United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 1343_94_1302

Appeal No. PA/1343/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 13th February 1996

THE HONOURABLE MR JUSTICE MUMMERY (P)

(AS IN CHAMBERS)

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SCOTTISH & NEWCASTLE RETAIL LTD          APPELLANTS

MR F MURPHY          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MR P NICHOLLS

(of Counsel)

Hewitson Becke & Shaw

Solicitors

7 Spencer Parade

Northampton

NN1 5AB

For the Respondent MR J COPPEL

(of Counsel)

Denniss Matthews

145 Annerley Road

London

SE20 8EG


 


MR JUSTICE MUMMERY (PRESIDENT): This is an application by Scottish & Newcastle Retail Ltd to hear an appeal from a decision of the Industrial Tribunal held at London (South) on 3rd November 1994, on the basis of the summary reasons and sent to the parties on 14th November 1994. On the application Mr Nicholls appears for Scottish & Newcastle, and Mr Coppel for Mr Murphy.

Mr Murphy was employed by Scottish & Newcastle as manager of one of their public houses from March 1989 until March 1994 when he was dismissed summarily for gross misconduct. He brought proceedings in the Industrial Tribunal. Scottish & Newcastle claimed that, following an auditors' inspection, Mr Murphy had an extra keg of Fosters Lager in the cellar which he had bought in, had been banking the takings later than required and on one occasion, had banked over £100. Mr Murphy said he had been unfairly dismissed. He had not been confronted with the findings of the auditor for ten days, and had been deprived of the possibility of disputing the existence of the extra keg or providing an explanation. Those were the rival contentions in the Industrial Tribunal on 3rd November 1994.

The tribunal found that the reason for dismissal was misconduct in relation to the extra unaccounted for keg in the cellar and that there were banking irregularities. That was a reason relating to conduct within Section 57(2). The tribunal correctly directed themselves to Section 57(3) and had to consider whether the dismissal was fair or unfair. The tribunal divided. We know their differing conclusions because they are set out in paragraph 5 of the summary reasons. The majority thought there was unfair dismissal. The basis for their conclusion was that Scottish & Newcastle had failed to investigate properly the auditor's discovery of the extra keg of beer. In their view:

"A proper investigation would have included the Auditor confronting the Applicant or contacting someone from Management immediately to witness the existence of that Keg and to give the Applicant the earliest opportunity to challenge the discovery. If the Applicant had been confronted he may have been able to provide an explanation or challenge the findings and in particular demonstrate that he had not as subsequently as alleged bought a Keg of bear from a brewer other than Courage."

The minority view was that the dismissal was fair. A ten day delay to allow Scottish & Newcastle time to investigate with the suppliers whether or not they had supplied an extra keg by mistake or were short one keg by the end of the delivery, was not sufficient to render the dismissal unfair. The investigation was fairly conducted in all the circumstances. The response to the misconduct was reasonable.

The case was argued at the Industrial Tribunal by a trade union representative for Mr Murphy, and by a personnel officer on behalf of Scottish & Newcastle.

Scottish & Newcastle were dissatisfied with the decision. They appealed by Notice of Appeal which was served on 30th December 1994. The Notice of Appeal was in time. The time limit is 42 days from the sending out of the extended reasons. The problem faced by Scottish & Newcastle was that they did not comply, at the time of serving the Notice of Appeal, with the requirement of the Employment Appeal Tribunals rules, Rule 3(1)(c):

"(c) in the case of an appeal from an industrial tribunal, a copy of the extended written reasons for the decision "

should be served with the Notice of Appeal.

The Notice of Appeal does the best that can be done on the basis of the summary reasons. Three grounds of appeal are set out. First, that the Industrial Tribunal erred in deciding that the duty of an employer in a case of dismissal for misconduct to mount a reasonable investigation included a duty to act immediately upon the first suspicion of misconduct to challenge the employee with (in this case) possession of goods and property held by the employee on the employer's premises in breach of his contract of employment. Secondly, that the Industrial Tribunal erred in law in holding that the Scottish & Newcastle failed to conduct a reasonable investigation. The tribunal erred in paragraph 5 of their decision in substituting their own view of what investigation should have been conducted, rather than assessing whether the investigation actually conducted was reasonable. Thirdly, that the Industrial Tribunal's conclusion that Scottish & Newcastle had not conducted a reasonable investigation was a conclusion which no reasonable tribunal, properly directing itself in law, could have reached.

The absence of extended reasons led Scottish & Newcastle to make an application to the Chairman for extended reasons. That application was made out of time. It was refused by the Chairman at London (South) on 24th March 1995.

He gave extended reasons for refusing to give extended reasons. He said that, at the hearing of the originating application on 3rd November 1994, the respondents were represented by a personnel officer. Mr Murphy was represented by an officer of his union. Summary reasons were sent out explaining how the tribunal came to its decision. The Chairman referred to the provisions of the Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993. Rule 10 provides that the decision of a tribunal should be given in summary form, except where:

"c) such a request is made in writing by a party after the hearing either-

(i) before any document recording the decision in summary form is sent to the parties,

or

(ii) within 21 days of the date on which that document was sent to the parties"

The request, in this case, was contained in a letter to the tribunal dated 23rd December 1994, 39 days after the decision was entered in the register and sent to the parties. The request to supply extended reasons was out of time. The request was refused.

In view of that refusal, the only course open to Scottish & Newcastle was to apply for the appeal to be heard on summary reasons only.

This tribunal has a discretion to allow such a course. Mr Nicholls referred to the decision of this tribunal in Wolesley Centres Ltd v Simmon [1994] ICR 503 for the proposition that the Employment Appeal Tribunal has a discretion whether or not to allow an appeal to proceed in the absence of full reasons. The tribunal can allow such a course if there are sufficient findings of fact in the summary reasons to allow the appeal to proceed. The crucial passage in Wolesley is at page 507 where the tribunal said:

"that there is no general principle that the absence of full reasons makes an appeal non-justiciable,"

The test is whether the effect of non-compliance with Rule 3(1)(c) makes it impossible to hear the case and to do justice on the appeal.

