United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 654_93_1901

Appeal No. EAT/654/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 19th January 1994

Before

THE HONOURABLE MR JUSTICE MUMMERY (P)

MISS J W COLLERSON

MR P M SMITH

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T COWIE PLC T/A COWIES OF PETERBOROUGH          APPELLANTS

D J CHAPPELL          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR D C J APPLEGARTH

(Solicitor)

T Cowie plc

Millfield House

Hylton Road

Sunderland

SR4 7BA

For the Respondent MR M V MOORHOUSE

(Representative)

CAB

Alma House

41A Park Road

Peterborough

PE1 2TH


 


MR JUSTICE MUMMERY (PRESIDENT): The appeal before us is from the Industrial Tribunal sitting at Leicester on the 11th June 1993. The Industrial Tribunal heard a complaint from Mr Chappell brought against his former employers Cowies plc, t/a Cowies of Peterborough.

The Tribunal unanimously decided that Mr Chappell was unfairly dismissed. Cowie plc were notified of the decision on the 21st July 1993 and, as they were dissatisfied with it they decided to appeal. The grounds of appeal are set out in the Notice dated 5th August 1993.

The factual background can be quite briefly stated. Cowies are motor dealers operating from premises in Peterborough. They are organised into separate departments, each with a manager reporting to the general manager. Mr Chappell was the Parts Department manager and had been employed by Cowies since May 1986. The Tribunal found that his performance over the six year period, up to the weeks immediately before his dismissal, had been satisfactory and had been recognised. He had been awarded a diploma in 1988 and, some 18 months before he was dismissed, on 4th December 1992, he had been paid a special bonus by his employers.

The circumstances in which his employment was terminated on the 4th December 1992 are the subject of detailed findings of fact by the Tribunal. The Tribunal found the following facts in a decision which is admirably clear and concise. Cowies had not been profitable since April 1992. Each department in the Company was losing money. On the 10th November a new general manager, on special assignment, arrived at Peterborough. He was Mr Milburn. Mr Ellis, the general manager, resigned two days later. About 10 days later there occurred the first of a series of incidents involving Mr Milburn and Mr Chappell, which led up to the dismissal that formed the subject of Mr Chappell's complaint.

The first incident occurred on the 20th November 1992. The Tribunal found that Mr Milburn had visited Mr Chappell's office in the Parts Department. He discovered an open cash box on Mr Chappell's desk, containing about £40. Mr Milburn took possession of it. It was about an hour before Mr Chappell contacted him to make enquiries. Mr Milburn interviewed Mr Chappell and issued a written reprimand and warning to him the same day. It was found that Mr Chappell had left the cash box unattended in his office in order to answer the telephone in the Parts Department counter, and then to serve a customer. In the 15 minutes or so before he returned to the office the money went missing from the cash box. That incident led Mr Milburn to write this letter to Mr Chappell:

"Written Reprimand & Warning

On Friday morning 20th November I had occasion along with Mr D Hurrell to enter your open and unattended office.

We found to our concern an open cash box, with the coin try laid on the desk leaving exposed in the bottom a quantity of cash (notes).

I removed this to my office. Over 1 hour went by before you approached me is to the whereabouts of this box and contents.

I must express my great concern and disappointment, suffice to say that negligent and irresponsible behaviour of this kind will not be tolerated.

After discussing this matter with you I expect no re-occurrence of this or related matters."

There was another incident over the weekend leading to further confrontation between Mr Milburn and Mr Chappell on Monday morning. The facts found on that incident are that on the 22nd November, a Sunday, an apprentice mechanic was detected attempting to steal anti-freeze from the Parts Department, which was insecure. The dealership was open at the time and salesmen were on duty. Mr Milburn considered that there was a lapse of security in the Parts Department which contained items to the value of £50,000 and that that lapse was the responsibility of Mr Chappell, and/or the parts man, a Mr Connelly, both of them were issued with written reprimands and warnings. In Mr Chappell's case this took the form of a final written warning. The Tribunal found that Mr Chappell attended the Company premises on Saturday 21st November for a time and, when he left, Mr Connelly was still working in the department. It was not made certain if Mr Chappell would return that day, In the event he did not, but the Tribunal found it was reasonable to expect Mr Connelly to secure the department before he left.

