United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR WILLIAM HOSKINS (of Counsel) Instructed by: Messrs Gregsons Solicitors Tabor Grove Wimbledon London SW19 4EX
For the Respondent	MR PETER TAHERI (Legal Adviser) Free Representation Unit 6th Floor, 289-293 High Holborn London WC2


 


SUMMARY

STATUTORY DISCIPLINE AND GRIEVANCE PROCEDURES

Whether infringed

UNFAIR DISMISSAL

Reasonableness of dismissal

The Tribunal erred in law in finding that the Appellant had not complied with the requirements of step 2 of the Standard Dismissal and Disciplinary Procedure (Schedule 3 to the Employment Act 2002). Finding of automatic unfair dismissal, and consequential increase in award by virtue of section 31(3) set aside.

The Tribunal did not err in law in finding the dismissal to be substantively unfair. Nor did it err in law in its assessment of contributory fault and decrease in award by virtue of section 31(2).


 


HIS HONOUR JUDGE RICHARDSON

1. This is an appeal by Compass Group UK & Ireland Ltd ("Compass") against a judgment of the Employment Tribunal sitting in Stratford (chaired by Ms Jones) dated 22 November 2007. There is a cross appeal by Miss Nena Okoro.
2. Miss Okoro claimed that she had been unfairly dismissed from her employment with Compass as an assistant catering manager. The Tribunal found that her dismissal was unfair, holding both that it was automatically unfair by reason of failure to comply with an applicable statutory dismissal and disciplinary procedure and (as the Tribunal put it) "substantially unfair in breach of section 98 of the Employment Rights Act 1996". Compass appeals against these findings.
3. The Tribunal awarded compensation, but made three adjustments to the award, all of which are in issue on this appeal. Two adjustments are the subject of appeals by Compass. These adjustments were a 15 per cent reduction for contributory fault and a 20 per cent uplift under section 31(3) of the Employment Act 2002 because Compass did not comply with the statutory dismissal and disciplinary procedure. The third adjustment was a 10 per cent reduction under section 31(2) of the Employment Act 2002. Miss Okoro cross appeals against this finding.
4. In this judgment we will first summarise the background facts, then set out the statutory provisions underlying the Tribunal's reasons, and then deal separately with the various aspects of the appeal.

The facts

5. Miss Okoro was employed as an assistant catering manager at a catering facility operated by Compass for KPMG in Canary Wharf. She had more than 17 years of unblemished service with Compass and its predecessor. Her line manager was Mr Cannon.
6. There was an express provision in Compass's company rules, of which Miss Okoro was aware, to the following effect –

"Employees are not allowed to borrow either stock or equipment from their place of work without written authorisation. This will be treated as theft and will result in summary dismissal."

