Appeal No. UKEATS/0014/10/BI

EMPLOYMENT APPEAL TRIBUNAL
52 MELVILLE STREET, EDINBURGH, EH3 7HF

                                                                                                                   At the Tribunal
                                                                                                                   On 24 & 25 November 2011

Before
THE HONOURABLE LADY SMITH
MISS S B AYRE FIPM, FBIM
MRS G SMITH

INDUSTRIAL AND MUNICIPAL PROJECTS LTD	APPELLANT

MR DAVID J BOYLE	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR D WALKER
(Solicitor)
Dundas & Wilson LLP Solicitors
191 West George Street
Glasgow
G2 2LD	
For the Respondent	MR B NAPIER
(One of Her Majesty’s Counsel)
Instructed by:
McClure Naismith Solicitors
292 St Vincent Street
Glasgow
G2 5TQ	

SUMMARY
UNFAIR DISMISSAL – Reasonableness of dismissal

Unfair dismissal.  Breach of Contract.  Tribunal’s finding of unfair dismissal and breach of contract upheld.  None of the lengthy grounds of appeal (substitution/perversity) demonstrated that the Tribunal had fallen into error.

THE HONOURABLE LADY SMITH 
Introduction
1.	The Respondent used to be Mr and Mrs Boyle’s business.  He and his wife previously owned all its shares.  They sold them to William Tracey Limited (for £2.7m), on 1 January 2008, under a contract which included a service agreement whereby Mr Boyle was to be Operations Director of the Respondent and, provided certain profit levels were attained in each of three ensuing years, further payments totalling £600,000 were to be made.  The agreement also provided that if Mr Boyle was unfairly dismissed during that “earn out” period, the entire £600,000 would become immediately due and payable.  Mr Boyle took up the role of Operations Director as from 1 January 2008.  His wife also carried on working for the Respondent, in an administrative role.

2.	William Tracey Ltd is a substantial business and is part of the William Tracey Group, an organisation with substantial administrative resources to which the Respondent has access (see:  Tribunal’s judgment paragraph 3).  50% of the shares in William Tracey Ltd are owned by Michael Tracey.  After the sale of the business, Michael Tracey became Chairman of the Respondent and Graeme McDonald was appointed Managing Director.

3.	Mr Boyle was dismissed during the “earn out” period, on 18 November 2008.  He presented a complaint to the Employment Tribunal, claiming that he had been unfairly dismissed and wrongfully dismissed, in breach of contract.  A hearing took place before the Employment Tribunal sitting in Glasgow (Employment Judge Mr R Williamson) during four days in May and six days in August, 2009 and by judgment registered on 7 October 2009, the Tribunal found:

“The unanimous judgment of the Tribunal is that the claimant was unfairly dismissed and wrongfully dismissed by the respondent and the respondent is ordered to pay the claimant a monetary award of £19,560.”

4.	Written reasons were issued on 27 January 2010.

5.	We will, for convenience, continue to refer to parties as Claimant and Respondent.

6.	The Claimant was represented by Mr Thomson, solicitor, before the Tribunal and by Mr Napier QC, before us.  The Respondent was represented by Mr D Walker, solicitor, before the Tribunal and before us.

Background
7.	The Respondent’s business involved the provision of a range of industrial services including the unblocking and inspection of underground pipes.  They operated principally out of a site at Carntyne in Glasgow, where there were some 45 employees.  They also had a small base in Bradford where three employees worked.  Those employees were Stewart Bellwood (a plant operator), Gerald McKeown (who worked with Mr Bellwood and carried out plant and vehicle repairs), and Paul Moffatt (the manager).  The Bradford operation carried out work for one client only, Yorkshire Water.  Due to a change in their contract tendering processes in April 2008, the Respondent’s Bradford operation suffered a material reduction in turnover.

8.	Michael Tracey was not actively involved in running the Respondent and was rarely at its premises.  Mr McDonald, equally, was rarely at the premises.  The Claimant continued to work very much as he had done before.  Indeed, he was assured about that in an email from Mr McDonald dated 13 August 2008:

“I would stress again that your role as Operations Director reporting to myself remains unchanged.  You remain in overall control of the operational activities of IMP…..”

9.	However, Mr McDonald in fact intended that a new employee, Mr Bache, who had been appointed as Area Industrial Services Manager for the North of England, would have an operational role in respect of the Bradford operation, reporting directly to him.  He did not advise the Claimant about that, though.

10.	The Claimant regarded Mr Bache as an expensive unproductive overhead, a view which he made clear.  The Claimant was concerned that his ability to achieve the requisite “earn out” profits was being adversely affected.  The Respondent’s results for September 2008 showed a decline in profitability and Mr Tracey asked the Claimant, in a telephone conversation on 10 October 2008, to set out what he would have done if he had still been owner of the business.

11.	Two things of significance occurred shortly after that.  On 16 October, Mr Moffat emailed the workshop at Carntyne regarding a machine (known as a “Muller”) which required repairs, one of which could not be carried out in Bradford.  A few days later, Mr Bellwood telephoned the Claimant and told him he was resigning at the end of that week, to take up employment with a competitor.  Mr Bellwood indicated that Mr McKeown would also be leaving.  The Claimant assumed that he would be going with Mr Bellwood to the same employer, as a two man team.

12.	In the light of this news, the Claimant wanted to speak to both Mr Bellwood and Mr McKeown and he asked them to drive the Muller up to Carntyne, on 23 October, which they did.  In the meantime, Mr Bellwood faxed his resignation letter to the Claimant, on 21 October.

