Solman v Balbes [1992] UKEAT 395_90_1402

EAT
Solman v Balbes
[1992] UKEAT 395_90_1402 · 1992-02-14
MR JUSTICE PILL : This is an Appeal by Mr W R Solman against the unanimous decision of the Industrial Tribunal sitting at London North that his claim that he had been unfairly dismissed by Mr Laurence S Balbes t/a World of Sport was dismissed.Before this Tribunal Mr Solman appears by Counsel Mr Newton, to whom we are indebted for his careful submissions. Mr Balbes appears in person.The Appellant had been employed by Mr Balbes at his retail outlet for sports clothing and sports equipment. Mr Balbes was the sole proprietor of the business. He employed three full time staff. Mr Solman was manager, having been employed in March 1987 and promoted to manager in November 1987.In the course of 1989 Mr Balbes had suspicions that he was losing stock otherwise than through legitimate sales. The Tribunal in their Decision, which was given on 19 June 1990, set out in some detail the incidents which gave rise to those suspicions. We need not refer to them in detail having regard to the present issue and the ground upon which this Appeal is now brought. The Tribunal heard evidence from both Mr Balbes and Mr Solman and from at least one other witness. They concluded that where there was conflict they preferred the evidence of Mr Balbes to that of Mr Solman.The Tribunal found that Mr Solman was dismissed on 26 November 1989 and that the reason:
"..related to the conduct of the Applicant who was believed to have stolen stock from his employer."
On the previous day, and because he had suspicions, Mr Balbes contacted the police and as a result of a surveillance operation Mr Solman was arrested. There is no dispute but that Mr Solman had removed stock from the business premises. Following his arrest, as the Tribunal found, Mr Solman maintained that he was authorised to remove the stock and he maintained that he was going to sell the stock and account for the money to Mr Balbes. Mr Balbes told the police and believed, and his belief was accepted by the Tribunal, that Mr Solman was not authorised to remove the stock. In the event no police proceedings were taken against Mr Solman.On the morning of 26 November 1989 Mr Solman telephoned Mr Balbes and the Tribunal's findings as to the conversation which occurred are set out at paragraphs 10 and 11 of their Reasons. Paragraph 10:
"The Applicant telephoned the Respondent on the morning of Sunday 26 November 1989. The Respondent said he did not think they had anything to talk about. The Applicant repeated his claim that he was going to sell the stock and account for the money. The Respondent repeated his claim that the Applicant had not been authorised to remove stock and that the Respondent did not believe the Applicant's story."
Paragraph 11:
"The Applicant's employment was terminated during that telephone conversation and confirmed by letter dated 26 November 1989."
We have before us the note of the evidence given by Mr Balbes as to that conversation and Mr Newton has referred us to the note. There is no doubt that the Tribunal were entitled to make the findings they did upon the basis of the evidence given and Mr Newton does not argue otherwise.The Tribunal's reasoning appears at paragraphs 13 - 17. They considered the test laid down in BRITISH HOME STORES v BURCHELL [1978] IRLR 379 and it is accepted that the correct test was applied. It was accepted too that Mr Balbes had a genuine belief that there had been misconduct by Mr Balbes' manager. Mr Newton's submission to the Industrial Tribunal was that there were no reasonable grounds for that belief and that there had been no proper investigation. The Applicant had not been asked for an explanation of his conduct.At paragraph 15 the Tribunal held that there were reasonable grounds for Mr Balbes' belief and also found that in all the circumstances there had been a proper and reasonable investigation by Mr Balbes. They then in paragraph 16 state:
"On the night of Saturday 25 November 1989 and again on the Sunday morning the Applicant's explanation was that he had been authorised to take the stock and was intending to sell it for the benefit of his employer. That was also his case in the originating application and also throughout the hearing before us. The Applicant never complained that he had not been allowed to put his side of the case and indeed his side of the case has remained a model of consistency from beginning to end."
We read that paragraph as the Tribunal's explanation as to why they considered that in the particular circumstances there had been a sufficient investigation. It is common ground that the questions whether there was sufficient investigation and whether Mr Solman had sufficient opportunity to be heard before he was dismissed were relevant questions. As to investigation of taking without authority, we find that there is no case to be made by Mr Solman and in the course of argument I believe that Mr Newton accepted that. This was a small enterprise. Mr Balbes was in possession of the information which he, as the employer, considered relevant. It was he who believed that Mr Solman had no authority to take goods. Further investigation of that issue was in the circumstances unnecessary.Mr Solman's case is put by Mr Newton in a nutshell and his submission is that there was no proper or sufficient opportunity for Mr Solman to be heard on the question of dishonesty. There was no sufficient attempt by Mr Balbes to look further into the question of dishonesty. Mr Newton has referred us to the case of POLKEY vAE DAYTON SERVICES LTD [1988] ICR 142 and the more recent decision of this Tribunal in SPINK v EXPRESS FOODS GROUP LTD [1990] IRLR 320.Mr Newton relies upon the Judgment of the President, Sir John Wood, in SPINK as showing that statements of the Lord Chancellor and Lord Bridge in POLKEY were in the context of redundancy. In SPINK the President set out the questions which on the facts of that case, an Industrial Tribunal ought to have asked itself and he added at paragraph 31:
"All these issues are essentially matters of fact and degree and tribunals are the judges of fact, subject only to what in following the reasoning of Lord Donaldson in McClaren we would describe as the "fundamental tenets of fairness"."
Mr Newton also refers to the code of practice accepting that in a small enterprise such as this it is not necessary for all the guidelines to be applied rigidly. However, it was fundamental that an employee should have an opportunity to state his case before a decision to dismiss is taken. Mr Newton draws attention to the fact that the reason for dismissal related to the conduct of Mr Solman who was believed to have stolen stock from his employer. He accepts that there could be circumstances where the facts were so clear that it would not be necessary to offer more opportunity to explain or to mitigate than was given in this case. However it is submitted that since the reason for the dismissal was a belief in theft, Mr Solman should have been given a further opportunity to explain himself.It is submitted that the Tribunal misdirected themselves or alternatively reached a perverse conclusion when they decided that there had been a proper and reasonable investigation in the present case.Mr Balbes in his submissions to us has referred to Mr Solman's explanation that he had taken the goods away with consent. Mr Balbes, and the Tribunal believed his evidence, knew that that was not the case and that Mr Solman was not authorised to take goods. I say in parenthesis that a point arose upon Mr Balbes' reaction to earlier alleged conduct by Mr Solman but Mr Newton accepts and rightly accepts in our view that on the basis of the Tribunal's findings it is not possible to go behind their acceptance of Mr Balbes' evidence that Mr Solman had no authority to remove goods on the day in question.Mr Balbes submits in effect that the Tribunal were entitled to reach the conclusion they did. On the knowledge he had, it was reasonable for him to dismiss a manager who was taking goods from his business premises without authority. Mr Newton however, says that a factor in the Tribunal's decision was the accountability of Mr Solman and not merely the unauthorised taking and indeed at both paragraphs 9 and 10 there are references to the Applicant's claim that he was going to account for the money he obtained for the sale of the stock.The central submission is that if that was so, Mr Balbes should have given a further opportunity to Mr Solman to explain himself and to seek to satisfy his employer that he did intend to account for the proceeds of the goods taken from the premises. However in our view the unauthorised taking was a major factor in the approach of the Tribunal and indeed if a manager is taking goods without authority from his employer's premises that is the best possible start for a belief on the employer's part that the manager is stealing goods.In our judgment, and we are unanimous, the Tribunal were entitled to hold that Mr Balbes was not required to allow a further hearing to Mr Solman or to allow further opportunity to Mr Solman to explain himself. There was a complete divergence between the two men, an employer and his manager, in a small business where confidence between them was obviously required. The Tribunal were entitled to hold that Mr Balbes had a genuine belief that the Applicant had been guilty of serious misconduct. He had reasonable grounds for that belief on the information before him. Mr Solman having taken goods which on the Tribunal's finding were taken from the premises without the authority of his employer, there was such a divergence between the two men that Mr Balbes was entitled to dismiss without further going into questions as to what Mr Solman might subsequently have done after taking the goods.Mr Balbes drew our attention to the fact that during the telephone conversation Mr Solman in effect confirmed his asssertion that he had taken the goods with authority by saying that he was going to sell them to his football team. Mr Balbes knew that the goods had not been taken with his authority. In the particular circumstances of this case there was no requirement upon Mr Balbes to have further enquiry into the question of what was to happen afterwards.What is more to the point is that the Tribunal, as the Tribunal of fact, were entitled in our judgment to find that Mr Balbes could dismiss without giving to Mr Solman an opportunity for further discussion and representation. We are quite unable to find that they misdirected themselves or that they acted perversely in reaching the decision which they did. Accordingly this Appeal is dismissed.