7. In December 2006 a supplier sent an iPod Nano to the catering facility in recognition of orders placed. An iPod Nano is a small digital music player. For convenience we will call it an iPod in this judgment, although there are larger models which are also called iPods. Miss Okoro asked if she could have it. Mr Cannon said that it was to be used as a prize or incentive to be given to staff based on performance. He locked it in a drawer. However, on Friday 2 February 2008 he left the drawer unlocked. Miss Okoro took the iPod home and kept it there. She did not open it or use it.
8. It is convenient at this point to summarise what she was later to say were her reasons for acting as she did. She said that her relationship with Mr Cannon was a good one – they would joke with each other. When Mr Cannon placed the iPod in the locked drawer he said it was so that "Nena can't steal it." She was not offended – she took it as a humorous remark. When he left the drawer unlocked she took the iPod as a joke.
9. It is common ground that as soon as Mr Cannon pointed out, on Monday 5 February 2007, that it was no longer in the drawer she told him that she knew who had taken it. Miss Okoro accepts, additionally, that on one further occasion he asked her who had taken it and she said she knew where it was. It is also common ground that Miss Okoro kept the iPod and did not divulge that she had it until 21 February 2007. She returned it, unopened and unused, during a disciplinary hearing.
10. By 21 February 2007 Mr Cannon had told his own line manager, Mr Salter. He notified a member of the facilities team at KPMG. She involved a member of KPMG's security team. On 21 February they requested that a formal report be completed on the matter. Mr Salter questioned Mr Cannon further and asked him to call Miss Okoro to find out who had the iPod. When he told her that security wanted a formal report she admitted she was in possession of the iPod.
11. On 21 February Mr Salter spoke to Miss Okoro in his office. She told him repeatedly during that conversation that she had removed the iPod as a joke. She was told that Compass were treating the matter seriously. Later that day she was suspended on full pay.
12. At some point on 21 February a statement was provided by Mr Cannon. The Tribunal describe this document as a statement and also as an incident report. In the light of the arguments raised in this case it is necessary to say something about it. The statement is in one respect very curious; it does not record that Miss Okoro told Mr Cannon on 21 February that she had the iPod, although this is common ground, and borne out by Mr Salter's note. It does however contain allegations about what happened prior to 21 February. In what appears to be an addendum the statement suggests that he had repeatedly asked Miss Okoro who had taken the iPod and that she had always answered "I will tell you later".
13. It is clear that Compass at first intended to hold an investigatory meeting. Compass's disciplinary procedure states that "no disciplinary action will be taken until a case has been investigated thoroughly". On 21 February Mr Salter wrote a letter to Miss Okoro confirming her suspension and inviting her to an investigatory meeting, reminding her of her right to be accompanied. The meeting, however, was scheduled for 23 February at 10.00 am and the letter only reached her on that morning. She telephoned to say that she needed time to arrange representation. Mr Salter agreed. The meeting was re-arranged for 26 February.
14. Then, however, Compass changed its mind in two respects. Firstly, Mr Salter decided to call her in for an investigatory meeting that very day, despite the agreement he had made and even though she would not have had an opportunity to arrange representation. However he was unable to contact her on the telephone. Secondly, Compass then decided that there was no need for an investigatory meeting at all, and cancelled the meeting for Monday. Instead Mr Salter wrote to her a letter dated 23 February 2007.
15. The letter dated 23 February 2007 invited Miss Okoro to a disciplinary meeting on 28 February 2007 and set out the reasons for holding it. They were: withholding information which led the company to believe an iPod Nano had been stolen from the office; jeopardising the company's relationship with the client; removing company property from the premises without permission; failing to make herself available whilst on suspension on full pay.
16. By the time the disciplinary meeting took place on 28 February, Miss Okoro had seen nothing in writing except the letter dated 23 February. Two documents existed. Firstly, there was the statement of Mr Cannon, to which we have already referred. Secondly, there was a note by Mr Salter of what transpired on 21 February. The hearing on 28 February was adjourned so that Miss Okoro could consider these documents and reconvened on 2 March.
17. The meeting was chaired by Mr Prentice. There are minutes of the meeting, but it is important to note that the Tribunal found them to be incomplete in two respects.
18. Firstly the Tribunal found that Miss Okoro explained that her relationship with Mr Cannon was one where pranks and jokes were an integral part. For that reason Mr Prentice adjourned and spoke briefly to Mr Cannon, who said that he had a normal relationship with Miss Okoro. The Tribunal was critical of this short summary of what took place between Mr Prentice and Mr Cannon. It was, the Tribunal said, ambiguous. Mr Cannon could have considered a normal relationship to include joking of the kind which Miss Okoro suggested. Moreover Mr Prentice did not put to Miss Okoro what Mr Cannon had said to him.
19. Secondly, the Tribunal noted that it was common ground that at one of the meetings the iPod was returned unused and unopened. The minutes do not record this fact.
20. The Tribunal found that the decision to dismiss Miss Okoro was taken by Mr Prentice at the end of the meeting on 28 February. At the meeting on 2 March she was asked whether she had any questions about the documents she was shown, but was not asked about them otherwise. She was summarily dismissed. Mr Prentice wrote to her following the meeting on 2 March. The material part of the letter reads as follows –

