Appeal No.EAT/1025/93

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 19th January 1995
	Judgment delivered 9 March 1995

	Before

	HIS HONOUR JUDGE LEVY QC

	MR K M HACK JP

	MR W MORRIS

N W PLUMBING & CENTRAL HEATING	APPELLANT
 MAINTENANCE LTD

MR W O HOWELL	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR M J CROALLY
(of Counsel)
Steinbergs
62 County Road
Walton
LIVERPOOL L4 3QL

For the Respondents	MR J P MORRIS
(of Counsel)
Bell, Lamb and Joynson
51/53 Wallasey Road
Wallasey
Merseyside LA5 4NN

HIS HONOUR JUDGE LEVY QC           N W Plumbing and Central Heating Maintenance Ltd ("The Company") is a medium size company of gas heating and installation engineers whose headquarters are in Merseyside.  In 1990, Mr W O Howell commenced employment with the Company as a heating engineer.  On 19th May 1992 Mr Howell was instructed to inspect a gas installation at 47 Prentice Road, Rockferry, ("the Rockferry property") because of a reported smell of gas.  Having visited the site he filled in a work record sheet supplied to him by the Company as follows,
	 Under the heading "fault" he put
		"Smell of gas"

	Under the heading "Works Report" he wrote

		"Very slight leak on pipe buried beneath brick fireplace ...  well within limit ... tenant agreed to leave it"

Later that day North West Gas attended the Rockferry property because of a report that there was still a smell of gas there.  They reported finding a leak.  This was reported to the Local Authority's Housing Department who wrote to the Company.  This led to the Company writing to Mr Howell on 27th May 1992 suspending him from his employment while the Company investigated work which he had done between his attendance at the Rockferry property and 27th May.  The letter made reference to the "Guidance Notes on Soundness Testing on Gas Installations" ("the Guidance Notes") and also stated that the Company considered the manner in which Mr Howell had dealt with the Rock Ferry job so serious as to warrant in itself dismissal for gross misconduct but no decision would be taken until his later work had been investigated.

	On 29th May 1992, Mr Sprott of the Company telephoned Mr Howell following the investigations and informed him that he was being dismissed.  Mr Sprott suggested that Mr Howell should come to the office to see him, but Mr Howell did not do this because he thought a decision to dismiss him had been taken.

	On 1st June 1992, Mr Sprott wrote to Mr Howell confirming summary dismissal for gross misconduct on the grounds of continued breach of Company procedure and current gas regulations.  On 18th August 1992, Mr Howell, who was 53 at the date of his dismissal, made a complaint to the Industrial Tribunal.  On 17th September 1992, the Company entered a notice of appearance.  On 28th April 1993 there was a hearing before an Industrial Tribunal held at Liverpool.  On 5th July 1993 the Decision of the Tribunal was sent to the parties.  That decision was that Mr Howell had been unfairly dismissed.  His complaint was adjourned until 27th July 1993 to enable the Tribunal to determine his remedy.  On 27th July 1993 there was that further hearing ("the Remedy Hearing").  The decision on that hearing was sent to the parties on 18th August 1993.  The Tribunal ordered that the Company should pay to Mr Howell a basic award of £600 and a compensatory award of £4,015.

	The Company does not complain about the decision of the Tribunal that it acted unfairly in dismissing Mr Howell.  It does, however, complain about the compensation awarded and lodged a Notice of Appeal on 20th September 1993.  By the time it reached us the only issue  for determination was set out in paragraph 3 of that Notice of Appeal, paragraphs 1, 2 and 4 being deleted as shown in the amended Notice of Appeal bearing a stamp of the EAT dated 8.12.93.  The ground of appeal remaining reads as follows -
		"The amount of compensation awarded was excessive as the applicant had contributed materially to his dismissal; the dismissal was, if unfair, only procedurally unfair, and the Tribunal failed to give proper weight to the further misconduct discovered after the dismissal, or pursuant to S.74 of the Act."

	On 18th April 1994, there was a Preliminary Hearing at this Tribunal when the Tribunal ordered that the appeal be allowed to proceed to a full hearing and directed that a request be made to the Industrial Tribunal Chairman for his Notes of Evidence in respect of the decisions promulgated on 5th July and 18th August 1993.  A request appears to have been made to the Chairman for his notes on both decisions, but unhappily the notes produced were only those of the Remedy Hearing and not of the first part of the hearing.  This led to problems in the course of the appeal because both sides made suggestions as to what evidence had been given on the first occasion.  Clearly we were unable to go beyond facts as found by the Industrial Tribunal or apparent in the documents presented to us.

