Appeal No. EAT/145/93

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 15 November 1993

	Before

	THE HONOURABLE MR JUSTICE MUMMERY (P)

	MR R H PHIPPS

	MRS P TURNER OBE

CO-OPERATIVE RETAIL SERVICES LTD	APPELLANTS

MISS S D LUCAS	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MISS J WOODWARD
(OF COUNSEL)
Messrs Croftons
Solicitors
Television House
Mount Street
Manchester M2 5FA

For the Respondent	MR D BROWN
(OF COUNSEL)
Ms Kate O'Neill
Legal Officer
USDAW
188 Wilmslow Road
Fallowfield
Manchester M14 6LJ

	MR JUSTICE MUMMERY (P):  This is an appeal by Co-operative Retail Services Ltd (CRS) against a decision of the Industrial Tribunal held at Southampton on 25 June and 17 November 1992.  The Tribunal heard a complaint by Miss Lucas, who was formerly employed in a managerial position at the Boscombe store branch in Bournemouth, that she had been unfairly dismissed from her position.  The Tribunal held that she had been unfairly dismissed and awarded her compensation of £5,287.50.

	The facts which gave rise to the complaint are that from about November 1981 to 2 August 1991 Miss Lucas had worked in a number of managerial positions, most recently at the Boscombe store as a textile manageress, and successfully under no less than seven managers.  A new manager arrived in February 1991, a Mr Moore.  Shortly after his arrival complaints began to be made about Miss Lucas' performance in her managerial position.  There were complaints about her performance in dealing with sales and paperwork and her  general inability to manage.

	On 27 June a disciplinary hearing was held.  It was conducted by Mr Moore.  Criticisms were made at the hearing about Miss Lucas' performance.  Miss Lucas was not represented.  She had declined union representation.  The importance of that hearing in this appeal is that on 1 July a final written warning was given in these terms:

		"Dear Miss Lucas

		I am writing to confirm the final written warning issued to you by Mr R H Moore, Store Manager following the disciplinary meeting on 27 June 1991 at which you declined to be represented.

		The reason for this written warning is your failure to carry out instructions over a number of weeks directly concerned with managing your Department.

		Should further unacceptable conduct occur within the next 52 weeks you will render yourself liable to further disciplinary action which may result in your dismissal from CRS."

	Miss Lucas was informed that she had a right of appeal.  She did not avail herself of the right of appeal.

	There was a further disciplinary hearing on 2 August 1991 when Miss Lucas was represented.  Several matters were brought up at that disciplinary hearing in addition to the circumstances in which the final written warning had been issued.  The upshot of the hearing was that a decision was made to dismiss Miss Lucas.  A letter was written on 5 August confirming the decision of the disciplinary hearing at which Miss Lucas had been represented; that she was to be contractually dismissed and the reason given for the dismissal was her conduct in the position of manager in relation to three matters which I shall describe later.

	Miss Lucas unsuccessfully appealed against that decision on 9 September.  Miss Lucas then issued a Notice of Application to the Industrial Tribunal.  In her application she complained she had been unfairly dismissed, alleging that there had been no warnings and that the three reasons given for her dismissal were all trivial.

	In the Appearance by the CRS reference was made to the fact that she had received a final written warning relating to her conduct on 1 July for failing to carry out instructions, that she had not appealed that and that during July 1991 she had committed various acts which had led to the disciplinary hearing on 2 August and the decision to dismiss her.  It was asserted at that hearing she had not given a satisfactory explanation for her conduct and the decision to dismiss her took account of the final written warning.

	It was accepted before the Industrial Tribunal, as it was before this Appeal Tribunal, that the three incidents which had led to the disciplinary hearing on 2 August were not in themselves a justification for disciplinary action, let alone dismissal.  It is said in paragraph 28 of the Tribunal's decision that the CRS accepted that the incidents did not justify disciplinary action and that no reasonable employer would have dismissed the applicant for those three incidents alone.

	The three incidents in question are these.  The first was that there had been a visit to the Boscombe store on 18 July 1992 by Mr Lloyd, the National Merchandise Manager of the CRS from Manchester.  Miss Lucas had been asked the day before by Mr Moore to get the department tidy for the following day.  She had not complied with his instruction which had required her to stay behind to prepare for that visit.  In fact, by getting in early in the morning she and her staff got the department ready for the visit later that day by Mr Lloyd.