"The meeting was held to discuss allegations of gross misconduct, specifically in relation to allegations of removing an iPod from the premises without permission, withholding information about the location of the iPod and putting the Company's relationship with the client in jeopardy on 2^nd February 2007… I have reviewed all the evidence available to me including your comments and in accordance with Company Procedure the Company believes that your behaviour/conduct on 2^nd February and in the discussions that followed therefore amounts to Gross Misconduct … Gross Misconduct results in Summary Dismissal …"

21. Miss Okoro had a right to appeal against that decision. She was informed of her right. She did not appeal.

Statutory provisions

22. The Tribunal's finding of automatic unfair dismissal was made by reference to section 98A Employment Rights Act 1996 -

98A Procedural fairness

(1) An employee who is dismissed shall be regarded for the purposes of. this Part as unfairly dismissed; if—

(a) one of the procedures set out in Part 1 of Schedule 2 to the Employment Act 2002 (dismissal and disciplinary procedures) applies in relation to the dismissal,

(b) the procedure has not been completed, and

(c) the non-completion of the procedure is wholly or mainly attributable to failure by the employer to comply with its requirements.

(2) Subject to subsection (1), failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.

(3) For the purposes of this section, any question as to the application of a procedure set out in Part 1 of Schedule 2 to the Employment Act 2002, completion of such a procedure or failure to comply with the requirements of such a procedure shall be determined by reference to regulations under section 31 of that Act."

23. The Tribunal's reference to the Standard Dismissal and Disciplinary Procedure ("SDDP") is a reference to Schedule 3 to the Employment Act 2002. It is sufficient to set out Steps 1 and 2 of this procedure.

STANDARD PROCEDURE

Step 1: statement of grounds for action and invitation to meeting

1 (1) The employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.

(2) The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

Step 2: meeting

2 (1) The meeting must take place before action is taken, except in the case where the disciplinary actions consists of suspension

(2) The meeting must not take place unless-

(a) the employer has informed the employee what the basis was for including in the statement under paragraph 1(1) the ground or grounds given in it, and

(b) the employee has had a reasonable opportunity to consider his response to that information

(3) The employee must take all reasonable steps to attend the meeting.

(4) After the meeting, the employer must inform the employee of his decision and notify him of the right to appeal against the decision if he is not satisfied with it."

24. The Tribunal's reference to a contribution by Miss Okoro to her dismissal is a reference to section 123(6) of the Employment Rights Act 1996.

(6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."

25. The Tribunal's references to an increase in the award for failure by Compass to follow procedures and a reduction by reason of Miss Okoro's failure to appeal are references to section 31 of the Employment Act 2002.

"31 Non-completion of statutory procedure: adjustment of awards

(1) This section applies to proceedings before an employment tribunal relating to a claim under any of the jurisdictions listed in Schedule 3 by an employee.

(2) If. in the case of proceedings to which this section applies, it appears to the employment tribunal that—

(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b) the statutory procedure was not completed before the proceedings were begun, and

(c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employee—

(i) to comply with a requirement of the procedure, or

(ii) to exercise a right of appeal under it,

it must. subject to subsection (4), reduce any award which it makes to the employee by 10 per cent, and may, if it considers it just and equitable in all the circumstances to do so, reduce it by a further amount, but not so as to make a total reduction of more than 50 per cent.

(3) If, in the case of proceedings to which this section applies, it appears to the employment tribunal that—

(a) the claim to which the proceedings relate concerns a matter to which one of the statutory procedures applies,

(b) the statutory procedure was not completed before the proceedings were begun, and

(c) the non-completion of the statutory procedure was wholly or mainly attributable to failure by the employer to comply with a requirement of the procedure,

it must, subject to subsection (4), increase any award which it makes to the employee by 10 per cent and may, if it considers it just and equitable in all the circumstances to do so, increase ii by a further amount, but not so as to make a total increase of more than 50 per cent."

