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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Focus DIY Ltd v Nicholson [1994] UKEAT 225_94_0912 (9 December 1994)
URL: http://www.bailii.org/uk/cases/UKEAT/1994/225_94_0912.html
Cite as: [1994] UKEAT 225_94_0912, [1994] UKEAT 225_94_912
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- That the employers' reason for dismissal was that Miss Nicholson had smoked cannabis in the presence of subordinates at a company arranged function, damaging her credibility and authority as a manager. They expressly found that the employers' finding that it was cannabis which had been smoked was a reasonable one.
- They then enquired whether the employers had acted fairly in dismissing Miss Nicholson on the strength of those reasons:
At the Tribunal
HIS HONOUR JUDGE H J BYRT QC
MR T S BATHO
MR P M SMITH
JUDGMENT
Revised
APPEARANCES
For the Appellants MR IAN SCOTT
(OF COUNSEL)
Messrs Grindleys
Glebe Court
Stoke-on-Trent
ST4 1ET
For the Respondent MR HUMPHREY FORREST
(SOLICITOR)
Humberside Law Centre
95 Alfred Gelder Street
Hull
HU1 1EP
JUDGE BYRT QC: This appeal is from a decision made by the Industrial Tribunal on 7 January, 1994 when sitting in Hull. It was their unanimous decision that the employee, Miss Nicholson, had been unfairly dismissed by her employers, the Appellants.
The following are the facts, as found by the Tribunal:
Miss Nicholson had been continuously employed by the Appellants for 10 years before she was summarily dismissed on 2 September 1993. She was employed at their Hull branch where there is a manager, a deputy manager who was Miss Nicholson, and 35 other employees.
The Appellants are a substantial sized company with a personnel department, headed by a Mr Winston Leese. They have a disciplinary code and grievance procedure, published in 1991. The Company, or rather its Hull Branch, has a Staff Fund Social Club. This offers its members certain facilities such as tea and coffee at work. It also, from time to time, lays on outside social functions, limited to company staff and their relations. No trade guests are invited to such functions. They are occasions when the participants "let down their hair". Unhappily, as the Tribunal found, the party had sometimes become disorderly. For instance, the club has been banned by Maxims in Hull from having their functions on their premises.
On 14 August 1993, the club laid on one of their social evenings at the Waterfront Hotel, Hull. The event was booked in the Company's name and funded partly by the Company and partly by the members themselves. The hotel has a restaurant and a night club. The party consisted of approximately 20 members of staff and their guests, and were accommodated at two long tables behind a screen in the restaurant. Several junior members of staff attended. The most senior member was Miss Nicholson. She sat with two other members of staff, a Miss Samantha Byrne and a Sarah Jude. Another staff member at the party was Miss Patricia Barley, a company cashier.
On 16 August 1993, the branch was visited by the regional operations manager, a Mr Elkins. He was talking to Miss Barley, and asked her how the recent social evening had gone. She told him that she had been approached by one of the staff at the party, a Miss Gail Clayton, who said she had been disgusted to see Miss Nicholson, Miss Byrne and Miss Jude smoking drugs during the evening.
Mr Elkins took that report seriously and instructed the regional security investigator, a Mr Clarke, to make enquiries. The latter took statements from Miss Clayton, Miss Barley, and a Miss Coult. They detailed what they saw. Excerpts from those statements are set out as part of the Tribunal's account of events.
Having taken those statements, Mr Clarke enquired of the Police whether they wished to take over the investigation. They said they did not wish to do so.
Armed with those statements, Mr Clarke interviewed Miss Nicholson in the presence of Mr Elkins. That was on 31 August. He asked Miss Nicholson whether she and two other members of staff had smoked a controlled substance at the party. She replied: "I don't lie. Yes. I did". He enquired whether she was aware of any similar instances in the store. She said - "No".
