Hudson v Addington Churches Housing Association Ltd [1996] UKEAT 1070_95_0602

EAT
Hudson v Addington Churches Housing Association Ltd
[1996] UKEAT 1070_95_0602 · 1996-02-06

JUDGE C SMITH QC:

This is an application for leave to proceed to a full hearing of this appeal by the Applicant before the Industrial Tribunal, Mr Hudson, against the decision of an Industrial Tribunal sitting at London North on 18 July 1995 when the Industrial Tribunal held that the Appellant (the Applicant before them) had not been unfairly dismissed by the Respondent employers, the Paddington Churches Housing Association Ltd.The Appellant was dismissed by the Respondents on 7 September 1994 for gross misconduct, namely the falsification of records on the findings of the Respondents as accepted by the Industrial Tribunal over a long period, namely well over 60% according to the findings of the Industrial Tribunal, of the receipts he had obtained from petrol stations in respect of supplies of petrol for the van which he had to use in the course of his employment as a Technical Officer with the Respondents.Before we come on to the point that is made to us upon which leave to appeal to a full hearing is sought, which has been well argued before us today by Counsel, we should explain, as is apparent from the findings of the Industrial Tribunal, that there was a disciplinary hearing in accordance with the contractual conditions on 7 September 1994 at which the Appellant admitted altering the receipts, as indeed he had done at an earlier investigatory interview, but at the disciplinary hearing he put forward the explanation that he had purchased other petrol during the course of his employment for which he had not obtained receipts, so that although guilty (so to speak) of substantial falsification of documents, he was not guilty of fraud.As the Industrial Tribunal put the matter in paragraph 5 of the decision, the Respondents' dismissing officers, namely Mr McGregor and Miss Boakye, did not find this a convincing explanation but nevertheless, the dismissing officers did not make a finding of fraud. However, they were satisfied that the alteration of the records in such a substantial way constituted gross misconduct and summarily dismissed the Applicant.The Officers in the Housing Association who gave evidence before the Industrial Tribunal reminded the Industrial Tribunal that the Housing Association was a public body spending large amounts of public money so that it was vital that persons in responsible positions like the Applicant should be above any suspicion. What then occurred in relation to the internal disciplinary procedures has given rise to the point taken on this application for leave to proceed to a full appeal.It is quite clear, as recorded by the Industrial Tribunal, that they were concerned about this point, because the Industrial Tribunal say in the first sentence of paragraph 7:

"7. ... a much more serious point was taken about the appeal."

