Maidstone Borough Council v Christian [1996] UKEAT 1069_95_0102

EAT
Maidstone Borough Council v Christian
[1996] UKEAT 1069_95_0102 · 1996-02-01

JUDGE SMITH QC:

This is an appeal by the Respondent employers, Maidstone Borough Council, against the decision of an Industrial Tribunal sitting at Ashford, Kent on January and February 1995, when the Industrial Tribunal held that the Applicant Mr Peter Christian was unfairly dismissed. After assessing his contributory fault for his dismissal at 50% the Industrial Tribunal awarded him £9,720.83 in compensation. The appeal before us has been well argued by Counsel on both sides.In a nutshell, the basic submission of Counsel for the Appellants is, that having regard to the findings the Industrial Tribunal reached, particularly in relation to British Home Stores v Burchell , namely that the employers had passed all the tests in that case, that it was perverse for the Industrial Tribunal, despite that clear and unequivocal finding, to conclude that nevertheless the Council had acted unreasonably in dismissing the Respondent presumably pursuant to Section 57(3). Counsel for the Respondent, Mr Forbes, submitted to us that we should be very slow indeed to construe any conclusion by an Industrial Tribunal as being perverse. He submits we should not do so here because it is possible to construe the Industrial Tribunal's decision as being within the bands of a reasonable decision for them to have reached, despite their finding that the employer passed all the tests in British Home Stores v Burchell . That is no more than a summary of the rival submissions which are all set out very clearly and helpfully in the Skeleton Arguments.We should turn next to a brief summary of the background to the matter, and the circumstances which led up to Mr Christian being summarily dismissed on 1 July 1994 for misconduct amounting, in the view of the Appellant Council, to a fundamental breach of his contract of employment, resulting in an irretrievable breakdown in trust and confidence between the Respondent and the Appellant Council.We should say that the facts and background to this matter are set out in considerable detail in the extended reasons of the Industrial Tribunal, particularly between paragraphs 5 to 8, and with regard to the events leading to Mr Christian's dismissal, in paragraphs 9 to 23. It is to those paragraphs that attention should be paid for the detailed history of the matter. What we say is no more than a summary. In summary, as appears from those paragraphs, Mr Christian was employed in a responsible position, a fairly senior position with the Appellants, as a Surveyor and Project Officer. His Line Manager was Mr Pierce, the Development and Programming Officer. The background is that in 1992 he had received a final warning which was to run for a period of twelve months in relation to his work in administering contracts for the Council. In 1994 he had received a final written warning in relation to administering pre-painting repairs and in regard to selection and commissioning of the painting contracts.In June 1994, the Respondent was told that serious allegations had been made against him, which were under investigation. As is plain from the detailed history set out in the extended reasons, there followed, after an investigatory interview, a disciplinary interview on 1 July 1994, at which a number of serious allegations of serious misconduct were considered. That disciplinary interview was conducted by the Director of Housing, Mr Bushrod. All this was carried out in accordance with the disciplinary procedures of the Council, and of course therefore the contractual rights of the Respondent. It is clear that it was all carried out perfectly properly.The Respondent was represented at the disciplinary hearing which was held before Mr Bushrod together with Mr Cunningham Director of Finance and Administration, who also was on the panel of the disciplinary hearing. Mr Christian was then represented by a solicitor, Mr Howson, who represented his interests in relation to the disciplinary enquiry. It is apparent from the findings of the Industrial Tribunal, and we have been told more about it by Counsel today, that a number of allegations were then investigated. On that hearing on 1 July 1994, of which a proper record was kept, amongst the matters that were looked into were the Lenworth House contract (see paragraphs 12 to 15 of the decision) matters relating to Weatherproof Asphalt (see paragraphs 16 and 19), the matter concerning the question of the commissioning of the consultants Messrs Evans & Langford (see paragraph 17) and (see paragraph 20) a very important matter concerning the Sunningdale Court roof project, for which the head contractors were Tarrum Contractors Ltd and Weatherproof Asphalt were the roofing sub-contractors. Summarised by the Industrial Tribunal at paragraph 21 there was a general allegation relating to the extent of Mr Christian's social contact with contractors. It is in those paragraphs to which we have referred that the Industrial Tribunal has summarised the nature of the allegations that were laid against Mr Christian and the nature of the evidence that was presented during the disciplinary hearing.At paragraph 22 of the extended reasons there are set out the findings of the disciplinary panel. There is no need for us to rehearse them in detail. It is important that we should refer to some of them. What Mr Bushrod said in the letter of dismissal of 4 July 1994 was:
"I have regrettably come to the conclusion that you have committed gross misconduct and I am very sad to have to tell you that your employment with the Council is summarily terminated with effect from 1st July 1994, that is, without notice.
