Appeal No.	 EAT/937/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On  1 June 1999

Before
HIS HONOUR JUDGE PETER CLARK
MR P A L PARKER CBE
MS B SWITZER

VAUX BREWERIES LTD	APPELLANTS

MR I McNAUGHTON	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR A JACK
(of Counsel)
Instructed by:
Mr M I Hodgson
Company Solicitor
Vaux Group Plc
The Brewery
Sunderland
SR1 3AN	
For the Respondent	MR A TABACHNIK
(of Counsel)
Instructed by:
Mr P L Meldrum
Messrs Irwin Mitchell
Solicitors
St Peter's House
Hartshead
Sheffield
S1 2EL	

	JUDGE PETER CLARK:	This is an appeal by the employer, Vaux Breweries Ltd [“the Company”] against a decision of the Middlesborough Employment Tribunal, promulgated with extended reasons on 23rd June 1998, upholding the applicant, Mr McNaughton’s complaint of unfair dismissal. The tribunal went on to find that the applicant had contributed to his dismissal by his own conduct to the extent of 35%.

The facts

1.	The Company has a large brewery business and a number of tied houses, including the Ketton Ox Public House at Yarm, Stockton-on-Tees [“the premises”]. At the relevant times the applicant and his wife were joint managers of the premises. He had commenced employment with the Company, or its predecessors in October 1985. He had no adverse disciplinary record prior to the material events.

2.	In August 1997 two former female employees at the premises, Lisa Dixon and Joanne Dunn presented complaints of sex discrimination to the Employment Tribunal naming the Company and the applicant as respondents. The nature of their cases, set out in those complaints, appear at paragraphs 5 and 6 of the tribunal’s reasons. In short, both complained of sexual harassment by the applicant, particularly Ms Dixon.

3.	Having been served with those proceedings the Company arranged a meeting on 8th September 1997 attended by Mr Lowe, the personnel director; Mr Carter, the retail division manager; Miss Smith, a Company solicitor and the applicant and his wife.

4.	The detailed allegations by the two complainants were put to the applicant. He denied most of the allegations but made some partial admissions, viz:

(1)	It was alleged that on several occasions he had boasted to customers that the best part of the job was when he went down the cellar with the staff, who were all female. He admitted that he did joke about going into the cellars with members of staff.

(2)	To the allegation that he had told staff if they did something wrong, such as breaking a glass, he would say “if you do that again I will tie you up to the rafters and thrash you”, he accepted that on one occasion, when a barmaid broke an ashtray he had jocularly talked of a “thrashing” but had not mentioned rafters.

(3)	It was alleged that when the complainants or other female staff walked past him he would often say “squeeze me” and on occasions when he said this he would stand behind them and hold them by the hip and move them sideways. That allegation was admitted.

(4)	Finally, Ms Dixon alleged that on 14th June 1997 she stayed overnight at the flat above the premises at the applicant’s invitation when his wife was away. Ms Dixon was to work the Saturday night and Sunday morning shift and the applicant would not pay for a taxi for her. She said that after work on that the Saturday she went up to the flat and had a cup of tea with the applicant. On that occasion, she alleged that he steered the conversation to sexual things and asked her if she loved her boyfriend; said that she had very nice boobs and that he had been dreaming about nibbling her nipples. When she had got ready for bed and was going upstairs he called out to her saying that she did not need to sleep upstairs and when she refused he asked her for a cuddle. Following this alleged incident Ms Dixon claimed that she decided to leave the employment and did so. In response to that allegation, the applicant agreed that Ms Dixon had stayed at the flat; he described the alleged conversation about her boyfriend and the reference to her boobs and such like as fantasy on her part. As to the alleged invitation to join him in the bedroom, he accepted that he said, again jocularly, that she might have gone into his room. It was not a serious invitation and did not cause offence to Ms Dixon.

	That was the extent of the applicant’s admissions.

5.	Following that meeting the respondent attempted to see the two complainants. They were unsurprisingly unwilling to meet the respondent’s representatives. The Company did not interview other members of staff at the premises on the grounds that to do so would, in their view, undermine the applicant’s authority and would embarrass him and that some of more serious allegations were not witnessed by other members of staff and thus such an investigation would prove unprofitable.

6.	In due course the claims of Ms Dixon and Ms Dunn were compromised by the Company after they entered Notices of Appearance admitting a degree of sexual harassment by the applicant, their employee, and offering apologies to the complainants for any embarrassment which they had suffered whilst working at the premises.

7.	Disciplinary proceedings were then taken against the applicant, commencing with his suspension on 18th September 1997. He was interviewed by Mr Carter on 29th September in the presence of Mr Waters, a personnel manager. At that meeting the applicant was asked again for his comments on the allegations raised in the two complainants’ Originating Applications. He asked whether the respondent had seen the complainants and was told that this had not been possible. He also complained that no other members of staff at the premises had been interviewed.

