Appeal No. EAT/84/94
			EAT/85/94

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 24 April 1996

	Before

	THE HONOURABLE MR JUSTICE BUTTERFIELD

	MRS M E SUNDERLAND JP

	MR A D TUFFIN CBE

MINEHEAD ROYAL BRITISH LEGION CLUB LTD	APPELLANTS

MRS B GUNTER	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR M WEST
Senior Advocate
Peninsula Business Services Ltd
Stanford House
361-365 Chapel Street
Manchester
M3 5JY

For the Respondent	MR J BOWERS
(of Counsel)
Pattinson and Brewer
30 Great James Street
London
WC1N 3HA

	MR JUSTICE BUTTERFIELD:    We have before us two appeals brought against decisions of the Industrial Tribunal, sitting in Exeter, as long ago as July and October 1993.  The appeals are closely related, the first being against the decision of the Industrial Tribunal on liability, holding that the Applicant had been unfairly dismissed and the second against the decision on quantification of her compensation.

	The facts as found by the Industrial Tribunal may be shortly stated.  Mrs Gunter, the Applicant before the Industrial Tribunal, was employed by the Minehead Royal British Legion Club Ltd, the Appellants, as a Steward at the Minehead Club.  She took up that employment in 1983 and remained so employed until she was summarily dismissed on 2 April 1993 for gross misconduct.

	Over the years Mrs Gunter earned for herself the admiration and gratitude of the club and its members for the way in which she performed her duties.  She was regarded universally as a loyal, popular and honest member of staff and a brilliant employee.

	From 1990 onwards the club experienced stock shortage problems.  Those problems became increasingly serious over the next three years.  The Chief Steward, Mr Smith, who worked alongside Mrs Gunter, was unable to identify the cause.

	In early 1993 the finger of suspicion was pointed at Mrs Gunter.  The Club Treasurer received telephone calls from members complaining that she was giving away drinks.  An anonymous letter was received by the Chairman to like effect.  The Committee decided to keep Mrs Gunter under close observation.  A Committee member nobly gave up his holiday to spend about six hours each day, in the club bar for a total of 14 days, to see if he could discover any misconduct on the part of Mrs Gunter.  He was assisted by two other Committee members.  

	The sum total of their efforts amounted to a few occasions when monies received by Mrs Gunter were not rung up and drink being served by her when no payment was apparently made.  However, it was a common practice, of which the Committee was aware, for members to be given short-term credit and for drinks to be paid for by members on the basis that they, or a guest, would be served with them later.  Thus we interpolate the observations were consistent with wholly innocent activity and, on the finding of the Industrial Tribunal, known to be such by the Committee.

	On 31 March 1993 the observers reported their observations to the club Committee.  The Committee resolved to hold a further meeting on 2 April 1993, which would include a disciplinary hearing.  On that occasion Mrs Gunter was invited to attend.  The allegations contained in the anonymous letter and reported by the observers were put to her.  She was given no detail whatsoever.  She denied the allegations.  The whole process lasted about ten minutes.  The Committee then took a vote as to whether Mrs Gunter should be dismissed and by a majority of four, they so concluded.  Mrs Gunter was thereupon summarily dismissed.  She was later informed that she had the right to appeal, but advised that there was no point in doing so.  She did not appeal.

	On those facts, as found by them, the Industrial Tribunal approached its task of determining whether the dismissal of Mrs Gunter was unfair, having regard to the provisions of Section 57 of the Employment Protection (Consolidation) Act 1978.  The Tribunal correctly reminded itself of the proper test and concluded that, whilst the Committee held a genuine belief at the time of dismissal that the misconduct alleged against Mrs Gunter had occurred, they did not have reasonable grounds to sustain that belief and had not carried out a reasonable investigation into the matter.

