United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 493_95_2601

Appeal No. EAT/493/95

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 26 January 1996

THE HONOURABLE MR JUSTICE TUCKER

MR E HAMMOND OBE

MRS J M MATTHIAS

---

BRITANNIA BUILDING SOCIETY          APPELLANT

MRS P C GRIFFITHS          RESPONDENTS

---

Transcript of Proceedings

JUDGMENT

Revised


 


---

APPEARANCES

For the Appellant MR I LEE

(Of Counsel)

Messrs Grindeys

Solicitors

Glebe Court

Stoke on Trent

Staffordshire

ST4 1ET

For the Respondents MR R THOMAS

(Of Counsel)

Messrs Sims Cook & Teague

Solicitors

3 All Saints Court

(Off Corne Street)

Bristol

BS1 1JN


 


MR JUSTICE TUCKER: This is an employers appeal from a decision of the Industrial Tribunal sitting at Bristol on 21 February 1995. The decision of the Tribunal was that the Applicant Mrs Griffiths (the Respondent to this appeal) was unfairly dismissed by the employers, Britannia Building Society on 4 August 1994.

The Respondent was employed by the Appellants as an Assistant Manager, acting also in the capacity of a cashier. She had been employed by them for many years. During the months of July and August 1993, a number of fraudulent transactions were carried out at the Clifton branch where the Respondent was employed. Her till was logged out to her on each occasion when those transactions took place. Therefore, she was the person responsible for its operation. Nothing was done at the time, because the transactions went undiscovered for some time. They only appeared many months afterwards when a customer noted that her passbook contained entries of which she had no knowledge. The Appellants then commenced their investigations.

Let it be said at once that the Respondent throughout denied that she was the person responsible, and the Appellants have proceeded on the basis that that was correct in the sense that the Respondent herself did not act dishonestly. It was not she who took the money from her till, and no-one suggests that she was guilty of theft, let that be made plain at the outset. Nevertheless she was in another sense responsible, because she had supervision of the till at the relevant time. These tills were controlled by means of "swipe cards". The Respondent had such a card. When the matter came to the notice of the Respondents, they held, it must be assumed, the proper disciplinary investigations and enquiries. They had previously issued to all their employees a disciplinary handbook. It contained a warning about acts of misconduct, and gross misconduct. It was made plain in that book that acts of gross misconduct could include and comprise gross negligence. It was that offence with which this Respondent was charged.

Having carried out their investigations, the Appellants found that charge to be proved and they took the course of dismissing the Respondent from their employment. She appealed within the internal disciplinary procedures but on review, the dismissal was upheld. The Respondent then commenced proceedings in the Industrial Tribunal for unfair dismissal. In her Originating Application she claimed that she had been unfairly dismissed by her employers. She set out in Box 12 the full details of her complaint. She set out the fact that she was dismissed for gross misconduct and said that she believed that a lesser punishment should have been given to her. When the matter came before the Industrial Tribunal, it is urged upon us and we accept, that a good deal of the evidence was undisputed. Many witness statements were placed before the Tribunal as constituting the evidence in chief which those witnesses would give. Thus a number of matters were not in issue before the Tribunal. It was agreed that the Respondent was not dishonest. It was agreed that she had responded at various times to orders of a superior, which may have had some connection with these transactions in the context that if she had not done so, she might have committed a disciplinary offence. It was apparently accepted that the person who was in a position to have perpetrated these offences, was her superior at that branch. None of those matters were in dispute. Therefore it is urged upon us that the Tribunal had no need to make findings about them. Nevertheless, of course there was an issue for determination by the Tribunal. The principle issue was whether the dismissal was fair or unfair. But there was another issue, and that was whether in any event, the Respondent was guilty of contributory fault.

The Tribunal set out their decision and purported to give what they describe as full reasons for it. Unfortunately we are not able to agree with that description of the reasons given by the Tribunal. In our view they were very far from being full or adequate reasons. They set out in paragraphs 1 to 6 of the full reasons the history of the matter. Thus in paragraph 5 they say this:

"The respondent whilst accepting that the applicant had not made the withdrawals herself and had not acted in any [way] dishonestly concluded that the irregularities with regard to those withdrawals were sufficient grounds and reasons on which to summarily dismiss her."

