Mr N Kirkland v DLSH Ltd: 4102867/2025
JUDGMENT
The claimant was unfairly dismissed by the respondent, the claimant contributed to his dismissal to the extent of 50% and the respondent is ordered to pay compensation in the sum of £5961.41 (FIVE THOUSAND NINE HUNDRED AND SIXTY-ONE POUNDS STERLING AND FORTY-ONE PENCE) net to the claimant. The Recoupment regulations apply to the compensatory award. The prescribed element is £4111.42 and the prescribed period is 27 April to 10 June 2025.REASONS
[1]The claimant presented a claim on 12 August 2025 complaining that he had been unfairly dismissed by the respondent. The respondent resisted the claim. The claimant was represented by his partner who was a lay representative. The respondent was represented by professional agents. Case management orders were made for the preparations for the hearing. The claimant’s representative complied with those orders. She also wrote to the Tribunal on 19 December indicating that the respondent had not complied with the orders. The Tribunal wrote to the respondent’s agents on 29 December asking for comment. The respondent’s agent did not reply to that correspondence or comply with the Tribunal’s orders. Instead, the agents sent correspondence after close of business on the evening before the final hearing making an application that the claimant’s claim be struck out. Productions were provided to the claimant’s representative at the same time.[2]The solicitor for the respondent at the final hearing could give no explanation as to why there had been a failure to comply with the Tribunal’s orders or respond to correspondence. There had been no effort by the respondent’s agents to co-operate with the claimant whatsoever and therefore two bundles of almost identical documents were produced at the final hearing. The respondent’s representative had not complied with the overriding objective and their conduct in that regard was unreasonable.[3]In the first instance I considered the application for strike out which had been made. I queried why that application appeared to be predicated on the basis that the claimant had not provided a written witness statement and suggested (without explaining why) that the claimant did not intend to give oral evidence. I expressed the view that it appeared that the application may have been made on the basis that in England the use of written witness statements was normal and that the representative had not familiarised themselves with the procedure in Scotland prior to making this application. In any event, the suggestion that the claimant was not going to give oral evidence was not accurate. The application was refused on the basis of its timing, the unfairness to the claimant in that regard when it was known that the claimant was not professionally represented and that evidence would have to be heard on the question of procedure in any event.[4]The Tribunal then heard from the respondent’s sole director who had taken the decision to dismiss the claimant and conducted the investigation on which that decision had been taken, Mr Henderson and Mr McGillivray the Operations Manager of the parent company of which the respondent was a franchise. The claimant then gave evidence, and oral submissions were made by both parties. Issues to determine[5]There was no dispute that the reason for the claimant’s dismissal was conduct. Therefore, the Tribunal was required to determine whether that dismissal was reasonable in terms of section 98(4) Employment Rights Act 1996. Findings in fact[6]Having listened to the evidence and considered the documents to which reference was made and the submissions of the parties, the following material facts were found to have been established.[7]The claimant commenced employment with the respondent on 3 August 2019.[8]The respondent is franchise holder and trades under the name of VPZ as a retailer of vaping supplies and equipment. Mr David Henderson is the sole company director of the respondent. The respondent employs 20 staff over 8 locations. Each store had a manager.[9]The parent company which provides franchises is CCHG Ltd, which is owned by two brothers of Mr David Henderson. That parent company has an HR department which offers HR services to the franchise holders when necessary.[10]The respondent also has retained employment law advisors.[11]The claimant was at the time of his dismissal employed as a manager of the respondent’s store in Bonnyrigg. He was also the main employee in the store, working 10 out of every 14 days. He worked with another employee Dale Iwaniec who was a sales assistant. The respondent had an area manger Ronan Hare and an employee called Ally who was a cluster manager who provided cover to the respondent’s stores for sickness or leave.[12]The claimant had been raising concerns regarding allegations of bullying by Ally and the failure of Dale to carry out his duties to the required standard with Mr Henderson since January 2024 when he had provided a letter to Mr Henderson. The claimant had been requesting a meeting with Mr Henderson to discuss these issues, but no meeting had been arranged.[13]In around January or February 2025, the claimant hid 20 bottles of vaping liquid in the respondent’s premises. He did so in order to highlight a stock discrepancy which would then result in a meeting with Mr Henderson so that he could raise his concerns with him which had not yet been addressed. The discrepancy was identified by Mr Iwaniec in the weeks following this and he highlighted it to Mr Hare and Ally.[14]Around this time, the claimant was having mental health issues arising from a lack of contact with his children following a relationship breakup. He did not tell the respondent of these issues at the time.[15]Also around this time, the claimant and Mr Iwaniec engaged in WhatsApp discussions on the stock discrepancy, during which the claimant stated “Rule number 1 going forward Keep Ronan and Dave out of any discrepancies until we speak to each other laughing emoji”.