John Lewis Plc v Jones [1993] UKEAT 709_92_1602

EAT
John Lewis Plc v Jones
[1993] UKEAT 709_92_1602 · 1993-02-16

JUDGE HARGROVE QC:

The Industrial Tribunal in this matter held, in Reasons given on the 25th August 1992, that the Respondent had been unfairly dismissed on the date given as the 19th January (I think that is a misprint probably for the 11th January 1992).By a further decision dated 14th August 1992 a compensatory award of £4,502.74 was given.In yet a further hearing there was a finding that there was no contributory fault.The Appellant here contends that the decision that the Respondent was unfairly dismissed was perverse and that there was a further error, an error of law, in not finding that there was contributory fault.The case has a number of unusual aspects. Before the Tribunal the Respondent did not give evidence and the Tribunal held that the reason for the dismissal was the Respondent's dishonesty and that such dishonesty amounted to conduct of Section 57 of the Employment Protection (Consolidation) Act 1978. The Respondent had been found guilty by the employers of dishonestly inflating expenses on his own admission. I pause there to indicate this: Mr Jones is unrepresented today and I have to point out that the question of fact there is no longer a matter for us and we are obliged to hold by findings of fact by the Tribunal.The decision of the Tribunal was based upon the parity issue. The main findings of fact on this aspect are set out at paragraphs 43-45 of the first hearing, these read:
"At the same time as the applicant was investigated, Mr Jennings, a colleague of the applicant, was also investigated. He too had put in false claims and he too had claimed for alcohol when he was not entitled to do so. Page 19 of the bundle R1 shows a comparison of the claims made by Mr Jennings.
Mr D'Arcy decided not to dismiss Mr Jennings but decided instead to give him a final written warning. He did this on the basis that Mr Jennings had not actually received cash in his pocket over and above the amounts of his claims, since he had apparently used them for alcohol.

Mr Jennings had been employed by the respondents for approximately 10 years."

At paragraph 58 the Tribunal went on:
"The case has, however, been complicated because of the parity of treatment argument put forward by the applicant, namely that he has not been treated the same as his colleague, Mr Jennings.
Mr Jennings was discovered at the same time as the applicant in exactly the same circumstances as the applicant. He too had made false receipts and he claimed for payment for alcohol to which he was not entitled, but he received a final written warning for his conduct and was not dismissed.It appeared during the course of the investigation that what had been taking place was that the till receipts which the applicant and Mr Jennings had received for both their lunches and their drinks were put in a draw at the Walkford Hotel, Christchurch, for a prize. This draw was conducted for the benefit of all the customers. When the applicant Mr Jennings placed the till receipts in the draw they then asked the till assistant to produce a written receipt which they could then produce to their employers. It had been alleged that this written receipt was not the same as the till receipt, although there seems to be some dispute about this because the written receipt covered both the lunch receipt and their purchases at the bar.The only reason for the difference of treatment between Mr Jennings and the applicant which has been put forward by the respondents is that Mr Jennings did not receive additional cash, but spent it all on alcohol. This is the difference upon which the respondents have sought to rely.During the course of his evidence Mr Stevens, the partners' counsellor, stated `I agree, it is very close'. He also said `I think it is just about all right' (referring to the different decisions to dismiss the applicant, and merely to warn Mr Jennings).In the Tribunal's view, where both employees have been guilty of making dishonest claims, this appears to be a distinction without a difference. It is true that the applicant did have a small amount of cash in his pocket, an amount which has been variously placed in the evidence before us today as ranging from 30p to £1.40. However, to us this does not seem to be significant, particularly when Mr Stevens in the course of his evidence said `Alcohol is cash in the pocket as well', and the respondents admit that Mr Jennings had claimed payment for alcohol to which he had been not entitled.Therefore, although we would have no hesitation in upholding dismissal if both had been dismissed, since Mr Jennings has been treated differently from the applicant and has merely been given a final warning, we cannot say that it was reasonable in those circumstances for the respondents to have dismissed the applicant. Given the fact that they had treated Mr Jennings more leniently, it was not within the bad of reasonable responses open to them to dismiss the applicant."Miss McNeil urges upon us that the decision of the employers to make a distinction between the Respondent and Mr Jennings was within the band of reasonableness. Put another way, that dismissal could only be unfair on the basis of inequality if the distinction is so irrational that no employer could reach that decision. That paraphrases the decision in Securicor Ltd v. Smith [1989] IRLR 356 p.360. We have reached the conclusion that there was evidence upon which the Tribunal could find that the employer was making a distinction without a difference. Both men had been involved in obtaining false receipts; both had obtained small sums, the only distinction was that the result of the fraud was that Mr Jones was pocketing small cash sums ranging from 40-60 pence and giving an overall cash benefit of 30 pence in accordance with the schedule set out on page 19 of the documents. Mr Jones had 24 years service and was on the point of being entitled to a six month sabbatical. Mr Jennings had ten years service. Mr Stevens in evidence for the employers commented that the cases were very close but he thought it was just about all right to make the distinction. The Tribunal formed the view on the facts that whereas Mr Jennings had spent the profit in drinking, Mr Jones had put the money in his pocket. On that basis therefore the facts were available to the Tribunal and it is not a matter upon which we should and could interfere. There is no question of perversity there.Turning to the question of contributory fault, the Tribunal's findings are puzzling. They begin at paragraph 66 in the following terms:
"In the normal course of events, if we had found the dismissal to be unfair, perhaps because of the procedural shortcomings we have highlighted, we would have been persuaded very easily to place contribution very high, perhaps by as much as 100% where there has been admitted dishonesty. However, although we have considered this matter, in the peculiar circumstances of this case we do not find that there can be any contribution by the applicant since he should have been treated in exactly the same way as Mr Jennings."
I pause there to make a comment by way of an aside, both the Industrial Members of this Tribunal have found the procedures followed by the Appellant to be bizarre in the extreme and very worrying indeed.At the next hearing, at paragraph 12, commented as follows:
"We dealt with compensation on a full liability basis, but if the respondents succeed in their application at the hearing of the review, the compensation may have to be reduced by whatever percentage is deemed to be appropriate."
Miss McNeil comments, and in our view comments rightly, that at that stage the whole question of contribution was being left open.Finally, the Tribunal decided that there was, first of all, no contributory fault and that the decision in Parker Foundry Ltd v. Slack [1992] IRLR 11, did not apply. They do this in this way, in the third decision, paragraph 6 onwards:
"At first sight, the facts of Parker v. Slack are similar, if not on all fours, with the present case. However, in that case we note that the employers had regarded the employee, Mr Slack, as the aggressor, ie they had viewed the conduct of the two employees differently.
In the present case it is difficult to see how the conduct of the two employees could be treated differently, particularly in the light of Mr Stevens' evidence to us t the original hearing. We, therefore, consider that any comments by the Court of Appeal in Parker v. Slack on whether Sections 73(3)(B) and 74(6) apply to a case where the conduct of the two employees is the same, are purely obiter and would therefore not be binding on this Tribunal."I pause there because it seems to me that that is an entirely mistaken approach to the case. The Tribunal continues:
"We are also reinforced in our view in the light of paragraph 39 of Woolf, L.J.'s decision on page 14 where he states:
`Of course it may be the situation would be different if the Tribunal were engaged in calculating the question of appropriate compensation. By that is not a matter upon which this court is required to comment, and I do not do so.'We are not entirely sure to what Woolf, L.J. was referring, but in the present case the Tribunal certainly has calculated the appropriate compensation, and therefore this would appear to be a further ground upon which to distinguish the two decisions."It seems that what the Tribunal has done is not to realise that what is being dealt with there by the learned Lord Justice is Section 74(1) and neither of the subsections with which this aspect is concerned. The Tribunal continues:
"We find as a fact that Mr Jennings' circumstances and the applicant's circumstances are identical, and therefore we uphold paragraph 64 of the full reasons for our decision, and the applicant is entitled to his compensation in full.

