United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	Mr B Napier, Queen's Counsel Instructed by- Messrs McGrigor Donald Solicitors Pacific House 70 Wellington Street GLASGOW G2 6SB
For the Respondent	Mr G Bathgate, Solicitor Of- Messrs Allan McDougall Solicitors 3 Coates Crescent EDINBURGH EH3 7AL


 


LORD JOHNSTON:

1. This is an appeal at the instance of the employers against a finding by the Employment Tribunal that the respondent employee had been unfairly dismissed with consequent financial orders. No appeal is taken against the latter.
2. The background to the matter was a dispute between the parties over the working of overtime which, in turn, led to the appellant disciplining the respondent for gross misconduct in respect of his refusal, after a certain stage, to meet the overtime demands of the appellants. The matter has an extended history but, essentially, as will be seen from the form of the decision, it turned upon whether or not the respondent had given adequate reasons to the employer for his refusal, which was accepted, to work overtime which was equally accepted to be part of his contractual requirements.
3. Against that background the decision, which was a majority one, is as follows, as far as that majority is concerned:-

"However, on other matters the Tribunal nothwithstanding considerable deliberation, was divided in its decision. In the opinion of the Majority the Applicant was unfairly dismissed. The Minority view was that the dismissal of the Applicant was fair.

At the request of the Chairman, the Members in the Minority expressed their opinions in writing as follows:

One member wrote:-

"I believe a reasonable employer would have attempted to establish in a more thorough and professional manner the specific reasons why, such a senior employee as JJ Lindsay had suddenly gone off the rails.

JJ Lindsay, who had nearly 10 years service with the company had an unblemished record, was a highly regarded excellent employee and further according to the Managing Director, Mr Lindsay had a high level of commitment to the company, but over a short period in time had changed to an employee who had become insubordinate, un-cooperative, and according to the respondents had breached his contract of employment and was guilty of serious misconduct.

According to the respondents the reason for Mr JJ Lindsay's intransigence attitude was simply that he had refused to work overtime because he:-

(a) Felt that he had worked enough unpaid overtime

(b) Demanded that his manager Mr Brian Cumming define what was considered a reasonable amount of overtime.

(c) Believed that another supervisor at a similar level to him was being paid for overtime worked.

(d) Had taken a stance against working any further overtime.

I believe it is an established fact, from the evidence led, that at the early stages of this conflict between Mr Lindsay and his Manager Mr Cumming, Mr Lindsay did hold the view that another supervisor on a similar level to him was being paid for overtime worked, however, at the time of Mr Lindsay' appeal to Mr Micheal Cook against 'The First and Final Written Warning' that this view had altered and he (Mr Lindsay) no longer believed that other members of supervision were being paid for their overtime.

It is my belief from all the evidence that the respondents did not act reasonable in that they did not conduct a proper investigation into:-

(1) The level of overtime claimed to have been worked by Mr JJ Lindsay

(2) Mr Lindsay's claim that he was going on holiday to England on the second occasion he was unavailable and unable to work overtime on the weekend of the 23 and 24 September

(3) Mr Lindsay's claim that his son was ill on the third occasion he was unavailable and unable to work overtime week beginning 2^nd October

(4) What was the impact if any, in Mr Lindsay's attitude or alleged stance in the light of his change of view that other supervision were being paid for overtime working

A reasonable employer would have established at the appeal hearing or at the disciplinary interview prior to his dismissal, what were Mr Lindsay's genuine future intentions in respect of overtime working and his commitment to honouring the contractual obligations in order to establish beyond reasonable doubt that this alleged breach of contract would continue

This employer was hasty in reacting to Mr Lindsay' alleged contract breach, any reasonable employer would have attempted to conciliate in this conflict and would have been much slower to arrive at the conclusion, as did this employer. Soapworks Ltd did not allow sufficient time for Mr Lindsay to remedy the alleged breach of contract. It is also my view that Soapworks Ltd decided to rid themselves of this employee who had become in their view troublesome.

Considering all these factors for the above reasons I conclude that this employer's procedure was flawed and consequently the sanction used by Soapworks Ltd of dismissing Mr JJ Lindsay was UNFAIR."

The other member in the Majority in support of his decision that the Applicant was unfairly dismissed made the following points:

(a) When the Applicant asked for 'reasonable overtime' to be defined a reasonable employer would have addressed that issue and defused the situation. A failure to do so set the scene for the events which followed culminating with the Applicant's dismissal.