It is my view that there has been a fundamental breach of your contract of employment resulting in an irretrievable breakdown in my trust and confidence in you.

The principal grounds for my decision are:-

(i) Your failure to enter into a properly documented contract with regard to the Lenworth House repairs work.(ii) Your failure to comply with instructions to record all contracts on the contracts recording system which acts as the contracts register.(iii) You ignored the need to comply with Standing Orders, ... with regard to the commissioning of Evans and Langford...(iv) Your apparent conduct and relationship with contractors, including those involved with the "Y" Blocks and Sunningdale roof repair contracts, was in conflict with and undermined the position of trust which you held, and consequently, the Council has been exposed to an unacceptable risk. (v) The contradictory evidence you have presented to me during these interviews."So that was the decision of the disciplinary panel. To complete the history, the letter drew the Respondent's attention to his right of appeal, provided under the contract and under the local government procedures namely to a panel of Council members as is very well understood by everybody in local government.There followed difficulties over arranging dates in relation to the appeal and, as he was fully entitled to do, instead of following through the contractual appeal procedure, the Respondent took the matter to the Industrial Tribunal. It is against that background that we have to come to consider, in the light of the submissions made to us, the findings and the conclusions of the Industrial Tribunal. The findings are set out in paragraph 28 of the decision. The Industrial Tribunal found the following facts in sub-paragraph 2:
"(2) We accept that Mr Christian committed serious breaches of standing orders in (a) ... Lenworth House (b) ... Evans & Langford.... (c) failing to document the occasion on which he amended the Weatherproof Asphalt tender (d) having contact with Tarrum Contractors and Weatherproof Asphalt at a time when he had been told not to do so (e) that he had an unwise amount of social contact with contractors"
They then go on to find as a fact in sub-paragraph 3, by reference to the very well known test in British Home Stores v Burchell that:
"In the circumstances, Mr Bushrod genuinely believed that Mr Christian had committed gross misconduct."
In sub-paragraph 4 they found:
"There was evidence before him to justify that decision, namely, Mr Christian's admissions."
We should interpret their findings in sub-paragraph 2 as being an exercise by the Industrial Tribunal in testing the quality of the evidence which was before the employer, in order to decide whether the employer(a) genuinely believed that Mr Christian had committed gross misconduct and(b) had sufficient evidence before him to justify that decision. That seems to be the only proper way to interpret their findings. They then go on to find at sub-paragraph 5 in relation to the third part of the test of British Home Stores v Burchell :
"(5) That evidence was gathered after a reasonable investigation had been carried out on all points..."
They then proceed to make a finding themselves to the effect that Mr Christian was in breach of his duty to obey the Standing Orders. In our judgment perhaps they should not have made that particular finding, since what they had to do was to apply the Burchell test. However, it does not affect the decision since their finding was in conformity with the finding of the employers in any event. So although it should not have been added, it certainly does not detract in any way from the employers' findings. They found that Mr Christian was in breach of his duty to obey the Standing Orders and financial regulations of the Council, and the National Terms and Conditions of Service of Local Government Officers, an extract from which is set out in document 14. They then went on to find the following in sub-paragraphs (7) and (8):
"(7) We find that these breaches of standing orders were committed at least partly as a result of intense pressure of work in the Housing Department caused by the impact on the department in general,... in particular, of the voluntary housing transfer exercise.
(8) We accept Mr Christian's evidence that Mr Pierce knew that he was committing breaches of standing orders and that he either actively encouraged Mr Christian to do so or at least tacitly approved his doing so by turning a blind eye to the breaches."We shall have to consider those findings in the light of their conclusions as expressed in paragraph 29. They found finally that Mr Bushrod had lost trust and confidence in Mr Christian.They then went on to express their conclusions in paragraph 29 as follows:
"29 ... The Council have taken a long step to persuading us that they acted reasonably, because we have no doubt that they passed all the tests set out in British Homes Stores v Burchell . If it were possible to look at Mr Christian's case in isolation, we should have said that dismissal came within the reasonable range of responses of the reasonable employer to the situation which the Council perceived to exist. But this case is unusual, in that we do not think that it can be properly viewed in isolation. In view of our findings of fact, that Mr Christian was, in effect, following either express or implied instructions or at least encouragement from his line manager in cutting corners, and thereby breaching standing orders, in order to keep up with the pressure of work on the department, it seems to us that the Council acted wholly unreasonably in failing to consider what we have found to be Mr Pierce's involvement and in failing to take note of his influence on Mr Christian's behaviour. Whether this is viewed as a case of the Council acting inconsistently between Mr Christian and Mr Pierce, or a case of a man being dismissed for doing what he was told to do or encouraged to do, we think that the decision to dismiss was in the circumstances unreasonable and unfair: that is our unanimous decision."
