Appeal No.	 EAT/299/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 10 July 1998

Before
THE HONOURABLE MR JUSTICE KIRKWOOD
MR R JACKSON
MRS M E SUNDERLAND JP

COMPASS SERVICES UK LTD t/a CHARTWELLS	APPELLANTS

MR D TOLLAND	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR N H CRIGHTON
(Representative)
Human Resources Director
Chartwells
Icknield House
40 West Street
Dunstable
Bedfordshire
LU6 1TA	
For the Respondent	MR A FREER
(Solicitor)
Instructed by:
Mr Andrew Freer
Legal Officer
GMB
National Legal Department
22-24 Worple Road
London
SW19 4DD	

	MR JUSTICE KIRKWOOD:	This is an appeal by an employer from the decision of an Industrial Tribunal sitting at London (South) on 15th December 1997. The decision was that the employee was unfairly dismissed, and an award of compensation was made in the sum of £6,247. The extended reasons for the decision were sent to the parties on 29th January 1998.

	The employee, Mr Tolland, was employed as Chef Manager by the appellant company at the Lewisham College site. He had worked at that site since January 1992. To start with he was employed by Lewisham College but recently the appellant company had taken over the catering contract. Mr Tolland had been Head Chef but Mr Brown, the appellant’s Catering Manager, had identified him as worthy of promotion and he had been promoted to Chef Manager on 15th May 1997.

	In 1997 it had been intended to introduce a system of daily stores control but that was unworkable, so stock taking was done monthly by Mr Brown or by Mr Brown and Mr Tolland.

	In May or June 1997 Mr Brown heard, at second-hand, that somebody who had worked at Lewisham College was saying that Mr Tolland took stock for his own use. Mr Brown saw that person, a Ms Da-Silva, who had worked until the end of May 1997 at the appellant’s Deptford site. The manager at the Deptford site was Mr Tolland’s partner, Miss Robinson, at the material times. Mr Brown took a statement from Ms Da-Silva in which she said that she had seen Mr Tolland bring cooked foods to the Deptford site. She also said that she had seen him take drinks and sometimes dry goods from the Deptford site. She did not say whether he was taking them for his own use or to take them to Lewisham College. Ms Da-Silva said that she could not be sure that some cooked chicken portions had been placed on the counter the day after preparation and the suggestion was that somebody, unidentified, had taken them. Ms Da-Silva also said that she had seen Mr Tolland and Miss Robinson leaving the Deptford site on a Sunday and Mr Tolland had said he was there to fix something.

	Mr Brown then investigated with the new Chef Manager at Deptford a query over the supply of bacon.

	In June or early July Mr Tolland was off sick for two weeks. On 14th July Mr Tolland was suspended. Between 14th and 17th July Mr Brown interviewed and took statements from some seven or eight witnesses. A disciplinary hearing took place on 22nd July 1997. Mr Tolland was dismissed by Mr Brown together with Ms Gumbley, the Human Resources Manager. Mr Tolland’s appeal to the Senior Operations Manager was unsuccessful. On 16th September 1997 Mr Tolland applied to the Industrial Tribunal complaining of unfair dismissal. He denied that he was responsible for any stock discrepancies.

	The case turned on two things. One was the findings of fact by the Industrial Tribunal. The second was application of the guidance in the decision of the Employment Appeal Tribunal in the case of British Home Stores Ltd v Burchell [1980] ICR 303. In that decision is the very well known passage from the judgment of Arnold J which says this:

“... What the tribunal have to decide every time is, broadly expressed, whether the employer who discharged the employee on the ground of the misconduct in question (usually, though not necessarily dishonest conduct) entertained a reasonable suspicion amounting to a belief in the guilt of the employee of that misconduct at that time. That is really stating shortly and compendiously what is in fact more than one element. First of all, there must be established by the employer the fact of that belief; that the employer did believe it. Secondly, that the employer had in his mind reasonable grounds upon which to sustain that belief. And thirdly, we think, that the employer, at the stage at which he formed that belief on those grounds, at any rate at the final stage at which he formed that belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case.”

The fact of the belief the employer had in his mind, reasonable grounds upon which to sustain that belief and that the employer had carried out as much investigation as was reasonable in all the circumstances of the case, were the matters upon which the tribunal had to decide.

	The key finding of fact of the Industrial Tribunal was at paragraph 18 of its extended reasons:

“The Tribunal therefore find that the Respondents did not have a genuine and reasonable belief that the Applicant was concerned in the loss of any stock and that he was therefore guilty of gross misconduct.”

	It was not in issue before the tribunal that the employer in fact held the belief he said he held. What was in issue was whether that was a reasonable belief to hold, whether there were reasonable grounds on which to sustain his belief. 

	What the Industrial Tribunal did and was, in our judgment, quite entitled to do, was to look carefully at what material Mr Brown gathered in his investigation to see if that provided reasonable grounds.

