Appeal No. UKEAT/0317/09/ZT

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 22 January 2010

Before
HIS HONOUR JUDGE SEROTA QC
MRS D M PALMER
MR D W WELCH

LONDON WASTE LTD	APPELLANT

MR G SCRIVENS	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR J BOYD
(of Counsel)
Instructed by:
Messrs Brabners Chaffe Street LLP Solicitors
Horton House
Exchange Flags
Liverpoool  L2 3YL
	
For the Respondent	MS L ROBINSON
(Representative)
Saxons Citizens Advice Bureau
47 Broomfield Road
Chelmsford
Essex CM1 1SY

SUMMARY
UNFAIR DISMISSAL:  S.98A(2) ERA
The Employment Tribunal on its findings might well have considered that notwithstanding defects in the disciplinary process, that the Claimant was not unfairly dismissed because, even with a fair procedure, on the balance of probabilities, he would have been dismissed in any event.  Case remitted for re-hearing before a differently constituted employment tribunal.

HIS HONOUR JUDGE SEROTA QC
1.	This is an appeal by the Respondent from a decision of the Employment Tribunal at Watford, presided over by Employment Judge Mahoney, who sat with two lay members.  The decision was sent to the parties on 27 February 2009.  The hearing had lasted some five days with one day spent in Chambers.  The Employment Tribunal found that the Respondent had been unfairly dismissed on the basis that there had been no fair investigation.  The Employment Tribunal adjourned issues of remedy and contribution.  

2.	When the matter was sifted by HHJ McMullen QC he stayed the appeal pending the receipt of further information from the Employment Tribunal under the Burns/Barke Procedure.  He did so on 15 May 2009.  The Employment Judge responded on 18 June 2009 to the Burns/Barke request and the matter was then considered by the President, Underhill J, on 21 July 2009.  He referred the appeal to a full hearing which we have heard today.

The Facts
3.	We now turn to the factual background which we take largely from the decision of the Employment Tribunal.  The Respondent is a waste management company with a site at Hornsey Street in Islington.  It deals with domestic and commercial waste.  The site also has a re-use and recycling part which is a separate part of the site.

4.	The Claimant, at the material time, was employed as a transport yard supervisor.  It is clearly known to all employees that they are forbidden to remove items from the site or indeed from the R&R recycling site.  Items that are delivered to the site become the Respondent's property, and removal of any item from the site or part of the site without the authority of the Respondent would be regarded as gross misconduct: see paragraphs 4.7 and 4.8 of the decision of the Employment Tribunal. 

5.	It is also pertinent to note, although we need not go into the details, that for some time there had been some bad blood between the Claimant and one of his colleagues, a transport supervisor, Mr Shaw, and this had led to the Claimant taking out a grievance against Mr Shaw and Mr Shaw taking out a counter-grievance against the Claimant.  Various incidents, including the allegations made by the Claimant and Mr Shaw, led to a disciplinary hearing but what was of particular concern to the Respondent was the alleged theft of bicycles sent for recycling, by the Claimant over the weekend of Saturday 9 and Sunday 10 June 2006.  It was reported to senior management by an employee, who I believe reported to the Claimant, a gentleman called Alban Xama, that the Claimant had used his JCB to remove on two occasions a total of three bikes from the R&R department and place them in his van. 

6.	Mr Xama reported that the Claimant had said one of the bikes, a blue bike, belonged to a Mr Wayne Adams, an employee who, like Mr Xama, reported to the Claimant and that the Claimant had collected this bike from the weighbridge clerk, a Mr Duane Jonas.  As a result of the complaint made by Mr Xama, the site supervisor, Mr Card, viewed closed-circuit television and took a number of witness statements, including a witness statement from Mr Xama, Mr Jonas, Mr Adams and five other employees. 

7.	The Human Resources Manager, Mr Cole, decided that he would deal with the grievances before considering any disciplinary action against the Claimant.  The grievance procedure commenced, I think, on 11 October 2006 and as the allegations were of such gravity, the Claimant and Mr Shaw were both suspended on full pay to allow an unimpeded investigation.

