Ms L Daisley v Branchton Community Centre Association: 4102859/2019

EMPLOYMENT TRIBUNALS (SCOTLAND)

Case No 4102859/2019

Between

Ms Lorraine DaisleyClaimant

Branchton Community Centre AssociationRespondent

Before

Employment Judge L Wiseman

Date 18 February 2026

JUDGMENT

The tribunal decided:-(i) to dismiss the claim of unfair dismissal and

(ii) to dismiss the claim in respect of the payment of notice.

REASONS

[1]The claimant presented a claim to the Employment Tribunal on the 9 March 2019 alleging she had been unfairly dismissed and that there should have been a payment of notice.

[2]The respondent entered a response in which it admitted the claimant had been dismissed for reasons of gross misconduct, but denying the dismissal had been unfair.

[3]The case was sisted for a lengthy period of time to allow for criminal investigations to be exhausted.

[4]The tribunal heard evidence from Mr William Wilson, Centre Manager; Mr William Rice, Interim Service Manager with Inverclyde Council, who carried out the investigation and Ms Michelle McIlroy, who heard the appeal. The tribunal also heard evidence from the claimant.

[5]Ms Alison Haughey, who took the decision to dismiss, was unable to attend the tribunal because she was not medically fit to give evidence. Ms McQuade advised the tribunal that the respondent’s solicitor had received confirmation from Ms Haughey’s doctor, on soul and conscience, that she was not fit, in any capacity, to give evidence.

[6]The tribunal was also referred to a jointly produced folder of documents. The tribunal, on the basis of the evidence before it, made the following material findings of fact.

Findings of fact

[7]The respondent is a charity operating within its local area to provide a range of activities to combat isolation and poverty. There is also a café and shop and garden.

[8]The respondent has a Board of Trustees and employs approximately 18 members of staff, a small number of whom are full time.

[9]The respondent receives annual funding from Inverclyde Council which is used to pay towards staff costs. The respondent also raises money from activities and hall lets.

[10]The claimant commenced employment with the respondent on the 1 March 2001. The claimant was employed as an Administrator and was responsible for running the office and the finances. Initially the finances involved mostly sending out invoices and paying bills, but as time went on, the claimant undertook an introduction to book-keeping course and became responsible for the finances, that is, income/expenditure, petty cash, the money in the safe and banking.

[11]The claimant reported to the Centre Manager, and, in 2014, Mr William Wilson took up that post.

[12]The respondent, at the time of Mr Wilson’s appointment, operated two bank accounts (one was a main account and one was a trading account) and there was also an Over – 55s account. There was a safe in the Centre where takings from the café and other activities would be kept up to a maximum of £4000, when it would be banked. There was also petty cash of up to £250. The respondent did not at that time have a bank card and the cheque book was rarely used.

[13]Mr Wilson did not have access to the bank accounts until 2018 because there were issues with authorised signatories.

[14]Mr Wilson considered the systems in place were good and his impression of the claimant was that she was “on the ball”.

[15]The respondent has an external book-keeper who prepares annual accounts for OSCR and Companies House. The accounts of the respondent used to be audited annually by Inverclyde Council, but this ceased in 2018.

[16]Inverclyde Council received a direct request from its Education and Communities management team and three separate whistleblowing complaints raising allegations of financial irregularities at the respondent. Inverclyde Council decided to carry out an Internal Audit Investigation into the allegations of financial irregularities at the respondent in September 2018. A copy of the Audit report was produced at page 46.

[17]The internal audit was undertaken by the corporate fraud team, who conducted interviews with the claimant and Mr Wilson to confirm that controls and procedures were being followed and to highlight where controls were weak. The team also undertook a count of income and petty cash held on site on the 16 March 2018.

[18]The report set out a number of discrepancies which had been found, together with details of the explanation provided by the claimant and/or the Centre Manager. The report also noted a follow-up of initial findings. The report concluded that the investigation had identified a number of transactional discrepancies, some of which had not been resolved. The recommendation was that the outstanding discrepancies were fully investigated and action taken to recover the monies.

[19]An Updated Audit Report was produced on the 12 October 2018 (page 146). The report noted certain matters had been followed up, one issue had been resolved but other matters still required an explanation from the claimant (page 150). The conclusion in the report was that “there is prima facie evidence that money is missing from the Safe …. This is confirmed by the reconciliations performed by the Accountant which state that the end of November 2017 cash balance in the safe should have been £1975.80 and the end of March 2018 cash balance in the safe should have been £2484.79. However the opening balance on 3 April 2018 was recorded on the cash sheet as £140.96 which was signed off by the Office Administrator and the Centre Manager. Therefore there is a sum of cash amounting to £2343.83 which is missing from the safe. The Centre Manager confirmed that cash is not held in any other place and was not able to provide an explanation for the discrepancy. An explanation requires to be obtained from the Office Administrator”.

[20]The second matter related to the payment of £1320 to the over 55s group and noted an explanation was required for the circumstances in which a further subsidy of £1000 was paid to the group.

[21]The claimant was advised by letter of the 20 September 2018 (page 52) that she was suspended on full pay whilst an investigation into the discrepancies was carried out.

[22]Mr William Rice, who at the time was employed as a Team Leader, Community Safety, with Inverclyde Council, was asked to undertake a disciplinary investigation in respect of the claimant, following the audit. Mr Rice was provided with a copy of the internal audit report (page 46) and the update report dated 12 October 2018 (page 146). Mr Rice interviewed the claimant twice and Mr Wilson once and produced an Investigatory Report (page 123).

