United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	THE APPELLANT IN PERSON
For the Respondent	MR ENGLEMAN (Of Counsel) Instructed by Messrs DLA Solicitors 3 Noble Street London EC2V 7EE


 


JUDGE ALTMAN

1. This is an Appeal from the decision of the Employment Tribunal sitting at Manchester after a hearing that took place on 18 and 19 May 1999. We reserved the giving of judgment in this matter for a week for want of time on the day of the hearing of this Appeal and gave leave to the Respondents to submit some further representations in the light of the fact that the Appellant had disclosed a lot of material at the last minute before the Appeal. We have seen that further information which clarifies the position of the Respondents and the evidence that was before the Employment Tribunal albeit our focus in the event in this case is on the actual decision itself.
2. The Appellant also has sought to furnish further information. We have ignored that because his submissions were concluded and there was no further information to receive. He has also written to take issue with the way in which we proceeded with the Appeal in one respect, namely that it seemed initially that it might assist him and us if he read out his arguments in the document that he had prepared. But after a time it seemed sensible to suggest that we should relieve him of the need to do this and that it would be a more expeditious way of handling the Appeal if we were to retire for a few minutes and read the submissions to ourselves, and we pointed out that the Appellant could then add any matters that he wished to. We were all under the impression that that was a course welcomed by the parties at the time and we are therefore surprised that after the event the Appellant seemed troubled by the procedure.
3. One of the difficulties that an Employment Appeal Tribunal always has is reconstructing the case within the limits of the information that was before the Employment Tribunal and we are conscious in this case that the way in which the matter has been presented to us by the Appellant, through no fault of his own as an Appellant in person, may well include arguments and material that were not specifically canvassed at the time. However we have had to do our best. We have had a selection of some of the evidence placed before us by both parties; we have sought to rely on the main material before the tribunal but have not begun to attempt to reconstruct the whole of the evidence that was before them. We are indebted for the material submitted by both parties but we are aware that over 2 days of examining documents and seeing witnesses more evidence will have been produced
4. It is unfortunate that the proceedings of the Tribunal and the Employment Appeal Tribunal, without anyone being to blame, have brought with it a substantial passage of time. It was nearly 2 years ago now that the Employment Tribunal heard an initial directions hearing. The originating application was filed in December 1996, some 4 years ago and there were proper and intentional delays at the outset because of a pending high court action.
5. The Appellant was a senior investment executive with the Respondents. He started work for them in 1965. He had just left school. This was his first job. He worked for them for over 30 years in an environment in which the Employment Tribunal took note of the "various strict rules and regulations" governing the activities of the Respondents in being regulated by 2 bodies, the Securities and Investment Board and the Securities and Futures Authority.
6. Magnum Power Limited was brought to the stock market in 1994 by the Respondents. The Employment Tribunal found

"it was acknowledged as being a highly speculative investment - certainly not one in which an investor wanting security or "blue-chip" status would invest."

It was the Appellant's case however that in the Respondents organisation, that share was put forward throughout the major part of the time with which this case has been concerned with a recommendation "to buy". We have seen a document headed 'Report on Magnum Power/Craig Towler Situation' which shows that it was only in June 1996 that the previous "to buy" recommendations were termed "to hold". We pause to observe that the Appellant's case appears to have been to some extent the consideration of the division of responsibility between himself and the Respondents for what had occurred, which does not feature in the Tribunal's reasons. The Corporate Finance Section of the Respondents had been responsible for the flotation of Magnum Power and this Section operated independently of the Investment Section where the Appellant worked. It appears that whilst initially the shares provided an attractive investment, the Employment Tribunal found that by June 1996 the shares began and continued to plummet in price. It appears, so we are told, that the Appellant's case, in seeking to avoid responsibility, was that the shares should have been downgraded generally by the Respondents..

