THE HONOURABLE LADY SMITH
Introduction
1.
The Respondent used to be Mr and Mrs Boyle’s business. He and his
wife previously owned all its shares. They sold them to William Tracey Limited
(for £2.7m), on 1 January 2008, under a contract which included a service
agreement whereby Mr Boyle was to be Operations Director of the Respondent
and, provided certain profit levels were attained in each of three ensuing
years, further payments totalling £600,000 were to be made. The agreement also
provided that if Mr Boyle was unfairly dismissed during that “earn out”
period, the entire £600,000 would become immediately due and payable. Mr Boyle
took up the role of Operations Director as from 1 January 2008. His wife also carried on working for the Respondent, in an administrative role.
2.
William Tracey Ltd is a substantial business and is part of the William
Tracey Group, an organisation with substantial administrative resources to
which the Respondent has access (see: Tribunal’s judgment paragraph 3). 50%
of the shares in William Tracey Ltd are owned by Michael Tracey. After the
sale of the business, Michael Tracey became Chairman of the Respondent and
Graeme McDonald was appointed Managing Director.
3.
Mr Boyle was dismissed during the “earn out” period, on 18 November 2008. He presented a complaint to the Employment Tribunal, claiming that
he had been unfairly dismissed and wrongfully dismissed, in breach of
contract. A hearing took place before the Employment Tribunal sitting in
Glasgow (Employment Judge Mr R Williamson) during four days in May and six
days in August, 2009 and by judgment registered on 7 October 2009, the Tribunal
found:
“The unanimous judgment of the Tribunal is that the claimant was
unfairly dismissed and wrongfully dismissed by the respondent and the
respondent is ordered to pay the claimant a monetary award of £19,560.”
4.
Written reasons were issued on 27 January 2010.
5.
We will, for convenience, continue to refer to parties as Claimant and Respondent.
6.
The Claimant was represented by Mr Thomson, solicitor, before the Tribunal
and by Mr Napier QC, before us. The Respondent was represented by
Mr D Walker, solicitor, before the Tribunal and before us.
Background
7.
The Respondent’s business involved the provision of a range of
industrial services including the unblocking and inspection of underground
pipes. They operated principally out of a site at Carntyne in Glasgow, where there were some 45 employees. They also had a small base in Bradford where three employees worked. Those employees were Stewart Bellwood (a plant
operator), Gerald McKeown (who worked with Mr Bellwood and carried out
plant and vehicle repairs), and Paul Moffatt (the manager). The Bradford operation carried out work for one client only, Yorkshire Water. Due to a change
in their contract tendering processes in April 2008, the Respondent’s Bradford operation suffered a material reduction in turnover.
8.
Michael Tracey was not actively involved in running the Respondent and
was rarely at its premises. Mr McDonald, equally, was rarely at the
premises. The Claimant continued to work very much as he had done before.
Indeed, he was assured about that in an email from Mr McDonald dated 13 August 2008:
“I would stress again that your role as Operations Director
reporting to myself remains unchanged. You remain in overall control of the
operational activities of IMP…..”
9.
However, Mr McDonald in fact intended that a new employee,
Mr Bache, who had been appointed as Area Industrial Services Manager for
the North of England, would have an operational role in respect of the Bradford operation, reporting directly to him. He did not advise the Claimant about that,
though.
10.
The Claimant regarded Mr Bache as an expensive unproductive
overhead, a view which he made clear. The Claimant was concerned that his
ability to achieve the requisite “earn out” profits was being adversely
affected. The Respondent’s results for September 2008 showed a decline in
profitability and Mr Tracey asked the Claimant, in a telephone
conversation on 10 October 2008, to set out what he would have
done if he had still been owner of the business.
11.
Two things of significance occurred shortly after that. On
16 October, Mr Moffat emailed the workshop at Carntyne regarding a
machine (known as a “Muller”) which required repairs, one of which could not be
carried out in Bradford. A few days later, Mr Bellwood telephoned the Claimant
and told him he was resigning at the end of that week, to take up employment
with a competitor. Mr Bellwood indicated that Mr McKeown would also
be leaving. The Claimant assumed that he would be going with Mr Bellwood
to the same employer, as a two man team.
12.
In the light of this news, the Claimant wanted to speak to both
Mr Bellwood and Mr McKeown and he asked them to drive the Muller up
to Carntyne, on 23 October, which they did. In the meantime,
Mr Bellwood faxed his resignation letter to the Claimant, on
21 October.
13.
On 22 October, the Claimant had his wife type up his proposals for
the business, following on Mr Tracey’s invitation for him to do so. They
included a proposal that the Bradford operation should be closed. The document
included the following:
“Close the Yorkshire office. Our Yorkshire operators have
resigned and are moving on to another contractor. They will be very difficult
to replace.”
14.
The reference to “operators” was a reference to Mr Bellwood and
Mr McKeown. The document was received by the Respondent on 23 October.
At 7.30am that morning, Mr Tracey telephoned the Claimant, indicated that
he thought it a “strong/heavy document” (see: Tribunal’s reasons paragraph 16)
and arranged to meet with the Claimant that afternoon.
15.
The Claimant met Mr Bellwood and Mr McKeown during the morning
of 23 October. He found out from Mr McKeown that he was
not in fact going to resign. He advised both of them that he was intending to
recommend at the meeting he was due to have that afternoon that the Bradford operation should close but the decision would not be his. He advised
Mr McKeown not to resign since if he did so, he would lose his redundancy
payment.
