United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 327_94_3103

Appeal No. EAT/327/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 31 March 1995

THE HONOURABLE MR JUSTICE BUCKLEY

MRS E HART

DR P D WICKENS

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LAURA ASHLEY LTD          APPELLANTS

MR M STEAD          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR R GREENING

(Of Counsel)

Laura Ashley Ltd

150 Bath Road

Maidenhead

Berkshire

SL6 4YS

For the Respondent MISS S MORRIS

(Of Counsel)

Millhouse & Rumble

New Oxford House

22-24 Halford Street

Leicester

LE1 1JB


 


MR JUSTICE BUCKLEY: Mr Michael Stead was employed by Laura Ashley Ltd, latterly as Finance Director to their Australian subsidiary. He was dismissed on 13 April 1993. He claims that the dismissal was unfair and took the case to the Industrial Tribunal at Reading, in January of last year. The Tribunal, by a majority, upheld the complaint and held the dismissal was unfair. The Company, Laura Ashley Ltd, now appeals to this Tribunal.

What gave rise to the dismissal, as found by the Tribunal, was certain financial irregularities. There was an issue before the Tribunal, as to whether that was the reason for dismissal, or whether it was a case in which the Company were looking for a reason in any event, and used this as an excuse. The Tribunal found that as a fact, and that matter is not challenged on appeal. The financial irregularities themselves were not, so far as we can see, in dispute. Mr Stead admitted them. First of all, that he had taken three sums of $300 Australian dollars from petty cash, which he had not repaid. Those were unauthorised actions. He was not entitled to take that money. It was not suggested before the Tribunal that he was dishonest, in the sense that he was not planning to repay them. Mr Stead insisted that he was and it seems that was accepted. Nevertheless there were three unauthorised takings of Company money. There was an advance to him in excess of $500 dollars, in relation to a business trip with his family. That should have been repaid to the Company but had not been. Further, there had been an agreed advance, some Australian $1,750, in relation to purchase of furniture by Mr Stead. A portion of that was unaccounted for and receipts or invoices in relation to that balance, were unavailable. That was also unresolved. Those were the facts behind the dismissal.

It must be borne in mind, that Mr Stead was, at the time, the Finance Director of the subsidiary. On his return to Heathrow, Mr Stead met a Mr Willis, who discussed those matters with him at the airport and indicated to Mr Stead that there would need to be a disciplinary meeting. That was held on 12 April. A Mrs Lincoln presided and the upshot was that the Company regarded, as Mrs Lincoln stated, that sort of conduct as gross misconduct and that the employment would have to be terminated immediately. She confirmed that in a letter of 14 April, which referred to the taking of unauthorised advances, which were still outstanding and the non-reimbursement of fares, in relation to the business trip. Mr Stead appealed but the appeal was unsuccessful. Those facts we take from the Reasons given by the Tribunal. They were reserved Full Reasons and as we mentioned, the basic facts were not significantly, or indeed, at all, in dispute.

The Tribunal went on to find, (and this we have already mentioned) that the reason for dismissal was a matter of conduct: that the Company had carried out a full and fair investigation of the matters and gave Mr Stead every opportunity to respond to the allegations. That takes us to the last two or three paragraphs of the Reasons, which are the ones which really give rise to this appeal:

"18 Where the majority, the two lay members, differ from the minority is over the question whether dismissal was in the circumstances within the band of reasonable responses of an employer, as opposed to the imposition of some other penalty. The majority say it was not, and that to destroy Mr Stead's good name as an accountant by a finding of gross misconduct, was to impose a punishment which did not fit the crime. They would have dismissed Mr Stead with full notice, because he was not dishonest, but was misguided."

"19 The minority, while agreeing that there was no evidence of dishonesty, believes that it is not for the Tribunal to substitute its decision for that of management and that peremptory dismissal for gross misconduct is within the band of reasonable responses as Mr Stead was Finance Director of the Australian company from whom management were entitled to expect the highest standards of probity, and the dismissal was not unfair."

The final paragraph referred to a discount of 30% which the Tribunal made, because Mr Stead had contributed, in their view, to his own downfall.

Mr Greening who has appeared for the Company, submits that the Tribunal, through the majority, mis-directed itself. He invites us to read 18 and 19 together, in support of that submission. In short, what Mr Greening urges, is that the majority, whilst indicating that dismissal was appropriate, have held that it was unfair in this case. Summary dismissal was not justified on the grounds of gross misconduct. Mr Greening says that is a mis- apprehension of the law. He referred us to two cases, Treganowan v Robert Knee & Co.Ltd. [1975] ICR 405 and BSC Sports & Social Club v Morgan [1987] IRLR 391. It is clear from those cases, in particular, the latter, that Mr Greening's submission as to the position in law, is correct. Miss Morris who has appeared for the Respondent, Mr Stead, accepted that. In our view quite rightly.

