United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR ANDREW BLAKE (of Counsel) Instructed by: Helen Mason & Co Solicitors 17 Rangemore Hall Mews Rangemore DE13 9RE
For the Respondent	Written submissions


 


SUMMARY

UNFAIR DISMISSAL – Reasonableness of dismissal

Employment Tribunal had inadmissibly substituted its view for those of the employer in finding that dismissal for gross misconduct was outside the reasonable band of responses.

HIS HONOUR JUDGE SEROTA QC

1. This is an appeal by the Respondent from a decision of the Employment Tribunal at Liverpool, the Employment Judge being Mr Ryan who sat with lay members. The Judgment is dated 27 May 2009 and was sent to the parties on 21 July 2009. The Employment Tribunal upheld the Claimant's claim for unfair dismissal and a remedies hearing took place on 3 September 2009, the decision being sent to the parties on 7 September 2009, when after having regard to the Claimant's contribution to his dismissal and a Polkey deduction, he received a total award of £1,304.35.
2. The matter was referred to a full hearing by HHJ McMullen QC on 1 October 2009. At the Employment Tribunal the Claimant was represented by an Employment Consultant, Mr Rudi Capek. He has written to the Employment Tribunal saying because of the very low award in effect it was not worth his while to attend today's hearing and he would rely on his written submissions. He has lodged written submissions and we have obviously read and had regard to them.
3. Can we now turn to the factual background which we take from the two decisions of the Employment Tribunal? The Respondent trades as Showcase Cinemas and we assume owns and manages a number of cinemas including in particular a cinema in Liverpool where the Claimant was employed as a Supervisor and Projectionist from approximately 24 June 2002. We know that the Respondent operated CCTV which it used to record images of the public and employees, as its employees were well aware.
4. There was no specific up to date written policy of the Respondent in relation to the use of CCTV by members of staff. There were, however, written conditions of employment. We do not have, and the Employment Tribunal did not have, those that specifically applied at the time of the Claimant's misconduct, but it is apparently common ground that the later conditions which we have, which are dated 9 March 2009, were in similar form to those in existence. We would refer to paragraphs 17.1 and 17.2 at page 48 of our bundle:

"17.1 You shall not, except as authorised, use, divulge or communicate to any person, persons or Company (save with proper authority from the Company) any of the trade secrets, secret or confidential information, which includes, but is not limited to, financial information, operations or dealings concerning the affairs of the Company, or its suppliers, including, but without limitation, lists or details of the Company's suppliers (both current and those who were suppliers during the two years preceding the termination of your employment) or of companies to whom services are provided by the Company which may come to your knowledge during your employment. Any authority given by the Company to use, divulge or communicate such confidential information in a particular instance shall not constitute authority to divulge such information in any other instance.

17.2 You shall keep with complete secrecy all confidential information entrusted to you and shall not use or attempt to use any such information in any manner except as expressly authorised by the Company."

