Evans & Ors v Dista Products Ltd [1995] UKEAT 1227_94_1506

EAT

Evans & Ors v Dista Products Ltd

[1995] UKEAT 1227_94_1506 · 1995-06-15

JUDGE HULL QC:

This is an appeal which is in our list under our Practice Direction for us to see whether there is an arguable point of law so that it can proceed to a full hearing.

The three Appellants, Mr Evans, Mr Thomas and Mr Perry, are all skilled and experienced men referred to as Operator Technicians; they were employed by the Respondents, Dista Products Ltd.

This is an appeal to us from the decision of an Industrial Tribunal which sat at Liverpool on 18 October 1994 under the chairmanship of Mr Leahy. The Appellants had all been employed by the Respondents, manufacturers of pharmaceuticals at Speke near Liverpool. Mr Evans began his employment in 1969 as did Mr Perry. Mr Thomas is less senior in service; he began in 1980. They were all as the Industrial Tribunal remarked "well paid men".

The incident which gave rise to their complaints of unfair dismissal was on 18 August 1993. They were on the night shift. They had no particular work to do. There had been, apparently, a refurbishment or something of that sort. It was said that these three men were part of a group of about eight who were seen that evening by a Dr Rawles. They were seen in a room drinking and playing cards and it was suggested that they were gambling there. The real nub of what was alleged against them was that they were drinking. Drinking was forbidden on the premises.

The Appellants were all, after enquiries, dismissed, the only ones dismissed out of the eight. Three of the eight could not be identified, so clearly no question of dismissing them arose. There were two others, a Mr Griffin and a Mr Jones. Again to cut the story short, they were on medication which had led their doctors to advise them not to drink and the employers, after the enquiries, concluded that they had a doubt whether they had been drinking and they, therefore, were not dismissed.

The Appellants complained to the Industrial Tribunal and the Tribunal sat at Liverpool and dismissed their complaints. It is from that dismissal that they appeal. I must refer to what the Industrial Tribunal found at some length, to do justice to the arguments which have been addressed to us. The Tribunal in paragraph 2 of their decision say:

"2. The events which we have had to deal with concern what happened on a nightshift on 18 August 1993. Although those events first came to the attention of management of the respondent on 23 August 1993 when one Dr Mark Rawles, Chemist and Doctor of Philosophy and employed there for about a year in a technical advisory capacity, reported to his superior on the morning of 23 August events which he had witnessed on 18 August and which had disturbed him. He was urged to report them to higher management, which he did. In essence, his report was contained in a statement which was typed for him and signed by him on 23 August 1993 ...." [which the Tribunal said they had seen].

Then going to paragraph 5:

"5. At about 10 o'clock that evening [that is on the 18th] Dr Rawles went to the control area in the RT1 plant. For the purposes of our evidence this consists of a side area known as the lab area, a control room and, off those two areas, an inner room which had no natural light and no natural ventilation and which was called the polarimeter room. The control area, if we can so describe it, was capable of being locked by digital locks and the code - the combination to those digital locks -was known by all people who had legitimate business there. When Dr Rawles got there the area was locked. He went into the polarimeter room, whose door was not closed and from where he could hear noises. He appears not to have penetrated very far into that room but far enough to be able to observe what was in there and he stayed, on most accounts it is agreed, for about 30 seconds. In that time he reported having seen the three applicants, a Mr Griffin, a man whom he knew by sight and was later identified as Mr Jones, and about three others - a total of about eight people. They were playing cards. There were coins there which were not in stacks. There was a strong smell of alcohol, as he described it, and Mr Thomas and others were holding clear plastic disposable party glasses or plastic cups and some were holding plastic beakers; there were glasses and beakers on the table. During the short time that he was there Mr Thomas proffered Dr Rawles a drink in a clear plastic glass, which Dr Rawles described as being rounded with one or two moulded concentric grooves, known to this Tribunal as being the sort of stacking plastic disposable cup that is sold in the supermarkets. Dr Rawles reported that the table normally in that room had been moved for the purposes of what appeared to be the card game. Under further examination at a later date he adhered to the essences of this story. He appears not necessarily to have got everything right with regard to the table but he did describe it as being a typical gambling scene - `all that was missing was the smoke'. The drink proffered to him by Mr Thomas he described in his original statement as being a straw-coloured liquid.

