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Cite as: [1992] UKEAT 189_91_2907

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BAILII case number: [1992] UKEAT 189_91_2907

Appeal No. EAT/189/91

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 29 July 1992

Before

THE HONOURABLE MR JUSTICE HUTCHISON

MR J A SCOULLER

MR S M SPRINGER MBE

EXPRESS FOODS GROUP (INTERNATIONAL) LTD APPELLANT

MR M S PUTNAM RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellant MR C JEANS

(OF COUNSEL)

Messrs Cartwrights

Marsh House

11 Marsh Street

Bristol BS99 7BB

For the Respondents MR D SPENS

(OF COUNSEL)

Messrs Faulkners

Argyll House

Bath Street

Frome

Somerset BA11 1DP

MR JUSTICE HUTCHISON: This is an appeal by employers against a majority decision of an Industrial Tribunal sitting in Bristol on 11 March 1991, that the respondent employee had been unfairly dismissed.

The respondent, Mr Putnam was employed as a driver by the appellants. On 11 September 1990, he delivered some goods to the Asda warehouse at Portbury where 12 cases of UHT cream were rejected by Asda as being "out of date" and were reloaded for return to his employers. He had a further visit to make to Anchor Foods where he was to pick up some goods and on arrival there he was approached by an Anchor employee, a Mr Sandell a duty chargehand, and asked if he had "any freebies". His answer was "No. It's all accounted for". This was a reference to documents having been completed apropos the returned goods.

Mr Putnam then, having cleared a space for Anchor goods to be loaded onto his lorry, went off to coffee saying to Mr Sandell on the way "I'm going off for coffee now. It's up front out of the way. What the eye doesn't see the heart doesn't grieve over". While Mr Putnam was absent having his coffee the cream was stolen. The thieves were those at Anchor. The lorry returned to Avonmouth, was unloaded and was then taken back to its place at Frome. Mr Putnam, it seems, did not have direct responsibility in relation to unloading or checking at that stage.

The following day the appellants learned of the discovery of goods at Anchor Foods and of an allegation being made there that Mr Putnam had given those goods to Mr Sandell. On 13 September, the transport manager, Mr Coleman, saw Mr Putnam and put the allegation to him. Mr Putnam gave an account very similar to the version of events already rehearsed. He was suspended for further investigations to take place. On Friday 14 September, there was a disciplinary hearing before Mr Coleman: Mr Putnam attended with a shop steward. Mr Putnam at that enquiry, when asked about matters, repeated his version of events: asked whether he had been led to believe that his actions were within company rules he replied that he had not, by which it was found that he meant that he had no reason to believe that he was entitled to give away returns even if they would be thrown away at the depot. He was asked if he thought that his actions were wrong and he replied "Yes".

It has to be said, although this was a matter of controversy at the hearing before us, that so far as the record goes at no time during that hearing did he, or the shop steward who accompanied him, suggest any innocent interpretation of the words which he had used in his conversation with Mr Sandell. We anticipate the argument by mentioning that in the course of his skilful and eloquent submissions before us Mr Spens, on behalf of Mr Putnam, contended that the reason for that was not the one advanced by the appellants, namely, that that line of defence had not yet been thought of, but simply that it was throughout Mr Putnam's understanding and belief that his words bore the innocent interpretation to which we shall shortly come and that accordingly, the contrary not being suggested to him, there was no call for him to assert that fact.

Returning to the hearing before Mr Coleman he, being satisfied that whether Mr Sandell's version that he had been given the goods by Mr Putnam or Mr Putnam's version already mentioned was correct, dismissal was appropriate, dismissed Mr Putnam. Mr Putnam, again represented by a shop steward, appealed and the appeal was heard by Mr McCann the personnel manager. It is right to point out that Mr McCann in his capacity of personnel manager had, as the evidence shows although this does not figure in the tribunal's findings, been consulted before the disciplinary meeting by Mr Coleman in order that Mr Coleman could obtain information as to what precedents there were for dealing with people who had been guilty of dishonest conduct.

