United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR JAMES PALMER (of Counsel) Instructed by: Messrs Symes Robinson & Lee Solicitors Manor Office North Street Crediton Devon EX17 2BR
For the Respondent	MR MICHAEL HAYMAN (Solicitor) Messrs Bynes Solicitors 186 Union Street Torquay Devon TQ2 5QP


 


SUMMARY

UNFAIR DISMISSAL

Reason for dismissal including substantial other reason / Reasonableness of dismissal

The Tribunal's reasoning in respect of the Air Navigation Order issue did not make requisite findings and in particular did not consider adequately whether the employer's stated reasons was or were not reasonable. The Tribunal's findings in respect of reason for dismissal unclear and unsatisfactory.


 


HIS HONOUR JUDGE RICHARDSON

1. This is an appeal by the Exeter Flying Club Limited ("the Club") against a judgment of the Employment Tribunal (Employment Judge Richardson presiding) dated 22 April 2008. The Tribunal upheld a claim of unfair dismissal by Mr Paul Little, who had been the Club's chief flying instructor.
2. At the outset we should say a word about the scope of this appeal. In this case the Club's initial notice of appeal gave no details of any legal ground at all. The Appeal Tribunal ordered that the Club should give further and better particulars of its grounds. When it did so, many of the grounds were ruled to disclose no reasonable ground for appealing. But some grounds were allowed through to today's full hearing. They relate principally to the way the Tribunal dealt with an allegation that Mr Little had flown a Club aeroplane on a commercial flight which was in breach of the Air Navigation Order.

The background facts

3. Mr Little had been employed by the Club since the year 2000. In June 2006 he became the chief flying instructor. He was employed at a modest salary. The Tribunal noted that, like other kinds of club professional, he sought to supplement his income through other activities. The Tribunal noted that he had a list of responsibilities, but the list did not say what he could do on his own behalf. The list did, however, contain a provision that he should exercise authority over all persons flying in Club operated aircraft to ensure the legality and safety of their flights.
4. In July 2007 Mr Heald became the chairman of the Club. Mr Heald was the son of the previous chief flying instructor who, the Tribunal said, "apparently fell out" with Mr Little. The Tribunal found that there was an "uneasy relationship" between Mr Little and Mr Heald.
5. At first the allegation against Mr Little was that he had misappropriated and sold a number of items belonging to the Club. The Tribunal found that a member of the Club had seen items for sale by Mr Little on eBay, and had made an anonymous allegation. On 21 July 2007 Mr Little was suspended pending an investigation into this allegation.
6. After Mr Little's suspension a further allegation against him arose out of material found on the Club's computer. He was interviewed about both matters on 24 July 2007. The allegations were put in a letter dated 3 August 2007 as follows:

"It is alleged that you have misappropriated and sold a number of items belonging to the Exeter Flying Club using your eBay account for personal gain. These items comprise one life raft, two emergency locator beacons and aircraft intercom systems. It is alleged that you were not authorised to do so, and that you did so without the knowledge or sanction of the Exeter Flying Club Management Committee.

It is alleged that you have used EFC aircraft to engage in public transport flights in breach of the Air Navigation Order as EFC does not possess an Air Operators Certificate, and have thus operated illegally with potentially far reaching consequences for the EFC"

7. On 9 August 2007 a hearing took place before Mr Malpass. Mr Malpass had no experience of disciplinary procedures. Following the hearing Mr Little said that he would attempt to obtain more information in his defence, particularly in relation to items of equipment which were alleged to have been stolen, but which he alleged were his. Mr Malpass acknowledged this in his letter dated 15 August. Mr Malpass himself made some further investigations.
8. It was known to the Club, including in particular Mr Malpass, that Mr Little was marrying and going on honeymoon on 11 August. Mr Malpass in his letter dated 15 August said he would be pleased to receive further information from Mr Little on his return from honeymoon. But, when he had only just returned from honeymoon, on 27 August Mr Malpass wrote a letter dismissing him for gross misconduct on the basis of both allegations.
9. Since this appeal is focussed upon the air navigation order issue, it is important to set out what Mr Malpass said in this letter:

"5. You are suitably qualified by being an ATPL holder, CPL holder, CAA flight test examiner, CAA written test examiner, and Chief Flying Instructor of the EFC to be well aware of the rules relating to Public Transport Flying.

6. You have confirmed during the disciplinary hearing that you are aware that the EFC does not possess an Air Operators Certificate (AOC); you also confirmed that you are aware of the need to possess an AOC in order to undertake Public Transport flights.