6. This report reaching the respondent, it decided to investigate it and the first thing that the Tribunal has directed its mind to is the question of whether or not the trail was too cold: was the proper and reasonable response of this employer to forget the whole thing at that stage or was it a matter which could reasonably be pursued? We have concluded that the trail was not too cold and that the employer acted reasonably in pursuing further enquiry. .... [later in the paragraph they say] The lockers, the polarimeter room, the control room was searched and there was no physical evidence of any drinking there: there was no container found which could have held or could reasonably have held drink. All five suspects, the three applicants and Messrs Griffin and Jones, were interviewed in the presence of their union representatives and were suspended. Those interviews were brief and they were not essentially fact-finding exercises. During the currency of those suspensions the five men were brought in separately to be interviewed by Dr Corfield [who is a senior Manager] and others in the presence of at least one of their union representatives."

They comment on the hearings which were held by the employer, and they say that one of the union representatives had made it very difficult to carry those on properly. And then going on, at the end of paragraph 8 they say:

"8 .... It is evident to us that the transcripts fairly represent the proceedings. It is also evident to us that Mr Thomas did himself and his colleagues less than justice by the evasive nature of his responses at his first disciplinary interview.

9. The respondent conducted further enquiries. It was asked by the union at one stage to interview other people and it did. It interviewed Mr Rawles at length, probing every aspect of his statement in order to see whether or not it remained reliable enough for its purposes. There is some criticism of the respondent for not having brought Dr Rawles to the disciplinary hearings but, in our view, the respondent cannot be criticised for believing such a course to be inappropriate in the circumstances of this case. It is significant that the union at one stage rejected an offer urged on them by the respondent to interview Dr Rawles. They were plainly mistaken in rejecting that proposal."

Pausing there, it is recorded later that in fact the union did interview him.

"10. Further witnesses were interviewed and there were further disciplinary hearings leading to dismissals .... [and then they refer to the dismissal letters]. They amount to what are known as `blanket dismissals'.

11. There were appeals and the appeals were conducted by the general manager, Dr Adamson, from whom we have also heard evidence on oath. That appeal process amounted to a full rehearing and earlier defects, had there been any, would in our view have been corrected by the appeal process and its wide-ranging nature. Further evidence was heard, evidence which had not been adduced at previous disciplinary hearings, and it added not a great deal to the state of affairs as it was known to Dr Corfield at the time of the dismissals.

12. The Tribunal finds that throughout the process all material facts known to and relied upon by the respondent were put to the applicants and the applicants were given at least two opportunities to respond in detail. We have looked at the question of the standard of proof, not least because the applicants have complained, as has Mr Griffin in their support, of a feeling that this was one-way traffic in this disciplinary process, that the respondent's mind was made up and that any contradictory information or evidence was being shut out or at least not taken properly into account. We point out that a finding of guilt where the standard of proof, as in this case, is on a balance of probabilities, does not in itself imply a rejection of all arguments, nor does it imply an absence of any doubt on the part of the employer.

13. We look at the law which applies in the matter and the first place where we must look is, of course, Section 57(3) of the Employment Protection (Consolidation) Act 1978, the employer in this case having satisfied us that the reason for dismissal was conduct and that is one of the reasons given in subsection (2) of Section 57. Subsection (3) says:-

` ... the determination of the question whether the dismissal was fair or unfair, having regard to the reasons 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'."

Pausing there, in the cases which were cited to the Tribunal and to us, there are of course many glosses on Section 57(3): perhaps, it might be said, more than it can really bear usefully.

