Shepherd v Lonrho Textiles Ltd [1996] UKEAT 563_95_0310

EAT
Shepherd v Lonrho Textiles Ltd
[1996] UKEAT 563_95_0310 · 1996-10-03

JUDGE CLARK:

This is an appeal by Mrs Shepherd against a decision of the London (North) Industrial Tribunal sitting on 5 December 1994 and 30 March 1995, dismissing her complaint of unfair dismissal against her former employers Lonhro Textiles Ltd. Extended reasons for that decision are dated 12 April 1995.From 1 November 1989 the Appellant was employed as Manageress of the Respondent's Accord retail outlet within Debenhams Oxford Street Store. On 18 February 1994 she was summarily dismissed for alleged gross misconduct. The specific charge laid against her under the Respondent's disciplinary procedure was unauthorised possession of the company's goods.The background to her dismissal was this: the Respondent operated a staff discount system. That system involved the completion of a form with three copies. One copy (the yellow one) was retained by the staff member making the purchase. A (blue) copy went to Divisional Head Office as did the top (white) copy, together with the staff member's payment cheque. The fourth (pink) copy was retained in the store.The evidence showed that the Appellant had used that system correctly on two earlier occasions. The material incident arose in this way: in August 1993 the Appellant wished to purchase items of bedding at staff discount. She completed the relevant documentation. Ultimately the matter turned on a dispute between the Appellant and her Manager, Mr Molloy. It was his account that having made out the relevant documentation, he told her that the goods would be further reduced in a few days time and she would be entitled to a further discount. She said that she would like to take an advance but was not in a position to pay. It was his account that he cancelled out the paperwork which she had prepared and said when she was in a position to pay she should make out new paperwork showing the relevant prices. He said he spoke to her later in about October to ask whether she was still going ahead with the purchase. She said she was still not in a position to pay and that he said she should not wait too long and new documentation should be made out at the time of purchase showing the further discount.On the other hand the Appellant contended that Mr Molloy told her she could take the goods when she liked and pay for them when she liked. That account was subsequently categorically denied by Mr Molloy. It would have meant goods leaving the store without having been paid for and without any record of the goods' whereabouts being made. That was something which the Appellant would not allow her staff to do, and something which she accepted was contrary to the Respondent's procedures.Nevertheless, that is what the Appellant agrees she did. She removed the goods from the store shortly before Christmas; tendered no payment and completed no new documentation. The matter came to light in February 1994. A member of the Appellant's staff, Mrs Tierney, sent copies of certain internal documents to Head Office, alleging procedural irregularities. Mrs Tierney was herself facing disciplinary proceedings, and it seems that there was no love lost between her and the Appellant.Amongst those documents were the two forms completed by the Appellant and cancelled by Mr Molloy in August 1993. Mr Molloy it seemed carried out a check and could find no trace of those goods in the store, nor on the store's records in February 1994. He interviewed the Appellant, she admitted that she had taken the goods from store and there was no paperwork and no payment tendered for the goods. He summarily dismissed her.The Appellant exercised her right of appeal. That appeal was heard by Mr Dixon, Head of Operations, and Mr Whiteley, then Head of Personnel. The appeal was dismissed. She presented an Originating Application to the Industrial Tribunal.The Industrial Tribunal decision.Having set out the primary facts as it found them, the Industrial Tribunal was critical of the Respondent's procedural approach in allowing Mr Molloy, whom the Appellant subsequently contended had given her permission to remove the goods without paying for them, to conduct the first stage disciplinary hearing leading to her dismissal. However the Tribunal went on to find that any defects at the initial disciplinary stage were rectified by the appeal hearing, which they found to be thorough.The Industrial Tribunal also directed themselves as to the test laid down in British Home Stores v Burchell [1978] IRLR 379 . As this Appeal Tribunal has recently observed in Boys & Girls Welfare Society v McDonald [1996] IRLR 129 , Burchell was decided before the alteration to Section 57(3) of the Employment Protection (Consolidation) Act 1978 , effected by Section 6 of the Employment Act 1980 , removing the burden of proof on an employer to establish the reasonableness of the dismissal. Thus, in the instant case, too high a burden was placed on the Respondent, but nevertheless it appears that the Respondent succeeded in discharging such a burden, to satisfy the Industrial Tribunal that it had acted reasonably in dismissing the Appellant.The thrust of Ms Davies' appeal on behalf of Mrs Shepherd is directed to paragraph 11 of the Industrial Tribunal's reasons, where it is said:
"We considered whether the Applicant was reasonable in assuming that Mr Molloy had given her permission to take the goods home and pay for them as and when she wished. The Applicant's own evidence was that, as a manageress, she would not have allowed a fellow employee to have taken goods home without paying for them. Her sister, Mrs O'Leary, agreed that employees could not take goods home without paying for them. It is inconceivable that the Applicant could have believed that she could have taken goods home without paying for them. We are satisfied that the Respondent in the circumstances carried out as much investigation as was reasonable in all the circumstances. The Applicant admitted that she had taken the goods home without payment."
Ms Davies submits that the Industrial Tribunal substituted its own view for that of the employer by forming its own judgment. That is, that it was inconceivable that the Appellant could have believed that she could have taken goods home without paying for them.We agree that the question for the Industrial Tribunal is not whether it found the Appellant's account credible or incredible, but whether the employer had reasonable grounds for disbelieving the Appellant. Had the Industrial Tribunal reached a different conclusion as to its view of the Appellant's credibility in paragraph 11 of its reasons, and as a result found this dismissal to have been unfair, we could envisage an arguable appeal point on behalf of the employer. But it did not reach that conclusion. It rejected the Appellant's case. It must therefore follow, as Ms Davies accepts, that if, on appeal, Mr Dixon asked himself whether the Appellant could have been under a misapprehension as to permission which she believed Mr Molloy had given her to remove the goods without paying for them or recording their removal, and had concluded that she was not, then that belief on his part was reasonable.Accordingly, the real question in this appeal is whether there was evidence before the Industrial Tribunal that Mr Dixon had considered the Appellant's belief when she removed the goods from the store. Having considered the Chairman's Notes of Evidence we are satisfied that there was. In examination in chief, Mr Dixon said:
"We took into account Mrs Shepherd setting aside the goods in August and removing the goods before Christmas.
In November and January she purchased further items and followed the correct procedures.

