Appeal No. UKEAT/0149/11/ZT

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

		At the Tribunal
		On 29 November 2011
Judgment handed down on 14 March 2012

Before
HIS HONOUR JUDGE BIRTLES
MR G LEWIS
MR P M SMITH

MISS A DAUGHTERS	APPELLANT

AQUA FINANCIAL SOLUTIONS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR K SONAIKE
(of Counsel)
Instructed by:
Messrs Irwin Mitchell LLP Solicitors
Imperial House
31 Temple Street
Birmingham
B2 5DB	
For the Respondent
	MR M WEST
(Representative)
Peninsula Business Services Ltd
5th Floor, The Peninsula
2 Cheetham Hill Road
Manchester
M4 4FB	

SUMMARY
UNFAIR DISMISSAL

Claimant dismissed for behaviour in a bar while drinking with clients.  She apologised to the clients the following morning.  The Employment Tribunal dismissed claims of (a) unfair dismissal and (b) wrongful dismissal.  Appeal allowed on the grounds that (a) contrary to the Tribunal’s finding there were serious disputes of fact which the disciplinary hearing and the appeal did not attempt to resolve (b) the Tribunal wrongly discounted the pressure brought by the Respondent’s chairman and majority shareholder for the Claimant to be dismissed (c) there was no attempt to address the third limb of Burchell except by assertion.

HIS HONOUR JUDGE BIRTLES
Introduction
1.	This is an appeal from the Judgment and Reasons of an Employment Tribunal sitting at London South on 11 and 25 October 2010.  The Employment Tribunal decided that: (1) the Claimant was not unfairly dismissed; (2) the Claimant’s breach of contract claim failed; and (3) the Claimant was in breach of her contractual obligation to repay to the Respondent the sum of £1,583.85.

2.	The Appellant is represented by Mr K Sonaike. The Respondent is represented by Mr Martyn West, consultant.  We are grateful to both Mr Sonaike and Mr West for their written and oral submissions.

The factual background
3.	The facts are set out fully in the Employment Tribunal’s Reasons at paragraphs 5‑40.  In summary form, Miss Daughters worked as an independent financial adviser for 16 years and was the founder, owner and Managing Director of the Respondent for 7 years.  The business was structured so that she was an employee, and Miss Daughters commenced employment on 22 June 2001.  One of her clients was Ms Carolyn Bennett, who was extremely impressed with Miss Daughters’ skills and they became friends.

4.	In June 2007 Miss Daughters sold her majority shareholding to Ms Bennett, who became the Chairman of the company.  A Mr Brian Soulby also became a shareholder. Notwithstanding Ms Bennett’s generosity to Miss Daughters, the business relationship and friendship between her and the Claimant became increasingly strained.

5.	On the evening of 22 January 2010 Ms Bennett received a telephone call shortly after 8.00pm from the Claimant, who said she had “fucked up again” and had upset a client that evening, and told her “a few home truths”.  Ms Bennett concluded that the Claimant had been drinking, and told her that she had no right to do that to any client, let alone someone she hardly knew.  The client in question was a friend and neighbour of Ms Bennett, whom Ms Bennett had introduced to the firm.

6.	The client and her partner contacted Ms Bennett at home the following morning, 23 January 2010, by text message demanding she go round and see them.  She did so.  Both the client and her partner were very upset and vociferous in their disgust at how Miss Daughters had behaved the previous night.  They spent an hour and a half complaining to Ms Bennett, who was very embarrassed, angry with Miss Daughters for her behaviour (if it were true), and annoyed to be having to try to repair the damage on her Saturday morning.

7.	The client showed Ms Bennett an email apology she had received at 8.48am that day from Miss Daughters, which said:

“I wanted to email you and apologies [sic] for my behavior yesterday.  It wasn’t just unprofessional it was also unfair of me to say those things to you.  Even though there is no excuse for my behavior I thought I would try and explain to you why I acted in such a way.”

8.	She then explained she had had boyfriend trouble and said:

“I hope you can forgive me and if possible I would really like to speak with you and apologies [sic] in person.
I was wrong but I hope you can understand that I am also human and just trying to cope with some pretty crap emotions this week.”

