Appeal No. EAT/0419/02 SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
SITTING AT: Cardiff Civil Justice Centre, 2 Park Street, Cardiff CF10 IET

	At the Tribunal
	On 20 March 2003

Before
THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)
MR B BEYNON
MR G LEWIS

GAMESTEC LEISURE LTD	APPELLANT

MR B MAGEE	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR M DAVIES
(Solicitor)
Instructed by:
Messrs Andersons Solicitors
Queen's Bench Chambers
42 The Rope Walk
Nottingham NG1 5EG	
For the Respondent	No Appearance or Representation By or on Behalf of the Respondent	

THE HONOURABLE MR JUSTICE BURTON (PRESIDENT)

1	This is an appeal by a company now known as Gamestech Leisure Ltd, formerly Kunick Leisure Ltd, against the decision by the Employment Tribunal at Cardiff on 6 March 2002 by a majority, the Chairman Dr Rachel Davies dissenting, that the Applicant, Mr Magee, was unfairly dismissed.

2	Two grounds are put forward in respect of the appeal, which has been argued by Mr Davies on the Appellant company’s behalf.  We shall turn to them in a moment.

3	The Applicant, Mr Magee, has not attended before us, his previous solicitors having gone off the record, and, notice of the hearing having been given to him, he has not attended.  But, notwithstanding, there has been full consideration of this appeal.  It has not, in any way, been affected by the absence of Mr Magee, in the sense that he would have, had he been here, sought to support the decision of the Tribunal below on the grounds upon which the Tribunal found in his favour, and, as is inevitably the case, we have carefully considered and respected that decision.  There has been the same need for reconsideration of that decision as there would have been had Mr Magee himself attended.

4	The Applicant had been employed by the Respondent company since 3 November 1996.  The Respondents are suppliers of coin-operated amusement machines to the licensed retail trade.  It is plain, as was set out inter alia in the Chairman’s dissenting paragraph, that this was a cash-related business which requires the highest possible standards, in the sense that those like this Applicant, namely a field service engineer, who have and have alone unsupervised access to the cash in the machines, and are trusted by the employer, and indeed by the retailer at whose premises the machines are kept, must account fully for the money.
5	His contract of employment contained a provision relating to summary dismissal which reads in material parts as follows:

“Summary Dismissal
Employment will be terminated without notice or previous warnings for gross misconduct.  The Company reserve the right to decide what is considered gross misconduct.  Generally this includes any breach of duty or conduct which brings the Company into disrepute or action that is inconsistent with the relationship of trust that is required between the employee and the employer.  Examples of gross misconduct warranting summary dismissal include, but are not limited to: -
-	Theft
…
-	Negligence resulting in loss of or damage to company property including vehicles…”

There can be no doubt that the cash in and recovered from the machines is company property.

6	The findings of fact by the Tribunal include the following:

3	“On 19 February 2001 the licensee of a public house informed the respondents of her suspicion as to Mr Magee’s honesty in the handling of cash from the machines.  The respondents arranged a check the same day and found a £10 discrepancy.
4	On 25 April 200l two members of the respondents' security department carried out checks on Mr Magee at two public houses.  The cash contents of a fruit machine were counted at each site, meter readings were taken and every step of the process and timing was recorded.  Mr Magee was then called by the licensees to repair the machine, and after he had left further checks were conducted.  Again the times and steps taken were recorded.  The evidence was that the checks were thorough.  All parts of the machines were examined with the aid of a torch, and they were pulled forward and shaken.  There was a discrepancy of £8 at one site and £3 at the other.
5	On his return to the depot Mr Magee was called to an investigatory meeting.  He denied taking the money but was unable to account for it.  He said that at one site there were children trying to get into his tool box and pulling wires and that it was possible they had taken the £8.  He had no explanation for the missing £3.  He said he had taken £3 out of the machine and put it back in.”

It was further recorded that:

7	“Statements were taken from the security officers and from the licensees who asserted that no-one had touched or been near the machines between the time that the first and second checks were made.”

There was no criticism by the Tribunal of the procedure which was carried out by the employer.
7	At a disciplinary meeting, the nature and course of which is described in the Decision, the Applicant read out a statement and he explained, as recorded in paragraph 9 of the Decision, about the children playing around the machines on one of the sites.

8	The Respondents’ conclusion was to disregard the £8 discrepancy in view of the presence of the children.  They thus gave the benefit of the doubt in that regard to the Applicant, who was, on any basis, a long-standing employee.  But, as is recorded in the Tribunal’s Decision, in paragraph 9:

9	“…in the absence of any satisfactory explanation for the missing £3 they took the view that Mr Magee had committed gross misconduct coming within either “theft” or “negligence resulting in loss of…company property” as described in the written procedures.”

Consequently, Mr Magee was dismissed for gross misconduct.

9	He was allowed an appeal, and to be accompanied at that appeal.  Again there is no criticism by the Tribunal of the fairness of that appeal.  On the appeal, the Applicant continued to deny taking the £3, and a further double check was carried out to see whether there could have been any other explanation as to its disappearance, by way of carrying out a further check on the machine.

