United Kingdom Employment Appeal Tribunal

BAILII case number: [1995] UKEAT 838_93_0303

Appeal No. EAT/838/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 3 March 1995

Before

THE HONOURABLE MR JUSTICE BUCKLEY

MRS R CHAPMAN

MR W MORRIS

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MR J A PETERS AND MRS E W PETERS          APPELLANTS

WETHERELLS CONTRACTS LTD T/A OLD MILL BREWERY          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MS TESS GILL AND

MR ANTHONY HAYCROFT

(Of Counsel)

Messrs Twitchen Musters Kelly

Solicitors

Alexandra Chambers

46 Alexandra Street

Southend-on-Sea

Essex

SS1 1BJ

For the Respondents MR MARTYN WEST

(Personnel Consultant)

Peninsula Business Services Ltd

Stamford House

361/365 Chapel Street

Manchester

M3 5SY


 


MR JUSTICE BUCKLEY: Mr and Mrs Peters the Appellants before us and Applicants before the Tribunal were employed by the Respondents at the Brewer's Arms Hotel, Snaith, Near Goole. It was common ground that they were as they said both employed by the Respondents. In 1992, Mr and Mrs Peters went on holiday and a relief manager took over and a Mr Foster, an accountant, with the Respondents or certainly on their behalf was put in to make various enquiries. As a result of what he was told he looked, in particular, for certain larger or largish items sums of money, which may not have been put through the books properly. At all events he identified certain irregularities and there then followed a series of meetings between the parties. The upshot was that Mr Peters was dismissed as the Tribunal found for misconduct. The Tribunal went on to find that Mrs Peters was not dismissed but that her employment came to an end, really by tacit agreement between the parties, and they found therefore no dismissal in the case of Mrs Peters. Both Mr and Mrs Peters appealed and have been represented before us. On behalf of Mr Peters, Ms Gill has sought to challenge the finding as really unsupported by the evidence. In other words, that no reasonable Tribunal could have reached the views this one did on the evidence before it. Ms Gill recognizes that she has to go as far as that because of course it is only a point of law which affords a ground of appeal to this Tribunal.

Consequently we have the Chairman's notes of evidence before us to which some reference has been made. In the end, Ms Gill most helpfully reduced her submissions to two clear points. The first one is based on the document R1, which is a written warning and by reference to the findings, Ms Gill submitted that in effect the matters of misconduct that were alleged and complained about by the Respondents were on the table and were dealt with by the warning and that there is no evidence and no findings as to facts after that to justify the subsequent dismissal. A second submission to some extent overlaps with that one, was that there simply was no sufficient identification by the Tribunal of what the act of misconduct was that founded the dismissal or justified the dismissal as opposed to matters covered by the warning. We of course have considered that, assisted by the notes of evidence.

At the end of the day we are unable to accept those submissions, it seems to this Tribunal particularly having regard to the reasons which of course we have, that the sequence of events, and this is no more than a summary drawn from the reasons, was as follows: that after Mr Foster had discovered what he believed to be irregularities, there was as we have said, a series of meetings. The first effective one as found by the Tribunal was 18 June and at that stage on the Tribunal's findings, what had happened was that a sum of money - cash - so far as we can make out had been found in the safe which had not been banked. There were other book-keeping irregularities which had also been unearthed and Mr Peters explanation was essentially that he did not accept the book-keeping irregularities. As to the money in the safe, he had left instructions for that to be paid in whilst he was on holiday and it had not. That led to the warning, and that is reasonably clear from the terms of the warning itself which refers to incorrect book-keeping and withholding of surplus money. The description of surplus money is perhaps odd but this was really money that should have been paid in as Mr Peters agreed. In any event the warning was given and there is a clear finding by the Tribunal at the end of paragraph 6 of their reasons, that Mr Morgan who was handling matters for the Respondents, was not yet in receipt of certain information from Mr Foster, which proved decisive in the end. That information was of two deposits paid by customers, one for £300 and one for £120, which deposits had been paid by cheque apparently, and as it eventually came to light, paid into the till in exchange for cash and then banked, so that the bank accounts and such documents would balance with the till, but of course cash had in that way been extracted. Now whether some or all of that cash is included in the sum in the safe of £432.10 we referred to is not particularly clear from the findings but in our view it is not decisive.

