Appeal No. EAT/467/94

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 20th June 1995
	Delivered on 19 October 1995

	Before

	THE HONOURABLE MR JUSTICE MUMMERY (PRESIDENT)

	MISS J W COLLERSON

	LORD GLADWIN OF CLEE CBE JP

BRITISH GAS PLC	APPELLANT

MR J C MOORE	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR R TOLSON
(of Counsel)
The Solicitor
British Gas Plc
Star House
Mutton Lane
Potters Bar, Herts
EN6 2PD

For the Respondents	MR M RYDER
(of Counsel)
UNISON Legal Department
1 Mabledon Place
LONDON WC1H 9AJ

MR JUSTICE MUMMERY (PRESIDENT)                 This is an appeal from the decision of the Industrial Tribunal held at London (North) on 30th November 1993 and on 14th and 15th March 1994.  For extended reasons notified to the parties on 15th April 1994 the Tribunal unanimously decided that Mr Moore's dismissal by British Gas was unfair.  The question of remedy was adjourned to a date to be fixed if the parties could not reach agreement.  British Gas Plc appealed against the decision by Notice of Appeal served on 12th May 1994.  The matter first came before the Employment Appeal Tribunal on 7th October 1994 as a Preliminary Hearing.  The Tribunal ordered that the appeal should be allowed to proceed to a full hearing on grounds limited to paragraph 3 of the Notice of Appeal in which it was alleged that the Industrial Tribunal had erred in law in holding that there was no rational basis on which British Gas could have distinguished between Mr Moore and two other employees who were not dismissed, in finding that a reasonable employer would not have differentiated between an act of commission and an act of omission and in applying its own view of the witnesses and facts on the question of contributory fault to the question whether the dismissal was unfair.

	In order to determine whether the Tribunal did err in law on these grounds, it is necessary to consider the background facts and the reasoning which led the Industrial Tribunal to find that the dismissal was unfair.

	Mr Moore was employed by British Gas as an Emergency Service Operator from January 1979 until he was dismissed on 15th January 1993.  The circumstances of his dismissal led him to present an application to the Industrial Tribunal on 5th March 1993.  The basis of his claim was that he was accused, with two other colleagues, of not complying with Codes of Practice.  A disciplinary hearing took place.  He was dismissed, along with his two colleagues.  No specific evidence was presented which identified him.  At a subsequent appeal his two colleagues were reinstated, but his dismissal was confirmed.  In the Notice of Appearance dated 7th April 1993 British Gas contested the claim.  The basis of the defence was that British Gas concluded that Mr Moore had acted in breach of the procedures and had committed a gross dereliction of duty warranting summary dismissal.  British Gas acted reasonably in concluding that his conduct justified summary dismissal and that, in all the circumstances, his dismissal was fair.  The Tribunal heard evidence from Mr Moore and five witnesses called by him.  They also heard evidence from five witnesses called by British Gas.  The Tribunal found the following facts.

	Mr Moore started to work in the Distribution Department of British Gas in January 1979.  In 1987 he joined the Emergency Services Department as an Emergency Service Officer.

	On Sunday 20th December 1992 an incident occurred which resulted in the dismissal of Mr Moore and two other Emergency Service Officers on duty.  The place of work was Star House, Potters Bar.  The emergency service deals with hundreds of calls and is particularly busy on a Sunday.  The night shift had been manned by another Emergency Service Operator, Mr Youens.  Just before he went off duty he reported to Mr Gibson, the Control Room Engineer in charge of the emergency services officers and the telephonists on duty, that the computer had a fault.  Mr Gibson telephoned the systems operator at 8.31 a.m.  At 8.45 a.m. the shift changed.  Mr Moore came on duty as an emergency service officer, along with Mr Lawrence and Mr Varney.  Four part-time telephonists were also on duty, as was Mr Gibson.

	Mr Moore was in charge of righting the computer which had gone down.  The procedure was that, when the computer had to be righted, the telephonists worked manually, receiving telephone calls from the public, writing them down and then passing the cards to the emergency service officers.  Their duty was to ensure that the service engineer went to the place where there had been a report of a leak or other trouble.

	On this occasion no calls were taken between 9.14 a.m. and 10.19 a.m.  Over 400 calls went unanswered.  The telephonists were instructed not to answer any calls.  This was serious because, in certain emergencies, if calls are not dealt with promptly, there is a risk of an explosion.

	When this came to Mr Gibson's attention he reported it.  A Mr Benton was appointed investigating officer.  He interviewed the three emergency service officers.  Mr Benton received a report from Mr Gibson.  He interviewed the four telephonists, Mr Moore and others.  In his report Mr Benton said that it was clearly the responsibility of the emergency service officers to supervise the telephonists and to ensure that incoming calls were dealt with.  The action taken by the emergency service officers put the safety of the public at risk and injured the reputation of British Gas.

	The first day of the disciplinary hearing was 23rd December 1992.  It was adjourned and reconvened on 15th January 1993.  In the meantime Mr Benton conducted other interviews.  On 15th January the disciplinary panel heard the remainder of the hearing.  A decision was taken to dismiss all three emergency service officers on that day.  At the disciplinary hearing one of the emergency service officers, Mr Varney, named Mr Moore as the person who gave an instruction to the telephonists to assist him in re-entering service engineer details in the computer system, instead of instructing her to continue answering the telephone and to record the jobs on the cards provided for the purpose.  Mr Moore denied he was the person.

	The findings of the disciplinary panel were set out in a letter dated 19th January 1993 sent to each of the emergency service officers.  The conclusion of the panel was that it was proved that the emergency service officers failed to ensure the receipt of incoming emergency telephone calls from customers and members of the public in breach of the general rules of conduct for all employees.  That action represented a serious breach of trust and confidence placed in them by management to provide an essential service and amounted to a gross dereliction of duty.

	At that time, therefore, all three emergency service officers were treated as equally responsible for what had happened.

	All three officers appealed.  The appeals were heard separately by a panel on 8th February 1993.  As a result of the appeals two of the emergency service officers, Mr Varney and Mr Lawrence, were reinstated.  The appeals panel received fresh evidence that Mr Moore was the person who gave the instruction.  The Industrial Tribunal heard further evidence on this matter which they declined to take into account, as they pointed out, correctly, that in deciding whether Mr Moore's dismissal was unfair, they could only take into account matters before the appeal panel.  The Tribunal were not entitled to substitute their views for those of British Gas in relation to the veracity or otherwise of the people who made statements to them.

	In a letter of 10th February 1993, nine factors set out for dismissing Mr Moore's appeal.  It was stated that Mr Moore had taken responsibility at an early stage in the shift for the rectification of the computer problem and was effectively in control of the situation in the unit during the period in question.  The telephonists were instructed to stop taking calls while he was rectifying the computer system.  There was evidence from various witnesses that Mr Moore had given that instruction.  The appeal panel found that he could not have been totally unaware, as he maintained he was, of what was happening in the unit during that period.  In those circumstances the appeal panel concluded that Mr Moore bore the major responsibility for the failure of the unit to carry out its responsibilities.  He took charge and issued the instructions to the telephonists in full awareness that such instructions were improper and in complete disregard of the essential safety functions of the unit.  The letter added that the appeal panel believed that Mr Moore's evidence had been persistently untruthful and misleading.

	The position therefore was that the appeal panel refused to allow Mr Moore's appeal on the ground that he was more responsible than the other officers and that he had lied, whereas the others had not.

	The Industrial Tribunal correctly directed themselves that it was not for them to interfere with the findings of the appeal panel on the questions of fact.  The point at issue was whether or not there was disparity of treatment.  On the authority of Securicor Ltd v. Smith [1989] IRLR 356 the Tribunal directed themselves that they could only find that there was disparity if there was no rational basis for the conclusion of the appeal panel.

	The Tribunal were satisfied that the reason for Mr Moore's dismissal was conduct within S.57(2).  The question was whether the dismissal was fair under S.57(3).  The Tribunal decided that the dismissal was unfair.  There was no difference in status between the three emergency service officers.  They were all equally responsible to the telephonists.  A reasonable employer would not have differentiated between an act of commission and an act of omission when all three officers were responsible.  That left the fact that the appeal panel found Mr Moore was lying and the others were not.  Having regard to the length of Mr Moore's service (14 years) ("and other factors") the Tribunal concluded that it was not just and equitable to treat that factor alone as sufficient reason for differentiating between Mr Moore and the other two officers.

	The Industrial Tribunal finally considered the question whether or not Mr Moore had contributed to his dismissal and found facts relevant to the question whether there should be contribution or no contribution.  In paragraph 15 of the extended reasons the Tribunal stated their findings of fact and decided that there had been no contribution on the part of Mr Moore to his dismissal.  They accepted evidence given to them that Mr Moore did not tell the telephonists to stop taking calls.  Mr Varney and Mr Lawrence were in a far better position than Mr Moore to appreciate that calls were not being taken.  They did not accept Mr Varney's positive evidence that it was Mr Moore who gave the instruction.

	Mr Rider, on behalf of Mr Moore, submitted that the essential question raised on the appeal, as limited by the order of 7th October 1994, is whether the Industrial Tribunal was in error of law in holding that there was no rational basis on which to distinguish between the two officers, who were not dismissed, and Mr Moore, who was dismissed.  He accepted that, on the authority of Securicor Ltd v. Smith (supra), the correct test is whether there was a rational basis for distinguishing between the employees who were not dismissed and Mr Moore.  The Industrial Tribunal applied the correct law to the relevant facts.  The Tribunal had found as a fact that there was a mixed reason for Mr Moore's dismissal: first, he was more responsible than the other two officers and, secondly, he had lied and they had not.  The Tribunal had correctly found as a fact that all three officers were equally responsible for the telephonists in the unit.  It was not disputed that they had equal status.  British Gas had distinguished between Mr Moore and the other two officers on the basis that Mr Moore committed the act of telling the telephonists not to continue to answer calls, while the other two were guilty of an omission, in that they were aware that the telephonists were not answering calls, but omitted to tell them to answer them.  The Tribunal therefore had to consider whether there was a rational difference with regard to culpability between Mr Moore, who allegedly gave a wrong instruction in pressured circumstances, and an officer of equal status and responsibility, such as Mr Varney, who heard the instruction being given, but did nothing to warn, advise against or overrule it or an officer, such as Mr Lawrence, who knew of the instruction given, but did nothing to prevent or minimise its effect.

	In these circumstances, the Tribunal were entitled to hold, on the facts found by the appeal panel, that the alleged distinction between the three officers was so insignificant as not to form a rational basis for dismissing Mr Moore and not dismissing the other two.

	The only other alleged rational basis for differentiating between the three officers was the alleged lying by Mr Moore.  Mr Rider submitted that the Industrial Tribunal were correct in holding that the alleged lies of Mr Moore would not form a rational basis for making a distinction.  The Industrial Tribunal examined whether the alleged lies were sufficient to justify dismissal in circumstances where the absence of such lies would not justify dismissal.  They had taken into account length of service.  That was a relevant consideration in determining the fairness of a sanction.   It did not necessarily amount to the Tribunal substituting its own view for that of the employer.  The Tribunal's view was that a reasonable employer would not have allowed the alleged lies told by Mr Moore to swing the balance in favour of dismissal.

	For British Gas Plc, Mr Tolson agreed that the issue on this appeal is whether the Industrial Tribunal were correct in law in finding that, in determining whether dismissal was an appropriate sanction, there was no rational basis for distinguishing between Mr Moore and the other two officers.

	Mr Tolson made the following submissions:-
	(1)  The issue for the Industrial Tribunal was whether the decision to dismiss Mr Moore complied with S.57(3) of the 1978 Act. 

	(2)  The Industrial Tribunal were bound by the findings of fact made by the appeal panel - that Mr Moore bore the major responsibility and that he had told lies.  It was not suggested that the appeal panel had reached perverse findings or that their procedure was flawed.  

	(3)  On the crucial issue of disparity of treatment the correct approach was as laid down in Securicor v. Smith [1989] IRLR 356.  The Industrial Tribunal misdirected themselves in not applying that test.

	(4)  Furthermore, it was not disputed that British Gas Plc had satisfied the test for dismissal for misconduct laid down in BHS v. Burchell [1978] IRLR 378:  British Gas Plc believed that there had been misconduct on the part of Mr Moore.  There were reasonable grounds for that belief.  A reasonable investigation had been made into the matter before the decision to dismiss Mr Moore was taken.

	(5)  Alternatively, if the Tribunal had in fact applied the Securicor test, no reasonable Tribunal could have concluded that the decision of British Gas Plc was so irrational that no reasonable employer could have made it.  The Industrial Tribunal had, by their findings on contributory fault, reached a conclusion diametrically opposed to that of the appeal panel.  In those circumstances they had wrongly substituted their own view of the facts for those of the appeal panel.  That was impermissible.

Conclusion on Liability
	In our judgment, there is no legal error in the Industrial Tribunal's decision on liability.  The legal position is as follows:-
	(1)  The statutory test whether a dismissal is fair or unfair is that contained in S.57(3).  The Industrial Tribunal were fully aware of that test and cited it expressly in their Full Reasons (paragraph 7).

	(2)  The Industrial Tribunal correctly identified the crucial issue as "whether or not there is disparity of treatment".

	(3)  There is guidance in the authorities on the application of S.57(3) to cases of dismissal for misconduct, like this case.  The three-point test in Burchell applies.  We agree with Mr Tolson that it has been satisfied, but that does not help to resolve the question of disparity of treatment which arises where more than one person appears to be involved in the misconduct.

	(4)  The Securicor test is relevant to disparity of treatment in those circumstances.  It was cited to the Industrial Tribunal and is discussed in their decision.  That case was a reminder to the Industrial Tribunal that the essential points are -
		(a)  whether the employer's action in dismissing Mr Moore was within the band of reasonable responses of a reasonable employer in the circumstances of the case; and
		(b)  whether the basis on which the appeal panel distinguished between Mr Moore on the one hand, and Mr Lawrence and Mr Varney, on the other, was so irrational that no reasonable employer could have accepted it.  The crucial question was, therefore, whether it was within the band of reasonable responses to dismiss one of them and not the other two.  

	(5)  We accept that it was not for the Industrial Tribunal to substitute their own view of the facts or their own decision as to whether, in the circumstances, they would have dismissed Mr Moore.  We agree that the dismissal is only unfair if no reasonable employer would have dismissed Mr Moore in the circumstances.  If a reasonable employer might have dismissed him, then his dismissal is fair.

	(6)  We also agree that untruthfulness on the part of an employee in his account of relevant matters is a material consideration in deciding whether or not a reasonable employer would have dismissed him in all the circumstances: British Leyland (UK) Ltd v. Swift [1981] IRLR 91 at 93.

	(7)  In our view, the Industrial Tribunal applied the correct test in paragraph 12.  They found that
		"... a reasonable employer would not have differentiated between an act of commission and an act of omission when all three were responsible."
	It was by applying that distinction that the appeal panel arrived at the conclusion that Mr Moore bore the major responsibility and should therefore be dismissed.  In our view, the Industrial Tribunal were entitled to form the view that a reasonable employer would not have drawn, or acted on, a distinction between the act of commission, which Mr Moore was alleged to have committed, and the act of omission, which the other two are alleged to have committed.  That left the question of lying.  The Industrial Tribunal were entitled to come to the conclusion that that alone should not be regarded as a sufficient reason for differentiating between Mr Moore and the other two emergency service officers.                              

	(8)  We agree that the wording of paragraph 12 of the Full Reasons could have followed more closely the language of the earlier decisions.  When read in the context of the whole decision and, in particular, the citation of S.57(3) and the Securicor case, we are satisfied that the Industrial Tribunal were applying the correct "reasonable employer" test and reached the conclusion that there was no rational basis for the conclusion of the appeal panel which resulted in the dismissal of Mr Moore and the retention in employment of the other two.  We can only interfere with that conclusion, reached on the application of the correct test, if we are satisfied that no reasonable Tribunal would have reached that decision.  We cannot find perversity in this case.

Contributory Fault
	We do, however, find that there was a legal error in the manner in which the Industrial Tribunal dealt with the question of contributory fault.  It appears from Mr Moore's Originating Application that he was claiming re-instatement.  Having found that he was unfairly dismissed, the Tribunal should then have proceeded to consider the exercise of their discretion under S.69(5) which provides -
		"In exercising its discretion under this section the Tribunal shall first consider whether to make an order for re-instatement and in so doing shall take into account the following considerations, that is to say -

			(a)  whether the complainant wishes to be re-instated;

			(b)  whether it is practicable for the employer to comply with the order for re-instatement; and

			(c)  where the complainant caused or contributed to some extent to the dismissal, whether it would be just to order his re-instatement."
	Instead of referring to this section, the Tribunal stated in paragraph 13 that the question was whether or not Mr Moore had contributed to his dismissal and expressly referred to S.74(6).  The Tribunal directed themselves in paragraph 14 that they were satisfied that the interpretation of that section meant that:
		"... we must find any facts which may lead to there being contribution or no contribution."
They heard evidence from Mr Moore and a number of other witnesses.  In our view, it was an error of law to proceed on the basis of S.74(6).  Section 74 is concerned with the calculation of a compensatory award.  Subsection (6) provides -      
		"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."

That section is irrelevant to the present case, because Mr Moore was claiming re-instatement, not compensation.

	In paragraph 16 the Tribunal referred to the question of practicability, which arises under S.69(5)(b), but said -
		"... However, we decided that due to the restructuring of the industry and the lack of information in relation to whether it was possible to fit Mr Moore into a job at a depot other than Potters Bar, (both parties were agreed that he could not return to the Potters Bar ESO), we adjourned the question of remedy to a date to be fixed if the parties cannot reach agreement."

The Industrial Tribunal should have considered the question of contributory fault in the context of all the other considerations which arise in the exercise of the discretion to make an order for re-instatement.  The Tribunal misdirected themselves as to the applicability of S.74(6).  

	We therefore allow the appeal on the question of contributory fault and direct that the question whether an order for re-instatement should be made should be remitted to the same Industrial Tribunal for reconsideration of all relevant factors under S.69(5).