United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 901_94_1411

Appeal No. EAT/901/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 14 November 1994

MR HONOURABLE MR JUSTICE MUMMERY (P)

MR T S BATHO

MISS A MADDOCKS, OBE

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MR K BLAKER          APPELLANT

GATEWAY FOODMARKETS LIMITED          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR J V STANLEY

(lay representative)

For the Respondents


 


MR JUSTICE MUMMERY (PRESIDENT): This is an Appeal by Mr Kevin Blaker against the decision of the Industrial Tribunal refusing to review an earlier decision reached at Exeter on 16 May this year. That decision was given in proceedings brought by Mr Blaker for unfair dismissal against his former employers, Gateway Foodmarkets Limited, by whom he had been employed since 1976 in the position of a store manager for last nine years down to his dismissal on 18 August 1993.

The unanimous decision of the Industrial Tribunal was that Mr Blaker had been fairly dismissed. The Full Reasons were sent to the parties on 25 May 1994. Mr Blaker was disappointed by the decision and appealed by Notice of Appeal dated 17 September 1994. Mr Blaker was represented by his father-in-law, Mr Stanley, both in the Industrial Tribunal and on this Appeal.

This is the preliminary hearing of the Appeal. The purpose of it is to decide whether any of the points raised in the Notice of Appeal are reasonably arguable points of law. If they are not, then there would be no point in pursuing the matter to a full hearing and the Appeal would be dismissed today.

In support of the Appeal, Mr Stanley has made a number of points in a written submission which he took us through in the course of his arguments. In order to determine whether those points constitute an error of law, which is arguable, it is necessary to look at the background to this dispute and the reasons the Tribunal gave for their decision.

In his Originating Application, presented on 9 November 1993, Mr Blaker's case was clearly and concisely set out. He was dismissed from his position of a store manager with Gateway for gross misconduct in the form of over-pricing goods, known in the trade as "buncing". He said that the practice and procedure in ensuring correct pricing was extremely complicated, difficult and time consuming. He submitted that the alleged misconduct which Gateway said he committed was not sufficiently serious to justify the step of instant dismissal for gross misconduct. A written warning would have been more appropriate to the circumstances of the case. He pointed out that the notification to staff that "buncing" was now to be an offence and liable to lead to dismissal was a change of policy, which, as applied to him, was not made known before his instant dismissal.

The claim for unfair dismissal was contested by Gateway on the grounds set out in their Notice of Appearance. Their case was that his employment had been terminated on 18 August 1993 for gross misconduct following an admission by him of knowing over-pricing of goods at a higher level than the official store price book, despite directions issued by the store operations director and his divisional executive. The Notice of Appearance referred to a memo which had been issued by the store operations director, Mr David Jury, on 26 May 1993 which was explained fully to managers at meetings by divisional executives. The statement identified "buncing", among other malpractices, as one which would no longer be tolerated. It was made clear that any manager discovered carrying out any of those stated malpractices after that date was liable to disciplinary action. The Notice of Appearance gave details of the circumstances in which Mr Blaker was accused of buncing, the investigations that were made, the disciplinary interviews that took place and the decision that was made to dismiss him for gross mis-conduct. He appealed against that decision. There was a hearing on 16 September in which he admitted that he received and read the memo that had been reiterated by his divisional executive, that he understood the recommendations of the audit report, but, despite that, he deliberately continued to inflate the prices of many lines. The appeal failed. So the case of the employers was that they had acted fairly and within the band of reasonable responses in dismissing Mr Blaker. They asked for a pre-hearing assessment on the basis that the claim for unfair dismissal was without substance.

There was a pre-hearing assessment. The Tribunal formed the conclusion that there was no reasonable prospect of success. The case went on. Mr Blaker lost the case. He sought a review. The Appeal before us is against the decision to refuse a review. On 22 August 1994, the Industrial Tribunal, constituted the same as in the original hearing on 16 May, unanimously decided to confirm the earlier decision. The Tribunal went further and ordered Mr Blaker to pay £25.00 in respect of the costs incurred by Gateway in connection with the proceedings.

At the review, various arguments were put forward. For reasons notified to the parties on 24 August 1994 the Tribunal rejected the grounds for a review and Mr Blaker appeals against that.