16.
The Claimant met with Mr Tracey and Mr McDonald that
afternoon. It was an angry meeting. The Claimant’s account, which was
accepted by the Tribunal as being true, was that he advised that only
Mr Bellwood had resigned i.e. correcting the statement in his document
which had been to the effect that both men had resigned. Mr McDonald’s
evidence (which was to the effect that the Claimant had continued to represent
that Mr McKeown had resigned and had not corrected his earlier statement)
was not accepted by the Tribunal. Mr Tracey did not give evidence.
17.
Mr McDonald was resentful of what he regarded as a challenge by the
Claimant to his authority and made his own enquiries of Mr Bache and
Mr McKeown. He prepared a memo dated 26 October 2008 which contained
ten separate allegations about the Claimant (see: Tribunal’s reasons paragraph
22). The allegations were damning and trenchant in their terms. They included
that the Claimant had “systematically lied” and that:
“The claimant advised Mr McKeown that he intended to close
the Yorkshire operation and make him redundant.
That in the document 53 – 54 the claimant had advised
Mr McDonald and Mr Tracey that the Yorkshire operators had resigned
and that the area manager be made redundant which information was repeated at
the meeting on the afternoon of 23 October 2008.”
18.
The Claimant was asked to attend a meeting with Mr Tracey and
Mr McDonald on 27 October which he thought was to continue their
discussions about the future of the Yorkshire operation. He knew nothing of
Mr McDonald’s memo. He attended the meeting. It was short. He was
accused of lying and that he had represented that the Yorkshire operators had
resigned when they had not. The Claimant responded that he had represented
only that Mr Bellwood had resigned and obtained a copy of
Mr McKeown’s letter of resignation which he handed it to Mr Tracey.
He suspended the Claimant with immediate effect.
19.
The Claimant’s wife was at work on 27 October. She was asked to
meet Mr McDonald in the Claimant’s office, which she did.
Mr McDonald accused the Claimant of telling lies and, on the Tribunal’s
findings in fact (paragraph 44):
“…said that the relationship had broken down and that he could
never work with him again. Pointing at the claimant’s seat behind the
claimant’s desk, Mr McDonald told Mrs Boyle that the claimant would never
sit there again and he (Mr McDonald) would be taking a more active role……He
indicated Mr Tracey would be getting in touch with the claimant to offer a
settlement.”
20.
In an email to the Claimant’s solicitor on Monday 3 November 2008,
Mrs Boyle advised:
“….when Graeme telephoned me on Friday to update me on the
situation, i.e. Michael Tracey is having a meeting with one of the Irish
Directors on Tuesday, he stated that Michael would telephone me thereafter to
arrange a meeting with himself, myself and David probably on Thursday or Friday
of this week. Graeme indicated to me that this meeting would be to offer David
a settlement….”
21.
The Tribunal relied on that email as a factor which weighed with them in
their finding that Mr McDonald was not a reliable witness – he had denied
that the conversation referred to in paragraph 44, had taken place. The Tribunal
considered that the reference to offering the Claimant a settlement was
consistent with his having made it clear that the Claimant would not be allowed
to return to work.
22.
Jane Stewart was both company secretary of the Respondent and finance
director of William Tracey Ltd. She saw Mr McDonald’s memo of
26 October regarding the Claimant, on 27 October and was concerned.
It was, she considered, “an over the top reaction to what had happened that
week” and over-reliant on opinion. It did not accord with any knowledge she
had of matters from her involvement as a board director. She spoke to
Mr McDonald. He told her that he would be commencing an investigation.
She advised that neither he nor Mr Tracey should be involved in
investigating matters. Mr Kerwin, an employee with experience in
investigating health and safety matters (but no experience in HR matters), was
identified as the person to be appointed as investigating officer.
23.
Mr Kerwin was not instructed until 5 November. His remit from
Mr Tracey was to conduct an investigation into “what was going on”. He
was provided with a copy of Mr McDonald’s memo of 26 October, a copy
of the Claimant’s document received on 23 October and a copy of
Mr Bellwood’s resignation. He restricted his investigation to two issues:
(a) Had the
Claimant deliberately misled Mr Tracey and Mr McDonald with regard to
the resignation and difficulty of replacement of the Yorkshire operators?
(b) Had the Claimant
told the Yorkshire employees that the Yorkshire operations would be closed?
24.
He did not investigate the other allegations in Mr McDonald’s
memo. He took statements from Mr McKeown, Mr Moffat and
Mr Bache, on 7 November. He opened each interview by stating that the
purpose was “to establish the chain of events that led to the employees at Bradford being advised of the closure of the operation by David Boyle.” The statements
were typed up and sent to the employees for approval. Mr McKeown did not
approve his statement. Mr Kerwin then prepared a different version of
Mr McKeown’s statement – one which matched more closely what
Mr McDonald (who was interviewed by Mr Kerwin on 11 November)
said about his conversation with Mr McKeown - but, surprisingly,
Mr Kerwin did not sent it to Mr McKeown for approval.
25.
Mr Kerwin did not take a statement from Mr Bellwood,
Mr Bache having told him that he did not have his contact details. He
made no other efforts to ascertain Mr Bellwood’s contact details.
26.
Mr Kerwin did not interview Mr Tracey. He did not interview
the Claimant.
27.