For these reasons we upheld the decision." [that is to dismiss]

Later he said:
"I decided to uphold the decision. We took into account (1) the personal vendetta by Ms Tierney towards Mrs Shepherd. (2) Two purchases in November and January. (3) We checked with Sue Burgess that Mrs Shepherd admitted she had taken the goods. (4) Mr Molloy categorically denied he had given permission to remove the goods from the store."
In cross-examination, Mr Dixon said that:
"If a misunderstanding was alleged I would have to be 100 per cent satisfied she had misunderstood."
Later he said:
"I asked Mr Molloy three times - did he give Mrs Shepherd permission to take the goods."
Then his cross-examination concluded:
"We decided Mrs Shepherd was fully aware of the staff purchase procedures, supported by the purchases in November and January and supported by what Mr Molloy had told us.

We did not make any finding of this situation being exceptional."

In our judgment, looking at his evidence as a whole, it seems to us to be clear that Mr Dixon had in mind the case advanced by Mrs Shepherd that she had misunderstood what Mr Molloy had said to her and believed that she had his permission to remove the goods from the store. But, for the reasons given, Mr Dixon rejected that case.In these circumstances, we conclude that by finding as it did in paragraphs 8 and 12 of the reasons, that any defects in the disciplinary hearing were rectified by the appeal hearing, the Tribunal reached the permissible conclusion that the Respondent had reasonable grounds for its belief, following a reasonable investigation, that the Appellant was guilty of unauthorised possession of the company's goods and that such a belief involved the rejection of the Appellant's case that she had been given permission by Mr Molloy, or believed that she had his permission to remove the goods without paying for them.Accordingly we can see no error of law such as to vitiate the Tribunal's conclusion that this dismissal was fair and we must therefore dismiss the appeal.We will make the usual order for Legal Aid taxation of the Appellant's costs.