United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	THE APPELLANTS IN PERSON
For the Respondent	MR C J CHAPMAN (Solicitor) Messrs Barnes Marsland 51 Hawley Square Margate Kent CT9 1NY

SUMMARY

ET found correctly Respondent entitled to fairly dismiss Applicants – but not summarily, so entitled to notice.


 


HIS HONOUR JUDGE SEROTA QC

1. We are dealing today with an appeal and cross appeal from a Decision of the Employment Tribunal at Ashford that was sent to the parties on 12 January 2004, the Tribunal being chaired by Ms Valerie Cooney. The Employment Tribunal dismissed Mr and Mrs O'Reilly's claims for unfair dismissal. It found that the Respondent, Mr Ellis had made unlawful deductions from their wages, I believe in respect of holiday pay, and ordered that Mr OReilly should receive £269.82 and Mrs O'Reilly £141.25. We note there is no appeal against that part of the Decision. It also found that Mr Ellis was liable for damages for breach of contract in dismissing Mr and Mrs O'Reilly without notice and the compensation for that was assessed at £565.00 each. That is the subject of the cross appeal. There was also a claim by Mrs O'Reilly under the National Minimum Wage Act which was dismissed. There is no appeal in relation to that.
2. Originally Mr and Mrs O'Reilly had put in a number of grounds of appeal and when the matter was considered under Rule 3 of the Employment Appeal Tribunal Rules of Procedure Her Honour Judge Wakefield considered that the case did not disclose any merits and referred the matter to the Registrar who concluded there was no arguable point of law. However, Mr and Mrs O'Reilly had the matter referred on appeal to His Honour Judge Clark and on 24 May 2004 he directed that there should be a Full Hearing on two points only, which I shall come to later.
3. Let me say something now about the factual background. Lifeboat Inn is in Folkestone. It is owned by Mr Ellis. Mr Ellis is what might be described as a small employer. Mr and Mrs O'Reilly were his only employees until he took on as an area manager, a Mr Hawken. As we understand the matter, he has another Public House in Margate which is fully tenanted, so he has no staff there. He also runs an off License shop elsewhere in Folkestone.
4. On 28 September 1998 Mr and Mrs O'Reilly, who have a great deal of experience, (I believe some forty years experience in the licensed trade) became managers of the Lifeboat Inn. They were required to live on the premises. We note that in March 2002 Mr O'Reilly had the misfortune to suffer two heart attacks, and until the date of his dismissal, which we shall come to shortly, he was receiving statutory sick pay. He did, however, play a limited role in the management of the Public House.
5. The Employment Tribunal concluded that the responsibility of Mr and Mrs O'Reilly was to ensure the Public House was stocked and staffed adequately and that as well as seeing to the general day to day running of The Lifeboat it was their duty to ensure that licensing laws and all relevant food and hygiene regulations were complied with and that they should report any disrepair, building or property maintenance requirements to the owner.
6. In May 2002, and to some extent, as somewhat of a mystery, a Mr Hawken was appointed as the District Manager. Whether he was full-time or part-time is not clear to us and bearing in mind the rather limited size of the business, it is altogether unclear what he was to manage. But nonetheless he was responsible, or became responsible, for supervising Mr and Mrs O'Reilly and was in effect now their Line Manager. It is unnecessary to go into all the details but it is clear that various matters concerned him, in particular, the kitchen and food preparation areas of The Lifeboat were dirty and unhygienic. Relations between him and Mr and Mrs O'Reilly did not go smoothly and we note that the Employment Tribunal found that Mr O'Reilly in particular was somewhat resentful of Mr Hawken's input. There were additional matters that caused friction. Mr Hawken wanted a new form of timesheet to be used which for whatever reason, although they were asked on a number of occasions, Mr and Mrs O'Reilly never provided. They clearly felt that they were unnecessary and did not comply with his instruction to provide them. The Employment Tribunal had this to say:

"It is clear that Mr and Mrs O'Reilly resented Mr Hawken's interference in their management of the public house and his criticisms of their previous management of The Lifeboat. There is no doubt that they did not carry out his instructions regarding a number of matters. In addition to the insurbordinate tone of his letter of 4 August, Mr O'Reilly called Mr Hawken a "plonker" on one occasion over the telephone."