13.	On 22 October, the Claimant had his wife type up his proposals for the business, following on Mr Tracey’s invitation for him to do so.  They included a proposal that the Bradford operation should be closed.  The document included the following:

“Close the Yorkshire office. Our Yorkshire operators have resigned and are moving on to another contractor. They will be very difficult to replace.”

14.	The reference to “operators” was a reference to Mr Bellwood and Mr McKeown.  The document was received by the Respondent on 23 October.  At 7.30am that morning, Mr Tracey telephoned the Claimant, indicated that he thought it a “strong/heavy document” (see: Tribunal’s reasons paragraph 16) and arranged to meet with the Claimant that afternoon.

15.	The Claimant met Mr Bellwood and Mr McKeown during the morning of 23 October.  He found out from Mr McKeown that he was not in fact going to resign.  He advised both of them that he was intending to recommend at the meeting he was due to have that afternoon that the Bradford operation should close but the decision would not be his.  He advised Mr McKeown not to resign since if he did so, he would lose his redundancy payment.

16.	The Claimant met with Mr Tracey and Mr McDonald that afternoon.  It was an angry meeting.  The Claimant’s account, which was accepted by the Tribunal as being true, was that he advised that only Mr Bellwood had resigned i.e. correcting the statement in his document which had been to the effect that both men had resigned.  Mr McDonald’s evidence (which was to the effect that the Claimant had continued to represent that Mr McKeown had resigned and had not corrected his earlier statement) was not accepted by the Tribunal.  Mr Tracey did not give evidence.

17.	Mr McDonald was resentful of what he regarded as a challenge by the Claimant to his authority and made his own enquiries of Mr Bache and Mr McKeown.  He prepared a memo dated 26 October 2008 which contained ten separate allegations about the Claimant (see:  Tribunal’s reasons paragraph 22).  The allegations were damning and trenchant in their terms.  They included that the Claimant had “systematically lied” and that:

“The claimant advised Mr McKeown that he intended to close the Yorkshire operation and make him redundant.
That in the document 53 – 54 the claimant had advised Mr McDonald and Mr Tracey that the Yorkshire operators had resigned and that the area manager be made redundant which information was repeated at the meeting on the afternoon of 23 October 2008.”

18.	The Claimant was asked to attend a meeting with Mr Tracey and Mr McDonald on 27 October which he thought was to continue their discussions about the future of the Yorkshire operation.  He knew nothing of Mr McDonald’s memo.  He attended the meeting.  It was short.  He was accused of lying and that he had represented that the Yorkshire operators had resigned when they had not.  The Claimant responded that he had represented only that Mr Bellwood had resigned and obtained a copy of Mr McKeown’s letter of resignation which he handed it to Mr Tracey.  He suspended the Claimant with immediate effect.

19.	The Claimant’s wife was at work on 27 October.  She was asked to meet Mr McDonald in the Claimant’s office, which she did.  Mr McDonald accused the Claimant of telling lies and, on the Tribunal’s findings in fact (paragraph 44):

“…said that the relationship had broken down and that he could never work with him again.  Pointing at the claimant’s seat behind the claimant’s desk, Mr McDonald told Mrs Boyle that the claimant would never sit there again and he (Mr McDonald) would be taking a more active role……He indicated Mr Tracey would be getting in touch with the claimant to offer a settlement.”

20.	In an email to the Claimant’s solicitor on Monday 3 November 2008, Mrs Boyle advised:

“….when Graeme telephoned me on Friday to update me on the situation, i.e. Michael Tracey is having a meeting with one of the Irish Directors on Tuesday, he stated that Michael would telephone me thereafter to arrange a meeting with himself, myself and David probably on Thursday or Friday of this week. Graeme indicated to me that this meeting would be to offer David a settlement….”

21.	The Tribunal relied on that email as a factor which weighed with them in their finding that Mr McDonald was not  a reliable witness – he had denied that the conversation referred to in paragraph 44, had taken place.  The Tribunal considered that the reference to offering the Claimant a settlement was consistent with his having made it clear that the Claimant would not be allowed to return to work.

22.	Jane Stewart was both company secretary of the Respondent and finance director of William Tracey Ltd.  She saw Mr McDonald’s memo of 26 October regarding the Claimant, on 27 October and was concerned.  It was, she considered, “an over the top reaction to what had happened that week” and over-reliant on opinion.  It did not accord with any knowledge she had of matters from her involvement as a board director.  She spoke to Mr McDonald.  He told her that he would be commencing an investigation.  She advised that neither he nor Mr Tracey should be involved in investigating matters.  Mr Kerwin, an employee with experience in investigating health and safety matters (but no experience in HR matters), was identified as the person to be appointed as investigating officer.

23.	Mr Kerwin was not instructed until 5 November.  His remit from Mr Tracey was to conduct an investigation into “what was going on”.  He was provided with a copy of Mr McDonald’s memo of 26 October, a copy of the Claimant’s document received on 23 October and a copy of Mr Bellwood’s resignation.  He restricted his investigation to two issues:
(a)	Had the Claimant deliberately misled Mr Tracey and Mr McDonald with regard to the resignation and difficulty of replacement of the Yorkshire operators?
(b)	Had the Claimant told the Yorkshire employees that the Yorkshire operations would be closed?