Mr Coleman was present at the appeal hearing because the system of procedure agreed with the union required that he, and indeed everyone who had been present at the hearing below should be present. After submissions from the shop steward on behalf of Mr Putnam, Mr McCann addressed some questions to Mr Coleman and adjourned. At that stage Mr Coleman remained in the room with Mr McCann while the shop steward and the applicant left. While he was there he was asked some further questions by Mr McCann dealing with the question of records of goods. He then left and Mr McCann after time for consideration gave a decision rejecting the appeal.

The contention advanced by the shop steward had been that the appropriate penalty should not be dismissal but a lesser one of suspension without pay with a life warning, which it was suggested would have been more just. Mr McCann rejected that contention. Once again, so far as the record goes, it would seem that no innocent interpretation was advanced as to the meaning of the words used by Mr Putnam and once again Mr Spens relies on the argument that it had never been put to him that they bore a sinister construction: since

he believed that they were innocent why should he seek with too much protestation to justify his meaning - I am putting a slight gloss on the way Mr Spens puts it.

The company's appeal procedure specified that the appeal should be to the dismissing manager's immediate superior, Mr Salter. Mr Salter was on holiday. Mr Putnam and the shop steward were asked if they had any objection and were offered an adjournment but they agreed to Mr McCann's conducting the appeal. The appeal procedure also provided for a full-time trades union officer to be present at that stage of appeal: none was there but no objection was raised. There is evidence - which we see no reason to think is unreliable - in the record before us that the shop steward had himself been in touch with the full time officer who intimated that he wanted the shop steward to handle the first appeal and proposed himself to be involved only at the next appeal stage.

Following rejection of the appeal no further appeal was, in fact, brought. The ground relied on by Mr Coleman in the first instance and by Mr McCann in rejecting the appeal and sanctioning the dismissal, was the importance of the relationship of trust between the company and its drivers who were not closely supervised and who constituted a key contact with the customers. Accordingly, their view was that conduct of this sort was very serious: it was a serious offence and amounted to gross misconduct.

We come then to the tribunal hearing. There were two principal issues for their consideration: was the dismissal within the band of reasonable responses which a reasonable employer might consider appropriate for what the employee had done and secondly, was there some defect in the appeal procedure which could be relied upon as rendering the dismissal unfair.

On the first of those issues the Chairman differed from the Industrial Members. They considered that Mr Putnam's remark was open to the interpretation that the goods were put at the top end of the lorry so that Anchor Foods' employees would not be tempted to take them. In effect, the words of Mr Putnam so far from being an invitation, while a "blind eye" was turned to help themselves, were an injunction to leave the goods alone and an assertion by Mr Putnam that he had taken the prudent step in putting them out of sight and, therefore, out of mind of the would be recipients. They further considered that even if it was reasonable for the employers to interpret those words as an indication that if Mr Putnam did not see what happened, he would not be held responsible for the ensuing misappropriation, this fell short of the kind of dishonesty justifying dismissal.

The Chairman's view was that the employers' interpretation was a reasonable one and (on that basis) what Mr Putnam had done amounted to serious misconduct for which immediate and summary dismissal was within the band of reasonable responses.

On the second issue the tribunal unanimously concluded that the respondents carried out reasonable investigations and operated reasonable procedures up to the appeal stage. It was pointed out that Rule 23 required management always to follow company disciplinary procedure as detailed in the Company Union agreement and that there had been two departures, Mr McCann substituting for Mr Salter and there being no positive attempt to procure the presence of a full time union officer. There is some dispute about this but we are satisfied that the proper construction of paragraphs 14 and 15 of the decision is that here again the industrial members differed from the Chairman. They considered:

" ..... the rules are mandatory and that the failure to conform with the appeals procedure coupled with the other procedure matters raised on the applicant's behalf, themselves are sufficient to render the dismissal unfair."

The Chairman's view was that the defects were merely technical and given that no objection was taken at the time, were insufficiently serious to render the dismissal unfair, especially as no further appeal had been pursued.

Again, we should make clear that before us Mr Spens explained, and we now understand the meaning of the notes of his submissions in the Chairman's notes, that before the tribunal he had, in fact, expressly dissociated himself from any intention to rely on the substitution of Mr McCann for Mr Salter since that had taken place by consent. Inferentially, therefore, he, at any rate, was accepting that the rules were not mandatory in the sense that they could, by consent, be dispensed with. He was leaving open the question of the absence of the full time union official contending that the evidence to the effect that he did not wish to attend and that the shop steward and Mr Putnam were content to proceed without him was equivocal; and that the employers should themselves have pointed out the provisions of the appeal procedure agreed with the union and enquired of the appellant and his representative, the shop steward, whether they wished to have a union representative present.

