United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR CARR Messrs Eversheds Solicitors London Scottish House 24 Mount Street Manchester M2 3DB
For the Respondent	MR T SADIQ Messrs Philip Jones Hillyer & Jackson Solicitors 9 Hunter Street Chester CH1 2AQ


 


JUDGE C SMITH QC: This is an appeal by the employers, Flexsys Ltd, against the decision of an Industrial Tribunal, held at Shrewsbury over two days in January and March 1996 of which Extended Reasons were sent to the parties on 24 June 1996, whereby the Industrial Tribunal held that Mr M. Nolan, the Respondent to this appeal, had been unfairly dismissed, but that he had contributed to his dismissal to the extent of 60%

As appears from the decision of the Industrial Tribunal the Respondent was summarily dismissed from his employment with the Appellants with effect from 9 May 1995 after 11 years' employment as a senior fire security guard.

The Industrial Tribunal found, and there was no issue about it, that the Respondent had been dismissed for gross misconduct arising from the Appellants' conclusion that he had been dishonestly abstracting diesel from the Appellants' bulk tank for his personal use.

Having heard evidence from witnesses called by the Appellants and the Respondent and having considered a substantial bundle of documents, including a large number of computer print-outs, the Industrial Tribunal proceeded, without summarising in any detail the nature of the Appellants' case against the Respondent, to express its findings with regard to the fairness of the Respondent's dismissal in paragraphs 5 to 8 of the decision. In doing so, the Tribunal did not directly refer to Section 57(3) of the 1978 Act, but it is apparent from the way in which the Industrial Tribunal expressed itself, that it was seeking to apply the principles laid down in the well known case of British Home Stores Ltd v Burchell [1978] IRLR 379 in testing whether the dismissal was fair or not.

The Industrial Tribunal concluded that the Appellants honestly believed that the Respondent was guilty of theft and they further found that there was sufficient information before the Appellants to justify the instigation of an investigation into the Respondent's conduct. However, the Industrial Tribunal went on to find, purporting to apply BHS v Burchell, that the Appellants did not carry out a sufficiently thorough investigation into the allegation of theft against the Respondent and accordingly, they found that the Appellants had not established reasonable grounds for their belief that the Respondent was guilty of theft of diesel fuel. They concluded that the evidence before the employers when they decided to dismiss the Respondent "fell significantly short of that which a reasonable employer would have required before considering that the applicant [the Respondent here] a senior fire security guard, was guilty of theft of fuel".

By paragraph 6 of the decision the Industrial Tribunal set out particulars of the respects in which it regarded the Appellants' investigation to have been inadequate and deficient.

By paragraph 7 of the decision the Industrial Tribunal apparently criticised the refusal of the Appellants to disclose all the witness statements it had obtained, either before or at the disciplinary hearing, or indeed, at the Tribunal hearing until ordered to do so. They further criticised the Appellants for disclosing the computer print-outs too late to enable the Respondent, as they put it, to give a considered response to a complex set of data. The Industrial Tribunal concluded that this aspect of the Appellants' procedure was totally unreasonable.

Arising out of its criticisms in paragraphs 6 and 7 the Industrial Tribunal concluded in paragraph 8, firstly, that the employer's investigation was insufficient and secondly, that the conduct of the disciplinary hearing, by which they appear to have meant the very late disclosure of the computer print-outs, rendered the dismissal unfair.

The Industrial Tribunal then went on to consider the degree to which the Respondent had contributed to his own dismissal. The Industrial Tribunal noted that the Respondent had been at fault in failing to notice what the Industrial Tribunal characterised and described as "the unauthorised usage of diesel by a person or persons unknown on 21 September, 16 October and 26 October 1994", at a time when the Respondent was on duty at the main gate during the night shift. The Industrial Tribunal also took into account, on the issue of contribution, the Respondent's refusal to allow the Appellants to take samples from the diesel tank of his private vehicle, or to search the boot of that vehicle, or his garage at home. Because of these matters the Industrial Tribunal concluded that the Respondent had contributed to his own dismissal to the extent of 60%.

