British Railways Board v Powell [1992] UKEAT 416_91_1307

EAT

British Railways Board v Powell

[1992] UKEAT 416_91_1307 · 1992-07-13

MR JUSTICE HUTCHISON : This is an Appeal by British Railways Board against a majority decision of the London North Industrial Tribunal dated 11 June 1991 that the Respondent was unfairly dismissed. We are going to endeavour to deal with the matter which is not without its complications relatively shortly and I therefore begin with a brief summary of the material facts.

The Respondent was employed as a chief steward working from King's Cross on July 10 1990 as a relief. With him were a chef named Kennedy and a junior steward named Stubley on the 12.10 from Leeds to King's Cross and back. In the course of the return journey Mr Noble, a senior travelling manager, went on board apparently because of a report which had excited the interest of the Appellants. Mr Noble saw Stubley serving poured coffee to 8 standard class passengers. Now that is prohibited. The proper system is that standard class passengers are served tea or coffee in pre-packed sealed cups. The seal is removed and hot water is added so as to produce the requisite beverage. He visited the bar and he found a bag of washed plastic cups - I think some 14 in all. That again is something which should not have occurred because there is, given the system that we have described, no call for plastic cups to be washed and re-used. Indeed there were also 2 cups, in one of which some loose coffee powder was observed.

Later, Noble saw Stubley come back from the first class carriages with pots, cups and saucers on his tray. The system so far as first class passengers are concerned is that they too are served in a way which involves the use of individual pre-packed containers through which the coffee is strained when water is added. It goes, as befits first class passengers no doubt, into china rather than plastic cups.

Mr Noble then inspected Mr Powell's bill book and concluded that customers were not being properly billed and there was a good deal of evidence which it is unnecessary to rehearse about that. He made arrangements for Mrs Carrier, the catering manager, to meet the train at King's Cross and told her that he suspected fraud, that cups were being re-used and probably there was no proper accounting.

Mrs Carrier interviewed first the junior steward Mr Stubley and it is apparent from the note of the interview that we have seen (it was provided rather belatedly this morning at the beginning of the hearing) that as the Industrial Tribunal record, Mr Stubley - beginning in tears and resorting for a brief moment some prevarication - very quickly indicated that he was prepared to tell what he contended was the truth; and that the truth according to him was that he had indeed abused the system but had done so at the behest of and with the knowledge of the Respondent Mr Powell.

The next thing that happened was that Mr Powell himself was interviewed by Mrs Carrier. The interview which again we have seen, was in a question and answer form. Mr Powell said that he knew that Stubley was serving cups of coffee and in some cases in the first class Gold Blend was served. He said that he told Stubley that he should use the proper method and not pots. He told him the previous day and was worried that he might have pocketed some money.

Mr Powell was suspended. Mrs Carrier wrote to him on 16 July and required his attendance at a summary hearing on 20 July to answer charges of first failing to account correctly, and secondly breach of rule G.43. Now Rule G.43 is in these terms:

"Staff must not engage in trade or business for themselves or others whilst on duty. Only items purchased by or on behalf of Inter-City, on board services are to be served on refreshment cars. Personal food or drink items must not be carried on refreshment cars."

There was no further detail as to the nature of the alleged breach of that rule but a reference to the rule book would of course have informed Mr Powell of the nature of the charge, though not of the precise facts on which it was based. He was told that he could be represented and call witnesses on relevant matters.

That letter however was unfortunately incorrectly addressed and was not received by Mr Powell. A second letter, to be found at page 20 of the bundle, was despatched. That also had mistakes in the address but Mr Powell did, very shortly after ringing in himself to make enquiries about a possible hearing, receive it on the afternoon of the day preceding the revised hearing, fixed for 24 July. He attended on that day.

The circumstances of the hearing were somewhat less than satisfactory for this reason, that shortly before the hearing into the charges against Mr Powell, charges had been heard against Mr Stubley and a union representative, Mr Pattinson had represented Mr Stubley at that hearing. Mr Stubley was entering a qualified plea of guilty as it were in that he was admitting the facts but continuing to assert some form of moral innocence, contending that what he had done he had done at Mr Powell's behest. Mr Pattinson then found himself, not representing but, as it were sitting with, and being in a position to tender advice to, Mr Powell whose case was entirely inconsistent with that of Mr Stubley. That situation cannot have been satisfactory.

