Appeal No. EAT/602/96

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 30 October 1996

Before
HIS HONOUR JUDGE PETER CLARK
MR A D TUFFIN CBE
MR R H PHIPPS

THAMESWAY LTD	APPELLANTS

MR R P BORET
	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR D CLARK
(Representative)
IRPC Group Ltd
Stockwell House
New Buildings
Hinckley
Leics.  LE10  1HW	
For the Respondent	MR S GREENFIELD
(Lay Representative)

			JUDGE CLARK:   This is an appeal by the employer Thamesway Ltd against a decision of the Stratford Industrial Tribunal sitting on 27 and 28 March 1996, that the Respondent employee had been unfairly dismissed and had contributed to his dismissal to the extent of 20%.  The employer challenges first the finding of unfair dismissal and, in the alternative, the degree of contribution found by the Tribunal.

	In extended reasons for their decision dated 10 July 1996, the Tribunal made the following material findings of fact.  The Respondent was employed by the Appellant and its predecessors as a bus driver between August 1980 and his dismissal on the 21 June 1994, mistakenly referred to as 28 June in the reasons.  The relevant incident occurred on 8 January 1994.  

	The Respondent was responsible for taking fares from passengers and accounting for the money to the Appellant.  On that particular day he was £10 short.  Under the Appellant’s rules a driver in such circumstances is required to make good any shortfall within 48 hours.  It was common ground that a £10 note had gone missing, but the Respondent refused to replace it, contending that it was the fault of the cashier who must have mislaid the £10 note.  He maintained that refusal and invoked the Appellant’s internal grievance procedure.  He took his grievance through three stages.  First to Mr Hook, the Operations Manager, then to Mr Trotman, the District Manager, and finally to Mr Hiron, the Managing Director.  All rejected his grievance and each directed him to repay the money.  He still maintained his refusal.  Disciplinary proceedings followed, the charge being that he had failed to obey the instruction to repay the £10 to the company.  

	At the first disciplinary stage Mr Hook summarily dismissed the Respondent for gross misconduct.  He appealed against that decision to Mr Trotman without success.  He did not pursue his final right of appeal to Mr Hiron.

	It was the Appellant’s case that their reason for dismissal was the Respondent’s refusal to obey the instruction to repay the £10.  The Industrial Tribunal considered that reason.  They found as a fact that the Appellant did have genuine grounds for believing that the mislaying of the £10 was the fault of the Respondent, and that they had examined and rejected any suggestion of a failure by the cashiers properly to record monies paid in by the Respondent.

	In these circumstances the Tribunal held that it was permissible for the Appellant to issue the instruction which they did to the Respondent, and to deal with the matter appropriately if, as happened, he did not obey that instruction.  At this point we break off the narrative of the Tribunal’s reasoning to remind ourselves of the task facing the Industrial Tribunal under the then Section 57 of the Employment Protection (Consolidation) Act 1978:

(1)	Has the employer established his reason for dismissal?  Although there is no finding in terms by the Tribunal, it appears at this stage that the Tribunal has accepted the reason advanced by the employer, that is: the Respondent’s refusal to obey an instruction which the Tribunal found was a permissible instruction.
(2)	Is that a prescribed reason under Section 57(2)?  Again there is no express finding, but we infer that the Tribunal was satisfied that such a reason related to the Respondent’s conduct - Section 57(2)(b).
(3)	Did the employer act reasonably in treating it (i.e. the reason shown by the employer) as a sufficient reason for dismissal - Section 57(3)?  Here there is no burden of proof on either party.  Boys & Girls Welfare Society v McDonald [1996] IRLR 129.

	In addition to considering the well-known Burchell test, the Industrial Tribunal must also ask itself whether dismissal for that reason falls within the range of responses open to a reasonable employer.  Iceland Frozen Foods v Jones [1982] IRLR 439.  

	In answering the question posed by Section 57(3), the Industrial Tribunal must not substitute its own view for that of the employer.  See Iceland Frozen Foods paragraph 24.