[16]On 5 April 2025, Mr Henderson emailed the claimant requiring him to attend an investigatory meeting on 7 April to consider an allegation of “Falsely reporting stock delivery discrepancies to hide till errors.” No further information was provided to the claimant in advance of this meeting.[17]A meeting took place at which notes were taken by Mr Hare. Mr Henderson chaired the meeting. He made reference to 2 apparent delivery discrepancies at that meeting. When this was raised the claimant left the meeting and returned with the stock which was missing and gave it to Mr Henderson. He explained that he had done this to force a meeting with Mr Henderson and said that the stock had been in the bin in the bathroom all the time.[18]Mr Henderson said to the claimant at the investigatory meeting “This is theft. On paper. This is theft. …….My experience with theft is, that it grows. Previous staff have started small and stared stealing more. We need to pause the meeting so we can digest this info. We will reconvene.” The meeting then reconvened when the claimant was shown some CCTV footage. Although the claimant said during the meeting that he admitted there were till errors there were not in fact any till errors identified by either the claimant or the respondent. The claimant had not made any till errors.[19]The claimant continued to work on 8 and 9 April and on 9 April, Messrs Henderson and Hare attended the claimant’s place of work and informed him that he was to be suspended. A letter was provided to him confirming the suspension.[20]A meeting took place with Mr Iwaniec on 15 April with Mr Hare and Mr Henderson joining by phone as he was travelling to Cornwall at that time. The meeting notes stated, “The purpose of this meeting is to gain further information from Dale with regards to Nick Kirklands investigation.” Mr Henderson and Mr Hare had discussions with Mr Iwaniec regarding the claimant and allegations of misconduct previously, but these had not been documented and the claimant was never informed of the content of those discussions.[21]The claimant was invited to a disciplinary hearing on 23 April by letter dated 20 April sent by email on 21 April. The claimant sought to appeal against his suspension and raised a grievance regarding the procedure which had been followed. His grievance was dealt with at the same time as the disciplinary matters.[22]The letter inviting the claimant to the disciplinary hearing did not include any evidence in relation to the allegations against him. It did not provide any specifics about what the claimant was alleged to have done or when. It did not state in terms that the hearing could result in his dismissal. The claimant responded to this letter and asked for evidence to be provided.[23]The respondent then wrote to the claimant and provided some WhatsApp exchanges between the claimant and Mr Iwaniec. These had been obtained by Mr Henderson after the claimant had requested evidence. The hearing was postponed for a further 24 hours to allow the claimant to consider the evidence which had been provided.[24]The claimant asked for a postponement of the hearing. The claimant was informed shortly before the hearing was due to commence that his request had been refused. He was however permitted to be accompanied by his partner at the hearing.[25]The allegation considered at the disciplinary hearing was identical to the previous allegation which had been made: “Falsely reporting stock delivery discrepancies to hide till errors.” By this stage Mr Henderson was aware that there were no till errors made by the claimant.[26]During the course of the hearing, the claimant informed Mr Henderson that he felt like he had had some kind of breakdown because of issues in relation to access to his children. Mr Henderson did not explore this further with the claimant.[27]The claimant was informed that he was to be dismissed without notice the following day and this was confirmed in a letter to him. The letter was not written by Mr Henderson but by his solicitor and signed by Mr Henderson.[28]The claimant appealed against the decision to dismiss him. The appeal was dealt with by the Operations Director of the parent company. The appeal was not upheld.[29]Mr Henderson provided a report in relation to his investigations for the purposes of the appeal, but this was not provided to the claimant and was drafted after the claimant had been dismissed.[30]Mr Iwaniec is now employed in the claimant’s former role. The claimant had previously discovered that Mr Iwaniec had been using loyalty cards issued by the respondent in his name and that of his partner, when processing payments from customers, so that customers could benefit from promotions. The points accumulated on loyalty cards could be used for benefits in the respondent’s shops and staff in the shop could receive bonuses in relation to the use of loyalty cards by customers.[31]The claimant was in receipt of job seekers allowance from his dismissal until he obtained alternative employment. The claimant had worked 40 hours a week for the respondent at an hourly of £13.50 and a pension contribution. Although parties were not clear on the pension contribution, it was likely to be 3% of relevant earnings.