Mrs K Owens v British Car Auctions Ltd: 2411524/2019
EMPLOYMENT TRIBUNALS
Case No 2411524/2019
Between
Mrs K OwensClaimantBritish Car Auctions LtdRespondent
Before
Employment Judge DunlopIn person for claimantMr A Graham (instructed by Solicitor) for respondentDate 16 January 2020
JUDGMENT
[1]The claimant’s claim of unfair dismissal succeeds.[2]There will be no reduction made to either the basic or compensatory awards due to the ‘Polkey’ principle or under s.123(6) Employment Rights Act 1996 (contributory fault).[3]Compensation due to the claimant will be determined at a remedy hearing on 3 April 2020, if not resolved by agreement before that date.
REASONS
(1) The claimant, Mrs Owens, was employed by the Respondent, whom I will refer to as ‘BCA’, from May 2005 until June 2019, latterly as a Transport Manager. She was dismissed for alleged gross misconduct, namely giving out a ‘key box key’ to an unauthorised person. Her claim is for unfair dismissal only. The Hearing(2) I heard the claim over one day and heard from the following witnesses: For the respondent:
The Hearing
[2.1]Mrs Cheryl Kitson, Claims Manager. Mrs Kitson was the dismissing officer.[2.2]Mr Howard Ryder, Site Manager (Preston). Mr Ryder was the appeal officer. For the claimant:[2.3]Mrs Owens[2.4]Mr Alan Bigwood, a former employee of BCA (3) There had been some difficulty in preparing the case. Mrs Owens has indicated that she did not receive the standard directions sent out on 30 September 2009 and that she had understood ACAS would prepare and present the claim on her behalf. By the morning of the hearing, however, both parties indicated they were ready and willing to go ahead. I received and had regard to a bundle of document (prepared by BCA but agreed by Mrs Owens), a list of issues and cast list prepared by BCA and statements from BCA’s witnesses. Mrs Owens had provided statements in the form of unsigned emails, which had been numbered by the respondent’s representative for ease of reference. In giving their evidence, both Mrs Owens and Mr Bigwood confirmed that the content of those emails was true to the best of their knowledge and belief, and that they wished the content to be taken as their evidence on oath. The Issues (4) BCA’s list of issues summarised the matters to be considered in an unfair dismissal claim of this nature. Essentially: was there a potentially fair reason for the dismissal and, if so, did the respondent act reasonably or unreasonably in treating that as a sufficient reason for dismissal in the circumstances, having regard to the test in Burchell v British Home Stores 1980 ICR 303 and the band of reasonable responses test. (5) BCA also contended that, if the dismissal was unfair, compensation should be reduced to reflect the possibility that a fair dismissal could have taken place in any event (Polkey v A E Dayton Services Ltd 1988 AC 344) and/or to reflect the fact that Mrs Owens’ conduct had contributed to the dismissal. Findings of Fact (6) This section sets out the relevant facts as I have found them. (7) BCA is a car auction business. This case concerns its Manchester Belle Vue site, which comprises business offices and also a plot where large numbers of vehicles are stored in the course of BCA’s business. This is to be distinguished from a car park in the usual sense – vehicles are packed close together and when a particular vehicle is to be removed from the site, this may require several other vehicles to be accessed and moved in order to get to the vehicle in question or, in the terminology of the business, to ‘pull’ it. (8) In the first half of 2018 a new system was introduced across the business whereby the vehicle keys were kept in locked boxes attached to the vehicles. A single ‘key box key’ could open every locked box and therefore provide access to all the vehicles. For the purposes of the business and its insurers, the security of the key box keys was of vital importance. They keys were numbered and signed out and in by those who held them. The loss of a key would be considered a critical incident and would be one of very few incidents which would necessitate a site manager contacting the general managers of the business. Ultimately, replacing all the key boxes as a result of a lost key box key would cost in the region of £80,000. I heard from witnesses on both sides that two senior managers had been disciplined over an incident around the loss of a key, although I was not given specific details. (9) Mrs Owens worked in the Transport Office, which was a small office leading off the ground floor of the main office building, with an external door to access the vehicle storage area. Also based in that office were Duncan Baker (Administration Manager) and Suzanne Faulkner (Transport Manager) who were more senior to Mrs Owens, and Charlotte Watling, who was either the same level as Mrs Owens or more junior. At the time of the events in question, Ms Watling was on a long-term absence due to sickness and would later leave the business. I was not told when that absence commenced. There were four key box keys located in the transport office which