Laraine Clark v. Civil Aviation Authority [1991] UKEAT 362_89_1806

EAT
Laraine Clark v. Civil Aviation Authority
[1991] UKEAT 362_89_1806 · 1991-06-18
MR JUSTICE WOOD (PRESIDENT): By an Originating Application dated 6th January 1989 Mrs Clark complained to an Industrial Tribunal that she had been unfairly dismissed by her employers the Civil Aviation Authority.The case was heard by an Industrial Tribunal sitting at London (South) under the Chairmanship of Mr Walker on three days during April 1989, at the end of which the Tribunal decided that the reason for her dismissal, which was not contested, was her conduct and that in all the circumstances of the case the Respondents had acted reasonably under section 57(3). She Appeals to this Court.She had the advantage, both below and here, of being represented by Mr Cole, who has presented his submissions to us, at some length; indeed this Appeal has extended over two days. There have been a substantial number of documents, some 150, and the learned Chairman has been good enough to provide us with some 45 pages of his Notes of Evidence, clearly and succinctly set out. We have therefore been able to review the whole of the evidence and this has been carried out for us from the Bar, with care and skill.The Civil Aviation Authority (CAA) is of course the body which is responsible for the administration and supervision of the issue of Air Travel Organisers' licences and they are responsible, where necessary, as a prosecuting body. It is important to it, as the licensing authority and as the body who is responsible for the honest and proper working of the air travel records, that there should be no question of any embarrassment to them from the conduct of the staff.The regulations are the Civil Aviation (Air Travel Organisers Licensing) Regulations 1972, a copy of which has been placed before us.

(b) the following words appear:

"Subject to paragraphs (2) and (3) of this regulation, no person shall, in the United Kingdom - ...... (b) hold himself out as a person who, either as a principal or an agent, or without disclosing his capacity, may make such accommodation available"
and that accommodation is "the accommodation for the carriage of persons on flights by aircraft," unless ......
"(ii) he holds a licence authorising him to do so, and the terms of the licence are complied with so far as they relate to the provision of that accommodation."
There is a proviso under Regulation 2(2) but it is clear on the findings of the Industrial Tribunal that that did not apply in the present case.A second part of Regulation 2 which is relevant is Regulation 2(1)(b) which reads:
"No person shall give, by whatever means, an indication direct or indirect that he holds a licence which he does not in fact hold."
The relevance of that second major provision is that on some of the documentation which appeared before the Industrial Tribunal on this case, there was a logo indicating that such a licence had been issued but with a number far above the number of any licence that had been issued. It was clearly therefore, a fake.By the terms of her Contract of Employment the Applicant, Mrs Clark, was governed by what is headed as Rules of Conduct and under the general paragraph this appears:
"The staff of a Public Authority and particularly one concerned with regulations must in certain matters observe standards which go beyond the normal conduct on duty. They must avoid any action which might cast doubt upon their impartiality in fulfilling their duties, or cause suspicion that they are using their positions to further their private interests. In particular the points covered in paragraphs 1.2 to 1.7 should be borne in mind."
Then turning to the following paragraphs which have been referred to, one notes that under 1.2(a) under the heading "Business Interests" there appears the following:
"A member of staff must report in writing to his Group Director any personal interest which he, his spouse or dependent child ....

(i) which is regulated by CAA;"

and then under (b):
"(b) For the purposes of the following paragraphs, a personal interest includes holding shares or directorships in a company acting in a Managerial capacity in a company or other organisation...."
and then under (g):
"(g) Because of the nature of CAA's functions, it may be inadvisable for CAA staff not falling within the categories referred to above to have a personal interest in an organisation regulated, competed with or dealt with by CAA. There is a danger of allegations (however ill-founded they may be) being made that a member of staff in a position to do so has accorded favourable treatment to an organisation regulated by CAA or has bought or sold share in a company because of 'insider' knowledge of the company. Any member of staff who is in doubt about the propriety of holding, acquiring or disposing of any personal interest in a company or other organisation should consult his Group Director through his Senior Manager."