In our judgment, having considered the submissions made to us, this is a finding which cannot stand. First of all, having concluded that the employers had passed all the tests in British Home Stores v Burchell , it was not appropriate in our judgment, for the Industrial Tribunal in some way or another to take it upon themselves to consider other factors under Section 57(3). For that reason alone, in our judgment, this is a wrong decision. But the matter goes much further than that in our judgment. First of all, it is clear that the issue of pressure of work must have been and plainly was a matter that was fully before the employers for their consideration. Next, in relation to pressure of work, any such pressure of work could not possibly have played any part in relation to Items (d) and (e) at paragraph 28(2) of the Industrial Tribunal's decision. With regard to sub-paragraph 28(2)(d) namely the very serious findings that Mr Christian had had contact with Tarrum Contractors and Weatherproof Asphalt at a time when he had been expressly instructed not to do so, it is clear that misconduct had nothing to do with pressure of work. The same goes for paragraph 28(2)(e) namely that he, the Respondent had had an unwise amount of social contact with contractors. This was also a very serious matter as far as the Appellants were concerned: exposing the Council as it did to the risk of all kinds of suggestions of impropriety, leading right up to outright accusations of corruption, and plainly a matter of the utmost importance. Pressure of work cannot have played any part in that allegation and that finding of gross misconduct.The next reason why the finding of the Industrial Tribunal in our judgment plainly cannot stand and is perverse, is that it is equally clear that Mr Pierce cannot have played any part in those matters which we have just mentioned, namely the matter of the contact with Tarrum Contractors and the matter of the unwise amount of social contact with contractors. Indeed the evidence was that the Respondent had been instructed not to have any contact with Tarrum and Weatherproof at the relevant time, so there was no question of the Respondent being able to rely upon any encouragement or involvement by Mr Pierce in that matter. Similarly, there was no evidence that Mr Pierce was in any way involved in the overly close association which was found to exist between the Respondent and the contractors.The next reason why this conclusion, in our judgment, with respect, cannot stand flows from the Industrial Tribunal's own findings in paragraph 6 of the extended reasons, where the Industrial Tribunal correctly set out the onerous duties which were placed upon the Respondent along with all the officers of the Council, in common with all local government officers, which as the Industrial Tribunal correctly stated were:"6 ... quite independent of any direct instructions given them by their superiors, to abide by the standing orders of the Council."...An extract from the "purple" book is set out in paragraph 6 of the decision:
"70.a The public is entitled to demand of a local government officer conduct of the highest standard and public confidence in his integrity would be shaken were the least suspicion to arise that he could in any way be influenced by improper motives.
b. ... he should not subordinate his duty to his private interests or put himself in a position where his duty and private interests conflict."Bearing in mind those independent duties owed by a local government officer, in our judgment it was a perverse finding to find that there could in the circumstances be any relevant mitigating factor relating to Mr Pierce's involvement and the influence that he is alleged to have had on the Respondent's behaviour.In our judgment the Industrial Tribunal's conclusion that this was a case of a man being dismissed for doing what he was told to do or encouraged to do (which is one of the two alternative limbs in respect of which the Industrial Tribunal concluded that the employers had acted in an unreasonable and unfair manner) was not a relevant factor in the circumstances of this case, which fell properly to be taken into account under Section 57(3). In this regard, we have had the benefit of being referred to Hadjioannou v Coral Casinos Ltd [1981] IRLR 352 where the E.A.T. held:"... An argument by a dismissed employee that the treatment he received was not on a par with that meted out in other cases is relevant in determining the fairness of the dismissal in only three sets of circumstances. Firstly, it may be relevant if there is evidence that employees have been led by an employer to believe that certain categories of conduct will be either overlooked, or at least will not be dealt with by the sanction of dismissal."...In our judgment, that principle cannot have any application to the circumstances of this particular case. Here it was not the Appellant employer Maidstone Borough Council who were in any way leading Mr Christian, the Respondent, to believe that certain categories of conduct would be overlooked. The most that can be said is that it was the Respondent's line manager who was encouraging such conduct. That in our judgment is a wholly different matter. Secondly, with regard to this particular finding, it is plain on the findings of the Industrial Tribunal themselves that the Respondent knew quite well that he was under an independent duty to comply with the Council's standing orders.We must turn next to deal with the other alternative limb which the Industrial Tribunal prayed in aid to support its conclusion that the decision to dismiss was, in the circumstances, unreasonable and unfair, namely that the Appellant employers had acted inconsistently between Mr Christian and Mr Pierce. We consider it is plain from the authorities that there was no justification for such a finding. This follows from Hadjioannou v Coral Casinos Ltd where the E.A.T. made clear but it was only where inconsistent decisions were made by an employer in truly parallel circumstances, that such inconsistency might support an argument in a particular case, that it was not reasonable on the part of the employer to visit the particular employee's conduct with a penalty of dismissal. It is clear from that case and equally clear from the case of Procter v British Gypsum Ltd [1992] IRLR 7 that:
"The requirement that employers must act consistently between all employees means that, before reaching a decision to dismiss, an employer should consider truly comparable cases..."