The Tribunal do not make any further reference to the reasons which had, apart from anything else, been contained in certain correspondence between the parties. Thus we find in the exhibits bundle references in a letter dated 4 August 1994 to the reasons, the Appellants say:

"Having considered all the points put before me, I advised you that there is no allegation of theft being made against you, .... but one of gross negligence, in that the transactions mentioned in Mr Dawes' report were not carried out by yourself, but another party. (This is being pursued under a separate investigation). The transactions were only possible because you failed to exercise due care and control over your till, card and keys."

In a subsequent letter dated 8 November 1994 the Head of Retail Services writes and says this:

"... I advised you that it was my judgement that there was clearly gross negligence on your part in that you failed to exercise due care and control over our till, card and keys. This resulted in fraud and unfortunately, an inability to identify the perpetrator."

The Tribunal, as we have said, itself made no reference to those reasons. Passing to paragraph 8 of the reasons, that is almost entirely taken up with a recital of the terms of Section 57 of the Employment Protection (Consolidation) Act 1978. What the Tribunal say in paragraph 7 is this:

"The Tribunal are of the unanimous view that notwithstanding those documents and having heard the evidence from the witnesses, and in particular considering the decision that was taken in the case of Mrs Thompson [who it was said was a comparable employee] that this was not a sufficient reason for dismissing the applicant in accordance with equity and substantial merits of the case and that the dismissal was therefore unfair."

The Tribunal do not state what the other reasons were, which must have existed, judging from the use of their phrase `and in particular'. They do not refer further to the case of Mrs Thompson, which they do not appear to have considered in detail or at all. Neither do they make any reference to the relevance or comparability of Mrs Thompson's case to the case before them. At the end of paragraph 8 which was the paragraph setting out Section 57, all the Tribunal say is this:

"Bearing in mind the above the Tribunal have unanimously concluded that the dismissal was unfair."

Those are, we regret to have to say, in our opinion, stark and bold reasons, which do not contain the necessary details. There is no reference by the Tribunal expressly, to whether the response of the Appellants fell within the reasonable band of responses available to a reasonable employer and there is no reference at all to the issue of contributory fault.

To what extent should a Tribunal go in setting out reasons for its decision? The matter starts with The Industrial Tribunals (Constitution and Rules of Procedure) Regulations 1993, paragraph 10 of Schedule 1 sub-paragraph 3 of which requires that:

"The tribunal shall [I emphasise a mandatory requirement] give reasons for its decision in a document signed by the chairman. That document shall contain a statement as to whether the reasons are given in summary or extended form..."

It is perfectly apparent that here the Tribunal thought that they should give reasons in extended form, hence their reference to full reasons.

This problem has confronted this Appeal Tribunal and the Court of Appeal on many occasions. Indeed it came before the predecessor to this Tribunal, the National Industrial Relations Court as long ago as 1974, in the case of Alexander Machinery (Dudley) Ltd v Crabtree [1974] IRLR 56. Sir John Donaldson as he then was, the President of that Court, gave judgment in the case. He set out what the Tribunal should do. It should give reasons for its decision. Sir John Donaldson said this at paragraph 2 of the decision, page 57 of the report:

"In the present case it is clear that the whole argument which the appellant wishes to address to us depends upon the tribunal's evaluation of the evidence relating to the reasons for Mr Crabtree's dismissal and the reasonableness of the employers' conduct in all the circumstances in dismissing him on the basis of those reasons. The tribunal said it was not satisfied with the reasons set out but gave no detailed explanation of why it was not satisfied.

Whilst there can be no appeal from findings of fact, the absence of evidence to support a particular finding is an error of law."...

We need not read on because we accept Mr Thomas' submission in the present case that there were not extensive issues in the present case as to findings of fact. It is clear from that decision that a Tribunal should give reasons, so that it can be determined whether or not there has been any error of law in its approach. As Sir John Donaldson said in the Alexander Machinery case, failure to give reasons therefore, amount to a denial of justice and is itself an error of law.

Another important decision on this matter is that of a Court of Appeal in the case of Meek v City of Birmingham District Council [1987] IRLR 250. Lord Justice Bingham as he then was, delivered the judgment of the Court on that occasion. He said this:

"It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of refined legal draftsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons which have led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises; and it is highly desirable that the decision of an Industrial Tribunal should give guidance both to employers and trade unions as to practices which should or should not be adopted."