5. We also refer to the examples of misconduct and serious gross misconduct and pick out two of them at paragraph 50, where examples include and I quote: "Failing to observe strict confidentiality with regard to the affairs of the Company or its customers," and "Unauthorised use of computer software/hardware".
6. In February 2008 the Respondent became concerned at interruptions in the CCTV coverage in the manager's office and booth. It feared that this might be a precursor to theft so it installed, without notice to the employees, a further surveillance system in the office where the money was kept. For reasons which are not relevant, the Claimant became suspicious of the installation and on investigation discovered there was a concealed camera. He, in effect, rendered the surveillance useless.
7. The Claimant went through a disciplinary procedure and on 27 February 2008 was given a final written warning in respect of irresponsible behaviour and wilful misconduct endangering the health and safety of any employee which was likely to cause damage to the company's property and interests. There was no appeal against this decision.
8. Later in that year the Claimant had occasion to issue a grievance. He was concerned that some of his fellow employees were not pulling their weight and apparently was concerned that this might impact on him, and during the course of a grievance hearing the Claimant admitted that he had download images on the CCTV of a fellow employee, known as Michelle, who was apparently sitting outside idle when she was supposed to have been working, for a period of some one hour. During the course of the grievance hearing it became evident that what the Claimant admitted to have done would be regarded by the Respondent as a matter that would lead to disciplinary sanctions and the Claimant then stated that he would, if matters were taken further, deny having made such an admission.
9. It is right to say that consistently and throughout the disciplinary procedures and the procedures before the Employment Tribunal, the Claimant consistently denied that he had ever downloaded any images. The Employment Tribunal found that the Claimant's evidence to that effect at the hearing was unsatisfactory and unconvincing and found, as a fact, that he had downloaded images of Michelle. It went on to find that the reason that he had done this, although there was no evidence to that effect because he denied having downloaded any images at all, was to support his grievance and to defend himself against possible future allegations he was responsible for the booth's poor performance.
10. The Employment Tribunal also found that he retracted the admission that he has made because of the fear of future disciplinary action and there was no sinister motive in his downloading. I, again, point out that there was no evidence before the Tribunal that this was his motive although the Employment Tribunal seems to have inferred this matter from various facts.
11. At some point in time during the course of the disciplinary appeals the Claimant changed his case by abandoning his denial of having said that he had downloaded images of Michelle to saying:

"Well, I did say that but what I said at the time was a lie and I never, in fact, downloaded it although I said that I had."

As I have already mentioned, the Employment Tribunal found his evidence to be unsatisfactory and unconvincing.

12. The grievance procedure was being conducted by a Mr Jones, one of the Respondent's Operations Managers and he adjourned the hearing to make further inquiries. It is right to say that during the course of his inquiries, he did not investigate whether downloading would disrupt and interfere with CCTV surveillance by interrupting normal filming. He presumed, no doubt as an experienced Operations Manager, that this was the case and indeed there is no issue as found by the Employment Tribunal that whenever films were downloaded there would be such an interruption in CCTV surveillance. It is fair to say that from time to time he, that is the Claimant, would have to himself download images at the request of the police and when that occurred the CCTV surveillance was interrupted.
13. On 17 September 2008 the Claimant was suspended on full pay pending investigation into what was said to be gross misconduct. The gross misconduct was set out in a letter of 6 October 2008:

"Failure to adhere to Company procedures concerning strict confidentiality with regard to the affairs of the Company and its employees in relation to the cinemas CCTV recording equipment. Namely:

That during the meeting that took place on Monday 15^th September 2008 you stated that you had downloaded images of an employee from the Company's CCTV equipment onto a video cassette that you had supplied yourself. The downloading of the images was conducted without the authorisation or knowledge of the Company."

