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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Byrne v B O C Ltd [1992] UKEAT 231_90_2503 (25 March 1992)
URL: http://www.bailii.org/uk/cases/UKEAT/1992/231_90_2503.html
Cite as: [1992] UKEAT 231_90_2503, [1992] IRLR 505
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At the Tribunal
Judgment delivered 16 June 1992
Before
THE HONOURABLE MR JUSTICE KNOX
MRS M E SUNDERLAND JP
MR G H WRIGHT MBE
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellant MISS H HOBHOUSE
Free Representation Unit
13 Grays Inn Square
London WC1R 5JP
For the Respondents MISS A KOEKKOEK
(LEGAL ADVISER)
The Priestley Centre
10 Priestley Road
The Surrey Research Park
Guildford
Surrey GU2 5XY
MR JUSTICE KNOX: Mrs Byrne, the Appellant before us, was employed by BOC Ltd as a full-time employee from April 1985 until she was summarily dismissed on 25 September 1989. She presented an Originating Application on 14 November 1989 complaining of racial discrimination and unfair dismissal. Both were unanimously dismissed by the Industrial Tribunal sitting at London (South) on the 6th, 7th and 8th February 1990, the decision being sent to the parties on the 14th March 1990. Mrs Byrne appeals to this Tribunal only on the unfair dismissal claim. We need not therefore deal with the racial discrimination claim.
Mrs Byrne worked in the Pensions Department of BOC's head office. At the material time in the summer of 1989, she was one of four persons including a Miss Butterfield reporting to a Systems Officer, Mr Plater, who in turn reported to Mr Pratt, Assistant Pensions Manager, to whom there also reported a Miss McIntyre, a Pensions Officer. Above Mr Pratt in the hierarchy came Mr Pegg, who was the Pensions Manager and thereby head of the Pensions Department. This Department was a relatively small part of a very substantial commercial organisation with a Personnel Department. Above Mr Pegg was a Mr Page, who does not figure in the history of this matter.
Members of the Pensions Department of Mrs Byrne's grade were required to enter the hours which they worked on weekly time sheets specifying the time at which they came in in the morning, the times of the start and finish of their lunch break and the time they left in the evening. The time sheets had a column in which there was to be entered the amount of time worked in each day more or less than the normal 7 hours 30 minutes. On a five day week the normal hours totalled 37 hours 30 minutes. These time sheets were collected on Mondays by Mr Plater, who filed them but Mrs Byrne kept copies of hers.
At the end of the month Mrs Byrne and other employees of her grade filled in a monthly overtime authorisation form specifying the amount and time of overtime worked each day and the rate at which overtime pay was claimed. This varied from double time on Sundays, through time and a half for most other times down to basic time for normal working hours.
The whole process of filling in weekly time sheets and monthly overtime authorisation forms was unsupervised and staff were trusted to fill them in truthfully. Mr Plater collected the monthly forms each month, looked at them, passed them to Miss McIntyre who transmitted them to Mr Pratt and also gave a copy to each member of staff of his or her form. Mr Pratt countersigned the monthly forms which were thereby authorised for payment and passed to Personnel. No check was normally made of the monthly forms against the weekly time sheets.
Mrs Byrne was away from the 14 August until 25 September 1989 except for two days, 21 and 22 August. Most of her absence was due to her mother's death in Ghana on or about 13th August 1989 but some was due to her own sickness.
The Industrial Tribunal found that Mr Plater got the impression during July that Mrs Byrne was claiming for more overtime than she was working and that he checked her overtime authorisation form for June against the weekly time sheets for the same period. The identification of June is clearly a slip by the Industrial Tribunal for July. We say this for two reasons. First, it is stated by the Industrial Tribunal that she claimed 15 hours overtime whereas Mr Plater found her time sheets only showed 10 hours 45 minutes. The monthly forms were in evidence and those figures match the overtime claimed on the July form but not that claimed in June, where the total claimed was 16 hours. Secondly, the Industrial Tribunal found that Mr Plater showed the documents to Mr Pratt and they together consulted Mr Pegg who instructed Mr Plater to make similar checks for May and June. This is obviously consistent with the original check having been over July and not June. More significant than this relatively trivial slip, is the fact that Mr Pegg was consulted at this early stage and that Mr Plater's further investigations at Mr Pegg's direction resulted in his concluding that 2 hours more overtime had been claimed than Mrs Byrne had worked in each of those two months May and June. On Mr Plater's view there was an aggregate overclaim of 8 hours 15 minutes. Similar checks by Mr Plater of other staff's overtime claims resulted in his finding no discrepancy resulting in an overclaim in respect of any of them. Although Mr Plater had completed his checks before Mrs Byrne's brief reappearance at work on 21st and 22nd August he did not mention the matter to her then.