9.	The client explained to Ms Bennett that she did not know what to do when she got the email, but knew that she did not want to inflame the situation and so had replied thanking Miss Daughters for the apology, but saying:

“Whatever your week was like it was unkind and not fair to say those personal and slightly hurtful things to me, especially as you don’t even know me.  Yes it was very inappropriate and unprofessional!  However I am a very understanding forgiving person (hence why I may be a little sensitive) so I can let it go.  Believe me I know what it is like to be having a hard time and the effects alcohol can have on people, hence why I am trying to be a little more careful with the drinking.  Yes of course I can forgive you as I am not that petty.
I am sorry to say it but we think it is a better idea if we continue our working relationship with Chris.  Peter [the client’s partner] and I feel that it would be a better idea and would be happier with that.
No need to apologise personally, lets [sic] just move on.”

10.	However, the client and her partner were significantly upset and reported in detail what had happened.  They told Ms Bennett that they had met Miss Daughters at the Avalon, a bar close to the business premises, at approximately 4.00pm for a meeting to discuss financial advice.  When the Claimant arrived it was apparent she had already been drinking, and they felt pressurised by her into signing a particular fee agreement, and once the agreement was signed the Claimant brought the meeting to an abrupt close and ordered more drink.  They said that Miss Daughters became more inebriated and then started to complain about Ms Bennett.  At one point during the evening Miss Daughters had dragged the client’s partner outside to have a cigarette, even though he did not smoke, and proceeded to tell him all about Ms Bennett’s financial situation, and that of her family, which he found uncomfortable.  He also considered it unprofessional, and it led him to question whether his financial details would remain confidential.

11.	At another point in the evening, they reported that Miss Daughters had called Peter a “cunt”, which although was said in humour had shocked and offended him.  When the client did not want to carry on drinking at the same pace as her, Miss Daughters berated her for not wanting to carry on drinking, and demanded to know why she was drinking spritzers.  The client became so upset that she began to cry, at which point the Claimant said, “That’s right, Emily cries because that’s what Emily does”, at which point the two clients left the bar.

12.	On Sunday, 24 January, Ms Bennett spoke to the Claimant on the telephone to express the seriousness of what had occurred.  She considered that there were two very serious aspects: that the clients had been insulted, and there had been a breach of confidentiality by discussion of her own personal financial affairs.  It was clear to Miss Daughters that Ms Bennett took the matter extremely seriously.  Ms Bennett said further discussions would have to take place.

13.	The next day, Monday, 25 January 2010, the Claimant did not attend work.  Mr Christopher Jones agreed to see her, and went to her home and obtained Miss Daughters’ account of the incident on 22 January 2010.  The notes of the meeting were subsequently agreed and are in the bundle.  The facts themselves were not in dispute, but the significance or seriousness of Miss Daughters’ behaviour was.  Miss Daughters accepted that she had offended the client, but did not consider it to be unduly serious, since the client had accepted the apology.  She accepted it was probably not sensible to drink in client meetings, and explained her having discussed matters relating to Ms Bennett’s personal affairs as part of her sales pitch, and had not thought this would upset Ms Bennett.  Miss Daughters accepted that she and the two clients had been drinking for four hours on Friday evening, and said that inevitably the details were a bit hazy, but Miss Daughters considered that the client had become over-sensitive through drink.  Miss Daughters was concerned about the relationship between her and Ms Bennett and suggested involving an external specialist consultant, and announced that she would stay at home until matters were resolved, to minimise disruption to staff morale.

14.	Ms Bennett viewed the matter extremely seriously, and put forward a proposal as to how things should proceed to resolve the situation in order for Miss Daughters to keep her position.  Ms Bennett said it was for Miss Daughters to find a way of resolving the situation to the satisfaction of herself, Mr Jones and her by the next board meeting, and to confirm to her in writing her role and responsibilities and provide reassurance that she would be willing and able to carry out her role with the company.  She would have until 1 May 2010 to demonstrate that she and Mr Jones could run the company as a business within the scope of their roles by hitting or exceeding targets.  It was made clear that the company would not do anything further to accommodate Miss Daughters or resolve the particular issue; it was for her to address.  In the event that she and Mr Jones had not demonstrated that they could run the business effectively by 1 May 2010, the shareholders would review the structure and future viability of the company, to include whether it would be appropriate for any of the current directors to remain in their roles, and/or whether they should continue with the business.  Ms Bennett required a reply to her proposal by 29 January 2010, and referred to the incident of 22 January as gross misconduct.  Miss Daughters did not agree to the proposal, but engaged solicitors.  She disputed the incident amounted to gross misconduct, describing it as minor misconduct at best.

