Appeal No.	EAT/1188/98

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 22 March 2000

Before
HIS HONOUR JUDGE COLLINS CBE
LORD DAVIES OF COITY CBE
MRS D M PALMER

LADBROKE RACING LTD	APPELLANTS

MR P SACKETT	RESPONDENT

Transcript of Proceedings

FULL HEARING

Revised

	APPEARANCES

For the Appellant	John Bowers QC
Instructed by:
Messrs Halliwell Landau
Solicitors
St James Court
Brown Street
Manchester
M2 2JF	
For the Respondent	Thomas Linden
(of Counsel)
Instructed by:
Pattinson and Brewer
Solicitors
30 Great James Street
London
WC1N 3HA	

JUDGE COLLINS:

1.	This is an appeal against the decision of an employment tribunal sitting at London North.  The extended reasons were promulgated on 1 July 1998 and that in itself may explain some of the problems which have arisen in this case because the actual hearing took place on 4 February of that year. There has been no indication as to the reasons for the delay in disseminating the judgment.  By their decision the tribunal held that the respondent was unfairly dismissed from his position as Base Manager with the appellants. 

2.	The facts, so far as necessary to be recounted for the purposes of this appeal, are that Mr Sackett the respondent is now 40 years old. Between 12 August 1985 and 15 May 1997 he was what is described as a Base Manager for the appellants which meant that he was responsible overall for some 13 betting shops in the West and North West London area.  

3.	A 19-year-old called Daniel Papantoniou was an employee; he worked in the shops and it was suggested that he had conducted himself in a way which was improper in a variety of respects.  He had, it is suggested, been playing the slot machines, betting in the shop, taking money out of the till for betting, concealing £200 under his till tray and also issuing subs to staff without authority, although that particular allegation was not the subject of consideration at the hearing.  And it was further suggested that other employees made Mr Sackett aware of these concerns and that he failed to take appropriate steps to deal with them.  The employers do not suggest that Mr Sackett should have dealt with them himself, on the contrary they assert that it would have been wrong for him to do so. They contend he should have reported the matter so it could have been investigated. The reasons for that hardly need emphasis when one bears in mind the nature of appellants' business and the overwhelming need to monitor and ensure the integrity of all members of staff in the widest sense .  

4.	The appellants investigated  in May 1997 and a hearing took place as a result of which Mr Sackett was dismissed.  The reasons given to him in the letter of 16 May 1997 which is set out in the tribunal’s reasons but of which we have not seen the original are these:-
.“You have been summarily dismissed for Gross Misconduct for the reasons stated at the meeting.  In your position as Base Manager you were informed that Daniel Papantoniou was playing slots in our shops and was the subject of other security concerns…. On the balance of probability I believe you have misled the company on this issue…. I have lost confidence in your ability to continue in your present role as Base Manager.  It is also inappropriate for me to consider demotion to Shop Manager level because trust is required from all employees…I therefore summarily dismiss you for Gross Misconduct from the company.”

5.	There was an appeal hearing on 6 June 1997 which affirmed the dismissal decision by Mr Rust. What the tribunal had to consider was whether the employers had shown what the reason for the dismissal was along the threefold lines suggested in British Homes Stores Ltd v Burchell [1980] ICR 303 and once the employers had succeeded in establishing the reason, they had to proceed to consider whether in all the circumstances they were fair in treating that reason as grounds for dismissing Mr Sackett.  And it is when one turns to consider the way in which the tribunal approached those issues that inconsistencies and deficiencies in their reasons appear.  In paragraph 10 of the tribunal’s reasons they say: 
.“From the evidence it appears to us that security was looking for something for which they could blame the Applicant.
And in paragraph 11: -
“We find the true reason for disciplining the Applicant was because he made a complaint against Jim Grant and had accompanied Mr Papantoniou to his disciplinary hearing.”

6.	I pause to note that it looks as though there was an error in referring to the appellant accompanying Mr Papantoniou to his disciplinary hearing; if he accompanied anybody it was a Mr Dunno but the discrepancy is immaterial for the purposes of this judgment.  Pausing there, if the tribunal had gone no further, a reader of their judgment would have concluded that the entire disciplinary process was vitiated, first because of the motive of the employer in conducting it and second because the real reason for the dismissal was an inadmissible one.  If the tribunal had concluded the matter there, this appeal could hardly have been brought.  But in the event, the tribunal turned to consider the substantive allegations and in paragraph 14 they conclude that the employer did genuinely believe that the applicant had condoned breaches of discipline and in paragraph 15 say: 
“We are satisfied that the reason for dismissal was gross misconduct.”

7.	It is difficult to reconcile the conclusion that the reason for dismissal was gross misconduct  with the finding that the true reason for disciplining the appellant was that he made a complaint against Jim Grant and accompanied Mr Papantoniou to his disciplinary hearing.  Making every allowance for the factors in favour of liberality in interpreting a tribunal judgment identified by Bingham LJ in Meek, it is difficult to read this judgment in a way which encompasses both of those findings. 

8.	Having determined that the reason for dismissal was gross misconduct the tribunal set out the threefold Burchell test in paragraph 14 of their judgment.  As I have indicated they held that the employer had a genuine belief that the applicant had condoned breaches of discipline and if that is correct, it makes their earlier finding about their motives irrelevant.  And then they go on in this way: -
“We find (b) that at the time when it reached its decision to dismiss the Applicant, it did not have reasonable grounds for concluding that he had committed such misconduct;
(c) that the employer had not carried out as much investigation as was reasonable in the circumstances before reaching a decision.”

