United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR PETER WALLINGTON (of Counsel) Instructed by: London Borough of Camden Legal Services Town Hall Judd Street London WC1H 9LP
For the Respondent	MR DANIEL BARNETT (of Counsel) Instructed by: UNISON Employment Rights Unit 1 Mabledon Place London WC1H 9AJ


 


HIS HONOUR JUDGE BIRTLES

Introduction

1. This is an appeal from the decision of an Employment Tribunal sitting at London (Central) on 16-18 April 2002. The decision was sent to the parties and entered in the register on 31 May 2002. The Chairman was Mrs E M Prevezer.
2. The unanimous decision of the Tribunal was that the Applicant was unfairly dismissed. The Respondent appeals against that decision.

The Employment Tribunal's Decision

3. The Extended Reasons come to twelve pages and are in conventional form. The Tribunal begins by setting out the details of the witnesses it heard: decision paragraphs 1-2. It then made extensive findings of fact: decision paragraphs 4-55. The Tribunal recited the submissions from both parties: decision paragraphs 56-66, set out the appropriate law: decision paragraph 67 and then reached its conclusions: decision paragraphs 68-75.
4. The facts, as found by the Employment Tribunal, are incorporated into this judgment. Suffice it to say that since November 1972 the Respondent was employed as an Insurance Officer based in the Treasury Section of the Financial Services Branch, Chief Executive's Department of the Appellant. Her employment terminated on 26 July 2001.
5. The Respondent had married a Mr Sheehan in the 1970s and Mr Sheehan's mother lived at 30B Milman Street, London WC1. She had then purchased 20D Milman Street WC1. The Deed of Trust was executed on 5 October 1989 declaring the property would be held on trust for herself and her son. The Respondent's matrimonial home was in Greenwich, but in the early 1990s the marriage ran into difficulty and Mr Sheehan was spending more and more time with his mother. From 1996 Mrs Sheehan senior was relying on the Respondent to help her in the house and drive her to friends. It appears that the car, which was owned by Mrs Sheehan senior and which was in her name, had a resident's parking permit which was placed on the windscreen of the car and renewed in January of each year. The Respondent renewed the parking permit each year using her mother in law's documentation. In 1998 Mrs Sheehan senior's health was deteriorating and her son obtained a power of attorney to act on his mother's behalf. He in turn granted the Respondent, his wife, a power of attorney to act on his behalf. The Tribunal found that in 1998 Mr Sheehan had moved out of the matrimonial home and the Applicant applied to the London Borough of Greenwich for a reduction in the Council Tax due to single occupancy.
6. In May 1998 the Appellant began an investigation into alleged benefit fraud coming from 20D Milman Street. The matter was investigated by Ms Tracey Barnett. She commenced an investigation which lasted approximately three years. Those investigations involved investigating who was actually living at the Greenwich and Camden addresses. Ms Barnett also concluded that Mrs Sheehan senior's motorcar was in the possession of the Respondent and that she was the main user of the vehicle. She ascertained that the car was consistently parked close to the Respondent's place of work in Argyle Street, WC1 and used by her while she was at work. In the course of her investigations, Ms Barnett did not interview the Respondent, nor Mr Sheehan, nor Mrs Sheehan senior. In May 2001, after the Respondent had been suspended, a meeting took place between Ms Barnett and Mr Steven Bird who was the head of financial planning and accountancy. He was appointed to investigate the Respondent's case. He subsequently conducted a disciplinary hearing and dismissed her. At that meeting Ms Barnett informed Mr Bird of the information she had collected over the previous three years. The paucity of information of any wrongdoing by the Respondent is evident from the Employment Tribunal's findings of fact: decision paragraphs 5-24. At paragraph 74 of its decision the Employment Tribunal find that Ms Barnett, together with Ms Martine Bourne were "determined to ensure that the Applicant's service with the Council was terminated."
7. The Tribunal conclude from that interview between Ms Barnett and Mr Bird that:

25 "Ms Barnett had decided that she was going to investigate the Applicant to see whether there was any wrongdoing and she came up with three matters:

(i) the parking permit on the car which she claims the Applicant was using;

(ii) the fact that the Applicant was claiming single person's allowance in Greenwich which Ms Barnett was trying to show was being obtained fraudulently;

(iii) that she was running an au pair business against company procedures."