On the 23rd November 1992 Mr Milburn interviewed Mr Chappell about this incident and he wrote a letter on the same day headed:

"Written Reprimand & Warning

This type and frequency of correspondence is becoming tedious and alarming.

An incident occurred on Sunday 22nd November that brought my attention to the security of the Parts Department.

After careful and thorough investigations along with interviews with yourself and staff, you admitted that the custom and practice of securing this department was consistently being neglected. I refer to my letter of 20th November [I have already quoted from], `neglect and irresponsible behaviour of this kind will not be tolerated'.

My only course of action is to issue you this final written warning."

A week later there was another incident involving Mr Chappell and Mr Milburn. The Tribunal found these facts:

"(k) On 1 December 1992, a cheque requisition form prepared by Mr Chappell was brought to Mr Milburn for approval. The sum involved was £222.09 and the reason for payment was purported to be `parts required'. It later became clear that the payment related to two invoices delivered by Appleyards, the suppliers of parts in August and September 1992.

(l) Mr Chappell had raised the requisition when it became known to him that Appleyards had placed a stop on credit facilities because of non payment of the invoices and would not release a carburettor which was urgently required. The payment was for parts already delivered rather than required. Mr Milburn felt that he had been seriously misled.

(m) Mr Chappell was interviewed and reminded of the previous written warnings. He was asked for an explanation of the late payment of invoices and responded by saying `things are getting on top of me lately'. However the late payments of the invoices were his responsibility.

(n) Mr Milburn decided to take time to consider the various matters and did so until 4 December 1992. In the meantime a stock check of 27 November 1992 revealed an apparent stock deficiency in the sum of £4,000 and three instances of parts being purchased for customers' vehicles which had not been booked and charged to the customer. The three incidents involved amounts ranging from £6.00 to £45.00.

(o) Mr Chappell's response to the reported stock deficiency were that he was still attempting to reconcile various invoices and mis-postings. Mr Milburn then told him that he was dismissed and the terms of his dismissal were recorded in a letter dated 8 December 1992. . ."

The letter of 8th December to Mr Chappell said:

"I refer to our interview on the 4th December 1992 and your subsequent dismissal. Your Contract of Employment was terminated because of conduct unacceptable for the Manager of a Parts Department.

I refer to two written warnings dated 20th and 23rd November along with other serious breaches of procedure brought to your attention on Tuesday 1st December and Friday 4th December. . ."

There are other matters mentioned in relation to wages in lieu of notice and the keeping of the Company car for the period of notice.

The Tribunal found that at each of the interviews Mr Chappell was given the opportunity to have a representative and, when he was dismissed, his attention was drawn to the grievance procedure. This was apparent from the letter of the 8th December.

The decision clearly set out those findings of fact in relation to the incidents. The Tribunal, in paragraph 6 of its decision, proceeded to apply the provisions of Section 57 of the Employment Protection (Consolidation) Act 1978. The dismissal was admitted. It was for the employers to establish that it was for a reason within Section 57(2). The Tribunal found that the reason fell within the relevant Section as it related to the conduct of Mr Chappell. The Tribunal then addressed itself, correctly, to the issue of fairness under Section 57(3) the Tribunal said in paragraph 7:

"Having regard to the provisions of this section, the Tribunal finds the dismissal of the Applicant to be unfair and that the dismissal of the Applicant was not within the range of reasonable responses open to a reasonable employer in the circumstances:"

It briefly set out its Reasons. I should read these in full because Mr Applegarth, on behalf of Cowies, has sought to attack these conclusions as being ones which no reasonable Tribunal, properly directing itself to the law and properly appreciating the facts which it had found, would have reached:

"(a) It was not the response of a reasonable employer to issue a written reprimand and warning in response to the incident of 20 November 1992 relating to the security of the cash tin containing some £40.00.

(b) It was reasonable for Mr Chappell to presume on Saturday 21 November 1992 that Mr Connelly, who he had left on the premises, and who was in possession of a set of keys, would secure the parts department.

(c) Taken together, the two matters should not have resulted in Mr Chappell having received a final written warning and to have been in this position when the matters of the requisitioned cheque, stock deficiencies and errors concerning stock were considered.