15.	Miss Daughters went to see her GP and was signed off with stress for two weeks from 1 February 2010.

16.	Ms Bennett decided formal disciplinary procedures should be invoked in light of Miss Daughters’ unconciliatory response.  She was invited in writing to a disciplinary hearing on 25 January 2010 to face allegations of gross misconduct, of being seriously incapable whilst on duty brought on by alcohol or illegal drugs, disclosure of confidential information, and bringing the company into disrepute.  She was told that the purpose of the meeting would be confined to establishing the events on 22 January 2010, and that for the company Christopher Jones and Brian Soulby, director and shareholder respectively, would be attending the hearing.  She was given the right to be accompanied.  She was placed on gardening leave in the interim.  In the intervening period there was an attempt by Mr Soulby to resolve things amicably, and Miss Daughters submitted a grievance against Ms Bennett.

17.	Ms Bennett decided to take no further part in the proceedings in the light of the grievance raised by Miss Daughters, which was wide-ranging and included aspects to do with the operational structure of the company as well as a grievance relating to the incident on 22 January 2010.

18.	In advance of the disciplinary hearing Ms Bennett set out in writing the complaint made to her by the two clients.  In the account she set out the chronology of events thereafter and suggested that Miss Daughters’ behaviour and attitude subsequent to the original incident demonstrated a serious breach of mutual trust and confidence and a lack of accountability towards the company.  She also put on record that she now felt very uncomfortable continuing to use the Respondent as her own financial advisers should Miss Daughters be party to any of her details in the future.  She warned that if the panel decided to reinstate her, she would, with regret, move financial advisers.

19.	The disciplinary hearing of 25 January was postponed at the Claimant’s request on medical grounds, but took place on 10 March 2010.  The Respondent did not agree to a request from the Claimant to have all evidence to be referred to at the disciplinary hearing 48 hours in advance of the hearing, because this was not provided for in the staff handbook.

20.	At the meeting on 10 March 2010 Mr Soulby and Mr Jones took note of the staff handbook, which has a drug and alcohol abuse section.  It states that employees who are representing the company, e.g. by entertaining clients, will be required to use discretion and limit social drinking whether this is during or outside of normal working hours, and employees must ensure that the use of alcohol or drugs does not impair the safe and efficient running of the company or the health of its employees.  It states that where there is a breach of these rules it will be regarded as gross misconduct resulting in summary dismissal.

21.	Mr Soulby and Mr Jones concluded that Miss Daughters’ behaviour on 22 January, as a director of the Respondent company, was not in line with the expectations that the company was entitled to have, and they concluded that Miss Daughters had upset and offended the clients.  They considered it amounted to gross misconduct, and that the appropriate sanction was dismissal.  Prior to the meeting they had taken witness statements from staff members, obtained Ms Bennett’s account and had had the investigation report that had been agreed by the Claimant at Mr Jones’ meeting with her on 25 January.

22.	On the question of disclosure of confidential information, Mr Soulby and Mr Jones noted that Miss Daughters’ account differed to that of Ms Bennett.  Ms Bennett was under the impression that specific financial facts about her had been revealed to other clients, which Miss Daughters denied.  Mr Soulby and Mr Jones concluded that the information that had been disclosed was probably in the public domain, in the sense of being ascertainable from an internet search, given the prominence of the Bennett family, and not secret as such, and they concluded there was insufficient evidence to prove beyond reasonable doubt that Miss Daughters had disclosed confidential information to Ms Pennington.  They had decided to adopt the criminal standard of proof.  They found this allegation not to have been established.

