United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR K FLETCHER (Solicitor) Messrs Jacksons Solicitors Innovation House Yarm Road Stockton-on-Tees TS18 3TN
For the Respondent	MR R MERRITT (of Counsel) Messrs Askew Bunting Solicitors 56/58 Borough Road Middlesbrough TS1 2JH


 


JUDGE JOHN BYRT QC: This is an appeal against a decision, promulgated on the 26 June 1997 of a Employment Tribunal sitting in Middlesborough. By their decision, they held that the employee, Mr Littlewood, had been unfairly dismissed. The employers appeal.

The material facts as found by the Tribunal are as follows:-

Mr Littlewood was employed by the Appellants as a general handyman, and by the date of his dismissal on 30 October, 1996, had been so employed for 27 years. His line manager was Mr Weatherall who was in charge of stores, plant hire, and Permanent Way. The Tribunal found that he was subjected to very little supervision. There were a number of things he did of his own initiative. He had a Ford Escort van in which he travelled round a number of British Steel Sites. He would have with him drums of oil from which he topped up vehicles and machines on those sites despite the fact that each such site had its own fuel bowser from which such local topping-up services could have been obtained. He managed to persuade the drivers at these sites to charge up such fuel oil as they received from him against the "Locomotive Cost Centre" when it should have been logged against "Plate-layers". He also established the practice of diluting diesel with waste oil, and making the same available for use by the plate-layers who had to oil points.

On 24 October, 1996, Mr Watt of the Appellants' Asset Protection Unit saw Mr Littlewood filling two 45 gallon oil drums in the back of his Escort van with oil taken from the home site's diesel bowser before setting off to an industrial estate in Middlesborough. There is no suggestion that he off-loaded the fuel on this trip, but on his return, Mr Watt questioned him about his activities. Not being satisfied with his answers, Mr Watt continued his questioning in the presence of Mr Weatherall. In the course of that interview, it was put to him that he was drawing some 600 litres of oil each week. He could give no explanation which satisfied Mr Watt about what he was doing with that oil. He was then asked about his practice of oil mixing. He said the waste oil came from two firms, namely Kellys of Grangetown and Hewitts of South Bank.

Mr Watt and his manager, Mr Norton, straightaway visited Kellys and Hewitts. Whilst at the latter's premises, they found two barrels of what appeared to be British Steel gas oil, and evidence of five other similar barrels.

On 25 October, Mr Littlewood was called in for further questioning by Mr Watt and Mr Norton in the presence of his own trade union representative, Mr Wright. He was questioned about the diesel oil being pumped into the back of his van, and about it being booked to the wrong cost centre; he was asked about the loss of empty barrels belonging to British Steel, said to be worth some £2,000 in value. He was asked about the oil belonging to British Steel seen in Hewitt's yard. A contemporaneous note was taken of the meeting.

Further enquiries were made, followed by another lengthy interview with Mr Littlewood and his trade union representative on 28 October. At the end of that meeting, Mr Littlewood was told that his explanations as to oil mixing, his usage of the diesel oil he drew, and the British Steel oil found in Hewitt's yard were not accepted. That same day, Mr Watt wrote out a detailed report which he submitted to Mr Richmond, Mr Littlewood's senior manager.

On 30 October, Mr Richmond summoned Mr Littlewood to a disciplinary meeting. Mr Richmond was advised throughout by a senior personnel officer who took a contemporaneous note of the proceedings. Mr Littlewood was accompanied by a Mr Risdale, a local union official. The meeting lasted only 20 minutes during which the main issues contained in Mr Watt's report were put to him. Mr Littlewood repeated the explanations he had earlier given but, as the Tribunal found, he had no explanation for the British Steel oil found in Hewitt's yard. Mr Richmond concluded that Mr Littlewood was guilty of false recording, excessive use of gas oil, and of having no explanation for the oil found at Hewitt's yard which he attributed to Mr Littlewood. Whereupon he summarily dismissed him. The formal letter of dismissal followed on 5 November. Mr Littlewood appealed.

The appeal hearing took place a month later on 4 December and was conducted by Mr McLaughlan, assisted by Mr Reed, the manager in charge of Energy and Maintenance Engineering Services. In paragraph 7 of their Extended Reasons, the Tribunal record their finding that neither member of the panel had previously been involved in the case though both had read Mr Watt's report. The same paragraph records that Mr Richmond took no part in the appeal save to give evidence. Mr Littlewood was accompanied by Mr Adams, a full-time union officer, and by Mr Wright again. The written record of the appeal hearing shows in detail the points made on Mr Littlewood's behalf and management's response. The appeal was dismissed.