7. The Employment Tribunal did not deal with this in any clear detail, for they record that it was with the agreement of the parties that this background aspect and the question as to whether the Respondents should share any responsibility for the way in which they separated the functions of company promotion and share dealing were set aside. Although it is not essential to our decision, and whilst we acknowledge the desirability of a Tribunal's focussing on essential issues and avoiding extending what was already a long case, we have had as the matter has presented itself to us, some difficulty in identifying the consequence of that approach. If the information on which the Appellant advised his client was over-optimistic, so that it put those investments at greater risk than should have been the case, it would appear that any judgment as to the degree of the Applicant's responsibility for that, and the susceptibility of the Appellant as a result to dismissal for gross misconduct, would have involved the investigation of the basis on which he exercised the judgment he did. The Employment Tribunal, in a way to which we turn later, focussed on the allegation that the Appellant exposed his employers to risk by permitting certain clients to invest in a way which might lead them to be unable to pay their debt to the Respondents. The extent to which that was serious seems to us to have been judged by the Tribunal, in relation to the financial implications in fact and not just in terms of the risk of such loss. We were also told about the "to buy" recommendations of the Respondents. It is the action of the Appellant in facilitating the purchase of shares by clients and the consequential potential loss to his employers for which he was later criticised.
8. Having set out their findings, the Tribunal then set out their findings as to the reason for dismissal in paragraph 18:

"The Tribunal was therefore satisfied that the reason for the applicant's dismissal was that he permitted a situation to arise in which clients of the respondents lost in the region of £500,000 when he should have ensured that those clients were in a financial position to stand such losses and further to have ensured that the respondents themselves would not be at risk in respect of such losses. The Tribunal has to have regard to the amount of money involved and the position of the respondents had they continued to employ the applicant after such a disastrous event."

In a way that we will seek to expand upon in due course, having read that paragraph we are left asking ourselves. 'Did the Tribunal conclude that there was in fact a disastrous event that caused loss or simply a risk of loss? Did the Tribunal conclude that the appellant was dismissed for providing a bad service to clients in permitting them to lose money when they could not afford to do so? And when the Employment Tribunal describe the conduct of the Appellant for which he was dismissed as the "permitting" of a situation, what is it that he actually is alleged to have done to constitute such permitting?

9. In paragraph 15 of their decision the Employment Tribunal refer to a situation

"That the Applicant had allowed, or perhaps even encouraged, to occur";

we are uncertain as to what it was the Tribunal found that the Appellant had actually done. Central to many of the matters that were investigated in the disciplinary hearing, as we understand it, was the concern of the Respondents that the Appellant had, as it were, exceeded his brief vis-a-vis his clients by operating in what was called a "discretionary" way, rather than an "advisory" way, that is his having the discretion to make judgments rather than his advising the client and waiting for the client's instructions. Bearing in mind that that was part of the Respondents' concerns about the way in which the Appellant was approaching his work, we find it difficult to see within the decision of the Tribunal where they placed these activities.

10. We turn now to consider grounds 1,2, 3 and 5 of the Amended Notice of Appeal, being the grounds that remain following the preliminary hearing. The first ground relates to a report from a Mr Lindeyer which the Appellant sought to introduce at the outset of the hearing before the Employment Tribunal as part of his case. This was in the nature of being an expert's opinion on matters which may have been central to the consideration of the Tribunal. Upon the Respondents resisting the application to introduce that evidence the Employment Tribunal refused to admit it on the dual ground that first the Tribunal were not told that it contained without prejudice material, and secondly, it was a report that was not going to be spoken to in evidence by the writer himself. It was a report which could not be cross examined on. Whilst we understand that the Respondents had had that document in their possession for a substantial time it had not been drawn to their attention by the Appellant as something he wanted in evidence at the hearing until just before the hearing itself, so that the Respondents had had no opportunity to deal with the substance of the report and to prepare their own competing material.
11. Rule 13(1) of the Employment Protection (Constitution and Rules of Procedure) Regulations 1993 makes it clear that the Employment Tribunal has a discretion which entitles it to regulate its own procedure. The Tribunal in this sort of situation had to weigh, on the one hand, the potential relevance and importance to the Appellant's case of this material against, on the other, the almost impossible task of assessing it fairly in a situation where the Respondents were unable to put the opposing arguments.
12. In the situation as it was presented to the Tribunal, the decision to refuse to admit the report was well within the normal exercise of the discretion of Employment Tribunals exercising such discretion reasonably. We dismiss that ground of the Appeal. However, in doing so we would wish to point out that having read the report we feel that the Tribunal should not have been told that a ground for objecting to it was that it contained without prejudice material. There is a very short passage which could, if necessary, readily have been excised from the report without interfering with its basic content. Bearing in mind the fact that the Respondents were well represented before the Employment Tribunal that ground would probably better not have been put. That does not affect our overall judgment on this issue.
13. We turn to the second ground of appeal and set this out in full:

The Tribunal was perverse and /or erred in law in that it failed to consider the reasons given by the Respondent for dismissing the (Appellant): namely (1) the (Appellant's) alleged breaches of the rules of the Securities and Futures Authority; (2) the manner in which the (Appellant) had not acted with due diligence and (3) in what way trust and confidence had been breached between the (Appellant) and the Respondent.