23.	At the end of the meeting Mr Soulby and Mr Jones gave their decision, and it is recorded as follows:

“BS said that he and CJ had formed a judgement at this point in time.  He said that regarding divulging Carolyn’s financial affairs, there wasn’t sufficient evidence to prove anything.  Much of the information was just general knowledge.  However, the issue is the alcohol and bringing the company into disrepute and this was proved which meant that AD was no longer working for Aqua Finance Solutions.  The appeal procedure was in the handbook.  This was all he had to say.”

24.	A written decision followed on 12 March 2010 stating it was found that the Claimant had committed gross misconduct on 22 January 2010, and she was summarily dismissed without notice.  She was informed of the appeal procedure.

25.	The appeal was chaired by Anthony Faukingham, an external person, since there was no one else within the company more senior than those already involved.  Miss Daughters had prepared detailed grounds of appeal against the dismissal.  She considered there was insufficient evidence for her to be found guilty of the three allegations, that the penalty was disproportionate and there were procedural irregularities.  She was concerned that there were no statements from either of the clients, and she did not consider Mr Soulby to be independent in the chair, given his earlier involvement in the investigation, and nor did she consider Mr Faukingham to be independent because of close involvement with the Bennett family.  She objected to not having evidence prior to the hearing itself and the failure to hear her grievance prior to the disciplinary hearing.

26.	While she admitted to offending the client on 22 January and to have been drinking quite a bit at the time of doing so, the penalty of summary dismissal was not within the range of reasonable responses open to the Respondent in response to the misconduct, given her apology.

27.	Mr Faukingham heard the appeal.  He did not uphold it, but did not give his reasons for not doing so in his rather short letter of 9 April 2010 informing the Claimant that her appeal had been unsuccessful.

28.	During the course of the appeal we were given copies of the witness statements of the other witnesses.  They were: (1) Ms Stephanie Fortesque, who was present at the Avalon bar on 22 January 2010 earlier in the evening but not between 8pm – 9pm; (2) Mr Andrew Catchpole, who was not present at the Avalon bar on 22 January 2010 between 8pm – 9pm; (3) Ms Hannah Dawson, who was not present at the Avalon bar on 22 January 2010; (4) Ms Melissa Griffin, who was not present at the Avalon bar on 22 January 2010.

29.	It remains to be noted that the Employment Tribunal did not find the Appellant to be a credible witness: Judgment paragraph 49.

The Employment Tribunal conclusions: wrongful dismissal

30.	At paragraphs 41‑43 the Tribunal said this:

“41. In considering wrongful dismissal it is for the Tribunal to consider whether the Claimant’s conduct justified summary dismissal.  It is our task to assess objectively and we are, for this part of the case, primary decision-takers - a court of first instance, not a review body.  Gross misconduct justifying summary dismissal is conduct which must so undermine the trust and confidence which is inherent in the particular contract of employment that the employer should no longer be required to retain the employee in his or her employment.  It is a high hurdle, since the entitlement to contractual notice is a basic entitlement that can only be deprived of an employee in serious cases - gross means gross.
42. The Tribunal has no hesitation in concluding that Miss Daughters’ conduct justified summary dismissal without notice.  [(1)] She had got drunk and [(2)] abused a client of the Respondent who was also a close personal friend of the owner, majority shareholder and director of the Respondent [(3)].  The Tribunal is also satisfied that on balance of probabilities that Miss Daughters disclosed confidential financial information about Ms Bennett’s affairs to the clients causing them and her great embarrassment and that the company was brought into disrepute by her drunken loose tongued behaviour [our italics].  We were tempted to ask ourselves: how can it not be gross misconduct to call a client a cunt and to cause them to leave the bar in tears?  We avoided that temptation however, as there might be circumstances, depending on the context and the nature of the relationship, where such behaviour is acceptable, and friendships and business relationships can withstand the articulation of robust language and views.  But this is not that situation [our italics].  Miss Daughters acknowledged the severity of the situation at the time in her email to the clients and telephone calls to Ms Bennett and Mr Jones, but has sought to re-interpret events since.  Her initial reaction was the correct one - she went too far the comments made could not be unsaid and her actions amounted to gross misconduct.
43. The Tribunal therefore conclude that the Claimant was not entitled to contractual notice on account of her conduct and the breach of contract claim is dismissed.”

