Appeal No.	 EAT/282/95

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 7 November 1996

Before
HIS HONOUR JUDGE H J BYRT QC
MRS R CHAPMAN
MR A D TUFFIN CBE

MIDLAND BANK PLC	APPELLANTS

MR A BRAND & MR W COLEMAN	RESPONDENTS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR WILLIAM BIRTLES
(of Counsel)
Messrs Latham & Co
Solicitors
39 Granby Street
Loughborough
Leicestershire
LE11 3DU	
For the Respondents	NO APPEARANCE BY OR ON BEHALF OF THE RESPONDENTS	

	JUDGE BYRT QC:   This is an appeal against a decision which was promulgated on 27th January 1995 by an Industrial Tribunal sitting at Whittington House, London, on 12th and 13th September 1994. In that decision the Industrial Tribunal unanimously held that both the applicants, now the respondents to this appeal, had been unfairly dismissed.

	The facts as found by the Industrial Tribunal are as follows: the respondents had been employed by the appellants since leaving school. In the case of Mr Brand that was 21 years ago, and in the case of Mr Coleman that was 12 years ago. During the time of their employment with appellants they had unblemished records, that is until the matters leading to their dismissal on 24th September 1992 for gross misconduct.

	Both worked in the Securities Department at the Bank’s premises at Laurence Pountney Hill, in the City of London. They worked on the night shift, on which, as I understand it, there were eight members of staff, themselves being two of them. During the course of each days work, they would have transacted several billion £’s worth of business. 

	Their office was situated on first floor, and on tenth floor there was a canteen. Adjacent to the counter of the canteen, was an ice-cream cabinet which, we are told, was kept locked when the canteen was closed.  Prior to September 1992, it had been reported that a varying quantity of ice-cream had been stolen from the cabinet during the course of the summer, and especially in the August. As a result the appellants’ security department had decided to put a video camera to keep watch on just what was happening. Initially the lighting of the cabinet area during the night was inadequate to give a good picture, but during this earlier period, namely on 2nd and 3rd September, the camera did pick up a visit to the cabinet of two well-built men who were seen to be removing something from the ice-cream cabinet. Mr Barnes, one of the respondents’ supervisors, and two other supervisors as well, suspected that these two well-built men were the respondents. In order to ensure that proper evidence was obtained, the lighting was improved. On the night of 10th/11th September a film with undisputed images of both the respondents was obtained, and it was evident that they were each stealing a pair of ice-creams from the cabinet.

	Within a day or two, Mr Coleman was questioned on the telephone about whether he had visited the tenth floor on night of 10th/11th September. At first he denied it, but on being told that he had been captured on a video film, he admitted it. When Mr Brand was challenged about having taken ice-cream from the cabinet, he straightaway admitted it. Both were suspended on 14th September, and invited to attend a disciplinary hearing on 24th September 1992. 

	Mr Crews, a deputy director of the Midland Security Services, chaired those two disciplinary hearings. Both the respondents attended and Mr McGovern, their trade union representative, represented them in the one case following the other. Mr Brand’s case was taken first. It would seem that Mr Crews’s decision as to what to do with Mr Brand was postponed until he had heard the case relating to Mr Coleman.  During a recess in the hearing for Mr Coleman, Mr McGovern who was representing both the respondents, knocked on the chairman’s door. He was met by a Mr Valentine, the personnel manager,  who was sitting in with Mr Crews, doubtless to ensure that the proper procedures were complied with. He came out and there was what has been referred to as “corridor conversation” between the two of them, in which Mr McGovern floated the idea that the respondents might consider resignation. Mr Valentine replied that that was the prerogative of the respondents to decide, but on the other hand it was the appellant company’s policy that the disciplinary process should continue to an end. As it was, the respondents themselves elected to continue the disciplinary hearing and so informed Mr McGovern.

	The conversation which Mr Valentine had had was reported to Mr Crews so that he knew of it, but in the absence of there being any firm offer by the respondents to resign, he did nothing further when once more the hearing was resumed. There is a finding of the Industrial Tribunal to the effect that no firm offer of resignation was made by the respondents. 

	At the conclusion of Mr Coleman’s hearing, Mr Crews stated his findings both in relation to Mr Brand and Mr Coleman. So far as Mr Coleman was concerned, he recorded the fact that he had initially denied the theft on 11th September, but had admitted it on learning of the video recording. He then said that he had denied any other theft of ice-cream, but he said he had seen the film and believed Mr Coleman was involved in theft on other occasions. Accordingly, he believed that Mr Coleman was continuing to lie to him  when he had said he had not stolen on other occasions. He recorded the fact that there had been an admission of the theft, and that, together with his belief that Mr Coleman had stolen on other occasions, left him no alternative but to summarily dismiss him for gross misconduct as the fundamental trust between employer and employee had been broken irrevocably.

	He followed that up with a similar pronouncement on his findings in relation to Mr Brand, though, in Mr Brand’s case, he made no suggestion that he had been anything other than frank about his stealing on 10th/11th September.