	The Tribunal set out in detail the flaws and imperfections in the investigative and disciplinary procedures adopted by the Committee.  In particular, in respect of the absence of reasonable grounds, the Tribunal pointed to an excessive reliance on the anonymous letter; failure to obtain written statements from the observers; failure by those observers to make contemporaneous notes of the misdemeanours which they allegedly observed; failure to take account at all, of the fact that throughout all the years of concern over stock shortages, no other evidence against Mrs Gunter had been found.

	As to the disciplinary hearing, the Tribunal roundly condemned the Respondents.  The Tribunal referred to the fact that Mrs Gunter was given no advance notice either of the hearing itself or of the allegations made against her.  She was given no opportunity to arrange for an independent person to accompany her to the hearing.  At the hearing (if it is to be dignified by such a description) she was given no details of the allegations made or of the evidence upon which they were based.  Thus, she was wholly denied the right to put forward an explanation in her own defence.

	On those findings, this was little more than a kangaroo court which was riddled with unfairness.  The Tribunal found that the Appellants had behaved unfairly and in consequence the Applicant's dismissal was unfair.

	When the Tribunal promulgated its full reasons to the parties, which it did on 12 August 1993, it included this paragraph within those reasons:

		"9.  The Tribunal finds that the applicant did not cause or contribute to her own dismissal and that if the respondents had followed a fair procedure they would probably not have dismissed the applicant.  There are no grounds, therefore, for reducing the compensation to which the applicant is entitled."

	In the light of the trenchant condemnation of the Committee's conduct, that was perhaps surprising.  Each of the activities allegedly observed by the Committee, had on the findings of the Tribunal, a perfectly innocent explanation which the Applicant was never able to advance.  Had she done so, bearing in mind the high regard in which she was held and the reputation of honesty she enjoyed, it might be thought not merely probable, but overwhelmingly likely that she would not have been fairly dismissed.

	The Appellants sought a review of the decision under Rule 10(1)(e).  Their concern related to the paragraph we have cited, which gave the impression that there was doubt as to whether, had a fair procedure been followed, the Applicant would have been dismissed.  If there was such a doubt, the Appellants contended, the Industrial Tribunal should have expressed the extent of that doubt as a percentage, so that compensation could be adjusted accordingly.

	The Appellants' application for a review was heard by the Industrial Tribunal on 25 October 1993.  The application was granted and the decision which had been promulgated on 12 August 1993 was varied by deleting the word "probably" to which I have referred.

	It is clear from the full reasons for that variation that the Tribunal was satisfied, at the time it reached its decision, that if the procedural irregularities had not occurred, the Applicant would not have been fairly dismissed.  In the light of the findings of fact to which we have referred, such a conclusion could surprise no one.  Indeed, a contrary conclusion would be difficult to justify.  

	The Tribunal then went on to consider the question of compensation.  The Applicant had still not been able to find alternative employment.  The Tribunal found that she had taken reasonable steps to mitigate her loss and further concluded that she would be unable to find work before the start of the summer season of 1994.  On that basis the Tribunal awarded her a total of £7,368.98.  

	The Appellants now appeal against those decisions.  It is first submitted that the Tribunal erred in law in its application of Section 74 of the 1978 Act.  Section 74(6) of that Act requires the Tribunal to consider the conduct of the Applicant and whether that conduct was in any way causative of the dismissal.  That requirement the Tribunal plainly fulfilled in its decision, finding as it did that the Applicant did not cause or contribute to her own dismissal.

	The Tribunal must also consider the question of whether, had the employers behaved fairly, the Applicant might still have been dismissed.  If such a reasonable possibility exists, the Tribunal should reflect that possibility in terms of a percentage representing a chance that the employee would still have lost her employment.  This is the effect of a number of decided cases, in particular the decision of the House of Lords in Polkey v Dayton Services Ltd [1987] IRLR 503.

	The Appellants submit that the proper time for the Tribunal to consider that question is at the stage when compensation is assessed.  Thus it is contended the Tribunal here were premature in considering the question at the merits hearing, and should have reserved the determination of the issue to the compensation hearing, at which further evidence could be adduced and submissions made.  

