United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR I WILSON Solicitor Messrs Dean Wilson Laing Solicitors 96 Church Street Brighton East Sussex BN1 1UJ
For the Respondent	MR R SAMUEL (of Counsel) Instructed by: Messrs Sherrards Solicitors Grosvenor Hall Bolnore Road Haywards Heath West Sussex RH16 4BX


 


SUMMARY Unfair Dismissal Race Discrimination

Unfair dismissal possible defects in disciplinary appeal process. Decision by employers to investigate separately three discrimination allegations - whether reasonable


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal from the Decision of an Employment Tribunal sitting at Brighton in June and July 1993 for a period of five days, who in a Decision promulgated on 2 September held that the Appellant, Mr Varghai, had not been unfairly dismissed by his employers and was not discriminated against, contrary to the provisions of the Race Relations Act. Leave for this appeal was given by Mrs Justice Cox, sitting in Chambers on 29 October.
2. The grounds of appeal were varied, but for the purposes of today's hearing, they have effectively been distilled down to three or four interesting issues which have been well argued before us today by Mr Wilson, and they relate to firstly, what was said to be flaws in the appeal process within the disciplinary process, and the impact of those flaws.
3. Secondly, the employer's decision to separate off the issues of dismissal and race, and, more importantly, to deal with the race investigation after dismissal, and thereby to ignore any impact that that race investigation might have on their view of the witnesses within the disciplinary proceedings.
4. Thirdly, criticism of the Tribunal in the approach they took in relation to a failure to put specifically to witnesses in cross-examination that they were racially motivated, and, lastly, the decision that the race investigation would be carried out by the self same person who had carried out the disciplinary investigation, and effectively already made findings against the employee.
5. The facts were well set out in the Tribunal's Decision, but it is right that we should, hopefully briefly, summarise them for the purposes of today's hearing. Mr Varghai, who in fact is not present today, we understand that he had a pre-booked holiday (and we take, obviously, no point whatsoever about that) was employed as a salesman from 15 May 1998 until his summary dismissal for misconduct in the middle of October 2002. Caffyn's are a well known motor dealer organisation with many outlets and many employees, and he was employed particularly at their Lewes branch, which we understand holds a Land Rover dealership and was apparently successful there.
6. The local manager was a Mr Ansell, and the other main part of the management involved in this case was Mr Blackaby, the Regional Director, who carried out the initial disciplinary hearing and then Mr Harrison, a more senior director, who carried out the appeal. There was evidence that there was reasonable equal opportunities awareness within the company, both in terms of training for managership and also in relation to the employees generally, although the Tribunal records that they now have the benefit of Ms Caffyn (who is presumably related to the organisation) to improve their human resource department even further.
7. By way of background, the Tribunal first dealt with the general allegations that had been made in relation to racist, and also, unfortunately, sexist behaviour within the organisation, and particularly the sales force, who presumably are the key members of that organisation, and they did come to a finding in paragraph 5, by way of background that there was racist and sexist behaviour amongst the salesmen at the Lewes branch.
8. The particular complaint faced by this employee arose in August 2002, when Mr English, who was the manager of Road Radio Ltd, an independent firm who deal with Caffyn's in relation to the fitting and supply of audio equipment, said that Mr Varghai had tried to initiate a scheme whereby the price for a job which was officially at £1,300, including VAT, would be inflated to some £2,200, excluding VAT, and that Mr English would then presumably, having been paid by Caffyn's, would give Mr Varghai the difference in cash. He said that it would help him to pay for other work he was doing on the car, and that there would a drink in it for Mr English, and he also threatened that if the scheme did not go through, he would give the radio work to a competitor, a Mr Hewitt.
9. This offer was repeated on a second occasion, it is alleged, to Mr English, when in fact the inflated price was said to be even higher, of £3,300 plus VAT, and a specific sum of £300 was going to be "the backhander" that Mr English was going to receive. Mr  English then spoke to his manager, Mr Crawford, who in turn spoke to Mr Varghai. The proposal was repeated - it was said that Road Radio would "get a couple of hundred quid" out of the deal; Mr Varghai said that he was doing it because he was not being paid enough by his employers. Mr Varghai denied this version of events. He said that he had simply made enquiries about the price of the job, that he had been quoted £1,300 plus VAT; he then changed his mind and decided that if the system was not good enough, he would go to a competitor.
