Appeal No. EAT/903/92

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 8 July 1994
	Judgment delivered on 18 November 1994

	Before

	HIS HONOUR JUDGE J HULL QC

	MRS T MARSLAND 

	MISS C HOLROYD  

ASSOCIATED NEWSPAPERS LTD	APPELLANTS

MR A REYNOLDS	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR N UNDERHILL
(QUEENS COUNSEL)
Messrs Farrer & Co
66 Lincolns Inn Fields
London WC2A 3LH

For the Respondent	MISS J EADY
(OF COUNSEL)
Messrs Robin Thompson &
Partners
Wentworth House
Eastern Avenue
Gants Hill
Essex  IG2 6NH

	JUDGE HULL QC:  Mr Reynolds, the Respondent, who is now aged 27, was employed by the Appellant Company as a circulation clerk.  He joined the Company in 1985.  The Company publishes the Daily Mail newspaper.  Their circulation department is at Northcliffe House in Kensington, but at the material time Mr Reynolds was working as "night clerk" at their Surrey Quays printing works.

	The Appellants appeal to us against the decision of the Industrial Tribunal sitting at London (South) on 6 May and 1 July 1992 that they had unfairly dismissed Mr Reynolds, and further against the decision of the Industrial Tribunal that Mr Reynolds had by his conduct contributed to his dismissal so as to make a reduction in compensation of 30% just and equitable.  Mr Reynolds cross-appeals from the decision of the Industrial Tribunal said they did not consider it appropriate to order either reinstatement or re-engagement.

	On the morning of 30 September 1991 Mr Reynolds was completing a night shift at Surrey Quays and was responsible (among other duties) for dealing with telephone complaints.  Mr Shah, a newsagent in Bexleyheath, rang to complain about non-delivery of his copies of the Daily Mail.  According to Mr Reynolds, Mr Shah used foul and abusive language, and he admitted using foul and abusive language in reply.  Mr Shah claimed that Mr Reynolds called him a "black bastard", and complained the same day to Mr Newman, the circulation director, that he had suffered racial abuse.

	On the evening of 30 September 1991 Mr Reynolds had a telephone conversation with Mr Chandler, another circulation clerk.  According to Mr Chandler, Mr Reynolds admitted that in the conversation with Mr Shah he had said "Fuck off, you black bastard".  Mr Chandler discussed this with colleagues.

	Mr Newman asked Mr O'Neill, the operations manager, to investigate Mr Shah's complaint.  On Tuesday 1 October Mr Chandler told Mr O'Neill about his conversation with Mr Reynolds, and Mr O'Neill reported to Mr Newman, who saw Mr Reynolds.  Mr Reynolds denied having called Mr Shah a black bastard.

	On Wednesday 2 October Mr O'Neill called on Mr Shah in Bexley Heath.  Mr Shah confirmed his version of the telephone conversation with Mr Reynolds.  Mr O'Neill formed the opinion that Mr Shah was telling the truth and reported further to Mr Newman.

	On 3 October Mr Newman and Mr O'Neill saw Mr Reynolds again.  Mr Reynolds was accompanied by another circulation clerk, Mr Perry.

	Mr Perry had spoken to Mr Reynolds shortly before the telephone conversation between Mr Reynolds and Mr Chandler on 30 September:  according to Mr Perry, Mr Reynolds had denied calling Mr Shah a black bastard.  Mr Newman told Mr Reynolds that he was not satisfied with his explanation of events.  Mr Reynolds asked Mr Newman why he would not believe his side of the story, and Mr Newman replied that he was not prepared to discuss it at the moment.  There was no reference to Mr Chandler's evidence and Mr Perry said nothing about his conversation with Mr Reynolds, which had taken place at about the same time as the conversation with Mr Chandler.

	Mr Newman arranged a disciplinary meeting on 7 October.  Mr Reynolds was accompanied by another representative, Mr Donelan, the father of the chapel.  Also present were Mr O'Neill and Miss Kilbride, the personnel manager.  Mr O'Neill reported on his visit to Mr Shah, and when Mr Reynolds denied calling Mr Shah a black bastard Mr O'Neill announced for the first time "We have statements to that effect".  Mr Reynolds continued to deny using the expression and mentioned his telephone conversation with Mr Chandler; according to him he had told Chandler that he had not used the expression; he had only said "That he was meant to have called someone a black bastard".

