THE INDUSTRIAL TRIBUNALS 

CASE REF:  899/03	

CLAIMANT:	William Spiers Black		

RESPONDENT:	Shorts Bros Plc (Bombardier Aerospace)		

DECISION ON REMEDY

The unanimous decision of the tribunal is that the claimant having been unfairly dismissed, as recorded in the decision of this tribunal dated 5 June 2008, (hereinafter called “the tribunal’s first decision”), is entitled to compensation for this dismissal. This compensation will be agreed between the parties and in default of agreement will be adjudicated upon by the tribunal. Both the basic award and the compensatory award shall be reduced by one third as a result of the claimant’s conduct as described in this decision. 

Constitution of Tribunal:

Chairman:			Mr Cross		

Panel Members:		Mr Martin 
				Dr Eakin	

Appearances:

The claimant represented himself.

The respondent was represented by Mr Bloch of the Engineering Employers Federation.

The Evidence

1.	The tribunal heard the evidence of the claimant and Mr G.M. Greene FCA, on behalf of the claimant and Mr P.H. Kinney FCA and Mr S. Sittlington, on behalf of the respondent.

  Findings of Fact

2.	The facts and background information surrounding the dismissal of the claimant from his post as Production Manager in Montreal are set out in the tribunal’s first decision. After the dismissal of the claimant on 31 December 2002, the respondent continued with an investigation into certain allegations of fraud amongst subcontractors at the Montreal plant,  and at other locations in North America. This investigation had commenced in the summer of 2002, when information had come to the respondent which suggested that the claimant was submitting false and inflated time sheets to the respondent for payment.

3.	The investigations carried out by the respondent resulted in the matter being referred to the PSNI. The police appointed forensic accountants to assist them in their investigations. This culminated in a lengthy report prepared by Mr Kinney of Messrs PriceWaterhouseCoopers (“PWC”). This alleged, that inter alia, the claimant fraudulently conspired with a Mr Dennis Clarke, to fraudulently tamper with time sheets to over charge for work carried out by subcontractors under the control of the claimant.

4.	The respondent had, due to pressure of work and other difficulties in achieving certain standards on some contracts that were performed in Belfast, shipped unfinished aircraft fuselages to Canada for completion. A contract was entered into between the respondent and MPI Aviation Limited (“MPI”), under which MPI recruited teams of workers to work on the fuselages, as subcontractors and not as employees of the respondent. The claimant, as the senior Production Manager in Montreal was responsible for supervising their work and counter signing their time sheets to confirm to MPI and ultimately to the respondents, the hours worked on each fuselage.

5.	The claimant, who had been in the employment of the respondent since 1976, worked under a contract of employment dated 10 December 1999, which set out his responsibilities, which included, “to ensure cost period expenditure and operational performance of the programmes are in line and controlled within agreed budgets”. Another responsibility, included in his job description, was to “Ensure quality tools and techniques are applied in operations to establish robust processes that enable management and support services personnel to quickly pareto [solve] problems and focus efforts to eliminate waste and non value added activities in the shortest possible time frames.”

6.	The contract between the respondent and MPI did not allow MPI to assign or sub contract its responsibilities under the contract. However, despite this and unknown to the respondent, MPI formed a subcontract with a company (Nathan Air Inc), owned by Dennis Clarke which took on the task of recruiting and paying the sub contractors and then billing MPI, which in turn billed the respondent. The claimant denies that he knew of this sub-contract. It did not however really matter to him, as his duty was to check the time sheets produced to him and then forward them to MPI. This he continued to do after the unauthorised transfer of the MPI contract. MPI then sent the time sheets on to the respondent with the invoice requesting payment.

7.	The PWC report on this matter also highlighted the fact that certain monies had been paid between the claimant and Mr Clarke over a period of time, coinciding with the period of the alleged wrongful time sheets. The money involved was not a big sum, in fact there was more money paid to Mr Clarke than paid by him, but there was one cheque cashed in the relevant period which the claimant said was the repayment of a loan made to him by Mr Clarke. The repayment had been made by cheque some months previously, outside the relevant period, but not cashed by Mr Clarke, as he said that he had lost it and had to get the claimant to reissue the cheque. The tribunal accept that the cheque was dated within the relevant period but is not convinced that the first cheque was lost. It might have been intended that it would never be cashed and thus constitute a gift. The tribunal can make no decision as to the true position with regard to this fact. It does however demonstrate the problems that can arise, when an employee of a contracting party gets into a business situation with one of the senior employees in a sub contracting firm, or with the sub contractor himself, as proved to be the case here. It does leave the employee in the position of having to justify his financial dealing with the sub contractor.

