United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR A GEORGE (of Counsel) Instructed by: Messrs Harbottle & Lewis Solicitors Hanover House 14 Hanover Square London W18 1HP
For the Respondent	MS S PALMER (of Counsel) Instructed by: Messs Addleshaw Booth & Co Solicitors 25 Cannon Street London EC4Y 5TB


 


HIS HONOUR JUDGE J BURKE QC

1. Ms Blackburn appeals against a decision of an Employment Tribunal, sitting at London Central and chaired by Mrs Pontac and sent to the parties with Extended Reasons on 29 April 2002. By that decision the Tribunal dismissed Ms Blackburn's claims:

(1) that she was contractually entitled to a payment of commission by her employers, Maconde (UK) Ltd ("Maconde");

(2) that she was contractually entitled to an agreed increase of salary;

(3) that she had been unlawfully dismissed; and

(4) that she had been wrongfully dismissed.

2. By her Notice of Appeal Ms Blackburn asserts that the Tribunal erred in law in reaching their decisions on all of her claims, with the exception of the increased salary claim which is no longer in issue and as to which we need say no more.

The facts - and the Tribunal's conclusions

3. The facts, which we take from the Tribunal's findings, can for present purposes be stated relatively briefly. Maconde are a small UK manufacturer and distributor of clothing. Their parent company is based in Portugal and operates, presumably through other subsidiary companies, throughout Europe. Maconde's turnover fell between early 1990 and 1999 from £20 million to £8 million. They relocated from Manchester to London and, in 1999, took on Mr  Herbert as a Director. Ms Blackburn was employed from January 2000, together with a male colleague, as Sales Executive. What has been referred to by the Tribunal and the parties as Ms Blackburn's contract of employment but is in truth a statement of terms and conditions of employment, as required by Part 1 of the Employment Rights Act 1996, but is signed by the parties and dated 2 January 2000 (we will refer to this document as "the statement") provided, under the heading "Remuneration" for an annual salary of £55,000 and that:

"In addition to the mentioned salary you will receive commissions as per annexe table."