	The Company's appeal was made because the Industrial Tribunal made no deduction from the compensatory award on account of Mr Howell's conduct.  Four reasons had been submitted to the Industrial Tribunal to show that the compensatory award should be reduced.  At paragraph 8, the reasons of the Industrial Tribunal for their decision on the Remedy Hearing recite those grounds.  Only two of these are material on this appeal.  One of these grounds is that Mr Howell had contributed materially to his dismissal.   The second ground is that there had been discovery by the Company at an unspecified date of further misconduct by Mr Howell in carrying out work at property in Pemberton Drive, Woodchurch, Birkenhead ("the Woodchurch Property") where he was responsible overall for the installation of wall-heaters.  The apprentice on the job had materially failed to do work on the job properly and for that failure Mr Howell as his supervisor was blameworthy.   The Company submitted that Mr Howell's conduct at each of the Rockferry and Woodchurch Properties provided compelling reasons for the Industrial Tribunal to reduce any compensation which they would otherwise have found due to him.  

The Rockferry Property
	On his conduct at the Rockferry Property they submitted he failed to follow proper procedures.  The Tribunal in paragraph 10 of its Reasons said -
		"10.  The incident which gave rise ultimately to the applicant's dismissal was his alleged failure to follow proper procedures when attending a suspected gas leak at 47 Prentice Road, Rockferry.  The respondent did not in fact dismiss for this alleged misconduct but made a dismissal conditional upon a check of the applicant's other work between the date of that incident and his dismissal on 29 May.  He was then informed that the respondent had found serious deficiencies in that other work but neither he nor the Tribunal were given any specific information about such alleged deficiencies and he was not given the opportunity of being present when his other work was checked.  The Tribunal considered he could not have contributed to his dismissal if that was on the ground of the subsequent investigation.  If on the other hand his dismissal arose primarily out of his alleged conduct at Prentice Road, Rock Ferry, then his explanation was that he had carried out the proper tests.  The respondent deduced no evidence to rebut this because the applicant said that when he left the premises there was no smell of gas and his drop test was within acceptable limits.  The respondent took no steps to interview the tenant of the house to see whether the applicant's version of what occurred was correct.  It was not of course denied that there was presumably a smell of gas later in the day because the Gas Board effected a repair but the Tribunal accepted the applicant's evidence on these matters and found that he had not contributed to his dismissal and that there should be no reduction in any compensation on that account." 

The Woodchurch Property
	The Tribunal's reasons for making no reduction for compensation from Mr Howell's award in respect of this property were set out in paragraphs 13 and 14 of their decision on the Remedy Hearing.
		"13.  On the fourth submission it is well recognised that while alleged misconduct on behalf of an employee discovered after the dismissal cannot play any part in the dismissal itself, it is proper under the just and equitable provision of Section 74(1) to take such into account when assessing compensation conduct subsequent to the dismissal which would have justified it.  The incident concerned was one at Pemberton Road, Woodchurch, Birkenhead where the applicant had been responsible for the job of installing wall-heaters.  When the Gas Board were installing new meters at the premises concerned it was discovered that the gas supply had been fed to these heaters through the cavity wall without the same being culverted in breach of standard practice and regulations.  The applicant explained in evidence that he did not do that work himself but accepted that it had been done by an apprentice and that he had overall responsibility."

		 14.  On this issue the Tribunal found that there was little substantive evidence before it except that the applicant agreed that such a fault could be dangerous and therefore it was conduct which if known at the time of his dismissal might itself have justified the same.  However, there was no evidence before the Tribunal as to when this work was done or when the respondent became aware of the defect.  It is certainly not referred to in its Notice of Appearance filed in September 1992 and the Tribunal considered it unlikely that such a possible cause to dismiss the applicant would have manifested itself much before the expire of the six month period from the date of his actual dismissal as mentioned in the next following paragraph of this decision."
The compensatory award from which no deduction was made was on the basis that there was a loss of earnings for 26 weeks from 29th May.
	  
	The essence of Counsels' submissions on the appeal can thus be summarised.  Mr Croally for the Company recognised that this Tribunal would be very reluctant to disturb findings of fact made by any Industrial Tribunal but complained of the failure of this Tribunal to find certain facts.  He invited us to draw inferences from the facts as found to conclude that it was perverse of the Tribunal to hold that the conduct of Mr Howell at the two properties did not necessitate a deduction from the compensation award.  Mr J P Morris (counsel for the Respondent) submitted that on the facts as found the decision of the Tribunal was one it was entitled to reach and one with which we should not interfere.