However that may be, the hearing took place; Mr Powell explained that, for reasons which he outlined, he was extremely tired, having worked excessively long hours. It is clear that Mrs Carrier accepted this. The way in which the hearing was conducted was not by calling Mr Noble and Mr Stubley but by Mrs Carrier putting the substance of their statements to Mr Powell and inviting his comments upon them. Indeed one finds that in the course of the hearing a number of matters were put in that way and Mr Powell was given an opportunity to deal with what was alleged by those witnesses.

The upshot was that Mrs Carrier concluded that the charges were made out and that the appropriate penalty was one of dismissal. It has to be said, because it is a matter of some significance, though in our judgment in the end not decisive of the outcome of this Appeal, that the charges that were brought against Mr Powell did not specifically advert to the contention that he had been guilty of dishonesty in the matter; though the substance of the case advanced against him plainly was one of dishonesty. The allegation was that he was a party to what went on and the inference is that it was suggested that he was pocketing the proceeds of a fraudulent practice.

The decision was taken to dismiss him. He was informed of his right to appeal and indeed he did so. His Appeal was heard at King's Cross before Mr Leaker the group manager. We shall come back a little later to the subject of the Appeal. What this Appeal before us concentrates upon is what the Industrial Tribunal were principally concerned with, namely the propriety of the conduct of the investigation by Mrs Carrier and of the conclusions at which she arrived.

The careful decision of the Tribunal is set out at some considerable length and it is clear that they begin by rehearsing the evidence, and what they found. It is material to note that in paragraph 3 (and this is a conclusion at which all three members must have arrived) they say of the witnesses they heard, that is Mr Noble, Mrs Carrier, Mr Leaker and for the Applicant Mr Powell himself:

"We thought that all the witnesses were honest, and doing their best to tell us the truth, but where there were conflicts of evidence, these arose because Mr Noble drew what seem to us to be unwarranted assumptions from what he had observed."

That slightly obscure reference is, we are satisfied, a reference to Mr Noble's conclusion on one particular part of the case namely the significance of his observation that Mr Powell was on the train seen to speak quietly to the two other men under his direction.

Having set out the evidence that they heard in that way the Tribunal then went on in paragraph 18 to indicate that that represents the facts of the case and in paragraph 19, which is the all important paragraph, stated their conclusions. The conclusions read as follows:

"The majority members think that the procedure adopted by the Respondents in investigating the matter was objectionable in the following respects:-

i)The charges were summarized by reference to the ICOBS Manual of Standing Instructions. But in the British Railways Board Notes for Guidance of Officers Implementing the Disciplinary Procedure, it says, at Clause 19 "Offenses should be described in words, and not referred to simply as a breach of the Rule Book etc." Charge 2 as it was set out does not meet that requirement."

I break off at this point to say that the basis of the attack cogently advanced by Mr Treverton-Jones before us on the conclusions of the majority of the Tribunal is that each and every one of the reasons which they give in this paragraph for their conclusion that the proceedings before Mrs Carrier were unfairly or improperly conducted and that her conclusions cannot stand is demonstrably incorrect. While the facts recited in that reason are correct, as we have already made clear, the answer of Mr Treverton-Jones is that that is a trivial complaint and that in the circumstances of this case Mr Powell can have had no doubt as to the general nature of the allegation that was advanced against him. We accept that submission.

Secondly they say:

"Mr Powell had very short notice of the hearing, and the fact that he had notice of as much as 24 hours was due to his own efforts, not those of British Rail. The majority members criticise British Rail for having made no effort to ensure that the second notice of hearing had in fact been received, although they had to reschedule the hearing as originally fixed, due to Mr Powell's non receipt of their first notice."