4. Ms Blackburn claimed that, under the annexe table, having achieved a personal turnover in excess of £1 million in 2000 at an average Minute Selling Price ("MSP") of 0.179, she became entitled to £17,500 by way of commission and that that sum was not paid. It was, however, Mr Herbert's evidence, which the Tribunal accepted in preference to that of Ms Blackburn, that after she and her male colleague had been selected for the Sales Executive posts from a number of candidates, they were both flown out to Portugal for detailed consultation about their contracts of employment in which consultation Mr Herbert, as Maconde's Director, was fully involved. The Tribunal found that the parent company operated a Europe-wide policy of adding 3% to the selling price of its garments to cover the cost of the selling company's offices; Maconde's office costs were £300,000 per annum; thus, to cover those costs, sales of £10 million were needed; but the turnover for 2000/1 was just over £3 million, well below the figure required to cover the office costs. Mr Herbert's evidence was, that in the course of the consultation in Portugal, it was made wholly clear to Ms Blackburn, on the basis of full budgetary information, that the annexe table for commission payments did not take effect until the target of £10 million turnover had been exceeded. Because it had not been exceeded, neither Mr Herbert nor the male Sales Executive, who left Maconde's employment at the end of £2000, had claimed any commission for that year.
5. On 20 April 2001 Ms Blackburn sent an e-mail to Mr Moreira, Managing Director of the parent company, in Portugal; in it she raised the issues of salary increase and commission; as to commission she referred to Mr Herbert's advising her that no bonus was to be paid for 2000 because the UK office did not deliver a profit against sales achieved but pointed out that there was no proviso in "the contract" that commission payment would only be awarded after the running costs of the London office had been deducted. She and Mr Moreira exchanged a number of e-mails over the next week. Mr Moreira took the position that commission was not payable until £1 million of turnover was achieved. The exchange demonstrates that Ms Blackburn was denying any agreed target or hurdle before commission became payable, but was asserting that commission would be paid on a shared basis between the team, and that Maconde and their parent company were asserting that there was the agreed target to which we have referred.
6. There was a dispute before the Tribunal as to whether, if any commission was due because the annexe table became operative, it operated so as to provide for a shared bonus or an individual bonus. The Tribunal did not resolve that dispute; at paragraph 13 of their decision they found that Ms Blackburn's version of the facts did not make commercial sense and expressed their preference for Mr Herbert's account of the consultations in Portugal and found that the proviso that commission was payable only upon Maconde's reaching the £10 million turnover target was incorporated into Ms Blackburn's contract of employment. They further found that, in the light of the substantial dispute as to how and when the commission scheme operated, there was no, or no enforceable agreement, before June 2001 as to Ms Blackburn's entitlement to commission.
7. This last conclusion - in effect that any agreement as to commission was too uncertain to be enforceable - was not the subject of any ground in the Notice of Appeal. Ms Palmer on behalf of Maconde told us - and her written submission to the Tribunal confirms - that she dealt with this aspect of the case by proposing to the Tribunal that, if they found that the entitlement to commission was not dependent upon Maconde's reaching a turnover of £10 million, the precise operation of the obligation as to commission should be resolved at a remedies hearing. The submissions of Mr George, on behalf of Ms Blackburn, to the Tribunal did not touch on this aspect of the case. However this alternative basis for the Tribunal's decision on the commission claim becomes important only if Ms Blackburn's appeal against the conclusion in the earlier part of paragraph 13 of the Tribunal's decision that it was a term of the contract of employment that no entitlement to commission arose unless Maconde's turnover exceeded £10 million succeeds. Before considering whether it succeeds or not we must return to the facts.
8. In her evidence Ms Blackburn said that, in early June 2001, she had met Mr Moreira and presented him with her personal sales figures and that he agreed to pay the commission which she was claiming, promising her a statement by the end of the week. Thus her case was put forward, in the alternative on the basis of an agreement made between herself and Mr Moreira in June 2001. Mr Moreira did not give evidence to the Tribunal but Mr Herbert was present during some of the meeting between Mr Moreira and Ms Blackburn and had discussed what had occurred with Mr Moreira. He gave evidence that Mr Moreira had unequivocally told him that the commission issue had not been resolved in the course of his meeting with Ms Blackburn.
9. In addition to this oral evidence there was, on 18 June, a further exchange of e-mails upon the terms of which both Mr Herbert and Ms Blackburn relied as support for their version of what had passed between Mr Moreira and Ms Blackburn.
10. Again the Tribunal preferred the evidence of Mr Herbert on this issue too; they regarded Mr Herbert's evidence as supported by the terms of the e-mails and by other material set out in paragraph 15 of the decision.
11. From 18 June Mr Herbert went on holiday for a week. He left some signed open cheques for payment of general office expenses while he was away. Ms Blackburn took the opportunity, using one of these signed cheques, to write herself a cheque for £5000; she said that that was in part payment of the commission due to her. Ms Jones, Mr Herbert's personal assistant and, by this time, the only other employee, questioned Ms Blackburn about this but Ms Blackburn told her that this payment had been authorised by Mr Herbert. Mr Herbert said in evidence that Ms Blackburn had asked him to leave additional pre-signed cheques in case the commission issue was resolved with Mr Moreira while he was away and he had agreed to do so on that basis only. Ms Blackburn's evidence was that she was to go on holiday in the week of 25 June and, due to the imminence of this she asked Mr Herbert if she could pay herself something towards her commission and that he agreed and left a signed open cheque for that purpose on which she could complete the figure.
12. On this factual issue too, at paragraph 20 of their decision, the Tribunal preferred the evidence of Mr Herbert and found that Ms Blackburn had asked for and obtained permission to write herself a cheque only if the issue of her commission was fully resolved - which was never the case.
13. When Mr Herbert found out what had happened, as the Tribunal found, he took advice from a solicitor and, on Ms Blackburn's return to work, presented her with the facts as he saw them, including the absence of any agreement by Mr Moreira to pay commission, and asked her why she had written the cheque to herself. Ms Blackburn said that Mr Herbert had given her permission to do so. Mr Herbert decided that there must be a disciplinary hearing and suspended Ms Blackburn, by a letter of 2 July, until a disciplinary hearing on 4 July.
14. On 4 July Mr Herbert conducted that disciplinary hearing. Ms Blackburn put forward the account of what happened which we have summarised; Mr Herbert put forward his version. At the end of the meeting Ms Blackburn agreed to repay the £5000 and did so. Mr Herbert decided that he needed no further information; his evidence was that he considered whether Ms Blackburn could have acted under a mistake as to whether she had his permission to write the cheque but concluded that she knew that she had no authority to do so. He decided that, despite the repayment, he could no longer trust Ms Blackburn and that he had no alternative but to dismiss her for gross misconduct, as he did on the next day after consulting Mr Moreira who agreed with his decision but suggested that Ms Blackburn be given - as she was given - an ex gratia payment of £5000 together with accrued salary entitlements.
15. No appeal was offered; Mr Herbert explained to the Tribunal that this was because Ms Blackburn's only explanation for her action was one he knew to be false and that he did not see therefore how an appeal could be useful; and further, given the very small size of Maconde's operation, an appeal would have involved a director coming from Portugal. No appeal was sought by Ms Blackburn; but there was no written disciplinary procedure setting out any right to appeal or any reference to such a right either in the statement or in any other document.
16. The Tribunal concluded, at paragraph 25 of their decision, that Ms Blackburn knew or ought to have known that the issue of her commission had not been resolved and that she was not entitled to any payment when she wrote the cheque as she did. They found that, if she was mistaken as to the extent of her commission, she was at best reckless as to whether she was entitled to write the cheque. They concluded that her conduct in writing herself the cheque amounted to gross misconduct. At paragraph 26 the Tribunal found that, as Mr Herbert was the decision maker and only he and Ms Blackburn possessed the knowledge relevant to his decision i.e. whether Ms Blackburn had permission to write the cheque, Mr Moreira's presence at the disciplinary hearing or at appeal could not have assisted her.
17. Finally, at paragraph 30 the Tribunal concluded that Ms Blackburn was not entitled under her contract or by any later agreed variation to a commission payment; and at paragraph 31 they concluded that Maconde reasonably believed that Ms Blackburn had acted dishonestly after what was, having regard to their size and resources, a reasonable investigation and that their dismissal of Ms Blackburn for gross misconduct was within the band of reasonable responses open to Maconde.

