United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 1084_93_0702

Appeal No. EAT/1084/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 7 February 1995

Before

THE HONOURABLE MRS JUSTICE SMITH

MR J D DALY

DR D GRIEVES

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GATEWAY FOODMARKETS LTD          APPELLANTS

MR R WALKER          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR ROBERT THOMAS

(OF COUNSEL)

Messrs Osborne Clarke

30 Queen Charlotte Street

Bristol

BS99 7QQ

For the Respondent MR SEAN JONES

(OF COUNSEL)

Messrs Edge & Ellison

Solicitors

Rutland House

148 Edmund Street

Birmingham B3 2JR


 


MRS JUSTICE SMITH: This is an appeal from the decision of an Industrial Tribunal sitting at Birmingham on 3 days in April, July and September 1993. The unanimous decision of the Tribunal was that Mr Walker, the Respondent to this appeal, was unfairly dismissed by his employers Gateway Foodmarkets Ltd, the Appellants. They also found that Mr Walker contributed to his dismissal by his own conduct to the extent of 10%. They assessed compensation in the sum of £15,535.

Mr Walker commenced his employment with International Stores Ltd, the predecessors in title, of the Appellants as long ago as 1945. After about 10 years he became a manager at one of their stores. He went on to manage several stores and in about 1984 became the manager of International's Alcester store. In 1987, following the takeover of the International Stores business by Gateway, the Appellants opened a new store in Alcester. The Applicant was offered the position of provisions manager which was to some extent a demotion. He was responsible to the store manager, Mr Evans.

The Tribunal found that the Appellants are a large organisation operating some 650 food stores with about 44,000 employees. They said that they would expect such an organisation to operate a well-established personnel function.

Until October 1992 Mr Walker had an unblemished disciplinary record. His performance was described by one of the Appellant's witnesses as "exemplary".

The Appellants operated rules which governed staff purchase procedures. In essence these provided that any goods to be purchased by staff must be taken through a check-out in a basket or trolley and must be rung up and paid for at the time. Staff were only permitted to make purchases at the end of their duty. Under no circumstances would any form of credit or late payment be allowed. Staff were issued with discount vouchers, which reduced the price of purchases from the store.

The Appellants also had rules relating to security checks upon staff. Selection for search must be at random. Before the search, the employee concerned must be asked if he or she had any Company property in their possession; if so they should be requested to produce it and give an explanation. The rules continued:

"The explanation for any property found or produced will be either permission, purchase, mistake or theft. The first three possibilities must be verified immediately.

If theft is admitted, or evidence from the circumstances, or if no reasonable explanation for possession of properties given, the procedure for dealing with staff dishonesty must be followed."

The Appellants' disciplinary procedure provided inter alia, that serious breaches of discipline may render the offender liable to summary dismissal. One of several examples of conduct which would amount to a serious breach was stealing.

The procedure also provided for the suspension of an employee under suspicion in the following words:

"During an investigation into an allegation of such behaviour, an employee may be suspended on basic pay."

The Tribunal found that the staff purchase rules were not operated strictly at the Alcester store. In particular staff were allowed to make purchases throughout the day and frequently did so whereas the rule provided for purchases to be made at the end of a duty.

During 1992 the Appellants came under some financial pressure and it was directed that there should be some redundancies from the Alcester store. Mr Evans, the store manager, informed departmental managers, including Mr Walker, of this requirement and a list of people who might be made redundant was drawn up. Mr Walker was not on that list. However, the Tribunal considered that in October 1992 Mr Walker was concerned about his position with the Appellants. During a visit shortly before 24 October 1992, Miss Harte the divisional executive who supervised the Alcester store had been critical of Mr Walker's performance. She described him as having an "old fashioned" approach. Mr Evans told Mr Walker of this and, as the Tribunal found, this criticism caused him concern.

Mr Walker came under suspicion on 24 October when it was reported to Mr Evans that he had been seen carrying a leg of lamb across the shop floor. Later, the leg of lamb had been found under the bottom shelf of the back-up refrigerator in the provisions department. Mr Evans suspected that Mr Walker may have the intention of taking this leg of lamb without paying for it. He warned the chief cashier to advise him if Mr Walker made any purchases during the day. He asked the chief cashier several times, but was told that no attempt had been made to pay for the leg of lamb. Mr Evans also kept a personal eye on Mr Walker during that day and saw him collecting some goods with a shopping trolley.