In a series of powerful submissions, Mr Carr, on behalf of the Appellants, first of all submitted that the Industrial Tribunal had failed properly to understand and appreciate what were essentially two entirely separate grounds upon which the Appellants came to its decision and had concluded that the Respondent had stolen diesel fuel for his personal use, namely:

(1) The Contractor Cards' Allegation

This was an allegation entirely based upon documentary evidence, namely that of the computer print-outs, that, on three specific and separate occasions in September and October 1994, at a time when the Respondent was on duty on the night shift in charge at the main gate of the Appellants' premises, contractor cards, i.e. cards which are normally issued to contractors for access to the site, had been wrongfully validated to enable them to be used dishonestly to obtain diesel from the employer's pumps in circumstances where such action sets off a print-out on the computer in the main gate office, showing that such cards were being so misused. The case against Mr Nolan, so far as the Appellants were concerned in respect of those occasions, was squarely founded on the fact that on each occasion he was on duty during the night shift in charge, in effect, of the main gate and the charge against him was that it was beyond belief that he was not the person who must have validated and used the cards in such circumstances. It was no part of the Appellants' case that he had culpably failed to detect other persons from wrongdoing.

(2) The "Pattern of Use" Allegation

Quite separately from that allegation, there was a second allegation correctly described by Mr Carr as the "pattern of use" allegation, which was based on evidence that on two occasions in particular, shortly after the Respondent had been engaged in using his own card, apparently legitimately, ostensibly to fill up the fire vehicle or some other vehicle, other employees had found that far from the tank of that vehicle being full it was, in fact, nearly empty so that it had to be filled again.

In respect of both allegations it is apparent that the Appellants were also concerned as to the guilt of the Respondent by his attitude in refusing to agree to allow his garage to be searched, or for samples of diesel fuel to be taken from the diesel car which he then owned.

Mr Carr submitted that it is plain that the apparent misunderstanding of the nature of the Appellants' case by the Industrial Tribunal, and in particular, their failure to analyse the two separate strands of the allegations against the Respondent, had caused the Industrial Tribunal to arrive at conclusions which were both insupportable and inadequate. Thus, Mr Carr submitted, that it is apparent from the findings of the Industrial Tribunal that its finding that the Appellants' investigation fell significantly short of that which a reasonable employer would require to be carried out, was entirely based on the facts and matters set out in paragraph 6 of its decision. However, it is equally clear on analysis, that such shortcomings, as there identified by the Industrial Tribunal in that paragraph, relate exclusively to the "pattern of use" allegation and leave completely untouched the apparent cogency and strength of the Appellants' case on the "contractor cards" allegation upon which no findings were made by the Industrial Tribunal, save for an erroneous finding in paragraph 9 of the decision, where the Industrial Tribunal categorised the Respondent as being guilty of culpable negligence in failing to notice that persons unknown had stolen diesel by use of contractors' cards.

In our judgment, Mr Carr's submission on this point is correct and, despite the efforts of Mr Sadiq, Counsel for the Respondent, there is no answer to it. Unfortunately, the Industrial Tribunal never properly addressed itself to this most important aspect of the detailed investigation which the Appellants had carried out and, in our judgment, failed to reach any findings as to the sufficiency or otherwise of the investigation into that charge against the Respondent. On the face of it, there was very strong documentary evidence in support of that allegation.

Mr Carr next submitted that the other grounds upon which the Industrial Tribunal found the dismissal to be unfair were equally unsustainable, because here again the Industrial Tribunal had regrettably failed to make crucial findings which had to be made, before any conclusion could be reached, as to whether any procedural shortcomings in the disciplinary procedure adopted by the Appellants had, in fact, cause any unfairness to the Respondent in regard to the decision to dismiss so as to render the dismissal unfair.

Thus with regard to the non-disclosure of statements, Mr Carr pointed out first of all and really Mr Sadiq appeared to accept this and indeed argued from it, that it was not at all clear that, in fact, the Industrial Tribunal were finding that such non-disclosure was capable of causing any unfairness in the circumstances, having regard to the fact that the second sentence in paragraph 8 of the decision appears only to relate to the late disclosure of the computer print-out material.