The commission claim

18. Treating the statement as a written contract of employment of which the annexe table was part, Mr George on behalf of Ms Blackburn submitted that, it being not open to the Tribunal on construction of the statement alone to determine that the commission for which the annexe table provided was dependent upon Maconde's reaching a turnover of £10 million, the Tribunal had erred in law in their conclusion that what had been made clear to Ms Blackburn during the discussions in Portugal became incorporated into the contract of employment. While his arguments in his skeleton argument and orally before us were, of course, more fully developed, we can, we hope not unfairly, summarise his submissions before us in the following propositions:-

(1) What the parties said in the course of negotiations but did not insert into a subsequent written agreement could not be treated as part of that written agreement; and indeed evidence as to what the parties had said in the course of negotiations was inadmissible as to the construction of that agreement.

(2) If a clause was incorporated by reference into a written agreement which conflicted with the terms of that written agreement, the latter must prevail.

(3) The Tribunal made no finding that Ms Blackburn had expressly accepted the restriction on her commission entitlement for which Maconde contended and could not conclude that there was such a restriction on the basis of implication alone.

(4) Ms Blackburn could not be said to have accepted that restriction by signing the statement which did not include that restriction.

19. We do not doubt the correctness of the first two propositions. As to the first, treating the statement as if it were a written contract of employment as opposed to a written statement of the terms and conditions of employment providing strong evidence of the terms of the contract, it was not open to the Tribunal to construe the statement as a provision that commission should not be payable until the £10 million turnover target had been achieved on the basis of what the parties said in the course of pre-contractual negotiations. Mr George drew our attention to ICS Limited -v- West Bromwich Building Society [1998] 1 WLR 896 in which, in the House of Lords, Lord Hoffmann, in setting out "general remarks about the principles by which contractual documents are nowadays construed" (page 912F) gave as the third such principle (page 913B):

"the law excludes from the admissible background [which a Court may take into account for the purposes of construing a contract] the previous negotiations of the parties and their declarations of subjective intent. They are admissible only in an action for rectification. The law makes this distinction for reasons of practical policy and, in this respect only, legal interpretation differs from the way we would interpret utterances in ordinary life ….."

