United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 952_93_0302

Appeal No. EAT/952/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 3 February 1994

Before

THE HONOURABLE MR JUSTICE WATERHOUSE

MISS D WHITTINGHAM

---

A J STEPHENS & SONS          APPELLANTS

(1) V DIXON

(2) J DIXON           RESPONDENTS

---

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


---

APPEARANCES

For the Appellants MR D PHILLIPS

(OF COUNSEL)

Messrs Beaumonts

Offa Street

Hereford HR1 2LJ

For the Respondents NO APPEARANCE BY OR ON BEHALF OF RESPONDENTS


 


MR JUSTICE WATERHOUSE: We have been persuaded by Mr Phillips that this is an Appeal that should go forward to a full hearing. We must make it clear, however, that the ground of our decision is that we consider that the Appellant has an arguable case on ground 5 of the grounds of appeal set out in paragraph 6 of the notice of appeal, dated 17 November 1993.

As the matter is to proceed to a full hearing, this will be a brief judgment. Out of courtesy, however, to the full argument that we have heard, we should indicate our reasons for deciding that the appeal should proceed.

It is clear from the statement of reasons that the Tribunal found that the reason for the dismissals of both the Respondents was theft. That was stated expressly in paragraph 7 of the statement of reasons. It was a finding that accorded fully with the notice of appearance by the Respondent, in which the reason for each dismissal was stated to be theft.

Mr Phillips has sought to argue before us that there was a wider reason based on conduct, which could have afforded a reason for the dismissals of the Respondents and did, in fact, do so. He suggests that the general way in which the transactions in relation to building supplies on behalf of the Respondents had been conducted was a sufficient reason related to conduct for the dismissals. He submits that that was implicit in the evidence of Mr Stephens about the matter and that any fault on the part of Mrs Dixon was properly attributable to her husband also, because he was benefitting from the building supplies ordered, or at least invoiced, in the name of Mr Stephens' firm. Whilst that argument has been presented attractively, it flies in the face of the express finding of fact made by the Tribunal (and, indeed, the evidence) that the dismissal was decided upon and communicated to the female Respondent, Mrs Dixon, after a very brief telephone call lasting only three or four minutes.

We can find no basis in law, therefore, on which the finding as to the reason for the dismissal could be impeached and we have not been able to discern any argument based upon the decision of this Appeal Tribunal in British Homes Stores v. Burchell (1980) ICR 303, which would justify leave to appeal.

The Tribunal went on to deal with the question of unfairness, and in the circumstances, reached the conclusion that it had been unfair. That conclusion was, in our judgment, inevitable on the basis of material before the Tribunal below.

The next point that Mr Phillips has sought to argue is that there was a failure, in relation to the assessment of compensation, to consider whether or not the Respondents had contributed to their own dismissal, so that a diminution in the award would have been appropriate in accordance with the provisions of Section 74(6) of the Act of 1978 (see also Section 73(7)). The difficulty about that is that the point was not expressly taken on behalf of the Appellant at the hearing below. Moreover, whereas an argument based upon Section 74(6) might have been sustainable if the reason for dismissal had been put in general terms in relation to the accounting records kept by Mrs Dixon, with the knowledge of her husband, it would have been much more difficult to sustain the argument on the basis that the dismissals were for theft and that they were unfair because the matter had been considered only in a three or four minute telephone conversation.

The evidence before the Tribunal was that the Police were later called in to investigate the alleged theft but found no evidence on which to press charges and Mrs Dixon herself gave evidence that she had not, at any stage acted dishonestly in the material transactions. In paragraph 10 of the statement of reasons the Tribunal recorded her explanation for the fact that certain building supplies had been put by the supplier on the firm's account rather than submitted by way of separate invoice to Mrs Dixon and her husband. Again, therefore, we find ourselves unable to identify any point of law based upon Section 74(6) of the Act of 1978, which could properly be considered now by the full Tribunal.

There remains, however, the assessment of compensation made by the Tribunal on a full liability basis. There was evidence before the Tribunal below that the Appellants were in serious financial difficulties as early as July 1992. Indeed, a statement by the male Respondent, Mr John Dixon, before the Tribunal indicated that in July 1992 the Appellants, through Mr Mervyn Stephens, had offered to sell the company to Mr and Mrs Dixon for £25,000 and that Mr Stephens had told Mrs Dixon the following morning that the company was going into voluntary liquidation. Nevertheless, there was no investigation by the Industrial Tribunal, of the actual fortunes of the Appellants in deciding how long the Respondents could reasonably have expected to retain employment with them. In the event, an assessment of compensation was made on the basis of continuing full loss by the Respondents to February 1994, whereas the Appellants in fact ceased to trade in the summer of 1993.

The procedure before the Tribunal below was somewhat unorthodox and may have contributed to the difficulty that now arises. Mr Dixon was discouraged by the Chairman from giving evidence on the issue of liability, no doubt having considered the contents of the employers' appearance in the proceedings. After the decision had been made on the issue of unfair dismissal, Mr Dixon was invited to make an unsworn statement about his financial position to the Tribunal and the solicitor acting for the Respondents was permitted to cross-examine him but Mr Stephens was not called to give evidence before the Tribunal on the issue of compensation. He could have given very material information to the Tribunal because, certainly by the time of the later hearing on 14 September 1993, the Appellants had ceased to trade. It follows that the assessment of the compensatory award proceeded on a false basis and must have been excessive.

Yet another point in relation to the award is that there was evidence before the Tribunal below that, quite apart from the events of July 1992, it had been the intention of Mr and Mrs Dixon to set up business on their own. That does not appear to have been considered by the Tribunal in making its assessment. If, for example, it was likely that Mr and Mrs Dixon would have started up their own business by January 1993 in any event, it was inappropriate to include in the compensatory award any figure representing the differential between their earnings in their own business and their pre-dismissal earnings. The most that it would have been appropriate to award in relation to that period would have been a sum reflecting the fact (if true) that they would have started in business on their own at a later date rather than at the earlier date, which was, in effect, forced upon them by their dismissal.

That is a sufficient indication of the basis of our reasoning. We are conscious that the points that have been made are closely linked to issues of fact but, having regard to the way in which the argument is put, namely, that there was a material error of law because relevant considerations were not taken into account, we think that it is proper to allow the Appeal to proceed to a full hearing. It may well be that the matter can now be resolved sensibly, in the light of our decision, by discussion between the parties. It would be a pity if additional costs were to be incurred by a full hearing before the Appeal Tribunal followed by another hearing before an Industrial Tribunal, if they can be avoided, bearing in mind the limited amounts that are in issue.