10. Mr Crawford was not prepared to entertain what he regarded as this illegal and unlawful arrangement; he said that he was only prepared to do it for the proper price, and, indeed, he was going to speak to the competitor involved to make sure that the competitor was not persuaded to get involved in this scam. It was then reported to Mr Ansell, the Branch Manager; he spoke to his fellow managers, Messrs Warren and Cox and Mr Varghai was called immediately, and he was suspended on the spot, or soon thereafter. It admitted that Mr Varghai did not have any warning of what was going to take place in this initial interview. Mr Hewitt, the competitor, was indeed spoken to by Mr Ansell, and it is said that Mr Varghai had not put a similar proposal, although "he had skirted around the issue".
11. It was noted that Mr Varghai had not denied the allegation at the initial confrontation with Mr Ansell, and matters then proceeded to a disciplinary hearing, conducted, as we have indicated already, by Mr Blackaby. The case was presented against Mr Varghai by Mr Ansell. There was some criticism within the Tribunal that Mr Ansell's statement assumed guilt, but the Tribunal accepted that it was not Mr Ansell who was deciding the situation, it was Mr Blackaby, and Mr Blackaby was described generally as an honest, truthful and, as it were, upright witness in terms of the disciplinary process.
12. In his statement to the disciplinary hearing, Mr Varghai had raised financial difficulties, he claimed the whole thing was a misunderstanding and he had raised in his statement matters of racial discrimination. In a letter, which we have now seen, he referred to the racial abuse and assault from the management. He referred to the racist jokes within the organisation, but in his initial complaint, he made no specific suggestion that the key participants, Mr English and Mr Crawford, not employees, were in any sense racially motivated, or indeed part of a conspiracy together with the racially motivated sale staff.
13. At the first stage of the initial disciplinary hearing, it was decided that the allegations of racial discrimination which were raised for the first time within this letter that had been received by Mr Blackaby, would be hived off and generally that was a policy which was agreed, it seems by the employee and by a union representative, who represented him within that process. There was no challenge about separating it off, and there was no suggestion that there was a close inter-linkage between the Crawford/English version of events and race; that was never suggested to the employers.
14. At the first disciplinary hearing also, Mr Varghai claimed for the first time that he had been offered £200 by an outsider, Mr Ledwith, to let some sort of deal go through, and that he had rejected that idea, and he had reported that rejection to a fellow employee, Mr Simmons. Mr Blackaby, who was not minded to accept the Crawford English complaint as proven simply because it was one man's word against another, felt that the Simmons allegation were sufficiently important that merited further investigation, and in fact he went away to speak to Mr Simmons, and Mr Simmons completely contradicted this version of events, and indeed said that he had heard a conversation between Mr Varghai and Mr Ledwith, when Mr Varghai agreed to accept £500 under another arrangement. Mr Blackaby also went to see Mr Crawford, and he took statements from Mr Crawford, Mr English, Mr Simmons and Mr Cox. Mr Cox had tried to contact Mr Ledwith, but Mr Ledwith said that he did not want to get involved.
15. Mr Simmons was called as a witness, and we have now seen those notes, as the Tribunal did, and they are interesting because whilst initially Mr Varghai was saying that he trusted Mr Simmons, he suddenly turned round and accused the man who was going to be his own witness, of being a racist. However that did not cause Mr Blackaby to adjourn the disciplinary hearing to await the outcome of any detailed racist investigation generally about employees, or Mr Simmons in particular. At the end of the day, Mr Blackaby accepted the allegations, both in relation to Mr Crawford and Mr English, and in relation to Mr Ledwith, and he was dismissed with effect from 16 October.
16. The Tribunal dealt with a number of complaints about the disciplinary process, specifically in relation to Mr Blackaby going to see Mr Crawford, the lack of investigation prior to the initial meeting on 3 September, and the initial failure to give Mr Varghai any warning of the confrontation initially with Mr Ansell, and the Tribunal went into those matters and found that there was no inherent unfairness in any of that process, and indeed that those aspects are not pursued in front of us today. There was a finding, at the end of the day, that Mr Blackaby had a genuine belief on reasonable grounds after reasonable investigation, satisfying the British Homes Stores -v- Burchell test.
17. Matters however did not end there, because the day after the disciplinary hearing, Mr Harrison, the Director of Finance, who as we have mentioned was the gentleman who was going to conduct the appeal hearing, received letters from Mr Ledwith. There were two versions of the letter, one manuscript and one typed, the former, apparently, signed by Mr Ledwith and the second from a Karen(?) on his behalf. The manuscript letter said that:

"I have spoken to Mr Perjman Varghai today and he tells me that he been dismissed from his position at your Lewes branch due to an allegation made by another member of staff, that he accepted £200.00 from me in the course of his duties, this is most definitely not the case. At no time was any such offer made or request made by Mr Varghai ….."

Mr Harrison wrote back to him pointing out that he had received this letter, but also pointing out that when Mr Cox tried to speak to him before the disciplinary hearing, he declined to get involved and asked for further clarification. Mr Ledwith did not respond to that letter, or indeed a later request that Mr Harrison made for him to contact him and to telephone him to clarify these issues.

18. At the appeal hearing Mr Varghai claimed that the English/Crawford story was "a pack of lies" and after the appeal hearing on 15 November, Mr Harrison visited Mr Crawford, being anxious to ensure that he understood the position fully. He also spoke again to Mr Cox, regarding the conversation with Mr Ledwith and to check that conversation. It is right to say that Mr Harrison did not go back to Mr Varghai after speaking to Mr Cox or Mr Crawford; indeed there is no finding that he even told Mr Varghai that he had spoken again to Mr Cox or Mr Crawford. There is, however, a finding that nothing new emerged from those conversations and the Tribunal specifically in paragraph 21 said that:

"Had there been any new evidence then of course Mr Harrison would have been expected to have put it to Mr Varghai"

and Mr Harrison confirmed the decision to dismiss.

19. Those last comments about Mr Harrison lead us to deal with the first complaint raised here which is in relation to Mr Harrison visiting Mr Crawford and not informing either Mr Varghai or those representing him that this had taken place, even if nothing new, as they found, had emerged. The Tribunal, of course, had found initially that the disciplinary process before Mr Blackaby was a fair one, but they went on in paragraph 21 to find that even if there were defects in the earlier hearing, it is said that the later appeal hearing effectively would have corrected those, and they did not see that the discussion with Mr Crawford, as it were, invalidated that appeal hearing.
20. It is argued today by Mr Wilson that even if there was an ostensibly fair initial disciplinary hearing, that that can be invalidated by defects in a later appeal process and that the Tribunal in considering fairness as they have to do under section 98 of the Employment Rights Act have to look at the overall fairness of the process, and in particular he has directed us to the case of Whitbread -v- Mills [1998] ICR 776. The holding in the case is:

"that both the original and the appellate decision of the employers were necessary elements in the overall process of terminating the contract of employment; that each part of the disciplinary process had to be examined to see whether any defect in procedure had resulted in an unfair hearing and if it had, whether that unfairness had been rectified by the appeal hearing; that the appeal hearing was in the nature of a review rather than a complete re-hearing and was insufficient [in this case] to remedy the defects of the prior hearing; and that, accordingly, the industrial tribunal's decision that the dismissal was unfair on procedural grounds was well-founded".

Those comments emerge particularly from the judgment of this Court, given by Wood J, particular at page 794G. That case is often used to support the contention that an unfair original disciplinary process can be rectified by a fair appeal process; one looks at the whole picture.