The application for a review of our decision therefore fails and is dismissed."

However, the Tribunal went on to say this:
"However, if we are wrong in this matter, we have gone on to consider, for the assistance of the parties, what would have been an appropriate contribution if we were obliged to find a contribution by the applicant.
We refer to paragraph 66 of the full reasons for our decision and we would place such contribution very high. We accept Miss McNeil's arguments concerning the retail trade, but nevertheless we feel that 100% contribution would be unusual and, on reflection we feel that that would be too high even in a case such as this. On the other hand 50% as has been suggested by the applicant's representative would be in our view too low. We feel that 60% is about right."It is pointed out that that is an abrupt change in view between two hearings when there has been no additional evidence placed before the Tribunal. The starting point for consideration of this sort must be the terms of the statute. This has been helpfully set out in the Appellants' skeleton argument:

" Section 73(7B)

Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) . . . . was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly."Section 74(6) reads:
"Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding."
Turning to Parker Foundry Ltd v. Slack [1992] IRLR 11, the headnote puts the matter succinctly in these terms:
"In determining whether to reduce compensation under ss.73(7B) and 74(6), of the Employment Protection (Consolidation) Act, an Industrial Tribunal is confined to taking into account the conduct of the complainant and not what happened to some other employee. The absence of the words `in all the circumstances' in s.74(6), in contradistinction to their presence s.74(1), is significant. Section 74(6), looks only to the causative or contributory conduct of the complainant as a ground for reducing the compensatory award. The words `just and equitable' in that subsection give the Tribunal a discretion to decide by what proportion the award should be reduced. They do not entitle the Tribunal to take into account matters other than the complainant's causative or contributory conduct. Similarly, there is nothing in s.73(7B) which entitles the Tribunal to look beyond the complainant's conduct in considering to what extent it is just and equitable to reduce the amount of the basic award."

Lord Justice Woolf deals with that matter in a slightly extended form at page 12:

"As I read that subsection [he is referring to (7B)] that is also restricted to a consideration of the conduct of the complainant. The language of the subsection is different from the language contained in s.74(6) to this extent, that it does not expressly restrict what can be considered as conduct which was causative of the dismissal of the complainant. It allows the Tribunal to look beyond that, but, as with s.74(6), it is focusing on the conduct of the complainant.
So, on the basis of the language used in s.73(7B), it seems to me that the Tribunal, when properly performing its responsibilities under subsection (7B), is not required or indeed entitled to take into account what happened to the other employee in this case who was a participant in the fight which undoubtedly took place . . ."Finally,

Lord Justice Balcombe's comment in his judgment:

"They do not, in my judgment, entitle the Tribunal to take into account matters other than the causative or contributory conduct as a ground for deciding the proportion by which the compensatory award is to be reduced."
We consider that the Tribunal misdirected itself. It failed to ask the question, what was the cause of the dismissal of this employee? Not, what was the cause of the unfairness? Accordingly, what happened to Mr Jennings in this case is irrelevant on the question of contribution. We are unable to follow the reasoning for the rejection of the Parker Foundry case by the Tribunal, and accordingly upon that issue, we would allow this appeal. We have considered sending this matter back but there has already been an inordinate number of hearings in this case. We have considered all those matters set forth in Section 73(7B) and Section 74(6), we have considered all the guidance given in the Parker Foundry case. Upon that basis we have reached the view that the proper degree of contribution in this case is one of 50%.