26. It is also important to keep in mind regulation 12(1) of the Employment Act 2002 (Dispute Resolution) Regulations 2004. This regulation, made under powers conferred by the 2002 Act, provides as follows –

"12 Failure to comply with the statutory procedures

(1) If either party fails to comply with a requirement of an applicable statutory procedure, including a general requirement contained in Part 3 of Schedule 2, then, subject to paragraph (2), the non-completion of the procedure shall be attributable to that party and neither party shall be under any obligation to comply with any further requirement of the procedure."

Automatic unfair dismissal

27. The Tribunal found that the dismissal was automatically unfair because Compass did not comply with Step 2 of the standard disciplinary and dismissal procedure ("SDDP") laid down by the Employment Act 2002. The Tribunal reasoned as follows.

"57. Going on to consider the statutory procedures, Step 1 was complied with through the invitation letter dated 23 February. As far as Step 2 is concerned in our judgment the Claimant was not given the basis for the charges against her before the meeting took place. She did not have an opportunity properly to consider her response to the information that the Respondent had which implicated her ie the incident report from Mr Cannon before the disciplinary hearing.

58. The Claimant did not have that information and documents until the actual disciplinary hearing. Although the charges were set out in the letter of invitation, this is different from the basis on which those charges are made and that is why the statutory procedures deal with it separately. Charges are by their nature very brief. The basis on which the charges are laid and on which the Respondent are instituting disciplinary proceedings would by contrast be much more extensive and give the Claimant an opportunity to consider her position, conduct her own research, formulate her explanation, seek legal advice and consider whether she needed a companion with her at the hearing; among other things.

59. In our judgment therefore the failure to provide the Claimant with the basis on which the charges were being laid against her before the hearing makes the dismissal automatically unfair."

28. On behalf of Compass, Mr Hoskins submitted that the Tribunal misapplied the provisions of schedule 3 to the Employment Act 2002. He submitted that an employee is sufficiently told the basis of the charges against her if she has been told the matters which have led the employer to contemplate dismissal. He submitted that by a combination of what Miss Okoro was told on 21 February and what was contained in the letter dated 23 February she was aware precisely why Compass contemplated dismissal. She knew what the concerns of her employer were: she had removed an item of property from company premises without authorisation; she knew that such behaviour was in breach of company policy; she had not informed management that she had taken the item for several weeks. Mr Hoskins submitted that it is not necessary for an employee to be shown each and every piece of evidence for there to be compliance with step 2 of the procedure. He relied on Alexander v Bridgen [2006] IRLR 422 at paras 38-39.
29. On behalf of Miss Okoro, Mr Taheri submitted that the Tribunal's reasoning was cogent and contained no error of law. He submitted that the purpose of the relevant part of the statutory procedure is to ensure that an employee is not just presented with a letter stating the charges, but with more evidence. He submitted that where, as here, there were investigation notes which were not given to the employee prior to the hearing, the Tribunal committed no error of law in concluding that the requirements of Step 2 were not satisfied.
30. We start with the wording of the SDDP. Step 2 of the SDDP requires the employer, prior to any disciplinary meeting, to inform the employee what the basis was for including in the step 1 written statement the ground or grounds given in it. It is important to appreciate that this requirement may be fulfilled at any time prior to the disciplinary meeting; fulfilment of the requirement does not necessarily have to post-date the step 1 written statement. Nor is it necessary for the requirement to be fulfilled in writing.
31. In Alexander v Bridgen, Elias P, giving the judgment of the Tribunal, analysed the requirements of the SDDP. He said –

"38. …At the first step the employer merely has to set out in writing the grounds which lead him to contemplate dismissing the employee, together with an invitation to attend a meeting. At that stage, in our view, the statement need do no more than state the issue in broad terms. We agree with Mr Barnett that at step one the employee simply needs to be told that he is at risk of dismissal and why. In a conduct case this will be identifying the nature of the misconduct in issue, such as fighting, insubordination or dishonesty. …. Of course, most employers will say more than this brief statement of grounds, but compliance with the statutory minimum procedure is in our view met by a limited written statement of that nature.