	It was then made plain to Mr Reynolds that Mr Chandler's statement did indeed say that Mr Reynolds had admitted using the expression "black bastard".  Mr 0'Neill made the entirely incorrect statement that there were other statements from people who claimed that Mr Reynolds had admitted it - though when challenged by Mr Reynolds he conceded that these were statements about what Mr Chandler had told these people shortly after his telephone conversation with Mr Reynolds; not about conversations between the witnesses themselves and Mr Reynolds himself.

	Neither Mr Chandler nor Mr Perry appeared before Mr Newman nor was Mr Reynolds shown Mr Chandler's statement.  Mr Newman, relying on Mr Chandler's statement and what Mr Shah had said to Mr O'Neill, concluded that Mr Reynolds was not telling the truth, that he had indeed been guilty of using racial abuse to a customer, and that he should be dismissed for gross misconduct.

	Mr Reynolds appealed to Mr Hardy, the managing director.  Mr Hardy saw Mr Chandler and Mr 0'Neill, not in the presence of Mr Reynolds, and also saw Mr Reynolds, but he did not conduct a re-hearing.  He dismissed the appeal.

	The Industrial Tribunal concluded that Associated Newspapers had an honest belief that Mr Reynolds had called Mr Shah a black bastard and that this was a matter of serious concern, exacerbated by the high proportion of newsagents of Asian origin.  It was reasonable to regard it as gross misconduct justifying summary dismissal.  They continued:  

"16. The fairness or otherwise of the dismissal depends, in our view, upon whether the belief held by the Respondent that the Applicant used the offending words was based upon a reasonable investigation in all the circumstances, and whether the procedure followed in the course of the investigation was then fair and reasonable.  In judging both of these the criteria contained in Section 57(3) of the Employment Protection (Consolidation) Act 1978 provides the appropriate test.  We have been particularly concerned by the failure of the Respondent to disclose to the Applicant before the disciplinary hearing at which he was dismissed that important evidence had been obtained from Mr Chandler.  The transcript of the hearing shows that his name was mentioned only towards the end of the hearing.  Confronted as the Respondent was, on the one hand by an allegation by a customer who had no reason to make an unfounded charge against an employee, and on the other hand by a flat denial by an employee of seven years' service who had no previous disciplinary record and about whom there had been no similar complaints, the evidence of Mr Chandler was of manifest importance tipping, as it could do, the scales against the Applicant.

17.There was no reason to preserve the anonymity of Mr Chandler whose involvement in the incident had become common knowledge, nor was there any evidence of reluctance on the part of Mr Chandler to attend the disciplinary hearing or the appeal hearing although, naturally enough, he would have preferred not to have become involved.  Had he attended the disciplinary hearing he would have been questioned by the Applicant as to the correctness of his version of the conversation which they had held on the telephone on the evening of 30 September 1991.  The version of the conversation which the Applicant wished to put to him was that he had said he had been accused of calling Mr Shah "a black bastard" rather than that he had done so; this is, on the face of it, a reasonable and not improbable version.  The written statement by Mr Chandler, although undated, had been taken by the time of the disciplinary hearing and could have been produced.  It was accepted by the Applicant that he had heard from others of evidence given by Mr Chandler and it cannot be said, therefore, that he was taken entirely by surprise by the first reference to this evidence at the disciplinary hearing.  However, he did not know precisely what Mr Chandler had said and, moreover, it does not excuse the failure of the Respondent to give the Applicant the opportunity to ask questions of Mr Chandler.  The desirability providing a copy of a written statement is referred to in the Respondent's procedural manual.  Mr Hardy, who heard the appeal, conceded that the Respondent's procedures had not been properly followed although he was satisfied that everything that had been done was with honest intent.

18. Such a procedural defect is not necessarily fatal to a Respondent's case where the Applicant knows all that is being alleged and his own version is highly improbable (Fuller v Lloyds Bank plc (1991) IRLR 336 considered) but this is not, in our view, the circumstance in the present case.  There having been an investigation which led to an initial belief [that] there had been misconduct on the part of the Applicant, the subsequent dismissal procedure was not conducted so that the fairness of the procedure balanced this initial belief of misconduct, and that the dismissal was, therefore, not fair and reasonable having regard to the criteria in Section 57(3); Louies v Coventry Food & Seating Co Ltd (1990) ICR 54 applied; Linfood Cash & Carry Ltd v Thomson & Others (1989) ICR 518 considered).

	Mr Underhill, for the Appellants, made numerous criticisms of this part of the Industrial Tribunal's conclusions.  He said that fairness does require that an employee should know in advance every element in the evidence against him; Mr Reynolds had known before the hearing the substance of Mr Chandler's evidence.  There is no absolute obligation to give the employee a copy of the statements against him.  This was not a case in which any such obligation should be imported.

