Employment Judge Ronald MackayMs Mohammed (instructed by Solicitor) for claimantMs Miller (instructed by Solicitor) for respondentDate 20 July 2021
JUDGMENT
The Claimant was fairly dismissed by the Respondent by reason of his conduct. The claim is, accordingly, dismissed.
REASONS
[1]This is a claim for unfair dismissal. The Respondent contended that the Claimant was fairly dismissed by reason of conduct in accordance with Section 98(2) of the Employment Rights Act 1996 (“ERA”).[2]The parties prepared a joint bundle of documents. During the course of the Hearing, additional documents were added.[3]It also became apparent during the course of the Hearing that a letter in the bundle from the Respondent to the Claimant was not in the same form as the letter received by the Claimant. The correct letter was subsequently added.[4]The Tribunal heard from three witnesses for the Respondent, Ms Alison Nimmo, Mr Graeme Currie and Ms Elizabeth McCutcheon.[5]The Claimant gave evidence on his own behalf. Notes on Evidence[6]Each of the Respondent’s witnesses were largely credible and reliable in their evidence. No issues at all arose with the credibility of Mr Currie. One issue of dispute arose between the evidence of Ms Nimmo and Ms McCutcheon. This is set out further below and relates to a conversation which took place during the appeal stage of the internal process. The recollections of both were hampered by the absence of a contemporaneous file note. The Tribunal, did not, however, consider that that conflict gave rise to any material bearing on the case.[7]The Claimant was clearly very aggrieved and whilst he felt passionately about the issues before the Tribunal, he had a tendency to give differing accounts of certain aspects of the evidence. This was most apparent in his evidence before the Tribunal which on occasion was at odds with the case as pled or the contemporaneous documentation. He also had a tendency to introduce new matters in the course of his evidence which were not foreshadowed in the pleadings and which were not put to the Respondent’s witnesses.[8]That said, relatively few of the material facts in the case were disputed. Where areas of conflict emerged, the Tribunal has considered these and resolved them in the Findings in Fact section which follows. Findings in Fact[9]The Respondent is a not for profit social enterprise company providing support to small businesses. It is based in Lanarkshire with offices in Coatbridge and Hamilton. It is a small organisation with no dedicated HR function.[10]The Respondent hosted, and employed individuals to provide services under, the Scottish Government’s Developing the Young Workforce programme (“DYW”). The Claimant was employed as a DYW Development Executive initially on a fixed term contract starting on 23 October 2017. He remained employed until his dismissal with effect from 14 October 2020.[11]The Claimant’s role involved liaising with school pupils and employers in raising awareness of opportunities for school leavers.[12]The Respondent’s DYW programme was one of 21 across Scotland, each hosted by local organisations (such as the Respondent).[13]Whilst the Claimant’s primary activities centred around the DYW programme, he was engaged in other projects from time to time. One such project emerged in September 2020. The UK Government introduced an initiative called the Kickstart Scheme. The purpose of the scheme was to provide funding for employers to offer job placements to young people on Universal Credit. The scheme was part of the UK Government’s COVID response.[14]The scheme was open to employers who could offer at least 30 work experience places. As an alternative, smaller organisations were able to come together under the umbrella of an intermediary organisation who could provide 30 places across a number of employers.[15]The Respondent assessed whether it would be appropriate to operate as an intermediary. As part of their assessment, the Claimant was tasked with identifying whether the Respondent could find a sufficient number of employers who were interested to meet the 30 threshold.[16]The Claimant at one stage in his evidence suggested that his efforts to recruit employers was done outwith his contract of employment and in his own time. The Tribunal was satisfied, however, that he was doing this work as part of his employment with the Respondent and on their instructions. It is clear that some of the activity was outwith normal working hours. The Claimant stated, however, that this was normal for him in his work generally.[17]Whilst the Claimant was successful in obtaining expressions of interest from a sufficient number of employers, with other expressions of interest coming from elsewhere within the Respondent, the decision was ultimately taken by the Board of the Respondent, that they should not participate in the scheme.[18]The Respondent was keen not to let down those employers who had expressed an interest in the scheme. They decided that they should make efforts to ensure that they were referred to another intermediary provider. A discussion took place between the Claimant and Ms Nimmo on 30 September.[19]For those employers in Lanarkshire, North and South Lanarkshire Councils were identified as alternative providers. A dispute in evidence arose as to what was to be done with those employers outwith Lanarkshire.[20]Ms Nimmo gave evidence that she suggested Glasgow Chamber of Commerce. She indicated that the Claimant had also suggested East Dunbartonshire Chamber of Commerce. She said that she was comfortable with either. She gave evidence that there was no mention of any fees being provided.[21]The Claimant gave evidence that he mentioned East Dunbartonshire Chamber of Commerce offering a fee for referrals. In his evidence, the Claimant stated that he was told that he was free to do what he wanted with those employers identified by him (including securing a fee). That account, however, is not consistent with the Claimant’s pleadings where he stated only that he “felt from [the] discussion that there was no issue with him doing as he pleased with these leads”. It is also inconsistent with the account given by the Claimant at the disciplinary and appeal hearings connected with his dismissal. At the latter, the Claimant, when asked if he had been given permission to ask for a fee for himself, the Claimant answered no. The evidence of Ms Nimmo in this regard is, accordingly, preferred.[22]Following the discussion, the Claimant emailed a contact at the Wise Group (another organisation involved in supporting young people in employment). This led to a telephone conversation on 1 October 2020. During the course of that conversation, the Claimant requested a fee for the transfer of employer contacts. He indicated that the fee was to be paid to himself rather than to his employer.[23]Ms Nimmo received a telephone call from a representative of the Wise Group. The representative advised that the Claimant was seeking a payment for leads for himself. She wanted to establish if this was correct. The Wise Group account of events was confirmed in an email of 2 October 2020.[24]Ms Nimmo’s reaction was that the Claimant should not have been requesting a fee either for himself or for the Respondent. She considered that to be inappropriate.[25]A meeting took place between the Claimant and Ms Nimmo on 2 October 2020.[26]During the course of the meeting, the Claimant indicated that he had not sought to sell Lanarkshire leads, only those which he had sourced which he considered to be his own. The Claimant was suspended on full pay pending further investigations. As it transpired, no further investigations took place other than the preparation of a note by Ms Nimmo of her involvement in the issue.[27]By letter dated 7 October 2020, the Claimant was invited to a disciplinary hearing to take place on 12 October 2020. The allegation as set out in the letter was to the effect that he had contacted the Wise Group and told them that he had employer contacts to pass to them and that he would be seeking a finder’s fee for the referrals. It was further alleged that the Respondent does not ask agencies for a finder’s fee for any referrals of any nature and the Claimant was not authorised to request a finder’s fee for himself. The letter went on to say: “It is deeply concerning that you attempted to use your position with the Developing Young Workforce team to obtain money from a partner agency in this way. This situation has reputational consequences for [the Respondent] with local partner agencies including the Wise Group and also the Scottish Government.”[28]The Claimant was advised that he may be dismissed without notice if found to have committed gross misconduct.[29]The Respondent conducted the disciplinary process in accordance with its standard disciplinary procedure. In the Claimant’s contract of employment, however, it is provided at Clause 14.2 that any disciplinary matter will be dealt with by the Chief Executive with a right to appeal thereafter to the Board of the Respondent. This contractual provision was not followed.[30]Whilst Mr Currie sought to persuade the Tribunal that this was for the benefit of the Claimant, Ms McCutcheon’s reasoning seemed to focus on the difficulty of getting the Board together.[31]The disciplinary hearing took place on 13 October 2020. The Claimant was accompanied by a colleague. The hearing was chaired by Mr Currie, the Respondent’s Deputy Chief Executive.[32]In his evidence, but not before, the Claimant suggested that the hearing was conducted in an aggressive manner and that he was badgered into giving the answers that Mr Currie wanted. That is not reflected in the minutes of the meeting which were not previously disputed by the Claimant; nor was the suggestion put to Mr Currie in cross-examination. The Tribunal was content to find that the hearing was conducted in a fair and reasonable manner as represented in the minutes.[33]During the course of the hearing, the Claimant confirmed the content of the conversations between him and the Wise Group. He stated that he had made a huge mistake, that he apologised and would apologise to Ms Nimmo if allowed to return.[34]The Claimant initially suggested that he had sourced the employers in his own time and thought he could pass them to whoever he wished. On being asked if he still felt that the contacts were his own, he stated that he no longer did. The Claimant did not indicate that he had been given approval to sell the leads for his own gain.[35]Following the hearing, the Claimant emailed Mr Currie and asked that the sanction be limited to a warning with training.[36]By letter dated 14 October 2020, Mr Currie confirmed that he had taken the decision to dismiss the Claimant. The reason for dismissal was set out as follows: “The reason for your dismissal is that you attempted to obtain a personal financial gain from a partner organisation by offering to sell them the contact details of SMEs which you had been asked by your line manager to refer to a different Kickstart provider. During the disciplinary hearing you agreed that the evidence produced was a fair and accurate account of events and as such the accusation was true.”[37]The letter concluded that the Claimant was not entitled to any notice or payment in lieu of notice but that Mr Currie had decided to make a payment in lieu of one month’s notice. On being questioned as to why a payment in lieu of notice was made, Mr Currie advised that effecting the dismissal was one of the saddest days of his life and took into account the fact that there was a young family involved.[38]During the course of his evidence, the Claimant sought to suggest that there was animosity between him and Mr Currie and that the decision was predetermined. The Tribunal had no hesitation in rejecting that and accepted the evidence of Mr Currie on this point.[39]In reaching his decision, Mr Currie took account of the Claimant’s good record and hard work. He also took account of potential reputational damage caused by the Claimant using the Respondent’s email account and email signature, seeking payment for referrals.[40]Given the nature of the situation, the Respondent felt it necessary to disclose the issue to the Scottish Government.[41]The Claimant was afforded a right to appeal against the decision. He exercised this by means of an email dated 21 October 2020 to Liz McCutcheon, the Respondent’s Chief Executive. In his email, the Claimant challenged the severity of the sanction. He also stated that there was a lack of clarity on instructions from his line manager and no clear policies and procedures on the handling of the leads.[42]The Claimant was invited to an appeal hearing by letter dated 22 October 2020. The meeting took place on 26 October 2020, and was chaired by Ms McCutcheon. The Claimant was again accompanied by a work colleague.[43]During the course of the appeal hearing, the Claimant accepted that he had not sought authority to ask for a fee for leads. He also accepted that he had not sought approval to approach the Wise Group. Contrary to the position ultimately accepted by him at the disciplinary hearing, the Claimant sought to re-state the position that the leads were his own to deal with as he wished.[44]Ms McCutcheon questioned the Claimant as to why if this was the case, he had not sought approval under his contract of employment to perform outside activities. The Claimant indicated that he had sought payment for leads during the first month of his employment and that Ms Nimmo was aware of this.[45]Following the appeal hearing, Ms McCutcheon spoke to Ms Nimmo on this point. It is unfortunate that there is no note of the conversation and there was a clear dispute between the two as to what was said. The lack of clarity on this issue was compounded by the fact that the wrong appeal letter was initially contained in the bundle. Only after the conclusion of Ms Nimmo’s evidence did the Claimant’s solicitor alert the Tribunal to this issue. The correct letter was subsequently introduced and Ms Nimmo was recalled to give further evidence.[46]The key difference between the two letters was that the correct version contained an account of the conversation between Ms McCutcheon and Ms Nimmo.[47]The letter, which accords more with the evidence of Ms McCutcheon, states that Ms Nimmo was aware of the Claimant having been involved in outside activities relating to apprenticeships at the beginning of his employment.[48]In her evidence, Ms Nimmo indicated that she was not aware of what this meant and that her recollection of the conversation was vague. She stated that she was not aware of the Claimant dealing with leads in relation to apprenticeships during his employment with the Respondent. She was less clear on the position in the Claimant’s previous work.[49]The Claimant sought to suggest that the original appeal letter in the bundle was a fabrication and that it was designed to mislead the Tribunal. The Respondent’s position was that it was an error on the part of the person collating the bundle. Whilst the Tribunal was content to accept that there was no deliberate attempt to mislead, as it would be straightforward for the Claimant or his solicitor to identify the issue (as they ultimately did), it was disappointed that Ms McCutcheon in her preparations for the Tribunal did not identify and correct the issue herself.[50]The Claimant’s appeal was ultimately dismissed.[51]Both Mr Currie and Ms McCutcheon on being asked whether the Claimant would have been given permission to sell leads for a personal fee if asked, said that the answer would have been no. They both considered it to be contrary to the interests and ethos of the organisation.
The Law
[52]The law relating to unfair dismissal is set out in the ERA. Section 98(1) states: “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 -(a) the reason (or if more than one, the principal reason) for the dismissal, and(b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.[53]Section 98(2) sets out that a reason falls within this subsection if (inter alia) it - (b) relates to the conduct of the employee[54]Section 98(4) states: [Where] the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) -(a) depends on whether in the circumstances (including the size and administrative resources of the employer's 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.[55]This determination includes a consideration of the procedure carried out prior to the dismissal and an assessment as to whether or not that procedure was fair.[56]In circumstances where the reason for dismissal is conduct in terms of Section 98(2)(b), what has to be assessed is whether the employer acted reasonably in treating the misconduct that he believed to have taken place as a reason for dismissal.[57]British Home Stores v Burchell [1978] IRLR 379, sets out the questions to be addressed by the Tribunal when considering reasonableness as follows: i. whether the respondent genuinely believed the individual to be guilty of misconduct; ii. whether the respondent had reasonable grounds for believing the individual was guilty of that misconduct; and iii. whether, when it formed that belief on those grounds, it had carried out as much investigation as was reasonable in the circumstances.[58]Tribunals must not substitute their own view for the view of the employer (Sainsbury’s Supermarkets Ltd v Hitt [2003] IRLR 23 and London Ambulance Service NHS Trust v Small [2009] IRLR 563) and must not consider an employer to have acted unreasonably merely because the Tribunal would not have acted in the same way.[59]Following Iceland Frozen Foods Ltd v Jones 1983 ICR 17 the Tribunal should consider the “band of reasonable responses” to a situation and consider whether the Respondent’s decision to dismiss, including any procedure prior to the dismissal, falls within the band of reasonable responses for an employer to make. The importance of the band of reasonable responses was emphasised in Post Office v Foley [2000] IRLR 827. Submissions[60]The evidence having concluded towards the end of the third day fixed for the Hearing, parties agreed to provide written submissions. Both did so within 14 days and thereafter provided supplementary submissions in response to those of the other.[61]To summarise these, for the Respondent first of all, it was submitted that the witnesses of the Respondent were credible and reliable and in areas of conflict, the evidence of the Respondent’s witnesses should be preferred. Ms Miller gave examples of contradictions in the evidence of the Claimant and highlighted matters raised by the Claimant in his evidence which were not put to the Respondent’s witnesses.[62]Having regard to the statutory tests, Ms Miller submitted that conduct was the reason for dismissal - specifically that the Claimant sought to obtain personal financial gain from a partner organisation by offering to sell them contact details of companies that he had been asked by his line manager to refer to a different third party provider.[63]She went on to invite the Tribunal to find that the dismissal was fair in accordance with Section 98(4) of the ERA. She referred to the relative small size of the Respondent and its resources.[64]Having regard to the Burchell test, Ms Miller submitted that the conduct which resulted in the dismissal was not in dispute. Against that background, she submitted that the level of investigation was proportionate in the circumstances. She highlighted that the Claimant at no point suggested that the investigation was in any way unreasonable or that other investigations should have been conducted.[65]She submitted that the Respondent had a genuine belief with reasonable grounds for the Claimant’s guilt and that that state of affairs led to the decision to dismiss. Having regard to the issue of the Claimant’s earlier outside activities, she sought to distinguish those from those which led to the dismissal in that they were entirely unrelated to the work of the Respondent, did not involve the selling of work which he had done for the Respondent and were not contrary to the instructions of his line manager.[66]Having regard to the general fairness, she outlined in some detail the efforts taken by the Respondent to comply with a fair process.[67]In terms of the Respondent’s failure to comply with a contractual disciplinary process, Ms Miller submitted that compliance with the disciplinary policy was itself a fair procedure. She went on to submit that if there was a breach in not applying the contractual procedure, the breach was affirmed by the Claimant given his engagement with the process without complaint. She referred to Westminster City Council v Cabaj 1996 ICR 960 where the Court of Appeal stated that although employers should follow agreed procedures, a failure to do so would not necessarily mean that a dismissal is unfair. The question for the Tribunal is still whether in all the circumstances the employer acted reasonably.[68]In terms of sanction, Ms Miller submitted that the decision fell within the range of reasonable responses and reminded the Tribunal that it is not its place to ask whether a lesser sanction would have been reasonable but whether or not the dismissal was reasonable (British Leyland UK Limited v Swift [1981] IRLR 98. She went on to submit that the Claimant’s conduct amounted to gross misconduct justifying dismissal in all of the circumstances.[69]For the Claimant, Ms Mohammed invited the Tribunal to make a range of findings in fact. She challenged what she saw as insufficient investigation and the absence of the further investigation which was said would take place following the meeting between the Claimant and Ms Nimmo on 2 October 2020.[70]She pointed to what she considered were inconsistencies between the allegations as they evolved during the process. In particular, she referred to the absence of any reputational damage which was a factor considered by the Respondent. She submitted that the Burchell test had not been satisfied and that dismissal was not within the band of reasonable responses. She pointed to what she submitted was confusion about what was acceptable and what was not and submitted that dismissal was a disproportionate sanction.[71]Having regard to the failure to apply the contractual disciplinary procedure, Ms Mohammed submitted that the decision was procedurally unfair.[72]She submitted that the decision was predetermined and that there was no genuine belief in the misconduct in question.[73]She submitted that if the dismissal was truly for a breach of trust, this ought to have been characterised as a dismissal for some other substantial reason and not conduct.[74]Ms Mohammed went on to submit that if the dismissal was by way of conduct, it was not within the range of reasonable responses.[75]Both parties made submissions on compensation.[76]The Tribunal first considered the reason for the dismissal. It had no hesitation in accepting that the reason for dismissal was the Claimant’s conduct – a potentially fair reason under Section 98(2)(b) of the ERA. As noted above, the Tribunal rejected the suggestion that Mr Currie had an ulterior motive.[77]Whilst in her submissions, the Claimant’s solicitor sought to advance some proposition that the real reason for the dismissal may have been some other substantial reason, this was not part of the case as pled and was not borne out by the evidence.[78]Although the Claimant criticised what he saw as a shift in the reason for dismissal over the course of the disciplinary process, the fundamental reason never changed. It related to the Claimant seeking personal financial gain for transferring employer contacts which he had obtained in the course of his employment with the Respondent, without approval and contrary to the instructions of the Respondent.[79]The Tribunal then went on to consider whether the dismissal was fair or unfair. It had regard to the fact that the Respondent is a small organisation with limited administrative resources.[80]Considering the various limbs of the Burchell test, the Tribunal was satisfied that the Respondent had a genuine belief that the Claimant had committed an act of misconduct. It is pertinent that the Claimant did not dispute the conduct in question at any time.[81]As such, in the opinion of the Tribunal the Respondent had reasonable grounds for the belief. The information provided to the Respondent from the Wise Group was clear and unchallenged.[82]In terms of the investigation conducted by the Respondent, whilst there had been an indication at an earlier stage that further investigations would take place, this did not happen. The Tribunal was satisfied, however, that given the admitted facts and the relatively straightforward nature of the issue, the scope of the investigation was reasonable. The Claimant did not identify any other investigations which ought to have taken place or which might have led to a different factual matrix.[83]In terms of the procedure followed, the Tribunal noted that the Respondent had failed to follow its contractual procedure. The procedure adopted was wholly in compliance with the ACAS Code of Practice. The question for the Tribunal was whether by virtue of the failure to follow the contractual process, the dismissal was procedurally unfair.[84]On this point, the Respondent accepted the submissions of the Claimant’s solicitor, both in terms of the Claimant’s affirmation of the breach by participating in the process without complaint and, in any event, being satisfied that there was no evidence that applying the contractual policy would have led to any different conclusion or afforded extra protection.[85]Having said that, there may be cases where that is not the case and the Respondent is reminded to have regard to contractual terms in embarking upon processes of this nature with employees.[86]The Tribunal went on to consider whether the decision to dismiss fell within the band of reasonable responses. Whilst many employers may have taken a different approach, particularly having regard to the Claimant’s obvious acceptance of fault and contrition at the disciplinary hearing stage, the Tribunal was unable to conclude that no reasonable employer would have acted in the way that the Respondent chose to do. It is clear that the Claimant himself, at the disciplinary hearing stage at least, accepted that his conduct warranted some warning. Having regard to the evidence of Mr Currie, it was considered extremely serious for the Respondent, as a not for profit organisation funded by the Scottish Government, to have an employee, using the Respondent’s systems, seek personal payments from a sister organisation. The Tribunal also accepted that the sequence of events may have given rise to reputational damage. Dismissal is, accordingly, found to fall within the band of reasonable responses open to a reasonable employer.[87]The Claimant’s approach at the appeal stage may not have assisted his case. He moved from a position of apology and contrition to one of challenging procedures and retreating from positions previously advanced by him. Considering the issue of conflict between the Respondent’s witnesses at the appeal stage, even taking Ms McCutcheon’s account at its highest, the Tribunal was not persuaded by the argument that the Claimant could assume approval for the activities which gave rise to his dismissal from any deemed approval he felt for earlier outside activities. The former were clearly part of his work for the Respondent, the latter were not.[88]Having reached the conclusion that the Claimant had committed an act of gross misconduct, the Respondent was entitled to dismiss the Claimant without notice. The Tribunal accepted Mr Currie’s account as to why notice was in fact paid as a goodwill gesture.[89]For these reasons, the Tribunal concluded that the Respondent acted reasonably in treating the Claimant’s conduct as a sufficient reason for dismissal. The claim of unfair dismissal is, accordingly, dismissed.[90]The Tribunal would like to thank the parties’ solicitors for their assistance in the case and for their helpful written submissions.