8.	Mr Cole then took no less than 15 witness statements from witnesses, as well as a statement from Mr Shaw.  On 21 October 2006, the grievance meeting reconvened.  It was adjourned for further investigation to 23 November by which time four other witnesses had been interviewed.  Mr Beattie found that there was insufficient evidence of threats made by Mr Shaw against the Claimant but there was evidence of a feud between the two and he recommended disciplinary action against both Mr Shaw and the Claimant.  The Claimant appealed unsuccessfully. 

9.	As Mr Cole had advised on the grievance he decided the disciplinary hearing, so far as the Claimant was concerned, should be conducted by Mr McGeehan, the Respondent's Finance Director, and Mr Pride, Human Resources Officer, would assist in carrying out further investigations.

10.	Mr Cole provided an analysis of the closed-circuit television footage and witness statements and set out a proposed line of questioning to be put to Mr Xama, Mr Adams and Mr Card.  The Employment Tribunal, at paragraph 4.26 of its decision, say, in terms, that had Mr Cole's recommendations been put into effect, there was no doubt it would have found the investigation to be fair.  For some reason which we do not know, Mr Pride, although he did carry out further investigations, did not put all the questions that were recommended by Mr Cole. 

11.	The disciplinary hearing concerned nine allegations of which the Claimant had notice.  It commenced on 19 March and the Claimant was represented by his trade union representative, Mr Fox.  It was conducted, as we have said, by the Finance Director, Mr Matt McGeehan.  Mr McGeehan found four allegations had been proved.  They were as follows: (a) that the Claimant had removed three bicycles between 9 and 10 December 2006 from the R&R yard and that this was gross misconduct, (c) the Claimant had acted in a manner unbefitting by engaging in a feud with Mr Shaw, (g) the Claimant had acted in an inappropriate manner by abusing his Line Manager, Mr Card, and (h) the Claimant had acted in such a manner as to give the Respondent cause for concern about the trust and confidence they need to place in him as a supervisor and employee. 

12.	Mr McGeehan wrote a detailed letter of dismissal which we now refer to.  That letter, in fact, runs to 88 paragraphs over some 10 pages.  It is perhaps apposite to note that Mr McGeehan needed to consider firstly whether Mr Scrivens committed an offence by removing the bicycles from the R&R; that is if he did not remove them from the site altogether, and secondly, did he commit an offence by removing the bicycles from the site altogether?  He noted Mr Scrivens' defence, that he had removed the items from the R&R but intended to use them on the site for employees to go to the shops for lunch, and that he did not take them with the intention of removing them from the site.  Mr Scrivens also stated he had spoken to Mr Aston and Mr Card about the possibility of using a bike to go to the shops, therefore he did not feel he was contravening company rules.

13.	Mr Aston, who was the supervisor in charge of the R&R yard, made a statement in which he accepted that he had allowed Mr Scrivens to come up to the R&R and remove a bicycle.  Mr Aston was of the equivalent grade to Mr Scrivens and therefore, Mr McGeehan found, was not in a position to give the required authority to him.  Mr McGeehan noted that Mr Scrivens had admitted taking the bicycles from the R&R yard and the CCTV footage had confirmed this.  The CCTV footage had shown Mr Scrivens taking the bicycles from the R&R, taking them down the R&R ramp.  Mr Scrivens had admitted this but the CCTV footage did not show where he eventually placed the bicycles. 

14.	At paragraph 39 and 40 of the letter, Mr McGeehan expresses himself in this way:

“39. In summary, I find on the evidence before me that, on the balance of probabilities, Mr Scrivens, having removed the bicycles from the R&R, then removed them from site in contravention of express company rules and instructions.  
40. The removal of such property is an extremely serious matter.  Our contractual relationship with our customers and the terms of our site licence from the Environmental Agency means that all waste coming into or leaving the site must be accounted for.  For this reason we do not allow employees either to bring waste material into the site or to remove any materials from the waste stream and no totting arrangements are allowed.  Material on our sites is the property of the company and unauthorised removal is viewed as theft.”  

15.	Mr McGeehan regarded removal of the bicycles from the R&R itself as a serious breach of company rules but removal of the bicycles from the site was an extremely serious breach of company rules and he regarded this as effectively amounting to theft.  That act alone amounted to gross misconduct and warranted summary dismissal. 

16.	It is apparent from Mr McGeehan’s letter at paragraphs 84 to 87 that apart from the gross misconduct he had found in relation to the bicycles, he would not have considered summary dismissal in relation to the other three matters which he found proved which would have brought upon the Claimant a lesser penalty, possibly some form of redeployment.  

