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Cite as: [1993] UKEAT 5_92_1801

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BAILII case number: [1993] UKEAT 5_92_1801

Appeal No. EAT/5/92

I N T E R N A L

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 18 January 1993

Before

HIS HONOUR JUDGE J HICKS QC

MR K HACK JP

MR R JACKSON

ORBACOURT LTD T/A PETER LONG & PARTNERS APPELLANTS

MRS A BURNETT-GODFREE RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellants MR P RIDDLE

SOLICITOR

Messrs Morrison & Masters

17/20 Commercial Road

Swindon

WILTS SN1 5NR

For the Respondent MR I MacCABE

(OF COUNSEL)

Messrs Pooley Dale & Co

10-15 Regent Circus

Swindon

WILTS SN1 1PP

JUDGE J HICKS QC: The Applicant, Mrs Anne Burnett-Godfree, who is the Respondent to this appeal, was employed as a manager by the Appellant Company, which carried on the business of an Estate Agents. She worked with one of the three Directors, Mr Gregory. On 22 January 1991 Mr Gregory resigned, and suspicion fell on Mrs Burnett-Godfree by the company, in the person of the remaining Directors, who assumed that there had been some sort of conspiracy between Mr Gregory and Mrs Burnett-Godfree the circumstances being that Mr Gregory, shortly after his resignation, became employed by another firm of Estate Agents who were, no doubt, competitors of the Appellants.

The Industrial Tribunal found those facts and in paragraph 5 of their Reasons deal with what happened. They say:

"We find that the atmosphere between the applicant and the company after Mr Gregory's resignation was extremely strained. They searched for existing contracts in her office and said they could not find them. They found that she had, on 15 January 1991, been discovered in the Swindon office talking to four of her subordinates. They also found that a little later on, on the 18th or 19th she had a social occasion at her house at which some of the subordinates were present. On 19 February 1991 the respondents wrote a letter, via their solicitor, to the applicant which said:-

The Tribunal quoted the letter which referred to allegations that those meetings were in fundamental breach of contract and they continue:

"She was therefore suspended by a solicitors' letter without an investigation. Her car was removed and she was told to go home. The letter invites her to give details of the two meetings and she replied to it at once. In her reply she said that she was somewhat confused by their reference to two meetings as she not sure what meetings were being referred to and she described a meeting on another date. She was clearly, from the wording of her letter, stressed by being suspended in this way."

The Tribunal then go on to say that there was further correspondence and that on 22 March 1991 she was dismissed, the grounds given by the letter of dismissal being:

"first, she gave bonuses to certain members of her staff which was not her business"

The Tribunal found that there was no basis for that allegation. The next ground given was that she held the meetings in question (they were described in the letter of dismissal as a "number of meetings") for the purpose of persuading loyal members of the firm to join a rival organisation. The Tribunal say that they find no evidence of that.

The letter of dismissal concluded:

"It is our opinion that your interest were not, and are not, the same as the interests of this Company. We are satisfied that you have fundamentally breached your Contract, ......"

The Industrial Tribunal then, on the basis of those findings of facts, at the beginning of paragraph 7 of their Reasons have a sentence which quite plainly is their direction to themselves in point of law. They say:

"7. In conduct cases we have to be satisfied that an employer acted upon a reasonable belief that misconduct had taken place and there was evidence upon which a reasonable employer could have come to that conclusion, and that he came to that conclusion after such investigation as was reasonable in all the circumstances. ........."

On the basis of that test, the Tribunal continue by saying:

"Certainly on the first leg we find that the employer did act on the alleged misconduct because there was no other reason for dismissing the applicant. On the second ground we find that the respondents made no proper investigation."

The notice of appeal alleges that the Tribunal did not refer to any of a number of authorities which are alleged to be relevant. It is perfectly true that in their Reasons the Tribunal do not cite any particular authority. It is equally obvious to us that the sentence at the beginning of paragraph 7, which I have read, is a direction based upon and couched in terms of the authority of British Home Stores v Burchell, which Mr Riddle, on behalf of the Appellants, accepts as a relevant and, indeed, the leading authority on this point.

What an Industrial Tribunal dealing with an application on the basis of unfair dismissal has to consider is, in terms of the statute, whether the employer dismissed for one of the statutory grounds (and there is no doubt in this case that the dismissal was for "conduct" which is one of the statutory grounds) and secondly, whether in terms of section 57(3) of the Employment Protection (Consolidation) Act 1978: ".......[in] the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it [in this case "conduct"] as a sufficient reason for dismissing the employee;"

In many cases (and, as we understand it, it is not seriously suggested that this is one of the exceptional cases) that question is helpfully approached on the basis of the formulation in the case of Burchell, which was the one paraphrased and applied by this Tribunal. We are quite satisfied that in asking themselves the question in that way the Tribunal did not in any way err in law and, indeed, it was precisely the correct direction. That, in a sense, is the end of this appeal, because it is conceded rightly, and we think inevitably, by Mr Riddle that there was, in this case, no proper investigation by the employers of the suspicion (or, as the Tribunal put it, the assumption) that the employee had been guilty of misconduct.

It is perfectly true that one of the matters which the Tribunal is required, where appropriate, to take into account by the statute is the size and resources of the employer and if it could be alleged that such investigation as was required in this case was one which the size and resources of the employer could not be reasonably expected to mount, that clearly would be a consideration. However, no such suggestion was, or could have been, made in this case; the only authority related to size which Mr Riddle put before us was not concerned at all with the level of investigation which was, or could have been, mounted. Mr MacCabe, for the Respondent, on that matter has referred us to the case of Henderson v Granville Tours Ltd [1982] IRLR 494, which does have a passage directly on this point under key number 259 in the headnote, which says:

"Though the Employment Protection (Consolidation) Act, as amended, now makes specific reference to the size and administrative resources of the employers' undertaking, that specific reference had no bearing on the issue that the Tribunal had to determine in the present case. The smallness of the undertaking does not afford any excuse or indeed explanation for a failure to carry out a proper investigation into a complaint....."

In our view, the Industrial Tribunal was not required in this case to advert expressly to the statutory provision as to size, because they found on ample evidence not just that there had been some investigation which fell short of what ideally is desirable but that, for all practical purposes, there had been no investigation at all. Therefore size did not enter into that consideration.

Mr Riddle referred us to a number of other authorities but really the point, in our view, is as simple as it could be and the Industrial Tribunal were entitled to find - it was a matter for them once they had given themselves a correct direction as to the law - that there had been no investigation, and there was therefore no error on their part to justify our interfering with their decision. The appeal must therefore be dismissed.

JUDGMENT ON COSTS

JUDGE J HICKS: The successful Respondent applies for costs. The relevant rule is 27 of the Employment Appeal Tribunal Rules, of which paragraph 1 reads:

"(1) Where it appears to the Appeal Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings the Tribunal may order the party at fault to pay any other party the whole or such part as it thinks fit of the costs or expenses incurred by that party in connection with the proceedings."

Mr MacCabe relies on the words "unnecessary" and "vexatious" so far as the proceedings are concerning and on the words "unreasonable conduct in bringing . . . the proceedings." It may well be, although we do not decide the matter on these grounds, that "unnecessary" and "vexatious" refer to rather different circumstances. "Unnecessary" is perhaps particularly appropriate where nothing stood in any event to be gained by the appeal; "vexatious" where perhaps the appeal might unreasonably have deprived the respondent to the appeal of some proper advantage. However, in this case interest in the award has been running throughout, so it may be that that element does not arise.

Whether or not either of those words is appropriate, we are all quite satisfied that there was unreasonable conduct on the part of the Appellant in bringing the appeal. This sort of case is dealt with by the Employment Appeal Tribunal in the case of Redland Roof Tiles Ltd v Eveleigh [1979] IRLR 11. We have not been referred to the original authority but it is summarised at paragraph 308 of section X of Harvey on Industrial Relations and is described in this way:

"appeal brought to a hearing did not succeed, it was a "non-starter because no point of law which had the remotest hope of success could be raised" "

We regard this as being a case which is within that description and we therefore order the Appellants to pay the whole of the costs and expenses incurred by the Respondent in connection with the appeal, and those costs are to be assessed by the Taxing Officer. The parties are, of course, at liberty to come to terms as to the amount, but otherwise there will be a taxation.