United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR J CAVANAGH (of Counsel) Messrs Dibb Lupton Alsop Solicitors Fountain Precinct Balm Green Sheffield S1 1RZ
For the Respondent	MR L BROWNE (of Counsel) Messrs Gregory Abrams Solicitors 3 Speke Road Liverpool L19 2JX


 


JUDGE PETER CLARK: This is an appeal by the employer, Whitbread PLC, against a decision of the Liverpool Industrial Tribunal sitting on 4th October and 19th November 1996, and in Chambers on 29th November, that the applicant below, the respondent before us, Mr Allan Bennett, had been unfairly dismissed from his employment with the Company and had not contributed to that dismissal. The Industrial Tribunal reserved decision with extended reasons was promulgated on 9th January 1997.

Background

The respondent was employed by the Company for 17 years, latterly as an HGV driver based at their Huyton distribution depot. He delivered goods, particularly wines, spirits and cigarettes, to off-licence outlets.

The system of loading vehicles was as follows. Goods for the next delivery were loaded at the depot on the vehicles returned each day. The load would be assembled by a picker from goods kept in the warehouse. A pallet load would be made up for each off-licence at which delivery drops were to be made. Once loaded, each pallet was shrink wrapped and loaded onto the vehicle in order of delivery, the first at the back. The loading sequence was videotaped.

Once loaded the vehicle was driven to a secure part of the premises and locked. The vehicle keys were deposited in a letter box near the canteen and during the night the yard was patrolled by security guards and was subject to video surveillance.

We are concerned with a load placed on a vehicle, registration no. M490 YBD, on the early evening of Friday, 3rd May 1996, whilst the respondent was on holiday. In short, he attended for work on Tuesday, 7th May, and took the loaded vehicle on his round, accompanied by an agency worker, Mr Southern as his delivery man. On arrival at his second drop, Borough Road off-licence, the respondent found that he was one box of cigarettes short. He telephoned the depot to report that fact. Later, on visiting the Dacre Hill off-licence, he found that there were three boxes of cigarettes missing for that order. Again, he telephoned in and made a report. The combined value of the four boxes was some £2,000.

Thereafter Mr Halbert, Operations Manager, conducted an investigation into the missing stock. He interviewed the men involved in loading the vehicle on 3rd May and, with others, watched a video tape of the loading operation. From those interviews, and the written statements from those interviewed and from watching the tape, and after a search was made of the loading area for the missing boxes, he concluded that those items had been loaded onto the vehicle in shrink-wrapped pallets, in the order shown in a load configuration plan.

He interviewed the security guards on duty over the week-end including a Mr Hampson to whose statement we shall return.

On 9th May there was a meeting between Mr Halbert and a Mr Farrell, of management, and the respondent and his trade union representative, the shop steward, Mr Thomason.

The respondent in company with his trade union representative was seen again on 13th May at a disciplinary interview conducted by Mr Griffin, Assistant Distribution Manager. The respondent stated that he had not left his vehicle unsecured on his round on 7th May.

At the meeting Mr Griffin said that there were only three way in which the cigarettes could have gone missing:

(i) they were not loaded onto the vehicle in the first place, that is, on 3rd May;

(ii) they had been stolen off the vehicle during the delivery round;

(iii) the respondent or his mate, or both, had stolen the items.

The respondent accepted that the goods were loaded, based on the evidence obtained by the Company. That left two further possibilities in Mr Griffin's view. The respondent did not, at that stage, suggest that the items had been stolen between loading and his setting off on his round.

The meeting was adjourned to 15th May 1996, and then again until 17th May. On both occasions the respondent said that he had left the vehicle unattended for a matter of seconds at Prenton Dell, during the course of his round, but that gave no opportunity, he said, for theft by a third party.

At the end of the 17th May meeting Mr Griffin concluded that the respondent had misappropriated the cigarettes and summarily dismissed him for gross misconduct.

He appealed against his dismissal to Mr Thomas, the Depot District Manager, by letter dated 17th May. In that letter he said, among other things:

"I still say the wagon was tampered with in the yard by someone unknown."

The appeal hearing took place on 31st May 1996. Present were Mr Thomas and Mr Griffin, the respondent and his shop steward, Mr Thomason, and a secretary who minuted the meeting.

During the meeting Mr Thomas expressed the belief, from statements obtained during the investigation, that the vehicle had not been tampered with over the week-end, based on a viewing by Mr Halbert of a incomplete video tape and the security guards' statements. In any event, the shrink wrapping on the pallets had not been breached on the respondent's own account. Further, the position of the two material pallets meant that anyone stealing from them would have to climb over other pallets which themselves contained cigarettes. He ruled out theft by a third party whilst the vehicle was briefly unattended on the round.

He concluded that the dismissal decision should stand.

On 7th June 1996 Mr Bennett presented a complaint of unfair dismissal to the Central Office of Industrial Tribunals.

The Industrial Tribunal Decision

The tribunal accepted that the reason for dismissal related to the respondent's conduct. They then turned to consider the question of reasonableness under s. 98(4) of the Employment Rights Act 1996, which they set out in full.

They then gave themselves the following direction in law at paragraph 10 of their reasons:

"10. In cases of conduct it is not necessary that the respondents should be able to prove beyond doubt that the applicant has committed the conduct complained about. It is sufficient if the respondents satisfy the Tribunal that they have an honest belief based on reasonable grounds after a reasonable investigation that the applicant had committed the misconduct for which he was dismissed."

