United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 1052_95_1502

Appeal No. EAT/1052/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 15th February 1996

HIS HONOUR JUDGE P CLARK

MR A D TUFFIN CBE

MRS R A VICKERS

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RALEIGH INDUSTRIES LTD          APPELLANTS

MR S LACHHAR          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant MR J CAVANAGH

(of Counsel)

MR N J CHRONIAS

Legal Advisor

E.E.F.

Broadway House

Tothill Street

London SW1H 9NQ

For the Respondents MR R C D REES

(of Counsel)

Messrs Cruickshanks

Solicitors

62 Derby Road

Long Eaton

Nottingham

NG10 4QP


 


JUDGE CLARK: This is an appeal by the employer against a unanimous decision of the Nottingham Industrial Tribunal (Chairman: Mr P G Pollett) sitting on 17th May 1995 that the employee, Mr Lachhar, was unfairly dismissed. Extended reasons for that decision are dated 24th August 1995.

The material facts are as follows; the respondent had been employed by the appellant for some 20 years. He performed a manual job in the warehouse which involved lifting and stacking bicycles weighing between 30-40 lbs.

On 12th September 1994 he went off sick, complaining of a painful neck. Whilst off sick he received sick pay which, on the evidence before the Industrial Tribunal, consisted of 85% of basic gross pay, to include Statutory Sick Pay.

Whilst he was off sick a fellow employee, John Buxton, thought he saw the respondent working in a shop. He reported the matter.

As a result, on 5th October 1994, Mr Wigley, the Warehouse Manager, and Sally Nix the personnel officer when to the shop. Miss Nix went in first, and her observation, put to the respondent at a disciplinary hearing held by Mr Wigley and Miss Nix on the following day, was that she saw the respondent serve a lady customer and ring into the till. She then left the shop and came back in with Mr Wigley.

The disciplinary hearing was held with the respondent represented by a shop steward and deputy works convenor.

Following that disciplinary hearing the respondent was summarily dismissed for gross industrial misconduct, the reason for dismissal contained in a letter from Miss Nix dated 7th October 1994 was:

"that the Company had reasonable grounds to believe that you attempted to defraud the Company of sick pay."

Mr Lachhar appeared against his dismissal. At the internal appeal held by Mr Ellis, the Work Personnel Manager and Mr Beale, the Distribution Manager, both Mr Wigley and Miss Nix gave evidence as did Mr Buxton. For the first time, the respondent suggested at that hearing that he had been changing the till roll for his wife, who ran the shop when Miss Nix came in, but that he had finished the job and was just standing there as she entered the shop. He said that he did not mention it at the disciplinary hearing because he had finished that job when they came into the shop. The appeal panel decided that he was serving in the shop, and dismissed the appeal.

The matter went to an external appeal, but there was failure to agree between management and union representatives at that conference.

The Industrial Tribunal found that the reason for dismissal was that put forward by the appellant and that it related to conduct. It then considered the well-known threefold test set out in British Homes Stores v Burchell [1990] ICR 303, 304D, and set out its conclusions in paragraphs 15-18 in this way:

"15. That was the evidence available to the respondents prior to Mr Wigley's decision to dismiss the applicant summarily. The respondents relied on that evidence alone. There was no further information with any other possible witness, or into the financial interest in the shop business. We have to decide whether that evidence was sufficient in the circumstances to warrant a summary dismissal of the applicant with 20 years' service based on an allegation of fraudulent conduct. The respondents did not speak to the applicant's wife, who was either the owner of the shop or a partner or the assistant Mrs Gunn who had helped in the shop from time to time and who were both present in the store at the time.

16. Having regard to the serious allegation which was being made involving an allegation of fraudulent conduct it was all the more important in the Tribunal's view to carry out as much investigation as was reasonably possible. The investigation that they carried out was over a very short duration of time, no more than a few minutes in all. Although there were three separate witness observations available, they amounted in all to no more than a few minutes. Those of Mr Wigley and Miss Nix occurred on the same occasion, 5 October and in addition there was the observation of Mr Buxton who believed that it definitely looked like the applicant in the shop on one other occasion, the precise occasion of which he could not remember. There is no evidence of any financial gain to the applicant from working in the shop. In fact the evidence available to the Tribunal is to the contrary. In our view, the respondents should have investigated that aspect of the matter, particularly when dealing with an employee of 20 years' service with no previous disciplinary warnings of any sort.