	As to the Rockferry Property, Mr Croally submitted that, notwithstanding the failure to call the occupier to give evidence, the inescapable inference to be drawn even from Mr Howell's own note was that there was a leak of gas there during Mr Howell's visit.  If a smell of gas had been reported which led to his visit and a leak of gas was found subsequent to it, Mr Howell having taken no curative action at all, on the balance of probabilities there must have been a gas leak there during his visit.  Thus his failure to take any or any effective action either to stop the leak or to cut off the gas, on a proper consideration, should have been considered sufficiently blameworthy to merit a deduction from the award.  Mr Howell's note "well within limit" referred to his reliance on paragraphs in the Guidance Notes but if there was a leak, however small, Gas Regulations necessitated action being taken which Mr Howell failed to take.  By contrast, Mr J P Morris submitted that there was in fact no finding that there was a leak at the property during Mr Howell's visit there and that the possible legal consequences of a leak were not canvassed below and not on the facts a real possibility.  He relied on the reasoning and findings of the Tribunal at paragraph 10 reproduced above to support the Tribunal decision to make no deduction from the award.

	So far as concerns the Woodchurch Property, both counsel referred to the decision of the House of Lords in W Devis & Sons Ltd v. Atkins [1977] ICR 662, which gives guidance as to how and when misconduct of an employee discovered post dismissal could affect an award of compensation.  Mr Croally submitted that the Tribunal's reasons for excluding conduct at the Woodchurch Property appeared to be based on when the Tribunal believed that misconduct would have come to light.  He submitted that was an improper consideration.  Misconduct had come to light before the remedy hearing took place.  Mr J P  Morris pointed to the finding in paragraph 14 that "little substantive evidence" of fault and thus misconduct was before the Tribunal.  He submitted that we should be slow to find fault, and thus misconduct, where there was evidence before the Tribunal which supported its decision.

	The majority of us (Judge Levy QC and Mr Hack) preferred the submissions of Mr Croally on both counts.  So far as concerns the Rockferry Property, we did not have the benefit of the Notes of Evidence, but we think a proper inference to draw from the facts as found was that there was a leak of gas at the time of Mr Howell's visit.  If there was a leak, however small, which he left untreated, the occupiers and their neighbours were at risk.  In these circumstances, although this was not the cause of the dismissal, his failure to deal with such leak as there was is something which perhaps could and perhaps should have been taken into account at the compensation hearing, if it was or should have been found as a fact that there was a leak at the time.  So far as the Woodchurch Property is concerned, the decision of the Industrial Tribunal as to when the mischief (if mischief there was) would have been discovered was a point taken erroneously if there was substantive evidence that there was a fault for which Mr Howell was responsible (and the words "little substantive evidence" suggest that there was some).  This is a factor which the Tribunal should not have ignored when considering whether Mr Howell's conduct contributed to his dismissal.  The majority of us, therefore, allowed this appeal and remitted the matter to the Industrial Tribunal for a further hearing to reconsider whether on further consideration on findings of facts which they and not we can make, there should in fact be a finding that Mr Howell contributed materially to his dismissal,  and if so, whether there should be an appropriate discount to the award which was otherwise properly assessed.

	The minority member (Mr W Morris) felt unable to agree with the majority for these reasons.

	In respect of Mr Howell's conduct in both properties, the Tribunal heard evidence, found facts and were entitled to come to the decision they did that his conduct was not such as to warrant a deduction from his compensation award.

	As to the Rockferry Property, the Industrial Tribunal found as a fact that Mr Howell carried out proper tests in line with the Guidance Notes and heard evidence that the test results were within the limit provided for in those Notes.  Paragraph 10 of their reasons are set out above.  Their conclusions were based on and justified by evidence which they had heard.  The fact that Mr Howell carried out an appropriate test in accordance with laid down guidelines removes any question of contributory conduct; there was no finding that there was a leak of gas at the property at the time of Mr Howell's visit and Mr Morris, especially without the Notes of Evidence, was not prepared to draw an inference that there was such a leak.

	As to the Woodchurch Property, apart from the findings in Paragraphs 13 and 14 of the Reasons which are set out above, the Industrial Tribunal also found that Mr Howell did not have specific charges regarding incidents at this property put to him.  A proper reading of paragraph 14 shows that the Industrial Tribunal considered all the evidence and directed itself properly on S.74(1) of the Employment Protection (Consolidation) Act 1978 before concluding that no deduction should be made from the compensatory award.  No inference should be drawn that it took any improper consideration into account.

	Mr W Morris does not find that the Industrial Tribunal erred in law or that it's decision was perverse; for his part therefore he would have dismissed the appeal.

	In the event the appeal is allowed and the matter remitted to the same Industrial Tribunal for a further compensation hearing.