We have looked both at the detailed reasons for the original decision and at the reasons for refusing a review in the light of the six points which had been made by Mr Stanley on the Appeal. He made his points in relation to the following findings of the Tribunal. The Tribunal, having set out the history of the circumstances in which Mr Blaker was dismissed, stated that they were satisfied that Gateway had shown that the reason for Mr Blaker's dismissal was deliberately "buncing", in spite of instructions not to do so. That that constituted misconduct capable of justifying the applicant's dismissal. In coming to that conclusion, the Tribunal applied the well known test in relation to misconduct in employment British Home Stores Limited v. Burchell [1980] ICR, 303. The Tribunal correctly moved on to consider Section 57(3) of the 1978 Act and asked itself whether Gateway had acted reasonably or unreasonably in treating that reason as a sufficient reason for dismissing Mr Blaker. The Tribunal considered questions of procedural unfairness and concluded that Mr Blaker clearly understood he was deliberately over-pricing goods in his store. He was given every opportunity to explain his conduct and to say what he wanted in defence or mitigation.

The Tribunal considered, again, in our view, correctly, whether dismissal was too severe a penalty as Mr Blaker had claimed. They dealt with submissions made by Mr Stanley on his behalf as to whether it was reasonable for the employers to consider Mr Blaker's conduct as gross misconduct, rather than serious misconduct. That submission was made in the context of the disciplinary procedure. Having considered those submissions, the Tribunal stated that an employer was entitled to set his own standards and to determine what conduct constituted gross misconduct. Provided the employer had acted reasonably in classifying a particular form of misconduct as gross misconduct, it was not open to the Tribunal to disagree and classify that misconduct as serious misconduct so as to warrant a lesser penalty. The Tribunal's view was that, given the clear instructions issued by Gateway on the subject of "buncing" and of the potentially serious consequences of its business of "buncing" it could not say that Gateway acted unreasonably regarding the applicant's conduct so. Moreover, they agreed that deliberate over-pricing was dishonest. For those reasons, the Tribunal said they unanimously decided that the applicant was fairly dismissed.

On the review, the Tribunal's conclusions were that the arguments put forward by Mr Stanley were really a repetition of the points that had already been made. Those points were that Gateway had acted unreasonably in not making it clear to all employees that contravention of the rule against "buncing" would be considered gross misconduct and a summary dismissal offence, that Gateway had followed the wrong disciplinary procedure and that the Tribunal had therefore, at its earlier hearing, come to a decision which should be reviewed.

The view of the Tribunal on the review was that Mr Stanley was merely disagreeing with a number conclusions already reached by the Tribunal. After careful deliberation and reviewing all the evidence the Tribunal confirmed the original decision.

Mr Stanley's first point was related to the disciplinary procedure. He referred us to the disciplinary procedure in subsection 14 of section 3 of the company's Stores Operations Manual. 14.3 deals with misconduct. It is divided up into gross misconduct, serious misconduct and minor misconduct. The short point made by Mr Stanley was that under the heading "Serious Misconduct" there is listed among a number of offences to which the expression "serious misconduct" applies the following:

"... - Failure to carry out instructions..."

His argument was briefly that, as the employer had himself classified "failure to carry out instructions" as serious misconduct, it was unreasonable for the employer to classify failure to carry out instructions as gross misconduct. His argument was that it was incumbent on an employer to apply its own published disciplinary procedure which is understood by the employee to be current and to be the applicable procedure to any disciplinary proceedings. An employer has not act reasonably in classifying a particular form of misconduct as gross misconduct, so as to warrant a greater penalty, if this is inconsistent with examples of misconduct given in the applicable disciplinary procedure. Mr Stanley made those two points. They really come down to the same point, that is, did the Tribunal err in law in saying that the employer acted reasonably in these circumstances? We have given serious consideration to this argument. In our view, it does not raise any question of law that is reasonably arguable. The position is that the disciplinary procedure is not, in giving examples of gross misconduct, serious misconduct and minor misconduct, attempting to set out a code of exhaustive watertight categories of conduct. Whether something is gross misconduct, which justifies summary dismissal, must depend on all the circumstances of the case, looked at from the point of view of the reasonable employer.

In our view, it is clear from the wording of the Stores Operations Manual that what are given under the various headings are overlapping instances. They are not watertight categories. Under Gross Misconduct what is said is:

"... Serious breaches of discipline may render the offender liable to summary dismissal or suspension on basic pay pending investigation, as in the cases of the following instances:..."

They are not the only examples that may arise in practice of gross misconduct.