17. It was apparent to the Tribunal that the applicant had difficulty in communication and in these circumstances it was all the more important that the investigation should have been thorough and complete and the Tribunal conclude that it was not so in the ways which we have mentioned.

18. Having heard and read all the evidence, the Tribunal are not satisfied that the second and third parts of the test in British Home Stores -v- Burchell have themselves been satisfied by the respondents and therefore our unanimous decision is that the applicant was unfairly dismissed."

In support of the Industrial Tribunal's decision Mr Rees reminds us that questions of reasonableness under Section 57(3) of the Act are essentially questions of fact for the Industrial Tribunal. See Gilham v Kent County Council [1985] ICR 233. Here the Industrial Tribunal found that the employer had failed to carry out a reasonable investigation. It followed that the dismissal was unfair; it was unnecessary to consider the band of reasonable responses test referred to in Iceland Frozen Foods v Jones [1983] ICR17. The employer's reason for dismissal was that the respondent was defrauding the Company; there were no grounds, let alone any reasonable grounds, for that belief. This appeal, he says, is really an appeal on fact dressed up as law.

We cannot accept that approach. In our judgment this Industrial Tribunal's decision discloses four errors of law:

1. There is no finding by the tribunal to support their conclusion that the employer did not have reasonable grounds for believing that the respondent was guilty of the misconduct alleged. On the contrary, the evidence before the employer was that the respondent had been seen working in the shop, wearing a shop keepers coat when he was on paid sick leave. His attempts to deny that observation, late in the day, made matters worse. The employer decided that he had made up the story about changing the till roll. These were conclusions open to a reasonable employer on the material available.
2. The finding that the employer had not carried out a reasonable investigation was, in our judgment, based on a substitution of their view for that of the employer. The further investigations into the question of financial gain to the respondent goes too far. It is perverse to suggest that the employer should interview a witness, Mrs Gunn, who was not brought forward by the respondent at the internal disciplinary or appeal stage. See British Gas v McGarrick [1991] IRLR 305, Dick v Glasgow University [1993] IRLR 581. Further, at paragraph 17 of the reasons, the Tribunal appear to have placed a higher standard of investigation on this employer that the standard of reasonableness because the tribunal thought, having seen the respondent give evidence, that he had difficulty in communication. No such complaint was made during the disciplinary process, when he was represented by trade union officials throughout.
3. It is plain to us that, at paragraph 18 of its reasons, the tribunal fell into the trap of placing the burden of proof on the employer to satisfy it, the tribunal, that it had satisfied the Burchell test. Such an onus was placed on the employer under paragraph 6(8) of Schedule 1 of the Trade Union and Labour Relations Act 1974 in the Burchell case, but that onus was removed by the Employment Act 1980. There is now no burden under Section 57(3) of the Act. See Post Office Counters Ltd v Heavey [1990] ICR 1. Indeed, Mr Rees does not seek to support this self-misdirection.
4. It is equally clear that this tribunal never addressed the question of reasonableness under Section 57(3), and in particular, whether or not dismissal fell within the range of reasonable responses. See Conlin v United Distillers [1994] IRLR 169. Mr Rees submits that it was not necessary to do so. We disagree. Application of the Burchell test is not a substitute for the words of Section 57(3). See Royal Society for the Protection of Birds v Croucher [1984] ICR 604, 611G-612B.

In these circumstances we conclude that this tribunal's decision is fatally flawed and cannot stand. We have been addressed by Counsel on what we should now do. Assuming our powers under paragraph 21(1) of Schedule 11 to the Employment Protection (Consolidation) Act 1978, we have concluded on the facts as found by this industrial tribunal, and in light of the concession by Mr Rees that dismissal for the offence for which this respondent was dismissed falls within the band of reasonable responses open to a reasonable employer, that the proper course is to substitute a finding of fair dismissal. Accordingly, the appeal is allowed and a declaration to that effect will be made.