8.	Other than the repayment of the loan with the lost cheque, the claimant was able to explain the various payments back and forth. Some were passed through Mr Clarke’s Canadian bank account, as the claimant said that that bank was easier to deal with in relation to foreign exchange than his own Bank and this was why he started to use that Bank for the purpose of foreign exchange. The claimant stated that his own Bank dealt in these matters with French language forms and the staff were less confident in dealing with payments to Northern Ireland.

9.	The specific allegations laid against the claimant in regard to the alleged fraud over the time records, were, that on a number of occasions, time details on completed forms were altered to give a worker credit for more time than he had in fact worked. Although extra hours were recorded on the sheets, the worker only got the money for the original hours that he had submitted and worked. The additional hours were collected by MPI on the altered sheets, which were signed as approved, either by the claimant, in his capacity as Production manager, or if he was not available by another person in the office. Other sheets were submitted for men, who were, on the week in question, on leave and consequently not in the plant at all.

10.	Two statements had been given to the investigation team, one by Maureen Cowie, an administrative assistant who worked with the claimant and the other by Laurel Carpenter who replaced Ms Cowie when she left the respondent’s employment. Both statements are dated early June 2003 and record how the claimant had told them to change time sheets by either marking up hours for particular men or to keep men on the time sheets and to claim certain hours for them, even though the men in question had been laid off earlier.

11.	The report stated that on an inspection of the time forms, 62.5% of them were signed off by the claimant. In his absence the remainder of the sheets were signed by other members of the respondent’s team working under the claimant.

12.	When the tribunal examined the evidence concerning the production of the time sheets there was a difference between the evidence of each side to this dispute. The respondent argued that the time figures were altered by the claimant or that at least he knew of their falsification. They cited the two statements made by his colleagues, referred to above and the fact that the work of transcribing the time from the document of first record, the daily staff list, was done on his computer. The final time sheet was then faxed to Dennis Clarke, with a backing sheet purporting to originate from the respondent, although the fax was not signed by him.  

13.	The claimant informed the tribunal that he was responsible for work at various sites in North America. He was based in Montreal but time records of work on other sites came onto his desk for processing as described above. In the words of the claimant, he could not possibly know the truth or otherwise of what he was signing. Furthermore he had on a number of occasions received telephone instructions from his line manager in Belfast, Mr Watty, from whom the tribunal heard on the first hearing as to the dismissal, but who did not give evidence at this hearing on compensation. These were telephone instructions from Mr Watty to the claimant  in the summer of 2002, which in Mr Watty’s own words, taken from his statement to the police, stated that he “advised William Black to balance the hours on the programmes as we were overspending on one project and underspending on another”. Without hearing from Mr Watty, the tribunal was left in the dark as to what exactly Mr Watty was suggesting should be done to balance the hours.

14.	 The tribunal heard from none of the senior employees of the respondent, and this has made it difficult for the tribunal to judge the disputed allegations of fraudulent alteration of documents and the involvement, if any, of the claimant in fraudulent or unauthorised alteration. The claimant does not deny that he signed all the sheets bearing his signature, but states that he had no way of checking the truth of the documents that he signed.

15.	The claimant stated that he simply did not have the systems, staff, or time, to check all the time records that he was asked to sign. He told the tribunal that he signed what was put in front of him, relying on what he now knows, was an insufficient system of monitoring the hours claimed. The claimant told the tribunal that there would have been ways to carry out proper monitoring of the workers time spent on each contract. The time clock stations at the parent company of the respondent in Canada, Bombardier, could have been used, as all the work was being carried out on Bombardier sites. The problem with this would have been that it would have alerted the parent company to the large amount of work that was being done on the fuselages in Canada and the respondents wanted to keep this whole operation low key and not make it appear to be such a big operation as it turned out to be. Alternatively, assistants could have been provided for the claimant, to check time spent and counter sign time sheets. However this also would have enlarged the scope and expense of this whole operation and alerted the parent company to the problems. No evidence was produced by the respondent to counter the claimant’s statements in this regard.

16.	 The claimant never complained to Mr Watty about the situation of control, or asked the respondent for better systems or more help. He never warned the respondent of the weakness of the system, which was made worse by the fact that he was based in Montreal and yet there was work being carried out in various other North American plants many miles away.

17.	Although the police investigation into the allegations of fraud involving time sheets commenced in the summer of 2002, after the respondent had made sufficient enquires to convince it that the police should be involved, concerning the claimant ordering changes to time sheets, which on the face of the evidence seemed to connect the claimant with the fraudulent activity; the claimant was not dismissed on the ground of fraud, but on the spurious ground of having a model of a hand grenade (a paperweight) on his desk in Montreal.