There then ensued two further matters in which Mr Pegg was personally involved. The Industrial Tribunal stated in their decision that in early September he rechecked Mr Plater's work of comparing the weekly time sheets for May, June and July against the monthly overtime authorisation forms and while he too found a 2 hours overclaim in June he differed from Mr Plater on the other two months, finding an overclaim of 3 hours 45 minutes, and not 2 hours, for May and 3 hours 45 minutes, instead of 4 hours 15 minutes for July. The second matter which did not find its way into the Industrial Tribunal's findings but is recorded in the Chairman's Notes of Evidence is this. Both Mr Pratt and Mr Pegg gave evidence that after other employees' forms were checked and no overclaims found they went to consult Mrs Sue Wilson in the Personnel Department for guidance. Mr Pegg said that was a brief interview. They also both consulted a Mr Ed. Dakin Employee Relations Manager for BOC who had previously been Regional Personnel Manager. Mr Pegg told Mr Dakin of Mrs Byrne's overtime discrepancies. Mr Dakin said that in the regions this would be very serious and he advised a disciplinary hearing. In the regions, he said, the penalty would be instant dismissal. Mr Pegg's further evidence is recorded as follows:
"I discussed how to handle situation. Clear to me if discrepancy is established, applicant would have to be dismissed. We could not do something different in head office from regions. I decided disciplinary hearing should be on 25 September. Dakin said hear it as soon as possible. I had concern about facing applicant with this on day applicant came back from extended leave. It was said to me no option but to deal with it then .... I was advised proper person to deal with it was Pratt, her manager."
In line with that advice to and decision by Mr Pegg, Mrs Byrne was told at 9.30 am of the morning when she returned from her long absence that there was to be a disciplinary hearing at 10 am that morning. On her arrival at work she had found someone sitting at her usual desk and was told that there had been a reorganisation while she was away and was found another desk. She was told at 9.30 am that discrepancies had been found between her weekly time sheets and monthly overtime authorisation forms but that was all. She was told she could if she wished be accompanied by a colleague. The disciplinary hearing was held at 10 am in the presence of Mr Pratt and Mrs Wilson. It only lasted 15 minutes. Mrs Byrne was told by Mr Pratt that she had overclaimed 9 hours 30 minutes overtime. That was Mr Pegg's calculation rather than Mr Plater's. Mr Pratt did not offer to show the relevant documents nor did she ask for them. She offered no explanation but said she was sorry if there were mistakes and offered to repay. After discussing the matter with Mrs Wilson Mr Pratt called Mrs Byrne back and told her she was dismissed and that she had a right to appeal to Mr Pegg.
Of that disciplinary hearing the Industrial Tribunal said that the undue haste with which it was held and the failure to inform Mrs Byrne in advance that she was accused of an offence involving fraud or dishonesty were serious procedural shortcomings and if there had been no appeal from Mr Pratt's decision there would have been an unfair dismissal. We find ourselves in complete agreement with that view. There was a cross-appeal before us by BOC on the ground that this finding did not accord with evidence or with the findings of fact that we have set out above regarding what Mrs Byrne was told at 9.30 am. The fact, if it was one, that Mr Pratt's hearing was in accordance with advice received from BOC's personnel department does not convert an unfair proceeding into a fair one. We are wholly unpersuaded that any error of law is shown on that score and the cross-appeal will be dismissed.
