United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	PAUL GOLDING QC Messrs Lewis Silkin Windsor House 50 Victoria Street London SW1H 0NW
For the Respondent	GORDON WIGNALL (of Counsel) Messrs Berrymans Lace Mawer Salisbury House London Wall London EC2M 5QN


 


JUDGE ALTMAN

1. This is an appeal from the decision of the Employment Tribunal sitting at Reading in March and April 1999 over two days of oral hearing and one day of decision-making.
2. The finding of the Employment Tribunal was that the Respondent to this appeal was unfairly dismissed. Against that finding there is no appeal. The second finding of the Employment Tribunal was that the Respondent contributed to her own dismissal to the extent of one third and it is from that finding that the Appellants appeal. The matter before the Employment Tribunal stands awaiting the listing of the adjourned hearing to assess remedy. It is also being argued that the Employment Tribunal erred in its approach to what is sometimes called the "Polkey deduction," as to whether a fair procedure would have made any difference. That is a label that is perhaps undesirable, as Morrison J said in an earlier case. In the light of our decision on the question of the contribution we have not been asked to deal with further arguments about whether there may have been a fair dismissal had a fair procedure been followed.
3. It is perhaps helpful to outline very briefly the facts which led to the finding of unfair dismissal because the essential issue that was addressed to the Employment Tribunal by the employer was that the reason for dismissal was dishonesty. There were conflicts of evidence before the Employment Tribunal, which were central to that issue. It is argued on behalf of the Appellant that a process of seeking to resolve that issue once contribution had been raised was an essential stage in seeking to assess any degree of contribution.
4. The Respondent was the group sales diplomatic account manager of the Appellants. She received targets for sales, and she received a target of 93 for the year 1997. The Employment Tribunal found that it was not clear as to which particular areas of the Respondents activities a target applied. The assistant of the Respondent, Ms Walden, subsequently gave evidence to the Employment Tribunal of a dishonest transaction for which the Respondent was subsequently dismissed in January. The issue arose in this way. Ms Walden asserted that in January 1998, when looking at the sales from the previous year Ms Walden reported only 17 sales. It appears, from the way the evidence is asserted in paragraph 3(g) of the decision of the Employment Tribunal, that in her evidence to the Tribunal Ms Walden claimed that the Respondent had prepared a false list of figures with an inflated number of sales upon it which was then sent to Turin, the base of the Respondents. However later on it appears that at the time of the disciplinary hearing referred to in paragraph (I) of the decision it was she, Ms Walden, who had been asked by the Respondents to alter the sales figures. But be that as it may, whether it be that it was the Respondent who carried out the alteration, or allegedly Ms Walden on her behalf, the allegation was that this was a dishonest deception of senior management by the Respondent.
5. In making their findings of fact, and dealing with both propositions the Employment Tribunal said in paragraph 3(g): -

"The (Respondent) denied that she had prepared a list of false figures or that she had asked or instructed Ms Walden to send incorrect figures to Turin. In the event we did not find it necessary to come to any factual conclusion on this particular issue."

6. In the following paragraph they go on to look at the figures and whilst coming to a finding as to the approximate sale figures for the year, and finding that the figure reported differed very significant from the approximate figure, they were unable to come to any more precise finding. The process by which the Employment Tribunal came to a finding of unfair dismissal was concerned with investigating what happened between January 1998, when these figures were sent to headquarters in Italy, and dismissal which took place on 24 September followed by an expeditious appeal concluded five days later.
7. The Employment Tribunal made a number findings as to the procedure in fact operated as to what was in the mind of the manager at the varying stages of the procedure and in relation to the quality of the evidence available and came to a conclusion that there was an unfair dismissal. In the light of the conclusion to which we have come it is unnecessary to detail this further.
8. Having done that the Employment Tribunal went on to consider in paragraph 9 the question of contribution. They said: -

"Having so found we have considered the question of contribution. It is the (Appellants') case that the (Respondent) deliberately falsified the figures. As a Tribunal, we make no finding to that effect. We are satisfied nevertheless, that as a senior Manager who bore responsibility of reporting matters to Turin, it was incumbent upon the applicant to ensure that the figures relayed were accurate. We doubt if serious issue would have been taken over an inaccuracy of one or two sales units. When invited to do so the parties were themselves unable to reach any agreement as to the actual sales figures and we have not been able to identify them ourselves with great precision. It is clear, however, that sales figures of approximately 53 as against a reported figure of 93 show a very serious discrepancy. As the responsible Manager, in our judgment, the applicant bears a measure of responsibility for this. Whilst we do not say that her actions were dishonest, they were in our view blameworthy and culpable to the extent that they should be taken into account in assessing remedy. We would assess the (Respondent's) contribution to her dismissal at one third."

9. In the process of considering the way in which the Employment Tribunal approached the finding on the issue of contribution, our attention has been directed to the specific findings in paragraph 3(g) in which they say: -

"In the event we did not find it necessary to come to any factual conclusion on this particular issue,"

namely the issue as to what took place between the Respondent and Ms Walden, the transaction which lay at the heart of the allegation by the Appellants of dishonesty. Paragraph 9 of the decision of the Employment Tribunal states: -

"It is the (appellants') case that the (respondent) deliberately falsified the figures. As a Tribunal, we make no finding to that effect."

and later on: -

"Whilst we do not say that her actions were dishonest"