14. The Claimant was invited to a disciplinary hearing on this charge. The Employment Tribunal drew attention to the fact that the letter did not refer to dismissal as being a possible sanction or to the earlier written warning. The grievance was dismissed on 4 October 2008 as being considered to be without foundation and the disciplinary hearing was conducted by Mr Jones and commenced on 10 October 2008. As I have already mentioned, the Claimant denied any downloading; this was not accepted by Mr Jones and on 13 October 2008 a letter was sent to him which was received on 17 October 2008 summarily dismissing him. There is no reference in the letter as to the effect of the earlier final written warning.
15. There was a procedure in the Respondent company for not one but two appeals. The Claimant's first appeal was dismissed, as was a further appeal. The significance of this further appeal which was conducted by Ms Fox, the Company's General Manager (who is present today) – the Claimant was represented by Mr Capek. Mr Capek evidently assisted the Claimant to prepare a statement in which the Claimant admitted that he had lied in denying having said at the grievance hearing that he had downloaded images of Michelle, but he now asserted that what he had said was itself a lie and he sought to explain the reason that he had lied was because he did not know it was unlawful to copy and download a CCTV image and that it could be a disciplinary matter, that there was no specific policy relating to CCTV and he had no idea at all that downloading the image might be regarded as gross misconduct. However, there was no reference at all to the innocent explanation, if I can put it in that way, that the Employment Tribunal found to have been the case.
16. The Employment Tribunal described the Claimant's conduct in downloading the images as furtive. Further, it accepted that his actions led to a cessation of CCTV. The Employment Tribunal was satisfied he lied to the Respondent and his conduct was reprehensible. It went on, as we shall come shortly, to say that his initial lies were understandable but this was an immediate reaction and he had ample time to rectify the position and to come clean. We note that at a subsequent remedies hearing the Employment Tribunal reduced the Claimant's basic award by 50% by reason of his contribution to his dismissal and also the compensatory award by a similar amount, and there was also a 25% Polkey reduction. The Employment Tribunal was critical of the Claimant's evidence in relation to mitigation and found against him, hence the modest award which Mr Capek considered made it not worth his while to attend personally today.
17. The Employment Tribunal directed itself in relation to the issues and the law. There is no suggestion by Mr Blake that that self-direction was controversial in any way. The Employment Tribunal, as we have said, made various findings that the downloading was not sinister, although, as I have said, there was no evidence to support that finding. The Employment Tribunal, at paragraph 10 of the first hearing, was satisfied the Claimant downloaded images of his colleague Michelle at the back step of the cinema and he did so as evidence in support of his grievance and to defend himself should there be further allegations he was responsible for the booth's poor performance. He made the comment during the grievance hearing. He subsequently retracted the comment for fear of further disciplinary action, though we are satisfied he did not have any sinister motive in downloading the images.
18. The Employment Tribunal went on to say the Claimant did not use or divulge the downloaded CCTV images of Michelle, save in the context of the grievance hearing. The CCTV image did not contain any information that was confidential or potentially prejudicial to the business interests of the Respondent; the downloaded video image did not contain any intimate or private information in respect of Michelle. The images just showed that she was not working during normal business hours.
19. I also refer to the second paragraph 1 which is at pages 5 and 6:

"The Respondent's employees to an extent compromised their privacy by knowingly allowing themselves to be subjected to overt CCTV surveillance; they were also aware of the willingness of the Respondent to resort to covert filming to obtain evidence. For understandable personal reasons which were not sinister or contrary to the interests of the Respondent, the Claimant downloaded images from the Respondent's system onto a tape that provided him with evidence in support of his defence to allegations that he was responsible for poor performance. The video image of Michelle did not have the quality of confidential information. It showed her being inactive. Its content therefore did not comprise confidential company information or matters affecting or relating to legitimate business interests of the Respondent that were commercially sensitive. The image was not of an intimate or private nature such that Michelle's privacy was infringed; in fact it only showed what she was quite prepared for the company through its overt CCTV surveillance, and colleagues, to witness in any event, namely her inactivity at the rear of the building. The images were in effect no more confidential than a diary note or a photograph that could have been taken on the Claimant's mobile phone or an image that could have been sketched by him, or a situation told by him to a third party. The content of the image and the purpose for which it was downloaded were innocent and not private or confidential."

20. The Employment Tribunal, therefore, had found that the purposes of the downloading were, in a sense, innocent. The Employment Tribunal went on to find that the reason for dismissal was not the interference with CCTV surveillance and this aspect was not properly investigated, as there was no evidence before Mr Jones that this caused interference in coverage was also not put to the Claimant.
21. The Employment Tribunal at paragraph 2 on page 6 found that although the Respondent suggested during the course of the hearing the act of downloading would have interfered with CCTV coverage and, therefore, was potentially harmful to the security of the Respondent company, the Tribunal found that this was not the reason for the dismissal. In any event that aspect was not properly investigated by the Respondent. Mr Jones failed to check whether there had been any interference in coverage and breach of security. Any such breach was not established or known about and neither was it put to the Claimant, nor stating the suspension invitation or to meeting or dismissal or appeal letters.
22. The Employment Tribunal then continued.

