Lynn v British Steel Plc [1994] UKEAT 156_92_0905

EAT
Lynn v British Steel Plc
[1994] UKEAT 156_92_0905 · 1994-05-09

JUDGE J PEPPITT QC:

This is an appeal from a decision of the Cardiff Industrial Tribunal sent to the parties on the 20th January 1992. The Tribunal held unanimously that the Appellant, Mr A H Lynn, had not been unfairly dismissed.The appeal raises one short but interesting point. Mr Marshall, on behalf of the Appellant, submits that in assessing the reasonableness of the Respondents' decision to dismiss, the Tribunal relied on its own view of the Respondents' conduct, a view gained from observation of the Appellant in the witness box which by definition would have been denied to the Respondents at the time of dismissal. The Appellant was the Respondents' Section Manager of their Production Control Department at the Bryngwyn Works. He had had a career of 30 unblemished years with British Steel. Part of his job was to requisition or "call off" supplies of pallets as and when they were required from two local suppliers. The main contracts for the supply of pallets were negotiated otherwise than by the Appellant at the Respondents' Head Office at Shotton. The Appellant's function, in relation to those contracts, was no more than to order when required; to ensure that deliveries were made properly and to ensure further that each of the two nominated suppliers received requisitions for equal quantities of pallets.One of the two suppliers was a Company known as Teifi Timber. The proprietor of that Company was a Mr Thomas. The Thomas's and the Appellant and his wife were friends, They had become friends in 1983 and remained so ever since. In the course of that friendship, in both 1989 and 1990, the Appellant stayed in the Thomas's holiday cottage at Newquay in Cardiganshire, in neither case for more than a few days, but in both cases without payment. On the first occasion the Appellant left, I think, a couple of bottles of whisky after he and his family had stayed there. On the second occasion payment was neither sought nor offered. The Respondents received an anonymous indication of this and instituted disciplinary proceedings against the Appellant. What he did was said to have been in breach of a Code of Conduct forming part of the Appellant's Contract of Service. Paragraph 2 of that Code provided that no favours should be accepted from people or organisations with whom the employee had business dealings on behalf of the Corporation and that employees should not accept offers of hospitality or entertainment of a frequency, type or scale which the Corporation would not wish to reciprocate. There was a further provision in the Code which read:
"Any offer of an unreasonable gift, favour or hospitality that is received should immediately be reported by the employee in writing to his Works Manager or equivalent."
It was not suggested on, Mr Lynn, the Appellant's behalf, that he had so reported his use of the Thomas's holiday cottage.I think we should make absolutely plain at this stage that there was no suggestion whatever of corruption on the Appellant's behalf and no suggestion that he could have influenced, to any significant extent, the flow of orders to Teifi. It was simply that as Section Manager he had to be like Caesar's wife. If this offence or this breach of the Code had gone unpunished it would, thought the Respondents, have given a wrong signal to other employees and to those who contracted with the Respondents. So, after a disciplinary procedure of which no complaint is, or could have been made, the Appellant was dismissed.In the course of his attractive argument on the Appellant's behalf, Mr Marshall relied, as the basis for upsetting the Tribunal's decision, upon paragraph 6. It is important enough, we think, to read it in full:
"At the conclusion of the respondents' case we were left wondering whether an employee of 30 years' unblemished record could not have been trusted to respond to a warning - not that there was any doubt that the Code had been breached - but we then had the experience of hearing Mr Lynn's own account of the matter, and we must say that he showed such complete indifference to the whole purpose of the Code and unawareness of his own folly in getting on these terms with suppliers that we can no longer regard a warning as the sensible remedy. We say `the' advisedly, thinking as we did then that no sensible employer would have dismissed; but some punishment there had to be, and we were shocked to hear Mr Lynn say, in his evidence in chief, that he was not expecting to be disciplined in any way: `I would have been annoyed at a rap over the knuckles,' he said, `given the innocence of it all.' It was impossible to make him see that actual corruption was not the gist of the offence, but putting himself in a false position which must reflect on the respondents; offering, or a tacit agreement to offer a commercial favour in return would have been a separate and still more serious matter. The view advanced on Mr Lynn's behalf by his advocate was that it had to be a case of gross misconduct for him to be dismissed, and that there could be no such misconduct without corruption. That is directly contrary to paragraph 14: breaches of the Code may not involve corruption."