However they were not satisfied that Mr Hawken had told lies as Mr O'Reilly had suggested in the letter which we have referred to.

7. The position was that in the summer it was necessary for various remedial works to be carried out at the Lifeboat Inn, and Mr and Mrs O'Reilly were due to go on holiday for three weeks from 21 August. After they had gone on holiday Mrs Ellis visited the property and she expressed a number of concerns, including concerns about the cleanliness of the flat, something that was not accepted by the Employment Tribunal, and the state of the garden which the Employment Tribunal was satisfied was in an unsatisfactory state. When Mr and Mrs O'Reilly returned from holiday Mrs Ellis came to see them on 11 September and gave them notice of a disciplinary hearing for 11 September. They were both suspended. They were required to leave the Public House. Mr and Mrs Ellis believed that they owned a Caravan. It is not clear, and it is perhaps not relevant, where Mr and Mrs Ellis went. However, a list of allegations was made against them which are set out in paragraph 22. The allegations included the following:

"22. … following the visit from the Environmental Health Officer, they had failed to clean behind the freezer in accordance with instructions, that they had continued to cook and provide food at The Lifeboat despite the Environmental Health Officer's findings, that the accommodation above the public house had been found dirty, and that fleas and lice had been found by the Relief Managers in the kitchen cupboards."

