Appeal No.	 EAT/1209/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 2 November 1999

Before
HIS HONOUR JUDGE PETER CLARK
MR D A C LAMBERT
MRS R A VICKERS

CAMELOT CORPORATION (GB) LTD	APPELLANT

MR G DREW	RESPONDENT

Transcript of Proceedings

FULL HEARING

Revised

	APPEARANCES

For the Appellant	Mr P Morrell
Managing Director
Camelot Corporation (GB) Ltd
Sandy Lane
Prestatyn
Denbighshire
LL19 7SF	
For the Respondent	Mark Dale 
Consultant
Messrs Richard C Hall & Partners (Ref-RCH)
Crown Buildings
121 A Saughall Road
Blacon
Cheshire
CH1 5ET	

	JUDGE PETER CLARK:  We have before us an appeal by the Respondent employer, Camelot Corporation (GB) Ltd (Camelot) before the Abergele Employment Tribunal sitting on the 28th April 1998 and a cross appeal by the Applicant employee, Mr Gary Drew, against that Tribunals decision, promulgated with the extended reasons on the 21st August 1998, following a late application by Camelot for extended reasons.   The Tribunals decision with summary reasons was promulgated on the 1st May 1998.  Camelot appeals against the Tribunals refusal to order costs in its favour after dismissing the applicant’s complaint of unfair dismissal.  The applicant cross-appeals against the finding that he was fairly dismissed by Camelot.   

2.	The Tribunal found the following facts.   Camelot manufacture and sell inflatables, mainly bouncy castles.  The applicant commenced the relevant period of employment with Camelot as an artist on the 27th September 1996.  The Managing Director of Camelot is and was Mr Peter Morrell.  In December 1996, the Applicant and other members of staff were issued with a draft contract of employment containing this clause.  
“Staff are not normally permitted to take an active part of any other business during their employment with the company”.  

3.	Although, he received a copy of that draft contract, the Applicant never signed it.  However, he accepted that if Camelot had proof that he had been in breach of that particular clause he would have expected to have been dismissed.  During 1997 Camelot received anonymous letters claiming that the Applicant and a fellow employee Mr Drew were working for a competitive business called Designer Bounce.  Mr Peter Morrell confronted both men with this allegation, both denied it, he believed that they were telling him the truth.  

4.	Shortly thereafter Mr Drew had a conversation with a fellow employee Mr Griffiths, in which he allegedly told Mr Griffiths that he had been working with the Applicant and they were making inflatables in the garage at the Applicant’s parents’ home and that he, Drew, had stolen materials from Camelot and that he was earning £6 p/h from the Applicant to help him make inflatables for sale.   

5.	Mr Griffiths did not immediately pass on the details of that conversation to Mr Morrell but did so after Drew left the employment.  Mr Morrell then suspected the Applicant of being involved with Drew in the theft of materials from the company and that they were, in fact, working for Designer Bounce.  

6.	Consequently, he set a trap for the Applicant.  He got a friend, Mrs Kay, to make contact with the Applicant about hiring a bouncy castle.  She did so and it was common ground on the 4th April 1997 the Applicant supplied a bouncy castle to Mrs Kay on hire.  

7.	Mr Morrell went to inspect the inflatable hired by Mrs Kay from the Applicant.  He considered it to be professionally made and recognised the style similar to his own company’s style of manufacture.  He thought it had the hall marks of having been made by a former employee of Camelot, a Mr Jamieson, who now worked for Designer Bounce.  As a result, Mr Morrell set up a meeting with the Applicant on 7th October 1997 to question him about these matters.   The Applicant was called into the meeting without prior warning and without an opportunity to obtain representation.  During the meeting, two allegations were put to him;  the first that he had stolen the material from Camelot.  That was firmly denied by the Applicant. Secondly, it was put to the Applicant that he had been working for Designer Bounce.  

8.	Before the Tribunal, there was a conflict of evidence as to what the Applicant said in response to that allegation.  The evidence of Mr Morrell and other witnesses for Camelot was that the Applicant admitted that he had been working for that competitor.  The Applicant denied in evidence making such admission.  The Tribunal preferred the evidence of the company’s witnesses and found as a fact that the Applicant made that admission.  

9.	Thereafter, the Applicant was dismissed with immediate effect.  

10.	The Tribunal Decision

The Tribunal found that the reason for dismissal related to the Applicant’s conduct, specifically his admission that he had been working for a competitor.  The Tribunal found it unsatisfactory that the Applicant had received no prior warning of the nature of the disciplinary hearing and the charges against him,  nor had any opportunity to obtain representation. However, they concluded that despite that procedural deficiency, the dismissal was fair.   Following his admission, there was no need for further investigation, applying the approach of this Tribunal in Boys & Girls Welfare Society v McDonald (1996) IRLR 129; dismissal for the admitted offence of working for a competitor fell within the band of reasonable responses open to the employer.