39. It is at the second step that the employer must inform the employee of the basis for the ground or grounds given in the statement. This information need not be given in writing; it can be given orally. The basis for the grounds are simply the matters which have led the employer to contemplate dismissing for the stated ground or grounds. In the classic case of alleged misconduct this will mean putting the case against the employee; the detailed evidence need not be provided for compliance with this procedure, but the employee must be given sufficient detail of the case against him to enable him properly to put his side of the story. The fundamental elements of fairness must be met."

32. Returning to the language of the statute, the key questions for the Tribunal were the following. What was the basis for including in the letter dated 23 February the grounds set out in that letter? Prior to the disciplinary meeting, had Compass informed Miss Okoro of that basis?
33. In our judgment there is an assumption in paragraph 58 of the Tribunal's reasons which is not necessarily correct. It is the Tribunal's assumption that the basis upon which the charges are laid will be much more extensive than the charges themselves. This is not necessarily the case. Sometimes written grounds may be quite detailed, in which case the written grounds may themselves make clear the basis on which they are laid. Sometimes the facts may be simple, straightforward and well known to all concerned, for example from a meeting at which an employee was suspended. The danger in the Tribunal's assumption is that it may deflect the Tribunal from asking and answering the questions posed by the statute, which we have just set out.
34. It is also important to appreciate the underlying purpose of the SDDP. It is intended to set a basic minimum statutory standard: see Alexander v Bridgen Enterprises at paragraph 35, where Elias P said –

"..these procedures are concerned only with establishing the basic statutory minimum standard. It is plainly not the intention of Parliament that all procedural defects should render the dismissal automatically unfair with the increased compensation that such a finding attracts. They are intended to apply to all employers, large and small, sophisticated and unsophisticated. They are not intended to impose all the requirements breach of which might, depending on the circumstances, render a dismissal unfair…"

35. The SDDP, for example, does not contain any requirement upon an employer to carry out an investigation, whereas the reasonable employer will almost always investigate an allegation of misconduct and disciplinary procedures (such as that of Compass in this case) often make provision for an investigation stage. The SDDP does not require that evidence (as opposed to the basis of a disciplinary charge) must be disclosed at any stage, whereas the reasonable employer will generally do so.
36. In our judgment, if the Tribunal had concentrated upon and answered the questions posed by the statute, there would only have been one answer. Miss Okoro had been informed of the basis of the charges against her. She knew – because she had volunteered the information herself – that the company property was an iPod and that she had indeed removed the property herself without authorisation. She knew that she had withheld this information from Mr Cannon. She knew that as a result the client KPMG had been informed and that an investigation had been required prior to her informing Compass of the true position. She knew these were the reasons for her suspension. All this had taken place on 21 February. She did not need to see the statement of Mr Cannon to know the basis upon which the Company had included the written grounds in its letter dated 23 February. Compass had put its case against her.
37. We therefore conclude that the Tribunal erred in law in holding that the dismissal was automatically unfair by reason of breach of the SDDP.

Substantive unfair dismissal

38. The Tribunal went on to find that the dismissal was substantially unfair, by which the Tribunal meant that the dismissal did not satisfy the test set out in section 98(4) of the Employment Rights Act 1996.
39. We have already described the way in which Compass truncated the investigation stage of the disciplinary process, and the criticisms which the Tribunal made in respect of the disciplinary hearing, and the minutes of the hearing.
40. In paragraphs 54 - 56 of its reasons the Tribunal said –

"54. The purpose of an investigation in disciplinary procedures is to gather all relevant evidence and get the full story before a decision is made as to whether or not to institute disciplinary procedures against the employee concerned. An investigation is an important part of the process and should only be omitted if the employer is certain that there is nothing further that can be said about the matter and that it already has all the appropriate information including what the employee has to say about the detailed allegations and evidence against them.