The appeal was heard by Mr Pegg on 27 September 1989 and this is the subject of the appeal by Mrs Byrne which raises far more difficult problems than does the cross-appeal. Those present besides Mr Pegg and Mrs Byrne were Mr Pratt and Mrs Wilson. Mrs Byrne was again offered the opportunity of having a colleague but declined. On this occasion besides saying that the discrepancies were accidental Mrs Byrne said that she would have expected the figures to be checked. Mr Pratt said that he did not check the forms. Mr Pegg sent for Mr Plater, who came at 10.20 rather than the 11.20 as stated in the Industrial Tribunal decision, and also said he did not check the forms. The Industrial Tribunal found that he said he passed the forms to Mr Pratt which is in conflict with their earlier finding that he passed them to Miss McIntyre who passed them to Mr Pratt but these minor discrepancies do not much signify.
Mrs Byrne also advanced as an explanation for the discrepancies in three consecutive months the fact that she had been under pressure in May because her colleague Miss Butterfield was away. Mr Pratt said that there had been no adverse comments on Mrs Byrne's accuracy in her work during May and that other members of the Pensions Department rounded down their hours of work rather than up in their overtime claims.
There was then an hour's adjournment while Mr Pegg spoke to Mrs Wilson who kept the notes of the hearing before Mr Pratt, reviewed Mrs Byrne's personal file and checked Miss Butterfield's absence record for May. When the appeal was resumed Mr Pegg put to Mrs Byrne what he understood to be the two points upon which she relied, namely pressure of work and an expectation that her forms would be checked, to which Mrs Byrne agreed. Mr Pegg dealt in some detail with these two claims but reached the conclusion that he could see no reason to overturn Mr Pratt's decision to dismiss. Mrs Byrne was told of the right to a further appeal to Mr Page but she did not exercise that right.
The Industrial Tribunal carefully went through the stages implicit in S.57(1) and (3) of the Employment Protection (Consolidation) Act, 1978, ("the Act") and held that the principal reason for the dismissal was the belief of Mr Pratt and Mr Pegg that Mrs Byrne had deliberately falsified her overtime claims, that that was a genuine belief held on reasonable grounds after sufficient investigation and that dismissal was within the band of reasonable responses of a reasonable employer. No appeal was directed at that aspect of the decision.
The subject of the appeal was the Industrial Tribunal's finding that the appeal before Mr Pegg cured the defect identified above in the disciplinary hearing before Mr Pratt. In that connection the Industrial Tribunal said this:
"We have considered whether Mr Pegg's involvement in the proceedings before the disciplinary hearing rendered him unfit to hear the appeal. We have come to the conclusion that it did not do so although it is, in general, better that the person hearing an internal appeal should have had as little prior involvement with the matter as possible. We are satisfied that the appeal before Mr Pegg was fairly conducted and cured the defects of the initial disciplinary hearing."
The appeal before us was ably argued by Miss Hobhouse for Mrs Byrne on two points. The first was that the hearing before Mr Pegg was a review rather than a hearing and that anything short of a full rehearing is inadequate as a matter of law to cure a defective disciplinary hearing leading to a dismissal. The authority relied on for that proposition was WHITBREAD & CO PLC v MILLS [1988] ICR 776. The second point was that Mr Pegg was so closely involved at the earlier stages that an appeal before him, however fairly conducted, was incapable of curing the defects of the disciplinary hearing because of the breach of the rules of natural justice or fairness involved in Mr Pratt conducting the appeal. The leading authority on this aspect is ROWE v RADIO RENTALS [1982] IRLR 177.
Upon the first of these two points Miss Hobhouse referred us to the authorities on the question how far appeals can cure irregularities at first instance reviewed by Wood J in WHITBREAD & CO PLC v MILLS,, supra, namely LEARY v NATIONAL UNION OF VEHICLE BUILDERS [1971] Ch.34 and CALVIN v CARR [1980] AC 574. In our view it is not possible to say that an internal appeal is incapable as a matter of law of curing a procedural defect in an initial disciplinary hearing leading to dismissal. Nor did Miss Hobhouse put her case that high. This follows from the consideration that the jurisdiction being exercised is statutory and is enshrined in S.57 of the Act so that the only absolute rule is to be found in the application of the Parliamentary test in S.57(3) of the Act. That test, which does not need restating, is cast in terms which involve variables according to the particular circumstances, notably the size and administrative resources of the employer's undertaking. In that context it is impossible to assert an absolute rule that an internal appeal cannot cure a procedurally defective disciplinary hearing. Nor do we read Lord Bridge as saying the contrary in WEST MIDLANDS CO-OPERATIVE SOCIETY LTD v TIPTON [1986] ICR 192 when at p.202 he said:
"Both the original and the appellate decision by the employer, in any case where the contract of employment provides for an appeal and the right of appeal is invoked by the employee, are necessary elements in the overall process of terminating the contract of employment."