"The reason given for the dismissal as amounting to misconduct was a fairly to adhere to a procedure and breach of confidentiality. There was in fact no procedure and no breach of confidentiality. Procedures, such as they were, were vague, not clearly made known to employees and did not contain any disciplinary offence that could have led to dismissal. The Respondent was concerned at the fact of the Claimant copying and retaining an image of the colleague, but did not adequately consider the quality or nature of that image as to whether it merited protection and the purpose or purposes to which the Claimant intended putting it, namely to safeguard his employment and defend himself what he considered to be unfair criticism in respect of his performance."

23. The Employment Tribunal concluded that the Respondent had a genuine belief that some misconduct had taken place, but it did not have a reasonable belief that the Claimant's actions amounted to misconduct as set out in the disciplinary charge in the absence of a clear and well-known procedure and the absence of a breach of confidence. The investigation was flawed and inadequate because it did not consider where the security cover was interrupted - we have already expressed our view in relation to that. In the circumstances the Employment Tribunal concluded that the dismissal was outwith the band of reasonable responses.
24. In this regard we have regard to what the Employment Tribunal set out at paragraphs 6 and 7:

"In the light of the above, dismissal did not fall within the band of reasonable responses of a reasonable employer. Dismissal was a disproportionate response to the Respondent's visceral feeling that there was something untoward in the Claimant downloading an image of a colleague. In context, that conduct did not amount to gross misconduct. It did not merit summary dismissal.

Whilst the Respondent's procedure, and in particular in the multiple involvement of Mr Jones in the procedure, could have been improved it was not so procedurally flawed as to necessarily lead to a finding of unfair dismissal in itself."

25. The Employment Tribunal noted that it was critical of the Claimant's conduct in having made an admission which he could have justified, he sought to retract it; he then confused issues. This called into question his credibility and the trust and confidence the Respondent had in him and caused the Respondent to question his motivation. The Claimant had the opportunity to explain his actions and avoid the additional suspicion that he in fact aroused.
26. Now, in the second judgment, that is the remedy judgment, the Employment Tribunal returned to the question of the Claimant's misconduct:

"We considered the Claimant's conduct before dismissal in accordance with Section 122 of the Employment Rights Act 1996. We have made a finding of fact that the Claimant copied, or downloaded a copy, from the CCTV and we believe he did so furtively knowing that his conduct was not wholly beyond reproach; that in doing so he will have stopped the CCTV for some length of time, (although we do not know how long, but it was still a cessation of the surveillance coverage which in itself was reproachable conduct) and we have found that during the course of the proceedings, the grievance and disciplinary proceedings, he lied in saying he made a copy and then denying it. That conduct before dismissal is reprehensible. His initial reaction in trying to cover his tracks when he realised he had said what he said at the grievance and that it may lead to disciplinary action, is possibly understandable as an immediate reaction, however, he had ample time to rectify that situation, explain exactly what he had done and why. It is possible that had he done so there may have been a different outcome; his conduct was perhaps understandable in trying to protect himself as he was under pressure about performance. If he had evidence that it was not his poor performance that was causing a problem then perhaps the Company would have been a bit more understanding if he had shown the CCTV film and admitted copying it."

27. The Employment Tribunal at paragraph 2.2 made the finding to which we have already referred to, that the Claimant's actions did lead to a disruption of CCTV coverage, and this was to an extent reprehensible, but in the view of the Employment Tribunal did not amount to gross misconduct. They said they did not know the extent of it and neither did the Respondent. It criticised the Respondent for making inadequate inquiries with the length of time of that disruption, if in fact there was actual disruption or material disruption. Had they found that out it is likely that they would have been at risk of dismissal. Again, it appears that this is not something that was in fact of capable of being determined.
28. Now, we turn to the Notice of Appeal and submissions. We have been invited to have regard to what have become the well-known words of Mummery LJ in the case of London Ambulance National Health Service Trust v Small [2009] IRLR 563. Mummery LJ was considering submissions that the Employment Tribunal in that case had substituted its views for the views of the Respondent employer rather than ask itself whether the views and actions of the Respondent employer were within the band of reasonable responses. Mummery LJ had this to say at paragraph 43:

"It is all too easy, even for an experienced Employment Tribunal, to slip into the substitution mindset. In conduct cases the Claimant often comes to the ET with more evidence and with an understandable determination to clear his name and prove to the ET that he is innocent of the charges made against him by his employer. He's lost his job in circumstances that they make it difficult for him to get another job. He may well gain the sympathy of the ET so that it is carried along the acquittal route and away from the real question, whether the employer acted fairly and reasonably in all the circumstances of the dismissal."