	Mr Brown interviewed, as we have said, a number of witnesses between 14th and 17th July 1997. The Industrial Tribunal looked at all those witness statements in order to see what they amounted to. The tribunal referred to the statement of Ms Allen, Chef Manager at the Deptford site who had heard a rumour that the employee and Miss Robinson ran or had something to do with a restaurant in Greenwich. Also that the employee would empty vending machines of cash and held Miss Robinson to count it.

	The tribunal considered the evidence gathered from Dean Walker, the Assistant to Mr Tolland. In the period when Miss Robinson was at Deptford, Mr Tolland took goods there at least once a week. Mr Walker was unable to identify the goods. Mr Tolland made two 14” pizzas and said he intended to take them home. Mr Tolland’s observation was that the pizzas were required for customers who paid for them. Two salmon were delivered. Mr Tolland insisted on preparing the fish himself that day. Only one salmon was on the counter next day. 

	The tribunal looked at the contribution of a witness, Julie Lake. When the Kitchen Porter was absent, Mr Tolland took rubbish downstairs. He did not ask the other porter to do so. He took some goods to the College training store.

	There was a statement from Nigel, the Kitchen Porter. He loaded Mr Tolland’s car with goods to go to the Deptford site. He had not noticed any goods taken out in the previous two months.

	A witness, Anna, spoke of cooked foods being taken to Deptford.

	A porter, Mr Butcher, had been told that Mr Tolland cooked chickens to take home. He overheard another worker saying “if you like a good nosh got to Danny’s”, which was taken to be a reference to Mr Tolland’s restaurant interest.

	The Industrial Tribunal considered the written statements taken by Mr Brown and said that they were predominantly hearsay or comment. Most of the comments do not allege that Mr Tolland was concerned in the loss of stock. There was no evidence establishing that stock was missing. No stock sheets appeared to have existed. Mr Brown did not have stock returns before him nor indeed did the Industrial Tribunal. There was no evidence that any one particular item of stock had gone missing. There was no evidence that stock had been removed by Mr Tolland.

	The Industrial Tribunal also made broader findings on the evidence. It said it appeared that stock had moved freely between Lewisham and Deptford sites. There was no control or monitoring of that system in existence. The fridges and other areas where stock was kept were freely available to all members of catering staff and probably others. Mr Tolland’s duty ended at 3 p.m.. The counters did not close down until 8 p.m.. There was, therefore, ample opportunity for other members of staff to take stock if indeed it was established that any was missing.

	In addition to the central paragraph 18, the Industrial Tribunal found at paragraph 17:

“It is the Tribunal’s finding that the investigation was not reasonable in that it failed to identify stock that was missing and/or that if any stock were missing, this was due to the actions of the Applicant.”

	The appellant seeks to challenge the decision of the Industrial Tribunal with four points of law.

	Before coming to them, it is necessary in the circumstances of this case that we make plain that an appeal lies to this Appeal Tribunal on points of law only. Questions of fact are entirely a matter for the Industrial Tribunal. The Industrial Tribunal hear the evidence and they decide what facts they accept and what they do not. They make the findings of fact. They decide what evidence is relevant and material. They decide what weight to attach to the evidence that they hear. Findings of fact can only be challenged in this Appeal Tribunal if the findings themselves amount to an error of law. That is to say, if the Industrial Tribunal make a finding of fact in respect of which there is no evidence at all to support it, or if the Industrial Tribunal make a finding of fact on the evidence before it which no reasonable tribunal, having the totality of the evidence before it, could reach. In those circumstances, and in those circumstances alone, can this Appeal Tribunal interfere with the findings of fact by the Industrial Tribunal.

	That was why when the appeal was opened I stressed to Mr Crighton that we decide the appeal solely on the basis of findings of fact by the Industrial Tribunal. Mr Crighton tried to assist us by giving background information and pointing to pieces of evidence that the Industrial Tribunal had before it. That is not a course which we are enabled to absorb for the reason I have given.

	The first point of law argued is that the Industrial Tribunal wrongly required that the investigation should put the matter beyond doubt in a criminal context. In other words, it is said that the Industrial Tribunal wrongly required that before dismissing Mr Tolland, the employer should have been satisfied of his guilt beyond reasonable doubt. 

	That, we assume, is an inference the appellant seeks to draw from the extended reasons, but it does not seem to us to be sustainable. There is no reference in the extended reasons to seeking a standard of proof of the kind asserted by Mr Crighton. Looking at the findings in paragraphs 15 and 16 of the extended reasons, which I have summarised, they are not expressed in terms of insufficient evidence. They are expressed in terms of no evidence at all.

	The second of ground of appeal relied upon is that the Industrial Tribunal erred in law in putting itself in the position of the employer. Mr Crighton sought to rely on a whole range of background information in the possession of the employer, which is not to be found in the findings of fact by the Industrial Tribunal, and upon the circumstance that, as it was said, the gross profit figures of the concern were unexpectedly low until after Mr Tolland had left when they increased. I will come to the question of those figures in due course.