55. The Respondent's written procedures and practice appear to go a step further in making provision for all employees in this position to have a right to an investigatory meeting and to be accompanied to such. The Respondent did not conduct a proper and thorough investigation. The Claimant had no opportunity to explain her side of the story in a formal setting before the disciplinary hearing. The conversations she had with Mr Salter in his office cannot suffice because at that time the Claimant had not been advised that this was being considered as a disciplinary matter. She had only just been told that the removal of the iPod was being considered as a matter to be reported to security. She did not have an opportunity to comment on Mr Cannon's explanation of their working relationship. Mr Salter made no investigations regarding that working relationship even though the Claimant had made it clear that this was the context in which her conduct should be considered. It was an integral part of her defence and it was not considered by the Respondent.

56. The investigation should be completed before the decision is taken to start formal disciplinary proceedings as indicated by the excerpt from the ACAS Code of Guidance quoted above. That clearly did not take place here."

41. The Tribunal went on to observe that it found it remarkable that Compass did not even consider Miss Okoro's clean record and exemplary conduct prior to the incident when considering what punishment was appropriate. Even if it had been eventually disregarded, the Tribunal said, they found it irregular that Compass had not considered it. But they said that was not central to their decision.
42. Mr Hoskins on behalf of Compass submitted that the Tribunal has erred in law in the way in which it has dealt with the issue of investigation. He submitted that the extent of investigation which is required of an employer will depend on the extent of the factual issues in the case. He relied on observations in three cases where the employee made substantial admissions of misconduct: RSPB v Croucher [1984] IRLR 425 at paras 24, 34-38; Boys & Girls Welfare Society v McDonald [1996] IRLR 129 at paras 29, 33, Smith v Community Integrated Care Ltd [2008] UKEAT 0015/08 at paras 43 and 44.
43. In this case, Mr Hoskins submitted, there was no dispute as to the essential facts. Miss Okoro accepted that she had removed the iPod and taken it from the premises where she worked; she had kept it at home for 3 weeks; she knew it was not company policy to take equipment home without authorisation; she had not told her line manager she had it at home when asked; she revealed that she had taken it home when she was told there was to be an investigation.
44. Mr Hoskins further pointed out that Compass was aware of the mitigation which Miss Okoro was putting forward; namely that her relationship with her manager was a jovial one and she had taken the iPod as a prank. He submitted, however, that further investigation into this mitigation was not required. The charges which led to her dismissal did not depend on Miss Okoro's motives and clearly fell within the ambit of gross misconduct. The Tribunal concentrated on the question of investigation, and failed to look at the matter in the round.
45. Mr Taheri on behalf of Miss Okoro accepted that she had broken a company rule, but submitted that it was incumbent upon Compass to consider whether her misconduct was a sufficient reason to merit dismissal. The fact that a breach of a company rule was labelled as gross misconduct would not be conclusive on this issue: Ladbroke Racing v Arnott [1983] IRLR 154, paras 6, 12, 21, 31.
46. In particular, Mr Taheri submitted that the question whether a breach of a company rule was sufficient to merit dismissal might require investigation of the mitigating circumstances which were put forward. See Ladbroke Racing at para 13; John Lewis plc v Coyne [2001] IRLR 139 at para 31; Compass Group UK & Ireland v Baldwin [2006] UKEAT 0477/05 at 23. He submitted that in this case the Tribunal was fully entitled to conclude that Miss Okoro's explanation was not investigated properly. Moreover the Tribunal directed itself correctly in law. Since an appeal lies to the Appeal Tribunal only on a point of law, the appeal could succeed only if the Tribunal's conclusion was perverse.
47. On this part of the appeal, we prefer the submissions made by Mr Taheri. Our reasons are as follows.
48. As a general rule, an employer will be expected to carry out an investigation prior to dismissing an employee for gross misconduct. The standard, for the purposes of section 98(4) is to be found in British Home Stores v Burchell (1978) IRLR 379 – "as much investigation as was reasonable in all the circumstances of the case".