In this case, the Tribunal reached the conclusion that the employer was entitled to form the view that this was gross misconduct. They found on the facts that, what had previously been condoned as a practice, was now made a prohibited practice and that breach of the instruction not to engage in it might lead to dismissal. This was made known to Mr Blaker; Mr Blaker, the Tribunal found, acknowledged that he was aware of the memorandum which had been issued. He admitted that he continued deliberately to over-price goods. In those circumstances, there was no error of law on the part of the Tribunal in finding that the employer company satisfied the requirements of the Burchell test, or that the employer acted reasonably within the meaning of Section 57(3), in treating that as a sufficient reason for Mr Blaker's dismissal.

Mr Stanley made his next point on the basis that the practice for which Mr Blaker was dismissed, had previously been condoned. He submitted that a practice that contravened instructions and yet had been considered acceptable and openly condoned by management, could not immediately become a practice which could be considered to be gross misconduct and warrant summary dismissal by the issue of a new instruction. In our view, there is no error of law in the Tribunal's decision in the way it treated the change of practice. The Tribunal found as a fact that there had been changes at senior management level at the beginning of 1993. It was decided by a newly appointed stores operations director that certain malpractices, including "buncing", that had previously been condoned, would no longer be tolerated and that this new policy was made known. There is no reason in law why an employer cannot prohibit a practice he has previously condoned, provided that he makes it known to the affected parties that it has become prohibited and provided he has made it known what serious consequences are likely to follow from breaching the change of policy. We are unable to find any error of law on this point.

Mr Stanley's next point is incorrectly formulated in law. He submitted that the test of reasonableness of a decision for a Tribunal is: does it accord to the decision the Tribunal would have made, given the same facts? That is not the test of the reasonableness of the employers' decision. A Tribunal is not entitled to substitute its own views for those of the employer. The Tribunal's task, which was carried out correctly, was to ask whether what was done by the employer was within the range of reasonable responses of a reasonable employer. Further, we are not for a moment impressed by any allegation that this decision was perverse.

Mr Stanley argued that the decision that Mr Blaker was fairly dismissed was inconsistent with the evidence. This is an argument that the decision was perverse, if it was contrary to the evidence or unsupported by the evidence. The main point sought to make on the facts in this case was that Mr Blaker was dismissed for "buncing", a practice previously openly condemned by management until just 11 weeks before he was dismissed and that Mr Blaker had been employed by Gateway for 18 years with an unblemished record. In view of that evidence, no reasonable tribunal could have come to that conclusion that Mr Blaker was fairly dismissed.

We do not agree. It is preeminently a question for the Tribunal whether, in all the circumstances, Mr Blaker was fairly dismissed. The Tribunal clearly had in mind both the previous condemnation of the practice of "buncing" and Mr Blaker's record in employment, including his 9 years with managerial responsibility. The Tribunal had all the relevant factors in mind and were entitled to come to the conclusion that the dismissal was fair.

Finally, Mr Stanley made a point against the decision of the Tribunal on the review to make an order for costs of £25.00 to be paid by Mr Blaker as a contribution to Gateway's costs. His point was that the Tribunal adjourned for about 45 minutes after hearing the evidence and argument before returning to announce that they had reserved their decision. The time taken by the Tribunal to discuss the matter and the reserving of their decision acknowledged that, on some points, there was difficulty in reaching a decision. Therefore Mr Stanley argued, how could the Tribunal come to the conclusion that this was a case in which costs should be paid on the basis of an opinion of the Tribunal that Mr Blaker's continuation of the proceedings was unreasonable? The Tribunal's power to award costs is a matter of discretion which has to be exercised by looking at whether the proceedings had been brought or conducted and continued frivolously or vexatiously or unreasonably. We appreciate the point made by Mr Blaker that it can be argued that taking as long as 45 minutes for reaching a decision is some indication that there was something in the case after all. But, in our view, no error of law has been demonstrated in relation to discretion on costs. We would not interfere with the way in which a tribunal exercises a discretion, unless it was clearly demonstrated that they had failed to take into account some irrelevant factor or had acted contrary to principle. The point made by Mr Stanley on the time taken to reach a decision is not one which inevitably points to the case having some substance. The position therefore is that we are not persuaded that there is any error of law in any part of this decision. In fact, it was a detailed decision, followed by a review reaching the same conclusion. The Tribunal correctly directed itself, first as to the proper test of misconduct in the Burchell case and then as to the test under Section 57(3). Itcame to a conclusion which, while Mr Blaker may not agree with it, is a conclusion which the Tribunal was entitled to come to and one which it reached without any error of law on its part.

The Appeal will be dismissed at this stage.