Appeal No. EAT/1210/94

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 8 February 1996

	Before

	HIS HONOUR JUDGE P CLARK

	MR P DAWSON OBE

	MRS R A VICKERS

THE TETLEY PUB COMPANY LTD	APPELLANTS

MRS T BOWEY	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR LYON
(Of Counsel)
Messrs Weightman Rutherford
Solicitors
Richmond House
1 Rumford Place
Liverpool
L3  9QW

For the Respondent	RESPONDENT IN PERSON

			JUDGE CLARK:   Mrs Bowey commenced employment with the Appellant in the bar at their Bulls Head Public House, Macclesfield, in November 1983.  In December 1993 she came under suspicion for theft from the till and was put under observation.  No action was taken at that time.  On 20 January 1994 the Assistant Manager Mr McIntosh reported that £100 was missing from Till No.3.  Suspicion again fell on Mrs Bowey, who was suspended pending a disciplinary investigation, along with a fellow employee Mr Howard.  After four days Mr Howard's suspension was lifted; the Manager, Mr Brittain, having been fully satisfied by his explanation.  Mrs Bowey remained suspended.

	On 10 February 1994 the Respondent was arrested by the police at her home and taken to the police station for questioning.  Eventually she was released on police bail.  She was extremely upset by this turn of events.  

	On 12 February she was summoned to a disciplinary hearing to be held on 14 February at the Bulls Head.  She declined the opportunity to be accompanied by a fellow employee and attended that meeting alone.  The disciplinary hearing was held by Mr Brittain accompanied by Mr McIntosh.  A note-taker was also present and we have read the notes.  It reads like an old-style police interview before the recent change in the caution.  The allegations were put to Mrs Bowey and she declined to comment throughout.  Whether she had been advised not to say anything by her solicitor who had attended her police interview four days earlier, is not apparent from the Industrial Tribunal's reasons.  Following that interview Mr Brittain dismissed her summarily for gross misconduct.  Thereafter she presented a complaint of unfair dismissal to the Industrial Tribunal on 7 May 1994.  The matter came before the Manchester Industrial Tribunal, Chairman Mr E R P Hope, on 28 October 1994.  The Tribunal upheld her complaint and assessed compensation in the sum of £3937.50.

	Extended reasons for their decision are dated 18 November 1994.  Against that decision the employer now appeals.  In support of the appeal Mr Lyon advances a number of grounds contained in the Skeleton Argument which may be summarised as follows:

	1.	The Tribunal misdirected itself as to the burden of proof to be applied when considering the reasonableness of the dismissal under Section 57(3) of the Employment Protection (Consolidation) Act 1978.

	2.	That too high a burden was placed on the employer with regard to the extent of 	investigation necessary in reaching a fair decision to dismiss.

	3.	The Tribunal substituted its own view for that of the employer, instead of 	considering what a reasonable employer would do in the circumstances of this case.

	4.	The Tribunal's decision was perverse in the sense identified by this Appeal 	Tribunal in the case of Stewart v Cleveland Guest [1994] IRLR 440.

	5.	It purported to make findings of fact which were unsupported by the evidence.

Finally, a point is taken on the Tribunal's assessment of compensation to which we shall return.  

	In setting out the background we have deliberately done so in what we hope are neutral terms.  The purpose in so doing will become apparent from our conclusions.  At paragraph 4 of the reasons the Tribunal say this:

	"4.	The Tribunal was reminded by Counsel, although they were fully aware, that their task was not to decide whether the applicant had been guilty of the theft of which she was accused or not, but to decide what was the reason for the applicant had been dismissed and whether the employers had acted reasonably under the provisions of Section 57(3) of the 1978 Act in treating that reason as a sufficient reason for dismissing her.  In assessing the employers reasons their attention was drawn as is usual to the provisions of the Burchell test, namely, that the Tribunal need to be satisfied that the employers genuinely believed in the guilt of the applicant of the misconduct complained of and that this belief was based on reasonable grounds after a full investigation.  It is, of course, necessary for the respondents to establish that they had behaved reasonably."