Those are the material facts and the history of the matter and we turn to the submissions made in support of this appeal by Mr Jeans on behalf of the appellants. He begins by drawing our attention to the fact that it had been accepted that there had been a reasonable investigation followed by reasonable procedures up to the appeal stage. He contends, in our judgement correctly, that that is an important feature of this case particularly when it comes to deciding what is the significance of the presence of Mr Coleman at the later stages of the appeal.

He then indicates his basis for attacking the conclusions of the majority on the principal issue. We have summarised those conclusions. They are, in fact, contained in paragraph 12 of the tribunal's reasons where after directing themselves that the main issues are whether the dismissal was within the band of reasonable responses for this conduct and whether the respondents operated a reasonable procedure - particularly in the way the appeal was conducted - they say this:

"12 On the appropriateness of the sanction the industrial members disagree with the Chairman. The industrial members take the view that the remark made by the applicant namely, "What the eye doesn't see the heart doesn't grieve after" was open to the interpretation, as maintained by the applicant, that as the goods were put at the top end of the lorry out of the way, the Anchor Goods employees would not be tempted to take them. The applicant's earlier remark that all the goods were accounted for strengthens their view. Furthermore they consider that even if the respondents were reasonable to take the other interpretation of this remark, namely that if he did not see what happened he would not be held responsible, this fell short of the kind of dishonesty which would justify and immediate dismissal, especially as checking the returns was not part of his job. They further take the view that at the time he made the apparent admission that what he was doing was wrong he was extremely upset and that this was not a considered response."

Mr Jeans first submission is that if one approaches this case in the manner indicated as appropriate in the well known authority of British Home Stores v Burchell [1980] ICR 303, then, plainly, on the Burchell test the requirements are here fulfilled. It is also plain, he submits, that it is not relevant whether the tribunal would themselves have shared the view the employer formed of the evidence nor is it relevant for the tribunal to examine the quality of the material that the employers had before them to see if it was open to doubt.

The employers were entitled, he submits, to reach the conclusion that the words uttered by Mr Putnam, in the particular circumstances in which they were uttered, bore the meaning that the employers plainly attached to them. It is worth pointing out that that meaning was not, as the majority of the tribunal expressed it in the latter part of paragraph 12, that if he did not see what happened he would not be held responsible but rather, as one can deduce from the notes of the proceedings, that he had, at the very least, encouraged someone else to take the articles in question. Mr Jeans submission, which he developed with citation of appropriate authority, was really a very simple one. He contended that it was plainly for the employers to reach a conclusion as to the meaning of those words: it was reasonable for them to conclude that they bore the meaning which, if we may say so, they self-evidently appear to us to bear and to conclude that what Mr Putnam was doing was saying that if the goods disappeared while his back was turned it would be all right with him.

Mr Spens, who has not shrunk from seeking to defend the decision of the tribunal, felt constrained to accept that that criticism was substantially justified. He said this as I recorded his argument on the first part of paragraph 12:

"I say that the company having made the enquiries was entitled to come to its own conclusion as to the sanction to be applied on the basis of an interpretation along its own lines."

Accordingly, he was, in effect, accepting that it was illegitimate for the majority of the tribunal to substitute their own views as to the possible meaning of the phrase used by the respondent for that which the employers plainly held after reasonable enquiries. In the circumstances, we need not look in detail at those aspects of the evidence which afford support for the employers' view. Not the least of them was the fact that they had an account from the employees at Anchor, admittedly a somewhat different account but an account which involved that Mr Putnam had given these goods to them.

Mr Jeans then turns to the second basis of the majority's conclusion namely, that even on the employers' construction of the relevant words this conduct fell short of the kind of dishonesty which would justify an immediate dismissal, especially as checking the returns was not part of Mr Putnam's job. Again, Mr Jeans deployed a detailed argument but what it came to in a sentence was this: that in reaching that conclusion the majority members of the industrial tribunal were guilty of one of two transgressions; either they were substituting their own view for that of the employers or they were reaching a conclusion which no reasonable tribunal properly directing itself on the law and the facts could reach.