10. We are invited to conclude that the Employment Tribunal erred, when considering the question of contribution, in missing out a stage of analysing the evidence and seeking to come to a finding on a balance of probabilities as to which evidence they accepted and which they rejected so as to seek to resolve that central issue in the case. Of course it is not a requirement of a decision of an Employment Tribunal that they set out the evidence they have heard, or indeed, set out their findings on each aspect of the evidence in a case, still less that they set out their analysis which led to those findings. But, the argument is that the process of seeking to make a finding really needs to be accomplished in this case where that was an issue at the very heart of the matter.
11. On behalf of the Respondent it is argued that this decision should be read as the process of finding that whilst there was a subjective belief in dishonesty on the part of the employer, it was not objectively verified at the time nor was it one which the Employment Tribunal accepted. Indeed, it is said that the decision should be read as a finding that there was no dishonesty. It is pointed that if someone is merely blameworthy for failing to check important figures that in itself implies that they were not dishonest. Our attention is drawn particularly to the wording of paragraph 9 and it is argued that although the wording was not felicitous, the import of the Employment Tribunal's decision is that they effectively rejected the proposition of dishonesty. We disagree. It is conceded that that argument is inconsistent with the words of the passages which we have quoted. But we acknowledge the argument that we should not pick over in minute detail through a magnifying glass the decision of the Employment Tribunal in order to asses what was in the Tribunal's mind. We should take a broad look at the decision. However, the Employment Tribunal were faced with conflicting evidence. We imagine that they had sat through two days of evidence, a lot of which would have been devoted to asserting and challenging evidence on the central issues. The only conclusion we can reach by taking a broad as well as narrow view of the words of the decision is that if the Employment Tribunal had thought it part of their duty to consider the need to strive to reach a finding on that issue, there would have been contained within the decision itself some indication of the analysis which they had carried out. We say that because in other respects this appears to be a careful and substantial decision based on an analysis of all the evidence.
12. It is understood, and Mr Golding has acknowledged, that in paragraph 3(g) in order to reach a decision on the primary issue of liability, the Employment Tribunal may reasonably have come to a conclusion that certain issues of challenged evidence do not need to be resolved. For the purpose of the tests that have to be applied in relation to compensation, however, we refer to Section 123(vi) of The Employment Rights Act 1996 which provides: -

"Where the Tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportions as it considers just and equitable having regard to that finding."

13. We note that that section refers to any action of the complainant. In order to get to that process under that section, it seems to us that once the issue is raised on behalf of an employer that an employee by their dishonesty has contributed to the dismissal, there then is an issue which a Tribunal does have to seek to resolve. An Employment Tribunal will always seek to avoid dealing with issues which may be upsetting or annoying to one party or another where such issues are immaterial to their decision and we can sympathise with an Employment Tribunal which seeks to approach a decision in that way. However it does seem to us in this case that there was here an issue that did have to be resolved and that there is that gap in the decision.
14. The mere fact that there has been a finding of one third contributory conduct on the basis that there is blameworthy conduct is not in our view a finding that is to be read as a positive finding that by implication means that the Employment Tribunal must have found there was no dishonesty. The passages to which we referred plainly tend to indicate that the Tribunal did not address that issue. If they had addressed the issue of dishonesty, we find it impossible to imagine how they would have come to use those words in paragraph 3(g), that they did not find it necessary to come to any factual conclusion upon it or in paragraph 9 where they make no finding on the allegation of deliberate falsification or dishonest actions. We say that because all those expressions are negative expressions and to then go on to imply into them a positive finding of blameworthiness together with a positive finding that the allegations of dishonesty are not made out and are unfounded, is, it seems to us, to fly in the face of what actually happened. To paraphrase our understanding of the way in which the Employment Tribunal approached their assessment it was to say "setting aside the issue of dishonesty, even if the Respondent is right she failed in a number of important respects in the discharge of her responsibilities and that must have been blameworthy so that even on her case it would be wrong for her to have full compensation and there falls to be this deduction."
15. In those circumstances we are satisfied that the assessment of compensation requires, in this particular case, an exercise which has not yet been carried out, that is to address the conflicting evidence in the case in relation to whether the Tribunal find, in the words of Section 123 that the Respondent contributed to her dismissal by reason of the dishonesty alleged by the Appellants. That is an issue which is yet to be resolved and, we are confident in saying, an issue which remains yet to be evaluated and determined by the Employment Tribunal. We find therefore that as a matter of law the Employment Tribunal erred in failing to go through that exercise and we allow the appeal to that extent. Having done so the Appellants do not seek to pursue the Polkey issue and the many interesting arguments that might have arisen from it.
16. At the conclusion of the arguments there was a discussion with the representatives of the parties, to both of whom were most indebted for the clear and straight-forward way the matters had been argued, as to the best way to resolve this matter. Frequently when an appeal is allowed a case is sent back for a complete re-hearing, but in this case there is an unchallenged finding on the primary issue of unfair dismissal and it seems to us that, taking all matters into account, it is desirable that that should not be re-opened, at least when there is no application that it should be. The question of contribution is the one that falls to be determined.
17. We have come to the conclusion that the best result is for this case to be remitted to the same Tribunal to assess contributory fault and to hear such evidence on that issue as may enable them to do so. In order to facilitate that we allow the appeal to the extent of setting aside the finding of the Employment Tribunal that there was a contribution in the form of their original decision on the basis that should the Employment Tribunal not find that there was dishonesty and should they not make a finding of contributory fault on that basis, then in those circumstances the original assessment of one third contributory fault will be restored.
18. We were asked to consider at the end of that decision whether there was any guidance we could give to the Employment Tribunal as to the extent to which further evidence should be called. We feel that we are too remote from the evidence that was given to the Tribunal and it is not we who have a recollection or the notes of the evidence. It seems to us that it may be helpful for the Employment Tribunal to list the matter for a short directions hearing so that the parties can make representations, either in writing or orally, as to the way in which it is best to approach the matter. However, we feel that the actual procedure to be adopted by the Tribunal is best left open to them and we do not think that we should put any strait jacket on it by restricting the evidence that they are to entertain on this matter.