Appeal No. EAT/733/92

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 8 June 1994

	Before

	HIS HONOUR JUDGE D M LEVY QC

	MR T S BATHO

	MRS M L BOYLE

HOPKINSON & HOPWOOD LTD	APPELLANTS

MR C BITHELL	RESPONDENT

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR D M BERKLEY
(OF COUNSEL)
Messrs Fentons
Solicitors
485 Oldham Road
Failsworth
Manchester M35 9AB

For the Respondent	MR A D WRIGHT
(OF COUNSEL)
Messrs Molesworths
Solicitors
3-11 Drake Street
Rochdale
Lancashire OL16 1RH

	JUDGE LEVY QC:	In June 1981 Mr Colin Bithell commenced employment with the Respondent in the Industrial Tribunal, the Appellant here, Messrs Hopkinson & Hopwood Limited.  He became one of two foremen in 1986 and he was summarily dismissed from his employment on the 8 November 1991.  It is clear beyond peradventure that the reason for his dismissal was that the works manager, Mr Ward, who had been newly appointed to that job, had formed the belief that Mr Birthell had taken on work within the Appellants' premises for which he would keep the remuneration.  That is and was so recognised by the Industrial Tribunal to be gross misconduct and an admissible reason for dismissing him under Section 57 (2) of the Employment Protection (Consolidation) Act 1978.  

	There was a finding by the Industrial Tribunal that throughout his employment with the Appellants, the Respondent had from time to time, priced work for which he was paid in cash, which cash he accounted for to one of the Appellants' directors.  On some occasions no paperwork was issued to support the transaction.

	The matter which led to his dismissal occurred on the 26 October 1991 when he took in work for a Company called R J Taylor which he priced at £75 and there was evidence before the Tribunal which showed it to be worth a sum of some £300.  It was the Respondent's intention that no paperwork should be issued and there was a finding by the Industrial Tribunal that the Respondent intended to account to the Appellants for that £75.  As Mr Berkley for the Appellants, has impressed on us, it is not what the Respondent intended which matters here; what matters is what reasonable belief the Appellants had.

	There was a finding by the Tribunal that the Respondent concealed the work in the Compressor Unit and there was a further finding that he did it deliberately to keep it from being seen not so much by the directors, but by Mr Ward.  It is common ground that there had been a previous incident when the Respondent had taken in work from the same company, on which he had been challenged by Mr Ward and Mr Ward had given him, if not a warning, a strong indication that such work was not to be taken in in the future, that Mr Ward did not approve of the whatever practice had gone on before and that must have been quite clear to the Respondent.

	In slightly more detail what happened on this particular occasion was that the work taken in by the Respondent involved work on 50 meat hooks which could be seen in the Company's compressor room.  It was not booked in as Company work.  When he heard about the work, Mr Ward visited the compressor room with some of the Directors and they saw the meat hooks.  The Respondent was then called on to give an explanation of what had happened.  When called upon to give the explanation he unfortunately lied for a time about what he had done.  The Directors and Mr Ward then considered his position and decided to dismiss him.

	Then Industrial Tribunal in a judgment which we are sorry to say is rather short on its findings, and especially on its findings of law, heard Mr Bithell's complaint that he had been wrongly dismissed on the 19 August 1992 and gave its judgment on the 2 September 1992 when they found that he had been wrongly dismissed.  Paragraphs 5 to 8 of the Decision reads:

"5.The disciplinary hearing was convened on the morning of 8 November, the meeting was conducted initially by Mr Ward.  The applicant denied all knowledge of what was being put to him, namely a job which the applicant had hidden.  The two directors and Mr Ward retired for two or three minutes and they were persuaded by Mr Ward that the applicant had committed an offence for which dismissal was appropriate.  The meeting was reconvened and Mr Ward told the applicant that he was dismissed.  The applicant then raised the matter of the previous practice but by then it was too late.

6.On those facts we find that the respondent did not act reasonably in treating the applicant's conduct as a sufficient reason for dismissal.  The applicant was not warned properly of the nature of the charge which he faced.  There was no evidence to support the belief that the applicant was going to pocket the £75.  The investigation was incomplete at the moment of dismissal because the respondents and particularly Mr Ward were too eager to dismiss the applicant.

7.We find that, had the meeting either been postponed after the applicant had been suspended with pay to the following Monday or had the decision been deferred after the initial denial to a later date, the applicant would have been given a proper opportunity, which he was otherwise denied, to give an explanation for what he was doing and the directors would have been driven because of past practice to accept that probably he was telling the truth and that he should not be dismissed.

8.Nevertheless, we find that the applicant did by his conduct contribute to his dismissal because he concealed the job from the Works Manager and also worked on the job at times when the Works Manager was not likely to see him doing it.  We find that his contribution is worth a deduction of one third from any compensation to which he might otherwise be entitled."  