We have to say that despite valiant arguments by Mr Spens to the contrary, we unhesitatingly conclude that those submissions are correct.

Mr Spens argues that the question whether the response of dismissal was within the reasonable band of reasonable responses by a reasonable employer is a matter of fact and degree and the finding that it is not is essentially a finding of fact by which we are bound, unless it is perverse. He submits in effect, that we cannot differ from the industrial tribunal unless we are satisfied that their finding is perverse. If that is the correct approach, we, with regret but without any doubt have reached the conclusion that it was a perverse finding. The words "the kind of dishonesty" appear to us to support that view very strongly; indeed, Mr Spens was constrained to argue that that formulation imported that the majority members were finding that the conduct was not dishonest but was something else. We cannot accept that submission.

He invited us to approach the matter on the basis that when it came to penalty the employers, while holding to their own interpretation of the words used should have made some sort of allowance for the possible alternative interpretation advanced by, or on behalf of Mr Putnam. We fail to see how that can be. On the basis of this hypothesis, what had to be considered was the state of mind of the employers. That state of mind was that Mr Putnam had used words which were, in effect, an invitation to those at Anchor to help themselves to the goods. That was plainly dishonest. We cannot conceive how it could be said that - given that he was a responsible driver in a position of trust, often working alone, carrying goods to a very considerable value, a point of contact between his employers and their customers - dishonesty of that sort was not such that dismissal fell within the band of reasonable responses.

We would, therefore, uphold the attack on that finding advanced by the appellants on either or both of two grounds. Plainly, in our judgement, this is an example of the industrial tribunal substituting their own views for those of the employers. Furthermore, and to the extent that it is a different test, as we have already indicated we have concluded that no reasonable tribunal properly directing themselves on the facts of this case could have concluded that it was not within the band of reasonable responses to dismiss.

The arguments on these two points ranged over a number of authorities and were elaborated but we have dealt, we hope, with the principal thrust of the contentions on each side and expressed our conclusions and we are left with the matter of the appeal procedure. We address first of all, the two matters which, as we have said, we are satisfied that the majority members principally relied upon. The first was the substitution of Mr Salter by Mr McCann. That was not relied upon on behalf of Mr Putnam and the industrial tribunal were, therefore, wrong to regard it as a procedural irregularity and their decision on that score cannot be supported.

It is, indeed, as Mr Jeans pointed out, a point which undermines the validity of the conclusion because they were taking into account and giving weight to a factor on the procedural side which was not advanced on behalf of the appellant and plainly could not properly be advanced.

Then there is the matter of the absence of a full time union official. Accepting, as we do, that there was evidence before the tribunal, which they certainly did not reject, that the union official had indicated that he had no wish to be there but would attend at the next stage, we cannot accept that there was what can properly be called a procedural irregularity. Furthermore, if there was a technical irregularity it was not one of any moment on the particular facts of this case and given the circumstances that we have described.

That leaves what the majority members encapsulated in the words "other procedure matters" and they must plainly have been referring, and we credit them with referring, to the presence of Mr Coleman alone with Mr McCann in the interval between the conclusion of the appeal hearing and the intimation by Mr McCann of his decision.

That, plainly, was an irregularity. It only has to be stated to be appreciated that for the employers' representative, who had conducted the original disciplinary hearing which resulted in the decision to dismiss, to remain alone in the room with the person conducting the appellate procedure is something which should not occur. It offends against natural justice and all notions of proper procedure. Therefore, the question arises as to what consequences flow from that conclusion.

We should like to mention two authorities on which Mr Jeans relied in this context. The first is the case of Post Office v Marney [1990) IRLR 170 - it is unnecessary to refer to the facts and we content ourselves with citing two paragraphs from the Judgment of this Court delivered by Knox J, they are paragraphs 22 and 23 where he said this:

"It does not follow from any of those passages that any and every breach of an applicant's contractual rights of appeal necessarily renders the decision to dismiss and its upholding on the appellate process unfair. That was specifically found to be the case in Whitbread & Co plc v Mills [1988] IRLR 501 and Mr Main-Thompson on Mr Marney's behalf rightly did not seek to persuade us to the contrary. At paragraph 54, Mr Justice Wood, in that case, said:

"It would follow therefore that not every formality of legal or quasi-legal process is required during the disciplinary and appeal procedures. Each set of circumstances must be examined to see whether the act or omission has brought about an unfair hearing."