18.	The investigation of fraud was quite well advanced at the end of December 2002 when the claimant was dismissed. At his dismissal the fraud allegations were never put to him although they were referred to in Mr Wattty’s statement, which he read to the claimant on 31 December 2002. When the claimant appealed, the appeal process mentioned financial irregularities but as the investigation was still ongoing, no reference was made to that in the appeal decision, which reaffirmed the gross misconduct of having the hand grenade paperweight on his desk in a secure area.

19.	Criminal proceedings were brought in Northern Ireland against Mr Clarke, who pleaded guilty on 2 March 2007, to four counts of money laundering. The charges against the claimant were to remain on the books and were not proceeded with.

The Law

20.	If the tribunal decides not to grant a successful claimant his request for reinstatement or re-engagement, as was requested in this case, but as will be seen is refused by the tribunal, then the tribunal will award compensation, a basic award and a compensatory award  under Article 152 of The Employment Rights (Northern Ireland)  Order 1996, (hereinafter called “the Order”).

21.	The basic award can be reduced by the tribunal under Article 156(2) which states:- “(2) Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly.”

22.	The compensatory award can also be reduced. The wording used in Article 157(6), “Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.”
  
23.	Although the wording of the two Articles is different the courts have given an indication that in many cases it will be appropriate to make the same percentage reduction from each head of compensation. Mr Justice Holland in his decision in Charles Robertson Ltd v White [1995] ICR 349 stated as follows:-

“[Articles 156(2) and 157(6)]: a judgment made pursuant to the former subsection reflects factors that are materially different from those bearing upon a judgment made pursuant to the latter subsection, and visa versa. That said, the circumstances of any particular case may readily result in like reductions being made under both subsections.”

24.	The tribunal must decide whether the conduct of the claimant before his dismissal was of such a nature as to contribute to his dismissal. Harvey in Paragraph [2724] of Division DI, Unfair Dismissal, 18. Compensation states, that “a reduction for contributory fault can be made even where the employee’s action is unrelated to the principal reason for the dismissal.” Harvey goes on to cite the case of Robert Whiting Designs Ltd v Lamb [1978] ICR 89 in support of this proposition. The judgment of the English Employment Appeal Tribunal in this case includes these words:-

“The real reason for dismissal was not exclusive of all other matters and a bogus reason does not necessarily shut out the employer completely if there was material to support the reason relied upon. We conclude therefore that the employee’s conduct ought to be considered not only with reference to incompetence but also with reference to misconduct. In our view the weight to be given to the employee’s conduct ought to be decided in a broad common sense manner.”

25.	There are certain limitations on the tribunal’s discretion in this area to reduce compensation for contributory fault. The House of Lords in W. Devis & Sons Ltd v Atkins [1977] IRLR 314 held, that although a tribunal, may award no compensation if the subsequently discovered conduct of the claimant is such as to convince the tribunal that, on the just and equitable ground, the claimant is not worthy of any compensation; the tribunal may not reduce the compensation by a percentage for contributory fault if the misconduct was discovered after the dismissal. Secondly the employee’s conduct must have been to some degree blameworthy. This was defined by Sir Hugh Griffiths in Morrish v Henlys (Folkestone) Ltd [1973] IRLR 61 as:

“The concept does not in my view; necessarily involve any conduct of the complainant amounting to a breach of contract or a tort. It includes no doubt conduct of that kind. But it also includes conduct which, while not amounting to a breach of contract or a tort, is never the less perverse or foolish, or if I may use a colloquialism, bloody minded. It may also include action which though not meriting any of those more pejorative epithets, is never the less unreasonable in all the circumstances. I should not, however, go as far as to say that all unreasonable conduct is necessarily culpable or blameworthy; it must depend on the degree of unreasonableness involved.”

	DECISION

26.	The unanimous decision of the tribunal is that the conduct of the claimant after he went to Montreal was, to use the words of Sir Hugh Griffiths quoted above, perverse or foolish in some respects and possibly in breach of his contract in other respects. It was foolish of the claimant to become so closely involved with Mr Clarke, who was the employee of a contractor to the respondent and over which contract the claimant had direct responsibility for checking the performance of that contractor. Although there appear to be reasons for the close financial contact between the two men and there is no conclusive evidence of fraud on the part of the claimant.