	In this appeal Mr Clark, on behalf of the Appellant, submits that this Tribunal has misdirected itself in applying Section 57 of the Act in two respects:

1.	Having accepted the reason put forward by the employer as the reason for dismissal, the Industrial Tribunal has in fact judged the reasonableness of the dismissal by reference to a different reason.  Thus it has fallen into error by evaluating the reasonableness of the employer’s decision to dismiss by reference, in whole or in part to the wrong reason.

2.	In considering the penalty imposed by the employer, the Industrial Tribunal has fallen into the trap of substituting its own view of the appropriate penalty, for that of a reasonable employer.

	In our judgment both propositions are made good.  Our analysis of the Tribunal’s reasoning which leads us to that conclusion is as follows:  first, the reason -. in finding that the dismissal was unfair, the Industrial Tribunal in paragraphs 4 and 5 of their reasons, say this:

“4	... It seemed to us however, that this matter had been magnified out of all proportion and that the attitude of Mr Hook and Mr Trotman was inflexible and that there ought to have been a distinction between types of instruction and that it should have been recognised that a failure to pay in £10 was not so serious that where it was the first instance of an employee failing to pay into the correct money it did not warrant the penalty of dismissal, let alone dismissal for gross misconduct.  ... Failing to account for £10 where dishonesty is not alleged is not gross misconduct.

5	... Faced by an employee who had against him no disciplinary proceedings of this type and only one final warning on his record which at the time he committed this offence was almost time expired and faced also with the smallest [smallness] of the amount involved and the lack of any history of negligence in paying in money, the penalty of dismissal was not one which was within the band of reasonable responses open to the reasonable employer.  The band of reasonable responses would have been a warning, coupled with a clear indication that any failure to pay in the proper money on any subsequent occasion, would probably result in the penalty of dismissal.”

	It seems to us that these passages clearly demonstrate that the Tribunal was not judging the reasonableness of the dismissal by reference to the reason advanced by the employer and accepted by the Tribunal, namely refusal to obey an instruction, but on the basis that the reason for dismissal was a simple failure to repay the £10.  To say that failing to account for £10 where dishonesty is not alleged is not gross misconduct, is nothing to the point; the misconduct alleged was his refusal to obey an instruction to repay given by three managers at each of the grievance hearings.  Instructions which the Tribunal found were permissible.

	This confusion of reasons was or may have been significant.  The Industrial Tribunal refer to an earlier final warning.  The Appellants say that that warning was for refusing to obey an earlier instruction, we are told by Mr Greenfield, an instruction to attend the company doctor.  In these circumstances it is not correct to distinguish the incident leading to that final warning with the instant case.  Both involved a refusal to obey an instruction.  Further, the Tribunal’s approach to the earlier warning may have influenced its conclusion on the question whether the dismissal fell within the band of reasonable responses.

	Secondly, the Tribunal substituting its own view - having recognised that it must not do so, in our judgment that is precisely what the Tribunal has done.  It expressed its own view in saying that a failure to pay in £10 was not so serious, where it was the first instance of an employee failing to pay in the correct money; it did not warrant the penalty of dismissal, let alone dismissal for gross misconduct.  It expressed its own view as to the appropriate penalty, a warning.  The question is whether dismissal fell within the band of reasonable responses.  It cannot be said that that was the only penalty which any reasonable employer would impose.

	In these circumstances we are satisfied that this decision is fatally flawed and must be set aside.  We have considered what course we ought to take.  In our view, the whole matter must be remitted to a fresh Industrial Tribunal for a full re-hearing.

	We have not dealt with Mr Clark’s alternative submission that the finding of 20% contribution was perverse.  It is unnecessary to do so.  The issue of contribution will remain at large for argument, should the next Industrial Tribunal find that the dismissal was unfair.

	Accordingly this appeal is allowed and the case remitted to a fresh Industrial Tribunal for re-hearing.