At all events the Tribunal finds that after the warning had been given which was on 22 June, a written warning, there were further meetings. Further information had come to light, the investigations were continuing and Mr Morgan received the information about the deposits from Mr Foster. Meetings that were set up had to be adjourned because Mr Peters had not been given sufficient warning of the points that he was going to be asked to explain but eventually an effective meeting did in fact take place and it is quite clear from the Tribunal's findings again towards the end of paragraph 7, that:

"What Mr Wilson and Mr Foster were seeking to establish was where, if at all, the £300 and £120 deposits had been recorded in the cash book."

as we have said, that money had found its way into the bank but it was not in the cash books and the conclusion that the Tribunal reached was that the belief of the Respondents was that the money which had been paid in the form of two cheques, had been paid into the bar till in exchange for cash, i.e. cash taken by Mr Peters.

At these later meetings, or at the last one in particular, an explanation from Mr Peters was sought and the Tribunal found that such explanations as he provided did not impress Mr Wilson who was also involved for the Respondents or Mr Morgan and that they discussed the matter over lunch and resolved that Mr Peters contract of employment should come to an end. Their conclusion expressed in paragraph 10 was that they were unable to find that the Respondents procedure was unfair and in all the circumstances they concluded that Mr Peters was dismissed for misconduct and that that was fair. Now that is a very brief resumè of the relevant findings by the Tribunal, as we say we have been referred to the underlying notes of evidence and have considered those, but it seems sufficiently clear to us from that chronological review that there certainly were significant further developments after the warning had been given. There was an ongoing investigation into the various book-keeping irregularities which had been initially denied by Mr Peters but with ultimately no satisfactory explanation being put forward and in particular the two deposits. It was only at the final meeting that those were discussed and Mr Peters was unable to explain how they had been dealt with in the books and it is quite clear from the evidence and the cross-examination that there was a lot of to-ing and fro-ing between the parties on that. Mr Peters saying that they were in the books, they had been apportioned in some way and the accountant Mr Foster and Mr Morgan and Mr Wilson being unimpressed by those explanations.

It seems to this Tribunal that matters were progressive and certainly there was more than enough after the warning to support the Tribunal's finding. It is not for us to say whether we would have made the same finding or not. In saying that, we give no hint that we would have differed from the view the Tribunal took, we simply emphasise that it is not for us to form a view on the merits, that was for the Tribunal. As to the allegation that the misconduct was not sufficiently identified, it seems to us it was very clearly identified in the short passages to which we have referred. The misconduct was the irregularity in the book- keeping and in particular with relation to those two deposits, that they had apparently been exchanged for cash and not entered up in the books in any way that even the Respondents accountant could trace let alone anyone other than a qualified accountant.

Again, as we say, bearing in mind that it is only a point of law that is going to found an appeal to this Tribunal, we are unable to find that any point of law has been established. It is to our mind clear that the Tribunal adopted the right legal approach as I think Ms Gill was disposed to accept and we are unable to accept either of her submissions for the reasons we have indicated.

Now as to Mrs Peters, Mr Haycroft who has appeared for her makes two submissions, which again are interrelated, that there is no evidence of termination by a tacit agreement to terminate, and there was evidence of a dismissal and that because of that the findings of the Tribunal are perverse and Mr Haycroft is referring to the findings in paragraph 11. In paragraph 11 the Tribunal find that there was no evidence that she was dismissed and that they accept what they understood to be a submission of Mr Cutt that there was a tacit agreement by the parties that it should come to an end. There is no doubt that Mr Cutts did make some submission on tacit agreements in connection with the employment coming to an end, it is not entirely clear from the notes of evidence precisely what the submission was. It is recorded in this way, "tacit agreement by the parties that contract employment came to end." Now that is not, strictly construed, necessarily saying that the parties tacitly agreed to end the employment as opposed to simply an agreement that it had actually come to an end.

If one looks at the submission in context, it becomes a little clearer that Mr Cutts could not really have been saying that there was a tacit agreement to end the employment simply because Mr Peters employment had ended, because he is recorded in the notes as putting forward a submission of constructive dismissal. At all events we return to the findings of the Tribunal. The facts they found in support of their conclusion that the termination was by mutual agreement and all that is to be found in paragraph 11. The relevant parts are: there was no evidence before the tribunal that Mrs Peters was dismissed and neither she nor anybody on behalf of the Respondent ever claimed as much. (We have just indicated that Mr Cutts does appear to have claimed at least constructive dismissal.) Quite clearly however her employment with the Respondent came to an end. We have to construe how this occurred. We accept the evidence of Mr Morgan that it is common practice in the brewery trade that if the employment of a male manager terminates, his wife, if he is married, goes with him. (I have omitted a few words.) In his submission to the tribunal Mr Cutts suggested there was tacit agreement by the parties that Mrs Peters contract of employment came to an end upon the termination of her husband's employment, we think that that is correct. Bearing in mind the custom and practice in the trade and all the circumstances of this case, thus we find there is no dismissal.

