United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 1228_94_1112

Appeal No. EAT/1228/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 11th December 1995

HIS HONOUR JUDGE H J BYRT QC

MR J R CROSBY

MR P M SMITH

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(1) MISCO COMPUTER SUPPLIES LTD

(2) MISCO LTD          APPELLANTS

MR I D SLATER          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR R HOWE

(Of Counsel)

Nabarro Nathanson

50 Stratton Street

London

W1X 5FL

For the Respondent MR S WILSON

(Of Counsel)

Palmer Wheeldon

Daedalus House

Station Road

Cambridge

CB1 2RE


 


JUDGE BYRT QC: This is an appeal against a decision promulgated on 2 November 1994 by the Bedford Industrial Tribunal, when they unanimously held that the Applicant, now the Respondent, had been unfairly dismissed.

The situation is that, in September 1993, the Respondent, Mr Slater, was the General Manager of the United Kingdom operations for the first Respondents. Until 23 December 1992, the first Respondents was a subsidiary of a company called Electro Components Plc. Their operations in Europe were controlled by a Managing Director based in Milan called Mr Sangiovanni. The company operated a bonus scheme which related to senior and first-line managers, entitled the Group Bonus Scheme. For the more junior staff, there was a scheme called the Local Bonus Scheme which was in turn authorised by local general managers. Mr Slater was a senior member of the organisation and, as such, would ordinarily have been eligible to receive a bonus from the Group Bonus Scheme, and not the local Bonus Scheme.

On 23 December 1992 the Respondents sold out to an American company and Mr Sangiovanni would have lost his overall authority as Managing Director for the European operation, but the bonus schemes to which I have referred continued to operate. In April 1993, it came to the attention of the Financial Director of the first Respondents, a Mr Biggs, that certain payments had been made to Mr Slater out of the Local Bonus Scheme. In July, Mr Biggs thought it appropriate to make enquiry of Mr Sangiovanni to ascertain whether perhaps he had authorised Mr Slater to make these payments to himself. As he reported to the Industrial Tribunal, the information he got was that Mr Sangiovanni had not authorised such payments.

On the strength of this information, and as far as we can see, on that information only, Mr Biggs had a meeting with Mr Slater in the presence of the Respondents auditors on 7 September 1993. At that meeting, Mr Biggs raised the matter of the two payments, one of which had been made in May 1992 and the second in April 1993. Mr Biggs informed Mr Slater these payments had not been authorised and Mr Slater in response said Mr Sangiovanni had authorised those payments. It was pointed out to him that Mr Sangiovanni had ceased to have authority over such matters in December 1992 and in consequence, could not in any event have authorised the payment in April 1993. Mr Slater admitted that he had made a mistake in respect of that payment, but that he had made certain assumptions that as a result of having previously been authorised payment. He had assumed that he could make the payment to himself. It would seem, from the Tribunal's reasons, that he accepted that assumption was an error of judgment on his part.

In any event, the result of that meeting which in the telling of it, as I have just told it, could have been over and done with within 5 minutes, went on for 35-40 minutes. We do not have any knowledge from the Tribunal reasons as to what further transpired at that meeting. What we do know is that, at the end of it, Mr Slater was told that he should either resign or be dismissed. Mr Slater chose resignation. It is accepted by both parties that resignation in those circumstances amounted to dismissal. It is apparent, again from the Tribunal's reasons, that the Appellants paid little or no attention to these dismissal procedures. They had failed to get any written statement from Mr Sangiovanni before Mr Slater's dismissal. It would appear that they had failed to warn him [Mr Slater], in advance of the meeting on 7 September, of the nature of the meeting, and failed to give him advance notice of the charge against him.

The Tribunal, in their findings, decided that Mr Slater's dismissal was unfair. They did so on the basis that it was unreasonable for Mr Biggs to rely on the telephone call from Mr Sangiovanni and to have dismissed Mr Slater then and there. He should have suspended him whilst the Appellants got their evidential material in proper order. They attached importance to the case of Linfood Cash & Carry Ltd v Thompson in which it was stated that, in such circumstances, it was important to have the statement of witnesses in writing. The Appellants had failed to secure that and the Tribunal criticised them for this omission.

They went on to consider the question of compensation. We do not think we need to go into that in any detail because, subsequently, there was a further hearing before the Industrial Tribunal, when compensation was considered. They came to the conclusion that Mr Slater had contributed to his own dismissal to the extent of 80% and that was reflected in the reduction of the compensation payable to him.