Now once again it does seem that British Rail were to a degree at fault in sending the notification of both hearings to an address incorrect in some of its details; but the point is made that on the 24 July Mr Powell attended the hearing and though the nature of the assistance he received from Mr Pattinson may have been less than what was desirable, between them they could have applied for an adjournment had it been felt necessary to seek one. While we consider that the lateness of notification and the necessity for Mr Powell to appear only a day after he received that notification are regrettable, it would not we consider be a ground either alone or in conjunction with the others which could properly be said to have vitiated the hearing before Mrs Carrier.

Their third reason is:

"The majority members believe that there was a breach of the rules of natural justice in the hearing before Mrs Carrier.."

The Industrial Tribunal give five specific grounds on which they think that was the position. Now it is material just to remind ourselves what are the requirements of natural justice so far as they apply to investigations of this sort. We were helpfully referred by Mr Treverton-Jones to a number of authorities but we take a passage from the first of those which he cited, KHANUM v MID-GLAMORGAN AREA HEALTH AUTHORITY

[1978] IRLR 215

. One finds some guidance on the subject in paragraphs 19 and 20 from which we propose to quote only a short passage. The judgment of the Employment Appeal Tribunal is being given by Mr Justice Bristow and he said among other things:

"But in our judgment as regards the sort of domestic tribunal with which we are concerned in this case the law is as it was expressed by Harman J in Byrne v Kinematograph Renters Society Ltd [1958] WLR 762 and approved and applied by the Privy Council to the context of a University Vice Chancellor's inquiry into cheating in examinations in Fernando's case: [and he quotes from Harman J]:

"What then are the requirements of natural justice in a case of this kind? First, I think that the person accused should know of the nature of the accusation made; secondly, that he should be given an opportunity to state his case: and thirdly, of course, that the Tribunal should act in good faith. I do not myself think that there is really anything more."

That is all we propose to cite from that authority and we emphasise in particular the reference to good faith. That can be interpreted in our judgment as including this - that anyone who appears before such an investigatory body as Mrs Carrier was presiding over on that occasion, is entitled to a fair hearing before an unbiased tribunal which approaches the evidence with an open mind.

Bearing those matters in mind we turn to examine the five particular grounds on which the majority of the tribunal concluded that there had been a failure of natural justice at that hearing. They say this:

"a) the Applicant should have had notice of the nature of the accusations made by Mr Noble and Mr Stubley"

All we propose to say about that is that in the light of the terms of the interview that took place on 10 July when Mrs Carrier first interviewed the Respondent Mr Powell, it seems to us that he had a sufficient indication of the general nature of the allegations that were made against him.

"b) as so much reliance was placed on the allegations made by those gentlemen, Mr Powell should have had the opportunity to cross-examine the witnesses"

As to that, given the nature of the investigation which Mrs Carrier was carrying out and the fact that she herself had previously interviewed Mr Stubley and had had the report from Mr Noble, we are quite satisfied, particularly in the light of some of the authorities to which we have been referred, that there is no requirement that witnesses should be called and tendered for cross-examination in the way that is there suggested.

"c) Mrs Carrier should have allowed the Applicant to see the written statement of Mr Noble and a copy of the hand-written notes of the interview with Mr Stubley"

Once again Mr Cotter, for whose well constructed and cogent arguments we are grateful, really felt unable to support that as a stark proposition and resorted to saying that it was really part and parcel of the contention that the information which had been provided to Mr Powell was insufficient to acquaint him with the nature of the case that he had to meet. Had he had those documents therefore the suggestion is he would have been the better able to understand precisely what was alleged against him. However, we have no doubt (as we have already said under (a) above), that Mr Powell did know what was the nature of the case he faced.

I pass over for the moment (d) and consider (e):

"e) The majority members do not believe that any reasonable employer could have preferred the uncorroborated evidence of Mr Stubley to that of Mr Powell. It is their experience that staff accused of serious offenses frequently blame innocent parties, saying that they were told to commit an offence by someone else. In their experience it is also normal for such statements to be untrue. The employers should have borne in mind that Mr Stubley, having admitted the offence, was himself trying to avoid dismissal by blaming Mr Powell."