Then some of the cases are referred to, including Parkers Bakeries v Palmer

[1977] IRLR 215

; Burchell v British Home Stores

[1978] IRLR 379

; Whitbread v Thomas

[1988] ICR 135

and Parr v Whitbread

[1990] IRLR 39

. The Tribunal looked at paragraph 17 of the judgment of the then President of the Employment Appeal Tribunal, Mr Justice Wood. He says of these "blanket cases":-

"If a Tribunal is able to find on the evidence before it:

(1) that an act had been committed which if committed by an individual would justify dismissal;

(2) that the employer had made a reasonable, a sufficiently thorough investigation into the matter and with appropriate procedures;

(3) that as a result of that investigation the employer reasonably believed that more than one person could have committed the act;

(4) that the employer had acted reasonably in identifying the group of employees who could have committed the act and that each member of the group was individually capable of so doing;

(5) that as between the members of the group the employer could not reasonably identify the individual perpetrator:

then, said Mr Justice Wood, provided that the beliefs were held on solid and sensible grounds at the date of dismissal an employer is entitled to dismiss each member of that group

and so we have applied that test."

They deal with those matters and at paragraph 18 they say:

"18. The fourth test: that the employer had acted reasonably in identifying the group of employees who could have committed the act and that each member of the group was individually capable of so doing. That in our view is exemplified by the very exclusion of Mr Griffin and Mr Jones - the employer, despite the doubt in the matter, accepting that they might not have been capable of committing that act.

19. The fifth part of the test is: that as between the members of the group the employer could not reasonably identify the individual perpetrator. That, again, is self-evident here. The men all denied that they had been drinking, they all denied that anybody had been drinking, and they all refused to name anybody else who was there, although Dr Rawles had identified about eight people as being there. As Mr Justice Wood continued: `then provided the beliefs were held on solid and sensible grounds at the date of dismissal, then an employer is entitled to dismiss each member of that group', so we have looked at whether or not there were solid and sensible grounds, as Mr Justice Wood put it.

20. The grounds here relied entirely upon the report of Dr Rawles. Dr Rawles gave four versions of what had taken place .... [and they go through them and see whether there are any inconsistencies or evident mistakes or grounds for doubt there, and then in paragraph 21 they go on as follows]:

21. We therefore summarise the approach which we have made to say that we have to look at whether or not this employer, in the circumstances, was reasonably entitled to come to the view that on a balance of probabilities there had been alcohol consumed, that the applicants were amongst those present at the time, and that those who were the direct perpetrators could not, after proper enquiry, be identified. It may seem paradoxical to the applicants but, as Ms Rumney argued to us in summarising the case, the fact of the matter is that they may be innocent -only they will know that. The fact is that the employer had, in our view, reasonable grounds to believe otherwise and was entitled reasonably to conclude on the balance of probabilities that the applicants, or some of them, were guilty of consuming alcohol while at work in breach of the disciplinary rules, and thus the tests set out by Mr Justice Wood in Parr v Whitbread for blanket dismissals were met in our view. We therefore feel that on the issue of reasonable grounds the case for the respondent is made out."

And then they go on, in the most important paragraph of all:

"22. We then look at the question of the sanction and the view of the Tribunal, held with varying degrees of vigour it must be said, is that taking into account the length of service, the personal circumstances of the men, and the circumstances at work - it is often said, and it is trite, that the devil makes work for idle hands and having men turn up and serve a full shift when there was in reality nothing to do is in many respects asking for trouble - so the view is that had we been the employer we may not have dismissed these men; that more lenient sanctions were available to the employer and could have been followed. However, that is not the test which we have to follow: we have to observe the test in Iceland Frozen Foods Limited v Jones [1982] IRLR 439 and examine whether or not dismissal of these men for this finding of an offence on their part, and this offence in particular, fell within a band of reasonable responses available to a reasonable employer. Although that band included the sanctions of summary dismissal or suspension without pay a wider range of responses than that, given the regulatory bodies to whom the respondent were accountable, its own disciplinary regulations and the need to treat the matter seriously, we cannot say that dismissal was outside the band of reasonable responses."

So that was the decision and the complaints of the Applicants that they had been unfairly dismissed were therefore rejected by the Industrial Tribunal and as I say, it is from that decision that it is sought to appeal to us.