17.	Moving ahead to the decision of the Employment Tribunal, the hearing began on the Monday.  Throughout the hearing everyone concerned, including the members of the Employment Tribunal, had assumed that the blue bike which was being referred to was owned by Mr Adams.  However, on the last day of the hearing, after the Claimant had completed his evidence and we understand that Mr Boyd, who appeared for the Respondent there as he has before us, was cross-examining another witness, it was disclosed that the Claimant had some important information he wished to bring to the attention of the Employment Tribunal and he was recalled to give evidence, and he said at that stage that the blue bike, which was in fact an amalgamation of two bikes previously removed by the Claimant, had been taken by Mr Adams.  He had known this all along but had not mentioned it because he was unwilling to get Mr Adams into trouble. 

18.	The Employment Tribunal found that had there been a reasonable investigation, this would have revealed Mr Wayne Adams cycling the blue cycle out of the site.  The Employment Tribunal were satisfied that the true position was, and I now refer to paragraph 4.38 of the decision, that the Claimant had taken two bicycles, one was red and one was white, from the R&R in his JCB and had cannibalised them to make one bike; the other bike had been ridden by Mr Duane Jonas and Mr Adams, who had taken it home.  In fact, I think I may have transposed the colours: the blue bike was the one that had been ridden by Mr Jones and Mr Adams, and the red bike was the bike that apparently had been retained by the Claimant.  The blue bike was, as I have said, an amalgamation of two bikes that had been cannibalised to produce one usable bike.

19.	The Employment Tribunal found that the Claimant knew Mr Adams was in breach of the rule preventing items being taken off site and that Mr Adams would have been dismissed, had the Respondent's management discovered what he had done.  The Claimant had therefore decided to remain silent to protect his friend.  This led to significant difficulties in the investigation because the Respondent, as we have said, believed that Mr Adams owned his own blue bike and that the blue bike shown in the CCTV footage was Mr Adams' own bike.

20.	The Employment Tribunal then said this:

“The Tribunal is satisfied that if a proper investigation had taken place in accordance with the instructions given by Mr Cole to Mr Pride, either the Respondent would have discovered the true position and could have dealt with it accordingly or, if Wayne Adams and Alban Xama had both not told the truth, the Respondent could not have been faulted in coming to the wrong conclusion on the basis of false evidence having been given to them.” 

21.	It is an obvious comment that if the Claimant did not take the blue bike himself, he knew that someone for whom he was responsible had taken it and he might well have been regarded as being guilty of gross misconduct in failing to report this to his superiors.   The Claimant had an internal appeal against his dismissal but that appeal was dismissed.  We now turn to the decision of the Employment Tribunal.  The Employment Tribunal set out the issues that it needed to consider.  We note, at this point in time, that, at paragraph 2.5 one of the issues calling for a decision was:

“If any part of the procedure followed was unreasonable, has the Respondent shown that, even if you followed a fair procedure, it would still have dismissed the Claimant?  If not, what is the percentage change that it would have done so (below 50%)?”

22.	This seems to be a reference to section 98(A), since repealed, of the Employment Rights Act.  The Employment Tribunal then set out the facts, largely as we have summarised them, and it directed itself as to the law.  It referred to section 98 of the Employment Rights Act, the well-known principle to be found in British Home Stores v Burchell [1980] ICR 303.  The Employment Tribunal must decide whether the decision to dismiss and indeed the whole dismissal process was conducted within a band of reasonable responses.  It recognised that it was not for the Employment Tribunal to substitute its views for the Respondent, referring to the well-known case of Post Office v Foley [2000] IRLR 827.  It directed itself that the fairness of the procedures followed by the Respondent must be within the band of reasonable responses referring to Sainsbury's Supermarkets Limited v Hitt [2002] EWCA Civ 1588.  It also recognised that in determining whether the Respondent carried out a reasonable investigation, it was necessary to have regard to the gravity of the charges; here allegations of a criminal offence, and the potential effect on an employee.  It also directed itself as to what might constitute gross misconduct, as in the case of  Neary v Dean of Westminster [1999] IRLR 288.