Mr Treverton-Jones submits that that is an indication of the majority of the Tribunal in effect substituting their own view of the credibility of witnesses for that of Mrs Carrier. Mr Cotter has submitted that the paragraph bears a different construction and is intended to refer to Mrs Carrier's assessment of the relative credibility of the two witnesses at a time before the hearing began and is in effect a supplement to paragraph (d) to which we are about to turn. We say only that we are disposed to prefer the construction advanced by Mr Treverton-Jones. We do think that there the Tribunal are in effect substituting their own views on credibility for those of Mrs Carrier and that for reasons which are too well known to require elaboration, that is an illegitimate exercise.

However, sub-paragraph (d) presents more of a problem. What the majority members say is this:

"d) Mrs Carrier had approached Mr Powell's hearing with a closed mind, having previously interviewed Mr Stubley and having accepted what he said. In the view of the majority members, this meant that the hearing before Mrs Carrier was no more than a cosmetic exercise."

Now we say this as a preliminary to the remarks which we are about to make. By no stretch of the imagination could it properly be contended that what Mrs Carrier was conducting was merely a cosmetic exercise and we think that that phrase is perhaps an unfortunate choice to encapsulate the view at which the majority of the Tribunal had arrived. Having said that however, the fact is that the conclusion that they there arrive at as to Mrs Carrier having approached the matter with a closed mind is one which poses what in the end we have concluded is a insuperable difficulty in the way of the Appellant.

We return to paragraph 12 of the decision. There the Tribunal say this:

"Mrs Carrier gave two pieces of evidence, to which the majority members attached great weight. The first came in her account of Mr Stubley's evidence to her: this is set out on pages 33 and 34 of the Bundle R1 and is that Mr Stubley said that he did not want to be in the same room as Mr Powell."

Pausing there, we are not sure precisely what significance the Tribunal members had in mind in relation to that assertion by Mr Stubley. They may have been suggesting that the fact that he told Mrs Powell that his sentiments were such that he could not even bear to be in the same room as Mr Powell was a reason for finding that Mr Stubley was a witness of truth. If that is what they meant we question whether that is a correct line of reasoning. However that may be they went on to say this in paragraph 12:

"Mrs Carrier went on to tell us that, since she had accepted what Mr Stubley told her - namely, that he was acting on the instructions of Mr Powell - it would require very strong evidence at the hearing from Mr Powell, corroborated by the evidence of Mr Kennedy the Chef, to persuade her that Mr Stubley's evidence was in fact untrue."

Mr Cotter makes the point, and there is nothing in the material before us to suggest that it is invalid, that by the time that sentiment was expressed by Mrs Carrier, she knew, having learned what Mr Kennedy had to say, that his stance was that he knew nothing of what had gone on. By definition therefore he was a witness who was never going to be able to corroborate what Mr Powell had to say. The contention therefore is that Mrs Carrier was giving a piece of evidence there which indicated that by the time she came to conduct her investigation on 24 July she had set a hurdle so high that she knew that it could not possibly be cleared by Mr Powell. The corroborative evidence that she considered was essential to lead her to prefer Mr Powell and reject Mr Stubley was known to her not to be available.

It is suggested that when one then comes to paragraph 19(e), that is merely a reason and not a finding of fact or an inference drawn from the facts and the evidence. With that we disagree. We have given careful consideration to the matter and we conclude that in paragraph 19(iii)(d) the majority members are expressing the conclusion, based no doubt upon that passage summarised in paragraph 12, that Mrs Carrier was someone who had approached Mr Powell's hearing with a closed mind. Closed in this sense - that she had concluded that Mr Stubley was telling the truth and had in effect reached a stage where she was for practical purposes, not prepared to be moved from that conclusion.

As we ventured to suggest in the course of the hearing, there is a world of difference between a tribunal which says at an interim stage - "well this evidence is very cogent and persuasive and at the moment carries weight with us: we shall wait to see whether there is going to be any evidence to lead us to reject it, but it seems unlikely that there could be" and a tribunal which expresses as it were a concluded view as to the facts when only half of the evidence has been heard. It appears to us that the Industrial Tribunal here are drawing the inference on the basis of the evidence that Mrs Carrier gave, and of course they had the advantage of hearing and seeing her, that she had before she embarked upon the hearing of 24 July, in effect "closed her mind" to the idea that Mr Stubley might not be telling the truth.