	The second incident was that, following a request from Mr Moore to return a trading standards form within a specified time, she had failed to comply with that deadline.  She was late in submitting it, but it was finally submitted.

	The third incident was an altercation between a section leader in Miss Lucas' department, Mr Crankshaw, on 30 July during which Miss Lucas swore at him.  In relation to that incident Mr Crankshaw later gave an apology for being brusque.

	It appears that what really mattered before the Industrial Tribunal and what really matters on this appeal is the final written warning.  The Tribunal went into some detail in its decision on this point.  It seems unfortunate to us that, in going into that detail, the Tribunal did not have the benefit of evidence from either side about the procedures operated by the CRS in relation to warnings.  All that it was told was quite brief, as recorded in paragraph 13 of the Decision:

		"...that its procedure (which was not produced to us) provided for oral warnings, a written warning and a final written warning before dismissal."

No further details are contained in the decision.  No further evidence was given before us about the details of the procedure.

	The conclusion of the Industrial Tribunal was that no reasonable employer would have dealt with the matters raised on 27 June by way of a final written warning.  The consequence of that conclusion was that, when the Tribunal came to consider its decision on the complaint of Miss Lucas, it disregarded the final written warning.  That only left it with the three incidents which, it was accepted, would not justify any reasonable employer in taking action for dismissal.  The crucial question on this appeal is whether the Industrial Tribunal misdirected itself in law or acted in the face of uncontradicted contrary evidence or in the absence of any evidence in coming to its conclusion about the final written warning.

	Miss Woodward has presented an able argument to the Tribunal.  We hope she will forgive us if we do not deal with every detail of the argument.  We will deal with those parts which seem crucial to the disposition of this appeal.  She made two main submissions.  The first was that the Tribunal had misdirected itself in law, because it appeared from the language of various parts of the decision that what the Tribunal had done was to substitute its own decision on the question whether Miss Lucas had been guilty of misconduct such as to justify the final written warning, when what it should have done was to consider the question whether the CRS could reasonably conclude that she had been guilty of misconduct.

	We are not convinced that there was any such misdirection on the part of the Tribunal.  It is true that, taken in isolation, there are passages which suggest that the Tribunal may have been seduced into an exercise of substitution which is not permissible.  At the end of paragraph 11 of its decision it said:

		"On the evidence that we heard we are far from satisfied that the other complaints raised against the applicant can be substantiated as being matters where the applicant was at fault."

At the end of paragraph 13 of the decision the Tribunal said:

		"On the evidence we heard we were far from satisfied that the complaints were of such a nature that they warranted a final written warning."

	It is, however, quite clear from other passages in the Tribunal's decision, in particular paragraph 12 (the last sentence) and paragraphs 25 and 26 that the Tribunal was well aware of its correct legal role.

	In paragraph 12 the Tribunal said:

		"We are, however, quite clear that on the evidence we have heard that no reasonable employer would have dealt with these matters by way of a final written warning which is what in fact the respondent did."

and in paragraphs 25 and 26 it is common ground that the Tribunal correctly directed itself as to the law, in particular in saying this at paragraph 26:

		"We then have to consider whether or not the respondent has acted reasonably in all the circumstances in dismissing the applicant.  The test is contained in Section 57(3) of the Employment Protection (Consolidation) Act 1978.  The test is contained in that Section and nowhere else.  In deciding whether or not the respondent acted reasonably or unreasonably, we have to consider what a reasonable employer in that line of business would have done.  We are not entitled to substitute our own view for that of the respondent."

It then stated at the beginning of paragraph 27:

		"We are satisfied that no reasonable employer would have imposed a final written warning on the applicant in the circumstances in which this particular employer did."

	We find there that there is no misdirection.  There was a refinement of this argument which formed an important part of Miss Woodward's submission.  That was based on the law as stated by the Employment Appeal Tribunal in Stein v Associated Dairies Ltd [1982] IRLR 447, a case in which an industrial tribunal had to consider the circumstances in which a warning had been given.  The approach of the tribunal in that case received approval of the Court of Appeal in the case of Tower Hamlets Health Authority v Anthony 1989 IRLR 394 at page 395.