Mr Millar, who has appeared before us today, has provided us with a skeleton argument which goes on for no less than 13½ pages in which he deals with those matters most helpfully. He sets out some of the facts and an analysis of the decision. I do not need to go through that, but he says quite rightly that the case does depend on the question of consumption of alcohol and that it is not suggested by anybody that merely playing cards or drinking coffee or soft drinks or anything like that could of itself justify such dismissals as took place here. He refers to Parr , the need for great care in "blanket dismissals" and he says in paragraph 14:

"14. The key issues in the case were therefore: (a) did the employer have reasonable grounds (after reasonable investigation) for concluding that all the men were lying and that alcohol was consumed? (b) if it did, was it reasonable to carry out blanket dismissals?"

Then he goes on to identify what he says are the errors of law here. He says:

"20. The decision discloses three errors of law. These can be defined by reference to the two issues in the case. The A's [Appellants] invite this Tribunal to consider the following submissions with the warning of Wood J. in Parr .... in mind."

First, that there has been no reasonable investigation. And then he says as follows:

"21. Dr Rawles' assertion that he smelt a `strong smell' of alcohol was critical in that it was the only unambiguous evidence of alcohol. The employees challenged whether he could have smelt this in the small artificially ventilated room (see above). The employer visited the room but did not go the one obvious stage further and test for smell by entering the room for 30 seconds after placing some glasses of wine in the room for a period. This would hardly have been difficult to do given that R [Respondent] is a large pharmaceutical company. Since this issue was critical any reasonable employer would have taken this simple step."

We do not know whether that contention has ever been made before. We asked Mr Millar whether it had, and he said he could take instructions on it, but did not at the moment have instructions on whether that point was taken by the representative who appeared in front of the Industrial Tribunal.

We are not told that, as one of the ingredients in the investigation, all or any of the employees said to the employer "You must make this experiment. Just see for yourself whether it is possible to detect a smell".

And one can see, looking at it from outside, that there might be some very strong objections to any such experiment. What alcohol would one use? Would it be rum and something or other? It might smell very highly. Would it be some cheap burgundy which did not smell really at all? One hardly knows and in any event, of course, it is not a proper test on the face of it because what was detected was, Dr Rawle said, a smell of alcohol coming from men who were sitting around, playing cards and drinking together. Quite clearly, most of the smell (one would have thought) would come from the fact that the men were ingesting alcohol and, of course, through the ordinary process of breathing, exhaling part of it and one would smell the alcohol in those circumstances. That is what is pressed on us as the first matter.

It seems to us that to suggest that the decision is perverse on that point is simply misconceived. If it had been thought necessary by any of those employers or employees to conduct such a test, or useful to do so, then it surely would have been raised before now, and it seems to us quite plainly to be a matter of fact and a matter for the Tribunal if it thought that that test should have been conducted. It is hard to imagine that it would have been overlooked in the decision if it had been raised before the employers or raised before the Industrial Tribunal, but there it is. So we do not think that there is anything in that.

Then the skeleton argument goes on to issue (b): is it fair to have a blanket dismissal in these circumstances? The finding, says Mr Millar, that this was a fair blanket dismissal is perverse. This is a result of the Industrial Tribunal's failure to direct itself properly as to the facts and matters relevant to consideration of this issue. Then Mr Millar says, quite rightly, the touchstone is section 57(3) of the Act. And as I have said, in referring to the Industrial Tribunal's decision, "first and foremost this Tribunal reminded themselves of what section 57(3) said and only then went on to the decision in Parr . Then he refers to four criteria. One, the strength of the evidence that the offence was committed, where this is in issue as here. He says that "The evidence of commission in the present case was (on any objective view) far from clear cut" and "The Industrial Tribunal's evaluation of the issues raised .... is woefully inadequate".

It seems to us that that is purely a matter for the employer's side, if they consider it fairly. Whether this was a weak case or a strong case was not even for the Industrial Tribunal. It was a matter for the employers and it seems to us that when one comes to consider, as here, whether a blanket dismissal was justified, the question whether the evidence was strong or not is not a matter which the employers should be charged to think about again.

Mr Millar says that no reasonable employer, taking the evidence in this case, could have found that dismissal of these three men was within the range of reasonable options. We simply say that we do not accept that submission and it appears to us not to be arguable; it is a matter of fact.

Then factor (ii) which Mr Millar says the employers should have taken into account was that inevitably, in this situation, people who were entirely innocent would or might suffer. That, of course, is inevitable. A blanket dismissal necessarily involves that people who at the very least may be innocent and people who very possibly are innocent or indeed, very probably are innocent, will be sacked together with those who are blameworthy. And he says about that that "The Industrial Tribunal failed to direct itself properly" on this matter. He says "On R's [Respondent's] own evidence eight men were present around the table. Even if Messrs Jones and Griffen were medically advised against drinking, and were not in fact doing so (which does not necessarily follow), this still leaves six potential drinkers in the room. The possibility is that up to five men were not drinking. It is also possible that none of the three applicants were drinking alcohol. Of course, he adds very helpfully to us, everybody admitted drinking soft drinks.

And he then complains there is a clear misdirection by the Industrial Tribunal when they said that the employer had:

" .... reasonable grounds to believe .... that the applicants, or some of them, were guilty of drinking .... ."

We ask ourselves whether this submission is made out. What is the common sense of it? The employers do not have to be satisfied beyond reasonable doubt. What they do have to be satisfied on is a balance of probability. Is it likely, is it conceivable that one man was sitting there drinking alcohol by himself in sufficient quantities and in such a way that the whole place smelt of alcohol and all the others were simply drinking soft drinks or tea or coffee or something? One says it is conceivably possible; whether it could be said as a matter of probability to be the case, one very much doubts.

It was entirely a matter for the employers to say what they made of this evidence and for the Tribunal to say whether the employers acted fairly in arriving at their conclusion. We do not accept the logic which is put to us in its strictness. It is possible that none of the three applicants were drinking. The obvious retort is, if one were looking at it from an outsider's point of view, it is possible but it is only a remote possibility. That was entirely a matter for the employers to decide.

So he says to sum that up "The upshot is that the employer could have been dismissing three entirely innocent men whilst allowing at least three (if not one or two more) guilty men to go unpunished. The Industrial Tribunal seems to have failed to consider this critical point altogether". It does not appear to us that they did overlook that critical point altogether.

Factor (iii) is that this was not an offence of dishonesty. Mr Millar says "this offence was undeniably serious" but he points out to us, again perfectly properly, that it would be an exceptional case, as Popplewell J., observed in Whitbread v Thomas

[1988] ICR 135

, in which this principle of a blanket dismissal "will be applied to cases of `conduct' or `capability' not involving dishonesty". That, with all respect to Mr Justice Popplewell, is an observation which leaves open the fact that it must, in any individual case, be for the employer to say whether he does apply it and for the Industrial Tribunal to say whether the employer acted fairly or whether this exceptional course should not have been followed.

Then to Factor (iv); the personal history of the applicants. Each of these men "had very long periods of unblemished service" and that is a matter which, of course, they were fully entitled to have considered. It does not appear to us that either the Tribunal or the employers overlooked that important matter.

Mr Millar says that, taking all that altogether, this decision was perverse; that is to say either that there is an error of law of some sort which is concealed or that the Industrial Tribunal have taken into account something quite irrelevant or excluded something highly irrelevant.

The best test of perversity may be to say "On reading this does it appear to us that there is something quite wrong with this decision, that the Industrial Tribunal must have made some mistake here? Is there something quite irrational about this decision?" We all read this decision before we came here and, of course, we have all read it again in the course of the hearing and had our attention invited to particular parts of it.

It does not appear to us that there is anything perverse about this decision at all. On the contrary, in the last paragraph, of their decision, this Tribunal said that if they were making the decision on behalf of the employers, they might have reached a different conclusion and they refer to their own difficulties. Their view was held with different degrees of conviction themselves, but they did reach the conclusion, applying what appear to us to be the correct tests, that this was not an unfair dismissal.