Unfair dismissal
31.	At paragraphs 44‑50, the Tribunal said this:

“44. In considering an unfair dismissal claim - see s.98 Employment Rights Act 1996 (ERA 1996) - it is not however for us to put ourselves in the shoes of the employer and to judge the Claimant’s actions for ourselves.  It is for us to assess whether the Respondent has a genuine belief, after sufficient investigation in the Claimant’s misconduct and whether that misconduct is such as to justify a dismissal.  We are entirely satisfied that they did.  By the Claimant’s own account [(1)] she got drunk and [(2)] abused a client and [(3)] discussed the firm’s major client’s financial affairs with the other clients [our italics].  There was little dispute of fact between what Miss Daughters said she had said and what the two clients said she had said.  On either analysis it amounted to misconduct and on either analysis it more than justified dismissal.
45. There was nothing in the allegation that the failure to provide statements prior to the disciplinary hearing affected the fairness of the decision.  Miss Daughters was in full possession of the material facts - from her own account as agreed with Mr Jones after their meeting.  The documents that she saw for the first time at the meeting did not add materially to the picture.  Where conduct is admitted and the bare facts are not in dispute, then self evidently a claimant has not been disadvantaged and in any event Miss Daughters had time at the hearing to go through the paperwork.  Nor was it necessary to go back to the clients to obtain a further account from them.  The material facts were admitted and the clients had also given Ms Bennett a full account, which was largely agreed by Miss Daughters.
46. Whilst we shared with Miss Daughters’ concern that the appeal officer did not explain his reasons for his decision, on the particular circumstances and facts of this case it makes no difference and does not flaw the dismissal decision.  As a matter of general principle, the Claimant was entitled to know why Mr Faulkingham made his decision.
47. The other matter we considered was whether Ms Bennett in her uniquely powerful position as owner, shareholder, Director and major client of the Respondent abused this influence when threatening to withdraw her custom if Miss Daughters was reinstated (see paragraph 28 above).  We consider it was an unfortunate matter to put in her statement for the disciplinary hearing.  There is an interesting line of authority on the role of third party pressure in unfair dismissal cases (see for example Henderson v Connect (South Tyneside) Limited [2010] IRLR 466).  In the present case before us however, the major customer was also the financial backer, shareholder, major creditor and director of the company.  Ms Bennett’s view mattered and it was relevant for the decision-takers to be aware of Ms Bennett’s opinion.
48. This case therefore does not fall into the category of unfair third party pressure - Ms Bennett is not a third party in that sense, but in any event this was not a whimsical demand by a third party, but an evidence based reasoned opinion given the undisputed fact that Miss Daughters discussed her financial affairs with other potential clients. Ms Bennett’s view is a factor in the general mix [our italics].  We do not allow ourselves to be deflected from the primary problem which was the misconduct of the Claimant.  For all Mr Sonaike’s skilful advocacy, Miss Daughters’ behaviour in the Avalon bar on 22 January 2010, was and had always been the problem and the reason for her dismissal.  Her behaviour clearly falls within the areas of conduct, and dismissal was clearly within the band of reasonable responses available to an employee and sufficient procedural safeguards were afforded to the Claimant in light of the facts of this case.
49. We found Miss Daughters to be a highly manipulative individual.  She sought to deflect legitimate criticism of her own behaviour into an unjustified attack on Ms Bennett.  Her audacious attempt to paint the matter as a personality clash with Ms Bennett and her insouciant attempt to trivialise her behaviour was astonishing.  Her suggestion that external mediation would be a solution was a delicious red herring and her arrogant and imperious announcement that she would remain at home on 25 January 2010 in disregard of her most basic contractual obligations, perhaps having forgotten that she was no longer owner of the business, was telling.
50. The claim of unfair dismissal is dismissed.”

The Notice of Appeal
32.	The Notice of Appeal was considered at a preliminary hearing by a different panel of the Employment Appeal Tribunal.  It is clear from reading that Judgment and the order made by that Tribunal that all the grounds of appeal were permitted to go forward to a full hearing, albeit that the panel referred to some grounds as being unarguable.  We therefore consider each ground of appeal in turn.