However, Mr Carr went on to submit that, assuming that the Industrial Tribunal were in some way treating the non-disclosure of the statements as causing unfairness, they failed altogether to make any analysis as to why the non-disclosure of such statements, in the circumstances of this particular disciplinary enquiry and allegation, in any way rendered the dismissal unfair. He pointed out that this was not an informant case and that the Respondent's belief of guilt was based upon documents and not on any direct evidence of guilt contained in witness statements. He submitted that the Industrial Tribunal should have looked at the overall process relating to and leading up to the dismissal in order to see if the alleged procedural defect of failing to serve written statements, in fact, rendered that process unfair. He referred us in particular to Fuller v Lloyds Bank plc [1991] IRLR 336, particularly at paragraph 37 of that decision.

Mr Carr went on to make somewhat analogous submissions relating to the Industrial Tribunal's other finding of procedural defect, namely their finding that the conduct of the disciplinary hearing was not fair in that "other documentary evidence contained in the computer print-out for the most part was disclosed at the disciplinary hearing but, in our view, that was at too late a stage for the Applicant to give a considered response to what were complex sets of data". Mr Carr pointed out that here again the Industrial Tribunal had failed to carry out any sufficient analysis as to what had, in fact, taken place during the disciplinary process.

From the notes of the disciplinary hearings it is self-evident that the Respondent had been offered the documentation at the end of the first stage of the initial disciplinary hearing, but that he had rejected the offer; that subsequently at the end of the second stage of the first day of the disciplinary hearing he was given all the material. There had then followed, some six days later, an appeal hearing, from the notes of which it is apparent that the Respondent had familiarised himself entirely with the documentary material which he had then by then had for six days and was able to raise a very large number of detailed points in his defence, arising from the documents with which he had been provided. On the basis of those unchallenged facts Mr Carr submitted that it was incumbent upon the Industrial Tribunal to look at the overall position and then decide, amongst other things, whether, if there was any procedural defect in failing to provide the material in time, this has been cured by the appeal hearing. Instead of that, regrettably, the Industrial Tribunal made no reference in its decision, of there having ever been an appeal hearing.

Here again, while we accept Mr Sadiq's submission made by reference to Union of Construction, Allied Trades and Technicians v Brain [1981] ICR 542 C.A, that the Appeal Tribunal should not take an over-analytical approach to decisions of Industrial Tribunals, nevertheless, in our judgment, the Industrial Tribunal here failed to make any or any proper findings in relations to this aspect of the matter.

In our judgment, the failure of the Industrial Tribunal properly to analyse the Appellants' case and to make the necessary findings in relation to it and to the alleged procedural shortcomings, taking together, have the result that the Industrial Tribunal's decision that the dismissal was unfair is fatally flawed.

There are, in our judgment, further shortcomings in the Industrial Tribunal's decision which are not strictly necessary for us to consider. First, with regard to Section 74(1) i.e. in regard, amongst other things, to the issue of evaluating the chance that the Respondent would have kept his job, even if the Appellants had carried out an investigation devoid of procedural flaws, the Industrial Tribunal failed to make any appropriate findings. In our judgment, it is no answer to this to suggest that the Industrial Tribunal had no material upon which to reach such findings or conclusions. They had sufficient material to make their own assessment of the contractor card allegation and they should have done so.

Finally, in our judgment, on the issue of contribution under Section 74(6) of the 1978 Act, the Industrial Tribunal failed here again to make a very important finding of fact based upon the evidence before them in relation to the contractor card allegation, namely, as to whether in respect of that allegation it was established, on the balance of probabilities, to their satisfaction, that the Respondent had taken the fuel.

For those reasons, in our judgment, this appeal must be allowed so that all the issues arising on this complaint of unfair dismissal will have to be remitted to a differently constituted Industrial Tribunal for a complete re-hearing. In the circumstances, we do not regard it as necessary or appropriate for us to make any findings on the cross-appeal relating to contribution since, in the light of our judgment, the issue relating to contribution, should it arise, will have to be considered afresh by the Industrial Tribunal.