8.	The meeting was adjourned without a decision there being taken on the applicant’s future with the Company. The tribunal found that Mr Carter then took advice from Mr Lowe and Mr Lowe came to the conclusion, although he had not been present at the disciplinary hearing, that it would be correct to dismiss the applicant. Thereafter Mr Carter sent a letter of dismissal to the applicant dated 1st October 1997, setting out the respondent’s reasons for dismissal. That letter is set out in extenso in the tribunal’s reasons and we need not set it out in this judgment, although we have carefully considered it.

The Employment Tribunal decision

9.	The tribunal found that the reason for dismissal related to the applicant’s conduct, that is, indecent behaviour towards female employees; a potentially fair reason for dismissal.

10.	As to the question of reasonableness under s. 98(4) of the Employment Rights Act 1996 the tribunal found that the dismissal was unfair for two reasons:

(1)	The Company failed to carry out a reasonable investigation. In the view of the tribunal it would have been reasonable and indeed necessary to make enquiries of all other bar staff to see if the admissions and explanations given by the applicant in respect of the Particulars of Complaint made by Ms Dixon and Ms Dunn were in fact true.

(2)	Although the disciplinary hearing was on the whole reasonable, the tribunal found that the part played by Mr Lowe in the dismissal was quite unacceptable. It would have been acceptable for Mr Carter alone to make the findings of fact and then consult Mr Lowe only as to sanction, but it was unacceptable for Mr Lowe to evaluate the evidence having himself not been present at the disciplinary interview.

	Finally, the tribunal went on to make a finding of contribution, assessed at 35%; it made no deduction under the so-called Polkey principle and then assessed compensation.

The Appeal

11.	Mr Jack, on behalf of the Company, takes three points in this appeal, clearly identified by the President, Morison J, in a short judgment which he gave on behalf of this tribunal at a preliminary hearing held in this case on 4th November 1998. The first two points relate to the finding of unfairness; the third to the tribunal’s treatment of the Polkey deduction question which goes to remedy.

12.	We deal first with the finding of unfairness.

	Mr Jack submits that the tribunal’s finding that the Company failed to carry out a reasonable investigation is flawed, in that the Company decided to dismiss the applicant on the basis of his admissions, as appears from the letter of dismissal. In these circumstances no further investigation was necessary to ascertain the facts. The two complainants could not be interviewed. No useful purpose would be served by interviewing the bar staff as to the applicant’s admissions, particularly where the most serious allegation was not witnessed by anyone. That submission, it seems to us, accords with the statement of principle appearing in my judgment in Boys and Girls Welfare Society v McDonald [1996] IRLR 129, paragraph 29, following the earlier EAT decision in RSPB v Croucher [1984] IRLR 425.

13.	In response, Mr Tabachnik submits that the tribunal was entitled to conclude that a reasonable investigation on the facts of this case required interviewing the bar staff in order to judge the applicant’s case in mitigation before his employer, namely that what he admitted doing was done jocularly and so far as he was aware, without offence to any members of staff including the complainants. However, he conceded that if, without further investigation, a reasonable employer would have been entitled to dismiss the applicant on the basis of his admissions in the circumstances of this case, then the tribunal decision cannot stand. He does not seek to support the decision solely on the basis of the tribunal’s finding as to the part played by Mr Lowe in the decision to dismiss, a finding which Mr Jack seeks to attack in his second limb of the appeal.

14.	In our judgment Mr Jack’s first ground of appeal is made out. It seems to us that it is within the range of reasonable responses for an employer faced with the admissions made by this applicant, in a case involving  young female members of staff who have left the employment complaining of sexual harassment, employed as a manager of a unit employing solely female staff, for that employer to impose the sanction of dismissal. The fact that another reasonable employer might have dealt with the matter by a sanction short of dismissal such as warning, does not render the dismissal unfair. In our judgment, this tribunal reached a perverse conclusion in finding that the dismissal was unfair on the ground that a reasonable investigation required the Company to interview the bar staff.

15.	In these circumstances we shall allow the appeal against the finding of unfairness. It follows that Mr Jack’s third point, relating to the Polkey deduction, is rendered academic. 

16.	Having allowed the appeal, we have further reached the clear conclusion that the tribunal’s decision in this case was plainly and arguably wrong. It cannot be said that no reasonable employer would have dismissed the applicant on the admitted facts before the Company. Accordingly we shall substitute a declaration of fair dismissal and dismiss the application.

17.	We refuse Mr Tabachnik’s application, on behalf of the applicant, for leave to appeal to the Court of Appeal, on the grounds that the proposed appeal has no real prospect of success.