Those are the general principles and then the disciplinary procedures are laid down; there is power, if need be, to suspend from duty where an allegation of serious misconduct is being brought.That being the background to the situation, we turn to the history of this matter. The Applicant, Mrs Clark, started her employment with the Respondents on 10th February 1975 as a typist but by the beginning of 1988 she was the Superintendent of Typists. In the June of 1988, a travel agent named "Flightbase Limited" was in touch with the CAA because Mrs Clark owed them a very considerable sum of money in respect of seats on charter flights, which they had obtained for her. They were concerned about payment. Mr Stacy wrote to "Flightbase" on behalf of the Respondents and received a reply dated the 25th July which set out the history of their dealings with Mrs Clark. The background therefore is usefully taken from the contents of that letter from "Flightbase Limited" said this:
"Mrs Clark first spoke to Mr Graham Manicom at this office in April and was quoted prices for seats on a charter flight. When told that we could not confirm the seats until we had received payment she offered to send us a telex from the CAA.
Mrs Clark proceeded to deal with us on a regular basis and Graham Manicom was led to believe that these seats were for staff at the CAA and personal friends of Mrs Clark. This did not seem an unlikely situation as invoices and tickets were delivered to the CAA.After a further period time elapsed we did come to the conclusion that the seats were not directly for the CAA and at that time we realised that our 'exposure' was several thousand pounds. At this point we contacted yourselves."It is right to emphasize that the balance was ultimately paid by the Applicant.The CAA considered this matter, and whilst they were considering it they received a telephone call from a Mrs Smith. She was also complaining about Mrs Clark. Mrs Smith followed up her telephone complaint with a letter with which she enclosed copies of various documents. That letter, as the Tribunal found:
"told of a fairly horrific series of events when the arrangements for a flight to Alicante proved to be non-existent within 24 hours of the departure date, Mrs Smith, her husband and two friends, all of whom had been booked to travel, had to take, instead, a British Airways scheduled flight leaving from Malaga a day later than they had intended and hire a car to drive from Malaga to Alicante. Mrs Smith's letter alleged that Mrs Clark had told her that she, Mrs Smith, and party would be insured with the Civil Aviation Authority and that she, Mrs Clark, had a high position in that organisation."
The Tribunal go on to make specific findings of fact based upon the other evidence which was before them, and it is right before turning to those findings of fact to emphasise that it is clear from later parts of the Decision that the Industrial Tribunal found Mrs Clark a most unsatisfactory witness; they were not surprised that the CAA, acting through its managers, did not accept her statements as truthful during the inquiries and the hearings to which we will refer hereafter.The Respondents, as found by the Industrial Tribunal, took a statement from Mrs Smith; they also obtained a business card, printed in silver and blue with the name "Silverwing Travel" on it, and a sheet of notepaper also headed with "Silverwing Travel" Mrs Clark's home address which had been typed out as an invoice. There was a letter to Mrs Smith signed by Mrs Clark's husband on similar headed paper and a premium receipt, or insurance certificate, issued by underwriters through a firm of insurance brokers, in respect of Mrs Smith's party bearing an agent's stamp "Board-a-Plane Travel" and dated 29 August 1988. The next step, clearly, was for the Respondents to make enquiries of "Board-a-Plane Travel Limited" and they were in touch with a Mrs Hernandez, a director of that travel company. They saw some documents including numerous invoices and a photocopy of a cheque for £4,688 drawn by Mrs Clark on a joint account which she had with her husband, which had been returned "Refer to drawer". They saw a cheque dated 8th August 1988 and Mrs Hernandez explained, that after exchanges with Mrs Clark she received a second cheque for £3,000, which was cleared, and a further cheque which ultimately cleared and discharged the debt shortly before the 1st November 1988.In looking at the documentation the Tribunal, noted in particular, and it is to be found on page 100 of the bundle of documents, that the notepaper which was headed "Silver Wing Travel, Scheduled and Charter Air Travel" and then with the clerk's home address on it and telephone number, had on it at the top left hand side a logo which reads "ATOL" and underneath "CAA" and underneath that a number "7314". There was also on the right hand side a logo indicating that the travel company was a member of "IATA". The Tribunal found that the "ATOL" logo was false, it was a fake.The Respondents thereafter took the following steps. A meeting took place on the 17th October between the Personnel Director, Mr Bowley; the Group Director of Personnel, Mr Lockwood; the Respondents' Deputy Legal Adviser, Mr Britton and their Deputy Chief Investigation Officer, Mr Martin. As a result of that it was decided that this whole matter should be referred to the Police, because it was likely that there was a breach of the Regulations which could lead to criminal charges. A decision was made to dismiss and Mrs Clark was given 3 months' notice. She was to leave the premises and hand in her security pass forthwith.The next step was that a letter was written dated the 18th October and on that date the Applicant was seen by Mr Mason, who asked her about these matters and delivered the letter to her. That letter is to be found on page 114 and it alleges, in the first paragraph, three different matters. The paragraph reads:
"I have to inform you that the Authority has received information from two travel companies, Flightbase Limited and Board-A-Plane Travel, alleging that you have represented yourself to them as being in a position to sell charter airline seats on a credit basis."
That is the first allegation:"Further, the Authority has received a written complaint from Mrs R Smith regarding travel arrangements made by Silver Wing Travel in which you allegedly played an active part together with associated insurance arrangements which were allegedly represented by you as being made through the Authority".That is the second allegation, and thirdly:
"It would appear from the complaints that you have been participating in a private business from your CAA office using CAA stationery and inviting clients to contact you through CAA telephone and telex numbers."
She was told she had a right to appeal.Mrs Clark did appeal, and her appeal was heard by a Managing Director, Mr Murphy. We will return to the details of that appeal in a moment. The Tribunal, quite rightly, was extremely critical of the way this matter was handled at its initial stages. The problem so far as the CAA was concerned was that they wanted Mrs Clark out of the building whilst further investigations were being made.It seems to us difficult to understand, more especially as there were provisions in the Contract of Employment, but even if there had not been specific reference to it, it is difficult to understand why she was not merely suspended, and asked to leave the premises whilst investigations took place. That could not have prejudiced the CAA; it would not have prejudiced the position of Mrs Clark, and it would have enabled a complete and satisfactory investigation to be carried out before any decision to dismiss was reached. In the present case that decision was reached without the elementary rules of natural justice being complied with, in that Mrs Clark was not given a clear indication of the charge against her; nor an indication of the evidence against her; nor an opportunity of being heard and making representations.Industrial relations practices have now been the subject of careful and constructive examination for a number of years. Whilst every case must depend upon its own facts, the industrial Members expressed the view that the general principles are now quite clear.Where something has occurred and where disciplinary proceedings may possibly be held, but where further investigation is thought to be necessary, the appropriate course for an employer is to suspend the employee on full pay and, if so desired, to require that employee to remain away from work.After due investigation and before reaching any final decision, a disciplinary hearing is obviously necessary as are any appeal hearings. The practice at such hearings will follow the rules of natural justice, which are really matters of fairness and commonsense.As we have said the procedure may vary from one situation to another, but the industrial Members would suggest a broad approach on the following lines; explain the purpose of the meeting; identify those present; if appropriate, arrange representation; inform the employee of the allegation or allegations being made; indicate the evidence whether in statement form or by the calling of witnesses; allow the employee and representative to ask questions; ask whether the employee wishes any witnesses to be called; allow the employee or the representative to explain and argue the case; listen to argument from both sides upon the allegations and any possible consequence, including any mitigation; ask the employee whether there is any further evidence or enquiry which he considers could help his case. After due deliberation the decision will almost certainly be reduced into writing, whether or not an earlier oral indication has been given.In this case, it is surprising to us, that a body such as the CAA had not indeed managed to arrange its affairs so that there was an investigation and suspension pending any ultimate decision. Although we have expressed our views at greater length than did the Industrial Tribunal, we entirely accept and agree with the criticism which was made; they terminate their criticism in the following words:
"That was a highly unusual course for an employer to take, and, in normal circumstances, it could be sufficient alone to render the dismissal unfair."