Mr Coppel, for Mr Murphy, did not dispute the existence of that discretion.

The case turns on how I should exercise that discretion.

Mr Nicholl's argument was that the tribunal reached clear conclusions about the reason for the dismissal. The critical part of the decision, which gave rise to a difference of opinion, was on a narrow issue of the quality of the investigation by Scottish & Newcastle as the employer. The difference in approach between the majority and the minority, explained in paragraph 5, is sufficient to indicate to this tribunal the essential facts on which the tribunal based their decision. The essential facts are that in this case there was a ten day delay in the investigations. The difference between the majority and the minority was whether there should, (the view of the majority) be immediate confrontation of the alleged misconduct by the employer with the employer, or whether a ten day delay was reasonable for the purposes of investigations with the suppliers. It is clear from paragraph 5 of the decision that the majority had misdirected themselves in law on the question of what was a reasonable investigation. They took the wrong approach of substitution. It would be possible, on the appeal, to argue that there was an error of law in the decision. He would win on that point, and would ask this tribunal to substitute for the finding of unfair dismissal a finding of fair dismissal. Or, if the appeal were allowed, and he failed to persuade this tribunal to substitute its own decision, the matter would be remitted to a different Industrial Tribunal for them to rehear the case. To sum up Mr Nicholls said that there is no magic in calling reasons "summary" reasons, if in fact that they are sufficiently extended to enable the appeal to be argued. We could see from these summary reasons, (five paragraphs), that extended reasons were not necessary. The reasoning process of the majority is set out in the summary reasons. It is plain, from the way in which they are worded, that there was an error of law which led them to the erroneous conclusion of unfair dismissal.

I have given full consideration to those points, and also to the fact that, as Mr Nicholls accepted, there is really no excuse for the failure of Scottish & Newcastle's then representative to apply for extended reasons in accordance with the provisions of Rule 10 of the Industrial Tribunal Rules. That is a relevant factor to the exercise of the discretion. Mr Nicholls submitted that it was of limited relevance. The important point was whether this appeal is justiciable in the absence of extended reasons.

I have reached the conclusion, with little hesitation, that it would be wrong to allow this appeal to proceed in the absence of extended reasons.

The factors which I have taken into account in this conclusion are these.

First, the discretion should only be exercised in exceptional circumstances. The purpose of summary reasons is simply to state the result with a brief explanation of the conclusion that a dismissal was fair or unfair. In most cases it would be impossible on the basis of what are described as summary reasons to mount an argument that there is an error of law in the decision.

Secondly, I take into account the fact that I have not been given any explanation, let alone any excuse, for the failure of the representative of Scottish & Newcastle to ask for extended reasons in accordance with the Rules.

Thirdly, (I regard this as the most important factor) the summary reasons do not state any findings of fact. They state the issues in the form of rival contentions; and they state the conclusions on those issues. During the course of this hearing I asked the parties to find out who gave evidence to the tribunal. I was told that there was before the tribunal a bundle of documents which contained material relevant to the investigation point. I was also told that three witnesses gave evidence for Scottish & Newcastle, Miss Hurst, Miss Roberts and Mr Frizwell. Two witnesses gave evidence on Mr Murphy's side, Mr Murphy and his wife. I do not know, and if we only have summary reasons, the full tribunal hearing an appeal in this case will never know, what evidence was given by any of those witnesses, or more importantly, what factual findings were made by the tribunal on the basis of that evidence. It is not possible, in the absence of agreement between the parties, to decide a case simply on the basis of a bundle of documents. Documents only come to life when oral evidence is given of the matters recounted in them.

This application should be refused, because there are no findings of fact on which any argument can be based that the investigation, carried out by Scottish & Newcastle in this case, was a reasonable one. It may be possible, as Mr Nicholls has skilfully demonstrated, to criticise the way that reasoning is worded, particularly if it is in a compressed form of summary reasons. But it is impossible for this tribunal to make a decision whether a Industrial Tribunal has reached a conclusion which is in error of law without knowing what facts they found. This is specially so, when the question is whether something is reasonable or not. In this case the critical question is to whether an investigation is reasonable or not. You cannot know whether an investigation is reasonable or not without knowing what was done, when it was done, by whom it was done and so on.

In those circumstances, I accept the submission of Mr Coppel that it is impossible to adjudicate on this appeal without a full account of the findings of fact made by the tribunal on the question of investigation.

In my judgment, if I allowed this appeal to continue, there would be a real risk of injustice to Mr Murphy. He has had his case heard. He has given his evidence. His wife has given evidence. Scottish & Newcastle witnesses have given evidence. If this appeal is allowed to continue it will be unjust to him to prolong the case, particularly if it results in the appeal being dismissed. It would also be unjust to him, even if the appeal were allowed. The consequence of the appeal being allowed would almost certainly be to subject him and everybody else to a further hearing in the Industrial Tribunal in nine months to a years time. That tribunal would have to deal with events which occurred as long ago as March 1994. Why would he be exposed to that position? The only reason he would be exposed to that position is because of the failure of Scottish & Newcastle's then representative to do what is required by the Rules, and ask for the extended reasons at the time when the summary reasons are given or within 21 days.

For all those reasons, this appeal should not be allowed to proceed any further. I refuse to grant the application to allow it to proceed on summary reasons. Subject to any submissions that may be made, the consequence of that reasoning is that this appeal must be dismissed for non-compliance with Rule 3(1)(c) of the Employment Appeal Tribunal Rules.