The decision continues in paragraph 5 with the Tribunal finding that the reason for dismissal related to the employee's conduct and they expressed themselves to be satisfied that Mr Brittain genuinely believed the Applicant was guilty of the offence.  In paragraph 6 they say:

	"6.	In turning to the other elements of the Burchell test, however, the Tribunal were not satisfied as to these, namely, that the respondent's belief was based on reasonable grounds after a full investigation."

	The three-fold Burchell test is invariably applied in conduct dismissal cases such as this one.  However, a literal reading and application of the oft cited passage in Mr Justice Arnold's judgment in that case, reported at [1980] ICR 303, 304D (Note) will amount to a misdirection in law.  Miss Burchell was dismissed on 28 October 1977 by reason of misconduct.  Accordingly her case fell to be decided under the provisions of paragraph 6(8) of Schedule 1 to the Trade Union & Labour Relations Act 1974.  That provision was re-enacted in Section 57(3) of the 1978 Act.  At that time the onus lay on an employer, not only to show the reason for dismissal, but also to satisfy the Tribunal that it had acted reasonably in treating it as a sufficient reason for dismissal.  Accordingly Mr Justice Arnold couched the three-fold test in terms of the employer establishing his belief in the employee's misconduct, and that he had reasonable grounds for that belief, and that he had carried out as much investigation as was reasonable.  He concludes:

	"It is the employer who manages to discharge the onus of demonstrating these three matters, we think, who must not be examined further."

	However, Section 6 of the Employment Act 1980 removed that onus on an employer by amendment to Section 57(3) of the 1978 Act.  Since that time, Section 57(3) as amended reads:

	"The determination of the question whether the dismissal was fair or unfair having regard to the reasons shown by the employer, shall depend on whether in the circumstances, including the size and administrative resources of the employer's undertaking, the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and that question shall be determined in accordance with equity and the substantial merits of the case."

The "Burchell trap" as we shall call it, was clearly identified by this Appeal Tribunal in Post Office (Counters) Ltd v Heavey [1990] ICR 1.   Mr Justice Wood in giving the judgment of this Tribunal pointed out at page 5G of the report:

	"... It is not for the employer "to show," nor for the tribunal "to be satisfied"... [as to the matters raised by section 57(3) as amended] each of which expressions indicate the existence of a burden of proof. ... [where none is provided for in the statute]."

It remains a matter for surprise that still, 15 years since the change in the law affected by the 1980 Act, tribunals are falling into the "Burchell trap".  A reading of paragraph 4 of this Tribunal's reasons set out above, clearly demonstrates that it has fallen into error.  Further, such a misdirection has practical consequences.  Take this case.  Having misdirected itself as to the burden of proof, the Tribunal required the employer to satisfy it that it had carried out a full investigation.  That is not what the sub-section requires.  The question is whether or not, in the judgment of the Industrial Tribunal, the employer has carried out a reasonable investigation.  When put in that way, we ask whether this Tribunal's finding at paragraph 10 of the reasons, that Mr Brittain should have been more thorough with a long-serving employee and pressed for full answers to his questions at the disciplinary interview held on 14 February 1994, in circumstances where the Respondent simply refused to answer, can properly contribute to the conclusion that a reasonable investigation was not carried out. 

	It follows, in our judgment, that this Tribunal's decision is fatally flawed and cannot stand.  On this ground alone, the appeal must be allowed and the whole case remitted to a fresh Industrial Tribunal for reconsideration.  That is why we have set out the background in as neutral a way as possible.  It will be for the next Industrial Tribunal to make all necessary findings of fact.  Equally, it would not be helpful if we were to examine Mr Lyon's further submissions, lest it should be thought by the new Industrial Tribunal that we were expressing any views of our own about the merits of the case.  That is not our province.  It will be for the next Industrial Tribunal to find the facts and apply the law as we have set it out.  

	Finally, the quantum point.  We have considered whether we should rule on the submission that the Tribunal took a wrong approach to the question of causation of the Respondent's medical condition.  In our view, this is a matter which should be left for argument before the next Tribunal.  Accordingly this appeal must be allowed and the whole matter remitted for a re-hearing before a fresh Industrial Tribunal.