The argument for the Appellants, advanced before us today by Mr Howe, is to the effect that the Tribunal's focus of attention was distracted somewhat by the Appellant's failure to comply with the company's disciplinary procedures, and secondly, by their failure to secure the written statement from Mr Sangiovanni, in consequence of their reliance on Linfood Cash & Carry Ltd v Thompson. Instead, he says, they should have focused their attention on the case of British Home Stores Ltd v Burchell and asked themselves the four well-known questions - (a) whether the employers, in this case Mr Biggs, had a genuine belief in the guilt of Mr Slater, (b) whether that belief was reasonable; (c) had he carried out a reasonable investigation in arriving at that belief, and (d) was the dismissal within the bands of reasonable responses of a reasonable employer. Mr Howe says had the Tribunal asked those questions, they would have taken into account Mr Slater's seniority, his making of an unwarranted assumption which resulted in a payment of cash to himself, from a fund which was meant for people of a category to which he did not belong. In those circumstances the dismissal was, he says, plainly reasonable. He says, as an addendum to that argument, that, in such a situation, the needs of an investigation would have been greatly reduced since you have the employee's admission of the error with which he is accused.

Mr Wilson on behalf of the Respondents has responded by saying that the Tribunal were right in their criticisms. The Appellants had failed even to begin to initiate the disciplinary procedures and that was against a background of many months delay. In the first instance, there was the accusation that Mr Slater had wrongfully paid himself payments in May 1992 and again in April 1993, and here was an investigation in the following September. The main evidence upon which Mr Biggs relied, namely the denial by Mr Sangiovanni of having given any authorisation to Mr Slater, had not been properly translated into a written statement which could have been given to Mr Slater in advance of the hearing. All this prejudiced Mr Slater. He went into the meeting on 7 September with no opportunity to collect his thoughts as he had not been forewarned, and indeed the delay which had occurred was further prejudicial to him because so much depended upon what had been said to him by Mr Sangiovanni, and of course his recollection of that would have dimmed over the course of time. It is true, he says, that Mr Slater had admitted making a mistake, but that was very far removed from an admission of gross misconduct. There was no investigation carried out by Mr Biggs or anyone else which might have put Mr Slater's admission into some sort of context. He says that the Tribunal clearly took these points into account and this appellate Tribunal should not disturb those findings.

We, as an Appeal Tribunal, have to say that we are somewhat handicapped in this instance by the paucity of findings of fact by the Tribunal. When one bears in mind that the hearing before that Tribunal lasted some 3 days it is a handicap to us not to know more clearly the way in which the Tribunal approached the evidence of Mr Biggs and Mr Slater, and the circumstances of the discussion which occurred on 7 September. Put starkly, it would seem that the employers had a strong case against Mr Slater, bearing in mind his seniority, and his own admission that he had made a mistake, but notwithstanding these factors which they had well in mind, it is plain from the reasons that the Tribunal attached considerable importance to the lack of a reasonable investigation by the employers, and their failure to follow the company's disciplinary procedures.


 


Mr Howe, in reply, said that, in the circumstances in which this accusation was made, extensive investigation and indeed full implementation of the disciplinary procedures was unnecessary because the case was so obvious. However, it is plain the Tribunal did not see it that way. They stated that it was fundamental, when a person is being dismissed, that he should feel he has had, and that he should be given, a fair hearing after proper notice, with the evidence he is to be faced with, being properly prepared and got together. The Tribunal found that there was a need for investigation. We agree that, notwithstanding the fact that there were substantial delays in bringing the charges against Mr Slater, it was surprising and unfortunate that more effort had not been made to secure the evidence of Mr Sangiovanni in a more acceptable and worthwhile form than just a telephone conversation, recollected after some six weeks or so.

These views of the Tribunal were formed, as I have already said, after a three-day hearing, during which time they would have seen the witnesses and heard their evidence. In so doing, they would have enjoyed an advantage over this Tribunal who have to depend upon the extended reasons for forming a view. Having considered those reasons with care and the arguments advanced by both Counsel in this matter, we have come to the conclusion that the Tribunal's findings were findings which it was reasonable for them to make. In those circumstances, it would be wrong for us to disturb the findings of the Industrial Tribunal below and we therefore dismiss this appeal.