Nicholson v DFDS Ltd [1996] UKEAT 476_95_0703

EAT
Nicholson v DFDS Ltd
[1996] UKEAT 476_95_0703 · 1996-03-07

JUDGE N BUTTER QC:

For nearly 10 years Mrs Nicholson was employed by DFDS Ltd as a secretary. From November 1988 she was employed as secretary to a manager, who at the relevant time was Mr Cray. Her duties included looking after the so-called petty cash. This involved, among other things, carrying out a monthly reconciliation and returning a record of it to the employer's Accounts Department. She was trusted and Mr Cray did not carry out checks in respect of what she was doing.In January 1993, a very large discrepancy was revealed, approximately in the sum of £34,000. A number of meetings were held between Mrs Nicholson, managers and the accounts staff. She was unable to explain what had occurred and on 21 January 1993 she was dismissed.So it came about that she applied to the Industrial Tribunal at Bury St Edmunds maintaining that she had been unfairly dismissed. That Tribunal sat on 23 February and 9 March 1995 and gave extended reasons which were sent out on 22 March 1995. It was their unanimous decision that Mrs Nicholson had not been unfairly dismissed. She is dissatisfied with that decision and now appeals to this Tribunal today.In their extended reasons the Tribunal set out the main facts and dealt with what occurred in January 1993. The discrepancy came to light when Mrs Nicholson was away ill. Mr Cray undertook the annual reconciliation and it was he who discovered that there was a discrepancy in relation to cash of a sum of £34,000 or so. He advised the Accounts Department immediately of the problem; he contacted Mrs Nicholson and asked her to come in immediately to look into the matter and she duly came the next day. She was left for some considerable time with the paperwork to see if she could see the source of the problem but she was unable to do so.It was against that background that a number of meetings were held which are referred to by the Industrial Tribunal in their reasons. The Tribunal expressed the view that they were satisfied that the Applicant was made fully aware of the seriousness of the position in particular by Mr Cray who himself was much concerned.A meeting was called with the senior management which Mrs Nicholson attended. The Tribunal say in paragraph 6 of their reasons:
"6 ... It was not made clear to her prior to the meeting that this was of a disciplinary nature nor was she given the opportunity to have with her a witness as was required by the respondents disciplinary procedure. However, there is no doubt that the meeting was of a disciplinary nature. ..."
On behalf of Mrs Nicholson today, it is argued that that finding was inappropriate because the evidence given by Mr Cray was that this was merely an enquiry meeting, but in a sense the Tribunal's decision was a finding in favour of Mrs Nicholson, because if there was a disciplinary meeting then all the greater were the obligations on the employers to comply with the appropriate procedure.The Tribunal go on to deal with what happened thereafter. The managers came to a decision that Mrs Nicholson would have to be dismissed on the grounds of gross negligence, amounting to gross misconduct and she was advised that she was being summarily dismissed. At page 35 is the letter of 22 January, in which Mr Cray writes to say:
" ... I write to confirm the reason for your summary dismissal on 21 January. ..."
He goes on to deal with the severe problems with Mrs Nicholson's records and then says:
"You were interviewed several times by me, by the Chief Accountant, Mr J Norman, and by the Deputy Managing Director, Mr D Connolly and were also seen by Mrs Stanesby. You were unable to offer any explanations for the discrepancy, or for the very bad state of the records. It appears, and you did not disagree, that the petty cash had not been reconciled for the whole of 1992."
The letter goes on to say:
"After serious consideration by the Managing Director and Deputy Managing Director it was decided that in view of the magnitude of the potential loss and the fact that it is as a direct result of your negligence, there was no option but to summarily dismiss you. It is stressed that although the matter has been reported to the police for investigation, your dismissal is because of extreme negligence constituting gross misconduct, not because of any alleged dishonesty."
In their reasons the Tribunal then turned to consider the matters of law which had to be taken into account. In paragraph 7 they say correctly:
"7 The first task for the tribunal is to consider the reasons for dismissal. We are satisfied that the reason for dismissal was one relating to the applicant's conduct and fulfilled the requirements of section 57(2)(a) [they should have said (b)] of the Employment Protection (Consolidation) Act 1978 . The conduct in this case being gross misconduct arising from the gross negligence of the applicant in failing to maintain correctly the accounts for which she was responsible."
The Tribunal then go on in paragraph 8 to say:
"8 We have then asked ourselves the question as to whether the misconduct was of such a nature as to justify the employer considering that dismissal was a reasonable response to the act complained of. The respondents might well have treated the situation as one of suspected theft but they chose not to do so, in our view quite properly, but instead approached the matter as one of a very serious failure in the applicant to perform her duties. ..."
They amplify that in the remainder of paragraph 8. In paragraph 9 they say:
"9 It is the tribunals view that the nature of the negligence was so grave and the result so serious that the respondents were reasonable in treating the negligence as gross misconduct and dismissal as being an appropriate remedy for that misconduct."
Those are clear findings by the Tribunal, they having correctly, as it appears to us, directed themselves as to the relevant issues of law. They turn in paragraph 10 to consider the procedures which had been adopted and refer to Section 57(3) of the 1978 Act. They go on to say:
"11 There is no doubt in our mind that there was in this case a relevant failure in the procedures followed by the respondent company. There was in existence a disciplinary code and it was clearly the duty of management to follow that code. ..."
They then go on to set out what they described as serious defects, but then go on to say:
"We now must ask ourselves whether the defects in the procedure followed by management was so grave that in themselves they meant that the test posed by section 57(3) were not satisfied by the respondents in their decision to dismiss. ..."
They go on to consider the matter further and in the end say:
"In all the circumstances we consider that notwithstanding the defects of the procedure they were not sufficiently grave in denying the applicant the rights which she is deemed to have in accordance with the rules of natural justice to answer the allegations put to her and that the respondents have therefore satisfied the test that it was reasonable for them to dismiss in the particular circumstances for gross misconduct being gross negligence in the carrying out of the applicant's duties. ..."
They reached the conclusion accordingly that the application failed.We are grateful to Counsel, on both sides, who have presented their respective cases shortly but clearly. The Employment Appeal Tribunal is not a review body. We are here to consider errors of law which can include a perverse finding by an Industrial Tribunal. We find it impossible to say that any error of law has been demonstrated or any perversity by the Industrial Tribunal. In our judgment, they have correctly applied the law. They were entitled to reach the various conclusions on the facts which they have found.In the result, it is our unanimous view that the appeal fails and must be dismissed.