Ground 1: test for fairness of misconduct dismissal
33.	Mr Sonaike submits that the Tribunal applied the incorrect test when assessing the fairness of the dismissal by reason of misconduct.  At paragraph 44 of its Reasons the Tribunal said this:

“44. In considering an unfair dismissal claim - see s.98 Employment Rights Act 1996 (ERA 1996) - it is not however for us to put ourselves in the shoes of the employer and to judge the Claimant’s actions for ourselves.  It is for us to assess whether the Respondent has a genuine belief, after sufficient investigation in the Claimant’s misconduct and whether that misconduct is such as to justify a dismissal.  We are entirely satisfied that they did.  By the Claimant’s own account she got drunk and abused a client and discussed the firm’s major client’s financial affairs with the other clients.  There was little dispute of fact between what Miss Daughters said she had said and what the two clients said she had said.  On either analysis it amounted to misconduct and on either analysis it more than justified dismissal.”

34.	Mr Sonaike submits that the Tribunal failed to address its mind or consider the question of the reasonableness of the belief in misconduct, as required by British Home Stores Ltd v Burchell [1980] ICR 303 (see also Foley Post Office and HSBC Bank PLC v Madden [2000] IRLR 827). 

35.	Mr West submits that although the Tribunal did not properly set out the test in Burchell, it did in fact properly apply the three parts of the test.  Mr West submits that in this case there was an admission by Miss Daughters that she had committed misconduct.  It was therefore open to the Tribunal to find that the employer, “had in his mind reasonable grounds upon which to sustain that belief.”

36.	We are unable to agree.  In this case there was a clear dispute on the evidence as to what had taken place in the Avalon bar on the evening of 22 January 2010.  That was clear by:

(a)	The differing accounts given by Miss Daughters to Mr Jones on 25 January 2010 (appeal bundle pages 92‑96).  It is important to note that Mr Jones’ original draft at appeal bundle page 88‑91 was seriously amended following consultation with Miss Daughters.  That is to be contrasted with the account given by Ms Bennett in her undated two-page statement at appeal bundle pages 101‑102.

(b)	It was also the view taken by the client and her partner of that evening in her email dated 24 January 2010 (appeal bundle page 82).  The Employment Tribunal made no attempt to reconcile these differing versions.  Neither did it specifically address the missing central Burchell test referred to above.  In particular, there was a version from the client and her partner that had been filtered through Ms Bennett, who in the same document made it clear that unless Miss Daughters was dismissed she would be moving her business from the Respondent company.  Since she was the chairman and majority shareholder, then the company would almost certainly cease to exist.

Ground 2: genuine belief - perversity
37.	This is a different challenge to the same point.  However, we remind ourselves of the very high hurdle imposed by Yeboah v Crofton [2002] IRLR 634.  We are not prepared to find that the Tribunal’s reasoning in paragraph 44 is perverse; rather, it is rushed.

Ground 3: genuine belief - inadequacy of reasons
38.	Mr Sonaike submits that alternatively the Tribunal failed to set out any or any adequate reasons for its conclusions that the Respondent had a genuine belief in the Appellant’s misconduct, and as such its decision was not Meek v City of Birmingham District Council [1987] IRLR 250 compliant.

39.	In this case Miss Daughters accepted that she had got drunk.  Shortly afterwards she wrote an apology by email.  The Tribunal’s reasons for its conclusions are clear, although in our view mistaken.

Ground 4: reasonable grounds
40.	Mr Sonaike submits that the Tribunal did not give any adequate consideration to the requirement that there be reasonable grounds for any belief held by the Respondent in the Claimant’s misconduct.  Alternatively, he submits that there was no evidence to support the Tribunal’s conclusion that any belief by the Respondent was on reasonable grounds.

41.	This relates back to ground 1.  At paragraph 44 of its Judgment the Tribunal said:

“There was little dispute of fact between what Miss Daughters said she had said and what the two clients said she had said.  On either analysis it amounted to misconduct and on either analysis it more than justified dismissal.”

42.	As Wilkie J said at the preliminary hearing on 28 July 2011:

“8. In fact, as the matter developed, and as investigations proceeded and Miss Daughters, whether genuinely or otherwise, developed her account of what she had said and what she was apologising for, it has emerged that there were significant differences in the accounts said to have been given by the clients, on the one hand, and by Miss Daughters on the other.”