20. Mr George also referred us to various passages in chapter 12 of the 28^th edition of Chitty on Contract as to the rules of contractual construction upon which Courts and Tribunals must proceed; those passages include both of Mr George's first two propositions.
21. However in our judgment neither proposition is apposite to this case. Maconde did not argue before the Tribunal or before us that the statement could have itself been construed as containing the provision as to the £10 million turnover target or that it incorporated that provision by reference. Their submission was that the statement did not contain the whole contract and both parties knew and intended when they signed the statement that the contract of employment on offer to Ms Blackburn included that provision, the need for which had been made clear and the reasons for which had been explained to Ms Blackburn during the discussions in Portugal before the statement was signed. The principles of construction of a written contract were not in issue; what the Tribunal had to decide was whether the statement contained the whole of the contract between the parties.
22. While it is correct that the Tribunal did not find any express acceptance on Ms Blackburn's part of the £10 million target as a pre-condition of her entitlement to commission, it does not follow, in our judgment, that the Tribunal were therefore bound to conclude that that pre-condition formed no part of the contractual arrangements between the parties. The Tribunal found, as primary fact, that before Ms Blackburn accepted Maconde's offer of employment, she had been informed and knew that there was to be that pre-condition upon her entitlement to commission. She knew, therefore, that the terms on which Maconde were offering employment were not wholly represented by the statement but included that pre-condition which was not in the statement; and she accepted that offer of employment by signing the statement and entering upon her employment. While the Tribunal did not spell out precisely that contractual analysis in paragraph 13 of their decision we have no doubt that that is what they intended when they used the words:

"that provision was incorporated into the Applicant's contract of employment"

23. In our judgment it was open to the Tribunal so to conclude - and indeed they were right so to conclude. Once the Tribunal had rejected Ms Blackburn's account and accepted Mr Herbert's account of what had occurred in Portugal, no principle of contractual construction would have availed Ms Blackburn (assuming that the statement had been a written contract) there did not need to be evidence of or a finding of an express acceptance by Ms Blackburn of the pre-condition; there was no reason, in law, in our judgment, why the Tribunal should not have concluded, as they did, that by her conduct Ms Blackburn had accepted the oral pre-condition and had agreed the employment offer to her on that basis.
24. Accordingly we reject this aspect of Ms Blackburn's appeal. We do not need, therefore, to consider the alternative basis for the Tribunal's decision against Ms Blackburn on the commission issue to which we have referred in paragraph 7 above.

Unfair dismissal

25. Although Mr George had, in his skeleton argument, described the Tribunal's findings as to what passed between Ms Blackburn and Mr Moreira in June 2001 as perverse, before us he made it clear that he did not challenge any of the Tribunal's findings of fact. He put his attack upon the Tribunal's conclusion that the dismissal was not unfair on two bases:-

(1) Mr Herbert could not in fact make the decision as to whether or not the accusation of gross misconduct was made out, not because he had made the allegation and then adjudicated upon it but because, in addition to his being accuser, judge and jury, whether or not the accusation was made out depended upon whether his or Ms Blackburn's version of what had passed between them before he went on holiday was true; thus he was also the chief if not the only witness for Maconde.

(2) That unfairness was compounded by the absence of any appeal; that absence could not acceptably be justified on the basis put forward by the Tribunal in paragraph 26; because only Mr Herbert and Ms Blackburn could speak to the issue as to whether Mr Herbert had or had not given Ms Blackburn permission to write the cheque without a resolution between Ms Blackburn and Mr Moreira of the commission issue, it was all the more important that some other person should have conducted an appeal or that at least such an appeal should have been offered. There was no finding that it was not reasonably practicable for Mr Moreira or someone else from the parent company to conduct such an appeal; the Tribunal appeared to have thought that Mr Moreira could not add anything evidentially and not that he or someone else could not conduct an appeal.

