United Kingdom Employment Appeal Tribunal

BAILII case number: [1993] UKEAT 655_93_0302

Appeal No. EAT/655/93

I N T E R N A L

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 3 February 1993

Before

THE HONOURABLE JUSTICE MUMMERY (P)

MRS T MARSLAND

MR T THOMAS CBE

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MR R G DUNN          APPELLANT

TEXAS HOMECARE LIMITED          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


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APPEARANCES

For the Appellant THE APPELLANT IN PERSON


 


MR JUSTICE MUMMERY (PRESIDENT): This is an appeal from the decision of the Industrial Tribunal held at Reading over four days in March, April and May 1993.

For the reasons stated in the decisions, notified to the parties on 1 July, the Tribunal unanimously held that Mr Dunn had been fairly dismissed by Texas Homecare Limited.

The background to the decision is that Mr Dunn was employed from May 1981 until 13 March 1992 by Texas Homecare, first as a general store manager and then as a furniture consultant. He was dismissed from his employment at the Reading branch on 13 March 1992 for alleged misconduct.

The Tribunal heard evidence from four witnesses called by Mr Dunn and from a number of witnesses called by Texas Homecare. They made findings of fact, summarized in the decision and from which there is no appeal to this Tribunal. This Tribunal's powers are confined to appeals on questions of law.

The Tribunal found that Texas Homecare Limited owns a number of furniture stores in the United Kingdom. One of the stores is at Reading. Within the furniture department, the customer would have contact with two members of staff, one a sales person, called a lead-taker, and a consultant. The lead-taker is the in-store sales person who takes orders from the customers and assists customers in the stores. They encourage home visits from the consultant when customers need advice, but they would complete sales themselves. The consultant's role was to service the customer's request, visit homes and receive payment. Either or both would be entitled to commission on sales made or contemplated. The commission paid to the lead-taker was 1% on all sales completed by the lead-taker over £250. If, however, the lead-taker was not capable of taking a customer's order, because he did not have the technical skills required, then he would assign the lead or potential sale to a consultant, who would claim commission on a varying scale if the sale was completed. In this event, the lead-taker would receive £5 for booking the lead sale. If the lead was converted into a sale, he would receive a further £5, but no commission was paid on converted sales. Each lead-taker and consultant was allocated a password number to give access to the computer. This number cannot be divulged to other member of staff. Misuse of company systems arising out of the number being divulged could be deemed to be gross misconduct. The commission rules were incorporated into the terms and conditions of employment, as were the procedures to be followed. They included provision that falsifying of orders or leads would be construed as gross misconduct, as would seeking to learn the password of any other employee or divulging one's own to another employee. The terms and conditions, including amendments, were signed by Mr Dunn.

There were disciplinary procedures, which covered such matters as dismissal without notice in circumstances which were deemed to be gross misconduct.

The crucial facts which gave rise to the events leading to Mr Dunn's dismissal are summarized in paragraph 9. I will read it in full:

"On 3 February 1992 Peter Welch, an in-store sales person (lead taker) at the company's Reading store, made a complaint to Mr Glynn Buckland, the General Manager of the Reading store that the applicant had claimed commission on one of his sales and that he, the applicant, had no input. He stated that on 21 January 1992 a customer named Mrs Darlow purchased kitchen units at the cost of £1,138.21. He spent some time advising Mrs Darlow who was satisfied with the arrangements made and no other member of staff was or needed to be involved. Mr Welch accordingly expected to receive commission of 1%, namely, £11.38, the sale having been assigned to him. He later checked all leads that had been assigned to him and in particular the sales that had been completed. He noticed that the Darlow sale was shown as F, ie. failed and meaning that the sale had never been completed. Subsequent enquiries showed that the applicant had accessed the computer, failed Mr Welch's lead and re-assigned it to himself and also converted it, which meant that he received the commission on the sale amounting to £57. Mr Welch received nothing."

That is a crucial account of facts relevant to the subsequent steps taken by the employers. As a result of the complaint made by Mr Welch an investigation was instituted. It was put to Mr Dunn during the investigation that he had obtained £57 on the Darlow order to which he was not entitled. Mr Dunn was insistent that there was an agreement, which entitled him to commission if he checked the order for mistakes. Mr Dunn was then suspended. There were further investigations which involved taking statements from other members of the staff.

The Tribunal gives an account of the disciplinary hearings which took place and of the enquiries made by the employers. The Tribunal, at paragraph 13 of its decision, stated that:

"... on the balance of probabilities, [it found] that there was an existing agreement whereby [Mr Dunn] could claim commission on the commissionable sales which justified more investigation than that undertaken by Mr Freegard. Mr Buckland in his statement prepared for the disciplinary meeting stated that in May 1991 he received a complaint from Mr Welch that the applicant had been paid commission on one of his sales although he had not done any work on it. Mr Buckland then interviewed [Mr Dunn] who said that he had an arrangement with the previous Manager, Mr McMahon whereby he would check orders and then receive the commission, the lead-taker getting the payment for the lead and [commission] if made. Mr Buckland told the applicant that as far as Peter Welch was concerned this arrangement was at an end but if he wished to come to a private arrangement with the lead-taker in order to continue the arrangement, he would have to discuss it with them."