Now all the Tribunal are there identifying apart from the comment of Mr Cutts to which we have already referred, is a common practice in the brewery trade. As Mr Haycroft argued even if there was a common practice in the brewery trade, that is no more than a first step, even if a fairly significant one, down the path towards a finding or a proper finding, that the contract was terminated by tacit agreement in the sense that it had been tacitly agreed, because of that common practice, that is what would happen in this particular case. Search as we have through these reasons and indeed the evidence to see whether there was any investigation or any evidence before the Tribunal as to the terms upon which Mrs Peters was employed, or as to any other basic facts from which a conclusion that it was the type of contract that would automatically come to an end with her husband's, we have been unable to unearth any more than that which we have just recited. It is particularly noteworthy for example that when Mrs Peters gave evidence, all she said on the topic herself was that she was in their employ, that is in the Respondent's employ, she gave details of what her job involved and so forth. She said in express terms, "I did not resign, nobody every asked me, told me or let me know what was going, it was as though I did not exist", and there was no cross-examination on behalf of the Respondents or by the Tribunal. So there is absolutely nothing there about the terms upon which she was employed or what was tacitly understood or expressly agreed. The only other evidence that anybody pointed to was of Mr Morgan and he did say in relation to Mrs Peters, as recorded by the Chairman, "common practice in brewery trade that if a manager leaves his wife goes with him", i.e. whether resignation, dismissal or otherwise. There is also a note, "no communication with Mrs Peters", which we take to be a reference to the end of the story and nothing else. So it is plain to us that there was absolutely no evidence here as to how the contract with Mrs Peters or even Mr and Mrs Peters was entered into, insofar as any discussion or any agreement as to the type of contract Mrs Peters would have. There was some evidence as to how the remuneration was adjusted, the parties were not entirely in agreement about that and there are no specific findings on it and we have concluded that there really was no evidential or factual basis in this case upon which a Tribunal could, as a matter of law, make a finding that there was a termination by agreement. The only direct evidence on the point came from Mrs Peters and she denied it. We were referred to an exchange of letters in August, the 13 August was the first, in which Mrs Peters wrote in these short terms: "in view of my husband's enforced resignation please qualify my position in writing." The answer was simply, that: "your husband resigned following discussions on irregularities and so forth, at the time of his appointment as manager it was agreed that you as his wife would be paid an honorarium from his salary to minimize tax liabilities. As a consequence of the above this situation no longer appertains." There is nothing or no sufficient evidence from that to support the finding made. Again had this matter been investigated, it is not for us to say which way it would or might have been resolved. Whether it will lead to any significant result either way in this case equally we are unable to judge, we have not got any more evidence. But what does strike this Tribunal is that in principle it is a point of some importance. It may or may not prove to be in this case but it is in our view of considerable importance that where a couple, whether husband or wife or not, are employed in a job such as this, and this is not the only type of employment in which it arises, it is important to clarify at the outset the basis of that employment and what is to happen in the event that perhaps the major worker of the two, loses his or her job. It follows from that, it must be important before a Tribunal reaches the conclusion that because one has been dismissed the other by tacit agreement leaves quietly, a proper investigation into the basis of the contract is carried out, and we regret to say we cannot find that there was such an investigation here and there is no evidence in our judgment to support the conclusion arrived at. So in the result we would allow the appeal in the case of Mrs Peters and we would dismiss the appeal in the case of Mr Peters. As to what should happen in Mrs Peters case, we heard differing suggestions from Counsel, Mr West, on behalf of the Respondents and Mr Haycroft. Our conclusion is that the Respondents did have their opportunity before the Tribunal to put forward any alternative case on justification for dismissal, or indeed to call such evidence as they may have wished on the formation of the contract and the terms of it. We do not think it appropriate that that should all be reopened now. That leads to this position that we have found that there was no evidence to support the conclusion the Tribunal came to as to tacit termination, it follows that Mrs Peters was dismissed and the Tribunal have included in their reasons the clearest possible finding that if she was dismissed it was unfair, both procedurally and in substance. Since we see absolutely no reason to differ from that, the result is that Mrs Peters was unfairly dismissed and the matter must go back to a Tribunal to deal with the question of what, if any, award is appropriate to be made. That is a matter that again will require presumably some further evidence. So it only I think remains to thank all three Counsel very much for their assistance.