United Kingdom Employment Appeal Tribunal

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Cite as: [1994] UKEAT 322_92_2704

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BAILII case number: [1994] UKEAT 322_92_2704

Appeal No. EAT/322/92

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 27th April 1994

Judgment delivered on 25th May 1994

Before

HIS HONOUR JUDGE J PEPPITT QC

MR T S BATHO

MRS P TURNER OBE

BRITISH BAKERIES LTD APPELLANTS

MR J HOWARTH RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

APPEARANCES

For the Appellants MR R BLOOM

Solicitor

Messrs Jacksons

1/15 Queen's Square

Middlesbrough

Cleveland TS2 1AL

For the Respondent MR P KIDD

Counsel

Messrs McCarthy & Bennet

Solicitors

54 Bryn Street

Ashton-in-Makerfield

Wigan WN4 9AU

HIS HONOUR JUDGE PEPPITT QC This is an appeal from a decision of the Manchester Industrial Tribunal sent to the parties on 8th April 1992. The Tribunal decided unanimously that the Respondent had been unfairly dismissed by the Appellants but at the same time reduced his basic and compensatory awards by 70%.

The Respondent was dismissed for gross misconduct in April 1991. He had been employed by the Appellants, who are wholesale bakers, for 24 years latterly as the shift manager at their Wigan Bakery. He was a hard worker and his disciplinary record was good.

There had been significant stock losses at the Wigan bakery. In an attempt to reduce these losses the Appellants instigated a system under which any of their employees who wished to buy bread was required to make immediate payment and at the same time to obtain a ticket recording the details of his purchase. In this way the Appellants were able to reconcile the payments made by their staff and the quantity of bread shown by the ticket to have been purchased. The Respondent was well aware of this system.

On 16th April 1991 the Respondent was seen leaving the bakery with a loaf for which he had not paid and for which no ticket had been issued. On the following day Mr Jenkins, the Appellants' general manager carried out a full disciplinary enquiry into the matter. The Respondent admitted that he had taken the bread but said that he had intended to pay for it on that day. Mr Jenkins came to the conclusion that the Respondent had not intended to pay for the bread and having taken account of his record of service came to the conclusion that the offence was so serious that the Appellant had to be dismissed. No complaint is made about the conduct of Mr Jenkins' investigation nor the conclusion which he reached.

The Tribunal found that Mr Jenkins carried out a reasonable enquiry, that as a result he genuinely believed that the Respondent was guilty of theft and that there were reasonable grounds for that belief. The Tribunal went on to find that it was reasonable for Mr Jenkins to come to the conclusion that dismissal was a proper course of action for the Appellants to take. Accordingly, it being accepted that the reason for the dismissal related to the Respondent's conduct, the Tribunal when applying S.57(3) of the Employment Protection (Consolidation) Act 1978 found that the Appellants acted reasonably in treating that conduct as a sufficient reason for dismissing the Respondent.

Thus far no complaint is or could be made about the Appellants' disciplinary procedure. But the Respondent's contract of employment entitled him to appeal against Mr Jenkins' decision. That appeal was heard by Mr Goodwin, the Appellants' Employee Relations Manager. Mr Goodwin decided to re-hear the evidence which was before Mr Jenkins. Having done so he came to the conclusion that the Respondent had been guilty of theft. The Tribunal found that Mr Goodwin acted reasonably in coming to that conclusion. But in the course of his evidence to the Tribunal Mr Goodwin said that `He could not conceive of any circumstances in which theft could result in any other penalty than dismissal'. The Tribunal interpreted this statement as indicating that Mr Goodwin thereby `prevented himself from considering the circumstances of this particular case'. The penalty for theft was not automatic dismissal and the Tribunal considered that Mr Goodwin should at least have considered whether some other penalty might have been appropriate in view of the Respondent's long service and good record. Because he did not do so the Tribunal found that Mr Goodwin had `acted as no reasonable employer would have done' and that accordingly the Appellants' acted unreasonably in treating the reason for the dismissal as a sufficient ground for dismissing the Respondent.

Having found the dismissal to be unfair the Tribunal went on to consider Ss.73(7B) and 74(6) of the Act and reduced the Respondent's basic and compensatory award by 70%. In so doing the Tribunal stated:

"We did not find that the respondent had stolen the bread in which case we would have reduced the award by 100%."