	But having regard to the guidance of Arnold J in Burchell, it seems to us that the Industrial Tribunal embarked upon what was necessary to reach the decision as to what Arnold J said was necessary for them to decide. The examination of the material before Mr Brown was precisely what was necessary to enable it to decide the question it had to decide, namely whether the employer had reasonable grounds for its belief in gross misconduct. The Industrial Tribunal found that it did not. That finding was one entirely within the ambit of the Industrial Tribunal’s responsibility. 

	The third ground of appeal advanced is that the finding that the investigation was not a reasonable one was perverse. 

	Earlier in this judgment I said that paragraph 18 of the extended reasons was the key to the decision. There, reading “and” disjunctively, the tribunal found:

“...that the Respondents did not have ... reasonable belief.”

That is to say that they did not have reasonable grounds for their belief. 

	This ground challenged the decision at paragraph 17 in which the Industrial Tribunal found:

“... that the investigation [itself] was not reasonable.”

	Questions of reasonableness are a matter for the Industrial Tribunal. The Industrial Tribunal gave particularity to its reason for saying that the investigation was not reasonable. It identified the failure to identify that stock was missing at all or that if any stock was missing, this was due to the actions of Mr Tolland. In that respect, the Industrial Tribunal held that the investigation was not reasonable because of those glaring omissions in it and it was those omissions that were, indeed, part of the matter that led the tribunal to find that there were not reasonable grounds for the belief held.

	The fourth ground for appeal advanced is that the Industrial Tribunal failed to take account of evidence that profits had risen after Mr Tolland’s dismissal and had failed to record the evidence. It is said that there was evidence that the gross profit rose from 44% to over 50%.

	We have been shown some figures which we understand were before the Industrial Tribunal which show that in the period immediately before Mr Tolland’s promotion to Chef Manager, so far as that can be identified, the gross profit was 43%, and in the period immediately after his promotion to Chef Manager, so far as that can be separately identified, the gross profit was 47%. Later in the year, in the Autumn, the gross profit rose to in excess of 50%. 

	But the question of what is or is not relevant to its consideration is a matter for the Industrial Tribunal, as is the weight attached to the evidence. We have in mind, in particular, that the Industrial Tribunal was assessing the material available at the time and that variation in the gross profit figures may be attributable to a range of factors. 

	Mr Crighton has helpfully referred us to the decision of the House of Lords in W Devis & Sons Ltd v Atkins [1977] ICR 662. That decision makes absolutely clear that the determination of the question whether a dismissal was fair or unfair depended on the reasons shown by the employer, and the tribunal could not have regard to matters of which the employer was unaware at the time of the dismissal since it had to consider the conduct of the employee at the time. So the subsequently produced profit figures, which were inevitably not available to Mr Brown at the time he made his decision, were irrelevant to the question on whether there was reasonable ground for the belief.

	Finally, the appellant submits that if this was an unfair dismissal, compensation should have been reduced or reduced to nil in the light of events subsequently proving that the employer was right. Again, Mr Crighton referred to Devis and to the second part of the decision in that case, which makes clear that events coming to light subsequently, demonstrating that the employee was in fact guilty, can be taken into account on the question of compensation because, as Lord Dilhorne said in his speech:

“It cannot be just and equitable that a sum should be awarded in compensation when, in fact, the employee has suffered no injustice by being dismissed.”

	Again this material was before the Industrial Tribunal. It was plainly open to the Industrial Tribunal to conclude, if that is what it did, that the upward adjustment in gross profit proved nothing to the detriment of Mr Tolland. Because as Mr Crighton himself said in argument, there can be a range of factors and variations in profit results. As it is, the Industrial Tribunal, charged with the task of evaluating evidence and deciding what was relevant and what was not and what weight it should attach to that it found relevant, said nothing about Devis. It did not find it necessary to refer to a Devis reduction at all. Again, that was something that lay properly within their power.

	The result of all this is that this appeal fails. There are no arguable points of law impugning the decision of the Industrial Tribunal. We did not need to call on the representative for Mr Tolland. The appeal will accordingly be dismissed.

	MR JUSTICE KIRKWOOD:	An application for costs is made on behalf of the successful respondent to this appeal. In support of that application Mr Freer deploys the argument that this appeal having been dismissed without him even being called upon, it was dismissed as a hopeless appeal and should properly be regarded as improper or unnecessary so as to bring it within the relevant rule.

	In response to that, the principal argument advanced by Mr Crighton for the appellant company is that the case passed the hurdle of a preliminary hearing in which the Appeal Tribunal took the view that there was an arguable point.

	It seems to be a common misapprehension amongst appellants that clearing the hurdle of a preliminary hearing automatically provides an impenetrable shield against an order for costs upon eventual dismissal of the appeal. 

	I stress that that is a misapprehension. The question of costs will be considered in the circumstances as they pertain at the disposal of the appeal and the appellant remains at risk, notwithstanding that he has been allowed to bring his case to a full hearing.

	Having made that clear, I add that we have discussed the application for costs in the circumstances of this particular case and we have reached the conclusion that the right order to make is no order for costs.