21. Here, in a sense, the corollary is being argued that a fair disciplinary process may be invalidated by an unfair appeal process. We agree that there may be exceptional circumstances where that indeed is the case. For example, if new evidence or new material is put to that person conducting the appeal, which was not before the original disciplinary officer, then quite clearly if there is a failure to deal with that information properly, that could therefore render a process as being unfair because, as we have indicated already, it is the overall process that has to be examined carefully by a Tribunal.
22. Therefore we ask ourselves simply was there anything unfair in the secondary process, and in particular, was there any new material which emerged which might have cast a different light, a fresh light, on material which had originally been in front of Mr Blackaby. It seems to us that the Tribunal asked themselves the correct question because, notwithstanding whether or not Mr Harrison told Mr Varghai that he had been to see Mr Crawford, the key issue was whether there had been any new evidence which should be put before the employee so that he could comment upon it. That is the principle which emerges from a number of authorities, and in particular, the case of Sartor -v- P & O European Ferries [1992] IRLR 271, where again it is repeated, citing a passage from Kanda -v- The Government of Malaya [1962] AC 322 in paragraph 22 of that case, the key test is that a party has to know the case which is made against him.
23. The purpose of that requirement is to enable that party to defend himself or answer the complaint. It was followed that the notice must be sufficient to enable him adequately to prepare his defence and answer, and that must apply to the appeal process, just as much it applies to the original disciplinary hearing. The matter, however, was clearly correctly in the minds of the Tribunal when they asked themselves, as we find, the correct question: had any new evidence emerged in the course of the Crawford/Harrison dialogue? And they said that nothing new had emerged; there was no unfairness; there was no material that could affect the success or otherwise, of Mr Varghai's defence and therefore we can no substance in that complaint.
24. The second area which is raised before us is the decision to carry out the race investigation after the disciplinary process had been completed. Certainly it seems to us that in an ideal world, these two processes should have been conducted if not in tandem, certainly at the same time, so that in a sense before the decision to dismiss had been taken, Mr Varghai would have the benefit of knowing that all the matters that he had raised had been properly investigated. Indeed there is always the danger that if matters are left until after the disciplinary decision is taken, he will have a sense of grievance that in a sense the dye was cast against him within the disciplinary process, and therefore he is not getting a fair view taken of the racial discrimination allegations.
25. But it seems to us that the question here was whether the Tribunal's Decision, which held that the overall process, as far as the dismissal was concerned was fair, was a perverse decision in that they failed to ask themselves the question which was whether there were sufficient matters raised before the employers in relation to race to cause them to take the view that the race issue had to be determined, before Mr Blackaby came to a view on the disciplinary process. The Tribunal did consider this issue.
26. At paragraph 26 they raised the issue which in fact had not been raised before then, or indeed before Mr Blackaby, as to whether there was a conspiracy between the outsiders and the staff, and they rejected that. They were clearly right to do so, in fact it had not been raised as an issue before.
27. They then looked at, specifically, the particular complaint as to whether Mr Simmons was racially motivated, and indeed, effectively, went on to ask themselves, what is argued today by Mr Samuel, the important question: not just whether he was racially motivated but whether that meant that he was lying, because this was a case about credibility and honesty who was telling the truth as regards these allegations. Within the Decision they had already pointed out that this was a person who initially was being put forward by Mr Varghai as his witness of truth. They reminded themselves, also within the Decision, that the original allegation of racial discrimination was put in very general terms. It was put in the terms of the general behaviour and banter within the organisation, and that indeed is why the Tribunal dealt with that issue at the outset.
28. They also reminded themselves that it was not until Mr Simmons changed sides in the course of the case, once he had been seen that, suddenly without any warning, in the course of the second part of the disciplinary hearing, it was suggested that he was a racist. The notes of the meeting clearly indicate that that was an area which was considered carefully by Mr Blackaby, and indeed by Ms Caffyn, who was also present for some of the time, making a comment again that this was a serious allegation which was going to be investigated.
29. We are reminded also today by Mr Samuel that as far as the appeal process is concerned on this particular issue, Mr Varghai, when writing to Mr Harrison had said that Mr Simmons had lied

"for personal gain and contrary to the statement made by the Managers at Lewes office, no attempt was made to contact Mr Ledwith,

so no suggestion before Mr Harrison that Mr Simmons was not only racially motivated, but lying because he was racially motivated. These matters, as we say, were gone into carefully within the latter part of the Tribunal's Decision and in paragraph 28 of that Decision they refer to Mr Simmons, to the cross-examination of him, and point out that it was not put to him in cross-examination that he was racially motivated in giving the evidence that he did. That of course is now said to be the core complaint against him but they noted that it was not put to him. Earlier on, they had indeed looked at his evidence generally, and found him to be a credible witness.

