Cleveland Transit Ltd v Walton [1993] UKEAT 578_91_2405

EAT

Cleveland Transit Ltd v Walton

[1993] UKEAT 578_91_2405 · 1993-05-24

MR JUSTICE WOOD (PRESIDENT): Mr Walton, who was born in 1950, and had been employed for some 15 years by the Respondent, Cleveland Transit Limited, which was a bus Company operating in the Cleveland area, was dismissed on the 26th September 1990. He felt that he had been unfairly dismissed and brought proceedings before an Industrial Tribunal. That hearing took place on two days the 29th May and the 17th June 1991. It was the unanimous decision of that Tribunal that he had been unfairly dismissed. The Company appeals.

It is important to note two things by way of background. First of all that the trade union involved here was the Transport & General Workers Union with all its experience and expertise, with whom the Company had an agreed procedure; it was detailed and had been examined by both sides. The second point is that it had been made clear in a booklet, and was clearly a part of the term and condition of the employment of Mr Walton, that under no circumstances whatsoever must driving staff handle money. The method that was being used for payment was for coins to be dropped into a hopper and then for the driver to issue a ticket. As sometimes the fare could not be exact, there was likely to be a slight overpayment, if one took it across the whole of a shift.

The incident which gave rise to the problems took place at about 4.30 or 4.45 pm on Saturday 1st September 1990. Mr Walton was driving a single deck bus. In front of him, parked at a stop, was a double decker and sitting at the back of the double decker, was a passenger a Mr Laidler. It was his evidence that he saw the Applicant put, what are called "tripper wallets", they are plastic implements, into the hopper of the ticket machine and extract some money which he put into his coat. Mr Laidler proceeded to report that, but not until about 5 or 6 hours later, and he did so to an Inspector at the Middlesbrough Bus Station, a Mr Lake. Mr Laidler sought to explain the delay and he did so.

Mr Lake completed a report and sent it forward. With knowledge of the bus number and the services, the hopper was checked and it was found to be about £15 short. Mr Lake, that is the Inspector's report, was brought to the attention of Mr Liddle, who was the Traffic Operation Manager. He decided that the matter must be investigated and wrote to Mr Walton indicating that on Friday 7th September 1990 at 10 am there would be an interview; that has sometimes been referred to as a disciplinary hearing. The letter informing Mr Walton was dated 4th September 1990. In fact the letter was sent before any formal statement had been taken from Mr Laidler, but prior to the hearing, a Mr Liversey, another Inspector, had taken a statement.

The hearing on the 7th September was the start of the disciplinary proceedings. Those proceedings went through that hearing and two subsequent appeals. In fact, the allegation was one of theft, although possibly with experience the Company would, in the future, allege a breach of regulations rather than having to prove the full technical meaning, in the law, of the word "theft". But in any event the Tribunal's duty, having listened to the evidence, was to decide what was the reason for the dismissal - That they found as conduct - and then to proceed to apply the provisions of Section 57(3) of the Employment Protection (Consolidation) Act 1978 . That, in broad terms, involves two aspects the first, the so called Burchell test, namely, had this employer in all the circumstances and upon the information before it, sufficient information; and then, a second aspect of this branch of it, namely, after sufficient investigation to reach the conclusion that the conduct alleged had actually taken place. Then, the second aspect of Section 57(3), in broad terms, is to see whether the procedural aspects were fair.

The criticisms made by the Tribunal and upon which they found that the dismissal was unfair are contained in paragraph 4 on page 5 of the actual decision itself. It is to be noted that they go to procedure; they do not, as we read them, go to the question of whether or not the Company were entitled, on what was known to them, to reach the conclusion that in fact the misconduct had taken place.

The matters concerned are threefold and we read from paragraph 4:

". . . it was no part of their duty to substitute their own evaluation of a witness for that of the employer, particularly when that evaluation had been confirmed following two appeals, nevertheless they considered that they would be failing in their duty under section 57 of the Act if they did not consider certain procedural matters which gave rise to concern."

then they turn to those procedural matters:

"The matters which concern the Tribunal were, firstly, the fact that Mr Liddle's letter of 4 September 1990 notifying the applicant that a disciplinary hearing had been arranged was written before there had been any investigation whatsoever of the initial report from Mr Lake. Secondly, that the applicant had neither been interviewed or asked whether he wished to make any statement before the disciplinary hearing which meant that any points which he wished to raise had not been investigated before the disciplinary hearing took place, and thirdly, that the circumstances and manner in which the reconstruction arranged by Mr Liddle took place were unsatisfactory inasmuch as it appeared that no attempt was made to check that the vehicles were positioned in precisely the manner in which Mr Laidler and the applicant stated they had been, that no check was made to see precisely what could be seen when the hopper was being interfered with and that the applicant was unaware that the reconstruction was taking place and was certainly not given the opportunity of being present."