	Mr Underhill also complained of the Industrial Tribunal's finding that Mr Reynolds had been given no opportunity to cross-examine Mr Chandler; this was not a requirement of a fair hearing, and showed a legalistic approach by the Industrial Tribunal.

	We entirely accept the correctness of Mr Underhill's general propositions; clearly there is in general no absolute requirement that an employee should be given copies of all witness statements (provided he is clearly told about the important parts of what they contain); still less is there any general requirement that he should be entitled to confront and cross-examine witnesses, or that the disciplinary enquiry should be conducted in a forensic manner.  

	But we have no doubt that the Industrial Tribunal was fully entitled to conclude that this inquiry was conducted unfairly, as a matter of fact.  It was an essential part of Mr Newman's deliberations that Mr Reynolds had allegedly admitted calling Mr Shah a black bastard, in his telephone conversation with Mr Chandler on the very same day.  Clearly this admission must have been at the front of the case against Mr Reynolds.  But neither Mr Newman nor Mr O'Neill thought it right to tell Mr Reynolds about this part of the case until well into the disciplinary enquiry itself.  Mr O'Neill's statement at tab 2 of the bundle, page 18, is plainly wrong:

"We have the other evidence statements from people in the office who claim that Andy admitted it in a conversation with them."

This echoes another potentially misleading statement at page 11:

"P O'Neill:But did you call him a black bastard?"
A Reynolds:No.

P O'Neill:We have statements to that effect"

	Of course it is not our view that matters but that of the Industrial Tribunal.  They were no doubt assisted by the evidence given by Mr O'Neill (EAT bundle, page 40 onwards).

"I did not mention my conversation with Mr Chandler to the Applicant on Tuesday evening.  It might have been useful to mention it so the Applicant could take it up with Mr Chandler.  Having obtained the Applicant's account, the next thing was to speak to Mr Shah.  It was not until the middle of the disciplinary hearing that the Applicant was aware of Mr Chandler's evidence.  I agree the transcript shows I did not speak about it at the meeting on 3 October 1991, it must have been before the meeting... It would possibly have been fair to have mentioned the conversations with Mr Chandler, Mr Cherry and Mr Baxter.  A statement had then been obtained - I don't believe it was disclosed in the sense of being given to the Applicant."

At pages 43 and 44 Mr Hardy said:

"I was not aware whether there were written statements by Mr O'Neill, Mr Chandler and Mr Baxter which were given to the Applicant.  It is better to disclose statements and there was no intention to deprive the Applicant.  I did not think it necessary to enquire whether or at what stage the Applicant was aware of Mr Chandler's statement.  The procedure might well have been done better but it was done honestly."

At pages 45, 46 and 48 Mr Newman said:

[Concerning the meeting on 1 October]  "he denied using the words "black bastard".  What Mr Chandler said was not mentioned as I was still making initial enquiries...on Thursday at 5.00 pm.  I did not mention the allegation by Mr Chandler.  This was hard evidence which was better kept to a disciplinary hearing...  On 7 October 1991... I did not give Mr Chandler's written statement to the Applicant.  It is difficult to say why not.  Mr O'Neill was the source of information.  With hindsight the Applicant should have been given Mr Chandler's statement...  In hindsight it may not have been fair not to provide Mr Chandler's statement but the Applicant knew of the statement...

It was possible that no-one had put to Mr Chandler the possibility of misinterpretation and that he had just got it wrong.  Mr Perry was not questioned.

It was unfortunate that no investigation was carried out for 24 hours...  It was possible that Mr Chandler could have gone up the wrong alley but he never changed his statement."

	At the top of page 56 Mr Reynolds said:
"I was not told that statements had been made against me.  These were suddenly referred to.  I had no idea what was in the statements.  At the end of the hearing I was told I was being dismissed."

This almost unanimous agreement by the witnesses that the procedure was imperfect and perhaps unfair was ample material on which the Industrial Tribunal were entitled to act.  They were also entitled to act on a document disclosed by the Appellants, being apparently regarded as important guidance in disciplinary matters, at tab 1, page 25 of the agreed bundle:

"Secondly, if the facts are derived from statements by witnesses, these persons should, when practicable, attend the interview to repeat their evidence in the hearing of the employee.  They should not however sit in on the whole interview.  There may be circumstances in which an important witness - particularly if this is not an employee - is unwilling to attend.  It is important in such instances to obtain a written statement and to show this to the employee."