7. You have confirmed during the disciplinary hearing that you had personally undertaken, as Pilot in Command, a flight in an EFC aircraft (Cessna 172 G-BOJR) with a professional photographer in order to photograph various development sites around Torbay Hospital.

8. You have confirmed during the disciplinary hearing that you received payment in the amount of £575 for this flight including the photographs.

9. You have confirmed during the disciplinary hearing that you are aware that items 7 and 8 above made the flight a Public Transport Flight as defined in the Air Navigation Order, and that it was therefore illegal.

10. The penalties for undertaking a Public Transport Flight in contravention of the Air Navigation Order carry a substantial fine and the potential of up to two years imprisonment upon conviction.

11. As this flight was in contravention of the Air Navigation Order the EFC aircraft insurance would have been invalid during that flight, you were therefore operating the aircraft without valid insurance with potentially disastrous consequences."

10. Mr Little appealed against this decision. He consulted solicitors who wrote in some detail to the Club. An appeal was due to be heard on 11 September. However on 9 September Mr Heald sent a letter to the Club which was, the Tribunal found, written "most unwisely", giving the impression to Mr Little that attendance at an appeal hearing was pointless. He did not attend. The dismissal was upheld.

The Tribunal's reasons

11. The Tribunal's reasons, after an introduction, have sections entitled "misappropriation of property", "breach of air navigation order", "the investigation", "the disciplinary procedure", and "the appeal process". There is then an unheaded passage, from paragraphs 45 to 51, which sets out the written submissions of the parties and some conclusions of the Tribunal. Other conclusions reached by the Tribunal are set out in the different sections of its reasons.
12. On the question of misappropriation of property, the Tribunal noted that the items allegedly misappropriated consisted of a life raft, which Mr Little accepted to be the property of the Club, and a number of other items, which he said he bought and sold himself and never belonged to the Club.
13. As regards the life raft, it was Mr Little's case that it had passed its "use by" date and that he had been authorised to sell it by the Club, but in such a manner that it should not be seen to be sold by the Club because it had passed its "use by" date. The Tribunal noted support for this from three members of the Club. In particular, the Tribunal themselves preferred the evidence of two Club members to that of Mr Heald. The Tribunal said:

"18. On this point, we do not believe an employer, with an open mind conducting an investigation could reasonably conclude that the instruction on the disposal of the raft was clear. There were plainly differences of views, and these views were coloured by the different perspectives the witnesses had of the claimant."

14. As regards the other items of equipment, the Tribunal found that the Club had no evidence at all to support the proposition that these had ever been the Club's property. It said that a reasonable investigation would have sought to establish the ownership of these items, and said that this failure was compounded by the subsequent disciplinary procedure.
15. As regards breach of the Air Navigation Order, which is the point central to this appeal, we set out the Tribunal's findings in paragraphs 22 to 28 of its reasons:

"22. The particular complaint is that the claimant used an airplane for commercial purposes and the respondent did not hold an appropriate air operators certificate for such use. The respondent reported these alleged breaches to the Civil Aviation Authority in September 2007 and as at the date of the hearing no decision had been made by the CAA.

23. The claimant denies there was any such commercial usage. However he admits he takes aerial photographs and sells them.

24. The particular flight in question was to take place in May 2005. Looking at the papers including documents from the South Devon Healthcare Trust, the claimant was to provide good aerial photographs of their sites and buildings. Some of the passengers were trust employees who were either friends of the claimant or were a friend of one of the passengers. To us the flight has the appearance of a mix of business and pleasure.

25. On this point the claimant's evidence is a disingenuous. He told us the photographs did not require a flight because he already held them on his computer from previous flights. Yet the invoice (page 77) shows there was a fee for the flight to take photographs.

26. We believe Mr Heald was right to be concerned about what was taking place. There might be breaches of the operator's certificate and potential insurance risks had there been an accident.

27. On the other hand, they only came to learn of this flight while the claimant was suspended and they had gained access to his computer. Our view is that in isolation no employer acting reasonably, having investigated the matter properly, would have dismissed an employee for this matter alone.

28. Our view is that the respondent and Claimant needed to be clear as to the parameters of the claimant's activities; for example from whom he obtained consent or authority for such a flight, how he accounted for the use of the respondent's aircraft and so on. At best we find these activities themselves might have merited a warning and a clear statement as to the parameters but we shall consider later whether cumulatively they amounted to a sufficient reason to dismiss the claimant."