24.	He did not investigate the other allegations in Mr McDonald’s memo.  He took statements from Mr McKeown, Mr Moffat and Mr Bache, on 7 November.  He opened each interview by stating that the purpose was “to establish the chain of events that led to the employees at Bradford being advised of the closure of the operation by David Boyle.”  The statements were typed up and sent to the employees for approval.  Mr McKeown did not approve his statement.  Mr Kerwin then prepared a different version of Mr McKeown’s statement – one which matched more closely what Mr McDonald (who was interviewed by Mr Kerwin on 11 November) said about his conversation with Mr McKeown - but, surprisingly, Mr Kerwin did not sent it to Mr McKeown for approval.

25.	Mr Kerwin did not take a statement from Mr Bellwood, Mr Bache having told him that he did not have his contact details.  He made no other efforts to ascertain Mr Bellwood’s contact details.

26.	Mr Kerwin did not interview Mr Tracey.  He did not interview the Claimant.

27.	Mr Kerwin decided that the Claimant should attend a disciplinary meeting and wrote to the Claimant by letter of 11 November 2008.  The letter contained two “charges”:

“1. That you deliberately misled Michael Tracey and Graeme McDonald regarding the operations at Bradford.  In particular that you sent then a fax indicating your recommendation to close the Bradford operation.  This was partly based on your suggestion that one of the operators Gerry McKeown had already resigned and would be difficult to replace.  You repeated this in your meeting with Michael Tracey and Graeme McDonald at which you were asked if you could do anything to persuade Gerry McKeown to return and you said you could not.  This is in direct conflict with Gerry McKeown’s evidence that he had no intention of resigning.  You told Gerry McKeown that Bradford would be closing and he would be made redundant.

2. You did not have the authority to indicate to any of the employees that Bradford would be closing (as you did to Gerry McKeown) when no such decision had been taken by the Managing Director.”

28.	Jane Stewart chaired the hearing, which took place on 18 November 2008.  Before the start of the hearing, she noticed that there was no statement from Mr Tracey.  She managed to get hold of him on the telephone and he told her his version was the same as Mr McDonald’s.  She read over Mr McDonald’s statement to him and he said he agreed with it but she did not advise the Claimant about that.  She did not know that Mr McKeown’s statement had not been approved by him and, further, that it was a different version from that which had been sent to him for approval.

29.	The Claimant explained that when he wrote his document, he thought that both men were resigning but that he had corrected that when he met with Mr McDonald and Mr Tracey in the afternoon of 23 October, having learnt from Mr McKeown that morning that that was not the case.  He also explained that he had never said to the men that Bradford would be closing; he had told them that would be his recommendation, not that the matter had been decided.

30.	Jane Stewart adjourned at one point, for a period of thirty five minutes during which she had five telephone conversations, with Mr Kerwin, Mr Bache, Mr McKeown, Mr McDonald and Mr Tracey.  When she spoke to Mr McKeown, he told her that the Claimant had not said that Bradford was closing.  He had only said that if things went his way, the Yorkshire operation would close. She did not tell the Claimant about that phone call.

31.	Jane Stewart reconvened the hearing and told the Claimant that he was to be dismissed.  The minute of the hearing records that she gave as her reason:

“DB had deliberately misled the IMP Board by not correcting the misleading statements made in his fax when questioned re such at the meeting on 23 October with MT and GMcD and that this had led to an irreparable break done in trust and confidence.”

32.	Towards the end of the minute of the disciplinary hearing, in the final sentence of the penultimate paragraph, it was noted:

“JS then asked if DB set out to put MT straight about the situation with GMcE and the fact he had not actually resigned.  DB said no.”

33.	However, on the previous page, the minute noted:

“JS asked if during the meeting with MT and GMcD on 23 October he sought to correct the understanding regarding the position of more than one resignation, DB stated he clearly did so.”

and

“JS asked if DB informed MT and GMcD at their meeting on 23rd October that GMcE had not resigned.  DB said yes, he told the meeting that GMcE was staying.”

34.	At paragraph 35, the Tribunal found that where, in the final sentence of the penultimate paragraph of the minute, it stated “DB said no.” it should read “DB said yes.”

35.	Jane Stewart was influenced in her decision by knowledge that at the time of the purchase of the Respondent from the Claimant and his wife, the Claimant had delayed in disclosing that there was an outstanding complaint before the Traffic Commissioners which, had it not been resolved in the Respondent’s favour, could have resulted in the revocation of the company’s Vehicle Operator Licence.  She did not tell the Claimant that she had that matter in mind.

36.	Jane Stewart wrote to the Claimant confirming his dismissal, reiterating the reason articulated by her as above, stating that she had “decided to prefer the evidence provided to me by Graeme and Michael” (without giving any reasons for doing so) and adding “I also believe that you did not inform Stewart Bellwood’s line manager or the managing director of his resignation, despite you expressing the view that he was key to the operation.  By failing to do so, you failed to report significant matters to line management, which in my view amounted to a further breakdown in trust and confidence.”

37.	The Claimant did not appeal.  He regarded the whole process as a charade and saw no prospect of Mr McDonald and Mr Tracey’s clear wish to be rid of him, being reversed.

Relevant law 
Unfair Dismissal
38.	It was not disputed that the reason for the Claimant’s dismissal was one relating to conduct (Employment Rights Act 1996 s.98(2)) and was, in particular, that he had committed gross misconduct.  The task for the Tribunal was, accordingly, to ascertain whether, in all the circumstances (including the size and administrative resources of the Respondent) the dismissal was fair or unfair.  That required them, following the guidance in British Home Stores Ltd v Burchell [1978] IRLR 379, Iceland Frozen Foods v Jones [1982] IRLR439, and Sainsbury’s Supermarkets v Hitt [2003] IRLR 23, as summarised in the recent case of Orr v Milton Keynes Council [2011] IRLR 317 (per Aikens LJ at paragraph 78), to consider whether or not the Respondent held a genuine belief in the Claimant’s misconduct, whether or not that was a belief held after having carried out a reasonable investigation (bearing in mind that there is a range of reasonable responses open to an employer when it comes to investigation), and whether or not, if the investigation was a reasonable one, it was a reasonable belief to hold.  If satisfied that the employer did hold a genuine and reasonable belief that the Claimant had committed the alleged act of misconduct, arrived at after a reasonable investigation, the Tribunal then (but only then) required to go on and consider whether or not dismissal was within the range of reasonable responses.  The test is always the objective one of the reasonable employer; it is not a matter of the Tribunal’s own subjective views (see: London Ambulance Service NHS Trust v Small [2009] IRLR 563.).  Nor is it a matter of the employer’s own views as to the reasonableness of its disciplinary decisions.  As was observed by Longmore LJ in Bowater v Northwest London Hospitals NHS Trust [2011] IRLR 33:

“..the employer cannot be the final arbiter of its own conduct in dismissing an employee.  It is for the Employment Tribunal to make its judgment always bearing in mind that the test is whether dismissal is within the range of reasonable options open to a reasonable employer.”

39.	Also, when determining whether or not an employee has been unfairly dismissed, contrary to his statutory entitlement (Employment Rights Act 1996 s.94) the Tribunal must avoid substituting its own evaluation of a witness for that of the employer at the time of investigation and dismissal, save in exceptional circumstances.

Wrongful Dismissal
40.	In determining whether or not the Claimant had been wrongfully dismissed, in breach of contract, the Tribunal required to consider whether or not, as a matter of fact, the Claimant had committed an act of gross misconduct.  That is, was he in fact in material breach of contract?  As was observed by HHJ Pugsley in London Central Bus Company Ltd v Nana–Addai UKEAT/0204/11/SM:

“8. In a case of wrongful dismissal, it is for the court to decide what happens (sic).  It is for the court to judge the credibility of the witness.  It is about what happened, not the employer’s perception of what happened, that matters.  Moreover, Boston Deep Sea Fishing & Ice Co v Ansell [1888] 39 ChD 339, a dismissal could be justified retrospectively if a breach of contract not known at the time of dismissal was, after the dismissal, found to exist.”

Task for this Tribunal 
41.	We require to bear in mind that it is not appropriate to “go through the reasoning of these tribunals with a toothcomb to see if some error can be found here or there – to see if one can find some little cryptic sentence.” (Hollister v NFU [1979] ICR 542 at 553 per Lord Denning MR) and that:

“The reading of an Employment Tribunal decision must not ….be so fussy that it produces pernickety critiques.  Over analysis of the reasoning process; being hypercritical of the way in which the decision is written; focusing too much on particular passages or turns of phrase to the neglect of the decision read in the round: those are all appellate weaknesses to avoid.” (Fuller v London Borough of Brent [2011] IRLR 414 per Mummery LJ at paragraph 31.)

The Tribunal’s Judgment and Reasons
42.	With commendable clarity, the Tribunal separated the issues of unfair dismissal and wrongful dismissal.  We are satisfied that they were fully aware of the need, when determining the former, to have no regard to the findings they had to make, for the purposes of determining the latter, about what was actually said at the meeting on 23 October.  It is clear that they knew of the trap for the unwary that existed in that regard and we have no concerns that they confused their role.

Findings on Credibility/ Reliability
43.	For reasons which are explained at paragraphs 62 – 66, and, regarding Mr McDonald, at paragraph 71, the Tribunal found the Claimant and his wife to be credible and reliable, Mr McDonald to be unreliable, Mr Kerwin to be unimpressive and vague and Ms Stewart to be generally truthful but mistaken in having asserted that the Claimant was confused about his position at the disciplinary meeting.  In respect of the latter, the Tribunal, evidently referring to their own observations as to the manner in which the Claimant answered questions, stated, at paragraph 63:

“The tribunal also suspects that the claimant on occasion gave the opposite answer to a question to that which was syntactically accurate if the question contained a negative or was posed by way of assertion.” 

and said that they considered that that should have been obvious to Ms Stewart.

Unfair Dismissal
44.	The Tribunal found that the Respondent failed to carry out as much investigation as was reasonable in the circumstances.  They list their reasons for so concluding at paragraph 68:

“….
•	The starting point was the lack of a focused remit to Mr Kerwin as to what he was investigating.
•	The Tribunal considered it inappropriate and prejudicial that the basis for investigation should have been Mr McDonald’s memorandum dated 26 October 2008 (document 58-59).  Ms Stewart described Mr McDonald as being emotionally charged and that the memorandum was an “over the top reaction to what had happened that week”.  She was surprised this memorandum had been the basis of Mr Kerwin’s instructions to investigate the claimant.  The grave charges contained in that document that the claimant had acted against direct instructions of the IMP Board struck no resonance with Ms Stewart who as Finance Director and Company Secretary, attended all meetings of the respondent’s Board.
•	It was inappropriate and prejudicial that the explanation given by Mr Kerwin to each interviewee (except Mr McDonald) for his investigation was “that the purpose of the meeting was to establish the chain of events that led the employees at Bradford being advised of the closure of the operation by David Boyle”.  Such an explanation clearly indicated that Mr Kerwin was looking for supporting evidence of the claimant’s guilt not whether or not the claimant was guilty.
•	To neither interview nor make any serious effort to interview Mr Bellwood was in the Tribunal’s view a grave deficiency in the investigation.
•	To fail to obtain Mr McKeown’s approval to the accuracy of the statement taken from him and to then substitute a different version of Mr Keown’s statement from the one sent to him for approval, was inappropriate and prejudicial particularly as it involved the addition of critical words viz. “that I was going to be made redundant”.
•	The failure to obtain a statement from Mr Tracey was indicative of an inadequate investigation.  It appeared that his confirmation to Mr Kerwin that he agreed with Mr McDonald’s statement was a reference to the memorandum (document 58-59) rather than the statement (document 63-64).
•	The conflict between the claimant’s memorandum (document 53-54) in relation to Mr Moffat, namely that he should be offered a driving job in Glasgow or dismissed by reason of redundancy should he not wish to accept that and the account given by Mr McDonald of what Mr Tracey said at the suspension meeting, namely that the claimant had implied at the previous meeting that Mr Moffat had also resigned, merited careful investigation.
•	Mr Kerwin should have carried out an investigation with Mr McDonald into, for example, what had occurred at the meeting on 23 October 2008, the reasons for the meeting and the significance of any perceived inaccuracies perpetrated by the claimant.  The inconsistency referred to in the preceding bullet point should have been explored with Mr McDonald.
•	The Tribunal believes that this was a case where the claimant should have been interviewed as a part of the investigatory process.  The Tribunal believed that this failure was indicative of Mr Kerwin’s investigation being focused on establishing the claimant’s guilt.  
•	The Tribunal did not believe the foregoing deficiencies were made good by Ms Stewart’s investigations conducted by telephone in the 35 minute adjournment of the disciplinary hearing.  Ms Stewart made five telephone calls as set out in document 73-74 and also formulated her conclusions during that adjournment.  
•	The Tribunal regarded Ms Stewart’s record of her conversation with Mr Kerwin instructive.  That the witnesses appeared to have been led to a conclusion was not simply a point raised by the claimant, it was patent from the terms of Mr Kerwin’s statements.  Ms Stewart’s apparent acceptance of Mr Kerwin’s confirmation that he had not so led them, was not in the Tribunal’s view a conclusion which a reasonable disciplining officer could have reached, nor was her apparent acceptance of Mr Kerwin’s explanation for not interviewing Mr Tracey and Mr Bellwood.  
•	The Tribunal noted that in Ms Stewart’s conversation with Mr Bache that Ms Stewart, having regard to Mr Bache’s alleged operational responsibilities, did not follow up Mr Bache’s assertion that he had no contact details for Mr Bellwood (an employee whose duties included being on call) nor did she ask him what steps he had taken with regard to the Muller “not being fit for purpose” having been copied in on the email by Mr Moffat to Mr McCamley dated 16 October 2008 (document 50).
•	The Tribunal noted that having spoken to Mr McKeown who supported the claimant’s version of events, Ms Stewart did not revert to Mr Kerwin to explore the conflict between the statement taken by him and her telephone conversation with Mr McKeown.  The Tribunal acknowledges that Ms Stewart did not uphold this aspect of the charges, (she could hardly have done otherwise having regard to the absence of any evidence pointing to the claimant’s guilt) but considered such further inquiries with Mr Kerwin as something a reasonable employer should have done in order to inform her assessment of credibility on the other charges.  
•	The conversations with Mr McDonald and Mr Tracey which appear to have been shorter than those with the other three witnesses were once again seeking confirmation rather than getting a proper account of what took place at the meetings on 23 and 27 October 2008.  It was patent that the alleged representations about Mr McKeown’s resignation was a point of detail in a much bigger picture so far as Mr McDonald in particular was concerned.  Ms Stewart could not have doubted that the claimant was acutely concerned about the respondent’s profitability during the earn out period or the inherent improbability that the claimant would set out to damage the respondent’s profitability during that period.  There was clearly a conflict between Mr McDonald’s strategy for the future and the claimant’s.  Ms Stewart made no effort to explore that wider context with Mr McDonald and in particular where Mr McDonald’s assertions did not sit with her own knowledge e.g. disobedience by the claimant of board instructions.  She did not explore or investigate the internal conflict exposed in Mr McDonald’s statement (document 63-64) as to whether the claimant had represented that Mr Moffat had also resigned.  She made no investigation into the discrepancy between the grounds for suspension and the grounds for disciplinary action.”

45.	They also found that Ms Stewart did not have in mind reasonable grounds on which to sustain her belief in the Claimant’s guilt. They list their reasons for so concluding at paragraph 69:

“……
•	In the Tribunal’s view the inadequacy of the investigation was patent.  By inadequacy the Tribunal means having fallen well outside the band of a reasonable investigation which a reasonable employer of the resources available to this employer should have carried out.  Reasonable grounds were accordingly lacking.
•	The Tribunal did not regard the late notification of the vehicle operator’s licence issue in the course of negotiations between the respondent’s previous shareholders (i.e. the claimant and his wife) and the Tracey Group as a justifiable basis to doubt the claimant’s truthfulness.  
•	In her assessment of where the truth lay, Mrs Stewart seemed content to ignore certain matters within her knowledge, for example:
(a)	that Mr McDonald’s description of the claimant’s role as Operations Director as unchanged in his email to the claimant dated 14 August 2008 (document 46) was at best less than candid.
(b)	that assertions by Mr McDonald in his memorandum dated 26 October 2008 (document 58-59) did not square with her understanding as a participant in the respondent’s Board meetings.  It was also clear from her evidence that Ms Stewart did not regard that document as a reliable exposition of the facts.
(c)	that the statement by Mr McDonald (document 63-64) contained inherent inconsistencies as to how many and which operators the claimant had said had resigned.
(d)	that her acceptance of Mr McKeown and the claimant’s evidence about what the claimant had said with regard to the potential closure of Bradford, which conflicted with Mr McDonald’s statement, might raise issues of reliability on the other matters canvassed in that statement.  
(e)	that the documented explanation by the claimant for bringing the Muller to Glasgow (i.e. for repair) cast doubt on Mr McDonald’s conviction that the bringing of the Muller to Glasgow was part of an unauthorised programme of closure by the claimant of the Bradford operation.
•	In addition Ms Stewart failed to advise or give the claimant the opportunity to comment on the information gathered by her during the adjournment.”

46.	At paragraph 70, they conclude that, in those circumstances, it was not open to Ms Stewart to find the Claimant guilty of gross misconduct.

Breach of Contract
47.	The Tribunal having accepted the Claimant’s evidence that he did, at the meeting with Mr Tracey and Mr McDonald, correct his earlier statement that Mr McKeown was resigning and that he did not tell the men that the Bradford operation was definitely closing, they found, at paragraph 71, that he had not breached his contract with the Respondent.  They observed that Mr Tracey did not give evidence, that Mr McDonald was not a reliable witness and that he did not, in any event, actually give evidence about what had happened at the meeting.  All he had done was confirm that a particular document was a statement prepared by him.

Grounds of appeal/ discussion
48.	The Notice of Appeal is lengthy (16 pages) and discursive in nature.  There is overlap between some of the grounds of appeal.  The notice was amended (on an unopposed motion) at the start of the appeal hearing so as to add another ground of appeal (ground 12A).  Not all of the grounds of appeal were spoken to in argument.  We find it convenient to deal with each ground of appeal that was addressed (in the order in which Mr Walker made his submissions), the response and our discussion, sequentially.

1. General Submission – delay
49.	Mr Walker referred to the lapse of time between the issuing of the judgment and the issuing of the written reasons.  He also referred to various small errors such as that Michael Tracey was referred to as “William” Tracey and some errors regarding dates of meetings and documents.  The judgment was, he submitted, less than accurate in respect of these details.  His point appeared to be that that must have been due to the passage of time and was indicative of that passage of time having had a detrimental effect on the overall quality of the judgment.

50.	We do not accept that there is any merit in this submission.  Quite apart from anything else, it ignores the fact that the Tribunal had evidently been able to reach a decision in respect of all parts of the Claimant’s claim by 29 September 2009, the date that the judgment was signed.  We cannot see that there is any basis for drawing an inference of deficiency in the reasoning that lay behind it from the fact that the written reasons were not issued until four months later (a period which included the Christmas and New Year break), which is all that  the submission amounted to.

2. Breach of Contract:
(a) The Tribunal erred in holding that the Claimant and his wife were credible and reliable
51.	Mr Walker referred to evidence before the Tribunal about a letter sent by the Claimant’s solicitor to Mr Tracey, dated 20 November 2008, on the instructions of the Claimant.  Both he and his wife had confirmed its accuracy, in their evidence.  It referred to “the material resignation” as being that of Mr Bellwood.  The Claimant’s wife had been cross examined about the meaning of the expression “material resignation” and she had said that it was a reference to the “only” resignation.  The Tribunal had not dealt with this passage of evidence.  The essence of Mr Walker’s submission was that the terms of the letter were indicative of the Claimant having said that there was more than one resignation, that supported the Respondent’s account of events, that pointed to the Claimant and his wife not being credible witnesses and the Tribunal was obliged to make findings about the matter.  Mr Walker also submitted, under reference to evidence given by the Claimant and his wife about their attendance at meetings with the solicitor, that their evidence conflicted on the matter of whether Mrs Boyle attended or not.  That too had the potential to undermine their credibility and reliability and the Tribunal had erred by not making findings about it.

52.	Mr Napier submitted that the evidence relied on did not support the proposition that it pointed to the Claimant or his wife lacking in credibility or reliability.

53.	We agree.  Mrs Boyle’s evidence, namely that as far as she was concerned the solicitor’s letter referred to the Claimant speaking of there being only one resignation does not conflict with his or her position on the matter.  As to the evidence about attendance at meetings with the solicitor there was more than one meeting, as Mr Walker appeared ultimately to accept, and there was no evident contradiction as between their accounts about that.  Moreover, findings on credibility and reliability lie within the province of the Tribunal of first instance.  Rarely will it be open to this Tribunal to interfere with them – it will usually only be in cases of perversity that it would be appropriate to do so.  Here, even on the basis that Mrs Boyle’s evidence on these collateral matters was open to question, we could not have concluded that the Tribunal’s overall conclusion that both she and the Claimant were credible and reliable was thereby demonstrated to have been perverse.

(b) The Tribunal erred in finding that Mr McDonald was not a reliable witness
54.	Mr Walker referred to paragraph 65 of the Tribunal’s reasons and, in particular their reliance on what they referred to as contemporaneous emails.  He submitted that there were no such emails.  Also, the conversation on 27 October with Mr McDonald that was spoken to by the Claimant’s wife only emerged when she gave evidence before the Tribunal.  He also referred to his submissions regarding the credibility of Mrs Boyle.  Mr Napier submitted that it was plainly open to the Tribunal to take the view that Mrs Boyle’s email of 3 November did support her account of the conversation on 27 October, given the reference to a “settlement” being offered to the Claimant and nothing was to be taken from her not having referred to the conversation earlier.

55.	We agree.  The reference to the position being that Mr Tracey would be offering a settlement to the Claimant was plainly supportive of Mr McDonald having made it clear to Mrs Boyle that her husband would not be back at work, the intention being to “buy him off” and we cannot see that anything turns on the conversation not having been referred to prior to Mrs Boyle giving evidence about it.

(c) The Tribunal erred in failing to make material findings regarding the Respondent’s note of the disciplinary hearing
56.	Mr Walker focused on the final sentence of the penultimate paragraph on the last page of the minute and seemed to be submitting that notwithstanding the two paragraphs on the previous page which were plainly to the effect that the Claimant stated he had told Mr Tracey and Mr McDonald that Mr McKeown was not resigning, it was not open to the Tribunal to find that “No” should, on the last page, have read “Yes”.  Mr Napier submitted that the apparent conflict in the entries in the notes gave rise to no concern.  It was obvious that the last entry was in error.  The two earlier entries would not, otherwise, have made sense.

57.	We agree.  There was nothing in this point.  Nor was there anything else in the evidence before the Tribunal that suggested the Claimant had made what would have been a damning admission at the disciplinary hearing.

(d) The Tribunal erred in failing to take account of the totality of the evidence relating to the breach of contract claim
58.	Mr Walker referred to evidence given at the tribunal hearing by Mr McKeown; he had stated that he did not tell Mr Bellwood or the claimant that he had resigned.  Separately, the claimant had accepted in evidence that Jane Stewart could have had “a trust issue” with him, given his late disclosure of the Traffic Commissioners matter.  The tribunal ought, he submitted, to have made findings about these matters.  He did not, however, indicate what difference, in his submission, it would or ought to have made had they done so.  Mr Napier did not make specific submissions in relation to this ground of appeal but he had a general submission that there was no substance in the attack on the tribunal’s finding that the claimant was not in breach of contract.

59.	We do not consider that the tribunal was bound to make any findings in relation to these matters.  Regarding Mr McKeown’s evidence about what he told Mr Bellwood, it was not demonstrative of what Mr Bellwood had told the claimant.  So far as it related to what Mr McKeown had told the claimant, the tribunal made findings about that and they did not need specifically to relate those findings to his evidence.  Regarding the Traffic Commissioners matter the point was not whether or not Jane Stewart would have been entitled to have a “trust issue” with the claimant.  The tribunal’s concern was that she allowed it to influence her thinking in circumstances where they evidently considered it was not relevant.

60.	We are, in these circumstances, satisfied that there is no merit in the Respondent’s appeal against the finding that the Claimant was not breach of contract and was, accordingly, wrongfully dismissed.

3. Unfair Dismissal
(a) The Tribunal erred by substituting its own decision for that of the Respondent
61.	Mr Walker referred to the Tribunal having found that Mr McKeown was “second man” to Mr Bellwood; there was, he said, no evidence about that.  He referred to their having rejected Ms Stewart’s position that the Claimant was confused at the disciplinary hearing and submitted that that showed they were substituting their own view for that of the Respondent.  He referred to the evidence regarding the Claimant’s business proposals document, particularly that it was typed up on 22 October but no fax bearing that date was produced at the Tribunal, he referred to certain emails having been before the Tribunal but not before the disciplinary hearing, he referred again to Mrs Boyle’s email of 3 November as not having, in his view, supported her account of the conversation with Mr McDonald on 27 October, and he referred to the Tribunal having taken into account the administrative resources of the Tracey Group rather than confining their considerations to the resources of the Respondent; he believed it to be wrong to suggest that they could look beyond their own resources to the wider resources of the group.  He said that he did not consider it critical that Ms Stewart/Mr Kerwin did not contact Mr Bellwood.  He did not consider that Mr Kerwin required to interview the Claimant.  He considered that Ms Stewart was entitled to deal with matters as she did and the Tribunal’s findings about her reaction when she first received Mr McDonald’s memo simply showed that she was fair; he did not appear to appreciate that the Tribunal’s concern was that when it came to considering her decision on the sharp issue of credibility that she had to determine, she had no regard to her own, significant, earlier reaction.  He referred to his earlier submissions regarding the Tribunal’s rejection of Mr McDonald’s evidence and submitted that if we were persuaded about that then it would assist in showing that the Tribunal had substituted their own view for that of the reasonable employer.  He also referred to the Tribunal having considered that Ms Stewart ought not to have taken the late disclosure of the Traffic Commissioners’ matter into account.

62.	Mr Napier submitted that the proposition that the Tribunal had substituted its own view was ill founded.  They had not erred in the applicable law.  They had taken account of the relevant facts.  It could not be said that they had reached a view that no reasonable tribunal could have reached.  They had a tenable basis for rejecting Mr McDonald’s evidence.

63.	We do not consider that there is any merit in the submission that the Tribunal substituted its own view for that of the reasonable employer.  This is not a case where they have referred to the “reasonable employer” by way of mantra; on the contrary, it is clear from their reasons that they have been very careful to be maintain the objectivity that the “reasonable employer” test requires.  None of the small details referred to by Mr Walker demonstrate otherwise. In particular, he was, we consider, not correct in his submission that they were not entitled to regard the whole administrative resources of the Tracey group as being available to the Respondent (the Tribunal made a finding in fact that that was the case), not correct in his submission regarding the failure to interview the Claimant – it was plainly open to them to find that a reasonable employer would, in such circumstances of a sharp conflict of accounts as to what was said, have done so and his submission regarding Ms Stewart’s initial reaction to Mr McDonald’s memo missed the point.  As for Mr McDonald’s reliability, as above noted, we consider the Tribunal were entitled, in the circumstances, to reject his evidence.  Regarding the Traffic Commissioners matter, there is no indication of the Tribunal’s view being other than their assessment of how a reasonable employer would have conducted itself.

64.	We note that the circumstances included that the matter did not have obvious relevance to the issue for the employer and, further, that Ms Stewart had not told the Claimant that she was taking it into account; an Employment Tribunal was plainly entitled to conclude that a reasonable employer would not have allowed the matter to carry weight in the decision making process.

(b) The Tribunal erred in finding that Ms Stewart did not have reasonable grounds for her belief in the Claimant’s guilt because (i) they used the wrong test regarding the availability of administrative resources (ii) erred in holding that Ms Stewart “seemed content to ignore certain matters within her knowledge” (paragraph 69) (iii)  failed to specify what the Claimant could have given clarification of  or comment on in their criticism of the failure to give the Claimant an opportunity to comment on the information gathered by Ms Stewart during the adjournment of the disciplinary hearing, and (iv) erred in failing to find what was the reason for dismissal and in then criticising Ms Stewart for adding a reason which had not formed part of the ‘charge’ against the Claimant  when it came to her dismissal
65.	Mr Walker repeated his submissions regarding the relevance of the Tracey Group’s administrative resources.  The basis on which he submitted that the Tribunal were not entitled to find that Ms Stewart seemed content to ignore the matters listed by them at paragraph 69 was not entirely clear.  Regarding (iii) he stated that the only finding made by the Tribunal related to Mr McKeown having confirmed that the Claimant did not say that Bradford was going to be closed; he did not appear to appreciate that what the Tribunal were pointing out was that Mr McKeown had told Ms Stewart something which plainly supported the Claimant’s account of matters yet she did not make him aware of that.  Regarding the additional matter which appeared as a reason for dismissal in Ms Stewart’s letter, he submitted that it did not matter since it was not the principal reason and the Claimant had had notice of the “charge” to which the principal reason related.

66.	Mr Napier made some general observations to the effect that Ms Stewart had the task of making a career critical decision so far as the Claimant was concerned.  He would be wholly deprived of the opportunity to receive the additional payment of £600,000; the circumstances were comparable to those in A v B [2003] IRLR 405.  The Tribunal required to look at what was done and not done in the course of investigation.  They were entitled to take the view that they that there was a series of significant failures in the investigative process.  They focused on important matters in so doing.

67.	We are satisfied that there is no merit in this ground of appeal either.  There were significant failings in the investigative process, as discussed by the Tribunal at paragraph 68.  These were, as Mr Napier submitted, important matters and it was plainly open to the Tribunal to conclude that, when considered together, they could only conclude that the investigation fell well outside the band of the reasonable investigation which an employer with the resources of the Tracey group available to it, would have carried out.  Had Ms Stewart stood back and looked at the whole investigation, it ought to have been clear to her that the deficiencies, as identified by the Tribunal, were such that she could not reasonably rely on it.  The Tribunal did not rely on the “career impact” factor to which Mr Napier referred but we accept that, in the particular circumstances of this case, a reasonable investigative process would have had regard to the potentially devastating wider implications of dismissing the Claimant, namely that he would lose all prospect of receiving an additional £600,000.

(c) The Tribunal’s finding that it was not within the band of reasonable responses for Ms Stewart to conclude that the Claimant was guilty of gross misconduct was perverse in respect that they failed to make any findings as to the principal reason for dismissal and whether it fell within that band
68.	Mr Walker submitted that the Tribunal had not actually found what was the reason for the Respondent’s dismissal of the Claimant.  They required to do so.  If it was that the Claimant had deliberately misled the Respondent, they then required to consider whether dismissal was within the band of reasonable responses.  Mr Napier submitted that there was nothing in this ground.  It was plain that the Tribunal had found that the reason for the dismissal was misconduct.  Further, since the Tribunal had found that Ms Stewart did not have reasonable grounds for her belief in the Claimant’s misconduct, there was no requirement for them to go on and consider what would have been their decision had they done so.

69.	We agree with Mr Napier.  Mr Walker’s submission proceeded on a misunderstanding of Burchell and the demands of s.98(4).  A Tribunal does not require to consider whether dismissal was a reasonable sanction if it has found that the employer did not have reasonable grounds for believing that the employee was guilty of misconduct in the first place.  It is self evident – as the Burchell guidance strives to demonstrate - that, in such circumstances, if the employee was dismissed then the dismissal was not fair.

General Observations
70.	Mr Napier submitted that this was a simple case of unfair and wrongful dismissal and that it had been made unnecessarily and hugely complicated by the detail of the appeal.  We agree.  The appeal was, we consider, a classic case of a failure to see the wood for the trees and, further, no more than an attempt to have us perform upon the judgment of the Tribunal the type of microsurgery that was condemned by the Court of Appeal as long ago as 1979 in the case of Hollister, a condemnation to which they have since held fast, as recently as this year, in the case of Fuller.

Disposal
71.	We will record our granting, at the start of the appeal hearing, of the Respondent’s motion to add ground of appeal 12A, but otherwise we will pronounce an order dismissing the appeal.