8. Mrs Sheehan senior died in February 2001 but the Respondent continued to use the motorcar. The car was removed by the Appellant's parking section at the request of Ms Barnett on 11 April 2001. The Respondent went off sick on 12 April 2001. She was suspended. On 20 June 2001 Ms Barnett sent her final report to Mr Bird which confirmed the three allegations set out above. Mr Bird had only been with the Respondent for some eighteen months and it was the first time that he had been asked to investigate a case or hold a disciplinary hearing. He had assistance from Ms Martine Bourne, a Personnel Adviser. He met with her, held a preliminary interview with the Respondent on 9 May and a number of other interviews took place in May. The Tribunal clearly thought the interview with the Respondent on 9 May was important and at paragraphs 32-38 set out part of the contents of that interview between the Respondent and Mr Bird.
9. A disciplinary hearing was fixed for 17 July 2001 where the Respondent was represented by a trade union representative. Mr Bird found against the Respondent on all three counts, concluded that there was gross misconduct and dismissed the Respondent. The dismissal letter is dated 26 July 2001. It is at the EAT bundle page 83. The Tribunal found that Mr Bird had been shown all the evidence the Respondent had, she explained the situation to him and particularly that she thought she had authority to apply for the permit in her mother-in-law's name. Mr Bird's reply was that he had confirmed via the legal department that the actual powers of attorney granted in 1997 were not valid for technical reasons. He did not think that it made any difference that the Applicant thought that they were valid, to his conclusion that she had fraudulently obtained the permit.
10. The Respondent appealed in a hearing which the Tribunal found was a review and not a re-hearing. At that appeal, the appeal against working without informing the Council was allowed. The appeal on the other two charges was rejected.
11. The Employment Tribunal's conclusions are set out at paragraph 68-74 of its decision. They say this:

68 We conclude that the reason for the dismissal within section 98 (1) was due to the Applicant's conduct. As far as the charge of claiming the single person's tax in Greenwich is concerned, there had been insufficient investigation and no reasonable person would have come to the conclusion that Mr and Mrs Sheehan were living together at the address in Greenwich during this period.

69 Therefore there was not a reasonable belief in the facts as stated and, even if Mr Bird, after consulting with Ms Bourne; thought that Mr Sheehan was resident at the Greenwich address, there were no reasonable grounds for reaching that belief, bearing in mind the explanations and the evidence that was before Mr Bird about this matter.

70 As far as the parking permit is concerned, there was a full investigation into this matter and, focusing on the time before February 2001, it is clear that they did not have reasonable grounds for believing that the Applicant had fraudulently obtained a residential parking permit. The investigation does not sustain that belief and therefore there was no reasonable ground after the investigation for proceeding on those grounds.

71 For using the permit between February and April, .it is agreed that this was wrongful and the Applicant should have returned the permit to the Council as a personal representative of the mother-in-law and should not have continued to use it. Mr Bird appears not to have put much store on this misconduct, but we are satisfied that this was not fraudulent and was due to the fact that the Applicant had been away with stress and her bereavement, and this continued, either inadvertently or wrongfully.

72 We therefore conclude that, on the second count, although there was an investigation, no reasonable person could have concluded that the Applicant fraudulently obtained and used a residential parking permit.

73 In regard to the dismissal for the offence of wrongfully using the permit between February and April, we do not conclude that dismissal is a reasonable response to the circumstances of the case. The Applicant had been employed for 28 years without any warning on her file, there had been no warning to employees of the Council that they would be dismissed if there was a misuse of Council property or parking permits, it was clear and accepted that her managers knew about the parking arrangements and had condoned them. It is further clear to us that Ms Barnett for some reason had decided to investigate the Applicant thoroughly with a view to finding if there had been some wrongdoing, and did not take into account the Applicant's circumstances and length of service.

74 Mr Bird appears to have been inexperienced and relied solely on the advice and conclusions of Martine Bourne, who also appeared, with Ms Barrett, to be determined to ensure that the Applicant's service with the Council was terminated."

