A F Blakemore & Son Ltd v Proffitt [1994] UKEAT 14_94_2010

EAT
A F Blakemore & Son Ltd v Proffitt
[1994] UKEAT 14_94_2010 · 1994-10-20

JUDGE HULL QC:

In this case Mr Proffitt's employment began in 1988 with the Appellants and they, amongst other enterprises, have a Cash and Carry, quite a large establishment apparently, at Saltley in Birmingham, where something like 90 or 100 people, we are told, are employed. He, as I say, began in 1988 and his employment went on until 11 January 1993 when he was dismissed. I may not have got the earlier date right, I have taken it from the papers. There have been suggestions that he, apparently, had been there for eight years.At any rate, there had been no previous complaints against him. He had risen to the post of Customer Service Manager, which we are told, and I am sure it is right, is a position of trust where the strictest standards are reasonably expected of him in the matter of integrity and so on.The events which led to his dismissal are set out in the Decision of the Industrial Tribunal to which I will refer in a moment. He was dismissed on 11 January on the basis that he had taken a discount on an article which he be bought, an electronic game. It had been reduced from £12.99 to (I think) £9.99 and he took a further discount, in circumstances which the Tribunal explained, to £6.99 and that led to various questions being asked. Questions were asked immediately because a young woman who was at the cash desk, the checkout, immediately complained because she had sought a discount the day before apparently, and had had it refused.So matters were looked into straight away. The General Manager there was a Mr Griffiths. It seems to me that the best thing to do is to refer to the Decision of the Industrial Tribunal to set out the facts, which they do with great thoroughness. They say, after setting out that Mr Proffitt had never been criticised before, never had any disciplinary warning:"2. At the premises at which he worked, the respondents operate a Cash & Carry establishment and it is not in dispute that coming up to Christmas the management decided from time to time to reduce prices of certain items. Two items, an electronic game and a "watch" game had been reduced from £12.99 to £9.99 and from £9.99 to £6.99 respectively. On 23 December 1992, Mr Griffiths the General Manager was serving a customer and Mr Proffitt was several yards away. He was hailed by Mr Proffitt, who was holding up an electronic game `The Terminator' and called to Mr Griffiths: `Alright for £6.99 Bob?' and Mr Griffiths replied: `Yes!'. Mr Proffitt knew at that time that that game had been reduced from £12.99 to £9.99 but was asking for a further discount of £3.00. Mr Proffitt then went to the `check out' till and the girl on the till, Miss Nusra Karim told him that that game was £9.99 and said that she had asked for the same game at £8.99 the day before and had been refused. At any rate, Mr Proffitt saw Miss Karim go over to Mr Griffiths and speak to him. In fact she had approached Mr Griffiths complaining that he had refused to allow her to buy the same game at £8.99 the day before and asking why Mr Proffitt had one for £6.99. Mr Griffiths told her that he had made a mistake, he thought it was the cheaper product that Mr Proffitt was buying, the `watch' game which was reduced from £9.99 to £6.99, although the `watch' game was very much smaller than the Terminator game. Mr Griffiths went over to Mr Proffitt (the applicant himself says that they met halfway and he was approaching Mr Griffiths) and said: `You have got me in the shit, that was a £9.99 game not £6.99. Nusra had asked for it for £8.99 yesterday and was refused. I want you to put it right'. (The applicant's evidence was that Mr Griffiths said: `Sort it out', or words to that effect). Mr Proffitt had already recorded in the till the charge of £6.99 and told us: `I went back to the other till first and then to Miss Karim's till to cancel the first entry, giving Nusra the impression that I was not taking a discount on the item and I then went over to another till out of sight and took out the item at £6.99'. In his words in evidence: `I wanted to placate the girl, so that I had to buy it again'".Pausing at that point, it does not look as though Mr Griffiths is complaining of anything but the fact that he himself had made a mistake and further, that as a result of this, there was the embarrassment because Miss Karim herself had been refused the discount the day before. What he told Mr Proffitt to do was not to pay the full £9.99 in terms but he said:
"You have got me in the shit, that was a £9.99 game not £6.99. Nusra had asked for it for £8.99 yesterday and was refused. I want you to put it right"
. He did not say: "You are going to pay the full price" in terms, but that is what he said.
