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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Henry Cooke, Lumsden Plc v Towler [2002] EWCA Civ 238 (14 February 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/238.html Cite as: [2002] EWCA Civ 238

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(JUDGE ALTMAN)

		Royal Courts of Justice Strand London WC2 Thursday, 14th February 2002

Thursday, 14th May 2002

1. LORD JUSTICE PILL: I will ask Lord Justice Mummery to give the first judgment.
2. LORD JUSTICE MUMMERY: This is an appeal from the decision of the Employment Appeal Tribunal on 19th December 2000. The Appeal Tribunal allowed an appeal by Mr. Craig Towler against the decision of the Employment Tribunal at Manchester dismissing his claim for unfair dismissal by Henry Cooke, Lumsden plc ("HCL"). The extended reasons for the Employment Tribunal's decision had been given on 4th June 1999. This court granted Henry Cooke, Lumsden permission to appeal.
3. There is also before the court an application by Mr. Towler for permission to appeal from the decision of the Employment Appeal Tribunal on 21st June last year. The Appeal Tribunal refused his application of 23rd April 2001 for a review of their decision allowing his appeal. The basis of his application for a review consisted of criticisms of the Employment Appeal Tribunal, not of the Employment Tribunal. He alleged that they had failed to allow evidence to be admitted on the appeal, particularly a document dated 17th December 2000, and had not allowed him to make submissions on the point that there had been no evidence presented to the Employment Tribunal that he had done anything wrong. I shall deal with the application for permission after dealing with the substantive appeal.
4. The background to this unfortunate dispute can be summarised quite shortly. From July 1965 until he was dismissed on 27th September 1996 Mr. Towler was employed by HCL as a senior investment executive. HCL carry on the business of stock-broking and independent financial advice. During the course of his duties, Mr. Towler permitted various clients of HCL extended credit in order to purchase shares in a company called Magnum Power Limited. Magnum Power collapsed and losses were suffered.
5. On 3rd September 1996 Mr. Towler was suspended on full pay following investigatory meetings held on 28th June and 3rd July 1996. On 3rd September 1996, a letter was written to him by Mr. William Martin Robinson, the chief executive of HCL, regarding various problems. Some of them were specified, including:

"1. Inadequate knowledge of the financial situations of your clients."

6. The letter goes on to state:

"These are very serious issues any of which could, if proven, amount to gross misconduct resulting in your dismissal from the Company."

7. Another letter was written by Mr. Herbert, a director, to Mr. Towler on 13th September 1996, enclosing formal notice of a disciplinary hearing to be held on 18th September. The notice stated:

"Take note that Henry Cooke, Lumsden plc will hold a Disciplinary Hearing, as specified above, in order to consider the following matters.

1) The competence, or otherwise, displayed by you in handling the affairs of a number of your clients; in particular, but not limited to, clients with investment positions in Magnum shares.

2) Your apparently inadequate knowledge of the financial circumstances of a number of your clients, again with special reference to Magnum share investments."

8. The specified matters include various other matters which are not directly relevant to this appeal.
9. Mr. Towler did not attend the disciplinary hearing on 18th September. It was adjourned until 24th September.
10. The disciplinary hearing took place on that date, and there was made available to the Employment Tribunal, as there has been to this court, a transcript of what happened at it. There was a disciplinary committee meeting on 25th September. It appears from the transcript of that meeting that the members of the committee took the view that Mr. Towler did not have adequate knowledge of clients' circumstances and concluded that, if he did have knowledge of their circumstances, he should not have allowed them to open the positions that they did in respect of Magnum.
11. The memorandum also deals specifically with the accounts of a client, Mr. East-Rigby, in relation to the sale of Magnum shares from previous rolled-over positions, stating that debits have been allowed to continue to the present time and indeed with subsequent sale and roll-overs in later months. The memorandum went on:

"As a result we can only conclude that [Mr. Towler] did not have adequate knowledge of his clients' financial affairs, nor did he display due diligence when undertaking transactions for clients who owed Henry Cooke Lumsden money at that time."

12. The specific conclusions under the charges included the following:

"Under charge no 1 regarding the competence, or otherwise, displayed by [Mr. Towler] in the handling of his clients, the Disciplinary Committee cannot accept [Mr. Towler's] statement that he did not give advice to those clients. On the evidence of telephone transcripts available to us, dated 1st July, 1996 and on the evidence of the transcript of the Hearing yesterday, it seems to us that he quite definitely did give advice to his clients, particularly on the question of Magnum."

