United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	NO APPEARANCE BY OR REPRESENTATION ON BEHALF OF THE APPELLANT


 


JUDGE J HICKS QC: Nobody appears on this Preliminary Hearing of the appeal and there is a communication from the Appellant, Mr Smith, dated 31 August, which makes it clear that he had the Notice of the Hearing and does not propose to appear. We therefore deal with the matter on the basis of the grounds advanced in the Notice of Appeal and in that short communication from Mr Smith.

Mr Smith was employed by the Respondent employer, Prudential Assurance Company Ltd, as a sales manager from 5 August 1985 until he was summarily dismissed for gross misconduct on 29 January 1996. He complained to the Industrial Tribunal that that was an unfair dismissal.

Mr Smith was in charge of a team of 8 sales representatives in the employer's Sheffield office. The employer (as goes without saying) is a very large and very well known insurance company. His sales representatives were what were called financial advisers, which meant that their activities were limited to servicing existing customers and selling new products to existing customers. That process was governed by the employer's own rules and also by rules and regulations under the Financial Services Act 1986, under which the representatives had to give what was technically called "best advice".

A particular feature of the regime under which Mr Smith and his team of representatives operated was that the process known as "switching", that is to say changing from one form of contract to another by the cancellation of the first and the initiation of the second was, as the Industrial Tribunal found, heavily frowned upon and normally forbidden. The only exception was that if the customer, having been made fully aware of the implications and disadvantages was adamant as to his or her wish to make such a move, then it could be carried out. The reason why it was frowned upon was, of course, because it was normally heavily disadvantageous to the customer, as involving the payment of extra commissions and so on, and by the same token would be advantageous to the sales staff whose remuneration included an element of commission or, in the case of Mr Smith as sales manager, a performance related bonus.

The time came when the employers were put on notice that there seemed to be a much higher rate of switching of a particular kind in the Sheffield branch than was normal, and they put in train some investigations. After an initial investigation there was a more formal and a fuller investigation under a Mr Williams, as a result of which a report was prepared and disciplinary proceedings were initiated. A Mr Germaine, a regional manager, took the disciplinary hearing relating to Mr Smith, which occupied two days, and came to the conclusion that there was absolutely clear evidence of switching, and that the evidence before him added up to a total loss of trust and confidence in Mr Smith. He, Mr Germaine, could not see any way he could ask Mr Smith to deal with the public on behalf of the Prudential again and in all the circumstances he, Mr Germaine, decided that Mr Smith must be summarily dismissed for gross misconduct. He told Mr Smith that and by a letter of 29 November 1995 it was confirmed, the reason for the dismissal given in that confirmatory letter being "fraudulent selling activities which included switching of business, [what were called TFR irregularities] and failure to comply with Company requirements and/or regulations regarding point of sale documentation". He was told of his right of appeal and did appeal, and the appeal was dealt with by a Mr Cousins, the Southern Region director, who dismissed the appeal and confirmed the dismissal.

The Tribunal, having recited the history in some detail and certainly in a great more detail than I have done, turned in paragraph 26 of their Reasons to the question whether the Respondent employers had established the reason for dismissal and what it was and found that the employers had established the reason, that is to say that it related to conduct. They then went on in paragraphs 27 and 28 to deal with the question under Section 98 (4) of the Employment Rights Act 1996 whether that reason, as they put it, was sufficient in all the circumstances of the case and whether the Company went about making its decision in a fair way and they proceed to consider that matter in the following terms: They say:

"27. ... We also have to consider whether, at the end of the day, the decision was a fair one or one which no reasonable employer could or would make. We need to ask ourselves whether the company had grounds to suspect the applicant to begin with, whether a reasonable investigation took place and whether fair and proper procedures were carried out. We are satisfied that the respondent did act reasonably in coming to its decision. We are satisfied that Mr Smith was sufficiently experienced and competent to appreciate that switching in the way in which it occurred was unacceptable. He knew or should have known how important it was to comply fully with all the rules and regulations and to ensure that the paperwork made clear what each and every transaction was about. It is not for us to judge whether Mr Smith was dishonest, deceitful or even whether he simply broke the rules. Our function is to conclude whether or not the respondent dismissed him fairly. Unless we can say that no reasonable employer could have come to the decision reached in this case or would not have come to the decision in the way it was arrived at in this case we ought not to conclude it was unfair. It is not for us to interfere with any decision reached even if we believed it to be one which we would not ourselves have made. Mr Smith, like others, can still consider himself innocent in the eyes of the law insofar as allegations of fraud are concerned. He remains innocent of any allegations of fraud until such time as they are proved beyond reasonable doubt in a court of law. Nothing less will do to deprive him of that innocence. Our function is simply to consider whether the reason for dismissal was sufficient in all the circumstances and whether the employer in this case acted reasonably and fairly. ..."