43.	We agree.  For the reasons we have given in respect of ground 1, we allow the appeal on this ground also.

Ground 5: reasonable investigation
44.	Mr Sonaike submits that the Tribunal failed to identify or explain how or why it considered that the Respondent had carried out a sufficient investigation (Reasons, paragraph 44).  A “sufficient investigation” is in fact the incorrect Burchell test; the correct test is a reasonable investigation in all the circumstances.  Mr Sonaike submits that there is no explanation of how or in what way a reasonable investigation was actually carried out beyond asserting in paragraph 44 that the Respondent did do this.

45.	We agree.  In particular, the Tribunal failed to record the evidence of Mr Jones and Mr Soulsby, that they declined to investigate matters with the client and her partner, or to ask them to provide independent witness statements (not filtered through Ms Bennett), or attend as witnesses.  While we are mindful that we must not substitute our decision for that of the Tribunal, we do find that the Tribunal in this case did not ask itself the right question and did not attempt to answer it.

Ground 6: substitution
46.	Mr Sonaike submits that the Tribunal substituted its own view and conclusions when reaching its decisions, and in particular refers us to paragraph 44 of the Reasons, where the Tribunal concludes that the Appellant got drunk, abused a client and discussed Ms Bennett’s financial affairs.  We do not think that this is a clear case of substitution, and in any event the point made under it has been raised under other grounds of appeal.

Ground 7: reasonable sanction
47.	Mr Sonaike submits that the Tribunal failed to provide any adequate reasons for its conclusion that the misconduct of the Appellant justified the sanction of dismissal.  The Tribunal’s finding on this is at paragraph 42, where they say this:

“42. The Tribunal has no hesitation in concluding that Miss Daughters’ conduct justified summary dismissal without notice.  She had got drunk and abused a client of the Respondent who was also a close personal friend of the owner, majority shareholder and director of the Respondent.  The Tribunal is also satisfied that on balance of probabilities that Miss Daughters disclosed confidential financial information about Ms Bennett’s affairs to the clients causing them and her great embarrassment and that the company was brought into disrepute by her drunken loose tongued behaviour.”
  
48.	We observe first that the disciplinary hearing conducted by Mr Jones and Mr Soulby did not find the charge of divulging Ms Bennett’s financial affairs proved (appeal bundle page 127).  Secondly, Mr Sonaike made a series of submissions to the Tribunal as to why the misconduct should not be characterised as gross, and they included (a) the Appellant’s apologies immediately and the following day, (b) the fact that the apology was accepted by the client, (c) her lengthy service and no previous disciplinary warnings, (d) the client was still happy to provide its business to the Respondent (albeit not through Miss Daughters), and (e) that the Respondent initially agreed or proposed that the Claimant remain in employment.  This last point is an important one, and is set out in Ms Bennett’s letter, which is undated but which it is agreed is late January 2010 (appeal bundle page 96).  By late February 2010 Ms Bennett had taken the opposite view, which was that Miss Daughters should be subject to a disciplinary procedure.

49.	Unfortunately, the Employment Tribunal does not seek to address any of these submissions or explain why the dismissal was justified and within the range of reasonable responses in all the circumstances.

Ground 8: influence of Ms Bennett
50.	Mr Sonaike submits that the Tribunal’s reasoning at paragraphs 47‑48 of its Reasons amount to an error of law, or alternatively that it was a decision that no Tribunal properly directed as to the law could have reached.

51.	Mr West submits that the Tribunal properly considered the issue of third-party pressure in unfair dismissal cases, and rightly decided that the present case did not fall into the category of unfair third-party pressure, because Ms Bennett was not a third party in that sense.