[32]The claimant now works for Costco and is paid £12.80 per hour. He started work on 10 June 2025 and although he initially worked 30 hours a week, he is now working 24 hours a week. Observations on the evidence[33]Mr Henderson’s evidence was somewhat confusing. He could not clearly articulate why the claimant had been dismissed. He appeared to accept that there were no till errors and that the allegation against the claimant did not make sense. When he was being cross examined on this point, the respondent’s solicitor sought to object and although he was advised to be very careful about the terms of such objection, given that the issue being addressed at the time was the reason for the claimant’s dismissal, suggested that the claimant had been hiding stock. There was no basis to this ‘objection’. When the witness was then asked to explain the reason for dismissal, he stated it should have said hiding stock as well. I formed the view that Mr Henderson did not in fact have any clear idea of what exactly the claimant was said to have done which amounted to gross misconduct. I did not accept Mr Henderson’s evidence that he had obtained copies of WhatsApp messages to send to the claimant because he had problems sending the original ones. This was his explanation for an inconsistency in the dates on the screenshots which had been sent which suggested that the screenshots were obtained after the claimant had asked for evidence. However, Mr Henderson made no reference to this being the reason for the inconsistency when asked about it in the disciplinary hearing but stated “he would have to have a look at them to see what has happened”. Instead, I came to the view that having been asked for evidence to back up allegations against the claimant, he then sought to obtain that evidence retrospectively.[34]Mr McGillivray was a very straightforward witness who did his best to answer questions clearly. I did however find it difficult to accept his evidence that he had the authority to require the respondent to reinstate the claimant, when he worked for a different company which was owned by Mr Henderson’s brothers.[35]The claimant was a straightforward witness who answered questions openly and made concessions in his evidence.Relevant law
[36]Section 98(4) Employment Rights Act 1996 states that “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 employer, and b) shall be determined in accordance with equity and the substantial merits of the case.”[37]In submissions, the respondent referred to a number of authorities regarding the circumstances in which a dismissal will be fair or unfair and whether such dismissal was within the band of reasonable response. He also referred to authorities to support the proposition that it was only procedural failings which would have impacted on the decision to dismiss would make a dismissal unfair.[38]It was also said that even if the dismissal could be said to be procedurally unfair, had a fair procedure had been followed the claimant would have been dismissed. Discussion and decision[39]The respondent’s position was that the claimant had admitted the misconduct of which he was accused. However, I did not accept that was an accurate reflection of the position the claimant maintained throughout the disciplinary process and at this hearing. What the claimant admitted doing was hiding stock for a number of weeks and manipulating his colleague by telling him that he was not accurately reflecting stock, in order that an error in stock would come to light which would result in a meeting with Mr Henderson to explain his concerns.[40]While it was accepted that the respondent had dismissed the claimant for conduct, Mr Henderson did not appear to have any clear idea as to what that conduct in fact was. This was no doubt partly because he had conducted the investigation process himself and then took the decision to dismiss.[41]In terms of British Home Stores Ltd v Burchell 1980 ICR 303 for a dismissal to be fair an employer must show that it believed the employee guilty of misconduct, it had in mind reasonable grounds upon with to sustain that belief, and at the stage at which that belief was formed on those grounds, it had carried out as much investigation into the matter as was reasonable in the circumstance.[42]The respondent believed that the claimant was guilty of misconduct, but Mr Henderson neither had reasonable grounds upon which to sustain that belief and had not carried out as much investigation into the matter was reasonable. Mr Henderson did think that the claimant had done something blameworthy but did not seem to know what that was. He initially accused the claimant of theft. That then became fraud, despite the fact that there was no suggestion at any stage that the claimant had done anything which would be of benefit to him. Therefore, Mr Henderson did not have reasonable grounds on which to sustain the belief that the claimant was guilty of misconduct. In addition, the investigation was unfair and wholly inadequate. There cannot be fair investigation if there is no understanding of what is being investigated and in the present case the respondent did not at any stage provide clarification as to what was being investigated.[43]In addition, I did not accept Mr Henderson’s evidence that it was necessary for him to have conducted the investigation and disciplinary hearing himself. He had 7 other managers, and an area manager and had access to the resources of the parent company, both in terms of HR advice but also the personnel as was apparent from Mr McGillivary becoming involved in the appeal. Had the investigation and disciplinary process been separated then there might have been some clarity on what actual allegations were being made against the claimant. I came to the view that Mr Henderson conducted both proceedings as he had decided at an early stage that the claimant would be dismissed. It appeared that he had wrongly come to the view that the claimant had been guilty of theft, when there was no evidence to suggest that this was the case. This was then recharacterised as fraud, but there was no suggestion throughout the process that the claimant had taken this action for any personal gain or that there was any loss to the company by his actions. It was unfair of Mr Henderson to have carried out both procedures.[44]The allegations set out in the correspondence relating to the investigation meeting and the disciplinary hearing simply didn’t make sense. There was never any specification provided as to what till discrepancies there were or what stock discrepancies there were to hide such discrepancies. There was no specification of any dates the claimant was alleged to have made till discrepancies. This was not a minor matter. Although the respondent’s agent in submissions accepted that the allegation could have been better phrased, the error went further than this. The allegation did not make sense, was not specified and was not the reason for the claimant’s dismissal. It is for an employer to set out with sufficient clarity for an employee to understand the allegation against them. Where an employer does not themselves even understand the allegation, then this amounts to fundamental unfairness in the process. Therefore, while the claimant was dismissed for conduct, there was no clarity as to what the conduct actually was.[45]The investigation was fundamentally flawed. It is accepted that the respondent is a small company. However, it had the advantage of both professional advisors and the HR services of the parent company as well as other managers and an area manager. It was fundamentally unfair for Mr Henderson to have carried out both processes. Indeed, the investigation itself appeared to consist of little more than a meeting with the claimant. While there were messages obtained, these were not obtained until after the claimant had asked for any evidence being relied upon. There were notes of a meeting with Mr Iwaniec but they did not make sense either in that it was not at all clear what was being discussed and what previous discussions had taken place. It appeared very strange that Mr Henderson would join an “investigation meeting” by phone while on holiday. This was all indicative of a decision already having been taken by the respondent and the respondent seeking to go through the motions of an investigation.[46]While the claimant did admit to doing something which he knew was wrong, that was entirely different from the accusation against him. The respondent suggested that the claimant could no longer be employed as he was in a position of responsibility. While it is accepted the claimant’s actions were culpable, there was no effort by the respondent to make enquiries in relation to the claimant’s position that his mental health was such that he thought he had had a breakdown.[47]The claimant had 5 years’ service with the respondent and there was no evidence to suggest that his service was taken into account or that he had previously been guilty of any other misconduct. There did not appear to have been any consideration given to the claimant’s explanation for his actions, and whether his suggestion that he had tried to get the respondent to sit down with him was in fact accurate.[48]The claimant’s position was that there was also unfairness in that Mr Iwaniec was not subjected to any disciplinary process in relation to his use of loyalty cards and that his conduct had amounted to fraud. While it was not appropriate to directly compare the two situations, on the basis of the evidence before the Tribunal it was difficult to understand how someone who had behaved in the way in which Mr Iwaniec had behaved was not the subject of any disciplinary proceedings at all and indeed had now been promoted into the claimant’s position. It is also noteworthy that it was Mr Iwaniec who first raised the claimant’s conduct with the respondent.[49]In all these circumstances, I came to the view that a fair process had not been followed by the respondent in relation to the claimant’s dismissal, that his dismissal had been predetermined, and that the procedure followed was such that it rendered the dismissal unfair.[50]I took into account the respondent’s position that even if a fair procedure had been followed the claimant, the claimant would have been dismissed, but I did not find that argument to be sustainable. The errors in the procedure, in particular the nature of the allegation against the claimant and that Mr Henderson conducted all the procedure, were so fundamental that I could not accept that if a fair procedure had been followed, the claimant would have been dismissed.[51]While not raised in submissions by the respondent, I did however give consideration to whether it could be said that the claimant’s conduct was such that he had contributed to his dismissal. I came to the view that the claimant’s conduct in hiding stock with a view to forcing a meeting with Mr Henderson was blameworthy conduct such that it contributed to his dismissal. I therefore came to the view that compensation awarded to the claimant should be reduced by 50%.[52]The claimant was 38 years old at the time of his dismissal and his weekly wage on the basis of 40 hours at £13.50 per week is £540. Pension contributions at 3% would be £16.20 per week. The claimant is therefore entitled to a basic award of £2700 and loss of income between his dismissal and his new employment of 6 weeks. On the basis of new weekly pay of £456.51 together with pension contributions, the claimant’s weekly loss was £472.70 which for 6 weeks is a total loss of £2836.20. The claimant also has ongoing loss. He said that for the first few weeks of his employment he worked 30 hours which on the basis of £12.80 per hour is a weekly wage of £384 and then when working 24 hours a weekly wage of £307.20. The net sums are therefore £344 and £288.90 respectively, giving a weekly loss initially of £112.51 and then £167.61 net. The claimant did not state exactly when his hours were reduced, but on the basis that his reduced hours were from this year, his loss from 10 June to the date of hearing would be 30 weeks at £112.51 per week, which is a total of £3,375.30 with ongoing loss of £167.61. In the circumstances it would be just and equitable to award 12 weeks future loss which is a total of £2011.32. The total compensatory award is therefore £8222.82 net. The claimant is also entitled to compensation for loss of statutory rights of £500.[53]Therefore, the total compensation awarded is a basic award of £2700, a Compensatory award £8222.82 and compensation for loss of statutory rights of £500.[54]However, on the basis of the claimant’s contributory conduct both the basic award and the compensatory award fall to be reduced by 50%.[55]Therefore, the total award to be paid to the claimant is £5961.41 being 2(£2700 + £8222.82) + £500.