Following her admission, Mr Elkins suspended Miss Nicholson, pending a disciplinary hearing. Next day, he sent her a letter confirming the gist of the interview and informing her of her rights at the disciplinary hearing. The hearing took place on 2 September. The proceedings were conducted by Mr Elkins. Mr Clarke was in attendance; so was Mr Leese, the personnel manager, in an advisory capacity. Miss Nicholson did not avail herself of her right to be represented. Her Originating Application suggests that it was difficult for her to obtain representation in the two days available to her, following the enquiry on 31 August. We can understand how this might well have been the case. The proceedings commenced. The above mentioned statements were read out and Miss Nicholson was asked whether she had anything to say. She replied "Not at this stage".
The gravamen of the charge was put to her. She was reminded that the function had been booked in the Company's name, and that, though it was a social event, she was still the management, representing the Company. Miss Nicholson replied that she could not tell people what to do at a social function. When asked why she did nothing to stop her friends' criminal activity, she said she did not think at the time that the activity was illegal. She had had quite a few drinks. Further, she said she did not see that she had put her employers' good name in jeopardy.
After a 15 minute adjournment, Mr Elkins came back into the hearing, summed up the case against Miss Nicholson and told her that she was summarily dismissed. She was informed she had a right of appeal. She said she would appeal.
The appeal was heard on 24 September. This was conducted by a Mr McDougal, the operations director. Miss Nicholson was represented by a solicitor. The record of the first interview and of the disciplinary hearing which followed, was read. Then Miss Nicholson gave evidence. She said she did smoke something but did not know what it was. Sarah Byrne had found something in her bag, had pushed it into a cigarette and lit it up. She, Miss Nicholson, commented that they had all had a drink and were out to enjoy themselves.
Misses Coult, Barley and Clayton then gave evidence and answered questions from management and Miss Nicholson's representative.
There followed a half-hour adjournment. On management's return, Miss Nicholson was asked why, at the first hearing, she had not challenged the fact that the substance she had smoked was cannabis. She replied that, at that hearing, she did not know it was not cannabis. She had not lied. She had thought that it was.
Mr McDougal then gave his decision on the appeal. He referred to the fact that she had admitted joining in the commission of this criminal offence of smoking what he believed it was reasonable to assume was cannabis. He stressed the seriousness of her offence and the fact that it had been committed in front of the staff members who looked up to her as management. He stated that she had put the good name of the Company at risk, had caused shock and offence to the staff. His view was that her authority as manager had been damaged beyond repair. In conclusion, he upheld her dismissal on the ground of gross misconduct.
On 30 September, she was sent a confirmatory letter. From those facts, the Tribunal found:
First, they concluded that the employers' disciplinary procedures had been conducted in an exemplary way; but second, they found that their investigation into the surrounding circumstances was insufficient to enable them to place Miss Nicholson's offence into a proper context. For this reason, they found that the dismissal was unfair.
It is clear from paragraph 11 of their Reasons that the Tribunal thought the employers had failed to investigate a whole different side of the matter. They felt the branch manager should have been asked what he knew of the social activities of the club which had led to its being banned from that other place of entertainment in Hull. Had senior management shown excessive tolerance of an undesirable type of social function? They stressed how difficult it was for management to walk the tightrope which had to be walked on such occasions, that which drew the line between over familiarity on the one hand and aloofness on the other. They wondered whether management of the Company had failed to give adequate guidance to junior management how to conduct themselves at such a function.
The Tribunal recognised that the employers took a serious view of smoking cannabis, especially because of its illegality but they observed that this was a view which was not generally shared by the young. For this reason too, they thought it was incumbent on the employers to ascertain more fully what were the surrounding circumstances of the incident. Who, for instance, had initiated the smoking? Had it been Miss Nicholson?
They observed that Miss Nicholson had not sought at any stage to develop these points which might have mitigated her offence or put it into a better perspective. They attributed this omission on her part to her youthfulness and comparative inexperience in management. However, in their view, this did not relieve the employers from the responsibility of exploring those aspects for themselves. The burden of investigating the full circumstances rested with them. This, they did not do, and therefore the Tribunal concluded the dismissal was unfair.
The Tribunal had then proceeded to consider Miss Nicholson's own conduct as a contributory factor in her dismissal. They high-lighted the fact that she was not a habitual user of cannabis, and had committed this act of folly on the spur of the moment. Though they recognised her conduct was obviously wrong, they were not satisfied it was fatal to her authority as deputy manager. They thought the situation called for guidance from higher management but this had not been forthcoming. In conclusion, the Tribunal found that her conduct was 10% responsible for her dismissal.