Mr Kerwin decided that the Claimant should attend a disciplinary
meeting and wrote to the Claimant by letter of 11 November 2008. The
letter contained two “charges”:
“1. That you deliberately misled Michael Tracey and Graeme
McDonald regarding the operations at Bradford. In particular that you sent
then a fax indicating your recommendation to close the Bradford operation. This
was partly based on your suggestion that one of the operators Gerry McKeown had
already resigned and would be difficult to replace. You repeated this in your
meeting with Michael Tracey and Graeme McDonald at which you were asked if you
could do anything to persuade Gerry McKeown to return and you said you could
not. This is in direct conflict with Gerry McKeown’s evidence that he had no
intention of resigning. You told Gerry McKeown that Bradford would be closing
and he would be made redundant.
2. You did not have the authority to indicate to any of the
employees that Bradford would be closing (as you did to Gerry McKeown) when no
such decision had been taken by the Managing Director.”
28.
Jane Stewart chaired the hearing, which took place on 18 November
2008. Before the start of the hearing, she noticed that there was no statement
from Mr Tracey. She managed to get hold of him on the telephone and he
told her his version was the same as Mr McDonald’s. She read over
Mr McDonald’s statement to him and he said he agreed with it but she did
not advise the Claimant about that. She did not know that Mr McKeown’s
statement had not been approved by him and, further, that it was a different
version from that which had been sent to him for approval.
29.
The Claimant explained that when he wrote his document, he thought that
both men were resigning but that he had corrected that when he met with
Mr McDonald and Mr Tracey in the afternoon of 23 October, having
learnt from Mr McKeown that morning that that was not the case. He also
explained that he had never said to the men that Bradford would be closing; he
had told them that would be his recommendation, not that the matter had been
decided.
30.
Jane Stewart adjourned at one point, for a period of thirty five minutes
during which she had five telephone conversations, with Mr Kerwin,
Mr Bache, Mr McKeown, Mr McDonald and Mr Tracey. When she
spoke to Mr McKeown, he told her that the Claimant had not said that Bradford was closing. He had only said that if things went his way, the Yorkshire
operation would close. She did not tell the Claimant about that phone call.
31.
Jane Stewart reconvened the hearing and told the Claimant that he was to
be dismissed. The minute of the hearing records that she gave as her reason:
“DB had deliberately misled the IMP Board by not correcting the
misleading statements made in his fax when questioned re such at the meeting on
23 October with MT and GMcD and that this had led to an irreparable break
done in trust and confidence.”
32.
Towards the end of the minute of the disciplinary hearing, in the final
sentence of the penultimate paragraph, it was noted:
“JS then asked if DB set out to put MT straight about the
situation with GMcE and the fact he had not actually resigned. DB said no.”
33.
However, on the previous page, the minute noted:
“JS asked if during the meeting with MT and GMcD on 23 October
he sought to correct the understanding regarding the position of more than one
resignation, DB stated he clearly did so.”
and
“JS asked if DB informed MT and GMcD at their meeting on 23rd
October that GMcE had not resigned. DB said yes, he told the meeting
that GMcE was staying.”
34.
At paragraph 35, the Tribunal found that where, in the final sentence of
the penultimate paragraph of the minute, it stated “DB said no.” it should read
“DB said yes.”
35.
Jane Stewart was influenced in her decision by knowledge that at the
time of the purchase of the Respondent from the Claimant and his wife, the Claimant
had delayed in disclosing that there was an outstanding complaint before the
Traffic Commissioners which, had it not been resolved in the Respondent’s
favour, could have resulted in the revocation of the company’s Vehicle Operator
Licence. She did not tell the Claimant that she had that matter in mind.
36.
Jane Stewart wrote to the Claimant confirming his dismissal, reiterating
the reason articulated by her as above, stating that she had “decided to prefer
the evidence provided to me by Graeme and Michael” (without giving any reasons
for doing so) and adding “I also believe that you did not inform Stewart
Bellwood’s line manager or the managing director of his resignation, despite
you expressing the view that he was key to the operation. By failing to do so,
you failed to report significant matters to line management, which in my view
amounted to a further breakdown in trust and confidence.”
37.
The Claimant did not appeal. He regarded the whole process as a charade
and saw no prospect of Mr McDonald and Mr Tracey’s clear wish to be
rid of him, being reversed.
Relevant law
Unfair Dismissal
38.
It was not disputed that the reason for the Claimant’s dismissal was one
relating to conduct (Employment Rights Act 1996 s.98(2)) and was, in
particular, that he had committed gross misconduct. The task for the Tribunal
was, accordingly, to ascertain whether, in all the circumstances (including the
size and administrative resources of the Respondent) the dismissal was fair or
unfair. That required them, following the guidance in British Home
Stores Ltd v Burchell [1978] IRLR 379, Iceland Frozen Foods v
Jones [1982] IRLR439, and Sainsbury’s Supermarkets v Hitt
[2003] IRLR 23, as summarised in the recent case of Orr v Milton Keynes
Council [2011] IRLR 317 (per Aikens LJ at paragraph 78), to
consider whether or not the Respondent held a genuine belief in the Claimant’s
misconduct, whether or not that was a belief held after having carried out a
reasonable investigation (bearing in mind that there is a range of reasonable
responses open to an employer when it comes to investigation), and whether or
not, if the investigation was a reasonable one, it was a reasonable belief to
hold. If satisfied that the employer did hold a genuine and reasonable belief
that the Claimant had committed the alleged act of misconduct, arrived at after
a reasonable investigation, the Tribunal then (but only then) required to go on
and consider whether or not dismissal was within the range of reasonable
responses. The test is always the objective one of the reasonable employer; it
is not a matter of the Tribunal’s own subjective views (see: London
Ambulance Service NHS Trust v Small [2009] IRLR 563.). Nor is it a
matter of the employer’s own views as to the reasonableness of its disciplinary
decisions. As was observed by Longmore LJ in Bowater v Northwest London
Hospitals NHS Trust [2011] IRLR 33:
“..the employer cannot be the final arbiter of its own conduct
in dismissing an employee. It is for the Employment Tribunal to make its
judgment always bearing in mind that the test is whether dismissal is within
the range of reasonable options open to a reasonable employer.”