and finally, from the recent case of Paul v East Surrey District Health Authority [1995] IRLR 305 in which case the Court of Appeal reminded Industrial Tribunals that they should heed the warning of Mr Justice Woodhouse in Hadjioannou v Coral Casinos Ltd and scrutinise arguments based on disparity very carefully and with particular care.In our judgment, on the proper application of the principles laid down in those three cases, there can be no question here of the Industrial Tribunal's finding that the Appellant Council had acted inconsistently between Mr Christian and Mr Pierce, being sustainable. There were in our judgment many differences of substance between the position of Mr Pierce and the Respondent which are really rather obvious but which must be stated. First of all, as we have already said, Mr Pierce was not involved in any way in relation to the Tarrum and Weatherproof misconduct on the part of the Respondent. Nor was Mr Pierce involved in any way with the finding that the Respondent had had unwise social contact with contractors. Mr Pierce was not in a parallel position to the Respondent, since the Respondent had been found to give contradictory and unreliable answers over the course of the disciplinary hearing, and in that way to have undermined the trust the employers had in him. Mr Pierce was also unlike the Respondent because it was the Respondent against whom gross misconduct had been found in telephoning contractors in direct contravention of an injunction not to contact them. Mr Pierce, unlike the Respondent, was not a person who was subject to a final written warning.For all those reasons, in our judgment, it was plainly erroneous for the Industrial Tribunal to have found that there was any question of the Council having acted inconsistently between the position of Mr Christian and Mr Pierce. It is apparent that their positions were in no way truly parallel or comparable. We should mention that none of the relevant authorities, was cited to the Industrial Tribunal on this particular aspect of the matter. Therefore they were not guided towards the important principles laid down in relation to fairness in a situation where there has been some kind of an encouragement by an employer on the one hand, or a situation where there may be an issue of disparity on the other.Finally, in our judgment, in relation to the Industrial Tribunal's conclusion in paragraph 29, the finding in paragraph 30 is itself inconsistent with the finding in paragraph 29, namely the finding in that paragraph that Mr Christian had an independent duty not to commit breaches of standing orders and financial regulations and not to commit breaches of his terms and conditions of service. The findings in paragraph 29 will not stand with the findings in paragraph 30. For all those reasons we have concluded that this is one of those rare cases where we have been driven to the conclusion that the finding of the Industrial Tribunal in paragraph 29 is a perverse finding and one which no Tribunal properly directing themselves on the evidence and the law could have reached.We wish to say in order to put the matter beyond any doubt, since it was a matter that was touched upon in argument, that it is quite clear that the Council's case against Mr Christian was not based on dishonesty at all. That is absolutely clear and let there be no doubt about that, since there was a question mark over that perhaps raised at some point during argument. The gravamen of the Appellants' case against the Respondent was that there had been a fundamental breakdown of trust and confidence between the employers and the employee. It was not a matter of dishonesty. We wish to place that unambiguously on the record.In all the circumstances for the reasons we have given, we are quite satisfied the decision of the Industrial Tribunal was plainly wrong and not a permissible conclusion at which they could have arrived at in all the circumstances and accordingly was a perverse finding. In those circumstances we have carefully considered what the appropriate order is that we shall make. We are satisfied that the proper order, in the light of the findings of the Industrial Tribunal that the test in British Home Stores v Burchell had been complied with by the Appellants, is that we should allow the appeal and substitute a finding that the Respondent had been fairly dismissed. That is the order which we make.