8. It was alleged that a connection pipe in relation to the service of Real Ales was missing. A Real Ale Guide representative had asked if he could sample the ales, and, having done so was of the opinion that they were of insufficient quality for the public house to be recommended in the Real Ale Guide. There was also a further allegation about the sate of the garden and there was an allegation that records of staff hours had not been properly kept and that Mrs Oreilly had wrongly claimed overtime payments.
9. There was also an issue raised as to an earlier Employment Tribunal hearing, which we understand had occurred a year previously, when Mr O'Reilly, it is said, had dismissed a member of staff contrary to the instructions from Mr Ellis' accountant which had led to a claim in the Employment Tribunal and an order of compensation being made against Mr Ellis.
10. There was also the allegation that Mr Ellis had been abusive to Mr Hawken. Mr and Mrs Ellis were sent a written statement by Mr and Mrs O'Reilly setting out their responses. The hearing was presided over by Mr Hawken. Mrs Ellis was in attendance as was the accountant Miss Edmonds. Mr and Mrs O'Reilly refused however, to make any comments during the course of the hearing. They told us today that this was on the advice of the Citizens Advice Bureau because they had doubts as to Mr Hawken's honesty and integrity and felt that if they said anything it might be misreported whereas if they only put things in writing there would be less chance for their views to be misreported. Whatever the position, with perhaps the benefit of hindsight, they might recognise that they were perhaps in error in failing to try and explain their position by word of mouth, as well as in writing.
11. Be that as it may, with the assistance of the Police, they arranged to remove their belongings from the public house. It is said that they took more items than they were entitled to and in fact Mrs Ellis accused them of stealing a number of items. A second disciplinary meeting was held to consider this matter but Mr and Mrs O'Reilly were not prepared to attend. On 26 September Mr Hawken found that the case against them had been made out. He gave detailed reasons. These are set out in paragraphs 30-34 of the Employment Tribunal's Decision and included a number of findings of gross misconduct in relation to Mrs O'Reilly's claim for overtime, her refusal to co-operate in relation to timesheets was considered to be serious misconduct and the abusive behaviour to Mr Hawken was found to be gross misconduct.
12. They were told that their employment had been terminated on 28 September and had they attended the second disciplinary hearing they would have been told then. Further the removal of items from their flat improperly was said to constitute gross misconduct. Mr and Mrs O'Reilly were informed of their right of appeal. The appeal was heard by Mrs Ellis. The O'Reillys provided written submissions but by reason of illness did not attend. Mrs Ellis rejected the appeal and gave detailed grounds for doing so. Mrs Ellis, let it be said, had been involved in the investigation. It was her visit to the premises in the absence of Mr and Mrs O'Reilly that had triggered the disciplinary process and, of course, Mr and Mrs O'Reilly have sought to argue that her involvement in the appeal rendered the appeal nugatory.
13. The Employment Tribunal spent two days considering this matter. They heard a great deal of evidence and they came to a number of conclusions. It is apparent, although they do not say so in terms, that they applied the well-known tests to be found in Burchell v British Home Stores and Sainsbury's Supermarkets v Hitt. It is not for an Employment Tribunal to substitute its views for those of an employer who has acted reasonably and whose responses to the various necessary stages of a proper investigation, the findings of facts, and then the decision as to how to deal with the Applicants on the basis of facts found, are within the reasonable band of responses.
14. The Employment Tribunal found that although Mr and Mrs O'Reilly may not have been solely to blame for the state of repair of The Lifeboat there were problems with cleanliness and there were reasonable grounds for belief by Mr Ellis that Mr and Mrs OReilly were not keeping the public house clean. Mr Ellis also had reasonable grounds for believing that they had not attended to their duties with regard to the pipes in the cellar. The Tribunal also found that Mr and Mrs O'Reilly were responsible for the unsatisfactory state of the garden. However, the Employment Tribunal was not minded to find that, although there were perhaps problems in food preparation, there was any justification for finding fault with the remainder of the accommodation. Dismissal in respect to the state of the accommodation would not have been a reasonable response to Mrs Ellis' findings of 19 August.
15. The Employment Tribunal was satisfied there had been a consistent refusal to carry out Mr Hawken's instructions in relation to staff timesheets and the Employment Tribunal considered that the O'Reillys' attitude towards the employment of staff generally was insubordinate. They also refer to further manifestations of the insubordinate attitude of the O'Reillys in the refusal to open the premises for workmen before 9.00 am, their insistence that all Mr Hawken's instructions be put in writing, and the confrontational tone of Mr O'Reilly's letters and abuse of Mr Hawken by calling him a plonker. The Employment Tribunal, however, thought it was unreasonable to have dragged up the earlier Employment Tribunal hearing, which was a long way out of time, so as to speak. They also did not consider there was anything in the removal of the items from the flat noting that Mr and Mrs O'Reilly may have had an answer to this, but they failed to help themselves by declining to attend the hearing.
16. The Employment Tribunal then noted that the Respondent was a small employer and that the O'Reillys and Mr Hawken were the only employees. The reason, this is mentioned, is clearly, as it seems to us, by reference to submissions that were made that Mrs Ellis was an inappropriate person to have conducted the appeal. The Employment Tribunal concluded that the Respondents had reasonable grounds to believe the Applicants were guilty of misconduct in relation to the matters that we have mentioned, that they had been given a reasonable opportunity to put their case and had been allowed a right of appeal. It seems to us that this port of the decision, albeit in the briefest and shortest of forms is designed to deal with the first stage of the necessary criteria for showing that a dismissal is fair in accordance with the test set out in Burchell.
17. The Employment Tribunal at paragraph 52 then went on to say this:

"52. It is our overall finding that the Respondent acted reasonably in all the circumstances in treating the matters set out above as sufficient reason for the dismissals of the Applicants. The circumstances include the size and administrative resources of the Respondent's undertaking and we have had regard to equity and the substantial merits of the case in coming to our decision."

18. This is again extremely compressed reasoning and it seems as though the Employment Tribunal may be conflating the first stage of the appropriate test, that is the investigation and fact finding exercise in which the size and the resources of the undertaking is relevant, with the decision to dismiss, for which equity and substantial merits of the case is relevant. We note that as we pass.
19. The Employment Tribunal then went on to find that the Applicants were entitled to their holiday pay and in paragraph 55 they went on to say this:

"55. We do not consider that the conduct of the Applicants were such as to deprive them of their rights to four weeks' notice of payment in lieu. We therefore award the Applicants damages of four weeks' net pay in respect of the Respondent's breach of contract."