They then go on to consider the procedure followed in the enquiry, in the disciplinary hearing and in the appeal and continue:

" the applicant has not seriously sought to suggest that the procedures were in any way flawed. ..."

And they then continue to summarise the course of events of the disciplinary and appeal procedure and conclude in paragraph 28:

"28. After considering all the evidence in this case we cannot say that the decision was wrong or that it was reached in an unfair way."

And they dismissed the complaint.

The grounds of appeal are set out in a letter dated 13 February 1997. It is in a narrative form, not numbered, but what seems to be the first ground of appeal is set out in the fourth paragraph of that letter in two sentences, of which the first reads:

"The appellant wishes to appeal on the grounds that was accepted by the tribunal as the reason for the dismissal was in fact not pursued by the respondents at the tribunal."

That sentence has lost its way somewhere grammatically, but the sense of it seems fairly clear.

The next sentence is very short and clear:

"No evidence of fraud was produced."

The remainder of the paragraph elaborates that point.

In our view that ground of appeal is misconceived. The employers were neither obliged nor entitled to seek a finding by the Industrial Tribunal that Mr Smith was guilty of fraud. The Tribunal had no jurisdiction to find whether Mr Smith was guilty of fraud and would have been asking itself the wrong question had it done so. That is all correctly explained, in our judgment, in paragraph 27 of the Tribunal's Reasons and we see no need to repeat or elaborate upon them.

The next paragraph of the letter says:

"The reason accepted by the tribunal as the reason for dismissal must be at least shown on the balance of probabilities to be the true reason."

That is an unexceptionable statement of the law, but in so far as it is a criticism of this Tribunal's decision it seems to confuse the question "what was the reason" with the question of fairness. The Tribunal's finding that the reason for dismissal was conduct was really inevitable, given the evidence before it, and no possible ground of error in that respect can be raised. The only suggestion of some other reason appears to have been that during the cross-examination of Mr Germaine it was suggested to him that this whole procedure was a device to get around a redundancy situation. He dealt with that and the Tribunal clearly accepted his reply and rejected that suggestion and there is no arguable error on their part in that respect.

The next paragraph of the letter reads:

"No evidence has been supplied that the other reasons for dismissal at the time and at the hearing, involvement in the switching of business and personal financial review irregularities were accepted by the tribunal as true reasons for dismissal or that they were sufficient reason for dismissal."

That is not entirely easy to understand at first glance, but it seems to be an attempt to treat what Mr Smith calls "the fraud issue" as being quite separate and distinct from the other parts of the reasons for dismissal - perhaps he would say more technical matters of breach of regulations and of filling in the right forms and so on - but in our judgment those matters were clearly all part of a single reason by the employers for dismissal and in paragraph 26 of the Industrial Tribunal's Reasons they are dealt with in that way, and in our view properly so, and are therefore covered by the Tribunal's conclusion that the reason for dismissal was conduct and their conclusion that the employer acted fairly in treating that as the reason for dismissal.

So much for the Notice of Appeal. In Mr Smith's response to the enquiry from this Tribunal whether he proposed to attend, having said that he did not intend to be present, he goes on to add: "The case is quite clear. There simply was no fraud". That, in our view, is the same point as the one made in the Notice of Appeal and which we have dealt with. He then goes on to add:

"The Prudential is now accepting this business again. All the staff have had to be re-trained because Company standards were so unclear, by order of S.I.B. The regional director that ordered these suspensions and dismissals has been moved and demoted."

There is no indication that any of those matters were raised before the Industrial Tribunal and, that being so, there can be no possible error of law on their part in failing to deal with them.

We therefore conclude that neither in the Notice of Appeal nor in that supplementary document has Mr Smith raised any arguable ground of appeal and the appeal must therefore be dismissed.