One thing is clear to us, from paragraphs 18 and 19, that it was indeed the view of all three members of this Tribunal, that dismissal on the ground of conduct, was or would have been reasonable. By reasonable we mean a reasonable reaction of a reasonable employer. The majority appear to have held as they did, namely that in this case the dismissal was nevertheless unfair. They felt that to destroy Mr Stead's good name as an accountant, by a finding of gross misconduct, was a punishment that did not fit his crime. It is a finding which echoes the reaction of the Tribunal, in at least one of the cases to which we have referred and it is an approach to these matters which the courts have said is wrong. The question for the Tribunal is whether dismissal on the grounds of conduct is reasonable, not whether that dismissal should take the form of summary or on notice. It does seem to us that there is, on any view, some confusion of thought evident in paragraphs 18 and 19: but in the end, we also think sufficient evidence of a mis-application or misunderstanding of the legal principles to which we have referred. In other words, a mis-direction.

It is not clear whether the Tribunal was referred to the two cases which we have mentioned. So far as we can tell, they were not. They themselves, make no reference to them. Against that, Mrs Morris had urged us to read the paragraph rather differently. She suggested and urged on us that the first sentence is does nor evidence an (?) incorrect approach in law and that the last sentence was not really relevant, because the views of the majority as to what they would have done, on general principles, is not something it was competent for them to comment upon or rely upon, in any way. That of course is right, so far as it goes but we feel that the scheme of the Reasons and those last paragraphs as a whole, must be read in context. We have indicated the way we read them, and the view that we have come to.

That leads us to decide that this Decision cannot stand as it is. The final question is whether we remit the matter to this Tribunal or another, or whether if we think it proper, we substitute our own answer. It is manifest from what we have already said, that the facts have been clearly found, indeed they were not in dispute. No further factual enquiry is called for. In those circumstances, really, all that is outstanding is the proper answer on those facts. To remit this matter would undoubtedly cause considerable expenditure of both time and money, which we cannot see as being in the interests of either party. We were referred finally to the case of Hellyer Bros Ltd. v MacLeod [1987] ICR 526, in particular at page 547. This is a Court of Appeal decision and on this particular point (page 547) the Court referred to an extract from Sir John Donaldson M.R. in Dobie & Burns International Security Services (U.K.) Ltd. [1984] ICR 812. That was a quotation dealing with a mis-direction and what the proper approach should be by an Industrial Tribunal. The Court of Appeal went on to say that statement however, must be read subject to an implicit qualification, correctly stated by Mr Justice Waite. We do not think it is necessary to recite the quotation from Sir John Donaldson, which will be found on that page, but the qualification to which the Court of Appeal referred, is directly in point:

"If we are satisfied that a conclusion reached as a result of a mis-direction is plainly and unarguably wrong, upon the facts found by the Industrial Tribunal and those facts do not require further amplification or reinvestigation then we are entitled and bound to substitute our own conclusion as to what those findings require in law"

That qualification is material to the present case. The facts do not require further amplification or reinvestigation. They have been found clearly and indeed were not in dispute. As we have said, it does seem to us, clear, that all three members of this Tribunal would have found dismissal on the grounds of conduct, to be reasonable. The reason why the majority found as they did was, in our view, because of a misunderstanding of the law. Finally, in order to substitute our own answer, are we satisfied that the actual decision was clearly and unarguably wrong? The answer to that question is, yes we are. We have not the slightest doubt that the conduct found here perpetrated by a Finance Direct, is conduct which justifies dismissal. That does appear to have been the view, of all three members of the Tribunal.

Whilst a perversity was not raised, it was hinted at, but not properly raised in the grounds of appeal, nor developed before us. We feel in this particular context able to comment that the conduct, in question, unarguably, amounts to gross misconduct, within the meaning of the Company's own disciplinary code. This is a document which was apparently before the Tribunal and has been placed before us. Amongst the examples of gross misconduct, one finds the following:

"Actions or performance which would lead to the Company's loss of trust and confidence in the employee's ability to fulfil the role for which they were employed.

Unauthorised use of Company ...property...

Unauthorised possession of Company property...

Serious negligence

Any breach of established conditions of employment..."

The conduct of Mr Stead, as found by the Tribunal, seems to us clearly and unarguably to fall within one, if not all, of those definitions. Therefore, even if this case were properly looked at in the narrow form of gross misconduct only, we think the Decision was plainly and unarguably wrong. It is in those circumstances, and on the authority which we have cited, that we think the only sensible and practical view here, is for us to substitute our answer on the facts as found, as a matter of law. This dismissal was not unfair. We allow the appeal.