10	The dismissal, therefore, as has been indicated, which was upheld by the Respondents on appeal, was on the basis that the Applicant had committed gross misconduct, and that that gross misconduct was either theft or negligence resulting in loss of company property.  As Mr Davies has fairly accepted in the course of argument, that must mean that the employer gave, yet again, the benefit of the doubt to the Applicant in relation to this matter also, and was not able to be satisfied that the conduct of the Applicant amounted to dishonesty.  
11	If an employer dismisses for “either dishonesty or negligence” it appears to us that it must be right to say that the employer was not satisfied as to dishonesty, and consequently it is as if they have said “we are not sure about the dishonesty but we are sure about the negligence and consequently dismiss on the latter basis even if we cannot be sure of the former”.

12	In those circumstances, in our judgment, it must be construed as being the same as if this employer, after making all allowances, had simply dismissed for gross misconduct, namely negligence, resulting in the loss of company property.

13	The minority, namely the Chairman, concluded that that was within the range of reasonable responses of the reasonable employer and in paragraph 23 of the Decision the Chairman’s conclusion is set out as follows:

23	“The CHAIRMAN DISSENTING finds on the evidence that:- 
(i)	in view of the express inclusion of theft and negligent loss in the written examples of gross misconduct, the respondents acted reasonably in regarding the alleged conduct as gross misconduct, irrespective of the amount of the loss or the applicant's length of service. 
(ii)	the alleged conduct of theft or negligent loss constituted "conduct inconsistent with the relationship of trust" as described in the written procedures. 
(iii)	In the circumstances of a cash-related business which requires the highest possible standards of trust and which expressly states in written procedures that conduct inconsistent with the relationship of trust will lead to summary dismissal, dismissal came within the band of responses a reasonable employer would or could have made to the situation.”

14	The majority (namely the lay members) made its finding, as recorded in paragraph 22 of the Decision, as follows:

22	It is noted that the respondents' disciplinary procedure lists "negligence resulting in loss of or damage to company property including vehicles" as being a possible example of gross misconduct, however if the applicant had been negligent, .as opposed to dishonest, it is considered that for a first offence dismissal would seem to be outside the range of responses available and, from the evidence, no consideration had been given to alternative possible disciplinary actions.”

15	Mr Davies has, in his helpful and concise submissions before us, characterised the grounds of the dismissal in two ways:

(1)	He has not shrunk from the submission that the conduct of the Applicant in this case did amount, even if, assuming in his favour, it was not dishonest, to conduct which was inconsistent with the relationship of trust required between the employee and employer.  He submits that the kind of unexplained disappearance of money, which occurred here, if not to be explained by dishonesty, can only be explained by such inattention to the interests of the employer, such reckless disregard of the interests of the employer, as can only amount to a breach of that relationship of trust.  Where, in a cash-related business, someone in unsupervised sole control of the money is unable to explain how it disappeared, then that can only be described to a breach of the trust that is imposed upon such an employee.

(2)	Alternatively, even if it be not a breach of the relationship of trust, Mr Davies points out that negligence resulting in the loss of company property is an example of gross misconduct justifying dismissal, and, even if it does not amount to the breach of relationship of trust, it is open to the employer to dismiss for negligence in such circumstances in relation to someone who has the sole unsupervised control of cash in a cash business, where there is an available ground for dismissal specifically set out in the contract of employment, so that the employee is put on notice in that regard.

16	In those circumstances, it is plain that the employer had that remedy available, even if it could not be satisfied that there was dishonesty.  The majority, as we have cited, “considered” that that would “seem” to be outside the range of responses available.

17	It is well-established that the appropriate test for an Employment Tribunal is to ask itself whether the decision of the employer was within the band of reasonable responses of an employer; and a Tribunal must not substitute its own decision as to what it would have done for that of the reasonable employer if the course taken by the employer was within that band of responses.  The dissenting Chairman plainly thought that the conduct of the employer was within that band, but was in the minority.

18	On the face of it, the majority appears to be addressing the correct question, but it did so, even in the words it used itself in paragraph 22, in an extremely tentative form.  We conclude that if it had in fact asked itself whether, without the accompanying protection of the words “considered” and “would seem to be”, in the circumstances which we have described, the course taken by the employer of summary dismissal for gross misconduct was in fact outside the band of reasonable responses of a reasonable employer, it would not have felt able so to conclude.

19	We are satisfied that in this case the majority substituted its own decision and did not follow the correct approach in law to the decision by the employer, and that the decision to dismiss, hard as it must obviously have been for what appears to us to have been a sympathetic employer, was a course which was reasonably open to it and cannot consequently be characterised as an unfair dismissal.

20	In those circumstances we shall allow the appeal, substituting what is in our judgment the only possible conclusion, namely that the dismissal was within the band of reasonable responses of a reasonable employer and therefore fair.

21	Mr Davies did not need to deal consequently with his second ground, which is that the Tribunal on account of this did not approach the question, having found unfair dismissal, of contributory fault.  Mr Davies has relied in his Skeleton Argument on Nelson v British Broadcasting Corporation (No. 2) [1979] IRLR 346 and Tesco Stores Limited v Othman-Khalid EAT/385/00.

22	It is clear that the Tribunal ought to have gone on to consider the question of contributory fault and reached a conclusion in that regard which inevitably would have involved at any rate some finding, given the conclusions it had unanimously reached as to the facts of the case involving at least serious negligence in dealing with cash.

23	But in the light of the conclusion that we have reached on the first ground, we do not need to deal further with that second ground.

24	The appeal is consequently allowed.