16. As regards the investigation, the Tribunal noted that answers given by Mr Little "which were in places vague" raised points for further investigation which did not take place. The Tribunal referred to the issues as ownership of property and disposal of the life raft, with which it had already dealt. The Tribunal said:

"What is clear is that the investigation, disciplinary and appeal procedure were organised if not carefully managed by Mr Heald and that led to some of the problems that subsequently arose."

17. As regards the disciplinary procedure, the Tribunal found that the procedure was not fair. It said that:

"31. A reasonable employer conducting a fair disciplinary hearing would have waited especially when he was fully aware the claimant was going to be away. These were serious allegations with some fundamental issues to be resolved such as ownership of the property. Furthermore, the evidence of the Houghs, with a later e-mail from Mr Stuart suggested there was real confusion over the instructions on the disposal of the raft"

18. In its conclusions the Tribunal gave itself an impeccable self-direction as to the requirements of section 98(4) of the Employment Rights Act 1996. It then continued as follows:

"47. The reason for dismissal is conduct which is a potentially fair reason within the meaning of s.98 of the Employment Rights Act 1996.

48. Was it a genuine reason? On balance we find it was not. There was a rush to judgment. We accept Mr Heald was both keen to tighten up business practice but also had little regard for the claimant.

49. There was considerable doubt over ownership of the beacons and intercoms and no supporting paperwork from the respondent on ownership. There was dispute over what had been said at the committee meeting on the life raft. Even on the balance of probabilities, had there been a thorough investigation there must have been some doubt in the mind of a reasonable employer. The issue on the air navigation certificate we do not believe would have caused the reaction it did given the claimant's good record with the respondent, had there not been that rush to judgment. Therefore this last matter, even taken together with the other matters relating to the property would not justify, in our view, dismissal.

50. Was there a proper investigation? In our view there was not. For example Mr Stuart should have been pressed even by e-mail for clarification of his understanding on the disposal of the life raft, the claimant should have been given time to produce the evidence he said he would try to find. The conduct of the disciplinary hearing was, in our view, beyond Mr Malpas's capability."

19. The Tribunal went on to make it clear that the question of contributory fault was yet to be determined, and set out its preliminary views on that issue. One reason for its preliminary conclusion that there would be a finding of contributory fault related to the air navigation order issue. It said that Mr Little's documentation around the flight was confusing and he should have let the committee know what he was doing.

The appeal

20. On behalf of the Club, Mr Palmer makes the following submissions in his skeleton argument and in his oral argument before us.
21. He submits that the breach of the Air Navigation Order was amply evidenced before the Tribunal and that the Tribunal itself made findings which are only consistent with the proposition that there was a breach of the Air Navigation Order. He refers to the Tribunal's conclusion that the flight had the appearance of a mixture of business and pleasure, to its finding that Mr Heald was right to be concerned about what was taking place and to the fact that there might be breaches of the operator's certificate and potential insurance risks had there been an accident. He submits that it was in any event an inexorable finding from the established facts that there had been a breach of the Air Navigation Order. It is a known fact that Mr Little accepted £575 for a flight.
22. He submits that the Tribunal's criticism of the disciplinary procedure relates only to the allegations of misappropriation of property. There was no suggestion that any further time was required for Mr Little to produce further information concerning the breach of the Air Navigation Order.
23. Building on these submissions, he refers to and relies on the test in British Home Stores v Burchell [1978] IRLR 379. He submits that the material before them clearly demonstrated that Mr Little had carried out the flight, that there were reasonable grounds for that belief and that so far as the breach of the Air Navigation Order was concerned a reasonable investigation had been carried out.
24. Therefore, he submits that had the Tribunal approached this matter alone, considering it in isolation and without the allegations of misappropriation of property, it could not have reached the conclusion that an employer was not entitled to dismiss an employee who was ultimately responsible for effective regulatory compliance in circumstances where he acted in contravention of those regulations. He points out in particular that there was information before the Tribunal that breach of those regulatory requirements carried criminal sanctions, including imprisonment, might have catastrophic consequences for the Club in the event of an accident, and would invalidate insurance cover. He criticises the reasoning of the Tribunal in paragraphs 22-28 of its Reasons and again in paragraph 49. He argues that the Appeal Tribunal should substitute a finding that the dismissal was fair.
25. On behalf of Mr Little, Mr Hayman submits that the appeal is essentially an appeal on grounds of perversity. He refers to and relies on Yeboah v Crofton [2002] IRLR 634. He submits that there was ample material on which the Tribunal could reach the conclusion it did and that the high test for perversity is not met.
26. He has taken us through the findings of the Tribunal, and submits there is support in those findings for the Tribunal's conclusion that the reason for dismissal was not genuine. He submits that the phrase "rush to judgment" suggests that there was collusion on the part of Mr Malpass and Mr Heald. He submits that the Tribunal did not find that the flight in question was in breach of the Air Navigation Order. He points out that the CAA has decided not to prosecute over the matter.