Further accounts are given in the decision about the evidence obtained in statements and about Mr Dunn's appeal to the divisional controller against the decision made against him. In paragraph 15 details are contained of a further appeal to the operations director and the hearing which took place. The appeals were unsuccessful.

The Tribunal had to consider in the circumstances, whether Mr Dunn's conduct was such that the employers were entitled to dismiss him and whether they had fairly dismissed him. Although the Tribunal do not state in their decision what are the relevant principles, they are well settled by decisions of the Courts, the best known being British Home Stores Ltd v Burchell [1980] ICR 303, which states that in cases alleged misconduct, the relevant test of whether a dismissal is fair or not, is this: the employer must establish that he believed that there had been misconduct by the employee; the employer must, secondly, establish that he had reasonable grounds for believing that there had been misconduct; and, thirdly, the employer must show that he investigated the matter to such extent as was reasonable in all the circumstances of the case. If the employer demonstrates those three things, it will be held to be a fair dismissal.

The crucial part of the Tribunal's decision is in paragraph 16 where the Tribunal states that they had to decide whether in all the circumstances the employers had acted reasonably That is against the background of the three points mentioned.

They stated, and Mr Dunn emphasized this in his submissions to us, that the key question to be considered was whether or not there was an agreement or arrangement of the kind that Mr Dunn had argued for. Such an agreement was contrary to the company's rules and a breach on its own would justify summary dismissal, as it was at the expense of both the indoor sales staff and the Respondent company. But if the agreement in breach of the rules was condoned by management, options other than summary dismissal would have to be considered. There was evidence - and this was an important point made by the Tribunal - before Mr Freegard, who made the investigation, that Mr Dunn had failed the lead taken by Mr Welch in respect of Mrs Darlow's order and reassigned it to himself, thus claiming enhanced commission and denying Mr Welch all commission. The Tribunal commented:

"This could not properly be the basis of any fair agreement and does not come within the terms of the agreement the applicant stated was in existence and on its own provides ample evidence that justification for Mr Freegard's decision to dismiss the applicant. Mr Freegard, however, was satisfied that the other orders assigned to the applicant amounted to fraud justifying ... dismissal. [On those matters] the Tribunal finds that in respect of those assigned orders ... the decision to dismiss summarily could not be justified having regard to the possible existence of an arrangement which was condoned by management and ... in existence at other stores."

The important point to note in that paragraph which refers back to the earlier statement of facts regarding Mr Welch's complaint, is that the Tribunal came to the conclusion that, on the evidence relating to Mr Welch's case alone, the employers were entitled to regard this as a case of misconduct, which would justify dismissal. This is clear from paragraph 17, where the Tribunal state that the people responsible for considering the dismissal, both instantly and on appeal:

"had evidence that the lead failed to Mr Welch and was assigned to the applicant. The conduct of the applicant had clearly breached the employer's trust and confidence. He [Mr Dunn] enriched himself both at the expense of the respondent company and subordinate employees ... and taking all the circumstances into consideration"

the Tribunal finds that he was not unfairly dismissed.

Mr Dunn was dissatisfied with that decision. On 9 August he issued a notice of appeal. His main ground of appeal was that it was wrong of the Tribunal to come to a decision that he had been fairly dismissed. In his grounds and in his oral arguments made to us in person, Mr Dunn concentrated on paragraph 16 of the decision and the statements made by the Tribunal in relation to condonment by management of agreements made in breach of the rules. He says further that:

"There was no evidence to support the finding of fact [that] in the case of Mrs Darlows order, ... Mr Welch would not receive not received any commission."

He goes on to make further submissions in relation to the facts of Mr Welch's complaint.

These arguments cannot be submitted on this appeal, because they are not arguments based on any error or question of law. They are arguments disputing facts of the case. It may be an unfortunate feature of this case that a crucial witness, Mr Welch, did not give evidence. He was not called to give evidence by Mr Dunn. We understand from him that he had received legal advice in relation to that matter. That is a matter we are not entitled to go into. It appears from the records of the hearing that Mr Welch was not called to give evidence for the employers.

The position, as far as this Tribunal is concerned, is that facts concerning Mr Welch in respect of the Mrs Darlow order, are stated as found in paragraph 9 and form the crux of the decision that the dismissal was fair. These facts cannot be reopened now. There is therefore, on this appeal, no question of law which is arguable at a full hearing of this Tribunal.

Mr Dunn made a further point, which has no substance. He said that there was an error of law on the part of the Tribunal in relation to the failure of the employers to provide him with written reasons for his dismissal. On that point the Tribunal in fact found in paragraph 17 of the decision that he was supplied with written reasons. It may be that he was supplied later than the 14 days after the request, but he was supplied with them. The fact that they were late in being supplied has no bearing on whether his dismissal was fair or not. This appeal against the decision of fair dismissal cannot be pursued by Mr Dunn to a full hearing because there is no error of law. He has no prospect of succeeding. The appeal will be dismissed at this stage.