23.	The Employment Tribunal, in its conclusions, accepted that the reason for the Claimant's dismissal was a potentially fair reason, namely misconduct.  However, it concluded that the investigation was unfair.  The Tribunal concluded that the Respondent did not carry out a fair investigation because of the failure of Mr Pride to carry out the instructions given him by Mr Cole in the “Cole document” in respect of Wayne Adams' evidence and the proposed analysis of the CCTV evidence.  By reason of Mr Pride's failure to carry out that appropriate investigation, both Mr McGeehan, in dealing with the disciplinary hearing, and Mr Middleton dealing with the appeal, did not have before them all the relevant evidence to make a proper decision as to whether the Claimant was guilty of gross misconduct in relation to stealing bicycles from the site.

24.	However, the Employment Tribunal found at paragraph 7.4 that the Respondent was entitled to make the other findings of misconduct, set out in Mr McGeehan's letter of 31 May 2007.  We construe that as being a reference to the three other grounds of complaint which were found, rather than any findings in relation to the bicycles.

25.	The Employment Tribunal then concluded that the dismissal of the Claimant was substantively unfair, but there might be very substantial contribution by him to his own dismissal, and they effectively parked issues of contribution and any other deductions to the remedies hearing for which they adjourned. 

26.	It is noticeable that the Employment Tribunal made no express findings as to whether the Claimant did in fact steal the red bike.  Nor did they make any findings as to his responsibility or involvement in the theft of the blue bike which was an amalgamation of two bikes, as I have noted, taken by the Claimant from the R&R yard and which blue bike had been appropriated by Mr Adams.

27.	In response to the Burns/Barke request, which, among other things, asked whether any Polkey deduction had been considered, the Employment Tribunal said it was unnecessary to make findings in relation to Polkey because Polkey rules did not apply to substantively unfair dismissals. 

28.	We now turn to the law, which is not controversial.  In so far as the Employment Tribunal directed itself by reference to the cases we have mentioned it did so correctly.  The issue is, in this appeal, whether the Employment Tribunal properly directed itself as to the law in other respects and correctly applied the law to the facts.  There is no dispute as to the importance and the necessity of Employment Tribunals applying the test of the reasonable band of responses across the whole disciplinary process, including the investigation and the decision to dismiss, always bearing in mind the importance of recognising the gravity of the charges and the potential effect on an employee.

29.	Section 98(A) of the Employment Rights Act also needs to be borne in mind.  Section 98(A)(1) provided that an employee who was dismissed should be regarded as unfairly dismissed if one of the statutory procedures set out in part 1 of schedule 2 of that Act was not completed.  But, subject to subsection 1 (this is now subsection 2):

“Failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer’s action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.”

30.	We now turn to consider the Notice of Appeal in the submissions.  Mr Boyd has valiantly sought to persuade us that the Employment Tribunal found that the Claimant had misappropriated the red bicycle.  He submitted that if that was correct, then having regard to section 98(A) and the other matters found against the Claimant, the Employment Tribunal was bound to find that this dismissal was fair.  We are not able to accept that submission, as I think we made clear to Mr Boyd during the course of his submissions, because we simply do not know what facts were found by the Employment Tribunal and unless we could be satisfied that there would only be one answer to the question as to what facts they found, this is a matter that would need to be remitted to the Employment Tribunal.

31.	Mr Boyd submitted, and we have to say that we agree with him, that the Employment Tribunal had made no findings at all in relation to the circumstances of the appropriation or possible misappropriation of the red bicycle.  No findings in relation to the involvement of the Claimant in the theft of the two bicycles that were merged into the one blue bicycle the Employment Tribunal found to have been stolen by Mr Adams.  No findings as to the relevant gravity of the removal of bicycles from the R&R yard, in any event, and the significance of the Claimant knowing of Mr Adams’ theft, having withheld that until the last minute.  The evidence that the Employment Tribunal evidently accepted from the Claimant, but in fact reflected little credit on him as the Claimant’s supervisor.

32.	The Employment Tribunal, it was then said, had failed to apply the reasonable range of responses test in relation to the investigation.  It had concentrated on the failure to follow the recommendations of Mr Cole.  Mr Boyd submitted that this was not the appropriate question to have asked.  The Employment Tribunal should have asked firstly, what questions were in fact asked of the various witnesses and, more importantly, it should have asked itself, in the round, “Was the investigation carried out by the Respondents, which was clearly an extensive investigation, within the reasonable band of responses?”  That was not a question that the Employment Tribunal had addressed.  Mr Boyd challenged as unreasonable the findings by the Employment Tribunal that had the Cole document recommendations been followed, the truth would have been revealed.  It was unreasonable, submitted Mr Cole, to expect an investigation to follow what he described as “in Hercule Poirot style” the possibility of some clue leading to some brilliant piece of detective work.  