13. The recommendation was that, taking into account all the evidence, Mr. Towler be dismissed on the grounds of gross misconduct.
14. On 3rd October 1996 an appeal was offered. Mr. Towler wished to appeal and submitted various written grounds. The hearing of the appeal took place on 22nd October 1996. The appeal was unsuccessful. The outcome was notified to Mr. Towler on 23rd October 1996. It was stated that, in coming to the conclusion that he was rightly dismissed for gross misconduct, the appeal panel made certain observations:

"1.a) The SFA places a clear responsibility on authorised persons, as individuals, in the conduct of investment business.

b) The Company has a right to expect a high level of competence and diligence from its executive personnel - the more so from senior and long experienced members of staff.

c) Any perceived failures of control or direction elsewhere in the organisation would not absolve the individual from the above responsibilities."

15. Having unsuccessfully appealed the decision to dismiss him, Mr. Towler began proceedings in the Employment Tribunal, claiming unfair dismissal. In his ET1, which was presented on 2nd December 1996, he stated as follows:

"I was unfairly dismissed on the alleged grounds of gross misconduct specified in the letter from Henry Cooke, Lumsden plc. dated 3rd September 1996...

"The dismissal was confirmed by letter dated 27th September 1996...

"I appealed against the dismissal on the grounds specified in writing...

"The rejection of my Appeal was confirmed by letter dated 23rd October 1996..."

16. His claim was resisted by HCL and, in reply to question 7 of the originating application, HCL denied that there had been unfair dismissal, asserting that the dismissal had been on grounds of gross misconduct and incompetence. Paragraph 3 of the ET3 form states this:

"After a thorough investigation and Disciplinary hearing a Disciplinary Committee found that the Applicant had breached the rules of the Securities and Futures Authority. The Disciplinary Committee also found reasonable grounds to believe that the Applicant had not acted with due diligence or in a competent manner and had destroyed the trust and confidence between the Applicant and the Respondent which in itself was a substantial reason for dismissal."

17. Finally it was asserted by HCL that it had acted reasonably, followed a fair procedure throughout, and that the dismissal was within the range of reasonable responses.
18. The Employment Tribunal heard the case on 18th and 19th May 1999. The unanimous decision of the tribunal, at which Mr. Towler acted in person, was that he had not been unfairly dismissed. The tribunal heard evidence from Mr. Towler, and also heard evidence on behalf of HCL from Mr. Peter Green, a former director, and Mr. Ian Herbert, director and company secretary. Having set out the history of the events leading up to the dismissal (which I have already summarised) the tribunal made important findings of fact in paragraphs 11 and 12 of the extended reasons. They said:

"11. It is not considered necessary in these reasons to go into great detail regarding the rather complicated nature of the investments which were undertaken by the applicant on a behalf of a number of clients including in particular one client by the name of Mr. East-Rigby. Suffice it to say that the applicant permitted Mr. East-Rigby and other investors to be allowed extended credit, funded by the respondents, to purchase shares in Magnum Power, no doubt in the belief that such was a highly attractive investment. Unfortunately, by June of 1996, the optimistic predictions for that company had proved to be misguided. The shares began and continued to plummet in price. What the applicant then permitted to happen was a 'roll-over' situation whereby the clients were permitted by him to further postpone payment in respect of the purchase of the shares and, indeed, to continue to purchase those shares, in a situation in which, it could be said, the applicant on behalf of the clients was 'chasing losses'. To cut a long story short, Magnum Power eventually collapsed and the net result was that the clients involved incurred total losses in the region of £500,000, the respondents were exposed to potential loss in the same sum and in fact sustained financial losses of approximately £150,000.

12. The Tribunal heard evidence from the applicant that the use of the 'roll-over' system was relatively commonplace within the respondent organisation, was known to take place and was impliedly if not expressly authorised by it. Having considered all the evidence, however, the Tribunal is satisfied that, whilst the 'roll-over' system was acceptable to the respondents, it had to be extremely carefully controlled by the executive in charge and, in particular, the financial reliability of the client would have to be without question."