39.
Also, when determining whether or not an employee has been unfairly
dismissed, contrary to his statutory entitlement (Employment Rights Act 1996
s.94) the Tribunal must avoid substituting its own evaluation of a witness for
that of the employer at the time of investigation and dismissal, save in
exceptional circumstances.
Wrongful Dismissal
40.
In determining whether or not the Claimant had been wrongfully
dismissed, in breach of contract, the Tribunal required to consider whether or
not, as a matter of fact, the Claimant had committed an act of gross
misconduct. That is, was he in fact in material breach of contract? As was
observed by HHJ Pugsley in London Central Bus Company Ltd v Nana–Addai
UKEAT/0204/11/SM:
“8. In a case of wrongful dismissal, it is for the court to
decide what happens (sic). It is for the court to judge the credibility of the
witness. It is about what happened, not the employer’s perception of what
happened, that matters. Moreover, Boston Deep Sea Fishing & Ice Co v
Ansell [1888] 39 ChD 339, a dismissal could be justified retrospectively if
a breach of contract not known at the time of dismissal was, after the
dismissal, found to exist.”
Task for this Tribunal
41.
We require to bear in mind that it is not appropriate to “go through the
reasoning of these tribunals with a toothcomb to see if some error can be found
here or there – to see if one can find some little cryptic sentence.” (Hollister
v NFU [1979] ICR 542 at 553 per Lord Denning MR) and that:
“The reading of an Employment Tribunal decision must not ….be so
fussy that it produces pernickety critiques. Over analysis of the reasoning
process; being hypercritical of the way in which the decision is written; focusing
too much on particular passages or turns of phrase to the neglect of the decision
read in the round: those are all appellate weaknesses to avoid.” (Fuller v London Borough of Brent [2011] IRLR 414 per Mummery LJ at paragraph 31.)
The Tribunal’s Judgment and
Reasons
42.
With commendable clarity, the Tribunal separated the issues of unfair
dismissal and wrongful dismissal. We are satisfied that they were fully aware
of the need, when determining the former, to have no regard to the findings
they had to make, for the purposes of determining the latter, about what was
actually said at the meeting on 23 October. It is clear that
they knew of the trap for the unwary that existed in that regard and we have no
concerns that they confused their role.
Findings on Credibility/ Reliability
43.
For reasons which are explained at paragraphs 62 – 66, and, regarding
Mr McDonald, at paragraph 71, the Tribunal found the Claimant and his wife
to be credible and reliable, Mr McDonald to be unreliable, Mr Kerwin
to be unimpressive and vague and Ms Stewart to be generally truthful but mistaken
in having asserted that the Claimant was confused about his position at the
disciplinary meeting. In respect of the latter, the Tribunal, evidently
referring to their own observations as to the manner in which the Claimant
answered questions, stated, at paragraph 63:
“The tribunal also suspects that the claimant on occasion gave
the opposite answer to a question to that which was syntactically accurate if
the question contained a negative or was posed by way of assertion.”
and said that they considered that that should have been obvious
to Ms Stewart.
Unfair Dismissal
44.
The Tribunal found that the Respondent failed to carry out as much
investigation as was reasonable in the circumstances. They list their reasons
for so concluding at paragraph 68:
“….
·
The starting point was the lack of
a focused remit to Mr Kerwin as to what he was investigating.
·
The Tribunal considered it
inappropriate and prejudicial that the basis for investigation should have been
Mr McDonald’s memorandum dated 26 October 2008 (document 58-59). Ms Stewart
described Mr McDonald as being emotionally charged and that the memorandum
was an “over the top reaction to what had happened that week”. She was
surprised this memorandum had been the basis of Mr Kerwin’s instructions
to investigate the claimant. The grave charges contained in that document that
the claimant had acted against direct instructions of the IMP Board struck no
resonance with Ms Stewart who as Finance Director and Company Secretary,
attended all meetings of the respondent’s Board.
·
It was inappropriate and
prejudicial that the explanation given by Mr Kerwin to each interviewee
(except Mr McDonald) for his investigation was “that the purpose of the
meeting was to establish the chain of events that led the employees at Bradford being advised of the closure of the operation by David Boyle”. Such an
explanation clearly indicated that Mr Kerwin was looking for supporting
evidence of the claimant’s guilt not whether or not the claimant was guilty.
·
To neither interview nor make any
serious effort to interview Mr Bellwood was in the Tribunal’s view a grave
deficiency in the investigation.
·
To fail to obtain
Mr McKeown’s approval to the accuracy of the statement taken from him and
to then substitute a different version of Mr Keown’s statement from the
one sent to him for approval, was inappropriate and prejudicial particularly as
it involved the addition of critical words viz. “that I was going to be made
redundant”.
·
The failure to obtain a statement
from Mr Tracey was indicative of an inadequate investigation. It appeared
that his confirmation to Mr Kerwin that he agreed with Mr McDonald’s
statement was a reference to the memorandum (document 58-59) rather than the
statement (document 63-64).