This is the subject of the cross appeal.

20. When the matter came before His Honour Judge Clark as we have said, he limited the grounds of appeal to two. Firstly, the argument that Mrs Ellis should not have heard the appeal and the fact that she did hear the appeal rendered the process unfair, and secondly, the argument that the appeal process was also of no validity because it was meaningless as their replacements had already been employed and were in place. The cross appeal is that the Employment Tribunal should have found that the dismissal was for gross misconduct and that that was within the reasonable band of responses.
21. Mr and Mrs Ellis have submitted to us in relation to the first ground of appeal that there was no reason why Mr Ellis could not have conducted the appeal himself albeit they recognised that he was "difficult" albeit always they say, fair, in relation to them. They say it was unfair that Mrs Ellis should have dealt with the matter because she was to some extent sitting in appeal on her own complaints based upon her August investigation. It is said on a number of occasions by Mr and Mrs O'Reilly that she had made false and malicious allegations against them and therefore should not have conducted the appeal.
22. So far as that aspect of the matter is concerned we feel that this is not a matter we can really adjudicate upon having regard to the Order of His Honour Judge Clark and in any event the position is clearly that these were matters that were considered by the Employment Tribunal.
23. Mr and Mrs O'Reilly have criticised the nature of the evidence that was before the Employment Tribunal. In effect they have said on a number of occasions that their evidence should have been preferred to that given by or on behalf of the Respondent. That evidence it was said was unsatisfactory. It relied upon unonymous hearsay receipts, Mrs Ellis' evidence was 'malicious' and their evidence from their replacements, the Woottons should not have been accepted because they has an axe to grind. On the other hand, it was said, Mr and Mrs Oreilly had their own evidence from Police records and letters from satisfied customers. Again I hope Mr and Mrs O'Reilly will understand if I explain that we cannot really go into questions of fact. That is really a matter for the Employment Tribunal which heard all the evidence and was in a position to weigh up the conflicting evidence.
24. Save in those very rare cases, and those cases are extremely rare, where it can be shown that the Employment Tribunal has misunderstood the evidence or its decision is completely "off the wall" so as to speak it is impossible to interfere with findings of fact made by an Employment Tribunal on the basis that the decision was perverse and Mr and Mrs O'Reilly have come nowhere near showing that the factual decisions could be regarded as perverse.
25. Dealing with the points in relation to the appeal. Mr Chapman has drawn our attention to a number of authorities. The first is Slater v Leicestershire Health Authority [1989] IRLR 16. This was a case in which a Mr Sivewright, carried out the preliminary investigation and also a disciplinary hearing at a hospital for the mentally ill concerning a nurse. Criticism was made of the applicant, who was said to have slapped a patient. Mr Sivewright, investigated the matter and saw the patient with a red mark on his buttock. He then carried out the disciplinary hearing. The Employment Tribunal had correctly directed itself as to the importance of the hearing being a fair hearing and the essence of the decision of the Court of Appeal can really be found in the head note:

"The Industrial Tribunal and the EAT had not erred in holding that the appellant staff nurse's dismissal was not rendered unfair by the fact that the manager who had carried out a preliminary investigation also conducted the disciplinary hearing and took the decision to dismiss.

It could not be held that because the person conducting the disciplinary hearing had conducted the investigation, he was unable to conduct a fair inquiry. Whilst it is a general principle that a person who holds an inquiry must be seen to be impartial, the rules of natural justice do not form an independent ground upon which a decision to dismiss may be attacked, although a breach will clearly be an important matter when an Industrial Tribunal considers the question raised in [what was then] s.57(3) of the Employment Protection and Consolidation Act.

In the present case, therefore, the findings of both the Industrial Tribunal and the EAT that the dismissal was fair could be interfered with only if they wee perverse and there were no grounds for the court to hold that they were so."