We would respectfully agree.However, there was here, and there have been in other cases an appeal which took place. The law has crystallised over recent years, and although the procedure at the initial stages was clearly faulty and unfair, nevertheless, the situation when looked at in the round can be rectified if there is in effect a full and proper hearing on appeal, a re-hearing. Therefore, in the present case it was important for the Industrial Tribunal to look at the appeal before Mr Murphy, to see whether it could properly be so described, and looking at fairness in the round, to describe whether the early unfairness had been rectified.The Tribunal in paragraph 11 say of the appeal as follows:
"In this case, however, it is understandable, first given the position of the Respondents as a statutory regulatory authority with a concomitant need to show that their staff were not involved in a suspicious manner with firms which it was, or might be, their duty to regulate, or firms which might be committing statutory offences; secondly, the fact that the police were to be informed of the matter forthwith any investigation by the Respondents might cause subsequent difficulties for the police when investigating possible criminal acts; and, above all, the fact that the Applicant was given three months' notice and had ample opportunity in that time to appeal against her dismissal whilst she was still employed. The Applicant did appeal, as she was contractually entitled to do, and in the light of what took place at that appeal it cannot be said that this was a case of injustice. We believe, rather, that it was a case in which, as foreseen by the decision in Calvin v Carr ... any defect in natural justice was cured by the appeal proceedings. The appeal was certainly a comprehensive one, which could have been described as a re-hearing had there been an initial hearing, and therefore, within the guidance given by in Whitbread & Co plc v Mills ... We hold, therefore, that there was no injustice to Mrs Clark in the manner of dismissal, and that the procedure adopted in this case does not render the dismissal unfair."
The criticisms made by Mr Cole before the Industrial Tribunal included the criticism that after the appeal a statement had been obtained from Mrs Hernandez, who was responsible for the "Board-a-Plane" travel company and that the contents of that statement could not have been within the knowledge of Mr Murphy at the time of the appeal. In paragraph 13 of the Judgment the Tribunal indicated that that statement was available to Mr Murphy at the time he conducted the appeal.We were caused anxiety about that particular matter because it seemed to us that the statement could not have been before him and therefore that the Industrial Tribunal was wrong in so finding. It was therefore, with the assistance of Mr McManus that we reviewed the evidence and the documentation with minute care. It is clear to us that although the actual statement was not before Mr Murphy there was a summary of the substance, the essentials, of that statement in a memorandum from Mr Martin, the Deputy Chief Investigation Officer, of the 17th October, which was before Mr Murphy. Therefore it can properly be said that the substance of that matter, although not the details of the statement were before him.The Industrial Tribunal summarise the evidence available to Mr Martin in paragraph 14. They say this:
"Mr Martin had available invoices and other documents showing that Mrs Clark had arranged for individuals to take flights on some 35 occasions through Flightbase Limited in the period from April to 29 June 1988 and had arranged travel for other people on some 43 occasions between 26 July and 16 September with Board-A-Plane Travel and the documents to which we have already referred, statements by Mrs Smith. That evidence can only be viewed as overwhelming in this context, particularly when taken with Mrs Clark's attempts to explain these matters in the course of her appeal hearing, which explanations would be found to be wholly unconvincing by any reasonable employer in the position of the Respondents. Indeed, some of Mrs Clark's attempted explanations would only have served to convince most employers of her guilt.