The Employment Tribunal found the disciplinary proceedings before Mr Richmond and, on appeal before Mr McLaughlan, to be procedurally unfair. They accepted criticisms, made on behalf of Mr Littlewood, of the disciplinary hearing. He had been given no written warning of the hearing, or of its possible disciplinary consequences; neither he nor his representatives had any opportunity to study Mr Watt's report which only came into their hands, minutes before he and his union supporters went into the hearing. They took note of Mr Richmond's rebuttal. He said that, having been interviewed on three previous occasions by Mr Watt, Mr Littlewood was well aware of the complaints made against him. However, the Tribunal, having been referred to his case of Khanum -v- Mid-Glamorgan Area Health Authority [1978] IRLR 215, found that the charges had not been properly formulated so as enable Mr Littlewood to know the case he had to meet nor was he given a fair opportunity to state his case. On these grounds, the Tribunal concluded that the hearing of his disciplinary proceedings was unfair.

The Tribunal then considered whether those procedural deficiencies had been cured by the appeal hearing. They give no explicit answer to that question. However, they did say that the only grounds upon which the latter proceedings could be challenged were Mr McLaughlan's "prior knowledge and involvement in the case", and the fact that Mr Richmond, who had conducted the disciplinary hearing, had acted in the appeal, as if he were the "prosecuting officer". The reference to Mr McLaughlan's prior involvement arose out of the fact that Mr Littlewood had received from Hewitts, gifts of boxes of chocolates and bottles of whisky over two Christmases, in appreciation for his receiving their waste oil. He has passed these gifts (or some of them) to his managers who, contrary to company policy, had accepted them. Mr McLaughlan, as Area personnel Manager, had, in the period between Mr Littlewood's dismissal and the hearing of his appeal, investigated the managers' role. They had without argument admitted their offence and submitted to a final written warning.

The Tribunal found that challenge was substantiated, and that those two criticisms amounted to deficiencies in the appeal process which were inexcusable in an organisation the size of British Steel.

The Tribunal's reasons end with the following closing remarks:

"Indeed, in conclusion, the Tribunal is left with the impression that over a lengthy period there was a complete failure to manage the Applicant (Mr Littlewood) and, when the facts came to light, he has been made the scapegoat."

Mr Fletcher, for the Appellants, has made a number of submissions of which we consider two to be of particular significance.

First, he submits that, as a result of the obvious direct conflict between what the Tribunal say in paragraphs 7 and 12 concerning the parts played in the appeal by Mr McLaughlan and Mr Richmond, it is impossible to evaluate the Tribunal's criticism of those proceedings.

We have considered this submission, first in relation to Mr Richmond. The contradiction upon which the Appellants rely is clear. There is nothing in the notes of the internal appeal hearing to suggest that Mr Richmond played the role of a "prosecuting officer". We have been told that no suggestion of that sort was made on Mr Littlewood's behalf before the Employment Tribunal. Before us, Mr Merritt, for Mr Littlewood, has hypothesised that the Tribunal may have intended to criticise the part played by Mr Reed in the appeal, but by mistake wrongly named Mr Richmond instead. Suffice it to say that Mr Merritt has not sought to sustain this particular finding of the Tribunal relating to Mr Richmond. Having examined the record of the proceedings, we too can find no note of any evidence which might justify this finding of the Tribunal.

With regard to the position of Mr McLaughlan: Here too the alleged contradiction in what the Tribunal said in the two paragraphs about his role is obvious enough. Paragraph 7 says of Mr McLaughlan and Mr Reed that:

"Neither had previously been involved in the case but they had read Mr Watt's APU report."

In paragraph 12, it is stated that Mr McLaughlan:

"...had prior knowledge and involvement in the case to the extent that it fell to him to discipline those managers who had failed properly to supervise the Applicant and accepted gifts."

What was the evidence of "prior knowledge" and "involvement in the case"?

The notes of the appeal hearing record that Mr McLaughlan had read the APU report but paragraph 7 of the Reasons would not seem to make that the subject of criticism. The notes show he had spoken to Mr Ben Norton who was Mr Watt's manager. They show that Mr McLaughlan disciplined the managers, that he did so before the appeal but that he did not think his "involvement as to the gifts" disqualified him from hearing the appeal. We are aware that such notes may not record all the evidence upon which a Tribunal bases its findings, but in this case Mr Merritt has not sought to suggest that some critical evidence germaine to this issue escaped the record. Instead, he has invited us to surmise that Mr McLaughlan's consideration of the appropriate penalty for the managers would "presumably" have entailed enquiries which "would (or might) have explained what others said about" Mr Littlewood. He does not suggest that a case was ever put to Mr McLaughlan at the Tribunal hearing that such enquiries were made or that he had had anything to do with Mr Littlewood's investigation which might disqualify him from sitting on the appeal.

In the context of industrial disciplinary procedures, we see nothing wrong in the appeal board Chairman familiarising himself before the hearing with the allegations made against the employee by reading the investigative report upon which the allegations are based. Likewise, on the facts in this case, we see nothing sinister in his speaking to the investigative officer's manager, Mr Norton - that is, in the absence of further detailed challenge. On this evidence before us, there was no such challenge. If there was some evidence, critical to the issue of Mr McLaughlan's involvement, we would have expected that evidence to have been referred to, specifically, in the Chairman's notes, and again in the Tribunal's reasons, particularly having regard to what is said in paragraph 7 of those reasons.