"3. That evening Mr Griffiths had a telephone call from the Assistant Manager [I think that is a Mr Doyle] who told him that he had checked Mr Proffitt's purchases and found that he had paid only £6.99. Mr Griffiths told him that it would be `sorted out in the morning'. I pause here merely to say that Mr Griffiths in evidence told us that he had been mistaken in telling Mr Proffitt that the cost of the item was £6.99 and when that was told to him by the check out girl, he at once spoke to Mr Proffitt and he told us `I expected him to put £3 into the till to make it right, I did not think he was defrauding the company'.
4. After the Christmas break the company resumed business on 4 January 1993. Mr Griffiths unfortunately made another mistake because he did not deal with the matter until a couple of days later when he spoke to Mr Wilcox a director. On Thursday 7 January 1993, Mr Wilcox the Operations Director contacted the Personnel Resources Manager, Mrs Cowley, who then told him to suspend Mr Proffitt pending investigations and that day Mr Proffitt was duly suspended by Mr Wilcox. Mr Wilcox had told Mr Proffitt that Mr Griffiths's instructions `to put it right' or `sort it out' meant that Mr Proffitt was to put the item back in at £6.99 and buy it out at £9.99. Mr Proffitt told Mr Wilcox that at no time did Mr Griffiths state he was to purchase it at £9.99 without any staff discount and he took Mr Griffiths's words to mean that he was to use his discretion. He was told by Mr Wilcox that he was suspended until Monday 11 January 1993, when he should report back at 10 am".Pausing there, if indeed Mr Griffiths had quite clearly made himself plain to Mr Proffitt, "You ought to put that extra £3 into the till", it is a little curious (and this is only a comment, but it is a little curious) that Mr Wilcox found it necessary to tell Mr Proffitt what had been meant by Mr Griffiths, but there it is. Then they go on:"5. On Friday 8 January 1993, Mrs Cowley and Mr Wilcox interviewed three employees, Mr Griffiths, Mr Doyle, the Assistant Manager and Miss Karim and all made statements. [Now we come to the disciplinary hearing]. On Monday 11 January 1993 Mr Proffitt was interviewed by Mr Wilcox and Mrs Cowley. He was asked if he wanted a witness to be present and declined. He then outlined what had taken place. He mentioned a number of other occasions when discounts had been given to employees and he thought that when Mr Griffiths said: `Sort it out' he took it to mean that he could have the item at a price below the agreed selling price but to sort it out with Miss Karim using his discretion. The interview was adjourned because Mrs Cowley and Mr Wilcox were concerned about the staff discount referred to by the applicant and they interviewed six or seven supervisors".It was the unchallenged evidence that the staff handbook provided that the staff were not to have discounts apart from those which were offered to customers. So that was common ground. What were they doing interviewing these six or seven supervisors? The answer to that, I think, must be, the only answer can be, to see whether the code, the rule, was more honoured in the breach than the observance or whether there were regular breaches or something of that sort."They asked all of them individually the same question: `Are staff allowed to buy stock at less than the ticket price at which we sell the stock to the customers?' All, except one replied: `No'. The exception was a supervisor who said he had a damaged phone at a lower price and it was agreed by Mr Wilcox and Mrs Cowley that damaged goods could be bought at a lower price than the ticket price. They then discussed the matter [that was, of course, Mrs Cowley and Mr Wilcox] and they decided that Mr Griffiths, the General manager, should be disciplined because of the time which had elapsed from the 24 December 1993 until 7 January 1994. As to Mr Proffitt, they took the view that his position of Customer Services Manager was one of great trust and he was responsible for the check outs and he knew the procedure about staff purchases which is laid down in the Staff Handbook. Mr Proffitt was recalled and was told that he had been dismissed on the grounds of gross misconduct".There was then an appeal to a Mr Patterson, a senior Manager. We do not know much about that appeal but he saw Mr Proffitt and he interviewed a number of witnesses and the Tribunal go on:"6. .... However, he came to the conclusion that the dismissal must stand. There was a second appeal to Mr Blakemore, the company Managing Director, which was held on 10 March. There were no witnesses present, but Mr Blakemore made a full investigation of the circumstances surrounding the dismissal and had discussions with Mr Griffiths, Mr Wilcox and Mr Machin the Director of Personnel. Mr Blakemore wrote on 19 March a letter to Mr Proffitt, telling him that he had not been dismissed unfairly".So that was the situation. There were a number of comments which could be made on that by anybody, simply reading that. It appears that Mr Wilcox and Mrs Cowley went off and saw these six or seven supervisors and that, on any view of their evidence, was of some importance, and it might be of critical importance. They did not go back apparently to Mr Proffitt and say:
"well we have been making further enquiries about your story and managers as well as supervisors have given us answers as follows"
. They took the decision without any further interview, apparently, with Mr Proffitt, that he should be dismissed. And that was upheld on appeal.So that a very large section of the evidence, perhaps a very important part of it, was simply not put to him. There it was. There was an appeal. We are told that the appeals would have put anything right. That may be so, but again we have not heard of course, the evidence about those appeals.The witnesses who were called in front of the Industrial Tribunal (to go forward) were Mr Griffiths and Mrs Cowley and of course, Mr Proffitt himself. The Managers responsible for dismissing and affirming this dismissal, Mr Wilcox, Mr Patterson and Mr Blakemore were not called before the Tribunal.What was put before the Tribunal was Mr Griffiths's evidence, which of course was in front of the Managers themselves. What mattered, as has been pointed out to us, quite rightly, was the enquiries made by the company, not what the witness, Mr Griffiths, said when he appeared in front of the Tribunal.Then the Industrial Tribunal set out the well known cases of British Home Stores v Burchell [1980] ICR 303 and Iceland Frozen Foods Limited v Jones [1983] ICR 17 , and they referred to other cases too on this topic.If an employee complains of unfair dismissal the Tribunal is concerned, not for themselves to judge him, but to look and see whether, if he is dismissed for misconduct, the employer formed his conclusion on reasonable grounds, after a fair enquiry and whether it was a reasonable conclusion. That is the enquiry for them and then, they must go on to decide whether the reaction of the employer was one which fell within the band of responses which a fair employer might show in all the circumstances. They correctly directed themselves about that and then they reached their findings. They were as follows."8. The Chairman takes the view that Mr Wilcox and Mrs Cowley honestly believed that Mr Proffitt had been guilty of an act of gross misconduct in that he obtained a discount to which he was not entitled. They had reasonable grounds for so believing; they had the evidence of Mr Griffiths; the evidence of other employees about the operation of the staff purchases and the company carried out a reasonable investigation which included two appeals. Mrs Cowley, Mr Wilcox, Mr Patterson and Mr Blakemore took into account the unblemished service of Mr Proffitt, but decided that he had to be dismissed because he was in a position of trust - he was a manager. In the Chairman's view, the decision to dismiss was within the band of reasonable responses mentioned in the Iceland Frozen Foods case. Therefore he finds, not without a great deal of sympathy for Mr Proffitt, that the dismissal was fair under s.57(3) of the Employment Protection (Consolidation) Act 1978".But the two Members, of course equally with the Chairman, were judges of fact and had heard all the evidence and were as well able to judge the evidence and the reality of the industrial situation (if I may put it like that) as the Chairman himself, and were well entitled to do so, and they took a different view. They said as follows."9. The two other members of the Tribunal take the view that Mr Proffitt was unfairly dismissed for a number of reasons:(a) the evidence given indicated that there were ambiguities resulting in misunderstandings between Mr Griffiths and Mr Proffitt at the time of the initial incident. Whilst Mr Proffitt had not clearly indicated that he was requesting a discount, there was no other obvious reason for asking Mr Griffiths to agree £6.99 for a product that was priced on the shelf. Subsequently Mr Proffitt was told: `Get it sorted out' when a complaint was made by Miss Karim, who had been refused a discount the previous day. The two members also questioned if it was accepted normal practice for no staff discounts to be given under any circumstances, why Miss Karim had requested a discount the day before. This fact put a doubt in their minds that the rules were always followed. Mr Proffitt took this to mean: `Sort it out', with Nusra and he voided the transaction at £6.99 in the presence of Nusra to achieve this. His actions at another cash point was to make the transaction out of Nusra's sight and to retain the discount believed to have been authorised by Mr Griffiths. Mr Griffiths in evidence said he intended the higher price to be paid but it appears rather strange that he was not more precise.