·
The conflict between the
claimant’s memorandum (document 53-54) in relation to Mr Moffat, namely
that he should be offered a driving job in Glasgow or dismissed by reason of
redundancy should he not wish to accept that and the account given by
Mr McDonald of what Mr Tracey said at the suspension meeting, namely
that the claimant had implied at the previous meeting that Mr Moffat had
also resigned, merited careful investigation.
·
Mr Kerwin should have carried
out an investigation with Mr McDonald into, for example, what had occurred
at the meeting on 23 October 2008, the reasons for the meeting and the
significance of any perceived inaccuracies perpetrated by the claimant. The
inconsistency referred to in the preceding bullet point should have been
explored with Mr McDonald.
·
The Tribunal believes that this
was a case where the claimant should have been interviewed as a part of the
investigatory process. The Tribunal believed that this failure was indicative
of Mr Kerwin’s investigation being focused on establishing the claimant’s
guilt.
·
The Tribunal did not believe the
foregoing deficiencies were made good by Ms Stewart’s investigations
conducted by telephone in the 35 minute adjournment of the disciplinary
hearing. Ms Stewart made five telephone calls as set out in document
73-74 and also formulated her conclusions during that adjournment.
·
The Tribunal regarded
Ms Stewart’s record of her conversation with Mr Kerwin instructive.
That the witnesses appeared to have been led to a conclusion was not simply a
point raised by the claimant, it was patent from the terms of Mr Kerwin’s
statements. Ms Stewart’s apparent acceptance of Mr Kerwin’s
confirmation that he had not so led them, was not in the Tribunal’s view a
conclusion which a reasonable disciplining officer could have reached, nor was
her apparent acceptance of Mr Kerwin’s explanation for not interviewing
Mr Tracey and Mr Bellwood.
·
The Tribunal noted that in
Ms Stewart’s conversation with Mr Bache that Ms Stewart, having
regard to Mr Bache’s alleged operational responsibilities, did not follow
up Mr Bache’s assertion that he had no contact details for
Mr Bellwood (an employee whose duties included being on call) nor did she
ask him what steps he had taken with regard to the Muller “not being fit for
purpose” having been copied in on the email by Mr Moffat to
Mr McCamley dated 16 October 2008 (document 50).
·
The Tribunal noted that having
spoken to Mr McKeown who supported the claimant’s version of events,
Ms Stewart did not revert to Mr Kerwin to explore the conflict
between the statement taken by him and her telephone conversation with
Mr McKeown. The Tribunal acknowledges that Ms Stewart did not uphold
this aspect of the charges, (she could hardly have done otherwise having regard
to the absence of any evidence pointing to the claimant’s guilt) but considered
such further inquiries with Mr Kerwin as something a reasonable employer
should have done in order to inform her assessment of credibility on the other
charges.
·
The conversations with
Mr McDonald and Mr Tracey which appear to have been shorter than those
with the other three witnesses were once again seeking confirmation rather than
getting a proper account of what took place at the meetings on 23 and
27 October 2008. It was patent that the alleged representations about
Mr McKeown’s resignation was a point of detail in a much bigger picture so
far as Mr McDonald in particular was concerned. Ms Stewart could not
have doubted that the claimant was acutely concerned about the respondent’s
profitability during the earn out period or the inherent improbability that the
claimant would set out to damage the respondent’s profitability during that
period. There was clearly a conflict between Mr McDonald’s strategy for
the future and the claimant’s. Ms Stewart made no effort to explore that
wider context with Mr McDonald and in particular where Mr McDonald’s
assertions did not sit with her own knowledge e.g. disobedience by the claimant
of board instructions. She did not explore or investigate the internal
conflict exposed in Mr McDonald’s statement (document 63-64) as to whether
the claimant had represented that Mr Moffat had also resigned. She made
no investigation into the discrepancy between the grounds for suspension and
the grounds for disciplinary action.”
45.
They also found that Ms Stewart did not have in mind reasonable grounds
on which to sustain her belief in the Claimant’s guilt. They list their reasons
for so concluding at paragraph 69:
“……
·
In the Tribunal’s view the
inadequacy of the investigation was patent. By inadequacy the Tribunal means
having fallen well outside the band of a reasonable investigation which a
reasonable employer of the resources available to this employer should have
carried out. Reasonable grounds were accordingly lacking.
·
The Tribunal did not regard the
late notification of the vehicle operator’s licence issue in the course of
negotiations between the respondent’s previous shareholders (i.e. the claimant
and his wife) and the Tracey Group as a justifiable basis to doubt the
claimant’s truthfulness.
·
In her assessment of where the
truth lay, Mrs Stewart seemed content to ignore certain matters within her
knowledge, for example:
(a) that
Mr McDonald’s description of the claimant’s role as Operations Director as
unchanged in his email to the claimant dated 14 August 2008 (document 46)
was at best less than candid.
(b) that
assertions by Mr McDonald in his memorandum dated 26 October 2008
(document 58-59) did not square with her understanding as a participant in the
respondent’s Board meetings. It was also clear from her evidence that
Ms Stewart did not regard that document as a reliable exposition of the
facts.
(c) that
the statement by Mr McDonald (document 63-64) contained inherent
inconsistencies as to how many and which operators the claimant had said had
resigned.
(d) that
her acceptance of Mr McKeown and the claimant’s evidence about what the
claimant had said with regard to the potential closure of Bradford, which
conflicted with Mr McDonald’s statement, might raise issues of reliability
on the other matters canvassed in that statement.