19. The tribunal then reviewed the meetings and disciplinary hearings which I have already summarised, and the appeal which was dismissed, and came to the crux of their decision in paragraphs 18 and 19:

"18. The Tribunal was therefore satisfied that the reason for the applicant's dismissal was that he permitted a situation to arise in which clients of the respondents lost in the region of £500,000 when he should have ensured that those clients were in a financial position to stand such losses and further to have ensured that the respondents themselves would not be at risk in respect of such losses. The Tribunal has to have regard to the amount of money involved and the position of the respondents had they continued to employ the applicant after such a disastrous event.

19. The Tribunal accepts that the applicant had no personal interest financially in the exercises that he undertook. In one sense it was a series of misguided errors of judgment on his part which could be said to amount to gross incompetence or capability. On the other hand, the Tribunal is satisfied that the applicant did what he did with full knowledge of the potential consequences and was therefore at the very least reckless in his behaviour. In those circumstances, the Tribunal concludes that the category of reason for dismissal having regard to the provisions of Section 98(2) of the Employment Rights Act 1996 was conduct."

20. The tribunal went on to conclude that, having regard to all the circumstances including the seniority of his position, the discretion that he was allowed in the conduct of operations on behalf of clients, the magnitude of the losses and potential losses involved and the apparent lack of remorse or acceptance, he had acted in a totally unacceptable and reckless way. The tribunal unanimously agreed that the decision to dismiss him was within the band of reasonable responses from a fair employer.
21. Mr. Towler then appealed against that decision to the Employment Appeal Tribunal. It is important to mention at this stage the limits on an appeal against the decision of an employment tribunal. Under the relevant provisions of section 21 of the Employment Tribunals Act 1996, the Employment Appeal Tribunal can only interfere with the decision of the Employment Tribunal where there has been a misdirection in law, where there has been no evidence to support a particular conclusion or finding of fact or where the decision of the Employment Tribunal was perverse in the sense that it was one which no reasonable tribunal, properly directing itself on the law, could have reached. There must, in brief, be a question of law arising from the decision of or the proceedings in the Employment Tribunal. There is no re-hearing before the Employment Appeal Tribunal of the evidence and no appeal against questions of fact.
22. It is also relevant to have regard to the provisions of section 98 of the Employment Rights Act 1996, which provides as follows:

"(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 a reason falling within subsection (2) or for some other substantial reason of a kind justifying the dismissal ...

(2) a reason falls within this subsection if it-- (a) relates to the capability or qualifications of the employee...

(b) relates to the conduct of the employee

...

(4) 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 ... the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and

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

23. As Mr. Kibling, who appears on behalf of HCL, reminded the court, the proper approach in dealing with a case of dismissal for misconduct is laid down by the case of British Home Stores v. Birchell [1980] ICR 303 when it was held that, in determining whether an employer has dismissed the employee fairly in a conduct case, the employer must show that it had a reasonable suspicion amounting to a belief in the guilt of the employee in relation to that misconduct at the time of the dismissal, that its belief was based on reasonable grounds and that it carried out as much investigation into the matter as was reasonable.
24. Mr. Kibling also reminded the court of the decision of the Court of Appeal in Abernethy v. Mott Hay & Anderson [1974] I.C.R. 323, that in determining the reason for the dismissal of an employee, reference is made to the facts which are known to the employer or to beliefs held by him which caused the employer to dismiss the employee.
25. The question of what was the reason for the dismissal is a question of fact and therefore a matter for the Employment Tribunal, having heard the evidence.
26. The matter was heard by the Employment Appeal Tribunal on 11th and 19th December 2000. It should be noted that during the course of the interlocutory proceedings in the Employment Appeal Tribunal two orders were made requiring the chairman to provide further information to the Appeal Tribunal. One order was made by Judge Peter Clark on 1st March 2000, dealing with certain matters raised in the amended notice of appeal. A further order was made by the President of the Appeal Tribunal, Mr. Justice Lindsay, on 28th November 2000, ordering the chairman to produce notes of evidence by reference to paragraph 18 of the Employment Tribunal decision.
27. The judgment of the Appeal Tribunal, where Mr. Towler again appeared in person, was given by his Honour Judge Altman. The decision of the tribunal was that the appeal should be allowed, and an order was made that the matter be remitted for rehearing by a differently constituted Employment Tribunal in accordance with the judgment of the Employment Appeal Tribunal.
28. Bearing in mind the limited jurisdiction of the Employment Appeal Tribunal on hearing appeals, I turn to a number of passages in the judgment of his Honour Judge Altman. He says, in paragraph 7 of the judgment:

"The Employment Tribunal, in a way to which we turn later, focused on the allegation that the Appellant exposed his employers to risk by permitting certain clients to invest in a way which might lead them to be unable to pay their debt to the Respondents. The extent to which that was serious seems to us to have been judged by the Tribunal, in relation to the financial implications in fact and not just in terms of the risk of such loss. We were also told about the 'to buy' recommendations of the Respondents. It is the action of the Appellant in facilitating the purchase of shares by clients and the consequential potential loss to his employers for which he was later criticised."

29. Paragraph 18 of the extended reasons is then quoted. I shall not repeat it, having quoted it earlier. Judge Altman goes on to say this:

"In a way that we will seek to expand upon in due course, having read that paragraph we are left asking ourselves, 'Did the Tribunal conclude that there was in fact a disastrous event that caused loss or simply a risk of loss? Did the Tribunal conclude that the appellant was dismissed for providing a bad service to clients in permitting them to lose money when they could not afford to do so? And when the Employment Tribunal described the conduct of the Appellant for which he was dismissed as the 'permitting' of a situation, what is it that he actually alleged to have done to constitute such permitting?"

30. Following a detailed review of the events leading up to the decision to dismiss Mr. Towler and the unsuccessful internal appeal, the Appeal Tribunal returned to this theme in paragraph 13, where this is stated:
31. "The respondents' complaints appear to have related to 2 matters - first, the appellant's alleged incompetence or lack of diligence in advising his clients to buy, or not to sell, and secondly his failing to be alive to the poor financial circumstances of some of his client whilst conducting roll-over transactions for them and thereby putting them in an 'open' position. These complaints were treated as gross misconduct calling for dismissal because of the breaches of the SFA principles governing the actions of individuals, the term is to trust and confidence, and the obligation to act with due diligence and competence. It was these breaches, based on the two items explored in the disciplinary meeting, that appear to have been expressed as the reason for dismissal. There was little reference in this to actual financial loss. The Respondents may well have considered that the consequence of these breaches was such loss, or the risk of such loss, although it may well be - as the third finding on the appeal indicated - that it was not thought that the actions of the Appellant was the cause - or the sole cause of the losses. In any event in expressing the reason for dismissal the Respondents appear not to have relied on any losses or risk of losses, but rather on the way in which the Appellant was performing his duties in relation to the standards expected of him."
32. Turning to paragraph 23(a) of the judgment, Judge Altman summarised the features relevant to the determination of the appeal. In particular, he said at page 23A:

"The Respondents gave 2 reasons, set out in more detail elsewhere in this judgment but referring to first, the lack of diligence and capability in advice to clients over Magnum Power and secondly the lack of knowledge of the clients' finances when conducting roll-over, and forming the breaches leading to dismissal. The Employment Tribunal, in finding the reason in paragraph 18 make no reference to the first of these as forming part of the reasons for dismissal."

33. Finally, in paragraph 24, which expresses the crucial part of the conclusions of the Appeal Tribunal, this is said:

"We do find, doing the best we can on the face of the material before us, that there does appear to be a mis-match between the way in which the Employment Tribunal expressed the reasons for dismissal and the way in which the Respondents themselves were doing so. Also, within the decision itself the Tribunal appears to be forming their own judgments in ascertaining the reason for dismissal as to actual losses to both clients and respondents as caused by the Appellant and which were not part of the reasoning of the respondents."

34. In paragraph 25, they returned to the questions posed at the outset of the judgment and said that there seemed to be questions that point to the difficulty that the tribunal encountered in ascertaining from the decision of the tribunal the real reason for the dismissal. They said:

"We are left uncertain as to where the facts of this case fitted the distinction between an actual loss and the risk of loss."

35. And so the tribunal concluded in paragraph 28 that the Employment Tribunal had erred in this case when assessing the reason for dismissal in departing from what appears to have been the reason of the respondents for the dismissal; and it is said that the tribunal did not appear to have applied the reasons of HCL for dismissal to the question whether the respondents were reasonable in treating it as a reason for dismissal. They stated:

"In particular, they do not appear to have considered the extent to which it was the respondents' case that there was any actual loss caused by the applicant, but rather to have expressed their view in one part that there was, stating in paragraph 20 that one of the factors they take into account is 'the magnitude of the losses'."