Miss Harte visited the store on Saturday 24 October but she did not visit Mr Walker's department or speak to him. It was normal for the shop to close at 6 pm on a Saturday evening. Usually Mr Walker and Mr Collins, the manager of the produce department, would stay behind for a short time tidying up. Also, it was Mr Collins' task to secure the store. Soon after 6 pm Mr Evans left the store. Mr Walker and Mr Collins were still inside. Mr Evans waited in the car park intending to carry out a security check on Mr Walker when he left. In due course Mr Walker came out of the store carrying a plastic bag containing some shopping. He was approached by Mr Evans and told that there was to be a security check. Mr Walker began to look for a receipt and then said "Sorry boss, I haven't paid for them". The Tribunal found that he was not asked for any other explanation; nor did he offer one.

He was found to have four items, including the leg of lamb, in his carrier bag, the value of the goods being just under £14.

Mr Evans suspended Mr Walker until Monday 2 November 1992 when a disciplinary hearing would take place. The reason why the suspension lasted for more than a week was that Mr Evans would be on holiday during the following week and he did not wish disciplinary proceedings to be held until his return. He advised Mr Walker of his right to representation. He took the goods from him and went back into the store to speak to Mr Collins who was still inside. Mr Collins told him that Mr Walker had made no attempt to pay for the goods before leaving.

It was the Appellant's practice that disciplinary interviews and decisions should be carried out by divisional executives. A Mr Aston was delegated to conduct this disciplinary hearing. Mr Aston's car broke down on the way to Alcester and the hearing, which was scheduled to take place at 10 am, did not take place until about 4 pm. At the hearing Mr Walker was not represented or accompanied. He was asked to explain what had happened on 24th October and, as the Tribunal found, he gave a long and detailed explanation of the events of that day and of the circumstances in which it had come about that he had left the store, with goods in his possession, without paying for them. Mr Aston denied that Mr Walker had advanced this explanation but the Tribunal found that he had.

The Tribunal found that Mr Walker told Mr Aston that he had felt under pressure because of the visit from Miss Harte. He said that his wife had given him a list of shopping but because he was running behind with his work, he had decided not to collect all the items on his list. He had put the leg of lamb in his departmental back-up fridge during the morning. At about 5.30 pm he had put the items which he intended to take into a box which he put in a trolley and had gone to a till with the intention of making payment. He queued for a short time and then he remembered that he had left his staff discount vouchers in the car. He said that he took his trolley, walked through an unused check-out and went to his motorcar. He looked for the discount vouchers but was unable to find them. He left the box which had been in his trolley in the car and he returned to the store with the goods in the trolley. He said that when he arrived back in the store, the tills were still busy so he pushed his trolley down the shop to the warehouse. On the way, he noticed that one of his assistants was very busy. Accordingly he stopped, left his goods on a cake stand and helped his assistant fill some shelves.

Soon after that, he found that it had turned 6 pm and the store had closed. He completed his duties and changed his clothes ready to go home. He tried to see Mr Evans to tell him that he had not been able to pay for his shopping but he found that Mr Evans had already gone. So he had left the store without paying for the goods and without obtaining permission to take them. Mr Collins was there but he did not wish to speak to Mr Collins about this matter. The Tribunal accepted that he would not normally discuss such matters with Mr Collins. That, in summary, is what the Tribunal found that Mr Walker told Mr Aston at the disciplinary hearing on 2 November. He accepted that taking goods without paying for them was contrary to the Respondents' rules but he made it clear to Mr Aston, as the Tribunal found, that it was his intention to pay on the following Monday. In effect, he was saying he had not been dishonest.

After that explanation had been received, there was a short adjournment for discussion. No investigation was made into the explanation which had just been given. The meeting was then reconvened and Mr Walker was told that he was to be dismissed on the grounds of gross misconduct after admitting taking goods without payment, resulting in an irrevocable breach of trust.

There was then some delay before the dismissal was confirmed in writing and some further delay in setting up the appeal hearing to which Mr Walker was entitled. In the event, he abandoned his right to an appeal and proceeded with his application to the Tribunal.

The Tribunal declared itself satisfied that the reason for the dismissal was that on 24 October Mr Walker had taken goods from the Alcester store without paying for them. They then directed themselves as to the law in relation to section 57(3) of the Employment Protection (Consolidation) Act 1978 and explained their conclusion that this dismissal had been unfair.