	When he came to give evidence before the Industrial Tribunal Mr Crews stated that he would have summarily dismissed each of these respondent, even although he had found that the only evidence of theft was that which related to the night of 10th/11th September.

	Following the findings of the disciplinary hearing, both respondents appealed as was their right. There was a hearing on 15th October which was conducted by Mr Miller who was a retired director of Midland Security Services. Before he came to hear the cases, he had received letters from Mr Brand and Mrs Coleman by way of “pleas for mercy”. The letters stressed that Mr Crews had been wrong about his findings that they had been involved in earlier thefts, and both letters stressed that they thought the penalties they had each received were too severe.

	Mr Miller’s evidence before the Industrial Tribunal about what happened at the appeal hearing and his views about the case, were contained in a written statement as by the date of that hearing he was employed elsewhere overseas. He said in the statement that he was satisfied that Mr Crews had not been unduly influenced in his findings by the possibility that the respondents may have been involved in the thefts on 2nd and 4th September. He himself was satisfied that there had been a theft on 10th/11th September, and that this in his view merited a summary dismissal. The notes, taken of that appeal hearing, do not make clear whether Mr Miller came to any express finding about whether either or both of these respondents had been guilty of stealing from this cabinet on an earlier occasion. When he came to confirming the dismissal, Mr Miller, as he said in his statement, took account of it being a clear case of proven theft. He took into account the nature of the appellants’ business, namely banking, and the fact that it was a fundamental requirements, stressed in the staff handbook, that the staff at all times should conduct themselves with the utmost honesty and integrity. Having given his decision in those terms at the appeal hearing, he then proceeded to authorise without prejudice ex-gratia payments to the respondents. One to Mr Coleman was in the amount of £2,000 and the other to Mr Brand in the amount of £3,000, the amounts being geared to their length of service each had given. He made plain in a letter in which he recorded his findings, and mentioned these gratuities, that this was a gesture to help them in the difficult transitionary period which could necessarily follow his decision.

	The Industrial Tribunal made certain findings as follows: they were satisfied that the reason for dismissal was the respondents’ admissions to acts of theft, coupled with Mr Crews’s belief that they had stolen ice-cream on dates earlier than 10th/11th September. Their dishonesty amounted to gross misconduct and a breach of fundamental trust. They also found that the appellants had carried out a reasonable investigation into theft on 11th September and again on 1st, 2nd and 4th September too. Further they were satisfied that Mr Crews had a genuine belief that the respondents had stolen ice-cream on the night of 2nd/3rd September, and they also found that such belief was a reasonable belief. 

	The central question they posed themselves was whether the summary dismissal was sufficiently justified by the facts of the case. The majority took the view that the reasonable employer would have taken up the overtures of the respondents, made through their representative, that they might consider resigning, and have raised the matter in a more formal way when the hearing resumed. They also found that the dismissal was outside the band of reasonable responses of the reasonable employer, bearing in mind the value of the theft being very small, namely approximately £1 per ice-cream. The theft was of ice-cream and not of securities or money. Therefore the majority found the dismissal was unfair.

	The minority view was that since there had been no offer of  resignation made to Mr Crews, there was no obligation on Mr Crews or the appellants to raise the issue with the respondents themselves formally. Therefore in those circumstances the minority felt that the dismissal was fair. But the minority voted with the majority in unanimously agreeing that the dismissal was unfair because of a defect in the appeal process.

	The Industrial Tribunal expressed a view about the appeal process to the effect that they were not satisfied Mr Miller really agreed with the sanction of summary dismissal. They came to that view because it would seem he had been satisfied only as to the theft on 11th, and that therefore it was implicit in that finding that the respondents had not told lies about whether they had stolen on earlier occasions. Further, they came to that view because Mr Miller had made the respondents substantial ex-gratia payments. They felt that this again signified that Mr Miller was unhappy about the penalty which that had been imposed. They said that, owing to the fact that Mr Miller was unavailable to give oral evidence, they were not able to test their concerns about these matters, and in consequence they found, for that reason, unanimously that the dismissal was unfair.

	Having found the dismissal unfair, they went on to consider compensation. They concluded that the respondents had contributed to their own dismissal to the tune of 80%.

	The respondents have not attended here to argue their case here today. 

	Before Mr Birtles for the appellants addressed us on the appellants argument, we satisfied ourselves that the respondents were aware of today’s hearing, and had therefore chosen not to attend.	Notwithstanding that, Mr Birtles has argued his appeal thoroughly and with care. He has submitted that the central finding of the majority of the Industrial Tribunal with which he is in dispute, is that the dismissal was unfair by reason of its being too severe, and outwith the band of reasonable response of the reasonable employer. He says, in relation to the suggestion that resignation should have been taken up as an issue with the respondents, this was a wrong and erroneous view. There was no burden which fell upon the employers to do this. He stressed the fact the Industrial Tribunal had expressly found and confirmed that the respondents had made no offer of resignation. That being the case he says, there could be no obligation on Mr Crews to initiate the proposal by putting it to the respondents during the formal hearing session. He also pointed out that the Industrial Tribunal had found as a fact that the respondents had instructed Mr McGovern, their representative, not to proceed with any suggestion of resignation. They had  elected to proceed with the disciplinary hearing.