The position was that the Respondents' disciplinary procedure stated:
" ... that at all stages the employee will have the right to be accompanied by a trade union representative or any other representative of his choice during any disciplinary interview."
What happened was that the Appellant wished to be represented by a Solicitor for the appeal hearing and there was correspondence along those lines between the Housing Association and Solicitors acting on his behalf. The upshot of all that correspondence was that the Housing Association took the view that they would not allow Solicitors or Lawyers to represent persons in the position of the Appellant in relation to this appeal procedure. They maintained that they would observe all the rules of natural justice but they continued to refuse representation by a Solicitor. The upshot of that was that the Appellant withdrew his appeal and took the matter to an Industrial Tribunal.It is in those circumstances that we have had to consider the point that is made in relation to this appeal. It is submitted on behalf of the Appellant that this breach of contract was a matter which was not properly considered by the Industrial Tribunal and it was argued, particularly on the basis of Cabaj v Westminster City Council [1994] IRLR 530, that this breach was of such a serious nature that it had had the result that the Industrial Tribunal could not have considered the matter properly and fairly under Section 57(3) of the Act.In the case of Cabaj the Employment Appeal Tribunal held that there was a fundamental flaw in the procedure in that case because the appeal, which was an appeal based on the Local Government procedure, in that case relating to Westminster City Council, had in fact been heard and decided by a panel of Councillors which consisted of only two members, whereas the employee in that case was entitled to insist on the attendance of the third member and the Industrial Tribunal held that it could not be accepted that the decision of a two-member panel was reasonable, lawful and proper because the Regulations relating to the composition of sub-committees could not operate to deprive the employee of his contractual right to have his appeal heard and decided by an appeals tribunal consisting of three members.The Employment Appeal Tribunal held in that case that the denial to the employee of his contractual entitlement was so fundamental a defect in the dismissal procedure that the only conclusion could be that the dismissal was unfair and therefore, the appeal was allowed and the decision of the Industrial Tribunal was reversed. The President dealt with the matter in this way in paragraph 17 of the judgment:
"17 It is true that the Industrial Tribunal took into account the defect in the composition of the appeals tribunal and concluded that that defect did not render the dismissal unfair. Mr Kurrein submitted that a decision which took proper account of that matter could not be characterised as perverse. This argument does not, however, meet the point that the Industrial Tribunal failed to appreciate that, as a matter of law, the defect in the composition of the appeal tribunal was not simply a matter of `procedural error'. There was a fundamental flaw in the composition of the appeals tribunal affecting its jurisdiction to determine the appeal. We repeat that Mr Cabaj did not have his appeal heard and decided by a properly constituted tribunal. In the case of Stoker v Lancashire County Council [1992] IRLR 75, the Court of Appeal emphasised the importance, with regard to internal appeals, of addressing the fact that an employee has not been accorded a right of appeal to which he was contractually entitled. It is not a question of looking at the reasonableness of the actions of the council. The legal error, in our view, was in regarding the defect as a procedural error instead of a significant contractual and jurisdictional failure. For those reasons we should allow the appeal."
It is by way of alleged parity of reasoning with that case that Counsel, on behalf of the Appellant today, has sought to persuade us that this matter should be allowed to proceed to a full hearing.Before we consider the application of the important case of Cabaj to the circumstances before us, we remind ourselves of course, that the Appellant only has to show an arguable ground of appeal in order for the matter to proceed to a full hearing of the appeal.We find it appropriate next to look at the way the Industrial Tribunal approached this matter. In our judgment, on the proper interpretation of the first two sentences of paragraph 10 of the Industrial Tribunal decision, it is clear that the Industrial Tribunal found, as a fact, that the Respondents were in breach of contract in not allowing the Appellant to have a Solicitor represent him before the appeal hearing. In our judgment, that is clear both from the way in which they put the matter in the first two sentences of paragraph 10 and is made even more clear by the penultimate sentence in paragraph 11 which, in our judgment can only be read as a finding by the Industrial Tribunal that the employers were in breach of contract.In our judgment, it is clear from paragraph 11 that the Industrial Tribunal, having decided that there was a breach of contract, went on to consider the question of whether the dismissal was as a whole unfair, by application of the wording of Section 57(3) of the 1978 Act and they looked at the matter in this way:
"11. ... In those circumstances we did not believe that the employers' action had made the dismissal as a whole unfair. We regarded our task to look at the substantial merits of the case, and we could not say that a person who, on his own admission, had been altering receipts could complain that he subsequently lost his job."
In our judgment the Industrial Tribunal here approached the matter correctly. In our judgment, the extent to which an Industrial Tribunal must have regard to a breach of contract depends crucially on the nature of the breach. The breach here, although it was a breach of contract, was of a quite different order of importance from the nature of the breach in the Cabaj case which was held to be a fundamental flaw in the composition of the Appeals Tribunal which affected its jurisdiction to determine the appeal. By comparison the breach here, important though it was, related only to the fact that a Solicitor was not able to represent the Appellant at the appeals hearing.In our judgment, it is apparent from paragraph 11 of the decision of the Industrial Tribunal, that the Industrial Tribunal gave sufficient and proper weight to that breach and correctly characterised it in the circumstances here as a breach of contract which did not amount to a significant contractual and jurisdictional failure.In our judgment, the Industrial Tribunal were entitled to place the breach of contract in the scales when they were considering the whole picture under Section 57(3) in order to determine the crucial question, namely whether the dismissal was fair or unfair and in our judgment the Industrial Tribunal were justified in reaching the conclusion that the employer's action in not allowing a Solicitor to represent the Appellant on the appeal procedure had not made the dismissal, as a whole, unfair. In our judgment in circumstances where, as unhappily in this case, the Appellant had admitted that he had falsified a very large number of receipts, it is apparent that representation by a Solicitor at an appeal hearing could not have made any difference to the result and that is how we interpret the Industrial Tribunal's conclusion in the last sentence of paragraph 11. It is to be noted that the Industrial Tribunal found in paragraph 12 that they would, in any event, have reduced any compensation by 100% which, in our judgment, is a clear indication that they had concluded that in the particular circumstances of this case, the breach of contract was not a matter which had any unfair consequence with regard to the action taken by the employers and, accordingly, we are unanimously of the view, having taken carefully into account the different circumstances in Cabaj v Westminster City Council that there is no arguable ground of appeal in this particular case.Accordingly we must dismiss this application.