52.	However, what the Tribunal did say was that Ms Bennett’s view mattered and was relevant for the decision-takers (Mr Jones and Mr Soulby), and to take it into account (paragraph 47), and that Ms Bennett’s view was an evidence-based reasoned opinion that was a factor in the general mix (paragraph 48).  The Tribunal appear to have deviated from the application of the three Burchell tests, which were the sole matters that Mr Jones and Mr Soulby had to consider.  This is clearly not a third-party-influenced case, and the purpose of Mr Jones and Mr Soulby conducting the disciplinary hearing was so that Ms Bennett did not participate in their decision.  There is no doubt that Ms Bennett’s letter at appeal bundle pages 101‑102 was a deliberate attempt to influence the decision made by Mr Jones and Mr Soulby.  Paragraphs 18‑19 of that letter say this:

“18. This incident and AD’s subsequent behaviour and attitude to it and me, clearly demonstrates a serious breach of mutual trust and confidence and a lack of accountability to the company.  As I have stated, this is not the first time I have had reason to talk to Amanda about her behaviour towards clients when she is drunk.  I have had to apologise for her behaviour to clients, who happen to be personal friends of mine and had seen her on my recommendation, on several previous occasions, although none were as serious as the current incident.
19. I would like to put on record that I now feel very uncomfortable continuing to use Aqua as my financial advisers should AD be party to any of my details in the future.  Should the panel decide to reinstate her, I will, with regret, move financial advisors.  I am very concerned at the lack of importance AD has afforded both to her behaviour when representing the company or to the confidentiality of clients’ personal affairs and it has come to my knowledge since then that this is not the first occasion she has decided to share details of my finances with others outside her remit as my financial advisor.  In the interest of the company, this cavalier attitude needs to be addressed before it becomes part of the culture of the company.”

53.	Mr Jones was a director of the company and Mr Soulby was a shareholder of the company.  It is impossible to see how the Tribunal could have reached its decision that they were entitled to take that threat into account, or that it was “an evidence based reasoned opinion”, or that it was “a factor in the general mix”.  Given the nature of that threat, there must have been only one result, which was that Miss Daughters’ dismissal was inevitable.  Again, it is clear from the way the Tribunal express the matter in paragraph 48 that the “evidence based reasoned opinion” was Miss Daughters’ discussing Ms Bennett’s financial affairs with other potential clients, a charge which Mr Jones and Mr Soulby did not uphold.

Ground 9: procedure
54.	Mr Sonaike submits that the Tribunal’s conclusions that the procedural failings of the Respondent did not affect the fairness of the dismissal.  In his helpful skeleton argument Mr Sonaike sets out the breaches.  In our judgment, the conclusion the Tribunal came to was one that it was entitled to reach on the facts of the case.  We should add that in respect of the failure to provide the other witness statements in advance of the disciplinary hearing we had the opportunity to see those witness statements, which were not in the bundle and which were given to us separately.  We have read them carefully.  They add nothing to the Respondent’s case against the Appellant.  There was no error of law.

Ground 10: wrongful dismissal
55.	Mr Sonaike submits that the Tribunal failed to give any adequate reasons in paragraph 42 of its Judgment that the Appellant had committed an act of gross misconduct which justified summary dismissal.  We have set out paragraph 42 earlier in this Judgment.

56.	The reasons given by the Tribunal in paragraph 42 are essentially the same as they give in paragraph 44 for unfair dismissal.  We have already made our criticisms of the Tribunal’s reasoning.  Essentially the Tribunal made an error of law in saying that there was no conflict of fact between what Miss Daughters said had occurred on the night of 22 January 2010 and the view taken by the Respondent.  There were serious differences of fact that the Tribunal did not attempt to properly resolve.

57.	In particular, we note again that the Tribunal relied upon a finding that, “Miss Daughters disclosed confidential financial information about Ms Bennett’s affairs to the clients, causing them and her great embarrassment […].”  That was not a finding made by Mr Jones and Mr Soulby at the disciplinary hearing (appeal bundle page 127).

Conclusion
58.	For these reasons the appeal will be allowed.  Both parties are agreed that if this case needs to be reheard, then the matter should be reheard by a fresh Employment Tribunal.  In our judgment that is the right course of action.  This is not a case where we can confidently remit this case to the same Tribunal to make further findings of fact, particularly in view of the Tribunal’s comments about Miss Daughters at paragraph 49 of its Reasons.

59.	The order we will therefore make is that the appeal be allowed and the case be remitted to be reheard by a fresh Employment Tribunal.