[23]Mr Rice met with the claimant on the 3 October 2018 to present the allegations and gather information from the claimant’s responses. The claimant was given an opportunity to present a written response, and she did so (page 140 and page154). The claimant also provided a written response in respect of each allegation and provided any supporting documentation (pages 53 – allegation 1; page 63 – allegation 2; page 76 – allegation 3; page 85 – allegation 4 and page 93 – allegation 5). The second meeting was an opportunity to discuss the information provided.

[24]The Investigatory Report set out details of the eight allegations against the claimant and also set out details of the information obtained from the claimant, details of information received from Mr Wilson, an analysis of all of the information and conclusions and recommendations. The allegations were:-  Allegation 1 – online withdrawal of £500 with the payment being made direct from one of the respondent’s bank accounts to the claimant’s personal bank account with the reason for this being to top up petty cash. Mr Rice noted the internal audit had been unable to trace this amount to income or petty cash meaning the £500 was outstanding. It was further confirmed that there was £1974.70 in the safe at the end of November and therefore there would not have been any need to have a payment paid to the claimant’s personal bank account to cover petty cash expenditure. The claimant’s position was that all cash within the Centre had required to be banked to meet wage payments. Subsequently £500 had been required to reimburse petty cash. This had been paid into her personal account because there were not sufficient authorised signatories on the trading account to make cash withdrawals. Mr Wilson had approved the transaction. Mr Rice concluded that the recording of petty cash was shown as £500 however the claimant confirmed she withdrew cash from her bank account on two occasions: that is, a £300 and a £200 withdrawal. The entry in petty cash showed the entry as £500 and was pre-dated from the actual physical transfer of the cash payments. He concluded no reasonable explanation had been given for failing to record the credit to petty cash as two separate entries and no reasonable explanation was offered for the pre-dating of the £500 credit.  Allegation 2 – annual pensioners Christmas dinner. The payment from the Health and Social Care Partnership for this event was late and so the claimant transferred £1320 from the respondent’s main trading account to her personal bank account (on the 12 December 2017) in order to cater for the event. The Health and Social Care Partnership paid funds for the event on the 19 December 2017, but as at the date of the audit in March 2018, the money had not been repaid to the respondent’s trading account. The claimant’s position was that she had had authority from Mr Wilson to transfer the funds from the respondent’s account for this event. She explained the failure to repay the money as an administrative error compounded by a heavy workload and family illness followed by a family bereavement.  Allegation 3 related to shopping for the Branchton Community Centre’s café. Mr Rice accepted the claimant’s explanation for this and this allegation was not pursued.  Allegation 4 – staff collections. There was a practice of having a staff collection to buy a birthday present for staff members. The audit identified that in 2017 there was an envelope containing money from the staff collection, but a review of petty cash expenditure for April 2017 showed that the purchase of the present was reimbursed through petty cash and not using the money collected. The claimant’s position was that the Centre Manager had approved the purchase of 18th birthday gifts from petty cash due to late contributions from staff. The claimant’s position was that the subsequent cash collection was banked with all other Centre income.  Allegation 5 – since the internal audit in March 2018, further discrepancies had been found within the petty cash records. There were many examples but only four were set out:(i) in June 2016, £106.95 was used to purchase food and other items which were not club or café items;

(ii) in October 2016, £139.04 was used to purchase non-centre items. A hoover was purchased, returned and the refund paid directly into the claimant’s bank account. There was no evidence the refund had been returned to the respondent’s bank account;

(iii) in March 2017, £78.37 was paid for a 21st birthday present rather than the money from the staff collection and

(iv) in December 2017, a Booker’s receipt for £56.78 was paid for non-café items which were purchased when the Centre was closed for 2 weeks over the festive period. The claimant’s position was that non-café items were purchased for a Healthy Eating Event and a Family Fun Day. The claimant admitted the items purchased from Forge market were purchased for the Centre without authority, but the Centre Manager had approved the reimbursement from petty cash without receipts. The claimant accepted the hoover had been returned and the refund credited to her personal account, and no reimbursement had been made to the respondent’s bank account. The claimant’s explanation for this was that she had forgotten to return the refunded money.  Allegation 6 – in October 2018, it was identified that a cheque from the Over 55s bank account for the amount of £1320 was presented to the respondent’s trading account on the 4 April 2018. The cheque was returned because there were insufficient funds in the account and the over 55s group incurred a £40 bank charge. On the 20 April 2018 the sum of £1000 was paid into the over 55s bank account from the respondent’s trading account. On or about the 30 April 2018 the sum of £1320 was repaid from the over 55s account to the respondent’s trading account. The claimant provided an explanation for the insufficient funds in the over 55s bank account and advised that the payment of £1000 was part of an annual grant. The claimant paid the sum of £1000 into the over 55s bank account so they could repay the sum of £1320 in order to “provide clarity in the accounting process”. The audit noted the Chair of the Board of Trustees had no knowledge of the payment and the Centre Manager was unable to confirm the level of funding/grant.  Allegation 7 – related to discrepancies in the cash balance held in the safe as at March 2018. A significant shortfall had been identified between the closing balance and opening balance of cash held within the safe. A shortfall of £2343.83 was unaccounted for. The claimant’s position was that she had been off for most of January and February and had returned in March 2018. She and Mr Wilson had undertaken a manual count of the cash held within the safe and, due to the large amount and the bulk of the coinage, the claimant had not wanted to transport the money to the bank. So, the amount was divided into two (uneven amounts) and put into two “bag for life” type carrier bags. Mr Wilson had taken one of the bags to the bank immediately and a pay – in slip confirmed £2756 had been paid in. The claimant was unsure what had happened to the second bag of money. The claimant was unable to explain why the sum of £140.96 had been reserved for petty cash. Mr Rice considered no reasonable explanation was offered by the claimant regarding the whereabouts of the second bag of money.  Allegation 8 – discrepancies in the cash balance held within the safe at November 2017. The claimant confirmed that due to a low balance on the trading account, all cash within the Centre had been paid into the bank. This resulted in the need to withdraw £500 from the other bank account via the claimant’s personal account, for credit to the petty cash (allegation 1). There was a statement from the Accountant that the cash balance held within the safe at the end of November was £1975.70, which conflicted with the claimant’s statement that all cash had been paid in. Mr Rice analysed the claimant’s explanation but concluded no reasonable explanation had been given for the discrepancy between the Accountant’s month end position and her position that there was no cash within the Centre.

[25]Mr Rice noted in the report that he had interviewed Mr Wilson and he recorded that Mr Wilson, in respect of allegation 1, admitted authorising the transfer of £500 to the claimant’s personal account. This was on the basis he had been advised by the claimant that the cash within both the petty cash and cash in box was low. Mr Wilson confirmed that the balances were not regularly checked and that he was unable to independently check balances without involving the claimant.

[26]Mr Wilson admitted authorising the transfer of £1320 to the claimant’s personal account (allegation 2) on the basis he had been advised by the claimant that the late payment of £1320 from the Health and Social Care Partnership would be repaid by the over 55s group once it had been received.

[27]Mr Wilson had been unable to explain why petty cash was used to purchase presents for staff: it was not the usual practice and had not been authorised by him (allegations 4 and 5).

[28]Mr Wilson could not shed any light on allegations 6 and 7 other than to confirm that cash was not held in place other than petty cash and the safe.

[29]Mr Rice acknowledged the claimant had given an adequate explanation in respect of allegation 3 and confirmed that would not be taken forward. He acknowledged the Centre Manager had authorised the transfer of money into the claimant’s personal account in respect of allegations 1 and 2, but considered this was authorised on the basis of the information provided to him by the claimant. Mr Wilson faced his own disciplinary procedure regarding his part in all of these events. Mr Rice also acknowledged the claimant had admitted allegations 1, 2 and 5 and explained she had made an error; and, he considered she had failed to give an adequate explanation in relation to allegations1 and 7.

[30]The conclusions of the investigation (page 134) were that the admitted allegations raised serious concern over the ability of the claimant to act as a competent Office Administrator. Further, “When considered in parallel there is serious concern over repeated evidence of lax financial procedures. The allegations could constitute fraudulent activity and should be considered at a disciplinary hearing”. Mr Rice further recommended reporting the matter to the Police.

[31]Mr Rice’s recommendation was that all allegations, with the exception of allegation 3, proceed to disciplinary hearing and that the duties and responsibilities of the Centre Manager were reviewed and training provided for areas of lack of financial control.

[32]The claimant was invited to attend a disciplinary hearing, which took place on the 8 November 2018. The disciplining officer was Ms Alison Haughey, who was a committee member on the Board of Trustees. The claimant was accompanied by her sister. A minute of the disciplinary hearing was produced at page 160.

[33]The claimant had been provided with copies of the audit and investigatory report and all supporting documentation prior to the hearing.

[34]The format of the disciplinary hearing was that Mr Rice was called upon to present the management case based on the investigation report. Mr Rice summarised the allegations and information contained within the reports. The claimant had an opportunity to question Mr Rice, but asked no questions of him.

[35]The claimant was given an opportunity to make a presentation and stated she felt it was too convenient to place the blame on her shoulders. The money which had gone missing in April 2018 had been 5 days after burying her father. The claimant asserted the lack of procedures was not her responsibility and was down to the Centre Manager. The Centre Manager had brought in a new accountant who had put new procedures in place which she had struggled with. The claimant accepted she had made mistakes but she had owned up to those mistakes straight away.

[36]Ms Haughey questioned the claimant about the fact the time periods covered by the audit extended beyond the period when her father had been ill. The claimant was also questioned about the new procedures which had been introduced and confirmed there had not been any substantive changes, but there had been changes to certain documents produced in excel format.

[37]The claimant was also asked about the use of her personal account to buy items and she explained about the Bank losing the mandates regarding the number of authorised signatories on several occasions and that it had taken years to resolve this.

[38]The claimant accepted that given her 18 years’ experience it was not unreasonable to expect that she would be accurate with the book-keeping. The claimant had no explanation for the repeated pattern of inaccurate records beyond the fact she had got into the pattern of doing her own thing. The claimant was also asked a number of questions regarding the allegations.

[39]Ms Haughey adjourned to consider the case. The hearing was subsequently reconvened and Ms Haughey advised the claimant that “after reviewing all the evidence put forward at the hearing, in conjunction with the investigative report, and listening to the explanations and mitigation put forward the main issues is trust and confidence going forward. [Ms Haughey] believed the actions constituted gross misconduct.” Ms Haughey advised the claimant that her decision was that her employment was terminated on the grounds of gross misconduct, with immediate effect.

[40]The decision to dismiss was confirmed in a letter dated 23 November 2018 (page 165). The letter confirmed the claimant’s employment was terminated for reasons of gross misconduct with immediate effect from the 8 November 2018. The reasons for the dismissal were the allegations against the claimant. The letter went on to say Ms Haughey had, in coming to her decision, given consideration to all of the information presented, including representations and mitigation offered by the claimant and her length of service.

[41]The letter went on to say that the gross misconduct outlined above (that is, the allegations) undermined the mutual trust and confidence that is required in the relationship between employer and employee and, in the opinion of the Branchton Community Centre, this demonstrated unsuitability for continued employment.

[42]The claimant exercised the right to appeal against the decision to dismiss (page 167). The claimant, in that letter, stated there was a lack of proof regarding any of the allegations (except the one she admitted).

[43]The claimant was offered dates for an appeal hearing on four occasions, but these dates had to be postponed due to the claimant’s ill health. Ms McIlroy, who was to hear the claimant’s appeal, wrote to the claimant on the 19 August 2019 (page 168) confirming there had been no update on the claimant’s fitness to attend a hearing and in the circumstances the appeal hearing had been scheduled for the 30 August, and would not be postponed again. The letter made clear that if the claimant chose not to attend, the hearing would proceed in her absence.

[44]Ms McIlroy was, at the time, Chairperson of the Board of Trustees and had held that position for many years. Ms McIlroy was provided with a copy of an evidence pack prior to the appeal hearing.

[45]The day prior to the appeal hearing, Mr Jim McCourt, Inverclyde Advice and Employment Rights Centre emailed on behalf of the claimant with further information to be considered at the appeal hearing (page 173, being a hand written statement by the claimant).

[46]Ms McIlroy was advised that in light of the fact the claimant would not be present at the appeal hearing, she should proceed to deal with the matter based on the written submissions only.

[47]Ms McIlroy, in considering the claimant’s appeal, had regard only to the documentation provided which included the internal audit reports; the investigation report; the claimant’s written responses to each allegation; the minute of the disciplinary hearing and the statement provided by the claimant. Ms McIlroy reviewed all of the documentation and considered the evidence demonstrated theft (for example, the purchase of personal items with no evidence of reimbursement and a pattern of behaviour) and a serious breach of trust and confidence.

[48]Ms McIlroy had regard to the fact the claimant had had a period of absence when her father had been ill and subsequently passed away, but considered this did not explain issues which had occurred outwith that timespan.

[49]Ms McIlroy wrote to the claimant on the 3 September 2019 (page 172) confirming her decision not to uphold the appeal.

[50]The claimant has not been fit to work since dismissal. She is in receipt of disability benefit and PIP. The claimant has anxiety, depression, fibromyalgia and arthritis in her knees and back. Credibility and notes on the evidence

[51]The tribunal found the respondent’s witnesses to be both credible and reliable. It was an unfortunate by-product of the length of the sist in this case, that people’s memories of events in 2018 were hazy: it was fortunate the documentation was clear and detailed.

[52]Mr Wilson, in his evidence, did not add much to what he had told the team doing the internal audit and Mr Rice who carried out the investigation. He clearly had great regard for the fact the claimant had significant length of service and experience in her job before he took on the Centre Manager role and he formed the impression she was “very organised, on the ball, had good systems and was in control”. He had let the claimant continue with the systems she had established.

[53]There was no dispute regarding the fact the claimant reported to Mr Wilson as her line manager. The tribunal formed the impression that Mr Wilson left the finances to the claimant and intervened only when asked to authorise certain transactions or to do the cash count. There was no dispute regarding the fact he had authorised certain transactions in respect of payments into the claimant’s personal bank account, but he had not authorised what occurred subsequently in respect of late reimbursement or nonreimbursement of the money to the respondent’s bank account.

[54]Mr Wilson was subject to his own disciplinary process and, with the exception of this fact, the tribunal did not hear anything further about this.

[55]Mr Rice was a credible and reliable witness and he had a very good understanding and recall of the internal audit and the investigation he had carried out. He gave his evidence in a straightforward manner and was able to explain why the fact Mr Wilson may have authorised a transaction was not sufficient to explain fully what had happened, or why the claimant’s acceptance that a mistake had been made did not explain why money had not been reimbursed to the respondent’s account.

[56]Mr Rice also impressed as a witness who gave the claimant every opportunity to explain what had happened; took time to demonstrate to the claimant why her explanation was not supported by the documentation and to allow her further opportunity to offer an explanation. His investigatory report was detailed and contained a considered analysis of the evidence, the explanations offered and his conclusions.

[57]Ms McIlroy was also a credible and reliable witness and it was clear from her evidence that she had carefully considered all of the documentary evidence before reaching her decision. Ms McIlroy was sympathetic to the circumstances of the claimant regarding her father’s period of ill health and his subsequent death and acknowledged those circumstances may well have explained errors made during that time. However, Ms McIlroy was very clear that those circumstances could not explain a pattern of behaviour that occurred prior to that time period.

[58]The claimant was hampered in giving her evidence by the fact she could not remember details: her evidence in chief essentially repeated the written explanations she had given at the time in respect of each allegation. The claimant accepted the respondent had put her through a basic beginners book-keeping course and that she could seek support from the external bookkeeper and Mr Wilson. The claimant accepted the respondent had placed a great deal of trust in her. The claimant also accepted that forgetting to pay money back to the respondent could look like theft. Respondent’s submissions

[59]Ms McQuade provided a written submission which she spoke to and also addressed the submissions made by the claimant. Ms McQuade’s primary position was that the claim should be dismissed.

[60]Ms McQuade noted the claimant placed significant reliance on the case of Salford NHS Foundation Trust v Roldan

2010 ICR 457

and submitted the facts of that case were completely different. The present case was not a case where the claimant and Mr Wilson had given competing accounts: he had largely supported the claimant except on the occasions where she said she had asked for permission and he disagreed.

[61]Ms McQuade submitted that for each allegation there was significant amount of evidence and in a number of the allegations the claimant accepted what was alleged but endeavoured to explain what had happened.

[62]Ms McQuade acknowledged that it was most unfortunate Ms Haughey had been unable to give evidence, but the tribunal could rely on the minute of the disciplinary hearing and the letter of dismissal. The claimant sought to argue that there was no explanation in the letter of dismissal why Ms Haughey had preferred the evidence of Mr Wilson to that of the claimant, but this was only relevant to allegation 4.

[63]Ms McQuade noted the claimant had accepted she made mistakes and described that as the understatement of the year in circumstances where mistakes had taken place over a significant period of time. Ms McQuade acknowledged the accounting systems were primitive, but not lax and submitted support had been available for the claimant if needed.

[64]The claimant’s conduct had been dishonest and fraudulent and the respondent, having carried out a reasonable investigation, had reasonable grounds upon which to sustain that belief. The decision to dismiss the claimant in the circumstances had been fair. Claimant’s submissions

[65]Mr McKinlay provided a written submission which he spoke to. Mr McKinlay challenged the reason for dismissal on the basis that in the absence of having heard from Ms Haughey, it was not possible to understand the reason for dismissal or whether the respondent had a genuine belief in that reason. In circumstances where the dismissal was predicated on preferring one piece of disputed evidence over another, a bare statement that a broad list of allegations brought to the disciplinary hearing are gross misconduct justifying dismissal without further explanation was insufficient to show genuine belief. Further, in the absence of a genuine belief in misconduct, the respondent cannot be said to have proven their reason for dismissal. Mr McKinlay invited the tribunal to find the respondent had failed to discharge their burden of proof.

[66]Mr McKinlay referred to the Roldan case (above) and submitted that in relation to allegations 4, 5 and 7 the claimant and Mr Wilson had given differing accounts and there was no evidence from the respondent to explain why one account was preferred to the other. The mere existence of allegations against the claimant was insufficient to show reasonable grounds for a belief. Mr McKinlay submitted that a conclusion was reached in the disciplinary hearing but it was not clear how, why or on what basis that conclusion was reached. The reasonableness of how those conclusions were reached, the reasonableness of the grounds on which belief was reached had not been shown in the evidence. The second limb of the Burchell test had not been satisfied and the claimant’s dismissal was accordingly unfair.

[67]Mr McKinlay further submitted the investigation had been insufficient because where the accounts of the claimant and Mr Wilson disagreed, there should have been further investigation.

[68]The claimant admitted she had made mistakes, but these mistakes had been genuine and were set against a background of significant personal difficulties. Mr Wilson had readily approved transactions. The respondent’s procedures were “lax” however that did not mean the claimant was guilty of gross misconduct. The lax procedures may have contributed to the claimant making mistakes and this was very different to the claimant having been dishonest.

[69]The appeal process had been flawed because it proceeded in the absence of the claimant and Ms McIlroy had confined herself to considering only the documents and she had not spoken to either Mr Wilson or Ms Haughey to gain a full understanding of the reason for dismissal.

[70]Mr McKinlay invited the tribunal to find the dismissal unfair and to make an award of compensation as set out in the schedule of loss. This should include an award for the payment of notice. Discussion and Decision

[71]The tribunal firstly had regard to the terms of section 94 and 98 Employment Rights Act. Section 94 sets out the right of an employee not to be unfairly dismissed. Section 98 provides that it is for the employer to show the reason (or principal reason) for the dismissal and, where the employer has done so, the determination of the question whether the dismissal is fair or unfair having regard to the reason shown by the employer 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 shall be determined in accordance with equity and the substantial merits of the case.

[72]The tribunal next had regard to the case of British Home Stores plc v Burchell

1978 IRLR 379

where it was said that:-  the employer must believe the employee guilty of misconduct;  the employer must have in mind reasonable grounds upon which to sustain that belief and  at the stage at which that belief was formed on those grounds, the employer had carried out as much investigation into the matter as was reasonable in the circumstances.

[73]The tribunal, in considering the fairness of the dismissal in this case, started by considering the reason for the dismissal. The tribunal noted the respondent, in its Response, admitted dismissing the claimant for reasons of gross misconduct. The gross misconduct comprised two elements and they were theft and fraud and a serious breach of trust and confidence.

[74]The claimant, in submissions, referred to the cases of Abernethy v Mott Hay and Anderson

1974 ICR 323

where it was said that a reason for the dismissal of an employee is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee. In Beat v Croyden Health Services NHS Trust

2017 IRLR 748

it was said that the reason for a dismissal connotes the factor or factors operating on the mind of the decision-maker which caused him to take that decision. Mr McKinlay argued that in the absence of hearing from Ms Haughey there was no clarity regarding how she came to the conclusion which she did.

[75]The tribunal accepted that it would have been preferable to have heard from Ms Haughey, but considered that in this case the supporting documentation and the claimant’s position were very clear. The internal audit was clearly concerned with financial irregularities and seeking an explanation from the claimant for what had happened. The investigation did likewise, with the allegations set out, the supporting documents attached and the claimant again being asked to explain what had happened to various funds.

[76]The tribunal accepted the letter of suspension, the invite to the disciplinary hearing and the letter of outcome of the disciplinary hearing did not refer to “theft and fraud” but the content of all of the documents clearly indicated this was at the heart of the matter. The tribunal considered this was clearly understood by the claimant because she argued that Mr Wilson had authorised certain transactions or that she had made mistakes but had not been dishonest.

[77]The tribunal noted the claimant sought to argue that she had not done what was alleged and in doing so the claimant was arguing that she had not stolen, or intended to steal, the money referred to. This was the essence of her defence: she admitted making mistakes but argued she had not done so intentionally or dishonestly. The claimant did not suggest there had been any other reason for her dismissal.

[78]The tribunal concluded, having had regard to the above points (and the points set out below in respect of the investigation), that it was clear that the reason for the dismissal of the claimant was gross misconduct involving theft and fraud and a serious breach of trust and confidence.

[79]The tribunal next considered the investigation carried out by the respondent and whether they had carried out as much investigation as was reasonable in the circumstances of this case. There was no dispute in this case that Inverclyde Council decided to carry out an internal audit following upon concerns having been expressed about financial irregularities at the respondent. The audit was carried out by the Council’s Corporate Fraud Team and the Summary Reports were produced by the Chief Internal Auditor. The report identified a number of discrepancies and recommended they were fully investigated. The internal audit reports were detailed regarding monies in and out and receipts or records of transfers. The reports also very clearly identified what it was the claimant had to explain.

[80]The investigation in this case was carried out by Mr William Rice, an employee of Inverclyde Council. The claimant took no issue with the fact Mr Rice worked for Inverclyde Council rather than the respondent: she considered him independent.

[81]The respondent is required to carry out as much investigation into the matter as is reasonable in the circumstances. Mr Rice interviewed the claimant twice and Mr Wilson and he reviewed all of the relevant documents produced by the respondent and the claimant. Mr McKinlay submitted the investigation carried out had been “insufficient” because it had been based only on the claimant and Mr Wilson and had not sought to resolve any dispute between their evidence. This was not a submission the tribunal could accept for a number of reasons. First, there was no suggestion during either the audit or the investigation or the disciplinary hearing and appeal that others should have been spoken to. Second, there was no suggestion who those “others” may have been or what information they could have provided: this was particularly so in circumstances where there was no dispute regarding the fact that it was the claimant who purchased everything required for the Centre and its activities. There was no suggestion at any time that anyone else (other than Mr Wilson) handled cash or was responsible for doing so. Third, Mr Rice’s role was to carry out an investigation and gather the facts and information. It was not his role to determine any conflict in the evidence or to attach blame. This was particularly so in circumstances where Mr Wilson faced his own disciplinary process.

[82]The investigation carried out by Mr Rice was thorough and detailed and the claimant accepted in cross examination that she had had the opportunity to put forward any information she wanted. The claimant had an opportunity to make a detailed written response to each allegation which was considered by Mr Rice.

[83]Mr Rice, in his Investigatory Report, very clearly analysed the information he had gathered and explained the conclusions he had reached. The tribunal was satisfied that everything put forward by the claimant was investigated, considered and analysed by Mr Rice. The investigation was incredibly thorough. The tribunal asked itself whether the investigation carried out fell within the band of reasonable investigations which a reasonable employer might have conduct, and the tribunal was satisfied, having had regard to the points set out above, that as much investigation had been carried out as was reasonable in the circumstances.

[84]The tribunal must next consider whether the respondent had reasonable grounds upon which to sustain their belief that the claimant was guilty of the alleged misconduct. Mr McKinlay in his submissions was critical of the respondent and argued that in the absence of Ms Haughey there could be no understanding of why she held the belief that the claimant was guilty of the allegations and it could not be demonstrated that any such belief was held on reasonable grounds. Mr McKinlay summarised that Mr Wilson had “approved the claimant’s actions” in respect of allegation 1 and had approved the initial transfer in allegation 2. He also noted that the repayment issue was promptly resolved once it had been identified and was explained as a genuine mistake. In allegations 4 and 5 Mr Wilson and the claimant gave differing accounts and there was nothing to explain why Ms Haughey preferred one to the other. In allegation 6 the claimant had given a clear explanation of her actions and there was nothing to explain why this had not been accepted. In allegation 7 the claimant gave an explanation and confirmed her involvement had ended once the cash had been counted and put into bags. There was no explanation why Ms Haughey did not accept this or the claimant’s explanation for allegation 8.

[85]The tribunal considered this submission by firstly noting that the extent of the authority given by Mr Wilson was as set out in the relevant emails. In relation to allegation 1, the claimant, by email of the 1 December 2017 (page 54) asked Mr Wilson if she could transfer £500 from the FSF account to her own personal account so that she could lift it and pay it into petty cash. This request was made because the bank balance was so low the previous week that the claimant said she had paid in all the cash she had within the Centre. Mr Wilson responded to the email (page 55) by stating he confirmed she could transfer the money so that she could pay it into petty cash.

[86]The tribunal noted that the focus of allegation 1 was not on the fact the claimant had transferred money to her own account, but rather on the fact that internal audit had been unable to trace the payment of that money by the claimant into either “income” or “petty cash”. The amount was accordingly still outstanding. The Accountant had also confirmed that there was £1974.70 in the safe at the end of November, and therefore there would not appear to have been any need for a payment to have been made to the claimant’s personal account. These were the issues which the claimant had to explain.

[87]The second allegation related to the over 55s Christmas dinner. The claimant emailed Mr Wilson on the 11 December 2017 (page 66) to seek permission to transfer £1320 to her own account. She explained that the payment from the Council had been delayed and she needed to go shopping for the event which was being held later that week. Mr Wilson replied (page 67) confirming this was in order, but also stating he wanted to be shown details of how the money was spent.

[88]The focus of allegation 2 was not the fact money had been transferred to the claimant’s account, but rather the fact that money from the Council was paid into the over 55s bank account on the 19 December 2017, but at the time of the audit in March 2018, it had not been repaid to the respondent’s main trading account.

[89]The tribunal concluded that whilst there was no dispute regarding the fact Mr Wilson authorised the transfer of monies to the claimant’s account, he did not authorise the claimant’s subsequent actions/inactions and it was these matters which were the subject of the investigation. The tribunal accordingly considered that the fact Mr Wilson authorised the transfer of the monies on these two occasions, was not a factor relevant to what the claimant had subsequently done or omitted to do.

[90]The tribunal next considered the submission that the claimant and Mr Wilson gave differing accounts in respect of allegations 4 and 5 and there was no evidence to allow the tribunal to understand Ms Haughey’s thoughts regarding this matter. Allegation 4 concerned the buying of gifts for staff special birthdays. The claimant’s position was that on two occasions petty cash had been used for this and repaid once the collection of money from staff had been completed. Allegation 5 included an allegation that petty cash had been used to buy a 21st birthday gift due to late staff contributions. Mr Wilson could not explain why petty cash had been used to buy birthday gifts and stated that was not the usual procedure and had not been authorised by him. Mr Wilson also observed that a repayment to petty cash would have been highlighted in red on the petty cash book as a credit entry (similarly if there had been a credit to the cash in the safe) but he was not aware of any such entry. The outcome of the investigation was that these matters required further consideration at the disciplinary hearing.

[91]The tribunal acknowledged there were differing accounts by the claimant and Mr Wilson but did not consider this was an issue to be resolved in circumstances where the issue was not whether the claimant had permission to use petty cash, but rather whether the petty cash had been repaid. There was, unlike in allegations 1 and 2, no evidence of the claimant seeking and being given permission by Mr Wilson to use petty cash, and, more importantly, there was no evidence to support the claimant’s position that the petty cash had been paid back.

[92]The tribunal could not accept the claimant’s submission regarding this matter because it was not a case of accepting either the claimant or Mr Wilson’s version of events: it was a case of identifying what had happened to the money taken from petty cash and whether it had been repaid. This was a matter for the claimant to explain/evidence.

[93]The claimant next submitted that a clear explanation had been given for allegation 6 and there was nothing to explain why this had not been accepted. The tribunal noted there was no dispute regarding the fact the sum of £1000 had been paid into the Over 55s bank account and the claimant had explained that this was part of an annual grant. The follow up Audit Report (page 150) made clear that the payment of £1000 had been queried at a governance meeting on the 28 September 2018 and the Chair of the Management Committee had no knowledge of the transaction. The Centre Manager explained he had understood there was a long standing arrangement for the respondent to subsidise the over 55s group, however he could not explain the level of funding. A copy of the bank statement was obtained and the auditors noted the bank balance relating to the over 55s bank account on 29 March 2018 was £1257.80, which was not sufficient to repay the sum of £1320 owing to the respondent.

[94]The report went on to clarify that the over 55s bank account, having been credited with £1320 from the Council and having a balance of £1657.82 as at 2 January, there required to be an explanation why expenditure was incurred which meant the sum due to the respondent was not able to be paid. An explanation was required from the claimant for this.

[95]The tribunal could not accept the submission that the claimant had given a clear explanation because these matters were not clarified and, furthermore, the claimant could not explain why she had credited the over 55s account with £1000 in circumstances where they owed the respondent £1320.

[96]The final point made in submissions related to allegations 7 and 8 where it was said there was no explanation why the claimant’s version of events had not been accepted. The tribunal noted that these allegations related to the cash count carried out by the claimant and Mr Wilson at the end of March 2018. The cash, having been counted, was divided (unequally) and placed into two bag-for-life type bags. Mr Wilson took one to the bank immediately. The whereabouts of the other bag of cash was unknown. The claimant’s position was that she had “assumed” the Centre Manager had stored it in a locked cupboard. The Centre Manager confirmed that cash was not held in any other place.

[97]The tribunal acknowledged that on the face of it there was no explanation why the claimant’s version of events had not been accepted, but considered that the critical issue concerned a failure to adequately explain what had happened in circumstances where a large amount of cash was missing. The claimant could offer no explanation why the cash had been split unevenly, why only one bag of cash was taken to the bank immediately and could offer no explanation where the second bag of cash was. The tribunal considered that in the circumstances it could not accept that an explanation had been given by the claimant.

[98]The tribunal next had regard to the minutes of the disciplinary hearing. Mr Rice was noted as having presented the management case and in doing so he summarised the allegations and information gathered. He noted the claimant had admitted part of allegation 5 in relation to the purchase of a hoover using her personal Amazon account in October 2016. The hoover had been for the Centre but had been returned and a refund to the claimant’s account had been made, but no reimbursement had been made by the claimant to the respondent’s account. The claimant could offer no explanation for this other than to say she had forgotten.

[99]The tribunal noted, crucially, that the claimant had no questions to put to Mr Rice: she did not seek to challenge what had been said or the conclusions reached.

[100]The claimant, in her presentation, sought to argue that the lack of procedures was not down to her and she had admitted the mistakes she made. The tribunal noted that when questioned by Ms Haughey and Mr Rice, the claimant added nothing new to what had been said before.

[101]The tribunal concluded that in the absence of the claimant challenging the investigation and in the absence of her bringing any new information or explanation to the disciplinary hearing, the respondent had reasonable grounds, based on the internal audit and investigation, upon which to sustain their belief that the claimant was guilty of the allegations against her (theft and fraud) and that this supported a conclusion that the respondent had lost trust and confidence in her to carry out her role.

[102]The tribunal next considered the procedure followed by the respondent in reaching the decision to dismiss the claimant. The claimant sought in submissions to challenge the fairness of the dismissal because the appeal had proceeded in the absence of the claimant and Ms McIlroy had not spoken to Ms Haughey to understand the basis for her decision to dismiss.

[103]The tribunal noted there was no dispute regarding the fact the appeal hearing was fixed on four occasions (February, March, April and May) which had had to be postponed because of the claimant’s ill health. The respondent did not take issue with the fact of the claimant’s ill health but did note that there was nothing in the letter from the GP to suggest when the claimant may be fit to attend a hearing. The respondent waited until the end of August to proceed with the appeal hearing. The respondent wrote to the claimant on the 19 August to advise that the hearing would proceed on the 30 August and that it would proceed in her absence if she did not attend.

[104]The tribunal, in considering the reasonableness of the respondent’s actions, asked whether they fell within the band of reasonable responses which a reasonable employer might have adopted. The tribunal considered the respondent gave the claimant a very generous amount of time to attend, or get sufficiently fit to attend, an appeal hearing (February to August). The tribunal also noted the claimant was, at that time, receiving advice from Mr Jim MCourt, and therefore had assistance in preparing the grounds of appeal. The tribunal acknowledged, and Ms McIlroy confirmed, that it would have been preferable if she had been able to speak to the claimant face-to-face, however it was not possible in the circumstances.

[105]The tribunal concluded, having had regard to the above points regarding time allowed and representation, concluded that in the circumstances the actions of the respondent fell within the band of reasonable responses which a reasonable employer might have adopted.

[106]The tribunal next considered the way in which Ms McIlroy dealt with the appeal. The tribunal accepted Ms McIlroy had regard to all of the documents with which she had been provided, together with the claimant’s letter of appeal and statement. The claimant’s statement did not provide any new information but focussed on her having to get to grips with changes to procedures and the stress she had been under due to personal circumstances. The claimant acknowledged mistakes had been made but confirmed she had never intentionally taken money from the respondent.

[107]The claimant was critical of the appeal because Ms McIlroy did not interview Ms Haughey and therefore, it was said, she could not have understood the reason for Ms Haughey’s decision. The tribunal could not accept that submission in the circumstances of this case where the claimant had admitted some mistakes and was unable to provide an adequate explanation in respect of other allegations. The claimant essentially had nothing further to add to the explanation she had given at the investigation stage and Mr Rice provided a very careful analysis of why questions remained to be answered by the claimant notwithstanding what she had said.

[108]Ms McIlroy did give consideration to mitigation in circumstances where she knew the claimant had had a period where her father had been unwell and subsequently passed away. Ms McIlroy acknowledged those circumstances may have explained mistakes made at that time, however she considered it did not explain or mitigate mistakes made at an earlier time. This was a case where there was a repeated pattern of mistakes.

[109]The tribunal concluded that in the circumstances, the procedure followed by Ms McIlroy in dealing with the appeal was reasonable.

[110]The tribunal next had regard to the case of Iceland Frozen Foods Ltd v Jones

1982 IRLR 439

which confirmed that the tribunal must not substitute its own view of the matter for that of the employer, but must decide whether dismissal was within the range of reasonable responses open to a reasonable employer.

[111]The tribunal must ask whether the respondent’s decision to dismiss the claimant fell within the band or range of reasonable responses which a reasonable employer might have adopted. The tribunal concluded that having had regard to the audit and the investigation undertaken, the respondent had carried out as much investigation as was reasonable in the circumstances of this case and that the respondent had reasonable grounds, based on the investigation, to sustain their belief that the claimant was guilty of the allegations. The tribunal accepted the respondent (Ms Haughey) considered the nature of the allegations amounted to gross misconduct (theft and fraud) and further supported a loss of trust and confidence in the ability of the claimant to continue in the role. The tribunal was satisfied the respondent followed a fair procedure when dismissing the claimant. The tribunal decided, in all of those circumstances, that the respondent’s decision to dismiss the claimant was fair and reasonable.

[112]The claimant sought payment of notice. The tribunal dismissed this claim in circumstances where the claimant was dismissed for reasons of gross misconduct.

[113]The tribunal decided to dismiss the claim of unfair dismissal and to dismiss the claim in respect of the payment of notice.