They said first that they had been concerned at the manner in which Mr Walker had been dealt with between 24 October and his dismissal. They were concerned that the search of his bag had not been at random, in breach of the Company procedure. He had not been asked if he had any Company property in his possession. He had not been asked for an explanation relating to the property in his possession. They considered that Mr Evans had jumped to the conclusion that Mr Walker had intended to steal the goods. They noted that Mr Evans had accepted, in evidence, that if, in the car park, he had heard the explanation that was given at the disciplinary hearing, he would still have suspended Mr Walker but he would have investigated the explanation. The Tribunal found that the purpose of the suspension of Mr Walker was not to allow an investigation into his behaviour, but to ensure that he was kept out of the store during Mr Evans' holiday. The Tribunal was also concerned that Mr Walker might have been put at a disadvantage by the postponement of the disciplinary hearing on 2 November, although they accepted that the reason for the delay was beyond the control of the Appellants. They were critical too of the notes of the disciplinary interview which were defective in several respects.

They observed that Mr Walker had explained at the disciplinary hearing that he had tried to pay for the goods on 24 October and had intended to pay for them on the following Monday. They referred to his description of his actions in the late afternoon and early evening. The Tribunal were critical of the Appellants' failure to investigate that explanation. They observed that there is a video security system at the premises and that no check had been made of that to ascertain whether Mr Walker's account was true. Nor had anybody been asked whether they could confirm or deny any of his contentions.

The Tribunal considered that the Appellants had a genuine belief that Mr Walker had stolen goods on 24 October but they considered that this was not a reasonable belief formed after an appropriate investigation. They said that the Appellants did not carry out a proper investigation into what had taken place at the store on 24 October. They considered that it was clear from Mr Aston's evidence that Mr Aston thought that once Mr Walker had accepted that he had removed the goods from the store without paying, he must have stolen them and dismissal was the only possible outcome. They considered that Mr Aston had not taken into account the lax application of staff purchase procedures. Nor had he thought it worthwhile investigating to see whether the explanation was true. For Mr Aston, dismissal was the only outcome.

The Tribunal went on to mention one or two other respects in which they were concerned about the Appellants' conduct of the disciplinary procedure. They considered that inadequate consideration had been given to the fact that Mr Walker had 47 years of exemplary service behind him. They considered that a reasonable employer should have investigated the possible mitigating circumstances behind the alleged offence of theft.

Finally they reiterated their conclusion that this dismissal was, in their view, unfair, because of the inadequacy of the investigation into Mr Walker's explanation. They went on to say that Mr Walker had accepted that he knew that he should not have removed the goods on a Saturday evening without paying for them and he knew that to do so was contrary to the rules. They said this:

"The tribunal has given the matter careful consideration and concludes that in those circumstances he did contribute to the respondents action and, bearing in mind his knowledge of the retail industry and the importance which it attached to security rules, it is just and equitable to assess the extent of that contribution at 10%."

Mr Thomas, who has appeared for the Appellants, contends that the Tribunal's decision is perverse. He does not suggest that it is perverse in the sense of being unsupported by evidence, nor indeed could he do so. We have seen the Chairman's Notes of Evidence and it is clear that the findings are supported by evidence. He submits rather that the Tribunal's conclusion was such that no reasonable Tribunal could have reached.

He submits that several of the criticisms made by the Tribunal of the employers' conduct cannot be justified. Before we enumerate those criticisms and deal with them individually it is right to say that we accept that some of the points of criticism made by the Industrial Tribunal of the employers' conduct have very little weight. We take as examples, the first two criticisms pointed to by Mr Thomas. The Tribunal, as we have indicated, expressed concern that the search of Mr Walker was not carried out at random. We agree with Mr Thomas that that is not a matter of valid criticism. If an employer has ground to suspect that an employee has taken goods from his shop without paying for them, he must be entitled to conduct a search even though the disciplinary procedures provide that searches will be conducted at random. Second, Mr Thomas is critical of the Industrial Tribunal when they express concern that Mr Walker was not asked if he had Company property in his possession. He suggests that it was obvious to everybody that Mr Walker did have Company property in his possession. We agree that no real criticism can be made of Mr Evans for not asking if Mr Walker had Company property in his possession.

Mr Thomas submits that the Tribunal were not justified in criticising Mr Evans for not asking Mr Walker for his explanation there and then in the car park on 24th October. It is submitted to us that Mr Evans was entitled to reach the conclusion that he did, namely that Mr Walker had intended to steal these goods, because the circumstances in which he was caught spoke clearly of his guilt. Mr Thomas submitted that the evidence was virtually conclusive at that stage. He drew our attention to the hiding of the leg of lamb in the refrigerator and the searching for a receipt before the admission was made that the goods had not been paid for.