27.	At the time that the respondent dismissed the claimant, it had evidence of the adjustments that were being made to the time records and had called in the police, who had appointed PWC in December 2002, just before the dismissal of the claimant. It is doubtful that at the time of dismissal of the claimant that the respondent had the full picture of the fraud in time sheet payment arrangements, as the report of PWC was not provided until March 2005. However the information that the respondent had was sufficient to justify the calling in of the police and had alerted the respondent to make enquiries concerning the arrangements for signing the sheets.  Mr Watty in his statement of dismissal, which he read to the claimant, mentioned the investigation and that the claimant appeared to be implicated.

28.	The tribunal also hold that the claimant failed in his duty to keep the respondent informed about the serious situation that was brewing in the respondent’s business in Montreal. The claimant was the senior person in that plant but by his own admission “would have signed any time sheet put in front of him”. He had no proper controls in place and not enough staff to watch contractors at several plants at the same time. The tribunal hold that the claimant was at fault, in not sending emails or letters to his superior, warning the respondent of the dire situation which had arisen. Indeed this failure could have been seen as a breach of the claimant’s contract with the respondent. The failure was certainly culpable.

29.	The tribunal also has the unchallenged evidence of the claimant that the respondent was in a state of some embarrassment over the necessity of having to send the partly completed fuselages to Canada for completion. The evidence was that the work in Canada was to be done as inexpensively as possible and with a minimum of Belfast staff present on the ground. There was also the statement of Mr Watty, that hours of subcontractors should be balanced, as some contracts were over spent whilst others were under spent. The tribunal is left with the strong impression that the claimant was sent to Montreal to administer a situation that was open to abuse and was given inadequate support to accomplish the task.

30.	The respondent asks the tribunal to award no compensation to the claimant as his conduct at the time before his dismissal, on another ground, was so dishonest that it would be unconscionable for him to leave his employment with any award at all. His behaviour would have justified summary dismissal had it been known to the respondent. However the conduct was known to some extent, or suspected, by the respondent. This was to a great extent known before the claimant’s dismissal. It was hinted at in Mr Watty’s dismissal discussion with the claimant on 31 December 2002. The respondent decided not to suspend the claimant and await the completion of the investigation, but to dismiss him on another ground. Now that that dismissal is ruled unfair the respondent calls in aid the circumstances surrounding the time sheet fraud  and asks the tribunal to award no compensation, as that would be just and equitable in the circumstances.

31.	However the tribunal is not weighing the claimant’s behaviour and the respondent’s response to it, as would happen in deciding the unfair dismissal case, to ascertain whether the respondent’s reaction was that of a reasonable employer. In such a case the employer only has to convince the tribunal that, on the balance of probabilities, the dismissal is fair and the response of the respondent is that of a reasonable employer. In this situation, of a claim by the respondent that no compensation should be paid, it is for the respondent employer to show that because of the just and equitable principle, the claimant should get nothing.

32.	In this case the tribunal hold that although the claimant was blameworthy in the situation in which he found himself in Montreal, for all the reasons set out above, the respondent must take a great deal of responsibility for the serious situation that arose with regard to the time sheets. For this reason and because the respondent had a suspicion of fraud, but was not able to implicate the claimant, even after the completion of the investigation and bearing in mind the claimant’s long service with the respondent, which appears to have counted for nothing in apportioning the benefit of any doubt, the tribunal hold that it would not be just and equitable to award no compensation.

33.	The tribunal holds that this is not a case where reinstatement or re-engagement is appropriate. The claimant was a senior manager in the respondent company and all trust and confidence between employer and employee has gone. The claimant, whilst not proved guilty of the charges made against him in the criminal court, did by his own admission do things, that to a reasonable employer, would appear to be blame worthy and he let down his employer in not alerting the respondent to the problems he faced in managing the sub contractors, which failure was at the root of this fraud. There is no guarantee that the respondent would have reacted in a supportive manner to such a warning, but a manager of the seniority of the respondent should have given his employer the required advice, even if only to adhere to his contract of employment.

34.	The tribunal, as mentioned above, does hold the claimant responsible for contributing to his own dismissal. He was blameworthy and for that reason the tribunal reduces his basic award and his compensatory award by one third. The tribunal hold that the respondent knew enough of the alleged fraud at the time of the dismissal to allow for a percentage reduction in the claimant’s compensation. Thus the rule in W Devis &Sons Ltd v Atkin, (that the employer must know of the blameworthy conduct before the dismissal on other grounds), is satisfied.  Furthermore interest is not awarded on the total sum, as it was proper that any criminal proceedings should be resolved before this hearing took place. 

35.	As agreed with the parties the tribunal leaves the amount of compensation payable to the claimant, to be calculated by the parties, with either party having the right to bring the matter back to the tribunal if agreement cannot be reached.      

Chairman:

Date and place of hearing: 15-18 December 2008, Belfast

Date decision recorded in register and issued to parties: