Mr O Ajayi v The Commissioners for HM Revenue and Customs (HMRC): 3201445/2020
EMPLOYMENT TRIBUNALS
Case No 3201445/2020
Between
Mr O AjayiClaimantThe Commissioners for HM Revenue and Customs (HMRC)Respondent
Before
Employment Judge M MartinMs S Babalola (instructed by Solicitor) for claimantMs R Ling (instructed by Counsel) for respondentDate 4 January 2022
JUDGMENT
The claimant’s complaint of unfair dismissal is well founded. However, he is not awarded any compensation. This tribunal finds that there is a 100% chance that he would have been fairly dismissed in any event and further finds that he contributed 100% to his own dismissal.
REASONS
[1]Mrs Justine Craven, Internal Governance Civil Investigator, Mrs Angela Cardosi Business Unit Head and, Mr Andrew Bowen, Grade 7 Business Unit Head all gave evidence on behalf of the Respondent. The Claimant gave evidence on his own behalf.[2]The tribunal was provided with an agreed bundle of documents marked appendix 1.
The Law
[3]The law which the tribunal considered was as follows:3.1 Section 98(1)Employment Act 1996 “In determining for the purposes of this Part, whether the dismissal of an employee is fair or unfair, it is for the employer to show the reason for the dismissal.3.2 Section 98(2) ERA 1996, a reason falls within this subsection if it:- (b) relates to the conduct of the employee3.3 Section 98 (4) ERA 1996 “The determination of the question whether the dismissal is fair or unfair (having regard the reason shown by the employer);- (a) depends on whether in the circumstances (including the size and administrative resources of the employers’ undertaking (the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee and; (b) shall be determined in accordance with equity and the substantial merits of the case.[4]The case British Homes Stores Limited v Burchell [1978] IRLR 379 where the EAT held that, in cases of misconduct, the tribunal, in determining whether a dismissal was fair or unfair, had to consider three elements:- first, there had to be established by the employer a belief that the employee had committed an act of misconduct; secondly that belief had to have been sustained upon reasonable grounds and thirdly, the employer must have carried out as much investigation into the matter as was reasonable in all the circumstances.[5]The case of Iceland Frozen Foods Limited v Jones [1982] IRLR 439 where the EAT held that the function of the employment tribunal is to determine whether, in the particular circumstances of the case, the decision to dismiss fell within the band of reasonable responses which a reasonable employer might have adopted. If the dismissal falls within the band, the dismissal is fair, if the dismissal falls outside the band, it is unfair.[6]The case of Sainsburys Supermarket Limited v HITT [2003] IRLR 23 where the Court of Appeal held that the objective standards of the reasonable employer must be applied to all aspects of the question of whether an employee was fairly and reasonably dismissed.[7]The case of Polkey v AE Dayton Services Limited [1987] IRLR 503 where the House of Lords held that an employment tribunal may consider whether an employee would still have been dismissed even if a fair procedure had been followed. The tribunal has to consider in that regard the chance of the Claimant being fairly dismissed and reflect that by way of a percentage. It can be all or nothing.[8]The case of Nelson v BBC Number 2 [1979] IRLR 346 where the Court of Appeal held that, in cases where there may be contributory fault on the part of the employee to his dismissal, the tribunal must consider whether there was blameworthy conduct (namely culpable or blameworthy conduct) on the part of the employee; whether that caused or contributed to his dismissal; and whether it would just and equitable to make any reductions.[9]The case of Hollier v Plysu Limited [1983] IRLR 260 where the Court of Appeal set out a broad-brush common-sense approach to deciding what part the employee’s own conduct played in causing or contributing to his dismissal and then advocated reducing any compensation accordingly.
The issues
[10]In this case, the only outstanding claim was that of unfair dismissal. In that regard, the tribunal had to consider the reason for dismissal. The Respondent relied upon conduct.[11]The tribunal then had to consider whether the Respondent had a genuine belief that the Claimant had committed an act of misconduct; whether that was based on reasonable grounds; and followed on from a reasonable investigation.[12]The tribunal had to also consider whether the Respondent followed a fair procedure and whether dismissal was a reasonable response in the circumstances of the case.[13]Tribunal was also invited to, as part of any liability hearing, to consider whether the Claimant contributed in any way to his dismissal and / or whether he would have been fairly dismissed in any event if it was found that a fair procedure had not been followed.
Findings of fact
[14]The Respondent is the organisation responsible for the collection of taxes in the UK.[15]The Claimant was employed by the Respondent as a VAT assurance officer. He commenced his employment with the Respondent in 1999. In his evidence to the tribunal, the Claimant confirmed that his role involved checking submissions made by traders for their VAT returns and ensuring that they were correctly submitted.[16]The claimant also acknowledged, during cross-examination, that he may, as part of his role, be required to give evidence in cases involving allegations of, for example, fraud relation to any VAT returns. It is noted that he was involved in at least one such case as is noted in one of his performance development evaluations; being documents which he had provided to the investigator as part of the investigation - page 397 of the bundle.[17]The Respondent, as one would expect in such an organisation, had various different codes to deal with conduct; to which the tribunal was referred during the course of the hearing.[18]The civil service code, which is at pages 252-256 of the bundle, noted that employees were expected to behave with integrity and honesty in respect of their behaviour.[19]The Respondent had a code of conduct dealing with conduct - behaviour at work which is HR22003. It is set out at page 257 which refers to maintaining the expected standards of conduct, behaviour and performance in line with the Respondent’s values, policies and procedures and for employees to take responsibility for what they did.[20]The Respondent had a conduct code dealing with honesty and impartiality - HR22007, which is set out that pages 259-261. At page 259 under Professional Standards, it states that HMRC takes a very serious view of anyone acting dishonestly, for example, defrauding HMRC by having personal tax irregularities.[21]At page 260, under Internal Fraud, it refers to the need to maintain the reputation and high standards of behaviour and culture of honesty and integrity, which are important priorities for HMRC and which the public has a right to expect. It goes on to state that it considers all employees have a duty and expects them to ensure that everybody maintains the highest standard of integrity and personal honesty in carrying out their business. It goes on to say that this is so important that all cases of alleged fraud would be looked at promptly, thoroughly, professionally and equitably regardless of value or implications. At page 261, it refers to examples of types of fraud/dishonesty. It includes, for employees of HMRC, dishonest or fraudulent conduct relating to tax, duties, contributions or payment administered by HMRC even if not connected with employment.[22]The Respondent also has a further policy on conduct - private conduct, HR22009, which is at page 262-266 of the bundle. At page 262, it states in the Overview, “In your private activities and financial transactions, you must avoid any conduct or behaviour which would:22.1 reflect poorly on you as an employee of HMRC22.2 bring HMRC into disrepute22.3 give grounds of suspecting dishonesty, or abuse of trust. It then talks about steps that should be taken in managing private financial affairs.[23]In the Respondent policy, HR22009, it further states that an employee must tell their manager if they have any financial or other personal circumstances that may affect the way they carry out official duties. It goes on to say that they must manage their private financial activities properly in particular: - 23.1 Manage their private dealings with HMRC properly and on time, including declaring additional income in line with HMRC rules.[24]The Respondent’s updated policy about personal responsibility is at pages 267-270. It notes at page 267, that an employee must not do anything that might discredit the department and must comply with their personal tax obligations and make any necessary changes or corrections at the earliest opportunity. It goes on to say that HMRC takes a serious view of anyone acting dishonestly, for example, having personal tax irregularities.[25]The Respondent also has a further policy on conduct - conflict of interest - HR22006 which is at pages 276-279 of the bundle. It states that an employee must take all possible steps to protect themselves and HMRC from any allegation or perception of impropriety. They must report any real or potential conflict of interest to their manager immediately when they become aware of it. It also goes on to give examples of circumstances involving conflicts of interest, which include undertaking or being associated in anyway with financial transactions where there is a connection, however slight with your work with HMRC, or where you have any information relevant to the transaction that is not available to the public, which might include transactions made on your account or those made for the benefit of other persons, including your spouse.[26]The Respondent has a policy dealing with dismissal and disciplinary, which is HR23007. That policy includes dealing with how to assess the level of misconduct which is at pages 280-285 of the bundle. The policy states that, any offence under any legislation for which HMRC is responsible including evasion of or irregularities involving tax, duties and contributions administered by HMRC, may be considered gross misconduct, as noted at page 284 of the bundle.[27]The Respondent also has a policy on discipline which is advisory for employees - HR23004, which is at pages 645-642 of the bundle. At page 646, that document refers to and has links to the various different parts of the disciplinary procedure, including the disciplinary policy and the disciplinary procedure. It also cross-references to how to assess the level of misconduct and deals with investigations and holding disciplinary hearings.[28]The Respondent says that all these policies were available to employees on the intranet which the Claimant acknowledged to be the case.[29]An issue arose regarding the Claimant’s self-assessment forms for the period 2013- 2016. This related to property income on three properties which were jointly owned by the Claimant and his wife. The Claimant was contacted in early January 2018 regarding his selfassessment form for April 2016 and asked to provide certain information. When he failed to do so, he was then sent a notice to provide information, page 98 of the bundle. He provided some information and was then asked for some further information in March 2018, (page 103). He requested an extension of time (page 104) but had still not provided that information by May 2018 (page 106). In his evidence to the tribunal, the Claimant indicated that he was having some difficulty in obtaining some of that information, but that he had provided some of the information. He was then sent a legal request for the provision of information in May 2018 - page 107 of the bundle. He still did not provide that information during June and July 2018, having contacted the officer to indicate that he was on holiday and was chasing up the information. He was told in July 2018, when officer had still not received the information that the appropriate amendments would be made by the HMRC officer to the form - page 113 of the bundle. In August 2018, the officer at HMRC revised the calculations as is noted at page 115 of the bundle. The HMRC officer noted that the assessments were being computed in terms of the profit incorrectly and requested a response to certain questions by early September 2018 -page 115-116 of the bundle. The Claimant responded to that letter in September 2018 as is noted at page 118-119 of the bundle. He indicated that he thought that he had accurately accounted for the rental income and expenditures. He said he was not receiving any advice but indicated that he would accept the corrections if the correct advice and calculations were shown and that further submissions will be calculated and submitted correctly. He was then issued with a penalty based on the accepted revised calculations for April 2017, as is noted at page 120 of the bundle. The Claimant then queried that calculation in October 2018 by way of a letter in October - page 131 of the bundle.[30]On 17 October 2018, the HMRC officer wrote to the Claimant to set out exactly why the calculation had been incorrect. That letter is at page 133-134 of the bundle. In that letter, he informed the Claimant that the Claimant had incorrectly included mortgage equity repairments as a deduction for the let property. He said that tax legislation does not allow for capital mortgage repayments to be included as a deduction when calculating profit from let properties but only the interest element of any repayment is an allowable deduction. He then provided an example of where someone let out a property and where there was a payment to a mortgage lender and showed the different treatment for the capital repayment and interest repayment. He made it abundantly clear in that letter that, when calculating profit, the only deduction which could be made was the interest on the mortgage and not the capital element of the mortgage.[31]The Claimant then submitted his self-assessment form for April 2018 which he sent in at the end of January 2019. HMRC then contacted him to indicate that the assessment was again incorrect and that he had made the same error as he had made previously - page 164-165.[32]The HMCR officer then indicated that he would be issuing the Claimant with a deliberate penalty notice having not heard anything from the Claimant about the revised calculations within the time period - page 167. A penalty notice was then issued to the Claimant being a deliberate penalty as is noted at page 182 of the bundle. The Claimant was advised of his right to appeal against that decision but did not do so.[33]In his evidence to the tribunal, the Claimant suggested that he had not appealed against the decision because he believed that the decision would be overturned. However, when he was cross examined about this matter, he could explain why he believed that it would be overturned other than indicating that he was having some discussions with the HMRC officer about his personal issues at the time. He did acknowledge in cross examination that the HMRC officer had not ever said the decision would be overturned.[34]After the matter was referred to the Claimant’s manager in July 2019, his manager met with him. The Claimant told his manager that he had now engaged the services of an accountant to complete the forms and that was paying back the money. He told his manager that this was just an error and that there was no intent or intention to defraud - page 197 of the bundle.[35]The Claimant’s manager indicated that he was unaware that the Claimant owned these properties and was not aware of a conflict of interest form having been completed by the Claimant, as he was required to do.[36]The matter was then referred on and an investigation was undertaken into the matter.[37]The investigator appointed was Mrs Justine Craven from internal governance. Mrs Angela Cardosi was appointed as the disciplining officer and wrote to the Claimant in early September 2019 to inform him of the investigation. That letter is at page 214-a-214b of the bundle. She sets out details of the potential concerns against the Claimant namely his failure to comply with HMRC tax regulations; failure to comply with HMRC private conduct guidance; and dishonesty in respect to the above matters. She explains that those actions could potentially amount to gross misconduct and are contrary to HMRC guidance. She explains that Justine Craven will be undertaking the investigation. In the letter, the Claimant is referred in that letter to disciplinary procedures at HR23004. He is warned that dismissal could be a sanction in this case.[38]In her evidence to the tribunal, Mrs Cardosi said that she was not very busy at that time and so she decided to use that time in preparation for dealing with the claimant’s case. She wanted to obtain some information about the Claimant and contacted his manager to get some details about his sick leave and any performance reports.[39]His manager emailed Mrs Cardosi in reply to indicate that the Claimant had formally been put on a PIP and that his case work is not always of the best quality. He said the claimant’s grammar still needed to be checked as English his first language. He did however also say that the Claimant tried very hard, and he never had to question his efforts and attitude as noted at page 230 of the bundle.[40]In advance of the interview with the Claimant, Mrs Craven tried to find out from the Claimant’s manager whether the Claimant had informed them about his property interests. She was informed by his manager and previous manager that they had not as noted at page 300 of the bundle.[41]Ms Craven interviewed the Claimant on the 8 October 2019. The transcript of that interview is at page 303-379 of the bundle. The Claimant attended the investigatory meeting with his trade union representative.[42]Prior to the interview, the Claimant was sent a number of documents which related to all the various codes of conduct referred to above namely: - the civil service code; HR22003; HR22009; HR22012; HR22006; and HR23007; an explanation of the process and the information which had been shared by the self-assessment team with internal governance. She said that she also produced a timeline of events which she did not provide to the Claimant before the meeting, although she shared with him during the meeting.[43]During the interview, Mrs Craven outlined the allegations to the Claimant and referred to the various codes. The Claimant indicated that he had been under some pressure at the time. He referred to difficulties with his father for whom he was caring at the time.[44]In the interview, Mrs Craven asked the Claimant why he had submitted his 2018 tax return containing the same error as previously. She asked him this on several occasions, but on none of the occasions was he able to provide a plausible explanation, as is noted at page 331. She indicated that it contains the same inaccuracy, but he does not comment other than saying “okay”. She asked him again as noted at pages 333/ 334 and again he is unable to provide an explanation. She also asked him why he did not appeal against the decision. He says that he did not but indicates that the officer had spoken to him and had been friendly - page 336. She also asked him during the investigation why there was a delay in him providing the information requested. Again, he is not able to provide any explanation other than indicating that he was waiting for one of the mortgage documents. During the course of the investigation, the Claimant was also asked why he had failed to declare the properties or complete the conflict of interest form. He said that he thought he had informed Mr Hyde, his previous manager, who was now deceased - pages 315-316. When he was asked whether he had completed the conflict of interest form, he indicated that he thought he had and would try and find a copy - page 316.[45]The claimant was also asked why he had failed to inform his manager about the inquiry by HMRC. He said that he considered this to be a private matter - page 365. He was also asked whether, bearing in mind the role he undertook, he would have been able to fill in the forms correctly. He appeared to suggest yes and no - page 374.[46]He also confirmed during the investigation that he accepted that his actions were not consistent with the Respondent codes, but he did say that he had not acted dishonestly and had not been dishonest.[47]After the investigation, the Claimant sent the investigating officer some further information, which included copies of some of his personal performance and development evaluation forms; some information regarding his father’s health and regarding his own health issue relating to high blood pressure - pages 408-423 of the bundle.[48]The investigating officer then produced an investigation report which is at page 234- 248 of the bundle. She noted at paragraph 33 at page 239, that the Claimant could not find a copy in his records of the discussion about the properties with his manager but remembers mentioning it. She also notes at page 239 paragraph 34 that the claimant said he wanted Mr Hyde to be aware that he was filling in those forms. In his evidence to the tribunal, the Claimant said that he did complete the conflict of interest form.[49]In his evidence to the tribunal, the claimant said that the issue which had been raised with him by the HMRC officer about only declaring 50% of the profits and not 100% because the properties were owned jointly with his wife had been done on 2018 assessment form, so he had made some amendments based on the advice received. In his evidence, he said that he had filled the forms in this way because he had not used an accountant. He said in evidence that he thought he was able to do it in this way. It is noted in the Investigation Report that he said he was a VAT assurance officer and would not have the knowledge to fill in the forms - paragraph 35 at page 240.[50]In his evidence to the tribunal on this issue, the Claimant indicated that he had made the correction regarding equating only 50% of the income in the 2018 self-assessment form submitted and seemed to suggest that that was the only correction he thought he needed to make. When he was asked in the tribunal on cross-examination about why he had still failed to correct the error on his 2018 self-assessment and made the same error regarding the mortgage equity interest, he said that he was under pressure at the time with work and caring for his father.[51]Mrs Craven concluded in her investigation report that there was a case to answer in relation to all three of the allegations. Her summary and analysis are at pages 247-249 of the bundle.[52]She said that she concluded in relation to the first allegation that he may have made a mistake initially but that he had been advised of the amendments that he had to make and yet still failed to heed that advice and submitted further tax returns containing the same errors for 2017 and 2018. Furthermore, he failed to provide any explanation as to why he had made those errors on three occasions even though he had been provided with correct advice as to how to do his calculations. She said that she concluded that, in the absence of such efforts to make enquires, this appeared to be negligent. She said he appeared to make little effort to try and find out how you correctly calculate tax.[53]In relation to the second allegation, she noted that he indicated he had informed his previous manager, but the consent form could not be found. There was no indication that he had informed his subsequent managers. It was also noted that he accepted that he had not informed his current manager about the inquiries with HMRC. In relation to the third allegation - dishonesty aspect - she concluded that there was also a case to answer. She concluded that, although he might have not taken proper care initially to submit his tax returns correctly, she concluded that the tax return in 2018 appeared to be deliberate. She would have expected somebody with his experience and knowledge, as a trained VAT officer to have had some level of technical knowledge given his role involved in analysing of VAT returns. She also noted that he was required to pay back over £6000 and concluded that he appeared to have been less than honest in respect of his financial affairs.[54]Mrs Craven was cross examined about whether she had compared the selfassessment forms and VAT forms. Mrs Craven said that she had some knowledge of the VAT forms but did not compare them. She considered it was reasonable to expect someone with the claimant’s knowledge and expertise to be able to complete both forms or, if not, make appropriate enquiries about how to do so. She said that the claimant did not do so until after he had submitted the third incorrect self-assessment form for 2018.[55]The matter was referred to the disciplinary hearing. The Respondent then wrote to the Claimant inviting him to a disciplinary hearing. The invite is at pages 454-456 of the bundle. The Claimant was sent a copy of the investigation report and some emails/details of agendas from his manager and sick leave records. In the letter, Mrs Cardosi indicated that she had contacted the Claimant’s current manager and had asked for copies of those agendas/emails and sick leave records, which were enclosed. In the letter she made it clear that the allegations which were being considered were namely: - the failure to comply with HMRC tax regulations; the failure to comply with HMRC private conduct guidance and being dishonest in respect to those matters. She made it clear that this may constitute gross misconduct; the penalty for which may be dismissal or a two-year final written warning. She also informed him that he had the right to be accompanied to the meeting by a trade union representative.[56]The disciplinary meeting took place on the 10 January 2020. The Claimant attended the disciplinary hearing with his trade union representative. The notes of that meeting are at pages 557-560 of the bundle.[57]At the disciplinary meeting, the Claimant was asked about the allegations and taken to the investigatory report. At the meeting, the Claimant agreed his failings in relation in relation to the first allegation. He also accepted that he did not comply with the second allegation because he was unable to provide the documentation, but that he had the discussed it with his manager but could not provide the conflict of interest form. He admitted that he had not told his manager about the inquiries by HMRC. However, in relation to the third allegation, he said he was not dishonest - page557. He said that he did not understand the error, but now realises that it was wrong. He maintained that he was not being dishonest, but that it was a genuine oversight - page 557. It was pointed out to him that he had ignored advice given by the HMRC officer and continued to submit returns to claim money to which he was not entitled. He said that he had contacted an accountant and that he had a lot going on at the time - his high blood pressure and his father not being well - page558. The Claimant also suggested that he did not understand what further information was required, but that he was not being dishonest. He said that he was not making any profit on the properties.[58]He was then asked about the training provided on conflicts of interest and the various agendas and emails sent by his manager about this topic. He said that he could not recall having any training - page 558.[59]It was outlined to him that a deliberate penalty had been issued to him for incorrect self-assessment forms for 2017 and 2018. He acknowledged that they were serious offences. He said that he had not told his manager because he thought it was a private matter - page 558.[60]The meeting was adjourned for a short period, after which the discipling officer summed up the allegations. The Claimant was referred to the guidance at HR22007; which stated that HMRC takes a very serious view of anyone acting dishonestly, an example would be defrauding HMRC by having personal tax irregularities. The Claimant agreed that he did have tax irregularities. He was also asked if there were any other mitigating factors to consider as noted at page 559.[61]Mrs Cardosi liaised with her HR colleague and then wrote to the Claimant on the 17 January 2020. She informed him that he had been dismissed for gross misconduct. The letter is at pages 561-563 of the bundle. In the letter, she noted that the Claimant admitted he failed to comply with HMRC tax regulations and admitted failing to comply with HMRC private conduct guidance but did not agree that he was dishonest but did admit that he acted dishonestly by having personal tax irregularities. She confirmed that the allegations had been proven and that his employment should be terminated immediately, with the effective date of dismissal being 20 January 2020. He was advised that he had a right write to appeal.[62]In her evidence, Mrs Cardosi said that she undertook deliberations in relation to her decision. Details of those deliberations and reasoning are set out at pages 564-568 of the bundle. A copy of those deliberations was sent to the Claimant with the letter of dismissal.[63]In the deliberations, Mrs Cardosi noted at page 565 that the claimant had agreed that he had failed to comply with HMRC tax regulations. She noted that he had failed to comply with the guidance on private conduct. She noted he was unable to provide documentation showing that he told the previous manager or completed the conflict of interest form. She noted he had admitted that he did not tell his manager about the HMRC inquiries into his tax affairs. She acknowledged that he disagreed he was being dishonest in relation to these matters, however when it was explained to him that the Guidance states that HMRC take a serious view of such conduct, he agreed at this point that it applied to him–page 566. She noted his mitigation which related to health issues, domestic issues, his good work record, his period of service and the position he held.[64]Mrs Cardosi concluded that all the allegations were upheld and outlined her reasons. In her notes at pages 566-567, she refers to whether he was negligent in relation to the second allegation in not telling his manager about the properties. She concludes that he was dishonest in relation to both the first and second allegations. She took account of the HMRC guidance. She noted that he had made the same deduction for mortgage equity repayments in 2018, after having been clearly advised that he could not do so. Further, she noted that he did not have a plausible explanation as to why he did not amend or submit accurate accounts. She concluded at page 568 that he had submitted an incorrect tax return after he had been given guidance by the HMRC officer, who had amended the previous returns. She considered this was gross misconduct. She concluded that the only appropriate sanction was dismissal because he had knowingly submitted an incorrect tax return which reduced his tax liability and that it met the definition of internal fraud as per HR22007. She did consider a warning was appropriate, because she considered in the circumstances that the breaches were substantial, as noted at page 568 of the bundle.[65]Both Mrs Craven and Mrs Cardosi were cross examined at length by the claimant’s representative about references in both the investigation report and deliberations document/letter of dismissal which referred to the claimant’s actions being negligent on the one hand and dishonest on the other. Both witnesses explained that they initially considered that the claimant’s actions in managing his tax affairs at the beginning could have been negligent, but both in evidence indicated that, after the claimant had been given clear advice by the HMRC officer that he could not claim for those deductions, yet he still continued to do so, which they both considered potentially amounted to dishonesty under the respondent’s internal guidance.[66]After he was dismissed, the claimant asked for a hard copy of the disciplinary policy. He also asked to extend the time for any appeal - pages 571 and 596. The respondent sent the claimant a copy of the disciplinary policy by email and a hard copy in the post. They also agreed to extend the time period for any appeal - page 572, 598-599.[67]The claimant appealed against the decision to dismiss him on third February 2020. His l letter of appeal is at pages 603–605 of the bundle.[68]In his letter of appeal, the claimant raised a number of points: – firstly he said that the dismissal letter contained an error because he did not agree that the acts were dishonest by having personal tax irregularities; he also said that he had informed his manager about the properties and completed a conflict of interest form which he had asked the respondent to locate; he disputed that it was dishonest conduct and said that it might have been negligent but it was not dishonest; he referred to the stress he was under with his own health and his father’s health. He said that he did not commit fraud - his role was as a VAT specialist with no expertise in completing self-assessment forms and the forms were not comparable; he also said that the dismissal was too high a sanction and finally indicated that there were procedural errors in the disciplinary process.[69]Mr Bowen heard the appeal. In advance of the Appeal Hearing, he checked to see if there were any workplace adjustments or stress reduction plan in place for the claimant. He noted that there were neither and that the claimant had little time off sick.[70]The appeal hearing took place on 10th March 2020. It was not a rehearing. The claimant attended with his PCS representative. The notes of the appeal hearing are at pages 625–627 of the bundle.