26. In support of his first proposition Mr George relied upon Moyes -v- Hylton Castle Working Mens' Social Club and Institute Ltd [1986] IRLR 483 in which, following two alleged incidents of harassment of a barmaid, the steward of a working mens' club was dismissed for misconduct. The second incident had been observed by the club's chairman and assistant secretary. A subcommittee of the club investigated what had happened; both the chairman and the assistant secretary were members of the sub-committee and took part in its meetings. They were also members of and were present at the meeting of the full committee which decided that the steward had been guilty of misconduct. The Tribunal found that the steward had been fairly dismissed. The Employment Appeal Tribunal, presided over by Popplewell P, allowed the steward's appeal, substituted a decision that the dismissal was unfair and remitted the case to the Tribunal to consider remedy.
27. At paragraph 6 of its judgment, the Employment Appeal Tribunal said:

"6 There will inevitably be cases of industrial relations where a witness to an incident will be the person who has to make the decision to dismiss. Thus a sole proprietor who is abused by a foreman can scarcely expect someone else to make the decision for dismissal. One partner in a firm of two could scarcely be criticised for telling his other partner what had happened and at the same time coming to the decision of dismissal. But in the instant case it was entirely unnecessary for the chairman or Mr Spedding to be both witness and judge. It was impossible for them to disassociate their role as witness from that of judge, and, indeed, it put the other members of the sub-committee and the full committee into an impossible position ….."

28. At paragraph 9 the EAT said:

"It is impossible to lay down as a matter of law all those occasions where natural justice has been breached, but in the present case we are all firmly of the view that any reasonable observer must conclude that justice did not appear to be done, nor was it done."

And at paragraph 11 the EAT said:

"We have to say that if that is a finding of fact that the proceedings were not invalidated, then we would adopt what May LJ said in Neale -v- Hereford & Worcester County Council [1986] IRLR 168 "my goodness that is certainly wrong"……

29. In support of the second proposition, as to the absence of an appeal, Mr George referred us to Whitbread & Co PLC -v- Mills [1988] IRLR 501; the facts of that case were complex and do not need to be considered for present purposes. At paragraph 52 of its judgment the Employment Appeal Tribunal, presided over by Wood P, repeated the well established principle that, in considering whether a dismissal is fair, the Tribunal must consider the circumstances as a whole and that those circumstances include any appeal process. The Employment Appeal Tribunal continued at paragraph 53:

"It seems to us that in the context of industrial relations those appeal procedures form an important part of the process of ensuring that a dismissal should seek to be fair. Secondly, as Lord Bridge said at page 115 in Tipton ……both the original and the appellate decision of the employer are necessary elements in the overall process of terminating the contact of employment ……"

In this case, submitted Mr George, the combination of the defects in the disciplinary process and the complete absence of any offer of an appeal ought to have led the Tribunal to the only reasonable view, namely that the dismissal was unfair; and the Tribunal's decision to the contrary was perverse.

30. Ms Palmer submitted that the Tribunal had correctly considered whether the dismissal fell within the band of reasonable responses having regard to Maconde's size and resources, that in considering that question the Tribunal had found that there was a reasonable investigation, that they had thus found the procedure adopted by Maconde to have been fair, and that the Tribunal's decision was not perverse.
31. She relied, so far as the original disciplinary hearing was concerned in particular on the following:

(1) The issue as to what was said between Mr Herbert and Ms Blackburn about cheques was not the only issue of fact which Mr Herbert had to consider; there were other issues of fact between Ms Blackburn and Mr Herbert, as to whether Ms Blackburn had sought to make mobile telephone calls to him while he was on holiday and as to a conversation with Ms Jones; and Mr Herbert was found, at paragraph 26 of the Tribunal's Decision, to have taken all the relevant evidence into account.

(2) It is acknowledged in paragraph 6 of the EAT's decision in Moyes that, in a small organisation such as that of Maconde, the witness to the incident which has given rise to the complaint of misconduct may also have to be the decision maker. In this case there was no one other than Mr Herbert who could have made the decision. In any event Mr Herbert specifically consulted Mr Moreira before making his decision.