49. There are, however, cases where it has been held that a Tribunal erred in law in finding a dismissal unfair because an employer had not reasonably investigated an allegation of gross misconduct. These are cases where the employee had admitted gross misconduct. In RSBP v Croucher the employee admitted dishonestly submitting private petrol bills for reimbursement. He claimed that outstanding expenses were due to him. The Appeal Tribunal, reversing the Tribunal, held that no investigation into that counterclaim was necessary. In Boys and Girls Welfare Society v McDonald the employee, a residential social worker, admitted spitting at a boy and catching him in the face. The Appeal Tribunal, reversing the Tribunal, held that the employer was not required to arrange for further questioning of the boy who made the complaint. In Smith v Community Integrated Care an employee admitted using foul and abusive language to a vulnerable, elderly, patient. The Appeal Tribunal, reversing the Tribunal's majority decision, held that the employer's duty to investigate was limited where the employee had made such admissions.
50. There is, however, no universal rule that where an employee has made admissions of behaviour which might be treated as gross misconduct, an investigation is rendered unnecessary. It is of course well established that the labelling of a particular disciplinary breach as gross misconduct does not necessarily justify dismissal for the purposes of section 98(4): see Ladbroke Racing Ltd v Arnott [1983] IRLR 154. Thus, in John Lewis plc v Coyne the employee admitted making some personal telephone calls from a departmental telephone, contrary to a departmental guide which said that such conduct might lead to dismissal. She did not admit dishonesty and said that she had pressing personal reasons for making the calls. The Tribunal held that the employer should have investigated the circumstances in which the calls were made to see whether the calls were made in circumstances of personal crisis or persistently. The Appeal Tribunal upheld this decision. In Compass Group UK v Baldwin a manager admitted allowing an employee to take materials to clean the flat of her mother, who had just died. He admitted that this was a breach of company policy, but said that he was not dishonest and that employees had been assisted in this way before by members of management. The Tribunal held that the employer did not sufficiently investigate these matters. The Appeal Tribunal upheld this decision.
51. In our judgment these authorities show that there is no bright line dividing those cases where, following admissions, an employer may dispense with or curtail an investigation from those where an employer may not do so. There will be cases of admitted misconduct (such as dishonesty or violence) where no further investigation will be required. There will be others where a reasonable employer will investigate to form a view about the seriousness of the conduct in question or the mitigating circumstances surrounding the misconduct. Generally speaking it is for the Tribunal to evaluate such matters as part of its consideration of the reasonableness of the dismissal under section 98(4).
52. We emphasise that the Appeal Tribunal hears appeals only on points of law: see section 21(1) of the Employment Tribunals Act 1996. In a case such as this, the Appeal Tribunal is concerned to see whether the Tribunal has applied correct legal principles and reached findings and conclusions which are supportable, that is to say not perverse, if the correct legal principles are applied. A finding or conclusion is perverse if and only if it is one which no reasonable tribunal, on a proper appreciation of the evidence and the law, would have reached. The Appeal Tribunal's role is limited. Parliament has made Employment Tribunals the arbiters of all questions of fact.
53. In our judgment the Tribunal did not err in law in holding that Compass failed adequately to investigate the matter.
54. The central offence alleged against Miss Okoro was removing company property, which was "treated" as theft under Compass's policy, which we have quoted. It was not however suggested that she had actually committed theft or been dishonest. She had many years of good and loyal service. She had, moreover, given an explanation of the circumstances which, while management may not have approved of it, was very far from involving dishonesty. The Tribunal was entitled to take the view that Compass should have investigated her explanation to see whether it mitigated the offence with which she was charged. In particular, we think the Tribunal was entitled to conclude that the working relationship between Mr Cannon and Miss Okoro should have been investigated. It is a curious feature of the case that Miss Okoro, on any view, had told Mr Cannon she knew something about the taking of the iPod, but he had not pressed the matter with her to a conclusion. That might be thought consistent with her account that, certainly from her perspective, no more than a joke lay behind what had happened; and that, as between them, there was an unusually informal working relationship. On at least two occasions the management of Compass seem to have believed themselves that there was something to investigate; Mr Salter first arranging and then dispensing with an investigation stage to the process, and Mr Prentice adjourning to speak to Mr Cannon but then doing so only perfunctorily.
55. In these circumstances we do not think that the Tribunal erred in law in holding that the dismissal was unfair for the reasons they gave.
56. We would add, for completeness, that the Tribunal found that section 98A (by which we think they meant section 98A(2)) did not assist Compass, and there is no appeal from that finding.

