United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR NICHOLAS CHRONIAS (of Counsel) Instructed By: Messrs Beachcroft Wansbroughs Solicitors 100 Fetter Lane London EC4A 1BN
For the Respondent	MISS K BHOGAL (of Counsel) Instructed By: Messrs Irwin Mitchell Solicitors Imperial House 31 Temple Street Birmingham B2 5DB


 


JUDGE D SEROTA QC:

1. This is an appeal from an Employment Tribunal at Reading that was promulgated on 10 April 2001, the Tribunal being chaired by Mr J. R. Hardwick. The Tribunal determined that the Applicant, Mr Monge, had been unfairly dismissed. They also found that he had been dismissed in breach of contract and was entitled to three months' notice. However, it was found that his compensation for unfair dismissal should be reduced by 20% by reason of his contribution to that dismissal. The Respondent employer, Acco (UK) Ltd, appeals against that decision.
2. The relevant background to this matter is as follows. It would seem that in December 1996 Mr Monge joined the Respondent as a Marketing Manager. It is perhaps relevant to have regard to the terms and conditions of his employment. His hours of work were defined as follows:

"Your normal hours of work will be 35 hours per week, those being 9:00 am to 5:00 pm Monday to Friday, inclusive of one hour's lunch break daily. The Company reserves the right to vary these hours subject to giving reasonable notice. This is a minimum requirement and you will be expected to work those hours as required for the satisfactory completion of your duties and to ensure business efficiency."

3. The contract made it clear that Mr Monge was not eligible for overtime payments. The contract also sets out a detailed absence procedure which we need not set out. It is sufficient to note that there was an absence procedure that required an employee absent from work to give appropriate notice.
4. Between 25 February and 4 April the Applicant took a number of flying lessons during working hours and had failed to obtain consent or, indeed, notify any of his superiors. It would seem that he could not be contacted on a number of days and this caused considerable concern among his sales staff. A number of lessons were booked. Nine in his diary are booked during the working week in addition to a number that were booked at weekends. The Tribunal seems to have found that, by reasons of bad weather, Mr Monge probably only had about six lessons in working time. Each lesson was for a period of some two hours and also it was necessary for Mr Monge to travel to Elstree Aerodrome and from thence to Aylesbury. On most occasions it would seem he went to Elstree from home but on some occasions he went from work. It is quite clear that the journey between Elstree and Aylesbury must be regarded as being approximately one hour. The finding by the Employment Tribunal that the total time taken off was a day or a little more, suggest that they have not done their mathematics accurately because we are quite satisfied that, even if one discounts journey times, six lessons together with 30 minutes for a medical examination for a Private Pilot's Licence would suggest 12 ½ hours plus whatever the journey time was.
5. This matter came to the attention of Mr Jones who in January, as we understand it, had become Mr Monge's superior as European Sales Director. He had a discussion with Mr Monge as to what the reference PPL in his electronic diary meant and was told, so the Employment Tribunal found, by Mr Monge that it was to remind him to ring his sister. The Employment Tribunal, having heard evidence from Mr Monge subsequently found that Mr Monge was confused, partly because of a bad line on his mobile phone and, secondly, because his English might not have been sufficiently good to understand the nuance that may have been put to him by Mr Jones.
6. It is quite clear, regardless of the way in which this matter was viewed by Mr Monge, that the Respondent employer regarded this matter with some gravity and a suspension meeting took place on 22 May 2000 in which Mr Monge was present, as were Mr Jones and the Human Resources Manager, Mr Wells, and a decision was taken on that occasion to suspend Mr Monge and institute disciplinary proceedings. At page 34 of our bundle are the notes of that meeting. No suggestion was made to the Employment Tribunal that these notes were inaccurate. The meeting was called to discuss the allegation that Mr Monge had undertaken private flying lessons during Company time without permission. Mr Monge said that the references PPL in his diary were, indeed, to Private Pilot's Licence and he had not attended on all the dates because of adverse weather. Mr Jones told Mr Monge that the Respondent treated such unauthorised absence extremely seriously. Mr Wells said that the Company would investigate the matter thoroughly and, in accordance with the Company Disciplinary Procedure, Mr Monge could be suspended on full pay for five working days. Mr Monge then asked what the ultimate sanction of the Company could be in such cases and Mr Wells explained that it would be wrong to pre-judge the outcome of any future disciplinary hearing but if gross misconduct was deemed to have been the behaviour of an employee then summary dismissal could be the outcome.
7. A letter was sent confirming the decision to suspend Mr Monge dated 22 May, which is at page 33 of our bundle, and confirms that the basis of the investigation was that Mr Monge was absent from work and unable to be contacted during normal working hours on several occasions while undertaking professional training to achieve his Private Pilot's Licence and the letter refers to the specific allegations made at the suspension meeting.
8. On 25 May 2000 a disciplinary hearing took place. We have the notes of that disciplinary hearing at page 35 in our bundle. One of the first matters that was raised was why Mr Monge had initially said to Mr Jones that the references in his diary PPL were to remind him to ring his sister. Mr Monge replied that he had some notes in his diary to remind him to contact his sister as she had recently qualified as a pharmacist. He continued to explain when Mr Jones had asked him about the diary entries he was confused and his response had been the best that he could do. He was asked the number of occasions that he had attended the Flying Club and he explained that because of bad weather on approximately 60 per cent of the occasions he had attended only. Mr Monge said he had also spent time at the weekends flying. Mr Jones asked Mr Monge if he would have attended the airfield for flying lessons on all the dates shown in the calendar, the weather being favourable, and Mr Monge said that that would have been his intention. Mr Jones asked Mr Monge if at any time he had sought permission to be absent from work and Mr Monge confirmed that he had not sought permission as he had not seen the issue that way. Mr Monge was asked to make any representations and comments that he wished and he said that he believed he managed his time flexibly, according to work load and travel schedule, and indicated on this occasion he had perhaps made an error of judgement for which he apologised and said he had nothing further to add. The decision was then taken by Mr Wells and Mr Jones that Mr Monge should in fact be summarily dismissed.
9. Mr Chronias drew our attention to the fact that, although Mr Monge was given the opportunity to make representations, he did not suggest that he had come to an arrangement with his former Manager, Mr Hanlin. Neither did he suggest that his difficulties with a mobile phone and language difficulties had led to a misunderstanding of what was being asked of him by Mr Jones before the suspension meeting, when Mr Jones was given the explanation that PPL was a note in the diary to remind Mr Monge to contact his sister.
10. On 26 May 2000 a letter was sent by the Respondent company to Mr Monge confirming the decision taken at the disciplinary hearing. The reasons for the dismissal were:

"You absented yourself from normal duties without prior consent to undertake private flying lessons as part of the achievement of your Private Pilots Licence.

This represents fraud, as detailed in the Company Disciplinary Procedure and constitutes gross misconduct.

This breach of trust goes to the root of the Contract of Employment and indicates that you no longer intended to be bound by your duties thereby destroying the confidence the employer must have in an employee."

11. He was told of his right, if he so wished, to appeal and Mr Monge did in fact avail himself of that right. He wrote a letter, which is at page 39 of our bundle, and appears to have been received on 5 June. He described the disciplinary rules as being ambiguous and expressed the view that:

"As a manager with autonomy of decision I don't need to seek prior consent to leave the place of work.

I consider the interpretation of the disciplinary procedure as too severe for a non-malicious, first breach".

He stated that:

"I have never concealed the facts and details of these activities [which] were written in my electronic diary accessible on the company network. There was neither malicious intention nor any intention to defraud the company as his professional attitude shows."

12. He then went on to say that he had spent many weekends abroad working for Acco, some of them in the Middle-East, and in the Middle East where the weekend was Thursday and Friday, Saturday and Sunday were working days and he had never been offered compensation for those weekends lost, nor did he ask for it, as he adapted his time according to his work load with a concern of business efficiency and he pointed out that his sales results were good. He also stated that on the days he took some lessons "I worked during my personal time to compensate". He concluded by apologising for having wrongly interpreted the level of flexibility he believed he had to manage the mix between his personal and professional time. He said he would guarantee such a thing would not happen again and also offered the number of hours taken during office time should effectively be deducted from his salary and he asked that an intermediate sanction in the form of a written warning should be substituted. Again, we note that there is no reference in that letter to the agreement which he later said he had come to with Mr Hanlin.
13. On 9 June 2000 there was an appeal hearing. This was attended by Mr Jones, Mr Wells, Mr Monge and also by Mr Schuble, the Director and General Manager of Acco in the UK. Mr Schuble asked Mr Monge to give his versions of events and Mr Monge explained he believed he had always been professional, flexible and motivated in undertaking his duties. He been under time pressure to complete a set of flying lessons and take the appropriate tests. Mr Monge further explained his work load had been diminishing when he was away from the work place and his results had come back to normal after the flying lessons had finished and he did not feel he had been defrauding the company with any malicious attempt, rather he had made an error of judgment. He was given an opportunity to add to his written statement of appeal or his verbal case and he confirmed he had nothing further to add.
14. Mr Schuble said he would consider all the evidence and came to the conclusion on 9 June 2000 that the appeal would in fact be dismissed. We would note again that there was no reference at this appeal hearing to any agreement having been made with Mr Hanlin.
15. We now turn to consider the way in which this matter was approached by the Employment Tribunal. In paragraph 19 of the decision, the Employment Tribunal seemed to have found that, when the question of disciplinary proceedings first arose, Mr Monge did not take the issue too seriously because, as he said, he was miles away from contemplating the sanction would be dismissal. He said:

"He had raised the arrangement he had had with his previous boss which was in return for the amount of his own personal time at weekends he spent on the respondent's business abroad there would be flexibility in relation to his time when he was back in the United Kingdom. For instance, the applicant was often on duties in Arab territories where their weekend was Thursday and Fridays and his normal weekends Saturday and Sunday were working days in Arab countries. Accordingly, he regularly was working abroad during his weekends."

16. We must say that we find the reference to the fact that the Applicant did not take the issue too seriously surprising, having regard to the terms of his letter of suspension and what was said at the suspension meeting.
17. The Employment Tribunal then went on to consider the question of the conversation between the Applicant and Mr Jones relating to the diary entries prior to the suspension. The Employment Tribunal said this:

"The applicant said it was a mobile phone and at his end, the line was not clear. He also said that although his English was good as a Frenchman the nuances of conversation on an unclear line served to confuse him. We are prepared to accept that evidence because although Mr Jones said that at his end the line was clear he cannot state the clarity or otherwise of the applicant's line."

18. Pausing there for one moment, we note that this particular point had been raised for the first time in the Applicant's witness statement that was prepared and exchanged about four days before the Tribunal hearing. In paragraphs 22 and 23 of the decision the Employment Tribunal is critical of the manner in which the Respondent employer carried out its investigation:

"We considered the respondent's investigation to be less than satisfactory. The respondent focused on the act of booking the flying lessons at the disciplinary hearing and not why the applicant had done so. They did not pursue why he had not asked for permission. The applicant had said he did not see this as an issue. Any investigation on this point would have brought into light the arrangements that the applicant as a senior executive on £35,000 a year with benefits had with his previous boss. Furthermore, the respondent made no attempt to find out exactly how much time off the applicant had. Taking into account the vagaries of the weather, the fact that some of the lessons straddled the applicant's lunch hour or were before working time, it seems to the Tribunal on a rough and ready assessment that flying lessons would have taken up one day's work or possibly slightly more."

We have already observed that we do not believe that this does justice to the facts:

"We find that the investigation was cursory and unreasonable and that there was a total over-reaction to the matter by management."

19. Then, at paragraph 24, the Tribunal came to the conclusion that:

"Having regard to the applicant's four years' unblemished career as a senior manager who spent long hours utilising his own time working for the respondent abroad we are firmly of the view that no reasonable employer would have visited the penalty of dismissal in these circumstances."

The Tribunal then went on:

"We can only speculate that there may have been other logistic motives. The respondent gave no real thought to dealing with the matter in any other disciplinary way for instance by a stiff discussion or a warning. We are clearly of the view the decision to dismiss was outwith the range of reasonable responses a reasonable employer might have adopted in the circumstances. Accordingly, the dismissal was unfair."

20. We had the benefit of the most helpful submissions from both Mr Chronias and Miss Bhogal. Mr Chronias firstly submitted that insofar as the Employment Tribunal had found that the investigation was inadequate it had simply failed to direct itself correctly. First, he submitted, it was wrong for the Employment Tribunal to have taken the view that the employer should make investigations as to matters that were solely within Mr Monge's knowledge.
21. It was not disputed before the Employment Tribunal that Mr Hanlin had left the employment of the Respondent. It was also not disputed that Mr Jones and, indeed, no other member of the Respondent's management had knowledge of this arrangement. Further, the Employment Tribunal criticised the Respondent for not investigating why the Applicant took flying lessons. If that, in fact, is what the Employment Tribunal meant then it seems to us to be wholly irrelevant but Miss Bhogal suggested that the Employment Tribunal meant they should have enquired why he was taking the lessons during working hours. But one asks the question forensically, who could possibly give an explanation for this save Mr Monge?
22. The Employment Tribunal criticised the Respondent for failing to investigate why Mr Monge did not seek permission but again, how could they do more than ask Mr Monge for his explanation, as despite a number of opportunities at no stage had he mentioned that which the Employment Tribunal said would have come out, that is the agreement made with Mr Hanlin. This was not mentioned when Mr Monge spoke to Mr Jones before the suspension meeting, it was not mentioned at the suspension meeting, it was not mentioned at the disciplinary hearing when Mr Monge said that taking the time off was an error of judgment, it was not mentioned in the appeal letter and it was not mentioned in the appeal meeting. His explanation at the appeal meeting was that flying lessons were urgent and he was not particularly busy.
23. Mr Chronias submitted in those circumstances it was unsurprising his appeal was dismissed and there is nothing in what was told to the employers that bears resemblance to the evidence that Mr Monge gave to the Employment Tribunal.
24. We would note in passing that the agreement with Mr Hanlin and, indeed, the explanation as to the conversation on the mobile phone are not referred to in the ET1. We are quite satisfied that the Respondent has made out the case that the findings of the Employment Tribunal, as to the adequacy of the investigation, cannot be supported and in effect are perverse.
25. Mr Chronias submitted that the Employment Tribunal had in effect been substituting its own findings for those of the Respondent and in addition had ignored a number of relevant matters. It was submitted that the Employment Tribunal had failed to follow the principle set out in the well known case of W Devis & Sons Ltd v Atkins [1977] ICR 931 in having regard in judging the conduct of the Respondent employer, to material that was not available to the employer at the time of dismissal. Mr Chronias submitted that the Employment Tribunal was substituting its view for that of Acco in taking into account matters that simply were not available to Acco in determining whether or not the dismissal was a reasonable sanction, and whether the investigation was inadequate. The finding by the Employment Tribunal about the agreement with Mr Hanlin at paragraph 19 is, as Mr Chronias correctly submits, is something that permeates the entire decision.
26. Miss Bhogal submitted that the question of flexibility was in fact flagged up by Mr Monge. However, it is quite clear that he had every opportunity to spell out the nature of the flexibility and the fact that he had come to an agreement to Mr Hanlin and he never did so. It is particularly striking when we can see his own letter (a fairly detailed letter to which we have already referred) instituting the appeal which is at page 39 of our bundle makes no reference to such an agreement. The first time that this matter came to light was in the witness statement exchanged about four days before the hearing. The position is similar in relation to the mobile phone. Again confusion, Mrs Bhogal says, was raised during the disciplinary hearing but certainly the reason for the confusion given by Mr Monge to the Respondent employer was quite different to that that was subsequently given to and accepted by the Employment Tribunal.
27. It seems to us, in those circumstances, that the Employment Tribunal has taken into account matters that were simply not before the employers, both in relation to the explanation for the alleged lie as to the meaning of the diary entries and also in relation to the agreement with Mr Hanlin and what one finds, submits Mr Chronias and we agree, is the Employment Tribunal substituting its view based on facts not known to the employer for that of the employer. Mr Jones, he submitted, was perfectly entitled at the disciplinary hearing to have regard to the explanation that was given to him and that is an explanation quite different to the one given to the Employment Tribunal and Mr Jones was entitled to reject that explanation if he found it to be unsatisfactory. The Employment Tribunal simply did not address these points and simply failed to ask itself or have regard to the fact that the employer was dealing with matters on the basis of the information before it.
28. The Employment Tribunal further, somewhat surprisingly, seems to have completely disregarded the basis upon which the Respondent employer maintained it had dismissed the Applicant. It is quite clear from the letter, which we have already read, that the principal reason for the dismissal was that the absence from duty without consent and notification effectively amounted to a breach of trust that went to the root of the contract of employment. One searches the Employment Tribunal's decision in vain for any reference to this. Furthermore, one searches in vain for any reference to the evidence of Mr Jones which is to be found, for example, at page 48 of the bundle of the Chairman's notes where, for in explaining the reason for the dismissal, Mr Jones is recorded as saying:

"It was a breach of trust, people at the applicant's level work in senior positions and it is vital that they carry out work. Someone of the applicant's level had breached the trust. A key factor was integrity and honesty which were vital. The applicant was left to do most of his day to day to work unmanaged and therefore he broke the trust."

At page 52, he said:

"There were two issues. Firstly the applicant lied and secondly the applicant worked in a team of four or five plus sales administration and they knew what he was doing. Integrity broke down."

At page 54, he said:

"Whether it was one hour, two hours or five hours worth of flying lessons it was a serious breach of trust and furthermore the applicant was not contactable."

29. It is submitted that the Employment Tribunal also failed to take into account other matters. They, for example, failed to take into account the contractual provisions which we mentioned. They seemed to have laid stress on the fact that the Applicant did not take the allegations seriously rather than concentrating on whether the Respondent took them seriously. They also, as we have already mentioned, simply have ignored the fact that the Respondent at all times was complaining of a breach of trust. Yet, as we have said, this does not appear in the judgment at all. The Employment Tribunal came to the conclusion that certain provisions in the Employee Handbook might be regarded as ambiguous in relation as to what was a general and what was a serious offence. However, what the Employment Tribunal should not have done in our view was to disregard the reason for dismissal given by the employer and they should not have substituted, as they seem to have done, their view for that of the employer and disregarded the fact that the employer regarded what had taken place as a serious breach of trust.
30. Mr Chronias also submitted that the Employment Tribunal should not have taken into account the fact that the Applicant works at weekends when this was necessary, as his contract required him to do so, and that he was in same position as other comparable employees. It seems to us that these two points add little to the main thrust of his argument.
31. Mr Chronias also drew our attention to other matters which he said suggested that the Employment Tribunal had substituted its views for those of the employer. We have already referred to the finding in relation to the ambiguous nature of the Staff Handbook. Also in dealing with the Applicant's suggestion that the dismissal was a sham for reasons of cost-cutting Mr Chronias asked forensically why the Employment Tribunal should return to this question, it was not a point that had ever previously been raised during the appeal proceedings and, he submitted, it was indicative of the inappropriate approach of the Employment Tribunal. Again, we are not minded to accept this particular argument as adding anything to the main thrust of the Respondent's appeal.
32. Mr Chronias drew our attention to the judgment of Mummery LJ in HSBC Bank Plc (formerly Midland Bank Plc) v Madden [2000] ICR 1283 at page 1294. This was a case in which the Employment Appeal Tribunal allowed an appeal on the basis that the Employment Tribunal had in effect substituted its own views for those of the employer as to whether a dismissal was within the reasonable band of responses. Mr Chronias drew our attention to the passage that starts at page 1294 G under the heading "Reasonableness of the dismissal":

"In the circumstances did the bank act reasonably or unreasonably in treating that reason as a sufficient reason for dismissing Mr Madden?

In holding that the dismissal of Mr Madden for that reason was unreasonable the employment tribunal erred in law. It did not correctly apply the law as laid down in the authorities already discussed in the Post Office case. It impermissibly substituted itself as employer in place of the bank in assessing the quality and weight of the evidence before Mr Fielder, principally in the form of the investigating officer's report. Instead, it should have asked whether, by the standards of the reasonable employer, the bank had established reasonable grounds for its belief that Mr Madden was guilty of misconduct and whether the bank's investigation into the matter was reasonable in the circumstances.

The extent of the tribunal's substitution of itself as employer in place of the bank, rather than taking a view of the matter from the standpoint of the reasonable employer, is evident from the tenor of the views expressed by the tribunal on the quality and weight of the available evidence against Mr Madden."

A little later, Mummery LJ said:

"In my judgment no reasonable tribunal, properly applying the approach in British Home Stores Ltd v Burchell … and Iceland Frozen Foods Ltd v Jones … to the facts, could have concluded either (a) that the bank had failed to conduct such investigation into the matter as was reasonable in all the circumstances or (b) that dismissal for that reason was outside the range of reasonable responses. Instead of determining whether the bank had made reasonable investigations into the matter and whether it had acted within the range of responses of a reasonable employer, the tribunal in effect decided that, had it been the employer, it would not have been satisfied by the evidence that Mr Madden was involved in the misappropriation of the debit cards or their fraudulent use and would not have dismissed him. The tribunal focused on the insufficiency of the evidence to prove to its satisfaction that Mr Madden was guilty of misconduct rather than on whether the bank's investigation into his alleged misconduct was a reasonable investigation."

Mummery LJ continued later:

"The employer, not the tribunal, is the proper person to conduct the investigation into the alleged misconduct. The function of the tribunal is to decide whether that investigation is reasonable in the circumstances and whether the decision to dismiss, in the light of the results of that investigation, is a reasonable response."

Nourse and Rix L.JJ agreed with his judgment.

33. In our opinion the criticisms, save in those respects we have mentioned, made by Mr Chronias of the decision of the Employment Tribunal are well founded. Its views in relation to the adequacy of the investigation cannot be supported. It failed to consider the material that was before the Respondent when the decision to dismiss was taken. It ignored the Respondent's reasons for dismissing Mr Monge and in effect substituted its own views, as the Employment Tribunal had in Madden. In our opinion, had this Employment Tribunal correctly directed itself it could only have come to the conclusion that the response of the Appellant in summarily dismissing Mr Monge was well within the band of reasonable responses. Any other decision by the Employment Tribunal would, on the facts of this case, have been perverse.
34. In those circumstances, it seems to us that the appropriate course is to allow the appeal and to set aside the decision of the Employment Tribunal.
35. It only remains for us to express our thanks to Mr Chronias and to Miss Bhogal. We are greatly indebted to them for their very careful skeleton arguments and for their succinct submissions.