Having reminded themselves that they must not substitute their view for that of the employer they concluded that although the appellant had an honest belief that the respondent had committed the conduct complained of they were not satisfied that there were reasonable grounds to support that belief. Nor that a reasonable investigation had been carried out. Their reasoning supporting that is set out at paragraph 11 of the reasons thus:

"11. ... The Tribunal was told that the keys to the vehicles which are parked overnight were left in a secure box and that a Security Guard couldn't gain access to those keys without calling to the Depot Manager to the site. It is clear from the statement of the Security Guard Mr Hampson that on the night of 3 May he found 3 vehicles unsecured in the yard and obtained the keys to those vehicles from the letterbox and went out and secured them. That in our view clearly demonstrates that the keys to the vehicles were not kept in a secure place and that the attendance of the Depot Manager was not necessary to gain access to them. We are not satisfied that there was a reasonable investigation because a reasonable employer having regard to the statement which he'd obtained from Mr Hampson would have carried out further investigations as to why the keys were not left in a secure place and accessible to the Security Guards or anyone else without the Depot Manager being in attendance."

They went on to find that dismissal fell outside the band of reasonable responses because the vehicle keys were not placed in a secure place. Over the relevant weekend, the tribunal held, other people had the opportunity of obtaining the keys and gaining access to the vehicle.

They found the dismissal to be unfair in these circumstances, and declined to find any contribution on the part of the respondent.

On this basis the matter was adjourned for a remedies hearing.

The Appeal

We are told that the parties have reached an agreement as to remedy, subject to the appeal against the finding of unfair dismissal.

The Notice of Appeal is much amended, without objection by Mr Browne, who appears today on behalf of the respondent as he did below. A number of points are taken; however the oral argument before us has focused on two issues which may be conveniently described as the burden of proof point and the natural justice point.

Burden of Proof

As we pointed out in Boys and Girls Welfare Society v MacDonald [1996] IRLR 129; [1997] ICR 693, following the judgment of the Employment Appeal Tribunal, Wood J presiding, in Post Office Counters Ltd v Heavey [1990] ICR 1, the burden of proof on the employer to satisfy the test of reasonableness, found in paragraph 6(8) of Schedule 1 to the Trade Union and Labour Relations Act 1974, and re-enacted in the original Employment Protection (Consolidation) Act 1978, s. 57(3) was removed by s. 6 of the Employment Act 1980. The test is now a neutral one.

The well-known test formulated by Arnold J in British Home Stores v Burchell [1980] ICR 303, 304 was based on the law prior to the passing of the Employment Act 1980.

An Industrial Tribunal which places an onus on an employer to show that he has acted reasonably will therefore fall into error by misapplying the statutory provision now contained in s. 98(4).

It is clear to us that this Industrial Tribunal fell into that error, not simply by setting out the original Burchell test in paragraph 10 of their reasons, but also in applying that burden of proof in paragraph 11 where they say:

"We are not satisfied that there were reasonable grounds to support that belief ... We are not satisfied that there was a reasonable investigation ..."

Mr Browne has sought to persuade us that in using that language, the Industrial Tribunal were merely pointing out that an employer must lead some evidence in relation to the issues of reasonable grounds for their belief in the employee's misconduct and reasonable investigation. See Scottish Daily Record v Laird [1996] IRLR 665. We cannot accept that submission. It seems to us significant that only Burchell, but not Heavey nor Boys and Girls was cited to the Industrial Tribunal. Indeed, in his skeleton argument, which refers to neither of the latter cases, Mr Browne contended that the Industrial Tribunal correctly applied the Burchell test. They did; which is why and how they fell into error by disregarding the subsequent alteration in the law effected by the 1980 Act.

Natural Justice

The point here is, if anything, even more fundamental than the burden of proof point. We cannot accept Mr Browne's submission that in finding that the dismissal was unfair the Industrial Tribunal took into account factors other than the possibility of unauthorised access to the vehicle over the relevant weekend by persons unknown obtaining the vehicle keys. In our judgment that was the sole basis for their finding.

The difficulty is that the issue of key security was never raised by or on behalf of the respondent during the lengthy internal disciplinary enquiry, involving some four or five separate meetings and, more to the point, was never put to the respondent's witnesses during the Industrial Tribunal hearing. It simply did not form part of the respondent's case until it arose during his evidence.

In these circumstances it seems to us that it was incumbent on the Industrial Tribunal, if this matter were to form a central part of its deliberations, to let the parties know and to hear any further evidence that was necessary and to receive submissions on the point.

We are told by Mr Cavanagh that had the question of key security been put to the appellant's witnesses, the disciplining managers, Messrs Griffin and Thomas, they would have been able to explain that the security guard, Mr Hampson, had, on the face of his statement, referred the matter to the duty manager, Mr Henderson, and that the security of the vehicle keys was not compromised in the way which the Industrial Tribunal considered it had been. That may or may not be the case. What is absolutely clear is that they ought to have been allowed the opportunity to deal with the point and they were not before the Industrial Tribunal adjourned the hearing, later to reconvene in Chambers and reach their decision.

Conclusion

It follows in our judgment that the Industrial Tribunal fell into error in both respects identified above; the decision is fatally flawed; the appeal is allowed and the decision set aside.

It is, we think rightly, common ground between Counsel that in these circumstances the proper course is for us to remit the matter to a fresh Industrial Tribunal for a complete rehearing and that is what we shall do.

Legal Aid taxation is granted to the respondent.