Contributory fault

57. On the question of contributory fault, the Tribunal reasoned as follows –

"62. It is also our judgment that the Claimant did contribute to her dismissal by her conduct. Although we find that she did have this jovial friendly relationship with Mr Cannon she should have returned the item sooner and not allowed it to get to a stage where it needed to be reported to senior managers. She did not appear to have appreciated that this was a serious matter until she was facing a disciplinary hearing and this was partly her fault as well as that of the Respondent. We find that the Claimant did contribute to her dismissal and we estimate that to be 15%."

58. Mr Hoskins submits that an assessment of 15 per cent is unsupportable and perverse on the facts which the Tribunal found in this case. He submits that it cannot be sustained in a case where she, a member of management herself, removed company property from the premises, kept it for a number of weeks, and did not tell her manager what had happened to it. In answer Mr Taheri submits that the deduction which the Tribunal made cannot be described as perverse. He points out that Miss Okoro was never accused of theft or misconduct; that she had a good long record of service; that she always said she knew what had become of the iPod; that it was returned unused and unopened; and that the incident should be seen against her relationship with her line manager. He referred us to Foster v Somerset County Council [2004] EWCA Civ 222.
59. Again we remind ourselves that there is an appeal to the Employment Appeal Tribunal only on a question of law. A Tribunal's percentage finding of contributory fault is very much a matter of fact for the Tribunal: see Foster v Somerset County Council, which followed Hollier v Plysu (1983) IRLR 260. Although we are inclined to agree that the percentage finding of contributory fault is low we can detect no error of law in the Tribunal's reasons and we do not think the Tribunal's assessment can be described as perverse.

Increase for failure to follow the SDDP

60. It follows from our finding that the dismissal was not automatically unfair that the Tribunal's increase in the award pursuant to section 31(3) of the 2002 Act must be set aside.
61. There is one further point to make about the increase in award which the Tribunal made. Under section 31(3) the Tribunal is required to make an increase of 10 per cent and given a discretion to make a further increase up to 50 per cent if it thinks that it is just to do so. The Tribunal ought to have set out why it considered it just to make an increase of more than 10 per cent.

Reduction for failure to appeal

62. Miss Okoro's cross appeal against the reduction of the award under section 31(2) was predicated on the basis that the Tribunal had found Compass to be in breach of the SDDP at step 2. If so, the effect of that breach would have been to relieve Miss Okoro from compliance with further requirements of the procedure: see reg 12(1) of the 2004 Regulations. This, as Compass conceded, would have been an unanswerable point.
63. However, since we have found that Compass was not in breach of the SDDP, reg 12(1) does not assist Miss Okoro. The reduction in the award under section 31(2) will stand.
64. Mr Hoskins submitted that the reduction in the award ought to be increased, pointing to the inconsistency between the reduction for failure to appeal (10 per cent) and the increase which had been imposed for failure to follow the SDDP (20 per cent). We have already commented on the Tribunal's 20 per cent increase. However, as regards Miss Okoro, the Tribunal made the reduction which the statute required. Any further reduction would have required a positive assessment by the Tribunal that it was just to reduce the award further. We do not think the Tribunal was bound in law to make any further reduction.

Conclusion

65. It follows that the appeal will be allowed in part.
66. The finding of unfair dismissal will stand, but on the basis that the dismissal was substantively unfair rather than automatically unfair. The reduction under section 31(2) will stand.
67. The award made by the Tribunal under section 31(3) will be set aside. There is no appeal against the method which the Tribunal adopted to calculate the award or against the Tribunal's assessment of loss; the Appeal Tribunal will therefore simply strip out the increase by using the Tribunal's figures. The Tribunal increased the award by £1,539.16 under section 31(3) – see paragraph 69 of its reasons. The total award will be reduced by this sum.