	Against those findings, Mr Berkley who appears for the Appellant Company here, submits there have been serious misdirections by the Industrial Tribunal, that their findings were not supported by the evidence and that there were perverse findings.  All these are hotly contested by Mr Wright, who appears for the Respondent employee.

	It is common ground that the test which we have to apply is found in Section 57 of the Employment Protection (Consolidation) Act 1978 and both parties have referred us to the judgment of Mr Justice Browne-Wilkinson, as he then was, in Iceland Frozen Foods Ltd v Jones [1982] IRLR 439, particularly the passage at paragraph numbered 24 on page 442, and that passage reads:

"Since the present state of the law can only be found by going through a number of different authorities, it may be convenient if we should seek to summarise the present law.  We consider that the authorities establish that in law the correct approach of the Industrial Tribunal to adopt in answering the question posed by Section 57 (3) of the 1978 Act is as follows.

(1)the starting point should always be the words of Section 57 (3) themselves;
(2)in applying the section an Industrial Tribunal must consider the reasonableness of the employer's conduct not simply whether they (the members of the Industrial Tribunal) consider the dismissal to be fair,
(3)in judging the reasonableness of the employer's conduct an Industrial Tribunal must not substitute its decision as to what was the right course to adopt for that of the employer;
(4)in many (though not all) cases there is a band of reasonable responses to the employee's conduct within which one employer might reasonably take one view, another quite reasonably take another;
(5)the function of the Industrial Tribuna, as an industrial jury, is to determine whether in the particular circumstances of each case the decision to dismiss the employee fell within the band of reasonable responses which a reasonable employer might have adopted.  If the dismissal falls within the band the dismissal is fair; if the dismissal falls outside the band it is unfair."

	Mr Berkley has submitted to us that there has been a complete failure by the Industrial Tribunal to consider Section 57 and in that regard he takes us to the paragraph of the Decision, which I have read, at paragraph 6, which is the only way to which we can find that Section 57 has been referred to at all.  There we find the words:

"On those facts we find that the respondent did not act reasonably in treating the applicant's conduct as a sufficient reason for dismissal."

	We have been referred to a Scottish case, where the Decision of the cases United Distillers v Conlin [1992] IRLR 503, where Lord Coulsfield, in a fairly recent case, spelt out how helpful it was for an Employment Appeal Tribunal clearly to spell out what it is they have in their minds so that the Employment Appeal Tribunal can be satisfied that they have done the proper tests.  Two of us are satisfied that on this occasion the Industrial Tribunal has not done a proper test, one of us is not so satisfied.  That makes no difference to the result of the appeal for reason which will become clear but two of us are satisfied that the Industrial Tribunal did substitute its own judgment for that of the employer and that it failed to apply the correct test, namely, could a reasonable employer respond to the complaint against the Respondent, as this employer did.  

	All of us are however agreed that there was a failure by the Industrial Tribunal to consider in their reasons what evidence was available to the employer at the time of the dismissal.  Two of us are satisfied that there was a failure by the Industrial Tribunal to enumerate the test clearly in their judgment in order for the parties to show the ground on which the party below had lost. 

	All of us are satisfied that two of the findings of the Industrial Tribunal were not supported by the evidence.  The first is of findings were that the investigation was incomplete at the time of the dismissal.  We are all satisfied that there were sufficient primary facts known to the employer at the time, at the time when it made its decision to dismiss the Respondent to enable it to form an opinion as to whether the Respondent should have been dismissed or not.  In the light of the decision we have come to we do not wish to develop further on that point.   We are also satisfied contrary to the Industrial Tribunal's findings in paragraph 7 that there was no lack of a proper opportunity for the Respondent to give an explanation of what he was doing.

	We are all, also, unhappily satisfied that there is a certain perversity to the decision of the Industrial Tribunal when they held in paragraph 7 set out above that there was no evidence to support, and the word is to believe, it must be the belief and the belief which the Industrial Tribunal were referring to was the belief of the employer, and so the sentence should read `there was no evidence to support the belief that the applicant was going to pocket the £75'.  

	Mr Berkley has carefully taken us through all the evidence which was before the Industrial Tribunal at the hearing below and we are satisfied that on the evidence there was such evidence and that therefore that the conclusion reached is perverse.  

	In the circumstances, there having been a failure by the Industrial Tribunal fully to explain, to at least two of us, what its thought processes were and to all of us a belief that a perverse finding was made, we think that the only proper course for us to take is to remit this matter to be heard by a further Tribunal with different Members so that at a fresh hearing they can determine the questions, which in our judgment were not properly determined at the earlier hearing.  We therefore allow this appeal.