Appeal No.EAT/832/96	 

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 January 1997

Before
HIS HONOUR JUDGE SMITH QC
MR W MORRIS
MR J C SHRIGLEY

COMPAIR HOLMAN LTD	APPELLANTS

MR M EVANS	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR J GALBRAITH-HARTEN
(Of Counsel)
Mr R Lowe
EEF Broadway House
Tothill Street
London
SW1H  9NQ	
For the Respondent	NO APPEARANCE BY OR ON BEHALF OF THE RESPONDENT	

			JUDGE SMITH QC:   This is an appeal by Compair Holman Ltd, the employers, against a decision of an Industrial Tribunal sitting at Truro on 10 May 1996, of which Extended Reasons were sent to the parties on 17 June 1996, whereby the Industrial Tribunal held that the Respondent employee, Mr William Anthony Evans, the Applicant before them, had been unfairly dismissed on 8 December 1995, but that he had contributed to his dismissal by 40%.  The Industrial Tribunal adjourned the application for a remedies hearing.

Background
	For the full background to the matter reference should be made to the decision of the Industrial Tribunal.  Putting the matter fairly shortly, the Respondent employee had been employed since January 1973 and had been promoted to supervisor level in 1985.  In June 1995 he was diagnosed as a diabetic and signed off work with effect from 2 July 1995.  He was still signed off work at the time of his dismissal: the ill health which caused him to be signed off was a combination of the need to sort out the level and nature of his medication for diabetes and in order to relieve the depression from which he had suffered intermittently for many years, which had surfaced again as a result of the diabetes diagnosis.

	Put in a sentence, the Appellants dismissed the Respondent for gross misconduct arising out of an allegation that he was cheating his employers, in that whilst pretending to be off sick and drawing pay, he was in fact working part-time as a barman in the St Day Inn Public House. 

	As appears from the findings of the Industrial Tribunal what occurred in outline was that on 23 November 1995 it came to the notice of Mr Tredrea, the Appellants’ production assembly manager, that the Respondent was apparently working behind the bar at St Day Inn, and it was alleged in that way cheating the Appellants.  Having interviewed the anonymous informant, the Appellants’ management instructed an enquiry agent to keep observation.  The enquiry agent reported to management some time between 4 December 1995 and 8 December 1995.  A record of what the observations came to is set out in detail in the Industrial Tribunal decision at paragraph 2(xi).  

	It is clear that there was a strong prima facie evidence that over a period of just over a week the Respondent was apparently serving behind the bar quite regularly in the evenings, and appeared to be acting as though he were the barman at the public house.  

	As the Industrial Tribunal found, armed with the report of the enquiry agent, Mr Tredrea and the operations director Mr Bowes, went to the St Day Inn at lunchtime on 8 December 1995 and found the Respondent behind the bar apparently acting in a “proprietorial” manner, as the Industrial Tribunal put it.

	What followed is that it was at once explained to the Respondent that a potentially serious disciplinary problem had arisen and the Respondent was required to attend the office for a disciplinary hearing some two hours or so later at 3.30 p.m. i.e that same afternoon.  The Respondent had said when challenged that he was not working at the public house but was “filling in for his wife”.  We should mention that it appears from the Industrial Tribunal’s findings of fact that the Respondent had informed Mr Tredrea in October 1995 that his wife would be running the St Day Inn before any rumour or suspicion had fallen upon him and that he [the Respondent] would be living there.  Mr Tredrea had asked him, in effect, whether he was working there, and he had said no.  Mr Tredrea then said he did not consider the matter of any great importance.

	The description of what happened at the ensuing disciplinary meeting is clearly set out in paragraph 2 (xiv) of the Industrial Tribunal decision.  It was plainly a very unsatisfactory meeting.  The Respondent declined to have a representative present.  He was, on the findings of the Industrial Tribunal, very agitated and became angry during the meeting.  He considered that he had been spied upon.  He did not allow Mr Bowes to complete the reading of the enquiry agent’s report and simply wished to be told at once what the employer’s decision was.  

	On the findings of the Industrial Tribunal he did not tell Mr Tredrea or Mr Bowes that he was suffering from depression or that his doctor had advised him to help out in the public house for therapeutic reasons.  A brief adjournment took place so that Mr Eccleston could take notes, as an independent witness, and ultimately, at the conclusion of the meeting, Mr Bowes found gross misconduct proved, in that the Respondent had defrauded the Appellants by claiming sick pay whilst working in the public house and dismissed the Respondent there and then.