(b) Mr Cumming did not allow the Applicant time to react to the written warning and instead pressurised him to work overtime.

(c) Mr Cumming pursued the Applicant and formally asked him to work overtime on the weekends of 16/17^th when he had personal commitments and on 23/24 September 2000 when he knew that the Applicant would be on holiday with his family. Also Mc Cumming made no personal effort to help with the cycle counting.

(d) During the month of conflict the Applicant had said that he worked overtime and personally covered for members of staff that were on holiday and had worked overtime on the day of his dismissal.

(e) Mr Cumming made no effort to hand over the disciplinary process to another manager though his relationship with the Applicant had broken down.

(f) On matters of conflicting evidence the Applicant's version was preferred.

The Chairman was unable to agree with the views expressed by the Majority. He noted that the Applicant advanced several contentious claims. Firstly, that he worked excessive overtime. Secondly, that he made known the hours he worked to Mr Cumming. Thirdly that since January he was in open discussion with his Managing Director, Mr Zadruzynski. Fourthly, and most importantly his assertion that he told Mr Cumming that he could not work overtime in September 2000, for reason of personal commitments, and, in the week commencing 2/10/2000, because he had to look after his son who was ill and off school.

In the opinion of the Chairman, if as claimed by the Applicant his complaint of excessive overtime was not addressed by his line manager Mr Cumming, and, over a prolonged period of time he chose to work excessive overtime because he believed it necessary, it is inconceivable that he would not have raised the matter formally with Mr Cumming's superiors. Particularly, as he claimed to have previously raised the matter with his Managing Director, who advised him to discuss the matter with his Manager. Furthermore, if the Applicant's account is accurate, and the matter was not resolved to his satisfaction, it is difficult to understand why he did not raise a formal grievance, as he was invited to do; or at the very least keep a record of the overtime hours worked to support his claim for additional payment. Mr Cumming disputed having knowledge of the overtime hours worked by the Applicant and significantly both he and Mr Zadruzynski rejected the assertion that they had been in open negotiation with the Applicant throughout the year. However, as pointed out by Mr Mc Kay, the Applicant's post overtime hours was not the reason given by him for refusing to work overtime.

The core issue is the very serious evidential conflict between Mr Cumming and the Applicant as to whether or not the Applicant advanced reasons for his refusal to work overtime. Regrettably, the issue of credibility is starkly raised and there is no room for misunderstanding or honest error. In the opinion of the Chairman there was ample evidence from the testimony of Mr Cumming, supported by documents and other witnesses, to allow at each stage of the disciplinary process, management to conclude that they preferred the account given by Mr Cumming. Of particular weight is the fact that the Applicant, at the appropriate time, failed to tell Mr Cook, and his own union representative, that he had given to Mr Cumming on four occasions a valid explanation for not working overtime; and that Mr Cumming had persisted in pursuing the matter. Quite apart from the core issue of credibility it seemed to the Chairman, that, the Applicant, perhaps, because he was under the erroneous belief that another Supervisor was being paid for overtime, had taken a stubborn and insubordinate attitude towards his Manager Mr Cumming, that challenged his authority, and clearly could not continue. Unfortunately though issued with a Final Written Warning his attitude, according to Mr Cumming, did not change. A reasonable investigation had taken place, and it was open to the Respondents to reject the Applicant's version of events, and, on reasonable grounds to hold a genuine belief of his guilt. The standard of proof is of course on the balance of probability and not beyond reasonable doubt. It is of course quite possible that another employer may have chosen to deal with the matter differently. However, that is irrelevant. The correct test to be applied – as previously stated - is whether a reasonable employer acting reasonable could have reached the same decision as the Respondents. In other words did the decision fall within the band of reasonable responses of a reasonable employer. With respect to his colleagues, it is the considered opinion of the Chairman that dismissal of the Applicant was an option open to the Respondents, and that the Majority have substituted their view of how the matter should have been dealt with for that of the employer. The Chairman is also of the opinion, that an investigation into the hours the Applicant claimed to have previously worked; whether or not he had visited England; or the dates when his son was off school, would not have been helpful in resolving the credibility issue between the Applicant and Mr Cumming. Looking at the whole circumstances, he concluded that the Respondents did sufficient to meet the statutory test of fairness set out at section 98(4) of the Employment Rights Act 1996.

