Post Office v Gould & Anor [1994] UKEAT 587_92_1105

EAT

Post Office v Gould & Anor

[1994] UKEAT 587_92_1105 · 1994-05-11

JUDGE HULL QC:

This is an appeal to us by the Post Office against the decision of the Industrial Tribunal sitting at Liverpool under the Chairmanship of Mr Blackhurst with, of course, two Industrial Members. They sat on the 15 and 16 January 1992 and then again on the 25, 26 and 27 March 1992 to enquire into the complaints of two Post Office employees, they were drivers and Post Office men. That they had been unfairly dismissed.

The Industrial Tribunal by its decision which was promulgated on the 13 July 1992 found that they had indeed been unfairly dismissed. It is from that decision that the Post Office appeals.

First of all a few facts. I should say that these two cases were heard together as simply as a matter of convenience, because they occurred on similar dates and involved similar facts. They were referred to as consolidated.

Mr Graham began his employment with the Post Office on the 30 July 1984. Mr Gould began on the 24 March 1986, so they had had something like 7 and 5 years employment respectively when the events which I am about to deal with came up. Going in chronological order a very important factor, the decisive factor in the case, turned out to be a decision of the Post Office in two other cases concerning Post Office workers; Mr Manning, who was dealt with in 1987 and Mr Dean, who was dealt with in 1989.

In each case the employee concerned, Messrs Gould and Graham who are the Respondents to this appeal, and Mr Manning and Mr Dean had made a false claim for overtime payment. Incidental offences were involved but that was the nature of the offence in each case. Coming to Mr Graham and Mr Gould, on the 23 January 1991 observation was kept on a van which was driven by Mr Graham in the course of his duties; he was parked at a private address. He in fact put in on that day a claim for overtime which could not be justified and which was treated by the employers as being a dishonest claim.

On the 25 January, two days later, Mr Gould's vehicle was kept under observation. He had a Post Office van which was parked outside a sub Post Office where, apparently, the Post Sub Mistress liked to entertain Post Office workers; and as a result of that, it was ascertained that he too had made a false claim for overtime. Indeed Mr Gould falsely stated that he had come on duty an hour before the time when he had come on duty, so that was an additional claim.

It is right to say that each man in due course withdrew his claim for overtime, but these were treated as serious matters by the Post Office.

Both men were seen by Mr Lanham, who was one of the managerial staff. Then they were seen by Mr Hogan. That was on the 19 February. Mr Hogan is the divisional personnel planner and the man responsible for these more serious cases. He adjourned having heard from their representatives and themselves and he resumed on the 21 February. He came to the conclusion, having heard both men, that they should be dismissed.

Each of the men appealed, as of course he was entitled to, to Mr Allen who was responsible for hearing appeals. Each of them was represented by his Union Representative. Mr Allen heard those appeals on the 21 March and he dismissed each of them. They applied to the Industrial Tribunal on the 20 May 1991 and the Post Office defended the cases and they were consolidated.

The Industrial Tribunal, after their long hearing, gave a long decision in which they reviewed the facts. I will certainly not go all through their decision. They first of all dealt with the case of Mr Gould and set out the facts concerning his case. There was no criticism by the employees of procedural unfairness, so far as can be seen. It was not alleged that any of the steps in the course of hearing their cases were conducted improperly or that the employees were prevented from saying what they wished to say, or did not have explained to them the nature of the complaints, or anything of that sort. As I say, they had gentlemen who were obviously experienced, their Union Representatives, present on the occasion of these hearings.

The Tribunal set out the facts concerning Mr Gould and they set out the conclusions of the officers who heard the matters after these procedurally correct enquiries. They say on page 14 that Mr Lanham reported, concerning Mr Gould, that Mr Lanham found Mr Gould's story highly unlikely. Mr Lanham said:

"It is my reasonable belief that Mr Gould's intentions in this case were to fraudulently claim overtime.

Having reached that conclusion I therefore feel that this case is too serious for me to deal with at my level and I must forward it to the Head of Personnel for consideration of dismissal."

and that is how it came before Mr Hogan.

Mr Hogan heard the matter, as I have said. Apparently it was during the course of his interview that for the first time this extra hour was revealed. Mr Hogan dealt with all these matters and at the end he said, and this appears to us to be very important:

"I can see no alternative but dismissal on the basis that as a result of his gross misconduct in attempting to falsely claim overtime, I have lost confidence in his honesty and integrity."