	Mr Underhill made various criticisms of matters of detail; for example he pointed out very justly that neither Mr Reynolds nor his representative asked to cross-examine the witnesses or to see their statements.  But it appears to us that in the passages which we have cited the Industrial Tribunal was addressing itself correctly to the question of the fairness of the disciplinary enquiry and was most certainly not insisting, on a legalistic basis, that witness statements should automatically be disclosed to the employee, or that the employee should have a right to cross-examine any adverse witness, or that any failure to observe these matters, or other desiderata, automatically led to the conclusion that the enquiry was unfair.  In our view the Industrial Tribunal were well entitled to reach the conclusion which they did, as a matter of law, and it takes the matter no further to say that a different Industrial Tribunal, or we ourselves, might have reached a different conclusion of fact.  We can detect no error of law.  This is not a perverse decision.  Mr Underhill's criticisms might have more force if Mr Reynolds had been offered the statements, or a chance to cross-examine the witnesses, and refused; we note that he and the father of the chapel were indeed active and effective in challenging Mr O'Neill and Mr Newman (tab 2, page 11 onwards) both of whom were of course present.
	
Contribution

	The Industrial Tribunal concluded their reasons as follows:

"19.  The Applicant accepted that he had abused Mr Shah and used improper language to a customer who had made valid complaints of late delivery of the newspaper.  Although there was not a direct contractual relationship between Mr Shah and the Respondent, it was accepted practice to treat retail newsagents in the same way as wholesale distributors and for obvious trade reasons.  The Applicant's response to the enquiries by Mr Shah, which we accept may themselves have been couched in intemperate language, may be explained partly by the fact that he was nearing the end of the shift and was tired, his patience tried by a difficult night and a series of complaints.  However, it was an important part of his job to give just such explanations as Mr Shah demanded of him and he was not unaccustomed to such enquiries or irate enquirers.  The point was made that he had received no training in telephone techniques and the way in which to deal with customers, but we were unable to see the relevance of this in relation to the use of bad language.  His use of bad language to a customer, whether or not there was provocation, was, we consider, conduct which contributed in part to his dismissal within the terms of Section 73(7)(B), so as to make a reduction in compensation, just and equitable and we have assessed this contribution at 30%."

	Concerning this, the Appellants made the following submissions.  We quote from Mr Underhill's Skeleton Argument:

"11.  The initial hearing - in accordance with usual practice post - Polkey - appears to have been concerned with liability only.  Accordingly it was immaterial whether Mr Reynolds actually did call Mr Shah a "black bastard", and no evidence was led, e.g. from Mr Shah or Mr Chandler, to show that he did; not was Mr Reynolds cross-examined on the issue.  If an attempt had been made to do so, it would have been liable to be ruled inadmissible.

12.  But on the remedies hearing (if A.N.'s primary appeal fails), the question whether Mr Reynolds actually was guilty will be highly material.  If the I.T. believe he was, they could and should award nil compensation on the basis that that would be just and equitable (see s.76 (1) of the 1978 Act) or by making a 100% deduction under s.76 (4) for contributory conduct - W Devis & Sons Ltd v Atkins [1977] ICR 662."

	There is an immediate difficulty that the Industrial Tribunal appear to have done precisely what the Appellants invited them to do.  Mr Underhill made the following footnote to his Skeleton Argument:

"A.N.'s solicitors' note of the hearing records that their counsel [Mr Gibson], at the very end of the hearing, asked them to "consider contrib. by AR without further discussion"; there was apparently no objection by Mr Reynolds's counsel.  That was a plain invitation to them to consider contribution on the basis of the evidence to date; but it was not a waiver of the right to adduce further evidence on the remedies hearing."

	Miss Eady, for Mr Reynolds, who was present at the hearing before the Industrial Tribunal, said that both she and Mr Gibson (they were appearing for the Appellants) dealt in their submissions with the question of contributory fault, possibly at the invitation of the Industrial Tribunal.  She submitted that the question "What difference would it have made if the Appellants had conducted their disciplinary enquiry impeccably?" would be considered at the compensation hearing.  She further submitted that the Industrial Tribunal had implicitly found that Mr Reynolds did not in fact use racial abuse.

	It appears to us to be entirely inappropriate to allow an appeal on the basis that the Industrial Tribunal have decided a matter which they were expressly invited to decide by both Counsel then appearing before them.  If the Industrial Tribunal should conclude, at the compensation hearing, that they should make a change to the percentage of contributory fault, it appears to us that they are fully entitled to do so, whether by reviewing their original decision on the basis that there has been a procedural mishap (and of course enlarging time as appropriate) or on the less formal basis that their decision is not complete and was indeed not intended to be, but was always subject to such further findings as might emerge at the compensation hearing; or by invoking the provisions of section 74 of the Employment Protection (Consolidation) Act 1978.