4. The position of the appellants is well summarised in the skeleton argument presented on their behalf, the relevant parts of which are as follows:-

"9. The other member in the majority again thought the employer should have done more both to investigate and conciliate. And the Chairman notes (p.22, line 43) the member's view that "On matters of conflicting evidence the Applicant's version was preferred."

10. There are several objections to this reasoning, each of which is in itself fatal to the majority's finding of unfair dismissal:

The first lay Member's reasoning is partly based on a wholly irrelevant criterion. Question of future intentions and whether breach of contract would continue has nothing to do with whether the dismissal was fair.

Both lay members were clearly substituting their views, saying what they think should have been the outcome. That is a fair reading of the particular criticisms they make despite the odd reference to "any reasonable employer".

The correct approach is relation to investigations for misconduct has recently been clarified in the recent decision of the CA: Whitbread v Hall [2001] IRLR 275, CA. The headnote reads "the tribunal should not simply ask whether dismissal fell within the band of reasonable responses but also apply that test to the procedure used in reaching the decision to dismiss". Per Lady Justice Hale at para.16 "Section 98(4) requires the tribunal to determine whether the employer acted reasonably or unreasonably in treating it [alleged misconduct] as a sufficient reason for dismissing the employee and further to determine this in accordance with equity and the substantial merits of the case. This suggests that there are both substantive and procedural elements to the decision to both of which the band of reasonable responses should be applied". While it could, of course, be contended that another employer might have behaved differently, it is not possible to say either that the behaviour of the Appellants in conducting the investigation or in deciding to dismiss was outside the band of reasonable responses, or that it was unreasonable.

If the reasons are to be read as saying that "any reasonable employer" would have approached the matter as the member indicated, it is simply perverse. This is quite unlike Whitbread v Hall – where the employee's wife had been suffering from terminal cancer when the disciplinary procedures had been carried out. It is also perverse to say that the investigation was unreasonable, under the Burchell standard, given the procedure that was followed. This is wholly different from the inadequate investigation found in, e.g., Scottish Daily Record & Sunday Mail v Laird [1996] IRLR 665, IH, where dismissal followed a disciplinary interview lasting fifteen minutes, or the situation found in Alloa Pubs & Restaurants Ltd. v Berrie EAT/607/98, 22 October 1998, where there were a number of suspicious circumstances to support the tribunal's unanimous finding that there had not been a reasonable investigation prior to dismissal.

There is here an implicit acceptance of bad faith on the part of management, where the first lay member records his view that Soapworks Ltd. had "decided to rid themselves of this employee who had become in their view troublesome". That only make sense if the Applicant's contention that the company was acting in bad faith – in other words that the appeal procedure was a sham – is accepted. There is no reason (either given or at all) to validate such a serious criticism of the employer's behaviour, which of course entails that the evidence of Mr Cumming, Mr Kyriatu and Mr Zadrusynki to the tribunal must have been untruthful. There is nothing more than a bald assertion to this effect, only "explained" by the suggestion that a reasonable employer might have carried out a more thorough investigation of various matters and been less hasty. That is not a sufficient basis for a finding of bad faith or collusion. cf. latest view on reasons: Tran v Greenwich Vietnam Community [2002] IRLR 735: "…simply to recite the background and the parties' contentions and then to announce a conclusion is not to do [enough]". (per Sedley LJ at para. 17). According to Arden LJ: "I doubt whether on a reasons challenge it is sufficient that the parties would have known the employer tribunal's reasons if they cannot also be ascertained by the appellate court at least in a case where there is not only a reasons challenge but also a challenge to the substance of the relevant reasons." (para. 39).

In any event, and questions of bad faith apart, the lay members have wrongly approached questions of credibility of witnesses. The issue is not whether the tribunal accepts the evidence of a witness, but whether it was reasonable for the employer to have done so at the time. The correct approach in considering the credibility of a witness is as set out by the chairman at p.20. See Linfood Cash & Carry Ltd. v Thomson [1989] IRLR 235, EAT; Morgan v Electrolux Ltd. [1991] IRLR 89, CA. See also Maclay and Company v Myles Clark (1997) IH Cases, 12 June 1997, where specific approval was given to Linfood and the test was expressed by Lord McCluskey thus:

Whether the majority of the tribunal had good grounds for holding that the employers could not reasonably have accepted [the evidence of a witness] as truthful.

Applying that test, there is no basis for the lay members' view in which the evidence of the Applicant is preferred to that of Mr Cumming. Certainly no reason is given. By contrast, there is good ground put forward by the Chairman for his view to the contrary, and his acceptance of the evidence given by the employer's witnesses. See p.23, lines 4-17."