(e) that
the documented explanation by the claimant for bringing the Muller to Glasgow
(i.e. for repair) cast doubt on Mr McDonald’s conviction that the bringing
of the Muller to Glasgow was part of an unauthorised programme of closure by
the claimant of the Bradford operation.
·
In addition Ms Stewart failed
to advise or give the claimant the opportunity to comment on the information
gathered by her during the adjournment.”
46.
At paragraph 70, they conclude that, in those circumstances, it was not
open to Ms Stewart to find the Claimant guilty of gross misconduct.
Breach of Contract
47.
The Tribunal having accepted the Claimant’s evidence that he did, at the
meeting with Mr Tracey and Mr McDonald, correct his earlier statement
that Mr McKeown was resigning and that he did not tell the men that the Bradford operation was definitely closing, they found, at paragraph 71, that he had not
breached his contract with the Respondent. They observed that Mr Tracey
did not give evidence, that Mr McDonald was not a reliable witness and
that he did not, in any event, actually give evidence about what had happened
at the meeting. All he had done was confirm that a particular document was a
statement prepared by him.
Grounds of appeal/ discussion
48.
The Notice of Appeal is lengthy (16 pages) and discursive in nature.
There is overlap between some of the grounds of appeal. The notice was amended
(on an unopposed motion) at the start of the appeal hearing so as to add
another ground of appeal (ground 12A). Not all of the grounds of appeal were
spoken to in argument. We find it convenient to deal with each ground of
appeal that was addressed (in the order in which Mr Walker made his
submissions), the response and our discussion, sequentially.
1. General Submission – delay
49.
Mr Walker referred to the lapse of time between the issuing of the
judgment and the issuing of the written reasons. He also referred to various
small errors such as that Michael Tracey was referred to as “William” Tracey
and some errors regarding dates of meetings and documents. The judgment was,
he submitted, less than accurate in respect of these details. His point
appeared to be that that must have been due to the passage of time and was
indicative of that passage of time having had a detrimental effect on the
overall quality of the judgment.
50.
We do not accept that there is any merit in this submission. Quite
apart from anything else, it ignores the fact that the Tribunal had evidently
been able to reach a decision in respect of all parts of the Claimant’s claim
by 29 September 2009, the date that the judgment was signed. We cannot
see that there is any basis for drawing an inference of deficiency in the
reasoning that lay behind it from the fact that the written reasons were not
issued until four months later (a period which included the Christmas and New
Year break), which is all that the submission amounted to.
2. Breach of Contract:
(a) The Tribunal erred in holding that the Claimant and his
wife were credible and reliable
51.
Mr Walker referred to evidence before the Tribunal about a letter
sent by the Claimant’s solicitor to Mr Tracey, dated 20 November
2008, on the instructions of the Claimant. Both he and his wife had confirmed
its accuracy, in their evidence. It referred to “the material resignation” as
being that of Mr Bellwood. The Claimant’s wife had been cross examined
about the meaning of the expression “material resignation” and she had said
that it was a reference to the “only” resignation. The Tribunal had not dealt
with this passage of evidence. The essence of Mr Walker’s submission was
that the terms of the letter were indicative of the Claimant having said that
there was more than one resignation, that supported the Respondent’s account of
events, that pointed to the Claimant and his wife not being credible witnesses
and the Tribunal was obliged to make findings about the matter. Mr Walker
also submitted, under reference to evidence given by the Claimant and his wife
about their attendance at meetings with the solicitor, that their evidence
conflicted on the matter of whether Mrs Boyle attended or not. That too
had the potential to undermine their credibility and reliability and the
Tribunal had erred by not making findings about it.
52.
Mr Napier submitted that the evidence relied on did not support the
proposition that it pointed to the Claimant or his wife lacking in credibility
or reliability.
53.
We agree. Mrs Boyle’s evidence, namely that as far as she was
concerned the solicitor’s letter referred to the Claimant speaking of there
being only one resignation does not conflict with his or her position on the
matter. As to the evidence about attendance at meetings with the solicitor
there was more than one meeting, as Mr Walker appeared ultimately to
accept, and there was no evident contradiction as between their accounts about
that. Moreover, findings on credibility and reliability lie within the
province of the Tribunal of first instance. Rarely will it be open to this Tribunal
to interfere with them – it will usually only be in cases of perversity that it
would be appropriate to do so. Here, even on the basis that Mrs Boyle’s
evidence on these collateral matters was open to question, we could not have
concluded that the Tribunal’s overall conclusion that both she and the Claimant
were credible and reliable was thereby demonstrated to have been perverse.
(b) The Tribunal erred in finding that Mr McDonald was not a
reliable witness
54.
Mr Walker referred to paragraph 65 of the Tribunal’s reasons and,
in particular their reliance on what they referred to as contemporaneous
emails. He submitted that there were no such emails. Also, the conversation
on 27 October with Mr McDonald that was spoken to by the
Claimant’s wife only emerged when she gave evidence before the Tribunal. He
also referred to his submissions regarding the credibility of Mrs Boyle.
Mr Napier submitted that it was plainly open to the Tribunal to take the
view that Mrs Boyle’s email of 3 November did support her account of
the conversation on 27 October, given the reference to a “settlement”
being offered to the Claimant and nothing was to be taken from her not having
referred to the conversation earlier.
55.