29. Now, I should point out that there is no issue in relation to the reasonable responses test. This is a matter of self-direction by the Employment Tribunal on more than one occasion and it is uncontroversial. The Employment Tribunal specifically referred to the cases of British Homes Stores v Burchell [1980] ICR 303 and Jones v Iceland Frozen Food [1983] ICR 17 to the extent that the range of reasonable responses applies throughout the investigatory disciplinary process and the decision to dismiss.
30. The Employment Tribunal, as we have noted earlier, at paragraph 7, considered that although it was to some extent critical of the procedures which could have been improved did not consider that the disciplinary and appeal procedures were so procedurally flawed as to necessarily lead to a finding of unfair dismissal in itself. The principal point made, therefore, by Mr Blake on behalf of the Respondent is that this is a case in which the Employment Tribunal substituted its views for those of the Respondent rather than asking itself whether the Respondent's actions and decisions were within the range of reasonable responses.
31. There was a further argument, under Section 98A(2) of the Act, that would have enabled the Respondent to argue that if it could be shown that, despite the procedural failings that on a balance of probabilities, the decision to dismiss would have been taken, the dismissal would not be regarded as unfair. This point was abandoned and has not been argued before us. It does seem to us, and we say nothing more about it, that any arguments as to procedural impropriety might well have fallen away had Mr Blake sought to pursue his argument under Section 98A(2). They would have become irrelevant if the substantive facts would have justified a decision to dismiss in any event. However, we need not go into that matter.
32. The other side of the argument raised by Mr Blake as to substitution is that the decision of the Employment Tribunal was perverse. It seems to us that if he is right on his first point he does not need to argue perversity, and if he is wrong on his first point the issue of perversity does not arise.
33. Mr Blake submits that the decision to dismiss was manifestly within the range of reasonable responses. It was reasonable for the Respondent to conclude that although there was no express procedure employees should have known, as a matter of commonsense, that downloading images of their colleagues on CCTV without authority was an act of serious misconduct. He points to the fact that Mr Thomson was himself aware that misuse of CCTV was a serious matter because he himself had been disciplined for misuse of the CCTV earlier that year. His conduct was aggravated by removal of the CCTV images from the premises and retention; there was a persistent and continued dishonest denial of what he had done; he said the Employment Tribunal failed to have regard to the final written warning and, albeit it was not specifically referred to in the disciplinary charge, the fact that the downloading led to an interruption of CCTV coverage was a matter highly relevant and clearly was part and parcel of the reason that the Respondent took the view that the Claimant's actions amounted to gross misconduct.
34. He made the point, which we have already referred to, that further investigations in relation to the interruption would have led to nothing other than what was accepted to be the case, that there had been an interruption of CCTV coverage. Furthermore, the Employment Tribunal was wrong to exclude the Respondent's view that there in effect been a breach of confidence and breach of privacy and had taken a legalistic view. The issue was whether the Respondent could reasonably have regarded the Claimant's conduct as being a breach of confidence and a breach of privacy.
35. Further, the findings made by the Employment Tribunal, which played a significant part in its decision that the Claimant had, what we might describe, as an "innocent" explanation for his downloading was, of course, never ever raised by the Claimant, either during the disciplinary process, the appeal process or the Employment Tribunal and he had lied as to whether or not he had downloaded the images. It, therefore, it was submitted, could not have been outside the range of reasonable responses for the Claimant not to take that motive into account.
36. The response of Mr Capek really seeks to uphold the decision of the Employment Tribunal stating that it followed the Iceland test; it found there had been no proper procedure and no breach of confidentiality; the Employment Tribunal was well aware of the previous written warning but this related to health and safety rather than matters of confidentiality or privacy; it was justified in finding there had been no breach of confidence.