So far we have been approaching the Industrial Tribunal's reason that the denial of Mr Marney's contractual right of appeal resulted in the dismissal being unfair. In our judgment that, by itself is an over-simplification. It is not every denial of a contractual right that has that result. It is, in our judgment, only when the circumstances warrant that conclusion, and in this type of case of a defective appellate stage there has to be a circumstance that renders the appellate process defective in the sense that it should or could have found and demonstrated a flaw in the decision at first instance in the internal procedures of the employer."

Mr Jeans also referred us to the decision in Rowe v Radio Rentals [1982] IRLR 177. Again, we need not cite the facts, although we emphasise that they are admittedly very different from the facts in the present case, but we cite paragraph 14. There Browne-Wilkinson J (as he then was) said:

"On the facts of this case, the majority of the Industrial Tribunal have come to the conclusion that the appeals procedure was proper and that justice was done. In those circumstances, it would be wrong for us to say that the rules of natural justice had been breached simply because justice might not appear to have been done. In the context of these internal appeals from one man in line management to another, it must be difficult to show that rules of natural justice have been infringed if the person hearing the appeal in fact took the decision, the employee having been given the opportunity to deal with the case against him and having been heard."

We emphasise that those words of Browne-Wilkinson J were apropos facts different from the present and that on the face of it the presence of someone in Mr Coleman's position, in the circumstances in which he was present, is regrettable and is certainly to be deprecated. We ask ourselves in the present case whether in the light of what we have decided on the principal issues, what occurred at the hearing of the appeal before McCann could on its own, and in the particular circumstances of this case, properly lead to a finding of unfair dismissal.

In seeking to answer that question we bear in mind the following factors. First, no criticism is made of the disciplinary hearing before Mr Coleman which led to the dismissal -no criticism in procedural terms. Secondly, this matter apart, no sustainable criticism is made of the appeal procedure itself. Thirdly, as we consider we can infer, the industrial tribunal who investigated the question and heard evidence as to what occurred when Mr Coleman remained in the room must have been satisfied that no disadvantage actually accrued to the appellant from anything that passed during that period and that the decision on the appeal was that of Mr McCann himself. Fourthly, it follows that what occurred in no way impaired or diminished Mr Putnam's opportunity to have his case fully and carefully considered on appeal. Fifthly, as appears from the language which they used, the majority of the industrial tribunal obviously accorded only marginal importance to this matter which they categorise in the words "other procedure matters" without any elaboration.

In the light of those factors and bearing in mind the assistance we get from the two authorities which we have cited, the conclusion which we have clearly reached is that in this case no purpose would be served by remitting the matter for reconsideration since it could not properly be held that that episode alone constituted or could constitute the dismissal of Mr Putnam unfair. We emphasise again, in case it is not clear, that nothing we have said should be interpreted as in any way approving of what took place. We have explained that it is unfortunate and should not have occurred.

In the upshot, the conclusion that we reach is essentially that the Chairman was correct and the majority members were incorrect insofar as they held that it was inappropriate to dismiss because the remarks made to Mr Sandell were open to the interpretation advanced to the appellant. They were substituting their own views for those of those of the employers - their own views on the evidence - and plainly it was open to the employers to reach the conclusion they did reach. Insofar as the Tribunal held that, even on the employers' interpretation, dismissal was not an appropriate response they were substituting their own views and/or reaching a conclusion that no reasonable tribunal could have reached. Insofar as there were, as there were, some procedural irregularities in the hearing of the appeal procedure, those did not in any way render Mr Putnam's dismissal unfair.

We have, therefore, concluded that this appeal should be allowed and that this is not a case in which, all the facts being known, there is any purpose in remitting the matter to the industrial tribunal. The effect of our Order is that the claim for unfair dismissal will be dismissed.