The issue under this ground appears to be, as indicated in the judgment on the preliminary hearing before Judge Peter Clark in this Tribunal, whether the Employment Tribunal considered and found a different reason to that given by the Respondents. It seemed appropriate to set out in more detail than in the oral judgment the records of the Respondents of their dismissal procedure.

A. On the 3^rd September 1996 the Chief Executive Mr Robinson wrote to the Appellant suspending him pending disciplinary proceedings.

"Further to our discussion today regarding various problems including what appear at this stage to be breaches of SFA rules.

In particular the following specific matters have come to the Company's attention:

1. Inadequate knowledge of the financial circumstances of your clients…"

Other matters were raised which the Employment Tribunal found were not part of the main reason for dismissal. He continued:

"These are very serious issues any one of which could , if proven, amount to gross misconduct resulting in your dismissal…"

B. On the 13^th September a formal notice requiring the Appellant to attend a disciplinary meeting to deal with the following matters was given to the Appellant:

"1. The competence, or otherwise displayed by you in handling the affairs of a number of your clients; in particular, but not limited to, clients with investment positions in Magnum shares.

2. Your apparently inadequate knowledge of the financial circumstances of a number of your clients,

again with special reference to Magnum share investments…"

C. The record of the disciplinary meeting shows that the complaints were dealt with in reverse order. Under item 2 the Respondents explored the Appellant's knowledge of the financial position of two named clients. This was linked to discussion of the question

"Why did you allow people to roll-over positions who then were unable to pay the resultant loss on a roll-over situation"

and there was further discussion of the clients' ability to pay. The Appellant spoke of the 'Magnum debacle', referring to the collapse of that Company's share price. The discussions about the financial status of Mr East-Rigby was explored in some detail. Under item 1, the Appellant was criticised for advising clients to buy Magnum shares when he should not have done, and he denied that he so advised, maintaining that he was here operating for his clients on a 'deal only' basis. He was questioned about why he did not advise his clients to sell and his response was to the same effect.

D. On the 27^th September Mr. Green held a meeting with the Appellant to read out the Respondents' findings:

"Under item 2 concerning your knowledge of the financial circumstances of your clients, it is quite clear to us, whether or not your were told the truth by your clients, you certainly did not have adequate knowledge of their circumstances. If, indeed, you did have true knowledge or even suspicions of their financial circumstances, then you should certainly not have allowed them to open the positions which they did in Magnum shares.

Under item 1 which concerns the competence or otherwise that you displayed in handling your clients affairs, I regret to advise you that this hearing cannot accept your statement that you did not give advice to these clients. We have read telephone transcripts and we have considered the evidence and as far as we are concerned, you quite definitely did give advice to clients, particularly on the question of Magnum shares.

…this Committee finds that you did not act with due diligence or in a competent manner and this has destroyed trust and confidence between the company and yourself. We find that you did not act in accordance with the principles of the Securities and Investment Board and you did not act in a fit and proper manner as required by the SFA and the SIB. This leads my to the recommendation of the Disciplinary Committee which is that, having taken into account all the evidence heard, transcripts presented to it and the fact that you refuse to accept any responsibility for your actions, the Disciplinary Committee recommend that you be dismissed on the grounds of gross misconduct and incompetence…"

E. The letter of dismissal of the 27^th September stated:

"The panel took the view that you have a personal responsibility to ensure that the requirements and principles of the SFA Rules are complied with. You did not do this. You held a position of trust which you breached.

Your actions were well below the standard which the Company expects of their employees in dealing with such matters. This is made worse by your failure to accept that you have done any wrong or taken any responsibility for your actions. The Company cannot continue to employ anyone who does not accept any responsibility for their actions…"

F. The letter of the 23^rd October set out the conclusions of the Appeal Committee:

"In coming to its conclusions the Appeal Panel makes the following observations:

1(a) The SGA places a clear responsibility on authorised persons as individuals in

their conduct of investment business.