The law

27. The legal provisions central to the Tribunal's consideration were the following:

"Employment Rights Act 1996, s98

98 General

(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show—

(a) the reason (or, if more than one, the principal reason) for the dismissal, and

(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.

(2) A reason falls within this subsection if it—

(b) relates to the conduct of the employee.

(4) [In any other case where] the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)—

(a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

(b) shall he determined in accordance with equity and the substantial merits of the case."

Our conclusions

28. The Tribunal's task was, essentially, as follows. Firstly, it had to decide whether the employer had shown what the principal reason was for Mr Little's dismissal. Secondly, it had to decide whether that principal reason fell within section 98(2). Thirdly, it had to decide whether the Club acted reasonably or unreasonably in treating its principal reason as a sufficient reason for dismissing Mr Little. Where the allegations are allegations of misconduct by the employee the following questions are generally relevant to this last issue: whether the employer genuinely believed in the allegation of misconduct for which it dismissed; whether there were reasonable grounds for that belief; whether the employer had carried out as much investigation as was reasonable in all the circumstances of the case; and whether dismissal was a reasonable sanction to impose. In determining whether an employer was reasonable in these respects, a Tribunal must always keep in mind that there may be a range of reasonable responses open to an employer, so the question whether an employer has been reasonable will depend on whether he is within or outside that range of responses.
29. Where, as here, there were two charges, the Tribunal may need to consider the position in relation to each charge. If the charges were cumulative, in the sense that all of them together formed the principal reason for dismissal, it would be fatal to the fairness of the dismissal if any significant charge were found to have been taken into account without reasonable grounds: see Smith v City of Glasgow DC (1987) IRLR 326. If, however, the charges were true alternatives, for example independent instances of gross misconduct such that the employer would have dismissed for either of them without the other, then they will require separate consideration in determining whether it was reasonable to dismiss.
30. In respect of the Air Navigation Order issue, the Tribunal did not approach the questions which it had to determine in the order we have set out, and in some respects it is difficult to be sure what the Tribunal found and why.
31. It is convenient to begin with paragraphs 22-28 of the reasons, which is the main place in the Tribunal's reasons where it made findings concerning the Air Navigation Order issue.
32. We have seen that the questions for the Tribunal to address included whether the Club genuinely believed that there had been a breach of the Air Navigation Order and if so whether the Club did so on reasonable grounds. The Club had, it will be remembered, set out detailed reasons in the letter dated 27 August.
33. The Tribunal does not express any clear conclusion on these points. We think that the Tribunal may well have accepted that the Club reasonably held this belief. Nothing in paragraphs 23-26 of the reasons, which dealt with this issue, suggests the contrary. There is no criticism of the assertions in the letter of dismissal, which we have quoted. The letter of dismissal stated that Mr Little's defence was that he was undertaking the flight in his own time, albeit in the Club's aircraft. It is not easy to see why this would have been a defence. The Tribunal described his evidence as "disingenuous".
34. We turn next to the question whether there had been reasonable investigation of the question of breach of the Air Navigation Order. There is no criticism in the Tribunal's reasons which is specific to this issue. All the criticism relates to the misappropriation issue. There are in our bundle documents supporting the fact that the flight was taken and that payment was made for it. Questions were asked concerning the issue at the investigation stage and at the disciplinary hearing.
35. Finally, we turn to the Tribunal's conclusion that in isolation no employer acting reasonably, having investigated the matter properly, would have dismissed an employee for this matter alone.
36. Here we refer again to the fact that the Tribunal expressed no conclusion as to whether the beliefs set out in the letter dated 27 August were reasonably held. If they were reasonably held, then it is against those beliefs that the Tribunal must judge the question whether dismissal was a reasonable sanction.
37. In the letter the Club expressed the belief that Mr Little was aware that the flight was in contravention of the Air Navigation Order, that this was a criminal offence carrying a substantial fine or even imprisonment, and that Mr Little was on that flight operating without valid insurance and with potentially disastrous consequences. It will be recalled that on the Tribunal's findings Mr Little was the chief flying instructor of the Club, responsible for ensuring that all flights in Club aircraft were legal.