Mr Bloom, on behalf of the Appellants attacks the Tribunal's findings of unfair dismissal by reference to Post Office v. Marney a decision of the Employment Appeal Tribunal reported at [1990] IRLR 170 which was cited with approval in Express Foods Group (International) Ltd v. Putman (Appeal No. EAT/189/91). The principle which he derives from these cases appears from the headnote in Marney which we find accurately summarises the material part of the judgment delivered by Knox J:

"Not every breach of an employee's contractual right of appeal necessarily renders the decision to dismiss and its upholding on appeal unfair. Since an appeal is a process whereby what has been done by an inferior tribunal is investigated to see whether it is something which ought to be disturbed or not, there has to be a circumstance which 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 employers. Once it is conceded that the process which was gone through before the original decision to dismiss was taken was intrinsically a proper one which arrived at a conclusion which was proper, the proof that on appeal the employers did not consider or review one of the constituent parts of that process does not involve the proposition that, as seen overall, the dismissal was unfair".

In Marney the employee had been dismissed after a disciplinary enquiry. He appealed and it was proved that the officer conducting the appeal did not consider the question of penalty because she believed, reasonably, that since the employee was already under a suspended sentence of dismissal, no other penalty was appropriate. Mr Bloom pointed to the similarity between that case and this, submitting that since no complaint had been made about the enquiry conducted by Mr Jenkins and the decision which followed it, Mr Goodwin's failure to consider penalty should not be held to have invalidated the Appellants' disciplinary procedure.

Mr Kidd, on behalf of the Respondent had two answers to this. Firstly, he said, the appeal conducted by Mr Goodwin was by way of re-hearing and accordingly all relevant circumstances fell for reconsideration. The person conducting the appeal was thus entitled to consider any decision different from his own as a flaw in the decision at first instance. Secondly, he submitted that Marney should not be followed as its effect was to re-introduce British Labour Pump which had been expressly disavowed in Polkey v. A E Dayton Services Ltd [1987] IRLR 503 HL.

As to the first of Mr Kidd's submissions we are by no means satisfied that the appeal in Marney was not by way of rehearing. The person conducting that appeal took the view that she had authority to reverse the decision at first instance "in relation to the question of fact: Did Mr Marney do what he was charged with?" [1990] IRLR p.172 at paragraph 6] and having conducted her enquiry did decide that he had committed the offence [paragraph 11]. It is difficult to see how she could have done so without re-hearing the evidence. But in any event we can see no reason why the Marney ratio should not apply equally to appeals by way of review and appeals by way of re-hearing. Both are designed to investigate the correctness of the hearing at first instance and to put right any errors which might emerge. We therefore reject Mr Kidd's first submission.

As to Mr Kidd's second submission the effect of the decision in British Labour Pump Ltd v. Byrne [1979] IRLR 94 EAT was to enable Industrial Tribunals to re-appraise procedural defects in a dismissal process by reference to facts proved before the Tribunal which may not have been in the minds of the employers at the time of dismissal. It was this principle that was rejected in Polkey [see for example per the Lord Chancellor at [1987] IRLR 507. 22].

The decision in Marney involves no recourse to facts not known to the employers at the date of dismissal. It was founded upon a finding that the employee had not been deprived of the chance of the employers coming to a conclusion on the question of penalty different from that which had been reached at the original disciplinary hearing. In our judgment, the position is precisely the same in the present case. The Respondent had been dismissed at first instance on grounds which the Tribunal found to have been reasonable. Mr Goodwin on appeal reasonably affirmed the original finding of theft. He failed to consider penalty only because he considered that nothing less than dismissal would be appropriate. Mr Jenkins' decision to the same effect was considered reasonable by the Tribunal. In these circumstances we consider that there was no realistic prospect of the Appellants, in the light of the facts known to them at the time, deciding upon any penalty other than dismissal. It seems to us therefore that the Respondent lost nothing by Mr Goodwin's failure to apply his mind specifically to alternatives to dismissal.

We are not bound to follow Marney but we respectfully agree with its conclusions and propose to do so. In the circumstances, we have come to the conclusion that the decision of the Industrial Tribunal cannot stand. We say this with some regret because it seems to us that the Tribunal's decision reflected an understandable attempt to give effect to its own view that the Respondent had not been proved to have been guilty of theft. But the decision in our view is in conflict with the ratio of Marney and accordingly it seems to us that our proper course is to find the dismissal to have been fair and to declare accordingly.

In the circumstances, it is unnecessary for us to consider the Appellants' alternative submissions regarding the 70% deduction made by the Tribunal from the Respondent's compensation.