Mr Scott, of Counsel, argued the appeal on behalf of the employers. He made three substantive criticisms of the Tribunal's decision. He submitted that the Tribunal sought to impose on the employer too high a burden in expecting them to carry out a full and comprehensive investigation in the circumstance of this case where the employee had admitted the misconduct complained of. Second, in coming to the conclusion that the peremptory dismissal on the proven facts of this case was unfair, the Tribunal had, in effect, substituted their own judgment for that of the employers in contravention of established legal principle. Third, he challenged the assessment of 10% contributory conduct.
Mr Forest, for the employee, supported the Tribunal's finding that the employers had failed, by reason of the insufficiency of their investigation, to judge the employee's conduct within the appropriate social context. It is then said that, having found the dismissal unfair because of inadequate investigation, the Tribunal never reached the stage where, pursuant to section 57(3) of the 1978 Act, it had to consider whether dismissal was the fair and reasonable sanction for the employee's misconduct. Accordingly, by way of cross-appeal Mr Forest asked the Employment Appeal Tribunal to uphold the Tribunal's finding of an unfair dismissal by making a decision in the employee's favour under that sub-paragraph; alternatively, he asked us to remit the case to the Tribunal for a finding under that provision.
In our view paragraph 11 of the Reasons sets out the Tribunal's conclusion on each of the matters upon which they are required by section 57 of the Employment Protection (Consolidation) Act 1978 to make a finding. The first sentence states what they found to be the employers' reason for dismissal. The second sentence states their finding that the "reason" falls with the category of "conduct". These findings satisfy the requirements of Section 57(1) and (2).
The paragraph continues:
"We have then to consider the question whether in all the circumstances, including the size and administrative resources of the respondent, the respondent acted fairly in dismissing the applicant for the reason it did".
This, in unmistakeable form, raises the question posed by section 57(3). It would seem that the rest of the paragraph purports to answer that question.
The Tribunal's consideration of this issue begins with a general proposition:
"In general for a dismissal on the ground of conduct to be fair, there must be proper investigation, followed by a disciplinary hearing at which the employee has the opportunity to be accompanied by a colleague of his or her choice".
They then comment that the employers' disciplinary procedure was followed through, in exemplary fashion but, they say, the investigations made by the employers were "insufficient for the purpose". This reference to a "purpose" must, in our view, relate to the issue under consideration, namely that arising under section 57(3).
The Tribunal then proceeds to set out the matters which, in their opinion, such an investigation should have covered. They conclude that the evidence produced by that further investigation might have shown that there was "perhaps much to be said in mitigation of this undoubtedly undesirable conduct on the part of the applicant". Because the employers did not conduct such a full investigation, they said:
"...we hold that the dismissal was unfair".
We have analysed here the Tribunal's reasoning at some length because the initial argument, advanced before us on behalf of the employers, concerned itself substantially with the sort of investigation necessary to satisfy the tests set out in British Home Stores v Burchell [1978] IRLR 379, a case which deals with the issues arising under section 57(1), and not section 57(3). Likewise, the employee's skeleton argument plainly thought the Tribunal had based its decision on the employers' failure to establish that which had to be established under section 57(1). Hence the cross-appeal which, in the event of the Employment Appeal Tribunal finding for the employers under sub-section (1), sought a finding under sub-section (3). In argument, Mr Forest, in effect, conceded that Burchell's case (supra) did not apply because of Miss Nicholson's admission that she had committed the act complained of. He then proceeded to argue his case under sub-section (3) as did Mr Scott in reply.
Because of our analysis of the Tribunal's findings in paragraph 11 of their Reasons, we propose to deal with this appeal on the basis of a finding under section 57(3) only. This limits our consideration to two issues: first, what sort of investigation was it incumbent upon the employers to undertake to enable them to claim their decision to dismiss was reasonable and therefore fair? Second, in reviewing that decision, what was the appropriate question or questions for the Tribunal to ask?