(b) The Company has a right to expect a high level of competence and diligence from its

executive personnel – the more so from senior and long experienced members of

staff.

(c) Any perceived failures of control or direction elsewhere in the organization would

not absolve the individual from the above responsibilities"

There had been a fact finding meeting with the appellant in June 1996, but the respondents felt able to keep him at work after it until the disciplinary matters in September and that meeting does not seem to form a part of the disciplinary proceedings.

In addition to the way in which the Respondents expressed their complaints against the Appellant at the time of dismissal proceedings, their Notice of Appearance to the Employment Tribunal stated:

"After a thorough investigation and disciplinary hearing a Disciplinary Committee found that the (Appellant) had breached the rules of the Securities and Futures Authority. The Disciplinary Committee also found reasonable grounds to believe that the (Appellant) had not acted with due diligence or in a competent manner and had destroyed the trust and confidence between the (Appellant) and the Respondent, which in itself was a substantial reason for dismissal."

The respondents' complaints appear to have related to 2 matters – first, the appellant's alleged incompetence or lack of diligence in advising his clients to buy, or not to sell, and secondly his failing to be alive to the poor financial circumstances of some of his client whilst conducting roll-over transactions for them and thereby putting them in an 'open' situation. These complaints were treated as gross misconduct calling for dismissal because of the breaches of the SFA principles governing the actions of individuals, the term as to trust and confidence, and the obligation to act with due diligence and competence. It was these breaches, based on the two items explored in the disciplinary meeting, that appear to have been expressed as the reason for dismissal. There was little reference in this to actual financial loss. The Respondents may well have considered that the consequence of these breaches was such loss, or the risk of such loss, although it may well be – as the third finding on the appeal indicated – that it was not thought that the actions of the Appellant was the cause – or the sole cause of the losses. In any event in expressing the reason for dismissal the Respondents appear not to have relied on any losses or risk of losses, but rather on the way in which the Appellant was performing his duties in relation to the standards expected of him.

14. In considering the approach of the Employment Tribunal to the reason for dismissal, we turn to the form of their decision. In paragraph 11 they deal with the work of the Appellant and the handling of investments on behalf of clients including one named one in particular, Mr East-Rigby. They went on to say:

"Suffice it to say that the (Appellant) permitted Mr East-Rigby and other investors to be allowed extended credit, funded by the respondents, to purchase shares in Magnum Power, no doubt in the belief that such was a highly attractive investment. Unfortunately, by June 1996, the optimistic predictions for that company had proved to be misguided. The shares began and continued to plummet in price. What the applicant then permitted to happen was a "roll-over" situation whereby the clients were permitted by him to further postpone payments in respect of the purchase of the shares and indeed to continue to purchase their shares, in a situation in which, it could be said the applicant on behalf of the clients was "chasing losses". To cut a long story short, Magnum Power eventually collapsed and the net result was that the clients involved incurred total losses in the region of £500,000…"

15. At this point the Employment Tribunal seem to be drawing attention to the fact that the "permission" of the Appellant in handling his clients affairs had caused them to lose a lot of money. The Employment Tribunal then go on:

" …the respondents were exposed to potential loss in the same sum and in fact sustained financial losses of approximately £150,000"

16. The Employment Tribunal in paragraph 12 of the decision then went on to consider the use of what was described as the "roll-over" system which seems to be the process by which, generally speaking, on a rising market a client was first permitted to buy shares with a 25 day settlement date, and then to sell the shares in advance having to pay for them, thereby paying for the initial purchase out of these later proceeds of sale. These proceeds would also show a profit which would then be used, together with renewed credit, to reinvest in a purchase of an equivalent number of shares, again as a rolling process of investment, which had been initially started by the client without having to advance capital. In this case it appears that there was a falling, rather than rising market and a similar process was used. Alternatively what occurred was simply a question of investing on credit, with delayed settlement dates for clients in relation to whom the Appellant failed to do sufficient to ensure that such clients had the means to meet such credit.
17. Having made their findings as to what happened in paragraph 11, in paragraph 13 the Employment Tribunal say this:

"As a result of the "debacle", the Appellant was suspended on full pay."

The Employment Tribunal in paragraph 14 then go on to describe the disciplinary hearing in relation to which the Appellant complained that he did not have adequate advanced warning of the allegations to be made. We refer to it here to give a continuous account of the Tribunal's reasons. The Tribunal made a finding that the Appellant with his intelligence, experience and knowledge of what had happened must have known precisely what he was being accused of. The Employment Tribunal then went on to consider the decision of the disciplinary hearing and they found that it was:

"Conducted in a rather unusual manner and the Appellant quite properly advances the argument that there was no specific allegation made against him that he had breached any of the regulatory rules or activities previously conducted and condoned by the Respondents."

18. The Employment Tribunal then go on to make this following finding. They say:

"That is, in the Tribunal's view, too naïve an approach towards what was an horrendous situation that the Applicant had allowed, or perhaps even encouraged, to occur. The Tribunal is satisfied that Mr Green and his committee had not made any irreversible decision beforehand as to the outcome of the disciplinary hearing and is satisfied that, having regard to the unusual circumstances of the case, it was fairly conducted. The Appellant had a legal representative with him, although it would appear that he only acted as a "note taker".

We would observe that in that paragraph the Tribunal appear to be assessing the fairness of a procedure in the light of the seriousness of the allegations being made in a way which, on the face of it, seems to suggest that because the situation was "horrendous" the complaint about the procedure was "too naïve". They then made the finding in paragraph 18 which I have already set out.

19. Following the decision of the Employment Tribunal and pending the hearing of this appeal, the Appellant made clear his challenge to the quantification of losses to clients at £500,000 and the attribution of this to himself. It is the Appellant's case that quantification of those losses was sought but never given to the Employment Tribunal and indeed no detailed evidence appears to have been given about them. The learned chairman has described his notes in a document dated 8^th December 2000, rather than send the notes themselves. The evidence as to quantification of loss was that of Mr Green whose evidence is summarised by the Chairman as

"His best estimate of financial losses sustained by clients of the Respondent was £500,000.

The learned Chairman went on to say:

"It was not the Respondents case that such losses were attributed to any act or omission on the part of the Appellant. What paragraph 18 of the decision is intended to mean is that:The Tribunal was satisfied that the reason for the Appellant's dismissal was that he permitted a situation to arise in which he failed to ensure that those clients who lost in the region of £500,000 were in a financial position to stand such losses and further that he failed to ensure that the respondents themselves would not be at risk in respect of such losses"

The first sentence is important. It confirms that the Chairman's record of evidence shows that the Respondents were not attributing the losses to the Appellant, and is consistent with the passages quoted from the disciplinary process. We have not, in fact, thought it right to take account of the observations as to what paragraph 18 of the decision meant to say, as it was written by the chairman after the appeal had begun. We are sure the chairman was endeavouring to assist us in providing this interpretation of his words, but we have, of course, to look at the words of the decision itself and of any relevant notes of evidence made at the hearing.

20. The Employment Tribunal then in paragraph 19 go on to consider the quality of the actions of the Appellant as relating to his conduct, and in paragraph 20 to consider the reasonableness of the responses of the employer.
21. This second ground of appeal is concerned with the reasons for dismissal coupled with, it seems to us, the uncertainty on the face of the decision as to whether the Tribunal were making a judgment as to whether the losses had been incurred either to clients or to the Respondents and whether that was relevant to the reason for dismissal.
22. The findings of fact of the Employment Tribunal was not only of losses to the clients of £500,000 but of actual losses to the Respondents of £150,000. And the Tribunal itself felt able to describe what had happened as being a "debacle", as being "an horrendous situation" and they clearly formed a judgment themselves that what the Appellant had done was very serious indeed, notwithstanding that it was not the Respondents' case that the Appellant caused the loss. We are driven to conclude, as will be seen from the passages to which we referred, that the Employment Tribunal were themselves forming a judgment as to the seriousness of the Appellant's behaviour based upon their judgment that he had incurred very substantial losses when not only had that evidence not been adduced in any detail, or in any way that could be tested before the Tribunal, but also in a way that appears to us not to be reflected in the Respondents own case. Additionally the extent to which Appellant was believed to be exceeding his brief with his clients does not appear to have figured in the findings of the Employment Tribunal. They concentrated on his duty to his employers to ensure that the clients could pay (item 2) not the extent to which he should have advised (item 1) when identifying the reasons for dismissal.
23. For completeness we summarise those features referred to in our oral judgment that lead to this conclusion:

    (a) The Respondents gave 2 reasons, set out in more detail elsewhere in this judgment but referring to first, the lack of diligence and capability in advice to clients over Magnum Power and secondly the lack of knowledge of the clients' finances when conducting roll-over, and forming the breaches leading to dismissal. The Employment Tribunal, in finding the reason in paragraph 18 make no reference to the first of these as forming part of the reason for dismissal

    (b) The Employment Tribunal do appear to ascribe the reason for dismissal, at least in part, to the losses they appear to find that the Appellant caused. There does appear there to be a clear finding of a linkage between the conduct of the Appellant complained of and the losses sustained in paragraph 18

    'the reason for the…dismissal was that he permitted a situation…in which clients…lost…

    The Tribunal has to have regard to the amount of money involved…'.