So he wrote to Mr Gould dismissing him and Mr Allen, as I say, heard the appeal. When Mr Allen heard the appeal, he heard the appeals of both men. His attention was drawn to the fact that there had been a number of similar cases at Chester, which is where these events occurred, and the staff involved had not been dismissed. In other words, a suggestion was made that there was an inconsistency of approach. Mr Allen, having heard that, referred to the cases of Mr Dean and Mr Manning, whose names I have mentioned. He referred to Mr Hogan. Mr Hogan said that prior to reaching his decision Mr Allen wrote:

"I would like your comments on the allegation of inequality of treatment between Mr Gould's case and those of Mr Dean and Mr Manning."

and Mr Hogan replied to that request. He dealt with the two cases. He said that:

"Having been involved in the case originally, I examined Mr Dean's papers before reaching my decision on Mr Gould. In Mr Dean's case I recommended suspended dismissal. One difference was in the element of remorse displayed by Mr Dean, which gave me confidence that he might in future be trusted. In addition he had 11 years clear service, and many domestic difficulties which were taken into mitigation."

So that is what Mr Hogan told Mr Allen about Mr Dean. Then he dealt with the case of Mr Manning:

"In this case there was evidence of a recalcitrant attitude"

and I think from what follows that must mean repentant attitude.

"He had admitted his guilt and had shown sufficient evidence of remorse to suggest he could be trusted in future. In addition his 16 year long record of clear service and his admission of guilt was such that the previous Head of Personnel felt in his case he could be trusted in future. I was unable to reach a similar decision in the circumstances of Mr Gould's case."

So that was a clear statement in the case of each of these men that he had long service; that he expressed repentance; and that that had inspired the person responsible, once Mr Hogan and once his colleague who had preceded him, to take the view that each of these men could be trusted in future. I would pause to repeat on behalf of us all what I said in the course of argument, that nothing is more important to an employer, particularly some organisation like the Post Office, than the integrity of his employees. If something like this occurs it is incumbent on him to make up his mind whether he feels he can trust these employees in future, or whether he cannot. If he cannot, then of course he cannot properly go on employing those men or women in positions of trust where the property of others is involved and where it is essential they should be trusted.

As I say, a favourable conclusion on that was reached in all the circumstances with regard to Mr Dean and Mr Manning and that conclusion could not be reached in the case of Messrs Gould and Graham. I will come to Mr Graham in a minute. Then the Tribunal, say this:

"Unlike Mr Allen, we as a Tribunal considered it proper to have made available documentation regarding the cases of Mr Dean and Mr Manning ....."

and they referred to various documents. We have been shown those documents or what we were told were the most important of them, and of course they do show that Mr Dean and Mr Manning both expressed personally their remorse, admitted what was alleged against them and did that not merely themselves but through their representatives, and repeatedly so. The Tribunal went through the evidence concerning Messrs Dean and Manning so far as they had it.

Then they come to Mr Graham. They deal with the facts concerning Mr Graham and his claim for overtime and they then go on to say how that was dealt with. Mr Lanham said that in his view Mr Graham had fraudulently claimed ½ hour extended delivery overtime. Mr Hogan, as a result of that, saw Mr Graham as I have said. Mr Hogan formed the view that there was no alternative to dismissal. He stated that he had lost confidence in his honesty and integrity as a postman.

What the Industrial Tribunal had to do in the cases of both Mr Gould and Mr Graham was to consider the reaction of the employers; whether in deciding to deal with the matter as they did, the employers acted within the band of responses that a reasonable employer might. On the face of it, if there is a significant piece of dishonesty by an employee in a position of trust it would be an insupportable thing for any Tribunal to say that dismissal was not a rational response; within the band of responses which a reasonable employer could adopt.

The Tribunal were referred to authorities, and they were pressed with the argument of inconsistency between the cases of Mr Manning and Mr Dean on the one hand and the cases of Mr Graham and Mr Gould on the other. They should then have asked themselves the question which arises under Section 57 of the Act. Of course it was for the employer to show what was the reason for dismissal. There was no dispute that the employer had done that under Section 57 (1). Then under sub-Section (3) of Section 57 the Employment Protection Act provides:

"Where the employer has fulfilled the requirements of subsection (1), then, ...... the determination of the question whether the dismissal was fair or unfair, having regard to the reason shown by the employer, shall depend on whether [in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee; and that question shall be determined in accordance with equity and the substantial merits of the case.]"

One of the circumstances of the case is how the employer has treated other employees who have committed similar breaches of their contract of employment. Obviously, any employer should try to hold the scales equally and administer justice, in the same way that Courts do, in a rational and even handed way. So a Tribunal are of course entitled to look at the way in which the employer has dealt with other cases. But it is always necessary to do so with reservations. First of all, there is no question of the employer being tied by precedent. The employer has to deal with each case on its merits and it would be a very great pity, as this Employment Appeal Tribunal and the Court of Appeal have said repeatedly, if any employer were to feel that there was a set tariff which he must observe in relation to any matters.

That must especially be so in the case of dishonesty. As we have said, if dishonesty is established then the matter cannot cease there. Serious as dishonesty is, perhaps even more serious is the question of what it means for the future. Does it mean that this employee is a dishonest person who cannot be trusted in future, or is it possible to take the view that this employee has had such a shock, and so learned his lesson and is so repentant of his behaviour, that in future he can be trusted?