26. Mr Chapman then drew our attention to the Decision of Rowe v Radio Rentals Ltd [1982] IRLR 177 in which the Employment Tribunal presided over by Browne-Wilkinson J, as he then was, also had to consider issues relating to the conduct of internal disciplinary submissions. He said at paragraph 13:

"… It is very important that internal appeals procedures run by commercial companies (which usually involve a consideration of the decision to dismiss by one person in line management by his superior) should not be cramped by legal requirements imposing impossible burdens on companies in the conduct of their personnel affairs. There may be some exceptional case (which we cannot now think of) in which the rule that justice must appear to be done might apply to the full extent that it applies to a judicial hearing. But, in general, it is inevitable that those involved in the original dismissal must be in daily contact with their superiors who will be responsible for deciding the appeal therefore the appearance of total disconnection between the two cannot be achieved. Moreover, at the so-called appeal hearing (which in this and many other cases is of a very informal nature) the initial dismisser is very often required to give information as to the facts to the person hearing the appeal. It is therefore obvious that rules about total separation of functions and lack of contact between the appellate court and those involved in the original decision simply cannot be applied in the majority of cases."

They then cite with approval the Decision of Lord Denning in the case of Ward v Bradford

'We must not force these disciplinary bodies to become entrammelled in the nets of legal procedure. So long as they act fairly and justly, their decision should be supported.'"

27. He went on to refer to the decision of the EAT in Haddow and Others v Inner London Education Authority [1979] ICR 203 where Kilner Brown J giving the judgment again referred to the passage which we have just cited from Lord Denning in Ward's case and then concludes:

" We consider that in the end the only thing that really matters is whether the disciplinary tribunal acted fairly and justly." (see page 209)

28. Reference was made to the further cases. In Hussain v Elonex where a decision of Court of Appeal, Mummery LJ gave the leading judgment. He said at paragraph 26:

"I would repeat that there are no hard and fast rigid rules as to the procedures to be adopted in these cases, where there is no agreed code. What matters is fairness and reasonableness. Mr Hussain was treated fairly and reasonably because he was told of the accusation against him and was given a full opportunity to respond to them."

29. Mr and Mrs O'Reilly rightly pointed out that the decision of the Employment Tribunal which we have referred to was quite condensed and say that the Employment Tribunal did not make a clear finding in relation to the position of Mrs Ellis. Mr Chapman in this regard drew our attention to the decision of the Court of Appeal in Retarded Children's Aid Society Ltd v Day in which the Court of Appeal concluded that although an Employment Tribunal had not set out its reasons in the greatest of detail, reading between the lines the Tribunal did have all considerations in mind. The Master of the Rolls, Lord Denning went on to say:

"I would add this. The decision is entrusted in the ordinary way by Parliament to the Tribunal. I do not think it would be right to upset them and have fresh hearings on points of meticulous criticism of their reasoning. Looking at it broadly and fairly, as long as they directed themselves properly and fairly on the facts and they have not gone wrong in law, it seems to me that the Appeal Tribunal should not interfere with their decision even though they would themselves have come to a different decision. After all, the Appeal Tribunal did not see the witnesses."

He pointed out that:

"One gets a very different impression from reading the notes than one gets from hearing oral evidence."

30. Looking at the matter so far as the first ground is concerned, we recognise that the Employment Tribunal could have dealt with the position so far as Mrs Ellis was concerned, rather more fully than it did. However, it again seems to us looking at the matter in the round that the Employment Tribunal clearly heard the submissions and concluded that the overall investigation, including the position of Mrs Ellis, was a fair investigation. It is inevitable as the authorities to which we have referred have shown, that in cases of small business it would be extremely difficult, to find someone to conduct disciplinary hearings or an appeal who is wholly dissociated from the relevant circumstances. Indeed it is a common occurrence even in the case of larger organisations for those conducting investigations or appeals to have some connection with those concerned with the dismissal. We have regard to those authorities and also to the fact that it is inappropriate to subject the reasoning of the Employment Tribunal to meticulous criticism if it can be seen that it correctly directed itself as to the law. We consider that it did and therefore we must dismiss the first ground of appeal.
31. The second ground of appeal is this. The Employment Tribunal has not specifically dealt with a letter that was sent to the Shepway District Council on 26 September, that is the date of dismissal. The background to the letter is as follows. The premises had been visited by Mr Moody, the Chief Technical Officer. He had visited the premises at sometime. It is not altogether clear when; the letter is dated 2 June yet it refers to a meeting on 26 June. It may be that the letter should be dated 2 July but he referred to a number of matters, that concerned him and on 26 June Mr Hawken had written to Mr Moody confirming that the works had been fully completed and it then says:

"The new Licensees are Charles and Muriel Wootton; they have operated in the licensed trade for over 30 years.