Against that, it is true, is to be set a passage in the notes with which we have been provided, of what actually took place at the hearing on 24 July. Two things can be said. The first is that nowhere in the course of that evidence does Mr Powell advance an account which substantially undermines the case against him and the second is that at page 23, one finds the paragraph in which Mrs Carrier expresses her conclusions. She had a short adjournment to think about the matter and she then said according to the obviously abbreviated note:

"Having listened in defence. I accept your point of tiredness. However Three points that concern me are 1. The empty wet cups and 2. Service down standard class. 3. First class service - I can accept the possible discrepancy of 3 coffees but I cannot accept that Mr Stubley served 4 pots of tea on his own initiative without you being aware and without it being recorded. I find it hard to believe he carried out such a coffee service on his own.

I therefore accept Mr Stubley's story."

It could be argued and indeed was argued, that there Mrs Carrier was giving reasons objectively based for rejecting Mr Powell's story and was doing so not because she accepted Mr Stubley's account of his having been induced by Mr Powell to carry out this fraud, but simply because she could not conceive that it could be true that Mr Powell was not implicated given the circumstances disclosed by the evidence. On the other hand, it has to be said that that passage concluding as it does with the words "I therefore accept Mr Stubley's story", could be an indication that Mrs Carrier was at that juncture simply providing reasons for her continued acceptance of Mr Stubley's account and her rejection of Mr Powell's.

Whether or not that is so the fact is that the majority of the members of the Industrial Tribunal in this case expressed a clear finding, which we regard as a finding of fact, that Mrs Carrier had been so impressed by the evidence of Mr Stubley before the hearing of 24 July ever began, that she had in effect "closed her mind" to the possibility that he was not telling the truth. That, as it seems to us, is a view which they were entitled to arrive at on the evidence before them. I remind myself again that they heard Mrs Carrier and they have recorded what it is that she said. Their conclusion is one which in our judgment entitles the Respondent to say that he did not, on 24 July, receive a hearing before an unbiased tribunal -did not receive a fair hearing. In those circumstances we conclude that, of the reasons given by the majority of the Industrial Tribunal for holding that the dismissal was unfair, that which is established on the basis of their findings of fact is the ground recited in paragraph 19(iii)(d).

We emphasise again that it is putting it too high to suggest that Mrs Carrier was carrying out merely a cosmetic exercise, but what can be said is that they have found that she had "closed her mind" to the possibility that Mr Stubley's account might be untrue.

We are conscious that, of the various reasons given by the Industrial Tribunal for holding that the disciplinary proceedings and the dismissal with which they concluded were unfair, we have felt able to support only one as valid. This is, therefore, a case in which in relation to the other reasons the Industrial Tribunal misdirected themselves or arrived at unjustified conclusions. Had they not done so - had they found only the ground for criticism expressed in paragraph 19(iii)(d) - would they nevertheless have reached the same conclusion on the issue of unfair dismissal, and would that conclusion have been correct? Unless we are satisfied that those questions can be answered affirmatively we would not be justified in upholding their decision. We are, however, so satisfied. A breach of natural justice of the sort that the Tribunal found had occurred here fundamentally undermines the fairness and integrity of the disciplinary proceedings; and therefore, in our judgment, the Tribunal's conclusion was plainly right.

In those circumstances we cannot uphold the attack upon the majority's conclusion. There are cases of course in which, as Mr Cotter conceded, the deficiencies of the original hearing can be cured by a properly conducted appeal. In this case the nature of the appeal was such that Mr Leaker merely considered a note of the evidence that had been given at the hearing before Mrs Carrier and determined the matter on the documents alone. He did not have the advantage of hearing any evidence. In the circumstances nothing that happened on the Appeal could cure the defect that characterised the original hearing before Mrs Carrier.

In the circumstances, for what I hope are obvious reasons, we feel it unnecessary to go into the specific criticisms that were advanced in relation to the Appeal hearing and were sought to be relied upon both before the Tribunal and before us. We say no more about that. The upshot is that this Appeal will be dismissed.