"(1) ...the amount of the compensatory award shall be such amount as the tribunal considers just and equitable in all the circumstances..."

(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..."

The Cross-Appeal
	Under section 68 of the Act it is provided:

"(1) Where on a complaint under section 67 an industrial tribunal finds that the grounds of the complaint are well-founded, it shall explain to the complainant what orders for reinstatement or re-engagement may be made under section 69 and in what circumstances they may be made, and shall ask him whether he wishes the tribunal to make such an order, and if he does express such a wish the tribunal may make an order under section 69."

	At the hearing, the only questions argued were liability and contributory fault. 

	In their short reasons the Industrial Tribunal said:

"6.  The Applicant's conduct contributed to his dismissal in that he acted contrary to the Respondent's business interest in using abusive language to a customer and we assess the extent of such contribution to be 30%.  We do not consider it appropriate to order either reinstatement or re-engagement in the circumstances set out above, but find that the applicant is entitled to compensation subject to a reduction under the provisions of section 73(7B) and also having regard to the provisions of section 74(1)."

	In their full reasons, however, the Industrial Tribunal did not deal at all with the questions of re-engagement or reinstatement.  In her Skeleton Argument Miss Eady dealt with this as follows:

"1.The IT's conclusion that an order for reinstatement or re-engagement would be appropriate is only set out in the summary reasons...  In the full reasons given, no mention is made of reinstatement/re-engagement:

To the extent that the summary reasons constitute a "decision", the failure to deal with  this point in the full reasons constitutes a flaw on the part of the IT which must be fatal to any "decision" reached on this question.

To the extent that the full reasons constitute the actual decision of the IT, there has been no finding on this point and the case should be remitted to the IT for a full hearing on remedies."

	Further and alternatively, Miss Eady contends that the Industrial Tribunal failed to give Mr Reynolds an opportunity to be heard on the issue of reinstatement or re-engagement, not withstanding that he had sought reinstatement when he applied to the Industrial Tribunal.  The requirements of section 68 were mandatory.

	Finally, she submitted that the Industrial Tribunal went too far in holding that it was not appropriate to consider the primary remedies of reinstatement or re-engagement where there had been a finding of 30% contributory fault.

	We find that the cross-appeal is not well-founded.  The terms of section 68 should not of course be overlooked by any Industrial Tribunal; but failure to observe them cannot automatically found a successful appeal - see Cowley v Manson Timber Ltd [1994] ICR 252, EAT.  An appeal on the ground that section 68 has not been expressly complied with should not be successful unless the Employment Appeal Tribunal can conclude that injustice has resulted or may have resulted.  Where the Applicant is represented by Counsel, it must be rare for an appeal to succeed because of any alleged failure of the Industrial Tribunal to give the explanations required by the section; Counsel and solicitors will be expected to explain these matters to their client before and (if necessary) during the hearing.  It must also be rare for Counsel to omit to address the Industrial Tribunal on the questions of re-engagement or reinstatement if the Applicant wants either remedy; unless it is made perfectly clear, and agreed by the Industrial Tribunal itself, that that matter is reserved to a later hearing.  It is the duty of Counsel, as well as the Industrial Tribunal, to make sure that there is no misunderstanding about this.  If there should be such a misunderstanding (and it appears that that is precisely what has happened here), then the obvious remedy is to apply forthwith to the Industrial Tribunal to review and re-open its decision on this part of the case and to receive argument.  We can see no absolute reason (hypothetically) why that should still not take place, although any application to review would of course be very much out of time.

	Quite apart from these considerations, however, it appears to us that the cross-appeal is completely unmeritorious.  We can see no reason why the full reasons and the short reasons should not be read together as being the reasons of the Industrial Tribunal, particularly where the short reasons deal with a matter on which the full reasons are silent.  It may very well be that the Industrial Tribunal, having dealt with the questions of reinstatement or re-engagement in their short reasons, felt that they had dealt sufficiently with that topic and that their full reasons should deal only with the matters which they understood were "live issues".  When the full reasons were promulgated on 27 October 1992 it was more than a year after Mr Reynolds' dismissal.  It is now more than 3 years after his dismissal.  The idea that an appeal on this part of the case might prove useful to Mr Reynolds seems to us (with great respect) to be fanciful.

	We dismiss both appeal and cross-appeal.