Decision of the Industrial Tribunal
	The Industrial Tribunal clearly held that the employers believed that the employee Respondent had been guilty of gross misconduct and that they had reasonable grounds to sustain that belief.  The Industrial Tribunal accepted that the Appellants had approached the hearing with an open mind and accepted that in the light of the investigation they in fact held, and in the light of the Respondent’s reaction to that investigation, it was readily understandable that the Appellants’ representatives had concluded that the Respondent was guilty.  However the Industrial Tribunal nevertheless decided that the decision to dismiss was “manifestly unreasonable”.  They set out their reasoning quite shortly in paragraph 7 of their reasons.  Since this is the crucial paragraph over which the argument has taken place, we consider it appropriate to set it out in full:
“7	  We accept the evidence of Mr Bowes and Mr Tredrea virtually entirely and as we have indicated understand their thinking, but we find that the dismissal was manifestly unfair.  The time span that the applicant was given to prepare for the disciplinary hearing was unreasonably short and bearing in mind that they knew he had been signed off sick for over four months and that the problem was supposed to be that his medication doses had not been sorted out that his reaction indicated ongoing problems and a lack of proper understanding and consideration of what was then required.  The applicant suggested that the respondent should have sought medical information but we see nothing to justify that and the fact that they did not do so is caused by him not giving them the full details of his medical problems.  We are satisfied that if he had mentioned depression or therapeutic reasons that they would have adjourned the hearing, the fact remains that they allowed Mr Evans due to his illness to pressure them into rushing the disciplinary through and so the opportunity for a proper investigation was lost.”

	We turn to consider the submissions that were made to us.  We commend Mr Galbraith-Harten, Counsel for the Appellants, for the tenacity and clarity of his submissions to us.  The Respondent did not appear before us, but we have of course considered his answer and what he has to say at paragraph 3.  We do not of course in any way criticise the Respondent for his non- attendance.  He is entitled to rely upon the decision of the Industrial Tribunal.

	The submissions made to us by Counsel for the Appellants are as follows:

1.	On its true construction the reasoning of the Industrial Tribunal in paragraph 7 amounted to the Industrial Tribunal impermissibly substituting its own view for that of the employers, and failing to apply the correct test as contained in Section 57(3) of the 1978 Act (now Section 98(4) of the 1996 Act).

2.	Further, or in the alternative, the Industrial Tribunal failed to give sufficiently clear reasons for its decision.  

3.	The conclusion of the Industrial Tribunal that the decision of the Appellants to dismiss was “manifestly unfair”, was perverse i.e. one which no reasonable Industrial Tribunal properly directing itself could have reached.  
	In developing the first submission Counsel for the Appellants submitted that it was incumbent upon the Industrial Tribunal to make sufficiently clear that they had identified and applied the correct test, namely the test of reasonableness in Section 57(3); either by expressly referring to it in their reasons or at least so that it is apparent from their decision that the correct test had been identified and applied.  He correctly referred us to Conlin v United Distilleries [1994] IRLR 169 and a passage at page 170.  He submits that on a fair reading of paragraph 7 of the decision the Industrial Tribunal have erred in this respect.  He reminded us, correctly, by reference to the well-known authority of Iceland Frozen Foods Ltd v Jones [1982] IRLR 439 that the Industrial Tribunal must not substitute its own view for that of the employers, provided the employer’s decision to dismiss, in all the circumstances, is within the band of reasonable responses of an employer.

Decision on the first submission
	Whilst we accept the correctness of the authorities submitted to us by Counsel for the Appellants, in our judgment it is equally clearly established from the authority of BHS v Burchell [1980] ICR 303 that in order to act reasonably within Section 57 (3) of the 1978 Act in deciding to dismiss, the employer must have carried out as much investigation into the matter as was reasonable in all the circumstances.  It is clear from very well-known authorities such as Khanum v Mid-Glamorgan Area Health Authority [1978] IRLR 215 and Spink v Express Foods Group [1990] IRLR 320, that the employer must carry through a disciplinary procedure which is reasonably fair in all the circumstances of the case as known and understood by the employer.  Thus in the case of Spink the then President Mr Justice Wood said, in essence, that the employee must know the case he has to meet; should hear or be told of the important parts of the evidence in support of that case; should be given the opportunity to criticise or dispute that evidence, and to adduce his own evidence and argue his case.
	It follows from these principles in our judgment that an Industrial Tribunal is plainly entitled and indeed obliged to consider, in any given case, whether the disciplinary procedure in fact implemented by the employers was fair and reasonable in all the circumstances of the case, as known and understood by the employers, the Industrial Tribunal acting as an Industrial jury.  That is part of their function under Section 57(3).  In our judgment on a fair reading at paragraph 7 of the decision, it is apparent that the Industrial Tribunal were there addressing their minds, by necessary implication, to that aspect of their function in accordance with Section 57 (3).  In our judgment it is plain from that paragraph that the Industrial Tribunal were not in any way substituting their own view, but were on the contrary deciding whether in all the circumstances the employers had acted reasonably with regard to the actual disciplinary procedure which they had carried out in all the circumstances.  