11.	Having succeeded on the substantive issue, Mr Morrell made application for costs.  The Tribunal was not satisfied that the Applicant’s conduct in bringing and conducting the proceedings fell within rule 12(1) of the Employment Tribunal Rules of procedure 1993.  Until the hearing he was not sure on what basis he had been dismissed, and he had an arguable case that his dismissal was procedurally unfair.  Accordingly, no award of cost was made.

12.	Cross Appeal

It is convenient to deal first with the Applicant’s cross- appeal against the Tribunal’s finding that the dismal was fair.  

13.	Mr Dale submits that here there was a failure by the employer to comply with the fundamental tenant’s of fairness which necessarily rendered the dismissal unfair.  He drew attention to the judgement of Mr Justice Wood in Spink v Express Foods Group Ltd (1990) IRLR 320. 

14.	Without wishing to detract from anything which Mr Justice Wood said in that case, it is important to observe the factual distinction between that case and this.  There, the employer deliberately withheld from the employee the nature of the meeting to which he was being called.  In fact, it was to discuss alleged irregularities in his expenses claims.  He denied the allegations but was at a disadvantage in defending himself, not having prior warning and sight of the claims in issue so that he could properly state his case to his employer.  

15.	In the instant case, Mr Drew admitted the second allegation put to him on the Tribunal’s finding.  That is quite different.  It is akin to the employee caught with his hand in the till, to use an example put forward by Mr Dale in argument.

16.	It seems to us that this Tribunal reached a permissible conclusion.  Not every procedural defect will automatically lead to a finding of unfair dismissal under section 98(4) of the Employment Rights Act 1996.  Our view is not altered by citation of the case of Lock v Cardiff Railway  (1998) IRLR 358, again a case which turns in our judgement very much on its own facts.

17.	Accordingly, we shall dismiss the cross-appeal.

18.	The Appeal

Camelot appeal against the Tribunal’s refusal to order costs against the Applicant.  In order to succeed in that Appeal, it must be shown that the decision not to award costs was perverse, in other words, no reasonable Tribunal probably directing itself could conclude otherwise than that this claim was pursued frivolously, vextatiously or otherwise unreasonably.   That is a considerable hurdle to surmount.

19.	Mr Morrell submits that this was a wholly bogus claim.  He seeks to support that view in two ways and we think that a clear distinction must be drawn between the two strands of his argument.

20.	First, he submits that on the material before the Tribunal, it was clear that this was a fraudulent claim.  Secondly, he has referred to a subsequent police investigation which, he seeks to argue, conclusively shows that the Applicant perjured himself before the Tribunal.  

21.	As to the first line of attack, Mr Morrell averred that under cross-examination the Applicant admitted to the Tribunal that he had placed fraudulent documents before them and that he had lied in his evidence.   On examination, following a direction given at the Preliminary hearing in this case held on the 20th January 1999 that Mr Morrell file an affidavit on which the Chairman’s comments and notes of evidence be obtained, it turns out that these assertions are not made out.  No such admissions were made by the Applicant in evidence before the Tribunal.  The documents were genuine documents.

22.	As to the second line of argument, we pointed out this difficulty to Mr Morrell.  Our jurisdiction is strictly limited to correcting errors of law.  We are not a fact finding Tribunal.  The circumstances in which we can and should admit fresh evidence are strictly limited.  It seems to us that if he wishes to re-open the question of the Applicant’s veracity that ought properly to have been done by way of an Application to the Employment Tribunal for a review under rule 11 of the Tribunal Rules of Procedure.  If appropriate for a review hearing, it would then be open to him to serve a witness order on the Police Officer who carried out the subsequent investigation, D C Murphy.  As it is, there is not even any affidavit evidence before us from that officer.  We are not prepared to permit Camelot to adduce the fresh evidence such as it is before us.  It follows that this second approach also fails.   Whether the Tribunal will even now be prepared to entertain an application for review out of time, is entirely a matter for them.  We merely observe that questions have been raised which may require further investigation by the fact finding Tribunal.

23.	In these circumstances, we return to the Tribunal’s reasoning, at paragraph 13 of their extended reasons.  We are quite satisfied that, for the reasons they have given, it was open to the Tribunal to conclude that this was not a proper case for costs, applying rule 12(1).  

24.	In these circumstances, the Appeal also must be dismissed.