	The facts of the Stein case are significantly different from this, but there are two passages of application generally to the case in which a tribunal is required to consider the circumstances in which a final warning has been given by an employer.  Two points were made clear in Lord McDonald's judgment in the Stein case.  The first was that, as a general rule, it is not the function of the Industrial Tribunal to sit in judgment upon the matter whether a final warning should have been given or not.  It is Miss Woodward's submission that that general rule was breached by the Industrial Tribunal in this case, that what in fact it did was to sit in judgment on whether the final written warning should have been given.

	There is, however, an important qualification to that general rule.  The Tribunal is entitled to satisfy itself that that final warning was issued in good faith and that there were prima facie grounds for following the procedure of a final warning.  That appears from paragraph 6 of the Stein case.  There is an important passage in paragraph 8 where Lord McDonald said:

		"Certainly if there was anything to suggest that the warning had been issued for an oblique motive or if it was manifestly inappropriate that is a matter which a Tribunal could take into account."

	If a Tribunal is entitled to take into account the matter whether a final warning has been given in "manifestly inappropriate" circumstances or without prima facie grounds, the Tribunal must consider the factual background to and the circumstances in which the final warning was given, including the employers' own procedures for the issuing of oral warnings, written warnings and final warnings.  

	We have considered Miss Woodward's submission that the Tribunal sat in judgment on a question that it should not have sat in judgment on and that it trespassed beyond the permissible functions in the Stein case into an area that it was not permitted to enter.  We reject her submission.  We have looked at the Notes of Evidence, in particular at the passages in the Chairman's Notes relied on by Miss Woodward which show that Mr Moore gave evidence to the Tribunal in more forthright terms than the evidence referred to in the decision. 

	Miss Woodward referred in particular to one passage in the decision and to one passage in the Notes of Evidence.  She referred to paragraph 8 of the decision which said:

		"A number of matters were raised by Mr Moore with the applicant prior to 27 June 1991.  There were discussions about stock, staff and sales.  We are entirely satisfied that those matters were ones which we would expect to be raised by a manager with his subordinates in the ordinary course of running a business."

	Miss Woodward contrasts with that the note made by the Chairman which she submits must have been ignored when the Tribunal came to make that statement of the factual position in paragraph 8.  

	In the Chairman's Notes of Mr Moore's evidence there is a passage which deals with the views that Mr Moore had formed about Miss Lucas' conduct.  The note records that he thought she seemed incapable of carrying out anything requested of her, that he thought there was misconduct on the part of Miss Lucas and that she was able to carry out instructions but was doing it deliberately; she was not carrying out those instructions, though he did not know why she did not do it.  The note records that he asked her on a number of occasions why she had not done things which she said she would do.

	That passage was also relied upon in an overlapping submission of Miss Woodward that the decision of the Tribunal was perverse.  She relied on a number of other passages in relation to the incidents mentioned to show that the Tribunal had not dealt with the matter in its decision in a way in which it should have done if it had carefully regarded the evidence before it.  

	We have come to the conclusion on a careful consideration of all her submissions and of the passages in the evidence that the Tribunal was entitled to consider the circumstances in which the final written warning was issued.  The Tribunal was entitled to look into the facts in order to see whether there were prima facie grounds for issuing it and whether the issuing of it was or was not a manifestly inappropriate way of responding to Miss Lucas' conduct, as related by Mr Moore to the Tribunal.  It is our conclusion that the Tribunal was entitled to come to the conclusion on that evidence that the issuing of a final written warning was not an appropriate response of a reasonable employer to the circumstances which existed at the disciplinary hearing on 27 June.

	A decision of an Industrial Tribunal that it was not an appropriate response or that there were not prima facie grounds for adopting that particular procedure is, in our view, a decision on the facts.  It is not a decision of law.  It is not a decision which we can interfere with unless satisfied that no reasonable Tribunal could have formed that view.  We find that it was open to the Tribunal to form such a view about the final written warning.  There are a number of other detailed points canvassed both by Mr Woodward and by Mr Brown on behalf of Miss Lucas.  We do not find it necessary to go into the details of those since a decision on those other points will not affect the result of this appeal.

	For the reasons which we have given this appeal will be dismissed.  I should mention finally that the amount of compensation awarded by the Tribunal to Miss Lucas was reduced by the Tribunal by  25% on account of her contribution to her dismissal.  There has been no cross-appeal against that decision.  The decision of the Industrial Tribunal will therefore remain undisturbed.