(3) The Tribunal had before them detailed written submissions on both sides as to the procedure which they summarised in paragraph 29 of their decision and plainly took into account. By deciding as they did, they rejected the criticisms of the procedure made on behalf of Ms Blackburn, as they were entitled to do.

32. As to the appeal Ms Palmer repeated the points which we have summarised above and added that:- (1) Ms Blackburn never sought an appeal. (2) At paragraph 26 the Tribunal had correctly made the point that Mr Moreira could not have assisted evidentially. (3) Procedural unfairness would not have made any difference; Ms Blackburn suffered no prejudice. (4) Whether Mr Moreira or someone else from the parent company could have conducted an appeal (or indeed the original disciplinary hearing) could have potentially rendered the process fairer was not to the point; the Tribunal had to decide whether the procedure which was adopted was unfair and decided that it was not.
33. Ms Palmer supported her argument by reference to Mackellar v Bolton [1979] IRLR 59and Tiptools Ltd -v- Curtis [1973] IRLR 276. In the former the EAT, presided over by Bristow J, overturned the decision of a Tribunal which had found that the employer, a General Practitioner, had unfairly dismissed his receptionist. The Tribunal had made an error of law which is not relevant to this appeal; the EAT decided that, because the primary facts were not in dispute, it was in as good a position as the Tribunal to decide the issue of fairness absent the Tribunal's error of law and, in considering this issue, said, at paragraph 13, of the absence of any meeting between the receptionist and patients who had complained about her and of the absence of any warning:

"In our judgment it is important that paragraph 6(8)"

[the present section 98(4) of the Employment Rights Act 1996]

"should be applied having regard to the individual circumstances of each problem. Precise requirements of the code of conduct do not necessarily fit every problem. They are not rules of law. They are guidelines and guidelines which are no doubt very useful in all sorts of problems. But the rule of law which the statute lays down is, was the action of the employer reasonable in all the circumstances of the particular case having regard to equity and the general merits of the case. ….

The primary consideration for the doctor is to see to the welfare of his patients, and he is not armed with an elaborate personnel department and a number of subsidiary commanders between him and Mrs Bolton. He and Mrs Bolton are in direct communication and in a relationship where confidence by the doctor and Mrs Bolton and loyal devotion by Mrs Bolton to the good of the practice …. are absolutely basic and it is a totally different context to the context at which the Code of Practice is primarily aimed."

34. The Code of Practice referred to in that extract was the code under the Trade Union and Labour Relations Act 1974; it was in a different form from the present Code of Practice which came into effect in September 2000.
35. In the earlier case, Tiptools, the National Industrial Relations Court had before it an appeal by the employer, a small family engineering company, against the Tribunal's decision that the dismissal of the employee for incompetence was unfair because of the absence of any warning and of any appeal process against the decision to dismiss. In the course of their judgment dismissing the appeal, the Court said, at paragraph 7:

"It is true that in paragraph 132 of the Code of Practice, relating to procedures, sub-paragraph (iii) states that the procedure should be in writing and should 'provide for a right of appeal, wherever practicable to a level of management not previously involved'. That recommendation is applicable to large companies where the responsibility for dismissal may lie with a level of management below the top management. In such circumstances it will generally be desirable that there should be a right of appeal to a higher level of management. But that does not apply to small, family companies. In small, family companies one expects the decision to dismiss to be taken by the senior director. In this case it was taken by him and it is not practicable to have any appeal beyond this."