We agree. The reference to the position being that Mr Tracey would
be offering a settlement to the Claimant was plainly supportive of
Mr McDonald having made it clear to Mrs Boyle that her husband would
not be back at work, the intention being to “buy him off” and we cannot see
that anything turns on the conversation not having been referred to prior to
Mrs Boyle giving evidence about it.
(c) The Tribunal erred in failing to make material findings
regarding the Respondent’s note of the disciplinary hearing
56.
Mr Walker focused on the final sentence of the penultimate
paragraph on the last page of the minute and seemed to be submitting that
notwithstanding the two paragraphs on the previous page which were plainly to
the effect that the Claimant stated he had told Mr Tracey and
Mr McDonald that Mr McKeown was not resigning, it was not open to the
Tribunal to find that “No” should, on the last page, have read “Yes”.
Mr Napier submitted that the apparent conflict in the entries in the notes
gave rise to no concern. It was obvious that the last entry was in error. The
two earlier entries would not, otherwise, have made sense.
57.
We agree. There was nothing in this point. Nor was there anything else
in the evidence before the Tribunal that suggested the Claimant had made what
would have been a damning admission at the disciplinary hearing.
(d) The Tribunal erred in failing to take account of the
totality of the evidence relating to the breach of contract claim
58.
Mr Walker referred to evidence given at the tribunal hearing by
Mr McKeown; he had stated that he did not tell Mr Bellwood or the
claimant that he had resigned. Separately, the claimant had accepted in
evidence that Jane Stewart could have had “a trust issue” with him, given his
late disclosure of the Traffic Commissioners matter. The tribunal ought, he
submitted, to have made findings about these matters. He did not, however,
indicate what difference, in his submission, it would or ought to have made had
they done so. Mr Napier did not make specific submissions in relation to
this ground of appeal but he had a general submission that there was no substance
in the attack on the tribunal’s finding that the claimant was not in breach of
contract.
59.
We do not consider that the tribunal was bound to make any findings in
relation to these matters. Regarding Mr McKeown’s evidence about what he
told Mr Bellwood, it was not demonstrative of what Mr Bellwood had
told the claimant. So far as it related to what Mr McKeown had told the
claimant, the tribunal made findings about that and they did not need
specifically to relate those findings to his evidence. Regarding the Traffic
Commissioners matter the point was not whether or not Jane Stewart would have
been entitled to have a “trust issue” with the claimant. The tribunal’s
concern was that she allowed it to influence her thinking in circumstances
where they evidently considered it was not relevant.
60.
We are, in these circumstances, satisfied that there is no merit in the
Respondent’s appeal against the finding that the Claimant was not breach of
contract and was, accordingly, wrongfully dismissed.
3. Unfair Dismissal
(a) The Tribunal erred by substituting its own decision for
that of the Respondent
61.
Mr Walker referred to the Tribunal having found that
Mr McKeown was “second man” to Mr Bellwood; there was, he said, no
evidence about that. He referred to their having rejected Ms Stewart’s
position that the Claimant was confused at the disciplinary hearing and
submitted that that showed they were substituting their own view for that of
the Respondent. He referred to the evidence regarding the Claimant’s business
proposals document, particularly that it was typed up on 22 October but no
fax bearing that date was produced at the Tribunal, he referred to certain
emails having been before the Tribunal but not before the disciplinary hearing,
he referred again to Mrs Boyle’s email of 3 November as not having,
in his view, supported her account of the conversation with Mr McDonald on
27 October, and he referred to the Tribunal having taken into
account the administrative resources of the Tracey Group rather than confining
their considerations to the resources of the Respondent; he believed it to be
wrong to suggest that they could look beyond their own resources to the wider
resources of the group. He said that he did not consider it critical that
Ms Stewart/Mr Kerwin did not contact Mr Bellwood. He did not
consider that Mr Kerwin required to interview the Claimant. He considered
that Ms Stewart was entitled to deal with matters as she did and the
Tribunal’s findings about her reaction when she first received Mr McDonald’s
memo simply showed that she was fair; he did not appear to appreciate that the
Tribunal’s concern was that when it came to considering her decision on the
sharp issue of credibility that she had to determine, she had no regard to her
own, significant, earlier reaction. He referred to his earlier submissions
regarding the Tribunal’s rejection of Mr McDonald’s evidence and submitted
that if we were persuaded about that then it would assist in showing that the
Tribunal had substituted their own view for that of the reasonable employer.
He also referred to the Tribunal having considered that Ms Stewart ought
not to have taken the late disclosure of the Traffic Commissioners’ matter into
account.
62.
Mr Napier submitted that the proposition that the Tribunal had
substituted its own view was ill founded. They had not erred in the applicable
law. They had taken account of the relevant facts. It could not be said that
they had reached a view that no reasonable tribunal could have reached. They
had a tenable basis for rejecting Mr McDonald’s evidence.
63.
We do not consider that there is any merit in the submission that the
Tribunal substituted its own view for that of the reasonable employer. This is
not a case where they have referred to the “reasonable employer” by way of
mantra; on the contrary, it is clear from their reasons that they have been
very careful to be maintain the objectivity that the “reasonable employer” test
requires. None of the small details referred to by Mr Walker demonstrate
otherwise. In particular, he was, we consider, not correct in his submission
that they were not entitled to regard the whole administrative resources of the
Tracey group as being available to the Respondent (the Tribunal made a finding
in fact that that was the case), not correct in his submission regarding the
failure to interview the Claimant – it was plainly open to them to find that a
reasonable employer would, in such circumstances of a sharp conflict of
accounts as to what was said, have done so and his submission regarding
Ms Stewart’s initial reaction to Mr McDonald’s memo missed the
point. As for Mr McDonald’s reliability, as above noted, we consider the Tribunal
were entitled, in the circumstances, to reject his evidence. Regarding the
Traffic Commissioners matter, there is no indication of the Tribunal’s view
being other than their assessment of how a reasonable employer would have
conducted itself.