30. It seems to us clear that the Tribunal did indeed approach this area very carefully. They were mindful of the general rather than the specific allegations which had been made about racial discrimination. No specific allegations were made until the second part of a disciplinary hearing, in relation to any of the key witnesses in the case and we are of the view that the employer's decision, approved of by the Tribunal, that there was not sufficient material to alert them to, as it were, a change of course as regards the procedure, was not a perverse view taken by the Tribunal in approving Mr Blackaby's actions.
31. Quite clearly, there may be disciplinary investigations, where there is sufficient material put before an employer, which would cause him to pause and to decide, specifically if there was a separate investigation of racial discrimination, to carry out that investigation at the same time so that a proper view could be taken of these matters. But in our view this is not one of those cases; the matters put before the employer were not such as required them to take a different view, as far as the procedure which they were adopting. At all times they had in mind what was the key decision that they had to take in relation to the credibility of, particularly Mr Simmons but also Mr Crawford and Mr English, and we can see nothing wrong in the Tribunal's Decision that they took on this particular aspect.
32. There was also criticism of the decision made that that decision was taken after Mr Varghai had been dismissed, that he was not interviewed, and that it was conducted by Mr Blackaby. These matters were gone into in paragraph 26 of the Tribunal's Decision and dealt with in this way by the Tribunal:

"Mr Varghai was not interviewed because he had already been dismissed. Mr Blackaby was appointed because Ms Caffyn did not believe that the staff at Lewes would open up and be frank with Mr Wells, who came from another Region and was unknown to them.

It is possible to question the Respondents on these counts, but should an inference be drawn from these decisions? These were not decisions which were taken at the Lewes branch but by the Regional Manager on advice from Ms Caffyn and by Ms Caffyn herself who, as indicated above had taken an active role in promoting an atmosphere in which a proper respect for equal opportunities should prevail. The Tribunal finds that it would be inappropriate to draw an inference which would lend further weight to that already recognised."

We can see nothing wrong in the Tribunal's thought processes so far as that aspect is concerned, and the view that they took of any minor procedural inadequacies in terms of their process.

33. The final complaint raised is one in relation to the methodology that the Tribunal adopted with regard to the drawing or not of inferences in relation to race discrimination, in accordance with the principles set out in Anya -v- University of Oxford [2001] IRLR 377. It is suggested that the Tribunal took the view that because these matters of race discrimination were not put in cross-examination of various witnesses, therefore as a result inferences could not be drawn, and it is argued that is far too a simplistic approach and does not do justice to the requirement in Anya, to look at all the circumstances of the case and to decide whether inferences can therefore be drawn from the primary facts as found, such inferences therefore requiring rebuttal by the employers.
34. However, as Mr Samuel carefully points out in his submissions to us, the Tribunal did indeed go through that process, because, as we have pointed out already at the outset, they did make findings that there was the racist and sexist background, certainly in relation to "banter and horseplay", as they described it, within the salesmen of the Lewes branch, and it therefore seems to us that they were at that stage going quite clearly to the first stage of the Anya process in seeking to find primary facts, as they did, from which inferences could be drawn.
35. In the latter part of their judgment they then went on to deal with the second stage as to whether or not it was right to draw those inferences and whether the employers had effectively satisfied the Tribunal that their actions were not race related, and it was in the context of that part of the Anya process that we are satisfied that the Tribunal asked themselves one of the questions which was what was the response from the particular complainants alleged and made the comment that these matters had not been put to the specific witnesses. That seems to us to be an appropriate factor which they can take into account in going through their process as to deciding whether or not the employers have rebutted the initial inference, which was drawn by the Tribunal in relation to the standards of behaviour within the sales staff, and it was legitimate for the Tribunal to place that particular factor in the balance, but no more than that, in their processes.
36. It was a very thorough process that the Tribunal went into. They started by reminding themselves of the Anya principles in paragraph 24. They then spent a further three pages or so of their Decision in going very carefully into these issues in considerable detail, and we cannot fault that process. Accordingly, for the reasons that we have indicated, we are not prepared to allow this appeal and would therefore dismiss it.