36. We accept without hesitation that, in considering the fairness of an employer's disciplinary procedures, the Tribunal must take into account the size and resources of the employer's undertaking; it is required so to do by section 98(4). A small undertaking cannot reasonably be expected to achieve the standards of a large employer with an elaborate personnel department. Mackellar is an example, in a different factual context, of that principle which is also encompassed in the excerpt from Moyes which we have quoted above.
37. We accept too, that the Tribunal in this case did expressly have in mind the size and resources of Maconde in reaching their decision and that there is no suggestion that they reached that decision on the basis of any misdirection as to the law; they applied the correct test. We can only intervene, whatever our own views, if the Tribunal reached a decision which was perverse i.e. one which no reasonable Tribunal, properly directed could have reached or one of which we feel driven to say "My goodness that was certainly wrong" (Hereford & Worcester County Council -v- Neale [1986] IRLR 168) or which was not a permissible option (Piggott Bros -v- Jackson [1991] IRLR 309). In our judgment, however, although Maconde was, of itself a very small company, it was part of a much larger organisation and had resources available to it from outside its own small staff and office, namely the resources of the parent company which controlled a Europe-wide group. It was the parent company which made the decision as to the terms on which Ms Blackburn and the male sales executive would be employed and to whom Mr Herbert referred for confirmation of his decision to dismiss Ms Blackburn. The original disciplinary hearing, at which Mr Herbert was the only or principal witness for Maconde and the decision maker, was unsatisfactory because the principle, if not the only, factual issue to be decided was whether Mr Herbert's version or Ms Blackburn's version was to be preferred; but we would not be critical of the Tribunal's conclusion as to overall fairness if that hearing had been followed by the provision to Ms Blackburn of a proper appeal process. However there was no appeal process at all; while it may well be that in some cases the size of the relevant organisation will be such as to render it impracticable to hold an appeal, the Code of Practice on disciplinary and grievance procedures which now applies and which applied at the relevant time provides, at paragraph 9, that workers should be given the right of appeal against any decision taken at a disciplinary hearing and at paragraph 30 that:

"the opportunity to appeal against a disciplinary decision is essential to natural justice"

Suggestions as to how an appeal should be heard in the case of small organisations are set out at paragraph 32 Ms Palmer was careful to eschew any argument that it was impracticable for Mr Moreira or another senior person in the parent company to conduct an appeal.

38. Further, in our view, the Tribunal made an important error in accepting as, they did in paragraph 26 of their decision, the first limb of Mr Herbert's explanation for his failure to offer an appeal, namely that an appeal could serve no purpose because he knew Ms Blackburn's explanation to be false. It was particularly because Mr Herbert had a natural belief in his own version of events and had decided that Ms Blackburn's explanation was false and had acted as decision maker when the primary factual issue was his version against hers that an appeal, conducted by someone other than Mr Herbert, was essential to natural justice.
39. There was, on the facts, in our judgment no justification for the absence of an appeal; on the contrary this was a case in which, because of the inherent unfairness of the initial disciplinary proceedings, a properly conducted appeal was of very great importance. We agree with the view of the Employment Appeal Tribunal in Whitbread that appeal procedures form an important part of the process of ensuring that a dismissal is fair - which principle is reproduced in the current Code of Practice. Tiptools, which is a very early decision in terms of the development of the principles of unfair dismissal, does not suggest that small family companies do not need to have an appeal process, at least unless it is impracticable to provide one. In this case Maconde's position as one subsidiary in a large group meant that that it was plainly not impracticable to provide a proper appeal.
40. Had the Tribunal not erroneously accepted Mr Herbert's explanation for the absence of an appeal and had they considered, as they should have done, that it was not impractical to provide an appeal conducted by someone other than Mr Herbert they would, in our judgment have come to the opposite conclusion on the issue of procedural fairness. Whether that is so or not, looking as we must at the fairness of the procedure overall we are all firmly of the view that this is one of those rare cases in which the Tribunal's decision as to procedural fairness is one of which we must say "My goodness that was certainly wrong" and that it was one which no reasonable Tribunal properly directed could have reached. The nature of the original disciplinary proceeding together with the absence of any appeal, for which there was no acceptable reasonable explanation, produced a disciplinary process which, taken as a whole, was so unfair that to regard it as a fair and reasonable process was not a permissible option. A reasonable Tribunal could not have come to any other conclusion, in our judgment, for the reasons we have set out than that the disciplinary process was unfair and therefore that the dismissal was unfair.
41. The argument that Ms Blackburn never sought an appeal does not, in our judgment, avail Maconde. There was no finding that she was ever told that she might seek one; and it was not suggested that there was any evidence to that effect. Nor was there any suggestion that the termination letter referred to any right to appeal. There was no written disciplinary procedure at all; the statement of terms and conditions of employment refers to no such procedure. Nothing informed Ms Blackburn of any right to appeal. It is for the employer to make an appeal available to the employee. Mr Herbert plainly considered offering Ms Blackburn an appeal; but he did not do so. An employer who does not inform an employee that she has a right to appeal against termination of her contract of employment and offers no such appeal cannot seek to justify the shortcomings of the disciplinary process which he has provided by relying on the absence of any request for an appeal from an employee, unless of course she knows of the right to appeal and chooses not to pursue it.
42. The argument that if there had been a fair procedure Ms Blackburn would still have been dismissed and therefore she suffered no prejudice from the absence of an appeal equally does not avail Maconde. As Whitbread reminds us, at paragraph 40, the House of Lords in Polkey -v- A E Dayton Services [1987] IRLR 183 decided that, in considering whether a dismissal was or was not unfair, the Tribunal should not consider whether, if the employer had acted differently, he would or might have still fairly dismissed the employee. That issue, if it arises, does so at a later stage when the Tribunal considers remedy and, in particular, what if any reduction from what would otherwise be full compensation for unfair dismissal should be made. That issue is still open in this case.
43. For these reasons we conclude that Ms Blackburn's appeal against the Tribunal's rejection of her claim that she was unfairly dismissed must succeed; and we substitute for the Tribunal's decision a finding that Ms Blackburn was unfairly dismissed.