We can see that Mr Evans had substantial grounds for being deeply suspicious of Mr Walker's conduct on that day but we can well understand the Tribunal's conclusion that as a reasonable employer, Mr Evans should, nonetheless, have asked what the explanation was, so that he could investigate it before the disciplinary hearing.

The next criticism made by Mr Thomas follows immediately from that. The Tribunal was critical of the disciplinary hearing because no attempt was made to investigate the explanation Mr Walker then gave. Of course, if Mr Evans had found out what the explanation was, either on 24 October or soon afterwards, there may have been no need for an adjournment for further investigation part way through the disciplinary hearing, but the Tribunal took the view that, as that was the first time that the employers had heard Mr Walker's explanation, it was incumbent upon them as reasonable employers to make some enquiry as to whether or not it was true. We consider that the Tribunal were entitled so to criticise the employers.

Mr Thomas submits that there was nothing to investigate after this explanation had been advanced. We will return to that in a moment but before doing so it is significant to observe that there had been a dispute at the Tribunal hearing as to whether this explanation was ever put forward at all by Mr Walker. It was not accepted by Mr Aston that Mr Walker had ever put forward the defence of "no dishonesty - I intended to pay on Monday". The Tribunal found against the employers on that issue and in so doing there is little doubt in our mind, that they were influenced by the paucity of the notes which were taken by the Company at the disciplinary hearing.

In any event the Tribunal accepted that Mr Walker had indeed put forward that explanation and it was common ground that in the short adjournment during the disciplinary hearing, no further enquiries were made. Would there have been any point in such enquiries? Mr Thomas submits not. The Tribunal plainly thought that there would have been although they have not set out any particular example of the way in which they think further enquiries might have affected the outcome. In the course of argument it was suggested by this Tribunal that an investigation into the truth of Mr Walker's claim, that he brought the goods back into the store from the car park, might well have thrown some light onto the honesty of his intention. Mr Thomas accepted that that was so.

We consider that it was open to the Tribunal to criticise these employers in the way that they did for not finding out either from other members of staff, or from the video tape evidence, whether what Mr Walker had said was true. They could reasonably consider that such an investigation might well have affected Mr Aston's view of Mr Walker's honesty.

It is fair to say that some of the Tribunal's other points of criticism do not add a great deal, if anything, to their decision. In particular we accept Mr Thomas' point that it would not be feasible for an employer who has concluded that his employee has acted dishonestly to investigate matters of background which might provide mitigation. In this case Mr Walker had denied any dishonesty so it would be impracticable for the employer to investigate mitigation for that dishonesty, once the finding had been made.

In summary therefore, we accept that the Tribunal has mentioned a number of criticisms which carry little, if any, weight but in our judgment the inclusion of those in their reasons does not undermine the validity of their central conclusion which was that this dismissal was unfair because the employer had made no attempt to find out whether Mr Walker's explanation could be true. A reasonable employer would have made such enquiries before concluding that Mr Walker had acted dishonestly.

As a separate ground of appeal, Mr Thomas seeks to attack the finding that Mr Walker contributed to his dismissal to the extent of only 10%. He submits that 10% is the minimum finding that could be made and that it is virtually derisory. We should, he submits, put that finding aside and substitute our own assessment of Mr Walker's contribution to his dismissal.

It is clear that the Tribunal came to the conclusion that Mr Walker was not dishonest. That they were entitled to do when assessing compensation under sections 73 and 74 of the Employment Protection (Consolidation) Act 1978.

In those circumstances it appears to us that if the Tribunal took into account this man's 47 years of service and his exemplary record, they were entitled to conclude that his admitted breach of the Company Rules should be viewed at the lower end of the scale of seriousness in misconduct. Although we accept that the finding of 10% is indeed the lowest likely finding of contribution, we do consider that it lies within the Tribunal's discretion in this case and cannot therefore be said to be perverse.

There was, on the Notice of Appeal, a further issue in respect of the assessment of compensation but that has been expressly abandoned by Mr Thomas. There is also an issue under the Wages Act 1986 to which we have not yet made any reference but we anticipate that in the light of our findings on the main issue in this appeal that argument will not now be pursued and I see that that is the case.

This appeal is therefore dismissed.