64.
We note that the circumstances included that the matter did not have
obvious relevance to the issue for the employer and, further, that
Ms Stewart had not told the Claimant that she was taking it into account;
an Employment Tribunal was plainly entitled to conclude that a reasonable
employer would not have allowed the matter to carry weight in the decision
making process.
(b) The Tribunal erred in finding that Ms Stewart did not
have reasonable grounds for her belief in the Claimant’s guilt because (i) they
used the wrong test regarding the availability of administrative resources (ii)
erred in holding that Ms Stewart “seemed content to ignore certain matters
within her knowledge” (paragraph 69) (iii) failed to specify what the Claimant
could have given clarification of or comment on in their criticism of the
failure to give the Claimant an opportunity to comment on the information
gathered by Ms Stewart during the adjournment of the disciplinary hearing,
and (iv) erred in failing to find what was the reason for dismissal and in then
criticising Ms Stewart for adding a reason which had not formed part of
the ‘charge’ against the Claimant when it came to her dismissal
65.
Mr Walker repeated his submissions regarding the relevance of the
Tracey Group’s administrative resources. The basis on which he submitted that
the Tribunal were not entitled to find that Ms Stewart seemed content to
ignore the matters listed by them at paragraph 69 was not entirely clear.
Regarding (iii) he stated that the only finding made by the Tribunal related to
Mr McKeown having confirmed that the Claimant did not say that Bradford
was going to be closed; he did not appear to appreciate that what the Tribunal
were pointing out was that Mr McKeown had told Ms Stewart something
which plainly supported the Claimant’s account of matters yet she did not make
him aware of that. Regarding the additional matter which appeared as a reason
for dismissal in Ms Stewart’s letter, he submitted that it did not matter
since it was not the principal reason and the Claimant had had notice of the
“charge” to which the principal reason related.
66.
Mr Napier made some general observations to the effect that
Ms Stewart had the task of making a career critical decision so far as the
Claimant was concerned. He would be wholly deprived of the opportunity to
receive the additional payment of £600,000; the circumstances were comparable
to those in A v B [2003] IRLR 405. The Tribunal required to look
at what was done and not done in the course of investigation. They were
entitled to take the view that they that there was a series of significant
failures in the investigative process. They focused on important matters in so
doing.
67.
We are satisfied that there is no merit in this ground of appeal
either. There were significant failings in the investigative process, as
discussed by the Tribunal at paragraph 68. These were, as Mr Napier
submitted, important matters and it was plainly open to the Tribunal to
conclude that, when considered together, they could only conclude that the
investigation fell well outside the band of the reasonable investigation which
an employer with the resources of the Tracey group available to it, would have
carried out. Had Ms Stewart stood back and looked at the whole
investigation, it ought to have been clear to her that the deficiencies, as
identified by the Tribunal, were such that she could not reasonably rely on
it. The Tribunal did not rely on the “career impact” factor to which
Mr Napier referred but we accept that, in the particular circumstances of
this case, a reasonable investigative process would have had regard to the
potentially devastating wider implications of dismissing the Claimant, namely
that he would lose all prospect of receiving an additional £600,000.
(c) The Tribunal’s finding that it was not within the band of
reasonable responses for Ms Stewart to conclude that the Claimant was guilty
of gross misconduct was perverse in respect that they failed to make any
findings as to the principal reason for dismissal and whether it fell within
that band
68.
Mr Walker submitted that the Tribunal had not actually found what
was the reason for the Respondent’s dismissal of the Claimant. They required
to do so. If it was that the Claimant had deliberately misled the Respondent,
they then required to consider whether dismissal was within the band of
reasonable responses. Mr Napier submitted that there was nothing in this
ground. It was plain that the Tribunal had found that the reason for the
dismissal was misconduct. Further, since the Tribunal had found that
Ms Stewart did not have reasonable grounds for her belief in the
Claimant’s misconduct, there was no requirement for them to go on and consider
what would have been their decision had they done so.
69.
We agree with Mr Napier. Mr Walker’s submission proceeded on
a misunderstanding of Burchell and the demands of s.98(4). A
Tribunal does not require to consider whether dismissal was a reasonable
sanction if it has found that the employer did not have reasonable grounds for
believing that the employee was guilty of misconduct in the first place. It is
self evident – as the Burchell guidance strives to
demonstrate - that, in such circumstances, if the employee was dismissed then
the dismissal was not fair.
General Observations
70.
Mr Napier submitted that this was a simple case of unfair and
wrongful dismissal and that it had been made unnecessarily and hugely
complicated by the detail of the appeal. We agree. The appeal was, we
consider, a classic case of a failure to see the wood for the trees and,
further, no more than an attempt to have us perform upon the judgment of the
Tribunal the type of microsurgery that was condemned by the Court of Appeal as
long ago as 1979 in the case of Hollister, a condemnation
to which they have since held fast, as recently as this year, in the case of Fuller.
Disposal
71.
We will record our granting, at the start of the appeal hearing, of the
Respondent’s motion to add ground of appeal 12A, but otherwise we will
pronounce an order dismissing the appeal.