and then continue -

15 Having seen and heard Mrs Clark give evidence before this Tribunal, it is no surprise to the Tribunal that Mr Murphy, at the end of the appeal, concluded that there were reasonable grounds to believe that Mrs Clark was participating in a business of selling charter airline seats on a credit basis, and, furthermore, that her activities with travel firms regulated by the Respondents were in direct contravention of the requirement in her contract of employment that staff must avoid any action which might cast doubt upon their impartiality in fulfilling their duties, or cause suspicion of using their position to further their private interests. It was on that ground that Mr Murphy upheld Mr Bowley's decision to dismiss, and, having regard to all the evidence which was before him, we find that in so doing he satisfied all three legs of the Burchell test.16 In these circumstances we have no hesitation whatsoever in unanimously concluding that any reasonable employer, in the situation of the Respondents, would have considered that dismissal as a penalty for what had occurred was within the reasonable range of options available for such an offence. Her application is dismissed."Mr Cole submits first that there ought to have been further full investigation of this matter before the decision to dismiss was made and if there had been, the CAA would have found grounds which mitigated the situation and would not have reached the decision to dismiss. Of course, the Tribunal have indeed agreed with that criticism. They then looked to see whether the appeal had rectified that error. Mr Cole having succeeded at that first stage of his argument, then submits the appeal could not have been found properly to amount to a re-hearing within the Whitbread and Calvin principles. [ Whitbread & Co plc v. Mills [1988] ICR 776; Calvin v. Carr [1980] AC 574 .]That in our judgment is substantially a question of fact. This experienced Industrial Tribunal clearly had in mind the problems raised by the situation, and clearly had in mind that it needed to satisfy itself that no injustice had in the end been perpetrated on Mrs Clark and that there had been a proper and sufficient hearing and investigation, and that she had had every opportunity of presenting her case and making her points. She was in fact accompanied by a friend at that appeal hearing before Mr Murphy. We are quite unable to detect any error in law, or any misdirection given to itself by this Industrial Tribunal. They found, quite clearly, as has been indicated from the passages to which we have already referred, that there was no injustice to Mrs Clark in this case.The Tribunal approached this matter correctly, they referred themselves to the Burchell tests; they looked to see what was the information before Mr Murphy; was Mrs Clark told of that information? Did she have an opportunity to make her comments? Did she have an opportunity to say anything she wanted? Would she have wanted the witnesses to come? All that was examined very carefully by this Industrial Tribunal and they reached the conclusion that she had not been unfairly treated. They also found, as indeed they were bound to find on the evidence - for it was overwhelming, as the Tribunal said - that she had been involved in this travel company. They quite clearly rejected her evidence, indeed at one stage she said:
"I have never used the name Silverwing Travel.
I have never even used Silverwing paper - or given the name or number to anybody, as I did not know of its existence."That they had no difficulty on the documentation in finding that to be completely untrue.So the position, ultimately, is that the Tribunal found there was a re-hearing, they found that this was fair.Mr Cole raised a number of matters initially, he did not repeat them, ultimately, but he took the point that the Industrial Tribunal had erred in failing sufficiently to give particulars of the offence committed by the Applicant. We cannot accept that. If one reads the Decision as a whole, and reads the documentation as a whole, it is quite clear what was being alleged and what was found. Secondly, he alleges that the Tribunal erred in law in failing to require the attendance before it of Mrs Hernandez for cross-examination. What was relevant on the issue of liability as opposed to compensation was what Mr Murphy knew and Mr Murphy had the substance of what Mrs Hernandez was going to say in the note from the Investigating Officer. On liability therefore, it is difficult to see what relevance any evidence from Mrs Hernandez could have had, unless it was restricted solely to what she had told the Certification Officer. Lastly, he submits that there was an error of law in admitting a letter from a Mr Thompson of 25th July 1988; that was entirely a matter within the discretion of the Industrial Tribunal as was the question of Mrs Hernandez. We can find no injustice perpetrated in this way. The exercise of the discretion was entirely within a band which was properly exercisable by the learned Chairman.In conclusion, therefore, this in essence is an Appeal on the facts and the evidence is there. The Tribunal were there to find the facts and to apply the law; there is no error of law; there was ample evidence upon which they could reach their conclusions and this Appeal must be dismissed.