33.	The Employment Tribunal, it was then said, should have asked itself whether the cumulative effects of the matters found should have brought section 98(A) into play.  He submitted that the dismissal was procedurally, rather than substantially, unfair and drew support for this from paragraph 4.26 of the decision of the Employment Tribunal which we have already referred to.  That is the Employment Tribunal’s finding that had the Cole recommendations been followed, the Tribunal had no doubt that it would have come to a different conclusion about whether the investigation into this matter was fair.

34.	We then heard from Ms Robinson on behalf of the Claimant.  She submitted that the Employment Tribunal was entitled to find that the process was unfair because the Employment Tribunal did not have full or sufficient material before it on which to come to a conclusion as to whether the Claimant was guilty of gross misconduct.  She pointed to paragraph 7.3 of the decision in this regard and submitted that the decision was substantively unfair; there was no proper investigation so there were no reasonable grounds for Mr McGeehan’s belief that the Claimant was guilty of gross misconduct.  She submitted that it was impossible to say that ignoring the question of the two bicycles merged into one, taken by Mr Adams, the Claimant would have been dismissed in any event, although she accepted that it was quite unclear what the Employment Tribunal had found in relation to the red bike.

Conclusion
35.	We now turn to our conclusions.  In our opinion there has been a significant failure by the Employment Tribunal to accurately follow the range of reasonable responses test in relation to the investigation procedures, as a whole.  The Employment Tribunal should have asked itself whether the procedure as a whole was within the range of reasonable responses.  It should have focussed on what was done as well as what was not done.  It should have looked at the questions that were asked and not concentrated exclusively on the failure to follow Mr Cole’s recommendations.

36.	We are not, in any event, persuaded that answering the further questions would have led to the Respondent learning that Mr Adams had stolen the blue bike.  That is, in the absence of any admission or statement to that effect by the Claimant, having regard to Mr Adams’ repeated denials of any knowledge of the matter.

37.	For this reason, that is the failure to correctly apply the range of reasonable responses test, this decision cannot stand.  We have explained why we are not satisfied that the Employment Tribunal had made a finding that the Claimant had stolen the red bike.  It is unfortunate and, again, a further reason for allowing this appeal, that the Employment Tribunal simply made no findings on matters that should have been dealt with.  Not only the theft or otherwise of the red bike but also the significance of the Claimant’s conduct in relation to Mr Adams and concealment of the truth and the gravity of simply removing the bicycles from the R&R yard.  The Employment Tribunal should also have considered the possible relevance of section 98(A) which is what we assume it had in mind in paragraph 2(5) of its decision.

38.	Our view of the matter is that this dismissal was procedurally, as opposed to substantially, flawed on the findings of the Employment Tribunal.  It seems to us that the Employment Tribunal should have considered the impact of section 98(A)(2) of the Act but there are insufficient facts found to enable us to say for certain what the Employment Tribunal should have ordered, having regard to that section.

39.	In the circumstances of this case it would have been helpful to the parties if the Employment Tribunal had not simply “parked” the issue of contribution as it was so closely tied up with the decision on the merits and the Employment Tribunal could easily have decided; firstly the issue of contribution, and secondly, the percentage chance of the Claimant having been dismissed had a proper procedure been carried out.  Had the Employment Tribunal made those findings it would have enabled the parties to know the position and may well have enabled this litigation to have been terminated without further hearings.

40.	In the circumstances, we remit this matter for hearing before a differently constituted employment tribunal on the question of unfair dismissal.  We would also say this: we have, of course, not come to any conclusion on issues of contribution and prospects of dismissal, in any event, but being realistic there must be a high risk that the Claimant will find, should he succeed in his hearing before the Employment Tribunal, that there will be substantial deductions from any compensation he might otherwise receive.  We mention this because the parties might well wish to consider whether they should not seek some form of mediation through ACAS which will save them the expense and the time of a further lengthy hearing.