	We do not accept that submission.  Rule 9 of the Industrial Tribunals Regulations 1993 provides that the Tribunal shall conduct the hearing in such manner as it considers most appropriate for the clarification of the issues before it and generally to the just handling of the proceedings.  It therefore has a complete discretion as to the way in which the various issues which require resolution by it, should be addressed.

	We remind ourselves further that the Industrial Tribunal is intended to provide for the simple and speedy resolution of disputes between employer and employee.  To require in every case separate hearings for the resolution of the two questions we have identified, would be cumbersome, artificial and wholly unnecessary.  

	In resolving the question of whether, with procedural fairness an Applicant might still have been dismissed, the Tribunal will usually, if not invariably, have regard to much of the evidence which it has considered in determining the question of the employee's conduct.  It would, in our judgment, be absurd to impose on the Tribunal a requirement to re-open those matters on a later hearing.  Further, it would have the disadvantageous practical consequence that hearings would, in our judgment, proliferate.  

	In addition, the parties would be left in a state of uncertainty about the extent of the employer's obligation to compensate.  There would be no finding of the percentage by which compensation should be reduced, if at all, and thus no real opportunity to resolve the issue of compensation by negotiation.

	In circumstances such as those which occurred in the present case, we are firmly of the view that, if it is the view of the Industrial Tribunal that the matters can sensibly and practicably be heard together, they should be.  Thus, all questions relating to fairness of the procedure including the question of whether the employee might have been dismissed if that procedure had in fact been fair, may be resolved at the same hearing and in the same decision if the Industrial Tribunal considers that to be appropriate.

	We are not persuaded that the decisions to which we have been referred, all of which are unreported decisions of this Appeal Tribunal, turning on their own facts on redundancy related matters, require us to hold to the contrary.  

	As a matter of law therefore, the Tribunal were not in error in deciding to consider the Polkey test at the time they did.  It is further submitted however, that the Tribunal were in error because they did not make clear to the parties (and in particular the Appellants) that they were proposing to consider the Polkey test at the first hearing.  Thus it is argued, the Appellants were deprived of the opportunity of dealing with the matter then.  The Chairman does not accept that proposition.  The Notice of Appeal lodged by the Appellants, raising the assertion to which we have referred, was sent to the Chairman of the Industrial Tribunal and his comments invited.  On 30 March 1994 the Chairman responded to that invitation to this effect:

		"2  I believe it was established and understood by the representatives for both parties at that first hearing that all issues which might have a bearing on reduction of compensation would be dealt with in evidence and submissions." 

	Mrs Wood, who had represented the Appellants at the first hearing in July 1993, swore an affidavit to this issue in January 1995.  She deposed that she made no reference in her closing submissions to the Polkey test.  All parties agree that such indeed was the position.  However, Mrs Wood explained that the reason why she made no submission was because she still felt the Tribunal would find the dismissal fair.

	Mr Stuart, the Applicant's union representative, who conducted her case at the original hearing, agreed with the Chairman's letter to which I have referred.  He continued, in an affidavit sworn in January 1996:

		"6.  It was therefore my understanding that both parties were being invited by the Chairman to make all submissions in relation to a contributory fault, the just and equitable calculation of compensation taking into account the factual background to the dismissal and further any submissions that the parties may have to make on whether if the correct procedure had been adopted by the Respondent this would have led to the dismissal of the Applicant in any event."

	The Chairman was invited to consider Mr Stuart's affidavit.  In responding he had this to say about the situation:

		"...  It having been established at the hearing, as I believe it was, that it was open to the parties to make submissions on the issues of reduction in compensation, Mrs Wood chose to address (briefly) contributory conduct but not the Polkey `any difference' issue.  As a professional representative, the responsibility for that decision must rest with Mrs Wood.  Both issues can be, and in practice frequently are, addressed by advocates at the substantive hearing on a hypothetical basis and prior to the Tribunal coming to a decision upon the fairness of the dismissal."