5. The position adopted by Mr Bathgate, appearing for the respondent, before us, was, essentially, to the effect that the question was one for the industrial jury, the core issue being one of credibility which both majority members, albeit, for slightly different reasons, had determined on that basis. While he could follow the reasoning of the minority Chairman, it was nothing to suggest that the majority had not properly assessed the evidence and reached a conclusion based upon the appropriate legal test, namely, whether or not the response by the appellants in dismissing the respondent was a reasonable one against the background of section 98(4) of the Employment Rights Act 1996.
6. It is important to bear in mind the respective roles of both the Employment Tribunal and this Tribunal in assessing questions of unfair dismissal for alleged misconduct.
7. The former is not a court of appeal from the decision of the employer. Its role is to assess whether or not the employer rationally reached a conclusion consistent with fairness upon the evidence that was presented to it against the background of a proper investigation. If, speaking quite generally, there is a clear conflict of evidence before the employer and the employer reached a conclusion in circumstances where the alternative was equally open to them, it would only be in the rarest of cases that even the Employment Tribunal should determine the case against the employer. However, the converse of that, is if the employer proceeds irrationally or if the Tribunal in assessing the employers' conduct does not adequately support its position, which must be more than simply declaring a result, then this Tribunal may enter the scene as a further court of review as to whether or not the Employment Tribunal reached a decision that was rationally based.
8. In this case, as has been demonstrated by counsel for the employers appellant, the majority members approached the matter on a different basis but we accept the submission by Counsel that they both were, in effect, substituting their own view as to what the employer should have done rather than assessing the reasonableness of what the employer actually did. We are satisfied upon the evidence that the investigation that was carried out into the issue of credibility, which was identified as the core one, was adequate. Thus, rationally basing a decision by the employer to refuse to accept as a credible witness, the appellants' testimony to them, both at first instance, and at the appeal hearing which led to his dismissal. We accept that the position here is similar to that of Whitbread plc v Hall [2001] IRLR 275 and different from an issue of inadequate investigation, for example, to be found in Scottish Daily Record & Sunday Mail v Laird [1996] IRLR 655. We are further concerned, as was submitted by Counsel, that at least one of the majority members was influenced by the notion of bad faith. While this is an important issue, if that is to be the line down which the Employment Tribunal goes it must give adequate reasons supporting its conclusion in that respect. Merely to make a bald assertion of alleged victimisation, for example, is not enough. We accept that the issue is not whether the Tribunal itself accepts the evidence of a witness given to it but, rather, whether it considers whether it was reasonable for the employer to have done so at the relevant time.
9. In these circumstances we consider that the reasoning of the majority is flawed and, that, equally, the reasoning set forward by the Chairman in his minority view is both concise and correct or, at least, represents a proper assessment of the role to be carried out by the Employment Tribunal in cases of this sort.
10. Accordingly, approaching the matter as we must, in our role of reviewing the decision of the Employment Tribunal, we consider that the determination by the majority is flawed for the reasons we have given and the determination by the minority represents the correct approach.
11. We thereafter have to consider what should be done given the complete investigation before the Employment Tribunal and, a clear assessment of the position by the minority Chairman, we are of the view that this is one of the rare cases where we can substitute our decision based on the views expressed by the minority Chairman without a remit for a rehearing. It being argued that the conclusions reached by the minority Chairman are effectively the only ones which can properly be supported on a rational basis upon the evidence presented at the Tribunal.
12. In these circumstances this appeal will be allowed and the decision of the Employment Tribunal quashed in its entirety.
13. We should add that during the currency of the hearing before us, Mr Bathgate represented to us that an application had been made to the Chairman in the course of the hearing before the Employment Tribunal that at least two further witnesses should be led in support of the employee's position with regard to credibility which went to the heart of the matter as we have identified. That application, it was stated, was apparently refused. Mr Bathgate informed us that he had obtained this information from the representative appearing for the employee at the original hearing. Since neither he nor Mr Napier were present at the original hearing, they could throw no further light on the matter. In these circumstances we referred the matter back to the Chairman for his comments, who replied in writing to the effect, that no such application was made during the currency of the hearing, although there had been a preliminary hearing at an earlier date where the issue of witnesses was discussed.
14. It follows that this matter has no bearing on the issues before us and we will take the matter no further.