that his response had been within that range of reasonable responses, that the industrial tribunal is enjoined by the statute to find that the dismissal of the relevant employee has been unfair."
Again, the Jowett case does not appear to have been cited in Rolls Royce Ltd. v Walpole.
Finally, in British Leyland UK Ltd. v Swift [1981] IRLR p.91 the Court of Appeal reversed the decision of an industrial tribunal that a dismissal was unfair and substituted a decision that it was fair. Lord Denning said this at paragraph 11:
"The first question that arises is whether the industrial tribunal applied the wrong test. We have had considerable argument about it. They said: '... a reasonable employer would, in our opinion, have considered that a lesser penalty was appropriate'. I do not think that that is the right test. The correct test is: Was it reasonable for the employers 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. "
Lord Justice Ackner at paragraph. 17 said this:
"As has been frequently said in these cases, there may well be circumstances in which reasonable employers might react differently. An employer might reasonably take the view, if the circumstances so justified, that his attitude must be a firm and definite one and must involve dismissal in order to deter other employees from like conduct. Another employer might quite reasonably on compassionate grounds treat the case as a special case."
Although the reasons given by the third member of the Court of Appeal, Lord Justice Griffiths, are not the same, in our judgment the decision of :he Court of Appeal in the Swift case was that the industrial tribunal lad erred in law by failing to apply the right principle. Even though the Jowett case was not cited in the Court of Appeal it is, in our view, inconsistent with the decision of the Court of Appeal in that case and is no longer good law. It follows that in the present case the industrial tribunal has misdirected itself in law by failing to follow the Watling v Richardson principle.
Since the present state of the law can only be found by going through a number of different authorities, it may be convenient if we should seek to summarise the present law. We consider that the authorities establish that in law the correct approach for the industrial tribunal to adopt in answering the question posed by section 57(3) of the 1978 let is as follows.
(1) the starting point should always be the words of section 57(3) 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 lismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it is unfair.
Although the statement of principle in Vickers Ltd. v Smith is entirely accurate in law, for the reasons given in Watling v Richardson we think industrial tribunals would do well not to direct themselves by reference to it. The statement in Vickers Ltd v Smith is capable of being misunderstood so as to require such a high degree of unreasonableness to be shown that nothing short of a perverse decision to dismiss can be held to be unfair within the section. This is how the industrial tribunal in the present case seems to have read Vickers v Smith. That is not the law. The question in each case is whether the industrial tribunal considers the employer's conduct to fall within the band of reasonable responses and industrial tribunals would be well advised to follow the formulation of the principle in Watling v Richardson or Rolls Royce v Walpole.
Reverting now to the facts of this case, it is suggested that notwithstanding the misdirection, we can uphold the decision of the Industrial tribunal on the ground that on any footing it was manifestly unreasonable for the employers to dismiss in the circumstances of this case. The industrial tribunal obviously regarded the faults of Mr. Jones as minor ones. We cannot accede to the view that notwithstanding the misdirection we can substitute our own decision in this case. Take for example, the failure to lock the office and to set the alarm. The industrial tribunal took the view that the offence was comparatively trivial; it does not necessarily follow that all reasonable employers would share their view on the matter. It may well be that the misdirection on this point is fundamental to the decision of the case. We do not know enough of the circumstances of the employers' business to decide whether the importance which they obviously attached to the 'reach of security was such that a reasonable employer might take the view that the risk of repetition of the breach of security was too great to allow the risk to continue. We express no view on the point one way or the other. We simply cannot decide the matter ourselves on the material we have before us.
As to the alternative ground relied on by the industrial tribunal, tamely, procedural unfairness, as we have said we do not think it the Correct approach to deal separately with the reasonableness of the iubstantive decision to dismiss, and the reasonableness of the procedure Adopted. The correct approach is to consider together all the circumstances of the case, both substantive and procedural, and reach a inclusion in all the circumstances. Moreover, it has been demonstrated ;o us from the notes of evidence that on an important issue on procedure :he industrial tribunal apparently misdirected itself. The industrial tribunal took the view that Mr. Boyland at the short interview did not give Mr. Jones an opportunity to state his case as to the reason for the go-slow. The notes of evidence disclose that both Mr. Boyland and Mr. Jones himself gave evidence that at that interview Mr. Jones did put forward his explanation of the go-slow by the night shift. In the circumstances, it cannot be safe for us to uphold the decision of the industrial tribunal on the grounds of procedural unfairness alone.
We therefore allow the appeal and remit the case to a differently constituted industrial tribunal to consider the matter afresh. It will be for the new industrial tribunal to consider whether in all the circumstances of the case the nature of Mr. Jones's shortcomings were such that a reasonable employer carrying on the company's business would have regarded the dismissal as being a reasonable response and whether, in the circumstances of the case, the dismissal was carried out in a fair way. As we say, that is a matter entirely for the new industrial tribunal. But we do point out that whatever the merits of the substantive decision in this case, the procedure by which the dismissal was carried out has to be carefully considered and taken into account. It may not have been fair, and we say no more than that, to have dismissed Mr. Jones with the haste which was shown in this case without giving him an opportunity to have a representative there. But that will be a matter for the tribunal to weigh together with all the other circumstances of the case.
P. A. HASWELL, 5 CASTLE HILL VIEW, BARDSEY, LEEDS LS17 9EE. VERBATIM REPORTER AND TAPE TRANSCRIBER
