Tesco Stores Ltd v Sams [1996] UKEAT 1237_95_0412

EAT
Tesco Stores Ltd v Sams
[1996] UKEAT 1237_95_0412 · 1996-12-04

JUDGE PETER CLARK :

This is an appeal by the employer, Tesco, against a reserved decision of the Bedford Industrial Tribunal that the employee, Mr Sams had been unfairly dismissed. The tribunal further found that he had contributed to his dismissal to the extent of 70%. Extended reasons for that decision are dated 5th October 1995.The facts as found by the tribunal were these. The respondent was at the material times employed by Tesco as an HGV driver on nights based at their Milton Keynes depot. He had a total of 15 years service with the Company in various capacities. He had no disciplinary record.The system of payment was as follows. He was guaranteed pay of 42½ hours per week; of those hours 36½ were paid at the basic rate and six hours were guaranteed overtime. Any hours worked over 42½ were paid at the greatest premium rate. After five hours worked on any shift half an hour was taken as an unpaid break.As an HGV driver the respondent had a tachograph fitted in his cab to record his driving hours. In November 1994 the night superviser, Mr Notridge carried out a check on the respondent's driving records, including the tachographs. He discovered that the respondent had been taking unauthorised breaks which were not being declared. As a result the respondent had exceeded the weekly 42½ hours on a limited number of occasions whereby he had been paid for those extra hours at the premium rate. This became clear from a detailed examination of his records.Disciplinary proceedings ensued. First, an investigatory meeting held by Mr Notridge on 3rd January 1995. The notes of that meeting were before the Industrial Tribunal. When the allegation was put to him the respondent is quoted as saying "I'm not going to lie to you or insult your intelligence. I'd have parked up asleep." When it was put to him that as a result of not booking the breaks he had received overtime beyond the 42½ hours he was recorded as saying he did not want overtime and was prepared to give the money back.He was suspended on full pay and the process moved to the next stage, a disciplinary hearing. That took place the following day before Mr Cloono, the operations manager. At that meeting the respondent claimed that what he was doing was custom and practice among the night shift. This was a matter of some importance. If it were right, it may be argued that to discipline him and not others would be unfair. After investigation the Company rejected that plea as did the Industrial Tribunal. Mr Cloono decided that the respondent was guilty of gross misconduct and summarily dismissed him. Appeals followed; each was dismissed.

The Industrial Tribunal decision

The first question, dismissal being admitted, which the tribunal asked itself was, what was the reason for dismissal? Their finding is set out at paragraph 7 of the reasons in these terms:
"7. The next matter is the reason. The onus is on the employer to show a reason. The case for the employer is that the Applicant was dismissed for misconduct, the conduct was in relation to taking unauthorised breaks and not declaring them. This amounted to an act of fraud in that overtime which would not otherwise have been paid had to be paid. This was gross misconduct."
They record at paragraph 8 the respondent's case that the Company's real reason for dismissal was to escape liability for making him a redundancy payment. That contention was rejected.The tribunal found, at this stage of their enquiry that the respondent was dismissed for misconduct for taking unauthorised breaks and not declaring them in the context of the pay structure of the Company. That is a somewhat convoluted way of saying that he claimed overtime payments to which knew he was not entitled and that what he did was wrong. That plain finding is indeed recorded by the tribunal at paragraph 15 of the reasons, when dealing with the question of contribution.The tribunal then turn to the question of reasonableness under section 57(3) of the Employment Protection (Consolidation) Act 1978 . First they consider the well-known Burchell test. Overlooking the alteration in the law affected by the Employment Act 1980 after Burchell was decided, the tribunal nevertheless express themselves to be satisfied that the employer had reasonable grounds for its belief that the respondent had not declared breaks which resulted in extra overtime being generated, and that such belief was formed following an adequate investigation.So far so good for the employer. All the hurdles had been jumped on the way to a fair dismissal.Finally, they turned to the question as to whether dismissal was a fair sanction; whether it fell within the range of reasonable responses.In paragraph 13 of the reasons they very properly consider a number of potentially relevant factors; they found that he did what he did openly and that he had long service. However, they point out that if what the respondent had done was gross misconduct, his long service would be of little avail.It is at this last hurdle that the employer fell, according to the Industrial Tribunal. They were not entitled to treat what the respondent did as gross misconduct. Accordingly, said the tribunal, dismissal fell outside the range of reasonable responses and was unfair.

The Appeal

Mr Thompson puts the appeal on two grounds. First, that the tribunal erred in law in failing to find that this was a case of gross misconduct. Put more forensically, he submits that the tribunal misdirected itself in law by substituting its own view for the of the employer in concluding that this was not a case of gross misconduct. Secondly, and in the alternative, he submits that this decision was perverse.In reply Mr Linden supports the tribunal's decision and reasoning on the following grounds:(1) There was here no misdirection. The tribunal expressly directed themselves in paragraph 14 of the reasons as to the need to consider the range of reasonable responses test and not to substitute their own view for that of the employer. Further, in paragraph 13, where the tribunal say:
"We are satisfied that it did not amount to gross misconduct and indeed the Respondents in all the circumstances could not have properly found it to be and dismissed him as a consequence."
And later:
"We are satisfied that in the context of the Applicant's employment and the situation of how it worked at the Milton Keynes depot on the night shift, his actions could not be properly found to amount to gross misconduct under this particular provision."
The expression "could not properly be found" is shorthand for "reasonable employer could find".(2) The tribunal was entitled to conclude, based on the four factors which it identified in paragraph 13 of the reasons, and which Mr Linden developed in argument, that no reasonable employer could apply the sanction of dismissal on the facts of this case. Unless we are able to say that that conclusion is perverse, it must stand.(3) This is not a case of perversity. It is a decision on the facts which falls within the range of responses open to a reasonable Industrial Tribunal.In the course of his submissions he accepted that the tribunal had rejected the custom and practice argument advanced by the respondent, and further, that on a fair reading of the tribunal's decision, had they found that this was a case of gross misconduct they would have found the dismissal to be fair.