	The plain import of the Industrial Tribunal’s decision in paragraph 7 is that they concluded that the Appellants’ procedure was not reasonable implicitly by reference to Section 57(3) because it was not reasonable for the Appellants: 
	(a)  to have given such a very short time-span for the respondent to prepare himself for the 	disciplinary hearing - only a matter of a mere two to three hours.
	(b)  to have allowed the conduct of the respondent at the disciplinary hearing to have 	caused them, as the Industrial Tribunal found, to rush the disciplinary hearing through, 	with the result, upon the findings of the Industrial Tribunal, that “the opportunity for a 	proper 	investigation was lost”.

	In so concluding, in our judgment the Industrial Tribunal clearly took into account when weighing the matter up, the fact that the Respondent had not sought at the disciplinary meeting to justify his conduct in apparently working at the public house by reference to medical advice, and had not put the Appellants on notice in that regard, and further that the Appellants had reasonably concluded that the Respondent’s conduct was because of his guilt.  

	However, in our judgment the Industrial Tribunal was entitled to conclude as an Industrial Jury that it was nevertheless unreasonable for the Appellants to rush through a disciplinary hearing within a few hours of the Respondent first being challenged about the matter.  There was ample material before the Industrial Tribunal, in our judgment, upon which the Industrial Tribunal could arrive at this conclusion, correctly applying Section 57(3).  It goes without saying that the Appellants were masters of their own disciplinary procedure; they must have appreciated the importance of the matter being fully and carefully investigated; in particular the question whether the Respondent was actually being paid for the work he was apparently doing was a matter of importance.  

	On the findings of the Industrial Tribunal the Respondent was plainly in an agitated state during the disciplinary hearing and was protesting repeatedly that he had to leave because his wife had an appointment.  To the knowledge of the Appellants the Respondent was suffering at that time from an illness.  In our judgment it was open to the Industrial Tribunal to conclude as they did by necessary implication, that there was no reason why the Appellant should not have taken a much less peremptory and rushed approach to the disciplinary hearing.  It was open to the Industrial Tribunal to conclude that any reasonable employer would have given notice of a meeting at a time convenient to the parties and at the same time given the Respondent employee proper notice of the case he had to meet and a proper opportunity to meet the case against him and call witnesses if necessary.  In our judgment all of this is implicit in the reasoning of the Industrial Tribunal.

	Much stress was laid by Counsel for the Appellant on the fact that the Industrial Tribunal found in paragraph 13 that it only needed a very short explanation for the Appellants to be put on notice that the Respondent’s defence would be that he was working for therapeutic reasons on medical advice with regard to his depression.  However in our judgment it is plain that at that stage the Industrial Tribunal were considering the question of contribution and we do not consider that this finding in any way detracts from the Industrial Tribunal’s findings in paragraph 7 when they were dealing with liability.

	We accept that it would have been much better if the Industrial Tribunal had expressly referred to Section 57(3) of the 1978 Act but in our judgment it is clear that they properly identified it and applied it.

	In all the circumstances here on careful examination of the Industrial Tribunal’s decision and despite the well presented arguments made to us by Counsel for the Appellants, we conclude that there is no error of law in the Industrial Tribunal’s decision and that they did not substitute their own decision for that of the employers.

The second submission
	We can deal more shortly with the second and third submissions.  With regard to the second submission we were helpfully reminded of the authorities of Meek v City of Birmingham [1987] IRLR 250 and Speciality Care Plc v Pachela [1996] IRLR 248, to the effect that an Industrial Tribunal must give sufficiently clear reasons for their decision, so that an appeal tribunal can examine them to see whether there is any arguable point of law arising in favour of a party agreed by such a decision.  In our judgment the reasoning of paragraph 7 is sufficient to amount to a clear statement of a reason why the employers lost: namely that they had not acted reasonably or fairly in regard to the disciplinary hearing.

Third submission
	Finally we should say that we cannot regard the decision of the Industrial Tribunal as being perverse.  In our judgment for the reasons we have stated earlier, in reference to the first submission, there was evidence and material before the Industrial Tribunal which entitled them to arrive at the conclusion they did in paragraph 7 of their decision.  

	Accordingly for those reasons this appeal must be dismissed.  We refuse leave to appeal.