[71]At the appeal hearing, the claimant was given the opportunity to go through his grounds of appeal.[72]Mr Bowen asked the claimant why, if he had received a deliberate penalty notice he had not appealed against that decision. The claimant said that he was surprised about it and expected the officer to change his mind. Mr Bowen also asked the claimant why he did not tell his manager about the HMRC enquiries. The claimant said that on reflection he should have done so. The claimant was asked if he understood the impact of the penalty notice on his job if he was called as a witness in any tax investigation.[73]In the appeal hearing, the claimant said that he had given some information and referred to the documents which he had produced regarding his health and that of his father. The claimant said, in the appeal, that he thought the decision to dismiss him was harsh. He said that his actions were not deliberate, but that he had made an error.[74]The respondent upheld the decision to dismiss the claimant. The letter dismissing the claimant’s appeal is at pages 622–624 of the bundle.[75]The respondent concluded that there were no procedural failings and that the decision to dismiss was consistent with the respondent’s policy. Mr Bowen noted that the claimant had received a deliberate penalty notice which he had not appealed. He also noted the definition of dishonesty as defined under HMRC guidance. Mr Bowen accepted that the evidence had been properly considered by the disciplining officer and a rational and proportionate response was dismissal in this case. Mr Bowen noted that the claimant had received advice from the HMRC officer which he had not acted upon. The claimant had also received a deliberate penalty notice. Further, he noted that there was no record of the claimant informing his manager of his properties and no attempt to inform his manager of the HMRC enquiries. Mr Bowen also considered the claimants’ mitigation and performance which he believed to have been properly considered by the disciplining officer. He concluded that the decision to dismiss was fair and reasonable.[76]The claimant issued proceedings in this tribunal claiming unfair dismissal and disability discrimination, although he subsequently withdrew the latter complaint. Submissions[77]The claimant’s representative submitted that there were procedural failings in the disciplinary process and/or further submitted that the respondents did not have a reasonable belief that the claimant had committed an act of gross misconduct. In that regard, she relied upon the claimant not being provided with the disciplinary policy; inconsistencies as to whether it was alleged that the conduct was negligent as opposed to dishonest; the claimant having not been suspended and being allowed to continue in his role; the respondent considering issues around the claimant’s character from the email sent by his manager to the disciplining officer and the dismissal letter being wrong because the claimant did not admit he had acted dishonestly. She further submitted that dismissal was not a reasonable response in the circumstances because of the claimant’s health, personal circumstances, and length of service including his good record.[78]The Respondent’s representative submitted that the respondent did have a reasonable belief that the claimant had committed an act of gross misconduct and had substantial evidence in that regard; much of which was not disputed. She submitted that a reasonable investigation was undertaken and that the claimant was given the opportunity to put his case; being represented throughout. Further, she submitted that dismissal was a reasonable response in the circumstances of the case taking account of the type of organisation which the respondent was and for which where the probity of employees was significant.
Conclusions
[79]The claimant was dismissed for conduct in relation to failing to comply with HMRC’s tax regulations, failure to comply with HMRC’s private conduct guidance and for being dishonest in respect of those matters.[80]Conduct is a fair reason for dismissal under section 98 (2) of Employment Rights Act 1996.[81]This tribunal accepts that the respondent did have a genuine belief that the claimant had committed an act of misconduct. Firstly, he admitted the first allegation and admitted part of the second allegation relating to not informing his manager of the enquiries by HMRC into his tax affairs.[82]The respondent had substantial evidence to support the allegations which included the referral and documentation provided by the HMRC officer which included:- evidence showing that the claimant was being chased about information relating to his tax returns and then issued with a legal notice to produce documents; evidence showing that the claimant had been notified that he was incorrectly completing his tax returns for the period 2013–2016; and most significantly evidence providing a clear explanation by the HMRC officer to the claimant explaining the error and how to complete his tax returns correctly. However, the claimant then went on to submit two further tax returns; the last one being for 2018; which contained the same incorrect information, despite the claimant having been clearly told what he needed to do. The tax return he submitted meant that the claimant was claiming for money to which he was not entitled. Finally, there was evidence showing that the claimant had been issued with a deliberate penalty notice which he had not appealed. That evidence was coupled with the fact that the claimant had not told his manager about irregularities with his tax affairs.[83]This tribunal finds that the respondent did have a genuine belief that the claimant had committed several acts of misconduct based on the substantial evidence available to them. Based on that evidence, this tribunal finds that it was reasonable for the respondent to conclude that it this was not an error and the claimant acted dishonestly according to the respondent’s internal guidance.