(d) The latter matters merited concern but Mr Chappell's past and proven record as a parts manager was not sufficiently taken into account by Mr Milburn and a reasonable employer would have further questioned and investigated why it appeared that an employee with such a record was apparently operating in a less than efficient manner."

The Tribunal did, however, find that Mr Chappell had contributed to his dismissal to the extent of 25%. The award would be reduced to reflect that. There is no appeal against that part of the decision.

Mr Applegarth, for Cowies, has made his submissions clearly and concisely in oral argument with the help of a written outline argument which was helpfully submitted to the Tribunal in time to read before the hearing started. In his submissions Mr Applegarth did not shrink from the ground of appeal that this decision was perverse, ie one which no reasonable Tribunal would have arrived at. This is a very difficult ground on which to attack a decision of an industrial tribunal which sets out clear findings of fact supported by sufficient evidence and where the Tribunal correctly directs itself to the relevant provisions of the Act and the test to be applied in determining whether a dismissal is fair or unfair.

The way in which Mr Applegarth put his case was first on the incident of the requisition of the cheque alone. He took the latest incident in the line of incidents between Mr Milburn and Mr Chappell. His submission was that Mr Milburn, who took the decision to dismiss on 4th December, directed himself correctly and after deliberation to the facts of the incident and gave Mr Chappell a proper opportunity to relate his side of the matter. Mr Applegarth submitted that, on that incident alone, the only decision which a reasonable tribunal could have arrived at was that dismissal was within, and not outside, the band of responses of a reasonable employer. Mr Applegarth proceeded to his second way of putting the appeal; that if he was wrong on that, and the matter was to be looked at in the light of the earlier incidents for which warnings and written reprimands had been given, it was wrong for the Tribunal, wrong in the sense that no reasonable Tribunal could have reached this decision, to conclude that it was not the response of a reasonable employer to issue a written reprimand and warning in relation to the incident concerning the security of the cash tin and the security concerning the security of the premises which occurred over the week-end of the 21st and 22nd November.

It is difficult to say much about this way of putting the argument; it is a difficult matter to persuade this Tribunal that an industrial tribunal has acted perversely in reaching a decision on the response of a reasonable employer to these incidents. Mr Applegarth reminded us that the law is clearly set out in the decision of this Tribunal given by Browne-Wilkinson J in Iceland Frozen Foods Ltd v. Jones [1982] IRLR 439. Browne-Wilkinson J summarised the state of authorities in an lucid way which has led to extensive citation of the case ever since. He said:

". . in answering the question posed by s.57(3) [of the 1978 Act, and that is what this Tribunal were doing in paragraph 7 of their decision]

(1) the starting point should always be the words of s.57(3) themselves"

The Tribunal directed itself to the words of Section 57(3) in paragraph 6 of the decision.

(2) in applying the section an Industrial Tribunal must consider the reasonableness of the employer's conduct, not simply whether they (the members of the Industrial Tribunal) consider the dismissal to be fair;"

I pause to comment that this is what the Industrial Tribunal was doing. It considered whether the employer's conduct was a response of a reasonable employer. It did not simply ask itself whether various members of the Tribunal thought that the response was reasonable.

(3) in judging the reasonableness of the employer's conduct an Industrial Tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;"

We make the same comment. There is no part of paragraph 7 in which one can detect a commission by the Industrial Tribunal of the sin of substitution.

(4) in many (though not all) cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonable take one view, another quite reasonably take another;"

The conclusion of Tribunal was that the issue of the written reprimands in respect of the "cash box" incident and the security of the premises incident was not within the band of reasonable responses nor was the response of Mr Milburn to the incident of the requisitioned cheque.

Finally, Browne-Wilkinson J said:

"(5) the function of the Industrial Tribunal, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band the dismissal is fair: if the dismissal falls outside the band it is unfair."

In those circumstances we see no error of law on the part of the Tribunal. It is unnecessary for us to consider the detailed points made in the skeleton arguments. The helpful skeleton argument, submitted on behalf of Mr Chappell, reviews of the facts relating to the incidents, which I have already set out, and seeks to support the decision of the Industrial Tribunal on the grounds which are stated.

For those reasons this appeal will be dismissed.