38. We think that the Tribunal, when concluding that no employer acting reasonably could dismiss for breach of the Air Navigation Order must have lost sight of its duty to review the reasons which the Club actually gave. That it did so is, we think, clear from paragraph 28 of the Tribunal's reasons. The Tribunal expressed the view that there needed to be clear parameters as to the activities of Mr Little – for example from whom he obtained consent for the flight. But this does not begin to address the reason which the Club gave for dismissal. The Club concluded that Mr Little knew he was operating in contravention of the Air Navigation Order. If so, it is difficult to see why it mattered whether or not there were clear parameters. Mr Little had no business conducting a flight in the Club's aircraft which he knew to be illegal.
39. That part of the Tribunal's reasoning which concerns the Air Navigation Order breach is to our mind flawed and inadequate.
40. There remain for consideration, however, the Tribunal's findings later in the judgment about the reason for dismissal.
41. Logically the first question for the Tribunal to decide was whether the Club had shown what the principal reason was for Mr Little's dismissal. Here there is an immediate problem with the Tribunal's reasons. Paragraph 47 states that the reason for dismissal was conduct. Paragraph 48 states that the Tribunal found on balance that it was not a genuine reason. There is an obvious problem with the reasoning at this point. If paragraph 48 is correct, then the Club did not establish what the principal reason was for Mr Little's dismissal.
42. This difficulty is acute when it comes to the issue of the breach of the Air Navigation Order. Paragraph 48 only gives the briefest of elaboration on the finding that the reason given was not genuine. The reason given is that there was a "rush to judgment". But saying that judgment was rushed is a very different thing from saying that it was not genuine. Moreover the Tribunal's view that there was a "rush to judgment" appears to apply to the misappropriation issue rather than the Air Navigation Order issue.
43. Moreover, as regards the Air Navigation Order, detailed reasons for finding that there was a breach, and that the breach was serious, were set out in the letter of dismissal, which we have quoted. The Tribunal's reasons earlier found that the Club's concerns on this issue were justified. If this is so, we would expect to find some careful reasons given by the Tribunal for the conclusion that the Club was not genuine in giving this reason for dismissal. There are none.
44. Finally, we observe that it would appear from the Tribunal's findings that the decision to dismiss, at least ostensibly, was taken by Mr Malpass. There is a finding that Mr Malpass was not competent to deal with a disciplinary hearing; and a suggestion that the letter of dismissal was written for him by Mr Heald; but no finding that his evidence about the reasons for dismissal was not honest.
45. There was certainly material on which the Tribunal could have concluded that neither reason for dismissal was genuine. The Tribunal might have found that Mr Malpass did not take the decision to dismiss, or that if he did he did not believe in the reasons set out in the letter dated 27 August and did not take the decision for those reasons, but rather because he was pressured into it by Mr Heald, who took the decision for his own reasons. This, or something close to it, was Mr Little's case at the Tribunal. The difficulty is that if the Tribunal did reason in this way it has not set it out in its reasons; and in view of the conclusions which it did reach concerning the genuineness of the Club's belief in the breach of the Air Navigation Order, some reasoning on this point was essential. Whether Mr Heald had little regard for Mr Little does not of itself answer the question whether the Club was genuine in its reasons for dismissing him.
46. For these reasons we conclude that the Tribunal has not dealt adequately or properly with that part of the case which dealt with breach of the Air Navigation Order. The appeal must be allowed.
47. This is not a case where the Appeal Tribunal can substitute its own finding as to unfair dismissal. The Appeal Tribunal deals only with questions of law. It can only substitute its own answer for that of the Tribunal if on a true appreciation of the law the answer is plain from the findings the Tribunal has made. This is not such a case. It will be for the Tribunal to address the various issues which arise and which we have identified earlier in this judgment.
48. We think the issue whether there was an unfair dismissal must be remitted for re-hearing. In this case we think it must be before a fresh Tribunal. All the issues will be for consideration by that Tribunal – including, for the avoidance of doubt, whether the reasons given by the Club were genuine or not.
49. It would, we think, be very difficult for a Tribunal which has expressed the view in paragraph 48 to hear the matter untrammelled by that finding, which we do not think rests on any sufficiently clear reasoning. The hearing will therefore be before a fresh Tribunal.
50. We think the Tribunal would have identified more clearly the process of reasoning which it needed to follow, and given its reasons more clearly, if it had adopted a pattern for its decision which followed the order set out in rule 30(6) of the Employment Tribunal Rules 2004. In particular, we think it would then have seen the need for a clear and reasoned finding of fact as to whether Mr Malpass took the decision to dismiss and genuinely did so for the reasons set out in the letter dated 27 August. Such a finding would have underpinned its overall reasoning.