Finally, Mr Millar made an argument which, to me at any rate, appeared to be a rather surprising one. He says that, so far from departing from the guidelines laid down in Parr , this decision demonstrated a "slavish adherence" to them and said that the Tribunal had reached a decision which could not be sustained on a proper consideration of the relevant factors using Section 57(3) of the Act as a touchstone.

And then he says "It is submitted that these `guidelines' stray too far from the touchstone of s.57(3) (and the truly relevant considerations) and are worthy of reconsideration by this Appeal Tribunal". We can only say that so far as that is concerned, we do not agree. The Tribunal was quite right, first and foremost, to consider Section 57(3) word for word, and then to go on and see what is said in Parr v Whitbread . We have ourselves looked at Parr v Whitbread and we think that any Tribunal, dealing with one of these difficult cases of blanket dismissal, would do well to look at that decision and seek to derive help from it, if they can, as they probably will. We have already referred to what is said in paragraph 17. In that case one man was undoubtedly guilty of serious theft and four men were dismissed as being the suspects including (the employers hoped and believed on reasonable grounds) the man who was guilty of the theft.

The grounds of appeal included an averment that two other named people should have been included in the group to be dismissed and when one goes to the end of the decision, it appears that there were two other unnamed people who, in the Appellants' submission, should have been dismissed. One only mentions that because it appears that in that case, which of course is quite different on its facts, this Tribunal, chaired by its President, treated without dismay and without rejection submissions, made on behalf of the Appellants themselves, that there should be further people added so that it would be a case of dismissing eight where only one perhaps had been guilty of the serious offence.

It does not appear to us that the guidelines in that case go in any way beyond what, in a proper case, will be considered by a Tribunal under Section 57(3), nor do we think that the Tribunal was guilty of slavishly following those. It seems to us that they applied their minds quite independently to the questions which they had to consider under Section 57 and therefore, in spite of the matters which have been raised, and in spite of the very capable and helpful submissions which have been made to us, we have concluded at the last that there is here no fairly arguable point of law on which we should allow this appeal to proceed.

We would just say in passing that we have dealt with this, I am afraid, at rather great length. I will just read what fell from Mr Justice Wood at the end of the decision in the Parr case.

"We say this again, in the absence of a conspiracy a case such as the present must cause a sense of anxiety and perhaps anguish in the minds of right-thinking people. They must therefore be approached by employers and Tribunal alike with circumspection. From the careful way in which the Tribunal have dealt with this matter, we have no doubt that the activities of this management received just such a thorough examination. We feel unable to discover any error of law in this decision; It is not flawed."

And that is a summary of our own mental process. Certainly, we do not react to what has happened here, any more than this Industrial Tribunal did, with any sense of satisfaction or still less complacency. We have been anxious about it just as Mr Justice Wood's tribunal was in the case to which we have been referred, but in spite of all those matters we have to say that, in our view, this appeal cannot proceed.

Tom: 31 August 1995

I'm not sure if you need these notes, but have printed them for you just in case]

Iris

Notes of Judge Hull QC

What I propose is that this hearing should be adjourned to a date to be fixed. There should be a respondent's Answer within 14 days.

With regard to the averments of bias, the contents of the Notice of Appeal and Skeleton Argument to be communicated to the Chairman for his comments and those if he thinks it right to do so of his members.

We are to request the notes of evidence of the learned Chairman. And the parties are to ensure that after these steps have been taken, every material document which they may wish to refer to is in our bundles. We have been told that the index which should be sent to the parties, to show them exactly what is in the bundles, was not sent and that no steps were taken, at any rate, so far as the Appellants are concerned, to make sure on that point, that is quite clearly the responsibility of the Appellants.

We should all like to say that from what we have heard so far this may be a case in which if this appeal succeeds, we shall have to consider the question of the costs which are being wasted and whether anything else unreasonable has occurred and what orders to make for costs. At the moment it appears to us that the Appellants, as the person with the carriage of this appeal, may be responsible for a large number of these matters. We shall enquire into that in due course, if necessary. Leave to amend the Notice of Appeal within 14 days and Respondent's Answer 14 days thereafter.