Those are the procedural criticisms. Then the Tribunal continue:

"Taking all these matters into account and without in any way attempting to substitute their own evaluation for that of the respondent the Tribunal were of the unanimous view that the procedural defects to which they had referred were such as to render the applicant's dismissal unfair and in consequence they were of the unanimous view that he was unfairly dismissed."

Those criticisms to which we have there referred concern, first of all, the preliminary, the first hearing, which was in part investigation, in part disciplinary and secondly, to the question of the reconstruction which took place. It is therefore necessary to go back to see, in fact, what did happen at those disciplinary procedures.

The first hearing took place on the 7th September. This was in front of Mr Liddle and representing Mr Walton were the Chairman of his union branch and the Secretary, I think, Mr Howkins and Mr Jaga, Mr Jaga to take the notes Mr Howkins the Branch Chairman was there and he represented Mr Walton throughout. The matter was carefully investigated it started at 10 o'clock in the morning, and in fact, did not finish until the afternoon. There had been some adjournments and indeed over the lunch time adjournment Mr Liddle thought he ought to have a reconstruction. He invited Mr Howkins to accompany him to the compound. They positioned a single decker and double deck bus with a view to seeing what the visibility was from the back seat of the double deck bus. The Applicant, Mr Walton was not present at that time, but the reconstruction took place in the presence of Mr Howkins and as far as we can gather there was no complaint by Mr Howkins that it was unfair or that the view was in any way blocked so that what Mr Laidler said he had seen, could not be seen.

The disciplinary hearing resumed after lunch at 2.30. Mr Walton was told what had happened; told about the experiments and the triple wallets and he was told that Mr Liddle had reached the conclusion that the complaint was true and that he had no option but to dismiss him for gross misconduct. A letter was sent confirming that view.

An appeal took place. Mr Howkins in particular, and rightly, asked that he, Mr Howkins, should have an opportunity of seeing and hearing Mr Laidler. So Mr Jameson, who is the Administration Manager arranged that he and Mr Howkins should go and see Mr Laidler. They did so on the 11th September. On this occasion, Mr Laidler was seen by them both, he maintained his story with some slight variations and he was given a chance to think about it at the end of that interview. Mr Jameson dismissed the appeal.

(j) of paragraph 2 of its decision where they say this:

"There was an appeal hearing conducted by Mr Jameson on 13 September 1990 at which Mr Liddle's original decision was upheld and the applicant again exercised his second right of appeal and a second (final) appeal hearing took place on 26 September 1990 in the presence of 3 Managers of the respondent when they also confirmed Mr Liddle's decision."

That is all that is said about those appeals.

We have had the advantage of seeing a bundle of documents; we have not seen the Notes of Evidence, but we have seen a bundle of documents stretching over some 50 pages. They include amongst them the notes taken at the first hearing and at each of the appeal hearings. They are clearly not a transcript but reading through them no one could have any other impression but that the greatest care had been taken during the two appeal hearings to see whether there was any criticism of the way the matter was investigated; any criticism of the approach of those hearing these appeals, and indeed, Mr Howkins and Mr Jaga were there, and on the last occasion one of the national officers. The point was specifically put to the trade union members, "did they think it was fair? had they got any complaints and so on?" That is abundantly clear, indeed, we do not understand the argument is to the contrary. Mr Walton himself, it is said, could not have objected, but in fact he had very capable and strong trade union representation. A number of points were made and the care with which they are dealt is apparent from those notes.

The appeals were clearly, in our judgment, rehearings. Assuming that there had been any errors in the procedure before the initial hearing then those procedural defects could be remedied by the appeals if they were appeals de novo. Here, it is quite clear, that the whole matter was reviewed de novo. But the important point taken by Mr Winch, for the Company is this, that that point was taken by the solicitor in front of the Industrial Tribunal but nowhere do the Industrial Tribunal deal with the submission that any procedural defects, which were not admitted, were remedied by the appeal and that is why we refer to that very short six line paragraph where the Tribunal deal with the appeals.

Moreover, there were no complaints during those appeal hearings and, in our judgment, it must amount to a flaw, an error in law, that a clear submission made in that way was not dealt with in the decision, because in our judgment, although it is not for us to reach a conclusion, it seems on the documentation before us that the argument was clearly sustainable. Whether it succeeded or not is another matter, but the argument was clearly sustainable. In our judgment, therefore, whether the Tribunal was entitled to reach the conclusion that the procedure which was agreed with the trade union and which had been carried through was erroneous, we do not know, but even if they were entitled to reach that conclusion, in our judgment, the argument that the Tribunal failed to deal with the question of the appeals, and the remedial effect of the appeals, is such as to render the decision flawed.

However, there is a second point raised in this appeal. That is that the learned Chairman had an interest which should have been declared. It is not suggested for one moment that he was actually biased, but it is suggested that he should have disclosed an interest in the matter about which the parties should have been notified so that objection could have been taken to his presiding at the hearing if the parties had been so inclined.

The background to this submission is as follows. Mr Jameson, to whom we have already referred, swore an affidavit and the jurat is the 5th June 1992. He points out that prior to 1st May 1991, the bus Company, the Cleveland Transit Limited, was jointly owned by three Borough Councils. It became privately owned, a management and workforce buyout, with effect from 1st May 1991. Prior to May 1991, in or about February or March, the Company had sought tenders from firms of solicitors to act as legal advisers and to carry out the legal work of the Company. The learned Chairman was a senior partner in a firm of solicitors, it was one of those whom the Company had approached seeking a tender and the Company had spoken to another partner in the firm and another partner in a different branch office of the firm. It was suggested that during discussions information had been given to that other partner about three cases including the present case. In fact, the tender from that firm, the learned Chairman's firm, was not accepted and it so happens that the firm of the solicitor that represented the Company before the Industrial Tribunal tendered successfully.

After the first hearing, on the 29th May, Mr Jameson discovered that the learned Chairman was the senior partner in the firm of solicitors who had been unsuccessful in tendering for the work. He did not, so we are told, inform the solicitor acting and as the result the point was not taken on the second day of the hearing, namely, the 17th June and the matter proceeded to a conclusion. A conclusion, we say, on liability but compensation or re-instatement has not been considered as yet. It was adjourned. The point was taken, that therefore, the learned Chairman had an interest, it should have been disclosed and the decision must therefore be regarded again as erroneous.

The learned Chairman has been good enough to comment on that affidavit and the Notice of Appeal. He pointed out that although he, and that other partner from the other office, met regularly and monthly, they were both aware of the tenders, but he was not aware that any information had been given about specific cases and thought that the type of work that was involved was what he described as low value, personal injury, claims. No details, in any event, had been discussed about those other cases. He, offered any other information we might need.

The point taken by Mr Bowers, first of all, is that an objection should have been taken before the date of that second hearing in June. He points out from the decisions that that is clearly so. The distinction is taken in the decisions between, what has conveniently been called, an "interest" bias and a "conduct" bias. The matter came before this Tribunal in the case of Red Bank Manufacturing Company Ltd v. Meadows

[1992] ICR 204

, that was a division of this Tribunal presided over by Mr Justice Tucker; that was a case where the allegation was that a member of the tribunal had fallen asleep. It was pointed out there, that in a situation such as that, the point should be taken when it becomes obvious. If it is a conduct case, then it may very well be, and one can understand how parties can feel, that it would probably only exacerbate the situation if they were to take the point during the hearing and not to await the outcome. However, where it is an interest case it seems to us that the appropriate time to take it, is when it is known to exist, or when it is appropriate to raise that matter. It is clearly fundamental and it will enable to the tribunal to examine the situation themselves. In the case of Barber v. Thames Television

[1991] ICR 253

we have made it clear that if a point of law is not taken below it ought not to be allowed to be taken in this Court and a fortiori, where its an interest allegation, then the point should be taken below before it can properly be taken here.

The other case to which we have been helpfully referred is the case of Peter Simper & Co. Ltd v. Cooke

[1986] IRLR 19

. In that case the division of this Tribunal was presided over by Mr Justice Peter Gibson, as he then was. The facts of the matter do not seem to us to be important, it was in fact a conduct case, but there are two passages which are, in our judgment, of assistance in the present case, paragraph 10 and paragraph 21. Paragraph 21 says:

"We think it right to stress the highly unusual facts of this case. Save in extraordinary circumstances, it cannot be right for a litigant, unhappy with what he believes to be the indications from the Tribunal as to how the case is progressing, to apply, in the middle of a case, for a re-hearing before another Tribunal. It is, in our view, undesirable that the Tribunal accused of giving the opinion of bias should be asked itself to adjudicate on that matter. The dissatisfied litigant should ordinarily await the decision and then, if he thinks it appropriate, he should make his dissatisfaction with the conduct of the case by the Tribunal a ground of appeal."

That, clearly, is referring to the conduct type of allegation.

However, it is vitally important that the interests of fairness of justice should, on the face of it, be quite apparent. That was stressed by the learned Lord Justice Peter Gibson at paragraph 10, where he says this in the judgment of this Tribunal:

"We accept that there is jurisdiction for a tribunal to discontinue a hearing and order a re-hearing. But those cases also make it clear that that power should be exercised most sparingly and only for very good reason, a bare allegation of bias is not sufficient. We take it to be axiomatic that justice before a tribunal must not only be done but also be manifestly seen to be done. That applies as much, in our view, to a tribunal such as the industrial tribunal as it does to a formal court of law. Not only must there be no bias on the part of the tribunal but also the tribunal must not give the appearance of bias. Where there is an allegation of bias based on the conduct of one or more members of the tribunal at a hearing the test is, in our view, an objective one, would the reasonable observer present at the hearing, not being a party or associated with a party to the proceedings but knowing the issues, reasonably gain the impression of bias. That impression may be given by the appearance of a closed mind against a party on a matter which calls for a decision by the tribunal when that party has not yet presented all his evidence relevant to the point or had the opportunity of addressing a tribunal on that evidence."

There are many earlier cases emphasising the importance of the appearance of total fairness we were also referred to the well known earlier case of The King v. Sussex Justices. Ex parte McCarthy [1924] IKB 256, that was the well known case where the clerk retired with magistrates although his firm was involved in the case and the learned Lord Chief

Justice Lord Hewart said at page 259:

"The answer to that question depends not upon what actually was done but upon what might appear to be done. Nothing is to be done which creates even a suspicion that there has been an improper interference with the course of justice. Speaking for myself, I accept the statements contained in the justices' affidavit, but they show very clearly that the deputy clerk was connected with the case in a capacity which made it right that he should scrupulously abstain from referring to the matter in any way, although he retired with the justices; in other words, his one position was such that he could not, if he had been required to do so, discharge the duties which his other position involved. His twofold position was a manifest contradiction. In those circumstances I am satisfied that the conviction must be quashed, unless it can be shown that the applicant or his solicitor was aware of the point that might be taken, refrained from taking it, and took his chance of an acquittal on the facts, and then, on a conviction being recorded, decided to take the point. On the facts I am satisfied there has been no waiver of the irregularity, and that being so, the rule must be made absolute and the conviction quashed."

There was also a case in "The Times" of this morning (24.5.93) Regina v. Gough (Robert) . The facts of that case are distinguishable and we do not think that it is important to refer to it in detail in this judgment. However, what appears from the authorities, seems to us, to be this, that where an interest becomes apparent, which merits comment or investigation, then that point should be taken at the earliest opportunity before an industrial tribunal lest an argument of waiver should be raised as it has been in the present case.

We are satisfied that this appeal can be allowed and the matter remitted to be heard before a different tribunal without reaching a clear decision on the bias argument. However, we believe that it is essential that the public should have total confidence in the impartiality of a tribunal. In some cases it has been known for chairmen to ask their members before sitting whether they know any possible connection between themselves and anyone involved in the case. That may be an extreme course, but if there is any doubt then there ought to be a disclosure and the parties ought to be asked whether they have any objection. Speaking from this Court's point of view, we tend, if there is any sort of doubt about it to ban ourselves from hearing on appeal. We would therefore urge all chairmen to err on the side of caution.

We have no doubt at all that this learned Chairman, if he had really had the matter drawn to his attention, he would have asked the parties whether they would have had objection. It seems likely, in the circumstances, they would have objected, indeed he might have preferred himself to stand down, but that would have been a matter for him at the time. We give no judgment and no decision on that matter we merely raise those issues by way of comment in the circumstances of this case. We are satisfied here that the appeal must be allowed and the case be re-heard before a differently constituted tribunal as directed by the learned Regional Chairman.