Accordingly, we accept Mr Fletcher's submission that there was no evidence before the Tribunal, suggestive that it was improper for Mr McLaughlan to hear the appeal. It follows therefore that we find there was no evidence which might reasonably have led them to conclude that the appeal hearing's procedures were unfair.

What follows from that finding? Nowhere do the Reasons answer the question whether the appeal cured the defects of the disciplinary hearing. We were cited the case of Adivihalli -v- Export Credits Guarantee Dept, the judgement in which was handed down on 27 March 1998. In that case, the President, Mr Justice Morison, emphasised that there was no basis in law which made the distinction between a review and a rehearing of an appeal per se significant. Whether an appeal cures the defects of the disciplinary hearing depends on what the defects are. In this case, the Tribunal found the earlier hearing defective because Mr Littlewood had no warning of the disciplinary hearing, no details of the charges against him, and no opportunity to study the APU report before the hearing. In his evidence before the Tribunal, Mr Littlewood accepted that he and/or his union representative had a copy of the report before the hearing, that he knew he could have asked for time to consider it had either he or the representative required it, and that though no specific charges were put to him, he knew the issues at stake and the questions he was likely to be asked. It would seem that he was happy about all these matters because none of them was the subject of any complaint at the appeal when he was represented both by Mr Adams, a full-time union officer, and Mr Wright. In any event, the lapse of time between the disciplinary hearing and the appeal gave him ample time to which to study the APU report and prepare his case.

We think the employers are entitled on this evidence to reason that the Tribunal would probably have found that the defects of the disciplinary hearing were cured by the appeal process both because of the nature of the alleged defects and the fact that this Tribunal never stated that that was not so. We judge that it is reasonable to assume that the Tribunal found the disciplinary process to have been procedurally unfair only because of the unfairness imported into the procedures at the appeal stage. We have already given our reasons for challenging the latter conclusion. All which now remains to be considered are the Tribunal's findings about the employers' reasons for dismissal.

Mr Fletcher's second substantive criticism of the Tribunal's decision is that it is not evident they asked themselves the right questions when considering the issues relevant to Section 98 of the Employment Rights Act 1996. These have been set out in the guidelines provided in British Home Stores Ltd -v- Burchell [1978] IRLR 379.

It would seem that the Tribunal found the employers' reason for dismissal to be conduct. In paragraph 6 of the Reasons, they recite Mr Richmond's findings at the conclusion of the disciplinary hearing, namely "false recording and excessive usage of gas oil, and the oil found at Hewitt's yard which he (Mr Richmond) attributed to Mr Littlewood". In paragraph 11, they set out Mr Swinhoe's submission on behalf of Mr Littlewood which, inter alia, included the following points relevant to the issue we are now considering: He (Mr Swinhoe)

"challenged the assertions of the use of diesel oil and the subsequent extrapolations which could not by reference to records be substantiated he also pointed out that Mr Littlewood's activities must have been observed by his managers over a long period of time. Even the filling of the oil drums took place outside the office block where Mr Littlewood's managers worked."

The Tribunal then noted:

"Mr Fletcher made a number of points in reply but could not refute the points set out above."

At the end of paragraph 12, the Tribunal concluded:

"..... in conclusion, the Tribunal is left with the impression that over a lengthy period there was a complete failure to manage the Applicant, and when the facts have come to light, he has been made the scapegoat."

These are the Tribunal's only comments on the factual merit of the allegations made, and Mr Fletcher complains that, from these, it is not possible to ascertain with any certainty what are their finding in respect of s.98 of the Act. He submitted that it is therefore impossible to judge whether they considered the reasonableness of the employer's findings, decisions and responses or whether they took it upon themselves to substitute their own views as to Mr Littlewood's complicity in the offences alleged and the appropriate penalty, if any. He observed that the Tribunal's conclusion recorded in paragraph 12 suggested that the latter was their approach.

Mr Merritt submitted it was to be inferred from the Tribunal's Reasons that they concluded the employers' decision to dismiss was factually unfair because they had failed to carry out a reasonable investigation in all the circumstances of the case.

We accept Mr Fletcher's criticism of this aspect of the Tribunal's decision. In our judgment, notwithstanding their finding that Mr Littlewood's dismissal was procedurally unfair, it was incumbent upon them to reach a conclusion about the reasonableness of the employers' assessment of their employee's culpability, and of their sentence of summary dismissal. Having done so, it would be necessary for them to spell out their findings upon which such conclusions were based. Nowhere do the Reasons disclose a finding which suggests the Tribunal considered the reasonableness of the employers' approach. On the contrary, judging by what is said in paragraph 12, we take the view that they probably did substitute their own assessments for those of the employers.

In all the circumstances, we must allow this appeal and direct that the case be remitted for a hearing before a differently constituted Tribunal.