For a decision to dismiss to be reasonable, it must obviously be supported by a sufficient investigation. In view of the extent of variables which exist in comparing one case with another, the nature and extent of the appropriate investigation should be dependent upon the circumstances of the individual case. We do not think we can do better than adopt that description of the investigation called for when an employer is formulating his "reason" for dismissal, as required by section 57(1). This was set out in British Home Stores Ltd v Burchell [1978] IRLR 379 and required the employer to undertake "as much investigation as is reasonable in all the circumstances of the case". In the present case, did the employers first undertake as much investigation as is reasonable in all the circumstances before it treated Miss Nicholson's misconduct as meriting dismissal?
The employers focused their investigation on the inherent nature of the misconduct in question, aggravated by the circumstances in which it was committed and by its impact on the employers' reputation and Miss Nicholson's ability to manage in future. They, for instance, carefully enquired into the nature of the substance smoked, the extent of Miss Nicholson's admission about it, and who had supplied it. Their enquiries also revealed the area in which Miss Nicholson's misconduct might cause her management problems in the future. They had evidence of Miss Clayton's reactions. They had the fact that Miss Barley, a subordinate, saw fit, for reasons best known to herself, to make her complaint to Mr Elkins. Both these matters hinted at the embarrassment Miss Nicholson and her more senior managers would have to cope with in the future. But the employers did not carry out any introspective enquiry into the shortcomings of their own management team or the adequacy or otherwise of their training of people like Miss Nicholson. Was that omission of any importance in a case like this? If it was of some significance, was it sufficient to make their investigations less than that which was reasonable?
We know not why the employers did not make those further enquiries. It might be that they thought the outcome of such an investigation would be irrelevant, having regard to the seriousness of the offence Miss Nicholson had committed and its consequences for management. This was the approach of the Employment Appeal Tribunal in the case of The Royal Society for the Protection of Birds v Croucher [1984] IRLR 425. In that case, the employee was dismissed for dishonestly claiming expenses from his employer. The Industrial Tribunal found the dismissal was unfair because the employers had not carried out as much investigations as they thought appropriate into the employee's claim that he had failed to claim for expenses to which he was entitled in an amount which, he said, exceeded that which was the basis of the employers' case. The Society had thought their alleged "counterclaim" was an irrelevance when considering the dishonesty admitted by this employee, a person in a position of seniority, trust and responsibility. The Employment Appeal Tribunal agreed, holding that the Tribunal had reached a conclusion in the case at which no reasonable and properly directed Tribunal could have arrived at.
Or it might be that the employers simply overlooked investigating this avenue of investigation now raised on Miss Nicholson's behalf, that is, that it just did not occur to them. If that be the case, is their omission sufficiently serious, in the circumstances of this case, to make such investigation as they did undertake, unreasonable? It is perhaps trite to say that an investigation is not automatically unreasonable simply because there is yet another enquiry which has not occurred to the employer.
At the end of the day, there is no evidence, or, if there was, the Tribunal did not record it, why the employers in their case did not make the further enquiries first suggested at the Tribunal hearing. What the Industrial Tribunal appear to have decided is that, because the employers did not investigate the shortcomings of their own management, the investigation they did carry out was insufficient and their decision to dismiss unfair. If this is what the Tribunal did decide, one must enquiry whether that is a legitimate approach. At this point one is embarking on the second substantive question earlier asked, namely what are the appropriate questions for a reviewing body to ask. However, before that issue is addressed, there is one further aspect which should be commented upon because it has been dealt with by both parties.
Mr Scott drew our attention to the fact that the offence of being under the influence of drugs was listed by the employers in their disciplinary code as one which would render the employee liable to be dismissed. Mr Forest, in answer, cites the case of Ladbroke Racing Ltd v Arnott [1983] IRLR 154 which held that a disciplinary rule cannot in itself necessarily meet the requirements of section 47(3). The statutory test of fairness is superimposed on the employers' disciplinary code. The standard of acting reasonably, set by section 57(3), requires an employer to consider all the facts relevant to the nature and cause of the breach, including the degree of its gravity. To this, however, should be added the further gloss that it is a relevant consideration that the employers have, by the inclusion of the offence within their Rules, warned all employees of the seriousness these employers attach to the use of illegal drugs.