Mr Marshall analysed that paragraph and drew from it a four-pronged submission. First of all he said that it established that at the conclusion of the Respondents' evidence the Tribunal took the view that what they call "a sensible" and we are prepared to accept was equivalent to "reasonable", employer would have thought the warning was sufficient.Secondly, that having heard the Appellant the Respondent considered that the Respondents were reasonable in deciding to dismiss him.Thirdly, that finding was based upon what the Appellant said to the Tribunal in the course of his evidence.Fourthly, because that evidence would not have been available to the employers at the time of the dismissal the Tribunal fell into two traps. First of all they evaluated the Respondents' decision in the light of facts not then known to them and, secondly, that in so doing they substituted their own view for that of the employers.Mr Marshall made that submission against a background of total agreement between him and Mr Cavanagh, who appeared for the Respondents, as to the relevant law which we should apply. Both Counsel accepted that the relevant principles were those set out in Iceland Frozen Foods Limited v. Jones [1983] ICR 17 . We paraphrase them in saying that that case is authority for the proposition that a dismissal will be fair if it falls within the range of reasonable responses open to a reasonable employer. The Industrial Tribunal must not substitute its own view of the employer's conduct and it must ask the relevant question in the light of facts known to the employer at the date of dismissal.For the Respondents Mr Cavanagh submitted that that was precisely what the Industrial Tribunal did. He points first of all to those parts of the Appellant's evidence to which the Tribunal expressly referred in paragraph 6 of the decision, namely, he was not expecting to be disciplined in any way - and a direct quotation - "I would have been annoyed at a rap over the knuckles" he said, "given the innocence of it all". The tense of those extracts from the Appellant's evidence to the Tribunal suggest incontrovertibly, says Mr Cavanagh, that the Appellant was then describing his feelings and indignation at the time of the disciplinary hearings. He was not expecting to be disciplined in any way - "I would have been annoyed at a rap over the knuckles". Furthermore, says Mr Cavanagh, when the Tribunal in paragraph 7 asks itself the relevant question by reference to which it determined this application, the question it asked was the right question. What the Tribunal said in paragraph 7 of the decision was this:
"With all our regret at this end to a long and successful career, we must remember that the defendant is not Mr Lynn but the Corporation, which must be found to have acted unreasonably for the applicant to succeed. The reason for dismissal was one which related to conduct, and the case one where dismissal could be appropriate, and in no case more so than where the offender shows not the slightest remorse for or realisation of his offence. The application therefore fails."
The question "we must remember that the defendant is not Mr Lynn but the Corporation which must be found to have acted unreasonably for the Applicant to succeed" is, by common consent, the proper question for the Tribunal to have asked. Mr Cavanagh goes on to say that, moreover, there was evidence before the Industrial Tribunal which indicated that the Appellant had shown indifference to the Code and an unawareness of his own folly in the course of the disciplinary proceedings. There are a number of examples cited to us by Mr Cavanagh. For present purposes it is necessary for us, we think, to refer to only two. The first on page 29 of the Tribunal bundle, is an extract from a note of the evidence which the Appellant gave and indeed, it is an extract of that very piece of evidence to which the Tribunal referred in paragraph 6 of its decision.
"I was not expecting to be disciplined by Cronin. I expected I would not receive any discipline - or to be told to think again next time. I would have been annoyed at a rap on the knuckles, because of the innocence of it all."
and a little later on:

"I do not think my job should have been in danger."

and then on page 30 from the same note, again of the evidence given by the Appellant:
"I never accepted there was a technical breach . . . I do not consider I breached it. I would do the same again, except for what I know now."
That series of answers seem to us to justify a finding that in the course of the disciplinary proceedings the Appellant displayed indifference to the Code and unawareness of his own folly. That we find was what the Tribunal were saying in paragraph 6 of its decision and that is how we construe paragraph 6 in the light of paragraph 7.It follows that we do not derive from paragraph 6 the inference that the Tribunal was interposing its own judgment, or that it was relying on matters which would have been unknown to the employers at the time of dismissal. On the contrary, we believe that the Tribunal by citing from the Appellant's evidence, was pointing to examples of the attitude which the Appellant displayed when invited by his employer to explain the reason for his breach of the Code.Mr Marshall's answer to that submission is short and succinct. If there was such evidence before the employers at the time of dismissal he says, all the indications are that this aspect of the breach played no part in the Respondents' decision to dismiss.There are, we think, two answers to that submission. The first is that when embarking upon the purely objective exercise of investigating whether an employer's decision to dismiss falls within or without the band of reasonableness the Industrial Tribunal is entitled to take into account aspects of the employee's conduct to which the employers attached little or no weight. If it were otherwise industrial tribunals would be required to investigate the precise weight attached by employers to any aspect of the misconduct which they were considering. That it seems to us would place an intolerable burden on industrial tribunals. But secondly, in any event, we are satisfied that the employers did attach weight to the Appellant's indifference to his breach of the Code and his refusal to recognise that he was, in any way, blameworthy. We think there are three pieces of evidence which establish that this was so. The first on page 27 of the Tribunal's bundle is an extract from the note of the evidence given by Mr Cronin who conducted the first stage of the disciplinary process. He was obviously asked some question about previous cases under the Code of Conduct and his answer is recorded as this:
"Previous cases under the Code of Conduct led to suspension or warnings. There were not many. Those raised no continuing risk."
We think we must infer from this that those previous cases, in the employer's view, could be distinguished from the Appellant's case because whereas the earlier cases raised no continuing risk the Appellant's did. This can only have been on the basis that the Appellant wholly failed to appreciate the seriousness of what had been alleged against him and that accordingly the Respondents could not be satisfied that there would not be a repetition of, if not the same, a similar breach.The second indication that this matter was taken into account by the Respondents appears on page 30 of the supplementary bundle provided by the Respondents. It is the dismissal letter sent to the Appellant by Mr Cronin on the 17th December 1990. In setting out the reasoning which led to the decision to dismiss Mr Cronin wrote:
"You accepted that you were fully aware of the Company's Code of Conduct. At the hearing you and your representative were given the opportunity to justify your conduct, and in your defence you stated that you had offered to pay for the hospitality which was declined. You believed that your acceptance did not prejudice British Steel's business relationship with Teifi Timber. I informed you that your conduct in this matter was irresponsible in the extreme, ie your acceptance of significant hospitality on a personal basis from a supplier with whom your department has regular dealings."
We reiterate that there was here no remote suggestion of corruption. But it seems to us that there the Respondents were underlining their concern that the Appellant was unable to recognise that what he had done had, or might have, prejudiced his employer's business relationship with Teifi.The final piece of evidence that the Respondents took this aspect of the matter into account was the letter dated the 19th December 1990 which Mr Cragg wrote to the Appellant following the dismissal of his appeal. In that letter Mr Cragg set out the points which the Appeal Panel considered as the key points of the case upon which its decision to reject the appeal were based. Among those points were:
"You did not feel in any way compromised or that you were compromising British Steel by your conduct:"
We think that in the light of all the circumstances and, in particular, the Appellant's reaction to the complaint made against him and the Respondents' attitude to that reaction, that the Tribunal was entitled to find, as we are satisfied it did find, that in all the circumstances the Appellant's dismissal was within the band of reasonable responses available to a reasonable employer. It is very hard for a man of 30 years unblemished reputation occupying an important and responsible post in British Steel to find himself dismissed in this way. Our decision must not be taken to indicate that we ourselves would necessarily have arrived at the same conclusion but we are satisfied that it was a conclusion which a reasonable employer could have reached and that, accordingly, is as far as is necessary for us to go.In the circumstances, this appeal must be dismissed.