The Grounds of Appeal

12. The Notice of Appeal sets out four grounds of appeal. We propose to take each in turn.

Ground 1

13. For the Appellant, Mr Peter Wallington argues that the Tribunal's decision that the Respondent was unfairly dismissed was insufficiently reasoned. He relies on the well-known cases of Meek v City of Birmingham District Council [1987] IRLR 250 at 251, per Bingham LJ and Tran v Greenwich Vietnam Community [2002] IRLR 735 at paragraph 17 per Sedley LJ and paragraphs 36-40 per Arden LJ. Mr Wallington accepts that the case fell to be decided in accordance with the guidance in British Home Stores Ltd v Burchell [1978] IRLR 379, but says that in the light of Sainsbury's Supermarkets Ltd v Hitt [2003] IRLR 23 this Tribunal could not have decided that the investigation carried out by the Appellant did not comply with the objective standards of the reasonable employer. Therefore, the only conclusion the Tribunal could have come to was that the Appellant did carry out a reasonable investigation and therefore had reasonable grounds for believing that the Respondent was guilty of both of the charges which were found to be proved against her. So far as the investigation is concerned, Mr Wallington pointed to the following matters:

(i) There was an internal audit investigation;

(ii) There was an investigating interview with the Respondent by Mr Bird;

(iii) There were interviews with several other persons;

(iv) There was full disclosure to the Respondent;

(v) There was a formal disciplinary hearing with the Respondent; and

(vi) There was a right of appeal which was taken.

14. Mr Wallington also went through the evidence which was before Mr Bird before his decision to dismiss the Respondent. This material was in the bundle before us. On this basis Mr Wallington submitted that there was good evidence on which Mr Bird could make a choice as to whether or not the Respondent was guilty and says that the Employment Tribunal does not give any proper reasoning as to why it says there was no adequate investigation in this case.
15. Mr Daniel Barnett appeared for the Respondent. He argued that the Tran case is distinguishable on its facts. In that case the Extended Reasons of the Employment Tribunal covered only three pages: Tran paragraph 4. In this case the Tribunal's Extended Reasons covered twelve pages and fully set out the facts found by the Tribunal in a number of pages. The Tribunal correctly directed itself that the issues fell within British Home Stores Ltd v Burchell [1978] IRLR 379 and then set out its conclusions. That reasoning must be taken to incorporate the findings of fact.
16. Mr Barnett went on to point out that Ms Barnett failed to interview the Respondent which would have been perfectly possible, and although she was interviewed by Mr Bird, material was kept back from her. There was no interview of Mr Sheehan or his mother before she died, although all three interviews would have been perfectly possible. He pointed out that the investigation by Ms Barnett had been running for some three years. Furthermore, the Tribunal specifically found that Mr Bird was inexperienced and "relied solely on the advice and conclusions of Martine Bourne, who also appeared, with Ms Barnett, to be determined to ensure that the Applicant's service with the Council was terminated." Mr Barnett also relied upon the fact that at the appeal hearing the evidence of Mr Sheehan was excluded. Finally, Mr Barnett analysed evidence in relation to Mr Sheehan not living with the Respondent, but at 20D Milman Street: see his Skeleton Argument, paragraph 7-9.
17. We agree with Mr Barnett. At the end of the day this Employment Tribunal heard evidence from eleven witnesses and read extensive documentation. It was entitled to form the views of the Appellant's key witnesses that it did in paragraph 74 of its decision. The Tribunal made extensive findings of fact and went into the detail of the Appellant's investigation into the charges against the Respondent. Even though the Tribunal did not have the benefit of the decision of the Court of Appeal in Sainsbury's Supermarkets Ltd v Hitt [2003] IRLR 23 that the objective standards of the reasonable employer must be applied to all aspects of the question whether an employee was fairly and reasonably dismissed, we have no doubt that would have come to the same conclusion. The Employment Tribunal, as the fact finding body, has conducted a detailed examination of the facts in this case which enable it to say that an inadequate investigation was carried out into both of the charges upon which the Respondent was dismissed, and that therefore there were no reasonable grounds for dismissing her (our emphasis).