That was directed at identifying the extent of the dismissal process as embracing the internal appeal and was not directed at any question of a deficiency at the first stage being cured by a fair and comprehensive appellate stage.
The passage principally relied upon by Miss Hobhouse in WHITBREAD & CO PLC v MILLS is to be found at p.795 where Wood J. 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.
If it has, then whether or not an appeal procedure has rectified the situation must depend on the degree of unfairness at the initial hearing. If there is a re-hearing de novo at first instance, the omission may be corrected, but it seems to us that if there is to be a correction by the appeal then such an appeal must be of a comprehensive nature, in essence a re-hearing and not a review."
No doubt the degree of unfairness of an initial disciplinary hearing is indeed likely to have an influence upon the ability of an Industrial Tribunal to find that the overall result of the dismissal process, which includes both stages, is that the dismissal was fair. We doubt whether there could ever be a combination of a somewhat defective initial disciplinary hearing and a somewhat defective appeal which overall amounted to a fair process. That is not the situation here, where as was the case in WHITBREAD & CO PLC v MILLS, the first stage of the disciplinary hearing is seriously flawed. Where that happens it is essential if the appellate process is to be properly treated as establishing fairness overall, for it to be able to stand on its merits as conferring upon the employee all the rights which the contract of employment is intended to protect, notably proper notice of the complaint, and a full opportunity of stating the employee's case. That was not satisfied in WHITBREAD & CO PLC v MILLS because what happened at the appellate stage was that the employee's representative made a series of points as to why the employee should not have been dismissed and all the management did was say they would listen. As Wood J. said at p.795:
"this was not a rehearing in any sense of the word. It was simply a review of what had already occurred with further opportunity to (sic) making representations."
In the case before us on the other hand, Mr Pegg was at pains to ensure that he had understood what was Mrs Byrne's answer to the charge of falsely transferring onto the monthly overtime claims forms the results of her weekly time sheets. Miss Hobhouse relied on the fact that the documents themselves, the monthly and weekly forms, were not gone through before Mr Pegg so that the position was that the prosecution case was not examined or even actively considered at the appeal. There is, it is true, no indication from the notes of evidence that the fact that Mr Plater and Mr Pegg's calculations of the extent to which Mrs Byrne had overclaimed differed was revealed to Mrs Byrne. On the other hand the extent of the difference was not very great and they both showed a substantial amount of inflation in the amount of overtime claimed for on the monthly form as compared with the weekly sheets. Nor is there any suggestion that Mrs Byrne was in any doubt what she was being accused of.
In this Tribunal the issue is whether the Industrial Tribunal made an error of law in its one sentence decision:
"We are satisfied that the appeal hearing before Mr Pegg was fairly conducted and cured the defects of the initial disciplinary hearing."
That was said in the context of Mr Pegg's personal involvement in the proceedings before Mr Pratt's hearing. There is nothing to indicate whether the Industrial Tribunal did or did not regard the appeal before Mr Pegg as amounting in the words of Wood J. to:
"an appeal of a comprehensive nature, in essence a rehearing and not a mere review."
A review, even a mere review, could be fairly conducted and yet be inadequate to make good the deprivation which the employee has suffered by being denied a proper disciplinary hearing at first instance.
Mrs Koekkoek for BOC drew our attention to CLARK v CIVIL AVIATION AUTHORITY IRLR 412 in support of the proposition that the question whether an internal appellate process amounts to a rehearing within WHITBREAD & CO PLC v MILLS, supra, is substantially a question of fact. See page 416, where Wood J. said of that question:
"That in our judgment is substantially a question of fact. This experienced Industrial Tribunal clearly had in mind the problems raised by the situation and clearly had in mind that it needed to satisfy itself that no injustice had in the end been perpetrated on Mrs Clark and that there had been a proper and sufficient hearing and investigation, and that she had every opportunity of presenting her case and making her points. She was in fact accompanied by a friend at that appeal ..."