Reference was made to previous decisions, including the Alexander Machinery case and to other decisions.

We bear in mind that judgment and the fact that it is not to be expected of an Industrial Tribunal that they must set out in considerable detail or in formalistic terms, the decisions which they reached, but they must say enough to enable the parties to know why they have won or lost as the case may be. There have been other cases since. An example is the case of Regina v Civil Service Appeal Board ex-parte Cunningham [1992] ICR 816 at page 827, where Lord Donaldson said this:

"I then ask myself what additional procedural safeguards are required to ensure the attainment of fairness. The answer is, I believe, to be found in the judgment of Lord Lane C.J. in Reg. v. Immigration Appeal Tribunal, Ex parte Khan (Mahmud) [1983] Q.B. 790, ..." (and cites a passage from Lord Lane's judgment in that case).

"The important matter which must be borne in mind by tribunals in the present type of circumstances is that it must be apparent from what they state by way of reasons first of all that they have considered the point which is at issue between the parties, and they should indicate the evidence upon which they have come to their conclusions. Where one gets a decision of a tribunal which either fails to set out the issue which the tribunal is determining either directly or by inference, or fails either directly or by inference to set out the basis upon which they have reached their determination upon that issue, then that is a matter which will be very closely regarded by this court, and in normal circumstances will result in the decision of the tribunal being quashed. The reason is this. A party appearing before a tribunal is entitled to know, either expressly stated by the tribunal or inferentially stated, what it is to which the tribunal is addressing its mind. In some cases it may be perfectly obvious without any express reference to it by the tribunal; in other cases it may not. Secondly, the appellant is entitled to know the basis of fact upon which the conclusion has been reached. Once again in many cases it may be quite obvious without the necessity of expressly stating it, in other cases it may not."

The Tribunal do not in fact state the reason for the dismissal in this case, although perhaps they may be forgiven for not having done so in the particular circumstances, since the reason was not in dispute. But in no passage do the Tribunal explain why they consider Mrs Thompson's case to be comparable. Her case in fact had not been raised in the internal disciplinary proceedings and was only brought to light shortly before the hearing before the Industrial Tribunal. In a somewhat similar case, this point was considered by this Appeal Tribunal in the case of Hadjioannou v Coral Casinos Ltd [1981] IRLR 352. Mr Justice Waterhouse giving the judgment of the Appeal Tribunal, accepted the analysis of Counsel for the Respondents, as to the limited circumstances in which comparable cases can be looked at by a Tribunal. He then said this:

"... We should add, however, as counsel has urged upon us, that Industrial Tribunals would be wise to scrutinize arguments based upon disparity with particular care. It is only in the limited circumstances that we have indicated that the argument is likely to be relevant and there will not be many cases in which the evidence supports the proposition that there are other cases which are truly similar, or sufficiently similar, to afford an adequate basis for the argument. The danger of the argument is that a Tribunal may be led away from a proper consideration of the issues raised by s.57(3) of the Act of 1978. The emphasis in that section is upon the particular circumstances of the individual employee's case."...

As we say, there is unhappily no comparison made in the present decision before us of the relative positions of Mrs Thompson the Respondent. There is no consideration either to the principle set out in the case of Iceland Frozen Foods for example, as to whether the response was within the reasonable band of responses. We have the distinct impression that the Tribunal simply state in the present case what their own opinion is, without examining whether they should substitute their opinion for that reached by the employers.

We have been referred to a helpful passage win Harvey on Industrial Relations and Employment Law Vol.4, starting at paragraph 978 where the learned authors of that book say that:

"... there are nevertheless certain basic matters which call for specific findings and reasons, if compliance is to be made with r 10(3)" [to which we earlier referred].

Thus in the case of unfair dismissal the Tribunal should state what it found to be the principle reason for the dismissal, and also where the issue of contributory fault has been raised at the hearing, the Tribunal is bound to record its finding on that issue and to give reasons for such finding.

Those matters unfortunately were not attended to in this decision. Accordingly we regret to have to say that this decision was fatally flawed for lack of specific reasons. It must be quashed. So that the matter can be re-examined in full, we remit the case to a further, and we suggest, differently constituted Tribunal. We request the Regional Chairman to constitute a Tribunal, so that this matter can be dealt with and fresh and full reasons given for the decision which is reached.