Perversity

There has been much debate in the authorities as to when it is open to an appellate tribunal or court to allow an appeal on the grounds of perversity.From the homely exclamation: "My goodness that was certainly wrong" uttered by May LJ in the course of his judgment in Hereford & Worcester County Council v Neale [1986] IRLR 168 , to the "impermissible option" test formulated by Lord Donaldson MR in Piggott Brothers & Co v Jackson [1991] IRLR 309 , to the attempt to reconcile the two approaches by Wood J in Berkshire Health Authority v Matadeen [1992] IRLR 336 , the higher courts have attempted to put into words precisely what is the relevant test.To help us further in our task Mummery J collated the various expressions used in the past in this passage in his judgment in Stewart v Cleveland Guest (Engineering) Ltd [1994] IRLR 440 , 443:
"This Tribunal should only interfere with the decision of the industrial tribunal where the conclusion of the tribunal on the evidence before it is "irrational", "offends reasons", "is certainly wrong" or "is very clearly wrong" or " must be wrong" or "is plainly wrong" or "is not a permissible option" or "is fundamentally wrong" or "is outrageous" or "makes absolutely no sense" or "flies in the fact of properly informed logic"."
What is absolutely clear is that an appellant relying on perversity has a mountain to climb. It is not enough that we would ourselves have reached a different conclusion on the facts of the case. We must be satisfied that no reasonable Industrial Tribunal, properly directing itself, could reach the conclusion reached by this tribunal.

Conclusion

Assuming that Mr Linden is correct in submitting that this tribunal did not substitute its own view for that of the employer in deciding that this was not a case of gross misconduct we are left with this proposition; no reasonable employer, on the facts as found, would characterise the respondent's behaviour as gross misconduct.In our judgment, such a finding is perverse in all or any of the senses identified by Mummery J in Stewart's case, for the following reasons.We remind ourselves of the tribunal's findings of fact. On a number of occasions the respondent claimed overtime payments to which he was not entitled. That is what the tribunal found the employer reasonably believed he had done. That is an offence of dishonesty and therefore of gross misconduct. To find otherwise is wholly irrational.Further, the tribunal say this at paragraph 13 of the reasons:
"One would expect an act of gross misconduct to be either one so clear as to not need setting out in the rules or else be set out in the rules. Here it was not set out in the rules and indeed the paragraph relied upon was number 13; "Any other action which the Company considers on a common-sense interpretation to be a serious infringement of normal industrial discipline or practice.""
We would make the following observations. First, dishonesty of this type is so obviously gross misconduct that it does not need to be set out in an employer's disciplinary rules. The tribunal found as a fact that the respondent knew what he was doing was wrong and that it was dishonest. Secondly, it if did not appear in this employer's rules the proviso, which the tribunal incorrectly refer to as rule 13, plainly covers the facts here, but thirdly, the first example of gross misconduct in the Tesco Rules reads; unsurprisingly:

"misappropriation of theft of Company or employee's property."

False overtime claims leading to overpayment of wages to which an employee know he is not entitled amounts to theft from the employer.We have also considered the tribunal's finding at paragraph 13 of the reasons that the respondent was open about what he was doing. It that means that he was persistently claiming overtime to which he knew he was not entitled we cannot see how that makes the offence less, rather than more serious. It might be otherwise if everyone was doing it, as the respondent alleged. That it was 'custom and practice'. But the tribunal rejected that suggestion, holding that the employer acted reasonably in similarly rejecting that contention, based on a detailed comparison of other drivers hours.We accept that the respondent admitted to what he had been doing as soon as he was taxed with it by Mr Notridge, but that does not affect the nature of the offence. Further, it is of no significance that a workmate, Mr Quilter, was aware that the respondent was taking unauthorised breaks. There is no finding that management became aware until Mr Notridge carried out his check.In these circumstances we allow the appeal. The question then arises as to what course we should take with this case. Mr Thompson urges us to substitute a finding of fair dismissal; Mr Linden submits that we should remit the case for rehearing to a different Industrial Tribunal.We agree with the course proposed by Mr Thompson. Given the tribunal's findings it is abundantly clear that had it correctly concluded that this was a case of gross misconduct, it would have found the dismissal fair, notwithstanding the other factors which it mentions in paragraph 13 of the reasons, in particular, the respondent's length of service. See AEI Cables Ltd v McKay [1980] IRLR 84 . We are satisfied that this is a case in which it would be absurd to send the matter back to the same or a different Industrial Tribunal. We shall substitute what we consider would inevitably be the answer on remission, namely a finding of fair dismissal. See McLaren v NCB [1988] ICR 370 , 378D-G, per Sir John Donaldson MR. In applying that dictum we have not overlooked the approach of the Court of Appeal in Westminster City Council v Cabaj [1996] IRLR 399 . This is a wholly different case to Cabaj . Here, an Industrial Tribunal properly directing itself on the facts as found would in our judgment be bound to conclude that the dismissal was fair.We shall make that declaration accordingly.