(b) Bearing that in mind, and Mr Proffitt's statement that goods had been discounted (against the company's written rules) to employees, the company had acted unreasonably and unfairly in dismissing him. There was, according to the evidence of Mr Griffiths and Mr Machin and Mrs Cowley, a substantial degree of uncertainty as to whether staff could obtain discounted prices and under what circumstances.(c) [and this is the most important part]. The applicant was dismissed on facts which were at least blurred and possibly quite obscured. The dismissal and subsequent appeals were based on the assumptions that (i) Mr Proffitt had knowingly defrauded the company by not paying the full price for a perfect item and that knowing it was against company policy had obtained a staff discount (ii) Mr Proffitt had known that Mr Griffiths had made a mistake when asked about the price of goods and that he then deliberately misinterpreted Mr Griffiths's instructions `To sort it out' as to just placate the cashier but from the evidence presented by Mr Griffiths and Mrs Cowley and the statements taken by Mr Wilcox, it was unfair for these assumptions to be made. It is not clear what the company policy is or was with regard to staff purchases. It was unclear what Mr Griffiths meant when he confirmed the price of £6.99 for the game and even more uncertain as to what he meant when telling Mr Proffitt to `Sort it out'. It would have been equally reasonable to assume from the evidence that Mr Proffitt had asked for a staff discount, whether in error or not, he had been told `O.K'. Then the situation coming to light, not understanding Mr Griffiths's instructions as he meant them to be understood; that is to say he had endeavoured to ensure the cashier did not think he (Mr Proffitt) had been allowed to purchase goods at a discount, and then proceeded with the transaction anyway, rather than pay the full price for the goods. The evidence was sufficiently uncertain as to what was in the minds of both Mr Proffitt and Mr Griffiths as well as the company policy being ambiguous that any decision to dismiss on the basis of such evidence, would be rendered unfair".We would put it like this. It is elementary that if the employee is to be dismissed for misconduct, the misconduct of which he is guilty, alleged to be guilty, must be made plain to him. That, at any rate, is an element of natural justice and there must then be a fair enquiry and a fair decision on the evidence disclosed by the enquiry. What was the charge against this employee? Was Mr Proffitt charged with fraud? Was it alleged that this was a fraudulent attempt to obtain a discount, that he had succeeded in deceiving Mr Griffiths, that when Miss Karim, unfortunately for him, found out about it and complained, Mr Griffiths made it plain that he was not to have the discount and was to pay the proper price of £9.99?So was he acting fraudulently throughout? Or was it simply a case of ignoring the staff handbook which he said was, from time to time, ignored in the sense that the Manager, Mr Griffiths could authorise a further discount and had told him to put it right simply in the sense of avoiding the embarrassment with Miss Nusra Karim, that she had been refused the discount?That was an important distinction in our view. It was fundamental to fairness that it should be made quite plain to Mr Proffitt: was he being charged with dishonesty? Well, it does not appear that he was from the IT3 here and what we have read, a letter written to him, what is said in the Notice of Appearance:"The applicant invoiced and purchased goods for his own use at below the agreed selling price, this is a violation of written company policy".That might raise a number of questions, but it most certainly was not alleging fraud, nor apparently was fraud raised as the essence of the matter before the Industrial Tribunal until the very end of matters when Mrs Cowley was being questioned by the Members of the Tribunal themselves. She said for the first time "it was a deliberate attempt to