That conclusion was more easily arrived at in that case than in the one before us in that in CLARK v CIVIL AVIATION AUTHORITY, supra, the Industrial Tribunal plainly did address the question of the adequacy, as well as the fairness of the appellate process. It said in a passage quoted at p.415:
"The appeal was certainly a comprehensive one, which could have been described as a re-hearing had there been an initial hearing and therefore within the guidance given by WHITBREAD & CO PLC v MILLS".
Although the Industrial Tribunal has not considered in terms whether the hearing before Mr Pegg was sufficiently comprehensive, as well as fairly conducted, we are not satisfied that there was a failure to appreciate what was needed. The inadequacies of the initial hearing were identified and there is nothing in the notes of evidence to indicate that those inadequacies were not rectified before Mr Pegg. Nor was any particular defect, apart from Mr Pegg's earlier involvement, to which we address ourselves below, pointed to in the overall process. Mrs Byrne was not alleged either to have been in any doubt what was alleged against her or not to have been given a full opportunity to state her case and have it carefully considered. On balance therefore we consider that, although it is in our view desirable that Industrial Tribunals, which have to deal with the question whether an internal appellate process cures procedural defects in an earlier disciplinary hearing, should in terms deal with the issue whether or not the appellate process is sufficiently comprehensive adequately to cure the deprivation of rights suffered at the disciplinary hearing, nevertheless in this particular case the elliptical approach of the Industrial Tribunal does not cover an error of law.
The second point relied upon by Miss Hobhouse was that Mr Pegg's personal involvement in the earlier stages of the disciplinary process disqualified him from being able to hold a fair appeal. She reminded us of the limitations in applying the rules of natural justice to domestic disciplinary procedures and referred us to ROWE v RADIO RENTALS LTD, supra, where Browne-Wilkinson J. in relation to an argument that the presence at the appeal hearing of the person in the employer organisation who had conducted the disciplinary hearing caused justice not to appear to have been done said this at p.179:
"We approach that submission with a good deal of caution. It is very important that internal appeals procedures run by commercial companies (which usually involve a consideration of the decision to dismiss by one person in line management by his superior) should not be cramped by legal requirements imposing impossible burdens on companies in the conduct of their personnel affairs. There may be some exceptional case (which we cannot now think of) in which the rule that justice must appear to be done might apply to the full extent that it applies to a judicial hearing. But, in general, it is inevitable that those involved in the original dismissal must be in daily contact with their superiors who will be responsible for deciding the appeal: therefore the appearance of total disconnection between the two cannot be achieved. Moreover at the so-called appeal hearing (which in this and many other cases is of a very informal nature) the initial dismisser is very often required to give information as to the facts to the person hearing the appeal. It is therefore obvious that rules about total separation of functions and lack of contact between the appellate court and those involved in the original decision simply cannot be applied in the majority of cases. It seems to us that the correct approach is that indicated by Lord Denning in WARD v BRADFORD CORPORATION [1971] 70 LGR 27 at p.35:
"We must not force these disciplinary bodies to become entrammelled in the nets of legal procedure. So long as they act fairly and justly, their decision should be supported."
Although Mr Pratt who conducted the disciplinary hearing, was present at the appeal hearing before Mr Pegg, it is not on that circumstance that this ground of appeal is based, but rather on Mr Pegg's position which it was submitted by Miss Hobhouse was significantly different from the situation of the person, a Mr West, in ROWE v RADIO RENTALS supra, who heard the domestic appeal. The only involvement of Mr West before he heard the appeal in ROWE v RADIO RENTALS was that he was told by the area manager, a Mr Limebear, that he, Mr Limebear, was going to dismiss the employee, Mr Rowe and that Mr West acknowledged the action and said Mr Rowe should be suspended until the union was informed because a trade union representative was involved. Upon that aspect Browne-Wilkinson J. said at p.179 in a rather less often quoted passage than the one cited above:
"Mr West was nothing more than a person to whom information was given at the time of dismissal. Mr Limebear was not a party to the decision of the appeal although he was present at the hearing. Therefore there can be no question here of anybody having been a judge in their own cause."
