United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J BOWIE (Representative) Instructed by: First Business Support Hurstwood House Station Court Newhallhey Road Rawtenstall Rossendale Lancashire BB4 6AJ
For the Respondent	MR T R NAYLOR (Representative) Instructed by: Personnel Advisory Services 49 Warrington Road Cuddington Cheshire CW8 2LN


 


HIS HONOUR JUDGE ANSELL

1. This is an appeal by the employers, Warren James Jewellers Ltd against a decision of an Employment Tribunal held in Birmingham in 2002, when by unanimous decision, which was sent to the parties on 15 August, the Tribunal held that the Applicant, Miss Christy, had been unfairly dismissed.
2. The Tribunal's decision in summary terms (although we shall go into more detail) was that the process and investigation carried out by the employers in relation to an allegation that the employee had taken £1,000 in cash, had not been a thorough investigation, it had not been a reasonable investigation and therefore the employers could not rely on that investigation as giving rise to a reasonable belief entitling them to dismiss the employee.
3. The background facts are that the Respondent started work at the age of 16 in October 1999 at the Appellant's Coventry branch. There they had a large chain of retail jewellery outlets. Initially she was a temporary employee but became permanent on 31 January. Later on that year, the year 2000, she had received training in relation to branch finances – obviously an important subject in a jewellery or any retail business – and this involved, the Tribunal found, elements such as cash bags, ordering change, cashing up, mid-week balances, end of week balances, banking with Securicor, and petty cash. That training was received in about September or October 2000.
4. From the IT1 it in fact appears that the Respondent may in fact have been in charge of the shop for some months, but at the relevant time of these events, which was around 23 November 2000, there was a manager, one Ms Collinson.
5. On 23 November 2000, Ms Collinson was on her day off and the Applicant was in charge. She was responsible for cashing up and filling up the banking slip. At some stage, but certainly not during the employer's investigation, it was alleged that Ms Collinson may have come back into the shop together with her fiancé and friend. We will refer to that allegation in a moment. But it was not suggested that Ms Collinson that evening was part of the cashing up process. It was the Applicant who completed the paying in slip, indicating a cash total of £4,735. The paying in slip showed that there were £20 notes totalling £2,580, although a later investigation indicated that £3,580 in £20 notes should have been banked, in other words it was suggested that the actual figure banked in respect of that denomination was £1,000 "light".
6. The Area Manager, Angela Crowther, carried out the investigations into these matters when the discovery was made on 5 December of this shortage and Mrs Crowther carried out that investigation. Her investigation revealed particularly that at the end of the week when a total cash sum was put onto the weekly balancing figures an amount was entered by the Respondent of £10,775. In fact, taking two banking slips for that week including the £1,000 light figure, the takings amount for the end of the week should have been £9,775 and Mrs Crowther came to the view that it was the Respondent who by falsifying effectively both documents, the paying in slip and then the end of week banking slip, was the person who had the ability and the opportunity to remove the money and the finger of suspicion towards her and she was suspended. Police were told, although they in fact took no action.
7. Further investigations were carried out and the Manager was spoken to; but it appears at no stage had there been a second checking of the monies, contrary to company policy. Ms Collinson said that the Applicant had not brought her the Securicor bags for checking, although they were certainly available in the safe the following morning and indeed possibly for two or three days thereafter. The Respondent also had admitted that there had not been a check of the money. Subsequently we learned Ms Collinson was criticised by her employers for significant breaches of cash handling procedures.
8. The Tribunal found that the investigation was:

(s) "…centred around cash handling procedures and compliance or otherwise at the Coventry branch with those procedures."

And effectively later on it was clear that they had very much based their decision on what had been called in this case the "money" trail, and particularly the two documents to which we have made reference.

9. The Applicant attended a disciplinary hearing before Mrs Crowther on 28 December, that is the same person who had carried out the investigation into the matters. The reason for the disciplinary hearing was specified as "to investigate the sum of £1000 that cannot be currently accounted for."
10. Throughout the course of the disciplinary hearing, the Tribunal found that the only matter being dealt with was the alleged manipulation of the figures. Mrs Crowther at the disciplinary hearing repeated the information in relation to the banking slip and the end of week balances and Mrs Crowther had come to a conclusion, she said after a thorough investigation, obtaining statements and having heard the Applicant's explanation at the disciplinary hearing, that the Applicant had written a wrong figure on the banking slip, that she had written the wrong figure on the end of week takings. The consequence of this was that money had been lost in one count and added back at the end of the week and only the Applicant could hide the fact that it was missing from the banking until it was discovered on 5 December. Mrs Crowther therefore concluded that she did not believe that the Applicant had made any mistakes. She concluded there were several inaccuracies which when added together with the circumstantial evidence, clearly indicated that she was trying to hide the theft. Mrs Crowther formed the view that the Applicant had acted not merely in breach of cash handling procedures but stolen company monies to a value of £1,000. That was confirmed in the letter of 4 January, indicating that the employee was going to be summarily dismissed.
11. A right to appeal was exercised and that appeal was carried out by Mrs Bev Tyrrell who was the Personnel Manager. A number of issues had been raised by the employee at the conclusion of the disciplinary hearing which it was hoped that Mrs Tyrrell would investigate, in particular there was an allegation that Ms Collinson the Manager had just bought a new computer at the cost of about £1,000 and also the fact that the money and the bags had been around in the shop for several days, with other people having access to those bags. The Tribunal found that Mrs Tyrrell, who had confirmed the dismissal, had not carried out any further investigation in relation to the matters identified by the employee.
12. In their decision the Tribunal quite rightly set out the appropriate test in cases of this kind, namely was that the employers genuinely believed that the employee was guilty of the conduct complained of, that that belief was based on reasonable grounds and that the decision to dismiss was made after a reasonable investigation. The Tribunal then set out, from pages 16 onwards a number of areas, perhaps 10 in all, where they effectively criticised the employer's approach.
13. The core of the complaint made today about that part of the decision, which is the basis of the appeal, is that the Tribunal were seeking to impose their own view as to how the investigation should have been carried out and as such failed to answer the question whether or not the employers at the time had carried out a reasonable investigation. Further, it is submitted that it was not for the Tribunal to form a view as to how they would have carried out the investigation, if in fact the employers had carried out that reasonable investigation. Whilst there might have been aspects which the employers perhaps should have investigated further, it was for the Tribunal to assess whether the investigation itself was a reasonable one and therefore the employers were entitled to have a reasonable belief based on that reasonable investigation that they had carried out.
14. We have been referred to the most recent decision on the subject, which is Sainsbury's Supermarkets Ltd v Hitt [2003] IRLR 23. It is convenient to read from the judgment of Mummery LJ, where he deals, having set out apparent conflict between a number of cases in this area, with the correct approach from paragraph 30 onwards. He says this:

30 "…The range of reasonable responses test (or, to put it another way, the need to apply the objective standards of the reasonable employer) applies as much to the question whether the investigation into the suspected misconduct was reasonable in all the circumstances as it does to the reasonableness of the decision to dismiss for the conduct reason.

31 If the correct approach is taken to the application of the test laid down by the Court of Appeal to the facts of this case, the only conclusions which a reasonable Tribunal could reach is that the investigation in this case was reasonable in all the circumstances. The position is that the Employment Tribunal's decision was legally flawed by the application of the wrong test. If one looks at the findings of fact, the position is as stated by the Chairman in his dissenting conclusions. The investigation carried out by Sainsbury's was not for the purposes of determining, as one would in a court of law, whether Mr Hitt was guilty or not guilty of the theft of the razor blades. The purpose of the investigation was to establish whether there were reasonable grounds for the belief that they had formed, from the circumstances in which the razor blades were found in his locker, that there had been misconduct on his part, to which a reasonable response was a decision to dismiss him. The uncontested facts were that the missing razor blades were found in Mr Hitt's locker and that he had had the opportunity to steal them in the periods of his absence from the bakery during the time they went missing. Investigations were then made, both prior to and during the period of an adjournment of the disciplinary proceedings, into the question whether, as Mr Hitt alleged, someone else planted the missing razor blades in his locker. In my judgment, Sainsbury's were reasonably entitled to conclude, on the basis of such an investigation, that Mr Hitt's explanation was improbable. The objective standard of the reasonable employer did not require them to carry out yet further investigations of the kind which the majority in the Employment Tribunal in their view considered ought to have been carried out.

32 In suggesting further investigations of the kind set out in paragraph 6 of the Extended Reasons, the majority of the Employment Tribunal were, in my judgment, substituting their own standards of what was an adequate investigation for the standard that could be objectively expected of a reasonable employer. On the decision of this Court in Madden, that is not the correct approach to the question of the reasonableness of an investigation."

15. We have also been referred to the case of Ulsterbus Ltd v Henderson [1989] IRLR 251. We need only refer to the headnote which makes it clear that where the Tribunal had erred in suggesting that in circumstances it was incumbent on a reasonable employer to carry out "a judicial investigation with a confrontation of witnesses and cross-examination of witnesses."
16. Against that background and where we then go on to consider the Tribunal's approach where they criticise the actions taken by the employer.
17. Taken as a whole, we are quite satisfied that the Tribunal were saying that the employers did not carry out a reasonable investigation and therefore the belief they formed was not based on that reasonable investigation. We are particularly mindful of the criticism at the end of the decision where they refer to the fact that the investigating officer also acted as the disciplining and dismissing officer. We endorse what the Tribunal said that in general that is a course which if possible should be avoided.
18. But taken as a whole the various criticisms that they had in relation to the investigatory process amounted to no more than the Tribunal saying that a reasonable investigation had not been carried out. In particular they focused on the approach taken by Mrs Crowther which was very much a paper-based approach rather than a cash-based approach; and on several occasions they criticised the employers for effectively not investigating further where the cash had gone, since there were no investigations with the Giro Bank and Post Office, no account taken of the general availability on site of the safe keys, no follow up on the apparent failure of the Manager to comply with her part of the process which was the second check and the signing off procedures in connection with balances and the cash takings.
19. They did criticise, it is true, the failure to investigate the presence of Ms Collinson's fiancé and friend being potentially unauthorised persons on the premises. We do accept that this was an issue that should not have taken account as apparently it was only raised by the employee within the Tribunal proceedings and not at an earlier stage. But other than that, we do accept the Tribunal were doing no more than coming to a view that a reasonable investigation had not been carried out.
20. The fallacy in following through merely a paper trail was indeed highlighted within the Tribunal's decision, where they referred to the arguments as to whether this employee who had some experience of the company's procedures, particularly as she had been running the shop on her own for a period of time, would knowing of those procedures have exposed herself simply through changing of documentation to what was said was an inevitable state of affairs where she would be discovered at a fairly early stage. Again that was an aspect which the employers did not really appear to have considered.
21. Whilst we always appreciate that it is difficult where a Tribunal seeks to criticise a course of investigation that employers carried out, which they have to carry out as it were on the shop floor and in the heat of the moment, we do feel that there was merit in the Tribunal's criticisms of the employer's actions in this case in terms of reasonable process. In our view, they were not seeking to impose their own standards upon the employers how everything should have been checked and cross-checked; they were merely seeking to highlight the faults which led the Tribunal to come to the view that a reasonable investigation had not been carried out.
22. We will therefore refuse this appeal for the reasons that we have stated.