Ground 2

18. The second ground of appeal is that the Tribunal impermissibly substituted its own view for that of the Appellant in determining that the dismissal, so far as it was by reason of the Respondent having used a resident's parking permit issued in the name of her mother-in-law after the death of the latter, was unfair. Mr Wallington submits that there are points of confliction between paragraphs 71 through to 73. It seems to us that ground 2 relates only to the situation after the death of the Respondent's mother-in-law: see paragraph 6.2 of the Notice of Appeal which specifically makes that point.
19. Mr Barnett points out that at the Employment Tribunal (where he appeared) the Appellant did not seek to distinguish between any particular period of time when it alleged that the Respondent had dishonestly used the parking permit.
20. In our view, the structure of the Tribunal's decision is clear. Paragraph 70 relates to the situation before February 2001 (before the death of the Respondent's mother-in-law) and draws its conclusions in respect of that period of time. Paragraph 71 deals with the period between February and April 2001 and draws its conclusion. Paragraph 72 puts those two periods together (the second count), and draws a conclusion relating to both of them. Paragraph 73 refers to a separate point which is the reasonableness of dismissal for the offence of wrongfully using the permit between February and April 2001. That is because the wrongful use was admitted. The Tribunal go on to conclude that dismissal was not a reasonable response to the circumstances of the case given: (a) that Mr Bird "appears not to have put much store on this misconduct": decision paragraph 71; (b) the Tribunal were satisfied that the conduct was not fraudulent and was due to the fact that the Respondent had been away with stress and her bereavement: decision paragraph 71; and (c) that the Respondent had been employed for 28 years without any warning on her file: decision paragraph 73.
21. In those circumstances it was open to this Employment Tribunal, having heard all of the evidence to come to the conclusion that dismissal was outwith the band of reasonable responses of a reasonable employer for the offence of wrongfully using the permit between February and April 2001: see Iceland Frozen Foods Ltd v Jones [1982] IRLR 439. There was no permissible substitution of its own view in this case by the Employment Tribunal.

Ground 3

22. Mr Wallington then argues that the Employment Tribunal's decision was perverse. He accepted that this argument was in support of grounds 1 and 2 and was not a separate ground of appeal. Indeed, in the light of the decision of the Court of Appeal in Yeboah v Crofton [2002] IRLR 634 it is difficult to see how he could do so. The test of perversity is a very high one. It is not for this Tribunal to comb through the reasoning of an Employment Tribunal to see whether it is perverse or not. The matter ought to be clear on the face of it.
23. In our judgment, the matters raised by Mr Wallington in his Skeleton Argument raise no point of law here. The Tribunal heard evidence about all of the matters that he referred to and in our view understood both the Appellant's parking permit scheme as well as the totality of the facts of the case including the decision of the Appellant's personnel appeal committee. It had the documents relating to that appeal in front of it. There is no perversity here.

Ground 4

24. Mr Wallington finally argued that the Employment Tribunal had applied the wrong test in determining whether there should be no reduction in compensation for contributory fault on the part of the Respondent and therefore its decision to that effect was perverse. The Employment Tribunal's decision is found at paragraph 66 of its decision where it said this:

66 "Mr McCarthy asked us to consider whether the Applicant would have been dismissed in any event, but this can only occur if the Tribunal considers that the dismissal was unfair because of failure to follow the proper procedures. He also submitted that there had been 100% contribution by the Applicant to the dismissal. It was pointed out that, in conduct cases, it is unusual to find contribution as it is usually in redundancy claims or claims where procedures have not been followed."

25. It is common ground between the parties that at the conclusion of the hearing the Employment Tribunal stated that no reduction was being made for contributory fault. The parties have therefore agreed for the purposes of this appeal to treat that matter as determined notwithstanding the absence of an express finding in the written reasons.
26. Mr Barnett frankly concedes that despite the Chairman's subsequent response: EAT bundle page 39, the Tribunal's decision on contributory fault cannot stand because it is clear law that contribution is very often an issue in conduct cases and not at all in redundancy claims or claims where procedures have not been followed. There was therefore an error of law here on the part of the Employment Tribunal. We agree.

Conclusion

27. For the reasons given above, we dismiss the appeal on grounds 1-3 but allow the appeal on ground 4 alone. We have carefully considered how to dispose of the case but, not having heard the evidence, we do not feel it right to substitute our view as to what is the appropriate percentage of contributory fault on the part of the Respondent. We therefore remit the case to the same Employment Tribunal to determine that percentage of contributory fault. We hope that it will not be necessary for the parties to incur the further expense of that hearing and that they will be able to agree an appropriate and just figure.