Wrongful dismissal

44. If we had reached a different conclusion upon the appeal against the Tribunal's decision on the commission issue, it would follow that the Tribunal's conclusion that Ms Blackburn, by writing the cheque to herself, had been guilty of gross misconduct could not stand. However we have not so decided. Mr George submits, however, that even on the basis that Ms Blackburn was not entitled to commission, the finding of gross misconduct, which would have been repudiatory conduct entitling Maconde summarily to dismiss her, was in error. He relied on the Tribunal's conclusions, at paragraph 25 of their decision, that Ms Blackburn "knew or ought to have known" that she was not entitled to any payment of commission when she wrote the cheque and that she was "at least reckless" in so doing. By these words, Mr George submits, the Tribunal did not find that Ms Blackburn had acted deliberately with the knowledge that she was not entitled so to act but that she acted either deliberately or recklessly, without choosing which of those two states of mind actually existed. Accordingly they were bound to decide whether her conduct amounted to gross misconduct on the basis of the alternative more favourable to her; and, he submitted, a reckless mistake could not amount to gross misconduct.
45. No authority was advanced for the proposition that reckless conduct could not amount to gross misconduct justifying summary dismissal; and we do not accept it. Carelessness can amount to gross misconduct if the effects are sufficiently serious or may potentially be so. There is no requirement in law that gross misconduct should involve a deliberate or dishonest act. Whether an employee's conduct was or was not gross misconduct is a matter of fact for the Tribunal in each case, within the essential principle that the gross misconduct must be conduct which is repudiatory of the contract of employment. If Ms Blackburn acted recklessly, she wrote a cheque to herself for a large sum not caring whether or not she had authority to do so in a situation in which she knew that the issue of commission was highly contentious. In our judgment it was open to the Tribunal in the circumstances of this case to conclude that Ms Blackburn's conduct amounted to gross misconduct. Mr George did not argue that, if reckless conduct could amount to gross misconduct, the Tribunal's decision was a perverse one.
46. Accordingly we reject Ms Blackburn's appeal against the Tribunal's dismissal of her claim that she had been wrongly dismissed by Maconde.

Conclusions

47. (1) The appeal against the Tribunal's conclusion that Ms Blackburn was not entitled to commission is dismissed. (2) The appeal against the Tribunal's conclusion that Ms Blackburn was not unfairly dismissed is allowed; a finding that she was unfairly dismissed is substituted for the Tribunal's findings; and her unfair dismissal claim is remitted to a fresh Tribunal for a decision as to remedy. (3) We dismiss Ms Blackburn's appeal against the Tribunal's conclusion that she was not wrongfully dismissed.