36. While adding that this was a difficult case, handled by a very experienced tribunal, the Appeal Tribunal concluded that the Employment Tribunal do not appear to have asked the question: "What was the respondent's reason for dismissal?" but rather: "What do we consider was the reason for dismissal".
37. Mr. Towler, in his submissions, sought to defend the conclusion of the Appeal Tribunal allowing his appeal. He developed a number of points in his oral submissions which supplemented his detailed written submissions. One finds in his written submissions and in his oral submissions reiteration of a number of basic points which he had made to his employers, HCL, and which he had made to both the Employment Tribunal and the Employment Appeal Tribunal.
38. A recurrent theme of Mr. Towler's submissions was that there had been no specific breaches established of any rules and there had been no specific details provided about roll-over transactions. He says he was never charged with anything specific enough regarding particular dealings. He denied that he had ever recommended or encouraged roll-over in transactions by clients. He said that no complaints had been received on any of the 720 accounts which he handled. He said that the allegations which he had made in respect of the reasons for his dismissal had not been properly investigated by the Employment Tribunal.
39. Mr. Towler dealt in some detail with the case of the client Mr. East-Rigby. Mr. Towler said that it was not for him to stop him dealing or entering into transactions. He said that Mr. East-Rigby had always paid in respect of losses in the past. He accused HCL of not having attempted to recover losses from him in respect of the Magnum transactions, which he contended could have been recovered by selling shares held by Mr. East-Rigby in a PEP scheme administered by HCL. He said that it had never been established in the Employment Tribunal by any evidence that he, Mr. Towler, was responsible for the "chasing of losses" referred to in the extended reasons. He said that, in all the circumstances, the Employment Tribunal had erred in their handling of his case and the matter should be remitted to a fresh tribunal, as ordered by the Appeal Tribunal.
40. Mr. Kibling has persuaded me in his submissions that this is a case in which the Employment Appeal Tribunal have impermissibly overstepped the limits of their power to intervene in decisions of employment tribunals. Boiled down to its essentials, although the question has arisen in a rather unfamiliar setting, this is a simple case. Although Judge Altman gave a lengthy and detailed exposition of the facts of the case and the legal reasoning, the error which was alleged to have been identified came down to a question of the principal reason for the dismissal of Mr. Towler. On that, I have no doubt that the Employment Tribunal were entitled to find that the reason was as stated in their extended reasons at paragraph 18, which refers back to their findings of fact in paragraphs 11 and 12 of the extended reasons.
41. I am satisfied by the evidence referred to by Mr. Kibling, in particular documenting the events which took place at the disciplinary hearing. In the documents notifying the matters to be dealt with at the disciplinary hearing and in the decision, there is to be found the basis of the principal reason for the dismissal of Mr. Towler. The elements mentioned in paragraph 18 of the extended reasons are to be found in the documents leading up to the dismissal of Mr. Towler: references, in particular, to the importance of the financial situation of clients, to the extended credit for the purchasing of Magnum shares, to the financial risks involved in exposing all concerned by such dealings, to the continuing purchases of Magnum shares that took place amounting to chasing of losses, and in particular to the operation of the roll-over system and the importance in relation to that of the reliability of the clients' financial situations.
42. I would emphasise that, in my judgment, this is not a case in which an employer has sought, at an employment tribunal, to offer a new or different or additional reason for a dismissal which he has already effected. The elements which I have identified as composing the reason found by the Employment Tribunal are all to be found (though not, it is true, expressed as such in a single formulated statement of the reasons) in the matters that were discussed at the disciplinary hearings and meetings and in the decision of HCL to dismiss Mr. Towler.
43. For those reasons, I have reached the conclusion that the Employment Appeal Tribunal were not entitled to interfere with the decision of the Employment Tribunal. There was no error of law in it. The Employment Tribunal made a finding of fact as to the principal reason which was open to them on the materials before them, and the Employment Appeal Tribunal had no jurisdiction to interfere with that finding.
44. I would allow this appeal, from which it would follow that Mr. Towler's application for unfair dismissal remains dismissed.
45. As to Mr. Towler's application for permission to appeal against the refusal of the review by the Employment Appeal Tribunal, the matter is no longer a live issue, since the Employment Appeal Tribunal had no ground on which to interfere with the decision of the Employment Tribunal. I would also add that the refusal of the review was a matter well within the exercise of the Employment Appeal Tribunal's discretion. I would take a great deal of persuading that it was a proper subject for the grant of permission in the absence of any sound argument that there had been an error of principle on the part of the Employment Appeal Tribunal in refusing the review.
46. In brief, I would allow the appeal and refuse the application for permission to appeal against the refusal of the review.
47. LADY JUSTICE HALE: I agree.
48. LORD JUSTICE PILL: I agree.
49. In Meek v. Birmingham District Council [1987] IRLR 250 at 251 Bingham L.J. stated:

"It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of refined legal draughtsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons which have lead them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises..."

50. I would accept that the extended reasons of the Employment Tribunal in this case are open to adverse comment on the grounds of their brevity when providing the story outline, factual conclusions and reasons on the central issue of whether the respondent's conduct justified summary dismissal. The case against the appellant was dealt with succinctly, and avowedly so, the statement of facts being accompanied by expressions including "suffice it to say" and "to cut a long story short". Events which the tribunal described as "a debacle" and as "horrendous" are described only briefly. I am far from encouraging prolixity but in this particular case a fuller statement of the contentions of these parties and findings of fact would, in my view, have been desirable.
51. It may have been the brevity of the findings which gave rise to the orders of the Employment Appeal Tribunal on 1st March 2000 and 28th November 2000 inviting, in the first instance, further comments from the chairman of the tribunal and, in the second, notes of evidence in relation to one part of the Tribunal's findings. It may be that the brevity of the extended reasons encouraged the EAT to embark upon an exercise which, in full agreement with Lord Justice Mummery, I find to have been entirely inappropriate. This is a case in which a fuller statement of reasons might well have precluded that error by the EAT.
52. For the appellants Mr. Kibling has, however, referred us to the material which was before the Employment Tribunal on the central issue, and Lord Justice Mummery has referred to some of it. Mr. Towler, who has appeared in person, has submitted that there was no evidence before the Tribunal to justify the conclusion they reached. There was no evidence of errors or breaches of rules by him, he submitted. His conduct as an employee of the appellants had never been questioned. His conduct in relation to a client, Mr. East-Rigby, was appropriate and was approved by his employers.
53. Before this court, in addition to his submission that there was no evidence before the Employment Tribunal, Mr. Towler is essentially seeking to re-argue issues of fact which had been for determination by that Tribunal as the tribunal of fact. He had given oral evidence before the Tribunal and it appears from a solicitor's attendance note that he was cross-examined on his oral evidence.
54. The Employment Tribunal made a clear finding of fact on the central issue. Before they did so, albeit in a single sentence, the argument of the respondent on the important question of roll-over was set out:

"The Tribunal heard evidence from the applicant [that is, the present respondent] that the use of the 'roll-over' system was relatively commonplace within the respondent organisation, was known to take place and was impliedly if not expressly authorised by it."

55. He has now at much greater length developed that argument, but essentially the arguments now put forward are those succinctly summarised in that sentence in the reasons of the Employment Tribunal. Having set out his arguments, the Tribunal reached a conclusion favourable to the appellants, as cited by Lord Justice Mummery, in paragraph 12 of the extended reasons.
56. I have come to the conclusion that, on the material before them, the Employment Tribunal were entitled to reach the overall conclusion they did and that it was sufficiently reasoned. The test in Meek was met. I respectfully disagree with the EAT's view that there is a mismatch between the Employment Tribunal's findings in paragraph 18 of their extended reasons and those in paragraph 20, for the reasons given by Lord Justice Mummery. The Employment Tribunal were throughout considering the responses of the employer to the employee's conduct. No error of law by the Employment Tribunal has been established.
57. It follows that I agree with Lord Justice Mummery that the appeal from the decision of the Employment Appeal Tribunal shall be allowed and the decision of the Employment Tribunal shall stand. I also agree with Lord Justice Mummery with respect to Mr. Towler's own application before this court.
ORDER: Appeal allowed; costs order in favour of the appellant, to be taxed if not agreed. (ORDER NOT PART OF APPROVED JUDGMENT) _________