defraud" and that was raised again when the company applied to the Industrial Tribunal for a review, because then they said, and this is what was alleged in the letter which is at pages 8 and 9 of our bundle: "Mr Proffitt admitted that he defrauded the Company".It does seem to us that it was quite essential to distinguish. Was this simply a breach of the Company handbook in that Mr Proffitt, perhaps rather cheekily, (that would all depend on the view which one took of the matter), perhaps improperly, asked for a discount which the handbook said he was not to have, relying perhaps on Mr Griffiths's good nature and succeeded in embarrassing Mr Griffiths and arousing Miss Karim's indignation, and that he misinterpreted what was said to him or else that Mr Griffiths failed to make it plain that he was to pay the full price? Was that what was alleged against him and proved against him, or was it an allegation of dishonesty; that he intended to trick Mr Griffiths, that he knew perfectly well that he was required, when Mr Griffiths found out about it, to pay the full price and that he was acting dishonestly - in essence of stealing from the Company?We have already commented on certain strange features. If he was on a charge of fraud, why was that not spelled out? Why was that not made plain to him? Why was he not confronted with the evidence of the six or seven supervisors who said that the Company handbook was not departed from:
"you must have known that the Company handbook was complied with, you were dishonest weren't you"
. He was entitled to be confronted with that evidence. The employers might have said to him:
"well look here, you see what these six or seven supervisors say. Now come on, you have been deceiving us haven't you. You knew perfectly well you were not allowed to do this, it is very important"
. On the contrary the decision to dismiss was taken without this evidence being put to him. And it appears to us that there is justice, therefore, in what the Members are saying. They say:"9(c) .... facts were at least blurred and possibly quite obscured. The dismissal and subsequent appeals were based on the assumptions that(i) Mr Proffitt had knowingly defrauded the company ......(ii) Mr Proffitt had known that Mr Griffiths had made a mistake .... and that he then deliberately misinterpreted Mr Griffiths. ....".In other words, these matters, which were absolutely vital to a decision on fraud, were simply passed over in silence, as being matters of no importance. It was put to him that he had broken the provisions of the handbook and the question was, whether the handbook was in fact customarily ignored or regularly ignored or not? The real question was the assumption, the Members find, that he was dishonest and that was precisely the matter which was not being put to him. Of course, it is not for us to say whether that was the true view or not.It is for the Company to adopt a fair procedure and to judge the matter fairly. And it is for the Tribunal to say, having heard such evidence as is put before them and made such other enquiries as they can, and feel they ought to, whether the Company adopted a fair procedure.The majority of the Tribunal felt that they did not and that the vital question which the Company should have considered was passed over in silence and the answer was assumed. They were entitled, in our view, very well entitled, on the evidence to form that view. That only emerged eventually at the hearing before the Industrial Tribunal when the Tribunal itself, being concerned no doubt about this matter, questioned Mrs Cowley and she came out with her answer that this was fraud.In those circumstances, clearly, even on paper there are grounds for disquiet. We do not have to go into that at all. It was a question for the Tribunal whether they felt that Mr Proffitt was fairly treated in the way in which the employer carried out his enquiries and in the decision which the employer reached to dismiss. They were well entitled, in our view, to find that he was not fairly treated.Out of respect for Miss Chudleigh's argument, it is true that one view of what the majority said is that in some respects, at any rate, they were putting themselves in the position of the employer and looking at the evidence as it was. They were not, of course, entitled to do that but on the main part of their decision, the essential part of the majority's decision, we think they were well entitled to reach the conclusion that the employers had not conductedtheir enquiries fairly and had, in the circumstances, treated Mr Proffitt unfairly.So in those circumstances, the appeal has to be dismissed.