[84]The respondent undertook a very thorough investigation into the allegations. They considered all the evidence available to them. The claimant was given the opportunity at the investigatory and disciplinary meetings to put his case. He was represented throughout.[85]This tribunal finds that the procedure was fair and in accordance with the respondent’s procedures and the ACAS code of practice.[86]The tribunal does not consider that there was a failure to provide the claimant with a disciplinary policy. He could easily access that policy online and was directed to the relevant procedure at HR23004, which had a link to the entire disciplinary policy and procedure. In any event he was provided with a hard copy of that policy before the appeal hearing, so the appeal hearing rectified any failure. However, the tribunal does not consider that there was any procedural error in that regard as the claimant and his trade union representatives could at any stage have asked for the policies, if he was unable to locate them and really required the policy.[87]This tribunal does not consider that the investigating officer needed to review blank copies of the VAT form and self-assessment form to compare the same. The issue which was being investigated was not about the completion of the form but whether the claimant had incorrectly filled in the form to claim deductions which he to which he was not entitled, despite being given advice not to do so three months before he sent in his 2018 selfassessment form.[88]This tribunal also does not consider that there was anything substantially or procedurally unfair in the respondent referring at times in the investigation hearing and dismissal letter to the claimant’s behaviour being both negligent and dishonest. In that regard the tribunal accepts the evidence of Mrs Craven and Mrs Cardosi; both of whom were credible witnesses, that, although initially the claimant’s actions might have been negligent, they became dishonest when he appeared to deliberately ignore the clear advice, he had been given by the HMRC officer and claim for deductions to which he was not entitled. This tribunal accepts that the evidence of Mrs Cardosi that such actions did fall, as she indicated, within the definition of dishonesty under the internal guidance.[89]The fact that the claimant was not suspended and allowed to continue in his role is not relevant as to whether his dismissal was fair or unfair.[90]One issue which concerned the tribunal was the fact that Mrs Cardosi obtained information from the claimant’s manager of which the claimant was unaware. In that evidence there is reference to the claimants’ performance in a negative way, but there are also positive comments made about him. The tribunal accepts Mrs Cardosi’s evidence that this information was not considered by her and did not prejudice her decision. The allegations which she was considering related to probity and she had sufficient evidence before her to reach the decision which she did ignoring, as the tribunal accepts, the evidence from the claimant’s manager. However, the tribunal does consider that it could amount to a procedural error, whereby the respondent, in the form of the decision maker had information, which was not provided to the claimant and upon which he was not given the opportunity to comment, even though such information was irrelevant; nevertheless, it could amount to procedural error.[91]This tribunal finds that dismissal was a reasonable response in the circumstances of this case. The claimant was an experienced VAT officer who could be required to give evidence at a tribunal or in court and his credibility would be paramount. It is clear his credibility was impugned by his actions in submitting a further self-assessment form to claim for deductions to which he was not entitled, having been told only three months earlier by HMRC, that he was not entitled to claim those deductions and yet he still did so and was issued with a deliberate penalty notice for doing so. This tribunal accepts that, for an organisation like HMRC, the credibility of its employees is crucial and therefore the tribunal accepts that the respondent had no choice but to dismiss the claimant for his actions.[92]As the tribunal has found that there was a procedural error in the respondent’s decision maker having information about the claimant, upon which the claimant was not given the opportunity to comment, even though it was not something that was considered by the decision maker it could nevertheless be a procedural failing which would make the dismissal unfair.[93]With that in mind the tribunal had to go on to consider whether the claimant would have been fairly dismissed in any event if this minor error had not occurred. This tribunal finds overwhelmingly that the claimant would most certainly have been dismissed in any event for the reasons referred to above. Therefore, taking account of the case of Polkey, this tribunal finds that there was 100% chance of the claimant being fairly dismissed in any event.[94]Furthermore, this tribunal also finds that the claimants behaviour in the way in which he managed his tax affairs namely:-failing to provide information to HMRC; being issued with a legal notice to do so; incorrectly claiming for deductions to he was not entitled in his 2018 tax return after having been given clear advice by HMRC that it was wrong to do so; wrongly claiming for deductions to which she was not entitled; and being issued with a deliberate penalty notice; all amount to culpable and blameworthy conduct which led to and contributed to his dismissal. Therefore, he was 100% responsible for his own dismissal.