9.	Now as Mr Linden rightly points out if that was the tribunal’s view it could and should have stopped there because it means that the employers had failed to show in the Burchell sense what the reason for the dismissal was, the burden of proof being on them for that purpose. It was therefore wholly unnecessary for the tribunal to go on to consider whether the employers had acted fairly in all the circumstances of the case in treating it as a reason for dismissal.  But in fact they did go on to consider it in paragraphs 15 and 16 and they simply set out the relevant statutory provisions  and  the fairness criteria and conclude in paragraph 16: -
“In our judgment the Respondent did not act reasonably and that dismissal was not within the range of reasonable responses open to it.  Accordingly, we find that the dismissal was unfair.”

10.	It was a temptation to this tribunal in view of the complete lack of reasons given by the tribunal for its conclusion in paragraph 16 to read into that paragraph some of the tribunal's earlier findings, particularly in relation to the employers' motive and what the tribunal found to be the real reason for dismissal.  In the end it is impossible to carry out that exercise because it gives rise to its own illogicality and inconsistency since it is very difficult to read its earlier findings about motive into its conclusion about fairness if the tribunal itself had not relied on those matters to conclude that the employer did not have an admissible reason for dismissal.  It  shows that on an overall reading of the decision it is impossible to discover what really was in the tribunal’s mind in reaching its conclusions.  

11.	Looking more closely at the threefold Burchell test, Mr Bowers on behalf of the employers submits that the tribunal's conclusion that the employers did not have reasonable grounds for concluding that the respondent had committed misconduct was perverse.  I repeat that the misconduct in question can be framed in this way; that in being aware of the complaints against Mr Papantoniou, Mr Sackett did not report them to a senior manager with disciplinary powers. The issue at the tribunal found itself turned into a factual one as to whether Mr Sackett was aware of the complaints about Mr Papantoniou.  The tribunal concluded in paragraph 11 as a matter of fact that he was not aware of the allegations about Mr Papantoniou and did not condone his conduct.  Mr Bowers has rightly pointed out that whether the tribunal thought that he was aware of it or not is beside the point.  The question in law is whether the employers had reasonable grounds for believing that he did and in relation to that the reasoning of the tribunal is plainly defective.  In paragraph 12 they refer to the evidence on which the employers relied in coming to the conclusion that he was aware of Mr Papantoniou’s conduct.  We have had our attention invited to the statements of the witnesses which the employers had and which were in the bundle before the tribunal and we have been directed to the particular passages in the evidence in which the witnesses say that they spoke to Mr Sackett and told him what the concerns were.  

12.	Having mentioned all that evidence in paragraph 12 the tribunal  failed to say why they brushed it aside and concluded that it was tenuous and why it did not provide the employers with reasonable grounds for concluding that Mr Sackett was aware of the complaints and therefore had committed misconduct in not reporting them upwards.  There are a number of possibilities and it may be for all we know that the tribunal had very good reasons for coming to that conclusion but regrettably they are not stated in the judgment. Although we entirely accept as we have already indicated the general thrust of Mr Linden’s submissions that the tribunal is not required to give a judgment which is bound to withstand a detailed legal analysis and scrutiny, it seems to us that the employers are entitled to a judgment which they are able to read and have explained to them why, not withstanding the fact that they had witness statements to that effect at the disciplinary stage, those witness statements did not give them reasonable grounds for their conclusion.  

13.	In dealing with the third strand of the Burchell test, the tribunal concluded that the employers had not carried out as much investigation as was reasonable in the circumstances.  There is no indication in the judgment of what more the employers should have done and why what the employers did was inadequate, save the earlier references to the motivation of the employers and the real reason for their dismissal.  But for the reasons I have already given we find it impossible to write those reasons forward into paragraph 14(c) of the reasons.  

14.	For all these reasons we come to the conclusion that the judgment of the tribunal cannot stand.  The case will have to be remitted for a rehearing by a fresh tribunal.  In concluding, we wish to say that the result of this appeal plainly is not a guide to the result of a fresh hearing.  As we have heard during the course of the argument, one substantial area of debate was not even touched upon by the tribunal in its reasons.  If the employers successfully leap the three Burchell hurdles  at the next hearing there still remains the question as to whether, to put it in the way in which Mr Sackett put it in his originating application and which was never picked up the tribunal:-
“The penalty imposed (Summary Dismissal) for the alleged offence was severe in the extreme.” 

15.	He plainly has an argument there and it would be inappropriate for us to express any comment as to its prospects of success. We conclude by saying that this matter relates to events which took place in May 1997.  The original hearing took place in February 1998, the Notice of Appeal was received in August 1998, this is now March 2000. Not only is there likely to be a considerable delay before this matter is eventually resolved but the costs of the legal proceedings so far must be a very substantial burden compared with the amount at stake. We urgently invite the parties to consider whether after the long series of battles which have taken place so far in this case, whether they ought not to seek to resolve the outstanding dispute by means of mediation or some other form of alternative dispute resolution bearing in mind that neither of them can have any assurance about the outcome of the case.