United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS L BONE (Of Counsel) Litigation Manager Mentor 134 West Regent Street Glasgow G2 2RQ
For the Respondent	MR B CARR (Of Counsel) Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE


 


HIS HONOUR JUDGE PETER CLARK

1. This is an employer's appeal against the decision of an Employment Tribunal sitting at Sheffield, upholding the Applicant, Mr Noble's complaint of unfair dismissal. The Employment Tribunal's decision with Extended Reasons was promulgated on 7 March 2001.
2. The Applicant was employed by the Respondent company, ACM Bearings Ltd, as Production Manager from April 1990 until his summary dismissal on 16 August 2000. At the relevant time the shareholding in the company was split as to 21.5% each owned by Mr and Mrs Davies, 43% by a Mr Pridgeon and 15% by British Steel. British Steel requested the appointment of their nominee, Mr Lightfoot, a Chartered Accountant, to the board. He was voted a Director of the company on 27 April 2000. By that date there had been a suggestion that Mr and Mrs Davies were guilty of financial irregularities. On that date Mr and Mrs Davies were suspended. Investigations revealed evidence that Mr and Mrs Davies had put expenses relating to their acquisition of a property, Eastoft hall, through the company's accounts. An employee, Mr Roy Mallinson, had apparently worked on that property at weekends and for that work he had received payment through the company's payroll.
3. As part of the investigation, conducted by independent accountants, the Applicant's conduct came under scrutiny. As a result a disciplinary hearing took place on 11 August 2002. He faced 9 allegations. Of those, 4 were found proved, leading to his summary dismissal on
   16 August on grounds of gross misconduct. They were:

(1) That he had purchased a gun cabinet for Mr Davies' use, misdescribed on the invoice for £80.86 plus £14.14 VAT as a "4 drawer filing cabinet", and put it through the company's accounts.

(2) He had used his company credit card for a car wash token valued at £3.75, intending to use the token to wash his private car.

(3) He had been involved in purchases for Eastoft Hall which had been put through the company. Initially he had denied knowledge of a company set up to carry out work on that property. Later, at the disciplinary hearing, he admitted knowledge of that company.

(4) He had asked Mr Mallinson, following a request by Mr Davies, to source certain switchgear not for use by the company.

4. The Tribunal concluded:

(1) that the company's reason for dismissal related to the Applicant's conduct, a potentially fair reason for dismissal, but

(2) that dismissal for that reason was unfair in all the circumstances of the case applying, at paragraph 27 of their reasons, the words of Section 98(4) of the Employment Rights Act 1996, and

(3) that the Applicant had contributed to his dismissal by his own conduct, particularly in relation to the gun cabinet, to the extent of 25%.

5. In support of this appeal, Miss Bone takes 4 points, with the leave of a division presided over by His Honour Judge Pugsley at a Preliminary Hearing held on 21 November 2001. They are as follows; first, that in deciding the question of fairness under Section 98(4) of the Employment Rights Act 1996 the Tribunal failed to follow and apply the well-known Burchell test, since approved by the Court of Appeal in Foley v The Post Office [2002] ICR 1283.
6. As to that submission it appears to us that this Tribunal accepted that the company had an honest or genuine belief in the misconduct alleged: no criticism is made of the investigation carried out by the company; however, they did not accept that, in all respects, the company had reasonable grounds for that belief, particularly in relation to their findings on the evidence before them at the disciplinary hearing relating to the car wash token and the allegations arising from the Eastoft Hall work.
7. As to that part of the Tribunal's reasoning we are not persuaded by Miss Bone that the Tribunal strayed beyond the permissible parameters of their investigation, that is, not to substitute their findings on credibility for that of the company, but to enquire whether the company had reasonable grounds for their expressed belief.
8. However, that point is effectively rendered moot by the Tribunal's overall conclusions on the question whether dismissal fell within the range of reasonable response open to the company. They found it did not, particularly in light of what they describe as the company's culture, which involved Mr Pridgeon refunding £8-9,000 via the company's solicitors in respect of his own irregular dealings at the expense of the company and evading tax on his earnings; a Mr Byers, Manager of the Process Shop, arranging for the purchase of a gas boiler for his own use through the company, and Mr Mallinson drawing pay from the company for work done on Eastoft Hall. No disciplinary action was taken against any of these gentlemen. Having been referred, expressly, to the guidance in Hadjionnou v Coral Casinos Ltd [1981] IRLR 352, approved by the Court of Appeal in Paul v East Surrey District Health Authority [1995] IRLR 305, the Tribunal concluded that there was here disparity of treatment between the Applicant and those comparators which rendered his dismissal unfair. There is no appeal against that finding.
9. We can take the remaining grounds of appeal quite shortly. Next, a point is taken on the fact that the Applicant did not give oral evidence to the Tribunal. We confess that we do not entirely follow the point. As Miss Bone correctly submitted under her first ground of appeal, it was not for the Tribunal to substitute its assessment of the Applicant's credibility for that of the company based on their impression of the Applicant as a witness of fact. They dealt with his evidence quite properly, it seems to us, as appears from paragraph 19 of their reasons.
10. Thirdly, it is said that the Tribunal required the company to prove their allegations of misconduct against the Applicant. We have substantially dealt with this submission under the first ground of appeal. References by the Tribunal to proof come to this: had the company produced evidence which could lead the Tribunal to conclude that they had reasonable grounds for their belief in the totality of the misconduct alleged?
11. Finally, Miss Bone complains that the Tribunal failed to take into account the cumulative effect of the misconduct alleged. We cannot accept that submission. It seems to us that at paragraph 27 of their reasons the Tribunal set out those matters which, in their judgment, the company had reasonable grounds for believing amounted to misconduct on the part of the Applicant. Taking those matters together as the relevant reason for dismissal that was not sufficient to justify dismissal, bearing in mind the way in which the comparators had been treated. Dismissal fell outside the range of reasonable responses and was unfair.
12. For these reasons we shall dismiss this appeal.