United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR MARTYN WEST (Representative) Peninsula Business Services Ltd 2nd Floor Stamford House 361-365 Chapel Street Manchester M3 5JY


 


MR JUSTICE KEENE: This is a preliminary hearing of an employer's appeal from a decision of an Employment Tribunal sitting at London (North) and entered on the Register on 19th November 1999. By that decision, the tribunal determined unanimously that the respondent, as he now is, had been unfairly dismissed.

1. The respondent had been employed by the appellant company since January 1998 as its financial controller. His employment was terminated in July 1999 on the ground of gross misconduct. The allegation was that he had made unauthorised payments to clients and had removed money from petty cash without going through the procedures which the company had in place for the payment of petty cash.
2. The tribunal heard evidence from the company's witnesses from which it concluded that, despite the allegation that the respondent had been dishonest in making these payments, it was impossible for the company to establish that any of the money, which Mr Chin had taken on petty cash vouchers, was dishonestly appropriated. The tribunal said that all that the investigations conducted by the company indicated was that Mr Chin had drawn petty cash for legitimate purposes. He had done that contrary to instructions issued by the company, namely that the signatures of senior officials must be obtained, but he had drawn the money from petty cash for legitimate purposes and vouchers existed accounting for all sums drawn. Consequently, the tribunal concluded that it could not be said that the respondent had dishonestly appropriated any of the company's funds.
3. The tribunal concluded that the respondent had failed to carry out the company's standing orders as to the obtaining of petty cash, but that was all he had done. In those circumstances it found dismissal to be unreasonable since what should have happened was the giving of a warning to observe those rules in future. It said:

"3 … To dismiss him for a breach of those rules when dishonesty was not established must be regarded as unfair."

4. The tribunal also rejected an argument that the respondent was partly to blame for his own dismissal. It said that having regard to the circumstances, namely that Mr Chin was the financial controller of the company, and the fact that all the money had been drawn for legitimate purposes, it was not prepared to say in this instance that he was partly to blame for his dismissal.
5. It is contended on behalf of the appellant first of all that the tribunal's extended reasons contain no reference to the leading cases setting out the appropriate test on reasonableness of dismissal. Mr West, who has appeared on behalf of the appellant this afternoon, accepts that a tribunal does not have to refer to such cases by name, but he contends that one needs to be able to see from the reasons that the proper test has been applied. In his submission, that is not possible with the extended reasons in the present case. Secondly, he argues that it appears from the tribunal's decision that the tribunal substituted its own view as to what was reasonable for that of an employer. Thirdly, he argues that the tribunal went wrong in law in that it decided that dismissal was unfair without hearing evidence from Mr Chin himself. It, in effect, decided that it had heard enough when the appellant's witnesses had concluded their evidence. It is also alleged as one of the grounds of appeal that the Chairman of the tribunal failed to consult the lay members before the decision was made. Finally, it is sought to be argued that there was contributory fault by Mr Chin here which should have resulted in some reduction in percentage terms in the award made. Mr West submits that on the evidence any reasonable tribunal must have found that Mr Chin was culpable to some extent.
6. We do not read the tribunal's decision in the present case as failing to observe the statutory test of reasonableness as classically expounded in cases such as British Leyland Ltd v Swift [1981] IRLR 91 and Iceland Frozen Foods v Jones [1982] IRLR 439. It was at least implicit in the decision that the Employment Tribunal took the view that to dismiss rather than to warn in these circumstances fell outside the range of responses of a reasonable employer. For example, at one point in the extended reasons they say:

"3 … It was clear that the proper attitude of an employer in these circumstances ought to be that the Applicant should be warned that for the future he must observe the Respondents' rules about the drawing of petty cash. …"

That seems to us to imply that to take a different course of action and to dismiss did fall outside the range of responses, which could be expected from a normal and reasonable employer. It is right that the tribunal below made no reference to the test in British Home Stores v Burchell [1978] IRLR 3379. However, its findings do amount to a conclusion that, whatever the appellant's belief in the respondent's dishonesty, it did not have available to it anything which could be seen as reasonable grounds for that belief. That, as this Appeal Tribunal pointed out in Midland Bank v Madden [2000] IRLR 288 at page 291, paragraph 20, is an objective test, which the employer has to show was met. That links in with the ground of appeal related to the fact that the tribunal decided the dismissal was unfair simply on the basis of the company's own evidence. While a tribunal must, in our view, be cautious about reaching a decision without hearing an applicant, it is not improper for it to do so in an appropriate case. Here, on the company's own evidence, the tribunal was able to conclude that the dismissal was unfair. In the circumstances of this case we cannot see that it can be argued that the tribunal went wrong, in effect, by stopping the proceedings at that particular stage.

7. The contention that the tribunal substituted its own view for that of the employer does not seem to us to be truly arguable. The tribunal expressly referred to whether an employer would dismiss for such conduct and decided that an employer would not. It was seeking, therefore, to put itself in the shoes of an employer and not to substitute its own view of reasonableness for that which would be taken by a reasonable employer.
8. The allegation that the Chairman failed to consult the lay members before the decision was made is one which we find surprising. The extended reasons, as we understand it, were produced subsequent to the immediate decision being made at the hearing itself. The heading to those extended reasons indicates that it was unanimous decision. We can see nothing which leads us to believe that the decision was not the decision of all three members of the tribunal. It needs to be borne in mind that when, as here, a case goes on over the lunch break, the tribunal members will have consulted and will be able to consult further during the case without that necessarily being immediately apparent to the parties involved. Consultation does not necessarily require audible exchanges of views when the members of the tribunal have already had discussions about the case on a preliminary basis. We can see no arguable ground of appeal under this heading.
9. Finally, we turn to the ground which it is sought to put forward in respect of contributory fault on the part of the employee. We bear in mind that the approach which we have to adopt here is that this Appeal Tribunal should only interfere if the tribunal below has adopted a legally incorrect approach or its decision is perverse in the Wednesbury sense: see Hollier v Plysu Ltd [1983] IRLR 260 CA which is binding upon us. Mr West seeks to argue that the decision in this respect by the Employment Tribunal was indeed perverse, that is to say, one to which no reasonable tribunal properly directing itself as to the law could have come. According to the tribunal Mr Chin recorded every payment which was in issue and used such payments for legitimate purposes. All that he failed to do was to obtain the signature of senior officials. Whatever we would have decided on this, had we been sitting as the tribunal of first instance, we do not regard the Employment Tribunal's decision on contributory fault as one to which no reasonable tribunal could have come. Nor do we believe that that is arguable.
10. In those circumstances, it follows, that we can see no arguable point of law which truly arises on this appeal, and in those circumstances this appeal must be dismissed.