    This is heralded in paragraph 11 where in the paragraph which outlines the factual account of the activities of the Appellant, ending

    '…the (Appellant) on behalf of the clients was 'chasing losses'. To cut a long story short…the clients involved…incurred total losses in the region of £500,000…, the respondents were exposed to potential loss in the same sum and in fact sustained financial losses of approximately £150,000'.

    Here again there appears to be a finding of a linkage between the actions of the Appellant in 'chasing losses' and the losses of both the clients and the respondents. It is true that after referring to the losses of £500,000 in that paragraph, the Tribunal go on to state

    'when he should have ensured that those clients were in a position to stand such losses'

    but although the tribunal is referring to the second ground of complaint of the Respondents it seems to us that they are only doing so, as subsidiary to the losses allegedly thereby caused in relation to the reason for dismissal.

    This link is then referred to in paragraph 13 as being the 'debacle' that lead to the appellant's suspension, and where the chairman, dealing with the disciplinary hearing in paragraph 15 refers to the

    'horrendous situation that the (Appellant) had allowed or perhaps even encouraged to occur'

    this again does seem to carry forward the clear link between the actions of the Appellant and the losses that followed. We find that the tribunal is not referring to the risk of losses simply to illustrate the seriousness of the failings of the Appellant relied on by the Respondents, but is referring to actual losses as part and parcel of the reason for dismissal. Then, when considering whether the Respondents were reasonable in treating the reason as the reason for dismissal the tribunal refer to 'the magnitude of the losses', which again seems to support the general thread of the tribunal's findings to the effect that they were finding that the Appellant was responsible for such losses.