It is implicit in that analysis that if it can be said that the person conducting an appeal could properly be regarded as a judge in his own cause the appeal process would be unfair. That would be a case of justice not being done, not merely of justice not appearing to have been done, in relation to which there are the important commercial constraints recognised in the passage first cited from Browne-Wilkinson J's judgment in ROWE v RADIO RENTALS, supra.
In the present case Mr Pegg was undoubtedly far more heavily involved in the investigation and preparation of disciplinary proceedings than was Mr West in ROWE v RADIO RENTALS. Mr Pegg himself verified the critical documentary material that is to say the weekly time sheets and monthly overtime claims forms completed by Mrs Byrne and he came to a somewhat different conclusion regarding the amount of the excess claims made by Mrs Byrne than had Mr Plater who did the original investigation. Moreover it was Mr Pegg's calculation rather than Mr Plater's that was adopted by Mr Pratt when he put the charge to Mrs Byrne. It is impossible to avoid the conclusion that Mr Pegg personally played a significant part in investigating the charge against Mrs Byrne. Secondly, Mr Pegg was personally involved together with Mr Pratt, in consulting the personnel department of BOC to find out what the appropriate procedure and penalty would be. No-one suggests that it was not entirely proper for such consultation to take place because the Pension Department was a small part of the very large organisation which BOC is and happily, had no experience of procedures for dismissal for fraudulently inflated claims. What is submitted is that Mr Pegg's personal involvement both in detailed investigation of the charge against Mrs Byrne before the disciplinary interview and in the decision that there must be a disciplinary interview and in the discussion between Mr Pratt, who was to hold that interview, and Mr Dakin of the Personnel Department as to the appropriate penalty to be imposed, made Mr Pegg a judge in his own cause in the sense that he was closely involved with the preparation of the charge and consideration of the penalty.
Mrs Koekkoek submitted to us that it would only be where the person hearing the appeal , in this case Mr Pegg, was personally involved in the events that led to the dismissal or where he was involved in the decision to dismiss that there should be a disqualification and that mere involvement in the investigation or as she put it in argument doing his homework did not disqualify him. We are unable to accept that submission for it seems to us entirely possible that a person who investigates an alleged disciplinary breach may well become so involved in the matter that it realistically becomes his cause so as to disentitle him from being a person who can conduct a fair appeal from a decision at the disciplinary hearing in which he plays no part.
The question for us, and it is not an easy one, is whether in this case the Industrial Tribunal made an error in law in their consideration of this point and their conclusion that Mr Pegg's involvement did not render him unfit to hear the appeal.
In the view of the industrial members, the Industrial Tribunal's decision on this part is fatally flawed in that no regard was had to the part that Mr Pegg played in deciding that disciplinary proceedings should be brought and what the appropriate penalty should be. They assume in favour of the decision on this point that regard was had to the fact that Mr Pegg personally did the calculations which were used in advancing the charges against Mrs Byrne although that circumstance seems to them difficult to reconcile with the view that Mr Pegg was not thereby disqualified from fairly conducting an appeal. The majority accepts that that aspect is a matter of judgement for the Industrial Tribunal. But when one adds his personal involvement in the decision to bring charges and the appropriate penalty, neither of which is mentioned anywhere in the Decision appealed from, the majority considers that the conclusion that Mr Pegg was in reality a judge in his own cause is inescapable.
The minority, Knox J., feels constrained to accept the conclusion that the Industrial Tribunal's view that Mr Pegg's involvement did not render him unfit to hear the appeal cannot be disturbed. He considers that that is a conclusion of fact and degree. The Industrial Tribunal clearly did take into account Mr Pegg's part in re-calculating Mr Plater's work. It is less clear that it had regard to Mr Pegg's joint consultation of Mr Dakin with Mr Pratt as to procedure and appropriate penalty because that is not mentioned in the Decision but the minority is mindful of the dangers of deducing from the failure of an Industrial Tribunal to mention a matter in its decision that it has not taken it into account. His view is therefore that this falls into the category of cases where the Industrial Tribunal's view is one with which, whatever this Tribunal's views may be, we have no power to interfere.
In the circumstances the appeal will be allowed and, since on the view taken by the majority the only possible conclusion is that there was an unfair dismissal not cured by the appellate process, that will be substituted as the decision of this Tribunal and the matter will be remitted on all questions of quantum of award.