	This tribunal, having considered the Industrial Tribunal’s decision with care on this issue, accept Mr Birtles submissions about this and find that the Industrial Tribunal misunderstood the situation as it developed as a result of Mr McGovern’s proposals about resignation. For this reason, we find that the question as to whether the summary dismissal was the right or the wrong penalty to be imposed, is unaffected by this question of resignation  which seems to us to play no part in that particular issue.

	With regard to the Industrial Tribunal’s concerns about the internal appeal, Mr Birtles says that there was no reasonable ground for the Industrial Tribunal to challenge what was the prima facie position resulting from the terms in which Mr Miller announced his decision in relation to each of the appeals. He plainly stated that he was satisfied both of the parties had been guilty of theft, and as a result of that, he said he considered he had to confirm the penalty of summary dismissal. Equally, Mr Birtles says that the Industrial Tribunal had no ground or reason for doubting what Mr Miller said in the written statement which had been put in evidence without any challenge or dispute from the respondents. In this, he said again that he was satisfied that the admission of theft on the one occasion merited summary dismissal. As Mr Birtles said, it is immaterial that Mr Miller was unavailable to give oral evidence to verify these matters. It was incumbent upon the Industrial Tribunal to accept that evidence, unless in fact it was disputed by the respondents, and it never was.

	So far as the payment of the gratuities is concerned. Mr Birtles says that the Industrial Tribunal misunderstood the message behind those payments. They were hedged around with all the legal protections they could have in the that it was expressly stated in the payment were without prejudice and on an ex-gratia basis. It was clear the employers’ intention was, on the one hand, to establish the principle that theft meant summary dismissal, and, on the other, that the tendering of these gratuities was a way in which the employers might to temper the hardship which the summary dismissal undoubtedly was going to cause these two families.

	So far as the conclusion of this tribunal is concerned, we can find no flaw in the appeal process. We in fact take the view that it is fanciful to suggest that Mr Miller was ambiguous about where he stood in relation to the sentence that had been imposed by Mr Crews at the disciplinary hearing. There was the admission of theft, and Mr Miller, in both his statement at the end of the appeal hearing, and again in his written statement, stressed that, in his view, the one act of theft committed by each of these respondents merited summary dismissal. Equally so, we think that the Industrial Tribunal’s surmise about the payments of these gratuities to the two respondents is also fanciful, and cannot understand how either payment might be interpreted as a sign that Mr Miller did not go along with the sentence, imposed by Mr Crews of summary dismissal.

	Before we leave that point, we should like to say that it would be most unfortunate if an employer, having established the principle that, in connection with his business, theft entailed summary dismissal, he did not thereafter feel able, because of possible suggestions that might be made against him at a later date, to make a generous gesture for reasons of goodwill of the sort that was made by the bank in this instance. We feel that Mr Miller was responding to the cris de ceour he had received in those two letters he received before the appeal hearing. To our minds,  the gesture the payment of these gratuities represented was nothing other than a laudable human approach.

	So, shorn of its complications, what of the Industrial Tribunal’s decision that summary dismissal was not justified by the facts of this case and were outwith the response of a reasonable employer? The appellants’ case is that, whatever the Industrial Tribunal might have thought of their decision summarily to summary dismiss, there was an abundance of evidence which argued its reasonableness. As both Mr Crews and Mr Miller stressed in making their decisions, the thefts undermined or destroyed the confidence and trust which is of paramount importance between employers and employees in a bank. Honesty and integrity of the highest order is required by all members of staff, as the handbook stressed because in turn the bank has an image to maintain with its public. If they are to maintain that image, punitive sanctions of the sort that were applied in this case have to be part of their armoury.

	So far as the respondents are concerned, they had admitted theft. So there was never any dispute about that. The Industrial Tribunal came to the conclusion that Mr Crews had a reasonable and genuine belief in the theft that each of them had stolen on occasions before 10th/11th September. Theft and dishonesty of an employee must always make him a candidate for dismissal. There is hardly a disciplinary code in the country which would not make that abundantly plain to all their staff, and a fortiori, that must especially be so in the case of a bank.

	It is not clear from paragraph 15.4 in the Industrial Tribunal’s reasons, whether the majority took into account the fact that the appellants were a banking institution. They stressed the diminutive value of what was stolen: they stressed that it was ice-cream and not securities or money which was stolen but did they take into account that the employer was a bank, dealing with staff to whom it looked for high standards of honesty and integrity? We believe that in this instance, the Industrial Tribunal majority on this issue fell into error, no doubt moved by the plight of the respondents and their separate families. Their error was to substitute what they thought was the right penalty to impose instead of looking at the matter through the eyes of the employers in question, and asking themselves as to whether their response was within a bracket of reasonableness of a reasonable employer. 

	It is our view that the Industrial Tribunal fell into the error of substituting their own opinion, and that is an error of law. As a result, we feel that we must allow this appeal, and accordingly do so.