24. We do find, doing the best we can on the face of the material before us, that there does appear to be a mis-match between the way in which the Employment Tribunal expressed the reasons for dismissal and the way in which the Respondents themselves were doing so. Also, within the decision itself the Tribunal appear to be forming their own judgments in ascertaining the reason for dismissal as to actual losses to both clients and respondents as caused by the Appellant and which were not part of the reasoning of the respondents. If there was a "debacle" in that the respondents lost money, due to the Appellant, where was the evidence of that before the Tribunal in a way that it could be tested? And if on the other hand it was the way in which the Appellant was doing his work and the risk of loss that he was creating rather than the actual consequences that were the essence of the case so as to obviate the need to have detailed evidence, then how could it be described as a debacle? And indeed was there a "debacle" for which the Appellant was responsible as opposed to the "debacle" of the collapse of Magnum Power.
25. I return to the questions posed at the outset of this judgment and those that we have just posed because they do seem to us to be questions that point to the difficulty we have in ascertaining from the decision of the Tribunal the real reason for dismissal. We are left uncertain as to where the facts of this case fitted the distinction between an actual loss and the risk of loss.
26. We then turn to the third ground of appeal and it criticises the finding of a rather unusual manner for disciplinary proceedings, in view of the absence of specific allegations and in the light of a number of matters set out. I refer to what we have already pointed to in the decision, which seems to us to be the fact that on the face of it the Tribunal appear, at least in part of their decision, to have formed a judgment as to the appropriateness of the procedure in the light of what they viewed as "an horrendous situation". This echoes our finding under ground 2 of the Notice of Appeal. On the face of it, it does appear that the Employment Tribunal may have been influenced by their own view that a very serious situation had arisen rather than assessing what the Respondents own view of it was at the time. However, whilst it does seem to us that the way in which the decision is phrased by the Employment Tribunal appears to depart from the requirement to look at the reasonableness of the employer's approach to the dismissal procedure rather than the Tribunal's own judgment of the seriousness of the matter, nonetheless the Employment Tribunal were entitled to find on the evidence that the Appellant knew full well what the Respondents were enquiring about. We find that the Tribunal did not err in relation to ground 3 which is dismissed.
27. Ground 5 of the appeal relates to the alleged failure of the Tribunal to insist on the quantification of the losses. That was a matter within the discretion of the Tribunal and it does not seem to us that that constitutes in itself a valid ground of appeal, and it is dismissed. However, the argument does inform the findings that we have already made in relation to whether the Tribunal formed a judgment as to whether or not there were any losses. And if it be the case, as it appears to be, that part of the Tribunal's judgment was based on the fact that there was a very serious or as they described it, 'horrendous', situation, it does seem to us a fair argument that before forming that judgment they should have given themselves the opportunity to assess in more detail the evidence.
28. Returning to ground 2, we have come to the conclusion that the Employment Tribunal did err in this case when assessing the reason for dismissal in departing from what appears to have been the reason of the respondents for the dismissal. Accordingly, when the Employment Tribunal go on in paragraph 20 to consider the reasonableness of the respondents treatment of that reason as the reason for dismissal under Section 98(4) of the Employment Rights Act, they do not appear to have applied the respondents' own reason for dismissal to the question as to whether the respondents were reasonable in treating it as the reason for dismissal. In particular, they do not appear to have considered the extent to which it was the respondents' case that there was any actual loss caused by the applicant, but rather to have expressed their view in one part that there was, stating in paragraph 20 that one of the factors they take into account is "the magnitude of the losses". Were these reasonably laid at the door of the Appellant? It is likely on the evidence we have seen and the chairman's record of his notes of evidence that they were not actually laid at the door of the Appellant by the Respondent but they do appear to have been laid at his door by the Tribunal.
29. I have repeatedly in the course of this judgment referred to what appears on the face of the Tribunal decision because we are mindful of the fact that we have not assessed or investigated all the evidence that was before them and that a lot of statements have been made by the Appellant since that hearing as to what occurred before the Tribunal. This was a difficult case being handled by a very experienced Tribunal, but it seems to us that we must assess the case on the face of the decision itself and in this particular case for the reasons we have outlined we have come to the conclusion that the Employment Tribunal did err. The Tribunal do not appear to have asked the question 'what was the respondents' reason for dismissal' but rather 'what do we consider was the reason for dismissal.'
30. We have held back from any expression of view about the merits of the case and we wish to emphasise that we have none whatsoever. We cannot say if the Tribunal's finding under Section 98(4), bearing in mind the reasons of the respondents and that this was dismissal for gross misconduct of a long serving employee, would have been the same or different. We are driven to the conclusion that for the reasons I have outlined this Appeal must be allowed and must be remitted for reconsideration before a differently constituted Tribunal.
31. We would wish to make in that event some suggestions; first of all, bearing in mind the passage of time that there has been in the pursuit of this claim by the Appellant, that the final hearing be dealt with so far as it can be as quickly as possible and secondly, looking back as we now do over the pattern of these proceedings it seems to us that the Appellant must, as his own representative, school himself to recognise that he must establish in his own mind not only the extent but also the limits of his case so as to ensure that all concerned, himself, the Respondents and the Tribunal, are well acquainted in good time with what his case is and make sure that when it happens he presents it without regretting afterwards matters that he wished he had raised. It may well be that a directions hearing to clarify exactly what is to be heard will be useful, but that is entirely a matter for the Employment Tribunal itself.
32. Application for leave to appeal has been made. At this stage 2 matters have been canvassed. The first matter, it is said, is that the findings that the Employment Tribunal made which we have criticised were matters of fact not law. It seems to us that it is true that the Employment Tribunal were considering matters of fact. It seems to us that the error of law which we have sought to identify was the way in which the Employment Tribunal approached that task. Therefore that does seem to us to entitle us to have interfered in the way we did.
33. The second matter is that there may be an irregularity in that the submissions prepared by the Respondents were not fully considered. Those submissions were prepared after the last hearing before us. The situation was that when this matter began again to day I was not alive to the fact that documents had been submitted. We retired. The members confirmed as I think I have said that they have had these documents and had studied them in advance of our deliberations. I had an opportunity of looking at them and considering the extent to which it affected our judgments and we were able to discuss that. I recognise that that happened in a very short space of time. And all I would say is that we were endeavouring to act regularly and therefore cannot ourselves discern any argument that we did not do so. It may be for others to judge differently.