37. He drew attention to the finding of the Employment Tribunal that the reason for the dismissal was the visceral feeling, there was something untoward in the Claimant downloading an image of a colleague. In context that conduct did not amount to gross misconduct; it did not merit summary dismissal. It is said that that passage is in itself clear evidence of the substitution mindset of which the Respondent complains, but the Claimant says that that amounts to a finding which can be justified that the Respondent acted outside the range of reasonable responses. There is a further application for wasted costs on the part of Mr Capek; he maintains it was unreasonable of the Respondent to pursue this appeal.
38. Mr Blake in his submission today amplified his earlier submissions in the Notice of Appeal by drawing attention to Mr Jones' evidence before the Employment Tribunal that the downloading of the images was sufficient in itself to justify summary dismissal and because the Claimant was already subject to a final written warning he had no alternative. In any event the existence of the final written warning had to be relevant as to whether the decision to dismiss was within the reasonable band of responses.
39. Mr Blake again drew our attention to paragraph 10 and paragraph 11 at page 3 of the decision as showing the substitution mindset of the Employment Tribunal and I would note that paragraph 1 on page 6 is similar where again the Employment Tribunal appears to have taken its view of the reasons as to why the Claimant downloaded Michelle's images - something never put to the Respondent - and as to whether it did in fact amount to confidential information. The Employment Tribunal did not ask itself the question as to whether or not the Respondent was entitled to regard the information contained on the CCTV as confidential and to regard its unauthorised downloading as gross misconduct.
40. The Employment Tribunal had ignored the fact the Claimant had lied to the Respondent which, therefore, never had the so-called innocent motives of the Claimant before it. He submitted there was no need to spell out every example of what amounted to gross misconduct. The Employment Tribunal had accepted the Claimant had acted furtively and it must be clear to anyone that the downloading of images is wrong. Again, it can fairly be said that the Claimant itself must have been aware of it because of his own reaction to having made the admission at the grievance, he immediately appreciated that this was likely to be regarded seriously by his employers.
41. The correct approach to the question of confidentiality and breach of privacy was not a legalistic one but whether the Respondent was entitled to take a commonsense approach to regarding the information as being confidential and its misuse a potential breach of privacy. The question that the Employment Tribunal should have asked itself was whether the Respondent's categorisation of that evidence was within the range of reasonable responses or not. Further evidence of the substitution mindset was to regard the information that was stored on the CCTV as being similar to a diary entry on a mobile phone photograph.
42. The Employment Tribunal, in summary, had failed to take account of whether the Respondent's category of the conduct and downloading the image without authorisation as gross misconduct was outside the bands of reasonable responses. The Employment Tribunal was wrong to find that the Respondent should have had regard to the Claimant's motives when the Claimant gave no such evidence, and in fact lied as to whether he had downloaded the images at all; it was wrong to place weight on the absence of an express policy in relation to CCTV, especially as the misconduct was obvious and the Claimant had previously misconducted himself in relation to CCTV; and it was wrong for the Employment Tribunal to ignore the effect of the final written warning.
43. We find that the submissions made by Mr Blake are in fact correct and that this is one of those cases in which an Employment Tribunal has, for whatever reason, as said by Mummery LJ, had a substitution mindset. It has substituted its views for those of the employer. Had it asked itself whether or not the Respondent's actions, both in relation to the disciplinary and appeal process, and the decision to dismiss were within the range of reasonable responses having regard to the matters we have set out, we conclude that the Employment Tribunal would have answered that question in the affirmative.
44. In those circumstances it seems to us that this appeal must be allowed. There is no basis upon which we can see that it should be remitted to the Employment Tribunal and the appeal is, therefore, allowed and we substitute a decision that the dismissal of the Claimant was not unfair. It only remains for us to express our gratitude to Mr Blake for his oral and written submissions and Mr Capek for his written submissions which, as we say, we have paid close regard to.