They hold a BII certificate and will be on the next available licensing session."

Mr and Mrs O'Reilly said, 'Look, this letter makes it absolutely clear that the appeal process was a nonsense because Mr and Mrs Wootton had already been employed. They were in place' 'No' say the Respondents in their evidence before the Tribunal was "We wrote to the local authority as a matter of courtesy. The letter may not have been that clear, but at the time Mr and Mrs Wootton were not employed by us permanently. They were still employees of the Marc Clayman Agency and were only there as locums. True it is that they did subsequently become permanent but that was only after we had actually dismissed and rejected the appeals of Mr and Mrs O'Reilly."

32. It is apparent that this matter was clearly ventilated before the Employment Tribunal. We have been shown an agreed note of the evidence of three witnesses who all dealt with this matter in cross-examination. Miss Edmonds was the accountant. It was put to her:

Q: "The right of appeal was a sham?"

She said:

A: "No".

Q: "Before and Mr and Mrs O'Reilly had written stating they wished to appeal, the Relief Managers had been installed as permanent managers?

And her answer was:

A: "No. It was originally from the Agency that Mr Hawken had got hold of them. We asked Mr and Mrs Wootton if they could extend their cover."

33. Mr Hawken was also asked:

Q: "The Relief Managers. When did they become licensees? Look at your letter to Shepway District Council, (the letter we have referred to). 'Why did you go to the Licensing Sessions if they were only Relief Managers?"

And the answer was:

A: "'The Licensing Justices want to know. They have to be presented to the Licensing Justices if they are still carrying on after [a certain period of time]."

Mrs Ellis was also asked:

Q: "By the time of the appeal, the Relief Managers had become permanent managers?

A: "No. As far as I knew, Charles and Muriel were there as long as we needed them, until Peter and Pauline came back, hopefully.

Q: "If you decided to reinstate Mr and Mrs O'reilly on appeal, it would not be possible to reinstate them?"

A: "I got on fine with them. We did not want it to happen, what has happened. We wanted to see their side of the matter."

34. It is quite clear therefore that the Employment Tribunal had ample evidence before it that would enable it to conclude that there was nothing in the point made by Mr and Mrs O'Reilly. It is clear, although, the Tribunal does not say so in terms, that it must be the conclusion that it came to having regard to the fact that the investigation and appeal process were regarded as being satisfactory. This ground of appeal, therefore, must also be dismissed. We cannot interfere with the finding of the Employment Tribunal.
35. So far as the cross appeal is concerned, Mr Chapman effectively is submitting that on the facts found by the Employment Tribunal, the Employment Tribunal, was in effect, bound to find that this was a dismissal for gross misconduct, or certainly the decision to dismiss summarily was well within the band of reasonable responses. Again it is right to say that the reasoning of the Employment Tribunal is condensed. But it is clear that it correctly directed itself as to the law and in our opinion it was perfectly entitled to conclude on the facts even if this is a finding that other persons might not necessarily agree with, that the decision to dismiss summarily Mr and Mrs O'Reilly who had been employees for over four years, who lived in the premises, and Mr O'Reilly having had the misfortune to have suffered two heart attacks, was outside the band of reasonable responses. While clearly the points that Mr Chapman made to us are points that could have persuaded the Employment Tribunal to come to a different conclusion, nonetheless the Employment Tribunal properly directing itself concluded that it was inappropriate in the circumstances for there to be a summary dismissal and in those circumstances the cross appeal in our opinion cannot succeed and we reject and dismiss the cross appeal.