What the Tribunal in fact said, having been referred to the authorities, was this:

"It was established in the Fennel case (that was Post Office v Fennell [1981] IRLR 221 ) that the word "equity" in the phrase "having regard to equity and the substantial merits of the case", in Section 57, comprehends the concept that employees who behave in much the same way should have meted out to them much the same treatment. An Industrial Tribunal is entitled to say that where that is not done and one man is penalised much more heavily than others who have committed similar offences in the past, the employer has not acted reasonably in treating whatever the offence is as a sufficient reason for dismissal. We are satisfied that, but for the cases of Mr Manning and Mr Dean, the respondent would have been justified in dismissing both applicants. The background circumstances however of the cases of the two applicants as compared with those of Mr Manning and Mr Dean, were not such as to justify in the light of the evidence put before us, the applicant having been penalised much more heavily than Mr Manning and Mr Dean. It was for this reason that it was decided that both applicants had been unfairly dismissed."

Mr Pratt, for the Appellants, says that this shows a grave error of approach. He says that here the Industrial Tribunal were not asking themselves the question under Section 57(3) "did, in all the circumstances, the employer act reasonably or unreasonably?" but simply concentrating on the question of inconsistency. They should have considered all the facts, including the very grave fact that there had been dishonesty here by these trusted postmen, and asked themselves whether any inconsistency which they detected rendered the decision unfair. But much more important it seems to us that this Tribunal, as Mr Pratt well says, appear to be putting themselves in the position of the employers.

What they had to ask themselves was whether it was open to the Post Office, within the range of reasonable responses, to act as they did, notwithstanding the different decision which they had taken in the cases of Mr Manning and Mr Dean. Mr Benson, seeking to support this, has invited our attention to the basis on which the Post Office acted in each of those cases.

When one looks at it, it appears that although each man was charged with the same, or a similar offence, that there is all the difference in the world between the cases; or at any rate that that would be a view which a reasonable employer could well take. Dean and Manning had much longer service. More important than that, each of them confessed his offence and expressed contrition repeatedly. Much more important still, the managers responsible, Mr Hogan and his colleague, in the cases of Dean and Manning, having seen these men, having heard what they said and probably (although we do not know this) knowing them, and having heard what was said on their behalf by their Trade Union Officers, were persuaded that for the future these men had learned their lesson and could be trusted.

Those are the direct reverse of the conclusions reached in the cases of Mr Gould and Mr Graham. In each case Mr Hogan reached the conclusion, which was supported by Mr Allen on appeal, that in future he could not trust these men. There were other factors, I will not bother to go into them. It seems to us that inevitably any rational employer would pay the greatest attention to those conclusions.

It seems to us that when considering the reaction, the band of responses of a rational employer, as this Tribunal was required to do and should have done, it would be inevitable to say that there was ample material here, indeed, abundant material for differentiating between the cases. Even if there were not, it might well be that a Tribunal would say to themselves: well, an employer must decide in each case of a serious offence, like dishonest claims made against the employer, whether there are mitigating factors and whether it is possible to be lenient. It would be a very great pity if Industrial Tribunals sought to say that one case of dishonesty is like another and therefore must meet with exactly the same response. Clearly that is not so, and clearly the view of the employer about the seriousness of the dishonesty must be paramount. In such cases the employer knows the employee, particularly if the employee has been long in service with the employer. It is for the employer and no other person to say what his reaction is to discovering a serious offence. It is a very very strong thing to say that an employer has acted irrationally in deciding to rid himself of an employee who has been guilty of dishonesty.

Here, these employees were guilty of what must be taken seriously by the Post Office. They had proved intransigent, failed to admit, at first at any rate, their fault, and the employers said that for the future they did not feel they could trust either of them; and that after careful and entirely regular enquiries. How can any Industrial Tribunal say to itself, after that: we think that this was an irrational response and that the employer, having decided he could not trust these men in future, having conducted the enquiries necessary and with the fairness necessary to reach the very serious conclusion that he could not trust these men in future, was bound to keep them on because on previous occasions, with two other men, that employer, again on rational enquiry, had decided that in the future he could trust those men and could award them a suspended dismissal rather than an actual dismissal?

It seems to us that this Industrial Tribunal has not applied the correct test; it has put itself in the place of the employer, and decided what was reasonable and justified as it would if it had been the employer, or else it has misdirected itself in some other way. It appears to us that there was really only one conclusion which was open to this Tribunal. There was abundant material for saying that the employer's conclusion was a rational one and well within the discretion of the employer and indeed it would be very difficult, it seems to us, for any other conclusion to be reached by any employer in the circumstances, when he had decided that he could not trust these men for the future.

We are satisfied that this is a decision which cannot stand and we think that there is only one conclusion, which is that this appeal should succeed and that the complaints of unfair dismissal should be dismissed.