	These recollections are reinforced by the contents of Mrs Wood's letter seeking a review written very shortly after the hearing.  In that letter she complained of a failure of the Tribunal to express their finding as a percentage.  There is not a word however, to suggest that she was surprised, or upset, or dismayed, by the fact that the Tribunal had considered the point itself, merely a complaint that they had not specified sufficiently the nature of their conclusions.

	We are quite satisfied that a Polkey point could have been addressed by the Appellants at the original hearing and was not, in the event, pursued by them.  It is likely that the explanation lies in the recollection of Mrs Wood's.  Whatever the explanation however, the Appellants were not prejudiced by the course the hearing took.  

	The Tribunal considered the matter again at the review hearing and concluded, as it was entitled to conclude, that it was possessed of sufficient material from the first hearing to reach the decision it had and thus, there was no need to consider the question further.

	No error of law is disclosed.  The appeal in relation to the finding of unfair dismissal is therefore dismissed.  

	As to the appeal relating to the assessment of compensation, it is argued that the Applicant had failed to mitigate her loss.  There is of course, a statutory obligation on the Tribunal to consider the question of mitigation of loss under Section 74(4) of the 1978 Act.  In this case the Tribunal heard evidence from the Applicant, of the efforts she had made to obtain employment and the problems that her dismissal, in effect, for dishonesty created in that respect.  They concluded that the efforts she had made to find alternative work were reasonable in all the circumstances.  Mr West, on behalf of the Appellants, accepts (sensibly if we may say so) that he faces an almost insuperable task in trying to set aside that conclusion.  There was plainly evidence entitling the Tribunal to find as they did, whatever another Tribunal might have made of the same evidence.

	In those circumstances no error of law is disclosed and that appeal too is dismissed.  We only add that we express the hope that Mrs Gunter may speedily now receive compensation for her wrongful dismissal.  She has been kept out of her proper entitlement for far too long already.

	__________________________________________

	The Respondent to this appeal applies for an order that the Appellants should pay the whole, or some part of the costs incurred by them in this appeal, under the provisions of Rule 34 of the Employment Appeal Tribunal Rules.  

	The matter is put on two bases by the Respondent.  First, it is said that the appeal was inappropriate at its inception; that it did not and could not raise any issue of law and that the matter should never have been litigated in the first place.  If that submission fails, Mr Bowers submits that the conduct of the appeal, that is to say the way in which the Appellants have chosen to conduct themselves by submitting voluminous Notices of Appeal and Skeleton Arguments, is so unreasonable that it should sound in costs against the Appellants.

	Mr West submits that here there was a justifiable and arguable case that was rightly brought to appeal.  He points to the fact that there was here no preliminary hearing, nor was there any application by the Appellants that the matter should be referred to a preliminary hearing.  On that issue we find in favour of the Appellants.  

	We take the view that there was here an arguable case and that it would be wrong, in those circumstances, to direct the Appellants to pay the whole of the cost of the Respondent.

	As to the subsidiary point advanced by Mr Bowers however, we find that the conduct of this appeal, by Peninsula Services, is such as to fall outside the reasonable way in which these matters should be conducted.  We have in mind in particular, the voluminous nature of both the Notice of Appeal and the Skeleton Argument.  It is not a Skeleton Argument at all, it is more of a short story and not very short at that.

	We have considered all the circumstances of this case and the way in which the appeal has been conducted by Peninsula Services.  We take the view that the proper order and the order that we make is that the Appellants should pay to the Respondent 25 per cent of the taxed costs of this appeal.  

	We wish to make it abundantly plain that the reason why we have made that order is because of the way in which Peninsula Services have conducted the appeal generally and we have the expectation that those costs will be met by Peninsula Services and not by the party against whom, of course, they are made, that is to say the Appellants themselves, the Minehead branch of the British Legion.  That is our order.