would be used by these employees. There were additional workers on site who had key box keys and would ‘pull’ cars as part of their roles within the BCA operation. (10) Cars would be collected by customers who had documentation from the auction to indicate the car they were entitled to collect. Some of these would be individuals unknown to the staff on site. However, cars were often collected by ‘third-party hauliers’. These individuals were employed by other firms, but were engaged in work (i.e. the collection and delivery of cars) sub-contracted to those firms by BCA. Some of the people doing that work might be attending the site on a daily basis, and were well-known to Mrs Owens and her colleagues. (11) On 22 March 2018 the claimant and others in Manchester attended training on the new key box system. I have been shown a standard operating procedures document (‘SOP’) which formed the basis of that training (74-77). It seems to be implicit, rather than explicit, in the standard operating procedures that a member of staff who has signed out a key box key should not pass that key on to another individual. The most relevant part of SOP is in the ‘Q&A’ section, which contains the following: Q10. Will customers be issued with master keys so they can get their own keys? A10. No – under NO circumstances should a customer be provided with a Master key. A member of Centre staff will need to open the key box for them. If you see any non staff member with a Master key, this MUST be reported to the Centre or Yard Manager immediately. (12) The Respondent also had a Disciplinary Policy and a Code of Conduct, the latter containing disciplinary rules. Both the ‘General Company Standards’ and the ‘Acts of Gross Misconduct’ listed in the Code contain items which are specifically relevant to this business e.g. a requirement to “Comply with speed limits take special care when driving on Company premises. Follow speed limits and rules regarding driving standards, trade plates and road worth vehicles” and “Lending a Company or customer vehicle to any person outside the business” being listed as an act of gross misconduct. There is, however, no specific reference in the Code of Conduct to the uses of key boxes and key box keys. The claimant signed a document to confirm she had received training on the key box SOP which stated “I acknowledge that any non-compliance of the Key Box Process may result in disciplinary action.” (13) On 11 June 2019 an incident had come to light which had taken place on 4 June 2019 in which an individual called Jonny Roberts had driven an incorrect vehicle off site. The vehicle had been ‘pulled’ by Jane Judson. Ms Judson was a third-party haulier working for Harry Roberts Transport (as did Jonny Roberts). She was someone who had previously been employed by BCA and was known to the claimant and others working in the transport office. It transpired that Ms Judson had been able to take the wrong car because she had been given a master key to ‘pull’ the vehicle herself. There is no suggestion that this was anything other than a genuine error, and no loss was ultimately sustained, although it was considered a serious matter. The error should have been identified by security procedures at the site exit, but that did not happen. (14) The matter was discovered by Lisa Grimsley, Regional Operations Director. When she went to enquire about it at the transport office both Mrs Owens and Mr Judson were there. It transpired that Mrs Owens had given Ms Judson a key box key that day (i.e. the 11th), although the account of the conversation later given by Ms Grimsley to Ms Kitson is not accepted by Mrs Owens. In any event, an investigation was launched into the events of the previous week which had led to the wrong car being allowed to leave the site. (15) The investigation was carried out by Duncan Baker, one of the managers in the Transport Office. His first interview was with Danny Entwistle, the general manager, who was asked if he had ever authorised Mrs Owens or Suzanne Faulkner to give out key box keys to hauliers. Mr Entwistle denied doing so. He said that he had once been asked by Mrs Owens if she could give a key to a haulier doing an early morning collection and told her she could not and that Mrs Owens had then mentioned John Williams (Operations Manager) having authorised keys to be given to third-party hauliers. Mr Entwistle said he had mentioned this to Mr Williams, who denied having done so. (16) Mr Baker then interviewed Suzanne Faulkner who denied ever giving keys to hauliers and answered some background questions on the practice within the transport office. She stated that she was aware that Mrs Owens had previously handed keys to hauliers but believed the practice had stopped. (17) Mr Baker next interviewed Mr Williams who denied ever authorising the practice. (18) Finally, Mr Baker interviewed Mrs Owens who admitted giving Ms Judson a key in the past, but could not recall whether or not she had done so on 4 June. She stated that she now realised this should not be done and would not do so in the future. She stated that she had only given keys to “approved hauliers” and explained that this meant a regular haulier (i.e. one known to the BCA staff) and that the practice of doing so had been approved by John Williams. She contradicted Suzanne Faulkner’s evidence, saying that Suzanne had never told her not to do this, and that Suzanne herself hands keys out on the same basis. In relation to the conversation with Danny Entwistle, she said this related to a driver staying on-site overnight and Danny confirmed she should not give out a key overnight, and she then complied with that. (19) If it wasn’t clear previously, the content of these interviews make it clear that there is a dispute as to what the practice was relating to handing out key box keys within the transport department. That is something on which Mr Baker might be expected to be a relevant witness, but he does not put forward his own evidence, nor step back as an investigator. There are other people who clearly might have relevant evidence to establish what the practice actually was. In particular, Ms Judson herself, Ms Watling (the other member of staff in the Transport Office) and other ‘third-party hauliers’ who were regularly attending the site. Mr Baker did not take the obvious step of interviewing any of those people. (20) Mr Baker did prepare an investigation report which recommended a disciplinary hearing be convened to consider the allegation that Mrs Owens had passed a key box key to Ms Judson on 4th June as a result of which Mr Roberts took an incorrect vehicle off the site. (21) A disciplinary hearing, conducted by Ms Kitson, was arranged for 17 June 2019 and an invitation letter setting out the allegation was sent on 13 June 2019. In the interim, Mr Baker reviewed the CCTV footage again and believed he had established that Ms Judson obtained the key from the transport office. On that basis he wanted to establish whether Ms Watling ever gave out key box keys. However, rather than interview her, he re-interviewed Suzanne Faulkner, who said that Ms Watling did not give out keys. (22) In advance of the disciplinary hearing Mrs Owens provided three statements in the form of emails. They were as follows: Alan Bigwood, an exemployee who had left the previous October, but had previously been a transport manager at Manchester. He said that John Williams had informed staff that keys could be issued to known hauliers when there was a shortage of staff. Secondly, from John Manning who was a third-party haulier. His email stated that he was present when Mr Williams had given permission for trusted drivers to be issued with master keys, and that he had been given the key on occasion by all members of the transport office at the Manchester site. Finally, there was an email from Charlotte Watling. She stated that both Kelly [Owens] and Suzanne [Faulkner] would give keys to well-known drivers. (23) During the hearing Mrs Owens repeated her position from the investigation; that she believed it was permitted to lend key box keys to approved hauliers due to the conversation with John Williams, that it was accepted practice within the transport department, that she now understood it was wrong and wouldn’t do it again if permitted to keep her job. She relied on the new statements in support of her position. Ms Kitson adjourned the meeting because she considered she needed to conduct further investigation. (24) Ms Kitson did conduct further investigation by obtaining the SOP (which had not been included in the investigation pack) and interviewing Lisa Grimsley, Danny Entwistle, Duncan Baker, Suzanne Faulkner and John Williams. Duncan Baker was not asked about practice in the transport office, he was asked about the CCTV review. Much of the questioning was focused on the events of 11th June which had given rise to the investigation. To the extent that Ms Kitson asked about practice in the transport office, her choice of interviewees meant that she was more likely to find out what the practice should have been, rather than what was happening ‘on the ground’. She did not attempt to interview any of the people Mrs Owens had obtained emails from, nor did she interview Jane Judson or other third-party hauliers. (25) In evidence, Ms Kitson seemed to suggest at some points that she had disregarded the statements provided by the claimant and at some points to suggest that she had ‘weighed them in the balance’ but preferred the evidence generated by investigation. She said she had been advised by HR that she should not interview ex-employees (such as Mr Bigwood) because they may be ‘disgruntled’, should not interview third-party contractors because they were not employees, and should not interview Ms Watling, because she was on long term sickness absence. (26) The hearing was reconvened on 25 June 2019. In this hearing Mrs Owens was adamant that her line manager, Ms Faulkner, was lying, that she also gave out keys, and that drivers (i.e. third party hauliers) would back that up. Mrs Owens also expressed the view (repeated in her evidence at the tribunal) that Jane Judson and other third-party hauliers were ‘staff’ who worked for BCA. In terms of the niceties of employment law, it is evident that they were not employed by BCA. However, I find that Mrs Owens was genuine in her belief that they were working for BCA and therefore were not ‘customers’ in the way that a private individual collecting a car on a one-off basis would clearly be a customer as referred to in the Q&A part of the SOPs. (27) At the end of the hearing Mrs Owens was summarily dismissed. The dismissal was confirmed by letter dated 26th June 2019. The reasons given at the meeting, and in the letter of dismissal, are focused on the reasons for believing that Mrs Owens had been the one to hand out the key on 4 June (which, of course, she had never admitted). They do not in any material way address Mrs Owens’ argument that it was an accepted practice. The outcome letter merely states that the evidence presented by Mrs Owens would be highlighted to HR and a Regional Operations Director. (28) Mrs Owens appealed her dismissal and produced two more emails in support, one from Allan Harvey, who was a BCA employed rental driver who said he had been given key box keys by Ms Faulkner when she previously worked at Preston, and believed this also happened at Manchester. Although there is a distinction between Mr Harvey’s status and that of the third-party hauliers, it was BCA’s position that keys should not have been given out by transport office staff at all, so this, again, was suggestive that the rules being applied in practice were somewhat more flexible than Mr Williams and Ms Faulkner had told the investigation. The second statement was from Ryan Lewis, who explained that he was a former employee who worked under Alan Bigwood and Suzanne Faulkner, and confirmed that claimant’s account that she (and he) had been authorized to give key box keys to ‘regular drivers’ by John Williams after the key box training. (29) The appeal was heard by Mr Ryder who is the site manager a Preston. The appeal was not upheld, confirmed in a letter dated 18 July 2019. (30) Mr Ryder stated in the outcome letter that he ‘accepted’ the evidence provided by Mrs Owens but that ‘since the training, BCA Manchester has had a new Transport Manager, Suzanne Faulkner and a new General Manager, Danny Entwistle. Both of who stated that they have told you not to give the Master Key to third party hauliers (customers).’ In his witness statement, Mr Ryder said that he had been “unable to investigate the statements [provided by Mrs Owens] as they were from people who were not employed by BCA or who were on long term sick.” He relied on the fact that any previous practice of giving out keys should have been superseded by the conversation Mrs Owens had with Mr Entwistle, but he either did not appreciate, or did not engage with, her argument that this conversation related to the specific case of giving a key out overnight. Relevant Legal Principles (31) BCA bears the burden of proving, on the balance of probabilities, that the claimant was dismissed for misconduct; see s. 98(1) Employment Rights Aact 1996 (‘ERA’). If BCA fails to persuade the tribunal that it dismissed her for that reason, the dismissal will be unfair. If BCA does persuade the tribunal that it did dismiss the claimant for that reason, the dismissal is only potentially fair. Consideration must then be given to the general reasonableness of that dismissal under s 98 (4) ERA. (32) Section 98 (4) ERA provides that the determination of the question of whether a dismissal is fair or unfair depends upon whether in the circumstances (including the respondent’s size and administrative resources) the respondent acted reasonably or unreasonably in treating misconduct as a sufficient reason for dismissing him. This should be determined in accordance with equity and the substantial merits of the case. (33) In considering the question of reasonableness, the I have had regard to the decisions in British Home Stores v. Burchell [1980] ICR 303; Iceland Frozen Foods Limited v. Jones [1993] ICR 17; Foley v. Post Office and Midland Bank plc v. Madden [2000] IRLR 82. (34) In summary, these decisions require that the Tribunal focuses on whether the respondent held an honest belief that the claimant had carried out the acts of misconduct alleged and whether it had a reasonable basis for that belief. The Tribunal should not however put itself in the position of the respondent and decide the fairness of the dismissal on the what the tribunal itself would have done. It is not for the Tribunal to weigh up the evidence and substitute its own conclusion as if the tribunal was conducting the process afresh. The function of the Tribunal is to determine whether, in the circumstances, the respondent’s decision to dismiss the claimant fell within the band of reasonable responses. (35) In conduct cases, when considering the question of reasonableness, the Tribunal is required to have regard to the test outlined in the ‘Burchell’ test. The three elements of the test are: (1) Did the employer have a genuine belief that the employee was guilty of misconduct?(2) Did the employer have reasonable grounds for that belief?(3) Did the employer carry out a reasonable investigation in all the circumstances? (36) It was confirmed in Sainsbury’s Supermarket v Hitt 2003 ICR 111 that the ‘band of reasonable responses’ test applies equally to the employer’s conduct of an investigation as it does to the employer’s decision on sanction. Whilst an employer’s investigation need not be as full or complete as, for example, a police investigation into criminal conduct should be, it must nonetheless be even-handed, and should focus just as much on evidence which exculpates the employee as on that which tends to suggest she is guilty of the misconduct in question. (37) Section 123(6) ERA provides that: Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding. (38) This requires a finding of a causative relationship between the conduct and the dismissal, although the use of the word “contributed” makes plain that the employee’s conduct need only be a factor in the dismissal; it need not be the direct and sole cause. The focus required by section 123(6) must be on what the employee did: the employer’s decision and conduct is relevant to the Tribunal’s assessment of fairness, but the issue of contributory fault requires an assessment by the Tribunal of the employee’s conduct. Moreover, the question of causation or contribution relates to the dismissal, not the unfairness of the dismissal. (39) Under the principle in Polkey v A E Dayton Services Ltd 1988 AC 344 the Tribunal may reduce the amount of compensation payable to the claimant if it is established that a fair dismissal could have taken place in any event – either in the absence of any procedural faults identified or, looking at the broader circumstances, on some other related or unrelated basis. Submissions (40) Both parties made oral submissions. Mrs Owens emphasised that she felt she had done nothing wrong as Mr Williams had sanctioned her practice of handing out keys. The respondent’s investigation was flawed due to the failure to further investigate and/or pay proper regard to the evidence she had obtained in support of her case. A reasonable investigation would have found in her favour. (41) For BCA, Mr Graham recited the legal tests, in line with what is set out above. He submitted that there was a genuine belief that misconduct had occurred and pointed to the steps that were taken to investigate, submitting that these were more than sufficient to amount to a reasonable investigation. He submitted that BCA was entitled to ‘have regard’ to the statements submitted by the claimant, but still prefer the evidence obtained in the course of its investigation. He emphasised how critical key security was to the respondent’s business, and, in that context, submitted that this was clear misconduct and that dismissal was well within the band of reasonable responses. He stated that even if the dismissal was unfair, compensation should be reduced by 100% on the basis of Polkey and/or contributory fault. Discussion and conclusions (42) There was some suggestion in Mrs Owens’ witness statement that there were other reasons for the dismissal, perhaps related to a period of absence following a bereavement and/or to staff restructuring taking place around that time. However, these matters did not form part of Mrs Owens’ pleaded claim, nor did they form any part of her questioning of the respondent’s witnesses. In all the circumstances, I have no difficulty in concluding that it was her conduct (as believed by the respondent) in handing over the master key to Ms Judson that was the reason for the dismissal. This is a potentially fair reason for dismissal (s.98(2)(b) ERA). (43) I find that Ms Kitson formed a genuine and reasonable belief that Mrs Owens had been the one to give a key box key to Ms Judson, and that that belief was based on a reasonable investigation. However, Mrs Owens had been completely clear from the outset of the disciplinary process she believed that this practice was sanctioned, and that others in the transport office, particularly Ms Faulkner, her direct line manager, also engaged in this conduct. (44) There was nothing explicit in the disciplinary policy (or SOP) to indicate that giving a key box key to a haulier (or anyone else) would amount to gross misconduct. There was nothing in the SOP to expressly indicate that hauliers, including those who were sub-contracted to work on site every day, were regarded as ‘customers’. In those circumstances, and given the claimant’s position, the conclusion that she had handed over keys was not the end point in determining whether misconduct had taken place and, if so, the gravity of that misconduct. (45) I find that Ms Kitson did genuinely believe that, in these circumstances, the claimant’s conduct was not authorised and therefore amounted to misconduct. However, in that case, the belief she held was not reasonable and was not founded on a reasonable investigation. (46) This was not an even-handed investigation. Neither Mr Baker nor Ms Kitson took the obvious steps which might have established (or, indeed, disproved) Mrs Owens position. They did not interview Ms Judson, other hauliers, or Charlotte Watling. There was no scrutiny or questioning of the evidence of Ms Faulkner, despite the direct conflict between her evidence and Ms Owens and the fact that (on the claimant’s version) she would have had a clear motivation to lie in order to keep herself out of trouble and ensure that Mrs Owens carried the blame. (I am not, for the avoidance of doubt, making any finding that Ms Faulkner actually was lying, but it was an obvious possibility and the respondent made no real effort to get to the bottom of which party’s version was correct). (47) Over the full course of the disciplinary process (including the appeal) the claimant provided evidence from five separate individuals. All of these statements were relevant and supportive of her position. The respondent at this hearing devoted considerable time to trying to establish that the motives of those individuals may have been questionable, either on the basis that they were friends of Mrs Owens and/or had ‘an axe to grind’ against the business themselves and/or were not employees of the business. (It is unclear to me why the respondent seemed to form the view that it could not, and should not, seek evidence from non-employees, nor consider that evidence when it had been obtained by the claimant, but that was the stance of both Ms Kitson and Mr Ryder.) (48) Those arguments might have been enough to establish that the investigation was within the bands of reasonableness if there had been only one impugned witness, or if BCA had overwhelming evidence pointing in the other direction. Neither of those scenarios was the case here. There was a fundamental dispute about whether the practice of handing out key box keys to hauliers was authorised or at least tolerated, including whether others engaged in it. Neither Ms Faulkner or Mr Williams were neutral witnesses as regards that practice. Given the extent of the evidence produced by Ms Owens in support of her position it was at least incumbent on BCA to investigate sufficiently to allow a determination to be made about what the practice was in reality, rather than simply ignoring evidence which it considered unhelpful. (49) It was also impossible for the respondent to make a reasonable decision on the appropriate sanction without making clear findings – taking into account all the evidence available – about whether the extent to which this conduct was authorised and/or tolerated and/or engaged in by other employees. This is especially so given the lack of any express indication in the Code of Conduct or elsewhere that permitted master keys to be used by third-party hauliers would be considered gross misconduct, and given that Mrs Owens was a longserving employee with a clean disciplinary record. (50) Drawing those strands together, I am satisfied that the decision to dismiss was not one open to a reasonable employer on the basis of the investigation conducted, and that the dismissal was therefore unfair. Remedy (51) The defects with BCA’s investigation, as outlined above, also present difficulty for their argument that reductions should be made to any compensation awarded. (52) On the evidence before me, there is no credible basis to speculate that the claimant’s supporting witnesses would, upon further investigation, all have been found to be unreliable. There is, therefore, no basis for any Polkey reduction. (53) In terms of contributory conduct, the claimant’s conduct in handing out the keys to hauliers has been established, and I consider that I am able to take that conduct into account despite being unable to make a specific finding about the incident which gave rise to the incorrect removal of a vehicle. However, on the evidence before me, and given the uncertainty around that actual practice with regard to key box keys, I am unable to conclude that that conduct was culpable. (54) At the conclusion of the hearing a provisional remedy hearing was listed for 10.00am on 3 April 2020 at the Manchester Tribunal. The hearing will now go ahead (unless the parties resolve matters between themselves before that date) and the following case management directions apply: (1) By 6 February 2020 the claimant is to serve on the respondent a Schedule of Loss setting out how much in compensation the Tribunal will be asked to award the claimant and explaining how the amounts have been calculated, a short witness statement setting out the efforts the claimant has made to obtain alternative employment and any documents which show the income received by the claimant since dismissal and/or evidence her attempts to secure alternative employment. (2) The respondent is then to prepare, and attempt to agree with the claimant, a bundle of additional documents for use at the remedy hearing. (3) The respondent must bring three copies of the bundle to the hearing for the use of the tribunal, and the claimant must bring three copies of her statement. The parties should ensure they have their own copies of documents and the statement for their own use. Further information about remedies can be found in Guidance Note 6 attached to the Presidential Guidance on General Case Management.