Reverting now to the last issue on liability, we now have to consider the means by which the Tribunal came to its decision in this case on the crucial issues and enquire whether the approach they adopted was appropriate for a reviewing body. If, having reviewed the evidence and made their findings of fact, the Tribunal then go on to ask the right questions in order to arrive at their final decision, it would be no part of the Employment Appeal Tribunal's function to disturb that finding. Conversely, if it is apparent that the Tribunal have asked the wrong questions so as to derive the wrong answers, then this would amount to an error of law, and it would be the insidious duty of this appeal Tribunal to say so.
It is our view that, on reading the crucial paragraph 11 of the Tribunal Reasons as a whole, it is an unavoidable conclusion that the Tribunal found the employers were wrong in their assessment of three important matters on the way to their decision that Miss Nicholson's conduct merited dismissal, and as a result their decision to dismiss was unfair.
First, we find it implicit in their Reasons that the Tribunal thought the employers overreacted in holding that the smoking of cannabis in a public place was a very serious matter. We infer this from the Tribunal's comment that the employers' view of the gravity of the smoking is one which is by no means universally shared amongst the younger generation. Mr Forest supported the validity of that inference by stressing that the Industrial Tribunal fulfilled the role of an industrial jury and, as such, were entitled to have views about such common place matters, and, indeed, were required to bring those views into account when deliberating their conclusions. We agree that that must be right provided the Tribunal apply their views in the right way by asking the right questions in the first place.
Second, the Tribunal states that they were very far from convinced that the one act of smoking would have a fatal effect on Miss Nicholson's future as a deputy manager.
Third, the Tribunal found that it was essential for the employers to conduct an enquiry into the possible shortcomings of their own more senior management before arriving at their decision to discuss, and their failure in that respect made their decision unfair.
The Iceland Fisheries case, and several others decided since, have established that it is an error of law for the reviewing Tribunal to substitute its own assessments in a dismissal situation for those of the employer. The correct approach for the Tribunal is to ask in relation to each significant factor, contributing towards the reason for dismissal, whether a reasonable employer could hold the view that he did. Then the ultimate question is whether, in the circumstances of the case, dismissal was within that broad band of responses of a reasonable employer. The issue is not whether he had been right or wrong in his decision to dismiss but whether he had been reasonable and therefore fair in so deciding.
Thus, in the present case, the appropriate question to ask is whether a reasonable employer might consider the smoking of cannabis on such an occasion in a public place to be a very serious matter. Might a reasonable employer, knowing the staff, the personalities involved, and the duties of a deputy manager, consider that this incident at the Waterfront Hotel would have an impact on Miss Nicholson's ability to manage? Might a reasonable employer consider the incident so serious that, on the information he had, he deemed further investigation irrelevant when considering the appropriate sanction. Alternatively, might he consider that his failure to think of investigating further as the Tribunal suggested he should, detracted sufficiently from his overall investigation so as to make that such investigation unreasonable?
Only too well aware how easy it is for a Tribunal at any level inadvertently to slip into the trap of substituting its own views for those of the employer, we are of the view that the Industrial Tribunal have, indeed done just that. In so doing, they erred in law. That being our finding, it necessarily follows that we must allow this appeal. It is then for us to decide whether to remit this case for the Tribunal to address itself to the issues in accordance with our above directions.
The Tribunal below have considered the facts of this case with the greatest of care, and we are satisfied that their findings of fact are sufficient to enable us to substitute for their's a finding of our own. We consider that had the correct questions been addressed to the crucial facts, the appropriate answers would have confirmed that the employers' assessments, in each instance, were such as a reasonable employer might have come to, and further that the decision to dismiss was within the broad band of responses of the reasonable employer. Accordingly, in the exceptional circumstances of this case, there will be a declaration that the dismissal was fair.
There remains only the employers' challenge to the Tribunal's finding on the appropriate percentage of contributory conduct. In view of our decision above, it is unnecessary that we should consider that matter further, and accordingly do not do so.